Strengthening Cooperation Among Operating Companies to Become a Partner in People’s Well-being
With further advances in globalization, Otsuka Holdings is further expanding its scale, with overseas sales accounting for approximately 70% of total sales and market capitalization exceeding 4 trillion yen. Amid this expansion, the group’s business environment is in a state of constant flux, requiring the creation of a more resilient management structure. In January 2024, the role of Chief Operating Officer, or COO, was newly established, and as we aim to achieve the goals of the 4th Medium-Term Management Plan (MTMP) by promoting new business expansion and investments that generate the next generation of growth, I recognize that I have three main roles to play as COO.
My first role is to strengthen collaboration among operating companies. The Otsuka group’s operating companies with high expertise, including those covering the Pharmaceutical Business, Nutraceutical Business, and Consumer Products Business, provide a wide range of products and services in their respective fields, and organically linking these activities will be a key in the future. To fully support the well-being of people in their life, it is necessary to further strengthen collaboration among these operating companies.
To this end, I will work to encourage information sharing and cooperation among our group companies, facilitate the smooth execution of cross-company initiatives, and leverage our group synergies to provide integrated and solutions to people in their life.
The second role is to accelerate decision-making and execution. I feel the prompt and effective decision making, with close communication with CEO Higuchi, is essential in a wide variety of business domains. By doing so, we will adapt and respond dynamically to changes in market and customer needs and create new business opportunities.
The third role is to bring about sustainable growth as a group. I will work to leverage each operating company’s strengths to solve social issues and effectively fulfill my responsibility for the sustainable growth of the Otsuka group as a whole.
Direction of the 4th Medium-Term Management Plan
During the period of the 3rd MTMP, the external environment changed dramatically as geopolitical risks such as the pandemic caused by the outbreak of COVID-19, sharp exchange rate fluctuations, and conflicts around the world became apparent, and technological innovation, including artificial intelligence (AI) progressed. In order to adapt and respond to these changes and promote global expansion, each operating company must autonomously manage business based on the characteristics of each region, rather than work under centralized management by the holding company. While we have seen technological advances, such as telecommuting and other diversifications of work styles, as well as the use of AI in daily work, we still believe that the foundation of business is people-to-people relationships. Because the Otsuka group has a diverse range of operating companies that we work to encourage collaboration through dialogue.
Reflecting on the 3rd MTMP, we have reaffirmed the importance of management that captures the essence of our businesses, and in the 4th MTMP, we will leverage the strengths of the Otsuka group to achieve further growth and value creation.
Our first measure in this area is to achieve both long-term growth and short-term earnings growth. The Otsuka group has a diverse range of businesses with different levels of risk and different cycles, from pharmaceuticals that require R&D with a long-term perspective, to food and beverages that are highly competitive on a day-to-day basis. With a view to sustainable growth beyond the 5th MTMP, we will execute aggressive R&D investments, create new products through in-house clinical development and strategic alliances, and take on the challenge of entering new business domains. In addition to this, we will maximize the value of existing businesses by pursuing greater efficiency and improving brand value to support the growth of the entire group. I believe that my role is to ensure to achieve both growth from a long-term perspective with short-term earnings growth.
The second measure is to create new value that leads to well-being. By strengthening our drug discovery and product development capabilities and promoting the creation of a framework for innovation creation, we will provide advanced pharmaceuticals and healthcare solutions.
The third measure is to conduct business management with an awareness of capital cost from a long-term perspective. By fostering a corporate culture that supports sustainable growth and stabilizing our financial base, we will support Otsuka’s innovation, thereby ensuring the economic development of the Otsuka group and stable and continuous returns to our shareholders.
Human Resources Supporting the Otsuka Group’s Growth: the Spirit of Challenge
Otsuka Holdings has a large number of operating companies under its umbrella, consisting of many affiliates. It is therefore key that each operating company steadily manages their businesses under autonomous governance. For myself, I emphasize ensuring a balance between the governance of the group as a whole and the management of each operating company. In this way, we pursue the execution of optimal management strategies.
In addition, from the past to the present, the source of the Otsuka group’s growth has been its people. We are tasked with developing excellent human resources who will lead our future businesses, and we will focus on strengthening our human capital by developing the skills and expertise of our employees. The development of human resources is of utmost importance for launching new businesses and expanding markets, and strengthening human capital is essential not only for each operating company but also for the collaboration amongst those operating companies. CEO Higuchi’s focus on employee training is also aimed at strengthening this human capital.
Otsuka has a culture of nurturing young talents as leaders of operating companies, creating an underlying support for the growth of the entire group. I am convinced that continuing to challenge ourselves and accumulate experience will pave the way to success. This spirit of challenge is the driving force behind the Otsuka group’s growth and strengthened governance.
Contributing to the World as an Indispensable Company
The Otsuka group aims to deliver total healthcare in a broad sense, as we provide products that cover all phases of people’s healthcare, and furthermore, to expand its perspective to the entire society surrounding human beings and to solve social issues related to healthcare. As president of Otsuka Pharmaceutical, I have been involved in both the Pharmaceutical Business and Nutraceutical Business, advancing these two in collaboration with other operating companies. This experience has been an important asset in carrying out my duties as COO of Otsuka Holdings. As medical care is expected to shift more than ever toward health maintenance and prevention, and the contact points between medical care and people’s everyday life are expected to grow, I believe that the Otsuka group has a great advantage in having products that address both of the aforementioned areas. Going forward, we will continue to support the realization of people’s well-being through innovation from a long-term perspective.
For the Otsuka group, “success” is long-term growth with an emphasis on sustainability, not just growth in scale. I will use my experience and work with the CEO to strengthen the group’s management structure. With close communication among top management and with the CEO as the final decision-maker, and myself as the strategic executor in my role as COO, we will oversee the operation of the entire organization. With the aim of becoming an indispensable company to people’s health worldwide, I will support the growth and development of the Otsuka group by ensuring the smooth operation of the organization and the execution of management strategies.
December 12, 2024
Representative Director, COO
