Kobelco's India Boom: R&D Surge Fuels 7% Growth Target

Kobelco Construction Equipment India is aiming for an annual growth rate of 6.5-7%, driven by India's expanding infrastructure sector. To support this growth, the company is increasing production and setting up a new research and development (R&D) center at its Sri City facility in Andhra Pradesh.

“India has become a crucial manufacturing hub for Kobelco, serving both domestic and international markets. Our new R&D center at Sri City will focus on technological advancements and product innovation, offering customized solutions for diverse industry requirements,” said Takemichi Hirakawa, MD & CEO, Kobelco Construction Equipment India. The investment details for the facility remain undisclosed.

The Sri City plant, operational since 2011 and spanning 42 acres, manufactures 10 excavator models ranging from 3 to 80 tonnes. It has surpassed 20,000 units in total production, with the last 10,000 units completed in just 5.5 years—significantly faster than the previous milestone of 8.5 years. The company aims to achieve the next 10,000 units within 3 to 3.5 years, according to P. Balaji, Deputy Factory Head/AVP.

Currently, Kobelco’s annual production capacity exceeds 3,000 units, with 20% of its output exported to 16 countries. The company holds a dominant position in the high-end 22-tonne and 40-tonne excavator segments, catering to sectors such as road construction, urban infrastructure, mining, agriculture, and material handling.

“The infrastructure boom in India is driving demand. While project execution delays may cause short-term fluctuations, we anticipate steady growth of 6.5-7%,” said E. Moses, Director-Division Head, Sales & After Sales.

Mining, particularly coal mining, accounts for 70% of Kobelco’s excavator sales. Despite a slowdown last year due to elections, the company expects a strong recovery in mining activity, further boosting demand.

On the introduction of premium models in India, Moses acknowledged affordability challenges for contractors. Some Kobelco excavator models produced in India have achieved up to 70% localization, while others remain at around 48%. “On average, localization stands at 48-50%. We are committed to increasing this while maintaining quality and precision. Key components like hydraulics and prime movers still rely on Japanese technology, but localization is improving as more Japanese suppliers set up operations in India,” he added.

Regarding expansion, Moses stated that Kobelco produced around 2,200-2,300 excavators last year. “We have the capacity to scale up production within our current facility as per market demand. Any further expansion will depend on sustained growth.”

Kobelco’s excavators are recognized for their fuel efficiency and environmental compliance. “Our common rail injection engine reduces fuel wastage, saving approximately one liter per hour—translating to nearly ₹10 lakh in savings over 10,000 hours. Emission levels remain within regulatory limits, supporting our sustainability goals,” Moses said.

News by Rahul Yelligetti.