NGK Spark Plug Co., Ltd. Business Report FY2010

Business Highlights

Financial Overview

(in millions of JPY)
FY2010 FY2009 Rate of
Sales 269,232 243,914 10.4 -
Operating income 28,770 10,683 169.3 -
Ordinary income 27,379 10,758 154.5 -
Current net income 23,680 13,509 75.3 -
Sales 197,213 166,066 18.8

Sales and operating income at the Automotive Division increased from the previous year’s results. - Although its revenues decreased due to the impact of the yen appreciation, sales were supported by improvements in global automakers’ capacity utilization rates and strong demand from the emerging markets.

- Business improved as a result of the Company’s capacity expansion program to meet surging demand from customers.

Operating income 31,943 15,625 104.4

Business Restructuring

-The Company announced on Oct. 29 its decision to restructure the overseas subsidiaries. It will reorganize subsidiaries in the U.S. and Europe in order to improve productivity and business efficiency and integrate the command channel. In the U.S., it will merge two manufacturing operations of NGK Spark Plugs (U.S.A.), Inc. by integrating the Irvine Factory, California, into the West Virginia Factory. It will transfer the facilities between October and May 2011 and cease operations at the Irvine Factory at the end of May 2011. In Europe, the company has a sales company in Germany and a sales company and a manufacturing company in France. With NGK Spark Plugs (France) S.A.S as a surviving company, it has integrated production and sales in France through merger of NGK Spark Plug Industries Europe S.A.S. in September. Acquisition of the new, merged NGK Spark Plugs (France) S.A.S. by NGK Spark Plug Europe GmbH, Germany, is scheduled for January or February in 2011. In order to continue the business, no downsizing nor closure of these operations are planned. NTK Technical Ceramics Polska Sp.z o.o., its subsidiary in Poland with 50 employees, is slated for completion of liquidation in June 2011. These subsidiaries in the U.S. and Europe, including some through indirect investment, are 100% owned by NGK Spark Plug Co., Ltd. (From an article in the Nikkan Jidosha Shimbun on November. 1, 2010)

>>>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 enhance its marketing activities by leveraging its extensive global network.  
- To reduce cost by implementing a mutual supply system, while looking to establish an optimum global production structure.


R&D Expenditure

(in millions of JPY)
  FY2011 FY2010 FY2009
Overall 15,763 13,907 17,575
R&D expenditures, excluding costs for upgrading current products; and applied research 3,152 2,468 2,876
Automotive  828 843 1,231

-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

Spark plugs
-The Company further enhanced high-temperature tolerance and high ignition performance. It also developed smaller and wider-ranging products.

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.

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.

-Hydrogen gas concentration sensors for fuel cells

-Sensors for detecting hydrogen leakage and other sensors

-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.

- NOx sensors integrated with advanced control circuit.

Other technologies
-The Company developed and commercialized ignition units for improving the durability of plugs for gasoline engines.

-The Company developed 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 the Premium RX Plugs with an advanced PSPE (Projected Square Platinum Electrode (PSPE) system. The new spark plugs also offer high levels of ignition performance and durability.

Glow plugs
-The Company developed super fast ceramic heater elements, which offer excellent heating performance that is twice as high as its existing products.  

Investment Activities

Capital Investment

(in millions of JPY)
  FY2010 FY2009 FY2008
Overall 8,767 10,977 24,173
Automotive 6,365 7,325 16,154

(As of Mar. 2011)Installation of New Equipment

(in millions of JPY)
  Planned amount of investment Purpose of investment

Headquarters/Automotive business

11,162 Production expansion, Installing R&D equipment
Subsidiaries in Japan - automobile-related business 446 Retooling, Installing maintenance equipment
Subsidiaries overseas - automobile-related business 2,019 Production expansion, Installing maintenance equipment


New plant project 

(in millions of JPY)
  Planned amount of investment Overview of new facility

Kagoshima-Miyanojo Factory

2,940 Production of insulation for spark plugs