Edited from: “Message to Our Stockholders”, annual report 2009
DIC (formerly known as Dainippon Ink and Chemicals) states that in fiscal year ended 31 March 2009 it continued to operate in a “harsh environment”, characterised by soaring prices for key raw materials in the first half and falling demand in key customer industries, triggering a sharp decline in shipments in the second half of the year.
“In many ways, our performance for the period mirrored the worldwide economic downturn. It also underscored the importance of creating a business portfolio and a competitive cost structure that would allow us to generate profits even if shipments decline further and operating rates are considerably below capacity,” says president and chief executive officer, Kazuo Sugie.
“Accordingly, we are currently formulating decisive measures aimed at transforming DIC into a stronger, leaner, more competitive organisation that is able to effectively deploy its considerable management resources,” continues Sugie.
DIC says that the only way to increase profitability is to make the best use of its existing resources.
“The best way to bring these management resources into full play is to link them together, thereby creating broad, powerful assets,” says Sugie.
DIC is organised into divisions along product lines. At present, each division is responsible for its own marketing and sales. The company believes that this product-specific approach worked well for the company in the past, but is not the most effective choice for a company the size of DIC today in the current economy.
An example of this, DIC manufactures a broad range of products that are used in the housing industry. For each division to be approaching the same customers or prospective customers individually, each with its own products, DIC believes that this is “hardly efficient” or allow the company to “exploit the company’s comprehensive capabilities”.
“Our first task, then, is to ensure the effective deployment of existing resources across the global DIC company, thereby creating a mechanism for sharing customer information, technologies and other management resources,” says Sugie.
Its business portfolio currently encompasses graphic arts, industrial materials, high performance and applied products, and electronics and information materials. The common thread linking these businesses is its resin engineering technology. This it says is what really “distinguishes” DIC products from those of its competitors.
Accordingly, maximising its technological prowess in, for example, heat-hardened resins, as well as its product development capabilities, will enable it to offer high-value-added, high-performance products and materials that are superior to those of its competitors.
All of this ties directly into its management vision “Colour and Comfort by Chemistry”, which encapsulates its desire to capitalise on the unique characteristics of chemicals to help bring rich colour and a wide range of high-performance products to customers in a variety of industries.
“By transforming our substantial existing management resources to create unrivalled assets, and by increasing our line up of synthetic resins and other innovative high-value-added products, we will succeed in realising this vision. From there, profitability will follow,” says Sugie.
“Ensuring a sound financial balance is obviously a key consideration at all times, not only now. Accordingly, we have resolved to limit investments to those that maximise our core technologies. We are also stepping up efforts to divest idle assets, shrink inventories and scale back the support departments of our divisions, departments and sites,” concludes Sugie.
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Financial highlights: DIC, year ended 31 March
|
|
2009 |
2008 |
2007 |
2006 |
|
Sales (Yen m) |
932,334 |
1,077,897 |
1,015,664 |
1,004,840 |
|
Operating Profit (Yen m) |
25,356 |
48,373 |
51,390 |
49,487 |
|
Net Profit (Yen m) |
2,648 |
31,033 |
22,467 |
5,288 |
|
Total Assets (Yen m) |
738,460 |
978,299 |
991,780 |
969,469 |
|
Diluted earnings per share (Yen) |
3.35 |
39.20 |
28.37 |
6.45 |
|
Number of Employees |
23,613 |
25,167 |
25,634 |
25,634 |
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DIC (Dainippon Ink and Chemical)
Company Structure
DIC (formally known as Dainippon Ink and Chemical), is one of Japan's most diversified chemical companies and the core of the DIC Group. DIC has four business segments: graphic arts materials; industrial materials; high performance and applied products; electronics and information materials.
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