TOKAI RIKA CO., LTD. Business Report FY2008

Business Highlights

Financial overview ( in millions of JPY )
  FY2008 FY2007 R.C.(%) Factors
Overall
Sales 337,417 440,001 (23.3) - Sales and income decreased, affected by the decline in automobile production and a strong yen.
Operating income 811 33,376 (97.6)
Ordinary profit 1,020 34,414 (97.0)
Current net income 1,063 21,282 (95.0)
Automotive component business
Sales 330,409 434,574 (24.0) - Overall sales decreased due to a decline in the sales of switches, seat belts, key locks, shift levers, etc.
( R.C. : Rate of Change )

Overseas business

Strengthening development and production structure

- The Company improved its product supply system by establishing a new company in southern India and constructing an additional plant building in Brazil.

Business objectives until 2015 (TOKAI RIKA GROUP 2015 VISION)
1. To reduce the number of critical functional quality issues to zero
2. To earn 600 billion yen or more at the Company's consolidated sales
3. To sustain a ROE (Return on Equity) higher than 10%

 

R&D

R&D expenses ( in millions of JPY )
  FY2008 FY2007 FY2006
R&D 17,907 18,324 17,734
Automotive component 17,818 18,106 17,496

R&D achievements

The Company developed the following new products in FY2008:

- Lightweight pretensioner belt for rear seats that contributes to reducing CO2 emissions.
- "Mirror ECU" that has succeeded in reducing size, weight and cost of the product by using custom IC.
- Module switch which consolidates the mirror switch and wind regulator switch with indirect lighting added to the operating portion for luxury cars
- Steering switch with toggle multifunction switch for luxury cars
- "Key free ECU with built-in tuner" that succeeded in reducing size, weight and cost as a system
- Small connector for surface mounting

Elemental technology:
- The Company developed a technology that protects products from humidity and scratches, while maintaining the texture and touch of natural wood. This product works by impregnating a special resin into wood (resin impregnation), jointly with Micro Tech Wood in Nankoku city, and Kochi Prefectural Industrial Technology Center in Kochi city, both in Kochi prefecture. The Company uses the technology for steering wheels and shift lever knobs. These products are the world's first automobile interior parts that are made by this technology.

Licensing of technology from other companies (As of March 2009)

Company Partner Country Outline of tie-ups Contract period
Tokai Rika TOTO Frontier Research
Japan Agreement to patent use for hydrophilic mirror 1999.08.01-
2009.07.31
Realize Japan Patent transfer agreement for transcription method of pattern and transcription sheet 2009.03.09-
Date of payment completion
Donnelly
Corporation
USA Licensing of patent on automotive mirrors 2000.04.07 -the patent expiry date
Autoliv Development AB
Sweden Licensing of patent on automotive seatbelts 2007.12.01-
- the patent expiry date
Visiocorp Patents S.A.R.L

Luxembourg Licensing of patent on automotive mirrors 2009.01.01-
the patent expiry date
TRW Vehicle Safety Systems Inc.
USA Licensing of patent on automotive seatbelts 2008.01.01-
the patent expiry date
TAC Manufacturing (USA) Miroku Technowood Japan Licensing of patent on automobile steering wheels 2002.06.05, for five years from the date of start of production or until the patent expiration date (whichever comes later).
Licensing use of technology on shift lever knobs for automobiles 2005.05.23, for three years from the date of start of production
Thai Seat Belt (Thailand) Toyota Boshoku Japan License to use know-how and patents on automobile seat belt 1994.06.02- 2010.06.01

Licensing of technology to other companies (As of March 2009)
Partner Country Outline of tie-ups Contract period

Shinchang Electrics Co., Ltd.
Korea Licensing use of patent and technology on switches and steering locks for automobiles 1978.09.02 - 2009.12.31
Licensing use of patent and know-how on switches for automobiles Apr. 2, 2001, for 10 years from provision of technology data or until the patent expiry date (whichever comes later)
Licensing use of patent and technology on steering locks and slots for automobiles 2006.02.21, for 10 years from the time the technology is provided or until the date the patent expires expiry date (whichever comes later).
Thai Seat Belt Co., Ltd. Thailand Licensing use of patent and technology on seat belts for automobiles 1994.06.02 - 2010.06.01
TRP, Inc. Philippines Licensing use of patent and technology on switches for automobiles 1996.03.05 - 2010.03.04
TAC Manufacturing, Inc. USA Licensing use of patent and technology on steering wheels, key sets, and shift levers for automobiles 1998.01.01 - 2009.12.31
TRIN, Inc. USA Licensing use of the patent and technology on switches for automobiles 1998.01.01 - 2009.12.31
TRMI, Inc. USA Licensing use of patent and technology on key switches and key sets for automobiles 1998.01.01 - 2009.12.31
Samsong Industries, Ltd. Korea Licensing use of patent and know-how on seat belts for automobiles 1998.04.01 - the patent expiry date
Nov. 19, 2003, for 10 years from the the time the agreement was made, or until the patent expiration date (whichever comes later)
2004.02.17, for 10 years from the time the agreement was made, or until the date the patent expires (whichever comes later).
TRB Limited UK Licensing use of patent and technology on switches for automobiles 1999.12.01 - 2009.11.30
Tokai Rika (Thailand) Co., Ltd. Thailand Licensing use of patent and technology on key sets for automobiles 2000.03.01 - 2010.02.28
TRCZ s.r.o Czech Republic Licensing use of patent and technology on switches and seat belts for automobiles 2003.04.29 - 2010.04.28
Mindarika Private Limited India Licensing use of patent and technology on switches for automobiles 2003.10.03 - 2013.10.02
Licensing use of patent and technology on outer rear view mirrors in mirror assemblies for the automobiles 2006.03.22 - 2016.03.21
Rica Auto Parts Co,. Ltd. Taiwan
Licensing use of patent and technology on child safety seats
2004.04.01 -
for 10 years from the contract start date, or until the patent expiration date (whichever comes later)
Licensing use of patent and technology on key switches and key sets for automobiles 2005.01.01 - 2009.12.31
Quality Safety Systems Company Canada Licensing use of patent and technology on seat belts for automobiles 2005.01.01 - 2009.12.31
Tianjin Tokairika Automotive Parts CO,. Ltd. China Licensing use of patent and technology on switches for automobiles 2005.01.01 - 2010.12.31
Wuxi Risho Technology Co., Ltd. China Licensing use of patent and technology on seat belts for automobiles 2005.01.01 - 2010.12.31
Foshan Tokairika Automotive Parts CO,. Ltd. China Licensing use of patent and know-how on switches, key sets and shift-levers for automobiles 2006.08.01 - 2016.07.31
Ashimori Industry Co., Ltd. Japan Licensing use of patent on seat belts for automobiles 2007.02.02 -
the patent expiry date
Licensing use of international patent on seat belts for automobiles 2007.02.02 -
the patent expiry date

Investment Activities

Capital Expenditure ( in millions of JPY )
  FY2008 FY2007 FY2006
Investment 15,852 21,189 20,368

Investments in overseas facilities
<India>
- The Company announced plans to establish a new company in Bangalore, Karnataka, southern India and to build its second plant in India. The new plant is scheduled to start operations in Nov. 2010, aimed to achieve approx. three billion yen sales in 2013. In September 2008, Tokai Rika Minda India Private Ltd. will be formed and invest approx. 2.4 billion yen to build a new plant for manufacturing switch parts, seatbelts and security system parts including keys. The Company will make a 70% investment and Minda Investments Ltd., a local firm, will make a 30% investment of a 500 million rupee (approx. 1.3 billion yen) capital. (From an article in the Nikkan Jidosha Shimbun on Jun. 27, 2008)

<Thailand, China and USA>
- In addition to establishing a new magnesium casting plant at Tokai Rika Thailand Co., Ltd. (TRT), which produces key locks, the Company will expand its facilities at both its switch plant in Foshan and seatbelt plant in Wuxi, China.
- During this fiscal year, the Company will also boost its production capacity at TAC Manufacturing Inc. (TAC) which makes shift levers and other components in North America.
- The Group's total capital spending in fiscal year 2008 is thereby expected to reach a record 25 billion yen. (From an article in the Nikkan Jidosha Shimbun on Apr. 17, 2008)

Investment projects for FY2008

Company
Location
Purpose Planned total investment (million JPY) Starting Planned completion
Tokai Rika Co., Ltd.
Head Office
Plant
(Aichi Pref., Japan)
Parts production, assembly, test facilities for electronics products, switches etc. 3,000 Apr., 2009 Mar., 2010
Nishibiwajima Plant
(Aichi Pref., Japan)
Test, assembly facilities for switches etc. 250 Apr., 2009 Mar., 2010
Toyota Plant
(Aichi Pref., Japan)
Parts production, processing, assembly facilities for seat belts, decorating products 450 Apr., 2009 Mar., 2010
Otowa Plant, Hagi Plant
(Aichi Pref., Japan)
Parts production, assembly facilities for key locks, steering wheels etc. 1,300 Apr., 2009 Mar., 2010
Loan assets for Ena Tokai Rika Co., Ltd.
(Gifu Pref., Japan)
Parts production, assembly facilities for mirrors 300 Apr., 2009 Mar., 2010
Consolidated subsidiaries
Mindarika Private Ltd.
(Bangalore, India)
Construction of plant
800 Feb., 2009 Feb., 2010
TRBR Industria e Comercio Ltda
(Sao Paulo, Brazil)
Construction of plant
700 Mar., 2009 Mar., 2010
Tokai Rika (Thailand) Co., Ltd.
(Rayong, Thailand)
Facilities to produce new products, etc. 600 Jan., 2009 Jan., 2010
Foshan Tokairika Automotive Parts Co., Ltd.
(Foshan, China)
Construction of additional plant building, facilities to produce new products, etc.
600 Dec., 2008 Dec., 2009