Hitachi Puts Russia Plant on Hold

TOKYO -- Hitachi Construction Machinery has put on hold plans to build a hydraulic excavator plant in Russia because of a sharp slide in global sales, Japan's No. 2 earth-moving equipment maker said Tuesday.

Hitachi Construction had been planning to form a joint venture with its Russian sales agent TSC since the middle of last year, aiming to tap an expected surge in demand in emerging economies.

"There is no urgent need to boost capacity at the moment," said a company spokesman, adding that there have been cancellations of orders from small mining companies in Russia and Eastern Europe since around November.

Hitachi Construction has already suspended its four-year capacity expansion program, which calls for boosting output in Japan and in emerging economies with investment spending of 160 billion yen ($1.8 billion) by March 2011.