Mitsubishi Hitachi Power Systems (MHPS) is set to restructure its Japanese thermal power generation equipment manufacturing base.
The company announced this week that its gas turbine business will be relocated to its Takasago works in Hyogo prefecture, while work on large steam turbines and water turbines will be done at its Hitachi facility in Ibaraki prefecture.
High-temperature parts and small-to-medium gas turbine manufacturing will move to the Takasago works, as will EPC services.
Large-scale steam turbine and water turbine manufacturing, as well as quality assurance, procurement, design and services will move to the Hitachi works.
MHPS also plans to relocate its nuclear power turbine manufacturing to the Hitachi works at a future date.
The firm’s small-to-medium sized industrial business will be moved to the Nagasaki works in Nagasaki City and to Yokohama-based MHPS Industries. Projects which require a reheat cycle will move to the Nagasaki facility, while ‘non-reheat’ projects will move to Yokohama. MHPS said this includes projects in biomass power generation, “a sector where demand is expected to grow in future”.
In organizing facilities by product type, MHPS aims to improve productivity while boosting cost competitiveness through rationalizing the supply chain. The company said said the moves will “create a consolidated structure that will effectively utilize resources which are currently spread across different sites and combine them with manufacturing functions”.
The restructuring is expected to be completed by the end of the 2017 fiscal year.
According to reports, MHPS has been tasked with cutting Y30bn ($262m) through manufacturing consolidation, but it is behind schedule. Meanwhile, parent firm Mitsubishi Heavy Industries (MHI) announced this week that its fiscal 2016 profits fell by over 50 per cent from 2015’s numbers, due in part to a 72 per cent decrease in sales from its energy and environment business.
In its statement of financial results released this week, MHI said the drop in revenue was due to a Y316bn drop in thermal power plant orders.