Teikoku Piston Ring Business Report FY2007
Business Highlights
| Financial overview | (in millions of JPY) |
| FY2007 | FY2006 | Rate of Change (%) | Factors | |
| Overall | ||||
| Sales | 58,127 | 52,307 | 11.1 | - |
| Operating income | 6,763 | 5,272 | 28.3 | - |
| Ordinary income | 7,137 | 5,849 | 22.0 | - |
| Current net income | 3,884 | 2,751 | 41.2 | - |
| Automotive related product business | ||||
| Sales | 44,834 | 39,383 | 13.8 | <Piston ring business> Sales increased due to increased production and sales in Japan, North America, and China as well as a recovery trend in aftermarket sales. <Cylinder liner business> As part of the Company's efforts for reducing vehicle weight, the Company continues to expand adoption of aluminum engine blocks. As a result, demand for its proprietary casting surface outer liners for aluminum blocks (product name: Aslock) increased. <Sinter products business> The sinter product business achieved good business performance due to continuous strong sales and booming production in Chinese facilities, while demand in Japan remained almost unchanged. <Aluminum products business> The aluminum products business turned profitable as a result of steady increases in sales of motorcycle aluminum wheels. The The company's efforts to improve profitability also bore fruit. |
| Operating income | 5,313 | 3,946 | 34.6 | |
Recent Developments Overseas
<India>
-The Company announced it would establish a new subsidiary to manufacture cylinder liners in India.
>>>See Investment for more details
Divestitures
<China>
-The Company announced that it will dispose its entire stake in Dailian Bo Xin Te Gang Zhipin Co., Ltd (DBX), which processes, manufactures and sells special alloy materials in China.DBX, a joint venture based in Dailian, was established in September 2006 and since then, The Company has maintained its co-owner status with a 34.8% representation. The Company , following the recent review on its overseas operations, has opted to sell all DBX shares it currently holds to a local joint venture partner Anqing Huanxin Group Co., Ltd. (From a press release on Mar. 21, 2008)
R&D
-R&D costs for FY2007 were 1,771 million yen.
Main development achievements(Automotive product business)
Engine components
1) Piston rings
-Development of super low friction rings (to improve power output and fuel economy)
-Development of thin, highly-functional oil rings (to improve durability)
-To build a production line that achieves reducing the production costs of piston rings ??o reduce cost)
2) Cylinder liners
-Development of super thin, light-weight and highly thermal-conductive liners (to improve power output and fuel economy)
3) Valve seats
-Development of highly abrasion-resistant materials used in valve seats (In response to the use of alternative fuels)
Other products
1) Aluminum products: Development of new casting method for aluminum wheels used on motorcycles and installing the facilities
to handle them.
2) Sintered mechanical parts: Development of processing method that improves the accuracy and enhance the strength of shock absorb er, and coupling components
Improvement in R&D infrastructure
-Improvement and expansion of facilities for evaluating the function of each part as well as the performance of each part when mounted on engines
-Working on building a simulation system
-Efforts to develop a support system to assist in developing designs (Piston rings)
Main development achievements(Automotive product business)
Engine components
1) Piston rings
-Development of super low friction rings (to improve power output and fuel economy)
-Development of thin, highly-functional oil rings (to improve durability)
-To build a production line that achieves reducing the production costs of piston rings ??o reduce cost)
2) Cylinder liners
-Development of super thin, light-weight and highly thermal-conductive liners (to improve power output and fuel economy)
3) Valve seats
-Development of highly abrasion-resistant materials used in valve seats (In response to the use of alternative fuels)
Other products
1) Aluminum products: Development of new casting method for aluminum wheels used on motorcycles and installing the facilities
to handle them.
2) Sintered mechanical parts: Development of processing method that improves the accuracy and enhance the strength of shock absorb er, and coupling components
Improvement in R&D infrastructure
-Improvement and expansion of facilities for evaluating the function of each part as well as the performance of each part when mounted on engines
-Working on building a simulation system
-Efforts to develop a support system to assist in developing designs (Piston rings)
Investment Activities
-The Company made a capital investment of 4,892
million JPY in fiscal year 2007, ending in March 2007, mainly to install
facilities in order to increase its production capacity as well as to streamline
its production facilities. Part of the investment was made for environmental
measures such as those needed to enhance earthquake reinforcing.
-For the automotive product business, the Company made a capital investment of 4,099 million JPY mainly for increasing its production capacity for piston rings and cylinder liners, and rationalizing operations to achieve cost reductions.
-Other investments of 792 million yen were made in other businesses for streamlining as well as maintaining and upgrading production facilities.
Overseas Investments
-The Company announced it would establish a new subsidiary to manufacture cylinder liners in India, around November 2007, in response to the growing demand for cylinder liners in line with accelerated localization of the automotive engine production in the nation. The new, wholly-owned subsidiary, tentatively named "TPR Autoparts (India) Private Ltd." will be capitalized at the equivalent of 1.2 billion Indian Rupees (yet to be finalized). The total investment is expected to reach 1.9 billion yen. The new subsidiary, which will engage in the production and sales of cast-iron cylinder liners, plans to attain targeted revenue of 1.2 billion yen in 2010. Operations are scheduled to start in July 2009. (From a press release on Oct. 22, 2007)
New facilities (Automobile related product business)
Facility refurbishment (Automobile related product business)
-For the automotive product business, the Company made a capital investment of 4,099 million JPY mainly for increasing its production capacity for piston rings and cylinder liners, and rationalizing operations to achieve cost reductions.
-Other investments of 792 million yen were made in other businesses for streamlining as well as maintaining and upgrading production facilities.
Overseas Investments
-The Company announced it would establish a new subsidiary to manufacture cylinder liners in India, around November 2007, in response to the growing demand for cylinder liners in line with accelerated localization of the automotive engine production in the nation. The new, wholly-owned subsidiary, tentatively named "TPR Autoparts (India) Private Ltd." will be capitalized at the equivalent of 1.2 billion Indian Rupees (yet to be finalized). The total investment is expected to reach 1.9 billion yen. The new subsidiary, which will engage in the production and sales of cast-iron cylinder liners, plans to attain targeted revenue of 1.2 billion yen in 2010. Operations are scheduled to start in July 2009. (From a press release on Oct. 22, 2007)
New facilities (Automobile related product business)
| Name/ Name of the business (Location) |
Type of facility and purpose | Planned investment (million JPY) |
Planned construction start date | Planned completion | Increased capacity upon completion |
| Head office Nagano factory | Facilities for piston rings | 1,087 | 2008.4 | 2009.3 | 3% increase |
| Head office Gifu factory |
Facilities for sintered valve seats | 41 | 2008.4 | 2009.3 | 10% increase |
| Teipi Industries Co., Ltd. | Facilities for cylinder liners | 400 | 2008.4 | 2009.3 | 10% increase |
Facility refurbishment (Automobile related product business)
| Name/ Name of the business (Location) |
Type of facility and purpose | Planned investment (million JPY) |
Planned construction start date | Planned completion | Increased capacity upon completion |
| Nagano Plant | Rationalizing facilities for piston rings | 1,223 | 2008.4 | 2009.3 | None |
| Gifu Plant | Rationalizing facilities for sintered valve seats | 282 | 2008.4 | 2009.3 | |
| Teipi Industries Co., Ltd. | Rationalizing facilities for cylinder liners | 1,000 | 2008.4 | 2009.3 |