(Date:  July, 2007)

According to Mr. Taniguchi, he does a lot of footwork as an engineer. In the same way, his sales personnel have to have a firm grasp over everything from the basic technology to the final production and be able to immediately make price and delivery commitments. The Company says sales represent the development of new applications for its propriety technology and the provision of information as proposals by development engineers. They specifically approach the development divisions of customers involved with technology. In particular, patent application information is a valuable source of information for finding precious new customers. Nippon Ceramic employs about 300 workers of which one-third are development engineers.

Sensor components are indispensable for a safe, comfortable life. Infrared and ultrasonic sensors are being employed in automatic doors, refrigerators, air-conditioners and automatic switches for lighting. These enable electricity costs to be reduced 30 to 50 percent. Further, the Company already holds over a 90 percent share of the market for security-use warning devices for illegal entry. The environments surrounding sensors are rapidly evolving. It is necessary to constantly lay the groundwork for new technology.

The Company plans to focus on automobile sensors in the future. If succeeding in automobiles, it will be able to apply them to home use by that arrangement. The sensors already mounted in luxury cars include current sensors (batteries and transformers for hybrid cars), infrared sensors (car air-conditioners), ultrasonic sensors (collision prevention), gas sensors, etc. According to Mr. Taniguchi, the global market for luxury car sensors is about 7 million units a year worth 300 billion yen. At the present time, sensors are mounted in 5 percent of cars, but the Company is aiming at 50 percent for the future. It hopes to become more deeply involved with the automobile industry with its high demands on technology.

Current Sensor Application

Nippon Ceramic, as explained above, started exporting to the U.S. from the late 1970s, set up a liaison office there in the 1990s, and established a local subsidiary in 1998 (California). Since the Company handles yearly transactions, it is able to plan production. The Company's engineers travel to the U.S. to make the rounds of its customers. To handle business with Europe, the Company acquired a British sensor factory in 1994, which it currently uses as a sales base for Europe.

In business with China, back in the mid-1980s, the Company set up an electronic components factory in Shanghai at the request of the Chinese government as a 50 percent joint venture with the Shanghai Institute of Physics - an organization under China's Academy of Science. The plant is currently assembling and selling infrared sensors. In 2006, the 20-year joint venture agreement ended, but the Company was asked to extend its assistance.It consequently raised its equity stake to 55 percent and is continuing to run the factory. On the other hand, in 1994, the Company set up a 50 percent equity optical sensor factor in Kunshan city in Jiangsu province. In addition, at the request of Japanese ventures in China, it has a converter and inverter ferrite plant in Kunshan city and an electronic component factory in Xiamen, Fujian province. Business is being run from a Hong Kong subsidiary set up in 1998. As a hedge against the country risk of China, the Company also set up a production plant in the Philippines in 2001.

According to Mr. Taniguchi, if personnel costs rise above 10 percent of production costs, it is smarter to produce in Japan, but from a global perspective, it is necessary to consider shifting factories overseas.

(By: Chieko Ogaki, Business Services Center, JETRO Headquarters)