Asahi Kasei Corporation
March 7, 2006 |
Growth Action - 2010:
Strategic five-year business plan
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Asahi Kasei today announces Growth Action – 2010,
a plan of action to guide the growth of operations throughout the Asahi Kasei Group
from fiscal year 2006 through fiscal year 2010. Growth Action – 2010 will build on the strong financial and operational base established through the Ishin-05 strategic initiative which concludes at the end of this month,
advancing the transformation of the business portfolio with strategic investments for expansion and growth,
to effect greater corporate value and brand strength.
Strategic pillars of the plan are the expansion of businesses characterized
by global competitiveness and the enhancement of businesses focused on the domestic Japanese market.
The plan provides for investment over the five years totaling ¥800 billion,
of which ¥400 billion is strategic investment including M&A. Targets for fiscal
year 2010 include net sales of ¥1,800 billion, operating profit of ¥150 billion, and ROE of at least 10%.
Ishin-05 retrospective
Through the three-year Ishin-05 initiative begun in fiscal 2003,
the Asahi Kasei Group has executed a wide-ranging corporate transformation. Business portfolio
realignments have brought a renewed selectively to our diversified enterprise group.
The operating structure was transformed to obtain greater focus on cash flow creation.
Structural and organizational reforms have increased the speed and autonomy of business management.
One key element which has contributed to these accomplishments was the drive
to “build on strengths” by reinforcing and expanding businesses in fields of competitive advantage.
Another key was the October 2003 transformation to a holding company configuration with seven core operating companies,
each focused on a specific segment of business, together with an enhanced system of corporate governance.
During the course of Ishin-05 our financial strength has risen markedly
as business performance has advanced. The forecast for fiscal year 2005,
ending this month, is to achieve the ambitious targets we set three years ago,
marking the second consecutive year of record sales and net income.
Having achieved this progress, we are determined to obtain further growth
by focusing efforts for business expansion in global markets which are unaffected by the mature Japanese economy.
Growth Action – 2010
Conceptual framework
The Asahi Kasei Group serves many different markets with a wide range of outstanding technologies and a
variety of separate business models. Based on the strengths and competences we enjoy in each area,
business portfolio realignments for further expansion and growth will be advanced through concerted
strategic investments in accordance with the strategic pillars of expanding global businesses and
enhancing domestic businesses.
Among our businesses, those with a stable growth and earnings base*
will be enhanced for greater performance while generating the resources which will
enable the expansion of high growth businesses†,
thus driving a new phase of development and growth for the Asahi Kasei Group.
* Principally in domestic fields such as housing, construction materials, and pharmaceuticals; polymers, including processed products; and monomers such as acrylonitrile, methyl methacrylate, and styrene monomer.
† Principally in chemical-based, specialized-function product fields; electronics chemicals; medical devices; and electronic devices.
Performance targets
| |
FY 2005 forecast |
FY 2008 target |
FY 2010 target |
| Net sales |
¥1,500 billion |
¥1,650 billion |
¥1,800 billion |
| Operating profit |
¥105 billion |
¥125 billion |
¥150 billion |
| Net income |
¥59 billion |
¥65 billion |
¥80 billion |
| ROE |
11% |
≥10% |
≥10% |
The aims of Growth Action – 2010 also include continuous successive dividend increases made possible by the achievement of increased earnings.
Pillars of strategy
Expanding global operations:
Expansions will be focused on global businesses whose growth is unimpeded by the limits of the mature Japanese economy. In addition to furthering the program of “building on strengths” already advanced, this will include extending the geographical cover of businesses with established presence in overseas markets, and the creation of new businesses with potential for development on a global scale. By fiscal year 2010 we aim to raise the portion of sales in global businesses from the current 55% of our sales to 60% and to raise the rate of overseas sales from 23% to one third or more.
Enhancing domestic operations:
Growth and greater earnings in domestic businesses will be achieved by expanding into services peripheral to established businesses, cultivating new demand by dynamic response to emerging market trends, and pursuing higher added value throughout.
Strategic investment:
The Asahi Kasei Group currently invests on the order of ¥70–80 billion per year. In addition to ordinary investment on this scale, the plan provides for strategic investment of ¥400 billion, including M&A, by fiscal year 2010, for a total of some ¥800 billion of investment during the five-year period. Strategic investment will largely be directed to the four product categories of monomers, chemical-based, specialized-function products, electronics products, and medical devices, including both business expansion and new business creation.
Outline by business category
Global businesses:
- Petrochemicals
- Global expansion of businesses based on superiority and originality
- Propane-process acrylonitrile, direct-oxidative-esterification-process methyl methacrylate, etc.
- Establishment of advantageous feedstock supply framework (utilizing Alpha Process and Omega Process, location at feedstock source)
- Chemical-based, specialized-function products
- Market expansion based on technological strengths
- Roica™ spandex in Europe and US
- Microza™ filtration modules in China and US
- Elastomers in major world markets
- Enhanced R&D, creation of new businesses
- Hipore™ Li-ion battery separators, other battery materials
- Water treatment systems
- Electronic devices
- Expansion of mixed-signal custom LSI business
- Enhanced design function
- New fields of application
- New geographical markets
- Expansion and development of sensor/LSI hybrid device businesses
- Cell phone backlight switch, electronic compass
- Contact-free rotation angle sensor for automotive use, etc.
- Electronic materials
- Expansion, higher added value, new applications in established businesses
- Photosensitive dry film resist (DFR), glass cloth, Pimel™ photosensitive polyimide, pellicles, etc.
- Creation of new businesses
- Coordination with chemical businesses and marketing center for packaging/display materials
- Medical devices
- Advancing toward a top-class global business in blood purification systems
- Global expansion of hemodialyzer (artificial kidney) business
- Enhanced cost competitiveness
- Enhanced and expanded overseas marketing functions
- Accelerated development of pipeline in other therapeutic fields (principally leukocytapheresis and plasmapheresis)
- Utilization of clinical development functions for pharmaceuticals
- Advancement of clinical development overseas
- New business creation
- Chemical-based, high-performance
- Polyketone filament
- Battery-related materials, etc.
- Electronics
- Packaging/display materials
- Capacitors, etc.
Domestic businesses:
- Housing
- Eliciting demand for rebuilding
- High performance homes
- Larger, better-trained sales force
- Extension of “Long Life Home” strategy
- Remodeling, real estate, other related services
- Construction materials
- Growth in insulation materials
- Synergies with housing operations
- Greater management emphasis on customer perspective
- Pharmaceuticals
- Focus on orthopedics, central nervous system, and urology
- Dynamic use of alliances with other companies
- Joint development, joint sales, licensing, etc.
Structural framework for execution
Growth Action – 2010 does not entail any change to the holding company structure, basic governance frameworks, and management systems in place. Modification of the configuration of core operating companies will be considered as business portfolio changes and new business developments make this appropriate.
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