Overview: NSK s Business by Product Category

Transcription

1 Overview: NSK s Business by Product Category Technology Tree NSK has established a Platform of Technology that forms the basis of product designing for our bearings, automotive components and precision machinery and parts divisions, through the continued reinforcement of our Four Core Technologies. This enables us to respond quickly to customer needs. Furthermore, by integrating these advanced technologies, we are strengthening our capabilities to develop next-generation products. Vacuum table Sensor bearings Next-generation products Electric linear actuator for automotives Half-toroidal CVT Steering columns Steering joints Transmission-related products Automotive components Electric power assisted steering systems Traction drive unit Pulley unit with one-way clutch Roller follower Clutch pack Ball screws Linear guides XY tables Precision machinery and parts LCD color filter exposure machine Direct drive motor controller Robot module SPACEA Series bearings Electronic/IT equipment bearings Automotive bearings Precision bearings for machine tools Steel mill bearings Railway axlebox bearings Aerospace bearings for industrial machinery for HDD spindles Wheel hub unit bearings ROBUST Series bearings Highly functional standard roller bearings TF Series bearings Ceramic bearings Platform technology groups The four core technologies Tribology Material engineering Analysis technology Motion & Control Lubricants (oils, greases) Lubrication theory Life theory Surface element analysis Surface modification Bearing steel Heat treatment Ceramics High polymeric materials NSK BRAIN Simulation technology Computer analysis Linear product analysis Motor technology Sensing technology Systemization technology Sales by Business Segment Sales by Industrial Segment Precision Machinery and Parts Precision Machinery and Parts Automobiles/Motorcycles Aftermarket General machinery Automotive Components Automotive Components Electrical and IT equipment Auxiliary automotive parts FY21 Net Sales for Fiscal Year FY21 billion 12

2 Business Environment are NSK s main business, representing 6% of total sales. NSK, as a bearing manufacturer, provides various bearing products to satisfy all industrial needs. Small-sized to standard ball bearings, automotive bearings and precision bearings, among other products, are our core products where we occupy either the No.1 or No.2 market position in the world. Sales of Sales Performance for the Fiscal Year Ended March 22 Our strong performance in the automotive sector was offset by poor results in other industries, such as electronic and IT equipment, machine tools and industrial machinery. Sales declined to 32.3 billion for the year, down 5% when compared to the previous fiscal year. 1 FY 98 FY 99 FY Non-automotive bearings Automotive bearings FY 1 Business Environment NSK s automotive components business consists of steering-related products, automatic transmission components and seat belts. Our steering-related products, whose function is to convey information from the steering wheel to the wheels of the automobile, include steering columns, steering joints and electric power assisted steering (EPS) systems. Automatic transmission components include friction materials and one-way clutches, as well as core parts for half toroidal continuously variable transmissions (CVTs). Seat belts, designed to protect automotive passengers, also include a full-range of products. Sales of Sales Performance for the Fiscal Year Ended March 22 Although EPS experienced growth in and, demand for other steering-related products and seat belts decreased worldwide, resulting in billion in sales, down 4% from the previous fiscal year. FY 98 FY 99 FY FY 1 Seat belts Automatic transmission components EPS Steering columns,etc. Business Environment Precision machinery and parts, built on tribological technology combined with electronic technology for precise positioning and electromagnetic systems, can be categorized into linear products such as ball screws and linear guides, and mechatronics products such as XY tables and Megatorque Motors. In addition, applications for modularized and systematized products are increasing. Sales Performance for the Fiscal Year ended March 22 Demand from semiconductor production equipment and machine tool sectors plunged, resulting in a 4% decrease in sales from the previous fiscal year to 34 billion. Sales of FY 98 FY 99 FY FY 1 Mechatronics products Linear guides Ball screws 13

3 Types and Structure of Outer ring Ball bearing Rolling element Tapered roller bearing Inner ring Cylindrical roller bearing Retainer Self-aligning roller bearing Wheel Hub Unit Wheel hub unit bearings are modularized bearing products for vehicle wheels. NSK has experienced increasing demands from automakers to help them streamline their assembling processes, in addition to helping them produce lighter vehicles and improving vehicle functions. Our response has been to accelerate development of nextgeneration wheel hub unit bearings from the first generation Hub I bearings to second generation Hub II bearings, and on to the third generation Hub III bearings. By manufacturing all types of wheel hub unit bearings and having production bases in, the Americas, and, we aim to be able to satisfy increasing global demand. 14

4 Strategy and Highlights In the bearing business, NSK has targeted the following three areas. The first major target is rapidly growing China. Our production facilities in China have become major production bases that manufacture commodities as well as procure preprocessed products and parts. We are aiming to further expand these production bases. In addition, the bearing market in China is now a 3 billion market, with an expected annual growth rate of over 6%. NSK will concentrate on value-added products for electrical appliances, IT equipment and automotive products to expand sales resulting from China s industrialization. Another market that NSK has targeted for growth is the automotive bearing market. NSK currently occupies the No.1 market share position. We are seeking to further increase our market share in all four economic zones of, the Americas,, and, by strategically marketing our high technology products, such as wheel hub bearing units, water pump bearings and bearings for electromagnetic clutches for vehicle air conditioning units. We are expecting growth especially in, where we have received large-scale orders from automakers in Germany and France. Our third target is the aftermarket. In particular, we will introduce new roller bearing products for general industrial use, an area where we have not been very aggressive in the past. As our flagship production site for these products, we have launched a restructuring program at our Fujisawa Plant to improve our cost competitiveness. NSK and The Timken Company form a Joint Venture for Production in China NSK and The Timken Company, the largest bearing manufacturer in the U.S., have agreed to form a joint venture company that will build a plant in Suzhou, China. Ownership of the joint venture will be equal between NSK and Timken. The new company, Timken-NSK (Suzhou) Co., Ltd., will build a 5 billion plant specializing in the production of tapered roller bearings for truck and passenger vehicle applications. The new plant is scheduled to begin production in spring 24 and is expected to have an annual production capacity of approximately 15 million sets. This new production base will increase the competitiveness of our tapered roller bearings and enhance our ability to respond to market demands in China and other n countries. Preparations Underway for Construction of a Third Factory at the Kunshan Plant in China The Kunshan Plant began production in Every year since then, production of bearings for electrical appliances, such as air-conditioning units and vacuum cleaners, has increased as a result of China s rapid economic growth. We are expanding production by utilizing a recently completed second factory, but we anticipate production to reach full capacity in the very near future. In order to meet the increasing demand from the local market and to accommodate transfer of production out of under the 2nd phase of the NSK Business Restructuring Program, preparations for construction of a third factory have begun. The budget for this third factory has been set at 5 billion. Global Sales Breakdown by Industry Sales Breakdown by Region Aftermarket Automobiles/ Motorcycles Aftermarket Automobiles/ Motorcycles General machinery Electrical/IT equipment General machinery Electrical/IT equipment FY1998 FY21 FY21 15

5 NSK s Automatic Transmission Components Friction materials One-way clutches Core parts for CVTs Steering Systems Seat Belts Steering columns Steering joints EPS systems Power Split CVTs (Continuously Variable Transmissions) Half toroidal CVTs were first commercialized worldwide by NSK in This year, they were installed in the new Nissan Skyline models. Demand for CVTs is expected to pick up in and to meet this demand, we are currently focusing on developing technology related to 2-mode CVT systems, such as the Power Split CVT. The goal will be to ultimately develop a CVT system that is more compact, more powerful and more efficient. This will broaden the range of CVT applications, from small-sized to large-sized vehicles, and eventually contribute to increased sales. 16

6 Strategy and Highlights To increase profitability, we will continue the 2nd phase of our Business Restructuring Program as follows: 1) Increase cost competitiveness by reducing procurement costs. 2) Introduce an intra-company bidding system to determine the optimum manufacturing base 3) Withdraw from non-core businesses including manual steering systems and constant velocity joints 4) Restructure the steering column business by spinning off the business unit in and by reorganizing the an business through plant integrations or closures. 5) Increase sales of strategic products electric power assisted steering (EPS) systems, CVTs and electric linear actuators for automotives. Spin-off to Attain Status as the World s No.1 Steering System Supplier EPS, a core product of our automotive components business, is experiencing a sharp increase in demand especially in. Last year, in order to respond more efficiently to the market and to speed up our strategic decision-making process, we spun off our EPS business to form NSK Steering Systems Co., Ltd. We are also planning to integrate the design and production divisions of our steering column and steering joint businesses with the new company to strategically expand our role as a global supplier of steering systems. This will enable us to reinforce our global management of these businesses. We will focus on acquisition of large-scale orders to further improve profitability by strengthening our R&D activities and global production and supply system. Development of Electric Linear Actuators for Automotives Conventional hydraulic vehicle control systems are being increasingly replaced with electric and Drive-by-Wire systems. To take advantage of this trend, NSK is concentrating on developing electric linear actuators by drawing on our ball screw technology. Current production covers only ball screws used for hydro-static CVT speed control actuators. However, as there are numerous application possibilities, efforts to develop this technology for use in engines, transmissions and brakes are already underway (refer to the chart below). We are trying to commercialize complete actuator units as well as ball screws for actuators. We will continue to focus on developing new products that can be launched in 25. Forecast of Global EPS Demand (NSK s Estimate) Applications of Electric Linear Actuators for Automotives (Millions of Vehicles)

7 Applications of NSK s Core Technology and Products to the Semiconductor Production Processes <Process> <Specification> <NSK Core Technology> <Product application> XY table Monocarrier Air slide Megathrust Motor Ball screw Megatorque Motor NSK K1 Lubrication Unit Spindle Step&Repeat Proximity Aligner(RZ Series)for Production of Large-sized Liquid Crystal Display(LCD) Color Filters Since the 198s, NSK has been developing numerous exposure machines for the electronics industry as part of our strategy to develop high value-added products. Among these products is the Step & Repeat Proximity Aligner (RZ Series), developed through the combination of NSK s expertise in drive functions and control technologies. Appreciation for this product is increasing due to its ability to produce large-sized displays at low cost, especially with the increasing demand for portable and wallhanging LCD TVs. 18

8 Strategy and Highlights We will spin off our precision machinery and parts business to establish management infrastructure capable of immediately responding to rapid changes in demand in the precision machinery market. Within 22, we will reduce labor costs and change them to variable costs by placing regular employees in specialized positions and using outsourcing for other positions. Sales to the semiconductor production equipment and machine tool manufacturers currently account for two-thirds of our business in this product segment. We will continue to strengthen our marketing efforts to these sectors, while simultaneously alleviating the volatility in demand caused by our over-dependence on these sectors by expanding sales to relatively stable markets, such as automotive production equipment, packaging machine and medical equipment. We will also begin developing a new client base by focusing on 2 new industrial categories and offering a fresh product line-up. New Production Model-NSK Kyushu Co., Ltd. The new precision machinery plant, NSK Kyushu Co. Ltd., began operation in April 21. This plant is based on a new production system and is the first step towards the spin-off of our precision machinery and parts business. The new production system and new employment/salary structure have been successfully adopted, leading to a drastic reduction of lead-time required for the production of small-sized ball screws. Increased use of outsourced labor has also drastically changed its labor cost structure by lowering the weight of fixed portion. To cope with rising demand, we are increasing the production of ball screws from the current level of 5, units per month to 15, units per month. We will implement this production system to other precision machinery plants to attain a higher and more stable profit level. Introduction of New Products to Develop New Markets NSK is introducing various new products to the market in order to diversify our customer base and stabilize order intake. New products include Translides and MCH Monocarriers, released in December 21, and the High lead precision rolled ball screws and Megatorque Motors YSB series, released in June 22. These products have not only achieved high-function, durability and cleanness, but are also low priced, and have been developed to meet the needs of a wide variety of customers, such as automotive production equipment manufacturers, tire and rubber manufacturers, woodworking machine manufacturers, and the aftermarket. Global Sales by Industry Electrical and IT equipment Electrical and IT equipment Aftermarket General machinery Aftermarket General machinery FY1998 FY21 Translides 19

9 Overview: NSK s Global Operations NSK s Global Organization San Jose Vancouver Edmonton Los Angeles Clarinda Indianapolis Ann Arbor Chicago Mississauga Toronto Stonehouse Coventry Ruddington Peterlee Blackburn Newark Maidenhead Ratingen Stuttgart Munderkingen Leipzig Warsaw Kielce Istanbul Chennai Bangkok Chachoengsao Chonburi Anshun Guangzhou Hong Kong Beijing Taichung Seoul Kumi Changwon Montreal Bennington Franklin Atlanta Troy Liberty Miami Mexico City Tokyo Shanghai Kunshan Taipei Manila Kota Kinabalu Auckland Buenos Aires Porto Alegre Joinville Suzano Sao Paulo Belo Horizonte Recife Johannesburg Milan Turin Bulle Barcelona Paris Jakarta Balakong Singapore Johor Bahru Kuala Lumpur Prai Sydney Brisbane Melbourne Adelaide Perth Headquarters Plant () Sales Office Plant () R & D base Plant (Precision Machinery & parts) Sales Performance (Sales are recognized by customers location) FY 97 FY 98 FY 99 FY FY 1 FY 97 FY 98 FY 99 FY FY 1 FY 97 FY 98 FY 99 FY FY 1 FY 97 FY 98 FY 99 FY FY 1

10 Indices by Region Net Sales by Region Bearing Sales by Region (Sales are recognized by customers location) (Sales are recognized by customers location) FY21 FY21 Sales by Region (Sales are recognized by customers location) Sales by Region (Sales are recognized by customers location) FY21 FY21 Fixed Assets by Region Workforce by Region FY21 FY21 Investments and Depreciation FY 97 FY 98 FY 99 FY FY 1 Capital Investments Depreciation FY 97 FY 98 FY 99 FY Capital Investments Depreciation FY 1 FY 97 FY 98 FY 99 FY Capital Investments Depreciation FY 1 FY 97 FY 98 FY 99 FY FY 1 Capital Investments Depreciation 21

11 Overview Sales by Production Region NSK currently has 19 production bases throughout the country and R&D bases in Fujisawa, Kirihara, Maebashi, and Soja. Our ese organization serves domestic client demands and supports our overseas production bases as their mother plants. We have 43 sales offices in. We are proactively spinning off manufacturing plants, business units, and administrative divisions to clearly define profit accountability and improve management efficiency. Markets and Performance For the fiscal year ended March 22, the ese economy significantly deteriorated. The economic slowdown in the U.S. and decreased demand for IT-related products resulted in a decline in exports and production and the unemployment rate to rise to all time highs. With the exception of sales to the automotive industry, NSK s domestic sales decreased sharply and resulted in an increase of our fixed cost ratio. In spite of implementing business restructuring activities and efforts to reduce capital investments, costs and expenses, NSK s domestic operations posted substantial decreases in both sales and profits. For the year ending March 23, the ese economy is expected to gradually recover. NSK expects sales outside of the automotive industry to increase incrementally. Immediate Challenges NSK is actively implementing the 2nd phase of our Business Restructuring Program. We are transferring production of commodity-type products to China and other low-cost countries to cope with intensifying price competition. We are also reinforcing our domestic plants support roles as mother plants of overseas production bases. Our aim is to rebuild the foundations of ese craftsmanship (Monozukuri) in and improve our competitiveness through spin-offs, employment and salary reforms, and reduction of external procurement costs. We are also reinforcing our Tokyo Head Office s control over the entire NSK Group. Strategy In production, NSK is taking steps to revitalize cost competitiveness as well as focusing on value-added products such as automotive bearings and precision machinery and parts. At our Fujisawa Plant, which manufactures roller bearings for general industrial use, we launched a restructuring plan to drastically improve our competitiveness and reinforce global aftermarket sales. In addition, we established the Fujisawa Research and Development Center on the site of our Fujisawa Plant to reinforce research and development activities and accelerate the development of value-added products. 22

12 Overview Sales by Production Region NSK began production in Brazil in 1972 and in the U.S. in Our network in the Americas currently extends to eight production bases, with R&D centers in the U.S. and Brazil. We have marketing and sales offices in five countries: the U.S., Canada, Mexico, Brazil and Argentina. NSK Americas, Inc. in Michigan, our American headquarters, integrates these production, technology and sales offices. Markets and Performance The bursting of the IT bubble economy triggered the deterioration of the U.S. economy. Inventory adjustments began in autumn 2 followed by adjustments in employment. The September 11 terrorist attacks caused further damage to the economy. The Brazilian economy also stalled due to electricity shortages and the economic crisis in Argentina, despite favorable conditions during the first half of 21. While automotive industry sales in the U.S. remained robust, sales of bearings for general industrial use fell sharply due to the shift in customer production to low-cost countries and low-price imports from newly industrialized countries. Precision machinery and parts sales were poor, a direct result of continued sluggish demand from semiconductor-related industries. In Brazil, we achieved increases in both sales and profits through favorable sales in the first half of the year and strategic price increases in the second half. Immediate Challenges Although we expect economies in the Americas to gradually recover in fiscal year 22, our goal will be to improve profitability in bearings for general industrial use and precision machinery and parts, without over-relying on a recovery. In addition to measures already implemented, such as partial operational shutdowns and layoffs, we will globally procure preprocessed products and parts in our bearings and automotive components businesses. To cope with fluctuation in demand in our precision machinery and parts business, we are restructuring factories to achieve daily production targets, shortening production lead time and reduction of inventory. Strategy In the bearing business, we are simultaneously transferring production of commodity-type products that are coming under stiff price competition to and other regions, as well as streamlining production. We are also shifting our focus to high value-added automotive bearings where we are highly competitive, and expanding production of this product segment. In addition, we are promoting sales in the higher-margin aftermarket. In the automotive components business, where orders have expanded, we will reduce costs through implementation of the Lean Production System and global procurement. In the precision machinery and parts business, we will improve profitability by utilizing production facilities of the Franklin Plant in the U.S. 23

13 Overview Sales by Production Region NSK s an business began over a quarter of a century ago with the start of operations at the Peterlee Plant in the U.K. in Our network currently includes manufacturing facilities in the U.K., Germany, Italy, Switzerland and Poland with R&D and technical support centers in the U.K. and Poland. We effectively respond to customer needs through a pan-an market-oriented sales organization. NSK Limited, our an headquarters, coordinates operations at our production, technology and sales offices in the region. Markets and Performance The an economy, which showed signs of recovery in 2, started to slowdown in the first quarter of 22. This trend accelerated with the September 11 terrorist attacks in the U.S. Although sales of automotive components, such as automotive bearings and EPS, increased, those of bearings for general industrial use and precision machinery and parts decreased. A lower production level at our Iskra Plant in Poland and deterioration of profitability of our steering column business, as well as a temporary increase in selling, general and administrative expenses accompanying our business restructuring, resulted in decreased profitability. Immediate Challenges Our goal is to strengthen the cost competitiveness of our an business through the implementation of the 2nd Phase of our Business Restructuring Program. In the bearing business, we will accelerate production transfer of standard ball bearings from the U.K. to Poland, and withdraw from unprofitable businesses to focus on core businesses such as our automotive bearing, standard ball bearing, and precision bearing businesses. In the automotive components business, we will concentrate on EPS and will consider raising prices or withdrawing from certain business projects. We will also reduce the number of production bases in the U.K. from the current three to one to improve profitability. Administrative divisions will be streamlined, including scaling down the an headquarters. In addition, we will focus on quickly stabilizing operations of the NSK an Distribution Centre B.V., our central an warehouse established in the Netherlands. Local Prod. Ratio 8.3% Strategy We will focus on the implementation of the 2nd Phase of our Business Restructuring Program and expand sales of core products. In standard ball bearings, we are expanding the global sales of products manufactured at our Iskra Plant in Poland. In automotive ball bearings, we are receiving increased orders from German and French automakers, as well as ese automakers. We will try to increase even further our market share by taking advantage of our technological expertise. In automotive roller bearings, we will reinforce our marketing activities in cooperation with The Timken Company and The Torrington Company of the U.S., our alliance partners. Also, as a top manufacturer of EPS, we will meet expanding demand resulting from the rapid increase in EPS-mounted vehicles. 24

14 Overview Sales by Production Region Since beginning production in South Korea in 1987, NSK has expanded its production network to China, Indonesia, Malaysia, Thailand and India, with a total of 11 production bases in six countries. Output has risen sharply in recent years. We have R&D bases in China, South Korea and Singapore. In addition, our sales offices in nine countries, including Singapore, Thailand, China and South Korea, cover the entire n and Oceania region. Our Business Strategic Division-Headquarters has created a unified regional management structure to oversee operations at all production, technology and sales offices by assigning general managers to oversee each of the South Korean, Chinese and the ASEAN & Oceania regions. Markets and Performance Economies in the ASEAN nations and South Korea in 21 deteriorated due to the economic slowdown in the U.S. and reduced demand from the IT-related industries. The Chinese market, on the other hand, was robust throughout the year. Sales increases in China and the ASEAN nations were not enough to offset the decline in sales to the IT, semiconductor and machine tool industries, resulting in a deterioration of overall n sales and profits. We are expecting a gradual recovery of our business in fiscal year 22 due to sales expansion in China and the recovery of the U.S. economy. Local Prod. Ratio 14.5% Immediate Challenges China is crucial for the NSK Group and to the successful implementation of the 2nd Phase of our Business Restructuring Program. At our Kunshan Plant, we will start construction of a third factory and a technical center building. In Suzhou, we are preparing for the construction of a small-sized tapered roller bearing plant through our joint venture with The Timken Company of the U.S. In Shanghai, we will establish a new procurement center that will eventually become a strategic procurement base for the NSK Group, and will also construct a factory to preprocess ball bearings. In South Korea, in line with industrial structure changes, such as the production shift by electrical appliance manufacturers out of the country, we will shift our product portfolio at our Changwon Plant to focus on the automotive industry. In the ASEAN region, we will focus on improving profitability of our miniature to small-sized ball bearings in Indonesia and Malaysia, and launch an automotive bearing plant in Thailand. Local Prod. Ratio.% Strategy Our ultimate goal is to become No.1 in all n markets through the utilization of production bases established throughout the region, and by taking advantage of our geographic proximity to, our home base. It is also our global strategy to capitalize on the strength of the region as a base for cost competitive production and procurement of parts and intermediate materials. 25