Fuji Electric : On the acquisition of a railway vehicle door opening and closing device manufacturer toward expanding railway vehicle business in North America

January 28, 2016 - Fuji Electric Co., Ltd. (TSE: 6504) ('FE'), headquartered in Tokyo, Japan, led by President Michihiro Kitazawa, the U.S. subsidiary Fuji Electric Corp. of America. reached an agreement to the effect that it takes over 51% of Canadian railway vehicle door opening and closing device manufacturer SEMEC Electromecanique Inc. (hereinafter, SEMEC). With this acquisition, we plan to expand the railway vehicle business in North America.

1. Background and previous initiatives
Currently, the railway vehicle markets are expanding in keeping with the rise in the global railway demand, and among these, the large scale North American market is expected to be at an annual average of 3.7% *1. In North America, growth is expected in the demand for replacements of urban railways in particular, and we anticipate that over the next five years we will replace an average of about 1,000 railway cars per year, out of the existing 13,000.
In the railway vehicle business, our company deals with the manufacture and sale of electrical equipment such as door opening and closing devices, propulsion (motors, inverters), auxiliary power units and the like, and in the focus area of the North American market, we have achieved results in delivering door opening and closing devices to the New York City Transit Authority, Metropolitan Washington D.C. Department of Transportation, Sonoma Marin Area Rail Transit District, and the like. In addition, we have supplied Washington subways with auxiliary power units.

*1: From the annual average expansion for the years 2011 ~ 2013 to the annual average expansion for the years 2017 ~ 2019 (UNIFE Report 2014)

Fuji Electric established a power electronics equipment factory in May 2015 in Virginia, and we launched production of auxiliary power supply devices for railways from January of this year. While leveraging engineering strengths such as SEMEC's sales channels and after-service, we will continue to provide door opening and closing devices, propulsion, auxiliary power supply devices, and other such products locally for North American and Japanese railway vehicle manufacturers.
In this way, we will strive to achieve sales of ten billion yen (four times the current figure) in the North American railway vehicle business in fiscal 2020.
Further, in addition to North America, Fuji Electric will devote attention to markets in Asia and Japan and aim for sales of 20 billion yen in fiscal 2020 for the railway vehicle business.

*2: With the obligation to use a certain percentage of parts produced in the U.S. (from New York) and local assembly

Fuji Electric Holdings Co. Ltd. issued this content on 28 January 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 28 January 2016 06:59:08 UTC

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