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Home  >  Investor Relations  >  Message for Shareholders

Message for Shareholders


(Updated Jun 2017)

Assuming office as President

First of all, I would like to express my heartfelt gratitude to everyone for your ongoing cooperation and support.

While I’ve been serving as President for only short time, I aspire for us to forge our front-line capabilities from a customer-oriented perspective, and to develop a corporate culture geared to actively addressing matters in a swift manner, while perpetuating Yamazen values which have been established by our predecessors.

Meanwhile, we find that circumstances regarding the business environment surrounding Yamazen are by no means bleak, despite unpredictability in world affairs and other such concerns. The production equipment market overall has been looking more upbeat, with demand fluctuating in tandem with the timing of nationally subsidized projects. In the consumer goods market as well, the business environment has been conducive to growth in consumption of slightly higher-end goods emphasizing health, safety and other such attributes, amid forecasts calling for earnings gains to be achieved by 80% of 57 major retailers this fiscal year, and for profits at all-time highs for one-third of such enterprises. Key to GDP growth rates, investment in housing is poised to gain from expanding needs for home remodeling and renovations extending into the future.

Nevertheless, it is essential that we accurately assess the realities which are not as picturesque as they may appear, particularly given Japan’s labor shortage and other such challenges. As such, it is important that we propose optimum solutions to our trading partners, upon having set our sights on both macro and on-site factors drawing on our perspective as a specialized trading company, then subsequently gaining a swift sense of disparities between such factors.

In our milestone 70th year in business, the Yamazen Group has been taking steps to further heighten its corporate value under these circumstances, and has accordingly drawn up a new growth strategy based on policies of the ONE XT YAMAZEN 2018 three-year medium-term management plan. In our production equipment operations, we have restructured business by combining our domestic and overseas operations in order to more precisely tap into market needs and boost profitability amid a scenario of increasingly borderless international markets. In the home products business, we have been enhancing our capabilities for delivering a wide variety of products and small-lot sizes, addressing needs for high-speed logistics, and have also launched our largest domestic logistics center in Isesaki City, Gunma Prefecture, with the aim of curbing increases in distribution costs.

Largely as a result of the aforementioned factors, net sales were ¥447,698 million (down 0.0% year on year), operating profit was ¥13,113 million (down 1.1%), ordinary profit was ¥12,931 million (down 4.2%), and profit attributable to owners of parent was ¥8,518 million (down 7.3%).

Change-readiness business

The task of addressing changes is a persistent challenge faced by all companies across every industry. Although Yamazen can be simply described as a specialized trading company that handles production equipment and consumer goods, we find that merely engaging in sales that involve shifting goods laterally from right to left does not provide sufficient value. As such, Yamazen needs to resolutely promote itself as a “change-readiness business,” and accordingly evolve as a company that addresses changes and provides greater value.

I believe that corporate profits invariably stem from providing the combination of value and human capabilities. Accordingly, it is important that we benefit not only our business partners but also society by swiftly performing our work and providing solutions in a manner that addresses changes.

Thinking along those lines, we are forging ahead in step with our business partners through initiatives that include arming ourselves with functions across our vertical axis in Yamazen’s respective division headquarters (Machine Tools, Industrial Tools & Equipment, Building Materials, and Home Products), while also equipping ourselves with more extensive business solutions tailored to specific attributes of geographic areas across our horizontal axis (10 regional headquarters located in Japan and overseas). We intend to provide greater value to those we serve by leveraging such vertical and horizontal synergies, which we will build into our respective operations rather than simply developing corporate and organizational mechanisms.

Human capabilities are an essential factor in achieving such goals. Accordingly, our people are the key element in this regard, given that profits stem from the provision of value and human capabilities, as touched on earlier. Our efforts will call for employees who take initiative in paving the way forward, instilled with the ability to notice changes and take appropriate action. Conversely, our change-readiness business approach will not succeed if our people’s initiative fades. 

Toward achieving net sales beyond the ¥500 billion target

First of all, though it may sound somewhat brash, we should take it as a given that we will achieve our ¥500 billion net sales target with the aim of taking things one step further as a specialized trading company. In fact, I think we are fully capable of achieving that quantitative target. Meanwhile, the Yamazen Group now has more than 3,000 employees*, with the inclusion of 96 new recruits who joined us in April. About one-third of our overall workforce consists of overseas staff members, and from among these individuals we trained staff to serve as local managers.

Whereas circumstances right now in Japan are by no means bleak, expectations are even better abroad. Moreover, opportunities to engage in business are on the rise amid a prevailing scenario of robust overseas demand which has also given rise to an environment widely conducive to domestic industry.

Meanwhile, we intend to continue drawing on external resources through deals involving mergers and acquisitions, as we forge ahead in enhancing capabilities of our respective business operations. Still, we will not engage in mergers or acquisitions solely for the sake of expanding the scale of our operations, particularly given that it wouldn’t make sense for us to engage in M&As that fail to leverage synergies among our existing businesses. We do not intend for the ¥500 billion net sales target to be achieved by concluding M&As, instead that objective should be achieved as a result of our entire workforce of 3,000 Yamazen Group employees taking on challenges to that end.

Also, while I am sometimes asked my views on effects on purchasing and other economies of scale with respect to the ¥500 billion net sales target, at the risk of being misunderstood I would respond by saying that I think we have already exceeded the level of such synergies having taken effect. The important thing is not that there are direct benefits derived from our scale of business. Instead, it is important that we enhance our functions and networks amid this climate where business increasingly spans across borders, and that we accordingly take the solutions we propose as a trading company to the next step. So in that regard, the goal of net sales in excess of the ¥500 billion threshold is a symbolic step toward achieving such ends.

* Figure current as of April 2017, and includes employees of unconsolidated subsidiaries.

Constancy and change — the next generation

I would like to see us make further progress from this point forward in developing products geared to the Internet of Things (IoT) era, in conjunction with our vendors. Meanwhile, the Smart Factory Solutions Division Headquarters was established in April as a new division. That will enable us to enhance our engineering capabilities as a solution provider.

On the other hand, it’s important that as we proceed, we do not forget to draw on our afore-mentioned human capabilities to carry out business activities that artificial intelligence and robots are not suited for. Here, I refer to the type of work that calls for a human touch in terms of understanding personal subtleties, eliciting emotion and sharing joy, as opposed to routine and formulaic tasks that can ultimately be performed through artificial intelligence. As such, we must aim to “manage constancy and change” with respect to coexistence of those things that ought to be changed and those things that ought not to be changed. I agree with the notion that “the Doterai-Ichi trade fair in and of itself epitomizes the spirit of constancy and change,” and feel that spirit should continue to form the basis of Yamazen from here on out.

Going forward, with the year marking Yamazen’s 70th year in business, we need to learn from our past and firmly perpetuate the values we have come to cherish. At the same time, we need to take on the challenge of achieving the ultimate goals of the ONE XT YAMAZEN 2018 medium-term management plan, drawing on the capabilities of the Yamazen Group’s 3,000 employees.

We look forward to your continued cooperation and support.

President CEO & COO