Mitsubishi Materials to Launch New Mid-Term Growth Strategy in F2011

Mitsubishi Materials started discussions on the new mid-term management plan starting in April 2011. The firm didn’t set the mid-term management plan starting in fiscal 2010 (April 2010-March 2011) since business conditions drastically changed after Lehman Shock and mid-term market situations were very unforeseeable. The firm now aims sale and profit recovery by new growth strategy and balance sheet improvement for next several years.

Mitsubishi Materials had targeted consolidated recurring profit at above 110 billion yen, return on asset (ROA) at above 5% and debt/equity (D/E) ratio at 1.5 along its previous mid-term management plan for fiscal 2007-2009. The firm promoted “four-wheel drive” corporate management structure that strengthens 4 core businesses; Cement, Metals, Advanced Materials & Tools, and Electronic Materials & Components.

At the end of fiscal 2007, the firm achieved consolidated recurring profit at 135.9 billion yen, ROA at 7.5% and D/E ratio at 1.5. However, after Lehman Shock in the second half of fiscal 2008, the financial results sharply worsened. The firm posted recurring loss at 9.5 billion yen, ROA at minus 0.5% and D/E ratio at 2.3 at the end of fiscal 2009.

Mitsubishi Material forecasts annual recurring profit at 30 billion yen for fiscal 2010 thanks to major countries’ stimulus programs and emerging countries’ economic recovery. Mr. Hiroshi Yao, president of Mitsubishi Materials, said the firm should not only rely on market recovery but launch new growth strategy in order to regain recurring profit to above 100 billion yen.

The firm will announce details of the new mid-term management plan in early 2011. The firm will establish a new growth strategy as a conglomerate company based on material technologies.