NICHIRIN Business report FY2008

Business Highlights

Financial overview
(in millions yen) FY2008 FY2007 Rate of Change(%) Factors
Sales 38,327 44,026 (12.9) -In Japan, sales were generally strong until October 2008, as a result of greater exports, especially to Southeast Asian countries. This was followed by a decrease in sales due to a sharp drop in demand from major automakers.
The Company posted an operating loss because prices of metals and rubber increased, while sales decreased.

-Sales in North America started to decline significantly in October due to major OEMs moves to slash production. As a result of a series of measures taken at major production facilities to improve operations, profit rose from what it was the previous year.

-In China, both sales and income increased from a year ago, supported by favorable performance of Japanese automakers there.

-In other regions, including Europe, sales fell because of major automakers' moves to cut down production. The Company, however, managed to maintain profitability.
Operating income 919 1,565 (41.3)
Ordinary income 942 1,784 (47.2)
Net income 357 1,031 (65.4)

Recent Developments Overseas
-In June 2008, the Company established a subsidiary near Hanoi, Vietnam to manufacture and sell automotive rubber hoses.

>>>See Investment for more details


R&D Expenses
(in millions of yen) FY2008 FY2007 FY2006
Total 1,009 1,005 994

Technology Licensed-out (as of December 2008)
Company Country Content of Contract Period of Contract
From To
HS R&A South Korea Manufacturing technology for air conditioner hoses used in automobiles Feb.24, 2007 Feb. 23, 2010 (The contract will be renewed automatically  every three years)  
Manufacturing technology for automotive brake hoses Nov. 3, 2007 Mar. 4, 2010
Manufacturing technology for automotive power steering hoses  Oct. 28, 2007 Mar. 4, 2010
PT.Mitra Metal Perkasa Indonesia Assembling technology for automotive brake hoses Oct. 26, 2008 Oct. 25, 2009

New Product Development
R&D focus is set on the following areas;
Automotive hoses
-Automotive hoses that improve the safety of vehicles such as ABS hoses and brake hoses with higher braking performance and durability.

Car air conditioning hoses
-Its environmentally friendly EF-Tubes, which are CO2 piping hoses, are used in some fuel cell vehicles. The Company also supplied prototypes of the products to manufacturers of air conditioning systems inside and outside Japan. It intends to promote sales of this highly flexible and impermeable tubes to other markets as well.

Investment Activities

Capital Investment
(in millions of yen) FY2008 FY2007 FY2006
Japan 930 695 1,170
North America 85 225 455
Asia 122 N.A. N.A.
Others 5 N.A. N.A.
Total investment 1,142 971 1,757

Overseas Investments
-The Company announced that it will establish a subsidiary near Hanoi, Vietnam to manufacture and sell automotive rubber hoses in June 2008. The new plant is scheduled to start in July 2009 and U.S. $11 million (approx. 1.1billion yen) sales are expected to be achieved in FY 2011. This Vietnam plant is aimed to respond to Japanese motorcycle and automobile manufacturers expanding local production and to decentralize brake hose production operation, currently performed only at its Himeji factory, Japan. As the company's overseas manufacturing bases in Asia, the Vietnam plant will follow one in Shanghai, China, and joint ventures in Thailand and Malaysia. (From an article in the Nikkan Jidosha Shimbun on Apr. 3, 2008)

New Investment Plan
Name of Company/Plant Location Equipment Estimated amount of Investment
(in millions of yen)
Project Period
From  To 
Nichirin Vietnam Co., Ltd. Bac Giang, Vietnam Production of automotive hoses 480 Sep. 2008 July, 2009