Sumitomo Rubber Business Report FY2009
Business Highlights
Financial Overview |
(in millions of JPY) |
FY2009 | FY2008 | Rate of Change (%) | Factors | |
Overall | ||||
Sales | 524,534 | 604,974 | (83.7) | -Although sales declined significantly year-on-year, both operating income and ordinary income increased compared to the previous year's levels, since the Company cut down capital investments and improved its business operations. |
Operating income | 28,738 | 25,658 | 12.0 | |
Ordinary income | 20,029 | 14,792 | 35.4 | |
Net income | 9,093 | 1,020 | 790.8 | |
Tire business | ||||
Sales | 433,411 | 501,062 | (86.5) | -Being impacted by the slowing global economy which is holding down consumer demand, sales of OEM tires decreased year-on-year both in and outside Japan. Due to falling materials prices, however, operating income increased compared to the previous year's result. |
Operating income | 22,518 | 15,849 | 42.1 |
Contracts
-The Company announced that its Dunlop brand "SP Sport 2030" has been selected as the factory-fitted tire for the i-MiEV, Mitsubishi Motors Corp.'s electric vehicle to be released in July, 2009. (From an article in the Nikkan Jidosha Shimbun on June 18, 2009)Recent Developments in Japan
-The Company announced that it will integrate its two subsidiaries, Dunlop Falken Tyres, Ltd. and SRI Hybrid Ltd., into the Company as of Jan. 1, 2010. In response to the drastically changing business environment, it aims to improve its management efficiency and enhance its business operation structure by concentrating the management resources. Dunlop Falken Tyres, Ltd., Koto-ku, Tokyo, is a controlling company for its aftermarket tire sales in Japan. SRI Hybrid Ltd., Chuo-ku, Kobe, Hyogo Pref., manufactures and sells industrial products including artificial turfs and high-damping rubber. (From an article in the Nikkan Jidosha Shimbun on Nov. 10, 2009)Recent Developments Outside Japan
-The Company will elevate production capacity at its plant in Thailand by about 30 percent to 23,000 tires per day as early as fiscal 2009. While demand for tires to be used for both new vehicles and aftermarket in the Thai domestic market is hovering at low levels because of a decrease in production of vehicles and the sluggish economy, The Company is looking to recovery in demand for service tires in overseas markets as well as rebound in overall demand in the future. More than 60 percent of overseas investments in the current fiscal year will be devoted to an increase in production in Thailand. In terms of the volume of produced rubber, which indicates the scale of a tire producing plant, monthly production will be expanded from the 3,400 tons in the previous term to 4,400 tons. (From an article in the Nikkan Jidosha Shimbun on Feb. 23, 2009)>>>Financial Forecast for the Next Fiscal Year(Sales, Operating Income etc.)
R&D
R&D Expenditure |
(in millions of JPY) |
FY2009 | FY2008 | FY2007 | |
Tire Division | 14,896 | 16,013 | 15,105 |
Overall | 17,982 | 19,351 | 18,223 |
Ratio of R&D expenses at Tire Division | 82.8% | 82.8% | 82.9% |
R&D Structure
-The Company is carrying out joint research with the Goodyear Tire and Rubber Company based on its ties with the U.S. tire supplier. Engineers of both companies work in teams for respective projects to exchange their technologies.>>>Alliance with the Goodyear Tire and Rubber Company
R&D Facilities
-The Company has opened a 5 billion yen Tire Technical Center at its Kobe headquarters complex. The new facility will play a central role in supporting the Company's ongoing effort to develop eco-friendly products, putting special focus on tires made of 100% non-fossil resources or those delivering 50% lower rolling resistance compared to the existing technologies. (From a press release on September 18, 2009)R&D Activities
-The Company held on April 22, 2009 an opening ceremony at its new "Production Training Center" in Fukushima Prefecture to conduct technical training for tire production. The new facility, which has been completed within the Company's Shirakawa Plant, has a training wing with tire production equipment, which enables trainees to receive on-site, hands-on training courses. The Company will position this facility as a hub for the smooth succession of technical know-how and the development of globally competitive labor force. (From an article in the Nikkan Jidosha Shimbun on Apr. 25, 2009)Product Development
-The Company announced that it has developed the fourth generation of its sidewall-reinforced run-flat tire, which is designed to enable the vehicle to continue to run for a limited distance even when the tire becomes flat. Some of the new advantages featured on the tire include heat controlling technique. In addition, the tire is 3 percent lighter in weight, while achieving a 6 percent reduction in vertical spring modules compared with the previous technology. The improvement realizes the same or even greater level of riding comfort than those using normal tires. Sumitomo Rubber will initially market the new tire as an OEM tire, aiming to target the replacement market in the future as well. The Company's run-flat tires with reinforced sidewalls are interchangeable with normal tires. (From an article in the Nikkan Jidosha Shimbun on Sep. 19, 2009)Investment Activities
Capital Expenditure |
(in millions of JPY) |
FY2009 | FY2008 | FY2007 | |
Tire Business | 29,379 | 46,987 | 49,796 |
Overall | 32,483 | 49,601 | 53,205 |
Ratio of capital investment at Tire Division | 90.4% | 94.7% | 93.6% |
-The Company invested mainly in its tire business by increasing production capacities as well as reducing the number of employees needed. Targeted facilities include car tire production facilities in the Company's Nagoya Plant, Shirakawa Plant, Izumiohtsu Plant and Miyazaki Plant.
Investments in Japan
-The Company has opened a 5 billion yen Tire Technical Center at its Kobe headquarters complex. (From a press release on September 18, 2009)-The Company announced that it will transfer its production lines for passenger radial tires at its Izumiohtsu Factory in Izumiohtsu City, Osaka to three other plants in Japan. The main reason for the change is that the Izumiohtsu Factory is becoming quite old, requiring reinforcement work against major earthquakes and other disasters. The Company, however, decided it was no longer feasible to conduct a full-scale renovation work at the aging plant. In order to diversify risks, the Company is going to transfer the Izumiohtsu Factory's function to make 17,000 radial tires daily to its Shirakawa Factory in Shirakawa City, Fukushima Prefecture; Nagoya Factory in Toyota City, Aichi Prefecture; and Miyazaki Factory in Miyakonojo City, Miyazaki Prefecture. The Izumiohtsu Factory will partly maintain operations at its reinforced facility, which already underwent renovation work against earthquakes. The quake-proof facility manufactures SUV tires, bias tires, and clean rubber. (From an article in the Nikkan Jidosha Shimbun on Dec. 2, 2009)
Major Capital Investment Projects (Automotive Segment)
(As of Dec. 31, 2009)
Company name (Location) |
Project | Estimated amount (million yen) |
Project Period | Increases in production capacity (%) | |
From | To | ||||
Sumitomo Rubber Industries Nagoya Plant (Aichi Pref., Japan) |
Production equipment for automotive tires | 5,910 | Jan. 2009 | Dec. 2010 | 2 |
Sumitomo Rubber Industries Shirakawa Plant (Fukushima Pref., Japan) |
Production equipment for automotive tires | 6,249 | Jan. 2009 | Dec. 2010 | 2 |
Sumitomo Rubber Industries Izumiotsu Plant (Osaka Pref., Japan) |
Production equipment for automotive tires | 2,687 | Jan. 2009 | Dec. 2010 | - |
Sumitomo Rubber Industries Miyazaki Plant (Miyazaki Pref., Japan) |
Production equipment for automotive tires | 5,252 | Jan. 2009 | Dec. 2010 | 2 |
P.T. Sumi Rubber Indonesia | Production equipment for automotive tires and golf balls | 2,711 | Jan. 2009 | Dec. 2010 | 6 |
Sumirubber (Changshu) Co., Ltd. (Jiangsu Prov., China) |
Production equipment for automotive tires | 5,042 | Jan. 2009 | Dec. 2010 | 17 |
Sumitomo Rubber (Thailand) Co., Ltd. (Rayong, Thailand) |
Production equipment for automotive tires | 21,123 | Jan. 2009 | Dec. 2010 | 65 |