I would like to take this opportunity to express my sincere gratitude and appreciation to our investors for your support.
We at the Oenon Group are guided by our Corporate Group Philosophy in conducting our biotechnology-based business, which focuses on fermentation and other technologies. We place topmost importance on delivering safe and secure products to our customers, maintaining a combined customer- and profit-oriented focus throughout our operations. We also work to maximize the Group’s corporate value and quality of management through cocreation of future value.
Fiscal 2019, ending December 31, 2019, marks the first year of our newly formulated Medium-Term Management Plan 2023. During this year, we will endeavor to achieve a sharp recovery in business performance, which decreased as an impact of last year’s Hokkaido Eastern Iburi Earthquake. Also, we will actively pursue innovation in the Group by practicing the sangen shugi principle (genba, genjitsu, genbutsu). This idea, the “three reals philosophy,” is sometimes expressed in English as “the actual place, the actual situation and the actual goods.” Furthermore, we will continue to address the substantial changes occurring in our operating environment by following a cycle based on three principles-decide swiftly, act nimbly and engage in honest reflection-as we conduct management with a sense of speed.
In our core alcoholic beverages segment, we will make products available for purchase nearby, adopting a customer-oriented approach, and launch attractive new products, thereby maximizing customer satisfaction and our profits.
We aim to further boost sales and market share by aggressively launching new products derived from the popular Hakata no Hana, Sugo-mugi and Sugo-imo brands. We are continuing to feature Michael Leitch, a rugby player, as our brand ambassador for Big Man, Hokkaido’s biggest-selling kou-type shochu. We are rolling out plans to boost sales of this core product further as rugby increases in popularity. In recent years, Big Man’s popularity has been fueled by the rapidly growing trend toward drinking at home.
In the brewing and industrial alcohol segment, in October 2019 we expect to complete construction at the Shimizu Factory of GODO SHUSEI, more than doubling production capacity. Going forward, we plan to aggressively expand sales channels into new fields, aiming to capture the second-largest share of the Japanese market.
Meanwhile, at OENON PRODUCT SUPPORT CO., LTD., whose name changed from FUKUMUSUME SAKE BREWERY CO., LTD., in January 2018, the subcontracted production business is expanding steadily, centered on chu-hi (RTD). We will continue to strengthen the chu-hi business by making full use of the Group’s sales network, cultivating a robust corporate structure through which to take on our competitors.
In the enzymes and pharmaceuticals segment, we aim to further expand sales of mainstay lactase. To grow the production support business, we will strengthen initiatives in collaboration with companies that produce food, beverages and functional ingredients, which give high marks to the Group’s fermentation technologies and facilities, as we work proactively to develop this business.
We have formulated Medium-Term Management Plan 2023 with a view to the realization of Long-Term Vision 100, which leads up to our 100th anniversary of establishment in 2024. By fiscal 2023, this plan targets net sales of ¥90.0 billion, ordinary income of ¥3.0 billion, an ordinary income margin of 3.3%, dividends per share of ¥10.0, and ROE of 9% or more. Guided by these objectives, we will push forward with management efforts to enhance the corporate value of the Group.
I ask for your ongoing support and encouragement of these endeavors.
President and CEO
Oenon Holdings, Inc.