Tsudakoma Expected to Achieve Initial Fiscal Targets

Tsudakoma Corporation is expected to achieve the initial business targets set for the current fiscal year ending this November.

The planned targets for the current fiscal year are consolidated net sales of 40.5 billion yen, operating profits of 800 million yen, ordinary profits of 700 million yen and net profits of 550 million yen.

The company had net losses totaling 90 million yen up to the third quarter. However, Tsudakoma President Nobuhiro Takano expressed his intention of achieving the fiscal targets, saying, “The net losses were because of unexpected amortization. Exports to India suffered as letters of credit were not issued in the first quarter, but came to recover from the second quarter and improve overall earnings.”

In the two-year management plan that spans the previous and current fiscal years, the company aims at “a resurrection of a strong Tsudakoma”, and achieved profits for the first time in five years in the previous fiscal year. In the current fiscal year, it is establishing an earning structure that would increase profits in each stage, such as an increase of 9.9% in operating profits.

Particularly in Japan, Tsudakoma succeeded in achieving an appropriate production system. A profit-oriented sales strategy has also contributed to its business performance, such as bringing daily production from 35 to 30 looms in the previous fiscal year.

As far as the next fiscal year is concerned, there is nothing to be worried about as orders are currently favorable. The new taxation system in India might affect exports to this country, but the desire to invest is strong. Even for the Chinese market where stricter environmental regulations are resulting in the reduction and scrapping of equipment, customers that comply with laws and regulations are moving to increase their equipment and facilities, and this is having a favorable impact on its business performance. Furthermore, capacity expansions are expected to be made, such as in Southeast Asia by Taiwanese companies and in airbag fabrics by Japanese companies in Japan and abroad.

Tsudakoma plans to announce this December a new medium-term management plan that is to continue for three years from the next fiscal year. The company has had a target of achieving a 10% margin in operating profits in the fiscal year ending in November 2020, and is committed to product development and cost reduction with an intention of establishing a stable earnings structure linked to growth. Business towards the industrial material sector will also be strengthened to raise the share of this sector centering on airbags in overall business to about 30% from the current 10%. The company has also started handling tire cords, and one task is how large a market share it can obtain from rapier and projectile looms.

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