Ceramic Products Business

Business Summary from Group Executive

Pursuing new products to launch, while maintaining the position of profit center

Senior Vice President; Group Executive, Ceramic Products Business Group Jun Mori Senior Vice President;
Group Executive,
Ceramic Products Business Group
Jun Mori

Inaugural aspirations:
Be positive, without being afraid of change

Forty-five years ago in 1976, HONEYCERAM, a honeycomb catalyst substrate for controlling automotive emissions, went on the market. We have continued to refine and improve our technology over the intervening years while adapting to changes in society and in the business environment. However, the automotive industry is currently undergoing a once-in-a-century paradigm shift. We must not ignore this change, nor should we fear it. I believe the Ceramic Products Business Group is a frank and open organization where members can express ideas and opinions freely.
We will move forward by following and preparing for change through discussions involving all members.

Towards realization of the NGK Group Vision:
Provide products that contribute to carbon neutrality via unique technology

The NGK Group Vision anticipates a scenario in which there is zero demand for internal combustion engines by the year 2050. We aim to transform our business in line with this scenario, so that carbon neutrality and digital society-related products account for 50% of sales in 2030.

During the transition period, the Ceramic Products Business Group has a responsibility to recover past investment and to continue supporting the NGK Group financially as its profit center.

Beyond that, our aim is to make use of our unique technologies to develop new products that we will bring to market. Specifically, we will focus on the following three areas.

First, we will develop products used in plug-in hybrid electric vehicles (PHVs) as well as synthetic fuel (e-Fuel) vehicles. In the future, we anticipate that there will still be some internal combustion engine-powered vehicles such as PHVs and e-Fuel vehicles in use; hence, there will be a need for products for emission control systems. However, as these will need to be more technologically advanced, we will continue to provide new products adapted to our customers' needs.

Second, we will develop products for electric vehicles (EVs). One example is products for thermal management, which conduct electricity through a honeycomb structure in order to achieve heat modulation. Because EVs have the disadvantage of a short cruising distance, this creates a challenge for managing heat using as little electricity as possible. This is something we are pursuing development on while in contact with automakers.

Third, we will develop products unrelated to automobiles. Examples of new products put forward in the NGK Group Vision in developing jointly with other departments include CO2 adsorption modules and solid oxide electrolysis cells (SOEC), as well as honeycomb structural reactors for e-Fuel, to facilitate adsorption and recovery of CO2.

In order to achieve these we will need to search for new business and refine our core technology. Our future task is to determine what kind of technology we can use for carbon neutrality-related products.

While refining our core technology for that future, we are also continuing to improve our production efficiency. In a project called "Honeycomb Process Digital Transformation" (HPDX), we will, by analyzing production process data, automate and reduce the amount of labor required to perform adjustment of material viscosity, shape, water volume, temperature, extrusion speed, etc. These are all tasks which we have been dependent upon veteran employees to carry out. We are aiming for the completion of HPDX in three years' time.

Also, we are investigating alternative fuels that we can use for our kilns in order to promote the carbon neutrality of our manufacturing sites. At present, we use natural gas, which emits a large amount of CO2. We would switch this to another fuel, such as hydrogen or ammonia. Or, we could use electric kilns that would allow us to switch to in-house energy production and renewable energy use derived from a combination of NAS batteries and solar cells. Given that our overseas plants occupy large enough areas to install NAS batteries, and for which renewable energy can be easily and inexpensively obtained, this is a feasible option.

Current situation and future outlook:
Adequately adapting to changing demand

As a result of the impact of the COVID-19 pandemic, the first quarter of the period ended March 2021 saw unavoidable suspensions of operations at a majority of the overseas plants, with the exceptions of China and Poland; however, sales of passenger vehicles and trucks recovered during the latter half of the year, primarily in China, and this resulted in a rapid recovery in demand for our business group's products. It was thanks to the efforts of our employees that we were able to accommodate this resurgence in demand while still adhering to infection control measures. Although sales and profits were lower than those of the previous year, they were above what we predicted at the start of the fiscal year.

Currently, there is healthy demand for catalyst substrates for controlling automotive emissions and NOx sensors. Our gasoline particulate filter (GPF) business is also up and running. Our aim is to ensure optimal production according to demand.

Additionally, we are moving ahead with start-up of our "dew-point-free" NOx sensor, which begins operating as soon as the engine starts. We are also planning to develop and bring to market electrically heated catalysts (EHCs) sometime between 2025 and 2027.

Our core competencies go beyond our current product lineups to encompass various ceramic technologies that cover the areas of development, production and evaluation, as well as the ability to communicate well with customers. Using these, we will create products that contribute to carbon neutrality.

Note: This interview was conducted in June 2021.

Main market

[Market for NGK products for emission control systems]
Global market size: 500 billion yen
(2020 NGK estimate)

Primary customers

[Products for emission control systems]
Manufacturers of cars, trucks, and agricultural and construction equipment in and outside Japan

Sales ratio by business

Sales ratio by business

Core products

Diesel particulate filters (DPFs)

Diesel particulate filters (DPFs)

Removes up to 99% of particulate matter (PM). The more heat-resistant silicon carbide filters (left-hand side of photograph) are mainly used in passenger cars, while the lightweight cordierite filters are used in large vehicles.

In-vehicle high-precision NOx sensors

In-vehicle high-precision NOx sensors

These sensors contain elements that utilize zirconia's oxygen pump function. They are installed in clean diesel vehicles around the world because of their superb detection capabilities and durability.

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