Sumitomo Rubber—
Embarking on a New Era.
The Twin Pillars of
Structural Reforms and Growth Strategy
In early January 2025, I was in Las Vegas, for two key purposes. One was to globally promote our Company’s SENSING CORE at CES*1 2025, one of the world’s largest technology trade shows. The other was to sign an agreement with Goodyear Tire & Rubber Company of the U.S. for the acquisition of the rights to the “DUNLOP” trademark for four-wheeled vehicle tires in Europe, North America, and Oceania.
The Company has grown into a globally operating business, built on timely and sound management decisions. However, the rights to the DUNLOP trademark in Europe and North America have had a complicated history, and for more than the past 20 years, we have been unable to use the brand in those regions. Now, in the milestone year marking 30 years since the Great Hanshin-Awaji Earthquake, I was filled with a sense of elation as I prepared to attend the signing ceremony in the U.S. for the Company to reacquire those rights.
Looking back, it was in 1984, two years after I joined the Company, that we entered the European and North American markets by acquiring DUNLOP operations in those regions. At that time, I was in the marketing department, involved in a project to develop our global flagship tire. Through that experience, I came to truly appreciate and feel great pride in the strength of the DUNLOP brand in the European and North American markets, as well as the deep trust it commanded from customers.
Subsequently, due to growing global economic uncertainty, intensifying competition, and the impact of the Great Hanshin-Awaji Earthquake, we entered into an alliance with Goodyear in 1999. This arrangement allowed us to entrust the European and North American markets to Goodyear while we focused our resources on expanding our business in emerging markets such as Asia, South America, and South Africa. The strategy enabled us to achieve business growth. In 2015, the dissolution of the alliance resulted in Goodyear retaining the rights to the DUNLOP trademark in Europe and North America, but by that time, we had greatly expanded the regions in which we operated, and gained greater management autonomy.
Given this history, I am truly delighted that we have now been able to reacquire the DUNLOP brand and are once again able to deploy it globally.
Long-time dealers in the European and North American markets have given us warm support, saying, “It’s good to have you back. We’re counting on you.” All of our employees are now united in their determination to make the DUNLOP brand a central pillar of our long-term growth strategy, and to establish it as a globally recognized and beloved brand.
When we look back 10 years from now, I believe we will see 2025 as the true starting point of a new chapter for the Company—a year of exceptional significance.
*1 Consumer Electronics Show – One of the world’s largest technology trade shows, held in Las Vegas.
Let me begin with an update on the progress of our mid-term plan. Amid a significant decline in our performance to a historic low in fiscal 2022, we launched a new mid-term plan in 2023 with a strong determination to fulfill the commitments we made to our stakeholders.
One of the key initiatives in our mid-term plan is the selection and concentration of our existing lines of business. To carry out structural reforms for approximately 10 targeted businesses and product lines, we established a clear direction for six of them in 2024. This included the end of production at and dissolution of our U.S. tire plant, which had been one of our most critical issues. The process of driving structural reforms involved intense discussions at the Board of Directors and other forums, and required making painful decisions. Nevertheless, guided by our unwavering determination to fulfill the commitments we made to our stakeholders, we are steadily making progress on the remaining targeted businesses as well.
Since 2020, we have been engaged in the “Be the Change” Project*2 to reinforce the foundations of our business. Through cooperation across departmental boundaries, this project has led to organizational improvements, a more robust profit base, and enhanced cash flow.
These achievements have also served as a driving force behind our structural reforms.
Another key initiative is laying the groundwork for growing lines of business. We have been making steady progress in developing promising elemental technologies such as ACTIVE TREAD and SENSINGCORE. In particular, ACTIVE TREAD led to the launch of our nextgeneration all season tire, SYNCHRO WEATHER, in 2024. The product has become a hit in the market. Having worked in tire sales for many years, it was the first time I had ever experienced receiving such a large number of pre-orders even before the official release. As for SENSING CORE, we are supplying the technology to automobile manufacturers and steadily advancing commercialization in North America. At CES 2025, which I mentioned earlier, our exhibition booth attracted a large number of visitors, which heightened expectations for the Company.
In our sports business, we have made steady progress toward our goal of becoming one of the top three golf companies world-wide. This was driven by strong sales of XXIO clubs, the launch of new SRIXON clubs featuring our proprietary technology, and the outstanding performances of our sponsored athletes.
In our industrial products business, our vibration control dampers, which utilize our proprietary high-damping rubber, continue to receive high praise.
During the 2024 Noto Peninsula Earthquake, none of the 517 buildings equipped with our dampers suffered total or partial collapse. In January 2025, our vibration control dampers were featured on a television program, generating strong interest and positive responses from many customers. Our Head Office and Kobe Factory were affected by the Great Hanshin-Awaji Earthquake, and our Shirakawa Factory was impacted by the Great East Japan Earthquake. Because of these experiences, we are deeply committed to expanding the use of our vibration control dampers—products that can save lives during earthquakes and contribute to society.
An important challenge now is recovering our business performance in the near term. When it comes to our results, we are committed to transparently sharing information with our stakeholders, both in good times and in bad, and to fulfilling every promise we make. With the entire Company focused on this goal, we achieved a record-high business profit of 87.9 billion yen for the fiscal year ended December 2024 --a 13.2% increase compared to the previous year.
On the other hand, we recognize that some of our management indicators, such as business profit margin, remain below those of our industry peers. We are committed to driving the initiatives outlined in our mid-term plan and long-term corporate strategy with full force, and will work to improve various management indicators. To that end, we will place particular focus on "structural reforms," "performance improvement," and "growth strategy." In terms of structural reforms, we will define the direction for the remaining targeted businesses. For performance improvement, we aim to exceed our publicly announced targets, and for growth strategy, we will pursue initiatives from a long-term perspective based on our long-term corporate strategy. I will personally take the lead in driving these efforts with a strong sense of speed and collaboration across the Group.
*2 “Be the Change” Project—A transformative project led directly by the president that was launched in 2020. It aims to enhance organizational culture and strengthen the foundation for profitability.
Since its establishment in 2020, our corporate philosophy framework, “Our Philosophy,” has been actively promoted across our Group companies both in Japan and overseas. It serves as a guiding principle for employee behavior, alongside the Sumitomo Business Spirit.
Fulfilling our Purpose—“Through innovation we will create a future of joy and well-being for all”—is my mission. This belief is reflected in our mid-term plan and long-term corporate strategy.
As part of our efforts to embed our philosophy throughout the organization, I have been visiting domestic and international bases of operations to engage directly with employees through “Roundtable Discussions.” When speaking with the national top members of our overseas Group companies, I was encouraged by their comments: “Customer trust and innovation are what define Sumitomo Rubber and are our greatest strengths.” This reaffirmed for me that the spirit of “Integrity and Sound Management” is firmly rooted in our organization. We will continue these activities to further embed our philosophy and enhance employee engagement.
I have long believed that, in order to bring "Our Philosophy" to life, we must formulate strategies and manage our business with a longterm perspective. Following the completion of our mid-term plan -- including structural reforms --we have now begun formulating a long-term corporate strategy to clearly define the future vision of the Company and share it with our stakeholders.
Our long-term corporate strategy was developed over the course of morethan a year, through extensive discussions across the entire Company.
Throughout the process, I believed it was crucial to listen closely to the voices of our employees, so I made it a point to visit as many domestic and overseas bases of operations as possible. By listening to feedback from the front lines—including harsh criticism—I came to strongly feel the need to clearly define the direction the Company should take.
We gave serious thought to what kind of company we want Sumitomo Rubber to become. By gathering input from executives and employees, and conducting thorough discussions at the Board of Directors, we finalized our long-term corporate strategy. This strategy, built around the key theme of “Strong Commitment and Bold Challenges,” reflects our determination for the future and our commitment to all stakeholders. We will devote ourselves fully to achieving our management goals and realizing our vision for the Company.
In our long-term corporate strategy, we have identified two key strengths: “Rubber and Analytical Technology” and “Brand Creation Capability.” To enhance brand value, and ultimately corporate value, it is essential to offer products and services that incorporate proprietary, value-generating technologies. By leveraging these two strengths, we will continue to bring the highest levels of “joy and well-being” to customers across a wide range of fields, including mobility, sports, healthcare, and daily life. We have defined our vision as “Continuing to Provide ‘New Experimental Value’ Born from Rubber to Everyone.” With this vision as our guide, we will continue to pursue sustainable growth.
The Company has long strived to become a top brand in the tire industry, recognized globally for its quality, reliability, and sales strength. Looking ahead, we aim to further enhance our value by combining our technological capabilities—exemplified by ACTIVE TREAD—with the power of the DUNLOP brand. Through this synergy, we are determined to establish a solid position as a Tier 1 (top-tier) brand in the future.
During discussions with several investors in Europe, I was asked, “We heard that a new product featuring the magical-sounding ACTIVE TREAD technology was launched in Japan. When will it be available in Europe?” This question made me keenly aware of the high level of interest in the region. We are currently planning to launch an all-season tire equipped with an enhanced version of the ACTIVE TREAD technology for the European and North American markets in 2027.
Our proprietary ACTIVE TREAD technology will continue to evolve moving forward. We have established a development roadmap aimed at realizing additional functionalities from 2028 and beyond. We will continue to deliver new experimental value to our customers and drive game-changing transformations in the tire industry. As the automotive world undergoes dramatic transformation, we believe that driving the premiumization of tires will enable us to achieve significant business growth.
In our sports business, we believe that the acquisition of the DUNLOP brand presents a major opportunity to expand the potential of the business. Going forward, we aim to position this segment as a front-runner in enhancing brand value across the entire Company and pursue our goal of making DUNLOP one of the top three brands in the world in both golf and tennis.
Additionally, in line with the recent evolution in golfers’ lifestyles, we plan to expand our business scope and broaden customer engagement by delivering new forms of value.
In the industrial products business, we aim to expand by building around our market-leading products, while also contributing to the resolution of social issues through offerings such as vibration control dampers, with the goal of establishing a more robust business foundation. In addition, medical rubber will also be a core driver of business growth. Currently, we are steadily advancing preparatory construction for a new medical rubber plant.
Our long-term corporate strategy has received generally high praise from investors, with comments such as “It’s commendable that you are simultaneously pursuing both structural reforms and growth strategy.” These responses have further strengthened our resolve to ensure the successful execution of the strategy.
On the other hand, we have also received feedback that our targets are conservative, and we intend to meet expectations by delivering improved performance. In our long-term corporate strategy, we have revised our financial targets for 2027 and established target levels for key indicators toward 2030–2035. The target for the business profit margin has been raised from the previous 7% in 2027 to 10%, and we aim to achieve 15% during the 2030–2035 period. In addition, we are targeting a ROE of 12% and a ROIC of 10%.
To achieve sustainable growth, we will further accelerate the innovation that has long been a key focus for the Company. We will begin by promoting technological innovation, including the advancement of premium, smart, and environmentally friendly tires. To this end, we will not only strengthen our in-house research and development capabilities, but also pursue open innovation by incorporating external expertise. Furthermore, we plan to establish an “Innovation Center” in 2028 dedicated to the development of high-performance rubber.
In addition, what I personally wish to pursue is innovation in marketing. We recognize that the Company faces challenges in translating our accumulated innovative technologies into strong business concepts. To address this, we will establish an “Innovation Lab” in the U.S., the hub of global marketing, to enhance our marketing capabilities for commercializing and monetizing new technologies. This initiative will also contribute to the development of marketing talent.
Furthermore, we are actively pursuing innovation on the production floor. A key initiative in our long-term corporate strategy is a new concept called the “In-House New Factory.” This involves upgrading part of our existing production bases with state-of-the-art equipment to drive the development and production of premium tires. Through this initiative, we will sequentially convert existing lines into premium product lines without halting factory operations. We are also exploring new lines of business based on the technologies we have cultivated through our expertise in rubber.
Potential candidates include a lithium-sulfur battery cathode active substance derived from our research on sulfur used in tire materials, a cancer cell adhesion kit based on our polymer research, and rubber materials for 3D printers. Going forward, we intend to accelerate efforts toward the commercialization of these initiatives.
I recognize that sustainability initiatives are essential for the sustainable operation of our business. Therefore, we placed great importance on this area during the formulation of our long-term corporate strategy, incorporating both related initiatives and their promotion. Based on the material issues revised in October 2024, we have set out specific initiatives and targets for each sustainability issue. Just like our financial targets, we are committed to steadily achieving these targets.
Out of the seven material issues, I would like to introduce four key initiatives.
The first is responding to climate change. Recognizing that the Group’s business activities produce a large volume of greenhouse gas emissions, we are working to reduce emissions across the entire supply chain to realize a decarbonized society.
A recent highlight is our carbon-neutral initiative utilizing hydrogen at the Shirakawa Factory in Fukushima Prefecture. In April 2025, we held a launch event for our hydrogen production system which was attended by members of the press and many other participants. Going forward, we will continue to contribute to the realization of a sustainable society through a dual approach of both producing and using hydrogen.
The second initiative is the respect for human rights. The Group believes that we have a responsibility to respect the human rights of all individuals involved in our business activities. To fulfill this responsibility, we have established a clear policy on human rights and developed the necessary organizational structure. We will continue to uphold our responsibility to respect human rights through our business operations.
The third initiative is the respect for diversity. We are working toward becoming a company where diverse talent can thrive and feel motivated to work. In particular, we are prioritizing the creation of a comfortable working environment to enhance engagement on our production floor.
We are also working to create an environment, both in Japan and overseas, where diverse talent can thrive, and to foster a corporate climate in which everyone can engage in free and open discussion and take on challenges. Furthermore, we are making organizationwide efforts to address gender disparities, as demonstrated by the recent appointment of a female Executive Officer.
The fourth initiative is corporate governance. We are working to ensure diversity within the Board of Directors while fostering an environment where board members can openly and candidly exchange opinions. To realize the ideal state envisioned in our long-term corporate strategy, we will continue to explore and pursue the optimal approach to corporate governance.
Since our founding, we have pursued innovation in manufacturing, achieving numerous “firsts” in Japan and around the world. We have developed pioneering products in sustainability, such as tires made entirely from non-petroleum-based natural resources. In addition, we have created many innovative products and technologies, including our internal noise-absorbing technology, which involves installing sound-absorbing sponges inside tires.
What lies at the foundation is a corporate culture that values a spirit of taking on challenges. Built upon this foundation are cutting-edge technologies such as ACTIVE TREAD and SENSING CORE that lead the times. By further refining these strengths and distinctive features, we will continue to create compelling value.
“There is no need to fear failure that comes with taking on challenges.” This is a message I have been sharing across the entire Company. By trusting and supporting one another, and encouraging each individual’s challenges, we will bring about an exciting future for Sumitomo Rubber. Through this, we aim to enhance our corporate value and meet the expectations of our stakeholders. We sincerely appreciate your continued support of the Company.
