Published December 25, 2012
TOKYO – Japan's Hitachi Ltd <6501.T> remains in talks with Lithuania over its plans to build a nuclear plant after the European country's new centre-left government said it could shelve nuclear projects, the company's top executive said on Tuesday.
Hitachi, a century-old conglomerate that designs and builds nuclear power plants with General Electric Co in two joint ventures, has shifted its focus overseas as Japan shuns nuclear energy in the wake of the worst radiation crisis in 25 years at the Fukushima Daiichi nuclear plant last year.
Hitachi's nuclear joint venture had been lined up to supply a nuclear energy plant to Lithuania under the country's previous government, which lost power in October.
"There might be a slight lag in the time period, but the talks have not been completely suspended," Hiroaki Nakanishi, Chief Executive of Hitachi, said at a press briefing.
Nakanishi said he did not think the worldwide market for nuclear energy would shrink, but said it was impossible to form a sales outlook for Hitachi's nuclear business before Japan's own energy policy has been concluded.
The company has previously said it aimed to reach 360 billion yen ($4.25 billion) in sales in the nuclear business by fiscal year 2020. Hitachi's power systems division, which includes its thermal and nuclear power business, logged 832.4 billion yen in sales the year ended March.
The December election victory of Japan's Liberal Democratic Party, headed by incoming prime minister Shinzo Abe, has fuelled speculation that the new government would take a friendlier stance toward nuclear power.
Nakanishi is credited with a sweeping cost-cutting initiative at Hitachi. The firm is consolidating its 900-plus subsidiaries as it tries to take on global rivals like GE and Siemens AG
The company most recently merged its thermal power division with that of Mitsubishi Heavy Industries Ltd <7011.T> and executives from both firms have said they are open to working together on nuclear power.
Hitachi and Mitsubishi Heavy compete against Toshiba Corp <6502.T> in thermal power projects in Japan. The three companies are also rivals in nuclear power projects overseas. Most recently, Hitachi beat Toshiba and its subsidiary Westinghouse to a $1.1 billion deal in October to build six nuclear plants in Britain.
In a further sign of consolidation, company subsidiaries Hitachi Metals Ltd <5486.T> and Hitachi Cable Ltd <5812.T> have said they will merge their businesses next April. Nakanishi said on Tuesday Hitachi Transport System Ltd <9086.T> and Hitachi Capital Corp <8586.T> should remain listed separately.
Shares in Hitachi ended up 0.4 percent at 484 yen on Tuesday, against a 1.4 percent rise on Tokyo's benchmark Nikkei average <.N225>. ($1 = 84.7950 Japanese yen)
(Writing by Mari Saito; Editing by Daniel Magnowski)