komatzu (1)

Table of Contents

1

3 Environment-friendly Products and Services 143.1 Solutions for Environmental Activity 153.1.1 Conserving the Environment through Technology 153.1.2 Environmental Cleanup Technology 213.2 Products and Services: Reducing the Environmental Impact 223.2.1 Improvement of Fuel Economy 233.2.2 Reduction of Exhaust Emissions 243.2.3 Reduction of Noise and Vibration 253.2.4 Reduction of Environmentally Burdensome Substances 263.2.5 Improvements in Recyclability 273.2.6 Development of Biodegradable Hydraulic Oil 283.2.7 Recycling of Rubber Crawler Shoes 283.2.8 Reman 30

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3 Environment-friendly Productsand Services

14

Promoting Solutions through UniqueTechnologiesKomatsus environment-friendly construction machinery isa notable example of ecology and economy in balance.Given our involvement in the construction industry, weknow the disposal of construction waste and excess soil is amajor subject of concern. Of course, waste disposal is not justa matter of environmental responsibility; it is also a matterof cost.

We at Komatsu therefore advocate that waste materials becrushed and recycled on-site to the greatest extent possible.In fact, the simplest solution is to dispose on-site by crushing,refining, and recycling the felled trees, boulders, and soilexcavated during preparation and construction. We believethat this system is about to change the relationship involvingbuilding materials, construction processes, and the environ-ment.

Komatsu offers other unique solutions for customerengagement in environmental activities, including the pro-cessing of contaminated soil and waste recycling at quarrysites.

Environmental Forum Incubates Ideas for Ecology andEconomyThe control of manufacturing costs is a constant concern in the

development of products that are respectful of the

environment. No matter how good the product is, the customer

will not be able to employ the product if it is prohibitively

expensive. Therefore, to implement environmental conserva-

tion on a continuing basis, we need to devise a new technology

that helps protect the environment while enhancing the manu-

facturers competitiveness.

The creation of such a technology demands that we see

things from a different perspectivethat we discern the true

nature of the issue and use that as an inspiration for our

research and development. It is not enough simply to extend

our traditional way of thinking. This is the reason that

Komatsu has placed its Environmental Forum on our in-house

computer network database. Through it, we can gather, com-

bine, and develop the views and ideas of our own experts,

whose knowledge encompasses many fields.

Anyone with an idea on how to be more environment-

friendly can casually post a message in the Environmental

Forum. It serves as a means to gather expertise from different

fields, and also provides the means to discover a technology

with which we can contribute to the environment at a higher

level. We are proud to say that Komatsus ecological, economi-

cal solutions are the result of brainstorming by experts in vari-

ous fields. The Environmental Forum has been their network

and the crystallization of their knowledge.

EcologyTechnology for environmental conservation

Cost

The Promise of Komatsu Technology: Ecology and Economy in Balance

Economy

&

As part of our efforts to conserve the environment, Komatsuactively develops and promotes the use of recycling equip-ment to support customers recycle construction waste, and atthe same time, also reduce their costs by doing so. With allour environmental policies, we work to utilize technologicalinnovations to control costs. This concept of ecology andeconomy in balance guides all of Komatsus technical devel-opment related to environmental conservation.

Importance of Facilitating RapidImplementationKomatsu is striving to develop environment-friendly mea-sures at a reasonable cost that will help to facilitate theirrapid implementation.

Environment-friendly products thus represent a viablesolution to the evolutionary state of environmental issues.However, if such environment-friendly products were toincrease the customers operating costs, such products wouldnot proliferate and would ultimately fail to contribute to theconservation of our earth environment.

For example, in the case of reducing CO2 emissions, envi-ronmental policies are directly connected with customer fuelcosts. If appropriate fuel-conserving devices are developedwhich will be quickly adopted. In the case of NOx emissions,however, with conventional technologies, there may be nocost reduction for the customer or there may even be a costincrease. Because economic considerations form a barrier toacceptance in such a case, only taking on the challenge oftechnological innovation makes it possible to reduce bothenvironmental impact and customer costs. Using technologi-cal innovation to develop environment-friendly products,which are also economically beneficial to the customers,enables us to help improve the environment on a globalscale. This is the meaning of Komatsus ecology and econ-omy in balance policy.

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3 Environment-friendly Productsand Services

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Komatsu has developed the Mobile Crusher as a means ofachieving on-site recycling of construction waste. Throughthis system, materials generated at the construction site canbe recycled without the need to transport them elsewhere forprocessing. Mobile Crusher has helped minimize the envi-ronmental impact of construction while reducing overallconstruction costs.

Conserving the Environment throughTechnologyTrends in Waste ManagementWaste is generated through various construction activitiessuch as building demolition and road construction, whichare designed to improve the public infrastructure. Concretedebris, wood scrap, and other materials generated in con-struction are commonly referred to as construction waste orconstruction byproducts. This constitutes a major portion ofindustrial waste and is hard to handle. Additionally, most of

the soil that is excavated by hydraulic excavators is too weakand unstable to be reused as is, and each year, it becomesmore difficult to secure locations for its disposal. Moreover,the establishment of new landfills is difficult. Therefore, thecreation of a new recycling method that is not hindered byconventional methods is being sought. This has promptedthe Ministry of Construction to promote early-stage recy-cling by mandating recycling to those who order construc-tion.

Trends in the Construction IndustryJapans economic recession has placed great pressure on theconstruction industry to reduce construction expenses.Under such circumstances, the increased cost of waste dis-posal due to the lack of landfill space poses a threat to com-pany profit margins, resulting in the need to employ an effi-cient, low-cost waste-disposal method.

3.1 Solutions for Environmental Activity

3.1.1

Beverage, feed, and tobacco manufacturers 7,377 (1.8%)Food manufacturers 11, 856 (2.9%)Chemical industry 17,928 (4.4%)Ceramics and stone-and-clay product manufacturers 19,425 (4.8%)Pulp, paper and processed paper product manufacturers 24,917 (6.1%)Steel industry 30,081 (7.4%)Mining Industries 30,793 (7.6%)

Amount of Industrial Waste Generated (FY 1994)

(Source: Comprehensive measures against construction byproducts)

NationwideTotal 405,455 thousand tons

Other industries 36,657 (9.0%)

Construction industry 76,931 (19.0%)

Agricultural industry 74,878 (18.5%)

Construction-generated wood 6 (6%)Mixed construction waste 10 (10%)

Other (waste plastic, waste paper, metal debris) 1 (1%)

Asphalt/concrete debris 36 (36%)

Concrete blocks 36 (37%)

Amount of Construction Waste Generated by Category (FY 1995)

Nationwidetotal 99

million tons

(Source: Survey on the state of construction byproducts, Ministry of Construction)

(Source: Survey on the state of construction byproducts, Ministry of Construction)

Private civil engineering 18 (4%)

Construction 43 (10%)

Public civil engineering384 (86%)

Nationwidetotal 446million m3

Construction sludge 10 (10%)

Amount of Soil Generated by Construction (FY 1995)

Electricity, gas, heat supply and water industry 74,610 (18.4%)

1993 1994 1995 1996 1997 1998 1999Fiscal year

0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2.32.6

3.0 3.1

2.7

2.0

1.6

Number of Remaining Years for Landfills

(Source: Nikkei Construction, January 2000)

Rem

aini

ng y

ears

1990 1999 Fiscal year

Direct construction expenses

Disposal expenses

Gross profits

Decreased unit cost of construction

Increased cost

Changes in the Value Structure model of Construction

Valu

e

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Employing an On-site Recycling Construction Method(toward Zero emission construction)New road construction generates vast amounts of roots andfelled trees, boulders, and soil through excavation and theremoval of trees. Traditionally, such construction waste andsoil has been transported off-site for disposal. At Komatsu,though, we hit upon the idea of employing an on-site recy-cling method in which materials could be recycled andreused on the premises. Ultimately, the development of anon-site recycling machine designed for the on-site crushingand recycling of waste materials became the basis for an on-site recycling construction method.

The presence of a recycling machine at the constructionsite will make the crushing of materials more efficient.Specifically, roots and felled trees can be turned into chipsfor mulching or spraying materials; boulders can be turnedinto grading materials; and bad soil can be improved for useas a roadbed material. The result is not only a reduction inthe amount of waste generated but also produces savings inthe use of new materials (resources) and energy for trans-portation, thereby contributing to environmental conserva-tion. Since the costs associated with waste-disposal, newmaterials, and transportation can be kept to a minimum, thetotal cost of construction can be drastically reduced.

On-site Recycling Machine: Mobile CrusherWhen considering a construction method for on-site recy-cling, the machinery must be mobile so that it can be set upin the immediate presence of waste generation. It should alsobe compact yet fully capable of handling large amounts ofwaste. If the waste could be crushed and processed at thesource, we would be able to minimize our impact on theenvironmental, as well as to cut back on construction costs.To that end, based on customer requests, we established thefollowing basic structure for our family of mobile recyclingequipment products:

(1) A crawler-type mobile device (2) A crushing device(3) A device to feed materials to the crusher

(hopper/feeder)(4) A device for the discharge of crushed materials (belt

conveyer)(5) A power unit (engine)

In fiscal 1992, responding to the need to crush debris from ademolished house so that it could be reused as a bankingmaterial on-site, we put together the Mobile Crusher BR60, aproduct equipped with an impact crusher. Since then wedeveloped a variety of mobile recycling equipment and infiscal 1999 we marketed the Mobile Tub Grinder BR200T.These products have won acclaim in a society that nowavidly promotes recycling.

BR60, the first model of the series marketed in fiscal 1992 The BR200T was introduced to the market in fiscal 1999

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17

Logging

Logging

Transporting

Disposal

Transporting

Collecting new materials

Excavating

Excavating

Recycling

Banking Paving

Banking Paving

Tree-plantingon slopes

Tree-plantingon slopes

Felled trees

Felledtrees

Boulders Bad soil

Boulders Bad soil

Felled trees Mulching materials

Boulders Grading materials

Bad soil

Mobile tub grinder

Mobile crusher

Mobile soil recycler Roadbed materials

Transporting to outside the construction site for disposal

Outside collection and transport to the construction site

Traditional Construction Method

On-site Recycling Construction Method

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Our mobile recycling equipment becomes a series Amid the growing demand for on-site recycling constructionmethods, we expanded our range of products. Currently, weoffer a lineup of sixteen models. As a single unit, or as asmall-plant system in conjunction with peripheral units, ourmachines continue to serve in site-optimized configurations.

Komatsu has sold roughly 1,400 units of this series prod-ucts in Japan and 150 overseas, as of fiscal 1999. As a keycomponent in on-site recycling construction, these unitshave contributed to environmental conservation in Japanand other countries. Moreover, the series has drawn atten-tion for its potential application in other areas, such as junk-yards for the disposal of tires and household appliances.

Mobile crusher

Mobile crusher

Mobile crusher

Mobile soil recycler

Mobile tub grinder

BR210JG, and others

BR300S, and others

BZ200, and others

BM2014C mobile belt conveyer BM3618S mobile screen

Supporting the entire product family units on-site

Komatsus Mobile Recycling Equipment Products

Natural rockConcrete

debris/asphaltconcrete debris

Oversizedgarbagemixtures

Excavated soil (excess soil) Wood-based

BR1600JG(made to order)BR500JG, and others

BR250RG, and others

BR200T

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Application of Mobile Crusher (1): Concrete Debris,Asphalt Concrete Debris, and Natural RockGenerally, concrete and asphalt concrete debris is made ofmost of rock. Therefore, when we remove foreign objectssuch as reinforcing steel bars and wood chips from the debrisand crush and sort the remainder, we can recycle that mater-ial as base materials used for road grading and constructionbackfill. Additionally, we recently began crushing and sort-ing debris down to midsize blocks ranging between 150 and250 millimeters for reuse in riverside breakwater work.

Application of Mobile Tub Grinder (2): Wood-basedwasteTraditionally, trees felled for the purpose of constructionhave for the most part been burned on-site. However, theproper disposal of felled trees has become an issue of con-cern in recent years, in light of new regulations banningfield burning and the rise of the dioxin problem.Komatsu proposes a solution in which felled trees can beprocessed into wood chips. This material can then be used asmulch spread over, as well as for fuel. They can also be usedas fertilizer and in the manufacture of board.

Fuji Sand-Control Office, Ministry of Construction: Construction to remove rockfrom the Osawa avalanche site at Mt. Fuji, Shizuoka Prefecture, where a downslideof lava, sand, and stone occurred.

The lava, sand, and rock removed is crushed and sifted through a screen. Finepieces of 50 mm or less are utilized in roadbeds and as material to raise the groundlevel of houses, while the coarser pieces of 50 to 150 mm are used to build up andprevent the erosion of beaches.

Processing Felled Trees at a Land-reclamation Site in Oita Prefecture

Conventionally, the foliage, stumps, and roots of trees felled for land reclamationwere burned. Now they can be crushed into chips on-site and recycled for use asground cover in reforestation areas or as woodchips or mulch.

Lava, sand, and rock accumu-lated at the Osawa Delta.

Chips afterprocessing

Used as mulchspread

Crushed rock from 50 to 150 mmis utilized in beach constructionprojects.

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Application of Mobile Soil Recycler (3): Excavated SoilThe soil excavated from construction sites has high water-content, thus necessitating its transport to processing plantswhere it is reconstituted. However, with the current smallnumber of stationary processing plants available, the neces-sary transport distances tend to be excessive, negativelyaffecting the environment and increasing total constructioncosts.

Awards won by the Mobile Recycling Equipment SeriesThe series is widely recognized as construction machinery that contributes to environmental conservation. As such, it has wonthe following awards.

Therefore, Komatsu has developed an on-site, recyclingsoil-stabilization method that improves soil quality by com-bining it with fortifying materials on-site. This is anotherproduct that we have commercialized as part of the series. Itenables excavated soil to be recycled on-site and put toimmediate use as a banking material in the constructionprocess.

Chugoku Highway, Chugoku Bureau of Japan Highway Public Corporation

Improving the roadbed of the Chugoku Highway (Shimane Prefecture)

The dirt excavated at the site has excessively high moisture content and cannot beused as is. The excavated dirt is therefore improved by mixing it on-site with ahardening agent. The improved dirt is then used to raise the roadbed. Comparedwith conventional methods, this process both improves the quality of the mixtureand increases work efficiency.

Completed roadbed improvement work

Product Award Prize Name Sponsor

Mobile crusher

Mobile crusher





FY 1995 Award for Recycling Development Project et al

The Minister of International Trade and Industry Award

Development project for mobile crushers Clean Japan Center

21st Award for Outstanding Environmental Machinery

Chairmans Award from the Japan Society of Industrial Machinery Manufacturers

Mobile recycling debris crusher

The Japan Society of Industrial Machinery Manufacturers

FY 1998 Award for Recycling Development Project et al

MITI Environmental Protection and Industrial Location Bureau Directors Award

Development of mobile soil recycler Clean Japan Center

FY 1999 Chairmans Award from Japan Construction Mechanization Association

Encouragement prize Development of the BZ200 mobile soil recyclerJapan Construction Mechanization Association

FY 1999 Outstanding Energy-saving Machinery

Chairmans Award from the Japan Machinery Foundation

BZ200 mobile soil recycler The Japan Machinery Federation

FY 2000 Technical Award(through joint application with Tokyo Gas Co., Ltd.)

JGA technical awardRecycling excavated soil through use of a mobile soil-recycling plant

The Japan Gas Association

20 00.5.11 3:23 PM 20

Environmental Cleanup TechnologyApatite Treatment: A Cleanup Technology for SoilContaminated with Heavy MetalsKomatsu General Atomics Engineering Corporation* in 1998introduced a technology developed in the U.S. designed toclean soil contaminated with heavy metals, and since thenhas successfully expanded its activities in the cleanup busi-ness.

This metal-contaminated soil-treatment technology turnstoxic heavy metals, which are present in the soil, into awater-insoluble, nontoxic mineral as an apatite. In this way,they are prevented from leaching into and contaminatingexternal media. One of the typical apatite minerals is apatitehydroxide Ca5(PO4)3OH. Metals with positive ions, such aslead (Pb), can infiltrate the apatite hydroxide structurereplacing calcium (Ca), thus turning the apatite into Ca5-nPbn(PO4)3OH (where n is 5 or less).

The resultant isomorphous apatite naturally exhibits thefundamental characteristics of apatite minerals. Unlike theconventional, chemically insoluble treatment, however, thematerial turns into a very hard mineral crystal with great

21

leaching resistance over a wide pH range. Furthermore, com-pared to the cement-fixation method, this treatment barelyaffects the condition of a medium like soil.

In 1998, we undertook a consigned research study onbehalf of the Environmental Agency to establish a soil-conta-mination cleanup technology and verify its feasibility. Theresults of that study proved the advantages of apatite cleanupover chemically insoluble treatments, which heretofore hadbeen the conventional cleanup method for soils contami-nated with heavy metals. In fiscal 1999, the technology was

Recycling of Quarry WasteThe inorganic sludge generated in quarry operations haslong been disposed of as industrial waste. However, Komatsuhas discovered that a simple modification to the inorganicsludge can result in outstanding clay properties and water-solubility. Taking advantage of the properties of this recycledclay, we have commercialized a soil admixture for use with

underground excavators, thanks to a joint project withKomatsu IM Engineering.* Compared to the conventionalalkaline admixtures, this environment-friendly, pH-neutraladmixture is safe to groundwater. In fiscal 1999, this admixture was marketed as the excavationadditive Gravel Coat, and proved to dramatically improveimpermeability to water and soil discharge in damp areas.

3.1.2

Cleanup of hexavalent chromium-contaminated Soil Using a Mobile Soil recycler

Preparing the Admixture

Clean dumperMulti planter

4. Adjust the injection of the admixture.

Plug zone

2. Injection

Water hose or slurry hose

1. Agitate the water and admixture, then pump the mixture.

3. Agitation and creation of plugs

Admixture Injection Cycle

Komatsu General Atomics Engineering Corporation processes hazardous materi-als, toxic waste, and contaminated soil and develops, manufactures, and sellsrelated processing technologies and equipment.

Komatsu IM Engineering provides consultation on the operation of pipe-layingmachinery and manufactures and sells excavation additives.

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3. Environment-friendly Productsand Services

22

Construction equipmentKomatsus mainstay productisemployed in the fields of resource development, civil engi-neering, agriculture, and elsewhere, all of which is intendedto make our lives more comfortable. Yet, at Komatsu, we aretaking the concept a step further. We are working to developmachines that not only benefit people but also have less ofan impact on the earths environment. It is no exaggerationto state that the degree of impact a product will have on theenvironment is largely determined during the design stage.Accordingly, Komatsu uses life-cycle assessment (LCA) as ameans of studying the design of its construction equipment.Today we are striving to achieve the four MidtermDevelopment Targets for Environmental Technology, whichwe have established in accordance with our findings in LCAresearch.

Introducing the LCA ConceptKomatsu organized a task force in fiscal 1998 in order to dothe groundwork for our implementation of LCA. Studyingthe published applications of LCA in various fields, we estab-lished a set of standardized, simple calculation methods forwhich the common objective was to identify an effective yetunique approach. In fiscal 1999 with these calculation meth-ods, we then conducted inventory analysis on our majorproducts with regard to CO2 emissions. The results enabledus to achieve a better understanding of the burdens theseproducts would have on the environment. Accordingly, weestablished the four Midterm Development Targets forEnvironmental Technology as guidelines for the reduction ofour environmental impact.

Concerned by the findings of our LCA activitieindicat-ing that an overwhelming proportion of total CO2 emissionsis generated during the use of machinerywe turned ourefforts toward research and development, based on a compre-hensive approach to emissions reduction that would addressnot only the engine but also the body components as well. Aswe continue under the slogan of ecology and economy inbalance, Komatsu will implement environmental measuresthat lead to greater customer satisfactionmeasures thatsafeguard the environment and effectively reduce the lifecy-cle costs associated with our products.

Midterm Development Targets forEnvironmental TechnologyReducing CO2 EmissionOur goal regarding CO2 emissions is to reduce the base levelby 10 percentbeyond the national targetby fiscal 2010. Infact, many of the products we are now developing aredesigned to achieve the 2005 emission target, which calls fora minimum reduction of 5 percent.

RecyclabilityConstruction equipment has traditionally enjoyed a greaterdegree of recyclability by comparison with automobiles andhousehold appliances. We have therefore set a recyclabilitytarget of 99.5 percent for 2010. In the meantime, to achievethe interim 2005 target of 97 percent, we are modifying thespecifications of our existing products. For instance, withhydraulic excavators, we must modify their concrete coun-terweights and rubber shoes so they can be recycled. Then, toultimately make our products 99.5 percent recyclable by2010, we will develop as many as ten new recycling technolo-gies.

Environmentally Burdensome SubstancesRegarding substances that pose a burden on theenvironment, we are endeavoring to halve the current vol-ume by 2005, and to halve that result again by 2010. To do so,we are changing our antifreezes to the non-amine-type andphasing out the use of lead in all solder.

Life-cycle CostTo achieve ecology and economy in balance we are offer-ing the customer environment-friendly products whilereducing the life-cycle cost. Accordingly, we use practices oftechnology development such as:

Reduced parts/equipment costs through the prolongedservice life of oil filters and other components; provid-ing regenerated rubber crawler shoes at a reduced cost.

Providing remanufactured components for a reason-able price through our Reman operation, while strivingto extend the serviceability of components.

Further commitment to reductions in CO2 emissions, asa result, reduction in fuel costs.

3.2 Products and Services: Reducing theEnvironmental Impact

0 100 200 300 400 500 600t CO2

Total CO2 Emissions per Lifecycle of 0.7-m3 Hydraulic Excavator

Material Manufacturing Use (10,000h) Disposal

Results calculated according to the Komatsu Engineering Standard.

Objectives

(1) CO2 Emissions

(2) RecyclabilityResult of 1998 PC200-681%fiscal year WA100-392%

(3) Environmentally burdensome substances

(4) Life-cycle cost

Fiscal 2005 Fiscal 20105 Comparison to FY 1998 result

10 Comparison to FY 1998 result

97 or greater 99.5 or greater




Midterm Development Targets for Environmental Technology (set forth in fiscal 1999)

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Waste ConsumablesWith waste consumables, our target is to halve the currentvolume by 2005 and halve that result again by 2010. Forexample, for oils, filters, and antifreezes, we are finding waysto extend their life, reduce waste, and ensure simpler meth-ods of disposal. At the same time, we are developing recy-cling/regeneration technologies that will allow us to convertwaste consumables, such as used hoses and rubber shoes, intousable resources.

Improvement in Fuel EconomyThe volume of CO2 generated by construction equipment isbasically proportional to the volume of fuel consumed.Reducing fuel consumption incorporates the following threebenefits, and hence, is an important goal.

(1) Protecting the earths limited resources(2) Reducing CO2 emissions, a cause of global warming(3) Bringing significant economic benefits to the cus-

tomer

The diesel engines that drive Komatsus construction equip-ment provide higher thermal efficiency than gasolineengines. As such, diesel internal combustion engines areinherently more conducive to the reduction of CO2. On theother hand, taking measures to reduce the emission of nitro-gen oxides (NOx)one of the controlled substances presentin exhaust gasgenerally inflicts adverse effects on theamount of fuel such an engine must consume. It has there-fore become a top-priority issue for todays engine manufac-turers to reduce emission gases while reducing the fuel-con-sumption rate.

Komatsus diesel engines have for years been among theworlds most efficient units in terms of fuel consumption.However, we must pursue further innovation in order torespond to the increasingly strict requirement regardingengines. To that end, in January 1998, Komatsu entered intoa joint-venture agreement with Cummins Engine Co., Inc., ofthe U.S.the worlds leading designer and manufacturer ofdiesel enginesto establish Industrial Power Alliance,(IPA),* as its new development arm. Under the corporateideal of Developing engines that boast the worlds best fuelefficiency. In fiscal 1999 IPA is moving forward in the devel-opment of various systems, including the following:

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Development of an Ultra-high-pressure Fuel InjectionSystemThe Tier II emission regulations scheduled to take effect in2001 with regard to off-road machines will impose tough newstandards. Moreover, such regulations will make it difficultto reduce the fuel-consumption rate and still comply withregulations on emissions controls, given the current injec-tion pressures available with conventional fuelinjectionsystems. However, one viable solution is to inject fuel at highpressure and promoting a better fuel-air mixture, therebyreducing the rate of fuel consumption.

Komatsus 6D170 series engines, slated for production in2000, will be equipped with a Cummins injection systemcalled HPI (High-pressure Fuel Injection). HPI is capable ofan injection pressure rated at 196 MPa, a figure unmatchedin its class. The system also achieves best-in-class fuel econ-omy of 188 g/kWh.

Engine-control Systems for the Next Generation ofConstruction EquipmentEnhancing a vehicles total efficiency is another effectivemeans of decreasing fuel-consumption. As a member of theKomatsu Group, IPA has the advantage of full deployment inKomatsu vehicles, plus the advantage of employing theKomatsu Groups electronics engineering arm. With thesestrengths, IPA is now developing control systems that willallow the engine to always operate at maximum efficiencyyet ensure practical use of the vehicle itself.

Energy-saving automatic transmissions help improveaccess for the physically challengedKomatsu is working on fuel conservation in areas other thanengines for construction equipment. To provide better accessfor the physically challenged, low-floor buses are rapidlybeing adopted. Komatsu ZF Automotive* manufactures andsells the energy-saving ZF-Ecomat automatic transmission,which includes a fuel-saving idling stop system that stops theengine while the bus is idling. Moreover, to make low-floor busdesigns possible, these transmissions can be mounted trans-versely at the rear of the bus along with the engine.

3.2.1

Newly Developed 6D170 Series Engines ZF-Ecomat (automatic transmis-sion for low-floor buses)

IPA, which is located on the premises of the Oyama plant, is engaged in theresearch and development of diesel engines.

Komatsu ZF Automotive Co. manufactures and sells automatic transmissions forlarge buses and trucks.

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U.S. EPA: Environment Protection Agency of the UnitedStates

24

Komatsus Low-emission Diesel Engine

Turbocharger+

Intake-air cooler

Air-cooled aftercooler

High-pressure fuel-injection pump

Increased air flow

Fuel-injection-type FCD piston

decreasing. Moreover, we are conducting the following devel-opments with the aim of reducing emissions.

Adoption of an Air-cooled AftercoolerThe pressurized supply air in a turbocharged engine canreach temperatures exceeding 150C, depending on the out-put. Not only does that increase NOx due to higher combus-tion temperatures, but it also reduces the density of airintake. As a result, improvement of performance factors suchas fuel efficiency and horsepower output are limited, com-pared to the increase in pressure provided by turbochargers.

Considering this problem, Komatsu has addressed Tier Iemission regulation by adopting a water cooled aftercoolerthat is chilled by the engine coolant. Consequently, the tem-perature of the supply air drops, which in turn reduces theemission of NOx. We are currently developing engines withair-cooled aftercoolers that provide a significant effect inorder to meet Tier II emission regulation.

An air-cooled aftercooler can reduce the temperature ofsupply air through the use of outside air, the temperature of

Reduction of Exhaust EmissionsIn 1996, Tier I of federal exhaust emission standards for off-road diesel engines came into effect in the U.S. In dieselengine technology, reduction of NOx leads to increase ofparticulates, so it is not easy to reduce both NOx and particu-lates. Nevertheless, due to its high thermal efficiency andease of integration, it is more than likely that diesel engineswill remain the most common power source used in heavyvehicles and construction equipment, for many years tocome. For this reason, development of low emission enginesis a priority in Komatsu.

Delayed fuel-injection timing is widely used as a meansof reducing NOx. However, the use of this method alonecauses combustion conditions to deteriorate, resulting inhigher levels of particulates and diminished fuel economy.That is why Komatsu has adopted a high-pressure injectionsystem, which itself embodies a technology designed toreduce fuel consumption. This will enable us to prevent theparticulate level from increasing and fuel economy from

3.2.2

U.S. EPAs* Tier I emission regulation (from 1996)

During mass production

Under develop-ment

U.S. EPAs Tier II emission regulation (beginning in 2001)

Before measures were taken

Part

icu

late

s (g

/HP

h)

NOx

0.6

0.4

0.2

02 4 6 8 10

g/HPh

State of Emission Control for Construction Equipment and Diesel Engines

5.9-3 00.5.10 5:08 PM 24

25

Reduction of Noise and Vibration Komatsu has been working to reduce equipment noise, and

our efforts have resulted in the development of a prototype

low-noise vehicle (hydraulic excavator PC128UU) with a

level of operating noise representing a decrease of 10 dB

from that of the conventional model. (The noise level mea-

sured at 7 meters from the vehicle was 70 dB with the conven-

tional model and 60 dB with the prototype.) That translates

into a reduction of humanly audible noise to just one-tenth.To apply this technology to equipment other than

hydraulic excavators, we are now developing low-noisedevices that can be installed in bulldozers, dump trucks, andall other mass-production vehicles. Moreover, we are achiev-ing a high degree of standardization of their design specifica-tions.

Specifically, Komatsu is promoting the reduction ofequipment noise by adopting sound-absorbent blades andventilators, along with high-performance sound-absorbentmaterials to reduce noise from the air inlets of engine com-partments. We are even developing high-performanceexhaust pipes. In fiscal 1999, low-noise devices were placedin two types of hydraulic excavators, and to promote recy-cling, sound-absorbent materials made from PET fiber wereutilized for the first time ever in construction equipment.

FCD Piston

Ultra low noise HydraulicExcavator (PC128UU)

which is lower than that of the engine coolant. Therefore, not only can it reduce NOx but it is also

expected to help in the reduction of particulates andimprovements in fuel economy. At Komatsu, we havealready begun installing air-cooled aftercoolers in certainmodels. Our target is to expand use of this technology by thetime Tier II emission regulation takes effect.

Optimized Combustion-chamber Shape through Use ofFCD PistonsThe reduction of particulates requires the optimized mix offuel and air within the combustion chamber. Komatsu hasmet this challenge by combining two factors: an enhancedcombustion-chamber profile via the adoption of high-strength ductile cast iron (FCD) pistons as well as increasedair flow, thanks to an improvement in the shape of theintake path.

Preparations for Tier III Emission RegulationEven stricter Tier III emission regulation are scheduled totake effect in 2005. Accordingly, Komatsu is engaged inadvanced research projects that will allow us to meet theregulation.

Manufacture and Delivery of Engines That MeetRegulationsKomatsu has established the Engine Environmental Group atthe Oyama plant, where our engines are manufactured.Regular testing of engine exhaust gas and other steps areundertaken voluntarily to ensure that the engines we manu-facture and ship are always in compliance with regulations.

3.2.3

Measures for the reduction of engine noise Rigid cylinder block Light-weight FCD piston Noise-absorbent, soundproof cover

High-performance sound-absorbent compound materials

Noise-reduction measures at exhaust systems High-performance sound-

absorbent ventilator Sound-absorbent

manifold duct

Noise-reduction measures at intake systems High-performance sound-

absorbent blade

Measures for the reduction of exhaust noise Large, two-way exhaust muffler Tailpipe with a built-in silencer

Example of noise reduction measures

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natives exist (solder, et al.). Moreover, with regard to thecurrent applications, we will work wholeheartedly towardreductions in their use.

Plastic Materials that Are Difficult to RecycleWe will limit the use of FRP (fiberglass reinforced with plas-tic), polyvinyl chloride, and halogen-based, flame-retardantplastic in new applications. With particular regard to FRP,we will actively promote a change to alternative, easily recy-cled materials. Furthermore, we are working to replace mate-rials containing chlorinea substance that can producedioxinby encouraging our Purchasing Department andparts suppliers to use alternative materials that are free ofchlorine.

Other Hard-to-Recycle MaterialsKomatsu is now promoting the use of alternatives to glasswool and composite materials. With respect to glass wool,which is used for purposes of sound and/or heat insulation,we are studying a possible switch to urethane and PET (poly-ethylene terephthalate). Regarding the rubber shoes madefrom composite materials, we are examining a new, easy-to-recycle road liner that facilitates partial repair, and arereviewing the actual method of recycling.

Komatsu has endeavored to achieve the aforementionedobjectives as part of a standardization effort known as KES*,which we completed in fiscal 1999. Given the fact that simi-lar measures are needed for articles we purchase, we haveadded the section, List of Controlled Substances underEnvironment-Conscious Procurement Regulations to ourGuidelines for Environment-Conscious Procurement, whichwas issued in 1999. This section explains the controlled sub-stances contained in secondary materials, such as packingand wrapping materials.

Reduction of Environmentally BurdensomeSubstancesKomatsu has responded quickly to environmental concerns.In 1998, we eliminated the use of asbestos in our productsand adopted MSDS* maintenance in compliance withOSHA* recommendations. In 1992, we introduced a markingsystem for the classification/recycling of plastic parts undera company-wide initiative. As such achievements demon-strate, we have set forth our commitment to environmentalissues from an early stage.

Our awareness of environmental conservation grew fur-ther with the 1992 institution of Komatsus EarthEnvironment Charter. In 1999, we began a new initiativeregarding the comprehensive reduction of environmentallyburdensome substances, calling for the evaluation andunderstanding of the overall environmental impact repre-sented by our construction equipment. According to thosefindings, our technology subcommittee has established thefollowing policies on environmentally burdensomesubstances. Those policies will be fully implemented by ourDevelopment Division.

Specific Substances for which Use Will Be CompletelyEliminatedThree types of substancesPCBs, asbestos, and specifiedCFCswere selected for complete elimination. (These sub-stances are no longer used but were specified as a means ofreaffirming our commitment.)

Substances for which Use Will Be LimitedEnvironmentally burdensome substances such as heavy met-als (mercury, lead, cadmium, arsenic, selenium, hexavalentchromium, alternative CFCs, and triethanolamine) shall notbe used other than in current applications for which no alter-

3.2.4

* MSDS: Material Safety Data Sheet

* OSHA: Occupational Safety and Healthy Administration

* KES: Komatsu Engineering Standard

About Environmental KESThe Komatsu Engineering Standard (KES) is an in-house stan-

dard for all companies in the Komatsu Group, as discussed in

the Technical Standard Committee and officially announced by

the officer in charge of engineering. Among Komatsus propri-

etary technologies, items and contents that are not regulated by

the ISO and JIS standards are standardized by the KES.

Established in accordance with company objectives, this stan-

dard not only serves as things that we can rely on to improve

product quality, reduce costs, and streamline engineering work

in our repeated operations but also serves as things that we

should observe.

Every Komatsu Group company participated in examining the

content of the environmental standards. The results of that

assessment were compiled in the Environmental KES, which was

officially announced to the Komatsu Group as an original, new

set of standards.

The institution of the Environmental KES means the environ-

ment is officially included in our corporate agenda. It also

means the environmental guidelines are drawn as things that

we can rely on in specific engineering operations as well as

things that we should observe.

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27

Improvements in RecyclabilityIndication of Material Identification Codes on PlasticPartsThe late 1980s saw an increase in the demand for construc-tion equipment used in urban civil-engineering projects.Consequently, the requirements for these machines-includ-ing exterior design and operator comfort-grew proportion-ately, and manufacturers began using plastic parts in orderto address such requirements. To facilitate the disposal ofthese parts, Komatsu introduced a system in 1992 to indicatethe material identification code on plastic parts. It was thefirst such system in the industry.

Birth of a New Concept in RecyclingIn fiscal 1993, Komatsu established the Three Rs, a state-ment defining our basic approach to recycling activities. TheThree Rs were aimed at safeguarding and conserving ourglobal environment and natural resources.

1. Reduce: Reduce the amount of waste generated. Consumables: Reduce the usage. Durable goods: Extend the life.

2. Reuse: Reuse directly as a product or part. Increase the products value in the resale market.

Broaden the use of rebuilt components and parts.3. Recycle: Convert recyclables into new resources by

changing their original form. Materials recycling: Reuse as materials Thermal recycling: Reuse as a source of thermal

energy.

Material

Ferrous and nonferrous metals

Manufacturing (Manufacturer)

Energy

Rubber, plastic

Construction equipment

Sales/service

Used parts

Used equipment

Regenerated parts

Equipment frame

Disassembly(Disassembly companies)

Extend lifeReduction

In-process recycling(Material and energy)

1 Reduce 2 Reuse

2 Reuse

3 Recycle

3 Recycle

Equipment out of service

Usage (Customer)

Lifecycle of Construction Equipment and the Three Rs

Can be recycled81%

Example of a hydraulic excavatorPC200-6

Can be recycled92%

Example of a wheel loaderWA100-3

With construction equipment, which is of course the main-stay product line at Komatsu, we are extending our effort topromote recycling over the lifecycle of every machine webuild. Again, it is an effort based on the Three Rs.

Toward Greater RecyclabilityKomatsu established the Standard Definitions forRecyclability in fiscal 1998, as outlined below, to ensure acommon understanding on behalf of more thorough recy-cling.

1. Use materials that are easy to recycle2. Adopt structures that are easy to recycle3. Use recycled materials wherever possible4. Reduce the use of substances that are environmentally

burdensome

Initiatives by the Development DivisionOur Development Division is working to set design standardsthat embody the above definitions. Moreover, it is conduct-ing trial calculations to grasp problems present in the cur-rent models. Our ideas and information on the current prob-lems regarding recycling are communicated to thematerial/parts vendors, in order that we might devise solu-tions based on our mutual understanding. To furtherimprove the recycling rate, we will also be tackling newissues such as the facilitation of disassembly.

3.2.5

Recyclability of Main Products

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Loading of Non-recyclable Parts at the Collection Facility

Recycling with a Vulcanizing Press

Recycling of Rubber Crawler ShoesAmong various used parts, the rubber crawler shoes com-monly used in small- to mid-sized hydraulic excavators rep-resent a greater environmental impact due to their largequantities and high disposal costs. Accordingly, we have des-ignated them one of the highest priority targets in our recy-cling initiative. The following explains the contents of ourrubbercrawler shoe recycling effort.

Processing of Used Rubber Crawler ShoesApproximately 14,000 used rubber crawler shoes are gener-ated each year. They are processed by the distributors in thefollowing ways:

(1) Regeneration or recycling(2) Recycling in electric furnaces(3) Incineration (The iron part is salvaged as scrap fol-

lowing incineration.)(4) Treatment as industrial waste (manifest control)

3.2.7

Development of Biodegradable Hydraulic OilUnique Characteristics of Construction Equipment andBiodegradable OilSince construction equipment is frequently used outdoors, itmay cause environmental pollution should oil leakage occurduring oil exchange, or failure of high-pressure hoses.

Concern for such a risk of environmental damageresulted in the enactment of administrative guidelines inEurope in the 1980s. The guidelines require that all construc-tion equipment operated within the confines of designatednature reserves use biodegradable hydraulic oil in order toprevent the pollution of valuable water sources and forests.Unlike regular oil, biodegradable oil is broken down natu-rally by bacteria present in the soil.

Measures at KomatsuWe responded to the issue with the development of KomatsuGenuine Biodegradable Hydraulic Oil BO46-G4, the first of itskind in the world. This allows us to use biodegradable oil inthe cutting-edge construction equipment currently in opera-tion. Combining the environmentally safe properties of con-ventional biodegradable oil with added functions designed touphold the equipments original capabilities, BO46-G4 pro-vides the following features:

1. Completely biodegradable, with less environmentalimpact.

2. Maintains the designed durability of constructionequipment being operated in harsh conditions.

3. No need for design change or dedicated parts.4. Provides sufficient braking force compared to that of

ordinary biodegradable oil.5. No problems will occur even if new product is mixed

with leftover oil during an oil change.6. Easy to collect and will not cause environmental dam-

age in the event that leakage should occur.

BO46-G4, recognized for the superior quality andperformance as summarized above, has been honored withencouragement prizes by the Japan ConstructionMechanization Association in fiscal 1997 and the Japan

Society of Mechanical Engineers infiscal 1998 on behalf of its technicalmerit. In fiscal 1999, BO46-G4 wasawarded the new Eco Mark, whichrequires higher standards than everbefore.

3.2.6

Biodegradable Oil Cans

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furnace manufacturers throughout Japan, as well as reduc-tion in transportation costs.

Building in Recyclability During the Development PhaseKomatsu has also developed highly recyclable load liner-typerubber crawler shoes and is promoting their utilization.Compared to conventional one-piece rubber crawler shoes,load liner-type rubber crawler shoes enable only damagedparts to be replaced and are much easier to dispose ofbecause they can be easily dismantled.

29

Of the above, incineration and industrial-waste treatment arethe likely cause of the environmental impact. Therefore, atKomatsu, we are recommending regeneration and recyclingas the preferred processing methods for rubber crawler shoes.

Recycling InitiativesThe key issues in the recycling of used rubber crawler shoesare as follows:

1. Collection of parts in good condition for recycling2. Realization of a lower distribution cost

Komatsu is addressing these issues through theestablishment of an original recycling channel in coopera-tion with Komatsu Parts*. Through this channel, we havebecome the first in the industry to recycle used rubbercrawler shoes and sell recycled parts as a viable business.Today, approximately 3,000 used rubber crawler shoes arerecycled annually at our two facilities.

Processing of Non-recyclable Parts in Electric FurnacesRubber shoes that are in poor condition are processed in anelectric furnace that allows the collection of iron. Initiatedby the Japan Construction Equipment ManufacturersAssociation, this operation is now being implemented inTohoku, Kanto, and Kansai/Chubu areas. In fact, approxi-mately 200 tons of rubber shoes were processed in this man-ner in fiscal 1999. The further promotion of this processingmethod, however, would require collaboration with electric

Processing Flow of UsedRubber Crawler Shoes

Used rubber crawler shoes

Regeneration/recycling

Recycling into new rubber crawler shoes

Recycling iron

Recycling as scrap iron

Recycling inelectric furnaces

Incineration

Manifest control

Environmental impact

Decreasing final-treatment facilities/remote location

Treatmentas industrial waste

Rubber crawler shoe before recycling

Rubber crawler shoe after recycling

Komatsu Parts Ltd. specializes in the sale of parts and equipment, product design,and distribution/logistics.

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30

RemanWhat is Reman?Reman is an abbreviation for remanufacturing.

Through the processes described in the poster below,components are revived to near-new quality and reassem-bled as replacement parts during repairs and routine over-hauls. At the same time, the worn components replaced inthis process are remanufactured at our Reman Centers. Thisallows us to bring them back to the market as reman compo-nents. This is Komatsus concept of remanufacturing opera-tions.

Rebuilding is another concept similar to remanufactur-ing. Essentially, rebuilt components are those that have beenrepaired only upon the request of the customer. Therefore,with a rebuilt component, the degree of performance may ormay not be guaranteed in the same way as a new part, sincethe level of quality differs from one component to another.Moreover, with rebuilt components, the machine must ceaseoperating while the components are repaired. For these rea-sons, reman components are preferable to rebuilt parts.

Features of Reman ComponentsKomatsus reman components offer the following benefits:

3.2.8 1. Quality: Can be used reliably, with a guarantee of qual-ity/performance equivalent to a new part.

2. Cost: Cheaper than new components, requiring lower-operating costs.

3. Delivery: Machine downtime can be reduced by aquick replacement of the defective component with aReman component taken from properly controlledstock.

4. Ecology: Reman components can contribute toresource conservation and to reduce waste through thereuse and recycling of components and parts.

As shown, Komatsus Reman operation offers numerousadvantages, not to mention a significant contribution to theconservation of our environment.

Expansion of Komatsus Remanufacturing OperationKomatsu is expanding its remanufacturing operationthrough Reman Centers located in the worlds six principleregions. In Japan, Komatsu Remanufacturing Company*leads the remanufacturing of engines, transmissions, torqueconverters, hydraulic cylinders, and other majorcomponents used in construction equipment under the CRdesignation. The following describes an example of engineremanufacturing in Japan from the perspective of resourcesavings.

Poster showing the remanufacturing process

5.9-P30 00.5.11 10:39 AM 30

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Komatsu Remanufacturing Company Ltd. remanufactures engines, transmissions,and hydraulic equipment, and also sells regenerated components.

Komatsu Castex Ltd. produces castings for use in construction and industrialmachinery. The company has also developed and marketed a range of productionfacilities/equipment based on its advanced casting technologies.

Extended Life for Engine PartsThe relevant Komatsu companies are engaged in an effort toimprove engine durability by jointly developing engines thatare easy to remanufacture. Items under scrutiny are thedurability of the engine, proper overhaul timing, and thefinal durability target needed to improve remanufacturing.To find answers, they are collaborating with our RemanCenters in six regions worldwide. This is resulting in thecollection of data on construction equipment operation andthe establishment of specific targets for individual parts inorder to develop products that offer high durability and eas-ier remanufacturing.

ReuseThe components returned from the customer are disassem-bled, and reusable parts are selected by checking each partagainst our strict standards of reusability. Increasing thenumber of reusable parts not only contributes to resourcesavings and waste avoidance, but also leads to cost reductions.

With our 12V140-series engines, for example, the reuserate of parts increased 26 percent over the level obtainedwhen we began remanufacturing, thanks to improvementsin inspection, screening and repair in fiscal 1999.

RecyclingComponents that were no longer usable were previously dis-posed of by the customer or distributor. Now, however, theyare returned to our Reman Centers for processing intoreusable components. In 1999, the engine return rateexceeded 98 percent.

Komatsu Remanufacturing Company Ltd. repairs andreuses these components in order to make CR units. Castparts that cannot be repaired or reused by KomatsuRemanufacturing are forwarded to the OyamaManufacturing Department of Komatsu Castex* where theyare melted for the manufacture of new parts.

Preparation of Remanufacturing ManualsTo improve the reusability of parts, we are collaborating withour Development Division, manufacturing facilities andKomatsu Remanufacturing to create manuals that define thereusability standards and repair procedures for individualparts. The manuals will also address the environmental mea-sures to be practiced globally, as in the recommendation thatour Reman Centers overseas use cleaning solvents havingless environmental impact.

Johannesburg, South AfricaKSA Reman Center

Newcastle, EnglandKEISA Reman Center

Balikpapan, IndonesiaP.T. Komatsu Remanufacturing Asia

Komatsu

JapanKomatsu Remanufacturing Training Center

Pearth, AustraliaNSK West Coast Reman Center

Brisbane, AustraliaNSK East Coast Reman Center

Lexington, Virginia, U.S.Komatsu Reman North America Inc.

Komatsus Reman Centers Worldwide

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