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Gate 3 Medium-term Management Plan

Machinery & Infrastructure Segment

LNG transport carrier for the U.S. LNG export project (Cameron)

LNG transport carrier for the U.S. LNG export project (Cameron)

  • Infrastructure Projects Business Unit
  • Mobility Business Unit I
  • Mobility Business Unit II
Business Activities

We contribute to the development of countries and the creation of better lives through the reliable, long-term supply of indispensable social infrastructure such as power, gas, water, railways and logistics. While strengthening contact points with end users including consumers, we provide sales, financing, leasing, transportation and logistics, and investment in various areas, including large-scale plants, marine resource development facilities, ships, aerospace, railways, motor vehicles, and mining/construction/industrial machinery.

  • Kazumasa Nakai Managing Officer, Chief Operating Officer of Infrastructure Projects Business Unit

    Kazumasa Nakai Managing Officer,
    Chief Operating Officer
    of Infrastructure Projects
    Business Unit

  • Tetsuya Daikoku Managing Officer,<br>Chief Operating Officer<br>of Mobility Business Unit I

    Tetsuya Daikoku Managing Officer,
    Chief Operating Officer
    of Mobility Business Unit I

  • Tatsuya Okamoto Managing Officer,<br>Chief Operating Officer<br>of Mobility Business Unit II

    Tatsuya Okamoto Managing Officer,
    Chief Operating Officer
    of Mobility Business Unit II

Business Environment

  • There has been progress with the shift to a low-carbon society and digital transformations. Also, the shift to renewable energy and digital infrastructure has been increasing due to the COVID-19 pandemic.
  • Renewable energy sources have significantly increased on the back of the trend toward the 3Ds.*1 Also, power-supply adjustment needs for gas-fired power are robust following this increase in renewable energy sources.
  • Global cargo volume is on a downward trend following U.S.– China trade friction and global economic stagnation due in part to the prolonged spread of COVID-19.
  • Demand for transportation and mobility infrastructure services, including energy conservation, new fuel, and electrification, is increasing, as is demand for mass transit. Also, LNG trading is diversifying.
  • CASE*2-related technologies are evolving and changes in the industrial structure are accelerating. Also, the service platform market for end users is expanding.
  • Decarbonization, Decentralization, Digitalization
  • Connected, Autonomous, Shared, Electric

Progress under Previous Medium-term Management Plan (top) and Targets in Medium-term Management Plan 2023 (bottom)

  • In existing business domains, we steadily completed construction work and strengthened our profit base through continued receipt of orders. We also enhanced asset quality through strategic recycling, promoted efforts in new frontiers, made progress toward next-generation businesses, and ­demonstrated our comprehensive strengths.
  • We achieved trading growth in the ship and aerospace businesses, carried out additional investment in U.S.-based Penske Truck Leasing Co., L.P., and ­accelerated efforts toward the electrification of commercial vehicles. We also invested in the vehicle operating leasing business, among other efforts.
  • We will continue efforts to enhance the quality of existing assets, establish profit bases, and transform the nature of our operations. We will also demonstrate our comprehensive strengths in a manner that goes beyond our existing business domains and step up initiatives toward digital transformations.
  • We will implement Groupwide management, strengthen EV/FCV initiatives, and incorporate growth from the MaaS*3 domain. We will also expand platforms to capture growth in Asia.
  • We will realize a well-balanced business portfolio through business development and management-type investments. In addition, we will enhance asset quality by promoting recycling and establish next-generation platforms.

*3. Mobility as a Service

Individual Strategies

Area Our Approach
Centralized / distributed power generation
  • (Centralized power) Improve quality of asset portfolio through continuous replacement, enhance profits from existing businesses, selectively focus on new, high-quality projects (distributed power), promote the independence of existing businesses, and win bids for new projects
Resources and social infrastructure
  • Enhance the value of existing businesses through stable operations and bolt-on investments. Improve profitability in the FPSO business by winning bids for new projects and enhancing operational system
New infrastructure domains
  • Reinforce profit base in existing businesses and promote efforts toward the next-generation energy service, platform-type infrastructure, and digital infrastructure businesses. Also, implement agrotech (combination of agriculture and IT).
Automobiles, construction
machinery and railways
  • Reinforce profit base in existing businesses, expand into new businesses in upstream operations (strengthen EV/FCV business, platforms in Asia, modal shift) and downstream operations (services/leasing/sharing and other MaaS earnings models)
Ships and aerospace
  • Reinforce profit base of existing businesses (leasing/trading/maintenance services). Replace and improve quality of portfolio. Promote gas logistics

Impact from COVID-19 and Response Policies

  • Impact materialized with decline in production and sales of automobiles and motorcycles, lower usage of construction and mining machinery, decreases in passenger and cargo volume on ships, airlines and railways, and lower volumes in logistics operations.
  • Downside risk from worsening financial conditions at customers in infrastructure business, even though there are exemption clauses in contracts.
  • Support earnings by reducing costs, take BCP response by stringently monitoring credit risk and contract execution risk.

Competitiveness

Electric power

Electric power
  • Total power generating capacity of approximately 11.1GW
  • Project operatorship
  • Well-balanced power generation portfolio in terms of region and fuel

Graph 1, 2

Next-generation businesses

Next-generation businesses
  • Promotion of next-generation electric power businesses (distributed power, storage batteries, virtual power plants, and smart city development) in anticipation of change

Offshore energy

Offshore energy
  • Robust structure for collaboration with MODEC, Inc.
  • Abundant project achievements for Petróleo Brasileiro S.A.—Petrobras
  • Stable profits from 18 FPSO/FSO

Gas distribution

Gas distribution
  • Strategic partnership with Petrobras
  • Nearly 50% share of Brazil’s gas distribution volume

Fuel Region Fuel Region

160 affiliated companies 160 affiliated companies 160 affiliated companies

Automotive

Automotive
  • New business platforms in the mobility field by leveraging our customer base

Construction equipment

Construction equipment
  • Leveraging of comprehensive strengths in the construction/mining equipment and machine tool businesses, etc.

Rail

Rail

Providing transportation infrastructure functions such as railway infrastructure construction, ­rolling stock leasing, operatorship, and integrated s­ervices related to railway businesses

Ships

Ships
  • Leveraging of comprehensive sales/purchasing and owner functions
  • Diverse range of transportation and sales solutions in the LNG business

Aerospace

Aerospace
  • Providing functional solutions for aircraft/engine leasing and freighter conversion, and aviation businesses
  • Promoting space-related initiatives, such as the satellite deployment business

Major Subsidiaries & Associated Companies

(Consolidated) Power generating businesses
Businesses Investment in power generation businesses
Ownership
Interest (%)
Var.
Annual
Earnings
(¥ billion)
18/3   46.4
19/3   26.7
20/3   27.6
(Consolidated) FPSO/FSO leasing businesses
Businesses FPSO/FSO leasing
Ownership
Interest (%)
Var.
Annual
Earnings
(¥ billion)
18/3   9.1
19/3   9.3
20/3   3.9
(Consolidated) Gas related businesses
Businesses Gas distribution businesses in Brazil and Mexico
Ownership
Interest (%)
100.0
Annual
Earnings
(¥ billion)
18/3   7.7
19/3   6.5
20/3   11.3
Mitsui & Co. Plant Systems, Ltd.
Businesses Sales of various plants, electric power facilities and transportation
Ownership
Interest (%)
100.0
Annual
Earnings
(¥ billion)
18/3   4.2
19/3   2.6
20/3   3.6
Penske Automotive Group, Inc.
Businesses Diversified international transportation services
Ownership
Interest (%)
16.5
Annual
Earnings
(¥ billion)
18/3   11.1
19/3   8.2
20/3   7.7
(Consolidated) Truck leasing and rental businesses
Businesses Truck leasing, rental, and logistics businesses
Ownership
Interest (%)
100.0
Annual
Earnings
(¥ billion)
18/3   4.3
19/3   7.1
20/3   9.0
(Consolidated) Rolling stock leasing businesses
Businesses Freight car and locomotive leasing
Ownership
Interest (%)
Var.
Annual
Earnings
(¥ billion)
18/3   4.5
19/3   3.3
20/3   2.8
(Consolidated) Asian motor vehicle businesses
Businesses Asian motor vehicle businesses
Ownership
Interest (%)
Var.
Annual
Earnings
(¥ billion)
18/3   8.2
19/3   7.2
20/3   7.2
(Consolidated) Construction & industrial machinery businesses
Businesses Construction & industrial machinery businesses
Ownership
Interest (%)
Var.
Annual
Earnings
(¥ billion)
18/3   4.7
19/3   7.1
20/3   6.0
VLI S.A.
Businesses Integrated freight transportation
Ownership
Interest (%)
20.0
Annual
Earnings
(¥ billion)
18/3   2.3
19/3   2.7
20/3   (1.0)