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Mitsui & Co., Ltd. ("Mitsui") (Head Office: Tokyo; CEO: Masami Iijima) has entered into a basic agreement to initiate a capital participation arrangement with Beijing Jianlong Heavy Industry Group Co., Ltd. ("Jianlong Group") and its subsidiary Tianjin EV Energies Co., Ltd. ("JEVE"), and to that end concluded an agreement to provide capital investment on September 30. Mitsui is finalizing this arrangement in order to enter business in China involving manufacturing and sales of rechargeable batteries for electric vehicles and next-generation power grids, known as smart grids. In December 2010, upon completion of procedures for approval by Chinese government authorities, Mitsui will acquire a 20.98% stake in JEVE.
Demand for rechargeable batteries used in electric vehicles ("EV") and smart grids is expected to grow, as is use of the devices used primarily for environmental applications that rely on information technology.
China marked sales of 13 million motor vehicles in 2009, and predictions indicate that someday China will lead the world in motor vehicle sales. With increasing vehicle sales, the issue of popularizing EVs to reduce CO2 emissions is now a challenge for the future development of the Chinese market. Accordingly, the central and regional governments of China are actively promoting EVs, and along those lines the central government of China has announced plans to invest roughly 1.3 trillion yen in EVs by 2020. This rapid growth in the EV market and related industries is expected to drive the market for rechargeable batteries, a key component used in EVs.
Moreover, by 2020, in a move to upgrade and bolster the basic capacity of its power grid infrastructure, China is expected to invest RMB 4 trillion (approximately JPY 50 trillion) in the construction of integrated smart grids. Such initiatives are also likely to bolster demand for rechargeable batteries, a critical smart grid component.
Established in April 2009, JEVE is an up-and-coming manufacturer and seller of batteries and has plans to begin mass production of such devices by the end of 2010. The company will initially manufacture lithium-ion batteries for electric bicycles (e-bikes) and small commercial-use EVs. Later, beginning 2012, JEVE plans to expand operations to mass production of EV batteries and then extend operations to motor inverters and other EV-related components, large high-capacity batteries for smart grids, and other such products.
One of the key strategies of Mitsui's Medium-Term Management Plan calls for development of new business that pursues an industrial solution to environmental challenges. In line with that strategy, business opportunities made possible by this investment enable Mitsui to create value in new environmental information technology business that primarily involves next-generation batteries.
The Jianlong Group, established in 1999, is a leading Chinese private conglomerate and is principally involved in the steel industry (China's 16th largest), shipbuilding (8th largest in China), power generation facilities, and natural resources. It is China's 78th largest manufacturer and ranks 156 out of China's top 500 companies.
Environment-related business has been set as a key area to pursue in the future, and along those lines, in addition to its involvement with JEVE, the Jianlong Group participates in business in the area of wind-generated power.
Fiscal 2008 sales: RMB 40.8 billion (approx. JPY530 billion)
|Company name||Tianjin EV Energies Co., Ltd. (JEVE)|
|Location||Tianjin City, People's Republic of China|
(After Mitsui investment)
|Jianlong Group and employees of JEVE: 79.02%
|Amount of Mitsui investment||RMB 210 million (approx. JPY 2.7 billion)|
|Number of employees||Approx. 300 (as of August 2010)|
|Major business||Manufacture of lithium-ion batteries for use in EVs, e-bikes, and smart grids|
Depiction of the JEVE's factory after its completion, located in a new industrial zone for EV industries in Tianjin City, China
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