Kinugawa Rubber Industrial Co. Ltd. Business Report FY2008

Business Highlights

Financial Overview (in millions of JPY)
  FY2008 FY2007 Rate of change
Sales 58,923 65,382 (9.9) -
Operating income 2,207 3,205 (31.1) -
Ordinary income 2,065 3,112 (33.6) -
Net income 729 490 48.7 -

Recent Developments Overseas
-The Company will strengthen its operations in North America to win more orders from Japanese and Korean automakers' local plants. The Company has good prospects to win new orders this year from a Japanese or Korean manufacturer, in addition to Nissan Motor Co., Ltd, which is already one of the main users of its products. The Company is trying to make further developments with an aim to open a new plant in Mexico in 2010. The establishment of a new and cost-competitive plant in Mexico will allow the Company to meet needs for new rubber products at the time automakers' new models launch. (From an article in the Nikkan Jidosha Shimbun on Sep.3, 2008)


R&D Expenditure (in millions of JPY)
  FY2008 FY2007 FY2006
Overall 1,451 1,705 1,976
Body parts 918 1,296 1,531
Brake parts 250 160 176

The Company's R&D spending is focused on the following developments:
-The Company is working to develop products that meet the current and expected customer demand for high performance, high quality, and high value-added features, especially focusing on the development of environmentally friendly elastomer material and processing technology.

-The Company is working on conducting research and development activities through a collaboration of industry, government, and academia in cooperation with research institutions including universities, in preparation for entry into new business areas.

Major developments
1.Body parts
-Development of materials and a new cross section structure with an aim to reduce a number of attachments. Development of weather strip seals with higher price competitiveness.

-Expansion of application of lighter sealing parts made of low specific gravity rubber for auto bodies.

-Expansion of application of combining interior components with more attractive design.

-Expansion of application of TPV G/RUN made of high-function elastomer with higher recycling efficiency.

2.Brake parts
-Development of ultra-hard products that are aimed at improving the durability of brake cups exposed to high hydraulic pressure.

-Cost reduction based on newly-developed production methods.

Technological Licensing Agreements (As of March 2009)
Partner Country Purpose Contract period
Faltec Co., Ltd. Japan Window moldings and their manufacturing methods From 2000.04.01 until the production terminates.

Technical Assistance Contracts (As of March 2009)
Partner Country Purpose Contract period
Metzeler UK Manufacturing technology for automotive weather-strips From 1988.11.25,
until production terminates.
Renault Samsung Mortors Korea Technical assistant agreement for sealing products for automobile bodies. From 2003.03.01,
until production terminates.

Investment Activities

Investment Expenditure (in millions of JPY)
  FY2008 FY2007 FY2006
Overall Approx. 2,200 Approx. 1,700 Approx. 2,300
Body parts Approx. 1,100 Approx. 700 Approx. 1,600
Antivibration parts Approx. 400 Approx. 400 Approx. 200
Brake parts Approx. 300 Approx. 300 Approx. 300

-Investment was focused on streamlining operations and revamping production lines in order to respond to model changes made by its customers.

Plans for Construction of New Facilities
Company/Office Name Location Purpose Planned amount of investment
( in millions of JPY )
Start Complete Remark
Kinugawa Koriyama Co., Ltd. Fukushima Pref., Japan Manufacturing facilities 62 Apr. 2009 Mar. 2010 *
Kinugawa Oita Co., Ltd. Oita Pref., Japan Manufacturing facilities 40 Apr. 2009 Mar. 2010 *
Kinugawa Antivibration Co., Ltd. Tochigi Pref., Japan Manufacturing facilities 64 Apr. 2009 Mar. 2010 *
Teito Rubber Ltd. Headquarter Plant Saitama Pref., Japan Manufacturing facilities 71 Apr. 2009 Mar. 2010 *
Kinugawa (Thailand) Co., Ltd. Ayutthaya, Thailand Manufacturing facilities 222 Jan. 2009 Dec. 2009 *
*No significant alteration as the investment is for rationalization and model changes