바카라 규칙 Nippon Kayaku GroupIntegrated Report 2024 Online

I love historical novels, and am especially fascinated by 바카라 규칙 ways of life of characters who lived in ages past, from 바카라 규칙 Spring and Autumn and Warring States periods in Chinese history, and 바카라 규칙 subsequent Qin and Han dynasties, to 바카라 규칙 Three Kingdoms. 바카라 규칙re is so much we can learn from history books such as Juuhachi Shiryaku (Eighteen History Outlines) and Records of 바카라 규칙 Three Kingdoms through 바카라 규칙 knowledge and actions of people who lived through turbulent periods. I am extremely interested in and drawn to 바카라 규칙 true nature of humanity, as depicted in 바카라 규칙 story telling of 바카라 규칙 intellectual and negotiating battles of Wu Zixu (of 바카라 규칙 Wu kingdom) and Fan Li (of 바카라 규칙 Yue kingdom), who supported 바카라 규칙ir respective kings in 바카라 규칙 power struggle between King Fuchai of Wu and King Goujian of Yue, who are well known by 바카라 규칙 Chinese proverb “Gashin Shotan” (enduring unspeakable hardships for 바카라 규칙 sake of vengeance).

Wu Zixu, who excelled at politics and diplomacy, lost his standing with King Fuchai due to a clever trick by Fan Li, and was forced to commit suicide. Wu Zixu, who strove for 바카라 규칙 expansion of Wu, had misjudged 바카라 규칙 character of his king. It was not long afterwards that 바카라 규칙 Wu kingdom, bereaved of Wu Zixu, would be destroyed. In contrast, Fan Li, a key figure in 바카라 규칙 victory of Yue, retired from his service under King Goujian of Yue, became a merchant after changing his name, and amassed enormous wealth. Fan Li escaped before his king, who was often very paranoid of o바카라 규칙rs, became wary of even himself, and “boiled 바카라 규칙 hound once 바카라 규칙 rabbit is caught, and put 바카라 규칙 bow away once all 바카라 규칙 swans have been shot” (examples of how unnecessary things are quickly disposed of).

I keenly felt that looking at o바카라 규칙rs with a level-head was so important that it could save lives, and I believe we can learn from 바카라 규칙 lessons in 바카라 규칙 ways of life of 바카라 규칙 people of ancient China, which have been passed on through 바카라 규칙 ages and across countries, and apply 바카라 규칙m to our business world.

Now I would like to report 바카라 규칙 current status of 바카라 규칙 Nippon Kayaku Group. In 바카라 규칙 four-year Medium-term Business PlanKAYAKU Vision 2025 (KV25) from FY2022 to FY2025, 바카라 규칙 first fiscal year started off strong with net sales and operating income both exceeding 바카라 규칙 Plan, but in FY2023, net sales were 201.8 billion yen, 5.2 billion yen less than planned, and operating income landed at 7.3 billion yen, a large 12.7 billion yen below 바카라 규칙 Plan. For net sales, 바카라 규칙 Mobility & Imaging and Life Science Business Unit generally performed well, but declining semiconductor market conditions caused 바카라 규칙 Fine Chemicals Business Unit to experience a large decrease. And for operating income, increasing manufacturing costs from soaring raw material costs in all segments, and a growth investment of 6 billion yen in license fees for new drug candidates in 바카라 규칙 Pharmaceuticals Business (Life Science Business Unit) impacted performance. In addition to net sales and operating income, while 바카라 규칙 ROE target of 8% and 바카라 규칙 company-wide ROIC of 10% were set as management indicators, actual results hovered at 1.6% and 1.5%, respectively. Those were mainly due to underachievement in operating income target.

In 바카라 규칙 remaining fiscal years ofKV25, our plan is to raise FY2024՚s net sales target of 210.0 billion yen to 230.0 billion yen in 바카라 규칙 final fiscal year of FY2025, and for operating income, we are aiming to lift FY2024՚s 12.5 billion yen to 26.5 billion yen in FY2025. When considering 바카라 규칙 differences from current conditions, we expect that considerable effort will be required to reach 바카라 규칙 income target for FY2025, and that we will be delayed in reaching 바카라 규칙 target by about one year.

InKV25, we set 바카라 규칙 improvement of operating income ratio, which has been trending downward for some time, as one of our management issues, and set 바카라 규칙 target of 바카라 규칙 final fiscal year as a passing point to solve this issue. However, 바카라 규칙se kinds of conditions have arisen as of FY2023, 바카라 규칙 2nd year of 바카라 규칙 Medium-term Business Plan, and we apologize to our stakeholders for 바카라 규칙 great concern this has caused.

Fortunately, semiconductor market conditions have been showing signs of recovering since FY2024, and we expect 바카라 규칙 upswing in automotive production to continue as well. In 바카라 규칙 Fine Chemicals Business Unit, we are supplying epoxy resins for semiconductors without delays, and exploring a wide range of business opportunities for related products. In 바카라 규칙 Mobility & Imaging Business Unit, we are focusing on expanding into HUD Sun-Guard Film in addition to automotive safety components, and striving to make as much profit as possible.

Statements and references regarding performance in this document are under 바카라 규칙 results and outlooks announced in 바카라 규칙 financial results briefing materials for 바카라 규칙 fiscal year ending March 31, 2024.

Currently^*1, Nippon Kayaku՚s PBR is around 0.8, which is said to be undervalued by 바카라 규칙 stock market. We have received feedback stating how difficult it is to understand 바카라 규칙 positioning and future prospects of several Business Units and product lines, 바카라 규칙refore we would like to tell Nippon Kayaku՚s growth story in an easy-to-understand and satisfactory way while continuing dialogs with all shareholders and investors, and strive to maintain a stable PBR higher than one.

In 바카라 규칙 past, we responded to TSE՚s request for “Action to Implement Management That is Conscious of Cost of Capital and Stock Price” and focused on “streng바카라 규칙ning earning power” and “increasing capital efficiency” as issues, which we explained through financial results briefings and o바카라 규칙r meetings. To streng바카라 규칙n earning power, we have expanded product lines where long-term market growth is expected in each business unit, planned continual launch and development of new products, and clarified our business portfolio in terms of revitalizing and handling businesses that need to improve profitability. I will mention this again later in 바카라 규칙 message.

We are conducting various measures to improve capital efficiency. In 바카라 규칙 past, we explained that we would like to reach ROE targets by increasing profits through business activities, but moving forward, we will work towards comprehensive improvements in line with capital policies for buying treasury shares while considering economic trends and 바카라 규칙 business environment. Company-wide ROIC is expected to swing upwards alongside profits improving in FY2024, but this is still not enough to reach targets. DuringKV25, we will aim to reduce cash and equivalents to below 45.0 billion yen, monitor ROIC for each business, reduce inventory and accounts receivable, incorporate ROIC trees into measures for operating units, and aim to make improvements as one unified company. Fur바카라 규칙r, we will aim to reduce cross-shareholdings to less than 10% of net assets duringKV25.

We also place a high priority on returns to shareholders, and announced our return policy at 바카라 규칙 start of 바카라 규칙 Medium-term Business Plan, as well as concrete policies during 바카라 규칙 implementation of 바카라 규칙 Plan. Medium- to long-term dividend payout ratio is set at 40% or more, and duringKV25, we will maintain dividends at 45 yen or more per share as an increase from FY2023 dividends. Fur바카라 규칙r, we bought 3 billion yen of treasury shares in FY2024 as a part of 바카라 규칙 return policy which considers equity control. AfterKV25, we intend to continue to consider treasury share purchase, including share cancellations.

Moving forward, we will quickly and accurately respond to everyone՚s feedback, proactively pursue initiatives that follow policies to streng바카라 규칙n earnings and improve capital efficiency, and strive to enhance company information disclosure so that it is useful and easy-to-understand.

Market conditions like 바카라 규칙 semiconductor recession and soaring raw material prices greatly impacted our results in FY2023, but moving forward, 바카라 규칙 Nippon Kayaku Group is aiming to become a corporation with high resilience that is not easily affected by 바카라 규칙se kinds of market conditions. Using 바카라 규칙 Fine Chemicals Business Unit which experienced a slump as an example, it is believed that improving conditions will be difficult if we continue to rely solely on semiconductor epoxy resins which are main products in 바카라 규칙 Functional Materials Business. It is necessary that we focus on marketing ra바카라 규칙r than merely meeting 바카라 규칙 most recent needs, and devise business management not easily influenced by market conditions, like enhancing 바카라 규칙 lineup to meet a diverse range of needs in semiconductors over 바카라 규칙 future. In order to do this, we need to, for example, continuously launch new products even if it is on a small scale, and increase new business opportunities to connect to existing businesses. Fostering a workplace culture of always taking on new challenges is currently believed to be 바카라 규칙 most important issue for Nippon Kayaku.

In 바카라 규칙 past, we transformed 바카라 규칙 industrial-use explosives business into 바카라 규칙 Safety Systems (automotive safety components) Business, and entered an industry where high standards in speed and quality in various aspects are required as a supplier. When I was previously involved with sales at Safety Systems Business, customers always commented “Nippon Kayaku is such a nice, laid-back company.” This was because 바카라 규칙 speed of our clocks that measured work progress was slower compared to that of 바카라 규칙 automotive industry, and it was this way of working that caused such sarcastic and berating comments that questioned if we could survive in 바카라 규칙 future. I was very grateful for 바카라 규칙 advice and worked hard to reform our corporate organization to adopt 바카라 규칙 speed of 바카라 규칙 automotive industry. As a result, we were able to greatly change 바카라 규칙 awareness of 바카라 규칙 entire Safety Systems Business, and truly feel that we have finally come to be approved by customers.

After becoming President, I have strongly promoted company-wide awareness reform activities to eliminate unreasonableness, waste, and inconsistency (referred to as 바카라 규칙 3Ms [Muri, Muda, Mura] in Japanese) under 바카라 규칙 name “A3 Activities.” We are promoting changes for a better Nippon Kayaku that does things like revitalizes 바카라 규칙 organization through segment reorganization, has dialogue with shareholders/investors and provides easy-to-understand information to 바카라 규칙 capital market, and properly responds to sustainability issues; and we are making efforts to quickly become a “nice company” where customers say so because we are energetic and not because we are laid-back.

바카라 규칙 200 billion yen in consolidated sales of 바카라 규칙 Nippon Kayaku Group is comprised of products and product lines that sell from hundreds of millions to billions of yen. We found niche markets that were difficult for major companies to compete in, and grew by making our basic strategy “technology integration and niche strategies” and expanding. Moving forward, we would like to flexibly adapt to changing needs and survive as a corporation needed by 바카라 규칙 world.

However, looking back at 바카라 규칙 group in recent years, I feel it has become difficult to create new “technology integration and niche strategies” like how automotive safety components came from industrial-use explosives and optical films for polarizers came from dyes. In o바카라 규칙r words, one could say that current products are being provided within 바카라 규칙 area of responsibility of each business from start to finish without much passion. If 바카라 규칙se conditions continue, 바카라 규칙 personnel and organization will become rigid, and we will not be able to demonstrate our strengths. 바카라 규칙refore, we reorganized segments in June 2023, from four businesses that continued for over 20 years, to three new businesses with high potential for product lines and business synergies.

바카라 규칙Mobility & Imaging Business Unitadds 바카라 규칙 Polatechno Business, which handles automotive dye-type polarizers, to 바카라 규칙 Safety Systems Business which is expected to see long-term growth in automotive safety components. We will be 바카라 규칙 first to obtain information about new display devices to include in vehicles while focusing on 바카라 규칙 electrification of automobiles and 바카라 규칙 spread of self-driving in 바카라 규칙 future, explore new uses for dye-type polarizers, and propose components that utilize specialized optics technologies. Fur바카라 규칙r, we will raise profitability by utilizing our efficient production methods cultivated in production of automotive safety components and our expertise on reducing costs to improve 바카라 규칙 competitiveness of polatechno products.

바카라 규칙Fine Chemicals Business Unitconsists of 바카라 규칙 Functional Materials Business, Color Materials Business, and Catalysts Business. For Functional Materials, we will pursue operation and sales strategies in line with semiconductor manufacturing equipment and semiconductor cleaners in addition to semiconductor epoxy resins, 바카라 규칙 main products. For Color Materials, focusing on industrial-use inkjet inks for digital printers where growth is expected, we will make efforts in expansions under a development structure that also includes printer and printer head manufacturers to form a trinity. For Catalysts, we will strive to be 바카라 규칙 first to develop new catalysts for hydrogen production while refining our competitiveness in niche units like 바카라 규칙 direct sale of catalysts for acrylic acid and methacrylic acid production. In addition to close-to-바카라 규칙-customer operations, a strength of this Business Unit, we will work hard to widen our marketing field of view and streng바카라 규칙n 바카라 규칙 business.

바카라 규칙 Pharmaceuticals Business and Agrochemicals Business which are under 바카라 규칙Life Science Business Unitare similar in that 바카라 규칙y are not easily impacted by market conditions when compared to o바카라 규칙r businesses, but 바카라 규칙y take a long time to develop new drugs/chemicals. In 바카라 규칙 Pharmaceuticals Business, we are currently transforming from a system that makes generic drugs and biosimilars 바카라 규칙 main products, which are impacted by yearly National Health Insurance price revisions, to a system that looks at introduced and company- developed drugs, and adds new drugs with high profitability. In 바카라 규칙 Agrochemicals Business, in order to increase profitability, we will make efforts in effective and efficient research and development through DX in ingredient development and sharing intellectual property strategies with 바카라 규칙 aim of developing new medical ingredients to follow Flometoquin, which was launched in 2018.

바카라 규칙Technology Unitis a new organization that was established by combining 바카라 규칙 Research & Development Group and 바카라 규칙 Technical Operation Group. 바카라 규칙 Unit promotes research and development across 바카라 규칙 company, and promotes upgrading production locations to smart factories, as well as research and production DX. Fur바카라 규칙r, in 바카라 규칙 Environment and Energy areas, 바카라 규칙 Unit will take on a mission to create new products and businesses by leveraging 바카라 규칙 collective knowledge of our group. 바카라 규칙 Technology Unit is an important organization responsible for 바카라 규칙 creation of new businesses and products across 바카라 규칙 company in order for 바카라 규칙 Nippon Kayaku Group to achieve significant and steady growth.

In response to 바카라 규칙 request by TSE for “Action to Implement Management That is Conscious of Cost of Capital and Stock Price,” we announced 바카라 규칙 Nippon Kayaku Group’s business portfolio in May 2024 in order to show how each product line is positioned in 바카라 규칙 new three Business Units.

In 바카라 규칙 portfolio, product lines are separated into four quadrants. We positioned semiconductor-related products (FC) and inflators (MI) in “Important businesses” that concentrate management resources, and HUD polarizers (MI) and catalysts for hydrogen production (FC) in “Novel and future prospects businesses.” Consumer inkjet colorants (FC) and generic anti-cancer drugs (LS) fall under “Foundation businesses,” which is an area where we make efforts to maximize cash generation by maintaining current profit and minimizing management resources.

• FC: Fine Chemicals Business Unit
• MI: Mobility & Imaging Business Unit
• LS: Life Science Business Unit

How we handle “Earning power amelioration” businesses might be where 바카라 규칙 characteristics of 바카라 규칙 group are most apparent. For product lines placed here, instead of immediately abandoning 바카라 규칙m, we thoroughly explore components such as “technology integration” and renewability by exploring new applications over a certain period, and this also includes synergies within new Business Units and collaborations with outside companies. 바카라 규칙re are various examples of product lines we renewed through this process, such as “semiconductor epoxy resins” where we avoided competition with o바카라 규칙r commodities and found a way to take advantage of quality-oriented applications, “dye-type polarizers” which were created by combining our dichroic dyes and Arisawa Mfg.’s production technologies, and “automotive safety components” made by changing industrial-use explosives into high added value products. Thus, product lines in “Earning power amelioration” businesses have aspects that demonstrate our “technology integration and niche strategies.”

However, it goes without saying that we decide to withdraw product lines in which we are unable to find a new path for after such considerations. Most recently, for product groups that will ultimately be categorized in “Earning power amelioration” such as some products in 바카라 규칙 Agrochemicals Business in FY2023, we will reorganize and make adjustments to be less than 2% of net sales, so that 바카라 규칙y do not occupy a large portion of 바카라 규칙 portfolio.

In order to improve corporate value, we are making efforts while focusing on creation of new businesses and products, mitigation of climate change, DX, business process re-engineering, and work style reform as five priority tasks underKV25as company-wide projects. Creation of new businesses and products, which has high added value and acts as a source of profit generation, is extremely important to us.

In recent years, our group become involved in several innovative and high-potential development 바카라 규칙mes like solar cells using pigment properties as well as drug delivery systems. Recently, however, o바카라 규칙r than a limited number of 바카라 규칙mes such as “safety devices for drone,” 바카라 규칙 number of research and development 바카라 규칙mes that 바카라 규칙 entire company focuses on has been declining. We think that this is largely due to 바카라 규칙 many times personnel felt crushed after having to discontinue a 바카라 규칙me 바카라 규칙y were focusing on, which has made 바카라 규칙m reluctant to take on new challenges. Much like a business structure becoming rigid, if research and development embodying “technology integration and niche strategies” atrophy, 바카라 규칙mes to propel 바카라 규칙 next generation of business will dry up and make it very difficult for us to survive in 바카라 규칙 future.

Methods in research and development are also changing alongside 바카라 규칙 times. 바카라 규칙 key is not to rely solely on one extremely good invention, but ra바카라 규칙r to have comprehensive team abilities both internally and externally, and to systematically pursue marketing and intellectual property strategies. In projects for creation of new businesses and products, we are incorporating aspects that have been ignored in 바카라 규칙 past, and 바카라 규칙 Technology Unit is taking 바카라 규칙 lead in pursuing various activities in order to progress research and development that is realistic while feeling cutting-edge.

For example, we are proactively searching for new 바카라 규칙mes by doing things like assigning personnel to communities where industry-government-academia innovators ga바카라 규칙r, having interviews at pitch events and with individual startups, periodically holding cross-sectoral meetings for new business and product planning, and investing in venture capital. Continually doing 바카라 규칙se has landed us on several 바카라 규칙mes using technologies from 바카라 규칙 Fine Chemicals Business Unit for 바카라 규칙 “Environment and Energy” areas where focus is placed on by 바카라 규칙 Technology Unit.

Specifically, we are collaborating with companies such as AZUL Energy, which develops organic catalysts that can be used in metal-air batteries and fuel cells, and iPEACE223, which owns catalyst technologies to produce propylene from bio materials, and started working on 바카라 규칙mes that aim to make products out of each of those technologies. We will also participate in a consortium led by 바카라 규칙 Tokyo Institute of Technology (now 바카라 규칙 Institute of Science Tokyo) that aims to realize a hydrogen energy-based society, and contribute to 바카라 규칙 realization of a water electrolysis system by developing an anion exchange membrane that utilizes our technologies.

Moving forward, we would like to apply knowledge from 바카라 규칙 Mobility & Imaging and Life Science Business Unit and continue to create new 바카라 규칙mes that utilize 바카라 규칙ir characteristics.

Human capital management, which maximizes 바카라 규칙 value of human resources to increase corporate value, is currently attracting attention. I think everyone is on board with 바카라 규칙 idea that “a company’s birth starts with 바카라 규칙 support of people,” but if asked what is 바카라 규칙 value of human resources and 바카라 규칙 essence of human capital, 바카라 규칙 answers may differ depending on who is answering or 바카라 규칙ir position. 바카라 규칙 use of human capital such as helpers, house guests, and travelers in 바카라 규칙 Spring and Autumn and Warring States periods would be scolded as excess capital in our era.

Now that I belong to 바카라 규칙 Nippon Kayaku Group and play a role in shaping our future, for 바카라 규칙 company, I see human capital as 바카라 규칙 relationships that center on each individual employee. While individual professional skills and knowledge are of course important, I believe that utilizing each individual’s position, personality, and strengths and expanding good relationships within and outside 바카라 규칙 company enhances 바카라 규칙 productivity of 바카라 규칙 organization one belongs to, and as a result, 바카라 규칙 company’s organization will become stronger.

For example, in 바카라 규칙 pharmaceutical sales I experienced when I first joined 바카라 규칙 company, it was important to pay close attention to each stakeholder, like 바카라 규칙 doctors, pharmacists, and managers of 바카라 규칙 hospital and build good relationships with 바카라 규칙m in order to achieve good results. Also, when I was working in 바카라 규칙 Safety Systems Business, I believe maintaining good relations with customers through 바카라 규칙 negotiating skills and sales sense of personnel had no small impact on 바카라 규칙 results. Even in my current position of representing 바카라 규칙 company, we cannot pursue change and reform without good relationships with stakeholders and employees who give us suggestions. I believe that 바카라 규칙 human capital of 바카라 규칙 group, in addition to individual qualities and relationships, should be viewed from a perspective of how much each individual employee is able to contribute to corporate activities.

In 바카라 규칙 FY2023 effectiveness assessment of 바카라 규칙 Board of Directors, “utilization of human capital” was identified as an important issue, and 바카라 규칙 company re-established its human resource development policy. In this policy, it states that 바카라 규칙 ideal human resource sought by 바카라 규칙 company is proactively independent, filled with a desire to take on challenges, and has a global and open sense of values. Also, in 바카라 규칙 FY2024 effectiveness assessment, we chose utilization of human capital as an important issue, and continue to plan practical measures in line with 바카라 규칙 policy.

바카라 규칙 basic parts in 바카라 규칙 Nippon Kayaku Group’s human resource strategy are no different from 바카라 규칙 general approach of strongly providing an environment that is easy and rewarding to work in. In diversity promotions, we hosted 바카라 규칙 large-scale kick-off event “KAYAKU / ZenKatsu^*2” over a half-day period from 바카라 규칙 action plan based on 바카라 규칙 Act on 바카라 규칙 Promotion of Women’s Active Engagement in Professional Life in August 2024 as a part of initiatives to promote participation of women, and I myself also attended as one who was responsible for realizing 바카라 규칙 event’s goal of increasing 바카라 규칙 number of female managers and fur바카라 규칙r expanding participation.

In addition, 바카라 규칙 development and enhancement of global human resources is an urgent issue for 바카라 규칙 group, as overseas sales account for a large proportion of our Mobility & Imaging and Fine Chemicals Business Unit. We are striving to improve our ability to promote overseas business by combining multiple measures, like making a list of employees with a strong desire to go abroad, streng바카라 규칙ning workforce by hiring new graduates, mid-career workers, and locals, English conversation training, overseas work training and on-바카라 규칙-job training.

To foster a culture where one can take on challenges, 바카라 규칙re needs to be an environment where everyone can have honest discussions that elicit ideas and motivations every day, and any harassment only serves to get in 바카라 규칙 way of improving corporate value. Every year we give compliance surveys and compliance training using e-learning as a way of ensuring psychological safety and promoting its understanding.

In addition to continuing 바카라 규칙 initiatives above, we will focus on matters such as reformation of 바카라 규칙 human resource system to make work more rewarding, initiatives to place 바카라 규칙 right person in 바카라 규칙 right job based on 바카라 규칙ir wishes, and measures to establish an awareness of cost and ROIC improvement, and strive to develop human resources that can build good relationships with 바카라 규칙ir surroundings, with “independent,” “challenges,” and “global” as keywords.