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In 2021, the SAKATA INX Group launched its "SAKATA INX VISION 2030" Long-term Strategic Vision.
In order to achieve this vision, we have formulated a Medium-term management plan divided into three-years periods under the themes of “Build foundation”, “Expand business, enhance profitability”, and “Achieve long-term strategic vision”. Currently, we are promoting various initiatives based on this strategic direction.
Amid major changes in social and economic conditions, we are working to implement management that is conscious of sustainability and the cost of capital, with the aim of realizing our long-term vision.
Identifying five material issues and implementing sustainability management
The group's long-term vision for 2030 sets out five material issues, with the enhancement of sustainability management as a key pillar.
For one of these material issues, "Activities to maintain a sustainable global environment," we set 50％ reduction in greenhouse gas (GHG) emissions* as one of our KPI for 2030. We are engaged in initiatives such as improving production efficiency and energy conservation, and have already achieved steady results, such as achieving a 30.5％ reduction by the end of FY2022.
"Strengthening corporate governance and compliance," which is also listed as one of our material issues, is another management issue that we should continue to focus on. The Internal Auditing Division － an organization under my direct control as President and CEO － ensures thorough internal controls, while the Legal Division plays a central role in examining and implementing the management system as needed, while referring to the Corporate Governance Code, social conditions, and various opinions obtained through dialogue with stakeholders.
We also conduct human rights due diligence in the supply chain and within the group. As a company with a high ratio of overseas sales, our International Advisory Board － which also includes executives from overseas group companies － engages in flexible and proactive discussions on product strategies and capital investment for future business expansion.
*Reduction in GHG compared to 2013 (Scope 1 & 2 for domestic emissions in Japan)
Formulating a basic DE&I policy and focusing on enhancing human capital
It goes without saying that people are the driving force for a company to achieve sustainable growth. As a group, we are making great efforts to enhance human capital to build a solid foundation for the next generation.
In August 2022, we formulated the Diversity, Equity & Inclusion (DE&I) Basic Policy, clearly stating our stance on DE&I, and establishing five policies for employees and the organization to grow together while innovating. We have also hired female executives with a variety of experience and knowledge from other companies as leaders, and we are working to promote DE&I throughout the company. From the perspective of investing in human capital with an emphasis on diversity, we are already implementing various reforms, such as a fundamental renewal of our personnel system and the creation of a new organizational structure.
SAKATA INX has a history dating back over 120 years, and although it once felt like there was a rather conservative culture that remained, I now feel that a fresh breeze is beginning to blow through the organization. One example of this is the significant increase in the number of male employees taking childcare leave. "Respect for human rights and promotion of DE&I" is another one of our material issues, and we have set increasing the ratio of female employees in management positions in Japan as a KPI.
As with our other material issues, though, we believe that KPI such as this are just one milestone, and should never be the ultimate goal of our efforts. What we should aim for is nothing less than to create an organization that is consciously aware of the goals of sustainability and capital costs that we should achieve through executing these measures, and achieve sustainable growth as a company. I am mindful of communicating the importance of this at every opportunity.
Carrying out organizational reforms in existing businesses to implement capital cost management
In order to strengthen our printing ink business, which is the foundation for our company, we are carrying out various reforms, such as optimizing production facilities and reviewing personnel assignments. In the digital & specialty product business, we are seeing growth in the field of industrial inkjet inks, where the market is expanding, and we are working to further strengthen the field of image display materials.
Additionally, in our global expansion, in which we were one of the pioneers in our industry, we are actively making capital investments and engaging in community-based business operations in various regions around the world, taking advantage of our strengths in optimizing products by customizing them according to the tastes and needs of each region.
In our Long-term Strategic Vision and Mid-term Business Plan, we have identified "Capital cost management" as one of our most important themes. In January 2023, we carried out a large-scale organizational reform, reorganizing into an organization that can consistently manage everything from technology development to production and sales in each of our major product areas. We have established a system that allows us to conduct ROIC (Return on Invested Capital) analyses for each business division and clearly visualize issues, and engage in various business activities with high awareness of capital costs.
Implementing digital transformation (DX) is also indispensable in order to build a new foundation. Currently, we are building a new core mission-critical system which we aim to launch in January 2024, and training data scientists in-house in collaboration with Shiga University. In the future, we will work to create an organizational structure that enables us to directly and speedily utilize the management data shared in the new core system and the massive amounts of data we have accumulated through our research and development efforts to date.
Carrying out organizational reforms in existing businesses to implement capital cost management
In order to strengthen our printing ink business, which is the foundation for our company, we are carrying out various reforms, such as optimizing production facilities and reviewing personnel assignments. In the digital & specialty product business, we are seeing growth in the field of industrial inkjet inks, where the market is expanding, and we are working to further strengthen the field of image display materials.
Additionally, in our global expansion, in which we were one of the pioneers in our industry, we are actively making capital investments and engaging in community-based business operations in various regions around the world, taking advantage of our strengths in optimizing products by customizing them according to the tastes and needs of each region.
In our Long-term Strategic Vision and Mid-term Business Plan, we have identified "Capital cost management" as one of our most important themes. In January 2023, we carried out a large-scale organizational reform, reorganizing into an organization that can consistently manage everything from technology development to production and sales in each of our major product areas. We have established a system that allows us to conduct ROIC (Return on Invested Capital) analyses for each business division and clearly visualize issues, and engage in various business activities with high awareness of capital costs.
Implementing digital transformation (DX) is also indispensable in order to build a new foundation. Currently, we are building a new core mission-critical system which we aim to launch in January 2024, and training data scientists in-house in collaboration with Shiga University. In the future, we will work to create an organizational structure that enables us to directly and speedily utilize the management data shared in the new core system and the massive amounts of data we have accumulated through our research and development efforts to date.
Working to create a foundation for the creation of new businesses that will lead to our next stage of growth
We are working to lay the groundwork for new businesses that will lead to our next stage of growth by driving open innovation and making strategic investments. For example, we transferred our Development Planning Department － which had previously been part of our Corporate R&D Division － to the Corporate Planning Division, changing our organizational structure to enable the speedy launch of new businesses. In May 2022, our US group company established an in-house venture capital firm to invest in startup companies involved in fields relating to printing inks.
In taking on the challenges of new businesses, we would like to base our efforts on collaboration with technologies that we have cultivated through our existing businesses. I myself have been involved in research and development for many years, and I feel that there are many promising technology seeds. Some projects － targeting four chemical fields － are already taking shape, such as the development of new materials using non-edible biomass raw materials and the development of printed electronics materials in collaboration with SIIX Corporation, a group company.
We also hold the SAKATA EXPO, where the R&D departments present original technologies and business ideas, and employees from our various departments exchange information, increasing their motivation to take on new challenges.
Sharing our will to reform with all employees, with the aim of realizing our long-term vision
FY2023 will be the final year of the Mid-term Business Plan CCC-I, which is positioned as a period of foundation building. Unfortunately, in the last fiscal year, our operating income margin was low, and as a result PBR was less than 1x. In order to improve, I would like us to optimally allocate our portfolio within the overall flow, rather than by individual business, and shift to a more profitable business structure.
In our existing businesses, we will further strengthen the reforms we are currently carrying out to implement capital cost management. We will also accelerate efforts to create a foundation for the commercialization of new businesses. For the next Mid-term Business Plan CCC-II, which will start in FY2024, we have set the theme of "business expansion and enhancing profitability." We also plan to formulate more specific plans for new businesses, as well as the expansion of existing businesses.
To build a solid foundation and reform our corporate structure with an eye to the future, it is essential that all of our employees share the same intent. To date, there have been restrictions due to the impact of the COVID-19 pandemic, but going forward I would also like to increase the number of opportunities for me to engage in direct dialogue with employees. The importance of two-way communication also applies to our relationships with external stakeholders. We have already been holding one-on-one meetings with institutional investors for some time, and will continue to increase the number of opportunities to do so, as we endeavor to make use of the opinions of our stakeholders in our management activities so that we can secure their support.
Looking back on the past year, I strongly feel the importance of creating an agile organization that can respond quickly to rapid changes and act flexibly and autonomously. We expect that difficult and highly uncertain conditions will continue for some time to come. To sustainably increase our corporate value in this business environment, we aim to be a company that responds to and brings about changes － by implementing management that is conscious of sustainability and the cost of capital, with the aim of realizing our long-term vision.
