Hitachi Chemical Company, Ltd. Business report FY2008

Business Highlights

Financial Overview (in millions of JPY)
  FY2008 FY2007 Rate of
Change(%)
Factors
Overall
Sales 488,638 626,929 (22.1) -
Operating profit 19,938 60,493 (67.0) -
Ordinary income 16,524 59,499 (72.2) -
Current net income 2,740 31,438 (91.3) -
Electronics Related Products
Sales 251,937 314,177 (19.8) 1)
Operating profit 17,212 45,670 (62.3)
Advanced Performance Products
Sales 239,264 279,894 (14.5) 2)
Operating profit 2,916 15,559 (81.3)

Factors
1)
Wiring board and materials for wiring board
-Sales of multilayer-printed wiring board (layer PWB) decreased due to a slump in the automobile and semiconductor markets.

2)
Industrial materials
-Sales of epoxy resin curing agent decreased due to lower demand for LEDs and automobiles. 

Carbon ceramics
-Sales of electric brushes decreased due to lower demand for automobiles.

Automotive parts
-Sales of automotive interior and exterior molded parts and friction materials decreased due to the global decline in automobile production.

Powder metallurgy products
-Sales of powder metallurgy products decreased due to the declined sales of automotive mechanical parts, etc.


Recent Developments outside Japan
<Mexico>
-The Company announced that it will establish a new plant in Mexico, aiming to reinforce its automotive parts business centered on brake friction materials in North and South America.

>>>See Investment for more details

R&D

R&D Expenditure (in millions of JPY)
  FY2008 FY2007 FY2006
Overall 27,600 28,200 27,800
Electronics Related Products 15,800 15,700 15,300
Advanced Performance Products 11,800 12,000 11,500


Technical Assistance Contracts (As of Mar. 2009)
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-
2010.3.31
Permission of working rights to patent. Provision of technical information on sealed accumulators 1995.06.22-
2010.06.21


Technological Licensing Agreements  (As of Mar. 2009)
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)
  FY2008 FY2007 FY2006
Overall 36,000 37,400 37,700
Electronics  Products 17,600 19,100 16,900
Advanced Performance Products 18,400 17,600 19,100


Investments in Japan
-The Company announced its plan to build a new plant at its Yamazaki Works (Katsuta), Hitachinaka City, Ibaraki Pref., Japan, to manufacture carbon anode material for lithium-ion secondary batteries. At the same time, it will raise production capacity of its Yamazaki Works (Sakuragawa), Hitachi City, Ibaraki Pref. A total of approx. 1.5 billion yen will be invested to respond to increasing household demands for its products used in cell phones and laptops and possibly to meet future automotive needs. The completion is scheduled for the autumn of 2009 and the anode material production capacity will then be increased by approx. 50%. (From an article in the Nikkan Jidosha Shimbun on Oct. 25, 2008)


Investments outside Japan
<Mexico>
-The Company announced that it will establish a new plant and start local production in Mexico, aiming to reinforce its automotive parts business centered on brake friction materials in North and South America. The new plant will start operation in June 2009 to produce disk brake pads for the time being. The Company will invest 2.5 billion yen over the next 5 years to establish a production system which will allow it to manufacture 15 million units per year in 2015. It also considers increasing production items, focusing on brake related parts such as shoe assemblies of the rear wheel dram brake. (From an article in the Nikkan Jidosha Shimbun on Oct. 15, 2008)