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Toshiba Signs Joint Venture Agreement with Major Russian Power Generation Equipment Company in Power Transformer Business

20 Sep, 2011

TOKYO, JAPAN, September 20, 2011 — Toshiba Corporation (TOKYO: 6502) today announced that it has entered into a joint venture agreement with Open Joint Stock Company Power Machines, Russia's leading supplier of power generation equipment, on the establishment of a sales and manufacturing joint venture company (JV) for power transformers in Russia.

The JV will construct a manufacturing facility in St. Petersburg, Russia's second city, that will start operation in the second half of 2013.

In Russia and other countries of the former Soviet Union*1, growing electricity consumption and the need to replace aging equipment are driving the installation of new substation equipment. As a result, the market for power transformers is expected to grow from approximately US$1,100 million in 2010 to approximately US$1,500 million US$ in 2015.

Power Machines, a leading manufacturer of turbines and generators with extensive supply experience, primarily in the former Soviet Union, today enjoys a market share of approximately 70 percent*2 in the Commonwealth of Independent States (CIS). Toshiba has entered into the joint venture with Power Machines in order to enhance its transmission and distribution (T&D) business in the former Soviet Union and to secure a stable production base in the region.

Toshiba and Power Machines will respectively hold 49.99% and 50.01% of the JV. The JV will manufacture and sell power transformers in the countries of the former Soviet Union.

Toshiba is building a global T&D business and is seeking to secure a particularly strong presence in emerging markets that can expect further growth. Towards this, Toshiba has recently reinforced its presence in the South American and Southeast Asian markets, and it will continue to seek out new business opportunities in these and other markets.

*1 CIS, Georgia, Ukraine, Lithuania, Latvia and Estonia
*2 Source: Power Machines

Overview of the Joint Venture

Name:         Not yet decided
Established:              Third quarter of fiscal year 2011*3
Capital: Approximately 4 billion yen
Equity ratio: Toshiba 49.99%, Power Machines 50.01%
Employees: Approximately 350 (in 2015)
Business: Design, manufacture, sales and marketing of power transformers

*3 Toshiba will invest in the JV after the completion of all necessary regulatory approvals.

Overview of the New Facility

Location: Kolpino district, St. Petersburg, Russia
Site area: Approximately 95,000m2
Floor area: Approximately 21,000m2
Start of construction: October 2011 (planned)
Start of operation: Second half of 2013

Overview of Open Joint Stock Company Power Machines

Established: In 2000*4
Capital: US$11 million (as of December 2010)
Location: St. Petersburg, Russia
Representative:         Igor Kostin, chairman of the Executive Board - CEO
Employees: 16,277 (as of December 2010)
Net sales: US$1,675 million (from January to December 2010)
Business: Design, manufacture, sales and marketing of turbines and generators for power plants

*4 As a business group bringing together seven enterprises, including Leningradsky Metallichesky Zavod, which was established in 1857, and Electrosila, which was established in 1898.

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Information in the press releases, including product prices and specifications, content of services and contact information, is current on the date of the press announcement, but is subject to change without prior notice.

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