PIOLAX, INC. Business Report FY ended Mar. 2020
Financial Overview |
(in millions of JPY) |
| FY ended Mar. 31, 2020 | FY ended Mar. 31, 2019 | Rate of Change (%) | Factors | |
| Sales | 62,480 | 68,298 | (8.5) | -Even though the Company actively worked to expand sales of automotive products globally such as in the USA and emerging countries, sales fell due to lower production volumes in Japan, Europe, and China. |
| Operating income | 6,753 | 9,312 | (27.5) | -Operating income fell due to higher expenses such as for materials and labor. |
| Ordinary income | 7,396 | 10,321 | (28.3) | - |
| Profit for the year attributable to owners of the parent | 5,231 | 7,421 | (29.5) | - |
Business Partnership
-The Company has started to yield favorable results from cooperation with ARaymond France SAS (Araymond). Since the start of a business tie-up in October 2017, the two companies have built a cooperative relationship globally in marketing, technological support, production, and sales. Piolax recently received a new order from VinFast, the first Vietnamese automaker, in Thailand, yielding the first result of cooperation with the French supplier. The two companies are producing synergy effects at an increased rate, such as Piolax’s conclusion of a new business deal in Indonesia owing to cooperation with Araymond. Araymond is a global company that handles fastening and assembly products and supplies the products primarily to European and U.S. OEMs. Araymond's production bases do not overlap Piolax's in the world and so synergy between their business resources in production and sales is expected. (From an article in the Nikkan Jidosha Shimbun on December 16, 2019)
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
R&D Expenditure |
(in millions of JPY) |
| FY ended Mar. 31, 2020 | FY ended Mar. 31, 2019 | |
| All | 601 | 549 |
| Automotive sector | 573 | 530 |
-The Company will look into alternative materials for PA66, a raw material for plastics parts, to deal with surging PA66 prices. The supplier will start switching to inexpensive alternative materials for parts that are not required to have high heat resistance, a characteristic of PA66, in fiscal year 2019 (ending in March 2020) and step up efforts to find reasonable materials overseas. By doing this, it will aim to halve the decrease in profit expected for FY 2019 owing to soaring material prices. Piolax will be replacing PA66 with inexpensive materials that offer the required functions for wiring harness routing clips and other parts that consume large amounts of PA66. For instance, in the case of wiring harness routing clips, PA66 is indispensable for engine room uses that require high heat resistance, but the company will be replacing PA66 with PA6, polypropylene, and other inexpensive alternative materials for other uses such as indoor parts that do not require high heat resistance. (From an article in the Nikkan Jidosha Shimbun on June 18, 2019)
Capital Investment |
(in millions of JPY) |
| FY ended Mar. 31, 2020 | FY ended Mar. 31, 2019 | |
| Automotive sector | 3,819 | 5,005 |
Investment outside Japan
-The Company will start production of automotive drive system parts at its plant in Wuhan, Hubei Province, China, in order to respond to increasing demand from local automakers. Together with its existing plant in Dongguan, Guangdong Province, the company will have two drive system plants in China. The total investment will be about JPY 430 million, and production is scheduled to start in January 2020. Piolax plans to quadruple its sales (mainly of drive system parts, fuel system parts, and electrification parts) for Chinese automakers in the fiscal year that ends in March 2022 (FY 2021) from the results of FY 2018. The company increasingly receives orders for drive system parts, such as snap rings (retaining rings) and transmission retainers. Since the existing plant in Dongguan is not able to meet demand, new production lines for drive system parts will be installed at the company’s existing plant in Wuhan. The Wuhan Plant will produce for customers in northern and eastern China, and Dongguan Plant for southern regions. (From an article in the Nikkan Jidosha Shimbun on June 26, 2019)