TOP MESSAGE - Tamura Corporation
We are fully committed to the Medium-Term Management Plan, which is to end on the year marking our 100th anniversary, as the cornerstone for realizing our Aspiration for 2050.
The Tamura Group formulated its long-term vision “Aspiration for 2050” and its 13th Medium-Term Management Plan, which were announced in May 2022. With the aim of becoming a leader in the effort to decarbonize society, we will work to improve business performance and enhance corporate value while focusing on our sustainability strategy.
With the impact of COVID-19 and other factors, tell us about business conditions and performance for FY2021.
In FY2021, although the COVID-19 pandemic continued, there were signs of easing restrictions on activities in some countries and regions, and the global economy was generally on a recovery trend.
In the electronics market in which the Group is conducting business, sales also increased due to a recovery in economic activity and a recovery in demand mainly for industrial machinery and home appliances. On the other hand, the impact of soaring prices of materials such as copper, iron, and tin weighed on earnings in both the Electronic Components and Electronic Chemicals/FA Systems, which are our core businesses. Although we worked to revise sales prices for customers, we were unable to improve our profit margins sufficiently.
As a result, in FY2021, the Group posted net sales of 88.328 billion yen (up 19.5% year-on-year), but operating profit decreased to 1.564 billion yen (down 20.5% year-on-year), resulting in a net loss of 84 million yen.
In FY2022, the outlook remains uncertain due to such factors as the sharp rise in global energy and resource prices following Russia's invasion of Ukraine, inflation, and sharp exchange rate fluctuations. We are closely monitoring future trends.
Please tell us about your evaluation and analysis of the results of the 12th Medium-Term Management Plan.
The period covered by the 12th Medium-Term Management Plan (FY2019-2021) was a three-year period in which we experienced major environmental changes, including supply chain fragmentation due to the global spread of COVID-19 and soaring material prices, logistics, and energy costs.
The Company was unable to respond swiftly to these changes amid a severe situation that required both infection prevention measures and corporate activities, resulting in deterioration in profitability in our three business fields, which are Electronic
Components, Electronic Chemicals/FA Systems, and Information Equipment. As a result, both operating profit/net sales and ROE failed to achieve our financial targets.
At the same time, however, it was a period that was rewarding in terms of laying the foundation for business transformation.
Under the One Tamura Strategy that we have been promoting since I assumed the position of President in 2019, we have worked to strengthen cooperation among business sectors in strategic businesses along with the reassignment of management responsibilities. As a result, R&D and sales activities that transcended the boundaries of business sectors were able to develop. We also made progress in optimizing production through the reorganization of manufacturing bases, promoting DX using ICT, and reforming work styles through the development of personnel systems. Furthermore, in addition to defining materiality issues, we were able to establish a foundation for our sustainability strategy, such as reviewing our greenhouse gas reduction targets in May 2021. These achievements have also been utilized in the formulation of the new Medium-Term Management Plan which I will talk about next.
Tell us about how the new long-term vision “Aspiration for 2050” was formulated and its purpose.
In April 2022, the Group launched the 13th Medium-Term Management Plan and at the same time established a new longterm vision, “Aspiration for 2050.”
In formulating the long-term vision, the CSR Management Committee (now the Sustainability Management Committee*), in which outside directors also participate, has held a series of discussions based on our founding spirit and Corporate Philosophy, business and environmental/social issues, and requests from stakeholders. As a result, we have established our long-term vision as “a leading company for realizing a decarbonized society that is highly valued in the global electronics market.” describing our ideal state in 2050.
FY2024, the final year of the 13th Medium-Term Management Plan, marks the 100th anniversary of our founding. In addition, 2030 will mark an important milestone in the pursuit of a decarbonized society the year in which the SDGs will be achieved.
Our Aspiration for 2050, which is further down the line, is a major goal for us to continue growing as a sustainable company into the future, and I believe that the 13th Medium-Term Management Plan is the first step on a long road as the foundation for achieving this goal.
Please tell us about the targets and “business strategy” of the 13th Medium-Term Management Plan that started this fiscal year.
The slogan for the 13th Medium-Term Management Plan is “Energize the Future 100.” This slogan was selected because we want to evolve into a more powerful Tamura Group and create a
strong and wonderful future for society as we approach the 100th anniversary of our founding and the Aspiration for 2050 Vision that lies ahead. We will continue the tripartite reform initiatives (business strategy, work style reform, and operational reform) that we have been promoting under the One Tamura Strategy, and will make even bolder changes.
Our top priority is to quickly improve profitability and rebuild our business performance. In the final year of the plan, we aim to achieve the following financial targets: an operating profit of at least 6 billion yen, operating profit to net sales ratio of 6%, and ROE of 8%.
In executing the Medium-Term Management Plan, the two pillars of growth and efficiency are our “business strategy” and “sustainability strategy.” With regard to our “business strategy,” we will work on the following three basic policies. The first is the promotion of fields related to carbon neutrality and energy. We will strive for further growth by grasping the changes of the times more firmly than ever and sharpening it as a major pillar of our business.
The second is the development of products that utilize our material technologies. By leveraging the strengths of our unique core technologies, we aim to expand the market in the electronics industry.
Thirdly, we will strengthen the profitability of our Electronic Components business field, which is an immediate issue. We will continue to develop our Electronic Components business into a business that will support the Company’s operations along with the Electronic Chemicals/FA Systems business. To this end, we will eliminate the barriers between business segments and build a system that can demonstrate the strength of “Only One” by, for example, making use of our superior knowledge of chemical materials in the development of electronic components.
Tell us about the “sustainability strategy” in the Medium-Term Management Plan.
The “sustainability strategy” will be developed based on eight materiality issues. The materiality issues themselves were already announced in May 2021. However, in the process of formulating the long-term vision and the 13th Medium-Term Management Plan, the CSR Management Committee (now the Sustainability Management Committee) and the Board of Directors held repeated discussions and revised some of the materiality issues, setting new KPIs and targets.
Among them, we place particular importance on the promotion of carbon neutrality and “job satisfaction reform” that takes “work style reform” one step further.
With regard to carbon neutrality, in May 2021, we revised our previous greenhouse gas reduction target to reduce greenhouse gas emissions by 51% or more from FY2013 levels by 2030. Toward this end, we have set a target of reducing emissions by 33% or more by FY2024, the final year of the 13th Medium-TermManagement Plan.
Therefore, we will focus on reducing electricity consumption by saving energy in our own processes, installing solarpower generation facilities, and procur- ing renewable energy. By the end of FY2022, we plan to achieve a 100% re- newable energy usage rate at five major sites in Japan. Furthermore, in Electron- ic Components and Electronic Chemi- cals/FA Systems, our core businesses, we will continue to develop products that contribute to the reduction of green- house gas emissions.
In addition, we will focus even more on human resources strategies centered on “job satisfaction reform.” In the past, “job satisfaction reform” has focused on responding to changes in systems and regulations, such as reducing working hours. On the other hand, our new approach to “job satisfaction reform” aims to create an environment in which each individual can feel satisfied in the workplace, such as experiencing the satisfaction and joy of work, a high level of “psychological safety” in the workplace, and a diversity of work styles and human resources. It is an effort to improve employee satisfaction.
I myself, as President, participate in the “Job Satisfaction Project,” where we identify issues in each business and discuss solu- tions to improve job satisfaction. In addition, we are enhancing human rights and safety education, and developing psychological safety programs. At the same time, we are working to increase the ratio of female, non-Japanese, and mid-career hires in managerial positions, mainly in Japan, with the aim of securing diversity in human resources.
Through these initiatives, we aim to be a company that people admire and a company where people gather over the long-term.
Tell us about the background behind Tamura Group’s declaration of support for the TCFD recommendations and future related initiatives.
In June 2022, the Company declared its support for the rec- ommendations of the Task Force on Climate-related Financial Disclosures (TCFD). As I mentioned in my explanations about our long-term vision and Medium-Term Management Plan, we are promoting business strategies that emphasize sustainability as a leading company contributing to the realization of a decarbonized society. Recognizing that climate change can be a risk and opportunity for corporate management, we have disclosed infor- mation based on the TCFD recommendations. As a company listed on the Prime Market of the Tokyo Stock Exchange, declaring support for the recommendations was also a move in response to requests for information disclosure from stakeholders.
In line with our sustainability strategy, I anticipate that we will contribute to further enhancement of corporate value by concen- trating management resources in areas that offer opportunities for business expansion while appropriately addressing climate change risks.
Finally, tell us about your outlook for the Medium- Term Management Plan and your enthusiasm for business management.
The results for the second quarter of FY2022 were very good for the first year of the 13th Medium-Term Management Plan. By continuing to maintain these results throughout the year, I think that we will be able to at least meet our targets for FY2022.
In addition, by implementing the Medium-Term Management Plan for each business sector, we will ensure that we achieve a 6 billion yen operating profit target for the final year of the plan and establish strategies and tactics that will enable us to always secure equal or higher profits as well as build a business struc- ture. In addition, we will steadily improve profitability, which has been an issue in the previous Medium-Term Management Plan.
The driving force behind the plan are primarily the actions of each and every employee. We hold town hall meetings with the aim of promoting and disseminating understanding about the initiatives of the Medium-Term Management Plan. For a town hall meeting, I will ask a few dozen employees to gather in the company cafeteria or other location where I will explain to them about the plan in person. This is then followed by a Q&A session. Town hall meetings have been postponed since the first town hall meeting in July due to the impact of the COVID-19 pandemic. However, we will continue to engage in dialog with employees with the aim of resuming it as soon as possible while monitoring pandemic conditions.
The 13th Medium-Term Management Plan is currently being implemented relatively smoothly. However, as you can see from looking back over the past three years, we must anticipate the risks in the business environment that are always changing dras- tically. It is my belief that the basis of creating corporate value in an era of uncertainty is to reduce risks by responding quickly to such changes and seizing opportunities.
I would like to ask all of our stakeholders for their continued understanding and support of our corporate activities.