Hitachi Construction to Expand Capacity in Indonesia

Hitachi Construction Machinery Co. will boost output capacity in Indonesia to meet demand for construction, forestry and mining equipment in Southeast Asia's largest economy.

Construction machinery makers, including Komatsu Ltd. and Caterpillar, are relying on sales in countries such as Indonesia after China slowed public works and housing projects. Industry sales of excavators in China have fallen at least 30 percent this quarter from a year earlier, and the decline may extend until the end of this year.

Indonesia's central bank forecasts economic growth to accelerate to as much as 6.7 percent this year as the government boosts spending on railways, airports and roads. Demand in Indonesia will grow at a faster pace than estimated. Hitachi is accelerating expansion to catch up with the demand.

Hitachi Construction Machinery, also the world's largest maker of giant excavators, will also build a second Indonesian plant in Cibitung to make underground carriages as part of a 47 billion-yen ($570 million) plan to expand its ability to produce large mining equipment.

Indonesia, North America and Japan will boost global demand for excavators by 7 to 10 percent in the financial year starting April 1.Demand in Europe will fall because of its sovereign debt crisis, while Chinese sales will likely be in line with global growth aided by a recovery expected after 2012.

 

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