Slow Sales to China Hurts Kobelco, Kobe Steel Says
Kobe Steel has reduced its profit target by 58 percent for its construction machinery unit Kobelco Construction Machinery in response to the slowing of China’s economy, the Japanese steelmaker said.
Kobe Steel has reduced its profit target by 58 percent for its construction machinery unit Kobelco Construction Machinery in response to the slowing of China’s economy, the Japanese steelmaker said. The slowdown in China is adversely affecting Japanese companies, especially those with construction-related activity.
Kobelco contributed 21 percent to Kobe Steel’s profit in the fiscal year ended March 2015, as well as 17 percent of its total revenues. Excavator sales have decreased in China for Kobelco, making it difficult for the equipment manufacturer to meet its sales and profits targets. Kobelco president Jun Fujioka, who is also chairman of Japan Construction Equipment Manufacturers’ Association, said that sales of excavators by foreign companies would decline by 40 percent this year and that the association’s survey show the drop will continue in 2016.
Kobelco has slashed its China operations by reducing production levels to avoid excess inventories.
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.
