Nittan Valve Co., Ltd. Business Report FY2009

Business Highlights

Financial Overview

(in millions of JPY)
  FY2009 FY2008 Rate of
Change (%)
Factors
Overall
Sales 27,753 31,693 (12.4) -
Operating income 369 1,279 (71.1) -
Ordinary income 762 1,201 (36.6) -
Current net income (189) (255) - -
Automotive components
Sales 23,169 24,576 (5.7) 1)
Operating income 731 995 (26.5) -

Factors
1)
Automotive components
<Vehicle engine valves>
-While sales of products destined for Europe and the U.S. were falling, orders were recovering due to economic stimulus measures and growing demand in emerging markets. Products for eco-cars were also on the increase. Financial performance of North American subsidiaries included in the consolidate statement was also a factor to increase sales. 

<Precision forged gears for automotive use >
-Despite a trend in recovery since the second half, dwindling demand in Europe and the U.S. decreased sales. 

<Valve lifters>
-Despite an increase in domestic production due to a rebound in demand for products for overseas markets, sales decreased by separating  Korean affiliates from the consolidated statement. 

<NT-VCP (Variable valve timing system) 
-In spite of stagnant demand in North America, increased orders due  to model changes of vehicles installed with the products resulted in sales on par with the level in the previous year. 

>>>Financial Forecast for the Next Fiscal Year(Sales, Operating Income etc.)

R&D

R&D Expenditure

(in millions of JPY)
  FY2009 FY2008 FY2007
Overall 1,391 1,346 1,194

R&D Activities

-The Company continuously worked on developing components for valve operating systems, improving their performance and reducing their weight. It also conducted development activities on heat-resistant alloys and new materials.
-The Company was engaged in improving forging methods and forging processes for precision forged parts, particularly automotive drive parts.
-The Company conducted R&D activities to improve the performance of the NT-VCP (variable valve timing systems), which is compatible with exhaust emission regulations; in addition to improving fuel efficiency and manufacturing methods.

-The Company has made tangible achievements for commercialization of a low-cost variable device which controls engine valve lift. Aiming to start supplying it in 2011 or 2012, the Company will promote the new device, targeting automakers working to meet the CO2 emission regulations to be tightened in Japan, Europe and the U.S. As well as fuel efficiency and exhaust emission, a variable valve lift device improves engine power. As its mechanism, however, tends to be complex, its application has been limited to luxury cars like a sport type, with some exceptions. The cost of this new device has been reduced to the range which makes it affordable for application in mass produced models, and it will, therefore, meet the new needs. With a focus on developing a simple mechanism to achieve variable control, the Company is about to realize the cost level affordable for wide range of vehicles. (From an article in the Nikkan Jidosha Shimbun on Apr. 14, 2009)

-The Company has almost completed substantial downsizing of its variable valve timing device, Variable Cam Phaser (VCP), which is 30 to 40 percent smaller in volume than conventional types. In addition to weight reduction through downsizing, the fourth generation VCP has improved performance and variable angles. Furthermore, the magnetic control system makes performance less susceptible to engine revolutions and fluctuations of environmental temperatures. The Company is willing to enhance performance of the new generation product even further. (From an article in the Nikkan Jidosha Shimbun on Nov. 10, 2009)

-The Company will develop a new mechanism to adjust valve clearances without using oil pressure generated by the engine. The Company is in the final process of developing "Mechanical Auto Lash Adjuster" mechanism, which can automatically adjust clearances between valve parts without being influenced by lubricating conditions. The mechanism to keep oil pressure at an appropriate level in the valve lifter has a function of maintaining clearances properly on its own. Scores of scrupulously bundled tiny reed-shaped plate springs can maintain pertinent conditions without relying on oil pressure. The Company intends to get new orders from automakers by presenting them this technology as contributing to reduction of engine weight and cost. (From an article in the Nikkan Jidosha Shimbun on Nov. 24, 2009)

Technical Alliances

(As of Mar. 31, 2010)

Partner Content of agreement Project Period
Eaton Corporation
(U.S.A.)
License agreement on small engine valves Sep.1, 1996 - Dec.31, 2010
Eaton Corporation
(U.S.A.)
License agreement on oil pressure valve lifters Sep.1,1996 - Dec. 31, 2010
P.T. Federal Nittan Industries
(Indonesia)
License agreement on small engine valves 5 years from Jun. 1, 2005
Shinwa Precision Co., Ltd.
(Korea)
License agreement on oil pressure valve lifters 5 years from Aug. 1, 2005
Nittan (Thailand) Co., Ltd.
(Thailand)
Technical assistance agreement on small engine valves 10 years from Jan. 1, 2003
Shinwa Precision Co., Ltd.
(Korea)
License agreement on mechanical tappets 10 years from Dec. 5, 2002
Beijing Yoosung Shinhwa Automobile Parts Co., Ltd.
(China)
License agreement on lash adusters 10 years from Dec. 7, 2006
Beijing Yoosung Shinhwa Automobile Parts Co., Ltd.
(China)
License agreement on mechanical tappets 10 years from Jan. 1, 2008
Nittan Euro Tech sp.zo.o.
(Poland)
License agreement on automobile  engine valves 5 years from Aug. 29、2008 when delivery of licensed products started  

Investment Activities

Capital Expenditure

(in millions of JPY)
  FY2009 FY2008 FY2007
Overall 880 4,076 3,233
Automotive components 804 1,518 2,671

 

Capital Expenditure of the Automotive Components Business

(in millions of JPY)
Facilities Amount of investment Description of capitalization
The Company 279 Modification and rationalization of equipment used to produce engine valves
P.T. Federal Nittan Industries
(Indonesia)
425 Construction of a new building resulting from relocation of the plant

Planned Capital Investments

(As of Mar. 31, 2010)

Plant Equipment to be installed Estimated amount of investment (in million JPY) From To Increase in production capacity (%)
Headquarters
(Kanagawa Pref., Japan)
Manufacturing equipment for engine valves, NT-VCP etc. 280 2010.04 2011.03 No effect on production capacity, as the purpose is for rationalizing and revamping its operations as well as enhancing its research & development capabilities.
Sanyo Plant
(Yamaguchi Pref., Japan)
Manufacturing equipment for engine valves and valve lifters 630 2010.04 2011.03
Headquarters
(Kanagawa Pref., Japan)
Manufacturing equipment for engine valves and gears 790 2010.04 2011.03
P.T. Federal Nittan Industries
Headquarters
(Indonesia)
Manufacturing equipment for engine valves 487 2010.01 2010.12 The purpose is for rationalizing and revamping its operations as well as enhancing its research & development capabilities.
U.S. Engine Valve(partnership)
Headquarters
(U.S.A.)
Manufacturing equipment for engine valves 255 2010.01 2010.12 The purpose is for rationalizing and revamping its operations as well as enhancing its research & development capabilities.
Nittan Thailand Co., Ltd.
Headquarters
(Thailand)
Manufacturing equipment for engine valves 495 2010.10 2010.12 The purpose is for rationalizing and revamping its operations as well as enhancing its research & development capabilities.
Nittan Euro Tech sp.zo.o.
Headquarters
(Poland)
Manufacturing equipment for engine valves 495 2010.10 2010.12 Primarily for obtaining new manufacturing equipment