Chuo Spring Co., Ltd. Business Report FY2010

Business Highlights

Financial Overview

(in millions of JPY)
  FY2010 FY2009 Rate of Change
Sales 76,416 72,854 4.9 -
Operating income 2,087 2,144 (2.7) - Despite the company’s efforts to become more cost competitive and profitable, its operating profit dipped from the previous year’s result due mainly to fluctuations in product selling prices.
Ordinary income 2,044 2,364 (13.5) -
Current net income 1,763 2,707 (34.9) - Net income decreased year-on-year due to the impairment loss from liquidating one of its subsidiary in North America.

Business Restructuring

-The Company announced on February 2 that it has decided to dissolve Central Spring, Inc., its production and sales subsidiary in Stockton, California, U.S.A. The major reason behind the dissolution was production discontinuance at New United Motor Manufacturing, Inc. (NUMMI), its major customer, which made the subsidiary extremely difficult to stay in business. In the consolidated financial statements for the April through December period in 2010,the Company posted an extraordinary loss of 760 million yen as the impairment of fixed assets at the subsidiary. Central Spring will cease production in June 2011, and dissolve two month later in August. Liquidation procedures are scheduled to be completed by the end of February 2012. The Company was established as Chuo Spring's North American sales subsidiary in 1987. It has been producing coil springs at its plant constructed in 2006, supplying them to NUMMI. (From an article in the Nikkan Jidosha Shimbun on February 3, 2011)


R&D Expenditure

(in millions of JPY)
  FY2010 FY2009 FY2008
Overall 305 325 361

R&D Activities

Suspension Spring Business
- The Company developed a new coating technology for zero emission vehicles and started to mass-produce stabilizers using the environmentally friendly method.

-The Company continues to develop high-strength materials and reinforcement treatment techniques that contribute to reducing weight and improving performance of its products.

- The Company is developing low cost materials.

Precision Spring Business
- The Company is developing products for the next generation, while focusing on technologies such as electric vehicles, plug-in hybrid vehicles, direct injection engines, superchargers, and idle-stop systems that contribute to improving vehicle fuel economy and environmental responsiveness.

Agreements on Licensing Technology

(As of Mar. 31, 2011)

Suppliers Country Contents of contract Date of Contract Contract period
Supreme Spring (A Division of Metindustrial (Proprietary) Ltd.) South Africa Chassis springs for automobiles and railroad cars. 1984.03.31 Five years
(with provision for automatic extension)
Metal Textiles Corporation USA Knitted wire meshes 1994.06.01 Five years
(with provision for automatic extension)
Knitmesh Limited UK Knitted wire meshes 1991.04.01 Five years
(with provision for automatic extension)
Dura Automotives Systems, Inc. USA Control cables 1995.06.02 Ten years
(with provision for automatic extension)
Mubea, Inc. USA Automotive chassis springs 2005.06.30 Until the project is terminated
Tiajin Lizhou Hardware Spring Co., Ltd.
China Valve springs, Torsion bars 2006.09.01 Five years
Rozmas Celik Sanayi Ve Ticaret A.S. Turkey Automotive chassis springs 2010.02.20 Until the project is terminated
Muhr Und Bender KG Germany Automotive chassis springs 2008.06.10 Until the project is terminated

Investment Activities

Investment Expenditure

(in millions of JPY)
  FY2010 FY2009 FY2008
Overall 3,411 1,278 2,289

New Facilities and Refurbishment Plans   (As of Mar. 31 2011)

Planned amount of investment (in millions of yen) Investment plans
3,100 Production equipment to manufacture suspension springs, precision springs, and control cables. Dies and jigs.
North America
120 Production equipment to manufacture control cables.
135 Production equipment to manufacture suspension springs and control cables.
Asia 845 Production equipment to manufacture suspension springs and control cables. New plant building and its equipment.
Manufacturing Facilities in Japan
Total 4,200 -

-The Company announced on Oct. 28 its decision to build a new plant in Indonesia to manufacture automotive coil springs and stabilizers. In an aim to respond to increasing automobile production in Indonesia, its local subsidiary, P.T. Chuhatsu Indonesia (CHI, Kota Bekasi, Jawa Barat) will construct the plant in Suryacipta City of Industry, Karawang Regency with the investment of approx. 900 million yen. The plant site is 30,000 m2 and the building area is 7,000 m2. Production is scheduled to begin late in 2011. (From an article in the Nikkan Jidosha Shimbun on October. 29, 2010)