Aichi Steel Corporation Business Report FY2007
Business Highlights
| (in million JPY) | FY2007 | FY2006 | Rate of Change(%) |
Factors |
| Overall | ||||
| Sales | 253,462 | 235,637 | 7.6 | Sales increased year-on-year, reflecting the benefits resulting from the Company's initiatives to establish an optimized production structure, improve profitability, and reduce initial costs. |
| Operating income |
10,884 | 10,610 | 2.6 | Profit increased year-on-year, thanks to sales price improvements, initial cost reductions, and increased profits at its subsidiaries overseas, despite the soaring prices of raw materials. |
| Ordinary income |
9,332 | 10,109 | (7.7) | Ordinary income decreased due to the sudden appreciation of the yen against the dollar; which resulted in a non-operating loss. |
| Net income | 5,692 | 4,922 | 15.7 | - |
| By segment | ||||
| Steel | 140,282 | 128,078 | 9.5 | Sales at the steel segment rose due to increased sales volume and improved sales prices. |
| Forged products | 104,323 | 100,163 | 4.2 | The forged products division worked on optimizing its production structure and improving sales prices. As a result, sales at the segment increased year-on-year. |
| Electromagnetic products | 4,417 | 2,975 | 48.5 | Sales at the electromagnetic products division rose due to the increased sales volume of the Company's neodymium-based bonded magnet called the Magfine. |
Electromagnetic business
The Company is aiming to make the electromagnetic business its core business segment.
-Establishing a new plant
Japan
The Company will construct a new plant to
manufacture magnetic particles and magnets. The new plant will serve as
a hub for the Company's electromagnetic products business. Construction
will start in March 2008 and the new plant will start operating in May
2009.
>>> See Investment for more details
Czech Republic
The Company established Aichi Magfine Czech s.r.o. in September 2007.
The new company was capitalized at about 300 million yen as a joint venture
among the Company's wholly owned subsidiary, Aichi Europe GmbH (AE); Toyota
Tsusho Corporation; and Toyota Tsusho Europe S.A. (TTESA). The three companies'
shareholdings are 65%, 30%, and 5%, respectively. The new subsidiary produces
magnets for small and light motors.
In February 2008 Aichi Magfine Czech s.r.o.
started production of a neodymium-base bonded magnet called the Magfine,
supplying it to Robert Bosch GmbH.
>>> See Investment for more details
-Business plan
The Company will expand sales of Magfine, a neodymium-based bonded magnet that contributes to reduce the weight and size of a motor installed on the vehicle. It is developing magnet products as its new business, aiming to achieve sales of 50 billion yen in FY2010, more than ten times the expected sales for the current fiscal year. (From an article in the Nikkan Jidosha Shimbun on Jul. 11, 2007)
R&D
The Company has about 190 employees engaged in R&D as of March 31, 2008.
R&D Expenditure
| (in million JPY) | FY2007 | FY2006 | FY2005 |
| Overall | 2,001 | 2,446 | 2,456 |
R&D activities of each business (FY2007)
| Business | Budjet (in million JPY) |
R&D activities |
| Steel | 792 | -Development of new special steel for automotive parts and a new manufacturing technique for producing stainless steel. -The Company developed and commercialized chromium stainless steel which prolongs the life of engineered steel structures. |
| Forged products | 100 | -Development of forged products for automotive parts. The Company developed elemental technology such as that used to reinforce die parts and lubricate dies. |
| Electro magnetic parts | 1,108 | -Development of Magneto-Impedance (MI)
sensors, magnets for motors, dental magnetic attachments, heat releasers
for automotive electronic equipment, and other products. -The Company improved the sensitivity and performance of MI sensors, as well as developed heat-resistant magnets for motors. |
Investment Activities
| (in million JPY) | FY2007 | FY2006 | FY2005 |
| Overall | 13,165 | 28,359 | 21,373 |
Capital investment by business (FY2007)
| Busienss | Capital investment (in million JPY) |
Objective |
| Steel | 6,289 | Investment was made to rationalize manufacturing facilities, update aging facilities, and improve functions. |
| Forged products | 5,432 | Investment was made to enhance production capacity; as well as made for other purposes. |
| Electro magnetic parts | 1,239 | Investment was made to enhance production capacity; as well as made for other purposes. |
Domestic investment activities
The Company will construct a new plant in
Seki City, Gifu Prefecture to manufacture magnetic particles and magnets.
This new facility will become a hub for the Company's electromagnetic
products. Demand for the Company's proprietary neodymium-based anisotropic
bonded magnet, the Magfine, is expected to increase, the Company's existing
Chita Plant and Higashiura plant, however, do not have enough production
capacity to satisfy this expected demand, so the Company needed to add
this new plant. (The Magfine magnet is used in small, automotive motors.)
The new Seki Plant, which will start operations in May 2009, will have
the production capacity to produce 2 million units per month in the first
year of operation. The Company will invest about 1 billion yen in the
first stage and gradually increase the production capacity to keep up
with growing demand. By using Magfine magnets, small automotive motors
can be made 50% smaller and 40% lighter compared to motors using existing
ferrite magnets. (From press release on January 31, 2008)
Overseas investment
-Czech Republic
Aichi Magfine Czech s.r.o. will start production
of Magfine magnets in February 2008. Magfine magnets are neodymium-based
anisotropic bonded magnets. It will supply these magnets to Robert Bosch
GmbH. Aichi Magfine Czech plans to launch a production line that has the
capacity to produce 200,000 units a month initially. The Company furthermore
will increase the capacity to more than 2 million units per month by 2010.
Since demand for these small, light-weight Magfine motors is expected
to be more than 5 million units per month in 2010 collectively at home
and abroad. Aichi Magfine Czech aims to enhance its production capacity
to meet the demand. (From press release on December 13, 2007)
New equipment installation
| Name (Location) |
Type of business |
Type of facility |
Planned investment (million JPY ) |
Start | Completion | Production capacity upon completion |
| Chita Plant (Tokai City, Aichi) |
Steel etc. | Production facilities for steel, rolling equipment, etc. | 7,795 | Feb. 2006 |
Mar. 2010 |
* |
| Kariya Plant (Kariya City, Aichi) |
Steel | Rolling equipment, etc. | 900 | July 2006 |
Oct. 2008 |
* |
Forging Plant |
Forged products | Production facilities for forged products | 3,033 | Mar. 2006 |
June 2010 |
* |
| Higashiura Plant (Chita Gun, Aichi) |
Electro magnetic parts |
Production facilities for products using magnets, etc. | 638 | Mar. 2006 |
Dec. 2010 |
* |
| Gifu Plant (Kakamigahara City, Gifu) |
Electro magnetic parts |
Production facilities for electronic functional materials and components | 152 | Sep. 2007 |
Aug. 2008 |
* |
| Seki Plant (Seki City, Gifu) |
Electro magnetic parts |
Production facilities for products using magnets, etc. | 4,794 | Dec. 2005 |
June 2009 |
New facilities |