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YKK AP's Value Creation
The Value Creation Process
6 types of Management capital as a Base for Value Creation
YKK AP takes as its Purpose "We Build a Better Society Through Architectural Products."
These six types of capital are the source of this cycle of providing value to customers, society, and employees through corporate activities that create high quality products and services.
We aim to achieve sustainable growth by strategically investing capital while assessing business opportunities and risks.
- Extent of coverage: YKK AP Group (Japan+overseas)
Period covered: FY2023 (April 1, 2023−March 31, 2024) or as of March 31, 2024
Financial Capital
Equity ratio: 64.6%
Return on assets (ROA): 4.0%
"Financial foundations supporting our business"
Based on the YKK philosophy, the Cycle of Goodness®, the entire YKK Group is improving capital efficiency based on group financing. YKK AP will invest capital with the goal of achieving a return on assets (ROA) of 6−7%. Overseas, we are promoting the appointment of local employees to management positions, aiming for a "system that allows overseas profits to be reinvested locally." Making dynamic investment decisions in line with local conditions has strengthened our competitiveness on the global level. In order to realize the "Evolution 2030" vision, which aims to achieve net sales on the order of one trillion yen, we will invest financial capital in Japan and overseas at the most effective time.
Human Capital
Employees in Japan: 12,991
Employees overseas: 4,843
"Forest Organization with a shared corporate philosophy"
We conduct human capital management based on the concept of "Forest Management," as advocated by YKK's founder Tadao Yoshida, and are aiming to become a vibrant "Forest Organization" that grows autonomously by making the most of each individual's unique characteristics. Under the leadership of the CHRO (Chief Human Resources Officer), a position established in 2021, our human resources strategy is to recruit employees internally who will take on the challenge of creating new businesses through innovation, and to strengthen the organizational system of related divisions. In addition, to support individual career development, we will strengthen the "common mentor" career consultation system, introduce digital/IT literacy education, and improve employee engagement by creating an employee-friendly and fulfilling workplace environment.
Manufacturing Capital
Manufacturing capital investment: 20.7 billion yen
Manufacturing sites Japan: 25, Overseas: 13*
- Manufacturing sites are as of May 2024.
"High-quality products and services provided by an integrated production system"
Based on YKK AP's integrated production system, which is one of its strengths, the company is enhancing its technological competitiveness by conducting monozukuri that is coordinated with manufacturing technology from the product development stage. In addition to planned capital investments that anticipate supply and demand from a medium-term perspective, we will strengthen our manufacturing and supply capabilities while actively making investments that create an employee-friendly and fulfilling workplace environment. DX promotion is also picking up pace, including optimization of production activities through the introduction of smart factories, and making safety measures and demand/supply forecasting more efficient using AI.
Social and Relational Capital
Japan business sites: 194
Overseas business sites: 58
Affiliated companies Japan: 8, Overseas: 21*
- Affiliated companies are as of July 2024.
"Co-creation relationships based on trust and reliance with stakeholders"
To remain a company that is a well-loved part of society, we not only pursue profits as a single company, but also value our relationships with all of our stakeholders, including our employees, customers, business partners, and local communities. In order to improve YKK AP's brand appeal and have the value of its presence recognized, we place great importance on communication and provide opportunities for dialogue and co-creation in various forms. We will contribute to the sustainable development of society by staying attuned to the needs of each of our stakeholders, identifying issues and developing technologies, and by solving social issues through our products and services.
Natural Capital
Energy consumption: 141,000 kl (crude oil equivalent)
Water use: 8.3 million m3
"Creating environmental value at all stages of the lifecycle"
We have set numerical targets for the four environmental issues specified in the YKK AP Environmental Management Policy: "climate change," "resource recycling," "water," and "biodiversity," and are taking on the challenge of creating new value through technological innovation and achieving zero environmental impacts. At our manufacturing sites, we are promoting reductions in energy use through the introduction of high-efficiency equipment and the use of renewable energy. In addition, to address the risk of water use restrictions in different regions, we are working to reduce water consumption by promoting water recycling and reclamation. We are also further expanding activities to create environmental value, such as green procurement of raw materials and environmentally friendly design.
Intellectual Capital
Research and development expenses: 10.6 billion yen
Number of employees dispatched by the company to
obtain degrees (Ph.D., MBA, MOT): 21 (cumulative total)
Patents held: 1,466
"Monozukuri based on a system of research, development and verification
Incorporating new perspectives to generate innovation"
With development and technical research bases in Kurobe and Tokyo in Japan, as well as in Germany and Indonesia, we conduct research, development, and verification on a global scale to create value from the customer's perspective and to improve our technological capabilities. In FY2023, we launched the Technical Research Division to step up research and study of new technologies with an eye to the future. Among other activities, it is engaged in the development of recycling technologies for product materials in order to achieve a circular society. We also conduct joint research with various research institutions and dispatch employees to graduate schools. Furthermore, we are putting our efforts into strategic management and application of intellectual assets, with the aim of improving our competitiveness and brand value through patent applications and ownership of patent rights.
Product Development for Solving Social Issues
YKK AP's 6th Mid-term Business Policy calls for "Providing Social Value through Products and Realizing Manufacturing Reform," and in addition to providing value to stakeholders, the company is developing products that contribute to solving social and environmental issues in each country and region.
●Climate change (high thermal insulation)
YKK AP is rolling out high thermal insulation products to address climate change. The APW vinyl window series, our flagship product line, as well as Mado Remo - PLAMADO U Inner Windows, a remodeling product that attaches a vinyl window to the inner side of a window, contribute to reductions in energy used for heating and cooling by improving the thermal insulation performance of windows and doors. In addition, EXIMA 55 aluminum-vinyl composite windows for commercial buildings are scheduled for launch in September 2024. In the future, we will also work to achieve higher thermal insulation performance in mid- and high-rise constructions.
●Shortage of technicians caused by population decline
YKK AP is developing easy-installation products that will help resolve the aging workforce and personnel shortages in the construction industry, problems that are growing more serious as the Japanese population declines. The window remodeling product Kantan Mado Remo (easy window remodeling) allows window replacement using existing window frames. SYSTEMA 81u, a unitized curtain wall for mid-rise buildings launched in January 2024, can be mounted using the unit installation method, in which finished units manufactured using an integrated production system at the factory are lifted into place by a crane, eliminating the need for scaffolding at the construction site. Shortening installation time in this way will lead to labor savings for installation technicians.
(easy window remodeling)
●Increasingly frequent and severe natural disasters
In preparation for typhoons, heavy rains, heavy snow, and other natural disasters, which are becoming increasingly frequent and severe, YKK AP has created a lineup of products tailored to individual countries and regions. In addition to the G Port Pro Series of carports with industry-leading snow and wind resistance, we also offer the ProTek® series of hurricane and explosion-proof products in the U.S.A. Meanwhile, in Taiwan, where typhoon damage is common, the YRB-A sash, with high watertight performance, is a core product.
●Safety and security, health and comfort
We are also putting our efforts into developing products that contribute to users' safety, security, health, and comfort. Lucias balconies are a product designed to prevent children from climbing up and falling. The M30 facial recognition automatic door, the industry's first automatic door for single-family houses to be equipped with a face recognition key, is linked to a linear system that opens and closes magnetically, providing both safety and convenience.
Ventilation is important in improving the quality of the indoor environment and creating hygienic living spaces. Interior comfort is enhanced by ventilation doors, which let in natural breezes even while the doors are closed, and natural ventilation windows (balance way), in which the screen itself is balanced to efficiently ventilate the room.
