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Glimpse of Osaka Gas Group. Our Energy Business Value Chain. Liquefaction Plant. Distribution network. Customers. LNG carrier. Power plant. LNG terminal. Gas field. School. Gas. Home. Store. Factory. Hospital. Office. Large factory. Electricity. Upstream Investment/
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Our Energy Business Value Chain Liquefaction Plant Distributionnetwork Customers LNG carrier Power plant LNG terminal Gas field School Gas Home Store Factory Hospital Office Large factory Electricity Upstream Investment/ LNG Procurement LNG Transport Local Distribution Energy Marketing Power Business Regasification Import 3 7 .3 Develop and Operate Operate and maintain 8 7 .8 M customers terminals 33 Mt from 61,000 carriers 45 Over sites, 2.9GW 1.6GW Cogeneration 8 in fleet years km countries pipelines including 6wind farms of operation (29tanks) including Residential use
Entering Downstream in Southeast Asia Supply natural gas and help customers reduce energy costs in Singapore, Thailand and… Energy saving technologies Headquarters Osaka THAILAND SINGAPORE INDONESIA
Set up 5 companies since 2013 100% OSAKA GAS SINGAPORE ※1 Subsidiaries of Japanese MEGA bank 49% 49% 30% 51% 51% 100% 70% NS-OG Energy Solutions (Thailand) OSAKA GAS THAILAND ※2 60% 40% ※1…PTT Public Company Limited ※2…PTT Retail Business Co.,Ltd. OSAKA GAS SINGAPORE Indonesia Office OGP Energy Solutions
Energy Business Value Chain in SE Asia Liquefaction Plant Distributionnetwork Customers LNG carrier Power plant LNG terminal Gas field School Gas Home Store Factory Hospital Connect downstream with mid/upstream Meet energy needs of individual market in the region Office Large factory Electricity Upstream Investment/ LNG Procurement LNG Transport Local Distribution Energy Marketing Power Business Regasification Import 3 7 .3 Develop and Operate Operate and maintain 7 .8 Own M customers terminals 8 33 Mt from 61,000 45 Over sites, 2.9GW 1.6GW Cogeneration 8 carriers years km countries pipelines including 6wind farms of operation (28tanks) including Residential use
Evolved into diversified energy business Local Gas Distributor (regulated) - supply manufactured gas - through pipeline - mainly to local household consumers Diversified Businesses Group (deregulated) - produce, trade and supply various energies and provide life & business solutions - via various means - to industrial, commercial and household customers, inland and abroad Upstream Assets
Gas business must have been flexible Energy business has been always in transition We are equipped with the ability, including human resources management, to adapt to the changing environment
Gas business must have been flexible Energy business has been always in transition We are equipped with the ability, including human resources management, to adapt to the changing environment For the first time, we are faced with - shrinking population/workforce/energy demand - opening up of the entire energy market - shifting business field abroad Difficult to overcome with our traditional DNA We are reviewing whole strategy including HR management
Market in transition Energy market in Japan has been growing with competition - firewood/charcoal - kerosene/fuel oil - electricity - LPG to meet ‘heat’ demand
Market in transition Energy market in Japan has been growing with competition - firewood/charcoal - kerosene/fuel oil - electricity - LPG to meet ‘heat’ demand Marketing capability to win the competition and create new demand has been key factor to survive
Market in transition Energy market in Japan has been growing with competition - firewood/charcoal - kerosene/fuel oil - electricity - LPG to meet ‘heat’ demand Marketing capability to win the competition and create new demand has been key factor to survive Lighting
Market in transition Energy market in Japan has been growing with competition - firewood/charcoal - kerosene/fuel oil - electricity - LPG to meet ‘heat’ demand Marketing capability to win the competition and create new demand has been key factor to survive LightingCooking Heating Water heating
Market in transition Energy market in Japan has been growing with competition - firewood/charcoal - kerosene/fuel oil - electricity - LPG to meet ‘heat’ demand Marketing capability to win the competition and create new demand has been key factor to survive Lighting Cooking Heating Water heating Gas appliances marketing/retailing Product Price Promotion Place
Market in transition Energy market in Japan has been growing with competition - firewood/charcoal - kerosene/fuel oil - electricity - LPG to meet ‘heat’ demand Marketing capability to win the competition and create new demand has been key factor to survive Cooking Heating Water heating Commercial & industrial use Air-conditioning Cogeneration B to C B to B
Market in transition Energy market in Japan has been growing with competition - firewood/charcoal - kerosene/fuel oil - electricity - LPG to meet ‘heat’ demand Marketing capability to win the competition and create new demand has been key factor to survive Cooking Heating Water heating Commercial & industrial use Air-conditioning Cogeneration Energy savingconsulting/engineering Packaging Engineering
Market in transition Energy market in Japan has been growing with competition - firewood/charcoal - kerosene/fuel oil - electricity - LPG to meet ‘heat’ demand Marketing capability to win the competition and create new demand has been key factor to survive Mindset of ‘Customer First’ and skills for selling goods have been fostered among employees …on top of the public service responsibility
New horizon Feedstock changed 1972First LNG arrived from Brunei 1975Conversion project started (-1990) - 23M appliances at 4.4M customers’ sites were adjusted or replaced - 2,500 employees engaged Enhanced supply capacity gained by conversion enabled us to supply large industrial users
New horizon Feedstock changed 1972First LNG arrived from Brunei 1975Conversion project started (-1990) - 23M appliances at 4.4M customers’ sites were adjusted or replaced - 2,500 employees engaged Enhanced capacity enabled us to supply Large industrial users 1978New Business Development Office set up - industrial gas/engineering - frozen food/restaurant chain - real estate/housing/home centre - security service/eldercare/sports centredeveloped
New horizon Feedstock changed 1972First LNG arrived from Brunei 1975Conversion project started (-1990) - 23M appliances at 4.4M customers’ sites were adjusted or replaced - 2,500 employees engaged Enhanced capacity enabled us to supply Large industrial users 1978New Business Development Office set up - industrial gas/engineering - frozen food/restaurant chain - real estate/housing/home centre - security service/eldercare/sports centredeveloped Cold energy of LNG, employees retired from gas works and conversion project were utilized as resources
HR management in the transition Shift of personnel In-company recruiting - ‘Challenge’ scheme (1985-) --propose new business plan --shifted to execute the plan - ‘Open Invitation’ scheme (1988-) --shift to specified job Recruiting - professional skills sought in finance, legal, etc - new academic background sought in various technicaljobs, R&D, engineering, etc - Sales-engineer - Bill collector - Safety inspector - New business staff - Gas works operator - Conversion technician
Long-term management principles -1970’s - Secure safety - Prevent public nuisance - Service First 1975- - Strengthening R&Dcapacity - Enhancing employees’ health 1981- - Research & Development - Human Resources Development - Globalization - Computerization (1983-) Public utility Competitive business
Our Commitments Osaka Gas Group is committed to creating value primarily for customers, as well as for society, shareholders, and employees Value for Customers Osaka Gas Group is committed to providing services to meet customers’ expectations for improved comfort, convenience, economy and reliability in diverse field Value for Society Osaka Gas Group is committed to supporting sustainable development of society and environ- mental protection through business activities, mindful of compliance and transparency
Our Commitments (continued) Value for Shareholders Osaka Gas Group is committed to meeting shareholders’ expectations for stable, long-term growth and maximized corporate value, while maintaining its sound financial foundation Value for Employees Osaka Gas Group is committed to respecting individuality of employees and providing opportunities for them to pursue their careers and achieve self-development
Transformation undergoing • Business Strategy • 1. Differentiate ourselves by improved services • to pursue total efficiency of providing gas, • electricity and life & business solutions • 2. Sail into ‘Blue Ocean’ beyond borders of • area and business domain • Overseas businesses Upstream Assets - Infrastructure - trading - Energy services - Asia - North America - Oceania X
Transformation undergoing Human Resources Strategy Principle Enhance workforce resilience to win competition Training Further brush up communication skills - core competency of our strategic advantage in winning the competition - developed through long and close interactions with customers (trained on the job) Upstream Assets
Transformation undergoing Human Resources Strategy (continued) Recruiting More ‘hunters’ like, ‘trading house’ directed & ‘Logical thinking ability’ as first requirement - for maiden voyage to Blue Ocean - from diversified sources --foreign nationalities (in Japan) --local executives/managers (overseas) --experienced professionals (up/mid-stream businesses) Upstream Assets
Transformation undergoing Human Resources Strategy (continued) Challenges Publicity to attract talented personnel - locally well-known, globally unknown - known only as ‘ye olde gas distributor’ - competing with global giants Localisation of overseas workforce - Replace expatriates by locals - Skills transfer to locals Diversification and globalization of employment - new talent for new business with new terms - Japanese dominated HQ to be changed Upstream Assets
Legacy still remains Traditional Japanese Employment System may still have its role to
Legacy still remains Traditional Japanese Employment System may still have its role to nurture loyal, motivated and resilient workforce Recruit of new graduates (in bulk) - not job choice, but company choice - not skill, but potential appreciated Long-term contract (with ToP clause) - trained and obtain skills at work site - growing-up through shift among different job Seniority-based wage (in part) - rewarded more by career development and post rather than salary itself
Legacy still remains (2) Other fringe benefits may also retain its value Employee share ownership scheme - asset formation for the employees - long & secure shareholders for the company Health development centre - annual health check with counseling/advice - reducing smoking, metabolic syndrome… Retirees’ association - 5,418 members with average age 73 - many shareholders and customers of various Osaka Gas Group businesses - acting as PR agents for Osaka Gas