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Riken Corporation Business Report FY ended Mar. 2019

Financial Overview

 (in million JPY)
FY ended Mar. 31, 2019 FY ended Mar. 31, 2018 Rate of Change (%) Factors
Overall
Sales 90,366 87,583 3.2 -Sales increased because of effective sales promotions conducted outside Japan.
Operating income 6,924 7,441 (6.9) -Operating income fell because of worsening profitability of the casting business due to sharp price hikes in raw materials, and because of rising production costs due to increased expenses for labor, depreciation, and other expenses at an affiliated company outside of Japan.
Ordinary income 7,860 8,379 (6.2)
Profit for the year attributable to owners of the parent  4,979 4,386 13.5 -Profit increased because impairment losses decreased.

Recent Business Developments

-Main Japanese piston ring makers have been increasing the intake of orders for applications other than automotive engines. These makers have been accelerating the development of new products and businesses by applying existing technologies and through open innovation. Nippon Piston Ring Co., Ltd. is strengthening its non-engine parts lineup by utilizing its Metamold metal injection molding method. The company decided to mass produce ball screw parts for automotive electric power steering (EPS) systems, and is also utilizing the Metamold for machine tools and industrial robots. TPR Co., Ltd. will jointly start mass production of aqueous binders for nickel secondary battery positive electrode material with a venture company. The company intends to supply the products to automakers around the world and battery makers. Riken Corporation has been developing new products for accelerating automotive electrification. The company has started offering samples of its noise-control sheet that reduces gigahertz electromagnetic waves. It has also developed a material that improves millimeter-wave radar signal/noise ratios, and a material that controls cable conduction noise. (From an article in the Nikkan Jidosha Shimbun on June 19, 2019)

　

Management Plan

Goals set in "Plan 2020" for the period to FY 2020 are:

  • Sales exceeding JPY 140 billion
  • Consolidated operating profit ratio exceeding 10%

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

R&D Expenditure

 (in million JPY)
  FY ended Mar. 31, 2019 FY ended Mar. 31, 2018 FY ended Mar. 31, 2017
Overall 1,841 1,567 1,597
-Automotive and Industrial Machinery Parts 1,704 1,502 1,539

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

Other
1. Development of low-friction and light-weight parts for electric vehicles
2. Development of radio-wave-absorption sheets for millimeter-wave radar
3. Development of heating element for high-heat use, which offers excellent performance in terms of durability

 

Technology licensing-out Agreement

 (As of Mar. 31, 2019)
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 Jun. 1, 2016 5 years
Shriram Pistons & Rings Ltd. India Manufacturing methods for piston rings Mar. 1, 2014 7 years
Grede Holdings LLC U.S. Manufacturing methods for cast products Jan. 7, 2019
 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 Until Aug. 31, 2023
Manufacturing methods for seal rings Jul. 1, 2014 Until Aug. 31, 2023
Manufacturing methods for piston rings Sep. 1, 2015 Until Aug. 31, 2023

Capital Expenditure

 (in million JPY)
  FY ended Mar. 31, 2019 FY ended Mar. 31, 2018 FY ended Mar. 31, 2017
Automotive and Industrial Machinery Parts 7,181 7,158 5,756


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, 2019)
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 1,815
Kumagaya Plant Kumagaya City, Saitama Pref. Installing production facilities for making auto parts 1,133
P.T. Pakarti Riken Indonesia Sidoarjo, Indonesia Installing production facilities for making auto parts 683