May 19, 2017 2:00 am JST

Kubota building up Chinese construction machinery business

Osaka manufacturer will hike output 50% as infrastructure boom lifts demand

A Kubota plant in Jiangsu Province.

OSAKA -- Kubota will boost Chinese production of mini-excavators and other small construction machinery by 50% this year, turning that country's infrastructure offensive into a win for its second-largest business.

The Japanese machinery maker will step up output at its plant in Wuxi, Jiangsu Province, aiming to churn out 2,700 units in 2017. Some 70 staff will be added to take advantage of untapped production capacity, expanding the workforce around 30%. The company will also send Japanese instructors to teach parts suppliers in China how to improve production.

The Wuxi plant has made small construction machinery, used for urban development and home construction, since 2012. China's efforts to stoke the economy with infrastructure investment have expanded the market for these tools. Building repairs and installation of greenery along roadways have grown more common. Kubota's construction machinery sales doubled on the year in volume terms for the January-March quarter.

Revenue from small construction machinery came to around 213 billion yen ($1.91 billion) in 2016. North America is the leading market for such tools, demand for which has been lackluster in China since economic growth began to slow in the middle of the current decade.

Agricultural machinery, Kubota's biggest business, faces increasingly stiff competition in North America, leading the Osaka-based manufacturer to downgrade its earnings forecast for the January-June half.

(Nikkei)

Kubota Corp.

Japan

Market(Ticker): TKS(6326)
Sector:
Industry:
Producer Manufacturing
Trucks/Construction/Farm Machinery
Market cap(USD): 21,295.18M
Shares: 1,241.15M

Get Insights on Asia In Your Inbox

To read the full story, Subscribe or Log in

Get your first month for $0.99

Redeemable only through the Subscribe button below

Once subscribed, you can…

  • Read all stories with unlimited access (5 articles per month without subscription)
  • Use our smartphone and tablet apps

To read the full story, Subscribe or Log in

3 months for $9
SUBSCRIBE TODAY

Take advantage of this limited offer.
Subscribe now to get unlimited access to all articles.

To read the full story, Update your account

We could not renew your subscription.
You need to update your payment information.

To read the full story, Subscribe or Log in

Once subscribed, you can…

  • Read all stories with unlimited access (5 articles per month without subscription)
  • Use our smartphone and tablet apps

To read the full story, Subscribe or Log in

3 months for $9
SUBSCRIBE TODAY

Take advantage of this limited offer.
Subscribe now to get unlimited access to all articles.

To read the full story, Update your account

We could not renew your subscription.
You need to update your payment information.