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Heralding the Company's 70th Anniversary

  • Q. What are your thoughts after celebrating the Company's 70th anniversary and your aspirations going forward?

  • A. I would like to express my deep appreciation to all stakeholders.

I would like to take this opportunity to offer my heartfelt thanks to all stakeholders as well as the Group's past and current employees for their support and hard work.

70 years ago, on March 3, 1947, Sekisui was established with the aim of being a comprehensive plastics business. This was a new and innovative material in Japan at that time. Since then, we have expanded our business by providing products which meet our daily needs, such as tape and PVC buckets, materials that support government and private sector infrastructure such as pipes and guttering, high-performance materials for electronics and vehicles, and detached houses. Over the years, there have been both frustrations and expectations, but our employees have always come together to solve these issues based on the Sekisui Chemical Group's "3S Principles" (Service, Speed, and Superiority). By working together and combining our strengths, we have constantly overcome challenges and opened new doors.

In line with our Group Vision, we will continue to contribute to improving people's lives and the global environment by further developing the frontiers of "residential and social infrastructure creation" as well as "chemical solutions" through our prominent technology and quality. Furthermore, we will double our efforts in order to maintain our strong corporate presence for 100 years and beyond.

Operating Environment of the Sekisui Chemical Group

  • Q. Tell us about the business environment in fiscal 2016.

  • A. We achieved record high profits in fiscal 2016 by strengthening our earnings power while at the same time implementing growth strategies.

In overall terms, the rate of global economic growth in 2016 fell short of the level recorded in 2015. Despite a modest recovery during the second half of the year, this slowdown was largely attributable to stagnant conditions in the U.S., concerns surrounding a downturn in the rate of economic growth in China, and financial market confusion as a result of the U.K.'s decision to withdraw from the European Union throughout the first half.

Amid sudden and dramatic fluctuations in foreign currency exchange rates and other changes in the external environment, the Sekisui Chemical Group worked diligently to strengthen its earnings power while at the same time implementing frontier, co-creation, and innovation business strategies. Thanks also to efforts aimed at building a business structure that is resilient to changes in the external environment and capable of securing sustainable growth, we achieved record highs at each major level of profit. In specific terms, operating income climbed 6% compared with the previous year.

While future trends in the Group's operating environment are uncertain, the need to improve the quality of people's lives together with the environment remains constant. Looking ahead, we are confident in our ability to secure growth by capitalizing on opportunities through each of our business activities.

About the Medium-term Management Plan

  • Q. What results did you achieve under the Medium-term Management Plan and what are the essential features of the new Medium-term Management Plan that began from fiscal 2017?

  • A. Under the three-year period of our recently completed Medium-term Management Plan, we were able to make certain advances (SHINKA) toward the next phase of growth.

Throughout the three-year period from fiscal 2014 to fiscal 2016 of the previous Medium-term Management Plan, external operating conditions were volatile. Despite this volatility, the Sekisui Chemical Group reported three consecutive periods of record high operating income. By the end of the Plan, our operating income ratio and ROE came in at 9% and 11.2%, respectively. This exceeded original targets. For the most part, profit growth was largely driven by higher sales in global strategic fields. This included the Automobiles and Transportation field, which has positioned eco-friendly materials as a growth domain, and the Life Science field, where the focus has been on growth in diagnostic reagent systems. Moreover, bold and timely decisions regarding structural reforms and other endeavors were critical in improving profitability and securing definitive profit growth. In overall terms, the three-year period of the recently completed Medium-term Management Plan has allowed us to make certain advances (SHINKA) toward the next phase of growth.

Under the new "SHIFT 2019 -Fusion-" Medium-term Management Plan, the Sekisui Chemical Group is taking one step forward toward a new phase of growth. This new phase encompasses qualitative growth and the need to improve the quality of people's lives and the Earth's environment as espoused under the Group Vision, and a qualitative transition through ongoing improvements in profitability and the allocation of resources to promising fields after taking into consideration changes in demand from 2020 and beyond. In this manner, the Group has codified efforts to enhance its corporate value over the long term. As a result, we will rally to calls for a major "SHIFT*" as we endeavor to expand the scale of our performance as well as the quality of our growth. In addition to providing a roadmap for achieving our numerical targets for fiscal 2019, through a such initiatives as aggressive strategic investment, the Fusion of technology, opportunity, and resources, and steps to further strengthen CSR management, the new Medium-term Management Plan provides the framework for putting in place a structure that is capable of securing the next phase of growth.

*
SHIFT includes the meaning to change the quality of growth in both the scale of business results and corporate attitude, and is an acronym that describes the basic strategy involved. S (Sustainable) and H (Human resources) provide the platform for building a sustainable business base from E/S/G viewpoint. I (Innovation), F (Frontier), and T (Transformation) encapsulate the Group's focus areas to date of "innovation," "pioneering frontiers," and "strengthening earnings power." Positioning each of these 3 actions as important components of our basic strategy, we will accelerate the pace of growth by incorporating the additional component of "Fusion."
*
For details of “SHIFT 2019 -Fusion-” please refer toSee Open with New Windowthe Corporate Governance for details.the FY2017-FY2019 Medium-term Management Plan presentation.

About the New CSR Medium-term Plan

  • Q. The Group has put in place a new CSR Medium-term Plan while at the same time revising its CSR conceptual scheme. What led you to taking these steps and what are the key features of the new plan and scheme?

  • A. We made sure to reflect our commitment and determination to realize our Group Vision in a newly revised CSR conceptual scheme.

  • I am convinced that fulfilling our corporate social responsibility is part and parcel of efforts to put into effect the "3S Principle" of our Corporate Philosophy. As such CSR concerns are a focal point of our management strategy. On this basis, we will work to help solve social problems and fulfill our responsibilities to society through our business processes. In addition to once again documenting our determination to further strengthen our governance platform in unison with business activities, we took steps to review important issues.

    We also positioned business categories in a matrix format according to the two "prominences" and "living and environmental contribution" axes under the new Medium-term Management Plan, and are hammering out business strategies to create a number of star businesses that are capable of solving both social and environmental issues in a substantial manner.

About Expanding the Scope of Environment-Contributing Product Application

  • Q. The application of environment-contributing products has expanded not only throughout the natural environment, but also in social contribution fields. What is the significance of this expansion?

  • A. We will channel our energies toward environment-contributing products that help address a wide range of issues identified under SDGs.

To date, our efforts to develop environment-contributing products have focused on concerns for the natural environment. More recently, we have placed equal weight on contributing to society in order to expand our endeavors. Taking into consideration our desire to improve the quality of people's lives as outlined in our Group Vision, we have taken steps to clarify our ambitions toward solving issues related to the social environment. In this regard, we are upgrading and expanding the development of environment-contributing products that are more closely aligned to this Group Vision. At the same time, we are placing considerable attention on creating environment-contributing products that will help overcome many of the impediments to a sustainable society detailed under SDGs stipulated by the United Nations. Ultimately, we are accelerating the pace of growth by focusing equally on enhancing social and corporate value.

Stakeholder Engagement

  • Q. What steps are you taking to increase awareness and understanding of Sekisui Chemical's concept and approach toward CSR both within and outside the Company?

  • A. We have newly established the CSR Management Office, which reports directly to the Business Strategy Department.

Our new Medium-term Management Plan places the utmost importance on balancing the need to enhance both social and corporate value as a part of efforts to ensure the sustainable growth of society and the Sekisui Chemical Group. Having taken steps to better clarify the Group's CSR management initiatives, we newly established the CSR Management Office, reporting directly to the Business Strategy Department, in April 2017, in order to deepen and broaden awareness and understanding of our concept and approach toward CSR both within and outside the Company.

We are also bolstering our internal and external communication skills. Every effort is being made to increase collaboration between departments including the CSR Management Office and Business Planning within the Business Strategy Department. Ensuring that overseas regional headquarters, corporate communications, IT, and other departments work in unison, we are strengthening our ability to rollout initiatives across Group companies in Japan and overseas, and improving the quality and quantity of information disclosure. By reinforcing our rollout and communication skills, we are generating increased mutual understanding with stakeholders. We are also seeing a growing number of opportunities to garner important input and feedback that extends well beyond the Group's pool of accumulated knowledge.

Degree of Diversity Management Progress

  • Q. What progress have you made in promoting diversity management in fiscal 2016 since launching initiatives in fiscal 2015? Do you believe that any measures have had an effect?

  • A. We have worked diligently to nurture an organizational culture that is conducive to ensuring diversity.

Sekisui Chemical announced details of its diversity management policy in fiscal 2015. As a first step in promoting diversity management on a Group-wide basis, energies were directed toward the empowerment of women. Through diversity, we are better positioned to capitalize on opportunities, overcome hurdles, and stay one step ahead of our rivals. I am convinced that diversity management is vital to our future as a Group.

In fiscal 2016, we paid particular attention to nurturing an organization culture that would help realize diversity. This included rolling out programs in support of the independent activities of diversity promotion officers within each department. As a result, we are seeing growing awareness throughout the Group. As far as the empowerment of women is concerned, we made every effort to expand opportunities for women to excel. In addition to actively hiring female employees, we implemented various measures including career training and development specially targeting women. Thanks largely to these endeavors, improvements in the hiring rates of women, retention rates, and the number of female employees promoted to management positions are beginning to emerge. Moreover, Sekisui Chemical Group companies have been recognized for their efforts to promote diversity management. We are honored by our selection as a Nadeshiko brand and inclusion in the Diversity Management Selection 100. This recognition serves as an incentive to ramp up initiatives going forward.

Message to Stakeholders

    • Q. In closing, is there anything that you would like to say to stakeholders?

    • A. The Sekisui Chemical Group will work in unison to deliver increased value to society.

    To mark the major milestone of our 70th anniversary in 2017, we have put in place the new "SHIFT 2019 -Fusion-" Medium-term Management Plan in a bid to take a resolute step forward to a new phase of growth. Working in unison, each and every member of the Group will endeavor to enhance our corporate value from a medium-to-long-term perspective and thus provide additional value to society.

    Through construction dialogue, we hope to secure the unwavering support and understanding of all stakeholders.