MESSAGE

Refining our “making places” to achieve further growth and new goals

Our group performs sewing of pieces of clothing as well as development and processing of materials in our factories, deployed in five Asian countries, mainly for Japanese customers. In May 2021, our group formulated a medium-term management plan “Vision 2025,” which covers five years from the fiscal year ending in March 2022 to the fiscal year ending in March 2026, and Phase 2 of the medium-term management plan began in the fiscal year ending in March 2024.

In the fiscal year ending in March 2024, although demand for apparel products showed signs of recovery, it was a year of inventory adjustments as expected at the beginning of the fiscal year, and in the second half, additional orders were weak due to the influence of unfavorable weather such as the warm winter months, and we struggled to obtain orders. On the other hand, we expanded our production capacity, mainly at factories newly established during Phase 1, and continued our efforts to shift production bases from China to ASEAN member countries. This has increased our in-house production rate and contributed to increased profits by reducing production costs, etc. Leveraging the strengths of the production of our own company, we were able to reduce production losses and improve production efficiency by implementing appropriate production lines and personnel allocation, etc., according to order volume, which led to an increase in profit margins.

The environment surrounding the apparel industry and the supply chain models have undergone major transformations since the COVID-19 pandemic. With the decline in sewing factories (making places), customers are increasingly reconsidering their production bases to minimize risks, and we expect that small-lot, short-lead time orders will increase further due in part to the recent acceleration in highly selective consumption trends by consumers. In the fiscal year ending in March 2025, we will focus on flexibly responding to these environmental changes by proposing optimal production strategies utilizing our group’s strength, the production base network, etc., and will work to manufacture items with higher added value while also overseeing a change in our product lineup to match customer needs.

The shift in production bases from China to ASEAN member countries, which we have been focusing on for some time now, continues to progress smoothly, but as production costs, such as raw material and shipping costs, continue to rise, we aim to achieve a highly profitable management structure by strengthening production in ASEAN member countries, particularly in Vietnam and Bangladesh, which remain highly cost competitive, to raise production efficiency and profit margins.

We are nearing the second half of Phase 2 of the medium-term management plan “Vision 2025.” As the structural transformation of the apparel industry can be expected to continue, we believe that our record of success in pioneering overseas production and our focus on high-quality manufacturing in each country will prove to be an essential strength for further growth and a competitive advantage that other companies cannot match. We will continue to more clearly promote “the manufacturing expertise of Made in Matsuoka,” striving to improve production capacity and efficiency at each of our “making places,” while aiming to achieve a highly profitable management structure.

We would appreciate your continued understanding and further support.