Kobelco India targets 6.5-7% growth with R&D expansion at Sri City

Kobelco Construction Equipment India expects to sustain an annual growth of 6.5-7 per cent going forward, buoyed by the country’s infrastructure push. The Japanese machinery maker plans to ramp up production while setting up an R&D centre at its Sri City facility in Andhra Pradesh.

“India has become a key manufacturing base for Kobelco catering to both domestic demand and expanding our global presence. Now, we are setting up a new R&D facility at our Sri City plant to enhance technological development and product innovation. This centre will focus on advanced engineering solutions and customisation for diverse market needs,” said Takemichi Hirakawa, MD & CEO, Kobelco Construction Equipment India Pvt Ltd. He, however, did not disclose the investment in the new R&D centre.

The 42-acre Sri City factory, operational since 2011, produces 10 excavator models ranging from 3 to 80 tonnes. It has achieved a cumulative production milestone of 20,000 units, with the first 10,000 units taking 8.5 years and the next 10,000 completed in just 5.5 years. “With our accelerated growth, we anticipate reaching the next 10,000 units in just 3 to 3.5 years—significantly faster than the previous cycle,” said P. Balaji, Deputy Factory Head/AVP.

The current annual production capacity is over 3,000 units. Of the 20,000 units produced to date, 20 per cent have been exported.

Infra push, mining

Kobelco claims to be the market leader in the high-end 22-tonne and 40-tonne excavator segments, holding over 25 per cent market share. Its excavators serve multiple industries, including road construction, urban infrastructure, mining, agriculture, and material handling. The company exports India-built excavators to 16 countries.

“India’s infrastructure push is driving demand. Our average growth has been 6.5-7 per cent, though occasional fluctuations occur due to project execution delays. However, we expect sustainable growth at this rate,” said E. Moses, Director-Division Head, Sales & After Sales.

The mining sector, particularly coal mining, accounts for 70 per cent of Kobelco’s excavator sales. While coal mining activity slowed last year due to factors like government elections, the company expects a strong revival, with mining playing a key role in future demand.

Regarding the introduction of premium models in India, Moses said, “The challenge is ensuring that contractors can invest in such high-end machines.”

Capacity expansion

Currently, some excavator models produced in India have achieved up to 70 per cent localisation, while others remain around 48 per cent. “On (an) average, our localisation stands at 48-50 per cent. While we aim to increase localisation, maintaining high quality and precision is critical for a premium brand. Key components like hydraulics and prime movers still rely on Japanese technology, but with more Japanese suppliers entering India, localisation is steadily improving,” Moses explained.

On capacity expansion, he noted that Kobelco produced 2,200-2,300 machines last year. “If demand rises, we can optimise and scale up production within our existing facility. Further expansion will depend on clear market demand and business growth,” he concluded.

Kobelco’s premium excavators stand out for their fuel efficiency, environmental compliance, and overall performance. “Our common rail injection engine reduces fuel wastage, saving nearly a litre per hour—translating to about a million rupees over 10,000 hours. Emission levels are well below regulatory limits, supporting sustainability goals,” Moses added.