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Here I will report the business results for this company’s 47th consolidated fiscal year (between September 21, 2018 and September 20, 2019).

General conditions in the current consolidated period

Due to the expansive trend of corporate earnings in the Japanese economy during the current consolidated fiscal year, there were continued improvements in the employment and income environments and increases in facilities investment. Although some weaknesses are apparent in exports and in production, the gradual trend towards recovery is continuing also due to the effects of implementing various policies. Meanwhile, against the background of the protracted trade conflict between the United States and China and the United Kingdom’s problems in leaving the EU, a slowdown in the world economy is becoming apparent, while the financial markets in each country are also showing unstable tendencies, so that it will be necessary to also closely observe the effects exerted on the global economy by the financial conditions.

Under these situations, the MAEDAKOSEN Group has adopted the slogan “MAEDAKOSEN is a company that creates Mixtures” as its corporate message. This message incorporates the Group’s strong intention to achieve continuous growth by “Mixing” the various kinds of managerial resources that it possesses. We believe that this will create the positive driving force for advancing the long-term growth strategies of “M&A”, “Human resource development”, and “Overseas business growth”.
First, in the M&A strategy that forms the central pillar and positioning of the growth strategy, in addition to proceeding to further diversify our business, we will use M&A to reactivate regional business inside Japan and overseas, and contribute to regional revitalization. Additionally, without remaining only focused on the fiber material and resin processing technologies which the Group has fostered until now, the MAEDAKOSEN Group is creating new products and new technologies by “Mixing” the various technologies and know-how that it maintains in the different fields. Regarding human resources, in addition to developing the full potential of each and all MAEDAKOSEN Group employees members, diverse talented people are being employed and trained in order to build an innovative organizational culture through “Mixing” each of their capabilities and experiences. Further, based on the belief in the MAEDAKOSEN Group that “the Health of our employees determines the future of the company”, a “Declaration on Health” was made to show our determination to be deeply involved with the health of all employees. The Group intends to continue to take various measures to create a healthy workplace which gives its employees job satisfaction as well.

Sales in the current consolidated period were 37,853 million yen (an increase of 9.4% on the same period of the previous year). In terms of profit, the operating income was 5,344 million yen (similarly, an increase of 4.9%), the recurring profit was 5,392 million yen (similarly, an increase of 4.1%), and the quarterly net income attributable to the owners of the parent company was 4,056 million yen (similarly, an increase of 9.4%).

Business Performance according to Segment

(Social Infrastructure Business)
In the public works business, MAEDAKOSEN CO., LTD. realized steady sales of products including slope disaster prevention products, forest preservation products, and structural repair and reinforcement materials. In addition, the operating profit realized a result which improved on the same period in the previous year due to cost reductions and the shifting of increased portions such as freight charges to sales prices. Regarding nonwoven fabric-related products, orders were sluggish for spun-bond products (continuous long filament fiber nonwoven fabrics), which are mainly utilized in applications including industrial materials and automobile materials, realizing sales that were almost the same as in the same period in the previous year. However, through making cost reductions and the increase in handling the portion of products which have high gross margin ratios, the profit realized a result that was higher than in the same period in the previous year. Further, the Net Buffer construction method (caisson joint transmitted wave reduction method) which was jointly developed (and a joint patent acquired) between MAEDAKOSEN and the National Institute of Maritime, Port and Aviation Technology was awarded the Special Prize of the 3rd Infrastructure Maintenance Grand Prize sponsored by the Ministry of Land, Infrastructure, Transport and Tourism and other ministries. The Net Buffer construction method reduces the penetration of transmitted waves approximately 80% by inserting knitted fabric buffer materials into the gaps (caisson joints) between box-type concrete units which are installed as the foundations of structures such as breakwaters. This construction method prolongs the life of the structures and allows limitation of the subsidence risk caused by the draw-out of crushed stone, earth and sand. Going forward, the company will continue to provide construction methods and products required for sites in order to contribute to the maintenance of the social infrastructure.
For Mirai no Agri Co., Ltd, the subsidiary which handles wild animal damage countermeasure products, horticultural use greenhouses, and agricultural materials, although a reduction was apparent in the gross margin ratio partly due to the effect of a large order, sales and profits both achieved results that improved on the same period in the previous year due to factors including the recovery in orders received for wild animal damage prevention fences, dairy farming supplies and horticultural use greenhouses. On the other hand, in the subsidiary MIRAI TECHNO CO., LTD., which handles tents and canvas textile products, sales and profits both realized results that were lower than the same period in the previous year partly as a reaction to sales of a large order in the previous period.
Kushiro Highmeal CO., LTD., which manufactures and sells fish meal and fish oil, became a subsidiary on October 29, 2018, and it is planned to expand its scope of business.
For the overseas subsidiary MAEDA KOSEN VIETNAM CO., LTD., there were increases both in sales and profits due to the expansion of the products handled. By making best use of the increase in production capacity due to the operations of their third and fourth plants, the company is striving to expand the sales channels for MAEDAKOSEN Group products in the ASEAN region. Additionally, the Group is planning to expand its overseas sales network by effectively utilizing the business tie-up contract with GOLD-JOINT INDUSTRY CO., LTD. of Taiwan.

The sales in this business sector were 23,061 million yen (an increase of 4.9% on the same period of the previous year), while the operating income was 3,844 million yen (similarly, an increase of 1.5%).

(Industrial Infrastructure Business)
In the subsidiaryMIRAI Kosen CO., LTD., which manufactures and sells wiping cloth products for use in precision machine manufacturing, although sales of the company’s own products were favorable, sales fell below those of the same period in the previous year as a result of delays occurring in part of the contracted manufacturing together with sluggish sales of commissioned products for clothing use. Additionally, due to the substantial rise in electric power charges as well as an increase in depreciation expenses, the operating income realized a result which fell below that in the same period of the previous year.

The sales in this business sector were 2,187 million yen (an decrease of 2.3% on the same period of the previous fiscal year), while the operating income was 351 million yen (similarly, an decrease of 13.9%).

(Human Infrastructure Business)
In BBS Japan CO., LTD., the subsidiary which manufactures and sells aluminum forged wheels, sales of products supplied to automobile makers on an OEM basis and products for the aftermarket were strong in Japan and overseas. In particular, as a result of the large increase in sales of products supplied on an OEM basis to North America and in products for the overseas aftermarket, results were obtained which realized improvements both in sales and profits over the same period in the previous year.
For the “Formula SAE Japan”, a monozukuri manufacturing competition for students which was held in Shizuoka Prefecture in August 2019, BBS Japan CO., LTD. is also participating as a sponsor from the current fiscal year, providing support for a practical student education program utilizing monozukuri in an industry-academic-government initiative. Going forward, the company will continue to support the development of next-generation engineers to develop and promote the automobile industry, together with improving the BBS brand name recognition and boosting corporate value through implementing these types of activities.

The sales in this business sector were 12,604 million yen (an increase of 21.3% on the same period of the previous year), while the operating income was 2,207 million yen (similarly, a decrease of 16.6%).

(Other Business)
In the current consolidated fiscal year, MDK MEDICAL CO., LTD. was established in order to expand into the healthcare business as a pillar of new business. Although the medical equipment regulations require advance investment to develop marketable products such as through clinical testing before the start of sales, it is anticipated that this business will contribute to the Group’s results from the quarter ending in September 2023.

The operating loss in this business sector was 10 million yen, 3 months (between June 21, 2019 and September 20, 2019) for the current consolidated fiscal year are included.

November 2019

September 2020