Menicon will Expand the Kakamigahara Factory to Increase Production

At Menicon Co., Ltd., construction has been decided to initiate on December 1, 2018, to add the second and third floors to the current single-story Kakamigahara Factory (Kakamigahara-shi, Gifu), where our daily disposable contact lenses are manufactured, to increase our production volume.

In operation since March 2015 to produce “1DAY Menicon PremiO,” Menicon’s daily disposable contact lenses, the Kakamigahara Factory was originally designed to add floors vertically, when required to “increase production volume in the future” and/or “improve efficiency of traffic lines of materials and people in the factory.” The construction for expanding the floors will start in December. We can safely continue production of contact lenses on the first floor during construction because of the double steel beam structure of this building.

This construction is scheduled to be completed in the spring of 2020. A total of 15 lines will be installed, an increase from the current three lines. Our production lines will be sequentially added, targeting an annual production capacity of over 500 million lenses. By increasing the production volume and product portfolio, we aim for greater sales in the daily disposable contact lens market in Japan and the rest of the world, which is expected to grow.
 

Supplementary Documentation

<Expansion of the Factory Floors>
In this construction, the building will be expanded not horizontally but vertically, by adding the second and third floors. The first floor, where we currently operate, was originally designed to accommodate added floors; therefore, the first floor roof will not be removed, and no anchor bolts will be installed on the roof during construction. Thus, we can continue production on the first floor without being affected by waterproofing works, vibration, or noise. By adding the floors, we can construct the warehouse to store intermediate and final products in the second and third floors. By automating the storage and retrieval processes, the traffic lines of materials and people in the factory will be more efficient.

<Funding>
By issuing convertible bonds in June 2018, we raised a fund of JPY 8 billion. A part of this fund will be spent on the construction of the additional floors of the factory, because an increase in the production volume of daily disposable contact lenses, which are expected to grow in the contact lens market in Japan and abroad, is believed to lead to further growth of our group.

<Production and Sales Volume>
Currently, our production capacity is 90 million lenses per year (with three lines). After the introduction of all of the lines (15 lines), we seek to produce over 500 million lenses, corresponding to approximate sales of JPY 25 billion (based on the assumption that we will produce contact lenses similar to our current daily disposable products).