Komatsu Utility Co Ltd, which produces and sells forklifts and mini-construction equipment, will integrate with its parent company, Komatsu Ltd, in a simplified absorption-type merger from 1 April.

Komatsu says the merger will improve its earnings and facilitate new growth in the future. Under the new organisational structure, the Japanese equipment manufacturer says it will be able to speed up its expansion in growing overseas markets and enhance its product development and competitiveness.

In recent years, Komatsu has structurally reformed its utility equipment business. In April 2007, Komatsu Forklift Co Ltd and Komatsu Zenoah Co merged to form Komatsu Utility Co Ltd (Forkliftaction.com News #294). This was to generate synergy in Komatsu technologies and resulted in reduced costs after Komatsu consolidated its production and sales operations in Japan and overseas.

Komatsu says the "promising markets" for forklifts are overseas and so it is imperative for it to operate its forklift business through partnership with its construction and mining equipment business that is already successfully operating globally.

Company spokesman Toshiyuki Takahashi tells Forkliftaction.com News that Komatsu will soon start developing the Dantotsu range of forklift and mini construction equipment products, whose high technology will not be reached by competitors for at least two years.

Komatsu will not disclose more about its new product development except to say that the integrated capabilities of the two companies are vital to the product development operation.

Tochigi-headquartered Komatsu Utility is a wholly owned subsidiary of Tokyo-based Komatsu Ltd.

Established in 1921, Komatsu Ltd manufactures, sells and services construction and mining equipment, and industrial machinery. Its net sales for the fiscal year ended 31 March 2010 was JPY1,431 billion (USD17.487 billion).

Komatsu Utility's net sales for the same period was JPY48.197 billion (USD588.925 million).