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Under our Mid-term Management Plan SZ-20 Phase III, we will Reinforce the combined strengths of the Zeon Group and Explore ways of going beyond boundaries and collaborating with external players to provide Solutions globally as a contribution to society.

Naozumi Furukawa, Chairman Naozumi Furukawa, Chairman
Kimiaki Tanaka, President Kimiaki Tanaka, President

Consolidated Business Results for the Half-Year Period Ended September 2017

In the half-year period ended September 2017, the business environment surrounding the Zeon Group continued to be shrouded for the most part by an uncertain outlook. This was despite the gradual recovery seen in the Japanese economy and amid persistent concerns over the global economy due to policy decisions made by the U.S. administration and growing geopolitical risks in East Asia.

Under these circumstances, the Zeon Group sought to improve profitability and accelerate the pace of global production and sales in the Elastomer Materials Business, and also to develop new high value added products and expand the Specialty Materials Business. Following up on the previous year, we maintained our cost reduction efforts under the ZΣ Activities. As a result, we reported favorable results for the half-year period, with consolidated net sales rising 18.9% year-on-year to a record high of 166.7 billion yen, and consolidated ordinary income and consolidated quarterly net income attributable to owners of parent both also reaching record highs. By segment, in the Elastomer Business we saw a significant increase in the sales volume of xxxx for overseas markets amid an expansion in global automobile production, while in the Specialty Materials Business we enjoyed robust sales of optical films for television applications and mobile phones, which drove the increase in net sales and income.

Meanwhile, interest-bearing debt decreased by 3.4 billion yen from March 31, 2017, thereby improving our financial condition.

Current Status and Initiatives of the Mid-term Management Plan SZ-20 Phase III

The Zeon Group launched its new Mid-term Management Plan SZ-20 Phase III in April 2017. Under the plan’s Group-wide strategy, we will reinforce the combined strengths of the Zeon Group and explore ways of going beyond boundaries and collaborating with external players to provide solutions globally as a contribution to society. At the same time, we will seek to accelerate the pace of new business creation and product development in key development areas: global environment, smart devices, and health and living. Furthermore, we intend to cultivate a corporate culture that places value on taking proactive action by harnessing diverse ideas and trying them as the basis for executing the strategy.

During the half-year period that marked the start of SZ-20 Phase III, we opened the Asia Technical Support Laboratory (ATSL) in Singapore as our third technical support center in Asia. Looking ahead, ATSL will present advanced solutions for the combination and processing of specialty rubbers in ASEAN and India, which show good prospects for further expansion in the automotive markets. With respect to powder slush compounds (PSC), a promising material for automotive interiors, operations have commenced at our new plant in Mexico, marking the beginning of a global production system comprising the three global bases in Japan, China and Mexico.

Meanwhile, in our Specialty Materials Business, operations began in October 2017 at ZSM (Zeon Specialty Materials Inc.), which handles specialty plastics and optical films, in Silicon Valley in the U.S., the center of the IT industry. In new business creation and new product development, we sought to widen the market for optical sensor-based FFR devices and develop additional applications for carbon nanotube/rubber composite materials.

Outlook for the Year Ending March 2018 and Beyond

Under the SZ-20 initiatives launched in 2011, we have been striving toward a future in which “Zeon makes the future today through the power of chemistry” as our Enterprise Blueprint for 2020. During Phase III, the last leg of this drive, we intend to achieve our quantitative target of consolidated net sales of 500 billion yen by further developing the competitive edge of our core businesses. Also, we will focus on the creation of new technologies and products to accumulate growth based on strategies built upon technologies we have developed over the years in a process of “discontinuous growth .”

At the same time, we will seek to boost our competitiveness in quality and pricing through a multi-layered effort by promoting a top-down approach in production innovation and a bottom-up approach in our “ZΣ Campaign.”

With respect to consolidated results for the year ending March 2018, we are projecting 325.0 billion yen in net sales (up 13% year-on-year), 35.0 billion yen in operating income (up 14% year-on-year), 38.0 billion yen in ordinary income (up 19% year-on-year) and 25.0 billion yen in net income attributable to owners of parent (up 8% year-on-year).


December 2017
Naozumi Furukawa, Chairman
Kimiaki Tanaka, President

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