Hitachi announces $479M plan to build transformer insulation factory in London, Ont.

Hitachi Energy has announced a $479 million plan to construct a new transformer insulation factory in London, Ontario. This move aims to address the surge in demand for transformer components, driven by data centre expansion, green energy initiatives, and industrial growth. Bruno Melles, Hitachi's chief executive, emphasized the importance of transformers, stating, "Because in every place where there is power generation and in every place where there is a connection, there is a transformer."

The 21,000-square-meter facility will be the first of its kind in Canada, producing pressboard – a paper pulp-derived material crucial for maintaining transformer coolness. Currently, such materials are sourced from Europe. Completion of the factory is projected for the end of 2028, and it is expected to create 100 permanent skilled jobs.

Hitachi is financing the majority of the project, with the federal and Ontario governments contributing $50 million collectively – $20 million through the federal strategic response fund, $10 million from Natural Resources Canada, and up to $20 million from the Invest Ontario Fund.

Hitachi's decision to establish the factory in London was strategic, as it is in close proximity to another operational site it recently acquired, Canduct, a manufacturer of insulation kits and components. This proximity is expected to streamline the supply chain and minimize logistical risks. The factory will help alleviate supply chain challenges faced by the power industry, a sector experiencing unprecedented electricity demand growth.

Hitachi's investment aims to bolster the supply chain's resilience and ensure a steady market for transformers, crucial components in the transition to electrification.