Riken Corporation Business Report FY ended Mar. 2013
Business Highlights
Financial Overview |
(in millions of JPY) |
FY ended Mar. 31, 2013 | FY ended Mar. 31, 2012 | Rate of Change(%) | Factors | |
Overall | ||||
Sales | 71,543 | 75,650 | (5.4) | 1) |
Operating income | 4,721 | 5,444 | (13.3) | - |
Ordinary income | 6,078 | 6,905 | (12.0) | |
Current net income | 3,645 | 4,051 | (10.0) | |
Automotive/Industrial Machinery Component Division | ||||
Sales | 59,565 | 63,265 | (5.8) | - |
Operating income | 3,940 | 4,381 | (10.1) | - |
Factor
1) Financial Results
-Sales decreased year-over-year due to a drop in demand for automotive components in the second half of the year and slow sales in other business fields. Declining motorcycle sales in Indonesia negatively affected the Company's business as well.
New Company
-The Company announced that it has established Riken Mexico S.A. de C.V., a subsidiary to manufacture and sell engine parts in Mexico. The new plant will start operations in July 2014. Following plans announced by Japanese automakers to increase their production volumes in Mexico, the group intends to develop an efficient local supply system to win new programs. The facility will be located on approximately 20,000 square meters of land in Aguas Calientes. It will be capitalized at 100 billion pesos (approximately 600 million yen), involving a total investment of about 1.7 billion yen. The subsidiary will initially produce engine valve lifters with a plan to add other products to its lineup if required. (From an article in the Nikkan Jidosha Shimbun on Nov. 26, 2012)Mid-term Business Plan
-The Company has mapped out its new midterm business plan for fiscal year 2012 through 2015. Focus will be placed on expanding its business overseas, especially in the emerging markets, while investing heavily in new business areas. In Japan, it is going to enhance its manufacturing technology further to accelerate development of environmentally friendly components for next-generation vehicles. The company is poised to improve its cost efficiency in the extremely competitive international market in an effort to win more business. Based on its projection that internal combustion engine will remain the dominant drive source in the foreseeable future, Riken will strive to develop technologies that support biofuel and other alternative fuel engines, turbocharged direct-injection engines for compact vehicles, and fuel saving systems, use of which are growing significantly. In addition, it plans to launch new business for next-generation vehicles by leveraging its area of expertise. (From an article in the Nikkan Jidosha Shimbun on July 10, 2012)>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
R&D
R&D Expenditure |
(in millions of JPY) |
FY ended Mar. 31, 2013 | FY ended Mar. 31, 2012 | FY ended Mar. 31, 2011 | |
Group | 1,299 | 1,347 | 1,286 |
Automotive/Industrial Machinery Component | 1,105 | 1,233 | 928 |
R&D Structure
-The Next-Generation Product Planning Division inaugurated its planning activities with the aim of creating new products in areas with high growth potential such as hybrid and electric vehicles.-R&D activities in the Automotive/Industrial Machinery Component Business are conducted by the R&D Department, Piston-ring Technological Development Department, Piston-ring Production Technology Department, and the product development and production technology sections at each of the manufacturing divisions.
R&D Activities
-Automotive/Industrial Machinery Components1. Low friction and long-lasting gasoline-engine piston rings that lower fuel consumption.
2. Diesel engine piston rings to meet requirements for low fuel consumption and emission regulations.
3. Low-friction automotive and industrial machinery seal parts, designed to lower fuel consumption
4. Light-weight, low-friction, automotive and industrial machinery valves
5. Surface treatment technology that responds to all kinds of surfaces, and which enhances the gliding properties of products.
6. Light-weight, high-strength suspension parts
7. High-strength aluminum-made products demonstrating excellent durability
Technology licensing-out Agreement |
(As of Mar. 31, 2013) |
Company name | Country | Contract | Contract date | Contract period |
Taiwan Riken Ind. Co., Ltd. | Taiwan | Manufacturing methods for various forged steel engine components such as piston rings, cylinder liners, blocks, cam shaft, and knuckles | Aug. 22, 2005 | Terms for extending the agreement are subject to negotiation |
Siam Riken Ind. Co., Ltd. | Thailand | Manufacturing methods for piston rings and other forged steel engine components | Apr. 19, 2009 | 5 years |
P.T. Pakarti Riken Indonesia | Indonesia | Manufacturing methods for joint and forged parts | Jan. 1, 2006 | 10 years |
Shriram Pistons & Rings Ltd. | India | Manufacturing methods for piston rings | Mar. 1, 2007 | 7 years |
Allied Ring Corporation | USA | Manufacturing methods for piston rings | Jan. 1, 2009 | 5 years |
Grede Holdings LLC | USA | Manufacturing methods for knuckles and damper forks | Aug. 17, 2010 | 5 years |
Manufacturing methods for lower control arm | Aug. 17, 2010 | 5 years | ||
Korea Piston Ring Inc. | Korea | Manufacturing methods for piston rings | Mar. 1, 2010 | 5 years |
Xiamen Riken Ind. Co., Ltd. | China | Manufacturing methods for piston rings | Aug. 1, 1999 | 14 years |
Manufacturing methods for camshafts | Oct. 1, 2004 | 9 years | ||
Riken Automobile Parts (Wuhan) Co., Ltd. | China | Manufacturing methods for piston rings, seal rings, valves and other cast iron products. | Mar. 1, 2005 | 10 years |
Investment Activities
Capital Expenditure |
(in millions of JPY) |
FY ended Mar. 31, 2013 | FY ended Mar. 31, 2012 | FY ended Mar. 31, 2011 | |
Group | 4,899 | 2,848 | 2,305 |
Automotive/Industrial Machinery Component | 4,439 | 2,653 | 1,773 |
Automotive/Industrial Machinery Component Division
-The Company invested in machining and surface-treatment facilities at its own plants in general; and in casting facilities at its subsidiary in Indonesia.
Planned Capital Investments |
(As of Mar. 31, 2013) |
Company Office |
Location | Purpose | Planned investment amount (in millions of JPY) |
Kashiwazaki Plant | Niigata Prefecture, Japan | Installing production facilities for making piston rings and auto parts | 1,461 |
Riken Mexico, S.A. De C.V. | Aguascalientes, Mexico | Installing new equipment to produce auto parts | 796 |
P.T. Pakarti Riken Indonesia | Surabaya, Indonesia | Installing new equipment to produce auto parts | 1,478 |