Komatsu to build steel plant

Publicly listed PT Komatsu Indonesia, a unit of Japanese heavy-equipment producer Komatsu Ltd, plans to build a new plant that will double the company's production capacity for casted steels in Indonesia, a company official said.

Komatsu spokesperson Petra Ho said the company would invest some US$11 million in the new plant, with its operation scheduled to start next year.

"The new plant will double our capacity for casted steels to 16,000 tons per year from the current 8,000 tons," said Petra announced to the public on Friday.

Some 75 percent of Komatsu casted steels are allocated for export while the remaining 25 percent is for domestic demand.

During the meeting, Komatsu estimated that total domestic demand for construction equipment this year would reach 4,180 units, with Komatsu expected to account for 39.8 percent of the market share, followed by Caterpillar and Hitachi with 29.1 percent and 15.6 percent, respectively.

Komatsu has also projected sales of its components to rise by 10.5 percent to 11,000 tons this year from 9,950 tons last year.

Japan's Komatsu controls 68.42 percent of Komatsu Indonesia, while the investing public holds 19.5 percent, with the remaining 27 percent is owned by several institutional investors.

The company is likely also to benefit from higher demand in the construction business next year as public works and activity in the resources businesses are expected to proliferate. -- JP