30 October 2013

MCO to Establish Compressor Production and Servicing Base in Pearland, Texas

Tokyo - 30 October 2013 - Mitsubishi Heavy Industries Compressor Corporation (MCO), a group company of Mitsubishi Heavy Industries, Ltd. (MHI), will establish MHI Compressor Manufacturing, LLC in Pearland, Texas (part of greater metropolitan Houston), by the end of this year. The company will produce and service compressors in the U.S. market to accommodate demand generated by rapid growth in shale gas and oil development. Supported by this growth, many new petrochemical plant construction projects are planned, and heavy demand for renewal of existing plants is expected. As such, the new company is being set up to provide comprehensive, one-stop support - covering everything from production to long-term service, as well as emergency repair and on-site construction work. The production plant is slated to commence operation in the autumn of 2014.

Acquisition of a 105,000 square meter (26 Acre) site and construction of a planned manufacturing and servicing base will be funded by MCO. The new company will conduct compressor business operations in the U.S. in collaboration with MHI Compressor International Corporation (MCO-I) in Texas, which handles MCO compressor marketing, sales and after-sales services in the U.S., and Mitsubishi Power Systems Americas, Inc. (MPSA) in Florida, the business base for MHI's power systems operations in the U.S.

The production and servicing base will conduct knockdown production of compressors using components manufactured and tested in Japan, and will provide after-sales and modification services to MCO compressor users. The base will also enhance the company's long-term service agreement (LTSA) capabilities, and enable it to respond to package orders of compressors and gas-turbine power generation systems for petrochemical plant. In the future, plans call for the U.S. base to also handle material procurement and parts processing through local suppliers, and to ultimately becoming a full-scale production and testing center on a par with comparable facilities in Japan.

Gas-rich shale is abundant in the U.S., and by applying advanced economical gas and oil extraction technologies, oil companies plan to increase production capacity by 10 million tons per year (mtpy) collectively by 2017. With manufacturing also looking to rebound in the U.S., the petrochemical industry is aggressively investing, and several mega-scale ethylene plants with a production capacity of over 1 mtpy are already being planned.

In the fiscal year ended March 30, 2013, MCO received a record number of orders for equipment to be used at U.S. ethylene, fertilizer, and propane dehydrogenation (PDH) plants. Further growth is forecast for the current fiscal year, and the company has already received a package order for compressors at a 1.5 mtpy ethylene production plant.

Going forward, MCO will continue to strengthen and expand its sales activities in global markets, including North and South America and Africa, and will further solidify its business foundation in North America by enhancing its production and servicing capabilities in the U.S.

Source: Mitsubishi Heavy Industries