MHI and DRC to establish JV in China
On April 12 Mitsubishi Heavy Industries, Ltd. (MHI) and Dalian Refrigeration Co., Ltd. (DRC), the largest manufacturer of screw compressor chillers in China, signed a joint venture agreement under which the two companies will establish a new company in Dalian, Liaoning Province, this July, the MHI press release said.
The operation of the JV will include production, marketing and servicing of centrifugal chillers. With establishment of the JV, MHI aims to enhance the cost competitiveness of its chillers by securing a local production base in China, the world's largest market for centrifugal chillers. Going forward MHI will engage in sales expansion in China through the new JV, and it also looks to leverage the new unit as a base for aggressively tapping into the global market.
The new company, to be named MHI Bingshan Refrigeration (Dalian) Co., Ltd., will be capitalized at 80 million yuan (approximately 1.2 billion yen: converted at 1 yuan = 15 yen), with MHI owning a 55% equity share and DRC holding the remaining 45%. The JV will be licensed to manufacture MHI's medium- and large-size centrifugal chillers in China, for which a new 12,000 square meter factory will be newly constructed within DRC's current plant site in Dalian. The JV plans to launch production in April 2014 and looks to establish a structure to produce 500 units per year in the near future.
DRC is an affiliate of Dalian Bingshan Group Co., Ltd., a supplier of air-conditioning and refrigeration systems and equipment for petrochemical plants. DRC's product portfolio centers on the Bingshan ("iceberg") brand of industrial refrigeration systems.
