Segment-Specific Strategies and Promotion Efforts
Energy & Industry Business
Widely support social infrastructure business needed to realize a carbon-neutral society
The Energy & Industry Business Group consists of three business divisions: the Energy Storage Business, Insulator Business, and Industrial Process Business. By providing a wide range of products and services for the electric power and industrial equipment-related fields, the Energy & Industry Business Group aims to widely support social infrastructure business needed to realize a carbon-neutral society.
Basic Strategies for the NGK Group Vision: Road to 2050
- Establish a comprehensive energy business with sights on all aspects of energy
- Capturing the trend of growing CN-related markets, provide new social value in the electric power and industrial fields to increase earnings
- 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
- Economic slowdown due to monetary tightening
- Changes in energy policies of countries around the world
- Technological innovation of competitors
Review of the fiscal year ended March 31, 2023 and outlook for the fiscal year ending March 31, 2024
In the fiscal year ended March 31, 2023, amid soaring energy and resource prices and supply chain problems caused by the conflict between the United States and China, we achieved a year-on-year increase in net sales due to higher demand for firing furnaces for lithium-ion battery cathode materials, price revisions for insulator-related products, brisk demand in North American and Australian markets, increased shipments of NAS batteries to Japan, and the effect of the weak yen. Major topics during the past year included the establishment of a medium- to long-term business strategy for the Energy Storage Business and restructuring of the Insulator Business.
Although the economic outlook remains uncertain, we expect an increase in overall sales during the fiscal year ending March 31, 2024 and an improvement in profitability due to increased demand for firing furnaces for lithium-ion battery cathode materials, price revisions for insulators and NAS batteries, and passing on rising costs of raw materials and other factors.
Medium- to long-term growth strategies to realize the NGK Group Vision
In order to realize the NGK Group Vision, each member of the Energy & Industry Business Group will adopt the mindset of “taking on the challenge of continuing and accelerating reforms without fear of failure to continue providing new social value in the energy and industry fields” to move forward toward the type of business we want to be in 2050. The pillar of our growth strategy is our NAS battery, a key product in our Energy Storage business. Now that the issue of climate change is recognized as a global issue that we all face, the global adoption of renewable energy is sure to increase, which will result in a demand for long-lasting storage systems that is expected to further increase in the future. Since potential demand for NAS batteries, which are characterized by large capacity and long life, is expected to increase based on that scenario, we will focus on building a business model that contributes to the expansion of renewable energy introduction in Japan and on acquiring overseas projects, aiming to improve the presence of NAS batteries in the market and steadily increase NAS battery market share. In addition, we will work together with BASF, a German chemical manufacturer, and other business partners to reduce costs, an important factor in supporting the electric power infrastructure. The Insulator Business achieved increases in both net sales and operating income year-on-year in the fiscal year ended March 31, 2023, thanks to an increase in overseas projects and price revisions.
Despite these results, the Company has decided to terminate the production and sales of insulators at our historic Chita Site within the next few years in line with a medium- to long-term business decision. From here on, we will continue our efforts to restructure our business structure, improve business efficiency, and build a stable business foundation that can flexibly respond to fluctuations in demand.
In the Industrial Process Business, we aim to achieve further growth by pursuing productivity improvements, differentiating technologies, and high functionality in corrosion-resistant equipment and refractory products that utilize our proprietary ceramic technologies, as well as membrane separating systems that are used in various fields, including pharmaceuticals, food, chemicals, semiconductors, and electronics. In addition, we will introduce products and equipment that can contribute to the environmental needs of society, such as CO2 separation, hydrogen separation, and bioeconomy, and develop business areas for new carbon-neutral products. We will explore new value that has not yet been discovered, and aim to develop products that stand out above the rest that will serve as catalysts for new growth.
Value propositions for resolving social issues
Although there have been multiple environmental and social changes in recent years, trends toward carbon neutrality and digitalization remain unchanged in the medium to long term. In such an era, we recognize that our mission as a business group that helps support the global social infrastructure is to contribute to solving two social issues by providing the various values we possess.
Our new business model that involves the utilization of NAS batteries will bring many benefits to society, including not only CO2 reduction but also local production for local consumption of electricity and securing of power sources during emergencies. Furthermore, plans are underway to construct VPPs (virtual power plants) that make the most effective use of storage systems installed in a decentralized manner, thereby expanding the use of renewable energy without waste.
With the increased use of renewable energy, plans are underway to enhance the national power grid in Japan for efficient power sharing, and insulators are an indispensable for enhancing the power grid.
We will continue to provide high-quality insulators and contribute to the stabilization of Japan’s power supply system.
Refractory products in the Industrial Process Business are important products that are indispensable in the manufacturing process of electronic components. It can be said that the Industrial Process Business contributes to the digital society in that it supports the infrastructure for the supply of electronic components.
Since our strength lies in our ability to provide a wide range of products from large to small, with the solutions necessary for social infrastructure, we will continue to expand our business by strengthening the concept of offering “services by providing solutions” in the future to achieve both corporate growth and social contribution.
Note: This interview was conducted in April 2023.