Daido Metal Co., Ltd. Business Report FY ended Mar. 2020
Financial Overview |
(in million JPY) |
| FY ended Mar. 31, 2020 | FY ended Mar. 31, 2019 | Rate of change (%) | Factors | |
| Overall | ||||
| Sales | 100,159 | 107,718 | (7.0) | - |
| Operating income | 4,168 | 7,262 | (42.6) | -Increase in income of 20% year-on-year (y/y) at the non-bearing business due to effective initiatives to win new business outside Japan, although there was a decrease in income at the automotive engine-bearing business and non-engine-bearing business because of the global economic slowdown. In addition, the non-automotive bearing businesses incurred expenses for consolidating and reorganizing the global operations of Iino Manufacturing Co., Ltd., a consolidated subsidiary; and for initial startup costs involved with launching operations at the new, aluminum-diecast production plant in Thailand. |
| Ordinary income | 3,660 | 6,630 | (44.8) | - |
| Profit for the year attributable to owners of the parent | 2,740 | 4,135 | (33.7) | - |
Automotive Engine Bearing Business
-Sales, including intra-segment sales, were JPY 60, 982 million, a 5.9% year-on-year (y/y) decrease. Operating income was JPY 7,285 million, a 23.3% y/y decrease.
Contract
-The Company has been selected by Cummins Inc. to supply bearings for the Cummins X12 heavy-duty truck engine produced in both the U.S. and China. Daido Metal U.S.A. Inc. and Daido Precision Metal Co., Ltd. have started supplying bearings to the engine plants within their respective countries. The X12 engine has a severe operating environment for bearings compared to conventional engines. Daido Metal won the business due to its highly-regarded robust bearing materials and technical solutions such as precision machining. (From a press release dated December 19, 2019)
Progress Report on the Implementation of the Mid-term Management Plan
-The Company outlined the following four major policies:
- Revamping existing businesses
- Aiming to be achieve the highest market share in the plain-bearing market. The actual results of market share in the 2019 calendar year are provided in the table below.
| 2019 Market Share (in %) | Rank | |
| Half-bearings for automotive engines | 33.0 | 1 |
| For turbochargers (small turbo) | 20.5 | 1 |
| For turbochargers (small turbo) | 55.0 | 1 |
| Mid-to-high-speed diesel engines for ships and industrial equipment | 15.0 | 3 |
| Polymer bearings | 12.8 | 2 |
| Bearings for rotating equipment (electric-power turbines, etc. | 4.6 | ｰ |
- Creating and Sustaining New Businesses
- Established the “Future Creation Office”
- Create new business through M&As
- Launch production of aluminum-diecast products for electric vehicles at the new production plant in Thailand
Products: aluminum-diecast cases for power control-units
Customers: Japanese parts-manufacturers - Take advantage of synergy effects from acquired companies
・Reorganize Japanese production operations from 3 plants to 2 plants
・Consolidate North American plants into the Mexican plant and improve productivity
・Create an effective sales framework in North America by collaborating with Daido Metal U.S.A. Inc.
・Development new product proposals for electric and plug-in-hybrid vehicles
・Create single units cast from aluminum - Consider developing special bearings for wind-power generators in Europe
- Increase sales of calme (a porous, sintered substance using aluminum-powder created by the Company’s proprietary production method)
>>>Earnings forecasts by Japanese suppliers
R&D Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2020 | FY ended Mar. 31, 2019 | FY ended Mar. 31, 2018 | |
| Overall | 2,105 | 2,047 | 1,923 |
R&D Activities
Development of engine bearing with idle-stop and hybrid mechanisms that improve fuel efficiency
-Compared to existing products, develop these bearings that have significantly improved anti-friction performance and seizure resistance made possible because of the surface-treatment/plastic overlay.
Development of lead-free overlay and copper-alloy bush materials
-Development of lead-free overlay that can endure high surface pressure and very humid environments in order to meet exhaust-gas regulations. And development of copper-alloy bush materials.
Development of new plastic materials for bearings
-Development of new plastic materials for bearings, which can make thicker layers, for automotive parts and general-industrial parts.
Development of bearing materials for shock absorbers to enhance riding comfort
-Develop, produce, and deliver lead-free, plastic bearing materials for automotive shock absorbers in order to enhance riding comfort by providing greater steering stability and absorbing vibrations. In order to further enhance performance, continue the development of such materials.
-Development of new simulators that can simulate driving conditions for all kinds of uses for bearings, and evaluation of bearing performance and research how they work in real situations.
Capital Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2020 | FY ended Mar. 31, 2019 | FY ended Mar. 31, 2018 | |
| Overall | 10,857 | 7,273 | 8,694 |
| -Automotive engine bearings and non-engine bearings | 4,710 | 3,445 | 4,420 |
Planned Capital Investments (Bearing metal for automobiles business) |
(As of Mar. 31, 2020) |
| Name (Location) |
Purpose of Equipment Installation | Estimated amount (in million JPY) |
From | To |
| Inuyama Plant (Aichi Pref., Japan) |
Facilities and equipment for manufacturing half-bearings Facilities for manufacturing bearings for turbochargers |
961 | May 2016 | Sep. 2020 |
| Gifu Plant (Gifu Pref., Japan) |
Facilities for manufacturing coil bushes | 483 | Oct. 2018 | Dec. 2022 |
| Bi-metal production plant (Aichi Pref., Japan) |
Facilities for manufacturing bi-metal (bearing material) | 2,432 | Oct. 2015 | Jul. 2021 |
| Inuyama Site (Aichi Pref., Japan) |
Building | 1,112 | Oct. 2019 | Sep. 2021 |
| Home Office (Naka Ward, Nagoya) |
Investment in systems | 2,753 | Jan. 2018 | Jan. 2021 |
| Daido Plane Bearing Co., Ltd. (Gifu Pref., Japan) |
Facilities and equipment for manufacturing half-bearings | 1,213 | Dec. 2015 | Jun. 2021 |
| NDC Co., Ltd. (Chiba Pref., Japan) |
Facilities and equipment for manufacturing half-bearings | 302 | May 2019 | Dec. 2020 |
| Iino Manufacturing Co., Ltd. (Tochigi Pref., Japan) |
Building | 713 | Mar. 2019 | Jun. 2020 |
| Dong Sung Metal Co., Ltd. (Chungbuk, Korea) |
Facilities and equipment for manufacturing half-bearings | 322 | Jun. 2019 | Jun. 2020 |
| Daido Precision Metal (Suzhou) Co., Ltd. (Suzhou, China) |
Facilities and equipment for manufacturing half-bearings | 1,539 | Sep. 2016 | Dec. 2020 |
| IINO (Foshan) Technology Co., Ltd. (Guangdong, China) |
Building | 159 | Sep. 2018 | Jul. 2021 |
| Dyna Metal Co., Ltd. (Chachoengsao, Thailand) |
Facilities and equipment for manufacturing half-bearings | 119 | Mar. 2018 | May 2020 |
| DM Casting Technology Co., Ltd. (Samutprakarn, Thailand) |
Facilities and equipment for manufacturing aluminum-diecast products | 3,190 | Sep. 2018 | Feb. 2022 |