Nifco Inc. Business Report FY ended Mar. 2015
Financial Overview |
(in million JPY) |
| FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | Rate of change (%) |
Factors | |
| Overall | ||||
| Sales | 225,415 | 185,167 | 21.7 | - |
| Operating income | 20,975 | 15,718 | 33.4 | - |
| Ordinary income | 20,626 | 17,022 | 21.2 | - |
| Net income | 12,901 | 9,771 | 32.0 | - |
| Composite plastic molded products | ||||
| Sales | 201,768 | 161,846 | 24.7 | 1) |
| Operating income | 22,864 | 17,610 | 29.8 | |
1) Composite plastic molded products
-Sales were higher over the entire year as a result of greater sales of products being installed on new vehicles, higher sales of products being equipped on strong-selling vehicles built for export, and strong sales of parts exported for installation on vehicles built outside Japan.
-Business performance at subsidiaries outside Japan improved year-on-year due to strong sales of products to Japanese and Korean OEMs, as well as significantly higher sales in North America and China. Also, sales in Europe were much higher as a result of effective M&A activities.
-Profit was significantly higher due to favorable currency translation due to the weaker yen, improvement initiatives implemented at major production facilities, and benefits that were the result of M&A activities.
Home office relocated
-The Company has announced that its head office will be relocated from Totsuka-ku, Yokohama City to Yokosuka City, Kanagawa Prefecture on January 5, 2015. Nifco is consolidating its six technical development bases in Japan into two locations: one in Yokosuka, eastern Japan, and the other in Nagoya, western Japan. Nifco aims to improve its development efficiency by relocating its head office to a site next to the R&D base in Yokosuka City. (From an article in the Nikkan Jidosha Shimbun on December 17, 2014)
Acquisition
-The Company will acquire German automotive plastic parts supplier, KTW GmbH & Co. KG and its group companies. Nifco will buy all shares of the group to convert it into its subsidiary. After settling the purchase price and other details, the company aims to conclude the acquisition in a few months. The KTW Group manufactures and sells automotive plastic parts such as instrument panels and door trims. In 2013, its revenue increased by 11.3% year-over-year to JPY 8.4 billion. KTW's sole plant is located in Bavaria. The group deals mostly with German automakers, with sales to BMW accounting for more than half of the total. The Company intends to enhance its business in Europe by expanding business with the German automakers. The Company's global sales network will help it supply to the German automakers' plants located around the world. (From an article in the Nikkan Jidosha Shimbun on April 23, 2014)
Restructuring
-The Company announced that it will reorganize its operations in Japan. It will close down its Utsunomiya Plant (Tochigi Prefecture) that produces automotive plastic fasteners at the end of December 2015. Production will be transferred to Nifco-Yamagata Inc. (Yamagata Prefecture), which will double production after the transfer. Nifco will also realign its sales operations by shutting down its Kyushu Office (Fukuoka Prefecture) at the end of March 2015. The Kyushu Office's sales activities will be covered by both the Company's Hiroshima Office and Nifco Kumamoto Inc., a subsidiary in Kumamoto, Kyushu. The company aims to become more competitive in the growing international market by streamlining its operations in the domestic market, where vehicle production is falling. (From an article in the Nikkan Jidosha Shimbun on February 12, 2015)
-The Company announced that it will dissolve its Chinese subsidiary, Nifco Enterprise Management (Shanghai) Co., Ltd., around January 2016. The subsidiary is engaged in supporting sales and technical operations and overseeing its group companies in China. (From a press release on March 23, 2015)
-The Company will consolidate its automotive resin parts manufacturing subsidiaries in Germany as of December 31, 2014. The Company's fully owned subsidiary, Nifco Germany GmbH, will be the surviving company and will absorb KTW and KTW Group companies that manufacture automotive resin parts. In April 2014, the Company has acquired all shares in KTW and KTW Group companies to make them its fully owned subsidiaries. (From an article in the Nikkan Jidosha Shimbun on December 17, 2014)
Mid-term Business Plan (Nifco Innovation Plan 2020)
-Numberical Objectives
| FY ended Mar. 31, 2015 (Actual Results) |
FY ending Mar. 31, 2018 (First phase) |
FY ending Mar. 31, 2021 (2nd phase) |
|
| Overall | |||
| Sales | 225.4 billion yen | 270.0 billion yen | 330.0 billion yen |
| Operating income | 20.9 billion yen | 31.0 billion | 38.0 billion yen |
| Profit ratio | 9.3% | 11.5% | 11.5% |
| Net income | 12.9 billion yen | 20.0 billion yen | 25.5 billion yen |
-The Company has announced targets in its new mid-term business plan for the fiscal year ending in March 2016 (FY 2015) through FY 2017. The mid-term plan aims to increase net sales by 19.8% to JPY 270 billion, operating profit by 48.3% to JPY 31 billion, and operating profit ratio by 2.2 percentage points to 11.5% from the figures in FY 2014. During the mid-term, the company intends to achieve higher performance through well-balanced product lineup and business structure, enhance profitability in its global operations, establish a global quality assurance system, and improve its capital efficiency. (From an article in the Nikkan Jidosha Shimbun on May 14, 2015)
Growth strategies for the automotive market
Launching operations for manufacturing powertrain products
-Expanding sales to Japanese and non-Japanese OEMs
-Enhancing production operations and acquiring knowledge on new production methods
-Consider consolidating fuel products operations
Expanding sales to European OEMs worldwide
-Launching operations of Nifco KTW in North America
-Expanding new business with VW
-Finding synergy effects between KTS and KTW
Developing high, value-added products
-Strengthening product-development activities targeting VW
-Strengthening product-development activities targeting application suppliers
-Launching R&D centers outside Japan
Create synergies through M&As and alliances
-Forming alliances for future developments
-Acquiring new production methods
-Forming alliances in new sectors and for strengthening new-product-developments
-Forming alliances that are mutually beneficial and which create synergy effects
Outlook for FY ending 2016
|
(in million JPY) |
| FY ending Mar. 31, 2016 (Forecast) |
FY ended Mar. 31, 2015 (Actual Results) |
Rate of Change (%) |
|
| Overall | |||
| Sales | 240,000 | 225,415 | 6.5 |
| Operating income | 24,000 | 20,975 | 14.4 |
| Ordinary income | 23,500 | 20,626 | 13.9 |
| Net income | 14,500 | 12,901 | 12.4 |
-Sales in Japan of composite plastics for the fiscal year ending March 2015 are forecast to decrease 1.9% year-on-year, while they are forecast to increase 6.5% year-on-year overall due to expected growth in North America, Europe, and Asia.
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income, etc.)
R&D Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | FY ended Mar. 31, 2013 | |
| Overall | 2,733 | 2,492 | 1,776 |
| -Composite plastic molded products | 2,720 | 2,468 | 1,763 |
-The Company plans to invest JPY 3,000 million for R&D activities during FY ending Mar. 2016.
R&D Structure
-R&D activities on technology designed to respond to future markets are being conducted mainly at the Nifco Technology Development Centre.
-In the fiscal year that ended in March 2015, in line with its relocating the headquarters to Yokosuka in a building next to the Yokosuka Research Park, the Company consolidated the Yokosuka and Nagoya R&D functions.
-The Company will consolidate its six technical development bases in Japan into two bases, the technology development center and the Nagoya Plant. The consolidation will be implemented in phases from late 2014. With the aim of enhancing its development operations, Nifco will accelerate new technology development by improving efficiency through consolidation. Meanwhile, Nifco will assign persons to be in charge of customer support, including ensuring product compatibility, at its plants and business offices. This will allow the company to improve development efficiency of each component and to reflect customers’ needs on its product development. (From an article in the Nikkan Jidosha Shimbun on September 18, 2014)
R&D Activities
Automotive Products
-Energy-saving solutions: The Company focused on developing products that contribute to saving weight and improving efficiencies in automobiles. Especially, the Company worked on developing products for powertrains, which directly improve fuel efficiency; and products that contribute to saving weight, by switching the base material from aluminum to plastic.
-Environmental solutions: The Company finished developing new fuel-system parts that are compliant with the evaporative hydrocarbon emission regulations in the U.S.
-Safety products/technology: The Company developed collision-reduction brake parts and obstacle-detection sensors.
Technical Alliance Agreements |
(As of Mar. 31, 2015) |
| Company Name (Location) |
Contract Coverage | Contract Term |
| Illinois Tool Works Inc. (USA) |
Plastic buckles | Until Aug. 27, 2023 |
Technology Licensing-out Agreement |
(As of Mar. 31, 2014) |
| Company Name (Location) |
Contract Coverage | Contract Term |
| Nifco Taiwan Corporation (Taiwan) |
Manufacturing technologies for plastic buckles and industrial fasteners | Until Dec. 31, 2015 |
| Nifco Korea Inc. (Korea) |
Manufacturing technologies for plastic buckles and industrial fasteners | Until Dec. 31, 2019 |
| Union Nifco Co, Ltd. (Thailand) |
Manufacturing technologies for plastic buckles; and assembling both plastic and metal fasteners | Until Jun. 30, 2017 |
| Nifco Manufacturing (Malaysia) Sdn. Bhd (Malaysia) |
Manufacturing technologies for plastic buckles and fasteners | Until Dec. 31, 2019 |
| Nifco (Hong Kong) Ltd. (Hong Kong) |
Manufacturing technologies for plastic buckles, plastic or metal fastener assembly | Until Dec. 31, 2019 |
| Nifco U.K. Ltd. (UK) |
Manufacturing technologies for industrial plastic parts and assemblies that contain other parts and materials | Until Dec. 31, 2019 |
| Nifco America Corporation (USA) |
Manufacturing technologies for industrial plastic parts and assemblies that contain other parts and materials | Until Dec. 31, 2019 |
| Nifco Products Espana S.L.U. (Spain) |
Manufacturing technologies for buckle/industrial plastic parts and assemblies that contain other parts and materials. Manufacturing technologies for dies for these parts and finished products | Until Dec. 31, 2019 |
| Shanghai Nifco Plastic Manufacturer Co., Ltd. (China) |
Manufacturing technologies for resin and metal parts/finished goods with fastening properties; Products combining resin parts and metal parts; buckles; and manufacturing technology for dies used to manufacture these parts and finished products | Until Dec. 31, 2019 |
| Boosung Industrial Corporation (Korea) |
Manufacturing technologies for buckle/industrial plastic parts and assemblies that contain other parts and materials. Manufacturing technologies for dies for these parts and finished products | Until Dec. 31, 2017 |
| Dongguan Nifco Co., Ltd. (China) |
Manufacturing technologies for resin and metal parts/finished goods with fastening properties; Products combining resin parts and metal parts; buckles; and manufacturing technology for dies used to manufacture these parts and finished products | Until Dec. 31, 2019 |
| Nifco (Thailand) Co., Ltd. (Thailand) |
Manufacturing technologies for buckle/industrial plastic parts and assemblies that contain other parts and materials. Manufacturing technologies for dies for these parts and finished products | Until Dec. 31, 2019 |
| Tifco (Dongguan) Co., Ltd. (China) |
Manufacturing technologies for resin and metal parts/finished goods with fastening properties; Products combining resin parts and metal parts; buckles; and manufacturing technology for dies used to manufacture these parts and finished products | Until Dec. 31, 2016 |
| Beijing Nifco Co., Ltd. (China) |
Manufacturing technologies for resin and metal parts/finished goods with fastening properties; Products combining resin parts and metal parts; buckles; and manufacturing technology for dies used to manufacture these parts and finished products | Until Dec. 31, 2015 |
| Nifco Poland Sp.zo.o. (Poland) |
Manufacturing technologies for industrial plastic parts and assemblies that contain other parts and materials. Manufacturing technologies for dies for these parts and finished products | Until Dec. 31, 2019 |
| Nifco Vietnam Ltd. (Vietnam) |
Manufacturing technologies for industrial plastic parts and assemblies that contain other parts and materials. Manufacturing technologies for dies for these parts and finished products | Until Dec. 31, 2018 |
| Nifco (Tianjin) Co. Ltd. (China) |
Manufacturing technologies for resin and metal parts/finished goods with fastening properties; Products combining resin parts and metal parts; buckles; and manufacturing technology for dies used to manufacture these parts and finished products | Until Dec. 31, 2019 |
| Nifco India Private Ltd. (India) |
Manufacturing technologies for industrial plastic parts and assemblies that contain other parts and materials. Manufacturing technologies for dies for these parts and finished products | Until Dec. 31, 2019 |
| Nifco (Hubei) Co., Ltd. (China) |
Manufacturing technologies for resin and metal parts/finished goods with fastening properties; Products combining resin parts and metal parts; buckles; and manufacturing technology for dies used to manufacture these parts and finished products | Until Dec. 31, 2019 |
| Nifco Korea USA Inc. (USA) |
Manufacturing technology for buckle/industrial plastic parts and assemblies that contain other parts and materials. Manufacturing technologies for dies for these parts and finished products | Until Dec. 31, 2015 |
| Nifco (Jiangsu) Co., Ltd. (China) |
Manufacturing technologies for resin and metal parts/finished goods with fastening properties; Products combining resin parts and metal parts; buckles; and manufacturing technology for dies used to manufacture these parts and finished products | Until Dec. 31, 2019 |
| Nifco South India Manufacturing Private Ltd. (India) |
Manufacturing technology for buckle/industrial plastic parts and assemblies that contain other parts and materials. Manufacturing technologies for dies for these parts and finished products | Until Dec. 31, 2017 |
| Nifco (Yancheng) Co., Ltd. (China) |
Manufacturing technologies for resin and metal parts/finished goods with fastening properties; Products combining resin parts and metal parts; buckles; and manufacturing technology for dies used to manufacture these parts and finished products | Until Dec. 31, 2016 |
| PT. Nifco Indonesia (Indonesia) |
Manufacturing technology for buckle/industrial plastic parts and assemblies that contain other parts and materials. Manufacturing technologies for dies for these parts and finished products | Until Dec. 31, 2019 |
| Nifco Korea Poland Sp. z o.o. (Poland) |
Manufacturing technologies for industrial plastic parts and assemblies that contain other parts and materials. Manufacturing technologies for dies for these parts and finished products | Until Dec. 31, 2017 |
| Nifco Central Mexico S.de R.L.de C.V. (Mexico) |
Manufacturing technology for buckle/industrial plastic parts and assemblies that contain other parts and materials. Manufacturing technologies for dies for these parts and finished products | Until Dec. 31, 2019 |
Capital Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | FY ended Mar. 31, 2013 | |
| Overall | 20,796 | 21,166 | 18,521 |
Composite plastic molded products (FY ended Mar. 2015)
-The Company invested JPY 8,930 million in the new headquarters in Yokosuka and a plant in Yamagata Prefecture, in die facilities for manufacturing products as a result of receiving new orders from Japanese OEMs, and in facilities for manufacturing fuel-systems products.
-Nifco Poland Sp.zo.o. invested JPY 1,463 mainly to construct a new production plant.
-Nifco (HK Ltd.) invested JPY 938 million mainly to build a new production plant. A total of JPY 4,241 million was invested in Asia.
Overseas Investments
-The Company increased capital in its Mexican subsidiary that produces automotive fasteners and interior parts. In order to meet growing demands in Mexico, the company added USD 3.6 million (JPY 360 million), and increased the subsidiary's total capital to USD 9.6 million (JPY 960 million). The subsidiary was established in 2012 and currently supplies plastic molded parts to Japanese and American automakers' plants in North America. (From an article in the Nikkan Jidosha Shimbun on May 15, 2014)
-The Company has announced that Nifco KTW GmbH, its German subsidiary, will establish a new manufacturing subsidiary to build a plant in South Carolina, the U.S. The new plant will be Nifco Group's fourth production base in the U.S. The plant will be built near BMW Manufacturing Co.'s plant in Spartanburg, as BMW AG is Nifco KTW's key customer. The new plant will begin operations in 2017 and will supply fasteners and other plastic parts. The new subsidiary will be established in April 2015, with a capital of USD 20 million (JPY 2.4 billion), of which 90% will be invested by Nifco KTW and 10% by Nifco America Corporation. (From an article in the Nikkan Jidosha Shimbun on March 24, 2015)
-The third production plant at Nifco Poland was completed in the fall of 2014, which launched production in April 2015 of products such as air-vents for the VW Group (to which Porsche belongs). As a result of completing the new production plant, the company is focusing on winning more new business, mainly from the VW Group. Nifco Poland supplies automotive, functional plastic parts to more than 100 customers located throughout Eastern Europe, Central Europe and Turkey.
Planned Capital Investments (Composite plastic molded products)
(As of Mar. 31, 2015)
Company/
Facility
(Location)Targeted Investment
Investment Amount
(in million JPY)From
To
Nifco KTW America Corporation
(Georgia, USA)New plant
3,050
May
2015May
2016
Nifco (HK) Ltd.
(Hong Kong, China)New plant
2,457
Sep.
2013Aug.
2015