Shiroki Corporation - Business Report FY2007
Business Highlights
Financial Overview
(in million JPY) | FY2007 | FY2006 | Rate of Change | Factors |
Sales | 143,557 | 133,509 | 7.5% | Non-consolidated
sales marked a new high of 105,343 million yen, up 4.4 percent or
4,415 million from the previous term. This is the second consecutive
year of a record-setting in sales. Sales steadily increased supported by the following factors: - Stable domestic production, thanks to strong vehicle exports by its customers - The Company 's having strengthened its production structure overseas, and - Greater sales following new product developments. Sales by product Window regulators: Sales rose 11.4 percent or 4,439 million yen year-on-year, following the release of a new product, which integrates a motor and an engine control unit (ECU). Door sashes: Sales also rose, thanks to strong demand from the U.S. and Chinese markets. Compared with the previous year's result, sales were up 11.8 percent or 2,647 million yen. |
Operating income | 5,058 | 3,182 | 58.9% | Despite
rises in depreciation costs following the implementation of a new
tax system, and an increase in labor expenses, operating income, ordinary
income, and net income rose compared to last year as a result of the
following factors: - Greater sales - The Company's continued efforts to streamline operations, and - The Company's initiatives to review its component sourcing and production systems for enhancing its domestic profit structure. |
Ordinary income | 3,931 | 3,189 | 23.3% | |
Net income | 2,907 | 1,612 | 80.3% |
Domestic business
- The Company launched an initiative called "Monotsukuri Kaikaku
(Production improvement project)", which targets a 50 percent reduction
in the number of workforce at each production line by introducing automated
production lines and consolidating production processes.
- In the Chukyo area, the Company worked on consolidating its three-plant
production system into a two-plant system by integrating operations of
the Production section 4 of its Toyokawa Plant into two other main facilities,
namely the Nagoya Plant and Toyokawa Plant, in steps.
- Kyushu Shiroki Co., Ltd. in Kitakyushu City started producing window
regulators for Toyota Motor Kyushu. It also increased its production volume
to cope with greater demand from its customers in the area.
- The Company has begun studying the possibility of using its Toyota Plant
- officially called No.3 Production Section of Nagoya Plant - as its distribution
center and selling a portion of the land. As part of the program to restructure
its production system, the supplier is gradually closing operations at
the Toyota Plant by shifting its production activities to other plants
of the Company or contracted partners. After the restructuring of the
Toyota Plant, it will try to streamline production processes at its Toyokawa
Plant (Toyokawa-shi, Aichi prefecture) and Nagoya Plant (Toyota-shi, Nagoya
prefecture) step by step in order to cut production cost, mainly in the
area of labor cost, by half. The Toyota plant has already stopped production
of its main products, seat parts, which are now produced at the Nagoya
Plant. Production of door sashes for Toyota Motor Corporation will then
be shifted to its headquarter plant, Toyokawa Plant, when the Toyota models
are fully remodeled. The Toyota Plant will become the Company's distribution
center which also handles export packaging and other operations. (From
an article in the Nikkan Jidosha Shimbun on Sep. 4, 2007)
Overseas business
North America
- Shiroki North America, Inc. (Tennessee, U.S.A.) recorded its highest-ever
sales of 28,558 million yen, up 5.7 percent from the previous year's results,
thanks to greater production volume of door sashes for the Nissan Altima
assembled in the U.S.A.
- U.S. sales were 28,552 million yen, up 5.7 percent year-on-year, and
operating profit was 555 million yen, largely increasing from the previous
year's result of 3 million yen.
- The Group strengthened its production structure in North America in
response to increased requirements from Japanese automakers in the region.
Shiroki-GA, LLC in Georgia, which had completed its facility expansion
project, launched door sash production. Shiroki GT, LLC in Tennessee,
on the other hand, began manufacturing window regulators.
- The Company optimally allocated production among its three U.S. facilities:
Shiroki North America, Inc. specializes in seat components; Shiroki-GA,
LLC specializes in door sashes; and Shiroki GT, LLC in window regulators.
The centralized production system is intended to enhance production
efficiency.
China
- Sales at Guangzhou Shiroki Corp. largely rose by 2,584 million yen
or 111.2 percent year-on-year to 4,909 million yen, thanks to greater
production volume of door sashes, moldings, and window regulators for
installation in the Toyota Camry assembled in China.
- In July 2007, Guangzhou Shiroki Corp. completed and started operations
of its second plant, which specializes in window regulator and molding
production. The subsidiary thereby established a two-plant production
structure with enhanced production efficiency.
- In China, the Company worked on procuring more manpower and components
locally in order to increase production volume and reinforce its business
foothold in China.
Thailand
- Sales at Shiroki (Thailand), Co., Ltd. were 4,708 million yen, up 1,428
million yen or 43.6 percent from last year. The significant increase was
attributed to greater production volume of components for the Toyota IMV
and Camry built by Toyota Thailand.
- In line with its drive to offer high value-added products, Siroki (Thailand),
Co., Ltd. started assembling new window regulators that integrate motors
and electronic control units (ECUs).
- The Thai facility installed a large stamping machine in order to support
new businesses and enhance its production structure.
India
- In September 2007, the Company invested in Technico Industries Ltd.,
a local auto parts supplier, to which it had been licensing out technical
expertise. It also strengthened its technical collaboration with Technico
Industries by giving training to the Thai company's engineers.
R&D
The Company will reorganize its business structure on December 1, 2007. The Development Assistance Div. which currently belongs to the Seat System Design Dept. will be converged with the Testing & Evaluation Div. , an operation under the QC Dept., for the creation of the Development Promotion Dept. (From a press release on Nov. 27, 2007)
The Company is planning to further enhance its R&D competence. It will invest one billion yen by FY2010 to renovate the testing facility located at its headquarters (Toyokawa City, Aichi Pref.) and introduce modern machinery with upgraded functions. It also intends to launch full-fledged operations in newly-established Development Assistance Section and reinforce the overall R&D activities by increasing the workforce. In addition, the Company will execute strategic initiatives in the development of next-generation seat adjusters and window regulators through its effort to roll out lighter and more compact products with highly-added values. (From a press release on Jan. 18, 2008)
R&D Expenses
(in million JPY) | FY2007 | FY2006 | FY2005 |
Automotive components business | 2,291 | 2,142 | 2,149 |
Recent R&D achievements (Automotive components business)
-Next-generation power seats
-Next generation manual seats
-New wire-type regulators
-New arm-type regulators
-New door frames
Technical partnership (Licensing-in) (As of Mar. 31, 2008)
Company (Country) |
Area of partnership | Contract period |
Keiper-Recaro
GmbH & Co. (Germany) |
Seat recliners | Apr.
1, 1988 - Mar. 31, 2009 |
Technical partnerships (Licensing-out) (As of Mar. 31, 2008)
Company (Country) |
Area of partnership | Contract period |
NHK
Spring (Thailand) Co., Ltd. (Thailand) |
Seat recliners | Dec.
10, 1990 - Dec. 10, 2008 |
Summit
Laemchabang Auto Body Co. (Thailand) |
Door frames | Feb.
21, 1994 - Dec. 31, 2008 |
Asan Co., Ltd. (Korea) |
Automotive door frames | May
08, 2003 - Oct. 31, 2009 |
Technico
Industries Ltd. (India) |
Window regulators | Nov.
01, 2006 - Sep. 30, 2009 |
Investment Activities
(in million JPY) | FY2007 | FY2006 | FY2005 |
Overall | 8,807 | 7,371 | 6,920 |
-The majority of its investment activities in FY2007 were intended for the automotive business. The investment focus was set on improving productivity and cost efficiency; and setting up production lines for new vehicle models.
Domestic investments
The Company will increase production capacity at the second plant of its subsidiary Kyushu Shiroki Co., Ltd. (Yahata-higashi-ku, Kita-Kyushu city) from the week starting on May 7. The company has received total volume of orders for window regulators to lift and lower car windows for all models of Toyota produced in Kyushu. Shiroki has spent about four billion yen to enhance production and reinforce manufacturing facilities, in order to cope with production expansion of Toyota and Nissan. The second plant, which has started operation this spring, will launch full-scale production in May. Kyushu Shiroki is increasing production of door frames and seat components for Nissan Motor at the first plant, to triple annual sales to 7.5 billion yen in FY2008 from the record of FY2005. (From an article in the Nikkan Jidosha Shimbun on Apr. 25, 2007)
The Company plans a total of 10 billion yen investment over five years from FY 2008 to enhance domestic operations. It will invest in reinforced development of advanced technologies as well as production operation enhancement by optimizing production location and promoting automation. Form FY 2008 onward the company will continue to invest a large amount of about seven billion yen per year in facilities including regular spending in production preparations. Excluding the regular production preparation investment such as one for remodeling, approx. two billion yen out of these seven billion yen per year will be used for domestic operations. Investment in Shiroki Seiki Co., Ltd., its subsidiary, will be increased to achieve higher in-house manufacturing ratio of production facilities. It aims to raise the ratio also to prevent manufacturing know-how from outflowing to emerging countries as China. It has begun relocating production items and retooling equipment, sequentially at its noticeably aging production bases in Japan. It will promote reorganization of its Chubu area facilities and transfer by mid-2009 all the door frame production capacities at its No.4 Production Sect., Toyokawa Plant to the main Toyokawa Plant, where its head office is located. (From an article in the Nikkan Jidosha Shimbun on Feb. 28, 2008)
Overseas investments
The Company will increase its production of door components at its No.1 plant in Guangzhou, China, by adding two door frame production lines in the space that turned vacant after production shifts to a new plant, which started operation in June this year as the supplier's second production facility. The two lines will be used exclusively to produce the parts for Nissan's two all-new models scheduled to be produced in 2008 at a joint venture car manufacturing company between Dongfeng and Nissan in Huadu District, Guangzhou. The Company will begin the preparation soon so that it can start the additional production in December this year. This will allow the supplier to increase its annual door frame production capacity in Guangzhou by 25% to 0.38 million sets. (From an article in the Nikkan Jidosha Shimbun on Jul. 24, 2007)
New equipment installation
Company
name (Location) |
Equipment to be installed | Estimated
amount of investment (in million JPY) |
Project period | |
From | To | |||
The
Company Fujisawa plant - headquarters (Kanagawa Pref., Japan) |
Manufacturing equipment | 923 | Apr. 2008 |
Mar. 2009 |
The
Company Nagoya plant (Aichi Pref., Japan) |
Manufacturing equipment | 3,799 | Apr. 2008 |
Mar. 2009 |
The
Company Toyokawa plant (Aichi Pref., Japan) |
Manufacturing equipment | 1,870 | Apr. 2008 |
Mar. 2009 |
The
Company No.4 production section, Toyokawa plant (Aichi Pref., Japan) |
Manufacturing equipment | 193 | Apr. 2008 |
Mar. 2009 |
The
Company Osaka plant (Osaka Pref., Japan) |
Manufacturing equipment | 178 | Apr. 2008 |
Mar. 2009 |
The
Company Prototype manufacturing plant (Aichi Pref., Japan) |
Manufacturing equipment | 1 | Apr. 2008 |
Mar. 2009 |
The
Company Toyokawa head office (Aichi Pref., Japan) |
Testing
equipment and |
154 | Apr. 2008 |
Mar. 2009 |
Kyusyu
Shiroki Co., Ltd. (Fukuoka Pref., Japan) |
Manufacturing equipment | 28 | Apr. 2008 |
Mar. 2009 |
Shiroki
North America, Inc. (Tennessee, USA) |
Manufacturing equipment | 276 | Apr. 2008 |
Mar. 2009 |
Shiroki-GA,
LLC (Georgia, USA) |
Manufacturing equipment | 495 | Jan. 2008 |
Dec. 2008 |
Shiroki-GT,
LLC (Tennessee, USA) |
Manufacturing equipment | 261 | Jan. 2008 |
Dec. 2008 |
Shiroki (Thailand), Co., Ltd. | Manufacturing equipment | 185 | Jan. 2008 |
Dec. 2008 |
Guangzhou
Shiroki Corp. (Guangdong, China) |
Manufacturing equipment | 624 | Jan. 2008 |
Dec. 2008 |