Toshiba 2001 Annual Report Download - page 27

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This segment as a whole turned in a steady performance
in fiscal 2000, exemplified by strong growth primarily in
North America, that helped push consolidated net sales
up 2% year on year to ¥582.7 billion (US$4,699 million).
Operating income surged to ¥17.5 billion (US$141 million),
up 87% from the previous fiscal year. At the same time, how-
ever, restrained plant and capital investment by electric utili-
ties, as well as other factors, led to a sharp drop in orders, which fell 46% to ¥345.1
billion (US$2,783 million).
Steady net sales in the Power Systems Company reflected strong sales growth in the
North American market, where the power supply industry struggled to keep up with
demand. Orders plummeted, however, as a number of negative factors came into play.
Among these were a decline in large-scale reconstruction projects for nuclear power plants
in fiscal 2000, and plant and capital investment curbs by Japanese power companies.
Furthermore, Japanese power companies, which are pushing ahead with streamlining of
operations to brace themselves for the start of deregulation of electricity retailing, curbed
their plant and capital investment. And price competition heated up in overseas markets.
Major projects completed in fiscal 2000 included construction of power generation
equipment at Tokyo Electric Power Co., Inc.’s Shinagawa No. 1 Thermal Power Station,
construction of reactor facilities at Unit No. 3 of Onagawa Nuclear Power Station, operat-
ed by Tohoku Electric Power Co., Inc., and at Units No. 4 and No. 5 of Chubu Electric
Power Co., Inc.’s Shonan Thermal Power Plant. Major orders included regular inspection
and reconstruction work at Tokyo Electric Power’s Fukushima No. 1 Nuclear Power
Station, and a large-scale substation construction project for Kuwait’s Ministry of
Electricity and Water.
In October 2000, Toshiba reached basic agreement with Mitsubishi Electric Corporation
on a comprehensive alliance in the power transmission and distribution business. The aim
of the alliance is to increase both companies’ development and production efficiencies
and expand their overseas businesses. Three key initiatives will spur Toshiba to become
an elite global player in this field:
•Technological collaboration aimed at increasing efficiency in product development
•Mutual OEM supply to improve productivity
•Joint purchasing of parts and materials to lowering costs
Both companies will also jointly explore the possibility of combining overseas sales and
engineering forces in the future.
25
521
571
583
’99 ’00 ’01
SHARE OF SALES (%)
Years ended Mar. 31
1999 2000 2001
8.5 8.8 8.4
NET SALES
(¥ billion)
Power
Systems
Toshiba is the main contractor for
the 1140MW substation at TEPCO’s
Shinagawa No. 1 Thermal Power Station.
This 1300˚C gas turbine combined-cycle
power plant is scheduled to commence
operation in July 2001.
Toshiba is now able to replace the core
shroud of nuclear reactors, a vital safety
feature, in a shorter timeframe.