Environment Business

Promoting a business structure transformation into CN-related domains with earning power maintained, under the two-division structure combining the Automotive Ceramics and Industrial Process.

The Environment Business Group, which engaged in business that contributes to the environment in a broad sense, is tasked with two missions aimed at promoting sustainable growth for the NGK Group. The first mission is to serve as a profit center that generates immediate revenue. While we will see a demand contraction over the medium- to long-term amid the global vehicle electrification, we forecast being able to maintain net sales on a scope of 300 billion yen through around 2030. In addition to continuing sales of major products such as ceramics for emissions control and, NOx sensors for measuring nitrogen oxides (NOx) in automobile exhaust gases, we will also plan to launch next-generation products with high-function and high-added-value to respond to increasingly stricter regulations in Europe and other regions.

At the same time, we will pursue highly profitable, highly efficient business management by advancing measures related to cost reduction and inventory control. These measures will be based on the NGK ROIC (operating income / business assets), which we use as a management metric. The cash generated by this business group will serve as a source of capital for various growth strategies aimed at realizing the NGK Group Vision. By fulfilling this mission, we will have created a path for the future of the Group, and so we are committed to uniting towards fulfilling this critical role.

The other mission is to drive new value provision in CN-related fields, one of the target sectors outlined in the NGK Group Vision. We are focusing on the development of products and technology that can contribute to society’s environmental needs. Examples of these products include ceramics for Direct Air Capture (DAC), which directly captures CO₂ in the air, and sub-nano ceramic membranes, which can separate the molecules of CO₂ and other gases. We are steadily advancing various preparations towards our full-scale engagement in CN business, including initiatives such as newly establishing the CN Business Creation Division, repositioning the Industrial Process Business Division, and reorganizing our new product development sites.

We live in times when it is difficult to predict future trends. However, even in these times of dramatic changes in our environment, there is no change in our goal of pursuing carbon neutrality. We will accelerate product development making maximum use of our know-how accumulated through products for internal combustion engines and complete our transformation into the CN business. In doing so, we will contribute to the realization of a sustainable society by providing values unique to the NGK Group.

Business overview and outlook

In FY2023, we achieved increased sales and income amid a year of intense changes in our business circumstances. The automotive industry recovered thanks to an improvement in the shortage of parts such as semiconductors, and shipments of automotive products increased in response to the tightening of emissions regulations. Additionally, yen depreciation also had a positive impact.

In FY2024, we are forecasting increased sales and income. While we do project a decrease in demand for certain products due to the progress of vehicle electrification, we forecast increased sales for products to Chinese markets and the Industrial Process Business. We also expect to achieve increased income on cost reductions and sales price revisions. Furthermore, we incorporated the Industrial Process Business from Energy &Industry Business Group as of April 2024, aiming to expand synergies in the fields of the carbon neutrality and the bio industry.

* From FY2024, we moved the Industrial Process Business from the Energy & Industry Business to the Environment Business. Figures include performance from the Industrial Process Business.

Note: This interview was conducted in April 2024.