In order to create a society that realizes our long-term vision of a baby-friendly future, we will focus our resources on solving key issues (materiality), and through the efforts of our four global businesses in accordance with our medium-term management plan, we will aim to expand and realize both economic value and social value.To make the world a more baby-friendly place, we, the Pigeon Group, as a leading global company in the niche field of “baby care products,” aim to achieve sustainable growth and increase our corporate value.
① Corporate philosophy (base for value creation)
Pigeon is developing its business activities to realize our purpose “We want to make the world more baby-friendly by furthering our commitment to understanding and addressing babies’ unique needs.” In February 2023, we updated our corporate philosophy so that each and every employee of the Pigeon Group will further embody our purpose through the provision of products and services.
②Sources of Value Creation
We have identified the following five elements as sources of value creation.
・Human capital: The Pigeon DNA and the Pigeon Way practiced by employees
・Financial capital: Consolidated net assets: ¥81.0 billion, Equity ratio: 77.2% (Fiscal 2023)
・Intellectual capital: Know-how and intellectual property derived from more than 60 years of intensive research of nursing and babyʼs sucking behaviors, manufacturing, sales, and service
・Manufacturing capital: Global quality control
・Relationships of trust with consumers, business partners, and medical professionals
③Business Activities and Value Proposition
Based on the source of value creation, we will utilize our strengths to provide babies and their families around the world with unique, high-quality products and services that solve child-rearing problems, including nursing bottles and nipples, for which we have the top global market share. In this way, we will steadily address Key issues (materiality), reduce our environmental impact and resolve the social issues that affect babies and their families
across all the countries and regions where we operate.
Key Issues (Materiality)
In April 2019, we identified the Key Issues (Materiality) that we must address to foster the development of a sustainable society through our business activities and enhance our corporate value. In 2022, we conducted a review of materiality given significant changes in our business and the social environment.
The 8th Medium-Term Business Plan
We are currently implementing our 8th Medium-Term Business Plan, which began in the fiscal year ending December 2023, with the theme of “Toward Sustainable Growth: Restructuring of the business structure in response to global economic, political, and environmental changes.” With the Key issues (Materiality) to be addressed in the medium to long term in order to realize our purpose “We want to make the world more baby- friendly by furthering our commitment to understanding and addressing babies’ unique needs,” in mind, and in order to flexibly respond to the rapidly changing global business environment, we will pursue sustainable operations from the perspectives of the environment, society, and governance through our four business structures in Japan, China, Singapore, and Lansinoh (major markets: the United States and Europe), thereby reducing our environmental impact and resolving the social issues that affect babies and their families across all the countries and regions where we operate. In addition, we aim to grow sustainably as an indispensable part of society by embracing the challenge of new business endeavors.
Pigeon Groupʼs Operating Environment
In Japan and China, which account for a large portion of the Pigeon Groupʼs sales, the decline in birth rates has accelerated, a trend amplifi ed by the COVID-19 pandemic. This decline continues even as the prevalence of the infectious disease has normalized.
Nonetheless, there were still numerous markets the Group had not yet entered, such as the Africa region, where birth rates are on an upward trajectory, offering substantial opportunity for business growth. Moreover, as climate change advances and natural disasters become more frequent and severe, governments around the world are increasingly committing to achieving a carbon-neutral society, demanding that companies take decisive action toward decarbonization. Many countries are also now enforcing stricter regulations on single-use plastics, while there is ongoing discussion about an international treaty for preventing plastic pollution, driving the rapid transition to a circular economy.
In addition to addressing environmental challenges, companies are focused on initiatives related to human capital as a critical step in achieving sustainable growth. From a risk management perspective, there is a growing expectation for companies to undertake activities in respect of human rights not only for their employees but also for everyone throughout the supply chain.
*1 Source: United Nations “World Population Prospects 2022” https://population.un.org/wpp/
*2 Source: UNICEF News, May 15, 2019 https://www.unicef.or.jp/news/2019/0071.html
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Birth rate trends |
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| - Declining birth rate in key markets (Japan, China)*1 - Increasing birth rate in the Africa region*1 |
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Environmental issues |
| - Accelerating global eff orts to achieve a decarbonized society - Escalation and increased frequency of natural disasters - Transition to a circular economy - Marine pollution caused by microplastics - Biodiversity degradation |
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Social issues |
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- One in seven babies worldwide (more than 20 million annually) is born with a low birthweight of less than 2,500 grams*2 |
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Rapidly changing business environment |
| - Intensifying competition due to a growing e-commerce market - Diversifi cation and increasing complexity of supply chain risks |
④Corporate Value Created
As part of the Pigeon Group's goal of sustainable growth and enhancement of corporate value, we have set the following targets in terms of both economic value and social value.
Economic value: Targets for the final year of the 8th Mid-Term Management Plan
Net sales: 113.8 billion yen; Gross profit: 56.5 billion yen; Operating income: 16 billion yen
PVA: 7 billion yen or more, ROE: 14.0% or more, ROIC: 15.0% or more
Social Value:【Environment】 Realization of Pigeon Green Action Plan
【Society】 Contribute to solving social issues surrounding babies and their families
【Human Resources】 Cultivate human resources who can contribute to enhancing corporate value
⑤Business foundation
As a foundation for creating economic and social value, we will promote corporate governance, R&D, manufacturing, quality, and a strong supply chain.
Long-Term Value Co-Creation with Society
Pigeon announced the formulation of its Vision of a Baby-Friendly Future in order to further advance its efforts to realize its Purpose, "We want to make the world more baby-friendly by furthering our commitment to understanding and addressing babies' unique needs," by describing, in terms of six specific faces of society, the "baby-friendly" world envisaged in that Purpose.
Amid the great changes now taking place around babies and their families, the Vision of a Baby-Friendly Future is the result of thinking about how society should be to improve the world babies will face in the future. It was created based not only on proposals from Pigeon employees but also from ideas that arose through various discussions with experts on regions and communities, the environment, and welfare along with everyday mothers and fathers.
In order to realize its Vision of a Baby-Friendly Future, Pigeon will move forward step by step, seeking to increase the number of people in society who empathize with the vision and co-creating and taking action with a diverse range of stakeholders.