New Three-Year Corporate Business Plan. W-Win PLAN. (Fiscal Years ) March 2007(amended in May 2007) KOEI CHEMICAL COMPANY, LIMITED

Transcription

1 New Three-Year Corporate Business Plan W-Win PLAN (Fiscal Years ) March 2007(amended in May 2007) 1

2 Contents Review of current Three-Year Plan (FY ) New Three-Year Corporate Business Plan (FY ) Road to Excellent Company Basic Objective Basic Concept Keys to achieve Sustainable Growth and Structural Reforms at the same time Core Technology * Link to technology!ndex 2007 Performance Targets Reference Index Chart 1 (Sales and Ordinary Income) Index Chart 2 (Assets, Inventories and ROA) Activities under current Three-Year Plan (FY ) p3 p4 p5 p6 p7 p8 p9 p10 p11 p12~p18 2

3 Review of current Business Plan (FY ) Achieved major objectives, despite adverse business environment such as soaring raw material cost (Consolidated) FY 2006 Targets FY 2006 Actuals Sales 24.0 Billion Yen 23.8 Billion Yen Sales of New Products 3.0 Billion Yen 2.7 Billion Yen Ordinary Income 1.4 Billion Yen 1.3 Billion Yen Cost Reduction 3.0 Billion Yen 3.7 Billion Yen 3

4 Road to Excellent Company Restructuring Plan (FY 2001~ FY 2003) ~Period of Hardship and Restructuring~ Three-Year Corporate Business Plan (FY 2004~ FY 2006) ~Period of laying ground for Sustainable Growth~ Ordinary Company New Three-Year Corporate Business Plan (FY 2007~ FY 2009) ~Period of quantum leap through Simultaneous Achievement of Sustainable Growth and Structural Reforms ~ Excellent Company 4

5 Basic Objective of New Three-Year Corporate Plan (FY ) W-Win PLAN Sustainable Growth Structural Reforms + Customer Satisfaction Employee Satisfaction Be a reputable High Value-Added Company Rebirth of 5

6 Give Birth to New Chemicals for Tomorrow Via Reliable Core Technology winning Customer Confidence Robust Corporate Culture Always to honor our commitments Win Customer Confidence Teamwork to best serve customers Products, Human and Dreams created by Delightful Chemistry to preserve long accumulated Core Technology Base, and to expand into New Core Technology Expand Core Technology to supply new high value added products meeting customer requirements Create New Products Quick, Flexible and Integrated response to customer requests Sensitive to customer needs, with a view to enhance customer satisfaction Customer Oriented People 6

7 Keys to Achieve both Sustainable Growth and Structural Reforms Proprietary Technology accumulated as the Best Solution Provider of Nitrogen containing Compounds Establish New Core Technology and develop New Markets Integrate into Chiba Site, Production and R&D functions at Osaka site Enhance Productivity by 30% through Production Innovation Robust Corporate Culture, with top priority on Customer Satisfaction 7

8 New Core Technology Derived from Solution Provider of Nitrogen Compounds toward Hybrid Chemical Manufacturer Development of New Core Technology based on our 90 years experience of Organic Synthesis Technology * Link to technology!ndex

9 Performance Targets of New Three-Year Corporate Business Plan (Consolidated) FY 2007 FY 2008 FY 2009 Sales 25.6 Billion Yen 26.7 Billion Yen 28.0 Billion Yen Sales of New Products Ordinary Income 4.0 Billion Yen 4.7 Billion Yen 5.7 Billion Yen 1.4 Billion Yen 1.5 Billion Yen 2.3 Billion Yen ROA 6% 7% 10% ROE 6% 6% 7% Inventories 2.3 months of sales 2.1 months of sales 1.9 months of sales 9

10 Index Chart 1(Sales Ordinary Income) (Sales:Billion Yen) (Ordinary Income:Billion Yen) 年 2008 年 2009 年 existing products new products Ordinary Income 10

11 Index Chart 2 (Assets, Inventory, ROA) (Billion yen) (%) 年 年 年 Gross asset Inventory Debt with interest Return on asset (%) 11

12 Summary of Project N (FY 2004~ FY 2006) Implementing Improvements continually Cost Reduction Targets and Actuals for each year (million Yen) 1. Productivity Improvements Applying Toyota Production System to a Chemical Company ~Kick-off of Production Reform~ 2. Energy Conservation Measures Introducing Cogeneration Unit and Package Boilers, Upgrade Distillation System, Streamlining of Process for Man-power Savings 3. Koei s Expertise and Proprietary Technology to be handed down to the next generation 2004 Goal 2005 Result 2006 Compiling a database of expertise and technology Technology Dojo (training sessions of technology) Learn from Mistakes session 12

13 Summary of Project A, Group a (FY 2004~ FY 2006) Items of Cost Reduction Cumulative Cost Reduction ( Million Yen) Export Logistics 1.Ocean Freight and Marine Insurance Koei started to arrange for ocean freight and marine insurance on its own. 2. FOB Charges Streamlining of Inspection and Inland Freight etc. 300 Rationalization related to Sales Integration of Warehouses (outside plant), Implementation of Direct Trade etc. 285 Total

14 Summary of Project A, Group b (FY 2004~ FY 2006) Amount of Total Cost Cost Cumulative Cost Reduction Reduction Target 2004 Actual 2005 Actual 2006 Actual (Unit: Million yen) Amount Rate Amount Rate Amount Rate Amount Rate Inland Transportation and Warehousing Charges % 45 9% 75 14% 91 18% Handling Charges within Production Site % 35 12% 50 17% 64 21% Total % 80 10% % % Main Items of Cost Reduction 1. Inland Transportation Charges 2. Warehousing Charges 3. Reduction of Drum Inventory 4. Disposal Cost of Used Drums 14

15 Summary of Project B (FY 2004~ FY 2006) Integrate Production into Chiba Site, Shifting Production at Osaka site to Chiba site, to achieve integrated and efficient production Start-up of New Launching Unit in Chiba (July,2006) Integrate Headquarter Functions into Tokyo office, from Osaka to better support Production, Marketing and Research and Development activities. 15

16 Summary of Project C (FY 2004~ FY 2006) Establish Business Model conducive to Inventory Reduction, for improving Asset Utilization Inventory as of financial year end (Billion Yen) 16

17 Summary of Project D (FY 2004~ FY 2006) Current Core Technology New Core Technology (Under Development) New Core Technology (Mid-and-Long Term) Vapor Phase Vapor Phase Reaction Next Generation of Vapor Phase Reaction Vapor Phase Reaction under High pressure (catalysts and process development) Liquid Phase Functional Materials Catalytic Hydrogenation under High pressure, Syntheses of Nitrogen Compounds Utilization of Formaldehyde and Acetaldehyde Organometallics, Cross-Coupling Reaction Advanced Purification Technique, Cross-Coupling Reaction, Suspension-Polymerization Research and Development Division General Manager Oxidation, Asymmetric Synthesis, Cryogenic Reaction, High Pressure Catalytic Hydrogenation under Acidic Conditions Oraganometallic Compound Syntheses and Purification General Structure of Metallocene Compound (Example of Organometallics) M: Ti, Zr, Hf X : Cl etc. Research Laboratory Development Office Organization of Research and Development Division as of April,

18 Summary of Project E ( FY 2004 ~ FY 2006 ) ~ Approaches to enhance spirit of commitment ~ KAIZEN (Innovation) Contest Quarterly Publication of Progress of Three-Year Corporate Business Plan, Action Agenda Card and Posters 18

19 Cautionary Statement Statements made in this document with respect to the Koei Chemical s current plans, estimates, strategies and beliefs that are not historical facts are forward-looking statements about the future performance of Koei Chemical. These statements are based on management s assumptions and beliefs in light of the information currently available to it, and involve risks and uncertainties. The important factors that could cause actual results to differ materially from those discussed in the forward-looking statements include, but are not limited to, general economic conditions in Koei Chemical s markets; demand for, and competitive pricing pressure on, Koei Chemical s products in the marketplace; Koei Chemical s ability to continue to win acceptance for its products in these highly competitive markets; and movements of currency exchange rates. 19