Robot maker Fanuc running full-tilt amid China orders
New $550m factory to double production, but heavy capex could squeeze profits
A Fanuc factory.
TOKYO — Thanks largely to rising demand in China, Japanese robot maker Fanuc is on a steady growth path, expecting a 36.5% rise in group operating profit in the current fiscal year through March, to 209.1 billion yen ($1.83 billion) from a year before. But Chairman and CEO Yoshiharu Inaba is eager to expand further, especially in Europe.
On Oct. 26, the Yamanashi Prefecture-based company announced its latest earnings for the July-September period at its headquarters in Oshino, west of Tokyo. The figures show how well the company’s three business pillars — numerical control devices, robots and other industrial equipment — are being integrated to generate growth.
Not enough capacity to make more
“Production is at full capacity so sales are capped. We can’t make any more,” an upbeat Inaba said as he described the company’s industrial robot operations at the earnings announcement. In the latest quarter, Fanuc’s sales of industrial robots rose about 20% from the same period last year, to 55.1 billion yen.
Demand is growing thanks to China, which is increasingly investing in automation. With current capacity, it is difficult to meet the greater demand, Inaba said, adding that production and sales “have plateaued and will stay there” for some time. Though the company has been trying to boost capacity, such efforts are “a drop in the bucket,” he said.
Fanuc is betting on a new 63 billion yen ($550 million) factory it plans to build in Ibaraki Prefecture, northeast of Tokyo, in 2018. With the new factory, monthly robot production is expected to nearly double from the current level to 11,000 units.
“Only after the new plant begins operations will we be able to grow production substantially,” Inaba said.
Not only robots but a wide variety of mainstay Fanuc products are selling well in China, including machine tools and numerical control devices, with which Fanuc controls the top share worldwide.
Inaba maintains a relatively positive outlook for the Chinese economy: “The level of investment in infrastructure such as railways is very high, and local automakers are actively investing more than ever before.”
In Europe, Fanuc’s industrial robots are spreading among automakers, eating into the hitherto dominance of local robot makers. “[Fanuc’s] market share in Europe will grow further and further,” Inaba said.
Source: MASASHI ISAWA, Nikkei staff writer
Date: November 2, 2017
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