Hitachi Announces Reorganization of Industrial Equipment Business through Company Split
Product name：Hitachi Announces
Product businesses in the "Industry/Distribution/Water" domain will be strengthened with an eye on the preparation of "2021 Mid-term Management Plan"
TOKYO, Oct 26, 2018 - (JCN Newswire) - Hitachi, Ltd. (TSE:6501) has today decided to spin off the Industrial Products Business Unit that operates the business of large-sized industrial equipment as Hitachi Industrial Products, Ltd., a company which will be newly established, to strengthen the product business in the "Industry/Distribution/Water" domain, one of Hitachi's four focus business domains; "Power/Energy", "Industry/Distribution/Water", "Urban" and "Finance/Social/Healthcare." The spin-off will take place on April 1, 2019.
Through the spin-off, Hitachi will build an organizational structure in which its industrial equipment business is integrated into two companies, namely, Hitachi Industrial Products, a new company that undertakes large-sized industrial equipment with a focus on build-to-order items and Hitachi Industrial Equipment Systems Co., Ltd. (Hitachi Industrial Equipment Systems), a company that handles industrial equipment consisting mainly of mass-produced items. It will seek to achieve a flexible business operation as independent operating companies and dramatically strengthen manufacturing. In doing so, it will provide highly competitive products on a global basis.
To proceed with the reorganization, Hitachi's Industrial Products Business Unit will be taken over by a company that will be established in the near future through an absorption-type split.
The disclosure items and details on the Company Split have been partially omitted since this is an absorption-type split in which a wholly owned subsidiary takes over a business from Hitachi.
Purpose of Company Split
Hitachi established the current Industrial Products Business Unit as an integrated organization for large-sized industrial equipment businesses in 2015, and through such efforts, has been working to strengthen its business base and enhance product competitiveness and profitability. Now, with an eye on the preparation of its "2021 Mid- term Management Plan," which begins in fiscal 2019, it has decided to conduct a reorganization to spin off the Industrial Products Business Unit as Hitachi Industrial Products, a company which will be newly established.
As an independent operating company, the new company will expedite its decision- making processes, operate in a way flexible enough to compete with specialized companies, and establish an organizational structure in which products that can aim for the top positions on a global basis can be developed and supplied promptly. In addition, it will continue to strengthen its competitiveness globally by optimizing each operational process from manufacturing, sales to services, in addition to leveraging its competitive manufacturing capability utilizing digital technologies.
Through the reorganization, Hitachi Industrial Products that operates with a focus on build-to-order items and Hitachi Industrial Equipment Systems which mainly handles mass-produced items will lead Hitachi's product business under common business strategies, globally, while at the same time playing an important role in the Social Innovation Business of Hitachi, whose strength is the capability of offering Products, Operational Technology (OT) and Information Technology (IT) comprehensively.
In addition, Hitachi will also bolster the business administration function of developing strategies on a cross-functional basis across business units and group companies in the "Industry/Distribution/Water" domain, so that business strategies can be executed in a manner that unifies the front-line promoting Lumada-based digital solution businesses and its competitive product business. It will seek to establish an optimal business structure in the industrial area by promoting the digital solution business and connected products business.
About Hitachi, Ltd.
Hitachi, Ltd. (TSE: 6501), headquartered in Tokyo, Japan, delivers innovations that answer society's challenges, combining its operational technology, information technology, and products/systems. The company's consolidated revenues for fiscal 2017 (ended March 31, 2018) totaled 9,368.6 billion yen ($88.4 billion). The Hitachi Group is an innovation partner for the IoT era, and it has approximately 307,000 employees worldwide. Through collaborative creation with customers, Hitachi is deploying Social Innovation Business using digital technologies in a broad range of sectors, including Power/Energy, Industry/Distribution/Water, Urban Development, and Finance/Social Infrastructure/Healthcare. For more information on Hitachi, please visit the company's website at http://www.hitachi.com.
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