Mitsubishi Hitachi Power Systems (MHPS) Group Poised to Strengthen Business in AQCS Products -- Operations in Domestic After-sale Servicing of Desulfurization Equipment and in Water Treatment Systems to be Consolidated --

Mitsubishi Heavy Industries, Ltd.
Mitsubishi Hitachi Power Systems, Ltd.

Yokohama, January 7, 2016 -- Mitsubishi Heavy Industries, Ltd. (MHI) and Mitsubishi Hitachi Power Systems, Ltd. (MHPS) have agreed to transfer operations in the domestic after-sale servicing of desulfurization equipment, currently performed by Mitsubishi Heavy Industries Environmental & Chemical Engineering Co., Ltd. (MHIEC), and operations in water treatment systems, now handled by Mitsubishi Heavy Industries Mechatronics Systems, Ltd. (MHI-MS), to Mitsubishi Hitachi Power Systems Environmental Solutions, Ltd. (MHPS-ES), an MHPS Group company, effective April 1. In preparation for the business transfers, MHPS-ES has concluded basic spin-off agreements with MHIEC and MHI-MS.

The impending business transfers to MHPS-ES are intended as a follow-up initiative to the MHPS Group's achievement of a full model lineup in air quality control systems (AQCS). The business reorganization scheme targets further enhancement of the AQCS value chain and expansion of after-sale servicing operations.

Specifically, MHPS-ES will take over the domestic after-sale servicing operations for desulfurization equipment presently performed by MHIEC, together with servicing of gas-gas heater (GGH) heat recovery systems and GGH reheaters. In addition, MHPS-ES will take over, as early as feasible, servicing operations for desulfurization equipment manufactured by the former Babcock-Hitachi K.K. (BHK). Together these transfers of operations will enable MHPS-ES to pursue even greater customer response capability.

Simultaneously, from MHI-MS MHPS-ES will take over business in water treatment systems. Among these systems, those used to treat wastewater from desulfurization equipment are an important component of thermal power plants. By taking over these operations, MHPS-ES will become capable of providing thermal power plants that, as a complement to their AQCS installations, are environmentally harmonious also in terms of wastewater treatment, and this is expected to add further to the comprehensive capabilities of the entire MHPS Group. In addition, by taking over MHI-MS's technologies and abundant experience, going forward MHPS-ES will expand into business involving water treatment systems for a full array of industries other than power plants.

MHPS-ES commenced operations in October 2015 as a company dedicated exclusively to business in precipitators. The company is a wholly owned subsidiary of MHPS launched integrating the former precipitator businesses of MHI-MS and Hitachi Plant Construction, Ltd. (HPC). MHPS-ES is an integral component of the diversified AQCS business undertaken by the MHPS Group following achievement of a full lineup of AQCS products.

MHIEC and MHI-MS are both wholly owned subsidiaries of MHI. MHIEC is a comprehensive provider of engineering services for all types of plants, especially environmental and chemical plants. MHI-MS performs design, manufacturing, installation and after-sale servicing of a wide range of products including intelligent transport systems (ITS), mechanical and hydraulic systems, mechatronics systems, mechanical parking systems and steel structure plants.

Going forward, MHPS and MHPS-ES will continue to work closely in pursuing further business expansion in AQCS products.

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