"It significantly diversifies our equipment offering and compliments the scope of our service business."
Mitsubishi Heavy Industries Ltd. (MHI) has concluded an agreement with United Technologies Corp. (UTC) of the under which MHI will acquire Pratt & Whitney Power Systems (PWPS), the small and medium-size gas turbine business unit of Pratt & Whitney (P&W), an aeroengine manufacturer.
PWPS engages primarily in the engineering, assembly and sales of aero-derivative gas turbines and also provides gas turbine services and engineering, procurement and construction services of related power generation systems. The company has approximately 430 employees. PWPS owns a majority share of Turboden s.r.l. of Italy, a manufacturer of Organic Rankine Cycle (ORC) turbines, which will also be included as part of the acquisition.
MHI, which has focused its gas turbine business principally on large-capacity, high-efficiency systems, will significantly diversify its power generation product portfolio with the acquisition of PWPS. PWPS's aero-derivative gas turbines have been highly acclaimed, especially for emergency power generation applications, for their compact design and rapid start-up time, with over 1,700 units delivered to date worldwide. Going forward, significant growth is anticipated in applications requiring a flexible power source complementary to a renewable-energy power source.
Robust market demand is also expected as small power sources for application in emerging markets. PWPS's main products to date have been 30MW class machines, but currently the company is developing new 60MW class models, which are expected to boost PWPS's market share significantly.
PWPS U.S. operations will be aligned with Mitsubishi Power Systems Americas Inc. (MPSA), headquartered in Lake Mary, FL. MPSA President Koji Hasegawa, states, "The PWPS business offers tremendous synergy with our existing U.S. operations. It significantly diversifies our equipment offering and compliments the scope of our service business."
Turboden's ORC turbines have the capability to generate power or supply hot water using a relatively low-temperature heat source, e.g. biomass, factory waste, heat or geothermal energy. Until now the company has sold more than 300 units in 20 countries, primarily in Europe. In Japan, increasing opportunities are emerging to use this technology in biomass and geothermal applications.
In its gas turbine business, MHI is presently establishing a global structure to substantially increase manufacturing capacity of large high temperature, high-output gas turbines annually. In addition to output from its Takasago Machinery Works in Japan, shipments have now also begun from MPSA's Savannah Machinery Works, a new gas turbine manufacturing and service facility located in Pooler, GA. With the addition of flexible and reliable small and medium-size offerings to its product portfolio through the acquisition of PWPS, MPSA will now be able to meet broader customer needs through combinations of those units and high-efficiency machines.
Going forward, MHI intends to further strengthen its marketing activities for gas turbines, which offer clear benefits in terms of efficient energy usage and reduction of environmental burdens, leveraging the merits of both large-capacity and aero-derivative gas turbines as well as their synergy effects.