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Business

Kawasaki Heavy broadening robot business to medical field

TOKYO -- Kawasaki Heavy Industries is looking to charge up its robot business by expanding its offerings into the medical and pharmaceutical fields, particularly for use in hospitals as well as rehabilitation and nursing care facilities.

     The company sees huge potential demand for such robots, which can ease the pressure on medical and health care providers beset by chronic staff shortages,

     "This robot is easy to wash because it has smooth surfaces void of bumps and grooves and offers high water-proof performance," said Yasuhiko Hashimoto, general manager of the Robot Division at Kawasaki Heavy's Precision Machinery Company.

     Hashimoto, who also manages the company's robot business center, showed off a silver robotic arm used to process highly potent active pharmaceutical ingredients, such as those used in anti-cancer drugs.

     With plans to advance its technologies to commercialize surgery assistant robots, Kawasaki Heavy has set its sights on growing its robot business by at least 15% a year and making it a main growth driver.

     "By 2030, we see pharmaceutical and medical robots alone generating 100 billion yen in sales," Hashimoto said.

Profits of precision

The company sees its precision machinery division boosting sales by 14% to 140 billion yen ($131.96 million) for the current year ending in March. Operating profit is projected to climb 15% to 12 billion yen. Robots are expected to make up about 50 billion yen of the division's sales.

     Even stronger earnings gains are anticipated next fiscal year, with Kawasaki Heavy setting targets of 190 billion yen in sales and 22 billion yen in operating profit for its precision machinery business. Growing Chinese demand for factory robots amid surging labor costs is expected to make these goals attainable.

     Since many of its products can greatly benefit from economies of scale, the division will likely replace aerospace as Kawasaki Heavy's breadwinner in the future.

Lackluster share performance

Kawasaki Heavy forecasts that group net profit for the current fiscal year will climb 10% to a record 42.5 billion yen, driven by strong demand for the passenger aircraft components it manufactures for Boeing in addition to robots.

     Yet its shares are trading 6% lower than they were at the end of last year. Its stock price also lags behind Mitsubishi Heavy Industries and other industry peers. The company attributes the weak performance to growing business uncertainty stemming from projected earnings declines at its motorcycle and vehicle businesses for this fiscal year.

     "Our diverse operations, spanning from aerospace to motorcycles and engines, mean different businesses tend to smooth out booms and slumps," President Shigeru Murayama said.

     But some investors are concerned that this emphasis on diversity may cause Kawasaki Heavy to shortchange investments in the growth area of robots. The company must set clear priorities and communicate them well to investors to lift its stock price.

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