In recent years, our business environment in water supply, sewerage, and waste recycling businesses, have been facing many challenges. Such challenges include global warming and other environmental issues, such as frequent natural disasters caused by earthquakes and typhoons, and less revenues from government projects due to depopulation and shortage of engineers.
METAWATER Group will live up to the trust place in it by contributing to solving these social issues and supporting the sustainability of water and environmental infrastructure that are essential to people's everyday lives.
Kenji Yamaguchi, President and Representative Director
Our Business Environment
In the Japanese water and wastewater treatment market, local governments are facing declining revenues and shortages of engineers due to a declining population. They are also facing a pressing need to address their aging facilities and equipment, which were built during Japan's period of rapid economic growth. They also face problems related to natural disasters such as major earthquakes, typhoons, and torrential rains. Outside of Japan, advanced nations such as the U.S. and those in Europe are facing some critical issues, including aging facilities and equipment, the utilization of reclaimed water to secure water resources, and stricter environmental regulations. Emerging economies are seeing an increasing need to develop water and wastewater infrastructure as water demand increases in parallel with population growth. Under these circumstances, in Japan, public-private partnerships that utilize private-sector funds, technology, and know-how, as well as efforts to strengthen national land infrastructure are expected to progress due to the revision of the Water Supply Act and other measures, while new business opportunities and business models are expected to be created against the backdrop of technological innovations such as IoT and AI. In addition, the need for advanced filtration technology and energy-saving and energy-creating technology is expected to increase overseas as a result of environmental considerations.
Building a foundation for growth that leads to a long-term vision by steadily implementing the Mid-Term Business Plan 2023
* Operating income on a core business basis excluding one-time factors such as one-time amortization of unrecognized actuarial gain or loss resulting from the sale of shares in a retirement benefit trust
In light of this business environment, our group is working to achieve its long-term vision of 200 billion yen in consolidated net sales for the fiscal year ending March 2028 as the three areas where the company strives to be number one: (1) the number one company people want to work with (2) the number one company for technology and services; and (3) the number one company people want to work for. In the Mid-Term Business Plan 2020 (April 2018 to March 2021), we worked to strengthen our corporate structure and achieved major numerical targets by setting new records for both orders received and order backlogs. In order to further promote these efforts, we have newly formulated the Mid-Term Business Plan 2023, which will be completed in the fiscal year ending March 2024. In order to establish a foundation for growth, the following three priority measures are included in the Mid-Term Business Plan 2023 and will be promoted on a company-wide basis.
Strategic Policy of Mid-Term Business Plan 2023
Strengthening core areas and expanding growth areas
(1) Core areas: Strengthening (of EPC*1 and O&M*2 businesses)
In the EPC business, we will strive to further expand orders and improve profitability by utilizing IT, AI, and other technologies to improve design quality and strengthen cost competitiveness in anticipation of future renewal demand and large-scale projects. In the O & M business, we will strive to acquire new facilities and new businesses by utilizing IT tools and strengthening sales expansion of WBC *3 (Water Business Cloud) to add to our stable growth from continuous orders for existing facilities.
(2) Growth areas: Expansion (of PPP*4 and overseas projects)
In the PPP business, which is expected to see an increase in large-scale projects, including design, construction, operation, and maintenance, we will strengthen our regional strategy by making the most of our track record and know-how, and create new business models with the aim of advancing public-private partnerships in the future. In Europe and the United States, which are strategic areas for overseas business, we will further expand our business through collaboration among group companies.
*1 Engineering, procurement, and construction of facilities and equipment
*2 Operations and maintenance of facilities and equipment
*3 Information and communications technology for sharing information in real time and analyzing and utilizing collected information
*4 The provision of private sector funds, technologies, know-how, and management capabilities to improve the efficiency and content of public services.
Increasing R&D investment
We will increase R&D investment to meet future demand for renewal and further expand public-private partnerships.
(1) Reinforcing strengths
In the areas of incineration, water treatment, and monitoring and control systems, which are our strengths, we will continue to actively invest in R&D to capture future renewal demand.
(2) Creating integrated mechanical and electrical engineering technologies
We will continually create products and systems that take advantage of our mechanical and electrical engineering expertise in water and environmental projects to sharpen our competitive edge.
(3) Creating value through information linkage
We create new value by chaining on-site operation and maintenance management information, plant monitoring and control systems and WBCs, etc., to provide systems and services that improve maintenance and management efficiency, optimize management, and resist disasters.
Sustainable ESG initiatives
In addition to contributing to society through our business activities as a company responsible for social infrastructure, as a corporate citizen, we will actively engage in activities to reduce environmental impact and contribute to local communities and to the Sustainable Development Goals (SDGs) set forth by the United Nations. Furthermore, we will actively promote work style reforms to realize diverse work styles for our employees by creating opportunities for women to be active in the workplace, as well as by enabling work styles that are not restricted by age or location. With regard to corporate governance, we aim to earn trust and achieve highly transparent management through active dialogue with stakeholders and work to achieve sustainable growth and enhance corporate value over the medium to long term.
