Furukawa Electric Co., Ltd. Business Report FY ended Mar. 2013

Business Highlights

Financial Overview - The Furukawa Electric Co., Ltd.

(in millions of JPY)
  FY ended Mar. 31, 2013 FY ended Mar. 31, 2012 Rate of Change (%) Factors
Sales 924,717 918,808 0.6 1)
Operating income 17,763 15,947 11.4 2)
Ordinary income 17,612 12,872 36.8 -
Current net income 3,576 (11,123) - -
Electronics and Automotive Systems
Sales 236,758 204,461 15.8 3)
Operating income 9,308 5,106 82.3 4)

1) Overall: Sales
-Sales at some sectors of the metals and light metals businesses were sluggish due to a fall in product demand. Nevertheless, sales of automotive components such as wire-harnesses were strong.

2) Overall: Operating income
-In addition to strong sales of automotive parts, lower depreciation expenses also contributed to increasing operating income.

3) Electronics and Automotive Systems: Sales
-Since sales of automotive parts such as wire-harnesses were strong, and there was growing demand for coiled wire for high-efficiency hybrid motors, sales in the Electronics and Automotive Systems sector were higher year-on-year.

4) Electronics and Automotive Systems: Operating income
-Operating income increased due to strong sales of automotive parts such as wire-harnesses, although sales in the electronics sector fell because of lower product selling prices and decreased sales volumes.


-Furukawa-Sky Aluminum Corporation and Sumitomo Light Metal Industries, Ltd. have reached a basic agreement to merge on October 1, 2013. The integration between Japan's top two companies in the aluminum rolling business will allow them to produce approximately 1.2 million tons of aluminum sheets a year and move up to the third spot in the global market. By taking advantage of economies of scale and establishing a stronger global supply network, the new company will aspire to become one of the leaders in the international arena, where Korean and Chinese manufacturers are gaining significant power. In addition to strengthening their worldwide supply structure, the two companies are also intending to enhance their domestic operations by realigning the product items made at each of their facilities. After the two companies merge, they will adopt a single, new company name, which is UACJ Corporation. In an effort to achieve synergies as early as possible, the new entity will adopt a Co-CEO structure with two CEOs, one each from former Furukawa-Sky and Sumitomo Light Metal for a certain period of time. The number of directors and auditors from the both parties will be equal as well, reflecting their strategy to merge on an equal footing.


-The Company announced that its Imaichi Plant and Higashi Plant of the Copper Foil Division, Metals Company (both based in Nikko, Tochigi Prefecture, Japan) obtained ISO/TS 16949:2009 certification, an international quality management standard for the automotive industry, on November 2, 2012. They are the first electrodeposited copper foil factories in Japan to be awarded this certification. The Company's electrodeposited copper foils for batteries are utilized as negative electrode power collectors for lithium-ion batteries, which are installed on electric vehicles (EVs) and hybrid vehicles (HEVs). The Company currently has the world's largest market share of electrodeposited copper foils for vehicle batteries. (From an article in the Nikkan Jidosha Shimbun on Dec. 1, 2012)   

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


R&D Expenditure - The Furukawa Electric Co., Ltd.

(in millions of JPY)
  FY ended Mar. 31, 2013 FY ended Mar. 31, 2012 FY ended Mar. 31, 2011
Overall 20,210 18,949 18,296
-Electronics and Automotive Systems 4,549 4,306 3,807

R&D Facilities

Facility Location
R&D Center for Automotive Systems & Devices Kanagawa Pref.,
Yokohama R&D Laboratories Kanagawa Pref.,
Metal Research Center Tochigi Pref.,
FETI (Furukawa Electric Institute of Technology Ltd.) Hungary

R&D Activities

Electronics and Automotive Systems
-The Company, along with conducting activities to increase sales and win new orders for wire-harnesses using aluminum wires, is developing related technology also.
-The Company began producing automotive battery sensors for delivery to OEMs in 2012. Controlling battery-power will increase the efficiency of energy-use by vehicles.
-The Company is continuing its activities to develop radar using 24GHz bandwidth. It is also in talks with systems manufacturers and car-body manufacturers about technology that is expected to create useful, vehicle-exterior-monitoring sensors that improve vehicle safety functions.
-The Company developed and is now producing and selling coils that enable hybrid-vehicle motors to be made more compact but which can produce an exceptional level of power that until now wasn't possible.
-The Company is continuing to conduct R&D activities on transistors and diodes, researching gallium nitride at the Advanced Power Device Research Association that it jointly established with Fuji Electric.
-The Company has been consigned by NEDO (New Energy and Industrial Technology Development Organization) to conduct R&D activities on new, light-weight conductors, to made carbon bundles into single units.

Light Metals
-In working on lithium-ion batteries, the Company developed, and now is manufacturing, aluminum sheets for square external cladding and aluminum foil for laminated external cladding, both having positive-electrode-collecting bodies and batteries, delivering them to customers both in and outside Japan. Also, it is developing rolled copper foil that is used in electrical current collectors for negative electrodes.
-The Company developed a new type of air-cooled cooler (VL fin) for next-generation vehicles such as electric vehicles, which significantly improves cooling performance compared to that of conventional coolers. It still is working to develop a cooler that achieves even better performance. In addition, the Company is working to develop automotive parts made out of aluminum, for which their content ratio on next-generation vehicles is expected to grow.
-The Company is developing materials that are even thinner and that offer more features than conventional materials; for automotive heat-exchangers.

Product Development

Battery condition sensor for automotive lead batteries >>>Image
-The Company announced joint development with Furukawa Automotive Systems Inc. of the world's first battery condition sensor for automotive lead batteries, which is capable of monitoring conditions of lead batteries during engine shutdown or those of EVs and HVs without starter motors. Mass production of the sensor has already begun. In order to measure the state of charge, discharge and deterioration, measurement of internal resistance is necessary, which is generally calculated by resistance level to electric current or voltage during starter motor initiation. The new battery condition sensor incorporates pulse discharge circuit and measures the internal resistance by the response level to pulsed current/voltage discharged from the sensor on a controlled timing. Furukawa Electric will promote this new battery sensor for power generation control to improve fuel efficiency and reduce CO2 emission as well as for cars with start/stop system. It aims to obtain more than 10% share in 2015 in the battery condition sensor market worldwide. (From an article in the Nikkan Jidosha Shimbun on Jun. 25, 2012)

High breakdown voltage flat winding wire
-The Company announced joint development of the high breakdown voltage flat winding wire with Furukawa Magnet Wire Co., Ltd. The new wire is applicable to EV/HV drive motors, which require higher voltage resistance, and has been selected for the Toyota "AQUA" HV. Based on the high heat-resistant enamel wire coated by extruded resin, this high voltage-resistant flat wire has achieved a highly flexible insulated layer. As this does not require the interphase insulating paper, it has reduced the production processes and will contribute to downsizing devices. As the flat shape has raised the lamination factor, the new wire is lighter and highly efficient. The heat-resistant enamel layer has improved heat resistance and reliability of the new wire. (From an article in the Nikkan Jidosha Shimbun on Jun. 22, 2012)     

Fluorocarbon resin-covered aluminum wire
-Furukawa Electric's group company Kyowa Electric Wire Co., Ltd. has developed KANZACC–ALC-T-ETFE and KANZACC–ALC-T-FEP fluorocarbon resin-covered aluminum wire. Kyowa Electric Wire's new aluminum wire is lightweight and highly reliable, using tin-coated aluminum as the conductor and fluorocarbon resins such as FEP and ETFE as insulators. The aluminum conductor can easily be soldered and the fluorocarbon resin insulator has outstanding electrical properties and resistance to heat and chemicals, making the wire capable of handling tough environments. The company's series of fluorocarbon resin-covered aluminum wire, with the addition of an aluminum conductor to its lineup of copper, copper alloy, steel and stainless steel, now meets a broader range of needs. Taking advantage of its ability to run the entire production process from metal coating of conductors to coating fluorocarbon resin, Kyowa Electric Wire will begin sales of fluorocarbon resin-covered aluminum wire in May 2012, aiming at 200 million yen in sales for fiscal 2013. (From a press release on May 31, 2012)

Investment Activities

Capital Expenditure - The Furukawa Electric Co., Ltd.

(in millions of JPY)
  FY ended Mar. 31, 2013 FY ended Mar. 31, 2012 FY ended Mar. 31, 2011
Overall 47,772 33,582 27,947

Electronics and Automotive Systems
-The Company invested in facilities and equipment to increase production of automotive electrical parts and launch commercial production of new-types of automotive batteries.

-The Company invested mainly in facilities and equipment to increase the production volume of copper foil/sheets used in the automotive, IT, and electronics markets; and to maintain and upgrade facilities and equipment used to produce copper and copper-alloy strips.

Light metals
-The Company invested in facilities and equipment to construct a plant building in Thailand, which will produce rolled aluminum sheets; and a heating furnace for hot rolled slabs at its Fukui Plant.

Planned Capital Investment

-The Company plans to spend 40,000 million yen on capital investments during the fiscal year that ends March 2014. Specifically, the Company will invest 12,400 million yen to increase and rationalize production facilities making automotive electric/electronic parts for the Automotive and Electronics Business, and to start mass-production or increase production volume in the Functional Electronic Parts Business.