Annual Report 2019
Takamiya Co., Ltd.

KEEPTRANSFORMING
50th
Anniversary

In April 2019, the Company changed its trade name to Takamiya Co., Ltd.
In addition, in June 2019, we celebrated the 50th Anniversary of ourestablishment, thanks to the kind support of our stakeholders.
We would like to express our sincere gratitude to our investors andstakeholders for their kind support in making this possible.
We are currently addressing various challenges under the theme of“transformation,” based on our Medium-Term Management Plan.
This Annual Report provides a description of our initiatives aimed
at becoming a corporate group that achieves new value, along withmessages from our executives and employees.
We hope that you read this report and gain an improved understanding
and expectations regarding the progress of the “transformation” of theCompany.

Corporate Philosophy(Mission Statement)“Love”

Weatherproof
pipe houses

Oct-brace“Iq System”
next-generation
scaffolding

2018 Medium-Term Management Plan
Vision“Create new value through transformation and aim
to become a corporate group that drive qualitative developmentof the industry”

H2 System

VMAX

WUTEC

SPIDER
PANEL

G-Castle series

Contents
Value Creation Story
History of Taking on New Challenges
Takamiya Now
Takamiya’s Value Creation Process
Business Environment and Takamiya’s Strategy

2
2
4
6
8

Financial and Non-financial Highlights

10

Growth Strategy
Message from the President and Chairman
Message from the CFO

12
12
18

Special Feature: Power to Drive Transformation

20

Strategies by Business
Sales Business
Rental Business
Overseas Business

24
24
26
28

Strengthening of the Management Foundations
Corporate GovernanceDirectors, Corporate Auditors and Executive Officers
Human Resource Strategy

30
30
35
36

Helping to Tackle Social Issues Through Our Business40

Our Main Products

42

Company Information

43

Disclaimer

Forward-looking statements concerning business forecasts, etc. contained in this report are based on information available at the time the forecasts
were made, as well as certain assumptions that were deemed reasonable. However, the Company makes no guarantee that these forecasts will beachieved. Actual business results, etc. may differ significantly from the forecasts, due to a variety of factors.

Annual Report 20191

Value Creation Story

History of Taking on New Challenges
Up to now, Takamiya has remained ahead of the changing times byadopting a long-term perspective, and continued to take on a variety of challenges.
In this section, we introduce our strategic shifts in anticipation of changes
in the business environment as well as major turning points in our business.

Company-wide

1974
1976
1987
2005
Start of initial
Introduction ofCompany name changed to
Listed on the JASDAQ Stock Exchange
computerization various proprietary SRG TAKAMIYAof accounting
systems, including
2002
2007
work
collection of the
Kazumasa Takamiya
Listed on the Second Section of the Tokyo Stock Exchange
basic fee at the time
appointed as President
of product delivery

Business
Sales Business

1981
1988
Established theIntroduced a CAD system
Scaffolding System
Engineering Office(currently Cadian)

1974

EstablishedStarted therental business

1982
Commenced automationof the equipment centersEntered into the disasterprevention market

1983
Established an affiliate in Singapore(first overseas expansion in the scaffolding rental industry)

Overseas BusinessArchitectural construction work,
bridge construction work,urban civil construction work, etc.

2008
Introduced the mast climbing
work platform

Rental Business

1969

2010

Expanded into the
manufacturing andsales businessConverted Hory into a subsidiary

2010

Started thescaffolding
construction business
Established the Scaffolding
Construction Department
2010

Started full-scale
expansion of ouroverseas network
Converted Hory Korea
into a subsidiary

Strategic shifts in anticipation of changes in the business environment
Sales→Rental

Foundation
stage
The Company was
founded by several
persons, including
the founder, for the
purpose of purchasing
and sales of temporary
scaffolding.

2

Diversification stage
The Company shifted from a sales business to a rental business,in anticipation of the approaching “rental era.” We also expanded
into business domains outside of the rental business. In addition
to various “industry-first” systems and frameworks, we also
started initiatives to strengthen our management foundations,
including setting our Mission Statement of “Love,” issuing a rental
manual, and starting employee training.

Takamiya Co., Ltd.

Highways→Disaster prevention

Rental→Rental + Manufacturing and sales

New construction→Maintenance and repairs

Domestic focus→Global

Management foundation
development stage

Business modeltransformation stage

In 2002, Kazumasa Takamiya was appointed as President In 2010, the Company incorporated the(currently President and Chairman).
Hory Group into our group of subsidiaries,
In 2005, the Company began offering its shares publicly.
and acquired manufacturing functions
We entered into forward-looking businesses, including
and overseas offices.
disaster prevention as well as repairs and maintenance,
while developing our management foundations throughinitiatives such as the promotion of information disclosure.

2014
Headquarters moved to its current location (Grand Front Osaka)
Assigned to the First Section of the Tokyo Stock Exchange

201950th Anniversary of our establishment
Company name changed to Takamiya

2014 Medium-Term
Management Plan(FY March 2015 to FY March 2017）

2013
Started manufacturing and sales of
the Iq System, our next-generation
scaffolding

2015
Started sales ofagricultural
greenhouses

2016
Development of an anti-seismicand damping frame

Development and sales of
construction materials for housing
Development and sales ofsolar panel installation frame

2014
Started rentals of the Iq System,
our next-generation scaffolding

2013
Establishment of HORY VIETNAM
Started development and sales of
products for Japan and ASEAN

Old generation scaffolding→Next generation scaffolding

2018 Medium-Term
Management Plan(FY March 2019 to FY March 2021）

2018
Structure organized for the shift into
operations as a manufacture
Merged with Hory via absorption
Improvements to domestic production bases

2017Completed replacement of our domestic
conventional scaffoldings
to the Iq System, our next-generation
scaffolding

2015
Converted the overseas rental
company, DIMENSION-ALL
into a subsidiary

Focus on scaffolding→New domains (ex. agriculture business)

Preparation stage in anticipationof after Tokyo 2020
With the aim of revolutionizing the industry with scaffolding, we internally The Company conducted strategic upfront investments indeveloped a next-generation scaffolding and introduced it into the market. anticipation of changes in our business environment after
the Tokyo 2020 Olympic and Paralympic Games, including
We established the Scaffolding Construction Department. By carrying
the replacement of domestic conventional scaffoldings toout scaffolding construction in-house, we simultaneously responded tonext-generation scaffoldings, creation of a next-generationa manpower shortage and promoted our next-generation scaffolding.
scaffolding market, improvements to our managementfoundations, and entry into new domains (such as theWe also created the foundations for overseas business expansion,
agriculture business).
including the acquisition of DIMENSION-ALL (a scaffolding company in
the Philippines) in 2015.

Things→Things + Frameworks

Transformation promotion stage
We will gain returns on the investments made in
the previous Medium-Term Management Plan,
and continue with investments for growth such as thecreation of new frameworks, the development ofhigh value-added products and services, and thefull-scale deployment of our overseas business.
In addition, we will efficiently use our management
resources (human resources, assets, funds andinformation) to promote transformation in all areas
for the sustainable improvement of our corporate value.

Annual Report 20193

Value Creation Story

Takamiya Now
Takamiya supports a variety of worksites by providing total support ranging from development and manufacturing tosales, rental, and construction, as a specialist in light-duty temporary equipment and materials. Furthermore, throughtechnological innovation, we contribute to the development of the industry by improving safety and workability with
our high value-added products and services.

Business Characteristics

Takamiya in Numbers•Business development with a long-term view
•Expanding strengths fostered through the temporary equipment business
into other domains and areas

Core business

Agriculture Business[Main customers]•Agricultural workers•JA Group

Manufacturing, sales,
and rental of light-duty
temporary equipment andmaterials in Japan[Main customers]

Growth businesses

Development,
manufacturing andsales of products in
new domains(Structural equipment(ex. damping devices))[Main customers]•Construction companies•Home builders•Major construction companies•Bridge construction companies•Regional construction companies•Scaffolding construction
companies(FY March 2019)*Figures in the parentheses are
year-on-year changes.

Net sales¥

42.1

billion(up↑

Operating income¥

2.7

billion(up↑

Manufacturing, sales,
and rental of light-duty
temporary equipment andmaterials overseas

26.0[Main customers]

%

(up↑

Global network

Overseas•Consolidated subsidiaries: 7 companies•Branches and sales offices: 20 locations•Factories:
2 locations•Equipment centers:
29 locations•DIMENSION-ALL(Philippines: sales and rental)

1.0 point)

Number of employees•Hory Korea(South Korea: manufacturing and sales)•HORY VIETNAM(Vietnam: manufacturing and sales)•Cadian Vietnam (non-consolidated)(CAD drafting, sales and rental)(As of March 31, 2019)60.5%)

Equity ratio•Construction companies in Asia
•Scaffolding construction
companies in Asia

Japan

16.8%)

1,204(up↑

60 employees)(As of March 31, 2019)

Light-duty Temporary Equipment and Materials
Much of the equipment and materials used at construction sites is rented. Among these, the Takamiya Group specializes inproviding light-duty temporary equipment and materials, including scaffolding erected for use by workers during construction.

4

Takamiya Co., Ltd.

Work Scaffolding

Falsework

Suspended Scaffolding

Scaffolding primarily
set up around theexterior walls ofbuildings

Used to support heavyloads in buildings andcivil engineering works
such as bridges

Scaffolding suspended
for use in inspections,repairs and other workfor road bridges

In addition, we will deploy the strengths we have fostered thus far into new businesses such as the agriculture business,and in overseas business in locations such as Southeast Asia, as we develop the businesses that will drive our future
growth.

Corporate Culture (corporate mind)
Farsightedness

Positive attitude

The ability to anticipate changes in thebusiness environment and customer
needs from a long-term perspective

Taking on challenges with courage andinnovative thinking

Strengths We Have FosteredExpertise in scaffolding and human resourcesHigh level of technological capabilities

Our strengths include expertise in scaffolding,along with personnel who offer this expertise.
We have developed these strengths by
operating in a wide range of business areas,
including construction sites, landslide prevention
work, renovation of high-rise condominiums,
and bridges. Our list of products and services isalso rich in variety and stands as the finest in
the industry.

The Company has a technical team ofscaffolding professionals that is highly regarded
by our customers for its ability to accurately
respond to the situation and needs of each
worksite. In addition, because we possess
outstanding metal processing technologies and
CAD drafting technologies related toscaffolding, we are capable of applying thisexpertise to a broad range of areas, including
structural equipment.

Synergies of our five functions
We have established a structure that is capable of one-stop support, ranging from temporary equipment work
planning, to drafting, making arrangements for equipment and materials, scaffolding construction, and safety
management throughout Japan, by leveraging our five functions related to temporary equipment and materials.
We are able to cover various construction worksites ranging from underground construction to ultra-high-risebuildings, highways, bridges and natural disaster countermeasures.
SupplyCAD drafting

Information

Development andmanufacturing
SupplyExamples of synergies
among our functions
Development andmanufacturing

SupplySales

Information

Information

Information

Promotion

Scaffolding
construction

RentalSales

RentalWe produce most major equipment and materials
in-house, while our rental business purchases a certain
amount of assets for rental. We secure stable production
and offer cost advantages through such initiatives.
In addition, information from customers and partnercompanies in both sales and rental businesses is sharedwith development and manufacturing, and utilized in
product development and business strategies.

Development andmanufacturing

Scaffolding
construction

Sales

By preferentially introducing our own new products,
such as the Iq System, at construction worksites, weare able to promote new products, which leads tosales. In addition, this enables us to incorporate
feedback from these worksites into the development of
future products.

Annual Report 20195

Value Creation Story

Takamiya’s Value Creation Process
Takamiya has remained ahead of the changing times, and transformed its business portfolio and frameworks. By
creating products and services through a future-oriented business model, we aim to contribute to the creation of abetter society, and achieve our mission and vision.

Business Model

Input

Internal capital•Human capital•Technological capabilities andknow-how•Global manufacturing sites•Equipment centers and sales
offices throughout Japan andoverseas•Stable financial capital

Originality and superiority

Expertise inscaffolding andhuman resources

Synergies of our
five functions

High level oftechnologicalcapabilities

Engagement withstakeholders including
investors

Staying ahead of changes
in the business environmentand social issues

Based on our projections regarding the business environment, as
well as engagement with stakeholders, we have formulated
medium-term management plans that draw pictures of the
future as it should be (target goals), based on our hopes
for the Company (future vision). By repeating a cycleof making preparations (investments) during theprevious management plan and gaining
returns on these investments during the
Future vision
current management plan, while
Back-casting
simultaneously preparing for
future growth, we will continue
to transform our businessportfolio andTargetframeworks in ordergoals
to create value.

Current
stateContinuous transformation of
our business portfolio
and frameworks

External capital•Customer base•Partner base•Social trust and reputationnt
Upfro nts
tme
inves

nt
Upfro nts
tme
inves
n on
Retur enttm
inves
Previous
Medium-Term
Management Plan

nt
Upfro nts
tme
inves
n on
Retur enttm
inves

Current
Medium-Term
Management Plan

nt
Upfro nts
e
tm
s
e
inv
on
n
r
Retu
t
tmen
inves

Next
Medium-Term
Management Plan

nt
Upfro nts
e
tm
s
e
inv
n on
Retur ent
tm
s
e
inv

Medium-Term
Management Plan

nt
Upfro nts
tme
s
e
v
in
n on
Retur ent
tm
s
e
v
in

Medium-Term
Management Plan

Incorporating outcomes into our strengths

6

Takamiya Co., Ltd.

By repeating this process, we will further refine our advantages and achieve the sustainable improvement of ourcorporate value, while taking on the challenge of resolving more social issues.

OutputOutcomes

Provision of products andservices that match andanticipate changes in customer
needs and the market

Creation of economic value
Sustainable profit growth

Achievement of
our Mission
and Vision

Sustainable and stable
returns to shareholders

Creation of social value

SafetyEnvironment Workability

See “Helping to Tackle Social Issues
Through Our Business” and “OurMain Products” on pp. 40-42.

Improving the qualityof the construction industry
Safe and efficient worksites

Effective use of resources

Provision of products requiredby customers at the required
location and with the required
timingLowering the cost andimproving the productivityof agriculture
Disaster prevention
and mitigation

Creation of new value andframeworks

High-quality corporate activities

Contributing to economic
development in areas
such as ASEAN
Development of humanresources capable ofsupporting sustainable growth

See “Corporate Governance”
on pp.30-34.

and continuously improving corporate value

Annual Report 20197

Value Creation Story

Business Environment and Takamiya’s Strategy
Based on our understanding of the medium-term business environment in Japan and overseas, as well as theopportunities and risks present for Takamiya, we are leveraging the strengths we have fostered since our founding
and the achievements from preparations made in the previous Medium-Term Management Plan, as we implement
the 2018 Medium-Term Management Plan.

Opportunities for
Takamiya
Japan

Business
environmentand social issues
Japan•Tokyo 2020*1 and Expo 2025
Osaka, Kansai*2 leading to a boom
in demand for construction and asubsequent slowdown•Deterioration of domestic housing
and social infrastructure•Declining birthrate and an aging
population•Decline in the number ofagricultural workers, and theaging thereof

Asia•Growth of the Asian economy

Global•Frequent occurrence andincreasing magnitude of natural
disasters•Climate change and the depletionof natural resources•Diversification of and fluctuations
in risks•Technical innovation•Increasingly borderless society*1 Tokyo 2020 Olympic and Paralympic Games*2 2025 Japan World Expo

8

Takamiya Co., Ltd.

•Increase in deals including
construction•Maintenance and repair needs forhousing and infrastructure•Needs for productivity improvements
at construction worksites, etc.
•More stringent safety standards atworksites•Needs for quality and productivity
improvements in agriculture•Needs for disaster prevention, disastermitigation and weatherproofing

Asia

Strengths we havefostered since
our founding

Expertise in scaffolding andhuman resourcesHigh level of technologicalcapabilities•Increase in deals including construction

Common in Japan and overseas•Partnerships•Needs for high value-added products
and services•Needs for productivity improvements
utilizing AI and IoT, etc.

Risks for Takamiya
Japan•Intensifying competition•Delay in development of product andservice differentiation•Competitors becoming the de facto
standard•Changes in rules and standards•Increases in material and personnel
costs•Long-term slowdown of construction
demand•Labor shortage

Synergies among ourfunctions and networks

Preparation up to theprevious Medium-Term
Management Plan in
anticipation of changes

Creation of a next-generation
scaffolding market(Completed the replacement ofdomestic assets for rental)

Asia•Increases in material and personnel
costs•Accidents at worksites, etc.
•Changes in policies

New entry into theagriculture businessCommon in Japan and overseas•Environmental pollution andgreenhouse gas emissions

Improvements in overseas
locations and businesses

By pursuing measures in accordance with our basic policies and investment policies, while also responding to key ESG
issues, we aim to achieve our performance targets and realize a transformation of our business foundations.

2018 Medium-Term Management Plan(FY March 2019 – FY March 2021)

VisionAchievements ofperformance targets

Create new value through transformation and aim
to become a corporate group that drive qualitative
development of the industry(Targets for the FY March 2021)

Basic policy

Investment policy

Drive innovationin the earnings base

Restrain investment inassets for rental in Japan

Create new growth businesses

Invest to raise the efficiencyof the equipment center

Accelerate overseas
business development

Invest to strengthen technology
development capabilities

Strengthen managementfoundations

Actively invest inoverseas business
Expand overseas
production bases

Net sales
OperatingincomeOperatingincome margin
Equity ratio

ROE

ROA

¥

50

billion4

billion

¥

8.0
30

%

%
or higher

10%
or higher

5.0%
or higher

Invest to foster human resources
and the work-style reform

Transformation of
our business foundations

Key ESG issues•Business model
Related SDGs

Focus on rental•Co-creation of social value
See “Helping to Tackle Social Issues
through Our Business“ on pp. 40-41.

•Maintaining and strengthening our managementfoundations to support sustainable value creation

Shift to becominga manufacturer
Provision offrameworks•Business area
Focus on theJapanese market

Developing the
Asian market

See “Human Resources Strategy” on pp. 36-39.

•Human resources•Contributing to a reduction inenvironmental impact

Fulfilling
instructions

Taking actions
on their own
Cooperation•Governance that enhances trust from society
See “Corporate Governance” on pp. 30-34.

Annual Report 20199

Financial and Non-Financial Highlights

Financial Highlights
Net sales

Operating income/Operating income margin

Ordinary income(¥ million)(¥ million)(%)(¥ million)

50,000

5,000

10

4,000

9.0
42,18240,00034,35034,261

36,763

8.7

3,325

4,000

36,1148
6.6

30,000

3,000

3,098

2,983
4.7

2,429
20,0002,000

10,000

1,000

0

16.3

17.3

18.3

19.3

Profit attributable to owners of parent

(¥)

50

2,000

1,690

2

0

15.3

46.17

(%)

10

29.26

20.8

15.3

16.3

17.3

18.3

19.3

ROE/ROA*4

18.5

16.3

17.3

18.3

19.3

(%)

(¥ million)

40

30,00052,813

5.8
5.0

4.5

23.5

23.4

25.0

26.0

17.3

18.3

19.3

18.3
19.3
Dividend payout ratio

29,497(%)

29,124

300

226.4
188.9

237.4

223.6

205.5

200

20

20,000100

10,000
10

0

0

16.3
ROA

29,287

21,635

30

3.1

0

0

20,000
26.3

9.8

20

26,63640,000

8.2

11.0

10

54,414

43,52012.0

552,76030

Interest-bearing debt/D/E ratio

60,000

12.6

11.0

10.0 10.0

15.3
16.3
17.3
Annual dividends per share(¥ million)

50,091
15

28.8

0

15.3

Total assets/Equity ratio

19.8

40

5

0

0

28.5

15

10

500

19.3

18.3

37.6
16.0

38.22

30

20

17.3

34.7
35.14

1,000

16.3

(¥)

1,637

1,516

15.3
ROE

0

20

1,252

10

1,000

Annual dividends per share*3/
Dividend payout ratio

48.12

40

1,500

20

1,610

4

2,153

2,070

2,662
2,337

6

Earnings per share (EPS)*2

2,500

(%)

2,731

15.3
16.3
17.3
18.3
19.3
Operating income
Operating income margin(¥ million)

2,000

2,713

0

15.3

3,000

6.4

15.3
16.3
17.3
18.3
Total assets
Equity ratio

19.3

0

0

15.3
16.3
17.3
18.3
19.3
Interest-bearing debt
D/E ratio(Notes) 1. Figures are rounded down to the nearest million yen. However, indices shown in ratios are rounded to the unit displayed.
2. The Company conducted two-for-one stock splits on January 1, 2015. Earnings per share is calculated by deeming stock splits to have occurred at the
beginning of the fiscal year ended March 31, 2015.
3. The dividend for the fiscal year ended March 31, 2015 included a commemorative dividend of ¥2.5 to commemorate the designation of our stock on theFirst Section of the Tokyo Stock Exchange.
4. ROA = Ordinary income / Average total assets
ROE = Profit attributable to owners of parent / Average equity

10

Takamiya Co., Ltd.

Non-Financial Highlights
Investments in assets for rental/
Depreciation

Numbers of employees/
Employees with foreign nationalities

Number of employees taking maternity or
childcare leave, or shorter hours for childcare(¥ million)(persons)(persons)

8,000

1,400

40

7,227
1,144
6,000

4,000

5,577

3,649

5,447
4,137

4,502

4,662

903

4,777

117

979

1,010

232

275

364

371

700

3,757

38

1,204

34
7

30

20

2,467

18
12

10

2,000

8
0

0

15.3
16.3
17.3
18.3
19.3
Investments in assets for rental
Depreciation

0

4

14
3
8
3

15
20

7
6

11

12
7

5

15.3
16.3
17.3
18.3
19.3
Numbers of employees
Employees with foreign nationalities

15.3
16.3
17.3
18.3
19.3
Maternity leave
Childcare leave
Shorter hours for childcare

Number of accidents (non-consolidated)

Number of Outside Directors/
Ratio of Outside Directors to all Directors(¥ million)(cases)(persons)

8,000

10

2

EBITDA*5

6,747

7,120

7,490

2

2

(%)

50

6,932
6,353

40

8

6,000

30

6
4,000

1

1

1

1
20

4
2,000

11

2

2

11

20

20

11
10

1
0

0

15.3

16.3

17.3

18.3

19.3

Cash flows

0

0

0

15.3

16.3

17.3

0

18.3

19.3

Average length of service(non-consolidated)(¥ million)(years)

8,000

10

1,925

4,000

Turnover rate (non-consolidated)*6
(%)

9.27

9.21

9.36

9.47

9.61

10

8

8

6

6

2,927

2,844

-1,620-1,081879
1,163-1,093-1,736-222-1,5634

4-4,000-3,1832

2

1,714-1,909-195

3,653-1,728

8.2

7.8

6.0

-1,243-2,817-8,000

15.3
16.3
17.3
Cash flows from operating activities
Cash flows from financing activities

7.7
6.6

70
0

0

15.3
16.3
17.3
18.3
19.3
Number of Outside Directors
Ratio of Outside Directors to all Directors

0

0

18.3
19.3
Cash flows from investing activities
Free cash flows

15.3

16.3

17.3

18.3

19.3

15.3

16.3

17.3

18.3

19.3

5. EBITDA = Operating income + Depreciation
6. Turnover rate = Number of regular employees who retired during the fiscal year / Number of regular employees at the beginning of the fiscal year

Annual Report 201911

Growth Strategy: Message from the President and Chairman

Continuing to Transformthe Group to Realize Our Vision
Kazumasa Takamiya
Representative Director, President and Chairman

Steadily transforming our businesswith a firm focus on the future
Our operating environment is undergoing rapid and dynamicchanges, almost unprecedented in scope. Drastic changes lie
ahead, such as the emergence of new industries that nobody
could have predicted. To respond to those developments andcontinue creating value, we have to transform every aspectof our business in a way that accurately anticipates the future
operating environment.
“Transform” is the central theme of our 2018 MediumTerm Management Plan, which was launched in April
2018. The theme expresses our determination to support
the qualitative development of our industry by constantly
renewing our business model in order to align the TakamiyaGroup with the changing times, without relying on existing

12

Takamiya Co., Ltd.

business approaches and earnings structures.
To mark the Company’s 50th anniversary, we have alsochanged our company name to Takamiya Co., Ltd., as thefirst step in transforming Takamiya into a completely new
corporate group.
The domestic market is firm at the moment, withconstruction demand likely to remain at a high level until the
Tokyo 2020 Olympic and Paralympic Games (Tokyo 2020).
However, we expect the temporary equipment market tosoften slightly beginning in 2020. Osaka has been selected
to host the World Expo in 2025 (Expo 2025 Osaka, Kansai,
Japan), but the economic impact is expected to be limited.
While demand related to public infrastructure improvements
is high, especially for expressway projects, securing sufficientpublic funding is an obstacle to some projects. The economy
is healthy at the moment, but the outlook is not that bright.

and sales functions) in 2010. Takamiya’s strength is its ability
to make high value-added products from the standpoint ofcustomers, drawing on feedback from customers about
their needs in the rental business. As the leading company
in the industry, we will continue to supply high value-added
products and services that shake up the market in order todrive far-reaching changes across the whole industry. We
also plan to reinforce our manufacturing capabilities andshift our focus away from the rental business to transform
Takamiya into a corporate group that provides innovative newvalue and solutions.
→See the Special Feature on pp. 20-23 for more details.

Strong business performance andlaying the foundations for the future
In the fiscal year ended March 2019, the first year of our 2018
Medium-Term Management Plan, sales and profits increased
year on year, exceeding the plan’s targets.
That strong performance was supported by growth in boththe sale and rental of the Iq System, as well as reductions
in manufacturing costs and progress with creating a reliablesupply system for temporary equipment rentals during peakdemand periods. Healthy sales of the Iq System to externalcustomers and record-high utilization rates in the rental
business made significant contributions to earnings. Also,
sales in the agriculture business more than doubled year
on year thanks to growing awareness of our track record in
the agriculture market. Meanwhile, we took active steps todevelop our temporary equipment manufacturing, sales andrental operations overseas, targeting strong construction
demand in the ASEAN region. Hory Korea Co., Ltd. reported
steady growth in sales, supported by a major new orderin the solar panel market. We also invested aggressively

190cm

Japan also faces challenges as it transitions to a maturesociety. As a growth society, Japan’s main focus was onstaying ahead of competitors, but it now needs to generate
added value and its industries have to move higher up thevalue chain.
At Takamiya, we have a track record of proactively
overhauling our businesses and adopting new approacheswith a firm focus on the future. Over the years, we havecarefully monitored trends in the operating environmentand constantly adapted our business, while also looking at
the bigger picture and seeking ways to drive change in ourconservative industry. Takamiya also has a reputation of trying
and persevering with approaches that nobody has attempted
before. That has been driven by a sense of urgency, reflecting
our concern that the industry will gradually die out if steps
are not taken to strengthen its position and raise standards. I
believe we have to create globally competitive conditions in
the industry by driving its transformation and by leading the
adoption of advanced technologies. It is vitally important that
we transform our whole industry with the best technologies,
services and people.
The Iq System of next-generation scaffolding is one
example of the lead we are taking. We have actively
introduced the Iq System, which has been well-received bycustomers, prompting other companies to launch their own
next-generation scaffolding. That has helped create a market
for safer, more efficient scaffolding. In April 2019 we also
adjusted Iq System pricing. As the price leader in the industry,
we are aiming to set prices at a fairer level. Our goal is tocreate a more stable profit structure for the industry, as wellas encourage other companies to develop and provide theirown next-generation scaffolding in order to grow broader themarket.
A major turning point in Takamiya’s 50-year history wasits acquisition of manufacturing capabilities (manufacturing“Iq System”
next-generation scaffolding

Annual Report 201913

Growth Strategy: Message from the President and Chairman

To ensure Takamiya keeps
growing, transforming existing
frameworks will be vital.

in assets for rental and in new equipment centers to drive
overseas business expansion.
→For more details, see Strategies by Business on pp. 24-29.

Based on current trends, we are on track to achieve thefinal-year targets of our Medium-Term Management Plan –consolidated net sales of ¥50.0 billion and operating incomeof ¥4.0 billion (operating income margin 8%) in the fiscal year
ending March 2021.
However, we still have two more fiscal years to go. Goingforward, we will continue to strategically target management
resources on the plan’s four basic policies – strengthen
management foundations, drive innovation in the earnings
base, accelerate overseas business development and create
new growth businesses – to continue transforming the
Takamiya Group.
→See pp. 18-19 for details about our capital policy.

We have positioned the current Medium-Term
Management Plan as a period to increase productivity in all
business fields and to lay the foundations for future systems
and businesses. Two key elements of that process will be
the use of AI and IoT to reduce manufacturing costs, and thedevelopment of new products that are easier for inventory
management.
To ensure Takamiya keeps growing, we are targeting amajor transformation in our operations, including reducing
manufacturing costs by 80%. But making cheap products is
not the whole picture. We want to create products that havereal value for users. To respond flexibly to changing needs,
all of our factories will have to be capable of manufacturing
various types of products. Transforming existing frameworks
will be vital to achieving that objective.
As a manufacturer, we will continue to pursue ways ofadding more value to our Iq System, agricultural greenhouses
and structural equipment such as damping devices. We
will also create innovative new products and devices that

14

Takamiya Co., Ltd.

incorporate cutting-edge technologies, reinforce productdevelopment capabilities and tighten cost control.
In addition, we have started work on improving theoperational efficiency of financial and logistics IT systems,
including upgrading backbone computing systems andintroducing RPA and ERP software. We have also identified
specific areas for introducing IT and AI tools in all divisions
and departments and started implementation. For example,
in the rental business, we are introducing a new smartphonebased system that allows staff to check inventories in realtime and automatically load equipment based on scaffolding
weight. The system is also scalable, so in the future we will
be able to visualize equipment inventories at customers.
Realizing those projects by the end of the current
Medium-Term Management Plan will be an important stepin transforming Takamiya into a company that can provide
advanced systems to users.

Future growth drivers:
Overseas business and new businesses
We have to expand our overseas business to ensure
Takamiya continues to grow after 2020. At the moment, weare focusing on Southeast Asia, where construction demandremains strong. Sales are rising on the back of major new
infrastructure construction and upgrade projects, but weare unlikely to achieve sustained growth overseas without
putting in place the necessary systems to ensure andmaintain profitability. Initially, we aim to grow the temporary
equipment rental business, increase local production andreinforce sales.
To support that, we will continue to invest in humanresources and other areas of our overseas operations.
We will step up investment in assets for rental and open

Business Results
Net sales (¥ million)

Operating income (¥ million)

60,0004,500
4,000
50,00044,70040,0003,098
34,261

42,182

2,983
34,35036,763

2,713

2,429
20,000

3,000

3,200

36,114

1,500

1,690

0

0
FY Mar.
2015

FY Mar.
2016

FY Mar.
2017

FY Mar.
2018

FY Mar.
2019

FY Mar.
2020(Plan)FY Mar.
2021(Target)2018 Medium-Term Management Plan

Results and Outcomes of 1st Year of the 2018 Medium-Term Management Plan
2018 Medium-Term Management Plan policy

BasicpolicyInvestment
policy•Strengthen management foundations•Shift to long-term, low interest funding•Drive innovation in the earnings base

•Improvement in utilization rates of assets for rental•Shorter lead time of products•Accelerate overseas business development•On-going investment in the Philippines and Vietnam•Create new growth businesses•Growth of agriculture business(various projects completed, and sales allocated)•Restrain investment in assets for rental in Japanand actively invest in overseas assets for rental•Only for Korea, investment in assets for rental was adjusted
taking economic situation into account, whereas domestic
investment was as planned•Expand overseas production bases•Expansion work started at the Vietnam factory(Third phase of expansion)•Invest to raise the efficiency of equipment
centers•Investment for higher production efficiency(ex. Automation, AI tools)•Invest to foster human resources andthe work-style reform•Invest to strengthen technology development
capabilities
Financial
policyResults and outcomes of FY Mar. 2019

•Project initiated for training young employees•Newly introduced incentive scheme linked to teleworkand higher productivity•Equity ratio

More than 30%•Equity ratio

26%

•ROE

More than 10%

•ROE

12%

•ROA*

More than 5%

•ROA*

5%

*ROE=Ordinary income/Average total assets

Issues to be addressed from FY Mar. 2020
•Improve rental prices•Expand synergy of rental and sales businesses•Expand sales of structured equipment•Reduce cost of products for sale
•Expand profitability of overseas subsidiaries•Higher operational efficiency and improved
operational flow linked to ERP introduction•Reinforce technological development capabilities•Higher profit ratio and asset efficiency

Annual Report 201915

Growth Strategy: Message from the President and Chairman

new equipment centers to expand our sales channels. We
also plan to reinforce our local manufacturing capabilities toraise Takamiya’s presence in the region. Specifically, we areupgrading our Vietnam factory to “mother factory” status
to make it our main manufacturing base for products sold inSoutheast Asia. In the medium term, we are targeting sales
in the overseas business of ¥10.0 billion, equating to roughly
20% of our consolidated net sales target for the fiscal year
ending March 2021. Based on that level of sales, we will workout how far we can increase profit margins.
Once we have decided the way we want to develop andapproach our business overseas, we plan to strengthen ties
with local operations. In particular, we need to implement our
strategy quickly while also forming business alliances and tieups with local firms.
We are receiving more inquiries from overseas companies,
which have noticed our aggressive overseas expansion.
When choosing partners, we have to identify potential
synergies, rather than mindlessly targeting growth. We will
also actively explore alliances that are beneficial to both sides.
We have identified the agriculture business as a promisingarea, because it is a market where we can leverage ourmetal processing technologies – one of our strengths – andour extensive knowledge of safe structural standards fromthe construction sector. We aim to foster close links withfood producers by supplying agricultural greenhouses thatcan withstand natural disasters and increase productivity.
In future, we hope to help the agriculture sector overcomelabor shortages and other issues by becoming more directly
involved in food production. AI and IoT technologies will playa crucial role in tackling those issues.

Creating the right environment forhuman resources to envision a new future
Takamiya has a diverse workforce, including employees
overseas. It is now more important than ever to create
frameworks that foster personnel who can take the initiativeand envision a new future for the Group, while also making
the most of their individual talents.
Amid Japan’s current labor shortage, we need to transform
Takamiya into an outstanding company that offers rewarding
work in order to attract the best people. To boost the
motivation of younger employees, we have to offer clear career
paths with prospects for higher pay, as well as work practices
in tune with their lifestyles. Takamiya has to be a company
where change is welcomed and where our employees canpursue their roles independently while also looking forward
to future prospects. To realize that vision, we are enhancing
employee training programs and upgrading personnel systems
to create dynamic work environments for all our people.

16

Takamiya Co., Ltd.

We are also implementing work practice reforms from theperspective of making work more satisfying for everybody,in order to open up opportunities for all types of people. In
the Counting Section, which supports sales teams, we havestarted introducing teleworking, allowing staff to continue
their careers even while working from home and return to theworkplace more easily after taking long-term leave. We havealso launched a diversity plan to actively utilize diverse humanresources. Under the plan, we aim to uncover potential
human resources, identify new approaches and improve ourability to address diverse needs.
→ For more details, see Human Resources Strategy on
pp. 36-39.

In order to motivate our younger employees in their firstseven years, I myself give talks where I communicate tothem our management strategy and corporate DNA, andencourage them to actively take on new challenges. We
have also launched a new project to train younger employees,with a focus on candidates for future management roles.
In the future, I expect that managers will support thenext generation of leaders to understand the fundamental
management approach to roll it out across the Group,
including overseas.

Strengthening management foundations to
support transformation
Enhancing corporate governance is a vital part of our efforts
to transform the Takamiya Group. We have made steady
improvements to our corporate governance model (company
with a Board of Corporate Auditors structure), such as
selecting fully independent candidates for all Outside Director
and Outside Corporate Auditor positions. → For more details,
see Corporate Governance on pp.30-34. We face rising risks
in our business in Japan and overseas. We need to be readyto respond to those risks, which include rapid deteriorationin the operating environment, surging prices for materials
and components, tighter credit conditions and difficulties
recovering investments overseas. We will continue to ensurea healthy financial position that emphasizes cash flow, as
well as maintain our risk management structures and train
the necessary people to support them.
As part of efforts to revitalize management, we arealso transferring more authority to each business division
manager. Additionally, we are appointing senior managers
to run overseas businesses in South Korea and Vietnam andincreasing the number of executive officers at our factories.
And we continue to train and foster global management
personnel who can pursue efficiency, tackle any issues thatarise and oversee all aspects of running a business.
Providing value from an environmental perspective is a core

The current Medium-Term
Management Plan marks a major
turning point for our business. We
aim to achieve the plan’s final-year
profit targets and other objectives
by steadily executing our strategy.

element of our future vision for the Group. We need to explore
ways of adding environmental value to our existing high valueadded products and services. For example, we can harness
our technologies as a manufacturer to provide environmental
value in the agricultural and disaster prevention fields.
Also, it is safe to say that our scaffolding-related
business provides value to society simply through its
vital role supporting the construction and upgrade of
public infrastructure. There are still plenty of areas where
Takamiya can make a real difference – preventing wind andwater damage to agricultural produce and other products,
earthquake-proofing buildings, providing products that protect
and maintain buildings, roads and other public infrastructure,and using studies and data based on the latest technologies
to mitigate the impact of natural disasters.
Going forward, we will continue to help tackle issues
faced by society and reduce environmental impact throughour business activities.
→ For more details, see Helping to Tackle Social Issues
Through Our Business on pp. 40-41.

We are also actively stepping up disclosures while alsoenhancing the accuracy of information we provide, such asindustry data.

Transforming Takamiya into a corporate group thatuses exciting new approaches to generate value
Since the first days of the Company, we have always looked
ahead and adapted our business model by investing in the
future and working to make those investments a success.
→ For more details, see History of Taking on New
Challenges on pp. 2-3 and Takamiya’s Value Creation
Process on pp. 6-7.

If stakeholders look at our business based on a threeto five-year timeframe, I am confident they will see strong
evidence of growth.
The current Medium-Term Management Plan marks amajor turning point for our business. We aim to achieve
the plan’s final-year profit targets and other objectives bysteadily executing our strategy. To reach our goals, we willdevelop and provide high value-added products, as well as
drive the Group’s transformation to create new approaches
and accelerate business expansion overseas. We will
also upgrade our management structure with stronger
governance and diversity, aiming to increase corporate value
by reinforcing earnings and our brand.
With respect to shareholder returns, we will continue
to pay a stable dividend in line with earnings. I believe it
is important for Takamiya to become a company that canraise its dividend by reliably generating profits, while also
continuing to invest in sustaining growth and reinforcing
its management foundation. We will also look into ways of
increasing shareholder returns in addition to dividends.
For the fiscal year ending March 2020, we plan to pay
an annual dividend of ¥13 per share, which includes acommemorative dividend of ¥2 per share to mark Takamiya’s
50th anniversary.
Going forward, we plan to provide more information about
the exciting changes ahead. I hope our shareholders and all
our other shareholders will continue to support us on ourjourney.
July 2019

Kazumasa Takamiya
Representative Director, President and Chairman

Annual Report 201917

Growth Strategy: Message from the CFO

continue delivering growth that meets the expectations of investors andother stakeholders based on existing approaches. To transform the entire
business, we plan to allocate cash generated from our current MediumTerm Management Plan to priority areas.
We will also curb growth in assets for rental and streamline the balance
sheet further to increase capital turnover. We plan to utilize leverage, while
also raising the equity ratio to over 30%, aiming to stabilize and reinforce
the Group’s financial position.

Making Strategic
Investments andReinforcing theGroup’s Financial Base
Hideki Yasuda
Director and Managing Executive Officer
Division General Manager ofBusiness Management Division
General Manager of Corporate Planning Department

Review of the fiscal year ended March 2019
In the fiscal year ended March 31, 2019, net sales increased 16.8% year
on year to ¥42,182 million, driven by rental demand, as well as firm sales.
Despite downward pressure on profits in the overseas business, Takamiya
reported operating income of ¥2,713 million (up 60.5%), ordinary incomeof ¥2,662 million (up 65.4%) and profit attributable to owners of parent of¥1,637 million (up 30.8%), with sales and profits both increasing year on
year. We took a prudent approach to accounting at overseas subsidiaries,
such as booking impairment losses on inventories and increasing provisions
for bad debt. Despite those steps, consolidated results exceeded our initial
forecasts and there was a smooth start to the first fiscal year under our
new Medium-Term Management Plan. For more details, see Strategies by
Business on pp. 24-29.

The main challenge we face right now is ensuring the overseas businessgenerates profits. We expect Group businesses in the Philippines andVietnam to trend in line with our forecasts, but we have adjusted ourstrategy in South Korea to take a more cautious, profit-focused approach.

Medium-Term Management Plan:
basic policy and investment strategy
Takamiya is still a growing company. However, we will not be able to18

Takamiya Co., Ltd.

•Driving innovation in the earnings baseDuring our previous Medium-Term Management Plan, we completed
the transition from conventional scaffolding (scaffolding frames) to nextgeneration scaffolding in Japan. We have now moved into the investment
recovery phase and are limiting investment in domestic assets for rental
as planned. That approach has been thoroughly communicated within theGroup, so there has been no need for urgent investment in assets for rental.
Tighter control on investment means we have had to use limited scaffolding
resources in innovative ways, which has also steadily lifted utilization rates,
as we envisaged.
As part of efforts to drive innovation in the earnings base, we need tomake equipment centers more efficient. To achieve that, we are investingin efficiency improvements to further lift marginal operating rates andimprove asset efficiency at our centers. We keep a wide range of different
equipment in stock, from next-generation scaffolding to temporary
equipment and materials for civil engineering projects, which has madeit harder to manage assets at equipment centers. To further improveutilization rates across the Group, we have been adjusting our asset
portfolio to narrow down the types of equipment in stock. Also, in order toraise marginal operating rates, we plan to use automation and AI tools to
reduce the turnaround time for equipment from return to shipment. We are
already using AI tools on a trial basis and we are now working on hardware
and systems to support implementation at equipment centers.
Meanwhile, we are reinforcing our development capabilities as amanufacturer, with investment being channeled into training development
personnel and improving R&D facilities and factories. For example, at ourGunma factory, initial investment has been focused on optimization, but
going forward we plan to invest in upgrading its functions as a research
center for advanced products and technologies. See the Special Feature on
pp.20-23 for more details.

During the current Medium-Term Management Plan, we will makepreparations and increase investment to strengthen the Group’s capabilities
as a manufacturer. That will involve carefully studying the next steps weneed to take and full-scale investment in factory automation and other areas.
•Accelerating overseas business development
We are steadily implementing investment to shift production overseas,
including the start of construction on the third phase of expansion at ourfactory in Vietnam (scheduled for completion in autumn 2019). Looking
further ahead, we intend to implement the fourth and subsequent phasesof expansion during the next Medium-Term Management Plan, depending
on demand trends and progress with expanding overseas sales channels.
We are gradually expanding sales channels in the Philippines and othercountries where we have marketing offices, and we eventually plan to add
information gathering capabilities to our operations in Vietnam, which iscurrently our regional production base.

Investment and Depreciation
Investment in assets for rental (¥ million)

15,0004,137

General investment* (¥ million)

4,502

4,662

Depreciation (¥ million)

4,777

4,800

2,240
2,099
5,577

973
7,227

5,447

Make investment decisions
while monitoring conditions
1,867
1,517
3,757

0
FY Mar.
2015

5,000

Impact of decision to forgo investment inSouth Korea due to local economic conditions

3,369
7,500

4,700

FY Mar.
2016

FY Mar.
2017

2014 Medium-Term Management PlanFY Mar.
2018

2,467
FY Mar.
2019

1,900

2,500

1,200

3,400

3,000

FY Mar.
2020 (Plan)FY Mar.
2021 (Plan)

0

2018 Medium-Term Management Plan

*Investment for equipment centers, factories, systems, etc.

•Creating new growth businesses
We are constantly on the lookout for new business opportunities using
information from sources worldwide, led by the Business Development
Division and the Product Development Division. Our main approach inthis field is investment in personnel. We are also actively developing
alliances with venture companies and other partners. The maintenanceand repair business is one area we are focusing on with alliances. Our aim
is to create a steady stream of win-win relationships, where we team up
with companies that have advanced technologies and other useful assets
and they use our sales network to expand their businesses. We will also
continue to focus on the agriculture business.
•Strengthening management foundations
Investing in human resources and IT systems is vital to reinforcing theGroup’s management foundations. We are reforming work practices withthe aim of improving employee productivity within fixed working hours,
while also maintaining motivation. That does not mean we are forcing theGroup to blindly adopt IT systems and adhere to a top-down approach fromhead office. Instead, we are canvassing our employees for ideas about
ways to improve efficiency and then providing the necessary investment torealize original ideas. That investment is also aimed at creating motivating
work environments by fostering a corporate culture where employees areencouraged to take the initiative.

Key management indicators
We are monitoring ROE and ROA, while also continuing to focus on
operating income and the operating income margin. Improving marginal
operating rates for the Group’s ¥70 billion in assets (acquisition cost basis),helps to lift ROA. In the rental business, we can increase utilization rates
by reducing the asset base, but we plan to tackle that issue further down
the line, because as a manufacturer, we are currently focusing on capitalutilization and profit margins at production facilities. We will also continue
to emphasize EBITDA as a profitability benchmark.
As a company focused on capital utilization, we know that we have toensure internal benchmarks are compatible with those used by investors
and other stakeholders. We will also create frameworks to ensure thewhole Group understands the importance of cost of capital and cash flow.
In the fiscal year ending March 31, 2020, we plan to introduce enterprise
resource planning (ERP) into all head office departments. The goal is tointegrate all functions such as manufacturing and accounting, but also tocreate a dashboard that collects information from all parts of the Group on adaily basis. By visualizing our operations, we will be able to set meaningful
KPIs that help to increase capital utilization in each business division.

Aiming for the next phase of growth
After celebrating Takamiya’s 50th year in business, we are now turning
our attention to the next phase of growth. The new company name has
been chosen to highlight the founder’s role in driving the development of
Takamiya and to emphasize our underlying strengths as a company. To
support our transition to the new company name, we plan to step up PR and
IR activities to actively promote the Takamiya brand.
The current Medium-Term Management Plan has been positioned has aperiod to prepare for the next phase of growth. The areas we need to workon are becoming clearer and our targets look increasingly within reach. I am
personally looking forward to the plan’s outcomes.
Going forward, we first need to effectively address challenges faced by
the Group and meet the expectations of shareholders and investors. I am
confident shareholders will understand our approach of investing in growth
while ensuring stable dividends. We look forward to your continued support
as we aim for the next phase of growth.

July 2019

Hideki Yasuda
Director and Managing Executive Officer
Division General Manager of Business Management Division
General Manager of Corporate Planning Department
Annual Report 201919

Special Feature: The Power to Drive Transformation

Enhancing Product Development
and Reinforcing Manufacturing
Takamiya is working to transform all aspects of its operations to become a corporate group that consistently
creates value. Our goal is to shift the Group’s focus away from the rental business to manufacturing, aiming
to provide solution-based services, as well as standalone products. Enhancing our product development andmanufacturing capabilities holds the key to realizing that goal. In this section, I’d like to talk about the steps
we are taking in those areas.

Akiyoshi Takamiya
Representative Director and Executive Vice President
Supervisor of Product Development Division
Sales & Marketing Division

Strengths in Product Development andManufacturing•Substantial production capacity
To drive Takamiya’s transformation, we have identified theGroup’s strengths and highlighted issues that need to be
tackled. Based on that, we are currently working on a rangeof measures to support the Group’s transformation, such as
optimizing manufacturing facilities.
One of Takamiya’s strengths in manufacturing is its
substantial production capacity and the scope it has to further

20

Takamiya Co., Ltd.

increase capacity. We have domestic production sites inGunma and Gifu Prefectures, as well as factories overseas inSouth Korea and Vietnam. At our “domestic mother factory”
in Gunma, which makes roughly 60% of Takamiya products,
we have launched an optimization program to reduce costs,
improve productivity and raise quality. We have also started
construction on the third phase of expansion at our factory in
Vietnam.
At the Gunma factory, we are using IT to gather data andvisualize productivity. We are also looking into the advantagesof introducing the latest technologies and AI tools. We plan

Production Sites and Equipment Centers(As of March 31, 2019)

South Korea

Marketing Manufacturing

Hory Korea Co., Ltd.

Domestic equipment
centers: 28

The company produces temporary equipment andmaterials such as the Iq System, strengthening
sales in the South Korean and ASEAN markets.

Vietnam

Manufacturing

HORY VIETNAM Co., Ltd.
The company produces clamps and other products,
supplying these to Japan and Southeast Asian
countries.

Marketing
Equipment

Philippines

DIMENSION-ALL INC.
Expanding sales and rentals of
temporary equipment and materials in
the Philippine market, the company
has large construction companies ascustomers, and is building a strong
position in the market.

Vietnam

Marketing Designing Equipment

Cadian Vietnam Co., Ltd.
MyanmarMarketing Designing

Cadian Myanmar Co., Ltd.

Manufacturing
Designing

Consolidated

Marketing
Equipment centers

Non-consolidated

to initially introduce advanced technologies on productionlines for our Oct-brace structural equipment and other new
products and then gradually optimize the entire factory andadjust our frontline manufacturing approaches. We havealready installed 3D printers, laser processing machines andother equipment, which is already starting to reap benefits inthe form of shorter lead times.
Meanwhile, we plan to convert our Vietnam factory into
the Group’s “overseas mother factory” to supply products
across Southeast Asia. Looking further ahead, we will
prepare for fourth and fifth phases of expansion at the site,while cultivating demand in the region. We will also continue
to upgrade the factory’s capabilities so that it can handle
high value-added products, as well as existing generalpurpose products. Market conditions have changed since we
opened the Vietnam factory five years ago, so we will also
use the site to gather local information about raw materials,
components and materials and product demand trends. To
prepare the site for that role, we are currently hiring personnel
with proficiency in Chinese, English and other languages. We
are also recruiting local skilled product development staff andpersonnel with a background in science with a view to using
Vietnam as a base to develop and supply products for Asia.
•Customer-focused approach
Another strength is that we can apply our customer-focused
approach in the rental business to product development

and manufacturing. In addition to Product Development andManufacturing divisions, we have a number of well-staffedteams responsible for activities that bring Takamiya closer
to customers, such as the Scaffolding System Engineering
Department, which creates scaffolding plans, the Scaffolding
Construction Department, which carries out scaffolding
construction work, and the Sales & Marketing Division, which
identifies and taps into customer needs. The large amountof information received by those divisions from customers
and partners helps give us ideas for new products that arefocused on the customer.
In April 2019, we set up a new Product Research Planning(PRP) Department in the Business Development Division.
We also upgraded the Procurement Division to the Global
Procurement Division. The PRP Department is a specialist
team responsible for gathering information about products,
components and equipment from sources worldwide. Basedon that information, the office makes objective decisions onwhether Takamiya should make certain products or importthem off the shelf from overseas suppliers. Our goal is to
respond more accurately and rapidly to product development
requests from customers.
The Global Procurement Division is partly responsible for
implementing our proactive business strategy, anchored bypartnerships with suppliers. In procurement, we are currently
negotiating a number of win-win relationships with potential
suppliers. We want to open the door to procurement
sources worldwide to identify optimum suppliers that we cancollaborate with.

Developing human resources andchanging our corporate culture
To continue developing high value-added products andservices by combining the capabilities of our rental and sales
businesses and product development and manufacturing, wehave to make our workforce more flexible. A more flexible
workforce will help to spur changes in our corporate culturethat lead to greater innovation. To support that, we urgently
need to cultivate product development personnel. Drawing
on the extensive experience of senior employees, we are
currently fostering a new generation of human resources.
From a human resources perspective, we have plenty ofroom for growth as a manufacturer, and we are confident
that current measures will yield results as we continue topush ahead with them. We are already forging deeper links
between marketing and product development teams, which
are now more aware that they can create better products ifthey work together. One major sign that our new approach is
working is that customers are starting to change the way theywork with us. A growing number of customers are contacting
us to seek our involvement from the project planning stage,illustrating how they now rely on our input as a manufacturer.
We are stepping up efforts, including cultivating productdevelopment personnel, to meet those expectations as soon
as possible.
Annual Report 201921

Special Feature: The Power to Drive Transformation

Product Development Division – Vision and Initiatives

Combining and utilizing Group resources to develop innovative new products
One of our strengths in the temporary
structure sector is the technologies we haveaccumulated as a metal stamping company.
Today, those technologies also underpin our
new agriculture business and our structural
product business. Supported by Takamiya’s
can-do corporate culture, we will continue
to drive innovation, building on existing
Takashi Nagumo
technology assets to create the Group’s future
Executive Officer
technologies.
Division General Manager of
The creation of new products does
Product Development Division
not happen in isolation. We need to build
relationships to leverage all the Group’s
resources. Each division has to play its part.
The Sales & Marketing Division needs to gather feedback from customers
about the kind of products they want, the Manufacturing Division needs
manufacturing processes focused on safety, quality, cost and delivery, and theProduct Development Division needs the technological capabilities to flexibly
and rapidly utilize those resources to develop and launch new products.
To improve productivity and efficiency, the Product Development Division
is introducing new technologies from product planning right through tomanufacturing. We are using existing 3D computer-aided design (CAD)systems for finite element method (FEM) analysis and to transfer data to 3D
printing systems, while in production, we are introducing 3D CAD design into
CNC processes using computer-aided manufacturing (CAM). The new tools
will allow us to check and adjust product data at an early stage, which wassomething we could only do at the test production stage previously.
We have to introduce new digital technologies to create automated andautonomously controlled production lines. The Product Development Division
is prioritizing the development of products that can utilize AI or IoT. It is also
constructing a Groupwide platform that will facilitate the smooth flow of datawhen those new technologies are deployed.

Training personnel to support product development
Personnel training is also the top issue for Takamiya in product development.
Engineers in the Product Development Division will need the skills toapply new digital technologies to actual operations, as well as existing
technologies, so we are sending them to attend specialist seminars about
digital tool and other technologies and forging partnerships with othercompanies.
In addition, we are actively promoting personnel exchanges between
different divisions, harnessing Takamiya's unique ability to provide one-stop
services to customers – from product development and planning to sales,
rental and construction. That approach should also increase contact points
with customers and facilitate the development of appealing products. New
perspectives gained from personnel exchanges will also lead to changes in
product development logic and stimulate new ways of thinking.
Basic approach to product development
Our basic approach is to develop products that help users save time and laborand improve safety. Going forward, we will need to acquire new capabilities
to introduce advanced technologies and make products lighter.
Safety is an important common theme for all our products, so we will work
to further improve safety and provide easy-to-understand data to users.
New business development
Maintaining infrastructure, which is vital for industry and daily life, isa pressing issue. Users need to select the best temporary structures forthe right locations to carry out maintenance work. Our extensive lineup of
products means we can help users mix and match products to overcome any
project issue.
In the agriculture business, a new field for Takamiya, we are using
evidence-based product development to supply structural construction
materials that increase customer satisfaction.

Initiatives at production sites to support product development

Reducing costs through productivity improvements and seamless cooperation
between product development and production teams

Yasunori Nishioka
Director andExecutive Officer
Division General Manager of
Manufacturing Division

Increasing cooperation to cut lead times
It takes time to develop and launch new
products. Product design is handled by
the Product Development Division, theManufacturing Technology Department
is responsible for selecting the necessary
equipment and setting up production lines
for new products, and final production iscarried out at our factories. We are working
to cut product launch lead times by stepping
up cooperation between those teams. We
are also aiming to cut costs after productdevelopment is completed by reducing takt
times and the number of production processes.

Centralized management and control of production equipment
We have introduced a supervisory control and data acquisition (SCADA)

22

Takamiya Co., Ltd.

system to centrally control the operation of production equipment and all
manufacturing processes. The system allows us to monitor equipment andcollect operational data.
Our factories use various types of equipment. With continuous use, jigs
become worn and the equipment itself also becomes degraded. Although
historical data can help us decide the best time for preventative maintenance,
we introduced the SCADA system to allow even inexperienced engineers to
predict wear and tear and carry out maintenance. The system prevents issues
before they occur, helping to reduce unnecessary investment.
Progress with factory automation
We plan to build production lines that require less human input to address
work-style reform, as well as an expected decline in Japan’s working-age
population.
Specifically, we are looking into using AI tools, industrial robots anddriverless vehicles that transport products inside our facilities and materials
between different production processes.

Long-term goals in product development andmanufacturing•Future direction of manufacturing
Setting up new businesses spurs innovation in peripheral
areas around existing business models. That type ofhorizontal business development is the basic approach
used by companies today. At Takamiya, we want to use ourmanufacturing skills to address customer needs by reducing
time and effort for frontline users. Specifically, we will movebeyond our existing focus on rental products to develop
and manufacture products that spur new approaches inengineering and construction, that can be used for complex
buildings, and that increase safety.
One of our strengths is metal processing technologies, but
we are always on the lookout for new materials. We continue
to improve our Iq System of next-generation scaffolding by
making materials lighter. The system also incorporates anumber of technologies and innovations to make it easierfor our customers to handle. Applying the same technology
to our agricultural greenhouses has the potential to createstronger, lighter products. We also see a need to improve ourlineup of motorized products, such as Lift Climber, a mast
climbing work platform.
We are also exploring the potential of robotics, but wehave no plans to make major investments. Our efforts in
manufacturing need to be firmly grounded in reality, so
we will focus on making products that accurately address
customer needs, while also ensuring the right balance
between investment and returns. We will continue to pushahead with development, exploring ways to ensure our
products remain relevant 50 or 100 years in the future.
•New product development themes
Our mission in manufacturing is to provide value to society. Inline with that aim, our near-term focus is on developing new
products that help protect public infrastructure.
As infrastructure ages in Japan, we forecast rising demand
for maintenance and repair work and reconstruction projects,
which will also incorporate the latest earthquake-proofing
technologies. We therefore plan to prioritize products andservices for maintaining and repairing roads, buildings andother public infrastructure.
We will also target demand in Asia, where each country
is actively developing national infrastructure assets, butparticularly countries in Southeast Asia, which have large,
young populations. Political risk is something we needto monitor, but we will explore business opportunities ingrowing countries and regions to ensure Takamiya is not left
behind in the Asian market.
We will also continue to focus on the agriculture business.
At the moment, we are supplying products that mitigate theimpact of natural disasters, such as agricultural greenhouses
that can withstand winds, floods and snow. Challenges
remain, but orders are growing steadily, and we hope to help
Japanese farmers tackle some of the issues they face byflexibly supplying products they want and need.

•IT and other new technologies
As you might expect, we are also putting priority on AI, IoT
and other new technologies.
The ultimate aim of deploying new technologies inmanufacturing settings is to reduce costs and cut the numberof production processes. Time and effort saved by introducing
cutting-edge technologies could lead to time savings in otherareas, such as product distribution, helping to accelerate thedevelopment of products that address customer needs anddrive improvements in service quality.
According to some predictions, IoT will lead to theclosure of half of all businesses in operation today. We haveto harness IoT to overhaul our business by using it to spur
new approaches and creativity among our workforce andto drive small incremental steps in innovation, instead ofbeing a slave to the technology. Creating workplaces where
technology supports new approaches and creativity is the key
to transforming Takamiya’s existing ways of doing business.

Taking on bold challenges
to spur the next phase of growth
Under our current Medium-Term Management Plan, weare making careful preparations and improvements andcarrying out appropriate investments. The outcomes of thoseefforts will be used to full effect in the next Medium-Term
Management Plan, but we will need more time over the
medium term to really grow our business as a manufacturer.
For example, our domestic factories have continued to makeproducts for many years now with carefully maintained
older equipment and facilities. We also recognize there isconsiderable room for improvement at our overseas factories.
However, Takamiya has consistently grown earnings
since it listed on the stock market, albeit with someminor fluctuations. That growth, despite facing numerous
challenges, underscores the Group’s substantial growthpotential. Growth has also been driven by our never-say-die
attitude and a corporate culture that is not afraid of failure.
Takamiya is now launching new efforts in areas where it
can support public safety and security, such as agriculture
and damping devices. It will not all be smooth sailing, but
we are confident we can take the Group into a new phase of
growth by continuing to boldly take on new challenges.
By seeking out challenges and creating products that
support local communities and society as a whole, we aim toincrease Takamiya’s value as a global company.

July 2019

Akiyoshi Takamiya
Representative Director andExecutive Vice President
Annual Report 201923

Strategies by Business

Sales Business

Strengths•Price competitiveness through in-houseproduction•Fulfillment of the sales promotion function
by the Rental Business Division andScaffolding Construction Department•Number of companies owning the Iq
System, established by sales prior to othercompanies (approximately 300 companies)(As of March 31, 2019)

Opportunities•Rental companies that are our customers
making investments to update prefabricatedscaffolding to next-generation scaffolding•Revision of the Ordinance on Industrial
Safety and Health•Expo 2025 Osaka, Kansai* accounced*2025 Japan World Expo

Net Sales and Operating Income(¥ million)
20,0004,000
16,48912,44910,00013,512
2,000

2,357
1,670
1,192

0

0

2017.32018.32019.3

Net sales (left scale)Operating income (right scale)(Notes)1. Figures are rounded down to the nearest million yen.
2. Figures include inter-segment sales or transfer.

24

Takamiya Co., Ltd.

Providing new added value by
leveraging our strengths as a rental
and manufacturing company
We are leveraging our metal processing technologies and know-how
regarding scaffolding to expand the scope of our business beyond lightduty temporary equipment and materials to include the development,
manufacturing and sales of new products. In addition to the Iq System, ournext-generation scaffolding and clamps, we are also providing products suchas agricultural greenhouses, damping devices and solar panel installation
frames.
One of our strengths is our development and manufacturing capabilities,
through which we are able to realize concrete products by incorporating
various needs and information from worksites, gathered through both ourrental and sales businesses.

Results for the FY March 2019
In the sales segment, net sales were ¥13,512 million (up 8.5% year on year), while
operating income was ¥1,670 million (up 40.1%).
Although inter-segment sales decreased by 93.3% year on year due to the absorptionof the manufacturing subsidiary, Hory Corporation through a merger, sales to externalcustomers grew significantly by 25.6%. Regarding profitability, the cost reduction
brought about by the merger has proven to be effective.
In the construction field (temporary equipment and materials), proactive sales andmarketing activities of recommending various solutions have been rolled out in response
to vigorously rising construction demands and stricter safety criteria. In addition, asa result of full-scale demand for next-generation scaffolding, underpinned by the
successive entry of competitors, there have been additional sales to existing customers
in addition to new customers at the Company, and sales of the Iq System, our nextgeneration scaffolding, and other related materials have also been strong. Sales of the
Iq System totaled ¥3,245 million (up 67%), and the Iq System now covers 5.32 million m2(up 16.9%), which represents 6.6%* of the market share for prefabricated scaffolding.
In the environmental business field, sales were strong due to factors such as the
successive completion of agricultural greenhouses in the agriculture business. In
secondhand sales, sales decreased along with the subsiding of sales of depreciatedassets.
*Ratio of the Iq System (5.32 million m2) to conventional vertical frames (prefabricated scaffolding)(80.73 million m2). Estimates by the Company are based on the “Survey on Construction-Related
Businesses” from the Ministry of Land, Infrastructure, Transport and Tourism in March 2019.

Message from the Officer in Charge

Hidehiko Yamashita
Executive Officer
General Manager ofSales Department
Sales & Marketing Division

The Iq System, our next-generation scaffolding, has continued from the previous fiscal year to be a growth driver for the sales
business. Although we have a significant advantage over other companies, with over 300 companies holding the Iq System,competition for next-generation scaffolding is expected to intensify, as an environment for its expansion is now in place.
Demand will move strongly, as seen in its high utilization in the rental business. We expect rental companies and generalcontractors that have put off replacement investments from prefabricated scaffolding until now to begin considering thepurchase of next-generation scaffolding. The Company has a track record of renting the Iq System in its rental business. By
taking advantage of our know-how, ranging from scaffolding installation and storage methods to operations, we will respondsincerely to the insecurities and doubts of customers who are considering purchases of next-generation scaffolding. In
addition, in case of a shortage of equipment and materials after purchase, the advantage of being able to rent a product withthe same standards from us will contribute to peace of mind for our customers. We will strive to solidify the Iq System’s top
share in the next-generation scaffolding market.
Going forward, the construction market will shift from new construction to renovation and repair work. For the SPIDER PANEL,a panel-type hanging scaffolding that is our flagship product in this market, we are making improvements by incorporating
feedback from customers in manufacturing, in order to develop it into a product that better matches market needs.
In addition, drawing on our accumulated know-how and rapidly growing sales in the environment-related and agriculturebusinesses, we will continue to rapidly develop manufacturing, sales and scaffolding construction systems in order toimprove profitability.
We will further refine our development and manufacturing technological capabilities, improve synergies between therental and sales functions and leverage the Company’s unique services that go beyond sales, in order to contribute to an
expansion in market share.

Future strategy: Strengthening our development and manufacturing
capabilities and promoting efficiency improvements
In the temporary equipment and materials market, the spread of next-generation
scaffolding is expected to make further progress. With regard to the Iq System, theCompany will continue to capture new customers, increase its market share, and sell torepeat customers while leveraging synergies through its rental business.
In the agriculture business, we will target areas with robust demand, while improving
our systems for manufacturing, sales, and scaffolding construction and working to
improve the level of profitability. In structural equipment, we will work to improve ourlevel of recognition and expand sales of high value-added products such as the WUTEC
damping device and the Oct-brace.
We will also focus on the further strengthening of our development and manufacturing
capabilities. We will clarify the role of each factory, while improving efficiency throughthe introduction of AI and IoT, and other tools. Furthermore, we will work to strengthen
our information gathering capabilities and establish a global procurement structure inorder to respond quickly to customer needs as we further refine our capabilities as amanufacturer.

WUTEC, residential vibration control device

Key strategies

Increasing the Market Share for Next-generation Scaffolding
Cumulative total sales for the Iq System (¥ million)

18,000

Number of square meters covered by the Iq System* (10,000 m2)

Oct-brace, buckling constraint (damping)
brace
18000

532
454
10,011
6,765

2018.3(Result)

2019.3(Result)

2021.3(Plan)

0*Calculated by the Company by adding assets for rental held to cumulative sales results.

Annual Report 201925

Strategies by Business

Rental Business

Strengths•Support from construction worksites(workers)•High share in the next-generation
scaffolding industry (established throughentry into the market ahead of othercompanies)•Has a scaffolding construction service(the Scaffolding Construction Department)
within the Company•Approximately 300 companies owning the
Iq System (rental demand for the shortage)(As of March 31, 2019)

Opportunities•Revision of the Ordinance on Industrial
Safety and Health•Aging of, and decrease in the number of
construction industry workers•Efforts to improve productivity atconstruction worksites•Development projects in transport
infrastructures spurred by theannouncement to hold the Expo 2025
Osaka, Kansai**2025 Japan World Expo
Net Sales and Operating Income(¥ million)
30,0004,000
22,213

21,382

23,51920,0002,464

2,267
10,000

2,000

1,705

0

0

2017.32018.32019.3

Net sales (left scale)Operating income (right scale)(Notes)1. Figures are rounded down to the nearest million yen.
2. Figures include inter-segment sales or transfer.

26

Takamiya Co., Ltd.

Further solidify our earnings basethrough productivity improvements
and framework transformations
We provide rental services of light-duty temporary equipment and materials
for all kinds of worksites, including buildings, bridges, repairs of ultra-highrise buildings, tunnels and underground construction. Our strength is ourability to accurately respond to a variety of needs by combining the Group’sfunctions, including development, manufacturing, scaffolding construction
and design, with these rental services. We will enhance our earning
capabilities by responding to growing demand through further improvements
in productivity and quality, with efforts that include AI and IoT as well as theintroduction of new frameworks.

Results for the FY March 2019
In the rental segment, net sales were ¥23,519 million (up10.0% year on year), while
operating income was ¥2,464 million (up 44.5%). The main reasons for this significant
increase included an increase in rental earnings due to a growth in rental volume, alongwith a leveling off of depreciation, which had been on an upward trend, to nearly thesame level as in the previous fiscal year, due to investment in temporary equipment andmaterials for rent having passed its peak.
During the fiscal year under review, in an environment with robust demand, theGroup has provided temporary equipment and materials that are easier and safer to setup, centered on the Iq System, our next-generation scaffolding. In addition, we havemade proposals for high added-value services that combine scaffolding construction.
There have been tailwinds from the full-scale market adoption of next-generation
scaffolding, and the average utilization rate for the Iq System was strong at 68.3%(up 8 points), which was a record high. Moreover, in the field of civil engineering andbridge construction, in which prominent delays in the commencement of work had
been observed, overall rental volume of equipment and materials remained at a highlevel, significantly exceeding that of the previous fiscal year, as shipments proceededsmoothly for transport infrastructure and urban civil engineering projects.
By region, performance continued to be strong for the Kanto area, and sales for civilengineering-related work also grew in other regions.

Message from the Officer in Charge
While there are regional differences in the market, there has been a steady shift from prefabricated scaffolding to nextgeneration scaffolding. We have completed a switch of domestic assets for rental to the Iq System ahead of other companies,
and have been well received due to its five-year track record since introduction. The Iq System is now having increased
opportunities to be selected at the planning stage. In addition, repeat orders from customers that have previously adopted thesystem have also increased. Because demand is strong and the next-generation scaffolding market is expected to continue togrow, we will pursue adjustments aimed at fair pricing, and drive the next-generation scaffolding market, while also taking
profitability into consideration.
We believe that the high level of equipment utilization that was maintained during the fiscal year under review was due
to improvements in equipment management, through efforts including a shortening of the period from equipment return toreshipment, as well as optimal allocation of equipment according to region and type of work. However, we also believe thatroom still remains for improvements in both tangible and intangible aspects, including the adoption of AI and mechanization,
and we regard this as an issue to focus on.
In addition, the flow of construction investment is expected to shift from new construction to maintenance and renovation
work. We expect demand to grow for the VMAX, hanging scaffolding system and the SPIDER PANEL, panel-type of hanging
scaffolding, in bridge repair and renovation work for dilapidated bridges and highways.
We aim to grasp this market situation and proactively make proposals in order to capture demand, by improving addedvalue for new equipment, scaffolding construction, and proposal-based marketing (new services) that support productivity
improvements at worksites, so that we can accurately meet the needs of customers from amongst the many available items.

Tsutomu Abe
Director and Executive Officer
Division General Manager ofSales & Marketing Division
General Manager ofRental Department

Future strategy: Improving productivity and utilization rates
and increasing our earning capabilities
Despite we are pursuing price improvements for the Iq System, a high utilization rate
has been achieved for the system since the beginning of the fiscal year ending March
2020. We expect to achieve high utilization throughout the year in terms of equipment
and materials for civil engineering and bridge construction, for which orders have been
received, and we will respond appropriately to this high demand.
To this end, we will work to reduce lead times from equipment return to preparation
and reshipment, improve quality control, and increase the utilization rate through means
such as the adoption of AI and IoT at our equipment centers, and will also work to
expand these centers.
We will optimize our portfolio of assets for rental, in line with changes in thebusiness environment, including an expanded lineup of equipment to meet the demand
for maintenance, repair, and renewal of social infrastructure, which is expected toincrease in the future. Also, we will offer high added-value services, including proposalbased sales combined with scaffolding construction. Furthermore, we will work toestablish new business models including the introduction of new frameworks for the
management and operation of equipment.

VMAX, hanging scaffolding system

Key strategies

Further improvements in the utilization rate of equipment
and materials
52.9%

55.5%

SPIDER PANEL, panel-type hanging
scaffolding

55.7%

45.1%

Utilization of idle inventory

2018.3(Result)

2019.3(Result)

Adoption of AI and IT

2020.3(Plan)

2021.3(Plan)

Annual Report 201927

Strategies by Business

Overseas Business

Strengthening the earnings base asa driver for the next growth

Strengths•Local companies (in South Korea and thePhilippines) that have been acquired andtheir networks•Production bases (in Vietnam) capable ofsupplying to ASEAN countries•Japanese-originated product-development
capabilities as well as advanced serviceprovision capabilities•Previous track record (of transferringof service to acquired companies andlocalization of business models)

We are continuing our investment for growth, including the establishment
and expansion of overseas bases, so that the overseas business can serveas the pillars for next-generation growth as we actively expand our businessabroad. We will continue to expand both our rental and sales businesses
and work to strengthen our earnings base, through the organic coordinationof Vietnam, our production base, the Philippines, our rental sales base, andSouth Korea, which serves both manufacturing and sales functions.

Results for the FY March 2019

Opportunities•Population and economic growths in the
ASEAN region

Net Sales and Operating Income(¥ million)
8,000

7,535

600

5,832
4,000

0

4,198

300
149

24

-189

2017.30-300

2018.32019.3

Net sales (left scale)Operating income (right scale)(Notes)1. Figures are rounded down to the nearest million yen.
2. Figures include inter-segment sales or transfer.

28

Takamiya Co., Ltd.

In the overseas segment, net sales were ¥7,535 million (up 29.2% year on year), operating
income was ¥24 million (down 83.7%), and the overseas sales ratio was 16.9%.
Sales and rentals of temporary equipment and materials maintained steady growthin the context of robust construction demand. In addition, orders received for largescale, solar-related projects at Hory Korea Co., Ltd. further contributed to a substantial
increase in the net sales. However, in terms of profitability, operating income decreased.
That mainly reflected relatively low profit in the above-mentioned solar projects andan increase in SG&A expenses such as allowance for doubtful accounts and laborcost. In addition, proactive investments in asset for rental to expand our business in
the Philippines, expenses for third phase of expansion in the Vietnam factory, and theestablishment of an equipment center in the Philippines affected the decrease.

Future strategy:
Establishing foundation for growth in the ASEAN region
In the ASEAN region, demand for temporary equipment and materials is beginningto grow in the manufacturing, sales, and rental areas due to factors including robust
investment in construction for public infrastructure and urban development in thePhilippines and the promotion of attracting foreign corporations in Vietnam. In order tobuild up a driver of our next growth with global competitive strength, we are establishinga foundation for ensuring stable profits by efforts including setting up a stable supply
structure, while improving our presence in the ASEAN region.
We have had to make some prudent investment decisions in light of recent economic
conditions in the fiscal year ended March 2019, including forgoing investments in assets
for rental in South Korea. Even so, we will continue to monitor the domestic economic
situation and strengthen our sales force to capture demand in South Korea. To this end,
we will continue building alliances with local major companies and deploying the rental
and sales businesses of new temporary equipment and materials that incorporate theTakamiya Group’s know-how.

Message from the Officer in Charge

Yuki Mukaiyama
Director and Executive Officer
Division General Manager ofOverseas Business Division
Supervisor of Global Procurement
Division
Business Development Division

In just the three countries where the Takamiya Group has overseas business locations, there is a market with a combined
population of approximately 250 million people and an economic growth rate of roughly 5% (compared to 1% in Japan).
We are engaging in this market with a population double that of Japan and an economic growth rate five times higher asa platform to actively promote sales and marketing. In particular, in light of a current construction boom in the Philippines
under the construction investment policy of President Duterte, we believe that the expansion into the target markets throughcapital and business partnerships with local companies and M&As, which we have pursued as part of our overseas sales andmarketing strategy, has been the correct path thus far.
Our overseas business in general is in a phase of upfront investments. We are currently deploying the business model
fostered in Japan while localizing when necessary to acquire the markets. Human resources are the key to localizing
appropriately. It will take time to nurture managers who can take charge of corporate management with the knowledge andknow-how of the rentals and sales that are our strengths and the ability to train local staff. We have continuously assigned
highly qualified personnel to the Overseas Business Division. We are pursuing development through a mix of OJT and othertraining in cooperation with various business locations and departments within the Group, to equip employees with not only
the language skills required overseas, but also the business skills needed for the mission and position assigned at overseas
postings going forward.
We have clarified our management policy and implemented our previous Medium-Term Management Plan from May 2014,
based on the recognition that the overseas market is where the growth of the Takamiya Group lies. This policy is carriedover and further strengthened in the current Medium-Term Management Plan. The Overseas Business Division will drive thetransformation of the Takamiya Group into a global company with an aim to acquire market share and a de facto standard
position in the overseas market over a short period of time and benefit from the earnings expansion stage over the long term.

We are beginning to see the effects of investments in assets for rental in thePhilippines and Vietnam. In the Philippines, we aim to increase the rental market sharein areas where projects are concentrated by continuously investing in assets for rental tosupport work related to infrastructure construction and urban-development investments
being promoted by the government. In Vietnam, we are focusing on manufacturing
general-purpose equipment and materials for the time being. However, we will work
to strengthen our business structures, including enhancing our production foundation,
through the conversion of the Vietnam factory into the Group’s “overseas motherfactory” in anticipation of the fourth and fifth phases of expansion.
In addition, we will work to strengthen the cooperation among our overseas locations
by continuing to promote personnel exchanges between them. We will also strengthen
our human resources foundation by nurturing locally-hired personnel into the next
generation of managers.

Key strategies

Strengthening the earnings base through cooperation among overseas locations
South Korea

Hory Korea Co., Ltd.

Sales
Manufacturing
RentalJapan

Domestic factories of
Takamiya Co., Ltd.

[Strategy]

Strengthen sales ⇒ Improve profitability•Forgo investment in light of the economic situation•Carefully screen projects and receive orders only forhighly profitable ones
•Strengthen sales and marketing in surrounding countries•Spread next-generation scaffolding•Manufacture and sell solar panel installation frames
Vietnam

HORY VIETNAM Co., Ltd.

Sales
Manufacturing[Strategy]

Focus on development and manufacturingof high value-added products

Capitalinvestments

Product supply[Strategy]

Convert the Vietnam factory into our“overseas mother factory” ⇒ Increase revenue•Invest in augmenting production capacity(third phase construction)•Transfer manufacturing of general-purpose products
from Japan•Plan to manufacture high value-added products such as
the Iq System•Strengthen production and sales of products forJapan and Asian countries

Philippines

DIMENSION-ALL INC.

Sales
Rental[Strategy]

Investments in assets for rental(purchases from Vietnam)

Establish a supply structure in response to
local demand ⇒ Increase revenue and profit•Invest in assets for rental and increase the amount ofassets held
•Improve profits by increase in price

Annual Report 201929

Strengthening the Management Foundations: Corporate Governance

Characteristics of the Takamiya's corporate governanceTakamiya Group believes that the basic foundation for corporate governance involves thoroughly
enforcing compliance, ensuring the transparency and efficiency of management, and working tomaximize our corporate value for all stakeholders, including shareholders and investors.
We will establish a temporary equipment and materials industry that is clearly recognized assound by the general public and investors and achieve perpetual development within a highly
transparent business environment by pursuing high-quality corporate activities centered around thestable supply of safe and high added-value temporary equipment and materials. We will also implement efforts to improve theposition of our industry for the interests of our users and the entire industry, in addition to the Group’s development.
The Company's Board of Directors consists of eight Directors (all of whom are Japanese men; as of June 26, 2019) ofoutstanding character, possessing insights, capabilities, abundant experience and high ethical standards. Factors such as
expertise in management, sales and marketing, technology, overseas business, finance and accounting, and law, as well as
differing backgrounds and experience, were taken into consideration when selecting the Board of Directors’ members.
In addition, two Independent Outside Directors and two Independent Outside Corporate Auditors are always in attendanceat meetings of the Board of Directors. A structure is in place that allows for honest opinions, advice, and comments from an
independent and objective perspective regarding management matters, in addition to important matters related to nomination
and remuneration. As such, the transparency and objectivity of the Company’s Board of Directors are ensured. However, gender
diversity is insufficient. We recognize finding and selecting the appropriate individuals for positions is an issue for us. We willconsider an effective governance structure from all aspects to further strengthen transparency and objectivity going forward.
•Overview of Corporate Governance System (FY March 2019)
Organization

Company with a Board of Corporate Auditors

Chairman of the Board

Representative Director, President and Chairman, Kazumasa Takamya

Number of Board Members

Ten, including two Outside Directors

Number of Corporate Auditors

Three, including two Outside Corporate Auditors

Board of Directors Meetings in the
FY March 2019

Frequency: Regular 12 times; Extraordinary 5 times; Resolution in writing 3 times
Director attendance rate: 98%; Corporate Auditor attendance rate: 94%

Board of Corporate Auditors Meetings
in the FY March 2019

Frequency: Regular 12 times; Extraordinary 2 times
Corporate Auditor attendance rate: 93%

Main Meetings Attended by Corporate
Auditors

Board of Directors Meetings, Management Meetings

Appointment of Independent Directors
and Corporate Auditors

Two Outside Directors and two Outside Corporate Auditors

Accounting Auditor

Ernst & Young ShinNihon LLC•Corporate Governance System (As of March 31, 2019)
Management & decision-making
Board ofDirectors

Appointments / Dismissals

Instruction

ReportCooperation

Board of Corporate
Auditors

Appointments / Dismissals

Business
Division

Accounting audit

AffiliatedSubsidiaries

Cooperation

Cooperation

Audit

Cooperation

Takamiya Co., Ltd.

Accounting
AuditorSupervisionInternal auditing

Appointments / Dismissals

30

Representative
Directors

SupervisionInternal Audit
OfficeSelection / Dismissals / Supervision
Report

Audit

General meeting of shareholders

Directors
Outside Directors
Independent Directors andIndependent Corporate Auditors

Business execution

Status of Members of the Board and Corporate Auditors (As of June 26, 2019. Figures on the meeting
attendance and attendance rate are for the fiscal year ended March 2019.)•Structure of the Board of Directors
Name

Current positions

Board of Directors
Meeting attendance/
Attendance rate

Expertise

Reason for appointment

Has led the Group with experience and a high level of knowledge related tocorporate management and strong leadership

Kazumasa
Takamiya

Representative Director,
President and Chairman

17 times/100%

Management

AkiyoshiTakamiya

Representative Director,
Executive Vice President
Supervisor of Product Development Division
Sales & Marketing Division

15 times/88%

Management andsales & marketing

Hideki
YasudaDirector and Managing Executive Officer
Division General Manager ofBusiness Management Division

16 times/94%

Finance andaccounting

Has abundant experience and extensive knowledge in the administrative
division, particularly in finance and accounting

Tsutomu
Abe

Director and Executive Officer
Division General Manager ofSales & Marketing Division

17 times/100%

Sales & marketing

Has abundant experience in the construction-use temporary equipment andmaterials industry and extensive knowledge related to sales & marketing in
general17 times/100%

Overseas,management andnew business

Has abundant overseas management experience including serving as therepresentative of an overseas subsidiary, and is well acquainted with new
business development

17 times/100%

Management,
finance, overseas,
manufacturingand quality control

Has abundant management experience at financial institutions, experience
in international business, and management experience at a manufacturingsubsidiary, and is well acquainted with the Company’s manufacturing
division

17 times/100%

Is qualified as a tax accountant and has abundant experience and extensive
Taxes and accounting knowledge from many years of involvement in managerial accounting thatwould be useful in the Company’s management

17 times/100%

Financing, financeand management

Director and Executive Officer
Yuki
Mukaiyama Division General Manager ofOverseas Business Division
Supervisor of Global Procurement Division
Business Development Division

Yasunori
Nishioka

Director and Executive Officer
Division General Manager of
Manufacturing Division
Supervisor of Scaffolding Quality Assurance
Division

Director
Kouji
Shimokawa Outside

NoboruFuruichi

Independent

Director
OutsideIndependent

Is well acquainted with the Group’s overall business operations andmanagement, particularly in the sales & marketing division

Has been responsible for a wide range of financial advisory operations atsecurities firms for many years, and has advanced management decisionmaking capabilities, and abundant experience and knowledge that would be
useful in the Company’s management•Structure of the Board of Corporate Auditors
Name

Current positions

Kazumasa
Yamaguchi

Corporate Auditor(full-time)

Yoshihiro
Sakatani

Corporate Auditor
OutsideBoard ofBoard of Corporate
Directors Meeting Auditors Meeting Expertise
attendance/
attendance/
Attendance rate
Attendance rate

17 times/100%

14 times/100%

Finance andaccounting

Has engaged in work including settlement procedures and preparation of financial
statements in the Company’s financial division for a total of 20 years, has served as a
Corporate Auditor of the Company and the Managing Director and General Manager ofFinance & Accounting Department of the consolidated subsidiary Hory Corporation, andaccordingly has considerable knowledge of finance and accounting

17 times/100%

14 times/100%

Finance andaccounting

Is qualified as a certified public accountant, has considerable knowledge of corporate
finance and accounting, and his advice on the Company’s management from theperspective of finance and accounting as appropriate will contribute to the soundness ofaccounting for the Company

14 times/82%

11 times/79%

Law

Is qualified as a lawyer and can be expected to perform objective and neutral audits fromthe perspective of compliance. It was deemed he would appropriately fulfill his duties as
an Independent Corporate Auditor

Independent

Teiji Joko

Corporate Auditor
OutsideIndependent

Reason for appointment

Criteria for the appointment of Directors and Corporate Auditors
The appointment and dismissal of candidates for Directors and Corporate Auditors are determined by a meeting of the Board of Directors with Independent Outside
Directors and Independent Outside Corporate Auditors in attendance, based on relevant regulations including the Regulations for Professional Organization of
Officers. Comprehensive consideration is given to the career history, track record, knowledge, experience and capabilities of each candidate. Furthermore, theopinions of Outside Officers are requested in advance when necessary, and the Board of Corporate Auditors’ consent is obtained in advance for the appointment ofCorporate Auditor candidates.
[Selection criteria]
1. Directors: The basic requirements for Director candidates are having outstanding character and insight, as well as being such individuals as will contribute to the growth and improvement in thecorporate value of the Company and the Group. The candidates must have high levels of knowledge and judgment capabilities in each business field. Outside Director candidates are required to have ahigh level of expertise in a field such as taxes, accounting, law, or management. They must be able to actively state opinions from an objective and external viewpoint, reflecting a diverse background.
2. Corporate Auditors: The basic requirements for Corporate Auditor candidates are having high ethical standards and objective, fair and impartial judgment capabilities. The candidates must also havethe appropriate experience and capabilities as Corporate Auditors and a high level of expertise in a field such as taxes, accounting, law, or management. In addition to the above requirements, Outside
Corporate Auditors are required to have no conflicts regarding their independence.
For the dismissal of Officers, if an Officer has deviated from the above appointment criteria and it has been objectively deemed appropriate to dismiss him or her, a resolution shall be made at a meetingof the Board of Directors with Independent Outside Directors and Independent Outside Corporate Auditors in attendance, after sufficient discussions have been held.

Annual Report 201931

Strengthening the Management Foundations: Corporate Governance•Appointment and dismissal of the Chief Executive Officer
The Company has not established voluntary advisory committees or set any uniform standards on the appointment andevaluation regarding the appointment and dismissal of the President, who is the Chief Executive Officer. However, if it has
been objectively deemed that dismissal would be appropriate in the case of a violation of laws, regulations, or the articles ofincorporation, or a significant degradation of the Company’s corporate value, a resolution shall be made at a meeting of theBoard of Directors with Independent Outside Officers in attendance, after sufficient discussions have been held.
•Succession plan
The Company does not currently have a specific plan for successors for positions such as the Chief Executive Officer. However,
we recognize succession planning as an important management issue and are nurturing candidates from the management team(Directors and Executive Officers). We will continue to engage in constructive discussions on the approach to the appropriate
implementation and supervision of succession planning at the Board of Directors.
Evaluations of the effectiveness of the Board of Directors
Since the fiscal year ended March 2018, the Company has conducted questionnaires with Directors and Corporate Auditors regarding the effectivenessof the Board of Directors. Analyses and evaluations on the structure and operations of the Board of Directors and the role of Board of Directors were also
conducted to determine management strategy and supervisory function.
It was deemed that the effectiveness of the Board of Directors has been ensured in general. However, there is room for improvement, including theopinions that it is necessary to enhance successor development, incorporation in the evaluation of Directors, and training.
We will further improve the effectiveness of the Board of Directors based on these analyses and evaluations going forward.

Remuneration, etc. for Directors and Corporate Auditors•Remuneration system for Directors and Corporate Auditors
The remuneration of Directors consists of basic remuneration according to their position, performance-linked remuneration(bonuses) as a short-term incentive linked to single-year performance, and stock-based remuneration stock options positioned
as a medium- to long-term incentive. The remuneration of Outside Officers consists only of basic remuneration from theperspective of their roles and independence.
The fixed remuneration of Directors is determined by the Board of Directors within the limit of total remuneration provided
for in a resolution by the general meeting of shareholders. The remuneration is based on the presentation of a payment
proposal by the Representative Director and President to the Board of Directors. He or she prepares the proposal by extensively
considering factors including each Director’s position, the evaluation on the performance of duties, and the performance of theCompany. He or she also seeks advice from Independent Outside Directors.
For bonuses that are short-term, performance-linked remuneration, a proposal on the total payment amount is submitted
to the general meeting of shareholders if the single-year consolidated operating income target is achieved. Bonuses are
determined and paid within the total payment amount provided for in the resolution. The remuneration amount for each Director
is at the discretion of the Representative Director and President.
For stock-based remuneration stock options, which are a medium- to long-term incentive, within the limit of total stock options
provided for in a resolution by the general meeting of shareholders, a proposal for granting stock options based on the position
factor set in the Company’s regulations is submitted to the Board of Directors, which determines and grants the stock options.
For the fiscal year ended March 31, 2019, remuneration for our Directors and Corporate Auditors was as follows:
Total remuneration by type (¥ thousand)Category

Total remuneration(¥ thousand)Fixed remuneration

Performance-based
remuneration

Medium- to long-term
incentive (stock options)

Number of eligible
individuals (person)

Directors (excluding Outside Directors)

263,084

218,028

16,98028,076

8

Corporate Auditors (excluding Outside
Corporate Auditors)

10,000

9,600

400

0

1

Outside Officers

13,56013,560004(Notes)1. With regard to the remuneration of Directors who concurrently hold an executive position at a consolidated subsidiary, executive remuneration from theconsolidated subsidiary is not included.
2. It was resolved that the limit on Directors’ remuneration shall be up to an annual amount of ¥500,000 thousand (though not including the employee salary for
Directors) at the 49th Ordinary General Meeting of Shareholders held on June 28, 2017 (number of Officers in relation to the said resolution: 10).
In addition, it was resolved that the limit on separate remuneration as stock options shall be up to an annual amount of ¥150,000 thousand at the 43rd Ordinary
General Meeting of Shareholders held on June 29, 2011 (number of Officers in relation to the said resolution: 5).
3 It was resolved that the limit on Corporate Auditors’ remuneration shall be up to an annual amount of ¥50,000 thousand at the 25th Ordinary General Meeting of
Shareholders held on May 18, 1994. The remuneration amount for each Corporate Auditor is determined through discussions by the Corporate Auditors (numberof Officers in relation to the said resolution: 3).

32

Takamiya Co., Ltd.

Details of audit fees, etc.
For the fiscal year ended March 31, 2019, audit fees paid to certified public accountants and others was as follows:
Previous fiscal year

Current fiscal year

Category

Fees paid for audit
certification work (¥ thousand)Fees paid for non-audit
certification work (¥ thousand)Fees paid for audit
certification work (¥ thousand)Fees paid for non-audit
certification work (¥ thousand)

The Company
Consolidated subsidiaries
Total

32,000—32,000———32,000—32,000———For the fiscal year ended March 31, 2019, fees paid to Ernst & Young members firms, which are members of the same
network of the Company’s certified public accountants, was as follows:
Previous fiscal year

Current fiscal year

Category

Fees paid for audit
certification work (¥ thousand)Fees paid for non-audit
certification work (¥ thousand)Fees paid for audit
certification work (¥ thousand)Fees paid for non-audit
certification work (¥ thousand)

The Company
Consolidated subsidiaries
Total

—
3,839
3,839

—
9,471
9,471

—
4,771
4,771

714
1,092
1,806

The audit certification work for which the Company paid fees entailed tax consultation. And the non-audit certification work for which the consolidated subsidiaries
paid fees entailed preparation of corporate tax returns and consultation and others.

Communications with shareholders and investors
We endeavor to provide shareholders and investors with timely information in a transparent, fair and consistent manner. As
well as striving to disclose information in accordance with appropriate disclosure regulations, we work proactively to disclose
information that is effective in fostering a better understanding of the Company.
We aim to expand the numbers of shareholders and investors and are attempting to increase their understanding of ourbusiness activities, strategies and performance through direct communications. Specifically, we hold meetings and financial
results briefings with analysts and institutional investors, as well as make our financial results briefing videos and materials
available to the public. We are also working on adding more contents to our meeting notices and improving briefings forindividual investors.
Our main investor relations activities for the fiscal year ended March 31, 2019 were as follows:
For individual investors

Briefings for individual investors:
twice/year (total participants: 100 persons)
We hold regular briefings at the Security Analysts
Association of Japan as well as at branchesof securities companies, with our officials as
speakers. Our IR website indicates the timing of
this disclosure.

For analysts and institutional investors

Financial results briefings: twice/year(year-end, end of the second quarter)
One-on-one meetings: 72 times
At our semi-annual results briefings, the President
and Chairman and other executives summarize
our performance and provide earnings forecasts.
Materials and videos are available on our investor
relations website.

IR website

https://www.takamiya.co/en/ir/

To ensure the timeliness and fairness of disclosure,
we disclose materials on our IR website in a timely
manner. This information includes analyst reports
and historical data. We also provide in-depth
content to assist in a further understanding of ourbusiness and strategy.

Risk management, internal controls and compliance
The Basic Rules for Risk Management stipulate the basic policy and other basic matters concerning risk management.
In addition, we have established the Risk and Compliance Committee, with the General Affairs Department acting as theadministrative office. The Committee discusses issues and measures regarding the promotion of Company-wide risk
management in order to appropriately manage and respond to the variety of risks that surround our businesses.
For internal controls, we have developed a system in which internal checking operates between departments and clarifies
the division of duties by establishing internal regulations and other rules. In addition, the Basic Policy for Internal Control andthe Basic Policy for Financial Reporting outline systems to ensure that the Directors comply with laws and the articles ofincorporation when conducting operations, and also to ensure proper operations of the Company.
For compliance, we have outlined the Compliance Standards and the Code of Conduct in the Compliance Manual. We haveestablished the Risk and Compliance Committee, with the General Affairs Department acting as the administrative office,to discuss specific compliance initiatives to implement internally and to identify at early stages legal issues emerging in the
Company. Through these efforts, we aim to further raise and promote compliance awareness, especially concerning legal
issues. Additionally, we seek advice and guidance as needed from our corporate lawyers regarding our daily operations andmanagerial decisions.
Annual Report 201933

Strengthening the Management Foundations: Corporate Governance

Messages from the Outside Directors

Activating the Board of Directors to improve our corporate value
Kouji Shimokawa, Outside Director (Independent)•Role that should be fulfilled to improve our corporate
value
The fiscal year ended March 2019 concluded with results thatslightly exceeded the plan. While the industry environmentis expected to remain strong, we need to stay cautious. I
endeavor to objectively verify whether various measures
are being taken to respond to changes while always taking
into consideration the impact of changes in the external
environment on business results, from the perspective of an
external third party who can reference other companies asa benchmark. In addition, I strive to deepen the discussions
at the Board of Directors by requesting explanations on
the objectives and background of measures, while actively
making my own statements.
•Contributions that utilize experience and knowledge
It is not easy to achieve the same growth that has been
logged thus far by only engaging in business in Japan, whosemarket could contract over the long term. As such, theCompany is improving the efficiency of its operations process
and establishing new business foundations. In particular, theoverseas business is positioned as a growth business overthe medium term, and making this business profitable is an
issue. I draw on the experience and know-how I have gained
through negotiations on business partnerships and M&As
with overseas companies as a consultant to state opinions
and ask questions at the Board of Directors, with the aimof contributing to the achievement of profitability for theGroup’s overseas business.
•Recognizing and responding to current issues
The Company has achieved results through the“transformation” set forth in the new Medium-Term
Management Plan. I believe there is a clear awareness of
issues and that the measures and decisions thereof havebeen appropriate. However, it is important to continue toaim for further improvements in order to survive amid harshcompetition. Accordingly, I will work to spur discussions
at the Board of Directors by deliberately expressing my
doubts, even toward measures seemed to be appropriate,and by ensuring the careful selection of measures beneficial
to improving our corporate value from various perspectives
including accounting, law and society.

Aiming for a governance structure that allows taking appropriate risks
Noboru Furuichi, Outside Director (Independent)•Role that should be fulfilled to improve our corporate
value
The Company's new Medium-Term Management Plan isforward-looking, based on the slogan of “transformation.”
Japan is becoming a society with a declining population toan extent never experienced before, and the Company mustchange as the times change going forward.
The environment that the Company operates in willchange significantly after the Tokyo 2020 Olympic andParalympic Games. It will be important for the entire
company to have the strong determination to achieve thePlan without fail. In order to do this, the management teammust demonstrate strong leadership and respond promptly tochanges in the external environment.
As an Outside Director, I will participate in discussions
at the Board of Directors and thoroughly supervise
management, with the aim of contributing to the achievementof medium- to long-term profits for shareholders.
•Contributions that utilize experience and knowledge
Although the Company has been listed on the First Section of

34

Takamiya Co., Ltd.

the Tokyo Stock Exchange for five years, it still does not havea high level of recognition among investors. I intend to draw
on my experience in the securities industry to contribute to
the strengthening and enhancement of PR and IR operations
in particular for connecting the Company with shareholders
and other investors.
•Recognizing and responding to current issues
The construction industry will see a contraction in thedomestic market going forward. The courage to actively
take on risks, including M&As and overseas businessexpansion, will be necessary for companies to grow undersuch circumstances. Accordingly, I recognize that theestablishment and ongoing enhancement of a corporate
governance structure capable of appropriate risk-taking is
an issue.
Another issue is nurturing managers capable of leading
the next generation, while building up their experience basedon a solid plan.
As an Outside Director, I will do my best to resolve theseissues in order to achieve the Company's sustainable growth.

Strengthening the Management Foundations: Directors, Corporate Auditors andExecutive Officers (As of June 26, 2019)

Directors

Kazumasa Takamiya

Akiyoshi Takamiya

Hideki Yasuda

Tsutomu Abe

Representative Director,
President and Chairman
Supervisor of Scaffolding
Management Division

Representative Director,
Executive Vice President
Supervisor of Product Development Division
Sales & Marketing Division

Director and Managing Executive Officer
Division General Manager ofBusiness Management Division
General Manager of Corporate Planning Department

Director and Executive Officer
Division General Manager ofSales & Marketing Division
General Manager of Rental Department

Yuki Mukaiyama

Yasunori Nishioka

Kouji Shimokawa

Noboru Furuichi

Director and Executive Officer
Division General Manager ofOverseas Business Division
Supervisor of Global Procurement Division
Business Development Division

Director and Executive Officer
Division General Manager of
Manufacturing Division
Supervisor of Scaffolding
Quality Assurance Division

Director

Director

Kazumasa Yamaguchi

Yoshihiro Sakatani

Teiji Joko

Corporate Auditor (full-time)

Corporate Auditor

Corporate Auditor

OutsideCorporate Auditors

OutsideIndependent

OutsideIndependent<Important concurrent positions>Representative Partner of Shimokawa &Partners Accounting Corporation
Chairman of the Board of
GLOBAL CORPORATE CONSULTING, INC.
Director of Mitsuboshi Co., Ltd. (Audit Committee Member)

Independent

Outside<Important concurrent positions>
President and Representative Director ofJapan Management Consulting K.K.
Director of Pressance Corporation Co., Ltd.
(Audit Committee Member)
Director of Watts Co., Ltd. (Audit Committee Member)
Director of SHO-BI Corporation (Audit Committee Member)

Independent<Important concurrent positions>
Corporate Auditor of G-7 HOLDINGS INC.
Corporate Auditor of Onamba Co., Ltd.

Note:
Kouji Shimokawa and Noboru Furuichi
are Outside Directors. Yoshihiro Sakatani
and Teiji Joko are Outside Corporate
Auditors. The Company designatedthese four as Independent Directors
and Independent Corporate Auditors
pursuant to the regulations of the Tokyo
Stock Exchange and registered them assuch at the stock exchange.

Executive Officers
Kazunori Kawakami

Takahiro Shozaki

Koichi Nishihashi

Tomoya Tatsumi

Senior Executive Officer
Deputy Division General Manager
Sales & Marketing Division
General Manager ofScaffolding Construction Department

Executive Officer
General Manager ofSales & Marketing Planning Department
Sales & Marketing Division

Executive Officer
General Manager ofGeneral Affairs Department
Business Management Division

Executive Officer
General Manager ofFinance & Accounting Department
Business Management Division andManager of Finance Section

Hidehiko Yamashita

Hideo Kato

Takashi Masuno

Takashi Nagumo

Executive Officer
General Manager of Sales Department
Sales & Marketing Division

Executive Officer
Tokyo Branch General Manager
Sales & Marketing Division

Executive Officer
Division General Manager ofScaffolding Quality Assurance Division

Executive Officer
Division General Manager of
Product Development Division andManager of Building Material Design Section

Mitsunori Yamato

Tetsuya Aoki

Ryuji Arai

Hiroshi Koda

Executive Officer
Division General Manager ofScaffolding Management Division andGeneral Manager of Scaffolding
Purchasing Department

Executive Officer
Division General Manager ofBusiness Development Division andGeneral Manager of Product Research
Planning Department

Executive Officer
Division General Manager of
Global Procurement Division and
Deputy General Manager ofOverseas Business Department
Overseas Business Division

Executive Officer
General Manager of
Manufacturing Division and
Vietnam Factory General Manager

Annual Report 201935

Strengthening the Management Foundations: Human Resources Strategy

Sustainably improving our corporate
value through the promotion ofdiversity and work-style reform
Business strategies and personnel strategies are the two sides of the same coin. Strengthening the managementfoundation is one of the basic policies of the Company’s current Medium-Term Management Plan, and humanresources development is essential to its achievement. In addition, we are focusing on investments in humanresources development and work-style reform as part of our investment policy.
In this section, we will describe our approach to the Company’s human resources strategy and its initiatives.

“Set a management vision and work out a strategy.” In doing so,
we must have not only outstanding strategies and tactics, but also
assign appropriate personnel to appropriate departments in orderto improve corporate value and produce results.
Takamiya has set “transformation” as our slogan in the current MediumTerm Management Plan. We are implementing growth strategies under avariety of themes in order to achieve sustainable growth, including productivity
improvements by way of harnessing AI and IoT, strengthening the overseas
business, the development of new businesses that produce earnings, andshifting our focus to manufacturing business and strengthening development
capabilities for producing outstanding and high value-added products.
As the Group transforms the nature of its business and business category,
the nature of its business is becoming more diverse, with its operations
changing as well. For example, the Company is introducing AI and RPA(robotic process automation), and in the future, operations that have been
dependent on manpower thus far will be replaced by robots that fully utilize
AI technologies. We believe this will allow human resources to be active ina broader range of new operations, increase the mobility of personnel, andprovide advantages in securing labor power in the face of declining birthrates
and an aging population.
In order to gain advantages in securing human resources, a pressing issue isthe enhancement of personnel systems including education, training and careerdevelopment that enable the Group’s human resources to be active in various
fields. Furthermore, the introduction of “same job, same pay” policy issued
by the Ministry of Health, Laborand Welfare that aims to reduce
disparities in treatment between
regular employees and non-regular
employees could encourage
liquidity in the entire labor market.
If we are able to appropriately
incorporate this system and others
into our personnel systems, wewould have advantages in thehiring of personnel that havebecome more fluid and in securinga labor force.

36

Takamiya Co., Ltd.

Visualization of information using infographics(Note) T he images represent information from thetime when the infographics were createdand may differ from current figures.

Expansion of our personnel activities to the global stage(As of March 31, 2019; the number of persons and the ratio include non-consolidated subsidiaries)

Number of business locationsin Japan and overseas

Number of employees at each overseas business location

99

Japan:
92
Overseas: 7

Hory Korea

Ratio of overseas employees
to all employees

32.7%

Number of Japaneseemployees working atoverseas business locations

85

10

499
persons

HORY VIETAM

100

1,527
persons

Cadian Vietnam

173

Number of employees atoverseas business locations

Employees with foreign
nationalities working
within Japan

55

DIMENSION-ALL

152

509
357

2016

Cadian Myanmar

2019

2020

3

Diversity in human resources means that we can take advantage
of diverse ideas and ways of thinking in management andbusiness operations. In order to diversify, we enhance working
environments and promote diverse working styles.
As a result, ideas that lead to increased productivity will be born.
In the construction industry, which comprises the Company’s main customers,
the participation of women has become noticeable in areas such as thefield supervision and design department. We are also working to develop an
environment that allows for the active participation of women as an important
human resources initiative.
Until recently, female employees had been assigned to clerical positions to
conduct work under male employees in regular positions who managed theflow of overall work and individual tasks at Takamiya. As a result, the female
managers ratio at the Company is almost zero. On the other hand, female
employees have been placed in management positions for some time now at
Group companies, some of which now have female Directors.
Going forward, we will improve work environments by eliminating outdated
biases related to gender and job types, and by creating frameworks to ensurethat tasks are not reliant on particular individuals. The aim is to establish
a structure that allows qualified individuals to take on work regardless ofgender and other factors. By identifying the nature of the work and giving
chances for everyone to take on, we are able to create a workplace in which

Annual Report 201937

Strengthening the Management Foundations: Human Resources Strategy

Female employees succeeding under the diversity plan

Ensuring worksite safety from a perspective that is
distinctly female
Kaori Kimi, Scaffolding Safety Control Department, Sales & Marketing Division

A job for the scaffolding-safety management at theconstruction site became available to female employees,
who would be expected to actively participate in the field aspart of the Diversity plan. Until then, I had provided support
for sales and scaffolding construction management in rentals
and construction as a clerical worker. So being able to go out
in the field to directly support safety seemed very attractive
to me.
As included in the aims of the Diversity plan, I believedthat female employees could make proposal from a uniqueperspective. So I applied for this job offer to be a pioneer inrealizing the ideas. Although there were some issues that I
struggled with at the beginning, I have now gained the trustof our customers. Our primary contractors and others havetold me, “It really helps having various things pointed out
from a perspective that is distinctly female.”
I have been on the job for more than one year now. I
plan to further learn about the laws and regulations related
to scaffolding going forward, so that I can work with evenmore confidence to improve safety. I myself would also
like to significantly increase the opportunities for the active
participation of female employees.

individual can succeed regardless of gender or nationality. The foundation of
the Company’s human resources strategies involves fostering an environment
in which individuals from various environments who have diverse values can
succeed and establishing a free and open corporate culture that encourages theexchange of opinions.

Implementing work-style reform to achieve diverse work styles
and improving productivity as a result. That is the true meaning ofwork-style reform.
There is a tendency to define work-style reform as something for improving acompany’s productivity. However, doing so limits the reform measures to thosethat are directly linked to productivity improvements.
Diverse ideas and ways of thinking can give birth to breakthrough ideas inways that are not based on preconceived notions or past successes. To ensurethat this potential is not neglected, we believe that the purpose of work-style38

Takamiya Co., Ltd.

reform must be to create a work environment that enables diverse personnel toachieve diverse work styles.
The idea that work is a means for enriching life is becoming instilled as acommon way of thinking recently. To put it the other way around, if there is aclear sense of purpose to enrich lives, we believe it will improve the motivation
toward work and encourage employees to work as efficiently as possible andimprove productivity as a result.
Management must also have flexible ideas to create an environment thatallows employees to think of and achieve new work styles on their own. In
this direction, the management have to present the minimum results andrequirements, rather than common measures covering all executives andemployees needs. By extending this approach, the foundations for productivity
improvements based on diverse ideas as well as development of future
management and executive human resources will be built.

We promote visualization of the company’s information.
Knowing about the current situation can generate food forthought. Presenting a career plan can set in motion the voluntary
thrust toward self-realization.
With regard to career planning, if many
options are offered and systems andframeworks for achieving career goals
are provided, then voluntary actions toachieve the career goals will be naturally
encouraged. The systems and frameworks
that encourage autonomy are needed here
as well. Throughout the Company, we areworking to create an environment for careerdevelopment that allows employees to think of methods that fit them by
disclosing a variety of information and providing opportunities for learning.
While encouraging autonomy, management also must provide information
on what must be done, what should be aimed for, and the current situation.
Moreover, it is important to clearly indicate what skills and knowledge should
be obtained to put our strategies in practice and achieve our targets.
It is important to synchronize the ideal personnel sought by the Company
and career development. If the capabilities required are challenging, various
incentives should be provided to encourage executives and employees totake on the challenge. In addition, because it will not be easy to acquire thepersonnels who have the capabilities required for achieving the management
goals, we are focusing on training and nurturing employees in addition to hiring.
We believe this will lead not only to the achievement of the management
strategies and reaching performance targets in the current Medium-Term
Management Plan, but also to the Group’s sustainable growth.

Communicating information internally andexternally through signage installed in reception
rooms and hallways

Disclosure of various information related to career development

Annual Report 201939

Helping to Tackle Social Issues Through Our Business

Providing social value through ourbusiness based on the themes of safety,
the environment and workability
The issues facing society have become more diverse and their impact has continued to
expand. Companies must respond to these issues through their businesses and strengths
and provide value to society in order to contribute to a sustainable society and achieve
growth.
Takamiya has engaged in business based on the themes of safety, the environment andworkability, even before ESG efforts came into focus. In this section, we will introduce someexamples of our response to social issues through our products and businesses.

Contributing to improvements in safety and efficiency
in the construction industry: Iq System
For approximately half a century, the height of scaffolding in Japan was 170 cm,
in line with the average height of an adult male of 50 to 60 years ago. Because
the average height has since grown to 172 cm, many workers must crouch
down while working with safety shoes and helmets on, leading to work-related
injuries and accidents.
By making the floor height 190 cm for the Iq System, our next-generation
scaffolding, we have secured a large space that allows for working without
crouching. We have also improved safety by eliminating gaps at the feet. In
addition, it is designed to be lightweight and compact when stored. This also
contributes to easing a severe shortage of drivers by enabling transport withfewer trucks than in the past.

Iq System

Damping device that protects housing from earthquakes:

WUTEC
Japan has frequent earthquakes, and the safety of housing cannot be discussed
without mentioning earthquake resistance. In light of the frequent damage
from large-scale earthquakes in the past, it has been recognized that the former
earthquake-resistance strength standards are insufficient, and that anti-seismic
reinforcement to comply with the new standards is a pressing issue.
Our WUTEC is a residential damping device that can reduce the swinging
width of buildings by 80%. There is no deterioration in performance fromdegradation over time or temperature change, and the device functions under
any environment. In addition, because it is possible to simply replace theload-bearing walls of existing houses with WUTEC, quick and simple seismic
reinforcement is possible. We protect lives from unexpected major earthquakes
and contribute to not only the safety of residents, but also the creation of a safe
society.

WUTEC

Damping that supports ultra-high-rise buildings to low-level buildings:

Oct-brace
There has been growing demand for urban development and high-riseapartments, due in part to the recently announced plans to hold many largescale events. In addition, much attention has been focused on damping andanti-seismic measures for buildings underpinned by the frequent occurrence ofearthquakes.
Oct-brace40

Takamiya Co., Ltd.

Oct-brace, our buckling constraint (damping) brace, can be handled as abrace that does not yield. It is also a piece of structural equipment that can beused as seismic reinforcement for buildings such as logistics warehouses withlarge floor areas and medium-, low-, and high-rise buildings. Because it is madeof aluminum, it is lightweight and does not require maintenance. In addition, afewer number of bolts means it can be installed efficiently. With this product,
we contribute to the establishment of safe urban development by resolving
issues related to seismic reinforcement and a reduction of construction costs.
Contributing to the maintenance and repair of small bridges:

AOS Construction Method
Bridges and transportation infrastructure constructed nationwide during Japan’s
era of high economic growth are aging. Maintenance and repairs to ensure theirsafety are urgently needed.
Our AOS Construction Method integrates joint replacement work for small
bridges and road floor slab waterproofing work, which shorten the work periodby 50% and reduce the cost by a little over 15% compared to conventional
methods. The method is expected to be used in small-scale bridge maintenancebecause it can easily be implemented at room temperature and no large-scale
work is required. We will contribute to establishing the safe living of local
residents through this method.

AOS Construction Method

Agricultural houses with outstanding weather resistance:

G-Castle Series
A shortage of farmers is becoming a serious issue, and the national and local
governments are implementing assistance measures in response to the serious
challenge of food self-sufficiency. In addition, there have been many casesof agricultural houses being destroyed by disasters such as typhoons, with
farmers abandoning reconstruction work and quitting agriculture.
We are actively pursuing the development, manufacturing, and constructionof agricultural houses in response to these issues. In the field of agriculture,
progress has been made in technological improvements in intangible aspects.
As for the tangible aspects, there is the issue of insufficiency for suppliers thatprovide greenhouses at low price with outstanding structural design. We areresponding to this issue by taking advantage of the technologies and knowhow fostered through the development and manufacturing of constructionuse temporary equipment and materials, and provides a one-stop service
ranging from the supply of products to construction with outstanding weather
resistance. Furthermore, we will continue contributing to the field of agriculture
going forward through such means as improving the production efficiency by
combining intangible measures such as environmental control.

G-Castle series

Responding to the maintenance and repair needs of infrastructure:

SPIDER PANELSPIDER PANEL is a panel-type hanging scaffolding that minimizes gaps andunevenness and improves safety and workability. Hanging scaffolding is a typeof scaffolding that is installed through suspension with chains, and it is a pieceof equipment that plays an important role in maintenance and repair work on
infrastructures, including railways and highways, which is expected to increasein the future. With maintenance and repair needs growing, there is a shortageof workers in the construction industry, with supply not able to keep up withdemand.
Takamiya will provide a working environment that enables construction
workers to perform efficiently and safely and contribute to improvements in
productivity and safety in the field.

SPIDER PANEL

Annual Report 201941

Our Main Products

Temporary equipment and materials

YT Lock System

VMAX

G Walk

Dimple Post X

Enables setting up along slopes.
It can also be used as a gantry.

Hanging-type scaffolding withhigh workability that is used for
repair work for bridges.

A catwalk panel with fewer gaps
to prevent stumbling and falling
objects.

Supports the safety and lives ofworkers while they are under thebeams for work including steel
construction and ridge beam
operations. It is lightweight andeasy to carry.

ClampsStanding Bear

Power Frame

AL-SPEEDER

Bolted fastening-type metal
fittings, important part of
temporary equipment

Enables safe assembly anddisassembly and significant laborsaving, with structures that include
lifting equipment, baseboards, andhandrails as one unit.

Wedge-type support system thatfits to the shape of a structure in a
flexible manner

Light-weight equipment made by
Aluminum, which can be used forany types of scaffolding, improves
workability. It also can be piled up.

Formwork

Building materials

STENMETAL (Steel form)

Cap Ten Pile Method

WUTEC

Oct-brace

Steel form enhancing crosssectional performance with its
rib height of 72mm. It can also be
used with a wooden form.

Method enabling correspondence
to the large-scale grounddeformation due to an earthquake
and reduce damages to piles.

Seismic damper enabling
reduction of vibration range ofbuildings up to 80%.

Structural device with a seismic
damping function that can beused for buildings of any heightfrom high-rise buildings to lowrise structures.

Environmental equipment

Agricultural materials

ECHO BARRIER

H2 System

Steel Frame House Pro II

Weather-Resistant Pipe House

Soundproof sheets reducing noise
by absorbing sound. It is used tosoundproof school and hospital
facilities.

This method, in which solar
modules are supported with
H-steel piles placed in one lane,
reduces the amount of frame
materials.

Called a Dutch Light-type highsteel frame house, it is suitablefor high-wire method crops andperfect for large-scale cultivation.

This agricultural greenhouse does
not deform easily under harshconditions caused by natural
disasters.

42

Takamiya Co., Ltd.

Corporate Information

Corporate Outline (As of March 31, 2019)
Name
Date ofestablishment

Takamiya Co., Ltd.
June 21, 1969

CapitalRepresentative

Headquarters

Grand Front Osaka Tower-B Bldg. 27F, 3-1,
Ofuka-cho, Kita-ku, Osaka 530-0011, Japan

Number of
employees

Share Information (As of March 31, 2019)

Breakdown of Shares
by Type of Shareholders

Share data
144,000,000
45,467,600
2,923

Total number of issuable shares
Total number of issued shares
Number of shareholders¥732,130,000
Kazumasa Takamiya
Representative Director, President and Chairman
Consolidated
1,204
Non-consolidated 668

Principal Shareholders

Financial instruments firms

Individuals and others

0.32%

52.01%

135 thousand shares

Shareholders

Number ofPercentage
shares heldof shares(thousand shares) held (%)

Takamiya Ltd.
Tojitsu Takamiya
Japan Trustee Services Bank Ltd.
(Trust account)
Akiyoshi Takamiya
Kazumasa Takamiya
Sky Rainbow Employee Stock
Ownership Community
Toyoji Takamiya
Chikako Takamiya
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Kanamoto Co., Ltd.

6,725
5,356

15.69
12.50

3,770

8.80

2,246
2,109

5.24
4.92

2,104

4.91

1,678
1,579
907
888

3.92
3.69
2.12
2.07

22,290 thousand shares

Foreign institutions and others

4.83%

2,070 thousand shares

Financial institutions

21.10%

9,044 thousand shares

Other Japanese companies

21.74%

9,318 thousand shares

Notes: 1. The Company holds 2,606 thousand shares of treasury share. Treasury
share is excluded from the above.
2. Percentage have been rounded to the second decimal place.

Notes: 1. The Company holds 2,606 thousand shares of treasury share. Treasury
share is excluded from the list of major shareholders and is not usedin calculating percentages of shares held.
2. Percentage have been rounded to the second decimal place.
3. Among above number of shares held, shares related to trust services
is as follows.
Japan Trustee Services Bank, Ltd. (Trust Account) 3,768 thousand shares

Stock Prices and Trading Volume
Trading volume (1,000 shares)

Stock price (¥)

900

9,000

600

6,000

300

3,000

0

4

5

6

7

8

9

10 11 12

1

2016

2

3

4

5

6

7

8

9

10 11 12

1

2

3

4

2017

5

6

7

8

9

10 11 12

2018

1

2

3

0

2019

Shareholder Information
Fiscal year
Securities code
Ordinary general meeting of shareholders
Record date
Share trading unit
Transfer Agent and Registrar
for Common StockContact for Transfer Agent and Registrar

Method of public notice

From April 1 to March 31 of the following year
2445 (the First Section of the Tokyo Stock Exchange)
June
Ordinary general meeting of shareholders: March 31 /Year-end dividend: March 31 / 2nd quarter-end dividend: September 30
株価始値
100 shares
Mitsubishi UFJ Trust and Banking Corporation
Osaka Securities Agent Department, Mitsubishi UFJ Trust and Banking Corporation
3-6-3, Fushimi-cho, Chuo-ku, Osaka-shi, Osaka 541-8502, Japan
TEL: 0120-094-777 (toll-free)
By electronic notification on TAKAMIYA’s website: https://www.takamiya.co/en/
However, if electronic notification is not possible due to an accident or other unavoidable
circumstances, notice will be published in the Nihon Keizai Shimbun newspaper.
Annual Report 201943

Takamiya Co., Ltd.
Grand Front Osaka Tower-B Bldg. 27F, 3-1, Ofuka-cho, Kita-ku, Osaka 530-0011, Japan

www.takamiya.co/en/

2018.09.AAA.00

T +81-6-6375-3900