Toshiba’s new facility in Oomuta, on Japan’s southern island of Kyushu, looks like any other chemical plant – a confusing jumble of pipes and tanks – but its purpose is exceptional: to capture the carbon dioxide emitted by a coal-fired power station next door.

The plant is a pilot. There is nowhere to store the CO2, which is extracted only to be pumped straight back up the chimney.

But as a symbol of the new strategic direction at Toshiba and rivals such as Panasonic and Hitachi, the Oomuta plant is apt.

Energy technology to cut greenhouse gas emissions, not flashy consumer gadgets, is now the target.

It is a change that offers Toshiba the prospect of stable and growing profits, rather than the steady erosion of consumer electronics margins by Korean and Taiwanese competitors, or the volatility and high capital requirement of semiconductors.

Damian Thong, an analyst at Macquarie Securities in Tokyo, says: “My general view is positive. Toshiba is changing to meet market opportunities. Clearly there is global demand for accessible, secure energy, that can be generated at reasonable cost and with as little environmental impact as possible.”

The shift is taking Toshiba into everything from uranium mines in Kazakhstan to an entirely new lithium-ion battery business.

That raises the question of whether Toshiba can sustain its investment – especially if it wins the €4bn ($6bn) auction for an arm of France’s Areva that makes electricity transmission equipment – and how it can satisfy the competing demands of its semiconductor division

Toshiba is the world’s third-largest chipmaker by sales and has a leading position in so-called flash memory, which is used for data storage in mobile phones and digital cameras. Last year chips drove the company to a net loss of Y344bn ($3.8bn) , however, while consumer electronics also made a small loss after years of mediocre results.

The losses forced Toshiba to raise $5bn in new capital and bring in Norio Sasaki, who rose through the company’s nuclear division, as its new president. Mr Sasaki’s plan will see the share of Toshiba’s capital investment going into the energy business almost double over the next three years.

Toshiba’s position in green energy stems from Japan’s lack of natural resources. Japan continued to build nuclear plants even as other countries turned their backs, leaving Toshiba as one of the few companies in the world capable of building reactors now that nuclear is back in fashion. Toshiba also makes hydroelectric plants, high-efficiency coal and gas power stations, solar power modules, and efficient electric transmission equipment.

To win nuclear orders, Toshiba says it must move into upstream areas such as uranium supply and fuel processing. Yasuharu Igarashi, president of Toshiba’s power systems company, says: “We also think that rare metals from uranium mines could become a promising business.”

Even after its capital raising, however, Toshiba’s balance sheet is not strong. At the end of September it had Y1,223bn in net debt and shareholders’ equity amounted to only 13.5 per cent of total assets.

Credit ratings agency Moody’s has also said that if Toshiba wins its bid for Areva T&D, its rating could be “placed under review for possible downgrade”.

Mr Igarashi says that Toshiba’s investment plans are based on market forecasts, the company’s position versus its competitors and its internal investment return baseline. Given the range of its businesses, however, the company may either have to ration its capital or else raise more.

Macquarie’s Mr Thong says: “I believe they will have the capacity to borrow to finance the [Areva T&D] acquisition. Moreover, they have the option of using resources that might otherwise be spent on capital expenditures in the semiconductor business.”

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