Japanese PM companies maintain growth despite decline in automobile production
November 18, 2015
Despite the continuing fall in automobile production in Japan which according to statistics from the Japan Automobile Manufacturers Association (JAMA) saw output of all vehicles decline by 7.5% in the first 9 months of 2015 to 6.925 million units, of which 5,830 million were passenger cars – down 7.1%, most of the major Japanese powder metallurgy (PM) producers reported steady growth in sales in the first half of the 2015/2016 financial year (April to September 2015). More than 90% of Japan’s PM production goes to the automotive sector.
Hitachi Chemicals Co Ltd
Hitachi Chemicals Co Ltd, which includes two main business segments (1) Functional Materials and (2) Advanced Components and Systems, reported group sales up by 9.3% to Yen 275.6 billion ($2.235 billion) for the half year ended September 20, 2015 with net income up by 23.6% to Yen 17.1 billion ($137.8 million). The Advanced Components & Systems division which includes structural PM parts and PM bearings as well as vehicle batteries, printed circuit boards and diagnostic instruments, reported a 21.2% increase in sales to Yen 137.3 billion ($1.113 billion). Segment profit was static at Yen 3.4 billion.
Mitsubishi Materials Corp (MMC)
Mitsubishi Materials Corp (MMC) saw consolidated net sales for the 6 month period to September 30, 2015, total Yen 709.5 billion ($5.75 billion) – down 5.5% on the corresponding period in 2014. Operating profit increased by 6.3% to Yen 36.2 billion ($293.4 million). The decline in sales was attributed to the effect of lower copper and copper alloy prices. However, net sales of the ‘Advanced Materials & Tools division’ (AM&T), which includes cemented carbide (hardmetal) tools, structural PM parts and bearings, high performance alloy products and superalloys, were reported to have increased by 14.2% year-on-year to Yen 77.7 billion ($629.8 million). Operating profits for this division rose by 8% to Yen 9 billion. This division has particularly benefited from robust sales of cemented carbide products, including the recent acquisition of a 51% shareholding in Hitachi Metals Ltd’s cemented carbide business which took effect on April 1, 2015. MMC reported that the company had established cemented carbide end mill production in North America in April this year, and that in addition to adding capacity for carbide insert production in Spain in December 2014, it is also planning to start production of carbide drills and end mills in that country from March 2016. MMC will also double end mill capacity and launch carbide drill production in Indonesia in October 2016. The company claims to have more than 10% share of the global cemented carbide market.
Sumitomo Electric Industries Ltd
Sumitomo Electric Industries Ltd (SEI) based in Itami, Osaka, Japan, reported group sales for the period April to September 2015 of Yen 1,439 billion ($11.669 billion) – an increase of 9.8% compared with the same period in the previous year. Group operating income up by 10.4% to Yen 52.890 billion ($429 million). The largest SEI division is ‘Automotive’ and this division, which specialises in wiring harnesses, reported half year sales of Yen 765.5 billion ($6.2 billion), an increase of 7.5%. 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, and PM magnets, 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 half year sales barely increase compared with same period in 2014 to Yen 157.2 billion ($1.275 billion). Hardmetals (cemented carbides) sales increased slightly to Yen 45.7 ($370.6 million ) for the 6 month period, and sales of powder metallurgy products saw no change at Yen 28.9 billion ($234.3 million). Sales at A.L.M.T. declined by nearly 10% to to Yen 22.4 billion ($181.6 million). SEI is forecasting second half sales (October 1 to March 31, 2016) of Yen 187.7 billion ($1.522 billion) for the Industrial Materials division due in the main to increased sales of unspecified ‘Other’ products in this division.
Fine Sinter Co Ltd
Fine Sinter Co Ltd, based in Kasugai, Aichi Pref., operates two business segments which include (1) powder metallurgy (PM) products based on structural PM parts and metal injection moulding; friction materials (for railway applications), and (2) hydraulic equipment such as motor pumps, solenoid valves, etc. Automotive PM products make up nearly 90% of sales; railroad applications around 4%, hydraulic equipment 7% and industrial machinery the remainder. Fine Sinter Ltd reported a 3.8% increase in half year sales for the period ending September 30, 2015 – to Yen 19.3 billion ($156.4 million), and a 185% jump in net income to Yen 1.009 billion.
The company operates six production plants in Japan, China and Indonesia and is involved in a joint venture with another Japanese PM producer – Tokyo Sintered Metals Ltd – for producing PM parts in the USA at American Fine Sinter (AFS) in Tiffin, Ohio
