Business Strategy
- Project Ｚ Measures
- Action to Implement Management that is Conscious of Cost of Capital and Stock Price
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Project Ｚ Measures(February 14,2024)
１．Outline of Project Z
Under Project Z, we will formulate and implement measures for achieving fundamental structural reforms and growth strategy.
The fundamental structural reforms will be implemented in a short period of time, focusing on three core themes: “optimize production,” “optimize development,” and “deepen domestic sales.” In addition, under the growth strategy, we will concentrate resources on growth markets both in Japan and overseas, with the aim of expanding our business.
By implementing these measures, we aim to achieve a PBR of 1 or higher by 2027.
Vision (2027)
| Consolidated operating margin | 5% or higher |
| ROE | 8% or higher |
| Shareholder return DOE | 2% or higher |
PBR of 1 or higher
２．Specific measures (as of July 18, 2024)
Fundamental structural reforms(Short-term focused measures)
(1) Optimize Production through Reorganization of Production Sites
We will undertake a consolidation of production assembly sites and component (hydraulic equipment) production sites in order to improve productivity, increase production efficiency, and standardize production.
Details of implementation:
Implement progressive capital investments totaling 46.0 billion yen by 2030
(construction of new buildings, production facilities, etc.)
Consolidate production assembly at ISEKI M&D (Matsuyama)
Wind down production at ISEKI M&D (Kumamoto) and transfer assembly operations of combine harvesters (2026)
Employees of ISEKI M&D (Kumamoto) will be transferred within the group or offered re-employment and other support. The Company is currently discussing with the labor union the matters relating to the consolidation, and is considering the best course of action with regard to the site after production has been wound down.
After completing consolidation of component (hydraulic equipment) production at ISEKI-Niigata MFG., assembly operations for rice transplanter will be transferred
Increase capacity of overseas sites
(2) Optimize Development through Reduction and Shift in Development Resources
We will promote more efficient development by consolidating 30% or more of models and types and by adopting common design, and aim to strengthen competitiveness by shifting development resources to growth-related themes such as cutting-edge technologies and reducing impact on the environment.
With regard to consolidation of models and types, we have selected some of targets for consolidation and moved on to the implementation phase. We will continue to identify targets for consolidation and ensure stable supply to the market through OEM, expanding the lineup of other companies’ products, and other methods.
(3) Deepen Domestic Sales by Creating a Foundation for our Growth Strategy
We will integrate our six (6) domestic sales companies over a wide area, and establish ISEKI Japan Co., Ltd. on January 1, 2025. Such consolidation and re-allocation of management resources to improve management efficiency, as well as optimization of inventories at sites and revision of the logistics system to reduce logistics costs, etc., will lead to creating a foundation for our growth strategy.
(4) Optimize Employee Composition and Invest in Human Capital
In order to achieve in a short period of time the growth and transformation to a strong corporate structure that we aim for through Project Z, we will concurrently optimize our employee composition by streamlining non-operating departments and soliciting applications for voluntary retirement, as well as invest in human capital such as by improving engagement and allocating human resources to growth areas.
We are discussing with the labor union regarding the matters relating to the solicitation of voluntary retirement applications.
Overview of the solicitation for voluntary retirement:
Who may apply: Senior age employees and full-time employees of ISEKI & CO., LTD. aged 45 and above as of December 20, 2024
Target number of applicants: Approximately 80
Application period: From October 1, 2024 to November 20, 2024 (expected)
Date of retirement: December 20, 2024 (expected)
Growth Strategy
(1) Development of Strategies Specific to Each Overseas Region and Product Strategies
We aim to expand our overseas business by developing our region-specific strategies and product strategies. This includes enhancing our product lineup by launching environmentally friendly products. In region-specific strategies, we will accelerate the expansion of business in Europe, a high-profitability region in which we have presence. In addition, our local distributor in the U.K., PREMIUM TURF-CARE LIMITED, will be made a consolidated subsidiary from 2025 by way of an additional acquisition of shares. In this manner, not only will we expand our sales territory and product lineup and improve efficiency by centralized inventory management across Europe; we will also facilitate innovation through the exchange of diverse human resources.
(2) Concentrating on Domestic Growth Areas
By concentrating efforts and strengthening sales in the growth areas symbolized by the keywords: large-sized, advanced, environmentally friendly, and dry field, we will maintain stable margins as well as expand profitable areas of business through sharing know-how on a nationwide scale. We will provide valuable agricultural solutions with people, assets, and know-how while increasing the strengths of the Iseki Group.