October 15, 2007
Hitachi Zosen Corporation
Capital Investment Targeting Increased Production of
Law Speed Marine Diesel Engines
【
Total investments of approximately ¥10 billion to create a system with a
capacity of approximately 2 million horsepower in 5 years.】

Hitachi Zosen Corporation has recently finalized the decision to make a total capital investment of ¥10 billion in Hitachi Zosen Diesel & Engineering Co., Ltd. (HZ D&E, Takeo Koike, President, Nagasu-machi, Tamana-gun, Kumamoto Prefecture) and IMEX Co., LTD. (IMEX, Seiichiro Tsurisaki, President, Innoshima habu-cho, Onomichi, Hiroshima Prefecture), 100% owned subsidiaries working in the manufacturing of low speed marine diesel engines, in order to establish a system for the increased production of low speed marine diesel engines.
In recent years, the volume of new shipbuilding and construction around the world has
reached record high in a reflection of the active demand for marine transportation. There
have been intensified investments in ship building facilities and equipment, both in
Japan and abroad, and demands from our customers have been growing increasingly
stronger for the expansion of supply of marine engines. With these situations, our
company has finalized its decision to make a capital investment in HZ D&E of
approximately 9 billion Yen and an investment in IMEX of approximately 1 billion Yen,
for a total capital investment of approximately 10 billion Yen. Through these
investments, we aim to a establish a production system that in five years, by fiscal 2012,
will achieve a total annual production of 120 to 130 engines and a total capacity
exceeding 2 million horsepower. This is approximately twice what we achieved in fiscal
2006. In addition to meeting the demands of our customers, these investments will also
help us to further strengthen our competitive edge.

Our company began producing MAN B&W type diesel engines in 1950, and since that
time, we have delivered many engines to our customers. We completed the construction
of our Ariake Machinery Works in 1997, established HZ D&E in 1999, and we had
achieved a cumulative production total of 20 million horsepower for our MAN B&W type
diesel engines by 2002. In 2007, we again began production of the Wartsila type diesel
engine (formerly known as the SULZER type diesel engine), which our company had not
been producing for 11 years, making HZ D&E the only manufacturer in Japan to produce

both MAN B&W and Wartsila type electronically controlled diesel engines. IMEX was
spun off in 1987 from the Land Machinery Division of our Innoshima Works. In addition
to manufacturing low speed marine diesel engines, IMEX also manufactures boiler plant
equipment, industrial land machinery, and environment machinery. While HZ D&E
works primarily in the area of large equipment, IMEX specializes in the manufacturing
of small equipment.

Since 2006, our company has been making capital investments with a focus on civil
market for which future large demand is expected, including investments in Hitachi
Zosen Mechanical Corporation. (total assembly plant for processing equipment including
pressure vessels and heat exchangers: approx. 2.5 billion Yen), HZ D&E (precision
machinery plant for parts for low speed marine diesel engines, including fuel valves and
fuel pumps: approx. 600 million Yen), and Hitz Hi-Technology Corporation. (plant
specializing in the manufacturing of lapping plates for polishing silicon wafers and
memory disks for IT applications: approx.1.6 billion Yen). These new capital investments
are a follow-up those mentioned above. Through the ongoing planning and
implementation of capital investments which are both aggressive and effective, we aim to achieve the goals of our three year medium term management plan “Hitz －
Innovation”, for which this year is the final fiscal year, and to further enhance our next
medium-term management plan, which is currently being developed.
The following is an overview of the capital investments being made at this time.
1. Company
name
HZ D&E

IMEX
2. Details of
capital
investment
(location)

①
Production facilities including
a large-scale machinery plant
(6,000 m
2
), an assembly and
shipping plant (8,250 m
2
), and
other shared facilities (In the
Ariake Machinery Works:

1,
Oaza Ariake, Nagasu-machi,
Tamana-gun, Kumamoto
Prefecture
)
②
Cutting and Welding,
Machining facilities
(In the Sakai Works:
5-1,
Chikko-shinmachi 1-cho,
①
foundation construction.
②
Expansion of auxiliary equipment
for operating facilities.

③
Updating and expansion of
machine tools, etc.
(In IMEX:

2293-1, Innoshima
habu-cho, Onomichi, Hiroshima
Prefecture
)

Nishi-ku, Sakai, Osaka
Prefecture
)
3. Type of
machines
produced
Low Speed Large marine diesel
engines
(Type 46 cm bore and larger)
Low Speed Small marine diesel
engines
(Types 35 cm bore and 42 cm bore)
4. Date of
completion
During fiscal 2009
March 2009
5. Total
investment
approx. ¥9 billion
approx. ¥1 billion