FUKOKU CO., LTD. Business report FY2006
Business Highlights
Financial overview
| In million JPY | FY2006 | FY2005 | Rate of Change (%) | Factors |
| Overall | ||||
| Sales | 51,848 | 48,008 | 8.0 | - Sales rose year-on-year, thanks to greater volume of business. |
| Operating income | 2,948 | 3,157 | (6.6) | - Retirement costs largely fell, as there was a 5 million yen balance from the previous year's reserve for retirement allowance. |
| Ordinary income | 3,082 | 3,363 | (8.3) | |
| Current net income | 1,778 | 1,657 | 7.3 | - Current net income increased from last year, due to the extraordinary income gained from selling some of its securities held for investment. |
| Industrial rubber products | ||||
| Sales | 44,184 | 41,092 | 7.5 |
- Sales went up year-on-year, supported by greater sales of anti-vibration products, as the Company won increased business from manufacturers of heavy-duty trucks and construction machinery, and also new supply contracts for passenger vehicles. The Company also enjoyed strong sales of high-performance wiper blade rubber. |
| Operating income | 2,665 | 2,934 | (9.2) | - Retirement costs largely fell, as there was a 5 million yen balance from the previous year's reserve for retirement allowance. |
Domestic Business
The Company will boost production of rubber used in flat blade windshield wipers. Holding a 33 percent share globally and nearly 100 percent domestically, the Company is the world's largest rubber supplier to the wiper blade industry today. In response to growing applications of flat blade windshield wipers by Japanese automakers, The Company will reinforce its production structure to ensure necessary capacity. (From an article in the Nikkan Jidosha Shimbun on Jan. 29, 2007)
Future Targets
Together with reinforcing its strategic products, the Company plans to maintain and improve its facilities abroad, in a line with the Company's mid- and long-term business operating strategy that is aiming to further enhance the organization as one of the leading companies in the world. In order to establish the support and management structure to achieve this, the Company is centralizing its operations at its headquarters as the core of its business and strengthening the headquarters' functions.
<Strengthening Overseas Operations>
The Company is going forth with its strategy of focusing on strengthening sales activities in both the USA and China.
China
-Recently, the Company has been focusing a lot of attention on China as a production location and as a potentially emerging and growing market. In this regard, the Company concentrated on reorganizing the factories of the following local businesses: Shanghai Fukoku Rubber & Plastic Industry Co., Ltd.; Fukoku Rubber & Plastics (Shanghai) Co., Ltd.; Dongguan Fukoku Rubber Co., Ltd.; Qingdao Fukoku Korea Auto Fittings Co., Ltd., and C.F.A.Gomma Co., Ltd.; and in addition, the Company established Fukoku International Trading (Shanghai) Co., Ltd. as a sales business, setting up local offices in Beijing and Shanghai.
USA
-The Company opened its local office in Detroit.
Thailand
- In 2006, the Company started building a new facility in Khoroat, Thailand.
R&D
Research
and development costs for fiscal year 2006 were 931 million yen.
Development of industrial rubber products
Automotive components development
- The Company developed isolation pulleys for small diesel engines to be installed in passenger vehicles manufactured by Japanese automakers.
- The Company won new business to supply two types of damper pulleys for commercial vehicles made by Japanese and non-Japanese automakers. The Company also developed five kinds of damper pulleys for use in passenger vehicles manufactured by a Japanese automaker.
- The Company was awarded a new supply contract to provide a viscous damper to commercial vehicles made by a Japanese automaker, developing four new types of viscous dampers.
- The Company launched joint development activities with a leading, non-Japanese brake manufacturer to engineer rubber products.
- The Company launched mass-production of diaphragms and valves for variable intake pressure controlling systems. It won a supply contract to deliver plastic exhaust system integrated valves, which are designed to make more light-weight valves.
Production support for products manufactured overseas (automotive components)
-The Company is preparing to start commercial production of boots for constant velocity joints. It will supply these boots to Japanese carmaker's plants in China, as well as to Japanese part suppliers.
- The Company developed and currently is in the process of preparing to mass-produce two types of damper pulleys for commercial vehicles to be built in Asia by a major Japanese automaker. It also is preparing to mass-produce another type of damper pulley for use in passenger vehicles assembled by major Japanese and U.S. automakers.
- The Company is working on starting mass production of brake booster diaphragms to supply to Chinese and the U.S. plants of a leading Japanese carmaker.
Elemental Technology
- The Company is conducting studies on ways to apply nano technology to rubber and elastomer, trying to turn the technology into a practical business solution.
The Company is conducting development activities to engineer silicon materials for OA rolls, which provide excellent heat insulating properties and a high level of durability.
Licensor (as of March 2007)
Development of industrial rubber products
Automotive components development
- The Company developed isolation pulleys for small diesel engines to be installed in passenger vehicles manufactured by Japanese automakers.
- The Company won new business to supply two types of damper pulleys for commercial vehicles made by Japanese and non-Japanese automakers. The Company also developed five kinds of damper pulleys for use in passenger vehicles manufactured by a Japanese automaker.
- The Company was awarded a new supply contract to provide a viscous damper to commercial vehicles made by a Japanese automaker, developing four new types of viscous dampers.
- The Company launched joint development activities with a leading, non-Japanese brake manufacturer to engineer rubber products.
- The Company launched mass-production of diaphragms and valves for variable intake pressure controlling systems. It won a supply contract to deliver plastic exhaust system integrated valves, which are designed to make more light-weight valves.
Production support for products manufactured overseas (automotive components)
-The Company is preparing to start commercial production of boots for constant velocity joints. It will supply these boots to Japanese carmaker's plants in China, as well as to Japanese part suppliers.
- The Company developed and currently is in the process of preparing to mass-produce two types of damper pulleys for commercial vehicles to be built in Asia by a major Japanese automaker. It also is preparing to mass-produce another type of damper pulley for use in passenger vehicles assembled by major Japanese and U.S. automakers.
- The Company is working on starting mass production of brake booster diaphragms to supply to Chinese and the U.S. plants of a leading Japanese carmaker.
Elemental Technology
- The Company is conducting studies on ways to apply nano technology to rubber and elastomer, trying to turn the technology into a practical business solution.
The Company is conducting development activities to engineer silicon materials for OA rolls, which provide excellent heat insulating properties and a high level of durability.
Licensor (as of March 2007)
| Partner | Contract | Validity |
| Rood (U.S.A.) | Design and manufacturing technology of torsion bushings and surface effects | From October 23, 2001 to October 23, 2011 |
| C.F. Gomma S.p.A | Design and manufacturing technology for air springs | From July 2, 2003 to July 1, 2013 |
Licensees (as of March 2007)
| Partner | Contract | Validity |
| Rood (U.S.A.) | manufacturing technology of viscous mounts | From October 23, 2001 to October 23, 2011 |
| C.F. Gomma S.p.A. (Italy) | Manufacturing technology of CVJ boots | From December 1, 2002 to November 30, 2012 |
Investment Activities
Total
capital investment in FY2006 was 4,815 million JPY.
-Capital investment in the Industrial Rubber Business: 4,428 million yen was invested mainly to rationalize and computerize facilities.
Construction and remodeling plans (as of March 2007)
-Capital investment in the Industrial Rubber Business: 4,428 million yen was invested mainly to rationalize and computerize facilities.
Construction and remodeling plans (as of March 2007)
| Name & Location | Facility type |
Planned investment (in million JPY) |
Construction Start | Planned completion | Expected increase in production capacity |
|
Ageo Plant (Ageo City, Saitama, Japan) |
Production facility for seal products | 229 | 2007.03 | 2008.03 | No significant increase is expected. |
|
Gunma Plant (Oura machi, Gunma, Japan) |
Production facility for anti-vibration products and rubber materials etc | 1,242 | 2006.11 | 2008.03 | A slight increase in the production volume of anti-vibration functional products |
|
Gunma No. 2 Plant (Chiyoda machi, Gunma, Japan) |
Production facility for wiper blade rubber and resin boots, experimental research facility, etc. | 1,017 | 2006.06 | 2008.03 | A five percent increase in the production capacity to make wiper blade rubber |
|
Sueyoshi Kogyo
Co., Ltd. (Kitaadachi-gun, Saitama, Japan) |
Production facility
for metalworking sheet metal products |
338 | 2006.01 | 2007.12 | A slight increase |
|
Fukoku Korea
Ltd. (Gyeonggi-do, Korea) |
Product facility for anti-vibration products and wiper blade rubber | 819 | 2006.10 | 2007.12 | A 13 percent increase in the production capacity to make anti-vibration functional parts |
|
Siam Fukoku Co.,
Ltd. (Samutprakarn, Thailand) |
Production facility for seal products | 750 | 2006.08 | 2007.12 | A seven percent increase in the production capacity to make seal products |