The Berlin Wall fell under the Japanese company's excavators

Half a century ago, Takeuchi Manufacturing, based in Nagano Prefecture, developed the world's first construction machinery, the Micro Excavator, which weighs less than 6 tons. As a pioneer of small construction machinery, we have opened up the market and established an autonomous position. Takeuchi Manufacturing is highly regarded for its manufacturing of products that meet the needs of its customers, and is a multinational company that accounts for 98% of overseas sales.

"This excavator has excellent stability. Even after a full day of driving, you don't feel very tired," says Pierre, who runs a construction company in France, with satisfaction. Micro excavators are suitable for residential construction on narrow plots of land, etc. Pierre said it also intends to make additional purchases.

A miniature excavator made in Takeuchi used at a project site in France

Takeuchi's main product is a miniature excavator weighing less than 6 tons. Compared to the 20-ton models that Komatsu and Hitachi Construction Machinery excel at, the micro excavator is not suitable for large-scale projects, but it plays an important role in residential and water works in urban areas.

Takeuchi Manufacturing launched the miniature excavator in 1971. This excavator subverts the "common sense" that small-scale projects rely on pickaxes and shovels. Oem (OEM production) has been supplied in Japan, etc., and began exporting to overseas in 1978. In the case of small construction machinery "not even a market" (the company's founder and president Akio Takeuchi), the company established a foothold centered on Europe and the United States. Its excavators are best known for their use in 1989 to "tear down the Berlin Wall."

Although the sales capacity and production capacity are not as good as those of large companies that later entered the related market, takeuchi Still maintains a high share in the current micro excavator market, ranking second in the European market and fifth in North America. Sasaki Yi, an analyst at Morgan Stanley Securities at Mitsubishi UFJ, said that "takeuchi has many loyal supporters because specifications can be determined in detail." Competitors have many mass production models, and Takeuchi Manufacturing's advantage is that it adopts the method of receiving orders.

Some of Takeuchi's products can select performance parameters such as rear cameras and seats from up to about 60 combinations. Competitors have only a dozen combinations of ordinary micro excavators. Takeuchi Manufacturing also pursues ease of use, and through the autonomous adjustment of hydraulic parts, it almost eliminates the time difference between the driver operating the joystick and the excavator robot arm, and reduces fatigue and stress during long hours of work.

Customer-oriented product manufacturing is well received, and consolidated sales in fiscal 2021 (ending February 2022) are expected to increase by 19% y/y to JPY 134 billion, an all-time high. In 2023, Takeuchi Manufacturing Will invest more than 10 billion yen to build a new plant in Aoki Village, Nagano Prefecture, increasing production capacity by 35%. The company's share price hit its highest point since its listing in March this year, and its total current market capitalization is about 19 times what it was 10 years ago.

However, the pursuit of quality can easily lead to increased costs. As a percentage of costs in sales, Takeuchi Manufacturing's average in the last five years has reached 78%. If you don't take into account differences in accounting standards and simply compare, the company is higher than both Komatsu (71%) and Hitachi Construction Machinery (74%).

At present, the high freight rate and steel prices of container ships have also become a heavy burden, and the operating profit margin in fiscal 2021 is expected to be 11%, down 6 percentage points from five years ago. Toshi takeuchi, the company's president, believes that "the profitability is not good" and will consider making up for it through product price increases.

Takeuchi Manufacturing is also committed to solving long-term problems. One of them is decarbonization, which launched electric excavators this summer. It improved the disadvantages of higher prices than engine excavators and difficulty in charging in the mountains, and accelerated sales expansion. In the future, we may also face the problem of aging operators and insufficient manpower, so we will promote research on construction machinery that can realize automated excavation (President Takeuchi). The miniature excavator from Nagano will break out of a new path.

Nihon Keizai Shimbun (Chinese: Nikkei Chinese.com) Nagano Branch Shimomura Tsutomu Taro

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