Marine Link
Wednesday, October 26, 2016

MHI's Entity to Oversee Material Handling Equipment, Engine and Turbocharger Businesses

February 6, 2016

Organizational Structure Courtesy MHI

Organizational Structure Courtesy MHI

Today Mitsubishi Heavy Industries, Ltd. (MHI) decided in principle to launch a new wholly owned entity to integrally oversee its current businesses in material handling equipment centered on forklift trucks, engines and turbochargers. The new entity will serve as an independent management body to provide integrated and swift responsive oversight of these three core businesses. Under this initiative, MHI looks to generate synergy benefits, streamline its organization, and explore new fields as a way of significantly strengthening its competitiveness. Going forward, scale expansion and higher earning capacity will be pursued in a quest to achieve net sales reaching 1 trillion yen.

The new business entity will be launched by a target date of March, initially overseeing the material handling equipment business. Subsequently, in July a firm taking over MHI's engine and turbocharger businesses will also come under the entity's corporate umbrella.

In the material handling equipment business, equity in UniCarriers Holdings Corporation (Kawasaki, Kanagawa Pref.) will be assumed in March (planned) by the new business entity (acting on behalf of MHI) and Mitsubishi Nichiyu Forklift Co., Ltd. (Nagaokakyo, Kyoto Pref.), their ownership ratios to be 65% and 35% respectively. In tandem with that move, MHI's stake in Mitsubishi Nichiyu Forklift will be transferred to the new business entity.

A new company to handle the engine and turbocharger businesses will be established in April in the form of a preparatory company founded as a prelude to taking over those businesses. Plans then call for a company split agreement to be concluded with MHI by May, with the takeover of the split businesses slated to take place in July. Capitalization will be furnished in full by the integration entity.

As MHI's mass-manufactured products affected by the new business restructuring initiative today are undergoing globalization in development, production, procurement and sales, outstanding synergy benefits can be anticipated. Going forward, business in material handling equipment and engines will increasingly shift away from single unit sales to the provision of solution packages. Engineering advances in engines will drive a focus on distributed power generation and cogeneration type systems.

Under these management measures the new integration entity will pursue swift strengthening of competitiveness targeted at significantly enhancing scale expansion and earning capacity.

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