JAPANESE

Message from Top Management

Kunio Noji
President and CEO


Amid the radical changes that the business environment has undergone due to the global economic downturn that started in September, 2008, Komatsu has been steadily implementing structural reforms to make the company leaner and stronger. During this time, we have been focusing our efforts on developing the human resources which will support our global business, through methods such as building awareness of Komatsu's universal sense of values explicitly defined in The KOMATSU Way.

Currently, our market is beginning to show signs of recovery, spurred on primarily by development in the emerging nations. Capitalizing on our strong corporate structure, which was achieved through ongoing structural reforms, Komatsu started a new threeyear Mid-Range Management Plan in April, 2010, under the title "Global Teamwork for Tomorrow," steering a new strategy for growth. In this plan, I set forth specific objectives that include enhancing added value of products by applying ICT (Information and Communication Technology), developing products for global environmental friendliness and safety, and strengthening regional business operations in emerging and resource-rich countries. These activities will not only advance Komatsu's business, but will provide us the opportunity to reduce impact on the global environment, and contribute to economic development and improvement in the standard of living through the products and services we provide to our customers throughout the world.

Today, the definition of CSR (Corporate Social Responsibility) is shifting away from its original meaning of being merely social contribution, to a broader meaning  asking what value a company brings to society. Komatsu recognizes that the business activities which embody our strength are in fact CSR activities that respond to the demands of society, and this is what we are determined to pursue.

Environmental activities

Komatsu has placed environmental activities as one of the highest management priorities, and set new medium and long-term environmental targets for 2020. To meet these new targets, we are actively pursuing initiatives using measures that are both "proactive" and "protective."

On the "proactive" side, we are emphasizing reduction of CO2 emissions throughout product use, to help mitigate climate change. We introduced hybrid hydraulic excavators that reduce fuel consumption by an average of 25% to both Japanese and overseas (China and U.S.A.) markets. These products have been well received by the market and we are planning to expand the line to include 30-ton class hydraulic excavators and wheel loaders. We are also pursuing initiatives to reduce environmental impact throughout the product lifecycle by utilization of ICT in our products and ICT-assisted construction systems, and enhanced performance of AC servo presses. On other fronts, our Biodiesel Fuel Project is making headway, and we are working to facilitate more eco-friendly mining operations. Efforts to achieve an across-theboard reduction in CO2 emissions in manufacturing include a transition to high efficiency production lines and the use of heat pumps in air conditioning systems.

Komatsu has also taken a proactive position on environmental issues that is more than just measures to mitigate climate change. We are developing our "Reman" business outside Japan, remaking components into "remanned" equipment that has the same quality as newly manufactured components. We are striving for "zero emissions" in which all waste are recycled. Our efforts to maintain biodiversity include to cultivate plants typically grown in the region on a vacant lot which used to be the Komatsu Plant where we plan to build a new training center. We will make the site available for educating local school children on the environment, and will install equipment that can be used to do experiments for education in when teaching science and Monozukuri (manufacturing competitiveness).

On the "protective" side, we are developing construction equipment that meets the Tier 4 interim (Stage 3B) emission standards that will take effect in Japan, the U.S.A. and Europe in 2011, and are reducing the use of lead, mercury and other substances of environmental concern.

We will continue to maintain strong cooperation with our overseas affiliates, sales agencies, rental companies, and business associates around the world to bolster our environmental activities, with even higher objectives in sight.

Endeavors for Quality and Safety, and Social Initiatives

"Quality and Reliability" is the basic stance of Komatsu's management. This impacts our plants, suppliers and customer sites worldwide, as well as the entire spectrum of the Komatsu Group's corporate structure, businesses, employees, and management.

By providing products, services and systems that are safe and innovative from the perspective of the customer, Komatsu is working at becoming "a company that our customers cannot do without" and making this the essence our brand management. For our employees, who represent a precious resource for Komatsu, we are continuing our efforts to be a company worth working for, to ensure health and safety in the workplace, and to implement systems that support these efforts.

To enhance the trust placed in us by society and our stakeholders, we have been thoroughly implementing compliance throughout the Group, based on a variety of principles and rules. These include principles embodied in the United Nations Global Compact, which we signed in 2008, as well as in Komatsu's Code of Worldwide Business Conduct formulated in 1998. We are continuously pursuing activities that help fulfill our role as a good corporate citizen who responds to the needs of the regions we operate in. This includes helping remove anti-personnel landmines in war-torn regions and providing recovery assistance in disaster-stricken areas.

At Komatsu, all of our employees share the belief that "our corporate value is measured by the degree of trust placed in us by society and our stakeholders". As the Komatsu Group develops its businesses around the world, we will continue to pursue initiatives that instill the universal guiding principles of The KOMATSU Way in our employees, the backbone of our global business activities. At the same time, we continue to strive to be to our customers and society as a whole "a company that they cannot do without."