Nippon Shokubai Group formulated the new mid-term management plan "TechnoAmenity for the future-I" starting in FY2022.
This page summarizes the key points of this mid-term management plan.
Nippon Shokubai Group formulated the new mid-term management plan "TechnoAmenity for the future-I" starting in FY2022.
This page summarizes the key points of this mid-term management plan.
The key points of the mid-term management plan are summarized in a Q&A format. Please click on the panels below for more information.
Nippon Shokubai has always provided high-quality chemical products using its unique technologies. As the customer needs become more complex and the market changes more rapidly, we have striven to not only strengthen existing businesses but also create alternative products and businesses. This has had some success in strengthening the competitiveness of existing businesses, but commercialization of new products and businesses is still underway. Environmental initiatives will also be indispensable in realizing a sustainable society.
The Materials Business is likely to be greatly impacted by the market environment and faces a fiercely competitive environment. For this reason, the challenge for Nippon Shokubai is to escape from our current business structure that relies on the Materials Business. Therefore, we must shift our focus from the Materials Business to the Solutions Business centered upon unique high-value added approaches to overcome the challenges faced by each customer. We will quickly build a foundation to transform into an organization that can provide solutions tailored to each customer issue.
The current mid-term management plan defines the first three years of specific actions (FY2022–FY2024) to solidify a foundation in each of our fields and spearhead various initiatives toward transformations that will accomplish our long-term vision for FY2030.
Nippon Shokubai will further initiatives to achieve its targets through FY2024 via business, environmental, and organizational transformations.
Expand the Solutions Business
Achieve the Materials Business Resilience
Nippon Shokubai will strengthen its ability to propose solutions to customers while investing resources into selected markets in an effort to expand the Solutions Business. We will also build a more resilient business structure by strengthening the profitability of the Materials Business and improving added value through promotion of sustainability.
Nippon Shokubai is building a platform to vitalize cross-organizational initiatives that will strengthen the ability to make solution proposals.
Select markets to leverage strengths
Enhance our ability to understand customer challenges
Strengthen solution proposals
Establish timely production systems
Nippon Shokubai will rapidly build systems to strengthen its ability to make proposals to customers. We will set up Business Planning & Development Departments in Solutions Divisions and focus the investment of resources therein to strengthen the planning, development, and marketing capabilities.
Solutions business
We have set the targets below in each business in an effort to strengthen the Solutions Business.
* This table can be scrolled horizontally
Nippon Shokubai aims to reach record-high earnings in FY2024 through the expansion of the Solutions Business.
The Solutions Business aims to achieve a 35% sales ratio and 50% operating profit ratio in FY2024 as a segment resilient to changes in the external business environment.
* This table can be scrolled horizontally
| FY2021 Forecast | FY2024 Targets | FY2030 Goals | ||
|---|---|---|---|---|
| Financial targets |
Operating profit | 27 billion yen | 33 billion yen | Approx. of 60 billion yen |
| Operating profit（excludes surging market prices） | 19 billion yen | - | - | |
| Solutions Business operating profit | 8.5 billion yen | 17 billion yen | Approx. of 40 billion yen | |
| ROE | 6.6% | 7.5% | 9% or higher | |
| ROA | 6.4% | 6.9% | 9% or higher | |
| Total shareholder return ratio | 33.4% | 50% | - | |
| New product Revenue (Non-consolidated, excluding new SAP products, and launched within five years) |
10 billion yen | 28 billion yen | - | |
| Investments | Growth investments and investments to remain competitive | - | 120 billion yen (Cumulative total from FY2022 to FY2024) |
400 billion yen (Cumulative total from FY2022 to FY2030) |
Strike an ideal balance of investments to grow and remain competitive with shareholder returns to achieve a 7.5% ROE and 6.9% ROA by the end of the mid-term management plan. (FY2024)
Nippon Shokubai is a company providing chemical products to other businesses. We buy raw materials from petroleum refineries and other companies and provide products to be used as materials such as for daily necessities, automobiles, and coatings. We are proud to hold the top share for the superabsorbent polymers used in disposal diapers as well as acrylic acids, which are one raw material of superabsorbent polymers.
Since its founding in 1941, Nippon Shokubai has been cultivating research and development capabilities as well as production technologies while continuously contributing to the prosperity and comfort of society by providing chemical materials essential to people and society.
The business environment surrounding the chemical industry is dramatically changing. Chemical products require even broader functionality with a larger presence on the global stage. A company cannot satisfy the rapidly changing needs of the world with a single-function material. Meanwhile, many companies and organizations are also driving forward initiatives to achieve carbon neutrality by 2050.
This trend creates a major opportunity for Nippon Shokubai as a company delivering various materials and technologies. We aim to foster even greater corporate growth by solving social issues through our products and technologies.
Nippon Shokubai has revised its external reporting business segments to the Materials Business and the Solutions Business as of FY2022.
The Materials Business mass-produces and provide a stable supply of high-quality materials to businesses around the world. The Materials Business deals in superabsorbent polymers and acrylic acids, which are main products of Nippon Shokubai.
The Solutions Business capitalizes on the research and development capabilities cultivated by Nippon Shokubai to provide unique solutions to overcome the problems that customers face. The ability to fully understand the needs and challenges of customers and propose optimal solutions creates new added value.
The new mid-term management plan transforms our existing portfolio that focuses on the Materials Business and expands the Solutions Business, which has high earnings potential. In FY2024, the final year of the plan, we aim to reach the record-high earnings of 33 billion yen while increasing the operating profit ratio of the Solutions Business to 50%.
Numerical Targets
| FY2021 Forecast*1 | FY2024 Targets | |
|---|---|---|
| Operating profit | 19.0 billion yen*2 | 33.0 billion yen |
| ROE | 6.6％ | 7.5％ |
| ROA | 6.4％ | 6.9％ |
The "TechnoAmenity for the future" long-term vision announced in April 2021 lays out our long-term vision for FY2030. Therein, this new mid-term management plan is positioned as the first three-year plan to solidify a foundation and execute transformations to achieve FY2030 Goals.
Nippon Shokubai must uncover and propose integrated solutions to the latent challenges faced by customers in order to further develop the Solutions Business. To do this, we will establish Business Planning & Development Departments in Solutions Divisions, link digital marketing and R&D organizations, and carry out planning, development, and marketing activities across the entire organization. Nippon Shokubai will also invest management resources with focus on businesses in growth fields. Moreover, we will restructure the R&D organization and strengthen research and development functions to achieve carbon neutrality.
Carbon neutrality by 2050 does not only create a challenge for Nippon Shokubai but also new business opportunities.
We emphasize research and development activities to develop materials and technology that can help reduce greenhouse gas emissions by expanding battery and hydrogen use, as well as gain the technology necessary to reduce our environmental impact, such as technology to collect and recycle carbon dioxide. Our use of bio-based raw materials and renewable energy as an alternative to traditional petrochemical-based materials is another initiative to reduce carbon dioxide emissions throughout the entire supply chain.
Click here to see our environmental conservation initiatives.