Ac t ion
Corporate Action Repor t 2017

Environment

SystemInfrastructure
Engineering
Transportation

Machinery

Marine Logistics

Shipbuilding

EnergyMitsuiEngineering &Shipbuilding
Ocean Development

Contents
From the sea, onward
02

Action for “Environment & Energy”

04

Action for “Marine Logistics & Transportation”

06

Action for “Social & Industrial Infrastructure”

08

Topics : Ocean Resource Development

10

What’s MES Group

12

History

Our job of building ships has brought out the great potential of

14

Highlights

people and fostered numerous technologies.

16

Message from the President

The power to travel on the sea is essential for the development of our country,
which is surrounded by the ocean.
Mitsui Engineering & Shipbuilding was established on November 14, 1917

P02

with the mission of getting Japan to move forward.
Ships travel in the tough environment of the ocean while carrying lives.

Now, our technologies are applied not only in the marine engineering, but on the entire planet and beyond.

Action Report

20

Medium- & Long-Term Management Plans

We have begun to work on global issues, including ones in the fields of the environment and energy.

22

MES Group 2025 Vision

In April 2018, MES will become Mitsui E&S Holdings Co., Ltd.

24

Mid-term Business Plan 201726

Business Segment Overview

One hundred years after our foundation, we will instigate a new era with greater strength.

P16
Message from the President

28

Ship

30

Ocean Development

32

Machinery

34

Engineering

36

Research & Development

Long-Term

P20

Environment

SystemInfrastructure
Engineering38

Corporate Governance41

Outside Director Message

42

Communication

44

Environmental Preservation

47

Work Environment

48

Human Assets

50

Social Contributions

52

Company Profile

Medium-Term

Medium- & Long-Term
Management Plans

Transportation

P26
Business Segment Overview

Machinery

Marine Logistics

Shipbuilding

EnergyEditing Policy

Coverage of the report

Under our Company Philosophy of “To continue our role as a

▶ This report covers the period from April 2016 to March 2017.

trusted company, and as a trusted member of society” we at(However, some sections include information for April 2017 and thereafter.)

Mitsui Engineering and Shipbuilding Co., Ltd. uphold our▶ Issued in:corporate philosophy as we strive to be a company that uses

August 2017 (The last report was issued in July 2016.

manufacturing to contribute to social development and

The next report is planned to be issued in August 2018.)

preserve the global environment. We view all actions related

Guidelines used as reference

to achieving this goal as collective approach towards the○Ministry of the Environment, Environmental Reporting Guidelines

creation of corporate value.

○GRI, Sustainability Reporting Guidelines Version 4

The Corporate Action Report is a comprehensive summary of○ISO 26000

all the activities that we carried out in the fiscal year, covering
management strategies, vital strategies, and the business

Disclaimers

status, as well as environment conservation activities and our
Ocean Development

This report contains plans and forecasts that were current associal contribution initiatives. It is designed to provideof the date of publication, as well as descriptions about our

stakeholders with greater insight into company operations.

future business activities based on our management plans.
Please note that this information is based on the currently

Website pages

available information, and the actual contents of our▶ Overall corporate activities http://www.mes.co.jp/english/

business activities may differ from the contents of this report▶ Financial information http://www.mes.co.jp/english/investor/

due to future circumstances or the environment, or due to▶ Non-financial information http://www.mes.co.jp/english/company/

unanticipated events that may occur after the publication of

In April 2018, the MES Group will become Mitsui E&S Holdings Co., Ltd.

this report.

01
Corporate Action Report 2017

Action forEnvironment & Energy

Delivering energy anywhere in the world【Provision of ﬂoating gas power generation systems】

With populations in Asia and Africa expected tosecure labor locally, or where a power grid has yet tocontinue to grow, how to support ever-rising global

be developed.

energy consumption has been a serious issue.

Moreover, we are also a one-stop provider of

At MES, we have developed and manufacture ﬂoating

integrated ﬂoating gas power generation systems,

mobile power plants (power generation barges),which consist of environmentally friendly gas power

which are equipped with diesel engines and power

generation barges fueled by natural gas, ﬂoating

generators, together with Burmeister & Wain

storage and regasiﬁcation units (FSRU) provided by

Scandinavian Contractor A/S (BWSC), our subsidiary in

TGE Marine Gas Engineering GmbH (TGE), ourDenmark. We thus contribute to stable power supply

subsidiary, and small and midsize gas carriers.

in regions where it is diﬃcult to procure materials or

01

Small and midsize LNG carriers

03

By collaborating with TGE, which excels in theengineering of small and midsize gas carriers,
we focus on developing small-sized ships

Transportation

known as Type C, and small and midsize gas
carriers referred to as “MOSS Type.”
ME S

Power generation

TG E

Floating storage and regasiﬁcation unit (FSRU)An FSRU is an oﬀshore facility for accepting and regasifying
LNG, which is carried by LNG carriers from places of
production,in the ocean close to the place of consumption.
ME S

MODEC

TG E

02
Regasiﬁcation

Power generation barge
A power generation barge is a ﬂoating power
generation facility that is equipped with diesel

04

engines. It is installed oﬀshore by applying amooring method that uses chains. This enables
the facility to be moved to an area with power○Areas with no power gridneeds in the future, allowing a ﬂexible responseto the development of power supply.
ME S

BW S C

Supply02

03

Corporate Action Report 2017

Corporate Action Report 2017

○Areas where it is diﬃcult tobuild a power plant andsecure local labor

Action for

Marine Logistics & Transportation

Providing one-stop solutions fornatural gas transportation needs【Provision of consistent solutions from the upstream to the downstream processes ofnatural gas transportation projects】

Natural gas is attracting attention as a clean energy
with a small environmental footprint. Demand for gas
carriers for importing and exporting natural gas is
expected to grow with future increases in natural gas
consumption.
Working together with our subsidiary TGE Marine Gas
Engineering GmbH (TGE), a German gas carrierengineering company, we are aiding the developmentof the small and midsize gas carrier market. We willenter 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 andmidsize gas carriers, demand for which is expected toincrease in the future. In addition, we will provide
solutions that are not limited to shipbuilding throughan integrated provision of technologies and products
for handling gas fuels, including the electronicallycontrolled gas injection diesel engine (ME-GI), which
we developed jointly with MAN Diesel & Turbo SE, thelicensor, and fuel gas supply systems (FGSS).

01

Electronically controlled gas injection
diesel engine (ME-GI)
An ME-GI is a dual fuel engine that can be fueledby both natural gas (LNG) and heavy oil, despite
being a large, two-cycle low-speed diesel engine
with high thermal eﬃciency.

Consulting

02

Fuel gas supply systems (FGSS)
for LNG carriers

Consulting services including
the selection of ship
speciﬁcations for ship owners
ME S

TG E

Engineering
Provision of engineering services for small
LNG carriers, small LPG carriers, ethylene
carriers, LNG bunker ships, and others
ME S

TG E

03

High-pressure compressor
for FGSS

Procurement

High-pressure pumpfor FGSS

04

Provision of gas engineering
equipment
ME S

Kaji Technology

Construction
supervision

05

ME S

Development ofsmall and midsize LNG carriers
Demand for small and midsize carriers is
expected to grow when routes for short-distancetransportation aimed for eﬃcient intra-regional
supply are developed in the gas markets of India,
China, and Southeast Asia in the future.

Af ter-sales ser vices

e-GICSX

We have established facilities formaintenance and repairs at key locationsin Japan and overseas. At these facilities,
we provide services for the overall
lifecycle of marine diesel engines.

This equipment provides early
detection of abnormalities by analyzing
and monitoring big data, which include
not only data from multiple main engine
sensors but also navigation data, suchas weather and sea conditions.

04

05

Corporate Action Report 2017

Corporate Action Report 2017

After-sales
services

ME S

Technoservice Dept.

Action forSocial & Industrial Infrastructure

Evolving into a general hospitalthat protects the social infrastructure【Provision of one-stop services from investigation and diagnosis
to repairs, replacement, and renewal】

In Japan, we are seeing demand not only for theconstruction of new social infrastructure, but also for
maintenance measures for aging structures, withgrowing importance placed on technologies forinspecting and diagnosing structures. In 2015, weestablished the Infrastructure Business Department toconsolidate our resources that are dispersed acrossthe Group. We will provide one-stop services ranging
from investigation and diagnosis of social infrastructure
to their repair, replacement, and renewal by integrating
resources and cooperating with both internal andexternal parties.
Investigation and diagnosis are carried out by MES

and MES Testing & Research Center Co., Ltd., whichhave radar scanning technologies. In addition to
applying our original scanning technologies, we will
diﬀerentiate ourselves through alliance with Tonox
Corporation.
Repairs, maintenance, and renewal are conducted by
Mitsui Zosen Steel Structures Engineering Co., Ltd.,
which works on steel bridges, and DPS Bridge WorksCo., Ltd., which works on PC bridges. We provide
services by taking advantage of the fact that we havetechnologies and experience in both iron andconcrete within the Group, which is our strength.

Technologies for construction andrepair of prestressed concrete (PC) bridges

Integration of subsurface inspection (radar) technology andsurface inspection (laser) technology

DPS Bridge Works Co., Ltd., which is our subsidiary, caters toneeds for a longer service life of structures with its
technologies for constructing, repairing, and reinforcing PC
bridges and steel structures. For repair and reinforcement
works, the company provides comprehensive management,
ranging from investigations and diagnosis made by using thelatest equipment, to work done by applying the Outplate
Method, which can be applied to reinforcement work forvarious kinds of structures, and Naoshitaru*, a mortar material
for repairing cross sections.

We have developed a system (hybrid inspection
system) that permits simultaneous inspection of
surface conditions, such as cracks on roadsurfaces, and subsurface conditions of roads, suchas cavities. This was enabled by originaltechnologies in radar (electromagnetic waves)owned by MES and MES Testing & Research Center
Co., Ltd. and an alliance with Tonox Corporation.
ME S

MES Testing & Research Center

TONOX*Naoshitaru is a registered trademark of DPS Bridge Works Co., Ltd.

ME S

DPS Bridge Works

Repair,replacement,
and renewal

Investigations
and diagnosis

Technologies for constructing andrepairing steel bridges
Mitsui Zosen Steel Structures Engineering Co., Ltd., oursubsidiary, provides one-stop solutions ranging from planning,
engineering, and production to installation of bridges, steel
towers, and other steel structures. In repairs, reinforcement,
widening, and replacement of existing bridges, the company
has an extensive track record in improving seismic capacityand durability and measures for extending service life.
Moreover, based on its proven track record in ﬂoating
structures (PC hybrid and RC hybrid structures) that are essential
for coastal development, hybrid caisson, and other coastal
structures, the company plans and carries out the optimalengineering, production, and installation work as well as
inspection, repair, and reinforcement.
ME S

Mitsui Zosen Steel Structures Engineering

06

07

Corporate Action Report 2017

Corporate Action Report 2017

Topics

Ocean Resource Development

Making Japan one of the worldʼs leading
ocean resources powers【Creating next-generation ocean resource development systems】

Japan is a great marine nation with the worldʼs sixth
largest exclusive economic zone (EEZ) with territorial
water. Energy resources and mineral resources in thebottom of its seas will be highly valuable for economic
security and industrial development if they are minedand secured as domestically produced resources. The
MES Group is one of worldʼs leading players in thedomain of oﬀshore oilﬁeld development and also has aleading role in the development of shallow methane
hydrates harvesting technology. In 2016, we began topartner with MHWirth GmbH, a German company thatprovides oﬀshore drilling technologies and services
around the world. We aim to establish andFloating production, storage andoﬄoading system (FPSO)

commercialize shallow methane hydrates harvesting
technology by combining technologies of the twocompanies.
Concerning the development and practical applicationof underwater robots that are essential for searching foroﬀshore resources, we have a proven track record in the
production of robots designed for diﬀerent kinds ofsurveys, ranging from small underwater robots used inshallow sea areas to a large remotely operated vehicle(ROV) that is capable of travelling at a depth of 11,000
meters, the deepest in the world. We thus make a major
contribution to the marine resource development ofJapan.

Autonomous surface vehicle (ASV)An FPSO is an ocean-based facility that
produces oil and gas, stores produced oil in thefacilityʼs internal tanks, and then directly
supplies it to oil tankers. The FPSO is the mostpopular type of production facility,
representing over 60% of ﬂoating vessels formarine oil and gas production.

Communication

This is a small autonomous surface vehicle (ASV) based on a test
machine for evaluating unmanned surface vehicle technologies. It canbe operated remotely using the wireless communication system andcamera system mounted on it. In addition, it can sail on speciﬁed
routes autonomously.

Chikyu, a ship forinvestigating deep seabed
Production
and storage

Chikyu is the worldʼs ﬁrst riser
drilling-equipped science vessel.
For the ﬁrst time in the history of
mankind, it is capable of drilling
down into the mantle and theregion where major earthquakes
occur. MES was in charge of
constructing hull of this ship.

Drilling

Exploration

Maintenance

Shallow methane hydrates
and sea-ﬂoor hydrothermal
deposits
The Japanese coastal waters
are said to be world-leading
waters in terms of sea-ﬂoor
hydrothermal deposits and theamount of methane hydrates
deposit. Projects are underway
for the practical utilization ofthese resources.

Power supply

Remotely operated vehicle(ROV)
An ROV is an underwater robot that isconnected with the mother ship via
power supply and communication
cables and is remotely operated fromthe mother ship. Small ROVs are usedin shallow sea areas, while large ROVs
are capable of cruising at a depth of
11,000 meters, the deepest in theworld. ROVs are used to inspect
failures of undersea communication
cables, undersea oilﬁeld pipes, andsimilar equipment as well as toobserve deep-sea ﬂoors.

Exploration

Non-contact
power supply system

Autonomous underwater vehicle (AUV)

A non-contact power supply system is a docking station that is used
for supplying power to AUVs under the sea and for data
communication with equipment on the water. While AUVs excel inmobility because they are not connected to the mother ship via power
supply/communication cables, the duration of the time during which
they remain active is limited. We are developing a non-contact power
supply system that will enable continuous inspections andexplorations over a long time and across a wide range by supplying
power to AUVs under the water.

An AUV is an underwater inspection robot that is notconnected to the mother ship vial power supply/
communication cable but travels underwater based on a
program created in advance. There are various types of AUV,
including those that can measure the seabed topography
over a wide range by using ultrasound, those that measure
the topography with high resolution by using camera
systems mounted on them, and those that are capable ofthree-dimensional mapping.

08

09

Corporate Action Report 2017

Corporate Action Report 2017

What’s MES Group
Company Philosophy

Business domains

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

Ship

Ocean development

MachineryEngineering

We build a wide range of ships,
including bulk carriers, which areused to transport coal, iron ore,cereal grains, and other commodities,
as well as crude oil tankers and LNG
carriers for transporting liqueﬁed
natural gas (LNG). We also build
ships intended for public oﬃces suchas the Ministry of Defense and theJapan Coast Guard.

We develop and manufacture
products that are essential formarine resource development. They
include ﬂoating production storageand oﬄoading system (FPSO), which
is used for producing and storing
petroleum and gas at sea, submersibles,
and unmanned probes.

We manufacture machines fordiverse industries, including marine
diesel engines, compressors andturbines and cogeneration systems
for power generation, which are usedat petrochemical plants, and container
cranes for ports.

We construct various plants,
including petrochemical plants,
sulfuric acid plants, phosphoric acidplants, and fertilizer plants. We also
work on a large number of products
related to the environment and energy,
including those in the building andcivil engineering ﬁelds, biogas plants,
and biomass plants.

Net sales（FY2017）

￥

731.5

Per formancebillionNumber of employees（As of March 31, 2017）

Operating income￥

8.3

billionOrdinary income

14.9

￥

billion

13,171peopleShip

Marine diesel engines

Petrochemical plants

Container cranes for ports

Total number of shipsthat we have built

Domestic market share

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

Domestic market share

No.1

1,300

No.1

2,000

Established in

隻

件

FPSO business

Power generation plants

Small-sized gas carriers

MODEC, Inc.

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

TGE Marine Gas Engineering GmbHOne of the
top two companies
in the world

175 plants
in 53 countries

World-classengineering company

Number of Group companies

1917

100

More than

10

11

Corporate Action Report 2017

Corporate Action Report 2017

History

2016〜
Towards the next 100 years

core, the MES Group has always ventured boldly into new domains and has continued to evolved

2000〜with the needs of the times. Our domains have expanded, and we have grown to become an

Business model innovations

Shipbuilding was essential for the modernization of Japan. With shipbuilding technologies at theengineering group that works on ship and ocean projects, machinery, and even plant construction.
We aim to create greater value. Our history of challenges and innovations continues.

1945〜

Formulation of the MES Group 2025 Vision

Evolving into a comprehensive
heavy manufacturer

1917〜

In 2016, we developed a long-term vision that shows our future
vision, direction, and ideal situation. We have deﬁned our ideal
situation as “The MES Group will evolve into an engineering teamStrengthening energy-saving,environmentally friendly technologies

Taking on challenges forthe modernization of Japanthat creates social value,” describing a company that provides
value in response to social issues and market needs in a way thattranscends the existing framework of ideas.

In response to the rising demand for environmentally friendly ships

Launch of steel structure businessWe established the production system inthe steel structure sector. Having started
with the construction of road bridges

MES Group
Visionand energy-saving ships, we developed next-generation
environmentally friendly ships with low fuel consumption. We alsobegan to develop other eco-friendly products, such as marine diesel
engines that conform to international emission regulations.

from small and midsize bridges, we became

Spin-oﬀ as an independent company
and change of the name to
Mitsui Engineering & Shipbuilding
Established as the Shipbuilding
Division of Mitsui & Co., Ltd.
On November 14, 1917, we were
founded as the Shipbuilding Division of
Mitsui & Co., Ltd. This was the beginningof our history as one of Japanʼs leading
shipbuilding companies.

a company that was able to receive orders
for large bridges from Japan Highway
Public Corporation and other clients.

100th anniversary

In 1937, the Shipbuilding Division was

The MES Group will celebrate its centenary in November 2017. Our

spun oﬀ from Mitsui & Co., Ltd. to become

businesses, which began with shipbuilding, have expanded

Tama Shipyard Co., Ltd., taking its ﬁrst

globally, and we have evolved into an engineering group withstep as an independent company consisting

more than 100 Group companies and over 13,000 employees. We

of ﬁve organizations: the Headquarters,

continue to innovate to ensure that the MES Group continues to

Kobe Sales Oﬃce, hospital, General Aﬀairs

evolve through the next 100 years.

Department, and Engineering Department.
Izumiotsu Bridge (1976)

Entry into the crane industry

In 1924, we built Akagisan Maru, Japanʼs ﬁrst shipwith a diesel engine.

Introduction of technologies on
marine diesel engines

Tama Shipyard (1952)

Entry to the ﬁeld ofplant construction
We were involved in the plant construction

In 1926, we concluded a technicalfor Mitsui Petrochemical Industries Ltd.,

licensing agreement with Burmeister &which was established in 1955. This was

Wain A/S (B&W) of Denmark to manufacture

our ﬁrst step toward the business ofand sell marine diesel engines. In 1928,

petrochemical plant construction, which

we completed the ﬁrst Mitsui-B&W diesel

we subsequently launched.

engine.

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

Listing of MODEC, Inc.

In 1961, we concluded a technical licensing

In July 2003, MODEC Inc. was listed on the Tokyo Stock Exchange

agreement with PACECO., Inc. of thefor the ﬁrst time as a subsidiary of MES. On June 1, 2004, theUnited States. We thus began to promotecompanyʼs stock listing was upgraded to the First Section of thethe spread of containerization and delivered

Tokyo Stock Exchange, and the company has continued to makemany port cranes at home and abroad.

rapid progress today.

Expansion ofrotating machine businessMoving to a holding company structure

In the 1960s, we entered the centrifugal
At the MES Group, we have begun preparations to move to acompressor and reciprocating compressor

holding company structure by April 1, 2018. To enable groupsector by introducing advanced technologies

management with greater penetration, we will spin oﬀ our shipfrom Europe. We continued to produce

and ocean business, machinery and systems business, andtechnological innovations and worked

engineering business, making them operating companies. At theon axial compressors, steam turbines,

same time, we will change our trade name to Mitsui E&S Holdings

and similar equipment.

Co., Ltd. and make a fresh start as the new Mitsui E&S Group.

Entry into the onshore sector

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

In the 1930s, we built rayon plants andProvision of lifecycle solutions

manufactured various devices and steel
pipes. This became the foundation for

In addition to Engineering, Procurement, and Construction (EPC),

our subsequent entry into the ﬁelds of

we began to provide engineering services for the entire lifecycle

chemical industrial equipment and steel
structures.

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

of products, from planning to dismantling, through maintenanceAn axial compressor (1980)

and after-sales services.

1213

Corporate Action Report 2017

Corporate Action Report 2017

Highlights(JPY million)

Financial Results

FY 2013

FY 2014

FY 2015

FY 2016

FY 2017

FY 2017

New order by Segment (JPY 100 million)(For year ended March 31, 2017)

New Orders Received

662,556

1,107,750

959,784

609,621516,577

Net Sales

577,093670,067

816,520805,413

731,464

Operating Income

24,001

19,96913,298

11,813

8,304

Ordinary Income

26,162

26,17914,89915,07814,859Net Income ※1△8,20742,854

9,463

7,599

12,194394

OthersEngineering
Cash Flow
Operating Cash Flow

FY 2013

FY 2014

FY 2015

FY 2016

FY 2017

47,182

14,49915,16729,802△7,843△12,100△ 37,312△ 32,385△ 34,599△ 28,753

Free Cash Flow

35,082△ 22,813△17,218△4,797△ 36,596

Financing Cash Flow (Loss)△4,793

15,531△4,374

48,216

19,401

Cash and Cash Equivalents

106,192

111,926

94,664

135,747

115,620

Investing Cash Flow (Loss)

1,499

Ship

677

Ocean
Development

927

5,166
Machinery

1,668

Ship

1,267

Ocean
Development

2,284

Sales by Segment (JPY 100 million)
Financial Position

FY 2013

FY 2014

FY 2015

FY 2016

FY 2017

Net Assets

207,313323,608347,305

343,853367,608

Total Assets

660,397

932,896

1,074,563

1,094,042

1,096,735

Interest-bearing Debt * 2

148,256

187,831

188,313239,871

265,175

Per Share Information

FY 2013

FY 2014

FY 2015

FY 2016

△9.91

51.80

11.63

9.40

15.09

BPS (Net Assets per Share)

212.24266.64292.86290.48309.78Dividends per Share

3.0

2.0

2.0

4.0

3.0

Share Price at the year end

166

218

205

168

172

FY 2013

FY 2014

FY 2015

FY 2016

1,626

7,315
1,748

Machinery

Operating Income

FY 2017

Shareholders' Equity to Total Assets (%)

26.6

23.6

22.0

21.5

22.8

ROE (Return of Equity) (%)

△4.6

21.6

4.1

3.2

5.0

0.8

0.9

0.8

1.0

1.1

D/E Ratio

Engineering

FY 2017

EPS (Net Income per Share)

Key Financial Indicator

389

Others179

200(JPY 100 million)

148

100

27

0

Non ﬁnancial Information

FY 2013

FY 2014

FY 2015

FY 2016

FY 2017

Employees (Consolidated)

9,881

12,055

12,291

12,705

13,171

Total Energy Consumption

1,290

1,175

1,265

1,300

1,305

6.70

6.90

8.14

8.13

8.20

CO 2 Emission※1 Proﬁt(losses) attributable to owners of parent

-100

-98
-173

-200

Ship

Ocean
Development

MachineryEngineering※2 Excluding lease liabilities

14

15

Corporate Action Report 2017

Corporate Action Report 2017

OthersMessage from the President

As an engineering team,the MES Group will continue tocreate new value by maximizing
its strengths collectively.

Another achievement that I feel we have madeequity participation. We have yet to achieve

is that the terms “engineering” and “life cycle”

a suﬃcient milestone from the viewpoint of

have begun to take root in the company. In

earnings, but I believe that the reform of ourthe ﬁeld of engineering, we made the Germanawareness about business models has madegas engineering company TGE Marine Gas

progress. Our approach to business represented

Engineering GmbH (TGE) one of our subsidiaries

by “engineering” and “life cycle,” which goesin 2015. Needless to say, the gas carrier

beyond EPC, unlike our previous approach,market is a global growth market. I also think,has been instilled in the company. This has, I

however, that this move was very meaningful

believe, begun to be reﬂected in our portfolio

in that it allowed us to instill the idea, both

values.

internally and externally, that the MES Group

President/Representative Director & CEO

operates under an engineering-oriented

While we can see certain achievements, wemanagement system.

also posted huge losses from particular
projects. This is a matter of great regret forOn the other hand, “life cycle” is an engineering

me as the business manager, and I regard

concept of contributing not only to EPC

the strengthening of risk management as an(engineering, procurement, and construction)

essential task under the Mid-Term Businessbut to the entire life cycle of a product, from

Plan 2017. I take pride in the fact that we haveplanning to dismantling, through maintenance,

extremely advanced capabilities in technicalafter-sales services, and other services. In MBP14,

aspects such as engineering, design, andwe positioned “Expansion of Business

manufacturing. On the other hand, I recognize

Engagement and Related Service” as one ofthat our ability to manage global risks was

the important measures and focused on the

insuﬃcient. We will strive to prevent the

expansion of our overseas after-sales network

recurrence of the loss by strengthening ourand business engagement in the form ofskills regarding contracts in global ﬁelds.

Deepening group management
In the MES Group 2025 Vision, which wehigh proﬁt means that we provide customers

formulated in 2016, we have set the ideal

with highly valuable services accordingly.

Proﬁt Stability ‒.” The composition of eachvision for the MES Group in FY2026 (year

So, what can we do to continue to remain

business model is close to the target image

ending March 31, 2026) as an “engineeringvaluable for customers and society ?

for FY2017, and I feel that our business model

team that creates social value.” We have also

We are now pressed to think beyond theinnovation and business model innovation

innovation, which has been a consistent

set “net sales of 1.1 trillion yen and an ordinary

existing framework of manufacturing.

for the purpose of achieving “Well-balanced

focus for us since FY2014, has been making

income rate of 6%” as our quantitative target.

Portfolio -- Sustainable Growth and Solid

steady progress.

As the ﬁrst step towards the target, we

In the process, it will be important to “maximize

formulated the Mid-Term Business PlanMES Group strengths collectively.” The MES

2017 (MBP17) in February 2017.

Group, which was founded as a shipbuilder,

Review of FY2017（Year ended March 31, 2017）
For the MES Group, FY2017 was the ﬁnal yearof the Mid-Term Business Plan 2014 (MBP14).
Under MBP14, we promoted business domain

Composition of each business modelhas grown into an engineering group with

45%

20%

32%

FY2013
results

23%30%

FY2017
results
35%

Business Engagement and Related Service

25%
Target image
for FY2017

45%

Engineering Business

45%

Manufacturing Business

In MBP17, we have set the ideal vision for

more than 100 aﬃliates at home and abroad.

FY2020 (Year ending March 31, 2020) theWe can provide solutions that cater to customer

ﬁnal year of the plan, as “Maximize MES Groupneeds by combining the resources andstrengths collectively to improve proﬁtability

products of our group. This means the provisionand stabilize earnings.” As speciﬁc quantitativeof total solutions, such as creating a systemtargets, we have set net sales of 920.0 billion

that fulﬁlls the demand for lower electric

yen and ordinary income of 37.0 billion yen.

power cost instead of only delivering

We are therefore strongly committed to

power-generating equipment and a system

improving proﬁtability. Proﬁt is a share ofthat fulﬁlls the demand for highly eﬃcientthe earnings of customers, and achieving alogistics instead of just delivering a port crane.

16

17

Corporate Action Report 2017

Corporate Action Report 2017

MES Group 2025 Vision：
Our long-term vision is introducedon pages 20 and 21 of this report.

Mid-Term Business Plan 2017:
Details of our mid-term businessplan beginning in 2017 are
introduced on pages 22 to 27 ofthis report.

“ We can create unique business models
by combining businesses
in which the MES Group engages.

”

A photo taken with Mr. Bentzen (right), who is the chairman of BWSC,
our subsidiary in Denmark, and Mr. Jensen (left), who is the president of BWSC.

Tamano City in Okayama Prefecture, where

domains have expanded globally, making it

Mitsui Engineering & Shipbuilding Co., Ltd.

essential to develop management

was founded, will establish a technical course

capabilities in global ﬁelds. For this purpose,at a commercial high school in the city in

we will dispatch our young and mid-level

FY2018 in order to secure human resources

employees to our overseas subsidiaries andfor the manufacturing industry, which is thesend young engineers to overseas plants forcityʼs core industry. We will send our experienced

practical training and other purposes. We

engineers to the high school to have themwill thus focus our eﬀorts on the proactive

instruct students and oﬀer our Skills Training

development of human resources in theCenter to the high school as a venue for the

global environment. To move in the direction

practical training of the students. We willof new engineering, a target set by the MES

thus support the development of skilledGroup, we need to do more than just lookhuman resources in a proactive manner.

around ourselves or inward. We need tolook outward, gain practical experience, andAt present, we have yet to maximize theour subsidiary in Denmark, and TGE of Germany.

groupʼs collective strengths in this way.

These and other projects, in which we take

However, the buds of new business haveadvantage of our groupʼs unique, collective

begun to be seen in some projects. In thestrengths, are taking shape.

project on ﬂoating production storage andYet another important factor is the development
Projects in which we takeadvantage of our collective
strengths:
The projects in which we
maximize MES Group strengths
collectively are introduced on
pages 2 to 7 of this report.

deepen our knowledge in the global ﬁeld.

of global human resources. Our business

Human resource development：
Our initiatives for humanresource development are
introduced on page 49 of thisreport.
Development of global humanresources:
Our initiatives for developing
global human resources are
introduced on page 49 of thisreport.

Becoming Mitsui E&S Holdings in April 2018oﬄoading system (FPSO), we promote

As a manufacturing company with 100 years

cooperation and collaboration with ourof history, we have developed a high level ofI am concerned that we will not be able to

MES Groupʼs corporate value by fostering an

subsidiary MODEC, Inc. In addition totechnological capabilities and production

achieve the target we set in our long-term

organic sense of unity through the formulation

collaborating in terms of the manufacturingbases. Because of this, we do everythingvision unless we change the currentof a business plan for the overall group andaspect, such as building hulls and topsides,

ourselves, which is another characteristic ofmanagement system. To achieve the target,

other strategies, and by consolidating ourwe are enhancing and strengthening theours. To respond promptly to customer needs,

we must further accelerate the innovation

management resources on the three business

related services. For example, we began

it is essential to be proactive in adopting andthat we have been focusing on since MBP14.

domains that we position as growth domains

investing in a special purpose company (SPC)

applying the capabilities of external parties,

We will proceed with organizational reformin the MES Group 2025 Vision.

that implements an FPSO charter projectsuch as business collaborations and M&A,

by taking the 100th anniversary as an(owning and operating FPSO and providing

not to mention collaborating within theopportunity to make a fresh start. We have

Our 100 years of history since our foundation

maintenance and inspection services). We

group. We will strive to create new businesses

begun preparations to move to a holding

has been a history of challenges and reforms.

have also developed a barge system for gas

by thinking beyond the framework of thecompany structure through an absorption-type

We are now facing another major turning point.

power generation jointly with Burmeister &MES Groupʼs previous business models.

company split on April 1, 2018.

Wain Scandinavian Contractor A/S (BWSC),

When we move to a holding company

For sustainable growth
The businesses of the MES Group, including

environment-friendly ships. At the same

marine logistics that use ships and port cranes,

time, we should contribute to solving social

the supply of energy resources such as oﬀshore

issues in the three business domains

oil and natural gas, and environmental energy

speciﬁed in the MES Group 2025 Vision,

such as biomass and biogas, are all built on

which I believe will lead to our sustainable

our planet. In addition, the operation of thesegrowth.

businesses involves the emission ofsubstances that aﬀect the global environment,

I believe that another important factor forsuch as CO2, NOx (nitrogen oxide), and SOx

achieving sustainable growth is “people.”(sulfur oxide). To continue businesses while

The future of the MES Group depends onprotecting the global environment, it is essential

whether we can continue to secure people

to participate in solving issues proactively in

who participate in our businesses. This involves

addition to reﬂecting considerations for thetwo issues. One is how to secure excellent

global environment in our products. We takeskilled human resources who will be involved

initiatives to reduce the environmental

in manufacturing. In the face of the decline

impact through products, including theof the population and the falling birthrate

development of engines conforming to gas

and the aging population, securing humanemission regulations and next-generation

resources is a pressing task for manufacturers.

Actions we take in the threedomains to focus our strengths on:
Speciﬁc actions to take in thethree domains on which to focus
our strengths, which we
speciﬁed in our long-term
vision, are introduced on pages
2 to 7 of this report.

To maximize MES Group strengths collectively,

structure in April 2018, the MES Group willas I mentioned above, we will turn into achange its trade name to Mitsui E&S Holdings

holding company by splitting oﬀ the shipCo., Ltd. and make a fresh start as the new

and ocean business, machinery and systems

Mitsui E&S Group. We humbly ask ourbusiness, and engineering business to makestakeholders to continue supporting us

them operating companies. Each operatingfrom a medium- and long-term perspective

company will strive to improve our corporate

and cooperate further with us.

value further by formulating and implementing
strategies more quickly, changing strategies
ﬂexibly in response to changes in the external
environment, implementing bold strategies
such as M&A (including business tie-ups)
with other companies, and promoting
selection and concentration. On the other“ We aim to be a corporate groupthat has greater existential
value globally.

”

hand, the pure holding company will strengthen
the system for cooperation between
operating companies, which will be more
independent in terms of business, and groupcompanies. It will also strive to improve theIn April 2018, the MES Group will transform into Mitsui E&S Holdings.

18

19

Corporate Action Report 2017

Corporate Action Report 2017

Medium- & Long-Term Management Plans
We launched the new Mid-Term Business Plan in 2017 as the ﬁrst step toward achieving the MESGroup 2025 Vision, which is the long-term vision of the MES Group. In this plan, we have set“Maximize MES Group strengths collectively to improve proﬁtability and stabilize earnings” as ourideal vision, under which we pursue innovations aiming to ensure that we achieve our long-term
vision.

MES Group 2025 Vision

Ideal Situation

Long-term vision

Domains of our focus

Numerical targets（FY2026 : Year ending March 31, 2026）(2025)Engineering teamthat creates social value

P22

Environment & Energy

Net sales : ¥1.1 trillion

Marine Logistics & Transportation

Ordinary income rate : 6%

Social & Industrial Infrastructure

Mid-term Business Plan 2017
Key strategies
Ideal Situation

Mid-Term
Business Plan 2017

1. Improving added value of products & services
2. Reforming structure of manufacturing & EPC

Maximize MES Group strengths
collectively to improve proﬁtability
and stabilize earnings

P24

Mid-Term
Business Plan
2020

3. Expanding & enhancing ancillary services
Numerical targets (FY2020 : Year ending March 31, 2020)

Mid-Term
Business Plan
2023

Net sales: ¥920 billion
Ordinary income: ¥37.0 billion

Perceived businessenvironment○ General○ Environment & Energy○ Marine Logistics & Transportation○ Social & Industrial Infrastructure□ Market expansion attributable to theeconomic growth of emerging
countries and business expansion
attributable to the development of an
information-intensive society.

□ Oﬀshore oil and gas development
projects: Predicted to increase again in
the medium to long terms.

□ Shipbuilding: Fierce price competition continues due to a decline in new
shipbuilding demand.

□ Industrial machinery: Demand for upgrades andrenovations has been growing while demand for
new construction has remained weak.

□ Uncertain outlook of the global
economy, which includes the formationof economic blocs and a slowdown in
the growth of emerging countries.
□ Increased volatility of the exchange
market and resource industry.

□ Electricity and other energy: Increase indemand driven by the development ofemerging countries.
□ Renewable and clean energy: Demand
continues, driven by rising environmental
awareness.

□ Marine engine and equipment: Demand for environmentally friendly
technologies has been rising although demand for ship engines has been
declining due to the continued excess capacity.
□ Container cranes: Demand is increasing in Southeast Asia, Latin America, andother regions. Demand for the renewal and upgrade of those cranes has also
been brisk.
□ Maintenance, inspections and upgrades: There remains strong demand for
projects for improving environmental friendliness/energy eﬃciency andthose for extending the service life, despite the uncertain economic outlook.
□ Gas products: Demand has been increasing due to the global shift to clean energy.

20

21

Corporate Action Report 2017

Corporate Action Report 2017

□ Public works projects: Demand has been growing
for large-scale upgrades and renovations, including
the full-scale implementation of measures fordeteriorating infrastructure.
□ Chemical industry: Investments in the industry
have been recovering but it will take a while
before a full-scale recovery occurs, due to theuncertainty of the economic environment.

MES Group 2025 Vision

Marine Logistics & Transportation

We will contribute to social development by providing
energy-saving and environmental performance,
fuel diversity, and labor-saving equipment
The MES Group 2025 Vision outlines the MES Groupʼs long-term direction for the period between

The economic development of developing countries is expected to result in an

ﬁscal 2017 and ﬁscal 2026. To achieve the MES Group company philosophy of “To continue working

increase in marine transportation volume. The MES Groupʼs work in port logistics

as a company trusted by society and individuals through our products and services,” we outlined thehas included providing container cranes and other structures, not to mention

direction of our future initiatives based on an evaluation of our rapidly changing externalbuilding ships. Accordingly, the MES Group is expected to serve as a marine logistics

environment.

professional with expertise in every aspect of the global supply chain. The MESGroup excels not only at manufacturing hardware, but also at the developmentof related software. By combining our strengths in both hardware and software,

Ideal Situation of the MES Group

we can achieve even greater innovation in the ﬁeld of marine logistics and

An engineering team that creates social valuetransportation, such as use of IT for engine control and container terminal management.
Major products

Diverse products
and services

Engineering prowess

Connections with customers
and partner corporations○ Port cranes○ Ships○ Marine diesel engines

Commitment to manufacturing
and engineering

Quantitative Target

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

Marine Logistics&
Transportation

Electronically-controlled duel fuel gas injection
diesel engine (ME-LGI)

Social & Industrial Infrastructure

We will contribute to creating a safe and comfortableliving environment by providing the plant facilities
and public transportation infrastructure vitalto the development of developing countries
and the maintenance services necessary for infrastructure
in Japan and other advanced economies.

Environment & Energy

We will contribute to the future of a sustainable earth
through the eﬀective utilization of ocean resources, energy
and waste products.

Medium- and small-sized gas carriers

Environment& Energy

Asia and Africa are projected to experience dramatic population growth. How

Developing countries in Asia and Africa require social and industrial

will we support the subsequent increase in global energy consumption? We haveinfrastructure and facilities. We are heavily involved in developing countries,

reached a point in time where the MES Group must make even greaterfrom bridge construction in China and Vietnam to power plant construction incontributions to energy creation. The MES Group is already widely involved inIndonesia and chemical plant construction in the Middle East and Southeast Asia.

energy creation, including the development of renewable energies such as wind
power, bio-gas, and biomass power plants, and we are participating in the ocean
resource development sector by constructing ﬂoating production, storage, andoﬄoading (FPSO) system for oﬀshore oil and gas production. Moving forward,
we will further concentrate and strengthen our know-how and resources.
Major
products○ Ocean development and submersible equipment○ Environmental plants○ Renewable energy○ Power generation plants

Floating production, storage, and oﬄoading(FPSO) system

Gas power generation barge

The three domains
on which we will makefull-scale eﬀorts

Social &Industrial
Infrastructure

Now is the time for us to fuse the various product technologies available to us toprovide new solutions. In Japan and other advanced economies, the need for ourmaintenance technology as a measure against aging infrastructure will only
grow stronger. We can provide new solutions in these segments as well by fusing
technologies such as radar and robotics-based safety management.
Major
products○ Infrastructure maintenance○ Chemical plants○ Bridges○ Industrial machinery○ National defense

Vehicle for radar inspection

Bridge22

23

Corporate Action Report 2017

Corporate Action Report 2017

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

Improving added value of products & services

Key strategy 1

Mid-Term Business Plan 2023. This series of our medium-term business plans constitute a long-term
strategy for achieving our 2025 Vision.

Improving our planning ability and capability of making proposals

Under the vision of “Maximize MES Group strengths collectively to improve proﬁtability and stabilize○ Formulating a strategy for creating value for society based on the three domains

earnings,” we will make best use of the MES Groupʼs network and resources, in our eﬀorts to achieve○ Increasing our competitiveness in the service domain by strengthening intra-group cooperation

stable earnings and improve our corporate value.

and alliances with other companies

Improving our product development capability○ Enhancing technology and product development in view of the future market

Our Ideal Future by 2020 (Year ending March 31, 2020)(energy-saving/ labor-saving/ environmental performance)○ Strengthening technologies for increasing the competitiveness of our core products

Maximize MES Group strengths collectively to
improve proﬁtability and stabilize earnings

Reforming structure of manufacturing & EPC

Key strategy 2

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

Key strategy 1

Key strategy 2

Key strategy 3
Establishing a system for ﬂexible EPC○ Promoting collaboration within the Group in the ﬁeld of ocean business

Improving added value

Reforming structure of

Expanding & enhancing

of products & services

manufacturing & EPC

ancillary services

Cost competitiveness○ Strengthening cooperation within the Group in the ﬁeld of renewable energy/gas power generation

Expanding & enhancing ancillary services

Key strategy 3

Diﬀerentiation

Cost competitiveness

Enhancing domains and areas of services we provide

Stabilized earnings○ 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

Robust group management

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)

Reinforced business foundation

Robust group management

Numerical
targets

Net sales¥920 billion

Ordinary income¥37 billion

Ordinary income rate
ROIC

4%

Organization andhuman resources○ Strategic use of Group companies (clarifying the positions of operating companies and subsidiaries)

Financial aﬀairs○ Maximizing consolidated earnings of the Group

Reinforced business foundation
Commonstrategies

6.5%Interest-bearing debt

¥270 billion or less

○ Eﬀective utilization of human resources in the Group (increasing the mobility of human resources)

Organization andhuman resources○ Improving the risk management capability (elimination of excessive loss)○ Selection and concentration of businesses based on growth potential and investment eﬀect○ Building and implementing a human resources rotation program (other departments/ subsidiaries)

24

25

Corporate Action Report 2017

Corporate Action Report 2017

Business Segment Overview
FY 2017(Year ended March 31, 2017)(JPY 100 million)

Main Products● Bulk carrier● Oil tanker● LNG carrier

Ship● Research vessel /Training vessel● Fishery patrol vessel● High-speed vessel● Naval ship / Patrol ship

Ocean
Development

Major Group Companies

Net Sales
Composition

Net Sales

Operating
Income

17.3%

1,267

△98

31.2%

2,284

179

23.9%

1,748

148

22.2%

1,626

△173

5.3%

389

27

● Niigata Shipbuilding & Repair, Inc.
● Shikoku Dockyard Co., Ltd.
● Akishima Laboratories (Mitsui Zosen) Inc.
● MES TOKKI & Engineering Co., Ltd.
● MES Shipping Co., Ltd.
● MES-KHI Yura Dock Co., Ltd.
● TGE Marine Gas Engineering GmbH● Floating production storageand oﬄoading system (FPSO)● MODEC, Inc.

● Submersible● Marine diesel engine● Gas turbine and gas engine

co-generation system● Process compressor

Machinery● Mitsui Zosen Machinery & Service, Inc.

● Top pressure recovery turbine (TRT)● MES Technoservice Co.,Ltd.

generating system● Reactor / Heat exchanger● Rotary dryer / Coal moisture controller● Quayside container crane● Transfer crane in container yard
● Container terminal
management system● Industrial crane● Bridge● Floating piers and pontoon● Radar scanner● Manipulator● Mitsui Meehanite Metal Co., Ltd.
● Mitsui Zosen Steel Structures

Engineering Co., Ltd.
● DPS Bridge Works Co., Ltd.
● Kaji Technology Corporation● PACECO CORP.
● C SSC-ME S Diesel Co., Ltd.

● Mitsui Zosen Plant Engineering Inc.
● Petro-chemical plant● Inorganic chemical plant● Biomass power plant

Engineering● Biogas power plant● Wind power facility● Overseas power plantengineering & construction● Environmental facility● Diesel engine generating plant● Mitsui Zosen Environment

Engineering Corporation● Sanzo Yuki Recycle K.K.
● Hamamatsu Green Wave Co., Ltd.
● Green Power Ichihara Co., Ltd.
● Betsukai Biogas Power Co., Ltd● Burmeister & Wain Scandinavian Contractor A/S● DASH Engineering Philippines Inc● Engineers and Constructors International,Inc.
● Simon Carves Engineering Limited

Others● Real Estate Development● System Development● Showa Aircraft Industry Co., Ltd.
● Mitsui Zosen Systems Research Inc.
● MES Facilities Co., Ltd.

26

27

Corporate Action Report 2017

Corporate Action Report 2017

Business Segment Overview

Ship
Our Action

We will achieve proﬁts

Initiatives for innovation based on the Mid-Term Business Planby strengthening our cooperation
Topicswith group companies

Development of LNG carriers for medium-distance transportationand innovating● Development of EurasiaFlex, a 80,000m3 class LNG carrier

our production system.

The LNG transportation market is expected to see an increase in demand fortransportation from terminal ports as hubs to less-equipped ports. Focusing on thisDirector and Managing Executive Oﬃcer
General Manager of Ship & Ocean Project Headquarters

trade, we developed an 80,000m3 class LNG carrier in 2017. We named it EurasiaFlex,
positioning it as a versatile ship for medium-distance transportation in the
Mediterranean Sea and Asian region. We are proceeding with speciﬁc business

Tetsuro Koga

negotiations.
The new ship has three MOSS-type spherical tanks, and its main engine is ME-GI, a
dual fuel engine fueled by crude oil and gas. To satisfy the demand for versatile

Business environment and performance

EurasiaFlex 80,000m3 class LNG carrier

ships that can enter a variety of ports, we have designed the hull to be 215 meters

The shipping market has continued to experience a state

cumulative total of 50 energy-saving bulk carriers ofof excess capacity attributed to the completion of numerous

various types, which are 56,000-ton, 60,000-ton,

new shipbuilding construction projects over the last several

66,000-ton, and 182,000-ton bulk carriers.

years. In particular, while charter freight has remained at

The environment for receiving new orders has been tough.

historically low levels in the dry bulk division, there were

However, we will continue to apply our competitive

only a few projects in which we received business inquiries.

advantages as the pioneer shipyard for energy-saving ships

While charter freight began to show a recovery trend at theand strive to be selective in accepting new orders, while atbeginning of 2017, shipbuilding prices have yet to reach a

the same time trying to improve proﬁtability. We will alsosatisfactory level, and it is expected to be some time before

make eﬀorts to develop new ships that will stimulate thea full-scale recovery takes place. On the other hand, in the

demand of ship owners, such as gas-fueled ships.

market for crude oil tankers and LPG carriers, which has

Orders received decreased by 41.373 billion yen (-37.9%)

remained at a relatively reasonable level, excess capacity

compared to the previous ﬁscal year, to 67.712 billion yen,has begun to be felt due to the progress of projects forreﬂecting poor orders received for commercial ships due

which orders were received. Moving forward, we hope thatto the sluggish shipping market, which oﬀset the orders

excess capacity will be eliminated by scrapping aging ships

for ships that we received from the public sector andand ships with high fuel costs. We also expect that market

others. Net sales remained almost unchanged from therecovery and an increase in the sea-borne cargo volume will

previous ﬁscal year, at 126.690 billion yen. We posted an

result from the continuous growth of emerging economies.

operating loss of 9.753 billion yen due to the ongoing

In the midst of these conditions, MES has developed andimpact of the loss from ocean support vessels, despite thereleased a steady stream of new bulk carriers that incorporate

improvement of 8.924 billion yen from the previous ﬁscal

energy-saving and environment-friendly technologies andyear that resulted from the decrease of low-priced ships,

VLCC. Since we handed over the ﬁrst energy-saving ship in

cost improvements, and other positive factors.

long, thereby ensuring high versatility. We have also taken steps to reduce theoperation cost and other costs. We will improve our existence value by promoting
intra-group cooperation in the small-scale LNG carrier market, where technologies,
forms of business, key players, and other elements are completely diﬀerent fromthose in the traditional large LNG carrier market.

Topics

Acceleration of spread of common platform for FPSO projects● An Approval in Principle (AIP) granted by Bureau Veritas tonext generation design for a FPSO Hull Platform ‒ the “noah-FPSO Hull”
MES has obtained Bureau Veritas Approval in Principle (AIP) for the noah-FPSO Hulland associated design and construction methods following the American Bureau of
Shipping. This AIP provides assurance of the feasibility and reliability of thenoah-FPSO Hull design.
The noah-FPSO Hull is a next-generation FPSO (Floating Production, Storage andOﬄoading) platform (“noah” stands for New Oﬀshore Adapted Hull). The hallmarkof the noah-FPSO Hull is that it allows a ﬂexible approach to the design andconstruction of the hull reﬂecting production requirements, rather than adjusting

The noah-FPSO Hull, the next-generation
FPSO platformthe oil/gas production facilities to the hullʼs design. MES is now marketing thenoah-FPSO Hull to achieve the common platform in the expectation that the FPSO
market will expand signiﬁcantly.

November 2013, we have completed and handed over a
TopicsBuilding ships for the public sector

New orders

Net sales

Operating income●Naming and launching ceremony of Chiyoda, a submarine rescue ship

(JPY 100 million / FY)(JPY 100 million / FY)(JPY 100 million / FY)●Handover of Yonakuni, a 1,000-ton patrol ship for the Japan Coast Guard

2,000

2,000

200

1,609

1,521
1,091

1,000

1,000
677

1,194

1,145

1,288

1,267 1,200

100●An order received for a ﬁsheries training boat for Nagasaki University
62

order for which was received from the Ministry of Defense in October 2016. In

-100

-90

-200
0
2015
2016
(Actual)

2017

2018
(Forecast)

2014

2015
2016
(Actual)

2017

2018
(Forecast)

-120

-186

0
2014

We held the naming and launching ceremony of a submarine rescue ship, the

11

0

1,000

2014

2015
2016
(Actual)

2017

2018
(Forecast)

November of the same year, we handed over a patrol ship for the Japan Coast
Guard. We have built 30 ships for the Ministry of Defense and 29 patrol ships for theJapan Coast Guard. We will continue to contribute to activities for protecting thesea around Japan by building ships for these public oﬃces.

28

29

Corporate Action Report 2017

Corporate Action Report 2017

Naming and launching ceremony of
Chiyoda submarine rescue ship

Business Segment Overview

Ocean Development
Our Action

We will deepen our collaboration

Initiatives for innovation based on the Mid-Term Business Plan

with MODEC, Inc.
Topicsto provide services beyond
the existing domains.

Promoting the commercialization of shallow methane hydrate production● Implementation of a research project on the development of technology forrecovering shallow methane hydrate, which was commissioned by the government

Director and Managing Executive Oﬃcer
General Manager of Corporate Planning Headquarters

Shinsuke Minoda

Business environment and performance
Crude oil prices recovered from the low level recorded atcalled topside, the after-sales service business, and eventhe beginning of 2016, reﬂecting the anticipation of thejoint participation in FPSO charter projects.

elimination of excess supply attributed to theOrders received declined by 96.063 billion yen (-50.9%)

oil-producing countriesʼ agreement to reduce production.

year on year, to 92.704 billion yen, although we received

West Texas Intermediate (WTI) has recovered to more thanorders for speciﬁcation changes, operation services, and

50 US dollars per barrel. Oil companies are expected toothers for existing FPSO projects. This is attributed mainly

continue development with a focus on deep-sea areas

to a shift in the timing of the placement of orders for new

from the viewpoint of a sustainable supply of energy

projects. Net sales decreased by 66.562 billion yen (-22.6%)

resources. Accordingly, businesses related to the ﬂoating

year on year, to 228.419 billion yen, due in part to a shift inproduction storage and oﬄoading system (FPSO) are

the timing of the placement of orders for new projects,

expected to grow stably in the medium and long term.

which oﬀset the progress of the existing FPSO construction.

In the midst of these conditions, we have established the

Operating income increased by 12.522 billion yen (+233.1%)

Corporate Planning Headquarters, which performs

from the previous ﬁscal year, to 17.895 billion yen, mainly

corporate planning functions for the entire company, toreﬂecting the improved proﬁtability of existing projects.

create businesses in the core domains speciﬁed in the MESGroup 2025 Vision that we announced in February 2016
and to increase the driving force for achieving this objective.
We also changed our structure into one in which the ocean

Under the national governmentʼs Basic Plan on Ocean Policy that was developedin March 2008, development targets, how to achieve them, the development of
the necessary technologies, the division of roles between the public and private
sectors, and other details were determined for each type of marine energy andmineral resources, such as methane hydrate and polymetallic sulphides. The
government decided to promote research for the practical application of methane
hydrate, which is deposited in Japanʼs surrounding marine zones, and publicly
recruited bodies implementing the research project. MES applied for this project
jointly with Shimizu Corporation and Nihon University, with MES being therepresentative. Five consortiums were selected as a result, including MES.
MES has a rich knowledge of gas hydrates and an extensive track record in oﬀshore
structures, machinery, and plants. We will aim to commercialize shallow methane
hydrate production by working together with domestic and overseas partners.

TopicsMethane hydrate exposed on the ocean ﬂoor
oﬀ Joetsu.
Source: Website of Gas Hydrate ResearchLaboratory, Meiji University

Commencement of time charter of FPSO for the Lapa oil ﬁeld
in the “pre-salt” region oﬀshore Brazil

Our subsidiary MODEC, Inc. (MODEC) was awarded the contract for the supply,
time charter, and operations of Floating Production, Storage and Oﬄoading (FPSO)
unit by Guará B.V., which is a 45% subsidiary of Petróleo Brasileiro S.A. (Petrobras),
the national oil company of Brazil. MODEC was responsible for engineering,procurement, construction, mobilization and installation of the FPSO. The FPSO
began crude oil production and a twenty-year time charter service (lease andoperation & maintenance) oﬀ the coast of Brazil in December 2016.
The FPSO, which was named the FPSO Cidade de Caraguatatuba MV27, is owned
by Carioca MV27 B.V., whose shareholders are MODEC, Inc. (20.1%), Mitsui & Co.,
Ltd. (32.4%), Mitsui O.S.K. Lines, Ltd. (20.6%), Marubeni Corporation (17.6%), andMES (9.3%). It is expected that the commencement of the time charter service willfurther expand the revenue base of MODEC from the current ﬁscal year onwards.

FPSO Cidade de Caraguatatuba MV27

business is under the direct control of the Corporate Planning
Headquarters. With MODEC, Inc., a group company that

Topicsengages in the FPSO business, we will enhance collaborationin the overall group in areas including not only the

Enhanced cooperation with MODECMODECʼs ﬁrst FPSO for oﬀshore Ghana appears
on new banknote of Ghana● Establishment of a department to support FPSO chartering business

manufacturing of hulls but also the ﬁeld of engineering

New orders

Net sales

Operating income(JPY 100 million / FY)(JPY 100 million / FY)(JPY 100 million / FY)

6,000

6,000

200

5,185

3,000〜
5,000

3,958

4,000

150
3,773

4,000

2,950

2,579
1,888

2,000

2,284

2,000

927

1,900

2014

2015
2016
(Actual)

2017

2018
(Forecast)

86

100
37

0

0

179

54

0
2014

2015
2016
(Actual)

2017

2018
(Forecast)

2014

In February 2016, MES established the FPSO Business Section, whichhandles all operations and management related to our participation
in FPSO chartering-related businesses, in order to invest aggressively
in businesses conducting FPSO chartering. We have already acquired
shares of the following three Special Purpose Companies (SPCs) for
FPSO chartering business from MODEC, Inc. We will further enhance
our cooperation with MODEC as we continue to focus on thedevelopment of the oﬀshore business.

2015
2016
(Actual)

2017

2018
(Forecast)○SPCs for FPSO charter business in which MES has currently investigated
T.E.N. Ghana MV25 B.V. for “FPSO Prof. John Evans Atta Mills” oﬀshore Ghana
Cernambi Norte MV26 B.V. for “FPSO Cidade de Itaguaí MV26” oﬀshore Brazil
Carioca MV27 B.V. for “FPSO Cidade de Caraguatatuba MV27” oﬀshore Brazil

30

31

Corporate Action Report 2017

Corporate Action Report 2017

MODEC supplied andhas been operating theﬁrst FPSO for oﬀshore
Ghana, FPSO Kwame
Nkrumah MV21, whose
image was adopted fora new banknote of the
Republic of Ghana.
In addition, the second FPSO which MODEC supplied for thecountry began operation in August 2016.
In the past decade, MODEC has expended considerable eﬀorts
on identifying and involving Ghanaian based professionals
and labor to contribute to the construction and eventual
operation of these FPSOs through capacity building investments
and development of local suppliers and fabricators. The adoptionof the FPSO as an image on the currency, which is said to reﬂect
the culture and historical backdrop representing each country,
proves that the FPSO and MODEC are expected to contributeto the economic development of Ghana, which is a great honor.

Business Segment Overview

Machinery
Our Action

We will increase the competitivenessInitiatives for innovation based on the Mid-Term Business Planof our service business
Topicswith the aim of providing
total solutions in growth ﬁelds.

Responding to the diversiﬁcation of fuels for diesel engines● Completion of the worldʼs ﬁrst ME-GI-Ethane for liqueﬁed ethylene gas carriers
In June 2016, we completed an ethane-fueled electronically-controlled gas injection

Director and Managing Executive Oﬃcer
General Manager of Machinery & Systems Headquarters

diesel engine (ME-GI-Ethane) for the ﬁrst time in the world. As with LNG, ethane is a

Ryoichi Oka

more environmentally-friendly fuel than heavy oil. It also attracts attention for its
superior economic eﬃciency due to the development and spread of shale gas.
Following LNG, ethane is attracting attention as an alternative ship fuel to heavy

Business environment and performanceoil, which is the mainstream fuel at present. We have established a system that

With regard to marine diesel engines, we secured suﬃcientﬁscal year, due in part to delays in capital expenditure

enables us to respond to diverse fuel needs, including ME-GI (LNG and heavy oil),work volume, although orders received declined from the

projects that resulted from the integration of the container

ME-GI-Ethane (ethane and heavy oil), and ME-LGI (methanol, etc. and heavy oil).

previous ﬁscal year due to the reduction in orders received

shipping business by three shipping lines in Japan.

Moving forward, we will continue to provide customers with eco-friendly

for large engines. The production volume increased year

Demand for container cranes is expected to remain strong,

propulsion systems, which are also excellent in terms of economic eﬃciency.

on year, to 182 engines/3,780,000 horsepower due to thewith numerous inquiries having been made about the

In July 2016, we received Marine Engineering of the Year 2015, an award

production of large engines. The production volume for

products. To respond to the demand, we have conductedcommending excellent vessel and marine equipment technologies from the Japanthe next ﬁscal year is expected to be almost equivalent tolarge-scale capital investments at our Oita Works andInstitute of Marine Engineering. We received this award for the development of athis, around 3,800,000 horsepower, due to the production

increased its production capacity by 50%.

dual fuel diesel engine that uses methanol and heavy oil as fuels (ME-LGI).

of large engines. It was decided that the ﬁrst commercial

In social infrastructure, orders received increased signiﬁcantly

machine of the large, low-speed marine diesel engine,

year on year because we received numerous orders for coastal

which is equipped with an Exhaust Gas Recirculation (EGR)

structures and orders related to disaster-relief work in areas

system to conform to the IMO NOx (Nitrogen Oxides) Tireaﬀected by the 2016 Kumamoto Earthquake and work for

III regulation, will be adopted in Japan for the ﬁrst time.

replacing the ﬂoor slabs of expressways, among others.

Regarding industrial machinery, the environment for

The LSS Service centered on after-sales services (Life-cycle

We handed over three automated container cranes for railroad yards to TraPac, LLC

receiving new orders has been tough due to a decrease in

Solution Service and Customer Oriented Service) was aﬀected(Wilmington, California), which is a U.S. subsidiary of Mitsui O.S.K. Lines, Ltd., via

capital expenditures related to petroleum reﬁnery, althoughby the slowdown in the shipping market in the ﬁrst half of

PACECO CORP., our U.S. subsidiary. Ever since the 1990s, numerous automatedcrude oil prices are about to recover. Orders received

the ﬁscal year. However, it recovered gradually in the second

container terminals have been built globally, but TraPac LLCʼs terminal in the Port

increased year on year, but have remained in a slump.

half, and orders received grew to a level close to that of theof Los Angeles is the ﬁrst automated terminal on the West Coast of the United

In the midst of these conditions, we have made Kajiprevious ﬁscal year, when the result was strong.

States. It is expected that the introduction of these automated container cranes will

Technology Corporation, with which we formed a capital

Orders received declined by 5.409 billion yen (-3.1%) year

contribute to developing a consistent automated system, from the part under theand business alliance in January 2015, into our consolidatedon year, to 166.829 billion yen. This was due in part to thequay crane to the railroad yard.

subsidiary by means of a takeover bid to increase the synergy

decrease in orders received for marine diesel engines,

with the company further. We will work together with Kajicontainer cranes, bridges, port structures, various industrial

Technology Corporation to expand our operations, including

machinery, and after-sales services. Thanks to these products

the manufacturing and sales of the high-pressure reciprocating

and businesses, net sales remained almost unchanged frompump for supplying fuel gas to LNG-fueled ships, which

the previous ﬁscal year, at 174.847 billion yen. Operating● Joint development of an inspection system that permits the simultaneous
inspection of surface conditions and subsurface conditions of roads

we developed by collaborating with the company.

income increased by 0.965 billion yen (+7.0%) year on year,● Completion of Bridge No.1 on the Ota Kitsuki Line

Orders received for cranes remained ﬂat from the previous

to 14.772 billion yen.

Topics

ME-GI-Ethane for liqueﬁed ethylene gas carriers

Contribution to the ﬁrst automation of a port terminal on the west coast of the United States● Delivery of three automated container cranes for TraPac, LLC of the United States

TopicsAutomated container cranes for railroad yards

Increasing our competitiveness in the social infrastructure domain

Recent years have seen the aging of social infrastructure come to the surface,
New orders

Net sales

Operating income

which has resulted in the growing necessity of investigations and inspections for(JPY 100 million / FY)
2,036
2,000

(JPY 100 million / FY)(JPY 100 million / FY)

the maintenance of infrastructure equipment throughout Japan. This has led to

1,722

1,668 1,600

2,000
1,671

1,717

1,748 1,800

200

demand for investigation and inspection technologies that will compensate for

1,478

1,307

138

148

107
1,000

100

1,000

the shortage of engineers. We have developed a system that permits the100

82

inspection of road subsurface conditions with radar (electromagnetic waves) andthe measurement of road surface conditions with laser (a hybrid inspection
system), jointly with Tonox Corporation. We will continue to provide consistent

0

2014

2015
2016
(Actual)

2017

2018
(Forecast)

0

2014

2015
2016
(Actual)

2017

2018
(Forecast)

0

2014

2015
2016
(Actual)

2017

2018
(Forecast)services from investigations to repairs, replacement, and renewal by making use of
the MES Groupʼs diverse technologies related to bridges.

32

33

Corporate Action Report 2017

Corporate Action Report 2017

Hybrid inspection vehicle

Business Segment Overview

Engineering
We will make eﬃcient use of
the Groupʼs management resources
and promote collaboration
between Group companies
with the aim of maximizing proﬁt
and achieving stable returns.

Our Action
Topics

Initiatives for innovation based on the Mid-Term Business Plan

Handover of chemical plant in Turkmenistan● 69th sulfuric acid plant completed
In June 2016, we completed and handed over a sulfuric acid plant (annual production
amount: 500,000 tons) to Turkmenhimiya State Concern, Turkmenistanʼs statepetrochemical company. This was the 69th sulfuric acid plant completed by MES.

Director and Managing Executive Oﬃcer
General Manager of Engineering Headquarters

We received the order for this project in September 2013 jointly with Renaissance
Construction of Turkey. It was the ﬁrst chemical plant that we handed over to

Shinsuke Nippo

Turkmenistan. Turkmenistan, which boasts the world's fourth-largest reserve of
natural gas, undertook the project as part of measures for easing its heavy
dependence on the export of natural gas. It is expected that the completed plant

Business environment and performance

Sulfuric acid plant for Turkmenistan

will help improve the added value provided by the use of natural gas resources

Customers in the ﬁeld of chemical plants, a ﬁeld in which

Indonesia and an order received in the environmental

we excel, have maintained a cautious stance. For example,

energy ﬁeld for the construction of a wind power plant.

oil- and gas-producing countries and major oil companies

Net sales decreased by 8.672 billion yen (-5.1%) year on

are reviewing their capital expenditure plans in response

year, to 162.598 billion yen, partly reﬂecting the steadyto the slumping crude oil prices. However, crude oil prices,

progress of a petrochemical plant construction project for

which had been slumping, recovered gradually and areSingapore and power plant engineering work projects forbeing stabilized, with signs of improvement seen in

Vietnam and Indonesia, and the completion of a windcustomersʼ motivation for investment. On the other hand,

power plant construction project. While we posted

in the ﬁeld of infrastructure, the chronic power shortage

operating income of 8.297 billion yen in the previous ﬁscal

has yet to be overcome throughout Southeast Asia. In

year, we posted an operating loss of 17.333 billion yen inIndonesia and Vietnam, plans to construct coal thermal

the ﬁscal year under review due to a decline in the

power plants, which had been delayed, have ﬁnally comeproﬁtability of plant construction projects being

into play. In the environmental energy ﬁeld, capital

implemented by consolidated subsidiaries.

and contribute to nurturing and developing industries in the country. We have astrong track record in the ﬁeld of inorganic chemicals, including sulfuric acid. We
will continue to pursue this business aggressively.

TopicsAcquisition of a UK engineering company● Acquisition of Simon Carves Engineering Ltd., a UK engineering company
Engineers and Constructors International, Inc. (ECI), our plant engineeringsubsidiary in the United States, has acquired shares in Simon Carves Engineering
Ltd. (SCEL), an engineering company in the United Kingdom, as a result of which
SCEL has become a subsidiary of ECI. SCEL is a traditional company that has been
providing design and engineering services for various plants in the UK and aroundthe world for more than 100 years. The acquisition will enable the MES Group to

expenditures on power plants using renewable energy

provide consistent services throughout the lifecycle of plants, from projectand other facilities have continued to be made in Japanproposals for plant construction to Engineering, Procurement, and Construction

and other countries, and are expected to continue making

SIMON CARVES Engineering Ltd.

(EPC), and trial runs, and even maintenance, equipment modiﬁcations, and thesteady progress.

enhancement of existing plants. Through the acquisition, the MES Group has

In the midst of these conditions, orders received increased

acquired a new base in Europe in the ﬁeld of chemical plants. Moving forward, weby 48.970 billion yen (+48.5%) year on year, to 149.893

will operate the business in more regions than ever.

billion yen, despite the impact of delays in capital expenditureplans in the petrochemical ﬁeld, due in part to orders
received in the ﬁeld of overseas infrastructure for

Topicsengineering work for a coal thermal power plant inOrder received by BWSC for the ninth biomass power plant in the UK● Decision made to invest in the electric power sales businesswith a biomass combined heat and power (CHP) plant.
New orders

Net sales

Operating income(JPY 100 million / FY)(JPY 100 million / FY)(JPY 100 million / FY)

3,000

2,000

Burmeister & Wain Scandinavian Contractor A/S (BWSC), our subsidiary in Denmark,
2,664

2,000

1,824

2,000

1,499

1,713
1,167

1,626 1,700

10

0

1,000

-100

0
2014

2015
2016
(Actual)

2017

2018
(Forecast)

0

2015
2016
(Actual)

2017

2018
(Forecast)

CHP plant, including engineering, equipment procurement, installation and

-106

-200
2014

-173
2014

in the United Kingdom. This facility is a biomass CHP plant fueled by wooden fuel,and its capacity will be 27.8 MW. BWSC as a whole undertakes the business of the

-2

1,009

1,000

biomass power plant. It was the ninth order received for a power plant of this kind

83

100

1,296

has received an order for the construction, operation, and maintenance of a large

200

2015
2016
(Actual)

2017

construction, and test and commissioning. BWSC also received an order for a
2018(Forecast)

20-year contract for its operation and maintenance (O&M), including a ﬁve-year
option contract.

34

35

Corporate Action Report 2017

Corporate Action Report 2017

Rendering of the biomass power plantResearch & Development
reduce CO2 emissions. We are also developing a route recommendation
system that considers weather and sea conditions and services

We will contribute to enhancing

including those of analyzing the propulsive performance of ships

the competitivenesson commercial voyages, using ship-land communication technology.

of the MES Groupʼs core products

have completed the development of high-pressure EGR that meetswith technologies for design

the current IMO NOx (Nitrogen Oxides) Tire III regulation and dual

and manufacturing innovations.

methanol, which comply with the sulfur oxide (SOx) regulations.

In addition, in the ﬁeld of two-stroke marine diesel engines, wefuel engines (ME-GI) for liqueﬁed natural gas (LNG), ethane, andWe are now developing a dual fuel engine (ME-GI) for liqueﬁed

Director and Managing Executive Oﬃcer
General Manager of Research & Development Headquarters

Akira Nishihata

petroleum gas (LPG). We have also developed a high-pressure fuelHigh-pressure fuel pump to be used
for the fuel gas supply system for ME-GI engines

pump to be used for the fuel gas supply system for ME-GI engines.

Initiatives in the Social & Industrial Infrastructure domain
We are developing a radar inspection system for the maintenanceof tunnels and roads, technologies for the large-scale maintenanceand repair of bridges, and other related technologies. In the ﬁeld of

Research and development

industrial machinery, we are developing a new co-generation

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

system, which improves the energy eﬃciency of power generation
facilities that use natural gas and complies with the standards for
spreading and promoting distributed power supply. We also makeuse of IoT at our manufacturing sites to improve work eﬃciency
and operate machine tools eﬃciently.

Initiatives in the Environment & Energy domain

Radar inspection system for road maintenanceIntellectual properties

In the ﬁeld of ocean development and submersibles, we are

The basics of initiatives for intellectual property lie in securing adeveloping a newly constructed ﬂoating production storage andcompetitive edge for our businesses through the acquisition ofoﬄoading system (noah-FPSO) vessel for marine oil and gas, which

Changes in the number of patents

intellectual property rights and their application. The Intellectual

will make it possible to respond to requests for delivery in a shortturnaround period, and a dynamic positioning system (DPS) withredundancy that makes it possible to respond to various customer

Property Department and operational headquarters work together(Number of patents)

to promote the creation of intellectual property rights, such as

1,500

inventions achieved through the development of products andneeds. As a result, we have obtained classiﬁcation certiﬁcates. To

1,195

1,237

2013

2014

1,300

1,206

1,237

2016

2017

technologies and trademarks attached to our products, and themeet the demand for fast, low-cost surveys of a wide seabed area,

1,000

acquisition of rights over the properties and their application. The

such as a preliminary survey for oﬀshore oilﬁeld development andLegal Department, Intellectual Property Department, and related

a survey conducted before laying underwater communication

departments also work together to handle contracts and disputes

cables for commercial use, we have launched a joint research(Team KUROSHIO) in a team of eight organizations including the
University of Tokyo. In addition, we are working on a survey

500

with other companies regarding intellectual properties.

project concerning ultra-wide area high-speed seabed mapping
A joint research project concerning ultra-wide area
high-speed seabed mapping（Team KUROSHIO）

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.

technology using multiple small AUVs, which is aimed at the

2015

(FY)

While we are apt to feel that the rights are acquired as a result ofeﬃcient investigation of seabed resources in a wide marine area,achievements in technological development, we must fully consider

and a submarine methane hydrate production system, among

how to acquire, protect, and apply technologies when we startothers. In the ﬁeld of renewable energy, we are developing

Changes in the amount of R&D expenses

developing a business or product. At MES, we always try to formulate

facilities including ﬂoating and bottom-mounted oﬀshore wind

and implement intellectual property strategy in this way.

power generation facilities. In the ﬁeld of environmental plants, weto avoid patent disputes, we have started to see a trend towards

with diverse materials for the purpose of expanding the scope of
application of biogas power generation technologies.

nitiatives in the Marine Logistics & Transportation domain

the result of the great impact made by the progress of globalization.

4,000

At the same time, however, it also reﬂects the fact that people are

3,000

the intellectual property rights owned by MES, have been increasing,In the ﬁeld of merchant ships, we are developing new neo-series

5,006

2015

2016

4,614

2,000

0
2013

and we are taking measures to improve our capacity to conduct
Container terminal automation system

4,858

1,000

aim to avoid infringing upon other companiesʼ rights and exercise

terminal automation system, and other areas.

5,973
5,094

5,000

gain proﬁts. The importance of patent surveys and analysis, which

operation of quay cranes and container yard cranes, a container

6,000

actively exercising intellectual property rights. This is believed to be

starting to have a greater awareness of how to apply these rights to

In the ﬁeld of port cranes, we are developing remote/automatic(Million yen)

7,000

In addition, in Japanese corporate society, where there is a tendency

are developing fermentation technologies which are compatible

ships, or next-generation, environmentally friendly ships that0surveys.

36

37

Corporate Action Report 2017

Corporate Action Report 2017

2014

2017

(FY)

Corporate GovernanceDirectors / Corporate Auditors

Corporate governance
1. Basic philosophy

President and Representative Director

Vice President and Representative Director

Director

Director

Director

Takao Tanaka

Takaki Yamamoto

Shinsuke Minoda

Akira Nishihata

Shinsuke Nippo

Director

Director

Director

Director (Outside)

Director (Outside)

Tetsuro Koga

Ryoichi Oka

Yuichi Shiomi

Toru Tokuhisa

Toshikazu Tanaka

Based on its Company Philosophy, Business Policy, andManagement Policy, MES aims to ensure its sustainablegrowth 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 haveestablished 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 atrusted member of society<Business Policy>
To fulﬁll expectations and foster trust in people andsociety as a manufacturing company that oﬀers products
and services representing the culmination of our global
business experience and 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
and other 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 our sustainable growth and improve mediumand 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 / Executive Oﬃcers
President,
Representative Director

Corporate Auditors

Takao Tanaka

CEO

Corporate Auditor(Full-time)

Takahiro Hiraiwa

Corporate Auditor(Full-time)

Hiroki Higuchi

Takaki Yamamoto

Assistant to President, In charge of Audit Dept. and personnel & general aﬀairs,
General Manager of Export Control Dept. and CCO※1

Director, Managing Executive Oﬃcer

Shinsuke Minoda

Supervising Engineering Hq.,
General Manager of Corporate Planning Hq., and CISO※2

Corporate Auditor(Outside)

Osamu Endo

Director, Managing Executive Oﬃcer

Akira Nishihata

In charge of procurement and environmental & safety control CTO※3and General Manager of Research & Development Hq.

Corporate Auditor(Outside)

Koichi Tanaka

Director, Managing Executive Oﬃcer

Shinsuke Nippo

General Manager of Engineering Hq.

Director, Managing Executive Oﬃcer

Tetsuro Koga

General Manager of Ship & Ocean Project Hq.

Director, Managing Executive Oﬃcer

Ryoichi Oka

General Manager of Machinery & Systems Hq.

Director, Managing Executive Oﬃcer

Yuichi Shiomi

CFO※4, In charge of IR Dept.

Director (Outside)

Toru Tokuhisa

Director (Outside)

Toshikazu Tanaka

Managing Executive Oﬃcer

Norihisa Fukuda

Director and Senior Managing Executive Oﬃcer, Minaminippon Shipbuilding Co., Ltd.

Managing Executive Oﬃcer

Shoichi Taguchi

General Manager of Tamano Works and Special Mission by President(in charge of manufacturing)

Managing Executive Oﬃcer

Yasuki Kishimoto

Deputy General Manager of Machinery & Systems Hq. (President and Representative
Director, an overseas subsidiary producing material handling machinery)

Executive Oﬃcer

Katsuhiko Yoshida

Deputy General Manager of Engineering Hq. (in charge of plant engineering)

Executive Oﬃcer

Toshiro Miyake

Deputy General Manager of Ship & Ocean Project Hq.
and General Manager of Tamano Shipyard, Ship & Ocean Project Hq.

Executive Oﬃcer

Yuji Kozai

Deputy General Manager of Corporate Planning Hq.
and General Manager of Corporate Planning Dept.

Executive Oﬃcer

Kiyohiko Murakami

Deputy General Manager of Machinery & Systems Hq.
and General Manager of Machinery Factory, Machinery & Systems Hq.

Executive Oﬃcer

Keiji Kurosaka

Deputy General Manager of Engineering Hq.
(in charge of energy solutions and infrastructure)

Executive Oﬃcer

Naokazu Fukui

General Manager of Business Planning Dept., Corporate Planning Hq.

Executive Oﬃcer

Shigeki Takitani

Executive Oﬃcer

Yasunori Iwamatsu Manager of Planning & Administration Dept., Ship & Ocean Project Hq.

Executive Oﬃcer

Mitsuru Yamada

Vice President,
Representative Director

operations, and they perform their assigned duties under
the supervision of the chief executive oﬃcer (CEO).
The Personnel Advisory Committee is chaired by thepresident and consists of four directors, including two
outside directors. It improves the transparency of theprocedure for nominating candidates for directors andelecting executive oﬃcers, and ensures the fairness of theprocedure. The Compensation Advisory Committee ischaired by an outside director, and consists of four directors
including the two outside directors. It improves thetransparency of the procedure for determining thecompensation for directors and executive oﬃcers, andensures the appropriateness of the compensation
standards and fairness of evaluations.

Internal control system
Basic philosophy

General Manager of Procurement Dept.
Deputy General Manager of Ship & Ocean Project Hq. and General

General Manager of Infrastructure Business Dept., Machinery & Systems Hq.

※1 CCO stands for Chief Compliance Oﬃcer. ※2 CISO stands for Chief Information Security Oﬃcer.
※3 CTO stands for Chief Technology Oﬃcer. ※4 CFO stands for Chief Financial Oﬃcer.

MES 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 the structure for corporate governance at MES, andwe have appointed accounting auditors. As of June 28, 2017,
the MES Board of Directors consists of ten members. Two ofthese members are part-time outside directors. Moreover,
our Board of Corporate Auditors consists of four members,
two of which are part-time outside corporate auditors.
We have also adopted an executive oﬃcer system to improve
decision-making on vital matters by the Board of Directors,
improve supervisory functions, and streamline business
operations. The executive oﬃcers elected by the Board of
Directors are given executive authority related to business(As of August 1, 2017)

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 our internal 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 othermatters. 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 establisheda business 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 thesesystems.

38

39

Corporate Action Report 2017

Corporate Action Report 2017

Outside Director Message
Systems of corporate governance and internal control

Flow Chart of Corporate Governance and Internal Control

1. Business execution system

Shareholders' Meeting

Election/dismissal

To execute business operations in accordance with the basic
policy decided by the Board of Directors, we have established
two managing committees: the Management Strategy
Committee and the Management Committee.
Deliberations are held based on the functions of eachorganization to promote rapid, ﬂexible decision-making. As
for the business execution system, we transferred the authority
to execute business from directors to executive oﬃcers electedby the Board of Directors. This streamlines the execution ofduties performed by directors.

(Board of Directors)
Consultation

Recommendation

ReportReportPersonnel Advisory Committee(consultative body to the president)

Election/dismissal,oversight

Outside Director

Audit

Audit

[Business
execution function]
Executive ofﬁcers

Instruction/report

Chief Executive Ofﬁcer (CEO)Deliberation/
reportManagement
Strategy
Committee
Instruction

Instruction/
reportManagement
Committee
Instruction

Instruction/report

Monitoring/
ReportProceed to the next stage by taking actions quickly.
Audit

IT Control Task Force

Antimonopoly Act
Observance Monitoring
Committee

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

Investigation

Divisions/Departments of MES
and Subsidiaries

Intra-ofﬁce Risk Management
Review Sessions

Audit

Employees of the Company Groupconsisting of MES and Subsidiaries, and Clients

Lawyeran Antimonopoly Act Observance Monitoring Committee.
In addition, we have set up a “Help-line” to detectcompliance problems in their early stages. Employees candirectly consult or submit reports to either the Secretary
General of the Compliance Committee or a lawyer.

3. Risk management system
MES is promoting Total Risk Management System thatsystematically identiﬁes and evaluates risks related to all
aspects of business activities. This system is designed toensure that we conduct business activities within the proper
limit in which we can take risks. Under the Total Risk
Management and Internal Control Committee, we promotegroup-wide risk management in line with the total risk
management policy determined at the Management
Strategy Committee.
In regards to risks related to business operations, eachheadquarters holds Intra-oﬃce Risk Management Review
Sessions and conducts risk analysis on their own. For orders
received and things such as investment and loan projects,
key members of relevant divisions and departments examine

the risk management status before they are submitted to
the Management Committee for deliberation.
To address information security risks, we have establishedthe IT Control Task Force, a group-wide organization andsubordinate body 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 withexternal 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 at annual management committees

Mr. Tanaka served as a Director,
Managing Director, Executive
Vice President, and President
and Chief Executive Oﬃcer of
Mitsui Chemicals, Inc. and now
serves as the Senior Advisor of
the company. He became a
Director of MES in June 2015.

Auditing
Department

Total Risk Management andInternal Control Committee

Compliance Committee(Help line) Consultation/Reporting

Instruction/
reportInstruction/report[Permanent Committee]

Monitoring/
ReportMr. Tokuhisa worked for theJapan Bank for International
Cooperation (JBIC) as the Chief
Representative of RepresentativeOﬃce in Washington D.C., Deputy
Director General of JBIC Institute,
Director General of Country
Economic Analysis Dept., andResident Executive Director for
the Americas. He then served as
the Executive Vice President andRepresentative Director, Nusa
Tenggara Mining Corp. until
November 2016. He became a
Director of MES in June 2013.

Toshikazu Tanaka

Discussion ofimportant matters,
reports on businessexecutions

Compensation Advisory Committee(consultative body to the president)

Deliberation

Toru Tokuhisa

Election/dismissal

Decision on contents ofagendas concerning
Audit Corporate Auditors election or dismissal Accounting(Board of
Auditors
Corporate Auditors)

Directors

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 MES and its domestic subsidiaries. We have alsoestablished 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 ofeach area to conﬁrm compliance systems and the status of
their implementation. Likewise, we have established theCompliance Committee as an entity for promoting awarenessof compliance policy and reporting results of surveys.
To ensure legal compliance during activities aimed at winningnew orders for public projects, each division and department
conducts checks by themselves. We have also establishedElection/dismissal[Monitoring andoverseeing function]

Outside Director

and the Total Risk Management and Internal Control
Committee evaluates the preparation and operation statusof said internal control, and make corrections if necessary.

Toru Tokuhisa

MES celebrates its centenary this year. I think that the mere fact that

including the introduction of the executive oﬃcer system, thethe company has survived for 100 years in this era of rapid change

reduction of the number of Directors, the increase in the number ofallows us to say that it is a blue-chip company whose value has

Outside Directors, and the enhancement of the supervisory functions

been recognized by society. However, in the coming age, when thethat was made through a revision of the rules of the Board of Directors.

pace of change will only increase, our ability to respond to change

I think that, as a result of these reforms, discussions at meetings ofwill be even more important than ever.

the Board of Directors have begun to be made from a

From this perspective, we ﬁrst developed the MES Group 2025

company-wide perspective and in consideration of the standpoints

Vision in February 2016 and disclosed our vision for the MES Groupof stakeholders, including our regular shareholders.

in 2025. In February 2017, we developed the Mid-Term Business

The MES Group operates businesses related to infrastructure andPlan 2017, which shows the speciﬁc business policy for the comingenergy, as well as a shipbuilding business. I believe that we havethree years. To execute these plans quickly, we decided to change

developed industry-leading technologies and experience in each of

the management structure of the MES Group into a holding

these ﬁelds. Previously, we were working in a so-called verticalcompany structure in April 2018, receiving shareholder approval atorganization, with the possibility of failing to maximize synergies.

the Ordinary General Meeting of Shareholders in June 2017.

We were also leaning on each other in a way, in terms of revenues.

Moves to reform our Board of Directors, where these medium- andMoving forward, however, I would like the Group to be managed

long-term business plans are ﬁnalized, have accelerated, with aquickly and ﬂexibly under the holding company structure and evolve

particular contribution from the Corporate Governance Code that

into a corporate group that will provide value and thus make antook eﬀect in June 2015. We have instituted various reforms,

even bigger contribution to society.

The framework has been laid out. Now we should take bold actions!

Toshikazu Tanaka

The last two years have seen great reforms in the company, such as

be felt from a company where all employees work together. I think

the introduction of the executive oﬃcer system, establishment of

this is an issue we should address.

the Personnel Advisory Committee and Compensation Advisory

Today, our business environment is experiencing very real andCommittee, and implementation of the Corporate Governancesweeping change with the Fourth Industrial Revolution, including

Code. I think we have achieved a major transformation to a

artiﬁcial intelligence and the Internet of Things, not to mention the

management structure that is conscious of our stakeholders, withchaos of world politics. The Environment & Energy, Marine Logistics

such elements as clear responsibility and authority and transparent& Transportation, and Social & Industrial Infrastructure domains,

management. We have also clariﬁed our direction in the MES Group

where we aim to grow, are not immune from this upheaval.

2025 Vision and the Mid-Term Business Plan 2017 and have begun

I think that the only way to survive in this business environment,

to plan a holding company structure aimed at achieving targets. In

where our previous rules of thumb are not useful at all, is to try tothis way, we are about to ﬁnish laying out the framework for surviving

trigger innovative change quickly and boldly with conﬁdence. We

the ﬁerce competition that we face in the industry.

have laid out the management framework for executing the strategies

On the other hand, I feel that we need to respond even more

for our medium- and long-term goals, such as M&A and businessquickly and boldly to the radical changes in the environment, suchtie-ups. Facing a truly critical stage, we now need to take quicker,

as through business tie-ups and the management of subsidiaries,

more speciﬁc actions. As an Outside Director, I would like to help

although we are blessed with technologies cultivated through 100

the company trigger innovative changes, from the perspectives ofyears of history and competent, hard-working employees. In addition,

various stakeholders.

because our organization is vertical, we lack the strength that would

40

41

Corporate Action Report 2017

Corporate Action Report 2017

Communication● Together with customers● Stakeholders of the MES GroupWe work under our company philosophy of “To continue our role as a trusted company, and as a
Customers

trusted member of society” In our management policy that supports the company philosophy, we
have set “Build further satisfaction for our customers” as one of our most important objectives. In our
speciﬁc standards of conduct for employees, we give top priority to “customer orientation” and “Diligently

Business partners
and subcontractors

Global environment

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 customersʼ voices.

● 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 todeepen shareholdersʼ and investorsʼ understanding of the business activities of MES and the MES Group.
Information disclosure and IR activities
To build better relationships with shareholders and investors, we strive to ensure

Local communities
and international society

Shareholders
and investors

MES
Group

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.
Provision of IR information
We publish information about our company on our website in a timely, appropriatemanner. 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.

● Together with business partners
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

Employees

co-existence and co-prosperity with our business partners through fair trade with them, so as to fulﬁll

Government

our social responsibility.
Basic policy on the selection of business partners●Ceremonial ship launching shown to the public at Tamano Works (about ﬁve times a year)

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 shall selectFeaturing the spectacle of a huge shipbusiness partners in a fair and square manner by providing all companies that desire to be ourlaunching into the sea, ceremonial shipbusiness partners with equal, fair opportunities for participation.” We engage in procurement activities

launches at Tamano Works is received

based on this principle.

well by all those who observe it.
Tamano City Tourist Association and

For fair and equitable dealings

other parties organize a popular
We established the Rules and Ethics for Material Procurement in November 2002. It shows the ethics

industrial tour around Tamano City,and behavior and activity standards for all staﬀ engaged in procurement activities. On the basis of thethe highlight of which is the chance toutmost integrity, we strive to build equal and fair relationships of trust with business partners.

observe a ceremonial ship launch at
Tamano Works (which is held irregularly).

● Together with local communities

Information about the observation of

We attach importance to communications with local communities. Employees in each of our businesslocations engage in environmental and social contribution activities locally, aiming to create asustainable society. Information about initiatives taken at each business location is provided in thisceremonial ship launches is posted tothe oﬃcial website of Tamano City as it
becomes available.

report and on our website.

42

43

Corporate Action Report 2017

Corporate Action Report 2017

Environmental Preservation
TopicsPromoting diversiﬁcation of biomass fuels●Environmental management data（non-consolidated）● Eﬀorts to conserve energy and reduce CO2 emissions

Green Power Ichihara Co., Ltd. introduces pruned
pear tree branches for the ﬁrst time in Japan.

Ltd. operates a biomass power generation facility that isfueled mainly by wood chips from construction anddemolition waste generated in the Kanto district. With anelectricity-generating capacity of 49,900kW and transfer
capability at 43,800kW, it is one of the largest biomass● Eﬀective use of aquatic resources

power generation facilities in Japan.
The construction and demolition waste as the main fuel ofthe facility is mostly from demolished wooden buildings.
The amount of such waste available is susceptible to economic

Power generation facility at Chiba Works of MES (Ichihara City, Chiba Prefecture)ﬂuctuations. Accordingly, ensuring a stable fuel supply had
diversiﬁcation of fuels, Green Power Ichihara has added

ﬁrst, it has turned pruned pear tree branches into a biomass

timber from forest thinning and imported palm kernel shells

fuel. Green Power Ichihara purchases pruned branches(PKS) to the construction and demolition waste as the maincollected from pear farmers in Ichikawa City and Funabashi

fuel.

City. This allows the farmer to reduce the cost of disposing

Moreover, noting that the volume of production of pears inof the huge quantity of pruned branches generated every

Chiba Prefecture, where the company is located, has beenyear. We will continue to promote a diversiﬁcation of fuels

largest in Japan since 2016, the company began to use pruned

that are not susceptible to economic trends, aiming forbranches of pear trees as a fuel by drying them. In a Japan

stable operation.

Topics（TJ)* 1

Power generation is now possible with a small garbage incinerator,
something that used to be diﬃcult.

Small-scale power generation enabled by infrastructure
improvement work for a general waste treatment facility& Service, Inc. (MZM) announced that a small-scale steam
power generation facility began operating following
infrastructure improvement work to extend the service lifeof Karatsu-shi Seisou Center (Karatsu City Garbage Center),an order for which was received from the government of
Karatsu City, in Saga Prefecture. In this project, MKE added
The small-scale steam power generation facility at Karatsu-shi Seisou Center

generation facility, which uses micro steam turbines
manufactured by MZM, commenced operation.

The introduction of this small steam power generator will

This small steam power generation facility, developed byenable Karatsu-shi Seisou Center (50 tons/ day x 3 furnaces)

taking advantage of the easing of regulations related toto reduce CO2 emissions by more than 40%. Accordingly, theproject was subsidized under the Ministry of the Environmentʼswith a small-scale garbage incinerator, something that usedsubsidy program for projects to curb CO2 emissions (program

to be diﬃcult. It is also a groundbreaking system that provides

for promoting the introduction of advanced equipment).
Making use of the engineering prowess of the MES Group,

work, shorter construction period, the removal of the need

MKE and MZM will continue to pursue small-scale steam

to add workers, including qualiﬁed persons, and quick

power generation with general waste treatment facilities.

start-up and shutdown.

6.70

6.90

2013

2014

8.14

8.13

8.20

2015

2016

2017

6
1,000
4

1,082

500

2
0

0
2013

2014

2015

2016

2017

(FY)

●Purchased electricity●Water consumption(1,000 kWh)

(1,000 cubic meters)

150,000

1,500

112,024
100,000

100,789

1,167

109,121 109,886 111,099(FY)

Industrial water

1,089

1,168

1,113 1,151

2015

2016

1,000

50,000500

530
0The unlawful dumping of industrial waste has become a majorsocial problem. As a producer of industrial waste, MES makes
every eﬀort to fulﬁll its responsibilities in this area. One of theseeﬀorts is our strict management of manifest. This is accomplishedthrough 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 amountand recycle rates over the past ﬁve years, and a breakdown of
waste for ﬁscal 2017. We worked to limit waste, but ﬁscal 2017 saw
an approximately 0.9% increase in waste from the previous ﬁscal
year. In addition, the recycle rate decreased by approximately 0.2%
to 86.8% 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.

2013

2014

2015

2016

2017

0

2013

(FY)

2014

As a cargo owner, MES is actively tackling the issue of energy
conservation in the ﬁeld of transportation as well. One way inwhich we are doing this is by increasing the transportation loading
rates. We also aggregate aspects such as shipping dates anddestinations to reduce the number of dedicated ships and expand
the use of consolidated shipments. All of these activities are aimed
at reducing both CO2 emissions and energy consumption. The
graph on the right shows MESʼs CO2 emissions over the past ﬁve

2017

(FY)

*1 TJ: Tera Joule (=1012J) *2 CO2 emissions were calculated by following the Guidelines for Calculating Corporate Greenhouse
Gases Emissions issued by the Ministry of the Environment. CO2 emissions from electric power were calculated by using theadjusted CO2 emission coeﬃcient for designated electric enterprises that was also published by the Ministry of the Environment.

●Total waste amount and recycle rate

Disposed amount

Recycled amount
Recycle rate (%)

Quantity (t)86.8

50,00040,00037,60032,600100
80

34,500 34,800

34,60060

30,00020,00040

30,20020

10,000
0

2013

2014

2015

2016

0

2017

(FY)

●FY2017 breakdown of waste
Scrap metal 68.4（%)

Waste oil 4.6
Waste paper and rag 2.2
Rubble 0.1

Slag 8.1

Others 5.3
Sludge1.2
Waste plastic3.8

Waste wood 6.2● Promoting environmentally friendly transportation

a number of beneﬁts, including a smaller scope of construction

1,175

8

1,265 1,300 1,305

Service water

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 (intermediate water). We strived to save water once again
during ﬁscal 2017, but the amount of service and industrial waterused was up approximately 1% from the previous year.

The majority of chemical substances used by MES are the solventsand pigments contained in paint. The changes in the output andtravel amount of speciﬁc chemical substances over the past ﬁve
years are shown in the graph on the right. The other chart describes
the breakdown of chemical substances used by MES for ﬁscal
2017. In May 2004, a partial revision to the Air Pollution Control
Act was oﬃcially announced. By maintaining strict control ofusage levels and by using low-emission airtight containers, MES
continues its eﬀorts to conform to the objectives of this law.

Engineering Corporation (MKE) and Mitsui Zosen Machinery

power generation, has enabled the generation of electricity

1,290● Proper management of speciﬁc chemical substances(PRTR substances)

In May 2017, our subsidiaries Mitsui Zosen Environment

exhaust heat boilers, and a small-scale steam power(10,000 t)

1,500● Initiatives for reducing waste

been an issue for the facility. In an eﬀort to achieve a● CO 2 emissions * 2

Electricity

activities such as switching the fuel for in-house power generationfrom heavy oil to natural gas. The graphs on the right show ourtotal energy consumption, CO2 emissions, and purchased electricity
over the past ﬁve years. Corresponding with an increase in the
manufacturing of ships and diesel engines, our mainstay products,
total energy consumption for ﬁscal 2017 increased slightly year on
year. As a result, CO2 emissions rose approximately 1% from theﬁscal 2016 level.

At Chiba Works, our subsidiary Green Power Ichihara Co.,

Fuel

●Total energy consumption

MES continues its eﬀorts to reduce CO2 emissions through● Speciﬁed chemical substances(amount of emissions + travel amount)●Breakdown of speciﬁed chemical substances(amount of emissions + travel amount) in FY2017

（t)

（t)

600

1,200

1,014

1,000

500

900

800

688

730 678

400

600

300

400

200

200

100

0

338
184
130
24

0

2013 2014 2015 2016 2017 (FY)

Xylene Toluene

2EthylManganese Others
benzeneandits compound●CO 2 emissions in relation to transportation amountCO 2 emissions
CO 2 emissions (t)years, as well as domestic transportation (ten thousand tons-kilo)
and unit consumption (= amount of energy consumed for transportation per amount transported). Domestic transportation inﬁscal 2017 decreased by approximately 50% from the previous
ﬁscal year, while energy use per transportation increased byapproximately 6% year on year.

Domestic transportation

12,00018,00010,00015,0008,000

12,000

6,000

9,000

4,000

6,000

2,000

3,000

44

45
Corporate Action Report 2017

0.2

9,020

0.1

8,320

4,250

5,090
2,880

0
2013

Corporate Action Report 2017

Unit consumption(kℓ/10,000t-km)

0.174

2,150
0

Unit consumption

Domestic transportation(10,000 ton-kilometers)

2014

2015

2016

2017

(FY)

0

Environmental Preservation

Work Environment(As of March 31, 2017)● Environmental management data of subsidiaries (Domestic factories of MES subsidiaries in Japan)●Eﬀorts to prevent labor accidents
Based on the MES Occupational Safety and Health Management●Total energy consumption● Energy conservation and CO2 emissions

Electricity（TJ) ※1

The total volume of subsidiary energy consumption for ﬁscal

957

1,000

2017 was down approximately 10% from ﬁscal 2016. During

815

800

that same period, the amount of electricity purchased by● CO 2 emissions * 2

Fuel

843

subsidiaries decreased by no more than approximately 4% from

5.04

4.86

4.36

(president). Based on this basic policy, we have developed and4.95

introduced the Company-Wide Occupational Safety and Health4400

the previous ﬁscal year.

5.69

6

600

652

Management Plan. We also hold labor and management councils
and conferences to discuss measures and to promote the plan. We

2200

CO2 emissions in ﬁscal 2017 were down approximately 13% due

also inform employees of the plan and collect their opinions through00

to a decrease in energy consumption and CO2 emission●Basic policy
Regarding corporate behaviors relating to safety and health, we willachieve the followings by instilling a safety culture in each workplace andfostering 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” fordesignated amount), discipline, and habit
2) Transmission of the philosophy for safety3) Mutual warning and 3-nai management (3-nai literallymeans “3 donʼts,” that is, “Donʼt allow unsafe behaviors,” “Donʼtcompromise by making excuses,” and “Donʼt 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 andheal t h and implement ing t he wor k place s a f e t y and heal t hmanagement plan and promoting the PDCA of the activities.

and health for the overall company declared by the employer(10,000 t)

858

822

Company-Wide Occupational Safety and Health Management Plan

System Manual, we maintain our basic policy on occupational safety

2013

2014

2015

2016

2017

2013

(FY)

2014

2015

2016

2017

(FY)

the safety and health committee of each works, workplace, etc. We
provide training relating to programs in a company-wide manner or at

coeﬃcient of electricity.

each work or workplace, and also provide special training to young● Purchased electricity●Water consumption(1,000 kWh)

(1,000 cubic meters)

80,000600● Eﬀective use of aquatic resources
Water consumption has been increasing since ﬁscal 2013. In ﬁscal
2017, it was up approximately 2% from the previous ﬁscal year.

62,11057,468 59,799

60,00067,994 65,389

Industrial water

employees as necessary.

Service water

We also receive ﬂash report of labor accident from subsidiaries andshare the information to improve the safety level of the overall

423

392

400

441

440

450

Group. Depending on the result of labor accidents, the safety andhealth inspection patrol may be conducted by the Company-Wide

40,000General Safety and Health Manager and the director in charge of the

200

20,000
0
2013

2014

2015

2016

2017

(FY)

273

0

2013

2014

2015

2016

2017

Environmental & Safety Control Department.
(FY)*1 TJ: Tera Joule (=1012J) *2 CO2 emissions were calculated by following the Guidelines for Calculating Corporate Greenhouse
Gases Emissions issued by the Ministry of the Environment. CO2 emissions from electric power were calculated by using theadjusted CO2 emission coeﬃcient for designated electric enterprises that was also published by the Ministry of the Environment.

●Total waste amount and recycle rate

● Data related to waste
Compared to ﬁscal 2016, the amount of waste for ﬁscal 2017
increased by approximately 0.3%. Domestic subsidiaries include

Disposed amount

Quantity (t)Recycle rate (%)

50,000100

30,000and ship repair operations that diﬀer from operations conducted

19,20020,000by MES. As such, the breakdown of waste from our subsidiaries

18,10021,70022,500 22,600

10,000also diﬀered from MES. Approximately 40% of the waste
produced by domestic subsidiaries was slag (ﬁscal 2017). Due

2013

2014

2015

2016

2017

60

○ Concerning the Team Safety II activity, the presidentʼs prize were awarded two times during the year.

40○ 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.

20

15,8000●Speciﬁc measures in 2016

80

70.1

40,000those involved in iron casting, steel casting manufacturing,

Recycled amount(FY)○ Safety and health inspection patrol of works were conducted by the president during the Safety and Health Promotion Months (July to August).

0

Proposals for improvements were solicited during the period, and remarkable proposals were awarded by the president.

to the progress in the recycling of slag, the recycle rate increased○ The safety and health slogan for the year was solicited from the employees.

0.2% from ﬁscal 2016, to approximately 70%.

● FY2017 breakdown of waste

（%)

Slag

Scrap metal

Waste wood

40.6

29.8

5.4

Waste oil

8.5

Rubble

3.4●Aiming to create workplaces that enable employees to enjoy working energetically‒ A message from the director in charge of the Environmental & Safety Control Department
Under the company philosophy of “To continue our role as a trusted company, and as a trusted member

Others12.4

of society” the companyʼs corporate code of conduct is to provide a safe, comfortable and healthy
workplace for its employees.

● Environmental accounting (non-consolidated)
MES spent a total of 4,010 million yen on investments
and costs related to environmental preservation eﬀorts.
A detailed breakdown of these expenditures is shownon 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 370 million yen
spent on investment, consisting of 340 million yen
spent on research and development, 20 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 3,640 million yen,which included 2,490 million yen spent on the researchand development of environmentally friendly energysaving products, 680 million yen as the cost for
preservation of the global environment, including
energy conservation, 210 million yen allocated toresource circulation costs such as waste treatment, and
180 million yen for pollution prevention costs.

In the ﬁeld of safety, we have established the safety ﬁrst policy, under which we make daily eﬀorts toEnvironmental preservation cost (= sum of investment and cost: 4,014 million yen)
Categories corresponding
to business activities

Investment

Costestablish manufacturing and engineering practices that give top priority to safety, by positioning(JPY million)

initiatives for preventing labor accidents as the most important tasks. In the ﬁeld of health, we work
together with the health insurance association to promote the data health plan aggressively, hold a

Major initiatives and eﬀects

range of seminars for preventing lifestyle-related diseases, provide individual employees with speciﬁc

1. Business Area Cost

health guidance and instructions for preventing any increase in the severity of diseases, and take other(1) Pollution prevention cost

19.4

177.8

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

9.5

683.6

Energy saving(3) Resource circulation cost

0.0

210.7

Waste treatment

2. Upstream / downstream cost̶̶

3. Administration cost

̶

78.6

Environmental management system implementation,
integrated reports, and environmental education

341.7

2,487.6

Development of various environmentally friendly products

5. Social activity cost̶

2.7

Road cleaning, seminar sponsorship

6. Environmental remediation cost̶

2.4

Environmental damage countermeasure

370.6

3,643.4

4. Research & development costmeasures.
Recent years have seen an accelerating trend of companies seeking to promote good health among
their employees. It is now commonly recognized that health-oriented management contributes to
Director andManaging Executive Oﬃcer

Akira Nishihata

corporate growth and sustainability.
At MES, the Environmental & Safety Control Department, which was established in 2003, is responsible
for the environmental management, safety and health control, and the medical oﬃceʼs tasks, in an
integrated manner. By working together with the safety and health section in the general aﬀairs
department of each facility, we strengthen the system for collaboration among the employer (MES),
the insurer (health insurance association), and medical institutions. We aggressively pursue health-Totaloriented management by establishing a system that enables a quantitative understanding of employeesʼ
health issues, responses to them, and achievements made through the responses.
In 2017, when we celebrate our 100th anniversary, we will make eﬀorts to create workplaces that permit
all employees to communicate with each other and enjoy working actively in a comfortable environment.

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Corporate Action Report 2017

Corporate Action Report 2017

Human Assets● Initiatives for developing human resources

Initiatives for creating workplaces where every single employee is respected

We have set “making them full-ﬂedged in ﬁve years” as the goal for training young employees. We provide them with group training in their
In corporate activities, every single person
working in a workplace is irreplaceable. We

ﬁrst and third years at the company, training on basic skills for speciﬁc types of job, and other training programs. We also provide

System for promoting human rights awarenessjob-class-speciﬁc training programs, including one for mid-level employees and one for those in managerial positions. In addition, from thebelieve that a workplace environment withviewpoint of fostering global human resources, we oﬀer English courses and training programs related to cross-cultural communications

Head of the Company-Wide Promotion Committee(director in charge of personnel aﬀairs)

respect for human rights not only provides
job satisfaction and creates something that

Company-Wide Meeting of People in Charge of
Promoting Human Rights AwarenessCompany-Wide Secretariat(Personnel & General Aﬀairs Dept.)

employees live for, but also allows employees

and deploy young employees to overseas business locations.
Systematic chart of human resource development

to show their abilities to the fullest, leading
to greater productivity.
At MES, we have established a Basic Policy
for Enlightening People about Human Rights.
Under this policy, we carry out a variety ofrights awareness training for all directors,

Kansai Oﬃce Committee
for Promoting Human
Rights Awareness

Chiba Works Committee
for Promoting Human
Rights Awareness*Serves concurrently as
the company-widecommittee

an equal, discrimination-free workplace

Person in charge of human rights awareness at MES

Head of the subsidiaryʼs
Committee for Promoting
Human Rights AwarenessOita Works Committee
for Promoting Human
Rights AwarenessAn internal committee
has been establishedat each Works.

auditors, and oﬃcers, in our eﬀorts to create

Training for accelerating
the development ofyoung employees

Group Companiesʼ Liaison Conferenceon Human Rights AwarenessSubsidiary secretariat

Subsidiaryʼs Committee for
Promoting Human Rights AwarenessSubsidiaryʼs Committee for
Promoting Human Rights Awareness

Enhancingmanagement
capabilities

Developing andstrengthening
global human resources

Enhancingthe capability ofmaking improvements

manager candidates● Manager training● Level 3 training

Team leader
positionsfor team leaders● Level 1 training

for team leaders● Essay on improvement(Examination for promotion toa managerial/professional position)● Essay on improvement(Examination for promotion fromLevel 2 to Level 3 team leader)● Third year training

environment where human rights are valued.

Core
positions(youngemployees)● Initiatives for creating healthy workplaces

Others● Line manager training● Training for line

Managerial/
professional
positions

Head of the subsidiaryʼs
Committee for Promoting
Human Rights AwarenessSubsidiary secretariat

Developing andstrengthening
mid-level employees

promotion to a higher job family(600 points or higher)

in their second/fourth year
● FU training

for new employees● Introductory training

for new employees

Under our basic policy on the safety and health management plan, we create comfortable● Target TOEIC score for● FU interview for staﬀ

English courses

rights for speciﬁc job classes, including human

Tamano Works Committee
for Promoting Human
Rights AwarenessDispatch for external training

activities for raising awareness of humanHead Oﬃce Committee
for Promoting Human
Rights Awareness*● “BPS activities carried out alone”

by employees in their second year
● BPS training for new employees● Overseas deployment system● Mandatory English courses forﬁrst- and second-year employees● Basic skills

training

workplaces by managing the physical and mental health of our employees in a proactive manner.

●Overseas deployment system

We compile a database of the results of periodical health examinations, with which our occupationalsafety and health staﬀ and health insurance association manage the health of individual employees
thoroughly. To provide speciﬁc examples, they hold various seminars for preventing lifestyle-relateddiseases and provide individual employees with speciﬁc health guidance and instructions forpreventing 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 MES Group companies,
to improve their lifestyles. In this program, we have them select health challenges that are appropriate
Line care training session

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 Environmental & Safety Control Department has concluded a blanket contract so that
employees of the MES 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 than

Health Attack

ten years.

EAP service●Overview of the system
We established this system in 2015 in accordance with the following objectives andbegan operating it.
●Objectives□ Developing the international sensibility of trainees by having them experience
working and living overseas as the groundwork for developing human resources
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.
●Required achievement/goal
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 inan overseas country, broadly and shallowly. It is not aimed at developing specialists
in the destination countries or in the businesses of the companies to which they are
deployed.

○Average length of period of deployment :6 months to 1 year
○2016 results
First half of 2016: 2 employees were deployed
Destinations

PeriodVietnam: Project site
Singapore: Project site

6 months
1 yearSecond half of 2016: 3 employees were deployed(including deployment under an internship program)
Destinations

PeriodSingapore: Group company
6 months
China: Group company
6 months
Myanmar:6 months
Chamber of Commerce and Industry● Initiatives for promoting work-life balance
We aim to ensure that all our employees, both men and women, show their abilities to thefullest in manners that are appropriate for various life events. We have established a Flexible
Working Hours System without core time, as well as holidays and paid leave programs, so

Voice

Voice

that employees raising children or providing nursing care to their families can continue
working while achieving a balance between work and family. We also provide employees

Chie Terashita

on Maternity Leave or Childcare Leave with support for education/training so that theperiod of their leave will not be a blank period in their career trajectory.

Takayasu Ekuni
Personnel & General Aﬀairs Department

Pickup○Period of leave：September 1, 2016 to February 28, 2017

Encouraging male employees to take Childcare Leave
As a measure for promoting work-life balance, we work to increase the number of male
employees who take Childcare Leave. We revised the leave systems for employees raisingchildren or providing nursing care to their families and reached out to their superiors andthe employees themselves. As a result, in 2016, ﬁve male employees took childcare leaveand six took a leave of absence that may be taken for the purpose of childcare.

It was a valuable experience for the three of us tospend time together immediately after our baby
was born. I wondered what to do on manyoccasions, because I had never raised a child before.
However, my baby has been growing steadily,growing more active, more self-assertive, and more
lovely day by day. I really appreciate my co-workers,
who helped me to take Childcare Leave. Thank youvery much.

PickupBusiness Planning Department,
Corporate Planning Headquarters

Transfer of skills by Skill Masters
Transferring the high level of skills held by veteran employees to
mid-level and young employees is essential for business operation.
The Skills Transfer Center established at the Tamano Works in Chiba
Prefecture recognizes veteran employees with a high level of skills
as Skill Masters, who transfer their skills and techniques to young
employees.

I worked as an intern for a local Chamber of Commerce and Industry in
Myanmar, which is attracting attention as the “last frontier in Asia,” for aperiod of about six months from September 2016. I faced a range ofdiﬃculties in that country, including the fact that most people donʼt
understand English. Moreover, people were not proactive in providing
me with support, operations are not established, and local businesscustoms diﬀer from those of Japan. However, I was able to improve mycommunication capabilities and ﬂexibility and grow more active thanever by expanding the range of my activities proactively in thatenvironment. I was also able to consider how I should contribute to thecountry as a Japanese. It was an incredibly valuable experience for me.

48

49

Corporate Action Report 2017

Corporate Action Report 2017

Social Contributions●Road cleaning at Oita Works●Performance of the Swing Vessels, the brass band club of MES, for local communities

June is Environmental Month, and each year during this period we pick

The Swing Vessels is a jazz band of MES consisting of 21 members aged

up litter on the premises of Oita Works and on prefectural roads aroundfrom their 20s to their 60s, including employees of Group companies. As

it (an approximately 1.5-kilometer section of the prefectural roadthe big band of MES, it performs at events including ship-naming

adjacent to the facility). This activity is aimed at raising theceremonies and parties of subsidiaries. It also performs at local festivals

environmental awareness of our employees as well as minimizing

held around Chiba Works and dance parties hosted by local

waste. We use the road for commuting, so the activity also reﬂects ourorganizations, among other events.

intention to contribute to the beautiﬁcation of the local community asmuch as possible.
We commenced this activity in 2001, when we acquired ISO 14001

Voicecertiﬁcation. This means that as of 2016, we had carried out this annual
activity for 15 years. It has become an important event at Oita Works.

An autumn concert held in November 2016

Voice
Mayu Nishioka
Design Department I, Engineering Headquarters

I play trumpet in the band and act as MC at local events. Nothing makes

Masahito Ikeda

me happier than the positive feedback I receive from the audience

General Aﬀairs Department, Oita Works

while emceeing and the favorable comments they give us after aperformance. The band consists of a variety of people, including

We carry out this cleaning activity through cooperation across the entire

veterans and young players and both men and women, but we arefacility. All of the participants carry out the same task for the sameunited in enjoying playing during our performances. We will continue

objective, which has led them to develop a feeling of fellowship and aplaying so that many more people will enjoy our performances.

sense of unity as an organization. We will continue this cleaning activity
with the aim of contributing to the local community.

Performance at a local May Day event in Ichihara in April 2017

Cleaning activity● Support for the activities of the Fureai Trio
●Mitsui Zosen Summer Festival held at Tamano Works

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.

In July 2016, we held the Mitsui Zosen Summer Festival (MES Summer

Genichi Watanabe, a cellist. The activities of the Fureai Trio commenced

Festival) at Tamano Works, inviting local residents as well as employees

in 2003 with a desire to expose children and people with disabilities,

and their families. The events for the festival included a bus tour around

who have few opportunities to be exposed to classical music, to live

the facility, during which the participants observed our marine diesel

classical music and enrich their lives spiritually. The trio gives public

engines and other equipment, as well as snack food stalls operated by

performances in about ten cities every year, two to three times each. It

the employees, playground equipment prepared by them, and stage

has given 439 public performances for approximately 101,000 people toevents such as singing and dancing shows.

date (as of March 31, 2017). Since the activities of the Fureai Trio started

In 2016, we celebrated the 40th occasion of this summer festival, whichin 2003, we have not only co-sponsored its events, but have also

is well established in the local community as an annual summer event. A

provided volunteer services to support its concert activities.

A public performance at Tokyo in December 2016
(Venue: Tokyo Bunka Kaikan in Taito Ward)

total of 15,000 people (including MES employees) took part in 2016.

●Activities of the Mitsui Public Relations Committee

Voice

At MES, we have co-sponsored a range of cultural activities as amember company of the Mitsui Public Relations Committee, which
consists of 24 Mitsui Group companies. This committee carries out avariety of activities aimed at “enriching society by cherishing people
and respecting diverse personal characteristics,” working in linewith the characteristics of the Mitsui Group described as “Mitsui is

Daisuke Yano

People.” Examples include the MITSUI Golden Glove Award, anGeneral Aﬀairs Department, Tamano Worksaward that stresses the importance of ﬁelding in professional

We hold the Summer Festival to repay our obligation to the local

baseball, and the Mitsui Golden Glove Baseball Class for boysʼ

community. I was happiest to see the smiles of the families who live inbaseball coaches, which is held by inviting winners of the award to

Tamano as a company town. I was also glad that the event caused manybe instructors. The Mitsui Public Relations Committee is also

children to yearn for the ocean and ships. In 2017, when we willproactive in cultural and art activities. For example, it created theInstructors for the 15th Mitsui Golden Glove Baseball ClassMITSUI Golden Takumi Award in 2015 with a desire to create ancelebrate our centenary, we would like to express our gratitude to
Tamano City and Okayama Prefecture because we are very happy to

The festival attracted about 15,000 people, including families.

opportunity to attract attention and admiration to people involved
in “Tradition x Innovation.”

have been with them.

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Corporate Action Report 2017

Corporate Action Report 2017

Company Profile
Company Proﬁle (As of March 31, 2017)

Oﬃces and Works
Number of sharesauthorized to be issued

1,500,000,000 Shares

November 14, 1917

Number ofoutstanding shares

830,987,176 Shares

Established inJuly 31, 1937

Number of shareholders

63,195

Capital44,385 million Yen

Employees

13,171 (Consolidated)
3,717 (MES Only)

Company Name

Mitsui Engineering & Shipbuilding Co., Ltd.

Head Oﬃce Location

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

Hokkaido Oﬃce

● Head Oﬃce / Works

Major Group Companies● Oﬃce / Branch Oﬃce

Corporate Management
Divisions etc.

Ship

MachineryEngineering

Niigata Shipbuilding & Repair, Inc.

Mitsui Zosen Machinery & Service, Inc.

Mitsui Zosen Plant Engineering Inc.

Shikoku Dockyard Co., Ltd.

MES Technoservice Co.,Ltd.

Showa Aircraft Industry Co., Ltd.

Akishima Laboratories (Mitsui Zosen) Inc.

Mitsui Meehanite Metal Co., Ltd.

Mitsui Zosen Environment
Engineering Corporation

MES TOKKI & Engineering Co., Ltd.

Sanzo Manufacturing &Construction Co., Ltd.

Sanzo Yuki Recycle K.K.

MES Facilities Co., Ltd.

MES Shipping Co., Ltd.
MES-KHI Yura Dock Co., Ltd.

Tohoku Oﬃce
Mitsui Zosen Systems Research Inc.

Kansai Oﬃce

Hamamatsu Green Wave Co., Ltd.

Mitsui Zosen Steel Structures
Engineering Co., Ltd.

Green Power Ichihara Co., Ltd.

Makuhari Center Oﬃce
Chugoku Oﬃce

DPS Bridge Works Co., Ltd.
Kaji Technology Corporation

MODEC, Inc.

Head Oﬃce

Kure Branch Oﬃce

Betsukai Biogas Power Co., Ltd

MES Testing & Research Center Co., Ltd.

Ocean Development

Chubu Oﬃce

Kyushu Oﬃce

Azuma Machinery Co., Ltd.

Chiba Works

Fukuoka Design Oﬃce

Tamano Machining Center Co.,Ltd.

Higashi Kyushu Oﬃce
Yura Ship Repair Dept

Shareholding situation by each category of shareholders (A s of March 31, 2017)
Corporations otherthan ﬁnancial
ins titutions or
s tock companies
10.3％

Stock companies
1.6％
Financial
institutions
39.0％

Foreignnationals
20.2％

Individuals,
etc.
28.8％

Oita Works
Tamano Works

The total number of shareholders 63,195
Number ofshareholders

Number of
Shares Held

Shareholding
Ratio (%)

74

324,412,884

39.0

62,286

239,527,129

28.8

Foreign nationals

314

167,977,507

20.2

Corporations other than ﬁnancial
institutions or stock companies

455

85,692,117

10.3

Stock companies

66

13,377,539

1.6

Category

Financial institutions
Individuals, etc.

Okinawa Oﬃce

Oversea Network

Simon Carves Engineering Limited
Mitsui Zosen Europe Limited
TGE Marine Gas Engineering GmbH
Burmeister & Wain Scandinavian Contractor A/S
MES Technoservice Machinery Construction
Logistics, Industry and Trade Corporation
Beijing Representative Oﬃce

Major 10 shareholders (A s of March 31, 2017)

Shanghai Hudong Sanzo Marine Machinery Co., Ltd.

Name

Number of Shares Held(Thousand Shares)

Shareholding Ratio(%)

42,970

5.31%

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

34,081

4.21%

Japan Trustee Services Bank, Ltd. (Trust Account 9)28,088

3.47%

Mitsui & Co., Ltd.

25,500

3.15%

The 114th Bank

25,460

3.15%

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

23,3162.88%

Mitsui Life Insurance Company, Limited

16,0001.97%

DFA INTL SMALL CAP VALUE PORTFOLIO

14,505

1.79%

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

14,297

1.76%

Mitsui Sumitomo Insurance Company, Limited

13,647

1.68%

Mitsui Zosen(Shanghai) Co., LTD.
CSSC-MES Diesel Co., Ltd.
MES Ferrotec China Co.,Ltd.
Hanoi Representative Oﬃce

Busan Representative Oﬃce
MES Technoservice Middle East WLL.
Mitsui Thanglong Steel Construction Co.,Ltd.
MES Mitr Project Service Co.,Ltd.
MES (Thailand) Ltd.

Mitsuizosen Technoservice Taiwan Co.,Ltd.
Mitsuizosen Technoservice HongKong Ltd.

52

Engineers and Constructors
International,Inc.

DASH Engineering Philippines, Inc.
Mitsui Engineering & Shipbuilding Asia Pte. Ltd.
AZUMA Engineering (S) Pte Ltd.

Corporate Action Report 2017

PACECO Corp.

MES Technoservice (Shanghai) Co., Ltd.

Jakarta Representative Oﬃce

MODEC International, Inc.

http://www.mes.co.jp/
1711FR10SCOP