MEIWA INDUSTRY CO., LTD. Business report FY2006

Business Highlights

Financial overview
In million JPY FY2006 FY2005 Rate of Change (%) Factors
Sales 19,749 19,848 (0.5) -Sales increased in the automotive components division, but decreased in the civil engineering construction materials division and the property division.
Operating income 127 538 (76.4) -Income decreased due to materials price increases and depreciation expenses incurred in connection with constructing production facilities at the new plant in Gifu; as well as in the Kyushu area.
Ordinary income 121 547 (77.9)
Current net income 161 391 (58.7) -The Company posted a 297 million JPY extraordinary income but a 124 million JPY extra ordinary loss incurred for canceling a lease at an idle plant. 
Automotive components Division
Sales 15,708 14,480 8.5 -Though sales of glass run channels, seat back panels, trim for door interiors, and some other products decreased, those of trim for trunk interiors and floor interiors; and roofs, etc. increased.
Operating income (7) 320 - -Operating income decreased due to materials price increases, depreciation expenses connected with new plants, and other factors.

Domestic business in Japan
The Company will begin operating its Gifu plant (located in Kani-gun, Gifu Prefecture) on August 1, 2006. The new plant, which the Company constructed in a bid to cope with an increasing production volume of automotive interior parts and to improve its production efficiency for greater competitiveness in the market, will mainly manufacture luggage compartment interior parts including seat products using rigid materials for the Toyota Group . (From a press release by the company on Aug. 1 2006)

Challenges for FY2007
(1) Development of new products
In order to strengthen its capacity to present new products to automakers and also strengthen its relationships with system suppliers, the Company will continue to focus on developing new products and materials. The Company's main emphasis will be to generate results as soon as possible based on its technical partnership with Kaneka.

(2) Expansion and improvement of production facilities
As to its facilities in Japan, the Company will work on increasing its production capacity at its new plant in Gifu and establishing a production framework in the Kyushu area as soon as it can. As to its facilities overseas, the Company will conduct a study  to enhance its supply capacity as well as to increase the profitability of its Chinese subsidiary.  

(3) Expanding scope of business operations: 
-The Company will increase profits at its existing businesses by revising its business model, in addition to challenging new business opportunities.

(4) Efficient Use of Assets
-The Company will review its low-profit assets and utilize debt to provide return to its stockholders in order to improve its corporate value. 

(5) Stronger cost competitiveness
-The Company is committed to further improving its product quality, reducing costs, and enhancing technology.


R&D Structure
The Company will focus on shorting the time needed to establish new technologies used in new products, as well as improve on efficiencies for doing so as well. It intends to achieve this by enhancing cooperation with automakers and system suppliers, and furthering the exchange of information with material suppliers, manufacturers of production machinery, trading firms, and other companies concerned.

Automotive components division
Total R&D expenses at the Automotive Components Division for FY2006 were 27 million yen. The Company will work on the following ideas in its R&D activities. It will be focusing on reducing costs, creating products that are both lighter in weight and more rigid, improving products to make them more commercially appealing, and making products that contribute to improving the environment.
-Development of lightweight deck boards
-Making Zem-Light products more commercially appealing.
-Development of a new processing method for Zem-Light SPS
-Development of a foam-injected, light-weight luggage box
-Development of head linings with noise absorbing function

Investment Activities

-Total capital investment for FY2006 was 1,932million JPY.
Out of the total amount, 1,931 million JPY was spent on the automotive components division.
For the automotive components division, the Company invested mainly to acquire land, buildings, and production facilities for the new plant in Gifu, as well as to install production facilities and molds at existing plants in order to manufacture products that are for new orders the Company won. The Company aims to enhance the production capacity and streamline and renew the production facilities through making capital investments.

Establishment of  A New Plant
Name of the Plant 
Business/Facilities Total Planned  Investment
(million JPY)
Start Planned completion
Gifu Plant
(Gifu Pref., Japan)
Manufacturing facilities for trunk-space parts 117 Mar. 2007 June. 2007
Gifu Plant
(Gifu Pref., Japan)
Manufacturing facilities for trunk-space parts 140 Mar. 2007 Nov. 2007