Hosokawa Micron Corporation 6277

ホソカワミクロン

Recent Updates

2021-11-15

Dividend hike

2021-11-15

Full-year FY09/21 flash update

2021-10-01

Closure of Hosokawa Micron (Thailand) Co., Ltd.

Get in touch

1-9, Shodaitajika, Hirakata-shi, Osaka 573-1132, Japan

https://www.hosokawamicron.co.jp/

072-855-2225

Summary

Hosokawa Micron is a global leader in a niche area: fine powder processing equipment. The company estimates that it has a global market share of approximately 30%, including sales and engineering.

Machinery

Key dates

2020-12-25

Coverage initiation

Full Report

2021-11-15

Full-year FY09/21 flash update

Executive summary

Business overview

Hosokawa Micron is a global leader in a niche area: fine powder processing equipment. The company estimates that it has a global market share of approximately 30%, including sales and engineering. Fine powders are required for a broad range of fields and applications (from wheat flour to convenience foods, foundations and other cosmetics, chemicals, resins, pharmaceuticals, lithium-ion battery materials, magnetic and other electronic materials, minerals, materials for automotive parts, and construction materials). The equipment for processing these fine powders encompasses mills*¹, classifiers*², mixers*³, bag filters*⁴, dryers*⁵, agglomerators*⁶, particle design*⁷, and measuring equipment*⁸. The global market for general powder-processing equipment is worth around JPY1.8tn. Hosokawa Micron serves a sub-market (high-value-added sales, engineering, and aftersales of systems for producing fine powder processing equipment), which Shared Research estimates to have a market size of around JPY160bn.

*¹Mills: Machines that apply energy in the form of hammers or jets to convert solid materials to powders
*²Classifiers: Machines that separate particles by size
*³ Mixers: Machines that combine different powders into consistent mixtures
*⁴ Bag filters: Machines that collect powders by separating airborne particles from gases
*⁵ Dryers: Machines that produce dry powder by applying heat to evaporate moisture or organic solvent
*⁶ Agglomerators: Machines that apply pressure to create particles, granules or flakes of a desired size
*⁷ Particle design: Machines that combine ultrafine powders to create composite particles with new physical characteristics
*⁸ Measuring equipment: Equipment that measures fluidity, the amount of coarse powder, wettability, and electrical properties such as electric charge

In FY09/20, Hosokawa Micron had sales of JPY53.5bn (-3.4% YoY) and recurring profit of JPY5.0bn (-17.9% YoY). The Powder Processing Equipment business accounted for 75.5% of sales and the Blown Film business for 24.5%. In the Powder Processing Equipment business, the company sells standalone powder-processing equipment and systems and provides services (engineering, aftersales, and toll processing of powder). The Blown Film business was originally a main business of Alpine, a German firm Hosokawa Micron acquired. In this business, the company produces high-performance film production equipment (that uses the inflation method to blow air into extruded plastics) and conducts system engineering.

In the Powder Processing Equipment business, the company has the world’s largest lineup of powder-processing equipment. From this portfolio, Hosokawa Micron helps customers determine powder-handling processes, select individual equipment, and set operating conditions. The company also provides system engineering, including overall control services. In addition, Hosokawa Micron offers consulting services based on its expertise in the production of high-performance powders, from micron-level milling and classification to the combination of powders. At its test centers, the company has developed and accumulated expertise on the production of powders tailored to customer specifications. Hosokawa Micron also has the engineering capabilities to build the fine powder processing systems customers need. The company has continued to develop fine powder processing technologies since its establishment in 1916. Over this time, the company has gained a substantial technological edge over competitors. Hosokawa Micron has more than 25,000 customers, including most companies that require high-performance powders. Shared Research understands this background has contributed to the company’s high level of profitability (an average recurring profit margin of 11.1% in the three years to FY09/20, outpacing the 7.9% average for the top 50 Japanese companies in the machinery sector).

Hosokawa Micron proactively acquired global companies in the 1980s, buying five overseas manufacturers of fine powder processing equipment whose scale of business surpassed its own. In this way, the company grew into a global leader in a niche area of fine powder processing equipment, with a global share of around 30% of that market. In FY09/20, overseas sales accounted for 73.9% of the total. By region, in FY09/20 Europe accounted for 37.8% of sales, Japan for 26.1%, the Americas for 19.1%, and Asia and other regions for 16.9%. The weighting toward Europe is due to Hosokawa Micron’s acquisition of European companies: mixer manufacturers Nauta Mix (Netherlands, bought in 1982) and Vrieco Zelhem (Netherlands, 1983) and a manufacturer of integrated fine powder equipment, Alpine (Germany, 1987). In the US, Hosokawa Micron acquired US Filter systems, which mainly produces mills and bag filters, and a US Filter group company, MikroPul (US, 1985). Hosokawa Micron sees the small percentage of sales in the US and Asia (relative to the macroeconomic scale of these regions) as an issue, which it plans to address by reinforcing sales in these regions.

To date, Hosokawa Micron has used its technological expertise to develop numerous products. In the area of mills and classifiers, examples include the Micron Mill and Super Micron Mill ultrafine mills, which grind powder down to the micron level. The Micron Separator classifies powder to a given range of particle diameters, improving the performance of photocopier toner. Other developments include the Mechano Fusion system and Nobilta (particle design systems for composing powders with different characteristics). These offerings are used with materials used in the electrodes of lithium-ion batteries, other electromagnetic materials, chemicals, and pharmaceuticals.

Customers for fine powder processing equipment span a wide range of manufacturing industries, including chemicals, resins, food products, pharmaceuticals, electronic materials, materials for automotive components, and construction materials. Accordingly, the company’s operating performance closely tracks private-sector capital expenditure. Performance is particularly sensitive to the results of Japanese manufacturers of electronic materials, such as rechargeable battery materials (for the electrodes of lithium-ion batteries) and magnetic materials such as Neodymium.

In the Blown Film business, the company manufactures equipment for producing high-performance films, ranging from mono-layer plastic for trash bags and shrink-wrapping materials to multi-layer films used in packaging materials for products sold online, food product packaging, and protective films for electronics. This equipment uses the inflation method to produce these high-performance films. Recent years have seen the development of multi-layer films with strong shielding properties, and the rapid expansion of e-commerce has led to growth in demand for film.

Earnings trends

In full-year FY09/21, orders rose 20.9% YoY to JPY69.7bn; sales rose 13.6% YoY to JPY60.8bn; order backlog rose 36.7% YoY to JPY37.2bn; operating profit increased 33.0% YoY to JPY6.4bn; recurring profit was up 31.3% YoY to JPY6.6bn; and net income attributable to owners of the parent increased 41.7% YoY to JPY4.7bn. Sales and profit improved in both the Powder Processing Equipment and Blown Film segments. The average exchange rates over the period were JPY107.50/USD (JPY107.88/USD in FY09/20) and JPY128.50/EUR (JPY120.75/EUR).

For full-year FY09/22, the company forecasts sales of JPY64.0bn (+5.3% YoY), operating profit of JPY5.6bn (-12.1% YoY), recurring profit of JPY5.6bn (+14.8% YoY), net income attributable to owners of the parent of JPY4.2bn (-10.6% YoY), and a year-end dividend of JPY70 per share (the company implemented a 2-for-1 stock split on October 1, 2021; a dividend of JPY135 per share was distributed in FY09/21, before the split). These forecasts are based on expected average foreign exchange rates of JPY108/USD and JPY130/EUR. As the leading company in powder technology, Hosokawa Micron strives to provide new technologies and system engineering capabilities to suit customer needs and expand its material business (including cosmetics and hair-growth agents that leverage the company's proprietary nanoparticle composition technology), and further enhance the strength of its brand in the Blown Film segment. The company also aims to keep improving profitability by continuously introducing new products and systems with high added value.

FY09/24 will be the final year of the company’s 17th three-year management plan. The company has five strategies under this plan: strengthen intragroup collaboration to expand the global sales network; centralize and share information through digital transformation (DX); application and market-oriented marketing and product development; introduce work style reforms and cultivate human resources; and push forward with ESG/SDGs initiatives, contributing further to society and environmental protection.

Strengths and weaknesses

Strengths
World-leading levels of fine-powder processing technology and technical consulting
Engineering capabilities backed by a diverse range of fine powder processing equipment
Global M&A expertise accumulated through five major acquisitions in the 1980s

Weaknesses
Delayed business development in the US and Southeast Asia
Low name recognition in B2C businesses (cosmetics and hair-growth agents)
Missing investment opportunities due to excessive prioritization of a robust financial structure

Key financial data

Income statement		FY09/12	FY09/13	FY09/14	FY09/15	FY09/16	FY09/17	FY09/18	FY09/19	FY09/20	FY09/21	FY09/22
(JPYmn)		Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Est.
Sales		40,698	44,950	48,516	47,342	44,664	49,519	56,852	55,381	53,497	60,754	64,000
	YoY	12.5%	10.4%	7.9%	-2.4%	-5.7%	10.9%	14.8%	-2.6%	-3.4%	13.6%	5.3%
Gross profit		14,597	15,642	16,534	16,304	15,928	18,033	20,966	20,075	19,357	21,564
	YoY	9.8%	7.2%	5.7%	-1.4%	-2.3%	13.2%	16.3%	-4.2%	-3.6%	11.4%
	Gross profit margin	35.9%	34.8%	34.1%	34.4%	35.7%	36.4%	36.9%	36.2%	36.2%	35.5%
Operating profit		3,907	3,386	3,369	2,450	3,657	5,045	6,541	5,918	4,791	6,370	5,600
	YoY	41.9%	-13.3%	-0.5%	-27.3%	49.3%	38.0%	29.7%	-9.5%	-19.0%	33.0%	-12.1%
	Operating profit margin	9.6%	7.5%	6.9%	5.2%	8.2%	10.2%	11.5%	10.7%	9.0%	10.5%	8.8%
Recurring profit		3,865	3,520	3,416	2,646	3,718	5,219	6,656	6,099	5,007	6,574	5,600
	YoY	43.6%	-8.9%	-3.0%	-22.5%	40.5%	40.4%	27.5%	-8.4%	-17.9%	31.3%	-14.8%
	Recurring profit margin	9.5%	7.8%	7.0%	5.6%	8.3%	10.5%	11.7%	11.0%	9.4%	10.8%	8.8%
Net income		2,208	2,250	2,294	2,524	2,530	3,572	4,205	4,182	3,317	4,699	4,200
	YoY	33.7%	1.9%	2.0%	10.0%	0.2%	41.2%	17.7%	-0.5%	-20.7%	41.7%	-10.6%
	Net margin	5.4%	5.0%	4.7%	5.3%	5.7%	7.2%	7.4%	7.6%	6.2%	7.7%	6.6%
Per-share data (split-adjusted; JPY)
Shares issued (year-end; '000)		17,231	17,231	17,231	17,231	17,231	17,231	17,231	17,231	17,231	17,231
EPS (JPY)		133.4	136.0	138.7	150.8	151.1	214.5	256.8	258.1	205.0	290.1	259.2
EPS (fully diluted; JPY)		133.3	135.7	138.3	150.3	150.6	213.6	255.9	257.2	204.2	289.2
Dividend per share (JPY)		18.0	24.0	30.0	30.0	35.0	35.0	55.0	55.0	55.0	67.5	70.0
Book value per share (JPY)		1,250	1,550	1,700	1,807	1,708	2,070	2,271	2,270	2,500	2,829
Balance sheet (JPYmn)
	Cash and cash equivalents	6,126	8,237	9,915	10,017	12,642	17,446	20,087	15,867	15,445	19,943
Total current assets		26,226	27,282	30,701	30,500	30,162	37,122	41,074	38,623	40,557	47,189
Tangible fixed assets		14,623	17,583	18,662	17,480	15,528	17,086	18,012	18,868	21,681	22,901
Investments and other assets		1,450	1,338	1,849	2,258	1,845	2,289	2,828	2,317	2,347	2,295
Intangible assets		318	270	254	475	343	341	301	303	595	734
Total assets		42,618	46,474	51,467	50,714	47,880	56,840	62,216	60,113	65,180	73,119
	Short-term debt	396	685	701	1,724	987	294	460	142	426	114
Total current liabilities		14,287	12,912	14,327	14,158	13,193	16,656	19,191	17,641	18,024	21,562
	Long-term debt	3,418	2,854	3,344	1,802	1,902	1,657	1,196	1,040	1,772	1,310
Total fixed liabilities		7,625	7,868	8,946	6,233	5,996	6,217	5,725	5,639	6,580	5,617
Total liabilities		21,913	20,780	23,273	20,391	19,190	22,874	24,971	23,281	24,605	27,180
	Shareholders' equity	20,689	25,652	28,131	30,254	28,602	33,860	37,215	36,730	40,457	45,849
Total net assets		20,705	25,694	28,193	30,323	28,690	33,965	37,299	36,832	40,575	45,939
Total interest-bearing debt		3,814	3,539	4,045	3,526	2,889	1,951	1,656	1,182	2,198	1,424
Cash flow statement (JPYmn)
Cash flows from operating activities		1,243	4,206	3,567	2,492	4,208	7,257	5,351	3,191	3,990	6,087
Cash flows from investing activities		-972	-2,271	-2,244	-1,233	659	-1,414	-1,278	-3,048	-3,877	-2,613
Cash flows from financing activities		-457	-825	-82	-1,273	-1,158	-2,739	-1,119	-1,928	94	-1,687
Financial ratios
ROA (RP-based)		9.5%	7.9%	7.0%	5.2%	7.5%	10.0%	11.2%	10.0%	8.0%	9.5%
ROE		11.0%	9.7%	8.5%	8.6%	8.6%	11.4%	11.8%	11.3%	8.6%	10.9%
	Equity ratio	48.5%	55.2%	54.7%	59.7%	59.7%	59.6%	59.8%	61.1%	62.1%	62.7%
	Total asset turnover	99.7%	100.9%	99.1%	92.7%	90.6%	94.6%	95.5%	90.5%	85.4%	87.9%
	Net margin	5.4%	5.0%	4.7%	5.3%	5.7%	7.2%	7.4%	7.6%	6.2%	7.7%

Source: Shared Research based on company data
Note: Per share data above reflect a 2-for-1 stock split on October 1, 2021, and a 1-for-5 reverse stock split on April 1, 2017.

Recent updates

Dividend hike

2021-11-15

On November 12, 2021, Hosokawa Micron Corporation announced earnings results for full-year FY09/21, and an increased dividend from surplus.

Dividend from surplus

The company decided to increase the year-end dividend for FY09/21 by JPY25 per share, from its initial forecast of JPY55 per share to JPY80 per share, considering that net income attributable to owners of the parent reached a new record high in FY09/21. Including the interim dividend of JPY55 per share, the annual dividend will be JPY135 per share (JPY110 per share in FY09/20).

Closure of Hosokawa Micron (Thailand) Co., Ltd.

2021-10-01

Hosokawa Micron Corporation has announced the closure of Hosokawa Micron (Thailand) Co., Ltd.

Hosokawa Micron (Thailand) has been unable to operate as normal due to the prolonged impact of the COVID-19 pandemic. As a result, the company has decided to close the subsidiary. The company's sales activities in the region will continue at Hosokawa Micron (Malaysia). Hosokawa Micron (Thailand) will cease sales activities at the end of September 2021, and the subsidiary will close at the end of December 2021.

The company says the impact of this closure on the results for FY09/21 is negligible.

Trends and outlook

Quarterly trends and results

Cumulative		FY09/19				FY09/20				FY09/21
(JPYmn)		Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4
Sales		14,086	28,299	40,655	55,381	13,170	26,630	38,097	53,497	13,729	27,631	43,521	60,754
	YoY	10.9%	4.2%	-2.4%	-2.6%	-6.5%	-5.9%	-6.3%	-3.4%	4.2%	3.8%	14.2%	13.6%
Gross profit		5,124	10,296	14,754	20,075	4,727	9,305	13,452	19,357	4,840	9,762	15,431	21,564
	YoY	6.0%	2.9%	-5.2%	-4.2%	-7.7%	-9.6%	-8.8%	-3.6%	2.4%	4.9%	14.7%	11.4%
	Gross profit margin	36.4%	36.4%	36.3%	36.2%	35.9%	34.9%	35.3%	36.2%	35.3%	35.3%	35.5%	35.5%
SG&A expenses		3,592	7,017	10,629	14,157	3,788	7,435	10,858	14,566	3,531	7,210	11,109	15,193
	YoY	7.4%	2.2%	0.3%	-1.9%	5.5%	6.0%	2.2%	2.9%	-6.8%	-3.0%	2.3%	4.3%
	SG&A ratio	25.5%	24.8%	26.1%	25.6%	28.8%	27.9%	28.5%	27.2%	25.7%	26.1%	25.5%	25.0%
Operating profit		1,531	3,279	4,125	5,918	939	1,869	2,593	4,791	1,308	2,552	4,322	6,370
	YoY	2.8%	4.6%	-16.9%	-9.5%	-38.7%	-43.0%	-37.1%	-19.0%	39.3%	36.5%	66.7%	33.0%
	Operating profit margin	10.9%	11.6%	10.1%	10.7%	7.1%	7.0%	6.8%	9.0%	9.5%	9.2%	9.9%	10.5%
Recurring profit		1,580	3,367	4,256	6,099	999	2,019	2,784	5,007	1,393	2,695	4,517	6,574
	YoY	3.9%	8.0%	-15.7%	-8.4%	-36.8%	-40.0%	-34.6%	-17.9%	39.4%	33.5%	62.2%	31.3%
	Recurring profit margin	11.2%	11.9%	10.5%	11.0%	7.6%	7.6%	7.3%	9.4%	10.1%	9.8%	10.4%	10.8%
Net income		1,122	2,366	2,989	4,182	714	1,220	1,823	3,317	1,030	1,929	3,178	4,699
	YoY	46.3%	22.5%	-8.6%	-0.5%	-36.4%	-48.4%	-39.0%	-20.7%	44.3%	58.1%	74.3%	41.7%
	Net margin	8.0%	8.4%	7.4%	7.6%	5.4%	4.6%	4.8%	6.2%	7.5%	7.0%	7.3%	7.7%
Quarterly		FY09/19				FY09/20				FY09/21				FY09/21
(JPYmn)		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	% of Est.	FY Est.
Sales		14,086	14,213	12,356	14,726	13,170	13,460	11,467	15,400	13,729	13,902	15,890	17,233	104.7%	58,000
	YoY	10.9%	-1.7%	-14.7%	-3.1%	-6.5%	-5.3%	-7.2%	4.6%	4.2%	3.3%	38.6%	11.9%		8.4%
Gross profit		5,124	5,172	4,458	5,321	4,727	4,578	4,147	5,905	4,840	4,922	5,669	6,133
	YoY	6.0%	0.1%	-19.8%	-1.6%	-7.7%	-11.5%	-7.0%	11.0%	2.4%	7.5%	36.7%	3.9%
	Gross profit margin	36.4%	36.4%	36.1%	36.1%	35.9%	34.0%	36.2%	38.3%	35.3%	35.4%	35.7%	35.6%
SG&A expenses		3,592	3,425	3,612	3,528	3,788	3,647	3,423	3,708	3,531	3,679	3,899	4,084
	YoY	7.4%	-2.8%	-3.1%	-7.9%	5.5%	6.5%	-5.2%	5.1%	-6.8%	0.9%	13.9%	10.1%
	SG&A ratio	25.5%	24.1%	29.2%	24.0%	28.8%	27.1%	29.9%	24.1%	25.7%	26.5%	24.5%	23.7%
Operating profit		1,531	1,748	846	1,793	939	930	724	2,198	1,308	1,244	1,770	2,048	113.8%	5,600
	YoY	2.8%	6.1%	-53.8%	13.8%	-38.7%	-46.8%	-14.4%	22.6%	39.3%	33.8%	144.5%	-6.8%		16.9%
	Operating profit margin	10.9%	12.3%	6.8%	12.2%	7.1%	6.9%	6.3%	14.3%	9.5%	8.9%	11.1%	11.9%		9.7%
Recurring profit		1,580	1,787	889	1,843	999	1,020	765	2,223	1,393	1,302	1,822	2,057	117.4%	5,600
	YoY	3.9%	11.9%	-53.9%	14.6%	-36.8%	-42.9%	-13.9%	20.6%	39.4%	27.6%	138.2%	-7.5%		11.8%
	Recurring profit margin	11.2%	12.6%	7.2%	12.5%	7.6%	7.6%	6.7%	14.4%	10.1%	9.4%	11.5%	11.9%		9.7%
Net income		1,122	1,244	623	1,193	714	506	603	1,494	1,030	899	1,249	1,521	123.7%	3,800
	YoY	46.3%	6.8%	-53.5%	27.7%	-36.4%	-59.3%	-3.2%	25.2%	44.3%	77.7%	107.1%	1.8%		14.6%
	Net margin	8.0%	8.8%	5.0%	8.1%	5.4%	3.8%	5.3%	9.7%	7.5%	6.5%	7.9%	8.8%		6.6%

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.

By segment (cumulative)			FY09/19				FY09/20				FY09/21
(JPYmn)			Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4
Sales			14,086	28,299	40,655	55,381	13,170	26,630	38,097	53,497	13,729	27,631	43,521	60,754
	YoY		10.9%	4.2%	-2.4%	-2.6%	-6.5%	-5.9%	-6.3%	-3.4%	4.2%	3.8%	14.2%	13.6%
	Powder Processing Equipment		10,282	20,671	30,077	41,060	10,305	20,009	29,116	40,393	10,157	20,760	32,406	45,643
		YoY	7.9%	2.5%	-2.8%	-4.4%	0.2%	-3.2%	-3.2%	-1.6%	-1.4%	3.8%	11.3%	13.0%
	Blown Film		3,803	7,627	10,577	14,320	2,864	6,620	8,981	13,104	3,571	6,871	11,114	15,111
		YoY	20.2%	9.0%	-1.4%	3.1%	-24.7%	-13.2%	-15.1%	-8.5%	24.7%	3.8%	23.8%	15.3%
Operating profit			1,531	3,279	4,125	5,918	939	1,869	2,593	4,791	1,308	2,552	4,322	6,370
	YoY		2.8%	4.6%	-16.9%	-9.5%	-38.7%	-43.0%	-37.1%	-19.0%	39.3%	36.5%	66.7%	33.0%
	Powder Processing Equipment		1,206	2,647	3,552	5,267	1,122	2,008	2,899	4,528	1,149	2,394	4,001	5,992
		YoY	-9.2%	-5.1%	-18.3%	-12.1%	-7.0%	-24.1%	-18.4%	-14.0%	2.4%	19.2%	38.0%	32.3%
	Blown Film		583	1,162	1,408	1,830	117	520	649	1,598	421	718	1,232	1,665
		YoY	38.8%	30.7%	-2.6%	6.0%	-79.9%	-55.2%	-53.9%	-12.7%	259.8%	38.1%	89.8%	4.2%
By segment (quarterly)			FY09/19				FY09/20				FY09/21
(JPYmn)			Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Sales			14,086	14,213	12,356	14,726	13,170	13,460	11,467	15,400	13,729	13,902	15,890	17,233
	YoY		10.9%	-1.7%	-14.7%	-3.1%	-6.5%	-5.3%	-7.2%	4.6%	4.2%	3.3%	38.6%	11.9%
	Powder Processing Equipment		10,282	10,389	9,406	10,983	10,305	9,704	9,107	11,277	10,157	10,603	11,646	13,237
		YoY	7.9%	-2.3%	-12.6%	-8.7%	0.2%	-6.6%	-3.2%	2.7%	-1.4%	9.3%	27.9%	17.4%
	Blown Film		3,803	3,824	2,950	3,743	2,864	3,756	2,361	4,123	3,571	3,300	4,243	3,997
		YoY	20.2%	-0.2%	-20.9%	18.3%	-24.7%	-1.8%	-20.0%	10.2%	24.7%	-12.1%	79.7%	-3.1%
Operating profit			1,531	1,748	846	1,793	939	930	724	2,198	1,308	1,244	1,770	2,048
	YoY		2.8%	6.1%	-53.8%	13.8%	-38.7%	-46.8%	-14.4%	22.6%	39.3%	33.8%	144.5%	-6.8%
	Powder Processing Equipment		1,206	1,441	905	1,715	1,122	886	891	1,629	1,149	1,245	1,607	1,991
		YoY	-9.2%	-1.3%	-42.1%	4.4%	-7.0%	-38.5%	-1.5%	-5.0%	2.4%	40.5%	80.4%	22.2%
	Blown Film		583	579	246	422	117	403	129	949	421	297	514	433
		YoY	38.8%	23.5%	-55.8%	50.2%	-79.9%	-30.4%	-47.6%	124.9%	259.8%	-26.3%	298.4%	-54.4%

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.

Full-year FY09/21 results

Overview

Results summary

In full-year FY09/21, orders were JPY69.7bn (+20.9% YoY), sales came to JPY60.8bn (+13.6% YoY), and order backlog was JPY37.2bn (+36.7% YoY). Operating profit came to JPY6.4bn (+33.0% YoY), recurring profit was JPY6.6bn (+31.3% YoY), and net income attributable to owners of the parent was JPY4.7bn (+41.7% YoY). Sales and profit increased in both the Powder Processing Equipment and Blown Film segments. The average exchange rates over the period were JPY107.50/USD (JPY107.88/USD in FY09/20) and JPY128.50/EUR (JPY120.75/EUR).

Progress versus company forecast

Versus the full-year company forecast (revised upward on August 6, 2021), sales reached 104.7%, operating profit reached 113.8%, recurring profit 117.4%, and net income 123.7%. Sales and profits surpassed the company forecast as revised on August 6, 2021.

Increased dividend of surplus (announced along with full-year FY09/21 results)

The company conducted a 2-for-1 stock split for each ordinary share on October 1, 2021.

Results by segment

Powder Processing Equipment

In this segment, full-year orders were JPY48.9bn (+9.9% YoY), order backlog was JPY25.3bn (+18.3% YoY), and sales came to JPY45.6bn (+13.0% YoY). Segment profit was JPY6.0bn (+32.3% YoY). Demand for equipment for the toll processing business and chemical industry, which had been sluggish in FY09/20, showed a sign of recovery, and demand for mill systems for use in polyester film recycling rose as global environmental awareness continued to rise. The company also received orders from all fields, including those for electronic materials and pharmaceuticals, and in the aftersales area.

Blown Film

Orders in full-year FY09/21 were JPY20.8bn (+58.5% YoY), order backlog was JPY1.9bn (+104.9% YoY), and sales came to JPY15.1bn (+15.3% YoY). Segment profit stood at JPY1.7bn (+4.2% YoY). Equipment used to manufacture multilayer films with five to nine layers performed well in the US for packaging and lamination, and equipment used to manufacture easily recyclable multilayer films using only polyethylene performed well in Europe. Deals closed in China, Southeast Asia, and South America, also contributed to high levels of orders.

For details on previous quarterly and annual results, please refer to the Historical financial statements section.

Full-year company forecast

		FY09/20			FY09/21			FY09/22
(JPYmn)		1H Act.	2H Act.	FY Act.	1H Act.	2H Act.	FY Act.	1H Est.	2H Est.	FY Est.
Sales		26,630	26,867	53,497	27,631	33,123	60,754	32,500	31,500	64,000
Cost of sales		17,325	16,814	34,139	17,869	21,321	39,190
Gross profit		9,305	10,052	19,357	9,762	11,802	21,564
	Gross profit margin	34.9%	37.4%	36.2%	35.3%	35.6%	35.5%
SG&A expenses		7,435	7,131	14,566	7,210	7,983	15,193
	SG&A ratio	27.9%	26.5%	27.2%	26.1%	24.1%	25.0%
Operating profit		1,869	2,922	4,791	2,552	3,818	6,370	3,000	2,600	5,600
	Operating profit margin	7.0%	10.9%	9.0%	9.2%	11.5%	10.5%	9.2%	8.3%	8.8%
Recurring profit		2,019	2,988	5,007	2,695	3,879	6,574	3,000	2,600	5,600
	Recurring profit margin	7.6%	11.1%	9.4%	9.8%	11.7%	10.8%	9.2%	8.3%	8.8%
Net income		1,220	2,097	3,317	1,929	2,770	4,699	2,200	2,000	4,200
	Net margin	4.6%	7.8%	6.2%	7.0%	8.4%	7.7%	6.8%	6.3%	6.6%

Source: Shared Research based on company data

The company forecast is premised on average foreign exchange rates of JPY108/USD and JPY130/EUR.

As the leading company in powder technology, Hosokawa Micron strives to provide new technologies and system engineering capabilities to suit customer needs and expand its material business (including cosmetics and hair-growth agents that leverage the company's proprietary nanoparticle composition technology), and further enhance the strength of its brand in the Blown Film segment. The company also aims to boost profitability by continuing to introduce new products and systems with high added value.

However, there is high uncertainty regarding the economic impact from the further deterioration of prolonged COVID-19 pandemic, therefore the company has not ruled out possibilities of further impacts on the company's future financial position, performance, and cash flow.

Mid-term management plan

17th three-year management plan (FY09/22 to FY09/24)

16th three-year management plan (FY09/18 to FY09/20) in review

In October 2017, at the start of its 16th three-year management plan (FY09/18 to FY09/20), the company targeted sales of JPY56.0bn by FY09/20, with operating profit of JPY5.6bn, recurring profit of JPY5.6bn, and net income of JPY3.9bn. In the first year of the plan, FY09/18, sales surpassed this target, reaching JPY56.9bn. However, growth stalled after that, and in FY09/20 sales were JPY53.5bn, operating profit was JPY4.8bn, recurring profit was JPY5.0bn, and net income was JPY3.3bn. The company attributes these shortfalls mainly to the effects of the COVID-19 pandemic, as restrictions on business trips led to delays in acceptance inspections, and an uncertain economic outlook caused companies to hold back on capital expenditures.

Management measures in FY09/21

Business strategies

In the Powder Processing Division, the company plans to focus on areas of business that remain vigorous, such as batteries, energy, food products, and pharmaceuticals. In the After Sales Division, Hosokawa Micron intends to expand overseas parts sales by coordinating with locations in Asia. In the Material Business Division, the company will collaborate with Hosokawa Micron Cosmetics and develop original design manufacturing (ODM).

Global developments

Looking to the future, Hosokawa Micron aims to expand sales routes in South America and cultivate the African market. Within the Asian market, the company anticipates an economic resurgence in China. The company’s marketing strategy calls for enhancing ties within the group and identifying markets that are surging and those that are rebounding.

Performance targets of the 17th three-year management plan (FY09/22 to FY09/24)

Rather than begin the 17th three-year management plan in FY09/21, when economic uncertainty is high, the company has decided to delay the launch until FY09/22. Even so, the company expects economic uncertainty to persist over the medium term, so has not set any quantitative targets for FY09/24.

Aiming to set global standards

The company’s ongoing goal is to establish its leading-edge technologies as global industry standards.

Core policies

1. Strengthen intragroup collaboration to expand the global sales network

The company will cultivate sales in areas where economic growth is high, such as Latin America and Africa, in an aim to expand sales in emerging markets.

The company intends to expand sales by reinforcing group ties in China, Southeast Asia, and other Asian markets where economies are growing faster than in developed countries, and also by reviewing product and sales strategies.

2. Promote business expansion by centralizing and sharing information via digital transformation (DX)

The company intends to reconfigure its overall IT design, analyzing and putting to use the information it has accumulated on markets, customers, and projects, as well as testing data.

By integrating production systems with the Industrial Internet of Things (IIoT), the company is building systems that will enable the remote operation of plants. In addition, the company plans to obtain and analyze detailed data on powder treatment processes, allowing it to provide high-value-added services to customers remotely. The company will provide a remote (real-time communication) service, enabling customers to check testing and measurement results obtained from the company’s test center.

3. Application and market-oriented marketing and product development

The company will research markets, by industry and material, consolidating and reflecting this information in the products it develops. The company will develop products once it has a detailed understanding or concept of the markets where they are likely to sell.

Hosokawa Micron will revamp its R&D and sales structures, reinforcing its specialized systems for R&D and creating consistent groupwide selling standards.

4. Introduce work style reforms and cultivate human resources

The company will foster its corporate culture and revamp its systems to encourage a spirit of challenge when taking on business in new fields and areas of operation.

By encouraging international exchanges of personnel, the company will cultivate human resources with a global mindset to invigorate communication within the group.

5. Push forward with ESG/SDGs initiatives and contribute more to environmental preservation

Develop products and toll processing services that contribute to the recycling economy, and roll out maintenance services

The company will utilize IIoT technologies, strive to optimize the operation of powder processing systems, boost operating efficiency, and conserve energy.

The company will make use of IIoT technologies to reduce waste materials.

The company will develop powder technologies aimed at making material particles finer and higher-performance, creating lithium-ion battery materials that will improve energy efficiency and contribute to decarbonization. The company will also develop technologies for materials used in solid batteries, neodymium magnets, and the silicon manufacturing equipment needed for solar cells.

In maintenance services, Hosokawa Micron intends to maintain product performance and production efficiency through optimum maintenance.

The company planned to begin using powder coating that does not require solvent when using measuring equipment in December 2020.

Provide customers with products, materials, and services that improve their quality of life

The company plans to promote the development of technologies in the field of pharmaceuticals and healthcare (dental materials, cosmetics, hair-growth agents). Hosokawa Micron aims to boost permeability and efficacy of drugs and use coatings to reduce bitterness.

By developing blown film technologies, the company aims to encourage the move from multi-layer films (made of multiple materials) to mono-layer film (single material) for the packaging of food products and facilitate recycling.

Sales and operating profit

Sales, operating profit, and the operating profit margin

Major factors affecting performance since FY09/02

Global economic expansion, fueled by Europe and China

The company attributes its improved performance (from an operating loss of JPY857mn in FY09/02 to operating profit of JPY4.4bn in FY09/07) to increased sales of powder processing equipment in a range of fields, including resins, carbon, and foods. The company introduced new products, raised selling prices on low-margin products, and improved the operation and reduced expenses of group companies overseas—notably in Europe. Yen depreciation also helped boost profits.

Substantial deterioration in earnings due to the global financial crisis

Operating profit declined from JPY4.4bn in FY09/07 to JPY739mn in FY09/10. The primary reason was a major contraction in capital expenditure, stemming from a global economic downturn. A sharp increase in the price of steel and other materials also caused profitability to deteriorate.

Global recovery led by sales of products for electronic materials

From FY09/10 to FY09/12, operating profit rose from JPY739mn to JPY3.9bn. In an expanding global economy, equipment sales grew in Japan and overseas. In Japan, sales increased for high-value-added products in the group’s areas of strength (equipment for the production of powders for lithium-ion battery materials, toner, and fine minerals), as did sales of systems. The company also succeeded in developing sales in China and other emerging markets. Furthermore, enhanced selling capacity in the US improved the company’s profit structure and helped improve performance.

Worldwide economic downturn due to sluggish performance in China and other emerging markets

Operating profit fell from JPY3.9bn in FY09/12 to JPY2.5bn in FY09/15. The US market was robust, but sales fell in Japan as capital expenditure declined especially in the area of electronic materials, affecting domestic sales of highly profitable high-value-added products. In Europe, sales related to chemicals and the mineral industry were sluggish. The company posted losses related to the European confectionery business, as major confectionery companies merged and reduced new capital expenditure. Sales were down in China, South Korea, and Russia. Costs increased as the company boosted advertising expenditure in the cosmetics business.

Global economic expansion and improved profitability

Profitability improved in tandem with sales growth between FY09/15 and FY09/18, with operating profit rising from JPY2.5bn to JPY6.5bn. Business growth worldwide fueled higher capital expenditure in Europe, the Americas, and Japan. Taking advantage of group synergies, Hosokawa Micron expanded sales of powder processing and blown film extrusion equipment. Sales in the mineral industry grew in emerging markets. In Japan, sales rose for high-value-added products for lithium-ion battery materials and magnetic materials, and sales in the food industry grew on the back of vigorous new product development. The company worked strategically to boost sales of maintenance services and strove to allocate costs more efficiently. The sales department focused on setting prices appropriately to reflect the value-added of products. These efforts contributed to a rise in profitability, to around 10%.

Business

Business model

Core businesses (B2B)

Hosokawa Micron sells mainly to other companies via its Powder Processing Equipment business (providing powder technology solutions) and Blown Film business (manufacturing equipment for producing high-performance films). Globally, the company develops, designs, manufactures, sells, and maintains the products needed for these businesses. The company also engages in the businesses of toll processing and measurement.

Powder Processing Equipment business

Powders used in a range of industries

The powders produced by the processing equipment Hosokawa Micron manufactures are used across an extremely wide range of industries. Notable fields include automotive, batteries, magnets, electronic materials, ultrahard materials, construction materials, foods, pharmaceuticals, chemical products, synthetic resins, and agriculture, and the company’s equipment is used to process materials, intermediate goods, and final products.

Automotive: Bumpers, tires, metallic paints, ceramic filters
Batteries: Cathode and anode materials for lithium-ion batteries
Magnets: Neodymium magnets
Electronic materials: Crucibles for silicon production, semiconductor sealing materials, capacitors
Ultrahard materials: Tools
Construction materials: Mineral materials, gypsum, ultrafine cement, fillers, extenders, coating materials
Foods: Rice flour, powdered tea, wheat flour, spices, starch, tofu residue, dietary fiber, convenience foods, health foods
Pharmaceuticals: Tablets (orally disintegrating tablets), powdered medicines, injected medications
Chemicals: Flame retardants, liquid-absorbing polymers for disposable diapers, toner, cosmetics
Synthetic resins: Water pipes, fluorine coatings, PET bottles, synthetic fibers, biodegradable resins
Agriculture: Feed, fertilizer, pesticides

Looking at orders by industry sector in FY09/20 (excluding the maintenance and toll processing business), Shared Research estimates that the company derived approximately 35% of orders from the plastic blown film industry, 15% from chemicals, 15% from metals and minerals, 10% from electronic materials, 10% from pharmaceuticals, 10% from foods, and 5% from resins.

A comprehensive manufacturer of powder-processing equipment with engineering capabilities

At Hosokawa Micron, powder processing does not end with the grinding*¹ process. Rather, the company maintains an entire range of technologies and products to handle all related manufacturing processes, including classifying*², mixing*³, drying*⁴, agglomeration*⁵, dust collection*⁶, feed and discharge, transport, and storage. Measuring equipment is also necessary to check the condition of powder materials and make the most of these products. The tendency of powder to harden, flow, whirl, clump, or disperse also differs, depending on its state. Because it is more difficult to handle than gases or liquids, powder requires specialized technologies.

Hosokawa Micron is an all-around manufacturer of the major equipment used in the production of powder. This equipment extends beyond the grinding machines that produce powder and includes classifiers, mixers, dryers, bag filters, and agglomerating equipment. The company also has the engineering capability to provide comprehensive systems encompassing powder technologies.

*¹Grinding: This process involves applying energy to reduce the size of solid materials. As pieces become smaller, their total surface area increases, which can make industrial processes more efficient. In lumps of materials, different components may vary in size. Grinding them into smaller pieces allows desired components to be selectively removed (classifying). Also, smaller and more consistently sized materials are better when blending multiple materials (mixing).
*² Classifying: This process refers to separating particles by size. Making particle sizes consistent can change powder’s characteristics, adding value by boosting product performance and quality. Typically, particle sizes vary widely in the fine powders produced by applying energy to solids. Grinding makes particles smaller, but reducing the size of small particles further requires substantial energy. Also, particles that are too small can adhere too much. Classifying helps avoid these problems, and the grinding process is made more efficient by removing particles that have already reached the desired size, leaving behind those that are too coarse. Accordingly, classifying and grinding machines are often combined.
*³ Mixing: In this process, different powders are combined so they are distributed evenly throughout the mixture.
*⁴Drying: Heat is applied to evaporate moisture or solvent and leave dry powder behind. Drying may also be used to adjust the temperature of powdered materials.
*⁵Agglomeration: Ultrafine particles are compressed or aggregated to form granular materials, which are easier to handle.
*⁶Dust collection: Airborne particles are pulled into a machine’s airflow, and the suspended particles are collected as powder. Worksites where powder is processed tend to generate dust; collection helps keep the air clean in and outside the workplace. Collection is also employed in the grinding, classifying, and drying processes to collect powder products. Around waste incinerators, ash collection helps preserve air quality.

Proactively entering technical alliances with prominent overseas manufacturers

The company develops various types of powder-processing equipment. Hosokawa Micron’s lineup also includes high-end powder-related technologies and products across a host of technical fields. This range is due to proactive technical alliances with prominent overseas manufactures such as Nauta Mix and Pulverizing Machinery. The alliances have formed Hosokawa Micron’s foundation as a comprehensive manufacturer of powder equipment.

Providing system engineering services

Sophisticated engineering is needed to ensure entire powder processing systems are high-performing, energy-effective, and efficient. Since the time of establishment, the company’s test centers have amassed huge amounts of data on tests performed and products delivered. The company has system engineering capabilities, including overall control services, to decide powder-handling processes and select individual machines and set operating conditions.

Proof-of-concept testing and analysis at testing centers

The Hosokawa Micron group’s selling style focuses on responding to customer needs rather than on proactive selling. For example, the company might respond to an inquiry about “a machine that could produce this sort of powder” by building a compact unit at its test center and conducting proof-of-concept testing. Hosokawa Micron is the only company in the world to offer this sort of solution-based technologies, which it says are state-of-the-art.

“A mountain range of powder technologies”

A former president, Masuo Hosokawa, described the company’s technological stance as “a mountain range of powder technologies.” Through this image, he sought to convey the idea that the company’s wide variety of key powder-processing equipment and technologies were like tall mountain peaks, with the ancillary equipment, system engineering capabilities, and other expertise spreading out like supporting foothills. This view provides the backbone for its management strategy. The company aims to foster next-generation industries through advances in processing equipment, system engineering, new material development, manufacturing, and practical realization.

R&D

Hosokawa Micron is an R&D-oriented company that holds 339 patents in Japan and 117 overseas. Through industry–academia collaboration, hosting symposiums and round-table lectures, and contributing to publications specializing in powder technologies (The Micromertics and KONA), the company strives to maintain solid relationships with researchers and uphold its competitive edge.

Competitors

Hosokawa Micron says it has no competitors that can match its comprehensive capabilities encompassing R&D and engineering expertise. Instead, rivals typically specialize in certain types of equipment, such as grinding machines, mixing machines, or drying machines.

Business fields

The Hosokawa Micron group develops leading-edge materials and engages in processes in a wide range of industry sectors; the company does not rely on any specific market. In recent years, lithium-ion battery materials have become a focus as the market has expanded. Even so, this is one of many key powder-related markets for the company, which also include toner, magnetic materials, resins, food products, and pharmaceuticals. Rather than limiting its mainstay markets to specific industries, within the powder market the company concentrates on high-end fields that require sophisticated technologies and seeks to meet new technological demands that go beyond existing market categories.

Blown Film business

Final products

The company manufactures a wide range of blown film extrusion equipment. The resulting films are used in a wide range of industrial fields. These films include packaging films, barrier films for food products, and protective films for electronic equipment.

Products and technologies

Micron Mill

The company developed this fine grinding mill in 1930. Incorporating three basic principles of grinding (impact, friction, and shear), the unique structure of this mill made it a breakthrough product of its time. The mill was patented in 1931. The first unit was delivered to Momotani Juntenkan, where it was used to grind face powder materials.

Super Micron Mill

This ultrafine grinding mill, developed in 1951, was definitive due to its ability to produce micron-level powder. The Super Micron Mill combined two Micron Mill grinding chambers to boost capacity. To prevent grinding efficiency from dropping, the Super Micron Mill used a newly developed nozzle-based separating mechanism to sort and eliminate impurities and foreign matter from base material during the grinding process. With this arrangement, the company succeeded in developing a product that was efficient at fine grinding and increased product purity. The company patented this machine as a “fine grinding mill equipped with classifying functionality.”

Micron Separator

This classifier was jointly developed in 1955 by Masuo Hosokawa (then senior managing director) and Takuzo Matsuyama (then an associate professor at Kyoto University). Development of the Micron Separator took place alongside the Super Micron Mill. This new high-performance classifier used airflow to separate out particles in a prescribed range of sizes from materials with a broad particle size distribution. At the time of its launch, no other machine was capable of classification to that level of precision. In addition to offering the Micron Separator for sale as a standalone fine-powder classifier, the company combined it with the Super Micron Mill and other grinding machines to create efficient grinding and classifying systems. This machine earned the company patents in the US and in five countries in Europe, as well as in Japan. Its two major inventions (the Super Micron Mill and the Micron Separator) formed the basis for technical alliances the company formed several years later with prominent European and US manufacturers.

Ultrafine grinding machine (Angmill)

In 1984, Hosokawa Micron developed the Angmill, pioneering the nanoparticle technology of today. The rotary impact mills and fluidized fine grinding mills (Jet Mills) of the time were capable of reducing particles down to an average diameter of only 2–3 microns, no matter how much force was applied. Grinding machines typically comprised a grinding rotor that revolved inside a fixed casing. With the Angmill, this approach was reversed: the casing rotated at high speed, while the material powder was flung to and compacted by centrifugal force onto the casing walls. The material powder then could not escape from the grinding force and was effectively ground. The technology used for this ultrafine grinding mill achieved something that had proven difficult until then: continuous grinding to the submicron level using a dry process. The Angmill produced ultrafine powder (average diameter of 0.5 micron) from talc and other mineral raw materials.

Mechano Fusion and particle design technology

Mechano Fusion, developed in 1987 based on the Angmill, was a breakthrough system for fine particle composition. The ability to compose ultrafine powders of different powder materials, fusing (not melting) the materials by applying large amounts of mechanical energy, set Mechano Fusion apart from conventional systems. Composition took place as the result of molecular bonding rather than mixing or chemical reactions. Composition was a dry process (requiring no liquid binders), opening the possibility to combine inorganic, organic, metallic, and other materials. This technology made it possible to develop particles with multiple new functions.

At the time, the concept of particle design was beginning to attract interest within the powder industry, particularly in the pharmaceutical industry. The discovery that the Angmill could be used to dry-compose materials at the particle level focused attention on the Mechano Fusion system.

This system allowed ceramics and metals to be fused into materials that have the combined physical characteristics of both constituents. For example, processing powdered PMMA resin together with titanium dioxide nanoparticles (both of which have poor flow characteristics) results in a composite powder that flows much like a liquid. Photocopier toner typically exhibits low fluidity, and unprocessed toner tends to clump when it is poured into a photocopier. By contrast, toner produced using the Mechano Fusion system is highly fluid. The system is similarly used with materials for the electrodes of rechargeable batteries, other electromagnetic materials, chemical products, and pharmaceuticals.

Nobilta

Mixing and dispersion usually occur as the result of three actions: convection, shear, and diffusion. However, composition using nanoparticle materials requires the combination of grinding machine functions (impact, friction, and shear) to overcome extremely strong cohesive forces. However, most conventional mixers and mechanical composition machines tend to be biased toward either the convection, shear, or diffusion functions. Alternatively, the machines may not have enough power to disperse nanoparticles, resulting in agglomerate residue and the target composite particles failing to form. The Nobilta particle composing machine was developed to address this situation.

On the Nobilta, a specially shaped rotor rotates at high speed inside a horizontal, cylindrical mixing vessel. Consistent impact, friction, and shear forces act evenly on the individual particles. The ability to compose nanoparticles consistently is due to the rotor shape and arrangement. Nanoparticles are processed (precision-mixing or surface treatment) by adjusting the rotational and operating speeds. The Nobilta is used with cathode and anode materials for lithium-ion batteries, toner, photocatalysts, bearings, polymers, electromagnetic wave shield materials, magnets, and pharmaceuticals.

Mechano-chemical bonding (MCB)

In addition to mechanical force, this type of bonding applies low temperature plasma and other types of physical energy to compose powder materials with new functions. In 2004, the company used plasma to activate particle surfaces, developing a particle design machine (the Nanocular P) that uses the Mechano Fusion structure to promote composition.

Micron Separator and photocopier toner production technology

Hosokawa Micron was the first company to develop classifying technology capable of separating micron-level particles. This technology allows particles to be arranged according to size after grinding. Advanced powder technologies are used to produce the toner used in photocopiers and printers. Hosokawa Micron launched the first machine for producing toner, an air classifier called the Micron Separator, in 1967.

When producing toner, particle size distribution needs to be controlled stringently to ensure high-quality printed images. Initially, particle size measuring 5–25 microns was needed. At that time, the Micron Separator was the only machine capable of meeting this requirement. Later, the company developed the Super Separator (1979) and the Micron Jet (1981). Applying the engineering expertise it had accumulated, Hosokawa Micron created a complete toner production system to handle everything from mixing raw materials to final packaging. The company sold this system to most of Japan’s toner producers.

As toner production technology grew more advanced, the company developed an impact-type ultrafine grinding mill, the Innomizer (1995), and the Micron Jet, model MJT (1997). Higher-quality toner was needed to match improvements in photocopier performance. Initially, particles measuring over ten microns were suitable. This standard gradually moved to 5–6 microns, with the stipulation that finer dust be separated out. Hosokawa Micron developed technologies to meet these increasingly strict requirements.

In the 2000s, color toner became mainstream. This change gave rise to demand for toner materials whose characteristics differed by color. Demand also arose for low-temperature fine grinding to produce toner including wax to facilitate low-temperature fixing. To meet these needs, the company developed the Glacis, a high-performance, cooling-type fine-grinding mechanical mill. Using the Mechano Fusion system and the Nobilta, which were developed around the same time as Glacis, it was possible to rapidly disperse and fix silica nanoparticles onto the surface of toner particles. This approach resulted in a variety of functional improvements, such as significantly better fluidity.

As the shape of toner particles became a focus as well as particle size distribution, in 2003 the company developed Faculty, to mechanically shape particles into spheres.

Powder Characteristic Tester

The company has also developed equipment to test the physical characteristics of powders. The most widely sold instrument of this sort was the Powder Tester. With worldwide sales totaling more than 4,000 units, this model’s measurement data has made it the industry default for measuring quality standards.

In 1965, Ralph L. Carr of the US developed indices to describe powder “flowability” and “floodability,” which until then had been assessed only intuitively. In 1969, Hosokawa Micron developed a machine to take simple measurements of these indices, adding its own evaluation indices and developing the first-generation Powder Tester PT-A, the world’s first device to measure both fluidity and floodability.

Later, the Powder Tester was digitized. In the 1980s, the company developed the Powder Tester PT-N. This digital model featured a microcomputer and liquid-crystal display. The Powder Tester PT-R, developed in 1997, used a panel computer operating on a Windows operating system. Operations are shown on-screen and conducted using a touch screen. Hosokawa Micron also developed the first laser-based technology to measure angles automatically, enhancing usability and measurement precision. The Powder Tester PT-X, developed in 2011, used imaging to measure angles. The company positioned this as a global strategic product by incorporating actuator validation (calibration) and measures to shield the operator from dust.

ACM-BC (ACM Pulverizer BC model; a fine grinding mill that eliminates metal contamination)

The company developed the ACM Pulverizer BC, which was launched in 2016. This grinding mill with built-in impact-type classifier was designed to process cathode materials for lithium-ion batteries. ACM Pulverizer mills with built-in impact-type classifiers also incorporate air classifiers, which simplifies the control of particle diameters and allows them to handle a wide range of materials leveraging numerous optional parts.

The ACM Pulverizer BC used ceramics for the parts that came into direct contact with powder to avoid metal contamination* due to friction with powder. Such contamination directly affects the safety of lithium-ion batteries, so quality standards are stringent. To expand sales in China, South Korea, and other world markets where demand for such mill is increasing, the company has focused on keeping the design as simple as possible and ensuring low initial costs.

*Metal contamination: Metal particles, which are generated by collision between powder and metal part, mixed in with powder products

Nanoparticle technology

In the 1980s, the company developed a machine to generate fine metal particles at the nanometer level. The machine utilized technology developed for the formation of ultrafine functional particles by the Institute for Materials Research of Japan’s Science and Technology Agency. At the time, few units were sold, as industry had little need for such ultrafine particles. In the 1990s, however, the company aimed to enter into the materials business that made use of ultrafine particles, leading to the proactive introduction of a host of new technologies in Japan and overseas.

In the 2000s, the company developed the NanoCreator for synthesizing nanoparticles. In addition to mixing liquid materials, this device made it possible to synthesize nanoparticles from various material combinations and composition ratios. Product purity was high, and the technology was suited to mass production. The technology earned an award from the Ceramic Society of Japan in 2005. Also in the 2000s, the company developed formulation technologies for a drug delivery system (DDS) using polylactic co-glycolic acid (PLGA) nanoparticles. In the process of researching PLGA nanoparticles, the company found that PLGA nanoparticles could be effectively absorbed and decomposed in the skin, as well as by the alveolar and intestinal walls. This discovery led to the concept of a drug delivery system (DDS) using PLGA nanoparticles as carriers to send drugs in the desired quantities to the necessary locations. Using this DDS, the company developed cosmetics and hair-growth agents, launching consumer products such as NanoImpact and NanoCrysphere under the Hosokawa brand.

The company is pursuing technological applications in a variety of fields, in cooperation with universities and pharmaceutical companies in such areas as catheters, stents, and other medical devices. In 2002, the company exhibited this technology at the First International Nanotechnology Exhibition and Technology Conference (nano tech 2002), where it earned the First Nano Tech Grand Prize.

Powder technology applications

Pharmaceuticals

Production of anti-cancer drugs: As even a few milligrams of anti-cancer drugs can affect the human body, production methods are needed that prevent people from coming into contact with these drug powders. The company has resolved this issue by combining isolators and grinding machines.

Enhancing quality of life: The company contributed toward the development of drugs that do not have a bitter taste and oral dosages that can be taken without liquids by coating drugs even smaller than 1/100 millimeter before making a tablet.

Improving absorption: Many drugs developed in recent years are not easily absorbed by the human body. The company makes it possible to grind drugs down to several parts in 1/1,000 of a millimeter, enhancing absorption.

5G, CASE (electronic components and magnets for batteries and motors)

The Hosokawa Micron group’s powder technologies (grinding, classifying, spheroidization, coating, measurement, and feeding and discharging) are widely used in the production of electronic components, batteries, and magnet materials.

The company’s powder processing technologies are used for seal materials (epoxy resin, silica, carbon black) that help protect key processing units (such as ICs and LSIs) from the outside environment. The company’s technologies are also used for the electrode materials of lithium-ion batteries and in production systems for the neodymium magnets needed for electric vehicles and wind power generation.

Higher-performance plastics

Formed products: Hosokawa Micron provides drying machines and technologies that increase the heat resistance and robustness of electronic components, as well as eliminating residual solvents. The company’s powder technologies help enhance strength through solid-phase polymerization. In optical films used in liquid crystal displays and precision photography, transparency and fouling and the consistency of film thickness have a direct effect on final product quality. The polyethylene terephthalate (PET) used in these applications is dried to around a dozen ppm at the solid formulation (pellet) stage. This level of dryness is required to ensure processing proceeds smoothly at the film stage. Uniform crystallization is also essential to ensure uniform film thickness. Hosokawa Micron’s drying system (DRS) addresses these issues.

Thin films: Films produced using the inflation method* are used for packing food products, which require preservation. The films are also used in materials for the packaging of online purchases, meeting the need for elasticity and robustness.

*Inflation method: A film production method in which different resins are extruded in cylindrical and multi-layer structures and inflated by blowing air between them.

Key products of the Hosokawa Micron group

Grinding and classifying equipment

Grinding machines

Grinding is the process of applying energy to reduce the size of solid materials. As pieces become smaller, their total surface area increases, which can make industrial processes more efficient. In lumps of materials, different components may vary in size. Grinding them into smaller pieces allows desired components to be selectively removed (classifying). Also, smaller and more consistently sized materials are better when combining multiple materials (mixing).

Grinding machines may use a revolving hammer to grind powders through impact (hammer mills) or use high-pressure air to grind on impact (jet mills). Jet mills do not generate heat themselves and also tend to dispel internal heat. This feature suits jet mills to grinding materials that are susceptible to heat. Grinding machines may be dry or wet; Hosokawa Micron’s grinding machines are mostly of the dry variety.

Classifiers

Classifying refers to the process of separating powder particles by size. Making particle sizes consistent can change a powder’s characteristics, adding value by boosting product performance and quality.

Typically, particle sizes vary widely in the fine powders produced by applying energy to solids. Grinding makes particles smaller, but reducing the size of small particles further requires substantial energy. The grinding process is made more efficient by removing particles that have already reached the desired size, leaving behind those that are too coarse. Accordingly, classifying and grinding machines are often combined.

Classifiers can separate out, by size, powders composed of numerous large particles. They can also eliminate large particles mixed in with finer powder.

Fine impact mill with built-in classifier
(ACM Pulverizer*1)

Impact-type jet mil
(Micron Jet T MJT*2)

Fluidized bed opposed jet mill
(Counter Jet Mill® AFG-CRS*3)

(Counter Jet Mill® AFG-CRS*3)

*¹ ACM Pulverizer: This fine impact mill has a built-in, high-performance classifier. The mill is used around the world in many industries, including pharmaceuticals, food products, chemicals, resins, and minerals. Fine impact mills typically offer better value for money than jet mills, in terms of both initial costs and running costs (electricity costs). To date, the company has delivered 2,500 units to customers in Japan. By adjusting the rotating speed of the grinding rotor and the classifying wheel, operators can easily control the product size. This model is used with a wide range of materials. A fixed quantity of material is brought into the chamber, where it is drawn between a hammer (grinding rotor) rotating at high speed and a grooved liner that is fixed in place, and the material is ground due to impact from both sides. After the grinding process, circulating airflow carries the powders into the classifying section, where they are classified by the classifying wheel. The coarse material is affected by centrifugal force and flows back to the grinding chamber. Airflow carries particles that have been ground to sufficiently fine powder through the classification wheel to the collector, where they are discharged as products.

The ACM-A produces particles with an average diameter of 10–100μm, while the high-speed ACM-H (circumferential velocity of 130m/s for grinding rotor) produces particles averaging less than several 10μm in diameter. The ACM-HC uses wear-resistant ceramics to prevent the incursion of debris from hammer wear. The ACM-BC is used specifically for processing materials used in the cathodes of lithium-ion batteries. As metallic contamination due to component wear has a significant impact on the quality and safety of lithium-ion battery materials, ceramics are used on the parts that come into contact with the powder.

*² Micron Jet-T MJT: This Jet Mill, which uses high-pressure gas to grind particles on impact, produces fine and ultrafine powders. This type does not generate heat, suiting to the grinding of heat-sensitive materials. Jet Mills are equipped with compressors, which increase electricity costs, but this model is fitted with a proprietary impact grinding mechanism, making it highly energy-efficient.

Particles pass to a classifying wheel at the center of the casing and are sent to a grinding nozzle at the bottom of the casing (the outlet for material and high-pressure air). The grinding air accelerates materials supplied to the machine to near the speed of sound, and they are ground through impact with the target plate. Particles that have been ground to sufficient fineness pass through the classifying wheel and are collected as products. Materials that are too coarse go to the wall of the casing, where they are again accelerated by grinding air and impact-ground.

With fluidized-bed Jet Mills, which grind particles on impact, powder residue tends to build up inside the chamber. This accumulation of high-value-added material was an issue from the perspective of running costs. To hold down running costs, this model has a simple configuration that prevents the internal accumulation of residue. In recent years, this grinding system has utilized inert gases to prevent oxidation reactions. The model is used in the production of high-performance materials, such as nitrides, and other ceramic materials; magnetic materials such as neodymium; and cosmetics.

*³ AFG-CRS Fluidized Bed Opposed Jet Mill®: This model is an ultrafine grinding machine with an ultrahigh-performance classifier. Easy disassembly and maintenance make this mill well-suited to use with different grinding materials. An optimized classification structure is located at the top of the fluidized bed opposed jet mill to ensure full effectiveness of the semifree vortex generated inside the classifying wheel. Ceramic wheels are used to prevent metallic contamination, and the mill can be scaled up by using a multiwheel to maintain the desired particle diameters. This type of mill may be used with materials for electronics and electronic components (glass and sealing materials), graphite and coke (capacitors and anode materials), activated carbon and minerals (calcium carbonate, talc, and others).

Mixing machines

Mixing machines combine powders so they are distributed evenly throughout the mixture. Drying machines delete moisture and/or solvent from powder.

Conical mixers
(Nauta Mixer*1, NX*2)

Continuous mixers*³
(Model TX)

Conical high-speed mixers
(Vitomix™*4, VX*5)

Source: Company website

*¹ Nauta Mixer: This batch mixer consists of an inverted conical body with a mixing screw attached to a rotating arm. More than 20,000 units have been delivered worldwide. Features include ease of discharge with a low amount of residue and simple cleaning, making it easier to use the mixer with multiple products. The Nauta Mixer is used for the mixing of powders or powders with liquids, and also as a heater, dryer, reactor, and cooler. The model offers additional functionality to meet a wide range of applications.

*² NX: This original Nauta Mixer with an extensive track record and a high performance standard, is available in a wide range of sizes, from compact to ultralarge.

*³ Continuous mixers: This type of machine is used to mix fixed quantities of supply of two or more powders or to mix powders with liquids. Paddles rotating at high speeds in a horizontal cylindrical vessel continuously mix and disperse the materials. High rotor tip speeds (of 20–30m/s) help to break agglomerates in the feed material and achieve quick dispersion. As mixing consistency can be difficult with low-speed mixers, this type of mixer can be used downstream of a low-speed mixer as a final mixer. The rotation speed, paddle angle, and paddle clearance are used to adjust the impact, shear force, and residence time. A version with a split vessel (TCX model) makes changing paddle settings and cleaning easier. Options include a heating/cooling jacket and a polytetrafluoroethylene (PTFE) coating to prevent material buildup in the vessel.

*⁴ Vitomix: Carrying forward the characteristics of the Nauta Mixer, the Vitomix is a new model that offers even better powder functionality. Developed by Hosokawa Micron B.V., the model is sold throughout the Hosokawa Micron group. Two ribbon screws are used to achieve maximum agitation throughout the powder, mixing it quickly. This model facilitates a range of screw operating speeds to meet product requirements: from low-speed operation to avoid damaging powders to higher-speed mixing. For example, when making an instant mushroom soup mixture, the combination might be mixed at a moderate speed to combine wheat flour, starch, powdered milk, spices, salt, and other fine powder ingredients, with flavorings, oils, and other liquid additives mixed in later. In this case, high-speed mixing could help prevent the second-stage mixture from clumping. The combination might then be finished off by gently mixing in dried mushrooms and dried onions. In the past, these mixing processes would have required the use of several machines. According to the company, handling all processes with a single machine reduces total processing time to between one-eighth and one-sixth.

*⁵ VX: The VX is a batch mixer comprising an inverted cone vessel with two automatically revolving ribbon screws. The Nauta Mixer provides the base design for this powder mixer, which has been engineered to allow a substantial increase in mixing speed. In addition to gentle mixing (as with the Nauta Mixer), the VX allows high-speed mixing to facilitate fast dispersion and shearing strength. With a vessel designed for optimum mixing, the VX has a shorter height than a Nauta Mixer with comparable volume. The VX vessel is an inverted cone designed to minimize dead space and employs a specialized ball segment valve at the bottom, allowing material to be discharged with almost no residue. A large access door on the side of the vessel permits easy cleaning and inspection of the interior. The VX is suited for mixing powders or powders and liquids. It can also be used as a replacement for a Nauta Mixer to increase capacity, for mixing where higher shear is required, and for mixing a large variety of small-lot products.

Drying machines

Drying machines apply heat to evaporate moisture from materials and leave dry powder behind. They can also be used to adjust temperature in granular materials.

Direct heating flash dryer
(Drymeister DMR-H*1)