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

①Diversify & Expand the Sales Base

Approximately 70% of the Group’s sales are generated in North America, making our business highly sensitive to changes in the U.S. political and economic environment. To mitigate risks arising from concentration in specific regions, applications, or customers, it is essential to diversify and expand our sales base by developing markets outside North America and by entering application areas in which the Group has had limited presence, even within North America.
In recent years, amid strong demand in the aviation sector, we have expanded transactions with European and Asia-Pacific airlines. In addition, to establish a solid presence in the European furniture market, we have been conducting repeated prototyping efforts to address remaining technical challenges. Furthermore, in the North American furniture market, the Group has expanded beyond its core office segment into the residential market.

② Enhance Product Development Capabilities

Customer requirements for product functionality and quality are becoming increasingly sophisticated, driving the need to accelerate both new product development and improvements to existing products. To enhance development speed and quality through closer collaboration with manufacturing operations, Daiichi Kasei Co., Ltd., which serves as the Group’s core manufacturing arm, has reorganized its R&D sites by colocating them with production facilities.
As a result of this reorganization, R&D space has been expanded, alleviating bottlenecks in R&D headcount. In addition, by shortening the lead times for sample, the Group will further accelerate its marketing activities.

③ Promote Sustainability

Our Group has set “Prioritize sustainability while contributing to society” as one of the missions of the Group Mission Statement. In addition to promoting the use of bio-based and recycled materials to enhance the sustainability of its products, the Group is also advancing the sustainability of its manufacturing processes. At the Chiyoda Plant, initiatives include the introduction of hydrogen boilers to reduce CO₂ emissions and systems to reuse approximately 60% of wastewater in the manufacturing process.
Going forward, the Group will further accelerate these initiatives and leverage sustainability as a source of brand value, thereby strengthening its long-term profitability.