NGK Spark Plug Co., Ltd. Business Report FY2009

Business Highlights

Financial Overview

(in millions of JPY)

FY2009 FY2008 Rate of
Sales 243,914 292,121 (16.5) -
Operating income 10,683 (5,222) - -
Ordinary income 10,758 (7,528) - -
Current net income 13,509 (71,669) - -
Sales 166,066 186,684 (11.0) 1)
Operating income 15,625 21,535 (27.4)

Automotive parts business
-Sales and operating profit at the automotive division decreased year-on-year due to the following factors:
In the first half of the year, business was badly affected by the impact of the rapid slowdown in both the OEM and after-sales markets in the automotive industry, which started in the fall of 2008. Sales recovered at a faster-than-expected pace in the second half of the year, supported by increased demand for new vehicles in response to incentive programs introduced in many countries. Business was also buoyed by strong demand in emerging countries, which were fast to recover from the global recession. The improvement, however, was not enough to offset the sharp fall the Company experienced in the first half of the year.

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


The Fifth Medium-term Business Plan

Basic policies
-To enhance its existing business structure and foundation by strengthening its manufacturing capability
-To develop products based on its new R&D structure, inspiring to pass them on to the next generation.
-To reinforce its organizational power through the strategic use of its human resources.

-To lay the foundations to developing new businesses, while enhancing its existing lines of business

-To launch new products and businesses

-To accelerate development of both its existing and new business areas

Financial Targets

(in billions of JPY)
  FY2012 FY2011 FY2010 FY2009


295.0 277.5 255.5 243.9
Operating profit 41.0 33.3 21.5 10.7
Net profit 24.0 24.8 18.5 13.5

Business plans at the automotive division
-To ensure the Company maintains its competitive edge over other suppliers in terms of technical capabilities.
-To work on developing and designing products that can be produced at lower cost.
-To further increase its share in the international market by optimizing its global production structure.


R&D Expenditure

(in millions of JPY)
  FY2009 FY2008 FY2007
Overall 13,907 17,575 17,444
R&D expenditures, excluding costs for upgrading current products; and applied research 2,468 2,876 2,972
Automotive 843 1,231 1,652

-The Company conducts research and development activities and projects mainly at the technical development division and at the technical departments of  all its business units. It is learning and introducing cutting edge technologies by joining domestic Japanese and international academic meetings and associations, and carrying out joint research programs with universities and public research institutes.

R&D Activities

-In the spark plug segment, the Company further enhanced high-temperature tolerance and high ignition performance. It also developed smaller and wider-ranging products.

-In the segment of glow plugs for diesel engines, the Company developed plugs with a longer life and superior temperature rise characteristics. It also developed a temperature control system for plugs.

In the sensor segment, the following products were developed in response to new exhaust emission regulations:
-Various types of exhaust emission sensors including the oxygen sensor and full-range air-fuel ratio sensor.
-Various types of temperature sensors including a wide-range temperature sensor.
-Sensors that sense the level and concentration of urea water used in the SCR system that is effective in reducing NOx emissions in diesel engines.
-Hydrogen gas concentration sensors for fuel cells
-Sensors for detecting hydrogen leakage and other sensors

-The Company not only developed plugs and sensors themselves, but also developed and commercialized ignition units for improving the durability of plugs for gasoline engines.

-The Company is developing the next generation ASIC (Application Specific Integrated Circuit) for full-range air-fuel ratio sensors that have an interface function with an engine control circuit in automobiles.

Product Development

Spark plugs
-The Company developed PSPE (Projected Square Platinum Electrode) spark plugs  for supercharged, small engines. These plugs can withstand a high heat environment, while still achieving excellent ignition performance that is highly required by the Company's major customers.

Glow plugs
-Requirements increased for both long-life, rapid-heating metal glow plugs and glow controllers.

Gas sensors
- The Company developed NOx sensors with a control circuit. These sensors, which are highly effective at detecting minute levels of NOx, are designed to support advanced combustion control and exhaust-gas after-treatment technologies for the next generation.

-The Company announced that it has established manufacturing and evaluation technologies for a several hundred watts module in which micro-tube type SOFCs (Solid Oxide Fuel Cells) that can be used for vehicles are integrated. The module is intended to be used for an auxiliary power for an air-conditioner of a long-haul truck and for a small-scale cogeneration system. Jointly with AIST (Advanced Industrial Science and Technology), FCRA (Fine Ceramics Research Association) and Toho Gas Co., Ltd., the Company has developed a compact, low-temperature operational fuel cell module by raising the integration degree of the SOFC, whose challenge is supposed to be high integration. The module consisting of two integrated SOFC units with 90 cells in total has achieved a high power density of 2 W/cm3, power efficiency of over 40% and over 50 watts output. Its integration degree (electrode area) per unit volume is the world's highest level, according to the Company. (From an article in the Nikkan Jidosha Shimbun on Sep. 14, 2009)

Investment Activities

Capital Investment

(in millions of JPY)
  FY2009 FY2008 FY2007
Overall 10,977 24,173 63,231
Automotive 7,325 16,154 24,840

-During FY2009, the Company invested mainly in renewing its major production equipment.

(As of Mar. 2010)Installation of New Equipment

(in millions of JPY)
  Planned amount of investment
Automotive business 5,478
Subsidiaries in Japan - automobile-related business 370
Subsidiaries overseas - automobile-related business 2,302
Total 11,700