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News Release
Establishment of joint ventures for high-voltage inverters in China

October 21,2013
Fuji Electric Co., Ltd.

Tokyo, October 21, 2013 - Fuji Electric Co., Ltd. (TSE:6504) headquartered in Tokyo, Japan, led by President, Michihiro Kitazawa, and its subsidiary, Fuji Electric (China) Co., Ltd. (hereinafter referred to as “FEC”), headquartered in Shanghai, China, led by President, Teruo Yamamoto, is pleased to announce that it agreed with Shanghai Electric Group Co., Ltd. (hereinafter referred to as “SEC”), headquartered in Shanghai, China, Chairman and CEO, Xu Jianguo, on establishing two joint ventures for high-voltage inverters in China.

1. Background and purpose

Combined with a high-voltage motor, a high-voltage inverter used for high-voltage power supplies (3kV or more) has an energy saving effect by controlling the motor’s rotational speed. Therefore, recently there has been increased demand for high-voltage inverters in industrial plants such as electric power and petrochemical plants and electricity and social infrastructures.
The high-voltage inverter market in China is expected to grow over 15%* per year. China is the largest primary energy consumption market, and the industrial field accounts for 70% of its total energy consumption. In the industrial field, electric motor systems account for 70% of the total electricity consumption. Thus, there are high expectations for the good energy saving effect of introducing inverters. The government also is making an effort to promote energy efficiency.
SEC is a leading industrial electrical equipment manufacturer that has a nationwide sales network and the highest market share of high-voltage motors to which high-voltage inverters are applicable in China.
The establishment of joint ventures will combine our power electronics and control field technologies and SEC’s machine technology and sales force based on strong brand. We will create synergy and expand our high-voltage inverter business with the local completion framework, based on the concept of local design and production for local consumption. The specific activities are shown in (1) and (2) below.
We will establish two joint ventures, one is a sales joint venture (hereinafter referred to as “SJV”) that SEC will have the majority stake in, and the other is a production joint venture (hereinafter referred to as “PJV”) that we will have the majority stake in, to make the most of the characteristics of individual companies.
In the future, in addition to high-voltage inverters, we will consider further expanding business by launching power electronics products such as uninterruptible power supply systems and power conditioners onto the market.
*Estimated number by Fuji Electric

(1) Deployment of energy-saving systems
We will offer highly energy efficient systems by combining SEC’s excellent high-voltage motors and our high-voltage inverters to increase sales.
(2) Development of products appropriate for the Chinese market
Taking advantage of SEC’s marketing information, we will develop products which meet the Chinese market’s needs in terms of functionality and pricing.

2. Outline of JVs

Outline of SJV
(1) Company name Shanghai Electric Fuji Electric Power Technology Co., LTD.
(2) Date of establishment February 2014 (scheduled)
(3) Company address Lot No. 4299 Yindu Road, Minhang District, Shanghai, China
(4) Representative director TBD
(5) Description of business Engineering research and development, sales and after-sales services of high-voltage inverters and related power electronics products
(6) Capitalization US$30 million (¥2.85 billion at the exchange rate of $1 = ¥95)
(7) Shareholders Fuji Electric will hold a 49% stake (Fuji Electric: 20% and FEC: 29%) and SEC will hold a 51% stake
Outline of PJV
(1) Company name Shanghai Electric Fuji Electric Power Technology (Wuxi) Co., LTD.
(2)Date of establishment February 2014 (scheduled)
(3) Company address Lot No. 28, Xi Mei Road, New District, Wuxi, Jiangsu, China
(on the premises of Wuxi Fuji Electric FA Co., Ltd.)
(4) Representative director TBD
(5) Description of business Design and production of high-voltage inverters and related power electronics products
(6) Capitalization US$30 million (¥2.85 billion at the exchange rate of $1 = ¥95)
(7) Stakeholders Fuji Electric will hold a 51% stake (Fuji Electric: 20% and FEC: 31%) and SEC will hold a 49% stake

Outline of related companies

Shanghai Electric Group Co., Ltd.
(1) Year of establishment 2004
(2) Company location Shanghai, China
(3) Description of business New energy equipment, high efficiency and clean energy facilities, industrial equipment and after-sales services
SEC is China’s leading and largest industrial electrical equipment manufacturer in the fields of thermal power generation equipment and high-voltage motors that can be sold with high-voltage inverters. It has set up many joint ventures with various global companies. It is listed on the Hong Kong Stock Exchange and Shanghai Stock Exchange.
In 2012, it achieved sales of 77.1 billion yuan (about ¥1,100 billion) and has about 30,000 employees.
Fuji Electric (China) Co., Ltd
(1) Year of establishment 1999
(2) Location Shanghai, China
(3) Description of business Sales of products manufactured in Chinese production sites and imported products, and export of
products manufactured in Chinese production sites
(4) Stakeholders Fuji Electric holds a 100% stake
Fuji Electric Co., Ltd
(1) Year of establishment 1923
(2) Description of business Development, manufacturing, sales, after-sales services and provision of related solutions of:
i) Various equipment and systems, related to energy, industry, transportation and social infrastructure
ii) Semiconductor devices
iii) Vending machines

Customer inquiries

Business Planning & Engineering Department, Drive Division, Power Electronics Business Group,
Fuji Electric Co., Ltd.
TEL: 03-5435-7059