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Could you explain what efforts were made during fiscal 2010 and what results were achieved? |
In 2010, when Aichi Steel celebrated the 70th anniversary of its founding, the automobile industry saw an increase in overseas production, especially in Asia, and a solid growth in demand for construction machinery, despite the strong yen and rising resource prices. These positive results were brought about with the help of the economic measures taken by the Japanese government and the economic booms enjoyed by China and ASEAN countries.
Aichi Steel also significantly increased the sales volume of steel products and forgings. Moreover, we successfully increased both sales and profits, which can be largely attributed to the results of Project Z100, a Group-wide effort launched in 2008 to reduce production costs by 10 billion yen by thoroughly cutting waste.
As a corporate strategy toward sustainable growth, we have created "Doctrine 1-3-7." This is based around the idea that in our core business, we create a financial structure that enables us to lower our break-even point and generate profits at a factory-operating rate of 70% by 2011 (3rd year of the strategy), with 2009 as the starting point (1st year). This strategy also has a long term goal of reforming our production processes and rebuilding our global sites by 2015 (7th year).
In 2010 (2nd year of the strategy), we promoted radical reforms of our corporate structure, launched projects to develop new products and create new markets, and commenced the operation of Seki Plant (Gifu Pref.), a new production site for "MAGFINE" for automobile use.
Furthermore, we promoted the expansion of our global presence, including the opening of a Silicon Valley office and the establishment of an affiliated company in South Korea for our electromagnetic products business. |
Automobile manufacturers have recently accelerated overseas operations to ensure global optimization of their manufacturing operations. How are you responding to this trend? |
Aichi Steel's affiliated companies overseas include a total of five plants in forging operations in the United States and the Asian region. We consider Thailand and the United States to be the most important for our global strategy. Thailand is growing significantly as a global base for automobile production, and is expected to see an increase in demand for forgings as a base for supplying auto parts to Asian countries. At present, Aichi International (Thailand) Co., Ltd. (AIT) machines the forgings purchased from our forging subsidiaries in Asia and ships them for Toyota IMV engines and propeller shafts. In June 2012, AIT will start operating a new factory that enables integrated forging production. We will expand our business by establishing this new factory as a global production base, with cooperation from our plants in China, the Philippines, and Indonesia.
In the United States, Aichi Forge USA, Inc. (AFU) supplies forgings to the major production bases of Toyota Motor. AFU offers a broad product lineup, from large forgings (crankshafts etc.) to small and medium-sized forgings (gears etc.). In regard to overseas development, we have been bringing up prospective leaders of subsidiary companies who have learned manufacturing expertise at the mother plant in Japan. Our goal is to be a true global company with self-sufficient and independent local plants.
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Please tell us about your aspirations for the future. |
There are worries about the risk of an economic downturn in fiscal 2011 because of the Great East Japan Earthquake. We expect that due to rising interest in compact cars and eco-cars, the automobile industry will see a decrease in the quantity of specialty steel used per vehicle. For ensuring the sustainable growth of our company under these circumstances, it is essential to accelerate the Group-wide efforts of "reengineering," developing new products, and creating new markets. The key to success is a "workplace capability" for which individual employees need to play an important role. I am confident that if this workplace capability can be used to maximize the effects of reengineering, we will have a bright future ahead of us.
In terms of manufacturing and CSR activities, we need to become a "company of choice" for our stakeholders, or we will not be able to survive in the future. If we can be a "globally-valued company," which is continuously wanted and loved by local communities around the world, it will also be a source of pride for our employees. I truly hope that Aichi Steel will be such a company group. As the first step to achieving this goal, I want to create a workplace environment in which individual employees always treat others with a gentle smile and kind words, as in the saying, "Wagen Aigo.*"
*Wagen Aigo: a Buddhist term referring to "even if you are in moments of pain, always treat others with a gentle smile and kind words."
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