The Mitsubishi Rayon Group has drawn up its latest medium-term
management plan, covering the period FY2005-2007, which it has dubbed
US→2007. Building on the Group’s achievements under its previous
medium-term plan (US→2004), which covered the period FY2002-2004 and
whose focus was the growth of the Group’s operational scale, the
new plan focuses on ensuring the long-term continuance of this growth
through the rigorous application of the principle of focusing expansion
efforts on areas of core competence.
Specifically, under the plan, we aim to register annual sales of ¥500
billion by the year 2010, while simultaneously becoming the sort of corporate
group that can achieve both expansion of scale and a high level of earnings.
As an indicator of our progress along this route, we are aiming at sales
of ¥400 billion in FY2007 — the final year of the three-year plan
— and a ratio of operating income to sales of 10%. |
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| I. An Outline of the FY2005-2007 Plan |
Our previous three-year plan was dominated by the twin
concepts of “selection and focus,” i.e., of deciding which
businesses were most promising as our areas of core competence, and focusing
management resources on them while withdrawing from areas deemed unlikely
to be profitable. We have done virtually all we can in this respect,
and have made sufficient investment, in our view, to guarantee growth
from here on.
Henceforward, we aim both to bring our newly
constructed plants to profitability and to invest management resources
even more intensively into the acrylic business, which we have positioned
as our prime area of core competence. In this way, we will refine our
business portfolio management to produce an operational structure that
is leaner and stronger.
Among management issues that remain
to be fully addressed is the need for continued reorganization to scale
down or withdraw from operations whose potential for growth is poor and
whose profitability is unacceptably low. |
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| (1) Reinforcement of operations in acrylic business
complex — the MMA (methyl methacrylate) and AN (acrylonitrile)
businesses |
| a. |
Expansion and strengthening of MMA
business complex
In the operations of our MMA business complex (monomer, polymers,
copolymers, optical technology materials) we will seek improved
economies of scale and synergistic effects from the expansion of
the spheres of application of our products. In this way, we will
strengthen our market position with the goal of becoming the world’s
leading MMA supply chain in terms of both operational scale and
profitability.
We will use the whole range of available
means to expand the scale of our operations and reap the consequent
cost benefits, including investment in plant and equipment, and
the use of mergers and acquisitions as well as looser forms of
business alliance.
Regarding the economic benefits to
be gained from widening the scope of application of our products,
the main thrust of our efforts involves expanding the range of
applications for our high-performance specialized products derived
from our solid base in acrylics. This initiative involves discovering
and popularizing new applications for our products in the area
of information technology, particularly image display materials,
as well as developing and finding markets for new functional chemicals.
|
| b. |
Raising profitability of AN business
complex
With regard to the acrylic fibers business within the AN business
complex, we will devote more effort and resources to selling raw
fiber in overseas growth markets, and will take radical measures
to turn around low-profit group companies and bring their earning
power up the level demanded of core business enterprises.
With
regard to the other main aspect of our AN business complex —
the carbon fibers and composite materials business — we intend
to establish a unique carbon fiber and composite materials business,
thus creating a concrete manifestation of our strategy of optimally
utilizing our strengths in the supply of precursors and in product
development. |
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|
|
| (2) Ongoing initiatives aimed
at strengthening competitiveness |
|
| Our main efforts to improve competitiveness
consist of introducing more advanced production technology and
redesigning our production systems for greater efficiency, as well
as the rigorous application of business process reengineering to
our product lineup and inventory management. We project cost savings
amounting to ¥10 billion over the next three years through the
implementation of a rationalization program. |
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|
|
| (3) Establishment of new businesses |
|
| To ensure its continued growth and
prosperity over the long term, the Mitsubishi Rayon Group must
create a new core business to take over from the acrylic business
complexes. We are therefore making continuous efforts to establish
promising new areas of business. Among good future prospects are
the Company’s world-class biological catalyst technology
and our optical technology product design and polymer precision
design technologies. These are candidates for next-generation core
businesses that could become commercially viable in the period
2010-2015. |
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|
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| II. Management Targets for 2010 |
Through strategic investment in our
core acrylic business complex, as well as unceasing efforts to
devise and implement still more effective business models, the
Mitsubishi Rayon Group plans to securely transform itself into
a corporate group characterized by a high earnings rate and continuous
growth.
Particularly with respect to the MMA supply chain, we have good hopes of becoming the world’s leading group in terms of both scale of operations and profitability by the year 2010. If all goes according to schedule, by that year we should have attained annual sales of ¥500 billion and a ratio of operating income to sales of 10%. |
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| III. Numerical Targets under the US → 2007 |
|
Numerical targets by business segment
(billions of yen) |
| |
FY2004 (est.) |
FY2007 |
FY2010 |
| Sales |
330 |
400 |
500 |
| Chemicals & Plastics |
| Fibers |
| Specialty Products & Engineering |
|
|
|
|
| Operating income |
30 |
40 |
50 |
| Chemicals & Plastics |
| Fibers |
| Specialty Products & Engineering |
|
|
|
|
| Capital investment (3-year aggregate) |
64.2 |
65 |
|
| Depreciation (3-year aggregate) |
46.6 |
55 |
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| Note: With effect from FY2005, the Information Materials
business was transferred from the Specialty Products & Engineering
segment to the Chemicals & Plastics segment. The targets for FY2007
were made after this transference. |
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