I want to make FY2023, the final year of our Medium-term Business Plan, a year that lays a solid the foundation for the future. Our earnings forecast for FY2023, announced in May 2023, predicts 295 billion yen in sales revenue, and 28.5 billion yen in business profit. However, our goal for the final year of our Medium-term Business Plan is 30 billion yen in sales revenue and 30 billion yen in business profit, so the entire company will work together to achieve this goal.

For us to achieve this goal, it is essential that we create new business models. I want to focus our efforts on increasing demand by engaging mainly in “One Sumibe activities” that encourage cross-organizational business development.

Promoting “One Sumibe activities” has made it possible to develop products that transcend the boundaries of business segments, and are carefully tailored to the issues facing society as well as the demands of customers. We have already launched new projects to develop a plastic e-Axle, heat-dissipation material, optical waveguide, and electronic dimming. Since the heat dissipation material shows promise for commercialization, we established a Business Development Department to promote it in April 2023. Appointing young people with a strong drive to commercialize these products as project leaders has led to a path for personnel development that would have been difficult to achieve in a conventional vertical organization.

Our “One Sumibe activities” have also had significant effects from the perspective of fostering an open corporate culture. They have ended up creating spaces for spontaneous communication from the bottom up. Strengthening our internal network has facilitated the sharing of information within the Group, improving our ability to make proposals to customers, and the fruits of these activities are beginning to show throughout the company.

We will work to spread “One Sumibe activities” even further throughout the company, and couple them to enhance our Group’s comprehensive worldwide capabilities.

In promoting digital transformation (DX), we have enacted reforms centered around the three areas of “research and development,” “manufacturing,” and “overall business operations.”

For “research and development,” we have implemented a data infrastructure and are promoting the use of MI^*1 at each research site. We are also focusing on training data scientists who will tackle new challenges. We have also established a system to support and reward people who aspire to acquire skills. We have been able to speed up development and create new products that utilize data thanks to the efforts of data scientists who have acquired advanced knowledge.

For “manufacturing” we are steadily building production lines that use AI and IoT to control the production system through autopilot, without human intervention. In addition to Japan, where this has already been introduced, we are expanding this system overseas and steadily broadening the range of products to which it is applied. We aim to significantly improve labor productivity by dramatically improving factors such as yield.

For “overall business operations” we have set up an internal working group to review business processes, and are actively utilizing RPA^*2 to improve the efficiency of sales and administration. We are always focused on improving employee engagement, and are striving to move toward more rewarding work and create more room for mental and physical health, which we believe will also lead to flexible work-style reforms.

One part of our corporate culture that we have fostered over our long history is an approach to business based on CS (customer satisfaction). We take delivering high-value-added products on schedule as a matter of course, and providing values like joy and excitement to customers is just the way our Group operates. We regularly stress the importance of listening to customers, sharing concerns, and working together to resolve issues, especially to employees in sales, marketing, and research, who have many opportunities to interact with customers. Our annual CS Debate sees representatives of employees who are active on the front lines of workplaces report on the results of their activities, and engage in vigorous discussions. We will work to deepen the bonds of trust with our customers, keeping in mind that the best customer experience is born of co-creation.

The philosophy behind the SDGs aligns with the “Basic Policy (Company Policy)” of our Group. We use the SDGs as the starting point for all of our activities, and use them as indicators of social contribution as we develop our business through activities such as product development. Concerning environmental initiatives in particular, which address urgent issues that are common to all humankind, we have drawn up a roadmap for developing environmentally friendly materials by 2035. We are speeding up the development of technologies for environmentally friendly products with keywords like resources, creation, energy conservation, long service life, and the 3Rs^*1. We are currently engaged in vigorous development of environmentally friendly products such as resins that utilize lignin obtained from non-edible biomass so as not to compete with food, as well as materials that cure at low temperatures.

Our group is independently pursuing certification of products that contribute to the attainment of the SDGs, and in fiscal 2022 such products accounted for 54.5% of our sales revenue. Certification requires approval following review by the SDGs Promotion Committee, but this is moving forward smoothly, and we have already achieved our goal of 50% or more of sales revenue in fiscal 2023 ahead of schedule. Our goal for fiscal 2030 is a ratio of 70% or more of sales revenue. We will focus on expanding sales by bringing products that are under development to the market as soon as possible.

We have also established the Sustainability Promotion Department to enhance our efforts to increase environmental values such as environmental conservation, countermeasures against global warming, and social values such as human capital and human rights. Effectively Promoting Company-wide Initiatives and Strengthening External Communication.

Our efforts related to human capital also include the establishment of a DE&I^*2 Promotion Office to encourage the creation of workplaces that provide fair opportunities to each individual based on mutual understanding and respect. Moreover, we have revamped the evaluation portion of our personnel system to place more emphasis on undertaking challenges, with the aim of becoming a company where employees can play an active role. We will continue developing into a sustainable company that can flexibly absorb change, by building a team of diverse personnel who are free to demonstrate their individuality and fully develop their abilities without fear of failure.

We have set “creating a sustainable society by expanding the possibilities of plastics” as the purpose of our Group. While working to improve the performance of products in areas such as strength and durability, we have supported industry and contributed to the progress of society by achieving product development that minimizes damage to the environment.

Meanwhile, we have set the basic policy of our Medium-term Business Plan to “Achieve top share in niche markets in the functional chemical sector, in accordance with the SDGs.” Our Group has gained a secure foothold by securing a market share for a variety of product types, and leading the industry through constant technological innovation. We believe the true reason our group exists is to develop plastics with unparalleled features for which there are no alternatives among other materials.

For instance, our P-Plus^® brand boasts the top market share in Japan as a packaging material that keeps fruits and vegetables fresh, helping to reduce food loss and waste. In addition, skin packaging is gaining attention as a packaging material that not only keeps food fresh, but enhances the umami of foods like beef, preserving their flavor for longer. Its diverse benefits include, prolonging shelf life, reducing the amount of plastic used, and boosting packaging efficiency.

In the automotive sector, we have encouraged the replacement of metal parts with plastic. Replacing metal with plastic allows for the reduction of weight, which improves fuel efficiency and reduces CO₂ emissions. Research into making plastics from non-edible plants is also progressing, and much has been achieved.

It is not easy to dispel the negative image of plastics made from fossil fuels, but I sense that our mission to solve the challenges facing society while pursuing safety, security, and comfort through the solid value of features that can only be provided by our Group’s plastics is becoming increasingly important.

We will continue to provide value that enriches society by developing new products and technologies driven by the pulsating force of ‘Monozukuri’.

“New products,” “new applications,” “new customers,” “increased market share,” and “improved labor productivity.” The keywords we share with employees are simple, but we believe that they are an important basis for business management that is effective in any era. The times always call for new value. We cannot expect sustainable growth unless we continue to change ourselves.

In fiscal 2022, we achieved both increased sales revenue and profit for the third year in a row. I want to express my sincerest gratitude to all of our stakeholders for providing the support that enabled our employees and all related personnel to come together and overcome this difficult situation.

FY2023 marks the final year of our Medium-term Business Plan. We will work on priority measures and focus on numerical targets to ensure that the next Medium-term Business Plan gets off to a good start and sets a new record high.

With regard to investment, we will prioritize promoting digital transformation (DX) that will enhance labor productivity, and solar power generation facilities that will help us to achieve carbon neutrality. Meanwhile, we will boldly take on new challenges and not overlook opportunities for business expansion through mergers and acquisitions. We will strive to increase corporate value while continuing to make the investments necessary to help bring about a sustainable society.

The Group’s Vision is to become “a company that makes your dreams for the future a reality.” We aim to be a company that fulfills the many dreams of our stakeholders by sharpening the “essence” that we have cultivated through long years of product development, and using it to create value that resonates with and is chosen by society. Decades from now, I hope that we will be a company that, together with employees, fulfills new dreams that are not merely an extension of where we are today. Thank you for your continued support.