NOK Corporation Business Report FY ended Mar. 2014

Business Highlights

Financial Overview

(in million JPY)
  FY ended Mar. 31, 2014 FY ended Mar. 31, 2013 Rate of
Change (%)
Sales 591,388 540,859 9.3 -
Operating income 32,586 26,519 22.9 -
Ordinary income 42,313 35,202 20.2 -
Current net income 21,757 22,216 (2.1) -Income was lower due to an extraordinary loss posted to settle a recall in the market.
Sealing product division
Sales 284,861 257,974 10.4 -Sales of automotive products recovered in China, where there had been a slowdown in sales to Japanese car makers due to the tense political relations between Japan and China. Sales increased in Japan due to new vehicle-model launches and last-minute demand to purchase new vehicles before the consumption tax increase went into effect.
Operating income 27,729 21,119 31.3 -

Joint Ventures

-PNDT, which is a joint-venture between Pyung Hwa Holdings (parent company of Korea based Pyung Hwa Industrial) and the Company of Japan, has held a ground-breaking ceremony for its new plant in Yeongcheon, Gyeongsangbuk-do. The facility will have 25,000 square meters of building area on 48,000 square meters of land. It is scheduled to be completed in October 2013 and will produce 11 million damper pulleys per year. Annual sales are expected to reach KRW 60 billion. (From a press release, April 22, 2013)

Mid-term Management Plan (FY ending March 2015 - FY ending March 2017)

-The Company announced its plan to enhance automated operations at its oil seal plants in Japan. The intention is stated in the Company's three-year business plan started in April 2014. Over the next three years, the Company will invest a total of JPY 65 billion globally in its seal business. Of this amount, JPY 45 billion will be spent on raising the ratio of fully automated operation in Japan from the current 20-30% to 50% by FY ending Mar. 2017. This will allow the Company to improve its cost competitiveness in Japan where demand for oil seals is forecast to decline. In order to boost profitability of the seal division as a whole, the Company also intends to promote automated production and save labor costs at its plants in emerging countries as well. During FY ended Mar. 2012 - FY Mar. 2014, the Company invested a total of JPY 62.5 billion in plants and equipment of its seal business. As the fund was primarily appropriated for production capacity expansion projects outside Japan, the Company has decided to shift its focus to improving productivity in both Japan and emerging markets. (From an article in the Nikkan Jidosha Shimbun on May 16, 2014)

-Slogan: "Strengthen corporate foundation for attaining sustainable growth". This will be achieved through creating new products and business by setting the foundation for ensuring a strong workplace environment.
  • Re-examine capabilities for achieving true product creation
  • Re-challenge commitment to achieve superior level of quality
  • Create new products, technology, and businesses
  • Develop and make optimum use of human resources
-Financial objectives:  (by end of FY2016 that ends March 2017)
  • Sales: JPY 700,000 million
  • Operating profit: JPY 55,000 million
  • Profit margin: 7.9%

Outlook for FY ending Mar. 31, 2015

(in millions of JPY)
  FY ending Mar. 31, 2015
FY ended Mar. 31, 2014
(Actual Results)
Rate of
Change (%)
Sales 634,600 591,388 7.3
-Seal 294,200 284,861 3.3
-Electronic Device Product 300,000 266,444 12.6
-Rolls 28,500 28,712 (0.7)
-Others 11,900 11,370 4.7
Operating income 42,000 32,586 28.9
Ordinary income 46,800 42,313 10.6
Net income 27,400 21,757 25.9

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)


R&D Expenditure

(in millions of JPY)
FY ended Mar. 31, 2014 FY ended Mar. 31, 2013 FY ended Mar. 31, 2012
Overall 7,622 6,834 6,403
Seal 5,752 5,212 4,706

R&D Activities

-The Company worked to develop environmentally friendly products such as products contributing to lower energy use by lowering frictional loss; and other eco-friendly products for hybrid, electric, and fuel-powered vehicles.
-The Company developed and launched sales of low-friction, automotive oil-seals, developing conventional coated seals and a new type of low-friction seal designed to reduce friction force, in addition to seals based mainly on rubber materials. Also, the Company launched sales of seals that offer better features such as being more dust resistant, which makes them capable of responding to poor road conditions overseas such as in Middle eastern countries, BRICs and so on.
-In its O-ring business, the Company launched material that can handle new coolants and which are environmentally friendly; and coating material that makes assembly easier. In addition, it conducted R&D activities to develop a material that is workable with hydrogen gas used in fuel cells.
-As part of its activities designed to create seals for use in EVs and HEVs, the Company developed smaller and low-reaction force gaskets and integrated seal parts of flexible printed circuit boards (FPCs) for next-generation vehicles, launching commercial production of some of them.
-The Company is starting to consider mass-producing seal parts for fuel-cell stacks/ batteries being equipped on fuel-cell vehicles.

Electronic Device Product
-In the LED field, in which heat radiation is needed, the Company is developing technology on metal FPCs (flexible printed circuit boards), some of which are already being equipped on vehicles.
-Developing and presenting to customers technology that joins FPCs and cables, and FPCs to devices, with a high degree of reliability.
-The Company is developing electrostatic touch sensors involving environmentally friendly processes achieved by using printed electronics (PE), considering the idea of using them on vehicles by enhancing their reliability even more.

R&D Facilities

Facility Location
Shonan Development Center Kanagawa Pref., Japan

Technical Cooperation Agreement

(As of Mar. 31, 2014)
Partner Content Signed on
Introduction and licensing of such seal product as oil seal, O ring and related technologies Jan. 1, 2009

Investment Activities

Capital Expenditure

(in millions of JPY)
FY ended Mar. 31, 2014 FY ended Mar. 31, 2013 FY ended Mar. 31, 2012
Overall 40,615 52,802 27,158
Seal 21,914 27,957 16,099

Sealing business
-In Japan, the Company invested mainly in the facilities at its Kitaibaraki plant; and outside Japan, mainly in Wuxi NOK-Freudenber Oil Seal Co., Ltd. and Thai NOK Co., Ltd.

New Facilities

Equipment Amount
(in million JPY)
Date of start Scheduled date of completion
Thai NOK Co., Ltd.
(Chonburi, Thailand)
Facilities to manufacture various types of seals 3,600 Jun. 2013 Aug. 2014

Outlook of Capital Expenditure for FY ending Mar. 31, 2015

(in millions of JPY)
  FY ending Mar. 31, 2015
FY ended Mar. 31, 2014
(Actual Results)
Rate of
Change (%)
Japan 18,500 15,800 17.1
Asia 20,600 24,700 (16.6)
Europe/USA 900 100 800.0
Total 40,000 40,600 (1.5)