Mitsui Engineering & Shipbuilding Co., Ltd. (“MES” with president Mr. Yasuhiko Katoh), Ferrotec Corporation (“Ferrotec” with president Mr. Akira Yamamura) and its subsidiary company, Shanghai Shenhe Thermo-Magnetics Co., Ltd (“Shenhe” with president Mr. Xian Han He) had been assiduously discussing the establishment of a joint venture company as a foothold for production, sales and after-sales service of induction heater in China, and were grated officially by the Ministry of Commerce, People’s Republic of China an approval for the establishment of MFC Co., Ltd. (MES Ferrotec China Co., Ltd.) (“MFC” with president Mr. Takamichi Kiyota)　on December 15, 2010.

It is scheduled that MFC will start its factory operation in April 2011 with a production plan of 100 units annually in the future.

Induction heating is a heating technology by means of a high frequency wave widely used in the daily life as cooking heaters and/or rice cookers known as “IH”. This heating technology is also used in the industrial circles for various heating purposes for its advantages of quick heating, high temperature, cleanliness and energy-saving performance. MES has been leading the field of induction heating at pre-forging heating process holding the largest market share for more than 40 years since 1966. Among other things, MES is holding an overwhelming market share in the field of Japanese automobile manufacturing industry where high quality control and productivity are required. In view of the fact that China has become the largest automobile manufacturer and automobile consumer in the world, MES had been envisaging and preparing for the establishment of sales, manufacturing and after-sales foothold in China to support activities of Japanese automobile manufacturers in China and to meet the quality improvement demand by Chinese automobile manufacturers.

Ferrotec, since 1992, has been manufacturing in China vacuum seal and quartz products for semi-conductor and flat panel display manufacturing equipment, ceramics and silicon wafer manufacturing equipment for solar panel, and has been running manufacturing companies in Shanghai and Hangzhou employing about 5,000 people.

It is expected that the Ferrotec’s rich experience and know-how on manufacturing management, labor management and quality control in China will contribute a lot to the prompt start of the operation and the quality control in the joint venture company for the induction heater business in China.

In line with the establishment of the joint venture company, the Electric Factory in Tamano Works of MES, who had been a production center of induction heaters, will act as a mother factory to support the joint venture company and will deal with the large-scale and/or special purpose products such as for large-capacity high frequency wave induction heater for iron and steel processes. Focus will be placed especially on the new development of induction heater business to become a development center for high performance heater for semi-conductor production equipment.

MES and Ferrotec have been in a close business relation in terms of semi-conductor production material, which has brought this joint venture cooperation in Chinese market for more business activities. Investment by MES to Ferrotec will further consolidate the business relation of the two companies.