TS TECH Co., Ltd. Business Report FY ended Mar. 2013
|(in millions of JPY)|
|FY ended Mar. 31, 2013||FY ended Mar. 31, 2012||Rate of Change (%)||Factors|
|Operating income||24,219||9,401||157.6||-The Company saw a recovery in the North American market and a huge increase in its profit margin due to implementing effective initiatives to improve its previously existing profit structure.|
-The number of product orders the Company received increased, mainly in North America.
-Sales decreased due to a drop in the number of product orders the Company received from its major customers.
-The Company received a high number of orders in line with the economic recovery that took place in North America, launching production of seats for the Acura RDX in April 2012, seats for the Acura ILX in May, and seats and interior products for the Accord in September.
-The Company launched production of seats and interior products for Honda's new CR-V in February 2012 and seats for the new Elysion in June. In addition, it began building seats and interior products for Dongfeng Honda's Ciimo. Sales were higher year-on-year due to effectively revamping the lineup of seat models and recording favorable currency translation.
-The subsidiary in Thailand, which had been damaged by the flooding, began commercial production in March 2012, once again building seats and interior products for the new Honda Civic, seats and interior products for the new CR-V, and seats for the new Brio Amaze. Sales increased year-on-year due to the higher number of product orders the Company received from its major customers.
Recent Developments Outside Japan
Increasing Global Production Capacity to Supply 5 Million Vehicle Units by 2014/2015
- The Company is set to raise its global production capacity of automobile seats enough to be installed in 5 million cars by 2014 or 2015. In response to growing production by its main customer Honda and other automakers, the major Japanese supplier of seating systems will enhance production capacity, primarily in new emerging markets, to raise its global output from the current 3 million to 5 million seat sets a year. To save on investment in boosting capacity, The Company will look for a possibility of collaborating with other suppliers to build new plants or expand existing facilities. With a series of programs announced by Japanese automakers to increase production in emerging markets, competition in the global seat market is becoming more and more intense, involving major seat suppliers in the U.S. and Europe. The Company currently supplies 70 percent of seats for Honda models, including such global models as the Fit, Accord, CR-V and Civic. Along with Honda's plans to boost production in emerging countries, like China, India, Southeast Asia and Mexico, the seat supplier intends to expand production capacity at its plants in Mexico, India, China, Thailand and Indonesia with an investment of around 10 billion yen only in plant building over the next 3-5 years. By enlarging production capacity in each market, the Company is poised to maintain a 70 percent share of seats for Honda vehicles. In Indonesia, it will produce seats for Honda's Brio slated to go into production at a new plant in 2014. Production volumes of seats will be secured by expansion of the existing plant as well as a partnership with a local supplier. The seats for the Brio are already supplied in Thailand and India. Indonesia will be the third supply base. Additionally, the Company is planning to begin deliveries to Volkswagen around 2014. In order to put the supply network in place, it will study a possibility of setting up a new production facility or collaborating with a local partner in Europe. (From an article in the Nikkan Jidosha Shimbun on Jun. 5, 2012)
-The Company announced on March 27 that it would establish new facilities in Mexico and Indonesia. (From an article in the Nikkan Jidosha Shimbun on Mar. 28, 2013)
- A new Mexican subsidiary "TST Manufacturing de Mexico S de RL de CV." will be set up in Guanajuato in April 2013. It will construct a new plant, which will become operational in October 2014.
- In Indonesia, "PT. TS TECH Indonesia" formed in 2003 will build a new seat assembly factory at the premises of its existing seat cover plant in Karawang, West Java. The new facility will start operations in January 2014.
- The Company announced that it will establish a wholly-owned subsidiary in Hungary, which will be engaged in manufacturing and selling automotive seats. After receiving a contract from Volkswagen to develop and produce automotive seat frames for third row seats, the Company was also awarded a program for assembling these seats as well. The new company, TS TECH Hungary Kft., will be capitalized at approximately 1.28 million euros (approximately 150 million yen) and will cover a floor area of about 1.800 square meters. Production operations are expected to start in February 2015 with some 50 employees. (From a press release on February 22, 2013)
- The Company announced that it will establish a new subsidiary in Bangkok, Thailand to oversee the group's operations in Asia and Europe and enhance their sales and development efficiency. The group's six consolidated subsidiaries in the region will be controlled by the new company. The subsidiary will be capitalized at 150 million baht (approximately 375 million yen), fully invested by the Company. (From an article in the Nikkan Jidosha Shimbun on Sep. 11, 2012)
- The Company announced that its Thai subsidiary, TS Tech (Thailand) Co., Ltd., will construct a new plant at the Hemaraj Industrial Estate in Saraburi Province. TS Tech (Thailand), which is located in the Saharattana Nakhon Industrial Estate, Ayutthaya Province, had suspended its operations for about 6 months because of the flood damage occurred in October 2011. The project is meant to relocate production activities of the existing plant to the new production facility, enabling it to avoid the future risks of flooding. With a total investment of some 800 million baht, approximately 2 billion yen, the new plant will cover a floor space of about 33,000 square meters. Production is expected to begin in September 2013. (From a press release on August 31, 2012)
- The Company has been awarded a seat program for a new mini-vehicle Honda is releasing in 2013. The cost-efficient and lightweight seat system developed exclusively for mini vehicles will become the Company's first seat product to be equipped on Honda's new mini-vehicle series. The Company's Suzuka Plant in Mie Prefecture currently manufactures seats for the Honda Fit built at Honda's Suzuka Factory, as well as the Honda Zest, Vamos, and Acty light-duty trucks and minivans assembled by Yachiyo Industry Co., Ltd. Seats for already launched Honda N-series mini-vehicles such as the N-Box and the N-One are supplied from Tachi-S Co., Ltd., an independent seat supplier not in the Honda Group. Honda announced its plans to launch six new mini-vehicle models by 2015, which include the N-One. The new mini-vehicles vehicles are expected to replace some existing models, production of which will be discontinued sometime after this year. Having developed a new seat that satisfies requirements for mini-vehicle installations, the Company has successfully landed a deal with Honda. (From an article in the Nikkan Jidosha Shimbun on Nov. 5, 2012)
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
Outlook for FY ending Mar. 2014
|(in millions of JPY)|
FY ending Mar. 2014
FY ended Mar. 2013
Rate of Change
|(in millions of JPY)|
|FY ended Mar. 31, 2013||FY ended Mar. 31, 2012||FY ended Mar. 31, 2011|
|Technical Center||Tochigi Pref., Japan|
|Engineering Center||Tochigi Pref., Japan|
|Safety Technical Center||Tochigi Pref., Japan|
|TS Tech North America, Inc.||Ohio, U.S.A.|
|TS Tech Asian Co., Ltd.||Bangkok, Thailand|
|TS Tech Deutschland GmbH||Tappenbeck, Germany|
1) Safety technology
-In working to improve automotive safety, the Company is conducting R&D activities on recent developments in the world in the area of safety regulations and assessments, commercializing products based on its findings.
-The Company has been effectively commercializing technology responding to auto-safety by developing lighter weight seats, which are the highest class in the world in terms of mitigating neck-area injuries during rear-end collisions; and by developing control sensors installed in seats, which deploy side-airbags, making them lighter and more compact, working to expand the types of vehicles in which these latest technologies can be installed.
2) Environmental technology
-The Company is conducting R&D activities on technology that will enable materials and parts used in products to be recycled. And as part of its efforts to improve fuel efficiency, the Company is reducing the number of onboard parts by creating optimal designs that make products lighter in weight.
3) Technology responding to product appeal and comfort
-In researching seating comfort, the Company is working to develop more comfortable seats by improving the initial seating comfort and feel when occupants first sit down, reducing seating fatigue during long periods of riding, developing seating-support devices, and conducting joint R&D activities with universities on functions that can prevent drivers from falling asleep at the wheel.
-In line with making variable seat positions possible, the Company is developing seat-positioning mechanics that operate with one motion. In addition, it is commercializing easy-to-use products and strengthening its R&D capabilities in the area of electric/electronic auto parts such as multi-functional devices, which are all designed from the customers' points of view.
|(in million JPY)|
|FY ended Mar. 31, 2013||FY ended Mar. 31, 2012|
- The Company announced on January 31, that it will set up an additional plant to produce automotive interior components at its Saitama Plant (Gyoda) in Gyoda City, Saitama Prefecture, Japan. The plant will integrate the company's existing door trim production operations in Saitama Prefecture, which are now handled at the Gyoda facility, the Kawagoe facility, and the Sayama facility. The integration will enhance the company's production efficiency and also save distribution and administration costs. Construction of the new plant building is scheduled to be completed by December 2013, and the new operation is expected to start in March 2014. In accordance with the consolidation, the company is going to close its Kawagoe facility and consider a sellout of the factory site, while maintaining the roof trim and steering wheel production lines as well as the small-lot production lines of the Sayama facility. (From an article in the Nikkan Jidosha Shimbun on Feb. 2, 2013)
Major Capital Investment Projects
|(As of Mar. 31, 2013)|
|Plant||Location||Investment targets||Planned amount of investment (in millions of JPY)||Start||End|
|Buildings, and facilities and equipment to produce seats and interior products for four-wheel vehicles.||2,637||Apr. 2013||Mar. 2014|
|Prototyping and test facilities for interior products.||556||Apr. 2013||Mar. 2014|
|Kyusyu T.S. Co., Ltd.||
|Facilities and equipment to produce seats for two-wheel vehicles and interior products for four-wheel vehicles.||512||Apr. 2013||Mar. 2014|
|TS Tech (Thailand) Co., Ltd..||Ayutthaya, Thailand||Buildings, and facilities and equipment to produce seats and interior products for four-wheel vehicles.||3,675||Jan. 2013||Dec. 2013|
|TS Tech Sun Rajasthan Pvt. Ltd.||
|Buildings, and facilities and equipment to produce seats and interior products for four-wheel vehicles.||1,119||Apr. 2013||Mar. 2014|
|PT. TS Tech Indonesia||West Java,
|1,273||Jan. 2013||Dec. 2013|
|TST Manufactuaring de Mexico S de RL de CV.||Guanajuato,
|Land, buildings, and facilities and equipment to produce seats and interior products for four-wheel vehicles.||2,116||Apr. 2013||Mar.2014|