Improving profitability through production transformation, labor saving and a 100% yield

「Profit increased substantially as the effects of ongoing optimization of product selling prices, lower raw material costs and productivity improvement activities in each business materialized. As a result, revenue for the six months ended the interim period was ¥1,631 million, down 1.3% year on year; operating profit was ¥97 million, up 107.1%; ordinary profit was ¥103 million, up 168.6%; and interim net income attributable to owners of the parent was ¥82 million, up 240.7%.」

「Despite continued sharp increases in the prices of PS (polystyrene) material, the main raw material for petri dishes, and other materials, the company actively pursued cost reductions through manufacturing rationalization and the optimization of selling prices.」

「The company will continue to seek to secure profitability by pursuing production rationalization, investing appropriately in selling, general and administrative expenses, optimizing selling prices, and manufacturing and selling high-value-added products.」

「On the cost side, prices for PS (polystyrene) material, the main raw material for petri dishes, remained elevated. The company actively pursued cost reductions through manufacturing rationalization and continued to raise selling prices for customers. It also worked to secure profitability mainly through measures to reduce transportation costs. As a result, revenue for the nine months ended the third quarter was ¥1,411 million, up 4.1% year on year, and operating profit was ¥88 million, up 22.8%.」

「On the cost side, prices for PS (polystyrene) material, the main raw material for petri dishes, remained elevated. The company actively pursued cost reductions through production rationalization and continued to raise selling prices. It also worked to secure profitability by keeping selling, general and administrative expenses at approximately the previous year's level and reducing transportation costs. Going forward, it will seek to secure profitability through production rationalization, appropriate selling, general and administrative expenses, selling price increases, and the manufacture and sale of high-value-added products, particularly culture media. As a result, revenue for the six months ended the second quarter was ¥931 million, up 4.1% year on year, and operating profit was ¥73 million, up 53.8%.」

「On the cost side, prices for PS (polystyrene) material, the main raw material for petri dishes, have shown some signs of stabilizing but remain elevated. The company continued to actively pursue cost reductions through manufacturing rationalization while also working to raise selling prices. However, it was unable to absorb the deterioration in profitability, and profit remained weak, following the third quarter.」

「Selling, general and administrative expenses were reduced by ¥54 million, or 5.8% year on year, during the nine months ended the third quarter. In the two core businesses, sanitary testing materials and semiconductor materials, the company reduced operating days through inventory adjustments and production efficiencies. It also introduced rotating attendance in indirect departments and received employment adjustment subsidies, offsetting the decline in profit caused by reduced production.」

「On the cost side, the price of PS (polystyrene) material, the main raw material for petri dishes, has affected results since the third quarter, although prices continue to rise. However, the effects of further cost-reduction activities, including improved petri dish molding cycles, advances in IoT and rationalization through automation, resulted in record gross profit and gross margin of 52.3% for this business in the current consolidated fiscal year since the company's founding.」

「On the cost side, improvement in the cost ratio through increased production of petri dish and culture media products lifted gross profit to a record ¥676 million, with a gross margin of 52.9%. Manufacturing capabilities have continued to advance steadily.」

「On the cost side, substantial improvement in the cost ratio through increased production of petri dish and culture media products resulted in a first-half gross profit record of ¥434 million, with a gross margin of 52.0%.」

「Temporary leave implemented in the previous fiscal year and the resulting optimization of reduced petri dish inventories improved the cost ratio. Quarterly gross profit alone reached a record ¥219 million, with a gross margin of 52.7%.」

「On the cost side, the company actively implemented temporary leave by reducing inventories, mainly of petri dish products, and improving production efficiency. While prioritizing cash flow, quarterly gross profit for the third quarter was ¥204 million, up 4.4% year on year.」

「Manufacturing capabilities have steadily improved, supported by the completion of an automated packaging line and declines in the price of PS materials.」

「On the cost side, in addition to strong sales of high-margin culture media products, the petri dish manufacturing division completed a fully automated transport system using automated guided vehicles (AGVs). Manufacturing capabilities improved substantially, and gross profit rose ¥83 million year on year to ¥772 million, with a gross margin of 49.2%.」

「On the cost side, in addition to strong sales of high-margin culture media products, production transformation activities in the petri dish manufacturing division resulted in gross profit of ¥590 million, a substantial increase of ¥50 million, or 9.3% year on year.」

「Revenue increased year on year in all segments during the six months ended the second quarter, and consolidated Group revenue increased 6.7% year on year. First-half gross profit alone reached a record ¥748 million, up 8.7% year on year.」

「For the Group's consolidated results, revenue increased 8.5% year on year and gross profit increased 14.3%. Quarterly gross profit of ¥371 million was the highest since listing, and the gross margin was 49.0%. The Group's manufacturing capabilities have continued to evolve steadily through its production innovation activities.」

「On the cost side, the company enhanced IoT capabilities, mainly in petri dish manufacturing, and increased its stock of spare parts for equipment and molds. With a focus on cash flow, it promoted just-in-time manufacturing, including shorter production lead times and optimized inventory levels. Profit declined because of substantial reductions in spending on spare parts and inventories.」

「The main reason for the decline in profit was production adjustments resulting from the optimization of inventories, which had been built up to avoid the risk of operating losses when the petri dish production line was relocated to the Shiga plant. With a focus on cash flow, during the current consolidated fiscal year the company will pursue further production innovation and achieve additional inventory reductions by shortening production lead times and improving molding cycles.」

「As the Group entered its second year of operations at the new Shiga head office plant, improvements in workflow enabled by the new layout and visualization using IoT (the Internet of Things) transformed the manufacturing operation into the highest-level operation since the company was founded.」

「Through improvements in workflow enabled by the new layout, thorough implementation of 5S activities, and further advances in IoT (the Internet of Things) pursued alongside the launch of the new plant, a manufacturing operation with the highest efficiency ever achieved was completed.」

「On the cost side, information from IoT equipment, which was the most advanced within the Group in petri dish manufacturing, was utilized as big data. This made it possible to identify abnormalities in individual pieces of equipment, optimize in-line sterilization conditions by adding sensor devices, improve operating rates and yields, and significantly shorten production times, establishing a production system with 1.4 times the capacity of the former head office plant. As a result, the 24-hour, 30-day full-operation system was changed to 24-hour operation for 20 days, enabling significant reductions in electricity and labor costs. In addition, changes to the work schedule reduced the turnover rate among manufacturing personnel to 0%.」

「On the cost side, we leveraged information from the group's most advanced IoT systems in culture dish manufacturing, including monitoring individual equipment for abnormalities and optimizing in-line sterilization conditions by adding sensor devices. This enabled substantial improvements in operating rates and yield, as well as a significant reduction in production time, establishing production capacity 1.4 times that of the former head office plant. The inventory decline that occurred during equipment relocation in the first quarter of the current consolidated fiscal year was also resolved, and the standalone gross profit margin for the second quarter of the current consolidated fiscal year reached a record high of 50.6%. The gross profit margin for culture medium manufacturing also remained high at 54.7% on a standalone basis in the second quarter of the current consolidated fiscal year.」

「Operating profit was affected by a deterioration in the gross profit margin to 39% due to inventory provisions following the 1-month shutdown of the culture dish production line, the last production line in the group to be relocated. However, the margin is expected to recover to the 48% range from the second quarter onward.」

「Gross profit of ¥1,214 million, up 0.9% from the previous fiscal year, and a gross profit margin of 48.9% both reached record highs. Production transformation activities since 2011 have been steadily embedding sustainable and robust cost competitiveness across operations despite the trend toward a stronger yen.」

「In manufacturing, the state-of-the-art new culture dish production line began operations in early February 2017. After stable operation was established, the existing 4 lines will be relocated as scheduled. Culture medium manufacturing will begin full-scale production at the end of February 2017 using an optimized materials flow based on previous production transformation activities, a state-of-the-art air-conditioning system, and a sterile cleanroom.」

「On the cost side, the cost reduction plan for the current fiscal year (the production transformation project) progressed as scheduled, and both culture dishes and culture media achieved record-high gross profit and gross profit margins, with gross profit margins of 47.0% and 58.5%, respectively.」

「In culture medium manufacturing, we have maintained a high gross profit margin of 57.7%, exceptional among the group's production items, through labor-saving measures from production transformation activities launched in the third quarter of the previous consolidated fiscal year and the 100% yield project.」

「In culture medium manufacturing, production transformation activities to reduce labor requirements and the 100% yield project improved the standalone gross profit margin of culture media to 60.7% (up 5.3% from the previous fiscal year), making it an exceptionally high-margin product among the group's production items.」