Doc re. (2004-2006 Managemen)
16 Januar 2004 - 8:00AM
UK Regulatory
RNS Number:3083U
Kirin Brewery Co Ld
16 January 2004
January 8, 2004
2004 - 2006 Kirin Group Medium-Term Management Plan
Kirin Brewery Company, Limited (Koichiro Aramaki, President) has unveiled its Group medium-term management
plan that will guide Kirin's business strategies from 2004 through 2006.
Overview
Kirin has implemented structural reforms through New Kirin Vision 21 (NK21) medium-term management plan in
1998 followed by The Kirin Group Vision 21 (KG21) Action Plan in 2001. It has promoted a series of
initiatives, which included the reorganization of its plants and the shift to a group management centering
on a comprehensive alcohol beverage business, with the aim of gaining profitability and creating a strong
management platform through structural reforms. This new medium-term management plan serves as the third in
a series of management reforms designed to lay a pathway for the next phase of growth by making full use of
the acquired management platform in the past initiatives.
Against the backdrop of a volatile market environment, Kirin is committed to increasing its corporate value
to attain high recognition among food industry and in industrial circles, with the aim of securing support
from consumers. Besides improving profitability, Kirin will promote across-the-board management reforms to
reinforce Kirin brand value and work toward becoming a development-and-proposal oriented strong corporate
group as a means to achieve the Long-Term Group Vision. Kirin is targeting Group sales of 1,860 billion
yen, an operating profit margin of 7% and ROE of 6% in 2006.
The Kirin Group Long-Term Vision (2010)
* Deliver enjoyment and pleasure through food and health as a trusted partner of consumers.
* Become a leading beverage company in Asia and Oceania, driven by cutting-edge fermentation technology
and biotechnology,.
2004-2006 Medium-Term Management Plan
Objectives
Enhance brand value of Kirin, promote across-the-board management reforms and become a
development-and-proposal oriented strong corporate group with the aim of achieving the long-term Group
vision.
Fundamental Strategies
1. Strengthen domestic alcohol and soft drinks business, the core businesses that generate the greatest
contribution to Kirin's corporate brand.
(1) Enhance Kirin corporate brand value by reinforcing product brands
(2) Create new business schemes by leveraging synergies in the domestic alcohol and soft drinks
business
2. Strengthen the overseas alcohol business platform and enhance diversified businesses.
3. Promote corporate social responsibility (CSR).
Initiatives
1. Strengthen the domestic alcohol and soft drinks business
(1) Enhance Kirin corporate brand value by reinforcing product brands
Kirin will clarify the position of each alcohol category and reinforce its brand with the aim of securing
the top position in the domestic low-alcohol beverage market* in 2006. At the same time, Kirin will promote
a forward-looking product development strategy, and, as a development-and-proposal oriented company, create
new markets that anticipate the diversified preference and lifestyle of consumers.
*Beverages with alcohol content of less than 10%, including beer, happo-shu and canned chu-hi drinks.
Sales of happo-shu to households exceeded those of beer in 2003. As happo-shu market is growing, Kirin will
continue to reinforce its mainstay Tanrei brands, promote further market expansion and redouble efforts to
bring up Tanrei as the top brand in the canned beer and happo-shu market. Moreover, Kirin will maintain
efforts to develop market-creating products and secure competitive advantage in the happo-shu market.
Beer is identified to be the flagship category of Kirin, generating the greatest contribution to its
corporate brand. While seeking to increase market share in a happo-shu category, Kirin is working to
enhance brand value in a beer category by making clear the distinctive value of beer that matches
consumers' expectation. In addition to reinforcing Kirin Lager and Ichiban Shibori brands, Kirin will also
deliver value-added products such as chilled beer.
In a canned chu-hi category, with continued growth anticipated, Kirin will continue to promote its original
lineup of Kirin chu-hi Hyoketsu, in an effort to further cement its unrivalled market position. Wine and
shochu categories have also been identified as growth fields in which Kirin is keen to pursue expansion.
Kirin is also dedicated to promoting the beer taste beverage Malts Squash and creating new markets through
developing original alcohol products.
In soft drinks business, Kirin Group, with Kirin Beverage Corporation in the center, is active in
developing products in the growing fields of sugarless tea and nutritional drink that appeal to the rising
health consciousness among consumers. Kirin is also working to pioneer new fields by delivering products
utilizing KW lactobacillus, which is the achievement of collaboration of R&D in the Group.
(2) Create new business schemes by leveraging synergies in the domestic alcohol and soft drinks business
In the domestic alcohol business, Kirin is shifting from the conventional competitive model to a non-price
competitive model that is based on delivering consumer focused value with a development-and-proposal
oriented style encompassing the complete business process from research and development through production,
distribution and sales. Kirin is redoubling efforts to clarify priority markets, focusing in the growing
chain retailer sectors, as well as introducing an open-pricing system to normalize trade within the
industry. In addition, Kirin is working to strengthen proposal-based marketing through knowledge
management, promoting SCM to enhance efficiency throughout the delivery process from shipment through
retail sales, as well as providing high-value products such as chilled beer.
Kirin will establish new business schemes and strive to expand synergies with soft drinks business. It will
consolidate product development functions of Kirin Brewery, Kirin Beverage and Koiwai Dairy Products,
integrate logistics functions, and expand commission production of soft drinks at Shiga Plant commencing in
2005. Kirin is aiming to upgrade R&D function and promote development of new foods ingredients such as KW
lactobacillus with which application to various products is sought in the group. Kirin Beverage is merging
its chilled beverages business with Koiwai Dairy Products. Kirin will also pursue enhancement of efficiency
in the foods business, including mergers within the group. Moreover, it will work to strengthen
infrastructure through improved collaboration in the chilled distribution network in domestic alcohol
business.
2. Strengthen overseas alcohol business platform and enhance diversified businesses
In its overseas alcohol business, Kirin is actively pursuing the shift toward a comprehensive alcohol
beverage company, including Four Roses bourbon and wine business of U.S.-based Raymond Vineyard and Cellar,
Inc. Kirin's priority markets are Asia and Oceania, where it is represented by Lion Nathan Ltd.
(Australia), San Miguel Corporation (the Philippines) and Zhuhai Kirin President Brewery Co., Ltd. (China).
Kirin is seeking to further leverage group synergies and to introduce new opportunities of tie-ups with the
aim of strengthening its operating base and increasing profitability. We are promoting best-fit product
strategies for each market by distributing draft beer, deploying Kirin brand beer such as Ichiban Shibori
and Kirin Seijun in the overseas premium beer category and implementing a global strategy for Four Roses
brand.
In soft drinks business, the most important issue in overseas business is strengthening of business
infrastructure in China. Kirin is making effort to enhance group synergies, particularly in Shanghai, and
to expand operating areas.
In pharmaceuticals business, Kirin is continuing to bolster efforts primarily in the sales of ESPO (EPO)
and GRAN (G-CSF). At the same time, it is working toward the commencement of sales of the next generation
ESPO, KRN321 (NESP), now under development. In an effort to develop new drugs utilizing leading-edge
technologies, Kirin is actively investing in human antibody and cellular regenerative research. It is
aiming to widen development product pipeline and to expand business in Asia.
In agribio business, Kirin will work to reorganize overseas group companies with a view of improving
profitability and to promote business in China. It will also work to strengthen business platform in
domestic flower business.
In nutrient food and feed business, Kirin seeks to expand its operations in health foods and seasonings
fields by reinforcing the business of group companies such as Kirin Well Foods and Takeda-Kirin Foods.
Kirin takes on the production and distribution function of new foods ingredients among the group such as KW
lactobacillus. It will deliver new products through Kirin Beverage and other group companies,
3. Promote corporate social responsibility (CSR)
Kirin practices its original corporate social responsibility in all aspects of operations for the benefit
of all stakeholders. In an effort to reduce environmental impact, it will promote fuel conversion at its
plants for reduction of CO2 emissions and utilize advanced energies such as solar energy generation system.
It will continue to take initiatives in water preservation and afforestation activities. Kirin works on
reducing the environmental impact of containers in its production and distribution as well as switching
marketing vehicles into low-impact cars. At the same time, Kirin ensures group-wide compliance and
continues educational activities to promote responsible drinking. In the area of food safety, Kirin is
committed to consistently improving group-wide product quality management systems with guidelines to assess
and oversee the activities of each group company. Kirin initiates steps toward personnel-system reform by
fostering career planning of each employee and expanding the performance-based system.
Kirin continues to promote strong ties with the community through its nationwide plants. It is active in
promotion of the history of beer and continues to be a strong supporter of sports through sponsoring
Japan's national soccer team and Olympic national soccer team.
This information is provided by RNS
The company news service from the London Stock Exchange
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