Power Systems Business Strategy Initiatives Toward 2015
October 6, 2005
Hitachi, Ltd. Shigeharu Mano President & Chief Executive Officer Power Systems 1
Copyright © Hitachi, Ltd. 2005 All rights reserved.
Power Systems Business Strategy Initiatives Toward 2015
1.Overview of the Power Systems 2.Market Trends 3.Management Vision 4.Technologies and Products 5.Business Framework 6.Conclusion
2
Copyright © Hitachi, Ltd. 2005 All rights reserved.
Power Systems Business Strategy Initiatives Toward 2015
1.Overview of the Power Systems 2.Market Trends 3.Management Vision 4.Technologies and Products 5.Business Framework 6.Conclusion
3
Copyright © Hitachi, Ltd. 2005 All rights reserved.
1-1. Position of the Power Systems
Position of Power Systems in Power & Industrial Systems Segment
Hitachi’s Revenues by Industry Segment
¥2,515.3 bil.
Financial Services Logistics, Services & Others Digital Media & Consumer Products Electronic Devices
Power Systems ¥520.4 bil.
Power & Industrial Systems 24％
Total ¥9,027.0 bil.
Information & Telecommunication Systems
High Functional Materials & Components
FY04 Consolidated Basis (ended March 31, 2005)
Industrial Systems Automotive Systems Urban Planning and Development Systems Hitachi Air Conditioning Systems Co., Ltd. Hitachi Construction Machinery Co., Ltd. Hitachi Industrial Equipment Systems Co., Ltd. Hitachi Kiden Kogyo, Ltd. Hitachi Via Mechanics, Ltd. Hitachi Plant Engineering & Construction Co., Ltd., others
※Total revenues are the total after eliminations and corporate items; shares of total revenues by segment are computed based on revenues before eliminations
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1-2. Overview of the Power Systems Power Systems Revenues by Business Power & Industrial Systems 21%
Thermal & Hydroelectric Medical Systems Total: Systems 1% 41% ¥520.4 bil. Nuclear Systems 37%
Tokyo Electric Power Company (TEPCO) Hitachinaka Power Station (Coal-fired Power Plant)
Hokuriku Electric Power Company Shika Nuclear Power Plant (Steam turbine generators)
Ratio of Overseas Sales in Power Systems Overseas 26% Total: ¥520.4 bil. Japan 74%
FY04 Consolidated Basis (ended March 31, 2005)
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University of Tsukuba Proton Medical Research Center (Proton Beam Therapy System for Cancer Treatment) Copyright © Hitachi, Ltd. 2005 All rights reserved.
1-3. Power Systems Products (1) Thermal & Hydroelectric Systems Coal-fired Power Plant, Boiler, Air Quality Control System, Steam Turbine, Gas Turbine, Combined Power Plant, Hydraulic Turbine, Wind Generator System, Electrical Power Selling, Preventive Maintenance
Nuclear Systems Nuclear Power Plant, Reactor Pressure Vessel, Reactor Internals, Component/Piping Support Structure, Nuclear Fusion Equipment, Accelerator and Superconducting Application System, Condenser, Nuclear Fuel Cycle Facility, Transport and Storage Dual-Purpose Dry Cask, Preventive Maintenance
Power & Industrial Systems Generator, General-Purpose Motors, Traction Motors, Substation Equipment, Control and Monitoring System, Power Device, Uninterruptible Power Supply System, Bifacial Photovoltaic Solar Module
Medical Systems Proton Beam Therapy System for Cancer Treatment, Positron Emission Tomography System with Semiconductor Detector, Supporting and Solution Service for Clinical PET *PET: Positron Emission Tomography
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1-3. Power Systems Products (2) Boilers
Steam Turbine Generators
Environmental Control Systems
Turbine Runners
Nuclear Reactors
Power Devices
Small-scale Nuclear Reactors
(Desulfurization Systems)
H-25 Gas Turbines
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Transmission Equipments
Wind-turbine Generators
Uninterruptible Power Supplies
Linear Accelerators
Accelerators
Gantries (Medical Systems)
Monitoring and Control Equipments
Copyright © Hitachi, Ltd. 2005 All rights reserved.
Power Systems Business Strategy Initiatives Toward 2015
1.Overview of the Power Systems 2.Market Trends 3.Management Vision 4.Technologies and Products 5.Business Framework 6.Conclusion
8
Copyright © Hitachi, Ltd. 2005 All rights reserved.
2-1. Domestic Market Trends
３７％
Capital Expenditures of 10 Japanese Power Companies FY1993 =100%
* Source:
computed from actual plant and equipment projects carried out by 10 power companies
100% 72% 36%
31%
34%
Gradual increase
1993
1998
2003
2004
2005(Plan)
(¥ bil.) 4,934.1
3,553.1
1,770.6
1,512.6
1,690.7
(FY)
■Future Power Capacity Development Plans ■Outlook Power capacity scheduled to come on line in next 10 years (FY2005~2014) Under Construction No. of (MW) Plants
Planned (MW)
No. of Plants
Thermal
7.99
10
12.34
22
Nuclear
3.37
3
16.32
12
Incl. BWR*
2.46
2
15.49
11
Hydroelectric
6.9
11
0.07
13
Source: Ministry of Economy, Trade and Industry, Summary of Electricity Supply Plan, FY 2005
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FY05 planned capital expenditures are expected to rise year on year for the first time in 12 years In terms of new capacity, demand is expected to remain firm for thermal power plants and new construction of nuclear power plants is also anticipated Demand for upgrades to existing facilities is expected to rise to boost output and renew aging equipment *BWR: Boiling Water Reactor Copyright © Hitachi, Ltd. 2005 All rights reserved.
2-2. Overseas Market Trends (1) Trends in Electricity Consumption ■Outlook for World Electricity Consumption The U.S., Europe and China will remain the world’s three largest electricity consuming regions World electricity demand is expected to continue expanding
1.3 times 2002 level
7.6 Others
5.2
Japan China
1.0 1.5 2.9
9.0 1.1 3.3
3.2
3.4
3.7
4.3
4.6
2002 (actual) 14,300 tril.Wh
2010 (forecast) 18,900 tril.Wh
2015 (forecast) 21,400 tril.Wh
Europe U.S.
Total:
1.0 2.8
1.5 times 2002 level
(Unit: tril. Wh)
*Source: International Energy Agency’s International Energy Outlook 2005
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2-2. Overseas Market Trends (2) Features of the Three Largest Electricity Consuming Regions ■Electricity Generating Capacity by Type (2002) Coal U.S.
Europe
China
Oil
Gas
Other Hydroelectric
51.3% 26.9%
Nuclear
20.2
The price of crude oil will remain high More stringent environmental regulations will be imposed on gas emissions Energy security will be reviewed
33.7% 77.2%
*Source: Energy Balances of OECD Countries 2001-2002, others
Coal-fired and nuclear power generation underpins the supply of electricity in the world’s three largest consuming regions
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■Medium- and Long-term Outlook
Stable price of coal prompts reappraisal of coal-fired thermal power generation Briskness of new facility construction in the U.S. for the first time in almost three decades Growing demand for environmental control equipment (flue gas treatment systems) Moves to add this equipment to existing plants worldwide Increased activity in construction and renewal of nuclear power plants Enactment of the Energy Policy Act of 2005 in the U.S.
Copyright © Hitachi, Ltd. 2005 All rights reserved.
Power Systems Business Strategy Initiatives Toward 2015
1.Overview of the Power Systems 2.Market Trends 3.Management Vision 4.Technologies and Products 5.Business Framework 6.Conclusion
12
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3-1. Power Systems Management Vision
Overwhelmingly powerful technologies and products Business framework deeply rooted in regional markets
Succeed in the global marketplace
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3-2. Business Policy (1) Focus on Overwhelmingly Powerful Technologies and Products
Coal-fired Power Plants Nuclear Power Plants Proton Beam Therapy Systems for Cancer Treatment
Maintain and strengthen “monozukuri” (manufacturing) capabilities
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3-2. Business Policy (2) Create a Business Framework Deeply Rooted in Regional Markets
Domestic Operations Maintain a powerful sales system based on relationships of trust with customers
Global Operations Domestic: Globalize Japan—strengthen support functions as the general headquarters Overseas: Localize overseas operation—promote local operations in each region
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3-3. Revenue and Operating Margin Targets Revenues [(Unit: ¥ billion)]
730.0
1,000
800.0 10% operating margin
6% operating margin 800
520.4
600 400 200
21 1 37
Power & Industrial Systems Medical Sytems
About 15 About 5 About 35
About 15 About 10 About 35
Nuclear Systems
About
Thermal & Hydroelectric Systems
About
45%
40%
FY2004
FY2010
FY2015
26%
42%
53%
41% 0
Overseas sales ratio
Revenue: ¥800.0 billion (FY2015) Operating profit margin: At least 10% (FY2015) 16
Copyright © Hitachi, Ltd. 2005 All rights reserved.
Power Systems Business Strategy Initiatives Toward 2015
1. Overview of the Power Systems 2. Market Trends 3. Management Vision 4. Technologies and Products 5. Business Framework 6.Conclusion
17
Copyright © Hitachi, Ltd. 2005 All rights reserved.
4-1. Mainstay Products and Technologies Focus on Overwhelmingly Powerful Technologies and Products Coal-fired Power Plants Strengthen key components, including boilers, steam turbines, generators and environmental control systems (AQCS) *AQCS: Air Quality Control system
Electrostatic precipitator Exhaust flue Desulfurization Denitrification equipment equipment
Environmental control system
Nuclear Power Plants Develop key technologies, including nextgeneration nuclear reactors and preventative maintenance technologies
Proton Beam Therapy Systems for Cancer Treatment Develop key technologies, including accelerators and rotating gantry
Small-scale nuclear reactor
Accelerator (Proton Beam Therapy System for Cancer Treatment)
Maintain and strengthen “monozukuri” (manufacturing) capabilities 18
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4-2. Coal-Fired Power Plants (1) Further refine ultra-super critical pressure coal-fired thermal power generation technology proven in Japan and differentiate Hitachi by improving the performance of key components and leveraging integrated strengths
Strengths of the Hitachi Group Trust and brand power
Project management capabilities in EPC
Technologies for achieving high efficiency using ultra super critical pressure (high temperatures, high pressure)
Know-how in operating and managing power plants
Production of BTG and AQCS equipment with proprietary technologies
Coal-fired Thermal Power Generation
Coal
Boiler
Flue gas
Steam
Environmental equipment (AQCS)
Steam turbine
Generator
Electricity
*BTG: Boilar, Turbine and Generator *AQCS: Air Quality Control system *EPC: Engineering, Procurment and Construction
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4-2. Coal-Fired Power Plants (2) Global Share in Key Components (1) Share of Orders for Boilers Used in Coal-fired Thermal Power Plants (France) ALSTOM Others 6.7% 4.4% (U.S.) FW 7.3%
Hitachi 24.7%
(U.S.) B&W 17.1%
(India) BHEL 21.2% (South Korea) Doosan Heavy Industries 18.6%
Share of Orders for Steam Turbines Used in Coal-fired Thermal Power Plants
(U.S.) GE 2.9% Toshiba Corp. 5.7%
Others 25.2%
(India) BHEL 28.4% Hitachi 27.5%
Mitsubishi Heavy Industries, Ltd. 10.3%
*Source: McCoy Power Reports 2004 excluding Chinese manufacturers *BHEL: Bhart Heavy Electricals Limited
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*B&W: Babcock & Wilco Company
*FW: Foster Wheeler Corporation Copyright © Hitachi, Ltd. 2005 All rights reserved.
4-2.Coal-Fired Power Plants (3) Global Share in Key Components (2) Share of Market for Flue Gas Denitration Unit
Others 23% IHI* 9%
(Germany) Siemens 14%
Hitachi 30% MHI -Cormetech 24％
Share of Market for Flue Gas Desulfurization Unit
Others 23% (U.S.) GE 13% Mitsubishi Heavy Industries, Ltd. 13%
Hitachi 51%
*Source: Estimate by Hitachi *IHI: Ishikawajima-Harima Heavy Industries Co.,Ltd.
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Total number of delivery records as of 2002 Copyright © Hitachi, Ltd. 2005 All rights reserved.
4-2. Coal-Fired Power Plants (4) Strengthen Key Components Develop low-cost boilers with a small environmental impact
Develop highly efficient, low-cost steam turbines and large-scale generators
Develop high-performance, low-cost AQCS
Supplied to MidAmerican Energy Company (U.S.) Council Bluffs Energy Center Unit 4 (Capacity: 790kW) Slated to come on line in 2007
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4-3. Nuclear Power Plants (1) Steadily complete domestic BWR projects and focus on developing key technologies for preventative maintenance technology as well as next-generation nuclear reactors
Strengths of the Hitachi Group Capable of handling everything from nuclear reactors to turbines Ability to create proposals for increasing output of a plant and upgrading aging facilities Technology development capabilities rooted in “monozukuri” DNA
Sophisticated preventative maintenance technologies such as Water Jet Peening (WJP) WJP is a maintenance technique whereby a high-pressure water jet is applied to the surface of steel structures to reduce the residual tensile stress on surfaces. WJP is effective for maintenance work inside nuclear reactor pressure vessels.
Nuclear Power Plant Fuel Nuclear reactor
Steam
Electricity Steam turbine
Generator
Supplied to Hokuriku Electric Power Company Shika Nuclear Power Plant No. 2 (Capacity: 1,358kW) Slated to come on line in March 2006
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4-3. Nuclear Power Plants (2) Development Plans for ABWR Nuclear Power Plants in Japan
Overseas Nuclear Power Plant Projects
Power Plants Planned in the Next 10 Years (Through FY2014) Company/Plant Name
The Chugoku Electric Power Co., Inc./
Start of Construction
Start of Operations
Sept. 2005
Dec. 2011
Aug. 2006
Mar. 2012
TEPCO/Fukushima Daiichi Unit #7
Apr. 2007
Oct. 2011
TEPCO/Fukushima Daiichi Unit #8
Apr. 2007
Oct. 2012
FY2007
FY2013
Shimane Nuclear Power Station No. 3 unit Electric Power Development Co., Ltd. (J-POWER)/Oma Nuclear Power Plant
TEPCO/Higashidori Unit #1
Region
U.S.
Canada
Cooperating Manufacturers GE (U.S.), Toshiba Corp.
AECL(Canada)
Reactor Type
ESBWR
ACR
Scope Nuclear reactorrelated BOP BOP
GE (U.S.), Toshiba Corp.
ABWR
Nuclear reactorrelated BOP
AECL (Canada)
CANDU
BOP
China TEPCO/Higashidori Unit #2
After FY2009
After FY2015
FY2009
FY2014
The Chugoku Electric Power Co., Inc./ Kaminoseki Nuclear Power Station No. 1 unit Tohoku-Electric Power Co., Inc./Higashidori Nuclear Power Station No. 2
FY2011
FY2016
FY2012
FY2017
The Chugoku Electric Power Co., Inc./ Kaminoseki Nuclear Power Station No. 2 unit
*AECL:Atomic Energy of Canada limited *ESBWR:Economic and Simplified BWR *ABWR:Advanced Boiling Water Reactor *CANDU:Canadian Deuterium Uranium Reactor *ACR:Advanced Canadian Deuterium Uranium Reactor *BOP: Balance of Plant (steam turbines, generator-related)
*Source: Ministry of Economy, Trade and Industry, Summary of Electricity Supply Plan, FY 2005
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Proton Beam Therapy Systems (1) 4-4. for Cancer Treatment Help treat cancer patients worldwide through the creation of proton beam cancer therapy systems that apply atomic accelerator technology.
Market for Radiotherapy Equipment Estimated at approx. ¥1.6 tril. worldwide (2004)
Patient
Rotating gantry Irradiation equipment
Efficacy of Proton Bean Cancer Therapy Particularly effective in the treatment of prostate, breast, lung, ovarian and liver cancers
Computer graphic of radiotherapy chamber
Can be used to treat more than 60% of all cancer patients
Features Non-invasive and few side-effects Quality of Life before and after treatment maintained, minimizes physiological and psychological burden
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Strength Irradiation delivered in sync with patient’s breathing (Hitachi patent) Technology to control proton beam accurately and safely Copyright © Hitachi, Ltd. 2005 All rights reserved.
Proton Beam Therapy Systems (2) 4-4. for Cancer Treatment
North America Around 1 million people diagnosed with cancer each year
Over 600,000 treatable with this system
Japan Around 500,000 people diagnosed with cancer each year
Over 300,000 treatable with this system
U.S. MD Anderson Cancer Center
One of the world’s largest cancer centers, with 65,000 outpatients per year
Applying for U.S. FDA approval : scheduled to start using the system in 2006
Plans to use the system to treat some 3,400 patients a year
*FDA:Food and Drug Administration
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and Strengthen 4-5. Maintain “Monozukuri” (Manufacturing) Capabilities The backbone supporting the development and production of competitive technologies and products e-Meister Activities
Handing Down Skills and Technology Participation in World Skills Competition ・Hands-on skills learning ・Instill pride and confidence in monozukuri ・13 Hitachi employees from nuclear systems have won the gold medal, the top award
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Hitachi Technical College ・A technical training school for engineers etc. (Established in August 1959)
A program for databasing Hitachi’s core skills (held by highly skilled veterans) using the latest digital media technologies; skills then transferred to other employees ・Content consists of image, narration and explanatory text ・Covers a wide range of fields, including machinery processing, assembly, welding and quality control ・Aids in both strengthening and improving the efficiency of production and design, including job automation
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4-6. Technology and Product Development Bases Hitachi Region
Kokubu Region
Power & Industrial Systems R&D Laboratory (Hitachi-city, Ibaraki)
Hitachi Works (Hitachi-city, Ibaraki)
Turbines, generators and electrical machinery, transmission equipment, receiving and transforming equipment, protection and control systems, power devices
Hitachi Engineering Co., Ltd. Hitachi Engineering & Services Co., Ltd. Other Group companies (Ibaraki) Generation equipment, electrical equipment, inspection facilities, etc.
Core electric power and energy systems technologies
Saitama Tokyo Kanagawa
Babcock-Hitachi K.K. (Kure Works and Laboratory) (Kure-city, Hiroshima) Boilers and environmental control systems
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Ibaraki
Chiba
Hitachi Research Laboratory (Hitachi-city, Ibaraki) Materials, devices, components
Mechanical Engineering Research Laboratory (Hitachikana-city, Ibaraki) Mechatronics systems
Copyright © Hitachi, Ltd. 2005 All rights reserved.
Power Systems Business Strategy Initiatives Toward 2015
1. Overview of the Power Systems 2. Market Trends 3. Management Vision 4． Technologies and Products 5．Business Framework 6．Conclusion
29
Copyright © Hitachi, Ltd. 2005 All rights reserved.
5-1. Create a Business Framework for Each Region Create a Business Framework Deeply Rooted in Regional Markets
Domestic Operations Maintain a powerful sales system based on relationships of trust with customers
Global Operations Domestic: Globalize Japan—strengthen support functions as the general headquarters Overseas: Localize overseas operation—promote local operations in each region
30
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5-2. Global Operations—Domestic— Globalize Japan Upgrade general headquarters’ functions to respond to the needs of each region worldwide
Strengthen support capabilities for overseas operations Increase the number of foreign employees in Japan ・Increase from around 40 at present by at least 5 people a year ・Energize communication at the “monozukuri” frontline (design and manufacturing) and make Japanese employees constantly aware of the world marketplace Increase the number of Japanese employees overseas ・Around 70 at present ・Including design, quality assurance, procurement and other areas, in addition to sales Make greater use of job rotation with overseas bases
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5-3. Global Operations—Overseas— Localize overseas operation Push ahead with business localization in each region to create a business framework that dovetails with local markets
Localize overseas bases ・Employ local management personnel ・Employ local engineers ・Strengthen project management capabilities and local procurement capabilities ・Disseminate local information and business proposal to Japan
Strengthen partnerships ・North America GE, leading engineering companies ・Canada AECL, leading engineering companies ・Europe Leading engineering companies ・China Dongfang Electric Corporation, Harbin Electric Machinery Co., Ltd., others
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5-4. Initiatives in North America Push ahead with business localization in each region to create a business framework that dovetails with local markets
Coal-fired thermal power plants Next-generation nuclear power plants
■ Synergy with Hitachi America, Ltd. ■ Established thermal power systems operating company (February 2005) Hitachi Power Systems America Thermal power plant sales, engineering, procurement, EPC project management
■ Utilization of manufacturing bases Hitachi Canadian Industries Ltd. Manufacture of generating equipment, maintenance services (established in April 1988)
■ Strengthen alliances with GE, AECL, others ■ Build a collaborative framework with engineering companies Hitachi America, Ltd. (U.S.A./Tarrytown, NY)
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5-5. Initiatives in Europe Push ahead with business localization in each region to create a business framework that dovetails with local markets
Coal-fired thermal power plants Environmental control systems (AQCS)
■ Synergy with Hitachi Europe Ltd. ■ Made German boiler company a subsidiary (May 2003) Babcock-Hitachi Europe GmbH Boiler engineering, procurement, installation, test operation (acquired in May 2003, made a wholly owned subsidiary in December 2003)
■ Establish thermal power systems operating company (scheduled for around spring 2006) Hitachi Power Systems Europe (tentative) Thermal power plant sales, engineering, procurement, EPC project management
■ Build a collaborative framework with engineering companies Badcock Hitachi Europe GmbH (Germany/Oberhausen)
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5-6. Initiatives in China Push ahead with business localization in each region to create a business framework that dovetails with local markets
Coal-fired thermal power plants Environmental control systems (AQCS) Nuclear and hydroelectric power plants
■ Synergy with Hitachi (China) Ltd. ■ Made manufacturing joint venture a wholly owned subsidiary (June 2005) Dalian Hitachi Machinery & Equipment Co., Ltd. Design and manufacture of thermal, nuclear and hydroelectric power generation equipment, petrochemical plants, cast products, etc. (JV established May 1997, made a wholly owned subsidiary June 2005)
■ Cooperation with Dongfang Electric Corporation Local partner in thermal power plants Began licensing thermal power technology and extending cooperation for local production in 1991 Signed transfer agreement for ultra-super critical pressure technology in 2004 Cumulative orders from Dongfang in China exceed ¥100 billion
■ Cooperation with Harbin Electric Machinery Co., Ltd. Dalian Hitachi Machinery & Equipment Co., Ltd. (Dalian, Liaoning, China)
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Local partner in hydroelectric power plants Began licensing technology and cooperating on local production in 1980
Copyright © Hitachi, Ltd. 2005 All rights reserved.
Power Systems Business Strategy Initiatives Toward 2015
1. Overview of the Power Systems 2. Market Trends 3. Management Vision 4． Technologies and Products 5．Business Framework 6．Conclusion
36
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6. Conclusion
Succeed in the global marketplace with overwhelmingly powerful technologies and products, and a business framework deeply rooted in regional markets
Revenue: ¥800.0 billion (FY2015) Operating margin: At least 10% (FY2015)
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Copyright © Hitachi, Ltd. 2005 All rights reserved.
C A U T IO N ARY STATEM E N T C ertain statem ents found in this docum ent m ay constitute “forw ard-looking statem ents” as defined in the U .S. Private S ecurities L itigation R eform A ct of 1995. Such “forw ard-looking statem ents” reflect m anagem ent’s current view s w ith respect to certain future events and financial perform ance and include any statem ent that does not directly relate to any historical or current fact. W ords such as “anticipate,” “believe,” “expect,” “estim ate,” “forecast,” “intend,” “plan,” “project” and sim ilar expressions w hich indicate future events and trends m ay identify “forw ard-looking statem ents.” Such statem ents are based on currently available inform ation and are subject to various risks and uncertainties that could cause actual results to differ m aterially from those projected or im plied in the “forw ard-looking statem ents” and from historical trends. C ertain “forw ard-looking statem ents” are based upon current assum ptions of future events w hich m ay not prove to be accurate. U ndue reliance should not be placed on “forw ard-looking statem ents,” as such statem ents speak only as of the date of this docum ent. Factors that could cause actual results to differ m aterially from those projected or im plied in any “forw ard-looking statem ent” and from historical trends include, but are not lim ited to: -
fluctuations in product dem and and industry capacity, particularly in the Inform ation & Telecom m unication System s segm ent, E lectronic D evices segm ent and D igital M edia & C onsum er Products segm ent; uncertainty as to H itachi’s ability to continue to develop and m arket products that incorporate new technology on a tim ely and cost-effective basis and to achieve m arket acceptance for such products; rapid technological change, particularly in the Inform ation & Telecom m unication System s segm ent, E lectronic D evices segm ent and D igital M edia & C onsum er Products segm ent; increasing com m oditization of inform ation technology products, and intensifying price com petition in the m arkets for such products; fluctuations in rates of exchange for the yen and other currencies in w hich H itachi m akes significant sales or in which H itachi’s assets and liabilities are denom inated, particularly betw een the yen and the U .S . dollar; uncertainty as to H itachi’s ability to im plem ent m easures to reduce the potential negative im pact of fluctuations in product dem and and/or exchange rates; general socio-econom ic and political conditions and the regulatory and trade environm ent of H itachi’s m ajor m arkets, particularly, the U nited States, Japan and elsew here in Asia, including, w ithout lim itation, a return to stagnation or deterioration of the Japanese economy, or direct or indirect restriction by other nations on im ports; uncertainty as to H itachi’s access to, or ability to protect, certain intellectual property rights, particularly those related to electronics and data processing technologies; uncertainty as to the success of restructuring efforts to im prove m anagem ent efficiency and to strengthen com petitiveness; uncertainty as to the success of alliances upon w hich H itachi depends, som e of w hich H itachi m ay not control, w ith other corporations in the design and developm ent of certain key products; uncertainty as to H itachi’s ability to access, or access on favorable term s, liquidity or long-term financing; and uncertainty as to general m arket price levels for equity securities in Japan, declines in w hich m ay require H itachi to w rite dow n equity securities it holds.
T he factors listed above are not all-inclusive and are in addition to other factors contained elsew here in this docum ent and in other m aterials published by H itachi.
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