The Living Essentials Group works to procure and provide various products and services for consumers in a stable manner centered on the fields of foods, clothing and housing. Our core fields are food products and foods, textile products and essential supplies. We are also involved in the healthcare and marketing service fields.
Midterm Corporate Strategy 2012 Targets and Progress
During Midterm Corporate Strategy 2012, the Living Essentials Group is focusing on the following key strategies: (1) expanding and improving our raw materials procurement network, (2) strengthening our Japan business base, and (3) targeting overseas growth markets. These strategies are guiding our efforts to contribute to MC's growth.
In terms of the first of these three strategies in the year ended March 2011, we enhanced our ability to supply grains and raw materials for animal feed in the U.S. and Australia. Meanwhile, in China and Brazil, we established grain sales companies. These moves have expanded our business in terms of both supply and sales. With regards to the second strategy, four Mitsubishi Corporation food distribution wholesale subsidiaries signed a merger agreement, which culminated in the July 2011 launch of Mitsubishi Shokuhin Co., Ltd. In overseas growth markets, Princes Limited, a U.K. subsidiary manufacturing food products and soft drinks, agreed with U.K.-based Premier Foods plc to acquire its canning operations, thus making further strides with business expansion.
Net income for the year ended March 2011 was ¥46.3 billion, a decrease of ¥0.5 billion year on year. While general merchandise- and food-related businesses posted higher earnings, the bottom-line result was largely unchanged because of tax expenses associated with adopting the consolidated tax filing system.
Business Environment and Outlook for Year Ending March 2012
The global supply-demand balance is changing due to limits on the supply of resources. At the same time, structural changes are taking place in emerging markets, along with Japan, the U.S., Europe and other major markets. Eyeing these changes, we intend to strengthen our business platform extending from raw materials procurement to transportation and processing, and product distribution and sales. These platform revolve around core subsidiaries and affiliated companies in each field. While taking actions in line with the three key strategies I mentioned earlier, we plan to allocate businesses resources to enhance our procurement ability in foods and other fields, and to expand businesses, centered on existing business investees, with the aim of augmenting our earnings power. In emerging markets such as China and Brazil, we will take steps to develop across business domains where we are strong and work with leading partners to create new earnings platforms from which to drive growth.
We are projecting net income of ¥55.0 billion for the year ending March 2012, which would represent an ¥8.7 billion increase year on year. This forecast factors in the absence of tax expenses recorded in the past fiscal year from adopting the consolidated tax filing system. We also expect higher equity-method earnings in food-related businesses.