Infrastructure & Environment Business Division – Main Businesses & Vision –
Provides solar power generation and other renewable energy, as well as various types of social infrastructure such as railways, water, electric power plants, and hospitals, and also handles industrial machinery and bearings that support industry.
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, the Middle East, and the Americas, 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.
Supporting the development of local communities and society through
all types of social infrastructure
▶ In the renewable energy business, we are focusing on expanding the scope of energy sources to include solar, wind, geothermal and biomass, mainly in Japan, the Americas and Europe.
▶ In the power project business, we are conducting several large-scale thermal power IPP (independent power producer) projects overseas with excellent partners.
▶ In the transportation and social infrastructure business, in addition to railway projects and related services, we are also expanding our scope to include management of infrastructure such as ports and water treatment plants.
▶ In the medical infrastructure business, we are focusing on hospital public-private partnerships (private finance initiatives), and develop, arrange financing and provide facility management and administrative services.
▶ In the plant business, we develop large-scale plants in industries such as fertilizer, oil and gas, chemicals, steel and electric power. We are also creating new business investment opportunities using the knowledge we have gained in the plant business.
▶ In the bearing business, we have invested in bearing products and component manufacturers in China and Europe, and are leveraging our distribution and sales, operational support and inventory functions to build an international supply network.
▶ In the industrial machinery business, we operate surface mounter sales companies in Asia and South America, and are capitalizing on growing demand for smartphones and automotive electronic components.
Strengths That Drive Value Creation
▶ Ability to create value chains using our expertise, our domestic and international networks, and the diverse functions unique to a general trading company
▶ Ability to not only complete plant projects, but to handle details such as introducing and incorporating new technologies and operating service know-how
▶ Knowledge and networks built in large-scale plant development in emerging markets, as well as in thermal power IPP projects and renewable energy IPP projects that involve business operation
Strategies and Initiatives
Demand for electricity is growing globally, particularly in emerging countries in Asia, and the thermal IPP business is central to meeting that demand. It is a business that can generate stable returns over the long term, and we are focusing not only on new development but also on the acquisition of existing projects, with the intention of rapidly building a portfolio of high-quality assets. In January 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 January 2017, together with Indonesia’s stateowned oil company PT Pertamina (Persero) and Marubeni Corporation, we entered into a long-term power purchase agreement (PPA) with Indonesian state-owned electricity utility PT PLN (Persero) for an IPP project to construct, own and operate a gas-fired power plant and a floating LNG storage regasification unit (FSRU) on the island of Java, Indonesia. The consortium of PT Pertamina (Persero), Marubeni and Sojitz will procure financing for the project, construction of which is scheduled for completion in 2021. Thereafter, the large-scale power plant will provide a stable supply of electricity to PLN over a 25-year period, helping to meet Indonesia’s growing demand. Additionally, in April 2017, we made our first investment in a power plant project in the United States, the Birdsboro Power Plant. A wave of retirements of coal-fired and nuclear power plants in the United States has led to high expectations for new power supply sources to fill the void. The Birdsboro plant will help to stabilize the country’s electricity infrastructure by providing a reliable supply of power while minimizing environmental impact by utilizing highly efficient, state-ofthe- art equipment.
In renewable energy, we have several solar power plants in operation or under construction. We are also participating in the development of wind, geothermal, biomass and other power projects in Japan and elsewhere.
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. The total contract amount now exceeds ¥350 billion, making this the largest Japanese ODA project ever. We have also invested in Cad Railway Industries Limited, a comprehensive rolling stock maintenance, repair and overhaul business in North America. Using the know-how obtained from these businesses, we are considering expansion in this sector in regions outside of North America.
Most of our businesses are conducted in cooperation with partners. We emphasize building trust with partners in order to respond flexibly to customer requests. We also focus on human resource development to ensure that our partners continue to choose us to work with. While valuing experience, we also promote self-improvement and work to ensure that employees and the organization benefit from the knowledge and experience they have gained.
Focus Area: Restructuring Our Earnings Foundation
Regaining our position as a core business of Sojitz by reestablishing a stable earnings foundation
We are placing priority on building a more stable earnings foundation by increasing the share of IPP, social and other infrastructure businesses in our portfolio and building up quality assets. We have organized our resources to respond to diversifying societal needs, technological innovations and the expansion of PPP projects; flexibly capitalize on rapidly growing opportunities for infrastructure improvement; and capture new business opportunities. For example, we established the Medical Infrastructure Office and integrated the Medical & Healthcare Business Development Office of the Chemicals Division in order to focus on establishing a platform for exporting efficient Japanese-style medical services to other parts of the world, which is part of the Japanese government’s economic growth strategy. 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.
Growing interest in renewable and clean energy around the world
Strong need for thermal IPP projects to provide large-scale, stable sources of energy to meet rising demand for electricity in emerging countries
Increasing demand for improved transportation, social and medical infrastructure and enhanced environmental solutions in emerging countries
New trading and investment opportunities created by manufacturers' globalization of production
Country risk in emerging countries
Declining infrastructure demand and decreasing business opportunities in oil-producing countries as a result of extended drop in energy prices