Ahresty corporation Business report FY2007

Business Highlights

Financial overview ( in millions of JPY )
FY2007 FY2006 Rate of Change(%) Factors
Overall
Sales 129,362 122,761 5.4 -
Operating income 5,821 7,944 (26.7) -
Ordinary income 6,185 7,934 (22.0) -
Net income 3,363 7,528 (55.3) -
Die Casting Division
Sales 116,625 109,686 6.5 Sales increased, thanks to stronger exports to emerging countries, though sales to its main customers (domestic automakers) declined due to slowdowns in their sales in Japan and North America, with sluggish sales in North America attributed to the sub-prime loan problem.
Operating income 5,019 7,183 (30.1) Income declined largely because of increased depreciation costs incurred due to tax revisions. This is despite the Company's efforts to cut sales and manufacturing costs.
Aluminum Division
Sales 7,700 7,806 1.4 Sales declined, as the Company's shipments of non-automotive products were slow in and after the third quarter because of lower demand and customers' curtailing their inventory, even though its sales of secondary alloy metals in the automotive industry were strong.
Operating income 395 436 (9.4) Income declined, as the Company failed to absorb the increased costs of materials and heavy oil, even though it tried to improve productivity and lower manufacturing costs.


Recent Developments in Japan

Reorganization and Enhancement of Production Structure
In Aug. 2007, the Company announced that Ahresty Light Metal (Toyohashi City, Aichi Pref.), its wholly-owned subsidiary, will be merged with Ahresty Corporation as of Oct. 1, 2007. Ahresty Light Metal will, consequently, be dissolved following the completion of the merger transaction. Ahresty Light Metal, located in the premises of the Company's Toyohashi plant, supplies die-casting products to the Company. (From a press release on August 30, 2007)

In Oct. 2007, the Company announced the planned merger of two of its consolidated companies, Hamamatsu Mechatec and Tokai Seikou. The Company has decided to merge the two companies as of January 1, 2008 (yet to be finalized) in order to facilitate the better use of management resources available among its group companies and improve its overall operational efficiency as an integrated group. Consequently Hamamatsu Mechatec will be dissolved and merged with Tokai Seikou. Following the completion of the merger the newly-organized entity carries the trade name of Tokai Seikou which serves as a surviving company in the transaction. (From a press release on Oct. 23, 2007)

In Oct. 2007, the Company announced the plan to reorganize its production facilities in Japan in order to expand capacity to produce automotive specialty casting components. The company will move its production of small and mid-sized die-cast components from its Higashimatsuyama plant in Namegawa-machi, Saitama prefecture to its subsidiary Ahresty Yamagata Corporation in Shirataka-machi, Yamagata prefecture, integrating the production of such components at the subsidiary company. As a result, the Higashimatsuyama plant will become Ahresty's production center exclusively for specialty forging components for drivetrains. The supplier will invest approximately 2 billion yen to enlarge facilities and add equipment at both production plants. (From an article in the Nikkan Jidosha Shimbun on Oct. 27, 2007)

Recent Developments Outside Japan

- Ahresty Mexicana, S.A. de C.V.., its subsidiary in Mexico, began production and sales activities in August 2007.
- Ahresty India Private Limited, its subsidiary in India, is scheduled to start production and sales activities in the autumn of 2008.

R&D

R&D Expenditure ( in millions of JPY )
FY2007 FY2006 FY2005
Group 1,271 1,154 663

R&D Structure
-The Company's R&D activities are focused on its die-cast products business, lead by its Engineering Department.

R&D Activities (for FY2007 which ended in March 2008)


- The Company developed and tested NI casting drivetrain components as part of its efforts to offer products that are designed based on market analysis but which provide new features. It also worked on developing high-strength engine blocks that target next-generation diesel vehicles.
- The Company is now trying to completely solve problems in mass-producing aluminum die-cast automotive body frames as part of its efforts to develop technology to create new markets. By taking part in initiatives to make lighter vehicles, the Company intends to help conserve the global environment.

Investment Activities

Investment Expenditure

( in millions of JPY )

FY2007 FY2006 FY2005
Group 10,298 12,391 13,590
Die Casting Division 10,070 12,216 13,469

In Oct. 2007, the Company announced the plan to reorganize its production facilities in Japan in order to expand capacity to produce automotive specialty casting components. The company will move its production of small and mid-sized die-cast components from its Higashimatsuyama plant in Namegawa-machi, Saitama prefecture to its subsidiary Ahresty Yamagata Corporation in Shirataka-machi, Yamagata prefecture, integrating the production of such components at the subsidiary company. As a result, the Higashimatsuyama plant will become Ahresty's production center exclusively for specialty forging components for drivetrains. The supplier will invest approximately 2 billion yen to enlarge facilities and add equipment at both production plants. (From an article in the Nikkan Jidosha Shimbun on Oct. 27, 2007)

Major Facilities Completed in FY2007, which ended in March 2008 (Die-Cast Business)

Facilities and Subsidiaries Details/Activities
Hamamatsu Plant Additional production facilities
Toyohashi Plant Additional production facilities
Ahresty Mexicana, S.A. de C.V. New casting plant, new machining plant, new production facilities
Ahresty Tochigi Additional production facilities


Current capital investments (As of March 31, 2008)
Name
(Location)
Type of facility Planned investment (million JPY) Start month Planned completion Increased capacity upon completion
Ahresty Corporation
Toyohashi Plant
(Toyohashi-shi, Aichi Pref.)
Die casting manufacturing facilities 578 Apr., 2008 Sep., 2008 +6%
Die casting
designing facilities
1,232 Apr., 2008 Feb., 2009 -
HIgashimatsuyama Plant (Namekawa-cho, Saitama Pref..) Die casting manufacturing facilities 863 Apr., 2008 Nov., 2008 -
Die casting
designing facilities
288 Apr., 2008 Nov., 2008 -
Subsidiaries
Ahresty Tochigi Corporation (Shimotsuga-gun, Tochigi Pref.) Die casting
designing facilities
141 Apr., 2008 July, 2008 +7%
Ahresty Yamagata Corporation
(Nishiokitama-gun, Yamagata Pref..)
Die casting manufacturing facilities 314 Apr., 2008 Oct., 2008 +40%
Die casting
designing facilities
410 Apr., 2008 Mar., 2009 -
Tokai Seiko Co., Ltd.
(Hamamatu-shi, Shizuoka Pref..)
Die casting
designing facilities
319 Apr., 2008 Dec, 2008 -
Ahresty Precision Die Mold (Guangzhou) Co., Ltd.
(Guangdong, China)
Die casting manufacturing facilities 211 Apr., 2007 Mar., 2008 +13%
Die casting
processing facilities
966 Apr., 2007 Mar., 2008 -
Ahresty Wilmington Corp.
(Ohio, USA)
Die casting
processing facilities
1,328 Apr., 2008 Oct., 2008 -
Ahresty Mexicana, S.A. de C.V.
( Zacatecas, Mexico)
Die casting manufacturing facilities 1,106 Apr., 2008 Oct., 2008 +140%
Die casting
processing facilities
1,380 Apr., 2008 Dec, 2008 -
Ahresty India Private Limited
(Haryana, India)
Die casting manufacturing facilities 756 Apr., 2008 Sep., 2008 -