|
|
 |
|
Last updated: Feb 1, 2010
| Progress Status and Outlooks for the Automotive Materials (AT) and Information Technology Materials (IT) Businesses |
| Q. |
|
What are the fourth quarter demand forecasts for the AT, IT, and MD businesses? |
|
| A. |
|
AT business demand is rebounding strongly in developing countries, but we anticipate more gradual recovery on the global scale. Seasonal factors, such as the Chinese New Year holidays, are expected to cause a dip in IT business demand from the third quarter. Other than influenza virus diagnostic drugs, we expect the demand environment for the MD business to remain essentially the same as in the third quarter. |
|
|
| Q. |
|
Will the AT business become an earnings growth driver for the High Performance Plastics Company for FY2010 and in the future? |
|
| A. |
|
The active investment to expand production capacity and the M&A effect will make the AT business a major contributor to earnings growth. In the medium term, we also expect the MD business to build up a rapid rate of sales growth. |
|
|
| Outlooks for Home Orders and the Housing Market |
| Q. |
|
Why did the third quarter housing orders fall short of the plan? What is the outlook for the fourth quarter? |
|
| A. |
|
The housing market recovered at a slower pace in the third quarter than we had anticipated at the second quarter results briefing. Another reason for the low number of orders is that the content and timing of government programs to stimulate the housing market had not been completely set at the time and some elements were ultimately put into a "wait-and-see" mode. In the third quarter, the various policies promoting home buying prompted a rising trend in the number of customers with stronger intentions to buy homes. We are implementing strategies to take advantage of this trend and increase the volume of orders received with the aim of achieving our target for the fourth quarter. |
|
|
| Q. |
|
How much influence do you expect the government preferential taxes, eco-point systems, and other programs for homebuyers to have on the housing and reform businesses? |
|
| A. |
|
Latent demand is still largely untapped. However the programs are producing some effects, such as a growing number of people seriously considering purchases. This leads us to expect ongoing recovery in the housing market in the fourth quarter and going forward. The introduction of an eco-point system for housing should spur demand in the reform business. We expect demand to rise for our core freeze-resistant window sashes and to see a multiplier effect in demand for our other reform products. |
|
|
| Q. |
|
Is the electricity buy-back program that began in November 2009 boosting orders for homes with solar power generators? |
|
| A. |
|
Yes, sales are rising substantially. We are aggressively promoting our unique large-capacity solar generation homes to emphasize our product differentiation. |
|
|
| Outlook for Business Related to New Housing Starts |
| Q. |
|
What is the outlook for next year regarding business related to new housing starts? |
|
| A. |
|
Our forecast is based mainly on the PVC piping business. We believe demand bottomed in fiscal 2009 and will recover marginally in fiscal 2010. Sales volume was solid compared to our plan for fiscal 2009, but we were unable to raise sales prices to the level we were aiming for. We will continue working on this in fiscal 2010 while also focusing on securing profit margins. |
|
|
| The Revised Fiscal 2009 Earnings Forecast |
| Q. |
|
The High Performance Plastics Company recorded 6.9 billion yen operating income in the third quarter. The fourth quarter forecast is 4.9 billion yen. What is the reason for the decrease? |
|
| A. |
|
We expect seasonal factors, such as the Chinese New Year, to produce a dip in IT demand compared to the third quarter. Rising raw material prices and an ebbing of demand for influenza virus diagnostic drugs in the MD business are also factors in expecting a quarterly dip in operating income. |
|
|
| Q. |
|
What is the status of negotiations to raise PVC resin prices? Do the rising raw material costs, particularly for PVC resins, create concern that the Urban Infrastructure and Environmental Products Company's operating income could fall short of this year's forecast? |
|
| A. |
|
Negotiations are currently in progress but, even if the renegotiated prices are accepted, the effect on this year's results would be minimal. |
|
|
| Q. |
|
Can you please provide more details about the orders that were postponed for the pipe renewal business overseas? Is it certain that the postponed projects will return next year? |
|
| A. |
|
A large number of the projects that were stopped or postponed in Europe and the United States were due to unseasonable weather. We expect to receive orders for the projects that were postponed. Some weather-delayed projects were restarted in January when the weather conditions stabilized. |
|
|
| Q. |
|
The revised operating income forecast for the Housing Company indicates that sales are expected to be 1.1 billion yen more than originally forecast in the second half. What is this based on? |
|
| A. |
|
The increase is mainly based on an expected slight increase in the number of housing units sold and a higher gross profit ratio from an improved product mix. |
|
|
Disclaimer
This press release may contain forward-looking statements. Such forward-looking statements are based on current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements due to changes in global economic, business, competitive market and regulatory factors.
|
|
|
