Kobelco Construction Machinery Company of Japan has reported consolidated net sales of 148,304 million yen for the year to 31 March 2002, down 6.4% from 158,392 million yen the previous year.
Operating income was 1,859 million yen, a drop of 64.3% from 5,203 million yen in fiscal 2000. Ordinary income (or pretax profit) decreased 78.9% from 3,111 million yen in fiscal 2000 to 656 million yen in fiscal 2001.
Kobelco said that both overseas and domestic market demand were sluggish. In Japan, demand for hydraulic excavators and cranes went down sharply due to curtailed public works projects, sluggish private-sector construction, and low capital investment from rental companies. In North America and Europe, demand for construction equipment leveled off. The Chinese market grew 40%, while Southeast Asia showed signs of recovery.
With sales of new machines hard to achieve, Kobelco focused on the sale of parts, used equipment and maintenance services.
To reduce operating costs, Kobelco consolidated crane production, reorganized marketing and servicing, reformed development processes, reduced lead time, and improved logistics.
Overseas, the company made vigorous efforts to expand business in the emerging China market, opened a used equipment centre in Singapore for the Southeast Asian market, and conducted sales promotion in North America and Europe backed by the weaker yen.
Kobelco consolidated its crane production base in September 2001 and combined the crane after-sales service organisation with that of the excavator business. It also began production and marketing of 25t rough terrains with carriers made by Tadano and also parts procured jointly with Tadano. New crawler crane models in North America and Europe contributed to maintaining overseas sales volume.
For fiscal 2002 (ending March 2003) Kobelco forecasts consolidated net sales of 145,000 million yen – another slight fall. Profitability is anticipated to improve due to lower costs and other measures implemented under its midterm business plan. Operating income is forecast to be 2,550 million yen. Ordinary income is estimated to reach 1,350 million yen, with net income of 300 million yen.
