(2023年5月)
Outline of Medium-Term Management Plan
1.Review of FY 2022 consolidated target figures
In FY2022, while economic activities continued to normalize in response to COVID-19, both sales and profits fell short of planned targets due to uncertainties over the future, including the prolonged situation in Ukraine, soaring resource prices, and accelerating inflation in developed countries.
Consolidated net sales were 18,826 million yen, 4,174 million yen less than our planned amount of 23,000 million yen.
The Japan segment was able to secure a certain level of sales mainly due to solid orders related to lithium-ion batteries for electric vehicles (EV). However, due to the effects of prolonged parts supply shortages caused by supply chain disruptions, sales fell by 1,333 million yen to 12,847 million yen.
In the East Asia segment, orders related to lithium-ion batteries for electric vehicles (EV) and lenses for smartphones and VR remained strong. That said, sales were 5,430 million yen, 2,320 million yen less than the planned amount, due to the shutdown of factory operations for more than two months as a result of the lockdown in Shanghai.
In the Southeast Asia segment, capital investment is generally on a path of recovery, although there are variations across countries. However, sales have not yet returned to pre-pandemic levels and were 1,861 million yen, 119 million yen less than the planned amount.
In the North and Central America segment, although demand is recovering, particularly in the automotive-related sector, there has not been a recovery in capital investment, and sales were 191 million yen, 179 million yen less than the planned amount.
In terms of profit and loss, we worked to reduce costs and other expenses, but this was not enough to cover the decline in gross profit due to the decline in sales and the sharp increase in resource prices. As a result, consolidated operating income was 638 million yen, 882 million yen less than the planned amount, and consolidated ordinary profit was 813 million yen, 657 million yen less than the planned amount.
Net income attributable to owners of the parent was 351 million yen, 649 million yen less than the planned amount, due to the recording of extraordinary losses related to COVID-19 at a subsidiary in China, impairment losses on fixed assets at an overseas manufacturing subsidiary, etc.
2)2022年度経営戦略の振り返り
(1) Strengthening business expansion in new markets and growth fields
- Although activities in the Japan, East Asia, Southeast Asia, and North and Central America segments were restricted due to the spread of COVID-19, we continued to gather information, conduct market research and analysis, and strengthen promotions as policies for life with COVID-19 took hold in each country.
- We promoted compliance with CQI-23 in the automotive industry.
- Next-generation battery technologies and new product development went smoothly, and delivery of actual equipment for next-generation batteries also progressed.
- With regard to lithium-ion batteries for EV, inquiries and orders for mixers for cathode materials, material supply equipment for manufacturing separator films, and temperature control equipment further increased.
- Our molding factories progressively enhanced support for telecommunications technologies (IoT).
- In the optical components industry, the demand for VR and smartphone lenses increased.
- We strengthened measures for reusing raw materials in molding factories.
- We took initiatives to promote environmentally friendly new materials and composite materials by utilizing our plastic mixing technologies.
- We are currently undertaking efforts toward the development and sales of oil- and fat-removal equipment to improve the environment at all factories.
- We enhanced mutual guidance and information-sharing activities among Group companies for matters related to development and quality.
- In North and Central America, a new service center was opened in July 2022 in Tijuana, Mexico, on the U.S. border. We will improve services for Japanese and Chinese users in the region.
- In the United States, we moved to an office with an attached warehouse in July 2022 in anticipation of future business expansion.
(2) Expanding sales and improving profitability in existing markets and business fields
- We promoted the improvement of equipment and functionality by actively contracting patents and licenses between Group companies.
- We expanded remote service activities using smart glasses.
- We added a lineup of equipment for Southeast Asia and are working to add more equipment.
- In preparation for the transfer of the Colortronic business from Kubota Keiso Corporation (April 1, 2023), we established a system for receiving business related to manufacturing, sales, and after-sales service.
(3) Strengthening management bases and ESG practices
- The Kawata Technical Center was constructed as part of the Group’s investment in human capital for sustainable growth (completed in March 2023). As a manufacturer, we will strive to pass down essential technologies and skills and further strengthen our Group’s product development, technical, sales, and service capabilities.
- We have been reviewing our core and peripheral systems.
- We continued to take measures to ensure that each employee receives five days of annual paid leave and to thoroughly enhance our labor-hours management based on the revised Labor Standards Act of Japan, promulgated in association with work-style reform legislation.
- We continue support for telecommuting, remote meetings, and reduced working hours.
2.2023年度中期経営計画
(1) Business Environment and Basic Principles
- While business activities under the COVID-19 pandemic are going back to normal in the global economy through penetration of the “living with COVID-19” strategy in each country, the short-term prospects continue to be uncertain due to the prolonged situation in Ukraine, rises in prices of resources and raw materials, and with those as a backdrop, accelerating inflation, etc. in each developed country.
- The global GDP, which turned positive in 2021, tends to slow down in 2022 due to multiple factors including the COVID-19 pandemic and subsequent confusion in the supply chain.
- It is difficult to expect that the global economy in 2023 will make a strong and rapid recovery, and the risk of a downturn in the economy is getting high with growing concern about geopolitical risks.
- There is an estimation that production adjustments due to the semiconductor shortage, soaring prices of resources and raw materials will become stable gradually, but as for short-term prospects the economy faces high uncertainty.
- Aggressive investments continue to be expected in the fields related to lithium-ion batteries for EV, while there are uncertainties about the future in China's real economy.
- In the medium to long term, since plastic will remain an indispensable material in the lives of people around the world, demand is expected to grow in various fields.
- Since the automobile and electronic components industries have broad economic bases and present high growth potentials, we will continuously target them as our main areas. Specifically, we plan to actively allocate our technologies and resources into the electrification of automobiles, automated driving, and vehicle weight reduction applications.
- In this era of coexistence with COVID-19, we will effectively respond to the expanding use of communication devices (tablets, PCs, smartphones, and VR) that accompany social changes, while also supporting advances in digitization featuring AI, IoT, and 5G.
- We will respond in a timely manner to the expanded production of general-purpose products that help improve the standard of living in Asian countries, while also meeting the needs of the automobile and high-tech industries in North and Central America. In the extruding business including film and sheet, in addition to the demand in Japan, we will respond to the expansion of production in China and other Asian countries.
- In Japan, it is expected that there will be increased investment in technologies that achieve labor saving and production efficiency in order to offset labor shortages and comply with social distancing regulations. In addition, we are committed to meeting the demand associated with development of social infrastructure, including Internet communication, transportation, construction, and civil engineering. To support Japanese companies expanding abroad, we will strengthen initiatives to help their main factories and R&D centers in Japan, while enhancing the track record of our services.
- To address environmental issues at the global level (decarbonization and reduction of disposable plastics), we aim to contribute to society through our customer production sites and their products, as well as in our business activities. Although a trend to reduce plastics is observed, the Group will take proactive measures as a leading company based on the achievements, knowledge, and expertise accumulated since our foundation. In particular, we believe that the fields of energy conservation, bioplastics, and recycling can be business opportunities for the Company.
（2）中期経営計画
1）Medium-term Management Policy
- Aiming to be a “top-tier company” needed by society -
“To organize stronger business entity”
①Strengthening ESG management practices
- Contributing to environment and society
- Achieving highly transparent governance
- Initiatives for sustainability
- Consideration for all stakeholders (shareholders, employees, customers, suppliers, financial institutions, national and local governments, and local communities)
② Establishing a highly profitable structure with a small number of highly-talented employees (for steady and sustainable growth)
- Investing in human resources and education (human capital investment)
- Investing in automation, labor savings, and systematization
- Investing in R&D and technological enhancement
- Investing in business field expansion (including M&A)
- Investing in factory renewal, capacity enhancement, and improved efficiency
- Stably securing net income of 1 billion yen or more, ROE of 8% or more, DOE of 2.5% or more
2）Outline of our medium-term management strategy
①Strengthening business expansion in new markets and growth fields (Initiatives to meet expanding customer needs and growth fields)
- Further enhancing information collection, research, analysis (marketing), development, and promotion efforts by concentrating the collective strengths of the Group
- Response to new technologies and functionalities as CASE advances in the automobile industry
- Continuous sales and promotion in the lithium-ion battery market
- Promotion of development related to all-solid-state batteries and data collection of market trends toward the commercialization
- Continuously supporting world-class new technologies and standards, such as AI, IoT, and 5G
- Expanding sales in the optical components industry, including lenses (further improving technological development capabilities and quality)
- Developing specific uses and strengthening sales capabilities for the industries (food, medical and new materials) other than the plastic industry, centered on Super Mixer
- Supporting new environmentally friendly materials, composite, and recycled materials
- Promoting and strengthening technical support for communication and industry standards
- Strengthening initiatives to help main factories and R&D centers in Japan, while enhancing the track record of our services
② Sales expansion and profitability improvement in existing markets and fields (Initiatives to retain customers and expand our market in existing markets and fields)
- Increasing market share for standard equipment (dryer, mixer, temperature controller, chiller and granulator) in the entire Kawata Group
- Strengthening and promoting support to system projects for extrusion molding field in the entire Kawata Group
- Development to strengthen our product lineup that meets needs specific to each community or field
- Improving sales and raising profitability by increasing our product lineup
- Active proposal toward realization of energy, labor and resource savings
- Creating highly competitive products by continuously strengthening Q.C.D. (Quality, Cost, Delivery)
- Sharing design, manufacturing, sales, and service information among Group companies, implementing regional and company-specific missions, and establishing mutual support and cooperation systems
- Expanding sales and enhancing service structure focusing on automobile, automobile parts, high-tech, and medical industries through US-Mexico collaboration in North and Central America
- Improving customer satisfaction through proposal-based sales, technological enhancement, and services (both pre-sale and after-sale services)
③Enhancement of management foundation (Initiatives to enhance management foundation for sustainability growth)
- Achieving highly transparent corporate governance
- Practicing honest corporate activities based on thorough awareness of compliance
- Strengthening and promoting risk management and BCP
- Securing excellent human resources and appropriate personnel, and enhancing education and training systems and development policies
- Education and human resource development by utilizing the Kawata Technical Center
- Strengthening diversity initiatives
- Commitment to an in-house environmental improvement policy and improvement in workplace environment
- Strategically investing to facilitate business expansion (including M&A)
- Engaging in continuous R&D, technological improvement, and human resource development
- Enhancing sales, marketing, service, design, manufacturing, and technology and product development in cooperation with each company of the Group
- Establishing systems and operations for global human resources development and strengthening personnel exchanges among the Group companies
- Continuously reviewing and restructuring production, sales, and service bases and facilities for sales promotion, technological improvement, and human resource development
（3）2023年度中期経営目標数値
2023年度 中期経営目標数値
| March 2024 | March 2025 | 2026年3月期 | ||||
| Million yen | Sales ratio | Million yen | Sales ratio | Million yen | Sales ratio | |
|---|---|---|---|---|---|---|
| Sales | 24,200百万円 | 100.0% | 24,800百万円 | 100.0% | 25,700百万円 | 100.0% |
| 営業利益 | 1,280百万円 | 5.3% | 1,340百万円 | 5.4% | 1,580百万円 | 6.1% |
| Ordinary profit | 1,250百万円 | 5.2% | 1,310百万円 | 5.3% | 1,550百万円 | 6.0% |
| Net income | 930百万円 | 3.8% | 970百万円 | 3.9% | 1,150百万円 | 4.5% |
売上高、利益目標（2023年5月現在）
