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Under "Challenge Global to 2030" our long-term vision for 2030, the Nichiha Group aims to go global for everything from development to procurement, production, sales, and logistics in the value chain, capital efficiency, risk management, and all other aspects of our business. To achieve this long-term vision, we have formulated the 1st Medium-Term Management Plan, covering the first three years from FY2024 through FY2026. Under the plan, we have identified four key strategies and are advancing a range of initiatives as outlined below.
(1) Break Into Domestic and International Markets
In the Japanese market, we are focusing our efforts on breaking into the non-residential market as the housing market inevitably contracts. Specifically, to capture demand for new construction, in addition to promoting switches from competing exterior wall materials such as ALC in the commercial facility sector, we have launched a new construction method, the Plaster-Moen Fire-Preventive Exterior Wall System, which reduces on-site workloads and shortens construction periods. To capture renovation demand, in addition to our proprietary Nichiha MARC System for mid-rise buildings and condominiums, we are expanding the market through a new metal exterior wall construction method, the Slate Exterior Wall Renovation System, designed for the renovation of aging production and logistics facilities. Meanwhile, overseas, we implemented sweeping structural reforms in our core US business, withdrawing from the general-purpose exterior cladding business for the residential market and concentrating management resources on the high-growth, high-margin commercial market, encompassing commercial facilities and other non-residential properties, and the premium exterior cladding business for the residential market. Through these measures, we are fundamentally improving our earnings structure and rebuilding the foundation for further growth in the United States.
(2) Improve Profitability
To strengthen our product lineup, we are expanding the range of higher-priced products and boosting sales of construction materials in addition to siding itself, with the aim of increasing sales and profit per building. In response to various cost increases, we revise product prices and delivery fees as appropriate in light of market conditions while working to maintain an appropriate level of profitability. On the production front, we are also expanding production at optimal locations. Production at optimal locations involves enabling products previously made at only a particular plant to be manufactured at other plants as well, then shipping them from plants closer to areas of demand to shorten transportation distances and reduce logistics costs. We are also actively adopting production methods that leverage digital technologies to further improve profitability.
(3) Boost Efforts Toward Material Issues
The Nichiha Group has established as its four material issues the prevention of global warming, creation of a circular economy, respect for human rights, and promotion of human capital management. To prevent global warming, we are working toward carbon neutrality by 2050 through measures such as studying fuel conversion at production facilities, conducting research into using CO2 as a raw material for products, and pursuing company-wide energy-saving initiatives.
In response to growing demand to calculate CO2 emissions across the entire life cycle of buildings, we are also progressively obtaining Environmental Product Declaration (EPD) certification for our fiber-reinforced cement siding.
In promoting human capital management, we are developing global talent and next-generation leaders, improving employment conditions for older employees, and promoting health management. We are also promoting "Nichiha-style workstyle reform" by reviewing business processes and leveraging AI, among other measures, as we develop a workplace where a diverse workforce can thrive and remain highly engaged.
(4) Capital Policy
The 1st Medium-Term Management Plan incorporates measures aimed at achieving management that is conscious of the cost of capital and the share price. In particular, we are working to improve ROE and PER with the aim of raising PBR above 1.0. First, to improve ROE, we are working to optimize financial leverage by strengthening shareholder returns, including through share repurchases, while also improving ROIC. To improve PER, meanwhile, we are working to enhance communication with shareholders and investors, boost efforts towards our material issues, and strengthen compliance and risk management.
By steadily implementing these four key strategies, we will further enhance corporate value and realize our long-term vision. We look forward to the continued guidance and support of our shareholders and investors.
President 
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