Mitsui Sets Eyes on Modi’s Pet Infra, Energy Projects

TIME TO SCALE UP From smart cities to bullet trains to power assets, Japanese trading powerhouse sees big investment opportunities in India
Japanese trading powerhouse Mitsui is stepping up its focus on India, with a special eye on infrastructure development, energy and lifestyle as it seeks newer growth avenues to diversify from its strong resources-focused investments worldwide that are under pressure on the back of volatile commodity prices.Mitsui considers India as a natural investment destination. It remains one of its four priority markets in Asia along with China, Indonesia and Myanmar and is integral to its globalisation vision for 2020. As India and Japan explore ways to strengthen bilateral and economic cooperation, Mitsui aims to partner the flagship ventures of PM Narendra Modi -from helping build ambitious smart cities to fast-moving bullet trains or even support the energy needs of an oil & gas guzzling nation by building key downstream infrastructure.

“We have identified India as a priority country in 2010. Between 2012 and 2014 we doubled our investments in India as part of our proactive approach to doing business with India,“ Masami Iijima, president & chief executive of Mitsui & Co, told ET in an interview. “We currently have investments and loan guarantees totaling ¥27.5 billion (approximately ` . 1,500 crore) and will be accelerating this investment in future,“ he added.

Tokyo remains the strategic economic ally of the NDA government. Last year, the Japanese premier promised $35 billion (¥3.5 trillion) of Japanese investments in Indian infrastructure, during his state visit. Around the same time, a delegation of Mitsui senior executives met their counterparts in India Inc, government officials and Japanese lenders to gauge various investment opportunities.

Mitsui is Japan’s second largest trading powerhouse and together with Mitsubishi and Sumitomo form the elite sogo shoshas. Created in the nineteenth century to aid Japan’s industrialisation, it remains primarily traders but in recent years, have also invested longer-term capital -especially in natural resources -along with specialists like BHP Billiton or Gazprom. Its footprint spans 66 countries and range from Australian iron ore through US shale gas to Chinese logistics.

Even in India, Mitsui currently has nineteen joint ventures in sectors as diverse as pharma to specialty steelmaking, agri-processing to outdoor advertising and motorcycle manufacturing. Its local partners include Mahindra Group, Claris LifeSciences, Ruchi Soya Industries and Yamaha.

FOCUS ON ENERGY

The focus for India now is to acquire power assets and build a natural gas value chain like LNG terminals. “Infrastructure expansion is one of the areas we are aggressively pursuing in our business in India. Mitsui is actively involved in infrastructure projects relating to electricity , transport, resource and energy , water, urban development and others,“ said Iijima, 64, and a Mitsui loyalist for the last 41 years. He didn’t want to talk specifics about potential new partners or takeover targets, only highlighting the macro strategy .

Globally , the company owns stakes in 67 independent power producers in 20 countries. These equity investments give them access to 8480 MW of generated capacity . But Mitsui sees the distressing financial health of state power distribution companies as one of three major challenges to attract large scale foreign capital. The company’s top brass has already made representations to finance minister Arun Jaitley and power minister Piyush Goyal to express their concerns.

Like most of its Japanese peers eyeing mega contracts from the pet initiatives of PM Modi, Mitsui too, is ready to seize the opportunity.

“We are involved in the flagship projects. In the railway-related sector, we are currently focused on the Dedicated Freight Corridor. While this is still some way off, bullet trains are one of our key areas of expertise. We already have a proven track record in this area, being the leading company exporting technology to support the Taiwan High Speed Rail project, and we intend to continue working closely with the Japanese government,“ said Iijima, who takes over as chairman from April.

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