Posted on 15 Mar 2016
Core Chinese plants suspended operations for roughly 10 days a month during the latter half of 2015 as demand for hydraulic excavators waned amid a cooling infrastructure market. Fiscal 2015 earnings for the operation will also be hit by reserves for bad loans to struggling local vendors.
But since January, factories have maintained operation apart from regularly scheduled holidays, due in part to upgraded inventory controls. In addition, "we will cut labor costs this year as well since we will not need to replace workers leaving for personal or other reasons," said Executive Vice President Naoto Umehara.
Kobe Steel's construction equipment business is expected to suffer an operating loss for the first time in 16 years this fiscal year. In fiscal 2014, the unit logged 21 billion yen in pretax profit, or 20% of group pretax profit.
