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5. Kiriu Corporation Business Report FY ended Mar. 2015

Kiriu Corporation Business Report FY ended Mar. 2015

Recent Years

Business Overview

Increase overseas production capacity of steering knuckles
-The Company will increase overseas production capacity of steering knuckles. To meet growing demand as automobile production increases in emerging markets, the Company will start production in Mexico and Indonesia in 2012 and more than double production capacity compared with the previous year. Positioning a steering knuckle as its main product following brake-related product items, the Company is aiming to construct a global supply structure at five overseas locations, and to expand business with Japanese automakers, primarily Nissan. (From an article in the Nikkan Jidosha Shimbun on Jun. 4, 2012)

Raise the global market share of its brake discs and brake drums to 10% in 2015 from current 8%
-The Company plans to raise the global market share of its brake discs and brake drums to 10% in 2015 from current 8%. It will enhance its technical capabilities to respond to demand for brakes with less judder and less squeal so as to accelerate development. By optimizing materials and raising processing accuracy, it will provide high quality products. At the same time, the Company plans to reinforce its production capacities in emerging countries in order to respond to globally increasing demands from automakers and parts suppliers, which should help achieve the objective. (From an article in the Nikkan Jidosha Shimbun on May 28, 2012)

Recent Development Outside Japan

-In 2013, the Company announced its plan to expand its production capacity at Kiriu Mexicana S.A. de C.V. The Mexican subsidiary will acquire a piece of land to establish its third casting factory and a processing plant. After the new facilities become operational in September 2014, Kiriu Mexicana will be able to produce 7,500 tons of brake discs and brake drums a month, up 50% from current 5,000 tons. The expansion of the subsidiary, which serves as the Group's supply hub to its customers in North and South America, is expected to allow the Company to gain a stronger foothold in the market. (From an article in the Nikkan Jidosha Shimbun on Mar. 12, 2013)


-In 2012, the Company announced that Kiriu (Thailand) Co., Ltd., a subsidiary in Thailand, will enhance casting capacity at its plant. In Thailand, it is receiving an increasing number of orders for brake discs and drums. The Company, expecting a further increase in demand in the future as Japanese automakers rev up overseas production, has decided to build an additional casting line to boost production capacity. The new line is scheduled to go into operation in August 2013 with a monthly production capacity of 2,500 tons. Combined with the existing line, a total monthly capacity will be doubled to 5,000 tons. (From an article in the Nikkan Jidosha Shimbun on April 19, 2012)


-In 2012, the Company announced that it will enhance China operations related to automotive parts and machine tools. By acquiring a 18% stake in a joint venture between Sumitomo Corporation and Lioho Machine Works Ltd. in Taiwan, the Company will launch production of brake disks and brake drums for supply to Chinese automakers. The Company established already in 2004 a joint venture with Lioho Machine Works, Kiriu-Lioho Co., Ltd., but demand is projected to exceed its production capacity within the next several years. The new investment is meant to secure additional production capacity. (From an article in the Nikkan Jidosha Shimbun on April 11, 2012)

Investments Outside Japan

-In Mar. 2013, the Company announced its plan to expand its production capacity at Kiriu Mexicana S.A. de C.V. The Mexican subsidiary will acquire a piece of land to establish its third casting factory and a processing plant. After the new facilities become operational in September 2014, Kiriu Mexicana will be able to produce 7,500 tons of brake discs and brake drums a month, up 50% from current 5,000 tons. The expansion of the subsidiary, which serves as the Group's supply hub to its customers in North and South America, is expected to allow the Company to gain a stronger foothold in the market. (From an article in the Nikkan Jidosha Shimbun on Mar. 12, 2013)

-In October 2010, the Company in the Sumitomo Corporation Group announced that its Mexican subsidiary, Kiriu Mexicana S.A. de C.V. (Lerma, Mexico) will increase its capacity to produce casting components. The facility will establish a second casting line to double its production capacity to 5,000 tons a month. The additional line is scheduled to start operations in April 2012, adding knuckles and other suspension parts to the subsidiary's product array. The Company decided to boost its capacity in Mexico so as to cater to the projected rise in requirements for these products, in line with the economic recovery in North America and a rise in exports of auto parts made in North America to South America. Kiriu Mexicana will add two electric furnaces, as well as equipment for making the core and for product finishing. The new production line will enable the subsidiary to manufacture ductile cast iron (FCD) such as knuckles in addition to producing gray cast iron parts (FC) including brake discs and rotors. The Company aims to meet new needs and requirements though the expansion. (From an article in the Nikkan Jidosha Shimbun on October. 15, 2010)


-In February 2011, the Company announced that it will double its production capacity in India. In order to respond to increased requirements from Japanese automakers operating in the country, it will establish a second production line at its existing casting facility, planning production launch in May 2012. The expansion will add 2,200 tons to the plant's current monthly production capacity, increasing the level to 4,200 tons. In connection with this project, the Company and Sumitomo Corporation have decided to raise their investment ratio in Munjal Kiriu Industries Private Limited (MKI, Haryana), their joint venture with Hero Motors Ltd., to 51.0% from 33.4%, thereby adding MKI to their consolidated financial statements. (From an article in the Nikkan Jidosha Shimbun on February 15, 2011)

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