Welcome!

News Feed Item

SDK to Promote Globalization and Improve Profitability

Tokyo, Dec 5, 2012 - (JCN Newswire) - Showa Denko K.K. (SDK) today held a conference in Tokyo to explain its business results in 2012 and business strategy for 2013. The gist of explanations offered at the conference is as follows:

1. Estimated business results in 2012 and current business environment

(1) Estimated business results in 2012 (already announced on November 1)

The Japanese economy is facing a difficult situation due to declining export and production, as it is influenced by slowdown of global economy (especially in Europe) and the continuing appreciation of the yen. SDK's Electronics segment, driven by the HD media business, is expected to record higher sales and operating income compared with 2011 results. However, other segments will record lower sales and operating income. As a result, SDK's consolidated net sales for 2012 will amount to JPY 750 billion, a decline of approximately JPY 100 billion. Consolidated operating income will be JPY 32 billion, down about JPY 15 billion.

(2) Current business environment and performance forecast for 2013

According to IMF's announcement in October, the influence of stagnant economies in industrialized countries (especially in Europe) and slowdown of emerging economies will continue. IMF predicts a slow recovery of the world economy in 2013. Growth rate of the Japanese economy in 2013 will be lower than that of 2012, reflecting the decline in reconstruction demand.

In view of such economic conditions and based on the assumptions described below, SDK expects to record consolidated net sales of JPY 800 billion, operating income of JPY 35 billion, and net income of JPY 15 billion, a slight improvement over the estimated results in 2012. SDK will formally announce its performance forecast for 2013 in February 2013.

Basic assumptions for 2013 -
Exchange rate: JPY 80 per US dollar
Japanese economy: Remain at the current level in the first half, and recover slowly in the second half of the year
Demand in China: Slow recovery
Electric power cost: Rising

2. Business strategy for 2013

Under its medium-term consolidated business plan PEGASUS, SDK is aiming to become "Unique Chemical Company with Strong Presence on the Global Market." SDK will continue to follow the basic strategy under PEGASUS in view of the steady performance of the HD media business and expected medium- to long-term growth of the graphite electrode industry. (The HD media and graphite electrode businesses are serving as the "wings" of PEGASUS.) At the same time, we will review the planned business portfolio under PEGASUS to cope with changes in business environment and in laws and regulations at home and abroad. Thus, we will redesign our existing businesses.

In 2013, we will focus on accelerating globalization and improving the profitability of domestic operations. As for globalization, we will further expand existing businesses in China and establish new sites in the growing ASEAN region, strengthening our supply chains. In Japan, we will improve the profitability of our businesses in petrochemicals, chemicals, aluminum, and rare earth magnetic alloys by carrying out structural reform.

In accordance with that strategy, SDK will change its organization early next year to ensure speedy decision making, efficient operation, and quick commercialization of new products based on newly developed technologies. The existing systems of business sectors and headquarters will be abolished. Business divisions will be placed under the direct control of CEO. Corporate Officers in charge of respective business divisions will support CEO, constituting a strong top-management team. Thus, all businesses will be managed to ensure optimization of the performance of the entire Group.

3. Strategy by segment

(1) Electronics

1. HD media
Demand for PCs is currently stagnant, being influenced by the growth of smartphones and tablet PCs as well as the slowdown of emerging economies. This situation is expected to continue in 2013. The shipment volumes of hard disk drives in 2013 will total around 590 million units (at the same level as in 2012) due to stagnant PC demand. In 2014 and after, however, the shipment volumes will resume growth of 3-5% a year, due to the progress in cloud computing and recovery in the world economy.

SDK is taking the lead in the supply of high-storage-capacity HD media, and will continue to launch HD media with the highest capacity ahead of competitors. SDK has commercialized the world's first sixth-generation HD media based on perpendicular magnetic recording technology (2.5-inch 500 GB media; having the world's highest capacity for this size as of December 5, 2102). In the fist half of 2013, SDK will launch the seventh-generation PMR media (2.5-inch 650 GB). Development of the next-generation HD media is under way.

2. Rare earths
Due to the drastic changes in raw material prices in China, we now need to substantially reform our rare earth magnetic alloys business. As for dysprosium (very rare in supply, and China is virtually the only source), SDK is developing new technology that enables reduction in the use of dysprosium. By meeting customer requirements through such development effort, SDK will rehabilitate its rare earth magnetic alloys business. Our existing sites in China will expand sales to customers in the growing rare earth magnet industry in that country.

3. LED
As already announced, we transferred 70% of shares in our gallium-nitride (GaN) LED chip business subsidiary TS Opto Co., Ltd., to Toyoda Gosei Co., Ltd. on December 1, making the business a joint venture with Toyoda Gosei. We will further expand the business under the leadership of Toyoda Gosei, which is a leading company in this field.

SDK will continue to promote its own business in LED chips to be used in plant growth facilities, as part of its high-brightness aluminum-gallium-indium-phosphide (AlGaInP) LED operations.

(2) Inorganics

1. Graphite electrodes
Electric steel production is showing no growth at the moment due to stagnation of the European economy and the slowdown of emerging economies. However, electric steel production will grow in the future due to increased supply of iron scrap following replacements of buildings and bridges in emerging countries and purchases of new cars.

SDK has so far produced high-end graphite electrodes at its Omachi Plant in Japan and at Showa Denko Carbon, Inc., of the United States, to serve mainly the markets in industrialized countries. However, SDK decided this year to invest in a graphite electrode manufacturing company in China and make it a subsidiary. SDK will expand product lineup for volume zone markets.

2. Ceramics
Demand for chemical alumina is expected to grow in the ASEAN region for such applications as the cleaning of drinking water, filler for resins, and electronic materials. SDK is building a chemical alumina plant in Indonesia as a joint venture with a local company. The plant will start a trial run in 2014 and full-scale operations in 2015. With the start-up of the new plant in Indonesia, SDK will terminate its chemical alumina production at the Yokohama Plant.

(3) Petrochemicals

The petrochemicals market remains stagnant due to slow recovery of demand in China and the slowdown of the global economy. The current situation will continue in the first half of 2013. Under the circumstances, our ethylene plant at the Oita Complex will continue operation at the rate of 90% in 2013.

To strengthen the competitive position of the Oita Complex, we have been strengthening cooperation between upstream and downstream operations. As part of that effort, SDK established NS Styrene Monomer Co., Ltd. as a joint venture with Nippon Steel & Sumikin Chemicals Co., Ltd. in 2011. Renewal of the JV's styrene monomer plant will be completed in the middle of 2013.

Furthermore, to increase the value of cracker products, we are developing a new butadiene manufacturing process based on acetaldehyde.

(4) Chemicals

In the area of basic chemicals of the Chemicals segment, demand for acrylonitrile remains low. To cope with that situation, SDK will expand its business in acrylonitrile derivatives. As for chloroprene synthetic rubber business, we will expand sales of high-value grades.

Also in the Chemicals segment, SDK will promote globalization in high-value-added businesses such as high-performance automotive materials (BMC), high-purity gases for semiconductor processing (NH3, N2O, HBr, etc.), and separation/refining. In addition to the separation business centering on ShodexTM HPLC columns, SDK has decided to enter the purification resins market through investment in BIA Separations, a venture company in Europe.

(5) Aluminum

The Aluminum segment is now a cluster of businesses with leading positions on the global market, including operations in high-purity aluminum foils for capacitors, ShoticTM aluminum forged materials, and aluminum cylinders for laser beam printers. SDK will continue to strengthen these operations.

In the high-purity aluminum foils business, we are expanding our refining capacity at the Sakai Plant and building a new processing site in China, as announced earlier. In the ShoticTM business, we decided to build a new aluminum casting plant in Malaysia. Using the new plant and the existing forging plant in Singapore, we will meet growing demand for automotive forged aluminum parts in the ASEAN region

(6) New Growth businesses

We will expand our lithium ion battery (LIB) materials business. The business is based on our carbon and aluminum technologies, which are areas of our strength. Although there is some delay in the start-up of our target market for large LIBs for electric vehicles, the market is expected to grow rapidly in the medium-term point of view.

We will expand business in market segments where we have technical advantages, focusing on such areas as anode material, additive in cathodes and anodes, and aluminum laminated films for packaging.

About Showa Denko

Showa Denko K.K. ('SDK'; TSE: 4004, US: SHWDF) is a major manufacturer and marketer of chemical products serving a wide range of fields ranging from heavy industry to the electronic and computer industries. SDK makes petrochemicals (ethylene, propylene), aluminum products (ingots, rods), electronic equipment (hard disks for computers) and inorganic materials (ceramics, carbons). The company has overseas operations and a joint venture with Netherlands-based Montell and Nippon Petrochemicals to make and market polypropylenes. In March 2001, SDK merged with Showa Denko Aluminum Corporation to strengthen the high-value-added fabricated aluminum products operations, and is today developing next-generation optical communications-use wafers. For more information, please visit www.sdk.co.jp .



Source: Showa Denko

Contact:
Showa Denko K.K. (SDK)
IR & PR Office, Showa Denko 
Tel: +81-3-5470-3235


Copyright 2012 JCN Newswire. All rights reserved. www.japancorp.net

More Stories By JCN Newswire

Copyright 2008 JCN Newswire. All rights reserved. Republication or redistribution of JCN Newswire content is expressly prohibited without the prior written consent of JCN Newswire. JCN Newswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
What happens when the different parts of a vehicle become smarter than the vehicle itself? As we move toward the era of smart everything, hundreds of entities in a vehicle that communicate with each other, the vehicle and external systems create a need for identity orchestration so that all entities work as a conglomerate. Much like an orchestra without a conductor, without the ability to secure, control, and connect the link between a vehicle’s head unit, devices, and systems and to manage the ...
An IoT product’s log files speak volumes about what’s happening with your products in the field, pinpointing current and potential issues, and enabling you to predict failures and save millions of dollars in inventory. But until recently, no one knew how to listen. In his session at @ThingsExpo, Dan Gettens, Chief Research Officer at OnProcess, discussed recent research by Massachusetts Institute of Technology and OnProcess Technology, where MIT created a new, breakthrough analytics model for ...
IoT is rapidly changing the way enterprises are using data to improve business decision-making. In order to derive business value, organizations must unlock insights from the data gathered and then act on these. In their session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, and Peter Shashkin, Head of Development Department at EastBanc Technologies, discussed how one organization leveraged IoT, cloud technology and data analysis to improve customer experiences and effici...
Everyone knows that truly innovative companies learn as they go along, pushing boundaries in response to market changes and demands. What's more of a mystery is how to balance innovation on a fresh platform built from scratch with the legacy tech stack, product suite and customers that continue to serve as the business' foundation. In his General Session at 19th Cloud Expo, Michael Chambliss, Head of Engineering at ReadyTalk, discussed why and how ReadyTalk diverted from healthy revenue and mor...
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...
In this strange new world where more and more power is drawn from business technology, companies are effectively straddling two paths on the road to innovation and transformation into digital enterprises. The first path is the heritage trail – with “legacy” technology forming the background. Here, extant technologies are transformed by core IT teams to provide more API-driven approaches. Legacy systems can restrict companies that are transitioning into digital enterprises. To truly become a lead...
You have great SaaS business app ideas. You want to turn your idea quickly into a functional and engaging proof of concept. You need to be able to modify it to meet customers' needs, and you need to deliver a complete and secure SaaS application. How could you achieve all the above and yet avoid unforeseen IT requirements that add unnecessary cost and complexity? You also want your app to be responsive in any device at any time. In his session at 19th Cloud Expo, Mark Allen, General Manager of...
The Internet of Things (IoT) promises to simplify and streamline our lives by automating routine tasks that distract us from our goals. This promise is based on the ubiquitous deployment of smart, connected devices that link everything from industrial control systems to automobiles to refrigerators. Unfortunately, comparatively few of the devices currently deployed have been developed with an eye toward security, and as the DDoS attacks of late October 2016 have demonstrated, this oversight can ...
"MathFreeOn.com is a line coding platform for engineers and scientists. When they want to solve an engineering problem and they have to use software - they have to pay a lot of money for licenses - but with MathFreeOn you don't have to pay a lot of money. Just go to our site and write the code and you can check the result right away," explained Simon Lee, CMO of MathFreeOn, in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Cla...
In his session at 19th Cloud Expo, Claude Remillard, Principal Program Manager in Developer Division at Microsoft, contrasted how his team used config as code and immutable patterns for continuous delivery of microservices and apps to the cloud. He showed how the immutable patterns helps developers do away with most of the complexity of config as code-enabling scenarios such as rollback, zero downtime upgrades with far greater simplicity. He also demoed building immutable pipelines in the cloud ...
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
Bert Loomis was a visionary. This general session will highlight how Bert Loomis and people like him inspire us to build great things with small inventions. In their general session at 19th Cloud Expo, Harold Hannon, Architect at IBM Bluemix, and Michael O'Neill, Strategic Business Development at Nvidia, discussed the accelerating pace of AI development and how IBM Cloud and NVIDIA are partnering to bring AI capabilities to "every day," on-demand. They also reviewed two "free infrastructure" pr...
In his session at Cloud Expo, Robert Cohen, an economist and senior fellow at the Economic Strategy Institute, provideed economic scenarios that describe how the rapid adoption of software-defined everything including cloud services, SDDC and open networking will change GDP, industry growth, productivity and jobs. This session also included a drill down for several industries such as finance, social media, cloud service providers and pharmaceuticals.
"Dice has been around for the last 20 years. We have been helping tech professionals find new jobs and career opportunities," explained Manish Dixit, VP of Product and Engineering at Dice, in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Extracting business value from Internet of Things (IoT) data doesn’t happen overnight. There are several requirements that must be satisfied, including IoT device enablement, data analysis, real-time detection of complex events and automated orchestration of actions. Unfortunately, too many companies fall short in achieving their business goals by implementing incomplete solutions or not focusing on tangible use cases. In his general session at @ThingsExpo, Dave McCarthy, Director of Products...