TOKYO--(Business Wire)--
Mitsubishi Electric Corporation (President and CEO: Setsuhiro
Shimomura)(TOKYO:6503) announced today its strategy for continued expansion of
its power systems business, with an aim to achieve annual sales of 400 billion
yen in the period between fiscal 2014-2016 (April 2013 to March 2016).
Background
Mitsubishi Electric`s power systems business is involved in the generation,
transmission and distribution of electricity, as well as other energy-related
fields such as particle beam treatment systems and information and
telecommunications systems for power utilities. In the power generation
business, Mitsubishi Electric offers products such as turbine generators,
hydraulic turbine generators and power plant supervision and control systems,
while, in the transmission and distribution related business, the company
provides a range of products including high voltage switchgears, power
transformers, and protection and control systems.
In Japan, power utility firms reduced their capital investments during the
period from 1993 through 2004, but recently, expenditures in energy equipment
have seen steady growth, with total investments increasing by 47 percent from
1.5 trillion yen in fiscal 2005 to 2.2 trillion yen in fiscal 2009. Capital
expenditures in this field are expected to grow further due to increased demand
for more electricity and for the replacement of old equipment.
Despite a current temporary slowdown in demand due to the downturn in the global
economy, the overseas market as well is expected to show more mid-term demand
for energy equipment, as the economies of emerging markets expand and demand for
replacements increases in major markets. Compared to 2004, power generation
capacity in each region is expected to show the following growth figures by
2010: 6 percent in North America; 30 percent in China; and 28 percent in Middle
East and Africa.
Meanwhile, there is growing demand for power systems that has less impact on the
environment, as a means to help tackle climate change. Such demand requires
improvements to reduce greenhouse gas emissions, and the development of clean
energy technology.
Under these circumstances, there is a need for Mitsubishi Electric to bolster
its productivity and competitiveness, despite severe competition in the market
due to its industry peers expanding their production capacity, as well as
continued profitability risks arising from a stronger yen or increases in
material and crude oil prices.
Mid-term Business Targets
Mitsubishi Electric`s power systems business has shown a 30 percent growth in
sales in the three-year period until March 2009, with approximately 70 percent
of its sales derived from the Japanese market and the rest from its operations
outside Japan. Under the business conditions stated above, Mitsubishi Electric
aims to increase sales in this business by 20 percent, to achieve annual sales
of 400 billion yen sometime in the period between fiscal 2014-2016. To expand
its business in this field in the mid-term, the company has formulated the
following mid-term strategies:
* Goal
Mitsubishi Electric will promote sustainable growth strategies to expand its
power systems business as a leading manufacturer in the global energy equipment
market.
* Strategies
1) Expand global business
Mitsubishi Electric currently has the top share in high-voltage circuit breakers
for the US market and in super-high voltage switchgears for the Chinese market.
During this fiscal year ending March 2010, Mitsubishi Electric plans to
strengthen its global switchgear business, as well as its power transformer and
power electronics businesses, mainly in the US market.
In the nuclear power plant business, Mitsubishi Electric entered the Chinese
market by receiving an order for instrumentation and control system, and this
fiscal year, the company will work to attain the necessary license to enter the
US market.
In the European market, Mitsubishi Electric succeeded in entering the power
transmission systems market in the UK and the hydraulic power generation systems
market in Slovenia, and will further continue its efforts to expand its business
mainly in these markets.
Furthermore, in India, the company entered the thermal power generation systems
business by investing in a local joint venture, and received orders for turbine
generators. Mitsubishi Electric intends to further expand its thermal power
generation systems business in India. The company is also considering whether to
enter the power transmission systems market in this country.
2) Strengthen environment-related businesses in the energy equipment field
Mitsubishi Electric will propose various solutions related to power systems in
order to reduce its impact on the environment. The company intends to reduce
greenhouse gas emissions from power generation and transmission equipment,
contribute to the widespread use of nuclear power generation and photovoltaic
systems, and find solutions to challenges arising from dispersed power sources.
3) Enhance product competitiveness
In addition to continuing its previous efforts for increasing market
competitiveness, Mitsubishi Electric intends to promote its R&D to develop
products that suit global markets and also better harmonize with the
environment. The company also plans to develop cutting-edge technologies that
differentiate its products from its competitors.
4) Expand production capacity
From April 2005, Mitsubishi Electric`s power systems business has been
implementing Just-in-Time (JIT) and other productivity improvement activities.
In addition to these activities, the company will make investments to
aggressively increase its production capacity in order to achieve its mid-term
goal of 400 billion yen sales in this field.
In the turbine generator business, for example, Mitsubishi Electric will invest
some 11 billion yen in its factory in Japan to raise its annual production
capacity from 45 units in fiscal 2009 to 80 in fiscal 2013. The company will
also bolster its overseas production and procurement sites, as well as consider
future sites.
In switchgears, Mitsubishi Electric intends to increase production capacity in
factories in Japan, as well as strengthen overseas production sites mainly in
the US and Chinese markets. The company will also consider future overseas sites
for this business.
Furthermore, the company has decided to invest some 1.3 billion yen in its power
transformer factory in Japan, increasing its annual production capacity from
23GVA in fiscal 2009 to 27GVA in fiscal 2011. The company will consider further
enhancements of its production capacity for power transformers based on demands.
About Mitsubishi Electric
With over 80 years of experience in providing reliable, high-quality products to
both corporate clients and general consumers all over the world, Mitsubishi
Electric Corporation (TOKYO:6503) is a recognized world leader in the
manufacture, marketing and sales of electrical and electronic equipment used in
information processing and communications, space development and satellite
communications, consumer electronics, industrial technology, energy,
transportation and building equipment. The company recorded consolidated group
sales of 3,665.1 billion yen (US$ 37.4 billion*) in the fiscal year ended March
31, 2009. For more information visit http://global.mitsubishielectric.com
*At an exchange rate of 98 yen to the US dollar, the rate given by the Tokyo
Foreign Exchange Market on March 31, 2009.
Mitsubishi Electric Corporation
Yurika Fujimoto, +81-3-3218-3380 (Media)
Public Relations Division
prd.gnews@nk.MitsubishiElectric.co.jp
http://global.mitsubishielectric.com/news/
Copyright Business Wire 2009
