Hitachi 2010 Annual Report Download - page 9

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the five publicly listed companies wholly owned
subsidiaries, as mentioned earlier, was one move to
this end. Reviewing and optimizing a business
portfolio is something management should do
constantly, and we will therefore continue to
restructure our operations going forward.
While optimizing our portfolio, in order to achieve
growth we plan to allocate ¥1 trillion, or 70%, of the
¥1.4 trillion budgeted for capital expenditures and
strategic investments between fiscal 2010 and fiscal
2012 to the Social Innovation Business. We will
invest in areas where growth is expected such as
eco-data centers, highly efficient thermal power and
nuclear power systems, and establishing rolling stock
manufacturing and maintenance facilities in the U.K.
Besides the ¥1 trillion earmarked for investments, we
will actively utilize M&As and other means to
strengthen key businesses.
Research and development is the wellspring of
growth for the Social Innovation Business. Of the
¥1.2 trillion we plan to invest in R&D over the next 3
years, we will allocate ¥0.6 trillion, or 50%, for tech-
nologies, products and systems related to the three
themes mentioned earlier: global, fusion and
environment. In specific terms, we will invest to
expand and enhance R&D functions at global bases,
and to develop information platforms for social infra-
structure corresponding to the Social Innovation
Business. This includes storage systems in North
America and smart grids in China. In the environment
field, in addition to electronics research in areas such
as new power devices, inverters and lithium-ion
batteries, we will invest to strengthen analysis tech-
nologies that form the basis of development.
In this way, we will concentrate ¥1.6 trillion of the
¥2.6 trillion in management resources budgeted for
the next 3 years in the Social Innovation Business,
namely information and telecommunication systems,
social infrastructure and industrial systems, and high
functional materials and components to drive our
growth and medium-term expansion.
3. Strengthening the Business Structure to
Stabilize Profitability
We are taking steps to improve underperforming
businesses so as to stabilize earnings. In our flat-
panel TV business, we have ceased producing
panels in-house and switched to using OEM and
Concentrate฀Investment฀on฀the฀Social฀Innovation฀Business
FY2009
¥600 billion
(Total for FY2010 to FY2012)
180
0
100
200
300
400
(Billion yen)
122% 220
FY2012
R&D Investment
FY2009
¥1 trillion
(Total for FY2010 to FY2012)
230
0
100
200
300
400
(Billion yen)
350
152%
FY2012
Capex฀and฀Strategic฀Investments
Information &
Telecommunication Systems
Power Systems
Social Infrastructure &
Industrial Systems
Construction Machinery
High Functional Materials &
Components
7
Hitachi, Ltd. Annual Report 2010