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Q : What does “Stage 10” mean?
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A : After the Taiyo Nippon Sanso merger in October 2004, we launched a challenge to become a major global industrial gas company from Asia, and we were able to achieve our goals during our medium-term business plan. Now, based on those results, we are aiming to advance from being a major Asian company to the next stage: becoming a major global company. “Stage 10” – the challenge to become a global company, part II – is the new plan we formulated to reach this next stage. |
Q : What is the “Triple 10” that Taiyo Nippon Sanso is aiming for?
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A :
The Taiyo Nippon Sanso Group has set three targets in its aim to become a global company:
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Capture 10% share of the global market, as a benchmark of growth. |
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Achieve an operating margin of 10%, by improving quality as well as quantity. |
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Achieve an ROCE of at least 10%, as a measure of overall efficiency.
By achieving these three 10s – the Triple 10 – the Taiyo Nippon Sanso Group will be able to continue its challenge to become the global company we want it to be. |
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Q : How does Taiyo Nippon Sanso plan to achieve its aim of capturing 10% share of the global market?
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A : Since the Group will not be able to capture 10% of the global market even if it reaches its target of ¥600,000 million in sales for fiscal year 2010, we are planning to achieve this goal through M&A in addition to internal growth. |
Q : What is the primary theme of the Group’s new medium-term business plan?
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A : In our efforts to strengthen Group management, we have been actively focusing on issues such as the horizontal integration of the carbon dioxide business and the integration and reorganization of the cryogenic devices and semiconductor engineering companies in order to expand profitability and make operations more efficient. Since further strengthening and accelerating those efforts would promote profitability and greater efficiency, we have made this one of the primary themes in the new medium-term business plan and aim to further strengthen consolidated management. |
Q : What is the primary focal point in the new medium-term business plan?
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A : The primary focal point is to accelerate growth accompanied by profits by concentrating management resources on growing markets and regions. The growth markets are typically in high-tech industries such as semiconductors, liquid crystals, and photovoltaics. We also have expectations in the so-called heavy industries such as steel, chemicals, and shipbuilding that have been dramatically improving per-capita productivity over the past few years and transforming from a mature industry to a growth industry. In the area of growth regions, though severe economic conditions are being predicted as a result of financial worries and credit crunches caused by the sub-prime problem, we are focusing on the United States which is still the number one economy in the world with considerable room for further growth, Asian countries such as China, which is continuing to enjoy rapid growth, and newly-emerging countries and resource-rich countries such as India and Russia. |
Q : Why is investing in the field of electronics one of the focal points of the medium-term business plan? What are Taiyo Nippon Sanso’s strengths in electronics? What strategies for expansion does the Company have in this area?
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A : We look at high-tech industries such as semiconductors, liquid crystals, and photovoltaics as growth markets and growth industries, and to accelerate our growth and profits, our strategy is to concentrate management resources on growth industries. Taiyo Nippon Sanso has high-performance plant technologies for manufacturing high-purity nitrogen which is used in large quantities in the field of electronics. In addition, Taiyo Nippon Sanso not only sells gases themselves such as semiconductor material gases but also provides total systems and technologies for handling gases. In the area of bulk gases and semiconductor material gases, Taiyo Nippon Sanso has know-how for managing quality and providing stable supplies of gases all the way to the location where the gases are actually used. Regarding hazardous gases in particular, Taiyo Nippon Sanso can provide services that include various types of equipment for handling gases safely. Taiyo Nippon Sanso’s ability to provide total services, including equipment installation, strengthens its competitive edge. The Company is strengthening its strategy for upstream processes to ensure greater stability in supplying gases. We believe that our position as a manufacturer enables us not only to provide stable supplies of gases but to translate our strengths into profits as well. We would also like to take advantage of links with users in our R&D programs in state-of-the-art fields aimed at future expansion. We will leverage our MOCVD business to develop applications for LEDs. |
Q : How is Taiyo Nippon Sanso going about identifying current issues and working toward finding solutions?
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A : Talking of three years in our medium-term business plan, we must address numerous issues, including how we will develop the gas business in growth regions such as China and other Asian countries, including winning new on-site projects. A number of large proposals are emerging, however, numerous issues remain to be solved concerning capital makeup, technology transfer, and many other problems. Nonetheless, we need to tackle these issues to overcome global competition. We also need to lay a foundation that will enable us to create new areas of business for the next medium-term business plan.
Next, to ensure ongoing growth into the future, it is essential for us to develop human resources from a long-term point of view. Since the Taiyo Nippon Sanso Group’s range of business is becoming increasingly global, the new medium-term business plan is focusing more on the Group’s vision to become a global company. The most important component of this challenge is the need to train people who can work effectively in a global environment. To this end, we have started a training program aimed at imparting the management skills required for global management and upgrading specialized technical skills that will enable our personnel to perform on a global level.
We also would like to think of ways that human resources can be correctly deployed and utilized as a Group. We believe that the time has come when we practice this based on skills and actual abilities. |
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