By Masatsugu Horie
Oct. 19 (Bloomberg) -- Daikin Industries Ltd., the world's second biggest air-conditioner maker, expects its sales of fluorine used in rechargeable batteries to gain more than 10 times in eight years as a shift to electric cars spurs demand.
Revenue from the chemical product used for batteries by 2017 may increase to 10 billion yen ($110 million) from the current level of "several hundred millions of yen," Daikin Vice President Guntaro Kawamura said last week in an interview at the company's Osaka headquarters.
"Our products will be used in next generation electric cars that the manufacturers are developing," he said. "This presents a great opportunity for us."
Fluorine, now mainly used in power cells for small electric devices such as personal computers and mobile phones, is needed to make batteries efficient and safe, Kawamura said. Daikin expects electric vehicles may account for about 10 percent of the car market by 2020, and by 2017 sales to the industry may account for half of its revenue from fluorine used in batteries.
Daikin, which purchased Malaysia's OYL Industries Bhd. in 2006 to take over the No. 2 spot for air conditioners, gets 107 billion yen of sales from the chemical business, including fluorine. The figure accounts for about 10 percent of revenue.
"The shift to electric cars may be more dramatic than people think after Prime Minister Yukio Hatoyama pledged to cut Japan's emissions by 25 percent by 2020 from 1990 levels," Kawamura said. "The auto industry will need to shoulder much of that cut."
Daikin's stock has risen 35 percent this year, outpacing the benchmark Topix Index's 5.4 percent increase. It closed 1.9 percent lower at 3,120 yen on the Tokyo Stock Exchange. The Topix rose 0.5 percent.
To contact the reporter on this story: Masatsugu Horie in Osaka at mhorie3@bloomberg.net
Last Updated: October 19, 2009 03:55 EDT