Special Feature: Highlights under the Medium-Term Management Plan

Equipment investment

We will aggressively invest in the Cement-related business and High- Performance Product business as part of our growth strategy based on the basic policy of the medium-term management plan.

Capital expenditures plan as per the medium-term management plan (3-year total)

(Billions of yen)

 Cement-related
business
High-Performance
Product business
Total
Growth strategy13.06.019.0
Cost reduction,
enhanced framework
12.03.015.0
Maintenance / upgrades, other37.02.039.0
Total62.011.073.0
Depreciation (3-year total)  56.9

Cement-related business

The overseas cement strategy occupies part of our overall growth strategy. It will involve significantly scaling up export facilities at our major silo located at the Kochi Plant in order to steadily increase exports in a consistent manner. We will aim to open up markets by positioning overseas markets as a single Cement-related market.

We will also make aggressive investments and expand logistics streamlining to further solidify the business base of the Cement-related business, which will be a source of profits and cash flow in the future as well.

  • Expansion of logistics rationalization

    Reduce logistics costs drastically by reviewing current logistics system

  • Aggressive Investments

    • Cost reduction investments

      Install high-efficiency AQC at all plants (Gifu, Ako)
      Improve recycling-related facilities (each plant)
      Coal transportation using our own ship scheduled to start service in March 2018

    • Infrastructure development investments

      Manufacturing
      Increase slag mill for manufacturing solidification materials (Kochi)
      Sales related
      Increase raw concrete in Tokyo area (Tokyo, Yokohama)
      Logistics related
      Greater product range at service stations (Onahama SS, other)
      Systematic replacement of tankers
    • Maintenance upgrade

      Conduct major repairs in planned manner

Topic 1Cost reduction investments
Install high-efficiency AQC at all plants

We have already introduced high-efficiency air-quenching coolers (AQC) at five of our eight kilns, including Hachinohe Cement, that help to conserve energy by significantly boosting heat recovery efficiency. Under the new medium-term management plan, we will install AQCs at the two kilns of the Gifu Plant and the one kiln of the Ako Plant in an effort to achieve more energy-efficient operations.

Improve recycling-related facilities

We will invest in the expansion of desalination equipment used in our recycling-related facilities. We will expand the volume of high-chlorine industrial waste we receive by improving recycling-related facilities so that we can increase the recycling volume.

Coal transportation using our own ship

The Group owns a bulk coal carrier vessel, and SOC Logistics Co., Ltd., an affiliated company that provides marine transportation, engages in the transport of coal in certain instances. We will work to lower transportation costs by shifting coal transport from outside marine transportation companies to companies within the Group.

Topic 2Infrastructure development investments
Increase slag mill for manufacturing solidification materials

We will introduce a vertical roller slag mill at our mainstay Kochi Plant in order to revamp the manufacturing process for soil improvement materials (solidification materials) and increase production volume. We will fully work toward capturing demand for soil improvement materials in Japan’s three major urban areas, including Kanto, where strong demand is expected in the run up to the 2020 Tokyo Olympic and Paralympic Games, given the rising need for soil liquefaction prevention and soil improvement work in recent years.

High-Performance Product business

Our marketing strategy for existing products is to dominate the market through a focus on fast-growing segments with enhanced R&D activities as well as aggressive investments towards the scaling up of production.

ProductsAddress with increased productionMarket forecast
Optoelectronics
Business
Optical communications components for new transmission methods
  • Enhance production capacity of high value-added products in phases to suit demand
  • Planned capacity in final year of medium-term management plan to be more than double the current level
  • Modulator market set to grow due to increased transmission capacity in China and around the world 25% average growth rate expected
Electronic Materials
Business
Electronic materials for semiconductor manufacturing equipment
  • Production capacity being increased to suit the increasing demand for semiconductor manufacturing equipment
    (operational from Nov. 2017)
    30% increase in capacity
  • The growing semiconductor market means a larger market for equipment to meet faster production speeds and increased storage capacity
    7% average growth rate expected
Battery Materials
Business
Rechargeable battery cathode materials
  • Capacity increased at SOC Vietnam
    (operating from April 2017)
    1,000t⇒2,000t/year
    Further increase in production possible to suit demand
  • The growing LiB market means an increased market size globally for both stationary and vehicle-mounted LFP
    10% average growth rate expected
Comparison of R&D expenses

(Billions of yen)

Fiscal 2014-16 medium-term planFiscal 2017-19 medium-term plan
Cement-related4.13.8
High-Performance Product5.46.7
Total9.510.5
New business and
new product development

Towards continuous growth on an overall basis, we will endeavor to strengthen our R&D activities with both internal and external resources, accelerating the development of new businesses and new products in the domains relating to our existing businesses.

Optoelectronics
Business
Use of LN modulators to expand into markets located at a medium-range
Advanced Materials
Business
Development of a full lineup of cosmetics materials and establish titanium dioxide business
Battery Materials
Business
Highly developing the specifications of LFP cathode materials and advancing them to high-voltage models
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