Information contained in this news release is current as of the date of the press announcement, but may be subject to change without prior notice.
February 10, 2014
Cooperating to Saudi Arabia through the Social Innovation Business
Riyadh, February 10, 2014 --- Hitachi, Ltd. (TSE: 6501, "Hitachi") today announced that it will host the "Hitachi Social Innovation Forum," a Hitachi Group general exhibition, on February 10 at the InterContinental Hotel, Riyadh, aimed at expanding business in Saudi Arabia and other countries in the Middle East and North Africa. The Forum will include exhibits and seminars held jointly by Hitachi and MEED, an influential media organization covering the Middle East and North African regions. Through this event, the Group will endeavor to deepen ties with local companies and customers and increase business in this part of the world, by introducing Hitachi's joint venture activities with local companies in industrial fields, along with Hitachi's advanced, cutting-edge technologies in fields including industrial and IT solutions, energy, mobility, healthcare, and water treatment.
The Middle East and North African regions are expected to demonstrate dramatic growth in the future, particularly given the positioning of Arab countries, which have the richest reserves of natural resources in the world, and countries such as the Republic of Iraq and Libya, where reconstruction demand is seen to be increasing. The average GDP growth rate in these regions is expected to be between 3% and 4% per year from 2013 to 2015.
Saudi Arabia in particular has continued to demonstrate stable economic growth based on income from natural resources, and is investing efforts in the growth of industries other than crude oil. In its ninth, five-year plan, covering the years from 2010 to 2014, the Saudi Arabian Government laid out new policies involving large-scale investments in social infrastructures, focusing mainly on the implementation and maintenance of power supply networks and facilities in the water and telecommunications fields. Furthermore, in order to strengthen the electric power infrastructure, the King Abdullah City for Atomic and Renewable Energy, an organization established in 2010 under the direct guidance of the King of Saudi Arabia, has set a goal of establishing 16 nuclear reactors (18 GW) and introducing power generating facilities using solar and wind power and other forms of renewable energy on a scale of 54 GW by the year 2032. The Saudi Arabian market is expected to continue growing, given projections for the expansion of the development business in response to urbanization, as well as for increased individual consumption resulting from population growth.
Hitachi is currently implementing policies aimed at the global rollout of the Social Innovation Business as part of its 2015 Mid-term Management Plan, and has set a goal of increasing the ratio of overseas sales, which was at 41% in FY2012, to more than 50% by FY2015. In the Middle East and North African regions, Hitachi is rolling out business with a focus on industrial equipment, large home appliances, power systems, and construction machinery, with a business scale of approximately 95 billion yen in FY 2012. Hitachi has been steadily building its business base in Saudi Arabia since it first began doing business in this country in the 1960s, securing orders for the shipment of general industrial devices and generators. Later, in 1978, Hitachi opened an office in Riyadh in order to further strengthen sales activities. The Hitachi Group currently has a total of five companies in Saudi Arabia with approximately 300 employees, including two joint ventures with local companies.
More recently, in June 2011, Hitachi completed a comprehensive business agreement with "Saudi Arabian Oil Company (Saudi Aramco)", a state-owned petroleum company, regarding the supply and maintenance of compressors for petroleum and natural gas plants. Then, in June 2012, it established "Hitachi Saihati Engineering Services Co., Ltd.," a joint venture with a local company that provides services related to compressors and other industrial equipment. In November of the same year, Hitachi completed an agreement with the King Abdulaziz University regarding joint research targeting water quality monitoring technologies for seawater desalinization facilities. In this way, the Hitachi Group has been building strong collaborations with local partners in Saudi Arabia.
In December 2012, Hitachi received a batch order from Saudi Aramco for Engineering, Procurement, and Construction (EPC) in utility facilities for the Jazan Refinery and Marine Terminal Project, in Jazan in the southwest region of Saudi Arabia. In April 2013, Hitachi established "Hitachi Plant Saudi Arabia, Ltd.", a joint venture with "Musaed El Seif & Sons Co., Ltd.", a construction business supervisory company, and "El Seif Engineering Contracting Co., Ltd.", a major general contracting company, both of which are under the umbrella of the El Seif Group in Saudi Arabia. Through Hitachi Plant Saudi Arabia, Hitachi has undertaken construction and engineering business targeting social and industrial infrastructures, expanding existing business and creating new business opportunities with a focus on the social and industrial infrastructure business, while at the same time cooperating to the development of industry in Saudi Arabia.
Hitachi will continue to strengthen its sales capabilities and roll out business in keeping with customer needs in this region, by capturing new business opportunities targeting urbanization, particularly in information and telecommunication systems, power systems, infrastructure systems, and construction machinery, and by responding to the growing demand for large home appliances resulting from increased personal consumption. In this way, the Hitachi Group will strive to expand its operations in the Saudi Arabian market with a focus on the Social Innovation Business and cooperate to the stable and sustainable growth of the Kingdom of Saudi Arabia.
Hitachi, Ltd. (TSE: 6501), headquartered in Tokyo, Japan, is a leading global electronics company with approximately 326,000 employees worldwide. The company's consolidated revenues for fiscal 2012 (ended March 31, 2013) totaled 9,041 billion yen ($96.1 billion). Hitachi is focusing more than ever on the Social Innovation Business, which includes infrastructure systems, information & telecommunication systems, power systems, construction machinery, high functional material & components, automotive systems and others.
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