Hitachi Ltd., Toshiba Corp. and Mitsubishi Heavy Industries Ltd. are considering integrating their nuclear fuel businesses, sources said Thursday. The tie-up could come in the spring.
Their nuclear businesses have been in the doldrums since the 2011 meltdowns at the Fukushima No. 1 nuclear power plant, which led to most plants being kicked into shutdown.
Integrating the fuel units would reduce costs and is seen as bolstering their respective financial standings.
The units that would be merged are Nuclear Fuel Industries Ltd., in which Toshiba holds a majority stake through U.S. subsidiary Westinghouse Electric, the Japanese unit of Global Nuclear Fuel, a joint venture of Hitachi, Toshiba and General Electric, and Mitsubishi Nuclear Fuel Co., an affiliate of Mitsubishi Heavy.
The three companies are studying a range of options, including placing the nuclear fuel business units under a new holding company, the sources said.
Toshiba and Mitsubishi Heavy separately said while various options are under consideration, no decision has been made yet.
The government introduced tougher safety standards in the wake of the Fukushima crisis, and most nuclear reactors have remained idle since then.
The only ones currently on line — after they passed the new safety checks — are the No. 1 and No. 2 reactors at Kyushu Electric Power Co.’s Sendai plant and the No. 3 reactor at the Ikata plant, which is operated by Shikoku Electric Power Co.
Still, Japan’s nuclear industry is not alone in experiencing difficulties. Nuclear plant construction has slowed globally, shrinking profits at companies like French nuclear energy giant Areva.
Although the government maintains that Japan needs nuclear power, it is likely to be forced to look at what can be done to keep the sector afloat at a time when it is burning through cash.