Contributing to the development of the construction industry and to environmental recycling TTK
１． Putting the customer first
Our basic management principle is to fulfill the commitment expressed in our corporate slogan.
To that end, we believe it is important to properly identify our customers' needs and to provide products and services that meet these needs. We have developed high-tensile threaded rebars (Neji-Tetsu-Con), mechanical joints, and related industrial construction technologies to address the construction industry’s need to reduce construction costs and shorten the construction time. Along with products such as our steel rebars, we also offer high value-added services. This enables us to break free from the restrictions of the electric furnace industry, which is greatly affected by market trends, and create a strong management base that ensures stable profits.
Over the years, we have gained extensive engineering skills through the provision of a wide range of services, from developing and manufacturing products to submitting proposals to our customers. Going forward, we will continue to use this knowledge to proactively fulfill the diverse range of needs that exist with regard to reinforced concrete construction. Such needs include creating a strong bond between concrete and rebars and between concrete slabs.
The environmental recycling business, another of our key business pillars, ensures stable profits and also helps us contribute to society.
In this line of business, we process medical waste, scrap vehicles, discarded electrical appliances and the like. We do this by using an array of facilities, including electric furnaces for the high-temperature detoxification and melting of waste, as well as shredders and carbonization furnaces. In light of growing concerns over environmental issues, we aim to take full advantage of the technological know-how that we have acquired over the years in order to expand the scope of items that we can process for recycling.
２． Business conditions
Demand for construction is declining in Japan for a number of reasons, including the country’s mature economy, reduced public investment and the changing population structure. As a result, there has been a decrease in the demand for steel rebars. At the same time, the price of scrap iron (a key raw material for steel rebars that is traded on the global market) is fluctuating greatly and becoming increasingly unstable. In addition, increased electricity costs have made it even more difficult to generate stable profits. Despite this, Japan still has a large number of steel rebar manufacturers, and this makes it difficult to resolve the structural problem of excess capacity.
There is, however, a growing need for labor-efficient technologies in the construction industry due to labor shortages. Consequently, TTK's products and services are likely to maintain their growth potential in the near future. In the environmental recycling business, the growing demand for more effective waste processing is creating more business opportunities for TTK's waste melting treatment using electric furnaces.
３．Pursuing growth strategies
To maintain stable growth and improve our long-term corporate value in response to changes in the prevailing business conditions, TTK is pursuing the following strategies.
(1) Enhancing sales activities in Japan
We are promoting the sale of high-tensile threaded rebars and other high-value-added products for use in medium- and high-rise building construction, non-residential building construction and civil engineering. To this end, we have expanded production at our original equipment manufacturers (OEM), thereby ensuring a stable supply of raw materials, reducing the delivery time and enhancing the service performance.
(2) Developing labor-saving construction and peripheral businesses
We are promoting the development of labor-saving construction methods and products as well as enhancing the production of products related to high-tensile threaded rebars, including POWER-RING (high-strength rebars for shear reinforcement) and epoxy threaded rebars that are resistant to seawater damage.
(3) Developing markets overseas
In light of the sluggish demand for construction in Japan, we are expanding into promising overseas markets. As a first step, we have already established a local subsidiary in South Korea. We are also conducting research and running campaigns in other Asian countries to advertise our products.
(4) Evolving the environmental recycling business
To grow our environmental recycling business, we aim to promote new waste disposal business such as waste asbestos and low concentration PCB treatment by expanding processing facilities in addition to our property electric furnace and all.
(5) Developing new composite construction methods
We are developing new methods to expand the application field of reinforced concrete.
(6) Enhancing personnel training
Based on our firm belief that a company’s prosperity is determined by its personnel, we are promoting people-centered management and working to provide personnel training that evolves with the times. We founded the Totetsu Academy as a training institution to provide programs tailored to different positions and occupations as well as to pass on skills and techniques.
4. Capital policy
TTK's basic capital policy is to maintain a suitable balance in terms of improving its financial health, securing investment capital for growth and providing appropriate returns to its shareholders.
Securing sufficient equity capital to hedge against business risks helps improve corporate value over the long run. Also, in the electric furnace industry, which is heavily dependent on equipment, it is necessary to make large capital investments on a stable, ongoing basis to maintain and enhance our production facilities. This investment capital is covered by our internal reserves. Given this, we believe that it is also important to have sufficient cash flow. Our basic policy for shareholder returns is to maintain stable dividends in accordance with our financial results by taking into account the need to secure internal reserves for improving our financial structure and making capital investments.
5. Management indicators
We believe that to implement an appropriate capital policy, maintain stable growth and improve our corporate value over the long run, it is important to have sufficient cash flow. To this end, we have set maintaining a consolidated return on sales (ROS) of 5% or higher as one of our management goals.