Taking Fujitec to the Next Level
AVI is proposing an integrated set of measures to solve Fujitec’s problems. The recommended solutions are not narrowly focused on balance sheet improvements, but also address strategy and governance.
- Fujitec should perform a fundamental strategic review with the help of outside professionals to identify areas for improvement and outline a transformation plan. The review should focus on utilising outsourced manufacturing, growing after-sales services, and include the exploration of merger options with competitors.
- As the first step toward greater capital efficiency, Fujitec should commit to divesting its “strategic holdings” in other listed companies. Along with its new transformation plan, Fujitec should establish a clearly defined and transparent capital policy that sets clear investment hurdle rates for future capital expenditures.
- To improve governance and re-invigorate the company, Fujitec should adopt a three-committee style board structure, establishing a Nominating and Compensation Committee to recruit additional experienced independent directors, including an independent Chairman. Independent directors should be given broad authority to supervise management’s execution of the transformation plan.
We want to support Fujitec in becoming a best-in-class elevator & escalator company focused on Asia, after-sales services, and technology.
CEO & CIO
12th May 2020
Founded in London in 1985, AVI has a long history of investing in Japan. Over the past few years we have observed the heightening interest in Japan driven by corporate governance reforms. What we have seen convinces us that profound change is underway, and we launched a dedicated fund, AVI Japan Opportunities Trust (‘AJOT’), to target the plentiful opportunities the reforms will bring. Across AJOT and AVI Global Opportunities Trust (‘AGT’), AVI has ¥55bn invested in Japan.
We always take a long-term view with our investments, seeking high-quality companies that the market misunderstands and undervalues. We work with company management and boards to improve long-term corporate value.
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