The 22-24 Medium-Term Management Plan (three-year medium-term management plan for FY2022 to FY2024), which began in the year ended March 2023, has come to an end. In order to meet our customers’ trust and exceed their expectations, the strategy of our 10-year Business Plan, centered on “globally providing customers with reliability and peace of mind, backed by quality and stable production,” is beginning to bear fruit, and in FY2024, we were able to receive many quality-related awards from our customers. We also received an order from a primary supplier for engine parts to be installed in plug-in hybrid vehicles manufactured by BYD, China’s leading automaker in terms of domestic market share. As our quality and stable delivery have been highly recognized, we received orders for the same products from several other suppliers.
Net sales increased by 4.6 billion yen year on year to 162.9 billion yen, partly due to the weaker yen. In terms of profits, we promoted a lean production system with minimal equipment and an optimal number of personnel, resulting in operating income of 3.3 billion yen, an increase of 1.0 billion yen from the previous fiscal year. On the other hand, at our U.S. plant, we failed to secure a net profit due to the recording of an impairment loss of approximately 3.0 billion yen caused by high labor costs, high turnover rates, and declining productivity. We are currently making company-wide efforts to help the U.S. Plant recover and return to profitability, as our top priority for the moment. We sincerely apologize to our shareholders for causing such great concern and inconvenience.
▸Initiatives for the 25-27 Medium-Term Management Plan
With the start of FY2025, our new Medium-Term Management Plan “Reinvest Ahresty – Reinventing Ahresty for the future -” has begun. This reflects our commitment to the “inheritance” and “reconstruction” of MONOZUKURI (manufacturing) at Ahresty. Our strength lies in our sincere manufacturing, which has enabled us to continue to offer superior products, stable delivery, and superior services to our customers in order to live up to their trust. We will inherit this strength and further develop it to become a corporate group that “exceeds the expectations” of our customers.
In MONOZUKURI, we will “reconstruct” from a mindset of “if we make good products with good productivity, profits will follow” to a mindset of “making good products by devising ways to generate profits.” We will increase productivity as a means of reducing costs and increasing profits. We will carry out our activities in the pursuit of intelligent, highly efficient, fast, and wonderful “Smart MONOZUKURI.”
In India, where sales are rapidly expanding, and in the U.S., where human resources are highly mobile, I remind myself of the importance of human resource development. Similarly in Japan, where a decrease in the MONOZUKURI workforce is inevitable due to the declining birthrate and aging population, it is necessary to promptly develop human resources from overseas who will take on the responsibility of manufacturing. We will promote the development of MONOZUKURI personnel and raise the overall level of MONOZUKURI so that frontline workers, supervisors, skilled workers, etc. at each stage meet the skill levels required by the Company.
In our efforts toward carbon neutrality, we have set a target of reducing CO2 emissions in Scopes 1 and 2 by 41% (from the FY2013 level) in the 25-27 Medium-Term Management Plan (three-year medium-term management plan from FY2025 to FY2027), and we will actively promote activities based on three pillars: utilization of renewable energy, energy conversion, and energy conservation/efficiency. During the 25-27 Medium-Term Management Plan period, under the slogan “Save money through energy conservation and accelerate CO2 reduction activities,” we will actively promote energy conservation activities with the aim of absorbing the investment and cost increases associated with the utilization of renewable energy and energy conversion, while accelerating activities to reduce CO2 emissions. We also aim to contribute to the global environment by increasing the ratio of parts for electric vehicles in sales and developing aluminum alloy ingots with low CO2 emissions.
Amidst the rapidly changing business environment, we will advance efforts to strengthen our competitiveness and profitability and improve our financial position in order to realize the 10-year Business Plan and achieve the targets. As the entire Group works together to increase our corporate value, we appreciate the continued support of all our stakeholders.
President ＆CEO
Shinichi Takahashi
