MEIKO corporate report 2023
MEIKO corporate report 2023 | Introduction | Value Creation | ESG Management |
Financial and
Corporate Data
Business Principles
We provide the best-ever products and services for our customers through Meiko's manufacturing, thus contributing to the creation of happiness in employees and society.
Our profile
-Contents-
Introduction
Positioning of This Report
Financial Information | Non-financial Information |
We produce cutting-edge PCBs for automobiles, smartphones, IoT devices, industrial equipment, etc. and design, develop, mount, and assemble electronic
01 Business Principles
03 History of Value Creation |
Publications
Corporate Report
Securities Report
devices on a global basis.
05 Value Creation Process |
Convocation Notice
Company Brochure
EMS | |||
Electronic device development | |||
and manufacturing | 12% | Operating | |
Amusement | |||
AI appliances | income | ||
Industrial equipment | |||
etc. | 9.6 | ||
15% | Net sales | ||
51% | billion yen | ||
IoT modules | 167.3 | ||
SSD | |||
6% | billion yen | Number of | |
Semiconductor | employees | ||
16% | 12,553 | ||
package substrates | |||
Smartphones | Automotive | ||
Tablets | |||
SSD
Value Creation
- Business Portfolio
- PCB Business Topics
- EMS Business Topics
- Message from the President & CEO
- Outside Director's Message
ESG Management
- Medium-termBusiness Plan
- Sustainability Policy
- ESG Initiatives
- Governance (Management Report)
Financial and Corporate Data
- Financial and Non-financial Data
- Meiko's Global Network
WEB | ||
Corporate Website | ||
The documents shown in the above table can be browsed on our website. https://www.meiko-elec.com/english/
To the Readers of This Report
◆Editorial Policy◆
This integrated report was issued for the purpose of deepening the understanding of all stakeholders, including shareholders and investors, about our mid/long-term activities.
Going forward, we will continue our efforts to meet requests from all stakeholders and have them deeply understand our business activities.
◆Applicable Period◆
April 1, 2022 to March 31, 2023
◆Coverage◆
Meiko Electronics Co., Ltd. and affiliated companies
◆Caution Regarding Forecasts◆
This report mentions our future outlook and plans based on currently available information.In particular, the PCB industry is faced with a variety of risks and uncertainties due to changes in raw material prices, diverse customers' market trends, changes in technological
trends, exchange rate fluctuations, changes in tax and other systems, natural disaster, international conflicts, COVID-19, etc. Accordingly, actual performance may be different from our expectations.
◆Reference Guidelines◆
The Ministry of Economy, Trade and Industry; Guidance for
Comprehensive Disclosure and Dialogue for Co-creation of Value・IIRC/
IIRC; International Integrated Reporting Framework
Task Force on Climate-related Financial Disclosures (TCFD)
01 | 02 |
MEIKO corporate report 2023 | Introduction | Value Creation | ESG Management |
Financial and
Corporate Data
History of Value Creation
Meiko will soon be marking the 50th anniversary of its establishment. Over time, we have stably supplied high-quality PCBs.
Going forward, we will continue to take on the challenge of cutting-2010 edge PCBs, grow through challenging the evolution of electronics, and
contribute to society.
1990 | 2026 | |||||||||
1982 | 2020 | |||||||||
1978 | 2000 | |||||||||
1997 | ||||||||||
*Trends in net sales | ||||||||||
1975 | 1980 | 1985 | 1990 | 1995 | 2000 | 2005 | 2010 | 2015 | 2020 | 2026 |
03 | 04 |
MEIKO corporate report 2023 | Introduction |
Value Creation Process
Sources of Competitive Advantage
Personnel | Nature | Social relations | ||
Diverse human resources | Environmental resources and | Collaboration with | ||
Number of employees | materials required to provide | stakeholders and local | ||
products and services | communities | |||
12,553 (As of March 2023) | See pp. 67-68 | See pp. 39-44 | ||
Finance | Manufacturing | Intellectual | ||
Financial base required | Facilities and equipment | Accumulated knowledge, | ||
to provide products and | necessary to provide | skills and expertise | ||
services | products and services | Total amount of R&D expenses in | ||
consolidated fiscal year under review | ||||
See pp. 69-70 | 4,466 million yen across entire Group | |||
Business
External | Principles |
environment | |
Risks and opportunities Value we create
Smartphones
Telecommunications | Solar power |
generation |
Value Creation | ESG Management | Financial and | ||
Corporate Data | ||||
Net sales | ||||
167.3 | Products | |||
billion yen | ||||
Economic | ||||
value | Customers | |||
Operating | Growth | Social value | ||
income | ||||
9.6 | Clean | |||
billion yen | ||||
Work Employees | Safety | |||
satisfaction | Security | Society |
Social significance
Resolution of social issues
Smart
factoriesAutomobiles
AI
Design and | Development and manufacturing of | Mechatronic products | Imaging-related equipment |
manufacturing of PCBs | electronic devices | We realize the development and | Design, manufacturing, software |
We assist with the entire manufacturing | |||
Design, manufacturing, research and | evolution of manufacturing processes | development, and system construction | |
development of PCBs to respond to the | process from design to completion and | that resolve issues such as production | for professional imaging equipment |
evolution of the world through technological | delivery of products with the technical | quality improvement, cost reduction, | that contributes to society in facilities |
innovation and the new needs that arise | capabilities and track record unique to | workers' safety, and human resource | for crisis management in response to |
from this evolution. | the top manufacturer of PCBs. | management. | disasters, incidents, accidents, etc. |
05 | 06 |
MEIKO corporate report 2023 | Introduction |
Business Portfolio
The Meiko Group creates products together with clients as the best partner of each client, and continues our endeavor to become the best manufacturer with comprehensive technologies to meet each client's demand.
PCB
Business
We offer a wide array of cutting-edge products, including high-density and high- frequency PCBs, heat dissipation and high-current PCBs, and bendable PCBs.
We undertake the development and production of equipment and software for solving onsite problems and troubles with advanced technologies.
Mechatronics
Business
07
Value Creation | ESG Management |
EMS
Business
We offer comprehensive solutions for realizing the tasks of outsourcing processes including the design, manufacturing, mounting, assembly, and delivery of PCBs
Visual system
Business
The multi-vision system developed by Meiko considerably helps grasp a variety of information.
Financial and
Corporate Data
08
MEIKO corporate report 2023 | Introduction |
PCB Business Topics
Tendo Factory
The Tendo Factory is Meiko's fifth domestic PCB factory. Located in the Town of Kahoku adjacent to Tendo City is our largest factory in Japan, the Kahoku Factory. There, we mainly engage in the production of automotive PCBs.At the Tendo Factory as well, we will produce automotive PCBs, through- hole multilayered PCBs for high-
speed communications, and HDI PCBs. This factory was planned as an eco-smart factory. For its energy, natural gas (LNG) will be used alongside a solar power generation system, making the Tendo Factory environmentally-friendly. The inside of the factory is designed so that conveyance is conducted using Automatic Guided Vehicle (AGV), with the insertion of materials into production equipment performed by robots as well. Additionally, through linkage with an ERP that centralizes production equipment, we computerized materials input/output processing, inventory management, manufacturing instruction sheets, etc. to enable us to reduce defects caused by human error. We will also realize the establishment of a high level of traceability. Through this endeavor, we anticipate a 30% improvement in production over our preexisting factories. Eventually, the Tendo Factory will have triple the production capacity of the Kahoku Factory.
Value Creation | ESG Management | Financial and |
Corporate Data |
EMS Business Topics
EMS/electronic device development and manufacturing
Circuit and | Parts | |||||
mechanical | Total solutions business that | |||||
Development design | PCB | procurement | Product | Customers | ||
spans ODM handling and in- | ||||||
and design | Software | manufacturing | and | assembly | house product development | |
development | mounting | |||||
AW design |
Our EMS Business is characterized by the proposals we make for one-stop solutions that span design/development and finished product assembly. We handle design and development in line with customer needs, be they for electrical circuit, software or mechanical design. For the handling of the stages between PCB manufacturing and mounting/assembly, in Japan, we manufacture PCBs at our Kahoku and Tendo Factories and mount/assemble them at Meiko Embedded Technology in order to limit transport distances and complete the PCBs in Yamagata Prefecture to reduce lead times. At our Vietnam Factory (Thach That), a PCB factory and EMS factory have been built adjacent to each other within the same site, making the factory capable of one-stop solutions in every sense of the word. Normally, design, development, PCB procurement and mounting/assembly require business dealings with an individual supplier for each. Meiko, however, has a system in place that enables it to take on customer needs in their entirety.
Automotive | Production and | Wireless | CPU LCD | |
sensor | building equipment | Mechatronics | ||
communication | application | |||
application | sensor application | |||
Automation of production
FA system | Barcode imprinting |
Simplification of inspections
AOI system utilizing AI
CMOS sensor camera | Embedded camera | Small positional | ||
modules | modules | information devices | Dot impact printers | Multi-function printer |
operation panels | ||||
Driver recognition | Various units | |||
near-infrared camera | for construction |
Production information | APP | Inspection information | |
Materials information | Equipment information | ||
Data analysis/utilization |
equipment | |
Collision mitigation | Fingerprint |
systems | |
authentication units | |
Gait analysis sensors | |
Label printers |
09
Automation of logistics
Order placement | Digital inventory | AGV |
stock-in | management | |
stock-out | with automated | conveyance |
warehousing |
Automation of traceability
Equipment management | Chemicals management |
10
MEIKO corporate report 2023 | Introduction | Value Creation | ESG Management |
Financial and
Corporate Data
Message from the President & CEO
Meiko contributes to society through "Challenge the evolution of electronics and achieve development thus contribute to the society"
President & CEO
Yuichiro Naya
11 | 12 |
MEIKO corporate report 2023 | Introduction |
Our social role and significance
Over time, we at Meiko Electronics Co., Ltd. have expanded our business base as well as fulfilled our social responsibility through addressing SDG challenges based on our Business Principles of "We provide the best-ever products and services for our customers through Meiko's manufacturing, thus contributing to the creation of happiness in employees and society."
We live as residents of the irreplaceable Earth. Our lives as those residents have become more sophisticated and comfortable over time. However, we believe that these lifestyles should not be at the expense of global warming, ocean pollution, natural disasters, food problems, human rights issues, and the depletion of natural resources around the world. Currently, the world has been addressing such challenges, with rapid progress being made in endeavors aimed at realizing a sustainable society such as green transformation (GX) and digital transformation (DX). Amid this situation, corporations are being called upon to fulfill a greater role.
While placing sustainable management at its core, based on its purpose of growing and contributing to society through challenging the evolution of electronics, Meiko will continue pushing forward with its contributions to the promotion of social innovation through the evolution of electronics and endeavoring to do its part to address social issues through its business activities, including achieving carbon neutrality and efficiently using resources and energy to respond to climate change as well as addressing human rights and the way employees work and preserving employment.
Business environment
We first publicly announced our Medium-term Business Plan in Fiscal 2022. However, due to factors such as surge in energy prices triggered by Russia's invasion of Ukraine, soaring procurement prices resulting from progression in the yen's depreciation caused by monetary
Current Meiko headquarters
Value Creation | ESG Management | Financial and |
Corporate Data |
tightening in Europe and the US, and sluggishness in demand because of the COVID-19 pandemic, we revised that plan for the period starting in Fiscal 2023 and ending in Fiscal 2026. As for the situation surrounding orders in the immediate term, while there has been a moderate trend of improvement, we believe there is a need for us to tackle measures for recovering from delays in our plans.
Firstly, in our leading products of automotive PCBs, in order to bolster orders for xEV PCBs, we will expand orders from Japanese customers as well as endeavor to expand transactions with European and US customers. For smartphone PCBs, in addition to expanding orders of HDI PCBs for high-end smartphones, we will proceed to work on expanding sales of flexible PCBs. In our EMS Business, our initiatives for M&As and so forth have yielded success in the form of gradual growth in net sales. We are currently working on expanding sales from automotive transactions as we look towards further net sales growth. Additionally, it is looking increasingly like sales to customers in our PCB Business will gradually go up. In our Semiconductor Package PCB Business, we have been preparing to produce FC-BGA PCBs at our Ishinomaki Factory No.2 and memory package PCBs at our Vietnam Plant No.3. However, we forecast that a delay in our plans of roughly one year will arise due to sluggish demand for semiconductors. During this time as well, we have been pushing forward with the likes of customer certifications and improvements to production preparations and yields at our factories.
To boost profitability, we are implementing automation and manpower-saving for the sake of promoting cost reduction measures and improving productivity. To give an example, at the Tendo Factory that we completed construction on in October, we have made great strides in automating production, and have successfully saved manpower by 30% over our existing factories. At our existing factories, we are engaged in various measures with the aim of improving productivity and yields.
13 | 14 |
MEIKO corporate report 2023 | Introduction |
Environmental initiatives
As environmental issues grow increasingly serious, initiatives for responding to climate change and transitioning to a decarbonized society are becoming important management challenges. For that reason, we will set environmental targets and push forward with CO2 reductions as we follow a roadmap. As our environmental targets, we have adopted the reduction of CO2 emissions per rate of consumption per production volume in Japan by 50% between Fiscal 2021 and Fiscal 2030 and the achievement of zero emissions by Fiscal 2050. Looking at a breakdown of our CO2 emissions, the ratio of CO2 emissions from production activities (Scopes 1 & 2) is 42%. That from purchased products and services (Scope 3) is 58%. As the majority of our Scope 1 and Scope 2 CO2 emissions are from the consumption of electric power, we worked on reducing those emissions largely through cutting down on standby power and switching production equipment to energy-saving devices.
One example of a concrete initiative in this regard is the design of the Tendo Factory, which was completed in October, as a smart factory based on expertise on energy-saving. For Scope 3, to address a challenge present in our overall supply chain, we have been collaborating with suppliers to promote initiatives to reduce CO2.
DX initiatives
At our preexisting factories, operators performed the moving of raw materials and work in process and input of production results. At our latest Tendo Factory, the moving of raw materials and work in process is conducted with the use of AGV. Additionally, robots are utilized to supply work in process to the production equipment. Production orders are optimized using IT systems, and production results are automatically prepared based on movement data from production equipment. Also, we introduced IoT devices to monitor production equipment and help improve productivity and reduce losses, and worked towards lowering the burden on the environment through the likes of energy-saving and waste treatment. As a result, we forecast productivity improvements of 30% over our existing factories. These initiatives have enabled us to realize manpower-saving and are also serving to address the decline in the working population as well as social issues such as the reform of the way employees work.
Furthermore, we have been conducting a myriad of initiatives for our existing factories, such as performing task analysis using AI cameras developed in-house and pushing forward with productivity and yield improvements. Presently, our core systems differ between Japan and overseas. This presents a bottleneck when the site of work changes.We will go on to promote DX with "integration" as a keyword from that standpoint as well.
Value Creation | ESG Management | Financial and |
Corporate Data |
Human resource empowerment initiatives
Meiko leaves the operation of its overseas factories in the hands of local staff. Our ability to do so is the result of establishing a cycle of dispatching local staff to Japan to study manufacturing and having them engage in factory operation following their return. This cycle has been in place since the startup of our Guangzhou Plant in 2000. Alongside the expansion of Meiko's efforts to develop its businesses globally, more and more individuals representing a number of nationalities are active in Japan as well. Be it Vietnam, China or Japan, our human resources capable of working in any country have steadily grown in number. Going forward, we will continue to further expand upon such initiatives.
In terms of recruitment, as the ratio of new graduates and mid-career hires is roughly 50% each, there is no discrimination between the two categories. As such, a corporate climate of working in a free environment is in place. While it goes without saying that employees are properly called upon to demonstrate work skills, we do not discriminate against them whatsoever on the basis of nationality or gender provided that they are capable. Given our need to further advance our global business development efforts in a strategic fashion, diversity could be considered an essential choice for our company. We strive to ensure that diverse human resources are able to fully demonstrate their abilities without discrimination based on race, creed, religion, nationality, disability, or the like. We promote the creation of a comfortable working environment that is safe, secure, hygienic for all our employees, respects their diversity, and allows them to develop.
As a result, with gender as an example, the ability for both men and women to approach their work without worrying about their gender has become one of Meiko's strengths. Such a positive working environment is surely part of our company's value. Of course, it is true that there was a long way to go in terms of internal education to establish such an environment. Unless we make a steady effort to bridge the gap of awareness among our employees, diversity cannot be achieved. It is important to continue to make efforts to gradually change the mindset of onsite workers until "diversity as a matter of course" can be achieved without worrying about various differences. If we aim for further improvement in work performance, we need to reform the way we work, including telecommuting.
We are currently working on improvements in all areas to enhance the quality of our work. For example, should productivity improve by 30%, we may be able to boost net sales up to double the amount. In our eyes, that would enable us to sufficiently best our global competition with the same headcount. In the future, we would like to motivate our employees to work harder, and we would like to provide generous support, including salary consideration, to new hires and other young employees.
Shareholder returns and communication with investors
Meiko views the improvement of profits for its shareholders as one of its priority management challenges. For the time being, we will prioritize investment for expanding our corporate scale and focus on growing our net sales and profit amounts. With a target dividend payout ratio of 15%, we will endeavor to increase dividend amounts as well as expand amounts of profit.
In corporate management, communication with shareholders and investors is indispensable. Meiko conducts initiatives that incorporate management by arranging for opportunities for our officers to hear the opinions of shareholders and investors at shareholder's meetings, financial results briefings, individual interviews, and other forums.
Through the provision of PCBs, we at Meiko have made investments, expanded employment, and stably delivered products bearing outstanding quality to our customers while simultaneously paying taxes in countries where we have placed factories and making local contributions in various ways. Going forward, we will keep on growing and contributing to society through challenging the evolution of electronics.
15 | 16 |
MEIKO corporate report 2023 | Introduction | Value Creation | ESG Management |
Financial and
Corporate Data
Outside Director's Message
Meiko formulated its five-year Medium-term Business Plan based on our Business Principles of "We provide the best- ever products and services for our customers through Meiko's manufacturing, thus contributing to the creation of happiness in employees and society," and is currently in the midst of that term.
Taking an objective, top-down view of the situation the company presently finds itself in, we see demand in the electronic parts industry as continuing to be high despite the likes of COVID-19 and issues with international affairs rearing themselves. At the same time, unstable elements are also present, such as how our line of business is significantly affected by surging resource and energy prices and how our production site presence in Vietnam and China leaves us prone to the effects of economic security. Further, we are currently in a situation where we must bear in mind that the impact of exchange rates yields performance values on paper that exceed our actual ability.
Based on these conditions, Meiko is steadily taking the next steps to further grow the company going forward, such as enhancing its domestic sites largely through its new Tendo Factory, organizing the roles of its various overseas sites, and revising its purchasing system, and is making progress towards the realization of the content set forth in its Medium-term Business Plan.
Meiko's Board of Directors has been formulating plans and discussing and examining individual measures. As an Outside Director, I have participated in those discussions and examinations while constantly being mindful of whether the results of specific matters of examination would serve to benefit our shareholders and other stakeholders. I also make it a point to occasionally provide opinions and recommendations that are difficult for internal members to offer. Additionally, in situations outside meetings of the Board of Directors, through the likes of communication with the executive side, I work towards grasping the actual situation at the company for the sake of effective discussions and also provide verification and advice from the perspective of both sides on whether things that we are set to carry out as a matter of Board of Directors policy are moving towards realization.
Even in comparisons dating back to 2018 when I assumed the post of Director, Meiko's corporate governance system has been becoming stronger with each passing year. I believe that is manifesting itself not only in actions in the form of the formulation of our Medium-term Business Plan as I mentioned above, but also in the matters that we have been disclosing externally as ESG/CSR initiatives as well as in the changes in our officer makeup. At present, Meiko has four Outside Directors and two Audit & Supervisory Board Members. At meetings of the Board of Directors that they also attend, these members state their opinions from their individual specialized perspective or objective perspective that is a product of them being outside members. These opinions then form the basis of active discussion with the executive side as well.
Going forward, while firmly maintaining an ideal stance as an Outside Director, I seek to continue confronting the internal and external challenges our company will likely face, particularly through the activities of the Board of Directors, and in doing so, keep on doing my part for the further growth of the company and assisting with the realization of our purpose of growing and contributing to society through challenging the evolution of electronics.
Outside Director Nao Tsuchiya
17 | 18 |
