Nifco Inc. Business Report FY ended Mar. 2016
Financial Overview |
(in million JPY) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | Rate of change (%) |
Factors | |
| Overall | ||||
| Sales | 265,683 | 225,415 | 17.9 | - |
| Operating income | 27,574 | 20,975 | 31.5 | - |
| Ordinary income | 26,374 | 20,626 | 27.9 | - |
| Profit for the year attributable to owners of the parent | 17,742 | 12,901 | 37.5 | - |
| Composite plastic molded products | ||||
| Sales | 239,185 | 201,768 | 18.5 | 1) |
| Operating income | 29,591 | 22,864 | 29.4 | |
1) Composite plastic molded products
-The production volume of new vehicles in Japan significantly fell y/y due to temporary production stoppages by some OEMs and sluggish sales of minicars. As a result, the automotive business in Japan faced severe difficulties.
-Nevertheless, sales rose y/y because the value of the Company’s product-content ratio on new model vehicles rose and sales of vehicles destined for export from Japan increased.
-Sales to both Japanese and Korean OEMs outside Japan continued to be robust.
-In addition to continued strong sales in North America and China, in Europe, the synergy effects from the Company’s acquisitions of KTS and KTW in Germany, started to materialize.
-As a result of expanding both its customer base and product range, the Company was able to increase sales of new products to regions besides Europe, through delivering products globally and making use of the Group’s sales network. As a result, sales rose significantly. Profits grew tremendously due to the effects of business improvement initiatives at major operations, even after being offset by the high valuation of the yen that started appreciating from 2016.
Nifco KTS Designated Strategic Partner by Volkswagen
-Volkswagen AG has nominated a total of 55 strategic partners for 61 fields of competence under its "Volkswagen Future Automotive Supply Tracks" (FAST) initiative. 44 suppliers were already nominated in the first wave last year. Now, further partners for 13 fields of competence have been defined. The recently defined strategic FAST partners and their respective fields of competence are: Faurecia S.A. (exhaust systems), Johnson Matthey Plc (coatings for catalysts & particulate filters), Gestamp Automocion S.A. (skin parts), BorgWarner Inc. (turbochargers), Lear Corporation (complete seating assemblies), and Nifco KTS GmbH (kinematic components). (From a press release on May 23, 2016)
New Subsidiary Established
-The Comapany announced that its Korean subsidiary, Nifco Korea Inc., has established a new company in Chongqing, China. The new company, Nifco Chongqing, will produce plastic parts for automobiles and supply them to a Korean automaker's facility in Chongqing. It is capitalized at CNY 76 million (approximately JPY 1.5 billion), of which 75% was provided by Nifco Korea and 25% was provided by Nifco Hong Kong. (From a press release on October 27, 2015)
-Nifco Inc. announced that its German subsidiary, Nifco KTW GmbH, has established a new company in Georgia, USA. The new subsidiary, Nifco KTW America Corporation, will manufacture and sell plastic parts for automobiles. It is capitalized at USD 200 million (JPY 2.4 billion), of which 90% was provided by Nifco KTW and 10% was provided by Nifco America. The new company will supply its products to a German automaker's North American facility. (From a press release on October 27, 2015)
Acquisition
-The Company will acquire German automotive plastic parts supplier, KTW GmbH & Co. KG and its group companies. Nifco will buy all shares of the group to convert it into its subsidiary. After settling the purchase price and other details, the Company aims to conclude the acquisition in a few months. The KTW Group manufactures and sells automotive plastic parts such as instrument panels and door trims. In 2013, its revenue increased by 11.3% year-over-year to JPY 8.4 billion. KTW's sole plant is located in Bavaria. The group deals mostly with German automakers, with sales to BMW accounting for more than half of the total. The Company intends to enhance its business in Europe by expanding business with the German automakers. The Company's global sales network will help it supply to the German automakers' plants located around the world. (From an article in the Nikkan Jidosha Shimbun on April 23, 2014)
Restructuring
-The Company announced that it will reorganize its operations in Japan. It will close down its Utsunomiya Plant (Tochigi Prefecture) that produces automotive plastic fasteners at the end of December 2015. Production will be transferred to Nifco-Yamagata Inc. (Yamagata Prefecture), which will double production after the transfer. Nifco will also realign its sales operations by shutting down its Kyushu Office (Fukuoka Prefecture) at the end of March 2015. The Kyushu Office's sales activities will be covered by both the Company's Hiroshima Office and Nifco Kumamoto Inc., a subsidiary in Kumamoto, Kyushu. The Company aims to become more competitive in the growing international market by streamlining its operations in the domestic market, where vehicle production is falling. (From an article in the Nikkan Jidosha Shimbun on February 12, 2015)
-The Company announced that it will dissolve its Chinese subsidiary, Nifco Enterprise Management (Shanghai) Co., Ltd., around January 2016. The subsidiary is engaged in supporting sales and technical operations and overseeing its group companies in China. (From a press release on March 23, 2015)
-The Company will consolidate its automotive resin parts manufacturing subsidiaries in Germany as of December 31, 2014. The Company's fully owned subsidiary, Nifco Germany GmbH, will be the surviving company and will absorb KTW and KTW Group companies that manufacture automotive resin parts. In April 2014, the Company has acquired all shares in KTW and KTW Group companies to make them its fully owned subsidiaries. (From an article in the Nikkan Jidosha Shimbun on December 17, 2014)
Mid-term Business Plan (Nifco Innovation Plan 2020)
-Numerical Targets
| FY ended Mar. 31, 2015 (Actual Results) |
FY ending Mar. 31, 2018 (First phase) |
FY ending Mar. 31, 2021 (2nd phase) |
|
| Overall | |||
| Sales | 225.4 billion yen | 270.0 billion yen | 330.0 billion yen |
| Operating income | 20.9 billion yen | 31.0 billion | 38.0 billion yen |
| Profit ratio | 9.3% | 11.5% | 11.5% |
| Net income | 12.9 billion yen | 20.0 billion yen | 25.5 billion yen |
-The Company has announced targets in its new mid-term business plan for the fiscal year ending in March 2016 (FY 2015) through FY 2017. The mid-term plan aims to increase net sales by 19.8% to JPY 270 billion, operating profit by 48.3% to JPY 31 billion, and operating profit ratio by 2.2 percentage points to 11.5% from the figures in FY 2014. During the mid-term, the company intends to achieve higher performance through well-balanced product lineup and business structure, enhance profitability in its global operations, establish a global quality assurance system, and improve its capital efficiency. (From an article in the Nikkan Jidosha Shimbun on May 14, 2015)
Growth strategies for the automotive market
Launching operations for manufacturing powertrain products
-Expanding sales to Japanese and non-Japanese OEMs
-Enhancing production operations and acquiring knowledge on new production methods
-Consider consolidating fuel products operations
Expanding sales to European OEMs worldwide
-Launching operations of Nifco KTW in North America
-Expanding new business with VW
-Finding synergy effects between KTS and KTW
Developing high, value-added products
-Strengthening product-development activities targeting VW
-Strengthening product-development activities targeting application suppliers
-Launching R&D centers outside Japan
Create synergies through M&As and alliances
-Forming alliances for future developments
-Acquiring new production methods
-Forming alliances in new sectors and for strengthening new-product-developments
-Forming alliances that are mutually beneficial and which create synergy effects
Outlook for FY ending 2017
|
(in million JPY) |
| FY ending Mar. 31, 2017 (Forecast) |
FY ended Mar. 31, 2016 (Actual Results) |
Rate of Change (%) |
|
| Overall | |||
| Sales | 250,000 | 265,683 | (5.9) |
| Operating income | 27,600 | 27,574 | 0.1 |
| Ordinary income | 26,500 | 26,374 | 0.5 |
| Profit for the year attributable to owners of the parent | 16,500 | 17,742 | (7.0) |
-The above figures are the forecasts for the fiscal year that ends in March 2017, which is based on expected growth from greater sales volumes, while taking into account the effect of currency translations.
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income, etc.)
R&D Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | |
| Overall | 3,111 | 2,733 | 2,492 |
| -Composite plastic molded products | 3,091 | 2,720 | 2,468 |
-The Company plans to invest JPY 3,300 million for R&D activities during FY ending Mar. 2017.
R&D Structure
-R&D activities on technology designed to respond to future markets are being conducted mainly at the Nifco Technology Development Centre.
-In the fiscal year that ended in March 2015, in line with its relocating the headquarters to Yokosuka in a building next to the Yokosuka Research Park, the Company consolidated the Yokosuka and Nagoya R&D functions.
-The testing facility and explosion-proof testing facility that were started to be built in the fiscal year that ended in March 2016 and which are located between the home office and the R&D center, are scheduled to be completed during the fiscal year that ends in March 2017. Once completed, these facilities will enhance the Company’s capabilities in terms of verifying the capabilities of powertrain and fuel-system products, meeting the needs for greater functionality and higher quality.
R&D Activities
Automotive Products
-Energy-saving solutions: The Company focused on developing products that contribute to saving weight and improving efficiencies in automobiles. Especially, the Company worked on developing products for powertrains, which directly improve fuel efficiency; and products that contribute to saving weight, by switching the base material from metal to plastic.
-Environmental solutions: The Company finished developing new fuel-system parts that are compliant with the evaporative hydrocarbon emission regulations in the U.S.
-Safety products/technology: The Company developed related products for collision-reduction brake parts and related products for obstacle-detection sensors.
Technical Alliance Agreements |
(As of Mar. 31, 2015) |
| Company Name (Location) |
Contract Coverage | Contract Term |
| Illinois Tool Works Inc. (USA) |
Plastic buckles | Until Aug. 27, 2023 |
Technology Licensing-out Agreement |
(As of Mar. 31, 2015) |
| Company Name (Location) |
Contract Coverage | Contract Term |
| Nifco Taiwan Corporation (Taiwan) |
Manufacturing technology for plastic buckles and industrial-use fasteners | Until Dec. 31, 2020 |
| Nifco Korea Inc. (Korea) |
Manufacturing technology for plastic buckles and industrial-use fasteners | Until Dec. 31, 2019 |
| Union Nifco Co, Ltd. (Thailand) |
Production technology for plastic buckles, and fastener assemblies made of plastic and metal | Until June 30, 2017 |
| Nifco Manufacturing (Malaysia) Sdn. Bhd (Malaysia) |
Manufacturing technology for plastic buckles and industrial-use fasteners | Until Dec. 31, 2019 |
| Nifco (Hong Kong) Ltd. (Hong Kong) |
Production technology for plastic buckles, and fastener assemblies made of plastic and metal | Until Dec. 31, 2019 |
| Nifco U.K. Ltd. (UK) |
Production technology for industrial-use plastic parts, and assemblies that include non-plastic parts and materials | Until Dec. 31, 2019 |
| Nifco America Corporation (USA) |
Production technology for industrial-use plastic parts, and assemblies that include non-plastic parts and materials | Until Dec. 31, 2019 |
| Nifco Products Espana S.L.U. (Spain) |
Production technology for buckles and industrial-use plastic parts, assemblies that include non-plastic parts and materials, and dies for these respective parts and their finished products | Until Dec. 31, 2019 |
| Shanghai Nifco Plastic Manufacturer Co., Ltd. (China) |
Production technology for plastic and metal fastening parts/finished products; composite products made of plastic and metal parts; and dies for buckles and these parts and finished products | Until Dec. 31, 2019 |
| Boosung Industrial Corporation (Korea) |
Production technology for plastic buckle parts and industrial-use plastic parts; assemblies that include non-plastic parts and materials, and dies for these respective parts and their finished products | Until Dec. 31, 2017 |
| Dongguan Nifco Co., Ltd. (China) |
Production technology for plastic and metal fastening parts/finished products; composite products made of plastic and metal parts; and dies for buckles and these parts and finished products | Until Dec. 31, 2019 |
| Nifco (Thailand) Co., Ltd. (Thailand) |
Production technology for plastic buckle parts and industrial-use plastic parts; assemblies that include non-plastic parts and materials, and dies for these respective parts and their finished products | Until Dec. 31, 2019 |
| Tifco (Dongguan) Co., Ltd. (China) |
Production technology for plastic and metal fastening parts/finished products; composite products made of plastic and metal parts; and dies for buckles and these parts and finished products | Until Dec. 31, 2016 |
| Beijing Nifco Co., Ltd. (China) |
Production technology for plastic and metal fastening parts/finished products; composite products made of plastic and metal parts; and dies for buckles and these parts and finished products | Until Dec. 31, 2020 |
| Nifco Poland Sp.zo.o. (Poland) |
Production technology for industrial-use plastic parts; assemblies that include non-plastic parts and materials, and dies for these respective parts and their finished products | Until Dec. 31, 2019 |
| Nifco Vietnam Ltd. (Vietnam) |
Production technology for industrial-use plastic parts; assemblies that include non-plastic parts and materials; and dies for these respective parts and their finished products | Until Dec. 31, 2018 |
| Nifco (Tianjin) Co. Ltd. (China) |
Production technology for plastic and metal fastening parts/finished products; composite products made of plastic and metal parts; and dies for buckles and these parts and finished products | Until Dec. 31, 2019 |
| Nifco India Private Ltd. (India) |
Production technology for industrial-use plastic parts; assemblies that include non-plastic parts and materials; and dies for these respective parts and their finished products | Until Dec. 31, 2019 |
| Nifco (Hubei) Co., Ltd. (China) |
Production technology for plastic and metal fastening parts/finished products; composite products made of plastic and metal parts; and dies for buckles and these parts and finished products | Until Dec. 31, 2019 |
| Nifco Korea USA Inc. (USA) |
Production technology for plastic buckles and industrial-use plastic parts; assemblies that include non-plastic parts and materials; and dies for these respective parts and their finished products | Until Dec. 31, 2020 |
| Nifco (Jiangsu) Co., Ltd. (China) |
Production technology for plastic and metal fastening parts/finished products; composite products made of plastic and metal parts; and dies for buckles and these parts and finished products | Until Dec. 31, 2019 |
| Nifco South India Manufacturing Private Ltd. (India) |
Production technology for plastic buckles and industrial-use plastic parts; assemblies that include non-plastic parts and materials; and dies for these respective parts and their finished products | Until Dec. 31, 2017 |
| Nifco (Yancheng) Co., Ltd. (China) |
Production technology for plastic and metal fastening parts/finished products; composite products made of plastic and metal parts; and dies for buckles and these parts and finished products | Until Dec. 31, 2016 |
| PT. Nifco Indonesia (Indonesia) |
Production technology for plastic buckles and industrial-use plastic parts; assemblies that include non-plastic parts and materials; and dies for these respective parts and their finished products | Until Dec. 31, 2019 |
| Nifco Korea Poland Sp. z o.o. (Poland) |
Production technology for industrial-use plastic parts; assemblies that include non-plastic parts and materials; and dies for these respective parts and their finished products | Until Dec. 31, 2017 |
| Nifco Central Mexico S.de R.L.de C.V. (Mexico) |
Production technology for plastic buckles and industrial-use plastic parts; assemblies that include non-plastic parts and materials; and dies for these respective parts and their finished products | Until Dec. 31, 2019 |
Capital Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | |
| Overall | 21,488 | 20,796 | 21,166 |
Composite plastic molded products (FY ended Mar. 2016)
-The Company spent JPY 6,876 million in capital investments to establish the new headquarters office in Yokosuka and the Yamagata Plant, to install facilities to manufacture dies so as to respond to new orders for products placed by Japanese OEMs, and to install facilities and equipment for fuel-system products.
-Nifco America Corporation spent JPY 1,273 million to install facilities for fuel-system products; and forming machines.
-Nifco (HK Ltd.) spent JPY 2,301 million mainly on the construction of a new production plant. Nifco (Yancheng) Co., Ltd. (in China) spent JPY 1,736 million mainly on die facilities and forming machines. And JPY 6,285 million was spent in the Asian region mainly for facilities and equipment.
Planned Capital Investments (Composite plastic molded products) |
(As of Mar. 31, 2016) |
| Company/ Facility (Location) |
Targeted Investment | Investment Amount (in million JPY) |
From | To |
| Nifco KTW America Corporation (Georgia, USA) |
New plant | 3,088 | May 2015 |
May 2016 |
| Nifco (HK) Ltd. (Hong Kong, China) |
New plant | 2,457 | Sep. 2013 |
Apr. 2016 |
| The Company | Construction of testing facility | 1,404 | Oct. 2015 |
Jul. 2016 |
| Nifco (Chongqing) Limited Liability Company (China) |
New plant | 1,308 | Dec. 2015 |
|