Furukawa Electric Co., Ltd. Business Report FY ended Mar. 2018
Financial Overview
(unit: million yen)
| FY ended Mar. 31, 2018 | FY ended Mar. 31, 2017 | Rate of Change (%) |
Factors | |
| Overall | ||||
| Sales | 967,333 | 843,344 | 14.7 | -In the automotive products & battery business, sales of wire harnesses for new models were brisk. |
| Operating income | 44,804 | 38,623 | 16.0 | |
| Ordinary income | 46,908 | 36,024 | 30.2 | - |
| Current net income | 28,547 | 17,570 | 62.5 | - |
Furukawa G Plan 2020 mid-term management plan (established in 2016)
-The Company continues strengthening of the automotive business as a priority area. Specifically, the Company intends to meet the needs for lighter products, which are increasing with the advancement of vehicle electrification and autonomous driving, using its aluminum wire harnesses and aluminum corrosion-proof terminals. Also, the Company is accelerating the development of peripherals monitoring radar.
-In FY 2020, the Company aims to achieve consolidated operating income of JPY 55 billion or higher, net income attributable to the owners of the parent of JPY 30 billion or more, and ROE of 10% or higher.
Contract
Automotive Monitoring Radar
-Furukawa Automotive Systems Inc. (Furukawa Automotive Systems), a subsidiary of Furukawa Electric Co., Ltd., announced that it has started mass production of automotive monitoring radars for Mazda Motor Corporation's (Mazda) new CX-5, which was released in Japan in February. Mazda uses the monitoring radars for advanced driver assistance systems (ADASs) like automatic braking. Furukawa Automotive Systems said their radars were highly rated by Mazda for their top-level detection performance realized through a pulse system, and stable quality. The company has started supply of "24 GHz (ISM band) rear monitoring radars" for Mazda's ADASs. Furukawa Automotive Systems' radars are the first Japan-made radars that are used in Japanese automakers' mass-market models, most of which use Europe-made radars. (From an article in the Nikkan Jidosha Shimbun on February 8, 2017)
Recent Development in Japan
-Furukawa Automotive Systems Inc., a subsidiary of Furukawa Electric Co., Ltd., announced that it will expand the lineup of its alpha series terminals for automotive aluminum wire harnesses. The weight of the harnesses has been reduced about 30% without a significant cost increase. The company expects that the harnesses will meet the needs of automakers aiming to improve fuel efficiency. For this series, Furukawa Automotive Systems utilized methods including its proprietary laser processing technology to prevent corrosion that occurs in dissimilar metal welding of aluminum electric wires and copper terminals, while reducing the cost and the size. Alpha series terminals are already in use in the new Toyota Lexus models. By expanding the lineup, the company intends to stimulate potential demand. (From an article in the Nikkan Jidosha Shimbun on June 1, 2017)
Recent Development outside Japan
-Furukawa Electric Co., Ltd. announced that Essex Furukawa Magnet Wire Europe GmbH, a joint venture plant for production of high voltage winding wires with U.S.-based Essex Magnet Wire, has held an opening ceremony in Germany. The high voltage winding wire is an enameled rectangular wire over-coated with extruded resin and contributes to an improvement in the performance of electric vehicles. (From an article in the Nikkan Jidosha Shimbun on December 20, 2017)
R&D Expenditure
(in million JPY)
| FY ended Mar. 31, 2018 | FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | |
| Overall | 19,533 | 17,454 | 16,845 |
| -Electrical/Electronics | 4,995 | 4,711 | 4,263 |
R&D Activities
-In the automotive products and battery business, the Company mainly develops the following:
- Automotive wire harnesses using aluminum wire
- High-performance battery status detection sensors and electric power management system products
- High-performance in-vehicle monitoring radar
- High-performance coils for compact and high output motors for HVs and EVs
- Practical application of carbon nanotube (CNT) wires
Obtained the highest level JIS certification for oxygen-free copper (first in Japan)
-Furukawa Electric Co., Ltd. (Furukawa Electric) announced that it has obtained the highest level Japanese Industrial Standards (JIS) certification for oxygen-free copper for the first time in Japan. The company's oxygen-free copper was highly rated as pure copper for its high electric and heat conductivity. Furukawa Electric will develop new applications for it as a material that will contribute to enhancing the performance of automotive power devices. The oxygen-free copper has been used in applications like shielding for submarine optical cables. The company expects to develop new applications like motor peripheral parts for electric and hybrid vehicles by taking advantage of its physical properties. (From an article in the Nikkan Jidosha Shimbun on April 18, 2017)
Heat-resistant low insertion force plating
-Furukawa Electric Co., Ltd. announced that it has developed heat-resistant low insertion force Cu-Sn plating for automotive terminals. The plating offers both heat resistance and low insertion force properties by forming an intermetallic compound layer of copper and tin on the surface. The company plans to begin shipping samples to parts manufacturers this spring. The plating is suitable for terminals found in automobile wire harnesses. (From an article in the Nikkan Jidosha Shimbun on March 27, 2017)
Small motor utilizing CNT wire
-Furukawa Electric Co., Ltd. has developed a small motor that utilizes its carbon nanotube (CNT) wire. The company has successfully prototyped the motor with a CNT-made coil. The coil used in the motor is Furukawa Electric's first coil made from CNT wire. This technology will contribute to enhancing the performance of and reducing the weight of motors for electric vehicles and hybrid vehicles. The company aims to put the technology to practical use by 2030. (From an article in the Nikkan Jidosha Shimbun on March 22, 2017)
R&D Facilities
| Facility | R&D field | Location |
| Automotive/Electronics R&D center | Automotive technology | Main center: Hirastsuka City, Kanagawa Pref., Japan; (satellite locations: Nikko City, Tochigi Pref. Japan and Inukami-gun, Shiga Pref., Japan) |
| Core Technology Integration R&D center | Core technology | Main center: Yokohama City, Kanagawa Pref., Japan; (satellite locations: Ichihara City, Chiba Pref., Japan; Nikko City, Tochigi Pref., Japan; Hiratsuka City, Kanagawa Pref., Japan) |
| High-tech R&D Center | New materials and technologies | Main center: Yokohama City, Kanagawa Pref., Japan; (Satellite locations: Nikko City, Tochigi Pref., Japan; Hiratsuka City, Kanagawa Pref., Japan) |
| Information communications/energy R&D Center | Infrastructure technology | Main center: Ichihara City, Chiba Pref., Japan; (Satellite locations: Hiratsuka City, Kanagawa Pref., Japan |
| Furukawa Electric Institute of Technology Ltd. (FETI) | Analysis | Hungary |
| OFS R&D Center | Optical fiber | U.S. |
| SuperPower Inc. | Superconductivity | U.S. |
Capital Expenditure
(in million JPY)
| FY ended Mar. 31, 2018 | FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | |
| Overall | 38,543 | 31,584 | 25,687 |
| -Electrical/Electronics | 12,070 | 11,609 | - |
Planned Capital Investment
-Planned capital investment in the FY ended in March 2018 were JPY 54,000 million, with JPY 15,800 million for electric and electronics business, mainly for expanding production capacity.
-The Company's subsidiary Furukawa Automotive Systems will increase its production capacity of wire harnesses in the Philippines as the Company received new orders for global vehicle models mainly in the North American market. Approximately JPY 10 billion will be invested to double the building area of the plant. Wire harnesses for the North American market were supplied by the Company's Mexican plant. Currently wire harnesses are shipped from Asia as well, including the Philippines and Vietnam, where the Company established a production system capable of satisfying the cost and quality requirements.