How Does Duskin Company Work?

This segment, the largest for Duskin Company, centers on cleaning and hygiene solutions. It provides rental services for essential dust control products, including mats and mops, alongside air and water purifiers. The group also offers a suite of professional services such as cleaning, pest control, home cleaning, plant maintenance, and home repair.

To cater to Japan’s aging population, Duskin has expanded its offerings to include health and nursing care product rentals and senior support services. This strategic diversification highlights the company's adaptability and commitment to meeting evolving market demands.

The operational workflow for the Direct Selling Group is built on a sophisticated resource recycling system. This involves manufacturing, sourcing, and logistics to ensure rental items are reused multiple times, necessitating significant investment in factories and nationwide logistics networks.

The Food Group, notably the Mister Donut franchise, operates by supplying raw materials and operational guidance to franchisees, earning royalties from their sales. The 'Others' segment encompasses diverse activities like hospital management, equipment leasing, and insurance services.

A significant milestone was the completion of RFID tag installation on mats and mops, a key component of the Medium-Term Management Policy 2022. This initiative, largely finished in the prior fiscal year, is instrumental in building a robust laundry and distribution system, already contributing to an improved cost-to-sales ratio in FY2024.

The company is proactively tackling challenges like sustaining organic growth in its Direct Selling Group and managing rising raw material costs, particularly for the Food Group, exacerbated by currency fluctuations. Strategic investments totaling ¥70 billion from FY2023 to FY2025 are earmarked for M&A and smart factory upgrades to boost productivity and mitigate labor shortages.

An example of strategic expansion is the January 2024 acquisition of Kenko Saien Co., Ltd., which broadened the company's footprint in the food sector. This move aligns with Duskin's commitment to adapting its business portfolio to evolving market demands and consumer preferences.

Duskin's competitive edge is rooted in its dominant market positions, holding approximately 90% share in residential mop rental and 55% in commercial mop rental. Furthermore, its food service brand commands over 80% market share by store numbers, underscoring significant economies of scale and brand recognition.

Duskin holds dominant market shares in Japan, with approximately 90% in the domestic residential mop rental market and 55% in the commercial sector. Its Mister Donut chain also leads, accounting for over 80% of domestic donut shops by store count. This strong market standing is supported by high brand recognition and an extensive franchise network.

The company faces challenges in its Direct Selling Group, including difficulties in achieving steady organic growth and customer acquisition. Cost inflation, particularly for personnel and manufacturing, alongside fluctuating raw material prices influenced by currency exchange rates, presents ongoing profitability risks. Evolving consumer preferences, such as increased demand for takeout and delivery in the food sector, also require adaptation.

Duskin is focused on enhancing profitability in existing businesses and exploring new ventures through M&A and business development. For FY2025, the company plans to expand its household sales teams and Care Service locations. The Food Group aims for continued product appeal and new shop openings, including international expansion.

The company is prioritizing human capital management and digital transformation to strengthen its operational foundation. Duskin is also committed to sustainability, targeting a 46% reduction in Scope 1 and 2 CO2 emissions and a 50% renewable energy use rate by FY2030. These efforts are integral to its long-term resilience and value creation strategy.