ASIMCO Camshaft Wins FAW-Volkswagen’s “2012 Outstanding Supplier”

On January 23, 2013, SAIC Fiat Hongyan Powertrain Co., Ltd. (SFIHR), which had been in operation for five years, held its first Supplier Conference in Chongqing. SFIHR currently has more than 300 suppliers, and 128 of them were invited to attend this conference, including ASIMCO Camshaft (Yizheng) Co., Ltd. As a global supplier of FPT, ASIMCO Camshaft (Yizheng) Co., Ltd. has been actively involved in supplying Camshafts since the early days of SFIHR’s establishment and is currently the sole supplier of Camshafts for SFIHR’s CURSOR9 and CURSOR13 engines. Over the years of cooperation with SFIHR, the Camshaft Company has earned high recognition from SFIHR for its superior product quality, 100% on-time delivery, and rapid after-sales service response. At the conference, the Camshaft Company was awarded the title of “2012 Outstanding Supplier” by SFIHR and delivered an award-winning speech as a representative of outstanding suppliers.

Cummins East Asia International Visits ASIMCO Camshaft

On November 30, 2012, Mr. He Qizhi, Director of East Asia International Procurement at Cummins; Mr. Jiang Xiaoxiang, Procurement Manager; and Ms. Jin Jing, Procurement Specialist—three members of the delegation—visited our company to conduct the annual supplier performance evaluation. Mr. Chen Aiguo, General Manager of the company, extended a warm welcome to the guests. Director Dai Hongxing provided a detailed overview of the company’s overall operations, with particular emphasis on the progress of all Cummins projects and future plans. Subsequently, accompanied by General Manager Chen and Sales Director Zhou, the Cummins delegation toured the casting and machining production areas as well as the inspection facilities. Along the dedicated Cummins production line, the guests closely observed and provided guidance at each process step, commending Yizheng Camshaft for its clean machining environment, state-of-the-art and comprehensive testing equipment, and well-organized dedicated line layout. Finally, the Cummins delegation conducted the annual performance evaluation for this year’s business collaboration. During the evaluation, they acknowledged our company’s achievements in working with Cummins while also offering several suggestions for improvement. We will implement these recommendations one by one as required, which will not only enhance our own capabilities but also help ASIMCO Camshaft and Cummins achieve greater success in future business cooperation.

ASIMCO Camshaft Wins Foton Cummins’ “Annual Best Quality Improvement Award”

On November 22, 2012, at the 2013 Supplier Conference of Foton Cummins in Beijing, ASIMCO Camshaft (Yizheng) Co., Ltd. once again received recognition from Foton Cummins Engine Co., Ltd. (BFCEC) for its outstanding performance in continuous quality improvement and achieving zero PPM in after-sales service, and was awarded the “2012 Best Quality Improvement Award.” In early 2012, the company leveraged its team strengths and pooled collective wisdom to conduct FMEA analyses on existing or potential quality issues, formulate corrective measures, and track their implementation until the issues were resolved. The company integrated process error-proofing into process design to enhance quality stability. In response to quality feedback from customers, it provides a reply within 4 hours and dispatches service personnel to the site within 24 hours, ensuring customer satisfaction and peace of mind in product use. For three consecutive years, the company has been honored by BFCEC with the “Best Quality Award,” “Best Supplier Award,” and “Best Quality Improvement Award.” Moving forward, the company will continue to pursue “zero defects” as the ultimate goal for product quality, striving to win customer recognition and capture an even broader market through superior product quality, reliable delivery, and attentive, timely service.

A Delegation from FAW-Volkswagen Purchasing Director Visits ASIMCO Camshaft

On November 1, 2012, Ms. Tang Ziting, Director of Procurement, and Ms. Chen Jie, Procurement Manager, from SIFH (SAIC Fiat Hongyan Powertrain Co., Ltd.), paid a special business visit to our company. Since May 2009, our company has been supplying components to SIFH, having delivered nearly 30,000 steel Camshafts for the Cursor9 (C9) series—platform-matched with FIAT—in bulk. In addition, we have developed and trial-manufactured two new Camshaft models: NEF6 and Cursor13 (C13). Whether in mass production or prototype trials, the quality of our products has consistently earned high praise from customers. Mr. Chen Aiguo, General Manager, and Mr. Zhou Quan, Director of Marketing, hosted Ms. Tang Ziting and her delegation from SIFH. They provided a detailed overview of our company’s development history and our state-of-the-art machining and inspection equipment, and accompanied the guests on a tour of the dedicated C9 Camshaft machining line. Director Tang Ziting highly commended our stable product quality since the start of our collaboration, expressed gratitude for our establishment of a dedicated C9 machining line to ensure SIFH’s regular supply needs, endorsed our strategic focus on serving high-end customers, and voiced optimism about our future prospects. She also engaged in business discussions on further cooperation, exchanging views on newly-developed joint projects. Director Tang stated that, given our consistently reliable product quality, she would actively recommend our NEF6 and other Camshaft products to the FPT Shanghai office for export to Fiat plants in Europe, thereby further strengthening our partnership.

Hone Your Core Strength, Thrive in Adversity

Since the beginning of this year, the sluggish heavy-truck market has disrupted our company’s development trajectory and had a significant negative impact on various business performance indicators. At the same time, however, it has forced us to step back from responding to nearly irrational market growth demands, thereby exposing the drawbacks and shortcomings of our previous rough-and-ready expansion strategy. Despite this roller-coaster ride in market conditions, ASIMCO Camshaft remains firmly convinced that only superior quality, cost efficiency, and operational effectiveness can ensure the company’s survival. In active response to the Group’s call to “win in the downturn,” we have launched a series of improvement initiatives, pooling our collective efforts to maintain sales and EBITDA margins, enhance operational quality, and translate our corporate credo—“Quality is the bottom line for survival; efficiency is the condition for survival”—into concrete production practices. The core competitiveness of an enterprise lies in its internal strengths. Chen Aiguo, the company’s general manager, has emphasized that this year’s priority is to raise manufacturing standards while reducing production and operating costs. By stabilizing product quality, lowering COPQ, and enhancing product R&D and manufacturing capabilities, we aim to consolidate our foundation and strengthen the company’s ability to withstand market risks. On the technical and quality front, we continue to refine our process FMEA database, conduct monthly reviews, update control plans, and steadily improve both input-output ratios and the physical quality of our products. As a result, our cumulative COPQ has decreased by one percentage point compared with the same period last year. Given the large number of “second-hand” machines in our fleet—most of which have been in service for over 25 years and are increasingly difficult to maintain—the equipment department has continuously enhanced the FMEA database for equipment maintenance, providing technical support for timely and efficient repairs. This has led to a substantial reduction in failure rates. Moreover, workshop maintenance teams now draw up predictive maintenance schedules each month; for example, serious malfunctions such as derailments and overturns on the casting B line, which were common in previous years, have been completely eliminated over the past two years. Since the beginning of this year, there have been virtually no instances of production being disrupted due to equipment failures, ensuring smooth operations and putting an end to the past practice of using “second-hand equipment” as an excuse for problems. Meanwhile, the production department leverages on-site TPM management and lean manufacturing principles, conducts ergonomics research to reduce labor intensity, boost shift productivity, and lower unit production costs. Project management also maintains strict control over project timelines, advocating low-cost new-product development and rigorously advancing new-product R&D according to plan, so as to cultivate new growth drivers for the future. In addition, every manager is required to submit at least one rationalization proposal each month, employee suggestion activities are actively encouraged, and comprehensive cost-reduction and improvement initiatives are being carried out, ensuring that the principles of quality, cost, and efficiency permeate every stage of production and operations. To date, despite a roughly 15% increase in labor costs, a rise of about RMB 0.04 per kilowatt-hour in electricity prices, and a more than 3-percentage-point increase in sales and administrative expenses compared with the same period last year, these improvement measures have still resulted in a slight increase in sales and EBITDA margins compared with last year. We expect full-year performance to remain broadly flat versus last year, thereby ensuring the company successfully navigates the current market downturn.

Responsibility, Collaboration, Confidence — ASIMCO Camshaft Successfully Holds the Third Team-Building Training

It is a beautiful season when spring is in full bloom and all things are reviving. To enhance the team’s combat effectiveness, on April 22, 2012, the company organized a one-day team-building training session for a total of 38 participants, including production workshop team leaders, maintenance personnel, and some department staff, at the Runyang Bridge Team-Building Base. Throughout the event, the team members were highly motivated and the atmosphere was lively, actively engaging in experiential training activities such as high-altitude bar grip, life-and-death electric fence, trust fall, 5-minute challenge, and wall-climbing. The combination of education and entertainment brought joy and enlightenment to the team members. Through this activity, everyone gained a deeper understanding of “communication, trust, collaboration, responsibility, and challenge” within the team. After the event, each participant reflected deeply on the team-building experience, and the team spirit was further strengthened through mutual adjustment and cooperation. During the activity, we witnessed not only the team members’ hesitation when challenging themselves, but also their confidence after success; we saw not only their joy at the team’s achievements, but also the wisdom and effort they put in. Everyone firmly believes that, through teamwork, we can overcome all obstacles on our path forward and jointly manage ASIMCO Camshaft (Yizheng) Co., Ltd. well.

ASIMCO Camshaft (Yizheng) Co., Ltd. Successfully Secures Cummins Viking Project

Just after the May Day holiday, good news came from Cummins’ headquarters in the United States—our company has been awarded the Camshaft Project for Cummins’ Viking engine. The Viking engine is a newly designed, 5.0-liter, V8 high-end passenger-car engine by Cummins. Securing this project marks our company’s entry into the high-end passenger-car camshaft market, laying a solid foundation for the comprehensive development of both commercial-vehicle and passenger-car camshafts in the future. During the six-month period in which we pursued this project, we successfully passed on-site audits conducted by Cummins’ Global Procurement Director and the Viking Engine Project Procurement Director, as well as a review and confirmation of our engineering proposal by the Viking Engine Project Technical Director. Ultimately, thanks to our strong project-management capabilities, mainstream technological approach, and reliable quality assurance, we stood out among several world-class camshaft suppliers and were awarded the contract. The Viking project will complete the development of Alpha and Beta 1 prototypes this year, carry out equipment procurement, production-line setup, and trial runs in 2013, finish PPAP in February 2014, and achieve a production capacity of 160,000 units per year after a ramp-up phase in July 2014, with the ultimate goal of reaching 320,000 units per year by 2016. On the evening of May 10, the U.S. Viking project team, Shanghai Cummins IPO, and our company held the project’s Kick-off Meeting, at which we also agreed to hold weekly teleconferences to track project progress, ensuring the smooth execution of the Viking camshaft project.

Kubota Customer Visit to ASIMCO Camshaft

On February 24, 2012, Mr. Miyazaki Hachiro, Director of the Kubota Suzhou Office in Japan, led a delegation of four, including Mr. Shiraishi Yasunori, Head of the Relevant Department, to our company for a final business discussion prior to the mass production of Camshaft for Kubota’s A56 project. After nearly two years of preliminary communication and sample submissions, Kubota has now completed the engine bench tests at its headquarters in Japan. Our Camshaft test results have met the design requirements, which has greatly satisfied Kubota. Director Miyazaki also mentioned that Kubota has already invested in building engine plants in Japan and Thailand, and is planning to construct another engine plant in Changzhou, China, where it will directly purchase finished A56 Camshafts from our company. If the initial supply goes smoothly, Kubota will subsequently collaborate with ASIMCO Yizheng Camshaft Co., Ltd. on Camshafts for V3 and other engine models. Furthermore, Kubota expressed its willingness to provide production and technical support to our company to reduce processing costs and achieve mutual benefit. The two sides confirmed the final purchase price for the A56 Camshaft and conducted detailed discussions and finalization on several commercial terms, such as fluctuations in raw material prices and exchange rate changes. They also held preliminary discussions on dedicated production line equipment, production capacity, efficiency, and product rust prevention for the A56 Camshaft, ensuring that SOP can be launched in July this year. Director Miyazaki stated that at the Kubota senior management meeting at the end of February, once the specific milestones for the A56 project are determined, our company will be promptly informed of the detailed project schedule. It is also learned that on March 1, the Kubota Suzhou Office called to inform us that, in competition with the Thai plant, our company had emerged victorious and secured an annual order of 40,000 units for the A56 project.