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Toray Industries Inc, Japan
COMPANY PROFILE
Toray Industries Inc, Japan Profile
Established in 1926, Japan’s Toray Industries is primarily an advanced materials company although its operations extend as far as pharmaceuticals and housing. The firm has six segments: Fibers & Textiles, Plastics & Chemicals, IT-Related Products, Carbon Fiber Composite Materials, Environment & Engineering, and, Life Science & Other Businesses. An integral part of its Environment & Engineering segment is water treatment technology that includes a comprehensive range of membrane technologies encompassing reverse osmosis, nanofiltration, ultrafiltration and microfiltration solutions. Its membrane-based products are targeted at seawater desalination and sewage and wastewater treatment applications. Its Life Science segment also includes membrane and filter products. Analysis
Toray posted net sales of ¥1588.6 billion (US$19.3 billion) for the year ending 31 March 2012 (its fiscal 2011). After encouraging growth in the first half of the year, progress slowed in the second six months. Gains in profitability were more sustained with operating income and net income both reaching record levels. The former rose 7.6% on fiscal 2010 to ¥107.7 billion, while the latter was 10.9% stronger at ¥64.2 billion. In the company’s Environment & Engineering segment, water treatment sales were down due to a decline in large-scale projects compared with the previous year and the stronger yen. Overall, the segment’s sales fell 4.5% on the year earlier to ¥170.2 billion. Segment profitability, however, was up with operating income increasing 45.8% to ¥4.9 billion. The year saw Toray pursue orders for reverse osmosis membranes and other water treatment membranes around the world, with a notable success being an order in Singapore for Asia’s biggest seawater desalination plant. In Japan, large projects at a water treatment engineering subsidiary made progress, while sales in non-membrane parts of the division (including construction and real estate subsidiaries) expanded. In Toray’s Life Science segment sales were up 6.0% on the year earlier at ¥55.6 billion. The company commenced construction of a factory in Jimo City, China, to produce its hollow-fibre membrane dialysers to meet growing demand in emerging countries in Asia. When complete in 2014 the facility will double the company’s capacity for these products.
COMMENT Toray’s current business direction is set out in the three-year management strategy, Project AP-G 2013, it launched in April 2011. That strategy has divided its six business segments into three streams depending on their market maturity – foundation, strategically expanding, and, intensively developing and expanding – with both the Environment & Engineering and Life Science segments in the latter. The key principles of Project AP-G 2013 are to expand businesses in growth business fields and regions, and to target cost reductions. Toray has also identified a number of key areas of focus that it is tackling as group-wide projects. These are: green innovation business expansion, Asia and emerging country business expansion and total cost reduction. The company plans to invest a total of ¥350 billion in plant and facilities over the strategy’s three-year period. Twothirds of that amount will be targeted toward investment in growth, with green innovation businesses receiving a 60% share, while 50% of the investment will be in Asia. Similarly, Toray plans to invest ¥160 billion in R&D during the three-year period, with 50% of that amount devoted to green innovation projects. ■
Key Figures (¥ million) Toray Industries Inc 2012
2011
Net Sales Of Which: Environment and Engineering Life Sciences
1 588 604
1 539 693
170 247 55 554
Cost of Sales
Year ended 31.3 2010
2009
2008
1 359 631
1 471 561
1 649 670
178 183 52 430
159 787 46 656
160 207 n/a
173 213 n/a
1 261 114
1 228 782
1 114 991
1 208 056
1 313 932
Gross Profit
327 490
310 911
244 640
263 505
335 738
Operating Income
107 721
100 087
40 107
36 006
103 429
64 218
57 925
(14 158)
(16 326)
48 069
10.5
10.9
(3.0)
(3.1)
8.1
40 227
38 740
37 936
37 924
38 565
Net Income Return on Equity Number of Employees Contact Details
Chair: President & CEO: Address:
January 2013
Sadayuki Sakakibara Akihiro Nikkaku 1-1 Nihonbashi Muromachi 2-chome Chuo-ku, Tokyo 103-8666 Japan
Tel: +81 3 32455111 Web: www.toray.com
Filtration Industry Analyst
7
Toray Industries Inc, Japan Profile
Established in 1926, Japan’s Toray Industries is primarily an advanced materials company although its operations extend as far as pharmaceuticals and housing. The firm has six segments: Fibers & Textiles, Plastics & Chemicals, IT-Related Products, Carbon Fiber Composite Materials, Environment & Engineering, and, Life Science & Other Businesses. An integral part of its Environment & Engineering segment is water treatment technology that includes a comprehensive range of membrane technologies encompassing reverse osmosis, nanofiltration, ultrafiltration and microfiltration solutions. Its membrane-based products are targeted at seawater desalination and sewage and wastewater treatment applications. Its Life Science segment also includes membrane and filter products. Analysis
Toray posted net sales of ¥1588.6 billion (US$19.3 billion) for the year ending 31 March 2012 (its fiscal 2011). After encouraging growth in the first half of the year, progress slowed in the second six months. Gains in profitability were more sustained with operating income and net income both reaching record levels. The former rose 7.6% on fiscal 2010 to ¥107.7 billion, while the latter was 10.9% stronger at ¥64.2 billion. In the company’s Environment & Engineering segment, water treatment sales were down due to a decline in large-scale projects compared with the previous year and the stronger yen. Overall, the segment’s sales fell 4.5% on the year earlier to ¥170.2 billion. Segment profitability, however, was up with operating income increasing 45.8% to ¥4.9 billion. The year saw Toray pursue orders for reverse osmosis membranes and other water treatment membranes around the world, with a notable success being an order in Singapore for Asia’s biggest seawater desalination plant. In Japan, large projects at a water treatment engineering subsidiary made progress, while sales in non-membrane parts of the division (including construction and real estate subsidiaries) expanded. In Toray’s Life Science segment sales were up 6.0% on the year earlier at ¥55.6 billion. The company commenced construction of a factory in Jimo City, China, to produce its hollow-fibre membrane dialysers to meet growing demand in emerging countries in Asia. When complete in 2014 the facility will double the company’s capacity for these products.
COMMENT Toray’s current business direction is set out in the three-year management strategy, Project AP-G 2013, it launched in April 2011. That strategy has divided its six business segments into three streams depending on their market maturity – foundation, strategically expanding, and, intensively developing and expanding – with both the Environment & Engineering and Life Science segments in the latter. The key principles of Project AP-G 2013 are to expand businesses in growth business fields and regions, and to target cost reductions. Toray has also identified a number of key areas of focus that it is tackling as group-wide projects. These are: green innovation business expansion, Asia and emerging country business expansion and total cost reduction. The company plans to invest a total of ¥350 billion in plant and facilities over the strategy’s three-year period. Twothirds of that amount will be targeted toward investment in growth, with green innovation businesses receiving a 60% share, while 50% of the investment will be in Asia. Similarly, Toray plans to invest ¥160 billion in R&D during the three-year period, with 50% of that amount devoted to green innovation projects. ■
Key Figures (¥ million) Toray Industries Inc 2012
2011
Net Sales Of Which: Environment and Engineering Life Sciences
1 588 604
1 539 693
170 247 55 554
Cost of Sales
Year ended 31.3 2010
2009
2008
1 359 631
1 471 561
1 649 670
178 183 52 430
159 787 46 656
160 207 n/a
173 213 n/a
1 261 114
1 228 782
1 114 991
1 208 056
1 313 932
Gross Profit
327 490
310 911
244 640
263 505
335 738
Operating Income
107 721
100 087
40 107
36 006
103 429
64 218
57 925
(14 158)
(16 326)
48 069
10.5
10.9
(3.0)
(3.1)
8.1
40 227
38 740
37 936
37 924
38 565
Net Income Return on Equity Number of Employees Contact Details
Chair: President & CEO: Address:
January 2013
Sadayuki Sakakibara Akihiro Nikkaku 1-1 Nihonbashi Muromachi 2-chome Chuo-ku, Tokyo 103-8666 Japan
Tel: +81 3 32455111 Web: www.toray.com
Filtration Industry Analyst
7