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9th Mid-term Business Plan Announcement

May 9, 2013

The following announcement provides details of our 9th mid-term business plan (hereafter referred to as “9th plan”) drawn up to outline new Noritake Group growth targets for the three year period from 2013 to 2015.

1. Positioning of 9th plan 

Our 8th mid-term business plan (hereafter referred to as “8th plan”) from 2010 to 2012 aimed at rebuilding the business performance that had deteriorated during the global recession, and ensuring stable growth amidst a rapidly changing market environment, and this plan incorporated the five key strategies of (1) project selection and concentration, (2) new technologies and new product development strengthening, (3) overseas market development, (4) cost reductions through overseas production, and (5) management infrastructure overhaul.

We made steady progress in achieving the basic strategies set forth in the 8th plan, however, the impact of unforeseen disasters such as the Great East Japan Earthquake and massive flooding in Thailand meant results fell far short of anticipated targets.The 9th plan recognizes that the results of the 8th plan were totally insufficient, and every effort will be made to realize the basic theme of achieving the basic strategies set forth in the 8th plan more swiftly and effectively.

2. Basic 9th plan challenges

■ Business challenge

• To respond swiftly to changing markets, and construct a business structure and management structure capable of achieving stable growth in the backdrop of increasingly intense global competition.

■ Business targets

• To aim for a sales growth rate of 5%, recurring profit margin of 7%, maintain a capital ratio of 50% or higher, and achieve an overseas business ratio of 50% over the long term.
 • To position the 9th mid-term business plan as a run-in period for the achievement of long-term targets.

■ Basic strategies

(1) To develop new products and new technology offering price competitiveness, and boost market competitiveness to increase sales.
(2) To proceed with upgrades to overseas production bases, and improve the development and profitability of overseas markets.
(3) To promote an effective, efficient management structure and upgrades to infrastructure.

3. 9th plan business strategies

Industrial machinery and materials

• To boost price competitiveness by utilizing overseas production bases, and strengthen marketing to local customers in addition to customers of Japanese descent to expand sales.
• To speed up the commercialization of diamond wire, and focus on new product development for a variety of applications.
• To harness the merits of the new grinding wheel plant moved to our Miyoshi plant to realize high-efficiency production.

Ceramic materials

• To strengthen marketing of electronic paste for loyal customers operating in the solar cell market.
• To develop the Asian market by utilizing overseas plants for the production of thick film substrates and plaster.
• To promote domestic and overseas market development by commencing development of new products such as ultrafine particle raw materials and translucent zirconia. 

Engineering

• To promote the development of the Asian market by further strengthening overseas production and procurement bases, and boosting competitiveness in terms of both quality and price.

Tableware

• To strengthen sales channels and marketing structures for emerging markets while strengthening marketing for and expanding expensive products and the high-quality everyday tableware brand cher blanc.

4. 9th plan consolidated results targets

Our consolidated results targets for 2015, the last fiscal year of the 9th plan, are sales of 108 billion yen, operating profit of 3 billion yen, pretax profit of 3.8 billion yen, and net profit of 5 billion yen. 

5. Investment plan

The three-year 9th plan includes approximately 13 billion yen worth of capital investment. This investment will largely go toward upgrades to overseas production bases and transfer of plant from headquarters.

6. Personnel plan

Over the three years of the 9th plan, the personnel plan includes a reduction of 142 domestic employees and increase of 228 overseas employees, resulting in an expected overall increase of 86 employees.

7. Interest-bearing debt outstanding

The 9th plan anticipates capital requirements for upgrades to overseas production bases and transfer of plant from headquarters, resulting in an expected interest-bearing debt outstanding of 20.5 billion yen, cash equivalent balance of 10 billion yen, and net interest-bearing debt outstanding of 10.5 billion yen at the end of March, 2016, the final year of the 9th plan.

8. Overseas business expansion plan

We plan to push ahead with further overseas market development and overseas production base expansion, and achieve an overseas sales ratio of 40% and overseas production ratio of 24% in the final year of the 9th plan.

President Hitoshi Tanemura
Noritake Co., Limited

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