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Big in Japan? Hope at home for Toshiba's nuclear arm after U.S. debacle
2017年3月31日 / 早上8点48分 / 8 个月前

Big in Japan? Hope at home for Toshiba's nuclear arm after U.S. debacle

    * Toshiba has profitable domestic nuclear service business
    * Major supplier to nuclear utilities
    * Westinghouse bankruptcy could prompt mergers in Japan
    * Three players compete for nuclear business in Japan

    By Aaron Sheldrick
    TOKYO, March 31 (Reuters) - The bankruptcy of Westinghouse
Electric Co may be a blow to Toshiba Corp's         
international nuclear ambitions, but the Japanese conglomerate
still has a profitable business at home.
    Toshiba, whose businesses range from memory chips to rail,
is at the heart of Japan's atomic industry. While this has been
moribund since the 2011 Fukushima disaster, Japan still has
dozens of reactors that need to be maintained and supplied with
parts and fuel once operating.
    Toshiba is also involved in the Fukushima clean-up. The cost
of decommissioning the wrecked Fukushima Daiichi facility alone
is estimated by the Japanese government at 8 trillion yen ($71
billion). Some experts have predicted the process could take as
long as a century.
    All but three of Japan's 54 commercial nuclear reactors are
currently shut down. Twelve are set for decommissioning,
including the six at the Fukushima stations.
    Even idle, they need constant maintenance and supervision.
    For Toshiba, the main contractor or a major component
supplier to 20 of those reactors, that's a stable business, and
one of its most profitable in terms of return on sales. Fuel and
servicing make up the lion's share of the group's nuclear
    "They can come out of this (Westinghouse bankruptcy) with a
very healthy nuclear business in Japan," said George Borovas,
global head of nuclear at law firm Shearman & Sterling, noting
this would include servicing, maintenance and decommissioning.
    "Business lines such as nuclear fuel supply and services
have a significantly different risk profile to nuclear new build
projects," he added.
    Toshiba was undone by its push into construction through
Westinghouse, its U.S. nuclear arm that ran up billions of cost
overruns as two key U.S. projects were delayed by years to meet
growing safety demands post-Fukushima.             
    Global construction is expected to have lost money in the
2016 financial year, according to provisional forecasts by
Toshiba last month, but the Japanese nuclear power business is
forecast to see a return on sales of 8 percent for the year.
Toshiba aims to increase that to 10 percent by 2019.
    The Westinghouse collapse could also revive consolidation in
Japan's nuclear industry, which, unusually, includes two other
main suppliers - Mitsubishi Heavy Industries (MHI)          and
Hitachi         .
    At a fractious Toshiba shareholders meeting on Thursday,
Yoshimitsu Kobayashi, an external director who heads the group's
management nomination committee, said he wanted Toshiba, Hitachi
and MHI to eventually form a nuclear holding company.
    The three firms were in talks last year to merge their
nuclear fuel operations, but the process was delayed after the
Westinghouse troubles came to light.             
    "It would make sense. There's no point in having three
companies chasing a dying market in Japan," said Tom O'Sullivan,
founder of independent energy consultancy Mathyos Japan.
    Any move to consolidate, though, could come up against a
government that wants to keep its nuclear options open in the
aftermath of Fukushima, and, analysts note, the three companies
employ different technologies.
    A Hitachi spokesman said there are no discussions on merging
the companies' overall nuclear operations. He noted Hitachi's
nuclear business is profitable. It has forecast sales of 150
billion yen in the year ending Friday.
    MHI said it had no "specific plans to deepen" its nuclear
cooperation with Toshiba, highlighting its use of different
reactor technology. The company does not break out its nuclear
business and did not say if it makes money.
    Toshiba was the main contractor for three of the Fukushima
Daiichi units and supplied the reactor vessels to two others.
It's also the main contractor and equipment supplier on two
units of the nearby Fukushima Daini station, which may never be
restarted due to local opposition, and is lead contractor and
supplier on three reactors at the Kashiwazaki Kariwa nuclear
plant, the world's biggest.
    While servicing nuclear stations will continue to be
profitable, Toshiba's Senior Executive Vice President Yasuo
Naruke on Thursday offered a lament to angry shareholders.
    "The changes in the environment for the nuclear business,
including the Fukushima disaster, were the remote cause for the
Westinghouse writedown," he said.
($1 = 112.1100 yen)

 (Additional reporting by Makiko Yamazaki, Osamu Tsukimori and
Yuka Obayashi; Editing by Clara Ferreira Marques and Ian

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