The Textile Machinery Division of Tsudakoma Corp. aims to increase its sales and profits in the current fiscal year (ending in November 2017), with top priority given to price ratio (profits).
The division plans to sell more than 5,000 looms, which is a slight increase over the previous fiscal year.
In the fiscal year ending in November 2016, the division increased its textile machinery sales by 7.1% compared to the previous fiscal year to 31.1 billion yen, and operating profits climbed 1747.1% to 1.2 billion yen, thus it contributed greatly to having the company regain profits. A sales strategy that attached importance to value was successful. While it focused on profit margin, the division endeavored to stabilize loom production, and tried to avoid unreasonable sales.
Exports to China moved stably at a low level, while exports of air-jet looms to India were favorable throughout the year. As a result, loom sales increased to nearly 5,000 from 4,600 in fiscal 2015. Although water-jet (WJ) loom decreased from 1,700 to 1,400, air-jet looms sharply increased to 3,600 from 2,900 thanks to the demand growth in India.
The sales composition by country in fiscal 2016 was 19% for China and 39% for India, as compared with less than 40% for China and 20% for India in fiscal 2015. Shipments to the Japanese domestic market remained flat at nearly 8%.
Since the current fiscal year is the second year of the company’s two-year management plan, the division intends to make it a year achieving a real V-shaped recovery of business. It is placing an emphasis on sales prices, cost management, value creation, proposals, etc. with an aim at continuing the increase in sales and profits.
According to a company official, it has been a difficult first quarter. The Indian Government’s decision to abolish high-value bills last November is said to have caused a delay in the issuance of letters of credit (L/Cs). However, this phenomenon is considered to be transient. Further increases in sales and profitability can be achieved because loom demand in India has not declined, and a recovery in China can be expected.
Should loom sales surpass 5,000 looms in the current fiscal year, it would be the first time in three years that its sales will be on the 5,000 level, but the contents would be different from 3 years ago when cutthroat competition ignoring profitability was prominent. In the current medium-term management plan, importance is placed on the profit ratio and having it become established as a “positive spiral”.