Matters concerning the future stated in this text are based on the judgment of our Group as of the date of submission of the latest Annual Securities Report.

 

Basic Management Policy

Our Group’s basic management policy is to be a company that is trusted by consumers, business partners, and other stakeholders including shareholders by making every effort to create and develop quality and value that satisfies customers and by continuing to make proactive efforts to protect the environment and conserve resources.

Through the realization of this philosophy, we aim to establish a management system that is consistent with the promotion of increasing profits for shareholders, corporate development, service to society, and the enrichment of the lives of employees.

In addition, our Group constantly strives to create and develop new markets, accurately grasp customer needs, and develop attractive products, while improving productivity and customer service, and establish a system to gain trust in our Group and our products.

 

Target Management Indicators

Our Group has positioned sales revenue in the medium- to long-term sales forecast, EBITDA, and return on equity as important management indicators.

 

Medium- to Long-Term Management Strategy

Expansion of applications through enhancement of product development, expansion into global markets, and establishment of a global brand

The functionality and designs required for polyurethane leather vary depending on its applications. In particular, various functions and cutting-edge designs are required for high-end leather. Daiichi Kasei and Ultrafabrics have worked together in product development for many years, and business integration has enabled the two companies to establish a system in which customer needs are directly reflected in product development and introduced in mass production more swiftly. We are expanding product applications in fields such as automobiles and aircraft, where quality requirements are high. In terms of regions, our products are globally marketed under the Ultrafabrics brand name from three bases in Tokyo, New York, and London. In addition to this, we plan to strengthen our sales in Japan and Asia in the future. In particular, the automotive and aircraft businesses continue to globalize, and we believe that the global expansion of our products will contribute to the adoption of our products in these fields. The expansion of product applications as high-end leather and the development of the global market will enable us to establish our position as a global brand, which is the main objective of our business integration. By ensuring high functionality, excellent design, and the stable quality of our products, we believe that being recognized as a global brand will greatly contribute to the adoption of our products by new customers and new applications.

 

Challenges to be Addressed by Our Company

(1)Joint Venture with Overseas Partners

Our Group focuses on North America as a leading market with almost all the products manufactured in Japan. The Company agreed to establish a joint venture company in Mexico with Simil Cuero Plymouth SA de C.V. assuming the production start in 2026, with expectation that the Company improves the production/logistics lead time and deals well with geopolitical risks. The Company also agreed to establish another joint venture company in India with BMD Private Limited which is the leader in the automotive upholstery market in India. Successful joint ventures with those overseas partners are critical to the future growth of the Company.

(2)Emphasis on sustainability

Our Group has set “Prioritize sustainability while contributing to society” as one of the missions of the Group Mission Statement. The Company has promoted “sustainable production process” where introducing hydrogen boilers to reduce CO2 emissions and reusing 60% of wastewater at the new plant (Chiyoda plant), in addition to “sustainable products” using bio/recycled raw materials. The Company accelerates such efforts and enhances its brand value.