MHI to Launch New Company Dedicated to Compressor Business
-- Target Set on Joining Global Top Three --

The new company will be established by transferring MHI's current compressor business operations to MTT. The new enterprise will handle compressor design, engineering, marketing and after-sales services. Compressor manufacture and assembly will continue to be performed by MHI's Industrial Machinery Business, Technology & Solutions Department. The main office of the new company will be located at the department's Kan-on Plant in Hiroshima.

In the main, the compressor business is expected to expand over the medium and long term; this is true in reference to both chemical applications such as ethylene, fertilizer and methanol production, as well as resource and energy applications including gas processing, LNG production/storage and the environment. However, because competition is becoming increasingly fierce, reorganization and weeding out among compressor manufacturers are expected to accelerate. To promote further development of the global market, establishment of a dedicated company capable of vying against peer competitors has been a matter of urgent need for MHI.

At present MHI's compressor business generates approximately 50 billion yen in sales. Since related operations were concentrated at the Hiroshima Machinery Works (now, the Industrial Machinery Business, Technology & Solutions Department) in 2000, business in this area has expanded steadily. As a result, the company already enjoys a substantial market share as a leading supplier of compressors in chemical applications. That said, MHI still has room to explore business opportunities in resource and energy applications, and until now further expansion in these areas has been a challenge for the company. The initiative to establish a company dedicated to compressor operations aims at addressing this issue. Going forward MHI and the new company will target further business expansion by strongly promoting the development of new markets and the enhancement of existing overseas business bases. These goals will be pursued by strengthening marketing activities to the oil and gas majors and by assigning experts to the emerging markets.

MHI will closely work with the new company after its establishment and is committed to supporting its business development thoroughly from both the technical and marketing aspects.