Hitachi Chemical Co., Ltd. Business Report FY2010

Business Highlights

Financial Overview

(in millions of JPY)
  FY2010 FY2009 Rate of
Sales 497,452 455,287 9.3 -
Operating profit 43,471 38,341 13.4 -
Ordinary income  45,042 36,506 23.4 -
Current net income 18,943 23,509 - -
Functional Materials
Sales  260,574 244,285 6.7 1)
Operating profit  31,075 32,183 (3.4) -
Advanced Parts and Systems
Sales  245,908 215,070 14.3 2)
Operating profit  12,387 6,236 98.6 -


-Sales of epoxy sealant materials for semi-conductors increased year-on-year due to greater demand in China for digital household appliances and other products.
-Sales of varnish for electric insulation increased year-on-year as a result of its greater use on surface protection for LCD circuits, and as a result of greater demand for motors used on hybrid vehicles.
-Sales of carbon anode materials for use in lithium ion batteries increased year-on-year due to the increased volume sold for use on eco-cars.
-Sales of carbon products increased year-on-year in line with the recovery in demand for electric brushes for automobiles.
-Sales of ceramics significantly increased year-on-year in line with the recovery in demand for semi-conductor manufacturing equipment
-Sales of auto parts (interior and exterior decorative molding, friction materials, powder metallurgy products, etc.) increased year-on-year in line with the recovery in the auto market.
-Sales of batteries tremendously increased year-on-year as a result of greater demand for their use in eco-cars, greater sales of them for use in new cars, and more volume being sold in the aftermarket.

Business Partnership

-Hitachi Chemical and German-based SGL Group have signed a comprehensive cooperation agreement in the field of anode material solutions for automotive and industrial lithium-ion batteries. SGL Group is a leading manufacturer of carbon-based products. The cooperation is aimed at jointly establishing a network in Europe to supply anode materials. SGL will be responsible for the production of anode materials while Hitachi Chemical will provide sales and technical services to the customers through its subsidiary Hitachi Chemical Europe GmbH in Germany. (From a press release on June 30, 2010)

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)


R&D Expenditure

(in millions of JPY)
  FY2010 FY2009 FY2008
Overall 26,400 25,400 27,600
Advanced Components and Systems 18,400 - -
Functional Materials 8,000 - -

R&D Facilities

Tsukuba Research Laboratory Ibaraki Pref., Japan
Tsukuba Research Laboratory (Yamazaki) Ibaraki Pref., Japan
Tsukuba Research Laboratory (Shimodate) Ibaraki Pref., Japan
Hitachi Chemical Research Center, Inc. California, USA
Hitachi Chemical - SJTU Research & Development Center Shanghai, China

R&D Activities

 Functional Materials
-The Company continues its R&D activities, working to develop electronics materials, inorganic materials, resin materials, and circuit-board materials, which are the Company’s core products. The Company is developing carbon anode materials (for eco-cars), which boast excellent efficiency in terms of charging/discharging of lithium ion batteries and ensuring a high level of safety too. The Company worked on improving the visibility of LCDs, and is also developing transparent filled layer film  that offers excellent collision mitigation performance when used in touch-panels. R&D expenses: 18.4 billion yen.

 Advanced Parts and Systems
-The Company is continuing to develop its core products in this sector, mainly auto parts and electronics parts. The Company developed an automotive disk brake-pad that further reduces noise; and a multi-layered printed wire board for semi-conductor testers, in which the wiring capacity/layout was improved through the use of finer wires. It also developed a part for use in powder metallurgic fuel-injectors that enhance the combustion efficiency of diesel engines. R&D expenses: 800 million yen.

Technical Assistance Contracts

(As of Mar. 31, 2011)

Company Other company Contract Details Period
The Company
Japan Brake Industrial Co., Ltd.
Federal Mogul Corp. (USA) Granting the working rights to the patent for disc pads. Providing technical information on disc pads 2007.3.31-
Until the time production of vehicle models that use the subject products is stopped
The Company Brembo S.p.A. (Italy) Granting the working rights to the patent for disc brake pads.
Providing technical information on disc brake pads
(The contract is scheduled to automatically renew every five years after the initial period ends.)

Technological Licensing Agreements

(As of Mar. 31, 2011)

Group company name Other Party to the Agreement Contract details Period
The Company Hitachi, Ltd. Acquisition of patent rights and license to use technical expertise on μ-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)
  FY2010 FY2009 FY2008
Overall  30,400 21,000 36,000
Electronics Products 16,300 - -
Advanced Performance Products  14,100 - -

Investments in Japan

-The Company is adding the second line dedicated to the production of carbon anode materials for lithium ion batteries to be installed in environmentally-friendly vehicles at its Yamazaki Works manufacturing facility (Hitachinaka City, Ibaraki Prefecture). The investment in this new line is about 2 billion yen. Construction has already begun with the launch scheduled in December 2010. Hitachi Chemical built a production line for anode materials for vehicles at Yamazaki Works in November 2009. It went into full-fledged operation in April 2010. The Company also plans to inject approximately 10 billion yen in this location over the next few years to further increase its capacities. (From a press release on April 22, 2010)

Investments Outside Japan

-The Company will establish a new manufacturing company in eastern China by March 2011. The new entity will manufacture advanced performance resins and chemical materials in order to meet the increasing domestic demand. Full operation is expected to start in January 2013. The company will be capitalized at approximately 3 billion Japanese yen, which will be wholly invested by the Hitachi Chemical Group. (From a press release on October 29, 2010)

-The Company's subsidiary Hitachi Powdered Metals Co., Ltd. (HPM) will acquire the entire stake in Thai Sintered Products Co., Ltd. (TSP), HPM's joint venture in Thailand. HPM plans to acquire the remaining 51% shares in TSP on November 30, 2010 from its joint venture partner Simakulthorn Group of Thailand. TSP, a manufacturer of sintered metal parts for motorcycles and automobiles, recorded sales of 1,329 million Thai bahts in the fiscal year ended in December 2009. In September 2010, HPM established a new entity called "Hitachi Powdered Metals (Thailand) Co., Ltd. (HPMT)" in Thailand. TSP will be dissolved upon completion of the transfer of its entire operations to HPMT. (From a press release on September 14, 2010)

-Also, Hitachi Powdered Metals Co. will establish a wholly owned subsidiary to manufacture powder metallurgical products in the suburbs of Jakarta, Indonesia. The new company, which will be tentatively called PT Hitachi Powdered Metals Indonesia (MPMI), will be located in the Suryacipta Industrial Park, Kerawang, West Java. Production operations are scheduled to begin in April 2012, targeting the fast growing automobile and motorcycle market in the country. Hitachi Powdered Metals is planning to invest approximately 1.3 billion yen in the construction project, aiming to capture more than 40 percent of the market share by fiscal year 2015. MPMI will be established in November this year with a registered capital of 1.25 billion yen. The subsidiary will initially hire 100 people.(From an article in the Nikkan Jidosha Shimbun on September. 17, 2010)

Planned Capital Investments

(As of Mar. 31, 2011)

Location Equipment to be installed Estimated amount of investment (million JPY) From To
Hitachi Chemical Mexico, S.A. de C.V.

Nuevo Leon,


Equipment for manufacturing friction materials 2,000 Apr.
Hitachi Storage Battery(Thailand) Co., Ltd.



Equipment for producing batteries 1,980 Aug.
Hitachi Chemical (Malaysia) Sdn. Bhd. Penang,
Equipment for producing Epoxy Materials for Semiconductor manufacturing 1,000 July.