Furukawa Electric Group Sustainability Report 2014: Web version

Group Overview and Business ReportCompany ProfileCompany Name

Furukawa Electric Co., Ltd.

President

Mitsuyoshi Shibata

Founded1884

Established1896

Paid-in Capital(As of March 31, 2014)¥69,395 million

Net sales(Years ended March 31, 2014)¥931,781 million (Consolidated)¥428,301 million (Non-Consolidated)

Number of Employees(As of March 31, 2014)

47,045 (Consolidated)
3,590 (Non-Consolidated)

Head Office

Marunouchi Nakadori Bldg., 2-3, Marunouchi 2-chome, Chiyodaku, Tokyo
100-8322, JapanTEL+81-3-3286-3001

Major Products and Services
Telecommunications
Optical fiber cables / Metal communication cables / Semiconductor optical devices / Electronic appliance wires /Optical components / Network equipment / Optical fiber cable accessories and installations / CATV system /Radio products, etc.

Energy and Industrial Products
Copper wires and Aluminum wires / Power transmission cable / Insulated wires / Power transmission cable
accessories and installations / Cable conduits / Water-feeding pipe materials / Foam products / UV tapes forsemiconductor manufacturing / Electrical Insulation Tape / Electric material products, etc.

Electronics and Automotive Systems
Automotive components and wiring harness / Magnet wires / Electronic component materials / Heatsinks / Hard
disc drive (HDD) aluminum substrates / Battery products, etc.

Metals
Copper and copper alloy products (plates, strips, pipes, rods, foils, and wires) / Functional surface products(plating)/ Electrodeposited copper foil / Pocessed products for electronic parts / Superconducting products /Special metal materials (Shape-memory and super-elastic alloys), etc.

Light Metals
Aluminum plates / Extruded aluminum products / Casting products / Forged products / Processed light metal
products, etc.

5

Furukawa Electric Group Sustainability Report 2014: Web version

Services and Others
Logistics / Information processing service / Software development / Service business (real-estate leasing,hydraulic power generation and so on), etc.

Global Network

6

Furukawa Electric Group Sustainability Report 2014: Web version

R&D Laboratories, developer and producer

FETI: Furukawa Electric Instituteof Technology (Hungary)
http://www.furukawa.co.jp/kenkai/en
g/profile/feti.htm- Simulation development- Algorithm development- Process optimization

Metal ResearchLaboratories (Nikko)

OFS Labs. (USA)SuperPower (USA)

http://www.furukawa.co.jp/kenkai/eng/profile/ofs.htm

http://www.furukawa.co.jp/kenkai/eng/profile/superpower.htm- Fibers- Components- 2G HTS wir

Power & System
Laboratories (Chiba)

Polymer Materials R&D
Laboratories (Hiratsuka)

FITEL Photonics
Laboratories (Chiba)

Power & System
Laboratories (Hiratsuka)
Automotive System & Device
Laboratories(Hiratsuka)

7

Yokohama R&D
Laboratories (Yokohama)Furukawa Electric Group Sustainability Report 2014: Web version

Business Field

Telecommunication
Optical communication is an advanced technology that meets the needs of thecommunication age, Furukawa Electric provides diversified support for
information-oriented society.
We are living in an age of global communication. Currently, the Internet Links the entire world, allowing
information from overseas to be obtained in real time, not only in offices but also at home. In this advanced
information-oriented society, optical communication systems are a key technology for enabling people to access
important information easily. Furukawa Electric is firmly supporting an ideal base for communication by providing
various technologies and products that realize the "FTTH" project, in which optical fiber networks are provided tohomes.
Telecommunication Products
http://www.furukawa.co.jp/english/seihin/it.htm

Electronics
Ever-evolving Semiconductors and their Peripheral Technologies Amplify
New Possibilities for the Electronics Industry.
Semiconductors are the basis on which electronic products are continually decreasing in size, and increasing infunctional capability at a rapid pace. In LSIs, several hundred thousand to tens of millions of electronic
components are incorporated on a chip in an area of several square mm, to process large amounts of information.
In the field of semiconductors, Furukawa Electric has developed many products ranging from compound
semiconductors to complete devices. It has also provided various other products that are densely mounted in theperiphery of semiconductors; reflow ovens for mounting these products; and heat pipes essential for coolingmicroprocessors. Each of these products is backed by reliable, established technologies.

8

Furukawa Electric Group Sustainability Report 2014: Web version

Electronics Products
http://www.furukawa.co.jp/english/seihin/electronics.htm

Automobile
Themes Are Safety, Comfort, and Harmony with Environments. Furukawa Is Challenging
Transportation Possibilities Using Total Technologies.
In the field of transportation including automobiles, trains, ships, airplanes, and H II rockets, Furukawa Electric
combines its proprietary material, electronics, and mechatronics technologies to develop various products
forming comfortable transportation environments. In particular, in the field of automobiles, we offer various
electronic components and aluminum body materials including wire harnesses. Furthermore, we are challenging
advanced technologies such as ITS systems and has established a firm status as an indispensable supplier forthe automobile industry.
Automobile Products
http://www.furukawa.co.jp/english/seihin/car.htm

EnergyUsing Total Technologies to Construct Advanced Power Networks While Meeting theNeeds for Energy Saving and Environmental Preservation
Few things are as essential for our daily lives and industries as electric power. Furukawa Electric has been
meeting the increasing electric power demand through "power transmission systems" and "power distribution
cables". We are also actively responding to the demands of the times for resource saving and environmental
preservation. Furukawa is contributing to society by providing various leading-edge technologies such as
superconductors and solar generation systems, which are the focus of wide spread attention as energy sources
for the next generation.
Energy Products
http://www.furukawa.co.jp/english/seihin/energy.htm

Construction
Unifying Advanced Material and Processing Technologies Together While Creating
Amenity Environments for Cities, Buildings, and Housings
What is a comfortable space? Whether it is required in a city or a building, constructing such a space requires
correct perspective and advanced technologies for achieving ideals. While applying the accumulated
technologies, Furukawa Electric has been developing various products supporting comfortable lives. Our
objective for pursuing harmony between the functions of peoples' lives and environments is found in each of ourproducts ranging from construction materials through wire materials and fire prevention products to housing
facilities.
Construction Products
http://www.furukawa.co.jp/english/seihin/construction.htm

9Furukawa Electric Group Sustainability Report 2014: Web version

Material
Constant Challenges to Material Renovation and Development of New Materials Are
Facilitating Unlimited Extension of Applications in Every Industry.
Over 120 years since its establishment, Furukawa Electric has been constantly offering advanced materials
ranging from copper and aluminum materials to wires and cables, as well as various related materials. Constantchallenges to material innovation are facilitating creation of materials with new potentiality and unlimited
extension of applications from familiar products to the high technology field. These materials dramatically change
our lives and the foundation of the industries.
Material Products
http://www.furukawa.co.jp/english/seihin/material.htm

10Furukawa Electric Group Sustainability Report 2014: Web version

Key Indicators(Years ended March 31)

Net Sales

Operating income (loss)

Operating income (loss)(Ratio to net sales)

Net income (loss)

Net income per common share

Return on equity

Cash flows(note) Shareholders' equity excludes minority

interest and gain and loss on deferred hedge.

11

Furukawa Electric Group Sustainability Report 2014: Web version

AT A GLANCE
Net sales by Main Business Segment (Consolidated, fiscal year 2014)

Conventionally sized ITLA (top)and micro ITLA (bottom)(note) Figures excludes intersegment transactions

Telecommunications
Optical Fiber and Cable
Japan: We have achieved effects from structural reforms by merging production bases.
Europe and United States: Cuts to fixed costs during the second half of FY2014 made a full contribution andthe market is continues to move towards recovery.

Brazil: LAN solutions and fiber optic business expanded.

Optical Parts and Networking Equipment
Japan, China and United States: Demand for new products (ITLA/ integrated signal light sources) to
supply next-generation high-speed telecommunications (digital coherent telecommunications) expanded.

Factory of FISA (Brazil)

Conventionally sized ITLA (top)and micro ITLA (bottom)

12Furukawa Electric Group Sustainability Report 2014: Web version

Net Sales

Operating Income

Energy and Industrial Products
Ultrahigh-Voltage Transmission Cables
Japan: Submarine power cables for offshore wind power generation were developed.
China: A Chinese subsidiary improved its cost structure and promoted sales expansion in overseas markets.

Industrial Products
Europe: Improvements were achieved through the sale of unprofitable Russian bases, etc.
Japan: Strong demand is expected to continue for cableprotecting conduit line materials in mega-solar
applications.

Shenyang Furukawa Cable Co., Ltd.
(China)Net Sales

Laying a submarine transmission cable

Operating Income13Furukawa Electric Group Sustainability Report 2014: Web version

Electronics and Automotive Systems
Automotive Parts
Japan: Despite an expected fall in demand caused by the increase in consumption tax and other factors, strong
sales of wire harness for new models are expected to cover the impact of reduced production in Japan.
Overseas: We have begun to achieve the potential of new wire harness bases in Asia and Mexico and promoted
an expansion in SRC sales in South America.

Wire Harness factory (China)

SRC (Steering Roll Connector)

Net Sales

Operating IncomeMetals
Copper foil
Japan: Conditions are expected to improve after realizing the effects of production base centralization andcompleting the transfer of manufacturing to Taiwan.
Taiwan: Battery foil business is expected to grow, particularly in automotive applications, and circuit foil volumes
are expected to recover.

Copper strips
Japan: A fall in operating income of 3.6 billion yen is forecast as a result of the impact of snow damage inFebruary at Nikko Works. We plan to achieve complete restoration by the end of the year.

14

Furukawa Electric Group Sustainability Report 2014: Web version

Electrodeposited copper foil

Net Sales

Furukawa Electric Copper Foil
Taiwan Co., Ltd.

Operating Income

Light Metals
Rolled Aluminum Products
Only the first-half operating income was recorded in FY2014 because of the inauguration of UACJ in October
2013. In the second half of FY2014, operating income was recorded as “equity in net income of affiliates” under
non-operating income.

Net Sales

Operating Income(note) Since the second half of fiscal 2014 and fiscal 2015 it has been recorded in equity in net incom of affiliates

15Furukawa Electric Group Sustainability Report 2014: Web version

Non-financial Key Indicators

Number of Group Employees by Region (Consolidated)

Gender ratio of Employees (Furukawa Electric)

16

Furukawa Electric Group Sustainability Report 2014: Web version

Gender ratio of Managers (Furukawa Electric)

Employee turnover rate by gender (Furukawa Electric)

Environmentally friendly products as a percentage of sales

17Furukawa Electric Group Sustainability Report 2014: Web version

CO2 emissions(note 1) The amount of power consumed is calculated using the emission factor of each power company.
(note 2) Assuming that hydroelectric power produces zero CO2 emissions.
(note 3) UACJ Corporation was transferred to other related companies in fiscal 2014 and so the figures for past fiscal years
have been retroactively adjusted.

Energy consumption(note) UACJ Corporation was transferred to other related companies in fiscal 2014 and so the figures for past fiscal years
have been retroactively adjusted.

Processing volume of non-recyclable waste(note) UACJ Corporation was transferred to other related companies in fiscal 2014 and so the figures for past fiscal years
have been retroactively adjusted.

18