Riken Corporation Business Report FY2010

Business Highlights

Financial Overview

(in millions of JPY)
  FY2010 FY2009 Rate of Change(%) Factors
Sales 78,224 66,476 17.7 -Sales increased year-on-year because sales at affiliated companies in Asia and North America grew.
Operating income 5,809 2,009 189.1 -Profit increased a result of continued improvements in the Company’s cost structure and as a result of reductions in fixed costs
Ordinary income 7,184 4,002 79.5 -
Current net income 3,859 2,322 66.2 -
Automotive/Industrial Machinery Component Division
(excludes transactions among divisions)
Sales 64,415 54,048 19.2 -Sales increased, thanks to a significant increase in sales of mainstay products such as piston rings.
Operating income 4,619 732 531.0 -Profit grew a result of fixed costs being divided and spread over a greater volume of sales; and due to cost-cutting initiatives.

Performance Forecast

(in millions of JPY)
Rate of Change(%)
Sales 78,000
Operating income
5,500 5,810 (5.3)
Ordinary income
6,900 7,184 (4.0)
Net income
3,900 3,859 1.1


R&D Expenditure

(in millions of JPY)
  FY2010 FY2009 FY2008
Group 1,286
1,086 1,542
Automotive/Industrial Machinery Component 928
765 1,168

R&D Structure

-The Next-Generation Product Planning Division inaugurated its planning activities with the aim of creating new products in areas with high growth potential such as hybrid and electric vehicles.

-R&D activities in the Automotive/Industrial Machinery Component Business are conducted by the R&D Department, Piston-ring Technological Development Department, and the product development and production technology sections at each of the manufacturing divisions.

R&D Activities

-Automotive/Industrial Machinery Component
1. Low friction and long-lasting gasoline-engine piston rings that lower fuel consumption
2. Diesel engine piston rings to meet requirements for low fuel consumption and emission regulations.
3. Valve parts, transmission sealing rings
4. Various surface treatment technology that enables a high degree of high sliding performance
5. Light- weight and high-strength chassis parts

Licensing of technology to other companies

(As of Mar. 31, 2011)

Company name Country Contract Contract date Contract period
Taiwan Riken Ind. Co., Ltd. Taiwan Manufacturing methods for various forged steel engine components such as piston rings, cylinder liners, blocks, cam shaft, and knuckles Aug. 22, 2005 Terms for extending the agreement are subject to negotiation
Siam Riken Ind. Co., Ltd. Thailand Manufacturing methods for piston rings and other forged steel engine components Apr. 19, 2009 5 years
P. T. Pakarti Riken Indonesia Indonesia Manufacturing methods for joint and forged parts Jan. 1, 2006 10 years
Shriram Pistons & Rings Ltd. India Manufacturing methods for piston rings Mar. 1, 2007 7 years
Allied Ring Corp. USA Manufacturing methods for piston rings Jan. 1, 2009 5 years
Grede Foundries, Inc. USA Manufacturing methods for knuckles and damper forks
Aug. 17, 2010 5 years
Manufacturing methods for lower control arm Aug. 17, 2010 5 years
Korea Piston Ring Inc. Korea Manufacturing methods for piston rings Mar. 1, 2010 5 years
Xiamen Riken Ind. Co., Ltd. China Manufacturing methods for piston rings Aug. 1, 1999 12 years
Manufacturing methods for camshafts Oct. 1, 2004 7 years
Riken Automobile Parts (Wuhan) Co., Ltd. China Manufacturing methods for piston rings, seal rings, valves and other cast iron products. Mar. 1, 2005 10 years

Investment Activities

Capital Expenditure

(in millions of JPY)
  FY2010 FY2009 FY2008
Group 2,305
2,620 6,292
Automotive/Industrial Machinery Component 1,773
2,326 5,469

Automotive/Industrial Machinery Component Division
-The Company invested in facilities and equipment for processing and surface treating  vane pumps.

Planned Capital Investment

(As of Mar. 31, 2010)

Purpose Planned investment amount (in millions of JPY) Starting Estimated completion Production capacity increase upon completion
New addition
Kashiwazaki Plant
(Niigata Prefecture, Japan)
Installing production facilities for making piston rings and auto parts
1,212 Apr. 2011 Mar. 2012 No effect on production capacity
P. T. Pakarti Riken Indonesia Head office plant (Surabaya, Indonesia) Installing new equipment to produce auto parts 2,298 Mar. 2011 Mar. 2016 Production capacity increased by 50%