We will re-examine exactly why a company should exist, and we will conduct management that has never been more focused on giving back to society.

Kureha Group Overview

It continues to be impossible to predict when infection by the novel coronavirus will completely subside. News reports say that, as of the end of August,25 million people have been infected with and 844,600 people have died from COVID-19 worldwide. We express our deepest sympathies to victims of the virus, and offer our sincerest gratitude to the frontline healthcare workers who are treating the infected.
We must brace ourselves for the war against the virus to be a long one. To be honest, it is impossible to predict how it will affect the global economy and, by extension, this company's earnings. The International Monetary Fund (IMF) predicts that the global economy in fiscal 2020 is headed for the worst recession since the Great Depression. While, on the whole, COVID-19 has so far had a minor impact on the Kureha Group, there is a significant possibility that hard days will come. Whatever lies ahead, all group employees will come together to address and overcome this crisis.

Mid-Term Management Plan "Kureha's Challenge 2020" Fiscal 2019 Review of Business Results

Fiscal 20I9 was the first fiscal year in the mid-term management plan, Kureha 's Challenge 2020, which aims to solidify the foundation for Kureha's future expansion. Fiscal 2018 witnessed a favorable business environment for the company and was a year that saw us significantly increase both consolidated and non-consolidated earnings year over year. However, partially due to a reactionary decrease on such strong performance, fiscal 2019 consolidated sales revenue dropped ¥5.9 billion year on year to ¥142.4 billion. While earnings were strong for products and services in the construction, environment, and household segments, agrochemicals and domestic group company revenue slowed on the back of unseasonable weather and a sluggish semiconductor market. Another factor was the sale of the company's blow bottle business.
Operating profit increased ¥900 million year on year to ¥ 18.0 billion. This owes to¥13.4 billion in profit from factors outside business earnings such as profit from the sale of land, gains on bargain purchases associated with a new consolidation , and gains on the sale of the blow bottle business, despite ¥11.4 billion in expenses that include ¥ I0.6 billion in structural reform expenses for the PGA business.

Fiscal 2020 Initiatives

The company’s business environment in fiscal 2020 has worsened beyond all expectations due to the coronavirus outbreak. We are not currently able to formulate a budget that takes all factors into account, and it will be all but impossible to achieve the ¥18.0 billion consolidated operating profit target in the mid-term management plan.
The first goal will be to establish a steady foundation for future business, even amid the economic downturn that is expected to come. We will also commit ourselves to attempting and achieving the follow­ing mid-term management plan goals: (I) expand the PGA business and generate earnings, (2) strengthen the PVDF business for further expansion , (3) optimize the business models for existing businesses, (4) explore and develop new businesses, and (5) strengthen management foundations.
Kureha is a company built on technology, and the corporate value that only we can achieve lies in using original technology development capabilities to create unique and differentiated materials, production technologies, and processed products, thereby contributing to society.

On our thoughts about COVID-19 and renewing our pursuit to become an indispensable company for society.

What brought this value into bold relief for me personally was experiencing something unprecedented with the current COVID-1 9 outbreak and seeing the reality I once took for granted, disappear. I am willing to bet that the virus will prompt big changes worldwide in how societies and individuals behave. We will see a "contactless" society that avoids the "Three Cs"(closed spaces, crowded places, and close-contact settings), with more people teleworking and working from home, and changes to how people communicate their views and ideas. And while we cannot see the big picture yet, I am certain the needs of society and consumers will change. Amid a growing emphasis on the importance of ESG management, we will re-examine exactly why a company should exist, and we will conduct management that is even more focused on giving back to this new society.
" Don 't despair over what may pass - do what you can do today and attempt what must be done to prepare for the future." This philosophy will guide our efforts to solidify the foundation that will enable the Kureha Group to continue as a high-revenue company, and every ounce of energy will go toward ensuring that we remain an indispensable part of society.

August 2020

President & Chief Exective Officer y.kobayashi