ALPHA Corpolation Business report FY2008

Business Highlights

Financial Overview
in million JPY FY2008 FY2007 Rate of Change (%) Factors
Sales 44,614 53,687 (16.9) -
Operating income (142) 1,938 - -
Ordinary income (321) 1,411 - -
Net income (3,080) 610 - -
Automobile Parts Business
Sales 38,359 46,526 (17.6) - Sales decreased as a result of substantial decline in main customer production, foreign exchange loss due to a strong yen and sharp decline of its share price.
Operating income (77) 1,614 - -

Development, Production and Sales Activities
- The Company aims to mass produce 52 types of new products for 24 vehicle models of 6 automakers globally.
- The Company supplied a new door handle to Mazda following an electric steering lock supplied in fiscal 2007.
- The Company supplied a new door handle to Honda for its vehicle models produced in North America.

Achievement by Region

Sales decreased because main customer automobile production declined globally by 12.6% year-on-year.

<North America>
Sales decreased due to a substantial decline in main customer automobile production in the second half onward.

Sales and revenues increased thanks to an increase in main customer automobile production in China.

Change of Organization
The Company will upgrade its US manufacturing subsidiary to business management company that oversees its inter-American operations. In early 2009, the Company will set up a business management office at Alpha Technology Corporation (ATC) in Michigan, USA, and send a director from its headquarters in Japan. The new office will take charge of management of its integrated key set production lines in the US and door handle plants in Mexico. It is not clear if the Company is to change the name of ATC once it assumes management function. But the US subsidiary will be responsible for all local operations, manufacturing, development and sales at ATC, established in 1987, and Alpha Hi-Lex, S.A. de C.V., having two plants in Mexico. (From an article in the Nikkan Jidosha Shimbun on Oct. 7, 2008)


R&D Expenditure
R&D expenses for FY2008 totaled 1,663 million yen, of which 1,288 million yen was invested in the Automobile Parts Business.

R&D Activities

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
-The Company began marketing new-type electric steering lock.
-The Company conducted advanced developed of exterior handle products. These products satisfy the side impact requirements of many countries.
-The Company is developing an exterior handle with an LED footlight that turns on when the car owner approaches, for mass production utilizing packaging technology.
-The Company received an order from a new automaker customer for an exterior handle that incorporates a capacitance sensor and is developing it for mass production.

Investment Activities

Capital Investment
Total capital investment for FY2008 was 2,457 million yen.

Automobile parts business
-The Company made a 1,436 million yen capital investment in its automotive parts business in order to meet the need to produce products for new vehicle models.

New equipment installations (Automobile Parts Business)
Type of facility Planned investment
(million JPY)
Start Completion Increase in production capacity upon completion
The Company
Gunma Plant
(Gunma Pref., Japan)
Dies and machinery to manufacture products for new vehicle models 505 Apr., 2009 Mar., 2010 No significant increase, as the project mainly is to renew dies.
Gunma Plant
(Gunma Pref., Japan)
Machinery to produce door handles 81 Apr., 2009 Mar., 2010 New project
Gunma Plant
(Gunma Pref., Japan)
Casting machine
103 Apr., 2009 Mar., 2010 New project
Gunma Plant
(Gunma Pref., Japan)
Machinery to produce key sets 94 Apr., 2009 Mar., 2010 New project
Alpha Industry (Thailand) Co., Ltd.
(Prachin Buri, Thailand)
Additional buildings 810 Nov., 2008 (Note) New project
Machinery to produce key sets and door handles 761 Nov., 2008 (Note) New project

(Note) The capital investment plan for Alpha Industry (Thailand) Co., Ltd. has been frozen based on Group investment decisions and a revised completion date is yet to be determined.