KHI: Consumer products a ‘core’ business – September 4, 2006

Tadaharu Ohashi, president of Japan’s Kawasaki Heavy Industries, Ltd. (KHI), says the company’s consumer products division has been selected as a “core” business deserving increased investment.
KHI’s businesses include shipbuilding, plant and infrastructure engineering, aerospace, consumer products and machinery, rolling stock, and gas turbines and machinery. The consumer products and machinery division includes powersports operations.
KHI’s net sales rose ¥80.9 billion, or 6.5 percent, to ¥1,322.5 billion for the company’s fiscal year ended March 31, mainly because of increased sales in the aerospace and consumer products and machinery segments.
KHI’s current fiscal year, ending in March 2007, is the final year of an ongoing medium-term business plan. “In implementing this medium-term plan,” Ohashi said in a recent shareholder update, “we are exercising selectivity and focus in the allocation of resources among our various businesses.”
“For the consumer products and machinery business, we are working to increase product-competitiveness by creating stronger design systems at the global level that draw on the capabilities of subsidiaries, ” Ohashi said.
Ohashi said last year’s operating environment presented challenges for KHI. Prices of raw materials, such as steel and crude oil, remained at high levels, while prices of more costly materials, such as aluminum and titanium, rose sharply with shortages emerging.
Amid this environment, he said, KHI is moving ahead with various measures to strengthen its earnings power and reform its business portfolio with the objectives of consolidating a stable earnings base and achieving sustainable growth.
“We are working to enhance our product development activities and manufacturing technologies with the goal of offering superior products and reducing costs,” Ohashi said. “In addition, as many of our products vie for business in intensely competitive markets, we are endeavoring to improve the non-price competitiveness of products by offering items that meet latent client needs accurately.
“To this end, in all aspects of our activities, from planning to design, manufacturing and the provision of after-sales service, we are bolstering our marketing activities to better offer products and services that are of true value to our customers.”