Press Information

MHI to Establish Comprehensive "Engineering Headquarters"
To Integrate Companywide EPC Operations

No.1483
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Tokyo, December 15, 2011 - Effective January 1, 2012 Mitsubishi Heavy Industries, Ltd. (MHI) will establish a new "Engineering Headquarters" that will comprehensively handle all company EPC (engineering, procurement and construction) operations by integrating related activities currently being undertaken separately by various business headquarters within the company. The move has three aims: to further strengthen the company's accumulated EPC technology and knowhow through integration; to respond swiftly to business opportunities involving large-scale infrastructure projects, which are now increasing in the overseas markets; and to boost profits from EPC operations while also providing support for business expansion of core products. The new business unit is also planned to function as a headquarters overseeing the company's solutions business, including smart community-related matters.

Specifically, the new Engineering Headquarters will integrate the current Sustainability Energy & Environment Strategic Planning Department and EPC-related units within the company's Power Systems and Machinery & Steel Infrastructure Systems business headquarters. At present, EPC-related activities of the latter two headquarters are handled mainly by the Power Systems Plant Engineering & Construction Department and the Environment & Chemical Plant Division, respectively. Within the new Engineering Headquarters, a department will also be established to handle EPC-related activities for overseas nuclear power plant projects and large-scale infrastructure projects in the Machinery & Steel Infrastructure Systems business. Takato Nishizawa, Representative Director and Executive Vice President, will become General Manager of the new organization, which will commence operations with 2,600 staff members.

Today numerous projects are planned in the overseas markets, especially in the newly emerging economies: most notably, power generation plants (including thermal and nuclear), environment-related and chemical plants, and large-scale infrastructure projects such as high-speed railways and water-related projects. While business opportunities involving such projects have been increasing significantly, competition in the market has intensified substantially, not only with powerful American and European competitors but also against Chinese and Korean companies that have newly entered these markets and strengthened their competitiveness rapidly. Under these circumstances, MHI found it necessary to further strengthen its competitiveness in EPC operations and to alter its business structure in a way that would enable the company to attract orders for large-scale projects through enhanced synergetic effects with the strengths of its core products, thereby realizing expanded profits from EPC business.

Until now MHI has focused primarily on attracting orders for large-scale infrastructure projects in the emerging economies. With the establishment of its new organization integrating earlier EPC units spread across multiple business segments and undertaking EPC and solutions businesses comprehensively, the company now looks to further strengthen and expand related business.