Progress of the Mid-term Plan
Vision
To Become No. 1 in Total Quality
We aim to achieve sustainable growth and improve corporate value through an unwavering commitment to total quality. This commitment applies not only to our product quality, but also the quality of the services we provide in all of our business processes.
Policies
To Reinforce the Corporate Foundation as NSK Moves toward its Centenary
NSK has identified the three years (FY2006-FY2008) of the mid-term plan as an initial stage of growth for the decade leading up to 2016, which will mark the 100th anniversary of our founding.
We have two core strategies: growth strategies and profitability enhancement. Alongside these, we have devised the following four Group policies: reinforcement of manufacturing capability, reinforcement of product development capability, reinforcement of overseas profitability and reinforcement of global management capability. We are committed to the implementation of these policies, and continue to evolve for achieving sustainable growth.
Strategies by Segment
Industrial Machinery Bearings
[Segment Positioning]
Income growth driver[Basic Policy]
Expand sales by strengthening our marketing and manufacturing capabilities- Reinforcement of global sales expansion, for instance in emerging markets
- Intentional sales expansion of roller bearings that make the most of NSK technology
- Full-scale business expansion in the aftermarket sector
- Reinforcement of manufacturing capability to support business expansion
- Reinforcement of manufacturing capability, improvement of productivity in existing facilities, establishment of global production structure
[Progress in the First Year]
Overseas sales increased, spurred by NSK’s activities in each region and industrial sector, and operating income and operating income margin both improved. To expand our production foundation, we made capital investment related to the production of large roller bearings.[Priorities in the Second Year]
- Expanding sales of roller bearings
Demand from the steelmaking equipment, machine tools and construction machinery sectors will remain high, while demand in the wind turbine sector is growing. These sectors are our priority industries, and we will strive to reinforce our marketing capability through further activities in each area. As in the previous year, a key growth strategy will be to make capital investment in the production of large roller bearings. - Aftermarket sector sales expansion
We will continue to improve services for end users by reinforcing solution-driven technical support and total supply management. In addition, we will strive to expand our business by making the most of the existing dealerships while actively cultivating a new dealership network.
Automotive Products
[Segment Positioning]
Stable source of income[Basic Policy]
Reinforce profitability and order-winning activities- Establishment of source of income
- Automotive bearings: Reinforcement of manufacturing capability, effective utilization of existing facilities, production stabilization and improvement of productivity by strengthening pre-processing operations
- Automotive components: Expansion of overseas production sites, promotion of cost reduction through development of in-house manufacturing at overseas plants and the implementation of global procurement
- Improving order-winning activities, which will support continued growth after 2009
[Progress in the First Year]
Sales increased, mainly to Japanese companies, and we steadily improved profitability. The steering systems plant in Poland and the needle roller bearing plant in China began mass production in the year ended March 31, 2006, and expanded production smoothly. This contributed to the improvement of income.[Priorities in the Second Year]
- Improvement of profitability
We will maximize capital investment efficiency, reduce external procurement costs and improve productivity. This will lead to an improvement in profitability. At overseas plants, we will strive to improve profitability by implementing global procurement measures (the most appropriate way to optimize the supply chain and expand in-house manufacturing), reinforcing our production foundation and enhancing productivity. - Expansion of overseas production sites
In response to increasing global demand, we will establish a second steering systems plant in Tennessee, U.S.A., and an automotive bearing plant in the outskirts of Chennai, India. In addition, a second building will be added to the automotive bearing plant in Thailand. This expansion of our production sites will reinforce our foundation for overseas business.
Precision Machinery and Parts
[Segment Positioning]
Consistent contribution to income[Basic Policy]
Improve profitability by emphasizing linear motion products- Implementing global sales expansion
- Reinforcement of marketing capability, differentiation by releasing new products
- Strengthening source of income
- Contribution to profit from measures to improve productivity, improvement of market mix
[Progress in the First Year]
In a phase of increasing demand in the machine tools sector, we produced good results through measures to raise productivity and improved profitability. Targets initially set for March 2009 were achieved in the first year of the mid-term plan in all areas, including sales, operating income and operating income margin. Our domestic marketing organization shifted to a new structure to further expand the precision machinery and parts business.[Priorities in the Second Year]
- Continual global sales expansion and measures to improve productivity
We are striving to implement global sales expansion through active deployment to targeted industries and regions, and by using product strategies that match the needs of each demand area. In addition, by continuing measures to improve productivity, such as lowering overall lead time, we will further enhance the capability of our production structure to respond quickly and flexibly to demand fluctuations. - Actively winning orders for “EGIS”–new photofabrication equipment for LCD panel production
In the expanding liquid crystal panel market, we will enhance the presence of NSK’s photofabrication equipment for LCD panel production by releasing “EGIS,” new photofabrication equipment that will reduce operating costs for panel manufacturers substantially. This will help to further expand our business.