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Message from the President

Message from the President

President ITO Photo

Continuing to meet the needs of our customers by constantly anticipating changes over time.
That is the business model of the Fujikura Group.

It has been 133 years since the company was founded in 1885. Certain that the age of electricity had come after seeing the arc light in Nihonbashi, Zenpachi Fujikura, the founder, began producing electric wire. That marked the beginning of Fujikura. The company recognized the need to solve the social challenge of establishing public infrastructure in Japan and has subsequently accurately anticipated the changing times and needs of society and provided highly reliable products and services in the four areas of energy, telecommunication, electronics, and automotive products on a constant basis. We have achieved this through the “tsunagu” (connecting) technologies that Fujikura has developed through the research, development, and manufacture of electrical wire and cables. This has contributed to prosperity, not only in Japan, but in countries and regions throughout the world. Fujikura has an organizational culture that enables response to change even in an era of increasingly accelerated changes and I am confident that we will be able to contribute to society in the future as well.

Since its founding, Fujikura has built deep bonds of trust with our customers, who are important business partners, by meeting their potential and apparent needs. These deep bonds of trust with our customers will continue to be our competitive advantage in the future and are integral to our business model. One thing I have communicated to our employees repeatedly since I became president in 2016 is the importance of calling on our customers. This enables us to solve problems from the same perspective as the customer. I also put that philosophy into practice by going to numerous exhibitions. Exhibitions are a valuable place to watch the customers who have come to the exhibition actually touch Fujikura Group products and listen to an employee’s explanation of them, and find out if employees are able to see things from the customers’ perspective. My view is that constantly asking ourselves whether we are working with the customer as one team and answering that question on a daily basis will lead to an even deeper bond of trust with the customer.

This view is explicitly stated in the Mission, Vision, and Core Value that make up our corporate philosophy as “Are you doing enough to ensure customers are perfectly satisfied?” I will stand at the forefront in managing our business according to corporate philosophy to truly implement it.

Observing an exhibition photo1

Observing an exhibition

Observing an exhibition photo2

I advance integrated group management by going to the frontlines of numerous sites.

Integrated group management is striving to achieve management that is highly efficient and optimal for the group as a whole by sharing the same goals among all employees and taking a team approach to management. Since I became president, I have taken the initiative and set a good example by visiting individual locations around the world and working to communicate with people on the frontlines to lessen the sense of distance between management and those on the frontlines. I think it is important for management to gather employees who are working on the frontlines of a location in a circle and listen intently to their opinions from time to time, and I look forward to going to many more locations in the future.

The rapid deterioration of profitability in Eastern Europe in FY2017 negatively impacted profits in the Automotive Products Company. I also headed there and directed the management of Fujikura Automotive Europe and the Automotive Products Company to work as one team to improve the situation. I think the strong team built in the process of performing root cause analysis and asking whether the corporate philosophy and values of the Fujikura Group and the goals and aims of the Automotive Products Company have been shared has restored the momentum toward healthy business growth in the future.

Another part of integrated group management is the group debates that we always engage in at group executive management meetings in Japan and overseas. We will work to energize communication and evolve integrated group management by creating opportunities for everyone to bounce their opinions on a common theme off of everyone else and think about what is needed to create new value in the group as a whole.

Setting a good example by visiting global locations

Setting a good example by visiting global locations

Touring a plant in Japan

Touring a plant in Japan

Touring an overseas plant

Touring an overseas plant

My mission is to achieve SDGs through our main business

Fujikura has solved social challenge of building social infrastructure through the company’s main business since the company was founded. We take pride in the fact that we have not only contributed to the development of Japan, but to the development of other countries and regions around the world. We think that we can contribute to the achievement of the sustainable developments goals (SDGs) pledged around the world as we maintain the position we have adopted on contributing to society up to this point, and are pursuing concrete activities toward this end. Thinking about global issues through the lens of SDGs is a major opportunity that could lead to sustainable growth of the Fujikura Group.

I believe that creating shared value (CSV) through our main business, which can enhance the value to society and also provide economic value, is important to future growth. We positioned 2017 as the year in which we debuted CSV and are engaging Takashi Nawa, a professor at Hitotsubashi Graduate School of International Corporate Strategy and the top expert on promoting CSV in Japan, in a dialog as we pursue initiatives in CSV, mainly through products and investment.

We are working to meet the needs of customers while simultaneously creating value by solving social challenges through product-based initiatives such as developing green products and other environmentally friendly products, and products that provide solutions to challenges such as increasing data capacity and establishing urban infrastructure, etc.

Investment-based initiatives are focused mainly on supporting education in emerging countries. The Fujikura Group established a local subsidiary in Myanmar, where progress has been made on establishing social infrastructure in the past few years, and is working on local social infrastructure projects. We also launched the Fujikura Scholarship System in 2015 to assist in the development of human resources skilled in science and technology who will be responsible for the next generation, and will work to contribute to the development of Myanmar through this and other initiatives in the future.

Because the Fujikura Group is also a manufacturer, we recognize that assessing the impact our activities have on the environment and taking steps to address this is a social responsibility required of us and we have linked our mid-term business plan to ESG (Environmental, Social, and Governance) elements. On the environmental front, we have formulated the Fujikura Group Long-term Environmental Vision 2050. Based on this vision, we are undertaking four long-term, ambitious challenges, one of which is zero CO2 emissions at our plants by 2050. There are many challenges on the social front, such as responding to human rights-related risks in the supply chain, and we are pursuing activities that will contribute to the long-term enhancement of corporate value.

I think that many of these initiatives are highly compatible with SDGs and we will pursue initiatives aimed at achieving SDGs that will also meet the recent demand for ESG investment among shareholders, mainly among institutional investors.

The award ceremony for the Fujikura Scholarship System in Myanmar

The award ceremony for the Fujikura Scholarship System in Myanmar

Engaging in a dialog on CSV

Engaging in a dialog on CSV

Our employees are assets. This is our unchanging conviction.

I think that our employees are assets. That conviction traces back to 1919, when Harukichi Nakauchi, the younger brother of the founder, used his personal funds to establish Fujikura Gakuen, a facility for people with mental disabilities. There were hardly any facilities that would accept people with mental disabilities at the time and the establishment of Fujikura Gakuen by the founding family helped to solve a social challenge. This concept of contributing to society has been continuously supported by our predecessors in each generation since the company’s founding. Visiting Fujikura Gakuen gave me a fresh awareness of the views of our predecessors and I feel that I learned the importance of valuing people and having an attitude of working to solve social challenges once again. I recognize my responsibility to hand down this belief in valuing people, which is the DNA of our predecessors, and am focusing on essential safety and health management in particular as one way to enhance corporate value.

In regard to essential safety, I repeatedly communicate the fact that safety itself constitutes corporate value. April 11 of each year has been designated as Safety Pledge Day so that we do not forget accidents that have occurred in the past. I will work to introduce a risk assessment system for implementing essential safety and the main focus will be on reducing all safety risks to a tolerable level and eliminating serious accidents.

In regard to health management, I announced the Fujikura Group Health Management Pledge on January 1, 2014, in recognition of the fact that employee health is an important management resource. To heighten health consciousness and improve productivity of employees, we have distributed pedometers and installed body composition analyzers, blood pressure cuffs, and other health monitoring equipment at each location. We collect and analyze the individual health data and develop original (Fujikura Stretch) exercises designed for each location based on that data. We are aiming to improve work productivity by having all employees, including officers, participate in the exercises each day. We have also set up a website dedicated to health for individuals to provide individual advice on health. Our efforts in such initiatives were recognized and Fujikura was selected as the 2018 Health & Productivity Stock Selection for the first time. The market also valued our efforts. Our employees are assets. As the person in charge of hiring for the Fujikura Group, I will continue to manage the company based on this unchanging conviction in the future.

Address on Safety Pledge Day

Address on Safety Pledge Day

Enjoying a break with Oshima Fujikura Gakuen users

Enjoying a break with Oshima Fujikura Gakuen users

Selected as the 2018 Health & Productivity Stock Selection for the first time

Selected as the 2018 Health & Productivity Stock Selection for the first time

Maintain and improve profitability based on high earning power and the power of a strong metabolism.

Fujikura launched “Change ourselves and bridge to the future! 2020 Mid-term,” the theme of the five-year 2020 Mid-term Business Plan for the Fujikura Group, in April 2016. We are working to build a strong company that will continue in the future based on high earning power and the power of a strong metabolism. The part of this mid-term business plan that I am most focused on is high earning power and I regard an operating margin of 7.0% or higher in FY2020 as the most important indicator of this. FY2018 is an important year for reflecting on the mid-term business plan and will determine whether we will reach our FY2020 goals.

Looking back on last fiscal year, the Automotive Products Company saw a rapid deterioration in profitability during the first half due to cost increases resulting from labor issues at locations in Eastern Europe. However, this was more than compensated for by robust global demand related to optical fiber in the Power & Telecommunication Systems Company and the steady launch of new models by customers of the Electronics Business Company. Both sales and profits increased as a result, and we have maintained and strengthened our earning power.

To summarize the initiatives in each internal company, the Power & Telecommunication Systems Company achieved a steady launch of optical fiber mass production and will work to expand sales and strengthen manufacturing of the strategic products Spider Web RibbonR/Wrapping Tube CableR. The Energy Business will complete its goal of structural reform of the business this fiscal year, and is aiming for progress on the next area of growth, mainly in the overseas EPC business, and on improving profitability. The Electronics Business Company will earn the strong trust of customers through strict business management rooted in quality, and will target further cost reduction and greater growth. The Automotive Products Company is steadily implementing measures to correct the rapid deterioration in profitability and will perform a check of the business base and rebuild it.

Fujikura Dia Cable Ltd. is exploring the market for its diagnostic service for cables installed in plants and buildings and is working to develop new products as initiatives in new business creation. It has also begun to produce success in the medical field, a new area of business.

Turning to progress on the 2020 mid-term business plan, we have made dramatic progress on ultra high-count multi-core optical fiber cables with our Spider Web RibbonR/Wrapping Tube CableR technology, new strategic products that fulfill even more needs for strategic customers and enable transmission of large volumes of information data with the space saving, resource saving, and superior construction demanded by customers. This has earned Fujikura even greater trust from customer than before.

The objectives of open innovation are to create new value and accelerate the metabolism of changes. Fujikura is expanding innovation-creating activities through collaboration with outside venture firms and other entities. In terms of management reform, we have transitioned to a company structure that has an Audit & Supervisory Board to speed up decision-making and strengthen the oversight and supervisory function. Authority is delegated to executive directors to speed-up decision making and the number of outside directors has been increased from one to four, to strengthen the oversight and supervisory function. We are working to make the Board of Directors even more active through these measures.

A Nominating Advisory Committee and Remuneration Advisory Committee have also been established. A majority of committee members are outside directors to ensure open and transparent management.

In regard to the cases of impropriety related to quality control of some of our products, which were publicly disclosed on August 31, 2018, I will take the lead on getting to the bottom of the entire problem, developing comprehensive measures to prevent recurrence, and further strengthening governance of the entire group so that such an incident never occurs again.

I will enlist the entire group in managing the business as a company focused on creating value for customers by providing solutions to social issues and achieving SDGs. My goal is to make Fujikura a company that is appreciated by customers, valued by society, and will continue in the future based on high earning power and the power of a strong metabolism. Please look for growth of the Fujikura Group in the future.

Ito Masahiko Signiture

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