Top Message

Satoshi Masumura President and Chief Executive Officer

Looking back on the history of Takasago from its founding to today, what are the strengths that have supported its business through the years?

I think one of the strength is our technological capability. "Contributing to Society through Technology" is our corporate philosophy that has been passed down to today ever since the Company was founded by engineers. We have been creating new flavors and fragrances that meet the needs of our customers which changes as the time goes by.
Another strength is the fact that we were able to grow as a global company by expanding into the overseas market in the 1960s, which is relatively early period for such a venture, as we sought suppliers for a wider variety of aroma ingredients and sales destinations for synthetic flavors and fragrances.
As flavors and fragrances have regional characteristics, we were able to accumulate knowledge not possessed by our competitors such as overseas market preferences through steady local-based market development and transactions with overseas customers. That knowledge enabled us to develop, manufacture, and market products that meet local needs. Also, in the area of R&D, our Corporate Research & Development Division in Japan serves as a primary base which coordinates with our R&D sites around the world during the current era of globalization, further enhancing the chances of creating new technologies. I would like to see us maintain these strengths over the next 100 years.

Please elaborate on the mid-term management plan "One-T".

Takasago Group has been working on the Takasago Global Plan since 2009 toward the 100th anniversary of our founding in 2020, and its final stage is the 2018-2020 mid-term management plan One-T. The idea behind the name "One-T" is to unify our locations spread across 27 countries and regions around the world as one to become "One Takasago" which will move the plan forward. We are quickly moving forward with efforts including strengthening collaboration with our bases overseas whose independence we have respected until now, standardizing operations as a global company, and creating a governance system.
Since the global flavors and fragrances market is expected to continue to expand, we are preparing a system that will allow us to develop and provide, in a timely manner, high value-added products that reflect the needs of Asia, a region that is driving the market, and in Europe and the United States where growth is expected to continue. In the current term, undertakings such as the construction of a new plant in Indonesia and expansion of our quality control center and distribution center in Germany are moving along smoothly.

What are the issues and points of focus in the second year of One-T?

Although we did not anticipate them during the planning stage of One-T, the prices of both natural and synthetic aroma ingredients handled by the Company is soaring. As a response, we are working to reduce/stabilize costs by securing medium to long-term contracts with our suppliers and secure sufficient quantities of raw materials. We have established joint ventures with farmers and processing businesses in Madagascar, where we procure vanilla from, and also have been collaborating with grapefruit and orange juice companies in California, where we procure raw materials used for citrus flavors , in order to ensure stable procurement of raw materials. We will continue to strengthen partnerships with our suppliers from a long-term perspective and strive to collect information at production areas.

What do you wish to achieve in One-T?

We aim to become one of the leading flavors and fragrances companies in the world through further strengthen our synthetics capabilities by enhancing our unique catalyst technology and continuous flow technology and increasing the number of new business pillars.
Also, it is necessary for us to incorporate initiatives for solving social issues such as climate change into our business activities in order to achieve medium and long term growth. We aim to contribute to solving global issues as a global company by positioning One-T as three years to further promote CSR through linking responsible procurement, climate change, employee diversification, and other important issues for the Takasago Group with Sustainable Development Goals (SDGs) which are demanded by the society.
In the final year of One-T, we aim to achieve net sales of 170 billion yen and operating profit margin of 5.2%. Although sales are steadily growing, operating profit margin needs to be worked on with extra efforts. This is because we need to make medium to long term investments such as updating our research facilities and plants in an environment where the prices of raw materials are soaring, while the entire Group is striving to improve its profit structure.

Please provide a message for the shareholders.

We will continue to fulfill our responsibility of maintaining steady supply of high quality products to our customers and contribute to the mental and physical health of people around the world with our flavors and fragrances through utilizing our technological capabilities which we have cultivated since our founding and our strengths as a global flavors and fragrances company based in Asia. We would like to thank our shareholders for their support.

Satoshi Masumura
President and Chief Executive Officer
June 2019