Sumitomo Rubber Industries, Ltd. Business Report FY ended Dec. 2013
Business Highlights
Financial Overview |
(in million of JPY) |
FY ended Dec. 31, 2013 | FY ended Dec. 31, 2012 | Rate of Change (%) | Factors | |
Overall | ||||
Sales | 780,608 | 710,246 | 9.9 | 1) |
Operating income | 77,055 | 69,722 | 10.5 | |
Ordinary income | 74,581 | 67,351 | 10.7 | |
Net income | 44,794 | 35,451 | 26.4 | |
Tire business | ||||
Sales | 681,099 | 619,361 | 10.0 | 2) |
Operating income | 69,850 | 63,089 | 10.7 |
Factors
1) Overall
-Prices of natural rubber remained low, while export sales improved on weaker yen. The Company, however, was faced with tightening competition especially in the aftermarket tire business outside Japan.
2) Tire business
-OEM sales in Japan fell from the previous year. Reasons for the drop included decreased vehicle production in Japan after the termination of eco-car incentive programs and automakers' move to shift production overseas.
-Overseas OEM sales improved from the previous year, as vehicle production volumes increased especially in China and Indonesia.
Acquisitions
<South Africa>-The Company announced that it has acquired Apollo Tyres South Africa (ATSA) from Apollo Tyres Limited, the former parent company of the corporation. The acquisition cost was USD 60 million (JPY 6 billion). The purchase includes ATSA's head office, the Ladysmith Plant, ATSA's sales network, and the production and distribution rights of Dunlop brand tires in 30 countries in Africa and two countries in the Indian Ocean area. Due to this transaction, Sumitomo will change the name of ATSA to Sumitomo Rubber South Africa (Pty) Limited. Sumitomo Rubber is poised to boost daily production capacity of passenger car and light truck tires at the Ladysmith Plant from the current level of 9,600 units to 12,000 units by 2016. (From an article in the Nikkan Jidosha Shimbun on December 10, 2013)
Contracts
-Major contracts in 2013:Products | Model |
Grandtrek ST30 | Toyota "Harrier" |
SP Sport Maxx GT 600 DSST CTT | Nissan "GT-R" |
SP Sport Maxx GT 600 DSST CTT (NR1) | Nissan "GT-R Nismo" |
SP Sport Maxx TT | Mazda "Axela" |
SP Sport Maxx 050 | Toyota "Crown" |
SP Sport 2050 | Toyota "Crown Majesta" |
Falken Eurowinter HS449 | Volkswagen "Polo" |
Enasave 050 | Honda "Accord Hybrid", "Accord Plug-in Hybrid" |
Enasave EC300 | Daihatsu "TanTo" |
Nissan "DAYZ/DAYZ Highway Star" | |
Mitsubishi "eKWagon/eK Custom" | |
Suzuki "Alto Eco" | |
Nissan "Lafesta Highway Star" | |
Mazda "Premacy" |
R&D
R&D Expenditure |
(in million of JPY) |
FY ended Dec. 31, 2013 | FY ended Dec. 31, 2012 | FY ended Dec. 31, 2011 | |
Overall | 21,822 | 19,538 | 19,273 |
-Tire Division | 18,976 | 17,033 | 16,771 |
R&D expenditures at the Tire Division as a % of overall R&D expenditures | 87.0 | 87.2 | 87.0 |
R&D Structure
-The Company is carrying out joint research with the Goodyear Tire & 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 completed construction of its Tire Technical Center (Kobe City, Hyogo Pref. Japan) in 2009, which functions as the Group's main facility for the development of tire technologies. Engineers at this technical center are developing environmentally friendly tires for the next generation.Tire Proving Grounds | Okayama Pref. Tire Proving Ground Nayoro, Hokkaido Pref. Tire Proving Ground Asahikawa, Hokkaido Pref. Tire Proving Ground |
Product Development
-Product development for FY2013Brand | Features | Production Plan |
High-performance biomass material |
Petroleum-free natural material |
2016 |
Super fuel-efficient tire offering 50% improvement in rolling resistance |
The tire uses the Ultra Pure Natural Rubber (UPNR) and modified Solution polymerization Styrene-Butadiene Rubber (S-SBR) with optimum molecule structure on the nano-level. |
Fall in 2014 |
Ultra Pure Natural Rubber (UPNR) |
Highly purified form of natural rubber that improves both vehicle fuel-efficiency and the wear resistance of the tire by 10 percent |
As a part of the fuel-efficient tires to launch in 2014 |
Enasave EC203 |
Rolling resistance reduced by 12% Wearing resistance improved by 9 % on standard tires and by 17 % on mini- and compact-vehicle tires |
2014 |
Investment Activities
Capital Expenditure |
(in million of JPY) |
FY ended Dec. 31, 2013 | FY ended Dec. 31, 2012 | FY ended Dec. 31, 2011 | |
Overall | 57,270 | 56,889 | 48,515 |
-Tire Business | 54,268 | 53,940 | 45,777 |
Capital investment at the Tire Division as a % of overall capital expenditures | 94.8 | 94.8 | 94.4 |
-The Tire Division focused its investment activities on improving domestic production facilities; including cutbacks in manpower; and enhancing productivity.
-Overseas, the Tire Division invested mainly in expanding its existing plant in Thailand and constructing new plants in Brazil.
-The Company is planning to invest JPY 63,249 million in plant and equipment in 2014.
Investments Outside Japan
<Brazil>-The Company announced that it has opened a new plant, Sumitomo Rubber do Brasil Ltda. (SRB), to produce radial tires for automobiles in Brazil. Approximately BRL 750 million (JPY 35.3 billion) were invested in the new plant. With a land area of approximately 500,000 square meters, SRB will have a production capacity of 15,000 tires per day by the end of 2015. (From a press release on October 4, 2013)
<Turkey>
-The Company announced that it has held a groundbreaking ceremony for its passenger car radial tire plant in Turkey. This is the first time that Sumitomo Rubber will construct a manufacturing facility in the country. The new plant, Sumitomo Rubber AKO Lastik Sanayi ve Ticaret A.S. (SAT), was established in February 2013 with a capital investment of approximately USD 30 million (JPY 2.9 billion), 80 percent of which was provided by Sumitomo Rubber and the remaining 20 percent of which was provided by Abdulkadir Ozcan Lastik Sanayi ve Ticaret A.S. Approximately USD 500 million (JPY 47.5 billion) will be invested in SAT, which will be constructed on 1 million square-meters of land. Production is scheduled to start in July 2015. Production capacity is expected to reach 30,000 tires per day by the end of 2019. (From a press release on September 10, 2013)
Major Capital Investment Projects (Automotive Segment) |
(As of Dec. 31, 2013) |
Company name (Location) |
Project | Estimated amount (in million of JPY) |
Project Period | Increases in production capacity | |
From | To | ||||
Sumitomo Rubber Industries Nagoya Plant (Aichi Pref., Japan) |
Production equipment for automotive tires | 5,487 | Jan. 2013 | Dec. 2014 | - |
Sumitomo Rubber Industries Shirakawa Plant (Fukushima Pref., Japan) |
Production equipment for automotive tires | 8,802 | Jan. 2013 | Dec. 2014 | - |
Sumitomo Rubber Industries Izumiotsu Plant (Osaka Pref., Japan) |
Production equipment for automotive tires | 1,692 | Jan. 2013 | Dec. 2014 | - |
Sumitomo Rubber Industries Miyazaki Plant (Miyazaki Pref., Japan) |
Production equipment for automotive tires | 6,665 | Jan. 2013 | Dec. 2014 | - |
P.T. Sumi Rubber Indonesia (Jakarta, Indonesia) |
Production equipment for automotive tires and golf balls | 5,451 | Jan. 2013 | Dec. 2014 | - |
Sumitomo Rubber (Changshu) Co., Ltd. (Jiangsu Prov., China) |
Production equipment for automotive tires | 3,465 | Jan. 2013 | Dec. 2014 | - |
Sumitomo Rubber (Hunan) Co., Ltd. (Hunan Prov., China) |
Production equipment for automotive tires | 23,500 | Sep. 2010 | Dec. 2017 | 30,000 tires/month |
Sumitomo Rubber (Thailand) Co., Ltd. (Rayong, Thailand) |
Production equipment for automotive tires | 10,670 | Jan. 2013 | Jan. 2014 | Capacity increase by 14% |
Production equipment for Industrial vehicle tires | 9,900 | May. 2012 | Dec. 2017 | 50,000 tires/month |
|
SUMITOMO RUBBER DO BRASIL LTDA. (Parana, Brazil) |
Production equipment for automotive tires | 28,000 | Jul. 2011 | Dec. 2016 | 15,000 tires/day |
Sumitomo Rubber AKO Lastik Sanayi ve Ticaret A.S (Cankiri, Turkey) |
Production equipment for automotive tires | 40,000 | Oct. 2012 | Dec. 2019 | 30,000 tires/day |
Sumitomo Rubber South Africa (Pty) Ltd. (KwaZulu-Natal, South Africa) |
Production equipment for automotive tires | 11,300 | Dec. 2013 | Dec. 2016 | 12,000 tires/day |