Nishikawa Rubber_Business Report FY2008

Business Highlights

Financial Overview (in million JPY)
- FY2008 FY2007

Rate of
change(%)

Factor
Overall
Sales 50,148 58,033 (13.6%) -
Operating
income
37 3,268 (98.9%) -
Ordinary
income
(129) 4,107 - -
Net
income
(1,744) 2,397 - -
Automotive
Sales 45,944 52,610 (12.7%) Auto production volume significantly dropped all over the world. In particular, the production volume in Japan of eight Japanese automakers decreased on a year-on-year basis for the first time in seven years. These factors had a substantial negative impact on the Company's operating income
Operating
income
(50) 3,079 -

Highlights overseas

-India

The Company has decided to increase its investment ratio in Anand Nishikawa Co., Ltd. (ANCO) by acquiring additional shares in the manufacturer and seller of automotive rubber and seal products operating in Delhi, India. The company intends to further strengthen its production and sales activities in the Indian automotive industry, the market with growth potential. This will allow the Japanese supplier to increase its equity investment in the Indian company to 1,350,000 shares, or 20% of all outstanding stocks, and make ANCO its equity method affiliate. (From an article in the Nikkan Jidosha Shimbun on Apr. 23, 2008)

R&D

R&D Expense (in million JPY)
  FY2008 FY2007 FY2006
Automotive parts 106 104 164

R&D Activities (FY2008)

(1)Development of technology to make lighter products

The Company is trying to develop lighter seal products by making the best use of its foaming technology.

(2) Development of technology to improve sound performance

Based on its foaming technology, the Company is continuing to develop products that not only improve sound performance but also block sound better.

(3)Development of technology to comply with environmental needs

In order to cut certain in-vehicle VOCs (Volatile Organic Compounds), the Company is trying to alter the particular organic solvents used in its products. The company has already changed some adhesives and primers its uses.

The Company began mass-producing exterior seals for doors, using resin (TPE: thermoplastic elastmer) instead of rubber to shape the corners.

The Company started manufacturing and supplying new, high-quality bio-plastic materials, which were developed under an R&D project based on a consortium of industry, academia, and government. The new materials are now being used in interior parts on some environmentally friendly vehicles.

Investment Activities

Capital Expenditure (in million JPY)
  FY2008 FY2007 FY2006
Overall 5,493 8,120 6,132
Automotive parts business 5,238 7,830 5,863

Automotive parts business

-FY2008


Production facilities for new seal products
Production facilities to support rationalization investments that reduce costs. 

-FY2009 (Planned Developments)

The Company has a plan to build a new mass production line for sealing parts made of thermoplastic elastomer (TPE) within fiscal 2009 at the earliest. This will allow the company to respond to future needs from major automakers who are now studying the possibility of applying TPE to window seals as a low-cost and easy-to-recycle material. The supplier is to determine how much to invest and when to start the mass production, responding to orders from major automakers. Nishikawa Rubber currently has one finishing line for TPE products at its Yoshida Plant in Akitakata-shi, Hiroshima Prefecture. This line is currently mass producing glass run channels with TPE corners that completely close gaps between door frames and windows. It also has a line to extrude TPE on a trial basis and the company is preparing for the future launch of mass production. (From an article in the Nikkan Jidosha Shimbun on Sep.19, 2008)

The Company has decided to continue a four-day workweek at its four auto parts plants in Japan and halve its facility investment in the new fiscal year. Although Mazda Motor Corp. will ease its Friday shutdown at the end of March and resume the five-day workweek, Nishikawa Rubber, which does business with almost all the automakers in Japan, predicted that domestic auto production should continue to decline for some time and has decided to stop operations at least on Fridays till the end of the first quarter of the fiscal year ending March 2010. (From an article in the Nikkan Jidosha Shimbun on Mar. 6, 2009)

New equipment installations
Plant Equipment to be introduced Estimated amount of investment
(million JPY)
Project Period
From To
Nishikawa Rubber
Shiraki Plant
(Hiroshima, Japan)
- Manufacturing equipment for automotive seals
- Components for general industry
501 Jun.
2008
Mar.
2010
Asa Plant
(Hiroshima, Japan)
- Manufacturing equipment for automotive seals
- Components for general industry
689 Jun.
2008
Mar.
2010
Yoshida Plant
(Hiroshima, Japan)
- Manufacturing equipment for automotive seals and interior/exterior components
- Manufacturing equipment for exterior walls for housing
513 Aug.
2008
Mar.
2010
Mihara Plant
(Hiroshima, Japan)
- Manufacturing equipment for automotive door seals.
- Manufacturing equipment for exterior walls for housing
631 Sep.
2008
Mar.
2010
Others - Buildings and R&D equipment and others 422 Jun.
2008
Mar.
2010
Domestic subsidiaries
Nishikawa Bussan
(Hiroshima, Japan)
- Manufacturing equipment for automotive seals
- Manufacturing dies
66 Apr.
2009
Mar.
2010
Seiwa Kougyo Co., Ltd.
(Hiroshima, Japan)
- Manufacturing equipment for automotive seals
- Components for general industry
33 Dec.
2008
Mar.
2010
Nishikawa Big Ocean Co., Ltd.
(Hiroshima, Japan)
- Manufacturing equipment for automotive seals 114 Dec.
2008
Mar.
2010
Nishikawa Rubber Yamaguchi
(Yamaguchi, Japan)
- Manufacturing equipment for automotive seals 150 Apr.
2009
Mar.
2010
Nishikawa Big Well Co., Ltd.
(Hiroshima, Japan)
- Manufacturing equipment for automotive seals 94 Apr.
2009
Mar.
2010
Overseas subsidiaries
Nishikawa Tachaplalert Rubber Co., Ltd.
(Thailand)
- Manufacturing equipment for automotive seals 307 Apr.
2008
Dec.
2009
Shanghai Nishikawa Sealing System Co., Ltd.
(Shanghai, China)
- Manufacturing equipment for automotive seals 869 Apr.
2008
Dec.
2009
*Most of the domestic investments were for renewing or rationalizing facilities for new product launches, and generated no significant improvement in the Company's production capacity.

*Investments in overseas subsidiaries were made to respond to more orders.