Building Management Foundations for Sustainable Growth Through Global Business Experience

As the officer in charge of corporate strategy, my role is to drive PHC Group’s growth strategies for sustainable improvement of corporate value and support the execution of those strategies. The areas that I am currently responsible for include corporate strategy, sustainability, digital transformation and AI strategy, risk management, voice of the customer (VOC), and information technology (IT). All of these areas are important management foundations directly linked to our corporate value, and I believe that it is important to advance all of them as a single, linked management strategy, rather than approach each individually. As the head of the Corporate Strategy Department since October 2023, I have led the formulation of the Value Creation Plan 2027 in conjunction with the establishment of a new management structure in 2024. Currently, I am working with the CxOs, each business, and Group members around the world to implement that plan.

In my career, including working in the U.S. and collaborating with European and American companies, I have worked to close the gaps between Japanese and global standards and business practices and between customer requirements and internal systems. In working to the technologies, quality, and standards required by global customers into the company and incorporating them into concrete systems, I have learned that simply presenting the correct way of thinking by itself does not lead to organizational change. Rather than looking for reasons why something can’t be done, what is important is to think about how it can be achieved and to move forward while involving diverse talent. This attitude remains unchanged in my current role. In our sustainability initiatives as well, we are actively, we are actively using frameworks and practical knowledge that are more advanced in Europe and other regions while building effective foundations on a global scale.

For PHC Group, ESG is itself a management strategy for achieving improved corporate value. I believe that enhancing the quality of management capital, including people, data, technology, supply chains, and governance, will lead to sustainable business growth and the establishment of competitive advantage. ESG is our "License to Operate" for conducting business in global markets and is a prerequisite for continuing to be chosen by our customers. Europe is an important market that accounts for approximately 30% of PHC Group’s revenue, and it is also a strategic region supporting the future growth of our Life Sciences business. Among global pharmaceutical companies, which are key customers for the Group, requirements concerning human rights, climate change, and supply chains are becoming stricter every year, and our ability to respond to those requirements has become a part of our competitiveness. Our ESG strategy is a foundation for business continuity and at the same time is an important driver for acquiring new growth opportunities.

Accelerating Results Through the Collective Strength of the Group

Under the Value Creation Plan 2027, building the foundations for future growth is a priority topic. Regarding sustainability, we disclosed materiality topics in fiscal year 2023 and began full-scale operation of a Group-wide ESG structure in fiscal year 2024. Under the oversight of the Board of Directors, we created a governance structure including a Sustainability Committee, and with strong CEO commitment and appropriate oversight by the Board of Directors functioning in tandem, we are working to increase the speed of decision-making and enhance management transparency. At the same time, we quickly established by the most efficient path, the foundations necessary to respond to global requirements including human rights due diligence, management of supply chain GHG emissions, supplier due diligence, and information disclosure infrastructure.

These efforts have started to produce results. We introduced a system for managing environmental data and built a structure that can quantitatively ascertain supply chain GHG emissions, waste, water usage, and other data for the entire Group. We have enhanced the Group’s cross-functional capability to address ESG issues through global training programs that leverage knowledge from our European sites, the advancement of human rights due diligence, and other initiatives. The results of this work are starting to appear in external evaluations, such as the bronze medal we received from EcoVadis, our improved CDP score, and our inclusion in the MSCI and FTSE ESG indices. These accomplishments are the result of achieving the targets set in the Value Creation Plan 2027 two years ahead of schedule, and I believe that they are important milestones that will lead to the acceleration of growth in the future.

We position the use of digital transformation and AI as an important element supporting the enhancement of corporate value. To raise our ESG and risk management to a higher level, accurate and rapid data acquisition and analysis will be essential. By using digital technologies including AI, we can improve the quality of management decision-making while increasing operational efficiency and achieving new value creation. To do this, it is essential that we do not allow under my responsibility, including corporate strategy, ESG, digital transformation, and AI to function as separate initiatives. Instead, we need to organically link them as a single growth strategy and build an organization that can demonstrate the combined strength of these areas.

Toward Becoming a “Precision Healthcare Solutions Company” That Continues to Be Chosen

PHC Group has set as its vision for 2030 to “be a leader in precision technology that powers the future of healthcare.” As I look ahead to 2030, my objective is for the Group to evolve beyond medical device manufacturing to become a “Precision Healthcare Solutions Company” making tangible contributions to society. To achieve this, it is essential that we integrate not only the precision technology capabilities we have cultivated over many years, but also engaged human resources, highly reliable data, resilient supply chains, and a deep understanding of the voice of the customer and compliance. ESG is a natural part of our management strategies and an important element supporting the improvement of our corporate value.

PHC Group is currently formulating our next mid-term management plan. Within this process, we are starting from our management philosophy and incorporating the approach of “double materiality,” which takes into account both the impact of social issues on the Group’s finances and the impact that our business activities have on society and the environment. We will carefully examine both risks and opportunities and link this to competitive advantage for PHC Group. We can also improve our corporate value by linking our management philosophy, materiality topics, management strategy, while advancing our business strategy, human capital strategy, DX and AI strategy, and sustainability strategy.

We seek to transform changing social issues and customer needs into growth opportunities and to be a company that continues to be chosen by customers and society. By bringing together PHC Group’s diverse businesses, human resources, and regional strengths, we will create both social and economic value. Through this challenge, we will realize our 2030 vision and achieve sustainable improvement of corporate value. To this end, I take responsibility for management decision-making and execution, and I will steadily drive our efforts forward.