Pentax 2005 Annual Report Download - page 7

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Other Business Field
Hoya’s Crystal division met with lower sales. We are in the
process of reducing the size of this division to the most
appropriate scale. Hoya manufactures and sells tableware
including wine glasses and bowls, interior products such as
vases and clocks, and crystal jewelry. Given the contraction
of the market for gifts and the increasing competition from
overseas products, however, the size of such business is
decreasing year by year.
As CEO, I am always looking for the most appropriate
ways to allocate the finite amount of management resources
we have available. The authority to manage Hoya’s day-to-
day business has been delegated to a great extent to each
internal company, and I do not micro-manage execution.
As expressed by the well-known phrase, “selection and
concentration,” I believe that my role, given Hoya’s diverse
business strategy, is to send people and financial resources to
the areas identified as having the potential for future growth.
By the same token, this sometimes means I must address the
need to scale back in fields that show little prospect for
growth.
Future Prospects
In fiscal 2004 and 2005, we made large-scale investments in
plant and equipment to position our Information Technology
field for continued expansion in market demand. We plan to
achieve further growth in this business by effectively
managing those investments in fiscal 2006 and beyond.
Although some caution is in order due to the slipping sales
of digital cameras, the factors indicating further growth for
Hoya outnumber the concerns. These positive indicators
include the trend toward higher resolutions for camera-
equipped mobile telephones, the growing size of LCD
televisions, and expansion of the market for portable music
players. We will seize the opportunity presented by this
<Eye Care>
Net sales in our Vision Care division decreased 3.3% on the
previous year, and operating income was down 2.4%. Net
sales in the Health Care division grew 10.7%, and operating
income by 13.9%. Hoya is promoting a differentiation
strategy focusing on high-value-added products, to counter
the matured market for eyeglass and contact lenses.
Hoya is undertaking global development of its eyeglass
business. Given the differences in political and economic
systems and business practices in each country, and variations in
consumer preferences and lifestyles, we are working hard to
ensure that our business strategies are fine-tuned for all of these
local factors. In Japan, the price wars we have witnessed for the
past several years lost steam, and demand recovered for the
high-quality products in which Hoya excels, indicating the
potential for solid improvement in results. A decline in sales in
Europe was inevitable, given the elimination of the health
insurance system that had covered the purchase of new
eyeglasses in Germany, our largest market in the region, and the
temporary adjustments made necessary by the relocation of
laboratories in France and Spain.
In the contact lens business, we are operating a directly
managed specialty retail store chain, Eye City, and by the end
of March 2005 we had a total of 124 stores in Japan.
Throughout the fiscal year, we moved forward boldly with a
scrap-and-build program, and this has served to improve our
competitive position.
Hoya’s IOLs, used for the medical treatment of cataracts,
enjoy an excellent reputation for high quality in the market,
and this business continues to post strong sales growth.
Looking to the future, we expect that the number of older
people in developed nations who need cataract treatments
will increase. In anticipation of a global growth in demand,
Hoya took its first real step toward overseas deployment
during the fiscal year under review.
A MESSAGE TO OUR STAKEHOLDERS