24 Février 2017
February 23, 2017
Hitachi Ltd., Mitsubishi Heavy Industries Ltd. and Toshiba Corp. have decided to delay the integration of their nuclear fuel businesses that was planned for spring due to reasons such as manufacturing hub-related problems and prolongation of a Japan Fair Trade Commission review.
Specifically, the three Hitachi, Mitsubishi and Toshiba affiliates that are involved in these integration talks are as follows: Global Nuclear Fuel-Japan Co., Mitsubishi Nuclear Fuel Co., and Nuclear Fuel Industries Ltd. -- of which U.S. company Westinghouse Electric Company LLC is a major shareholder.
Since the nuclear disaster in Fukushima in 2011, Hitachi, Mitsubishi and Toshiba have all struggled with their nuclear businesses, and each company is aiming to reduce costs in this area by integrating with one another in the hope that this will lead to increased efficiency. Also, it is planned that the three companies will invest equally into a holding company, which will oversee the fuel companies under their control.
According to a source close to the integration project, the three companies are in agreement that they will need to "scrap and build" some of the manufacturing bases that are currently held by the companies' fuel divisions. However, this will not be an easy process because the decision as to which base should be scrapped will inevitably result in job cutbacks.
In addition, earlier this month, Toshiba announced huge losses in excess of 700 billion yen in its nuclear unit in the U.S. Therefore, as the company tries to deal with its massive financial loss, it will inevitably face difficulty as it attempts to proceed with this integration project.
Furthermore, there have also been problems regarding the companies' failure to request a review by the Japan Fair Trade Commission that will be necessary in this case under Japan's Anti-Monopoly Act. There are other issues at hand, such as a possible requirement to support the export of nuclear fuel from overseas to Japan, and it is expected that the review will take several months.
The three companies have all been involved in the manufacturing of nuclear reactors, but the nuclear business environment has worsened, and Toshiba is currently in the midst of a financial crisis. A delay in this integration project could further increase the pressure on these companies' businesses.
In response to an interview with the Mainichi Shimbun, a PR representative from Mitsubishi Heavy Industries stated, "We are looking into various possibilities, including discussions with other companies. However, at this point in time, we do not have a fixed schedule regarding the integration."