Taiho Kogyo Co., Ltd Business Report FY ended Mar. 2016
Financial Overview |
(in million JPY) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | Rate of Change (%) | Remarks | |
| Overall | ||||
| Sales | 107,288 | 98,221 | 9.2 | - |
| Operating income | 6,629 | 4,675 | 41.8 | - |
| Ordinary income | 6,297 | 4,973 | 26.6 | - |
| Profit for the year attributable to owners of the parent | 3,772 | 3,194 | 18.1 | - |
| Automotive Component Business | ||||
| Sales | 88,427 | 81,470 | 8.5 | - |
| Operating income | 10,245 | 8,125 | 26.1 | - |
Mid-term Management Plan
VISION2020
-The Company wants to create more environmentally friendly products such as bearings, as quickly as possible based on tribology, and deliver them to customers all over the world.
Mid-term Management Policies (from the fiscal year ending in March 2017 to the fiscal year ending in March 2019)
-Become one of the world’s most competitive companies by strictly focusing on technology, quality, and costs.
-Further strengthen its global foundation by making full use of human talent, organizational structure, and resources.
VISION2020 and the New Mid-term Management Plan
-The Company is aiming to set new records in the fiscal year that ends in March 2017. After that the Company intends to sustain growth by improving its profit structure.
Product Objectives
| Product | Objectives | |
|
Bearings |
Engine bearings |
-Increase sales in order to raise global market share |
| Bushes, washers | -Further build its global operating framework and increase sales by localizing production. | |
| Compressor parts | -Expand globally by positioning shoes and swash-plates as core products, and conduct R&D activities with a view toward the future. | |
| Other products | Die-cast products | -Increase sales by implementing new production methods (rotational-cast-hole method), making facilities/equipment more compact, and cutting costs. |
| Systems | -Reducing costs of vacuum pumps and making them more globally compatible. -Develop future technologies by making use of the Group’s current technologies |
|
| Gaskets | -Increase sales worldwide | |
| Facilities and dies | -Create synergy effects by making use of the Group-wide structure |
Outlook for FY ending Mar. 31, 2017 |
(in million JPY) |
| FY ending Mar. 31, 2017 (Forecast) |
FY ending Mar. 31, 2016 (Result) |
Rate of Change (%) |
|
| Sales | 109,000 | 107,288 | 1.6 |
| Operating income | 6,900 | 6,629 | 4.1 |
| Ordinary income | 6,400 | 6,297 | 1.6 |
| Profit for the year attributable to owners of the parent | 3,900 | 3,772 | 3.4 |
-The aim is to set new records in terms of sales and profits; and increase profit margin.
| Sales by Products | (in million JPY) |
| FY ending Mar. 31, 2017 (Forecast) |
FY ending Mar. 31, 2016 (Result) |
Rate of Change (%) |
|
| Bearings | 45,200 | 44,637 | 1.3 |
| System Products | 15,600 | 13,537 | 15.2 |
| Die Castings | 9,500 | 9,886 | (3.9) |
| Gaskets | 15,000 | 14,386 | 4.3 |
| Facilities/Dies | 17,900 | 18,638 | (4.0) |
-The Company predicts that in the fiscal year that ends in March 2017, sales of bearings will be JPY 45.2 billion yen and will account for 41.5% of companywide sales.
-The Company will grow its business by selling more bearings and localizing production, in order to increase its global market share.
-For the systems business, the Company predicts that sales of vacuum pumps will increase.
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
Common Engine Bearing
-In January 2014, the Company announced that It will promote development of common engine bearings for Toyota Motor Corporation, which is now pursuing a new parts-sharing framework called Toyota New Global Architecture (TNGA). TNGA shares parts among vehicles using the same modules and platforms to save costs and manpower. Toyota is planning to introduce new engines based on the TNGA strategy in and after the fiscal year ending in March 2016. The Company will develop bearings for the TNGA engines, making sure that they comply with the designated design and specifications. Generally speaking, each of the engine bearings demonstrates different heat resistance, abrasion resistance and other properties, depending on the treatment given on the surface of its lining. The Company currently combines and uses some aluminum alloys for a lining from 30 to 40 different brass or phosphor bronze- based aluminum alloys. The Company will limit the new bearing's material to one aluminum alloy and make fewer variations in size. This will allow the manufacturer to purchase the material and produce the bearing in a large quantity, which will lead to the Company's higher cost competitiveness.
New Facilities
-The Company announced that it will build a new plant for engine bearings in Japan. The new facility will be the third plant of the company's subsidiary, Taiho Gifu Corporation, in Mitake Town, Gifu Prefecture. The bearing processing line at the second plant will be relocated in phases after the completion of the third plant building, which is scheduled for April 2017. The new plant is expected to go on stream in the summer of 2017. The Company Group's first line solely for the research and development of bearing materials will be established in surplus space at the second plant. The Company aims to increase profit by speeding up research and development and also securing production capacity to prepare for future growth in demand. Approximately JPY 1.5 billion will be invested in the new plant, which will have a floor area of about 9,800 square meters. Construction work is scheduled to start in September 2016. Engine bearings will be produced using production equipment transferred from the second plant. (From an article in the Nikkan Jidosha Shimbun on September 7, 2016)
-The Company announced that its wholly-owned subsidiary, Taiho Gifu Corporation, plans to construct its third plant within the premises. The new facility will allow Taiho Gifu to increase its production capacity of automotive parts such as engine bearings, secure production space for future products, and install new material development facilities for bearings. Approximately JPY 1.5 billion will be invested in the new plant, which will have a floor area of 9,800 square meters. The construction work is scheduled to start in September 2016 and completed by April 2017. (From a press release on August 31, 2016)
-The Company has started developing a new engine bearing production line that will be 30 to 40 % shorter than its latest production line. The latest production system called the Ryohin Renka (RR) Line (Ryohin Renka means good but low-cost products in Japanese) reduced the length of a production line to 22 meters from 44 meters by integrating some processes. The Company already introduced the RR Line at its some plants in Japan and also plans to replace current production lines at its Indonesian and Chinese facilities with the RR Line. As a next step, the Company intends to develop a more compact line by introducing smaller stamping equipment to optimize the processes. By downsizing its production line, while maintaining the same capacity, the Company aims to enhance its flexible production structure globally. The company hopes to work out the schedule for the introduction of the new compact line during the period of its next mid-term business plan starting in April 2016. (From an article in the Nikkan Jidosha Shimbun on November 16, 2015)
-Capital investment for the entire Group is planned to be JPY 11,000 million, broken down as follows.
| Plant | Facilities to be built | Planned investment (in million JPY) |
Objective |
| Taiho Kogyo Co., Ltd. Headquarters and Headquarters plant (Aichi Pref., Japan) |
Production facilities to manufacture die casting products, etc. | 509 | Renew products; switch over to new products |
| Taiho Kogyo Co., Ltd. Hosoya plant (Aichi Pref., Japan) |
Production facilities to manufacture bearings, etc. | 888 | Switch over to new products; expand, and increase production capacity |
| Taiho Kogyo Co., Ltd. Shinohara plant (Aichi Pref., Japan) |
Production facilities to manufacture assembly products | 862 | Switch over to new products; expand and increase production capacity |
| Taiho Kogyo Co., Ltd. Kyushu plant (Kagoshima Pref., Japan) |
Production facilities to manufacture bearings, etc. | 474 | Switch over to new products; expand and increase production capacity |
| Taiho Kogyo Co., Ltd. Koukai plant (Aichi Pref., Japan) |
Production facilities to manufacture bearings, etc. | 235 | Switch over, expand to new products; streamline operations |
| Taiho Seiki Co., Ltd. Headquarters and Headquarters plant (Aichi Pref., Japan) |
Production facilities to manufacture bearings, etc. | 380 | Expand and increase production capacity |
| TET Co., Ltd. Kasugai plant (Aichi Pref., Japan) |
Processing facilities | 197 | Expand and increase production capacity |
| Taiho Gifu Co., Ltd. Headquarters and Headquarters plant (Gifu Pref., Japan) |
Production facilities to manufacture bearings, etc. | 440 | Switch over to new products |
| Nippon Gasket Co., Ltd. Shiga Plant (Shiga Pref., Japan) |
Production facilities to manufacture gasket products | 142 | Switch over to new products; expand and increase production capacity |
| Taiho Corporation of America Headquarters and Headquarters plant (Ohio, USA) |
Production facilities to manufacture bearings, etc. |
236 |
Switch over to new products |
| PT. Taiho Nusantara Headquarters and Headquarters plant (West Java, Indonesia) |
Production facilities to manufacture bearings, etc. | 29 | Expand and increase production capacity |
| Taiho Corporation of Europe Headquarters and Headquarters plant (Ujhartyan, Hungary) |
Production facilities to manufacture bearings, etc. | 15 | Switch over to new products |
| Taiho Corporation of Korea Headquarters and Headquarters plant (Daegu, Korea) |
Production facilities to manufacture bearings, etc. | 67 | Switch over to new products |
| Taiho Kogyo Corporation of Yantai Headquarters and Headquarters plant (Yantai, China) |
Production facilities to manufacture bearings, etc. | 409 | Switch over to new products |
| Hengye Bearing Materials Co.,Ltd (Changzhou) Headquarters and Headquarters plant (Changzhou, China) |
Production facilities to manufacture bearings, etc. | 86 | Expand and increase production capacity |
| Taiho Corporation of Thailand Headquarters office and plant （Pathum Thani Prov., Thailand） |
Production facilities to manufacture bearings, etc. | 7 | Switch over to new products |
Capital Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | |
| Overall | 6,548 | 10,393 | 7,591 |
| Automotive Component Business | 6,266 | 9,809 | 6,439 |
Automotive Component Business
-The Company will make capital investments in and outside Japan to switch-over to producing new products, increase production capacity, and maintain and renew facilities. The following outlines the projects:
- Subsidiary in Japan: Investment in facilities and equipment for bearings at Taiho Kogyo Gifu, in order to switch over to producing new products and increase production capacity.
- Subsidiary outside Japan: Investment in facilities and equipment for bearings at Taiho Kogyo Corporation of Yantai, in order to switch over to producing new products and increase production capacity.
R&D Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | |
| Overall | 3,398 | 3,209 | 3,268 |
| Automotive Component Business | 3,067 | 2,999 | 3,064 |
R&D Structure
-The following functions (which are located at the Technical R&D Center in Toyota City, Aichi Prefecture) conduct R&D activities that are based on tribology and respond to various issues: the fundamental R&D department, product-development department, and the production-technology development department. In addition, the company has a friction technology R&D center, an engine-testing center, and a production-technology development center.
R&D Activities
Bearings
-The Company’s plastic coated bearings are being used in hybrid engines and engines with stop/start function. They effectively respond to frequent starts/stops and help improve fuel efficiency.
-The development and production of resin-coated crankshafts that reduce friction.
-The development and production of engine bearings compatible with new grooved engines that control the volume of engine oil.
-The Company is in the process of developing high-performance, new aluminum and carbon bearing materials for bushes.
-The development and production of special bearings for compressors used in car air-conditioning systems, such as high-performance, lightweight, low-cost swash plates.
Die-cast products
-The delivery of high-precision, low-cost products developed through CAE technology, which optimize the flow of cooling and heating, and which are thinly and precisely die-cast.
Systems
-Production was launched of switch valves, which are needed to switch on/off turbocharger high temperature exhaust gas emissions at multiple intervals. They are based on EGR valves.