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Toshiba Corporation Annual Report 1998 15.
A.
Q.
Q.ANSWERS
A NSWERS
ANSWERS
A NSWERS
Q. AS JAPAN’S ELECTRIC UTILITIES ASK
TOSHIBA TO SUPPLY EQUIPMENT AT EVEN
LOWER PRICES, WHAT ACTIONS IS TOSHIBA
TAKING TO CUT ITS OWN COSTS?
A. We implemented a three-year cost-cutting program that ended in
March 1997. This program targeted every product and project in this
segment. The benefits were enormous. Expenses were reduced across the
board—in sales, head office engineering, design, manufacture, procure-
ment, distribution, construction and at subsidiaries. Both costs and manu-
facturing times were cut, thereby reducing total expenses by one third. But
global prices are still falling. So we have initiated another cost-cutting
campaign to supply products at prices that are competitive worldwide. To
bring about structural improvements, we are slimming down our organi-
zation. Recently, joint-venture companies have been set up in Japan and
Mexico with the U.S.’s General Electric to manufacture steam turbine
blades. This will permit both partners to consolidate production activities in
order to realize more economies of scale.
Q. WITH NUCLEAR POWER-RELATED DEMAND NOW
A. Over the near term, we are placing more
emphasis on the thermal power business,
especially on overseas contracts. Business outside
Japan is essential to gaining new skills and
staying competitive in international markets.
Overseas contracts are now about 10 percent of
power system sales; our objective is 20 ~ 30
percent. In combined-cycle generation, which
cuts carbon dioxide emissions as well as raises
SLOWING, WHAT
WILL BE THE
SEGMENT’S PRIMARY
SOURCES OF SALES
AND EARNINGS?
For Japan’s Hokuriku Electric Power Co., Inc.,
Toshiba manufactured this turbine for the
700MW Unit No. 2 of the Nanao-Ota Thermal
Power Station. Cumulative output from all
Toshiba-made turbines now tops 100,000MW.
Toshiba was selected as
the main contractor to
build a new reactor
shroud at TEPCO’s
Fukushima No. 1 Nuclear
Power Station, Unit No. 3.
Unprecedented in the
world, this undertaking
called for a host of
sophisticated technology,
including radiation
cleansing techniques for
the reactor core.
Power & Industrial Systems—Interview
Toshiba Corporation Annual Report 1998 15.