Hitachi Chemical Company, Ltd. Business report FY2007

Business Highlights

Financial overview (in millions of JPY)
  FY2007 FY2006 Rate of
Sales 626,929 628,805 (0.3) -
Operating profit 60,493 55,750 8.5 -
Ordinary income 59,499 56,714 4.9 -
Current net income 31,438 32,766 (4.1) -
Advanced Performance Products
Sales 279,894 251,509 11.3 see note below
Operating profit 15,559 14,997 3.7

Carbon ceramics
-Sales of carbon products increased year-on-year, supported by growing demand for electric brush borders from both the automotive and wind-generated electricity industries.

Automotive parts
-Sales of automotive interior and exterior molded parts rose from what they were last year. The increase was due to strong demand in Thailand and other Asian countries. Demand from car OEMs also grew in Japan.

-Sales of friction materials also improved as a result of the Company's initiatives to expand sales to non-Japanese customers.

Powder metallurgy products
-Sales of powder metallurgy products increased from the previous year's results. The rise was attributed to strong demand for highly functional parts used in car air conditioners and other electric devices. Strong sales were also seen in the area of engine components.

Reorganizing production structure

-The Company has decided to transfer its manufacturing operations of automotive disc brake pads ("DP"), which are currently produced at Yamazaki Works, to Namie Japan Brake Co., Ltd. ("Namie JB") for manufacturing realignment and integration. Namie JB is affiliated with Japan Brake Industrial Co., Ltd. ("JB"), a subsidiary of the Company, serving as a manufacturing arm of JB. The production facilities & operations at Yamazaki Work will be transferred gradually, starting from February 2008. Following the transition, which is expected to be completed by March 2009, the domestic production capability of DP among Hitachi Cable's group companies is centralized at Namie JB. With the planned transfer and integration of DP manufacturing facilities & operations in Japan, the company intends to further strengthen its DP business operations, streamline its production process with an improved production technology as a group. (From a press release on Oct. 23, 2007)


R&D Expenditure (in millions of JPY)
  FY2007 FY2006 FY2005
Overall 28,200 27,800 26,900
Electronics Related Products 15,700 15,300 -
Advanced Performance Products 12,000 11,500 12,000

Technical Assistance Contracts (As of March 2008)
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-
Permission of working rights to patent. Provision of technical information on sealed accumulators 1995.06.22-

Technological Licensing Agreements  (As of March 2008)
Group company name Other Party to the Agreement Contract details Period
Hitachi Chemical Co., Ltd. Hitachi, Ltd Acquisition of patent rights and license to use technical expertise on ホシ-Chip tags.  Apr. 20, 2007 to
Apr. 19 2019
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)
  FY2007 FY2006 FY2005
Overall 37,400 37,700 38,700
Electronics  Products 19,100 16,900 -
Advanced Performance Products 17,600 19,100 19,100