Welcome!

.NET Authors: Liz McMillan, Jim Kaskade, Lori MacVittie, Yeshim Deniz, Ivan Antsipau

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.

@ThingsExpo Stories
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
Noted IoT expert and researcher Joseph di Paolantonio (pictured below) has joined the @ThingsExpo faculty. Joseph, who describes himself as an “Independent Thinker” from DataArchon, will speak on the topic of “Smart Grids & Managing Big Utilities.” Over his career, Joseph di Paolantonio has worked in the energy, renewables, aerospace, telecommunications, and information technology industries. His expertise is in data analysis, system engineering, Bayesian statistics, data warehouses, business intelligence, data mining, predictive methods, and very large databases (VLDB). Prior to DataArcho...
Cultural, regulatory, environmental, political and economic (CREPE) conditions over the past decade are creating cross-industry solution spaces that require processes and technologies from both the Internet of Things (IoT), and Data Management and Analytics (DMA). These solution spaces are evolving into Sensor Analytics Ecosystems (SAE) that represent significant new opportunities for organizations of all types. Public Utilities throughout the world, providing electricity, natural gas and water, are pursuing SmartGrid initiatives that represent one of the more mature examples of SAE. We have s...
The Internet of Things (IoT) is going to require a new way of thinking and of developing software for speed, security and innovation. This requires IT leaders to balance business as usual while anticipating for the next market and technology trends. Cloud provides the right IT asset portfolio to help today’s IT leaders manage the old and prepare for the new. Today the cloud conversation is evolving from private and public to hybrid. This session will provide use cases and insights to reinforce the value of the network in helping organizations to maximize their company’s cloud experience.
Disruptive macro trends in technology are impacting and dramatically changing the "art of the possible" relative to supply chain management practices through the innovative use of IoT, cloud, machine learning and Big Data to enable connected ecosystems of engagement. Enterprise informatics can now move beyond point solutions that merely monitor the past and implement integrated enterprise fabrics that enable end-to-end supply chain visibility to improve customer service delivery and optimize supplier management. Learn about enterprise architecture strategies for designing connected systems tha...
IoT is still a vague buzzword for many people. In his session at Internet of @ThingsExpo, Mike Kavis, Vice President & Principal Cloud Architect at Cloud Technology Partners, will discuss the business value of IoT that goes far beyond the general public's perception that IoT is all about wearables and home consumer services. The presentation will also discuss how IoT is perceived by investors and how venture capitalist access this space. Other topics to discuss are barriers to success, what is new, what is old, and what the future may hold.
Whether you're a startup or a 100 year old enterprise, the Internet of Things offers a variety of new capabilities for your business. IoT style solutions can help you get closer your customers, launch new product lines and take over an industry. Some companies are dipping their toes in, but many have already taken the plunge, all while dramatic new capabilities continue to emerge. In his session at Internet of @ThingsExpo, Reid Carlberg, Senior Director, Developer Evangelism at salesforce.com, to discuss real-world use cases, patterns and opportunities you can harness today.
All major researchers estimate there will be tens of billions devices – computers, smartphones, tablets, and sensors – connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo in Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be!
Software AG helps organizations transform into Digital Enterprises, so they can differentiate from competitors and better engage customers, partners and employees. Using the Software AG Suite, companies can close the gap between business and IT to create digital systems of differentiation that drive front-line agility. We offer four on-ramps to the Digital Enterprise: alignment through collaborative process analysis; transformation through portfolio management; agility through process automation and integration; and visibility through intelligent business operations and big data.
There will be 50 billion Internet connected devices by 2020. Today, every manufacturer has a propriety protocol and an app. How do we securely integrate these "things" into our lives and businesses in a way that we can easily control and manage? Even better, how do we integrate these "things" so that they control and manage each other so our lives become more convenient or our businesses become more profitable and/or safe? We have heard that the best interface is no interface. In his session at Internet of @ThingsExpo, Chris Matthieu, Co-Founder & CTO at Octoblu, Inc., will discuss how thes...
Last week, while in San Francisco, I used the Uber app and service four times. All four experiences were great, although one of the drivers stopped for 30 seconds and then left as I was walking up to the car. He must have realized I was a blogger. None the less, the next car was just a minute away and I suffered no pain. In this article, my colleague, Ved Sen, Global Head, Advisory Services Social, Mobile and Sensors at Cognizant shares his experiences and insights.
We are reaching the end of the beginning with WebRTC and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will want to use their existing identities, but these will have credentials already that are (hopefully) ir...
Can call centers hang up the phones for good? Intuitive Solutions did. WebRTC enabled this contact center provider to eliminate antiquated telephony and desktop phone infrastructure with a pure web-based solution, allowing them to expand beyond brick-and-mortar confines to a home-based agent model. It also ensured scalability and better service for customers, including MUY! Companies, one of the country's largest franchise restaurant companies with 232 Pizza Hut locations. This is one example of WebRTC adoption today, but the potential is limitless when powered by IoT. Attendees will learn rea...
From telemedicine to smart cars, digital homes and industrial monitoring, the explosive growth of IoT has created exciting new business opportunities for real time calls and messaging. In his session at Internet of @ThingsExpo, Ivelin Ivanov, CEO and Co-Founder of Telestax, will share some of the new revenue sources that IoT created for Restcomm – the open source telephony platform from Telestax. Ivelin Ivanov is a technology entrepreneur who founded Mobicents, an Open Source VoIP Platform, to help create, deploy, and manage applications integrating voice, video and data. He is the co-founder ...
The Internet of Things (IoT) promises to create new business models as significant as those that were inspired by the Internet and the smartphone 20 and 10 years ago. What business, social and practical implications will this phenomenon bring? That's the subject of "Monetizing the Internet of Things: Perspectives from the Front Lines," an e-book released today and available free of charge from Aria Systems, the leading innovator in recurring revenue management.
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges.
There’s Big Data, then there’s really Big Data from the Internet of Things. IoT is evolving to include many data possibilities like new types of event, log and network data. The volumes are enormous, generating tens of billions of logs per day, which raise data challenges. Early IoT deployments are relying heavily on both the cloud and managed service providers to navigate these challenges. In her session at 6th Big Data Expo®, Hannah Smalltree, Director at Treasure Data, to discuss how IoT, Big Data and deployments are processing massive data volumes from wearables, utilities and other mach...
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at Internet of @ThingsExpo, Erik Lagerway, Co-founder of Hookflash, will walk through the shifting landscape of traditional telephone and voice s...
While great strides have been made relative to the video aspects of remote collaboration, audio technology has basically stagnated. Typically all audio is mixed to a single monaural stream and emanates from a single point, such as a speakerphone or a speaker associated with a video monitor. This leads to confusion and lack of understanding among participants especially regarding who is actually speaking. Spatial teleconferencing introduces the concept of acoustic spatial separation between conference participants in three dimensional space. This has been shown to significantly improve comprehe...
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, will discuss single-value, geo-spatial, and log time series data. By focusing on enterprise applications and the data center, he will use OpenTSDB as an example...