Sales soar at Kobelco

Kobelco Cranes reported a 36.5% increase in consolidated sales for its latest financial half-year, amounting to Yen 34.6 billion (US$ 326 million).

According to the Japanese manufacturer, it sold 420 new machines in the six months between April and September 2007, a 20% increase over the 350 units sold in the same period 2006.

Nearly 80% of the units sold were crawler cranes destined for markets outside Japan with strong demand from the Middle East, North America and Southeast Asia. Consolidated ordinary income doubled during the six months, compared to the same 2006 period, from Yen 2.1 billion ($ 20 million) to Yen 4.3 billion ($40.2 million).

“In the Middle East investments are being made to rapidly expand production in the energy field and to improve infrastructure. Demand in South Korea continues to be brisk owing to the active shipbuilding industry. In Southeast Asia, demand for new cranes is growing due to the shortage of used machines. Demand in North America continues to expand, despite the slowdown in residential construction, while in Europe the market continues to be bullish,” said a Kobelco spokesman.

Demand in the Japanese market saw considerable recovery, added the company, with demand for crawler cranes increasing 30% over the same 2006 period, with rough terrains showing a 19% jump.

“On the production side, Kobelco began implementing just-in-time manufacturing and worked on shortening the lead times and improving overall production efficiency. These steps contributed greatly to the number of units sold,” said the spokesman.

By the end of the second half of the 2007 financial year, ending in March 2008, the company forecasts consolidated ordinary income rises of 53% to Yen 7.6 billion ($71.7 million). While the worldwide crane market is expected to remain strong, “factors that curtail profits – namely the rising cost of materials, due to high steel and oil prices and the difficulty in procurement – are of concern,” added Kobelco.