Press Kogyo Co., Ltd. Business Report FY ended Mar. 2014

Business Highlights

Financial Overview

(in millions of JPY)
  FY ended Mar. 31, 2014 FY ended Mar. 31, 2013 Rate of Change (%) Factors
Sales 183,618 175,122 4.9 -
Operating income 9,400 8,886 5.8 -
Ordinary income 10,098 9,664 4.5 -
Net income 6,270 5,588 12.2 -
Automotive parts division
Sales 157,368 145,543 8.1 1)
Operating income 12,038 10,609 13.5 -

1) Sales of Automotive Business
-In Japan, demand for medium-duty trucks increased by 11,000 units from the previous year to 80,000 units. Demand for small trucks also grew from last year. It totaled 92,000 units, up 16,000 units from the previous year.  

-Exports of medium-duty trucks decreased from the previous year mainly because of a decline in demand for knockdown parts. Meanwhile, exports of small trucks increased year-on-year supported by strong demand from North America throughout the year.

-Sales grew at PK U.S.A., INC. thanks to strong demand in the U.S. market throughout the year.

Recent Development Outside Japan

-The TSPKK Group, which includes Thai Summit PKK Co., Ltd., Thai Summit PKK Engineering Co., Ltd., Thai Summit PKK Bangpakong Co., Ltd., and Thai Summit PK Corporation Ltd., is setting up production lines to produce both frames for the next-generation 1-ton pick-up and axles based on a new contract.

-PT. PK Manufacturing Indonesia began mass-producing frame products for medium- and small-trucks in January 2014, planning to expand its market in steps.

-PK U.S.A., Inc. will begin producing axle components for a U.S. automaker in June 2014.

Mid-term Management Plan (FY ending March 2015 - FY ending March 2019)

-The Company has drawn up a mid-term business plan. According to the plan, the Company aims to achieve a 10% operating profit on sales of JPY 270 billion in the fiscal year ending March 31, 2019. The Company plans to increase sales by 47%, and double the operating profit from the target figure for the fiscal year ending March 2014. In order to achieve this goal, the Company will expand sales of modules which are currently only sold to a percentage of customers. In addition, the Company will increase the local procurement ratio at its overseas subsidiaries in the U.S., Thailand and Indonesia. The Company will further modularize its key products, including axles and frames for heavy-duty trucks. In many cases, these axle and frame units are assembled in-house by individual truck manufacturers with peripheral components being procured from specific part suppliers. The Company intends to promote sales of the Company's modules to these truck manufacturers. The range of processing will be expanded for the modularization by improving basic technologies such as stamping and machining.

-Sales by Business (Unit:%)
FY ending Mar. 31, 2019
FY ended Mar. 31, 2014
(Actual Results)
Automotive components 76 83 (7)
Construction machinery components 19 14 5
Others 5 3 2

-Sales by Region (Unit:%)
FY ending Mar. 31, 2019
FY ended Mar. 31, 2014
(Actual Results)
Japan 55 65 (10)
Thailand 19 22 (3)
Americas 11 8 3
China 5 2 3
Europe 4 3 1
Indonesia 4 0.4 3.6
Others 3 - -

Outlook for FY ending Mar. 2015

(in millions of JPY)
  FY ending Mar. 31, 2015
FY ended Mar. 31, 2014
(Actual Results)
Rate of Change
Sales 180,000 183,618 (2.0)
Operating income 9,000 9,400 (4.3)
Ordinary income 8,500 10,098 (15.8)
Net income 5,400 6,270 (13.9)

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


R&D Expenditures

(in millions of JPY)
  FY ended Mar. 31, 2014 FY ended Mar. 31, 2013 FY ended Mar. 31, 2012
Overall 262 263 249
Automotive components 179 136 140

R&D Activities

-The Company is focusing on developing its major products such as axles and frames based on a medium- and long-term prospective.

Automotive Components
  • FEM (finite element method) analysis: the Company's plastic manufacturing process simulation can simulate the high-speed deformation processes of materials in the die, which cannot be tested visually. This technology greatly contributes to identifying the cause of accuracy problems, finding out measures to solve the problem, reducing the development lead time, and cutting down on development cost.
  • Structural analysis in the design stage: utilizing the FEM analysis method and the Company's original database helps exploring ways to reduce the product weight.
  • Weld assembly: the Company introduced a new friction welding machine to assemble axle tubes at its Saitama Plant. This machine is the first of its kind in Japan.

Product Development

-The Company is enhancing modularization in the area of axles and frames for large trucks by integrating peripheral parts such as suspensions and shafts. In many cases, these axle and frame units are currently assembled in-house at each truck manufacturer. By utilizing stamping, cutting and other processing techniques, the Company is developing new frame and axle modules to enhance its high value-added product lineup. Outside Japan, the Company currently supplies its high-strength truck frames to large truck manufacturers which the Company has never supplied to in the domestic market. Demand for truck frames with great durability is particularly strong in emerging countries due to overloading on rough roads. The Company is poised to meet such demand by increasing the use of high-strength materials such as high-tensile steel and taking advantage of its leading technologies to manufacture price-competitive products with high processing accuracy. Through these measures, the Company intends to differentiate its products from those of truck manufacturers and other competing suppliers. (From an article in the Nikkan Jidosha Shimbun on September 30, 2013)

Investment Activities

Capital Expenditure

(in millions of JPY)
  FY ended Mar. 31, 2014 FY ended Mar. 31, 2013 FY ended Mar. 31, 2012
Automotive components 7,395 6,693 10,042
Construction machinery components 5,636 1,674 1,390
Others 70 1 2
Overall 13,101 8,368 11,435
-The Company focused its investment activities on building up its production operations, promoting labor savings, enhancing production efficiency, and improving the reliability of its products in order to respond to new program business for frames, axles, suspensions, construction machinery cabs and panels, which are its main products.

Planned Capital Investments (Automotive components)

(As of Mar. 31, 2014)
Name Purpose Planned amount
of investment
(in millions of JPY)
Planned completion
Fujisawa Plant
(Fujisawa City, Kanagawa Pref., Japan)
Painting equipment
343 Mar. 2013 Sep. 2014
Production equipment for axles 810 May. 2012 Mar. 2015
PK U.S.A., Inc.
(Indiana, USA)
Production equipment for panels 442 Mar. 2013 Aug. 2014
Thai Summit PKK Co., Ltd.
(Chonburi, Thailand)
Production equipment for axles 893 Jun. 2013 Aug. 2014
Production equipment for frames
845 Jun. 2013 Aug. 2014
Thai Summit PK Bangpakong Co., Ltd.
(Chonburi, Thailand)
Production equipment for axles 1,155 Mar. 2013 Oct. 2014
Production equipment for axles 2,356 Jan. 2013 Oct. 2014
Thai Summit PK Corporation Ltd.
(Rayong, Thailand)
Production equipment for frames
1,331 Jul. 2013 Feb. 2015
PT PK Manufacturing Indonesia
(West Jawa, Indonesia)
New plant and production equipment
2,373 Dec. 2011 Sep. 2014