Hitachi Ltd. will try to lift its overseas sales ratio to 50 percent by the end of 2010 from about 40 percent now to ensure future growth, said Kazuo Furukawa, president of the machinery company.
“Fifty percent will be our milestone,” Furukawa said, emphasizing that the performance of the social and industrial infrastructure businesses, which include power plants, elevators and railway systems, will be key to achieving the numerical target.
But Furukawa, who took charge of the company in April last year, also expressed caution, saying expansion in sales must be executed with control because the Tokyo-based company does not want to get its priorities wrong.
Furukawa said that, for the time being, the most important thing for the company to do is improve its profitability and fulfill its business goals, which were set after he took the helm. One of those goals is meeting a group operating profit margin of 5 percent by the end of business 2009.
In the 2006 business year, Hitachi achieved an overseas sales ratio of 41 percent. Furukawa has said Hitachi will try to bring that up to 45 percent by the end of business 2009.
Earlier this month, Hitachi, Japan’s biggest maker of electrical machinery by sales, reported a group net loss of 32.80 billion yen in the year through March 31, partly due to a long slump in hard-disk drive operations.
On Monday, the 60-year-old Furukawa told reporters and analysts the company is fully committed to making its HDD business profitable.
Furukawa also stressed that Hitachi will try to get the best out of its recently formed alliances with General Electric Co. in the business of nuclear power plant operations and with Clarion Co. in the auto electronics business.
By combining Hitachi’s manufacturing expertise in boiling water reactors with GE’s sales and marketing strength, Furukawa said he believes the company’s nuclear power business will find firmer footing worldwide.
“We will first focus on the U.S. market,” he said, also noting that China, India and Europe were also promising markets.
No nuclear plants have been built in the United States since the 1980s, but demand has recently surged since Washington ended a nationwide ban on new reactors triggered by the partial core meltdown at Three Mile Island in Pennsylvania on March 28, 1979.
As of last June, Hitachi and GE had been involved in 63 of the boiling-water reactor plants operating worldwide.
Asked whether Hitachi has any plan to develop plants for pressurized-water reactors, the rival to BWR technology, Furukawa said: “Chances are higher in many senses if we focus on BWR with GE and sweep around the world.”
Regarding its ties with new subsidiary Clarion, he said: “Navigation systems have started to become popular items like car air conditioners in the past” also outside Japan, he said. “You can count on the business.”
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