Shiroki Corporation Business Report FY2009
Business Highlights
Financial Overview |
(in million JPY) |
FY2009 | FY2008 | Rate of Change (%) | Factors | |
Sales | 111,924 | 123,425 | (9.3) | -Sales declined because the Company's major customers (automakers) reduced their production volumes. |
Operating income | 2,680 | (31) | - | -Income improved as a result of the company consolidating its production sites in Japan, and improving its manufacturing processes by implementing a one-shift, fixed-working-hour system and engaging in cost reduction programs. |
Ordinary income | 2,200 | (773) | - | |
Net income | 2,324 | (2,190) | - |
Regional Trend
<Japan>-Sales decreased 7.6% year-on-year to 83.526 million yen because of a significant decrease in orders in the first half of the fiscal year due to Japanese automakers' suffering flagging sales. Operating income improved to 446 million yen as a result of the Company’s efforts to improve its profitability.
<North America>
-Sales at Shiroki North America, Inc. dropped 17.9% because U.S. automakers reduced their production volumes. Sales in the region, therefore, declined 17.9% year-on-year to 18,670 million yen. Nevertheless, operating income improved to 91 million yen, thanks to the Company’s efforts to improve its profitability.
<Asia>
-In China, sales at Guangzhou Shiroki Corp. showed a significant improvement of 13.5% year-on-year, as automotive sales in China remained strong.
-In Thailand, Shiroki (Thailand), Co., Ltd. made efforts to expand its production volume by exporting more automotive seat components, product items which it started producing the year before, to Indonesia. Sales in Thailand, however, declined 27.2% year-on-year.
-On the whole, sales in Asia were 9,728 million yen, down 5.6% year-on-year. Nevertheless, operating income in Asia improved to 1,730 million yen, a rise of 14.7% year-on-year.
<Orders>
-In Japan, the Company's new compact and lightweight power seat system is being equipped on new vehicle models such as the Subaru Legacy, Toyota Land Cruiser Prado, Suzuki Kizashi, and Nissan Fuga.
-The Company plans to increase supplies to Japanese automakers in India through Technico Industries, Ltd., a parts supplier in Gurgaon, Haryana, India, in which it holds equity. It has received orders from Suzuki Motor Corp.'s subsidiary, Maruti Suzuki India Ltd., New Delhi, for seat recliners and seat adjusters, which will be Technico's first seat parts. Shiroki's major client Toyota Motor Corp. has placed parts orders for its newly developed small car, the EFC (Entry Family Car) targeted at emerging countries. Shiroki aims to develop its overseas operations along with expanding production of Japanese vehicles in emerging countries. It will provide Technico with facilities for the three lines of stamping, sub-assembly and assembly from Japan to start production in 2010. (From an article in the Nikkan Jidosha Shimbun on Sep. 3, 2009)
Restructuring
-The Company has completed consolidation of its production operations in Aichi Pref., Japan. After production at former Toyota Plant for seat components, door frames and other parts (current No. 4 Production Section, Toyokawa Plant, Toyota City) finished in later August, manufacturing operations in Aichi Pref. have been integrated into two plants of Toyokawa Plant, Toyokawa City, and Nagoya Plant, Toyota City, from the previous three plants. The company started to work on facility consolidation and production efficiency of its operations in Aichi Pref. in FY 2006 and has gradually promoted transfer of production items. By shutting down the former Toyota Plant, the number of Shiroki's production bases in Japan has been reduced from six to five. (From an article in the Nikkan Jidosha Shimbun on Sep. 10, 2009)Capital Injection
-The Company is planning to infuse additional 20 million US dollars (approximately 1.9 billion yen) in Shiroki North America, Inc., its production facility in Smithville, Tennessee, U.S.A. The U.S. subsidiary is suffering from a sharp decrease in sales and profit amid the stagnant automotive industry in the U.S. The company projects a further significant drop also during this fiscal year. The additional fund will be used as operating capital, funds for paying debt, and costs for restructuring. Shiroki North America is the Group's largest production facility outside Japan. (From an article in the Nikkan Jidosha Shimbun on June 3, 2009)>>>Financial Forecast for the Next Fiscal Year(Sales, Operating Income etc.)
R&D
R&D Expenditure |
(in million JPY) |
FY2009 | FY2008 | FY2007 | |
Automotive components business | 2,154 | 2,358 | 2,291 |
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, 2010)
Company (Country) |
Area of partnership | Contract period |
Keiper GmbH & Co. (Germany) |
Seat recliners | Apr. 1, 1988 - Mar. 31, 2011 |
Technical Partnerships (Licensing-out)
(As of Mar. 31, 2010)
Company (Country) |
Area of partnership | Contract period |
NHK Spring (Thailand) Co., Ltd. (Thailand) |
Seat recliners | Dec. 10, 1990 - Dec. 09, 2010 |
Summit Laemchabang Auto Body Co. (Thailand) |
Door frames | Feb. 21, 1994 - Dec. 31, 2010 |
Asan Co., Ltd. (Korea) |
Automotive door frames | May 08, 2003 - Oct. 31, 2010 |
Investment Activities
Capital Expenditure |
(in million JPY) |
FY2009 | FY2008 | FY2007 | |
Overall | 5,439 | 6,631 | 8,807 |
-Most of the Company's capital investment was devoted to the automotive component business. The Company improved facilities in order to improve productivity and reduce cost and prepared the facilities to produce products for new vehicle models.
New Equipment Installation
Company name (Location) |
Equipment to be installed | Estimated amount of investment (in million JPY) |
Project period | |
From | To | |||
Fujisawa plant - headquarters (Kanagawa Pref., Japan) |
Manufacturing equipment | 9 | Apr. 2010 |
Mar. 2011 |
Nagoya plant (Aichi Pref., Japan) |
Manufacturing equipment | 249 | Apr. 2010 |
Mar. 2011 |
Toyokawa plant (Aichi Pref., Japan) |
Manufacturing equipment | 1,024 | Apr. 2010 |
Mar. 2011 |
Osaka plant (Osaka Pref., Japan) |
Manufacturing equipment | 55 | Apr. 2010 |
Mar. 2011 |
Toyokawa head office (Aichi Pref., Japan) |
Testing equipment | 42 | Apr. 2010 |
Mar. 2011 |
Kyusyu Shiroki Co., Ltd. Fukuoka Pref., Japan |
Manufacturing equipment | 43 | Apr. 2010 |
Mar. 2011 |
Shiroki North America, Inc. (Tennessee, USA) |
Manufacturing equipment | 450 | Jan. 2010 |
Dec. 2010 |
Shiroki-GA, LLC (Georgia, USA) |
Manufacturing equipment | 238 | Jan. 2010 |
Dec. 2010 |
Shiroki-GT, LLC (Tennessee, USA) |
Manufacturing equipment | 158 | Jan. 2010 |
Dec. 2010 |
Shiroki (Thailand), Co., Ltd. | Manufacturing equipment | 23 | Jan. 2010 |
Dec. 2010 |
Guangzhou Shiroki Corp. (Guangdong, China) |
Manufacturing equipment | 1,198 | Jan. 2010 |
Dec. 2010 |