Group items tagged

As part of ongoing restructuring efforts, Japanese wire and cable maker Hitachi Cables, which focuses on the areas of electricity and information transmission, announced on 13th November that it will merge with sister company Hitachi Metals. Hitachi Metals manufactures functional materials in the automobiles, electronics and industrial infrastructure sectors according to a joint statement. The merged company will concentrate on "producing synergies" and expanding overseas sales, concentrating on "industrial and information infrastructure and automobile and electronics-related industries". The Hitachi Group as a whole has a target of generating 50% of sales outside of Japan, a figure which Hitachi Cables has yet to reach.

Hitachi Cable said that it plans to cut rolled copper output by 7% in FY2009 compared to FY2008. As a result, the company will now produce 5,760 tonnes of rolled copper output per month. Hitachi Cable intends to expand the sales of growing items, such as copper tube for heat pump hot water supply systems and rolled copper foil for lithium ion batteries. In copper strip, the company experienced very low demand in February but anticipates that it will improve in FY2009.

Hitachi Cable Ltd. is expected to suffer pretax losses of Y23 billion for FY2008. The company maintains copper stocks used in cable and other semis production and due to plunging copper prices, it incurred valuation losses of around Y10 billion. In the year to 31st March, it is anticipated that sales have plummeted by 15% y-o-y to Y480 billion. One of the factors has been the slowdown in LCD tape offtake. For FY2009, Hitachi intends to make a pretax profit of around Y500 million. To achieve this, the company will consider measures such as production base consolidations. Sales in FY2009 are expected to fall by 25% y-o-y to Y360 billion.

On October 29th, Japan's Hitachi Cable Ltd announced plans to form a deeper business alliance with Chinese partner Zhongtian Technology Group Co (ZTT). The alliance will see the two companies, which have been joint venture partners since 2000, concentrate on possible tie-ups in the wire and cable sector within China. The announcement forms part of Hitachi Cable's medium term strategy to concentrate on the social infrastructure sector. According to CRU estimates, Hitachi Cable Ltd is the world's 8th largest wire and cable producer. Hitachi Cable projects total sales of USD 5.27bn in 2012/13.

Japan's largest company of building wires and cables, Sumiden Hitachi Cable, which is jointly controlled by Hitachi Cable, Sumitomo Electric Industries and Tatsuta Electric Wire & Cable, says it plans for its sales volume in copper to increase slightly year-on-year for first half of fiscal 2012 beginning in April. The firm forecasts that domestic demand for its three major items, the largest being low voltage XLPE cable, would remain steady y-o-y at around a monthly average volume of 14,500t of copper Sumiden Hitachi Cable estimated that Japanese demand for its three major products increased by 6%y-o-y in H2 2011 to average 15,800t in copper per month. Building wire and cable shipments remained steady for large building projects situated mainly in Tokyo while shipments increased by 20% y-o-y in the Tohoku area as a result of the restorations being undertaken following the earthquake last year. The shipment levels were also boosted by active public facilities construction towards the end of the Japanese major fiscal year in March. Forecasts suggest that in H1 F2012, total demand and shipments would level off as construction projects and restorations following the earthquake would begin to tail off.

It was reported that Sumiden Hitachi Cable, which is Japan's largest joint sales company of building wire controlled by Hitachi Cable, Sumitomo Electric Industries and Tatsuta Electric Wire & Cable, estimates that its sales volume in the second half of the fiscal year ending March 2011 will be flat from the same period a year ago. The company anticipates that total domestic demand for the three leading building wire products, including LV XLPE cable, will average 13,700t copper conductor per month in H2 FY2010, down by 1.8% from the same period of FY2009. It was commented that the market for building wire seems to have reached the bottom, however recovery is weak.

It was announced that Hitachi Cable decided to use its plant in China to manufacture heat-resistant and train cables. The decision aims to enable the company to serve Chinese clients faster and also be more cost-competitive. The manufacturing base is located in Suzhou, Jiangsu province, and is operated by Suzhou Hitachi Cable Precision Co. Currently, the plant makes wire and cable for electronic devices but the company has decided to invest 1.0B yen to extend the product portfolio to the segments stated above. Installation of new equipment will begin in February and it is expected that it will become operational within the current year.

Sumiden Hitachi Cable said it forecasts Japanese electric cable makers' shipments of VVF (vinyl insulated vinyl sheathed flat-type) cable will total an average of 4,500-4,700 tonnes per month in copper weight in fiscal 2012 ending in March 2013. This would be an increase of around10%. However, if the reconstruction works in disaster areas affected by the Japanese earthquake were delayed, the monthly shipment forecasts could show a slight fall. Sumiden Hitachi Cable is the largest sales company of building cables and wires in Japan and is jointly controlled by Hitachi Cable, Sumitomo Electric Industries and Tatsuta Electric Wire & Cable. Sumiden Hitachi Cable is the third largest supplier of VVF cable in Japan.

Because of slowing housing construction and the consequent decline in demand for gas appliances and water taps, the demand for brass bars in Japan is falling. Demand is also being affected by the decrease in car industry activity. As a result, brass bar makers in Eastern Japan are planning to reduce production output for the fourth quarter by 20-25% on a year-to-year basis. August production in Japan was ''as low as 16,362 tonnes'', according to the Japan Copper & Brass Association. Monthly order receipt volume for the last three months of 2008 is expected to average just 15,000 tonnes.

Kitz Metal Works, a brass bar maker and subsidiary of the Kitz group, announced plans to add a continuous casting line at its Chino plant in Japan. The US$2.6M development will add a further 18,000t-19,200t to the company's annual billet production capacity. Construction work is set to begin this month and the plant is expected to be commissioned by the end of the year. The company expects that the lower production cost of the new casting line will allow for the investment cost to be recovered within five years.

Hitachi Cable Ltd. announced that it will cease production at its Tsuchiura plant by March 2012, effectively ending its domestic copper tube business. The facility produces copper tubes for air conditioners and in FY2010 it contributed to a sales volume of 20,000t; a sales value of ¥17.76B or 4.2% of the company's total revenue. The withdrawal from the business is attributed to difficulty maintaining profitability after air conditioning manufacturers shifted operations to foreign markets. Hitachi will keep a 50-50 JV with Furukawa Electric in Shanghai and its 36% share of a Thailand based copper tube manufacturer.

Hitachi Cable announced its plans to install manufacturing equipment for industrial wire and begin production of rolling stock wire and heat-resistant wire at its Chinese subsidiary Hitachi Cable (Suzhou) Co. The company will construct a new building at the existing facility, occupying 11,000 square metres. It is expected that investment will amount to 1 billion yen, achieving a target of 2.5 billion yen of net sales of industrial wire in FY2015, three years after the facility commences operations.

For the year ending March 31 2011, Hitachi Cable Ltd announced group revenue was Y419.3 billion up year-on-year from Y372.5 billion in 2010. Operating profit was Y788.0 million, compared to a loss of Y6.4 billion in 2010. The company said it had a pre tax profit loss of Y1.8 billion for the year, an improvement from 2010 when there was a pre tax profit loss of Y4.9 billion. In 2010 the company posted a net profit loss of Y9.1 billion; in 2011 there was a net profit loss of almost Y13 billion.

Hitachi Cable Ltd., has set out its new medium-term management plan known as the Renewed Plan "BRIDGE" with additional management measures. The company said under the new plan, key measures for business structure reforms included; the consolidation of its domestic sales companies, regional offices and branch offices, with the consolidated company taking operational control of all its existing manufacturing companies; the withdrawal from the optical submarines cable business, restructuring of its telecommunications cable business, review of packaging materials operations and a review of its copper tubes business; consolidations and eliminations of group companies in southeast Asia and consolidation of group companies in Europe and North America by country. This is in addition to a reduction in staff at domestic companies which is expected to involve some 1200 staff. The company will also implement measures to reduce fixed expenses. This includes a review of the company's pension system, an operational review of employee facilities including company dormitories, company housing, etc., and the sale of some of these facilities. The Hitachi Group aims to boost sales in priority target areas as a percentage of net sales from 55% in fiscal 2011 to 65% in fiscal 2016.

Hitachi Cable, Ltd. announced that its consolidated subsidiary Hitachi Cable Europe Ltd. has established a new automotive components manufacturing facility in the Czech Republic, producing wires, cables, and copper products. Commercial production will begin in February 2013. The company said this was due to the potential for new products and the need to increase the company's operations to support expanding markets along with the ability to compete effectively.

According to data from the Japanese Wire and Cable Makers' Association, shipments from Japanese wire and cable producers declined 0.8% y-o-y in October, taking total shipments to 60,000t. Japanese wire and cable manufacturers have been seeking to boost sales overseas and outside of traditional telecoms and power sectors. Last week, Furukawa Electric announced plans to invest in infrastructure to generate more sales in the auto industry, while Hitachi Cable announced a tie-up with sister company Hitachi Metals and a greater focus on export markets in a bid to restructure and boost sales.

Five of the major Japanese electric wire makers, (Furukawa Electric, Hitachi Cable, Fujikura, SWCC Showa Holdings, Mitsubishi Cable Industries Ltd.) have all posted consolidated recurring losses in their business results for FY2008 ended March 2009. All except Sumitomo Electric Industries, which reported lower sales, posted losses due to the dramatic fall in copper price during H2 2008 as well as the downturn in the automotive industry. Their copper inventory valuation losses have reduced their profits significantly. Sluggish demand is reported across a range of automobile related products including copper strip for connectors, winding wire and wiring harness.

Imports of copper tube to Japan fell by 36% m-o-m in September to reach 1,271t according to Japan's Ministry of Finance. September's import total was up by 44% y-o-y but still represents the lowest level seen since February 2011. The situation is attributed to recent copper tube supply being very tight due to record air conditioner sales between February 2010 and September 2011 that peaked in August 2011. Since then, there has been a significant easing in copper tube availability as air conditioner manufacturers have opted to drawdown stocks, effectively reducing tube demand. The market is expected to tighten again in 2012 if Hitachi Cable executes its plans to exit from domestic copper tube production.

Effective as of October, Kobelco & Materials Copper Tube (KMCT) intends to raise their rolling charge by ¥30-50/kg. The price hike, the first since 2005, is a result of surging fuel and raw material costs. 70% of the cost up is a consequence of higher energy and substantial materials prices, with the remaining 30% due to the increased value of productive loss. This announcement comes in the wake of a raft of similar announcements from other Japanese copper tube makers, with Hitachi Cable announcing a 5% increase, Sumitomo Light Metal Industries adding 10-15%, and Furukawa Electric raising charges by ¥50/kg.

In late August, Furukawa Electric announced they would be raising prices for enamelled wire as they try to offset the rising cost of energy and varnish, particularly for polyvinal formal enamelled copper wire (PVF). According to Furukawa varnish and energy costs have increased 40% and 80% respectively since fiscal 2004. Sumitomo Electric, Hitachi Cable, Unimac and Totoku Electric have all also announced that they are either negotiating price rises on future shipments or conducting studies into a price increase. However, slowing demand for electric wire and electronic parts may make any further price hikes difficult. An industry source commented that, "makers could only get a higher price for PVF."