Medium-term business plan “Nikkiso 2025 Phase 2”
The new medium-term business plan, Nikkiso 2025, which was launched in the fiscal year ended December 2020, has seen a dramatic change in the business environment caused by the pandemic since its first year, and management issues that the Company must address have also changed significantly.
On the other hand, significant business opportunities for a low-carbon and decarbonized society have also come about, and as part of a review of our business portfolio, we have transferred all shares of our major subsidiaries, LEWA and Geveke.
In order to respond to these changes in the business environment and management issues, as well as to return to our purpose of “continuing to support the evolution of society through manufacturing” and realize long-term sustainability management, we revamped our medium-term business plan for the latter three-year period starting in 2023 as “Nikkiso 2025 Phase 2.”
Under Nikkiso 2025 Phase 2, we have set out a basic policy to enhance our technological capabilities, restructure our business portfolio, and reinforce our management base. We will work to strengthen our management base, which serves as the foundation for improving our profitability. At the same time, we will proceed with the optimal allocation of management resources by picking up the pace of selecting and focusing on businesses based on their affinity with our core businesses and our Group’s competitive advantages.
We will achieve long-term sustainability management by building a business portfolio that focuses on capital profitability and establishing a structure to appropriately rotate the cycle of investing the funds and management resources acquired through improved profitability in growth areas and research and technology development aimed at creating new markets.
“Technology Innovation” Enhancing technical capabilities
- Optimize resources through companywide integration of technological development functions and promote synergies through co-creation across businesses
- Strengthen initiatives for advanced technologies in anticipation of the full-fledged arrival of the low-carbon, decarbonization era (from the latter half of the 2020s)
“Business Reform” Restructuring Business Portfolio
- Allocate and focus management resources on markets where we have a competitive advantage
- Identify and select unprofitable businesses and businesses with low affinity to the core business
- Further promote price shifting, cost reduction, and operational efficiency to improve business profitability
“Management Reform” Reinforcement of business base
- Strengthen global group governance (development of overseas bases and reinforcement of systems for global market expansion, and strengthening of cooperation among group companies)
- Strengthen supply chain management to ensure stable supply of products
- Strengthen financial base (maintain and improve financial soundness through continuous generation of free cash flow)
We will improve profitability by building a business portfolio that emphasizes capital profitability to achieve sales revenue of 210 billion yen and operating profit of 14 billion yen in FY2025.