OSAKA -- Industrial materials maker Toyobo plans to raise its return on equity to around 8% for the year ending March 2018 by putting greater emphasis on high-revenue operations.
President Seiji Narahara unveiled the target amid growing shareholder demand for fresh management guidelines following the introduction of a corporate governance code. The Japanese company's ROE was 5.4% for the year ended March 31.
Toyobo expects consolidated net profit to rise 48% to 12 billion yen ($95.7 million) for the year ending March 2016 thanks to strong packaging film operations. That surge would likely lift ROE to 7.6% for the year.
"We plan to scale back [liquid crystal display] television backlight films and other operations whose revenues have declined as those products become commodities," the president said. "We will continue to shift our operations to high-revenue generators such as protective films for LCD TV polarizers."
Under its four-year plan through March 2018, Toyobo aims to raise consolidated sales to 420 billion yen from 351 billion yen last fiscal year and operating profit to 30 billion yen from 20.5 billion yen.