Komatsu CEO: no immediate plan to withdraw from Russia

Komatsu

05/12/2022 08:53

TOKYO, Dec 5 (Reuters) - Komatsu Ltd  6301.T , the
world's second-largest construction machinery maker after
Caterpillar Inc  CAT.N , has no immediate plan to withdraw from
its Russian operations, it said on Monday, but did not rule out
exiting the country in the future.
    Following Russia's invasion of Ukraine in February, Komatsu,
which also competes with Sany Heavy Industry  600031.SS  and
Hitachi Construction Machinery Co Ltd  6305.T , halted shipments
to Russia as well as local production but still offers
maintenance services for its machinery already in the country. 
    Komatsu has a manufacturing plant in Yaroslavl, Russia.
    "At the moment, like we said in April, we are not
considering withdrawal. But various developments could take
place as we go forward," Komatsu Chief Executive Hiroyuki Ogawa
told reporters in an online interview. 
    "There may come a time when we will need to decide whether
or not to withdraw (from Russia). But that's not something we
are considering at the moment."
    Russia and other countries in the Commonwealth of
Independent States (CIS) accounted for 7% of Komatsu's heavy
machinery sales in the year to end-March 2022.
    Komatsu in October posted a 75% jump in net profit for the
first half of the current business year thanks to strong heavy
machinery demand and a softer yen, and raised its full-year net
profit forecast by 32% to a record 298 billion yen ($2.21
billion).    
    Ogawa warned, however, that global demand will likely slow
in the next business year due to higher interest rates,
inflation and slower economic growth.   
    "I don't necessarily think demand in the next business year
will be good when compared with this year's," Ogawa said. 
    He also said Komatsu has no plan to pull out of its
ammunition business, which he said accounted for less than 1% of
total revenue, although it has practically withdrawn from
armoured vehicle operations. 
    "As for our ammunition business...We are conducting the
operation as our way of contributing to national defence, and we
will keep on doing it," Ogawa said.
($1 = 134.9800 yen)
 (Reporting by Kiyoshi Takenaka; Editing by Kirsten Donovan)
 ((kiyoshi.takenaka@thomsonreuters.com; +81 3 4563 2788;))