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MHI to Produce Gear Cutting Machines in China, Applying New "Shared Factory" Scheme
Date: 2010/8/16 Click: 1666

Tokyo, Aug 02, 2010 (JCN Newswire via COMTEX) -- Mitsubishi Heavy Industries, Ltd. (MHI) is planning to launch production of gear cutting machines in China at a facility that will simultaneously serve as a production base for other company business. MHI has determined to build a new plant on the premises of Changshu Ryoju Machinery Co., Ltd. (CRM) in Changshu, Jiangsu Province, an existing local production base for the company's rubber tire machinery; the new facility will serve both for production of gear manufacturing equipment and for expanded production of rubber tire machinery. Adoption of this "shared factory" scheme will enable the company's gear machinery business to launch local production swiftly and cost-effectively. Production of gear cutting machines at the new plant is slated to commence in March 2011. The initiative will mark the implementation of MHI's first shared factory scheme for launching overseas production.

MHI decided to launch production of gear cutting machines in China in expectation of large demand from Chinese automobile manufacturers, where output has been expanding rapidly. MHI will initially manufacture its best-selling GE15A Dry Cut Gear Hobbing Machine at the new plant. By securing the same technological features and high quality as in corresponding machines being produced in Japan, the company intends to expand sales to manufacturers of high-precision, small-size gears for automobiles, motorcycles, decelerators, etc. The company looks to produce 40 units during the first year, and 100 units by the fourth year.

In addition to being equipped with various gear cutting machine manufacturing equipment, including assembly and measurement-related facilities, the new plant will also have a showroom to exhibit the machine as well as to accommodate test-cutting requests from potential customers. Plans call for construction to begin this month and be completed next February. To expand production of rubber tire machinery, besides the equipment installations in the new plant, a 5-face machining center will be installed in the main CRM plant.

CRM is an affiliate of Mitsubishi Heavy Industries (China) Co., Ltd., the regional headquarters established in Beijing to oversee MHI's business in China. Production at CRM got under way this past March. Supported by China's rapid advancements in motorization, production has been expanding smoothly, to the extent that further production capability is now needed. The aim of MHI's Machine Tool Division, which has been seeking to establish a local production base in China, meshed with CRM's plant expansion plan.

Sharing of factories simultaneously used for other company business operations enables efficient location of production bases and also trims the time and costs required for setting up a new company. At the same time, the shared factory scheme also enables enhanced local procurement capability by commoditizing supply chains and stabilization of business by absorbing the impact of sharp demand fluctuations for specific products through production of multiple product types.

MHI sees production of gear manufacturing equipment at CRM as a pilot case of its shared factory scheme. Going forward the company intends to apply the scheme to promote further enhancement and expansion of its overseas production plants.

About Mitsubishi Heavy Industries

Mitsubishi Heavy Industries, Ltd. (TSE: 7011, 'MHI'), headquartered in Tokyo, Japan, is one of the world's leading heavy machinery manufacturers. MHI's diverse lineup of products and services encompasses shipbuilding, power plants, chemical plants, environmental equipment, steel structures, industrial and general machinery, aircraft, space rocketry and air-conditioning systems.

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