J-Power Systems to Accelerate Globalization in Cost, Supply Network

J-Power Systems, which is high voltage power cable making joint venture of Sumitomo Electric Industries and Hitachi Cable, commits to secure unconsolidated operating profit with 76 billion yen of sales for fiscal 2012 started in April. The firm tries to improve the productivity under severe competition with rivals under historical high yen rate. The firm tries to accelerate the globalization when the firm starts shipment for major projects from the plants in Saudi Arabia and India.

The firm reported 67.5 billion yen of the sales in fiscal 2011, which was 4% lower than fiscal 2010 level. The operating profit was apparently much lower than fiscal 2010 level while the firm didn’t disclose the profit. The president Sadao Fukunaga said the firm cannot secure profit at current production level due to severe competition with rivals in South Korea and China under the high yen rate.

The firm tries to improve the domestic productivity. The firm already integrated the organization of construction work of Singapore, Hong Kong and Kuwait for flexibility in 2011. Mr. Fukunaga said the firm eyes single construction organization for offshore business in future.

The firm also provides technical support to Ducab High Voltage Cable Systems of United Arab Emirates for royalty and local customer development.

The subsea cable making plant in Saudi Arabia held opening ceremony on May 22 to start test production. The firm starts shipment as early as in October after the certification from local majors. The plant targets more than 2 billion yen of sales in fiscal 2015.

The underground cable making plant in India completed the construction of VCV (vertical continuous vulcanizing) tower. The plant starts full scale commercial operation in the year while the plant already started part of the operation in 2011. The plant targets 8 billion yen of sales in fiscal 2015.