Nishikawa Rubber Co., Ltd. Business Report FY2010

Business Highlights

Financial Overview

(in millions of JPY)
  FY2010 FY2009

Rate of
change(%)

Factor
Overall
Sales 52,019 46,938 10.8 Overall sales increased from the previous year’s result thanks to the following factors:
- The Automotive Parts Division, the Company’s major business, developed and increased sales of environmentally friendly products such as lightweight, door inner weather strips. - Sales grew in the strong Asian market.
Operating income 4,775 3,573 33.6 -
Ordinary income 5,453 4,120 32.4 -
Net income 3,828 4,069 (5.9) -
Automotive parts division
Sales 47,811 43,446 10.0 - Sales at the Automotive Parts Division increased larger than the market growth rate thanks to strong sales of new products
Operating income 4,281 3,315 29.1 -Operating income increased as a result of the Company's initiatives to reduce costs.

Business Restructuring

- The Company announced on March 10 that it will strengthen collaborative relationships with a U.S. supplier Cooper-Standard Automotive Inc. (CSA) in the business of rubber sealing for automobiles with an aim to expand and streamline its operations in the global market. Nishikawa will raise its stake in Nishikawa Standard Company LLC, a fifty-fifty joint venture company in the U.S. between Nishikawa of America, Inc. and CSA, by 10 percent to 60 percent to transform the joint venture to Nishikawa’s consolidated subsidiary. The hike in equity is meant not only to further extend and strengthen the U.S. operations, but also to establish a strong foothold in the U.S. under the strategy for global expansion. The U.S. subsidiary will change its company name to Nishikawa Cooper LLC when it becomes the consolidated subsidiary. In Thailand, a 20 percent stake in Nishikawa Rubber’s local corporation Nishikawa Tachaplalert Rubber Co., Ltd. will be transferred to CSA in an attempt to build a broader alliance of the group as a whole. The company name will also be changed to Nishikawa Tachaplalert Cooper.Ltd. Nishikawa Rubber will acquire a stake in CSA’s subsidiary in Poland, Cooper Standard Automotive Polska. Nishikawa and CSA also agreed to reorganize the capital structure of their joint venture “Cooper Standard Automotive Mexico. Details of operations in Poland and Mexico have yet to be announced. (From an article in the Nikkan Jidosha Shimbun on March 11, 2011)

R&D

R&D Expenditure

(in millions of JPY)
  FY2010 FY2009 FY2008
Automotive parts 149 162 106

 

R&D Activities

1) Development of technology to make lighter products
- Automakers are demanding lighter weight products in order to improve fuel consumption. To respond to such requests, the Company is working reduce the weight of its seals by using resin and utilizing better foaming technology.
- The Company developed and commercialized one of the world's lightest door inner seals by use of microcell foam technology and ultra-thin insert metal. The new product offers a 25 percent reduction in mass ratio compared with the Company's former products.


2) Development of technology to reduce noise
- The Company is applying its technology in the area of foaming to further reduce the noise levels in its existing products. It is also developing improved noise-insulating products.

3) Development of technology to comply with environmental needs
- The Company has continued development of energy-saving production method to manufacture sealing materials, next-generation sealing materials for electric cars and other environmentally friendly vehicles, and materials using plant-derived substances.

Investment Activities

Capital Expenditure

(in millions of JPY)
  FY2010 FY2009 FY2008
Overall 2,324 2,091 5,493

- The Company announced that will establish a new company in Korea to manufacture packing seals and sealing products for automobile interiors. The Company is investing 700 million won (approximately 51 million yen) in the project, which will represent its first foray into the Korean market. Production operations are scheduled to begin in April this year, which will allow the company to partly transfer production of products for the local plants of Japanese auto parts suppliers from Japan to Korea, responding to the customers' requirements. The new company, Nishikawa Bussan Korea Inc, will be formed as a subsidiary of Nishikawa Bussan (Nishikawa Rubber's subsidiary) in March 2011. It will be located in Kimhae City, South Gyeongsang Province to manufacture and sell automotive seals and packing products as well as rubber and plastics for construction use. Mr. Mitsuaki Sawamoto, now an Executive Managing Director of Nishikawa Bussan, will assume the presidency of the new company. (From an article in the Nikkan Jidosha Shimbun on February 12, 2011) 

 

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
297 Dec.
2010
Mar.
2012
Asa Plant
(Hiroshima, Japan)
-Manufacturing equipment for automotive seals
-Components for general industry
673 Nov.
2010
Mar.
2012
Yoshida Plant
(Hiroshima, Japan)
-Manufacturing equipment for automotive seals and interior/exterior components
-Manufacturing equipment for exterior walls for housing
567 Dec.
2010
Mar.
2012
Mihara Plant
(Hiroshima, Japan)
-Manufacturing equipment for automotive door seals.
-Manufacturing equipment for exterior walls for housing
291 Nov.
2010
Mar.
2012
Others -Buildings and R&D equipment and others 836 Jan.
2011
Mar.
2012
Domestic subsidiaries
Nishikawa Bussan
(Hiroshima, Japan)
-Manufacturing equipment for automotive seals
-Manufacturing dies
170 Apr.
2011
Mar.
2012
Seiwa Kougyo Co., Ltd.
(Hiroshima, Japan)
-Manufacturing equipment for automotive seals
-Components for general industry
55 Jan.
2011
Mar.
2012
Nishikawa Big Ocean Co., Ltd.
(Hiroshima, Japan)
-Manufacturing equipment for automotive seals 108 Jan.
2011
Mar.
2012
Nishikawa Rubber Yamaguchi
(Yamaguchi, Japan)
-Manufacturing equipment for automotive seals 175 Mar.
2011
Mar.
2012
Nishikawa Big Well Co., Ltd.
(Hiroshima, Japan)
-Manufacturing equipment for automotive seals 68 Mar.
2011
Mar.
2012
Overseas subsidiaries
Nishikawa Cooper LLC. -Manufacturing equipment for automotive seals 773 Dec.
2010
Dec.
2011
Nishikawa Tachaplalert Rubber Co., Ltd.
(Thailand)
-Manufacturing equipment for automotive seals 991 Dec.
2010
Dec.
2011
Shanghai Nishikawa Sealing System Co., Ltd.
(Shanghai, China)
-Manufacturing equipment for automotive seals 502 Dec.
2010
Dec.
2011
*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.