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Toshiba’s new CEO sticks to nuclear target branded ambitious by analysts

Toshiba’s new CEO sticks to nuclear target branded ambitious by analysts

TOKYO: Toshiba Corp’s newly appointed chief executive said he would stick with the Japanese industrial conglomerate’s target for nuclear power plant orders, dismissing scepticism among analysts who say the target is too ambitious.

“It’s achievable,” Satoshi Tsunakawa told reporters on Thursday, a day after assuming the top post, when asked about the company’s goal of building 45 nuclear power reactors globally by the business year ending March 2031.

Tsunakawa said a fight against global warming and growing energy use in emerging economies was bolstering demand for nuclear power, and would help Toshiba meet the target set by his predecessor Masashi Muromachi.

Muromachi stepped down after a $1.3 billion accounting scandal last year highlighted weaknesses in a number of Toshiba’s varied operations, which include laptops, television sets, flash memory chips and nuclear reactors.

The scandal prompted Toshiba to slash costs throughout its business and sell off its medical devices division. The restructuring effectively left nuclear power and flash memory chips as Toshiba’s core operations, although many analysts have said neither are strong growth drivers.

Masako Kuwahara, senior analyst at Moody’s Investors Service, saw little chance of Toshiba meeting its reactor orders target as many countries froze nuclear energy expansion plans after a meltdown in 2011 at a plant in Fukushima, Japan.

“Given strong anti-nuclear-power sentiment after the Fukushima nuclear accident in 2011 and delays in plant construction, we believe this target is unrealistic,” she said.

Tsunakawa said Toshiba based the target on an assumption that at least 300 new nuclear power reactors will be needed by 2030, and that Toshiba could win 15 percent of the contracts to build them.

Toshiba, which owns U.S. nuclear power engineering company Westinghouse, has built 112 reactors globally, or 26 percent of all 431 reactors installed worldwide.

Its competitors include the U.S.-Japan alliance of General Electric Co and Hitachi Ltd, Japan’s Mitsubishi Heavy Industries Ltd and France’s Areva SA.

Copyright Reuters, 2016

Courtesy : BRecorder



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