HI-LEX Corporation Business Report FY2009

Business Highlights

Financial Overview

(in millions of JPY)
  FY2009 FY2008 Rate of Change
Sales 94,861 132,949 (28.6) 1)
Operating profit 2,759 8,274 (66.6) -
Ordinary profit 2,372 8,963 (73.5) 2)
Net profit 1,171 7,156 (83.6) -

Control cables
-Sales of control cables decreased in both Japan and North America.

Window regulators
-Sales of window regulators to Korean and North American automakers decreased.

-Sales dropped 33.9 percent year-on-year due to a large fall in vehicle production in Japan.

<North America>
-Impacted by production stoppages at plants of U.S. automakers, its major customers, sales decreased 29.3 percent year-on-year.

-Sales declined 15.3 percent year-on-year. Although the Chinese and Indian automotive markets plummeted at one time, they quickly recovered so that? the yearly sales in the region were prevented from dropping more sharply.

-Sales fell 40.5 percent year-on-year in "other regions". Some of the major factors behind the decrease were the company's major customers ceasing production, as well as the company reducing its production volume and adjusting its inventories in countries including the U.K.

-Losses incurred from negative foreign currency translation totaled 1,186 million yen.

Reinforcement of Business Structure

-The Company is strengthening activities for fostering suppliers. In Japan, several groups consisting of suppliers dedicated to various products in such areas as wires, stamping parts and plastic moldings, will be organized to help them exchange their successful experiences and expertise across industries for quality improvement. Overseas, mainly in Asia, the Company is giving training and assistance to suppliers of low production costs so that they can heighten their quality levels to those of Japanese companies with the aim of achieving a 100 percent localization rate and global universal quality. Based on universal quality established globally the Company has an intention of responding to the volatile currency fluctuation more flexibly. This is part of the project to raise local purchasing rate by expanding quality improvement activities it has been conducting among its own plants to outside suppliers. (From an article in the Nikkan Jidosha Shimbun on Mar. 17, 2009)

Major Plans for Fiscal Year 2010 and After

1. China
1)The Company established Changchun Hi-Lex Auto Cable System Co. Ltd. In January 2010, the new subsidiary started producing products for customers located in northeast China.

2. Korea
Daedon Hi-Lex started building a new plant in Kwangju. (Operations are scheduled to start in April 2010.)

Outlook for FY2010

(in millions of JPY)
  FY2010 FY2009 Year-on-year increase (decrease)
Sales 98,600 94,861 3,739
Operating income 5,670 2,759 2,911
Ordinary income 5,800 2,372 3,428
Net income 3,710 1,171 2,529
Investment Expenditure 3,332 3,962 630


Breakdown of Sales by Location

(in millions of JPY)
  FY2010 FY2009
Japan 50,600 47,802
North America 28,000 29,828
Asia 32,000 28,243
Others 3,600 3,463
Total 114,200 109,338
Consolidated elimination (15,600) (14,476)
Consolidated 98,600 94,861


Sales and Operating Income at Major Subsidiaries

  FY2010 FY2009
Sales Operating income Sales Operating income
Hi-Lex America Inc.
(in thousand dollars)
87,263 3,497 81,520 (576)
Hi-Lex Controls
(in thousand dollars)
195,074 4,875 189,948 296
Hi-Lex Mexicana
(in thousand dollars)
64,043 1,872 64,401 (869)
Hi-Lex Cable System
(in thousand pounds)
18,975 373 15,825 (1,898)
TSK (Korea) Co., Ltd. (in million won) 42,906 11,076 29,830 7,091
Daedong Hi-Lex Inc. (in million won) 81,371 2,610 57,876 1,912
Chongqing Hi-Lex Cable System Group Co. Ltd. (in million yuan) 518,006 46,846 590,475 61,304
Chongqing Hi-Lex Control Cable System Co. Ltd.
(in million yuan)
95,291 14,633 78,732 14,195
Guangdong Hi-Lex Cable System Co. Ltd.
(in million yuan)
250,994 12,624 186,339 4,152
Yantai TSK Cable System Inc.
(in million yuan)
115,969 5,942 103,750 3,850
PT. Hi-Lex Indonesia
(in million rupiah)
520,581 71,816 445,667 48,514
Hi-Lex India (in Rs. Million) 1,087.4 32.6 913.8 34.3


R&D at Major Subsidiaries

  FY2010 FY2009
Hi-Lex America Inc. (in thousand dollars) 1,000,000 300,000
Hi-Lex Controls (in thousand dollars) 2,220,000 2,850,000
Hi-Lex Mexicana (in thousand pesos) 730,000 1,470,000
Hi-Lex Cable System (in thousand pounds) 788 695
TSK (Korea) Co., Ltd. (in million won) 846 611
Daedong Hi-Lex Inc. (in million won) 8,014 2,954
Hi-Lex India (in Rs. Million) 162 148
Hi-Lex Kanto (in million yen) 38 1
Hi-Lex Saitama (in million yen) 24 69
Hi-Lex Shimane (in million yen) 41 31
Izushi Cable (in million yen) 11 48


R&D Expenditure

(in millions of JPY)
  FY2009 FY2008 FY2007
Overall 701 1,035 1180

R&D Activities

-In order to support automakers' initiatives to engineer lighter vehicles, the company is working on developing lightweight inner cables and outer casings made of nonferrous metals and plastics.

<SPI-LAX cables>
-Hi-Lex's SPI-LAX cables with hollow urethane tubes provide a superior level of noise insulating capability. They can be used also in sunroof systems made of plastics.

<Rail-less window regulators>
-Hi-Lex Controls Inc., the Company's U.S. subsidiary, developed rail-less window regulators that eliminate the need for guide rails. These rail-less window regulators weigh only 300g ( excluding motor weight), which is only half the weight of conventional window regulators with guide rails. These more simple regulators also can be installed more easily on doors.

Future Development Programs

(starting from the fiscal year ending in Oct. 2011 and after)
New products and technologies
-Cable-less technologies for electronic and electric products
Power slide door systems
Power lift gate systems
Power assist parking brakes
Power automatic transmissions
Manual transmissions

-New technologies
Irregularly shaped inner cables
New-design geared wires
Splitter seat cables
Lower end drive window regulators

Investment Activities

Capital Expenditure

(in millions of JPY)
  FY2009 FY2008 FY2007
Overall 3,962 7,990 6,912

-The spending was centered on introducing and renewing production machinery and tools at each plant.
-During FY2009 at Chongqing HI-Lex Cable System Group Co., Ltd., the Company completed a new factory and also a project involving the installation of new equipment. It also finished building a new factory at Guangdong Hi-Lex Cable System Co. Ltd.

Investments by Segment

(in millions of JPY)
  FY2009 FY2008 FY2007
Control Cable Division
Japan 285 779 623
North America 157 323 637
Asia 964 757 485
Europe N.A. 197 677
Window Regulator Division
North America 273 1,250 2,146
Asia * 711 864 890
*Investment was focused on China and Korea

Capital investment plans for FY2010

Company name Business segment Type of project Planned
investment (in million yen)
Project period Capacity increase upon completion
From To
Changchun Hi-Lex Auto Cable System Co. Ltd.
(Jilin, China)
Control cables, window regulators, etc. New plant and new facility 314 Jan. 2008 Jan. 2010 -