Message from the President
Makoto Kaneko - President and Representative Director, Zuken
Becoming a true partner for our customers
Global development of monozukuri*
We express our sincere condolences to the victims of the Great East Japan Earthquake of March 11 2011 and hope for the quick restoration of the afflicted areas.
ZUKEN Inc. (the "Company") experienced damage to part of the facilities containing its Sendai Regional Office, which caused disruption to lifelines such as electricity, gas and water supplies and communications. To address this situation, we installed the Sendai Regional Office Alternate Operator Team at the Zuken Center Minami Building near the Corporate Headquarters in Yokohama on March 17. We are supporting customers in the affected regions with company-wide efforts so that they can quickly restore their monozukuri* environment.
The manufacturing facilities of many Japanese corporations in the Tohoku region also suffered heavy damage in the earthquake. This led to interruption of the supply chain and a strong impact on the ability of Japanese and global manufacturers to procure parts.
We believe that the disaster has served as a reminder of the extent to which Japan’s monozukuri* is supporting domestic and global businesses, and how reliant the world is on Japanese monozukuri*. The Zuken Group has been supporting Japan’s monozukuri* since its establishment. With a renewed awareness during this time of disaster of the Group’s vital roles, we are determined to contribute to the development of monozukuri* industries domestically and abroad by addressing customers’ demand at a high level.
IT solutions progressed steadily, resulting in increases in revenue and profitability
The global economic environment during the fiscal year under review showed a moderate recovery against a backdrop of the expansion of demand in Asia, whereas the Japanese economy showed increased uncertainty. Occurring near the end of the fiscal year, the Great East Japan Earthquake increased uncertainty in the Japanese economy, which had already been struggling to grow due to the deceleration of exports and sluggish domestic demand.
The electronics and automotive-related manufacturing industries, in which our major customers operate, showed improvement in their business performance but remained cautious about capital investment due to economic uncertainty. Furthermore, intensifying global competition accelerated the trend of design and manufacturing bases leaving Japan. In such circumstances, the Zuken Group implemented the following measures:
To address existing markets
- We developed innovative next-generation products that build on our current mainstay products. Final preparations for releasing these products and related marketing and sales activities are underway.
- We combined an electrical design system and an infrastructure system to manage design data for sale as a packaged option. We vigorously made proposals for optimization of the entire monozukuri* process from start to finish.
Exploration of new markets
- Harnessing our technology to reduce the weight of 3D data, we developed an infrastructure solution to realize overall optimization from design to manufacturing, including the data linkage between electrical design and mechanical design. Through this we focused on moving into the industrial and transportation equipment markets, which are predicted to increasingly shift to IT systems.
Global development
- We reinforced our global marketing, sales and support structure for global customers by establishing the Global Business Management Department and increasing the number of personnel at overseas bases.
- We have established a system to manage worldwide support information in an integrated fashion and prepared a structure to enable the quick and efficient worldwide provision of full maintenance services.
Although a recovery of the circuit board design field has been delayed, IT solutions for the entire design and manufacturing processes have progressed steadily. As a result, net sales for the fiscal year under review were ¥17,969 million (US$216.5 million) – up 5.1% from the previous fiscal year. Operating income was ¥225 million (US$2.7 million) compared with an operating loss of ¥373 million for the previous fiscal year, and net income was ¥291 million (US$3.5 million) compared with a net loss of ¥91 million a year earlier.
Tackling customers’ design- and manufacturingrelated issues head-on
Despite a gradual recovery trend, the global economic environment will continue to be uncertain due to factors such as weakness in the US dollar accompanying the expansion of US debt, the impact of financial support for Greece in the Euro zone, and the effects of the Great East Japan Earthquake. In such circumstances, expectations are high for the Zuken Group to tackle customers’ challenges worldwide in their monozukuri* operations, and offer solutions through our products and services.
Thirty-five years ago, the Zuken Group’s operations originated with the development of Japan’s first electrical CAD systems. We worked with customers to determine how to make electrical design more efficient; the common issue faced by the Japanese electronics industry at that time. After this we developed the monozukuri* infrastructure solution to manage design and parts information effectively to solve a broad range of issues in the monozukuri* environment. We also established a system to closely connect the design field and its infrastructure. Today, Zuken expands products not only in the electrical design field, but also in the mechanical and cabling design fields. We are also significantly reinforcing the functions for monozukuri infrastructure solutions toward the integration of electrical, mechanical, and cabling design.
The enthusiasm, products and services of the Zuken Group have been highly appreciated by customers not only in the electronics industry, but also in a variety of other industries such as the communications equipment, automobile and other transport equipment, medical equipment, aviation, space and industrial equipment fields, in which electronics technologies are the key to turning concepts and knowledge into actual products. Our solutions are increasingly adopted by the world’s leading companies in each industry.
Through these initiatives, during its 36th year Zuken will continue to actively make proposals to customers, adhering to its corporate slogan "The Partner for Success", aiming to secure our position as a true partner trusted by customers. Our performance goals are net sales of ¥19,200 million, operating income of ¥680 million and net income of ¥470 million.
To continue to be a trusted company
To be acknowledged by worldwide customers engaging in monozukuri* as a true par tner and secure a solid position in the global markets, Zuken must become a company that can gain even greater trust. To this end, adhering to our corporate philosophy to "Establish a vibrant corporate culture founded upon soundness, vigor and dignity," we will continue to nurture sophisticated and high-level technologies and tackle challenging issues, while ensuring actions with common sense and dignity.
In terms of profit distribution, the Zuken Group regards the return of profits to shareholders as an important management policy. Taking business performance and the operating environment into account, Zuken conducts effective profit distribution to shareholders. Based on this policy, we determined a term-end dividend of ¥7 per share for the fiscal year under review. Combined with the interim dividend of ¥7 per share, this resulted in an annual dividend of ¥14 per share. We plan an annual dividend of ¥14 per share for the next fiscal year as well (an interim dividend of ¥7 per share and a term-end dividend of ¥7 per share).
Shareholders’ continued understanding and support are highly appreciated.
Makoto Kaneko, President and Representative Director
October 2011
Notes: *Monozukuri "mono" = products; "tsukuru" = production
-
A process of value-adding steps to produce, duplicate, disseminate and communicate customer design requirements.
-
Integration of technology and production in collaboration with development, suppliers and production.
-
Monozukuri is also a mind-set for correctly creating and perfecting things.
-
Striving to "exceed customers' expectations".