TOKYO, Japan -- Recession in world markets has forced Komatsu Forklift to downgrade its outlook, suspend shareholder dividends, and implement "aggressive measures" to increase earnings.
Despite the half-year result prompting wide-ranging changes in company structure and focus, Komatsu expects to post a JPN1.3 billion (USD10.9 million) loss for the full year to March 31, 2002.
The company's net sales for the six months from April 1 to September 30 totalled JPN45.992 billion (USD386 million), a decline of 10.3 percent from the corresponding period in 2000.
The Japanese economy has deteriorated, leading to "drastic" cutbacks in private sector and personal spending, and the USA economy also slowed, which adversely affected Asian economies, Komatsu said in a statement.
"Furthermore, the terrorist attacks in the USA ... have given additional concerns that they may trigger further deterioration of world economies."
While domestic sales fell 1.7 percent to JPN27.8 billion (USD233 million), international sales "plummeted" 9.3 percent to JPN 14.1 billion (USD118 million).
Komatsu had increased its market share in the USA, but "was not able to catch up with the pace of sliding demand". Demand in south-east Asia dropped substantially as the US economy decelerated. Komatsu's only relief came from its China operation, which "continued to generate brisk demand with a promising outlook". As part of an alliance with Linde AG, Komatsu this year began producing forklifts in China.
To combat the slump in the worldwide forklift market, Komatsu plans to reduce group-wide costs by 15 percent by the end of the 2004 financial year.