Kasai Kogyo Co., Ltd. Business Report FY ended Mar. 2014

Business Highlights

Financial Overview

(in million JPY)
  FY ended Mar. 31, 2014 FY ended Mar. 31, 2013 Rate of
Change (%)
Sales 179,475 146,348 22.6 1)
Operating income 8,954 3,333 168.6 -
Ordinary income 9,637 3,996 141.2 -
Net income 5,891 1,358 333.8 -

1) Sales
-Sales increased 6.1 percent year-on-year supported by growth in vehicle sales before the consumption tax hike in April 2014.

<North America>
-Sales increased 28.6 percent year-on-year, because demand for vehicles recovered reflecting the positive economic effects in the U.S.

-Sales increased 16.2 percent year-on-year thanks to strong sales at the Company's major customers.

-Sales increased 60.6 percent year-on-year supported by strong performances at the Company's major customers in China and ASEAN countries.

Joint Ventures

Dissolution of global business partnership with Grupo Antolin
-The Company and Spanish automotive interior parts manufacturer Grupo Antolin-Irausa, S.A. have agreed to dissolve their global business partnership. The Company is a supplier of door trims which sells most of its products to Japanese automakers. Meanwhile, Antolin produces headliners mainly for European automakers. The two companies therefore believed that they could establish a complementary partnership, which would generate substantial benefits to increase orders by utilizing each other's plants. They tried to set up joint ventures in order to supply parts mainly to Nissan and Renault more efficiently. However, they found the gaps in their business styles and concluded that it would be difficult to establish the business model that can quickly meet their customers' requirements. (From an article in the Nikkan Jidosha Shimbun on January 10, 2014)

To establish a joint venture with Dongfeng Visteon Automotive Trim Systems
-The Company announced that it will establish a new joint venture with Dongfeng Visteon Automotive Trim Systems Co., Ltd. (DFV) to manufacture and sell automotive interior components. As Nissan Motor Co., Ltd. is promoting local production of its Infiniti models in China, the Company is poised to expand its production capacity for door trims to meet the needs from the customer. The new company, which will be called Dongfeng Kasai (Xiangyang) Automotive Trim Systems Co., Ltd., will be set up in the Xiangyang Hi-Tech Industrial Development Zone, Hubei Province by the end of this month. It will be capitalized at CNY 77 million (approximately JPY 1.2 billion), 35 percent of which will be invested by Kasai Kogyo and the remaining 65 percent will be invested by DFV. The new company will be able to produce interior parts for 200,000 vehicles per year by the fiscal year ending March 2017. Sales are expected to reach CNY 500 million (approximately JPY 7.5 billion) by the same year. (From an article in the Nikkan Jidosha Shimbun on November 12, 2013)


-The Company announced that it will transfer 76 percent of the outstanding shares in Iwate Kasai Co., Ltd., its wholly owned manufacturing subsidiary in northeast (Tohoku) Japan, to Kojima Industries Corporation, a Toyota-affiliated auto parts supplier. Iwate Kasai was established in 2005 to supply interior components to a vehicle assembler in the Toyota Group. As Kojima Industries has recently been increasing outsourcing of production to Iwate Kasai, it has decided to acquire Iwate Kasai's shares. The shares will be purchased through Tohoku AT Co., Ltd., which was set up in January 2013 to strengthen Kojima Industries' business in the Tohoku area. As a result of this transaction, Kojima Industries will have its first manufacturing base in the region. The transfer is scheduled to close in January 2014, and Iwate Kasai will change its corporate name to Tohoku KAT Co., Ltd. Tohoku KAT's sales are expected to reach JPY 1.2 billion in the fiscal year ending March 2015. Kasai Kogyo will continue to own the remaining 24 percent share in the business. (From an article in the Nikkan Jidosha Shimbun on November 15, 2013)

Recent Development Outside Japan

-The Merthyr Plant of R-TEK Ltd. started a new project for the Jaguar Land Rover. Delivery of new products is scheduled to begin in 2015.

-Kaifeng Kasai Automotive Trim Parts Co., Ltd. in Hunan Province, China began a new project for Dongfeng Motor's Venucia brand. The subsidiary will supply new products for the Venucia, starting in 2015. 

Business Plan

-The Company mapped out a new long-term management plan, KR10 (Kasai Realize 10), which covers the period between 2014 and 2023. Plans are to offer excellent quality to global customers by standardizing manufacturing methods and processes, to create its "only one" technology and develop it into a "number one" technology, and to generate new business targeted at the automotive industry. Following are financial targets for the final year of the plan:
  • Sales: JPY 300,000 million
  • Operating profit margin: 8 percent
  • Global market share (interior trim): 10 percent

Outlook for FY ending Mar. 31, 2015

(in million JPY)
FY ending Mar. 31, 2015
FY ended Mar. 31, 2014
(Actual Results)
Rate of
Change (%)
Sales 196,000 179,475 9.2
Operating income 10,000 8,954 11.7
Ordinary income 9,700 9,637 0.7
Net income 4,500 5,891 (23.6)

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)


R&D Expenditure

(in million JPY)
  FY ended Mar. 31, 2014 FY ended Mar. 31, 2013 FY ended Mar. 31, 2012
Overall 1,128 824 879

-During this fiscal year, the Company is spending its entire budget allocated for R&D, in Japan.

R&D Structure

-The Company's R&D activities are mainly conducted at the Advanced Product and Production Method Development Division.

-A new development center in China began operating in 2014, which will be followed by operation launch at a new North American development center by the end of the same year. In addition, the Company is currently strengthening its development structure in Mexico.

R&D Activities

Weight Reduction
-Weight reduction is the main focus of R&D activities on doors, pillars, ceilings, and trunk-trim. In addition, the Company is working to achieve an optimum balance between products that are lower in cost but still offer the highest levels of quality and weight reduction.

-Based on a proprietary structural design, the Company has succeeded in injection-molding impact-absorbing products that offer greater safety to vehicle occupants during lateral collisions. These products, which are lower in price compared to conventional products, still offer a high level of performance. The Company is delivering these to OEMs for mounting on mass-marketed vehicle models.

-The Company developed a side collision analysis technology using CAE tools. It has already tested the practicality of the new technology in bench testing. The collision analysis technology is expected to improve the driving safety of production vehicles.

Environmental protection
-The Company is working to reduce and/or eliminate VOC (volatile organic compounds) in materials, as well as changing to alternative production methods. It is changing to water-soluble adhesives and hot-melting processes; as well as mixing coloring agents directly into plastics instead of relying on paint.

-The Company is working to find alternatives for plastics, by using plant-based resins (polylactic acid); and alternatives to vinyl chloride materials, changing to TPO (thermoplastic elastomer olefin) and TPU (thermoplastic elastomer urethane).

Cabin-interior comfort
-Working under the aim of further improving soundproofing, the Company is developing high-performance products by making use of acoustic theory and CAE, conducting experiments on materials by utilizing reverberation rooms and actual vehicles that use four-wheel drive chassis dynamos.

-The Company is working to make products for cabin ceilings that have even further improved insulating properties, as it strives to offer a more comfortable temperature in the cabin-interior, while reducing fuel consumption.

Appeal and convenience
-The Company is designing products for cabin-interiors, such as decorative trim for door coverings and ornamentation for door-waists, making these types of trim more stylish, more pleasant to the touch by using innovative surface treatments, and giving them a more solid feel. In addition, the Company is working on developing interior illumination technology that helps create a stylish cabin space at night. It is also developing plastic pillars and trunks that make scratches less noticeable.

Investment Activities

Capital Expenditure

(in million JPY)
FY ended Mar. 31, 2014 FY ended Mar. 31, 2013 FY ended Mar. 31, 2012
Japan 3,440 3,121 2,697
North America 6,052 6,843 1,942
Europe 1,027 647 291
Asia 2,773 1,820 1,166
Total 13,294 12,433 6,097

Investments in Japan

Expanding door trim production by adding injection molding machines to Yorii Plant
-The Company will expand its production capacity at its Yorii Plant in Saitama Prefecture, which manufactures automotive interior components such as door trims and headliners. The factory will add 1,300-ton and 1,600-ton injection molding machines to step up production of door trims. Having been awarded the program for Honda's new Fit, the Company anticipates a possible shortage in capacity next year. The two machines will be transferred from other Kasai Kogyo facilities. The Company aims to hold down investment while meeting an expected increase in demand in the foreseeable future. (From an article in the Nikkan Jidosha Shimbun on September 25, 2013)

Introduction of automatic production line at Yorii Plant
-The Company will construct an automatic production line to assemble door trims at its Yorii Plant, Saitama Prefecture by the end of 2013. The full-automation of assembly processes such as welding realizes optimal deployment of staff. Already having introduced the automatic assembly line at another facility, which supplies components to Nissan Motor, this year, the Company has decided to launch this project also at the Yorii Plant, which manufactures interior parts for Honda Motor. By accelerating installations of these automatic production systems, the Company is looking to improve its cost competitiveness and achieve stable product quality in order to win more orders in the global market. (From an article in the Nikkan Jidosha Shimbun on July 12, 2013)

Investments Outside Japan

-The Company will build a plant in Indonesia. In April 2014, the plant will begin production of interior parts for small cars and sports utility vehicles (SUVs) for Nissan Motor Co., Ltd. This will allow the Company to boost its yearly sales from JPY 1.2 billion to approximately JPY 3 billion. The new plant will be constructed on a 5,000-square-meter site near the Company's first plant in Karawang, close to Jakarta. The construction project will cost around JPY 1.2 billion. The Company plans to hire approximately 100 new workers in 2015 for the new facility. (From an article in the Nikkan Jidosha Shimbun on August 21, 2013)

-The Company is considering establishing an additional plant in Mexico where vehicle production volume is increasing, as automakers shift their production lines from North America. The Company currently has two plants in Mexico.

Planned Capital Investment

(As of Mar. 31, 2014)
Company name
Site name
Type of facility Planned investment
(in million JPY)
Start Planned completion
Headquarters Plant
(Kanagawa Pref., Japan)
Facilities to assemble automotive interior parts, dies, tools, and other items 3,783 Apr.
Mie Kasai Co., Ltd.
(Mie Pref., Japan)
Facilities to assemble automotive interior parts, tools and other items 159 Apr.
Gunma Kasai Co., Ltd.
(Gunma Pref., Japan)
Facilities to assemble automotive interior parts, tools and other items 407 Apr.
Kyushu Kasai Co., Ltd.
(Oita Pref., Japan)
Facilities to assemble automotive interior parts, tools and other items 304 Apr.
M-TEK Inc.
(Tennessee, USA)
Facilities to assemble automotive interior parts, tools and other items 3,121 Apr.
Kasai Mexicana S.A. de C. V.
(Guanajuato, Mexico)
Facilities to assemble automotive interior parts, tools and other items 1,430 Apr.
R-TEK Ltd.
(Tyne and Wear, UK)
Facilities to assemble automotive interior parts, tools and other items 766 Apr.
Guangzhou Kasai Automotive Interior Trim Parts Co., Ltd.
(Guangzhou, China)
Facilities to assemble automotive interior parts, tools and other items 1,073 Apr.
Kasai Tec See Co., Ltd.
(Ayutthaya, Thailand)
Facilities to assemble automotive interior parts, tools and other items 254 Apr.
PT. Kasai Tec See Indonesia
(West Java, Indonesia)
Facilities to assemble automotive interior parts, tools and other items 94 Apr.