Furukawa Aims Machinery Business Recovery by Internal Efforts and Offshore Market Cultivation

Nobuyoshi Soma, president of Furukawa, explained the company’s management strategy under severe business condition at an exclusive interview with Japan Metal Bulletin. Mr. Soma explained Furukawa’s current electrolytic copper shipment is steadier than expected while machinery sales recovery is delayed. He said the firm concentrates in profit recovery of the machinery business unit, Furukawa’s cash cow, by improvement of productive efficiency and cost reduction.

He said almost all of Furukawa’s electrolytic copper sales are bound for domestic market usually but the firm exported 15-20% ingot for China and other countries in late 3-4 months. Demand for power cable seems strong in China. Domestic copper demand is recovering gradually, too. On the other hand, operation rate of Furukawa’s domestic machinery plants stays at around 50%, as low as January-March.

Mr. Soma described the firm tries to improve productive efficiency and accelerate cost cut for the machinery business unit under low demand condition. First of all, he said, the firm aims to reduce financial burden by inventory downsizing. Meanwhile, Furukawa plans to cultivate machinery markets in Latin America and China. Furukawa aims to expand machinery sales related to mineral resource development in Latin America. As to China, the firm plans to cultivate inland market as well as coastal area.

For the metal business unit, Furukawa examines equity acquisition in offshore copper mines. However, Mr. Soma said, the investment timing should be after the profit recovery in the machinery business unit.

As to the new core businesses, he explained gallium nitride development is on schedule. He said the firm tries to commercialize gallium nitride and lutetium-aluminium-garnet soon and grow the businesses as strong as metallic arsenic.