Message from the President

At Kureha, our Corporate Philosophy is to treasure people and the natural environment, to constantly evolve through innovation, and to contribute to society by developing beneficial products. We seek to be an excellent company built on technology, develop differentiated products in the specialty chemicals field, and grow businesses that solve the challenges of society, and contributes to healthy lifestyles.

From the beginning of 2020, we have been confronted with the unprecedented crisis of the COVID-19 pandemic. Governments around the world are taking measures to stop the spread and return their economies to normal, all while rapidly distributing vaccines. I hope that vaccinations get to all as soon as possible and we can return to living safely as soon as possible. In these trying times, we at the Kureha Group are making a daily effort to prevent infections, and have ensuring the health of our employees, and avoiding any delays in corporate activities due to poor health, as our top management priorities.

The world is undergoing rapid changes due to the COVID-19 pandemic. As cross-border economic activity shrinks significantly, handling the COVID-19 pandemic has taken top priority, however, on the whole we expected to see a gentle upturn of the global economy from this point on. On the other hand, in the political realm, lack of international cooperation, highlighted by current tensions between the US and China, is creating instability in the global free market structure. And yet, words like “carbon neutrality” and “circular economy” signify that countries around the world are conscious of the global environment and accelerating efforts to recycle resources and stop climate change. We are seeking for ways to adapt to the new environment, the new normal that is envisioned after the scourge of coronavirus.

Even during such terrible changes to our social environment, the Group must keep up a strong and flexible response, constantly transforming and growing so as to remain an indispensable company for society. Our management is united in deepening discussions on issues and measures toward our Group's ideal vision from a medium- to long-term perspective.

1.Kureha's Challenge 2020

The Kureha Group extended the mid-term management plan formulated in 2016, Kureha's Challenge 2018, Product Differentiation and New Business Creation, by two years in order to complete the priority measures that were not achieved, and we have been working toward these five management goals: “expand the PGA business and generate profit,” “strengthen the PVDF business for further expansion,” “optimize business models for existing businesses,” “globally explore and develop new businesses,” and “strengthen management foundations.” However, due to the economic downturn, both domestic and overseas, caused by the pandemic, operating profit took a slight decrease in the final stage of the mid-term extension plan of fiscal 2020, although revenue did increase driven by the polyvinylidene fluoride resin, household, and environment segments. With another operating loss in our PGA business, we still have a long way to go in achieving our priority measures and solidifying our business portfolio.

2.Kureha's Challenge 2022 (The final stage of Kureha's Challenge extension plan)

Despite the two-year extension, priority measures have not been met or sufficiently fulfilled. Also, it is unclear when the pandemic will come to a close and what the future holds for the business environment. In addition, we have undergone repeated failures to fulfill our previous mid-term management plans and, without sufficiently analyzing the causes, created new management plans over the years. Considering all of this, we have decided that it is essential to follow through uncompromisingly on all unfulfilled goals of the current extension.
The current mid-term management plan extension will be re-extended for two years, and existing priority measures will be completed with a follow-through-to-completion stance. We have also decided to implement Kureha's Challenge 2022 (The final stage of Kureha's Challenge extension plan) as two years aiming to complete all measures along with sowing new seeds leading to our next mid-term management plan based on a vision of the Group in the future. As an important new initiative, we are resolved to determine what kind of innovations we, as a chemical company, can contribute to bring about carbon neutrality within our company and the greater society, and how to profit from the development of these technologies.

Strengthen ESG Management

We will continue to have “strengthen ESG management” as a priority measure within “strengthening management foundations,” in the management goals of Kureha's Challenge 2022. In the past few years, our economic and social environment has changed at an unimaginable speed. In order for the Group to continue to be a company needed by society and achieve sustainable growth, we must constantly scrutinize ourselves and our identity from an economic, societal, and environmental perspective, and execute our measures with an eye to the future. During this two-year re-extension plan, we will be particularly focused on the following:

(1) The environment, carbon neutrality, and a circular economy

As environmental conservation efforts are being promoted on a global scale, it is essential to the Group's survival to take part in these efforts. In the previous fiscal year, the Group established a CO2 emissions reduction target for fiscal 2030 and began efforts to fulfill this goal. In order to accelerate this, Kureha established a Carbon Neutral Drive Committee in April 2021. Keeping our goal of carbon neutrality and a circular economy by 2050 in mind, we will not only reduce our greenhouse gases and waste emissions, but we will also contribute to solving societal problems and growth of the group by accelerating the selection and development of innovative technology themes with an eye on future commercialization.

(2) Safety and Quality

As a manufacturer, safe operations and reliable quality form the basis of Kureha's CSR. We stand on the base of maintaining safe operations and providing needed products that society can use with peace of mind. If this base is shaken, none of our contributions will be accepted. In order to further fortify this base of unwavering reliability, we will not be satisfied with the status quo, and will always be proactive and specific about our pursuits.

(3) Improvement of Technical Abilities

We believe that, as a company built on technology, constantly striving to improve our technical abilities will lead to societal contributions. To continue providing high-value products, we will focus on improving our process development capabilities, and strengthening development of innovative processes, cost competitiveness, and product differentiation. To achieve this, we have recently established and already begun operations at the Production Technology Innovation Center, which handles everything from process development to plant design.

(4) Human Capital Development and Reform of Corporate Culture

To achieve our ideal vision for the future, it is essential to focus the reform of corporate culture on the cultivation of skilled human capital, therefore, we will introduce a new personnel system in October 2021. During the current mid-term plan, we will have the entire company focus on implementing this system, cultivating employees who can independently and autonomously fulfill their roles and take on challenges without fearing failure, and create a corporate culture that can respond quickly to changes in the business environment, and connect this to achieving sustainable growth of the Company.

(5) Digitalization

To strengthen the competitiveness of the Group in the face of a shortage of human resources due to the declining birthrate and aging, and also to prepare for the move to a new normal and work style reform which are predicted to be accelerated by the coronavirus pandemic, digitalization must be accelerated. We are currently training and strengthening digitally-adept human capital, accumulating concrete successes in digitalization in each of our departments, and building a model case of a value chain which utilizes data.

Mere completion of our current mid-term plan tasks is insufficient for the realization of societal contributions and sustainable growth of the Group. In order for us to become an indispensable presence to stakeholders, i.e., a sustainable company, as well as raise our economic value through profit generation as we move forward, every one of our employees must boldly take on the challenge of reform with an awareness of passion, speed, and commitment. I will personally lead this effort as head of the Kureha Group. We look forward to your continued understanding and support.

October 2021

Yutaka Kobayashi

Yutaka Kobayashi
President & Chief Executive Officer