Mitsubishi Heavy Industries to Develop Gas-Turbine Production Unit in Georgia

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Researched by Industrial Info Resources (Sugar Land, Texas)--As part of the first phase of developing a gas-turbine manufacturing and servicing facility in the U.S., Mitsubishi Heavy Industries Limited (TYO:7011) (MHI) (Tokyo, Japan) will set up a fully integrated manufacturing plant for gas-turbine combustors in Pooler, Georgia, near Savannah. Combustors are the component or area of a gas turbine where combustion of fuel occurs. Construction activities are scheduled to commence before the end of 2009, and the facility is expected to start commercial operation by the end of 2010. Project costs are estimated to be about $350 million.

Mitsubishi Power Systems Americas Incorporated (MPSA) (Lake Mary, Florida), the regional subsidiary of MHI, will be responsible for construction and operation of the new facility. The company has already designated a 119-acre site for the project, part of a 1,500-acre industrial site that has been vacant since 2002, when Georgia Ports Authority (Garden City, Georgia) acquired the site for $23 million under an incentive scheme in an attempt to woo DaimlerChrysler, later Daimler AG (NYSE:DAI) (Stuttgart, Germany), to develop an assembly complex for cargo vans. However, the plan did not materialize. Since then, economic development officials of the state of Georgia have been unsuccessfully scouting for a single manufacturer to develop a production facility in the region, and finally chose to parcel out smaller tracts of land at the site to different businesses.

MPSA will develop the gas turbine combustor manufacturing plant on 119 acres of land, leaving about 600 acres open to future development. About half of the industrial site consists of protected wetland. The region is strategically located at the intersection of interstates 95 and 16 and is in proximity to Savannah's airport and container port, the fourth-largest container port in the U.S.

MPSA's facility in Pooler will be equipped with state-of-the-art production lines, similar to those in use at MHI's Takasago Machinery Works (Hyogo, Japan), which has annual production capacities of 6,000 megawatts (MW) of gas turbines; 2,400 MW of steam turbines; 750 MW of hydroelectric turbines; and 500 pumps.

MHI intends to tap into the growing demand for combined-cycle gas-turbine (CCGT) power-generation equipment in North America. The firm is looking to enhance its presence in the U.S. market incrementally, commencing with production of core components and assembly for gas turbines, followed by the full-scale manufacture of turbines, eventually providing maintenance and upgrade services for turbines and major components such as valves and rotors as part of an overall solutions portfolio.

In January, MHI entered into a memorandum of understanding with General Electric Company (NYSE:GE) (Fairfield, Connecticut) to jointly develop an advanced "next-generation" steam turbine for use in CCGT plants. Final agreements for the deal were signed in June this year.

The proposed plant at Savannah is also in line with MHI's plans to ramp up annual gas turbine production capacity from the current level of 36 units to 50 units and capture 30% of the global market share for CCGT power-generation systems. MHI recently shipped the 500th gas turbine from the Takasago facility. The unit is being delivered to Qatar for the upcoming Ras Laffan C independent water and power project, which has a capacity of 2,730 MW of power and can produce 63 million gallons per day of desalinated water. The milestone was achieved in a period of 47 years, following MHI's first gas turbine delivery in 1963 to Asahi Glass Company Limited (TYO:5201) (Tokyo, Japan) for the latter's plant in Chiba, Japan.

Established in April 2001 as the regional headquarters of MHI's power systems business, MPSA manufactures gas, geothermal, hydroelectric, steam and wind turbines, boilers and selective catalytic reduction systems. The company caters to the North American, Mexican and Latin American markets. To date, the firm has installed 428 gas turbine units with a total capacity of 45,196 MW, as well as 1,459 steam turbine units with a total capacity of 162,729 MW.

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