Outline

Value Creation Strategies

Sustainability Strategies to Support Value Creation

Data Section

A Message from the President & CEO

We will make a leap forward to be

next-generationengineering trading firm
theby steadily implementing our businessstrategies for growth and strengthening
our management base.

Making a strong start in the first fiscal year of the medium-term business plan MT2024
Exceeding all targets
With your support, DJK celebrated its 75th
anniversary in August 2023. Throughout its history,
DJK has accurately captured customer needs as they
evolved together with the times, growing through thecontinual creation of new value. With all of society
entering a period of great upheaval in the wake of
the COVID-19 pandemic, we have established a new
philosophy, setting forth our mission of “Connecting
People, Connecting Technology and Enriching theWorld,” our vision to be the next-generationengineering trading firm, and our values of Trust,
Growth, and Contribution. We are pursuing ourthree-year medium-term business plan MT2024,
launched in April 2022, under the V2030 growthstrategy, targeting rapid growth and net sales of¥300 billion in the fiscal year ending March 31, 2031.
In the fiscal year ended March 31, 2023, the firstfiscal year of MT2024, we achieved strong resultsthat exceeded both our initial and revised forecasts
against the backdrop of vigorous investment
activities by our customers. Orders received reachedtheir highest level ever, exceeding ¥200 billion, while
net sales increased year-on-year and gross profit andprofit attributable to owners of parent also reachedtheir highest levels ever, all exceeding their targets
for the first fiscal year of the plan. As a result, weachieved return on equity (ROE) of 10.3% comparedto the MT2024 target of 10%. Stable growth is crucial
for us to continue to maintain and improve ROE at

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DAIICHI JITSUGYO CO., LTD.

Ichiro Uno

Representative Director
President & CEO

10% and above. We will therefore endeavor to boost
the operating income margin and engage in initiatives
such as improving the cash conversion cycle.

Business strategies for growth (1)Strengthen engineering capabilities
that boost added value inthe trading business
Under MT2024, we have established four themes forour business strategies for growth: 1) Strengthening
engineering capabilities, 2) Strategic business
investment, 3) Expansion of business with global
companies, and 4) Progressing digital transformation.
Of these, 1) Strengthening engineering capabilities is
especially important.
Throughout the Company’s 75-year history, ourcore competency has been our trading business,
specializing in machinery sales. We have worked toenhance the value of this trading business through arange of initiatives such as our own after-sales
service and support for our customers’ global
expansion into Europe, the Americas, Asia, andChina, including the accumulation of international
logistics know-how for equipment. However, wemust further enhance our added value to fulfill our
mission of “Connecting People, Connecting
Technology and Enriching the World” and achievesustainable growth. We aim to be a technicallyfocused trading company that goes beyond a
product-only sales model of simply purchasingmachinery from manufacturers and selling it, toestablish a products and integrated solutions
business model. We hope to leverage our

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Outline

Value Creation Strategies

Sustainability Strategies to Support Value Creation

Data Section

Interview with the President

engineering capabilities to grow into a business
partner that can provide one-stop support for ourcustomers, right from the very first stage of businessconcept design. As part of this endeavor, weestablished the Engineering Division in April 2023. In
addition to actively recruiting experienced engineers,
we are also revising the personnel system related tocareer development for skilled employees. Goingforward, we aim to coordinate with our Group
companies DAIICHI MECHA-TECH CORPORATION
and DAIICHI ENGINEERING CO., LTD., as well as ouroverseas bases, to form a community of engineers tohandle increasingly large, complex, and sophisticatedprojects. We have already implemented M&A
activities to facilitate stronger engineering
capabilities as the first of our strategic business
investments.

Business strategies for growth (2)Implementing strategic business
investment to facilitate stronger
engineering capabilities
Under MT2024, we will implement strategic business
investment to boost added value in the tradingbusiness. We have classified our business
investments into the following three areas.
1) Core fields, where we will strengthen ourcurrent seven businesses, 2) adjacent fields, which
are extensions of our core field businesses(development of fuel manufacturing equipment toachieve carbon neutrality, entry into fuel supply
chains, entry into the medical equipment
manufacturing business, etc.), and 3) new fields,
where we will create new businesses (including
investment in startup companies, etc.). We haveestablished an investment budget totaling ¥15.0
billion, including ¥5.0 billion over the two years from2023 to 2024 and ¥10.0 billion over the three years
from 2025 to 2027.
We made the first of our strategic business
investments in July 2023, when we acquired theshares of Wave Engineering Corporation, making it aconsolidated subsidiary of DJK. Wave Engineering
Corporation is engaged in the design and productionof petroleum, petrochemical, and chemical plants, aswell as consulting. It specializes in FS*1 and FEED*2
services for basic plant design. DJK has hitherto
participated in plant projects as an EPC contractor*3from the stage after customers have completed
these basic designs. The inclusion of Wave
Engineering in the DJK Group will facilitate our shift
to integrated solutions (selling software rather thanhardware) and the strengthening of our engineering
capabilities. Moreover, integrating Wave Engineering’s

strength in simulation engineering with the Group’s
plant engineering capabilities will enable us toprovide one-stop FS, FEED, and EPC services as thenext-generation engineering trading firm. Goingforward, Wave Engineering will coordinate with thepreviously mentioned Engineering Division and DJKGroup companies to develop aggressive sales,
including initial-stage proposals, not only in the Plant& Energy Business, but also in the Automotive,
Healthcare, Aviation & Social Infrastructure, andother businesses.
We believe that we have made an outstanding
business investment that will lead to stronger
engineering capabilities in our core businesses as
the first of our strategic business investments. We
uphold “solid operation” as DJK’s founding spirit.
Until now, we were not always proactive about
making business investments. We have now
established a business investment system and athree-stage decision gate for the implementation ofstrategic business investments through ourInvestment Council. Decisions on each investment
project are made after it is thoroughly examined andthe Investment Management Reviewing Committee
has determined whether it will effectively benefit the
future of DJK. We have gained substantial know-how
through our investment in Wave Engineering, and wewill further refine our investment decision-making
abilities to implement further business investmentswith prioritization in mind.

Business strategies for growth (3)Revitalizing human resource
exchange to strengthen global
human resources
The DJK Group does business globally, pivoting on
the four areas of Europe, the Americas, Asia, andChina. Under MT2024, we have established the“expansion of business with global companies” as
one of our growth strategies. In the fiscal year ended
March 31, 2023, we achieved sales of battery
materials production equipment and battery cell
production equipment to major companies in Europe
and the United States in our Energy Solutions
Business, as well as automated assembly machines
for medical equipment manufacturing in the UnitedStates in our Industrial Machinery Business. We
believe that expanding our engineering functions
overseas is vital for our future business expansion
with global companies. This includes developing
competent overseas employees and promoting an
understanding of the function of trading companies.
Until now, we provided practical employee
education and training such as after-sales service in*1 FS: Feasibility Study (the prior examination and consideration of whether a project is feasible)*2 FEED: Front End Engineering Design (basic design carried out after the FS)*3 EPC contractor: A company that undertakes engineering, procurement, and construction for a project

15

DAIICHI JITSUGYO CO., LTD.

each region and country, centered on the regional
headquarters in each area. Japanese employees
assigned to each overseas base would demonstrate
our function as a trading company, mostly to
Japanese companies in the local region. However,there was not always sufficient understanding among
overseas employees regarding the concept of the“next-generation engineering trading firm” to which
the Group aspires. We are therefore currently
engaged in explaining aspects such as DJK’s new
philosophy to employees to raise awareness groupwide. We have also launched a long-term training
program in Japan to enable employees from overseas
bases to experience the day-to-day operations of a
trading company and promote DJK’s values when
they return to their local area. This new training
program is expected to lead to the expansion of ourbusinesses overseas by boosting overseas
employees’ knowledge of manufacturing
technologies. In addition to day-to-day operations,they will gain experience at locations such as
production sites for lithium-ion batteries, for which
demand is growing worldwide. More vigorous humanresource exchange will enable overseas employees
to gain a new understanding of the role of a trading
company. We want them to go beyond the simple
task of selling products across their desks to play an
integral role in solving the problems faced bycustomers. We hope to develop overseas employees
who can promote DJK’s values in their own worlds.

Business strategies for growth (4)Promoting both defensive andaggressive DX
The DJK Digital Transformation Vision sets forth our
vision for progressing digital transformation:“Leveraging digital technologies to radically transformthe ways employees work and communicate, andachieve overwhelming productivity, in line withcreating revolutionary business models to increase
our corporate value.” In April 2023, we establishedthe Digital Innovation Center as a division to oversee
our pursuit of this commitment as a company. We
promote DX from both a defensive and an aggressive
standpoint. Through the use of technologies such as
AI, we will boost internal productivity from adefensive perspective, while aggressively engaging in
the creation of a range of new proposals andservices for customers. Because of the nature of ourbusiness as a trading company, covering numerous
industries and product types, it will be challenging totransition from a system of databases in eachbusiness to a comprehensive group-wide system.
However, we have already commenced theconstruction of a group-wide enterprise resource
planning (ERP) system, aiming to utilize data fromacross the Group as a data-driven company. Securing
human resources is key to achieving this. In addition
to recruiting competent human resources for DX, we
are engaged in internal DX education on issues such

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Outline

Value Creation Strategies

Sustainability Strategies to Support Value Creation

Data Section

Interview with the President

as the recent topic of ChatGPT and other generative
AI technologies, including related security issues.

Strengthening management base (1)Strengthening people-based
corporate management while
accurately managing diverse risks
Under MT2024, we have established five themes forstrengthening the management base: 1) Deepening
corporate governance, 2) Strengthening risk
management, 3) Strengthening financial strategies, 4)Strengthening human resources strategies, and 5)
Promotion of sustainability management. In the firstyear of the plan, we steadily implemented various
measures to address these themes.
We are proud to say that we have enhanced our
corporate governance structure to a certain level,
partly due to the knowledge provided by our outside
directors. Moreover, in June 2023, we welcomed theappointment of an outside director withmanagement experience at another company, andwe expect him to provide advice from a newperspective based on his career knowledge andsocial trends.
In April 2023, we established the Integrated Risk
Management Office as part of our efforts tostrengthen risk management. The Integrated Risk
Management Office will centrally manage

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DAIICHI JITSUGYO CO., LTD.

information on business risks, natural disasters andother risks from the perspective of business
continuity planning (BCP), as well as the increasingly
diverse range of risks due to social changes inhuman resources, labor, and other factors. It will
identify, analyze, evaluate and formulate measures toaddress new risks in Japan and overseas. We have
hitherto focused our efforts on business partner
credit risk and other aspects of business partner
management. However, the increasing scale,complexity, and diversity of projects have meant that
more people are involved in each project, increasing
safety and health risks in particular environments
overseas, as well as risks such as those associatedwith the control of information leaks between thepeople involved. Even a slight lapse in vigilance may
result in massive penalties and the collapse of trust.
Therefore, we will strive to further upgrade our
integrated risk management to ensure that we canmaintain sustainable business activities.
On the theme of strengthening financial strategies,
we have obtained a long-term issuer rating (credit
rating) of “A- (stable)” from Japan Credit Rating
Agency, Ltd. We will endeavor to maintain andenhance our financial soundness, without damaging
our management resources, while also engaging inbusiness investment in growth fields from a longterm perspective. Growth investments are notsustainable without a stable revenue base. This is
one reason why we will strive to maintain an ROE of
10% or above, aiming for further improvement, witha constant awareness of the operating income
margin and the cash conversion cycle, as I describedat the outset.
Regarding our human resources strategies, werevised the personnel system and established asystematic human resources development programin the fiscal year ended March 31, 2023. We also
implemented an awareness survey aimed atstrengthening employee engagement. As a result, wewere pleased to note employees’ generally positive
assessment of personal relationships and enthusiasm
for work, although some employees requested skills
improvement. Going forward, we will engage inmeasures for ability development, focused on longterm personnel development, in tandem with thestrengthening of management. We will also strive toachieve further improvements through reforms in theway we work. Although there is a need for some
employees to attend to shipments on weekends andholidays for customer convenience, we will
implement work-sharing systems to prevent theconcentration of this workload on any employee.

Strengthening management base (2)Contributing to society andpromoting sustainability management
though our core businesses
In the fiscal year ended March 31, 2023, we declared
our support for the recommendations of the Task
Force on Climate-related Financial Disclosures (TCFD)
and calculated our Scope 1 (direct) and Scope 2(indirect) greenhouse gas emissions as part of ourenvironmental management. In April 2023, we went
on to launch the Sustainability Promotion Department
as the secretariat of the Sustainability Committee toengage in internal sustainability promotion activities
and establish methods of evaluating initiatives toaddress the five ESG-related materialities (important
issues) identified by the Group.
In particular, we hope to implement activities
reflecting our initiatives to address “contribution to asustainable earth,” including the “realization of adecarbonized society,” the “realization of a resourcerecycling society,” and “protection of the naturalenvironment,” in our business activities. One example
in recent years is the commencement of construction
work, in July 2023, on surface plant facilities for the
Kashiwazaki Clean Hydrogen/Ammonia Project
implemented by INPEX CORPORATION. This projectis the first in Japan to build an integrated hydrogenand ammonia value chain from production to usage.
Hydrogen and ammonia are forms of clean energythat do not generate CO2 when used. The
technology of Tsubame BHB Co., Ltd., a capitalalliance partner of DJK, has been adopted forammonia production, and DJK will perform the roleof EPC contractor for the ammonia production

equipment. Likewise in July 2023, construction workcommenced on the Genkai Biogas power plant, oneof the largest in Kyushu, to which DJK will supply thegas engine generator and other key equipment. Thispower plant will use the fermentation gas producedby heated cowpats and other livestock manure to
generate electricity equivalent to the amountconsumed annually by approximately 4,500 average
households. It is expected to result in the reductionof approximately 3,700 t of CO2 per year. Ourparticipation in large-scale environmental
contribution projects such as these carries greatsocial significance, and we hope to continue toactively contribute to the environment through ourbusinesses. We aim to expand our horizons toinclude the total coordination of environmental
contribution projects from the initial design stage
onward, utilizing the capabilities of Wave Engineering
Corporation, now part of the DJK Group.

To our stakeholders

Demonstrating our function asa trading company and fulfilling
our social role as we aim fora wellbeing-centered society
In the previous section, I explained some examples
of environmental contribution in our Plant & Energy
Business. This is just one of the DJK Group’sbusinesses. In our Energy Solutions Business, we sella large volume of battery materials production
equipment, as well as battery recycling equipment
and storage battery systems, amid the progressive
worldwide spread of lithium-ion batteries for electricvehicles. We also handle a wide variety of key
equipment that contributes to deplasticization anddecarbonization in our other businesses. The Groupis more than just a supplier that handles machinery,
and we will contribute to the environment andsociety by supporting our customers’ businesses asa vital business partner.
It is thanks to the understanding and cooperationof our customers, business partners, and various
related parties that DJK has been able to continue
and develop its businesses over the last 75 years.
Even as it transforms itself, the Group will continue
to enrich the world through products developed
from cooperation with customers, as it has always
done, playing a key role in the creation of a society
where everyone can feel a sense of wellbeing.
Through publications such as this report, we hope tomake the value of the Group’s trading company
function more widely understood. Based on thisunderstanding, all of the Group’s officers andemployees will strive to fulfill their duties with pride
and a sense of worth. I look forward to yourcontinued support.

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Value Creation Strategies

Sustainability Strategies to Support Value Creation

Data Section

A Message from the CFO

We will accelerate
growth investments
built on a stablerevenue base tofurther enhance
corporate value.

Pushing ahead with investment linked tolong-term growth

Osamu Fukawa

Director, Managing Executive Officer, CFO

In DJK, business management that balances capitalefficiency and profitability, financial soundness, andshareholder returns are positioned as the threepillars of our financial strategy.

Overview of the fiscal year ended
March 31, 2023
In the fiscal year ended March 31, 2023, the first yearof the medium-term business plan MT2024, net sales
increased year-on-year and profit attributable toowners of parent reached a record high. By area, sales
in China fell due to the impact of movement
restrictions during the first half of the fiscal year.
However, sales grew in other areas, primarily Asia, butalso the Americas and Europe, as the Groupdemonstrated the strength of its global structure.
Meanwhile, operating income was flat year-on-year,
mainly due to an increase in variable costs associatedwith the lifting of movement restrictions for COVID-19
and an increase in depreciation and amortization
resulting from the introduction of a non-consolidated
enterprise resource planning (ERP) system. In view ofthe gain on sale of marketable and investment
securities and other one-off extraordinary profit
included in profit attributable to owners of parent, as
well as a recognition of the factors that led to anincrease in selling, general and administrative expenses(SGA expenses), we see it as our challenge to invest in
strengthening our sales force and management
capabilities to boost operating income in the future.
See pp.29-44 for details

19

DAIICHI JITSUGYO CO., LTD.

Initiatives under the medium-termbusiness plan MT2024
We have established strengthening financial strategies
as a way to strengthen the management base under
MT2024. While maintaining a stable financial base, we
aim to reform our earning model through growthinvestments and other measures and improve capitalefficiency. In doing this, we are particularly consciousof three points: profitability, growth, and stability.
Maintaining and improving profitability
In terms of profitability, in the fiscal year ended March
31, 2023, we achieved a return on equity (ROE) of 10.3%,
exceeding our target for the first year of MT2024. To
maintain ROE above the 10% mark, it will be vital for us
to strengthen gross profit and operating income. Until
now, the Group’s management has focused on
preventing any operating loss. Our strength has been in
our mechanisms to manage gross profit for each projectbased on a common format. Under MT2024, as delivery
times become longer due to the increase in large
projects, we will engage in management focus on longterm value in addition to short-term profit; in otherwords, integrated management to enhance profitability
with a consciousness of capital efficiency. Last fiscal year,
we prepared balance sheets for each business divisionand started sharing the cash conversion cycle at monthly
corporate sales meetings for the purpose of discussingbalance sheet optimization and investment strategy ateach division. Going forward, we will implement moresophisticated business management with aconsciousness of return on invested capital (ROIC).

Under MT2024, we will promote strategic business
investment as a key measure to stimulate growth. We
have set an investment budget of ¥15.0 billion over thefive years to the fiscal year ending March 31, 2027,
across three areas: core fields, adjacent fields, and new
fields. In the fiscal year ended March 31, 2023, weestablished and launched our basic policy anddeliberation process for business investment.
Specifically, we collect a list of possible investment
projects from each business division, which is thennarrowed down by the Business Development
Department of the Corporate Strategy Division. The
Investment Management Reviewing Committee, which
I chair, then discusses the investment project
candidates from the long-term perspective ofenhancing corporate value. Finally, the Board of
Directors decides on each investment project. We
made the first of our strategic business investments inJuly 2023, when we acquired the shares of Wave
Engineering Corporation, a company engaged in thedesign and production of petrochemical and other
See pp.25-26 for details
plants, as well as consulting.
Looking ahead, we will endeavor to achieve a moremature business investment system by reviewing past
investment projects and sharing the lessons learned
within the Group, implementing small-scale test trials
of investments based on on-site authorization, andholding in-house training sessions and similar forums. I
feel that we have developed sufficient capabilities forthe quantitative analysis of investments, and we willraise our qualitative analysis capabilities as we
accumulate more experience. We will generatesynergies within the Group through business
investments that go beyond short-term profits andengage in deeper discussions, including the input ofknowledge by outside directors, to enhance corporate
value from a long-term perspective. We hope to
expand our range of investment options, including
recovering the cash payments for upfront investments
through depreciation and amortization.
We are also promoting investments in humanresources and digital transformation (DX) to boost theGroup’s competitive strength. We actively seek torecruit experienced engineers and competent humanresources for DX to strengthen our engineering
capabilities. At the same time, we revised the salarysystem in the fiscal year ended March 31, 2023, raisingsalaries by approximately 6% across the board as partof our efforts to establish rewarding workplaceenvironments. These measures have resulted in a
progressive rise in personnel expenses. However, we
believe that the effectiveness of these investments isdemonstrated by the steady increase in sales and profits
in growth fields such as our Energy Solutions Business.
Regarding investments in DX, we have introduced a
new ERP system for DJK, on a non-consolidated basis
as part of our efforts to promote integrated
management, including balance sheet management.
We are progressively integrating this system with the
ERP systems we have already introduced overseas. We
are also holding numerous study sessions to consider

how to utilize the various forms of generative AI in ourbusinesses in the future.
Maintaining a stable financial base
A stable financial base is a vital prerequisite forpursuing various measures and investments aimed atstrengthening profitability. We have obtained a longterm issuer rating (credit rating) of “A- (stable)” fromJapan Credit Rating Agency, Ltd., and we will work to
manage an appropriate level of shareholders’ equity
while maintaining financial soundness. We aim toachieve a price book-value ratio (PBR) of 1.0 or aboveand boost capital efficiency as part of our managementawareness of the cost of capital and the share price. To
this end, we will maintain an ROE of at least 10%,strengthen initiatives for the disclosure of non-financial
information with a consciousness of boosting theprice-earnings ratio (PER), and engage in more proactive
investor relations activities. In May 2023, we decided to
conduct a 3-for-1 stock split of common shares, aiming
to further expand the range of potential investors andenhance the liquidity of DJK shares.
Shareholder returns
Shareholder returns are among our most importantmanagement policies. For the fiscal year ended March
31, 2023, we paid an annual dividend of ¥178 pershare. We will continue to pay appropriate dividends inline with business performance, based on thecomprehensive consideration of factors such as internal
reserves, growth investments, and the maintenance ofstable dividends. In doing this we will aim for a payout
ratio of 30% of profit attributable to owners of parent.
We will make comprehensive judgments on theacquisition of treasury shares, taking into account ourbusiness performance and market trends.
We will continue to build on the Group’s stablerevenue base to strengthen profitability by promoting a
range of growth investments and engaging in integrated
risk management. This will create a virtuous cycle ofinitiatives with a consciousness of profitability, growth,and stability, leading to the sustainable enhancementof corporate value and shareholder returns.

Financial and capital strategies
Shareholder
returns(Enhance
shareholder
value)

Appropriate balance
to maintain andboost ROE
at
10% or more
Business

investments(Ensure growth)

Improve
capital structure(Strengthen thefinancial base)

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Value Creation Strategies

Sustainability Strategies to Support Value Creation

Data Section

Materialities
In considering the future of our Group on the occasion of establishing a new philosophy, our desire to actively
contribute to the realization of a sustainable society not only through our own growth but also through ourbusiness activities was the underlying factor. Based on this belief, we have examined issues in terms of theirsignificance, both for our stakeholders and for our Group, based on changes in the business environment andsocial trends related to sustainability, and identified materialities (important issues) to enable us to achieve aresolution of these issues.

Process to Identify Materialities
The following steps were taken to identify the materialities that we will focus on in order to maintainsustainable growth. The materialities identified will be reviewed on a regular basis in light of changes in theenvironment and business developments in the Group.
STEP 1

Issue identification

STEP 2

Prioritization

STEP 3

Validation
STEP 4

Materiality
identification

The Board of Managing Directors* and the Board of Directors exchanged opinions on thespecified process, the proposed materialities and the proposed materiality matrix, andconfirmed their appropriateness. Materialities identified are reviewed and approved by the
Board of Directors.
*Currently the Management Committee: Environment (E)Importance to stakeholders: Social and economic (S): Governance (G)Biodiversity conservation

Climate change

Increased social welfare costs

Environmental issues

Economic and educational inequality

Respect for human rights

Gender equality

Compliance
Changes instructure

DAIICHI JITSUGYO CO., LTD.

Note: The symbols ■, ●, and ◉ correspond to each vision (target)

Materialities

Contribution to asustainable earth

Contribution tosustainable
development ofindustries

Contribution to
healthy, safe andsecure lives

Promotion ofdiversified humanresources

Improvement ofquality
management

Vision(targets)■ Realization of adecarbonizedsociety● Realization of a
resource-recycling
society◉ Protection of thenatural environment■ Utilization ofadvanced IT/AI● Promotion of smart
factories◉ Providing safe &secure products■ Improved safetywith social
infrastructureenhancement● Providing well-being
and high quality
products
development■ Healthy work
environment● Sustainable ability
development◉ Talent management■ Strengthening
internal controls
and governance● Risk management◉ Social contribution
and harmony

Contribution throughexpanding sales of
eco-friendly products

Initiatives for thesustainable developmentof industries

Contribution to a safe
and secure society■ Binary power
generation equipment■ Solar power
generation systems■ Electric injection
molding machines■ Electric groundsupport equipment(GSE) for airports■ Glycol recovery
vehicles● Equipment forsolvents recovery
and recycling■ Electronic
component
mounting systems● LOGITO◉ BCP services tomaintain customers’
production◉ Electricity storage
systems

Maintenance andimprovement of
comfortable workplaceenvironments■ Use of lowpollution, fuelefficient businessvehicles■ Encouraging the
spread ofgenerative AI■ Digitalization ofbusiness-related
documents

Contribution to a sustainable earth
Contribution to sustainable development of industries
Contribution to healthy, safe and secure lives
Promotion of diversified human resources
Improvement of quality management

demographic

21

Materialities, targets, and related SDGs

The issues listed in STEP 1 were prioritized in order of importance using a matrix consistingof two axes: importance to stakeholders (vertical axis) and importance to the Group(horizontal axis).

Migration issues

ImportanceFor the Group, engaging in the identified materialities is a way to contribute to achieving the SDGs, promoteeconomic and social development while also supporting a sustainable global environment, and fulfill DJK’s
philosophy in a tangible manner.
To achieve the vision (targets) set for each materiality, the operation of our environmental management
system (EMS) reflects the themes that each business division will focus on to address social issues through its
businesses and the management base themes that support sustainable growth. We have launched a system tomanage these themes in our plan of action. Going forward, we will promote these themes through our uniqueframework linked to each materiality.

We have identified a wide range of issues based on stakeholder perspectives and thebusiness strategies of each segment in our Group, referring to international guidelines suchas SDGs and ISO 26000, and categorized them in terms of environment (E), social andeconomic (S), and governance (G).

Materiality matrix
Most
importantMateriality Initiatives

Addressing
social issues
through businessdevelopmentthat makes themost of DJK’s
strengths

Natural disasters
Spread of infection
Changes in international affairs
Changes in industrial structure
Changes in supply chain
Aging infrastructure
Information and cyber securities

Food shortage crisis

Strengthening of governanceFood waste issue

Risk management

Rural decline and depopulation
Changing values

Importance to the DJK GroupStrengthening
the managementbase to support
sustainablegrowthDigital transformation (DX)

Most
important■ Road cleaningvehicles■ Disaster response
base-function trucks■ Runway snow
removal equipment● Tablet visualinspection
machines andprinters■ Prevention of workrelated accidents● Ensuring safety on
construction
worksites■ Prevention of workrelated accidents■ Promotion of female
advancement■ Promotion ofchildcare leave
utilization by male
employees■ Improving employee
engagement■ Implementation ofstress checks◉ Appropriate
assignment of
human resources◉ Enhanced training
through e-learning◉ Enhanced personnel
system for engineering
human resources◉ Enhanced training foroverseas employees(in Japan)■ Compliance withsecurity tradecontrols■ Thoroughcompliance■ Harassment
prevention■ Ensuring thereliability offinancial reporting● Employee safety
management● Mitigation of trading
accidents● Continuing review
of BCP◉ Various donation
activities◉ Enhanced
information
disclosure

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Value Creation Strategies

Sustainability Strategies to Support Value Creation

Data Section

Growth Strategy / Medium-term Business Plan
Qualitative Targets under Medium-term Business Plan MT2024: First-year Achievements and Challenges

V2030 Growth Strategy (Vision2030)
We have achieved steady growth since our founding through solid corporate management. In light of therecent situation where major changes continue to take place in the social and business environment, weare more keenly aware of the need for a fundamental review of corporate operations and strategicplanning from a long-term perspective.
Against this backdrop, we have formulated our V2030 growth strategy for fiscal 2030, based on ourstrong determination to chart a different growth curve than in the past.

Basic Strategies
Aggressive investments

Investments toward business expansion, strengthening,and creation, as well as solutions to social issues

Management focus on long-term value,in addition to short-term profit

Build management base, for medium- to long-term
profitability by improving capital efficiency

Contributing to various stakeholders:Customers, employees, suppliers,
communities, and shareholders

Achieve a sustainable society by addressing ourmaterialities

Shift from product-only sales to products
and integrated solutions business model

Proposals for embedded-services business, andsubscriptions models, etc.

Capturing global growth

Make more business dealings with foreign companies

Promotion of digital transformation

Significantly improve productivity, and creation of
innovative business models

1 Business strategies for growth
Achievements(1) Strengthening engineering

capabilities(2) Strategic business

investment(3) Expansion of businesswith global companies

Quantitative Targets (Consolidated)

300.0

Net sales ¥12.5

billionOperating income ¥billion

ROE

10

%

(4) Progressing digitaltransformation

Challenges

The Engineering Center has enabled partnerships among engineers, aswell as sharing of challenges in projects. The Center also reinforced
on-site responsiveness for large-scale and complex projects.
Established the Engineering Division in April 2023
Solidified the foundation to further strengthen engineering capabilities,
essential for business expansion.
Demand for engineers increased, due to increase in overseas projects
Requirements for our engineering are on the rise
Formulated and started operating our basic policy for business
investments and screening process for possible investments
Internal sharing of lessons from past investments, and fostering
investment-oriented business mindset
Business agreements with foreign companies in Energy Solutions andIndustrial Machinery Businesses
Comprehensive development of overseas employees
Promotion of understanding of trading companies’ functions and overseas
expansion of engi-neering functions
Digital Innovation Center established in April 2023
Accelerate implementation of reform by increasing workforces
Implementation of digital transformation, directly related to sales activities

Investment Strategies
In addition to the seven businesses, we will consider investments from a long-term perspective inadjacent and new fields to expand and strengthen our business, create new markets andbusinesses, and solve social and environmental issues.

2 Strengthening management baseAchievements

Medium-term Business Plan MT2024
Backcasting from the V2030 growth strategy, we have positioned each three-year period from fiscal
2022 to fiscal 2030 as a period of Creation, Growth, and Advancement, and formulated a mediumterm business plan MT2024 (Creation Phase).
FY2019-FY2021

FY2022-FY2024

FY2025-FY2027

FY2028-FY2030

FACE2021

MT2024

MT2027

MT2030

Build our foundation

Creation

GrowthAdvancement

Orders received
Net sales
Operating income
Ordinary income
Profit attributable to owners of parent
ROE

23

DAIICHI JITSUGYO CO., LTD.

(2) Strengthening risk

(3) Strengthening financial

strategies

MT2024(Millions of yen)

governancemanagement

Next-generation engineering trading firm

Quantitative Targets (Consolidated)(1) Deepening corporate

FY2022 Results

FY2023 Forecasts

FY2023 Targets

FY2024 Targets

244,296
153,674
6,717
7,108
6,316
10.3%

220,000
180,000
7,500
8,000
5,400

180,000
170,000
7,000
7,200
4,800
10.0%

200,000
185,000
8,500
8,700
5,800

(4) Strengthening humanresources strategies(5) Promotion ofsustainability
management

Challenges

Reflect results of questionnaires of the Board of Directors’ effectivenessevaluation on our management system
Outside directors’ further involvement with directors’ individual
evaluations and remunerations
Evaluations for achievements for medium-term business plan (qualitative
targets) were performed by outside directors
Review matters to be discussed at the Board of Directors meeting(allocation of deliberation time)
Integrated Risk Management Office established in April 2023
Identifications, analyses, assessments, and countermeasures of risks
involved with realization of our growth strategies
Proactively address improvement of cash conversion cycle
Reform of earning model by investments in further growth
Executed our personnel system reform, various types of training systems,
and employees’ en-gagement questionnaire
Effectively utilize these system reforms and questionnaire results
Endorsement of TCFD, computation of Scope 1 and 2
Sustainability Promotion Department established in April 2023
Promoting efforts of sustainability and establish assessment methods forachievements

DJK Report 2023

24

Outline

Value Creation Strategies

Sustainability Strategies to Support Value Creation

Data Section

Medium-term Business Plan: Strategic Business Investment
Under the V2030 growth strategy, we have fundamentally revised our management and business strategies todevelop a different growth curve from the previous ones. Our most important strategy is to further strengthen
our trading business through aggressive investments to accelerate growth.
By establishing policies and systems for business investment, we aim to aggressively implement strategic
business investments and achieve the goals of our V2030 growth strategy.

Acquisition of the shares of Wave Engineering
In July 2023, we acquired the shares of Wave
Engineering Corporation, making it a Group
company.
Wave Engineering specializes in FS and FEED
services. Integrating its strength in simulation with
the Group’s plant engineering capabilities will
enable us to participate in plant construction
from the design consideration stage, a hitherto
untapped business domain for DJK. Through thisintegration, the Group will be able to provide
one-stop FS-FEED-EPC services, enabling us tostrengthen our engineering capabilities andprovide new added value to customers.
Recent years have seen an increase inopportunities to consider the use of hydrogenand ammonia as the tide of the times turns
toward carbon neutrality. Through the
involvement of Tsubame BHB Co., Ltd., which ispartly owned by DJK, DJK’s Engineering Divisionand the Group company, DAIICHI ENGINEERINGThe Trading Business: Our Core Competency
Initiatives to continuously
boost our value addition

Highperformanceindustrial
machinery

Our suppliers:
industrial machinery
manufacturers

1

Expansion into
after-sales services

2

Global bases expansion
ahead of our customers’
overseas manufacturing
expansion

3

4
State-of-theart production
technology

5

Customers(manufacturers)

Become a leading
expert in global
logistics specializing
in machinery

Allocation of investing budgets
2023-24

Plant &
EnergyAutomotive

25

DAIICHI JITSUGYO CO., LTD.

Industrial
Machinery2025-27

Ichiro Uno
Representative Director
President & CEO of DJK¥

2.0 billion ¥5.0 billion¥

2.0 billion ¥4.0 billion

Capital injections to power plants withproject financeOverseas expansion of PPA business at
solar power plants
Co-development of biological fuelmanufacturing equipment
Investments in chemical recycling business
Investments with our involvement in fuelsupply chains
Capital injections and M&A to medical
equipment manufacturers
Establishment of OEM businesspurposed manufacturers
M&A of global logistics companies

1.0 billion ¥1.0 billion

New business creation, through LP
capital injections to venture capitals
Capital injections to start-ups withtechnical advantages

Healthcare Aviation & Social
Infrastructure

Decarbonizedsociety

Adjacent
fields3R-Recycling society
Supply chain, social
infrastructure

AI / IoT
Next-generation
communication
Medical, safe andsecured lives

Investments to create social values
and solve social issues

NewfieldsInvestments for new business fields
and business models

Total

Examples of investments under consideration

Business acquisition to reinforce
engineering capabilities
Establishment of demonstration centers
in Japan and overseas
Capital injection, partnering, and M&A
for machinery trading companies andcomponents manufacturers
Establishment of a LOGITO consortium
through capital partnering

Electronics

Investments to strengthen existing
seven segments

FY2022 initiatives
Instituted investment policy and application procedures
Framework formulated: Established the investment implementation taskforce and Investment
Management Reviewing Committee
Reviewed past investments and engaged in in-house sharing of lessons learned
Made efforts to cultivate awareness through in-house study meetings and implemented small-scale test
trials based on on-site authorization
Promoted specific M&A projects*Acquired Wave Engineering Corporation

EnergySolutionsCorefieldsBasic Policy on Business Investment
Boost cooperation with investee companies to expand and strengthen existing businesses and create new
businesses, investing management resources to enhance profitability
Pursue more than capital gains, generating synergies through business operations to enhance corporate value

Kinichi Shibata
Representative Director and Chairman
Wave Engineering Corporation

Domains and Scale of Business Investments

Shorter lead-time
for general-purpose
machines throughstrategic inventories
Support from devisingoverall plans through startof production= Engineering functions +all process management

CO., LTD., we will consider manufacturing
processes and plant design for blue and green
ammonia synthesis, aiming to contribute toachieving a sustainable global environment while
also achieving further growth and enhancing
corporate value for the Group.

¥

5.0 billion ¥10.0 billion¥

DJK Report 2023

26

Outline

Value Creation Strategies

Sustainability Strategies to Support Value Creation

Data Section

Business Segments at a Glance

7 Businesses

Plant & Energy
Business

EnergySolutions
Business

Industrial
MachineryBusiness

Electronics
Business

Automotive
Business

Healthcare
Business

Aviation & Social
Infrastructure
Business

Business fields

Petroleum / chemicals
Papermaking / steelmaking
EnergyMaterials
Cells / modules
Solar panels / storage
batteries
Next-generation batteries
and fuel cells

Home appliances /office automation
Food packaging
Medical equipment
Housing equipment
Distribution materials
Growing seedlings

Surface mount technology(SMT)
Microelectronics
Logistics automation
solutions (LOGITO)

Interior and exterior parts
Powertrain
Car electronics / ADAS

Pharmaceuticals
Cosmetics
Food

Aviation
Airports
Defense and disaster
preparedness
Customer support

Major products

Petroleum refinery andpetrochemical plant equipment

Battery materials
production equipment

FA systems

Molding machines

Tablet visual inspection
systems

Steelmaking plant equipment
Papermaking plant equipment
Oil, gas, and geothermal
production facilities

Flexible solar panels
Powder processing
equipment

Electronic component
mounting-related systems(SMT)

Ground support
equipment for aircraft
Ground support
equipment for airports
Equipment used in
airports
Specialized vehicles fordisaster relief
Equipment to reduce
workforce andworkload

Well drilling equipment anddrilling rig packages
Power generation infrastructure
Renewable energy-related
equipment
AI / IoT-related equipment
Environmental protection
facilities
Analysis and measurement
equipment
Chemical plant equipment
Safety monitoring equipment

Storage battery systems
Cell electrodemanufacturing equipment
Battery recycling
equipment
Cell / module assembly
equipment
Fuel cell manufacturing
equipment
Cell / module charge,
discharge inspection
equipment

Injection molding machines
Extrusion machines
Pressure and vacuum
thermoforming machines
Die-casting machines
Metal-processing machines
Ceramics processing
machines
Automated assembly
equipment
Material-handling robot
systems
Coating / surface decorationequipment
3D printing systems forplastic and sand molds

Engineering services

Semiconductor devicerelated systems
Display-related systems
SMT peripheral inspection
equipment and post-process
automation equipment
IoT / software
Coating and dispensing
equipment
CO2 and YAG laser, blue laser
Automation robots

Metal-processing machines
Plastic-processing
machines
Coating / surface
decoration equipment

Capsule visual inspection
systems

Automated assembly
equipment

Blister lines
Sachet packaging lines

Inspection equipment
Module support
equipment

Tablet pressing machines
Vial filling lines
Syringe filling lines
Powder filling lines
Leak inspection machines

IoT-related equipment anddevices

Automatic cell culture
systems

Logistics automationequipment

Other packaging lines

Visual, X-ray, characteristic,
and other inspection
equipment

Filling and packaging
equipment

Tablet ink-jet printing andinspection systems

Ratio to total net sales

11.2%
2022/3

Net sales (Millions of yen)

12.0%

2023/32022/315.5%

2023/32022/331.6%

2023/32022/320.5%

2023/32022/37.4%

2023/32022/31.6%

2023/32022/32023/3

11,881

17,192

19,00418,50919,27523,76652,09848,561

31,98031,45911,18911,435

2,466

2,518

Operating income / loss (Millions of yen)

610

855

696

△ 68

646

642

3,125

3,215

1,238

909

1,161

1,192

△ 79

△ 45

Operating income margin (%)

5.1

5.0

3.7

△ 0.4

3.4

2.7

6.0

6.6

3.9

2.9

10.4

10.4

△ 3.2

△ 1.8

Number of employees

103

128

48

62

200

176

318

339

130

136

170

172

30

29

Note: As this table does not include Other, which is not included in the reportable segments, or adjustments for inter-segment transactions, etc., the figures do not matchthe overall total.

27

DAIICHI JITSUGYO CO., LTD.

DJK Report 2023

28

Outline

Value Creation Strategies

Sustainability Strategies to Support Value Creation

Data Section

Strategy by Business Segment

Plant & Energy Business
TOPICS

Business Details
We provide various equipment and advanced technologies in the plant field. In the energy field, we provide
related products for a decarbonized society, with a focus on renewable energy.
We leverage our advanced technology and expertise to provide equipment to the key
industries that support social infrastructure, based on the extensive experience andknowledge we have developed over many years. Through our plant and energy
businesses, we will pioneer the path to a decarbonized society.
We will also contribute to addressing social issues by actively developing our digitaltransformation (DX) business to supplement recent aging equipment and labor shortages.
At the Plant & Energy Business Division, we aim to promote resilient businesses that
achieve sustainable growth and evolution.

Yuji Shika

Executive Officer, General Manager,
Plant & Energy Business Division

Strengths
Solution proposals based on our wealth of experience and knowledge since our founding, and support forcompanies expanding overseas by utilizing our global network
High level of experience in renewable energies, including solar power plant operations and biomass power
plants, and ability to propose equipment
Newly established total solution framework for factory and plant construction, from FS and FEED to EPC andequipment supply
Product lineup that contributes to on-site problem solving and technical succession utilizing DX (AI & IoT) technology

Participating in the Kashiwazaki Clean Hydrogen/Ammonia Project as EPC contractor
The Plant & Energy Business Division provided ammonia
production equipment for the Kashiwazaki Clean Hydrogen/Ammonia Project implemented by INPEX CORPORATION. This
project is the first in Japan to demonstrate an integrated value
chain from the production of blue hydrogen and ammonia fromnatural gas produced in Japan, through the pressurization andinjection of the CO2 byproduct from the manufacturing process
into a depleted gas field reservoir in Japan as a Carbon dioxide
Capture, Utilization and Storage (CCUS) effort, to the use of thehydrogen produced for electricity generation and otherpurposes. It is planned to produce 500t of ammonia per year
under the project, with production scheduled to commence
during FY2025.
Hydrogen production

Gas production

Water

Hydrogen power generation

OxygenPipeline

Natural gas

Minami-Nagaoka
Gas Field

Business Environment

The technology of Tsubame BHB Co., Ltd., with which DJK
has a capital and business agreement, was selected for thisproject. (This technology enables a reduction in environment
impact from the manufacturing process and facilitates lowtemperature, low-pressure, small-scale ammonia synthesis.) We
will utilize DJK’s one-of-a-kind engineering functions toundertake the engi-neering (construction design), procurement,
and construction (EPC) of the ammonia production equipment,
as well as process management services.
Through our participation in the project, the Plant & Energy
Business Division will strive to promote the spread of ammonia
production technology to help realize a decarbonized society.

HydrogenCO2 capture

Gas

Nitrogen

CO2

Positive factors

Negative factors

Actual introduction of DX products (IoT-related) at plants
Revitalization of CCS projects aimed at achieving adecarbonized society, overseas projects for major
engineering companies, and geothermal development
projects
Increasing demand for bioethanol
Rise in projects under the Joint Crediting Mechanism (JCM)
to contribute to reducing greenhouse gas emissions
Increase in business talks on renewable energy

Electricity

Ammonia production

EGR

Suspension of investment plans due to declining
demand for gasoline and basic chemicals
Unstable industries, easily affected by environmental
and economic conditions
Suppression of capital expenditure and maintenancecosts due to a decrease in the demand for paper
Postponement and cancellation of large projects
due to soaring parts, materials, and equipment costs
Shortages and soaring prices for biomass fuels

Ammonia

Petroleum

Higashi-Kashiwazaki Gas Field
Hirai-area

Review of the First Year of MT2024
Business Overview

Initiatives in V2030 and MT2024

29

EnergyPetroleum

Chemicals

Materials

Decarbonization

Ongoing efforts in geothermal development
and binary power generation business using
waste heat
Developing low-carbon projects in Asianmarkets using theJCM system

Energy transition
initiatives for
decarbonization
Active proposals for
smart security andDX (AI & IoT)

Participation in new
products, new processes,
and automation themesin the laboratory throughproactive approach to
the R&D department
Developing foreigncompanies’ customers
targeting Asian markets

Proactive and bold
approach to the biomass fuel businessAccelerating initiatives for bioethanol
and SAF businesses

Developing demand for
low-carbon ammonia
and taking on the challenge of green ammonia
Expansion of developmentof own renewable energy
sources and developmentof rare metal-free storage
batteries

DAIICHI JITSUGYO CO., LTD.

Handled on-site ammonia plants, equipment forbioethanol, and equipment for biogas power
generation to contribute to initiatives to achieve a
decarbonized societyEntered the smart security business using DX
products such as gas leakage monitoring cameras
and vibration sensors for plant maintenanceContinued to participate in projects under the Joint
Crediting Mechanism (JCM) to contribute to
reducing greenhouse gas emissions
Continued partnerships with process licensers topromote the bio-refinery business
Engaged in low-carbon and green ammonia
production projects
Currently expanding our approach to the R&D
department using various equipment; building a
track record for catalyst evaluation equipment in
the chemicals field

Net Sales / Operating Income (Millions of yen)
Net sales

Operating income

20,70017,192

16,10016,900

1,134
846

855

790

FY2022 Targets

FY2022 Results

FY2023 Targets

0

FY2024 Targets

MT2024

DJK Report 2023

30

Outline

Value Creation Strategies

Sustainability Strategies to Support Value Creation

Data Section

Strategy by Business Segment

Energy Solutions Business
TOPICS

Business Details
In the rechargeable battery field, we mainly provide lithium-ion battery (LIB) manufacturing-related equipment,
as well as solutions for next-generation energy such as fuel cells, solar power,
and storage batteries.
Amid the global movement toward realizing a decarbonized society, the spread ofin-vehicle batteries and industrial storage batteries is accelerating. At the Energy
Solutions Business Division, we provide a variety of equipment in the rechargeable
battery field to customers around the world, leveraging our global network, engineeringfunctions, and other strengths. We will contribute to our customers’ productmanufacturing and business development, aiming to realize a sustainable society.

Daijiro Kodama

Executive Officer, General Manager,
Energy Solutions Business Division

Covering a wide range of fields from materials to battery manufacturing (upstream to downstream of the
production process)Offering solutions based on a wealth of achievements and experience gained over the years
Partnerships with industry-leading manufacturers in Japan and overseas
Project management by the Engineering Department

Business Environment
Negative factors

Continuing investment in LIBs due to government
policies to promote the shift to EVs in each country
Revitalization of investment due to the U.S. Inflation
Reduction Act
Demand for further speeding up assembly processes

The Energy Solutions Business commenced sales activities as a new segment in April 2021, and we haveprogressively expanded the business amid the trend toward carbon neutrality. Based on an independent survey by
the Energy Business Review (a specialist magazine covering all aspects of trends in the energy industry) published byValleyMedia, Florida, U.S., the activities of the Energy Solutions Business were recognized with selection among the“Top 10 Battery Manufacturing Solutions Companies in APAC - 2023” and featured in the Energy Business Review.
We will continue to contribute to the development of the rechargeable battery industry, aiming for further
business expansion.

DJK: connecting the manufacturing industry with manufacturing
equipment manufacturers

Strengths

Positive factors

Leading supplier of rechargeable battery manufacturing equipment

Price competitiveness of equipment on overseas markets
Rapid expansion of demand, exceeding the
production capacity of equipment manufacturers
Intensifying competition due to entry of
manufacturers from other industries

Today, amid rapid growth in the rechargeable battery market, there isconstant demand within the industry for equipment manufacturers thatprovide highly reliable manufacturing equipment and sound after-sales
service. There are generally many obstacles, however, that prevent
manufacturing companies from finding the optimal manufacturing
equipment manufacturer on the market. DJK acts as an intermediary tofacilitate this task. We boast over seven decades of experience in theindustry, from research and development to giga-scale projects. We
leverage our diverse engineering capabilities and equipment know-how to
procure and supply optimal equipment from around the world.
Using DJK’s global supply chain, we provide highly reliableequipment and after-sales service to customers in a wide range ofregions and environments. We also actively engage with the
manufacturing equipment manufacturers, promoting joint design andfunctional development to ensure the manufacture of high-quality
products for customers.

Review of the First Year of MT2024
Business Overview

Initiatives in V2030 and MT2024

New business
Charging anddischarging equipment

Cell manufacturing
equipment

Material-related
equipment

Promotion of projects
coordinated by theCompany
Cost reduction by
manufacturing at thedelivery location, etc.

Package proposals
to customers
Development of
next-generationequipment andcultivation of
manufacturers

Powder engineeringby the Company
Manufacture ofequipment in a
locally completemanner in collaboration with partnercompanies

31

DAIICHI JITSUGYO CO., LTD.

Engineering
Coordination ofprojects led by theCompany
Launch of overseas
vendors by theEngineering
Department

Sales of materials
related to fuel cells
and LIBs
Development of
all-solid-state battery
manufacturing-related
equipment and cultivation of equipment
manufacturers

Investment was vigorous in Japan and overseas, andthe number of business negotiations increased.
Sales have been in a cyclical lull but orders were
the highest on record
Increased the number of engineering members andstrengthened management capabilities to address
the increasing scale and complexity of projects
Coordinated with the Engineering Division tofurther strengthen our team and engage in thoroughproject management
Engagement with Japanese, European and U.S.
customers progressed smoothly, but there wasinsufficient engagement with the Chinese and South
Korean markets, which dominate the LIB market
The development of differentiated equipment is anurgent task in China and South Korea, which boastof numerous local manufacturers
Promoted the development of new equipment andinitiatives in recycling-related businesses; aim forbusiness development as the division’s new pillar
under MT2024

Net Sales / Operating Income (Millions of yen)
Net sales

Operating income
30,00026,90018,50913,200061

FY2022 Targets

797

879

FY2023 Targets

FY2024 Targets

68

FY2022 Results

MT2024

DJK Report 2023

32

Outline

Value Creation Strategies

Sustainability Strategies to Support Value Creation

Data Section

Strategy by Business Segment

Industrial Machinery Business
TOPICS

Business Details
We provide production equipment, raw materials, and other products mainly related to automated assembly
machines and surface treatment in a wide range of fields, including home appliances,
housing equipment, food packaging, medical, motorcycles, and construction machinery.
In addition to our function as a trading company, we are working to strengthen the
additional engineering capabilities we provide in our existing businesses. We aim toboost our presence, expanding and enhancing both existing businesses and new(medical and agricultural) businesses through a balance of aggressive and defensive
initiatives. We will strengthen coordination across the DJK Group’s global sales networkand extend our business areas to expand our business with foreign companies.

Kenji Murabe

Executive Officer, General Manager,
Industrial Machinery Business Division

Strengths

Expanding business with globally developing foreign companies
In the Industrial Machinery Business, we haveestablished a medical department specializing in thesale of equipment for the manufacture of medical
equipment, and we are ramping up sales. Althoughstill in the process of market development, we aremaking steady progress in understanding the market
and building relationships with customers. We alreadyhave some business with foreign companies in North
and Central America concerning manufacturing
equipment for disposable medical equipment(catheters, syringes, dialyzers, blood bags, etc.). Goingforward, we will expand the geographical area of our
medical equipment business beyond North andCentral America as an equipment supply partner toforeign companies doing business around the world.

The number of people suffering from lifestylerelated diseases is expected to increase due to theaging population and changes in diet, and we believethat the trend toward enhancing quality of life (QOL)
will lead to further investment in self-medication kits
and similar products. We are also seeing a rapid risein the need for automation and labor-saving, both inJapan and overseas, as manual tasks such as productassembly become unsustainable due to labor
shortages. We will progressively develop suppliers inJapan and overseas specializing in the medical field
and offer global automation proposals to further
strengthen our medical equipment business.

One Window Total Solution: an organization capable of engineering facilities from upstream to downstream
Proposing environmentally friendly equipment and materials that incorporate our experience in a wide range
of industries and the latest trends (energy-saving diagnostics, detoxification tower equipment, powder coating,marine biodegradable plastics, etc.)
Global sales network with a team of engineers

Business Environment
Positive factors

Negative factors

Rise of eco-friendly products and systems andincreasing recycling needs
Increasing demand for automated, labor-saving,energy-saving equipment due to the decline in theworking population and soaring energy prices
Movement toward domestic manufacturing in Japanand the shift of overseas man-ufacturing plants due
to geopolitical risks

Trend toward reducing disposable plastic products
for deplasticization and decarbonization, anddisparity between countries in the content andscope of environmental restrictions
Rising costs due to soaring energy prices
Longer delivery times for equipment due to labor
shortages, etc.

Review of the First Year of MT2024
Business Overview

Initiatives in V2030 and MT2024

New business
Molding machines

MedicalExtrusion/Injection:
promote efficientsales expansion bymaking full use of DX
Vacuum: strengthen
overseas sales withdemo equipment
and manufacturing
and sales of molded
products

Acquire know-how, products, and commercial rightsthat can be sold turnkey
North and Central America:
capture capital investment
for automated manufacturing by Western medical
device manufacturers
China and Asia: expand
business mainly in sales ofsyringe manufacturing
equipment

33

DAIICHI JITSUGYO CO., LTD.

Strawberry
seedlings

Additive
manufacturing

Balancing production
system and sales at
Daiichi Jitsugyo
Berries Farm
(Moroyama, Saitama)
Establishment of asystem for cultivationof Japanese varieties
in Mexico

Utilize demo equipment to expand
sales to all DJK
Group customers
Increase presence in
the industry by providing not only
machinery, materials,
and sales, but also
manufacturingservices

Recycling business,handling of environmentally friendly
products, and taking
on the challenge ofmanufacturing[Molding machines]
Business performance was stable. Launched full-scale sales activities
utilizing demo equipment to strengthen sales overseas[Medical]Captured demand for automation at medical facilities to build a trackrecord of business with foreign companies for medical equipment[Strawberry seedlings]
Production systems are now complete. Launched a dedicated sales
team to secure customers and promoted activities encompassing thesale of cultivation systems[Additive manufacturing]Achieved sales of products made by Stratasys, a world-leading
manufacturer of resin-based 3D printers. We aim to expand thebusiness by enhancing our product lineup through collaboration withother new manufacturers[New business]
Continued to present proposals based on the situation to address
heterogeneous and diverse market needs (biodegradable plastics,
recyclable resins, paper products)

Net Sales / Operating Income (Millions of yen)
Net sales

Operating income / loss

23,766
21,90021,70017,600

1,146
1,152

642
551

0

FY2022 Targets

FY2022 Results

FY2023 Targets

FY2024 Targets

MT2024

DJK Report 2023

34

Outline

Value Creation Strategies

Sustainability Strategies to Support Value Creation

Data Section

Strategy by Business Segment

Electronics BusinessBusiness Details

TOPICSIn the field of digital electronics-related manufacturing, we mainly provide various types of equipment such as
electronic component mounting lines, semiconductor and LCD module assembly
equipment, and peripheral equipment.
While maintaining our high market share in the electronics industry, we aim to reinvest
the experience and know-how we have developed over many years back into society
and build a base for industrial and technological innovation through equipment sales
and solution proposals, aspiring to realize a fair society. We provide solution proposals
for factory automation, unmanned operation, and systemization. We aim for realizing asustainable society where everyone can continue working, not only in the electronics
industry but also in a wide range of other fields.

Keiji Yamamoto

Executive Officer, General Manager,
Electronics Business Division

Strengths
Providing solutions to reform manufacturing processes with its state-of-the-art technology and experience,
mainly for electronic component mounting-related systems, electronic device systems, and automationequipment
With the global environment for the electronics industry undergoing significant changes, we support ourcustomers’ global expansion, not only by providing equipment but also through our global support system andthe provision of accurate information

Establishing a laboratory to provide advanced technologies to the world
In a rare step for a trading company, we haveestablished a laboratory to assist us in rapidly evolvingfrom the sale of products into a corporate group thatprovides new technologies and construction methods,
creating opportunities and ideas for our customers toconsider factory DX and smart factories as the nextgeneration engineering trading firm. Japan is a stepbehind the rest of the world in the field of factory DX
and smart factories. Moreover, the businessenvironment for industries is undergoing significant
changes such as the use of AI technology, robot
technology, logistics automation, remote monitoringand operation, energy conservation and environmental
measures. To address these changes, we will pursue
research and development, together with tie-ups withoutstanding manufacturers in Japan and overseas, toprovide our customers with new technologies,
processes, and value; not only in response to theircurrent conditions but also in anticipation of possible
changes in the future.
At present, the laboratory is engaged in thefollowing initiatives:(1) Full automation of incoming and outgoing stockof electronic components at production sites(2) Software development to enable predictive
maintenance, task analysis, and environmental
countermeasures through the visualization of
production processes at factories(3) WCS* development for centralized control of
intra-process transportation at factories andwarehouse management at storage yards(4) Development of systems that use AI cameras toanalyze the flow lines of people and objects andverify waste reductions and efficiency
improvements
The laboratory not only creates new value but also
takes on the role of providing the new technologies
created here into the wider world.
In the future, we will establish in-house venturecompanies born from this laboratory, building amechanism to provide opportunities for many young
employees to learn management skills.
*WCS: Warehouse Control System

Business Environment
Positive factors

Negative factors

Increasing need for high-speed mounting
equipment due to even higher functionality in electronic devices
Expanding demand for automation in response to
the decrease in the working population and digitaltransformation (DX)
Expanding government support for thesemiconductor business

Rise of emerging manufacturers in the high-speed
mounting equipment category
Shortage of expert human resources, equipment
manufacturers and products in the factory DX
business
High barriers to entry into the semiconductorbusiness

Review of the First Year of MT2024
Business Overview

Initiatives in V2030 and MT2024

New productsElectronic component
mounting equipment business
Capturing equipment
demand as Chinese companies expand into the South
Asia-Europe region

35

DAIICHI JITSUGYO CO., LTD.

Semiconductorbusiness
Expanding sales of smart
logistics systems fromJapanese mother factories
to overseas factories
Expanding services outside
the electronics industry
through collaboration withother business segments

Increasing the number of
employees in Greater
China and strengthening
the sales expansion system
Expansion of sales rights
for leading production
equipment in China, South
Korea, and Taiwan, andreceipt of orders

Establishment of LOGITO
consortium using thelaboratory**Established in June 2023.

[Electronic component mounting equipment business]
Progressively shifting from product-only sales to a products
and integrated solutions business model; captured a wide
range of orders in Japan, mainly from in-vehicle-related and
EMS companies; successfully captured orders for largescale projects overseas, mainly in China[LOGITO]
Succeeded in obtaining a wide range of business inquiries
and orders through enhanced digital marketing; expanded
the range of manufactures whose products we handle[Semiconductor business]
Demand for package substrates was robust, mainly in
China, Taiwan, and South Korea, but the market weakened
rapidly in the second half
[New products]
Established a laboratory to research and develop cuttingedge, next-generation technologies for manufacturing in
June 2023

Net Sales / Operating Income (Millions of yen)
Net sales

Operating income / loss
61,80053,20052,30048,561

3,215
2,621

2,058
2,200

0

FY2022 Targets

FY2022 Results

FY2023 Targets

FY2024 Targets

MT2024

DJK Report 2023

36

Outline

Value Creation Strategies

Sustainability Strategies to Support Value Creation

Data Section

Strategy by Business Segment

Automotive BusinessBusiness Details

TOPICS

We provide plastic material forming equipment, processing machines, assembly and inspection equipment, and otherequipment for the manufacturing processes of automotive body parts, electric powertrains,
and automotive electrical components. In recent years, we have been focusing on reducing
CO2 emissions in the manufacturing process and creating smart factories.
In the Japanese and Americas markets, we are riding the wave of strong sales of EHVs,
following investment in plastic processing machines, electric powertrains, andelectrification products, based on the concept of next-generation mobility. We are also
leading the Japanese market for the giga-casting technology that many OEMs and parts
suppliers aim to introduce. We will start to prepare sales systems for this equipment andrespond to other changes in manufacturing methods with overseas expansion in our sights.

Hajime Fujii

Executive Officer, General Manager,
Automotive Business Division

Strengths
Promotion of highly specialized projects in the fields of vehicle bodies, drives, and devices
Technical support through our extensive experience in engineering, including for capital investment inmachinery, control, assembly, and painting
A track record of transactions on a global scale with OEMs and mega-suppliers leading the automotive
industry
Presence of reliable business partners

Business Environment
Positive factors

Negative factors

Expansion of carbon neutrality-related investment
Expanding investment in electrification products
Expanding demand for power devices due to the
spread of electrification products

Shrinking share of the Chinese market held byJapanese automakers
Delayed expansion into the electrification market
by internal combustion engine manufacturers
High barriers to entry into semiconductor-related
businesses

Addressing the accelerating market for electric vehicles
The automotive industry is undergoing dramatic
structural changes amid the worldwide push forcarbon neutrality. The global share of electric vehicles
is forecast to expand rapidly over the next decade.
This is expected to lead to a rapid expansion indemand for electrification products.
Especially vigorous growth is anticipated in theelectric powertrain field due to the spread of electricvehicles. We have strategically pursued initiatives forvarious next-generation key products based on theconcept of next-generation mobility since the time ofthe previous medium-term business plan FACE2021.
In the motor and inverter fields, in particular, wehave already received orders for production
equipment from major customers, and we haveestablished equipment sales and support systems inadvance of the future launch of full-scale mass
production by automotive parts manufacturers.
Going forward, we will pursue sales based on thetheme of “giga-casting” in the context of demand forcost reductions, shorter manufacturing processes, andmore efficient production of electric vehicles. We will
engage in activities to capture full-turnkey orders,
including for auxiliary equipment for the diecastingmachines that we already sell.
We perceive the automotive industry’s transition to
new production methods associated with carbon
neutrality as a business opportunity, and we willcontinue to support the development of theautomotive industry.

Review of the First Year of MT2024
Business Overview

Initiatives in V2030 and MT2024

Vehicle bodyarea
Flexible vehicle body assembly
process
Initiatives for next-generation vehicle
interior space items
Adaptation to multi-materials for vehicle body weight reduction
Capturing demand for renewal of large
injection molding machines (fromhydraulic to electric) in line with thepromotion of carbon neutrality

37

DAIICHI JITSUGYO CO., LTD.

Driver area
Drive motors: enhance engineeringfunctions in the manufacturing process
Inverters: strengthen proposals for all
inverter processes, including thermal
management
Batteries: initiatives related to batteries manufactured by the automotive
industry
Initiatives for essential products associated with electrification (e.g., electriccompressors and water pumps)

Device area
Autonomous driving: develop commercial products targeting related
products
In-vehicle semiconductors: initiatives insemiconductor front-end processes,
where demand is increasing due toelectrification and autonomous driving
Thermal management: initiatives forthermal management, which will
become important with electrification(in cooperation with the driver area)

Leveraged the advantages of our sales record tocapture investment in carbon neutrality and powerdevices
Orders associated with electric powertrain
investment projects were strong due to customers’high regard for our engineering functions
Succeeded in entering vehicle assembly processes
and are working to expand orders throughproposals using a broader range of potential
manufacturers
Progressively selling China-made conveyors for EV
production lines, but full-scale investment is still in
the future
Continued to develop new partner companies forsemiconductor manufacturing equipment andinspection equipment
Steadily accumulated orders in the market for
in-vehicle power semiconductors and progressing
with the development of the autonomous driving
marketNet Sales / Operating Income (Millions of yen)
Net sales

Operating income / loss

33,20031,45932,80027,000

819

1,223

979

909

0

FY2022 Targets

FY2022 Results

FY2023 Targets

FY2024 Targets

MT2024

DJK Report 2023

38

Outline

Value Creation Strategies

Sustainability Strategies to Support Value Creation

Data Section

Strategy by Business Segment

Healthcare BusinessBusiness Details

TOPICSWe are engaged in a range of activities in the healthcare field, from the sale of tablet visual inspection
machines, packaging machines, and other production equipment to production
line engineering and product development.
We make maximum use of the unique know-how we have developed in thepharmaceuticals manufacturing field, as well as advanced technologies such as DX andAI, to pioneer new fields including health foods, cosmetics, and regenerative medicine.
As a global provider of seamless health services, we contribute to human health bysupporting healthcare-related companies around the world to dramatically increase
productivity and quality.
Executive Officer, General Manager,

Katsuhisa Kouzuki Healthcare Business Division
Strengths

Development, manufacturing, sales, and after-sales service are all provided by the DJK Group
Maintained the top share of the tablet visual inspection system industry for more than 40 years
Solid customer base as a basis for development and sales in the healthcare area
Engineering system specializing in equipment (surveys and proposals on everything from the combination ofeach process to operational methods)

Providing IT engineering services to support the achievement of Pharma 4.0
Medical products such as pharmaceuticals, medical
equipment, and regenerative medicine are special
products that affect human life, and their manufactureis stringently regulated.
The International Society for PharmaceuticalEngineering (ISPE) has proposed the idea of Pharma
4.0, the pharmaceutical version of Industry 4.0, to
promote the shift of pharmaceutical manufacturing tosmart factories while maintaining compliance withthese stringent regulations. The reality, however, isthat, hampered by regulation, the digitalization ofpharmaceutical factories is lagging a long way behind
other industries.
In addition to leveraging our expertise in theengineering of production equipment, we haverecently undertaken engineering in the IT domain, toassist our customers in the pharmaceutical industry toachieve Pharma 4.0.
We provide various solutions that combine a highlevel of quality control with improved operation, suchas production data collection systems for thecollection and centralized management of important
product quality data from production equipment, data
integrity systems to digitally achieve data integrity,and biometric security systems to ensure the identityof workers for important tasks.
We leverage the strength of our extensive
knowledge of pharmaceutical production equipment
and related regulations to support the mission ofpharmaceutical companies to deliver safe and securedrugs to patients through IT engineering.

Business Environment
Positive factors

Negative factors

Rising demand for automation resulting from labor
shortages
Increased health consciousness due to higher living
standards
Rising willingness to make investments associatedwith the use of digital technologies and DX
promotion

Stagnant growth in the Japanese pharmaceuticals
market resulting from government policies toreduce drug prices due to the decreasing birthrate
and aging population
Pressure on profits due to the soaring prices ofpharmaceutical ingredients and an increase incompanies curbing capital investment
Downturn in special demand for equipment due tothe alleviation of supply shortages for genericpharmaceuticals© COPA-DATA© Nymi, Inc.

Review of the First Year of MT2024
Business Overview

Initiatives in V2030 and MT2024

Daiichi Jitsugyo
Viswill business
Expansion of inspection target area(other industries/products for otherprocesses)
Utilize inspection information as an
asset and develop new business (AIinspection, etc.)
Overseas market development

39

DAIICHI JITSUGYO CO., LTD.

Engineering
Planning and proposal of production lines that
dramatically improve productivity and quality
Development of business from sales of individual packaging machines to packaging line
coordination through planning and proposalof both sales and maintenance services
Developing new industries, new processes,
and new commercial rights through the application of previous planning and proposals
Expansion of digital platform business throughDX elements
Entry into the field of in-factory logistics

Life sciences
Development of new processes in
the field of regenerative medicine
Investment in equipment and technology development in line withthe proliferation of new modalities
Expansion into European and U.S.
markets[Daiichi Jitsugyo Viswill business]
Launched product development using the dual approach of expanding
inspection target areas and utilizing information assets, achieving greater
clarity on the issues that face us
Pushed ahead with the restructuring of sales networks utilizing both DJK’s
global network and sales agents for overseas market development andsuccessfully captured new project orders in Europe[Engineering]
Received orders for several large projects thanks to the success of ourplanning and proposal activities for packaging processes
Project management is our main issue going forward, as we strive toestablish solid production processes for our project orders[Life sciences]
Development of processes in the field of regenerative medicine progressedsmoothly and there was also an increase in actual projects. Took anotherstep from the development stage toward commercialization
Overseas market development is progressing, mainly in Europe and the U.S.

Net Sales / Operating Income (Millions of yen)
Net sales

Operating income / loss
17,000

11,1001,066

11,43512,300
1,192

1,276

946

0

FY2022 Targets

FY2022 Results

FY2023 Targets

FY2024 Targets

MT2024

DJK Report 2023

40

Outline

Value Creation Strategies

Sustainability Strategies to Support Value Creation

Data Section

Strategy by Business Segment

Aviation & Social Infrastructure BusinessBusiness Details

TOPICSIn the aviation and airport field, we mainly provide ground support equipment for aircraft and various related
equipment, and in the disaster preparedness field, we mainly provide specialized
vehicles and various related equipment.
As an important supporter of public infrastructure, including aviation, we promote
innovation in the aviation industry and provide highly efficient, high-value-added
equipment and services. Through the provision of these products and services, we
support people’s safe and secure lives, contribute to the realization of a sustainable
society, and aim to be the only one of its kind.
General Manager, Aviation & Social

Kei Yasuhira Infrastructure Division
Strengths

High recognition in the aviation industry and strong customer baseStrong business partners and their networks
Extensive track record for delivery in government projects
Knowledge accumulated through many years of experience by our in-house service department

Business Environment
Positive factors

Negative factors

Trend toward personnel and labor savings andautomation due to soaring personnel expenses andlabor shortages
Recovery of inbound demand
Investments in decarbonization
Increase in defense budgets

Limited and conservative market; relatively small
market scale as a niche field
Instability of the industry, which is susceptible toexternal factors
Supply chain problems (increasing costs, longer
delivery times)

Transfer belt systems that contribute to reducing workforce and workload in ground support operations
Loading and unloading baggage and cargo onto and
off aircraft can be a difficult task in which a large
number of heavy items are handled manually in ashort period of time in a harsh environment. On theother side of the walls and floors of baggage claim
rooms, ground support staff handle the luggage fromairline flights. In this business, we have continued toengage in various initiatives over many years, aimed atachieving personnel and labor savings and automationof baggage handling.
The transfer belt systems manufactured by Power
Stow of Denmark, part of these initiatives, aremachines that support the work of placing each itemof baggage unloaded from an aircraft on the receiving
conveyer belt.
Each airliner holds several hundred items of checkedbaggage, some of which may weigh over 30 kg.
International flights place an especially high burden
on workers, as it is necessary to handle a high volumeof large and heavy items in a short period of time.
However, this work represents an indispensable
service for airline users.
Transfer belt systems reduce the burden of manual
work, contributing to a reduction in workforce andworkload and an improvement in work efficiency andthe labor environment. Through these systems, we will
support the ground support staff responsible forworking behind the scenes to ensure that passengers
enjoy a comfortable flight.

Review of the First Year of MT2024
Business Overview

Initiatives in V2030 and MT2024

Net Sales / Operating Income (Millions of yen)Orders were brisk due to the resumption of capital
investment by airlines, as the recovery from the
COVID-19 pandemic became clear

New businessAirports and aviation

Disaster preparedness

Customer support (CS)

Aggressive development of
new products such as
workload and workforcereducing, unmanned, andautomated items
Adding high value to existing items and adding new
functions
Provision of high valueadded services

Nationwide expansion ofequipment for general roaduse
Expansion of securityrelated equipment to otherindustries

Investment in failure diagnosis AI systems
Proposal for ground support equipment equippedwith image recognition AI
system and deployment inother specialized vehicles

41

DAIICHI JITSUGYO CO., LTD.

Implementation of feasibility study of wind power
generation and proposal ofsmart energy storage
systemNet sales

4,000

2,800

2,700

Interest in proposals related to workforce andworkload reduction and automation rose markedly
due to the impact of the COVID-19 pandemic
Supply chain problems due to wars and otherfactors resulted in soaring purchasing costs andlonger delivery times

Operating income / loss

2,518

213

42

0

FY2022 Targets

15

45

FY2022 Results

FY2023 Targets

FY2024 Targets

MT2024

DJK Report 2023

42

Outline

Value Creation Strategies

Sustainability Strategies to Support Value Creation

Data Section

Overview by Region

China

Kanji Kubota

Asia

Masao Hiwatari (Executive Officer, DAIICHI JITSUGYO CO., LTD.)

Keisuke Nishii (Executive Officer, DAIICHI JITSUGYO CO., LTD.)

Strengthening our initiatives forenvironment-related equipment

Strengthening our system to respond tothe vigorous Indian market

A downturn in real estate markets has sparked aslowdown across the entire economy. This has been
compounded by issues such as personnel
shortages, a deterioration in the employment rate
among young people, soaring personnel expenses,
a slump in consumption, and tighter environmental
regulation. Even in these conditions, somecompanies are achieving earnings growth, and it isimportant that we follow these growing companies.
We will continue to develop into an organization
with engineering capabilities, as we have set forth
under our medium-term business plan MT2024, and we
aim to expand our business with Chinese companies.
We will also work to further expand our businessscale by handling environment-related equipment as
an ESG initiative across all business divisions.

Our performance in the first fiscal year of themedium-term business plan MT2024 was driven byvigorous investment in automotive-related markets.
The Electronics Business also performed strongly
due to an increase in projects to transfer production
away from China.
Business conditions have deteriorated this fiscal
year, impacted by inventory adjustments for
smartphones, PCs, home gaming-related and otherproducts, as well as a sense of uncertainty over the
Chinese economy. However, business remains brisk
in some industries, such as those related toautomobiles and air conditioning. In the Indian
market, especially, we are working to strengthen oursystem to respond to vigorous investment.

Strengthening sales and support throughthe establishment of the US’s Engineering
Department and new bases

President, SHANGHAI YISHI TRADING CO., LTD.
(Senior Executive Officer, DAIICHI JITSUGYO CO., LTD.)

Focus Fields and Initiatives

Managing Director, DAIICHI JITSUGYO ASIA PTE. LTD.

Focus Fields and Initiatives

strengthen efforts to catch up
with companies relocatingproduction bases from China toSouth Asia and Mexico

Electronics:

promote LOGITO related businesses
that match the characteristics ofeach country and strengthen
semiconductor related businesses

Automotive:

cultivate Chinese automotive
parts manufacturers

Industrial Machineryand Automotive:

Industrial Machinery:

expand sales of vacuum
thermoforming machines byeffectively utilizing the TechnicalCenterexpand business with foreign andlocal companies by enhancing
engineering functions

Plant & Energy:

collaborate with local companies,
mainly in Thailand and Vietnam,
under the theme of decarbonization

Plant & Energy:

strengthen sales promotion of
decarbonization and environmentrelated equipment

Healthcare:

cultivate the pharmaceuticalindustry in India and the ASEAN
regionEnergy Solutions:

expand sales of products ofChinese equipment manufacturers
in Europe and Asia

Other:

aim to expand each business inIndia by bolstering personnel and
bases

5,625
18%

30,581
37%

19,10863%(Millions of yen)

1,046
4%

1,218
4%

705
2%

2,067
7%
2,552
8%

3,735
12%

30,121
36%

16,053
53%

7,688
26%

EuropeIraka Aoki

Managing Director, DJK EUROPE GMBH

Further expanding EV- and battery-related
businesses
Europe’s economy has held up well, despite
suffering from the invasion of Ukraine and theenergy crisis. Our Europe subsidiary achieved its
highest-ever profit in the first fiscal year of themedium-term business plan MT2024, substantially
due to growth in the EV- and battery-related
businesses.
The lifting of travel restrictions saw a revitalizationof investment in the European market, as well as anincrease in development themes. Our portfolio
balance is progressively improving and we aim tocontinue to strengthen our system and expand ourbusinesses to achieve the targets set forth underthe medium-term business plan MT2024 and theV2030 growth strategy.

Our core Automotive, Electronics, Energy Solutions,and Plant & Energy businesses all performedsmoothly in the first fiscal year of the medium-termbusiness plan MT2024. In addition, we were able tocapture orders for large-scale coating equipment in
the Industrial Machinery Business in Mexico.
This fiscal year, we will focus on anticipatedcapital investment in areas such as automatedassembly lines for key EV components in the
Automotive Business, large-scale furnace projects
for LIB materials in the Energy Solutions Business,
mounting equipment for in-vehicle components inthe Electronics Business, and automated assemblylines for medical equipment in the Industrial
Machinery Business.

Focus Fields and Initiatives

Energy Solutions:establish a new sales and service
base in Austin, Texas, in the U.S. tobolster customer support and sales
expansion

Energy Solutions:cultivate manufacturers of products
related to anode materials and allsolid-state batteries

Automotive:

establish a new sales office in
Lexington, Kentucky, in the U.S. tobolster customer support and sales
expansion

Aviation & Social
Infrastructure:

cultivate new products to meetthe demand for electrification inJapan

Industrial Machinery:sales of automated machines tomajor global medical equipment
companies are growing rapidly inthe healthcare and pharmaceuticals
field. We will revise our productlineup for the pharmaceuticals field

Automotive:

expand sales of next-generation
component manufacturing
equipment and develop businessproposals to European
automakers

Other:

recruit engineers in Tijuana, Mexico to
expand our business region. We
established the Engineering Department
at our U.S. subsidiary in April 2023

Electronics:

expand into the MENA region andattempt front end engineering
design

60
0%

892
3%

13,701
17%(Millions of yen)

Pie chart / Left: overseas sales and ratio (destination basis) Right: area segment sales and ratio
DAIICHI JITSUGYO CO., LTD.

President, DAIICHI JITSUGYO (AMERICA), INC.

Focus Fields and Initiatives

Electronics:

9
0%

43

Americas

79
1%

9,843
72%

975
7%

1,290
170
10%
1%
1,282
%
9

225
3%

7,942
10%

(Millions of yen)

Plant & Energy Business

Energy Solutions Business

56
1%

97
1%

292
4%

940
12%

6,329
79%
(Millions of yen)

Industrial Machinery BusinessElectronics Business

Automotive Business

Healthcare Business

Aviation & Social Infrastructure Business

DJK Report 2023

44

Outline

Value Creation Strategies

Sustainability Strategies to Support Value Creation

Data Section

Special Feature

Transforming into the Next-generation
Engineering Trading Firm

under the umbrella of the Engineering Center. The
Engineering Division gathers together the engineers
previously scattered between each business division toform a group-wide integrated organization of engineers.
It will engage in activities such as the selection andenhancement of resources required to improve theinternal technical infrastructure and carry out business
operations. Moreover, through coordination with thesales divisions, it will provide technical support for theadministration of project orders.

Structure of the Engineering Division
Engineering Division

Engineering Center

DAIICHI MECHA-TECH
CORPORATIONDAIICHI ENGINEERING
CO., LTD.

Officer in Charge
Director, Managing Executive Officer
Executive Officer
General Manager of the Engineering Division

Supervising General Manager

Yasushi Marumoto Managing Executive Officer
Director,

Strengthening engineering functions is our most important theme as we strive to achieve our vision to
become the next-generation engineering trading firm.
In April 2023, we established the Engineering Division to handle the increase in overseas projects andmeet even higher technical demands.
We will collaborate with engineers, promote information sharing and skill enhancement, andaccelerate our efforts to bolster the engineering team and upgrade infrastructure to strengthen our
on-site responsiveness.

Boosting our Project Management Capacity and Strengthening our Engineering Functions
Until now, we have mainly engaged in providing
technical services incidental to the sale of machinery,ranging, for example, from the coordination of multiple
units of equipment to post-installation after-sales
service. These achievements have been highly
regarded, and we have been involved in theestablishment of production sites as our customers
expand overseas. Many of our engineers now support
production bases both in Japan and overseas.
In recent years, with the increasing scale, complexity,
and sophistication of projects, we have augmented ourtechnical resources to meet the needs of ourcustomers and boosted our project management
capacity, including health and safety management. We
also focus on technical support for manufacturing,

engineering requiring specialized knowledge, improving
the yield of production lines, and other solution
proposals linked to resolving production site issues, as
we strive to strengthen our engineering functions.
In an increasing number of cases, the technicaladvice and recommendations that we actively provide
to our suppliers and partner companies enable themto gain hints for their product and technicaldevelopment. We firmly believe that raising our total
coordination capacity for technical support by
structuring production lines with the optimal
combination of equipment to function to the highest
level while also achieving energy savings, will alsoenable us to strengthen our own engineering functions.

The Engineering Division: an Integrated Organization of Engineers
We established the Engineering Center in April 2021,
providing all process management, from customers’consideration of the introduction of equipment toproduction support to the procurement, delivery,
installation, and stable operation of this equipment.
Through these activities, we have succeeded in
capturing orders for an increasing number of projects
in the Energy Solutions Business and Industrial
Machinery Business, with many of our engineers

45

DAIICHI JITSUGYO CO., LTD.

participating in projects in Japan and overseas. In areas
such as lithium-ion battery manufacturing processes
and automotive painting lines, especially, close
examination by our engineers and their expert
judgment has enabled us to implement risk
management, including work safety and legal andregulatory compliance, supporting orders.
In April 2023, we established the Engineering
Division as an operating unit for technical services

Engineering 1st
Department

Engineering 2nd
Department

Sales Engineering
Department

Customer Service
Department

Project Planning
Department

Engineering

Recruiting Highly Specialized Human Resources and Constructing Training Systems Adaptable to Diverse Business Fields
We have gathered the engineers who were previously
scattered between the various business divisions toestablish a team of approximately 70 engineers, atpresent, as an integrated organization of engineers toprovide technical services. Going forward, we plan tofurther boost human resources for immediate
deployment, with the Engineering Division taking aleading role in recruitment, in coordination with eachbusiness division. We plan to utilize our existing
personal networks to secure outstanding talent,
actively recruiting engineers closely familiar with major
engineering firms and each industry.
Regarding training, we will structure a curriculumthat is flexible enough to adapt to a range of different
business fields, with a focus on passing on andcontinuing technical expertise. We also face the urgent
tasks of introducing a personnel evaluation system toaccurately evaluate our engineers, enabling them tomake full use of their abilities, and creating
mechanisms that enable our engineers to map out adiverse range of career paths in line with theiraptitudes. We have already started discussing thesetasks with the relevant divisions.

Number of Engineers by Area of Specialization
Mechanical:

24

Electrical:

15

Construction:

15

CS:

12

Other:

17

Strengthening Cooperation with Group Companies in Japan and Overseas to Provide Our One-of-a-kind Technical Services Globally
Going forward, the Engineering Division will leadstronger cooperation with DAIICHI MECHA-TECH andDAIICHI ENGINEERING under the umbrella of theEngineering Center. We will build mechanisms toenable complementarity between these organizations
based on the various characteristics of each. This will
include the recruitment and training of humanresources. We will also actively engage in humanresource exchange and other initiatives between
Group companies and endeavor to boost the standardof engineering capacity across the entire DJK Group.
Wave Engineering Corporation joined the Group in July
2023. We aim to integrate Wave Engineering’s
outstanding strength in simulation engineering with theGroup’s plant engineering capabilities. We expect thisto lead to stronger engineering capabilities.
Meanwhile, overseas, we have hired many local
engineers in China and Southeast Asia and are alreadyproviding technical services. Going forward, theEngineering Division will coordinate with engineers
belonging to the overseas bases of Group companies
to provide one-of-a-kind technical services. In Europe
and the United States, specifically, we will address theincrease in production of lithium-ion batteries
associated with the trend toward electric vehicles todevelop this business as a focus area.
As an integrator, our engineering capabilities take adifferent approach to those of a conventional
engineering company or EPC contractor. These
capabilities, in combination with the trading company
function that we have developed over DJK’s 75-year
history, will enable us to connect people andtechnologies, advancing toward our goal to become
the next-generation engineering trading firm that
contributes to manufacturing around the world.

DJK Report 2023

46