Introduction

Top Message

Top Message

VisionStrategy

Materiality

Close-up

Governance

Data

Message from the President

Further integrating sustainability into our businessstrategies and leveraging our strengths to maximize
economic value and create environmental andsocial value
Takashi Shimizu
Representative Director,
President & CEO

A year spent reflecting on who we are and what we are aiming for
Last year, when we published our first integrated report, I

By evolving and organically integrating these aspects,

indicated that we view the report as a theater stage andreaders can confirm our potential as if we were a single

that the report is an important tool for readers to confirm

living organism.

our potential as a company. In compiling this report, we

We have asked ourselves what added value we offer,

have prepared answers on each page to the fundamental

through what kind of business processes, from what kindquestion, “who are we?” Readers can find information onof social capital. And based on the output of such

our ideals, history, medium- to long-term management

processes, we have examined which social issues we are

strategies, financial situation, capital policy, sustainability

trying to solve and what kind of value we are trying toinitiatives tied to the material issues we have identified,create for society over the medium to long term. We

and our governance structure. There are many different

believe that our ability to demonstrate our value creation

aspects that need to be covered when introducing aprocess, which systematizes these processes, is of greatcompany and communicating its business to the public.

significance in two respects.

Revisiting our business at the core of the value creation process
Firstly, we have reconfirmed the need to align ourraise awareness of the outcomes, we are breaking downbusiness processes, which are lie at the heart of ourthe value creation process at the division level under eachbusiness management activities, with the value creation

organizational function. As part of our philosophy, we

process. Although we do not necessarily have scale

advocate management that is conscious of our social

advantages in the same business domain, we havecontribution, “to create excitement and surprise with ourworked to optimize our business management structure

products that exceed customer expectations and enrichby maximizing our resources. We excel at capitalizing onsociety.”* So, what specific value are we creating forour unique strengths by ensuring that all our functions

society? This is something we need to clarify. More often

powerfully communicate their intentions and appropriately

than not, a business will push ahead to achieve results

collaborate on a single strategy. While our human

without questioning what our true purpose is. However,resource base and technology base support the

we need to remain conscious of such purpose as afulfillment of these functions, we are strengthening ourcompany and strategically promote our business togovernance base and risk management to ensure our

pursue profits from a long-term perspective. We havesound corporate growth. In this respect, we haveembarked on activities to create such a culture within thereconfirmed that we are producing output from such aframework of business promotion, with division general

portfolio that sets us apart from other companies.

managers taking the lead.

Secondly, we feel that our value creation process* Our Mission

provides insights into how to approach our business. To

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TOYO TIRE Integrated Report 2024

TOYO TIRE Integrated Report 2024

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Introduction

Top Message

Top Message

VisionStrategy

Materiality

Close-up

Governance

Data

Steady outputs support outcomes
We have turned the halfway point of our five-year

function to meet customer insights, creating our unique

Medium-Term ’21 Plan, which started in 2021. In 2024,

added value to society, and contributing to raising ourwe are making steady progress on the second half of our

profit levels. This year, my mission once again is to leadmedium-term management strategy. In fiscal 2023, wethe company by conscientiously continuing ourachieved record highs in net sales and all profit items. We

meticulous business management from such a customer-

recorded operating income of 60 billion yen, the figure weoriented perspective. I will steadfastly support thewere aiming for in the final year of our medium-term plan,

economic value and output required for the creation ofand our operating income margin was 13.9%, 0.1% shortsocial and environmental value by moving ahead with ourof our medium-term plan target. In addition to thecurrent work, while keeping an eye on our medium-termfavorable impact of the depreciation of the yen and otherplan.

tailwinds, I believe that our pulling together as a company

Our business environment is sensitive to the price of

to tackle the unprecedented difficulties we encountered in

raw materials and foreign exchange rates and so it is2021 and 2022 has paid off, opening the way for theimperative that we optimize other cost-related andresults we achieved in 2023.

operational factors. We will also hone the precision of our

In particular, our market supply strategy for highunique business strategies by focusing on an optimal andvalue-added products, which is devised to meet thehigh-quality product portfolio that meets the market andexpectations of customers and to please them bycustomer demands as well as maximizing thedelivering tires, engages the gears of each organizational

effectiveness of operations at our production bases.

I believe we need to be even more ambitious in raising

Further improving our North American base and raising the quality of othermarkets

structural reform and focusing on our key policy of

product strengths, and we will continue to make solid

pursuing quality, rather than quantity, in our business

investments in this area. We will also work to advance ouractivities. And we are building win-win relationships withcollective technological strength by leveraging thesales partners who share our way of thinking and deliver

In the North American market, we intend to focus onthat combine unique added value, such as ultimatecharacteristics and roles of each of our R&D centers in

products to users. We can see the results of these efforts

capturing trends in the large-diameter tire category anddriving enjoyment and a range of designs, while

Japan, the U.S., and Europe. Furthermore, throughreflected in our business performance from the second

we will continue to deliver attractive tires in a timely

satisfying, at a high level, the basic elements required forproactive and continuous participation in motorsports

half of 2023. Having closed our Silverstone plant inmanner. The global adoption of electronic vehicles (EVs)

EV tires, such as reduced rolling resistance, wear

activities, we will link the knowledge we gain throughMalaysia in 2021, we are now shifting our focus in Asia

has been astonishing, but the momentum is showing

resistance, and quietness, even though such elements

such participation to the improvement of ourfrom the Silverstone brand to Toyo Tires brand products.

signs of temporarily slowing down, which means we need

may contradict each other.

technological prowess and systematically and effectively

As a result, the Toyo Tire brand has steadily establisheddevelop EV-compatible tires in the off-road field.

and improved its presence, resulting in dramaticto keep a close eye on the situation. The trends of

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products. In Japan and Europe, we are promoting

the level of the technological platforms that support our

We intend to seize this opportunity by strengthening

switching to EVs and the expectation of their role incoordinated functions centered on marketing, which

Our assets include our relationships of trust withrealizing a carbon-neutral society have not changed, andinvolves building good relations with our customers so

suppliers, who understand the appeal and value of ourGenerally speaking, as of 2024, we have raised our

we believe that it is now important to take the initiative forthat we can identify their latent needs and provide

products and support our sales, and our strong customer

competence to a level at which we are more than capable

the future, to ensure our presence in the market.

feedback to the development team. Assuming that ourbase. Going forward, we will continue to maintain ourof meeting the management targets set forth in our

improvements in profitability in Malaysia.

The performance requirements for tires will becomecompetitors are strengthening their large-diameter tire

unique agility, which is one of our strengths, by limiting

medium-term plan. However, we must never forget that

more sophisticated as the load and torque increase withstrategies, we will enhance the leading position in thisfocus areas to our advantage.

we live in a time in which change is the norm. We will

electrification. We are aware that this works to ourcategory in the North American market and capitalize on

advantage, because tires supporting EVs require larger

our unique strengths, namely the trust we have built up

select value-added products in line with the market

diameters. Our strength lies in our ability to offer products

and our agility.

trends in that region and focus on supplying such

TOYO TIRE Integrated Report 2024

In regions other than North America, we strategicallycontinue our efforts to achieve outputs that exceed ourtargets in 2025, the final year of the plan.

TOYO TIRE Integrated Report 2024

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Introduction

Top Message

Internalizing the sustainability cycle amidst bewildering external change

Top Message

VisionStrategy

Materiality

Close-up

GovernanceDataorganization. Human capital, which is inseparable fromcorrections based on the results of assessments, andhuman rights, is a source of value creation for society.

continuously make improvements. We plan to further

The Sustainability Committee, established at the start ofthe past three years. International organizations, states,

Only when people are motivated to fulfill theirenhance the monitoring function of the Sustainability

the Medium-Term ’21 Plan, has been active for three

regions and industries are required to respond to these

responsibilities and take on challenges in a healthy andCommittee from such perspective.

years. A cycle has been established in which activity

issues ever more quickly, with no signs of the turmoil

enthusiastic manner, do they bring returns to thethemes linked to material issues are incorporated into

abating. What risks and opportunities does this create forcompany. We view human capital as an integral part ofachieve the Medium-Term ’21 Plan, we have alreadyeach organizational function’s business plan, and the

Toyo Tire’s business operations? We need to continuously

our business strategy and plan to invest in it based on ourstarted to formulate the next medium-term plan, which

progress of such plans is monitored and managed.

watch such trends and take action from a medium- to

grand design, through which diverse talent with different

will cover the five-year period from 2026. We will continue

Decarbonization and supply chain task forces under the

long-term perspective.

abilities, ideas, and careers will be able to enjoy various

to use this Integrated Report as a basis for constructive

opportunities and thrive.

dialogue with stakeholders in order to further strengthen

jurisdiction of the committee promote their initiatives

At the final Sustainability Committee meeting in fiscal

In parallel with the implementation of strategies toefficiently and effectively while pursuing company-wide

2023, we conducted a rolling inspection of our medium-

optimization, and they have now started to work on

to long-term sustainability targets and plans on whether

effectiveness of our measures when addressing various

been promoting in our current medium-term plan, and tohigher level issues in a more autonomous manner. We

they are effective amidst environmental changes,

sustainability-related ESG issues. We need to establish

ensure the content really does enhance our corporate

believe that we have steadily promoted ESG governance,

including the global situation and trends at otherand manage effective measures for our targets. In othervalue. Thank you so much for your continued trust in andincluding giving advice to the Executive Committee andcompanies, and how such targets and plans are linked towords, it is important to measure effectiveness, makeloyalty to the Toyo Tire Group.

reports at the Board of Directors meetings, and that we

outcomes through our value creation process. We arehave integrated business management and sustainability

currently promoting the integration of business andto some extent as set forth in the Medium-Term ’21 Plan.

sustainability based on the medium- to long-term targets

Meanwhile, numerous economic, social, andWe recognize the importance of ensuring thethe integration of business and sustainability that we havestarting from 2024.

environmental issues have continued to emerge during

Updating both awareness and behavior for enhanced effectivenessOur willingness to address climate change, a big issue onwear and preventing deforestation in the natural rubber

a global scale, has been increasing each year. We aresupply chain are urgent issues for the tire industry. It is

promoting the use of renewable energy, a priority

now also imperative that we take action to ensure themeasure for decarbonization, in line with the medium- tosustainability of the natural capital we have enjoyed in our

long-term plan discussed by the Executive Committee,

business activities thus far. We are working with industry

and we have the CO2 reduction target for 2030 in ourgroups and suppliers to strengthen our response andsight. However, we need to consider more effective

thoroughly manage the impact of our business.

measures in light of the harsh international view of the

In 2023, we conducted a human rights risk

current state of CO2 reductions as well as discussions inassessment of our entire value chain and identified key

Japan and abroad around next-generation energy. We

risks. We are now in the process of implementing action

will officially introduce internal carbon pricing (ICP) thisplans to address these risks, the progress of which will be

year, which we believe will be effective as one of themonitored by the Sustainability Committee. Needless toevaluation standards for decarbonization investments. In

say, companies should respect human rights, not just as

May 2024, we submitted a letter of commitment to obtaina legal obligation, but as a prerequisite for doing businessscience based target (SBT) certification. We plan to set

in society. We need to understand that respect for human

more effective targets for Scope 3 and to apply forrights is a basic assumption for building appropriate

certification this year.

relationships with stakeholders, and the committee is

Reducing the environmental impact of dust from tire

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TOYO TIRE Integrated Report 2024

working to promote such awareness throughout the

TOYO TIRE Integrated Report 202416