Marubeni Itochu Steel Establishes Construction Machine Cabin Plant in Indonesia

Marubeni Itochu Steel announced on Monday the firm agreed with PRESS KOGYO, Japanese major component maker for automobiles and construction machines, in establishment of a joint manufacturing company of construction machine parts in Indonesia. The investment would total approximately US$ 20 million. The operation will start in late 2012. In ASEAN, the demand for hydraulic shovel is expanding especially for mine development. The joint plant will supply construction machine cabins to local customers. The JV may enhance the product mix to automotive components in future.

The JV company, named PK Manufacturing Indonesia, will construct a factory in Djawa Barat and set assemble lines for cabins of hydraulic shovel machines. Then production capacity is scheduled at approximately 30,000 sets per year. The capital fund is approximately US$ 10 million, 65% shared by PRESS KOGYO and 35% by Marubeni Itochu Steel. The JV company will effectively and stably supply cabins to Japanese and U.S. construction machine factories in ASEAN by local production. Marubeni Itochu Steel exports component for cabins from Japan while plans local component procurement in future.

The JV plant will also start automotive component production and supply to Japanese commercial car makers in future. In Indonesia, commercial car market is expected to double in several years from more than 100,000 cars in 2010.

Marubeni Itochu Steel decided installment of a continuous galvanizing steel sheet line in Sermani Indonesia, a galvanizing steel sheet maker, in May. Indonesia maintains high economic growth at around 6% per year. Marubeni Itochu Steel continues aggressive investment in the country where steel demand is expected to grow highly. Indonesia is currently regarded as a supply base to ASEAN due to zero tariff in the region, too.