Providing added value by leveraging a combination of functions.
In an era when information technology (IT) is making the world a smaller place, and distribution networks are proliferating, a business that merely involves handling transactions can only be short-lived. Instead, Inabata leverages its combination of functions to provide added value that goes beyond simple transactions. Provision of such added value defines Inabata’s raison d’être in the market.
A combination of three functions enhancing the trading business.
The Inabata Group operates about 20 manufacturing and processing subsidiaries(*1) around the world, which generate some JPY65.0bn(*2) in sales. This figure equates to approximately 10% of the Group's consolidated net sales, of JPY680.9bn(*3).
As an example of the manufacturing and processing function, in the Plastics segment, we operate seven resin compounding facilities in seven countries, mainly within Asia. Resin compounds are produced by adding additives, such as coloring agents and flame retardants to material resins, to create new characteristics. Inabata’s compounding facilities have a combined production capacity of 190,000 tons per year with about JPY38.0bn(*2) in sales.
Our customers use these resin compounds as materials to form the plastic parts found in automobiles, office equipment, and home electronics. Many of our customers operate global businesses, so they need a stable supply of resin compounds to locations around the world. Inabata is capable of meeting such needs by utilizing its manufacturing and processing facilities in various locations, which sets us apart from other trading companies.
Sale of resin materials around the world is expanding thanks to the resin compound business. It is also contributing to the growth of other transactions, such as those of chemical additives.
（*1）Number of consolidated subsidiaries engaged in manufacturing and processing as of March 31, 2022
（*2）Simple sum of sales for FY03/22
（*3）Consolidated net sales for FY03/22
Resin compounds (left) and a resin compound factory in Thailand (right)
2.The Logistics Function
Based on the product knowledge and expertise the Group has amassed over the years, Inabata partners with trusted warehousing and transport companies to propose and provide logistics functions optimized for its customers. To customers conducting business around the world, Inabata offers vendor-managed inventory (VMI) services utilizing its broad network.
VMI is a system whereby Inabata manages and replenishes inventories on behalf of customers. We use IT to analyze customers’ production information and coordinate with multiple suppliers and distributors to provide customers with materials in an efficient manner. For example, to meet customer demand for timely deliveries and one-stop services, in 2017 we began operating our own logistics center in Indonesia handling automotive parts and resin materials. Our transaction volume steadily increased thanks to improved customer convenience, and we expanded our storage facilities in 2019. Moving forward, we plan to provide new products.
3.The Financing Function
We propose ideas and solutions to address customer issues, such as how to reduce their financial burden and help them hedge foreign exchange risk. We need a robust financial base ourselves to provide the financing functions clients expect of us. We consider the net D/E ratio(*4) a priority management indicator and are continually working to enhance the financial soundness.
The following graph shows Inabata’s equity capital, net interest-bearing debt, and net D/E ratio. Our net D/E ratio is trending steadily downward, indicating an ongoing improvement in financial soundness.
The financing function is an essential feature of Inabata along with manufacturing/processing and logistics functions. We are working to develop businesses appreciated on a long-term basis by providing customers with added values that are unique to Inabata.
（*4）Net D/E Ratio = (Int. Bearing Debt – Cash & Deposits) / Equity Capital Lower indicators demonstrate a sounder financial condition.