[Company analysis] Nitto Denko (日東電工)

「Nitto Denko (日東電工)」 is a company that produces packaging materials such as adhesive tape, semiconductor-related materials, optical films, etc., and is headquartered in Osaka. The company manufactures a wide range of B2B products, and handles more than 13,000 types of products in various fields such as automobiles, housing, social infrastructure, home appliances, displays, and medical care. Overseas sales account for more than 70% of the total, and only 30% of our employees are Japanese, and they are expanding our business worldwide. The number of consolidated employees is about 26,001.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	Nitto Denko
Company name (Japanese)	日東電工
Date of establishment	Friday, October 25, 1918
Headquarters location	〒530-0011 大阪市北区大深町4番20号　グランフロント大阪 タワーA 33階
Capital	26,700
Consolidated sales	806,495
Consolidated operating profit	92,777
Consolidated total assets	913,418
Consolidated capital	701,187
Capital adequacy ratio	76.8%
Consolidated number of employees	26,001

 

 

 

2. Summary and Features

 
The predecessor of「Nitto Denko」was「Nitto Denki Kogyo(日東電気工業)」, which was established in 1918 to produce electrical insulation. Immediately after World War II, the company was incorporated into「Hitachi, Ltd.,」 but became independent of capital from「Hitachi group」in 2003. Nitto Denko handles a wide range of electrical materials, automotive parts, and industrial products, which are intermediate materials for products used in the world, regardless of the specific materials.

Despite having advanced into various fields of business, 「Nitto Denko」still has a large number of products that is boasting the world's top market share, such as liquid crystal polarizers used in liquid crystal displays, phase difference plates for liquid crystals, and asthma drugs. This success was made by global niche strategy. 「Nitto Denko」carefully select and enter the niche market where they have competitive advantage.

On the other hand, general-purpose products are not suitable for small companies is not Nitto Denko's cup of tea , because of inevitable price competition. Conversely, they took the strategy for securing high profits while avoiding price competition. It is said that「Nitto Denko」has numerous small business towers, and deployed them on a global level. This is how they achieved 1 trillion yen of sales and 100 billion yen of operating income.

To build up this numerous small towers, Their corporate culture is comparatively open-minded in starting new business. For example,「Nitto Denko」thinks commercializing only 30% of new project idea is enough and successful so that idea can be easily come up with. And considering their own competitive advantage, 「Nitto Denko」select the ideas carefully then initiate their new business. 

In addition,「Nitto Denko」is also aggresive with winning the top market share, even in niche areas. The reason is not for sales or profits. The reason is, if they become top share maker, customers willingly consult with「Nitto Denko」for improvements or next generation of projects. This, give them more information and advantages for securing top share and even letting them starting new business.

 

 

 

3. Major Business

 

■ Basic Functional Materials Business
All tapes for industrial, electronic and residential use

■ Transportation business
Functional materials such as vibration suppression, soundproofing, reinforcement and ventilation membranes

■ Information Technology Materials Business
Optical films such as polarizing films and transparent conductive films

■ ICT business
Electronics-related products such as semiconductor materials and circuit materials

■ Medical Business
Nucleic acid drugs, transdermal drugs, etc.

■ Membrane business
Reverse osmosis membrane for seawater desalination, industrial water treatment membrane filter, etc.

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		767,710	856,262	806,495
Consolidated operating profit		92,589	125,722	92,777
Consolidated total assets		879,899	937,796	913,418
Consolidated net assets		654,421	693,995	701,187
Breakdown of sales	Industrial tape related business	296,528	325,548	318,595
	Optical equipment business	406,638	476,776	438,530
	Life Science business	40,855	30,919	25,219
	Others	22,595	22,053	23,032
	Adjustments	1,092	963	1,117