Kobelco Construction Machinery is planning to invest about $42 million to construct a hydraulic excavator production factory in Spartanburg, S.C., the company said. After concluding an official purchase agreement for the planned construction site, KCM plans to begin site preparation in April and complete construction by the end of the year.

Kobelco hopes to begin mass production of the 20-ton excavator in January of 2016. Kobelco will begin with an annual production capacity of 1,800 units, the company said, but plans to increase the menu and development according to the market.

Kobelco hopes to gain market share in fiscal 2015 of 7 percent or higher, the company said. Kobelco hopes to improve its after-sales activities including parts sales and grow market share to at least 10 percent, which the company said it had before forming an alliance with CNH.

“Having a production site in North America will allow us not only to reduce the production lead time of machines for North American customers and improve capability for meeting the market needs, but also reduce the operational burden on the Hiroshima Itsukaichi factory and build an optimal group-wide production system,” the company said in a statement.

Kobelco Construction Machinery re-entered the U.S. market in 2013 and set about rebuilding a distribution network. As of December 2014, Kobelco has concluded dealer agreements with 62 companies, 52 in North America and 10 in South America.

The factory will be built on an 85-acre site, with access to Charleston (S.C.) Harbor.

Kobelco Construction Machinery is based in Tokyo, with U.S. headquarters in Katy, Texas.