Record year for Komatsu

Komatsu had sales of JPY 2243 billion (US$ 22.4 billion) for the fiscal year ending 31 March, a +18,5% increase on the previous fiscal year. Net profits were up +26.8% to JPY 209 million (US$ 2.09 billion). The company's construction equipment sales were up +21% to JPY 1898 billion (US$ 19 billion).

The company said that although public spending was weak in Japan last year, equipment sales were reasonable. High global demand for construction equipment meant the prices for used machines exported from Japan were good, encouraging companies to renew their fleets. However, Komatsu said the hasty revision of Japan's building codes in the middle of last year damaged sales. Overall its sales on its home market rose +2.1% last year.

Komatsu's sales fell in North America due to the declining housing market. However, continued growth in Latin America, particularly for mining equipment meant Komatsu's sales in the America's were flat with the 2007 fiscal year last year.

In Europe and the CIS, improving markets in Germany and Eastern Europe, combined with shorter lead times, saw Komatsu's sales rise +32.9%. Growth was similar in Asia and Oceania at +37.8%, thanks to strong demand in major markets such as India and Indonesia.

However, the most pronounced growth was in China, where Komatsu's sales grew +62.3%. At +42.6%, growth was also strong in the Middle East and Africa, driven by rising prices for oil and other commodities.

In a bid to keep up with demand, last year saw Komatsu start construction of three new factories. One will be for mining excavators at the Japanese port of Kanazawa, a second will be for medium excavators and forklift trucks in Yaroslavl, to the northeast of Moscow, while a third facility to build crawler undercarriages is being set up in Jining, Shandong Province, China.

Forecast

Komatsu says it expects another +15% increase in sales over the next fiscal year, although it does see some difficulties. "There are some factors of concern such as an increase in prices of raw materials in addition to slack demand for construction equipment in the US. Komatsu, however, projects that thriving demand for construction and mining equipment should remain at a high level, particularly in emerging powers," it said in a statement.