Overseas Business History
In its endeavors to establish a label market in Japan, the Company sought to obtain information on advanced adhesive label tech- nologies in Europe and the U.S. from an early stage in its history. “A-100 type” label printing machine the Company developed in 1973 as part of its efforts to expand sales of adhesive products for labels attracted great attention from Europe, the U.S., and Asia. LINTEC’s irst overseas ofice was an ofice in Beijing that opened in 1985. In addition to cultivating label markets in China, the Company commenced development of overseas business in window ilms for automobiles and buildings with the acquisition of MADICO, INC. in the U.S. in 1987.
In 1994, LINTEC opened a sales ofice in Singapore to expand sales of semiconductor-related products. The following year this ofice was incorporated as LINTEC SINGAPORE PRIVATE LIMITED and its business was extended to products such as adhesive products for labels. It subsequently became the strategy center for sales network expansion in Southeast Asia.
On the manufacturing side, the Group’s irst Asian adhesive products plant, PT. LINTEC INDONESIA, was also established in 1994. Thereafter the product supply structure was strengthened by building plants in Malaysia, China, South Korea, and Taiwan based on the concept of local production, which means that we manufacture closer to the customer and thereby provide our cus- tomers with a stable supply of products.
Following the establishment of a production base in Thailand in 2011, sales ofices were set up in quick succession across Southeast Asia and in India, and in January 2015 LINTEC ASIA PACIFIC was established in Singapore to oversee all sales bases in the region.
In 2016, LINTEC secured a foothold for full-scale business development in the European and North American markets with three acquisitions in the U.S. and the U.K.
SPECIAL FEATURE
The LINTEC Global Network
LINTEC has been very active in globalizing its business in recent years and currently has plants and offices in
19 countries and regions. “Strengthening of regional strategy” is a key initiative in the medium-term
business plan LIP-2019 as LINTEC strives to build up businesses in Japan and overseas. Below we outline the
history of LINTEC’s overseas business expansion and profile the three companies in Europe and North
America that became subsidiaries in 2016.
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Manufacturing subsidiary Sales subsidiary, Ofice
Holding company, Regional headquarters
Plants, Branch ofices, and R&D ofices of subsidiaries
Overseas Sales / Overseas Sales Ratio
The Group’s overseas sales in the iscal year ended March 31, 2017 were ¥77.8 billion, an increase of approximately ¥36 billion compared with 10 years previously. The overseas sales ratio rose from 21.8% in the iscal year ended March 31, 2007 to 37.8%. It is expected to be close to 50% from the iscal year ending March 31, 2018, as it will include the full-year consolidated contri- bution of the three companies converted to subsidiaries in the iscal year ended March 31, 2017.
Overseas sales have increased approximately ¥36 billion
over the last 10 years with average annual growth of 6.4%.
Japan Performance trends
FY2007 Net Sales
¥
192.7
billionFiscal year ended March 31
FY2017 Net Sales
¥
206.0
billionFiscal year ended March 31
Overseas
¥
41.9
billionOverseas
¥
77.8
billionApprox.
1.9
timesJapan
21.8%
Ratio of overseas sales to net sales37.8%
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MACTAC AMERICAS, LLC
Adhesive materials manufacturer MACTAC has a solid position in North America, where the market is growing at a steady 2%–3% annually and accounts for an approximately 30% share of the global adhesive label materials market. Working with three manufacturing bases in the U.S. and Mexico, it has good relationships with its more than 1,000 customers and possesses a long supply record and strong brand. In addition to adhesive products for labels, MACTAC handles decorative graphic sheets that can be used as wall hang- ings and a variety of industrial and medical tapes. Its sales total approximately ¥35 billion.
MACTAC complements LINTEC’s strengths in adhesive ilms with a focus on adhesive papers and excels in hot-melt adhesive formulation technology that the LINTEC Group did not possess before. It also brings high-speed coating facilities to the Group for the irst time. The company’s extensive sales network in North America will facilitate the rollout of LINTEC products in this market, and by engaging in product development that combines the two companies’ technologies, LINTEC will seek to grow business in other regions as well.
Focus
We profile the three 2016 acquisitions in the U.S. and the U.K. with comments from company representatives.
SPECIAL FEATUREEdward LaForge, President
The true strength of MACTAC comprises our employees, technology, and culture. The innovative spirit and strong R&D team at MACTAC have led to unique technology solutions, including our hot- melt adhesive formulation. We believe combining LINTEC and MACTAC technologies will strengthen our market positions, and we are conident that “our products,” including LINTEC’s, will extend their global reach. What’s more, we hope to fuse our respective corporate cultures, technologies, and strategies to generate the beneits of positive synergy early on, and contribute to the Group.
MACtac Americas, LLC
Head ofice: Ohio, U.S.A. Established: 1959 Number of employees: 496 (As of December 31, 2016) Net sales: ¥34.2 billion Operating income: ¥3.6 billion (Year ended December 31, 2016) Acquisition price: Approx. $270 million (Debt assumption is not included) Head ofice
Columbus Plant
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VDI, LLC
Based in the U.S. state of Kentucky, VDI is a manufacturer of func- tional ilms. The company uses metallizing technology, which forms thin metal layers on ilm surfaces, to make metal vapor deposition ilms and sputtering* ilms that it markets itself. As it is a supplier to MADICO, LINTEC’s window ilm manufacturing subsidiary in the U.S., there is potential for cost savings in materials procurement. The LINTEC Group has not had metallizing technologies before and will be using them in product development to roll out business in new ields.
* Sputtering: The ejection of particles by bombarding materials such as metals and oxides at high energies in a vacuum and the deposition of the particles on ilms and other surfaces.
David Bryant, President
We believe “Quality, Innovation, and Service” are three keys to our success. Producing quality products generates satisied customers; innovation allows us to serve many markets across the globe; and excellent client service generates future business. We believe VDI and LINTEC have many things in common, as manufacturers. We both are very active in the window ilm market and look for new technologies to broaden opportunity. From now on, we at VDI, as a LINTEC family member, will absorb various things and contribute to the family with better performances.
LINTEC GRAPHIC FILMS LIMITED
LINTEC GRAPHIC FILMS signed a trademark licensing agreement with LINTEC in 2010, thereby adopting the Company’s name, and is the U.K. sales company for adhesive products, with a focus on the Company’s adhesive products for labels, graphic sheets, and window ilms. Its name will be changed to LINTEC EUROPE (UK) LIMITED before the Group exhibits at the world’s largest label event, Labelexpo Europe 2017, in late September in Belgium. LINTEC will be aiming to accelerate new customer acquisition in Europe by making even more effective use than before of the company’s mar- keting strengths and wide-ranging sales network.
Andrew James Voss, Managing Director
LINTEC’s corporate culture is ethical, creative, and positive. The underlying culture of LINTEC GRAPHIC FILMS, LINTEC’s business partner, is very similar to that of the LINTEC Group. Having strengthened our ties with LINTEC EUROPE B.V. through our change of name, we will be aiming to expand sales in Europe. It’s highly rewarding work. We will continue providing our customers better products and services to help LINTEC become recognized in Europe as an innovation leader.
VDI, LLC
Head ofice: Kentucky, U.S.A. Established: 1971 Number of employees: 36 (As of December 31, 2016) Net sales: ¥1,070 million
Operating income: ¥20 million (Year ended December 31, 2016) Acquisition price: $26 million (Debt assumption is not included)
Lintec Graphic Films Limited
Head ofice: Buckinghamshire, U.K. Established: 1993 Number of employees: 18 (As of October 31, 2016) Net sales: ¥850 million
Operating income: ¥130 million (Year ended October 31, 2016) Acquisition price: £7.3 million
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