January 5, 2009
Happy New Year to one and all!
Taking a moment to look back over the economic situation last year, the US financial crisis and record high prices for crude oil and other resources during the first half of the year, coupled with the increasingly apparent deterioration of the real economy, plummeting resource prices and falls on the stock market during the second half of the year, plunged economies the world over into a major slowdown. With companies across the board having to substantially revise both their interim results and full-year forecasts downward compared to figures at the start of the year, the First Section of the Tokyo Stock Exchange looks set to see a fall in profits for the first time in seven years.
As a result of the current situation, our results for the first half of fiscal 2008 saw a year-on-year increase in consolidated net sales, with consolidated operating income also up slightly on the previous year. The fact that we achieved this feat in spite of struggling against a strong headwind in the form of revisions to the tax system, soaring prices for crude oil and other materials, and the appreciation of the yen, is due to the hard work put in by the entire Group.
Nevertheless, there is no avoiding the fact that our full-year forecasts make for extremely difficult reading. We have been forced to revise both our net sales and operating income forecasts for fiscal 2008 down by a considerable amount compared to those published alongside our first-half results. Our current order figures have also fallen to unprecedented levels.
On other fronts, there were also a number of incidents last year that called into question our position. I am very concerned that our commitment not only to legal compliance but also the required levels of quality as a manufacturer is starting to slip. As we evidently have a number of genuine cultural and other underlying issues, I believe that the time has come to get back to basics and review our operations from scratch.
Bearing all of these factors in mind, we mapped out a direction for our future business development when we published our first half results. Specifically, we intend to operate the transmission infrastructure business globally, strengthen our position in niche business which differentiates Furukawa from its competitors through materials, and tighten the traditional copper processing business.
We intend to further expand our transmission infrastructure business for telecommunications and electric power, one of the areas in which Furukawa Electric excels from a technical standpoint, on a global scale. We plan to expand operations in promising growth areas overseas, particularly the BRICs countries and ASEAN region, in order to give us a stable revenue base.
Furthermore, we will also be focusing on niche business which differentiates Furukawa from its competitors through materials, offering our customers functionally superior solutions based on the modularization and unitization of existing materials. The economy may be entering a recession, but there are still areas in which we can achieve business growth by offering solutions in line with customers' needs, including saving energy, protecting the environment and cutting costs.
In the traditional copper processing business, we need to improve operating rates at more productive sites and filter out inefficient operations in order to increase our profits. We intend to implement a comprehensive "tightening" approach as part of our NF production activities.
In order to implement measures and policies reliably and effectively in line with this direction, I would like to start the year by asking all of you to do three things.
Firstly, I want you to adopt a new way of thinking, unbound by convention. I want all of you to start envisioning how things should be and thinking what you should be doing in order to achieve that vision.
In order to develop new lines of business within the global market, speed is also crucial. I would therefore like all of you to constantly ask yourself "is that the quickest action I can take?" before proceeding.
Finally, the best way to make it through tough times is to go back to basics and make sure that we are all working toward the Furukawa Electric Group Corporate Philosophy. Let us work together to reinforce compliance activities and ensure that we act in the spirit of the Furukawa Electric Group Corporate Philosophy and CSR Code of Conduct at all times.
We may be going through difficult times at the moment, but now is also the ideal opportunity for the Group to come together and strengthen its capabilities.
We will be formulating a new medium-term plan this year to follow on from Innovation 09, so I hope that we can map out a powerful vision for the Group, reflecting the enthusiasm of each and every one of its employees.
Last of all, I hope that all of you will work with cheer and vigor again this year and continue to pay close attention to health and safety.
Thank you for your attention.