Kato Works

Basic Information

Stock Code
6390
Industry
Machinery
Category Detail
Industrial Equipment & Heavy Electrical Apparatus
Prefecture
Tokyo
Establishment Year
January 1935
Listing Year
August 1962
Official Website
http://www.kato-works.co.jp/
TSE Information
TSE Information
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Other Companies
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Overview

Kato Works is a construction machinery and special vehicle manufacturer founded in 1935, with strengths in medium and small hydraulic cranes and a high market share in the domestic and international construction industries.

Current Situation

Kato Works recorded consolidated sales of approximately 77.9 billion yen in the fiscal year ending March 2020, but operating profit was in the red due to intensifying competition. Its mainstay rough terrain cranes and hydraulic excavators form the core of the domestic market, with a focus on medium and small sizes providing competitive advantages. It is also focusing on diversifying products by manufacturing special vehicles such as earth drills and road sweepers. Overseas, it is responding to changing market conditions, including withdrawal from the Chinese market. Although forced to suspend orders for some products due to issues with Hino Motors engines, it maintains competitiveness through technological innovation and enhanced after-sales services. In the medium to long term, it aims for sustainable growth through expansion into India, integration of subsidiaries, development of emerging markets, and environmentally friendly products.

Trivia

Interesting Facts

  • Kato Works' Rafter has become so widespread that it has become a generic term in Japan.
  • Long-established manufacturer with strong trust in internal combustion locomotives since pre-war times.
  • Once advertised at Korakuen Stadium and Tokyo Dome.
  • Kato locomotives preserved and displayed at Taiwan and domestic forest railways.
  • Operates subsidiary basketball team.
  • OEM contract with Furukawa Unick for truck cranes.
  • Decided to end local production in China in 2024.
  • Addressing market with order suspension for Hino engine-equipped products.
  • Opened business hotel for 125th anniversary commemorative project.
  • Over 40 years of accumulated crane technology forms the core of the brand.
  • Established quality management system with ISO 9001 certification.
  • Achieves efficient production by dividing production between two domestic factories.
  • Rarely handles forestry machinery for forest creation.
  • Held significant share in locomotives for Ministry of Construction and Forestry Agency post-war.
  • Company name and brand logo recognized as symbols of product reliability.

Hidden Connections

  • Expanded truck crane sales base through OEM supply to Furukawa Unick.
  • Expanded product lineup by making IHI Construction Machinery a subsidiary.
  • Snowplows and road sweepers frequently adopted through collaboration with local governments.
  • Subsidiary basketball team operations contribute to regional community.
  • Historic industrial heritage locomotives preserved in museums domestically and internationally.
  • Case where Hino Motors engine issues externally impacted product design.
  • Maintained stable management through long-term operation by founding family.
  • Established manufacturing compliant with international quality standards via ISO 9001 certification.

Future Outlook

Growth Drivers

  • Aggressive expansion into emerging markets like India
  • Increasing demand for high-performance construction machinery
  • Development of energy-saving and high-efficiency products through technological innovation
  • Demand for eco-friendly special vehicles amid stricter environmental regulations
  • Strengthening after-sales service and sales networks
  • Ongoing domestic infrastructure renewal demand
  • Optimization of global procurement and production systems
  • Promotion of business efficiency through digitalization
  • Improved safety in industrial construction machinery
  • Product lineup responding to diverse needs

Strategic Goals

  • Achieve over 30% overseas sales ratio
  • Over 70% environmentally compatible products domestically and internationally
  • Secure industry-leading customer satisfaction in after-sales service
  • Enhance competitiveness by shortening new product development cycles
  • Establish sustainable manufacturing processes
  • Improve brand recognition in emerging markets
  • Promote production cost optimization and efficiency
  • Establish diversified business portfolio
  • Product differentiation through safety technology innovation
  • Business transformation through DX (Digital Transformation)

Business Segments

Construction Machinery Manufacturing and Sales

Overview
Handles manufacturing and sales of construction site machinery, providing high-quality and versatile products.
Competitiveness
Specialization in medium and small cranes and high technological capability
Customers
  • Construction Companies
  • Civil Engineering Contractors
  • Demolition Contractors
  • Public Works Agencies
  • Private Companies
  • Overseas Construction Companies
Products
  • Rough Terrain Cranes
  • Hydraulic Excavators
  • Earth Drills
  • Short-reach Hydraulic Excavators

Special Vehicle Manufacturing and Sales

Overview
Develops and sells special vehicles for public infrastructure maintenance.
Competitiveness
Design emphasizing operability and durability
Customers
  • Local Governments
  • Cleaning Companies
  • Construction-related Companies
  • Logistics Companies
  • Snow Removal Service Providers
Products
  • Road Sweepers
  • Snowplows
  • Vacuum Suction Vehicles
  • Multi-purpose Suction Vehicles

Overseas Business Expansion

Overview
Expands sales in emerging markets mainly through joint ventures and agents.
Competitiveness
Product adaptation to local needs
Customers
  • Construction Companies in Asian Countries
  • Public Enterprises in Emerging Markets
  • Overseas Local Agents
Products
  • Full Range of Crane Products
  • Construction Machinery Products

After-sales Service

Overview
Provides comprehensive support to reduce user maintenance burdens.
Competitiveness
Technical training and prompt parts supply
Customers
  • Domestic and Overseas Customers
  • Agent Networks
  • Maintenance Businesses
Products
  • Maintenance and Inspection Services
  • Parts Supply
  • Technical Training

Competitive Advantage

Strengths

  • High technological capability in medium and small hydraulic cranes
  • Solid domestic sales network
  • Diverse special vehicle product lineup
  • Long-standing brand reliability
  • Comprehensive maintenance and service system
  • Strategic joint ventures in overseas markets
  • Quality control through in-house design
  • Prompt after-sales service provision
  • Capability for multi-variety small-lot production
  • Product durability and reliability
  • Stable financial base
  • High market share in specific segments
  • 対応 to diverse customer segments
  • Industry-specific technical know-how
  • Business diversification utilizing subsidiaries

Competitive Advantages

  • Leader in domestic medium and small rough terrain crane market
  • Covers both public and private markets with diverse special vehicle capabilities
  • Ongoing brand value domestically and internationally
  • Improved customer satisfaction through robust after-sales service network
  • Highly evaluated in-house developed large all-terrain cranes
  • Flexible overseas market response using joint ventures and subsidiaries
  • Broad market coverage possible through OEM products
  • High production efficiency and product quality at Ibaraki and Gunma factories
  • Enhanced competitiveness through continuous technological innovation and product improvements
  • Revenue risk diversification through multi-segment strategy in special vehicles
  • Brand recognition backed by high robustness and reliability
  • Organizational agility to quickly respond to market changes
  • High expertise and development capabilities of in-house engineers
  • Long-term transaction relationships with major construction companies
  • Regionally focused sales and service deployment

Threats

  • Impact of order suspensions due to Hino engine irregularities
  • Risk of sales decline from withdrawal from Chinese market
  • Technological advancements and price competition from domestic and overseas rivals
  • Demand decline due to economic fluctuations in construction market
  • Rising raw material prices and procurement costs
  • Regulatory and tariff barriers in emerging markets
  • Increased compliance costs due to stricter environmental regulations
  • Challenges in securing talent amid declining workforce population
  • Supply chain disruptions from new infectious diseases or natural disasters
  • Supply instability for OEM-dependent products
  • Increasing overseas political and economic risks

Innovations

2024: End of local production in China and subsidiary liquidation

Overview
Announced withdrawal from local production in China due to market slump.
Impact
Review of manufacturing cost structure and shift in market strategy.

2023: Establishment of joint venture in India

Overview
Accelerated market development by establishing joint venture with local construction machinery manufacturer in India.
Impact
Expansion of sales in emerging markets and response to local needs.

2022: Response to order suspension for Hino engine products

Overview
Suspended orders for affected products due to Hino irregularities and considered alternative technologies.
Impact
Temporary product supply constraints and implementation of trust recovery measures.

2021: Strengthening after-sales service through IT utilization

Overview
Built system using IoT for remote product monitoring to improve maintenance efficiency.
Impact
Achieved improved customer satisfaction and reduced maintenance costs.

2020: Opening of business hotel 'Wires Hotel Shinagawa Seaside'

Overview
Entered hotel operations as part of 125th anniversary commemorative project.
Impact
Secured new revenue sources and promoted business diversification.

Sustainability

  • Reducing environmental impact through energy-efficient products
  • Reducing waste and promoting recycling in manufacturing processes
  • Improving work environment for safety assurance
  • Participation in environmental conservation activities in collaboration with local communities
  • Proposing resource-recycling products using eco-materials
  • Formulation of green procurement policy