Tokyo-based Mitsubishi Heavy Industries Ltd (MHI) has announced plans to establish a new firm Mitsubishi Power Systems India Private Ltd (MPS India) that will serve as a regional arm overseeing the company's power systems business.
MPS India will be Mitsubishi Heavy Industries' fourth regional headquarter, after the US, Europe and Southeast Asia. The move, the company said, is aimed at strengthening MHI's marketing activities “to accommodate India's rapidly growing power demand.”
The objectives also include getting a bigger foothold in the Indian market for gas turbine combined cycle plants at a time when there are indications of higher natural gas supplies on account of gas field development in the Bay of Bengal and the expansion of LNG terminals, MHI said in a statement issued on Monday.
MHI already has in place two joint venture companies with Larsen & Toubro Ltd for taking care of the expanding demand for coal-fired power plants in the country. MPS India will aim to “further nurture India's power generation market by leveraging the knowhow acquired through the joint ventures with L&T,” the statement said. The new company will also support management of the two ventures, it added.
MPS India will initially be capitalised at around $1 million, which could go up to around $10 million by the year 2013, when the company expects to have full-scale EPC (engineering, procurement and construction) capabilities here, it said. MPS India will be established effective November 1 and operations at the new regional base are also slated to get under way on the same date. “With its establishment, MHI aims to further enhance its response to the needs of India's rapidly growing power generation market and to expand orders from India for its power systems products, including gas turbine combined cycle power generation plant and its component,” it said.
MPS India is being created through separation of the power systems business unit of MHI's existing subsidiary, Mitsubishi Heavy Industries India Private Ltd. MPS India will formulate regional business strategies and oversee business involving the entire spectrum of power systems and related products, centered on gas turbine combined cycle, from marketing, construction and installation to provision of after-sale services. Mr Masayuki Kubo, former General Manager of the Power Systems Business Development and Strategy Planning Department at MHI, will serve as company president. “After establishment of its newest base, going forward MHI will further strengthen its marketing activities to accommodate India's rapidly growing power demand.”
The move to spin off a new firm comes at a time when MHI has reported a sharp surge in its net profit for the six months through September, boosted in part by improved profits from its power systems business. The Japanese heavy machinery and infrastructure firm announced on Monday its net profit for the first six months of the current fiscal rose to ¥39.89 billion (around $528 million) from ¥17.37 billion (around $224 million) for the same period in the previous year.