A: The demand in the first half will remain lower than the previous year and is expected to recover around the fall when a new administration will commence, resulting in a 4% increase annually. We are focusing on receiving more orders for mining machinery in China, and the sales of mining machinery in this region in fiscal 2012 are forecasted to triple over the previous year.
A: We are reviewing the functions of each part from the design phase using the VEC(Value Engineering for Customers) method. In this way, we are striving to reduce overall costs by identifying original functions, reviewing materials and improving manufacturing methods, while maintaining good quality and performance. This method has been applied not only at factories in Japan but in China and other areas, too, showing good results.
A: It has been reported that the forecast of demand for iron ore in China is weak, but active investments have been made in the entire mining business including energy-related mining. We have already received sufficient orders for FY2012 production and have already started working on receiving orders for FY2013 production. To accommodate healthy orders, we are starting to expand the system to increase production in and outside of Japan.
A: Free cash flow was negative in FY2011 due to aggressive investments in production increase, etc. In FY2012, we aim to make it positive by year-end by collecting accounts receivable, reducing inventories, and shortening lead time.
A: We consider construction machinery as a growth business in the medium to long term because the demand for construction machinery remains strong in emerging countries in areas such as Asia and Africa. Under such circumstances, we are planning some differentiation strategies although we have severe pressure from competition with Korean and Chinese manufacturers, etc.