DENKA

Management Plan「Denka Value-Up」(Fiscal 2018~2022)

Growth Vision

We have identified growth vision consisting of the following three key items, with the aim of promoting Denka Value-Up, a new management plan spanning five years from fiscal 2018 to fiscal 2022.

Growth Strategies

We have established the following two growth strategies aimed at realizing the aforementioned growth vision.

Growth Strategy 1: Business Portfolio Shift

We aim to raise the ratio of operating income from specialty businesses* to consolidated operating income to 90% and, to this end, will promote the following three measures aimed at transforming our business portfolio.

*Businesses that meet or have the potential to meet the following conditions in the near future: 1) boasting distinctive strengths and product value; 2)possessing resilience to changes in external factors; and 3) commanding an industry-leading market share

Accelerate growth of specialty businesses

We will focus our management resources on three priority fields: healthcare, the environment and energy, and high-value added infrastructure.

Healthcare
In addition to illness prevention and early diagnosis, we are expanding into cancer remedy and gene alteration analysis to help enhance people’s quality of life.
The environment and energy
We employ such core technologies as cutting-edge inorganic materials in product development, with the aim of better satisfying the latest needs for solutions that help achieve zero emissions, support autonomous driving systems and assist in other technological pursuits aimed at creating a clean and safe future society.
High-value added infrastructure
We strive to meet high-profile infrastructure development needs in countries around the world through the provision of cutting-edge materials and solutions.
Specialize our key operations

As for our key operations, including elastomers, styrene-based chemicals, inorganic and resin-processed materials, we will develop a greater number of specialty grades while stepping up the provision of unique solutions employing these products.

Redefine the positioning of the commodity businesses

We will redefine the positioning of the commodity businesses, thereby executing value chain optimization, operational downsizing and business reorganization.

Growth Strategy 2: Introduction of Innovative Processes

Focusing on truly essential operations, we strive to standardize our processes in all business units, ranging from those in charge of R&D and production to sales departments, while introducing cutting edge ICT technologies. In these ways, we will drastically improve productivity and accelerate the creation of new businesses. At the same time, we will promote work style reforms and workforce diversity to create an even more lively and vibrant organization.

Production process reforms
  • Restructure our production facilities into ICT-based next generation smart factories
  • Build a robust, overarching information platform capable of managing all data on a real-time basis
  • Realize manufacturing operations with greater productivity and superior stability
R&D process reforms
  • Identify R&D themes oriented toward specialization
  • Develop R&D assistance systems employing ICT
  • Nurture diverse human resources by providing them with strategically designed career paths
Operational process reforms
  • Facilitate active in-house collaboration through the introduction of a “futuristic” office layout
  • Enhance operational productivity
  • Develop a “location-free” working environment
    Shift our focus from “quantity” to “quality” in terms of working hours
    Help employees enhance their quality of life
    Create an innovation-oriented organization by welcoming diverse human resources and helping them achieve success

Numerical Targets

Operating income

FY2017(Estimates): ¥32 billion
FY2020: ¥42 billion or greater
FY2022: ¥50~60 billion or greater*
(*Figures will be officially decided in fiscal 2020)

Operating income ratio

FY2017(Estimate): 8.0%、FY2020: 10% or greater、FY2022: 15% or greater

The Ratio of Specialty Business

FY2017(Estimates): 60%、FY2020: 75% or greater、FY2022: 90% or greater

Investment Plan and Shareholder Returns

Investment Plan

We will invest a total of ¥200 billion over a five-year period.
Of this, strategic investment: ¥75 billion (¥15 billion/year)
・M&A, etc.: ¥60 billion
・Process reforms: ¥15 billion
・Regular investment: ¥125 billion (¥25 billion/year)

Shareholder Returns

We aim to achieve a total shareholder return ratio of 50%. (Total shareholder return ratio = (cash dividends + shares repurchased) / net income attributable to owners of the parent for the fiscal year)
In addition, we focus on maintaining the stable payment of cash dividends while flexibly carrying out share repurchases by giving due consideration to such factors as a trend in stock prices.