Mid-Term Management Plan: “Rapid Advance 21”
In order to transform itself into a “powerful and streamlined” company and become a corporation that creates continuous growth and profits by putting shareholders and customers first, NTN has been following its “NEW Plan 21” structural reform plan since April 2002. The activities under this plan have produced solid results. We have strengthened our business development capacity, improved profitability and cost competitiveness, reorganized production to strengthen our corporate competitiveness, raised our product and equipment development capacity to expand sales, and boosted our operating income.
The mid-term “Rapid Advance 21” management plan sees the three years from April 2004 until March 2007 as a breakthrough period for achieving our 2010 long-term vision based on the results of our “NEW Plan 21” structural reform plan.
Long-Term Vision: Improved Market Presence
- A corporation that has unrivalled products and No. 1 businesses in the world.
- A corporation with a presence (name recognition) in five key regions: Japan, the Americas, Europe, China and the rest of Asia.
- A global corporation that maximizes human resources and contributes to society.
1. Basic Policies
Based on the improved profits and expanded sales of strategic products under “NEW Plan 21,” we will also adopt specific measures for each product and boost net sales to ¥450 billion. In addition, we will link the various activities of all our employees with NTN “value creation” to make the leap forward to attain our 2010 goal.
2. Management Plan
Consolidated | FY2003 (forecast) | FY2006 (planned) |
Net sales | ¥353 billion | ¥450 billion |
Operating income | ¥25 billion | ¥42 billion |
Operating margin | 7.1% | 9.3% |
Recurring income | ¥21 billion | ¥37 billion |
Net income | ¥12 billion | ¥22 billion |
ROE | 8.7% | 12.0% |
ROA | 2.6% | 4.2% |
Capital investment | ¥40 billion | (3 years) ¥138 billion |
*Foreign exchange rate assumptions: |
FY2003 (forecast) | ¥113/US$1 ¥132/EUR1 |
FY2006 (planned) | ¥105/US$1 ¥130/EUR1 |
3. Sales Plan by Business Segment
Consolidated | FY2003 (forecast) | FY2006 (planned) |
Bearings | ¥226 billion | ¥290 billion |
Constant velocity joints | ¥102 billion | ¥134 billion |
Precision equipment | ¥25 billion | ¥26 billion |
Total | ¥353 billion | ¥450 billion |
[Strategies by business segment]
<Bearings>
- • Further concentration on and strengthening of our strategic product groups (needle roller bearings, axle units, precision bearings, fluid dynamic bearings, etc.)
- • Increased sales of industrial machinery bearings (increased sales through Global Application Manager (GAM) system)
- • Exploring bearing technology
- • Strengthening cost competitiveness -- Production reorganization
<Constant velocity joints>
- • Aim to be No. 1 in the world
- • Establish technological supremacy (light weight and compact size, low vibration)
<Precision equipment>
- • Expanding frontier technology businesses (liquid crystal displays, PDPs)
4. Sales Plan by Region
Consolidated | FY2003 (forecast) | FY2006 (planned) |
Japan | ¥174.5 billion | ¥194 billion |
North America | ¥85.5 billion | ¥124 billion |
Europe | ¥57 billion | ¥71 billion |
Asia and others | ¥29.5 billion | ¥36 billion |
China | ¥6.5 billion | ¥25 billion |
Total | ¥353 billion | ¥450 billion |
[Strategies by region]
<Japan>
- • Production reorganization -- “Revolution in value creation as a manufacturing campany”
- • Exploration of production element technology
- • Bearings for industrial machinery (expanded sales through GAM system)
<North America>
- • Production reorganization -- increased local procurement ratio
- • Expanded sales in replacement market
<Europe>
- • Establishing production bases in central or eastern Europe
- • Improved presence among local automobile manufacturers (strengthened R&D center)
- • Reorganization of distributors (increased sales of bearings for industrial machinery)
< Asia and others>
- • Increased sales through expanded Thai plant production capacity (expanded fluid dynamic bearing business)
- • Strengthening Indian market
<China>
- • Creating bases for supplying products and parts to the world
- • Strengthening profitability of production bases
- • Strengthening sales network
- • Establishment of umbrella company and R&D center
5. Mid-Term Management Plan Key Point: “Value creation”
“Value creation” means improving NTN's corporate value while achieving our long-term vision for 2010. Providing customers with a sense of trust and confidence in our “value creation” through our products, service, problem-solving, quality, etc., will improve the value of our customers' products and speed up customers' product development. Also, we will reform the philosophy and business methods in all departments, strengthen our fundamental competitiveness within the company and accomplish “value creation”.
<Sales --- Revolution in marketing & sales>
- - Marketing mind-set reform - Aggressive marketing
- • Expanded sales to big users
<Development, design, procurement --- Design determines all.>
- - Targeting a variable cost reduction of ¥10 billion in 3 years
- • Reorganization of suppliers and providing technical guidance with increased bilateral ties
- • Cost reduction through increased local procurement overseas
- • Further strengthening of VA / VE
<Production --- Pursuing the ultimate production methods>
- - Targeting a productivity improvement of ¥18 billion in 3 years
- • Production reorganization --- In Japan and overseas
- Strategic products: Reorganization in accordance with deployment of basic strategies for each product
- Core products: Reorganization by combining production in the region of demand and production in the most favorable region
- Use the Mie plant as a model factory
- • Improving productivity (reform the factory floor from scratch)
- Material flow cost reduction
- Improving operating rate (personnel and equipment)
- Improving inventory turnover ratio
<Distribution --- Distribution reform>
- • Construction of optimum distribution system within Japan
- Concentration of nationwide branch office inventory
- Relocation of export distribution center
- • Greater efficiency in overseas distribution
- Integration of warehouses aiming at greater efficiency of distribution in the European region
<Research and technology --- Sensitivity to changes in the market>
- • Accumulation of unique technology and product development (with product development speed enhanced by 24-hour system)
- • Pursuit of product design that increases value added
< Personnel asset utilization --- Promotion of “personnel development” >
- • Activating personnel assets
- Thorough emphasis on performance-based evaluation system
- Strengthening personnel development (global personnel assets and technical skills inheritance)
- • Enhanced utilization of personnel assets
- Diversification of employment (use of temporary workforce and retirees)
- Review of employment formats
The plans and figures in this document were drawn up by NTN. Please note that actual business results may vary from these plans and figures.
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