Energy & Industry Business Group
Expand social infrastructure related business by shifting advanced technology from “products” to “services”.
The Energy & Industry Business Group strives to achieve a carbon neutral society by identifying customer needs and providing broad-based solutions to all areas of the social infrastructure business.
Our main growth strategy for the energy storage business will focus on business innovation and growth driven by NAS battery systems for electric energy storage, the mainstay product for this business. For NAS batteries, which are garnering increased attention due to accelerating decarbonization efforts, it will be critical that we not only sell batteries, but that we sell services by providing solutions that incorporate renewable energy. We will build various business models that take advantage of the NAS battery's high capacity, high energy density, and long service life. In addition to providing value as an emergency power supply solution for BCP and collaborating with local governments on the local production and consumption of electricity, we will promote NAS batteries for their use as “adjustment power” that contributes to stable power supply by bundling the electricity stored in NAS batteries located in various places. In the insulator business, domestic electric power companies continue to limit their capital investments. However, as a top insulator manufacturer, we will continue to manufacture and sell high-quality, highly reliable insulators for power transmission, substation, and distribution, and related equipment. We also are anticipating medium- to long-term market change, and will respond flexibly and efficiently to strengthen profitability. Due to the effects of streamlining and price revisions, in the fiscal year ending March 31, 2022, the insulator business returned to profitability for the first time in six years. In the industrial process business, we provide cutting-edge ceramic technologies to industries seeking new technologies, including membrane separation systems for pharmaceuticals and chemicals equipped with both ceramic and organic membranes, and high-performance glass lining products with antistatic functions. Sales of firing furnaces for electronic components and cathode materials for lithium-ion batteries were also strong. We will continue to introduce products and equipment that contribute to social and environmental conservation, and carbon neutrality. We will also target the pharmaceutical and chemical industries as we look to expand our business areas.
I feel very fortunate to be involved in three businesses as the Business Group Executive during this period of change. I will apply my own experience in the electronics field and apply a sense of urgency as we work to advance the development and expansion of the solutions business.
Starting from this April, we adopted a new structure that merges our existing power-related businesses, the insulator business and the energy storage business, with the industrial process business into a new business group operating in the power and industrial equipment-related fields. We will provide products and services that support social infrastructure and meet needs related to carbon neutrality and environmental conservation.
Products of each business
- Insulator business: Insulators for power transmission, substation and distribution, and related equipment.
- Energy storage business: NAS battery
- Industrial process business: Firing furnaces, drying furnaces, refractory products, pharmaceutical water equipment, ceramic membranes, low-level radioactive waste treatment systems for nuclear power plants, etc.
Business overview and forecast
In the fiscal year ended March 2022, insulator business net sales decreased due to continued constraints on capital investments among domestic power companies and railway companies, and due to sluggish shipments of NAS batteries. However, we were able to reduce losses through streamlining initiatives in the insulator business as well as thanks to the benefits of price revisions. Looking ahead to fiscal year ending March 2023, in the Industrial Process Business, we are forecasting increased demand for firing furnaces for lithium-ion battery cathode materials and electronic components, as well as increased revenues from growth in overseas exports for the Insulators Business. However, we expect continued losses due to the impact rising raw material prices and difficulties in procuring parts will have on the Insulators Business and the ES Business. Looking at the Industrial Process Business, in addition to demand related to firing furnaces, demand for pharmaceutical water equipment is also strong, and inquiries for NAS batteries are booming on global growth in the adoption of carbon-neutral systems. We are advancing preparations to strengthen profitability moving forward.
- Long history of networks in a wide range of industries
- Ability to provide value/solutions, including engineering
- Proprietary, high-quality ceramic manufacturing technology
Recognition of external environment
- Global trend toward carbon neutrality
- Growth in renewable energy
- Promotion of digital infrastructure
Recognition of external environment
- Prolonged supply chain disruption
- Stagnant economic growth
- Emergence of competition
Basic Strategies for the NGK Group Vision: Road to 2050
- Establish a comprehensive energy business with sights on all aspects of energy
- Capturing the growing CN-related market, establish sales of products and services in the electric power and industrial fields, increase earnings
- Strengthen the profitability of existing businesses by efficiently utilizing the portfolio of the three businesses
- Apply NAS batteries to expand solutions business, including offering solutions for local production for local consumption of renewable energy for local governments and proposals for improving resilience
- Collaborate with partner companies to expand sales and reduce costs for NAS batteries
- Expand the Industrial Process Business to overseas markets
Local production and local consumption of renewable energy
Contribution to carbon neutrality through Abashiri Electric Power
In recent years, there have been concerns about how declines in drift ice in the Sea of Okhotsk will impact the fishing and tourism industries. Abashiri City must engage in further efforts to address the global issue of reducing greenhouse gas emissions. Abashiri City also experienced a large-scale blackout due to the 2018 Hokkaido Eastern Iburi earthquake. There is a need for concrete measures related to emergency power supply in the event of disasters that could occur at any time. NGK established Abashiri Electric Power, a new local electric power company, with the aim of resolving these regional issues.
Possessing our own solar power generation equipment and NAS batteries, we aim to establish a model for the local production and consumption of renewable energy that does not rely on the renewable energy feed-in tariff (FIT) system. In normal times, the stable use of renewable energy through solar power generation and shifting energy from solar power generation using NAS batteries will enable the supply of power collected through solar power generation, even at night. This system will also provide power in emergencies such as natural disasters. We will strengthen our ability to respond to increasingly severe natural disasters, including by supplying power to disaster prevention sites through private power lines.
Note: This interview was conducted in May 2022.