Inauguration as new president:
Establishing a business structure that brings steady profits in growing fields
President and Representative Director
I received the offer from new chairperson Naoki Tamura (former president), who had assumed the responsibilities of top management as president for many years, and took office as president in April 2019. Although I am humbled by the vast responsibilities that await, I am ready to assume various tasks, underpinned by my knowledge of actual workplaces and a sense of balance that I have acquired over the years.
Establishment of New Medium-term Management Plan
I believe that the primary role of the new management system is to realize the “Company’s ideal future” towards the centennial anniversary in 2024. The scenario includes efforts to establish a solid management system by 2021 (the last year of the 12th Mediumterm Management Plan) so that in 2024, the centennial anniversary year, all the endeavors made until that time will be fully rewarded. We have set high targets, namely, to achieve an operating profit ratio of 10% or more and an ROE of 10% or more, both in fiscal year 2024, and will continue to strive toward this goal.
As the first step, “Biltrite Tamura GROWING ANEW” has been chosen as the slogan for the 12th Medium-term Management Plan. For this slogan,
hile inheriting “Biltrite,” a coined word meaning “to manufacture righteously,” as the Company’s tradition and “GROWING” that should result from it, we have added the word “ANEW” to show our resolve “to have a new start” with a “new system” in the new “Reiwa” era.
Specifically, we have identified the electrification of power train systems and AI & IoT-based automated driving technology in the automobile industry that is entering a time of revolution as well as next-generation communications technology as future growth industries. Accordingly, we have determined three fields, i.e., “in-vehicle products,” “power electronics,” and “IoT & next-generation communications,” as the Company’s strategic markets. We will work to establish a business structure that can bring steady profits in these markets for which solid growth can be expected.
As it can be easily imagined, for example, that automated driving technology will never be realized without next-generation communications technology such as 5G, it is predicted that mutual connections among all business fields will eventually increase. In our Company, we will also work on sharing best practices among different business units by removing walls between divisions and reinforcing horizontal onnections. While enhancing synergy effects, all members of the Tamura Group will make joint efforts as “One Tamura.”
As a Company that Responds to Society’s Expectations
In order to realize the “Company’s ideal future” in its centennial anniversary year, it is important for us to bring the Company’s growth strategies and the society’s expectations into line. As one of the foundations of our new Medium-term Management Plan, the Company has been utilizing SDGs (Sustainable Development Goals) that were adopted by the United Nations in 2015. Through widely spreading environmentally friendly products, we will strive to “resolve social issues through use of ecotechnology” in response to people’s expectations, thus contributing to the achievement of SDGs.
In the environmental aspect, while expanding our eco-friendly car products in the in-vehicle business as a cornerstone of our growth strategy, we will also focus our energies on current sensors that are used in products related to “energy saving/energy creation/energy storage” and large transformers that are used for the generation of renewable energy, such as wind power and water power
In the social aspect, as has been set forth in Goal 1 “No poverty” of SDGs, poverty eradication is an urgent social issue, and the largest contribution as a company to its resolution should be the promotion of employment. The Company also has plants in Myanmar, Bangladesh, and other countries, where we are promoting the employment of local engineers and managers in cooperation with universities and other educational institutions. It has always been the Company’s management policy to focus on local markets based on the principle of “local development & local consumption (local development & local approval).” In this regard, with the aim of increasing diversity in global management by a further step, we are training highly skilled local staff and gradually shifting responsibilities and authority to them,
eventually increasing the number of locally employed staff as members of the board and operating officers.
As chief operating officer, I will enforce speedy management toward the realization of the “Company’s ideal future in the centennial anniversary year,” and aim to achieve a V-shaped recovery in performance that stalled during the third year of the previous Medium-term Management Plan by pursuing efforts to create new strategic products and to continue embracing new challenges.
I believe my mission is to shape this globally operating Tamura Group into “One Tamura” both in name and in substance without going against the intent of the Company’s objetive. For this purpose, I will do my utmost to realize well-balanced operations by inheriting the good traditions of the Company that has over 90 years of history and by making the best use of experiences gained from many years of overseas assignment. In this regard, I would appreciate your candid opinion, guidance, and support.
Two-wheel Framework Towards the Centennial Anniversary
Pursuing management that integrates business and CSR
Chairperson and Representative Director
On April 1, 2019, a new president was appointed. Formerly president, I have assumed the position of chairperson and representative director and shall take charge of non-financial tasks, such as corporate governance, CSR, SDGs, and management quality, working toward the improvement of corporate value. New president Masahiro Asada shall be in charge of the Company’s entire business and its implementation, taking the helm of the Company’s future growth strategies. We would like to move forward in this two-wheel framework with company-united efforts towards the centennial anniversary that is approaching in five years.
Review of the 11th Medium-term Management
The last Medium-term Management Plan that was implemented under my leadership as president had shown a successful start in the first and second years of the three-year plan, hitting record-high profits. However, in FY2018, the last year of the plan, the Company was affected by the impact of the US-China trade conflict and China’s economic slowdown, which was greater than expected. Furthermore, because of deteriorated business climate where sales of the latest models of smartphones had leveled off because the business cycle had reached its peak and another negative factor of repair cost related to a quality roblem, operating profit eventually returned to the level of the year before the three-year plan
While we were successfully pursuing the improvement of profitability in those three years and in the process of establishing a business model to concentrate capital for high-value-added products, we failed to actually create strategic products that were less susceptible to the economic climate. This is a matter of regret with regard to the previous Medium-term Management Plan.
On the other hand, because our compensation claim for patent right infringement was finally accepted and we were able to post the settlement as a profit, the final profit for FY2018 was 6.3 billion Japanese yen, the highest ever. ROE also increased to a two-digit percentage, reaching 14.3%, and the Company could pay a dividend of 10 Japanese yen per share, realizing its long-cherished objective.
Concentration of Operating Capital on Growing Fields and Efforts to Overcome Weakness
For the past three years, we have concentrated on the in-vehicle business as a priority market. Under the circumstances where the trend has been shifting toward eco-cars, the Company’s boosting reactors for environmentally friendly vehicles have been gaining a high reputation in the market because of their performance and quality, and the business has recorded a substantial growth. However, due to the long development period required, the in-vehicle components were not yet strong enough to push up sales in the previous Medium-term Management Plan. Nevertheless,we were finally able to have a good prospect of high-volume production as mentioned in the 12th
Medium-term Management Plan and have decided to make an investment to expand/reinforce plant facilities in two domestic plants and in China.
With regard to overseas strategies in the electro-chemistry business, it was unfortunate that the Company did not have its own production plants in the ASEAN and European regions. To address this, the Company has acquired plants from an OEM partner company in Thailand and a local company in Germany through M&A and built a self-manufacturing system.
Promoting Business and Social Contribution in an Integrated Manner Based on SDGs
Even before the concept of CSR became substantially rooted in Japan, the Company upheld “social contribution through business” as its
anagement philosophy. We were among the earliest in this industry to sign the United Nations Global Compact. Further, under the new Medium-term Management Plan, the Company has been promoting
anagement by integrating business and CSR, utilizing SDGs as its basic concept. To my understanding, all 17 goals of SDGs are related to the Company’s activities in one way or another. Therefore, by actively reporting information about “Tamura is carrying out such an activity” and “Such an activity can contribute to SDGs” in reference to each goal, we have been making efforts so that every employee would become familiar with SDGs. For example, as part of workstyle reform, the Company has also introduced a telework system. Today, some employees are performing simulation analysis work remotely because of family reasons. This is an example case that can contribute to the achievement of SDGs’ Goal 8 “Decent Work and Economic Growth.”
Our aim is to combine the realization of a sustainable society and sustainable growth of the Company by promoting business and social contribution in an integrated manner based on SDGs. In FY2018, with the aim of increasing SDG awareness among employees, SDG badges were distributed. Our challenges, however, have just begun and we shall continue to work on raising awareness among employees
Your continued support is very much appreciated.