FALTEC Co., Ltd. Business Report FY ended Mar. 2014

Business Highlights

Financial Overview

(in millions of JPY)
  FY ended Mar. 31, 2014 FY ended Mar. 31, 2013 Rate of Change (%) Factors
Sales 77,393 72,018 7.5 -Significant sales increase at North American subsidiary, and launch of commercial production at subsidiary in China
Operating income 3,326 3,216 3.4 -Significant sales increases at North American and Chinese subsidiaries
Ordinary income 3,502 3,147 11.3 -Due to favorable currency translation, recorded highest income in Company’s history
Net income 2,084 2,038 2.3 -
Automotive Parts Business
Sales 40,100 36,577 9.6 1)
Operating income 431 863 (50.1)
Automotive Accessories/Supplies Business
Sales 20,546 19,478 5.5 2)
Operating income 2,197 1,766 24.4


1) Automotive Parts Business
-Sales increased 9.6% year-on-year, thanks to the launch of commercial operations at Chinese subsidiary, etc.
-Operating income fell 50.1% year-on-year due to lower sales in Japan, expenses incurred to respond to the launch of new vehicle models, expenses incurred to prepare for the launch of commercial operations at subsidiary in Thailand, etc.

2) Automotive Accessories/Supplies Buisness
-Sales increased 5,.5% year-on-year, thanks to greater sales of new vehicles in North America
-Operating income increased 24.4% year-on-year, thanks to higher sales at subsidiary in the U.S.A.

Joint Venture in Thailand

-In 2013, the Company and SRG Global, Inc., a Guardian company, have announced the opening of their joint venture manufacturing facility in Gateway City Industrial Estate in Thailand. The manufacturing operation, called FALTEC SRG Global (Thailand) Co., Ltd., provides injection molding, chrome plating, painting, and assembly in the production of radiator grilles, body side moldings, rear garnish, and roof rails. The plant employs approximately 50 team members, a number that could increase to 160 at full capacity. Customers include Nissan, Ford Motor Co., Honda, Isuzu, and Mitsubishi Motors, among others. (From a press release on September 27, 2013)

Sales to Carmakers Other Than Nissan

-The Company aims to increase its sales ratio to automakers other than Nissan Motor, from current 28% in fiscal 2012 to 35% in fiscal 2015. The company will expand its business to non-Nissan OEMs by enhancing the conversion business to modify the exterior design of vehicles in Japan, while improving its global sales framework through the collaborations with the alliance partners overseas. FALTEC has mainly dealt with Nissan. Following Nissan's global market strategy and expanding the sales to non-Nissan OEMs, FALTEC aims to achieve the sales of JPY 85 billion in fiscal 2015. (From an article in the Nikkan Jidosha Shimbun on May 15, 2013)


-The Company was relisted on the second section of the Tokyo Stock Exchange on March 19. 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)

FY14 Mid-term Management Plan

Long-term vision
-Achieving profitability and quality of the highest level in the industry
  • Become extremely cost-competitive
  • Become No. 1 in product proposals
  • Achieve high quality that satisfies customers
Important strategies to achieve long-term vision
  • Expand operations globally
  • Revise profit structure, increase orders, increase number of high-profit products
  • Revise cost structure
Performance objectives and management indexes
For the fiscal year ending March 2017:
-Consolidated sales: JPY 90 billion
-Consolidated profit margin: 7.0%
-In the longer future, aiming for consolidated sales of JPY 100 billion, and consolidated profit margin of 10.0%

Outlook for FY ending Mar. 31, 2015

(in millions of JPY)
  FY ending Mar. 31, 2015
FY ended Mar. 31, 2014
(Actual Results)
Rate of Change
Sales 80,000 77,393 3.4
Operating income 4,200 3,326 26.3
Ordinary income 4,000 3,502 14.2
Net income 2,200 2,084 5.6

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


R&D Expenditure

(in million of JPY)
  FY ended Mar. 31, 2014 FY ended Mar. 31, 2013
Automotive Parts Business 1,104 1,427
Automotive Accessories/Supplies Business 349 399
Automotive Device Business 274 233
Total 1,739 2,060

R&D Activities

Automotive parts business
<R&D Function>
-Global R&D: 84 employees

<R&D Activities>
-Development of technology that provides additional surface decoration; new, glossy designs based on plastic plating and vacuum evaporation; and paints with a 3D look.
-Development of electronically/electrically controlled exterior parts to improve vehicle functions
-As part of R&D activities on technology to reduce weight; development of forming technology to achieve highly rigid structures and thinner sheeting, which can be applied to products; and development of light-weight products created by ultra-thin sheet ejection molding.
-Single-unit modules containing plastic formed parts made of multiple materials
-Further increasing metal processing technology and developing new technology in terms of stamping, bending, and pressing aluminum, SUS materials
-Development of illuminated exterior products, rear-view monitoring cameras

Automotive Accessories/Supplies Business
<R&D Function>
-C&A Product Dept.: 34 employees
-Global Sales Dept.: 19 employees

<R&D Activities>
-Development of products for interior and exterior, such as exterior trim, aero mud-guards, luggage trays, etc.
-Development of new functional parts such as electronic/electric components, and interior illumination and illuminated kick plates using low-energy LED
-Development of exterior metal parts, onboard tools, roof rails and crossbars for SUVs and minivans; and development of standard equipped tools
-Planning and development of chemical products, body coatings, and cleaners
-Development of front finishers, daylight lamps, LED fog lights
-Development of LED information
-Development of cameras with even greater monitoring capabilities

Investment Activities

Capital Expenditure

(in millions of JPY)
  FY ended Mar. 31, 2014 FY ended Mar. 31, 2013
Automotive Parts Business 4,027 3,880
Automotive Accessories/Supplies Business 142 312
Automotive Device Business
60 77
Total 4,230 4,277

New Plant in China

-The Company established a JV with Guangdong TGPM Automotive Industry Group Co. Ltd. (TGPM) of Foshan city, Guangdong province. The venture, Hubei Faltec Automotive Parts, will be located in Xiangyang city, Hubei province, China. Faltec and TGPM will own 51% and 49% of the company respectively. The JV will construct a new plant in an automotive supplier park near the Xiangyang plant of Nissan's JV partner Dongfeng Motor Co. Ltd. Starting in 2014, the plant will manufacture plastic exterior parts, stainless steel moldings and roof rails for Nissan and Honda in China. Faltec hopes to triple sales in China in  FY 2015 over FY 2012 levels to JPY 8.6 billion by enhancing cooperation with its Chinese partner, TGPM in the mass production of parts.  (From an article in the Nikkan Jidosha Shimbun on July 18, 2013)

Planned Capital Investments

(As of Mar. 31, 2014)
Name Location Type of facility Planned total investment
(in millions of JPY)
Construction start month Planned completion month Capacity upon completion
Kitakanto Plant
Plating facilities 735 Apr. 2014 Oct. 2014 100% production capacity increase