Koito Manufacturing Co., Ltd. Business Report FY2009

Business Highlights

Financial Overview

(in millions of JPY)
  FY2009 FY2008 Rate of
Change (%)
Factors
Overall
Sales 408,430 400,232 2.0 -
Operating income 36,054 9,131 294.9 -
Ordinary income 35,983 9,275 288.0 -
Current net income 6,217 4,042 53.8 -
Automotive Lighting-related
Sales 440,757 413,735 6.5 -Amid a decline in automobile production in global markets, mainly in Japan, North America and Europe, an increase in demand for environmentally friendly vehicles like hybrids propped up sales. 
Operating income 31,015 6,524 375.4 -

Recent Developments in Japan

-The Company said that operations at the No. 2 Koito Kyushu Plant in Saga, which have been suspended since this spring, will be resumed from Aug. Although the No.2 plant started operations in Sep. 2008, the plummeting production volume due to downturns in the global market that originated in the U.S. has forced the plant to be idled and its production line has been moved to the No.1 Plant since Mar. 2009. The resumption was decided given an increasing trend in automobile production in the Kyushu area.(From an article in the Nikkan Jidosha Shimbun on July 30, 2009)

>>>Financial Forecast for the Next Fiscal Year(Sales, Operating Income etc.)

R&D

R&D Expenditure

(in millions of JPY)
  FY2009 FY2008 FY2007
Overall 17,300 18,800 20,889
Automotive business 16,600 17,500 19,750

R&D Structure

Automotive lighting related business
-Research and development activities are performed globally at the Company's four principle R&D facilities: the production engineering division and research laboratory of Koito Manufacturing which plays a central role of these activities, the Technical center of North America Lighting Inc. in the United States, Koito Europe NV technical section in Belgium, and the Technical center of Shanghai Koito Automotive Light, Inc. in China.

-The number of R&D staff in the entire Group is 2,124.

-The Company has begun to consider construction of a new technical center for comprehensive research and development activities in Guangzhou, China by the end of Mar. 2012. The Company, which already has the Shanghai Technical Center and is advancing localization of R&D activities in China, has determined it necessary to set up a second technical center in China dedicated to the China South and its vicinity, where five Japanese automakers are located. If a facility is constructed, it will be the Company's 5th technical center, following those in Japan, the U.S., Europe and Shanghai. (From an article in the Nikkan Jidosha Shimbun on Sep. 9, 2009)

R&D Activities

Automotive lighting-related business
1. Development of core automotive lighting technologies such as optical technology, electronics, and mechanism.
2. Development of manufacturing technology
3. Development of simulation technologies, etc.

Licensing of Technology from Other Companies

(As of Mar. 31, 2010)

Company Products Associates Contract Period
Electro Optica, S.A. de C.V
(Mexico)
Automotive Lighting and Accessories Provide technological information, sales and manufacturing license 19 years from
Apr. 18, 1992
Industrias Arteb S.A
(Brazil)
Automotive Lighting and Accessories Provide technological information, sales and manufacturing license 5 years from
Jun. 8, 2006
Farba Otomotiv Aydinlatma ve Plastik Fabrikalari A.S.
(Turkey)
Automotive Lighting and Accessories Provide technological information, sales and manufacturing license 15 years from
Oct. 24, 1997
Automotive Lighting UK Ltd.
(UK)
Automotive Lighting and Accessories Provide technological information, sales and manufacturing license 18 years from
Feb. 24, 1993
Hella Australia Pty Ltd.
(Australia)
Automotive Lighting and Accessories Provide technological information, sales and manufacturing license 20 years from
May 1, 1994
Lumotech (Pty.) Ltd.
(South Africa)
Automotive Lighting and Accessories Provide technological information, sales and manufacturing license 5 years from
May 4, 2006
EP Polymers (M) Sdn. Bhd.
(Malaysia)
Automotive Lighting and Accessories Provide technological information, sales and manufacturing license 20 years from
Apr. 29, 1995
AuVitronics Ltd.
(Pakistan)
Automotive Lighting and Accessories Provide technological information, sales and manufacturing license 10 years from
Mar. 7, 1995

Investment Activities

Capital Expenditure

(in millions of JPY)
  FY2009 FY2008 FY2007
Overall 15,700 31,100 27,677
Automotive business 14,500 29,200 26,295

-The Company made investments in equipment for new products, model changes, productivity and quality improvement, rationalization and cost reductions.

Investments Outside Japan

-The Company has started a study of building a new plant to produce automobile lamps in the northern part of China, including Tianjin, against the backdrop of a brisk new car market in China. Watching carefully the Chinese and global market conditions, the lamp maker is aiming to inaugurate its operations as early as by the end of 2012 fiscal year. The Company already has three local makers of automobile lamps in China, which supply headlamps for 3 million vehicles. Given their production capacity nearing the limit due to expanding new car production in China, the Company has begun to seriously consider construction of a new facility. The new plant is expected to produce lamps for half a million vehicles per year with an investment of 5 billion yen. Following a feasibility study on its location and management style, the supplier is looking to make a final decision by the end of fiscal 2010 and start its operations in fiscal 2012. (From an article in the Nikkan Jidosha Shimbun on Dec. 28, 2009)

-The Company will accelerate its plans to establish small-scale plants that are capable of producing lamps for 100,000 to 200,000 vehicles per year, so as to cater to the needs of emerging automotive markets. Up until recently, the Company has been enhancing its global production structure by adding facilities with an annual production capacity of 500,000 sets. Investment in each plant reached around 5 billion yen. Having almost completed its major global expansion projects, the Company is now set to establish a number of small-scale, low cost, yet profitable new plants to support the emerging markets. It is targeting Brazil and other countries in South America, Russia, Southeast Asian countries, and Turkey. The Company intends to develop an optimized production structure by responding to the needs of respective markets, including use of low-cost halogen lamps. (From an article in the Nikkan Jidosha Shimbun on Jan. 6, 2010)

Planned Capital Investments

(As of Mar. 31, 2010)

Company / Plant Equipment to be introduced Estimated
amount of
investment
(in million JPY)
Project Period
From To
Shizuoka Plant
(Shizuoka Pref., Japan)
Manufacturing equipment for automotive lamps, etc. 1,672 Apr.
2010
Mar.
2011
Haibara Plant
(Shizuoka Pref., Japan)
Manufacturing equipment for automotive lamps, etc. 1,991 Apr.
2010
Mar.
2011
Koito Kyushu Ltd.
(Saga Pref., Japan)
Manufacturing equipment for automotive lamps, etc. 3,170 Mar.
2010
Mar.
2011
North American Lighting Inc.
(Illinois, USA)
Manufacturing equipment for automotive lamps, etc. 1,360 Mar.
2010
Mar.
2011
Shanghai Koito Automotive Lamp Co., Ltd.
(Shanghai, China)
Manufacturing equipment for automotive lamps, etc. 3,928 Mar.
2010
Mar.
2011
Thai Koito Co., Ltd.
(Samutprakarn, Thailand)
Manufacturing equipment for automotive lamps, etc. 1,375 Mar.
2010
Mar.
2011