Financial Overview

(in millions of JPY)

	FY2008	FY2007	Rate of Change(%)	Factors
Group
Sales	493,151	565,994	(12.9)	-Sales decreased due to a sharp decline in the price of copper, (the main material for electric wires, cables, copper and copper alloy products), reduction in demand for products primarily targeting the semiconductor and automobile markets, and price decline.
Operating income	(14,740)	23,117	-	-
Ordinary income	(19,974)	21,639	-
Net income	(53,775)	10,708	-	-
Wires and cables
Sales	253,028	297,706	(15.0)	-
Operating income	(2,058)	11,346	-	-
Supplicated materials
Sales	177,822	204,815	(13.2)	-Strongly affected by decline in demand, mainly in the North American market where, sales of automotive parts had slowed.
Operating income	(17,284)	4,158	-	-

Domestic Business
-The Company will move part of production of auto parts it is now conducting at its domestic plants to Thailand in a bid to cut costs by raising capacity utilization ratio of the Thai plant that has a high level of operating efficiency. The company is already moving ABS production from Japan to Thailand, and will begin transferring part of production of torque sensors as well. The Company will continue domestic production, but will accelerate transfer of production to overseas facilities by optimizing their operations even further. It intends to solidify its business structure by building an efficient production scheme. (From an article in the Nikkan Jidosha Shimbun on Feb. 27, 2009)


Overseas Business
<U.S.A>
-The Company is consolidating three brake hose assembly plants in North America to two, primarily due to rapidly declining demand from the Big 3. The Company has three production sites in North America; Indiana, Florida and Mexico. The plant in Indiana will cease to manufacture brake hoses, and instead, start to produce high-functional components like large capacity power harnesses for use in hybrid and electric vehicles. Timing of the integration is now being discussed with each automaker for early implementation. (From an article in the Nikkan Jidosha Shimbun on Feb. 19, 2009)

R&D Expenditure

(in millions of JPY)

	FY2008	FY2007	FY2006
Group	11,078	10,526	10,000
Wires and cables	1,500	1,628	2,016
Supplicated materials	4,292	4,535	4,238

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.


R&D Activities
<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.

Capital Investment

(in millions of JPY)

	FY2008	FY2007	FY2006
Group	30,382	27,823	21,455
Wires and cables	10,087	7,819	5,521
Supplicated materials	15,535	16,700	13,296

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

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