Hitachi to build $479M transformer insulation factory in London, Ontario

Hitachi Energy, along with the federal and Ontario governments, has announced a $479-million plan to construct a new transformer insulation factory in London, Ontario. The facility aims to address skyrocketing demand for components driven by data centres, green energy projects and industrial development.

Facility Details and Production Goals

The new plant will cover 21,000 square metres and is scheduled for completion by the end of 2028. It is expected to create 100 permanent skilled jobs. According to Hitachi, this will be the first facility in Canada to produce pressboard, a paper pulp-based material essential for keeping transformers cool. It will also be the first such facility established by Hitachi in the Americas.

Bruno Melles, chief executive of Hitachi’s transformers business unit, noted that the material is currently sourced from Europe for use in Canada. "Because in every place where there is power generation and in every place where there is a connection, there is a transformer," Melles said in an interview ahead of the announcement.

Investment Breakdown

Hitachi is shouldering the bulk of the investment. The federal and Ontario governments are collectively contributing $50 million to the project. The funding breakdown is as follows:

• $20 million through the federal strategic response fund
• $10 million from Natural Resources Canada
• Up to $20 million through the Invest Ontario Fund

Industry Minister Mélanie Joly stated in a news release that the investment supports economic growth and strengthens Canada’s economic security. Vic Fedeli, Ontario’s minister for economic development, job creation and trade, said the investment helps position the province as a central hub for advanced manufacturing.

Supply Chain and Strategic Location

The power industry has faced supply chain challenges as electricity demand increases. Melles described the current market situation: "Today we are in a situation where the industry for transformer manufacturing is going at a very high speed, but not all the industrial parts are going at the same speed."

He added that the investment is intended to ensure the market does not face shortages. "We want to be an integral part of the supply chain resilience and we are going to invest in order to ensure that the market is not going to have any shortage," Melles said.

The choice of London, Ontario, was strategic. In June, Hitachi announced the acquisition of Canduct, a manufacturer of insulation kits and components located in the same city. Melles explained that proximity to Canduct allows for a "simplification of the supply in the value chain" and a "dramatic reduction of the risks connected to logistics." He also cited access to fresh and clean water as an integral element for producing insulation material.

Why it matters

This project aligns with Canada’s broader energy goals. In May, Prime Minister Mark Carney announced a new electricity strategy aiming to double the country’s electricity grid by 2050. Carla Vicente, managing director of Hitachi Energy’s Canadian division, emphasized the urgency of the demand. "Electricity demand in Canada is growing at an unprecedented pace, something we’ve never seen before," Vicente said. The factory is intended to help meet the higher needs for transformers, which are essential for electrification efforts.

---

Sources

• bnnbloomberg.ca: Hitachi announces plans for transformer insulation factory in London
• ctvnews.ca: Hitachi announces plans for transformer insulation factory in London

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.