Aichi Steel Corporation Business Report FY2008

Business Highlights

Financial Overview (in million JPY)
  FY2008 FY2007 Rate of
Change(%)
Factors
Overall
Sales 222,060 253,462 (12.4) -Demand from the automotive industry and other sectors for the Company's main products, which are steel and forged products, decreased
Operating
income
(482) 10,884 - -Even though the Company implemented business initiatives such as improving selling prices and reducing costs, its income still dropped due to increased material prices and decreased sales volume.
Ordinary
income
(1,804) 9,332 -
Net income (14,105) 5,692 -
By Segment
Steel 129,006 140,282 (8.0) -Income decreased due to decreased sales volume.
Forged products 85,895 104,323 (17.7)
Electromagnetic products 3,380 4,417 (23.5)


Electromagnetic Business
-The Company is aiming to make the electromagnetic business its core business segment.


Business Plan
-The Company announced that it will build a new plant to manufacture magnets and magnet particles for in-vehicle small motors on a land it has purchased in Seki city, Gifu prefecture. Construction work will start in March 2008, beginning operations in May 2009. The company will pay one billion yen for the first phase of the construction work. The new plant will produce two million pieces of "MAGFINE" per month, a neodymium-based anisotropic bond magnet. Production capacity at the existing plant in Aichi prefecture will reach its limit when it is coping with brisk sales including a new order from Robert Bosch of Germany. The new plant will be established on a land of 63,000 square meters that Aichi Steel already acquired in the Seki Techno Highland. Construction area for the first phase will be 4,000 square meters, which will be expanded in phases to deal with an expanding demand. (From an article in the Nikkan Jidosha Shimbun on Feb. 04, 2009)

R&D

R&D Expenditure (in million JPY)
  FY2008 FY2007 FY2006
Overall 2,828 2,001 2,446


R&D Structure

-The Company has about 190 employees engaged in R&D as of March 31, 2009.


R&D Activities of Each Business (FY2008)
Business Budjet
(in million JPY)
R&D activities
Steel 1,710 -Development of new special steel for automotive parts and a new manufacturing technique for producing stainless steel

FY2008 :
The Company's R&D activities in this sector included work on the following items:
-Steel materials that can be used to make high-strength connecting rods, which are useful for improving the fuel economy of vehicles
-Steel materials for producing smaller, longer life bearings
-Flat steel for producing suspension systems used on  trucks
-Chromium stainless steel that can be put to use in  new applications in the energy and environmental sectors
Forged products 100 -Development of forged products for automotive parts

FY2008 :
The Company's R&D activities in this sector included work on technology to improve the surfaces and lubricity of dies ; and technology to conduct automatic testing of forged and other parts.
Electro magnetic parts 1,018 -Development of Magneto-Impedance (MI) sensors, magnets for motors, dental magnetic attachments, heat releasers for automotive electronic equipment, and other products

FY2008 :
The Company's R&D activities in this sector included work on gyro sensors, looking into the level of sensitivity and functions of magnetic impedance sensors.

Investment Activities

Capital Expenditure (in million JPY)
  FY2008 FY2007 FY2006
Overall 14,467 13,165 28,359


Capital Investment by Business (FY2008)
Busienss Capital
investment
(in million JPY)
Objective
Steel 7,004 Investment was made to rationalize manufacturing facilities, update aging facilities, and improve functions.
Forged products 4,017 Investment was made to enhance production capacity; as well as made for other purposes.
Electro magnetic parts 3,129 Investment was made to enhance production capacity.


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. 29,887 Dec.
2006
Apr.
2011
*
Kariya Plant
(Kariya City, Aichi)
Steel Rolling equipment, etc. 246 Feb.
2007
Dec.
2009
*

Forging Plant
(Tokai City, Aichi)

Forged products Production facilities for forged products 1,453 June
2006
Mar.
2010
*
Higashiura Plant
(Chita Gun, Aichi)
Electro magnetic parts
Production facilities for products using magnets, etc. 294 Mar.
2006
Dec.
2010
*
Gifu Plant
(Kakamigahara City, Gifu)
Electro magnetic parts
Production facilities for electronic functional materials and components 127 Feb.
2008
Dec.
2009
*
Seki Plant
(Seki City, Gifu)
Electro magnetic parts
Production facilities for products using magnets, etc. 1,491 Dec.
2007
Apr.
2010
New facilities
*The production capacity upon completion is expected to be around the same level as what it was at the end of March 2009.