Part 2 of Yokohama’s Mid-Range Plan Announced

Phase II of Yokohama Rubber’s “Grand Design 100” medium-range financial plan has been announced. The next stage of the plan, which began in the 2007 fiscal year, is scheduled to commence in April 2009, following the end of Phase I in March. The company says it will determine the details of Phase II, valid for the 2010 to 2012 financial years, and release its contents, including financial targets, in March 2009.

The policy contained within Phase II, says Yokohama, has been defined as “Quality Growth”. In order to keep growing even in a business environment that is unclear due to current instability in the global financial system and rapid recession, the company says it is ‘indispensable’ for it to be aggressive with flexibility and establish a corporate culture that supports lean and agile operations. To achieve these two goals, Yokohama Rubber believes it necessary to improve quality in terms of both operations and management. Under its “Quality Growth”, the company says it will strive to strengthen its managerial foundation in preparation for Phase III, which will operate in the financial years 2013 to 2015.

In improving its operations, Yokohama says it will strengthen its Tire Group, Multiple Business Group and technological development. For the Tire Group, it plans to improve the global presence of the Yokohama brand, expand and improve sales networks in a number of regions, including Europe and Latin America, and establish new manufacturing bases in BRIC countries. With respect to the establishment of new manufacturing facilities, the company says it will employ a compact, integrated production platform that enables the making of flexible and quick investments.

In terms of management, Yokohama Rubber will work towards further establishing its corporate social responsibility (CSR) management, strengthen its corporate foundations, and improve financial quality. The CSR Division, created in June 2008, will play a central role in steering the company, aiming for a good balance between economic, environmental and societal considerations. At the heart of these efforts is the desire to increase cost competitiveness through continued waste-reduction activities (‘Muda-Dori’, to give its Japanese name) and redesign the company’s business structure in Japan, a country with a rapidly aging populace and declining birth rate. In its international operations, the company will promote R&D functions, unfold regional business operations and enhance its procurement capabilities, such as its own natural rubber processing facility.

Grand Design 100 is Yokohama Rubber’s medium-range management plan aimed at achieving the company’s goal of becoming a “global company with a distinctive presence in terms of corporate value and market position” by the time it reaches its centenary in 2017. The plan sets three financial targets for the 2018 financial year: one trillion yen (£6.57 billion) in net sales, 100 billion yen (£656.51 million) in operating income and 10 per cent operating return on sales. Grand Design 100 consists of four phases, each of which lasts for three years.