Sekisui Chemical Co., Ltd. (President: Naofumi Negishi, hereinafter called "Sekisui Chemical")'s Urban Infrastructure and Environmental Products Company (President: Kozo Takami) is proceeding with restructuring its Japanese production bases as described below to strengthen profitability in light of changes to the configuration of demand.

１．Background

Over the past three years, the Urban Infrastructure and Environmental Products Company has proceeded boldly with changes to its business model for the value chain (hereinafter called "VC") business from work centering on the sale of individual products. Specifically, as well as changing the business model from per product to per field, VC has also been rolled out from survey and diagnosis to construction and maintenance management by strengthening the systems, including M&A and business alliance, targeting the expanding stock markets, such as the repair and modernization of worn infrastructure and buildings, etc.

Meanwhile, demand for the general products business in Japan, starting with polyvinyl chloride pipes (hereinafter called "PVC pipes") and rain gutters, has expanded temporarily due to an increase in the number of house building started ahead of the consumption tax increase, and the actual trend is good. Nevertheless, it is predicted that in the future, the number of new house builds, and the budget for investment for new public construction projects, will fall, and the demand for general products will drop sharply.

Consequently, Sekisui Chemical has been discussing comprehensively the production performance and logistics systems, etc., that will be required in the future for the purpose of strengthening profitability in light of changes to the demand configuration within Japan.

２． Ideas on Restructuring Japanese Production Bases

The production system will be reviewed for the maximization of comprehensive synergy with the piping materials operations received from Mitsubishi Plastics, Inc. in December 2012 regarding general products work, for which a fall in demand in the future is firmly indicated. Currently, the basic strategy for the production bases for general products will advance restructuring of "local production and local consumption" to optimize the production and distribution against regional demands from an almost nationwide coverage from Hokkaido to Kyushu. Consequently, it is planned to minimize the total costs of both production and distribution costs.

Further, personnel will be shifted to stock and other high-growth fields to accelerate the expansion of the VC business. 

３．Tokyo Plant

Joints and rain gutters, which are the main products of the Tokyo Plant, are general products for which a future fall in demand has been foreseen.

Further, in the 60 years since the Tokyo Plant opened, expensive costs have been required for countermeasures to aging and to the introduction of earthquake resistance. In addition, the preparation of housing lots and redevelopment are proceeding around the plant, and perpetual production activities have become mired in difficulties.

In light of these conditions, firstly, the products in production at the Tokyo Plant will be divided among other bases to strengthen competitiveness based on the ideas of the production base restructuring. During FY2014, the transfer of production to other production bases will proceed, and the Tokyo Plant is scheduled to cease production and be closed at the end of March 2015.

Further, all the employees working at the Tokyo Plant will continue to be employed by transferring to the recipient production bases and to bases involved in growth businesses.
 

４．Transfer Details and Main Recipients of Products from the Tokyo Plant

Reference 1: Overview of the Tokyo Plant

Reference 2: Main Products (after Restructuring) of the Urban Infrastructure and Environmental Products Company

 Note: The underlined products are those to be transferred from the Tokyo Plant.