Machinery & Infrastructure Segment

Business Portfolio

Creating infrastructure that contributes to

the future of society and nation-building

ELECTRIC POWER

•Independentpowerproducer(IPP)businesswiththermalpower,

hydropowerandrenewableenergy

MARINE ENERGY / BASIC INDUSTRY

•MarineenergybusinessincludingFPSO(floatingproduction,

storageandoffloadingsystemforoffshoreoilandgas)facilities

•CoreinfrastructurebusinessincludingLNGfacilitiesforoffload-

ing/unloading,pipelineandlocalgasdistributionbusiness

WATER TREATMENT AND SUPPLY / LOGISTICS

•Developmentandoperationofwatersupplyandsewage,

desalination,andwastewatertreatmentfacilitiesinMexico,

China,EuropeandMiddleEast

•Developmentandoperationoflogisticsandsocialinfrastruc-

tureprojectsmainlyinvolvingseaportandairportbusiness

Supporting social and economic activity with

a wide range of land, sea, and air

transportation systems

SEA

•Salesofnewbuildingships,provisionofshipmanagementser-

vices,brokerageforcharteringvesselsandforsalesandpur-

chasesofsecond-handshipsforshipownersandshipping

companiesinJapanandoverseas,andsalesofshipmachinery

toshipbuilders

•OwnershipandoperationofcommercialshipsandLNGships

LAND

•Export,manufacturingandsalesofJapaneseautomobiles

andparts

•Importwholesaling,dealingandmanufacturingofJapanese

vehicles,logisticsforvehicleparts,retailoperationsandretail

financeworldwide

•Salesandancillaryservicesinvolvingdumptrucksformining

operations,hydraulicexcavators,etc.

•Arrangementforrollingstockandlocomotiveoperatingand

financeleasinginNorthAmerica,Brazil,EuropeandRussia,as

wellasprovisionofrelevantoperating,maintenanceandman-

agementservices

•Generalfreighttransportandpassengertransportbusinessin

Brazil

•TruckleasingandtruckrentalbusinessinNorthAmerica

AIR

•Sales,provisionandarrangementofoperatingleasesand

financeleasesforpassengeraircraft,aswellasaircraftengines

toairlinesinJapanandoverseas

Risks and Opportunities

Rising demand for infrastructure investment

Inemergingcountries,whereeconomiesandpopulationscon-

tinuegrowingmarkedly,demandisrisingforthedevelopment

ofbasicinfrastructure,includingelectrical,water-related,and

logisticalinfrastructure.Asforindustrializedcountries,aging

infrastructureisleadingtoincreaseddemandforrepairs,while

effortstocreatealow-carbonsocietyareboostingdemandfor

relatedinfrastructureinvestment.Moreover,asfacilitiesand

equipmentforenergyresourcedevelopmentbecomemore

advanced,larger,andmorecomplex,developmentdemandis

risingoverall.IntheUnitedStates,theprogressofshaleoiland

gasdevelopmentisheighteningdemand,notonlyforinfrastruc-

turedevelopmentbutalsoforpipelinetransportation,down-

streamchemicalmanufacturing,gas-firedpowergenerationand

LNGshippingfacilities.

ManagingOfficer,

ChiefOperatingOfficerof

InfrastructureProjectsBusinessUnit

YoshioKometani

ManagingOfficer,

ChiefOperatingOfficerofIntegrated

TransportationSystemsBusinessUnit

HiromichiYagi

InfrastructureProjectsBusinessUnit IntegratedTransportationSystemsBusinessUnit

ForecastofElectricityDemandbyRegion

TWh

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2040203520302025202020132000

Forecast

China  U.S.A.  EU  India  Asia-Oceania(OECDmembercountries)

SoutheastAsia  Others

Source:IEAWorldEnergyOutlook2015

BusinessOverview

MITSUI&CO.,LTD.ANNUALREPORT201650

Solid increase in demand for transportation

machinery in line with economic growth

Growthinemergingeconomiesissluggish,andresourcesand

energypriceshavedeclinedfromthesecondhalfof2014.The

lowerdemandforminingmachineryhashadatemporaryinflu-

enceonresults.However,emergingeconomiesareexpectedto

continuetogrow,andresourceandenergypricesareexpected

toincreaseoverthemediumtolongterm.Accordingly,

demandforminingmachineryshouldrecover,andmarketcon-

ditionsareexpectedtopickupduetoanincreaseinland-and

sea-basedlogistics.

IntheUnitedStates,themanufacturingindustryisundergo-

ingarevival,andtheunderlyingtrendofimprovementinU.S.

businessconditionsishavingafavorableeffectonthe

Company’sautomobile,truck,machinetool,andconstruction

machinerybusinesses.Economicexpansioninemergingecono-

mieshasfosteredgrowingconcernaboutassociatedenviron-

mentalproblems.Inaddition,thereisamodalshifttoward

publicmeansoftransportationthatalleviatetrafficcongestion.

Asaresult,demandforpassengerrailwayfacilitiesisexpectedto

increase.Duetoongoingglobaleconomicgrowth,thenumber

ofairlinepassengersisexpectedtoincreaseoverthemediumto

longterm,andconsequently,demandforairframesandengines

isalsoexpectedtorise.

Strengths

•Projectdevelopment;regionaldevelopment;businessmodel

(project)structuring;businessmanagement

•Globalmarketingexpertisecultivatedovermanyyears;global

tradingnetwork

•Infrastructuredevelopmentandoperationsknowledgeand

know-how

•Fund-raising;financing

•Relationshipsoftrustwithexcellentdomesticandinternational

partners,includingtheToyotaGroup;thePenskeGroupofthe

UnitedStates;andshipownersandshippingcompaniesin

Japanandoverseas

Updates of Current Medium-term Management Plan

Promotion of IPP business

MitsuihasestablishedasuperiorIPPbusinessportfoliodiverse

insuchelementsasgeographicallocationandfuel-mix.

Factoringinthepowerplantsthatarecurrentlyunderconstruc-

tion,Mitsuipossessanetgenerationcapacityof11.1GWona

globalscale(asofMarch2016).Bygraduallycompletingcon-

structiononprojectsindevelopmentandnewprojects,weare

significantlyenhancingourearningpotential.Atthesametime,

wearecarryingoutstrategicassetrecyclingtofurtherimprove

thequalityofourportfolio.

•AsofMarch2016,42turbineshavecommencedcommercial

operationsattheJirauHydroelectricPowerPlant(totalcapac-

ityof3.75GW)ontheMadeiraRiverinnorthernBrazil,in

whichMitsuimadea20%investmentinJanuary2014.All50

turbinesareslatedtobecompletedduring2016,makingthe

JirauHydroelectricPowerPlantthefourth-largestpowerplant

inBrazil.

•InJanuary2016,Mitsuibeganparticipationintwonaturalgas-

firedcombinedcyclepowerplants(totalcapacityof3.2GW)in

theIbriIndustrialAreaandSoharIndustrialArea,bothlocated

innorthernOman.Mitsuiistheleadinginvestorintheseplants,

witha50.1%shareholding.Throughthecommencementof

commercialoperationsin2019,theseplantsareexpectedto

ScaleoftheGlobalRailwayMarket

2011–2013:

Approx.¥19trillion2017–2019:

Approx.¥22trillion

*Basedonyearlyaverageof¥125toeuro

*Sumofallcarriagesincludingurban,intercity,passengerandfreight(system,

infrastructure,andmaintenanceservicedomains)

Source:UNIFEWorldRailMarketStudyforecast

Asia-Pacific

4.6%

Africaandthe

MiddleEast

－0.4% TheAmericas

excludingNAFTA

7.0%

NAFTA

3.9%

EasternEurope

0.9%Western

Europe

2.1%CIS

1.4%

MarketGrowthRates

byRegion

Iron&Steel

Products

Mineral&Metal

Resources

Machinery&

Infrastructure

Chemicals Energy Lifestyle Innovation&

Corporate

Development

Americas Europe,

theMiddleEast

andAfrica

AsiaPacific

JirauHydroelectricPowerPlant

MITSUI&CO.,LTD.ANNUALREPORT2016 51

BusinessOverviewMachinery&InfrastructureSegment

provideapproximately30%ofelectricityconsumedinthe

northernregionofthecountry,whichincludesthecapitalcity

ofMuscat.

•Mitsuihasbeeninvestinginanultra-supercriticalcoal-fired

powerplantinMalaysia(totalcapacityof2.0GW;commercial

productionslatedtocommencein2019)withmajorelectric

utilitycompanyTenagaNasionalBerhad.Initseffortstoengage

instrategicassetrecycling,Mitsuisold15%ofits30%sharein

theplanttoTheChugokuElectricPowerCo.,Inc.inMarch2016,

aftercompletionofdebtfinancingthroughtheworld’slargest

issuanceofIslamicbonds(asof2015)inDecember2015.

Promotion of gas distribution business in Brazil

ThroughparticipationinthegasdistributionbusinessinBrazil,

Mitsuiisengagingineffortstoestablishagasdistributioninfra-

structureinBrazilandensureastablesupplyofgas.In2015,we

acquiredadditionalsharesinthebusiness.Thegasdistribution

businessinBrazilconsistsofregionalmonopoliesbasedoncon-

cessionsgrantedbystategovernments.Theexpansionofthegas

distributionbusinesslineup,whichsteadilygeneratescashreve-

nues,issignificantlycontributingtoourearnings.

In2006,weacquiredMitsuiGáseEnergiadoBrasilLtda

(MitsuiGás),whichatthetimehadequityinterestsingasdistri-

butioncompaniesinsevenstatesinBrazil.Inadditiontoacquir-

ingaportionofsharesinCompanhiadeGásdoCearáS.A.in

2014,weacquiredaportionofsharesinPetrobrasGásS.A.,

whichownslocalgasdistributioncompanies,fromthesemi-

publicBrazilianmultinationalcorporationPetróleoBrasileiroS.A.

–PetrobrasinDecember2015.Throughtheseacquisitions,the

numberofstatesservedbygascompaniesinwhichMitsuiGás

hasanequityinterestincreasedto19,withtheamountofgas

suppliedbythesecompaniesrisingto30millionm3perday.

Collaborative expansion through equity partici-

pation in North American truck leasing and rental

business as well as logistics business based on

solid relationship with the Penske Group

In2001,MitsuimadeitsfirstinvestmentinthePenske

AutomotiveGroup(PAG),thesecond-largestautomotiveretailer

intheUnitedStates.InMarch2004,Mitsuiincreaseditsinvest-

mentinPAGtoapproximately15%andmadeitanassociated

company.Sincethen,wehavebeeninvolvedinPAG’smanage-

mentincooperationwithPenskeCorporation,PAG’slargest

shareholder.ThesolidrelationshipcultivatedwiththePenske

Groupovertheyearshasdevelopedintoastrategicpartnership.

Accordingly,inMarch2015weacquireda20%limitedpartner

interestinPenskeTruckLeasingCo.,L.P.(PTL)forapproximately

US$750million(¥91.0billion).Indoingso,wehavenewly

investedintruckleasing,truckrental,andlogisticsbusinessesin

NorthAmerica.Byleveragingtheknow-howaccumulated

throughourtruckmanufacturing,assembly,distribution,and

truckretailbusinessesincountriesaroundtheworld,notonly

willweusetruckstoprovideroadtransportservices,wewillalso

createoptimallogisticssolutionsbyreducingtransportation

costsandmakinglogisticsinfrastructuremoreefficient.Inaddi-

tion,wearemakingeffortstocreatesynergisticeffectswithother

businesssegments.ThroughPTL’sbusinesses,wewillplayan

importantroleintransportationinfrastructurewhileaimingfor

furtherglobalexpansion.

GasdistributionbusinessinBrazil

APTLtruck

MITSUI & CO., LTD. ANNUAL REPORT 201652

Astoria I (Gas) 575MW [U.S.A.]Brazos (Wind) 160MW [U.S.A.]

Canadian RE Portfolio 680MW(Wind 10 assets, Solar 2 assets)Ontario (Gas) 1,005MW [Canada]

Valladolid (Gas) 525MW [Mexico]Bii Stinu (Wind) 164MW [Mexico]

Jirau (Hydro) 3,750MW [Brazil]

Saltillo (Gas) 248MW [Mexico]Rio Bravo Ⅱ (Gas) 495MW [Mexico]Rio Bravo Ⅲ (Gas) 495MW [Mexico]Rio Bravo Ⅳ (Gas) 500MW [Mexico]Altamira Ⅱ (Gas) 495MW [Mexico]

Haneda (Solar) 2MW ［Japan］Hibikinada (Wind) 15MW ［Japan］Ichihara (Biomass) 50MW ［Japan］Yonago (Solar) 43MW ［Japan］Izumiotsu (Solar) 20MW ［Japan］Tomatoh Abira (Solar) 111MW ［Japan］Arao/Miike (Solar) 42MW ［Japan］Tahara (Solar/Wind) 56MW ［Japan］

Kwinana (Gas) 118MW [Australia]Loy Yang B (Coal) 1,026MW [Australia]

Paiton 1 (Coal) 1,230MW [Indonesia]Paiton 3 (Coal) 815MW [Indonesia]

Hazelwood (Coal) 1,675MW [Australia]Synergen (Gas/Oil) 396MW [Australia]Pelican Point (Gas) 487MW [Australia]Canunda (Wind) 46MW [Australia]

12SPP (Gas) 1,470MW [Thailand]Gulf Electric (Gas/Biomass) 1,897MW [Thailand]

Amman East (Gas) 400MW [Jordan]

Derwent (Gas) 214MW [U.K.]

Zajaczkowo (Wind) 48MW [Poland]

Indian Queens (Oil) 140MW [U.K.]Saltend (Gas) 1,200MW [U.K.]Rugeley (Coal) 1,050MW [U.K.]Deeside (Gas) 500MW [U.K.]First Hydro (Pumped Storage) 2,088MW [U.K.]

Juneda Solar (Solar) 1MW [Spain]Spanish Hydro (Hydro) 84MW [Spain]

Ras Laffan (Gas) 2,730MW [Qatar]

Hezhou (Coal) 2,090MW [China]

Hamamatsu (Solar) 43MW ［Japan］Hamada (Wind) 48MW ［Japan］

Eco Electrica (Gas) 524MW[Puerto Rico]

Net Generation Capacity (Mitsui’s Share): 11.1GW

（Gross Capacity: 41GW）

IPM (U.K.) Power’s portfolioIPM Eagle’s portfolioMT Falcon’s portfolioIPAH’s portfolioOthers

Under construction

Bald Hills (Wind) 107MW [Australia]

Jordan IPP 4 (Oil, etc.) 240MW [Jordan]

Safi (Coal) 1,386MW[Morocco]

Track 3B (Coal) 2,000MW [Malaysia]

Santo Domingo (Wind) 160MW [Mexico]

CK Power (Hydro/Gas/Solar) 2,160MW [Thailand]Salalah-2 (Gas) 718MW [Oman]Ibri (Gas) 1,509MW [Oman]Sohar-3 (Gas) 1,710MW [Oman]

Guzman (Solar) 50MW [Spain]

Thaketa (Gas) 50MW[Myanmar]

Avon (Diesel) 670MW [South Africa]

Dedisa (Diesel) 335MW [South Africa]

byEnergySource

byRegion

Merchant/Contracted

Contracted81%

Merchant19%

Asia22%

Americas28%

Europe12%

Africa 6%

Coal28%

Gas49%

Hydro 12%

Oil 4%

Australia10%

Middle East22%

RE 7%

Railway construction for the Western Dedicated

Freight Corridor Project in India

IntheWesternDedicatedFreightCorridor(DFC)ProjectinIndia,

Mitsuihaswoncontractsthroughsyndicatesoflocalconstruction

contractorsandJapanesemanufacturerstoperformtrack-laying

andcivilengineeringworktotaling320kmandtoinstallsignal

andtelecommunicationsequipmentaswellasanautomatictrain

controlsystemalonga1,344kmsectionoftheproject.Workfor

theprojectcommencedwiththegoalofcompletingconstruction

around2022.

ThegovernmentsofJapanandIndiaaimtorealizetheDFC

Projectthroughastrategicglobalpartnership.Asthebackbone

oftheDelhi-MumbaiIndustrialCorridor,theprojectplansto

createastrongeconomicfoundationthroughtheconsolidation

ofinfrastructuresuchasindustrialparks,whichwillbeestab-

lishednearnewfreightlines,logisticsbases,powerstations,

highways,andharbors.

Aspartofitsnationalstrategy,theJapanesegovernmentis

pushingstronglyfortheoverseasdevelopmentofpackaged

infrastructureprojectswithafocusonoperation,maintenance,

andmanagementbyprivatecompanies.Railtransport,inwhich

Japanpossessesahighleveloftechnologyandprovenrecordof

safety,hasbeenpositionedasavaluableareainthisstrategy.As

theWesternDFCprojectentailstheconstructionofhigh-quality

infrastructure,theJapanesegovernmentisprovidingyenloans

undertheSpecialTermsforEconomicPartnership(STEP)onthe

conditionthatJapanesetechnologyisused.Accordingly,

Japanese-maderailandsignalingsystemsarebeinginstalled.

Takingadvantageofthesepoliticalmeasures,Mitsuiisfocusing

itseffortsonthedevelopmentandimplementationofprojectsto

establishrailinfrastructureoverseas.

Iron&Steel

Products

Mineral&Metal

Resources

Machinery&

Infrastructure

Chemicals Energy Lifestyle Innovation&

Corporate

Development

Americas Europe,

theMiddleEast

andAfrica

AsiaPacific

PortfolioofIPP(IndependentPowerProducer)Business

AsofMarch31,2016

Sectioncoveredbycontract

Delhi

Rewari

Vadodara

Vaitarana

Mumbai

Signaland

telecommunications

equipmentinstallation

(915km) Automatictraincontrol

systeminstallation

(1,337km)

Track-layingandcivil

engineeringwork

(320km)

MITSUI & CO., LTD. ANNUAL REPORT 2016 53