Toyoda Gosei Co., Ltd. Business Report FY ended Mar. 2017
Financial Overview
(in millions of JPY)
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | Rate of Change (%) |
Factors | |
| Overall | ||||
| Sales | 755,601 | 781,886 | (3.4) |
-Overall sales were lower due to negative currency translation and lower sales volumes at the optoelectronics business. |
| Operating income | 40,675 | 42,824 | (5.0) |
-Overall income decreased as a result of the negative currency translation mentioned in the above and an overall decrease in total overall sales, despite of the fact that sales at the automotive business actually increased and rationalization initiatives were implemented by the Company. |
| Ordinary income | 39,007 | 41,490 | (6.0) | - |
| Net income | 16,233 | 20,255 | (19.9) | - |
| Automotive component business | ||||
| Sales | 737,049 | 747,089 | (1.3) | -Sales showed a decrease due to negative currency translation |
| Operating income | 46,256 | 43,045 | 7.5 | -Income increased, thanks to effective sales activities, lower initial investment costs in Europe, and effective rationalization initiatives implemented worldwide |
Consolidating LED Production in Japan
-The Company announced that it will discontinue LED production at its Saga Plant in Saga Prefecture by the end of September and transfer it to the company's Heiwacho Plant in Aichi Prefecture and its subsidiary, TS Opto Co., Ltd., in Chiba Prefecture. The company plans to reduce its LED production capacity and aims to improve efficiency. Moving forward, the company will focus on increasing sales for its LED business in Southeast Asia where demand for lighting is growing and on winning more order for industrial and automotive lighting products. The Saga Plant was converted to an LED production facility in 2009, but is now expected to switch back to producing automotive components. (From an article in the Nikkan Jidosha Shimbun on August 31, 2016)
Investments Outside Japan
-The Company announced it will construct a new airbag plant in Bawal, Haryana, India. New operations are expected to begin in March 2017. The Company will invest approximately INR 550 million (approximately JPY 900 million) in this project. Safety regulations have been tightened in India, and airbags are expected to become required. The facility will serve as the company's fourth plant in India and the second plant of Toyoda Gosei Minda India Private Limited, a subsidiary established in 2008 that currently operates a plant in Alwar, Rajasthan. The two plants, although located in different states, will be conveniently located in relation to each other. In addition to producing driver airbags and passenger airbags, the new plant will also manufacture products like steering wheels and weatherstrips, mainly for Japanese OEMs' plants in India. (From an article in the Nikkan Jidosha Shimbun on July 15, 2016)
-The Company announced that it will increase weatherstrip production capacity in Mexico to approximately 1.5 times the current level by 2020. The Company is aiming to meet an increase in automobile production in North America including Mexico. The Company will invest USD 34.5 million (JPY 3.45 billion) in the project. The number of employees will grow to 1,450 in 2020, an increase of 540 from the headcount at the end of March 2016. Weatherstrip production capacity will be increased at Toyoda Gosei Automotive Sealing Mexico, S.A. de C.V. (TGASMX), a wholly-owned sub-subsidiary of the Company. TGASMX will add production facilities at its plant in San Luis Potosi City, Central Mexico. It will also acquire adjacent land to introduce prototype fabrication equipment for smooth production preparation. (From an article in the Nikkan Jidosha Shimbun on August 25, 2016)
-The Company announced that its new Mexican subsidiary Toyoda Gosei Irapuato Mexico, S.A. de C.V. (TGIMX) began operating and held an opening ceremony. TGIMX will provide components like radiator grilles, console boxes, and plastic fuel filler pipes to automakers in the Americas. In addition, the subsidiary plans to manufacture plated products, starting in the summer of 2017. The Company has three other production subsidiaries in Mexico. Its Mexican operations now cover all four categories in the Company's automotive parts business with TGIMX's inauguration. (From an article in the Nikkan Jidosha Shimbun on May 25, 2016)
-The Company announced on April 14 that GDBR Industria e Comercio de Componentes Quimicos e de Borracha Ltda. (GDBR), a subsidiary of the Company in Brazil, held an opening ceremony on April 13, Brazil time. GDBR, The Company 's first production facility in South America, produces rubber sealing parts like door weatherstrips, interior and exterior parts like plastic instrument panel components, and safety systems like side airbags. It is located in Itapetininga, Sao Paulo, where it has a facility with a floor area of 18,000 square meters and employs about 260 people. GDBR started producing automotive parts in January 2015. Moreover, the Company acquired a stake in a Brazilian producer of plastic automotive parts in November 2015. These two Brazilian facilities provide local parts supply to Toyota Motor Corporation and other automakers. (From an article in the Nikkan Jidosha Shimbun on April 16, 2016)
R&D Activities
Development focus is set on the following areas:
-Advanced products and technology for next-generation vehicles such as bio-fuel vehicles, hybrid vehicles, electric cars, and fuel cell vehicles
-Materials, products, and technology that comply with various environmental regulations
Product Development
-Plastic fuel-filler pump: Metal parts were replaced with plastic ones, reducing the overall weight of the pump.
-Capless fuel filler or opening: This latest fuel filler or opening is capless, meaning that there is no need to open and close any cap when filling the car with gas.
-Crystal acrylic grille: A transparent grille with a three-dimensional design
-Steering wheel with warning signal: This steering wheel signal emits a warning sound to prevent accidents from happening, when drivers are inattentive or dozing/sleeping
-Power semiconductors:
-The Company has utilized gallium nitride (GaN) to develop the world's first 1.2 kV class power semiconductor device chip. The new chip is capable of large current operation that exceeds 20 A. GaN is a key material in blue LEDs. Since 2010, Toyoda Gosei has conducted research to develop power semiconductors that use GaN. The technology can be applied to the power controllers of hybrid vehicles, which handle large amounts of power. The company is aiming to achieve commercial application by around the period 2018 - 2020. The Company used the GaN crystal growth technology it has cultivated in the development and manufacturing of blue LEDs in the development of the power semiconductor. (From an article in the Nikkan Jidosha Shimbun on July 9, 2016)
-Developed Rubber that Regains Original Shape:
-The Company has established material technology for rubber that readily regains its shape even after force has been applied for long intervals at high temperatures. The technology is expected to be used in the battery units that seal parts and other high-functional components of electric vehicles, plug-in hybrid vehicles, and fuel cell vehicles. The company is planning to put it into practical application around 2020. The Company has optimized the rubber mix design with a new selection of chemicals that contribute to heat resistance, and developed rubber material formulation technology that makes the rubber twice as likely to regain its shape, while also allowing it to stretch more than four times the original shape. (From an article in the Nikkan Jidosha Shimbun on October 25, 2016)
R&D Structure
-R&D activities are conducted globally through cooperation among several organizations within the Company: the R&D center; Production development technology department; Opto Electronics business engineering department, and Engineering departments at each business segment outside Japan, namely Toyota Gosei North America Corporation, Toyoda Gosei Asia, Toyoda Gosei (Shanghai), and Toyota Gosei Europe (Europe & Africa).
R&D Facilities
| Kitajima Technical Center | Aichi Pref., Japan |
| Miwa Technical Center | Aichi Pref., Japan |
| TGR Technical Center, LLC | Plymouth, MI, USA |
| Toyoda Gosei North America Corporation | Troy, MI, USA |
| Toyoda Gosei Europe N.V. | Belgium |
| Toyoda Gosei Asia Co., Ltd. | Chomburi, Thailand |
| Toyoda Gosei (Shanghai) Co., Ltd. | Shanghai, China |
Technology Licensing-in Agreement |
(As of Mar. 31, 2017) |
| Company (Country) |
Contract | Period |
| Intier Automotive Interiors of America (USA) |
A patent and expertise license agreement for urethane spray surfaces | Nov. 18, 2002 - May 10, 2019 |
| Daimler AG (Germany) |
A patent for a cover used in millimeter-wave radar | Nov. 10, 2011 - Sep. 23, 2019 |
Technology Licensing-out Agreement |
(As of Mar. 31, 2017) |
| Company (Country) |
Contract | Contract period |
| Stant Manufacturing, Inc. (U.S.) |
An expertise license agreement for conductive fuel caps | Nov. 17, 1998 - Dec. 21, 2018 |
| Magna Steyr Fuel Systems (Germany) |
A patent license agreement for conductive fuel caps | Feb. 26, 2004 - Dec. 21, 2018 |
| Pong Codan Rubber (M) Co., Ltd. (Malaysia) |
A technological licensing agreement on weatherstrips | Jul. 16, 2007 - Jul. 15, 2017 |
R&D Expenditure |
(in millions of JPY) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | |
| Automotive Parts Business | 25,000 | 25,600 | 26,600 |
| Non-Automotive Parts Business | 2,100 | 2,700 | 2,900 |
| Total | 27,100 | 28,300 | 29,500 |
Capital Expenditure |
(in millions of JPY) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | |
| Automotive Parts Business | 54,800 | 53,500 | 63,400 |
| Non-Automotive Parts Business | 400 | 800 | 1,100 |
| Total | 55,200 | 54,400 | 64,700 |
-Overall capital expenditure for FY ending March 2018 is planned to be JPY 64,000 million (JPY 63,400 million for Automotive Parts Business).
Contracts
-The Company announced that its "capless fuel filler" has been adopted for Nissan Motor Co., Ltd.'s new Serena, or a model produced and sold in Japan, for the first time. The capless fuel filler allows users to refuel without opening and closing the fuel cap. (From an article in the Nikkan Jidosha Shimbun on September 2, 2016)
Outlook for FY ending Mar. 31, 2018 |
(in millions of JPY) |
| FY ending Mar. 31, 2018 (Forecast) |
FY ending Mar. 31, 2017 (Actual Results) |
Rate of Change (%) |
|
| Sales | 730,000 | 755,601 | (3.4) |
| Operating income | 43,000 | 40,675 | 5.7 |
| Ordinary income | 43,000 | 39,007 | 10.2 |
| Net income | 24,000 | 16,233 | 47.8 |
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)