F-tech Inc. Business Report FY ended Mar. 2013
Business Highlights
Financial Overview |
(in millions of JPY) |
FY ended Mar. 31, 2013 | FY ended Mar. 31, 2012 | Rate of Change (%) | Factors | |
Sales | 144,089 | 130,609 | 10.3 | -Sales increased, recovering from the fall in production caused by the Great East Japan Earthquake and flooding in Thailand. New-vehicle sales were strong in North America. Favorable currency translation also played a factor in the rise in sales. |
Operating income | 4,479 | 4,712 | (4.9) | -Operating income was lower because of the increase in the percentage of compact cars being built by OEMs and because of sluggish sales of Japanese-brand vehicles in China. |
Ordinary income | 4,574 | 4,342 | 5.3 | - |
Net income | (3,131) | 1,657 | - | - |
Japan | ||||
Sales | 32,905 | 41,941 | (21.5) | -Vehicle production levels increased in Japan, after they has been adjusted downward to account for the impact caused by the Great East Japan Earthquake. New-vehicle sales at OEMs significantly migrated to the compact class of vehicles. -Sales of Japanese-brand vehicles were stagnant in China because of the tense political situation between Japan and China. |
Operating income | (942) | 105 | - | |
North America | ||||
Sales | 82,270 | 61,730 | 33.3 | -Sales to OEMs increased due to robust sales of new vehicles. -Results also improved because of favorable currency translation adjusted to account for the high valuation of the yen. |
Operating income | 4,406 | 3,084 | 42.9 | |
Asia | ||||
Sales | 28,913 | 26,937 | 7.3 | -Performance recovered after production volumes fell because of the flooding in Thailand. However income suffered because of the sluggish sales of Japanese-brand vehicles caused by the tense political situation between Japan and China. |
Operating income | 993 | 1,665 | (40.4) |
Awarded Contract for GM's Global model
-The Company was awarded a contract for suspension parts by GM for its global model. The Company has in the past made deliveries to GM in Canada for compact models, but this is the first business with GM for its global model produced in multiple countries like China. The Company will commence deliveries in 2014 by establishing new supply capacity in China, Korea and Mexico. Eighty-five percent of the supplier's consolidated sales is currently generated from sales to Honda. The company is, however, looking to increase the share of sales from non-Honda customers to more than 20 percent in the mid-term perspective. As deliveries to GM increase in North America and new emerging markets, the percentage of sales to customers other than Honda will be rising. Suspension parts, including rear sub-frames and front and rear suspension parts, will be supplied to each production facility in Canada, Mexico, China and Korea for a new model GM is kicking off in 2014. In Canada and Mexico, the Company will supply components from its own local production facilities, while in China and Korea, from plants of local suppliers under technical collaboration. A new plant, which is scheduled to go into operation in Mexico in July 2014, will serve not only Honda's new plant, but also GM's plant in Mexico. (From an article in the Nikkan Jidosha Shimbun on May 10, 2012)Sales Promotion of Steel / Auminium Jointed Product
-The Company will increase sales of its lightweight chassis components based on a technology for joining steel and aluminum also to customers other than Honda. Welding aluminum and steel together has been difficult, but this new technology, developed jointly with Honda R&D Co., Ltd, employs a Friction Stir Welding (FSW) method to bond steel and aluminum, and has been applied to the front subframe for the North American version of the all-new Honda "Accord". Honda's medium and large sized models may adopt this technology as well, and U.S. and European auto manufacturers are also interested in the technology. The Company will promote the new product contributing to a reduction in vehicle weight in an effort to expand its sales of the underbody parts. (From an article in the Nikkan Jidosha Shimbun on Nov. 13, 2012)Recent Development Outside Japan
<Indonesia>-In February 2013, the Company established a new manufacturing subsidiary PT. F. TECH INDONESIA in Karawang, Indonesia. Capitalized at some 500 million yen, approximately 5.9 million USD, the new company will be engaged in production and sale of suspension parts for automobiles. It now delivers products to plants of Honda and Nissan in Indonesia primarily from its plant in Thailand and in part from Japan and the Philippines because of low volume. In view of a projected substantial increase in production by Honda and Nissan in 2014, the Company has decided to study the possibility of local production. (From a press release of the Company)
<Mexico>
-In June 2012, the Company has established F&P MFG. DE MEXICO S.A. DE C.V. in Guanajuato State, Mexico. The new company will be owned 75 percent (9.6 million USD) by F&P America Mfg., Inc. and 25 percent (3.2 million USD) by F&P Mfg., Inc. The new subsidiary will manufacture and sell suspension parts to Japanese, U.S. and European-affiliated automakers in the country. The Company already has a subsidiary in Queretaro that produces and supplies stamping parts to manufacturers of dies and vehicle structural parts. However, it will be the first time for the company to manufacture its major products, underbody parts, locally in Mexico. F-Tech will invest a total of 25 million USD in land, buildings and equipment of the new company capitalized at 16 million USD. It expects to achieve sales of 79 million USD in 2018 when the plant goes into full operation. (From a press release of the Company)
Global Sourcing
-The Company is set to enhance its overseas procurement functions in countries, such as China, Thailand and North America, to accelerate global sourcing activities. At the initiative of the headquarters in Japan, the Company has been promoting local sourcing of parts and materials through its overseas facilities, and at the same time, encouraging its overseas production plants to source competitive parts and materials from suppliers that can compete in the global market. By reorganizing its global operating structure as early as 2013, the Company will strengthen purchasing activities at each production site so that it can expand adoption of competitive components and materials not only in its own region, but also worldwide. (From an article in the Nikkan Jidosha Shimbun on August 23, 2012)>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
R&D
R&D Expenditure |
(in millions of JPY) |
FY ended Mar. 31, 2013 | FY ended Mar. 31, 2012 | FY ended Mar. 31, 2011 | |
Overall | 2,367 | 1,840 | 1,697 |
R&D Structure
Haga Technical Center (Tochigi, Japan)-The Global Technical Center has been designated as the function to oversee R&D activities.
-It was badly damaged in the Great East Japan Earthquake; however the facilities damaged in the quake are conducting new activities on future technology.
Technology licensing-out Agreement |
(As of Mar. 31, 2013) |
Partners | Country | Type of Support | Contract Period |
Cheng Yu Industry Co., Ltd. | Taiwan | Technical support dealing with manufacturing and sales | Dec. 21, 1994 - Dec. 20, 1999 Annual automatic renewal from then on |
Gestamp Tallent Ltd. | UK | Technical support dealing with manufacturing and sales | Jul. 18, 2011- Jul. 17, 2016 Or for as long as the production of the subject products continues. |
Progressive Tools & Components (P) Ltd. | India | Technical support dealing with manufacturing and sales | Nov. 29, 1996 - and after, with the contract to continue while financing is being provided. |
YPS Limited | Turkey | Technical support dealing with manufacturing and sales | Sep. 30, 2010 - Sep. 29, 2015 Or for as long as the production of the subject products continues. |
Benteler Componentes Automotivos Ltda. | Brazil | Technical support dealing with manufacturing and sales | May 20, 2011 - May 19, 2016 Or for as long as the production of the subject products continues. |
SMC Co. Ltd. | South Korea | Technical support dealing with manufacturing and sales | Apr. 4, 2006 - Apr. 3, 2011 Annual automatic renewal from then on |
Cosma do brasil | Brazil | Technical support dealing with manufacturing and sales | Sep. 27, 2007 - Sep. 26, 2012 Will continue indefinitely until production of the product subject to receiving the technical support ceases. |
Formex Mexico, S.A. de C.V. | Mexico | Technical support dealing with manufacturing and sales | Aug. 30, 2010 - Aug. 29, 2015 Or for as long as the production of the subject products continues. |
Technology licensing-in Agreement |
(As of Mar. 31, 2013) |
Partners | Country | Company name | Details | Contract period |
F-Tech, F&P Mfg Inc., F&P America Mfg Inc. |
UK | TI Corporate Services Limited (Variform, Inc.) | Technological support dealing with pipe forming | Oct. 20, 1994- Oct. 20, 2023 |
Investment Activities
Capital Expenditure |
(in millions of JPY) |
FY ended Mar. 31, 2013 | FY ended Mar. 31, 2012 | FY ended Mar. 31, 2011 | |
Overall | 10,696 | 7,873 | 5,095 |
Planned Capital Investments |
(As of Mar. 31, 2013) |
Company Name Location |
Segment | Planned investment (in million yen) |
Start | Completion | Increased capacity after completion |
F-Tech: Kuki Plant, etc. (Saitama, Japan) |
Businesses related to automotive components | 2,224 | Apr. 2013 | Mar. 2014 | Facility expansion in line with launch of a new model |
F&P Mfg., Inc. (Ontario, Canada) |
Businesses related to automotive components | 3,841 | Apr. 2013 | Mar. 2014 | Facility expansion in line with launch of a new model |
F-Tech Zhongshan Inc. | Businesses related to automotive components | 3,642 | Jan. 2013 | Dec. 2013 | Facility expansion in line with launch of a new model |