Fukoku Co., Ltd. Business Report FY2011

Business Highlights

Financial Overview

(in millions of JPY)
  FY ended Mar. 31, 2012 FY ended Mar. 31, 2011 Rate of Change (%) Factors
Overall
Sales 54,469 51,618 5.5 -The Great East Japan Earthquake and the nuclear-power-plant accidents tremendously impacted the Company's production and sales. Nevertheless, production later recovered, with the Company suddenly receiving a huge volume of new orders and responding to them by keeping in step with the operations of its major customers. The major flooding in Thailand also caused a reduction in new product orders. In the end, the revival in production and sales in Japan relieved the negative circumstances surrounding the Company, and the deteriorating market situation finally bottomed out. 
Operating income 3,173 3,803 (16.6) -
Ordinary income 3,267 3,801 (14.0) -
Current net income 2,323 1,159 100.4 -
Functional products
Sales 25,624 24,799 3.3 -After the earthquake in Japan, the Company experienced a recovery in orders.
Operating income 4,590 4,154 10.5 -
Anti-vibration products
Sales 20,974 19,768 6.1 -Operating revenue increased as a result of a recovery in production in Japan and as a result of increased orders for new business outside Japan.
Operating income 1,202 2,108 (43.0) -

Supply Agreements

-The following are major supply agreements in Fiscal Year ended Mar. 31, 2012.

Functional products
Product Customers Status
Valve for exhaust gas emission control Japanese parts supplier Commercial production started
Anti-vibration rubber for electric pumps used in hybrid vehicles Japanese parts supplier Commercial production started
Bush for hydraulic brakes used in hybrid vehicles Japanese parts supplier Commercial production started
Suspension seal Japanese parts supplier Commercial production started
Parts used in automotive cooling system Customer in China Commercial production started
CV boot Japanese OEM transplant in Malaysia Commercial production confirmed

Anti-vibration products
Product Customer Status
Damper pulley for high-performance diesel engines Japanese OEM Production order placed
Damper pulley for ethanol engines Japanese OEM Production order placed
Crank damper for hybrid vehicles Japanese OEM Production order placed
Coupling for new-type power windows Japanese parts supplier Development completed
Damper pulley Indian OEM Firm order placed
Torque rod Japanese OEM transplant in Thailand Firm order placed
Cap mount for SUVs Japanese OEM transplant in Indonesia Commercial production started
Torque rod Japanese OEM transplant in Indonesia Commercial production started

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

Outlook for FY ending Mar. 31, 2013

(in millions of JPY)
FY ending Mar. 31, 2013
(Forecast)
FY ending Mar. 31, 2012
(Actual Result)
Rate of Change (%)
Sales 58,000 54,469 6.5
Operating income 3,500 3,173 10.3
Ordinary income 3,500 3,267 7.1
Net income 2,100 2,323 (9.6)

R&D

R&D Expenditure

(in millions of JPY)
  FY ended Mar. 31, 2012 FY ended Mar. 31, 2011 FY ended Mar. 31, 2010
Overall 1,191 1,217 1,128

Technology Licensing-in Agreement

(As of Mar. 31, 2012)
Partner Contract Validity
C.F. Gomma S.p.A
(Italy)
Design and manufacturing technology for air springs From July 2, 2003 to
July 1, 2013

Technology Licensing-out Agreement

(As of Mar. 31, 2012)
Partner Contract Validity
C.F. Gomma S.p.A. (Italy) Manufacturing technology of CVJ boots From December 1, 2002 to
November 30, 2012

Investment Activities

Capital Expenditure

(in millions of JPY)
  FY ended Mar. 31, 2012 FY ended Mar. 31, 2011 FY ended Mar. 31, 2010
Overall 3,863 3,718 1,376
Functional products 2,010 1,619 1,263
Anti-vibration products 1,450 1,853

-The Group spent a total of 3,863 million yen in production facilities and equipment in order to better respond to the competition for winning new orders. It specifically invested in facilities and equipment mainly at Fukoku Korea, Fukoku India, and Fukoku Vietnam, as well as in production facility at Gunma No.2 Plant manufacturing wiper-blade rubber.

Development Outside Japan

<Thailand>
-The Company said a construction site of a new wiper parts plant in Thailand, which is planned by its consolidated subsidiary Siam Fukoku Co., Ltd., will be changed. A previously planned site with a land area of 64,000 square meters in Khon Kaen Province will be altered to a site with a land area of 66,508 square meters in Nakhon Ratchasima Province. A new location is expected to bring about such advantages as better collaboration with the existing plant and reduction in logistics costs. The new plant is scheduled to go into operation after July 2012. (From a press release on September 26, 2011)

Planned Capital Investments

(As of Mar. 31, 2012)
Company
Office
Purpose Estimated amount of investment (in millions JPY) From To
Siam Fukoku Co., Ltd. Acquiring a piece of land, constructing a new plant and and installing facilities for manufacturing industrial rubber 2,062 Aug.
2011
Apr.
2012
Fukoku India Private Limited Constructing a new plant and installing facilities for manufacturing industrial rubber  639 Apr.
2011
Sep.
2012
Fukoku Korea Co., Ltd. Constructing a new plant and installing facilities for manufacturing industrial rubber 1,090 Apr.
2012
Dec.
2012