Midterm management plan
We have just publicized the Midterm Plan of the Fuji Oozx management, spanning the new three-year period from 2021 to 2023. I am pleased to introduce the summary of this Midterm Plan via website. Looking back at the previous three-year period from 2018 to 2020, we set two major targets ─ expanding the sales of automotive high-functionality engine valves and making large-scale investment in our overseas bases. During 2019, however, demand for engine valves came to suffer from a sharp drop worldwide, especially in China, which was compounded by the menace of coronavirus. As a result we were forced to shift our management priority to the enhancing of profitability and cash-flow, so that we were unable to attain the initial targets of the 2018-2020 Midterm Plan.
Nevertheless, we made a number of notable accomplishments in the previous three-year period ─ namely, developing some attractive high-functionality valves, receiving mass-production orders for these valves, appealing to a greater diversity of clients, and establishing a mutually complementary framework with our three overseas bases. These achievements are expected to strengthen our operation throughout the current three-year period.
While the growth strategy of the previous Midterm Plan depended heavily upon the projection that China’s automobile market would continue expanding, in preparing the current Midterm Plan we could not help but recognize the drastic change that was taking place in the global business environment including the Chinese market. Consequently, for more than half a year, we have discussed how to sustain the Company’s growth for the next 10 years through the utilization of return funds from investment projects, and finally we have arrived at the current Midterm Plan 2021-2023 as follows:
Point 1 in the Midterm Plan: We will consolidate our revenue bases to gain a greater amount of business profits and investment returns in the next several years when market demand and order reception are predicted to stay in the upward trend. This should enable us to better cope with the subsequent arrival of a difficult era characterized by market shrinkage and business reshuffle.
Point 2: We must utilize the funds from the increasing profits and returns of Point 1 for developing new business lines that will ensure the Company’s growth in the longer term. While many of our past attempts for business diversification were tied to the areas of engine related parts, the current Midterm Plan requires us to establish new business lines in much broader areas. This time, therefore, we look to M&A possibilities as well, not necessarily focusing on the use of our original human/technological resources and self-developed projects. This past April, therefore, we created a new section specializing in the development and/or acquisition of new business lines.
Point 3: It is related to the Environmental, Social, and Corporate Governance (ESG). Said differently, we intend to carry out the Points- 1 and -2 activities in such a way as to advance the Sustainable Development Goals (SDGs) at the same time. For example, regarding the increase of business profits mentioned in Point 1, we will try to cut down production costs and CO₂emissions simultaneously by shifting to solar power generation at all our plants in Japan and abroad. We will prioritize various cost-cutting investments from the standpoint of SDGs. Similarly, we intend to select new business lines that are friendlier to the principle of the SDGs.
Finally, we hope that our shareholders will show us the full understanding of the Midterm Plan 2021-2023 and will support us all through these three years and far beyond. Thank you very much.
