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Toward
Toward Completion
Completion of
of the
the
02/04
Three-Year
Management
02/04 Three-Year Management Plan
Plan
--Net
NetSales
Salesover
over¥1
¥1trillion
trillionin
inFY
FY03,
03,ROE
ROEover
over10%
10%in
inFY
FY04
04--
Kunio Egashira, President
Ajinomoto Co., Inc.
May 20, 2004
Table of Contents
I.Management
I.Management Policies
Policies
II.Business
II.Business Strategy
Strategy for
for the
the Year
Year to
to March
March 05
05
“Selection
“Selection and
and Concentration”
Concentration” and
and “Expansion”
“Expansion”
III.Corporate
III.Corporate Strategy
Strategy
“Becoming
“Becoming aa Truly
Truly Global
Global Company”
Company”
I.Management
I.Management Policies
Policies
1.
1. Group
Group Management
Management
Philosophy
Philosophy
2.
2. 02/04
02/04 Three-Year
Three-Year
Management
Management Plan
Plan
3.
3. Performance/Forecasts
Performance/Forecasts
3
I-1. Management Philosophy of the Ajinomoto Group
“Our
“Our philosophy
philosophy is
is to
to contribute
contribute to
to
significant
advances
in
food
and
health
significant advances in food and health on
on
aa global
basis
and
ultimately
to
create
a
global basis and ultimately to create a
better
better life
life for
for all.”
all.”
From
From its
its beginnings
beginnings in
in Japan,
Japan,
Ajinomoto
aims
to
be
a
global
Ajinomoto aims to be a global corporation
corporation
in
in food
food and
and amino
amino acid
acid products.
products.
4
I-2. 02/04 Three-Year Management Plan
1.
Basic
1.Expand
Expandbusiness
businessin
ingrowth
growthsectors
sectors
Basic
2.
Shift
toward
a
high-earnings
structure
2.
Shift
toward
a
high-earnings
structure
Strategies
Strategies
3.
3.Strengthen
Strengthencorporate
corporategovernance
governance
4.
Nurture
personnel
4. Nurture personnelcapable
capableof
ofworking
working
in
the
global
arena
in the global arena
5.
5.Operate
Operatein
inharmony
harmonywith
withsociety
societyas
asaagood
good
corporate
citizen
corporate citizen
Numerical
Numerical Final
Final Year
Year Targets
Targets (initial
(initialplan)
plan)
Targets
Targets
Net
sales
¥1,100
Net sales
¥1,100 billion
billion
Operating
income
¥75
billion
Operating income
¥75 billion
Net
¥45
Netincome
income
¥45 billion
billion
ROE
10%
ROE
10% or
or more
more
5
I-3. Performance/Forecasts
Net sales
Operating
income
(Net sales)
1,200
1,000
908.5
814.5
Net
income
943.5
987.7
(Billions of yen) (Income)
1,039.5
1,080.0 100
80
829.4
800
60
600
400
13.2
49.0
37.8
33.0
28.7
17.6
200
18.8*
31.4
33.1
40
75.0
65.1
54.0
36.2
45.0
0
-11.5
0
-20
Mar 99
Mar 00
Mar 01
Mar 02
Mar 03
Mar 04
Results
ROE for
each year
20
3.4%
Mar 05
Target
4.4%
-3.0%
(5.0*%)
8.5%
8.6%
8.9%
*excluding charge for retirement benefits
10.0%
or more
6
II.
II. Business
Business Strategy
Strategy for
for the
the
Year
Year to
to March
March 05
05
“Selection
“Selectionand
and Concentration”
Concentration”and
and“Expansion”
“Expansion”
1.
1. Domestic
Domestic Food
Food Products
Products
2.
Overseas
Consumer
2. Overseas Consumer Foods
Foods
3.
3. Global
Global Bulk
Bulk Ingredients
Ingredients
4.
4. Pharmaceuticals
Pharmaceuticals
7
II-1. Domestic Food Products
1) Seasonings and Food Products Company
• Continued growth by strengthening core business base
¾ Focus management resources on strong brands
¾ Expand business with an international perspective, also in
fields neighboring core businesses
• Offer new value rooted in original technologies
¾ Use strengths in materials procurement, R&D,
production technologies
¾ Seek evidence-based health functions
• Thorough cost reductions
• Further strengthen reliability/safety
Raise
brand
value
8
II-1. Domestic Food Products
2) Ajinomoto Frozen Foods Co., Inc.
• Concentrate and deepen in fields
where we do best
• Maximize effects of integration with Frec
• Production system:
Reorganize in Japan, strengthen overseas
• Strengthen activities with strategic
ingredients, promote simple recipes
• Strengthen product quality from ingredients
¾Become number-one
in prepared frozen
foods
¾Secure world-class
competitiveness
9
II-2. Overseas Consumer Foods
1) Flavor seasonings continue double-digit growth
•• SE
SE Asia:
Asia: Ros
Ros Dee
Dee (Thailand)
(Thailand) 120%,
120%, Masako
Masako (Indonesia)
(Indonesia) 120%,
120%,
Ginisa
Ginisa (The
(The Philippines)
Philippines) 160%,
160%, Aji-Ngon
Aji-Ngon (Vietnam)
(Vietnam) 340%.
340%.
Tumix
Tumix (Malaysia):
(Malaysia): Launched
Launched October
October 2003
2003
•• S.
S. America:
America: Sazon
Sazon (Brazil)
(Brazil) 130%,
130%, Dona
Dona Gusta
Gusta (Peru)
(Peru) 150%
150%
Sales
Salesvolume
volumefor
foryear
yearended
endedMarch
March04
04compared
comparedwith
withprevious
previousyear
year
2) Strengthen operations in China
•• Products
Products launched
launchedin
inNovember
November2003:
2003:
Western-style
Western-style soup,
soup,Hon-Dashi
Hon-Dashi Ganbeisu
Ganbeisu (dried
(dried
scallop
scallop flavor),
flavor), MOR
MOR CHU
CHU GAOTANG
GAOTANG
•• Targeting
Targetingconsumers
consumers in
in major
major coastal
coastal cities
cities
10
II-3. Global Bulk Ingredients
Strong Number-One Strategy
Energizing
Energizing global
global supply
supply bases
bases
Ajinomoto Co.,
(Thailand) Ltd.
Ajinomoto Foods
Europe S.A.S.
Kamphaeng Phet
Factory
1) Umami seasonings for
processed food manufacturers
• MSG: Obtained factory in Europe
• Thai factory export base for nucleotides
2) Amino acids for pharmaceuticals and foods
• Meet growing demand, maintain/expand global number-one share (60%)
3) amino acid-based sweetener, aspartame
• Strategically use 2 factories in Japan and Europe (France)
to aim for number-one share as global leader (currently 35-40%)
4) Feed-use amino acids
• Maintain/expand global number-one share (currently Lysine 35%, Threonine 70%,
Tryptophan 70-80%) as global leader with 6 factories worldwide
11
II-4. Pharmaceuticals
1) Product Strategy
•• From
Fromtop
topbrands
brandsto
tostrong
strongnumber-one
number-oneproducts
products
LIVACT
LIVACTGranules,
Granules,ELENTAL,
ELENTAL,SOLITA-T,
SOLITA-T,NIFLEC,
NIFLEC,ELEMENMIC
ELEMENMIC
•• Nurture
Nurturemajor
majorproducts
productsfor
forlifestyle-related
lifestyle-relateddiseases
diseases
FASTIC
FASTIC(nateglinide),
(nateglinide),Actonel
Actonel(risedronate),
(risedronate),ATELEC
ATELEC(cilnidipine)
(cilnidipine)
•• Launch
Launchmore
morenew
newproducts
productsthan
thanin
inthe
theprevious
previousyear
year
New
Newproducts
productslaunched
launchedin
inyear
yearended
endedMarch
March04:
04:
LIVACT
LIVACTimproved
improvedgranular
granularformulation,
formulation,PNTWIN
PNTWINONEDAYBAG,
ONEDAYBAG,
HF-SOLITA
HF-SOLITABW
BWKit,
Kit,PEMIROC,
PEMIROC,Harmonic
Harmonic
2) R&D
•• Strengthen
Strengthenbusiness
businesswith
withLCM*
LCM*strategy
strategyand
andcreation
creationof
ofamino
aminoacid-based
acid-based
pharmaceuticals
(* Life Cycle Management)
(* Life Cycle Management)
pharmaceuticalsand
andfoods
foods
•• Create
Createnew
newbusiness
businessvalue
valuewith
withTNC**
TNC**using
usingParenteral
Parenteral&&Enteral
EnteralNutrition
Nutritionand
and
Dialysis
(** Total Nutrition Care)
DialysisResearch
ResearchLaboratories
Laboratories
(** Total Nutrition Care)
3) Production Logistics
•• Enhance
Enhanceproduction
productionorganization
organization(Saitama,
(Saitama,Fukushima,
Fukushima,Oigawa,
Oigawa,Shimizu
Shimizufactories)
factories)
•• Thoroughly
Thoroughlyreduce
reducecosts,
costs,improve
improvesupply
supplychain
chainmanagement
management
12
III.
III. Corporate
Corporate Strategy
Strategy
“Becoming
“BecomingaaTruly
TrulyGlobal
GlobalCompany”
Company”
1.
1. Nurture
Nurture Personnel
Personnel Capable
Capable of
of
Working
in
the
Global
Arena
Working in the Global Arena
2.
2. Strengthen
Strengthen Corporate
Corporate Governance
Governance
3.
3. CSR
CSR Activities
Activities
13
III-1. Nurture Personnel Capable of Working
in the Global Arena
(Promotion of the AJINOMOTO WAY)
Use
Use the
the Ajinomoto
Ajinomoto Group
Group Training
Training Center
Center
(scheduled
(scheduled to
to open
open in
in November)
November) to:
to:
1.
1. Nurture
Nurture global
global leaders
leaders who
who promote
promote
Group
management
Group management
2.
2. Hand
Hand down
down Group
Group management
management
philosophy
philosophy from
from upper
upper management
management
(Transmit
“Ajinomoto
DNA”)
(Transmit “Ajinomoto DNA”)
3.
3. Enhance
Enhance Ajinomoto
Ajinomoto HR
HR Values
Values to
to
raise
raise Ajinomoto
Ajinomoto Group
Group value
value
14
III-2. Strengthen Corporate Governance
Year ended March 03
CONTINUOUS PROGRESS
•• Introduced
Introduced internal
internalcompany
companysystem
system
¾Delegate
¾Delegate authority
authority and
and responsibility
responsibility
¾Make
¾Make businesses
businesses independent,
independent, strengthen
strengthen competitiveness
competitiveness
Year ended March 04
•• Reduce
Reduce number
numberof
ofdirectors
directors (from
(from30
30 to
to12)
12)
Include
Include one
one outside
outside director
director
•• Introduce
corporate
executive
officer
system
Introduce corporate executive officer system
•• Establish
EstablishNominating
Nominating Advisory
AdvisoryCommittee,
Committee,
Compensation
Compensation Advisory
AdvisoryCommittee
Committee
Accelerate
decisionmaking
Year ending March 05 (scheduled)
••
••
••
Outside
Outsideauditors
auditors(CPA,
(CPA, attorney)
attorney)
Reorganize
Reorganize Corporate
Corporate Division
Division and
andcompanies
companies
Non-Japanese
Non-Japanese Corporate
Corporate Executive
Executive Officers
Officers
15
III-3. CSR Activities
Create a working group from CSR Committee staff to study
CSR activities suitable for the Ajinomoto Group
Proactive response to environmental issues
• Ajinomoto Group Zero Emission Activities
Voluntary worldwide unified standards for various environmental
loads
Sample targets:
Resource recovery of waste and by-products: 99.0%or higher
Wastewater BOD 10ppm, nitrogen 5ppm: lower than most advanced
regulatory standards
Spraying fertilizer produced from liquid
by-products on a sugar cane field in
Thailand
Social responsibility activities
• Promoting specific corporate activities suitable
for Ajinomoto from a long-term perspective
¾ International cooperation programs related to food,
health and healthcare (4 countries, 7 programs)
¾ Social contribution foundations in 5 countries
(Thailand, Indonesia, Japan, Brazil, Peru)
¾ Implementation of Ajinomoto Group Citizenship Day campaign
Establishment of Ajinomoto Foundation
for Community Development in Peru
16
“Becoming a Truly Global Company”
A unique company trusted
by people worldwide
Trusted
Trustedproducts
products
Innovative
Innovative
technologies
technologies
Reliable
Reliable and
and safe
safe
brand
brand
Individual,
Individual, creative
creative
personnel
personnel
17