Power Projects & Infrastructure Division Strategies and Initiatives
Industry Environment and Fiscal 2010 Results
Securing a Stable Earnings Base and Rigorous Selection of Additional Business Assets
The global economy held firm in fiscal 2010, particularly in steadily growing Asia, the Middle East, and other emerging economies. Economic growth infrastructure such as electricity and water businesses saw growth in new investment and steady demand. Similarly, Marubeni continued to secure earnings from active I(W)PP and water business projects in emerging economies. We also moved to acquire new assets and replace certain others, while carefully identifying promising business projects.
The division bought additional power generation interests from Hsin Tao Power Corporation of Taiwan, participated in the Raleigh Wind Energy Centre Project in Canada, acquired interests in Aguas Nuevas S.A., Chile’s third-ranking water business operator, and assumed a role in Australian industrial water treatment engineering firm Osmoflo Holdings Pty Ltd. We also took part in a regulated power transmission and distribution business in the U.S. state of Texas, as well as large-scale submarine power cable development in the U.S. Mid-Atlantic region. These efforts marked our entry into the power transmission and distribution business.
In overseas power plant EPC, the division won two back-to-back projects—the Nghi Son (1) Coal Fired Thermal Power Plant in Vietnam, which will be the country’s largest, and an extra high-voltage cable project in Abu Dhabi. The division also won the Haripur Combined Cycle Power Plant Project in Bangladesh, the largest power plant project awarded to a Japanese company in the country.
In summary, the division saw earnings from brisk overseas power plant EPC business in addition to stable earnings from existing power and water business assets. As a result, segment gross trading profit for fiscal 2010 was ¥25.6 billion, with segment net income of ¥17.5 billion.
Initiatives in Fiscal 2011
Enlarge the Scale of Power and Water Businesses to Leap Forward as a Top Global Player
In the overseas I(W)PP business, the Power Projects & Infrastructure Division continues to grow business scale by acquiring selected prime business assets in Asia, the Middle East, the Americas, and Australia. We seek to achieve a well-balanced regional portfolio and optimize investment returns. At the same time, under integrated management of division assets, we will move to improve the earnings power of existing projects. We will also take steps to promote power transmission and distribution, a new field for the division.
In water operations, the division will leverage its business track record and expertise to encourage growth in business scale and business domains in Central and South America, Asia, Australia, and the Middle East.
In the overseas power plant EPC sector, in addition to Asia and other existing priority markets, we will look to enter new global markets where we can leverage Marubeni’s strengths. We will develop a more robust earnings base by taking on combined cycle, coal-fired, geothermal, and other power plant and transmission projects. We will also make the service and maintenance businesses peripheral to EPC more diverse.
In retail power sales in Japan, the division, will use its lowcarbon power generation assets to expand its earnings base by securing additional sources of electricity and increasing the number of customers. These efforts will dovetail with measures to enhance added value on the environmental front.
Marubeni's existing I(W)PP and water projects are backed by long-term power purchase agreements and other sources of stable earnings. With demand in electric power and water business expected to rise, most notably in Asia, we will maintain earnings stability in fiscal 2011.
