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Kobelco Construction Equipment India, which commissioned its hydraulic excavator manufacturing facility today, has charted out the next phase of its expansion.
The first of the construction machinery rolled out of the factory today at the Sricity SEZ, about 55 km north of Chennai, near Tada in Andhra Pradesh. The Rs 100-crore facility now produces 20-tonne hydraulic excavators and also plans to manufacture 14-tonne and 35-tonne units. It has the capacity to manufacture 1,200 units annually.
Mr Takeshi Akiyama, Director – Operations (factory), Kobelco Construction, said the factory would manufacture 1,000 units next year and reach full capacity the year after. Kobelco's ‘blue print' for the next phase of expansion charts a doubling of output in 2014-15.
Kobelco Construction is a part of the Japanese Kobelco Construction Machinery Co Ltd, one of the largest players in this segment and a member of the Rs 12,000-crore Kobe Steel Group.
The company, which has been selling imported units in India since 2007, sold over 400 excavators last year and expects to double sales in the current year. The cost advantage in local manufacture, avoiding a 24 per cent import duty, and a growth in demand would contribute to higher sales, said a company official.
The market for hydraulic excavators jumped 40 per cent in India in 2010 over the previous year when companies sold over 10,742 units.
Mr Vikram Sharma, Managing Director and CEO, Kobelco Construction Equipment, said the company may have to import about 25 per cent of its expected sales in the current year, while the balance would be met with domestic production which would be stepped up in stages.
Apart from key parts such as the engine, hydraulics and electronics which would continue to be imported, all the other components would be manufactured domestically. The company equips its machines with CRDI diesel engines from Hino, which has a presence in India; it has initiated talks with the company to consider production of these units here. This is a possibility when volumes grow, he said.
The company, headquartered in Noida, has built a 19-dealer, 52-service outlet network.
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