[Company analysis] Pacific Metals Co., Ltd. (大平洋金属)

「Pacific Metals Co., Ltd. (大平洋金属)」is a steel company which is headquartered in Aomori Prefecture. As a related company with「Nippon Steel Corporation(日本製鉄)」, they mainly handle Ferro nickel which is the raw material for stainless steel. In that field, they have the top market share in the world. Besides, this company also carry out a power generation business. The number of consolidated employees is approximately 498.。

 

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	Pacific Metals Co., Ltd.
Company name (Japanese)	大平洋金属
Date of establishment	Thursday, December 1, 1949
Headquarters location	〒031-8617 青森県八戸市大字河原木字遠山新田5-2
Capital	13,922
Consolidated sales	49,062
Consolidated operating profit	176
Consolidated total assets	71,933
Consolidated capital	64,439
Capital adequacy ratio	89.6%
Consolidated number of employees	498

 

 

 

2. Summary and Features

 
The predecessor of「Pacific Metals 」is「Japan Iron and Steel(日本鉄鋼株式会社)」which was established in December 1949 by the steel division of「Nippon Soda(日本曹達)」. In 1970, This company mergered「Pacific Nikkel(太平洋ニッケル)」then changed its name to current one. Since then, they started to expand overseas business actively, and still they owns shares in numerous mining companies in the Philippines. At present,「Pacific Metals 」covers all processes from ore refining to production, sales, and reuse as business territoryareadomains.

The main product of「Pacific Metals 」is Ferro nickel. It is an alloy of iron and nickel, is basically refined and manufactured in an electric furnace and mainly used for raw material for stainless steel. During the refining process, slag is generated but this company is able to convert the slag to artificial sand. In the past, they used to handle stainless steel itself, but since 1999, they compeletely withdraw from the business.

With the peak of 61.2 billion yen in 2015, sales of「Pacific Metals」have begun to decline, and operating income also has deteriorated. This is because the cost of nickel, which is the raw material for ferronickel, has risen. Since 97% of their sales depend on the ferronickel business, so the company's performance is greatly affected by cost fluctuations and exchange rates.

Nonetheless, as of 2018, due to the increase in the price of ferronickel, their coporate result was finally recovered. The capital adequacy ratio of「Pacific Metals」became 89.6% as of 2019, which is a very high level. Sales and operating income fluctuate considerably depending on market conditions, but the company is evaluated as stable because of its excellent financial condition.

 

 

3. Major Business

 

■ Ferro nickel business
This business uses an electric furnace to convert nickel ore into ferro nickel, which is the main raw material for stainless steel. Nickel-based stainless steel has excellent features such as heat resistance, corrosion resistance, acid resistance, and wear resistance.

■ Slag processed product
As an environment-friendly recycled material business, they can handle the slag which is a by-product of the ferronickel refining process, and making

■ Waste recycling business

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		38,697	41,210	49,062
Consolidated operating profit		-3,070	-3,239	176
Consolidated total assets		71,760	70,351	71,933
Consolidated net assets		63,771	62,616	64,439
Breakdown of sales	Japan	12,346	15,155	18,160
	Korea	2,166	973	4,507
	Taiwan	13,151	14,883	16,381
	China	7,252	5,819	4,257
	India	3,780	4,378	5,756