Chuo Spring Co., Ltd. Business Report FY ended Mar. 2013

Business Highlights

Financial Overview

(in millions of JPY)
  FY ended Mar. 31, 2013 FY ended Mar. 31, 2012 Rate of Change
Sales 82,050 76,693 7.0 -
Operating income 1,204 1,202 0.2 -Income increased year-on-year as a result of the Company’s enhancing productivity, procuring more materials and parts locally, and implementing effective cost-cutting initiatives.
Ordinary income 2,504 1,584 58.1
Current net income 1,288 717 79.6

Factors by Region
-As a result of higher sales of new vehicles that were attributed to the recovery in business after the Great East Japan Earthquake and to the eco-car sales incentive programs, operating revenue increased 0.8% year-on-year and operating profit increased 1.1% year on year.

<North America>
-Even though operating revenue increased 41.2% year-on-year because of increased sales of new vehicles, the region posted a loss for the year because of negative currency translation and higher expenses incurred for raw materials and labor.

- Even though operating revenue increased 3.3% year-on-year because of increased sales of new vehicles, the region posed a loss for the year because of the anti-Japanese demonstrations that called for a boycott of Japanese-brand products and because of higher labor costs.

- As a result of the robust markets in Indonesia and Taiwan that lead to higher sales of new vehicles, operating revenue increased 38.3% year-on-year. However, the region posted a 18.4% drop in profit because of higher costs for materials and labor expenses.

Joint Ventures

-The Company announced that it has signed an agreement with China Spring Corporation Limited to establish a 50-50 joint venture in Xiaogan, Hubei Province, China. The new company, Xiaogan Zhongxing Automotive Components Co., Ltd., will be engaged in supplying automotive suspension springs to vehicle manufacturers in the Central and South China. Capitalized at 60 million yuan, approximately 800 million yen, the new company will have a plant with a floor area of about 6,900 square meters. Production is scheduled to start in May 2014. (From a press release on February 8, 2013)


-The Company announced on July 30 it has completed acquisition of a 100 percent stake in ACK Controls, Inc. based in Glasgow, Kentucky, the U.S. Complying with an offer from the partner Dura, a local auto parts supplier in Michigan, to sell shares it holds in ACK Controls, Chuo Spring purchased a 12.7 percent stake on July 11, which increased its equity in ACK from the previous 87.3 percent to 100 percent. ACK was founded in 1989 and manufactures and supplies automobile control cables primarily to Toyota, Honda and the Aisin group. Its sales amounted to 4.1 billion yen in fiscal 2011. Chuo Spring agreed to accept the offer, expecting a 100 percent ownership of the joint venture will increase flexibility in its North American strategy. (From an article in the Nikkan Jidosha Shimbun on July 31, 2012)


-The company announced that it has received the "Technology & Development Award" from Toyota for the fourth consecutive year. (From a press release on February 25, 2013)

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


R&D Expenditure

(in millions of JPY)
  FY ended Mar. 31, 2013 FY ended Mar. 31, 2012 FY ended Mar. 31, 2011
Overall 293 307 305

R&D Facilities

-Technical Center (Aichi Pref., Japan)

R&D Activities

Suspension Spring Business
-Last year the Company upgraded its stabilizer production line, which has a "zero-emission" painting process to reduce environmental impact, and is now producing the stabilizers.
-Last year, the Company started producing coil-springs using the same production process mentioned above on its cold-formed, coil-spring production line. It is now delivering coil-springs for suspensions mainly used on a variety of hybrid vehicles, which make use of lateral-force-control technology that enhances both steering stability and riding comfort.
-The technology that it developed can be applied not only to coil springs but also to other types of product items.
-In Japan, it is mainly developing high-strength materials and enhancing its processing operations in order to make products lighter and stronger. Outside Japan, it is continuing to develop and make use of low-cost materials in order to maintain its competitive advantage.

Precision Spring Business

-The Company is continually conducting activities to enhance its design elements, aiming to increase its products' commercial appeal and competitive advantages. These will enable the Company to use reasonable and low-cost materials overseas. Positive results and innovation based on its production methods area already being achieved.

-Ring products increased, which enhance performance and quality on each and every product that is manufactured by using the new production technology, i.e., the compact production line, for which the Company was awarded the Toyota Technical Development Award. Next year, the Company plans to expand this production technology to its plants outside Japan.
-The Company is working to enhance the performance of materials and make them lighter by adding a new production method to specialty materials.
-As a new product development, the Company is finding new ways to use springs in which technology to lower fuel consumption is used.

Cable Business
-The Company focused on the timely delivery of smaller, lighter, and safer products.
-The Company's CAE prediction technology is designed to increase the level of perfection of drawings at the early stage of design.
-A new-concept, compact, and streamlined assembly line creates low-cost but high-quality products because of its high efficiency.
-The Company continued procuring more materials in local areas, achieving enhanced cost performance globally through combining technology on wire-drawing and wire-twisting with the compact assembly line mentioned above.

Technological Alliance

-The Company and NHK Spring Co., Ltd. announced that they have signed a cross-license agreement to allow the companies to use a subset of each other's patents for coil springs and stabilizers. These components are used in automotive suspension systems. (From a press release on January 17, 2013)

Technology licensing-out Agreement

(As of Mar. 31, 2013)
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
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)
  FY ended Mar. 31, 2013 FY ended Mar. 31, 2012 FY ended Mar. 31, 2011
Overall 6,661 3,835 3,411


Planned Capital Investments

(As of Mar. 31 2013)
Planned amount of investment (in millions of yen) Investment plans
Japan 1,800 Production equipment to manufacture suspension springs, precision springs, and control cables. Dies and jigs.
North America 450 Production equipment to manufacture control cables, precision springs.
China 900 Production equipment to manufacture suspension springs, precision springs and control cables.
Asia 1,550 Production equipment to manufacture suspension springs, precision springs and control cables.
Total 4,700 -