Two of the largest Japanese suppliers of analytical instruments, Shimadzu and Hitachi High-Technologies, each recently reported their fiscal 2011 results for the year ending March 31. In addition, both companies reported a return to mostly normalized operations following March’s earthquake and tsunami. The companies reported growth for their analytical instrument businesses after declining sales in the prior year.

Shimadzu reported little damage to its operations as a result of the earthquake and tsunami, as its Japanese production facilities are located outside of the country’s northern region. However, Hitachi High-Technologies sustained damage to two of its seven Japanese manufacturing sites. Production at these sites was restored as of April. The company also initially reported that 30 of its suppliers were severely affected by the earthquake. For its Science and Medical Systems division (SMS), the company reported that the earthquake resulted in a delay of ¥2.6 billion ($3.0 million = ¥85.70 = $1) in sales. The affected factories produce scanning electron microscopes, LCs, DNA sequencers (see IBO 5/31/11) and clinical analyzers.

Fiscal 2011 sales ending March 31 for SMS fell 6.3% to ¥1,154 billion ($1,642 million). Sales of General-purpose Analytical Instruments products slumped 21.3% to account for 12% of division sales. Electron Microscopes and Clinical Analyzers product sales contracted 6.3% and 4.1% to make up 22% and 51% of division sales, respectively. Sales of Biotechnology and Other products improved 0.6% to 15% of division sales. SMS operating profit declined 14.8% to ¥121 billion ($141.2 million).

For fiscal year 2011, sales for Shimadzu’s Analytical and Measuring Instrument (AMI) division grew 4.7% to ¥140,755 million ($1,642 million) to represent 56% of total revenues. By product line, sales of General Analytical Instruments improved 5.0% to account for 60% of division revenue. Among these products, chromatography sales grew 4.2% to ¥61.5 billion ($717.6 million), driven by strong LC demand. Sales of Surface Analyzers slipped 0.4% to make up 7% of division sales, and Environmental Analyzers revenue climbed 4.2% to account for 6%. Sales of Testing Machines and Non-Destructive Inspection Machines jumped 13.1% to account for 11% of division sales. Sales of Other products improved 1.1% to represent 17% of division revenue.

Shimadzu’s AMI sales grew 0.1% in Japan to account for 54% of division sales. Japanese sales benefited from increased capital spending from the private sector and higher R&D investment, but were partially offset by lower demand from government and academic markets due to stimulus spending in fiscal 2010. European and US sales climbed 6.4% and 10.0% to make up 10% and 6% of division sales, respectively, due to strong demand for MS and surface analyzers products. Sales to Asia grew 15.3% to 25% of division sales, including 14.5% growth in China to ¥22.6 billion ($26.4 million). Chinese sales benefited from increased demand for pharmaceuticals, environment and food safety products. South American sales contracted 5.4% to represent 2% of division sales, while sales to Other regions improved 2.2% to make up 3%.

Operating profit for AMI climbed 37.4% to ¥14.2 billion ($165.7 million). For fiscal 2012, Analytical and Measuring Instrument revenue is estimated to grow 8.3% to ¥152.5 billion ($1,794 million = ¥85.00= $1). Operating income is expected to climb 18.4% to ¥16.8 billion ($198 million).

Both companies also recently announced business forecasts. Shimadzu’s three-year Medium-Term Management Plan highlights cost reductions, further penetration of emerging markets, the introduction of cost-effective products and a focus on the aftermarket. The Plan targets AMI sales of ¥188.0 billion, a 33.5% increase over fiscal 2011 revenues. LC sales would grow 35.8% to ¥45.5 billion, MS sales would grow 60.3% to ¥21 billion and GC sales would grow 27.5% to ¥19 billion. The company also stated that in China it would emphasize local R&D and specialized sales organizations.

For fiscal 2012, sales for the Hitachi High-Technologies SMS are projected to grow 11% to ¥127.7 billion ($1,502 million = ¥85.00= $1), driven by increased demand for analytical systems and medical equipment in Europe and China. The company expects sales of Electron Microscopes and General-purpose Analytical Instruments to climb 16% and 3%, respectively, due to new products. Sales of Biotechnology and Clinical Analyzer products are forecast to grow 5% and 12%, respectively. SMS Operating income is expected to expand 19% to ¥14.4 billion ($169 million).