FALTEC Co., Ltd. Business Report FY ended Mar. 2013

Business Highlights

Recent Years

Relisted on the second section of Tokyo Stock Exchange

-The Company was relisted on the second section of the Tokyo Stock Exchange on March 19, 2013. The day ended with the closing price of 4,525 yen, 585 yen higher than the opening price of 3,940 yen. The automotive parts manufacturer went public for the first time in five years and four months, after being delisted in November 2007. The company is poised to further improve its profitability and enhance its competitiveness in the global market as a listed company. (From an article in the Nikkan Jidosha Shimbun on Mar. 21, 2013)

Acquired by TPR

-In 2012, TPR Co., Ltd. announced that it will purchase 57.39% of all issued shares of Faltec Co., Ltd., which will then be its subsidiary. It will pay 8.1 billion yen to an investment fund, which currently holds 72.8% of Faltec shares, to purchase the shares. It does not plan to change Faltec's management through the ownership. TPR specializes in manufacturing engine parts. While the company expects that demands for engine parts should grow for the immediate future with expanding automobile demands in emerging markets, it also predicts that demands for engine parts should decline in the long term along with increasing HVs, which should reduce the number of engine cylinders, and with growing EVs. TPR has acquired some businesses in the past in order to increase its long-term management stability and this time, the investment fund has proposed the stock transfer. The shares will be transferred in early April. (From an article in the Nikkan Jidosha Shimbun on March 1, 2012)   

Business Overview

-In 2012, the Company said that the Group is expecting to score a record-high operating profit of 3.2 billion yen during the year ending March 2012. Compared with the previous year's result, the figure represents a 77 percent increase. Sales are projected to climb to 73.7 billion yen, up 4.9 percent year-on-year. Despite negative impacts of the Great East Japan Earthquake and the heavy flooding in Thailand, the Company was able to improve its profit largely thanks to the effects of its restructuring efforts and increased business with its major customers. During the first half of the fiscal year (April through September 2011), sales stood at 34.7 billion yen, the same level as the previous year. Yet operating profit gained 45 percent from last year to 1.3 billion yen, hitting a new record for the first half year period. Sales in the second half (October 2011 through March 2012) are likely to exceed those in the same period last year, driven by production resumption by automakers, especially Nissan and Honda. (From an article in the Nikkan Jidosha Shimbun on January 18, 2012)  

Business Partnership

-In 2011, the Company announced that it will form a business alliance with SRG Global (headquarters: Michigan, U.S.A.). The collaboration will allow the two companies to develop cooperation in a mutual complementary form by leveraging their worldwide plants for automotive exterior products. Both companies intend to meet demand from its customers to procure parts locally in emerging markets by supplying each other with products made at their own plants, while minimizing risks in launching new operations in new markets. Based on the partnership agreement, the Company will supply exterior plastic products and molds made in Asia to SRG, which will provide the Company with its products made in North America, South America and East Europe. Japanese automakers, which are Faltec's key customers, are planning to step up production in emerging markets using their global platforms. The Company is poised to enhance support to these companies through collaboration with SRG that has a strong presence in North and South American regions, which will eliminate needs to make new and heavy investments. (From an article in the Nikkan Jidosha Shimbun on November 19, 2011)

Recent Development Outside Japan

-In 2010, the Company announced that it is shifting supply of automobile exterior components for vehicles produced in Thailand from exporting from Japan to local sourcing by consigning production to local parts makers starting in January 2011. This is the first time that the Company has set up its own supply base of components in Thailand urged by its main customer Nissan to move to local procurement. TKT, a Thai parts maker based in Bangkok, will be contracted to supply plastic exterior components. Starting with small size products, such as bumper finishers and rear spoiler finishers, production items will be expanded to include major components like front grilles by fiscal 2012. Deliveries of the products will begin in January 2011 to Nissan's production facilities in Thailand through a local distributor Faltec Thailand that was established at the end of September.(From an article in the Nikkan Jidosha Shimbun on November. 10, 2010)

Business in Japan

-In November 2007, M.H. Investment Ltd. acquired shares in the Company through a tender offer. As the amount met the criteria for delisting, the Company's stock was delisted from the second section of the Tokyo Stock Market.

-In October 2007, the Group restructured its business. FALTEC Co., Ltd. absorbed the auto parts business of Altia Hashimoto Co., Ltd., reorganizing itself from a pure holding company of the Group into a holding corporation that produces and sells car components. Altia Hashimoto Co., Ltd. also made a new start by absorbing Orion Techno Co., Ltd., its manufacturing subsidiary, and adopted a new name, Altia Co., Ltd. Altia will focus on manufacturing and selling machinery and devices used in car maintenance and production.

Joint Venture

-In December 2007, the Company announced that it has entered into a joint venture agreement with Ishikawa Metal Finishing Co., Ltd., Ishikawa Yamaguchi Co., Ltd., and ETS. Co., Ltd.. The Company, by establishing a joint venture in Kitakyushu City, Fukuoka Pref. to operate plastic plating business specialized in automobile exterior parts to bolster its competitive edge in Kyushu area where automobile/automotive businesses have been heavily concentrated and enhance its operations in the region. The joint venture "Ishikawa Faltec Co., Ltd.", a manufacturer of plastic plated automobile exterior components, is scheduled to be established as of April, 2008. The new company will be capitalized at 49.75 million yen and a 49% stake will be held by the Company. (From a press release on Dec. 12, 2007)