Industrial Products Business

Masahiro TsuzakiMasahiro Tsuzaki

Our Mission is to Resolve Social
Issues, and We Will Continue to
Shine Brightly as a Small but
Impactful Business Division.

Masahiro Tsuzaki

Executive Officer, General Manager
of the Hybrid Rubber Products Headquarters

Achieved Profit Target in Fiscal 2023 Thanks to Turnaround Efforts

Fiscal 2023 was a significant year for the Hybrid Business Headquarters, as it was one in which we took a major step forward. Despite a challenging operating environment with soaring costs for energy, raw materials, and many other products, the combined efforts of our sales, technical, manufacturing, and administrative departments paid off, allowing us to achieve our profit target for the first time in six years, an achievement that marks a first step in turning the business around.
With those efforts ongoing, the 2024 Noto Peninsula Earthquake occurred on New Year's Day 2024. I wish to extend my deepest condolences and sympathy to those who lost their lives or were adversely affected by the temblor. Following the earthquake, we conducted on-site investigations of damage, focusing on areas where a JMA seismic intensity of 6-lower or higher had been recorded. The results showed that no buildings equipped with our vibration control dampers experienced total or partial collapse*, and many customers expressed their gratitude. We directly experienced the effects of the Great Hanshin-Awaji Earthquake and the Great East Japan Earthquake, and this latest temblor has reminded us of the importance of the vibration control damper business as a socially significant endeavor that protects people’s lives and assets.

* Based on information available to the Company as of June 4, 2024.

Sales revenue

Sales revenue

Business profit* (ratio)

Business profit* (ratio)

* Business profit = Sales revenue – (Cost of sales + Selling, general and administrative expenses)

Progress with Structural Reforms - Business Withdrawal and Sale

In line with our mid-term plan, in which we committed to achieving substantial progress with structural reforms by 2025, we made two significant decisions last year, namely, to withdraw from the gas hose business in Japan and to sell all our shares in Lonstroff AG, a wholly- owned subsidiary that manufactures and sells rubber parts for medical applications in Europe. The former decision was driven by the shrinking domestic market for consumer gas hoses, making it challenging to maintain economic viability while consistently delivering high-quality products that satisfy our customers. The latter decision, meanwhile,reflected delayed productivity improvements due to the spread of COVID-19 around the world and deteriorating profitability due to the jump in prices of raw materials, which made it difficult to improve profitability over the short term.
As President Yamamoto has stated, one of the major roles of management is to select businesses where efforts lead to results and to create jobs where each employee can shine. We will continue to focus on resolving social issues, and will steadily move forward with restructuring while seeking higher profit ratios and asset efficiency.

Honing Technology for and Expanding Adoption of Vibration Control Dampers and Rubber Parts for Medical Applications

We possess advanced technologies unique to a tire manufacturer. One example is our vibration control technology, which employs high damping rubber. This high damping rubber boasts unparalleled hardness and absorbs the energy from earthquakes and wind. By reducing its size, we can also achieve lower costs. Our vibration control damper "MIRAIE," which utilizes this high damping rubber, significantly reduces vibrations*1, requires no maintenance for 90 years*2, and is highly resistant to repeated shaking. It is therefore a highly competitive product that our division is proud of.

*1. Based on the results of full-scale tests using the MIRAIE framework by the Disaster Prevention Research Institute, Kyoto University, in January 2017.

*2. Based on the results of accelerated aging tests (for the high damping rubber damper part) performed by the Company.

Vibration control dampers are primarily installed in homes, buildings, and bridges within Japan, but currently, only about 20% of new wooden houses in Japan are equipped with them. Our goal is to increase this adoption rate to over 50% of buildings in Japan, so as to protect people’s lives and give them daily peace of mind. We are also focusing on thriving overseas building markets, especially in Asia. Moreover, our technology has been adopted in historical structures such as Kumamoto Castle and Higashi Honganji Temple. Going forward, we aim to extend its application to the preservation of important cultural properties like temples and shrines, and having witnessed the huge damage caused by the recent 2024 Noto Peninsula Earthquake, to expand its use in retrofitting existing homes.

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Our advanced technology from the Tire Business is also being leveraged as a strength in the rubber parts for medical applications business. This business requires extremely high-quality standards, such as the elimination of impurities. Utilizing resources from our tire research facilities, our research team has dedicated 5 to 10 years to product development.
Rubber parts for medical applications are directly linked to people's health and lives, making this a highly significant business. To ensure further growth, we prioritize enhancing the added value of our products and expanding our production capacity.

Aiming to Contribute to Resolving Social Issues Through Our Business

The Hybrid Rubber Products Headquarters operates with a vision of resolving social issues and providing safety, security, and comfort to people. Based on this vision, we engage in businesses such as rubber parts for office equipment, gloves, floor coating, marine fenders, and artificial turf for sporting facilities. By leveraging our technical strengths in each product and integrating DX, AI, and sustainability, we aim to secure stable profits.
We also intend to enter new fields utilizing rubber technology. Over the years, the Hybrid Rubber Products Headquarters has developed and manufactured various products that meet the needs of the times. With a long history and a culture/DNA of boldly taking on challenges, the mission of our division is to resolve social issues.
Our future focus will be on strengthening our product power. This year,we launched the "Hit Product Project," which is aimed at serving our customers with differentiated products. We will bring to market high value-added products that exceed customer expectations.

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Continuing Organizational Transformation with the Theme of "Trust × Persistence"

Investing in our organization and people is crucial for sustainable business growth. I believe that our employees' motivation is our most important resource. Last year, we established a specialized team within the division to promote a healthy organizational culture and human resource development. Based on a policy of making everything open, both good and bad, we are pursuing initiatives such as level-based training and team building. I am confident that the accumulation of such honest efforts will gradually change mindsets and transform daily operations.
This year, we have declared "trust” as a particularly important theme. There are various issues within our organization, but trust is the key weapon for resolving them. Starting this year, we have begun training managers to thoroughly consider "trust" until their daily work and mindset changes. Because trust is a skill that can be acquired over time.
The customers of the Hybrid Rubber Products Headquarters are diverse, and from specialized industries. In such a context, how do we differentiate ourselves? We will compete by leveraging three features that the Sumitomo Rubber Group possesses: earned trust, network and information capabilities, and innovation. We want to resolve social issues in fields that are out of the reach of the Tire Business and the Sports Business, continuing to shine brightly as a small but impactful division that excels, and thereby enhancing our enterprise value.