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## Power Systems 

## POWER SYSTEMS & SERVICES COMPANY 

With the worldwide trend toward deregulation, the market for electric power is becoming increas- ingly borderless. The Power Systems & Services Company is stepping up global operations in all aspects of its activities, including manufactur- ing, sales, R&D and services. In doing so, we call on the depth of experience the company has built up over the course of its long history and on the world-class technical capabilities we en- joy today. We are aggressively seeking new busi- ness opportunities for our services and energy solutions, so that we can continue our evolution from a leading Japanese company to a leading global company. 

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Chubu Electric Power Co., Ltd.’s No. 5 Unit at Hamaoka Power Station, currently under con- struction, integrates Toshiba’s most advanced ABWR. (Picture: Installation of nuclear reactor vessel) 

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Toshiba’s No.3 position in the 2001 global market for steam turbines has recently been strengthened by supply of equip- ment to many thermal power plants in North America. 

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The Power Systems segment recorded sales of ¥579.6 billion (US$4,358 million) in fiscal 2001, only 1% lower than for the year-earlier period. Although the squeeze on capital spending by Japanese power utilities continued to make itself felt, overseas busi- ness expanded significantly, especially in North America. Operating income increased 54% from the previous year, to ¥26.8 billion (US$202 million), thanks to successful cost reduction measures and the yen depreciation. 

Among major projects completed in the domes- tic market were the installation of power generating equipment at Tokyo Electric Power Co. Inc.’s Shinagawa No. 1 Thermal Power Station and Tohoku Electric Power Co., Inc.’s Unit No. 1 of Higashidori Nuclear Power Station. We also constructed nuclear reactor facilities at Unit No. 3 of Tohoku Electric Power Co., Inc.’s Onagawa Nuclear Power Station and Unit No. 5 of Chubu Electric Power Co., Inc.’s Hamaoka Nuclear Power Station. Major overseas projects in- cluded thermal power generation facilities in plants in North America and substation facilities in Abu Dhabi. 

In Japan, deregulation and a slump in elec- tricity demand continue to buffet the electric power 

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industry market. Toshiba responded with measures to bolster global competitiveness. We strengthened our business systems and reorganized our over- seas bases for sales, manufacturing and service provision. We also developed new technologies that assure we can respond quickly and appropriately to customer demands. One result of this is a posi- tive upward trend in overseas orders for power generating equipment that we will use as a basis for future expansion of overseas business. 

We consider China an important growth mar- ket and continue to cultivate our presence there. We started fiscal 2001 with four manufacturing operations in China and entered fiscal year 2002 with six. A joint venture for the manufacture, sales and maintenance of gas-insulated switchgears for electric power facilities started full-scale operation in March 2002. A month later, a joint venture with the Electric Power Research Institute of China be- gan production of surge arresters. The addition of these new facilities positions us to supply most of the systems and equipment required for China’s transmission and distribution grid. 

In another move to reinforce global competi- tiveness, we entered into a March 2002 agree- ment with Mitsubishi Electric Corporation, under which we will integrate our distribution and trans- mission businesses in an equally-owned joint ven- ture that will start operation in October 2002. The new company will be the world’s third largest manu- facturer of distribution and transmission facilities, and will have the product development, manufac- turing, sales and marketing resources required to reinforce a leading presence in the world market. 

