[SG Holdings]The SG Holdings Group Announces its New Mid-term Management Plan:"Third Stage Plan" -- Synergy, Reform, and Speed (3/27/2013)
SG Holdings Co., Ltd. ––head office location: Minami-ku, Kyoto; Chairman and President: Eiichi Kuriwada (hereafter, "SG Holdings") ––is pleased to announce today its new mid-term management plan for the three-year period from FY2013* to FY2015.
SG Holdings was established as a pure holding company on March 2006. Between FY2007 and FY2012, it operated under the corporate vision of "constructing business platforms and creating new value" and continued to encourage the growth of each company within the SG Holdings Group ("the Group").
Under the new mid-term management plan -- the "Third Stage Plan"-- which begins in FY2013, we will focus on demonstrating our strengths as a group and reinforcing alliances with other companies to drive new growth. In accordance with the new plan being rolled out, we have revised our corporate vision to be "creating new value by effectively using management resources and strengthening collaboration both inside and outside the Group in the aim of enhancing business platforms and securing sustainable growth," and we will pursue business activities according to the theme of "synergy, reform, and speed."
The outline of the Third Stage Plan is as follows.
* The fiscal year of the SG Holdings Group is from March 21 to March 20 of the following year.
Outline of the Third Stage Plan
Basic PoliciesUnder the Third Stage Plan, the Group will promote regional diversification through reinforcement of its overseas business activities while continuing to adopt the approach of pursuing business diversification by decreasing our dependence on the conventional courier business of Sagawa Express Co., Ltd.
In consideration of the progress that was verified in the previous mid-term management plan (the Second Stage Plan) and the operating and social conditions that the Group faces, we have defined the following basic policies necessary for expanding our business areas and strengthening our earnings base.
(1)Maximizing the Group's earnings capability
- Make full use, within the Group, of the massive amount of information, customer base, and business infrastructure and know-how held by Sagawa Express to promote synergistic effects.
- Enhance profitability in the deliveries business by integrating the capabilities of the logistics and deliveries businesses and further identifying upstream logistics needs.
(2)Enhancing the comprehensive strength of the Group by expanding business areas
- Focus on the growth and expansion of the logistics business and other Group businesses.
- Aim to be in the top three in each of the business industries and aggressively pursue alliances and M&As both inside and outside Japan.
- Reinforce overseas and international business areas and develop them into core businesses by expanding the global network and executing M&As in specific regions.
(3)Reinforcing and enhancing operating platforms
- Manage assets through means such as asset liquidation, and promote balance sheet management.
- Diversify financing channels through liquidation and other means.
- Initiate re-development of business continuity plans (BCP) and business continuity management (BCM) that suit the social circumstances and the internal environment, and fulfill our responsibility as a social infrastructure.
- Offering greater career opportunities for female workers through the "Wakuwaku Women's Project - promoting the achievement of female employee -" and establish a structure in which female workers account for 30% of revenue.
(4)Fully adopting stakeholder management
- Widely distribute the Group's management resources and excellent features to society and aim for sustainable growth of both society and the Group.
- Allocate resources with a focus on realizing the concept of Creating Shared Value (CSV) within CSR.
- Develop the SG brand based on the brand portfolio strategy and promote the enhancement of brand awareness and understanding.
- Grow out of the stand-alone image of deliveries and 3PL, and develop a corporate image of being a global distribution company.
In FY2015, which is the final year of the Third Stage Plan, the Group aims to achieve operating revenue of 1.1 trillion yen, operating income of 53 billion yen and operating income ratio of 5%. We intend to do this by maximizing the effects of our basic strategies, including M&As and asset liquidation. To attain these targets, we plan on investing a total of 260 billion yen during the three years of the mid-term management plan.
Business Development Plan by Segment
- Continue to strengthen the operating structure according to market needs, such as expansion of the mail-order distribution market. In particular, respond proactively to needs for same-day delivery between large cities based on a 24-hour call-in collection service.
- Transform the operating platform into a high profit-generating structure by promoting greater collaboration with the logistics business and taking other steps to proactively acquire subcontract businesses from upstream.
- Re-strengthen the BtoB deliveries business, which is the business domain of Sagawa Express.
- Leverage the Group's combined strength, made up not only of the courier capabilities of Sagawa Express but also SG Moving's (the former Sagawa Moving Center) set-up know-how and World Supply's delivery agency know-how in order to aggressively acquire consignment of facility logistics operations.
- Proactively obtain consignment of reverse logistics operations, such as recall and return services. Leverage the comprehensive capabilities of the Group to provide a full range of services, including call center operations, collection, storage, inspection, disposal of defective products, delivery of replacements, inventory control, and handling of refunds.
- The logistics business will continue to be positioned as the second pillar and the base for the distribution business. Strengthen competitiveness by pursuing a capital and business alliance with Hamakyorex Co., Ltd.*, and enhance subcontracting services and products.
- Promote further reinforcement of the overseas network and strengthen capabilities to accommodate domestic, overseas, and trilateral logistics needs.
- SG Holdings Global Co., Ltd. (SGHG) was established in Singapore as a company to manage overseas businesses, and began full operation on March 21, 2013.
- Expand the size of overseas business operations so that they quintuple in three years. With the global freight forwarding business positioned as the core domain of the overseas business, actively execute M&As to develop networks and secure scale of quantity.
- In Asia and certain other regions with high growth potential, reinforce BtoB delivery services that support the freight forwarding business by selectively pursuing M&As.
- In the vehicle maintenance business, expand the scope of operations to cover unique and special vehicles by promoting alliances with other companies. In addition, promote reinforcement of vehicle maintenance capacity by expanding the Group network.
- In the temporary staffing business, establish a position in the staffing business field for the logistics sector by making use of the know-how accumulated within the Group.
- Continue development of valued logistics facilities with the assumption to sell properties. Pursue asset liquidation for asset management purposes and as a means to diversify financing channels.
- Promote effective use of the Group's existing resources and facilities by entering the clean energy supply (selling power) business and exploring other opportunities.
- Strive to attain synergistic effects also with the group companies of Hamakyorex Co., Ltd.*
*Basic agreement for a capital and business alliance was concluded on January 31, 2013.