Financial Overview

(in millions of JPY)

	FY2009	FY2008	Rate of Change (%)	Factors
Overall
Sales	70,442	90,152	(21.9)	-Sales decreased as a result of a decline in automotive sales volume worldwide.
Operating income	1,455	(1,223)	-	-Operating and ordinary income increased as a result of the Company improving productivity and reducing fixed costs.
Ordinary income	1,901	1,393	-
Net income	349	1,812	-
Automotive Component Business
Sales	63,396	71,248	(11.0)	-
Operating income	6,193	2,421	155.8	-

 

Business Results Forecast

(in millions of JPY)

	FY2010	FY2009 (actual)	Rate of change (%)
Sales	75,000	70,442	6.5
Operating income	2,200	1,455	51.2
Ordinary income	2,400	1,901	26.2
Net income	1,550	349	344.1

Sales Forecast by Business

(in millions of JPY)

	FY2010	FY2009 (actual)	Rate of change (%)
Bearings	29,600	26,146	13.2
Die-casting	12,810	13,355	(4.0)
Gaskets	9,800	9,342	4.9
ASSY products	14,260	14,551	(2.0)
Equipment	8,360	6,831	22.3

Sales Forecast by Customer

(in millions of JPY)

	FY2010	FY2009 (actual)	Rate of change
Toyota	44,300	43,152	2.7%
Toyota group	10,900	9,730	12.0%
Others	19,800	17,560	12.8%

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)

R&D Expenditure

(in millions of JPY)

	FY2009	FY2008	FY2007
Overall	1,499	1,465	1,501
Automotive parts business	1,419	1,428	1,408

R&D Structure

-The Company set up its R&D structure so that it can address diverse issues under a consolidated framework consisting of several divisions such as the basic research division dealing with tripology (friction/wear/lubrication technology) and other themes; the product development division; and the production technology development division, all working at the  Main Technology Building.
-In addition to the above, the Company also has a friction technology research center, an engine experiment center, and a production technology development center.

R&D Activities

Automotive Parts Business
1. Bearing Business:
-The Company was successful in producing engine bearings, which are compatible with high performance engines; special bearings, which are used in compressors; and also various other bearings.
-In the area of engine bearings, the Company developed and launched both copper and aluminum bearings with overlays that are both completely lead-free.
-The company successfully developed overlay materials using lead-free, solid lubricants to meet recent needs for enhanced engine performance. These materials are being used on major vehicle models in and outside Japan. The Company was successful in conducting sales activities that increased its global presence, as it won new supply agreements from overseas makers with which it had never transacted business before.
-The Company developed overlay materials which use lead-free solid lubricant.
-The Company developed soft metal overlay materials.

-The Company completed a line up of lead-free bushes and applied them to transmissions and other products.
-The Company developed and commercialized copper bearing materials that don't contain lead in the material used for skew plates, special bearings used for compressors in automotive air conditioners.

2. Die-casting products

-The Company developed and commercialized sleeves for oil control valves. It is currently supplying them to manufacturers both at home and abroad.
-The Company developed and commercialized cam housings and oil filter brackets. It further conducted development activities on highly functional components such as differential gear carriers.

3. Electronics assembly business
-The Company developed and commercialized coils and core assemblies for solenoid valves, parts for continuous variable valve timing systems, and EGR valves for small-diesel and large-diesel engines.
-The Company developed and mass-produced electronically controlled EGR valves that respond to the new long-term exhaust emission regulation for commercial vehicles enforced in October 2005 in Japan; and the 2010 exhaust emissions regulations in the U.S.A.
-The Company developed and commercialized cam housings and is currently conducting R&D activities to expand their application to more sophisticated parts such as differential carriers.

 

4. Balance weight business
-The Company commercialized lead-free balance weights. It was successful in developing lead-free, clip-on balance weights like those being used in overseas markets.
-The Company The Company also started commercial production of stick-on balance weights.

5. Gasket business
-The Company's subsidiary, Nippon Gasket, enhanced its development capabilities in the area of metal-head gaskets.

Capital Expenditure

(in millions of JPY)

	FY2009	FY2008	FY2007
Overall	1,890	7,193	9,645
Automotive Parts Business	1,654	7,468	9,066

Automotive Parts Business

-The Company made capital investments to improve production efficiency and maintain and update production facilities.
-The Company made capital investments to prepare facilities for producing new products and maintain and update facilities at its consolidated subsidiaries in Japan. The Company invested mainly in die-cast production facilities at its major subsidiary, Taiho Gifu Co., Ltd.
-The Company made capital investments to increase the production capacities at facilities located at its consolidated subsidiaries in Asia. Mainly, the Company invested at its major subsidiary, Taiho Kogyo Corporation of Yantai, to construct a new plating plant in order to increase the production capacity and the improve production efficiency of die-cast products.

New Facilities (Automotive Parts Business)

-The Group plans to invest 2.9 billion yen in FY2010, which ends on March 31, 2011. The breakdown of major investments is as follows.

Plant	Facilities to be built	Planned investment (million JPY)	Objective
Taiho Kogyo Co., Ltd.
Headquarters and Headquarters plant (Aichi Pref., Japan)	Production facilities to manufacture die casting products	135	Maintenance
Hosoya plant (Aichi Pref., Japan)	Production facilities to manufacture bearings, etc.	764	New products
Shinohara plant (Aichi Pref., Japan)	Production facilities to manufacture assembly products	132	Maintenance
Kyushu plant (Kagoshima Pref., Japan	Production facilities to manufacture bearings, etc.	6	Streamlining
Koukai plant (Aichi Pref., Japan)	Production facilities to manufacture bearings, etc.	77	Maintenance
Subsidiaries
Headquarters and Headquarters plant (Aichi Pref., Japan)Taiho Seiki Co., Ltd.	Facilities where design and development activities can be conducted, and facilities for manufacturing automotive suspension components	120	Maintenance, updating, streamlining, and increasing production capacity
Kasugai plant (Aichi Pref., Japan)TET Co., Ltd.	Processing facilities	57	Maintenance
Headquarters and Headquarters plant (Gifu Pref., Japan) Taiho Gifu Co., Ltd.	Production facilities to manufacture die casting products	139	Expansion, increasing production capacity
Headquarters (Aichi Pref., Japan)Nippon Gasket Co., Ltd.	Renovation of headquarters building	97	Increasing production capacity
	Production facilities to manufacture gasket products	35	Research and development, new products
Shiga Plant (Shiga Pref., Japan)Nippon Gasket Co., Ltd.	Production facilities to manufacture gasket products	238	Streamlining, increasing production capacity
	Renovations of building exteriors	60	Maintenance
Headquarters and Headquarters plant (Ohio, USA)Taiho Corporation of America	Production facilities to manufacture bearings, etc.	105	New products, maintenance
	Expanding existing buildings, etc.	20	Increasing production capacity
Headquarters and Headquarters plant (Karawang, Indonesia)PT. Taiho Nusantara	Production facilities to manufacture bearings, etc.	25	New products, maintenance and update
	Expanding existing buildings, etc.	10	Increasing production capacity
Headquarters and Headquarters plant (Ujhartyan, Hungary)Taiho Corporation of Europe	Production facilities to manufacture bearings, etc.	53	Increasing production capacity; streamlining, maintenance and updating facilities
Headquarters and Headquarters plant (Daegu, Korea)Taiho Corporation of Korea	Production facilities to manufacture bearings, etc.	30	Increasing production capacity; maintenance and updating facilities
Headquarters and Headquarters plant (Yantai, China)Taiho Kogyo Corporation of Yantai	Production facilities to manufacture bearings	127	Increasing production capacity