TOKYO, Feb 9, 2011 - (ACN Newswire) - Hitachi Cable, Ltd. has announced plans to install production equipment for industrial wire and to begin production of wires for rolling stocks and heat-resistant wire at Hitachi Cable (Suzhou) Co., Ltd., a member of the Hitachi Cable Group in China. These plans also call for the construction of a new building at the facility.
Under its medium-term management plan, the Hitachi Cable Group is moving ahead to establish core manufacturing facilities that will produce a multitude of strong products, with the goal of strengthening its overseas businesses. The measures specified under the plan will be deployed first at Hitachi Cable (Suzhou).
Investment in the project is expected to total roughly 1 billion yen. The floor area of the new building will measure approximately 11,000 square meters and the new equipment is scheduled to come online in 2011. Hitachi Cable (Suzhou) has set a target of 2.5 billion yen for net sales of industrial wires in fiscal 2015, three years after the equipment begins operating.
The Hitachi Cable Group has identified comprehensive strengthening of overseas businesses as a key component of its medium-term management plan, Plan "BRIDGE" (covering the fiscal years 2011-2013) announced in April 2010, in order increase the profitability of its company structure. Measures intended to achieve this objective include advance planning to establish core manufacturing facilities to produce a multitude of strong products, with the goal of strengthening and improving the efficiency of overseas production, and a review of related topics, including methods for establishing these facilities, their locations, and the products the facilities will produce.
Industrial wires are used for various applications, including railways, factory and port equipment, and various types of industrial machinery. Driven by developments including flourishing construction demand and a proposed large-scale high-speed rail network, China continues to demonstrate remarkable economic growth as well as growing demand for industrial wire. Demand growth is expected for high-value-added industrial wires, which offer outstanding performance in areas such as heat resistance and flexibility.
Hitachi Cable has a number of strong industrial wire products. Wires for rolling stocks boast the leading share(1) of the Japanese market. Flame retardant polyflex insulated wire MLFC(2) offers outstanding flexibility. The company's technological capabilities are highly regarded in the market. Until now, however, Hitachi cable has not produced such products overseas, and strengthening overseas businesses has become a pressing issue in plans targeting future business growth.
Given its history as a central facility in the electronic wire business in China, Hitachi Cable (Suzhou) offers the expertise, technologies, and human resources needed to produce wire. Therefore, the facility is expected to be capable of rapidly setting up and bringing on line the equipment required to produce industrial wire.
Based on the factors described above, Hitachi Cable chose to make a new investment in Hitachi Cable (Suzhou) and to begin production of wires for rolling stocks and heat-resistant wire at the new facility. The Hitachi Cable Group will leverage this capital investment to expand sales channels to local customers in China and to capture demand in the rapidly growing Chinese market. In addition to rapidly starting up production of wires for rolling stocks and heat-resistant wire, Hitachi Cable (Suzhou) will consider expanding the lines of products produced based on market trends and will seek to grow the business as a core manufacturing facility.
The Hitachi Cable Group will continue to strengthen overseas businesses by developing production and sales structures, including the establishment of more core manufacturing facilities, in optimum locations, based on a marketing-based approach.
(1) Estimated by Hitachi Cable based on various survey data.
(2) MLFC is a registered trademark of Hitachi Cable, Ltd.
Summary of Hitachi Cable (Suzhou) Co., Ltd.
Location: Suzhou, Jiangsu, People's Republic of China
Representative: Yasuhiko Sakamoto, President
Number of employees: 3,278 (as of June 30, 2010)
Capital: US$42.1 million (as of December 31, 2010)
Main lines of businesses: Manufacture and sale of electronic wires,
processed wire, and wiring devices
Topic: Establish Subsidiary
Source: Hitachi Cable
Sectors: Electronics, Engineering
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