A Komatsu ABX series electric forklift

Komatsu Ltd has invested JPY6.9 billion (USD61 million) in a Russian facility that will produce forklifts and construction and utility equipment.

This will be Komatsu's 47th production facility for construction and mining equipment, and its second Russian plant after Kraneks International Co Ltd, a manufacturing joint venture for metal works established in Ivanovo in 1998.

Komatsu's new manufacturing company in Yaroslavl will be its first assembly plant in Russia. By June 2010, the plant will start producing PC200 hydraulic excavators and later PC300 and PC400 models. In 2011, production of internal combustion and electric one- to two-ton forklifts will start. Production of skid steer loaders will follow.

Komatsu says it will exploit synergies through the combined production of compact equipment and forklifts in the same line.

The company has traditionally exported its products to Russia from China. The new plant is being established to respond to a future increase in demand.

"Demand for construction and mining equipment has been expanding steadily, totalling about 18,000 units for seven major equipment types in 2006. (The seven equipment types are crawler-type hydraulic excavators; wheel-type hydraulic excavators; bulldozers; wheel loaders; rigid-type dump trucks; articulated dump trucks; and motor graders.)

"We anticipate demand will surpass 32,000 units in 2009. We also anticipate demand for forklifts will expand to 33,000 units in 2009, almost double from 2006," a Komatsu spokesman says in a statement.

Komatsu Manufacturing Russia will be established by April 2008. It will employ 500 people when full-scale production commences. The plant can produce 7,000 forklifts and 3,000 hydraulic excavators annually.

The subsidiary is expected to generate sales of about JPY50 billion (USD441.7 million) for fiscal 2011.