Toshiba Eyes Renewables in Wake of Nuclear Crisis
Toshiba Corp said it may need to push back by several years a target to capture 39 orders for nuclear reactors and that it would expand sales in renewables, amid tighter safety standards in the wake of the crisis at the Fukushima Daiichi nuclear plant.
Orders for four AP1000 reactors in China are on target, but approval delays in the United States and other countries could block the firm’s goal to expand nuclear sales to 1 trillion yen ($12.2 billion) in four years, Toshiba said.
Engineers are battling to plug radiation leaks and bring the Fukushima nuclear plant northeast of Tokyo under control more than two months after a 9.0 magnitude earthquake and tsunami devastated a swathe of Japan’s coastline and tipped the economy into recession.
“If everyone around the world is against nuclear power, there is no point in us saying it is a pillar of our strategy,” Toshiba President Norio Sasaki told reporters. “But it is going to take some time to work out exactly what the environment is.”
Toshiba, which has set up a 1,900-person team to help operator Tokyo Electric bring the plant under control, also said it will tap 700 billion yen of its funds to build new revenue streams and invest in its flash memory chips, batteries, smart grids and production in emerging markets.
Toshiba has been trying to lower its dependence on nuclear power for growth by investing in solar and other renewable energy sources, next-generation batteries and smart grids.
It now targets sales of 350 billion yen in solar, hydroelectric, geothermal and wind power technologies, 900 billion yen in smart grid products and 800 billion yen in low-power consumption motors, inverters and batteries.
The industrial conglomerate’s strategy will expand the company’s 2011-2013 capital and research-and-development budget to 1.45 trillion yen, up from 1.3 trillion yen in 2010-2012.
More Than Double
Toshiba also said it aims to more than double its operating profit to 500 billion yen in the year to March 2014, from 240.3 billion yen in the year that ended in March 2011.
The company, whose products run the gamut from rice cookers to nuclear power plants last week announced it would buy unlisted Swiss smart-meter manufacturer Landis+Gyr for around $2.3 billion.
Smart grids are designed to accommodate a range of generation options, including renewables, and to provide customers and utilities with more real time information, enabling them to manage usage and supply more efficiently.
The company also announced on Monday an alliance with South Korean wind power firm Unison Co. The Japanese firm will buy some 3 billion yen in Unison convertible bonds as the first step of the deal.
It will raise its stake in the producer of wind power generation equipment to about 30 percent in about a year, the Nikkei reported.
Toshiba also said it plans to boost output at a lithium ion battery plant in Kashiwazaki, Niigata Prefecture, in anticipation of higher demand for use in smart-grid systems.
Shares of Toshiba closed up 2.1 percent, compared with a 0.2 percent rise in the benchmark Nikkei.