MHI to Establish Regional Headquarters in Singapore To Reorganize and Expand Engine Business in Asia: Generator Set Assembly Plant in Vietnam And Maintenance Plant in China to be Established

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February 11, 2007 No.1156

MHI to Establish Regional Headquarters in Singapore
To Reorganize and Expand Engine Business in Asia:
Generator Set Assembly Plant in Vietnam
And Maintenance Plant in China to be Established

Tokyo, February 28, 2007 - Mitsubishi Heavy Industries, Ltd. (MHI) will establish MHI Engine System Asia (tentative name), regional headquarters to oversee its overseas engine business in Asia, in Singapore this spring. The new company is aimed at expanding MHI's after-sales servicing operations for medium- and large-sized engines in Asia in response to strong market demand. MHI's existing engine sales and after-sales service bases in the region will be reorganized as subsidiaries of the new regional headquarters.


	MHI Engine System Asia (Singapore) : regional headquarters
	To the following photograph

In line with this move, MHI will expand its production capacity in generator set, a core source of after-sales revenue, by establishing an assembly plant in Vietnam. The company will also situate a new maintenance factory in China through the newly establishing subsidiary in China. The total investment will be approximately 1.1 billion yen. Through these developments, MHI aims to increase annual revenue from its engine after-sales servicing operations in Asia by about 70% within three years, to roughly 15 billion yen.

MHI Engine System Asia will be established by increasing capital and renaming MHI South East Asia Pte Ltd., an existing MHI's subsidiary in Singapore. Through the sales and after-sales service bases in the region under its control, the new company will aim to boost engine business revenue by guiding and controlling each base to provide high-quality and homogeneous after-sales services. The new company will be capitalized at 760 million yen and have 60 employees at the time of its inauguration.

The subsidiaries to come under the new regional headquarters' control are MHI Engine System Vietnam, MHI Engine System Philippines, MHI Engine System Indonesia, MHI Engine System Hong Kong and MHI Engine System Shenzhen (tentative names). All of these companies are to be newly established by either spinning off engine business from existing MHI subsidiaries, merging or acquiring an existing after-sales service company. Among them, MHI Engine System Vietnam will newly establish a generator set assembly plant in the suburbs of Ho Chi Min City, and MHI Engine System Shenzhen will set up an engine maintenance factory in Shenzhen.

The generator set assembly plant will be located in Vietnam Singapore Industrial Park (VSIP), approximately 15 kilometers north of Ho Chi Min City. The plant is aimed at responding to increased demand for generator sets, which is MHI's major source of after-sales service revenue. The 6,000 square-meter Vietnam plant will be built on a 17,600 m² site. The plant will adopt a cell production system and have annual production capacity of 1,000 units (approximately 1,466,000 kW). Construction will commence this spring, with the operational launch scheduled for autumn. MHI Engine System Asia will establish the training center to provide training to factory employees as well as after-sales service training to sales staff throughout the Asian region. The 9,000 m² maintenance factory in China will handle local work for new equipment and equipment conversion, as well as outfitting and maintenance of generator sets.

In tandem with expansion of the medium- and large-sized engine market in Asia, "manufacturer-initiated after-sales service business" such as servicing of generator set, parts supply and maintenance is greatly expanding. With the establishment of its new structure for engine business in Asia, MHI will further strengthen its marketing activities in after-sales service business, as well as boost engine sales, including exports from Japan, in a quest to secure stable revenue growth.

Outline of New Structure (names of new companies are tentative) MHI Engine System Asia (in Singapore) Holding Regional headquarters to oversee engine business in Asia. To be established through capital increase and renaming of currently existing MHI South East Asia Pte Ltd.

	MHI Engine System Vietnam To be established through acquisition and merger of existing MHI Service Vietnam Co., Ltd. Generator set assembly plant will be newly established. MHI Engine System Philippines To be established by spinning off engine business of Mitsubishi Heavy Industries Philippines, Inc. MHI Engine System Indonesia To be established by acquiring full equity in PT. Megacipta Satria (MCS), which has been conducting sales and after-sales service activities for MHI engines in Indonesia since 1994 on a contract basis. MHI does not have capital ties with MCS. MHI Engine System Hong Kong To be established by spinning off engine business of Mitsubishi Heavy Industries (Hong Kong) Ltd. MHI Engine System Shenzhen To be established by spinning off engine business of Mitsubishi Heavy Industries (Shanghai) Ltd. Engine maintenance factory will also be established.

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About Mitsubishi Heavy Industries
Mitsubishi Heavy Industries, Ltd. (MHI), headquartered in Tokyo, Japan, is one of the world's leading heavy machinery manufacturers, with consolidated sales of 2,792 billion yen in fiscal 2005 (year ended March 31, 2006). MHI's diverse lineup of products and services encompasses shipbuilding, steel structures, power plants, chemical plants, environmental equipment, industrial and general machinery, aircraft, space rocketry and air-conditioning systems.

For more information, please visit the MHI website (http://www.mhi.co.jp).

PRESS CONTACT:
Hideo Ikuno: h.ikuno@daiya-pr.co.jp
Tel: +813-6716-5277, Fax: +813-6716-5929
Daiya PR (in charge of public relations for Mitsubishi Heavy Industries, Ltd.)