TOKYO (Oct. 21, 2011)—Bridgestone Corp. hopes to increase its operating income ratio to 10 percent of sales by 2016 through a series of strategic initiatives.
The company said it plans to expand “strategic” products, capacities in general and reinforce “fundamental competencies,” top management revealed in the firm's Mid-Term Management Plan.
To achieve this improvement—as well as increase the return on assets to 6 percent of sales by 2012—Bridgestone aims to improve its sales mix, rationalize its operations where feasible and streamline assets, the company said. The company also is committing to spend about $2.75 billion a year on capital improvements.
Bridgestone's operating income ratio last year was 5.8 percent and is projected to hit 6.2 percent this year. The company is targeting 7.5 percent by 2012 and then improving that by 0.5 percentage points per year through 2016.
Sales should grow about 5 percent a year, the company said.
In the tire sector, which accounts for 83 percent of Bridgestone's annual sales, a key goal will be to increase the revenue per tire through added value and higher value products.
As for “fundamental competencies,” Bridgestone will launch initiatives to strengthen its competitiveness throughout the supply chain and to leverage the benefits of the company's presence in being both vertically and horizontally integrated.
In regards to the firm's presence in raw materials, Bridgestone sees an opportunity to develop these assets beyond stable supply for its own uses to profit centers on their own.
Bridgestone also sees opportunities for growth, and profit enhancement, in expanding its captive distribution assets, especially in emerging markets like India and China.
In its non-tire business sector, Bridgestone is evaluating opportunities for “competing on a different ground.”
Bridgestone emphasized it will carry out its initiatives while sticking to the principles of its environmental and social policies, namely being in harmony with nature, recycling and having low carbon usage.