IR

Medium-term Corporate Business Plan

The Kurabo Group has established a new three-year Advance’ 18 Medium-Term Corporate Business Plan, which came into effect in April of this year and sets FY2018 as its target year.

 

The Group has been working on the 10-year long-term vision for business expansion and sustainable growth with business targets of 200 billion yen in sales and 10 billion yen in operating income in FY2019. The Advance’ 18 Medium-Term Corporate Business Plan is positioned as the final stage in the Long-Term Vision roadmap. Based on this crucial action plan, we establish a foundation for higher levels of business operations for 10 years ahead of the Long-Term Vision.

Under the previous Future’ 15 Medium-Term Corporate Business Plan, the second stage of the Long-Term Vision, we set “enhancement of overseas strategies” as the basic policy. Unfortunately, because of the slowdown of the Chinese and other emerging economies, and abrupt changes in foreign exchange rates, we made little progress towards the realization of the Long-Term Vision, and did not achieve satisfactory results in business terms. However, we managed to produce certain results: our divisions have been steadily and acceleratingly expanding into overseas markets, restructuring less profitable operations and withdrawing from unprofitable ones. All this helped us enhance our revenue base.

In the light of the results of Future’ 15, we will pursue more market-oriented business operations under Advance’ 18. Consequently, on April 1, 2016, we revised the organizational structure and reshuffled the business segment, targeting future marketing. We also seek to strengthen the Group’s corporate governance and management, and to obtain the best results from these measures. At the same time, we will steadily promote Advance’ 18 under the management philosophy of “We at Kurabo are working to improve current living culture by creating new value,” strive to further improve our corporate values, as well as our existing value in the society, to maximize profits shared with all our stakeholders. 

 

Overview of Advance '18

1. Targets of Consolidated Performance

Note: ROA for Return on Assets and ROE stands for Return on Equity

(unit: billion yen)

 FY2015 (base)FY2018 (target)
Sales 173.2 190
Operating Profit 4.3 9
Ordinary Profit 4.5 9.5
Current Net Profit 2.6 6.5
ROA 2.3% 5.0%
ROE 3.0% 7.0%
Performance by business category

(*) Deletion or Corporate consists mainly of R&D costs that cannot be allocated.

(unit: billion yen)

 Amount of SalesOperating Profit
 FY2015
(base)
FY2018
(target)
FY2015
(base)
FY2018
(target)
Textiles 80.4 85 0.7 2
Chemical Products 57.1 64 0.6 2.7
Advance Technology 21.2 25.5 0.7 1.8
Food and services 9.9 11 0.8 1
Real estate 4.3 4.5 3.1 3
Deletion or corporate (*) - - -1.8 -1.5
Total 173.2 190 4.2 9
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2. Outline of High-Priority Policies by Segment

 We will invest management resources intensively in high-growth and high-value-added sectors and, at the same time, shift our focus to market-oriented business. We will implement the following key measures as priorities in each business segment.

 

[ Textiles ]

  • Building a high-revenue business structure through technical innovation and new business models
  • Enhancing high-value-added and creative business operations through the combined efforts of sales and manufacturing sectors to improve the value of the company's plants
  • Facilitating closer cooperation between the Group and partner plants to promote global production, procurement, and sales
  • Expanding business through sales expansion of original products, including clean science products (CLENSE®, etc.) and Air Flake®.

 

[ Chemical Products ]

  • Focusing on and expanding processed resin products and high-performance film businesses
  • Pursuing the synergy effects of integration with the functional business materials transferred from the textiles segment
  • Promoting development of new products and marketing to new customers
  • Enhancing the revenue base of the flexible urethane form business abroad (in China and Brazil)

 

[ Advance Technology ]

  • Promoting commercialization and coverage expansion in new business fields, including infrastructure inspection, operation of biomass power plants, environment and energy, and halal food inspection
  • Enhancing the cooperation among the Group, partner companies, and distributors to expand sales channels for key products in Japan and abroad
    Key products: horizontal boring and milling machines, mixing and deaerating systems MAZERUSTAR®, film thickness meters, nucleic acid isolation systems, gene analysis products, semiconductor cleaning machines, etc.

 

[ Food and Services ]

  • Developing new freeze-dried food products and expanding sales through B2B solutions in the food business
  • Strengthening the brand image of "Ivy Brand" to attract more customers and raise the profitability of the hotel business

 

[ Real Estate ]

  • Considering the rebuilding of already developed properties and the effective use of idle assets with the aim of securing and increasing revenues
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3. Use of management resources

1) With the aim of increasing business operations, we will invest a total of about 16 billion yen in capital over three years. This will include the construction of the Tokushima Biomass Power Plant, which has been in progress from the previous fiscal term; strengthening of the production capacity for processed resin products; introduction of processing facilities, including graft processing facilities; seismic retrofitting of factories; and upgrading of aged facilities.
Furthermore, we will proactively make business investments through means such as M&As and capital alliances, as necessary.

 

2) The Group’s Technical Research Laboratory is responsible for creating new business fields for the Group. It will efficiently utilize R&D resources, advance existing core technologies, and engage in business development activities focusing on four key fields, that is, life science, chemical engineering, robot vision, and high-function composite materials.
Moreover, as a company-wide development project, the laboratory will aim to establish technologies that can differentiate our super engineering plastic films for new purposes from other products.

 

3) To respond to globalization and other drastic changes in the business environment, we will secure various human resources and develop human resources and leaders of the next generation, who can take action for self-improvement.
The Group will also offer personnel a system to help employees of the Group be motivated to work and improve their abilities.

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4. Creating a trusted company

1) Enhancing corporate governance
As a part of our efforts to create a company trusted by stakeholders such as shareholders, customers, employees, and local communities, we set forth the “Kurabo Corporate Governance Guidelines” in December 2015. In line with these guidelines, we manage the company and strive to enhance corporate governance for fair and transparent business activities.

 

2) Enhancing and promoting CSR activities
On the initiative of the Kurabo CSR Committee, we will engage in a wide range of CSR activities, and further enhance CSR special subcommittees' activities. Moreover, we offer internal training and education to foster a corporate culture, where there is no wrongdoing from our employees and do not let others behave as such, and do not overlook any wrongdoing. We care for reductions in the environmental burden, for which we aim to reduce CO2 emissions and target a zero-emission policy. We also established the "Female Advancement Promotion Committee" to help our female employees develop professionally within the Group.

 

3) Enhancing the relation with stakeholders
The Group will strive to build good relations with its various stakeholders. For shareholders, we will maintain the stable dividend policy, make effective buy-backs, and secure opportunities for dialogue. For customers, we will proactively propose and ensure a stable supply of products and services required in the market, engage in activities contributing to local communities, and improve corporate recognition through a full range of PR activities.

 

(Disclaimer)
The performance results and other contents of this document are based on the forecasts of the Group, based on factors such as the business environment at the time the document was prepared, and do not constitute a firm commitment or guarantee that the forward-looking numerical values and measures described here will be achieved.

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