ALPHA Corpolation Business report FY2006
|in million JPY||FY2006||FY2005||Rate of Change (%)||Factors|
|Operating income||1,949||3,307||(41.1)||- Operating
income dropped drastically because the Company incurred costs
to cope with customer claims in the auto parts market.
- The Company had to pay extra costs to offset sluggish growth in its yielding percentage, which was something the Company hadn't anticipated in its initial plan.
|Automobile Parts Business|
|Sales||40,804||39,989||2.0||Although vehicle sales by its major customers in the global market were down by 2.4% year-on-year, the content rate of intelligent keys, a value-added product, grew worldwide.|
|Operating income||1,318||2,609||(49.5)||- Operating income
was affected by a sharp rise in materials prices.
- The Company failed to improve the yielding percentage at its Mexican subsidiary, suffering from increased materials costs and other expenses.
- The Company incurred costs to deal with issues involving product quality.
A coating plant was completed in October 2006 at Alpha (Guangzhou) Automotive Parts Co., Ltd., established to strengthen its businesses in China. By establishing this plant, the Company was able to build a seamless production structure, from molding, coating, and galvanizing up to assembly activities at the subsidiary.
- Sales at its Thai subsidiary steadily increased.
- The Company decided to expand the plant at its Mexican subsidiary, Alpha HI-LEX S.A. de C.V., to strengthen its business operations in North America. Construction of the building has begun.
- The Company received a greater volume of orders for value-added products.
Challenges for FY2007
(1) Strengthen product development capabilities
-To invest in sufficient resources and work on making products more multifunctional through computerization and the use of new materials and production methods. The Company will utilize its core competencies in recognition, identification, and mechatronics technology under the concept of developing products that satisfy customers.
-In 2006, the Automotive Division launched an electronic steering lock for push-button starts, which effectively combines security with convenience.
(2) Strengthen competitiveness on a global basis
-Needing to respond to an environment in which parts makers are speeding up globalization and in which competition among manufacturers is becoming more severe, the Company will position its Gunma plant as a model plant by strengthening functions there. It will also transfer technology on production, quality assurance, and production management to its overseas facilities where it will augment its workforce. At Alpha (Guangzhou) Automotive Parts Co., Ltd., established in October 2004 in Guangzhou, Guangdong Province, China as a production facility to manufacture auto parts, the Company established an integrated production structure, from molding, coating, and galvanizing, up to assembly activities, aiming to significantly reduce total costs for the group.
(3) Building Sales and Service Functions
-Based on the market-in concept, the Company will build an efficient sales and service structure enabling it to satisfy demands in new markets.
R&D expenses for FY2006 totaled 1,528 million yen, of which 1,188 million yen was invested in the Automobile Parts Business.
Development in the field of advanced technologies:
The Company, in addressing the most pressing areas of development, namely technology in the fields of communications, cryptography, and biometrics, is conducting R&D activities, envisioning joint-development activities with both Japanese and non-Japanese manufacturers that are specialists in these fields.
Automobile Parts Business
-When working on new-product development in the areas of security devices, which are typified by key-sets; functional parts typified by exterior door handles; and exterior automotive products such as roof-rails, the Company is focusing on development activities that take whole systems into consideration and not just the individual component parts. The Company is actively promoting joint development and participation in the design phase with automotive makers.
- Weight-saving technologies: Making use of magnesium die casting technologies and blow-molding technologies.
-Surface finishing technologies: Making use of plating and painting technologies
R&D Achievements in FY2006
In FY2006, the Automotive Division launched an electronic steering lock for push-button starts, which effectively combines security with convenience. Moreover, seeking to increase vehicle content of these products, as well as to have these products factory-installed as standard equipment and make them more compact and lighter, the Company is actively pursuing technical alliances with automotive parts manufacturers abroad.
-The expenditure was utilized to expand, rationalize, and renovate production facilities.
-Other than for production facilities, expenditures were made to improve and enhance R&D facilities.
Automobile parts business
- The Company invested 175 million yen to purchase land at a plant of Alpha HI-LEX S.A. de C.V. to respond to brisk orders.
-The Company invested 1,215 million yen into a new plant building, which is under construction.
New equipment installations (Automobile Parts Business)
|Type of facility||
|Start||Completion||Increase in production capacity upon completion|
|Alpha, Head Office
(Yokohama City, Japan)
|Research and testing equipment||53||April 2007||March 2008||-|
|Alpha, Gunma Plant
(Gunma Pref., Japan)
|Dies and machinery to manufacture products for new vehicle models||444||April 2007||March 2008||No significant increase, as the project mainly is to renew dies.|
|Alpha Industry (Thailand)
(Prachin Buri, Thailand)
|Dies and machinery to manufacture products for new vehicle models||62||April 2007||December 2007|
|Alpha Hi-Lex S.A.
|Plant buildings||270||Jan 2007||July. 2007||New project|
|Machinery to increase production volume||269||April 2007||December 2007||New project|
(Guangzhou) Automotive Parts Co., Ltd.
(Guangdong prov., China)
|Plant buildings||62||Jan 2007||Dec. 2007||New project|
|New machinery and dies||491||April 2007||December 2007||New project|