H-ONE Co., Ltd. Business Report FY ended Mar. 2012

Business Highlights

Financial Overview

(in millions of JPY)
  FY ended Mar. 31, 2012 FY ended Mar. 31, 2011 Rate of change(%) Factors
Sales 117,604 126,362 (6.9) -Sales decreased due to an overall decline in production volumes by customers worldwide due to the Great East Japan Earthquake and the flooding in Thailand. 
Operating income 117,604 5,837 (57.3) -Unstable production levels impacted efficient operations and forced the Company to place the greatest priority on delivering products based on alternative production operations. As a result, income decreased year-on-year. 
Ordinary income 2,429 6,635 (63.4) -The Company posted an extraordinary loss of 2.186 billion yen as a result of the damage caused by flooding in Thailand.
Current net income 584 4,572 (87.2)

Joint Ventures

- The Company and G-TEKT Corp. announced that a new Mexican subsidiary is named G-One Auto Parts de Mexico, S.A. de C.V. The new company will start operations in January 2014. (From a press release on April 26, 2012)

- The Company and G-TEKT Corp., both in Saitama Pref., Japan, announced additional information including the site and the production volume concerning their joint-venture plan in Mexico, which they announced on Dec. 26, 2011. The company will be established in Celaya, Guanajuato, Mexico. An operating officer of G-TEKT will be its representative. They will invest approx. US$46 million (approx. 3,528 million yen) in total and plan to achieve sales of approx. US$66 million (approx. 5.06 billion yen) in 2015. With a large-size transfer press and welding facilities, they plan to produce automotive parts of 200,000 vehicles per year. The two companies had announced that, in order to respond to growing businesses of automakers, they would establish in February a new fifty-fifty joint venture company in Mexico, which would start operations in April 2014. (From an article in the Nikkan Jidosha Shimbun on January 21, 2012)

- The Company and G-TEKT Corp. announced that they will establish a 50-50 joint venture, which will manufacture and sell automotive components, in Mexico. The new company, capitalized at approximately 20 million USD, is expected to be operational in April 2014. (From a press release on December 26, 2011)


- The Company received orders for structural body parts from Daihatsu Motor for its new mini car "Mira e:S." Products will be delivered from H-ONE's Nakatsu Plant in Oita Prefecture that was inaugurated in August to Daihatsu Kyushu, which produces the e:S. The orders covering two products of A pillar and C pillar connecting the roof and the body. They are the first auto parts for volume production at the Nakatsu Plant. Following this business, H-ONE is anxious to explore new business opportunities with automakers with their production facilities located in the Kyushu area. (From an article in the Nikkan Jidosha Shimbun on September 22, 2011)

Medium-term Management Plan

- The Company a Honda group body parts supplier, will enhance development functions in China and Asian regions. The supplier will begin preparations for establishing functions of developing dies and parts in China and Thailand. Final decisions will be made at a strategic meeting to be held in Japan and attended by regional managers from overseas operations. Expanded use of local materials and development of specifications catering to the local needs are becoming crucial to reinforcing overseas operations. H-ONE will put in place capabilities to develop and design parts in China and Asia, following North America, in a bid to increase a competitive edge by conducting efficient and optimal development activities worldwide. (From an article in the Nikkan Jidosha Shimbun on August 31, 2011)

- The Company a body structure parts supplier in the Honda group, drafted a long-term vision to raise its consolidated sales 60 percent to 200 billion yen and consolidated profit margin 2.2 percentage points to 7.5 percent respectively in fiscal 2020 from the base year of 2010. The long-tem business plan calls for efforts to boost production and enhance cost competitiveness in Asia focused on China, to make inroads into Latin American markets and to absorb new needs in emerging countries. The company aims to enhance productivity in the U.S. where the market is recovering. Meanwhile, in Japan and Europe where the market is bound to shrink or level off, H-one will narrow down investment to make efficient use of management resources in order to accomplish goals. Based on this vision, the company foresees the global market in fiscal 2020: 29 million vehicles in China an increase of 61 percent from fiscal 2010, 15.3 million in Asia by 77 percent, 7 million in Latin America primarily in Brazil by 35 percent, 17.7 million in North America by 33 percent counting on a slow but steady recovery in the market. On the contrary, it forecasts 4.4 million in Japan down by 12 percent and 18.1 million in Europe down only slightly. (From an article in the Nikkan Jidosha Shimbun on May 30, 2011)

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)


R&D Expenditure

(in millions of JPY)
  FY ended Mar. 31, 2012 FY ended Mar. 31, 2011 FY ended Mar. 31, 2010
Overall 813 764 692

-Most of the Company's R&D expenditure was directed to automotive parts related businesses.

R&D Structure

-Centering on its development technology headquarters, the Company carried out R&D activities in cooperation with many research and development institutions including those of Honda Group.

R&D Facility

Research and development center Tochigi pref. Japan

Recent R&D Achievements (Automotive Component Division)

-Developed a welding/mating process
-Developed stamping process technology for high tensile materials and light weight materials
-Developed a class sheet metal components stamping process
-Developed functional parts by incorporating thick plate precision stamping technology and assembly technology
-Developed material hardening technology
-Developed an in-house information system based on CAD, CAM, and CAE technology; and trained engineers to use it
-Developed stamping process technology for precision metal parts

Technological Cooperation

(As of Mar. 31, 2012)
Partner Country Contract Contract term
UYT Ltd. UK Automotive parts From July 17,2001 to July 16, 2006 (Automatically renewed yearly)
Yachiyo of Ontario Manufacturing Inc. Canada Automotive parts From July 1, 2006 to Jun.30, 2010 (Automatically renewed yearly)

Investment Activities

Capital Expenditure

(in millions of JPY)
  FY ended Mar. 31, 2012 FY ended Mar. 31, 2011 FY ended Mar. 31, 2010
Overall 13,424 6,836 8,049

-The Company's capital investment was mainly directed towards the automotive business.
-Also, 4,744 million yen was spent on installing special manufacturing equipment to support mass production of components for new vehicle models; the remaining 8,678 million yen was spent in installing general production equipment and expanding production facilities.
- WH Auto Parts Industries Inc. started construction of its second production facility, where it plans to install a welding line requiring less space but providing greater usability. This is the first of several installations of this new type of production line, which will be gradually installed in plants in other regions.
-Commercial production was launched in the summer of 2011 at H-one Parts Sriracha Co., Ltd. in Chonburi Province, Thailand, where the Company had been making preparations to launch production since the fall of 2010; and at the Nakatsu Plant in Nakatsu, Oita Prefecture.
-In Mexico, where the Company has been increasing its production volume, the Company formed a joint venture with another supplier in the industry, establishing a new production facility.

- The Company will double the daily production capacity of its Kameyama Nakatsu Factory, Nakatsu, Oita Pref., Japan, which manufactures structural parts of the Daihatsu Mira e: S, to 1,000-vehicle worth of parts by March 2012. Although its original plan was 500-vehicle worth of parts per day, it has already raised production to 1.5 times as many. It will add some welding facilities by next spring in order to address requests for even larger production. The Kameyama Nakatsu Factory is H-one's first plant in Kyushu, which was built to manufacture structural body parts of the Mira e: S. Its operation started in August this year. The parts are made from high-tensile steel sheet, which helps reduce the autobody weight. As the major operation at the new plant is the welding process of stamped parts, H-one will add some welding equipment in order to increase the production capacity next spring. It will try to hold down new investment by various efforts including transferring existing equipment. (From an article in the Nikkan Jidosha Shimbun on November 15, 2011)

- The Company  which manufactures automotive structural components, will raise the ratio of automated operation on the welding lines at its plants in both China and Thailand to more than 80 percent. The move is intended to slash labor cost and improve product quality. WH Auto Parts Industries, its subsidiary in China, is aiming to increase automatic operation by 60 percent to 94 percent during fiscal year 2012. H-one Parts (Thailand) Co., Ltd. in Thailand will introduce a robot system, which is expected to hike the ratio of automatic work from below 10 percent to 80 percent by fiscal year 2013. H-one Parts Sriracha Co., Ltd., a new subsidiary in Thailand scheduled for production launch at the end of fiscal year 2011, is also planning to ensure the same level of automation ratio as H-one Parts (Thailand). The automation project is expected to reduce labor costs at each facility by 40 to a little over 70 percent, which will contribute to increasing efficiency and enhancing competitiveness. (From an article in the Nikkan Jidosha Shimbun on May 24, 2011)

New Equipment Installations

(As of Mar. 31, 2012)
Company Name Location Estimated total amount of investment
(in millions of JPY)
Project duration
From To
Kameyama Factory Mie Pref. Japan 801 Sep. 2011 Feb. 2014
Maebashi Factory Gunma Pref. Japan 2,911 Aug. 2011 Jan. 2014
Koriyama Factory Fukushima Pref. Japan 2,608 Apr. 2011 Feb. 2014
Consolidated Subsidiaries
KTH Parts Industries Inc. Ohio, USA 2,252 Apr. 2011 Sep. 2014
Kalida Manufacturing, Inc. Ohio, USA 560 May. 2011 Sep. 2014
KTH Leesburg Products, LLC. Alabama, USA 867 Mar. 2012 Mar. 2014
KTH Shelburne Manufacturing, Inc. Ontario, Canada 295 Mar. 2012 Mar. 2014
GH Auto Parts Industries Inc. Guangdong, China 2,527 Dec. 2011 Nov. 2013
QH Auto Parts Industries Inc. Guangdong, China 2,171 Dec. 2011 Dec. 2013
WH Auto Parts Industries Inc. Hubei, China 4,416 Dec. 2011 Oct. 2013
H-one Parts (Thailand) Co., Ltd. Ayutthaya ,Thailand 4,076 Dec. 2011 Dec. 2013
H-one Parts Sriracha Co., Ltd. Chonburi, Thailand 323 Apr. 2012 Mar. 2014
H-one India PVT., Ltd. Uttar Pradesh, India 405 Apr. 2012 Apr. 2013