Ac tion
Corporate Action Report 2018Year ended March 31, 2018

Let’s continue to pay carefulattention to our planet.
We are a team of engineers
contributing to a sustainable future.
The Mitsui E&S Group began operating as a shipbuilder 100 years ago.
Building ships, which safely traverse the oceans carrying lives andcargo, means confronting rough seas.
This requires an understanding of tides and weather, the calculation of

Actionwaves, and the seizing of winds.
These eﬀorts to understand our planet enable us to build reliable ships.
Since we began to construct social infrastructure and plants, we havecontinued our eﬀorts to understand the Earth, calculate the passage oftime, and thus build highly durable structures.
Having experienced construction projects in challenging environments
all over the world, we have cultivated the diverse capabilities needed toaddress the contemporary global issues.
Charting new courses, through unknown waters.
As an engineering team, we will continue to pay careful attention to ourplanet and contribute to creating a sustainable future by combining
resources in the three ﬁelds of Environment & Energy, Marine Logistics& Transportation, and Social & Industrial Infrastructure.
The Mitsui E&S Group has begun to take on the challenges that will
write its history for the next 100 years.

Corporate Action Report 201801

Special Feature

Actions for Creating a Sustainable Society

The wind power generation business of Mitsui E&S,
which has been involved in the construction andmanufacture of 234 wind turbines, has now begun ona full-scale basis -- with the trend of the times as a tail wind.

The steps we have taken to create wind power facilities
by changing our approach and accumulating expertise
2003-

2005-

2006-

2012-

Began the assembly ofwind power facilities aheadof other companies

Began to work on thedesign and production ofwind turbine towers as well

Also began to design andmanufacture gearboxes
ourselves

Focusing on the EPC*
business and experimenting
with oﬀshore wind power
generation

In 2003, we built a wind power
generation facility on the premisesof the Chiba Works in anticipationof the growth of renewableenergy. We assembled the facility
by taking advantage of ourtechnologies cultivated through theconstruction of steel bridges andiron frameworks of buildings.
Based on this experience, we
worked on the manufacture andassembly of 171 towers, thereby
accumulating expertise.

In 2005, in a project in Tottori
Prefecture, we internally designed
a tower supporting the windturbine for the ﬁrst time. This tower
is approximately 80 meters talland has a diameter of about 4
meters. We successfullycompleted the extremely diﬃcult
process of tapering the tower
while keeping its cross-section
perfectly round. Thereafter, we
worked on tower construction in
22 projects.

In 2005, we manufactured agearbox (speed-up gear), which
is mounted in nacelle, with agroup company. While working
on towers, main frames andgearboxes, we carried out the
installation of the overall facilities.
By taking advantage of both ourstrength in manufacturing and ourstrength in EPC in this way, we
continued to explore market needs
and study the businessenvironment.

We have all the resources required
for wind power generation within
the group, including electric power,machinery and civil engineeringresources. Taking advantage of
this, we have been focusing oureﬀorts on the EPC business, inwhich we have managed theentire process of multiple projects,
from upstream to downstream.
We will also make a foray into
oﬀshore wind power generation,
which is expected to increase in
the future.

While the shift to renewable energy has been accelerated, wind power is attracting a lot of attention.
In Japan, the Ministry of the Environment has set a 26% cut in greenhouse gas emissions by
FY 2030 compared to FY2013 as the target,
under which it is powerfully promoting the spread of wind power generation.
The Ministry of Economy, Trade and Industry forecasts a signiﬁcant increasein the amount of power generated from wind power.
Mitsui E&S has been involved in the construction of a total of 98 wind turbines* in 14 projects andthe manufacture of a total of 171 wind turbine towers. We have consolidated our technologies and expertise,
which we have accumulated internally, into a single department.
We will make further moves toward a sustainable society
where renewable energy will be utilized more eﬀectively.
*The total number for onshore and oﬀshore EPC, including those to be completed in 2019 and 2020

※ EPC:Engineering, Procurement, Construction）

Ac tion for
02

Corporate Action Report 2018

Creation of a Sustainable Society
Corporate Action Report 201803

Special Feature

Actions for Creating a Sustainable Society

Wind turbines that Mitsui E&S has worked on
are operating on the plains, in the mountains andoﬀshore as important energy resources of Japan.
A Tainai wind power plant,
Niigata Prefecture

B Mukaihama wind power plant
Akita Prefecture

C

Total

EPC in13*

projects*Including projects to be completed in 2019 and 2020

EPC in1*

project*ﬂoating oﬀshore wind power generation project

Nakadomari wind power plant

I

Aomori Prefecture

MJ Ichihara wind power plant
Chiba Prefecture

To be completed in 2019/ 2 turbines(3.4MW each)2014/ 10 turbines (2MW each)2018/ 3 turbines (2.5MW each)This is a full turn-key project, in which we workedon the entire process from design to procurement
and onsite installation work. The total output of
20,000kW is equivalent to the electric power
consumed by around 14,000 households.

This is a wind power plant with three turbineswith a maximum output of 2,495kW each
(7.49MW in total). It was constructed on land
adjacent to the Akita Mill of Nippon Paper
Industries Co., Ltd. We undertook the entire
process from the design and procurement ofwind turbines/substation equipment and otheritems to construction and test runs.

E

Wind Farm Hamada

Adjacent to Lake Jusan, a brackish water lake
located on the Tsugaru Peninsula in Aomori
Prefecture, Nakadomari is subject to strong winds
from the Tsugaru Channel. This makes it the ideal
location for wind power generation, and wind
power plants have been constructed in various
parts of this town. We are implementing thisproject by taking the harsh ground conditions
into account.

D

C
D

2004/ 1 turbine (1.5MW)

Wakami wind power plantThis wind turbine was installed on the premisesof the Chiba Works of Mitsui E&S as Japan’sﬁrst large-scale wind power generation facility
constructed in a shipyard. Taking full advantageof the location, we signiﬁcantly reduced the
problems related to the transportation of large
wind turbine parts.

B

A

Akita Prefecture

To be completed in 2019/ 7 turbines(3.4MW each)J

We are working on this project in part of a pieceof land with a range of wind power plants, which
is located in a scenic location adjacent toHachirogata, the largest intertidal ﬂat in Japan.
We are aiming to complete it in February 2019.

K
I

Submersible ﬂoating wind turbine oﬀ the coast
K of Fukushima

Shimane Prefecture

G

F

Fukushima Prefecture

L

E
N

M
H

J

2016/ 29 turbines (1.67MW each)
We installed 29 wind turbines with an output of
1,670kW each in Kanagi-cho and Yasaka-cho in
Hamada City, Shimane Prefecture. The total outputof this wind power plant will be 48,430kW(approx. 48MW). It is expected to generate
85,000MWh per year.

F

04

Hizen Minami wind power plant
Saga PrefectureG

Yura wind power plant
Wakayama Prefecture

H

Inami wind power plant
Wakayama Prefecture

Nyuzen Town oﬀshore wind power plant
Toyama Prefecture

To be completed in 2020/ 4 turbines (2MW each)2013/ 1 turbine (2.0MW)

Planned to be constructed on the eastern side of the beautiful
Toyama Bay, this wind power plant is expected to play a role asa new tourism resource. The turbines are designed to be robustin consideration of the recent natural disasters. We are also
aiming to make the power plant look elegant.

We undertook the design, production and installation of one downwind ﬂoating
oﬀshore wind turbine with an output of 2MW in the Fukushima Floating
Oﬀshore Wind Farm Demonstration Project Phase 1 by the Ministry of
Economy, Trade and Industry. We assembled the turbine at the Chiba Works andthen towed it oﬀshore to Onahama Port in Fukushima Prefecture, where it wastested and adjusted before being moored in the area as the demonstration site.

L

Kamogawa wind power plant
Chiba Prefecture

M

Atsumi wind power plant
Aichi Prefecture

N

Tahara S&W
Aichi Prefecture

2007/ 12 turbines (1.5MW each)2011/ 5 turbines (2MW each)2018/ 13 turbines (2MW each)2007/ 1 turbine (1.5MW)

2006/ 7 turbines (1.5MW each)2014/ 3 turbines (2MW each)This wind power plant was constructed in alocation with a beautiful view of Genkainada,
which is located in a coastal area of Hizen-machi
in Karatsu City, Saga Prefecture. The Hizen Minami
wind power plant (1,500kW x 12 turbines) began
operating about three years after the Hizen wind
power plant (1,500kW x 8 turbines).

We installed ﬁve wind turbines on the westernside of Ameshi-yama (Mt. Ameshi) at an altitudeof approximately 400 meters and achieved ageneration capacity of 9,950kW (1,990kW x 5
turbines). We adopted downwind wind turbines,
which are optimal for rough terrain such as
mountains and hills.

We installed 13 wind turbines with an output of
2,000kW each in an area of approximately 27.2
hectares. During the installation work, we gave
consideration to the natural environment of themountainous area. In designing and constructing
this wind power plant, we considered disaster
control and aimed for its harmonious co-existencewith the local community.

This project is rare in the country overall in thatthe site of a quarry is used for wind power
generation for infrastructure improvement. We
are striving to ensure the economic eﬃciencyof the work. For example, we designed theplant to take advantage of the current groundconditions.

The majestic view of the wind turbines, which
stand in a line at Cape Irago, attracts large
numbers of tourists. They are widely coveredby the media. For example, they were used in a
TV commercial of a local automobile company.

Combining a solar power plant (mega solar farm)and a wind power plant, Tahara S&W is one of
the largest hybrid power plants in Japan. It is also
used as a location for environmental education
by local educational institutions (elementary,junior high and high schools) of Tahara City.

Corporate Action Report 2018

Corporate Action Report 201805

Special Feature

Actions for Creating a Sustainable Society

In Japan, we have seas.
Wind turbines are being built in the sea of Toyama.
A bottom-mounted oﬀshore wind power project that we are
seeking to implement with a new construction method.

Point 01

Bottom-mounted oﬀshore wind power generation project oﬀ the coast of Nyuzen Town
Nyuzen Town oﬀshore wind power
generation project(Toyama Prefecture)
ManagerWind Power Group
Project Dept.1
Energy Solution Div.
Mitsui E&S Engineering Co., Ltd.

General Manager
Project Dept.1
Energy Solution Div.
Mitsui E&S Engineering Co., Ltd.

Keiji Fukasawa

Tamehisa Yamaguchi“Let’s develop a Japanese way on our own.”
And we got to thesmall-scale bottom-mounting method.
In Japan, the potential of onshore wind power is limited.
Accordingly, the promotion of oﬀshore wind power is essential
for ensuring that wind power generation spreads in this country.
However, the construction of large-scale oﬀshore wind farms
such as those in Europe did not make any progress because
there is no large specialized ship for installing wind turbines
oﬀshore in Japan. In this country, there are no oﬀshore wind
power plants that are fully privately funded. The introduction ofoﬀshore wind power generation would have only been delayed
unless we found a new method.
“We needed to develop a method that could be put into
practice immediately, instead of planning a large-scale
facility and spending a long time on negotiations,environmental assessments and experiments.” (Yamaguchi)
Accordingly, Yamaguchi and other staﬀ members invented thesmall-scale bottom-mounting method, with which wind turbines
are installed close to a ﬁshing port or harbor where the water is
not as deep. With this method, the foundation can be small, andthe barrier of the installation cost is lowered if the waves are
relatively gentle. Meanwhile, the salespeople began to prepare
to realize the project and look for a potential site together with awind power generation business operator.

“We have a salvage barge for port cranes.”
Development of a new construction methodthat uses a salvage barge with a fork
How could we install a wind turbine in a shallow water? Keiji
Fukazawa, the head of the Wind Power Generation Group at the
Project Department I, began to develop an installation work method
in August 2015. As a result of comparing various methods,
Fukazawa found that installation using a salvage barge with a fork
was the optimal method. This salvage barge is used for installing
port cranes. With the new method, an assembled wind turbine
is transported on the fork, while the wind turbine remains standing
and is unloaded accurately on the foundation. It is excellent in

06

Corporate Action Report 2018

Number of wind turbines to be installed:
2MW-class wind turbine x 4 Output: Around
7.5MW Installation site: Eastern side of themarine area oﬀ the coast of Nyuzen Town, Toyama
Prefecture Interconnection point: Nyuzen
Substation, Hokuriku Electric Power Company

For the project in Nyuzen Town, steel structure foundations, in which we havestrength, and small-scale, bottom-mounted facilities, which can be installed at a
relatively low cost for the work barge, have been selected. The installation work
will be carried out in a water area managed by the municipal government, which
minimizes the number of negotiation partners. Further, environmental assessmentby the national government, which would be necessary if the output were 7.5MW
or more, is not required, which signiﬁcantly shortens the period prior tocommercialization. We aim to begin operating the wind farm in January 2021.

Point 02
Nyuzen Town
Toyama City

terms of both workability and economic eﬃciency. This idea wascreated because Fukazawa used to work at the Oita Works, where
port cranes are manufactured. Fukazawa created a 1/30-size modeland conducted various shock analyses and tank tests at Akishima
Laboratories. He conﬁrmed that a little remodeling enables thesalvage barge for transporting cranes to be used for wind turbine
transportation.
“Having the experience of constructing oﬀshore structures,
including the caisson foundations of the Great Seto Bridge
and the Rainbow Bridge, we can do many things with ourinternal technologies. In addition, we hold regular informationexchange meetings called the Oﬀshore Wind Turbine Meetings
with engineers from Mitsui E&S Shipbuilding Co., Ltd. and
MODEC, Inc., which was also advantageous.” (Fukazawa)

Small-scale, bottom-mounted facilities

Establishment of an original construction methodthat uses a salvage barge with a fork

In the project, Mitsui E&S Engineering will apply a construction
method with which the wind turbine will be transported on a barge
with a fork while the wind turbine remains standing. The workbarge to be used in the project has been used for installing cranes
that load and unload containers in ports. We will remodel it for

use in the project, which will enable us to keep the cost signiﬁcantly
low. This method will also enable us to complete oﬀshore work,
which is easily aﬀected by weather and oﬀshore conditions,
within far fewer days, which will also reduce the cost.

Construction procedure

The salvage barge with a fork : “Tenyu”,
built by Mitsui E&S Shipbuilding (Tamano Shipyard)

1

The wind turbine assembled
onshore is loaded ona salvage barge with fork.

2

The wind turbine is towed
to the oﬀshore foundation.

3

The wind turbine is moved tothe position directly above thefoundation and installed there.

4

The wind turbine is integrated
with the oﬀshore foundation
by means of onsite welding.

Nyuzen Town in Toyama Prefecture wasselected as the site.
We are aiming to start operating the plant in 2021.
An operating company was established though joint investment
by Mitsui E&S and the wind power generation business operator.
It was decided that the facilities will be installed at Nyuzen Town
in Toyama Prefecture, which faces the Sea of Japan. Boring
exploration of the sea bed and negotiations with the municipal
government and local ﬁshermen’s union made steady progress.
As a result, it was ﬁnally determined that Japan’s ﬁrst privately
funded oﬀshore wind ﬁrm will be born in 2021.
“The municipal government expects that the wind turbines
standing in the Sea of Japan will also be a tourism
resource. We believe that it is sure to be an
instagrammable spot.” (A related person)
Tenyu, a 148.3-meter-long salvage barge built by Mitsui E&S
Shipbuilding Co., Ltd., was selected as the salvage barge with afork to be used for installing the turbines. The wind turbines willtravel about 40 kilometers along the coast on Tenyu, from a port
near the factory where they will be assembled. The wind turbinesthat are being transported will also attract attention. Members of
Mitsui E&S continue to take on challenges with the aim ofsucceeding in this project, which will signiﬁcantly advance wind
power generation in Japan.

Point 03

Together with the local community-- Participating in the businessIn this project, the Mitsui E&S Group will also participate in the business by investingin the company that will operate the power plant. In addition to constructing thewind power generation facilities, we are responsible for creating a mechanismthat can create value sustainably, such as establishing a system for collaboratingwith local companies and the municipal government and building a consensus
with the local ﬁshery people. We are also committed to PR activities with people
from the town oﬃce, with the aim of making the four seaside wind turbines atourism resource of the town.

General Manager Shigeru Tokumaru of the Environment and Energy
Department, Mitsui E&S Engineering Co., Ltd., shaking hands with
Mayor Haruhito Sasajima of Nyuzen Town, Toyama Prefecture.

Corporate Action Report 201807

About Mitsui E&S Group

Contents

MessageSpecial Feature

02 07

02 Actions for Creating a Sustainable Society

20 Mitsui E&S Group 2025 Vision

Evolving into
an engineering teamthat creates social value
over the next 100 years

24 Highlights

30 Ocean Development

President/Representative Director & CEO

28 Ship

34 Engineering

About Mitsui E&S Group

09 23
09 Message

18 Business Field

14 History

22 Mid-term Business Plan 201712 Our Foundation
16 Group Structure

Performance

24 37

26 Business Segment Overview

32 Machinery

36 Research & Development

Management

38 41

38 Directors / Corporate Auditors
39 Corporate Governance
41 Communication

Sustainability

42 51

42 Environmental Preservation
44 Human Assets

46 Work Environment

48 Social Contributions

52 Company ProﬁleReview of FY2018 (the year ended March 2018)
Editing Policy

Coverage of the report

Under our Company Philosophy of “To continue our role as a trusted company, andas a trusted member of society” we at Mitsui E&S Holdings Co., Ltd. uphold our
corporate philosophy as we strive to be a company that uses manufacturing tocontribute to social development and preserve the global environment. We view allactions related to achieving this goal as collective approach towards the creation of
corporate value.
The Corporate Action Report is a comprehensive summary of all the activities that
we carried out in the ﬁscal year, covering management strategies, vital strategies,
and the business status, as well as environment conservation activities and oursocial contribution initiatives. It is designed to provide stakeholders with greater
insight into company operations.

▶ This report covers the period from April 2017 to March 2018.
(However, some sections include information for April 2018 and thereafter.)Websitepages

Inquiries

08▶ Overall corporate activities https://www.mes.co.jp/▶ Financial information https://www.mes.co.jp/investor/▶ Non-ﬁnancial information https://www.mes.co.jp/company/

Corporate Planning DivisionCorporate Action Report 2018

▶ Issued in: October 2018

Guidelines used as reference○Ministry of the Environment, Environmental Reporting Guidelines○GRI, Sustainability Reporting Guidelines Version 4○ISO 26000

Disclaimers
This report contains plans and forecasts that were current as of the date of publication,
as well as descriptions about our future business activities based on our management
plans. Please note that this information is based on the currently available information,and the actual contents of our business activities may diﬀer from the contents of thisreport due to future circumstances or the environment, or due to unanticipated events
that may occur after the publication of this report.

Please use contact form via website.
www.mes.co.jp

The ﬁscal year ended March 2018 was a year of signiﬁcant change for the group. The MES Group,
which was established in 1917, took the milestone of the 100th anniversary as an opportunity to shift
to a holding company structure and took a new step as Mitsui E&S Holdings Co., Ltd.
While initiatives for innovation that we have continued from the previous mid-term business plan (MBP14)
made steady progress, our overall business performance for the ﬁscal year under review (the year ended
March 2018) was weak, and we faced extremely unfavorable results. Consequently, we had no choice
but to decide to refrain from making dividend payouts, which we view seriously. I hereby extend mydeepest apologies to our stakeholders for the signiﬁcant inconvenience.
The greatest factor for the decline in our operating income is the posting of losses, which is associatedin part with additional expenses generated in the construction of a chemical plant in North America.
Reﬂecting on this, we have reviewed our strategy for receiving orders and have decided to refrain fromaccepting orders for local construction work in overseas countries. Moving forward, we will establish
a system under which we identify the quality (diﬃculty level) and quantity (order size) of each projectand prevent unforeseen problems under the control of Mitsui E&S Holdings Co., Ltd.
Corporate Action Report 201809

About Mitsui E&S GroupMoving forward, we will continue to promote structural reforms to establish a structure that will enable
us to make maximum use of the internal resources of the group, one that will permit us to makeconcentrated investment in growth ﬁelds, and one that will allow us to improve the mobility andcompetitiveness of each business.

For sustainable growth
All the businesses of the Mitsui E&S Group, including marine logistics that use ships, the developmentof ocean resources and the renewable energy business, have a signiﬁcant inﬂuence on the global
environment. Many of the UN Sustainable Development Goals (SDGs) are related to our businesses.
We must think about how to contribute to creating a sustainable future through businesses.
I believe that the creation of a sustainable future starts from human resources development. We willdevelop human resources who are healthy both physically and mentally, receive training while working,and thereby improve themselves as humans. These human resources will create products that areGroup Management Committee

valuable for society, and this will be the beginning of a sustainable society.
In FY2018, I had numerous opportunities to learn our history, including the 100th anniversary eventand the creation of our 100-year history book. Our history shows that we have been taking on challenges

Shift to a holding company structure
The Mitsui E&S Group is working on a range of reforms for achieving the Mitsui E&S Group 2025 Vision,a long-term vision towards 2025 as the target year. We have positioned the Mid-Term Business Plan
2017 (MBP17) as the ﬁrst step toward achieving the long-term vision and are working on fundamental
structural reforms with the aim of ensuring that we achieve our ideal vision, that is, “Maximize MESGroup strengths collectively to improve proﬁtability and stabilize earnings.” One of these reforms is theand implementing reforms ever since our foundation. I was made aware that it is thanks to our
Mitsui E&S Group2025 Vision
Our long-term vision is
introduced on pages 20 and 21of this report.

predecessors, who began to design and build a system that would survive 100 years at the time of our
foundation, that we have been able to survive after 100 years of challenges and reforms. In the early days
following its foundation, our company created a company town by establishing a school and a hospital,
and thereby built a system for securing and developing human resources in a sustainable manner.

shift to a holding company structure.

Mid-Term Business Plan 2017
(MBP17)

We position FY2018, when we celebrated our 100th anniversary, as the year for making a fresh start“How should we continue growing and secure stable proﬁts?” The shift to a holding company structure

MBP17 is introduced on pages
22 and 23.

initiatives for developing human resources. In April 2018, for example, we established a department ofis one of my answers to this question.
the Engineering business were succeeded to Mitsui E&S Shipbuilding Co., Ltd., Mitsui E&S Machinery

New Operating Companies

Co., Ltd. and Mitsui E&S Engineering Co., Ltd., respectively, in the form of an absorption-type company

New Operating Companies are
introduced on pages 16 and 17,
29, 33, and 35 respectively.

to Mitsui E&S Holdings Co., Ltd. Mitsui E&S Holdings formulates and implements group-wide strategies,
such as the selection and consolidation of businesses, while each operating company understands the
direction of the overall group and then formulates its own strategies and takes prompt measures for
improving its competitiveness with collaborations in sight, with the aim of achieving the evolution
needed to adapt to the new environment ahead of others.

machinery at a commercial high school in Tamano City, Okayama Prefecture, where we are working on
the development of engineering human resources. We have also established a crane production baseEﬀective April 1, 2018, the Ship & Ocean Project business, the Machinery & Systems business andsplit. At the same time, we changed our trade name from Mitsui Engineering & Shipbuilding Co., Ltd.

for the next 100 years. Learning from the wisdom of our predecessors, we have begun to take new

in Indonesia, where we will contribute to developing local human resources.

Initiatives for developing
human resources
Our initiatives for humanresources development isintroduced on page45.

We aim to be a corporate group that creates social value in the next 100 years, just as we continued
working as a company trusted by society and individuals in the past 100 years. To achieve this goal,
we will keep taking on challenges while continuing to advance reforms without compromise. I would

Mitsui E&S Holdings Co., Ltd.

like to ask our stakeholders to continue supporting us with a medium- and long-term perspective and

The Group structure is shownon pages 16 and 17.

provide us with further assistance and encouragement.

We are still at the stage where we have just ﬁnished drawing the framework. However, we can alreadysee some signs of changes. In April 2018, we established the Group Management Committee as aforum for deliberating on the management strategy of the overall group on a quarterly basis to determine
the policy. MODEC, Inc. and Burmeister & Wain Scandinavian Contractor A/S of Denmark, groupcompanies that account for a large proportion of the group’s business results, have also joined thiscommittee, where members discuss group management strategies in the true sense of the word.
How should group companies share their business plans, deepen their knowledge, and produce synergyof their respective products, technologies and services? I feel that we have set the stage for achieving“Maximize MES Group strengths collectively,” which constitutes an essential task for achieving MBP17

The Mitsui E&S Group has
begun to walk the path ofevolution towards the future.

together with “Reinforced business foundation.”
I am also seeing a good response to the employee awareness reform. At the Management Committee,
operating companies have begun to make proposals that clearly reﬂect their intentions, and to haveheated discussions. I feel that this reﬂects the fact that their sense of ownership, with which they feel
obliged to do things on their own, has grown stronger. Further, many executive employees have anawareness of cash ﬂow, which I hope will lead to the formulation and implementation of solidmanagement strategies.

10

Corporate Action Report 2018

Corporate Action Report 201811

About Mitsui E&S Group

Our Foundation

Businesses of Mitsui E&S are supported byour philosophy, people, technologies,
and the network that we have cultivated.

実績

Company Philosophy

To continue our role as a trusted company, and as a trusted member of society
Ship

Business scale

Marine diesel engines

Total number of shipsthat we have built

2,000

¥

Net sales（FY2018）

703.2

ships

Domestic market
share

Accumlated production

6,500
1million

No.1

No.1

engineshorse power

Ordinary income

billionDomestic market
share

Container cranes for ports

3.1

billionNumber of employees (As of March 31, 2018)

13,421peoplePetrochemical plants

After-sales services

The total number of plants
we have handed over inmore than 40 countries

35

件

in

1,300

service bases

20

countries

Repair shipyard

Wind power generation

MES-KHI YURA DOCK

Construction /manufacture

One ofthe largest
dry dock in Japan

234

units

100
th

Number of Group companies

More than100

FPSO* business

Power generation plants

Small-sized gas carriers

Established in

MODEC, Inc.

TGE Marine Gas Engineering GmbH1917

One of the
top two companies
in the world

Burmeister & Wain Scandinavian Contractor A/S
We have handed over

184 plants
in 54 countries

World-classengineering company*Floating production storage and oﬄoading system

12

Corporate Action Report 2018

Corporate Action Report 201813

About Mitsui E&S Group

History

Our 100-year history, throughout which we havecontinued changing in response to the needs of the times.
We are now moving on to the next stage.

1917 -Origin

With the mission for modernizing.
Leading Japan's shipbuilding
industry since our founding
Taking on challenges forthe modernization of Japan
This was the beginning of our history as one
of Japan’s leading shipbuilding companies.

Established as
the Shipbuilding
Division of former
Mitsui & Co., Ltd.
‘‘Because Japan isa seafaring nation,
it is natural thatthe nation should befounded on shipping.’’
In 1917, Teijiro Kawamura,
who was the General
Manager of the Ship
Division of former Mitsui& Co. at the time, wasacutely aware of the needto have a shipyard and a
repair factory andsubmitted a petition to thepresident. The Mitsui E&S
Group commenced fromhis passion.

Introduction of technologies on
marine diesel engines
In 1926, we concluded a technical licensing
agreement with Burmeister & Wain A/S(B&W) of Denmark to manufacture and sellmarine diesel engines. In 1928, we completed
the ﬁrst Mitsui-B&W diesel engine.

Entry into the onshore sector
In the 1930s, we built rayon plants andmanufactured various devices and steel pipes.
This became the foundation for our subse-quent entry into the ﬁelds of chemicalindustrial equipment and steel structures.

Spin-oﬀ as an independentcompany and change of the name to
Mitsui Engineering & Shipbuilding
In 1937, the Shipbuilding Division was spunoﬀ from Mitsui & Co., Ltd. to become Tama
Shipyard Co., Ltd., taking its ﬁrst step as anindependent company consisting of ﬁve
organizations: the Headquarters, Kobe SalesOﬃce, hospital, General Aﬀairs Department,
and Engineering Department.

Tama Shipyard (1952)

Corporate Action Report 2018

Expand business domains.
Evolving into a comprehensive
heavy manufacturer
Entry to the ﬁeld ofplant construction
We were involved in the plant construction
for Mitsui Petrochemical Industries Ltd.,
which was established in 1955. This was
our ﬁrst step toward the business of
petrochemical plant construction, which
we subsequently launched.

In 1924, we built Akagisan Maru, Japan’s ﬁrst ship witha diesel engine.

Teijiro Kawamura

14

1950 --

2017 --

2000 --The Mitsui E&S Group gets started
toward the next 100 years.

Aiming to respond to globalization
and achieve sustainable growth
Strengthening energy-saving,environmentally friendly technologies

Shift into holding company structure andchanged its name to "Mitsui E&S Holdings"

A “neo series” eco-friendly bulk carrier with low power consumption

Listing of MODEC, Inc.

Launch of steel structure business

In July 2003, MODEC Inc. was listed on the Tokyo Stock
Exchange for the ﬁrst time as a subsidiary of Mitsui
E&S Group. On June 1, 2004, the company’s stocklisting was upgraded to the First Section of the Tokyo
Stock Exchange, and the company has continued tomake rapid progress today.

In 1961, we concluded a technical licensing
agreement with PACECO., Inc. of the UnitedStates. We thus began to promote thespread of containerization and delivered
many port cranes at home and abroad.

Expansion of rotating machine businessIn the 1960s, we entered the centrifugal
compressor and reciprocating compressor
sector by introducing advanced technologies
from Europe. We continued to produce
technological innovations and worked on
axial compressors, steam turbines, andsimilar equipment.

In April 2018, we took a new step by reorganizing into aholding company structure and changing our name from
the Mitsui Engineering & Shipbuilding Group to the
Mitsui E&S Holdings.
Reorganizing the Ship & Ocean Project segment, theMachinery & Systems segment and the Engineering
segment, into operating companies under the holding
company structure to make a fresh start.

Established Mitsui E&S group logo markAccumulated production of diesel engines
reaches 100 million horsepower

Izumiotsu Bridge (1976)

Entry into the crane industry

As we marked our 100th Anniversary on November
2017, we take this opportunity to promote further
structural reform.

In response to the rising demand for environmentallyfriendly ships and energy-saving ships, we developednext-generation environmentally friendly ships with low
fuel consumption. We also began to develop othereco-friendly products, such as marine diesel enginesthat conform to international emission regulations.

No.1 ethylene plant for Iwakuni Works of Mitsui
Petrochemical Industries Ltd. (1958)

We established the production system inthe steel structure sector. Having started
with the construction of road bridges fromsmall and midsize bridges, we became acompany that was able to receive orders forlarge bridges from Japan Highway Public
Corporation and other clients.

100th anniversary

MODEC, Inc.’s stock listing was upgraded to the First Section in 2004.

Formulation of
the Mitsui E&S Group 2025 Vision
In 2016, we developed a long-term vision that shows
our future vision, direction, and ideal situation. We havedeﬁned our ideal situation as “The Mitsui E&S Group will
evolve into an engineering team that creates social
value,” describing a company that provides value in
response to social issues and market needs in a waythat transcends the existing framework of ideas.

Mitsui E&S GroupIn June 2018, Mitsui E&S Machinery has achieved
accumulated Mitsui-MAN B&W diesel engines
production of 100 million horsepower with a single
engine model. The production record achieved 50
million horsepower in October 2005 (77 years and 4
months since the ﬁrst engine). And another 50 million
horsepower has been added on it with only 12 years
and 8 months. In the total 90 years since the ﬁrst
engine manufactured in 1928, accumulated productionof 100 million horsepower has been achieved.

Vision
100 million horse power achieved by Mitsui-MAN B&W diesel engine“11S90ME-C10.5”

Corporate Action Report 201815

About Mitsui E&S Group

Group Structure

While improving the ﬂexibility of each group company,
building a structure for maximizing
the group’s strength collectively
Major groupcompanies

Holding company

Mitsui E&S Holdings will strive to strengthen collaboration amongindividual operating companies and with other companies in the Group.
Mitsui E&S Holdings will also work to develop management plans
and strategies for the overall Group to concentrate its management
resources on the three business domains deﬁned as growth areasin the Group’s long-term vision, with a view to increasing its corporate
value and growth potential and securing stable proﬁtability.

Mitsui E&S Shipbuilding Co., Ltd.

MODEC, Inc.

Mitsui E&S Machinery Co., Ltd.

Burmeister & Wain Scandinavian Contractor A/S

Mitsui E&S Engineering Co., Ltd.

Showa Aircraft Industry Co., Ltd.

Mitsui E&S Business Service Co., Ltd.

Kaji Technology Corporation

Mitsui E&S Systems Research Inc.

Mitsui E&S Asia Pte. Ltd.

MES Facilities Co., Ltd.

Mitsui E&S (China) Co., Ltd.

Major operating companies

Main products
Commercial Ships

We are building state-of-the-art vessels such as
bulk carriers, oil tankers, LNG carriers, naval vessels
for the Ministry of Defense and patrol vessels for
the Japan Coast Guard. We are actively working on
ocean resources development through developmentof the next generation Hull Platform for FPSO andmarine equipment such as underwater vehicles.

Naval and Governmental Ships

Underwater equipment

Transfer crane in container yard

Industrial machine

Wind Power Generation

Biomass power plant

Main group companies
MES-KHI Yura Dock Co., Ltd.
Akishima Laboratories (Mitsui Zosen) Inc.
M.E.S Tokki Co., Ltd.
MES Shipping Co., Ltd.
Shikoku Dockyard Co., Ltd.
Niigata Shipbuilding & Repair, Inc.
TGE Marine Gas Engineering GmbH

Main products
Marine diesel engine

We design and manufacture products that will
become the heart of industries and logistics, suchas container cranes for yards, from various industrial
machines including marine diesel engines andreciprocating compressors. In the social infrastructure
ﬁeld, we contribute to the development of social
infrastructure and creation of comfortable cities bytechnologies such as bridges and marine structures.

Main group companies
Mitsui E&S Power Systems Inc.
Mitsui Meehanite Metal Co., Ltd.
Sanzo Manufacturing & Construction Co., Ltd.
Mitsui E&S Steel Structures Engineering Co., Ltd.
Mitsui E&S Technical Research Co., Ltd.
DPS Bridge Works Co., Ltd.
Azuma Machinery Co., Ltd.
Paceco Corp.
PT.MES Machinery Indonesia

CSSC-MES Diesel Co., Ltd.
MES Ferrotec China Co., Ltd.
Mitsuizosen Technoservice Hongkong Ltd.
Mitsuizosen Technoservice Taiwan Co., Ltd.
MES Technoservice Middle East W.L.L.
MES Technoservice Machinery
Construction Logistics, Industry andTrade Corporation

Main products
Chemical plant

We conduct EPC business for various types of plantfacilities in Japan and overseas. We emphasize fourglobal megatrends <climate change, environmental
protection, energy and resource struggle,
demographic change> and operate compositely EPC
business, power generation business, investment
business and its peripheral service business in awide range of related ﬁelds.

16

Corporate Action Report 2018

Main group companies
Mitsui E&S Plant Engineering Inc.
Mitsui E&S Environment Engineering Corporation
Sanzo Yuki Recycle K.K.
Hamamatsu Green Wave Co., Ltd.
Green Power Ichihara Co., Ltd.
Betsukai Biogas Power Co., Ltd.
DASH Engineering Philippines,Inc.
Engineers and Constructors International,Inc.

Corporate Action Report 201817

About Mitsui E&S Group

Business Field

Providing solutions with our technologies for
global issues that need our strength

Examples of comprehensive solutions provided by
maximizing the group’s strength collectively

In this domain, we will contribute to a sustainable future
for the Earth by creating renewable energy andparticipating in the development of ocean resources.

Environment &EnergyWe will further concentrate and strengthen our know-how and resources toenhance the development of diverse forms of energy by creating renewableenergies such as wind power, biogas and biomass power plants, while participatingin the ocean resource development sector by constructing ﬂoating production,
storage, and oﬄoading (FPSO) systems for oﬀshore oil and gas production.

Main
products

Ocean development and submersible equipment
Environmental plants
Renewable energy
Power generation plants

As a professional with expertise in every aspect of the
supply chain, we will achieve even greater innovation in
the ﬁeld of marine logistics and transportation.

Marine Logistics &Transportation

As a marine logistics professional with expertise in every aspect of the global
supply chain, from shipbuilding to the provision of products such as container
cranes and services such as engine control by IT and container terminal
management, we will achieve even greater innovation.

Main
products

Transfer crane in container yard
Marine diesel engine
Ships

We will contribute to creating a safe and comfortable living
environment by providing plant facilities and public
transportation infrastructure vital to the development ofdeveloping countries, as well as maintenance services requiredfor infrastructure in Japan and other advanced economies.

Social & Industrial
Infrastructure

We construct social infrastructure such as bridges and power plants and chemicalplants in developing countries and provide our maintenance technologies as ameasure against aging infrastructure in Japan. We will provide new solutions byfusing multiple product technologies of the Group and pursuing active collaboration
with external partners.
Main
products

Infrastructure maintenanceChemical plants
National defense

BridgesIndustrial machinery

Supplying electrical power generated by ﬂoating oﬀshore power stations
that can travel anywhere in the world
Provision of ﬂoating gas power generation systems
At Mitsui E&S, we have developed and manufacture ﬂoating
mobile power plants (power generation barges), which areequipped with diesel engines and power generators, together
with Burmeister & Wain Scandinavian Contractor A/S (BWSC),
our subsidiary in Denmark. We thus contribute to stable power
supply in regions where it is diﬃcult to procure materials or
secure labor locally, or where a power grid has yet to be
developed.
Power generation barge

Providing one-stop solutions for natural gas transportation needs
Provision of consistent solutions from the upstream to the downstream processes ofnatural gas transportation projects
Working together with our subsidiary TGE Marine Gas Engineering
GmbH (TGE), a German gas carrier engineering company, we areaiding the development of the small and midsize gas carrier market.
We will enter the upstream processes of gas carrier construction
by acquiring expertise from TGE, which has worked on a large
number of Engineering, Procurement, and Construction Supervision(EPCS) projects, including the development of small and midsize
gas carriers, demand for which is expected to increase in the
future.

Small and midsize LNG carriers

Evolving into a general hospital that protects the social infrastructure
Provision of one-stop services from investigation and diagnosis
to repairs, replacement, and renewal
In 2015, we established the Infrastructure Business Department(present Infrastructure Business Div. of Mitsui E&S Machinery)
to consolidate our resources that are dispersed across the Group.
We will provide one-stop services ranging from investigation anddiagnosis of social infrastructure to their repair, replacement, andrenewal by integrating resources and cooperating with both internaland external parties. We provide services by taking advantage ofthe fact that we have technologies and experience in both ironand concrete within the Group, which is our strength.
Hybrid inspection vehicle

18

Corporate Action Report 2018

Corporate Action Report 201819

About Mitsui E&S Group

Mitsui E&S Group 2025 Vision

We are an engineering teamthat creates social value to realize a better society.

Key Strategy and Common Policies
To achieve our Ideal Situation, we established a Key Strategy that divides our administrative workﬂow into three stages.
Marketing &sales

Planning & productdevelopment

DesignProcurement

Manufacturing& construction

Operation and maintenance

The Mitsui E&S Group 2025 Vision outlines the Mitsui E&S Group’s long-term direction for the period
between ﬁscal 2017 and ﬁscal 2026. To achieve the Mitsui E&S Group company philosophy of “To continue
working as a company trusted by society and individuals through our products and services,” we outlined
the direction of our future initiatives based on an evaluation of our rapidly changing external environment.

Ideal Situation of the Mitsui E&S GroupAn engineering team that creates social value

Key Strategy 01

Key Strategy 02

Key Strategy 03

Increasing the added
value of products
and services

Reforming the structureof manufacturing & EPC*

Expandingand enhancing
related services*EPC:Engineering, Procurement, and Construction

Common policies

Realizing a better society

Promoting cooperationand collaborations

Enhancing technology
development

Promoting globalization

Focusing Our Strengths

Quantitative Target

Achieving net sales of ¥1.1 trillion
and ordinary income rate of 6% in FY2026 (Year ending March 31, 2026)

Environment &EnergySocial &Industrial
Infrastructure

MarineLogistics &Transportation

Percentage by business domain
Other

7.0

Solution
6.0

Engineering team that creates social value
Diverse products
and services

Engineering
prowess

Connections withcustomers andpartner corporations

Commitment tomanufacturing
and engineering

Net sales ordinary income ratio (%)

Mitsui E&S Group

5.0

4.0

We will aim to improveand stabilize our income ratio
by reforming our business portfolio.
【Key Strategy 01】
Increasing added value for products and services【Key Strategy 02】
Reforming the structure of manufacturing& EPC (engineering, procurement, and construction)【Key Strategy 03】
Expanding and enhancing related services

20

Corporate Action Report 2018

Fiscal 2026

6.0 %1.1 trillion yen

Marine logistics& transportation

25%

Environment& energy

50%

5%

Fiscal
2006

Ship andocean equipment

16 %Chemical andpower plants

20 %

1.0

Social problems
and needs

20%

Other

3.0

2.0

5%

Social & industrial
infrastructure

Marine resource development

Fiscal2016

37%

Machinery

22%

0
6,000

8,000
10,000Net sales (100 million yen)

12,000Size of circle: Ordinary income(2015 : expected 2016 February)
Corporate Action Report 201821

About Mitsui E&S Group

Mid-term Business Plan 2017

Our key strategy is to improve proﬁtability.
We are working on various innovations to achieve our goal.

Our Action Initiatives of FY 2018

The Mid-Term Business Plan 2017 will be followed by the Mid-Term Business Plan 2020 and the Mid-Term

To separate group management and business management withthe clear deﬁnition of each organization, function, role and responsibility● Reinforced business foundation

Shifting to a holding company system

Our Action
Business Plan 2023. This series of our medium-term business plans constitute a long-term strategy forachieving our 2025 Vision. Under the vision of “Maximize Mitsui E&S Group strengths collectively to improve

Plan & executegroup strategy

proﬁtability and stabilize earnings,” we will make best use of the Mitsui E&S Group’s network and resources,

Shareholders’ Meeting

Mitsui E&S Holdings Co.,Ltd.

Mitsui E&S Holdings Co.,Ltd.

in our eﬀorts to achieve stable earnings and improve our corporate value.

Monitoring & Overseeing Function

01

Key strategy

02

Reforming structureof manufacturing& EPC*

Expanding &enhancingancillary services

Building a dynamic, ﬂexible production system○ Enhancing the system for production in optimal overseas locations/building a global production base
○ Improving the productivity of domestic bases by applying IoT and robotics

Establishing a system for ﬂexible EPC○ Promoting collaboration within the Group in the ﬁeld of ocean business○ Strengthening cooperation within the Group in the ﬁeld of renewable energy/gas power generation

Enhancing domains and areas of services we provide○ Enhancing after-sales services○ Expanding FPSO charter business, power generation business, and other businesses
that result in constant proﬁts based on medium- or long-term contracts

Evolving services by applying IoT○ Enhancing maintenance and services based on remote monitoring○ Provision of preventive maintenance services(remaining life assessment and suggestion of optimal maintenance)

Marine Logistics &Transportation

03○ Enhancing technology and product development in view of the future market(energy-saving/ labor-saving/ environmental performance)○ Strengthening technologies for increasing the competitiveness of our core products

Organization and human resources○ Strategic use of Group companies (clarifying the positions of operating companies and subsidiaries)○ Eﬀective utilization of human resources in the Group (increasing the mobility of human resources)

Financial aﬀairs○ Maximizing consolidated earnings of the Group

Reinforced
business foundation

Common strategies○ Improving the risk management capability (elimination of excessive loss)○ Selection and concentration of businesses based on growth potential and investment eﬀect

Organization and human resources○ Building and implementing a human resources rotation program (other departments/ subsidiaries)*EPC:Engineering, Procurement, and Construction

22

Corporate Action Report 2018

Social & Industrial
Infrastructure

Common policies

Robustgroup management

Board ofDirectors

Business Execution Function
Chief Executive Ofﬁcer(CEO)Auditing
Department

HD
Management
Meeting

Group
Management
Committee

Board ofCorporate
Auditors

Accounting
Auditors

Group Internal Control
Special Crisis Control Committee
Group Compliance Committee
Total Risk Management &Internal Control Committee
IT Control Task Force● Group synergy○ Formulating a strategy for creating value for society based on the three domains○ Increasing our competitiveness in the service domain by strengthening
intra-group cooperation and alliances with other companies

Improving our product development capability

Personnel Advisory
Committee

Subsidiary directly under holding company

Environment & Energy

Improving added
value of products& services

Compensation
Advisory Committee

subsidiary subsidiary subsidiary4%

Improving our planning ability and capability of making proposals

Other subsidiary

Ordinary income rate

¥270 billion or less

Kaji Technology Corporation

Interest-bearing debt

Showa Aircraft Industry Co.,Ltd.

¥37 billion

Burmeister & Wain
︵ BWSC︶
Scandinavian Contractor A/S

Ordinary income

6.5%

MODEC, Inc.

ROIC

Mitsui E&S Business Service Co.,Ltd.

¥920 billion

Mitsui E&S Engineering Co.,Ltd.

Net sales

Mitsui E&S Machinery Co.,Ltd.

Maximize Mitsui E&S Group strengths collectively to
improve proﬁtability and stabilize earnings

Mitsui E&S Shipbuilding Co.,Ltd.

Plan & executebusinessstrategy

Our Ideal Future by 2020 (Year ending March 31, 2020)

Numerical targets

To establish "Group Management Committee" to discuss and makedecisions on the management strategy of the entire group

Core technology ofgroup companies

Alliances with companies
inside & outside of the group

EPC / O&M know-how
in domestic andoverseas plants

Expand collaboration with
Mitsui E&S Engineering,
BWSC, MAN Energy Solutions*

Participate in O&M project at
renewable energy & power sector

Know-how on
oﬀshore power generation,
Gas technology

Build value chain with strengths of
BWSC,
TGE Marine Gas Engineering GmbH（TGE）,
MAN Energy Solutions*

Participate in new power
generation domain

Hydrate related technology,
Comprehensive technicalcapabilities of marine structures

Participate in national projects withsubsea drilling companies,
resource energy companies etc.

Create new ocean projects
in sub-sea

Alliances with other company's
shipbuilding domain

Promote collaboration for
construction of merchant ships

Acceleration of collaboration between
Mitsui E&S Shipbuilding and TGE

Expand engineering businessin shipbuilding ﬁeld

Environmental technology,
Production technology,
Gas technology

Enhance collaboration between
Kaji Technology Corporation,
Mitsui E&S Shipbuilding and TGE

Provide total solutions
for gas fuel engines

Remote operation & automatic
operation technology,
Terminal control technology

Cooperation withdomestic terminals andoverseas mega terminals

Constructionof automated terminal

Ship model development capacity,
Proposal and development
capacity of special ship,
Production technology

Build a supply chain withcompanies inside &outside of the group

Promote LSS businessfor special ships

Comprehensive engineering
capability,
Ship development capability,
Gas technology

Repair andreinforcement technology,
radar exploration technology

Enhance cooperation with PC /steel bridge manufacturers &inspection companies among group
Developed composite search vehicle,
combined with laser measurement
technology of other companies

Our Action

Started biomass power generation business

Completed detailed design of 60-150 MW
gas power generation barge

Conﬁrmed the feasibility of surface type
Methane Hydrate (MH) recovery

Started negotiations for business alliance

Received orders for engineering businessStarted sales of high pressure pump for FGSS

Received orders for automated cranes

Received orders for new construction &repair works of special ships

Increase maintenance business
Received orders for construction works on
replacing slabs of highways*alliance partner

Corporate Action Report 201823

Performance

Highlights(JPY million)

Financial Results
New Orders Received

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

1,107,750

959,784

609,621516,577

1,160,662

Net Sales

670,067

816,520805,413

731,464

703,216

Operating Income

19,96913,298

11,813

8,304△ 5,224

Ordinary Income

26,17914,89915,07814,8593,061

Net Income*1

42,854

9,463

7,599

12,194△ 10,137

Cash Flow

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

14,49915,16729,802△ 7,843△ 3,555

Investing Cash Flow (Loss)△ 37,312△ 32,385△ 34,599△ 28,753△ 9,046

Free Cash Flow

△ 22,813△ 17,218△ 4,797△ 36,596△ 12,601

Financing Cash Flow (Loss)

15,531△ 4,374

48,216

19,401△ 14,813

Cash and Cash Equivalents

111,926

94,664

135,747

115,620

86,311

Operating Cash Flow

Financial Position

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018 (For year ended March 31, 2018)
New order by segment (JPY 100 million)

Engineering

1,278

Machinery

1,869

323,608347,305

343,853367,608

356,837

Total Assets

932,896

1,074,563

1,094,042

1,096,735

1,029,222

Interest-bearing Debt *2

187,831

188,313239,871

265,175

255,276

FY 2015

FY 2016

FY 2017

51.80

11.63

9.40

15.09

△ 125.4

BPS (Net Assets per Share)

266.64292.86290.48309.782,958.83

Dividends per Share

2.0

2.0

4.0

3.0

Share Price at the year end

218

205

168

172

FY 2014

FY 2015

FY 2016

FY 2017

1,730

23.6

22.0

21.5

22.8

23.2

ROE (Return of Equity) (%)

21.6

4.1

3.2

5.0

△ 4.1

D/E Ratio

0.9

0.8

1.0

1.1

1.1

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

7,009(JPY 100 million)

Ship

1,125

Ocean
Development

1,912

1,817

200

113

100

12,055

12,291

12,705

13,171

13,4210

Total Energy Consumption

1,175

1,265

1,300

1,305

1,395

-100

CO 2 Emission

6.90

8.14

8.13

8.20

8.60

Corporate Action Report 2018

Ocean
Development

Operating Income (JPY 100 million)

Employees (Consolidated)*1 Proﬁt(losses) attributable to owners of parent*2 Excluding lease liabilities*3 The Company consolidated shares on the basis of one new common share for every 10 common shares with an eﬀective date of October 1, 2017. Share price shown in 2018 is ofafter the consolidation.

24

1,069

FY 2018

Shareholders' Equity to Total Assets (%)

Non ﬁnancial Information

7,032
Machinery

Ship

1,804

FY 2018*3

EPS (Net Income per Share)

Key Financial Indicator

374

OthersEngineering
FY 2014

11,607

Sales by segment

FY 2018

Net Assets

Per Share Information

381

Others

-200

114
29

△153
Ship

Ocean
Development△155
MachineryEngineering

OthersCorporate Action Report 201825

Performance

Business Segment Overview
FY 2018(Year ended March 31, 2018) (JPY 100 million)

Main Products

Net Sales
Composition

Net Sales

Operating
Income

16.0%

1,125

△153

27.3%

1,912

113

25.8%

1,817

114

25.7%

1,804

△155

5.2%

374

29

● Bulk carrier

Ship● Oil tanker● LNG carrier● Research vessel / Training vessel● Fishery patrol vessel● High-speed vessel● Naval ship / Patrol ship
● Submersible

Ocean
Development● Floating production storage and oﬄoading system (FPSO)● Marine diesel engine

Machinery● Gas turbine and gas engine

co-generation system● Process compressor● Top pressure recovery turbine (TRT)

generating system● Transtainer(Transfer Crane in Container Yard)● Container Terminal

Management System (CTMS)● Industrial Crane● Bridge● Reactor / Heat exchanger● Floating piers and pontoon● Rotary dryer / Coal moisture controller● Radar scanner● Portainer (Quayside Container Crane)● Manipulator● Petro-chemical plant● Inorganic chemical plant

Engineering● Biomass power plant● Biogas power plant● Wind power facility● Overseas power plantengineering & construction● Environmental facility● Diesel engine generating plant

Others26

Corporate Action Report 2018

● Real Estate Development● System Development

Corporate Action Report 201827

Performance

Business Segment Overview

Our Action Initiatives for innovation
Our Action

Ship

Improving design and development capabilities and cost competitivenessthrough a system for collaborations

Conclusion of a business cooperation agreement with TSUNEISHI
Shipbuilding in the commercial ship business area
On May 7, 2018, we signed a business cooperation agreement with TSUNEISHI Shipbuilding
Co., Ltd. in the commercial ship business area. The purpose of the partnership agreement
is to attain the continuous growth of the shipbuilding business through collaboration
between the two companies in improving the design and development capabilities andcost competitiveness, and thereby receiving more orders, while maintaining their respective
management independence.

Our Action

The global shipping industry has continued to experience a stateof excess capacity attributed to the completion of numerous new
shipbuilding construction projects, which continued until the year
before last. In particular, business negotiations over new
shipbuilding construction projects remained in a slump in the dry
bulk division because of the low levels of charter freight, whichcaused us to struggle during the year. On the other hand, however,it has begun to be felt that the market has hit the bottom, andcharter freight has begun to show a slight recovery trend. The
number of inquiries for new shipbuilding construction projects
began to increase in the latter half of the ﬁscal year.
In the ﬁeld of gas carriers, while the progress of the LNG export
project has been delayed and business negotiations over the new
construction of large LNG carriers have been in a slump, we areseeing multiple projects on medium- and small-sized LNG carriers,
mainly for regional transportation.
In the ﬁeld of ocean development, development projects in Brazil,
which had been postponed due in part to political reasons, havebegun to be implemented, and the establishment of ﬂoatingproduction storage and oﬄoading systems (FPSO/ FSO), which
are to be devoted to the projects, has been activated. We therefore
expect the business environment to remain steady.
In the midst of these conditions, the Mitsui E&S Group will continue
to undertake activities for receiving orders for bulk carriers thatincorporate energy-saving and environment-friendly technologies

Net sales (JPY 100 million / FY)

Operating income (JPY 100 million / FY)

2,000

2,000

200

1,000

0

1,069 1,100
677

2015

2016

2017

(Actual)28

and other products with the aim of establishing a position on
medium- and small-sized gas carriers. In addition, for FPSO, themajority of which are remodeled used tankers, we will strive toachieve the "noah" concept for newly-built FPSO hulls, underwhich we will promptly supply highly-durable new ship hulls that
we have developed, in our eﬀorts to establish an ocean brand.
In the ﬁeld of national defense and security, the increase in naval
ships and ships intended for public oﬃces and the growth of
replacement demand for these ships are expected due to thesecurity environment, which has been growing tougher. We will
strive to win orders by taking advantage of the high level of
shipbuilding technologies of the Mitsui E&S Group.
Orders received increased by 39.235 billion yen (+57.9%) comparedto the previous ﬁscal year, to 106.947 billion yen, reﬂecting
additional orders for eight medium- and small-sized bulk carriers,
which we received despite the sluggish market, and orders received
for ships intended for public oﬃces including naval ships for the
Ministry of Defense. Net sales were almost as planned, down
14.217 billion yen (-11.2%) from the previous ﬁscal year, to 112.472
billion yen. Operating loss increased 5.57 billion yen from theprevious ﬁscal year, to 15.260 billion yen, partly reﬂecting an
increase in provision for losses on construction contracts overgeneral commercial ships in addition to an increase in costs forbuilding some ships, which oﬀset the completion of all ocean
support vessel projects that had been the major cause of losses.

New orders (JPY 100 million / FY)

1,091

Corporate Action Report 2018

1,145

1,288 1,267

1,000

100

1,125

900

0

11

-100

2018

2019
(Forecast)

0

-98

-200
2015

Development of a safe, eﬃcient transportation system with information technologies

Development of Technological Concept of Autonomous Marine
Transportation System

Business environment and performance

1,521

Left: Vice President Yasunori Kobatake of TSUNEISHI
Shipbuilding Co., Ltd. Right: President Tetsuro Koga of
Mitsui E&S Shipbuilding Co., Ltd.

2016

2017

(Actual)

2018

2019
(Forecast)

-186
2015

2016

2017

(Actual)

-153
2018

-90
2019
(Forecast)Development of Technological Concept of Autonomous Marine Transportation System, aproject that Mitsui E&S Shipbuilding proposes as the leader of the research consortium,
has been selected as one of the research projects under the 2017 Transportation
Technology Development Promotion Program of the Ministry of Land, Infrastructure,
Transport and Tourism.
In the project, the consortium will develop a technological concept of highly autonomous
ships and create a roadmap for the development of technologies that will be needed to realize
these ships. The consortium will therefore aim to achieve a safe, eﬃcient marine transportsystem by utilizing technologies for the automatic and autonomous operation of ships.

Our Action

Autonomous marine transportation system

Reinforcing the system for building special ships

Orders received consecutively for multiple ships intended for
public oﬃces, including a ﬁsheries inspection vessel for Japan
Fisheries Agency
In March 2018, we consecutively delivered Chiyoda, a submarine rescue vessel intended
for the Ministry of Defense, and Nagasaki-maru, a ﬁshery training ship for Nagasaki
University. Moving forward, we will further reinforce our system for building special ships(naval ships and ships intended for public oﬃces) to increase the number of such ships
we build.

Chiyoda, a submarine rescue vessel

Message Message from the president of a new operating company
Our predecessor, Mitsui Engineering & Shipbuilding Co., Ltd., celebrated its 100th anniversary in
November 2017. As the name implies, shipbuilding is our founding business, and the 100th anniversaryof Mitsui Engineering & Shipbuilding is also the 100th anniversary of its shipbuilding business.
While the global situation continues changing rapidly, we are facing a wider range of maritime issues,
including those related to logistics, resources, the environment, and safety and security. We willsurvive through this era of changes by applying our shipbuilding technologies, which we haveaccumulated over 100 years, with capacity to execute strategy quickly that we have achieved throughstructural reforms. The Mitsui E&S Group has a number of aﬃliated companies that operate in a wide
range of categories, including technology research, ship repair and gas engineering. We will harness
our overall strengths to build the Mitsui brand, to provide core technologies and services that arealways a step ahead, to meet the expectations of our customers, to enhance value, and to contributeto people and society.

Tetsuro Koga, President
Mitsui E&S Shipbuilding Co., Ltd.

Corporate Action Report 201829

Performance

Business Segment Overview

Our Action Initiatives for innovation

Ocean
Development

Our Action

Expanding the revenue base by receiving orders for large-scale projects consecutively

Orders received from Petrobras for supply of two FPSOs for developmentof pre-salt oil ﬁelds oﬀshore Brazil, Sépia and Mero ﬁelds
MODEC, Inc. (MODEC) received two consecutive orders for supply and time charter (lease andoperations) of the Floating Production, Storage and Oﬄoading system (FPSO) from Petróleo
Brasileiro S.A. (Petrobras), the national oil company of the Federative Republic of Brazil. These two
FPSOs are among the largest in Brazil, each with an oil production capacity of 180,000 barrels perday. Brazil is one of the most important markets for MODEC. At present, around 30% of crude oil
production in this country is produced via ten FPSOs and one FSO that are operated by MODEC.
We expect that the orders for large-scale projects that were received consecutively from Petrobras
in 2017 will enable us to expand our revenue base further from the next ﬁscal year onward.

Our Action

An FPSO of MODEC Group for Petrobras thatbegan time charter service at Tartaruga
Verde/Mestiça ﬁeld oﬀshore Brazil in June 2018

Promoting the FLNG projects that attract attention in the oﬀshore oil and gas industry

SOFEC, Inc., a MODEC Group company, receives an order for alarge mooring system for Africa’s ﬁrst FLNG

Business environment and performance
Concerning crude oil prices, the concern over excess supply eased,
due in part to the continuation of the reduction of joint production
by major oil producing countries. West Texas Intermediate (WTI)
continued to recover until the end of 2017, and remained at morethan 60 US dollars per barrel. Oil companies are expected tocontinue the development of oﬀshore oil ﬁelds and gas ﬁelds fromthe viewpoint of a sustainable supply of energy resources.
Accordingly, the FPSO business is expected to grow stably inthe medium and long term.
In the midst of these conditions, the Mitsui E&S Group is making
concerted eﬀorts to strengthen collaborations, including entry by
the engineering department to Engineering, Procurement andConstruction (EPC) as the topside of FPSO, in accordance withthe policy of “Maximize Mitsui E&S Group strengths collectively
to improve proﬁtability and stabilize earnings” that was set under
the Mid-Term Business Plan 2017.
Orders received increased 608.220 billion yen (+656.1%) year
on year, to 700.924 billion yen, partly reﬂecting two new orders
received for large-scale charter projects and orders for speciﬁcation
changes and operation services for existing projects. Net sales
declined 37.237 billion yen (-16.3%) year on year, to 191.182 billion
yen, due in part to a decrease in the progress of FPSO construction.
Operating income declined 6.574 billion yen (-36.7%) from theprevious ﬁscal year, to 11.321 billion yen.

SOFEC, Inc., a U.S.-based subsidiary of MODEC, received an order for a project to supply a large
mooring system for Africa’s ﬁrst Floating LNG Production Unit (FLNG). The FLNG is an oﬀshore
plant that will be deployed in the Coral gas ﬁeld oﬀshore the Republic of Mozambique, which is
being developed by Coral FLNG SA, in which the Eni group and other entities have stakes. It willbe the world’s ﬁrst FLNG project for a deep water gas ﬁeld at water depth 2,000 m or more.
FLNG projects attract attention in the oﬀshore oil and gas industry. Currently, there are four such
FLNG projects for which ﬁnal investment decisions have been made, and SOFEC has received
orders for large mooring systems for FLNG in three of the projects.

Our Action

Large Internal Turret (a single-point mooring
system) that will be mounted inside hull of the
FLNG, for which an order was received

Contributing to the further reinforcement of the Japan-Ghana relationship andthe development of medical research

Supporting infection research in the Republic of Ghana
In May 2018, T.E.N. Ghana MV25 B.V. (MV25), an aﬃliate of MODEC that provides a time charter
service of FPSO in the Republic of Ghana, donated 250,000 US dollars to Tokyo Medical and Dental
University (TMDU) for infection research being conducted by TMDU at the Noguchi Memorial
Institute for Medical Research (NMIMR), University of Ghana. Not only by providing charter service
of FPSOs, also by providing monetary donations via MV25 to research conducted at NMIMR, which
serves as a bridge between Japan and Ghana in terms of medical research, MODEC will contributeto the further reinforcement of the relationship between the two countries and the developmentof medical research.

FPSO Prof. John Evans Atta Mills, which was
supplied by MODEC, and by which MV25
provides the time charter service

Message
New orders (JPY 100 million / FY)

Net sales (JPY 100 million / FY)

Operating income (JPY 100 million / FY)

7,009
4,000〜
6,000

6,000
4,000

3,958

0

4,000
1,888

2,000

2016

2017

(Actual)30

Corporate Action Report 2018

200
3,773

2,950

2,000

927
2015

6,000

2018

2019
(Forecast)

0

2015

2016

2,284

1,912 2,200

2017

2018

(Actual)2019(Forecast)

100

179

120

113

86
54

0

2015

2016

2017

(Actual)

2018

2019

(Forecast)With core businesses of engineering, procurement, construction, installation, leasing, andoperations service of ﬂoating oﬀshore oil and gas production systems, including FPSOs, FSOs
and TLPs, MODEC, Inc. (MODEC) provides comprehensive and competitive solutions related tooﬀshore oil and gas development projects for oil companies all over the world. The oﬀshore energy
business, the focus of MODEC, is one of the most signiﬁcant advantages in the Mitsui E&S Group
that is extremely unique among major heavy industry groups. The Mitsui E&S Group possesses
extensive experience and excellent technologies accumulated through its engineering andconstruction of ships and machinery, and its overseas Group companies have attractive businessmodels for power generation and the engineering of LNG tanks. MODEC seeks to enhance its
corporate value by integrating these strengths with its oﬀshore energy business.
In 2018, MODEC marked the 50th anniversary of its founding. We will continue to meet the
expectations of society with conﬁdence and pride in the fact that we have been specializing in theoﬀshore business since 1968, when the oﬀshore oil and gas industry itself was still emerging,
and we have had a broad range of experiences and have now evolved into an industry-leading entity.

Toshiro Miyazaki
President & Chief Executive Oﬃcer
MODEC, Inc.
Corporate Action Report 201831

Performance

Business Segment Overview

Our Action Initiatives for innovation
Our Action

Machinery

Providing a new product portfolio with comprehensive cooperation agreements

Expansion of cooperation with MAN Energy Solutions SE
In May 2017, Mitsui E&S concluded a comprehensive cooperation agreement with MAN
Energy Solutions SE (MAN-ES; formerly known as MAN Diesel & Turbo SE) to strengthen
our cooperative relationship further. The two companies can look back at almost a century
of successful cooperation in low-speed marine diesel engines, which is our core business.
Further, we have also built a good cooperative relationship with them in recent years inﬁelds such as medium- and low-speed diesel engines for onshore power plants. With thisagreement, we will not only consolidate these cooperative eﬀorts but also extend to otherbusiness ﬁelds such as the steam turbines and compressors.

Our Action

Business environment and performanceWith regard to marine diesel engines, we secured suﬃcient work
volume, although the environment for receiving new orders has
been tough because the demand-supply gap of shipping ﬂeet's
tonnage has yet to be eliminated. The production volume was 146
engines/3,770,000 horsepower, reﬂecting an increase in the
production ratio of large engines. It is expected to be around3,880,000 horsepower in the next ﬁscal year. In addition, it was
decided that a commercial machine of the large, low-speed
marine diesel engine, which is equipped with an Exhaust Gas
Recirculation (EGR) system to conform to the IMO NOx (Nitrogen
Oxides) Tire III regulation and which will be adopted as well aslast year. Regarding industrial machinery, the environment forreceiving new orders has remained tough, although crude oil
prices have been rising gradually and inquiries for reciprocating
compressors, which are petroleum reﬁnery equipment, havebeen increasing. On the other hand, we have received orders foraxial compressors and top pressure recovery turbines from steel
plants in Japan, and we are currently focusing our eﬀorts on
projects for India, where demand is strong.
Orders received for cranes increased signiﬁcantly from theprevious ﬁscal year, especially reﬂecting the strong demand inSoutheast Asia and large projects for Vietnam. Because thedemand is expected to remain strong, we have established asubsidiary that manufactures container cranes in Indonesia, which
is close to the areas where the products are in demand. We havethus reduced not only the manufacturing costs but also thetransportation costs in our eﬀorts to improve our competitiveness.

New orders (JPY 100 million / FY)
2,000

2,036
1,722 1,668

1,869

1,700

In social infrastructure, both orders received and net sales
increased signiﬁcantly from the previous ﬁscal year, due in partto an order received for an elevated bridge for Sri Lanka and orders
received for projects in Japan, including ones regarding large steel
structures (immersed tunnel elements) and the restoration ofbridges that were damaged in the 2016 Kumamoto Earthquake.
We will continue to focus our eﬀorts on this ﬁeld because theratio of maintenance projects, such as the renewal work of
expressways (replacement of the ﬂoor slabs), is increasing among
projects in Japan at present.
Concerning the LSS Service which has mainly after-sales services(Life-cycle Solution Service and Customer Oriented Service), orders
received and net sales increased from the previous ﬁscal year.
The reasons are as follows. (1) The shipping market is moderate
recovery trend. (2) After-sales services (relocation, dismantlementand demolition work) have increased, associated with an increasein new crane installations. (3)Various renovation works haveincreased for stable operation.
Orders received increased by 20.041 billion yen (+12.0%) year on
year, to 186.870 billion yen. This was due in part to the increasein orders received for marine diesel engines, container cranes,
bridges, port structures, various industrial machinery, and aftersales services. Thanks to these products and businesses, net sales
increased by 6.886 billion yen (+3.9%) year on year, to 181.733
billion yen. Operating income declined by 3.377 billion yen(-22.9%) year on year, to 11.394 billion yen.

Net sales (JPY 100 million / FY)

Operating income (JPY 100 million / FY)

2,000

2,000

1,817 1,800
1,671 1,717 1,748

138
1,000

1,000

0

2015

2016

2017

(Actual)32

Corporate Action Report 2018

2018

2019
(Forecast)

0

1,000

2015

2016

2017

(Actual)

2018

2019
(Forecast)

0

148

114

107

70

2015

2016

2017

(Actual)

2018

2019

(Forecast)

Further strengthening and expansion of our crane businessby establishing overseas production base

Establishment of a production base for container handling cranes
in Indonesia
In October 2017, we established PT. MES Machinery Indonesia (=MMI), a subsidiary inIndonesia that produces container handling cranes, to strengthen and expand our cranebusiness further. In 2015, we increased the production capacity of the Portainer by our Oita
Works, from 22 units to 36 units annually. However, we decided to establish the subsidiary
in Indonesia after determining that the further expansion of the production capacity isrequired to respond to strong demand, and to hedge exchange risks. The production capacityof MMI is planned to be 4 Portainer cranes and 30 Transtainer cranes annually.

Our Action

PT. MES Machinery Indonesia

Providing advanced after-sales service

Conclusion of the group’s ﬁrst long-term, 20-year maintenancecontract for marine main engines
In September 2017, MES Technoservice Co., Ltd., which is merged into Mitsui E&S
Machinery in April, 2018, concluded a 20-year contract with MOL LNG Transport (Europe)
Ltd. (MOL LNG) for the long-term maintenance of Mitsui MAN B&W marine diesel engines
managed by MOL LNG, and began to provide services under the contract. CMAXS e-GICSX
is also planned to be installed on the four target vessels. This will permit real-time abnormality
diagnosis on the vessel as well as main engine performance status diagnosis on land,
which is undertaken automatically by utilizing big data, allowing for the early detection of
main engine abnormalities and the prevention of serious accidents.

LNG carrier

Message Message from the president of a new operating company
Mitsui E&S Machinery Co., Ltd. is developing marine diesel engines, various types of industrial
machinery, social infrastructure facilities such as container cranes and bridges, and after-sales servicing
of products. We seek to propose and provide services so that customers can use its products
throughout their life cycle more economically and with a sense of security.
We are also responding actively to globalization and technical innovations, which are currently
proceeding at a rapid pace. We are moving forward with many actions , including the start of overseas
production of cranes, an early approach with eco-friendly duel fuel marine diesel engines including
the world's ﬁrst methanol- and ethane-operated two-stroke diesel engine, preventive maintenancesystems for diesel engines, compressors for hydrogen refueling stations, automated container cranes
and terminals, and the maintenance business of bridges and roads. With our motto, "Think from thecustomer’s perspective and take actions with a sense of speed," we will provide more reliable, more
economical and eco-friendly products and services.

Ryoichi Oka, President
Mitsui E&S Machinery Co., Ltd.

Corporate Action Report 201833

Performance

Business Segment Overview

Our Action Initiatives for innovation
Our Action

Engineering

Being proactive in promoting businesses operated by using renewable energy

Completion of Mukaihama wind power plant
In January 2018, we completed and delivered the Mukaihama wind power plant, which isoperated at the Mukaihama district in Akita City, Akita Prefecture by Nippon Paper Venti
Wind Power Co. Ltd., a joint venture between Venti Japan Inc. and Nippon Paper Industries
Co., Ltd. We undertook the process from design, procurement of wind turbines, substationequipment and other items, and construction, to test run and adjustment. Starting withthis project, we will aim to win even more orders in Akita Prefecture, which is a leading
prefecture in Japan in wind power generation.

Mukaihama wind power plant

Launch of a biomass power plant project in Ichihara City, Chiba
Prefecture

Business environment and performance
In the environmental energy ﬁeld, we began to construct the
Ichihara Biomass Power Plant (Ichihara City, Chiba Prefecture) in
September 2017 in the biomass power generation business of
the Mitsui E&S Group. While the purchase price under the
Feed-in-Tariﬀ (FIT) Scheme for electricity generated from renewableenergy sources has been declining, we will continue to expand
our biomass power generation business by collaborating with
Burmeister & Wain Scandinavian Contractor A/S, which is a groupcompany. In the wind power generation business, we will launchbottom-mounted oﬀshore wind power generation onto the market,
in addition to the onshore wind power generation as our mainstay,in our eﬀorts to win more orders.
In the ﬁeld of overseas infrastructure, new investment plans tend
to be delayed, although the chronic shortage of the electric power
is an urgent issue in Southeast Asia. In the midst of these
conditions, we are proceeding with civil and architectural works
for coal ﬁred power plants in two projects in Indonesia and one

project in Vietnam, for which we have already received orders.
In the petrochemical plant ﬁeld, the Mitsui E&S Group refrained
from receiving orders for large-scale overseas EPC projects,
reﬂecting the revision of our sales strategy, although both theoverseas and domestic markets are on a recovery trend due tothe recovery of crude oil prices.
Orders received declined 22.053 billion yen (-14.7%) year on year,
to 127.840 billion yen, despite orders received for a biomass power
plant and other projects. Net sales increased by 17.783 billion yen(+10.9%) from the previous ﬁscal year, to 180.381 billion yen, due
in part to progress made in the construction of a petrochemicalplant and civil engineering work for a power plant. Operating loss
decreased 1.787 billion yen year on year, to 15.545 billion yen,partly reﬂecting the completion of plant construction projects
implemented by consolidated subsidiaries, which had beenmatters of concern.

In September 2017, ITOCHU Corporation, Osaka Gas Co., Ltd., and Mitsui Engineering &Shipbuilding Co., Ltd. (MES) decided to construct a biomass power plant on the premisesof the Chiba Works of MES and established Ichihara Biomass Power Co., Ltd., a company
operating the project, through joint investment. Each of the companies brings its strengths
to this project. MES (now known as Mitsui E&S Engineering Co., Ltd.) will provide its
construction and its operation and maintenance capabilities, ITOCHU will procure thebiomass fuel supply, and Osaka Gas will operate the power plant.

Our Action

Plannedconstruction site

Planned construction site on the premises of Chiba Works

Providing industrial infrastructure that is essential for the development of society

Completion of a cracker for an ethylene plant of Exxon Mobil
Corporation of the United States
In March 2018, we completed the construction of a cracker for an ethylene plant of Exxon
Mobil Corporation in Texas, the United States. We had received the order for the construction
from the company in October 2013. For this project, we formed a consortium with Heurtey
Petrochem S.A. of France, and the project was implemented by using the U.S. subsidiaries
of both companies. It was the second joint delivery of a cracker to Exxon Mobil Corporation
following the delivery of a cracker in 2012 for the company’s ethylene plant in Singapore,
which is one of the largest in the world.

The completed cracker for the ethylene plant

Message Message from the president of a new operating company
New orders (JPY 100 million / FY)

Net sales (JPY 100 million / FY)

Operating income (JPY 100 million / FY)

2,000

2,000

200

1,824
1,499
1,009

1,000

0

2015

2016

2017

Corporate Action Report 2018

2018

2019
(Forecast)

0

800

0
-100
-200

2015

2016

2017

(Actual)

2018

83

100

1,296
1,000

(Actual)34

1,278 1,200

1,713 1,626 1,804

2019(Forecast)

-30
-106
2015

2016

-173

-155

2017

2018

(Actual)2019(Forecast)

Mitsui E&S Engineering Co., Ltd. has been pursuing engineering operations in a range of ﬁelds
within the scope of EPC (engineering, procurement and construction) in Japan and overseas for the
past 80 years, since the days of the former Mitsui Engineering & Shipbuilding Co., Ltd.
Social needs in the future will be increasingly diverse and complex globally, given an increase inenergy consumption, the diversiﬁcation of energy sources, the practical use of non-conventionalenergy, growing demands for infrastructure and industrial facilities, and expanding demand for theenvironmental protection.
Under such circumstance, the Company will meet the expectations of its customers in the threeareas of business which the Company is now operating (the environmental energy businesscentered on renewal energy such as biomass, wind power and solar power, the infrastructure businesscentered on the civil and architectural works of overseas power generation facilities, and the plantbusiness centered on petrochemical and inorganic chemical plants) and new businesses by utilizing
the technologies and expertise which the Company has been cultivating for many years together with
its comprehensive engineering strengths, including that of its subsidiaries in Japan and overseas.

Takuya Aramaki, President
Mitsui E&S Engineering Co., Ltd.

Corporate Action Report 201835

Performance

Business Segment Overview
Maritime, Port and Aviation Technology. These activities are aimed at achieving asafe, secure, eﬃcient marine transportation system by introducing technologies
for automatic and autonomous ship operations.
In the ﬁeld of two-stroke marine diesel engines, we developed the high-pressure
EGR that meets the current IMO Tire III emission regulation for NOx (Nitrogen
Oxides). We also launched dual fuel engines (ME-GI) with liqueﬁed natural gas (LNG)
and the same types of engines with ethane (ME-GIE) and methanol (ME-LGIM). A
dual fuel engine with liqueﬁed petroleum gas (ME-LGIP) is now under development.
Those engines can comply with SOx (sulfur oxides) emission regulations. The
high-pressure LNG pump for fuel gas supply to ME-GI engines is introduced for LNG
fueled ships.

Research & Development
We will contribute to enhancing
the competitiveness of
the Mitsui E&S Group’s coreproducts with technologies fordesign and manufacturing innovations.
Akira Nishihata

Our Action

Director, CTO* and in charge of Technical Co-ordination Dept.
and Auditing Dept.
*CTO:Chief Technology Oﬃcer

Research and development
To achieve the Mitsui E&S Group 2025 Vision, we make development eﬀorts aimed at enhancing product competitiveness and expanding
our businesses in the domains of Environment & Energy, Marine Logistics & Transportation, and Social & Industrial Infrastructure.

Our Action

An engine for large ships equipped with high-pressure
EGR

Initiatives in the Social & Industrial Infrastructure domain

We are developing a radar inspection system for the maintenance of transportation
infrastructure such as tunnels and roads, and also technologies for large-scale repairof bridges. In the ﬁeld of industrial machinery, we are working on development of
a new co-generation system with natural gas, which improves the energy eﬃciencyof power generation and can spread distributed power supplies. The technologies
of IoT are being introduced to increase the productivity in our factories and tooperate machine tools eﬃciently.

Initiatives in the Environment & Energy domain
Tunnel Lining Scanning Car "Tunnel Catcher 3"

In the ﬁeld of ocean development and submersibles, we are developing a newly
constructed ﬂoating production storage and oﬄoading system (noah-FPSO)
vessel for marine oil and gas, which will make it possible to respond to requests
for delivery in a short turnaround period, and autonomous ship operation technologies.
We are deepening the development eﬀorts with the aim of putting them into
practical use. We are implementing a joint research project in Team KUROSHIO, ateam of eight organizations including the University of Tokyo, for the development
concerning ultra-wide area high-speed seabed mapping. This project is now in its
second year. Team KUROSHIO is the only team from Japan that has passed
Round 1 and advanced to the ﬁnal round in the international competition of mapping
technologies (XPRIZE). We are also working on the development of a methane
hydrate production system under the seabed. In the ﬁeld of renewable energy, weare developing facilities including bottom-mounted oﬀshore wind power
generation facilities. In environmental plants, we are developing fermentation
technologies environmental plants, we are developing fermentation technologies
which are compatible with diverse materials, for the purpose of expanding thescope of application of biogas power generation technologies. We have also
developed a facility that generates power by using unused waste heat frommedium- and small-sized waste incinerators.

Our Action

Joint research project advanced to the ﬁnal round in theinternational competition of ultra-wide area high-speed
seabed mapping (XPRIZE).

Initiatives in the Marine Logistics & Transportation domain

In the ﬁeld of port cranes, developments of quay cranes and container yard cranes
with remote and automatic control are being made. In addition, container terminal
automation systems are also being developed.
In merchant ships, we are developing new neo-series merchant ships, we aredeveloping new neo-series ships, or next-generation, environmentally friendly
ships that reduce CO 2 emissions. We are also developing a route
recommendation system that considers weather and sea conditions and services
including those of analyzing the propulsive performance of ships on commercial
voyages, using ship-land communication technology. In addition, we areproceeding with joint R&D activities for developing the technological concept of anautonomous ship with six organizations including the National Institute of36Intellectual properties

Corporate Action Report 2018

Container terminal automation system

The basics of initiatives for intellectual property lie in securing
competitive advantages for our businesses through the acquisitionof intellectual property rights and the use of them. The R&D and IP
Sect. and operational companies work together to promote thecreation of intellectual property rights, such as inventions achieved
through the development of products and technologies and trademarks
aﬃxed to our products, and the acquisition of rights over the properties
and the use of them. The Legal Department, R&D and IP Sect., andrelated departments also work together to handle contracts anddisputes with other companies regarding intellectual properties.
The intellectual property strategy cannot exist on its own, but must
be implemented in an integrated manner with the business strategy
and technological development strategy, forming a trinity of strategies.
While we are apt to feel that the rights are acquired as a result of
achievements in technological development, we must fully consider
how to acquire, protect, and apply technologies when we startdeveloping a business or product. At Mitsui E&S, we always try to
formulate and implement intellectual property strategy in this way.
In addition, in Japanese corporate society, where there is a tendency
to avoid patent disputes, we have started to see a trend towards
actively exercising intellectual property rights. This is believed to be
the result of the great impact made by the progress of globalization.
At the same time, however, it also reﬂects the fact that people arestarting to have a greater awareness of how to use these rights togain proﬁts. The importance of patent search and analysis, which aim
to avoid infringing upon other companies’ rights and exercise theintellectual property rights owned by Mitsui E&S, have been increasing,
and we are taking measures to improve our capacity to conduct
searches.

The number of patents(Number of patents)

1,500
1,237

1,300

1,206

1,237

2016

2017

1,071

1,000

500

0

2014

2015

2018 (FY)The amount of R&D expenses(Million yen)

7,000
6,000
5,000

5,094 4,858 5,006

4,614 4,568

4,000
3,000
2,000
1,000
0

2014

2015

2016

2017

2018 (FY)Corporate Action Report 201837

Management

Corporate GovernanceCorporate governanceDirectors / Corporate Auditors

1. Basic philosophy

President andRepresentative Director

Vice President andRepresentative Director

Takao Tanaka

Takaki Yamamoto

Director

Director

Shinsuke Minoda

Akira Nishihata

Director

Director

Director (Outside)

Director (Outside)

Yuichi Shiomi

Yuji Kozai

Toru Tokuhisa

Toshikazu Tanaka

Based on its Company Philosophy, Business Policy, and Management
Policy, Mitsui E&S aims to ensure its sustainable growth and further
improve its medium- and long-term corporate value. It recognizes
the importance of the social nature of a company and takes into
account the global environment, working to ensure that all of its
stakeholders ﬁnd the company beneﬁcial to society. To this end,
we have established a system for making fair and transparent
decisions promptly and boldly, under which we continuously strive
to enhance our corporate governance.
<Company Philosophy>
To continue our role as a trusted company, and as a trusted
member of society<Business Policy>
To fulﬁll expectations and foster trust in people and society as amanufacturing company that oﬀers products and services
representing the culmination of our global business experienceand years of advanced technology development in a wide range
of ﬁelds<Management policy>
Build further satisfaction for our customers

Provide safe and eﬀective workplace environment for employees
Contribute to the development of society
Pursue proﬁt for the longevity of the company
In accordance with the preceding basic philosophy concerning
corporate governance, we will try to enhance our corporate
governance based on the following basic policies.
(1) We ensure the substantive rights and equality of ourshareholders.
(2) We collaborate appropriately with our shareholders andother stakeholders.
(3) We ensure the appropriate, voluntary disclosure of ourcorporate information and transparency.
(4) We clarify the roles and responsibilities of our Board of
Directors, Corporate Auditors, and Board of Corporate Auditors.
(5) We hold dialogue with our shareholders to help support oursustainable growth and improve medium- and long-term
corporate value.

2. Structure

Corporate Auditor (Full-time)

Corporate Auditor (Full-time)

Corporate Auditor (Outside)

Corporate Auditor (Outside)

Takahiro Hiraiwa

Hiroki Higuchi

Osamu Endo

Koichi Tanaka

Directors

Corporate Auditors
Corporate Auditor(Full-time)

Takahiro Hiraiwa

Assistant to President, CCO* ,and in charge of Legal Dept.

Corporate Auditor(Full-time)

Hiroki Higuchi

Shinsuke Minoda

In charge of Human Resources & General Aﬀairs Dept.

Corporate Auditor*6

Osamu Endo

Director

Akira Nishihata

CTO*2 and in charge of Technical Co-ordination Dept.
and Auditing Dept.

Corporate Auditor*6

Koichi Tanaka

Director

Yuichi Shiomi

CFO*3 and in charge of IR Dept.

Director

Yuji Kozai

CISO*4 and General Manger, Corporate Planning Dept.

President andRepresentative Director

Takao Tanaka

CEOVice President andRepresentative Director

Takaki Yamamoto

Director

Director*5

Director*5

1

Toru Tokuhisa
Toshikazu Tanaka*1 CCO stands for Chief Compliance Oﬃcer.
*2 CTO stands for Chief Technology Oﬃcer.
*3 CFO stands for Chief Financial Oﬃcer.
*4 CISO stands for Chief Information Security Oﬃcer.
*5 Director (Outside)*6 Corporate Auditor (Outside)(As of June 27, 2018)38

Corporate Action Report 2018

Mitsui E&S is required by law to establish a Board of Corporate
Auditors. The function fulﬁlled by the Board of Corporate Auditors
together with the voluntarily established Personnel Advisory
Committee and Compensation Advisory Committee form thestructure for corporate governance at Mitsui E&S, and we haveappointed accounting auditors. As of June 28, 2018, the Mitsui
E&S Board of Directors consists of eight members. Two of thesemembers are part-time outside directors. Moreover, our Board of
Corporate Auditors consists of four members, two of which are
part-time outside corporate auditors.
The Personnel Advisory Committee is chaired by the president

and consists of four directors, including two outside directors. It
improves the transparency of the procedure for nominating
candidates for directors and ensures the fairness of the procedure.
The Compensation Advisory Committee is chaired by an outside
director, and consists of four directors including the two outside
directors. It improves the transparency of the procedure fordetermining the compensation for directors and ensures theappropriateness of the compensation standards and fairness ofevaluations.

Internal control system
Basic philosophy
We view the objectives of our internal control system as “Assuring
eﬃciency and work performance (achieving objectives),” “Assuring
the reliability of ﬁnancial reports,” and “Complying with the law(compliance).” We are making eﬀorts to reinforce and improve ourinternal control more than ever.
In our internal control system, the Total Risk Management andInternal Control Committee deliberates the basic policy regarding
internal control required by the Companies Act, the Financial
Instruments and Exchange Act, and other matters. It also undertakes
the company-wide promotion of measures based on the policy
decided by management committees and other bodies.
To achieve our internal control objectives, we have established abusiness execution system, compliance system, a risk management
system, and an internal control promotion system for ﬁnancial
reports. The internal auditing section (Auditing Department)
conﬁrms the eﬃcacy of these systems.

Corporate Action Report 201839

Management

Communication
Systems of corporate governanceand internal control

Shareholders' Meeting

1. Business execution system
To execute business operations in accordance with the basic
policy decided by the Board of Directors, we have established
two managing committees: the Management Committee and
the Group Management Committee. Deliberations are held
based on the functions of each organization to promote rapid,
ﬂexible decision-making.

2. Compliance systems
We operate our businesses by keeping legal compliance in
mind, and continually review and reinforce our compliancesystems. Speciﬁcally, we deliver the Corporate Code of
Conduct to all oﬃcers and employees of the corporate groupmade up of Mitsui E&S and its domestic subsidiaries. We havealso established a system in which guidebooks and collectionsof cases, which are materials used as references for daily
operations, are available for review at all times. We distribute
an English version of the Corporate Code of Conduct to ouroverseas subsidiaries and work with the presidents of thosesubsidiaries in a timely manner based on the situation of eacharea to conﬁrm compliance systems and the status of theirimplementation. Likewise, we have established the Compliance
Committee as an entity for promoting awareness of compliancepolicy and reporting results of surveys.
The Committee also observes and promotes awareness for
antimonopoly act. In addition, we have set up a “Help-line”
to detect compliance problems in their early stages. Employees
can directly consult or submit reports to either the Secretary
General of the Compliance Committee or a lawyer.

Together with customers

Flow Chart of Corporate Governanceand Internal Control
Election/Dismissal

Election/Dismissal

Audit Corporate Auditors
Directors(Board of(Board of Directors)
Corporate Auditors)

Decision on contents
of agendas concerning
election or dismissal

Personnel
Advisory
Committee
Compensation
Advisory
Committee

Discussion ofimportant matters,
reports on businessexecutions

Consultation

Audit

Consultation

Instruction/ReportManagement
Committee

Deliberation/
Follow up

Group
Management
Committee[Permanent Committee]
Compliance
Committee

Instruction/
ReportAuditing
Department

Total Risk Management
and Internal Control
Committee
Audit

Instruction/Report

40

Corporate Action Report 2018

We publish information about our company on our website in a timely, appropriate manner.
In addition to providing materials including those for results brieﬁng sessions and those on
mid-term business plans, we also provide video and other content aimed at providing
shareholders and other investors with greater insight into MES. We will continue striving
to provide easy-to-understand information promptly.

IR information in Corporate website

Together with business partners

Special Crisis
Control Committee *1*1 : To act in case of contingency

Investigation(Help line)

Divisions/Departments of MES
and Subsidiaries

Audit

Consultation/Reporting

Employees of the Company Groupconsisting of MES and Subsidiaries, and Clientsby relevant divisions and departments of Mitsui E&S Holdings.
To address information security risks, we have established the IT
Control Task Force, a group-wide organization and subordinatebody of the Total Risk Management and Internal Control Committee.
This organization formulates basic policies on security measures.
Following these basic policies, we promote speciﬁc measures
such as formulating security policies, obtaining the latest
information by cooperating with external organizations, monitoring
network and IT equipment, taking countermeasures against attacks
from the outside, and providing related education and training.
In cases of contingency, the Special Crisis Control Committee
stands ready to quickly cope with the problem.

4. Internal control promotion system for ﬁnancial reports
To assure the credibility of ﬁnancial reports, basic policy concerning
evaluation of internal control for ﬁnancial reports is established atannual management committees and the Total Risk Management
and Internal Control Committee evaluates the preparation andProvision of IR information

IT Control Task Force

3. Risk management system
Mitsui E&S is promoting Total Risk Management System thatsystematically identiﬁes and evaluates risks related to all aspectsof business activities. This system is designed to ensure that we
conduct business activities within the proper limit in which we cantake risks. Under the Total Risk Management and Internal Control
Committee, we promote group-wide risk management in line withthe total risk management policy determined at the Management
Committee.
In regards to risks related to business operations, each relevant
division conducts risk analysis on their own. As for the aﬃliatedcompanies key members of relevant divisions and departments
self examine the risk management status before they are analyzed

Information disclosure and IR activities
To build better relationships with shareholders and investors, we strive to ensure timely,
appropriate information disclosure and have our senior management explain our business
policies and speciﬁc visions in our IR activities, so as to ensure highly transparent management.

Recommendation

Instruction

Together with shareholders and investors
We position IR activities as a part of the long-term business and ﬁnancial strategies of senior management. We disclose our corporate
information in a fair and proactive manner in our eﬀort to deepen shareholders’ and investors’ understanding of the business activities ofMitsui E&S and the Mitsui E&S Group.

Representative Director& CEO

Deliberation/
ReportLawyerAudit

President

Recommendation

Accounting
Auditors

ReportReportElection/Dismissal,
Oversight

Election/
Dismissal

We work under our company philosophy of “To continue our role as a trusted company, and as a trusted member of society” In ourmanagement policy that supports the company philosophy, we have set “Build further satisfaction for our customers” as one of our mostimportant objectives. In our speciﬁc standards of conduct for employees, we give top priority to “customer orientation” and “Diligently
attend to our customer needs for creating value-added products” and strive to develop and provide diﬀerentiated products and services
based on new ﬁndings from customers’ voices.

operation status of said internal control, and make corrections if
necessary.

As a manufacturing and engineering company, we aim to provide cost-competitive, high-quality products. In the procurement of materials
and equipment for our products, we strive to ensure co-existence and co-prosperity with our business partners through fair trade with them,so as to fulﬁll our social responsibility.

Basic policy on the selection of business partners

For fair and equitable dealings

We established the Mitsui Administration Manual (MAM) in 1994.
Concerning the selection of business partners by the procurement
department, MAM stipulates that “As a basic principle, we shallselect business partners in a fair and square manner by providing
all companies that desire to be our business partners with equal,
fair opportunities for participation.” We engage in procurement
activities based on this principle.

We established the Rules and Ethics for Material Procurement inNovember 2002. It shows the ethics and behavior and activity
standards for all staﬀ engaged in procurement activities. On thebasis of the utmost integrity, we strive to build equal and fairrelationships of trust with business partners.

Together with local communities
We attach importance to communications with local communities. Employees in each of our business locations engage in environmental
and social contribution activities locally, aiming to create a sustainable society. Information about initiatives taken at each business location
is provided in this report and on our website.

Ceremonial ship launching shown to the public
at Tamano Shipyard (about ﬁve times a year)
Featuring the spectacle of a huge ship launching into the sea, ceremonial shiplaunches at Tamano Shipyard is received well by all those who observe it. Tamano
City Tourist Association and other parties organize a popular industrial tour around
Tamano City, the highlight of which is the chance to observe a ceremonial ship launch(which is held irregularly). Information about the observation of ceremonial shiplaunches is posted to the oﬃcial website of Tamano City as it becomes available.

Corporate Action Report 201841

Sustainability

Environmental Preservation

Our actions aimed at realizing
a sustainable global environment

Environmental management data (non-consolidated)

Initiatives for reducing our environmental impact through business activities
Our Action

Development of neo-series ships -- next-generation environmentally friendly ships

The graph on the right shows the use of water by MES over the last ﬁve years.
MES uses both service water (clean water) and industrial water (intermediatewater). We strived to save water once again during ﬁscal 2018, but the amountof service and industrial water used was up approximately 14% from theprevious year.

KIRISHIMA, a VLCC with a capacity of 310,000 DWTDevelopment of a new high-pressure SCR for low-speed
marine diesel engines (MAN SCR-HP)
Development of a next-generation hydraulicwaste heat recovery system (THS2)

Our Action

New high-pressure SCR for low-speed marine diesel
engines (MAN SCR-HP)

8

Actual SCR equipment

In March 2017, Burmeister & Wain Scandinavian Contractor A/S, which is our subsidiary,
received an order for the 37-MW highly eﬃcient diesel power plant for Elfelagid SEV, anelectric power provider on the Faroe Islands. This diesel power plant runs on heavy fueloil with a low environmental impact. This is enabled by the use of a selective catalytic
reduction (SCR) denitriﬁcation system, which signiﬁcantly reduces NOx.
Diesel power plant for the Faroe Islands

2015

2016

8.60

8.20

2

2014

2015

2016

2017

0

2018 （FY）

2014

Water consumption(1,000kWh)

1,500

115,923

100,789

109,121 109,886 111,102

1,168 1,113 1,151

1,089

2018 （FY）

1,310

1,000

50,000

500

0

0

2014

2017

Industrial water
Service water(1,000 cubic meters)

150,000

100,000

8.13

4

1,130

500

0

8.14
6.90

6

1,000

2015

2016

2017

2018 （FY）

580
2014

2015

2016

2017

2018 （FY）*1 TJ: Tera Joule (=1012J) *2 CO 2 emissions were calculated by following the Guidelines for Calculating
Corporate Greenhouse Gases Emissions issued by the Ministry of the Environment. CO 2 emissions
from electric power were calculated by using the adjusted CO 2 emission coeﬃcient for designatedelectric enterprises that was also published by the Ministry of the Environment.

The unlawful dumping of industrial waste has become a major social problem.
As a producer of industrial waste, MES makes every eﬀort to fulﬁll its
responsibilities in this area. One of these eﬀorts is our strict management of
manifest. This is accomplished through periodic on-site inspections of disposal
companies. Even more important is our eﬀort to reduce the amount of waste
itself. To achieve this objective, we work hard to recycle and thoroughlyclassify our waste. The graphs on the right show the waste amount and recycle
rates over the past ﬁve years, and a breakdown of waste for ﬁscal 2018. We
worked to limit waste, but ﬁscal 2018 saw an approximately 5% increase inwaste from the previous ﬁscal year. In addition, the recycle rate decreased byapproximately 0.2% to 86.6% because of the increased amount of waste oil
and waste plastic that we generated. We will continue our eﬀorts to reduce
waste and improve our recycle rate. In addition, we will continue to properly
dispose of our waste through strict management.

Total waste amount and recycle rate

Disposed amount

Recycled amount

86.6
34,800 36,600

100

Recycle rate (%)

Quantity (t)50,00040,00034,50034,60032,60080
60

30,00020,00040

31,70020

10,000
0

2014

2015

2016

2017

FY2018 breakdown of waste

2018

Slag
7.7

Scrap metal 64.4

（%）

（FY）

0

Waste oilRubble 4.6 Waste paper and rag
2.2
5.7
Others4.9

Waste wood
Sludge 1.6
5.3
Waste plastic 4.0

Speciﬁed chemical substances

The majority of chemical substances used by MES are the solvents andpigments contained in paint. The changes in the output and travel amount ofspeciﬁc chemical substances over the past ﬁve years are shown in the graphon the right. The other chart describes the breakdown of chemical substancesused by MES for ﬁscal 2018. In May 2004, a partial revision to the Air Pollution
Control Act was oﬃcially announced. By maintaining strict control of usage
levels and by using low-emission airtight containers, MES continues its eﬀorts
to conform to the objectives of this law.

Breakdown of speciﬁed
chemical substances(amount of emissions + travel amount)(amount of emissions + travel amount) in FY2018
（t）

（t）

600

1,200

1,014

1,000
800

500

730

688

678

400

688

600

300

400

200

200

100

0

Being proactive in promoting businesses operated using renewable energy

Corporate Action Report 2018

1,395

1,265 1,300 1,305

1,175

CO 2 emissions *2(10,000 t)

Proper management of speciﬁc chemical substances(PRTR substances)

Order received for a diesel power plant for the Faroe Islands

42

1,500

Waste disposal and recycle rate

Development of propulsion systems that are both environmentallyfriendly and have excellent economic eﬃciency

In April 2017, we conducted a veriﬁcation test of a new selective catalytic reduction (SCR)
system (high-pressure SCR), which can be mounted on low-speed marine diesel engines
and which meets the IMO NOx (Nitrogen Oxides) Tire III regulations, jointly with MAN
Diesel & Turbo, which is the licenser, thereby contributing to the development of thesystem.
In May 2017, we developed the Turbo Hydraulic System type2 (THS2), a next-generation
hydraulic waste heat recovery system dedicated to electronically controlled low-speed
marine diesel engines. This will contribute to reducing greenhouse gas (GHG) emissions
from ships and will serve as an eﬀective measure for improving the Energy Eﬃciency
Design Index (EEDI), which will be more strictly regulated in the future.
As a leading manufacturer of large, low-speed marine diesel engines in Japan, we will
promote the development of technologies for complying with SOx regulations, as well as
NOx regulations, and reducing CO 2 emissions (energy-saving technologies).

MES continues its eﬀorts to reduce CO 2 emissions through activities such as
switching the fuel for in-house power generation from heavy oil to natural gas.
The graphs on the right show our total energy consumption, CO2 emissions, andpurchased electricity over the past ﬁve years. Corresponding with an increasein the manufacturing of ships and diesel engines, our mainstay products, totalenergy consumption for ﬁscal 2018 increased slightly year on year. As a result,
CO 2 emissions rose approximately 5% from the ﬁscal 2017 level.

Water consumption

eﬀorts to comprehensively improve the environmental and fuel performance.

Our Action

FuelElectricity

*1
（TJ）

Purchased electricity

Delivery of KIRISHIMA, a VLCC with a capacity of 310,000 DWT,
which is among the largest in the world
The reduction of greenhouse gas (GHG) emissions from ships is an urgent task because
regulations on CO 2 emissions from international shipping have now been introduced. In
this situation, the Mitsui E&S Group has developed the neo-series environmentally friendly
bulk carriers with low fuel consumption and has been promoting the launch of the ships
onto the market. Further, we have developed the neo VLCC, the ﬁfth ship in the neo series,
by applying our bulk carrier technologies to large tankers. We have completed the ﬁrst ship
named the KIRISHIMA, a VLCC with a capacity of 310,000 DWT, which is among the largest
in the world. We designed this ship to comply with the regulations on emissions of harmful
substances such as nitrogen oxides (NOx) and sulfur oxides (SOx), as well as CO 2, in our

Total energy consumption

Energy consumption and CO2 emissions

2014

2015

2016

2017

2018 （FY）

0

337
204
119
26
XyleneToluene2Ethyl- Manganese Others
benzeneandits compound

Environmental accounting (non-consolidated)
MES spent a total of 3,820 million yen on investments and costs related
to environmental preservation eﬀorts. A detailed breakdown of these
expenditures is shown on the right. The categories for environmental
preservation costs are based on the Environmental Conservation Cost
Categories shown in the Environmental Accounting Guidelines 2005.
These expenditures included a total of 800 million yen spent on investment,
consisting of 500 million yen spent on research and development, 290
million yen spent on pollution prevention cost such as exhaust gas measures,and 10 million yen spent on energy conservation of global environment
conservation. Total non-investment costs came to 3,020 million yen, which
included 1,860 million yen spent on the research and development ofenvironmentally friendly energy-saving products, 470 million yen as thecost for preservation of the global environment, including energy
conservation, 370 million yen allocated to resource circulation costs suchas waste treatment, and 230 million yen for pollution prevention costs.

Environmental preservation cost (= sum of investment and cost: 3,817 million yen)
Categories corresponding
to business activities

Investment(JPY million)

Major initiatives and eﬀects

Cost

1. Business Area Cost
(1) Pollution prevention cost

294.7

471.8

Exhaust gas measures, wastewater treatment,
dust control and other pollution control(2) Global environmental
conservation cost

6.3

372.5

Energy saving(3) Resource circulation cost

0.0

229.4

Waste treatment

2. Upstream / downstream cost

—

—

—

83.0

496.0

1,861.0

5. Social activity cost—

2.5

6. Environmental remediation cost

—

—

797.0

3,020.2

3. Administration cost
4. Research & development cost

Total

Environmental management system implementation,
integrated reports, and environmental education
Development of various environmentallyfriendly products
Road cleaning, seminar sponsorship

Corporate Action Report 201843

Sustainability

Human Assets

Initiatives for creating workplaces where
every single employee is respected

Initiatives for developing human resources

Initiatives for reducing our environmental impact through business activities
Mitsui E&S Holdings Co., Ltd., Mitsui E&S Shipbuilding Co., Ltd., Mitsui E&S Machinery Co., Ltd., Mitsui E&S Engineering Co., Ltd. and
Mitsui E&S Business Service Co., Ltd. (hereinafter, the “Mitsui E&S Group”) aim to create a corporate culture that is truly free of discrimination,
together with the aﬃliated companies, as a corporate entity that demonstrates social responsibility. For this purpose, the Mitsui E&S Grouppositions the solution of human rights problems, including problems related to discriminated communities, gender discrimination and racial
discrimination, as an important task, and strives to solve these problems through daily business activities under the principle of respect forhuman rights.

Organizational structure (organizations and systems for promoting training)

Mitsui E&S Group company. To coordinate between groupcompanies, we have also established the Mitsui E&S Group
Meeting of People in Charge of Promoting Human Rights
Awareness as the advisory body.

(Chairman: Director in charge of
HD Human Resources & General Affairs Dept.)

Business skills
training

Managerial
position
employees

Training for line manager
candidates

Business skills training V

Management training

Business skills training IV

Mid-level
employees

Job rotation system

Business skills training III

Group-Wide Meeting of People in charge of
Human Rights Enlightenment Committee(Person in charge assigned from HD and Operating Company)

Mitsui E&S Shipbuilding
Human Rights
Enlightenment Committee

Mitsui E&S Machinery
Human Rights
Enlightenment Committee

Mitsui E&S Engineering
Human Rights
Enlightenment Committee

Third year trainingYoung
employees

Introduction of Telecommuting System

In March 2018, we introduced a Telecommuting System in addition to the existing Flexible Working Hours System without core time andhourly annual leave. Under this system, employees raising children or providing nursing care to their families and those who have diﬃcultycommuting due to pregnancy, injury or a similar reason are allowed to work from home for up to two days a week if they fulﬁll certain
conditions. This aims to permit individuals to demonstrate their capabilities to the full during a limited time by enabling them to save timespent on commuting and reducing the physical burden on them.

Our Action

Naval Ship & Governmental Ship Sales Dept.,
Sales Div.
Mitsui E&S Shipbuilding

44

Corporate Action Report 2018

Introductory training
for new employees

Business skills training II

Overseas deployment
systemBusiness skills training I

Overseas deployment system

Overview of the system
We established this system in 2015 in accordance with the following objectives
and began operating it.

Objectives□ Developing the international sensibility of trainees by having them experience
working and living overseas as the groundwork for developing humanresources who will manage overseas bases (including local subsidiaries)
and projects in the future.

□ The opportunities are provided to young employees (in their third to ﬁfth year
at the company) whose current jobs do not give them many opportunities
to gain overseas experience.

Average length of period of deployment :6 months to 1 year

Required achievement/goalFirst half of 2017: 3 employees were deployed

The achievement as the target of this system is to develop a comprehensive
mindset and skills for fulﬁlling duties overseas by experiencing operations(including legal aﬀairs, accounting, tax aﬀairs, general aﬀairs, and personnel
aﬀairs) and daily life in an overseas country, broadly and shallowly. It is not aimed
at developing specialists in the destination countries or in the businesses of thecompanies to which they are deployed.

Feedback from a user of the Telecommuting System

Junko Matsuoka

FU training
for new employees

Mitsui E&S Business Service
Human Rights
Enlightenment Committee

Acquisition of Kurumin Logo certiﬁcation, which is granted tocompanies supporting the development of the next generation

Voice

Global humanresource development

Global communication
training

Human Rights
Secretariat(HD Human Resources &General Affairs Dept.)

On August 22, 2017, Mitsui E&S Holdings Co., Ltd. (formerly known as Mitsui Engineering & Shipbuilding
Co., Ltd.) was certiﬁed as a company supporting childcare pursuant to the Act on Advancement of Measures
to Support Raising Next-Generation Children by the Ministry of Health, Labour and Welfare and acquired
the Kurumin Logo, which is granted to companies supporting the development of the next generation. We
promote initiatives including the improvement of labor conditions for helping employees to balance workand family life and review their workstyles. These initiatives are aimed at creating a workplace that enables
employees to balance work and family and show their abilities to the fullest in manners that are appropriate
for various life events.

Our Action

Job-class-speciﬁctraining programs

Mitsui E&S Group Human Rights Enlightenment Committee

Initiatives for promoting work-life balance
Our Action

Training System

English courses

Mitsui E&S GroupWe have appointed the director in charge of the Human
Resources & General Aﬀairs Department of Mitsui E&S
Holdings Co., Ltd. as the head of the Mitsui E&S Group
Committee for Promoting Human Rights Awareness.
Under the head of the committee, we have established theCommittee for Promoting Human Rights Awareness in each

We have set “making them full-ﬂedged in ﬁve years” as the goal for training young employees. We provide them with group training in theirﬁrst and third years at the company, training on basic skills for speciﬁc types of job, and other training programs. We also provide job-classspeciﬁc training programs, including one for mid-level employees and one for those in managerial positions. In addition, from the viewpointof fostering global human resources, we oﬀer English courses and training programs related to cross-cultural communications and deploy
young employees to overseas business locations.

When I returned to work after the childcare leave that I took for my ﬁrst child, my baby of less than
one year old, whom I had just begun to leave at a day-care center, had a fever about 15 days every
month. I began to use this system to balance childcare and work, with a strong supportive pushfrom my superior.
Positive aspects of the system
I appreciate this system because it allows me to balance childcare and work when my child is sickand needs my care and attention but I don’t want to be absent from work. Because I don’t have togive up either of things, the system allows me to balance work and childcare more easily, enjoy
both areas, and ﬁnd my life fulﬁlling. I work shorter hours by using the Flexible Working Hours
System to take my child to and from the day-care center or the pediatric clinic. I also ﬁnd theTelecommuting System helpful because it allows me to take my child to the pediatric clinic fromthe day-care center, even after I have worked until the end of the business day.

Voice

Shiori Ooiwa

Finance & Accounting Dept.,
Planning & Administration Div.
Mitsui E&S Shipbuilding

Destinations

PeriodPhilippines/Group company

5 months
5 months
10 months

Indonesia/Project Site

Singapore/Group company

Feedback from an employee who has experienced
the overseas deployment system
I was deployed to DASH Engineering Philippines Inc., a subsidiary in the Philippines, for around
ﬁve months from May 2018. At this company, I was in charge of accepting Japanese employees
on business trips to the Philippines and other personnel and general aﬀairs, including proceduresfor deploying local employees to other countries. I was initially bewildered by the environment,
where things that are normal in Japan are not normal, and I sometimes found myself uselessbecause I was unable to proceed smoothly with work. However, based on the behaviors and waysof thinking of my local senior colleagues, I learned to look at the cultural diﬀerences behind the
local employees’ behaviors. I reminded myself that what is normal in Japan may be abnormal in
the Philippines, and this gradually enabled me to proceed with the work. I feel that this experience
allowed me to learn values that are important when working with people overseas.

Corporate Action Report 201845

Sustainability

Work Environment

Our actions aimed at creating safe,
comfortable, healthy workplaces

Eﬀorts to prevent labor accidents

Initiatives for creating healthy workplaces
Under our basic policy on the safety and health management plan, we create comfortable workplaces
by managing the physical and mental health of our employees in a proactive manner. We compile a
database of the results of periodical health examinations, with which our occupational safety andhealth staﬀ and health insurance association manage the health of individual employees thoroughly.
To provide speciﬁc examples, they hold various seminars for preventing lifestyle-related diseases
and provide individual employees with speciﬁc health guidance and instructions for preventing any
increase in the severity of diseases. In addition, we operate the Health Attack program, which is
aimed at helping all employees and their families, including those from Mitsui E&S Group companies,
to improve their lifestyles. In this program, we have them select health challenges that are appropriate
for each of them from among a wide variety of courses, and employees work on their assignment
for two months. As a mental health policy, we conduct systematic workshops stress checks, mental
health news publications, counselor interviews, etc, in a systematic manner.
Further, the Mitsui E&S Holdings has concluded a blanket contract so that employees of the Mitsui
E&S Group companies (approx. 10,000 employees) and their families can utilize an employee
assistance program (EAP) service provided by an external resource (outsourcing service provider).
In this service, consultations on physical/mental health and legal consultations are provided via
telephone, website, facsimile, or in one-on-one meetings, 24 hours a day, with the privacy of theemployees completely protected. We have provided this EAP service continuously for more thanten years.

Our Action

Line care training session

Health Attack

EAP service

EAP service website

Being recognized under the 2018 Certiﬁed Health and Productivity
Management Organization Recognition Program (White 500)

Under this program, the national government recognizes outstanding companies that undertake
eﬀorts for health and productivity management. It aims to establish an environment in which suchcompanies are able to gain enhanced public recognition, e.g. from employees, employment seekers,
related enterprises and ﬁnancial institutions, as organizations engaging in strategic health andproductivity management program eﬀorts for maintaining their employees’ health from a management
perspective. In recent years, we have been committed to promoting measures for preventing
lifestyle-related diseases and any increase in the severity of diseases based on the data health plan,
in a collaborative health promotion project with the health insurance union. As the Mitsui E&S
Holdings Group, we will work on health and productivity management proactively from a management
perspective, aiming to create workplaces that enable employees to enjoy working energetically.

Aiming to create workplaces that enable employees to enjoy working energetically‒ A message from the director in charge of the Environmental & Safety Control Department

Shinsuke Minoda
Director, In charge of
Human Resources & GeneralAﬀairs Dept.

46

Corporate Action Report 2018

Mitsui Engineering & Shipbuilding, which celebrated its 100th anniversary in 2017, became a holding company in April thisyear, and we were reborn as the Mitsui E&S Group. We have retained the company philosophy of “To continue our role asa trusted company and as a trusted member of society.” The group’s code of conduct has also remained unchanged,
being “to provide a safe, comfortable and healthy workplace for its employees.”
Operating companies that have been spun oﬀ ﬁrmly maintain the basic policy of giving top priority to safety in humanresources development and proactively working on physical and mental health management.
Activities for preventing labor accidents by Mitsui E&S Holdings Co., Ltd. (Mitsui E&S HD), which heads the group, include
its president’s safety patrol of each works of group companies, the participation of people from the Environment & Safety
Department of Mitsui E&S HD in labor safety meetings at each works of group companies, and the promotion of patient
activities for informing employees of 2S3tei (“seiri” for orderly, “seiton” for tidy, “teiichi” for designated position, “teihin”
for designated tools, and “teiryo” for designated amount), transmission of the philosophy for safety, and self-checking withﬁnger pointing. In the ﬁeld of occupational health, we are proactive in implementing measures such as the promotion of thedata health plan and speciﬁc health guidance and the prevention of any increase in the severity of diseases, which are aimed
at preventing lifestyle-related diseases, in a collaborative health promotion project with the health insurance union.
Since our days as Mitsui Engineering & Shipbuilding, a PDCA cycle of taking a high level of measures for health and productivity
management, evaluating the measures and making improvements has been implemented under the initiative of each works.
As a result, the Mitsui E&S Group was recognized under the 2018 Certiﬁed Health and Productivity Management Organization
Recognition Program (White 500). We are extremely honored to be recognized in this way, and at the same time, we aredetermined to promote health and productivity management further from a management perspective as the new Mitsui
E&S Group.

Based on the MES Occupational Safety and Health Management System
Manual, we maintain our basic policy on occupational safety and health forthe overall company declared by the employer (president). Based on this basic
policy, we have developed and introduced the Company-Wide Occupational
Safety and Health Management Plan.
We have so far (until FY2018) held labor and management safety and healthcouncils and conferences to discuss measures and to promote the plan. We
have also informed employees of the plan and collected their opinions
through the safety and health committee of each works, workplace, etc.
We have provided training relating to programs in a company-wide manner orat each work or workplace, and have also provided special training to young
employees as necessary. We have also received ﬂash reports of labor
accidents from subsidiaries and shared the information to improve the safetylevel of the overall group. Depending on the results of the labor accidents, thesafety and health inspection patrol was conducted by the Company-WideGeneral Safety and Health Manager and the director in charge of theEnvironmental & Safety Control Department.
When we became a holding company on April 1, 2018, we retained theprevious basic policy on occupational safety and health as the policy of theoverall group. We will evolve this basic policy so that each operating company
will take more meticulous, advanced measures for preventing labor accidents
under the new structure.

Company-Wide Occupational Safety
and Health Management Plan
Basic policy
Regarding corporate behaviors relating to safety and health, we willachieve the followings by instilling a safety culture in each workplaceand fostering human assets:(1) Safety ﬁrst principle, for manufacturing and engineering
practices
as top priority to safety(2) Creating a comfortable workplace by proactively working on
physical and mental health management
High-priority issues(1) Safety
1) 2S3tei (“seiri” for orderly, “seiton” for tidy, “teiichi” fordesignated position, “teihin” for designated tools, and“teiryo” for designated amount), discipline, and habit
2) Transmission of the philosophy for safety3) Mutual warning and 3-nai management (3-nai literallymeans “3 don’ts,” that is, “Don’t allow unsafe behaviors,”“Don’t compromise by making excuses,” and “Don’t leave
unsafe conditions unimproved.”)4) With self checking with ﬁnger pointing
Particular emphasis shall be placed on the following:i. Enhancing facilities for, and contents of, experiential safety
training
ii. Assigning supervisors to positions exclusively
for ensuring safety for a certain periodiii. Enhancing risk notice meetings before the starting of work(2) Health
1) Reinforcing the mental health care system
2) Strengthening measures against overwork(3) Each line manager shall set an example by declaring safety andhealth and implementing the workplace safety and healthmanagement plan and promoting the PDCA of the activities.

Speciﬁc measures in FY2018
Concerning the Team Safety II activity, the president’s prize were awarded two times during the year.
Safety and health inspections are conducted by the central labor-management council every year at each work.
Depending on the result of injuries of the previous year, intensive inspections were conducted at works with poor result.
Safety and health inspection patrol of works were conducted by the president during the Safety and Health Promotion Months (July to August).
Proposals for improvements were solicited during the period, and remarkable proposals were awarded by the president.
The safety and health slogan for the year was solicited from the employees.

Our Action

Transmitting the philosophy for safety to young
employees through patrols by the general manager

At the Chiba Works, young workers who have been with the company for less than ﬁve years
join the safety patrol that is conducted by the general manager every Friday to receive
one-on-one safety training. Activities in these patrols are aimed at raising the safety awarenessof young workers and managing the safety of each work ﬂoor comprehensively. They include
the general manager’s explanations about the speciﬁc situations of accidents that haveoccurred in the past.

Our Action

Safety award granted to works

The Chiba Works achieved zero lost-worktime accidents in 2017. In recognition of this, theChiba Works was awarded the Award of Excellence in Safety at the 21st Safety and Health
Meeting that was hosted by the Shipbuilders’ Association of Japan. In addition, the Engineering
Headquarters (Mitsui E&S Engineering Co., Ltd.) achieved all targeted accident frequency
rates among the annual labor safety and health management targets for 2017.

Our Action

Commending the best teamin the Team Safety II activity

In the Team Safety II activity, which is implemented in a company-wide manner as a special
measure in our labor safety and health activities, the team whose activities are recognized
as the most excellent is granted the highest award (the president’s prize).

Corporate Action Report 201847

Sustainability

Social Contributions

Our actions for remaining a groupthat is trusted by society

Our Action

Every year, we accept a bus tour of local citizens at the Oita Works as part of the Oita
Kogyo-ten (Oita City industries show), an annual autumn event in Oita City. Partly
because the Oita Works is located at the edge of the coastal industrial zone, we have few
opportunities to show the container cranes manufactured there to local citizens. This tour
serves as a valuable opportunity to enable them to get to know our products, which areshipped from Oita to the world.

Initiatives for creating open factories
Our Action

Factory tour given at the Tamano Works,
hosted by the J-Crew Project – Yappari Umi-ga Suki

The Tamano Works participates in a factory tour program that is implemented by tying up
with shipyards all over Japan and is hosted by the J-Crew Project – Yappari Umi-ga Suki
(I love the ocean after all) of the All Japan Seamen’s Union. The works accepted the ﬁrst
tour in December 2016 and gave a total of three tours by FY2018. In January 2018, theTamano Works accepted around 120 local ﬁfth-grade elementary school children for an
Extracurricular Lesson for Experiencing a Shipyard. The children observed the marine diesel
engine assembly factory and other facilities. The tour was well received by the children
because they were able to get a close look at a large engine, which they do not usually havethe opportunity to see. It is planned to be a regular event that will continue to be held onceor twice a year.

Voice

Naoki Yufu
General Aﬀairs Dept., Oita Works
Mitsui E&S Machinery

Takahiro Akita

We can say that the spread of sea-mindedness
is an urgent task for Japan to undertake as anisland nation. I am sure that participation in thisactivity helps to spread sea-mindedness. Thiswas proven by the smiles of the children when
they saw the ships and engines. It also serves as
an opportunity to promote our products toexternal people, so we will continue to accept
tours and make it a regular event.

Many participants think that we build ships
because of the old company name, Mitsui
Engineering and Shipbuilding. I provide themwith explanations in the belief that it is my duty
to let them know that container cranes are
manufactured at the Oita Works. This is a valuable
opportunity to let local citizens know about our
products, which we proudly manufacture. I ﬁnd
this job rewarding when I receive positive
comments, such as “It’s huge and exciting!”

Support for the activities of the Fureai Trio

Human Resources & General Aﬀairs Services Dept.
Mitsui E&S Business Service

Accepting local elementary school children for a tour of the Chiba Works

In the summer every year, we invite local ﬁfth and sixth graders to a tour of the Chiba
Works as an event related to Marine Day. In this tour, the children watch a DVD video of
shipbuilding processes and learn the roles of ships and other details from a PowerPoint
presentation before they are divided into grade groups and go on a tour around thefacilities and on board a ship. In 2017, the event was held for the third time, and many
elementary school children participated in the tour, although they were on summer
holidays. They were very surprised to see a large ship and huge crane under construction,
which they do not see on a daily basis, but they said, “It was a lot of fun.”We will continue to hold tours that will familiarize local children with the shipbuilding
industry.

Voice

Momoe Sato
Planning & Co-ordination Dept., Chiba Shipyard
Mitsui E&S Shipbuilding

48

Feedback from a participant

Feedback from a participant

Voice

Our Action

Accepting a bus tour at the Oita Works

Corporate Action Report 2018

Feedback from a participant
We explained what we do to the local children in
an easy-to-understand manner by using quizzes
and showing photos to compare the size of aship with that of the elementary school, forexample. With the children reacting candidly,
this event also served as a good opportunity forme to reconﬁrm the greatness and importanceof ships.

We support the activities of the Fureai Trio, a musical unit consisting of Ms. Kyoko Yoshida,a violinist, Mr. Mitsutaka Shiraishi, a pianist, and Mr. Genichi Watanabe, a cellist. The
activities of the Fureai Trio commenced in 2003 with a desire to expose children and people
with disabilities, who have few opportunities to be exposed to classical music, to live
classical music and enrich their lives spiritually. The trio performed in eight cities/towns/wards
this year. It has given 462 public performances for approximately 106,000 people to date(as of March 31, 2018). Since the activities of the Fureai Trio started in 2003, we have not
only co-sponsored its events, but have also provided volunteer services to support its
concert activities.

A public performance at Tokyo in January 2018
(Venue: Tokyo Bunka Kaikan in Taito Ward)

Activities of the Mitsui Public Relations Committee
We have co-sponsored a range of social contribution activities as a member company of
the Mitsui Public Relations Committee, which consists of 24 Mitsui Group companies.
This committee carries out a variety of cultural and art activities aimed at “enrichingsociety by cherishing people and respecting diverse personal characteristics,” working inline with the characteristics of the Mitsui Group described as “Mitsui is People.”
Children learning about ships through Yes/No quizzes

MITSUI Golden Glove Award
We grant this award to professional baseball players who have exhibited
outstanding ﬁelding performance throughout the season.

Winners of the 46th MITSUI Golden Glove Award

Mitsui Golden Glove Baseball ClassThis is a baseball class specializing in ﬁelding, which is aimed at baseballcoaches for juniors. We invite ex-professional baseball players who won
the MITSUI Golden Glove Award to be instructors.

The MITSUI Golden Takumi Award
This program was established in 2015, reﬂecting our desire to create an
opportunity to attract attention and admiration for people involved in“Tradition x Innovation.”

Winners and juries of the 2nd MITSUI Golden Takumi
Award in March 2018

Corporate Action Report 201849

Sustainability

Social Contributions
Initiatives of group companies
Showa Aircraft Group

100th anniversary initiatives

Opening of Smile Kids Showa-no Mori, a company-sponsored nursery schoolShowa-no-Mori Area Service Co., Ltd., a company that belongs to the Showa AircraftGroup, opened Smile Kids Showa-no Mori, a company-sponsored nursery school, in abuilding near the north exit of Akishima Station in April 2018. This nursery school accepts
up to 30 babies and toddlers aged from seven months to two years. It has two admission
quotas -- one for the company and one for the local community -- thereby contributing to
reducing the number of local children on waiting lists for nursery schools, as well as
supporting the work-life balance and childcare of the company’s employees.

Our Action

Celebrating our 100th anniversary with local communities

On November 14, 2017, we ran an advertisement with a message of gratitude on our 100th anniversary, and we held a number ofcommemorative events in each area, such as a commemorative ceremony inviting local residents and an event co-hosted by employees
and management. In addition, a video message introducing our 100-year history has been posted on our 100th anniversary website.

三 井 造 船 創 立 100 周 年

DPS Bridge Works Co., Ltd.

A letter of gratitude received from Noboribetsu CityDPS Bridge Works Co., Ltd. received a letter of gratitude from the school board of
Noboribetsu City for the company’s acceptance of social studies ﬁeld trips of local third-grade
children at its Horobetsu Factory. This initiative has been taken by the company for
approximately 20 years. In FY2018, a total of 240 children from ﬁve elementary schools
visited the factory. As a local company working close to them, DPS Bridge Works Co., Ltd.
explains the manufacturing process and materials of concrete products and deepens
exchanges with the children in Q&A sessions.

100th anniversary message movie

100th anniversary logo by 850 participants of the annual sports
festival in Tamano factory

Burmeister & Wain Scandinavian Contractor A/S

Summer festival held at Tamano factory

100th anniversary advertisement fornewspaper

PR activities for our new company nameCo-sponsoring the Copenhagen Cherry Blossom Festival
Our Action

BWSC co-sponsors the Copenhagen Cherry Blossom Festival, which is held in late April
every year at a park near the Little Mermaid statue. The festival was ﬁrst held in 2008 in
association with the donation of 200 cherry trees to the government of Copenhagen, which
was made by the Andersen Group in Hiroshima in 2005 to commemorate the 200th
anniversary of the birth of H. C. Andersen, a famous Danish fairy tale writer. At the event,participants can enjoy various elements of Japanese culture, including the Bon dance, tea
ceremony, traditional Japanese martial arts, and even manga and music. It has grown intoa major event that attracts around 30,000 visitors over the two-day period.

We are proactive with PR to make our new company name known

New company name signage heldat Jingu Baseball Stadium

Advertisement(newspapers, radio and etc.)

Corporate website renewal

Co-sponsoring A Musical Café, a charity concert
BWSC co-sponsored A Musical Café, a charity concert that was held in Denmark on June11, 2017. This concert is held every year by Ms. Yuko Yasui, the principal second violinistof the Copenhagen Phil, to support the areas aﬀected by the Great East Japan Earthquake.
In 2017, Mr. Toshiyuki Kamioka, who is the Chief Conductor of the Copenhagen Phil, played
the piano, and other members of the orchestra performed to support the event. The proceedsfrom the event, which amounted to 328,153 yen, were donated to the Fukushima
Children’s Fund.

Origin of the Company Name

Mr. Toshiyuki Kamioka (third from left), Ms. Yuko Yasui(second from left), and other members of the
Copenhagen Phil who performed at the event

Topics50

Participation in concerted cleanup on Makuhari New City Clean Day
The concerted cleanup on Makuhari New City Clean Day is held in spring and autumn every
year, hosted by the Makuhari New City Urban Development Council. We solicit volunteers
for the cleanup from Mitsui E&S Group companies with bases in the Makuhari district. In
FY2018, volunteers from Mitsui E&S Engineering Co., Ltd., Mitsui E&S Plant Engineering Inc.
and MES Facilities Co., Ltd. participated in the cleanup. The amount of garbage has been
decreasing every year, which makes us aware that our activities are bearing fruit.

Corporate Action Report 2018

E&S is created using the initial letters of Engineering & Shipbuilding, which is part of theformer company name, Mitsui Engineering & Shipbuilding. However, its meaning goesbeyond these two words.E implies Environment and Energy, part of the business areas
we will be focusing on. S suggests Social Infrastructure, Solution, Systems and Service.
Each of these are also part of the areas in which we will be working intensively. Thus,
E&S has extensive signiﬁcance. E&S symbolizes our corporate stance of providing a wider
array of solutions more broadly with Engineering & Shipbuilding as the starting points,
where we have cultivated our strengths and beyond.

Concept of logo mark【 The new logo: M on the Earth 】
The blue under M represents the horizon of the Earth. It expresses the future expansionof the business ﬁelds of the Mitsui E&S Group. On this line, you see M in dynamic black,which gives an impression of solid potential for future growth and presence. Between theblue line and the M hide two arrows, facing each other, to express the Group’s determination
to create new value for the planet by bringing together diverse people and technologies.

Corporate Action Report 201851

Company ProﬁleCompany Proﬁle (As of March 31, 2018)
Company NameOﬃces and Works

Mitsui E&S Holdings Co., Ltd. (Since 1st April, 2018)

Head Oﬃce Location 6-4, Tsukiji 5-Chome, Chuo-ku, Tokyo 104-8439, JapanFounded in

November 14, 1917

Established inJuly 31, 1937

Capital44,385 million Yen

Number of sharesauthorized to be issued

150,000,000 Shares

Number ofoutstanding shares

83,098,717 Shares

Number ofshareholders

57,388

Employees

13,421 (Consolidated)
3,653 (MES Only)

Holdings
Shipbuilding
MachineryEngineering
Business Service

Kansai Oﬃce

Major Group Companies

Kobe Oﬃce

Mitsui E&S Holdings Co., Ltd.

Hokkaido Oﬃce

Tamano General Oﬃce

Mitsui E&S Shipbuilding Co., Ltd.

Mitsui E&S Machinery Co., Ltd.

MES-KHI Yura Dock Co., Ltd.
Akishima Laboratories (Mitsui Zosen) Inc.
M.E.S Tokki Co., Ltd.
MES Shipping Co., Ltd.
Shikoku Dockyard Co., Ltd.
Niigata Shipbuilding & Repair, Inc.
TGE Marine Gas Engineering GmbH

Mitsui E&S Power Systems Inc.
Mitsui Meehanite Metal Co., Ltd.
Sanzo Manufacturing & Construction Co., Ltd.
Mitsui E&S Steel Structures Engineering Co., Ltd.
Mitsui E&S Technical Research Co., Ltd.
DPS Bridge Works Co., Ltd.
Azuma Machinery Co., Ltd.
Paceco Corp.

Mitsui E&S Business Service Co., Ltd.
Mitsui E&S Systems Research Inc.
MES Facilities Co., Ltd.

PT.MES Machinery Indonesia
CSSC-MES Diesel Co., Ltd.
MES Ferrotec China Co., Ltd.
Mitsuizosen Technoservice Hongkong Ltd.
Mitsuizosen Technoservice Taiwan Co., Ltd.
MES Technoservice Middle East W.L.L.
MES Technoservice Machinery Construction Logistics,
Industry and Trade Corporation

MODEC, Inc.
Burmeister & Wain Scandinavian Contractor A/SShowa Aircraft Industry Co., Ltd.

Mitsui E&S Engineering Co., Ltd.

Tamano Shipyard

Mitsui E&S Plant Engineering Inc.
Mitsui E&S Environment
Engineering Corporation
Sanzo Yuki Recycle K.K.
Hamamatsu Green Wave Co., Ltd.
Green Power Ichihara Co., Ltd.
Betsukai Biogas Power Co., Ltd.
DASH Engineering Philippines, Inc.
Engineers and Constructors International, Inc.

Tamano Machinery Factory

Kaji Technology Corporation
Mitsui E&S ASIA PTE. LTD.
Mitsui E&S (China) Co., Ltd.

Stock companies
1.1％

Foreignnationals
19.5％

Chiba Oﬃce

Okayama Oﬃce
Kure Oﬃce

Chiba General Oﬃce
Chiba Shipyard

Chiba Oﬃce

Oita Works
Head Oﬃce

Higashi Kyushu Oﬃce

Tokyo Oﬃce
Chubu Oﬃce

Keihin Oﬃce

Nagoya Oﬃce
The total number of shareholders 57,388
Number ofshareholders

Number of
Shares Held

Shareholding
Ratio (%)

73

35,164,141

42.3

Individuals, etc.

56,52722,161,882

26.7

Foreign nationals

302

16,192,22019.5

Corporations other than ﬁnancial
institutions or stock companies

430

8,694,696

10.5

Category

Financial
institutions
42.3％

Makuhari Center Oﬃce

Oita General Oﬃce

Shareholding situation by each category of shareholders (As of March 31, 2018)
Corporations otherthan ﬁnancial
institutions or
stock companies
10.5％

Tamano Oﬃce

Financial institutions

Stock companies

56

885,778

1.1

Individuals,etc.
26.7％

Oversea Network

Mitsui E&S Machinery Europe Limited.
TGE Marine
Gas Engineering GmbH
Burmeister & Wain
Scandinavian Contractor A/S

Mitsui E&S (China) Co., Ltd.
MES Technoservice (Shanghai) Co., Ltd.
MES Ferrotec China Co.,Ltd.
Mitsuizosen Technoservice Taiwan Co., Ltd.

Major 10 shareholders (As of March 31, 2018)
Number of Shares Held(Thousand Shares)

Shareholding Ratio(%)

Japan Trustee Services Bank, Ltd. (Trust Account)

5,101

6.31%

The Master Trust Bank of Japan, Ltd. (Trust Account)

4,813

5.95%

Mitsui & Co., Ltd.

2,550

3.15%

Name

52

The 114th Bank

2,546

3.14%

Japan Trustee Services Bank, Ltd. (Trust Account 9)

2,344

2.89%

Japan Trustee Services Bank, Ltd.
(Trust Account for the retirement allowance for Sumitomo Mitsui Trust Bank, Limited)

2,331

2.88%

BNP PARIBAS SECURITIES SERVICES LUXEMBOURG/JASDEC/HENDERSON HHF SICAV

2,205

2.72%

Mitsui Life Insurance Company, Limited

1,600

1.97%

Japan Trustee Services Bank, Ltd. (Trust Account 4)

1,501

1.85%

Japan Trustee Services Bank, Ltd. (Trust Account 5)

1,380

1.70%

Corporate Action Report 2018

MES Technoservice
Machinery Construction
Logistics Industry andTrade Corporation

PACECO Corp.

Mitsui Thang Long Steel Construction Co., Ltd.
MES Technoservice Middle East W.L.L
DASH Engineering Philippines,Inc.
MES Technoservice Malaysia Sdn Bhd

MES (Thailand) Ltd.
MES Mitr Project Service Co.,Ltd.
MITSUI E&S ASIA PTE. LTD.
AZUMA Engineering (S) Pte Ltd.

Jakarta Representative Oﬃce
PT MES Machinery Indonesia

Engineers and Constructors
International,Inc.
MODEC International, Inc.

6-4, Tsukiji 5-chome, Chuo-ku, Tokyo 104-8439, Japan

www.mes.co.jp
1812FR10SCOP