Hitachi Chemical Company, Ltd. Business report FY2007
Business Highlights
| Financial overview | (in millions of JPY) |
| FY2007 | FY2006 | Rate
of Change(%) |
Factors | |
| Overall | ||||
| 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 | |
Factors
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
| 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- 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 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 |