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- Mitsui & Co., Ltd.
Corporate Communications Division
Mitsui & Co., Ltd. ("Mitsui," head office: Tokyo, President and CEO: Masami Iijima) and a Russian ICT Group ("ICT"), have reached agreement on a joint investment in a railroad freight car operating lease business and have signed a joint venture agreement providing for the establishment of a new company. The initial investment by the joint venture company (the "Joint Venture") is expected to amount to around US$100 million (approximately ¥8 billion). Mitsui and ICT through the Joint Venture will progressively look for opportunities to expand the business and anticipate its expansion to US$500 million in the future while monitoring market trends and business performance.
Russia boasts the world's second largest rail network, and rail transportation accounts for as much as 85% of freight movements (excluding goods moved via pipelines). However, a shortage of freight cars has become a barrier to the further expansion of rail transportation in step with economic development. Through the Joint Venture, Mitsui and ICT will contribute to the expansion of transportation capacity by leasing freight wagons, especially in the high-demand area of transportation for coal, iron ore and other resources. The target date for the start-up of the new business is April 2012.
Mitsui has gained considerable knowledge of freight car leasing and related services, such as maintenance and fleet management, through its involvement in the freight car leasing business in the United States since 1996. In 2004 it was able to apply this know-how to the development of a locomotive leasing business in Europe and a freight car leasing business in Brazil. In both cases, it was the first Japanese trading company to establish a presence in these areas. Currently Mitsui leases a combined total 270 locomotives and 17,000 freight cars in the United States, Europe and Brazil. The decision to expand into Russia reflects Mitsui's policy of building markets in emerging economies using its experience gained in the sophisticated leasing markets of the United States and Europe.
ICT invests actively in growth sectors in Russia and the CIS, including precious metal resources, finance, heavy industries (including railroads) and engineering. It aims to expand its involvement in railroad-related activities, including the establishment of a high-tech freight wagon manufacturing facility.
In this considerable growth potential market in Russia, with its strong relationship with the ICT Group, Mitsui continues to pursue further opportunities to apply its integrated strengths to wide-ranging infrastructure project development and the development of a logistics infrastructure business based on the advantages of rail, including its efficiency for high-volume transportation and its low environmental impact. Mitsui will also work to attract business in various sectors, including the transportation of completed vehicles for Japanese motor vehicle manufacturers with operations in Russia.
|Business company||MRC1520 (provisional name)|
|Location||Moscow, Russian Federation|
|Establishment date||April 2012 (provisional)|
|Ownership||Mitsui: 50%, ICT: 50%|
|Business activities||Freight car operating lease business in Russia and the CIS|
|Official name||ICT Group|
|Location||Moscow/Saint Petersburg, Russian Federation|
|Business activities||Metals and mining, precious metal production, banking and financial industry, heavy engineering, logistics etc.|
This announcement contains forward-looking statements. These forward-looking statements are based on Mitsui's current assumptions, expectations and beliefs in light of the information currently available to it and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause Mitsui's actual results, financial position or cash flows to be materially different from any future results, financial position or cash flows expressed or implied by these forward-looking statements. These risks, uncertainties and other factors referred to above include, but are not limited to, those contained in Mitsui's latest Annual Securities Report and Quarterly Securities Report, and Mitsui undertakes no obligation to publicly update or revise any forward-looking statements.
This announcement is published in order to publicly announce specific facts stated above, and does not constitute a solicitation of investments or any similar act inside or outside of Japan, regarding the shares, bonds or other securities issued by us.