Top Message

SAKATA INX Group's Long-term Strategic Vision for 2030 is to achieve net sales of 300 billion yen, an operating profit margin of 8%, and an ROE of 10%. We have completed the first phase of our efforts to achieve these targets and have moved to the second phase from FY2024.
US and Asia grew in CCC-I
Net sales and ordinary income targets were met
During the Medium-term Management Plan 2023 (CCC-I) period, which began in FY2021, unexpected external changes sometimes caused profits to fall significantly. Still, in the end, we were generally able to achieve our targets. Especially, profit in the United States increased significantly. We attribute this outcome to the implementation of business structure reforms, including pricing strategies on the business side and improvements in each product line. In Asia, sales increased significantly in four key countries: India, Indonesia, Thailand and Vietnam. This was primarily due to an increase in sales volume in Thailand and Vietnam, where many global companies are located.
Meanwhile, sales of information media in Japan continue to decline. We are developing an efficient framework to fulfill our supply responsibilities and ensure business continuity. This will be achieved by restructuring our production system and promoting partial collaboration with peers. We are reducing the size of our supply structure in order to align it with the supply-demand balance. Some production facilities at the Hanyu Plant have already been eliminated, and the production infrastructure at the Tokyo Plant has been reorganized. I would like to create an environment where employees can take on new challenges by identifying emerging needs in the information media business as the business structure changes.
CCC-II started in FY2024
We will invest proactively to expand our businesses and enhance profitability
The Medium-term Management Plan 2026 (CCC-II), which started in January 2024, represents a phase of expansion and stable growth. The company's objective is to achieve sales of 270 billion yen and an operating income of 18 billion yen in FY2026, its last fiscal year. A particular emphasis is placed on profit margins. We are determined to compete with high value-added products and services. Our group's Purpose is to "Develop a communication culture that makes people's lives more enjoyable." To materialize this Purpose, our Long-term Strategic Vision sets an operating margin target of 8%. We are working to achieve this goal.
Major capital investments include a new plant in Sao Paulo, Brazil, which will begin operations in 2024, and a new plant in Wrightstown, Wisconsin, U.S.A., which will begin operations by the end of 2025. Furthermore, as part of our digital transformation (DX), we will expand the ERP system that we launched in Japan in 2024 to other parts of Asia. We will build a system that will facilitate the direct and rapid use of data accumulated in management and R&D for business operations. Furthermore, we are committed to transforming our business model in order to generate new value. In order to promoting business activities with an awareness of the cost of capital, each business unit made a thorough effort to manage by ROIC (return on invested capital) in the previous Mediumterm Management Plan. This has clarified how much capital has been invested in each business and how much has been converted into profit. In addition, capital efficiency has been further improved by shortening the time to collect receivables and improving the cash conversion cycle. In the current Medium-term Management plan, we are implementing the PDCA cycle.
In CCC-II, we will continue to pursue initiatives based on three strategic directions
Expand printing inks / digital & specialty product businesses
In response to the need to reduce environmental impact, we are committed to further developing environmentally-friendly packaging ink. Our own brand Botanical Ink series is just one example of our ongoing efforts in this area. We are also focused on paper-based and recycling-oriented products and services to promote the shift away from plastics.
We will pursue growth in sales of digital and specialty products in rising countries and in areas where demand will grow in the future. To this end, we will promote global sales by strengthening strategic partnerships and cooperation among Group companies. In the industrial inkjet inks sector, we will expand into new markets for food, clothing, and housing, while also promoting environmentally friendly products. In display materials such as pigment dispersions, we will increase our share of the LCD market, develop new products, and expand into new areas by applying our technology.

To strengthen our global operations, we established a company in Malaysia in February 2024 to oversee our local subsidiaries in six Asian countries. The company will consolidate resources and information from each country, serve as a single point of interaction with brand owners, and formulate strategies for the entire Asian region that transcend country-specific frameworks. The Company aims to accelerate growth by strengthening cooperation among Group companies and further increase operating income in the Asian segment from the planned level. This will be achieved by improving procurement capabilities and reducing inventories. In particular, its objective is to expand our market position to become the leading provider of packaging solutions in Indonesia, where we have a competitive advantage.
Global efforts are increasingly needed to address environmental issues. Particularly in Europe, where such efforts are more advanced, various platforms have been established to reduce environmental impact, such as recycling and mono-materialization. If brand owners participate in those platforms, we should also join them to build a relationship with them. The regional management company will serve as a contact point for communication to work with customers and brand owners in an integrated manner. This way we will work to reinforce consolidated management.
In CCC-II, we will continue to pursue initiatives based on three strategic directions
Expand printing inks / digital & specialty product businesses
In response to the need to reduce environmental impact, we are committed to further developing environmentally-friendly packaging ink. Our own brand Botanical Ink series is just one example of our ongoing efforts in this area. We are also focused on paper-based and recycling-oriented products and services to promote the shift away from plastics.
We will pursue growth in sales of digital and specialty products in rising countries and in areas where demand will grow in the future. To this end, we will promote global sales by strengthening strategic partnerships and cooperation among Group companies. In the industrial inkjet inks sector, we will expand into new markets for food, clothing, and housing, while also promoting environmentally friendly products. In display materials such as pigment dispersions, we will increase our share of the LCD market, develop new products, and expand into new areas by applying our technology.
To strengthen our global operations, we established a company in Malaysia in February 2024 to oversee our local subsidiaries in six Asian countries. The company will consolidate resources and information from each country, serve as a single point of interaction with brand owners, and formulate strategies for the entire Asian region that transcend country-specific frameworks. The Company aims to accelerate growth by strengthening cooperation among Group companies and further increase operating income in the Asian segment from the planned level. This will be achieved by improving procurement capabilities and reducing inventories. In particular, its objective is to expand our market position to become the leading provider of packaging solutions in Indonesia, where we have a competitive advantage.
Global efforts are increasingly needed to address environmental issues. Particularly in Europe, where such efforts are more advanced, various platforms have been established to reduce environmental impact, such as recycling and mono-materialization. If brand owners participate in those platforms, we should also join them to build a relationship with them. The regional management company will serve as a contact point for communication to work with customers and brand owners in an integrated manner. This way we will work to reinforce consolidated management.

Meet new market challenges
In order to meet the challenges of the new market, our strategy is based on four keywords: Decarbonization, improving quality of life (QOL), comfort and convenience, and safety and security. We will drive these efforts through open innovation with external parties while leveraging our core competencies. We will develop promising products and services that lead to commercialization and profitability in the four areas of electronics, energy, bio-based and non-fossil materials, and healthcare, intending to achieve sales of 5 billion yen in the new areas by FY2026.
I proposed these four strategic keywords as pillars when I was the General Manager of the Corporate R&D Division. All of these keywords are related to sustainability. Their goal is to address societal issues, such as ensuring safety and security and reducing the environmental burden. With this in mind, we will bring sustainable solutions to new markets using our proprietary technologies, such as materials and products that utilize environmentally-friendly bio-materials. In the field of electronics, we are considering actively entering the field of flexible devices. This would allow us to capitalize on the mounting process of various components, which will be printed in the field of electronics conductive chemicals. This is a technology closely related to our business development field. In January 2024, we entered into a business alliance with Electroninks, an American company that is a world leader in Metal Organic Decomposition (MOD) inks. We will pursue collaboration in product development to develop highly functional materials. We will also partner with other leading companies to ensure the presence of our technologies and materials in printed electronics as we grow our businesses. In the energy field, we are developing conductive adhesive materials and other products by applying printing ink technology to areas related to energy conservation and green energy, durable consumer materials such as solar panels, and energy range.
Strengthen ESG/sustainability efforts emphasizing the global environment and local community
In terms of Group corporate governance, we have established an International Advisory Board, which includes executives from our overseas affiliates as members, to discuss issues such as product strategy, capital investment, mergers and acquisitions, and the global management structure for future business expansion. In addition, to further bolster consolidated management, Bryce Kristo, CEO of our U.S. subsidiary, was appointed as a Senior Executive Officer of our Company. Furthermore, we have appointed a director in charge of each segment to clarify accountabilities and to enable each director to assume greater responsibility in his or her respective area in order to improve capital profitability.
Last year, we merged the Human Resources Division and the General Affairs Division into the Human Capital & General Affairs Division, hoping that this would help create value and nurture ambitious dreams. We recognize the importance of human capital as a driver of medium- and long-term value creation, and the realization of a sustainable society. In order to create and drive a new future, we are vigorously developing human resources and improving our internal environment so that every one of our employees can continue to boldly embrace change and innovation. As for the DEIB*1 initiative, DEIB can only be achieved when an organization and its culture encourage people of different races, ages, genders, and mindsets to maximize their abilities, and when such thinking leads to improved productivity and results. We should not be satisfied with having created an organization but continue to create systems, provide training, and offer opportunities for diverse employees to perform better and try new things. We are also working to create a mechanism for employees to make suggestions directly to management. According to the results of our internal survey, the level of satisfaction with engagement increases every year, but I feel that the voices of individual employees still rarely reach the management. I am trying to visit the production site to have more opportunities for two-way communication, such as town hall meetings. I want to make other improvements to encourage more employees to speak up. We drive these transformation efforts in collaboration with the Corporate Communications Department, which is integrally responsible for internal and external communications, brand building, and brand penetration.
The scope of our environmental initiatives has expanded to include the reduction of greenhouse gas (GHG) emissions, the achievement of SBT certification*2, and TNFD biodiversity initiatives. Our Group target for Scope 1&2 CO2 emission reduction is 58.8% reduction by FY2034, in comparison to figures recorded in FY2022. We are promoting production efficiency, introduction of solar power generation systems at factories, energy conservation, and other measures. We will continue to discuss Scope 3 initiatives throughout the supply chain, including raw material manufacturers. We will also respond to the European Corporate Sustainability Reporting Directive (CSRD), which came into force in January 2023, to comply with its disclosure standards.
*1 | Diversity, equity, inclusion, and belonging |
*2 | Science Based Targets: Greenhouse gas emission reduction targets that are scientifically consistent with the goals of the Paris Agreement. |
To improve return on capital and achieve sustainable growth.
Our cross-shareholdings represent 5% of the total capital, excluding the shares of SIIX, our equity method affiliate. We have set certain standards and review them periodically to reduce them year after year. Our cash allocation during the three-year period of the current Medium-term Management Plan aims to improve capital profitability and achieve sustainable growth. This will be achieved by balancing strategic investments for the future (including business investments as well as M&A and start-up investments) with financial soundness and shareholder returns. We will also achieve a P/B ratio of 1.0x or more as soon as possible by gaining the understanding of shareholders and investors on the effectiveness and feasibility of such investment through IR activities. Our shareholder return policy is to actively and consistently pay dividends and flexibly repurchase our shares. We hope to achieve a total return of at least 50% or a DOE of at least 2.5%, whichever is higher, throughout this Medium-term Management Plan. To achieve our Long-term Strategic Vision, we need to direct our efforts toward investments in growth areas and new businesses. We will secure a dominant position by completing business restructuring as soon as possible. We will also strive to enhance our global competitiveness, branding, and corporate value by creating high-value-added products that our customers value.
At a town hall meeting last year, an employee asked how SAKATA INX would survive for the next 100 years. We started our ink business about 130 years ago in Osaka, and have become a global company with overseas sales accounting for more than 70% of our total sales. In regions such as Asia, Latin America, the Middle East, and Africa, where populations are growing and economic development is continuing, we will expand our existing business while maintaining a firm grip on the situation. On the other hand, the population in Japan and other developed countries will continue to decline, and the demand for printing inks will gradually decrease. I have always believed that constant change and innovation leads to evolution.

To ensure our continued survival and success in the future, we will continue to change, transform, and evolve SAKATA INX by expanding our market share through the development of sustainable products that require high technological capabilities. We will also apply the fundamental technologies we have developed over 130 years to expand into new businesses.
At a town hall meeting last year, an employee asked how SAKATA INX would survive for the next 100 years. We started our ink business about 130 years ago in Osaka, and have become a global company with overseas sales accounting for more than 70% of our total sales. In regions such as Asia, Latin America, the Middle East, and Africa, where populations are growing and economic development is continuing, we will expand our existing business while maintaining a firm grip on the situation. On the other hand, the population in Japan and other developed countries will continue to decline, and the demand for printing inks will gradually decrease. I have always believed that constant change and innovation leads to evolution.
To ensure our continued survival and success in the future, we will continue to change, transform, and evolve SAKATA INX by expanding our market share through the development of sustainable products that require high technological capabilities. We will also apply the fundamental technologies we have developed over 130 years to expand into new businesses.
