2010 Medium-Term Business Plan by ygs12945

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									2010 Medium-Term Business Plan
         (2010~2014)



          April 28, 2010


      Hideaki Omiya, President
                                 1
                      Index
1. Challenges Facing the Company              ---     3
2. FY2008 Medium-Term Business Plan Summary   ---    4
3. Our Challenges and 2010 Business Plan      ---     6
4. Target                                      ---   7
5. Resource Planning                           ---   11
6. Strategies in 2010 Business Plan            ---   12
7. Promoting CSR Activities                    ---   32

Supplementary Information                     ---    34




                                                      2
       1. Challenges Facing the Company
                                                                                   Enormous number                        Expansive                       Numerous
     1977           1985      1991        1995                      2008              of products                      technology range                production bases
     Oil shock      Plaza     Burst of    Deregulation in         Global
                    agreement bubble      power sectors,       recession                            Shipbuilding     2100 staffs working for           Independent activity
(100 bli.yen)                                                                                                        Technical division
                              economy     Public                           Mass Products                                                               of works
4                                         investment                 8%                                                                                           - Works -
                                          slowdown                                                   Power Systems
                                                                                                                                   Marketing
                                                                            Aerospace
                                                                                               Machinery &
                                                                                                                                                      Segments
3      Sales                                                         6%                        Steel Structures      After-sales
                           Long-term challenges                                                                       service                  R&D
                              - Slow growth                                                 700 Products
2                          - Low profit margins                      4%    Market-share of major products
                                                                                                                       Manufacturing    Procurement
                                and low ROE




                                                                             Products
                                                                                               10      11
                                                                                        1                     4
1                                                                    2%
         Operating                                                                      1位    2-3位    4-6位   7位以下


       income ratio                                                                                                                                   Obstacle to overall
                                                                                                                         Focus on R&D
                                                                     0%     Competition in all markets                                                optimization
                                                                                                                         Inadequate synergy
                                                                            Most products are medium-                                                 Enormous volume of
                                                                            share                                        benefits
    1977 1980       1985      1990       1995      2000     2005                                                                                      business processes

                                                                     -2%

                                                                                        The illusion of comprehensive capability!



                 Promoting 2008Medium-Term Business Plan
                      Global growth in production business
                      Business process reform
                  (Accelerating manufacturing reform, Enhancing risk management, Bolstering the business operation system)
                                                                                                                                                                              3
     2. FY2008 Medium-Term Business Plan Summary (1)
                                               Source: IMF (World Economic Outlook / Jan 2010)
 World GDP Growth (%)
                                                                                                  Demand declined with the global
     4.9             5.4             5.2       The global recession
                                               T                  n                               recession
                                                   3.0
                                                                                                  The yen remains strong
 Foreign Exchange (Yen/ $)
                                                                  -0.8
                     115             115
     111
                                                    103                  95
     Orders received (billion yen)                          * Planned rate                        FY2010 target values set out in the
     Net sales                                                                                    2008 Business Plan are now frozen
     Operating income                                : Challenge 09 Targets
                                                                              3,900.0
                                3,715.2           3,375.6                           3,700.0       Company-Wide Emergency Plan
                3,274.7
2,942.0               3,068.5         3,203.0 3,268.7          3,100.0                            “Challenge 09” has been activated to
      2,792.1                                                      2940.8 3,000.0
                                                             2,476.2
                                                                                                  ensure FY2009 profits
                                                                                        160.0
                                           136.0
                           108.9                          105.8
           70.9                                                          65.6 65.0                The FY2009 orders received and net
                                                                                                  sales are both lower than expected but
    FY2005          FY2006          FY2007          FY2008        FY2009             FY2010
                                                                                                  operating income reached its target.
                                                                                 [2008 Business
                                [Actual]                                          Plan Targets]
                                                                                                    FY2009                       (Billion yen)
                                                                                  Freeze-up                       Challenge 09     Actual
                                                                                   Forecast
                  2006 Business Plan                                                              Orders received        3,100   2,476.2
                                                          2008 Business Plan                      Net sales              3,000   2,940.8
                                                                                                  Operating income          65      65.6
      * 2009 shows an initial estimate of orders,            Challenge 09
        sales and profit in the interim report
                                                                                                                                                 4
         2. FY2008 Medium-Term Business Plan Summary (2)
                            Orders received                                                                                              Net sales                                          Operating income
                                                                                                                                                                           Mass and
                                                                                                                                                                                                                 (In billion yen)
                                                                      (In trillion yen)                                                               (In trillion yen)
                                                                                                                                                                          Medium-Lot
   Mass and           3.7                                                                                 Mass and
                                                                                                                              3.2           -9%                                          136.0   -52%          65.6
  Medium-Lot                        -35%                                                                 Medium-Lot
                                                                                                                                                     2.9                  Manufactured
                      0.9                                                                                                                                                  Machinery
  Manufactured                                                                                          Manufactured                                                                     40.0
   Machinery                                                      2.4                                    Machinery            0.9          -44%      0.5
                                    -45%
                                                                  0.5                                                                                                                            +37%      128.2
                                                                                                                                                                           Order         96.0
                      2.8           -30%                                                                                                   +5%
   Order                                                                                                 Order                2.2                    2.3
                                                                      1.9                                                                                                                                  -62.6
   Goods                                                                                                Goods
                                                                                                                                                                                         2007              2009
                   2007                                      2009                                                          2007                      2009
                                                                                                                                                                           Although results in Mass and Medium-Lot
   Results in both the Ordered Goods business and                                                        Results in Mass and Medium-Lot Manufactured                       Manufactured Machinery worsened, results in the
   Mass and Medium-Lot Manufactured Machinery                                                            Machinery plummeted.                                              Ordered Goods business raised income.
   declined.

                                 Analysis of Changes in Operating Profit                                                                                                  Results and Challenges
                                                                                                                                  (In billion yen)

                                          Result of the Emergency Plan “Challenge 09” Activities
                                          Detail: :Improvements                                                              +146.7
                                                                                                                                                       Results
                 Foreign exchange
                                                                                                                                                          Technical Headquarters and Production System Innovation
                                          Under-recovery of fixed costs for
                                                                                                                                                          Planning Dept
                                          Mass and Medium-Lot Manufactured Machinery                                            -70.7
                                                                                                                                                          Drive forward the Modular Design Project
                                                             Effect of
                       -95.3                                                                                                                              To improve cost
                                                             higher material
      +136.0                                                 costs                                                                                        Proceed with the activities of Sustainability Energy &
                                      +18 0                                       Change in                                                               Environment Strategic Planning Dept.
                                                               -33.0
                                                                                  R&D costs                                                              Expand the network with governments and electric power
                               Effect of                                                                                +76.0            +65.6
                                                                                     -10.1
                               changes in net                                                                                                             companies
                               sales
                                                                                                      -25.8
                                                                                                                                                         Enhance the proposals of Solution Business
        2007                   (including                                                             Institutional                      2009
                               change in                                                                                                                  Improve the P&L of Machinery & Steel Structures Headquarters
                               product mix)                                                      ChangeChange
                                                                                                                                                       Challenges
                                              Effect of changes
                                Foreign                               Effect of higher   Change in      Institutional     Challenge 09
                    2007
                               exchange
                                             in net sales(including
                                            change in product m ix)    material costs
                                                                                         R&D costs        Change        (Improvements)    2009            Increase orders in the Ordered Goods business
   Order goods          96 0        -72 1               -36 5                  -23 0          -13 5            -23 6           127 7        128 2         Fundamentally strengthening Mass and Medium-Lot
  Mass&Midium           40 0        -23 2               -18 5                  -10 0           34              -2.2            -51 7        -62 6         Manufactured Machinery (Optimize the fixed cost structure to
                                                                                                                                                          respond to demand fluctuations.)
・Cuts in fixed costs in emergency action                                         + 19.0                                                                   Reduce foreign exchange exposure
・Insufficient returns from fixed costs in association with reduced production etc.                                                        - 70.7
                                                                                                                                                                                                                                    5
  3. Our Challenges and 2010 Business Plan
Strategies in 2008 Business Plan                Our challenges exposed through a global recession
                                                  Increase orders received in the Ordered Goods
  Global growth in the production business        Fundamentally strengthening Mass and Medium-Lot
                                                  Manufactured Machinery
  Business process reform                         (Optimize the fixed cost structure that can respond to
     Accelerating manufacturing reform            demand fluctuations)
     Enhancing risk management                    Reduce foreign exchange exposure
     Bolstering the business operation system
                                                                           Market Environment
                                                                The market orientation is shifting from the three
                                                                regions of North America, Europe and Japan to
                                                 Early          emerging nations
                 Continue &                                        Intensified competition in emerging nations
                                                Solution           Low-price offensive by manufacturers in emerging nations
                  Explore
                                                                Yen remains strong
                                                                Increased awareness worldwide of global
                                                                environmental measures
           2010 Business Plan
                                                           -Exercise the Total Strengths-
                                                    [Reform] Establish a stable revenue structure
           Promote “Reform”
                   and                              [Growth] Step up global growth
        Achieve “Global Growth”                               Establish an agile management system
    to respond to the drastic changes                           Enhance cross-sectional functions
              in the market                                     company wide
                                                                    p y
                                                           Promote CSR activities globally
        4.Target (1)
                                                                                          2010 Business Plan
                                                 The global recession
                                                 Th                on
                                                                          Reform process                Growth process
                                                          Challenge09

                            2006 Business plan 2008 Business plan
                                            an
                                                                                          :2008 Business plan Target         4.40
                                                                                  3.9
                                       3.71                                                              3.80
                                                                                  3.7
Orders received              3.27                    3.37                                                                    4.10
                    2.94                                                  3.10
  (trillion yen)                                               2.94
                                         3.20                                                            3.40
                                                    3.26
   Net sales                  3.06                                                                                          250.0
                    2.79                                                  2.85
 (trillion yen)                                                 2.47
                                      136.0
                                                                                  160.0                 160.0
                             108.9                  105.8
  Operating 70.9
                                                                65.6      75.0
   Income
 (billion yen)2005           2006      2007          2008      2009       2010                          2012                 2014
                                      [Actual]                          [Forecast]                 [ Progressive Targets]   [Target]

  ROE(%) 2.2                  3.5      4.3          1.8         1.1        1.6                           5.0                8.0
 Foreign Exchange   (111)    (115)     (115)         (103)      (95)       (90)                           (90)                (90)
 (JPY/US$)

                                                                                                                                       7
4.Target (2)
                                                                                    (In billion yen)

                                                                         2010Buisiness Plan
                              2008           2009            2010          2012             2014
                              Actual         Actual         Forecast      Target           Target

 Orders received              3,268.7        2,476.2         3,100.0      3,800.0           4,400.0
 (shares of overseas sales)     (51% )         (38% )          (54% )       (61% )            (63% )


 Net sales                    3,375.6        2,940.8         2,850.0      3,400.0           4,100.0

 Operating income               105.8            65.6            75.0       160.0              250.0

 Ordinary income                  75.3           24.0            35.0       110.0              200.0

 ROE                             1.8%           1.1%            1.6%           5%                  8%

 ROIC                              1.8%           1.1%           1.4%              3%                  5%
 D/E ratio                             1.3            1.1          1.1             0.9                 0.8
 Interest-bearing debt           1,612.8        1,495.3        1,500.0      1,300.0            1,200.0
 Dividend per share                6JPY           4JPY           4JPY         6JPY              10JPY

                                                                                                             8
  4.Target (3)
Category      Segment                      Direction of Growth / Reform                  2014
                                                                                                         2,000
                                                                                                                     Operating Margin
         Power Systems With growing calls for global environmental measures
                        and infrastructure demand in emerging nations,                                                 (billion yen)
         Machinery &    increase the size and profits of these businesses
                                                                                    Sales           : ¥4,100bn                           Power
Growth Steel Structures as MHI’s core operations                                                                                        Systems
                                                                                    Operating Income: ¥250bn
Business
                        Strive to improve the earnings footing while                ROE              : 8%
                        increasing the size and profits of the businesses,
         Aerospace
                        against a backdrop of expanding demand                                                        Machinery &
                        for aircraft over the medium and long terms                                        500
                                                                                                                     Steel Structures
                                                                                                                                     GM & SV
           Shipbuilding & Reduce fixed costs, focus on specific areas                                       Aerospace                     Machine Tool/
           Ocean          and ensure stable revenues                                                                            Air-Con      Other
                                                                                                             0
Reform GM & SV                                                                  -10.0%        -5.0%           0.0%              5.0%              10.0%
Business                   Flexibly review fixed costs early to move into the                                    Shipbuilding
         Air-Con                                                                                                  & Ocean                         Margin
                           black                                                                        △ 500
           Machine Tool


             2009                                                                        2012
                              2,000                                                                      2,000
                                           Operating Margin                                                           Operating Margin
     Sales           : ¥2,940bn              (billion yen)                                                              (billion yen)
                                                                                  Sales           : ¥3,400bn
     Operating Income: ¥65.6bn
                                                                                  Operating Income: ¥160bn
     ROE              : 1.1%
                                                                                  ROE              : 5%
                              1,000                                                                      1,000                           Power
                                                          Power                                                                         Systems
                                                         Systems

                               500                                                                         500           Machinery &
                           Machinery & Machine Tool/
                          Steel Structures                                                                      Air-Con Steel Structures
            Air-Con                        Other Shipbuilding                                         Aerospace                      Machine Tool/
                    Aerospace                     & Ocean                                                             GM & SV            Other
                                  0                                                                          0
    -10%            -5%               0%            5%             10%          -10.0%        -5.0%           0.0%
                                                                                                                      Shipbuilding
                                                                                                                               5.0%               10.0%
    GM & SV                                                                                                            & Ocean
                                                                   Margin                                                                          Margin
                             △ 500                                                                      △ 500

                                            * Size of bubble = size of sales                                                                                9
      4.Target (4)
                                                                                                                                             (In billion yen)
                                                                Orders Received                         Net Sales                      Operating Income
                                  Segment              2009          2012         2014       2009         2012       2014       2009         2012         2014
                                                       Actual       Target        Target     Actual      Target      Target     Actual       Target       Target
                             Power Systems                982.2       1,680.0      1,920.0    1,066.1      1,350.0    1,700.0       82.6         95.0        125.0
         Grorth Business




                                 Machinery &
                                Steel Structures          404.3        640.0         810.0      625.7       600.0       730.0          3.0       32.0           40.0

                                Aerospace                 435.5        510.0         590.0      500.2       500.0       650.0     △ 6.4             0.0         17.0

                                    Total               1,822.0       2,830.0      3,320.0    2,192.0      2,450.0    3,080.0       79.2        127.0        182.0
                               Shipbuilding &
                             Ocean Development            150.8        230.0         230.0      230.6       220.0       210.0       14.5            5.0          7.0
         Reform Business




                                GM & SV                   291.0        450.0         520.0      286.8       450.0       520.0    △ 23.2          13.0           35.0

                                  Air-Con                 138.4        200.0         240.0      137.4       200.0       240.0     △ 9.9             4.0         11.0
                            Machine T ool・Others          113.4        150.0         160.0      146.8       130.0       140.0          5.1       11.0           15.0

                                    Total                 693.6       1,030.0      1,150.0      801.6      1,000.0    1,110.0    △ 13.5          33.0           68.0
                                  Inter-group
                           consolidation adjustments    △ 39.7       △ 60.0        △ 70.0     △ 53.2      △ 50.0      △ 90.0           0.0          0.0          0.0
                                    T otal              2,476.2       3,800.0      4,400.0    2,940.8      3,400.0    4,100.0       65.6        160.0        250.0

Note: From FY2010 onward, segment classification has changed with the application of the Financial Accounting Standard for Segment
Information Disclosure and the organizational restructuring of MHI.FY2009 results shown in the above table have been reclassified based
on the new segment classification.



                                                                                                                                                                       10
 5. Resource Planning
            Human Resources                                      Capital expenditure                                          R&D Expenses
    Expand the workforce in growth                            Continue investment mainly                             Actively invest in growth
    business                                                  in growth business                                     businesses
    Carefully select new employees
    in Japan                                                  Replace products with those                            Continue investment to
                                                              manufactured in-house, with                            enhance the competitiveness
    Increase the overseas workforce
                                                              improved efficiency (AC &                              of core products (technical
New recruitment in Japan                                      refrigeration, etc.) to meet                           innovation) and
            3,500                                             high community demands and                             manufacturing capabilities
                                      2,000
                                                              reduce CO2 emissions.                                  (market, process and
      Average for
                                                                                                                     product innovation)
     2008 to 2009                  Average for                                                                                                    (Billion yen / year)
  [2008 business plan]            2010 to 2014                                               (Billion yen / year)
                               [2010 business plan]                           186.5            180                                                     120
                                                                 169
Changes in the number of                       (Persons)                                                                             115.4                         Reform
employees (consolidated)                                                                                                                                20
                                                                               61.8                      Reform       104.9                                        Business
                                                                                               50
Overseas group companies              15,000                                                             Business                     19.5
                      10,973                                     65
                                                                                                                       28.5
    8,452
                                      72,000
                     67,669
   64,103
                                       8,500      Other                                                                                                        Growth
                      9,041                                                                                                                            100     Business
    9,054                                                                                                Growth                       95.9
                                      19,000     Reform                       124.7            130
                                                                                                         Business
                     19,461                      Business        104                                                   76.4
   18,857



                                      44,500
                                                 Growth
   36,192            39,167                      Business
                                                            Average for    Average for    Average for               Average for    Average for      Average for
                                                            2005 to 2007   2008 to 2009   2010 to 2014              2005 to 2007   2008 to 2009     2010 to 2014

  Mar. 2008         Mar. 2010        Mar. 2015

                                                                                                                                                                        11
   6. Strategies in 2010 Business Plan
                                 Exercise truly comprehensive strengths
                    Strategies
                        1          Transform business models from customer perspectives
                             1    Strengthen the core businesses
                             2    Expand the solution business
                             3    Expand business areas
                             4    Expand businesses in a new market (emerging nations)

                    Strategies
                        2           Transform business processes for a strengthened structure
                             1    Commoditize/standardize and sophisticate the business processes
                             2    Globally optimize the business process allocation
                                           -Departure from vertical integration-


Establish a system that enables us to exercise our comprehensive strengths
                                                                                          Strategies
   Strategies                                                                                 5
       3
                 Establish a flexible and agile management system
                      - Clarify the structure and responsibility-
                           -Enhance horizontal functions-
                                                                                             Enhance human resources

    Strategies                                                                               Enhance the intellectual
        4
                        Introduce management indicators
                                                                                             property (IP) strategies
                      for increased corporate value
                                                                                                                        12
      6. Strategies in 2010 Business Plan
                            Exercise of the Total Strengths and Departure from Vertical Integration

Business Growth Potential
                                              Spin-in
                                              (Merge businesses)
   Active separation &
   merger of businesses                                                                      be
                                      Joint ventures with                              w ill
                                                                                   t
                                      other companies
                                                                               a si
                                  Spin-off
                                                                     M HI
                                  (Establish as
                                  operating company)

                Curve-out
                 Curve-out
                                                                               Exercise truly
                                                                              comprehensive
                                                                                 strengths
   Passive separation of              Business Transfer / Divestiture
        businesses                                                                                      ration)
                                                                                       w (Vertical Integ
                                                                        MHI as it is no
                                                                                                  Low Growth &
                                                                                                  Opportunity Loss                    Time
* Carve-out: Take technologies and products that are currently buried within MHI and turn them into businesses through third-party investment
and participation in management decisions.                                                                                                    13
Strategy 1: Transform Business Models from the Customer Perspectives
 <Business Value Chain>

              Component                                    Product                                EPC                      Service                           Operation

       (                                                          Expand solution businesses
(Rate of profit)                     Expand solutions businesses in the Energy & Environmental Business
                                                    IGCC, Fuel Cell Combined Power Generation



                                                                                             Enhance the EPC structure Expand the
      Expand into upstream                        Enhance core businesses
         business areas                                                                                           downstream businesses
                                                  High-efficiency gas turbine                                      Implementing after-sales service of competitors’ parts (GT)
                                                  MRJ (complete aircraft)                                          Nuclear fuel business (Overseas)
      Environmentally friendly engine
                                                  Hybrid fork                                                      Digital control system (Power Systems)
      Compressors in the gas area
                                                  FLNG                                                             Enhancing structure for after-sales service business
      Lithium ion batteries
                                                  CRUISE Ship                                                      (strengthening human resource, expanding overseas offices,
      Organic EL
                                                                                                                   enhancing IT system)
      B787/composite-material wing boxes



                                                                                         Nuclear power plants (overseas)
                                                                                         High-speed railway(overseas)                      Establishing an investment firm in
                                                                                                                                           Europe/IPP business using Wind
                                                                                                                                           Power in Bulgaria
           - Engine                                                                                                                        Transportation system/Embarkation
                                                                                                                                           on operation business
           - Compressors             - Forklifts                   - GTCC, conventional power plant
           - Turbochargers           - Ships                       - Nuclear power plants (Japan)
           - Auto Motive thermal systems                           - Transportation Systems      ・Nuclear after-sales service
           - Atomic devices
                                                                   - Chemical Plants             ・Power system after-sales service
           - Aircraft/metallic components

                    EL:Electro-Luminescence、GT:Gas turbines、FLNG:Floating LNG、IGCC:integrated gasification combined cycle                              (Business Scale)
                                                                                                                                                                           14
Strategy 1-(1): Continue Strengthening
                the Core Businesses
 Promote technical innovation in priority products that will drive MHI’s future

        Energy & Environment                         Transport & Social Infrastructure
    (GTCC, wind turbines, nuclear energy,                  (Transportation systems,
          environment products)                           chemical plants, aerospace)




    Development of key technology
    Development of prototype-less technology
    Development of advanced platform technology commonly used for
    multiple products
    Development of innovative manufacturing technologies that can
    counter low-cost overseas manufacturers
    Design of product-enhancing technology (MCMD, DFX)
    Use of Open Innovation

       MCMD: mass customization, DFX: Design For X

                                                                                         15
      Strategy 1-(1): Continue Strengthening
                      the Core Businesses
                                                  Kansai Electric Power Co.                                Contribute to the prevention of global warming with highly efficient gas
   J-series GTCC                                  Himeji Power Station # 2
                                                  Adopted M501J x 6
                                                                                                           turbines.

                                                                                                           Reduce CO2 emissions by 50% from that of MHI’s conventional coal-
                                                     First commercial operation is set for                 fired power.
                                                     October 2013 (plan)
                                                                                                        Achieve more than 60% efficiency (the highest level
                                                                                                       in the world).




                                                        Rendering image of
                                                      Himeji Power Station #2
                                                                                                                                             J-series




                                                                                                           efficiency
      <Gas Turbine J-series Elemental Technology Development>
                                                                                                                                 G-series
Main combustion                                                                                      60%
Pilot combustion combustion            cooling        aero dynamics                 material                              F-series
                                                                                        Unidirectional-
                                                                                           coagulation
                                                                      temperature
advanced                                                                                alloys precision
                                                                         High



 analysis                                                                                casting blade
                                                                                           coagulation
                    Fluid velocity                                                          analysis
                           High
                                                                                                     55%
                   Low

                                                                                                                                      D-series

  Factor
inspection
                                                                                                                        1200   1300      1400        1500       1600        1700
             High temperature
             combustion test                          Model compressor                                                           Temperature at turbine inlet (ºC)
                                  Stationary & rotating                             Creep test
                                turbine blade inspection                                                                                                                         16
Strategy 1-(1): Continue Strengthening the Core Businesses
                – Prototype-Less Technology
    Case 1: H-IIB Rocket

       Fluid-structural analysis using
          ultrafast mesh generator




                                                       57 m
                            (C) JAXA
                                       9.2 m
                                               4.4 m
 September 11, 2009
 Successfully launched the H-IIB rocket equipped
 with HTV (H-II Transfer Vehicle)
                                                              17
Strategy 1-(1): Continue Strengthening the Core Businesses
                – Prototype-Less Technology
 Case 2: Forklift Truck Development

   Transmission gear-shifting shock

                                       Shock transmitted to vehicle body
    Source of gear-shifting shock      during acceleration (vibration value)




                                                                               18
              Strategy 1-(2): Manifestations of Comprehensive Capability
              -Energy and Environment Business

                        Nuclear                                Alternative       Natural
                         fuels       Renewable energy             fuels           gas      Coal・Oil        Environmental
                                                                                                             measures
Fuel




                                                                      Coal to                                 DeNOx
                        Fuel cycle                                 liquid/gas to
                                                                       liquid
Energy transformation




                                                                                                              DeSOx
                        Nuclear                      Biomass                   Gas
                        reactors                                             turbines         IGCC
                                    Wind                                                                        CO2
                                  turbines                                                                    recovery
                                                  Geo
                                                thermal            Fuel cell

                                  Lithium-ion                                      Conventional
                                     battery
                                                                                                               CO2
                                                                                                             storage

                                        Electricity                                                        Environmental
                                                                                                              Product
Usage




                        Centrifugal                       Eco-house
                         chillers                                              Enhanced Oil
                                                                                Recovery
                             Hybrid forklift   HEV/EV for          Automobiles                Fertilizer    Desalination
                                                                                                plant
                                trucks       industrial use
                                                                                                                       19
Strategy 1-(2): Expand the Solution Business
                – Energy & Environment Business
       Becoming a leading company in the energy & environment sector

  Commercialize highly efficient and environmentally friendly products,
  Expand the solution business, which combines products and advanced technology in
  broad areas.
    – Make recommendations to governments and industries to expand opportunities and
      create new business.
  Expand strategic alliances with overseas partners.

              Energy Demand Forecast                                                   Change in Orders Received
                                                          (Mtoe)                                                                  (Billion yen)
              1.5 times                 16,790
                                                                                               : Energy & Environment Business
                                     Middle East                   5,000
                                        Africa
                                                                                               : Other Businesses                   4,460.0
                                    Latin America
     12,013                           Other Asia                   4,000
                                         India                             3,268.7
                                                                                                   Nearly doubled
                                                                   3,000
                    Emerging             China                                       2,476.2
                    countries
                                      East Europe                  2,000
                                     Other developed
                                        countries
                                                       Japan

                   Developed            Europe                     1,000
                   countries         United States
                                                                      0
     2007                                2030
                                                                            2008      2009     2010      2011     2012     2013       2014

                     Mtoe: million tons of oil equivalent                                                                                     20
                         Strategy 1-(2): Expand the Solution Business
                         – Synergies
                               High-end Products

                                                                 4
                                                                                                                                       IGCC plant
                                                        5                  8




                                             10%
                                                            19
                                                                                                                                            +
                                                   17
                                                                               9
                                                                                                                                CO2 recovery/storage facility
                                                                      18




                                                                                                                                   Energy-self-sufficient
                                                                                                                                    smart community

                        Energy and Environment
                         Nucle           Renewable                                    Natu        Coal・
                          ar                                           Altern          ral                    Environmental
                                                                                                                measures
Fuel




                         fuels            energy                                       ga          Oil
                          Fuel
                          cycle
                                                                        ative
                                                                        fu Coal to
                                                                           liquid/gas
                                                                            to liquid
                                                                                                                   DeN
                                                                                                                   Ox               Lithium-ion battery
Energy transformation




                         Nucle                        Biom                                                        DeS
                           ar                          ass                           Gas                           Ox
                         reacto Win                                                turbines       IGCC            CO2
                           rs     d                                                                               reco
                                turbi          Geo
                                               ther                            Fuel                               very
                                 nes
                                               mal                             cell
                                                                                           Conventio
                                  Lithium-                                                    nal
                                     ion                                                                           CO2
                                   battery                                                                        stora
                                                                                                                    ge
                                        Electricity                                                           Environmental
                                                                                                                 Product
                                                                                                                              SOFC combined-cycle power plant
Usage




                        Centrifug                                    Eco-
                        al chillers                                  house            Enhanced Oil
                                                                                        Recovery                Desalinat
                                                HEV/EV for                                       Fertilizer
                                  Hybrid                                       Automo              plant          ion
                                  forklift     industrial use                   biles
                                   trucks




                                                                                                                                      SOFC:Solid Oxide Fuel Cell   21
 Strategy 1-(2): Expand the Solution Business
                 – Synergies
        A solid-oxide fuel cell (SOFC) combined-cycle power generation system
                                  for large business use
                 A triple combined system that combines conventional GTCC
                               and solid-oxide fuel cell (SOFC)
                           - For More Efficient Thermal Power Generation -
               Inverter
330MW                                           Steam turbine       170MW
Natural gas
              Fuel Cells
               (SOFC)                                                                                                   (LHV %)      (3) GTCC + SOFC
                                                                    Condenser                                            75              (Natural gas)

                                                                                                                         70
                          Gas turbine   1500ºC                                                                                                                        IGCC + SOFC




                                                                                 Efficiency (at power generation end)
                                                                                                                                  Ultrahigh-temperature
                                                                                                                         65       gas turbine (1,700ºC)
              340MW
                             Air                                       Exhaust                                           60      GTCC
                                                                         gas                                                  (Natural gas)
                450ºC                   630ºC
                                              Heat recovery steam
                                               generator (HRSG)                                                          55
                           Heat Balance (Example)                                                                                                IGCC
                 Gross output: 840MW                                                                                     50
        Efficiency (transmission end): 70%-LHV                                                                                      USC (Coal)
                                    [Current GTCC: 60%-LHV]                                                              45
      SOFC: Solid Oxide Fuel Cell
      IGCC: Integrated coal Gasification Combined Cycle
      GTCC: Gas Turbine Combined Cycle                                                                                   40
      USC: Ultra Super Critical pressure Coal-fired plant       LHV:
      Lower Heating Value
                                                                                                                          1990     1995   2000   2005   2010   2015    2020         22
  Strategy 1-4 Global Business Operation
                                                   Overseas group company
          Overseas sales                           Overseas office, representative

                      4400bil.yen


     3200bil.yen

  Japan
              180%
                        63%
Overseas 49%

                                                                            i
                                                                         Latn
       2007-2009         2014                                                ca
                                                                       A m eri
         平均
                                                                   dle 6%
                                                                Mi l                        a
                                                                                         A si
 Overseas procurement           Overseas Manufacturing           E ast                   24%
                                                                  7%
                                                                         O verseas sal es
                                                              E urope
                                                                            by regi on
                                                                15%
            180%                     200%                                    F Y 2014


                                                                                N orth
                                                                              A m erica
                                                                                43%
          2007-2009     2014        2007-2009   2014
           Average                   Average                                                    23
    Strategy 1-(4), 2-(2): Enhance Businesses
                           in Emerging Nations
          Cultivate markets through joint ventures with leading companies                                    Orders received for              (Billion yen)
          in emerging nations                                                                                 emerging nations
             – Acquire licensing fees
             – Supply core components from Japan
             – Limit investments
                                                                                                                        140%
          Develop value chain business on a global basis (optimize the
          process allocation)
             – Expand the active procurement of low-cost products & components
                                                                                                                                               1,100
                                                                                                           760
        China
Alliances with leading companies in China
 - Power Systems: Dongfang Group, Hangzhou Steam
                                                                                                        2007-2009                             2014
   Turbine                                                                                                Average
 - Nuclear Energy: Harbin Group
 - Machinery & Steel Structures: Baoshan Iron & Steel
 - Air-Con: Haier Group



         India
JVs with leading companies in India
 - Power Systems: L&T (Boiler & Steam turbines)
Manufacturing site
 - Machinery & Steel Structures:
   Metals machinery, transfer systems, rubber tire
   machinery, compressors                                                                                    Brazil
                                                      Thailand
                                                                                                         - Boiler Business - CBC
                                                Low-cost manufacturing                                   - Bullet trains in Brazil – Japanese consortium
                                                 - Turbochargers: move into the market with suppliers
                                                 - Air-conditioner: cell manufacturing system
                                                                                                                                                           24
 Strategy 2-(2): Reform in the Manufacturing
 Industry Value Chain
  Production Systems                           Technical Division
    Innovation Dept.

Marketing support
     system                  Marketing           Open innovation


               After-sales
                 service                       R&D
  Service                Modular design
support sys.                project
                                                       Prototype-less
                                                          development
                   Manufacturing       Procurement




    Manufacturing
    worksite reform                Supply chain management reform
                                                                        25
   Strategy 2-(2): Value Chain Reform
 Efficient allocation of management resources, departure from vertical integration and use of external resources

          As Is        MHI                                               — MHI-Driven Business Development —

                               Sales                  Development/                  Procurement                  Manufacture                   Service                Operation
                                                        Design
To Be                            Investment
                          (equity method affiliate)        Enter markets in emerging nations through investment and technology licensing (power systems partnership with L&T in India)

                                            Sales              Development/Design             Procurement               Manufacture             Service                Operation

                                                                           MHI Group
                     Establish as business company         Streamline the organization and clarify the responsibility of management (Machinery & Steel Structures/Metals Machinery,
                           (existing business)             Environmental Equipment, Compressors, etc.)
                                         Sales               Development/Design              Procurement               Manufacture              Service               Operation
                     Establish as business company         Support the capital and sales force from other companies (Aerospace/MRJ),
                             (new business)                Receive support in mass production technology (Organic EL)
                                         Sales               Development/Design             Procurement                Manufacture             Service                Operation
                                         Sales               Development/Design             Procurement                Manufacture             Service                Operation

        People    Facilities         Fund         Technology                      MHI
                  Sales                 Development/Design                   Procurement                  Manufacture                   Service                  Operation
                                                                                                           Expanded manufacturing            Expanded service          Expanded
                                                                           Expanded                        bases overseas                    operating bases           business areas
                                                      Joint research &     overseas
                                                      development          procurement
                                                                                           - China/Fork Dalian factory                  - Belgium/GTCC
                                         - Restructuring of                                - Thailand/AC & refrigeration MACO             Maintenance
                                           domestic group                                  - US/Wind turbines plant in Arkansas           Partners (buyout)
                                           companies


 Partnership      - France/Medium-sized reactor development                                        - Thailand/GTCC with                      - Bulgaria/wind power generation business
                    with Areva
 with other       - US/Advanced aircraft engine development                                          Electricity Generating Authority          with Caliagra
 companies          with P&W                                                                         of Thailand [EGAT] (JV)                 - Oman/Fertilizer plant business

- Collaboration with domestic
                                        - Open innovation/use of external                - Use of local suppliers by
  customers in overseas projects
                                          research institutions & universities             overseas joint ventures
  (nuclear power & transportation)
                                                                                                                                                                                         26
  Strategy 3: Establish a system that allows us
              to exercise comprehensive strengths
                               Establish a flexible and agile management system

               Clarify the structure and responsibility                                   Air-Conditioning & l Division
               (Business headquarters system, micromanagement)                    General Machinery Systems
                                                                                           Vehicle rters
                                                                              Aerospace     rters
                                                                Machinery &       uarters




                                                                                                                                           Business
                                                                     Structures
                                                  Nuclear Energy dquarters




                                                                                                                            Business
                                       Power Systems     eadquarters




                                                                                                             Business
                           Shipbuilding &    uarters




                                                                                               Busine
                         Ocean Development
                            Headquarters




                                                                                    Bus
Focus more
                       Enhance functions to promote global business
   on the                                                  es
                                                                                          t.
                                                 si
                        si



                                    si




 customer                                                                                                                              Dept.
perspectives
                       Enhance functions to promote solution businesses
                                                      t.                                                                e
                                                                            a             ce Dept
                                                                                                                                       t
                        Enhance corporate strategy functions/Integrate business support functions
                                Design Dept.                            ool Dept.
                                                                                           M            t.
                                          a           ce Dept
Enhance the
 horizontal             Enhance and expand functions to transform business processes
 functions
                                                                Dept.
                             Machine Tool Dept
                        Enhance and expand quality management functions (safety/ high quality)
                                                                                                                                                      27
     Strategy 3: Establish a system that allows us
                 to exercise comprehensive strengths
<Micromanagement of Machinery & Steel Structures Headquarters>
                                                                                                                                                                                   [Operating income]            136
                                                                                                                                                                                                                                                     (Billion yen)
                                                                                                                                                                                                   Entire
              Machinery                        Steel Structures
                                                                                                   Machinery &                                                                                     company                                    65.6
             Headquarters                       Headquarters                                      Steel Structures                                                                   Machinery &                                 30.1
                                                                                                   Headquarters                                                                      Steel Structures 11.3

                                                                                                                                                                                                          2007                       2009




                                                                                                    Division A




                                                                                                                                                        Division C
                                                                                                                              Division B
                                                                                                                                                                                  (Operating Margin) (2.4%)   (4.2%)            (5.7%)   (2.2%)
    Business A




                                             Business A
                   Business B




                                                          Business B
                                Business C




                                                                       Business C

                                                                                                                                                                                  [Machinery & Steel]                     5.8           5.7
                                                                                                                                                                                  Selection and Focus
                                                                                                                                                                                                                                Operating Margin         (%)
                                                                                                                                                                                                              2.4
                                                                                                  Business b




                                                                                                                                                        Business b
                                                                                     Business a




                                                                                                                                           Business a



                                                                                                                                                                     Business c
                                                                                                                 Business c
                                                                                     Establish them as                                                                                 0.4        0.6
                                                                                    operating companies
                                                                                                                                                                                    2005 2006 2007 2008 2009
                                                                                                                                                                                      Vertical parking garage operations/separated (10/2005)
                                                                                                                                                                                                 Human waste & sludge disposal operations/transferred (01/2006)
                 Develop organizations that are capable of competing                                                                                                                             Bridge operations/transferred (04/2006)
                 head to head with dedicated manufacturers                                                                                                                                       Concrete pumps operations/transferred (10/2006)
                                                                                                                                                                                                              Underground construction equipment, chimney,
                    – Expedite decision-making                                                                                                                                                                EP operations/transferred (04/2007)
                 Develop highly agile organizations                                                                                                                                                           Public pumps, Turbo-molecular pumps (TMP)
                                                                                                                                                                                                              operations/transferred (2007)
                 Increase customers’ confidence with top sales forces                                                                                                                                                       Waste disposal operations/transferred
                                                                                                                                                                                                                            (04/2008)
                 who are expert in respective businesses                                                                                                                                                                              Laundry machines/
                                                                                                                                                                                                                                      transferred (10/2009)




                    Overhaul the micromanagement of the Machinery & Steel Structures Headquarters
                    Horizontally transfer best practices to other businesses
                                                                                                                                                                                                                                                                     28
Strategy 4: Introduce the management indicators
            for increased corporate value

                     Pursue Investment Efficiency

   Introduce ROE as a business management indicator and set
   target values

          FY2009              FY2012                FY2014

           1.2%                  6%                  8%


   Introduce ROIC as a business-specific or product-specific
   management indicator to achieve the target values of the
   company-wide ROE


                                                               29
Strategy 4:
Introduce Management Indicators for Increased Corporate Value

                               For sustainable growth


                             Pursuit of investment efficiency:
                                  FY2014 ROE 8%




Appropriate returns to shareholders
                                                     Reinforcement of the financial strength
And effective use of shareholders’ equity:
                                                          D/E ratio 0.8% by FY2014
Dividend ¥10/year by FY2014



                                                                                           30
Strategy 5: Enhance Human Resources /
Enhance the Intellectual Property (IP) Strategies

         Enhancing Human Resources for Globalization and Process Innovation

    Training global managers of MHI Group
    Introducing job rotation-based career path
    Educating employees for global business
    Implementing educational program for affiliate companies




             Enhance IP strategies in terms of both “defense” and “offense”
         - Protect the business with patents and survive the global competition -

   Proactively apply primarily to products with higher IP risks in a planned manner
      – Set up a new IP enhancement team for each area of technology
      – Promote application campaigns across the company
      – Enhance company wide education for IP
   Securing loyalty by licensing




                                                                                      31
7. Promoting CSR Activities
                As a manufacturing company, engage in CSR activities
                       through global manufacturing activities
     Promote CSR activities through manufacturing
   Provide superior technologies & products to contribute to
   the “Future of people and earth”
     – Contribute to the global-scale problems (global warming, depletion of
       energy resources, shortage of water resources) by providing the
       technologies and products of a wide array of MHI Group companies                      Make a global contribution with
                                                                                             our technologies and products
   Minimizing the environmental burden from production
   activities
   Appropriately distribute the generated profits to
   stakeholders
 Reforming the corporate culture through CSR activities
   Promote the CSR awareness
     – Promote and deepen awareness through activities based on the CSR action guidelines.
   Producing Open Minded Atmosphere for Free Discussion and Continuous
   Improvement
    -“President Town Meeting” : President visits offices and factories.
   -“Forum 35” : Selected Employees in their mid-30ies gather, discuss and propose ideas
       to improve corporate culture openly.
   -“Nursery School” : Nagasaki Shipyard and Machinery Works open a nursery school for
     children of the employees.

                                                                                                                               32
Supplementary Information
•Targets by Segment (Orders, Net sales,
   Operating income)
・Expand the Solution Business




                                          34
      1. Orders Targets by Segment (Consolidated)
             (In billion yen)

                                                                                                               4,400.0
                                                                                                                           Shipbuilding
                                                                                                                230.0      & Ocean
                                                                                                                           Development
                                                                          3,800.0
                                                                           230.0
                                                                                                                           Power Systems
                                     3,100.0                                                                   1,920.0
                                      190.0
                   2,476.2                                                1,680.0
                    150 8            1,230.0
                                                                                                                           Machinery &
                                                                                                                           Steel Structures
                    982.2                                                                                       810.0
                                                                           640.0
                                      570.0
                                                                                                                           Aerospace
                    404.3                                                                                       590.0
                                                                           510.0
                    435.5             600.0
                                                                           450.0                                520.0      GM & SV

                    291.0             300.0                                                                                Air-Con
                    138 4             140 0                                200.0                                240.0
                    113.4             120.0                                150 0                                160 0      Machine Tool
                                                                                                                           ・Other
                   2009               2010                                2012        [2010Medium-Term         2014
                    [Actual]         [Forcast]
                                                                                         Business Plan]
Note: From FY2010 onward, segment classification has changed with the application of the Financial Accounting Standard for Segment
Information Disclosure and the organizational restructuring of MHI.FY2009 results shown in the above table have been reclassified based
on the new segment classification.                                                                                                            35
     2. Sales and Income Targets by Segment (Consolidated)
                     Net Sales              (In billion yen)                                      Operating income                 (In billion yen)

                                                                                                                            6.0%
                                                                                                        4.7%

                                                                             2.2%      2.6%

                                                                                                                        250.0
                                               4,100.0                                                                                Shipbuilding
                                                                                                                            7.0       & Ocean
                                                          Shipbuilding
                                                                                                                                      Development
                                                 210 0    & Ocean
                                                          Development

                          3,400 0
                                                                                                                                      Power Systems
                                                                                                                        125.0
                           220 0                                                                        160.0
 2,940 8   2,850 0                              1,700 0   Power Systems
                                                                                                         5.0
 230 6
           270 0
                          1,350 0                                              65.6     75.0
                                                                                                        95.0                          Machinery &
 1,066 1                                                  Machinery &
                                                                               14.5      80                                 40.0      Steel Structures
           1,050 0                                        Steel Structures
                                                 730 0                                                                      17.0      Aerospace
                                                                                        70.0
                           600 0                                               82.6
                                                                                                        32.0                35.0      GM & SV
 625 7     550 0                                          Aerospace
                                                 650 0                                                       0.0
                                                                                                        13.0                11.0      Air-Con
                           500 0                                                       18.0                  4.0
                                                                               5.1 3.0 6.0 △ 6.0        11.0                15.0
 500 2     460 0                                                              △ 9.9                                                   Machine Tool
                                                 520 0    GM & SV                     △ 11.0                                          ・Other
                           450 0                                              △ 23.2 △ 10.0
 286 8     310 0                                                              △64
                                                          Air-Con
 137 4     140 0           200 0                 240 0
                                                          Machine Tool
 146 8     120 0           130 0                 140 0
                                                          ・Other
 2009      2010            2012                 2014                          2009     2010             2012            2014
                                [2010Medium-Term                                                        [2010Medium-Term
[Actual] [Forcast]                                                           [Actual] [Forcast]            Business Plan]
                                   Business Plan]
                                                                                                                                                     36
                            3. Optimization of Technical Synergy (1)
                                                                                                                                                               Machinery &
                                                                                                                               Power Systems                 Steel Structures
                              High-end Products                                                                               [Coal gasification]         [CO2 recovery・storage]

                                                                                                                                                    Integration
                                                                    4

                                                           5                 8



                                                               19
                                                                                                                                 IGCC plant
                                             10%

                                                                                 9
                                                                                                                                 +
                                                      17



                                                                        18
                                                                                                                                 CO2
                                                                                                                                 recovery/storage facility Order received from ZeroGen,
                                                                                                                                                                    Australia    (June, 2009)

                                                                                                                                          Coal                    250MW



                                                                                                                                      Thermal power
                        Energy and Environment                                                                                            plant
                                                                                                                                       Gasification
                                                                                       Natu
                         Nucle
                          ar
                                         Renewable
                                                                        Altern          ral
                                                                                                  Coal・       Environmental
                                                                                                                measures
                                                                                                                                    Power generation       Integrated coal Gasification
Fuel




                         fuels            energy                         ative          ga         Oil
                                                                         f Coal to                                 DeN
                          Fuel
                          cycle                                             liquid/gas                             Ox                                     Combined Cycle Power Plant
                                                                             to liquid
Energy transformation




                         Nucle                        Biom                                                        DeS
                           ar                          ass                             Gas                         Ox
                         reacto Win                                                  turbines     IGCC            CO2
                           rs     d                                                                               reco
                                              Geo
                                turbi
                                 nes          ther                           Fuel
                                                                             cell
                                                                                                                  very                     CO2
                                              mal
                                  Lithium-
                                                                                            Conventio
                                                                                               nal
                                                                                                                   CO2
                                                                                                                                        separation /
                                     ion
                                   battery                                                                        stora
                                                                                                                    ge                   recovery
                                        Electricity                                                           Environmental
                                                                                                                 Product
Usage




                        Centrifug                                   Eco-
                        al chillers                                 house             Enhanced Oil
                                                                                        Recovery                Desalinat
                                               HEV/EV for                                        Fertilizer
                                  Hybrid
                                  forklift    industrial use
                                                                             Automo
                                                                              biles
                                                                                                   plant          ion
                                                                                                                                      CO2 Storage
                                   trucks

                                                                                                                                      (Ocean and deep       CO2 recovery plant
                                                                                                                                      underground)
                                                                                                                                                                                                37
                         2. Optimization of Technical Synergy (2)
                           High-end Products                                                                                          Energy-self-sufficient smart
                                                                                                                                             community
                                                                 4

                                                        5                  8




                                             10%
                                                            19


                                                                               9                                              Offshore wind turbines        Wind turbine
                                                   17



                                                                      18                                                                         Power storage


                                                                                                                                 Heat pump                        PV Cells
                                                                                                                                              Smart control center
Energy and Environment
                         Nucle
                          ar
                                         Renewable
                                                                       Altern
                                                                                      Natu
                                                                                       ral
                                                                                                  Coal・       Environmental
                                                                                                                measures
                                                                                                                                                          Next gen. LRT
Fuel




                         fuels            energy                        ative          ga          Oil
                                                                        fu Coal to                                 DeN
                          Fuel                                             liquid/gas                              Ox
                          cycle
                                                                            to liquid
Energy transformation




                         Nucle                        Biom                                                        DeS
                           ar                          ass                           Gas                           Ox
                         reacto Win                                                turbines       IGCC            CO2
                           rs     d                                                                               reco
                                turbi          Geo
                                               ther                            Fuel                               very
                                 nes

                                  Lithium-
                                               mal                             cell
                                                                                           Conventio
                                                                                              nal                                         EV related business
                                     ion                                                                           CO2
                                                                                                                  stora                                       Hydroelectric
                                                                                                                                           (Battery station)
                                   battery
                                        Electricity
                                                                                                                    ge
                                                                                                              Environmental
                                                                                                                 Product
                                                                                                                                            Ba tery s ati n
Usage




                        Centrifug                                    Eco-
                        al chillers                                  house            Enhanced Oil
                                                                                        Recovery                Desalinat
                                                HEV/EV for                                       Fertilizer
                                  Hybrid                                       Automo              plant          ion
                                  forklift     industrial use                   biles
                                   trucks




                                                                                                                                     Eco-house
                                                                                                                                     Eco h use
                                                                                                                                                                             38
                         2. Optimization of Technical Synergy (3)

                              High-end Products                                                                                    Power systems
                                                                                                                                   Power systems                 General machinery
                                                                                                                                                                 General machinery
                              High-end Products
                                                                                                                                     [Battery]
                                                                                                                                     [Battery]                   [Mass production]
                                                                                                                                                                 [Mass production]

                                                                     4
                                                                                                                                                        Integration
                                                                                                                                                        Integration
                                                            5                  8




                                               10%
                                                                19


                                                                                   9
                                                                                                                                                   Lithium-ion battery
                                                       17



                                                                         18




                        Energy and Environment
                        Energy and Environment
                                                                                                                                    Paper & printing
                                                                                                                                    Paper & printing             Industrial machinery
                                                                                                                                                                 Industrial machinery
                                                                                                                                [Slurry processing & painting]
                                                                                           Natu
                         Nucle
                          ar
                                         Renewable
                                                                     Altern                 ral
                                                                                                    Coal・       Environmental
                                                                                                                  measures
                                                                                                                                [Slurry processing & painting]    [Automated assembly]
                                                                                                                                                                  [Automated assembly]
Fuel




                         fuels            energy                      ative                 gas      Oil
                                                                      fuelsCoal to                                   DeN
                          Fuel                                           liquid/gas                                  Ox
                          cycle
                                                                          to liquid
Energy transformation




                         Nucle                        Biom                                                          DeS
                           ar                          ass                               Gas                         Ox
                         reacto Win                                                                 IGCC
                           rs     d
                                turbi
                                 nes
                                              Geo
                                              ther                            Fuel
                                                                                       turbines                     CO2
                                                                                                                    reco
                                                                                                                    very
                                                                                                                                                                 Lithium-ion battery
                                              mal                             cell
                                                                                              Conventio
                                  Lithium-                                                       nal
                                     ion                                                                             CO2
                                   battery                                                                          stora
                                                                                                                      ge
                                        Electricity                                                             Environmental
                                                                                                                   Product
Usage




                        Centrifug                               Eco-
                        al chillers                             house                   Enhanced Oil
                                                                                          Recovery                Desalinat
                                               HEV/EV for                                          Fertilizer
                                  Hybrid                                  Automo                     plant          ion
                                  forklift    industrial use               biles
                                   trucks



                                                                                                                                Hybrid forklift trucks with diesel engine
                                                                                                                                                                                         39

								
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