SHIFT2030 medium- to long-term business plan marks its third year. Nitta's ideas on manufacturing, which continues to adapt to changes in society and meet customers' needs, and our efforts and determination to further accelerate these activities are embodied in “SHIFT.” Two years have passed since the start of SHIFT2030, and we have faced waves of major change such as COVID-19, a sluggish global economy, and soaring resource and energy prices. We have renewed our commitment to the ideas embodied in SHIFT, and we are determined to continue moving forward, resolved to confront this era of drastic change head on.

The products we create help make people happy, as expressed by the NITTA Group Mission “With products that lead to the future, NITTA makes things happen. We move the world forward and bring happiness to people.” That was the desire of our founder, and the Nitta Group has handed down that idea for 138 years. Today, we have our eye on the world 20 years, and even 100 years, ahead. The key question is what we need to do now for a future where our business continues and we achieve further growth. One answer lies in the characteristic approach of Nitta that has been cultivated in an unbroken line since our founding. Nitta was born in an era of tumultuous change, and we have continually created products in service of society while always keeping a close eye on changing times. We have inherited that DNA.

The Nitta Group will continue to tackle challenges. Toward realization of SHIFT2030, and further growth in the future. The most essential element for creating lasting corporate value is relationships of trust with all our stakeholders. I ask for your understanding and support as partners striving for a prosperous future and an ideal world.

In fiscal 2022, we saw the continuation of an extremely unstable social situation, with events such as the protracted Russian invasion of Ukraine, economic downturn due to tightening of monetary policy all over the world, and soaring resource and energy prices. Despite such conditions, we recorded the highest ever net sales in our Group’s results for the fiscal year ended March 31, 2023, repeating our achievement for the fiscal year ended March 31, 2022, and setting new net sales records two years in a row. Although there was some decline in profits, it was a good year considering how we have rebounded from the impacts of COVID-19 three years before. I feel we are steadily moving toward achieving the targets of our medium- to long-term business plan for 2030.

Additionally, in our group’s major markets, sales remained strong throughout the year due to capital investment in the semiconductor and logistics industries. Sales to the automobile industry also showed a recovery trend over the second half of the year, and the trend looks favorable moving into the next fiscal year. As we enter the third year of our SHIFT2030 medium- to long-term business plan, we will likely continue to see a changing social situation and difficult business environment, but we will use the changing times as a motivator, and advance toward further growth.

We regard improved business profitability as vital for achieving our SHIFT2030 medium- to long-term business plan. First, we must strengthen the profitability of existing businesses. Continuation of existing businesses is not the most important issue. Based on the concept of “business restructuring,” it is necessary to identify businesses that are growing and businesses that are sluggish. We will invest resources in businesses that will continue to grow, and will continue to be selective and focused.

In response to soaring raw material expenditures and high logistics costs, we will need to hold down procurement costs through careful, low-key efforts. Under such circumstances, one of the important initiatives aimed at reducing costs and saving labor is DX (digital transformation). In parallel with steady and swift action to build a system for utilizing data, it is essential to strive for improved operational efficiency by doing our own analysis of operational methods, and working to achieve rational, efficient work methods.

The SHIFT2030 medium- to long-term business plan was launched amid major impacts on society due to COVID-19. These changes have brought new waves of work style reform and digitalization to our lives and society. At our group, we have been creative and ingenious in responding to the changing times and the demands of society. We have launched a “Digital Management Promotion Team” and are striving to popularize remote work, and various new methods and ideas have been born. Currently, COVID-19 is classified as a Category 5 infectious disease, and the previous daily life is returning to normal. COVID-19 was not just a negative. It was a major opportunity to change our lifestyles, society, and work styles. Many good things emerged as the “new normal.” Instead of putting everything back together, keep the good things. Society and work styles will change more and more in the future. I feel it is important to further elevate each new initiative in line with the changing times and optimize it for the next generation.
SHIFT2030 started with a period of major change. By viewing change itself as a driving force, we will strive for even greater growth by generating new initiatives and ideas.

We intend to proactively strengthen our human capital in order to achieve sustainable growth for our group. Starting in April 2022, we will be working on system reform over the course of approximately two years as part of the “SHIFT of Human Resources System.” The first point is to shift to a results-based system. We will gradually transform our system from a seniority-based system that assumes lifelong employment to a system that rewards and promotes based on performance. In today’s world, where many Japanese companies are suffering from a shortage of human resources, reforming the personnel system with a focus on performance is an important measure for attracting and retaining good human resources.

At the same time, we will focus on expanding employment for seniors and women. We aim to create a system and work environment that allows seniors to work with more vigor and motivation. To this end, we will review the system to ensure that employees receive compensation commensurate with their performance, with the basic philosophy of equal pay for equal work. In addition, we will improve the employment system for women. According to a simulation conducted by a national organization, if a woman returns to work after six months of childcare leave after giving birth to two children, her lifetime wage will be approximately 230 million yen, whereas if she quits when she gives birth and works part-time, her lifetime wage would be approximately 60 million yen, which would be significantly lower. This is a huge loss for Japanese society as a whole. Under these circumstances, the Japanese government is also supporting women's continued employment after giving birth, with the Ministry of Health, Labour and Welfare “requiring companies to make efforts to create a system that allows people with children up to three years old to work remotely.”
In addition to systems that allow women to return to work after childbirth, we intend to further enhance its support systems in the future so that households raising children can work with peace of mind, including parental leave for men. To this end, I feel it is necessary to utilize the voices of not only our group's human resources department and executives, but also female executives, to actively work on reforming our personnel system and creating a better working environment.

Currently, the mobility of human resources is progressing, and the barriers to changing jobs are getting lower and lower, and many of them aim to improve their pay, advance their careers, and improve their abilities and skills by changing jobs. According to a 2022 survey, “only about 30% of Japanese companies have seen their employees' salaries increase,” and it is said that dissatisfaction with treatment is increasing because wages have not increased. This shows that many companies are unable to meet employees' expectations for compensation and desire for growth. However, if a company can support the growth of its employees by creating an environment where they feel motivated to work and by creating learning opportunities that meet their aspirations, I believe that they will be able to experience personal growth while working for a company for a long time.
We believe that a virtuous cycle in which employees gain satisfaction by improving their abilities and producing results will lead to increased motivation to work. On the other hand, objectively measuring employee satisfaction is a difficult task. How can we measure satisfaction? We believe that not only creating a system, but also verifying its effectiveness and results are important efforts in personnel system reform.

The basic ideas of the SHIFT2030 medium- to long-term business plan are “deepening” existing businesse and “exploring” new businesses. Pioneering new businesses has becomes particularly vital for achieving targets for 2030, and for growth with an eye toward the future beyond that. The main businesses and products that support our current management are not everlasting. New business is the most critical issue for creating the pillars of our business 20 years from now, and we must actively and consistently work to create these businesses.

Namd^TM is NITTA’s unique new technology that uses carbon nanotubes. This technology has been highly praised by third parties, including being awarded at academic conferences. We are currently moving forward with commercialization with high expectations. The technology is already being used in sports equipment, and our Group’s next objective is to expand industrial applications. The new 8th Plant Building was completed in March of this year. We plan to use this as a foothold to further expand our business.

Also, our new business exploration team is marking its second year, and the team will continue its energetic efforts to create new businesses. Since I come from a technology development background, I am well aware of how difficult it is to develop new technologies and create businesses. Some 40 years ago, it was considered a success if 30% of the projects considered were realized, but currently, if one project out of 100 can be commercialized, it is considered a great success. At that time, there were many requests for products from customers. In today's society, which is becoming more complex and diverse, customers themselves do not know what kind of products they need. Therefore, the number of clear requests for products reaching our group has decreased significantly. With limited clues, we have to explore new products and technologies. This requires the savvy and inspiration of sales people and engineers. We need the imagination to stay ahead of changes in the times and predict what society will need. To achieve this, training and education are necessary on a daily basis. Currently, we are incorporating temporary proposal-based training into our new employee training. How can we utilize our group's existing technologies and products to address social issues? We will also consider what new technologies and products are needed to solve social issues, and present plans for commercialization. We are implementing grass roots initiatives to develop the human resources that will carry our Group forward in the future. These include education and training to impart a sensibility and thinking style not constrained by existing concepts, and to cultivate the ability to take action.

In terms of reducing CO₂ emissions, we are making steady progress toward achieving our 2030 goal of a 46% reduction compared to 2013. In addition to initiatives centered on our group's manufacturing division, we have also begun activities in cooperation with the our supply chain to comply with Scope 3. And we are actively promotingCO₂ emission reduction activities and environmental investment in our business activities, such as installing solar power generation equipment in every new building constructed by our group.

Furthermore, through our participation in the United Nations Global Compact and TCFD, we will contribute to the environment on a global level and clearly demonstrate our stance as a company responsible for the future. In addition to reducing CO₂ emissions and participating in initiatives, we will also work to resolve the various environmental and social issues necessary for society's sustainable growth, thereby truly fulfilling our social responsibilities and ensuring the Group's sustainable growth and our corporate value.

In order for the NITTA Group to continue to grow into the future, I believe that we ourselves need to know and understand what “NITTA's strengths” and “NITTA-ness” are. During the Taisho era, the founder gave a message to his employees: “There will be 10 years of progress in the world in 10 years, so please realize the progress that will be made in 10 years now, and the progress that will be made in 20 years in the next few years, or we will not be able to make any more progress than the rest of the world.” He further advised that “out of 10 possible projects, 8 to 9 will fail, so pursuing one or two that look good can lead to great results.” I realized the founder’s commitment to the business, and the severity and difficulty of the business. His advice also resonated with my own thinking, and I realized once again that we too have inherited the founder’s DNA. Isn’t this what makes NITTA unique? Taking this advice to heart, I have once again strengthened my resolve to develop new businesses and achieve significant growth in the future.

NITTA was founded as a transmission leather belt business. While developing Japan’s first power transmission belt, we traveled to Hokkaido in search of virgin oak forests to harvest glue for leather tanning. We developed a veneer business there and diversified our business by manufacturing gelatin, etc. Throughout its long history, NITTA has survived many recessions and has continued to grow. NITTA’s survival is due to business diversification, which is also part of NITTA’s DNA. The footprints of NITTA’s growth and its strength are engraved in the forests of Hokkaido. We position our forestry business in Hokkaido as a “symbolic business” of the NITTA Group, and intend to protect and continue it.
In order to continue, we do not seek to make large profits, but rather to grow it as a healthy business over the long term.

Furthermore, in order for Nitta to continue, we will grow it as a healthy business over the long term, rather than seeking large profits. We will diversify our business and direct resources to growth areas through selection and concentration. By doing so, our business will grow, expand further, and create new value. The trajectory of Nitta’s unique business operations from its founding to the present serves as an important guideline for further growth in the future.

The NITTA Group will continue to take on challenges to develop new businesses and further improve corporate value. The attitude of continuing to take on challenges without giving up is also part of the “NITTA style,” and is the driving force for growth. Please look forward to the further progress of the NITTA Group towards 2030, which is the goal of our medium- to long-term management strategy, and towards the future beyond that.