Message from the President and CEO

We aspire to be a corporate group that is constantly necessary to society through the embodiment of our Management philosophy and Long-term vision.

The 100th anniversary of our founding, which was celebrated in February 2020, was an invaluable opportunity to rethink the nature of the ShinMaywa Group’s management. We decided at that time to shift management to a long-term orientation. With technology advancing at an accelerating rate and the social environment changing rapidly, the short-term orientation we had employed would leave us behind the curve in responding to the changes taking place. We would instead carefully consider the future of society and set forth what we aimed to be from a long-term orientation to work for sustainable growth under a form of management for realizing these aims. Based on this new policy,we organized the things we would inherit and the things we would change and put them down in writing as our Management philosophy and Long-term vision.
Immediately thereafter, the world was imperiled by the COVID-19 pandemic and then severely impacted by Russia’s invasion of Ukraine in February 2022. Amid this, up through the present, we have given thought to the strengths of the ShinMaywa Group and future risks.

Based on my own thoughts about this, I will now discuss the recent status of the ShinMaywa Group, the challenges we face, and the future.

President & CEO
Tatsuyuki Isogawa

A 100-year company ― The history and strengths of the ShinMaywa Group

The origins of the ShinMaywa Group date back to 1920 and the establishment of an Aircraft Department within Kawanishi Machinery Company, our forerunner.The department later became Kawanishi Aircraft Company, a dedicated manufacturer of aircraft, and produced high-performance aircraft models.
After World War II, there was a ban on aircraft manufacturing in the country, but the post-war recovery was a fresh start for the company that led to the core businesses of the ShinMaywa Group today. Our predecessors had a strong sense of mission. They were committed to Japan’s reconstruction and to protecting the jobs of the company’s employees, so they first got involved in manufacturing small daily commodities that people needed. There was a spirit of making whatever could be made. The company later developed a dump truck using proprietary technologies, a project that started with doing repairs on U.S. military vehicles. Drawing on technological capabilities cultivated in the days of Kawanishi Aircraft Company, our predecessors provided the world with products and equipment that were needed by society, including self-priming pumps and various types of industrial machinery. We bow our heads to the power they possessed.  
The company continued to harbor hopes of one day again making aircraft and in 1952 it gradually recommenced its aircraft business. It also got involved in the infrastructure business, which was expanding alongside Japan’s high economic growth. This included submersible pumps for sewage treatment, mechanical car parking systems, and refuse transfer station systems. As a result, the company came to possess the five businesses it has today.
There are now numerous dedicated manufacturers in each of these fields, so we feel pride in the fact we were the forerunners in these industries. Our spirit and stance have not changed since our founding. Through our high-level technological capabilities and extensive experience, we solve the issues facing customers and give tangible form to their needs. We continue to maintain this same spirit today.

Of these five businesses, I think the product that is perhaps most familiar to people is our special purpose trucks. Our dump trucks and refuse compactors(garbage trucks), which exemplify special purpose trucks, maintain a high market share in Japan. One in two of these trucks has the ShinMaywa logo. If you live in a condominium complex, the mechanical car parking system may be made by ShinMaywa. We also build environmental facilities that compact and sort the garbage you throw out on its way to its final disposal site and handle various products related to water treatment, including submersible pumps that pump sewage to sewage treatment facilities. Moreover, ShinMaywa components are used in the commercial aircraft we all fly in. As you can see, most products of the ShinMaywa Group have many points of contact with our daily lives.
In recent years, with the dramatic advance in digital technologies, including AI, IoT, and image processing, we have also been working to make our products and services smarter (automation, unmanned/laborsaving,improved convenience and safety, etc.) to fully accommodate the needs and requests of the customers who use and operate the Group’s products and services.
In addition, there is greater uncertainty in the world now than before given the spread of the COVID-19 pandemic, the frequency of major natural disasters in various regions, and the emergence of geopolitical risk as represented by Russia’s invasion of Ukraine. In order to accommodate a business environment that is changing rapidly alongside all of these changes, we will secure and train DX human resources to put into practice our digital transformation (DX) strategy,which is positioned as a particularly important facet of our management strategy, and will robustly implement a human resources strategy that includes D&I initiatives for taking maximum advantage of individual diversity, which is essential to the growth of the Group.

The ShinMaywa Group’s Value Creation Process

I will now go over our value creation process, which refers to the cycle of management activities in the Group.
The foundation of our management is the ShinMaywa Group Philosophy, at the top of which is our Corporate principles. On this basis, we are working to embody our Management philosophy and Long-term vision, which has a target year of 2030.



Under the Long-term vision, we plan to promote a form of management oriented to growth and expansion from a long-term perspective, one that is not caught up in the most recent changes or focused on earnings alone. The vision outlines our aspirations for 2030, which are the key to this. This is the first time the ShinMaywa Group has taken this approach. 
Our Long-term management plan SG-Vision 2030 presents a roadmap to the achievement of the Long-term vision. FY2023 marks the third year of SG-Vision 2030.
The ShinMaywa Group has many contact points with social infrastructure, so we need to be constantly aware of global megatrends. From among demographic changes, the progress of climate change initiatives, rising geopolitical risk, changes in the social structure and lifestyles, and technology evolution, we have selected themes that have a particularly deep relationship to the ShinMaywa Group and are monitoring related changes.
In addition, we manage main input capital, the inputs in the value creation process, using the categories of financial capital, human capital,manufacturing capital, intellectual capital, social and relational capital, and natural capital, and have defined key issues (materiality) for each of them.

Capital category Key issues (materiality)
Financial capital Determination of cash allocation in accordance with the Medium-term management plan, the first phase of the Long-term management plan
Human capital Shift approach from human resource management to human resource value enhancement
Manufacturing capital Advanced manufacturing know-how and production technology to meet individual customer specifications/high-mix low-volume production 
Intellectual capital Create new value by appropriately integrating technologies and know-how cultivated through various businesses with cutting edge external technologies
Social and relational capital Over 100 years of experience since our founding in supporting people’s daily lives and social infrastructure through technology, products, and services, as well as trust and a strong supply chain based on this experience
Natural capital Preventing global warming and contributing to a recycling society

We organize the Group’s input capital in terms of these six categories and consider and make allocations for addressing each of the key issues (materiality). SG-Vision 2030 constitutes the foundation for this. Oriented to achieving the Long-term vision, we are engaged in eight themes on the pillars of two management policies: Long-term business strategies, which promote the growth and expansion of business, and strengthening of management foundations, which fortifies our footing.  Recognizing, however, that ten years is a long span to be promoted under a single plan, we are working toward the goals of the Long-term management plan through three Medium-term management plans,which have “Transformation,” “Expansion,” and “Advancement” as themes.

The keys to growth and expansion are a segment growth strategy to expand the scale of core businesses and new business creation. To expand the scale of core businesses, we will accelerate the process of adding high value to products and services and carry out initiatives centering on the acceleration of overseas expansion and strategic M&As.

Regarding the acceleration of the overseas expansion,we had  generally established sites on a business-bybusiness  basis in response to the needs of customers and business partners, but going forward we will put particular priority on manufacturing and sales and ensure close coordination between business divisions and with overseas Group companies to demonstrate the Group’s strengths. We will carefully consider markets where synergies can be expected and commit management resources on a concentrated basis to those regions.

Regarding strategic M&As, in the Japanese market,we will focus on industry reorganization and strengthening our lineup of products and services and will promote an M&A strategy that seeks to maximize synergies based on a firm grasp of our strengths and challenges. With regard to overseas expansion as well, in order to use M&A to gain a foothold for expanding into certain regions, we will actively consider adding prominent companies in those regions to the Group.

As for new business creation, we currently have five businesses, which are the product of the history I discussed above, but they were all formed before 1980s. We feel a sense of crisis from not having effected a major change ourselves since that time, which was one of the driving forces behind the creation of the Long-term vision. Creating a new business and getting it on track for success is no easy task in a mature society, but we are in an era in which change is emerging in various strata that topples the conventional wisdom, so one might say there is also substantial opportunity. We will not proceed hastily. We are working toward the goal of establishing a considerable position in a new field in 2030, a little way into the future.

In addition, in order to successfully expand the scale of core businesses and create new businesses, it is imperative that we create an environment that allows us to flexibly accommodate market changes and also establish a development environment for new businesses and products.
For this reason as well, going forward it will be essential for us to promote DX, which includes business process innovation centered on data and business model transformation not possible through the mere extension of existing businesses, and we will aim to establish organizational capacities that allow us to achieve this.
Alongside growth and expansion, we must also focus on strengthening management foundations. For the ShinMaywa Group, which transitioned to the Prime Market in 2022 and is oriented to overseas markets in its business activities as well, it is essential that we work to meet social requirements from a global perspective. To be acknowledged by customers and business partners as a corporate group worthy of trust and to be recognized for sustainable growth potential by the world’s investors, we have incorporated strategies that emphasize the environment, society, and governance (ESG) into our Long-term business strategies and efforts to Strengthen management foundations and will report on their progress each year though this report so that they can be properly evaluated. In particular, in promoting the six input capital key issues and our Long-term management plan, we will also focus on Human capital management, which includes formulating a human resources strategy linked to management strategy, promoting the acquisition and optimal placement of key personnel, and working to raise employee engagement while increasing  corporate value.

We will repeatedly carry out the series of management activities that constitute our value creation process and work to achieve the following targets of our Long-term vision, SG-Vision 2030, in the target year of FY2030.

Net Sales 400billion yen or more
Overseas sales
(within the above net sales figure)
100billion yen or more
(Return on equity)
12% or more
(Return on invested capital)
10% or more

Progress on our Medium-term management plan SG-2023

Among the three medium-term management plans I mentioned previously, we are currently engaged in the Medium-term management plan SG-2023 (hereinafter,“SG-2023”), which is the first phase and has “transformation” as its theme. This plan runs through FY2023. The first phase happened to coincide with the COVID-19 pandemic, and the assumptions inevitably changed a great deal from when the plan was formulated in 2019. For this reason, we don’t expect to meet our initial forecast for operating profit,a key indicator expressing the true strength of a company, but net sales are expected to exceed the forecast. Even during the pandemic, a majority of the Group’s businesses continued to function in various strata as social infrastructure, which reminds us once again how they are perpetually needed by society.
In FY2022, the Special Purpose Truck segment,which of our five businesses has driven performance and is expected to contribute the most to earnings,had a difficult battle due to difficulty in procuring key parts and surging prices for materials. The Parking Systems segment also fell short of its profit target for the same reasons. Fortunately, orders remain strong in both segments, so profit levels are expected to recover in FY2023 as selling prices improve and procurement gets back on track. Meanwhile, the Industrial Machinery & Environmental Systems segment has been growing during this period at a pace that has greatly exceeded forecasts. Along with strong showings from mechatronics and environmental systems, which are the foundation of this segment, vacuum drying systems for automotive secondary batteries, the mainstay product of KOREA VACUUM LIMITED (Korea), which was added to the Group in 2018, has produced remarkable growth. Also, the Fluid segment, which was split off from the Industrial Machinery & Environmental Systems segment in FY2022, has made progress in excess of targets thanks in part to the contribution of TurboMAX Co., Ltd. (Korea), which became a member of the Group in 2021.
In the Aircraft segment, which struggled the most during the pandemic, cost reduction activities for commercial aircraft components began to have an effect, and yen depreciation also contributed, so profit in the final fiscal year is expected to exceed the planned target.
In this way, under SG-2023, the contributions of companies added to the Group via M&A have been noteworthy, and we are evolving significantly in terms of both growth and expansion and acceleration of overseas expansion.
The difficulty procuring components due to the pandemic is a temporary risk, but with regard to surging material prices, it is difficult to think that geopolitical factors will be eradicated over the short term, so for the time being we will need to incorporate this risk and take measures to secure a certain level of profit margin. We will also continue making efforts to earn the understanding of customers with respect to necessary price increases.

Considering and formulating the next Medium-term management plan

Around half a year is left on SG-2023, and we are currently working to formulate our next Medium-term management plan, which is the second phase and has “expansion” as its theme. In the structure of our Long-term management plan, these ten years are tied together through three Medium-term management plans, and this next medium-term management plan plays a central role in this. It is being formulated primarily by organizing the unresolved challenges and newly emerged risks of the first phase, taking into account the most recent megatrends, and backcasting from the ideal presented in the Long-term vision in order to identify items to be undertaken during this period and incorporate them into specific initiatives. The net sales target of 400 billion yen or more is approximately two times our current level, and we recognize that the target for overseas sales, which is to account for over one-quarter of this, will not be achievable without taking decisive measures that are without precedent.
As for concrete measures, we will persistently engage in new business creation, as I mentioned previously. This will pivot on whether or not there are prospects for generating earnings in new fields and on the success of collaborations and M&A with promising companies in Japan and overseas. Regarding new business creation, as of the present we are involved in themes related to energy, water and resources, mobility, digital, and others, and they are all in alignment with our intention to advance Urban, Transportation, and Environmental infrastructure as stated in our Long-term vision. We will earnestly work under our next Medium-term management plan to give concrete form to a business domain that will constitute a new pillar for the ShinMaywa Group.
Alongside this, we will also need to take inventory of existing businesses in order to make effective use of limited management resources. During the period of the SG-2023 plan, the Board of Directors shared information and held discussions on the current position and future potential of our major products. Going forward, we will closely study the future value of each business and product with a focus on global markets and also consider reshuffling our business portfolio based on this.

The goal of being a corporate group that is always needed by society 

It has been one year since the ShinMaywa Group issued its first Integrated Report. With publication of the inaugural report, we noticed areas where the daily management cycle was not being implemented as depicted in the value creation process and found areas related to coordinating individual initiatives to meet targets that were in need of revision—there were many points that warranted critical reflection, but I acutely feel that incorporating the major content of management into the value creation process and implementing management based on this over the course of this year will be pivotal when seeking to gain the understanding of stakeholders regarding the certainty of the Group’s sustainable growth.
Japan has many 100-year companies, but there are very few companies with unique businesses that support social infrastructure that have been continued in multiple fields over many years. This is where the raison d’être of the Group lies.
Those of us working today look back on the over 100 years of history with the desire to be a corporate group that continues to value relationships with customers, continues to strive to enhance technological capabilities, and  enable a smoother functioning society. A life that is more safe and convenient.
We hope that stakeholders will continue their interest in the activities of the Group and provide us with guidance and support.