Mitsubishi Heavy Industries (MHI), IHI and the Development Bank of Japan (DBJ) have partnered to establish a new commercial aero engine company, Mitsubishi Heavy Industries Aero Engines.
Planned to be launched on 1 October, the new entity will take over MHI’s commercial aero engines business as part of an absorption-type split, MHI said.
In the new venture, MHI will have 89% stake, while IHI and DBJ will hold 1% and 10% stake respectively.
MHI said in a statement: "To solidify its position as a partner company in joint international development programmes in the commercial aero engine market, where continuous and robust growth is expected, the new company will focus on improving its financial base.
"It will also pursue enhanced competitive operation by improving productivity through the formation of a large-scale cooperative production."
Aichi prefecture-headquartered Mitsubishi Heavy Industries Aero Engines will be engaged in manufacturing, marketing, maintenance, repair and overhaul of commercial aero engines. It will have a workforce of around 320.
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By GlobalDataThe new company will enter into long-term partnerships with IHI for the production of low-pressure turbine blades.
IHI operates blade production facilities in Soma, Fukushima Prefecture, Japan.
In addition, a wholly integrated supply chain for engine parts will also be created.
MHI will take up business management responsibilities of the new company, as well as provide support in material procurement and R&D activities, among others.
DBJ has been supporting the domestic aircraft industry over the past three decades.
MHI said: "In the present instance again, the bank is committed to providing backup support to strengthen the global competitiveness of Japan’s aero engine industry, through provision of risk money to the new company, leveraging Fund for Japanese Industrial Competitiveness."
