Outline of "G-21" #2
3. Capital Investment
- Total of capital investment for 5 years : ¥150 billion. Sixty-five percent were invested in new business and additions to existing businesses (of which 85% were invested in strategic areas).
Main new and additional investments : Vinyl-acetate, Poval, PVA films for LCDs, EVAL for Europe and US markets, KURALON K-Ⅱ, thermoplastic elastomers both in Japan and abroad, environment-related businesses (PVA gel, activated carbon), electronic information technology area (capacitor materials, PA9T, PTV screens), and medical business areas (dental materials). - Besides capital investment, we will conduct M&A for projects that have synegetic effects in business.
4. Growth Image
| FY2000 | FY2003 | FY2005 | Relative to FY2000 | |
|---|---|---|---|---|
| Net Sales | 325 | 375 | 460 | +135 |
| Op. income | 22 | 30 | 44 | +22 |
Unit : Billions of yen
‹Precondition› Exchange rate: 1US$ = ¥105, 1 euro = ¥102, Crude oil: 1 barrel = 23US$
5. Business Portfolio
Position the core business and strategic business areas together as focus business and aim for their expansion
(the overlap in business areas are deducted)
| FY2000 | FY2003 | FY2005 | Relative to FY2000 | ||
|---|---|---|---|---|---|
| Focus Business | Strategic | 90 | 130 | 180 | +90 |
| Others | 75 | 85 | 120 | +45 | |
| Sub Total | 165 | 215 | 300 | +135 | |
| Others | 160 | 160 | 160 | 0 | |
| Total | 325 | 375 | 460 | +135 | |
Unit : Billions of yen
6. Improving Asset Efficiency
| March 2000 | March 2006 | Increase/Decrease | |
|---|---|---|---|
| Notes and Accounts Receivable | 90 | 130 | +40 |
| Inventory | 75 | 77 | +2 |
| Tangible Fixed Assets | 128 | 170 | +42 |
| Financial Assets | 183 | 177 | -6 |
| Others | 28 | 30 | +2 |
| Total Assets | 504 | 584 | +80 |
Unit : Billions of yen
Especially, the inventory has been compresses from the present 2.8 months to 2 months.
(The financial assets remain stable; however, it may be reduced due to funding for M&A.)
7. Goal for ROA (Return on Assets) : ≧ 7% in FY2005
8. Cost of Research and Development : total for 5 years 75 billion yen(4% of net sales)
9. Medium-Term Plans for Environment
Below are the goals for reduction for the group as a whole (18 companies in Japan), and we will put our efforts into achieving them.
Goal for FY2005 (relative to FY1999)
(a) 90% reduction in emission of toxic chemical substances
(b) 90% reduction in industrial waste processed by outside contractors
(c) 20 point increase (60% to 80%) in effective reuse of waste
(d) 1% annual increase in energy efficiency
10. Others
(a) A flat organization structure and highly devolved authorization and introduction of the company system (goal: within 2 years)
(b) Streamlining of the indirect business departments and establishment of the 'Kuraray Business Service Center'
(c) Promote use of e-commerce in procurement and sales operation
Forward-Looking Statements
This presentation contains various forward-looking statements which are based on the current expectations and assumptions of future events. All figures and statements with respect to the future performance, projections and business plans of Kuraray and its group companies constitute forward-looking statements. Although Kuraray believes that its expectations and assumptions are reasonable, actual results and trends of Kuraray's performance could differ materially from those expressed or implied by such figures or statements due to risks and uncertainties in the future business circumstances. The factors which may cause such difference include, without limitation: (1)general market and economic conditions in Asia including Japan, the U.S., Europe and other regions; (2)fluctuations of currency exchange rates, especially between the Japanese yen and the U.S. dollar and other foreign currencies; (3)changes in raw material and fuel costs; (4)industrial competition and price fluctuations in Japan and international market; (5)advance or delay in the construction of new plants and production lines; (6)successful development of new products and technologies; and (7)changes in laws and regulations (including tax and environmental) and legal proceedings.