Strategic Businesses Make Solid
Contribution to Earnings
Specialty plastics division
Major
product areas - commercial-use food packaging
materials, home products, fishing line
Besela sales slow but outlook remains positive
Sales of Besela, Kureha's new high barrier
laminated material to replace cans and other
barrier packaging films, fell slightly in fiscal
2004, due to the time taken for users to switch
to the new product. However, prospects for the
product remain bright after having achieved compliance
with food sanitation standards in the USA and
Europe in 2004.
Krehalon plant under construction in China
Exports of polyvinylidene chloride (PVDC) compound,
used in the packaging of perishable food, fell
in fiscal 2004, due to slower growth in demand
for sausages, as a result of high raw meat prices.
The company is currently constructing a new Krehalon
compound plant in Nantong, China, via a joint
venture with a local manufacturer and Japanese
trading company, which is scheduled to commence
operations in October 2005.
Marketing
of new film product, ML-40 underway
Kureha has developed and started marketing multi-layer
shrinkable film, ML-40, a new product
for wrapping meats and cheeses. The product,
which has excellent barrier properties, has been
jointly developed and marketed via an alliance
with Multivac, a prominent packaging machinery
manufacturer based in Germany. Kureha initially
plans to target growth in Europe, where it has
a well-established distribution network, though
the business is also being developed in the USA
and Oceania region.
NEW Krewrap wins good design award
Overall, sales of consumer home products totaled
¥19.2 billion in fiscal 2004. Although sales
of Kureha's kitchen use plastic wrap products
were flat, the launch of the Good Design Award
winning NEW Krewrap in March 2004, and
a further improved version in February 2005 will
boost the sales potential of this product range.
Other operations division
Major product areas - environmental engineering,
construction and transport/warehousing-related
businesses
Medical waste processing
capacity increased
The area with the greatest growth potential in
this division is environmental engineering-related
businesses, such as medical waste processing
and polluted soil restoration. These businesses
contributed sales of ¥7.0 billion in fiscal
2004. Kureha operates one of the largest incineration
services to medical institutions in Japan. The
company increased its medical waste processing
capacity in fiscal 2004 from 1,200 tonnes to
1,600 tonnes per month, maintaining a high market
share in the Tohoku and Kanto regions. Business
is also expanding in the Tokyo area.
Medical waste traceability system under development
In July 2004, Kureha and IBM Japan began joint
development of a waste traceability system that
uses IC tags to prevent the illegal dumping of
medical waste. Testing is being conducted at
Kureha Hospital in Fukushima prefecture. Kureha
is considering introducing this system in the
Tokyo metropolitan region in the medium term.
Capex, Depreciation and R&D
Consolidated capital expenditure in fiscal 2004
increased by ¥3.3 billion to ¥12.0 billion,
with a further ¥2.5 billion increase forecast
for fiscal 2005. This jump in capital expenditure
is largely the result of the company's investment
in additional PPS and PVDF resin production capacity,
and the updating its Nishiki Factory power plant.
Kureha invested a total of ¥6.5 billion in
R&D in fiscal 2004.
Consolidated
capital expenditure, depreciation and R&D
| |
Fiscal
2003 |
Fiscal
2004 |
Fiscal
2005
(forecast) |
| Capital
expenditure |
8.7 |
12.0 |
14.5 |
| Depreciation |
7.9 |
7.6 |
8.0 |
| R&D |
6.4 |
6.5 |
7.5 |
|
|
