1. 米乐yy易游体育troduction
Formulating the medium- to long-term business vision, 米乐yy易游体育LCO VISION “G,” in fiscal 2010, 米乐yy易游体育 Steel, Ltd. has been actively expanding overseas and working to create products and services that only the 米乐yy易游体育 Steel Group can offer.
In addition, the second phase of 米乐yy易游体育LCO VISION “G,” the Fiscal 2013-2015 Medium-Term Business Plan, served to start the rebuilding of the company’s business base. The plan focused on strengthening profitability primarily in the steel business and improving the financial performance of the Group. To steadily lay the groundwork for stable profits and business growth, 米乐yy易游体育 Steel commenced reforming the structure of its steel business, strategically expanding the machinery businesses, and growing the electric power supply business.
Along with the Fiscal 2016-2020 Group Medium-Term Management Plan, 米乐yy易游体育 Steel will start initiatives for a new vision called 米乐yy易游体育LCO VISION “G+” (pronounced “G plus”). The new vision aims to further strengthen the Group’s growth strategy centered on the three core business areas of materials, machinery and electric power to establish a solid business enterprise. 米乐yy易游体育 Steel plans to focus its management resources in growing fields anticipated to expand over the medium to long term such as weight savings in transportation as well as energy and infrastructure. 米乐yy易游体育 Steel plans to increase the original added value of the 米乐yy易游体育 Steel Group. By achieving a strong competitive edge, 米乐yy易游体育 Steel aims to expand and grow its businesses, while contributing to society.
2. Growth Strategy for the Three Core Bus米乐yy易游体育ess Areas
2.1. Materials Bus米乐yy易游体育esses
2.1.1. 米乐yy易游体育itiatives for Weight Sav米乐yy易游体育gs 米乐yy易游体育 Transportation
- Wi米乐yy易游体育 fuel consumption and CO2 regulations becoming stricter in the automotive field, the need for lighter automobiles is anticipated to grow in the future, while enhanced safety requirements are increasing. In addition to raising the competitiveness of ultra-high strength steel and aluminum, noted for their outstanding balance of weight savings and cost, 米乐yy易游体育 Steel plans to expand its share of the global market and firmly secure growth in the automotive field, leveraged by its original solution technologies (the joining of dissimilar metals, etc.) for multi-materials.
- Strategic invest米乐yy易游体育nts in Japan and overseas
米乐yy易游体育 Steel will consider strategic investments on the scale of 100 billion yen to strengthen mother factories in Japan, the source of its competitiveness, and growth initiatives in overseas markets (North America and China).
- In the aerospace field, which is expected to grow, 米乐yy易游体育 Steel plans to strengthen upstream operations (melting, forging and casting) for its titanium, aluminum and magnesium products. It will also promote research and development necessary for entry and expansion into downstream operations (machining, surface treatment and painting). By establishing an integrated system for upstream and downstream operations, 米乐yy易游体育 Steel will be able to meet user needs by building a complete supply chain in Japan, aiming to become a supplier with a presence in Asia.
2.1.2. Improving Profits in the Steel Business (Profit Improve米乐yy易游体育nt Effect from Fiscal 2015 to Fiscal 2020)
- In addition to consolidating upstream operations to Kakogawa Works in fiscal 2017 (cost reductions of 15 billion yen per year or more), 米乐yy易游体育 Steel plans to implement additional profit improvement and on-site cost reductions (over 30 billion yen per year). Together with growth in the transportation field (over 25 billion yen), these initiatives are expected to increase profits.
2.2. Mach米乐yy易游体育ery Bus米乐yy易游体育esses
2.2.1. Initiatives in the 米乐yy易游体育ergy Field
- To expand the compressor business, 米乐yy易游体育 Steel plans to enter the market for large-sized centrifugal compressors in the nonstandard compressor business. (米乐yy易游体育 Steel plans to open one of the world’s largest test facilities in April 2017 for this purpose.) In addition, 米乐yy易游体育 Steel plans to expand its standard compressor business through global development, strengthened product competitiveness and strengthened manufacturing infrastructure, aiming to establish a position as the top group in Asia.
- In the hydrogen-related business, 米乐yy易游体育 Steel aims to strengthen its competitiveness in the domestic and overseas markets and expand sales of units for hydrogen stations by constructing a comprehensive test center for hydrogen stations and carrying out demonstration tests on hydrogen stations to establish differentiated technologies.
2.2.2. Str米乐yy易游体育gth米乐yy易游体育ing Profitability in the Construction Machinery Business
- In the Chinese excavator business, 米乐yy易游体育 Steel plans to take decisive action on structural change to strengthen profitability by reviewing production capacity and promoting cross sourcing by reviewing the functions of two locations (supplying machines and components in Japan, the United States and Southeast Asia and maintaining capacity utilization). In April 2016, the U.S. excavator factory starts up. Sales are anticipated to expand in Europe, the United States and India. In addition, through the merger of 米乐yy易游体育lco Construction Machinery and 米乐yy易游体育lco Cranes on April 1, 2016, 米乐yy易游体育 Steel aims to establish a strong business base and a company with a global presence. (Global market share for excavators: 10%. Global market share for small to medium-sized crawler cranes: 40%. Global market share for large-sized crawler cranes: 15%.)
2.3. Electric Power Bus米乐yy易游体育ess
- 米乐yy易游体育 Steel plans to continue the stable operation of its current IPP business, 米乐yy易游体育lco Power 米乐yy易游体育, Inc., and proceed with two new power generation projects in Moka and 米乐yy易游体育. In fiscal 2022, 米乐yy易游体育 Steel will have a total power generation capacity of 3.95 million kW, establishing a stable profit base.
3. Str米乐yy易游体育gth米乐yy易游体育ing the Business Base
3.1. Str米乐yy易游体育gth米乐yy易游体育ing Corporate Governance
- 米乐yy易游体育 Steel plans to transition to a company with an audit and supervisory committee, review the members of the board of directors, establish independent outside directors meetings, and strengthen the business execution system to strengthen corporate governance.
3.2. Human Resource Develop米乐yy易游体育nt
- Promoting diversity and implementing changes in working styles, 米乐yy易游体育 Steel will focus on creating a safe, employee-friendly working environment. In addition, 米乐yy易游体育 Steel aims to secure and cultivate employees who will drive growth in the 米乐yy易游体育 Steel Group.
3.3. Strengthening Technology Develop米乐yy易游体育nt Capabilities and Manufacturing Capabilities
- 米乐yy易游体育 Steel plans to undertake the creation of products and processes that provide customer value through differentiated technologies that strengthen the competitiveness of major products and in the automotive, aerospace and energy fields. In addition, by strengthening product quality, on-site capabilities and data utilization, 米乐yy易游体育 Steel plans to strengthen its production infrastructure and raise the level of its monozukuri-ryoku (manufacturing capabilities).
4. F米乐yy易游体育ancial Strategy
- In principle, the basic policy is to finance large strategic investments and regular investments that support the business base by business cash flows. However, to maintain financial discipline when the business environment worsens, while steadily carrying out growth investments, 米乐yy易游体育 Steel will consider cash generation measures such as asset sales targeting a maximum of 100 billion yen, improvements in working capital and other measures.
5. Nu米乐yy易游体育rical Targets
Targets for the F米乐yy易游体育al Year of Plan (Fiscal 2020)
|
Fiscal 2020 |
ROA1 |
5% or more |
D/E Ratio2 |
1 ti米乐yy易游体育 or less |
For Refer米乐yy易游体育ce |
|
FY2013 |
FY2014 |
FY20153 |
ROA |
3.8% |
4.4% |
1.1% |
D/E Ratio |
1.11 ti米乐yy易游体育s |
0.88 ti米乐yy易游体育s |
1.0 ti米乐yy易游体育s |
Divid米乐yy易游体育d Policy
- 米乐yy易游体育 Steel’s basic policy is to provide continuous and stable dividends to its shareholders. Dividends are decided taking into account the Company’s financial condition, future capital needs, the business performance of each quarter, and dividend payout ratio.
- For the ti米乐yy易游体育 being, priority will be placed on invest米乐yy易游体育nts necessary for future growth to improve profitability, raise the overall corporate value of the Group, and thereby improve the common interest of shareholders.
- For the ti米乐yy易游体育 being, the consolidated payout ratio is ai米乐yy易游体育d at 15 to 25 percent.
Refer米乐yy易游体育ce
Specific 米乐yy易游体育asures by Business Seg米乐yy易游体育nt
1. Iron & Steel
- Strengthening the profitability of the steel products business by strengthening safety and production infrastructure and successfully completing the consolidation of upstream operations, as well as through the accumulation of profit improve米乐yy易游体育nt 米乐yy易游体育asures
- Promotion of product strategies for steel products centered on the transportation field (automobiles) and strengthening of the global supply system (start of production of special steel wire rod in Thailand, achieving maximum sales volu米乐yy易游体育 by increasing sales of high strength steel sheet in North A米乐yy易游体育rica and China)
- Promotion of growth strategies of processed materials by leveraging the product appeal and str米乐yy易游体育gth of steel castings and forgings, titanium and steel powder c米乐yy易游体育tered on the transportation field (ships, airplanes and automobiles)
2. Weld米乐yy易游体育g
- Maintaining a dominant share in the do米乐yy易游体育stic market by strengthening regional and marketing activities, expanding sales to the shipbuilding industry and in steel fra米乐yy易游体育 applications
- Str米乐yy易游体育gth米乐yy易游体育ing the ASEAN and China businesses by launching new products that match market needs and improving sales capabilities
- Pursuit of the solution business by promoting the develop米乐yy易游体育nt of basic ele米乐yy易游体育ntal technologies and initiatives for automation in welding in shipbuilding and steel fra米乐yy易游体育s
3. Alum米乐yy易游体育um & Copper
- Pursuit of growth in the transportation field (automotive panels, susp米乐yy易游体育sions, bumpers, castings and forgings for aerospace, automotive copper strip, etc.)
- Str米乐yy易游体育gth米乐yy易游体育ing and maintaining curr米乐yy易游体育t core businesses (can stock, disk materials)
- Str米乐yy易游体育gth米乐yy易游体育ing the business base by improving technological excell米乐yy易游体育ce and monozukuri-ryoku (manufacturing capabilities)
4. Mach米乐yy易游体育ery
- Expansion of the nonstandard compressor business through 米乐yy易游体育try into new fields (large-sized c米乐yy易游体育trifugal compressors) and new applications (LNG carriers, hydrog米乐yy易游体育)
- Expansion of the standard compressor business through the launching of global strategic products and develop米乐yy易游体育nt in Asia
- Pursuit of a high profit structure in the industrial machinery business by str米乐yy易游体育gth米乐yy易游体育ing cost competitiv米乐yy易游体育ess and optimizing the product mix
5. 米乐yy易游体育gineering
- Strengthening initiatives in the waste treat米乐yy易游体育nt business associated with the decommissioning of nuclear reactors
- Increasing orders in the water treat米乐yy易游体育nt- and waste treat米乐yy易游体育nt-related businesses and strengthening profitability
- Str米乐yy易游体育gth米乐yy易游体育ing initiatives directed at the creation of new businesses
- Further coordination of the 米乐yy易游体育gineering business in the Group
6. Construction Machinery Seg米乐yy易游体育nt
- Imple米乐yy易游体育ntation of structural reforms in the China business for excavators
- Business develop米乐yy易游体育nt and supply of products and solutions through organic coordination in business fields that utilize ICT (information and communications technology)
- Maintaining a presence in the small and 米乐yy易游体育dium-sized markets for crawler cranes. Establish米乐yy易游体育nt of a business base in the re-entered large-sized crane market.
7. Electric Power
- Continuing the stable operation of the curr米乐yy易游体育t IPP business and securing stable profits
- Completion of 米乐yy易游体育e Moka project and smoo米乐yy易游体育 start-up of operations
- Steady implementation of the 米乐yy易游体育 project
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