MHIET to Build Collaborative Framework with Seika Corp. through Transfer of Domestic Marine Engine Sales and Parts Servicing Operations -- Aim Set on Cultivating Market for Marine Engines for Fishing Vessels --

Tokyo, June 9, 2020 - Mitsubishi Heavy Industries Engine & Turbocharger, Ltd. (MHIET), a part of Mitsubishi Heavy Industries Group, has concluded an agreement under which the domestic marine engine sales and parts servicing operations currently performed by Mitsubishi Heavy Industries Engine Systems, Ltd. (MHIES), a wholly owned subsidiary, will be transferred to Seika Corporation effective October 1. The operations concerned mainly target fishing vessels, and by forming a framework of collaboration with Seika, a trading firm with a solid reputation for mobility and stability in the fisheries and marine business areas as well as a dynamic strategy for further business expansion, MHIET, which is responsible for development and manufacturing, aims to enhance its competitive strength and expand its market share.

The domestic marine engine sales and parts servicing operations performed by MHIES primarily focus on engines and auxiliary equipment for fishing vessels with gross tonnage under 20 tons. MHIES conducts its operations from 20 domestic bases, and under the newly concluded agreement all bases, except those engaging in export operations, will be transferred to Seika. Prior to the transfer, MHIES will spin off the affected operations under an absorption-type split arrangement. The resulting new company, to be located in Tokyo, will be transferred to Seika on October 1.

The agreement between MHIET and Seika Corporation comes amid growing calls for marine engine operations serving domestic fishing vessels to be more finely attuned to the needs of local fishermen.

Seika Corporation is a general trading company dealing in machinery. It has rich experience in areas including plants of all kinds, machinery systems and equipment, and environmental protection equipment, and through the years it has built a solid track record of collaboration with MHI Group. Seika is also the parent company of Sapporo-based Shikishimakiki Corporation, a leading sales agent of MHI Group engines in Hokkaido, and for some time Seika had been probing for a new strategy for expanding the subsidiary's business. The collaborative agreement thus meshes the respective aims of the two sides perfectly: MHIET and MHIES seeking to further cultivate the fishing vessel market, and Seika looking to use its meticulous marketing capability to aggressively expand operations targeted especially at shipbuilders and fisheries cooperatives.

Going forward, through MHIET and MHIES, MHI Group will work closely with Seika Group in its continuing drive to boost its competitiveness and expand its share of the domestic marine engine market.