Acknowledging that some changes to an $11 billion deal with the UK government might be made, Japanese Company, Hitachi, said today that it still hopes to win the order for the large train project in Britain. Reports that the train project may be nullified or delayed by Britain have recently put the company’s shares under pressure as the UK government implements spending freezes at Britain’s Transport Department.
The Company’s consortium had won the bid for the massive infrastructural investment project last year, its aim being to replace the 30 year old trains in the UK. Head of Hitachi train business, Gaku Suzuki said he doesn’t expect the project to be nullified when addressing an investor relations event. Rather, he believes that there will be modifications with respect to the new government and its economic plans, but the deal will go through.
The Japanese company is a versatile manufacturer, engaged in the making of nuclear power plants, rice cookers and still reported that it intends to buy an IT company to generate around $3 billion in yearly sales as part of its plans to expand overseas sales by double digits in a period of six years. In its acquisitions bid, potential cited targets include existing data centres, as the company’s IT division plans to provide comprehensive IT services with the aim of making it a major revenue earner and business for the company, said Junzo Nakajima, IT division head, Hitachi.
According to him, Hitachi could spend billions of Yen on the acquisition, but he couldn’t divulge the specific figures. Hitachi’s Information and Telecommunication business earns around 50 to 100 billion Yen yearly in cash flow. The company said it was not planning to modify the ownership arrangement of its nuclear power JVs with General Electric.
This comes after, early in June, a company spokesman had insinuated that it was rethinking the structure of its JV with GE as part of an overhaul of its global sales network. But Koji Tanaka, head of Hitachi’s power business, reiterated that the two companies would work together more closely to increase their overseas sales. Whereas GE has for a long time been in charge of the JVs other markets, Hitachi has propagated leading Japanese sales. GE had earlier said that it had no talks with Hitachi over ventures changes. The company’s main competitors are Japan’s Toshiba and France’s Areva in nuclear power. Hitachi and GE went into the JV in 2007, having been set up in Japan and the US in which, Hitachi owns 80% shares of the Japanese venture and GE owns a 60% stake in the US Company.
June 11, 2010.