Message from the COO of Chemicals Division

  • Photo：Message from the COO of Chemicals Division

Growth Scenario of the Chemicals Business

Strengthening global business and manufacturing operations to capture growth opportunities through internal and external synergies

In the 13th Mid-Term Plan, we advanced initiatives such as “selecting and concentrating businesses,” “accelerating global expansion,” and “strengthening manufacturing operations” as main pillars. Over the three-year period, despite a challenging environment for trading companies and limited opportunities to implement aggressive measures, we steadily strengthened our business foundation— optimizing base and customer portfolios, and expanding our presence in India and Vietnam, thereby laying the groundwork for the next stage of growth.

Against this backdrop, the newly formulated 14th Mid-Term Plan—following our business integration in April—adopts a policy of pursuing profitability by breaking away from conventional business models and accelerating bold initiatives that had previously been postponed.

What we place a primary emphasis on is, of course, the expansion of global business. In order for us to achieve sustainable profit growth, it is essential that we increase the overseas sales ratio in our total sales, and we have set a target of achieving 50% by 2035 as a benchmark. After strengthening our presence in ASEAN, we opened a representative office in Germany in August, in addition to our existing local subsidiary in Vienna. Using these two offices as our bases, we will direct our efforts to Europe, where demand for environmentally friendly products is growing. Furthermore, since we are considering expansion into Eastern Europe, Africa, the Middle East, and other regions in the future, we will increase our agility to respond to geopolitical risks and secure a wider range of options.

Additionally, we will continue to direct our efforts to the expansion of monozukuri (manufacturing) business. However, instead of stepping into the already saturated downstream manufacturing area, we will focus on the enhancement of new functions and added value in the upstream area, particularly in the materials field, where we can demonstrate our superiority. Here, we intend to make the most of the manufacturing capabilities of our Group companies, such as by utilizing the chemical synthesis contract business of Goko Kasei Industrial, in which we made facility investments under the 13th Mid-Term Plan, as well as by expanding Shikoku Kakoh’s high-value-added film manufacturing technology overseas. In addition, taking advantage of the consolidation to enhance synergy with the Resin-Treated Product Business is also one of our important themes. People-to-people exchanges, including transfers, have already been in progress between the two businesses, and knowledge and experiences cultivated in different domains have also been combined. These initiatives have provided our employees with new insights and contributed to enhanced business performance.

We also give great importance to synergies with a wide range of external partners, and strive to discover partner companies both in Japan and overseas, focusing on domains that have a high affinity with our existing businesses. In the 13th Mid-Term Plan, we invested in a South Korean company for the development of insulating slurry for lithium-ion batteries. In addition to expanding sales of carbon nanotube masterbatches, which we have been working on for a long time, we will accelerate efforts to sow seeds in fields where the market is expected to blossom.

Thoughts Hidden behind the 14th Mid-Term Plan

Upholding “Destruction and Creation” as a driving force for mindset transformation and profitable value creation

As the foundation for advancing these strategies, we have adopted the high-impact theme of “Destruction and Creation.” The greatest challenge—and opportunity—for growth lies in fostering a mindset that embraces challenge and focuses on generating profit. Unless each individual acts with profit in mind, it is no longer possible to change to a high-profit structure. Additionally, in today’s rapidly changing environment, if we do not respond to customer requests in a timely fashion and act swiftly, our business itself will quickly become obsolete. I deliberately encourage employees to reflect on how they can improve their current work, serve customers more effectively, and contribute to society. This theme conveys my strong desire and sense of urgency to cultivate the ability to think independently and take swift action throughout the organization. I myself would like to communicate face to face with employees at each base, and spread this attitude while reducing the distance between on-site workers and management.

At the same time, in order to increase this willingness and properly reward employees for their hard work and performance, we will also accelerate the review of remuneration and employment terms, and the application of a flexible personnel system that promotes motivated and talented personnel. Additionally, we will expand opportunities for skill development, such as through training programs and business schools that have been provided, and will also focus on the development of global human resources. In recent years, we have seen an increase in the promotion of foreign staff and locally hired personnel, and we will continue to promote highly transparent personnel deployment based on capability, regardless of career, nationality, or gender.

The mission of a trading company is to quickly sense or predict market trends from the same viewpoint as its customers and to always continue sowing seeds. Toward achieving our long-term vision and the targets of the 14th Mid-Term Plan, the Chemicals Business is required to create new value through the combination of chemistry and manufacturing, continue to make proposals to various industrial fields, and build a unique global network by taking on challenges. I also recognize that our business is required to provide feedback on the results of our marketing efforts to the entire Moriroku Group. I am personally committed to fulfilling this responsibility by embodying the spirit of “Destruction and Creation” in practice.

Expansion of Global Business

The Moriroku Chemicals Division has bases in 12 countries, and provides optimal materials and products to customers with its trading function and manufacturing function capabilities. In addition to expanding our business in Europe and ASEAN, we are undertaking sales activities that take into account potential entry into emerging markets. We will identify priority regions based on a precise understanding of changes in the external environment and strategically allocate management resources to expand our global market share. Furthermore, by promoting global expansion and manufacturing activities in an integrated manner, we aim to maximize growth opportunities worldwide.

Overview of the 13th Mid-Term Plan

We have completed putting in place the infrastructure for expanding our business henceforth in Europe, India, and Malaysia—areas in which growth is expected. Of particular note, we proceeded with preparations for establishing a new office in Düsseldorf, Germany, and combined with the existing Austria base, we have constructed a two-base system to cover all of Europe. In India, we have expanded market development and achieved profitability at the local subsidiary, and are currently looking into further business expansion. And through our development of the electrical and electronic field, we also worked toward entering the Malaysian market.

Strategy of the 14th Mid-Term Plan

In order to further increase our overseas profit ratio on a consolidated basis, we will expand our global coverage. Under the 14th Mid-Term Management Plan, we intend to use the global network of bases we expanded in the 13th Mid-Term Management Plan and proactively advance into regions and countries we previously had no involvement with, such as India, Africa, Eastern Europe, and the Middle East. From the perspective of risk distribution, we will prioritize ensuring diversity of options and build a strategic foothold in a variety of regions, and by doing so take action on both future risk management and the acquisition of growth opportunities.

  • Photo：Expansion of Global Business