CHUO SPRING CO., LTD. Business Report FY2006
Business Highlights
Financial overview
| In million JPY | FY2006 | FY2005 | Rate of Change (%) | Factors |
| Sales | 92,972 | 89,717 | 3.6 | -Sales in the suspension springs business increased 6.0%, compared with those of the previous fiscal year, mainly due to a 25.9% increase in sales of leaf springs. -In the precision spring business, year-on-year sales increased as follows: 4.1% for wire springs and 11.4% for flat springs. These increases raised the total overall sales by 7.7%. -In the cable business, sales of control cable increased 6.8% year-on-year. As a result, total overall sales increased 4.3%, compared to that of the previous year. |
| Operating income | 1,379 | 1,797 | (23.3) | Operating income decreased due to higher steel prices and greater depreciation charges and expenses. |
| Ordinary income | 1,881 | 2,095 | (10.2) | Ordinary income decreased as a result of higher raw materials costs and lower selling prices; despite factors that raised earnings such as an increase in sales of value-added products, and rationalization and improvement activities. |
| Current net income | 1,275 | 1,222 | 4.3 | Current net income decreased because the Company posted an extraordinary loss for reserves to cover product-warranty expenses connected with products it sold in the past few years. This was in spite of gains achieved from selling securities held for investment and profits resulting from selling fixed assets. |
Business development
As to its overseas operations, the Company made preparations
to start production at its new plants in California, U.S.A. and
in the Tianjin area of China. In Japan, it made preparations to
establish new subsidiaries in Nagasaki Prefecture and Aomori Prefecture.
See Investment for details
R&D
R&D expenses were 349 million yen
in FY2006.
Main Achievements in FY 2006
Suspension Springs Business
Side Action Spring by CHKK (SASC): More passenger vehicles,
especially high-end luxury vehicles and cars destined for sale in
the global market, are being equipped with SASCs. To deal with the
rising demand for these springs, the Company began producing them
at its domestic and overseas facilities. Production volume of the
SASCs is increasing significantly, and the Company is working on
developing production technology to ensure the quality of these
mass-produced springs. To gain a competitive edge in technology
on chassis springs in the future, the Company is also developing
new technology in the areas of lateral force control and surface
treatment.
Precision Spring Business
-To make valve springs suitable for higher performance and
higher speed automobile engines, the Company had been developing
new high-intensity valve springs made of new material it developed.
The Company has now completed the development of these springs and
some car makers have decided to equip them on their vehicles.
- For heat-resistant spring parts used in exhaust systems, the Company
completed development of a new super-heat resistant material, which
offers the highest level of heat-resistance properties. The Company
also is focusing on activities to reduce the use of rare metals.
- The Company is working to improve the capability of spiral springs
used to bring seats to their upright positions, develop a new manufacturing
technology for its new flat springs, and increase the number of
trial productions it conducts on precision stamped products.
Cable Business
-The Company was able to smoothly launch the development phase
for conducting R&D activities on cables used in motor parking
braking systems for the most high-end domestic Japanese passenger
cars, based on strong collaboration with its customer's designing
department.
- The Company conducted new development activities, starting from
basic theoretical research on stranded wires up to the development
of simulation technology on cables, successfully resolving major
technical issues.
Technology Licensing (as of March 2007)
| Suppliers | Country | Contents of contract | Contract period |
| Supreme Spring (A Division of Metindustrial (Property) Ltd.) | South Africa | Chassis springs for automobiles and railroad cars. | 5 years from May 1994. (automatically renewable) |
| Metex Corporation | USA | Knitted wire meshes | 5 years from June 1, 1994. (automatically renewable) |
| Knitmesh Limited | UK | Knitted wire meshes | 5 years from April 1, 1991. (automatically renewable) |
| Dura Automotives Limited | UK | Control cables | 10 years from June 2, 1995. (automatically renewable) |