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Mitsubishi Heavy Industries Air-Conditioning and Refrigeration Corporation and Toyo Engineering Works to Integrate in July
-- Synergies to be Pursued in Broad Range of Areas, from Cold Chain Logistics and Air-Conditioning/Refrigeration Engineering to Commercial-Use/Residential Air-Conditioners --

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Tokyo, May 19, 2015 – Effective July 1, Mitsubishi Heavy Industries, Ltd. (MHI) will merge the operations of two of its existing group companies: Mitsubishi Heavy Industries Air-Conditioning and Refrigeration Corporation (MHI-AC&R) and Toyo Engineering Works, Ltd. By integrating the manufacturing, sales and servicing functions of the two companies, MHI seeks to configure a structure capable of pursuing maximum synergies in a broad range of markets – from cold chain logistics and air-conditioning and refrigeration (AC&R) engineering to commercial-use and residential air-conditioning systems – as a way of strengthening its AC&R operations.

The merging entities are both wholly owned MHI group companies. MHI-AC&R’s business scope includes marketing, installation and servicing of air-conditioners (both commercial and residential use), heating systems, cold storage and refrigeration products, centrifugal chillers and peripheral equipment, and the company also undertakes manufacture of some of these products. Toyo Engineering Works performs manufacturing, marketing, installation and servicing of commercial-use air-conditioners and cold storage and refrigeration products, and also undertakes the design, manufacture, construction and servicing of cold chain logistics systems and AC&R engineering systems. Toyo Engineering Works has an array of highly advanced proprietary technologies and outstanding strength in engineering, illustrated by its low-temperature and waste heat recovery systems and natural refrigerants.

Following the merger, the new company – which will retain the name Mitsubishi Heavy Industries Air-Conditioning and Refrigeration Corporation – will be capitalized at 400 million yen. It will initially have a workforce of approximately 1,100 employees. Junzo Satoh, President of MHI-AC&R, will assume the presidency of the new company.

MHI-AC&R was originally launched in October 2013 from the integration of two of MHI’s domestic AC&R marketing units. Then in October 2014 that entity was merged with Kusakabe Co., Ltd., a company that performed the manufacture, marketing, installation and servicing of heating systems. Since that time MHI-AC&R has worked to strengthen its sales and servicing functions and has also been building up its solutions business, including integrated marketing and maintenance services, for heat pumps, chillers and other intermediate-zone products – markets currently in an expansionary trend.

In parallel with these developments at MHI-AC&R, in January 2014 MHI strengthened its ties with Toyo Engineering Works, which had been an equity-method affiliate, by making it a wholly owned group company via a tender offer. Since that time, efforts have focused on creating synergies in all areas by developing collaborative ties throughout the value chain, including technologies, marketing and production.

In its new format, the newly merged MHI-AC&R will integrate its existing air-conditioner services with Toyo Engineering Works’ strengths in the construction and servicing of large-scale refrigeration systems and air-conditioner peripheral equipment. Through this integration, in addition to enhancement of the company’s servicing operations, stronger engineering operations and greater efficiency in business processing will be pursued as a way toward further expansion of overall business operations.