President’s Message

Evolving Daily as an Innovative Wholesaler

The MEDIPAL Group has a clear corporate vision (ideal situation) of what it wants to achieve.
Our vision is to “be a health support orchestra that expands, supports, and connects ‘Pharmaceuticals, Health, and Beauty.’“ Everyone earnestly wishes to lead a healthy life. We constantly ask ourselves what we can do to extend healthy life expectancy. By pursuing various possibilities in total harmony and making the most of the individuality of each MEDIPAL Group employee, we intend to create greater value for society and our customers in the business fields of “Pharmaceuticals, Health, and Beauty.”
The MEDIPAL Group operates in three business segments: the Prescription Pharmaceutical Wholesale Business; the Cosmetics, Daily Necessities and OTC Pharmaceutical Wholesale Business; and the Animal Health Products and Food Processing Raw Materials Wholesale Business. Each segment handles merchandise that is indispensable for supporting people’s lives and healthy lifestyles. In that sense, we take pride in playing a role in the social infrastructure that is as essential as electricity, gas and water — and, like those utilities, one that must never be interrupted.
From our founding in 1898 to the present, we have undertaken a variety of mergers, acquisitions, and business reforms. All were pioneering, breakthrough moves at the time. They enabled us to build a strong foundation and a network for efficient nationwide distribution that is resilient to emergencies and responsive to change, as well as to develop a highly experienced workforce.
Our forward-looking corporate approach is also linked to the evolution of our business. In the medical industry, for example, an increasing number of biopharmaceuticals, orphan drugs, and other pharmaceuticals are extremely difficult to manage and deliver. At the same time, the total market share by volume of high-quality, low-price generic drugs for chronic diseases is now in excess of 80%. MEDIPAL’s distinctive and substantial strengths are its ability to deliver products with completely different properties reliably, efficiently, and at the right time while ensuring their quality, and to significantly reduce delivery times through speedy inspections. We are leveraging these strengths to diversify our earnings by creating various new businesses.

Progress of Initiatives under the Slogan “Change the Oroshi”

Japan’s declining birthrate and aging population have progressed further than other countries, and the country is facing a growing number of issues that need to be addressed, including a shrinking workforce and rising social security costs. On the assumption that this severe situation will continue, the entire MEDIPAL Group has been working together since 2014 to rapidly transform its business model under the slogan “Change the Oroshi.”
Guided by this vision over the past eight years, we have enhanced the quality of both our sales and distribution functions, worked to generate synergies among Group companies, and grown our new businesses from the launch stage to a stage where they are poised for expansion. Particularly in the past three years, we have fully utilized the Group’s strengths. Initiatives have included focusing on partnerships with like-minded companies in different industries, venture companies, businesses in the digital field and others to invest in the launch of groundbreaking medical technologies, and combining our strengths to reduce the environmental impact of shipping.
There was also an unforeseen event — the global COVID-19 pandemic. As it brought a halt to the economy as well as to people’s movements, we were unable to reach the financial performance targets that we initially set in our vision. Nevertheless, it was an opportunity to gain confidence as employees of the MEDIPAL Group, undaunted by the uncertain outlook, thoroughly minimized infection risks and used their expertise and ingenuity to continue supplying essential medicines and products. We have always had a strong sense of mission and maintained a solid corporate culture in times of emergency. We also take pride in our efforts to ensure business continuity; in this case in dealing with an unfamiliar infectious disease. I think we should receive greater recognition from society for our contributions. In addition, the ultra-low temperature transportation technologies and distribution know-how that we have built up in-house were very useful as we worked to help protect the public through the management and delivery of vaccines. The measures we implemented during the period of “Change the Oroshi” have proven to be effective in an unprecedented situation and were useful to society. This is validation that the progress, as well as the investments we have made so far are on target, and gives us greater confidence to proceed.

A Crucial Five Years toward Our Ideal Situation

We are now conducting initiatives in line with the 2027 MEDIPAL Medium-Term Vision, which takes as its basic policy “Change the Oroshi Forever: Constant Innovation.” The ideal situation it envisions for the MEDIPAL Group is to “be a health support orchestra that expands, supports, and connects ‘Pharmaceuticals, Health, and Beauty.‘” Our medium-term vision will serve as the roadmap for achieving this goal.
None of the growth strategies we will pursue over the next five years are mere continuations of past strategies. Consequently, there are aspects with which MEDIPAL is unfamiliar, or has little experience. For example, expansion of the overseas business, the prevention and pre-disease business, and the AGRO & FOOD business will all be major challenges, but we look forward to creating something new. Because these are challenges that will lead to happiness for people, we will have a sense of purpose as we open up the path to our future.
Going forward, wholesaling that consists of simply stocking and selling merchandise will not be a feasible business. That much is clear. There can be no fruit without putting in the effort to till uncultivated soil, sow seeds, and carefully nurture them. There is a Japanese proverb, “Planted peaches and chestnut seeds take three years to bear fruit, persimmons take eight.” It often takes time to produce the desired results. However, based on the time and effort you put in, you can obtain stable, ongoing results — in this case, earnings. I would like MEDIPAL to be a company that diligently accumulates such results. Fortunately, the business fields of “Pharmaceuticals, Health, and Beauty” encompass some of people’s dearest wishes. There are many “seeds,” in the form of investment projects, that we would like to cultivate. We also have highly capable human resources we can cultivate. In addition to these elements, we have strong partners for each type of project. If we can generate synergies, I believe that achieving our vision is not beyond our reach. We will supplement the elements we lack. To do so, we are investing ¥100 billion in the growth and reskilling of our human resources.
I would like to proactively tackle this challenge, taking the view that the foundation and businesses that we will build up in the next five years will lead to MEDIPAL’s growth over the five to ten years after that.

Human Resource and Financial Strategies as the Basis of Our Future Growth

Promoting Sustainability Management

To both help realize a sustainable society and improve our corporate value, we have formulated a new sustainability policy, “Connecting to the Future with ‘Energy and Brightness’”. Based on this policy, we conducted a materiality assessment and identified six material tasks. The Group’s CSR Committee played a central role and discussions lasted over six months. The process included selecting social issues, identifying issues for MEDIPAL, and discussing the Group’s ideal situation, then deciding on the material sustainability tasks (Materiality) in consultation with the Board of Directors. It is now our responsibility to work toward resolving the tasks we identified.
Viewed from the perspective of ESG, for the environment, we aim to reduce greenhouse gas emissions by 50% by the fiscal year ending March 31, 2031 (Scope 1 and Scope 2; compared with the fiscal year ended March 31, 2021), and to become carbon neutral by the fiscal year ending March 31, 2051.
For community, we will promote diversity and inclusion, and increase the proportion of women in managerial positions to 20% or higher by the fiscal year ending March 31, 2031.
Regarding “corporate governance”, we will continue to focus on strengthening Group compliance and building a governance system for sound and transparent corporate management. In addition to further enhancing education throughout the Group, the Board of Directors will work to further strengthen corporate governance by establishing a framework for monitoring the status of compliance.

Proactively Promoting Business Transformation

In this era of rapid change, accurately realizing our ideal situation will require an unwavering vision and a proactive stance. Rather than blaming the operating environment or aligning our actions with those of others, I intend to consider what we would like MEDIPAL to be and steadily move forward with what must be done.
MEDIPAL exists to contribute to people’s health and the advancement of society. With a spirit of creating value for that purpose, we will continue to grow through constant innovation.

Shuichi Watanabe

Representative Director, President and CEO
MEDIPAL HOLDINGS CORPORATION