Group CEO Message
The Machinery Group contributes to the advancement of society Midterm Corporate Strategy 2012 and
through its handling of facilities, machinery and equipment in a Forecasts for Year Ending March 2011
broad range of fields. The group handles various plants and Our overriding goal under Midterm Corporate Strategy 2012 is
machinery from large-scale plants for generating electricity or to raise our earnings power. Besides continuing to generate the
manufacturing key industrial materials and ships to general earnings we can from existing core businesses, we intend to
industrial machinery and equipment and motor vehicles. Lever- take up the challenge of creating new business models by
aging the extensive networks and high credibility we have built strengthening and improving our functions in line with changes
with manufacturers and customers as well as the detailed in our business environment. Rising infrastructure demand in
knowledge in each field we have gained through trading, we aim emerging markets is one area we are especially keen to capture.
to expand the value chain to encompass finance, logistics and A key strategy therefore is to target business for power genera-
business development and investments. tion, transportation systems and other infrastructure projects.
The Infrastructure Project Division we formed at the beginning of
Overview of INNOVATION 2009 and the current fiscal year will lead these efforts. Created by an inter-
Year Ended March 2010 Results nal reorganization, this division pools the knowledge and exper-
We made a solid start to INNOVATION 2009 in the year ended tise of the Machinery Group in the infrastructure domain.
March 2008 by posting a fifth straight year of earnings growth Although we expect the business environment in the year
and our best result ever. Unfortunately, our earnings dropped ending March 2011 to remain different for each field and market,
sharply in the year ended March 2009, strongly impacted by the we will actively focus on developing business in growth markets.
unprecedented scale of changes in the business environment As I said, one is infrastructure projects where global demand is
that followed the Lehman Shock of September 2008. From the buoyant. Others include resource- and energy-related projects,
second half of that fiscal year, we gave top priority to supporting ship-related business, and automobile-related operations.
core operations to ride out the crisis. We reinforced risk man- For the year ending March 2011 we are projecting a ¥19.9
agement, cut costs, trimmed inventories, secured funds for our billion year-on-year increase in net income to ¥38.0 billion*.
operations, among other actions. *
Excludes the overseas power generation business, which was transferred to
In the year ended March 2010, while in the short term we another MC group.
continued to reinforce our current operations, we also took
steps to prepare for medium- and long-term growth. We pro-
moted our offshore business in Brazil, strengthened operations
in China and Russia with Mitsubishi Motors Corporation (MMC)
and began selling MMC-made electric vehicles. Harsh business
conditions persisted in the first half of the past fiscal year in all Osamu Komiya
Executive Vice President,
our business domains.
Group CEO, Machinery Group
Signs of a recovery in markets, however, began to appear in
the year’s second half, particularly in emerging markets.
We posted net income of ¥23.6 billion, a year-on-year
increase of ¥5.8 billion.
050 Mitsubishi Corporation Annual Report 2010
Kazushi Okawa Seiji Shiraki Kozo Shiraji Morikazu Chokki
Senior Vice President, Executive Vice President, Senior Vice President, Senior Vice President,
Division COO, Group COO, Division COO, Division COO,
Infrastructure Project Division Machinery Group Motor Vehicle Isuzu Business Division
Hirotsugu Ishiyama Kuninori Kaneshige Shinya Tanimura
Division COO, Division COO, Senior Vice President
Ship & Aerospace Division Power & Electrical General Manager,
Systems Division Machinery Group CEO Office
Organizational Structure Big Project
Machinery Group CEO Office < Dah Tarn Gas-Turbine Combined-Cycle Thermal Power Plant>
Machinery Group Administration Dept. In 2003, MC and Mitsubishi Heavy Industries, Ltd. (MHI) won a turnkey order for construction of a
gas-turbine combined-cycle thermal power station in Dah Tarn, Taiwan. This is one of the world’s
largest natural gas-fired combined-cycle thermal power plants, with a total of 6 units capable of
b Power & Electrical Systems Division
producing 4,272 MW of electricity. Partial operations began in June 2005 and in January 2010
b Infrastructure Project Division the facility commenced commercial operations at all units using the combined cycle with high-
b Ship & Aerospace Division pressure natural gas. Located in northern Taiwan, this facility accounts for 21% of the electricity
b Motor Vehicle Business Division supplied to the region by Taiwan Power Company, highlighting its major contribution to electricity
b Isuzu Business Division supply in Taiwan. As one of the most-efficient power plants in the world to generate electricity
using natural gas, the plant has also attracted attention for producing cleaner energy matching
local environmental standards.
09.3 10.3 11.3
Former organization basis New organization basis Located in northern Taiwan, the Dah Tarn facility accounts for 21% of the electricity supplied to the region by Taiwan
* Power Company.
Due to an internal corporate reorganization, the
overseas power generation business was trans-
ferred to the Global Environment Business Devel-
opment Group, which is included under
“Adjustments and Eliminations.”
Mitsubishi Corporation Annual Report 2010 051
large volumes. We therefore launched strate-
Power & Electrical Systems gies to expand transactions in overseas
Division markets, particularly emerging markets.
b Power Systems Unit We see the year ending March 2011 as
a period for paving the way to more orders
b Power Systems Export Unit
and investment projects in the future, given
b Elevator & Escalator Operation & expectations for many promising large
orders in the plant project field in the follow-
b Power Marketing, Japan Unit ing fiscal year. In the business where we sell
machinery and equipment in large volumes
S upported by 32 offices worldwide, this
division is developing a business model
centered on EPC*1 and trading of power
Pictured is an on-site (inside-the-fence) power generation
facility operated by wholly owned MC subsidiary MCJ
Energy Services. This state-of-the-art gas-turbine power
as well, we expect to reap rewards from
efforts to strengthen our business base at
main business investees in the form of a
plant is fired by environmentally friendlier natural gas.
generation and transmission plants, eleva- V-shaped recovery in some sectors.
tors and other equipment.
In the year ended March 2010, the
business environment failed to make a full Infrastructure Project Division
recovery amid the lingering effects of the
financial crisis. Notwithstanding, this busi- b Energy & Chemical Projects Unit
ness group posted markedly better results
b Heavy Machinery & Steel Structures
than in the previous fiscal year. In addition to Unit
robust demand in Japan, this resulted from
b Transportation Systems Unit
new undertakings such as diversifying
supply sources overseas, which led to a b Industrial Machinery & Equipment
steady stream of orders for new EPC proj- Business Unit
ects. The absence of share write-downs b Construction & Mining Equipment Dubai Metro began operating in September 2009 and
that dragged down segment earnings in the Project Unit is currently used by 100,000 passengers a day. It is
quickly becoming an important means of getting about
year ended March 2009 also helped.
for the citizens of Dubai. MC plans to leverage its
In the year ending March 2011, we do orking in the basic industry and social experience and success in this project to expand sales
not expect a rapid recovery in the external infrastructure sectors, this division of railway systems.
operating environment. That being the seeks to leverage MC’s resources and capa-
case, we will focus on winning orders for bilities to propose best-fit solutions for satis-
large EPC projects in Japan and overseas, fying customers worldwide and helping them
and chalking up more successes with realize their plans. On April 1, 2010, trans- Ship & Aerospace Division
on-site (inside-the-fence) power generation portation infrastructure-related businesses
in Japan. Along with this, we will step up were added to the division’s responsibilities.
b Ship Unit
activities in the nuclear power field and We are now pursuing a business model with
b Defense Systems Unit
environmental and energy fields amid rising twin growth engines: EPC and trading busi-
demand related to creating a low-carbon nesses, and business investments. This is in b Space & Integrated Defense Systems
society. We will also implement other mea- line with a fundamental policy of contributing Unit
sures targeting medium- and long-term to the development of the Japanese econ-
growth. With nuclear power projects in
particular, we plan to step up our response
to the entire nuclear fuel cycle, while
omy and the rest of the world over the
medium to long term in cooperation with
customers, business partners and other
T his division’s broad-based operations
span the shipping business, defense
and aerospace systems, and products
actively engaging in EPC export projects parts of MC. The division is committed to with applications related to positional and
overseas. In the environmental and energy taking the necessary actions to target growth spatial information.
fields, we are increasing our involvement in going forward. In the ship-related business, MC con-
businesses based on new technologies In the first half of the year ended March ducts wide-ranging business activities in
such as integrated gasification combined 2010, signs of an economic recovery gradu- four pivotal businesses: trading centered on
cycle (IGCC) power plants incorporating ally appeared, mainly in emerging markets, transactions of newly built ships and marine
carbon capture and storage technologies. as the effects of the global financial and machinery; chartering of company-owned
In the elevator business, where we have economic crises that spilled over from the vessels such as bulkers to Japanese and
built a global partnership with Mitsubishi previous fiscal year weakened. The resump- overseas shipping companies; ship finance;
Electric Corporation, we are endeavoring to tion of capital investment plans that had and offshore business.
expand earnings by strengthening efforts in been frozen or postponed created an In the year ended March 2010, business
overseas sales businesses. And in our improved business environment. From the conditions were difficult due to the impact of
domestic electricity retailing business, which beginning of the second half of the past fiscal a sluggish marine transport market caused
is conducted by a wholly owned subsidiary, year, business picked up considerably in by the fall 2008 financial crisis. Under these
we plan to continue efficient operations, plant projects, with economic recovery in conditions, we carried out existing contracts
while optimizing our business portfolio. China, Brazil, India and other emerging with the cooperation of business partners,
markets providing further economic impetus. and also worked to develop new projects.
EPC: Engineering, Procurement, Construction That said, a bona fide recovery has yet to Looking ahead, while keeping a close eye on
occur in the Japanese market in the business developments in the marine transport
where we sell machinery and equipment in market, we will work to transform the profit
052 Mitsubishi Corporation Annual Report 2010
structure so that it is less susceptible to the most important market for this division, overseas. In Thailand, the division’s key
changes in market conditions. This will there was a rapid recovery in the second market, MC is developing a broad-based
involve expanding the business domains of half of the year after a first-half drop-off. value chain spanning parts manufacture and
the shipping business, centered on the four China, meanwhile, overtook the U.S. as vehicle assembly as well as retail sales and
areas mentioned earlier. Through these the world’s largest auto market on the finance operations.
initiatives we intend to ensure we can gener- back of its high economic growth. In the year ended March 2010, despite
ate earnings with even greater consistency. In light of these developments, we have the impact of contraction in the global
In defense- and aerospace-related targeted higher sales of imported built-up automobile market brought about by the
businesses, we are taking active steps to vehicles in China, where further market financial crisis in the previous fiscal year, the
develop a defense business that makes an expansion is expected. This resulted in the market recovered from midway through the
even greater contribution to Japan’s national establishment of Mitsubishi Motor Sales year, led by emerging nations. Although
security, and an aerospace business that (China) Co., Ltd., an import and sales joint there were concerns surrounding political
caters to the needs of society. The latter venture with MMC. The joint venture com- conditions, the number of vehicles sold in
entails using aerospace for realizing national menced operations in April 2009 and has Thailand was approximately 130,000,
security based on the Basic Space Plan seen sales units rise steadily. In Russia, we largely on a par with the previous year.
formulated by the Japanese government in acquired an equity interest in Rolf Import However, exports of vehicles from Thailand
the year ended March 2010, and for real- (RI), an importer and distributor of MMC dropped 40% to approximately 35,000
izing a safer, more comfortable and richer vehicles, in a move designed to strengthen units due to a slow recovery in some mar-
society. Equipment supplied by MC was our sales capabilities and financial base in kets in the Middle East and Central and
employed in the H-II transfer vehicle (HTV) preparation for a market recovery there. South America.
launched by Japan Aerospace Exploration Moreover, in Indonesia, where we have a Besides Thailand, the division has
Agency (JAXA) in September 2009. core existing business, we recorded the invested in businesses in the ASEAN region,
most number of vehicles sold ever for a full Europe, Mexico and Australia. Isuzu Motors
year in the year ended March 2010. de Mexico (IMEX), an Isuzu truck distributor
Although a recovery is evident in Asia established in Mexico in 2005, achieved its
and ASEAN member nations, business 10,000th unit sale on a cumulative basis.
conditions in the year ending March 2011 And Isuzu UTE Australia Pty Ltd (IUA), an
are expected to remain as difficult as ever Isuzu pickup truck sales company estab-
due to the strength of the yen and the give- lished in 2008 in Australia, sold approxi-
back expected from the conclusion of gov- mately 5,000 vehicles in the year ended
ernment incentives for new car purchases in March 2010. This division exports pickup
industrialized countries. In the face of these trucks from Thailand to about 90 countries.
conditions, we will continue to reinforce our We are using business experience and
This division plays a part in the global marine transport existing operating base, which spans know-how gained in Thailand to grow fur-
industry through ownership and operation of approxi- approximately 20 countries around the world. ther in other countries around the world.
mately 30 vessels, including bulkers and petroleum
product carriers. Pictured is the Mighty Sky, which With global competition in the auto
came into service in June 2010. industry expected to intensify, MC is work-
ing with Isuzu Motors to boost the com-
petitiveness of the product range. We will
strengthen and expand our competitive-
Motor Vehicle Business Division ness by transferring pickup truck develop-
ment bases to Thailand to integrate
b Motor Vehicle ASEAN & South West Asia development and manufacturing, and by
Unit reinforcing the export and sales system for
b Motor Vehicle North Asia Unit next-generation vehicles.
b Motor Vehicle Europe, Middle East & Pictured is MMC’s stage at the Shanghai Motor Show.
Africa Unit Mitsubishi Motor Sales (China) is expanding sales of
b Motor Vehicle Americas & Australia Unit imported built-up vehicles in China as well as building
an automobile value chain in the country.
b Motor Vehicle Domestic Operation Unit
T hrough business investments centered
on the sale of motor vehicles supplied by
Mitsubishi Motors Corporation (MMC) and
Isuzu Business Division
Mitsubishi Fuso Truck & Bus Corporation,
b Thai Business Unit
this division aims to enhance value by build- Established in July 2005, IMEX achieved its 10,000th
ing broad-based value chains. b Europe, Middle East & Africa Business unit sale in March 2010. IMEX has a sales network
Unit stretching across Mexico.
Business conditions in the automobile
sector were sluggish in the year ended b Asia, Oceania & Americas Business Unit
March 2010 due to the global market
downturn and the yen’s appreciation. The
latter half of the year, however, saw a
gradual upturn paced by Asia and ASEAN
T his division has investments in busi-
nesses that manufacture and sell Isuzu
Motors vehicles and parts, mainly in Thai-
member countries. In Indonesia, which is land, and also export these products
Mitsubishi Corporation Annual Report 2010 053