Management Policy

Message from Top Management

Striving to enhance sustainable corporate value through [SG-Vision 2030] towards realization of our Long-term vision

Thank you for your continued support of the ShinMaywa Group.

取締役社長 五十川龍之

The world is still facing the COVID-19 pandemic, and the impact of Russia’s invasion of Ukraine has also led to a complete about-face in global economic conditions. Due to these and other factors, we are in a situation where it is even more difficult than before to forecast the future. As a corporate manager, I am very aware of the importance of taking a long-term perspective.

We announced our Long-term management plan aiming for 2030, [SG-Vision 2030] in 2021, and have spent one year considering key performance indicators (KPIs) and measures aimed at the embodiment of the achievement of target levels. We also formerly disclosed the details of these in May 2022. I would like to provide a summary explanation of these to all of our shareholders.

1. Process of deliberations on the Long-term management plan [SG-Vision 2030]

We tackled the organization and materialization of our thoughts in the following sequence.

  • Re-identification of the strengths of the ShinMaywa Group
  • Selection of deep themes related to the ShinMaywa Group from among megatrends and changes to the external environment
  • Using strengths and megatrends as our reference point, we set target levels (in terms of both economic and social value) to achieve what we are aiming to be as described in our Long-term vision
  • We set management themes required for achieving target levels, and measures and KPIs for their materialization

[SG-Vision 2030] is designed to be achieved through three Medium-term management plans, the first of which, [SG-2023], is currently underway and is positioned as an important first phase.

2. Overview of [SG-Vision 2030]

Strengths of the ShinMaywa Group For more than 100 years since our founding, a proven record of supporting people’s lives and social infrastructure with our technologies, products and services, and the trust that comes with this experience

The ShinMaywa Group has a history of over 100 years since the founding of the business. During that time, we have overcome many difficulties, and we believe that our strength is the reason why so many of our customers continue to do business with us. Our business activities are supported by a value chain, and it is by following this chain that we derived this strength.

Megatrends

Forecast changes in the external environment [megatrends (left) / phenomena closely related to the ShinMaywa Group (right)]

Demographic changes ・Lower birth rate, aging population and labor shortages
Advancement of urbanization ・Urban concentration of population, transportation and logistics
・Increase in logistics volume, including waste
Climate change and resource shortages ・Increase in natural disasters due to global warming
Technological evolution ・Acceleration of digitization technology and expansion of IoT
・Shift toward electrification, automation, labor-saving
Social/economic changes ・Evolution of mobility and diversification of means of transport
・Transformation of business model through DX
・Expansion of global market

[SG-Vision 2030] management targets

We aim to achieve the following targets in fiscal year 2030.

Economic value Management indices Target levels
Net sales 400 billion yen or more
Overseas sales 100 billion yen or more
ROE 12% or more
ROIC 10% or more
Social value (ESG management) Materialities
Environment ・Preventing global warming
・Contributing to a recycling society
Society ・Promoting diversity and inclusion (D&I)
・Establishing comfortable workplaces
Governance ・Enhancing corporate governance systems
・Establishing and strengthening risk management systems

[SG-Vision 2030] initiatives (activity themes)

The target levels I mentioned above, that we aim for through activities oriented towards the Long-term vision, have not changed since we announced them in 2021. We are tackling the following eight activity themes based on the two management theme pillars of Long-term business strategies and strengthening management foundations.

[SG-Vision 2030] initiatives (activity themes)

Here, I will explain some of the content.

(1) Long-term business strategies

Aiming for sustainable business growth, the business segments will play a central role in our segment growth strategies of (i) deepening of existing business, and (ii) expansion of existing business areas.

Also, on April 1, 2022, we established our New Business Strategic Division and introduced a structure to accelerate the speed of new business creation.

(iii) Creation of new business

Creation of new business is a long-held challenge for us. Irrespective of whether in-house or externally, we will proactively exercise our spirit of co-creation, and after establishing a new business creation process centered on the New Business Strategic Division, we will strive for promotion/stimulation of company-wide activities for generating business ideas based on this, thereby driving new business development.

Acceleration of overseas expansion (common for i-iii)

Expansion in foreign markets is essential for deepening/expanding existing businesses.
In recent years, the ShinMaywa Group has grown its orders and sales, particularly in Southeast Asia. Under [SG-Vision 2030], we will focus on the markets of Asia/Oceania, North America and Europe, dedicating ourselves to awareness and penetration of the ShinMaywa Brand through sales and provision of products and services in each area, aiming to achieving overseas net sales of 100 billion yen by fiscal year 2030.

(2) Strengthening management foundations

(i) Financial strategies and capital policy

We will operate in accordance with the following Long-term financial strategies.

  • Prioritize allocation of acquired cash to sustainable growth investments (capital investments, M&A, R&D, etc.)
  • Procure funds necessary for growth investments while maintaining financial soundness with a target net D/E ratio of approximately 50%
  • Make shareholder returns while maintaining a balance between sustainable growth investment and financial soundness
(ii) Human resources strategy

As organizations and individuals face increasingly rapid upheaval, to address changes in the business environment, we will take human resources as important capital, and will shift from a conventional stance of human resources management to a concept of human resources value improvement to elicit their maximum value.
For this, firstly, we will clarify the human resource portfolio required for accomplishment of management strategies, and will revise human resources systems to suit this, as well as implementing education/training, etc. as necessary to ensure that awareness of diversity and inclusion becomes deeply rooted in the workplace. In addition, we will take up the opinions of employees, and through the accumulation of improvements, will strive for both sustainable improvements of corporate value and greater employee engagement.

(iii) ESG management

We aim to achieve KPIs by implementing the following measures for each issue of “Environment”, “Society”, and “Government”.

Environment 1.
Preventing global warming
  • Reduction of greenhouse gas emissions from production activities (Scope 1, Scope 2)
    • ・Total CO2 emissions from energy use: 38% reduction (Achieve by FY2030, compared to FY2017)
    • ・Total emissions: 42,720 tons (FY2017) ⇒ 26,486 tons (FY2030)
  • Provision of products and services with less environmental impact
    • ・Develop/sell energy-saving, low-carbon products, provide low-carbon services and businesses
    • ・Conduct scenario analysis of climate change based on TCFD* (FY2022)
    • TCFD : Task Force on Climate-related Financial Disclosures
2.
Contributing to a recycling society
  • Reduction of waste
    • ・Total waste generated: Reduce by 10% (Achieve by FY2030, compared to FY2020)
    • ・Total generated: 8,111 tons (FY2020) ⇒ 7,300 tons (FY2030)
Society 1.
Promoting diversity and inclusion
  • Nurturing of organizational culture that respects and supports diversity
    • ・Build systems, raise awareness, improve environment
    • ・Obtain certification as a Health & Productivity Management Organization
  • Acquisition of diversity inherent in individuals
    • ・Human resources training, human resources development and recruitment of diverse human resources
    • ・Number of female managers: 30 [2%] (FY2023) ⇒ 60 [3%] (FY2030)
    • Acquire national “Eruboshi” certification (from FY2023 onwards)
  • Creation of opportunities for individuals to make use of their diversity and “Will”
2.
Establishing comfortable workplaces
Governance 1.
Enhancing corporate governance systems
  • Strengthening the supervisory function of the Board of Directors
    • Clarify the skills and experience required of board members and ensure the systematic development and diversity of management personnel
  • Ensuring legitimacy in execution of duties
    • Instil awareness for compliance among executives and employees and develop a control environment that includes subsidiaries
2.
Establishing and strengthening risk management systems
  • Establishing and strengthening company-wide risk management systems
    • Develop a risk management system that includes subsidiaries and monitor important risks
  • Develop business continuity plans (BCPs) for natural disasters, infectious diseases, etc.
  • Strengthening electronic information management systems
    • Review wide area networks (WANs), reform security regulations, and strengthen incident responses
  • Ensuring quality and safety
    • Understand and support the status of quality control and product safety risk information, including subsidiaries
  • Promotion of CSR procurement
    • Formulate CSR requirements and build systems to execute CSR procurement rationally/effectively/continuously

3. Commitment to [SG-Vision 2030]

The ShinMaywa Group has created various products and services to date based on sophisticated designs and manufacturing technology in a range of infrastructure that supports the foundations of society. It is our intention that we mobilize the strengths of the Group, properly addressing immediate improvement of results, while certainly implementing the various measures of [SG-Vision 2030] described here, striving to become a corporate group that offers products and services that contribute to further advancement of social infrastructure.

Tatsuyuki Isogawa

President & CEO