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| Revision to the Sixth Medium-Term Management Plan |
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| ''New Design MRC'' |
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August 7, 2009 |
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In May 2008, the Mitsubishi Rayon Group adopted its Sixth Medium-Term Management Plan for fiscal 2008-2010, dubbed Global US → 2010.
However, financial results in the first year of the plan were far below the forecast level, a reflection of the global recession. After the start of fiscal 2009, there—are now some signs of a turnaround but the uncertain outlook and the slow pace of the turnaround are undeniable.
To attain growth in our core businesses—defined in the Medium-Term Plan as a key task— Mitsubishi Rayon acquired Lucite International Group Limited on May 28, 2009. This move was a major step forward towards building a global group. Meanwhile, in tackling unprofitable businesses, the Company executed structural reforms, chiefly for the acrylic fiber business.
In the light of these circumstances, Mitsubishi Rayon has revised the Sixth Medium-Term Management Plan and set out a vision for the Group in 2018, entitled New Design MRC.
Under New Design MRC, the core MMA business will adopt a more powerful business model and will strive to solidify its world-leading position. In addition, the Company will actively pursue alliances and M&A to develop next-generation core businesses to enable the Mitsubishi Rayon Group to achieve high profitability and growth.
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| Revised numerical targets under the Sixth Medium-Term Management Plan sets numerical targets |
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| Fiscal year 2010: |
Sales |
¥480 billion
(compared with ¥500 billion in the previous announcement) |
| Operating income |
¥24 billion
(compared with ¥40 billion in the previous announcement) |
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| Sales of ¥1 trillion and operating income of ¥100 billion by 2018 on a Group-wide basis. |
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| About New Design MRC |
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| ■ Targets |
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Establish and develop the top-ranking business unites in the global markets |
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Achieve sales revenue of ¥1 trillion, and operating profit of ¥100 billion by 2018 |
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| ■ Major Issues |
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| 1. |
Accelerate growth of MMA Business Complex |
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Develop the new core businesses
1) Carbon fibers and composite materials business
2) Water treatment business |
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R&D for emerging new businesses |
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Pursue an ongoing program to strengthen operational efficiency (JK→2010) |
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Restructuring unprofitable businesses |
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Optimize in the global production |
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| ■ Specific Initiatives |
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| Accelerate strategic globalization by integrating Lucite operations |
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| ●Maximize quickly synergies generated by the integration. |
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<Expected synergy effects over the short to medium terms>
Reduction in logistics costs, advantages in raw material purchasing, shared use of sales facilities and channels, products complementation |
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<Expected synergy effects over the medium to long terms>
Cost cutting through technical exchange, developing new MMA production technologies, exchange and use of human resources |
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| ●Strengthen the leading position in the global markets |
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Pursue alliances with a company in the Middle East
⇒ Establish highly competitive production bases |
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Extensively develop markets in Eastern Europe, Russia, and South America. |
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Bolster the polymer business to achieve the balanced growth |
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Optimize in the global production |
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| Re-establishing and reinforcing value chain from precursor operations through processed carbon fiber products |
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| ●Business Target |
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| Establish MRC as a world top leader in the industrial sector (around fiscal 2015) |
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| ●The issues |
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| 1.Short-term (fiscal 2009-10) |
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Substantially cutting costs through the use of innovative technologies for the production of precursor and carbon fibers |
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Reinforcing quality assurance systems in order to expand scope of industrial applications |
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| 2.Medium-term (fiscal 2009-15) |
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Expanding into growth areas: wind power, vehicles, pressure vessels, marine development |
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Developing precursor operations through alliance to generate demand for carbon fibers |
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Strengthening composite materials business through alliance and M&A to expand applications |
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| 3.Rigorous product management |
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Launching high quality, low cost carbon fibers |
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| Accelerating global business expansion through alliances |
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| ●Target |
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| Establish MRC as a leading membrane water treatment company in Asia and lay the foundations for high-profit global operations |
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| ●The issues |
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| 1.Forging alliances with global companies in order to accelerate global expansion |
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Sewage and waste water: Establishing an overwhelming share (at least 50%) of the rapidly growing Chinese market and stepping up expansion into markets in EU, US, India and the Middle East, focusing primarily on PVDF (polyvinylchloride) membranes |
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Water purification: Applying PVDF technology to water purification membranes and expanding into European and Chinese markets in conjunction with engineering companies |
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Desalination: Rolling out technology in conjunction with jointly developed MF and RO membranes and expanding operations based on stable, high-efficiency desalination systems |
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Introducing membrane system maintenance services |
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| 2.Increasing PVDF membrane production and significantly improving cost competitiveness |
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Increasing production at Toyohashi to 10 times current levels by fiscal 2015 and securing definitive cost competitiveness |
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| 3.Expanding CLEANSUI operations |
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Expanding CLEANSUI operations from the domestic market to the worldwide market, rolling out operations in over 60 countries |
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Harnessing technical capabilities to establish absolute brand strength based on safe, great tasting, purified water (CLEANSUI) |
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Enhance the functionality of MMA based materials, carbon fiber and composite materials and pursue applications as environmentally friendly, cutting-edge materials |
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In the life science field, where the market base is broad, create a ''Unique and Specialty'' domain with our bio-technology |
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| ●Automotive sector |
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To meet demands for weight reduction, recycling, and cost savings, enter new business domains by leveraging the functionality of MMA-based materials, carbon fibers and composite materials.
(Expected business size: ¥100 billion) |
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| ●Electronic materials |
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Increase business opportunities by developing highly functional components using precision forming technology.
(Expected business size: ¥100 billion) |
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| ●Life sciences |
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Create a ''Unique and Specialty'' domain
[DNA chips, functional foods, cosmetics materials]
Expected business size: + ¥10 billion) |
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Promoting the ''JK→2010'' Program
→ Strengthen and continue immediate emergency measures
→ Improve competitiveness through fundamental business restructuring to significantly improve the breakeven point |
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| ●Review of global organization |
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| ●Financial strategy |
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Foreign exchange risk management |
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Initiatives aimed at establishing optimum financial structure |
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| ●Human resource management: |
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| ●integrated IT systems |
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| ■ Numerical Targets |
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| The following demonstrates the numerical targets after the revision to the Sixth Medium-Term Management Plan. |
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| (¥billion) |
FY2008 |
FY2009
(forecast) |
FY2010
(revised projection) |
FY2018
(goal) |
| Sales |
345.0 |
370.0 |
480.0 |
1,000.0 |
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Chemicals & Plastics |
156.8 |
228.0 |
308.0 |
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Acrylic fibers, AN monomer and derivatives |
47.3 |
33.0 |
40.0 |
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Carbon fibers and composite materials |
37.9 |
22.0 |
35.0 |
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Acetate fibers & membranes and others |
103.0 |
87.0 |
97.0 |
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| Operating income (prior to amortization of differences arising from changes in actuarial assumptions) |
(1.7) |
9.5 |
24.0 |
100.0 |
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Chemicals & Plastics |
4.4 |
18.0 |
24.0 |
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Acrylic fibers, AN monomer and derivatives |
(9.1) |
(1.0) |
0 |
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Carbon fibers and composite materials |
1.9 |
(7.5) |
(3.0) |
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Acetate fibers & membranes and others |
1.1 |
0 |
3.0 |
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| Capital expenditures |
44.3 |
Total for FY2008-10: 90.0 |
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| Depreciation |
27.1 |
Total for FY2008-10: 82.0 |
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| R&D expenses |
13.4 |
Total for FY2008-10: 40.0 |
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EBITDA
(operating income + depreciation) |
26.2 |
40.0 |
62.0 |
170.0 |
Dividends
(yen/share) |
4 |
Undecided |
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| For further inquiries, please contact: |
| Public and Investor Relations Office |
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