Yokohama Rubber Unveils Phase III of Grand Design
OREANDA-NEWS. February 14, 2012. The Yokohama Rubber Co., Ltd., unveiled today an outline of the latest three-year phase in its medium-term management plan, Grand Design 100. Yokohama entered Phase III of Grand Design 100 this January, the first month of its present fiscal year. Its chief financial targets for the three years of Phase III are to achieve cumulative net sales of 1,800 billion yen, cumulative operating income of 150.0 billion yen, and cumulative operating return on sales of 8.3%. Yokohama’s chief financial targets for the culminating year of Phase III, 2014, are to achieve net sales of 630.0 billion yen, operating income of 60.0 billion yen, and operating return on sales of 9.5%.
Year-on-year comparisons with the culminating year of Phase II are unavailable because of a change in Yokohama’s fiscal accounting period. The company has shifted to calendar-year fiscal accounting as of 2012, from its previous April-to-March accounting. And that resulted in a one-time-only nine-month fiscal accounting period: April to December 2011.
Yokohama launched Grand Design 100 in April 2006. The plan comprises four three-year phases, and it provides for achieving annual net sales of 1 trillion yen, annual operating income of 100 billion yen, and annual operating return on sales of 10% by Yokohama’s corporate centennial in 2017. Yokohama accompanies those quantitative targets with the qualitative goals of evoking a distinctive global identity in building corporate value and in building a strong market presence.
Changes in the operating environment have obliged Yokohama to defer its horizon for the 1 trillion yen sales target to 2019 or 2020. Yokohama remains committed, however, to achieving the target for operating income by 2017, and management expects the operating margin to reach the 10% target ahead of schedule.
The theme that Yokohama has adopted for Phase III of Grand Design 100 is Robust and Responsive Growth. That theme expresses a determination to build on the progress that Yokohama has achieved in fortifying its corporate vitality and to position the company to respond flexibly to change and risk in the operating environment. It addresses the uncertain outlook for the operating environment that Yokohama will face in Phase III.
Europe’s credit crisis threatens to affect the entire global economy adversely, but the world’s emerging economies exhibit potential to resume growing vibrantly in the medium term. In Japan, the persistently strong yen weighs heavily on exports, and the scheduled increases in the national sales tax could dampen consumption, but demand associated with the rebuilding effort in areas affected by the March 2011 earthquake and tsunami will stimulate GDP growth.
Tires are the focus of Yokohama’s growth plans. The company is working to assert a distinctive identity in the global tire market, to expand its global supply capacity greatly, and to deploy high-value-added tire products worldwide. In diversified products, Yokohama will draw on compelling strengths in technologies for the three functions of carrying, affixing, and buffering. It will make the most of those strengths in developing products to assert market leadership and to cultivate business in new sectors.
Yokohama’s technology strategy includes working through the BluEarth branding to develop and deploy products for benefiting the earth, society, and individuals through environmental safeguards and in other ways. The company is collaborating, meanwhile, with third-party research organizations in leading-edge projects aimed at developing high-functionality tire technologies. In every way, Yokohama is mobilizing its technological resources in support of delivering the best products at competitive prices and on time.
Phase III of Yokohama’s Grand Design 100 also provides for redoubling the company’s efforts in reinforcing its corporate foundation and in fulfilling its corporate social responsibility. Yokohama has tapped employee initiative in identifying and acting on opportunities for eliminating waste through its Mudadori activities. In Phase III, it will augment those activities with team projects for tackling issues designated by management. Yokohama has focused on seven priorities, meanwhile, under the International Organization for Standardization’s ISO 26000 guidelines for social responsibility, and it will tackle those priorities through wide-ranging efforts.