AKEBONO BRAKE INDUSTRY CO., LTD. Business Report FY2007
|Financial overview||( in millions of JPY )|
|-||FY 2007||FY 2006||R.C.||Factors|
|Sales||184,731||173,159||6.7%||Sales grew to an increase in orders won in Japan and Indonesia|
|Current net income||6,637||6,631||0.1%||-|
|( R.C. : Rate of Change )|
In July 2007 the Company announced that it will boost disc brake production in Thailand. In response to increasing demand from automakers to procure more disc brakes locally, the Company, which plans to launch operations at its first disc brake line in Thailand this summer, is ready to spend additional 800 million yen on a second line.
In November 2007 the Company announced that it will begin brake pad production in Thailand in May 2008. The company will invest a total of 1.2 billion yen to construct a new plant to monthly produce 400,000 brake pads in 2010.
>>>See Capital Investment for more details
Reorganization of production sites
In July 2007 the Company announced that it will reorganize its manufacturing structure in eastern Japan by integrating its operations now conducted at six local facilities into four. The realignment is expected to take two years to be completed, and a capital investment of approximately 4.5 billion yen is planned by the end of March 2009. The consolidation is expected to contribute to a 4 billion yen reduction in cost per year from fiscal 2010. Specifically, the company will transfer all the production lines at its Miharu Plant (Miharu City, Fukushima Prefecture), which is making disc brakes, to three other plants in east Japan: Fukushima plant (Koori Town, Fukushima Prefecture), Iwatsuki plant (Iwatsuki, Saitama Prefecture), and Yamagata plant (Sakae City, Yamagata Prefecture). In addition, all the manufacturing operations at its Iwaki plant (Yabuki Town, Fukushima Prefecture), which specializes in recycled brakes, will be moved to the group's Fukushima plant. After the production transfer is finalized, the Miharu plant and Iwaki plant will be shut down. Furthermore, the Company will shift mass-production friction materials from its Hanyu plant (Hanyu City, Saitama Prefecture), which is located near its headquarters, to the Fukushima plant and Yamagata plant; from then on, the Hanyu plant will focus on small-lot-production friction materials. (From an article in the Nikkan Jidosha Shimbun on Jul. 3, 2007)
<Japan and the U.S.>
The Company will reorganize its brake production system in Japan and the U.S. in two years by 2009. The company will shift production of brake drums for Chrysler Corporation of the U.S. to its local manufacturing base Akebono Brake, Elizabethtown Plant in the state of Kentucky, from its domestic manufacturing subsidiary Akebono Brake Sanyo Manufacturing Co., Ltd., in Soja-shi, Okayama prefecture. It also plans to move production of brake drums for Fuji Heavy Industries Ltd. to its Iwatsuki Plant (Akebono Brake Iwatsuki Manufacturing Co., Ltd.) in Iwatsuki-shi, Saitama prefecture. The Company is planning to make the Elizabethtown Plant, one of its three US manufacturing bases, the one dedicated to production of brake systems by gathering all brake production lines in the U.S. to Elizabethtown. The reorganization will allow the Company to make a deep cut in its shipping cost for surface and marine transportation. From an article in the Nikkan Jidosha Shimbun on Jan. 25, 2008)
The Company announced consolidation of its production operations in North America. It will transfer aftermarket brake pad and remanufactured caliper production at Amtech Brake L.L.C.(Springfield, Kentucky) to Amak Brake L.L.C., (Glasgow, Kentucky), Amtech Brake will then be closed by the end of 2008. This will concentrate the Company's North American production capabilities to its two subsidiaries in Kentucky, Amak Brake L.L.C. and Am Brake Corp. (Elizabethtown). The company said closure of Amtech Brake will save over US$2.5 millions per year including the fixed cost. US$7millions will be invested in Amak Brake to expand its facilities along with the production transfer from Amtech. (From an article in the Nikkan Jidosha Shimbun on Feb. 21, 2008)
<Business Alliance with the ITOCHU Group>
The Company announced that the planned transactions of shares in its North American headquarters, Akebono Corporation North America (ACNA), to the ITOCHU Group have completed on March 31. ITOCHU Automobile America Inc. and ITOCHU International Inc. have together acquired an interest in ACNA in a move that is expected to complement the Company's managerial resources and increase the Company's aftermarket distribution efficiencies. Under the transaction, the ITOCHU Group redeemed its 40 percent interest in Amak Brake L.L.C., one of ACNA's subsidiaries, and at the same time purchased a 20 percent stake in ACNA. (From an article in the Nikkan Jidosha Shimbun on Apr. 11, 2007)
New 3-year midterm plan "New Frontier 30"
Achieving consolidated sales of 200 billion yen and an operating profit of 20 billion yen by the end of the fiscal year ending March 2011.
|R&D Expenditure||( in millions of JPY )|
|-||FY 2007||FY 2006||FY 2005|
R&D activities are conducted in Japan, the U.S., Europe, as well as in China. The Company leverages the combined strength stemming from each of its facilities to develop products.
-Mainly manufactures high performance brake pads and linings for medium-sized and large vehicles.
-In developing environmental friendly friction material products, the Company procures samples and evaluates them from the perspective of environmental safety by taking into account the MSDSs (Material Safety Data Sheets), which the Company acquires from the material makers. The Company investigates how the makers respond to environmental safety and legal regulations. Further, the Company established its own guidelines in analyzing materials.
-Its opposed brakes using aluminum alloy were mounted on high-performance vehicles.
-The Company continues its initiatives on developing friction materials, taking environmental protection into consideration (green materials). These materials are equipped in a wide range of vehicle applications, from passenger cars to pickup trucks.
-The company develops disc brakes mainly for passenger cars, SUVs, and pickup trucks.
-The Company, which completed the development of new disc brakes that use lightweight aluminum alloy, started commercialization of them.
-The company developed disc brakes, with next-generation rear parking mechanisms; and new disc brakes for full-size SUVs and pickup trucks. The new disc brakes are currently being developed for various vehicle models.
-The company is developing new products including a newly designed low-cost brake and a caliper with improved heat-capacity performance by collaborating with Japan.
-The Company focused its development activities on creating friction materials for use in a wide rage of products, from high-performance materials compliant with stringent emission regulations in Europe, up to European cars exported to Japan and the U.S., putting a strong focus on the idea of peaceful and calm driving.
-The Company developed hybrid materials targeting them in the Japanese, American, and European markets.
- Apart from its own development facility in France, the Company established an R&D subsidiary in Germany, which enables it to develop products that better meet the needs of local customers.
|Capital Expenditure||( in millions of JPY )|
|-||FY 2007||FY 2006||FY 2005|
Planned amount of capital investment by region
- Japan: 9,300 million yen
- North America: 3,200 million yen
- Europe: 200 million yen
- Asia: 2,300 million yen
Investments outside Japan
The Company will boost disc brake production in Thailand. In response to increasing demand from automakers to procure more disc brakes locally, the Company, which plans to launch operations at its first disc brake line in Thailand this summer, is ready to spend additional 800 million yen on a second line. Construction of the second line will start in the middle of 2008; The Company aims to achieve higher local content ratio at this line by boosting in-house manufacture of small auxiliary components. These manufacturing lines will be set up at Akebono Brake (Thailand) Co., Ltd. (ABT), which was created in the Amata Nakorn Industrial Park, Chonburi Province in August 2006. Preparations are now under way on the first line to start production to support Japanese automakers as early as this summer. In fiscal 2008, ABT will also start manufacturing friction materials, becoming the group's second facility to roll out these components in Asia following the one in China. Construction of the second brake disc line will take place around the same time, which will accelerate its move to build a fully integrated manufacturing structure for brakes in Thailand. (From an article in the Nikkan Jidosha Shimbun on July 17, 2007)
In November 2007 the Company announced that it will begin brake pad production in Thailand in May 2008. The company will invest a total of 1.2 billion yen to construct a new plant to monthly produce 400,000 brake pads in 2010. The establishment of comprehensive production capability in one of the company's main production sites, covering production of disk brakes and brake pads, will allow the supplier to expand its business in Asia, whose markets are expected to grow further. Akebono Brake (Thailand) Co., Ltd., established in the Amata Nakorn Industrial Park in Chonburi Province in August 2006 will take charge of the brake pad production at a new facility now under construction in a 27,000-square-meters site the company acquired adjacent to its existing plant. The new plant will be completed in May 2008 and begin producing 250,000 brake pads a month. (From an article in the Nikkan Jidosha Shimbun on Nov. 15, 2007)
Plan for new facilities
|Facilities & Activities||Total investment (millions of yen)||Start date||Completion|
and other facilities
|Casting production facilities, equipment for new production methods, construction of new business offices||3,370||Apr. 2008||Aug. 2008|
(Saitama Pref., Japan)
|Testing and R&D facilities, high-performance brake development facilities||1,520||Apr. 2008||Mar. 2009|
(Saitama Pref., Japan)
|Facilities to expand and increase production at this sensor plant||160||Apr. 2008||Mar. 2009|
Brake Iwatsuki Manufacturing Co., Ltd.
(Saitama Pref., Japan)
|Production facilities manufacturing disc brakes and drum brakes||1,210||Apr. 2008||Mar. 2009|
Brake Fukushima Manufacturing Co., Ltd.
(Fukushima Pref., Japan)
|Production facilities manufacturing brake linings, industrial machinery, and railway products||490||Apr. 2008||Mar. 2009|
Brake Yamagata Manufacturing Co., Ltd.
(Yamagata Pref., Japan)
|Production facilities manufacturing disc brake pads||850||Apr. 2008||Mar. 2009|
Brake Sanyo Manufacturing Co., Ltd.
(Okayama Pref., Japan)
|Production facilities manufacturing disc brakes and drum brakes||1,260||Apr. 2008||Mar. 2009|
|Akebono Corporation (North
|R&D facilities||640||Jan. 2008||Dec. 2008|
|Production facilities manufacturing disc brakes, drum brakes and disc brake pads||3,100||Jan. 2008||Dec. 2008|
|Amak Brake L.L.C.
|Production facilities manufacturing disc brakes||630||Jan. 2008||Dec. 2008|
|Akebono Advanced Engineering
|Facilities and equipment to develop high-performance brakes||700||Apr. 2008||Mar. 2009|
|Production facilities manufacturing disc brake pads||110||Jan. 2008||Dec. 2008|
|Production facilities manufacturing disc brakes and drum brakes||580||Jan. 2008||Dec. 2008|
|PT. TriDharma Wisesa
|Facilities to produce disc brakes and disc brake parts||930||Jan. 2008||Dec. 2008|
|Akebono Brake Thailand
(Chonburi , Thailand)
|Production facilities manufacturing disc brakes||1,350||Jan. 2008||Dec. 2008|