OSAKA -- Nippon Electric Glass seeks to boost its operating profit margin to 10% by the year ending December 2018, up from about 3% last year, President Motoharu Matsumoto told The Nikkei.
The Japanese manufacturer aims to achieve the target by expanding sales of glass fibers used in autoparts.
The company's glass fiber business boasts a 30% global market share and a 2014 operating margin of over 10%. Nippon Electric sees division sales hitting 60 billion yen ($492 million) this year, but Matsumoto vowed to "grow that figure to 100 billion yen in short order." The company is looking into boosting production capacity at its Malaysia factory and adding new facilities in the U.S. and Europe.
Sales of glass for liquid crystal display panels -- the company's core business -- are expected to stay at roughly 150 billion yen. About 40% of the division's glass will be produced overseas after production begins at the end of this year at a new factory in the southeastern Chinese city of Xiamen, Fujian Province.
"We may even take our overseas production up another notch" to lower fixed costs, Matsumoto said.
Nippon Electric also will boost research and development. R&D expenses equaled 2.9% of sales last year, and Matsumoto intends to "bring that figure up to 5% as we expand development on our glass fiber products."
The company's operating profit margin has soared before, reaching 30% amid a booming market for LCD televisions. But that market has waned, and Nippon Electric expects margins of around 5% for 2015.