Lifestyle Division Strategies and Initiatives
Industry Environment and Fiscal 2010 Results
More Robust Earnings Base Through a Stronger OEM Production Framework
In fiscal 2010, the Lifestyle Division faced an adverse environment as consumption in Japan, the division's main market, continued to be weak and the labor cost and raw material cost increased sharply in China and other countries involved in production.
In this economic climate, the division, mainly in apparel, footwear, and household goods, expanded trade business with major customers by planning and proposals that anticipate changes of evolving needs among consumers and customers, strengthening the division's SCM production framework in China and Asian countries, and finding new production bases in India and Bangladesh. Similarly, we increased our trading volume of natural rubber, synthetic rubber and tyre products, mostly to emerging economies. A series of actions by the division resulted in ¥31.0 billion of gross trading profit, and ¥5.0 billion of consolidated net income.
We also embarked on OEM sales of fashion apparel and household goods from major Japanese retailers developing outlets in fast-growing China, as well as Western brands, to local apparel companies.
Initiatives in Fiscal 2011
Enlarging OEM Business and Expanding Sales to Overseas Markets
It is expected that the uptrend of the labor and raw material cost in China, a major production base for our division, continues even in 2011. In response, the division will reinforce the other bases in Asian countries, India and Bangladesh and so on for expansion of its SCM production framework. Based on this strengthened base network, we will also bolster sales in Japan and overseas, particularly in future growth markets such as China, India, and ASEAN countries, and in more developed Western markets. Our priority initiatives are as follows:
• Add material procurement capabilities that take advantage of EPA/FTA in Asia to our well-established SCM production framework, and broaden this framework in geographical terms to further improve product development and supply capabilities that meet customer needs. We aim at increasing our share of sales in the domestic market with this scheme.
• In overseas markets, pursue strategic alliances with influential local partners to promote extending business in apparel, footwear, household goods, and other lifestyle products in China, Asian countries and India, where population increase and economic growth are expected to trigger rapid growth in consumer markets.
• In rubber, concentrate on tyre and conveyor belt businesses in Europe and North America, as well as in emerging markets such as China and ASEAN countries; focus similarly on expanding sales of natural and synthetic rubber to China and other growing markets.
