Hitachi Metals, Ltd. Business Information, Profile, and History

History of Hitachi Metals, Ltd.

Established in 1956, Hitachi Metals, Ltd. (HML) is a leading manufacturer of high-grade specialty steels. While HML's steel division is its largest, other products include magnetic materials, pipe components, steel-rolling-mill rolls, and malleable iron castings. Starting in the late 1980s, HML turned its research-and-development attention to electronic materials.

Hitachi Metals, Ltd., is an outgrowth of Hitachi, Ltd. (HL), which is a leading manufacturer of industrial machinery. HL has its roots in the desire of its founder, Namihei Odaira, to reduce Japan's dependency on imported technology and equipment during the early years of the 20th century. Odaira had opened a motor-repair shop north of Tokyo, in Hitachi, to service a copper mine there. He saw that all of the mine's equipment was imported. This was not uncommon in 1910 because of a domestic mistrust of Japanese equipment. Odaira saw the need for dependable domestically produced engines, and in 1910 began to produce his own five-horsepower engines. Odaira leased his engines to the local copper mine. It took many years and much perseverance--and the intercession of two world wars--for Odaira's vision and Hitachi's products to succeed in overcoming this mistrust.

In 1920 Hitachi Ltd. was incorporated. In 1924 HL built Japan's first electric locomotive. By 1926 the company was exporting electric fans to the United States. It was not, however, until the 1950s that Hitachi sought, under new president Chikara Kurata, to pursue market expansion. It saw its future in electronic engineering, especially computer equipment and consumer goods, such as household appliances and televisions and later video cassette recorders. These would later become HL's strength.

In 1956 the iron and steel division of HL was spun off to become an independent company. Under the name Hitachi Metals Industries Ltd., the new company started operations that same year with five works, located in Tobata, Fukagawa, Kuwana, Wakamatsu, and Yasugi.

Hitachi Metals was listed on the Tokyo Stock Exchange in 1961, the same year it completed construction of its Kumayaga works. In 1965 Hitachi Metals America, Ltd. (HMA) was founded in New York City. Beginning as a four-man office with $50,000 capital, HMA's purpose was to sell Hitachi Metals Industries's specialty steel products, in particular, its razor blade steel. In 1967 Hitachi Metals Industries Ltd. changed its name to Hitachi Metals, Ltd. A larger U.S. division, Hitachi Metals International (U.S.A.), Ltd., was founded in 1976. This subsidiary administers investments, loans, and finances for subsidiaries and divisions in North America.

The company continued its overseas expansion with the founding of Hitachi Metals Europe GmbH in Düsseldorf, in 1970 and a subsidiary in Singapore in 1979. In the early 1970s HML began exploring other metal-product possibilities, especially in the growing field of electronics. In 1971 the company established its magnetic- and electronic-materials research laboratory. Research from this laboratory led to the 1973 founding of the Hitachi Magnetics Corporation in Michigan and the Systems Magnetic Company, founded in California in 1984. Systems Magnetic is a manufacturer of computer components. In the early 1990s HML still devoted a high level of investment to research and development.

Magnetic materials in 1990 comprised HML's second-largest division and about 19% of net sales in that year. This division produces alnico, ceramic, and rare-earth magnets; parts such as magnet rolls for copy machines and printers; voice coil motors for hard-disc drives; and magnetic head parts used in computers, video cassette recorders, and terminals. In the late 1980s demand for copy machine parts and office automation equipment declined, but the sale of ceramic magnets for automobiles had grown. In 1989 Hitachi Metals North Carolina, Ltd. was formed to manufacture ceramic magnets.

HML founded a subsidiary in Australia in 1984, for sales of its metal products there. Two more laboratories were established in the 1980s, reflecting new product areas; the equipment-design-development research laboratory was opened in 1985 and the advanced-materials research laboratory was established in 1988. The company's plant and equipment division in 1990 represented 7% of HML's net sales. The division's main products are treatment equipment for sewage, water, and garbage; incinerators for industrial waste; factory-automation-related equipment; feed-production plants; silo equipment; and chains.

In 1986 and 1987 HML suffered some setbacks, the result of a reduced profit margin on exports. It responded by integrating factories and reducing its work force. The company also concentrated on growth-promising products, such as electronics-related products and magnetic-head materials. Although automotive parts exports had declined, sales of HML's iron castings for domestic automobile use had increased enough to represent significant growth in the automotive-components division. Aluminum castings for motor vehicles also increased. The automotive-components accounted for 22% of HML's net sales in 1990.

In addition to the ceramic magnets company begun in North Carolina in 1989, HML founded Ward Manufacturing Inc. in Pennsylvania to manufacture malleable cast iron pipe fittings. Pipe-fitting sales had fallen for the company in the late 1980s, but new products, such as corrugated stainless steel gas tubes and corrosion-resistant water-pipe fittings, had made up for the loss.

In 1989 HML founded HMT Technology Corporation. This California-based subsidiary manufactures thin-film magnetic discs. Hitachi Metals, Ltd.'s goal is to build a flexible, broad-ranging corporate base with a strong international presence to help maintain the company's stability.

Principal Subsidiaries: Hitachi Kinzoku Shoji, Ltd.; Hitachi Metals Techno, Ltd.; Hitachi Tool Engineering, Ltd.; Hitachi Ferrite, Ltd.; Hitachi Metals Precision, Ltd.; Tokyo Seitan, Inc.; Hitachi Valve, Ltd.; Hitachi Metals Estate Ltd.; Hitachi Metals America, Ltd.; Hitachi Magnetics Corp. (U.S.A.); Systems Magnetic Company, Inc. (U.S.A.); Hitachi Metals Europe GmbH (Germany); Singapore Foundry & Machinery Co. Pte. Ltd.; Hitachi Metals Singapore Pte. Ltd.; Hitachi Metals Australia Pty., Ltd.; Hitachi Metals Hong Kong Ltd.; AAP St. Marys Corp. (U.S.A.); Hitachi Metals Electronics (Malaysia) Sdn. Bhd.; HMT Technology Corp. (U.S.A.); Ward Manufacturing Inc. (U.S.A.); Hitachi Metals North Carolina, Ltd.(U.S.A.).