Hitachi, Mitsubishi Electric and Mitsubishi Heavy Industries have entered into a basic agreement calling for the three companies to consolidate their hydropower generation system operations.
Under the agreement, the three companies agreed to establish a preparatory company in May 2011 as a subsidiary of Hitachi and to transfer their hydroelectric power generation system operations to the preparatory company by way of simplified company split.
In a statement, the Mitsubishi Heavy said that in Japan, while the number of projects in planning to build large-scale new plants has been decreasing, demand is expected to remain solid for renovation and preventive maintenance of existing power generation facilities and for upgrading of power generation capacity.
In overseas markets, vigorous and sustained demand is anticipated in such countries as China, where large-scale electric power development projects leveraging that nation's abundant water resources are in progress, as well as in Latin America and India. For Japanese manufacturers the business environment continues to be severe, however, due to competition against European manufacturers and expansion into overseas markets by Chinese manufacturers.
Against this backdrop, Hitachi, Mitsubishi Electric and MHI reached a common recognition that the most effective means to strengthen and expand related business would be to pool their respective operating resources and engage jointly in hydropower generation system operations.
Discussions toward this end have been under way since last year, as previously announced on 5 July 2010.
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