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The eBearing News
September 16, 2003
Daibea Sets 20% Cost Reduction Target
for Fiscal 2003
copyright © 2003 eBearing Inc.
Daibea Co. Ltd. (Japan) said it has targeted a 20% reduction in overall manufacturing costs
for fiscal 2003.
Founded in 1936, Daibea was formerly named Osaka Bearing Company. In 1963, bearingmaker Koyo Seiko
(Japan) took an ownership interest. Osaka Bearing was later renamed
Daibea, and Koyo now owns 42.5% of the company's outstanding shares.
Daibea manufactures specialty ball and roller bearings, such as thin-section and special-environment
bearings, for industrial, robotic, automotive, rail, bicycle and other applications. 96% of Daibea's production
is ball bearings, the rest tapers.
Virtually all of Daibea's sales are through Koyo, which now buys 98% of the company's output. Daibea sells
a small amount directly in Japan, but all export sales occur through Koyo. Half of Daibea's Koyo export
sales end up in the North American market.
Increasingly, Daibea has been facing stronger competition in all of its markets from bearings imported from
eastern Europe, China,
Korea and India. To counter those challenges, Daibea recently announced it has targeted the end of this
fiscal year for a 20% overall reduction in manufacturing costs.
Daibea operates two manufacturing plants, but its main facility Nabari will receive virtually all of
the attention and investment.
The bulk of Daibea's cost-reduction focus will be on improving throughput and efficiency, particularly in
the grinding operations. Daibea's focus reflects virtually every bearing manufacturer's concern; that grinding
is the most potentially trouble-prone and bottleneck-prone step, and the step where the cost of scrap
rises dramatically. A parallel phase involves improving inspection processes and accuracy, with the aim toward
pinpointing the sources of defective products as they move through the manufacturing process, enabling the company
to proactively address problem areas.
Targeting material cost reductions, Daibea said it will increase its outsourcing of bearing seals
to more low-cost vendors in China, among others.
So far, Japanese equity markets have reacted favorably to Daibea; its share price is up 40%
over the past year, recently trading at ¥228 per share.
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- by Bruce A. Carr
from individual research,
tips and commercial sources.
Unauthorized reproduction is prohibited.
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Entire contents Copyright 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered
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eBearing.com ... for everything that moves™
Entire contents Copyright © 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered trademarks of eBearing Inc.
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