Kayaba Industry Co., Ltd. Business Report FY2008
|Financial overview||( in millions of JPY )|
|-||FY2008||FY2007||Rate of Change
|Sales||329,262||387,080||(14.9)||Sales declined largely because of a sudden decline in demand in the automotive and construction machinery markets in the latter half of the year.|
|Operating income||49||18,271||(99.7)||The Company's efforts to reduce fixed costs ended without being able to offset: (1) higher material prices in the first half of the year and (2) the sudden drop in sales in the latter half.|
|Ordinary income||(1,395)||17,643||-||Income decreased partly because of negative currency translation resulting from the appreciation of the yen.|
|Current net income||(5,229)||8,397||-||The Company reported a loss in net income partly because of an extraordinary loss stemming from reorganization costs and an impairment loss on fixed assets at its subsidiaries outside Japan.|
|Sales||317,707||374,428||15.1||Refer to the explanations below.|
Business results of hydraulic products used in four-wheeled
<Hydraulic shock absorbers>
- Business results in the first half of the year were strong, thanks to increased production in Japan and increased sales in Europe.
-In the second half, the global slump in auto sales caused a need for drastic inventory control, as well as a need to curtail auto production in almost all regions including Japan. As a result, its sales declined 15.7% year-on-year to 123,300 million yen.
- Business results for hydraulic devices, mostly those used in power steering systems, for four-wheeled vehicles remained strong in the first half, thanks to increased needs for hydraulic pumps used in electric power steering systems and CVTs.
- In the latter half, its sales declined 19.6% year-on-year to 38,000 million yen, due to a significant cut in auto production.
|Basic Technology Center||Sagamihara City, Kanagawa Pref.||Conducting basic research on hydraulic equipment and automobile devices and developing new products and technologies.|
|Product Engineering Center||Kani City,
|In charge of development activities that improve product appeal such as enhancing performance and reducing costs, etc.|
|R&D Expense||( in millions of JPY )|
R&D activities (FY2008)
-The Company developed an accumulator, which is a core component of the Company's proprietary Relative Absorber System (REAS) that offers both a smooth ride and easily controlled driving. This accumulator, which comes with a damping valve, was jointly developed with KYB Suspensions Europe, S.A., an affiliate of the Company included in its consolidated financial statements. The Company is supplying these accumulators to PSA Peugeot Citoren, packaging them as a system combined with shock absorbers.
-The Company is conducting joint research activities with Nagano National College of Technology on the method of design theory analysis regarding warm gears used in electric power steering systems.
-The company completed joint research activities with Tokyo University and Toyota Motor Corporation on the control of four-wheel suspension systems by using electromagnetic power, when taking into consideration balanced energy. These activities achieved the desired outcome.
Automobile-related licensing agreements (as of Mar. 31, 2009)
|Kayaba-UMW Malaysia Sdn. Bdn.||Malaysia||Shock absorbers for automobiles, front forks and oil cushion units for two-wheeled vehicles||
| Oct. 13,
|P. T. Kayaba Indonesia||Indonesia||Shock absorbers for automobiles, front forks and oil cushion units for two-wheeled vehicles||
| Mar. 18, 1994
|KYB (Thailand) Co., Ltd.||Thailand||Shock absorbers for automobiles, front forks and oil cushion units for two-wheeled vehicles||
| Feb. 01,
|KYB Manufacturing North America, Inc.||USA||Shock absorbers for automobiles||
| Oct. 01,
|KYB Steering Spain, S.A.||Spain||Automobile hydraulic equipment||
| Jan. 01,
|KYB Suspensions Europe, S.A.||Spain||Shock absorbers for automobiles||
| Oct. 01,
|Capital Expenditure||( in millions of JPY )|
- The Company announced that it plans to create a new testing facility in Gifu Prefecture, Japan in order to develop and conduct testing of suspension systems and steering systems for vehicles and motorcycles. The new dedicated proving ground will enhance the Group's capabilities and efficiencies to develop products with improved levels of reliability, shortening development lead time. Construction of the new facility will begin this month and is scheduled to be completed in April 2010. It will be built on 595,000 square meters of land bordering Minokamo City and Kawabe-cho, Gifu Prefecture. The total investment is expected to reach around 2.7 billion yen. (From an article in the Nikkan Jidosha Shimbun on Aug. 5, 2008)
- The Company is working on its plan to start producing shock absorber brackets at KYB Manufacturing North America, Inc. in the US Switching from outsourcing to in-house production of these components will allow the company to reduce procurement costs and delivery expenses. Establishment of the additional production lines with stamping machines and other equipment will involve tens of millions of investments. KYB Manufacturing North America was established in 1986 in Franklin, Indiana. It will start producing junction parts including knuckle brackets, which connect the bottom of shock absorbers with axles, as well as harness brackets, which connect shock absorbers with ABS sensors and other systems. (From an article in the Nikkan Jidosha Shimbun on Feb. 4, 2009)