Medium-term management strategies
Ozu Group Medium-term Management Plan 2021
“Recognizing that tradition is a history of continuous innovation, we present new added value that puts the customer’s satisfaction and happiness first, and contribute to the enrichment of people’s lives and culture”—toward upholding this Ozu philosophy and striving for continuous growth and the medium- to long-term enhancement of the value of the Ozu Group, we refrain from being satisfied with the status quo, but instead work as one across the Ozu Group to continue our creative efforts and cultivate new businesses and new products. With an eye to building on our past performance in steady management, strengthening our management foundation, and aiming for the next stage of growth, we have formulated a medium-term management plan covering the three-year period starting in June 2018.
The plan sets forth the three basic policies given below.
- Expand manufacturer and trader functions
- Pursue group synergy
- Promote global expansion
Strengthen and expand nonwovens processing functions
We will seek to strengthen and expand our manufacturing functions for products with high added value incorporating user needs through the construction of a new plant and the introduction of machinery primarily at the consolidated subsidiaries Dipro Co., Ltd. and Ozu Techno Co., Ltd. The new plant at Dipro Co., Ltd. scheduled for completion in October 2019 is designed to accommodate diversifying user needs with a clean room for manufacturing cosmetics and quasi-drugs, and an explosion-proof area. The aim is to further improve our functions as trading company that not only sells nonwovens but also processes them to create new added value. We are considering M&A as a means to this end.
Expand business fields through industry-academia-government collaboration
We will expand the businesses of the decontamination cloth Godairiki, the outcome of joint research with the University of Tokyo released in December 2015; and sterilization agents, namely peracetic acid solutions for food surface sterilization and sanitation applications, which we are promoting through the new company jointly established with Enviro Tech Chemical Services, Inc. (US) and the National Federation of Agricultural Cooperative Associations (Zen-noh) in March 2017. To this end, we will promote organizational reforms and further joint research with universities with the aim of application to other fields.
Bolster management foundation
Azfit Co., Ltd. engages in the household papers and daily sundries business, Nippon Plant Seeder Co., Ltd. in the manufacturing and sales of seeder tape and equipment for vegetables and flowering plants, Ozu Techno Co., Ltd. in the processing of nonwoven and paper products, and Dipro Co., Ltd. in the manufacturing and processing of wet products. By sharing the assets—products, customers, and suppliers—of Ozu Group companies centering on these four majors, we will aim to strengthen collaboration and maximize synergy within the Ozu Group. In order to ensure profits amid the harsh business environment of household papers and daily sundries, we will continue efforts to reduce costs. And to respond to rising logistics costs, we will seek to improve distribution and delivery efficiency and strengthen our logistics functions, including through collaboration with other companies, as well as reallocate management resources.
Promote global expansion
Through efforts led by our Overseas Division, Chinese subsidiary Ozu (Shanghai) Trading Co., Ltd., and Thai subsidiary Ozu (Thailand) Co., Ltd., we will aim for further overseas business expansion, centering on Asia, in our mainstay of the electronics field and in the field of cosmetics showing significant growth in recent years.
Promote work style reforms
From the areas of work style reforms in demand by society, we will select areas relevant to the circumstances in the Ozu Group and promote the creation of ever more comfortable workplace environments.
The plan sets net sales, operating income, and investment targets based on these strategies. The targets for the year ending May 2021 are net sales of 44,000 million yen (10% increase over the year ended May 2018) and an operating income of 900 million yen (14% increase). As a medium- to long-term growth strategy of the Ozu Group, we are working on capital investment in nonwovens processing. During the three-year period from the year ended May 2019 to the year ending May 2021, the plan sets a capital investment target of 3,200 million yen (2,800 million yen for the new plant at Dipro Co., Ltd., and 400 million yen for machinery and systems at other group companies), with a cash flow target (net income attributable to shareholders of parent company + depreciation costs) of 2,600 million yen.