Maruwn Corporation

Interview with the President

Q1

From fiscal 2017, the "business plan system" was renewed.

A1

Yes. While this year marks 126 years since Maruwn was founded, the "benefiting others, benefit oneself" spirit of the Maruwn Group Management Philosophy, based upon our founder's ethos, will neither change nor will we ever change it. However, since the coordinate axes and direction of the business plan could not be clearly stated in the Mid-term Business Plan (concrete execution plan) developed under our Management Philosophy, there was a slightly divergent impression between them. Therefore, we detailed a Maruwn Group Long-term Management Vision that specifies where Maruwn will be 10 years from now. As part of that approach, we have formulated Maruwn Innovation, which consists of action principles and guidelines for realizing our vision. As a result, we believe that the Maruwn Group Management Philosophy and Mid-term Business Plan (Organizational Business Plan and Individual Action Plans) are connected, and that the directions for all employees and concrete daily business plans have converged. It has only been a year since its release, but the response has been excellent.

See "Management Strategy and Business Plan"

Q2

What is the progress of the Second Mid-term Business Plan (FY 2017 - 2019)?

A2

It is progressing well. The first year went substantially according to plan. There was some turbulence in certain segments, but it is safe to say that we began this journey at a comfortable cruising speed. To mention a few notable successes: The Retails Logistics Division posted its first profit in a fiscal year and grew significantly from the previous year; the Overseas Cargo Division showed considerable growth and mid-term targets showed increases in both sales and profit; and three subsidiaries in China also posted a profit. We also successfully launched a subsidiary in Vietnam in August of last year. Although we are not yet consolidated and in the red, we are very excited about what's ahead.

Q3

Did you not experience problems that you did not expect initially?

A3

Yes, we did. Improving labor conditions emerged as a challenge due to a lack in labor force, namely, in terms of drivers. With the rapid growth of E-commerce, inefficient delivery volume grew significantly, leading to issues such as delivery delays due to volume that was beyond our transport capabilities, chronically long working hours for drivers, and problems with unpaid overtime wages. To alleviate these issues, we began negotiations with consignors to revise freight charges to help cover the increasing labor costs. In addition to that, we drafted a report from the Work Style Reform Realization Meeting regarding the Auto Transport Business and are working toward implementing a Revised Comprehensive Distribution Policy Outline. Maruwn does not have a Home Delivery Division, but it is without a doubt that the waiting time between shipping and handling, as well as the burden put on the unloading process, is increasing. Therefore, we believe it is important to continue putting more effort into working with consignors to help them understand the situation. We believe our understanding is progressing step by step, but it will take a little more time.

Q4

From last year, you are sponsoring a team participating in the Dakar Rally.

A4

That is correct. We have been supporting Team Kazama—Coach Shinji Kazama and his third son and rider, Shinnosuke Kazama—who has competed in the Dakar Rally's two-wheeled "Moto" division since 2017. He successfully completed the rally two years in a row, coming in at 67th place last year, and in 44th place this year. According to Coach Kazama, the "Spirit of KAZAMA" — Riding Safely, Health Management, and Teamwork—was critical in being able to complete the Dakar Rally, which is known as the world's most grueling rally race, where riders must endure a 9,000-km race route through three countries (Peru, Bolivia, and Argentina), with temperature differences of 50℃ and approximately 5,000m of elevation change over 14 days (of which 2 days were dedicated to transportation due to inclement weather.) We decided to sponsor them because their philosophy is exactly the same as how Maruwn regularly approaches its business. This year, Team Kazama almost had to withdraw from the race due to an unexpected accident; however, the day following the accident was cancelled due to severe weather, which gave the team time to fix their motorcycle in order to cross the finish line. Coach Kazama believed that luck played a role in their successful endeavor. Given that the wn of Maruwn is written with the Japanese character for 'luck', we have to agree, wholeheartedly.

See "Sponsorship Activities"

Q5

Finally, please give a word to shareholders and investors.

A5

Maruwn is a modest company, we are not in the news and we do not run TV ads. Our rapidly growing stock price is still viewed as affordable, and most of our shareholders are individuals. In order to meet the expectations of these people, we believe that the most important thing is to secure stable profits and maintain stable dividends under sound management. In addition, opportunities for everyone to understand our business are limited to topics on this website and shareholder communications. Our website was renewed last year to allow shareholders and investors to better understand Maruwn’s current and future vision. We appreciate any feedback you may have. Please contact us if you have any comments or requests.

We look forward to your continued support in the future.

October 1, 2017 Yasuji Araki