Hitachi Construction Machinery

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Hitachi Construction Machinery Group Strengthens its Business Operations in China

Review of Business Structure in China Accompanies Transfer of Capital

Tokyo, September 20, 2022 –With the transfer of capital carried out on August 23, 2022, Hitachi Construction Machinery Co., Ltd. (TSE: 6305; “Hitachi Construction Machinery”) today announced that the company is reviewing the capital structure of Hitachi Construction Machinery (Shanghai) Co., Ltd. (headquarters: Free Trade Zone Pu Dong New District, Shanghai; Managing Director: Tei Gyomei; “Hitachi Construction Machinery (Shanghai)”) in which other companies including Hitachi Group have invested, while at the same time reviewing its business structure in the People’s Republic of China (“China”). As a result, Hitachi Construction Machinery has decided to establish Hitachi Construction Machinery Distribution (China) Co., Ltd. (headquarters: Shanghai Free Trade Zone, Pu Dong New District; Managing Director: Tei Gyomei; “Hitachi Construction Machinery Distribution (China)”) to manage sales and service in China, with business activities due to commence on November 1, 2022.

In August 2022, 26.0% of Hitachi Construction Machinery’s common stocks held by Hitachi Ltd. (headquarters: Chiyoda-ku, Tokyo; Executive Officer, President & CEO: Keiji Kojima) were transferred to HCJI Holdings Ltd., whose interests are wholly owned by Japan Industrial Partners, Inc. (headquarters: Chiyoda-ku, Tokyo; Chief Executive Officer: Hidemi Moue) and ITOCHU Corporation (headquarters: Minato-ku, Tokyo; Representative Director and President & COO : Keita Ishii). As a result of the share transfer, HCJI Holdings Ltd. became Hitachi Construction Machinery’s largest shareholder.

With this capital transfer, Hitachi Construction Machinery aims to restructure and strengthen the group’s business structure in China.
More precisely, part of Hitachi Construction Machinery (Shanghai)’s business will be undertaken by Hitachi Construction Machinery Distribution (China) which will handle an extensive lineup of our products not only from the Construction and Compact Business Units but also from the Mining Business Unit, while providing integrated sales and service.

Under the “Realizing Tomorrow’s Opportunities 2022” medium-term management plan, Hitachi Construction Machinery Group is working to strengthen its value chain business, provide enhanced solutions and build a corporate structure that is resilient to change.

Since agreeing in August 2021 to terminate the joint venture relationship with Deere & Company (headquarters: Moline, Illinois, USA; Chairman of the Board and CEO: John C. May) in North, Central and South America, Hitachi Construction Machinery has been working with every member of the group to achieve the aims of the medium-term management plan across the Americas through its own sales and service network.

The establishment of this sales and service company in China and its partial assumption of business forms part of our efforts to strengthen our global business. Going forward, we will promote these management strategies across the globe in pursuit of stable growth.

Outline of Hitachi Construction Machinery Distribution (China)

Name Hitachi Construction Machinery Distribution (China) Co., Ltd.
Location Free Trade Zone Pu Dong New District, Shanghai
Description of Business Sales and service of domestic and imported products in China, solution business management and related business
Chairman Masafumi Senzaki
Managing Director Tei Gyomei
(Directors: Hidehiko Matsui, Keiichiro Shiojima, Satoshi Yamanobe)
Commencement of Business November 2022
Capital 200 million yuan (3,900 million yen)
Equity Ratio Hitachi Construction Machinery 100%

Outline of Hitachi Construction Machinery (Shanghai)

Name Hitachi Construction Machinery (Shanghai) Co., Ltd.
Location Free Trade Zone Pu Dong New District, Shanghai
Description of Business Sales and service of domestic products in China, solution business management and related business
Chairman Masafumi Senzaki
Managing Director Tei Gyomei
Capital 66,224 thousand yuan (approx. 1,300 million yen)
Equity Ratio Hitachi Construction Machinery 54.4%, Hitachi(China),Ltd. 25%, others 20.6%

About Hitachi Construction Machinery Co., Ltd.

Hitachi Construction Machinery Co., Ltd. (TSE: 6305), headquartered in Tokyo, Japan, is a construction machinery manufacturer. The company engages in the development, manufacturing, sales, and service operations around the world for hydraulic excavators, wheel loaders, road construction machines, and mining machinery. Hitachi Construction Machinery is strengthening its focus on value chain businesses other than new machinery sales, such as parts and services, rentals, used equipment, and parts recycling, and is utilizing digital technologies to provide deeper solutions at all points of contact with customers. Hitachi Construction Machinery employs approximately 25,000 people worldwide. In fiscal year 2021 (ended March 2022), the consolidated sales revenue was ¥1,025.0 billion and the percentage of overseas sales revenue was approximately 79%. For details, visit the company’s website.

Information contained in this news release is current as of the date of the press announcement, but may be subject to change without prior notice.

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