Japanese PM companies benefit from global and domestic growth
May 14, 2014
The three leading Japanese Powder Metallurgy (PM) companies all reported increased sales for the full financial year (April 1 2013 – March 31, 2014) on the back of a depreciating Yen, improvements in the global economy and increased domestic demand ahead of a rise in purchase tax (VAT).
Hitachi Chemical Co Ltd
Hitachi Chemical Group reported an increase of 6.3% in sales to Yen 493,766 m ($4.835 billion) in its ‘Functional Materials’ and ‘Advanced Components & Systems’ divisions for the full year, and a 17.9% increase in consolidated operating profit to Yen 27,725 m ($271.4 million).
The positive result was attributed to the strengthening of overseas production in areas such as plastic moulded products, friction materials and powder metal parts for automobiles. Also contributing to improved performance of the group was the reorganisation of the group business operations including the transfer of Shin-Kobe Electric Machinery Co ltd to Hitachi Chemical completed on April 1, 2013, and absorption of Hitachi Powdered Metals Co Ltd in Hitachi Chemical (from April 1, 2014) with the primary aim of ‘improving management resource efficiency in the automotive parts business’.
The ‘Advanced Components & Systems’ division, which includes friction materials and PM parts, reported an increase in sales of 6.3% to Yen 234,711 m ($2.298 billion) for the year. The sales increase was due to increasing demand in Japan and North America. The Hitachi Group aims to achieve net sales of Yen 525,000m (5.140 billion) in its next financial year ending March 2015 – an increase of around 6%.
Sumitomo Electric Industries Ltd
Sumitomo Electric Industries Ltd. (SEI), based in Itami, Japan, continued the high growth rates shown in the first nine months of its 2013/2014 financial year with full year group sales up by 18.9% to Yen 2,569, 779 m ($25.161 billion), and a 56.3% increase in operating profit to Yen 120,058m ($1.756 billion).
SEI’s ‘Industrial Materials & Others’ division is the third largest after the ‘Automotive’ and ‘Environment and Energy’ divisions, and includes the production of cemented carbides (hardmetals), PM parts, plus W, Mo, heavy metal, thermal management materials, ceramics, diamond tools and hardmetals produced at the fully owned A.L.M.T. subsidiary.
The ‘Industrial Materials & Others’ division saw sales increase by 11.2% in the full fiscal year to Yen 303,299 billion ($2.970 billion) with PM part sales rising by 20.6% to Yen 50.3 billion ($492.5 million), hardmetals by 16.9% to Yen 82.9 billion ($811.8 million), and sales at A.L.M.T. rising by 5.6% to Yen 40.8 billion ($399.5 million). Special steel wires made up the remaining sales of Yen 71.5 billion ($700.2 million) in this division of SEI.
SEI is forecasting a 9% increase in sales for the coming financial year for ‘Industrial Materials & Others’ to Yen 330.0 billion ($3.300 billion) and a 5% increase for all divisions.
Mitsubishi Materials Corp.
Mitsubishi Materials Corp (MMC) reported growth of 9.9% for the full year ending March 31, 2014 with consolidated sales rising to Yen 1,414,796 billion ($13.893 billion). Operating profit rose by 26.3% to Yen 66,281 bilion ($651 million).
The highest achieving divisions in the MMC group were cement (18.4%) and copper (11.8%). MMC’s Advanced Materials & Tools division, which includes cemented carbide tools, structural PM parts and bearings, saw sales rise by 6.8% over the whole year to Yen 133,6 billion ($1.312 billion). Operating profit for the division rose by 30.7% to Yen 140 million ($137 million).
Mitsubishi Materials announced earlier this year that it has sold 51% of its MMC Superalloy operation in Okegawa to Hitachi Metals, and that the plant will in future be jointly managed by the two companies. The superalloys produced by MMC are used in aero engines, industrial gas turbines, and automobiles. The company stated that the joint venture with Hitachi Metals would allow the Advanced Materials & Tools Division to focus more on global growth markets such as the automotive sector which is an important user of structural PM parts and carbide tools.
