1. Basic Principle of New Three-Year Corporate Business Plan
To achieve and consolidate high profitability and secure sustained growth potential to generate the added value our shareholders expect in our business as we work to take a Quantum Leap in our business development as a Global Company.
2. Basic Initiatives
- Successful Accomplishment of the Rabigh Project
The Rabigh Project will radically strengthen the foundation of the Company's petrochemical business, and will propel a quantum leap in the profitability of the business as well as significantly accelerating the globalization of the entire Sumitomo Chemical Group. At present, the most important objective is for the Company to concentrate its efforts on completing the Rabigh Project on schedule and bringing it into stable commercial operation as early as possible as well as establishing the necessary marketing structures.
- Enhancing Global Management
In terms of globalization, the successful accomplishment of the Rabigh Project will drive major advances in Sumitomo Chemical's business development. The Company will strengthen and enhance its corporate governance and management systems to support the further development of its businesses on the global stage.
- Enlarging the Value-Added Component of Every Business Sector
By expanding its production capacities and implementing cost rationalizations, launching new products and shifting to higher value-added products, the Company will forge ahead to further strengthen its basis of profitability in the core businesses in all six of its business sectors.
- Expanding the Company's businesses in the life sciences and IT-related materials and Strengthening their Competitiveness
The Company will continue to allocate its business resources in a focused and timely manner, seeking to boost profitability in areas like the life sciences and IT-related materials that are forecast to see sustained market growth.
- Paving the Way for Further Growth
Over the next three years, the Company plans to devote JPY 370 billion to capital investment. Meanwhile, the Company envisions a cash flow of JPY 530 generated from its business activities, and from this free cash flow, a maximum of JPY 200 billion will be set aside as a "growth reserve fund" to be used for investment opportunities with the potential to drive further growth that may arise. In its R&D activities as well, the Company will devote its efforts to the development, cultivation and early commercialization of new businesses.
3. Performance Targets
(billions of yen)In fiscal 2009, the final year of the new Three-Year Corporate Business Plan, the Company is targeting sales of JPY 2.4 trillion, ordinary income of JPY 250 billion, and net income of JPY 150 billion.
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Consolidated FY 2006 FY 2009
(Projection) Target
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Sales 1,785 2,400
Ordinary income 150 250
Net Income 91 150
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For reference: (FY 2009)
Operating income 200
Equity earnings 65
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The Company seeks to secure a robust balance sheet in fiscal 2009 by raising profitability and enhancing shareholders' equity to achieve a shareholders' equity ratio of 37% and a debt-equity ratio of 0.5.
The Company will expedite the implementation of its new Three-Year Corporate Business Plan with a view to achieving a solid base of high profitability and sustainable growth throughout the entire Sumitomo Chemical Group.
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