Long-term Management Vision

In February 2022, KITZ Group announced its long-term management vision, Beyond New Heights 2030 – Change the ‘Flow’. This vision depicts where we want to be in 2030 as we strive to realize the KITZ’ Statement of Corporate Mission.

To date, the KITZ Group has been supporting people’s living and industry while contributing to the development of an enriched society with a focus on every industrial field, particularly the fields of construction equipment, petrochemicals and general chemicals. While strengthening the foundations of these core businesses, we have identified “digitalization” as an essential element in improving the efficiency of energy usage and “decarbonization” as the key to achieving carbon neutrality. Embracing these keywords, we aim to accelerate our entry into growth businesses without fear of the risks, and engage in ambidextrous management that shifts the business domains in which we operate.

Shift in business domains

Aim for two-sided management that can generate earnings in core businesses and growth areas
・Proactively allocate resources to growth fields and regions against the backdrop of digitalization and de-carbonization
・Business development with emphasis on return on invested capital (ROIC)

Basic Policy for Business Portfolio

At the Board of Directors meeting held in February 2022, we revised our corporate philosophy “KITZ’ Statement of Corporate Mission” and formulated our Long-term Management Vision “Beyond New Heights 2030 – Change the ‘Flow’” and our first Medium-term Management Plan 2024 (FY2022-2024).

The valve manufacturing business segment is organized into eight markets, with the four current core markets: building & facilities, petrochemicals, water treatment, and machinery & equipment, as well as the four future growth markets backed by digitization and decarbonization: semiconductor equipment, semiconductor materials (filters), fine chemicals, and hydrogen & clean energy. On the foundation of our core businesses, we will shift resources to growth markets and regions and transform the earning structure simultaneously. As an area business strategy, we will optimize the strategy for each region by utilizing the global model or the region- contained model (local product for local consumption) in the markets of North America, China, ASEAN, and India.

In addition, as a long-term investment policy for 2030, we have allocated total investments of 80 billion yen over nine years, of which roughly 60% will be set aside for strategic investment in growth fields and new fields, and will proactively invest in acquiring and strengthening intellectual property. For a strategic utilization of human resources, we have set KPIs for sustained improvement in employee engagement and are working to realize them. At the same time, we will transform our business model in coordination with business innovation activities and effectively utilize human resources by shifting to high-value-added operations. In addition, we will strategically allocate management resources with the aim of enhancing brand value and improving profitability.

Under our first Medium-term Management Plan 2024, we will focus on “improving return on invested capital over the medium- to long-term”. Externally, we aim to achieve a consolidated ROE of 9% or more, which is higher than the cost of shareholders’ equity. Internally, we will work to achieve ROIC that is higher than WACC for each business segment.

Our financial (quantitative) targets for the fiscal year ending December 2030 are 200 billion yen in consolidated net sales, an average sales growth rate of 4% or more, 10 billion yen in consolidated net income, and ROE of 10% or more.

Action to Implement Management that is Conscious of Cost of Capital and Stock Price