SHOWA CORPORATION Business Report FY2010
Business Highlights
Financial Overview |
(in millions of JPY) |
| FY2010 | FY2009 | Rate of Change (%) | Factors | |
| Overall | ||||
| Sales | 233,381 | 207,657 | 12.4 | -Sales of parts in North America for four-wheel vehicles, and sales of parts in Asia for four-wheel and two-wheel vehicles increased. |
| Operating income | 8,895 | (2,370) | - | -Performance improved as a result of achieving greater sales volume, transferring and consolidating production lines, initiating cost reductions, and implementing various measures aimed at improving the efficiency of its business operations. |
| Ordinary profit | 8,062 | (616) | - | |
| Current net income | 122 | (8,593) | - | |
Highlights by Region (Automotive business)
<Japan>-Even though the Company was severely impacted by the drop in new-auto sales after eco-car sales incentives ended and by the fall in production volume at its car-maker customers who were significantly affected by the Great East Japan Earthquake, sales of parts for both four-wheel and two-wheel vehicles increased, along with revenue. This result was driven by strong sales in the first half of the year because of the sales incentives.
<North America>
-Due to increased sales at its customers in line with the recovery in the North American market, sales of parts for four-wheel vehicles in both the U.S.A. and Canada increased, along with revenues.
<South America>
- Due to the significant increase in sales at its customers in line with the recovery in the South American market, sales of parts for two-wheel vehicles increased, along with revenue.
<Asia>
-Sales of parts for both four-wheel vehicles and two-wheel vehicles increased, as well as did revenue, as a result of greater volume of sales by its customers against the backdrop of expanding automotive markets in Indonesia and Thailand. In India, sales of parts for four-wheel vehicles increased, as well as did revenue, as a result of greater sales by its customers against the backdrop of an expanding automotive market.
<China>
- In China, sales of parts for four-wheel vehicles increased, as well as did revenue, as a result of greater sales by its customers against the backdrop of an expanding automotive market.
R&D
R&D Expenditure |
(in millions of JPY) |
| FY2010 | FY2009 | FY2008 | |
| Total | 5,496 |
5,910 | 6,484 |
-In quickly and accurately grasping the needs of its customers, the Company is enhancing its product competitiveness, undertaking R&D activities that pursue cutting-edge technology.
-R&D activities are mainly conducted at the Company’s R&D functions, which are focusing on developing auto parts for four-wheel and two-wheel vehicles. The total R&D expenses for the year were 5 billion, 496 million yen, broken down as follows between Japan and North America: 5 billion, 149 million yen; and 347 million yen, respectively.
Investment Activities
Capital Expenditure |
(in millions of JPY) |
| FY2010 | FY2009 | |
| Japan | 4,160 |
3,576 |
| North America |
1,787 |
489 |
| South America |
270 |
934 |
| Asia | 735 | 443 |
| China | 947 | 652 |
| Subtotal |
7,901 |
6,095 |
| Others | 62 | 110 |
| Total | 7,964 | 6,205 |
| Adjusted amounts | (139) | (70) |
| Consolidated | 7,824 |
6,135 |
Investment in Japan
-The Company will enhance product portfolio and production volume of its hydraulic pump used in systems to reduce fuel consumption. Starting this fiscal year, the company will more than double production of a control pump for the continuously variable transmission (CVT) at the Gotemba No.2 plant, compared with the same period last year. It has decided to increase output in expectation of expanded sales of CVT-installed low fuel consumption vehicles given an extension of the eco-car purchase incentive program until this fall. Showa has also developed a new hydraulic power steering pump for upscale minivan and other models, featuring reduced loss in fuel consumption through adoption of a variable volume mechanism that allows for a flexible adjustment of power assist performance. The production for the North American market is soon to be launched. The company intends to respond to the needs of automakers intent on improving fuel efficiency with the aim of boosting its profitability. (From an article in the Nikkan Jidosha Shimbun on April. 19, 2010)New Facilities
-The total amount of capital investment planned for fiscal year 2010 which ended March, 2011, was 10,114 million yen. The following outlines major construction projects for new facilities.| Facility (Location) |
Type of facility | Planned investment (total) (million JPY) |
Construction start month | Planned completion | Production capacity growth after completion |
| Saitama Plant (Gyoda City, Saitama, Japan) |
Production facilities for automobile parts | 1,033 | Oct., 2010 | Feb., 2012 | - |
| Gotemba No.1 Plant (Gotemba City, Shizuoka Pref.) |
Production facilities for automobile parts | 477 | Dec., 2010 | Mar., 2012 | (Note 1) |
| Gotemba No.2 Plant (Gotemba City, Shizuoka Pref.) |
Production facilities for automobile parts | 437 | Jun., 2010 | Jan., 2012 | (Note 1) |
| Asaba Plant (Fukuroi City, Shizuoka, Japan) |
Production facilities for automobile and motorcycle parts | 794 | April 2010 | Mar., 2012 | - |
| Nagoya Plant (Kasugai City, Aichi, Japan) |
Production facilities for automobile and motorcycle parts | 358 | Sept., 2010 | Feb., 2012 | - |
| American Showa, Inc. Sunbury Plant (Ohio, USA) |
Production facilities for automobile parts | 540 | Jun., 2009 | Dec., 2011 | - |
| Showa Canada Inc. (Ontario, Canada) |
Production facilities for automobile parts | 482 | Jan., 2010 | Dec., 2011 | - |
| P.T. Showa Indonesia Mfg. (Cikarang-Bekasi, Indonesia) |
Production facilities for automobile and motorcycle parts | 966 | July, 2010 | Dec., 2011 | (Note 1) |
|
SHOWA Autoparts(Thailand) Co., Ltd. (Chonburi, Thailand) |
Production facilities for automobile parts | 785 | Dec., 2010 | Jun., 2013 | (Note 1) |
| Guangzhou Showa Autoparts Co., Ltd. (Guangzhou, China) |
Production facilities for automobile parts | 524 | Dec., 2010 | Dec., 2011 | (Note 1) |
| Shanghai Showa Auto Parts Co., Ltd. (Shanghai, China) |
Production facilities for automobile parts | 731 | July, 2010 | Dec., 2011 | (Note 1) |