Nachi-Fujikoshi Corp. (Japan; TSE: 6474) announced another investment program to build on its constant velocity (CV) joint manufacturing capacity.
Tactically targeting 2006 only, the company said it will spend approximately USD $9 million by November to boost capacity by 20% worldwide. Nachi said the investments are needed to hold onto its claimed 50% global market share for CV joint bearings.
Nachi manufactured more than 27 million CV joints in 2005 -- 15 million in Japan, and 12 million in other facilities worldwide.
The 2006 investment program aims to push 3 million additional units out of Japan, and 3 million units out of its plants in the United States and the Czech Republic, for a grand total of 33 million worldwide.
Until recently, Nachi only produced CV joints in two locations.
In 2003, Nachi expanded its air conditioning and CV joint production into the Louny, North Bohemia region of the Czech Republic, 30 miles from Prague. Nachi built the plant to address the local sourcing requirements of its Japanese automaker customers setting up manufacturing in the region. One particularly important customer is Toyota Motor Corp., Nachi-Fujikoshi's largest single shareholder.
Nachi's CV production in the United States is done at its U.S. home office and plant in Greenwood, Indiana.
Specifically, Nachi said the 2006 investments will be carefully targeted as follows:
Japan will get a precision press, supported by additional grinding, polishing and assembly capacity.
The U.S. will receive additional grinding, finish and assembly capacity. It and the Czech Republic operation will be more closely integrated.
Ultimately, Nachi said it hopes to build its CV joint business into a strategic core product.
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