SANIX Incorporated is pleased to announce the mid-term business plan, "Spring Plan 2010" for the period from fiscal year 2008 to 2010, approved by the Board of Directors at the board meeting held on April 22, 2008.

1. Background of the formulation of the Mid-term Business Plan

Since its inception, SANIX Group ("the Group") has been consistently pursuing the creation of a comfortable environment both in living space such as general housing and urban space such as office and apartment buildings by proclaiming our corporate mission, "Cleaning up and sanitizing our environment". The Group also entered the industrial waste treatment business in 1994 and has been expanding the businesses of intermediate treatment and recycling of industrial wastes throughout the country.
The Group has been growing by expanding its business domain from houses to urban space, and even to the global environment with the key phrase of: Create a clean and comfortable living environment.
In recent years, however, a significant decline in sales has occurred for the core Home Sanitation (HS) Division due to the eroded trust in the door-to-door sales industry after the revelation of a series of malicious remodeling contractors, as well as due to the impact from the receipt by the HS Division of administrative measures. In the Establishment Sanitation (ES) Division, sluggish sales to individual owners of office and apartment buildings were also due to the impact from the eroded trust in the door-to-door sales industry and the administrative measures in the HS Division. Profitability deteriorated in the Environmental Resources Development (ERD) Division due to the effect of the accidental fires at the Tomakomai Electric Power Plant, and the impact from having to implement restrictions on the acceptance of waste plastic to control inventory at the waste plastic processing plants.
In order to counter the above factors for the sluggish performance, the Group took the following actions. In the HS Division, compliance with regulations was strengthened and a sales strategy which puts top priority on recovering trust from existing customers while voluntarily refraining from marketing to new customers was adopted. The ES Division shifted marketing focus from individual owners of office and apartment buildings to corporate customers such as real estate management companies. The Environmental Resources Development Division has taken various steps to prevent the recurrence of trouble such as accidental fires. The Group has also promoted a business rationalization plan including the consolidation of business locations and the streamlining of personnel after a review of the cost structure of the whole company.
These actions have helped stop further deterioration in its business performance and while it has entered a gradual recovery, the Group could not avoid posting a net loss for the fiscal year ending March 2008 following the downward revision in business forecasts. Following these results, SANIX Group has determined it necessary to reanalyze the factors for the sluggish performance in recent years and formulate a highly feasible mid-term business plan for further recovery and a full-scale shift to a growth company.
With the Mid-Term Business Plan, SANIX Group aims to return to becoming a highly-profitable company by managing the business based on the feasible plan with thorough compliance with regulations.

2. Overview of the "Spring Plan 2010"

(1) Objectives of the "Spring Plan 2010"
SANIX, celebrating its 30th anniversary this year, aims to return to becoming a highly-profitable company and lay the foundation for its further growth by returning to its roots with the corporate mission of “Cleaning up and sanitizing our environment”, as well as by widely expanding eco-business with the cooperation of the three divisions.

(2) Business Plan
For each division, the Group has formulated a highly feasible and profit-oriented business plan. While the HS Division is not expecting an increase in sales, a high operating profit margin of around 24% is expected to be maintained. The ES Division expects to return to profitability by establishing a system focusing on corporate customers to improve the efficiency of the business. The ERD Division expects a dramatic improvement in operating profit margin for the fiscal year ending March 2009 from stable operation of the electric power plant and a change in customers for electricity sales.
As a result, the Group is aiming for a consolidated operating profit margin exceeding 10% in the fiscal year ending March 2011, the final year of the Mid-term Business Plan.


[Consolidated Business Plan]

[Business Plan by Segment]

(3) Strategies for each division
Strategies for each division to achieve the Business Plan are as follows:

1) HS Division
In order to comply with the strengthened regulations for door-to-door sales according to the stricter Specified Commercial Transactions Law, new marketing methods other than door-to-door sales, such as a resumption of advertising centered on TV commercials or tie-ups with other companies, etc., will be developed. Also the division will aim to expand the customer base by increasing the number of sales staff.

2) ES Division
The ES Division aims to recover profitability by promptly establishing a corporate customer marketing system and by focusing on the highly profitable core service of Anti-rust equipment installation and the Pest Control Operation.

3) Environmental Resources Development Division
Through establishing a system of stable operation of the electric power plant and concluding better terms for electricity sales contracts, the ERD Division will return to profitability.
As for measures to ensure the stable operation of the electric power plant, the operating system at the electric power plant will be reviewed by outside consultants, and capital expenditures to prepare the necessary system for ample fuel supplies will be undertaken. In addition, foreign material, which is the cause of trouble at the electric power plants, will be thoroughly eliminated through the introduction of foreign material separator machines at all 15 plastic resource development plants.

For more information, please contact:
Masahiro Shimojo, Director,
Management & Planning Division