Pacific Industrial Co., Ltd. Business Report FY ended Mar. 2017
Financial Overview |
(in million JPY) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | Rate of Change (%) |
Factors | |
| Overall | ||||
| Sales | 103,669 | 106,886 | (3.0) | - |
| Operating income | 8,662 | 7,869 | 10.1 | -Income increased, thanks to higher sales volumes and the favorable results of effective cost-cutting improvements. |
| Ordinary income | 9,957 | 9,013 | 10.5 | |
| Net income attributable to owners of the parent | 7,524 | 7,114 | 5.8 | - |
| Stamping/resin product business | ||||
| Sales | 70,876 | 74,461 | (4.8) | -The unit production volumes of new vehicles were relatively strong in Japan, the USA, and China. -Income decreased due to negative currency translation because of the high valuation of the yen. |
| Operating income | 2,542 | 1,769 | 43.7 | -Income increased due to lower expenses incurred for building production plants overseas, and the favorable results of effective cost-cutting initiatives. |
| Valve product business | ||||
| Sales | 32,620 | 32,032 | 1.8 | -Strong sales of TPMS products. |
| Operating income | 6,120 | 6,114 | 0.1 | -Although negative currency translation impacted the final income results, income increased due to higher sales volumes and the favorable results of effective cost-cutting initiatives. |
Product Orders and Awards of Recognition
-The Company was awarded the Automotive Product Award in 2016, receiving the “Ultra” Product Creation Award for developing friction-stir welded (FSW) aluminum; and the 2016 Technology Award from the Japan Aluminum Association.
-The Company was awarded the Toyota Project Award for its New Pop-up Hood System.
-The Company was awarded the New Prius PHV Project Award for developing a tooth-shaped part based on using thin, high-tensile steel.
Medium-term management plan OCEAN-18
| Target figures for Ocean-18 | FY ending Mar. 31, 2019 (Target) |
FY ended Mar. 31, 2017 (Actual Result) |
FY ended Mar. 31, 2016 (Actual Result) |
| Consolidated sales (billion JPY) | 120.0 | 103.6 | 106.8 |
| -Sales breakdown by products | Stamping/resin product 67%, Valve 32% | Stamping/resin product 68%, Valve 32% |
Stamping/resin product 70%, Valve 30% |
| Consolidated ordinary income | 8% range | 9.6% | 8.4% |
| Percentage of sales outside Japan | Over 50% | 44% | 48% |
| Total asset turnover | Turnover of 1.05 | - | - |
-Initiatives to achieve the objectives outlined in the mid-term management plan
Stamping Business
Increase the use of ultra-high-tensile stamping operations and enhance mass-production operations
・The 1180MPa-class part is being mounted on the TNGA body, for which global production is growing.
・The Company forecasts that total sales in the fiscal year that ends in March 2019 will increase by JPY 9.0 billion over actual results in the fiscal year that ended in March 2016.
Development of friction-stir welded (FSW) aluminum
・Technology for friction-welding aluminum of varying thicknesses.
・Expanding lower-cost products in Japan and the USA, by making them lighter and improving yield.
・The Company forecasts that total sales in the fiscal year that ends in March 2019 will increase by JPY 4.0 billion over actual results in the fiscal year that ended in March 2016.
Resin Business
Development of All-urethane Engine Cover
・The Company eliminated the base material used in two-layered engine covers, i.e., covers comprised of base material and urethane, developing an engine cover made entirely of urethane.
・It launched commercial production in Japan and the USA in 2016.
TPMS Business
Increasing the development, production, and sale of TPMSs that comply with regulations in every country.
・Develop a global production and sales structure
・Increase annual production capacity to 28 million units
・Launch deliveries to Korean OEMs from the fiscal year that ends in March 2018.
・Increase production capacity in Changshu from 2017.
Pressure-forging Business
Pressure-forging Business will increase sales by using sheet-metal diecasting technology
・Expand the Yoro Plant and start production in North America in 2017 fiscal year.
・The Company forecasts that total sales in the fiscal year that ends in March 2019 will increase by JPY 700 million over actual results in the fiscal year that ended in March 2016.
Diecast Business
Increase production capacity of aluminum diecast business
・Build integrated production operations to manufacture parts for compressors used in automotive air-conditioners.
・Expand sales of engine auxiliary parts and electric compressor parts.
・The Company forecasts that total sales in the fiscal year that ends in March 2019 will increase by JPY 2.0 billion over actual results in the fiscal year that ended in March 2016.
Outlook for FY ending Mar. 31, 2018 |
(in million JPY) |
| FY ending Mar. 31, 2018 (Forecast) |
FY ended Mar. 31, 2017 (Actual Results) |
Rate of Change (%) |
|
| Sales | 110,000 | 103,669 | 6.1 |
| Operating income | 8,700 | 8,662 | 0.4 |
| Ordinary income | 9,500 | 9,957 | (4.6) |
| Net income attributable to owners of the parent | 6,700 | 7,524 | (11.0) |
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
R&D Expenses |
(in million JPY) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | |
| Overall | 1,004 | 943 | 905 |
| -Stamping/resin products business | 203 | 214 | 162 |
| -Valve products business | 562 | 575 | 618 |
| -In Common | 232 | 149 | 120 |
R&D Structure
-The R&D organization consists of the technology and production technology functions at each business, and the technology planning function.
-Advancing collaboration among concerned departments company wide, the Company conducts R&D activities based on joint industry-academia-public collaboration such as with specialized manufacturers, universities, and research institutes, in order to create new materials and new production methods for new products, enhance its competitive strengths, and speed up R&D activities.
-The Company's subsidiary, PI Systems, conducts R&D activities on software.
R&D Activities
| Business segment |
Departments | Major activities |
| Stamping products | -R&D department of the Technology planning center; -Stamping technology and Resin technology Departments of Stamping/resin business unit |
-Automotive body parts that use aluminum tailored blanks manufactured by the friction stir-welded (FSW) manufacturing method. -New pop-up hood hinge -All-urethane engine cover |
| Valve products | -Technology and Production technology departments of the valve and TPMS business unit | -Digital tire-pressure/temperature gage -Relief valves and check values for use on CO2 automotive air-conditioners |
| Common | -Technology planning center | -R&D activities on compound materials -Development of technology on metal plasticity and joining technology. -Development of wireless communications products. -The Company is working to develop environmentally friendly products and production method that require less materials and reduce environmental impact. |
Capital Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | |
| Stamping/resin products | 12,294 | 7,808 | 12,876 |
| -In Japan | 6,700 | 5,292 | 6,284 |
| -Outside Japan | 5,593 | 2,516 | 6,592 |
| Valve products | 4,391 | 4,220 | 2,529 |
| -In Japan | 2,347 | 2,104 | 1,443 |
| -Outside Japan | 2,043 | 2,116 | 1,085 |
| Others | 17 | 40 | 63 |
| Elimination | (69) | (82) | (80) |
| Total | 16,633 | 11,988 | 15,390 |
<Stamping/resin products>
-In Japan, the company invested to install stamping facilities at the Higashi-Ogaki Plant and boost production and migrate to producing new products/dies for use on new-vehicle models.
-Outside Japan, the Company invested to expand and install stamping facilities at the Ohio Plant in the USA.
-In Japan, the Company invested to expand the plants of and install machining equipment for the Pressure-forging Business.
-Outside Japan, invested to produce new aluminum diecast products and respond to increased production at its Korean Plant.
-The Company plans to make capital investments of JPY 18,510 million during the fiscal year that ends in March 2018.
Planned Capital Investments |
(As of Mar. 31, 2017) |
| 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 Pref., Japan) |
Stamped and resin | New products, etc. | 10,441 | Jan. 2016 | Mar. 2019 | Increase production capacity of stamped products by 20%. |
| The Company Higashi Ogaki Plant (Gifu Pref., Japan) |
Stamped and resin | New products, etc. | 2,425 | Apr. 2016 | Aug. 2019 | - |
| The Company Yoro Plant (Gifu Pref., Japan) |
Stamped and resin, Valve | New products, etc. | 3,122 | Feb. 2016 | Sept. 2018 | Increase production capacity of high-precision, stamped parts by 100%.(ongoing from the previous year) |
| The Company Kurihara Plant, Wakayanagi Plant (Miyagi Pref., Japan) |
Stamped and resin | Streamlining production, etc. | 110 | Feb. 2017 | Oct. 2018 | - |
| The Company Kyushu Plant (Fukuoka Pref., Japan) |
Stamped and resin | New products, etc. | 1,577 | Oct. 2018 | May 2019 | - |
| The Company Kita Ogaki Plant (Gifu Pref., Japan) |
Valve | New products, etc. | 2,547 | Jan. 2015 | Oct. 2019 | Increased production capacity of TPMSs by 20%. |
| The Company Mino Plant (Gifu Pref., Japan) |
Valve | Maintenance and retooling, etc. | 831 | Mar. 2016 | Oct. 2017 | - |
| The Company Headquarters (Gifu Pref., Japan) |
Common | Maintenance and retooling, etc. | 149 | Mar. 2017 | Jul. 2018 | - |
| Pacific Manufacturing Ohio, Inc. (Ohio, USA) |
Stamped and resin, Valve | Maintenance and retooling, etc. | 7,447 | Apr. 2016 | Mar. 2018 | Increase production capacity of stamped products by 20%. |
| Pacific Manufacturing Tennessee, Inc. (Tennessee, USA) |
Stamped and resin | New products, etc. | 3,432 | Jun. 2014 | Mar. 2018 | Install equipment for manufacturing stamped products (ongoing from the previous year) |
| Pacific Valve (Taiwan) Co., Ltd. (Taichung, Taiwan) |
Stamped and resin, Valve | New products, etc. | 948 | Jan. 2017 | Mar. 2018 | - |
| Pacific Valve Industrial Co., Ltd. (Yangsan, Korea) |
Valve | New products, etc. | 288 | Feb. 2017 | Mar. 2018 | - |
| Pacific Air Controls Co., Ltd. (Asan, Korea) |
Valve | New products, etc. | 2,268 | Dec. 2016 | Mar. 2018 | Increase production capacity of aluminum diecast products by 30%. |
| Pacific Industries (Thailand) Co., Ltd. (Chachoengsao, Thailand) |
Stamped and resin, Valve | Maintenance and retooling, etc. | 156 | Jan. 2015 | Mar. 2018 | - |
| Tianjin Pacific Auto Parts Co., Ltd. (Tianjin, China) |
Stamped and resin | New products, etc. | 882 | Jan. 2017 | Dec. 2017 | - |
| Changsha Pacific Hanya Auto Parts Co., Ltd. (Changsha, China) |
Stamped and resin | New products, etc. | 898 | Jan. 2017 | Dec. 2017 | - |
| Pacific Auto Parts Technology (Changshu) Co., Ltd. (Changshu, China) |
Valve | Maintenance and retooling, etc. | 3 | Jan. 2017 | Dec. 2017 | - |