Pacific Industrial Co., Ltd. Business Report FY2009

Business Highlights

Financial Overview

(in millions of JPY)
  FY2009 FY2008 Rate of Change
(%)
Factors
Overall
Sales 78,202 80,468 (2.8) -
Operating
income
3,073 (437) - -Income recovered as a result of the Company's urgent efforts to improve income. These efforts included reducing labor and other costs through improving unit costs, reducing capital investments, and revamping  production operations.   
Ordinary
income
3,595 (490) -
Current net income 2,498 (355) -
Stamping/resin product business
Sales 58,610 57,049 2.7 -
Operating income 1,609 (904) - -
Valve product business
Sales 19,120 22,906 (16.5) -Sales decreased due to a significant decline in sales of TPMSs (Direct Tire Pressure Monitoring Systems) in the US market, the reduction in automobile production, and inventory adjustment.
Operating income 1,494 469 218.4 -Income increased, thanks to a favorable change in material prices and the Company's urgent efforts to improve its income.

 

Performance by region

Japan -The Company's volume of sales in Japan, especially of stamping and resin products, surpassed that of the previous fiscal year due to increased production volume of eco-cars.
Asia -Sales of stamping and resin products surpassed those of the previous fiscal year due to increased automotive production in China.
-Sales of valves were lower than those of the previous fiscal year due to a significant decrease in sales in the first half.
-Sales and income increased in Asia on the whole.
North America -Sales and income decreased in North America as a result of customers adjusting their inventories, negative currency translation, and a significant decrease in automobile production.

 

Medium-term management plan OCEAN-12

-Period: Fiscal year 2010 through FY2012
-Purpose: Achieving results with limited resources, solidifying CSR activities, and establishing and developing technologies
OCEAN-12 numerical targets FY2012
(Planned)
FY2009
(Actual)
Sales 80 billion yens 78.2 billion yens
Ordinary income ratio
5.0% 3.2%
Sales in and outside Japan (as percentages of total sales) In Japan 74% 67%
Outside Japan 26% 33%
 Breakdown of sales of functional and non-functional products (as percentages of total sales) Functional 43% 43%
Non-functional 57% 57%
Sales by product (as a percentage of total sales) Stamping/resin 74% 75%
Valve 14% 13%
TPMS 11% 11%
Others 1% 1%

 

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

R&D

R&D Expense

(in millions of JPY)
  FY2009 FY2008 FY2007
Overall 684 757 926
Stamping/resin products business 73 141 163
Valve products business 84 404 518
Common 518 206 234

 

R&D Activities

Business
segment
Major activities
Stamping/resin products business Technology Headquarters:
-Stamping products: the Company improved its stamping products designed for hybrid cars. It also researched and developed new stamping methods such as technologies to process aluminum and high-strength steel that will reduce the weight of products. 
-Resin products: the Company improved non-plated resin products using bright film. It also researched and developed foam molding technology and other technology that will reduce weight and noise.
-The Company received the Technology Development Award from its main customer in September 2009 for developing a non-plated handle which utilized the high functionality of bright film.

Operation Department No.1/Production Engineering Department:
-The Company worked to develop a new method of in-plant recycling of resin materials, as well as develop production processes such as one that reduces the use of paint by improving painting efficiency.
Valve products business Technology Headquarters:
-Tire valve products: in response to the European initiative to reduce materials that impact the environment, the Company researched and developed lead-free alternative metals for tire valves. It also conducted a research and development to blend rubber that doesn't contain environmentally harmful materials. 
- Valve products for car air conditioner: the Company researched and developed valves for air conditioners such as an environmentally friendly new valve to respond to the cooling medium. 
- TPMSs (Direct Tire Pressure Monitoring Systems): in the hope of increasing presence in the global market in the future, the Company developed a next-generation transmitter that responds to the European environmental regulations. The Company also develop lead-free and energy-saving production methods that are environmentally friendly.

Operation Department No.2/Production Engineering Department:
-The Company started using a production method that creates zero scrap and improves material yield. As a result, the Company was able to significantly reduce the use of materials as well as reduce waste.  
-The Company developed methods that streamline its operations. One example is an automated visual check. 
-The Company developed an aluminum forging method and technology to mold products by utilizing a progressive transfer system in manufacturing high-precision stamping products. As a result, it received orders for more items such as major components used in hybrid cars.
Common Technology Headquarters:
-The technology headquarters engaged in the following R&D activities: activities for launching non-plated products to which bright film has been applied.
-developing components that respond to leaks in the sealing mechanism in sealing valves
-developing components for next-generation TPMSs and components for transmitting and receiving devices, which can be installed on more vehicle models.
-developing functional components for use in next-generation hybrid cars.

Investment Activities

Capital Expenditure

(in millions of JPY)
  FY2009 FY2008 FY2007
Overall 4,359 14,194 14,343
Stamping/resin products 3,888 13,026 13,064
-In Japan 2,636 9,717 9,279
-Outside Japan 1,252 3,308 3,785
Valve products 424 1,140 1,300

 

Business segment

Objective
Stamping/resin products In Japan:
-To respond to new products such as molds for new vehicle models, etc.

Outside Japan:
-To respond to new products in its stamping business in China and North America.
Valve products Production increase and preparation for production of new products

 

New Facilities

Facility
(Location)
Business segment Purpose Planned total investment
( in million JPY)
Start Planned completion Production capacity growth after completion
The Company
Nishi Ogaki Plant
(Gifu, Japan)
Stamped and resin New products,
etc.
3,414 Aug. 2009 Nov. 2012 None
Maintenance and renewal etc. 953 Oct. 2009 April 2011 None
The Company
Higashi Ogaki Plant
(Gifu, Japan)
Stamped and resin New products,
etc.
509 Oct. 2009 March 2012 None
Automation and rationalization 491 Sept. 2009 March 2011 None
The Company
Yoro Plant
(Gifu, Japan)
Stamped and resin, etc Automation and rationalization 123 Jan. 2007 June 2011 None
The Company
Kyushu Plant
(Fukuoka, Japan)
Stamped and resin New products,
etc.
198 Sept. 2009 March 2011 None
The Company
Tohoku Plant
(Miyagi, Japan)
Stamped and resin New products,
etc.
478 Nov. 2009 Aug. 2011 None
The Company
Kita Ogaki Plant
(Gifu, Japan)
Valve Automation and rationalization 207 March 2010 June 2011 None
New products,
etc.
307

Sept. 2009

June 2011 None
The Company
Mino Plant
(Gifu, Japan)
Valve Automation and rationalization 120 Feb. 2010 Oct. 2011 None
Pacific Industries USA Inc.
(Ohio, USA)
Stamped and resin,
Valve
New products,
etc.
244 Jan. 2010 Dec. 2010 None
Pacific Valve (Taiwan) Co., Ltd.
(Taichung, Taiwan)
Stamped and resin,
Valve
New products,
etc.
60 Jan. 2010 Dec. 2010 None
Pacific Valve Industrial Co., Ltd.
(Yangsan, Korea)
Valve New products,
etc.
7 Jan. 2010 Dec. 2010 None
Pacific Air Controles Co., Ltd.
( Ah San, Korea)
Valve New products,
etc.
232 Jan. 2010 Dec. 2010 None
Pacific Industries (Thailand) Co., Ltd.
(Chachoengsao, Thailand)
Valve New products,
etc.
21 Jan. 2010 Dec. 2010 None
Tianjin Pacific Auto Parts Co., Ltd.
(Tianjin, China)
Stamped and resin, New products,
etc.
528 Jan. 2010 Dec. 2010 None