Botschaft des

President and COO Message

Boldly Changing Course to

Ensure Achievement of Our Goals

Masayuki ShirokawaDirector, Representative Executive Officer President and COO

Sticking to the results to achieve growth

I was recently appointed as Director, President and COO. FSG, which has grown into a global company, has entered its 124th year this year. Unexpected changes, including the acceleration of IT and the COVID-19 pandemic, have recently occurred on a global scale, and there is an urgent need to tackle social issues to realize a decarbonized and circular society. Believing that achieving our vision and plans is just a starting point, I would like to list three points to be achieved for „execution“ and „results.“ The first point is strengthening our existing businesses that form part of the social foundation and improving the environment. The second point is promoting overseas expansion and raising the ratio of overseas sales to 50%. The third point is promoting new businesses and services.

In this rapidly changing era, I have renewed my determination to make a concerted effort to achieve success by further focusing on speed and sticking to the results.

Looking back on the former Medium-Term Management Plan

Unfortunately, the numerical targets set out in the Medium-Term Management Plan (FY2018-FY2020) were unable to be achieved. One important factor is the spread of the COVID-19 pandemic. The stay-at-home trend and an increase in teleworking reduced demand for beverages, and this affected our business. However, I have taken it positively, considering that it had meaning for us.

Most of our sales come from beverages, in particular, in Japan and the ASEAN region. Although it has been a long-standing aim to escape from this sales structure, the situation has not been changed for a long time. This is because we have been able to improve our business performance by continuing to meet the needs of our customers in the beverages field since beverage sales are quite high. However, the reason that we could not achieve the numerical targets in the Medium-Term Management Plan has proven that there is a risk in this sales structure, and the awareness of employees has changed rapidly, saying that they should not be passive and should actively take action on their own. I believe that this failure has made it easier to change course to pursue a new direction.

Regarding the Five Competences (Monozukuri / Development / Human resources / Financial strength / Risk management) set forth as a growth strategy, there was a clear distinction between what we achieved and what we couldn’t. Taking development competence as an example, environmentally friendly RecShrinkTM labels, developed in the U.S., are one of our major achievements.

Regarding the goal of adding „Plus One“ in the existing four businesses, four business regions, and four business categories, the business expansion into India and the acquisition of the entire ownership of the joint company in Thailand have made it possible to formulate solid strategies for South Asia and the ASEAN region and have also provided a foothold in the pharmaceutical field.

My summary is that we were able to execute a strategice move to the next step in various aspects during these three years.

Three business strategies that hold the key to achieving the targets in the new Medium-Term Management Plan

The role of the new Medium-Term Management Plan is to grow the sowed seeds of businesses and make them bloom. The numerical targets for FY2021, the first year of the plan, are sales of 170 billion yen and operating income of 13.6 billion yen. In FY2023, the final year of the plan, we aim to achieve sales of 193 billion yen and operating income of 19.3 billion yen. We have also formulated the following three business strategies. The first is to accelerate the overseas expansion of the label business and enhance its profitability. We will establish a leadership position in the field of environmentally friendly labels in the shrink sleeve label business and the self-adhesive / pressure sensitive label business. The second is to expand our primary packaging portfolio. We will accelerate the growth of the pouch business into a second core business through the creation of pouches with a spout with high value added. The third is to create new businesses. We will create a variety of businesses, including a recycling-oriented and environmentally friendly business, by responding to social issues and market changes.

As part of the machinery business, which is important to us, we will strengthen our service business under a new system. In machine development, machines for the ASEAN market have been completed, and we will expand them from the ASEAN and Indian markets to the world market. In the packaging services business, we have already used our know-how in SCM, cultivated in Japan, in Vietnam and will spread it to Thailand and throughout the ASEAN region. In addition, a new pharmaceutical building under construction in Tsukuba, Japan will be completed soon. We will spread successful cases in Japan to the world and further accelerate the expansion of business domains in the pharmaceutical market.

I am convinced that we can achieve our targets by steadily implementing each business strategy under our new vision „Our Value to People and the Planet.“

Toward the realization of a circular society and sustainable growth

Reductions in CO2 emissions and the use of plastic are now being called for around the world, and various national governments are starting to take serious action to in response. The need for measures to address such environmental issues is, so to speak, a business opportunity for us.

In Japan, the label-to-label project, in which collected labels are reused again as labels, is underway, and in the U.S., RecShrinkTM labels, which I mentioned earlier, have already been put on the market under the label-to-bottle project, which goes even further than the label-to-label project. These labels can be recycled together with PET bottles into new PET bottles. Through the provision of these environmentally friendly products, we would like to contribute to the realization of a circular society and to the sustainable growth of FSG.

Moreover, Fuji Pouches, which can be used not only as refill containers but also as a replacement for a product body container, are introduced as an example of an environmentally friendly design in the Outline material of the Bill for the Act on Promotion of Resource Circulation for Plastics of the Ministry of the Environment and the Ministry of Economy, Trade and Industry. I consider this as a great opportunity for us because „expanding our primary packaging portfolio“ is one of our business strategies.

Existence of customers and business partners as our strength

Our greatest strength is that we do business with major customers who are leaders in the global market. Such customers have a great responsibility to society and always think one step ahead. For this reason, they have very high expectations. However, by obtaining information on their expectations and responding to them promptly, we can „change along with changes.“

Another key for us is the existence of our business partners. Like our customers, they are also active globally, and each of them has a wealth of experience and knowledge. Until now, both we and our business partners have tended to keep in the background and have rarely taken center stage. However, in the label-to-label project, for instance, we have published the names of the companies with which we work on development outside the company. This shows our determination to actively lead the industry together with our business partners as one team.

Taking pride in your work as leaders in an essential business

Last year, we identified nine materiality (priority) that we should work on, including „Development of people-friendly packaging materials,“ „Development of environmentally friendly products,“ and „Sustainable growth.“ However, it does not make sense to just raise the issues. Feeling that it is necessary to further break them down so that each employee can understand them, we have newly set the KPIs (Key Performance Indicators).

By achieving the materiality issues, you will understand that your work is truly an essential business and will be able to proudly tell your family and acquaintances that packaging is important to society. Above all, I believe and hope that you will be even more proud to work in FSG.