Hitachi Chemicals Co. continued to experience a harsh operating environment in the third quarter of its financial year from October 1 to December 31, 2011. The company reported an 8% decline in group sales for the quarter to Yen116.4 billion ($1.392 billion) and operating profit decreased by 67% to Yen3.6 billion.
Hisashi Maruyama, Chief Executive Officer at Hitachi Chemicals, stated that sales for the first nine months (from April to December) of fiscal 20011/2012 were down by 6% at Yen 356.9 billion ($4.72 billion). Sales in the ‘Advanced Components and Systems’ segment, which includes PM structural part and bearings and printed circuit boards, declined 7% year-on-year in the 9 month period to Yen 172.1 billion ($2.06 billion).
The company is forecasting full year group sales in fiscal 2011/2012 to reach Yen 470 billion ($5.62 billion). However, despite of the aftermath of the Great East Japan Earthquake in March 2011 and the subsequent cut in demand for automotive components, and the flooding in Thailand where the company has a PM plant, the Advanced Components and Systems segment is expected to show some recovery in the final quarter.
Hitachi Chemicals is forecasting full year sales of Yen 230 billion ($2.75 billion) for this segment, a decrease of 6% year-on-year. The company is also expecting operating income to be impacted by the decrease in sales volumes, a surge in material costs and the impact of the appreciating value of the Yen.
The company recently announced an increase in production capacity at its Hitachi Powdered Metals (USA) plant in Greensburg, Indiana, and has started PM part production at a new plant in India. The company already has PM operations in Japan, China, Singapore and Thailand and a new PM plant is being built in Indonesia which should be operational in 2013.
Sumitomo Electric Industries Ltd reported slightly improved 3rd quarter (October to December 2011) group sales which were up 3.6% to Yen 505 billion ($6.04 billion) thanks to a recovery in demand for products from its automotive and electronics divisions. However, total group sales for the nine months (April-December) of fiscal 2011/2012 were still down by 1.1% to Yen 1,461 billion ($17.48 billion).
Full year sales for all divisions to end of March 2012 are expected to be flat year-on-year at Yen 2,000 billion ($23.94 billion). The ‘Industrial Materials and Others’ division of the company, which includes PM parts, cemented carbides and diamond tools, and the fully owned A.L.M.T. subsidiary which produces W, Mo, heavy metal, thermal management materials, ceramics, diamond tools and carbides, showed a 2.7% improvement in the 3rd quarter to Yen 70.310 billion ($842 million) compared with the same period in 2010. Full year sales for this division to March 2012 are forecast to increase by 4.4% to Yen 290 billion ($3.47 billion).
Mr M. Matsumato, CEO of Sumitomo Electric Industries, stated that the company would be entering the final year of its five-year business plan, VISION 2012, in April. He stated that the company is facing far more difficult business conditions than could be expected when the 5-year plan was drawn up, but is nevertheless determined to achieve the goals of the plan.
Mitsubishi Materials Corp. reported the best improvement among the “Big Three” Japanese PM companies. Group sales (including subsidiaries within the Consolidated Group) totalled Yen 1,276,285 billion ($15.28 billion) for the three-quarter year period April 1 to December 31, 2011 – up 10.1% year-on-year.
The company stated that although economic conditions remained difficult due to the high value of the Yen and the impact of the earthquake, the economy has been recovering gradually following the rebuilding of supply chains.
Sales in the ‘Advanced Materials & Tools’ division, which includes PM parts, cemented carbides and diamond tools, posted a 3.8% year-on-year increase to Yen 110.8 billion ($1.33 billion) for the nine month period, but a 7.4% decline in operating profit. The cemented carbide products business showed healthy increases in sales in export markets, and an earlier recovery of cemented carbide production at the Tsukuba Plant which due to the earthquake sustained partial damage to its buildings and equipment. Carbide production was suspended at MMC Tools (Thailand) due to flooding.
Structural PM parts showed increased sales value due in the main to increased metal prices with an actual decline in demand from automobile related markets due to the earthquake.
Edited by: Paul Whittaker, Editor ipmd.net, [email protected]