MIRA INFORM REPORT

 

 

Report Date :

15.12.2014

 

IDENTIFICATION DETAILS

 

Name :

DAIKIN INDUSTRIES, LTD. 

 

 

Registered Office :

Umeda Center Building, 2-4-12, Nakazaki-nishi, Kita-ku, Osaka-shi, Osaka 530-0015

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2014 (Consolidated)

30.09.2014 (Quarterly)

 

 

Date of Incorporation :

14.02.1934

 

 

Com. Reg. No.:

1200-01-059660 (Osaka)

 

 

Legal Form :

Private Company

 

 

Line of Business :

Engaged in manufacturing and sales of Air conditioners and Container Refrigeration Unit as well as Fluoro-Carbon Chemicals & Oil Hydraulics

 

Subject operates through following divisions :-

·         Air Conditioning and Refrigerator Division

·         Oil Hydraulics Division

·         Defense Systems Division

·         Chemical Division

 

 

No of Employees :

56,240

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Maximum Credit Limit :

US$ 360 Million

Status :

Satisfactory

Payment Behaviour :

No Complaints

Litigation :

Clear 

 

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

 

ECGC Country Risk Classification List – September 30, 2014

 

Country Name

Previous Rating

(30.06.2014)

Current Rating

(30.09.2014)

Japan

a1

a1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

Japan ECONOMIC OVERVIEW

 

In the years following World War II, government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) helped Japan develop a technologically advanced economy. Two notable characteristics of the post-war economy were the close interlocking structures of manufacturers, suppliers, and distributors, known as keiretsu, and the guarantee of lifetime employment for a substantial portion of the urban labor force. Both features are now eroding under the dual pressures of global competition and domestic demographic change. Japan's industrial sector is heavily dependent on imported raw materials and fuels. A small agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. While self-sufficient in rice production, Japan imports about 60% of its food on a caloric basis. For three decades, overall real economic growth had been spectacular - a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s. Growth slowed markedly in the 1990s, averaging just 1.7%, largely because of the after effects of inefficient investment and an asset price bubble in the late 1980s that required a protracted period of time for firms to reduce excess debt, capital, and labor. Modest economic growth continued after 2000, but the economy has fallen into recession three times since 2008. A sharp downturn in business investment and global demand for Japan's exports in late 2008 pushed Japan into recession. Government stimulus spending helped the economy recover in late 2009 and 2010, but the economy contracted again in 2011 as the massive 9.0 magnitude earthquake and the ensuing tsunami in March disrupted manufacturing. The economy has largely recovered in the two years since the disaster, but reconstruction in the Tohoku region has been uneven. Prime Minister Shinzo ABE has declared the economy his government's top priority; he has overturned his predecessor's plan to permanently close nuclear power plants and is pursuing an economic revitalization agenda of fiscal stimulus, monetary easing, and structural reform. Japan joined the Trans Pacific Partnership negotiations in 2013, a pact that would open Japan's economy to increased foreign competition and create new export opportunities for Japanese businesses. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2013 stood as the fourth-largest economy in the world after second-place China, which surpassed Japan in 2001, and third-place India, which edged out Japan in 2012. The new government will continue a longstanding debate on restructuring the economy and reining in Japan's huge government debt, which is exceeding 230% of GDP. To help raise government revenue and reduce public debt, Japan decided in 2013 to gradually increase the consumption tax to a total of 10% by the year 2015. Japan is making progress on ending deflation due to a weaker yen and higher energy costs, but reliance on exports to drive growth and an aging, shrinking population pose other major long-term challenges for the economy.

 

Source : CIA

COMPANY NAME

 

DAIKIN INDUSTRIES, LTD.

 

 

Company OUTLINE

 

Company name:            DAIKIN INDUSTRIES, LTD.

Name in local language: DAIKIN KOGYO K.K.

Office address:             Umeda Center Building, 2-4-12, Nakazaki-nishi, Kita-ku,

                                    Osaka-shi, Osaka 530-0015

Country:                        Japan

Office tel:                                 06-6373-4312

Website:                       www.daikin.co.jp  

Business type:              Manufacturer

Industry:                                   Machinery

Established:                  February 14, 1934

Capital:                                     Jp. 85,032,436,655 yen

Employees:                  56,240

Corporate formation:     Listed

Corporation No.:           1200-01-059660 (Osaka Legal Affairs Bureau)

 

 

MAJOR SHAREHOLDERS

 

As of March 31, 2014:

Paid up capital                          Jp. 85,032,436,655 yen

Number of authorized shares     500,000,000 shares

Number of outstanding shares   293,113,973 shares

Number of shareholders                        34,798

 

Major shareholders                                            No of thousand shares (%)

-----------------------------------------------------------------------------------------------------------------

Master Trust Bank of Japan, Ltd.                                    18,100 ( 6.18)

Japan Trustee Services Bank, Ltd.(trust unit)                   14,779 ( 5.04)

Sumitomo Mitsui Banking Corp.                                     9,000 ( 3.07)

Japan Trustee Services Bank, Ltd.(NSSM trust unit)        6,477 ( 2.21)

Japan Trustee Services Bank, Ltd.(Norin Chukin) 4,999 ( 1.71)

Bank of Tokyo-Mitsubishi UFJ, Ltd.                                4,900 ( 1.67)

State Street Bank And Trust Co.(U.S.A.)                          4,346 ( 1.48)

Japan Trustee Services Bank, Ltd.(trust unit #4)              4,231 ( 1.44)

Sumitomo Life Insurance Co.                                          3,595 ( 1.23)

Paribas Securities, Inc.                                                  3,563 ( 1.22)

----------------------------------------------------------------------------------------------------------------

TOTAL                                                                          73,993 (25.24)

 

 

DETAILED PRODUCT CLASSFICATION & ACTIVITY

 

 

Activity                         Product/Service Description

-------------------------------------------------------------------------------

Manufacturing               Air conditioners

Manufacturing               Container refrigeration units

Manufacturing               Fluoro-carbon chemicals

 

 

COMPANY MANAGEMENT

 

Chairman                      Mr. Noriyuki Inoue

Nationality:                    Japan

 

President & CEO           Mr. Masanori Togawa

Nationality:                    Japan

 

Director                       Ms. Chiyono Terada

Nationality:                    Japan

 

Director                                    Mr. Kosuke Ikebuchi

Nationality:                    Japan

 

Director                       Mr. Guntaro Kawamura

Nationality:                    Japan

 

Director                                    Mr. Ken Tayano

Nationality:                    Japan

           

Director                                    Mr. Masatsugu Minaka

Nationality:                    Japan

 

Director                                    Mr. Jiro Tomita

Nationality:                    Japan

 

Director                                    Mr. Takashi Matsuzaki

Nationality:                    Japan

 

Director                       Mr. Koichi Takahashi

Nationality:                    Japan

 

Director                       Mr. Frans Hoorelbeke

Nationality:                    Belgium

 

Director                       Mr. David Swift

Nationality:                    U.S.A.

           

Auditor                                     Mr. Yoshiyuki Kaneda

Nationality:                    Japan

 

Auditor                        Mr. Ryu Yano

Nationality:                    Japan

 

Auditor                                     Mr. Shigeru Murakami

Nationality:                    Japan

 

Auditor                                     Mr. Kenji Fukunaga

Nationality:                    Japan

 

Note: The names of director(s) and auditor(s) are phonetically spelt.

 

*Key Personnel*

=============

Mr. Noriyuki Inoue

Representative director, chairman & CEO since June 2002

Born on March 17, 1935

Business career:

Mar. 1957: Employed by the subject.

Feb. 1981: Director.

Jun. 1994: President.

May 1995: Chairman.

Jun. 2014: Chairman & Representative for global group

 

Mr. Masanori Togawa

Representative director, president & CEO

Born on January 11, 1949

Business career:

Apr. 1973: Employed by the subject.

Jun. 2002: Director.

Jun. 2011: President & COO.

Jun. 2014: President & CEO

 

 

FINANCIALS

 

Currency: (local currency - Jp. yen)

-------------------------------------------------------------------------------------

 Year |         Sales            |       Net Income    

-------------------------------------------------------------------------------------

2009

1,202,419,000,000

21,755,000,000

2010

1,023,964,000,000

19,390,000,000

2011

1,160,330,000,000

19,872,000,000

2012

1,218,700,000,000

41,171,000,000

2013

1,290,903,000,000

43,584,000,000

2014

1,783,077,000,000

91,880,000,000

 

 

FINANCIAL DESCRIPTION

 

*Book Closing*

============

March 31st

 

*Financials*

=========

Consolidated Balance Sheet

 

 

 

Unit: millions of JP yen

 

 

 

                          

3/31/2012

3/31/2013

3/31/2014

Current Assets  

629,047

803,326

967,871

 Cash & deposits      

135,648

185,571

257,295

 Account receivables   

209,076

263,322

319,449

 Inventories          

243,598

285,167

316,655

 Others

40,725

69,266

74,472

Fixed assets           

531,516

932,510

1,044,659

 Tangible assets      

224,357

274,201

299,716

 Intangible assets    

180,486

510,888

545,756

 Investments & others  

126,673

147,421

199,185

Total Assets       

1,160,564

1,735,836

2,012,530

　

　

　

　

Current liabilities     

396,339

382,627

533,637

 Account payables  

110,108

127,364

162,084

 Short term loans    

90,448

65,334

43,325

 Bonds payable due

0

0

30,000

 Long term loans due   

57,289

4,125

65,885

 Outstanding expenses  

52,586

66,918

84,368

 Outstanding taxes    

9,835

14,693

17,428

 Others

76,073

104,193

130,547

Fixed liabilities      

248,303

717,212

654,544

 Long term loans & bonds     

238,108

633,033

550,475

 Retirement benefits    

2,015

3,960

9,975

 Others

8,180

80,219

94,094

Shareholders' equity    

576,280

599,948

678,616

 Paid up capital      

85,032

85,032

85,032

 Capital reserves      

82,977

83,016

83,549

 Retained earnings    

415,231

438,671

514,583

 Treasury stock        

-6,960

-6,722

-4,549

Valuation & adjustment 

-73,971

18,169

123,727

Minority Interest    

12,110

16,543

21,162

Warrants

1,500

1,355

841

Total Net Assets       

515,920

635,996

824,348

Total Liabilities & Net Assets     

1,160,564

1,735,836

2,012,530

 

 

 

 

 

 

 

 

 

Consolidated Income Statement

 

 

 

Unit : millions of JP yen

 

 

 

                          

3/31/2012

3/31/2013

3/31/2014

Sales          

1,218,700

1,290,903

1,783,077

Cost of goods sold      

846,799

902,856

1,216,216

Gross profit(loss)    

371,901

388,046

566,860

Sales/administrative expenses  

290,709

299,418

411,785

Operating profit(loss)    

81,192

88,627

155,075

Non operating income        

11,449

15,542

12,071

Non operating expenses       

10,886

10,024

13,038

Ordinary profit(loss)      

81,756

94,145

154,108

Special profits                

1,506

1,617

423

Special losses              

2,694

14,286

1,878

Pretax profit                

80,568

81,477

152,653

Taxes & adjustment           

35,948

34,336

55,404

Minority interest   

3,447

3,556

5,369

Net profit      

41,171

43,584

91,880

 

 

Latest Financials

 

On November 11, 2014, the subject released the following business results and forecast:

As of September 30, 2014 (2Q 2015 term)

Unit: millions of JPY

Year term 

Sales  

Operating profit

Ordinary profit 

Net profit

2Q 2014       

924,945

92,006

90,787

59,128

2Q 2015       

974,150

113,382

114,797

75,659

FY 2015(F)    

1,950,000

190,000

189,000

113,000

 

Current assets;

1,028,270

Fixed assets;

1,094,257

Total assets;

2,122,527

Current liabilities;

503,226

Fixed liabilities;

675,708

Shareholders’ equity;

747,558

  Retained earnings;

584,780

Total net assets;

943,593

Total liabilities and net assets;

2,122,527

 

 

Bank Details

 

Bank Name       Sumitomo Mitsui Baking Corporation

Branch              Head office business department

 

 

Bank Name       Resona Bank, Ltd.

Branch              Osaka business department

 

Bank Name       Bank of Tokyo-Mitsubishi UFJ, Ltd.

Branch              Osaka business department

 

 

Credit Opinion

 

The subject is a world's No. 1 manufacturer of air conditioners particularly for commercial use with over 80-year business history.

The company currently is enjoying almost of all business segments in most of major markets as well as favorable currency situation.

An all-time high performance was posted for Mar. 2014 term thanks to a great contribution of sales of air-conditioner utilizing the sales network of Goodman Corp. in U.S.A., as well as successful growth in Southeast Aisa.

Financial condition is sound enough.

Financial strength has been consistently enhanced.

Negative factors are not observed at present.

Our standard suggestion would be up to US$ 360 million on terms of 90 days.

 

 

LOCAL BRANCHES & MANAGEMENT

 

Branch name:                TOKYO BRANCH

Branch address:            2-18-1, Konan, Minato-ku Tokyo 1080075

Branch tel:                    03-6716-0112

----------------------------------------------------------------------------------------------------

Branch name:                TOKYO BRANCH - SOKA OFFICE

Branch address:            2-15-1, Matsue, Soka-shi, Saitama 3400013

Branch tel:                    048-935-2661

----------------------------------------------------------------------------------------------------

Branch name:                TOKYO BRANCH - NIHONBASHI T&D BLDG.

Branch address:            2F, 12-20, Nihonbashi-tomizawa-cho, Chuo-ku Tokyo 1030006

Branch tel:                    03-5643-0241

----------------------------------------------------------------------------------------------------

Branch name:                HEAD OFFICE - ESAKA BLDG

Branch address:            3-21-3, Tarumi-cho, Suita-shi, Osaka 5640062

Branch tel:                    06-6373-4312

----------------------------------------------------------------------------------------------------

 

 

PRODUCT, TECHNOLOGY, SERVICE DESCRIPTION

 

*Main Products & Services*

======================

Specializing in manufacture and sales of the following products worldwide:

For Mar. 2014 term:

1. Air conditioners and container refrigeration unit (89%).

2. Fluoro-carbon chemicals & oil hydraulics (8%)

3. Other machinery (3%)

 

Overseas business accounts for 71%

 

*Air Conditioning and Refrigerator Division

Room air conditioners

Room air cleaners

Commercial-use air conditioners

Commercial-use air cleaners

Large-scale refrigerators

Marine-type container refrigeration units

Container refrigeration

Marine vessel air conditioners and refrigerators

 

* Oil Hydraulics Division

Oil hydraulic products for industrial machinery

Oil hydraulic products for mobile equipment

Centralized lubrication units and systems

 

* Defense Systems Division

Ammunition

Aircraft components

Warheads for aerial torpedoes

 

* Chemical Division

Fluoropolymers

Synthesized products

Fluorocarbon gas

Equipment and systems

New Operations

Computer graphics systems

 

 

 

 

FACTORY FACILITIES & MANUFACTURING CAPABILITIES

 

*Domestic Plants*

==============

- Sakai Seisakusho/Kanaoka Plant

Sakai City, Osaka Prefecture 591-8511

 

- Yodogawa Seisakusho

Settsu City, Osaka Prefecture 566-8585

 

- Shiga Seisakusho

Kusatsu City, Shiga Prefecture 525-8526

 

- Kashima Seisakusho

Kamisu City, Ibaraki Prefecture 314-0255

 

 

ORGANIZATION STRUCTURE

 

*Address*

=========

Registered address is same as that of the operating head office.

 

 

*Company History*

================

Date                             Development

--------------------------------------------------------------------------------------------------------------------------

Oct 1924                                   Osaka Kinzoku Kogyosho Ltd. Partnership established, aiming at

                                    manufacture of the parts of airplane.

Feb 1934                                  Osaka Kinzoku Kogyosho Co., Ltd established to merge with the

above entity.

May 1949                      Listed on Osaka Stock Exchange.

Jun 1957                       Listed on Tokyo Stock Exchange.

Oct 1963                                   Changed the company name to the current "Daikin Industries,

Ltd."

Mar 1972                       "Daikin Europe N.V." established in Belgium.

Nov 1972                      Started establishing sales companies across the nation.

Feb 1990                                  "Daikin Industries(Thailand) Ltd." established.

Jan 1991                                   "Daikin America, Inc." established.

Nov 1995                      A joint venture established in Shanghai.

Aug 1996                      Another joint venture established in Xian, China.

 

 

Nov 1999                      Business tie up with Matsushita Electric Industrial Co., Ltd.

Apr 2001                                   A subsidiary established  in China.

Sep 2001                                  Production control center established in China.

Oct 2001                                   Sales joint venture established in Japan between the subject and

Zauer Danfoss, Inc., USA.

Nov 2001                      Agreed to set up a global strategic alliance with Trane Company, a

division      of American Standard Companies, Inc. for air conditioners

business.

Nov 2005                      "Daikin Holdings USA, Inc." established.

Jan 2007                                   Acquired 100% of the stakes of  OYL Industries Bhd., Malaysia.

Feb 2008                                  Liquidated OYL Industries Bhd. to directly own two subsidiaries

                                    subsequently.

Oct. 2008                      Daikin Europe N.V. acquired a company in Germany.

Feb. 2009                     Business tie-up with a Chinese corporation.

Jul. 2011                                   Daikin Europe N.V. acquired a company in Turkey.

Dec. 2011                     Founded "Daikin Air-condition(Suzhou) Co., Ltd." in China.

 

 

TRADE REFERENCES

 

*Suppliers*

=========

- Daikin Rexam Electronics Co., Ltd.

- Shimohira Electric Manufacturing Co., Ltd.

- Ryusho Industries, Ltd.

- Panasonic Corpo.

- Sumikeisho Co., ltd.

- Chofu Seisakusho Co., Ltd.

- Fuso Industries Co., Ltd.

- Chiyoda Air Conditioners Co., Ltd.

 

 

*Customers*

==========

- Daikin Air Conditioners Tokyo, Ltd.

- Daikin Europe N.V.

- Daikin Air conditioners Osaka, Ltd.

- Sumitomo Corporation

- Itochu Metals Corporation

- Daikin America, Inc.

- Defense Ministry of Japan

 

 

MAJOR SUBSIDIARIES, JOINT-VENTURES & AFFILIATES

 

Company name:            NIPPON MUKI CO., LTD.

Country:                        Japan

Status:                          Subsidiary  

----------------------------------------------------------------------------------------------------

Company name:            DAIKIN EUROPE N.V.

Country:                        Belgium

Status:                          Subsidiary  

----------------------------------------------------------------------------------------------------

Company name:            DAIKIN EUROPE COORDINATION CENTER N.V.

Country:                        Belgium

Status:                          Subsidiary  

-----------------       -----------------------------------------------------------------------------------

Company name:            XIAN DAIKIN QINGAN COMPRESSOR CO., LTD.

Country:                        China

Status:                          Subsidiary  

----------------------------------------------------------------------------------------------------

Company name:            DAIKIN AIRCONDITION(SHANGHAI) CO., LTD.

Country:                        China

Status:                          Subsidiary  

------------------      --          --------------------------------------------------------------------------------

Company name:            DAIKIN COMPRESSOR INDUSTRIES, LTD.

Country:                        Thailand

Status:                         Subsidiary   

----------------------------------------------------------------------------------------------------

Company name:            VIETNAM JOINT STOCK COMPANY

Country:                        Vietnam

Status:                         Subsidiary  

----------------------------------------------------------------------------------------------------

Company name:            DAIKIN (CHINA) INVESTMENT CO., LTD.

Country:                        China

Status:                         Subsidiary  

----------------------------------------------------------------------------------------------------

Company name:            DAIKIN AIRCONDITIONIN AMERICAS, INC.

Country:                        USA

Status:                                      Subsidiary  

----------------------------------------------------------------------------------------------------

Company name:            OYL MANUFACTURING COMPANY SDN. BHD.

Country:                        Malaysia

Status:                                      Subsidiary  

 

 

RELATED PARTIES DESCRIPTION

 

*Subsidiaries, Joint-ventures & Affiliates*

================================

As of March 31, 2014:

As the core company of Daikin Industries, Ltd., the subject owns and controls the following subsidiaries and affiliates worldwide:

 

Domestic

-------------

A total of 28 subsidiaries and three affiliates, engaged in manufacturing, sales and other type of businesses.

 

Overseas

--------------

A total 181 subsidiaries and six affiliates including manufacturing, sales, research and joint venture.

 

 

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.62.44

UK Pound

1

Rs.98.15

Euro

1

Rs.77.38

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

Report Prepared by :

MNL

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

Credit not recommended

--

NB

                                       New Business

 

--

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                  Payment record (10%)

Credit history (10%)                   Market trend (10%)                                Operational size (10%)

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.