Aiming for sustainable business expansion through the two pillars of “core businesses” with a wide customer base and “growth businesses” that target new opportunities through technological innovation and emerging societal issues

In light of this situation, the new medium-term plan sets out the following key measures to achieve further growth: restructuring growth scenarios, promoting growth in overseas businesses, strengthening human capital and product competitiveness, promoting DX, and upgrading procurement and production systems that are resilient to supply chain risks.

Based on the “transformation” initiative implemented in the previous medium-term plan, we aim to achieve both increased sales and improved profitability, as well as further business growth and increased enterprise value through Evolution, which involves reinventing ourselves to adapt to environmental changes, and Co-creation, which involves leveraging our respective strengths with our external partners and ourselves and cooperating on an equal footing to create value. In response to this, we have also revised our long-term targets upward, which set the goal for FY2030.

The basic policy of the azbil Group is to achieve sustainable business expansion by continually cycling from growth businesses to core businesses and back to growth businesses, which is a characteristic of azbil Group’s unique business model.

First, in our “growth businesses,” we will expand our customer base by introducing new cutting-edge products and services to markets where there is demand for harnessing technological innovation, such as semiconductors and data centers, and resolving societal issues, such as carbon neutrality and labor shortages. At the same time, we aim to grow our business globally by expanding our target regions, including overseas markets, and working to improve our competitive advantage by strengthening our product competitiveness.

For example, in the Building Automation business, in addition to the expansion of demand in countries such as Southeast Asia due to economic growth, our unique business model, which achieves energy conservation and CO2 reduction throughout the lifecycle of a building, is receiving high praise from global account customers, including locally owned building owners and overseas data centers, leading to business expansion.

Additionally, in the Advanced Automation business, Azbil will develop new products and services that utilize its proprietary technologies, calling them “New Automation,” and use this as a base to expand the business globally. Specifically, we will provide “sapphire capacitance diaphragm gauges” that utilize the microelectromechanical system (MEMS^*2) technology to achieve high accuracy, durability, and stability for cutting-edge semiconductor manufacturing equipment, as well as “control valve (CV) total solutions” that integrate our long-cultivated CV manufacturing and maintenance technologies with cloud-based diagnostic services, contributing to the safe and efficient operation of our customers’ plants.

Meanwhile, in our core businesses, we will pursue further improvements in business sustainability and profitability, including the incorporation of DX, based on the relationships of trust that we have built with existing customers over the years.

To further this growth, the azbil Group is making strategic investments in three key areas: human capital, strengthening product competitiveness, and promoting DX.

First, in terms of human capital, we are strengthening the recruitment and development of solution-oriented and global talent that align with our business strategies with the aim of expanding both our growth and core businesses. Specifically, we are promoting the creation of a workplace where employees feel motivated and able to grow by introducing a career-driven development program linked to our management strategies and expanding incentive plans linked to our financial and employee benefits policies.

Second, in terms of strengthening product competitiveness, we are focusing on enhancing Azbil’s unique core measurement and control technologies and application technologies in order to develop products with a competitive advantage. For example, we are working to strengthen product capabilities related to cloud and AI application development, MEMS sensing, and actuator technology.

Finally, we also view the promotion of DX as an important investment area for strengthening our business model. While developing DX-related products and services for our customers, we aim to improve profitability by promoting DX in our operations to improve operational efficiency. In particular, we are working to promote intergenerational skill transfer and technological innovation in the fields of production, development, service, and engineering by utilizing generative AI and existing knowledge and data.

To achieve sustainable business growth, it is essential not only to build new organizations and structures but also to create management mechanisms that consider capital costs and to put sustainability management into practice. Strengthening corporate governance is also a key issue. In 2022, we transitioned to a company with a three-committee board structure to clarify the separation of supervisory and executive functions and further enhance the speed and transparency of decision-making. Starting this fiscal year, an outside director will serve as the chairperson of the Board of Directors, and we are working to further strengthen governance. In addition to improving our executive compensation policy, we will continue to pursue initiatives such as clarifying our growth strategy and optimizing our business portfolio by establishing a new Group Management Strategy Department.

Additionally, we aim to achieve sustainability management by promoting growth investment through the strategic use of our balance sheet, undertaking initiatives based on materiality and Azbil’s own SDGs, and rebuilding procurement and production systems that are resilient to supply chain risks.

Under the themes of “Evolution and Co-creation” of its new medium-term plan, the azbil Group will address issues that are difficult to solve on its own and create new value that will lead to the resolution of societal issues.

Furthermore, we will continue to promote business expansion in order to realize our long-term target of making contributions “in series” to a sustainable society by fiscal year 2030 and will sincerely pursue improvements in the well-being of our employees and society as a whole, including our customers.