"Overall, the business portfolio and strategy proved robust, ending the operating performance in the year ahead of 2019 results. This was mainly due to both cost-saving measures and lower material prices."
Could you introduce DIC to our international audience, highlighting some key milestones in its evolution?
DIC Corporation was initially established in 1908 as a manufacturer of printing inks, which remains our core focus and dominance. In 1925, we began manufacturing organic pigments, and in 1952, DIC entered the synthetic resins market. In our focus to drive globalization of our main technologies, we made steps to diversify the business. The Group expanded into liquid crystals and packaging films, and in our journey, we also promoted the development of environmentally friendly products.
After various acquisitions and expansions, we’ve become the global leader in printing inks. For our 100th year anniversary, we changed our name to DIC Corporation to better project our identity as a chemical company.
What is DIC’s current geographical footprint?
Today, we are present in 64 countries, operating 56 sites in Asia alone. Globally, we divide the world into Japan, North America and Europe, China, and APAC regions. APAC covers 11 territories: South East Asia, Oceania, and South Asia. This region contributes about 10% to the group’s turnover and operating margins and employs more than 3,600 people.
DIC operates across three key divisions. What can you tell us about these markets since the onset of the pandemic?
Q1 of 2020 was very strong, placing us on a trajectory to break our annual performance records, but Covid-19 changed those projections, impacting the business significantly. The publication business, which had been in the doldrums for a long time, saw a significant drop in volumes. Volumes are starting to pick up again, though we do not expect the numbers to match pre-Covid levels soon. Despite the shortcomings in this business, the packaging sector has been rapidly growing. There was a significant volume boost in Q4 2020 for polymers sold into the auto industry. Overall, the business portfolio and strategy proved robust, ending the operating performance in the year ahead of 2019 results. This was mainly due to both cost-saving measures and lower material prices.
How is the recent acquisition of BASF’s pigments division adding to DIC’s business?
DIC is in the process of acquiring BASF Colors & Effects, however due to Covid-19, the regulatory approval process has been slowed down. Once finalised, we will embark on the post-merger integration process, which is the more challenging part as we embrace different work styles and culture. Integrating the Colors & Effects business into the DIC family, building trust, and embracing common values will be one of the main priorities for DIC this year.
Could you elaborate on the DIC 111 management plan that kicked off in 2019?
The DIC 111 Management Plan contains two key components: Value Transformation and New Pillar Creation. Value Transformation refers to our vision to see DIC Group define competitive advantages in more sectors, specifically, in the packaging business. The pandemic has highlighted the importance of reaching out to a single supplier for a complete total solution, and this is what we want to offer.
DIC is renowned for our printing inks, but we provide the full ambit of solutions from inks, films, coatings, adhesives, and food packaging. We would like to realize a value shift from a publications-central focus to a more diversified solution provider.
The second component, New Pillar Creation, refers to our innovation structure and developing products that deliver both economic value and social value in terms of greater sustainability. For instance, we are launching the DICDRY LX-RP series of adhesives, made from recycled PET bottles, in 2021. These will be used in flexible packaging for personal care products.
DIC has introduced an in-house, DIC Sustainability Index. Why is this important for the company?
Our Sustainability Index is a matrix to identify products that generate both economic and social value. We use the Index as a grading system when developing new products, calculating projections about the overall carbon footprint, or energy and water use, and the impact on society.
We are truly proud to have been selected as a component of the Dow Jones Sustainability Index for the sixth consecutive year in 2020.
What is a key priority for DIC moving forward?
At the Group level, we are very focused on the DX (digitalization) Project. Primarily, we see the DX Project as an investment in people—without people, the organization would be only a name.
We look to drive the educational process, train people, and prepare them for their next role.