H-ONE Co., Ltd. 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 138,042 117,604 17.4 -Production volume of automotive frames increased in line with the higher production levels of vehicles worldwide.
Operating income 5,595 2,490 124.7 -
Ordinary income 5,624 2,429 131.5
Current net income 5,081 584 770.0 1)

1) Current Net Profit
-While the Company posted an extraordinary loss of 1.074 billion yen for the damage it suffered from the flooding in Thailand, it posted an extraordinary profit of 2.610 million yen, which it received as an insurance benefit payment.

-While sales in Japan of facilities for dies and welding equipment sold to its subsidiary and affiliate companies increased, sales overall were lower year-on-year due to the sluggish production levels of automotive frames from the summer season and after, and to the shift in demand for mini-car. Operating revenue fell 9.6% year-on-year. On the other hand, due to the Company's effective cost-cutting initiatives, it was able to increase its operating profit by 107.2% year-on-year.

<Europe, North America>
-Record-breaking production levels of the Company's products in North America, which resulted from strong automotive sales at OEMs, contributed to the increase in operating revenue for the year. In addition, favorable currency translation also helped increase operating revenue, which was a 54.0% rise. Operating profit rose 910.6% year-on-year in spite of the higher expenses incurred to increase production volume.

-Production levels rose through the third quarter, which were supported by greater automotive demand. However, operating revenue decreased 6.5% year-on-year, and operating profit decreased 1.4% year-on-year, due to the huge drop in production levels starting from the fourth quarter because of the tense situation between Japan and China.

<Asia, Oceania>
-H-one Parts (Thailand) Co., Ltd. started full commercial production from April, after having suffered damage from the flooding in the country. Production reached record-breaking levels between the second to fourth quarters. As a result, operating revenue increased 82.0% year-on-year. On the other hand, the region recorded an operating loss of 460 million yen (compared with a loss of 271 million yen during the previous fiscal year), due to the huge amount of expenses incurred to increase production volume, as well as the high initial costs for launching production at H-one Parts Sriracha Co., Ltd., even though it was awarded a lot of program business one after the other. Its addition to the scope of consolidated results since the last reporting period had a negative impact on the financial results of this fiscal year.

Joint Ventures

-On October 31, The Company and G-TEKT Corp. announced that they will jointly invest to establish a new company in Indonesia in December. This is a move to respond to their leading customer, Honda expanding its business. The new facility to produce body structural parts will be built at the Bukit Indah Industrial Park, Karawang, Jawa Barat. The fifty-fifty joint venture will be capitalized at about 600 million yen. Mass production is scheduled to begin with the welding process only in August 2013. Stamping parts will be procured from the subsidiary of G-TEKT or local suppliers in Indonesia. (From an article in the Nikkan Jidosha Shimbun on Nov. 2, 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 subsidiary is named G-One Auto Parts de Mexico, S.A. de C.V., capitalized at approximately 20 million USD, is expected to be operational in January 2014.


-The Company has won a contract to supply body frame parts for Suzuki's compact vehicles built in Thailand. H-One supplies its products to Honda, Daihatsu, Hino, Nissan and Mitsubishi Motors, but this is the first time for it to deal with Suzuki Motor. Starting in the spring of 2014, H-One will deliver front side members, its major products, and other four stamped components. These products will be made from lightweight and high-tensile materials of 780MPa-class as well as 980MPa-class with ultra-high strength levels. Production will be handled at H-One Parts Sriracha Co., Ltd. (HPS), H-One's new subsidiary in southern Thailand that started operations in 2011. In preparation for the new program, HPS will enhance its die-making and welding lines, while installing a new, 2,500-ton transfer press machine for operation launch in 2015. Expecting further growth in demand in the future, the subsidiary has already acquired about 120,000 square meters of land adjacent to its existing facility that has an area of approximately 64,000 square meters. (From an article in the Nikkan Jidosha Shimbun on Feb. 20, 2013)

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


R&D Expenditure

(in millions of JPY)
  FY ended Mar. 31, 2013 FY ended Mar. 31, 2012 FY ended Mar. 31, 2011
Overall 970 813 764

-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 Facilities

Name Location
Research and development center Tochigi Pref. Japan
Model development center Tochigi Pref. Japan
Development & Engineering center Fukushima 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 outer parts 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

Investment Activities

Capital Expenditure

(in millions of JPY)
  FY ended Mar. 31, 2013 FY ended Mar. 31, 2012 FY ended Mar. 31, 2011
Overall 17,813 13,424 6,836

-The Company's capital investment was mainly directed towards the automotive business.
-Automotive Parts Business: Invested 8,816 million yen for special facilities and equipment used exclusively to produce new types of automotive parts; and invested 8,998 million in standard facilities and equipment and in upgrading factories in order to raise production efficiency.

-Consolidated all of the die production operations into the plant at Koriyama, Fukushima Prefecture in order to produce dies more efficiently. This shortened the lead-time for dies.

-Installed more machines at H-one India PVT., Ltd. in order to increase the company's capacity to produce dies in-house.


-Plant No. 2 was completed at WH Auto Parts Industries Inc., with the launch of operations with a compact welding line boasting huge competitive advantages and offering a high degree of flexibility in terms of use.
-More transfer presses were installed at QH Auto Parts Industries Inc., increasing its ability to function as a supply hub to ship stamped parts to other Group companies in China.

- Robots were added to the existing stamping lines at GH Auto Parts Industries Inc., significantly improving work efficiency.


-H-one Parts Sriracha Co., Ltd., in anticipation of production increases, is installing large-size stamping machines. 

-H-one Parts (Thailand) Co., Ltd. is advancing automated production lines by installing robots to do the welding processes, with the main objective being to increase production efficiency.

New Equipment Installations

(As of Mar. 31, 2013)
Company Name Location Estimated total amount of investment
(in millions of JPY)
Project duration
From To
Kameyama Factory Mie Pref. Japan 3,259 Feb. 2013 Jan. 2015
Maebashi Factory Gunma Pref. Japan 3,561 Mar. 2013 Jan. 2015
Koriyama Factory Fukushima Pref. Japan 3,463 Sep. 2012 Mar. 2015
Consolidated Subsidiaries
KTH Parts Industries Inc. Ohio, USA 2,524 Sep. 2012 Sep. 2015
Kalida Manufacturing, Inc. Ohio, USA 3,559 Mar. 2013 Mar. 2016
KTH Leesburg Products, LLC. Alabama, USA 1,881 May 2012 Sep. 2015
KTH Shelburne Manufacturing, Inc. Ontario, Canada 838 Mar. 2013 Sep. 2015
GH Auto Parts Industries Inc. Guangdong, China 4,456 Aug. 2012 May 2015
QH Auto Parts Industries Inc. Guangdong, China 160 Dec. 2012 Mar. 2015
WH Auto Parts Industries Inc. Hubei, China 4,880 Oct. 2012 Jul. 2015
H-one Parts (Thailand) Co., Ltd. Ayutthaya ,Thailand 4,456 Dec. 2012 Jun. 2015
H-one Parts Sriracha Co., Ltd. Chonburi, Thailand 1,386 Mar. 2013 Jun. 2015
H-one India PVT., Ltd. Uttar Pradesh, India 692 Mar. 2013 Sep. 2015