Tokai Rubber Industries. Ltd. Business Report FY2009

Business Highlights

Financial Overview

(in millions JPY)
  FY2009 FY2008 Rate of Change (%) Factors
Sales 234,131 274,392 (14.7) -
Operating income 10,799 6,079 77.6 -
Ordinary income 9,314 5,376 73.3 -
Current net income 3,579 1,141 213.7 -
Rubber product business
Sales 194,484 224,733 (13.5) -Despite the Company's all-out efforts to develop new sales channels and increase sales of environmentally friendly, anti vibration rubber and hoses, sales of its rubber products decreased year-on-year because of decreased vehicle production.
Operating income 9,813 4,822 103.5 -

Recent Developments in Japan

-The Company said that it will consolidate its production sites in Japan for production of anti-vibration rubber products for automobiles. A major supplier of automotive rubber products will close its Okayama Plant at the end of Mar. 2010 and move its production to TRI Kyushu in Bungo Takada, Oita Prefecture and Komaki Plant in Komaki, Aichi Prefecture. In the midst of the drastic downturn in the economy that has been continuing since 2008 and the dramatic decline in global automobile production, TRI has a problem of excess production capacity of anti-vibration rubber products for use in automobiles. (From an article in the Nikkan Jidosha Shimbun on Aug. 25, 2009)

Recent Developments Outside Japan

<North America>
-The Company announced that it will reorganize its automotive hose production operations in North America. From August 2010, its hose manufacturing operations at three plants in Ohio, Tennessee, and Mexico will be consolidated into two, Tennessee and Mexico, while some will be shifted to China. In December it will start transferring all the automotive hose production at DTR Industries, Inc., its subsidiary in Ohio, and a part of the production at DTR Tennessee, Inc. in Tennessee, gradually to its manufacturing subsidiaries in Mexico, Dalian and Guangzhou, China. (From an article in the Nikkan Jidosha Shimbun on Oct. 10, 2009)

-The Company announced that it will establish a new production base for anti-vibration rubber for automotive applications in the suburbs of Bangalore, India. Shipment is scheduled to start in 2010. In May 2008, the Company formed a project office for the anti-vibration rubber plant in India and established a 100% subsidiary, Tokai Rubber Auto-Parts India Private, Ltd. (TRIN). With its automotive anti-vibration rubber business taking hold in India, the Company aims to achieve 230 million INR (approx. 450 million yen) sales in FY 2011. TRIN is located at the 6,800 m2 site of Doddaballapura industrial area in Karnataka. The building covers an area of 1,300 m2. The number of employees is expected to be about 20 by the end of 2010. With this new plant, the Company will have 10 operations for automotive anti-vibration rubber in six overseas countries. (From an article in the Nikkan Jidosha Shimbun on Dec. 1, 2009)

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


R&D Expenditure

(in millions JPY)
  FY2009 FY2008 FY2007
Rubber products business 6,241 6,727 6,305

R&D Structure

-In addition to conducting basic development projects at its Technopia center based on the collaboration between its materials development center and new business development center, the company is working to expand into new business fields by making full use of a new facility it established within the business development center in May 2009. It is carrying out its development projects based on the collaboration between the business and R&D divisions.

Technical tie-up

(As of Mar. 31, 2010)

Automotive anti-vibration rubber business
-Technical tie-up with Trelleborg AB (publ) in Sweden

Automotive hose business
-Technical tie-up with Hutchinson S.N.C. in France

Investment Activities

Capital Expenditure

(in millions JPY)
  FY2009 FY2008 FY2007
Overall 10,277 27,437 28,487
Rubber Products Business 8,448 20,548 22,696

-The Rubber Products Business invested both in Japan and overseas mainly to upgrade equipment used for producing anti vibration rubber and hoses.