Capital investment to improve productivity and support new products

「前年から導入を計画していたプレス工程の最新鋭設備の設置が完了し」

「On the production side, installation of state-of-the-art equipment for the press process, which we had planned to introduce from the previous year, has been completed, and productivity across the plant has improved by 30%, including through labor saving.」

「To address rapid technological innovation and intensifying sales competition, the Group made capital investments of ¥571.796 million in machinery and equipment, and other assets. In Japan, it made capital investments of ¥385.918 million, mainly in machinery and equipment at the head office plant. In China, it made capital investments of ¥185.877 million, mainly in machinery and equipment at consolidated subsidiaries.」

「生産面におきましては、強固な財務基盤のもと、生産性向上および品質向上を目的とした設備投資ならびに製造ライン改善を継続し、競争優位性のさらなる強化に取り組んでまいります。」

「This was mainly due to ¥422 million in spending on the acquisition of property, plant and equipment.」

「To address rapid technological innovation and intensifying sales competition, the Group made capital investments of ¥584.762 million in machinery and equipment, and other assets. In Japan, it made capital investments of ¥475.523 million, mainly in machinery and equipment at the head office plant. In China, it made capital investments of ¥109.239 million, mainly in machinery and equipment at consolidated subsidiaries.」

「At the head office factory, as part of a complete renovation planned for the next fiscal year, which will mark the company's 60th anniversary, we will introduce a new line specifically designed to improve productivity by 20% and build new employee welfare facilities. We aim to improve not only productivity and the working environment but also factory safety and security.」

「In manufacturing, the Group is also reducing material costs by improving production methods and investing in labor-saving equipment, while actively pursuing higher productivity and lower costs.」

「To address rapid technological innovation and intensifying sales competition, the Group made capital investments of ¥410.047 million in buildings, machinery and equipment, and other assets. In Japan, it made capital investments of ¥107.743 million, mainly in machinery and equipment at the head office plant. In China, it made capital investments of ¥302.304 million, mainly in buildings and machinery and equipment at consolidated subsidiaries.」

「Investment in buildings, machinery and equipment, as well as prototyping for fire-resistance certification and other purposes, has been completed. The Group is currently establishing a sales structure, including route-based sales.」

「During the first six months, cash flow used in investing activities was ¥593 million, compared with ¥1,888 million used in the same period of the previous year. This mainly reflected ¥569 million used for deposits into time deposits and ¥406 million used for the acquisition of property, plant and equipment, partly offset by ¥390 million in proceeds from the withdrawal of time deposits.」

「To meet strong orders, the Group is constructing a large Phase III factory on land adjacent to the Yichun Plant, comprising land of 53,360㎡, factory and warehouse space of 25,660㎡, and offices, a cafeteria and dormitories totaling 14,000㎡, with completion targeted for the current fiscal year.」

「To address rapid technological innovation and intensifying sales competition, the Group made capital investments of ¥1,402.510 million in buildings, machinery and equipment, and other assets. In Japan, it made capital investments of ¥78.970 million, mainly in machinery and equipment at the head office plant. In China, it made capital investments of ¥1,323.539 million, mainly in buildings and structures, machinery and equipment at consolidated subsidiaries.」

「On the production side, the capacity-expansion equipment plan pursued since the end of the previous fiscal year, comprising a flush-door and frame line at the Yosh屋 Qingdao factory and a flush-door, stile-and-rail door and frame line at the Yichun factory, was completed in September and entered full-scale operation. The Group is gradually recovering delayed production.」

「Cash flow used in investing activities was ¥914 million, compared with ¥1,114 million used in the same period of the previous year. The main source of cash was ¥153 million from the withdrawal of time deposits, while the main uses were ¥627 million for the acquisition of property, plant and equipment and ¥275 million for capital contributions.」

「To address rapid technological innovation and intensifying sales competition, the Group made capital investments of ¥1,456.532 million in buildings, machinery and equipment, and other assets. In Japan, it invested ¥107.834 million, mainly in machinery and equipment at the head office plant, while in China it made capital investments of ¥1,348.697 million.」

「The factory of 日門（江西）建材有限公司, which was under construction at the end of the previous consolidated fiscal year, was completed in July 2019. Details are as follows.」

「To meet strong housing demand, the Group acquired an adjacent site of 26,680㎡ next to the Yichun Plant (日門（江西）建材有限公司) to expand the plant. The new plant, comprising 2 buildings with a total floor area of 16,400㎡, began full-scale operations in June 2019 following trial operations. This is expected to increase production capacity in China by more than 30% from the current level.」

「To meet strong housing demand, the Group acquired an adjacent site of 26,680㎡ next to the Yichun Plant (日門（江西）建材有限公司) in August 2017 to expand the plant. By the end of March 2019, the 2 buildings, with a total floor area of 16,400㎡, were almost complete, and full-scale operations were scheduled to begin in June following trial operations. This is expected to increase production capacity in China by more than 30% from the current level.」

「To address rapid technological innovation and intensifying sales competition, the Group made capital investments of ¥961.761 million in buildings, machinery and equipment, and other assets. In Japan, it made capital investments of ¥141.943 million, mainly in machinery and equipment at the head office plant. In China, it made capital investments of ¥819.818 million, mainly in buildings and structures, machinery and equipment at consolidated subsidiaries.」

「Against a backdrop of strong orders in China, the Group acquired land-use rights to an adjacent site of 26,680㎡ next to the Yichun Plant (日門（江西）建材有限公司) in August 2018 and began construction of 2 factories with a total floor area of 16,400㎡. This is expected to increase production capacity in China by more than 30% from the current level. In addition, the Group began expanding the warehouse at the Kunshan Plant (昆山日門建築装飾有限公司) in September 2018, adding above-ground and underground floor space totaling 9,000㎡, and steadily implemented initiatives to support growth, expansion and stability.」

「Operating profit was affected by higher fixed costs, including depreciation resulting from upfront investments in equipment and personnel to respond to increased orders, as well as environmental investment, including the installation of high-performance dust-collection systems and wastewater treatment equipment for painting at 3 factories in response to tighter environmental regulations, and start-up expenses for 吉屋（青島）家居有限公司, a company that manufactures and sells sinks, washbasins, storage boxes and other products and began trial operations in October of the previous year. Spending on the acquisition of property, plant and equipment was ¥519.631 million.」

「In response to stricter environmental regulations imposed by the Chinese authorities, all 3 plants successively required environmental investments, including the installation of high-performance dust collection equipment and new wastewater treatment equipment for painting operations」

「To address rapid technological innovation and intensifying sales competition, the Group made capital investments of ¥1,171.009 million in buildings, machinery and equipment, and other assets. In Japan, it made capital investments of ¥128.374 million, mainly in machinery and equipment at the head office plant. In China, it made capital investments of ¥1,042.634 million, mainly in buildings and structures, machinery and equipment at consolidated subsidiaries.」

「Cash flow used in investing activities was ¥511 million, compared with ¥159 million used in the same period of the previous year. The main use of cash was ¥536 million for the acquisition of property, plant and equipment.」

「To address rapid technological innovation and intensifying sales competition, the Group made capital investments of ¥799.009 million in buildings, machinery and equipment, and other assets. In Japan, it made capital investments of ¥77.427 million, mainly in machinery and equipment at the head office plant. In China, it made capital investments of ¥721.582 million, mainly in buildings and structures, machinery and equipment at consolidated subsidiaries.」

「To address rapid technological innovation and intensifying sales competition, the Group made capital investments of ¥496.765 million in buildings, machinery and equipment, and other assets.」