Ebara Corporation

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Ebara Corporation

11-1 Haneda Asahi Cho
Ohta-ku
Tokyo, 144-8510
Japan
Telephone: ( + 81) 337436111
Fax: ( + 81) 337453356
Web site: http://www.ebara.co.jp

Public Company
Incorporated: 1912 as Inokuchi Type Machinery Office
Employees: 15,609
Sales: ¥514.95 billion ($4.35 billion) (2006)
Stock Exchanges: Tokyo
Ticker Symbol: 6361
NAIC: 333911 Pump and Pumping Equipment Manufacturing; 333412 Industrial and Commercial Fan and Blower Manufacturing; 333611 Turbine and Turbine Generator Set Unit Manufacturing

Ebara Corporation is one of the world's leading producers of pumps, compressors, fans, gas turbines, and chillers and related fluid and gas transfer systems and machinery. Ebara's Fluid Machinery & Systems division is also its largest, accounting for more than 49 percent of the group's sales of ¥515 billion ($4.4 billion) in 2006. The company also develops machinery and systems for the environmental engineering sector, including water processing and distribution and waste treatment. The Environmental Engineering division develops and manufactures waterworks and sewage systems, industrial waste treatment plants, solid waste processing facilities, gas treatment systems, and also provides waste cleanup services. This division contributes nearly 34 percent to group sales. The group's third major division is its Precision Machinery division, which adds more than 17 percent of the company's sales through its production of plating, cleaning and CMP (chemical mechanical polishing) systems, dry vacuum and turbo-molecular pumps, and other equipment for the semiconductor industry. Ebara's smallest and youngest division, New and Renewable Energy, formed in 2002, develops equipment and systems for wind, fuel cell, and photovoltaic power generation. This division also provides cooling and water supply systems for nuclear power plants. Ebara has subsidiaries in Taiwan, Korea, China, Vietnam, Indonesia, and Malaysia. The company is also present in the United States, notably through subsidiary Elliott Turbomachinery. Japan remains the company's largest market, however, accounting for nearly 85 percent of sales. North America adds just over 10 percent to group sales. Ebara is listed on the Tokyo Stock Exchange and is led by President Fumio Shimakawa.

PRE–WORLD WAR I PUMP MAKER

Ebara Corporation was founded by Issei Hatakeyama shortly before World War I. Hatakeyama, born in 1881, had been a student of Arriya Inokuchi, a professor of engineering at Tokyo Imperial University. Inokuchi had been developing a new centrifugal pump design, and agreed to allow Hatakeyama to establish a company in order to produce the device. The company, called Inokuchi Type Machinery Office, started operations in 1912, with Hatakeyama as its first general manager. The company was quickly successful, and by 1914 had opened a second manufacturing site. By 1920, the centrifugal pump design had become widely accepted. In that year, the company established a new factory in Tokyo's Ebara-gun district. The company then changed its name to Ebara Corporation.

Ebara grew strongly through the 1920s and 1930s, introducing a new product, the turbo-blower, to its pump technology. The company fought hard to overcome the dominant positions held by foreign manufacturers in the Japanese market. Ebara's break came in the early 1920s, when the company installed, at its own expense, a backup pumping system for the Tokyo aqueduct system. When the Kanto earthquake struck in 1923, Ebara's pumps went into action, and within a day, the aqueduct was functioning again. This event placed Ebara on Japan's industrial map.

By the end of the 1920s, Ebara had succeeded in becoming one of the domestic market leaders. The company also continued developing new technologies, such as a turbo reefer in 1930, and a rapid water filtration system, which enabled the company to enter the water processing market. Later during the 1930s, the company's water processing operations led it to develop operations in air conditioning and refrigeration filtration systems. The company opened a new factory in Haneda, Tokyo. By 1938 the Haneda facility had become the company's headquarters as well. When war broke out, the Japanese military government accused much of Japan's industry of having avoided developing domestic machinery technology, in favor of importing foreign technology, and passed new legislation in an effort to develop an extensive, U.S.-style industrial base. As part of that legislation, Ebara found itself compelled to launch the production of machine tools. In compliance, the company established a new factory in Kawasaki.

The Kawasaki facility proved essential to Ebara's survival following the war, after the company's main facility was largely destroyed in bombing raids. In 1945, the company transferred all of its manufacturing to the Kawasaki plant, and within a week after the Japanese surrender had revived its production of pumps. Over the next decade, Ebara rebuilt its Haneda plant, a process completed in 1955, at which time the Haneda plant took over as the company's main production facility.

Ebara expanded its production of water treatment equipment and systems when it teamed up with U.S.-based International Filter Company (Infilco) to form the joint venture Ebara-Infilco Co. That company established its own manufacturing plant in Japan to begin producing water treatment equipment for the Japanese market. Yet by then Ebara had increasingly begun to compete on the international market as well. In 1961, for example, the company became a key supplier of dredging pumps for the Suez canal. By 1964, the company had established its first foreign sales subsidiary, in Bangkok, Thailand.

ADDING INTERNATIONAL
COMPONENTS FROM 1975

Back in Japan, Ebara began construction of a new factory in Fujisawa. This facility became the first in Japan to manufacture standard pumps using a mass-production process in 1965. At the same time the Fujisawa plant took over production of the company's refrigeration equipment. By 1971, the Fujisawa site had been expanded again, to include the company's Central Research Facility. The following year, the company's collaboration with Infilco expanded with its own research unit. These research operations were merged into a single unit under subsidiary Ebara Research Co., established in 1984.

One result of the group's research effort during the 1970s was its development of a flue gas emissions processing system, in response to calls for the desulfurization of factory emissions. This remained an important market for the group into the mid-2000s, especially given the growing concerns over the rise in pollution levels owing to the rapid industrialization of China and other parts of the Far East.

COMPANY PERSPECTIVES

The basic mission of Ebara's overseas business operations in the environmental engineering business area is to assist countries around the world in creating the infrastructure necessary for realizing sustainable economic and social development. To fulfill this mission, Ebara is seeking to make available, on a global basis, the systems and technologies for the design, procurement of materials, and construction of water treatment, waste incineration, and other components of the infrastructure as well as the services needed for the operation and maintenance of these facilities.

Ebara's manufacturing network remained limited to Japan into the mid-1970s. In 1975, however, the company established a factory in Brazil, called Ebara Industrial Mecanicos A Commercio Ltd. That company launched production of turbines and compressors for the Latin American and other markets. By 1981, the company had expanded its operations further north, launching its first subsidiary in the United States, Ebara International Corporation (EIC).

EIC initially focused on the pumps market. Into the second half of the 1980s, however, Ebara launched its first effort to enter the precision machinery market, starting with the production of specialized vacuum equipment for Japan's semiconductor industry. The company quickly expanded this operation to target the U.S. semiconductor industry as well. By 1990, EIC had established a new dedicated precision machinery subsidiary in the United States, called Ebara Technologies Inc. That company was quickly expanded, through the acquisition of the cryopump division of Varian Associates in 1991. In this way, Ebara grew into one of the world's leading suppliers of vacuum pumps and related equipment for the semiconductor industry.

Ebara's work in emissions control led to the construction of a new production plant in Japan, at Sodegaura, which provided dedicated facilities for the company gas exhaust systems, and related chemicals operations. By then, too, Ebara had developed an interest in the environmental engineering sector. The company launched a dedicated Environment Business division in 1990, extending its pump and other technologies to target the wind power and solar power sectors. The division also began developing equipment for the nuclear power industry.

Ebara had also been building a manufacturing and marketing base in Europe. This effort began in 1989, when the company launched subsidiary Ebara Italia SpA. By 1991, that company had begun producing stainless steel pumps for the European market. The following year, the company expanded its European presence, entering a cooperative agreement with Switzerland's Sulzer Brothers, which operated its own pump division.

The company expanded its manufacturing base again in 1992, when it set up Ebara Qingdao Co. Ltd. That subsidiary brought the group to the Chinese mainland, becoming a primary source for the company's boiler production. Two years later, the company expanded again, merging its own operations with the longstanding Ebara-Infilco joint venture.

ENVIRONMENTAL FOCUS IN THE
NEW CENTURY

Ebara's interests in the environmental engineering sector were strengthened in 1994, when the company completed the purchase of majority control of Blue Ridge Industrial Group Inc., based in Pittsburgh and operating as a division of Westinghouse Electric Corp. Blue Ridge, renamed Ebara Solar Inc., had developed its own solar panel generation technology, initially for application by the military. Under Ebara, the company turned its operations toward the development of solar panels for the commercial market.

Into the mid-1990s, Ebara continued to develop its manufacturing network, setting up a subsidiary in Indonesia, then adding an assembly plant in the United States, in Rock Hill, South Carolina, in 1995. That plant also became Ebara's North American headquarters.

KEY DATES

1912:: Issei Hatakeyama founds Inokuchi Type Machinery Office to produce centrifugal pumps based on designs of Arriay Inokuchi.
1920:: Company opens new factory in Ebara-gun district of Tokyo and changes name to Ebara.
1938:: Company constructs Haneda factory, which becomes main factory and headquarters.
1955:: Reconstruction of Haneda factory, badly damaged during the war, is completed.
1956:: Company forms joint venture with U.S.-based Infilco.
1964:: Company establishes first foreign sales subsidiary, in Thailand.
1975:: Ebara opens first foreign production subsidiary, Ebara Industrial Mecanicos A Commercio Ltd, in Brazil.
1981:: U.S. subsidiary Ebara International Corporation (EIC) is founded.
1989:: Company establishes production subsidiary in Italy.
1990:: Company founds precision machinery subsidiary in the United States.
1992:: Company enters Chinese market, setting up Ebara Qingdao Co. Ltd.
1994:: Ebara merges operations with Ebara-Infilco joint venture.
1998:: Company acquires 50 percent of Elliott Turbomachinery in the United States.
2000:: Company acquires full control of Elliott.
2005:: Ebara establishes Ebara Boshan Pumps Co. in China.
2006:: Company establishes Ebara Machinery (China) Corporation.

Ebara restructured its operations in 1996, creating a management division and four production divisions, including Wind & Hydraulic Power, Environmental Engineering, Precision Electronics, and Information Communications. Into 2005, however, the company's rising operations in the renewable energy sector led to a new restructuring. At that time, the company was regrouped into four core divisions, Fluid Machinery & Systems, Environmental Engineering, Precision Machinery, and New and Renewable Energy. Following the restructuring, the company spun off its Japan-based environmental engineering operations into a new subsidiary, Ebara Environmental Engineering Corporation.

In the meantime, Ebara had boosted its North American presence. In 1998, the company had joined with MAN Gutehoffnungshutte AG, based in Germany, to acquire the United States' Elliott Turbomachinery. That company had been founded in 1895 as the Chicago Boiler Company, and later moved to Pennsylvania, where it expanded its operations to include a wide range of power generating equipment. In 2000, Ebara bought out MAN, taking sole control of Elliott. In 2002, that business was regrouped into a new subsidiary, Elliott Ebara Turbo Machinery Corp.

The company's restructuring, in the meantime, had stepped up development of its new and renewable energy division. In 2003, the company announced that its Chinese subsidiary would launch production of waste incinerators that could be used to generate electricity. Ebara further stepped up its manufacturing operations in China, launching a second subsidiary there in 2005, called Ebara Boshan Pumps Co., which was followed by the creation of Ebara Machinery (China) Corporation, in 2006. In another extension the company established a joint venture with Canada's Ballard Power Systems, a manufacturer of fuel cell systems. In 2005, Ebara strengthened its ties with Ballard, acquiring a 3 percent stake in the company. As it entered the second half of the decade, Ebara Corporation continued to build on nearly 90 years as a leading Japanese manufacturer.

M. L. Cohen

PRINCIPAL SUBSIDIARIES

Aqua Chemical Co., Ltd.; Aqua Engineering Co., Ltd.; Beijing Ebara Machinery Co., Ltd.; Chubu Recycle Co., Ltd.; Ebara Agency Co., Ltd.; Ebara Ballard Corporation; Ebara Benguet, Inc. (Philippines); Ebara Densan (Kunshan) Mfg. Co., Ltd. (China); Ebara Densan Ltd.; Ebara Engineering Service Co., Ltd.; Ebara Engineering Singapore Pte. Ltd.; Ebara Environmental Technologies Hokkaido Co., Ltd.; Ebara España Bombas S.A. (Spain); Ebara Fan Engineering Co., Ltd.; Ebara Hamada Blower Co., Ltd.; Ebara Industrial Cleaning Co., Ltd.; Ebara Indústrias Mecánicas e Comércio Ltda. (Brazil); Ebara International Corporation (U.S.A.); Ebara Kailay Environmental Engineering Co., Ltd. (Taiwan); EBARA KIDEN CO., LTD.; Ebara Pumps Australia Pty. Ltd.; Ebara Qingdao Co., Ltd. (China); Ebara Refrigeration Equipment & Systems Co., Ltd.; Ebara Research Co., Ltd.; Ebara Shohnan Sports Center Inc.; Ebara Technoserve Co., Ltd.; Ebara Vietnam Corporation; Ebara-Byron Jackson, Ltd.; Ebara-Elliott Service (Taiwan) Co., Ltd.; EBARA-PFLEIDERER Wind Power Co., Ltd.; ECO Power Co., Ltd.; Elliott Company (U.S.A.); Elliott Ebara Singapore Pte. Ltd.; Elliott Ebara Turbomachinery Corporation; Elliott Energy Systems, Inc. (U.S.A.); E-Square Co., Ltd.; Kawasan Industri Modern Cikande (Indonesia); Nissetsu Co., Ltd.; Qingdao Jiaonan Ebara Electric Power Co., Ltd.; Sumoto S.r.l. (Italy); Tokyo Petbottle Recycle Co., Ltd.; Wind Service Corporation; Yantai Ebara Air Conditioning Equipment Co., Ltd. (China); Yoshikura Ltd.

PRINCIPAL DIVISIONS

Fluid Machinery & Systems; Environmental Engineering; Precision Machinery; New and Renewable Energy.

PRINCIPAL COMPETITORS

Klein Schanzlin und Becker AG; FE Petro Inc.; Pumper Parts L.L.C.; FAST & Fluid Management Srl; Wright Pump Inc.; Yasnogorsk Engineering Plant Joint Stock Co.; Beach-Russ Co.; Depco Pump Company Inc.; Shanghai Dalong Machinery Works; Kataysk Pump Plant Joint Stock Co.; MAN AG.