kuraray


News Releases 2001

The New Medium-Term Business Plan "G-21"
For "An Eco-Friendly Enterprise With Unique Technology"

Feb 15, 2001
Kuraray Co., Ltd

Our company has drawn up the New Medium-Term Business Plan that will be initiated in FY 2001 and last 5 years until FY2005.

Business Environment and Main Subjects

  • We have created the New Medium-Term Business Plans in the belief that, in this age, a business enterprise must fulfill the following conditions to survive the global competition and to keep on developing into the future: (1) Maintain international competitive power (a clear-cut scenario and increased asset efficiency); (2) Not only to strive to preserve the natural environment, but also to acquire manufacturing, supplying products, and purchasing materials with low environmental loads; (3) To utilize the electronic information technology and to respond to new growing fields generated with its development; (4) Maximize the synergy among the group companies through shared values and strategies; (5) To give balanced consideration to every stakeholder.

The Points of the New Medium-Term Plan

Aiming at "An Eco-Friendly Enterprise with Unique Technology"

  • The three basic business guidelines are: "expanding businesses with international competitive power," "expanding businesses that can contribute to preservation and improvement of the global environment," and "expanding businesses that has a unique identity in the world."
  • To promote efficient management in our business operations, we will: (1) Attain a ROA (goal: more than 7.0%) that exceeds the capital cost; (2) To stress the importance of ROA and cash flow as management indices; (3) Utilize M&A; (4) Make decisions based on "Business Reevaluation Criteria" concerning businesses with worsening achievements.
  • To create an business environment that can respond to rapidly changing market conditions, we will make the following improvements in organization management: (1) Create a flat management structure and devolve authorization; (2) To make businesses and group companies self-supporting; and (3) To maximize synergy among group businesses through shared values and business strategies. Also, we will (4) create an employee evaluation system that better reflects the achievements of an individual, and (5) promote BPR and utilize information technology.

Core Businesses, Stategic Areas, and Images of Business Achievements

  • The core businesses in our company's business consists of the vinyl-acetates related fields (Poval, EVAL, KURALON, KURALON K-Ⅱ), the isoprene chemical fields (thermoplastic elastomers, fine chemicals), man-made leather fields(CLARINO), and we will strengthen and expand these areas.
  • Besides the strategies according to different products, we will set the following four strategic areas according to different markets: the electronic information business area (PVA films for LCDs, highly heat-resistant resin PA9T, etc); eco-friendly areas (asbestos substitutes, gas barrier materials, substitutes for polychlorinated vinyl and vulcanized rubber); environment business areas (activated carbon, PVA gels, industrial membranes); and medical areas. We will expand these business areas using strategies which have the market-in approach.
  • The predicted results for the FY 2005 are net sales of ¥460 billion and an operating income of ¥44 billion (predictions for FY 2000 is ¥325 billion in net sales and ¥22 billion in operating income). The increase of ¥135 billion in net sales within these 5 years will be achieved by expanding the core businesses and the strategic business areas listed previously. To achieve these goals, we will carry out active capital investment and make weighted distribution, increase asset efficiency mainly through compression of inventory, and conduct M&A.

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.