| December 14, 1999 |
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| Mid-term Plan of Mitsubishi Chemical Group |
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| Mitsubishi Chemical Corporation |
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1. Premise
| (1)Term : |
3 years starting from fiscal 2000 |
| (2)Entries: |
MCC + all consolidated companies, Totally 220 companies |
| (3)Basic policy: |
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Shift to profitable and "winning" business
structure |
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Shift to highly efficient management system |
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Shift to a new company environment in which there
is a clear relationship between mission and responsibility accompanied with the
results |
2. Manegement objectives
(1)Targeted profit at fiscal 2002
Consolidated ROA 6 %
Consolidated recurring profit:
 120 billion
 Refference1 Achivement of
Mid-term Plan |
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Refference2 Comparison of segment sales
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Refference3 Comparison of segmented operating profit
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(2)Improvement of financial constitution at fiscal2002
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To reduce the balance of debt with interest less than
half of total assets and sales |
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Investment for facilities shall be within the expense of depreciation
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Reduction of assets
- Forwarding the reduction of capital on hand and the sale of holding stocks etc.
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Try to raise cash through business disposition etc. |
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Refference1
Cash flow in Mid-term Plan
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Refference2 Expenses of depreciation and of planned investments
by each business segment
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Refference3 Decrease of debt with interest
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3. Restructuring of business
- Reformation to a business structure to remain profitable and win the competition
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(1) Basic polcy = Embodiment of selection and concentration
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Petrochemicals : to be a fundamental segment. |
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Business restructuring programs under progress shall be continued
for completion to significantly improve the profitability and cash flows. |
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Stable and increasing profitability over a long range period as
well as contribution to the corporate cash flow. |
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Both of Pharmaceuticals and Specialty Chemicals : to
be a emphasized growing segment defined to belong to the priority fields of growing
business |
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Targets both growth and profitability, and doubles the business
size. |
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Information and Electronics : to be changed toward
the priority in profit. |
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Drastic measures shall be taken in unprofitable business to specialize
in highly profitable business. |
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Carbon & Agrochemicals : to be restructured to
secure stable profits. |
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Functional Materials : to be more profitable thorough
intensifying its polymer-downstream business. |
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(2) Policy for business development by segments :
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[Petrochemicals] |
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Policy |
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As the field of fundamental business supporting the foundation
of the Mitsubishi Chemical group, the stable and increasing profitability of the
operation shall be pursued over a long period of time. The operation shall provide
powerful cash flow supports over a considerably long period of time for the priority
fields of growing business in "Pharmaceuticals" and "Specialty Chemicals". Accordingly,
the operation shall endeavor to generate a free cash flow with the stability and
long term maximization.
 Under the policy of "Selection
and Concentration", the stable profitability of the operation shall be secured
by executing the business restructuring program, including alliances, to completion,
and thorough cost reduction.
In the core business,
along the basic strategies defined as the domestic market to be supplied from
the domestic operations (the domestic for the domestic) and the overseas markets
supplied from the overseas operations (the overseas to the overseas), the growth
strategy is adopted for securing profits. |
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program |
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Secure the profitability of the domestic operations
| ..Ethylene centers: |
Reinforce respective competitive positions as petrochemical complexes
through cooperation with neighboring petrochemical manufacturers in both the Kashima
and Mizuhima districts. |
| .Polyolefins: |
Achieve the most appropriate production by suspending the operation
of smaller sized trains, and plan for the next step investment for large sized
facilities. |
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Develop the core business operations in overseas locations.
| ..Polypropylene: |
Develop the Asian business mainly through the MYTEX-AP operation. |
| Terephthalic acid: |
Develop new overseas operations (in China and other locations). |
| Acrylic acid and its esters: |
Develop new overseas operations. |
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[Speciality Chemicals]
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Policy for business development |
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Establish and improve the highly profitable nature of the business,
and at the same time, expand the business size through aggressively developing
the business of active pharmaceutical ingredients, battery materials, etc. |
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Necessary management resources to achieve these developments shall
be allocated with priority for the expansion of the operation size to ¥200
billion. |
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Program for major actions |
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Intensify the selection and concentration of the existing operations
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Expand the business size through various measures including M&A.
Aggressively expand the existing business:Including the operations of 1,4-BD,
ion exchange resins, speciality polymers, functional colorants, etc. Aggressively
expand new business:Among other actions, achieve the active pharmaceuticals ingredients
business to the ¥10 billion sales at an earlier opportunity (including the
acquisition of Nihon Roche's Fukuroi Plant). |
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[Pharmaceuticals]
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Policy for business development |
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Realize the effect of merger with Tokyo Tanabe Co.,Ltd. at an earlier
opportunity, and expand the business size through our own efforts. |
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Try hard for the earlier realization of the sales at a size of
¥250 billion through M&A in the next step of development |
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Program for major actions |
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Expand the sales by reinforcing the marketing strength (through
such means as the establishment of our own marketing system, increased MR, and
a new evaluation system based on achievement). |
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Further reduce the production cost and slim the personnel in the
indirect sections. |
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Expand the ratio of clinical tests in overseas location. |
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Pursue the M&A possibilities. |
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[Information & Electronics]
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Policy for business development |
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Convert the business strategy in orientation toward the priority
in profit. |
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Concentrate the input of management resources for specialization
in highly profitable business. |
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Take drastic measures in unprofitable business (including the disposal
of or withdrawal from the business). |
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Program for major actions |
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Undertake immediately the restructuring of unprofitable operations.
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Develop business by concentration in the highly profitable and
growing business.
Expand CD-R/RW business. Develop the DVD-R/RW business to turn it profitable at
an earliest chance.
Expand the 980LD business into the surface system. |
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[Carbon & Agrochemicals]
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Policy for business development |
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Develop the business principally for the stabilization of optimized
cash flow. |
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Program for major actions |
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Secure profit by thorough efforts for cost reduction and slimming
in the coke business. |
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Increase the presence in industrial gas business. |
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Execute the restructuring program for the fertilizer business.
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[Functional Materials]
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Policy for business development |
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Reinforce the polymer downstream business for increased values
added. |
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Reinforce the profitability foundation through the establishment
of Functional Materials Co. as a corporation, and its business integration and
reorganization with group companies (to form a newly integrated company). |
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Promote the business reorganization and integration around the
axis of 4 companies including the newly integrated company, Mitsubishi Plastics
Industries Ltd., Mitsubishi Polyester Film Corp. and Mitsubishi Chemical MKV Co.
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Program for major actions |
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Mitsubishi Chemical (Functional Materials Co.):
Materialize the program of the newly integrated company.
Restructure and reorganize operations (including the business of heat insulator,
aluminum, etc.) which remain outside the newly integrated company. |
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Mitsubishi Plastics Industries:
Expand the business of highly functional plastic products, and restructure the
business of molding products. |
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Mitsubishi Chemical MKV:
Expand the PO business for agricultural field. Reinforce vinyl compounding operations
around the operation of APCO. |
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Mitsubishi Polyester Film
Expand the business in the industrial and packaging applications. |
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4. Management Reformation
- Reformation to create a management system with the high efficiency of management
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- Reformation to create a corporate emvaironment where missions and responsibility
for results are explicitly defined. -
(1)Reformation of manegement system
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Strengthening of group management (holding company
system) |
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Purpose : |
Strengthening of management in line with group managemant
= in the manner of holding company like manner
Improvement of consolidated financial results
Strengthening of competitiveness through introducing individual management system
that suits for each business field and manner
in October 1994 merger |
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in June 1999 |
Establish
of group management system
Reform of board
Executive officer
system |
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in April 2002 (if condition are met) Holding company
system |
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Development of principal policy for management of group
companies |
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Group companies are to be subjected to thorough reviews. |
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A system for the evaluation of group companies based on their missions
(to be adopted from the fiscal 2000 year) |
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Ideal situations for every group company sharing certain functions
of the group shall be re-examined in consideration of a holding company system
(by December 2000). |
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Adoption of principal policy for group
personnel management |
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Adopt the SAP system. |
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Settle a principal policy for the personnel management in line
with the group management (by June 2000). |
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Establish the corporate system of Mitsubishi Chemical itself, which
is operated with 9000 employees, at an earliest chance (by March 2001). |
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(2)Reformation of corporate
environment
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Intensified system of object control and transit to
a personnel management system (for managers) principally based on job assignments |
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Purpose : |
The action is taken to change compensation systems to realize a
clear linkage with "the responsibility for results" and "performances under the
control by object achievement". |
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Specific measurer |
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Starting in April 2000: |
A system where divisional performances are directly reflected in
compensation shall be adopted (for application over general maneger class). |
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Starting in April 2001: |
The system of personnel management for managers shall be fundamentally
changed (for shifting toward the principle based on job assignment). |
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Expansion & intensification of RC
activities & its extension to group companies
Promote the RC activities based on the declaration of performing RC, and expand
disclosures and public discussion about the RC activities.
The RC activities shall be extended to group company for the practice |
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Monitoring system
Functions for monitoring the progress of the mid-term plan shall be well maintained,
and all possible measures shall be taken for the complete execution of the program.
= The PDCA cycle shall be performed without any failure (from April 2000 on),
(which establishes solid linkage among the mid-term plan, annual budgets and monthly
budgets). |
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