A 5% stake in Qatar: entering overseas generation (2008)

Hold a little, stay involved a long time

The character of this expansion shows in how it was entered rather than in its size. The stake taken in the first overseas generation project was 5% — not the position of the party running the business. Even so, engineers were sent to the site and took part in the practical work from construction through commissioning. Keep the capital risk small and go deep for the experience: for a company sheltered under regulation stepping into a competitive market, that was a cautious and realistic design. That the stake had risen to 11% in a project sixteen years later suggests the learning matched the time spent.

It may be premature, though, to read the fact that overseas equity capacity now exceeds operable domestic nuclear capacity as a transformation of the business structure. International recurring profit is less than 5% of the consolidated total, and the bulk of earnings still comes from electricity in the four prefectures of Shikoku and from regional telecommunications. As the Ikata shutdown showed by producing three consecutive loss-making years, this company’s results remain heavily governed by equipment inside its own area. How thick the capacity to earn outside that area can be made will be measured by whether the targets set for 2030 come back as actual profit.