RIX Corporation (TSE1: 7525) is a trading company that specializes in machinery-related products and also operates its own manufacturing division. After it was founded in October 1907, it started doing business with the former Imperial Steel Works (currently part of Nippon Steel, TSE1: 5401), and it has since operated as a specialist trading company that supplies a diverse range of machinery equipment, parts, and materials. The company has been profitable since it was established (posting only one half-yearly loss) and built up a strong financial position, effectively running a debt-free business. RIX has set up a manufacturing division through which it produces and sells products such as rotary joints (rotary devices that transfer various types of fluid media running through a stationary supply passage—such as a pipe—to a rotating outlet) under its own brand ROCKY.
The company manufactures its own products based on the following four proprietary core technologies (applicable products are shown in parentheses): (1) tribology* technologies (rotary joints and oil skimmers), (2) precision cleaning technologies (ball grid array [BGA] flux [soldering accelerator] cleaning systems and wafer bump flux cleaning systems), (3) high-pressure hydraulic technologies (IC lead frame resin deburring systems), and (4) atomization technologies (G-smasher [supersonic wet atomizer] and Micro Ice Jet [localized precision cleaning equipment that projects micro ice particles]). These are all underpinned by (thermal) fluid control technologies, which involve ascertaining the movement and thermal phenomena of fluid media such as water, oil, mist, chips, and slurry.
* Tribology is the science and technology of all phenomena occurring as a result of two surfaces interacting in relative motion, including fields such as lubrication, friction, wear, overheating, and bearing design. It is used to reduce friction, wear, and surface damage in machinery and parts.
In FY03/21, the company reported revenue of JPY36.0bn (-16.7% YoY) and operating profit of JPY1.8bn (-30.7% YoY; OPM of 5.0%). It generated 68.4% of revenue from its Steel Industry, Automotive Industry, and Electronics & Semiconductor Industry segments, and the remainder from its Rubber & Tire Industry, High-Performance Materials Industry, Environmental Industry, Paper & Pulp Industry, and Food Industry segments. RIX broadly supplies products to all domestic industries with a focus on large heavy industry companies. It has secured leading companies in each of these industries as customers, and conducted business with such companies for many years. For example, Nippon Steel—a customer the company has transacted with since its founding—remains its largest customer today, accounting for roughly 14% of annual revenue. RIX has set up 10 overseas bases (seven sales companies and three manufacturing companies) to respond to the needs of customer companies that have relocated their production sites overseas. In FY03/21 it derived 11.5% of its revenue from overseas operations.
RIX supplies products in some 3,000 categories, amounting to tens of thousands of product items. Prices range from hundreds to millions of JPY (mainly plant-related facilities). Lead times vary from same-day shipping to one year at the longest (mainly plant-related facilities), with the average being several months. The company accommodates various orders ranging from single products to product lots. It divides its product lineup into “basic products and consumables” and “custom-made products,” and its revenue is distributed fairly evenly across both categories. Basic products are standard parts, while consumables are parts that wear out in proportion to their usage in production, and thus generate periodic replacement demand. Basic products and consumables bring in stable revenue and do not require sales-related spending, but they are often sold at low prices. Consumables do not have higher margins than custom-made products sold by RIX’s sales representatives, but basic products often do.
In FY03/21, merchandise (i.e., traded products) made up 89.6% of revenue and 78% of operating profit, and finished goods (i.e., manufactured products) made up 10.4% of revenue and 22% of operating profit. The companywide OPM was 5.0%, breaking down into 4.5% for merchandise and roughly 10% for finished goods. Segment operating profit reflects profit from sales operations, and profit from manufacturing operations is included as internal profit under adjustments (unallocable companywide expenses).
Finished goods are classified into internally manufactured products and products manufactured by domestic partners (ROCKY-brand). Merchandise are divided into domestic and imported products. The company uses the term “original products” to refer to (1) internally manufactured products, (2) ROCKY-brand products, and (3) private-brand products for which it is the exclusive supplier. Put differently, original products encompass merchandise, finished goods, and services—or a combination of these—that are only supplied by RIX. Original products command higher margins, and the company aims to increase these products as a percentage of revenue from 29% in FY03/21 to at least 40% over the medium term (by FY03/24) and further to 55% over the long term (by FY03/31).
The company faces competition in each of its segments and product categories. In the Steel Industry segment, it competes with steelmaker-affiliated trading companies, but it has used its independent position (as a trading company specializing in machinery-related products) to conduct business with all major steelmakers, starting with Nippon Steel. In the Machine Tool Industry, High-performance Materials Industry, and Environmental Industry segments, RIX competes with Todoroki Sangyo (unlisted). While it generates lower revenue than large machinery trading companies, its OPM of 5.0% in FY03/21 exceeded the 1–4% recent average for the leading machinery trading companies, lagging only behind the 8.9% for Misumi Group (TSE1: 9962), which derives 54.4% of its revenue from its manufacturing operations.
In FY03/22, the company reported revenue of JPY40.0bn (+11.0% YoY), operating profit of JPY2.6bn (+44.5% YoY), recurring profit of JPY3.0bn (+42.8% YoY), and net income of JPY2.1bn (+50.3% YoY). EPS was JPY251.1. All segments, including Steel Industry and Electronics & Semiconductor Industry, reported revenue growth. The adoption of the Accounting Standard for Revenue Recognition had a negative impact of JPY893mn on revenue. The company plans to pay a year-end dividend of JPY40.0 per share, bringing the annual dividend to JPY65.0 per share (JPY45.0 per share in FY03/21). Based on the company plan, the payout ratio is expected to be 25.9% (26.9% in FY03/21).
For FY03/23, the company forecasts revenue of JPY43.9bn (+9.8% YoY), operating profit of JPY3.0bn (+14.3% YoY), recurring profit of JPY3.1bn (+3.8% YoY), and net income of JPY2.1bn (+2.3% YoY). The estimated EPS is JPY257.0. The company expects revenue and all profit categories to reach record highs. Given this earnings growth, the company announced a change in its dividend policy to a consolidated payout ratio of 40%. The annual dividend forecast is JPY100.0/share (JPY65.0/share in FY03/22). Based on the company's forecast, the payout ratio will be 38.9% (25.9% in FY03/22).
The medium-term business plan “GP2023: RIX Growth Plan” calls for FY03/24 revenue of JPY50.0bn (existing segments and business fields: JPY45.0bn, growth fields: JPY5.0bn; overseas revenue of JPY7.0bn, overseas revenue share of 14%), operating profit of JPY3.4bn (OPM of 6.8%), recurring profit of JPY3.5bn, ROE of 10% or higher, and a revenue share of original products of 40% or higher.
RIX has also released the long-term business plan “Long term Vision for 2030 (LV2030)” that targets FY03/31 revenue of JPY70.0bn (existing segments and business fields: JPY60.0bn, growth fields: JPY10.0bn; overseas revenue of JPY14.0bn, overseas revenue share of 20.0%), operating profit of JPY5.6bn (OPM of 8.0% or higher), ROE of 11% or higher, and a share of original products of 55%.
Shared Research thinks RIX has the following strengths.
Ability to develop sustainable relationships with customers over the long term by providing multifaceted support for all their product manufacturing processes, not only as a trading company but also as a manufacturer.
Earnings contributions from original products (i.e., internally manufactured products, ROCKY-brand products, and private-brand products) that rely on proprietary core technologies to control fluid media such as water, oil, mist, chips, and slurry.
Ability to internally share and take advantage of over 400,000 customer and product data points accumulated by offering a broad product range that spans all domestic industries (but is geared particularly toward large heavy industry companies), and by having secured leading companies in each industry as customers.
We see its weaknesses as follows.
As a regional specialist trading company headquartered in Fukuoka Prefecture, the company’s domestic operations remain skewed toward western Japan, resulting in a limited presence in areas along the Sea of Japan, Hokuriku, and Tohoku, which have attracted semiconductor and electronic parts manufacturers.
Focus on demands of existing customers has led to a reactive stance on overseas expansion, delaying proactive and independent efforts to cultivate new customers overseas.
Cautious management style—cultivated over 57 years of operation as a privately-owned business—has become embedded in the corporate DNA of the company, and may slow autonomous growth following its listing.
|Gross profit margin||20.0%||19.9%||21.4%||21.5%||22.0%||22.4%||21.5%||22.7%||24.1%|
|Operating profit margin||4.2%||4.4%||5.3%||5.0%||6.0%||6.8%||6.0%||5.0%||6.5%||6.7%|
|Recurring profit margin||4.9%||5.0%||5.7%||5.3%||6.4%||7.2%||6.3%||5.8%||7.5%||7.1%|
|Per-share data (split-adjusted; JPY)|
|Shares issued at year-end ('000 shares)||8,640||8,640||8,640||8,640||8,640||8,640||8,640||8,640||8,640|
|EPS (fully diluted; JPY)||-||-||-||-||-||-||-||-||-|
|Dividend per share (JPY)||23.0||30.0||30.0||34.0||50.0||65.0||60.0||45.0||65.0||100.0|
|Book value per share (JPY)||1,157||1,289||1,334||1,461||1,703||1,856||1,972||2,146||2,343|
|Balance sheet (JPYmn)|
|Cash and cash equivalents||2,297||2,689||3,203||3,736||3,943||4,864||6,506||7,690||9,104|
|Total current assets||15,671||15,833||17,664||18,810||21,495||23,486||24,102||23,390||27,184|
|Tangible fixed assets||1,921||1,985||2,711||3,054||2,926||3,097||3,019||2,975||3,050|
|Investments and other assets||3,925||4,689||3,310||3,596||3,899||3,585||3,070||3,677||3,789|
|Total current liabilities||10,339||10,015||10,944||11,540||12,992||13,548||12,600||10,911||13,257|
|Total fixed liabilities||1,044||1,149||1,417||1,477||1,327||1,351||1,309||1,395||1,430|
|Total net assets||10,214||11,419||11,435||12,559||14,136||15,388||16,417||17,873||19,500|
|Total interest-bearing debt||1,395||1,650||2,540||2,094||1,993||2,056||2,098||1,832||1,807|
|Cash flow statement (JPYmn)|
|Cash flows from operating activities||1,239||99||797||1,746||895||1,839||2,286||2,146||2,310|
|Cash flows from investing activities||-683||217||-819||-478||-234||-471||-275||-466||-765|
|Cash flows from financing activities||-1,169||22||302||-707||-471||-422||-551||-649||-497|
|Total asset turnover||140.5%||142.7%||144.1%||136.8%||142.2%||143.5%||142.7%||119.1%||124.2%|
|Capital expenditures, etc.||Cons.||Cons.||Cons.||Cons.||Cons.||Cons.||Cons.||Cons.||Cons.|
|% of revenue from finished goods||4.2%||4.2%||4.1%||3.7%||3.1%||2.7%||2.9%||4.0%|
|Number of employees||533||513||555||584||578||632||645||668|
|Revenue per employee (JPYmn)||98.0||99.9||109.1||101.7||112.0||122.1||114.7||94.8|
|Operating profit per employee (JPYmn)||2.4||2.6||3.3||2.9||3.9||4.7||4.0||2.7|
|Number of employees||332||345||355||364||367||393||412||430|
|Average years of service||12.1||12.4||12.7||12.5||12.7||12.5||12.5||12.7|
|Average annual salary (JPY'000)||5,935||6,182||6,456||6,291||6,676||6,964||6,770||5,964|
RIX Corporation announced revisions to its full-year earnings and dividend forecasts for FY03/22.
The company revised its FY03/22 forecast upward and announced an increase in its year-end dividend. The operating profit forecast was revised up by JPY220mn (from JPY2.4bn to JPY2.6bn) as revenue exceeded the previous forecast. In addition, due to the recording of foreign exchange gains from the weaker yen, the forecast for recurring profit was revised up by JPY380mn (from JPY2.6bn to JPY3.0bn). The forecast for net income attributable to owners of the parent was revised up by JPY280mn (from JPY1.8bn to JPY2.1bn).
As a result, the forecast for EPS was changed to JPY252.1 (previously JPY217.9), and the company has decided to raise its year-end dividend forecast to JPY40.0 per share (previously JPY30.0 per share). With the increase in the year-end dividend, the annual dividend is expected to total JPY65.0 per share (JPY55.0 per share in FY03/21), for a payout ratio of 25.8% (Shared Research estimate; 25.2% in FY03/21).
The company plans to announce its earnings on May 16.
|(JPYmn)||Q1||Q1–Q2||Q1–Q3||Q1–Q4||Q1||Q1–Q2||Q1–Q3||Q1–Q4||% of Est.||FY Est.|
|Gross profit margin||21.7%||21.9%||22.4%||22.7%||23.9%||23.9%||23.8%||24.1%|
|Operating profit margin||3.2%||3.9%||4.4%||5.0%||4.8%||5.9%||6.1%||6.5%||6.5%|
|Recurring profit margin||3.7%||4.3%||4.9%||5.8%||5.7%||6.9%||7.1%||7.5%||7.5%|
|Gross profit margin||21.7%||22.0%||23.4%||23.6%||23.9%||23.8%||23.7%||24.8%|
|Operating profit margin||3.2%||4.5%||5.5%||6.4%||4.8%||6.9%||6.5%||7.4%|
|Recurring profit margin||3.7%||4.9%||6.0%||8.3%||5.7%||8.0%||7.4%||8.6%|
Revenue in the Automotive Industry segment tends to be skewed toward Q4.
|Electronics & Semiconductor Industry||1,035||2,126||3,229||4,583||1,314||2,736||4,247||5,841|
|Rubber & Tire Industry||592||1,061||1,596||2,049||595||1,340||2,062||2,674|
|Machine Tools Industry (former Automotive)||304||538||869||-||413||909||1,378||1,875|
|High-performance Materials Industry||378||893||1,228||1,728||372||822||1,267||1,738|
|Paper & Pulp Industry||186||374||575||738||238||422||679||864|
|Electronics & Semiconductor Industry||55||127||209||304||73||187||294||384|
|Rubber & Tire Industry||26||40||76||101||16||62||117||162|
|Machine Tools Industry (former Automotive)||15||32||58||-||41||92||152||202|
|High-performance Materials Industry||32||87||120||167||20||77||113||157|
|Paper & Pulp Industry||24||47||72||79||19||38||60||83|
|Electronics & Semiconductor Industry||1,035||1,091||1,104||1,354||1,314||1,421||1,511||1,593|
|Rubber & Tire Industry||592||469||535||454||595||745||722||612|
|Machine Tools Industry (former Automotive)||304||234||331||-||413||496||469||496|
|High-performance Materials Industry||378||514||335||500||372||451||444||471|
|Paper & Pulp Industry||186||188||201||163||238||184||257||185|
|Electronics & Semiconductor Industry||55||72||82||94||73||114||107||90|
|Rubber & Tire Industry||26||15||35||25||16||46||54||45|
|Machine Tools Industry (former Automotive)||15||17||26||-||41||51||60||50|
|High-performance Materials Industry||32||54||33||47||20||56||37||44|
|Paper & Pulp Industry||24||23||25||7||19||19||22||23|
The results for FY03/22 were as follows.
EPS was JPY251.1. The company plans to pay a year-end dividend of JPY40.0 yen per share, bringing the annual dividend to JPY65.0 per share (JPY45.0 yen per share in FY03/21). Based on the company plan, the payout ratio is expected to be 25.9% (26.9% in FY03/21).
Both revenue and profits increased, surpassing previous company forecasts. The company announced an upward revision to its earnings and dividend forecasts on April 26, and the above previous forecasts are made prior to that. Revenue increased in all segments, including Electronics & Semiconductor Industry, Steel Industry, and Machine Tools Industry, and segment operating profit also rose in all segments except High-Performance Materials Industry.
The application of the Accounting Standard for Revenue Recognition negatively impacted revenue by JPY893mn (the impact on profit was negligible). For this reason, the company has not included the percentage change in revenue in its earnings report. Shared Research calculated the percentage change as it is.
The results for the most recent Q4 (January–March 2022) were as follows.
Revenue and operating profit were both up YoY for the fourth consecutive quarter.
Shared Research will update details following the earnings presentation scheduled at a later date and interviews with the company.
|(JPYmn)||1H Act.||2H Act.||FY Act.||1H Act.||2H Act.||FY Act.||1H Est.||2H Est.||FY Est.|
|Cost of revenue||13,498||14,340||27,838||14,609||15,744||30,354|
|Gross profit margin||21.9%||23.5%||22.7%||23.9%||24.2%||24.1%|
|Operating profit margin||3.9%||6.0%||5.0%||5.9%||6.9%||6.5%||6.6%||6.8%||6.7%|
|Recurring profit margin||4.3%||7.2%||5.8%||6.9%||8.0%||7.5%||7.1%||7.0%||7.1%|
The company announced its FY03/23 forecast. The details are as follows.
Estimated EPS is 257.0 yen. The annual dividend forecast is JPY100.0 per share (JPY65.0 per share in FY03/22). Based on the company's forecast, the payout ratio will be 38.9% (25.9% in FY03/22).
The company expects both revenue and profits to rise, and plans to achieve record-high revenue and profits at all levels. The record highs are JPY43.2bn (FY03/20) for revenue, JPY2.9bn (FY03/19) for operating profit, JPY3.0bn (FY03/19) for recurring profit, and JPY2.1bn (FY03/19) for net income. However, the company's plan for OPM is below the record high of 6.8% recorded in FY03/19.
Shared Research will update details following the earnings presentation scheduled at a later date and interviews with the company.
|Results vs. Initial Est.||FY03/14||FY03/15||FY03/16||FY03/17||FY03/18||FY03/19||FY03/20||FY03/21||FY03/22||FY03/23|
|Revenue (Initial Est.)||29,000||30,200||34,100||35,700||35,800||39,600||41,800||-||38,600||43,900|
|Results vs. Initial Est.||0.9%||4.4%||-2.0%||-5.4%||7.3%||6.4%||3.5%||-||3.5%|
|Operating profit (Initial Est.)||1,210||1,230||1,490||1,730||1,900||2,400||2,700||-||2,260||2,950|
|Operating profit (Results)||1,229||1,376||1,776||1,677||2,288||2,862||2,577||1,786||2,580|
|Results vs. Initial Est.||1.6%||11.9%||19.2%||-3.1%||20.4%||19.2%||-4.5%||-||14.2%|
|Recurring profit (Initial Est.)||1,310||1,340||1,640||1,910||2,000||2,570||2,850||-||2,350||3,100|
|Recurring profit (Results)||1,444||1,562||1,916||1,783||2,453||3,017||2,720||2,091||2,986|
|Results vs. Initial Est.||10.3%||16.6%||16.8%||-6.7%||22.7%||17.4%||-4.5%||-||27.1%|
|Net income (Initial Est.)||750||730||950||1,180||1,220||1,700||1,950||-||1,550||2,100|
|Net income (Results)||789||780||1,127||1,088||1,687||2,116||1,827||1,365||2,052|
|Results vs. Initial Est.||5.2%||6.8%||18.6%||-7.8%||38.2%||24.5%||-6.3%||-||32.4%|
From FY03/12 to FY03/20, revenue finished above the forecast in six years and operating profit in seven years (the only year in which revenue and profit both missed the forecast was FY03/17). This suggests RIX’s forecasts tend to be largely conservative. From FY03/13 to FY03/16, revenue fell short of target but profit exceeded the forecast, which highlights the company’s ability to adjust costs. In contrast, in FY03/20, revenue exceeded the forecast, while profit fell short. However, Shared Research infers this was mainly attributable to the effects of the COVID-19 pandemic.
|Existing segments and business fields||36,023||45,000||60,000||23,977||5.2%|
|% of revenue||100.0%||90.0%||85.7%|
|% of revenue||0.0%||10.0%||14.3%|
|% of revenue||29.0%||40.0%||55.0%|
|% of revenue||71.0%||60.0%||45.0%|
|% of revenue||88.5%||86.0%||80.0%|
|% of revenue||11.5%||14.0%||20.0%|
|Operating profit margin||5.0%||6.1%||6.2%||6.8%||7.2%||8.0%|
|Recurring profit margin||5.8%||6.7%||6.4%||7.0%|
Expand existing segments and business fields (strengthen and deepen customer development and production operations as a multi-function manufacturing and trading company*1)
Customer manufacturing process, comprising all aspects from planning, development, and production technology to on-site operations/facilities, maintenance, recycling and disposal
Current focus: On-site operations/facilities and maintenance. Expand to include upstream and downstream operations (the GP2023 plan calls for expansion of business fields centered on development and production technologies)
Cultivate growth fields (JPY5.0bn)
Keywords related to customers are: CASE (acronym for “connected” cars, “autonomous/automated” driving, “shared,” and “electric”), pharmaceuticals, cosmetics, construction, shipbuilding, government sector, and environment; keywords related to development are: water resources, water treatment, decarbonization, renewable energy, and sustainable development goals (SDG)
Promote development in line with environmental, social, and governance (ESG) and SDG initiatives, including via products geared toward government agencies and disaster prevention products, by utilizing proprietary fluid control technologies.
Cultivate new customers in fields such as the electrification of vehicles, renewable energy, pharmaceuticals and cosmetics, and construction machinery, and strengthen development of new products (both finished goods and merchandise) and new services by utilizing fluid control technologies.
Step up overseas expansion (JPY7.0bn; strengthening operations in North America, China, and India)
The GP2023 plan calls for reinforcing infrastructure in China and the US (expanding and enhancing functions), developing bases of existing subsidiaries and strengthening foundations, manufacturing and selling, collaborative creation with local partners, and realizing synergies.
Increase efficiency of business activities (promote digital transformation [DX: the adoption of digital technologies to enhance operational efficiency])
Achieve share of original products*2 of 40% or higher (development of new products)
Improve life-work balance
Instill and train personnel that can implement RIXing Action*³
Build organization that supports collaborative creation*4, both internally and externally
Promote “creating shared value (CSV)” activities (contribute to society through RIX’s businesses)
Revitalize communication with stakeholders
*¹ Multi-function manufacturing and trading company: a trading company that not only sells products to customers but also provides support for all their manufacturing processes (including planning, development, production technology, manufacturing settings, maintenance, and disposal) through functions such as prototyping and development support, maintenance, installation, recycling, disposal, and operation.
*² Original products: Merchandise, finished goods, and services that are supplied exclusively by RIX, or a combination of these.
*³ RIXing Action: An umbrella term used by the company to refer to its management philosophy, code of conduct, corporate culture, history, and business model, which have been passed on over many generations since the company’s founding.
*⁴ Collaborative creation: The creation of solutions through collaboration, both internally and with customers, suppliers, universities, venture firms, and government institutions.
Continue to deepen and explore relationships with existing customers, and strengthen versatility (fuse analog and digital solutions).
Expand contributions to customers (development, production technology, on-site operations/facilities, maintenance, recycling/disposal).
Consistently identify growth fields and cultivate new customers without being fixated on the existing customer base and existing segments and products.
Swiftly adapt to changes in growth fields by increasing the development speed for finished goods, merchandise, and services.
Develop bases (in close collaboration with customers) mainly in countries where the company already has a presence (China, Thailand, South Korea, Germany, the US, Indonesia, and India).
Secure local sales partners and manufacturer capabilities (through business alliances and M&A).
Develop merchandise and internally manufactured products that can be sold exclusively overseas (promote collaborative creation).
RIX traces its roots back to Yamada Shoten, a sales agent for Shimaya Tabi Honpo—which later founded Japan Rubber (currently Asahi Shoes) and the current Bridgestone (TSE1: 5108)—established in October 1907. Yamada Shoten initially sold rubber-soled sock-like shoes (jika-tabi) to the former Imperial Steel Works. To address various existing problems in the steel sector and related requests, the company later became a supplier of oil seals* and other parts and types of equipment. In May 1964, the year in which Tokyo hosted the Olympics, Yamada Shoten incorporated as Yamada Trading, and began operating as a machinery trading company in name and substance.
* Oil seals: Ring-shaped rubber products that prevent leakage of lubricants, water, chemical solutions, or gas from machinery, and concurrently function as a barrier to keep out external dust or soil.
The company has operated in the black since its founding (posting only one half-yearly loss), which is a testament to its sound management. It has built up a strong financial position and effectively runs a debt-free business. Shimaya Tabi Honpo, which was founded around the same time as the company (and incorporated as Nihon Tabi in June 1918) established Bridgestone Tire in March 1931, which subsequently achieved rapid growth as a specialty manufacturer of automotive tires.
As its business expanded, RIX set up a manufacturing unit and started producing and selling rotary joints and other products under its own ROCKY brand, combining trading and manufacturing functions. The company has established 10 overseas bases (seven sales companies and three manufacturing companies; overseas revenue share of 11.5%) to respond to the needs of Japanese customer companies that have relocated their production sites overseas.
In addition to selling products, RIX provides support for all manufacturing processes of its customers (including planning, development, production technology, manufacturing settings, maintenance, and disposal) through functions such as prototyping and development support, maintenance, installation, recycling, disposal, and operation. It regards itself as a multi-function manufacturer and trading company capable of addressing the diverse needs of manufacturing customers.
RIX is a customer-oriented manufacturer and trading company that supplies production goods such as equipment, parts, and consumables used in the production lines of large manufacturers. By maintaining close ties with such companies, it can more easily obtain information about their problems and needs, and provide solutions globally by either manufacturing them in-house or procuring them from its suppliers. It can also create various solutions by collaborating on products with suppliers or by proposing systemization. In short, its strength as a customer-oriented manufacture and trading company lies in its high-level problem-solving capabilities.
RIX supplies products in some 3,000 categories, resulting in tens of thousands of product items. In FY03/21, merchandise (i.e., traded products) accounted for 89.6% of revenue, and finished goods (i.e., manufactured products) for 10.4%. Prices range from hundreds to millions JPY (mainly plant-related facilities). Lead times vary from same-day shipping to one year at the longest (mainly plant-related facilities), with the average being several months. The company can accommodate various orders ranging from single product to product lots. In 2003, it developed and launched the internal information sharing system Monju, thereby establishing a system under which all employees can access and utilize over 400,000 customer and product data points.
RIX divides its product lineup into “basic products and consumables” and “custom-made products,” and its revenue is distributed fairly evenly across both categories. Basic products are standard parts. Consumables are parts that wear out in proportion to their use in production, and thus generate periodic replacement demand. Basic products and consumables bring in stable revenue and do not require sales-related spending, but they are often set at low prices. Consumables do not have higher margins than custom-made products sold by RIX’s sales representatives, but basic products often do.
Finished goods correspond to internally manufactured products and products manufactured by domestic partners (ROCKY-brand). Merchandise are divided into domestic products and imported products. The company uses the term “original products” to refer to (1) internally manufactured products, (2) ROCKY-brand products, and (3) private-brand products for which it is the exclusive supplier. Put differently, original products encompass merchandise, finished goods, and services that are only supplied by RIX, or a combination of these. Original products command relatively high margins, and the company aims to increase the revenue share of original products from 29% in FY03/21 to 40% or higher over the medium term (by FY03/24) and further to 55% over the long term (by FY03/31).
RIX supplies the following five categories of core products (finished goods and merchandise bringing in roughly one-third of revenue), with a focus on original products.
Products manufactured by RIX include rotary joints, precision cleaning systems, and hydraulic pumps. Products branded by the company include ROCKY valves (ROCKY-ICHIMARU) and ROCKY Washers (cleaning devices manufactured by Arimitsu Industry).
RIX generates pump revenue from a wide range of pump products such as plunger pumps, high-pressure hydraulic pumps, centrifugal pumps, submersible pumps, vacuum pumps, corrosion-resistant pumps, and hydraulic pumps. It is the second-largest distributor of Grundfos pumps (centrifugal pumps, etc.) in Japan, behind Todoroki Sangyo (unlisted).
In oil seals, RIX has conducted business with NOK (TSE1: 7240) since the latter was still operating under the name Japan Bearing Production. As of end-September 2021, NOK was also the largest shareholder of the company (stake of 14.27%). In mechanical seals, RIX’s subsidiary XNOS supplies specialized O-rings for semiconductor production equipment as a distributor for NOK-affiliated Eagle Industry (TSE1: 6486).
Semi-core products (finished goods and merchandise bringing in annual revenue of less than JPY1.0bn) include film and filter products (manufactured by Pall and others) and inverters (manufactured by Danfoss and distributed exclusively by RIX in Japan). Further down the line are other groups of manufactured and merchandise that generate annual revenue of JPY500–600mn or JPY100mn.
Rotary joints are rotary mechanisms that transfer various types of fluid media running through a stationary supply passage (such as a pipe) to a rotating outlet. They consist of a shaft that rotates with a revolving part (drum or roll), and a housing unit that connects to the joint of a stationary pipe. Rotary joints contain bearings, rotating seals, and other internal parts. By connecting stationary pipes and rotating devices, they prevent pipe twisting or other forms of damage.
The rotary joints manufactured by the company are mainly used in machine tools, general machinery, semiconductor production equipment (SPE), and as multi-passage (multi-port) rotary joints.
Bearlingless type: Used for spindle-through applications. Supports multiple liquid media such as dry air, coolants, and oil mist. Uses a “heat shrink fit” seal type to prevent seal separation caused by the chemical impact of the coolant.
Built-in bearing type: Contains lathe chuck bearings. Uses a grease-sealed structure, removing the need to supply oil air lubrication even if the liquid medium is air.
Pure water/chemical solution supply type (single-port): Uses non-metal material for the main circuit, reducing the release of metal ions into the liquid medium to the extent possible.
Chemical Mechanical Polishing (CMP) and grinder type (multi-port): Uses non-metal material and coating for the wetted part, enabling its use in structures where the release of ions into the liquid medium must be reduced to the extent possible.
High heat resistance: Uses packing seals with high heat tolerance for the wetted part, and bearings for high-temperature environments coated in high-temperature grease.
Easy maintenance: Uses seal-type bearings for high-temperature environments, removing the need to periodically supply grease. The mechanical seal part can be replaced separately.
Exhibits high environmental resistance to water. Developed mainly for the rubber & tire industry.
Easy maintenance: High environmental resistance. Maintenance-free because unlubricated.
Long lifespan: Uses corrosion-resistant stainless steel materials and copper alloy for core parts of the product. The spring is contactless and therefore resistant to foreign matter in fluid media and to water scale.
Mainly developed for continuous casting machines in the steel industry. The product is made of corrosion-resistant materials such as stainless steel and copper alloy. As a result, it rarely needs to be replaced and can be maintained in-house.
These are custom-made rotary joints that are manufactured in line with various customer specifications such as the number of ports and diameter, in addition to pressure, rotation speed, temperature, and fluid media requirements.
Machine tool rotary joint (bearingless type)
Machine tool rotary joint (built-in bearing type)
SPE rotary joint
High-performance film rotary joint
Tire and rubber industry rotary joint
Steel industry rotary joint
Multi-port rotary joint
Oil skimmers are devices that remove unwanted (tramp) oil (such as lubrication or hydraulic oil) from water-soluble coolant in machine tools (such as cutting machines, machining centers, and lathes). Removing the oil prevents the decay of water-soluble coolants, thereby extending the lifespan of the cooling lubricant and the cutting tools.
Oil skimmers use a rotating shaft to push high-viscosity floating tramp oil to the surface alongside a rotating screw or stationary spiral. Because water-soluble coolant has low viscosity, it flows to the bottom, separating from the tramp oil during the skimming process. At the same time, contaminants (such as chips or sludge) are diverted externally.
Conventional belt-type and disc-type oil skimmers generally require a density difference separation tank, but RIX’s oil skimmers feature a patented structure that facilitates efficient removal of tramp oil without such a tank. They also minimize the volume of actual coolant that is taken out, reducing disposal costs. They have a roughly 40% smaller installation footprint than general belt-type and disc-type oil skimmers, and contribute to lower maintenance hours and power consumption.
This cleaning equipment features a single-wafer transport system, and cleans flux (soldering accelerator) from wafer bumps. It reliably removes flux and foreign matter from the wafer surface using a spin jet system. The latter is a cleaning system that rapidly and reliably removes additives such as flux, micro solder balls, or thickeners by applying a jet stream of cleaning and rinse liquid to the bumped side of a spinning wafer (held only at the outer periphery) and the reverse side.
With submerged jets, a boundary layer is inevitably created on the wafer, causing balls or micro solder balls with a diameter of only 0.12mm to enter the stagnant liquid. In such a case, increasing jet pressure is problematic because this results in physical pressure being applied to the wafer surface, thus making it impossible to remove insoluble matter and micro solder balls in the flux. In addition, foreign matter may re-attach to the wafer when the latter is lifted out of the liquid, which is a concern.
This is a conveyor single-wafer processing type flux cleaning system with inline support for packaging technologies ranging from ball grid array (BGA) to chip size/scale package (CSP). It has the following characteristics.
Water-soluble flux cleaning through low-pressure spray method
Reduces running costs through pure water recycling system
Optimized for inline-type packages due to ability to continuously insert workpieces
This equipment reliably transports IC lead frames on a conveyor belt using a transport system that grips the thin frames between top and bottom rollers. By using a conveyor belt, frames of different dimensions can be deburred without any changes in setup. The key characteristic of this equipment is the proprietary HY-type oscillating nozzle. With ordinary fan-shaped nozzles, pressure tends to be strong in the middle and weak around the edges, making it impossible to deburr with uniform pressure. In contrast, HY-type oscillating nozzles apply uniform pressure to the entire cleaning area during the deburring process, resulting in stable deburring quality.
This cleaning equipment achieves precision cleaning of localized areas by firing micro ice particles. It has the same cleaning capacity of dry ice blasting cleaning equipment, but reduces the running costs and environmental load. In addition, it removes the risk of stalling, resulting in safe operation. It can be used to clean surfaces that require micron-level precision, which cannot be achieved with two-fluid nozzles, or delicate surfaces that could be damaged if cleaned with a PVC brush.
Compressed air reaches sonic speed in the throat of the nozzle. When it accelerates to supersonic speed in the diverging part of the nozzle, it expands adiabatically, resulting in a temperature drop. The supplied water droplets accelerate and cool down, turn into micro ice particles and supercooled water droplets, and are fired at supersonic speed. Micro ice particles are formed out of air and water only, removing the need for ice-making machines or liquid nitrogen. The stable size of the micro ice particles also prevents ice jams. In this way, foreign matter can be removed from cleaning surfaces without inflicting damage.
Wafer flux cleaning equipment
Substrate flux cleaning equipment
Water jet resin deburring equipment
Hydraulic pumps are pneumatically driven booster pumps. They can be used to circulate coolant, water, or kerosene. They can be deployed in explosion-prone areas as they do not require a power source. They are driven by compressed air with adjustable air pressure, and hold pressure for a long time without raising the temperature of the liquid medium. Due to their reciprocating, continuous discharge mechanism and automatic suction system, they can be used to circulate ordinary tap water, kerosene, diesel oil, or heavy oil. They do not require maintenance.
Hydraulic pump operating principle
G-smasher can pulverize materials with extremely soft primary particles such as ductile metals (e.g., silver, copper, and nickel).
It is capable of achieving nano-level pulverization of soft materials that would suffer particle surface damage if treated with traditional dispersion methods. Examples of materials that can be pulverized and processed with this equipment are bismuth particles, ceramics AI203 particles, textile materials, organic matter (formulation particles), and Hastelloy (nickel-based alloy) particles.
RIX has jointly developed a three-fluid nozzle that fires microdroplets at supersonic speed with Fukuoka Industrial Technology Center. It has utilized this technology to commercialize G-smasher, a supersonic wet atomizer that can crush and pulverize solid particles in slurry, dispersively mix, and emulsify particles of numerous sizes. The company has analyzed crushing and pulverization mechanisms in collaboration with Kumamoto University. G-smasher reduces slurry to droplets of roughly 13μm (Sauter mean diameter [or average particle size]), and fires these against a collision plate at supersonic speed to crush, pulverize, dispersively mix, or emulsify the particles within the droplet. It uses atomization technology to create a supersonic droplet collision dispersion process. RIX has secured a patent for its proprietary atomization technology, which combines the strengths of traditional wet and air jet mills. The new nano-atomization technology incorporated in G-smasher offers the following advantages.
No contamination: Extremely low probability of contamination as the equipment does not use a liquid medium or high-pressure seals (i.e., no wear and tear).
Little damage: The application of a strong shockwave to the droplets for a short duration results in little damage to the particles.
Strong pulverization: Enables pulverization into particles with smaller diameters than possible with air jet mills by turning slurry into droplets that are fired at supersonic speed against a collision board.
No heat generation: Because the droplets are pulverized in low-temperature air attributable to adiabatic expansion, the heat generated at the time of the crushing or pulverization is also instantly cooled.
No clogging: A wide slurry passage ensures that large particles can be inserted without clogging.
Easy maintenance: Can be easily taken apart to clean due to the absence of complex parts. Ideal for development applications in which multiple materials are frequently atomized.
Wet atomizer “G-smasher”
Droplet collision method (pulverization mechanism)
This is an ultra-high pressure pump unit with a rated pressure of 150Mpa. It is used in IC lead frame deburring equipment, surface preparation equipment, and the cleaning of molded PVC pipes. The jet projected from the motor-driven rotary nozzle, which features a proprietary curved shape, not only covers a wide area but can also clean inclined lead surfaces. The nozzle incorporates the company’s expertise as a rotary joint manufacturer.
The compact high-pressure cleaner ROCKY Washer is equipped with a handle and wheels to provide excellent mobility. It can remove deposits on cleaning surfaces originating from brushing, hammering, cutting, or scraping work. Its cleaning performance is determined by jet pressure, the quantity of water jet used, and nozzle properties. It facilitates powerful and efficient cleaning while conserving water and power. It can not only clean but also peel off and break up dirt. It is used to clean facilities such as food plants and pools, and surfaces such as conveyor foam.
Large pump unit for cleaning equipment
General-purpose compact cleaner
ROCKY Master is a product range of high-pressure hydraulic equipment that achieves a working pressure of 70Mpa across all products. It includes hydraulic pumps, control valves, and peripheral equipment, all capable of delivering the same pressure. The product range stands out by virtue of its durability and reliability.
These are single-acting cylinders in which hydraulic pressure is used to transfer force and motion in one direction only, and a spring is used to return to the base position. Because their hydraulic pressure works only in one direction, these cylinders are equipped with only one hydraulic hose, resulting in easy handling and power savings. These cylinders are ideal for hydraulic pumps with a rated pressure of 70Mpa.
Hydraulic pump unit
These are air-actuated on/off valves that can be used for steam, gas, hot water, and other applications. They deliver stable performance and do not require maintenance for a long time, making them particularly suitable as automatic valves for tire vulcanizers.
These are air-actuated control valves that can be used for steam, gas, air, and other applications. They deliver stable performance and do not require maintenance for a long time, making them particularly suitable as automatic valves for tire vulcanizers.
These insulating plates are made from phenolic resin and glass fiber that are uniformly die-molded by applying heat and direct pressure. They stand out by virtue of their insulating properties and toughness.
Nitte Light is a base material (such as a special cotton duck or heat-resistant fabric) which is sintered with phenolic resin and then uniformly die-molded by applying heat and pressure. It is used in wipers and liners of hot rolling mills in steel plants.
This is an acid-based cleaning solution for industrial vehicles that complies with the Fire Services Act as a non-hazardous substance. It can serve as a substitute for kerosine-based cleaning solutions.
This fire-proof cloth, which is coated with silicon that contains heat-resistant fillers, protects equipment and workers from metal splashes and sparks during tasks that require either continuous resistance to high temperatures or momentary resistance to ultra-high temperatures.
Grundfos is a world-class pump manufacturer with a workforce of roughly 19,000 people. It manufactures about 16mn pumps per year. It is headquartered in Bjerringbro, Denmark, and operates more than 80 companies around the world. Its Japanese unit Grundfos Pumps K.K. ships some 300,000 pumps per year in three major categories: cold/hot water circulator pumps (Grundfos UP), submersible borehole pumps (Grundfos SP), and vertical, multistage centrifugal pumps (Grundfos CR). Grundfos boasts a global market share of roughly 50% in cold/hot water circulator pumps. RIX is its second-largest distributor in Japan (behind Todoroki Sangyo).
Danfoss inverters with high IP ratings do not need to be stored in control panels. Because they are self-cooled (equipped with a cooling fan with a high IP rating), they can help resolve problems related to installation space and initial costs. Due to their IP54, IP55, and IP66 ratings, they can withstand operation in adverse environments (dust, water, corrosive gases), and do not need to be stored in control panels (they can also be ordered with an optional anti-corrosive coating). RIX is the exclusive distributor of these products in Japan.
Oil seals are used on rotary parts of various machinery to prevent the escape of lubricant oil and the intrusion of dust or soil from outside. They consist of a metal ring to which a seal lip made of synthetic rubber has been attached through bake-adhesion. They can seal moving parts by proving the right amount of hold on a shaft through an embedded spring. They have a broad range of applications, and are indispensable sealing devices used in machinery in many fields, such as automobiles, aircraft, ships, railroad cars, construction machinery, agricultural machinery, petrochemical plants, and home appliances.
Mechanical seals are defined under the Japanese Industrial Standard as follows: “the basic structure of mechanical seals consists of a seal ring (that moves in the axial direction by a spring or the like in proportion to abrasion of the sealing face) and a mating ring (that does not move). End-face mechanical seals, which rotate nearly perpendicularly relative to a shaft perform a movement that limits leakage of fluid media.” Mechanical seals are used in pumps for automotive, home appliances, and civil engineering and construction applications, and in processing and chemical fields such as petrochemistry, nuclear power, and space development. The company’s subsidiary XNOS distributes O-rings—a specialized type of mechanical seal used in semiconductor production equipment—procured from NOK affiliate Eagle Industry.
Pall possesses core technologies related to filtration, separation, and purification, and it supplies film and filter products for a wide array of industries ranging from biosciences to industrial applications (e.g., medical, pharmaceutical, research, food, automotive, power generation, and semiconductors).
RIX sources its FILMTEC-brand reverse osmosis (RO) and ultrafiltration (UF) films from Dow Chemical, a company that manufactures and sells ion exchange resins, RO membranes, UF films, and electro-deionization (EDI) systems for water treatment and special applications. Dow Chemical has captured the leading global market share for ion exchange resins and RO films.
The company breaks down its revenue into three categories of merchandise and finished goods: high-pressure hydraulic application equipment (62.0% of total revenue in FY03/21: merchandise 54.0%, finished goods 8.0%), precision measuring and inspection equipment (4.4% of total revenue: all merchandise), and other products (33.7% of total revenue: merchandise 31.2%, finished goods 2.5%). In FY03/21, merchandise accounted for 89.6% of total revenue and finished goods for 10.4%. According to the company, GPM was 22.7% companywide in FY03/21, just below 20% (15–25% range) for merchandise, and just above 40% for finished goods. GMP varies by product, ranging from 50–60% for rotary joints to 35–45% for equipment.
Based on interviews with RIX, Shared Research understands OPM was 5.0% companywide in FY03/21, 4.5% for merchandise, and roughly 10% for finished goods. Merchandise accounted for 78% of total operating profit and finished goods for 22%. Segment operating profit reflects profit from sales operations, and profit from manufacturing operations is included as internal profit under adjustments (unallocable companywide expenses). The JPY746mn increase in adjustments from JPY400mn in FY03/12 to JPY1.1bn in FY03/21 suggests RIX has been stepping up its manufacturing operations.
|Revenue by product type||FY03/12||FY03/13||FY03/14||FY03/15||FY03/16||FY03/17||FY03/18||FY03/19||FY03/20||FY03/21|
|High-pressure hydraulic application equipment||19,542||18,958||19,733||20,979||22,225||22,955||25,523||27,524||27,155||22,317|
|Precision measuring and inspection equipment (merchandise)||607||709||1,004||1,208||1,191||1,139||1,790||1,693||1,679||1,582|
|High-pressure hydraulic application equipment||6.0%||-3.0%||4.1%||6.3%||5.9%||3.3%||11.2%||7.8%||-1.3%||-17.8%|
|Precision measuring and inspection equipment (merchandise)||4.8%||16.9%||41.5%||20.3%||-1.4%||-4.4%||57.1%||-5.4%||-0.8%||-5.7%|
|% of total|
|High-pressure hydraulic application equipment||66.5%||67.7%||67.4%||66.5%||66.5%||68.0%||66.5%||65.3%||62.8%||62.0%|
|Precision measuring and inspection equipment (merchandise)||2.1%||2.5%||3.4%||3.8%||3.6%||3.4%||4.7%||4.0%||3.9%||4.4%|
|Revenue from merchandise||25,998||24,718||25,897||28,082||29,871||29,358||33,514||36,685||38,292||32,261|
|Revenue from finished goods||3,375||3,272||3,377||3,446||3,554||4,405||4,893||5,451||4,955||3,762|
|YoY change in revenue from merchandise||7.7%||-4.9%||4.8%||8.4%||6.4%||-1.7%||14.2%||9.5%||4.4%||-15.7%|
|YoY change in revenue from finished goods||11.4%||-3.1%||3.2%||2.1%||3.1%||24.0%||11.1%||11.4%||-9.1%||-24.1%|
|% of total revenue: merchandise||88.5%||88.3%||88.5%||89.1%||89.4%||87.0%||87.3%||87.1%||88.5%||89.6%|
|% of total revenue: finished goods||11.5%||11.7%||11.5%||10.9%||10.6%||13.0%||12.7%||12.9%||11.5%||10.4%|
|Gross profit margin||18.9%||19.8%||20.0%||19.9%||21.4%||21.5%||22.0%||22.4%||21.5%||22.7%|
|Merchandise (Shared Research estimates)||17.0%||18.0%||18.0%||18.0%||19.0%||18.5%||19.0%||19.5%||19.0%||20.0%|
|Finished goods (Shared Research estimates)||33.1%||33.4%||35.0%||35.4%||41.2%||41.2%||42.5%||41.8%||40.6%||46.1%|
|Rotary joints (50–60%)||55.0%||55.0%||55.0%||55.0%||55.0%|
|Merchandise (revenue x GPM)||4,420||4,449||4,661||5,055||5,675||5,431||6,368||7,153||7,275||6,452|
|Finished goods (revenue x GPM)||1,118||1,092||1,180||1,221||1,463||1,816||2,079||2,276||2,014||1,733|
|Rotary joints (revenue estimated at under JPY2.0bn)||825||880||935||880||1,045|
RIX develops four proprietary core technologies to manufacture its own products. All of its technologies are based on (thermal) fluid control technologies, which involve ascertaining the movement and thermal phenomena of fluid media such as water, oil, mist, chips, and slurry.
|Core technologies||Corresponding products that are manufactured in-house|
|Tribology technologies||Rotary joints, oil skimmers, etc.|
|Precision cleaning technologies||Ball grid array [BGA] flux (soldering accelerator) cleaning systems, wafer bump flux cleaning systems, etc.|
|High-pressure hydraulic technologies||IC lead frame resin deburring systems, etc.|
|Atomization technologies||G-smasher (supersonic wet atomizer), Micro Ice Jet (localized precision cleaning equipment that projects micro ice particles).|
Tribology is the science and technology of all phenomena occurring as a result of two surfaces interacting in relative motion, including fields such as lubrication, friction, wear, overheating, and bearing design. It is used to reduce friction, wear, and surface damage in machinery and parts. RIX relies on tribology technologies to develop and manufacture its own products.
Precision cleaning technologies are used to achieve precision cleaning of electronic parts such as semiconductors and LCDs. RIX manufactures its own products with proprietary technologies such as a spin jet system. This is a cleaning system that rapidly and reliably removes additives such as flux, micro solder balls, and thickeners by applying a jet stream of cleaning and rinse solution to the bumped side of a spinning wafer (held only at the outer periphery) and the reverse side.
High-pressure hydraulic technologies are mainly used in IC lead frame resin deburring systems. The company manufactures its own systems with proprietary technologies such as oscillating nozzles that apply uniform pressure to the entire cleaning area during the deburring process, resulting in stable deburring quality. With ordinary fan-shaped nozzles, pressure tends to be strong in the middle and weak around the edges, making it impossible to deburr with uniform pressure.
Atomization technologies are one of the company’s core technologies used in its G-smasher and Micro Ice Jet products that are manufactured in-house. G-smasher reduces slurry to droplets of roughly 13μm (Sauter mean diameter [or average particle size]), and fires these against a collision plate at supersonic speed to crush, pulverize, dispersively mix, and emulsify the particles within the droplet. It uses atomization technology to create a supersonic droplet collision dispersion process. The company has secured a patent for its proprietary atomization technology, which combines the strengths of traditional wet and air jet mills.
Micro Ice Jet is a localized precision cleaning technology that projects micro ice particles. Compressed air reaches sonic speed in the throat of the nozzle. When it accelerates to supersonic speed in the diverging part of the nozzle, it expands adiabatically, resulting in a temperature drop. The supplied water droplets accelerate, cool down, turn into micro ice particles and supercooled water droplets, and are fired at supersonic speed. Micro ice particles are formed out of air and water only, removing the need for ice-making machines or liquid nitrogen. The stable size of the micro ice particles prevents ice jams. In this way, foreign matter can be removed from cleaning surfaces without inflicting damage.
RIX has eight reportable segments that correspond to the customer industries it serves: Steel Industry, Automotive Industry, Electronics & Semiconductor Industry, Rubber & Tires Industry, Machine Tools Industry, High-performance Materials Industry, Environmental Industry, and Paper & Pulp Industry. However, it operates in a broad range of businesses that are not necessarily tied to specific reportable segments, so its business structure does not overlap with its reportable segment structure. Segment operating profit reflects profit from sales operations, and profit from manufacturing operations is included as internal profit under adjustments (unallocable companywide expenses).
In the Steel Industry segment, revenue remained broadly flat at about JPY10.0bn from FY03/12 to FY03/21, while OPM rose from 7.6% in FY03/12 to around 9% from FY03/14 to FY03/16, and held more or less steady at around 10% from FY03/17 to FY03/21.
Prompted by a global competitive environment, this industry is seeing intensifying efforts to improve productivity, streamline operations, and reduce costs, as evidenced by business realignment and the consolidation of production sites. At the same time, demand is rising in connection with aging production infrastructure and engineers, and supported by repairs and maintenance, automation, and safety measures. In Japan, major steelmakers have been affected by temporary shutdowns of blast furnaces.
In the Automotive Industry segment, revenue rose 63% from JPY5.6bn in FY03/12 to JPY9.1bn in FY03/21, while OPM increased 2.9pp from 4.2% to 7.1% over the same period. In this industry, the transition from gasoline to electric vehicles is progressing steadily. As a result, RIX is ramping up its operations in secondary batteries and expanding into the motor field.
In the Electronics & Semiconductor Industry segment, revenue climbed 37% from JPY3.3bn in FY03/12 to JPY4.6bn in FY03/21, while OPM increased 2.5pp from 4.1% to 6.6% over the same period. Amid limited capex-related orders from semiconductor manufacturers in Japan, RIX is developing new products for automotive semiconductors, digital offerings, and development applications. The company has seen its revenue increase for finished goods and merchandise for semiconductor production equipment and semiconductor materials (such as pumps for high-pressure cleaning, silicon carbide (SiC) ceramics products, rotary joints, and O-rings) and for repairs of power supplies.
In the Rubber & Tire Industry segment, revenue declined 28% from JPY2.8bn in FY03/12 to JPY2.0bn in FY03/21, while OPM rose 0.6pp from 4.3% to 4.9% over the same period. Capital investment by tire manufacturers is winding down, and orders related to large facilities are declining. RIX aims to capture orders related to automation projects and deepen its relationships with customer divisions tasked with tire development for eco-friendly vehicles, and it is strengthening its overseas operations. Revenue is rising for hydraulic cylinders and sealing products, but declining for the mainstay tire vulcanizer valves bound for overseas.
The Machine Tools Industry segment was split off from the Automotive Industry segment from Q1 FY03/21. In this segment, revenue was JPY909mn (+69% YoY) in 1H FY03/22, and OPM was 10.1% (+4.1pp YoY). The company is capitalizing on growing demand for machine tools driven by resurgent automobile production and growth in demand for part processing products for semiconductor production equipment.
In the High-performance Materials Industry segment, revenue increased 73% from JPY997mn in FY03/13 to JPY1.7bn in FY03/21, while OPM rose 2.2pp from 7.4% to 9.6% over the same period. In the materials field, which is poised for growth, RIX targets revenue from the carbon fiber industry, from high-performance materials such as high-performance glass and biodegradable polymer, from growth in cleaning systems sold to the pharmaceutical and cosmetics industries, and from the rare metal industry (titanium oxide, nickel, etc.).
In the Environmental Industry segment, revenue increased 33% from JPY1.2bn in FY03/12 to JPY1.6bn in FY03/21, while OPM rose 3.1pp from 5.3% to 8.4% over the same period. Operations related to disaster control measures were robust in the public works business, and operations related to urban development were strong in the private-sector business. RIX is cultivating water treatment-related business and the energy field, and deepening relationships with and cultivating customers in the incinerating and recycling industries. As a result, revenue is expanding for dampers for gas-cooling facilities and expansion joints for biomass facilities.
In the Paper & Pulp Industry segment, revenue increased 10% from JPY672mn in FY03/12 to JPY738mn in FY03/21, while OPM rose 4.2pp from 6.6% to 10.8% over the same period. In this industry, trends such as digitalization and the transition to paperless offices make it difficult to forecast demand and growth in capital investment. Against this backdrop, RIX continues to deepen relationships with customers in the chemical materials field, and target equipment renewals and maintenance services for power generation facilities of various companies.
In Other Industries, revenue fell 4% from JPY5.5bn in FY03/12 to JPY5.2bn in FY03/21, while OPM increased 4.5pp from 4.7% to 9.2% over the same period.
The companywide OPM increased 0.8pp from 4.2% in FY03/12 to 5.0% in FY03/21. During this period, companywide revenue increased JPY6.7bn and companywide operating profit JPY548mn. The increase in OPM in each segment was below the growth in companywide OPM as adjustments (unallocable companywide expenses) increased by JPY746mn.
|% of total||35.0%||34.3%||30.9%||32.8%||31.9%||32.1%||30.5%||31.6%||31.2%||30.4%|
|% of total||19.0%||21.9%||23.1%||21.7%||24.0%||24.8%||26.4%||28.2%||26.8%||25.3%|
|Electronics & Semiconductor Industry||3,338||2,450||2,576||3,197||3,310||3,441||4,232||4,297||4,054||4,583|
|% of total||11.4%||8.8%||8.8%||10.1%||9.9%||10.2%||11.0%||10.2%||9.4%||12.7%|
|Rubber & Tire Industry||2,827||2,421||2,818||3,120||3,214||2,576||2,862||2,992||2,963||2,049|
|% of total||9.6%||8.7%||9.6%||9.9%||9.6%||7.6%||7.5%||7.1%||6.9%||5.7%|
|High-performance Materials Industry||997||1,005||1,284||1,228||1,126||1,519||1,553||2,575||1,728|
|% of total||-||3.6%||3.4%||4.1%||3.7%||3.3%||4.0%||3.7%||6.0%||4.8%|