Emerging markets, such as BRICs and ASEAN, are expected to see continued market growth. This is precisely why these markets represent the new frontier for Furukawa Electric.
To meet the needs of these markets, today Furukawa Electric is moving forward with plans to bolster its manufacturing sites and sales networks in each of these regions. Currently, we have about 50 sales and manufacturing facilities in BRICs and ASEAN markets. Making use of our global supply network, we will look to increase our international sales ratio from 30.8% in fiscal 2010 to 35% in fiscal 2013, and eventually to 50% as a long-term target.
Increasing traffic will drive 3G mobile investment in emerging countries and cloud computing in developed countries. Demand will drop but rebound again, mainly in Asia.
The market is expanding-steadily, underpinned by growing demand for next-generation vehicles and mobile devices.
New investments in emerging countries and demand from renewals in developed countries will drive long term growth.
The market for tough, impact-resistant glass blanks is expanding on the back of growing demand for mobile devices, including laptop computers.
Capitalizing on expanding global investments
Infrastructure investments in power transmission and telecommunications are expected to continue in emerging countries such as BRICs and ASEAN over the long-term.
In China and India, further infrastructure investments are anticipated due to growing traffic on 3G mobile phone networks, while investment in power transmission infrastructure in the Middle East, Russia, India, and China is also expected to increase. Eight countries in Latin America, including Brazil, have employed Japanese-style terrestrial digital TV broadcast systems, spurring demand for broadcast station antennas and cable TV transmission systems.
The Furukawa Electric Group is reinforcing its supply systems around the world to respond adequately to this increasing global demand. In India, our joint venture business with a local company for the manufacture and laying of optical fiber launched operations in March 2010. We are also increasing production capacity at our optical fiber joint venture manufacturing company in Xian, China.
In China, we boosted production capacity by 30% at Shenyang Furukawa, a major manufacturer of high-voltage cable, in May 2009. Through Shenyang Furukawa and affiliated company Viscas Corporation, we will strive to become a top global supplier of ultra-high-voltage cables.
Furthermore, we are working to expand business operations in South America through our locally incorporated subsidiary. Such localized initiatives will enable us to expand our international sales share.
Installation of optical fiber cable overseas
Li-ion battery materials for EVs and HEVs as well as materials for HDD blanks
Furukawa Electric is looking to expand the operations of its functional materials business by focusing on greater value-added copper and aluminum foils used in lithium-ion batteries for EVs and HEVs, as well as materials used in blanks for HDDs.
In the field of lithium-ion batteries for EVs and HEVs, we are a major supplier of copper and aluminum foils used in positive and negative electrodes, and are striving to supply higher value-added products in the segment, including developing activators made of carbon and other materials.
The widespread use of lithium-ion batteries in EVs and HEVs began in earnest in fiscal 2011. With the spread of next-generation vehicles, we expect the lithium-ion battery market to grow three-fold by fiscal 2013 and fivefold by fiscal 2014. As such, while carefully monitoring demand, we will move forward with plans to augment our production facilities.
As we are the only company in the world to manufacture and sell both aluminum and glass materials used in blanks for HDDs, we will aim to become the number one global supplier of these materials as well. We enjoy a 50% share of the global market for aluminum materials, a conventional mainstay material for blanks, and will continue to maintain this share. At the same time, we are also planning on making full-scale inroads into the glass materials segment, in order to capitalize on growing demand from mobile devices. Accordingly, we have developed a proprietary manufacturing process that utilizes our optical fiber production technologies, launching mass production in April 2010.In consideration of today's global supply shortage, we plan to expand our production scale about twenty-fold in 2013.
In addition to these two areas, we have made full-scale inroads into the LED TV market with MCPET microfoamed reflective sheet. We also provide solutions in increased-productivity semiconductor wafer processing tape, lightweight aluminum harnesses for vehicles, and aluminum compressor wheels, where we have established a top share globally.
Glass blank for a HDD
Carefully assess low-profit businesses and promote greater efficiencies through a “One Product, One Factory” approach
In order to optimize its operating portfolio, Furukawa Electric understands that it must not only extend its new businesses and growth businesses, but also consider how to improve less profitable businesses that have passed their prime.
As a result, we have categorized our Group businesses into the four areas of “Developing,” “Growth,” “Core,” and “Restructuring,” with the plan to promote the reform of less profitable businesses classified under the Restructuring category.
The specific target of this reform process is simple, lower value-added processed products such as copper wires and strips, rolled aluminum products, electrical wire, and general plastic products. Although these traditional processing businesses have focused primarily on the Japanese market, future growth is not expected due to weaker demand attributed to Japan's aging society and declining birthrate. As such, where we once produced a single product at several factories in order to diversify risk, we will now shift strategy to produce one product at one factory to enhance production efficiencies.
As part of moving forward with this new operating model, Furukawa Electric launched the Business Viability Assessment Committee in April 2010 to assess and discuss the effectiveness of restructuring plans.
