Mitsubishi Heavy Industry In Joint Venture With Siemens

Nagoya's Mitsubishi Heavy Industries Ltd. (MHI) said May 7 that it will establish a joint venture with Siemens AG of Germany to expand the product line in the steel and metal production machinery business and to accelerate globalization.

The new venture will be established in January 2015 in Britain, integrating Mitsubishi-Hitachi Metals Machinery Inc. (MH)--an MHI consolidated group company with equity participation by Hitachi Ltd. and IHI Corp.--and Siemens MT Business, Siemens group companies undertaking metals production in countries including Germany, Austria and the United States.

Equity ownership shares in the new venture will be 51 percent for MH and 49 percent for Siemens. The CEO for the venture is currently being selected.

Mitsubishi Heavy said the agreement was achieved on the back of the meshing of the two partners' respective aims: MHI and the Japan side looking to strengthen their business through enhancement of product offerings and the development of a global network of business bases, and Siemens eager to improve its steel and metal production machinery business structure as it undertakes a review of its business portfolio.

Under the current plan, the new joint venture will operate six regional bases in Japan (Tokyo/ Hiroshima), Austria (Linz), Germany (Erlangen), the United States (Pittsburgh), China (Shanghai) and India (Mumbai), enabling worldwide coverage.

Business units for each product line will be based respectively in Tokyo/Hiroshima, Linz or Erlangen, and other existing business bases of MH and Siemens will operate under Tokyo/Hiroshima or Linz based on product line responsibility.

The U.K. headquarters will manage the regional bases, including respective business units, and will hold a cross division function in charge of sales/marketing, customer management, procurement, manufacturing, R&D planning, etc., to support each business location. The new joint venture will operate with a collective staff of approximately 9,000 employees.

Through the collaboration with Siemens, MH will add upstream blast furnaces and electric furnaces to its product portfolio, significantly enhancing its ability to supply products for all metals production processes through expanding the product line.

MH and Siemens also complement each other substantially with respect to geographic areas, a factor that will now enable acceleration of worldwide business expansion including Asia, Europe, Russia, the Americas and Africa.

Zengoku