Infrastructure & Environment Business Division
– Main Businesses & Vision –

Business Overview

Provides solar power generation and other renewable energy, as well as various types of social infrastructure such as railways, water and electric power plants, and also handles industrial machinery and bearings that support industry.

【Main Businesses】

Plants (electric power, steel, fertilizer, chemical, energy) and infrastructure (power, transportation, water and renewable energy).
Industrial machinery and production systems (surface mounters, bearings, equipment related to the environment and new energy, etc.)

Infrastructure & Environment

Koshimizu Solar Power Plant in Koshimizu-cho, Shari-gun, Hokkaido
As the spread of renewable energy continues to accelerate in countries around the world, we plan to promote the development of renewable energy projects, including those in solar power, wind power, and biomass.
Utilizing businesses such as the desalination plant under construction in Ghana to respond to the global escalation of water demand.
Proactively expanding transportation-related projects, including train infrastructure projects which can function as ‘clean’ transport.
[Major Business Activities] Renewable Energy Business
[Major Business Activities] Desalination Business
[Major Business Activities] Transport Projects Business

Power Project

One of the Oman IPP, Barka 3


Developing and operating overseas independent power producer (IPP) and integrated water and power plant (IWPP) projects. Plants up and running for the 3 large-scale projects in Saudi Arabia and Oman for which we received contracts during the last few years. Also investing in environmentally-conscious IPP/IWPP projects in regions like Asia and the Middle East, primarily dealing with gas-fired power plants and high-efficiency coal-fired power generation.
Working on EPC projects for power facilities in Asia and the Middle East, contributing to the creation of energy infrastructure in these countries.
[Major Business Activities] Independent Power Producer Business (IPP)

Plant Projects

Continuous annealing line producing steel plating for automobiles
Fertilizer plant in Turkmenistan
Handling large-scale plant projects primarily in the gas, petrochemical, steel mill, and energy industries, in major markets such as China, Asia, Russia/NIS, the Middle East, and Africa.
Devising business models for new projects and lateral expansion into related fields, to supplement our existing plant business.
[Major Business Activities] Plant Project Business in Russia/NIS countries

Industrial Machinery & Bearings

Bearings of varying shapes and sizes
Promoting expansion into growing markets based on our network of bearing industry dealers and our bearing supply chain.
Accelerating global expansion in the semi-conductor and surface mounter segment based around overseas sales and service offices. Shoring up efforts in the industrial machinery field.
[Major Business Activities] Sales of Electronic Component Surface Mounters and Related Equipment
[Major Business Activities] Bearing business
[Major Business Activities] Industrial Machinery Business Targeting Emerging Markets

Business Overview and Vision

Supporting the development of local communities and society through the renewable energy, transportation, social infrastructure and plant businesses

The value the Infrastructure & Environment Business offers is centered on creating the foundations that contribute to development worldwide, starting with addressing the global increase in energy demand and improving social infrastructure and promoting efficient plant business. In the field of renewable energy, we have developed a number of solar power projects in Japan and are now expanding the field to solar power, wind power and geothermal power generation in Japan, the Americas, Europe, the Middle East, Asia and other regions. We are undertaking several independent power producer (IPP) projects through cooperation with excellent partners. In transportation infrastructure, we are targeting participation in railway projects in the Americas and Asia-Pacific, in addition to dedicated freight corridor projects in India. In social infrastructure, we focus on public-private partnerships (private finance initiatives) in areas such as hospitals, and develop, arrange financing and provide facility management and administrative services. Our plant business develops large-scale plants in industries such as fertilizer, oil and gas, chemicals, steel and electric power. In the bearing business, we have invested in bearing products and component manufacturers in China and elsewhere, and are leveraging our inventory functions to build a global supply chain, while in the industrial machinery business, we operate mounting machine sales companies in China, Asia and South America.

Strengths That Drive Value Creation

Using our expertise, insight and networks to provide high-valueadded services

The strengths of this division are its expertise, its domestic and international networks, and its ability to create value chains using the diverse functions unique to a general trading company. Based on these strengths, the added value that Sojitz offers is its ability not just to complete plant projects, but to handle details such as introducing and incorporating new technologies and operating service know-how. These strengths are based on the knowledge and networks we have built in large-scale plant development in emerging countries, mainly Russia and the NIS, as well as in thermal power IPP projects and in renewable energy IPP projects that involve business operation around the world. Customers appreciate that we not only propose projects but also have technical expertise and are able to provide operational support after completion. This division will continue to differentiate itself by consistently delivering such added value.

Operating Environment and Value Creation Strategy
Core Business: Thermal Power and Renewable Energy IPP Business

Rapidly building a high-quality asset portfolio

As mentioned above, energy demand is increasing globally, and the IPP business is at the center of that. It is a business that can generate stable returns over the long term, and we intend to rapidly build a portfolio of highquality assets. In the IPP business, we are focusing not only on new projects but also on investment in existing projects. In February 2016, we acquired an interest in a thermal power IPP project in Sri Lanka from a major U.S. power company. We will be fully involved in operating this business, and will absorb and accumulate management know-how in areas such as operational management and maintenance inspections of electric power plants, which will sharpen our competitive advantage. In renewable energy, we have several solar power plants in operation or under construction. We are also promoting wind power, geothermal power and other renewable energy projects in addition to solar power, both in Japan and in other countries.

Core Business: Transportation Infrastructure Business

Accumulating know-how and developing a railway value chain

In the railway business in India, Sojitz has been cooperating with Larsen & Toubro Ltd. (L&T), India’s largest engineering and construction firm, since receiving the first order in 2013 for civil and track works for a dedicated freight corridor as part of the Indian government’s Delhi-Mumbai Industrial Corridor Project. In the year ended March 31, 2016, Sojitz received new orders for the civil and track works and electrification works for a separate section. We will continue working to expand order back-log from this project, with additional orders expected, while executing the contracts in a timely manner and expanding revenue. We have also invested in a company that operates a comprehensive rolling stock maintenance, repair and overhaul business in North America. Using the know-how obtained from these businesses, we are considering further expansion in this sector, primarily in Asian countries other than India.

Human Resource Development

Earning trust as the partner of choice

Most of this division’s business involves collaboration with partners. We place importance on building trust with our partners in order to listen to customers and respond flexibly to their needs. To remain the partner of choice, we are focusing on development of our human resources. We value experience, and to supplement employees’ selfimprovement efforts, we offer programs that enable them to share the knowledge and experience they have gained with each other and their organizations. In the plant, IPP and social infrastructure businesses, it is sometimes necessary for our employees to go to places that have no obvious business potential to uncover needs on their own. By sending employees out into the field to spur their professional growth, we intend to nurture people who are capable of working anywhere in the Company.

Future Initiatives

Regaining our position as a core business of Sojitz by reestablishing a stable earnings foundation

Combined-cycle power plant in Sri Lanka

In the year ended March 31, 2016, we did not reach our performance targets, largely because a major engineering, procurement and construction (EPC) project was delayed. One issue facing this division is that our results tend to go up and down, so we need to work on stabilizing earnings. To that end, we are placing priority on creating a more stable earnings foundation by increasing the share of IPP, social and other infrastructure businesses in our portfolio and building up quality assets. The Transportation & Social Infrastructure Department was established to flexibly meet globally expanding demand for transportation and social infrastructure facilities starting in the current fiscal year. In addition to transportation projects, we are focusing on hospital public-private partnerships (PPP) and other social infrastructure businesses, and have organized our resources to capture new business opportunities.

The switch from a four-division to a nine-division organizational structure has led to more disciplined management with a greater focus on the profitability of individual business units. The machinery units of Nichimen and Nissho Iwai, the forerunners of this division, were once key earnings drivers. We are determined to further boost our earnings capabilities and regain our position as one of Sojitz’s core businesses.

Opportunities

▶  Strong need for renewable energy around the world
▶  Growing need for improved transportation and social infrastructure in emerging countries
▶  New trading and investment opportunities created by manufacturers’ globalization of production

Risks

▶  Country risk in emerging countries
▶  Intensifying competition
▶  Declining infrastructure demand and decreasing business opportunities in oil-producing countries as a result of extended drop in energy prices

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