Kiriu Corporation Business Report FY ended Mar. 31, 2008 - FY ended Mar. 31, 2010

Business Highlights

Recent Years

Business in Japan

-In 2009, the Company will reorganize its domestic production operations for casting materials. The Company will transfer part of its production of these materials used in brake rotors and other components from both its headquarters (Ashikaga City) and Kiriu Yamagata (Funagata, Yamagata Pref.) to Kiriu Oita (Usa City, Oita Pref.). The transfer project will double the monthly production volume at Kiriu Oita, which has produced some 1,000 tons in recent months, to 2,000 tons by the end of 2009. (From an article in the Nikkan Jidosha Shimbun on Sep. 16, 2009)

New Company

-In Dec. 2007, the Company announced a plan to establish a new subsidiary tentatively named Kiriu Oita Co., Ltd. in Usa-shi, Oita prefecture, for the production of casting parts including brake disks. The new company is expected to become operational in February 2009 for a monthly production of 25,000 tons. Its first client will be Nissan Motor Co., Ltd. Kyushu Plant, while it aims to become a stable parts supply base for more clients in western Japan. The new manufacturing company will be established in March next year as a wholly owned subsidiary of Kiriu to produce brake disks, drums and other automotive casting parts. It will be an integrated production facility that handles entire processes from casting to machining. The facility constructed at a 77,192-square-meter site is expected to have a workforce of approximately 100 in 2011, and the investment in the first fiscal year will be approximately 3 billion yen. (From an article in the Nikkan Jidosha Shimbun on Dec. 20, 2007)

Joint Venture

-In Dec. 2007, the Company announced that it concluded a JV contract on automotive casting parts production with Sumitomo Corp., its parent company, and Hero Motors Limited, an automotive parts supplier in India. The JV plant, to be located in Haryana Province, India, will cast and machine car brake discs, drums, knuckles, etc., which will be supplied to local plants of Japanese, European and U.S. manufacturers. Its sales target for 2015 is 5.5 billion yen. The Company and Sumitomo will jointly hold 33.4% of shares of the new JV, Munjal Kiriu Industries Pvt. Ltd., in an aim to dominate the India market, where over two million automobiles are expected to be produced annually in 2010 and after, by early establishment of a local production base. Suzuki, Nissan, Renault, General Motors and other automakers as well as brake system suppliers as Bosch are targeted customers. (From an article in the Nikkan Jidosha Shimbun on Dec. 14, 2007)


R&D Activities

-In 2006, the Company developed a new technology to mass produce brake rotors that generate no judder at the initial stage when disk brakes are applied when braking the vehicle. Kiriu started development of this new technology by strengthening the rigidity of cutting machines. In doing so, it succeeded in limiting the variance in thickness of the sliding surface of a rotor to less than 10 microns, which is less than half that of conventional rotors. This was achieved through a simple grinding process. Then, by using the same grinding technique developed originally by the Company, the variance was further reduced to less than five microns. When assembled with the latest high-precision hub, the total vibration of all the components can be contained to less than 10 microns. In order to ensure such high precision, it was necessary in the past to grind a rotor after assembling it with the hub and check the alignment of the two parts. The new technology, coupled with enhanced precision in cutting, has thus eliminated this process, giving the Company two advantages, namely high precision and mass-production capabilities. (From an article in the Nikkan Jidosha Shimbun published on Jun. 30, 2006)

Investment Activities

Investments Outside Japan

-In 2009, the Company will increase production of automotive brake components such as disc rotors and drums in China. Kiriu Lioho Co, Ltd., its joint venture company in Guangzhou, will install an additional 2,500-ton casting machinery to double its production capacity. The joint-venture unit will also add machining equipment by the end of October 2009 to reinforce its processing capacity. The major factor behind the expansion is greater-than-expected sales of passenger vehicles produced by a local joint-venture plant of Nissan, its major customer. Expecting new program businesses also from Chinese manufacturers and European companies operating in the area, the Company will reinforce its production structure including its capacity to produce raw materials. (From an article in the Nikkan Jidosha Shimbun on Sep. 2, 2009)