OREANDA-NEWS. Hitachi, Ltd. announced an agreement with its technology partner, Fortune Electric Co., Ltd. of Taiwan, to establish the joint venture company Hitachi Fortune Transformer, Inc. in Taichung, Taiwan in January 2014 ("Hitachi Fortune Transformer"). With activities that will include the manufacturing of transformers, the new company is intended to strengthen Hitachi's power transmission and distribution systems business. Hitachi Fortune Transformer will construct a facility for manufacturing extra high to high voltage transformers in the Port of Taichung Free Trade Zone in Taichung, Taiwan.

The facility is scheduled to commence production in April 2015. The transformers produced by the joint venture will be marketed through Hitachi's global sales network and will carry the Hitachi brand. The anticipated annual capacity of the facility in 2017 is 35 units of 400-MVA transformers or equivalent. The intention is that Hitachi will have a 60% stake in the new company, with Fortune holding the remaining 40%.

The global market for transformers (of 150 MVA or more and except Chinese market) is growing steadily, and is estimated to reach about 8 billion dollars by 2020. In addition to future demand from the leading countries such as North American market for upgrades as power transmission and distribution equipment comes due for replacement, plans are also being put in place for the construction of high-voltage transmission networks that can carry the electric power generated from renewable sources such as wind and solar power generation to cities. In Southeast Asia and the Middle East, meanwhile, there are numerous plans for the construction of wide-area transmission networks to cope with rapidly increasing demand for electric power as economies and populations grow.

For these reasons, it is anticipated that demand for transformers will remain strong.

Hitachi's power transmission and distribution systems business plays a central role in its power systems business. Hitachi also intends to improve the competitiveness of key products such as transformers, circuit breakers, and switchgear, and to expand its solutions business that combines IT and power electronics technology, such as equipment and control systems.

In addition to strengthening its production facilities in Japan, North America, China, and other parts of the world, including upgrading the production capacity at its gas insulated switchgear plant in Indonesia in June this year, Hitachi is also seeking to deliver power transmission and distribution systems that suit specific national and regional requirements for enhancing and extending electric power transmission networks by working to expand its engineering sites in Southeast Asia, the Middle East, and elsewhere.