Fujikura Dia Cable to Regain Profitability with Lower Shipment

Fujikura Dia Cable, which is Tokyo based joint sales company of Fujikura and Mitsubishi Cable Industries for construction application electric wire, expects the electric wire shipment will decrease by 9% in fiscal 2010 starting April from fiscal 2009. Fujikura Dia Cable’s shipment will decrease by 18% in fiscal 2009 from fiscal 2008. The firm forecasts severe market condition under long lasting slump for domestic construction activity. The firm tries to secure profit for fiscal 2010 by reducing fixed cost and variable cost.

The firm, which has estimated no.2 share in domestic electric wire sales for construction market, experienced around 10% lower shipment in fiscal 2008 from fiscal 2007. Under the severe market, the firm expects the shipment decreases for 3 years in a row through fiscal 2010. The copper electric wire demand decreases when the building activity is very low level for plant, office and housing.

The firm expects the sales are 46 billion yen for fiscal 2010 based on averaged 650,000 yen per tonne of Japanese official copper price. The firm estimates the sales are 50.6 billion yen for fiscal 2009 based on averaged 610,000 yen of copper price. The firm will post loss in fiscal 2009 as fiscal 2008. The lower shipment impacts on the results in fiscal 2009 while the loss in fiscal 2008 was mainly due to lower copper price.

The firm tries to post profit in fiscal 2010 by reducing cost for workforce and transportation. The firm also tries to improve the margin by passing higher cost for coating material due to higher price of naphtha when the electric wire selling price decreases under slow demand.

Japanese shipment of construction electric wire decreased by 18% to 230,000 tonnes in 10 months through January 2010 from a year earlier, according to Japanese Electric Wire & Cable Makers’ Association. With the lower shipment, the electric wire makers’ profitability gets severe.