Taiho Kogyo Business Report FY2007

Business Highlights

Highlights in FY2007 (ended Mar. 2008)

Financial Overview
(in million
FY2007 FY2006 Rate of Change Factors
Sales 108,883 105,860 2.9% Sales increased, supported by strong performance of the automotive component business, despite a decrease in orders for automotive manufacturing facilities.
Operating income 5,756 4,154 38.6% Operating income increased due to increases in production and revenue, as well as to effective Group-wide streamlining activities centered on management. This is despite negative factors such as downward price revisions and negative currency translation.
Ordinary income 5,620 4,286 31.1% -
Net income 3,695 2,599 42.1% -
Automotive Component Business
Sales 87,653 79,965 9.6% Sales rose, thanks to a significant increase in the sales of bearing products and assembly products such as liquid seal formed components.  
Operating income 8,571 5,804 47.7% -

Recent developments outside Japan


Since construction of the second plant at Taiho Kogyo Corporation of Yantai, the Company's wholly owned subsidiary, was completed, the new plant started commercial operations in November 2007. It produces sliding bearings such as engine bearings mainly in response to the growing market for diesel engines in China as well as to the greater volume of production by of Japanese car manufacturers in China. The total cost for the construction project was 1.1 billion yen. (Press release dated November 1, 2007)

Business plan

-Assembly products business

The Company will reinforce its high value-added product business such as turbochargers and suspension parts. In addition to ensuring smooth startup of the supply of suspension parts for new models of Toyota, its major customer, the Company will aim for expanding its product range and customer base in the area of turbochargers, as well. Developing these products as leading items in its originally equipped parts business, along with its mainstay products such as plain bearings and die-cast parts, the supplier is aiming to achieve sales of more than 19 billion yen in FY2008, up 16 percent of present sales. Through fostering value-added assembly parts business it intends to establish a solid revenue base. (From an article in the Nikkan Jidosha Shimbun on May. 28, 2007)

-Gasket business

The Company plans to enhance its gasket business through reinforcing the partnership with Nippon Gasket Co., Ltd., its subsidiary. It plans to focus on sales expansion by consolidating its engine parts technology with the sealing material technology of Nippon Gasket to develop technologies for ultra-low viscosity oil, low oil pressure and new materials to be incorporated in new gaskets for the next-generation engines. It aims to achieve over 12 billion yen sales as early as FY 2008, up 14.4 percent from FY2006. (From an article in the Nikkan Jidosha Shimbun on Jun. 11, 2007)


R&D Structure

-The Company set up its R&D structure so that it can address diverse issues under a consolidated framework consisting of several divisions such as the basic research division dealing with tripology (friction/wear/lubrication technology) and other themes; the product development division; and the production technology development division, all working at the  Main Technology Building. 

-In addition to the above, the Company also has a friction technology research center, an engine experiment center, and a production technology development center.

R&D Expenditure

(in million JPY) FY2007 FY2006 FY2005
Overall 1,501 1,542 1,363
Automotive parts business 1,408 1,440 1,337

R&D activities in recent years (Automotive Parts Business)

1. Sliding bearings:

-The Company was successful in producing engine bearings, which are compatible with high performance engines; special bearings, which are used in compressors; and also various other bearings.

-In the area of engine bearings, the Company developed and launched both copper and aluminum bearings with overlays that are both completely lead-free.

-The company successfully developed overlay materials using lead-free, solid lubricants to meet recent needs for enhanced engine performance. These materials are being used on major vehicle models in and outside Japan. The Company was successful in conducting sales activities that increased its global presence, as it won new supply agreements from overseas makers with which it had never transacted business before.

-The Company developed and launched completely lead-free copper bearing materials.

-The Company completed a line up of lead-free bushes and applied them to transmissions and other products.

2. Metal head gaskets for engines

-The Company reinforced its R&D capabilities by making Nippon Gasket Co., Ltd. a subsidiary.

3. Die-cast products

-The Company developed and commercialized sleeves for oil control valves and started to supply them to makers in both Japan and abroad.

-The Company developed and commercialized cam housings and is currently conducting R&D activities to expand their application to more sophisticated parts such as differential carriers.

4.High value-added products

-The Company developed and commercialized coils and core assemblies for solenoid valves, parts for continuous variable valve timing systems, and EGR valves for small-diesel and large-diesel engines.

-In particular with coils and core assemblies for solenoid valves, the Company expanded its customer base by increasing the number of both domestic- and foreign-based customers.

-The Company   successfully developed electronic control EGR valves that offer precise control and a large volume of flow. These were designed in compliance with new long-term exhaust emission regulations for commercial vehicles that started from October 2005.

-The Company developed and commercialized vacuum pumps with a new mechanism capable of generating a vacuum. These new pumps are for use in environmentally friendly engines with upgraded induction systems. 

5. Environmental friendly products

-The Company commercialized lead-free balance weights.

-The Company was successful in developing lead-free, clip-on balance weights like those being used in overseas markets. The Company also started commercial production of stick-on balance weights.

Investment Activities

Capital Expenditure
(in million JPY) FY2007 FY2006 FY2005
Overall 9,645 9,240 15,801
Automotive Parts Business 9,066 8,674 14,932

Automotive Parts Business (FY2007)

-In this business segment, capital investment focused on expanding production capacity and maintaining and updating manufacturing facilities.

-In Japan, the Company's subsidiary, Taiho Gifu Co., Ltd., invested in manufacturing facilities that produce bearing products.

-At Taiho Kogyo Corporation of Yantai, the Company expanded the facilities producing bearings. NHK Gasket (Thailand) Co., Ltd. of Thailand obtained a site for constructing a new plant. 

New facilities (Automotive Parts Business)

The Company's Group plans to invest 10 billion yen in FY2008, which ends on March 31, 2009. The breakdown of major investments is as follows.
Plant Facilities to be built Planned investment (million JPY) Objective
The Company
Headquarters and Headquarters plant
(Aichi Pref., Japan)
Land (plant site) 538 Basic investment
Production facilities to manufacture die casting products 382 New products
Hosoya plant
(Aichi Pref., Japan)
Production facilities to manufacture bearings, etc.


Rationalization, maintenance and renewal
Shinohara plant
(Aichi Pref., Japan)
Production facilities to assemble components, bearings, etc. 550 New products
Kyushu plant
(Kagoshima Pref., Japan
Production facilities to manufacture bearings, etc. 152 Rationalization, maintenance and renewal
Koukai plant
(Aichi Pref., Japan)
Production facilities to manufacture bearings, etc. 1,336 Expansion, increasing production capacity
Taiho Seiki Co., Ltd.
Headquarters and Headquarters plant
(Aichi Pref., Japan)
Building (expanding the headquarters manufacturing building and remodeling certain parts of the building), facilities where design and development activities can be conducted, and facilities for manufacturing automotive suspension components  1,160 Basic investment, maintenance and renewal
Taiho Gifu Co., Ltd.
Headquarters and Headquarters plant
(Gifu Pref., Japan)
Facilities to manufacture bearing products and conducting die-casting  1,271 Expansion, increasing production capacity, maintenance and renewal
Nippon Gasket Co., Ltd.
(Aichi Pref., Japan)
Land and building (Headquarters) 1,140 Basic investment
Nippon Gasket Co., Ltd.
Shiga Plant
(Shiga Pref., Japan)
Production facilities to manufacture gasket products  793 Basic investment, expansion, increasing production capacity
Building (Public and health building) 317 Basic investment
Taiho Corporation of America
Headquarters and Headquarters plant
(Ohio, USA)
Production facilities to manufacture bearings, etc. 337 New products, maintenance and renewal
PT. Taiho Nusantara
Headquarters and Headquarters plant
(Karawang, Indonesia)
Production facilities to manufacture bearings, etc. 100 Expansion, increasing production capacity
Taiho Corporation of Europe
Headquarters and Headquarters plant
(Ujhartyan, Hungary)
Production facilities to manufacture bearings, etc. 572 Expansion, increasing production capacity
Taiho Corporation of Korea
Headquarters and Headquarters plant
(Daegu, Korea)
Production facilities to manufacture bearings, etc. 71 Expansion, increasing production capacity
Taiho Kogyo Corporation of Yantai
Headquarters and Headquarters plant+
(Yantai, China)
Production facilities and building to manufacture bearing products (Plating line) 735 Expansion, increasing production capacity
Taiho Manufacturing of Tennessee LLC
(Tennessee, USA))
Production facilities to manufacture gasket products, etc. 195 New products
NHK Gasket (Thailand) Co., Ltd.
(Samut Prakan, Thailand)
Building (Production building) 250 Expansion, increasing production capacity