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| January 6, 2014 |
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Summary of President Ishizuka's New Year Message
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Mitsubishi Chemcial Corporation
Review of 2013 and prospects for 2014
2013 was a very tough year for us. World economies generally showed signs of strengthening, while Japan finally emerged from its deflationary phase and started on a growth track. However, the chemicals industry overall saw rising costs for fuel and raw materials due to the weakening yen. Markets for both terephtalic acid and phenol plunged, mostly because of excess production capacities in China. This situation severely reduced our profits.
In 2014, we may still face challenging market conditions, but we see the overall business climate improving. The world economy is expected to grow at a moderate pace, and the Japanese economy as a whole is positioned to maintain the gentle upward trend that began last year.
Further, Tokyo was chosen to host the 2020 Olympic Games, and we will soon see moves toward development of competition venues and infrastructure. One of the themes of the Tokyo Olympics will be to reduce use of energy and resources as well as CO2 emissions, which present tremendous opportunities for low environmental impact product families such as organic photovoltaic modules and materials, organic light emitting diode (OLED) lighting, LiB materials, and LED lighting. The Olympics represent an ideal venue to strengthen the presence of these products.
On successfully completing the medium-term management plan
APTSIS 15 Step 2
Our biggest mission this year is to achieve the targets of APTSIS 15 Step 2 based on the business climate I just discussed. We view the following six targets as the pillars: (1) maintain safe, stable operations, (2) achieve a fixed cost reduction plan such as the Post Survival 300, (3) move forward in restructuring the petrochemicals business, (4) increase the profitability of our stable businesses, (5) achieve actual results in growth businesses, and (6) achieve synergy in specialty chemicals.
Expectations of Group employees
"Maintaining safe, stable operations" is the foundation of MCC as a manufacturing company. Therefore, I hope that each and every person in the company makes it a top priority to maintain safety in their day-to-day activities.
In addition, 2014 is the first year of cracker structural reforms. In May, one line at the Kashima Plant will be decommissioned. In 2016, we will jointly downsize the cracker at the Mizushima Plant, and form an alliance with Asahi Kasei Corporation to integrate the process into one line. Decommissioning a line that has been a mainstay line is heartbreaking, but if we fail to take this opportunity, we may lose our position among large chemical companies and indeed risk our very survival. "Every day is a new start" is the mindset we must cultivate, and every person - in management, production, business, research and development, and corporate divisions - must do his or her very best, every day, and press on to do what must be done.
For further information, please contact:
Public Relations and Investor Relations Office
Mitsubishi Chemical Holdings Corporation
Tel: [+81] (0)3-6748-7140
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