Nippon Piston Ring Co.,Ltd. Business Report FY2010

Business Highlights

Financial Overview

(in millions of JPY)
Mar. 2011)
FY2009 Rate of
Sales 47,411 39,035 21.5
Operating income 4,195 (610) - -
Ordinary income 3,298 (1,163) - -
Current net income 1,666 (2,787) - -
Automotive Parts Division
Sales 41,768 34,605 20.7
Sales increased year-on-year, thanks to a recovery in vehicle production in Japan and strong demand from overseas
Operating income 3,736 (806) - -

Business Restructuring

The Company announced reorganization of its consolidated subsidiaries in the U.S. as of Jan. 1, 2011. NPR US Holdings, Inc. will merge its affiliates, NPR of America, LLC (NOA), NPR Manufacturing Kentucky, LLC (NMKY) and NPR Manufacturing Michigan, LLC (NMMI) and rename the surviving company NPR of America, Inc. It aims to enhance customer service and improve management efficiency through the merger of consolidated subsidiaries. NPR of America, Inc. will manufacture piston rings and valve seat inserts and sell internal combustion engine parts. (From an article in the Nikkan Jidosha Shimbun on November 30, 2010)

The Company announced it will sell its total stake in its 100 percent owned subsidiary NPR Shimane Co., Ltd. based in Shimane Prefecture to Nitto Kogyo Corporation based in Osaka, effective on March 31, 2011. NPR Shimane manufactures cast components like camshafts, tappets and cylinder liners, and owns casting technologies on manufacture of components of internal combustion engines. Nippon Piston Ring purchases part of components of internal combustion engines from Nitto Kogyo, while it purchases camshafts and cylinder liners from NPR Shimane. It will continue with this transaction with NPR Shimane, even after transfer of the operation. (From an article in the Nikkan Jidosha Shimbun on February 26, 2011)

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


R&D Expenses

(in millions of JPY)
  FY2010 FY2009 FY2008
Overall  1,280 1,290 1,508
Automotive Parts Division  1,229 1,238 1,448

R&D Activities

1. Piston rings for aluminum bores
-Traditionally, European automakers have made use of technology developed for producing aluminum cylinders. However, recently Japanese engine makers also are using this same technology to commercially produce engines designed for North America and Japan, reflecting the fact that aluminum cylinders are lighter, more fuel efficient, and easily recyclable. The Company is collaborating with new users of this technology in developing products and preparing for mass-production. However, the Company found some technical problems that are unique to aluminum bores. In order to solve these problems, the Company is now trying to develop technology to mass-produce piston rings in which advanced technology will be applied.

2. High-performance piston rings
-The Company established the technology to make low tension piston rings that produce an adequate sealing capacity. This contributes to making engines more fuel efficient. The Company also completed development of technology for commercial production of piston rings offering improved fuel efficiency, output, and heat conductivity.

3. Highly durable piston rings for diesel engines
-In order to meet the needs of users who are required to comply with diesel emission regulations, the Company increased the mass-production of piston rings being coated with PVD, which has proven to be highly resistant to scuffing and wear. To comply with Euro-Vi, US10, and other regulations enacted to control exhaust emissions and improve the fuel economy of heavy-duty vehicles, the Company has developed technology that can be used in the commercial production of piston rings that emit clean emissions and ensure a high fuel economy. The Company is preparing to mass-produce these pistons rings.

3. Valve seats
-The Company began developing several types of valve seats ahead of its competitors. For gasoline engines, the Company is developing valve seats that meet the requirements for better fuel efficiency; and for diesel engines, it's developing valve seats that meet emission control regulations. Also, as there are more engines running with bio-alcohol such as E85, the Company is designing valve seats for these types of engines.

4. Assembled sintered camshafts
-The Company developed camshafts for high performance gasoline engines equipped with VVT (variable valve timings) mechanisms. It also developed camshafts for diesel engines being equipped on passenger cars and commercial trucks. A greater number of mass-marketed vehicles are being equipped with these new products.

5. MIM products
-The Company developed products manufactured under the MIM method. These products have a superior, soft magnetic property. Using this method, these products can be produced at low cost by utilizing technology designed for materials and sintering. Both materials technology and sintering technology are the Company's core technologies. The Company plans to increase the production volume of fuel injector parts.

6. New sintered parts
-The Company solved problems concerning the strength of conventional cast iron products. In order to respond to the needs for stronger performing aluminum engine blocks, the Company developed a highly adhesive, iron-based sintered alloy and combined it with aluminum. Now the Company is trying to make it even lighter and lower in cost.

7. Cylinder liners
-The Company developed technology that can be applied to commercially produce liners designed for diesel engines that comply with the new long-term diesel emissions regulations.  The Company has already completed the specifications needed to start commercial production. Also, the Company is now developing and evaluating low friction liners using the Company's proprietary tribology technology, in order to meet future regulations on emissions and fuel economy.

R&D Plans

The Company will focus its research and development on new product lines such as powertrain parts not related to engines and non-automotive products in an attempt to expand its customer base. It will embark on activities to achieve a long-term objective of increasing share of non-engine parts to 30 percent in total sales in 2030. Since demand for automobiles is expected to be growing in new emerging countries like BRICs, it is assumed that conventional engine-powered vehicles will be still dominating in global automotive markets. Nippon Piston Ring aims to construct a solid management structure by expanding application of its expertise acquired through development of its core products, such as piston rings and valve seat inserts, to new products. In the electric powertrain area, the company will pursue research and development for launching new products like power semiconductors and motor-related parts. In the non-automotive area, it will continue efforts for introducing new medical devices and industrial equipment. (From an article in the Nikkan Jidosha Shimbun on Jun. 24, 2010)

Technology licensed-out

(As of Mar. 31, 2011)

Name of the licensed company Country Date Details Term of contract
Sejion Cam Co., Ltd. Korea Jul. 01, 2000
Sintered camshaft production methods Seven years after the start of mass-production (To be annually renewed after the term)
Henan Zhongyuan Engine Fitting Co., Ltd. China Sep. 02, 2005 Cylinder liner production methods Until the Company no longer supplies the products
Yizheng Shuang Huan Piston Ring Co., Ltd China Dec. 27, 2005 Piston ring production methods Seven years
IP Rings Ltd.
Dec. 01, 2003
Oil ring assembly production methods
Eight years
IP Rings Ltd.
Feb. 21, 2008
Steel ring production methods
Five years
IP Rings Ltd.
Apr. 01, 2008
Manufacturing methods of chrome plated rings
Five years
IP Rings Ltd.
Dec. 22, 2008
Steel ring production methods
Six years
IP Rings Ltd.
Mar. 01, 2010
Nitrogenous ring production methods
Five years
IP Rings Ltd. India Apr. 01, 2010 Oil ring production methods Five years

Investment Activities

Capital Expenditure

(in millions of JPY)
  FY2010 FY2009 FY2008
Overall  1,642 1,519 4,262
Automotive Parts Division  1,466 1,404 4,032

-The Automotive Parts Division made a capital investment in order to maintain and/or upgrade existing facilities.

Planned Capital Investments

(As of Mar. 31, 2011)

Name Location Type of facility Planned total investment (in millions of JPY) Construction start month Planned completion month Capacity upon completion
NPR of America, Inc.
(Kentucky Manufacturing Plant)
Construction of new plants 5,500 May
18 million