GETTING BACK ON THE GROWTH PATH
2009 was a year of two halves
In 2009 4Q, Sumida managed to be in the black at the operating income level for a second successive quarter. Sumida has through a fundamental organisation restructuring managed to recover strongly in the second half of 2009 to the extent that it has almost broken even on an operational basis for the full year.
Sumida has become leaner, more integrated, and more customer-focused than ever before. The foundation for getting back on the growth path has been laid in 2009.
Sumida recognises that the recovering global environment is still highly fragile and volatile. Structural risks still exist in the global economy, and recovery is uneven in the developed and emerging economies, with the latter growing significantly faster.
Triple Ex is now more than a Mid-Term Business Plan
The Triple Ex (Exceptional Execution, Extraordinary Technology, Exemplary Global Management) framework from the previous mid-term business plan has been retained as a longer term fundamental strategy to guide Sumida towards its long-term vision of becoming the “One and Only” – a unique company leading all others. The Annual and Mid-Term Business Plans are guideposts or milestones on the way to achieving our Vision.
“5-3-2-100” – the Business Plan for 2010
We have chosen “5-3-2-100” to represent our business plan for 2010. This is the summary and rallying call for all Sumida staff. It stands for 50 billion JPY turnover, 3 billion JPY operating income, 2 billion JPY net income, 100 JPY per share.
This represents a considerable improvement over our performance in 2009. However, we believe that even though it is challenging, 5-3-2-100 is a worthwhile target for us to strive for. It is an important step for us to take towards sustained and profitable growth.
Mid-Term Business Plan 2010-2012
Sumida has also announced its mid-term business plan for 2010-2012. This replaces the previous one which was suspended owing to the economic crisis that started in 2008. The new Mid-Term Business Plan 2010-2012 aims to bring Sumida back to its previous peak business performance in 2007 by the end of 2012, when Sumida reached an annual turnover of 70.2 billion JPY, an operating income of 4.7 billion JPY, and a net income of nearly 3 billion JPY.
The key implementation strategies for the Business Plan are
- Exploit the use of the Global One Sumida organisation structure, using business units to focus on market growth,
- accelerate the progress of the Sumida Silk Road to create a cost-effective manufacturing and logistics network responsive to customer needs on a global and regional level,
- invest in development of staff (leaders and common values among all) to create the human capital necessary for sustained growth and excellence.
Sumida will use these strategies to focus on consumer electronics markets, automotive markets, and potential growth markets in the industrial category (e.g. alternative energy, medical). For consumer electronics, Sumida will place its priorities and resources on the consumer electronics goods that are expected to grow fastest in the next few years; it will also streamline its supply chain to meet the shortening lead times and costs pressures in the consumer markets. For automotive markets, Sumida will grow the market share of its market leading products (ABS coils, Xenon igniters, keyless antennas) by optimising its present models, while also preparing the next generation models. In addition to these two main markets, Sumida has entered into promising markets by acquiring companies with complementary technologies – Sumida intends to deepen its penetration into such markets by merging its technology and products with the acquired ones.
Sumida believes that the goals it has set in its new Midterm Business Plan are attainable because of the foundation it has laid, the measures it continues to take, and the spirit and resilience that its staff have demonstrated in meeting the crisis.
Shigeyuki Yawata, CEO of Sumida Group