Basic Concept of the New Medium-Term Management Plan

To fulfill our founder Soichiro Asano’s vision of "contributing to the benefit of society," we have continued to grow as a company engaged in social infrastructure while expanding our scope of business to meet the needs of the times.
In the previous medium-term management plan, we established a long-term vision (TOA 2030) aimed at "Build a prosperous society and connect all the people over the world for the better future" as our ideal vision for 2030. Additionally, we have set our financial targets of 280 billion yen in net sales and 13.5 billion yen in operating income for fiscal year 2030.
In the new medium-term management plan, effective from fiscal year 2023, we are committed to enhancing our core competencies and further expanding our business scope. Our objective for fiscal year 2025, the plan's culmination, is to achieve net sales of 267 billion yen and operating income of 12 billion yen, in line with our long-term vision for 2030.

In order to realize our long-term vision, our basic policy is to establish a management framework that integrates business and human resource strategies during the period of the new medium-term management plan. Specifically, we will focus on enhancing the quality and quantity of human resources to facilitate the expansion of our business operations.
The criteria evaluating carbon neutrality, GX, DX, human rights, and diversity and inclusion, as demanded by society, are continually evolving. We are committed to responding promptly to these changes by prioritizing "deepening ESG management" as a major theme.

Enhancement of Existing Businesses

As the demand for disaster prevention and mitigation increase in light of recent catastrophic natural events, we are committed to addressing societal needs by prioritizing the protection of human lives. Our focus will be on port and harbor civil engineering, leveraging our expertise in this area. In the domestic building construction business, we are actively developing distinctive technologies and accumulating expertise to bolster our strengths in key areas of excellence, including logistics, housing, welfare, and PFI (Private Finance Initiative). We anticipate an increase in large-scale projects merging building construction and civil engineering.
In April 2023, we newly established sales divisions in both the civil engineering and building construction units. Our objective is to establish a close collaboration between these units to secure building construction orders from clients within the civil engineering sector, leveraging its expertise in coastal areas.
In the overseas business, we will advance various types of projects in regions where we can leverage our strengths, encompassing not only port construction but also land-based construction. This initiative will draw upon our vast experience gained across 53 countries.

Acceleration of Business Scope Expansion

In the domestic civil engineering business, we anticipate an increase in defense and U.S. military-related maintenance projects. We are well-prepared to meet wide-range of needs through strategic collaboration with other divisions.
Additionally, we will proactively engage in land-based civil engineering and offshore wind power construction projects to expand our business scope.
In the domestic building construction business, we will enhance our business diversification efforts by engaging in PPP/PFI projects beyond our established areas of expertise, such as office buildings, medical facilities, local city development, funeral halls, and meal service centers.
In the overseas business, we aim to expand building construction projects. To achieve this, we intend to establish local subsidiaries and develop region-specific sales and marketing strategies tailored to each specific region.

Strengthening Management Foundations

To strengthen our management framework, it is essential to establish a continuous cycle to sustainably increase corporate value, driven by a workforce that experiences high levels of fulfillment.
To this end, our initial focus will be on recruiting and developing diverse range of talents in line with our "Basic Policy for Human Resource Development”. Specifically, our aim is to cultivate an organizational culture with a high level of "employee well-being”, embracing diverse perspectives, achieving diversity and inclusion, and empowering all employees to engage actively, thereby promoting sustained growth of our workforce over their career span.
Furthermore, with "human capital management" as our focus, we will assign and train our young managers and offer flexible job rotations to ensure that individual preferences and abilities are taken into consideration in the workplace.
To achieve these objectives, we have newly established the Human Resources Strategy Section, which tasked with formulating and implementing specific measures.
Additionally, we will continue our efforts to enhance productivity and promoting digital transformation (DX) to increase the efficiency of both direct and indirect divisions in the project sites.
We are also striving to establish an advanced governance structure and intend to appoint an independent outside director as the chairman of the Audit Committee. Compliance forms the core of our governance, and we are committed to educating employees to instill a shared understanding among all directors and staff members that our top priority is to contribute to society by delivering safe, high-quality social capital.

Promotion of Carbon Neutrality

Two years have passed since setting the 2020 target, and we've managed to reduce Scope 1+2 emissions by about 5% in fiscal year 2022, meeting our Science-Based Targets (SBT).
On the other hand, our FY2021 data indicates an increase of about 22% in Scope 3 emissions. To address this challenge, we are proactively implementing strategies such as the conversion of buildings to Zero Energy Buildings (ZEB) and other pertinent measures. Currently, we are actively engaged in reducing greenhouse gas emissions by advocating for energy-efficient construction practices and adopting low-carbon construction equipment and fuels. However, we recognize that research and development play a crucial role in achieving further reductions. Accordingly, we are committed to leveraging R&D efforts to create new business opportunities, particularly through the development of low-carbon concrete and other innovative technologies. This strategic approach will enable us to promptly address evolving societal needs.
Furthermore, alongside our internal efforts, we will continue to work towards achieving our 2030 target through further dialogue and collaboration with our supply chain.

Enhancing Corporate Value Through Stakeholder Dialogue

We maintain constructive dialogue with various stakeholders, including shareholders, customers, partner companies, and employees, and implement necessary improvements. For instance, last year, we developed an "Action Plan for PBR Improvement" following discussions with investors and shareholders.
In our new medium-term management plan, we have set a 20 billion yen investment limit, prioritizing reinvestment of profits from our core business for further growth while also focusing on ensuring stability and enhancing shareholder returns. This transparent disclosure reflects our commitment to improving shareholder returns based on feedback from shareholders and investors.
As demonstrated by this example, we prioritize dialogue with all stakeholders and will continue to enhance our corporate value by considering their feedback.

In Closing

There are abundant business opportunities in the sea, which is our starting point. Particularly, Japan is surrounded by oceans, presenting various opportunities to protect our lives and society. These include energy creation such as offshore wind power generation, biodiversity conservation, ensuring a stable food supply, disaster prevention and mitigation against increasingly severe natural disasters, and measures to address rising sea levels due to global warming. TOA CORPORATION, proud to be a leading company in in the field of marine construction, will continue to embrace new challenges, moving towards a sustainable future from the sea, while keeping an eye on the changing times and societal needs.

Takeshi Hayakawa, President and Representative Director