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MHI Compressor Technology Licensee in China Begins Marketing
-- Vigorous Sales Activities Targeting First Unit Order in This Spring --

No.1407
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Tokyo, February 9, 2011 - Hangzhou Steam Turbine & Power Group Co., Ltd., (HTP), of China, a licensee of compressor technology of Mitsubishi Heavy Industries Compressor Corporation (MCO), a subsidiary of Mitsubishi Heavy Industries, Ltd., (MHI), has completed its sales structure of compressors in the Chinese market and begun its marketing. Through collaboration with MCO, HTP targets annual sales of 30 units in three years.

MCO and HTP signed the licensing agreement in September last year and have completed technical assistance training based on the agreement. Thus completing preparation for compressors and turbines combined sales structure, HTP has begun full-scale sales operations, including vigorous market development activities such as product presentation meeting with customers, aiming at receiving order for the first unit this spring. The two companies look to explore demands for compressors in the rapidly growing Chinese market together, including its application for petrochemical-related plants, in response to the Chinese government's policy promoting domestic compressor production.

Through this collaboration, MCO will promote the penetration of its product in the Chinese market as well as increase business opportunities by managing negotiations that had previously been handled by Chinese manufacturers. In parallel with the provision of production technology guidance, MCO will supply major parts, mainly rotating bodies such as rotors and bearings from Japan.

Meanwhile, with technology licensing from MCO, HTP has gained the capacity to manufacture and market compressors in China. With the addition of compressors, HTP, which has been producing turbines to drive compressors, is now able to integrally manufacture and market compressors and turbines and conduct robust marketing in plant-related areas, including oil refineries and fertilizer, purified terephthalic acid (PTA) and methanol production plants as well as air separation facilities.

HTP is the largest manufacturer of industrial steam turbines to drive machinery in China. The company is already in a collaborative relationship with MHI for small size blast-furnace-gas fired gas turbine.

MCO was established in April last year through the integration of MHI's operations in compressors at its Industrial Machinery Business, Technology & Solutions Division and MHI Turbo-Techno Co. (MTT), which had handled the related after-sales services. As a company dedicated to the compressor business, MCO has been accelerating dynamic business development in the global market, and the collaboration of the two companies is in line with that goal.

As China's move to promote the domestic production of industrial products intensifies, the country is proactively pursuing measures with which to switch from imported machinery products to purely domestic or quasi-domestic goods through the introduction of foreign technology.

Going forward, MCO looks to further expand its compressor business in China, pursuing the multiple effects of turbine/compressor package orders by combining HTP's turbines - which enjoy the largest market share in machinery-driving turbines – and compressors licensed from MCO - which hold the largest market share in China in imported compressors for petrochemical plants.