This page explains the long-term key strategic initiatives of the Kirin Group.
- (1) Japan
- Under a new structure arising from the establishment of Kirin Company in January 2013, initiatives will be directed at putting Kirin’s core domestic integrated beverages business on a sustainable growth trajectory, with the aim of achieving higher sales and earnings over the coming three years. Through a wide range of business activities, Kirin aims to create shared value with customers and communities, strengthening core brands and pursuing innovation by selectively allocating strategic resources within and across alcohol and soft drink businesses. Kirin will also support a strong competitive position through structural measures such as improving the efficiency of overlapping functions and reducing costs. Kirin will also apply the knowledge and experience gained in both alcohol and soft drink operations to develop new categories and business models that can drive growth.
- (2) Oceania
- Kirin will pursue further sustainable growth at Lion by increasing sales and reducing costs. In alcohol beverages, Lion will enhance and strengthen its brand portfolio, making use of newly acquired international brands, craft beer brands and other growth categories. In soft drinks, the strategic focus will be on reforming the cost structure to improve profitability while allocating appropriate resources to establish NARTD brand as source of future growth.
- (3) Brazil
- At Schincariol, Kirin’s strategy is to build a strong brand portfolio in both beer and soft drink operations. Kirin seeks to establish a strong No. 2 position in the beer business, and to increase brand presence in the growing premium category. In soft drinks, the strategy is to boost earnings through the launch of high added value products. Operationally, Kirin will work to ensure low cost operations by improving value chain processes, aiming to significantly increase overall profitability at Schincariol.
- (4) Southeast Asia
- Under the management of Kirin Holdings Singapore, Kirin will work to build a business foundation in each market, centered on Vietnam and Thailand. In soft drinks, initiatives will be taken to create growth by strengthening the sales foundation, reinvesting in existing brands, introducing new brands, and offering products in new categories. In beer, the KIRIN brand will be actively developed as a premium product experience.
At Kyowa Hakko Kirin, strategy will be focused on enhancing the product line-up and pipeline in its core therapeutic areas and accelerating the development of strong competitive positions in these areas. Global development will continue to be advanced by strengthening operations in the US and Europe and implementing strategies in Asia that reflect the prevailing environment in each country. In R&D, Kyowa Hakko Kirin will continue efforts to create innovative therapeutic agents to address unmet medical needs.
At Kyowa Hakko Bio, strategy will be focused on achieving further technical developments and enhancing the supply structure, centered on the expanding global market for high added value amino acids.
At Kirin Kyowa Foods, the business will be extended from its current core of processed foods to encompass retail and restaurant food and business development in China. At the same time, continuous measures will be taken to reduce manufacturing costs and improve earnings.
Kirin will take a number of steps to strengthen its management structure in pursuit of long-term global growth. This includes restructuring the Group internally to create Kirin Company as the headquarters in Japan for domestic integrated beverage business. Along with the existing regional headquarters in Oceania, Brazil and Southeast Asia, this will facilitate autonomous development and fast-moving management of companies in close alignment with their local consumers. Kirin Holdings will function as global headquarters to promote synergies by allocating resources and sharing functions across businesses and borders.
A further initiative is the establishment of an International Advisory Board (IAB) to provide advice and recommendations on strategy and governance in respect of the Kirin Group outside Japan, reporting in to Kirin Holdings President and CEO. This board comprises non-executive directors from Lion and Schincariol, and will draw on their broad global business experience to propose ideas and advise on global development.
Kirin aims to enhance returns to shareholders, increasing dividends in accordance with growth in EPS using a target consolidated payout ratio of 30% of normalized EPS. By adopting the concept of normalized EPS, Kirin aims to ensure closer alignment between cash flow generation and dividends, using EPS growth as a management index and as a basis for assessing dividends.
Debt repayment will be balanced with enhancement of shareholder returns and undertaken progressively to improve financial flexibility.
Dividend payments and debt repayment will be prioritized, and additional shareholder returns, including share buybacks, will also be considered.
In support of Kirin’s brand-centered management approach, through which Kirin aims to deepen engagement with stakeholders and take its CSR activities to the next level, Kirin is adopting a “CSV” (Creating Shared Value) approach to business. CSV is a management concept that combines two ideas: engaging in societal issues to create social value, and improving a company’s competitive position. With CSV, Kirin aims to co-create value with a wide range of stakeholders, primarily through its overall business activities along the value chain. Kirin’s defined stakeholder groups are the same throughout the organization: customers, employees, shareholders and investors, business partners, communities, and the environment. From among the issues pertinent to each stakeholder group, Kirin will address four core themes (protecting the environment, improving food safety and security, protecting human rights and working conditions, and prevention of corruption in all its forms) and two additional themes associated specifically with Kirin (promoting health, and strengthening bonds between people and society).