Nichirin Co., Ltd. Business Report FY2010

Business Highlights

Financial Overview

(in millions of JPY)

	FY2010	FY2009	Rate of Change(%)	Factors
Sales	36,298	27,990	29.7	- Sales increased year-on-year, as the automotive hose division enjoyed increased demand thanks to the effects of the eco-car incentive programs and tax cut systems.
Operating income	1,686	(701)	-	-　The Company returned to profitability, as it cut down on labor costs and other expenses. Its initiatives included establishing a mutual supply system among its group companies and using robots on its production lines.
Ordinary income	1,690	(550)	-
Net income	880	(1,216)	-

New programs

- The Company started supplying power steering hoses for the Audi D4 series.

R&D

R&D Expenditure

(in millions of JPY)

	FY2010	FY2009	FY2008
Overall	844	816	1,009

Technology Licensed-out

(As of Dec. 31, 2010)

Company	Country	Content of Contract	Period of Contract
Company	Country	Content of Contract	From	To
HS R&A	South Korea	Manufacturing technology for air conditioner hoses used in automobiles	Feb. 24, 2010	Mar. 4, 2013
		Manufacturing technology for automotive brake hoses	Mar. 3, 2010	Mar. 4, 2013
		Manufacturing technology for automotive power steering hoses	Jan. 1, 2010	Dec. 31, 2011
PT.Mitra Metal Perkasa	Indonesia	Assembling technology for automotive brake hoses	Oct. 26, 2010	Oct. 25, 2011

New Product Development

Automotive hoses
- The Company enjoyed growing demand for its brake hose called “Slim One”, which offers reduced product weight, improved braking performance, and higher durability. It is also developing Teflon-coated SUS hoses for the aftermarket.
- The Company is developing hoses for air conditioning systems using HFO1234fy refrigerant, which is a prospective alternative to HFC134a fluorocarbon refrigerant that contributes to global warming.

- The Company’s HBMC hose was chosen to support the Hydraulic Body Motion Control (HBMC) Technology used on full-sized sport utility vehicles (SUVs). The hydraulic system is designed to prevent the vehicle from rolling and to help maintain driving stability on- and off-road.

Investment Activities

Capital Expenditure

(in millions of JPY)

	FY2010	FY2009	FY2008
Japan	365	258	930
North America	140	56	85
Asia	558	661	122
Others	2	1	5
Total investment	1,067	978	1,142

New Investment Plan

(As of Dec. 31, 2010)

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	590	Dec. 2009	Jun. 2011