Taiho Kogyo Business Report FY2007
Business Highlights
Financial Overview
(in million JPY) |
FY2007 | FY2006 | Rate of Change | Factors |
Overall | ||||
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
-China
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
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
(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. | 580 |
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 |
Subsidiaries | |||
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. Headquarters (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 |