Japanese manufacturer Kobelco has recorded high levels of growth in its domestic market, whilst international markets saw a drop in demand. The firm announced that aggregate demand in the domestic crawler crane market in the fiscal year 2013 was up by 47% from the previous year. The company said that the improvement was due to an increase in the number of public work projects significantly because of the availability of deferred funds from the large-scale supplementary budget of fiscal 2012 and other factors, in addition to reconstruction demand.
In the manufacturer’s overseas markets aggregate demand was down 6% compared to last year according, to an estimate by Kobelco Cranes. The Japanese firm saw increases in North America mainly in shale gas-related investments, as well as in Southeast Asia with active infrastructure investment centered in Singapore and Malaysia, and in Hong Kong. However, these results were tempered by sluggish growth in Europe, the Middle East, China, and India.
The company said that the weakness of the Japanese Yen in comparison to other currencies as well had affected the firms business. Although a higher ratio of sales overseas had been recorded.
Describing its domestic production Kobelco said it achieved higher profits by increasing production to accommodate a large number of inquiries and orders. The company has been finding new overseas suppliers and preparing an assessment procedure for new parts. The manufacturer believes that it has developed a solid foundation for global procurement that will capable of dealing with risks caused by exchange rate fluctuations.
The company had factories in India and China where production and unit sales were slow Kobelco said this was because demand in both countries remained stagnant. The company anticipates demand to pick up momentum in 2014 after receiving a large order at the end of last year. In China, Kobelco have put effort into strengthening local distributors and made preparations for product lineup expansion.
The firm’s consolidated net sales in 2013 increased 24.5% year on year to JPY56,639, consolidated ordinary income increased JPY5,450m to JPY3,200m, and consolidated net income increased JPY6,376m to JPY3,531m.
Looking forward to next year the Japanese company said that demand for crawler cranes in the domestic market was expected to grow more than last year and remain strong since the operating conditions for construction machinery remain high due to active public investments and other positive economic factors such as the Tokyo Olympics.
In overseas markets, demand in North America and Southeast Asia is expected to remain steady, and demand in India, China, and Europe has been gradually recovering from stagnation.
In production terms Kobelco was looking to continue implementing its Cross Magma Project, switching from make-to-stock production to assemble-to-order production. The company was looking to establish a production system with higher efficiency to provide a better response to higher demand.
The manufacturers subsidiaries in China and India would continue reducing costs through local procurement. At the same time, these units would strengthen their sales and service networks, improve their product lineup, and aim at building a structure capable of meeting recovering demand.
Net sales in 2014 are forecast to reach approximately JPY73,000m and ordinary income is anticipated to be JPY3,500m.