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MHI Establishing New Companies in Engineering & Control Systems

February 27, 2012

MHI Shipyard, Nagasaki: Credit Wiklpedia CCL

MHI Shipyard, Nagasaki: Credit Wiklpedia CCL

MHI to Establish Companies for Engineering and Control System Businesses,
Integrating Group Companies in Nagasaki, Takasago and Yokohama Regions

Tokyo, February 27, 2012 - Effective April 1, 2012, Mitsubishi Heavy Industries, Ltd. (MHI) will establish two new companies to perform nationwide operations in engineering and control systems businesses, respectively, through integration of its group companies currently handling those businesses regionally in Japan. The two companies, both to be wholly owned by MHI, are: MHI Plant Engineering Co., Ltd. (MHIPEC), dedicated to engineering business, and MHI Control Systems, Co., Ltd. (MHICS), specializing in control systems. With establishment of the two new entities, MHI aims to enhance the engineering capabilities and product competitiveness of its group by strengthening collaboration between the business operation headquarters of the parent company and group companies.

MHIPEC will integrate three companies* - Choryo Designing Co., Ltd. in Nagasaki, Koryo Engineering Co., Ltd. in Takasago, and Ryonichi Engineering Co., Ltd. in Yokohama - as well as a part of the current Engineering Division of Mitsubishi Heavy Industries Environmental & Chemical Engineering Co., Ltd. (MHIEC). The new entity will provide a broad range of engineering support services to MHI's Engineering Headquarters, and will provide business and technology support related to MHI's Power Systems, Shipbuilding & Ocean Development, Machinery & Steel Infrastructure Systems and Aerospace Systems business sectors. MHIPEC will also be responsible for coordinating industrial-use thermal power generation systems business and design work related to the energy and environmental solutions business, an area expected to grow in the future. MHIPEC, to be capitalized at 1 billion yen, will commence operations with about 1,600 employees. Masao Ishikawa, Senior Chief Engineer, Engineering Headquarters of MHI, will serve as president.

MHICS will integrate two companies - Choryo Control System Co., Ltd. in Nagasaki, and M.H.I. Digital System Co., Ltd. in Yokohama - and also merge with the control system divisions of Koryo Engineering and Ryonichi Engineering. MHICS will comprehensively handle the design, manufacture, on-site adjustment and after-sale servicing of control systems, mainly for use in power systems. The new entity will not only supply control systems for power plants delivered by MHI; leveraging its technological expertise and abundant experience and track record, it will also market its control systems for an array of other applications. Capitalized at 60 million yen, MHICS will start with roughly 400 employees. Daisaku Hirata, Executive Managing Director, Ryoin Co., Ltd. will serve as president.

Both of the new engineering companies will have their head office in Naka-ku, Yokohama (within the Honmoku Plant of MHI's Yokohama Dockyard & Machinery Works); their offices will be located in Nagasaki, Takasago and Yokohama, enabling them to cover MHI's engineering and power systems-related bases throughout Japan. The new companies will also strengthen collaboration with overseas partner firms.

Integration of the group companies at this time comes in line with MHI's new business operation management structure. In April 2011 the company revised its conventional two-track (segment- and plant-based) organizational structure and unified into a single, business segment-based structure. In January this year, MHI established an Engineering Headquarters to integrally handle engineering, procurement and construction (EPC) related activities. These organizational changes of MHI have given rise to the need to establish a new business support structure optimized for sustained global business development through integration of group companies that have conventionally provided regional support to manufacturing plants, and the pooling of their accumulated technological expertise.

After establishment of the two new companies, MHI will closely liaise with them to enhance the business foundations of the MHI group and drive its future business expansion.

* Excluding the control system divisions of Koryo Engineering and Ryonichi Engineering.

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