ALPHA Corporation Business Report FY2009

Business Highlights

Financial Overview

(in millions of JPY)
  FY2009 FY2008 Rate of Change (%) Factors
Overall
Sales 39,021 44,614 (12.5) -
Operating income 1,437 (142) - -
Ordinary income 1,154 (321) - -
Net income 544 (3,080) - -
Automobile Parts Business
Sales 33,800 38,359 (11.9) -Sales decreased due to a decline in automobile production at the Company's main customers.
Operating income 1,065 (77) - -Japan: Operating income returned to profitability due to a significant reduction in fixed costs and an improvement in the ratio of variable costs and other reasons.
-Countires other than Japan: Operating income returned to profitability due to the Company's procuring lower-cost parts locally and implementing other initiatives.

Recent Development

-The Company established its Utsunomiya Branch in December 2009 to reinforce sales activities and improve service capabilities for Honda.
-The Company invested continuously in Asia, aiming at increasing future sales.

Achievement by Region

(in millions of JPY)
  FY2009 FY2008 Rate of Change (%) Factors
Japan
Sales 26,549 30,421 (12.7) -Sales decreased because automobile production in Japan at its major customers decreased by 12% compared to the previous fiscal year.
Operating income 93 (862) - -Operating income returned to profitability as a result of the Company's efforts to significantly reduce fixed costs and improve the ratio of variable costs.
North America
Sales 6,831 8,227 (17.0) -Sales decreased due to a decline in automobile production at its major customers.
Operating income 52 (255) - -Operating income returned to profitability as a result of the Company's efforts to reduce costs.
Asia
Sales 9,874 10,989 (10.1) -Overall sales in Asia decreased because the increase in the volume of sales in China could not offset the amount that sales decreased in Thailand.
Operating income 1,132 957 18.3 -Operating income increased, thanks to a significant increase in revenue in China.

R&D

R&D Expenditure

-R&D expenses for FY2009 totaled 1,074 million yen, of which 780 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 completed advanced development activities on next-generation steering locks, which were typified by key sets. The Company started to prepare for mass- production of these in 2012.
-The Company completed advanced development activities on outside handles, starting to conduct studies on them with automakers.

R&D Facilities

-The Company decided to establish an R&D center on the site of Alpha Guanzhou in October 2010. It will support the design division in Japan and develop products for the Chinese market. Some of the experimental work being done in Japan will be transferred there.

Investment Activities

Capital Investment

-Total capital investment for FY2009 was 2,076 million yen.

Automobile parts business
-The Company invested 480 million yen to build a new plant at Alpha Industry (Thailand).

New Equipment Installations (Automobile Parts Business)

Name
(Location)
Type of facility Planned investment
(in million JPY)
Start Completion Increase in production capacity upon completion
The Company

Gunma Plant
(Tatebayashi City, Gunma, Japan)

Dies and machinery to manufacture products for new vehicle models 130 2010.04 2011.01 -
Subsidiaries
Alpha Industry (Thailand) Co., Ltd.
(Prachinburi, Thailand)
Additional buildings 810 2008.11 2010.09 New project
Machinery to produce key sets and door handles 761 2008.11 2010.09 New project
Alpha HI-Lex S.A. de C.V.
(Queretaro, Mexico)
Dies 233 2010.01 2010.12 New project
Alpha (Guanzhou) Automotive Parts Co., Ltd.
(Huadu, Guangzhou, China )
Machinery to manufacture products 297 2010.01 2010.12 New project
Dies 89 2010.01 2010.12 -