Our strength lies in the power to overcome crisis and is the driving force that propels us to the next dimension
Chairman and Chief Executive Officer
The Great Kumamoto Earthquake that took place in April caused massive damage in the prefectures of Kumamoto and Oita. We would like to take this opportunity to express our condolences to the victims of the disaster and our prayers for the speedy recovery of the area. At the same time, we would like to express our deepest gratitude for the support and encouragement we have received from various parties.
In this natural disaster, FUJIFILM Kyushu, one of our leading factories in Japan, sustained immense damage. Fortunately, no human lives were lost, but many employees suffered damage and were faced with the need to rebuild their lives and protect their families. Notwithstanding such conditions, they voluntarily reported for work and exerted the utmost efforts to help restore the operation of the factory. Thanks to the emergency dispatch of support staff members, speedy delivery of recovery support materials and other measures based on our BCP (business continuity plan), which we strengthened in the aftermath of the previous Great East Japan Earthquake, as well as the extensive support received from various parties, the factory was able to restart production only two weeks after the earthquake. As a result, the impact on our supply chain was kept to a minimum. We received much praise for our emergency response capabilities and also for the strong ties we have been able to develop with our customers and the local communities. Alongside our recovery activities, we were able to donate the sum of 100 million yen as a relief fund to Kumamoto Prefecture to support the early recovery of the region.
As a business operating in Japan, we believe that we have to prepare for natural disasters of this kind at all times, and we continue to work on developing our organization and human resources to ensure we are able to respond swiftly and precisely to crises, based on our experience in past earthquake disasters. Looking back on the various activities conducted during this earthquake disaster, we were strongly encouraged to realize that our efforts have extended to each and every one of our employees.
There is an old Japanese adage that says “strong grass can be recognized in stormy winds.” It is with stormy winds that the true power of an organization and of its people is put to the test. Stormy winds may signal a natural disaster, competition in the economic or business area or a tumultuous change in geopolitics. With roughly 60% of our sales coming from overseas markets and continuous competition in the rapidly changing global markets, and Brexit—the departure of the UK from European Union membership—can be considered “stormy winds” on a global scale. Notwithstanding such adversities, continuous reinforcement of the organization and its people will enable us to turn the stormy headwind into a tailwind, a crisis into an opportunity. We believe we must consolidate the strengths of individuals working around the world to lead the company toward further business growth.
Under the new corporate slogan “Value from Innovation” established in 2014, we are making a concerted effort to achieve the goals of our Medium-Term CSR Plan, “Sustainable Value Plan 2016 (SVP 2016)” and the Medium-Term Management Plan, VISION 2016.
Under VISION 2016, our goals in FY2016 are to realize an all-time high in operating profits of 220 billion yen and an ROE of 6–7%. We aim to fulfill a business portfolio to realize stable growth in the medium to long term and enhance shareholder returns, and therefore become a company that can successfully contribute to society with sustainable growth.
In FY2015, we achieved consolidate sales of 2.4918 trillion yen (comparable to the previous fiscal year), and operating profit of ¥191.2 billion (10.9% over the previous year). Our sales profit rate amounted to 7.7% and ROE was 5.8%. In FY2016, all employees will focus on the “priorities” in their business operations and concentrate their efforts promptly to achieving the targets of VISION 2016.
In SVP 2016, our Medium-Term CSR Plan, we made a commitment to implementing CSR activities from a new perspective of creating values for society and contributing to resolving social issues, in addition to consideration for the environment and society in our business processes.
Despite our production output exceeding that of the base year of 2005, CO2 emissions for the entire group in FY2015 have reduced 560,000 tons (down 11%) over the base year, achieving the FY2016 target of 10% reduction a year earlier. The figures are the results of the group-wide efforts to promote energy conservation measures, use of the in-house co-generation system in Japan, use of renewable energies in overseas operations and continual energy-saving activities at our production sites. Additionally, we have contributed to reducing the impact on the global environment with our highly functional materials created with our own technologies, such as the backsheet for solar cells that increases durability and the sensor film for touch panels EXCLEAR that is free of rare metals.
These activities won worldwide recognition, with continued selection once again in FY2015 as a top constituent in the Dow Jones Sustainability World Index (DJSI World) and FTSE4 Good Global Index (FTSE), the world’s leading indices on socially responsible investment (SRI). In the RobecoSam Sustainability Award, we ranked the Gold Class and Industry Leader. We were also selected as a “Climate Disclosure Leadership Index” by the Driving Sustainable Economies (CDP), the international not-for-profit organization that motivates companies to disclose their strategies on climate change and concrete emissions figures.
In contributions to resolve social issues, we are actively working on meeting unmet medical needs through our core business operations in health care. In FY2015, we not only accelerated development of anticancer and other new drugs in our pharmaceutical business but also expanded our scope in drug creation support and cellular treatment through the partnership formed between our group company and worldleading iPS cell developer and manufacturer Cellular Dynamics International and Japan Tissue Engineering.
In view of the importance to a business growing alongside society of pursuing social value together with economic value, we plan a group-wide effort to meet the diverse expectations of our company through achieving the goals of SVP 2016.
In 2015, two historic international agreements were concluded on global sustainability, transcending the lines dividing industrialized nations and emerging economies. They are the Sustainable Development Goals (SDGs) adopted in September by the UN General Assembly and the Paris Agreement at COP21 of the United Nations Framework Convention on Climate Change (UNFCCC) in December.
The SDGs define 17 goals for sustainable development, including climate action, good health and well-being, no poverty, reduced inequalities, and clean water and sanitation, and 169 targets for the SDGs and calls for active participation not only by nations but also by private sector companies.
Also, COP21 established as a goal for 196 parties to keep the increase in global average temperature to well below 2°C above pre-industrial levels and to drive efforts to limit the increase to 1.5°C. Each member nation is now required to develop and submit its own long-term development strategy on low greenhouse gases emissions. We believe that this is the result of sustainable growth being most certainly the top-priority issue and global awareness of the serious threat to mankind and the Earth, unless action is taken now.
Since the SDG targets are wide-ranging and the goals of the Paris Agreement extremely ambitious, they are not easily realized. However, global sustainable development cannot be made unless companies make the goals their own and make efforts to achieve them.
We have faced crises on many occasions since the founding of the company in 1934. Perhaps the greatest of these arose with the rapid advance of digitalization around the turn of the century which resulted in the disappearance of the photographic film market. However, we were able to turn this crisis into an invaluable opportunity and the driving force to the next level through the concerted hard work of our management and employees. The targets and goals of the SDGs and the Paris Agreement should similarly be regarded as presenting us with a prime opportunity for greater advancement for our businesses through contributing to the goals.
In June this year, we established a new management organization for development to the next dimension. Under the slogan “Value from Innovation,” we plan to generate greater innovation through consolidated efforts by the new management and employees, creating new values and contributing to the sustainable growth of society.