New Subsidiary to be Established in China

NTN Corporation (NTN) has decided to establish a 95%-owned joint venture subsidiary in Shanghai, China with Okaya & Co., Ltd. (Okaya) for the production and sales of constant-velocity joint components and bearings.


Background and Aims of the Project

  In its business restructuring plan started this April, NTN announced that it will concentrate business resources in strategic products -- constant-velocity joints, axle units, and needle roller bearings. NTN will also advance operations in China for finished parts and components . In accordance with these plans, NTN has decided to establish this joint venture -- its first production base in China.
NTN aims to strengthen its presence in the steadily growing automotive market in China and to gain global competitiveness for its strategic products. With China positioned as an optimum production location, the joint venture is expected to become a supply base to export strategic products, partially-processed products, and their parts to other NTN production bases in Japan, America, Europe, and the rest of Asia. Approximately 90% of all production (including both finished products and parts, but primarily constant-velocity joint parts or “CVJ cassettes”) will be exported.


Future Plans

  Plans are to formally establish the unit in the middle of August. Investment of approximately JPY600 million will fund plant construction and production of CVJ cassettes, axle units, and needle roller bearings will commence in June 2003. It is anticipated that the sales will be approximately ¥400 million for the first year,2003,with a forecast of approximately ¥3 billion in 2005.
NTN is studying the possibility of initiating integrated manufacturing (from pre-processing to finished product) for ball bearings and tapered roller bearings as well.


Outline of the New Company

1) Name of the New Company: (Provisional name) Shanghai NTN Corporation
2) Business: Manufacture, processing, and sales of bearings, automobile parts, machine parts, and related parts such as CVJ cassettes, axle units, and needle roller bearings.
3) Authorized Capital: US$20 million (approximately JPY2.5 billion)
4) Capital Participation: 95% NTN, 5% Okaya & Co., Ltd.
5) Location: Songjiang District, Shanghai, People's Republic of China
6) Date of Establishment: Mid-August 2002 (planned)
7) Start of Operations: June 2003 (planned)
8) Site Size: About 250,000 square meters
9) Total Floor Area: In the first phase, a plant of 15,000 square meters and a administration building of 2,000 square meters (total: 17,000 square meters) will be constructed.
10) Investment Amount: $29.9 million (approximately JPY3.7 billion) with an estimated initial investment of approximately JPY2.2 billion.
11) Sales Plans: Approximately JPY400 million for the first year, with a forecast of JPY3 billion in 2005
12) Projected Employment: Initially about 100 persons; increasing to approximately 300 persons in 2005