Pentax 2003 Annual Report Download - page 5

These measures included, in the Electro-Optics division, a technical alliance formed with Dai Nippon
Printing Co., Ltd. for joint development of mask blanks for next-generation semiconductors. We also made
investments to develop other high-precision products. In the Health Care division, meanwhile, new stores are
being opened to win a larger share of the expanding market for contact lenses.
New product development is best represented by Hoya’s proprietary soft intraocular lenses (IOLs). In
the past, Hoya’s eyeglass and contact lens businesses brought the Company into close contact with the field of
ophthalmology. These new IOL products, however, bring us a step closer to the field of medicine, which we
are concentrating on as an area of expected future growth. With an eye toward expansion into the U.S. and
Europe, we are pursuing further development and avidly striving toward business expansion.
To advance the goals of expanding overseas and in businesses in which significant growth can be
expected, after determining the potential for future growth, Hoya established manufacturing facilities and pur-
sued mergers and acquisitions aimed at expanding sales channels, ensuring a stable supply and winning a larger
share of the global market. A new factory for IOLs was established in Singapore, and an eyeglass lens process-
ing and sales company acquired in the United States. With the Japanese market shrinking, we are planning to
further widen our global base in the future.
On the other hand, we are implementing measures to sell off or withdraw from businesses and divisions
that show little sign of growth, or those for which the prospect of positive synergies with other parts of the
operation is minimal. Two examples of this are the sale of the hearing aid business in the Health Care divi-
sion, and a contraction of the Crystal division.
In summary, Hoya manages its portfolio of numerous businesses by assessing the need for and timing of
nurturing, maintaining, investing, acquiring and/or withdrawing from each of them. As outlined above, in the
fiscal year under review the overseas sales network was being strengthened through M&A activity, while other
businesses were being scaled back through a streamlining process of selection and emphasis toward business
fields in which Hoya has a competitive advantage. In its portfolio management, Hoya will continue to use
these methods to determine the primacy of each of its businesses, and allocate operating capital accordingly.
Performance
In the Information Technology field, performance was sluggish overall at the high-tech companies that make
up our client base. However, in terms of product development, clients continued to demand precision, high-
performance products, and Hoya managed to increase orders by introducing the new cutting-edge equipment
necessary to develop and manufacture such products. Sales of high-value-added products rose as a result, lead-
ing to a 7.6% increase in revenue.
In the Eye Care field, the Vision Care division enjoyed strong sales of eyeglass lenses overseas despite
the sluggishness of the domestic market, which along with rising sales of contact lenses and IOLs in the Health
Care division led to a 4.1% rise in revenue.
As a result of these factors, and along with scaling back of the Crystal division and the sale of the sec-
tion handling physical- and chemical-use lasers in the Photonics division, consolidated net sales increased
4.7% from the previous fiscal year. 3
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