Pentax 2014 Annual Report Download - page 3

HOYA REPORT 2014
The Life Care segment has overcome challenges
and aim to accelerate growth
In fiscal 2014 the Life Care segment achieved 27% sales growth. I personally feel that we
could have achieved higher growth. That is, the Eyeglass Lens division, which was
significantly affected by the massive flooding in Thailand, and the Intraocular Lens (IOL)
division, which suspended shipments of some products and voluntarily recalled them, have
overcome their respective challenges and are on a recovery path. Looking at the overall Life
Care segment, however, I recognize that we have not made as much progress as planned
in terms of coverage (geographical and market), which is one of our major issues.
For example, the Eyeglass Lens division focused so much on recovering the capacity
utilization rate, which dropped as a result of the flood, that it failed to adopt initiatives for the
growth. We need to swiftly expand further in emerging markets with significant growth
potential. In case of the Medical Endoscope division, some growth was achieved, which,
however, was partly attributable to the market growth and the impact of yen depreciation. In
terms of expansion of coverage, I feel that we could have done it more speedily. In the midst
of technological innovation in endoscopic capabilities with its focus being shifted from the
diagnostic area to the therapeutic area, endoscopes have high growth potential as an
imaging platform. In addition, the Intraocular Lens (IOL) division has just begun to expand
globally. Each of the Life Care divisions has merely a 10-20% global share. By broadening
our coverage in markets and customer segments that have been untapped, we intend to
give high priority to add to our top-line growth.
The Information Technology segment has become a
stable profit generator
In our view, the Information Technology segment has passed a turning point of growth and
has entered a long, mature stage. With regard to mask blanks for semiconductors and
photomasks for liquid crystal displays, for example, we may continue to experience some
technological shift or innovation, such as a change in the structure of a chip, but I must say
that the industry itself has become matured.
Despite such a situation, substrates for HDDs or optical lens will never lose their critical role.
For many years, we have rigorously taken initiatives in enhancing competitiveness in the
Information Technology segment. I firmly believe that this segment will be secure as a stable
profit generator.
M&A activities complement coverage expansion
Having identified M&A as one of the effective tools to enhance our business portfolio, we are
aggressive in studying potential M&A targets, particularly in the Life Care segment, an area of
growth for HOYA. In the existing businesses, we look for M&A opportunities to expand
coverage into untapped markets, expand market shares, and acquire new products or new
technologies in the peripheral areas. This is because HOYA has not yet established a strong
position in the Life Care market, where growth can be reliably projected. We thus need first
and foremost to expand our shares and coverage. We believe that M&A activities would allow
us to accomplish that more speedily. Our M&A accomplishment in fiscal 2014 includes
making Wassenburg Medical Devices, a leading firm in automated endoscope reprocessors
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