As the COVID-19 epidemic gradually stabilizes, Japan gradually begins to resume normal production and social activities from late May. However, the COVID-19 epidemic is still fluctuating, economic activities are still at a low ebb, and the performance of the apparel industry is generally sluggish, and its impact is expanding to the entire supply chain. In such a difficult situation, how can Japanese fiber companies overcome this difficulty and face the future? Toray, Asahi Kasei, and Teijin gave their own answers.
Reporter: The new crown epidemic has brought great challenges to the company’s operations What kind of impact will it have?
Toray President Akihiro Hikaku: Affected by the new coronavirus epidemic, the company’s situation from April to June was very serious. We are already prepared for a substantial increase in performance in the first half of the fiscal year. decline. However, some people believe that the new coronavirus will come to an end after the arrival of summer. If this is achieved, substantial growth is expected in the second half of the fiscal year. However, based on the premise that the epidemic is over, we are preparing to boost performance through recovery in the second half of the fiscal year, and the final full-year performance will exceed that of fiscal 2019.
Asahi Kasei President Hidetoshi Kobori: Originally, the world economy had been on the path of slow recovery, but now it has changed. Last year was the year when our company’s new medium-term business plan started. We established the Sustainability Promotion Department and the Marketing & Innovation Headquarters, and took appropriate measures. It is planned to implement approximately 800 billion yen in equipment investment, investment and financing within three years, and more than 400 billion yen of investment has been determined. However, due to changes in the business environment, future equipment investment, investment and financing must be strictly considered. Forecasting the situation for this fiscal year is inherently difficult because the situation is extremely severe. Fiscal year 2019 is a period of transition. Coupled with the impact of the COVID-19 epidemic, the downturn in personal consumption has had a great impact on our business. From Japan’s perspective, the impact of the postponement of the Tokyo Olympics and Paralympics cannot be ignored, but as a manufacturing industry, it is very important to maintain continuous production even if the operating rate decreases.
Teijin President Jun Suzuki: The numbers are very grim, but there is still some progress in business. In particular, the Material business is basically proceeding as planned. The profitability of aramid fibers has increased, and the resin has enhanced its basic profitability while transforming its structure. Although carbon fiber is not conspicuous in terms of data, American factories have perfected a system that can expand sales in the field of aircraft intermediate materials. Teijin Frontier Co., Ltd. can also continue to implement an independent operating system. Regarding the Healthcare business, there are some things that are not going well, and the new business is not sufficient in terms of numbers. However, the existing business is more stable than expected, and the performance is progressing well.
Reporter: What changes has the new crown epidemic brought to industrial development?
Toray President Akihiro Hikaku: Restrictions on the movement of people are one of the impacts of the COVID-19 epidemic. Many businesses have been forced to work from home or over the phone. At the beginning, everyone was not used to it, but later they felt like “I can actually do it to this extent.” If 5G is available, we can work more efficiently, and communication-related demands will be much higher than previously expected. The second impact is the restrictions imposed by various countries and regions. While internationalization has gained ground, demand for aircraft has fallen to extremely low levels due to entry restrictions. Some people expect demand to continue to decline in the future, but I have a different opinion. Not only communication, face-to-face communication between people is indispensable. The demand for aircraft as a means of mobility will certainly recover in a few years.
The world’s population is growing, and the demand for textile and clothing products is also expanding. Under such circumstances, the demand for comfort, environmental protection, and high performance is also increasing, mainly in the high-end segment. But there are only a few companies in the world that can provide such fiber. They cannot compete with Chinese companies in terms of quantity, but Japanese companies can exert their advantages in aspects such as comfort, environmental protection, and high performance. Textile and clothing products are necessary for life and can change life through their functions. In this sense, textiles still have great opportunities to expand their business.
Asahi Kasei President Hideki Kobori: The rapid spread of the COVID-19 epidemic around the world has become an opportunity to bring about a future that is different from the past trend. The supply chain structure, market map, and different aspects including industrial structure will undergo tremendous changes. It will take a closer look at what the world will look like after the pandemic is over. The COVID-19 outbreak is exploding globally, and the end period will vary from country to country. To this end, countries and regions have adopted different response methods, and the relationships between countries and regions will be different from before. It is undeniable that the world economy may suffer huge change. In the medium to long term, environmental protection response is an issue that cannot be ignored, but when emergencies like COVID-19 occur that are related to human life, related industries must play an extremely important role. Considering the importance of information and telemedicine, 5G will accelerate the development process.
The scope of the textile industry is still unclear, but many new things will be born in terms of fiber yarns, raw cotton, and technology, and will be used in various fields. One of them is the field of medical equipment such as protective clothing. In the Healthcare field, including clothing for doctors and nurses, textile technology can be said to have a lot of room for activity.
Teijin President Jun Suzuki: Depending on the industry,Recovery speeds also vary. Automobiles are recovering with impressive momentum, with the potential for increased production. Planes may not be able to recover quickly due to the severe situation faced by airlines, but I think they will recover slowly. Aramid fibers and resins are used in a wide range of applications, and I want to be able to achieve recovery. In this way, the response methods adopted are different depending on the business. In order to cope with the changes, preparations should be made in earnest. But I believe that “human lives come first” and “employees come first”, and I remind employees that they “can’t work reluctantly.”
Reporter: Facing the changing situation, what measures will the company take to respond?
Toray President Akihiro Nikaku: The company formulated the “Toryu Group Sustainability Vision” in 2018, which describes the group’s vision for 2050 and how to achieve this vision. And the efforts that need to be carried out, and the goals for fiscal year 2030. In this way, we always think about how we can contribute to society from a long-term perspective and implement these in our mid-term management issues. The direction of our efforts now will not change significantly in 10 years. Contributing to society is our company’s basic policy, not just pursuing sales. In the future, we will continue to promote efforts to contribute to society, green innovation projects aimed at realizing a sustainable low-carbon society, and life innovation projects focusing on improving medical quality.
Asahi Kasei President Hidetoshi Kobori: The basic policy of “continuously contributing to the sustainable development of people and the earth” will not change. Position the three areas of “Material”, “Residential” and “Healthcare” as growth areas. Due to the COVID-19 epidemic, we have also discovered new value in the five fields of “Environment & Energy”, “Mobility”, “Lifematerial”, “Home & Living” and “Healthcare”. Our company’s advantage is that we have multiple pillar businesses, and our policy for establishing business structure has not changed. It varies depending on each business, so it is important to consider the issue from a mid- to long-term perspective while focusing on the current situation. This is greatly affected by the politics and economics of each country. The world economy will undergo changes, and it is indispensable to analyze and judge the supply chain and market.
After the epidemic is over, new business models using 5G and other technologies will emerge around the world. Manufacturing and service industries may also become one. In such a situation, it is important to gather information closer to the market. The same goes for textiles. The key is what uses can be developed using textile technology. I think one of the key words is Healthcare.
Teijin President Jun Suzuki: The new medium-term business plan is formulated with the goal of 2030. I believe that if we can move in that direction, we won’t be “in the wrong place.” Businesses are divided into Material Business, Healthcare Business, and Other Businesses. From now on, the terms “Profitable Growth” for profitable growth and “Strategic Focus” for cultivating future sources of income will be used.
The Material business’s resin, aramid fiber, and carbon fiber yarn sales will become Profitable Growth. These materials themselves are very strong and have many products that can be active at the forefront for a certain period of time. The processed higher value-added products are strategic focus. For example, carbon fiber intermediate materials for automobiles and aircraft.
Based on the idea that “materials will one day catch up”, we actively develop the next generation of new materials, but a certain material cannot always win and must evolve. </p
