Message from the President
Technology for the Earth
I would like to express our gratitude to our shareholders and investors for their continued support.
During the consolidated cumulative second quarter under review (April 1, 2023 to September 30, 2023), our country's economy showed a moderate recovery trend, centered around an increase in personal consumption and inbound demand, as well as capital investments aimed at digitalization, decarbonization, and labor saving efforts. On the other hand, the outlook remained uncertain, as a result of factors including the ongoing depreciation of the yen and a rise in prices caused by soaring energy and raw material prices, amplified by the widening interest rate differential with advanced economies.
In the global economy, stagnation of the economy has been observed due to the deteriorating employment situation in China and the sluggish real estate market. While consumer spending remains steady in Europe and the United States, the economic environment remains unstable as a result of factors such as inflation and the effects of the prolonged situation in Ukraine. According to the IMF's World Economic Outlook, economic growth in 2023 is expected to increase by 3.0% and in 2024 by 2.9%, down from 3.5% in 2022. The momentum of growth is thought to be weak due to geopolitical fragmentation, the slowdown in the Chinese economy, in addition to the effects of soaring prices.
In the shipbuilding and shipping industry, which are major customers of our company, the shift from petroleum-based fuels to next-generation fuels in response to stricter regulations imposed by the International Maritime Organization is advancing, and the demand for environmentally-friendly vessels is increasing. In addition, in order to cope with the rapid advance of digitalization, there is a need to strengthen the safe operation management system and optimize operations using AI and IoT.
In this corporate environment, in addition to sales of large and dual-fuel engines, mainly for container ships, sales of small and medium engines, mainly for bulk carriers and tankers, also showed a strong performance, and the demand for maintenance also remained strong in our group. In addition, in terms of R&D, we are working with organizations such as research institutions and universities to accelerate the development of next-generation fuel-compatible engines. Furthermore, as part of our investment in growth, we plan to expand our production facilities to accommodate next-generation fuels.
Since its founding, under our corporate philosophy of “We will hone our robust creativity and outstanding technology, offer value that enriches society, hope for coexistence with people and move forward without limits” we have worked to enrich society with our technological capabilities, which means supporting the safe and secure lives of people both on land and sea by securing marine logistics with our marine engines as well as regular and emergency power sources with our land engines.
The increasing awareness of environmental conservation triggered by the coronavirus pandemic and the rapid progress of digitalization are forcing business models around the world to be reconsidered, while at the same time creating new opportunities. Against this backdrop, in order to achieve sustainable growth and maximize long-term corporate and shareholder value, we launched our medium- to long-term vision “POWER! FOR ALL beyond 2030” in November last year.
In this medium- to long-term vision, the two most important themes to be addressed are “Balancing GHG (greenhouse gas) reduction with economic value enhancement” and “Providing new customer value,” and we have designated the period until 2030 as a preparation period to strengthen our growth foundation and improve profitability, and the period leading up to 2050 as the phase in which we will accelerate growth in order to achieve our vision.
In addition to the development of next-generation fuel compatible engines, we will also work to implement our new business strategy, “Triple C Fusion,” through servitization that actively makes use of AI and IoT.
The “Triple C Fusion” concept is based on the three C's of Connect, Collaborate, and Co-Create. Connect refers to connecting deeply with customers and business partners, understanding their needs, and delivering services that exceed their expectations. By connecting, we will forge true partnerships fit for the new age and build systems that can respond flexibly to market changes. Collaborate refers to sharing our knowledge and experience with customers and other industry professionals and taking on the challenge of solving problems in today's unpredictable and volatile world to improve our service quality and customer satisfaction. Finally Co-Create refers to working with customers to create new services and solutions that deliver new value to the market and evolve our company's business into something even more valuable.
In order to continue to be a sustainable company, we will promote business restructuring through selection and a concentration in growth areas and strive to improve growth and profitability in global markets.
We look forward to the continued support of the shareholders and investors in our group.
Yoshinobu Hotta, President
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