Sales down but expansion up at Kobelco

Kobelco Cranes sold about 240 new cranes in the first half of the 2010 financial year, says the company, amounting to an 11% decrease over the 270 units sold in the same period last year.

The economic environment also led to a drop in consolidated net sales of 18% in the half year period, April to September, in comparison to the first half of the 2009 fiscal year. Consolidated ordinary income decreased 86.1%.

Domestic consolidated sales decreased 12.3% to 9 billion yen (US$109 million) at the Japan-based manufacturer, and overseas sales went down 21.2% to 14.4 billion yen ($174 million). Total sales decreased 18% to 23.4 billion yen ($283 million).

"Conditions in the overseas crane market continue to be severe, with demand remaining stagnant for the past two years with no sign of recovery since the global financial crisis in fall (third quarter) 2008. The US and European markets, which used to be the centres of demand, have declined considerably, and the worldwide market continues to be weak. Furthermore, the rise in the value of the yen has created a highly competitive environment. However, there is steady demand in some areas, such as India, due to the market shift to emerging countries," said a Kobelco spokesman.

"In the domestic crane market, due to uncertainty about the future and fewer projects, demand has continued to be sluggish. As a result, demand for both new crawler cranes and wheel cranes have been low," added the Spokesman.

Initiatives in the first half of the fiscal 2010 year included plans to manufacture in China and India, completion of backlog orders to increase sales and provided flexible customer support, the development of new models to strengthen the range and cost reductions to increase profitability.

China is the biggest single crawler crane market in the world, says Kobelco, with India expected to become the second largest market in the near future. In recognition, the manufacturer has established a joint-venture production and sales company in China, Chengdu Kobelco Cranes Co., Ltd., with local construction manufacturer Sichuan Chengdu Chenggong Construction Machinery Co., Ltd.

In India, Kobelco Cranes established Kobelco Cranes India Pvt. Ltd. in August by upgrading an existing representative office.