Nissin Kogyo Co., Ltd. Business Report FY ended Mar. 2019

Financial Overview

(IFRS, in millions of JPY)
  FY ended Mar. 31, 2019 FY ended Mar. 31, 2018 Rate of Change (%) Factors
Sales 189,693 188,221 0.8 -Sales increased, thanks to higher sales of products for motorcycles in Asia and South America and aluminum products in Asia and Japan, although business performance was affected by negative currency translation and lower sales of products for automobiles in China and North America.
Operating income 16,301 13,162 23.8 -
Ordinary income 16,556 (1,173) - -
Profit for the year attributable to owners of the parent 7,344 (8,717) - -
Sales by Segment
-Japan 29,023 26,866 8.0 -Sales rose due to increased sales of aluminum products
-North America 40,688 42,045 (3.2) -Sales fell due to lower sales of products for automobiles and production stoppages by customers in Mexico because of flooding.
-Asia 105,994 106,171 (0.2) -Sales remained at the same level as those of the  year before. Although sales increased in Indonesia, India, and Vietnam, overall sales were impacted by negative currency translation and sales decreases in China.
-South America/Europe 13,987 13,139 6.5 -Sales increased, thanks to a recovery in the Brazilian market and greater deliveries of front and rear interlocking brakes for motorcycles, although sales were impacted by negative currency translation.

Business Reorganization

-Veoneer, Inc. announced that it has signed a binding agreement with Nissin Kogyo, its joint venture partner in Veoneer Nissin Brake Systems (VNBS), providing for certain structural changes to the joint venture and reaching an agreement on the funding of VNBS. Under the agreement Veoneer will acquire Nissin Kogyo’s interests in the US operations of VNBS, referred to as VNBA. VNBS will transfer the technologies to VNBA.  The US operations of VNBS, including the transferred or licensed technologies, will thus become a wholly-owned Veoneer business. In return, effective upon closing, Veoneer will release Nissin Kogyo from any obligations to fund VNBA in the future. The VNBS operations in Japan and China will remain a part of the joint venture, with Veoneer owning 51% and Nissin Kogyo owning 49% of the joint venture. Under the agreement, Nissin Kogyo will either provide guarantees for certain VNBS commercial loans, or contribute capital to VNBS, in either case corresponding to 49% of the funding Veoneer has previously unilaterally provided VNBS. Veoneer expects to receive approximately USD 20 million as debt repayment from VNBS after such funding. (From a press release on June 17, 2019)


Recent Business Developments

-The Company announced that it will close its Sao Paulo Plant in Brazil at the end of April. The business there has become unprofitable due to factors such as inflation and a rise in procurement costs. Although Nissin Kogyo has made efforts to improve the business structure at the plant, the company has assessed that it will be difficult for the plant to improve the structure. The Sao Paulo Plant began operations in October 2008. It produces brake systems and aluminum parts for automobiles. Nissin Kogyo has another plant in Brazil. The supplier produces parts for motorcycles at its Manaus Plant in the country. (From an article in the Nikkan Jidosha Shimbun on February 28, 2019)


Outlook for FY ending Mar. 31, 2020

(IFRS, in million JPY)
  FY ending Mar. 31, 2020
FY ended Mar. 31, 2019
(Actual Result)
Rate of
Change (%)
Sales 187,000 189,693 (1.4)
Operating income 16,700 16,301 2.4
Ordinary income 17,500 16,556 5.7
Profit for the year attributable to owners of the parent 9,500 7,344 29.4

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

R&D Expenditure

(in millions of JPY)
  FY ended Mar. 31, 2019 FY ended Mar. 31, 2018 FY ended Mar. 31, 2017
Overall 4,666 4,805 4,744

-For FY ending Mar. 31, 2020, JPY 4,800 million is planed for R&D expenditure.

R&D Facilities

Country Name of facility Location
Japan Nagano Development Center Tomi City, Nagano Pref.
Tochigi Development Center Nasukarasuyama City, Tochigi Pref.
Thailand Nissin R&D Asia Co., Ltd. Bangkok
China Nissin R&D China - Zhongshan Zhongshan, Guangdong
Nissin R&D China - Chongqing Chongqing
U.S. Nissin R&D USA - East Liberty Ohio
Nissin R&D USA - Milwaukee Wisconsin

Major R&D Achievements in Automobile Parts

Foundation brake development
-In meeting the needs for improving fuel economy and making light-weight products, the Company developed a new-design, low-drag disc brake. Expanding content ratio of lighter weight brakes on more new vehicle models by replacing existing materials with aluminum ones.
-The number of vehicles on which electric parking brakes (EPBs) are being mounted is increasing in line with the electrification of automobiles. The Company is advancing cost-cutting initiatives across all of its product lines, as well as increasing local production outside Japan.

Development of weight reduction technology
-In meeting the requirement for lighter weight products, replace steel suspension parts and brackets with aluminum ones, which will reduce weight between 30-40%.
-The Company is expanding the use of aluminum materials and enhancing its casting technology for front knuckles, automotive products in which input loads are high and cast-iron is general used.

Capital Expenditure

(in millions of JPY)
  FY ended Mar. 31, 2019 FY ended Mar. 31, 2018 FY ended Mar. 31, 2017
Japan 2,630 2,993 2,149
North America 2,280 1,454 3,493
Asia 5,327 5,668 5,448
South America/Europe 216 319 29
Adjustment (92) (175) (173)
Total 10,362 10,258 11,214

-In FY ending Mar. 2020, the Company plans to invest JPY 11,500 million in facilities and equipment.

Planned Capital Expenditure

(As of Mar. 31, 2019)
Company or Office Name Facility type Estimated
amount of
(in millions JPY)
Start Scheduled Completion
Tobu Plant
(Tomi City, Nagano Pref.)
Production facilities 900 Mar. 2019 Aug. 2019
Naoetsu Plant
(Joetsu City, Niigata Pref.)
Production facilities 1,384 Oct. 2018 Mar. 2020
Nagano Development Center
(Tomi City, Nagano Pref.)
R&D facilities 1,303 Mar. 2019 Apr. 2019
Ishii Corporation Co., Ltd.
(Seiro Town, Niigata Pref.)
Production facilities 176 Apr. 2019 Mar. 2020
Nissin Brake Ohio Inc.
(Ohio, USA)
Production facilities 2,009 Jul. 2018 Mar. 2020
Nissin Brake Georgia Inc.
(Georgia, USA)
Production facilities 1,805 Jan. 2019 Mar. 2020
Nissin Brake de Mexico, S.A. de C.V.
(Guanajuato, Mexico)
Production facilities 290 Oct. 2018 Mar. 2020
Nissin Brake (Thailand) Co., Ltd.
(Nakornratchasrima, Thailand)
Production facilities 2,184 Apr. 2018 Mar. 2020
P.T. Chemco Harapan Nusantara
(Cikarang, Indonesia)
Production facilities 649 Apr. 2018 Mar. 2020
Shandong Nissin Industry Co., Ltd.
(Shandong, China)
Production facilities 159 Jul. 2018 Mar. 2020
Zhongshan Nissin Industry Co., Ltd.
(Guangdong, China)
Production facilities 2,920 Jan. 2019 Mar. 2020
Nissin Brake Vietnam Co., Ltd.
(Vinh Phuc, Vietnam)
Production facilities 361 Jan. 2019 Mar. 2020
Nissin Brake India Pvt. Ltd.
(Rajasthan, India)
Production facilities 570 Apr. 2018 Mar. 2020
Nissin Brake Do Brasil Ltda.
(Manaus-Am, Brazil)
Production facilities 303 Jul. 2018 Mar. 2020