Mar 11, 2010

Daifuku to Revamp China Subsidiaries

March 11, 2010

Daifuku Co., Ltd. (Headquarters: Nishiyodogawa-ku, Osaka, Japan) has announced that it will establish a new operating structure in China starting on April 1, 2010, in which Daifuku (China) Co., Ltd. ("DCL"), a new company, will play a leading role in capturing growing demand for material handling systems, including transport, storage, and sorting. Based on these initiatives, the Daifuku Group is seeking to bolster orders in its all business segments. The Group will also develop a stable business base by restructuring six affiliates in China that have been operating independently by businesses and regions, to create a corporate group that can respond effectively to the changing economic environment.

The Daifuku Group established Daifuku (Shanghai) Ltd. ("DSL") in 2002, to sell storage, transport, sorting and picking systems for general manufacturers and the distribution industry. Subsequently, the Group established Daifuku Automation (Tianjin) Co., Ltd. ("DAT") in 2003 and Daifuku Automation (Guangzhou) Co., Ltd. ("DAG") in 2004, to market automobile production line systems. In 2005, it set up Jiangsu Daifuku Rixin Automation Co., Ltd. ("DRA"), a manufacturer of automobile production line systems, and Daifuku Carwash-Machine (Shanghai) Ltd. ("DCS"), a manufacturer of car-wash machines. Contec, a Daifuku subsidiary, meanwhile created Shanghai Contec Microelectronics Corporation ("SHC") and other companies in 1990. The Group established the China Affiliate Management Division in Shanghai in 2008, to oversee affiliates in China. Through this office, the Group has been striving to strengthen and optimize operations, including the Contec Group, in China.
Under the latest scheme for restructuring the organizations of affiliates in China, DAT and DAG will first be integrated into DSL, which will, in turn, be renamed DCL. Meanwhile, DRA and DCS (merging with SHC) will be restructured as subsidiaries of DCL. (See the following Restructuring Scheme.)

In accordance with the restructuring, the Group plans to maximize the management resources (people, goods, capital and information) the Group has accumulated through its investment and development, by consolidating and reallocating. It aims to achieve the specific goals described below:

  1. Sales and services: Enhance the Daifuku brand;
  2. Production: Improve productivity and bolster the Group's competitiveness by strengthening general control functions and cross-section functions of procurement;
  3. Management: Implement flexible financing management and bolster operating efficiency.

Under the Daifuku Group's new three-year business plan, Material Handling and Beyond (from April 2010 to March 2013), the Group positions China as its largest market outside Japan, and it is committed to achieving sales of 15 billion yen on a consolidated basis in three years time, in the fiscal year ending March 2013, and 20 billion yen in five years.

Restructuring Scheme

Restructuring Scheme

Note:Figures in brackets show the investment ratio.

Profile of the new company, Daifuku (China) Co., Ltd.
Headquarters: Changning, Shanghai

Chairman: Katsutoshi Fujiki
Director of Daifuku Co., Ltd., in charge of China's Affiliate Management
(expected to be appointed Managing Director on April 1)

Capital: 1.5 billion yen

Employees: 220
(approximately 600 after the inclusion of DCS and other companies into the subsidiaries)

Main bases:
Shanghai, Beijing, Tianjin, Guangzhou, Chongqing, Fuzhou, Wuhan, Suzhou, and Shenzhen