Daido Metal Co., Ltd. Business Report FY ended Mar. 2015
Business Highlights
Financial Overview |
(in million JPY) |
| FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | Rate of change (%) | Factors | |
| Overall | ||||
| Sales | 85,015 | 77,350 | 9.9 | - |
| Operating income | 7,633 | 7,368 | 3.6 | - |
| Ordinary income | 8,129 | 8,063 | 0.8 | - |
| Current net income | 4,459 | 4,735 | (5.8) | - |
| Automotive Bearings | ||||
| Sales | 55,265 | 50,021 | 10.5 | -Higher sales in Europe, North America, and Asia (especially in China, Thailand, and Korea) -Favorable currency translation due to the weak yen |
| Operating income | 6,661 | 6,632 | 0.4 | |
| Automotive bearings (non-engine) | ||||
| Sales | 16,362 | 14,992 | 9.1 | -More product orders were received as a result of the Company's effective sales activities, especially in Japan and Europe. |
| Operation income | 4,064 | 4,053 | 0.3 | |
New Company
-The Company will establish a new production subsidiary for processing bearing materials in Takeo City, Saga Prefecture. The new company called Daido Metal Saga Co., Ltd. The Company anticipates growing demand for bearings for automotive and other industries both in and outside Japan. Thus, the Company will establish a supply network for bearing materials at two locations: the new subsidiary's plant and the Inuyama plant in Aichi prefecture. The new plant will begin operations in June 2016. The investment in the new plant will amount to JPY 6 billion in two to three years. The wholly owned production subsidiary will be capitalized at JPY 100 million. The Company chose Saga Prefecture in consideration of earthquake and other disaster risks and ease of recruiting human resources. (From an article in the Nikkan Jidosha Shimbun on March 26, 2015)
Mid-term Management Plan
-The Company announced that it will revise its six-year business plan covering from April 2012 through March 2018 (FY 2012-2017) in order to enhance its global strategy. By the fall of 2014, the Company will map out a rolling plan for the second stage of the plan starting in April 2015. As demand in the North American and Chinese markets is growing more significantly than originally fore-casted, the Company intends to increase production capacity in Mexico and China. In the current project, the Company's new Mexican plant will be able to produce engine bearings for 5 million vehicles per year by March 2017. In order to meet increasing orders from Japanese and American automakers, the Company plans to make an additional investment in the facility. Meanwhile, it is considering setting up its third manufacturing plant in China. (From an article in the Nikkan Jidosha Shimbun on May 14, 2014)
-Performance Objectives
- Consolidated sales: JPY 111,000 million
- Operating income: JPY 16,700 million
- Profit margin: 15% or higher
-First phase of increased production
2012
- Completion of third plant at Dyna Metal Co., Ltd. (Thailand)
- Completion of second plant at Daido Precision Metal (Suzhou) Co., Ltd. (China)
2013
- Completion of second plant at Daido Metal Czech s.r.o. (Czech Republic)
- Completion of second plant at PT. Daido Metal Indonesia
- Completion of new plant at Daido Metal Mexico S.A. de C.V.
- Daido Metal Russia LLC is preparing to respond to automotive production by non-Japanese car makers, and to expected truck production.
-Stage 2 main objectives (From the fiscal year ending March 2016 to the fiscal year ending March 2018)
- Make the Mexican operations profitable.
- Launch automotive-engine bearing operations at BBL Daido Private Ltd. (in India).
- Deal with truck bearing business and bearing business toward non-Japanese car makers at Daido Metal Russia LLC
- Launch production at Daido Metal Saga Co., Ltd. that was established in April 2015, in order to strengthen production capacity of bimetals.
- Increase automotive-engine bearing production capacity in Korea by 2016.
-Company's global market share
| Stage 1 2014 actual results (calendar-year basis) |
Stage 2 Ultimate objectives (By the fiscal year ending March 2018) |
|
| Half metal bearing for automobile | 31.5% | 40% |
| Turbocharger bearing | 34% | 40% |
Outlook for FY ending Mar. 31, 2016 |
(in million JPY) |
| FY ending Mar. 31, 2016 (Forecast) |
FY ended Mar. 31, 2015 (Actual Results) |
Rate of Change (%) |
|
| Sales | 85,500 | 85,015 | 0.6 |
| Operating income | 8,000 | 7,623 | 4.8 |
| Ordinary income | 8,600 | 8,129 | 5.8 |
| Net income | 5,300 | 4,459 | 18.9 |
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
R&D Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | FY ended Mar. 31, 2013 | |
| Overall | 1,559 | 1,319 | 1,251 |
R&D Structure
-R&D activities are conducted at three centers: R&D Technical Center, Production Technology Center, and the Design Center.
-In 2014, the Company established "Europe technical center" in Czech Republic.
R&D Activities
Development of engine bearings that lower fuel consumption, for start-stop and hybrid systems
-Development of new resin overlays that improve wear, abrasion, and seize resistance, while lowering friction.
R&D on bearings with new lead-free overlay
-It also developed, and is now delivering, a highly durable aluminum-alloy bearing for engines, which complies with European lead regulations and offers the world's highest level of performance in terms of resistance to wear, abrasion, and fatigue.
-The Company developed and supplying new lead-free overlays and copper-aluminum alloys, which are capable of withstanding use in the very harshest of environments.
R&D on racing bearings
-The Company has developed, and is supplying racing bearings which is capable of enduring ultra-high-speed revolutions in F1 racing cars.
R&D on new PEEK materials
-The Company is developing bearings composed of PEEK materials, working to improve their performance in automotive parts, general industrial equipment, and electric power generators.
R&D on shock-absorber bearings to develop materials that increase riding comfort
-The Company developed bearings made from lead-free, plastic material that enhances riding comfort in terms of steering stability and shock absorption, based on the bearings used in automotive shock-absorbers. In addition, the Company is continuing to conduct R&D activities on materials, in order to further improve performance.
Capital Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | FY ended Mar. 31, 2013 | |
| Overall | 10,597 | 10,838 | 10,040 |
| -Automotive engine bearings and non-engine bearings |
6,947 | 8,502 | 6,574 |
| -Facilities to manufacture bi-metals (Bearing material) |
327 | 165 | 247 |
-Investment activities in FY ended Mar. 31, 2015
| Facility | Outlines |
| Automotive Bearings | |
| -Facilities specialized in processing | -The Company invested in facilities and equipment for the purpose of raising the production capacity at its own and at those of its consolidated subsidiaries (Daido Plain Bearing and NDC) in Japan. -At its consolidated subsidiaries outside Japan, the Company invested in facilities and equipment for the purpose of raising production capacity, especially at its Asian, European and North American plants. |
| -Production facilities producing Bi-metal (Bearing material) | -The majority of bi-metals used at domestic and overseas plants is supplied by the Company. The Company invested in facilities and equipment mainly at its own production facilities to raise production capacity. |
Investments Outside Japan
<India>
-The Company announced that it will construct a new plant to produce automotive engine bearings at its Indian joint venture, BBL Daido Private Limited (BBLD). The plant is scheduled to become operational by the end of 2015. BBLD, which was jointly established with the Amalgamations Group of India in 2001, has been manufacturing bushes for automotive shock absorbers. With the expansion of BBLD, Daido Metal has raised its equity stake in the subsidiary from the previous level of 40 percent to 50 percent. (From a press release on June 10, 2014)
Planned Capital Investments (Bearing metal for automobiles business) |
(As of Mar. 31, 2015) |
| Name (Location) |
Purpose of Equipment Installation | Estimated amount (in million JPY) |
From | To |
| Inuyama Plant (Aichi Pref., Japan) |
Facility to produce half-bearings | 1,374 | Jan. 2013 | Sep. 2015 |
| Gifu Plant (Gifu Pref., Japan) |
Facility to produce wrapped bushes | 143 | May 2015 | Apr. 2016 |
| Bi-metal production plant (Aichi Pref., Japan) |
Facility to produce bi-metals (Bearing material), construction of plant building | 8,727 | Apr. 2014 | Oct. 2016 |
| Production Engineering Center, R&D Center (Aichi Pref., Japan, etc.) |
Other facilities | 475 | May 2015 | Oct. 2016 |
| Headquarters (Aichi Pref., Japan, etc.) |
Investment in systems | 475 | Apr. 2014 | Jan. 2016 |
| NDC Co., Ltd. (Chiba Pref., Japan, etc.) |
Facility to produce half-bearings | 372 | Mar. 2014 | Apr. 2015 |
| Daido Plane Bearing Co., Ltd. (Gifu Pref., Japan) |
Facility to produce half-bearings | 1,002 | Sep. 2012 | Oct. 2015 |
| Dong Sung Metal Co., Ltd. (Yeongdong-gun, Korea) |
Facility to produce half-bearings | 1,163 | May 2014 | Jan. 2016 |
| Dyna Metal Co., Ltd. (Chachoengsao, Thailand) |
Facility to produce half-bearings | 676 | Jun, 2013 | Apr. 2015 |
| Daido Metal U.S.A. Inc. (Ohio, Michigan, USA) |
Facility to produce half-bearings | 330 | Dec. 2014 | Apr. 2016 |
| Daido Metal Kotor AD. (Kotor, Montenegro) |
Facility to produce half-bearings | 336 | Aug. 2013 | May 2015 |
| Daido Metal Czech s.r.o. (Brno, Czech) |
Facility to produce half-bearings | 1,012 | Jul. 2013 | Feb. 2016 |
| Daido Metal Russia LLC (Nizhny Novgorod Oblast, Russia) |
Facility to produce half-bearings | 1,071 | Mar. 2013 | Oct. 2015 |
| Daido Metal Mexico S.A.de C.V. (Jalisco, Mexico) |
Facility to produce half-bearings, and facility to produce wrapped bushes | 2,199 | Feb. 2013 | Nov. 2015 |