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MHI Commences Production of GT Components in China

Posted on September 13, 2005

Mitsubishi Heavy Industries, Ltd. (MHI) has launched local production of core components for gas turbines at its joint venture with Dongfang Steam Turbine Works (DFSTW), one of China's top three turbine manufacturers. DFSTW is headquartered in Deyang, Sichuan Province. In July 2004, MHI and DFSTW obtained approval from the municipal government of Guangzhou (Guangdong Province) to operate Mitsubishi Heavy Industries Dongfang Gas Turbine (Guangzhou) Co., Ltd., a joint venture for manufacturing and marketing gas turbines.

The joint venture company is capitalized at US$24.4 million, with MHI owning a 51% stake and DFSTW holding the remaining 49%. The JV will manufacture and market core components of gas turbines, such as combustors and turbine blades, and will also provide repair and maintenance services. MHI will furnish the required technologies, starting with coating technologies for combustors used in M701F and D-type gas turbines and gradually expanding to production technologies for rotor blades and stator vanes.

The 10 000 square meter plant at the 70 000 square meter site will initially operate facilities for coating gas turbine combustors, rotor blades and stator vanes; ultimately, combustor/blade/vane processing and maintenance lines will be added. Operations will kick off with a staff of roughly 100, to be increased to 200 as operations expand.

In line with the Chinese government's policy to diversify energy sources, constructions of natural gas-fired power plants are progressing rapidly, and as a result MHI anticipates further opportunities to bid on bulk orders for gas turbines. In China, levels of collaboration with local companies and technology transfer constitute a key factor when evaluating competing bids, in addition to price and technology on offer.

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