Mitsubishi aims to double defence revenues

Mitsubishi Heavy Industries has outlined plans to invest in new facilities to support Japan's involvement in the Global Combat Air Programme alongside the UK and Italy. (BAE Systems)

Japan's biggest defence contractor Mitsubishi Heavy Industries (MHI) has said it expects to more than double defence revenues in the next few years in line with Tokyo's plan to enhance the capability of the Japan Self-Defense Forces (JSDF).

MHI said in a defence business briefing in Tokyo on 22 November that it forecasts its annual defence sales will expand from the current level of about JPY500 billion (USD3.3 billion) to JPY1 trillion by fiscal year (FY) 2024–26 and to more than JPY1 trillion by FY 2027–29.

MHI said in briefing materials that “for many years [its] defence revenues have trended around just under JPY500 billion”. However, it added that its forecast defence revenues will “more than double due to [the] significant expansion [in the] Japan Defense Buildup Program (DBP)”.

The DBP was announced by the government in December 2022 and outlines investment in JSDF capability of about JPY43.5 trillion through FY 2027.

In terms of forecast defence profits, MHI said it is currently achieving an approximate margin of 7.7%. It added that future margins are expected to grow to 10%. It said this will be supported by new investment in expanding defence facilities for development and production.

MHI's primary defence facilities include Nagoya, which is responsible for aircraft and missile systems as well as space; Sagamihara (land systems); and Nagasaki, Kobe, Yokohama, and Tamano (all naval ship and maritime systems).