Message from the President Nov.2009

a monthly magazine for our employee Nov.2009

From the Point to the Plane : Reconfirmation of our Basic Strategy And REVIEW of First Half of the Year

I have been informing you of our current crisis situation and asking every one of you to do what ever you can do to improve the utilization ratio of the company. Today, I would like to inform you of what is the current situations is as the result of our effort.

Number of new contract we’ve obtained during first half of the fiscal year is not so different from the result of same period for the past three year, 2006 to 2008. We can even say that considering the current change in the market and hard environment to obtain new orders, we are doing quite well. Also for the average price rate for the entire company, drop compared to the previous fiscal year is very small. I believe that we should evaluate this as a result efforts by our engineers and sales force cooperating together.

In other words, even though we have not achieved a sales goal which we set at the beginning of the year, we can say that the result is not so bad compared to the normal year, or we can even say that we are putting up a good fight. But why the utilization ratio is gradually dropping from the April? This is the most concern to us. Answer to this is quite clear. It is because that the number of contracts terminated was larger than that of new contract started in the first half of the year. As I noted in my previous message, our customers and market are moving upward even though its speed may be slowly and only partially. But on the other hand, there still are downward movements to reduce or withdraw from the market. Therefore, although we are now entering the 2nd half of the fiscal year, we should not think anything under an assumption of the market will rapidly improve.

Well then, what should we do? We should not be optimistic about the market, but we can see that our customers are slowly moving forward even from our current performances. Number of new contracts we have obtained in the 2nd quarter was 42% up from that of the 1st quarter. Also other marketing indicators such as the number of orders and number of sales visits have increased as well. Therefore, changing our sales strategy to the “aggressive” sales effort and cooperation with our engineers to increase the number of contracts has started to pay off with concrete results. It is most important that the entire employee participates in accelerating such upward flow. And by achieving more new contracts compared to the terminating contracts in the 2nd half of the year would eventually continue to the better next year.

Because of the current hard environment, our strategy of “from the Point to the Plane” which we have incorporated from the beginning of the company would be important. Especially in handling a new contract with new customer, trust and high evaluation to the first engineer assigned to the customer would lead to the additional contracts. By this, a point would becomes plane gradually, and it becomes the place for our colleagues to work. For this half of the fiscal year, let us support each other to defend our work place.

November, 2009