Toshiba president and chief executive Norio Sasaki at a news conference in Tokyo

Toshiba to increase focus on renewables

Toshiba plans to increase focus on renewables after the Fukushima crisis resulted in setbacks to its nuclear sales.

Japanese firm Toshiba said it will concentrate on renewables and smart grids as it aims to more than double its operating profit to 500 billion yen despite the setback to its nuclear business.

It admitted it may not reach its target of 39 orders for nuclear reactors until two to three years later than expected as the crisis at the Fukushima Daiichi plant has fuelled public opposition to nuclear power worldwide.

The disaster will likely lead to a tightening of safety regulations, and while Germany has already moved to close older reactors, other governments have launched safety reviews.

"If everyone around the world is against nuclear power, there is no point in us saying it is a pillar of our strategy," Toshiba President Norio Sasaki said.

"But it is going to take some time to work out exactly what the environment is."

Orders for four AP1000 nuclear reactors in China are on target, but approval delays in the United States and other countries could delay Toshiba's goal to expand nuclear sales to 1 trillion yen (£7.6 billion) and 39 reactor orders by March 2016, Sasaki said.

However direct checks with customers had not yet found any planning to change their orders, he added.

Toshiba has set up a 1,900-person team to help operator Tokyo Electric bring the Fukushima plant under control after it was hit by a 9.0 magnitude earthquake and tsunami two months ago.

It will also use 700 billion yen of its funds to build new revenue streams and invest in its flash memory chips, batteries, smart grids and production in emerging markets.

Toshiba has been trying to lower its dependence on nuclear power for growth by investing in solar and other renewable energy sources, next-generation batteries and smart grids.

It now targets sales of 350 billion yen in solar, hydroelectric, geothermal and wind power technologies, 900 billion yen in smart grid products and 800 billion yen in low-power consumption motors, inverters and batteries.

The strategy will expand Toshiba's 2011-2013 capital and research-and-development budget to 1.45 trillion yen, up from 1.3 trillion yen in 2010-2012.

Toshiba will buy unlisted Swiss smart-meter manufacturer Landis+Gyr for around $2.3 billion, it announced last week.

Smart meters are an essential element of smart grids, which are being eyed by utilities and governments around the world as a means of saving energy and cutting carbon emissions.

They are designed to accommodate a range of generation options, including renewables, and to provide customers and utilities with more real time information, enabling them to manage usage and supply more efficiently.

Sasaki said Toshiba still needed to beef up its cloud computing capabilities in order to compete in smart grids.

Toshiba also announced an alliance with South Korean wind power firm Unison Co earlier this week.

The Japanese firm will buy some 3 billion yen in Unison convertible bonds as the first step of the deal and the Nikkei newspaper reported it would raise its stake to about 30 per cent in about a year.

Toshiba also said it plans to boost output at a lithium ion battery plant in Kashiwazaki, Niigata Prefecture, in anticipation of higher demand for use in smart-grid systems.

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