Hitachi Cable, Ltd. Business report FY2007

Business Highlights

Financial overview (in millions of JPY)
  FY2007 FY2006 Rate of
Sales 565,994 544,244 4.0 -Sales increased due to the Company's being able to sell products to customers at higher prices which reflected high price of copper, a  material used in electric wires, cables, and other copper and brass products. In addition, strong demand for optical submarine cables also contributed to the sales increase.
Operating income 23,117 22,983 0.5 -Income increased as a result of greater product volumes sold and the Company's cost reduction activities.
Ordinary income 21,639 20,449 5.8
Net income 10,708 8,662 23.6 -
Wires and cables
Sales 297,706 286,518 3.9 -
Supplicated materials
Sales 204,815 204,093 0.3 -Even though the Company recorded strong sales of brake hoses, which are its mainstay products, the volume was not enough to offset the impact of the Company's withdrawal from the automotive electric wires business by  its subsidiary, Hitachi Cable Philippines, Inc., at the end of October 2006.

Oveseas Business
-The Company announced that it will, as of June 1, 2007, establish a sales company in Seoul, Korea. The Company, which set up a liaison office in Seoul back in June 2005 to conduct market research and other activities there, has decided to convert the liaison office into its sales subsidiary in a bid to fortify its business operations in the Korean market. The new company, Hitachi Cable Korea,Ltd., is capitalized at 80 million won (approximately 10 million yen). The new company will have 3 employees with a target sales of 100 million yen in FY2007. (From a press release on May 25, 2007)

-The Company announced its plans to change the trade name of its Chinese subsidiary Shanghai Hitachi Cable Trading Co., Ltd. to Hitachi Cable (China) Trading Co., Ltd. and accelerate its effort of fortifying its sales structure in China by positioning the newly-renamed subsidiary as the core company in its Chinese operations. The Company will, through Hitachi Cable (China), invest in four of its manufacturing and sales subsidiaries based in the region and further strengthen its cooperative ties with these companies. In addition, Hitachi Cable (China) will, through Hitachi Cable Asia Ltd., provide shared services not only to the regions of North China and East China which include Beijing and Shanghai, but to Hong Kong and South China regions by gathering, coordinating and communicating information on market trends, economic conditions, and local laws/regulations. These shared services will also include strategic planning, accounting, workforce management, and human resource training. (From a press release on July 23, 2007)

-The Company announced that Hitachi Cable Asia Pacific Pte. Ltd. would set up a representative office in Hanoi, Vietnam. Hanoi office will become the group's first facility in Vietnam. The group companies in the Southeast Asia region have so far conducted independent research activities on the Vietnamese market through their respective marketing divisions. The Company has decided to open a new office in Vietnam as an arm of Hitachi Cable Asia Pacific which manages and coordinates the group's Southeast Asian operations, in a bid to efficiently grasp and adapt itself to sudden changes in the future market environment as well as to potential shifts in local procurement methods among its customers. (From a press release on Oct. 4, 2007)

<Southeast Asia>
-The Company plans to spin off the business currently undertaken by Sales & Administrative Divisions of its subsidiary Hitachi Cable Asia Pacific Pte.Ltd. into a separate company and fortify its regional governance structure in Southeast Asia. The Company will also bolster the business of Production Division of the subsidiary, which is not included in this reorganization scheme, by making it solely dedicated to manufacturing for optimized production efficiency. As of April 1, 2008, the Company will incorporate a new regional administration company Hitachi Cable Asia Pacific(HCAP) Pte.Ltd. and at the same time will change the name of Hitachi Cable Asia Pacific Pte.Ltd. to Hitachi Cable (Singapore) Pte.Ltd. The sales and administrative functions of the renamed Hitachi Cable (Singapore) Pte.Ltd will then be transferred to Hitachi Cable Asia Pacific (HCAP) Pte.Ltd., effective May 1, 2008. (From a press release on Mar. 25, 2008)

-The Company announced transfer of the automotive brake hose business of Coupled Products, LLC, an automotive hose supplier in Michigan, U.S.A., on Feb. 29, 2008 to the company. The transfer price has not been revealed. A new subsidiary in the brake hose business, Hitachi Cable Florida, Inc., has therefore been established in an aim to expand business with automakers in North America. This deal will increase its automotive brake hose sales to 18 billion yen, up 80% from FY 2006 and its global market share to 20% from 14%, positioning the company at the top by market share. Specifically, the Company acquired Florida Plant, a part of Mexico Plant, the brake hose development division and trade rights in the brake hose business from Coupled Products. (From an article in the Nikkan Jidosha Shimbun on Mar. 8, 2008)


R&D Expenditure (in millions of JPY)
  FY2007 FY2006 FY2005
Group 10,526 10,000 10,832
Wires and cables 1,628 2,016 2,887
Supplicated materials 4,535 4,238 3,722

R&D structure
-The Company conducts its R&D activities at its technical headquarters (technical center) and at the development departments in its business headquarters.

-Maintains close cooperation and collaboration with R&D centers in the Hitachi Group, of course including Hitachi itself. On occasion, it conducts joint research with R&D centers operated by its customers and the government. 

High-performance Material Division
< automotive component field>
-Research and development of automotive hoses including brake hoses and power steering hoses, electronic components, and components for information devices.

-The Company announced that it has developed a new, AlGaInP-based red LED with embedded metal reflector. Thanks to the latest chip technology which enables LEDs having embedded metal reflectors, these LEDs can produce a red light with a brightness of 65 lumen/watt, which is roughly 5 times brighter than existing LEDs of its kind. With enhanced output and brightness these LEDs have found wide-range outdoor applications in displays, lightings and other illuminating devices. This innovative LED technology will allow car designers much freedom in the application of automobile rear combination lamps. (From a press release on Dec. 17, 2007)

Investment Activities

Capital investment (in millions of JPY)
  FY2007 FY2006 FY2005
Group 27,823 21,455 19,691
Wires and cables 7,819 5,521 4,917
Supplicated materials 16,700 13,296 11,739

Wires and Cables Division

-The Company invested mainly to streamline and improve its facilities producing insulated wires and industrial cables.

-The Company announced that it has decided to invest approximately 6 billion yen to enhance machinery & equipment for the production of copper strips at its Tsuchiura Plant. Tsuchiura Plant manufactures a series of products using copper and brass. The new production facility is expected to start its operations during FY2009. The Company is aiming at boosting its monthly production capacity of copper strips from current 4,600 tons to 5,200 tons, in a bid to further strengthen its copper strip business by introducing high-tech machinery & equipment and focusing on the production of high-value-added products. (From a press release on Apr. 17, 2007)

High-performance materials Division

-The Company invested mainly to improve its facilities producing semiconductor package materials and copper and brass products.