- Home
- Supplier Database
- Major Suppliers
- Riken Corporation
- Riken Corporation Business Report FY ended Mar. 2016
Riken Corporation Business Report FY ended Mar. 2016
Financial Overview
|
(in million JPY) |
|
FY ended Mar. 31, 2016 |
FY ended Mar. 31, 2015 |
Rate of Change (%) |
Factors |
Overall |
Sales |
73,292 |
72,486 |
1.1 |
-Sales increased because of favorable currency translation due to the weak yen. |
Operating income |
5,579 |
5,615 |
(0.6) |
-Income fell because of increased sales administration fees as a result of incurring expenses for installing systems. |
Ordinary income |
6,163 |
6,812 |
(9.5) |
-Sales fell because of negative currency translation. |
Profit for the year attributable to owners of the parent |
3,524 |
4,042 |
(12.8) |
-Income fell because the Company posted an extraordinary reserve to pay for expenses that are anticipated in renovating the Radio Frequesncy Anechoic Chambers business. |
Automotive and Industrial Machinery Parts Division |
Sales |
60,572 |
60,438 |
0.2 |
- |
Operating income |
4,257 |
4,024 |
5.8 |
- |
Business Alliances
-The Company will expand its joint-venture business with Germany-based KSPG AG in order to more than double the volume of piston rings it supplies to KSPG. The Company's piston rings are expected to account for 25% of all piston rings used in KSPG's power cylinder units by the fiscal year ending March 2021, which will be a significant increase from the current level of a little over 10%. The two companies operate joint venture businesses in China and India, where the Company supplies high-performance piston rings for KSPG's power cylinder units. The Company's products are mainly used in power cylinder units for luxury models produced locally by European automakers, but recently, they are increasingly adopted for mass-market vehicles as well. The Company intends to receive more orders from KSPG by accelerating joint development of power cylinder units that are more environmentally friendly and have a longer product life. The Company is a leading piston ring supplier in Japan, delivering 50% of the products required by Japanese automakers. However, its supply volume to non-Japanese OEMs accounts for only 8% of all piston ring requirements by these customers, and the Company's global market share stands at around 20%. Expanding supply to foreign automakers is expected to be the key to the Company's future growth. In order to achieve its mid-term goal for a 30% share of the global market, the company is looking to supply 18% of piston rings required by non-Japanese automakers by aggressively developing their demand. (From an article in the Nikkan Jidosha Shimbun on September 13, 2016)
Joint-venture Company
Joint-venture Company in China Launches Operations
-KSPG AG announced that the joint venture between Kolbenschmidt GmbH, KSPG’s wholly-owned subsidiary, and Japan's Riken Corporation is now officially starting its activities. The objective of the joint enterprise is the manufacture of piston rings in the Chinese province of Hubei. KS Kolbenschmidt has taken over 30 percent of the shares in Riken Automobile Parts (Wuhan) Co. Ltd. The company is located on a 12,000 square meter production facility in Wuhan, China. Riken has been running this business since 2004 and currently employs a workforce of 300. Products from the company are chiefly for automotive customers in China. (From a press release on March 21, 2016)
Management Plan
“Plan 2020” Mid-term Management Plan
-The Company announced its mid-term management plan "Plan 2020". Under the plan, Riken Group, including Riken's nonconsolidated subsidiaries, will aim to achieve sales exceeding JPY 140 billion in fiscal year 2020 (ends in March 2021), up 26.0% from FY 2015 (ended in March 2016). The Riken Group is targeting sales of JPY 130 billion at the end of the first stage of the plan, through FY 2018, to create momentum for meeting its goals in the second stage. Specifically, The Company will try to win more orders for ultrathin camshafts made of chilled iron and small components for downsized engines. Moreover, the company’s portfolio of value-added products with high heat and wear resistance including valve guides, valve seats, and bushes for turbo engines will be expanded in order to boost sales. The Company will also focus on winning more orders from non-Japanese automakers for piston rings, its mainstay product, by taking advantage of its tie-up with the German piston maker Kolbenschmidt, which was strengthened in FY 2015. The Company is planning to expand sales in China, where the company is operating a joint venture with a local partner to raise its global share of the piston ring market from present 20% to 30%. The planned capital expenditure in the mid-term plan amounts to JPY 45 billion. (From an article in the Nikkan Jidosha Shimbun on June 23, 2016)
Increasing Sales to Non-Japanese OEMs
-The Company plans to triple net sales of piston rings from non-Japanese automakers by the fiscal year ending in March 2021 (FY 2020) from the FY 2014 level. The Company intends to strengthen marketing activities for non-Japanese carmakers and expand its main piston ring business with European and U.S. manufacturers by forming a global alliance with a German piston manufacturer, KS Kolbenschmidt GmbH, building on its existing partnership in India. The Comapny’s piston rings sales from non-Japanese manufacturers currently accounts for 15 to 20%, but the ratio will be increased to around 40% by FY 2020. (From an article in the Nikkan Jidosha Shimbun on June 22, 2015)
Outlook for Fiscal Year Ending in March 2017
|
(in JPY millions) |
|
Estimated for FY Ending March 2017 |
Actual for FY Ended in March 2016 |
Percentage increase/decrease (%) |
Sales |
73,000 |
73,292 |
(0.3) |
Operating income |
5,200 |
5,579 |
(6.8) |
Ordinary income |
5,800 |
6,163 |
(5.9) |
Profit for the year attributable to owners of the parent |
3,600 |
3,524 |
2.2 |
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
R&D Expenditure
|
(in million JPY) |
|
FY ended Mar. 31, 2016 |
FY ended Mar. 31, 2015 |
FY ended Mar. 31, 2014 |
Overall |
1,603 |
1,550 |
1,550 |
-Automotive and Industrial Machinery Parts |
1,555 |
1,498 |
1,527 |
R&D Structure
-The New Product Development Department conducts R&D activities for the purpose of developing innovative new products for new areas of development such as hybrid, electric vehicles, etc.
-The automotive and industrial-equipment business has an R&D department, ring technology department, ring-production department, and product-development and production-technology department in each production section.
R&D Activities
Automotive-Industrial Machinery Parts Business
1. Development of low-friction/long-life piston rings for gasoline engines, which improve fuel efficiency.
2. Development of piston rings for fuel-efficient diesel engines that meet exhaust-gas regulations.
3. Development of low friction seal parts for automotive and industrial-machinery, which reduce fuel consumption.
4. Development of lightweight, low-friction, highly durable valve parts for automotive and industrial equipment use.
5. Development of technology for treating any kinds of surfaces, which achieves high performance in terms of sliding properties and durability
6. Development of lightweight, high-strength underbody parts
7. Development of high-strength aluminum products that excel in durability.
Technology licensing-out Agreement
|
(As of Mar. 31, 2016) |
Company name |
Country |
Contract |
Contract date |
Contract period |
Taiwan Riken Ind. Co., Ltd. |
Taiwan |
Manufacturing methods for piston rings, cylinder liners, blocks, camshafts, knuckles, and cast products. |
Aug. 22, 2008 |
9 years |
Siam Riken Ind. Co., Ltd. |
Thailand |
Manufacturing methods for piston rings |
Jan. 18, 2015 |
5 years |
P.T. Pakarti Riken Indonesia |
Indonesia |
Manufacturing methods for pipe fittings and cast products |
Jan. 1, 2006 |
5 years |
Shriram Pistons & Rings Ltd. |
India |
Manufacturing methods for piston rings |
Mar. 1, 2014 |
7 years |
Amtek Riken Casting Private Limited |
India |
Manufacturing methods for camshafts, knuckles, and various cast products |
Jul. 3, 2015 |
Until the end of the joint-venture agreement |
Allied Ring Corporation |
U.S. |
Manufacturing methods for piston rings |
Jan. 1, 2014 |
May 31, 2017 |
Grede Holdings LLC |
U.S. |
Manufacturing methods for knuckles and damper forks |
Aug. 17, 2010 |
6 years |
Manufacturing methods for lower control arms |
Aug. 17, 2010 |
6 years |
Korea Piston Ring Inc. |
Korea |
Manufacturing methods for piston rings |
Mar. 1, 2015 |
5 years |
Xiamen Riken Ind. Co., Ltd. |
China |
Manufacturing methods for piston rings |
Jul. 1, 2013 |
10 years |
Manufacturing methods for camshafts |
Jul. 1, 2013 |
10 years |
Riken Automobile Parts (Wuhan) Co., Ltd. |
China |
Manufacturing methods for piston rings, seal rings, valves, and cast parts train |
Mar. 1, 2015 |
5 years |
RIKEN SEALING PARTS (WUHAN) CO.,LTD. |
China |
Manufacturing methods for seal rings |
Jul. 1, 2015 |
5 years |
Riken Mexico, S.A. De C.V. |
Mexico |
Manufacturing methods for valve lifters |
Sep. 1, 2013 |
5 years |
Manufacturing methods for seal rings |
Jul. 1, 2014 |
Until Aug. 31, 2018 |
Manufacturing methods for piston rings |
Sep. 1, 2015 |
3 years |
Capital Expenditure
|
(in million JPY) |
|
FY ended Mar. 31, 2016 |
FY ended Mar. 31, 2015 |
FY ended Mar. 31, 2014 |
Overall |
9,185 |
5,904 |
5,943 |
-Automotive and Industrial Machinery Parts |
7,254 |
4,725 |
5,610 |
Automotive-Industrial Machinery Parts Business
-Capital investments in machine processing, surface treatment facilities, and machine processing facilities at the Mexican subsidiary.
-The Company's Tsurugi Plant in Kashiwazaki-shi, Niigata Prefecture, has introduced a compact line at its piston ring manufacturing facility. The new line will start producing piston rings for Japanese automakers in August 2015. The highly flexible production line will allow the Company to meet small-lot orders (e.g. several hundred thousand units per month) more easily, while saving line space, construction cost and labor cost. The compact lines will be introduced to the Company's plants outside Japan in the future to make it easier to shift the production overseas when necessary. (From an article in the Nikkan Jidosha Shimbun on June 29, 2015)
Planned Capital Investments
|
(As of Mar. 31, 2016) |
Company Office |
Location |
Purpose |
Planned investment amount (in million JPY) |
Kashiwazaki Plant |
Niigata Prefecture, Japan |
Installing production facilities for making piston rings and auto parts |
2,375 |
Kumagaya Plant |
Kumagaya City, Saitama Pref. |
Installing production facilities for making piston rings and auto parts |
693 |
Riken Mexico, S.A. De C.V. |
Aguascalientes, Mexico |
Installing new equipment to produce auto parts |
711 |
Riken Automobile Parts (Wuhan) Co., Ltd. |
Wuhan, China |
Installing new equipment to produce auto parts |
702 |
P.T. Pakarti Riken Indonesia |
Sidoarjo, Indonesia |
Installing new equipment to produce auto parts |
549 |