The infrastructure sector illustrates how multinationals use new strategies involving complex alliances. Infrastructure projects, such as new power generation plants, are complex and have components that extend for years. Services, maintenance programs, skills training and project financing are no longer sideline programs for infrastructure companies in Asia; they are an integral part of a product offering. It often takes several partners to bring these offerings to market.
On top of these structuring complexities, heightened competition from low-cost rivals based in Asia and changing environmental standards are influencing market dynamics.,/p>
Given these realities, Electric Power Development Co., Ltd (J-Power), is pursuing what Yoshihiko Nakagaki, a Senior Board Advisor and former President, calls integrated infrastructure systems and project-based solutions to expand in Asian markets. The clean-coal technology company’s Build-Own-Operate- Transfer (BOOT) investment in a coal-fired power generation plant in Indonesia in 2011 is a case in point.
Working together with Japanese trading group Itochu Corporation and Indonesian coal company PT Adaro Energy, the deal involves the construction and operation of a new plant in central Java. J-Power’s ultra-supercritical (USC) technology for higher energy efficiency and lower carbon emissions is an important component of the joint offering. “As we face vehement competition in this export business, our quality in technology determines whether or not we can win a deal. This is going to be the next challenge we will face,” Nakagaki told PwC. “What enabled us to win the deal was our technology development results.”
Engagements for J-Power in developing Asia won’t end with construction. The company expects to continue with skills training and technology development in the countries where it operates. This too, Nakagaki believes, is part of the attraction of its offering for Asian customers.
PwC Chairman Bob Moritz talk to Reuters' Fred Katayama about how how to improve Japan's global competitiveness.