Japan’s annual average growth in industrial production continues to defy the country’s general economic situation and forecasters are predicting production to expand by around 2.5% overall in 2014. This increase is largely fuelled by the plummeting value of the Japanese ¥which has been depreciating sharply against the US Dollar, resulting in exports expanding at a fast pace in the first nine months of the year.
Three of Japan’s largest Powder Metallurgy companies, namely Mitsubishi Materials Corporation, Sumitomo Electric Industries Ltd and Hitachi Chemical Co Ltd, recently reported their first half year results (financial period April 1 to September 30, 2014) and all have benefited from growth in production and sales.
Mitsubishi Materials Corp.
Mitsubishi Materials Corp (MMC) reported growth of 6.8% in group sales for the first half of its current 2014/2015 financial year with consolidated sales for the period April 1 to September 30 rising to ¥751.1 billion ($6.34 billion).
Operating profit rose by 2.1% to ¥34 billion ($287 million). The Metals division (copper, gold and other metals) boosted sales to ¥410 billion, an 11.7% increase compared with the same period last year. MMC’s Advanced Materials & Tools division (AM&T), which includes cemented carbide tools, structural PM parts and bearings, saw sales decline by 6.3% to ¥68 billion ($574 million) over the six month period. However, AM&T saw an increase of 6.5% in consolidated net sales for cemented carbide products to ¥52 billion ($439 million).
The company reported that it has completed a 20% enhancement of cemented carbide production at its Tsukuba plant, and has set up new carbide sales offices in Turkey and China. The company also announced earlier this year that it has acquired a 51% shareholding in Japanese carbide producer Hitachi Tool Engineering Ltd and that the full benefit of the combined cemented carbide sales of MMC and Hitachi Tool would be seen in FY 2016 figures.
MMC has ten cemented carbide plants (three in Japan, one in China, two in Thailand, one in Indonesia, one in Spain, and two in USA), whilst Hitachi Tool has three carbide plants, two of which are in Japan and one in Thailand. The merged operation will benefit from MMC’s strong global sales network.
Sumitomo Electric Industries Ltd
Sumitomo Electric Industries Ltd (SEI), based in Itami, Japan, benefitted from the buoyant automotive market in Japan with group sales up by 7.6% to ¥1,310 billion ($11.058 billion) in the first half of FY 2014/2015. Operating profit was up by 1.1% to ¥47.0 billion ($396.7 million). The Automotive Business division which specialises in wiring harnesses, reported a 10.5% increase in sales for the first half to ¥711 billion ($6 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) and PM parts, along with W, Mo, heavy metal, thermal management materials, ceramics, diamond tools and hardmetals produced at the fully owned A.L.M.T. subsidiary. The division saw first half sales increase by 6.8% to ¥156.9 billion ($1.324 billion) with PM part sales rising by 9.2% to ¥28.4 billion ($239.7million), hardmetals (cemented carbides) increased by 1.3% to ¥43.9 billion ($370.6 million), and sales at A.L.M.T. rose by 9.7% to ¥24.8 billion ($209.3 million). Special steel wires made up the remaining sales in this division of SEI.
Hitachi Chemical Co Ltd
The third of Japan’s ‘Big Three’ involved in Powder Metallurgy production is Hitachi Chemical Co Ltd. The company reported an increase of 5% in sales to ¥255.6 billion ($2.158 billion) compared with the same period last year with operating income up by 8% to ¥15.7 billion ($132.5 million).
The ‘Advanced Components & Systems’ division, which includes friction materials and PM parts, reported an increase in sales of 5% to ¥117.2 billion ($989.5 million) for the half year to September 30. The sales increase for powdered metal parts was reported to be 6% thanks to increasing demand in Japan and overseas.