Komatsu to Open Plant in Yaroslavl

Komatsu, the world's second-largest maker of earthmoving machinery, will start its first factory in Russia to assemble excavators and forklifts by June 2010 to benefit from the nation's oil-funded construction boom.

A total of 6.9 billion yen ($61 million) will be spent to buy land and build the factory in Yaroslavl, about 300 kilometers northeast of Moscow, the Tokyo-based company said Friday in a statement. Komatsu plans to build 3,000 excavators and 7,000 forklifts there in 2011 and forecasts sales of 50 billion yen for the year to March 2012, about 2 percent of its estimate for the current fiscal year.

The factory is part of the company's strategy to tap emerging markets to meet demand for construction equipment. The market for construction machinery in Russia will probably increase more than 78 percent to 32,000 units by 2009, the statement said. Forklift sales may double to 33,000 units.

The company holds about a 20 percent share of the construction machinery market in the country and is the largest supplier after Hitachi Construction Machinery, the world's biggest maker of giant excavators.

Komatsu shares have risen 29 percent this year.

CEO Kunio Noji pledged to take on U.S.-based Caterpillar throughout Asia. Worldwide construction machinery sales rose about 13 percent in the April-to-June quarter, spurred by emerging markets such as China, India, Russia and the Middle East.