– Formation of Joint Venture Operation with Deere & Company –
Tokyo Japan, October 3, 2011 – Hitachi Construction Machinery Co., Ltd. (Head Office: Tokyo, Japan; President: Michijiro Kikawa; hereinafter referred to as “HCM”) announced that it has reached agreement with Deere & Company (Head Office: State of Illinois, the United States of America; Chairman and Chief Executive Officer: Samuel R. Allen; hereinafter referred to as “Deere”) to form a joint venture in Brazil for manufacturing and sales of hydraulic excavators with the intent to make a full-fledged entry into the Brazilian market.
1.Background of Joint Venture Business
HCM and Deere have reached agreement to form a joint venture in Brazil for manufacturing and sales of hydraulic excavators with the intent to make a full-fledged entry into the Brazilian market, where the demand for construction equipment is growing rapidly. HCM, which has world’s leading technologies for hydraulic excavators, will provide its technologies to the joint venture for its local production of hydraulic excavators, and Deere, which has a strong local presence through its agricultural equipment business, will market the hydraulic excavators manufactured by the joint venture.
HCM and Deere have built an important partnership in the Americas since 1988 when they formed Deere-Hitachi Construction Machinery Corporation, which is a joint venture based in North Carolina, the United States of America (“Deere-Hitachi”), for manufacturing and marketing of hydraulic excavators. The joint venture business in Brazil is in furtherance of such partnership to pursue their growth opportunities jointly on a long term basis.
2.Outline of Joint Venture Operation
(1)Corporate Name : Deere-Hitachi Màquinas de Construção do Brasil S.A.
(2)Formation Date : October 2011
(3)Capital Stock : US$ 50 million (approximately JPY 4 billion)
(4)Shareholding Ratio : HCM 40%
John Deere Brasil Limitada 40%
(5)Head Office : Indaiatuba, São Paulo, Brazil
(6)Business : Manufacturing and sales of mid-size hydraulic excavators (from 15
metric tons to 40 metric tons)
Importation and sales of mini-excavators and hydraulic excavators
(less than 100 metric tons)
(7)Groundbreaking of Production Facility : Approximately January 2012
(8)Commencement of Sales : Approximately April 2012 (imported units)
(9)Commencement of Production : Approximately July 2013 (locally manufactured units)
(10)Production Capacity : Approximately 2,000 units per year (localization rate will be
60% or more)
(11)Size of Factory Site : 200,000 square meters
(12)Number of Directors : 8 members (each of HCM and Deere will nominate 4 members)
Information presented in this press release is valid as of the date of release; please note that information is subject to change without notice at a later date.