Mitsubishi Materials Eyes Next Mid-Term Growth on Four Wheels

Mitsubishi Materials is in the final stage of formulation of its new mid-term management plan starting in April 2011. The new mid-term plan aims good balance of growing strategy and financial improvement, along which the firm accelerates business expansion in emerging countries such as China and Brazil. The firm leverages its four core businesses (cement, metals, advanced materials & tools, and electronic materials & components) and seeks the original business model as a conglomerate company, said Mr. Hiroshi Yao, president of Mitsubishi Materials.

The firm set above 110 billion yen of annual recurring profit, above 5% of return on asset and 1.5 of debt/equity ratio as the previous mid-term financial targets for fiscal 2007-2009. The firm has promoted “four-wheel drive” strategy to strengthen and expand its four core businesses.

At the end of fiscal 2007, the firm achieved 135.9 billion yen of recurring profit, 7.5% of ROA and 1.5 of debt/equity ratio. However, in fiscal 2009, the firm fell into 9.5 billion yen of annual recurring loss from global financial crisis. The firm couldn’t design out new mid-term management plan for fiscal 2010 and following years in unforeseeable economic circumstance.

In fiscal 2010, business circumstances remarkably improved thanks to the governments’ incentives and emerging countries’ economic growth. Cost reduction efforts also contributed to better profitability of Mitsubishi Materials. Mitsubishi Materials tries to recover the sales and profit level as high as before Lehman Shock with its new growth strategy.