Ichikoh Industries, Ltd. Business report FY2008
|Financial Overview||(in millions of JPY)|
|Sales||102,000||121,143||(15.8)||-The significant decrease in auto production caused sales to drop.|
Recent Developments Outside Japan
-The Company announced that it established a new company in Bangkok, called Ichikoh Thailand, which is to be in charge of design, development and marketing of automotive lamps in the country. The new company started operations in October. This subsidiary is 100% funded by the Company, being capitalized at 60 million baht. This will be the Company's third production facility in the ASEAN region, following those in Indonesia and Malaysia. (From an article in the Nikkan Jidosha Shimbun on Sep.17, 2008)
Business Partnership with Valeo
-The Company announced that it and Valeo of France, its largest shareholder, will form a business alliance in the area of mirrors, which forms the Company's second largest business unit after that of lamps. Valeo does not directly engage in mirrors themselves but has fundamental technology on them, which will add value to mirrors sold in products such as in-vehicle CCD cameras and image analysis systems. This alliance with Valeo will enable the Company to expand its mirror business. (From an article in the Nikkan Jidosha Shimbun on Nov. 19, 2008)
Financial Forecast for the Fiscal Year Ending in March 2010
-The Company announced that it will move its Isehara Manufacturing Plant, which is the largest headlamp production facility in Japan, to a new location by 2011. The current facility, which includes a technical center on the premises, is located in Isehara City, Kanagawa Prefecture. The plant is the oldest among its existing facilities in Japan. As it does not have extra space for retooling and installing new equipment, the Company decided it was necessary to transfer the entire operations to a larger site. The total expenses for constructing new facilities, including land acquisition costs, are expected to reach around 20 billion yen. The Company aims to complete the new plant by the end of fiscal year 2010 and move all production lines there by the end of 2011. This construction project is the first time in 37 years for the Company to build a new plant in Japan. (From an article in the Nikkan Jidosha Shimbun on Oct. 30, 2008)
-The Company will build a new plant in China by the end of 2009 to manufacture molds for automotive lamps and other products. It will invest a total of approximately five billion yen. Full commercial operations are scheduled to start in 2010. In addition to the Company's supplying products from this new plant to its other facility in China, as well as to Valeo S.A. (based in France), with which its has a commercial alliance, the Company will also conduct sales activities of the molds to local Chinese suppliers. The Company has not selected the site where it will build the facility, however there are a few locations that are possibilities. One is Guangzhou, where it has a joint venture with Valeo named Foshan Ichikoh Valeo Auto Lighting Systems Co., Ltd. (FIV, Foshan City), which produces lamps. Another possible location is Wuxi City, where both the Company and Valeo have production facilities. Plus there are other close by locations that are also considered as possible sites. By manufacturing molds in-house, the Company will raise the volume of production it does on its own, and thereby shorten lead time in product development and reduce costs. (From an article in the Nikkan Jidosha Shimbun on Nov. 21, 2008)
-The Company plans to increase the percentage of products it procures from lower cost countries to 70 percent by 2012. In addition to finding new suppliers in China and Indonesia, where the Company operates its own facilities, the Company will work on developing new procurement sources near locations in countries where Valeo operates its plants. Valeo, which is based in France, is its largest shareholder and a business partner. The lower rate of vehicle production in major automotive markets including Japan, the U.S., and Europe has severely impacted the Group's sales. Nevertheless, the Company will work on becoming more cost competitive by procuring more goods from countries, which offer improved cost efficiencies. The ratio of goods that the Company procures locally for lamps and other products made in Indonesia, Malaysia, China stood at 12 to 13 percent on an average over the four year period from 2004 through 2007. (From an article in the Nikkan Jidosha Shimbun on Dec. 1, 2008)
-On March 9, the Company announced various initiatives that it will undertake to enhance its profitability. These include consolidating more of its production operations and setting up an early-retirement plan. The Company has decided to shut down two of its facilities in Japan. It will cease operations at its Nakatsugawa Plant in Gifu Prefecture at the end of September 2009; and at its Isehara Plant in Kanagawa Prefecture at the end of February 2010. The Company also hopes to reduce 730 positions by offering an early retirement package and other initiatives. Meanwhile, two new factories will be set up at two of the Company's existing plants; a headlamp factory at its subsidiary in Kyushu; and a headlamp lens plant at its Oizumi Plant in Gunma Prefecture. The Company expects that streamlining its production framework and reducing labor costs will speed up its ongoing activities being conducted under the banner of its Asia Global strategy. In line with these reorganization initiatives, the Company will consolidate production of rear combination lamps into its Fujioka Plant in Gunma Prefecture, which will be capable of producing 300,000 units a month. The monthly production capacity at the new headlamp factory in Kyushu will reach around 140,000 units and that of the headlamp lens plant in Gunma about 100,000 units. (From an article in the Nikkan Jidosha Shimbun on Mar. 10, 2009)
|R&D Expenditure||(in millions of JPY)|
|R&D||Development of advanced technologies|
|Design HQ||Development of technologies that enable new products and value to be created|
|Production Engineering||Development of products that reach commercialization|
-The Company has its Technical Center in its Isehara Plant.
Lighting equipment and signals
1) Highly functional automotive lighting equipment suited to meet car designs.
2) Research on situation-sensitive light distribution properties and evaluation systems.
Ichikoh light distribution simulation system
3) Development of high-definition automotive signals.
4) Development of new light sources.
1) Development of nescience prevention mirror system.
2) Development of view-related systems, utilizing functional thin membranes, electronics, etc.
3) Development of car control systems and control devices.
4) Development of vehicle perimeter sensing and security devices.
1) Development of display devices using new light sources such as LED.
2) Development of multiple transmission systems for motor vehicles
3) Development of mechatronics devices utilizing membrane/precision molding technologies.
-The Company has developed a new adaptive front-lighting system (AFS), which reduces driver fatigue and prevents dazzle, by using light-emitting diode (LED) technology. AFSs are expected to come into widespread use as one of the next-generation automotive safety systems. The Company's new AFS uses a pair of LED units installed in each of the vehicle's headlamps. The AFS controls the lighting angle of each of the LEDs independently, focusing the lights under normal driving conditions to improve long-distance visibility. In addition, its antidazzle technology offers fine-tuned control by turning off and on the lights instantaneously when necessary. The Company aims to meet new needs and requirements with this intelligent AFS system, which leverages the advantages inherent in LED technology such as a high level of visibility and a quick response time. (From an article in the Nikkan Jidosha Shimbun on May 24, 2008)
Major Technical Assistance Agreements (As of Mar. 2009)
|Company Name||Country||Technology||Coverage||Contract Period|
|Anpas Industries||Thailand||Manufacturing technologies for automotive lamps and rear view mirrors||Licensing of patents and expertise||Apr. 15, 1997||April 14, 2008 (yearly automatic renewal from then on)|
|Tokyo Electrica de Mexico||Mexico||Manufacturing technologies for automotive lamps and rear view mirrors||Licensing of patents and expertise||Nov. 21, 1997||Until sales of products are ended|
|FIEM Industries||India||Manufacturing technologies for rear view mirrors||Licensing of expertise||Nov. 11, 2005||Nov. 10, 2010 (yearly automatic renewal from then on)|
|Valeo Sylvania L.L.C.||U.S.A.||Manufacturing technologies for automotive lamps||Licensing of patents and expertise||Feb. 18, 2008||Until sales of products are ended|
|Foshan Ichikoh Valeo Auto Lighting Systems Co., Ltd.||China||Manufacturing technologies for automotive lamps||Licensing of patents and expertise||Mar. 24, 2001||5 years from Mar. 24, 2006 (renewal every three years)|
|Capital Investment||(in millions of JPY)|
-The Company invested in the facilities and automation equipment at its automotive parts production and sales division in order to produce new and upgraded products.
|Plant||Location||Segment (business division)||Estimated amount of investment (million yen)|
|Isehara Plant||Kanagawa Pref., Japan||Manufacturing and sale of automotive parts||529|
|Mirror Plant||Gunma Pref., Japan||Manufacturing and sale of automotive parts||1,868|
|Fujioka Plant||Gunma Pref., Japan||Manufacturing and sale of automotive parts||73|
New Equipment Installment (As of Mar. 2009)
|Plant||Location||Estimated amount of investment (million yen)||Project Period||Percentage of capacity increase (%)|
|Isehara Plant||Kanagawa Pref., Japan||2,514||Apr. 2009||May, 2010||minor|
|Mirror Plant||Gunma Pref., Japan||184||Apr. 2009||Mar. 2010||minor|
|Fujioka Plant||Gunma Pref., Japan||86||Apr. 2009||Mar. 2010||minor|