Ashimori Industry Co., Ltd. Business report FY2006

Business Highlights

Financial overview
In million JPY FY2006 FY2005 Rate of Change (%) Factors
Sales 43,204 38,178 13.2 -
Operating income 1,666 2,083 (20.0) Operating income decreased due to price hikes in materials and crude oil; and due to initial start-up costs connected with launching operations at Ashimori Technology (Wuxi) Co., Ltd., which is its subsidiary overseas in China. 
Current net income 491 1,108 (55.6) In addition to the factor mentioned above, the decrease stems from the fact that the Company posted a 1,250 million yen extraordinary loss, which was paid to settle the patent-infringement lawsuits filed against the Company. In spite of an extraordinary profit of 546 million yen, which was the proceeds from the sale of securities held for investment it was not enough to offset the amount of incurred losses. 
Industrial fabric product business
Sales 36,835 32,276 14.1 <Automotive products>
Seatbelts: Sales increased because mass-production of products the Company won new orders for started. These products were already being equipped on several models of vehicles.

Airbags: In the strong auto industry, sales grew due to the steady increase in sales of side collision air bags.

Automotive related products: Sales were practically level with those of the previous fiscal year.
Operating income 2,131 2,786 (23.5)

Dissolved joint venture
The Company announced that it will dissolve a seatbelt joint venture with Delphi Corp. of the U.S. Ashimori intends to transfer its shares in the joint venture plant in North America to Delphi. The Company and Delphi formed business alliances for seatbelts in 2000 and for airbag systems in 2001. As the plant mainly supplies to the U.S. Big Three automakers, whose orders have been low, the Company will dissolve the partnership so as to invest mainly in Asia, particularly in China, where the Company is expanding operations. (From a story in the Nikkan Jidosha Shimbun on Aug. 1 2006)

Challenges for FY2008
The Company started operations at Ashimori Technology (Wuxi) Co., Ltd., which was established in April 2006 in Jiangsu Wuxi, China. The new company is a  wholly owned manufacturing and sales subsidiary dealing in automotive safety components. The Company also started operations at the second plant of Ashimori (Thailand) Co. Ltd. in February, 2007. From now on, the Group (which includes the Company and its consolidated subsidiaries) will continue to improve and rationalize its management structure in terms of global operations.


R&D expenses for FY2006 were 928 million yen.
Out of the total amount, 710million yen was spent on R&D at its industrial fabric business.

Seatbelt related products:
- The Company is working on developing seat belt retractors with pretensioners that improve the initial restraint force; conducting basic research to stabilize the properties of load limiting devices; and developing buckles with G-proof mechanisms to be equipped as standard equipment.

Interior related products:
The Company focused on proposing new-concept child safety seats.

Airbag related products:
-The Company is in the process of developing passenger-side air bag systems, which can inflate at low-risk and are compliant with a new U.S. standard; high-performance side airbags; and knee airbag systems which protect legs.

- The Company is preparing to set up its production structure so as to be able to produce all of its products in China. It is committed to reducing the use of environmentally harmful products. 

Investment Activities

Capital investment in FY 2006 was 2,051 million yen.
Out of the total amount, the investment made for industrial fabric products was 1,638 million yen
Capital investment was mainly spent on the Osaka plant on revamping manufacturing of automotive related products, increasing production facilities and development related facilities.

Overseas investment
The Company will enhance its production capacity in Thailand. The newly established 2nd plant in the country will concentrate on the production of seat belts and airbag systems. Most part of airbag production currently conducted in Japan will be transferred to this new plant. In view of the brisk demand for airbag systems and seat belts due to an increase in vehicle production, the Company will utilize the new plant to mainly produce vehicle safety systems. Ashimori Thailand, the company's production site in Thailand, currently manufactures seat belts, airbag systems and tonneau covers. Full-scale production is set to get underway by January 2007, and the production capacity of airbags and seat belts will be doubled.(From a story in the Nikkan Jidosha Shimbun on Jul. 22 2006)

New facilities
Segment by business type Purpose Planned investment
(in million yen)
Starting Month Completing Month Capacity increase on completion
Osaka Plant (Settsu City, Osaka, Japan)
Fire extinguisher fabric products business

Industrial fabric products business
To rationalize production facilities for fire extinguisher fabric, paltem, industrial fabric and automotive safety equipment 2,754 April, 2006 March, 2008 Practically none as this is to improve quality
Ashimori (Thailand) Co., Ltd. (Chachoengsao, Thailand)
Industrial fabric products business To construct the second plant building 305 June, 2006 April, 2007 -