What is the company's growth strategy?

Mid-term management plan

As our 13th Mid-Term Management Plan (FY2022-FY2024), we have formulated a plan titled "CREATE THE NEW VALUE" STEP 1: Strengthening Businesses with Strengths and Narrowing Growth Fields.

CREATE THE NEW VALUE

  • 13th Medium-Term Management Plan Basic Policy (March 2023 to March 2025) CREATE THE NEW VALUE STEP1 Strengthening businesses with strengths and narrowing down growth fields Growth fields in 4 areas Mobility, fine chemicals, life sciences, environment, etc. 12th Medium-Term Management Plan (FY03 / 2020-FY03 / 2022) Sales of 128.8 billion yen, 13th Medium-Term Management Plan (FY03 / 2023-FY2025) STEP1 Strengthening Businesses with Strengths Narrowing down growth fields Expected sales of 143 billion yen, 14th medium-term management plan (March 2026 to March 2028) STEP2 Accelerate monetization of growth fields Predicted sales of 180 billion yen, 15th Next Medium-Term Management Plan (FY03 / 2029-FY2031) STEP3 Building a well-balanced profit portfolio in four areas Expected sales of 220 billion yen Basic strategy Ⅰ Establishing a stable financial base and strengthening profitability Strategy details Evolution of flexible production system, promotion of high-efficiency production, etc. Ⅱ Value creation by strengthening research and development, details of seeding strategy toward 2030 Expansion of technical fields, possession of original technology, creation of strengths through supply chain, etc. Ⅲ Sustainability Improving management resilience by promoting activities Strategic details Improving corporate value, strengthening corporate governance functions, securing and training diverse human resources, etc.

Basic Strategy Ⅰ Establish a stable financial foundation and enhance profitability

(1) In a highly uncertain business environment, we will increase the safety of our financial base by making flexible use of the Group's internal funds. (2) We will pursue highly efficient profit generation with an awareness of the cost of capital. Based on our own calculations, we recognize that our cost of equity is approximately 6%. (3) We will expand our strategic investment line and invest capital in R&D and business alliances with a view to future growth.

  • Financial Strategy Financial strategy to shift to an "aggressive stance" while emphasizing safety and efficiency (1) Safety Securing necessary and sufficient funds Flexible use of funds within the Group Emphasizing free cash flow with respect to business management indicators that are emphasized, (2) Efficiency Pursuit of efficiency with an awareness of capital costs Highly efficient consolidated management with an emphasis on ROE Setting KPIs on a per-operating company basis ROE/ Emphasizing the ratio of net income to sales and turnover of total assets, (3) Growth potential Optimal allocation of invested capital Expansion of strategic investment lines Emphasis will be placed on the amount of strategic investment in terms of business management indicators that emphasize active business alliances and M&A.

Basic Strategy Ⅱ Create value and sew seeds for 2030 by strengthening R&D

In the Resin Processed Products Business, we aim to win orders for high value-added parts and develop new customers. In the Chemical Business, we will expand existing business by capturing the needs of over 3,000 customers. We will create new business themes targeting the environment and life science areas by utilizing the strong resources of these operating companies and exercising its corporate planning and finance functions.

  • Creation of new businesses Exploring new businesses by utilizing the functions and strengths of group companies Regarding the functions and strengths of group companies In the case of Moriroku Technology, there are manufacturing that meets automobile manufacturer standards, QCDD management, etc., and in the case of Moriroku Holdings, there is a lead in the creation of new businesses Allocation and utilization of management resources (personnel, finance, technology, etc.) M&A correspondence (support for each department and office), etc. In the case of Moriroku Chemicals, there are customer groups (3,000 companies) Seeds Information Global bases and manufacturing subsidiaries (film, chemical synthesis, pulverization), etc. By utilizing the functions and strengths of these group companies and utilizing external resources such as partner companies, industry-academia collaboration, and M&A, we will create new themes targeting environmental and life science fields such as the sustainable materials business, environment and energy business, and healthcare business, where the market is growing remarkably, and will always engage in the mobility products business, the high-performance film business, Promote existing projects such as chemical synthesis business in parallel to create new businesses.

Basic Strategy Ⅲ Increase management resilience by promoting sustainable activities

Through the promotion of sustainability activities, we aim to build a flexible and tenacious management foundation and realize a sustainable society. We will achieve our three key goals (GHG emissions reduction rate, renewable energy adoption rate, and employee engagement) to become a company that is sought by society and loved by its employees.

  • Focusing on improving management functions as a prime listed company and deepening sustainability management through group collaboration Through environmentally friendly business activities and securing and developing diverse human resources, the 13th Medium-Term Management Plan's Major Sustainability KPIs (FY2022~2024) will reduce GHG emissions reduction rates by 30% compared to emissions in FY2019 and reduce renewable energy We aim to expand the ratio of renewable energy-derived electricity to 35% of the total power consumption of the Moriroku Group, and to increase the positive responses of "respect for individuals," "cooperative system," and "leadership," which are three priority categories that are highly correlated with "employee engagement" and "an environment that makes the most of employees," by 10 points from the results of the FY2021 employee awareness survey. In addition, we will promote DX, enhance corporate governance, strengthen intellectual property strategies, and expand information disclosure to further increase corporate value.

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