[Company analysis] Yokogawa Electric Corporation (横河電機)

「 Yokogawa Electric Corporation (横河電機)」is a company specializing in industrial equipment process control, headquartered in Tokyo. It is one of the largest measurement and control equipment manufacturers in Japan, and 6th at the world level. It is also a business holding company for the Yokogawa Electric Group. The number of consolidated employees is approximately 18,329.

 

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	Yokogawa Electric Corporation
Company name (Japanese)	横河電機
Date of establishment	Wednesday, September 1, 1915
Headquarters location	〒180-8750 東京都武蔵野市中町2-9-32
Capital	43,401
Consolidated sales	403,711
Consolidated operating profit	34,594
Consolidated total assets	470,114
Consolidated capital	296,150
Capital adequacy ratio	63.0%
Consolidated number of employees	18,329

 

 

 

2. Summary and Features

 
「Yokogawa Electric Works Ltd.,(横河電機製作所)」which was established in 1915 by Yokogawa Tamisuke(横河民輔), a Japanese representative architect who was active in the Taisho era, was the beginning of the current「Yokogawa Electric」. During the time of establishment, they domestically produced measuring instruments that had been dependent on imports at the time. Since 1933, this company started developing and manufacturing equipment for aircraft and oil quantity, temperature and pressure controllers. During the Second World War, this company also grew rapidly, and employed about 10,000 employees.

After the war, they decided to enter industrial equipment process controllers market during the period of Japan's high economic growth. And they actively conducted this business by cooperation with other companies. In particular, they co-operate with「Hewlett-Packard」and established「Yokogawa Hewlett Packard(横河ヒューレット・パッカード)」, and they also co-operate with「General Electric」and established「GE Yokogawa Medical Systems(GE横河メヂカルシステム)」.

In addition, in 1983, it merged with「Hokushin Electric Works(北辰電機製作所)」, which specializes in not only measuring instruments but also aviation and ship parts. By this merger, 「Yokogawa Electric」was abled to expand its business territory and volume increasingly. They now become the 2nd largest manufacturer of industrial equipment process controllers after 「Honeywell」in the world.

During the bubble period, they have expanded their business scale and established a number of subsidiaries, in order to diversify their business. However, after the collapse of bubble economy, they decided to sort out many of their subsidiaries and implemented management reforms. For this, they eliminate joint ventures with「Hewlett-Packard」,「Agilent」,「Johnson Controls」,「Toyota Motor Corporation」, and「Waseda University」. As a result, their financial structure becomes now fairly stable.

 

 

 

3. Major Business

 

■ Controller business
They handle distributed control systems and sensor devices that control and operate the production equipment of various plants.

■ Measuring equipment business
They handle measuring instruments such as electric power, voltage, current and light.

■ Aeronautical machinery / Other
They manufacture instruments such as flat panel displays installed around the aircraft cockpit, which are installed in the latest model of "Airbus".

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		391,433	406,590	403,711
Consolidated operating profit		31,582	32,696	34,594
Consolidated total assets		440,695	448,809	470,114
Consolidated net assets		262,503	278,673	296,150
Breakdown of sales	Controller business	348,047	363,290	364,774
	Measuring equipment business	22,242	22,260	22,870
	Aeronautical machinery / Other	21,144	21,039	16,066