Press Information

MHI Begins Full-Scale Production of Gas Turbine Combustors
At Manufacturing Plant in Georgia
-- Sales Expansion in US GTCC Market and Exchange Risk Avoidance Targeted --

No.1430
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Tokyo, May 12, 2011 - The gas turbine combustor manufacturing plant which Mitsubishi Heavy Industries, Ltd. (MHI) has been constructing in Pooler, Georgia, near Savannah, has now been completed and commenced full-scale operation. The event marks the first launch of production at one of several facilities being built by the company at its new Savannah Machinery Works site. The other two plants under construction will undertake gas and steam turbine rotor servicing and gas turbine assembly. With completion of the gas turbine combustor plant, MHI now looks to further expand its power systems business in North America, where demand for gas turbine combined-cycle (GTCC) power generation systems is expected to increase sharply, while simultaneously avoiding adverse effects from exchange rate fluctuations.

[MPSA
In celebration of the plant's launch, an opening ceremony was held at the Savannah Machinery Works on May 11 - US time, attended by many local parties concerned, including Georgia Lieutenant Governor Casey Cagle, as well as Takuji Hanatani, Consulate-General of Japan in Atlanta. Attendees from MHI included President Hideaki Omiya and Masafumi Wani, Executive Vice President and General Manager of Power Systems operations.

The various plants being built at MHI's 400,000 square meter (m2) Savannah Machinery Works site will be operated by Mitsubishi Power Systems Americas, Inc. (MPSA), a Florida-based subsidiary that serves as regional headquarters of MHI's power systems business in the Americas. The newly completed 13,000 m2 combustor plant has advanced production lines similar to those at MHI's Takasago Machinery Works in Hyogo Prefecture, the company's main gas turbine production facility; it will undertake fully integrated manufacturing, from welding assembly to processing and coating.

Construction of gas and steam turbine rotor servicing and gas turbine assembly plants has been under way at the Savannah site since April 2010 and April 2011, respectively. The construction of a fabrication plant for rotors, the core component of gas turbines is also under consideration. Through this series of investments, MHI looks to enhance its U.S. base structure incrementally: commencing with the manufacture of gas and steam turbine core components and main unit assembly, followed by the provision of a wide range of maintenance and upgrading services for gas and steam turbines, including rotors and other major components. With these initiatives MHI aims to boost its presence in the expanding North American market.

Today the U.S. is in need of securing new power generation sources to replace the country's aged coal-fired thermal power plants. Meanwhile, natural gas price stabilization at low level - an outgrowth of the advancement in technology to extract shale gas, which is abundant in the U.S. - have also spurred interest in GTCC systems. The launch of the new Savannah Machinery Works is MHI's response to these emerging trends in the U.S. market.

With GTCC type power generation, gas and steam turbines are used in combination to generate electricity in two stages, utilizing high-temperature exhaust gas from the gas turbine. This configuration enables GTCC power plants to achieve higher thermal efficiency than other plants incorporating earlier technology, such as conventional boiler steam turbine plants. Higher efficiency means that GTCC plants reduce fuel consumption relative to electricity output and emit less CO2, thus making them friendlier to the environment.

MHI, in a quest to promote increased adoption of GTCC power generation systems globally, as well as to realize its target of securing a 30% share of the world gas turbine market. The construction of plants and further enhancements at the Savannah Machinery Works are of core strategic importance to the achievement of this goal.

Through the establishment of a gas turbine manufacturing base in the U.S., going forward MHI will further strengthen its marketing activities for natural-gas-fired GTCC power generation systems - systems that simultaneously achieve effective utilization of energy resources and lighten environmental burdens - not only in North, Central and South America but worldwide.

 
[Hideaki Omiya, president of MHI, makes a speech at the opening ceremony]

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