Sanluis Business Report FY2006 (FY ended Dec. 2006)
Business Highlights
Financial overview
in million USD | FY2006 | FY2005 | Rate of change (%) | Factors |
Consolidated | ||||
Sales | 614.9 | 616.8 | -0.3% | - |
Sales by business units | ||||
Suspension business | 516.6 | 510.4 | 1.2% | See note 1) below. |
Brake business | 98.3 | 106.4 | -7.6% | See note 2) below. |
(1) Suspension business
<North America>
-The Company launched 10 platforms, which combined represent $142
million in annual sales. Additional contracts for supplying suspension
components for six other platforms were also obtained, adding a total
of $56.3 million in revenue, of which $13.6 million is new business.
-The rise in steel prices since the last quarter of 2003, which has
affected a wide range of sectors, especially the auto industry, continued
unabated throughout 2006.
-To reduce logistics costs, which translate into a direct benefit for
its customers, the Company increased the volume of rail shipments from
Piedras Negras, Coahuila. By year's end 2006, 56% of the volume out
of this facility was shipped this way.
-At the Piedras Negras coil spring plant the Company developed 250 part
numbers for 18 different platforms. Five of these began production in
2006 and accounted for more than one million pieces in additional sales.
-The coil spring plant in Montpelier, Ohio notably reduced scrap and
downtime indexes, while at the same time generating a 39% increase in
productivity once it began supplying two new customers: Tenneco Automotive
and Martinrea.
<Brazil>
-Its Rassini - NHK Autopecas (RNA) subsidiary reconfirmed its leadership
in supplying suspension components for the Brazilian heavy and light
truck markets.
-While the heavy truck market, which represents 80% of revenue, registered
a 10% drop with respect to 2005, the Company's objectives were reached
thanks to a strategy to increase sales volumes in both exports and aftermarket,
combined with its internal efforts to reduce costs and reach agreements
with both steel and component suppliers.
-RNA ratified its goal to produce hi-tech suspension components by exporting
10% of production to Germany and the United States. It additionally
initiated the modernization process of its coil spring plant with the
technical support of its partner NHK. This will enable the Company to
start producing coil springs by 2007 with the latest technology.
-The Company made its first sale of brackets, or "U-bolts",
which are produced through a technical assistance agreement with the
American firm CMP. With this launch it strengthened its line of complementary
products.
(2) Brake business
-During 2006, sales for the Brakes business were $98.3 million, reflecting
a 7.6% decline compared to the previous year. This downturn is primarily
attributable to the end of the lifecycle for a General Motors light
truck platform and slow SUV sales for Ford, GM and DaimlerChrysler.
-The Company launched six platforms for General Motors, DaimlerChrysler,
Renault, BMW and Ford, and began machining hub assemblies for a new
customer, ConMet. It obtained new platforms from the Big Three that
the Company will begin supplying between 2007 and 2008. Together with
Brembo, its technological partner, the Company was awarded with another
platform for BMW. And it developed an in-house process for the machining
of hubs for heavy trucks, classes 7 and 8.
-The Company also expanded its casting business with new products, launching
20 part numbers, specifically clutch housings, flywheels and clutch
pressure plates for Eaton, Sachs and Luk, to be used by heavy vehicle
customers such as Ford, Volvo and Freightliner.
-Costs for raw materials, scrap and ferroalloys in 2006 continued on
the rise, with average increases of 7.1%. Energy prices, especially
electricity and natural gas, were the hardest hitting throughout the
year, affecting its business with increases of 14.1% and 3.9%, respectively.
R&D
R&D Structure
-Working closely with its Product Development laboratories in Mexico
and Brazil , the Plymouth Office provides directional leadership for
new technologies and technical initiatives.
Product Developments
In 2006, the Company continued strengthening its R&D activities
through the formation of a technical team dedicated to the launch of
the SDI projects. This project, the objective of which is to improve
rear suspension performance, complete its first phrase. In this same
vein the Company presented all of its 2005-2006 leaf spring and coil
spring process innovations to Mexico's National Science and Technology
Council (CONACYT), obtaining their recognition.
Investment Activities
New investments in 2006 for optimizing and expanding its plants 14 million dollars, or a 68% increase over 2005.