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. Following completion of plant construction and production preparations, the two partner companies held a formal launch ceremony on September 9, attended by many Chinese customers and distinguished guests.

The joint venture company is capitalized at 2.7 billion yen, 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 m2 plant at the 70,000 m2 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.

MHI and DFSTW reached agreement on the joint manufacture of large-size gas turbines in 2002. In 2003, the two partners received a bulk order for major installations for China’s first gas-turbine combined-cycle power plants, including 10 gas turbines.

In inaugurating production of gas turbine components at the JV, MHI aims not only to respond to the Chinese government’s request for technology transfer and local production, but also to make its full-scale entrance into the Chinese market for gas turbine maintenance services. MHI will provide maintenance services for the aforementioned 10 gas turbines as well as for gas turbines delivered to blast-furnace-gas fired power plants in operation at local steelmakers, which are now in increasing demand. MHI also hopes that this latest development in China will lead to enhancement of service structures for countries throughout the Southeast Asian region.