The move is designed to enable Kobelco to make a full-scale entry into India’s rapidly growing construction equipment market.
This plant is the Kobe Steel Group’s first manufacturing facility in India. It is located in Sri City, about 55km north of Chennai, and will be part of Kobelco Construction Equipment India KCEI), which currently markets and services Kobelco brand excavators from its headquarters at Noida near Delhi.
KCEI is a joint venture between Kobelco Construction Machinery and the ITOCHU Group. Kobelco will hold 95% equity share of KCEI.
With an initial capacity of 1,200 units per year, the plant will initially produce 20t-class machines, for which the demand is the highest in India. Flexible equipment will also enable KCEI to make large machines, to meet future growth in demand.
The plant was inaugurated by Kobelco Construction Machinery president Shigeto Kotani in the presence of Sam Bob, who is industries secretary of the government of Andhra Pradesh.
“Kobelco realized that increasing its presence in the steadily growing Asian region is vital for its growth,” said Kotani. “This led to the decision to build a plant in the Indian market. The construction machinery market is a global business and the Indian market is a huge potential market, after China, in the growing Asian region”.
Speaking on the occasion, Vikram Sharma, managing director and CEO of the Indian operations said: “Kobelco expects to grow rapidly with initiation of local manufacturing. The total investment is about Rs 100 crore [£13.6m] over a period of about three to four years.”
“On this occasion, I strongly welcome the initiatives from the Japanese investors to come forward to set up manufacturing units at Sri City in the State of Andhra Pradesh,” said Bob. Andhra Pradesh had taken steps to attract industries by introducing investor-friendly policies. ““I take this opportunity to once again request the Japanese investors to come to the state of Andhra Pradesh and set up their industries here,” he said.
“We are proud to have the Kobe Group establish its first manufacturing plant in India at Sri City,” said the managing director of Sri City, Ravindra Sannareddy. “This is a good location for the excavators industry as the State has the largest number of construction companies in India as well as the leading names in the industry.”
With this Indian plant in operation now, Kobelco Construction Machinery has plants at six locations - Japan, China, Thailand and India, in addition to US and Italy.
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