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Management Policy

Top Message

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Here I will report the business results for this company’s 45th consolidated cumulative second quarter (between September 21, 2016 and March 20, 2017).

General conditions in the current consolidated cumulative second quarter

For the Japanese economy in the current consolidated cumulative second quarter, there was steady progress in the improvement of the employment and income environments, and continued signs of a gentle recovery were observed. On the other hand, the mood of uncertainty regarding a global economic slowdown increased overseas. The increasingly inward-looking tendencies apparent in the United States and the United Kingdom caused concern about the effects on foreign exchange rates and stock market conditions, and geopolitical risks also became apparent in some countries and regions.

Under these conditions, the MAEDAKOSEN Group prepares to mark the 100th anniversary of its founding in 2018 under its corporate message of “MAEDAKOSEN is a company that creates mixtures”. This message incorporates the Group’s strong intention to achieve continuous growth by “mixing” the various kinds of managerial resources that it possesses. We believe that this will create the driving force for positively advancing the long-term strategies of “M&A”, “human resource development”, and “overseas business”.
With regard to the M&A strategy, the MAEDAKOSEN Group is creating new products and new technologies by “mixing” the various technologies and know-how that it maintains in the different fields without remaining caught up with the fiber and resin processing technologies which the Group has fostered until now. Regarding human resource development, in addition to developing the full potential of all Group employees, a variety of human resources are being employed and trained in order to build an innovative organizational culture by “mixing” the resourcefulness created from their capabilities and experiences. Furthermore, in the overseas business, the Group is aiming to expand the markets for its products by increasing its overseas manufacturing bases, as well as by making best use of its technologies and sales networks in Japan and other countries through forming business tie-ups with foreign companies.
In these ways, through conducting its manufacturing activities, the MAEDAKOSEN Group is putting into practice its management policy: “We contribute to the sustainable Earth and the creation of a secure, bountiful society through our unique wisdom and technology”, and is making further efforts to become a company that is required by society.

Sales in the current consolidated cumulative second quarter were 16,107 million yen (an increase of 7.8% on the same period of the previous year). In terms of profit, the operating income was 2,019 million yen (similarly, an increase of 1.8%), the recurring profit was 2,115 million yen (similarly, an increase of 6.8%), and the quarterly net income attributable to the owners of the parent company was 1,519 million yen (similarly, an increase of 5.7%).

Business Performance according to Segment

(Social Infrastructure Business)
In the Japanese domestic public works business, although there were delays in the progress of orders received in the fields of building maintenance and repair and of landscaping materials, sales of disaster recovery-related products, slope disaster prevention products, and forest preservation products remained strong. Added to the results of cost reductions through improving business efficiency, both sales and profits achieved results that improved on the same period in the previous year.
Regarding nonwoven fabric-related products, sales results remained favorable due to strong orders received for spunbond (continuous long-fiber nonwoven fabrics) products which are used in applications including industrial materials and automotive materials.
For Mirai no Agri Co., Ltd., the subsidiary which handles wild animal damage countermeasure products, horticultural use greenhouses, and agricultural materials, the orders received for horticultural use greenhouses were sluggish. However, the sales results improved on the same period of the previous year due to factors including orders received for large-scale projects involving wild animal damage countermeasures. On the other hand, the operating income realized a result that was lower than the same period in the previous year due to the influence of projects with low gross margin ratios.
For the overseas subsidiary MAEDA KOSEN VIETNAM CO., LTD., both sales and profits were favorable due to the expansion of products handled and improvements made in productivity. Making best use of the increase in production capacity of the operation of the company’s No. 2 plant, the company is striving to expand the sales channels for MAEDAKOSEN Group products in the ASEAN region.
MAEDAKOSEN’s social infrastructure business was awarded the 16th Porter Prize 2016, which is sponsored by The Graduate School of International Corporate Strategy (ICS) in Hitotsubashi University. As a pioneering company in spreading the use of fibers as civil engineering materials, which were formerly centered on iron and concrete, our unique business model was highly evaluated for implementing high value-added proposal-based sales utilizing a wide product lineup, high technical strengths, and sales locations established nationwide. Encouraged by the receipt of this award, MAEDAKOSEN will continue to strive even harder to improve its corporate value going forward.

The sales in this business sector were 10,982 million yen (an increase of 5.7% on the same period of the previous year), while the operating income was 1,748 million yen (similarly, an increase of 6.7%).

(Industrial Infrastructure Business)
For the subsidiary Mirai Kosen Co., Ltd., sales of polyester finished yarn were sluggish. However, in the wiping cloth field, the company’s key products which are used in the manufacturing of precision machinery including hard disks and photocopiers, sales of DTM50 high performance wiping cloths were favorable. Together with the contribution from the commissioned production business, this realized results in which both sales and profits surpassed those of the same period in the previous year. Going forward, we will continue to make best use of the effects of merging consolidated subsidiaries Technos Co., Ltd. and Daiichi Co., Ltd. to speed up new product development and pursue cost reductions through integrated production.

The sales in this business sector were 1,075 million yen (an increase of 3.3% on the same period of the previous fiscal year), while the operating income was 197 million yen (similarly, an increase of 16.1%).

(Human Infrastructure Business)
In the human infrastructure business, sales in the subsidiary BBS Japan Co., Ltd. which manufactures aluminum forged wheels greatly increased over the same period in the previous year due to the favorable performance of the company’s German subsidiary BBS Motorsport GmbH, in addition to the products provided to various automobile makers on an OEM basis. However, due to the implementation of a temporary production adjustment, a decline was apparent in the gross margin ratio.
The world’s largest custom car event, Tokyo Auto Salon 2017, held at the Makuhari Messe international convention complex in Chiba Prefecture, provided an opportunity to generate wide appeal for the brand concept of “proof of trustworthiness” such as by exhibiting one of the latest SUVs, a Bentley Bentayga, fitted with BBS Japan forged wheels, which met with great success. Going forward, we will continue to build brand loyalty among its customers by positively developing various events and services, and will make efforts to enhance sales.

The sales in this business sector were 4,050 million yen (an increase of 15.4% on the same period of the previous year), while the operating income was 499 million yen (similarly, a decrease of 12.2%).

May 2017

September 2017