Mitsuboshi Belting Ltd. Business Report FY2007

Business Highlights

Financial overview (in millions of JPY)
  FY2007 FY2006 Rate of Change (%) Factors
Overall
Sales 58,221 72,090 (19.2) -Sales decreased because the Company transferred its chemical products business to IAC.
Operating
income
3,891 4,813 (19.1) -
Ordinary
income
3,192 5,884 (45.8) -
Net
income
1,412 3,777 (62.6) -
Belt Division
Sales 49,824 49,120 1.4

-Sales increased due to increased sales of automotive belts as a result of enhanced production capacity at overseas plants , additional overall sales and marketing deployment. This increase was also attributed to sales of auto tensioners and repair parts.

Operating
income
6,345 6,886 (7.8) -


Improving and expanding production infrastructure
-In Oct. 2007, the Company announced completion of all the buildings of Ayabe Production System Development Center, constructed at the site of its Ayabe Office, Kyoto Prefecture, Japan.

-The Company unveiled a plan to renovate its Shikoku plant in Sanuki city, Kagawa pref. starting March 2008 as part of its reinforcement and improvement programs in manufacturing facilities.

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Business restructuring

-USA
The Company will dissolve its wholly-owned subsidiary, Mitsuboshi Chem. Corporation, in the U.S. Mitsuboshi Chem. was established in Ottawa, Illinois, in 2001 to produce and sell urethane resin driving belts. With the winding-up of the subsidiary, the Company will shift the production to its manufacturing facilities in other areas. (From an article in the Nikkan Jidosha Shimbun on Dec. 19, 2007)

-China
The Company will dissolve Tianjin Mitsuboshi Belting Co., Ltd., its manufacturing and sales subsidiary of belts in China, to reorganize its global production structure. Tianjin Mitsuboshi Belting was established in 1998 at 500 million yen, with the Company holding a 62.5% share while MBL (USA) Corporation, its U.S. subsidiary, funding the remaining 37.5%. (From an article in the Nikkan Jidosha Shimbun on Mar. 26, 2008)

R&D

R&D Structure
-R&D is conducted through cooperation among the R&D Department, engineering departments of other divisions, as well as development departments in subsidiaries.    

-R&D is conducted also through closely cooperating with universities and research institutes and through jointly developing products with other companies, especially on advanced technologies.


R&D Expenditure (in millions of JPY)
  FY2007 FY2006 FY2005
Overall 2,211 2,731 2,740

Belt Business

1,465 1,572 1,348


R&D achievements in the belt business (FY2007)
-Auto pretensioners developed by the Company are used in a growing number of car models.

-Ribbed belts designed to reduce noise were developed based on sophisticated materials and enhanced structural designing.

-High rigidity timing belt series corresponding to high load and accuracy in determining position.

-Rubber back ribbed belts that create more freedom of design in the engine.

-Environmentally friendly timing belts which contain the least amount possible of environmentally controlled substances.

-Environmentally friendly flat belts.

Investment Activities

Capital investment (in millions of JPY)
  FY2007 FY2006 FY2005
Overall 2,996 5,524 5,988

Belt Business

2,671 4,738 3,679


Capital investments in the belt business (FY2007)
-The Company invested 358 million yen in a building and experiment and research facilities at Ayabe Plant.

-The Company invested 526 million yen in belt production facilities and forging facilities at Shikoku Plant.

-The Company invested 635 million yen in enhancing belt production facilities at overseas plants.

-The Company announced completion of all the buildings of Ayabe Production System Development Center, constructed at the site of its Ayabe Office, Ayabe City, Kyoto Prefecture, Japan. It will be a model factory for integrated manufacturing of rubber products from material pre-treatment through completed products, where high quality products are expected to be supplied from. The center will also promote transfer of production systems developed here to the Group's plants overseas. The Ayabe Office opened in 1999 for R&D of next-generation production systems, where rubber refining facilities were installed in 2002. In 2005, the site was expanded to 150,00 sq.m. for additional buildings and construction started. A total of 10 buildings have been completed including expanded facilities, and five new buildings of factories and test facilities for quality assurance. (From an article in the Nikkan Jidosha Shimbun on Nov. 6, 2007)

-The Company announced that the Group has increased by 30 percent its capacity to supply belt cords, major belt materials, in order to meet growing demand for transmission belts. This was made possible by expanding the facility at Mitsuboshi Cord Co., Ltd. that has a fully integrated manufacturing structure for cords consisting of materials twisting process up to chemical treatment. This project added 500 square meters of floor area and new production equipment at the Company's wholly owned subsidiary in Takashima City, Shiga Prefecture. The Group, which invested a total of some 200 million yen in the expansion, will further improve its integrated belt production system from raw materials to finished products. (From an article in the Nikkan Jidosha Shimbun on Nov. 29, 2007)

-The Company unveiled a plan to renovate its Shikoku plant in Sanuki city, Kagawa pref. starting March 2008 as part of its reinforcement and improvement programs in manufacturing facilities. It will spend about five billion yen on expanding and improving the factory building for the three years through 2010, while renewing manufacturing equipment to boost production capacity of V-belts and timing belts by 30%. The new production equipment to be introduced includes the state-of-the art machine that was developed and tested at its Ayabe Production System Development Center completed in November 2007. Solar power generation system will be installed on the roofs of the buildings, to save energy and respond to emergencies such as natural disasters. (From an article in the Nikkan Jidosha Shimbun on Mar. 7, 2008)


New facilities (excerpt)
Company/
Facility
(Location)
Business
Segment
Objective or equipment to be installed Planned amount of investment (in million JPY) Start Planned
completion
Mitsuboshi Belting Ltd.
Kobe Head Office
(Hyogo, Japan)
Company-wide Improving experimental and research facilities 93 Feb.
2008
Dec.
2008
Mitsuboshi Belting Ltd.
Nagoya Plant
(Aichi, Japan)
Belt Improving equipment to manufacture belts 105 Dec.
2007
Dec.
2008
Belt Improving equipment to manufacture belts 60 Apr.
2008
Dec.
2008
Mitsuboshi Belting Ltd.
Shikoku Plant
(Kagawa, Japan)
Belt Improving equipment to manufacture belts 390 Jun.
2008
Jun.
2009
Belt Improving plant environment 490 Mar.
2008
Oct.
2008
Belt Improving plant environment 165 Jun.
2008
Jun.
2009
Mitsuboshi Belting Ltd.
Ayabe Plant
(Kyoto, Japan)
Belt Developing production systems to produce driving belts  150 Apr.
2007
Sep.
2008
Belt Developing production systems to produce driving belts  100 Sep.
2008
May
2009
Belt Developing production systems to produce driving belts  400 Mar.
2008
Sep.
2009
Belt Improving testing equipment  99 Mar.
2008
Sep.
2008
Mitsuboshi Belting Kohki Co., Ltd.
Head Office Plant
(Hyogo, Japan)
Belt Pulley processing equipment 58 Feb.
2008
Oct.
2008
MBL (USA) Corp.
Head Office Plant
(Illinois, USA)
Belt Improving equipment to manufacture belts 500 Jun.
2008
Mar.
2009
Belt Improving and revamping refining equipment  403 Nov.
2007
Dec.
2008

Stars Technologies Industrial Limited
Head Office Plant
(Thailand)

Belt Improving equipment to manufacture belts 304 Nov.
2007
Jul.
2008
Belt Improving and revamping refining equipment  160 Apr.
2008
Dec.
2008
Note: No significant increase is expected in terms of production capacity.