UNIPRES Corporation 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
Sales 321,168 325,423 (1.3) -Sales fell due to the effect of negative currency translation.
Operating income 23,025 22,033 4.5 -Operating income rose due to making effective use of the Unipres Production System (UPS) and implementing rationalization initiatives.
Ordinary income 23,034 18,186 26.7 -Incurred a loss attributable to negative currency translation.
Profit for the year attributable to owners of the parent 14,379 9,750 47.5 -



Unipres China Formed Joint Venture with Dongfeng (Wuhan) Industrial

-The Company announced that its consolidated subsidiary, UNIPRES (CHINA) CORPORATION, entered into a joint venture agreement with Dongfeng (Wuhan) Industrial Co., Ltd. It will carry on the business of manufacturing and sale of hot-stamped parts. The new company will be called Dongfeng Unipres Hot Stamping Corporation. It will be capitalized at CNY 100 million and be owned 50% by each companies. The joint venture will be established in February 2017 and operation is scheduled to start in April 2019. (From a press release on November 7)


Contracts

-The Company is producing parts in Japan, China, the USA, and the UK for the Nissan X-Trail, Qashqai, and Rogue; and the Renault Kadjar and Koleos in the Renault-Nissan Common Module Family C/D Segment. Parts delivery for the Rogue Sport started in Kyushu from March 2017.

-The Company won an order for three parts used on Subaru’s CVT Plunger.

R&D Activities

Developed high-tensile automotive front pillar
-The Company has succeeded in the development of an automotive front pillar using 1.2 gigapascal (GPa) class ultra-high tensile steel. The company will market the new front pillar, which has high strength that offers a superior level of safety for collisions and other accidents, to receive orders from its main customer Nissan Motor Co., Ltd. and other Japanese automakers. The company developed the front pillar using ultra-high tensile steel in collaboration with Nippon Steel & Sumitomo Metal Corporation. When steel material with high tensile strength exceeding 1 GPa is used for complicated forming processes like deep drawing, the material is expanded by pressing, and unwanted "wrinkles" appear. Unipres has developed a new processing technology that avoids generation of wrinkles by putting pressure on the material with special pads during forming. The use of the 1.2 GPa-class ultra-high tensile steel was limited to parts like center pillars and roof panels that are formed under specific conditions, but use for front pillars that are difficult to process has become possible through the new technology. (From an article in the Nikkan Jidosha Shimbun on June 7, 2016)


Developed New Deep Stamping Technology
-The Company has developed a new hot pressing (stamping) technology to process deep drawing parts. The company succeeded in suppressing the cracking and wrinkles that occur during stamping, and also dramatically reduced the frequency of die maintenance by reviewing its thermal analysis and die surface treatment methods. Unipres has received orders from Honda of The U.K. Manufacturing Ltd. for seven kinds of hot stamped parts utilizing the new technology, and started supply for the Civic for the North American market. The company is looking ahead to global expansion in the adoption of the lightweight hot stamped parts, and will continue to use the new technology in the development of parts with reduced weight. (From an article in the Nikkan Jidosha Shimbun on November 25, 2016)



The Company conducted R&D activities on the following in the fiscal year that ended in March 2017

  • High-tensile parts of over 1180Ma; and optimum forming technology
  • Technology to form ultra-deep, hot-stamped drawing parts
  • Ultra-high-tensile stamping technology and aluminum welding technology
  • High-precision analysis technology such as forming simulation
  • Functional parts for next-generation transmissions
  • Plastic, highly functional cover parts



R&D Structure

-The Company has 329 research and development staff members as of March 31, 2017.
-The Company has 78 industrial property rights as of March 31, 2017.

R&D Expenses

(in millions of JPY)
FY ended Mar. 31, 2017 FY ended Mar. 31, 2016 FY ended Mar. 31, 2015
Overall 3,800 3,600 3,400



Investments Outside Japan

-The Company will substantially increase its production capacity for stamped parts at its plants in China and Mexico. Unipres Zhengzhou Corporation (Henan Province, China) will expand the floor area of the building of an assembly plant next to its existing stamping plant from 7,200 square meters to 13,700 square meters, and install equipment for stamped parts at the expanded space. The expansion is scheduled to be completed at the end of November 2016, and the Chinese unit's annual production capacity will be almost doubled from 220,000 units to 410,000 units. Unipres is investing CNY 44 million (JPY 740 million) in the expansion project in response to new or additional orders receiving from Dongfeng Nissan Passenger Vehicle Company, a Chinese joint venture of Nissan Motor Co., Ltd. (Nissan). Likewise, Unipres Mexicana, S.A. de C.V. in Aguascalientes, Mexico will expand its plant to increase its production capacity in anticipation of increasing orders from Nissan. The Mexican unit will construct a new building with a floor area of 16,800 square meters beside its existing plant, and expand the overall assembly area to 54,500 square meters. The investment in the expansion project will amount to USD 24 million (JPY 2.67 billion). The Mexican unit's annual production capacity will be increased from 820,000 units to 1.35 million units. The expanded capacity will be allocated for production of stamped parts for use in the new Kicks that Nissan will introduce in more than 80 global markets. (From an article in the Nikkan Jidosha Shimbun on June 3, 2016)



Capital Investment

(in millions of JPY)
FY ended Mar. 31, 2017 FY ended Mar. 31, 2016 FY ended Mar. 31, 2015
Overall 20,000 18,400 27,300


-In FY ended March 2017, the Company invested mainly for renewing production facilities and equipment in response to model changes made by major customers. Investment amount by region:

  • Japan: JPY 6,600 million
  • North America: JPY 7,100 million
  • Europe: JPY 2,200 million
  • Asia: JPY 3,900 million

-The Company plans to spend JPY 20,000 million in capital investments in the fiscal year ending in March 2018.

Planned Capital Investments

(As of Mar. 31, 2017)
Company
Facility
(Location)
Target of Investment Planned
Investment
Total
(in million yen)
Start End
(Scheduled)
Headquarters
(Kanagawa Pref., Japan, Shizuoka Pref., Japan)
Improve working environment and strengthen crisis management framework 2,500 Apr.
2017
Mar.
2018
Tochigi Plant
(Tochigi Pref., Japan
Kanagawa Pref., Japan)
Improving production operations, renewing production facilities and equipment to respond to model changes, and conducting other initiatives. 1,000 Apr.
2017
Mar.
2018
Fuji Plant
(ShizuokaPref., Japan)
Improving production operations, renewing production facilities and equipment to respond to model changes, and conducting other initiatives. 1,600 Apr.
2017
Mar.
2018
Unipres Kyushu Corporation
(Fukuoka Pref., Japan)
Improving production operations, renewing production facilities and equipment to respond to model changes, and conducting other initiatives. 1,300 Apr.
2017
Mar.
2018
Unipres U.S.A., Inc.
Headquarters & Plant
(U.S.)
Improving production operations, renewing production facilities and equipment to respond to model changes, and conducting other initiatives. 3,800 Apr.
2017
Mar.
2018
Unipres Southeast U.S.A., Inc.
(U.S.)
Improving production operations, renewing production facilities and equipment to respond to model changes, and conducting other initiatives. 1,700 Apr.
2017
Mar.
2018
Unipress Alabama, Inc.
(U.S.)
Improving production operations, renewing production facilities and equipment to respond to model changes, and conducting other initiatives. 400 Apr.
2017
Mar.
2018
Unipres Mexicana, S.A. de C.V.
Headquarters & Plant
(Mexico)
Building new plant for transmission parts,
Enhancing production operations and renewing production facilities due to vehicle model change
2,700 Jan.
2017
Dec.
2017
Unipres (UK) Limited
Headquarters & Plant
(UK)
Improving production operations, renewing production facilities and equipment to respond to model changes, and conducting other initiatives. 1,200 Jan.
2017
Dec.
2017
Unipres Guangzhou Corporation
Headquarters & Plant
(China)
Improving production operations, renewing production facilities and equipment to respond to model changes, and conducting other initiatives. 1,100 Jan.
2017
Dec.
2017
Unipres Zhengzhou Corporation
Headquarters & Plant
(China)
Improving production operations, renewing production facilities and equipment to respond to model changes, and conducting other initiatives. 900 Jan.
2017
Dec.
2017
Unipres Precision Guangzhou Corporation
(China)
Improving production operations, renewing production facilities and equipment to respond to model changes, and conducting other initiatives. 2,100 Jan.
2017
Dec.
2017



Outlook for FY ending March 31, 2018

(in millions of JPY)
FY ending Mar. 31, 2018
(Forecast)
FY ending Mar. 31, 2017
(Actual)
Rate of Change
(%)
Sales 300,000 321,168 (6.6)
Operating income 23,000 23,025 (0.1)
Ordinary income 22,500 23,034 (2.3)
Profit for the year attributable to owners of the parent 14,000 14,379 (2.6)

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

Mid-term Business Plan

-The Company announced its mid-term business plan for the three years through fiscal year 2018 (ending in March 2019). Under the new plan, the Company aims to increase sales 1.4% to JPY 330 billion and operating income 13.6% to JPY 25 billion in FY 2018 from its FY 2015 results. The Company forecasts that sales and operating income will decrease 4.7% and 9.1% year-over-year, respectively in FY 2016. This reasons for this include the yen strengthening over the FY 2015 level, and a projected decrease in the production of models for which Unipres' parts are supplied, although Nissan Motor Co., Ltd. (Nissan), Unipres' key customer, is expected to boost vehicle production in the Americas and other areas. In spite of this negative projection, the Company expects increasing orders, for stamped parts in Mexico and India, and from Aisin AW and Jatco in China in FY 2017 and beyond. Nissan began production of the Rogue for the North American market at its Kyushu Plant in Japan in April 2016. Steady supply of parts for the model will contribute to an increase in Unipres' earnings. The Company will also strengthen its torque converter operations. The Company developed a torque converter for the first time on its own in FY 2015. The Company currently supplies ultra-flat torque converters for use in the continuously variable transmissions of the Nissan Lannia for the Chinese market via Jatco. The Company will enhance the competitive edge of its torque converters in terms of performance and seek to increase the number of models that adopt it. The Company is already bolstering its facilities to evaluate noise, vibration performance, fuel economy, and other test items, and will develop new torque converters for a wide range of models, from mini vehicles to full-sized cars. (From an article in the Nikkan Jidosha Shimbun on June 15, 2016)

FY ending Mar. 31, 2016
(Actual)
FY ending Mar. 31, 2017
(Actual)
FY ending Mar. 31, 2018
(Forecast)
FY ending Mar. 31, 2019
(Plan)
Sales 325,423 321,168 300,000 330,000
Operating income 22,033 23,025 23,000 25,000