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  5. Aichi Steel Corporation Business Report FY ended Mar. 2018

Aichi Steel 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
(%)		 Remarks
Overall
Sales 236,237 212,837 11.0 -
Operating
income		 11,813 7,218 63.7 -Company-wide, operating income increased year over year, thanks to higher sales volumes and higher product-selling prices, despite higher procurement costs for raw materials and energy.
Ordinary
income		 11,774 6,863 71.6 -
Net income attributable to owners of the parent 8,182 5,064 60.9 -


Investment

-The Company announced that it would invest in Advanced Smart Mobility Co., Ltd., which is a venture company developing self-driving technology and working on numerous joint validation projects. The Company is investing JPY 300 million.

Award

-In May 2018 at the International Stainless Steel Forum (ISSF) held in Shanghai, China, -the Company’s steel used in high-pressure hydrogen won the bronze medal for the Best New Technology Award. In 2014, the Company developed the AUS316L-H2, a stainless steel for high-pressure hydrogen. It is being used in hydrogen filling ports on the Toyota Mirai fuel-cell vehicle. This product was given high recognition for its ability to enhance the safety and reliability of fuel-cell vehicles.

R&D Expenditure

(in million JPY)
FY ended Mar. 31, 2018 FY ended Mar. 31, 2017 FY ended Mar. 31, 2016
Steel 2,560 2,255 2,154
Forged products 36 38 57
Electromagnetic products 1,179 1,010 1,071
Total 3,777 3,304 3,282

R&D Structure

-The Company has about 250 employees engaged in R&D as of March 31, 2018.

R&D Activities

Delivering magnetic marker systems for validating and testing self-driving technology

-A magnetic marker systems is a type of technology that enables self-driving buses to run by detecting magnets embedded in road surfaces. MI sensors, which are ultra-high-sensitive sensors, detect the vehicle’s location with precise accuracy. The Company plans to commercialize them in 2020.

＜Major deliveries＞

-On February 10, 2018, it was announced that the Company will deliver magnetic markers to one of the initiatives for validating and testing self-driving technology being conducted by the Land, Infrastructure and Transport Ministry at the Southern Alps Hase Michi No Eki (road station), a validation and testing facility. This is the first Level 4 testing and validating (which includes vehicle travel) being conducted in the country.

-In December 2017, it was announced that the Company will deliver magnetic markers for testing and validation being conducted on a service using self-driving buses in Hokkaido and Okinawa. Detecting the performance of “accurate surface contact control” will be done to accurately measure the side-to-side performance of magnetic markers in snow and at bus stops.

-The Company is delivering magnetic markers to the Land, Infrastructure and Transport Ministry’s testing and validation of self-driving technology being conducted from the 11th to 17th of November 2017 in Shiga Prefecture.

Product Development

-The Company announced in April 2017 that together with NHK Spring Company it is jointly developing steel for use in light-weight leaf springs used in suspensions for trucks. By revising the design composition and creating heat treatment it achieved higher strength and higher stickiness. The Company is developing materials, up to manufacturing and rolling steel, while NHK Spring does the machining for commercial vehicles. its Chita Plant in Tokai, Aichi Prefecture launched production.

Capital Expenditure

 (in million JPY)
FY ended Mar. 31, 2018 FY ended Mar. 31, 2017 FY ended Mar. 31, 2016
Steel 9,952 11,250 8,942
Forged products 6,529 8,739 4,752
Electromagnetic products 2,458 818 1,194
Others 81 24 520
Total 19,020 20,831 15,408

Investments Japan

-In January 2018, the Company decided to build a hot-rolling mill line at its forging plant in Tokai, Aichi Prefecture to produce differential ring gears. It conducted a ground-breaking ceremony. The Company is investing JPY 1.8 billion, forecasting growing demand for next-generation vehicles. The new line will be one of the fastest production lines in Japan. The new production line is scheduled to start operating in March 2019, with the capacity to produce 180,000 units a month.

-In July 2017, the Company announced that it would build a servo press line at its test plant in Tokai, Aichi Prefecture to develop new types of forged parts for electric vehicles.

-In June 2017, the Company announced that it will increase the production capacity of heat-radiating parts for eco-friendly vehicles. The Company will invest JPY 3.0 billion for a plant building and equipment. The Company will build a new production- building at the plant in Kakamigahara, Gifu Prefecture. As a result, its production structure will consist of two plants, one in Gifu and one in Chita. The new line is scheduled to launch operations in October 2018.

Planned Capital Investment

(As of Mar. 31, 2018)
Name
(Location)		 Type of
business		 Type of
facility		 Planned investment
(in million
JPY)		 Start Completion Production capacity upon completion
Chita Plant
(Aichi Pref., Japan)		 Steel etc. Facilities for producing steel, rolling equipment, etc. 14,650 Jul.
2016		 Mar.
2022		 *
Kariya Plant
(Aichi Pref., Japan)		 Steel Rolling equipment, etc. 799 Oct.
2015		 Aug.
2020		 *

Forging Plant
(Aichi Pref., Japan)

 Forged products Facilities for producing forged products 9,345 Dec.
2013		 Mar.
2022		 *

Higashiura Plant
(Aichi Pref., Japan)

 Electro magnetic products, etc. Facilities for producing magnet applied products, etc. 39 Feb.
2018		 Dec.
2018		 *
Gifu Plant
(Gifu Pref., Japan)		 Electro magnetic products, etc. Facilities for producing electronic functional materials and components, etc. 1,925 May
2017		 Mar.
2024		 *
Electronic Components Plant
(Aichi Pref., Japan)		 Electro magnetic products Facilities for producing electronic functional materials and components
 150 Oct.
2017		 Sep.
2019		 *

*The production capacity upon completion is expected to be around the same level as what it was at the end of March 2018.