Promoting Sustainable Energy by Staying ahead of Trends to Consistently Offer Products and Services that Exceed Customer Expectations
The Power Business Group offers products and services aimed at the support and development of electricity infrastructure around the world.
Needs for large-capacity storage batteries that help stabilize power supply have increased with the expansion of renewable energy.
We have further strengthened our business structure for insulators from customer’s perspective in order to provide optimal products and services that meet customer demands in a prompt, accurate and flexible manner. With the aim of becoming our customers’ brand of choice, the NGK Group will continue to promote businesses that will contribute to the development of power infrastructure as well as the spread and expansion of renewable energy.
Steady Progress in Promising Projects that will Lead to Future Growth
Net sales and operating income for both the insulators business and the NAS battery business fell below the forecasts made at the beginning of the fiscal year. In the insulators business, sales decreased due to sluggish replacement demand in North America. In the NAS battery business, sales declined mainly because there were no major shipments for both Japan and overseas. Meanwhile, there has been steady progress in promising projects that will lead to future growth both for the insulators business and the NAS battery business. In Japan, replacement demand for insulators installed during the period of high economic growth has been strong, and such demand is expected to grow in the future. In overseas, while large-scale projects have been at a standstill due to the effects of economic slowdown and a decline in the price of crude oil, there is a demand of developing power grid system to solve the transmission networks against the backdrop of power shortages in emerging markets in the Middle East, China and Southeast Asia. As for NAS batteries, a large-scale hybrid battery system demonstration project was launched in Germany, which has been actively introducing renewable energy. Conditions for the widespread use of NAS battery systems are emerging since discussions on installing electric power storage batteries have commenced in Japan toward the expansion of renewable energy.
Enhancing Competitiveness and Establishing a Lean Business Structure
In the insulators business, we will continue to respond to strong replacement demand in Japan while strengthening the competitiveness of our products, approaching quality improvement and offering products and services that gain even higher levels of customer trust.
In order to respond to changes in the market conditions and demand swiftly, we will establish a lean business structure by streamlining production lines at plants, reorganizing and integrating business operations, thereby improving profits.
Furthermore, we will promote the procurement and sales of OEM* products and enhance our market presence, especially in the North American market, with the aim of responding to market calls for a broader product lineup.
Aggressively Developing Overseas Markets with the Aim of Generating Demand
While the environment surrounding the NAS battery business is likely to remain extremely challenging for the foreseeable future, the potential needs are high.
For example, we aim to capture the orders in Hokkaido where the discussions are on-going about installing storage battery system to stabilize the power system to help the expansion of wind power generation. Looking at overseas, especially Europe where the expansion of renewable energy is particularly prominent, there is a movement to utilize storage batteries for demand management. Also in the Middle East, the plans have been coming up which introduce solar power systems to replace thermal power generation.
Our extensive experience and track record in the installation of NAS batteries are significant advantages for approaching to such various needs above. As one another example, we have just announced that NGK will provide its NAS batteries for the large-scale hybrid battery system demonstration project to be conducted in Germany from April 2017. By actively leveraging these kinds of opportunities, we will endeavor to further enhance recognition of NAS battery systems and expand their applications.
Establishing Sustainable Business Structure and Enhancing Brand Value
In the insulators business, we will endeavor to establish a business structure that can deliver high profitability. Replacement demand is expected to expand in the future since the aging of power equipment both in Japan and the U.S. NGK’s products have been highly recognized for their track records and quality and what we must focus on now is establishing a lean production system and a sustainable business structure. In addition, we will aim to further strengthen our systems from the customers’ perspective in order to provide even more optimal products and services in a prompt, accurate and flexible manner.
Capturing Demand by Taking Advantage of Global Expansion of Renewable Energy
In the NAS battery business, we will strive to grow business in line with the global expansion of renewable energy by leveraging our strengths in large capacity, compact size and superior cost performance as the large capacity storage battery.
It is expected that renewable energy will be fully introduced as energy infrastructure around the period between 2020 and 2025. Since NAS battery systems have high demand potential, we will actively engage in demonstration experiments in various countries and regions in the next few years and prepare for an increase in demand in the future. By doing so, we will be possible to offer more practical solutions by accumulating insights and building up a track record as there are significant background differences in reasons for introduction and use environment for storage batteries, depending on the customers. In addition, we are striving to establish operations related to remote monitoring systems after installing and also the after-sales services expected to cause as customers’ needs. As a leading company of large-capacity storage batteries, NGK has been preceding its competitors in terms of both track record and performance. Looking ahead to the large-capacity storage battery market to emerge in three to four years’ time, we will promote our sales activities and demonstration projects in overseas markets which leads us to be a top brand that is chosen by customers.