New Medium-term Management Plan Hitz Vision II

 Hitachi Zosen Corporation is pleased to announce that it has drawn up a new medium-term management plan, Hitz Vision II, covering the three-year period starting fiscal year 2014.

 In May 2011, the company formulated the long-term Hitz 2016 Vision with the aim of leading the Hitachi Zosen Group on a great leap and path of growth toward fiscal year 2016. During the first three years of this long-term vision, covered by the medium-term management plan Hitz Vision (FY2011?FY2013), Hitachi Zosen worked to build a foundation for expanding operations and evolving into a highly profitable company with public recognition.

 Despite signs of the economy picking up by the final year of Hitz Vision (FY2013) thanks to fiscal policies of the government of Japan and monetary policies of the Bank of Japan, Hitachi Zosen fell short of its targets in order intake, net sales, and profits. However, the company confirmed steady progress in key policies such as the globalization of business (M&A of overseas companies, expansion of overseas bases), the creation of new products and businesses, and an enhancement of basic profitability (expansion of stable business such as long-term operation and after-sales service)?all efforts to build a foundation for evolving into a highly profitable company.

 The new medium-term management plan Hitz Vision II is based on this outcome. It seeks to address and resolve the challenges presented through Hitz Vision by delivering products and services designed to win customer satisfaction in growth areas increasingly in demand by society and which the company has designated as its business domains: Environment/Green Energy and Social Infrastructure & Disaster Prevention. Hitachi Zosen plans to devise and execute an optimal strategy to this end, incorporating the new approach of a "technology-oriented company," in an aim to be a group that produces remarkable results.

1. Positioning of the new medium-term management plan
   The three years covered by the medium-term management plan Hitz Vision II seeks to address the challenges    presented by changes in the business environment as well as by Hitz Vision, and to achieve targets toward the
   goals of Hitz 2016 Vision.

2. Hitz 2016 Vision (management targets for FY2016)

(1) Hitz 2016 Vision management targets are given below.
     Hitachi Zosen will focus on strengthening profitability, reflecting on the results of Hitz Vision.

(2) Hitz Vision II numerical targets are given below.

 The company aims to achieve 500 billion yen in order intake, 400 billion yen in net sales, and 23 billion yen (5.7%) in operating income in the final year, FY2016, to build the foundation for becoming a 500 billion yen company in or after FY2017. In the three years covered by Hitz Vision II, Hitachi Zosen is planning to expand expenses from 52.8 billion yen during Hitz Vision to a total 100 billion yen: 30 billion yen in R&D expenses, 30 billion yen in capital investment, and 40 billion yen in M&A, stock investment, and loans.

3. Hitz Value (corporate philosophy, management stance, and standards of business behavior)
   Hitachi Zosen will continue to adhere to the basis of its activities, the Hitz Value?comprising corporate philosophy,
   management stance, and standards of business behavior?in efforts to acquire the technologies and
   problem-solving abilities needed to contribute to society and to seek further growth as a group.

4. Hitz Vision II management policies
I. Basic approach to management policies
(1)"Technology-oriented company"
  The Hitachi Zosen concept of "technology-oriented company" involves a return to the corporate philosophy to
  strengthen fundamental technologies as well as proprietary technologies (in a broad sense, including work
  processes). The aim is to deliver customer satisfaction and high added value toward sustainable growth.

(2) Select businesses and concentrate management resources
  The Hitachi Zosen approach to selection and concentration involves devising a strategy to produce results
  in the growth areas of its business domains. The group will concentrate management resources on these
  growth areas, and drive change in unprofitable businesses.