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Last updated: April 30, 2009
| (New Medium-term Plan) |
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What are the main points of the new medium-term plan and how does it differ from the previous plan? |
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The new plan sets a course and direction for the next five years instead of the three year time-frame that was the previous norm. The new plan can be divided into a two-year and three-year segment. The first two years concentrate on building the Company's strength so it can come through the current recession and be positioned for the future. The main focus is on fortifying the profit structure of the core businesses. The plan aims to further expand the Frontier 7 growth businesses, which currently contribute about half of the Company's operating income, and construct a business structure where they can produce 60% to 70% of operating income. |
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| (Shareholder Return Policy) |
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What is the basis for your decision to maintain the 30% consolidated dividend payout ratio? |
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We have set a 30% consolidated-basis dividend payout ratio as our standard. Our policy is to maintain a consistent level of dividends in relation to our earning performance. Except in the event of extraordinary losses or other temporary situations, we will continue to set the rate based on our performance forecasts for the succeeding and future fiscal year. The 10 yen dividend we have designated for fiscal 2009 will raise the payout ratio above 30% based on our consolidated net income target. The dividend level was in anticipation of an earnings recovery in fiscal 2010. |
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| (Demand Outlook for Interlayer Films) |
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What is your demand forecast for interlayer films in fiscal 2009? |
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We have contracts with our client glass makers that will keep our sales volume of interlayer films at virtually the same level as in fiscal 2008. Our interlayer film sales, mainly for the high-performance products, have not declined to the same degree as the production drops in the worldwide automobile industry, and we expect our market share to increase significantly when the demand recovers. |
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| (Demand Outlook for Core Businesses) |
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How confident are you in your forecasts for demand in your core businesses and for raw materials prices this year? |
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We believe demand will reach bottom in the first quarter of this year. The key will be how rapid the recovery will be beginning in the second quarter. Demand for IT-related products is already starting to pick up. From here on, the recovery of demand for automotive products and housing will be important. We are assuming that raw material prices will remain near their current levels, although it is still difficult to predict how prices will move in some areas in the second half. |
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| (Price Outlook for Raw Materials) |
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The operating income forecasts for fiscal 2009 include year-on-year increases for both the High Performance Plastics Company and the Urban Infrastructure and Environmental Products Company because of the rise in sales prices and from holding down raw material costs. How certain are you about reaching those targets? |
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The High Performance Plastics Company, including in fiscal 2008, has raised product prices to cover approximately 80% of the rise in raw material costs. We believe there is a very good possibility of reaching the target considering the competitiveness of the company's products and its purchasing strategy.
Concern exists that demand could fall more than expected for the Urban Infrastructure and Environmental Products Company. However, because we prioritized maintaining product price levels in fiscal 2008, we believe there is also a very good possibility of reaching the target for the company.
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| (Outlook for Housing Orders) |
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You have said you expect the market environment to begin recovering in the second quarter. Are there indications, such as a recent increase in customers that the market is improving? |
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Orders improved slightly in March over January and February, and we have secured approximately the same number of customers as in the previous year in the second half of fiscal 2008. |
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| (Sales of Homes with Solar Power) |
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You plan for 70% of your homes to be installed with solar power systems. What are your measures to achieve this? |
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We will be expanding the "Solar Heim Campaign", which we hold in the first half of every fiscal year. We also provide a subsidy of 70,000 yen per kilowatt to customers that construct homes with solar power systems. Also, most of our building models have flat roofs, making our homes more accommodating of solar panels than homes made by other companies. |
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There is currently a boom in demand for homes with solar power system, but isn't there concern that profit margins will decline as pricing competition increases between homebuilders? |
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We certainly expect a certain degree of pricing competition. However, cost reductions and the shift to an integrated production and marketing operation should limit losses and make us more cost competitive. |
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| (Acquisition of the PVA Resin Business) |
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What is the purpose of the PVA resin business acquisition that was announced April 27, 2009? And, in the future, will the Company be providing all PVA resin for material of interlayer from its own PVA resin? |
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The main purpose of the acquisition is to construct a stable supply system for raw materials in preparation for future increases in demand for interlayer films, which is a core business of the Company. We will continue purchasing raw materials from other suppliers as we do now. The plan is for the new PVA resin operation to supply the additional PVA resin needed as interlayer film sales expand. |
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Disclaimer
This press release may contain forward-looking statements. Such forward-looking statements are based on current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements due to changes in global economic, business, competitive market and regulatory factors.
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