Valve Manufacturing Business (Semiconductor Equipment market)
Valve Manufacturing Business (Hydrogen & Clean Energy market)
Q
How is the current situation at
KITZ SCT?
How is the current performance of the hydrogen business ?
How much does the hydrogen contribute to our business? What kind of customers do we have and where are they based? What are this year's goals, the last one of your med-term plan?
A
The semiconductor market is showing signs of recovery. However, the recovery has not reached a level that can leverage a new plant building that increased our production capacity to ¥2.5B in monthly sales, which was completed in April last year. The recovery of orders is expected in the 2nd half of the year, but it is still uncertain. Currently, we have a five-month backlog of orders.
For FY2023, both the orders and sales we expected got shifted to FY2024. At the time of Q3 results, we were anticipating orders of approx. ¥1.7B but ended up slightly above ¥1.0B. A similar amount in sales was also deferred to 2024, delaying the substantial growth of the hydrogen business until then.
Our customers are in both commercial and non-commercial(in-house use) hydrogen station markets. With the push towards renewable energy, the usage of hydrogen is on the rise. We are receiving inquiries about the introduction of hydrogen from local governments. Moreover, we are seeing more projects for demonstration plants using liquid hydrogen valves. For this mid-term plan, we are aiming for approx. ¥3.0B in the Hydrogen & Clean Energy market.
3
Valve Manufacturing
Your plans seem to rely on raw
Business
material market conditions staying
(raw material
low, favoring profit. But what
price）
about risks like the rising labor
costs among material producers
causing profits to shrink?
We're not foreseeing huge changes in raw material market conditions and expect them to level with FY2023. As for the impact of increasing labor costs at material producers, we don't foresee a significant impact currently. However, if it does, we plan to cover that with other cost-cutting measures.
Can you explain your specific strategies and targets to minimize get inventory turnover days?
With a wide range of product brands, what is important in inventory management?
A
As each of our group companies in different regions pushes into markets where it has strengths, inventory usually piles up to avoid opportunity losses. We need to reduce inventory for cash flow management and have therefore instructed the companies to split inventory into strategic stock and the rest. We will also review long-standing items and work on expanding sales.
The inventory at the end of December 2023 was up by approx. ¥4.0B YoY, with ¥2.2B from the impact of foreign exchange and ¥1.8B from internal reasons, including supply chain issues. We are targeting to lower inventory by ¥3.9B in FY2024. We will dispose of long-standing items and review strategic inventory's validity while also genuinely working to reduce the production lead time.
Kitz Corporation published this content on
15 March 2024 and is solely responsible for the information contained therein. Distributed by
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15 March 2024 08:59:03 UTC.
KITZ CORPORATION is mainly engaged in the manufacture and sale of valves and copper products. The Company operates in two business segments. The Valves segment provides bronze valves, steel valves, valve-related products, as well as filtration-related products. The Rolled Copper segment provides rolled copper products and copper processed products. The others businesses include the operation of hotels, restaurants and others.
KITZ CORPORATION 
