Amid sluggish demand in its primary machinery market, Hitachi Construction Machinery has acquired two suppliers of parts and services for mining equipment with operations in Australia and the US. The acquisition continues Hitachi’s expansion into the support business.
The Japanese company has purchased all outstanding shares of H-E Parts International and H-E Parts Australian Holdings for $240 million from H-E Parts Investors.
The acquisition, funded through cash on hand and loans, is Hitachi’s second mining-related deal in the past 12 months after a recent agreement to buy Australian manufacturer Bradken.
The H-E Parts companies offer repair, maintenance and other aftermarket support for mining equipment such as dump trucks and hydraulic excavators. They operate mainly in the Americas and Australia, markets where Hitachi Construction Machinery, which is strongest in Asia and Africa, is striving to build a customer base.
“Going forward, the resource sector will need to find ways to improve safety and productivity,” Hitachi Construction Machinery president Yuichi Tsujimoto said.
The company plans to complete its acquisition of Bradken in February, broadening its line-up of parts such as teeth for excavator buckets.
Hitachi Construction Machinery is also putting the ‘internet of things’ to work to boost on-site productivity, using technology gained through its 2009 purchase of Canadian system developer Wenco International Mining Systems.
With the H-E Parts deal, the company aims to increase points of contact with customers.
The company has also recently opened a new branch in Perth, Western Australia. This is part of plans to boost sales in Australia to 100 billion yen in the year ending March 2020 and reinforces its shift to parts and service.
President Yuichi Tsujimoto said by leveraging the facility’s location in a global centre for iron ore production, Hitachi Construction would strengthen the after-sales service segment.
The facility will offer repair of Hitachi Construction products, as well as component assembly and tune-ups. The Perth branch will include a maintenance and repair shop.
Hitachi Construction Machinery products include mini, medium and large excavators; wheel loaders; demolition equipment; metal recycling equipment; forest machines; rigid dump trucks, compaction equipment; cranes & foundation machines; and double front work machine. The company was founded in December 1955 and is headquartered in Tokyo, Japan.