Kobelco merger set for 1 April

Kobe Steel, Ltd. and its subsidiaries, Kobelco Construction Machinery Co., Ltd. and Kobelco Cranes Co., Ltd. in Japan, concluded an agreement on 21 December to merge the cranes and construction machinery businesses.

The merger is planned to take effect on 1 April 2016. It was April 2004 when the crane business was spun off as a separate Kobelco business. Kobelco Cranes will now be reabsorbed into Kobelco Construction Machinery.

Kobe Steel Group said in its medium term business plan that it would strategically expand its machinery-related businesses. Kobe is merging the two companies as it “considers it necessary to further strengthen its business foundation and accelerate global development in relation to the construction equipment business.”

A company statement continued, “The merger is anticipated to improve business efficiency, strengthen product development capabilities, and bolster global development. It will also enable Kobe Steel to pursue new possibilities from the synergy derived from the accumulated technologies of its excavators and cranes. Considerations will continue with regard to the consolidation of domestic and overseas locations.”

Following the merger the business and its organisation will be reviewed throughout, including development, procurement, manufacturing, quality and sales. Combining and rearranging common operations will increase business efficiency, while the effective utilisation of management resources will strengthen management, the company said.

Synergies in product development will see resources combined for improving fuel efficiency and noise reduction, new materials, and other technologies. Combining the technologies of excavators and cranes will result in new products, the company said. Global sales and service capability will also be enhanced by combining resources worldwide.