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News Release
Fuji Electric Engineering & Construction, Fuji Denki Sosetsu and Furukawa Engineering & Construction Merge to Forma a New Company
May 22,2009
Fuji Electric Engineering & Construction Co., Ltd. Furukawa Engineering & Construction Inc. Fuji Denki Sosetsu Co., Ltd.
Fuji Electric Engineering & Construction Co., Ltd. (President: Fumiaki Koike; Headquarters: Kawasaki-shi, Kanagawa Prefecture) and Fuji Denki Sosetsu Co., Ltd. (President: Tomoyasu Kida, Headquarters: Chuo-ku, Tokyo), subsidiaries of Fuji Electric Holdings Co., Ltd. (President: Haruo Ito; Headquarters: Shinagawa-ku, Tokyo), and Furukawa Engineering & Construction Inc. (President: Shunjiro Ogura; Headquarters: Ohta-ku, Tokyo), a subsidiary of The Furukawa Electric Co., Ltd. (President: Masao Yoshida; Headquarters: Chiyoda-ku, Tokyo) announced today that the three companies would merge on October 1, 2009 to form a new company called Fuji Furukawa Engineering & Construction Co.Ltd , which provides a comprehensive facility construction service through new business models.
1. Objectives of the Merger
(1) Satisfy a variety of customers' needs by integrating the three companies' respective facility construction technologies and through a broad sales network
The three companies will pursue synergy by integrating their respective engineering capabilities, facility construction technologies and execution know-how. The new company will offer a one-stop shop of engineering services that meets a variety of facility construction needs in a wide construction area including electricity, instrumentation, air-conditioning, plumbing and information communication. While quickly responding to customers' requirements, the company will strive to achieve a comprehensive, environmentally-friendly and high-quality execution. Its combined broad sales network will also be utilized to provide fine-tuned customer services and a comprehensive service that covers from new facility construction to after-sales maintenance. By combining the three companies' wealth of experience, the new company will better manage execution and safety of construction work.
(2) Expand into new businesses by capitalizing on economy of scale
By capitalizing on the economy of scale that is achieved through merger, new business opportunities are expected, such as projects for large facility construction. So far each of the three companies has operated in the field where each of them has strength, but the new company expects to expand its business to the new fields that cannot be reached by one company's capability. The company will also handle all facility construction work across the Furukawa Group, including those for Fujitsu and Yokohama Rubber.
2. Deployment of New Businesses
(1) Focus on energy and environment fields and achieve a new growth by providing better services
The new company will fundamentally rebuild the “green” business by combining and reviewing green efforts that each company has worked on. Fuji Electric and Furukawa Electric focus on energy, environment and information communication fields and therefore, through a closer collaboration with engineering teams of these fields, the new company will push forward the comprehensive facility construction service built on green efforts and contribute to both customers and local communities.
(2) Provide support to Japanese, the US and European companies that seek to foray into overseas markets, and offer fine-tuned products and services to local customers
Fuji Electric Engineering & Construction has a wealth of experience in electrical instrumentation and machinery installation businesses overseas, including 40 years in Thailand and 10 years in Vietnam and the Philippine. It also set up a new office in Taipei last year and Cambodia this year. Based on this business base overseas, the new company will deploy an integrated facility construction service by incorporating air-conditioning and information communication equipment capabilities through merger. This will allow the new company to expand its business reach, beyond conventional Official Development Assistant (ODA) projects or projects for the Japanese companies that aim for overseas foray, to projects for local companies including subsidiaries of the US and European companies. The company will also help build social and industrial infrastructure overseas in the energy and environment aspects by strengthening collaboration with its parent companies.
(3) Strengthen after-sales service
As a company that offers a comprehensive facility construction, the new company will strengthen after-sales service business not only in the air-conditioning market, where Fuji Denki Sosetsu has operated, but also in the electrical facility market, including power distribution, by making the most of the engineering capability and operation network that will be enhanced through merger. Targeting manufacturing companies, the new company will also upgrade the maintenance business overseas to further contribute to customers.
(4) Boost competitive advantage by increasing financial strength
To enhance financial strength through merger, various programs including streamlining of operating sites and personnel reassignment will be carried out to reduce fixed costs. While maintaining and improving quality of services, the company will strive to increase construction project orders both in and outside Japan, and enhance the service business. In line with the business size that will be expanded through merger, up-front investments will be increased to exploit new businesses and develop human resources. This will allow the company to boost its fundamental technological capability and ensure integrity of service.
(5) Better manage execution and safety, and appropriately apply the percent of completion method
This merger will expand procurement volume of material and equipment, sales channel and business partners, and will allow the company to better manage execution and safety in order to meet customers' requirements. Also, responding to demand from society, the company will not only enhance corporate governance, including internal control, and ensure compliance but also appropriately apply the percent of completion method to gain public trust.
3. Business Target
Total sales of the three companies amount to approximately ¥73 billion. The new company will target sales of approximately ¥100 billion after five years and being within the top 20 in the facility construction market. It will also aim to list its stock on the first section of the Tokyo Stock Exchange (TSE) within five years, aiming to evolve into a company that is further trusted by customers.
4. Outline of the Merger
5. Outline of the Parties (as of March 31, 2009)
6.Overview of New Company
Inquiries
General Affairs
Planning Dept.
Fuji Electric Engineering & Construction Co., Ltd.
Tel. +81-44-548-4372