Komatsu CEO Issues Update on Russia, Warning for 2023

Komatsu WA270-8 wheel loader working at a jobsite

Komatsu Ltd., the parent company of Komatsu America, says it has no immediate plan to withdraw from its Russian operations, but it does not rule out exiting the country in the future, according to a December 5 report from Reuters.

Russia invaded Ukraine in February, and on March 4, Komatsu announced that it would suspend shipments from Japan to Russia, as well as halt production at its manufacturing facility in Yaroslavl, Russia. The company still offers maintenance services for its machinery already in the country.

"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 said. "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."

Komatsu’s sales in Russia and other countries in the Commonwealth of Independent States declined 16% in the second quarter of 2022. (Komatsu has an April-March fiscal year.) The CIS region accounted for 4% of total sales during the quarter.

Despite that, strong demand for construction and mining equipment in North America and Asia led Komatsu to revise its full-year forecast for fiscal year 2022, estimating 15% higher net sales than originally projected.

According to Reuters, Ogawa warned 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.