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Japan

Japan

Mitsubishi plans overseas expansion

Mitsubishi Heavy Industries, Japan's leading wind turbine manufacturer, says it will invest JPY 29 billion ($296.8 million) to develop wind farms in eastern Europe through a Dutch subsidiary and is considering setting up wind turbine assembly plants in Europe and the US. Locations in the UK are among sites under consideration.

Mitsubishi Heavy Industries (MHI), Japan's leading wind turbine manufacturer, says it will invest JPY 29 billion ($296.8 million) to develop wind farms in eastern Europe through a Dutch subsidiary and is considering setting up wind turbine assembly plants in Europe and the US. Locations in the UK are among sites under consideration.

To date, MHI has only made wind turbines in Japan, although it jointly owns a rotor blade factory, VienTek, in Ciudad de Juarez, Mexico, with TPI Composites of the US, and operates a turbine design office in Hamburg, Germany. But growing demand in Europe and North America has prompted consideration of investment in wind turbine production overseas, particularly given the clean energy policies of US president Barack Obama.

MHI says it may also expand production of wind turbines in Japan, where the firm's annual wind turbine manufacturing capacity totals about 1.2 GW, evenly split between factories in Nagasaki and Yokohama. MHI last year established a gearbox manufacturing joint venture called Diastein with Ishibashi Manufacturing. The company is building a new factory on the southern Kyushu island.

Commenting on the recent dip in wind turbine demand caused by lower energy prices and tightening credit, MHI's Yoshinori Ueda says that since wind turbines only account for a small part of MHI's overall business any short term decline in demand is unlikely to be as disruptive for MHI as for smaller companies focussing exclusively on wind turbines.

MHI, which has produced wind turbines since 1980, believes the shift toward larger turbines may hand MHI an advantage over younger firms unable to compete in technical expertise. While generally optimistic about the long term outlook for wind turbines, Ueda warns that MHI is unlikely to expand production as rapidly as companies elsewhere in Asia and India, describing MHI's approach to the wind power business as "slow and steady."

In Japan, MHI has supplied 326 turbines accounting for 313 MW of the country's 1.5 GW of wind capacity. It has exported 3209 turbines, with a combined capacity of 2457 MW, nearly all of them to the United States. The firm estimates it has a 3% share of the global wind turbine market.

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