Value Creation and Growth Strategies in Line with the Medium- to Long-term Management Targets
Segment Information

Net sales and percentage to total

Interior Fittings

38.6%

36,598million yen

Automotive Textile andTraffic Facilities

57.3%

54,314
million yen

Overview of business resultsfor FY ended May 2023
Although sales of household carpets
were affected by a reactionary decline
after the high demand during the
COVID-19 pandemic, sales ofcommercial carpets increased thanks
to a large order intake. Total net sales
in the Interior Fittings segment
increased also because of the contribution from sales of the space designbusiness due to the adoption ofcomprehensive proposals for interiormaterials and furniture. Sales of wallcoverings also remained firm owing to
the effect of price revisions and otherfactors.

Automotive-related sales increased,backed by a recovery in domestic
automobile production in addition to
the favorable impact of foreignexchange rates. The traffic facilities
business saw a rebound in demandfor products for railway refurbishingworks as well as interior textiles forbuses. Segment income increased,reflecting the gradual spread oftransactions at reasonable prices aswell as the business structural reformat the Company’s subsidiary in the
United States.

3.7%

Trends in business results
Net sales

Segment income■Results(Million yen)
40,00033,30030,00031,02432,811■Plan

36,598 36,640

Functional Materials

3,550
million yen

Ratio of segment income■Results(Million yen)

■Plan

●Results

（％）
3.0

1,200

911

900

977

1,070

●Plan

2.9

2.8
2.7

2.0
600

20,000

472

1.9

579
1.0

0

0
2020

2021

2022

2023

2024

Net sales

0
2020

2021

2022

2023

2024

Segment income■Results ■Plan(Million yen)
60,00054,31454,07558,80040,000■Results

3,630
2,652
2,102

2021

2022

2023

2024

■Results■Plan

3,548 3,550
3,130

3,000

3,200

2021

2022

6.2
6.0

4.9

4.7

4.1

2023

2024

2020

2021

2022

■Results

■Plan

4.0

90

79
-87

-192

-30

3.0

2.6

2.0
1.0
-200

0
2020

2021

2022

2023

2024

2024

（％）

-100

1,000

2023

5.0

0

2,000

●Plan

Ratio of segment income(Million yen)

100

●Results

（％）

0
2020

200

3,928

2024

2.0

Segment income(Million yen)

2023

2.5

1,127

0
2020

2022

4.0

2,230

1,000
0

2021

8.0

2,000

20,000

■Plan

5,000

3,000

2020

Ratio of segment income(Million yen)

4,000

45,102 45,005

4,000

1.4

300

10,000Net sales
Sales of fabric-coated heatingproducts increased because of pricerevisions to cover higher raw material
prices and surging import costs,
despite a decrease in new orders.
Orders for floor materials forbathrooms also remained steady.
Other contributing factors to theincrease in segment income include
the completion of the consolidationof factories in China and Vietnam in
the previous fiscal year.

(For each FY ended May 31)

2.0

0
2020

2021

2022

2023

2024

2020

2021

2022

2023

2024

* The above data for the fiscal year ending May 2024 are the forecast figures for consolidated financial results that were disclosed on July 14, 2023.

19

SUMINOE GROUP Integrated Report 2023

SUMINOE GROUP Integrated Report 2023

20

Value Creation and Growth Strategies in Line with the Medium- to Long-term Management Targets
Strategies by Segment

Interior Fittings
Review and Future Prospects by the Officer in Charge

Business Details
Wholesale of interior textiles for commercial use (in Japan and overseas), interior finishing work (curtains, carpets, wallpaper, plush
hand-woven curtains, hand-woven carpets and hooked rugs, etc.), wholesale of household interior textile products, EC business, store
design and construction (Space Design Business), sales of curtains and other optional items, and production and sales of arts and crafts

Major Products

Against the backdrop of the economic recovery trend,
we achieved both sales and profit growth in FY2023.
We will strengthen the space
Norihisa Murase
design business.
Director
Division Manager
Interior Textile Business Headquarters

Review of FY Ended May 2023 (Results and Future Challenges)
Carpet tiles

AVANCERA FLOOR

Doncho (plush hand-woven curtains that
separate a stage from the auditorium)

Dantsu (high-class hand-woven
carpets and hooked rugs)

Rugs and mats

Curtains

Wallpaper

Fusuma paper (paper for sliding doors)

Nishijin brocade fabricCoin purses and card holders

SWOT Analysis
Strengths

Weaknesses

The appeal of eco-friendly products cultivated through many
years of our efforts to address environmental issues● Sales capabilities taking advantage of the Group’s multiple
functions as a manufacturer, wholesaler, and constructor● System covering from designing of the entire space to final delivery● Capabilities for manufacture and development of traditional
craftwork based on techniques refined for many years● Product development and sales capabilities throughcooperation with other segments●

Low brand awareness due to insufficient public relations● Decreased demand for roll carpets, one of the mainstay
products of this segment● Disadvantageous location and limited accessibility of local
showrooms● Inefficient logistics because of the fact that wallpaper andinterior products are handled by different management
systems at different operation bases●

Opportunities

Reduction in the interior market scale due to the decreased
number of new housing starts, etc.
● Soaring prices of raw materials such as crude oil, and risingenergy and logistics costs● Unstable supply of raw materials due to fewer supply chains● Shortage of certified skilled workers due to aging and decreased
demand● Rising transportation expenses due to a shortage of transportation
drivers●

Companies Engaged in the Business
Suminoe Textile Co., Ltd., SUMINOE Co., Ltd., RUNON CO., LTD., Suminoe Logistics Co., Ltd., TANGO TEXTILE Co., Ltd., Suminoe WorksCo., Ltd., Sewing Hyogo Co., Ltd., CPO Co., Ltd., PRETERIOR-TEXTILE Inc., Kyoto Traditional Art and Craft Factory of Suminoe Textile Co.,
Ltd., Suminoe Techno Co., Ltd.

Strategies and Measures and Progress Assessment for FY Ended May 2023
Strategies and measures

21

Progress

Strategies and measures

Progress

Expand lineups of environmentally friendly products
and increase sales of these products.

○

Reduce inventory levels.

○

Commercialize and launch anti-virus wallpapers.

○

Strengthen directly operated EC business.

○

Enhance transmission and penetration of our brand image.

○

Simplify delivery.

×

Develop new products for housing.

△

SUMINOE GROUP Integrated Report 2023

interior products, generated synergy effects together with ourexisting businesses. Our comprehensive proposals for interiormaterials and furniture were adopted by large stores, representing
the first step toward market penetration.
As for products, encouraged by further growing
environmental awareness, both sales quantity and market
recognition of ECOS®, eco-friendly carpet tiles under the horizontal
recycling system, greatly improved. Moreover, for generalhousehold use, we launched rugs and mats for pets, such as dogs
and cats. In this manner, we were vigorous in business expansion
into other industries.

Future Prospects (Toward Achieving the SGW 2024)

Threats

Increased demand for carpet tiles due to the addition of“disclosure of CO2 emissions” to evaluation criteria for carpet tile
procurement under the Act on Promoting Green Purchasing● Growing interest in interior materials due to lifestyle changes● Increased demand in overseas markets after the removal ofrestrictions on overseas travel● Improved evaluation of Japanese textiles of traditional arts andcrafts due to consumer preference for high-end products●

In fiscal year ended May 2023, the Interior Fittings segment
achieved both sales and profit growth. This was due primarily to alarge order for products adopted by building redevelopment
projects, mainly in the Tokyo metropolitan area, and renovations ofaccommodation facilities that were resumed in response to therecovery in demand from inbound tourists. The profit growth isattributable to solid performance of RUNON CO., LTD., a subsidiarythat handles wall coverings, which made a revision of productprices in FY2022 because of soaring raw material costs. In the spacedesign business, CPO Co., Ltd., which is engaged in designingvarious retail stores, and PRETERIOR-TEXTILE Inc., which sells

As in FY2023, we will first work to expand sales ofenvironmentally friendly products, centering on ECOS®, and ouroriginal highly functional products. Along with such efforts, wewill strengthen the space design business to offer people- andsociety-friendly spaces that are more comfortable and ensure
greater safety and peace of mind on a one-stop basis.
To improve the profitability, I think it is important todevelop and launch high-grade products, which have still beenin the planning stage until now. We will improve theprofitability by proposing products that differentiate us fromother companies. Primary among them are more luxurious
carpets for general household use, such as hand-made rugs
manufactured by TANGO TEXTILE Co., Ltd., which has a track

Progress

record of delivering products to renowned hotels. Meanwhile,
the prices of raw materials still continue to surge, exceeding the
maximum we can absorb as a manufacturer. By selling products
at reasonable prices, we will maintain our product quality andsecure proper inventory, thereby ensuring profit.
The economy has begun to move forward along with theeasing of behavioral restrictions against COVID-19. The Interior
Fittings segment will keep pace with this positive trend, withdetermination to aggressively expand business both in Japanand abroad. The SUMINOE GROUP commemorated its 140th
anniversary in 2023. I will strive to better operate this businesssegment so that it can play a role in supporting people’s daily
life.

Increasing the recognition of SUMINOE Co., Ltd. through public relations—Measures to enhance transmission and penetration of our brand image

SUMINOE Co., Ltd., which plays a pivotal role in the Interior
Fittings segment, has been working to strengthen PR
activities.
In the fiscal year ended May 2023, the company put atie-up advertisement featuring an interview in anarchitecture journal, with the purpose of improving thebrand image and recognition of SUMINOE Co., Ltd. andECOS®.
The company also actively implements measuresthrough the web. For example, it has been continuing todisseminate information while making effective use of
several building materials databases. SUMINOE also plans toredesign its website after reviewing all the contents from theviewpoint of users. In parallel with such activities, thecompany strives to continuously improveinformation sharing via social media. In sodoing, it aims to widely publicize various
brand products of SUMINOE Co., Ltd. to not
only B-to-B suppliers but also B-to-C end
Website ofusers.
SUMINOE Co., Ltd.
(Japanese only)

SUMINOE GROUP Integrated Report 2023

22

Value Creation and Growth Strategies in Line with the Medium- to Long-term Management Targets
Strategies by Segment

Automotive Textiles and Traffic Facilities (Automotive Textiles)
Review and Future Prospects by the Officer in Charge

Business Details
Development, production and sales of automotive interior products (ceiling materials, seat covering materials, floor carpets,
luggage compartment, car mats, and other interior products in general), automotive exterior textile products (wheel houses,
engine covers, and other textile products). Our products are supplied to all Japanese automobile manufacturers.

Promoting new projects to meet the needs ofa once-in-a-century transformation period
Toshiro Maruyama

Major Products
Ceiling material
Seat covering materials
Seat backSun visor

Managing Director
Division Manager
Automotive Textiles Business Headquarters

Door trim
Luggagecompartment

Review of FY Ended May 2023 (Results and Future Challenges)
Floor carpet
Wheel house

Car matSeat covering materials

Floor carpet

Car mat

SWOT Analysis
Strengths

Weaknesses

Capability for total coordination of automotive interior products
Global manufacturing system that enables stable quality andsupply● Strong global supply chain● Capability for development and proposals of new materials throughintegration of technologies developed in multiple businesses● Capability to adopt to the environment as a manufacturer●●●

Insufficient consolidation of technologies and expertisepossessed by overseas operation sites

Capability to deal with price fluctuations caused by external
factors● Delay in launching the restructuring of the North andCentral American business●Threats

Response to the automotive industry, which is in the age oftransformation represented by CASE and NEVs●

Increased demand for environmentally friendly products●

Increased demand for textile-based products that arelightweight and excel in noise-absorbing performance●

Sluggish sales of Japanese manufacturers in China●

Intensified price competition●

New entry of overseas manufacturers that produce automotive
interior textiles and seat covering materials into the market●

Increasing cost of production due to soaring energy costs

Companies Engaged in the Business
Suminoe Textile Co., Ltd., Suminoe Logistics Co., Ltd., Suminoe Teijin Techno Co., Ltd., Teijin Tecloth Ltd., Owari Seisen Co., Ltd.,
Suminoe Techno Co., Ltd., Suminoe Textile of America Corporation, Bondtex, Inc., Suminoe Textile de Mexico, S.A. de C.V., SPM
Automotive Textile Co., Ltd. Suzhou Suminoe Koide Automotive Accessories Co., Ltd., Suminoe Textile Shanghai Co., Ltd., T.C.H.
Suminoe Co., Ltd., Suminoe Koide (Thailand) Co., Ltd., PT. Sinar Suminoe Indonesia, PT. Suminoe Surya Techno, Suminoe Teijin Techno
Krishna India Pvt. Ltd.

Strategies and Measures and Progress Assessment for FY Ended May 2023
Strategies and measures
Development, sales promotion and effective useof environmentally friendly products
Development of interior materials fornext-generation vehicles
Cost reduction through the optimization ofmaterial procurement
Horizontal development to overseas markets

23

SUMINOE GROUP Integrated Report 2023

Progress

Strategies and measures

Progress○

Development of products, focusing on “new parts” and“production with less man-hours” as key words
Development of fabric materials using new production
methods
Development in accordance with the situations andissues of each global operation site

○

△
△
△

Regarding capital investment, we promoted the developmentof products that are expected to be profitable in the future andactivities to propose these products. In addition, we introduced
machines to develop new technologies in Thailand, China and Mexicoand made preparations for a new factory for synthetic leather
production.
The automotive industry has entered a once-in-a-century periodof transformation, with carmakers accelerating the development ofelectric vehicles toward 2030 while promoting initiatives for ESG and
the SDGs. As part of our efforts to respond to the transformation, we
launched a new fabric development project. Project members
gathered from development, sales and technological departments towork together to create products that add further value toconventional sustainable materials and design items using embossing
and embroidery.

Future Prospects (Toward Achieving the SGW 2024)

Opportunities●

In the fiscal year ended May 2023, the Automotive Textile business
continued to confront extremely harsh conditions, such as theconfusion in supply chains caused by the spread of COVID-19, theshortage of semiconductors, suspended operations by automotive
manufacturers, the impact of the weaker yen on imported materials,
and soaring prices of raw materials and energy due to high crude oil
prices. Under such circumstances, net sales and segment income fellsignificantly below the planned figures. However, by focusing on costsaving, cost reduction and quality improvement measures with theunderstanding and cooperation of the entire automotive industry, wewere able to minimize the impact of inflated raw material prices.
As for profitability improvement of a North American subsidiary,
which was one of our concerns, it is almost certain to achieve
profitability as a result of measures to restructure the production
system and strengthen coordination with a subsidiary in Mexico.

○△

We regard the third year of the SGW as a breakthrough year, in which
we will promote initiatives on four key themes, aiming at winningcustomer trust through our high capabilities for product development
and production proposals.
The first theme is to “further strengthen operation bases in North
and Central America.” At our subsidiary in Mexico, we plan to complete
the construction of a new synthetic leather factory and hold its opening
ceremony within 2023. It is the first time in several years for the Groupto construct a new factory. We will move to the next step throughmanufacturing of products that will trigger a revitalization of struggling
subsidiaries in North and Central America, development of new
products, and expansion of our market share.
The second theme is to “reinforce the fabric business.” We will
promote the adoption of ECONIX*, a seat covering material that utilizes

Progress

スミトロン® (SUMITRON), and sales expansion of decorative fabricmaterials by further strengthening product planning, development andproduction, aiming at increasing orders received for fabric products.
The third is “human resources development.” We will nurture
personnel who can play multiple roles, and we will develop the practicalskills of employees.
The fourth is “specific strategies on a medium- to long-termbasis.” We will design specific strategies tailored to the situations andfeatures of the respective 17 operation sites in Japan and abroad, andwe will visualize a roadmap to the achievement of their businesstargets.
* ECONIX: Fabric using an eco-friendly yarn made from recycled
chips. It is highly durable and excels in stain resistance andprevention of ﬁbrillation by friction.

Applying products of other businesses as automotive textiles—Development of products, focusing on “new parts” and “production with less man-hours” as key words

We have started to promote sales of floor signage film fortrains and buses, which is originally a product of the Traffic
Facilities business, as an interior item that is used to prevent
scratches in a car. First, the film was adopted by Nissan MotorCo., Ltd. as a protection film for the luggage compartment of
SERENA e-POWER (launched in April 2023). Going forward,
we will develop a product making effective use of the film’s
scratch-resistant and decorative properties, with a view toproposing its applications to other components, such as
interior panels, sidestep garnishes, and luggage entry
guards. To expand sales ofsuch film, we will promote it
to automobile manufacturers.
Luggage protection film

SUMINOE GROUP Integrated Report 2023

24

Value Creation and Growth Strategies in Line with the Medium- to Long-term Management Targets
Strategies by Segment

Automotive Textiles and Traffic Facilities (Traffic Facilities)
Review and Future Prospects by the Officer in Charge

Business Details
Production and sales of interior materials mainly for trains and buses (seat coverings, wall materials, curtains, flooring materials, seatcushion materials, etc.) We have supplied our products to a variety of customers. For trains, these customers include JR, private railways
and publicly operated transportation services. Our products have also been used in pickup buses, route buses and sightseeing buses.

Improving performance by expanding sales channels,
viewing post-pandemic recovery in demand as
business opportunities

Sadahiro Seto

Major Products

Operating Officer
Division Manager
Traffic Facilities Business Headquarters

Review of FY Ended May 2023 (Results and Future Challenges)

Moquette (woven velour), curtains

Floor signage film

Carpets

SUMICUBE®, knit fabric

SWOT Analysis
Strengths

Weaknesses

The industry’s top market share percentage
Capability to offer total proposals for interior materials for
public transportation systems● Environmentally friendly products with excellent safety
performance● Technological and development capabilities taking advantage
of possessing the Group’s own factories

Aging facilities of manufacturing factories
Aging human resources● Significant impact of the decline in the traffic industry● Insufficient track records of delivery to overseas customers

●

●

●

●

Opportunities

Threats

Increase in travelers and foreign visitors to Japan in the
post-pandemic era● Increase in users of public transportation facilities owing topractical application of MaaS
● Increased demand for environmentally friendly products● Increased demand for products for EV buses●

Decrease in users of public transportation facilities owing to
declining birthrate and aging population● Decrease in the number of trains/buses owned because of
decreased business trips and reduced rush-hours due to the
spread of teleworking and staggered working hours● Soaring materials prices●

Companies Engaged in the Business
Suminoe Textile Co., Ltd., Marunaka Soei Co., Ltd., Seki Textile Co., Ltd., Teijin Tecloth Ltd., Owari Seisen Co., Ltd., Suminoe Techno Co.,Ltd.

Strategies and Measures and Progress Assessment for FY Ended May 2023
Strategies and measures

25

Progress

Increase order receipts for renovation and replacement work, both of which show signs of recovery.

×

Develop and increase sales of new products.

○

Develop environmentally friendly fabrics.

△

Increase market shares.

○

Propose and receive orders for SUMICUBE® (seat cushion material) with a new tactile impression.

△

SUMINOE GROUP Integrated Report 2023

In the fiscal year ended in May 2023, sales were sluggish in the
Traffic Facilities business since orders received from transportation
operators, who are our customers, remained low due to a lack ofrecovery in demand for updating and maintaining train seats aswell as for new sightseeing buses.
However, I realize that the passenger demand has been on
a recovery trend after the reclassification of COVID-19 under the
Infectious Diseases Control Act to Category V. Although demand
for new sightseeing buses is still low, there is a resurgence inorders received for covering materials for updating andmaintaining train seats and for SUMICUBE® cushion material fortrain cars. We also see recovering demand for route buses andemerging demand for EV buses.
On the occasion of these changes, we recognize that weare in the period of being more responsive to the needs of ourcustomer companies. Making the most of our strong
proposal-making capability and high market share, we strive tooffer proposals that give greater satisfaction to customers andensure a stable supply of products.

Future Prospects (Toward Achieving the SGW 2024)
In 1896, the Company succeeded in manufacturing moquette, apile fabric for seat coverings, as the first of its kind in Japan. Since
then, we have been maintaining the top market share in thearea of seat coverings used in public transportation facilities.
Seat covering materials account for roughly 50% of sales in thisbusiness segment. In July 2022, to maintain and improve ourdevelopment and production system, we acquired Seki Textile
Co., Ltd., which has been functioning as a moquette
manufacturing factory of the SUMINOE GROUP. The Group willcontinue to pursue design and functionality that satisfy
customer needs, aiming to enhance its brand value.
The passenger demand in society as a whole has recovered
only up to around 80% of pre-pandemic levels. To achieve theProgress

SGW in such a situation, we will focus efforts on further
promoting our functional products and enhancing thefunctionality of SUMICUBE® and floor signage film whilebringing their prices down, thereby increasing order intake.
We have worked to strengthen cooperation with otherbusiness segments and apply know-how of the Traffic Facilities
business to other segments. As a result, now we have a goodtrack record at selling products that we had not handled
previously. We will continue to reinforce cooperation with otherbusiness segments to promote sales of seat upholstery materials
for theaters and halls. Through these endeavors, the Group will
increase customer acquisition by leveraging its existingknow-how, which will enable the business to turn around.

Generating synergies through the acquisition of Seki Textile Co., Ltd. as a Group company—Measures to develop and increase sales of new products and to increase market share

In July 2022, Suminoe Textile Co., Ltd. acquired Seki Textile
Co., Ltd. as a Group company, with the expectation of generating synergies between the Company’s stable supply
system and Japan’s leading weaving technology owned by
Seki Textile (see p. 30). With strong capabilities for sellingmoquette not only for trains and buses but also for household furniture, Seki Textile contributes to expanding theGroup’s market share and to improving its competitiveness.
The Company appointed the Director of the Traffic
Facilities Textiles Planning Division of the Traffic Facilities
Textiles Business Department of Suminoe Textile Co., Ltd. asa Director of Seki Textile Co., Ltd. She is the Group’s firstfemale to be internally promoted to a Director, although

until then there had been examples of appointment offemale Outside Directors for the entire Group. Before being
engaged in the Traffic Facilities business, she dealt withgeneral household products in the Interior Fittings segment.
Capitalizing on her experience in production and quality
control she had accumulated in the previous segment, she is
now in charge of management and administration of both
the Company’s Traffic Facilities business and Seki Textile Co.,
Ltd. We will continue to encourage our personnel to utilize
their experience, knowledge and personal connections
cultivated in other business segments for developing andincreasing sales of new products in the Traffic Facilities
business as a whole.

SUMINOE GROUP Integrated Report 2023

26

Value Creation and Growth Strategies in Line with the Medium- to Long-term Management Targets
Strategies by Segment

Functional Materials
Review and Future Prospects by the Officer in Charge

Business Details
Moving beyond its conventional business segments, the Group has been active in advancing into new business fields, handling a wide rangeof products, including textiles, non-textiles, interior materials, household appliances and food. Household appliance business：Development,
production and sales of fabric-coated heating products Functional materials business: Development, production and sales of floor materials
for bathrooms, deodorizing products, interior materials for aircraft, water shielding/thermal insulation sheets, and food products

Striving to enlarge the business scale and improve
profitability while flexibly responding to major
environmental changes

Masaya Fukuoka

Major Products

Operating Officer
Division Manager
Functional Materials Business Headquarters

Electric carpets

Deodorant air filters for air purifier

The Tispa® Series“Real Odor Deodorization
without Disguising with a Scent”“Kakidanomi” supplement
containing persimmon(kaki) polyphenol

Floor materials for bathrooms

Interior materials for aircraft

Roof
tile side* CLOTHCABIN is a
registered trademark of
TEIJIN FRONTIER CO., LTD.

Heatinsulating
property Roof board side

Roofing materials

CLOTHCABIN®

SWOT Analysis
Strengths

Weaknesses

Functional materials and functional treatment technologies
that are unique to the Group● Eco-friendly technology capability● Organizational structure to realize high-quality products andhigh-level development●

OEM business that is vulnerable to demand fluctuations
Household appliances only limited to fiber-coated types of products● Delayed brand penetration● Dispersion of capabilities due to business operations in
multiple fields●●

Opportunities

Threats

Trend toward a decarbonized society, a declining birthrate
and aging population, increasing health and hygieneawareness, and the emergence of new needs due to external
environmental changes, such as digital transformation (DX)● New demand from existing customers in many fields● Discovering overseas demand, with a footing in overseas
affiliates●

Unexpected changes in the external environments caused by apandemic and other events● Market maturity, lowering of product prices, intensified price competition● Changes in consumer trends due to a declining birthrate andaging population and other factors● Changes in situations of the countries where overseas
operation sites are located●Companies Engaged in the Business
Suminoe Textile Co., Ltd., Suminoe Techno Co., Ltd., Suminoe Textile Vietnam Co., Ltd., Suzhou Suminoe Textiles Co., Ltd., Owari SeisenCo., Ltd.

Review of FY Ended May 2023 (Results and Future Challenges)
In the fiscal year ended May 2023, the performance in the Functional
Materials segment exceeded the results for the fiscal year ended May
2022, thanks to robust demand for bathroom floor materials, despite
the negative impact of soaring prices of resources and raw materials,
drastic fluctuations in foreign exchange rates, an increase in importcosts, and other factors.
In the household appliance business, the fiscal year under review
was the first year for our new production system that was establishedafter the consolidation of overseas factories. Beginning in FY2023, thefactory in Vietnam has been in charge of manufacturing fabric-coatedheating products. The factory is making steady preparations for
producing main components in-house, establishing a production
system toward achieving the SGW 2024. Going forward, we will
expand the scope of the business license for the Vietnamese factory,
while strengthening its corporation with its counterparts in Japan and

Future Prospects (Toward Achieving the SGW 2024)
There has been a move toward the normalization of social and economic
activities as represented by the easing of behavioral restrictions and theincrease in inbound tourism demand. On the other hand, future
prospects still remain unpredictable due to the lingering Russa-Ukraine
conflict, financial tightening mainly in Western countries, rising prices ofresources and raw materials, fluctuations in foreign exchange rates, andso forth. It is also expected that people’s sense of value will become
further diversified along with changes in lifestyles and that publicawareness of sustainability will continue to increase.
Although this business segment is susceptible to these trends, wewill strengthen and promote the strategies and measures specified
under the SGW, in order to expand the business while keeping pace withenvironmental changes, with a focus on the six initiatives shown on theright.

Strategies and Measures and Progress Assessment for FY Ended May 2023
Strategies and measures
Consolidate overseas factories of fabric-coated heatingproducts, optimize the production and supply systems forthese products, and strengthen the business capability.
Promote development of new products by using functional
products and processing technologies and increase sales ofthese products.
Develop and increase sales of products made byfunctionally processing technologies, such as deodoranttreatment and anti-virus processing technology.
Maintain and promote appropriate quality management andproduct supply systems in accordance with the JIS Q 9100
quality management standard for the aerospace industry.

27

SUMINOE GROUP Integrated Report 2023

Progress

Strategies and measures

Progress△

Develop new health foods and everyday items using
persimmon polyphenols and other functional natural
substances and expand sales of these products.

△△

Promote new commercialization utilizing smart textiles.

△△

Cooperate with the technology development sections tostrengthen the capability of sales and development.

△○

China, not only to promote the production business but also toundertake a new business with added value. In doing so, we will strive
to improve profitability.
In the functional materials area, demand for bathroom flooringmaterials has remained firm. By improving the operations management of production, inventory and delivery of these materials, we areworking to reinforce the supply system.
In the area of functional processing, although demand for deodorizing filters for air purifiers was slack, initiatives are under way to develop
new demand and products toward attainment of the SGW 2024.
In all areas, we will remain committed to augmenting theabove-stated initiatives toward the SGW 2024, with the awarenessthat we should take on challenges to enhance cost competitiveness toresist environmental changes and our capabilities for promoting
development to advance into a new field.

Progress① Improve cost competitiveness through optimization of business
and work processes, aiming at profit maximization② Promote product development in response to social issues andmarket needs③ Strengthen proposal-based development and sales for a diverse
range of customers④ Develop applications of our unique materials and processing
technologies and expand the scope of applications to other fields⑤ Enhance functions of overseas operation sites to promote a
production business with added-value features⑥ Strengthen cooperation with technology development
divisions to conduct development activities to explore new
fields for the next generation

Optimizing functions of the factory in Vietnam —Measures to consolidate overseas factories of fabric-coatedheating products, optimize the production and supply systems for these products, and strengthen business capability

Suminoe Textile Vietnam Co., Ltd., our production base of fabric-coatedheating products, started processing and assembly of deodorizing filters.
This has enabled us to reduce the physical distance with major customersof deodorizing filters, which will lead to optimization of customer support.
In the fiscal year ending May 2024, the Vietnamese subsidiary will
begin in-house manufacturing of nonwoven fabric, which is used for themain component of electric carpets. In this way, we will improve work
efficiency and increase profitability.

Production line for nonwoven fabricat Suminoe Textile Vietnam Co., Ltd.

SUMINOE GROUP Integrated Report 2023

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Value Creation and Growth Strategies in Line with the Medium- to Long-term Management Targets
TopicsAutomotive Textiles
and Traffic Facilities

Automotive Textiles
and Traffic Facilities

Resources for the Future—ECOS® carpet
tiles produced by recycling otherwise
discarded carpet tiles into new products

Promoting development and order
receipts of fabric materials using a new
methodGenerating synergies between the market
scale of Suminoe Textile Co., Ltd. and theexisting technologies of Seki Textile Co., Ltd.

Launching a new material for Kuriyama
Pulizia Corporation

The shrinking remaining capacity of landfills is one of theenvironmental problems in need of urgent solutions. It is said
that existing landfills across Japan will be filled to capacity only
within 20 years or so. In 2011, the Group established the
ECOS® Recycle System to recycle used tile carpets, which
previously had to be dumped in landfills, into a backing of
new carpet tiles. This led to the launch of the ECOS® series,
eco-friendly carpet tiles under the horizontal recycling system,
which has achieved a recycled material ratio that is one of thehighest in the world. We also released products featuring“double recycling” that use the Group’s proprietary recycledmaterials for both the backing and the surface pile yarn. To be

In the fabric business, our “point-raised embroidered fabric,” adecorative material that accentuates car seats, was adopted
by Honda Motor Co., Ltd. for the ZR-V (launched in April
2023). We developed this seat covering material with a viewto producing a mixed-color fabric that gives an impression ofa third dimension or depth and that feels soft andcomfortable while providing ample comfort to sink into. To
create a sense of a third dimension like a sofa, we employed a
new decorative expression using embroideries. Originally, ourembroidery technology was used at production sites engaged
in the mat business using sewing machines. As such,
conventionally, the technology had not been much used in
the fabric business, whose strengths lie in dyeing and finishingprocessing technology. In this project, overseas factories of therespective businesses were encouraged to exchange andshare each other’s technologies. Through such activities, theGroup successfully combined technologies of thesebusinesses and enhanced our capability of proposing a total
coordination of automotive textiles, so we were able toembody the development concept of the ZR-V.
Reinforcement of the decorative seat fabric business is
one of our priority strategies for the future. We will promote
this business in order to offer high-quality interior spaces withan excellent texture.

The Traffic Facilities business of Suminoe Textile Co., Ltd. has
been operating as a market leader, based on its track recordand customer trust it has built for more than 100 years. In the
future, it is predicted that its business environment will beaffected by the aging workforce, decrease in the number ofusers of public transportation facilities and decrease in thenumber of trains/buses owned due to post-pandemicchanges as well as the declining birthrate and aging
population, etc. Under these circumstances, in July 2022, theGroup acquired Seki Textile Co., Ltd., which is engaged in
production and sales of jacquard moquette used in seatcoverings for train cars and buses, as a Group company.
The features of Seki Textile include its capability of
one-stop production, from weaving to finish processing. The
company’s joining the Group has enabled us to further
improve production efficiency, leveraging the economies ofscale that Suminoe Textile has as a market leader.
We can also expect cost advantages, such as a decreasein raw material procurement prices. By merging thedevelopment capability of the Company with the production
capability of Seki Textile, the Group will intensify its efforts
for new business and technology development and formarket expansion. In addition, we plan to re-establish themother factory in the Traffic Facilities business and makeactive efforts in maintaining Seki Textile’s looms and taking
over its technologies. At the same time, we will heighten
awareness of manufacturing among employees working in
the Traffic Facilities business.
As SUMINOE GROUP companies engaged in the Traffic
Facilities business, Suminoe Textile Co., Ltd., Seki Textile Co.,
Ltd. and Marunaka Soei Co., Ltd. will work in concert togenerate synergies in order to explore new development.

Kuriyama Pulizia Corporation handles the planning,production and sales of rental products, including mats, mops,
aromatics and other products for rental use. The company has
been active in promoting environmentally friendly products aswell as hygiene- and safety-conscious products. So far, ourunique functional materials, function processing technologies
and environmental technologies offered by the Group’s
Functional Materials segment have earned high recognition
from Kuriyama Pulizia, which has adopted our antibacterial
fabrics for entrance and toilet mats, mop threads, etc. These

Interior Fittings(Automotive Textiles)

more specific, for these products, スミトロン® (SUMITRON),
recycled polyester fiber (developed in 1989), and SEACLE(developed in 2021), recycled fiber made from discarded
fishing nets, are used for the pile yarn on the surface of ECOS®.
In 2020, our Group factory abolished the dyeing process,which accounted for much of its environmental impact, bychanging pile yarn of all the carpet tile products tosolution-dyed yarn. As a result, the factory succeeded in
reducing water usage, electricity usage and wastewater.
Nowadays there are many environmentally friendly
products. In such circumstances, we are pleased that theconcept of ECOS®, which we had developed ahead of othercompanies in the industry, has been highly regarded by major
developers. Most recently, ECOS® was adopted by Mori Building
Co., Ltd. for the Azabudai Hills and Toranomon Hills Station
Tower Project in the metropolitan Tokyo area. In this large-scale
project, ECOS® was installed to cover a total area of 350,000 m2
in the offices on each floor of these buildings. Toward therealization of a sustainable future, we will continue to work
together with customers to realize a sustainable future while
gaining greater customer support for the concept of ECOS®.

ECOS® series, eco-friendly carpet tiles under the horizontal recycling system

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SUMINOE GROUP Integrated Report 2023

New embroidery processing technology
Effects

Embroidery expression that creates bumps and dips on the
fabric surface and gives an impression of a third dimension
Various expressions, including stitching, plane
expression, dot patterns, and overlapping zigzag stitches

Features

Embroidery processing applicable to a thick fabric, andease of assembly
Embroidery threads come in nine colors, enabling color
changes.
Glossy and three-dimensional effects by using modified
cross-section embroidery threads as an aggregate

Interior of the ZR-V

Functional Materials(Traffic Facilities)

products useスミトロン® (SUMITRON) recycled polyester fiberfeaturing antibacterial properties, which has been certified
with the SEK Mark.* In May 2023, Kuriyama Pulizia launched
the new product “Re.EarthMat,” for which the Group’s mat
fabric was employed. “Re.Earth” was so named to convey themessage “Restore the original state of the beautiful earth!” For
its piles, this mat uses ECONYL® nylon produced by Aquafil, an
Italian textile manufacturer, and made of discarded fishingnets, used carpets and recycled waste collected from the textile
industry. The Re.EarthMat features a checkerboard design
created by combining several woven patterns and using red
effectively. This superb design differentiates the mat fromconventional rental mats. The Re.EarthMat was developed andcommercialized through collaboration among Kuriyama
Pulizia Corporation, designers of Suminoe Textile Co., Ltd., andplanners of Suminoe Techno Co., Ltd.
Capitalizing on its organizational structure capable ofrealizing high-quality products and high-level development,
the Functional Materials segment will continue to develop andpropose products that differentiate itself from others, withoutstanding functionality, environmental and safety
performance, and other advantages.
* The certification system of Japan Textile Evaluation Technology
Council (industry’s voluntary standards)

No. 1 factory of Seki Textile Co., Ltd.

Re.EarthMat

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Value Creation and Growth Strategies in Line with the Medium- to Long-term Management Targets
Research and Development Strategies

Fundamental Development Philosophy
Kenko
Kankyo(Health) (Environment) Recycling

R&D Challenges and Progress Assessment for FY Ended May 2023

Amenity

Under its fundamental development philosophy “KKR+A (Kenko [Health], Kankyo [Environment], Recycling and Amenity),” the SUMINOEGROUP has been working on research and development of technology and products that help resolve environmental issues and contribute tosociety while striving to sow seeds for industry-academia collaboration. We will continue our efforts to develop new technologies and productsthat are friendly to people and the environment, based on “KKR+A” and core technologies that the Group has cultivated for many years.

Strategies

Progress

Enhance functionality of bathroom interior products.

○

Basic research using bioplastics

Improve floor signage film.

○

Basic research for extracting beneficial substancesfrom woody biomass△

Smart textiles: Efforts for commercialization ofwater-wetting detection systems and power
generating fibers

Develop and commercialize chemicals for
multifunctional processing.
Develop antibacterial and anti-virus technologies andevaluation techniques.
Develop new products using raw materials derived
from nature.

○

Strategies

Progress△○△Core Technologies
Endeavoring to raise the level of resin
processing technology

Textile and knitting
production technology

Coating technology

Recycled polyester
yarn-making technology

Lamination technology

Functionalization technology

Hard cotton processing technology

Research and Development System
Development Department
Technology
Development Center(research & development)

Development teams of each business segment

Suminoe Techno Co., Ltd.
(technology development)

The Group carries out research and development
based in the Nara Factory, through cooperation
between the Development Department, which
conducts research and development of coretechnologies, and the development teams ofrespective business segments.

Interior Fittings

Automotive Textiles

Traffic Facilities

Functional Materials

R&D expenses

Number of patents■Number of domestic patent applications■Number of patents held

(Million yen)
1,200

1,117
948

984

1,073

800
400

150
120

127

124

132

Comments on Research and Development Strategies by the Officer in Charge of Research and Development

60

254

30

18

14

13

2019

2020

2021 2022 2023
(Each FY ended May 31)

0
2019

2020

2021 2022 2023
(Each FY ended May 31)

10

6

Aiming to resolve social issues, achieve the growth of existing
businesses and create new value
Eiichiro Kimura
Directorthrough innovations
General Manager
Development Department

TopicsEstablishing resin compounding technology that realizes vibration-damping performanceadjustable according to the usage
The “lightweight vibration absorbing foam sheet,” which is adopted for automotive sounddeadening materials, uses a resin with vibration-damping performance. Previously we used only
one type of resin. However, in May 2023, we established a technology that allows us tocompound several types of resins having different vibration-damping properties while retaining
each resin’s properties. Using this technology, flexible adjustments can be made according to
the temperature and frequency ranges of the vibration source, so now we can design a productthat is more suitable to the usage environment. Currently, we are working for the deploymentof new products, including “burupita™,” which makes effective use of this technology.

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SUMINOE GROUP Integrated Report 2023

Evaluation and measurement instruments to assess three‐dimensional
shape, high strength, thermal resistance, and fire retardancy (examples)

140

135

90

0

One of the Group’s strengths is resin processing technology,
which we have cultivated through our experience in carpet
backing processing.
We are well-versed particularly in olefin resins withhigh safety and environmental performance, which are used
for floor signage film and bathroom interior products. These
products are required to achieve a higher level of
performance and functionality. To develop a resin that canlive up to such requirements, the Group is promoting the
upgrade of various features, such as anti-slip property,
anti-fouling property, high shaping property, fire
retardancy, high strength, and thermal resistance.
By sophisticating our resin processing technology as
well as textile weaving and knitting technologies, we willrealize innovative designs and comfortable functions in avariety of interior textile materials.

The Development Department, which is tasked with R&D activities,
strives to develop new products and facilitate the growth ofexisting businesses, taking advantage of our core technologies andcore facilities.
In the fiscal year ended May 2023, we succeeded indeveloping a technology for customizing vibration-dumping
functions of resins by fusing the design and compounding
technologies related to resins used in automotive carpet backing
with the forming technology of extrusion processing machines.
This customization technology is incorporated into a new product,“burupita™,” a vibration absorption sheet. This technology has
widely expanded the lineup of resin products that the Group canoffer. In the future, we aim to enter into a new market and a new
industrial field.
As for fiber processing technologies, in which the Group isstrong, we are working to create a successor toトリプルフレッシュ®
(TRIPLE FRESH) deodorizing treatment technology through theactive use of nano materials and R&D of original processing
technologies.
It has been more than one year since the Nara Factory
reorganization project was completed. In order to steadily evolve
the Nara Factory into a “manufacturing base that creates a richenvironment,” we will continue to advance waste reduction,
introduction of renewable energy, and other initiatives.

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Value Creation and Growth Strategies in Line with the Medium- to Long-term Management Targets
Feature: Response to the Transformation in the Automotive Industry

Toward System Optimization and Improvementin Technological Capabilities in Response to theTransformation in the Automotive Industry
The automotive industry is on the cusp of a once-in-a-century transformation as represented by the keywords
CASE*1 and MaaS*2. This provides the Group with a great business opportunity. With this recognition, we are
implementing various initiatives. Introduced here are initiatives undertaken in the synthetic leather anddecorative fabric businesses, which are explained by employees of our overseas Group companies.
*1 CASE, the acronym for Connected, Autonomous, Shared & Services, and Electric, is a keyword that indicates the trend in the next-generation automotive industry.
*2 MaaS stands for “Mobility as a Service,” which integrates various forms of transportation into a single, next-generation transportation service.

Synthetic leather business

Decorative fabric business

Striving to optimize the production system, viewing the expansionof the synthetic leather market as a business opportunity

Adding value to materials with excellent technological capability
in order to meet the market needs

Masakazu Aoyama
COO
Suminoe Textile de Mexico,
S.A. de C.V.
Guanajuato, Mexico

33

The trend toward vehicle electrification has accelerated from the viewpoint of environmental conservation.
As in the case of the fuel economy of gasoline-powered cars, the electricity economy of electric vehicles
needs to be improved. There are calls for weight reduction of various products. This also holds true for
automotive seat coverings—nowadays we see an increasing preference for synthetic leather over real leather
because of the former’s lighter weight. In addition, the need for synthetic leather is growing in terms ofanimal welfare. Due to these influencing factors, the synthetic leather market in the United States has
expanded to reach a level of roughly 140 billion yen, as of 2022.
In response to this market expansion, the Group has been promoting the restructuring of the North andCentral American business. In December 2023, a new factory equipped with a synthetic leather production
line will be completed in Mexico, which is home to a concentration of assembly factories of automotive seats.
By establishing a production base in the country, the Group expects to achieve higher efficiency in supplying
our products to manufacturers that are engaged in cutting and sewing car seat components destined for
Mexico as well as for North America. The new factory is designed to handle PU and PVC in view of future
diversification of demand for synthetic leather. We have also worked to develop relevant technologies and a
production environment and to cultivate human resources. We have therefore mostly completed the
preparations for supplying value-added synthetic leather.
At present, import of car parts made in Mexico to North America is largely increasing, reflecting therising import costs from China due to the US-China trade conflict and the necessity for procuring key parts
made in North America as required by the United States-Mexico-Canada Agreement (USMCA). The
production volume also continues strong growth, and thistrend is expected to become stronger. The Group has
conventionally responded to the trend by exporting
synthetic leather products from Japan or China to Mexico.
Going forward, however, these products will be supplied
directly from our new factory in Mexico. We have alreadybeen receiving various inquiries from overseas
automotive
manufacturers.
By
promotingtheoptimization of the production system, the Group aims to
Artist rendering of the new factory in Mexico
bolster the global supply chain.

SUMINOE GROUP Integrated Report 2023

If automated driving further advances in the future, there will be increasing need for vehicle interiors as a
private space, rather than as a space to simply spend time during transportation. For this reason, the market
for new designs is expected to expand in the future. We have offered automotive textiles leveraging one of
our strengths, “total coordination of automotive interior textiles, from ceilings to floors.” To provide
customers a total coordination of automotive textiles with further added value, such as superior comfort anddesign, our decorative fabric technology is becoming increasingly important.
When it comes to seat fabric decoration for automotive interiors, methods of creating patterns, such as

Makoto Konda
Chairman andGeneral Manager
Suminoe Textile Shanghai Co.,Ltd.
Shanghai, China

print processing and embossing, have been the mainstream so far. However, these days this trend ischanging—much importance is placed on the texture of plain fabric, and need is growing for solid-color
fabrics using embroideries, design perforations, and other decorative techniques that add value to thesefabrics. In fact, our Group’s fabric products decorated with embroideries were adopted by Honda Motor Co.,
Ltd. for the ZR-V (Japan and China) and the HR-V (China). To produce these products, my company
introduced embroidery equipment made in Japan into the two factories in China, and it has been managing
raw material procurement, production and sales of these fabrics. Moreover, we are considering a “decorative
combination” of several techniques, for example, combining an embroidery and perforation, as a method tobroaden the range of new design renderings.
In the future, we will continue working to add high value to our mainstay fabric products and synthetic
leather seat covering materials, on which the Group
placesgreateremphasis,

by

using

our

designdevelopment and procurement capabilities as well as
production capability for decorative processing. Throughsuch efforts, we aim to differentiate our products fromothers to expand sales. Especially in the Chinese market,
where automobile production is the largest in the world,
we plan to approach not only Japanese carmakers but
also other various companies.
Japanese-made embroidery equipmentused in China

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