| May 23, 2003 |
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| Company Name: |
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ISEKI & CO., LTD. |
| Company representative: |
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Hiroyuki Nakano, President |
| Company code: |
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6310 |
| Stock Exchange Listings: |
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First Section, Tokyo Stock Exchange |
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First Section, Osaka Securities Exchange |
| Enquiries: |
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Kazuyoshi Sonoda, Director
(Telephone: +81-3-5604-7710) |
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| To whom it may concern, |
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| Notice concerning Three-year Business Plan |
| Iseki & Co., Ltd. hereby gives notice of the drawing up of the Three-year
Business Plan for FY 2003 - FY 2005. Details are as follows. |
| 1. |
Company Philosophy |
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Since its foundation more than 70 years ago, Iseki has contributed to the
modernization of Japan's agricultural industry as a full-line manufacturer specializing
in farming machinery. During this time, we have consistently pursued efficient
and labor-saving advances in agriculture, and have served the market by pioneering
the development of a great deal of agricultural machinery.
When we consider the problem of the food supply for the world in this 21st century,
the role we must play becomes even more significant. Iseki will continue to operate
under our basic business philosophy, which is to contribute to agriculture both
in Japan and throughout the world. |
| 2. |
Three-year Performance Plan |
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Three-year Plan Targets (FY 2005) |
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(1) Operating income of  10.0 billion
(2) Reduced interest-bearing liabilities to a balance in the60 billion bracket |
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The specific schedule of the Performance Plan is as follows: |
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| (Consolidated Base) |
(Units: millions of yen) |
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FY 2002
(actual) |
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FY 2003
(target) |
FY 2004
(target) |
FY 2005
(target) |
| Sales |
156,400 |
158,000 |
163,000 |
167,000 |
| Operating income |
6,200 |
7,000 |
8,500 |
10,000 |
| Ordinary profit |
4,100 |
5,000 |
6,000 |
8,000 |
| Net income for the period |
1,000 |
2,000 |
3,000 |
4,500 |
Balance of interest-bearing
liabilities |
104,100 |
90,000 |
75,000 |
69,000 |
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| (Non-Consolidated Base) |
(Units: millions of yen) |
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FY 2002
(actual) |
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FY 2003
(target) |
FY 2004
(target) |
FY 2005
(target) |
| Sales |
94,500 |
92,000 |
94,000 |
98,000 |
| Operating income |
3,300 |
3,200 |
4,200 |
5,000 |
| Ordinary profit |
2,800 |
2,800 |
3,400 |
4,200 |
| Net income for the
period |
1,500 |
1,300 |
1,600 |
2,400 |
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| 3. |
Basic Strategy |
| By focusing on the following four strategies and achieving the
Three-year Performance Plan we aim to "expand business worth". |
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| (1) |
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Enhance and expand sales overseas |
| (2) |
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Secure a 20% share of the domestic market for agricultural equipment by intensifying
our commitment to sales and marketing |
| (3) |
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Further bolster our capability to develop new products which capitalize on
our strength as a manufacturer specializing in agricultural equipment |
| (4) |
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Build a "low cost structure" by reforming our consolidated revenue structure
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| 4. |
Strategies and policies for each market |
| (1) |
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Overseas markets |
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In order for Iseki to further grow, it is essential that we break ground in
overseas markets. We will progress by levels in the overseas markets. |
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2002
(actual) |
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2003
(target) |
2004
(target) |
2005
(target) |
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Variance from
2002 |
| Product sales |
10,100 |
11,000 |
12,500 |
15,500 |
50% increase |
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| (a) |
Become more competitive in the prices for tractors built for North
America |
| (b) |
Expand sales in European markets (enlarge the target market area and expand
sales of farming tractors) |
| (c) |
Commence sales (FY 2003) of tractors in the Southeast Asian markets |
| (d) |
Break into the Chinese market (commence test-marketing in FY 2004) |
| (e) |
Strengthen the sales framework |
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| (i) |
Increase personnel resident in North America (currently 2 people 
5 people in FY 2005) |
| (ii) |
Post personnel to Thailand (FY 2004) |
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| (2) |
Domestic market |
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Our major source of revenue lies in the domestic market for agricultural machinery
and equipment. We therefore aim for the Iseki Group to secure a 20% share of this
market.
At the same time, we are also aiming to expand our non-agricultural machinery
sales. |
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| (a) |
Secure market share through intensifying our commitment to
sales and marketing |
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In the domestic market, demand has been waning, due to the decline in agricultural
households, and price competition accelerating. We will focus on expanding our
sales of heavy agricultural machinery and machinery that assists in the cultivation
of vegetables, in order to acquire a 20% share in the market. |
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| (i) |
Step up direct sales |
| (ii) |
Bolster efforts aimed at large-scale farming |
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| (b) |
Expand sales of non-agricultural farming machinery and equipment |
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(12.0 billion in FY 2002
25% increase by FY 2005) |
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| (i) |
Expand sales of hydroponics facilities |
| (ii) |
Introduce strategies aimed at operations into coin-operated rice-polishers |
| (iii) |
Increase income from servicing and repairs |
| (iv) |
Expand sales of agricultural materials |
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| (3) |
Increase capability to develop new products |
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Iseki has consistently been focused on building its capability to develop.
We will continue to further our development framework and, as well as developing
products that accurately meet our clients' needs, we are planning for sweeping
cost reductions. |
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Fundamental cost reductions |
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| (i) |
Reduce manufacturing costs (Target: 30% reduction) |
| (ii) |
Reduce costs of new products |
| (iii) |
Increase overseas procurement |
| (iv) |
Full-scale operations in Chinese manufacturing site (January 2004, tentative) |
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(4) |
Promotion of consolidated revenue structure reforms |
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In addition to the crucial policies already being currently addressed, we
aim to reform the consolidated revenue structure, bolster the financial position
of the group, and build a corporate culture with a low cost structure. |
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| (a) |
Promote the reform of revenue structure of sales subsidiaries |
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We aim to promote efficiencies and improve productivities, and develop a low
cost structure. |
| (b) |
Reduce all costs by 30% |
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Cut model numbers by 30% and reduce lead times 30 days
15 days |
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| 5. |
Financial strategies & capital measures |
| (1) |
Reduction of interest-bearing liabilities |
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Through revenue structure reforms, we are aiming for a cash flow of approximately
8-fold, and will reduce the balance of interest-bearing liabilities outstanding
at the end of FY 2005 to the 60 billion bracket. |
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| (2) |
Make sales subsidiaries wholly-owned subsidiaries
via share swap |
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We aim to strengthen the power of the group and stabilize the shareholders
of specific companies. |
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| (3) |
Implement a share buyback |
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Over the three-year Business Plan, Iseki will implement an ongoing share
buyback plan with the aim of buying back a total of 20 million shares for approximately
2.5 billion. |
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| (4) |
Cash Dividend |
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We aim to resume dividend payments in FY 2003 and follow on with stable dividends
in the future. |
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