Metalart Corporation 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
Sales 27,238 25,707 6.0 -
Operating income 2,213 1,588 39.4 -
Ordinary income 2,200 1,650 33.3 -
Net income 1,384 1,014 36.5 -
Automotive Components
Sales 19,125 18,200 5.1 -Sales increased year-on-year although production volume for the Thai market decreased.

Recent Development in Japan

Expanding its business to produce complete components to meet an increase in demand in Kyushu
-The Company will introduce a precision forging machine to its production plant in Kyushu, Japan. The machine will be operational in January 2014. Currently, materials for forging have been delivered from the company's main plant in Shiga prefecture. In order to meet an increase in demand in Kyushu, the company will establish an integrated production system covering processes from forging to machine processing. Due to a decrease in domestic vehicle production, Metalart is expanding its business to produce complete components. This integrated production system will allow the company to deal with increased production from Daihatsu Motor Co., Ltd., its main customer, in Kyushu. (From an article in the Nikkan Jidosha Shimbun on September 11, 2013)

Recent Development Outside Japan

JV with Astra Otoparts in Indonesia
-The Company and PT. Astra Otoparts Tbk had signed JV Agreement to form a joint venture company to manufacture forging parts serving OEMs, i.e. crankshaft, gears, and connecting-rod. The new factory located on area of 3.2 hectare in Karawang International Industrial City (KIIC), in West Java, Indonesia. The accord entails the creation of a joint venture in which the Company will hold the majority position with 70% of the capital and Astra Otoparts will hold the remaining 30%. The joint venture, which will be called PT Metalart Astra Indonesia, will invest a total of USD 45.3 million. The new factory is expected to start mass production in July 2014 with an estimated production of around 60,000 units in 2014 and could reach 8.7 million units in 2017. (From a press release on September 4, 2013)

-The Company announced that it will establish a new subsidiary in Karawang, West Java, Indonesia, to manufacture and sell forging parts. The new company, which will be tentatively called PT. Metalart Indonesia, will be capitalized at approximately JPY 3.7 billion and will construct a plant covering an area of 32,000 square meters. Metalart Indonesia is scheduled to start its operations in September 2014 with some 65 employees. (From a press release on May 10, 2013)

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

Outlook for FY ending Mar. 31, 2015

(in millions of JPY)
  FY ending Mar. 31, 2015
FY ending Mar. 31, 2014
(Actual Results)
Rate of Change
Sales 25,500 27,238 (6.4)
Operating income 1,770 2,213 (20.0)
Ordinary income 1,790 2,200 (18.6)
Net income 1,100 1,384 (20.5)


R&D Activities

-The Company has worked on advancing digital engineering by conducting R&D activities that will lead to reducing the time needed to design new products and to create new dies.
-The Company focuses on developing advanced cold-forging methods as well as precision forging methods that combine hot-forging and cold-forging processes. It aims to produce high-quality and high-precision products by utilizing these technologies. The Company will also work on establishing an integrated production structure consisting of forging to machining in order to supply higher value-added products to its customers.

Technology Licensing-out Agreement

(As of Mar. 31, 2014)
Partners Country Technology The term of a contract
PT. Menara Terus Makmur Karawang,
Manufacturing technology for forged products Oct. 1996 -
(Automatic renewal)

Investment Activities

Capital Expenditure

(in millions of JPY)
FY ended Mar. 31, 2014 FY ended Mar. 31, 2013 FY ended Mar. 31, 2012
Overall 3,429 1,321 1,287

-During the fiscal year ended March 2014, the Company invested mainly in PT. Metalart Astra Indonesia, its new subsidiary.

Planned Capital Investments

(As of Mar. 31, 2014)
Company Location Facilities & Activities Total investment (in millions of yen) Start date Completion
PT. Metalart Astra Indonesia Karawang,
Facility for machining automotive parts 3,700 Jun. 2013 Sep. 2014