Technical Capabilities

We believe technical development will be the most important driving force in generating sales of 200 billion yen or more. For manufacturers, technical development is the source for creating value and the lifeline of the enterprise. HORIBA has continued to grow without halting the value creating cycle by maintaining R&D investment at 5-7% of sales during times when earnings are favorable and when they are not. Even in a harsh business environment, such as the current down cycle, we will not alter our policy. Technical capability is like physical strength, it must be maintained to stay in top condition. If a person neglects physical training, even temporarily, his physical strength will quickly fail and the person will be unable to draw upon his power when needed.

A unique point of HORIBA’s technology development is that the basic technology in analysis of four forms of matter (solids, liquids, gases, and powders) is utilized in all five business segments. We believe there are still unexploited applications within our five business segments. We plan to pursue development of these new applications and propose new business models. Our potential should continue to expand when we collaborate with our customers in technology development.

The acquisition of the present HORIBA ABX S.A.S., in France, in 1996 has allowed HORIBA to make a full-scale entry to the medical-diagnostic instruments and systems business. Using technology developed and improved by HORIBA, Ltd., and the proprietary technology and marketing strength of HORIBA ABX S.A.S., sales in this segment have grown to 20% of total HORIBA sales. In the Scientific Instruments & Systems segment, HORIBA acquired the present HORIBA Jobin Yvon S.A.S., in France, in 1997. By synergizing HORIBA Jobin Yvon’s strong technologies with those of HORIBA, Ltd., we are accelerating product launches into new markets (food, drugs, and cosmetics), and both businesses are now contributing to HORIBA’s balanced management with new product lifelines.

We will continue proactive investment in product development, including improving existing products, developing new technologies and new products, engaging in M&A, and expanding operations into new business fields. Creating high value added technologies that combine HORIBA’s existing technologies with new ones will ensure dominance in the market and pass on more advanced technologies to the next generation.

The current worldwide economic crisis is likely to bring significant changes to many industries. For example, the automotive industry is developing vehicles that use alternative energy sources such as electricity, fuel cells, or bio fuels. Up to now, HORIBA has supported the “development of engines” in the automotive field. Going forward, we define this as meaning we have to be ready and able to satisfy a wide range of development needs of “all industries that are related to automotive development.” HORIBA is already well equipped with analytical and measurement technologies needed for such development. We have also accumulated many practical accomplishments by responding to application needs in a variety of industries. We think that there are great opportunities to demonstrate our high level of flexibility, which is our ability to apply our advanced technical know-how to product development.