MHI to Establish Subsidiary in Vietnam For Commercial Aircraft Component Production -- Domestic Facilities to Focus on High-value-added Operations --

MHIVA will be located at the Thang Long Industrial Park (TLIP), an industrial park jointly built by a Japanese and a Vietnamese company, situated approximately 16 kilometers northwest of central Hanoi. MHIVA will build a production plant with 4,000 square meters (m2) in floor area within the 19,000 m2 plant premises. In 2009 and 2010, MHIVA will assemble flaps for 2-8 airplanes every month, and for 10 airplanes starting in 2011. While parts for the flaps will be either supplied from Japan or procured from neighboring countries, including Malaysia and China, for some time to come, MHIVA will gradually expand local procurement in Vietnam in tandem with that country's industrial base development.

MHIVA, capitalized at US$7 million, will start with 50 employees, to be expanded to about 200 once production achieves momentum.

As price competition surrounding commercial aircraft becomes fierce, the world's aircraft manufacturers continue to shift part of their production bases to countries such as China, East Europe and Mexico. MHI's decision to establish MHIVA is in line with this move. The company decided to locate MHIVA in Hanoi, Vietnam, not only because it was able to secure a production site within a Japanese-affiliated industrial park with a good industrial infrastructure, but also in view of such factors as Vietnam's diligent labor force, robust economy, stable public security and the presence of overseas transport routes.

MHI presently has multiple large-scale new projects under way in the aerospace business, including full-scale production of composite material wing boxes for the next-generation super-efficient Boeing 787 Dreamliner and the MRJ (Mitsubishi Regional Jet) development program, the official launch of which is scheduled to be decided next spring. Going forward, the company will continue to work on expansion of its commercial aircraft business through dynamic combination of overseas bases that will deal mainly with assembly of currently existing components such as metal parts and domestic production bases focused on high-value-added operations that require sophisticated technologies, such as composite materials.