Kobelco India Eyes 6.5-7% Growth with R&D Expansion at Sri City

Kobelco Construction Equipment India is targeting an annual growth rate of 6.5-7% in the coming years, supported by the country’s infrastructure development. The Japanese construction machinery giant is ramping up production and establishing a new research and development (R&D) center at its Sri City facility in Andhra Pradesh.

“India has emerged as a key manufacturing base for Kobelco, catering to both domestic demand and global markets. Our new R&D facility at Sri City will drive technological advancements and product innovation, focusing on customized solutions for diverse industry needs,” said Takemichi Hirakawa, MD & CEO, Kobelco Construction Equipment India. The company has not disclosed the investment amount for the new center.

The Sri City plant, spread over 42 acres and operational since 2011, manufactures 10 excavator models ranging from 3 to 80 tonnes. The facility has crossed the production milestone of 20,000 units, with the last 10,000 units completed in just 5.5 years—significantly faster than the 8.5 years taken for the first 10,000 units. The company expects to achieve the next 10,000 units within 3 to 3.5 years, said P. Balaji, Deputy Factory Head/AVP.

Kobelco’s current production capacity exceeds 3,000 units annually, with 20% of its total output exported to 16 countries. The company holds over 25% market share in the high-end 22-tonne and 40-tonne excavator segments, serving industries such as road construction, urban infrastructure, mining, agriculture, and material handling.

“The infrastructure boom in India is fueling demand, and while occasional fluctuations occur due to project execution delays, we anticipate sustainable growth of 6.5-7%,” said E. Moses, Director-Division Head, Sales & After Sales.

The mining sector, particularly coal mining, accounts for 70% of Kobelco’s excavator sales. Despite a slowdown last year due to factors such as government elections, the company expects a strong revival in mining activity, further driving demand.

On the introduction of premium models in India, Moses noted that affordability remains a challenge for contractors. Some Kobelco excavator models produced in India have achieved up to 70% localization, while others remain at around 48%. “On average, our localization stands at 48-50%. While we aim to increase this, quality and precision are our top priorities. Key components such as hydraulics and prime movers still rely on Japanese technology, but localization is improving as more Japanese suppliers set up operations in India,” he added.

Regarding expansion, Moses said Kobelco produced around 2,200-2,300 excavators last year. “We can optimize and scale up production within our current facility based on demand. Any further expansion will be determined by clear market growth.”\

Kobelco’s excavators are known for their fuel efficiency and environmental compliance. “Our common rail injection engine reduces fuel wastage, saving approximately one liter per hour—equating to nearly ₹10 lakh in savings over 10,000 hours. Emission levels are well within regulatory limits, aligning with sustainability goals,” Moses added.

HBL