■Oval ＜7727＞'s medium- to long-term growth strategy

(4) New business creation strategy

As an in-house development of in-house technology, we will re-examine technology (design/manufacturing) owned by the company and examine new businesses that can be created. In addition, we will establish an in-house venture system, absorb useful opinions from motivated employees, and train entrepreneurs within the company with an eye on the future.

As a result of these growth strategies for the mid-term fiscal year ending 2025/3, the first is the release of a new product, the “UC-1,” a battery-driven clamp-on ultrasonic flowmeter for liquids. This flow meter was developed based on the concept of “complete no construction,” and since flow rate measurement can be performed simply and easily, it is ideal for expanding the measurement range of utility energy fluids (water, hot water, etc.) in construction and commercial facilities. Contributions to energy saving promotion and decarbonization can be expected by visualizing the flow rate to every corner of the branch pipe, which was conventionally difficult to introduce in terms of cost, construction period, etc. In addition to being compatible with 8 types of piping diameters, there is no need for piping work, tools, or power supply work, and the main feature is that a “flow rate remote measurement system” can be easily realized by remote control of flow rate, and a solution for visualizing various environmental information in its entirety is also provided. Despite the fact that this product has just been released, there have been many inquiries from customers that are different from the past, and future growth and net sales increases can be expected. Furthermore, receiving the 2024 Good Design Award (sponsored by the Japan Design Promotion Association) is likely to contribute to future sales expansion.

Second, there is a decision to establish the high-flow hydrogen gas flow meter calibration facility “OVAL H2 Lab” (tentative name), which we have been focusing on until now. Until now, the company has been proceeding with support for the “OVAL H2 Lab” (tentative name) construction concept, but it is finally scheduled to begin operation during the 2026/3 fiscal year. What affects the accuracy of a flow meter is a process called “calibration.” Calibration is the process of flowing the fluid (gas or liquid) to actually be measured through a flow meter and checking for misalignment or variation in the measured values with the reference instrument. If this calibration is not thorough, there is a risk that accurate measured values will not be obtained. The company is investing resources into the next-generation energy market, playing a part in the supply chain, making it a new business opportunity, and is focusing on improving the quality of flow meters for hydrogen measurement in order to contribute to a sustainable society such as the realization of decarbonization/carbon neutrality. After completion, in addition to calibrating our products, calibrations from other companies will also be carried out, which is expected to contribute to business results for the fiscal year ending 2026/3 onwards.

Third, large orders for “gas medium flow rate calibration equipment repair,” “ultrasonic flow meter,” and “North Plant fluid transport experimental facility repair work” were received from the National Institute of Advanced Industrial Science and Technology through tenders. “Gas medium flow rate calibration equipment” is used for characteristic evaluation of flow meters contributing to industry-academia-government collaboration, research and development related to characteristics of critical nozzles, etc., starting with calibration of gas flow meters at the request of flow meter manufacturers and end users. In this renovation, large-scale equipment in these gas medium flow rate calibration facilities will be updated, and cooperation adjustments and repair work on the system in general will be carried out. Also, the feature of the liquid multi-pass ultrasonic flowmeter “Psonic-L4,” which was ordered as an “ultrasonic flowmeter,” is that the company is the only pure domestic product, and by performing actual flow calibration with high reliability and 4 measurement lines (4 passes), high accuracy of ± 0.15% is achieved for measured values, and traceability, which is essential for trading applications, can be ensured. It also has long-term stability and redundancy by adopting a parallel path (measuring line). Furthermore, the North Plant Fluid Transport Experimental Facility, which is the subject of construction of the “North Plant Fluid Transport Experimental Facility Renovation Work,” is a national standard facility under the water flow rate traceability system and is a calibration facility for water flow meters. The liquid flow standard equipment where the ultrasonic flow meter that was ordered this time is part of this equipment, and the company is responsible for the renovation of fluid transport experimental facilities as part of the advanced and toughening project of the National Institute of Industrial Science and Technology's measurement standard development/supply base, and repairs machines such as piping and valves, and construction parts such as painting. The company collectively handles various test equipment and production/shipping equipment, etc. related to fluid measurement and control, including design and construction, and the company believes that it has been adopted as a national standard based on experience so far, leading to this order. Maintenance orders from the National Institute of Advanced Industrial Science and Technology have been concentrated in the past 1 to 2 years, and they are recorded as earnings according to the progress rate according to construction progress standards.

Additionally, during the mid-term of the fiscal year ending 2025/3, we also planned to build a factory for an overseas subsidiary as capital investment to aim to become Asia's No. 1 sensing solution company. The Chinese subsidiary (Hefei Oval Co., Ltd.) has begun construction of a third plant (scheduled to be completed around the end of 2025), and the Korean subsidiary (Oval Engineering) has also constructed and relocated a new plant and calibration equipment.

Meanwhile, the specific action plans for the management foundation strengthening strategy are as follows.

(1) Manufacturing BCL Strategy

As a thorough BCL (best cost location), we will implement designs that take raw materials and production processes into account, and review production methods and supply chains to achieve both cost (material costs/manufacturing expenses) reduction and stability of quality and delivery times. Also, by utilizing product portfolios, profitability, growth potential, etc. of each product in a changing market environment are analyzed, and products that should be emphasized and products that should be withdrawn are clarified.

(2) Strategies to strengthen human resources and finance

As a personnel strategy, we will thoroughly arrange an appropriate number of personnel in the right place, improve productivity, and aim to develop human resources who will lead the next generation with an eye on the future and build a human resource development system integrated into the group. Also, as a financial strategy, management resources are concentrated into new businesses and businesses that generate profits.

(3) DX promotion strategy

To promote DX, a dedicated department will be newly established, and digital tools will be utilized company-wide to accelerate corporate growth. Also, as an effective use of information assets, we aim to utilize accumulated delivery records, repair results, and customer information for digital marketing. Furthermore, as a means of fostering a DX mindset, all employees utilize digital and develop a mindset for taking on new challenges.

(4) Sustainability promotion strategy

As an effort to address environmental issues through business activities, we will provide environmentally friendly products and services, starting with fossil fuel alternative energy-related products, and promote reduction and reuse of waste emissions from business activities. Also, in terms of respect for human rights, we respect the human rights of all stakeholders regardless of individual attributes such as gender, age, nationality, social status, or presence or absence of a disability. Furthermore, in order to comply with laws and regulations, we will practice honest corporate activities, such as fair competition and timely and appropriate disclosure of information, and strengthen the governance system.

As a result of these management infrastructure strengthening strategies for the interim period ending 2025/3, it is particularly mentioned that “excellent health enterprises (gold certification)” were obtained from the Health Enterprise Declaration Tokyo Promotion Council in the field of sustainability. The company believes that health management is essential for corporate growth because employees can feel job satisfaction by keeping both the mind and body of employees healthy, and sees employee health management as a management issue. As an approach to this issue, under the guideline of “creating a comfortable work environment that takes health and safety into consideration,” we aim for 100% of regular health checkups, introduce and implement training aimed at becoming aware of mental and physical health, perform exercises every morning as a daily accumulation, and hold walking events to resolve lack of exercise, etc., and are also working on thorough prevention of overwork and work style reforms. We believe that the increase in evaluation from conventional “silver certification” is that the accumulation of these various efforts was evaluated.

(Written by FISCO Visiting Analyst Shigeki Kuni)