Riken Corporation Business Report FY ended Mar. 2018
Financial Overview |
(in million JPY) |
| FY ended Mar. 31, 2018 | FY ended Mar. 31, 2017 | Rate of Change (%) | Factors | |
| Overall | ||||
| Sales | 87,583 | 75,904 | 15.4 |
-Sales increased both in and outside Japan; effect of newly consolidated companies |
| Operating income | 7,441 | 5,902 | 26.1 | -Increased due to an increase in sales. |
| Ordinary income | 8,379 | 5,982 | 40.1 | -Increased due to an increase in equity method investment gains. |
| Profit for the year attributable to owners of the parent | 4,386 | 3,928 | 11.6 | -Increased y/y despite an impairement. |
Business Alliance
ｰIn FY 2018, the Company and Takana Seimitsu Kogyo Co., Ltd. started discussions for a future business alliance. They aim to expand and develop their respective businesses further and to create new products and businesses. Tanaka Seimitsu Kogyo has strength in deformation material processing technologies, high-precision processing technologies and assemble technologies. The Company, whose strengths are in the material technologies and surface treatment technologies, aims to expand its business further by collaborating with Tanaka Seimitsu Kogyo.
-In April 2017, the Company formed a business alliance of the camshaft business with Brother Precision Ind. Co., Ltd., setting up Riken Brother Precision Industry Corporation in Chiryu City, Aichi Pref.
Management Plan
Business environment and forecast
The Company's forecast on the future trend of the automotive industry is as follows:
- Global market will expand mainly in emerging countries
- Connected, Autonomous, Shared, Electric (CASE) technologies will develop further
- Demand for internal conbustion engines hit its ceiling in the near future
Based on this forecast, the timeframe in the forecast of the business environment in "Plan 2020" announced earlier was front-loaded.
For FY 2018, the Company will advance its business globally and focus on creating new products and businesses.
Goals set in "Plan 2020" for the period to FY 2020 are:
- Sales exceeding JPY 140 billion
- Consolidated operating profit ratio exceeding 10%
Meanwhile, the goals by the end of FY 2018 were:
- Sales exceeding JPY 130 billion
- Consolidated operating profit ratio exceeding 9%
These goals were not achieved.
-The Company owns about 50% market share of piston rings in Japan and about 20% in the global market. The Company aims to increase its share in the global market by 10% to 30%.
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
R&D Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2018 | FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | |
| Overall | 1,567 | 1,597 | 1,603 |
| -Automotive and Industrial Machinery Parts | 1,502 | 1,539 | 1,555 |
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.
Product Development
The Company is working on product development with a goal of expanding its business and increasing sales of new products.
New products under development
ｰResin-made functional parts (gears, washers, belt pulleys, chipseal)
ｰSintered parts (reduction gears)
ｰNoise reduction sheets
The company announced that it has developed a noise-control sheet that mitigates electromagnetic interference. Riken jointly developed an alloy powder that has high saturation magnetic flux density and excellent soft magnetic characteristics with Tohoku University by utilizing its group companies' know-how in electromagnetic compatibility products like radio frequency anechoic chambers and electromagnetic wave absorption material. By using the alloy powder, Riken improved the noise reduction effect more than 20% compared to conventional products. The new noise-control sheet is applicable for up to 15 GHz and its thickness is only 25 micrometers. It has a high degree of size flexibility and can support various electronic devices. Riken has already started delivery of sample products, and will start selling the sheet as a noise-control product for automotive electric devices and information communications equipment from the fiscal year that ends in March 2019. (From an article in the Nikkan Jidosha Shimbun on October 24, 2017)
ｰHeat dissipation sheets
The Company developed heat dissipation sheets considering a rising demand for heat-emitting equipment.
Technology licensing-out Agreement |
(As of Mar. 31, 2018) |
| 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. | Jan. 1, 2018 | 2 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, 2016 | 5 years |
| Shriram Pistons & Rings Ltd. | India | Manufacturing methods for piston rings | Mar. 1, 2014 | 7 years |
| Allied Ring Corporation | U.S. | Manufacturing methods for piston rings | Jan. 1, 2014 | Until the end of the joint-venture agreement |
| Grede Holdings LLC | U.S. | Manufacturing methods for cast products | Apr. 1, 2016 |
5 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, 2018 | FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | |
| Automotive and Industrial Machinery Parts | 7,158 | 5,756 | 7,254 |
Automotive-Industrial Machinery Parts Business
-Capital investments in machine processing, surface treatment facilities, and machine processing facilities at the Mexican subsidiary.
Planned Capital Investments in FY ending March 2019
ｰPiston rings (China, Mexico, Japan)
Increasing production and rationalization of the facilities
ｰResin products (China, Mexico, Japan)
Increasing production and rationalization of the facilities
ｰOther (Japan, Indonesia)
Facility expansion for thermal engineering (Japan)
Increasing production facilities for camshafts and cast metals (Indonesia)
Planned Capital Investments |
(As of Mar. 31, 2018) |
| 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 | 2,500 |
| Kumagaya Plant | Kumagaya City, Saitama Pref. | Installing production facilities for making piston rings and auto parts | 1,683 |
| Riken Mexico, S.A. De C.V. | Aguascalientes, Mexico | Installing production facilities for making piston rings and auto parts | 1,508 |
| Riken Automobile Parts (Wuhan) Co., Ltd. | Wuhan, China | Installing production facilities for making piston rings and auto parts | 836 |
| P.T. Pakarti Riken Indonesia | Sidoarjo, Indonesia | Installing production facilities for making piston rings and auto parts | 1,159 |