Hitachi Cable to Withdraw from Copper Tube in Japan

Hitachi Cable announced on Friday the firm withdraws from domestic copper tube business by terminating the production at Tsuchiura plant by March 2012. The firm decided the closure of the unprofitable business when Japanese air conditioner makers shift the production to offshore plants and domestic tube business condition gets severer. The firm talks with Sumitomo Light Metal Industries for potential sales of a part of the facility. The firm focuses the tube business on offshore joint ventures.

The firm already started the restructuring study in September 2010 when the firm announced mid-term plan through fiscal 2012 ending March 2013. The copper tube sales were 17.763 billion yen in fiscal 2010, which was 4.2% of the total sales. The sales volume was around 20,000 tonnes in fiscal 2010 due to very hot summer in 2010 and posted recurring profit. However, the unit would post loss for fiscal 2011.

The firm will talk with Sumikei Copper Tube, which is Aichi based subsidiary of Sumitomo Light Metal, for potential facility sales. Hitachi Cable recommends Sumitomo Light Metal for the users.

Hitachi Cable keeps 50/50 joint venture with Furukawa Electric in Shanghai and 36% share in Thai maker. Hitachi Cable indicates various options in future for the offshore joint venture and the firm could sell the share in longer term.

The firm posted 9.1 billion yen of consolidated net loss for April-September compared with 800 million yen of profit for same period of fiscal 2010 partly due to restructuring cost and assets impairment charge. The firm posted 1.1 billion yen of operating loss as same period of fiscal 2010 due to negative impacts of 1.7 billion yen from lower selling price, 900 million yen from higher yen rate and 1.1 billion yen from copper inventory valuation while the firm recorded 3.6 billion yen lower fixed cost.