Taiho Kogyo Co., Ltd Business Report FY ended Mar. 2017
Financial Overview |
(in million JPY) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | Rate of Change (%) | Remarks | |
| Overall | ||||
| Sales | 108,953 | 107,288 | 1.6 | - |
| Operating income | 6,357 | 6,629 | (4.1) | - |
| Ordinary income | 6,265 | 6,297 | (0.5) | - |
| Profit for the year attributable to owners of the parent | 4,454 | 3,772 | 18.1 | - |
| Automotive Component Business | ||||
| Sales | 89,400 | 88,427 | 1.1 | - |
| Operating income | 9,750 | 10,245 | (4.8) | - |
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
-VISION 2020, the new mid-term management plan and future corporate policy, was announced in the fiscal year ending in March 2018. It calls for the Company to implement initiatives to achieve sustainable, corporate growth and progress over the mid-term.
Product Objectives
| Product | Objectives | |
|
Bearings |
Engine bearings |
-Mass-market segment: Development of next-generation processing lines and increase the product range of bearings that are compatible with lower fuel consumption systems. |
| 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 |
Initiatives for phasing-out internal-combustion engines
| Batteries | Converters | Motors | FCVs | |
| Sliding bearings | Resin coating Pressure welding |
Pressure welding | Resin coating Technology on sliding material |
Resin coating Technology on sliding material |
| Compressors | - | - | - | Resin coating Technology on sliding material |
| System parts (valves, pumps, turbos) |
- | Fluid-control technology Thermal energy recovery |
Heating and cooling management (cooling systems) |
Replacement valves, solenoid valves, pumps |
| Diecasts, resins | Resin forming | Sheet forming Thin membrane precision casting Resin forming |
Sheet forming Weight reduction Resin forming Thin membrane precision casting |
Sheet forming Scroll Resin forming Thin membrane precision casting |
| Gaskets | Sealing technology Rubber coating |
Sealing technology | Sealing technology | Sealing technology Rubber coating |
Outlook for FY ending Mar. 31, 2018 |
(in million JPY) |
| FY ending Mar. 31, 2018 (Forecast) |
FY ending Mar. 31, 2017 (Result) |
Rate of Change (%) |
|
| Sales | 110,000 | 108,953 | 1.0 |
| Operating income | 6,100 | 6,357 | (4.0) |
| Ordinary income | 6,000 | 6,265 | (4.2) |
| Profit for the year attributable to owners of the parent | 4,000 | 4,454 | (10.2) |
-Even though the Company forecasts that overall sales will be higher, income will be lower due to negative currency translation because of the strong yen.
| Sales by Products | (in million JPY) |
| FY ending Mar. 31, 2018 (Forecast) |
FY ending Mar. 31, 2017 (Result) |
Rate of Change (%) |
|
| Bearings | 45,800 | 43,974 | 4.2 |
| System Products | 15,300 | 15,334 | (0.2) |
| Die Castings | 9,300 | 9,558 | (2.7) |
| Gaskets | 14,600 | 14,982 | (2.6) |
| Facilities/Dies | 20,100 | 19,329 | 4.0 |
-The Company predicts that in the fiscal year that ends in March 2018, sales of bearings will be JPY 45.8 billion yen and will account for 41.5% of companywide sales.
- Orders for engine sliding bearings are forecast to increase, especially in China; and sales of transmission bearings are forecast to increase in markets outside of Japan.
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
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 estimated amount of capital spending within the corporate group in the fiscal year that ends in March 2018 is JPY 13,000 million yen. It will be spent mainly for the following.
| 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. | 2,132 | Switch over to new products; expand, and increase production capacity |
| Taiho Kogyo Co., Ltd. Hosoya plant (Aichi Pref., Japan) |
Production facilities to manufacture bearings, etc. | 2,849 | 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 | 1,232 | 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. | 863 | 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. | 254 | Switch over to new products; expand and increase production capacity |
| Taiho Seiki Co., Ltd. Headquarters and Headquarters plant (Aichi Pref., Japan) |
Production facilities to manufacture bearings, etc. | 900 | Expand and increase production capacity; streamline operations |
| TET Co., Ltd. Kasugai plant (Aichi Pref., Japan) |
Processing facilities | 117 | Switch over to new products; expand and increase production capacity |
| Taiho Gifu Co., Ltd. Headquarters and Headquarters plant (Gifu Pref., Japan) |
Production facilities to manufacture bearings, etc. | 1,228 | Expand and increase production capacity; streamline operations |
| Nippon Gasket Co., Ltd. Shiga Plant (Shiga Pref., Japan) |
Production facilities to manufacture bearings, etc. | 882 | 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. |
712 |
Switch over to new products; expand and increase production capacity |
| PT. Taiho Nusantara Headquarters and Headquarters plant (West Java, Indonesia) |
Production facilities to manufacture bearings, etc. | 33 | Expand and increase production capacity |
| Taiho Corporation of Europe Headquarters and Headquarters plant (Ujhartyan, Hungary) |
Production facilities to manufacture bearings, etc. | 195 | Expand and increase production capacity; streamline operations |
| Taiho Corporation of Korea Headquarters and Headquarters plant (Daegu, Korea) |
Production facilities to manufacture bearings, etc. | 279 | Expand and increase production capacity |
| Taiho Kogyo Corporation of Yantai Headquarters and Headquarters plant (Yantai, China) |
Production facilities to manufacture bearings, etc. | 820 | Switch over to new products |
| Hengye Bearing Materials Co.,Ltd (Changzhou) Headquarters and Headquarters plant (Changzhou, China) |
Production facilities to manufacture bearings, etc. | 433 | Expand and increase production capacity; streamline operations |
| Taiho Corporation of Thailand Headquarters office and plant （Pathum Thani Prov., Thailand） |
Production facilities to manufacture bearings, etc. | 35 | Expand and increase production capacity |
Capital Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | |
| Overall | 6,904 | 6,548 | 10,393 |
| Automotive Component Business | 6,559 | 6,266 | 9,809 |
Automotive Component Business
-The Company will make capital investments to replace old products with new ones, increase production capacity, and maintain and renew facilities. The details are as follows.
- Taiyo Gifu, Co., Ltd., a consolidated subsidiary in Japan, will make capital improvements to production facilities, in order to replace existing bearings with new ones and increase production capacity.
- Taiho Corporation of America will make capital improvements to production facilities, in order to replace existing bearings with new ones and increase production capacity.
R&D Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | |
| Overall | 3,549 | 3,398 | 3,209 |
| Automotive Component Business | 3,176 | 3,067 | 2,999 |
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
-The Company will accelerate the development of lubrication system components. Under a new joint project with a Japanese automaker, the company will co-develop a cam-shower that employs optimized lubricant passage design and enables the feeding of lubricant equally around an entire camshaft. The new cam-shower will help decrease lubricant consumption and reduce the extent oil pumps that feed lubricant are operated. As a result, the new product is expected to offer a roughly 1% improvement in fuel efficiency compared to conventional products. The Company has determined that the demand for technology that improves internal combustion engine fuel efficiency is still strong despite the advancement of development of vehicle electrification technology. To address these needs, the company will expand business activities from its mainstay bearings to include lubrication systems. (From an article in the Nikkan Jidosha Shimbun on June 20, 2017)
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.
-The Company will launch production of actuators for waste-gate valves, using a new design that will reduce the number of parts.