Aisan Industry Co., Ltd. Business Report FY ended Mar. 2013

Business Highlights

Financial Overview

(in millions of JPY)
  FY ended Mar. 31, 2013 FY ended Mar. 31, 2012 Rate of
Change (%)
Factors
Overall
Sales 170,298 149,892 13.6

-For the most part, vehicle production levels were strong worldwide, with the ASEAN Region market expanding and the North American market recovering, although sales in Japan dropped after the eco-car sales incentive program ended. In addition, auto demand in China fell.

Operating
income
7,986 5,477 45.8 -
Ordinary income 8,177 4,887 67.3 -
Net income (783) 1,811 - -The Company reported a net loss after recording an extraordinary loss for setting aside product-warranty reserves.

Major Capital Investments Outside Japan

- The Company and Chungcheongnam-do have signed an agreement that the Company would establish a new plant in Cheonan City. The company is going to invest USD 35 million in the new factory with a land area of 6,100 square meters. The facility is scheduled to be completed by the end of 2014, planning mass-production launch at the beginning of 2015. (From a press release, June 4, 2013)

- The Company is considering building new plants in Southeast Asia and North America. Demand in both regions is increasing, and the Company expects its plants in Indonesia and Kentucky in the U.S. to reach full-scale production in the mid- and long-term perspectives. Given this forecast, the Japanese supplier will draw a global production expansion plan as part of its mid-term business strategy through FY2015. In Southeast Asia, the company is intending to disperse production at various locations, while positioning its Indonesian plant as a main factory. It will conduct a feasibility study into the construction of new facilities in countries including Thailand, Vietnam, and Indonesia. In North America, the Company will work out the details to set up a new plant in either the U.S. or Mexico to respond to growing demand from Toyota and Nissan. (From an article in the Nikkan Jidosha Shimbun on Mar. 21, 2013)

New Hybrid Business Launch

- The Company is looking to tap into the hybrid parts business by fiscal year 2015. Having already engineered components around the motor and inverter through a joint development with its customer, the company is now preparing for new product releases. In order to secure contract awards, the company will step up activities to make proposals to automakers. The Company intends to produce the new hybrid components in Japan, most probably at its home plant in Obu, Aichi Prefecture. Meanwhile, a number of Toyota Group suppliers are accelerating development and sales of hybrid system parts, creating fierce competitions within the group. The Company is poised to establish a strong presence in the market by winning programs to supply major components. (From an article in the Nikkan Jidosha Shimbun on Mar. 6, 2013)

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

R&D

R&D Expenditure

(in millions of JPY)
  FY ended Mar. 31, 2013 FY ended Mar. 31, 2012 FY ended Mar. 31, 2011
Overall 8,482 7,375 7,308
*The above figures are all associated with automotive parts.

R&D Activities

The Company is further strengthening its R&D capabilities in the area of fuel efficiency and in products designed for emerging markets.

Main R&D Achievements in FY2012
-The Company conducted R&D activities aimed at expanding its product line-up for diesel engines and to augment its products designed for hybrid and electric vehicles. It began commercial production of an EGR valve for hybrid vehicles.
-The Company worked to advance the market penetration of LPG and CNG gas supply systems.

Investment Activities

Capital Expenditure

(in millions of JPY)
  FY ended Mar. 31, 2013 FY ended Mar. 31, 2012 FY ended Mar. 31, 2011
Overall 10,113 9,285 7,158

  Investment Targets Main products and investment amounts for FY ended Mar. 31, 2013
Japan -Strengthen the commercial appeal of its mainstream products and its system development capabilities, and develop future products for next-generation vehicles. 3 mainstream products (fuel-pump modules, throttle bodies, and canisters): 1,337 million yen;
Engine values and Injectors: 1,971 million yen
Asia -Increase production capacities in the U.S.A. and Indonesia, in enhancing its global supply network 3 mainstream products: 2,421 million yen
Europe 3 mainstream products: 493 million yen
North America 3 mainstream products: 855 million yen

Plans for New Facilities

Plant name
(Location)
Type of facility or project Planned amount of investment
(in million JPY)
Project period
From To
Headquarters Plant
(Aichi, Japan)
Facility manufacturing EGR valves 339 Dec.
2012
Mar.
2014
Facilities to manufacture plastic intake manifolds 158 Feb.
2013
Mar.
2014
Anjo Plant
(Aichi, Japan)
Facility manufacturing engine valves 448 Oct.
2012
Mar.
2014
Facility manufacturing throttle bodies 85 Apr.
2012
Mar.
2014
Facility manufacturing canister 57 Apr.
2012
Dec.
2013
Toyota Plant
(Aichi, Japan)

Facility manufacturing fuel pump modules

313 Aug.
2012
Mar.
2014

Facility manufacturing injectors

115 Aug.
2012
Sep.
2013
P.T. Aisan Nasmoco Industrial
(Indonesia)

Facility manufacturing fuel pump modules

712 Nov.
2012
Dec.
2013
Franklin Precision Industry, Inc.
(USA)

Facility manufacturing throttle bodies

594 Feb.
2012
Dec.
2013
Aisan Industry Czech s.r.o.
(Czech Republic)

Facility manufacturing throttle bodies

556 Jan.
2012
Dec.
2013