Kojima Industries Corporation Business Report FY ended Dec. 2015

Recent Years

Recent development in Japan

-In September 2014, the Company and Spiber Inc., the developer of QMONOS biomaterial, began constructing a joint plant to mass-produce QMONOS. The new plant will introduce pilot production lines developed at an existing prototyping studio. Kojima and Spiber also announced that they had established a joint venture called Xpiber in Tsuruoka City, Yamagata, Japan on September 26, 2014 to promote the QMONOS business. QMONOS is a next-generation biomaterial made from fibroin protein, which is the main component of spider silks. This petroleum-free material offers a high level of toughness, and is expected to be turned into practical business solutions.

-In 2011, the Company has manufactured the prototype of the next-generation instrument panel module concept targeted at vehicles coming to the market ten years from now. Advanced versions of each component such as a climate control system, a display screen, a mobile phone charger, and a blind spot assist system are integrated into the new instrument panel module. The prototype was showcased at the Automotive Engineering Exposition 2011, a major auto technology exhibition in which the Company participated for the first time. Since the module system contains products such as a display unit, control software and some other products, which are not in its product line and are quite difficult to be handled by any of its group companies, the Company is looking to collaborate with other manufacturers in the area of electronic technology and driving interface. (From an article in the Nikkan Jidosha Shimbun on May 23, 2011)

Acquisition

-In 2013, the Company announced that it will acquire 76% of the outstanding shares in Iwate Kasai Co., Ltd., Kasai Kogyo's subsidiary. Iwate Kasai was established in 2005 to supply interior components to a vehicle assembler in the Toyota Group. As the Company has recently been increasing outsourcing of production to Iwate Kasai, it has decided to acquire Iwate Kasai's shares. The transfer is scheduled to close in January 2014, and Iwate Kasai will change its corporate name to Tohoku KAT Co., Ltd. Tohoku KAT's sales are expected to reach JPY 1.2 billion in the fiscal year ending March 2015. Kasai Kogyo will continue to own the remaining 24% share in the business.

Award

-In 2014, the Company announced that it has received six awards from Toyota Motor Corporation: "Excellent Quality Control", "Excellent Improvement in Cost Management", "Technical Development", "Parts Standardization", "Excellent TNGA Promotion", and "Value Analysis." The Company won the "Excellent Improvement in Cost Management" award for the 34th consecutive year and the "Excellent Quality Control" award for the seventh consecutive year. (From a press release on February 28, 2014)

-In 2013, the Company announced that it received four awards from Toyota: "Excellent Quality Control", "Excellent Improvement in Cost Management", "Value Analysis", and "Technical Development". (From a press release on February 21, 2013)

-In 2012, the Company announced that it received six awards from Toyota, including "Excellent Quality Control", "Special Quality", "Excellent Improvement in Cost Management", "Technical Development", "Parts Standardization", and "Mass Innovation". (From a press release on February 23, 2012)

-In February 2011, the Company received four awards from Toyota, which include "Excellent quality control," "Excellent improvement in cost management," "Excellent VA activities" and "Technical development". (From a press release on February 28, 2011)

Contracts

-In 2008, the Company developed an engine undercover that has both enhanced aerodynamic performance and pedestrian safety features. The engine undercover has been installed in Toyota Motor's "iQ" ultra compact vehicle as well as the "Prius hybrid". The Company intends to present this undercover to automakers for application in other vehicles as well.

R&D Facilities

Name Location Overview
Kurozasa Technical Center Aichi Pref.,
Japan
Developing and prototyping electronic components; research on manufacturing technology
Kojima Research Institute Aichi Pref.,
Japan
R&D on automotive components

Product Developments

Finless register and a customized ornament
-The Company has developed a finless register and a customized ornament, the industry's first technologies which can greatly contribute to improving the overall design of the instrument board. As opposed to conventional cockpit design, in which registers occupy a significantly large amount of space, the Company's new technology features high performance, yet a simpler air duct opening and a larger ornament panel, which is replaceable like "changing clothes" according to the user's preference. The Company is going to propose the interior products initially to Toyota, looking to start delivery as early as in FY2014. The new register without a fin controls wind directions by making air currents hit each other inside the blower unit. Air currents are divided in all directions and then be merged near the blower for optimal control of the air. The simpler design and low-profile register is expected to greatly contribute to improving the design flexibility of the instrument unit. Kojima Press already acquired patents for the new finless register and airflow controlling technology in FY2011. "Since we will need to develop the product by taking into account the airflow levels from the air conditioning unit, we will be performing joint developments with air conditioning system suppliers for actual vehicle applications"., the Company says. (From an article in the Nikkan Jidosha Shimbun on May 29, 2012)

Engine under covers

-In 2008, the Company developed an engine undercover that has both enhanced aerodynamic performance and pedestrian safety features. The engine undercover has been installed in Toyota Motor's "iQ" ultra compact vehicle. The Company's new engine undercover is positioned 40 millimeters lower than conventional under covers, which are normally located approximately 160 millimeters above the road surface. The lower position improves airflow under the car to reduce aerodynamic drag. However, this shorter distance from the road surface makes the undercover more prone to breakage, as there are greater chances of it hitting curbs and other objects beneath. The Company's engineers have overcome these problems by changing the resin used and perfecting the undercover's shape so that it is angled to allow easier sliding on the curb and returns to its original shape if it is impacted. In addition, by incorporating a lower absorber into the vehicle body, instead of using an iron reinforcement as in the past, the Company improved the undercover's strength and reduced the weight by more than 50 percent to 1,400 grams. As a result of these developments, the new engine undercover can bring down the vehicle's weight by 90 kilograms when it is running and reduce carbon dioxide emissions by 1,200 kilograms per year.