Social Infrastructure &Industrial Systems Business
Strategy
Industrial & Social Infrastructure Systems Company
Hitachi Plant Technologies, Ltd.
Hitachi Industrial Equipment Systems Co., Ltd.

Hitachi IR Day 2011
June 16, 2011

Toshiaki Higashihara
Vice President and Executive Officer, Hitachi, Ltd.
President and Representative Director
Hitachi Plant Technologies, Ltd.
© Hitachi, Ltd. 2011. All rights reserved.

Social Infrastructure & Industrial Systems
Business Strategy

Contents

1. Business Overview
2. Market Trends
3. Business Policy and Growth Strategy
4. Business Performance Trends and Targets
5. Conclusion© Hitachi, Ltd. 2011. All rights reserved.

1-1 Business Overview (1) Revenues by Sector & Major Products*Industrial & Social Infrastructure Systems Company
Electric control systems for steel plants
Factory facility control systems

Water and sewage control
systems and electricalcomponent control
systems
Road control systems

Private FinanceInitiative for
Water supply
services

Uninterrupted
Power
Supplies

Solar power facilities forwater purification plants

Production control systems
Industrial-use PCs

SocialInfrastructure
systems
19%

Social infrastructure systems

Industrial systems

FY2010¥543.3 billion
Hitachi Industrial Equipment Systems Co., Ltd.
Programmablecontrollers
Power monitoring
systems

Industrial
systems
81%

Web controllers

Permanent magnet
Variable speed controlled
motorsscrew compressors
Inverter-driven
hoistsHitachi Plant Technologies, Ltd.

Pumps
Compressors

Amorphoustransformers
Power distribution
systems

Chemicals andpharmaceutical plants

Inverter-driven
water supply
pumps

Inverters

LCD manufacturing
equipment

High-efficiency
motors
Ink-jet printers

Production line equipment

Utility equipment

Industrial systems

Water treatment systems Air-conditioning systems

Social infrastructure
systems

Construction ofvarious plants

Industrial systems*Former Social Infrastructure Systems Company was divided to “Social Infrastructure Systems Company” and “Transportation Systems Company”, effective by April 1, 2011.

© Hitachi, Ltd. 2011. All rights reserved.

3

1-2 Business Overview (2) Collaborative Framework
Industrial & Social Infrastructure
Systems Company

Overall coordination of system engineering
services, and solutions sales

Innovate by fusing IT and technologies supportingsocial infrastructure and industrial systems
Hitachi Industrial Equipment
Systems Co., Ltd.

Small & medium-sizedcomponents/ services

Hitachi Plant Technologies, Ltd.

Large-sized components/
engineering/construction/
services© Hitachi, Ltd. 2011. All rights reserved.

4

1-3 Business Overview (3) Basic Growth Strategy Policies
Total solutions provision

Service business expansion

Acceleration of global expansion

Overall coordination of components,
systems, EPC, construction

Expand business scope(Lifecycle support) to maintenancefor products and plants

Strengthening of cooperation withlocal partners and the establishmentof production and service bases

Social infrastructure systems sector（ Water Business ）Water circulation
systems
Water and sewage
monitoring/
control systems

Pumps

Expansion of scope for orders
Total coordination of
peripheral equipment

Existing
Area

Operation &Maintenance・FM*５ 、SCM*６

ExpandingArea・Outsourcing of maintenancefor plant/equipment

BOO*1
BOT*2

O&M*3

Systems & EPC*4

Industrial systems sector

Service

ServiceBusiness Operation

One-stop
full support

Eco-Factories
Oil & Gas plants
Electric control systems
for steel plants

Large-sized compressors
Inverters motors

Components

Small andmedium-sizedcompressors
Hoists*1 BOO: Build Own & Operate *2 BOT: Build Operate & Transfer *3 O&M: Operation & Maintenance*4 EPC: Engineering Procurement & Construction *5 FM: Facility Management *6 SCM: Supply Chain Management© Hitachi, Ltd. 2011. All rights reserved.

5

1-4 Business Overview (4) Business Features
Various, high-value-added key component groups

Fusion of highly reliable control systems and IT

Water treatment equipment, industrial
machinery

Energy control and management
systems[Pumps, compressors, ink-jet printers, etc.][EnMS*2, HVAC control system for energy saving]

Industrial-use components

Monitoring and control systems

Power receiving equipment[Plant, electric-motor-driven mid-scale LNG plant*3,
sewage, manufacturing process, steel control
systems, etc.][Transformers, switches, etc.]

Simulation technologies[Drives：inverters, motors, PLCs*1, etc.][Forecasting, evaluation, analysis]*1 Programmable Logic Controller

Components

Systems*2 Energy Management System*3 0.5 million to 2.0 million tons/year class

Provide total solutions fusing core products and systems as well as IT
Water supply and sewage
operation businessComprehensive maintenance andmanagement

Services

Measurement and diagnostics business
Remote monitoring and energy-saving services
Full support through to operation,
maintenance and management

EngineeringAnd
construction

Water circulation and reuse systems
Air-conditioning systems and clean rooms
Chemical plants (Process license)
Project management capabilities
Global construction capabilities
Proprietary techniques(Sophisticated modularization
construction techniques, etc.)

Proud EPC track record© Hitachi, Ltd. 2011. All rights reserved.

6

1-5 Business Overview (5) Global expansion (1)Overseas Manufacturing/Servicing/Sales

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Hitachi Plant Technologies, Ltd.

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10

（5）

Hitachi Industrial Equipment
Systems Co., Ltd.

□

4

（3）

* Figures in brackets indicate joint ventures with local
partners and investments

Total

（1）

Europeandothers1

Americas■

Asia

Industrial & Social Infrastructure
Systems Company● Overseas Businesses/
Sales Bases

China■ Overseas Manufacturing/Servicing Bases●

Hitachi Plant Technologies, Ltd.

3

7

2

7

19

Hitachi Industrial Equipment Systems
Co., Ltd.

59

88

50

87

284

● Overseas sales bases for Hitachi Plant Technologies, Ltd.
● Overseas sales bases for Hitachi, Ltd.
Overseas sales bases for Hitachi Industrial Equipment Systems Co., Ltd.
are omitted© Hitachi, Ltd. 2011. All rights reserved.

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1-6 Business Overview (6) Global expansion (2)Expand and upgrade overseas production bases□ Hitachi Industrial Equipment (Nanjing) Co.,
Ltd. (Joint venture)
Reinforcement and expansion of supply capacity for
China
・ Compressors: launched large models (2010)
・ Increase and expand inverter production(2011)■ Hitachi Pump Manufacture (Wuxi) Co., Ltd.
(Joint venture)●●●

Manufacturing of large pumps(Established 2006, completed second factory in 2010)
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□ Hitachi Industrial Technology (Thailand),Ltd.
■(Joint venture)
Supply functions for Southeast Asia reinforced (2010)
・ Started production of high-efficiency motors
・ Series expansion for switches and vortex blowers

●

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■Hitachi Aqua-Tech Engineering Pte. Ltd.
Production, sales, and servicing of reverse osmosis systems（Became a holly-owned Subsidiary in 2009
Expand its operation base and change the name in 2010)© Hitachi, Ltd. 2011. All rights reserved.

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1-7 Business Overview (7) Global expansion (3)Expand Service business through the strengthening collaborations
with customers and local business partners■ Service bases (Middle
East)●

Servicingof process compressors●●(To be established in FY2011)
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■ Joint venture with Mayekawa ManufacturingCo., Ltd. (Brazil)
Sales and servicing of process compressors■(To be established in FY2011)

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■ Male’ Water and Sewerage Company Pvt. Ltd.
[Investment]
Water supply and sewage operation company in the Maldives（Hitachi Joins this company in 2010 with acquisition of 20% shares）© Hitachi, Ltd. 2011. All rights reserved.

9

Social Infrastructure & Industrial Systems
Business Strategy

Contents

1. Business Overview
2. Market Trends
3. Business Policy and Growth Strategy
4. Business Performance Trends and Targets
5. Conclusion© Hitachi, Ltd. 2011. All rights reserved.

2-1Market Trends (1) Social Infrastructure Systems Business- Water Business

Market Trends in Japan
Maturity of equipment market, decrease of investment in construction
Increase of upgrade demand as facilities become superannuatedGlobal Market Trends
High growth rate in management and operation, as well as EPC
Asia and Middle East becoming largest markets in the world■ Market Size by Field and Region

欧州

Latin
America¥86.5 trillion¥36.2 trillion
Management& operation

38.0

3.8%
Asia
& Pacific

19.3

48.5
EPC
& materials

EuropeNorth America

6.0%
Middle East
& Africa

16.9
2007

Market by Region2025¥86.5 trillion

2025

2007-2025 CAGR

* Source for by-market information: Global Water Market 2008, Ministry of Economy, Trade and Industry calculations; by-region information:
prepared based on the same materials© Hitachi, Ltd. 2011. All rights reserved.

11

2-2 Market Trends (2) Industrial Systems Business
Increasing energy demand centered on emerging economies → pressing need to improve energy efficiency
China and India account for most of the rise in global energy demandThis is spurring the oil and gas markets to find supply sources(increasing demand for natural gas as a source of clean energy)
Conversion from resource countries to product export countries (Iron ore → steel products)■ Primary Energy Demand■ Projected Steel Field Capex in
Emerging Economies
16,790 Mtoe

20,000
Mtoe*

RenewableenergyHydroelectric

15,000

China
India

10,000Non-OECD(Excl. China, India)

Nuclear

Oil

OECD
2000

2007

2015

2030

CAGR
%/year（2010-2015）

2010

2015

China

47,78578,026

10.3

India

7,505

19,697

21.3

Brazil

13,64435,85821.3(US$ million)

Gas

5,000

1980

CapitalExpenditures(Nominal)

Coal

2030

* Mtoe: 1 million tons of oil equivalent, source: Energy Demand-IEA World Energy Outlook 2009
Steel capex - Prepared by Hitachi Research Institute based on Global Insight database© Hitachi, Ltd. 2011. All rights reserved.

12

Social Infrastructure & Industrial Systems
Business Strategy

Contents

1. Business Overview
2. Market Trends
3. Business Policy and Growth Strategy
4. Business Performance Trends and Targets
5. Conclusion© Hitachi, Ltd. 2011. All rights reserved.

3-1 Business Policy
Innovate by fusing IT and technologies supporting social infrastructure and industrial systems

Group's water business

Expand service businesses in Japan
Fortify and expand overseas waterbusiness

Expand solutions business toaddress global needs

Expand highly efficient, environmentallyfriendly components, systems, andservicing businesses

Achieve full-scale entry into global

Socialmarkets by expanding the Hitachi
infrastructure

Industrial
systems(Eco factories, oil & gas, steel plant control systems)

RecoverySupportConcentrate management
resources on the recovery andrestoration of infrastructure

Overseas
Expansion
Support

Provide full support for Japanesecompanies expanding production
bases overseas

Provide support for the recovery and restoration ofwater infrastructure
Provide support for the recovery and restorationof factories and production lines

Supply total systems for components,
systems, and engineering/construction

FY2010 Results

FY2015 Targets

Revenues:¥543.3 billion
Overseas revenue ratio: 21%

Revenues:¥830 billion
Overseas revenue ratio: 40%© Hitachi, Ltd. 2011. All rights reserved.

14

3-2 Growth Strategy (1) Social Infrastructure Systems Business (1)Achieve full-scale entry into global markets by expanding the Hitachi Group's water business

Revenue Target

Business Expansion Measures

Revenue: ¥210 billion
Overseas revenue ratio: Over 35%
Operating income ratio: 6%
Roads, disaster prevention, etc.

Water business ¥200.0 billion¥210 billion

Overseas¥140 billion¥123 billion¥101.6 billion

FY2010(Actual)

FY2011FY2012Japan

FY2015

Expand service businesses in Japan■Strengthen product competitivenessStrengthen equipment renewal■Expand O&M*1 comprehensive contracts

Fortify and expand overseas
water business■Provide water environment solutions inemerging economies■Strengthen cooperation with local partners■Expand business in operation andmanagement domain
Use experience in Maldives■Provide total solutions fusing water treatment
systems and ITIntelligent water systems■Develop greater cooperation with central andlocal governments■Use experience in GWRA*2 and GWSTA*3*1: Operation & Maintenance*2: Limited Liability Partnership (LLP) Global Water Recycling and Reuse System Association, JAPAN*3: Global Water Recycling and Reuse Solution Technology Research Association© Hitachi, Ltd. 2011. All rights reserved.

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3-3 Growth Strategy (1) Social Infrastructure Systems Business (2)Develop the water business globally as a "Japanese water major"

Provide total solutions■ Water supply and sewage field (EPC, business operation and management) [Volume zone]■ Reuse water, sea water desalination, industrial-use water and wastewater fields(EPC, operation and management) [Growth zone]■ Regional water infrastructure construction(Hitachi's proposed concept: Intelligent water systems)■ Cultivate new area (Oil & Gas wastewater treatment and ballast water treatment, etc.)

Hitachi Group strengths■ Advanced water circulation systems(Membrane processing, microorganism treatment, pumps, etc.)

Hitachi Group's Vision
Services,maintenanceand management

Operation■ Advanced information systems

Water Major
Company A(Monitoring, control, simulation, etc.)

Regions targeted for sales expansion■ Middle East, Southeast Asia, China, India,
South America

Comprehensive
electricalequipment
manufacturer
Company B

Products andsystems

HitachiGroup

EPC© Hitachi, Ltd. 2011. All rights reserved.

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3-4 Growth Strategy (1) Social Infrastructure Systems Business (3)Provide total solutions

Japan

Expand service businesses in Japan

Strengthen product lineup■ Formed an alliance with DK Corporation
regarding water business services■New water supply pump with variable speed
control motor(March 2011)

・ Enables energy-saving operation via automaticpressure control
・ Provides clean water direct from the watersupply・ Combining knowledge resources regarding provision ofcomprehensive water services
Hitachi : maintenance and management of water supply facilities
DK Corporation : water charge collection business(October 2010)

Strengthening and expanding overseas water business: cooperation with local partners■Agreed on cooperation in the water
environment solutions business with Chengdu
Xingrong Group Co., Ltd.*1■Agreed on cooperation with Dongda
Group, Dalian

China(November 2010)
・ Joint participation (BOT/TOT*2) in construction andrefurbishment of water and sewage facilities
・ Application of Intelligent Water System(May 2011)・ Areas of cooperation include Intelligent Water Systems,
water/waste water/reused water/water distribution
management, sea water desalination, and urban infrastructure* 1: Major water business groups in 12 western regions (Gansu, Guizhou, Ningxia Hui, Qinghai, Shaanxi, Tibet, Xinjiang Uygur, Yunnan, Chongqing, Inner
Mongolia, Guangxi Zhuang)*2: Build Operate Transfer, Transfer Operate Transfer© Hitachi, Ltd. 2011. All rights reserved.

17

3-5 Growth Strategy (1) Social Infrastructure Systems Business (4)Provide total solutions
Undertaking two feasibility studies forwater circulation systems for Japan's Ministryof Economy, Trade and Industry(May2011)

India■Participate in project on export of environmentallyfriendly infrastructure, improve total solution
proposals for industrial complexes⇒Recycling of factory wastewater(Sumitomo Corporation, Kansai Electric Power Co.,
Ltd., Hitachi, Nippon Express Co., Ltd.)⇒Smart community centered on desalination ofsea water(Hitachi, ITOCHU Corporation, KYOCERA
Corporation, and others)

Power supply station for EV
Integrated control Center（Power・Water ・Electric Vehicle）
Eco Factory
Wastewater
treatment
Mega solar power station

Industrial
wastewater
treatment

Water
purification

Recycling Plant

Water
purification

Smart community

Phased introduction of Intelligent Water Systems into water management business in the Maldives

South
east
Asia

■Integration of customer data with Male Island facilities using AQUAMAP*⇒Network technologies leveraged to monitor and operate facilities on multiple islands
Male Island,
the Maldives

Customer Back Office System
information

AQUAMAP

Outlying islands
Island Network

MiddleEast

Active participation in sewage system construction project in Middle-East*： Pipeline information system employing computer mapping technology© Hitachi, Ltd. 2011. All rights reserved.

18

3-6 Growth Strategy (2) Industrial Systems Business (1)Expand solutions business to address global needs
Revenue Target

Business Expansion Measures

Revenues: ¥620.0 billion
Overseas revenue ratio: Over 40%
Operating income ratio: 5%■Eco factory solutions
Drive systems
Energy-saving systems (EnMS*)

Components
Systems, etc.

Expand highly efficient,environmentally friendly components,
systems and services businesses¥620billion¥520 billion¥470 billion¥441.7 billion

OverseasJapan■Oil＆Gas
・Expand electric-motor-driven
mid-scale LNG plant business through orderfor basic design received from Australia’s
Eastern Star Gas Limited・Expand sales of process compressors(Strengthen service system)■Electric control systems for steel plants
Expand orders in emerging economies bystrengthening local engineering capabilities:
China, India, etc.
FY2010(Actual)

FY2011FY2012FY2015■ Regions targeted for sales expansion
China, Southeast Asia, India, Middle East,
South America, Australia*：Energy Management System© Hitachi, Ltd. 2011. All rights reserved.

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3-7 Growth Strategy (2) Industrial Systems Business (2)Eco factory solutions
Wide-ranging solutions from consulting to products, systems and services help reduce CO 2
Management support with IT/consulting

Utility area

Plant & Factory

Optimal energy-saving and
CO2 reduction solutions

crane
Factory process & equipment

Pumps, Chillers andCompressors

UPS (Uninterrupted Power Supply)Power receiving equipment

Air conditioning system■ Amorphous transformer

Dust collection system
Wastewater treatment
OfficeHigh-voltage direct inverter
Monitoring and control system■ Power monitoring system (H-NET)

Private electric power generator

Solar power generation

Cogeneration system

Energy-saving solution
for offices

Unutilized hydro-energy
Lightning prevention system

Soil & groundwater cleanupWind power generation facility

Components for Factory
Automation■ inverters■ motors■ Ink-jet printers© Hitachi, Ltd. 2011. All rights reserved.

20

3-8 Growth Strategy (2) Industrial Systems Business (3)Eco factory solutions
Develop EnMS
■Control system for energy optimization based on H-NET(power monitoring system)
Japan・Monitoring and control in a range ofapplications, from factories(manufacturing) to buildings,
multi-store complexes,
and large-scale office operations

Office･Shop
H-NET

Lightings

Air conditioners

Head Quarter (Administrator's PC)
FactoryＷｅｂ
controller*１ H-NET

Showcases

Compressors

Pumps

Production
Equipment

Target growth markets with high-value-added key components

China /Southeast
Asia[Inverters, compressors, ink-jet printers, amorphous transformers]■Cater to demand from power grid facilities, applications in the food, beverage, and medicine sectors
etc., and compliance with energy-saving regulations■China/Southeast Asia: Strengthen further manufacturing/sales/service networks
Provide full support for Japanese companies expanding production
bases overseas■Plant-related orders from Japanese companies in the Asian belt zone*1
Materials factory (China)
Electrical components factory(China)Beverage factory (Vietnam)

Chemical products plant(Malaysia)
Materials factory (Malaysia)
Chemicals plant (Singapore)
Chemicals plant (Singapore)*1：Controller with communications interface*2：Refers to 24 coastal countries and regions, extending from Japan to the Arabian Peninsula, including China, ASEAN countries, India and the Middle East.

© Hitachi, Ltd. 2011. All rights reserved.

21

3-9 Growth Strategy (2) Industrial Systems Business (4)Ｏｉｌ＆Ｇａｓ
Expand service business for process compressors through collaboration with partners

MiddleEast &South
America■Alliance with Mayekawa Manufacturing Co., Ltd. in Brazil （March, 2011）⇒Jointly Establish a Sales and Maintenance service base forprocess compressors in Brazil(FY2011)⇒Exploring the South America Market■Plan to establish an maintenance base in Middle East
(To be established FY2011)⇒Expand maintenance services business

Product life cycle support(Handle outsourced maintenance operations)
Feasibility study (Plant)
Australia

Process compressor

FEED (basic design)

Receipt of EPC orderElectric-motor-driven mid-scale LNG plant: display total engineering (electrical) strengths
at the feasibility study stage■ Hitachi Group's integrated control technology for mechanical and electrical equipment■Order for FEED* from Australia's Eastern Star Gas received jointly with Toyo Engineering Corporation(March 2011)

Electric control systems for steel plants
India

Strengthening sales operations Leveraging collaborations with Mitsubishi-Hitachi Metals
Machinery, Inc. and trading companies
Ordered by Tata Steel Limited, India with Sojitsu and Mitsubishi-Hitachi Metals⇒ Remodeling for Pickling Line - Tandem Cold Mill of Jamshedpur steel plant （October, 2010）⇒ Hot Strip Mill for Kalinganagar plant in Orissa （June, 2011)*： Front-end Engineering Design© Hitachi, Ltd. 2011. All rights reserved.

22

3-10 Basic Growth Strategy Policies
Leverage closely collaborations with Industrial & Social Infrastructure Systems Company,
Hitachi Plant technologies and Hitachi Industrial Equipment Systems,
and Realizing collective strength

Total solutions provision
Overall coordination of components,
systems, EPC, construction

Service business expansion
Expand business scope(Lifecycle support) tomaintenance for products and plants

Acceleration of global expansion
Strengthening of cooperation with local partners andLocalizing of production and service bases’ operation

One-stop full support© Hitachi, Ltd. 2011. All rights reserved.

23

Social Infrastructure & Industrial Systems
Business Strategy

Contents

1. Business Overview
2. Market Trends
3. Business Policy and Growth Strategy
4. Business Performance Trends and Targets
5. Conclusion© Hitachi, Ltd. 2011. All rights reserved.

4 Business Performance Trends and Targets

40%

Revenues(Billion yen)

Operatingincome
ratio
(%)

29%
Overseas revenue ratio (%)

24%
19%

830

21%
660

577.2

543.3

593

Socialinfrastructure
Operatingincome ratio (%)

5.2%

5.0

500

3.6%

0

2.0%

0.8%

FY2009FY2010Industrial
systems

2.8%

FY2011FY2012FY20150© Hitachi, Ltd. 2011. All rights reserved.

25

Social Infrastructure & Industrial Systems
Business Strategy

Contents

1. Business Overview
2. Market Trends
3. Business Policy and Growth Strategy
4. Business Performance Trends and Targets
5. Conclusion© Hitachi, Ltd. 2011. All rights reserved.

5 Conclusion

FY2015 Targets
Revenues:¥830 billion

Overseas revenue ratio: 40%
Operating income ratio: 5%Innovate by fusing IT and technologies supportingsocial infrastructure and industrial systems© Hitachi, Ltd. 2011. All rights reserved.

27

Cautionary Statement
Certain statements found in this document may constitute “forward-looking statements” as defined in the U.S. Private Securities Litigation Reform Act of 1995. Such “forward-looking
statements” reflect management’s current views with respect to certain future events and financial performance and include any statement that does not directly relate to any historical or
current fact. Words such as “anticipate,” “believe,” “expect,” “estimate,” “forecast,” “intend,” “plan,” “project” and similar expressions which indicate future events and trends may identify“forward-looking statements.” Such statements are based on currently available information and are subject to various risks and uncertainties that could cause actual results to differ
materially from those projected or implied in the “forward-looking statements” and from historical trends. Certain “forward-looking statements” are based upon current assumptions of
future events which may not prove to be accurate. Undue reliance should not be placed on “forward-looking statements,” as such statements speak only as of the date of this document.
Factors that could cause actual results to differ materially from those projected or implied in any “forward-looking statement” and from historical trends include, but are not limited to:■economic conditions, including consumer spending and plant and equipment investment in Hitachi’s major markets, particularly Japan, Asia, the United States and Europe, as well as levels of demand in the
major industrial sectors Hitachi serves, including, without limitation, the information, electronics, automotive, construction and financial sectors;■exchange rate fluctuations of the yen and other currencies in which Hitachi makes significant sales or in which Hitachi’s assets and liabilities are denominated, particularly against the U.S. dollar and the euro;■uncertainty as to Hitachi’s ability to access, or access on favorable terms, liquidity or long-term financing;■uncertainty as to general market price levels for equity securities in Japan, declines in which may require Hitachi to write down equity securities that it holds;■the potential for significant losses on Hitachi’s investments in equity method affiliates;■increased commoditization of information technology products and digital media-related products and intensifying price competition for such products, particularly in the Components & Devices and the DigitalMedia & Consumer Products segments;■uncertainty as to Hitachi’s ability to continue to develop and market products that incorporate new technologies on a timely and cost-effective basis and to achieve market acceptance for such products;■rapid technological innovation;■the possibility of cost fluctuations during the lifetime of, or cancellation of, long-term contracts for which Hitachi uses the percentage-of-completion method to recognize revenue from sales;■fluctuations in the price of raw materials including, without limitation, petroleum and other materials, such as copper, steel, aluminum and synthetic resins or shortages of materials, parts and components;■fluctuations in product demand and industry capacity;■uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impact of fluctuations in product demand, exchange rates and/or price of raw materials or shortages of materials, partsand components;■uncertainty as to Hitachi’s ability to achieve the anticipated benefits of its strategy to strengthen its Social Innovation Business;■uncertainty as to the success of restructuring efforts to improve management efficiency by divesting or otherwise exiting underperforming businesses and to strengthen competitiveness and other cost reduction
measures;■general socioeconomic and political conditions and the regulatory and trade environment of countries where Hitachi conducts business, particularly Japan, Asia, the United States and Europe, including, without
limitation, direct or indirect restrictions by other nations on imports and differences in commercial and business customs including, without limitation, contract terms and conditions and labor relations;■uncertainty as to the success of alliances upon which Hitachi depends, some of which Hitachi may not control, with other corporations in the design and development of certain key products;■uncertainty as to Hitachi’s access to, or ability to protect, certain intellectual property rights, particularly those related to electronics and data processing technologies;■uncertainty as to the outcome of litigation, regulatory investigations and other legal proceedings of which the Company, its subsidiaries or its equity method affiliates have become or may become parties;■the possibility of incurring expenses resulting from any defects in products or services of Hitachi;■the possibility of disruption of Hitachi’s operations in Japan by earthquakes, tsunamis or other natural disasters, including the possibility of continuing adverse effects on Hitachi’s operations as a result of theearthquake and tsunami that struck northeastern Japan on March 11, 2011;■uncertainty as to Hitachi’s ability to maintain the integrity of its information systems, as well as Hitachi’s ability to protect its confidential information or that of its customers;■uncertainty as to the accuracy of key assumptions Hitachi uses to evaluate its significant employee benefit related costs; and■uncertainty as to Hitachi’s ability to attract and retain skilled personnel.

The factors listed above are not all-inclusive and are in addition to other factors contained in Hitachi’s periodic filings with the U.S. Securities and Exchange Commission and in othermaterials published by Hitachi.

© Hitachi, Ltd. 2011. All rights reserved.

28