Pacific Cement is one of Japan's oldest and leading cement manufacturers.
Pacific Cement reported the progress of its "23 Medium-term Development Plan" in the annual report of fiscal year 2023 (fiscal year 2022 to fiscal year 2024, April 1, 2021 to March 31, 2024) and defined the next medium-term development plan (fiscal year 2025 to fiscal year 2027). April 1, 2024 to March 31, 2027).
In the past three years, the business of Japan Pacific Cement has four core strategies-1, carbon neutrality; 2, market expansion in the United States and the Asia-Pacific region; 3, modernization of cement plant production equipment and facilities management; and 4, aggregates business. What is Japan Pacific Cement going to do
in the next three years?
First, strengthen domestic revenue
for Japan's domestic cement business, Pacific Cement pointed out that its primary task is to establish a strong pricing strategy to ensure that the rise in cost can be transmitted to the price in time to ensure corporate profits. Now, most users have accepted the cement price increase caused by the rise in energy prices. Next, enterprises will further explore the surcharge system and strive to push the cement price to a reasonable price range.
Editor's note: Surcharges usually refer to additional charges in addition to the basic cost of the main service or commodity. Taking the shipping industry as an example, the fee structure charged by container liner companies to cargo owners is generally "sea freight + surcharge". Among them, the surcharge is the fee charged by the liner company in addition to the freight to make up for the extra expenses or economic losses caused by weather, fuel, cargo, port and other reasons.
Pacific Cement said that the U.S. business has become one of the main sources of the company's revenue. Next, Pacific Cement will further lay out the Southeast Asian market and take various measures to grasp the demand for cement in Southeast Asia. In May 2024, after the completion of the new production line of Pacific Cement Philippines, its annual production capacity will be increased to 3 million tons.
Pacific Cement believes that the EBITDA margin of its overseas business can reach about 25%, and the domestic and foreign cement business will work together to achieve higher profitability.
Editor's note: EBITDA, earnings before interest, taxes, depreciation and amortization, is earnings before interest, taxes, depreciation and amortization.
Investment
Pacific Cement will further increase investment to expand overseas business, promote aggregate business, strengthen the production system, strengthen the company's economic foundation, and ensure the company's cash flow through various business activities.
In addition, in view of the large investment scale and long repayment cycle of the cement industry, Pacific Cement will introduce ROIC and other indicators to evaluate the investment behavior.
4. Human resources
In terms of human resources, Pacific Cement puts the training of the younger generation in the first place, and will continue to promote investment in education and the improvement of career promotion mechanism to help employees achieve work-life balance. In addition, in order to help employees accumulate work experience, Pacific Cement will also introduce challenging work to help employees grow by deploying employees at home and abroad.
5. Carbon Neutrality
In terms of carbon neutrality, Pacific Cement will control the scale of investment with reference to the trend of coal prices and continue to explore the impact of coal costs on cement prices. The World Cement and Concrete Association is studying how to use concrete buildings to reduce carbon, and Pacific Cement believes that this research is also of great significance to the cement industry to reduce carbon. Pacific Cement pays full attention to the global trend of carbon neutralization and will adopt various means to promote the process of carbon neutralization.
