Tosoh Report 2019

The following is a summarized version of Tosoh's new medium-term business plan for the next three fiscal years. For more details, please download a copy of the fiscal 2020-2022 medium-term business plan here. 
  • Management Objectives

    Overall Objectives

    1. Stabilize and expand profits through dual management approach

    Commodities

    Strengthen business foundation with a view to increasing production capacity, and work to improve competitiveness and profitability

    Specialties

    Expand scale by strengthening and differentiating growth fields to cultivate new businesses, and work to stabilize and expand revenue base

    2. Strengthen safety, and cultivate culture of safety

    Prioritize safe plant operation

    3. Maintain solid financial base

    Maintain solid financial base to facilitate timely large investments and M&A

    4. Promote energy conservation and CO2 use

    Continue investment in energy conservation


    Targets

    Key-Targets-02-02.jpg


    Desired Profit Structure

    We plan to generate earnings in excess of ¥60 billion in our specialty products, whose earnings are downwardly rigid, and to secure total earnings of no less than ¥100 billion even when commodity earnings are weak.

    Key-Targets-03-03-03-03.jpg

    Note: Specialty profits
    Specialty profits includes profit from our functional products segment, from the functional polymer products of the Petrochemical Division, and from the functional polyurethane products of the Chlor-alkali Division.

  • Investment Objectives
    Previous Medium-term Business Plan (FY17 - FY19) New Medium-term Business Plan (FY20 - FY22)
    Commodity Business
    Strengthen business base Strengthen business base further

    Increase efficiency of naphtha cracker and in-house power generation facilities, and raise PVC production capacity at Philippine Resins Industries, Inc.

    Strengthen chlor-alkali foundation, including considering measures such as establishing additional overseas bases, and further debottleneck MDI

    Increase efficiency of power generation facilities and enable power generation boiler biomass co-firing, with CO2 emission reduction in mind

    Strengthen derivative products

    Strengthen derivative products further

    Raise capacity for sodium bicarbonate, and increase number of shipping-related facilities for hydrochloric acid

    Emphasize calcium hypochlorite and ultrahigh molecular weight polyethylene

    Specialty Business

    Increase production capacity for growth businesses

    Continue to increase production capacity of growth businesses
    Produce more high-silica zeolites (HSZ), zirconia, and separation and purification media and AIA reagents

    Raise production of chloroprene rubber, new ceramic materials, A1c columns and reagents, and bromine and bromine flame retardants

    Respond to expanded semiconductor-related demand with increased production capacity

    Discern demand trends, and make additional investment in semiconductor-related products

    Raise production of silica glass materials and fabricated and etching products

    Focus on silica glass materials and fabricated products

    Infrastructure

    Reconstruct and renew buildings, and expand functionality

    Strengthen and enhance logistics infrastructure efficiency

    Rebuild Nanyo Complex main building, and rebuild R&D facilities at Nanyo and Yokkaichi Complexes

    Establish integrated logistics warehouse, and renew ethylene and VCM vessels


    Capital Investments

    1. Allocate ¥140.0 billion for facility investment + ¥30.0 billion for M&A + x (whereas X represents chlor-alkali growth investment)

    2. Allocate ¥30 billion for M&A projects, mainly for pursuing opportunities in bioscience business

    Planned Major Capital Investments:

    Construct:
       - New ceramics facility
       - Integrated logistics warehouse

    Renew:
       - Bromine plant facilities
       - Calcium hypochlorite manufacturing facilities

    Expand facilities for:
       - Brominated flame retardants
       - Semiconductor-related products

    Increase efficiency for:
    - In-house power generation facilities

    Debottlenecking for:
    - Chloroprene rubber
    - MDI

    Others:
     - A1c columns and reagents (automation)
     - Ultrahigh molecular weight polyethylene
     - Enable power generation boiler biomass co-firing
     - Restore ethylene/vinyl chloride monomer vessels

  • Research and Development Objectives
    Previous Medium-term Business Plan (FY17 - FY19) New Medium-term Business Plan (FY20 - FY22)
    Strengthen open innovation Accelerate new product development in line with previous medium-term business plan

    Build large-scale industry, academia, and government collaborative structure

    Apply external technologies through open innovation

    Cultivate and acquire new technologies through joint research

    Allocate human and material resources to new research facilities, increase work efficiency, and generate synergy

    Accelerate commercialization through joint R&D with users

    Build advanced technology acquisition structure

    Increase efficiency of material design by devising materials informatics (MI) technologies

    Appoint technology and venture investment specialists in and dispatch Tosoh researchers to United States

    Advance development of MI technologies through external collaboration and talent acquisition

    Invest in material- and life science–related venture capital funds

    Underwrite US life science–related ventures

    Reform and expand functionality of research infrastructure Promote R&D based on SDGs

    Rebuild research facilities at Nanyo and Yokkaichi Complexes

    Align R&D priorities with SDGs

    Strengthen service and customer lab functions

    Promote open innovation aimed at resolving social issues

    Introduce high-performance R&D equipment

  • Financial Objectives

    ■ Maintain solid financial foundation to facilitate timely large-scale investments and M&A

    ■ Ensure a financial foundation capable of continuous and stable dividends

    financial-Objectives-02.jpg

  • Shareholder Returns

    ■ Continue stable dividends

    ■ Determine dividends by thoroughly considering results for the period, free cash flow, future business development, and other factors

    ■ Set target for dividend payout ratio of around 30%

    shareholder-returns-03.jpg

  • Safety Strategies
    Heighten Safety 
    Previous Initiatives    Future Initiatives
    Education Continue and improve on previous initiatives

    Offered safety education

    Provided hands-on operational training using simulator

    Furnished hands-on experience using purpose-specific plant for education and training

    Facility Maintenance

    Invest further in strengthening preventive maintenance

    Undertook preventative maintenance based on comprehensive facility inspection results

    Ensure preventive maintenance contributes to reduced opportunity costs

    System Implementation

    Strengthen construction system

    Offered operational support system

    Integrate on-site contractors into system to ensure safety on construction premises

    Implemented abnormality detection system

    Digitized maintenance and operation records

    Introduced tablet computers at work sites


    Cultivate a Culture of Safety
    Previous Initiatives    Future Initiatives

    Arranged president’s visit to control rooms, beginning fiscal 2013

    Continue and improve on previous initiatives, and further enhance safety awareness
    Strengthened hazard prediction training1 Deepen hazard risk assessment
    Adhered to strict observation of the 5S principles2 Strengthen identification of sources of danger and countermeasures

    1Hazard prediction training involves discussing potential hazards prior to work and thereby heightening awareness of dangers.
    2The 5S principles—sort, set in order, shine, standardize, and sustain—help to maintain a danger-free workplace.

  • Promote Energy Reduction and Carbon Dioxide Use
    Previous Initiatives Future Initiatives
    Introduced refuse use at cement plant Reduce energy use and CO2 emissions by introducing cutting-edge technologies at in-house power generation facilities, including advanced control systems
    Remodeled energy-saving electrolysis facilities Expand ability to use waste material at cement plant
    Implemented advanced control system at ethylene plant Lower volume of coal used in power generation boiler for co-firing of biomass construction waste
    Reduced shipping costs of coal through large-scale coal transport Develop CO2 concentration and purification technology, and consider transforming CO2 into raw material
    Heightened efficiency of fuel use by increasing efficiency of naphtha cracker and installing a gas turbine
    Inaugurated CO2 Reduction and Effective Use Promotion Committee in June 2018

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