Komatsu Gaines from Better Demand in World Machinery Industry

Komatsu’s executive officer Masahiro Uegaki, who is in charge of procurement division, said to a reporter of Japan Metal Bulletin the firm’s steel consumption improves in recent months to monthly more than 30,000 tonnes at the domestic operation. The steel consumption reaches around 80% of the peak level in first half of fiscal 2008 thanks to higher demand in China and mining operations.

Mr. Uegaki said the firm expected the steel consumption is monthly 25,000 tonnes or annual 300,000 tonnes for fiscal 2010 started April compared with the peak of 50,000 tonnes per month in first half of fiscal 2008. The steel consumption was less than 20,000 tonnes per month in fiscal 2009.

The demand is mixed when the demand is firm in China and emerging countries while the demand is slow for small sized construction machinery, which is mainly used for civil works in urban area.

Mr. Uegaki said the firm tries to streamline the operation after Lehman shock. The firm tries to increase the local procurement at the each offshore plants but the quality is best for Japanese steel products. The firm tries to use more offshore steel products when Chinese steel products improve to the level as Japanese products depending on the applications.

The firm sees Japanese demand is improving in fiscal 2010 compared with fiscal 2009 while the firm expected the demand would be flat. The firm sees the offshore demand is growing especially in China, where the demand increases by 20% in 2010 from 2009. Mr. Uegaki said China represents 50-60% of the firm’s shipment of excavator.

Mr. Uegaki said the firm expects Japanese steel makers improve the cooperation with the firm for efficient operation including shorter lead time. He said the firm expects the better inventory control system at home and abroad to improve the adjustment for up and down for the demand. He also said the firm expects Japanese steel makers will provide lighter and stronger steel products to improve the carry efficiency.