Suminoe Textile Co., Ltd.

Medium- to Long-term
Management Targets

1. SUMINOE GROUP WAY POLICY

Focusing on our medium- and long-term “ideal corporate image,” we have established our policy through the fiscal year ending May 2027.

Growth Strategy: “Antibacterial and Anti-virus” (All Domains)

Initiatives to Remain in Prime Market

Effective April 2022, the Tokyo Stock Exchange will reorganize into new market segments.
Suminoe Textile Group will take every possible measure to meet the new listing criteria for Prime Market.

• Strengthen the existing businesses, and increase corporate value through aggressive capital expenditure and M&A.
• Enhance communication with investors and improve our name recognition by implementing proactive IR activities.
• Place more emphasis on profit return to shareholders.
• Initiatives for increasing the number of free-floating shares, etc.

Plan to Improve D/E ratio

Corporate value will be improved by reducing interest-bearing debt for improvement of D/E ratio.

*D/E ratio…

Interest-bearing debt (excluding lease obligations)Net assets (excluding non-controlling interest)

Profit Return to Shareholders

With stable dividend payment to shareholders as a precondition, we will appropriately distribute returns, taking into consideration the trend of business performance and future investments for business expansion.

The dividend will be paid twice a year as an interim dividend and a year-end dividend.

We will enhance communication with shareholders through proactive IR activities.

3. Non-financial targets

Initiatives for Reduction of CO2 Emissions

We have focused on the initiatives for the reduction of CO2 emissions through products manufactured by the Group since we developed “SUMITRON®” in 1990.
In June 2021, we established the “Visualization Committee on the Reduction of CO2 Emissions” to further enhance the reduction of CO2 emissions and the lowering of environmental load.

Volume of contribution to the reduction of CO2 emissions through products

• Circulation-type recycling of carpet tiles
• Increase the use of recycled fibers, such as “SUMITRON®.”
• Increase the use of yarn recycled from PET and recycled resin materials.

Reduction of CO2 emissions in the business activities

• Improve logistics systems and unify the production bases.
• Improve energy efficiency and change fuels used.
• Working style reforms

Development of Eco-friendly Products

We will contribute to a decarbonized society by accelerating research and development under the development philosophy of “K (Kenko meaning Health in Japanese), K (Kankyo meaning Environment), Recycle, plus A (Amenity).”

(Examples of eco-friendly products that contribute to the reduction of CO2 emissions)

• ECOS®, carpet tiles under the horizontal recycling system

  • Launched in 2011
  • Achieved 84% at the maximum, which is the highest level of recycled materials used in the industry, and 43% at the maximum in the reduction rate of CO2 emissions.
  • Approximately 90,000 tons of CO2 was reduced over the past decade.
  • Approximately 220,000 tons of CO2 are to be reduced over the next decade.

  

• SUMITRON®

  • Polyester chips recycled from PET bottles are used as material by 50% or more.
  • Useable for a long period of time due to excellent weather- and heat-resistance properties.
  • Solution-dyed yarn is used for reducing environmental load.

  

  Transition to solution-dyed yarn

  Traditionally, the piece-dyeing method, which required large amounts of water and electricity as well as dyeing effluent treatment, had been applied to dye pile yarn used for the surface of carpets. We have now shifted to using solution-dyed yarn (pigmented at the spinning stage), which reduces CO2 emissions, requiring less water and energy and with no effluent problem in the production process.

Initiatives for G (Governance)

We aim to be a company trusted in society by further promoting our initiatives and by complying with laws and regulations and corporate ethics.

• Restructure the core systems.
• Strengthen the managerial decision making by outside directors.
• Promote interactive in-house communication through top management’s frequent visits to workplaces.
• Continue to conduct compliance training.
• Further disseminate “Corporate ethics hotline.”
• Strengthen global risk management.
• BCP action plan

4. Initiatives to Be Enhanced during the Target Period

Reorganization of Nara Factory

We will realize the business bases that meet the needs of the times.

• mprove productivity
  Sell off unnecessary production facilities.
  Improve productivity by concentrating the production facilities.
• Improve efficiency of supply chains
  Increase logistics warehouses, reduce the cost paid to external warehouses and improve work efficiency by concentrating logistics centers.
• Enhance research and development
  Establish a new R&D building as a shared base for technological development, demonstrate synergy effects by enhancing cooperation between the business divisions, and accelerate the development of new products.
• Reduce environmental load
  Reduce environmental load by removing dyeing facilities and a wastewater treatment plant.

Strengthen the space design business

We will materialize our customer’s requests at a higher level by expanding the business domain to the planning and design of the whole “space,” not limiting it to production, sale and proposition of products that color the “surface.”

Synergy effects have gradually become apparent since CPO Co., Ltd, which has in-depth expertise and excellent know-how concerning store design, joined the Group in 2020. Going forward, we will expand our business domains to not only stores in which CPO has strength but also nurseries, schools and medical facilities.

Intelligent Interior 2.0

The Interior Fittings business in charge of interiors of hotels and the Automotive Textiles and the Traffic Facilities business have united their strengths to jointly promote “Intelligent Interior 2.0,” a cross-sectoral project to create next-generation automobile interiors. The new car interior in the age of CASE and MaaS will be pursued by “ONE SUMINOE.”

Corporate branding

Enhance IR and PR activities for stakeholders of the Group for their better understanding of, and empathy with, our philosophy and businesses.

Initiatives for the reduction of CO2 emissions

Reduce CO2 emissions in the business operations and product life cycles.

Working style reform

Create environment for healthy working, cultivate human resources, and promote participation of diversified human resources.

Reorganization of the core systems

Improve efficiency in clerical work, unify inventory and other data, and enhance IT human resources.

Improvement of financial structure

・Improve D/E ratio (by reducing interest-bearing debt).
・Increase inventory turnover ratio.
・Implement effective use of treasury stock