Press Information

MHI to Tie Up with NIBE Industrier AB of Sweden
And Enter European Air-to-Water Heat Pump Market
Joint Development of Energy Saving, High-Performance Products
And Mutual OEM Supply Planned

No.1271
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Tokyo, January 19, 2009 - Mitsubishi Heavy Industries, Ltd. (MHI) has decided to tie up with NIBE Industrier AB, Sweden's largest heating equipment manufacturer, and enter the European air-to-water heat pump market. The two companies signed a business collaboration agreement regarding joint product development on January 19. By combining MHI's DC inverter technology for outdoor units established through its air-conditioner business and NIBE's technology applied to hot-water supply and other units, the two companies plan to introduce products that are both highly efficient in energy saving and high in performance. Through this initiative and mutual OEM supply, the two parties aim to expand their respective sales.

Targeting the residential heating and hot-water supply market in western and northern Europe, MHI will newly enter this market with a system that utilizes hot water and features the company’s energy-saving heat-pump technology. As a heat-pump type system can achieve three times higher energy efficiency than conventional electrical boiler type systems, and also offers advantages in environmental aspects such as contributing to prevention of global warming, the market for heat-pump type units is expanding rapidly, further spurred by tax benefits implemented in many countries for use of such units. In addition, as reductions in running costs, beneficial for consumers, can be expected, heat-pump units also have potential in terms of replacement demand.

NIBE Industrier AB is headquartered in Markaryd, Småland province in southern Sweden. The company markets heating equipment ranging from hot-water floor-heating systems using fuels and heat pumps, and radiator type air-conditioning/hot-water supply systems, to traditional wood stoves. It is one of the largest heating equipment manufacturers in northern Europe and has a vast sales network in the region.

Based on the tie-up agreement, MHI and NIBE will jointly develop air-conditioning/hot-water supply products by pooling their respective technologies: MHI's high-performance inverter type heat-pump technology and NIBE's technologies applied to hot-water storage tanks and hot/chilled water circulation. The two companies will also market their products under their own brand names through their respective sales networks.

The air-conditioning/hot-water supply system to be developed will consist of an outdoor unit plus a heat-exchanger unit incorporating a heat storage tank. The system will be capable of supplying hot water for showering and other sanitary uses, and of circulating hot/chilled water for heating/cooling. One feature of the new product will be integration of the heat exchanger device and heat storage tank into one unit, to achieve reduced installation space and easy installation.

For hot-water supply, the new product will adopt a method that utilizes direct pressure from water pipes and can cope with various sterilization temperature settings according to the requirements of each country. Equipped with a large-capacity auxiliary electric heater as standard equipment for back-up, the system will be able to cope with irregular excessive use of hot water.

Initially, the two companies will introduce one representative model. They will subsequently expand the product line by adding models. Along with this business expansion initiative in Europe, MHI intends to enhance production capacity at Thai Compressor Manufacturing Co., Ltd. (THACOM), its rotary compressor manufacturing subsidiary in Thailand. The rotary compressor is a component of the products to be developed with NIBE.

About Mitsubishi Heavy Industries
Mitsubishi Heavy Industries, Ltd. (MHI), headquartered in Tokyo, Japan, is one of the world’s leading heavy machinery manufacturers, with consolidated sales of 3,203 billion yen in fiscal 2007 (year ended March 31, 2008). MHI’s diverse lineup of products and services encompasses shipbuilding, power plants, chemical plants, environmental equipment, steel structures, industrial and general machinery, aircraft, space rocketry and air-conditioning systems.

For more information, please visit the MHI website (http://www.mhi.co.jp/en/index.html).

About NIBE
NIBE Industrier AB, which has its head office in Markaryd in the south of Sweden, currently employs 5,500 people and has annual sales of some 60 billion yen. The company has been listed on the Stockholm Stock Exchange since 1997. NIBE Industrier consists of three business areas: NIBE Element, NIBE Heating and NIBE Stoves, all engaged in the product development, manufacturing and marketing of heating products. Production takes place in Sweden, Norway, Finland, Denmark, Poland, the Czech Republic, Italy, Spain, the Netherlands, the UK, Austria, China and Mexico.

NIBE Heating develops, manufactures and markets heat pumps, water heaters, domestic boilers and district heating equipment. Annual sales for this business area total around 33,2 billion yen