Hitachi Chemical Company, Ltd. Business report FY2006
Business Highlights
Financial
overview
Factor
(Automotive related parts)
Carbon ceramics
-In the area of carbon products, sales of automobile electric brushes increased.
-In the area of ceramic products, sales of silicon nitride ceramics for automobile water pumps increased.
Automotive parts
-Although sales of interior and exterior molded components increased because there was a growing demand for them to be equipped on new vehicles in Asia, especially in Thailand, the Company could not offset the loss it incurred as a result of the overall weakened demand by its major customers.
-Profits generated from sales of disk brake pads decreased due to the declining production volumes of its major customers.
Powder metallurgy products
-Sales increased due to the strong demand by automakers to equip metallurgy products in automobile air conditioners.
| (in millions of JPY) | FY2006 | FY2005 |
Rate of Change(%) |
Factors |
| Overall | ||||
| Sales | 628,805 | 602,703 | 4.3 | - |
| Operating profit | 55,750 | 53,833 | 3.6 | - |
| Ordinary income | 56,714 | 54,429 | 4.2 | - |
| Current net income | 32,766 | 31,593 | 3.7 | - |
| Advanced Performance Products | ||||
| Sales | 251,509 | 243,719 | 3.2 | see note below |
| Operating profit | 14,997 | 14,906 | 0.6 | |
(Automotive related parts)
Carbon ceramics
-In the area of carbon products, sales of automobile electric brushes increased.
-In the area of ceramic products, sales of silicon nitride ceramics for automobile water pumps increased.
Automotive parts
-Although sales of interior and exterior molded components increased because there was a growing demand for them to be equipped on new vehicles in Asia, especially in Thailand, the Company could not offset the loss it incurred as a result of the overall weakened demand by its major customers.
-Profits generated from sales of disk brake pads decreased due to the declining production volumes of its major customers.
Powder metallurgy products
-Sales increased due to the strong demand by automakers to equip metallurgy products in automobile air conditioners.
R&D
R&D
Expenditure
New auto parts products
- The Company developed automobile lead storage batteries which demonstrate high performance in terms quick charges, being able to instantly store the electricity generated when the vehicle decelerates.
- The Company developed power metallurgical compounds for engines and VCT sprockets. By applying high precision heat treatment to these compounds, they are able to be processed into a very thin and complicated configuration.
Technical Assistance Contracts (as of March 2007)
| (in millions of JPY) | FY2006 | FY2005 | FY2004 |
| Overall | 27,800 | 26,900 | 25,100 |
| Electronics Related Products | 15,300 | N.A. | N.A. |
| Advanced Performance Products | 11,500 | 12,000 | 11,000 |
New auto parts products
- The Company developed automobile lead storage batteries which demonstrate high performance in terms quick charges, being able to instantly store the electricity generated when the vehicle decelerates.
- The Company developed power metallurgical compounds for engines and VCT sprockets. By applying high precision heat treatment to these compounds, they are able to be processed into a very thin and complicated configuration.
Technical Assistance Contracts (as of March 2007)
| Company name | Concerned company name | Contract Details | Period |
| Hitachi
Chemical Company, Ltd. Japan Brake Industrial Co., Ltd. |
Federal Mogul Corp. (USA) | Permission of working rights to the subject patent. Provision of technical information on disc pads | 2007.3.31- Until the time production of vehicle models that use the subject products is stopped |
| Shin-Kobe Electric Machinery Co., Ltd | Exide Industries Ltd. (India) | Permission of working rights to patent. Provision of technical information on automotive lead storage batteries | 1999.4.1- 2009.3.31 |
| Permission of working rights to patent. Provision of technical information on sealed accumulators | 1995.06.22- 2010.06.21 |
Technological Licensing Agreements (As of March 2007)
| Group company name | Other Party to the Agreement | Contract details | Period |
| Shin-Kobe Electric Machinery Co., Ltd. | Panasonic Storage Battery Co., Ltd.(Japan) | Acquisition of patent rights and license to use technical expertise on lead storage batteries | July
1, 2004 to June 30, 2014 |
Investment Activities
Capital
investment
| (in millions of JPY) | FY2006 | FY2005 | FY2004 |
| Overall | 37,700 | 38,700 | 33,200 |
| Electronics Products | 16,900 | N.A. | N.A. |
| Advanced Performance Products | 19,100 | 19,100 | 16,500 |
The Company will build a new plant at the Yamazaki Works in Kamisu City, Ibaraki Prefecturewith an investment of approximately 2.5 billion yen, to further expand its optical sheet protective film business. The construction of the new plant will allow Hitachi Chemical to boost its production capacity for optical sheet protective films by approximately 40% by July 2007. (From a press release by the company on Nov. 28, 2006)