the tsubaki group’s performance and...
TRANSCRIPT
09
TheTsubakiGroupisstrivingtobuildastrongmanagementfoundationthatislesssusceptibletothe
influenceofeconomicfluctuationsbyrigorouslybolsteringitsproductcapabilitiesandadvancingthe
globalizationofitsoperations.
TheTsubakiGroup’sPerformanceandStrategies
09.1Q 2Q 3Q 4Q 10.1Q 2Q 3Q 4Q
01 02 03 04 05 06 07 08 09 10 11(plan) 12 13(plan) FY
Billions of yen
Billions of yen Billions of yen
Results on a Recovery Trend
Aiming to Return to a Course of Growth
Net sales (left) Operating income (right)
Net sales (left) Operating income margin (right)
800
600
400
200
0
40
30
20
10
0
200
150
100
50
0
40
30
20
10
0
00
–15
15
30
45
6
12
18
–6
%
Consolidated Results: Long-Term Trends
Consolidated Results: Short-Term Trends
10
TheTsubakiGroup’sPerformanceandStrategies
Emergencyresponsemeasuresrelatedtotheglobaleconomicslumphavecometoanend.Aimingtoachievesustainablegrowth,theTsubakiGroupwillthoroughlystrengthenitsmanagementfoundationandadvancetoanewstage.
Strengtheningourmanagementfoundationtosupportsustainedgrowth
InterviewwiththePresident
Infiscal2010,endedMarch31,2010,werecordedsignificantdeclinesinsalesandprofitwhencomparedtofiscal2009.However,operatingincomewas¥4.7billiononaconsolidatedbasis,greatlyexceedingourinitialexpectationsof¥0.8billion.TheglobaleconomyshowedmassivedeteriorationaftertheLehmanshock.Regardless,wewereabletoturnaprofitduetoourearlyimplementationoffixedcost-cuttingmeasuresandothersuchemergencyresponsemeasures. Theturbulenceintheglobaleconomyhasbeguntocalm,andaccordinglyinMay2010,theTsubakiGroupestablishedandsubsequentlyannouncedanewthree-yearmedium-termmanagementplansettoendwithfiscal2013.However,thenumericaltargetssetforfiscal2013inthisplanaremerelypassingpoints.Whetherwearetoaccelerateourgrowthfromfiscal2014onward,orfocusonmakingthatgrowthmoresustainable,itisimportantthatweusethethreeyearsuntilfiscal2013tobuildasolidmanagementfoundationthatisresilienttochangesintheeconomy.Thisisthemaingoalofthenextmedium-termmanagementplan. Asamanufacturingcompany,theTsubakiGroupstrivestoplacecustomersfirstandtoprovidethebestsolutionstocustomersaroundtheworld.Weaimtocontributetosocietyasawholethroughman-ufacturinginitiatives,suchasbolsteringdevelopmentofenvironmentallyfriendlyproductsthathelpourcustomerstoreducetheirenvironmentalburdensandincreasetheireconomicefficiency. Iaskforthecontinuedsupportofourshareholdersandinvestors.
IsamuOsaPresidentandRepresentativeDirector
11
WhataresomekeypointsinregardtotheTsubakiGroup’sconsolidatedperformanceinfiscal2010?
Throughourearlyresponsetothedeclineindemandfollowingthedeteriorationoftheglobalecon-
omy,particularlyinregardtoourthoroughmeasurestoreducefixedcosts,wewereabletoachieve
operatingincomethatexceededourinitialexpectations.
Infiscal2010,net sales fell20.3%or¥28.7billionyearonyear.This substantialdecrease innet salespulledoperating
incomedowntoalevel¥13.1billionlowerthanthatoffiscal2009.However,theTsubakiGroupmanagedtocutfixedcosts,
suchaspersonnelcosts,byapproximately¥8.3billion.Additionally,weworkedtoreducevariablecoststhroughsuch
initiativesaspromotingin-Groupmanufacturing.Asaresultoftheseefforts,operatingincomestoodat¥4.7billion.This
representedasignificantyear-on-yeardecreaseof47.9%,andgreatlyexceededourinitialexpectationsof¥0.8billion.
Howwasperformanceonaquarterlybasis?
Netsalesshowedatrendtowardrecovery,particularlyinAutomotivePartsoperations.Further,the
effectsofcost-cuttingmeasuresweregreat,andasaresultprofitmarginsshowedimprovementthat
wasmoreimpressivethanthatseeninnetsales.
Consolidatednetsalesonaquarterlybasiswereasfollows:netsalesinthefirstquarteroffiscal2010fellto¥23.9billion,
however,fromthesecondquarteronwardwesawstrongrecovery,andinthefourthquarternetsaleswere¥33.6billion,
recoveringtothesamelevelasthethirdquarteroffiscal2009(¥33.1billion).Thespeedofrecovery,though,differed
greatlybetweendifferentareasofoperation.ThegreatestdrivingforcebehindtherecoverywastheTsubakiGroup’s
AutomotivePartsoperations.TheseoperationsareseeingparticularlyimpressiverecoveryinsalesinJapan,NorthAmer-
ica,andAsia.Conversely,areasrelatedtocapital investment,suchasChainoperations,PowerTransmissionUnitsand
Componentsoperations,andMaterialsHandlingSystemsoperations,sawrelativelysluggishrecoveryinsales.Thecur-
tailingofcapitalinvestmentbottomedoutandbegantorecoveratamoderatepaceinthesecondhalfoffiscal2010.
However,takingintoaccountthebusinesstrendsthatwehaveseenthusfar,weexpectthattherewillbea3–6month
timelagbeforetheeffectsoftherecoveryspreadtosuchareasasChainoperationsandPowerTransmissionUnitsand
Componentsoperations.
Theoperatingincomemargin,however,improvedto8.2%inthefourthquarteroffiscal2010.Whilenetsaleswereatthe
samelevelinthethirdquarteroffiscal2009,theoperatingincomemarginatthattimewasonly4.8%.Thisrepresentsthe
improvementofourbreak-evenpointthroughtheeffectsofthecost-cuttingmeasuresthatIhavementionedpreviously.
Q
Q
4Q2Q 3Q10.1Q
%
Net sales (left) Operating income margin (right)
33.6
26.523.9
28.68.2
6.3
1.9
–1.3
Billions of yen
Quarterly Results
36
24
12
0
–12
12
8
4
0
–4
Chain operationsPower transmission units and components operations Automotive parts operationsMaterials handling systems operations
¥112.7 billion
FY2010Net Sales
Materials Handling Systems Segment
18%
Power TransmissionProducts Segment
82%
Composition of Sales by Segment
12
TheTsubakiGroup’sPerformanceandStrategies
Thenewlyannouncedmedium-termmanagementplan(forfiscal2011to2013)targetsnetsalesof¥150.0
billionandanoperatingincomemarginof9.0%,onaconsolidatedbasis.Thesetargetsseemlowcom-
paredtofiscal2008,inwhichtheTsubakiGroupachieveditshighestrecordresults(netsalesof¥167.2
billionandoperatingincomemarginof11.8%).Whatisthereasoningbehindthis?
TheMedium-TermManagementPlan2012wasestablishedbasedonamedium-termperspective
andthereforeplacesstrengtheningourmanagementfoundationtoensuresustainablegrowthas
itstoppriority.Inordertoconstructasolidmanagementfoundationthatisresilienttochangesin
theeconomicenvironment,wewillstepupinvestmentsinareasthatarecrucialtothisgoal.
Thismedium-termmanagementplandoesnotmerelyfocusonthecomingthree-yearperiod,butinsteadtakesamore
medium-termperspective.Accordingly,itsmainpriorityisstrengtheningtheTsubakiGroup’smanagementfoundation
inordertoimprovetheGroup’sgrowthpotential,aswellasthesustainabilityofthisgrowth.Previously,wehaverevised
medium-termmanagementplansyearly.Bysettingthismedium-termmanagementplanforthreeyears,weintendto
steadilyimplementinvestmentthatiscrucialtowardstrengtheningourmanagementfoundation.
Further,infiscal2008,whenweachievedourrecordperformance,theexchangeratewas¥114totheUS$and¥161to
theeuro.Thismedium-termmanagementplan,however,isbasedontheyenremainingstrong,withanexchangerateof
¥85totheUS$and¥115totheeuro.Thedifferenceintheexchangeratesisanotherreasonthatthesegoalsweresetlow.
Q
ExpansiongrowthStrengtheningmanage-
mentfoundationforsustainedgrowth
Furtherstrengtheningofrevenue/profitstructure
Medium-TermManagementPlan2012
FY2011 FY2013
Netsales ¥127.0billionllionlion ¥150.0billion
Operatingincome ¥6.4billion ¥13.5billion
Operatingincomemargin 5.0% 9.0%
Withoutbeing limitedbyexisting ideas,
wewillreevaluateproductstrategiesand
regional strategies f rom a medium–to
long–termviewpointandworktoreform
ourrevenue/profitstructure.
BasicManagementPolicies
1. Honethe“globalbest”managementstrategy2. Strengthenfoundationasamanufacturer3. Becomeasolutionsprovider
OutlineoftheMedium-TermManagementPlan2012
ThreeYearsofStrengtheningManagementFoundationinResponsetoDramaticallyChangingOperatingEnvironment
~2008 2013~20152010~2012
ConsolidatedResultsPlan
Emergencycountermeasuresforrapidchangeineconomic
environment
2009100thanniversary
offounding
2016
13
IntheMedium-termManagementPlan2012,whatspecificstrategieswillyouimplement,andwhatare
thebasicmanagementpoliciesbehindthese?
Basedonthreebasicmanagementpolicies—honethe“globalbest”managementstrategy,strength-
enfoundationasamanufacturer,andbecomeasolutionsprovider—wewillworktofurtherdifferen-
tiateourselves,asitisthisdifferentiationthatisthesourceoftheTsubakiGroup’scompetitiveedge.
Basicmanagementpolicy1:Honethe“globalbest”managementstrategy
TheTsubakiGroup’sconsolidatednetsalesrangedfrom¥64.6billionto¥120.7billioninthe1980sandfrom¥101.6billion
to¥140.3billioninthe1990s.Since2000,netsaleshaverangedfrom¥112.7billionto¥167.2billion.Inthismanner,the
levelofTsubakiGroup’sconsolidatednetsaleshasgraduallyincreased.Oneofthefactorsbehindthissteadygrowthis
ourimplementationofthe“globalbest”managementstrategy.Wehaveprogressivelyadvancedtheglobalizationofour
operationsbasedontheconceptofcomprehensiveoptimization—optimallocationforproduction,optimallocationfor
procurement,andoptimallocationformarketing.Regardlessoftheresults,however,therestillremainedanumberof
problemswiththe“globalbest”managementstrategy.
OneexampleofthiswouldbetheoperationofU.S.Tsubaki,Inc.(referredtoasUSThereinafter),oursubsidiaryinthe
UnitedStates.USTengagesinproductionandsalesofchains,powertransmissionproducts,automotiveparts,andma-
terialshandlingsystems.Atthissubsidiary,optimizationforspecificregionalcharacteristicswasprioritized.This,however,
restrictedourabilitytoperformcomprehensiveoptimizationonaglobalscalewhiletakingintoaccountthecharacter-
isticsofalloperations.Reflectingonthis,inJuly2010wereorganizedoperationsatUST,dividingitintoheadquarters,
whichhandlesmanagementonly,andtwooperatingcompanies.Eachoperatingunitwasthenplacedunderthedirect
controlofachiefbusinessofficer(CBO).Thisallowedforthetimelydevelopmentandpromptimplementationofglobal
strategiespertainingtoproduction,procurement,andsales.
Anotherproblemthatoccurredinrelationtothe“globalbest”managementplanwastheslowexpansionofChain
operationsintotheEuropeanmarket.WhileChainoperationsboasta24%shareoftheglobalmarketforindustrial-use
steelchains,intheEuropeanmarket,thatsharewasstalledatlessthan10%.Aimingforthequickresolutionofthisprob-
lem,inApril2010theGrouppurchasedKabelSchleppGmbH(referredtoasKShereinafter),andmadeitasubsidiary.(For
furtherinformation,pleaseseethecolumnbelow.)KS,basedinGermany,possessesadiversecustomerbase,aswellas
globalmanufacturingfacilities. Inadditiontoexpandingourshareofthecableveyormarket,takingadvantageofKS’
EuropeancustomerbasewillallowustobolstersalesofawiderangeofTsubakiproducts,includingnotonlyindustrial-
usesteelchainsbutalsosuchproductsaspowertransmissionunitsandcomponents.Furthermore,thiscontributesto
ourabilitytoperformcomprehensiveoptimizationofproductionandprocurementonaglobalscale.
Q
AcquisitionofKabelSchleppGmbH(April2010)
KabelSchlepp (KS) is an equipment component manu-
facturer that was established in 1954. The company’s
headquartersisinWenden,Germany.Withapioneering
presence in support and guidance systems for cables
andhoses,whichareknownascableveyors inTsubaki-
moto’s product lineup, KS has a strong customer base
that includes more than 7,000 companies in Germany,
France,andItalyalone.Inparticular,KShasbuiltastrong
directsalessystemthatservestopmanufacturersofma-
chinetoolsandautomobiles.
Tsubakimotohashadatechnicalcooperationagree-
ment with KS for many years, and in April 2010 we ac-
quired KS for €20 million, making KS a subsidiary. As a
result,wewillbeabletocombinetheagent-basedsales
channelthatisastrengthoftheTsubakiGroupwiththe
directsalesnetworkthatisastrengthofKS.Weexpectto
expandourglobal shareof themarkets forchainsand
power transmissionproducts.Moreover,byconsolidat-
ingbases,wewillworktofurther increaseefficiencyin
productdevelopmentandproduction.
KSheadquartersbuildingandcableveyorproductionsite
14
TheTsubakiGroup’sPerformanceandStrategies
Basicmanagementpolicy2:Strengthenfoundationasamanufacturer
TheTsubakiGrouppossessesproductlinesthathavealargeshareoftheglobalmarketineachoftheareasitoperatesin.
Further,ithassteadilyexpandedthescopeofthesebusinessactivities.Thereasonitwasabletoaccomplishthesefeats
liesinitsproductandmanufacturingtechnologies,whichhavebeenthedrivingforcebehindthedifferentiationofthe
TsubakiGroup.Duringtheperiodofthenewmedium-termmanagementplan,wewillreturnonceagaintotheseroots.
Ibelievethatworkingtofurtherimprovethequalityofallofourproductswillformthefoundationonwhichwewill
achievesustainablegrowth.
Dantotsuactivitiesareanexampleofoureffortsgearedtowardthisgoal.Theseactivitiesarenotbasedonthecon-
ventionalapproachofreducingqualitydefectsorincreasingproductivity.Theyareproductioninnovationactivitiesthat
arerigorouslyfocusedonqualityandcosts,sothatweachieve“zeroqualitydefects”anddonothavetostopaproduc-
tionlineonceperday.InAutomotivePartsoperations,wheretheseproductioninnovationactivitieswereintroducedat
anearlystage,notonlywasthereanimprovementinproductquality,profitabilityalsogreatlyincreasedduetothesub-
stantialriseinproductivity.Asaresult,thesegmentachievedhigherincomeregardlessofthedecreaseinsales.Going
forward,theTsubakiGroupwillimplementthesedantotsuactivitiesatallGroupmanufacturingcompanies.Moreover,
wewillworktobolsterourhumanresourcesdevelopmentonaglobalbasisthroughsuchinitiativesaspostingengineers
overseasandsendingyoungengineersonoverseasassignments.
Throughsuchefforts,weareexpandingourshareinhigh-endmarketsinEuropeandtheUnitedStates.Atthesame
time,wewillworktocapturedemandinthepromisingmarketsinemergingcountries,suchastheBRICs,andexpandour
globalmarketshare.Tothisend,inadditiontothesalesofficeinBrazilestablishedduring2009,wefoundedasalescom-
panyforpowertransmissionproducts(generalindustrialmachineryandparts)inIndiainJune2010.However,inorderto
advanceinemergingmarkets,itisnotenoughtosimplyincreasethenumberofsalesoffices.Ibelievethatitisimportant
thatweworktoprovidenewproductstailoredtoeachmarket’sneeds.Toenhanceourabilitytointroducesuchproducts,
wewillthoroughlycutcostbyrevisingourcomponentlineupandreevaluatingourmanufacturingprocesses.
10.2H10.1H09.2H
Index (second half of �scal 2009 = 100)
Productivity in Automotive Parts Operations (Saitama Plant) (Production Amount per Hour)
100
120126
0
100
120
140
AutoEngineeringLabOpensattheSaitamaPlant
(June2009)
AttheSaitamaPlant,weopenedtheAutoEngineering
Lab,whichstartedfullscaleoperationsinJune2009.This
labwillbeourbaseforR&Dinnext-generationautomo-
tive technologiesandparts, suchas timingchaindrive
systems,inwhichwehaveaglobalmarketshareofmore
than30%.
Atthelab,wecollectdatafromperformancetestsof
productsusingactualenginesandvehicles.Inaddition,
customers can directly view testing conditions and re-
sults.Moreover,wewillresearchstructuresandmaterials
neededtocreateenvironmentallyfriendlyproductsand
to reduce costs. We will also develop new production
andprocessingtechnologiesfortheefficientmasspro-
ductionofnewproducts.Intheseways,wewillworkto
achieve further gains in the quality, technologies, and
productioncapacityoftheGroup’sautomotivepartsop-
erationsandtodifferentiatethoseoperations.
ThebuildinghousingtheAutoEngineeringLabreflectsconsiderationfortheenvironment,suchasrooftopgreening.
15
Basicmanagementpolicy3:Becomeasolutionsprovider
Therearetwoimplicationstoourbasicmanagementpolicyofbecomingasolutionsprovider.
Thefirstistogoonestepbeyondsimplyproducingproductsattherequestofcustomers.Thisentailsproposingsolu-
tionstocustomerproblemsandworkingtogetherwithcustomerstodevelopproducts.Whilewehavealwaysbeen
stronginthisarea,wewillworktofurtherincreasethisstrength.Infiscal2009,theAutomotivePartssegment,which
primarilysellsproductsdirectlytocustomers,openedtheAutoEngineeringLabattheflagshipSaitamaPlant.Thisnew
laballowscustomerstoseefirst-handthedetailsandresultsoftechnologicaltestsconductedonactualenginesand
vehicles.Additionally, inregardtoChainandPowerTransmissionUnitsandComponentsoperations,whichprimarily
dealindirectlythroughretailers,wearestrengtheningthesystemthroughwhichsalesdivisionscananalyzeandunder-
standtheneedsofproducts’end-users,andcommunicatethesetomanufacturingdivisionsinatimelymanner.
Thesecondistoexpandintonewareasofoperation.LookingatthelineupofTsubakiproducts,thePowerTransmis-
sionProductssegment(chains,powertransmissionunitsandcomponents,andautomotiveparts)deals inpartsand
units,andtheMaterialsHandlingSystemssegmentdealsinsystems.However,ourdevelopmentintheareaofmodules,
whicharepositionedbetweenthetwo,hasbeenslow.Forthepastseveralyears,wehavebeenadvancingthedevelop-
mentofmoduleproducts.Inparticular,wehavebeenhighlysuccessfulinourdevelopmentofsuchnewproductsasthe
ZipChainLifter*1,anultra-high-speedelevator,andtheDireflexModularUnit*2.Infiscal2011,wewilldevelopaModule
BusinessUnitintheMaterialsHandlingSystemssegment,andworktoexpandoperationsintheareaofmodules,which
wehavepreviouslybeenunabletofullyenterinto.*1 ZipChainLifter:Alifterthatusestwochainsthatinterlockinazip-likefashiontoformasinglestrongunitthatcanbepushedorpulled.*2 DireflexModularUnit:Acompactmonofunctionalconveyorunitthatiscapableofpayingout,rotationwhilestopped,androtationwhiletraveling.
Centeredonthesethreebasicmanagementpolicies,wewillstrivetobuildastrongmanagementfoundation
thatsupportssustainedgrowth.Throughmanufacturinginitiatives,theTsubakiGroupwillendeavortoprovide
thebestsolutionstocustomersaroundtheworld.
TakingontheChallengeoftheModuleBusiness
Parts Units SystemsModules
OperationalFieldsaftertheEstablishmentoftheModuleBusiness
MaterialsHandlingSystemsFieldModuleBusinessUnitPowerTransmissionField
EnhancingourLineupofModularConveyorsthrough
SalesTie-upwithFlexLink,ofSweden(July2010)
To enhance the lineup of products in our Module
Business,weconcludedasalestie-upagreementwith
Sweden’sFlexLink,whichhasa50%shareoftheglob-
al market for aluminum-frame modular conveyors.
FromJuly1,westartedsalesofFlexLink’saluminum-
frame3-Dconveyors.Throughcombinationsofmore
than 10,000 units and components, these conveyor
systems can flexibly accommodate diverse convey-
ance styles matched to applications, such as linear,
round,inclined,andverticalmovement.Thesystems
are suitable for comparatively small volume, light
weight conveyance operations. The Company will
worktoincreasesalesoftheseproducts.Thesesales
initiatives will include offering these products in
combinationwithourhigh-speedZipChainLifterfor
use in suchareasasautomotiveparts,photovoltaic
panels,andmed-
icalequipment.
FlexLinkSystem,3-Dconveyor
Tsubaki’sComprehensiveStrengths
Eco & Eco Benefits that are Provided
to Customers by Eco-Products
ByusingenvironmentallyfriendlyTsubakieco-products,cus-
tomerscanrealizereducedenvironmentalburden,improved
worksites,increasedefficiency,andenhancedquality.Inad-
dition,customerscancreateenvironmentallyfriendlyprod-
uctsby incorporatingTsubakieco-products intotheirown
products, thereby creating environmentally friendly prod-
uctsthatcanexpandtheirbusinessopportunities.
<BenefitsfromtheUseofEco-Products>
(1)Reducingcustomerprocurementcostsasaresultofsim-
plerproducts
(2)Reducingrunningcosts,suchasthroughlongwear life
andmaintenance-freeoperation
(3)Promotingresourcerecyclingandreducingincineration
coststhroughreuseandrecycling
Tsubaki Group Activities Targeting
Eco & Eco Functionality
Increasing environmentally friendly products is a major
themeintheTsubakiGroup’seffortstoestablishafounda-
tion for environmental management. In this way, we are
workingtowardsuchobjectivesasachievingsmallersizes
by enhancing functionality and reducing waste through
longwearlife.
<PointsofEco-ProductDevelopment>
(1)Pursuitofeco-design,reducedenvironmentalburdenof
procuredproducts
(2)Rationalizationofeco-responsivenessthroughtheintro-
ductionoflife-cycleassessment(LCA)
(3)Buildanenvironmentallyfriendlyimagewith
eco-productsasafoundation
16
Tsubaki’sEco&Eco(EcologyandEconomy)TheTsubakiGroup’sPerformanceandStrategies
ForTsubaki,Eco&Eco(EcologyandEconomy)meansworkingforbothareducedenvironmentalburdenandenhancedeco-nomicefficiency,suchascostsavingforcustomers,throughtheprovisionofenvironmentallyfriendlyproductstocustomers.Throughitsproducts,theTsubakiGroupwillworktogetherwithitscustomerstodriveprogressinenvironmentalfriendlinessandtoenhancecustomers’economicefficiency.
TheTsubakiGroup’sEco&EcoApproach
Customers TsubakiGroup
Ecology—increasing
benefits
Economy—increasing
benefits
Development of Eco-Products
ProductsthatMeetTsubaki’sEco-Evaluation
Standards
FocusingonEco&Ecofunctionality
Provision
Asanequipmentmanufacturer,theTsubakiGroupworkstodevelopenvironmentallyfriendlyproductsthathelpitscustomerstoreducetheenvironmentalburdenoftheiroperationsandtoimprovetheireconomicefficiency.Tothatend,wehaveinstitutedapolicythatallofthenewproductsthatwedevelopmustbeenvironmentallyfriendly.
Tsubaki’senvironmentallyfriendlyeco-productshelpcustomerstoachievetheirownenvironmentalobjectives.
17
Inaccordancewiththekeyphrase,“Allnewproductdevelopmentiseco-productdevelopment,”theentireTsubakiGroupisworkingtogetherinthedevelopmentofeco-products.
MovingForward,allNewProductswillbeEco-Products.
EnvironmentalFriendlinessFactors
TheTsubakiGroupclassifiestheenvironmentalfriendlinessfactorsthatareunderitscontrolintosevencategories.Thesefactorsareusedinthe
formationofaframeworkforproductdevelopmentanddesign.
EnvironmentalFriendlinessFactors ProductSpecificationDefinitions Benefits
Resourceconservation,reductionofwastegenerated
Reductionofamountofresourcesconsumed,recycling,increasedwearlife,etc.,leadingtoresourceconservation
Smallsizeandlightweight,lube-free,longwearlife,reducedwaste,recycling,noresidue
Energysaving,reducedCO2emissions
Reducedenergyusage,leadingtoreductionsinCO2Lowfriction,highefficiency,smallsizeandlightweight
Cleanworkplacesandusageenvironments
Leadingtoimprovementsincustomerworkplaceenviron-ments,usageenvironments,etc.
Lube-free,minimaldust,preventionofspills
Considerationforthesurroundingenvironment
Considerationfortheareaaroundcustomerworksitesandforthegenerallivingenvironmentinthesurroundingarea
Pollutionprevention,lownoise,lowvibration,lowodor
EaseofdisposalSupportingenvironmentalfriendlinessthroughrecyclability,wastesortability,etc.
Useofsametypesofmaterials,easeofdisassembly
Reuse Reuseofcertainproductcomponentsafterproductcollection Reuseofproducts
Considerationforharmfulsubstances
Eliminationofharmfulchemicalsubstances,includingreductionsinlinewithcustomerrequests
Reductioninharmfulchemicalsubstances,useofediblegrease
Eco-ProductDecisionProcess
Toincreasethereliabilityofproductenvironmentalfriendliness,theTsubakiGrouphassetstandardsthatmustbefulfilledforaproductto
beconsideredaneco-product.
RepresentativeEco-Products
RSRollerChainG7-EX
*1IncomparisonwiththeCompany’sconventionalRSRollerChain(RS80-1)andLCAInventoryanalysis(perunit)*2IncomparisonwiththeCompany’sconventionalRSRollerChain(RS100-1andRS80-1)andLCAInventoryanalysis(perunit)
EnvironmentalFriendlinessFactors
•Doublethewearlife(throughlongerwearlife)
49%reductioninCO2emissions*1
•33%increaseindriveperformance(throughreducedsize)
37%reductioninCO2emissions*2
•Reductioninmaintenancetimeandeffort
•Reductioninchainswitch-ingcosts
•Reductioninspaceandcostthroughsmallerequipment
•Reductionincoststhroughsmallerchains
Ecology,Economy
Wedetermineeco-evaluationstandardsforvariousproductsin
accordancewiththeTsubakiGroupstandardsmanual.
EvaluationManual/Eco-EvaluationStandards
Tosatisfyeco-evaluationstandards,weimplementenvironmentallyfriendly
productdesign.
ProductDesign
Weconducteco-evaluationsofproductsinaccordancewithour
evaluationmanualandeco-evaluationstandards.
Eco-Evaluations
Onlywhenaproductclearstheevaluationprocessisitconsidered
tobeaneco-product.
Determination/Display
Fiscal2011SegmentStrategies
18
TheTsubakiGroup’sPerformanceandStrategies
Ourhighestprioritywillbetoincreaseourshareinhigh-endmarkets,centeredondifferentiatedproductsinareaswhere we can leverage the strengths of our products,such as abrasion resistance, strength, and energy effi-ciency. Specifically,inNorthAmericawewillworktoexpandsalesof theRSRollerChainG7-EX. Incomparisonwithconventional products, this new roller chain providestwicethewearlifeand33%betterdriveperformance.InEurope,weintroducedtheRS-WINNER,anewEuropean-specification rollerchain.Wewillalso takesteps toex-pandourshareofthechainmarket,suchasleveragingthecustomerbaseoftherecentlyacquiredKS.InJapan,meanwhile,wewillmakethemostofourproposalcapa-bilities and promote the usage of Tsubaki products in
growthfields,suchasareasrelatedtophotovoltaicpan-elsandlithiumbatteries. In emerging markets, our strategy calls for focusingonindustriesthatarerecordingrelativelystablegrowth,even in a challenging global economic environment,suchasminingandsteel.Inaddition,wewillstrivetoac-celerate growth in sales of conveyor chains in China,whichisrecordingrelativelystrongeconomicexpansion. In thisway,wearesteadily implementingourmar-ketingstrategy.Moreover,inadditiontoJapanandtheUnited States, we are working to optimize our supplybasesinsuchmarketsasTaiwan,SouthKorea,andGer-many, and strategic partner in Brazil and Italy. We willalsoimplementdantotsuactivitiestofurtherstrengthenourproductiontechnologies.
Thechainindustryisundergoingreorganizationonaglobalscale.Inthissetting,theTsubakiGroupwillworkto
furtherincreaseitsshareinhigh-endofthemarkets,wherewecanleverageourtechnicalstrengths,andwewill
accelerateourbusinessdevelopmentactivitiesingrowthfields,suchasphotovoltaicpanels.
Steadyprogressinbusinessdevelopmentbasedonaglobalperspective
ChainOperations
Billions of yen %
Net sales (left)* From fiscal 2011, sprocket operations are included in this segment.
Operating income margin (right)
38x47
8.2
2.20.2
35.2
44.6
52.4
10 (Results) 11 (Plan) 13 (Plan) FY0
20
40
60
0
4
8
12
Results of Operations*
StrategicproductfortheEuropeanmarket:RS-WINNER Salespromotiontoolsavailableinsixlanguages,includingRussian
ChainOperations
19
Indevelopedcountries,wewillfollowthekeyconceptof“differentiationinenvironmentaltechnologies”aswecon-tinueworkingtoexpandourshareinhigh-endmarkets,wherewecanfullyleveragethestrengthsofourproducts.These advantages include small size, light weight, highefficiency,lowfrictionloss,longwearlife,andlownoiseoperation. However, thescaleof theautomotive industry is re-cordingrapidgrowthinChinaandotheremergingmar-kets.Inthissetting,tofurtherexpandtheglobalshareoftheTsubakiGroupweneedtoimplementaggressiveini-tiativestargetingtheseemergingmarkets.Ourkeywordsin these markets will be“costs and speed.” Especially in
regardtocosts,weneedtorapidlydeveloptimingchaindrivesystemsthatcanbeprovidedatsubstantiallylowerprices.Tothatend,wewillmakefulluseoftheAutoEngi-neeringLabthatweopenedattheSaitamaPlanttopro-pelfurtherinnovationinproductionanddevelopment.Atthesametime,wewillaccelerateourimplementationofdantotsuactivities,whicharealreadygeneratingsubstan-tial results at the Saitama Plant. Moreover, we will takestepstofurtherstrengthenourglobalproductionsystem,whichnowhasbasesinsixregions—Japan,NorthAmeri-ca,Europe,Thailand,China,andSouthKorea.Forexample,wearebuildinganewplantinSouthKoreathatissched-uledtobecompletedinJune2011.
ExpandingglobalsharewithacquisitionofnewengineprojectsIndevelopedcountries,wewilluseouradvancedtechnicalproposalcapabilitiestoachievecontinuedprogresswith
ourdifferentiationstrategy. Inaddition,throughwide-ranginginnovationandimprovements intheareasof“costs
andspeed,”wewillmoveforwardaggressivelyinemergingmarketsandstrivetoexpandourglobalmarketsharefor
timingchaindrivesystems.
38x47
10.910.2
9.5
38.2 38.7
47.2
10 (Results) 11 (Plan) 13 (Plan)
Billions of yen %
0
20
40
60
0
4
8
12
FY
Results of Operations
Net sales (left) Operating income margin (right)
AutomotivePartsOperations
Testinginanechoicenginebenchroom
AutomotivePartsOperations
9.2
6.6
‒0.8
18.518.4 20.7
Billions of yen %
FY
Results of Operations*
Net sales (left) Operating income margin (right)
10 (Results) 11 (Plan) 13 (Plan)
0
20
10
30
4
0
8
12
* Sprocket operations, which were included in this segment through fiscal 2010, were transferred to chain operations from fiscal 2011.
RigorouslyenhancingproductcapabilitiesthroughtechnicalleadershipByfosteringinnovationinproductiontechnologies,wewillenhanceourproductcapabilitiesandproductivityandachievebusinessgrowth.
20
PowerTransmissionUnitsandComponentsOperations
Theseoperationsarecharacterizedbya largenumberofproductsandintensecompetition.Accordingly,itisessentialtohaveaflexiblemarketingstrategybasedontechnicaldifferentiation.Inparticular,threeofourproductshavebeenhighlyevaluated for their differentiated technologies—cam clutches, linear actuators,andwormgearreducers.Movingforward,thesethreeproductswillplayacentralroleinoureffortstoexpandourshareinoverseasmarkets. Wewill also focusonexpandingourbusiness incomparativelynewfields,suchascamclutchesformotorcyclesandfour-wheeledvehicles.Infiscal2011,endingMarch31,2011,salesofcamclutchesforuseinmotorcyclestartersandinfour-wheeledvehicleautomatictransmissionsareexpectedtorecordsubstantialgrowth,rising50%to100%fromfiscal2010. Inaddition,thissegmentwillworktogetherwiththechainsegmenttoimple-mentbusinessdevelopment initiatives innewmarkets, suchasmining.Asonefacetof thoseactivities,wehave restartedsalesofultra-largecouplingsused inpetroleumplants.Inthefuture,throughsustainedinnovationinproductiontech-nologies,wewillendeavortofurtherexpandthescopeofthesegment’sbusiness.
TheTsubakiGroup’sPerformanceandStrategies
MaterialsHandlingSystemsOperations
Thissegment’sresultsareheavilyinfluencedbytrendsinprivate-sectorcapitalinvestment.Inthisoperatingenvironment,tofosterstablegrowthinthisseg-mentwemustbolstertheprovisionofsolutionsandenhancecustomerser-vice. Accordingly, we will strengthen all functions and services in sales,engineering, and maintenance and will work closely with our customers attheirworksitestoprovidesolutionsthathelpthemtoresolvetheirchallenges. Also,wewillfocusonenhancingthecapabilitiesofourautomaticsortingsystems,whichhavebeenhighlyevaluatedfortheiroperationalstabilityandsortingprecision.Atthesametime,wewillstrengthenouroperationsintheModuleBusiness,whereweexpectgrowth,andwillstepupourfocusonmain-tenanceoperations,whichhelpcustomerstoachievestableoperationandin-creasedproductivitywithinstalledfacilities.
Buildingafoundationforstable,ongoingoperationsbybolsteringsolutionsprovisionactivitiesandcustomerserviceWewillbolstertheprovisionofsolutionsandstepupourpromotionoftheModuleBusinessandourfocusonincreasingmaintenanceservices.
38x47
6.5
‒0.3
0.2
20.4
25.2
29.4
Billions of yen %
10
20
30
4
0 0
8
12
FY
Results of Operations
Net sales (left) Operating income margin (right)
10 (Results) 11 (Plan) 13 (Plan)
PowerTransmissionUnitsandComponentsOperations
MaterialsHandlingSystemsOperations