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| December 7, 2004 |
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The Mitsubishi Chemical Group Mid-term Management
Plan,
'KAKUSHIN Plan: Phase 2' |
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| Mitsubishi Chemical Corporation |
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Mitsubishi Chemical Corporation (MCC) (Head office: Minato-ku, Tokyo; President:
Ryuichi Tomizawa) formulated its Group management plan, 'KAKUSHIN Plan: Phase
2' ('Phase 2') for consolidation of strengths and building momentum for the next
three years.
In November 2002, an outline of the Group management plan for the next five years
was formulated. Based on this, the Group started to implement the first stage,
a two-year plan called the 'KAKUSHIN Plan: Phase 1' ('Phase 1') for rebuilding
foundations in April 2003. As the second stage, 'Phase 2' will be implemented
from April 2005 to March 2008.
In 'Phase 1', the Group has comprehensively made efforts to rebuild its foundations,
concentrating on reformation of its business portfolio and improving its financial
structure. In 'Phase 2', proactive and strategic investment of management resources
to businesses to nurture and concentrate will be focused for consolidation of
strengths and building momentum of the Group.
Moreover, Mitsubishi Chemical Group vision has created. The vision is designed
to consolidate the Group strengths, pursuing the common direction of the Group,
and to generate as a specific message to society.
The Group will secure sustainable profits by ensuring steady implementation of
'Phase 2'. For summaries of 'Phase 1' and 'Phase 2', please refer to the attached
documents.
| For further information, please contact: |
| Public Relations and Investor Relations Department |
| Mitsubishi Chemical Corporation |
| TEL: 81-(0)3-6414-3730 |
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| 1. |
'KAKUSHIN Plan: Phase 1'
Fiscal year ended March 31, 2004 (FY2003) - Fiscal year ending March 31, 2005
(FY2004) |
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| (1) |
Outline |
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(i) Action items
All business operations of the Group are reviewed from the viewpoints of profitability,
growth potential, and strategic alignment. Action items are the following: |
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Business portfolio management based on reorganization and restructuring
of businesses |
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Improvement of financial structure |
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R&TD for sustainable growth |
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Cost reduction |
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Integration of the Group strengths |
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(ii) Numerical targets for FY2004 |
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Reduction of interest-bearing debt: |
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More than 180.0 billion yen
*1054.4 billion yen at the end of FY2001
*870.0 billion yen at the end of FY2004 |
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Operating income: |
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More than 100.0 billion yen |
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ROA (earnings before income taxes): |
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More than 4% |
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| (2) |
Forecast of Results |
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(i) Progress in Action items |
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On the business portfolio management based on reorganization
and restructuring of businesses, 20 of about 80 business units were selected to
reorganize and restructure.
The executions have been almost completed by business alliance and transfer.
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On R&TD for sustainable growth, the Group have maintained
a stable flow of investment based on long-term perspective, prioritizing R&TD
themes, taking advantage of its total potential, and creating its Group synergy
through technological collaboration within the Group to accelerate product innovation.
In July 2003, Mitsubishi Chemical Group Science and Technology Research Center,
Inc. was established.
R&TD expenditure for FY2002 was 91.0 billion yen, and the one for FY2004 is
expected to be 93.0 billion yen.
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On the cost reduction, the 'Production KAKUSHIN' activities
have been implemented mainly in plants, which aims at optimizing every aspect
such as raw material procurement, manufacturing process, logistics, and sales,
and improving super stable operation technology.
The cost reduction of 39.0 billion yen is expected in comparison to the targeted
cost reduction of 23.0 billion yen set in FY2002.
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(ii) Numerical targets |
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Reduction of interest-bearing debt: |
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The target of 180.0 billion yen was achieved in a year advance,
at the end of FY2003.
It is expected to reduce to about 770 billion yen at the end of FY2004. |
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Operating income [expected]: |
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128.0 billion yen in FY2004 |
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ROA (earnings before income taxes) [expected]: |
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4.5% in FY2004 |
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| 2. |
'KAKUSHIN Plan: Phase 2'
Fiscal year ending March 31, 2006 (FY2005) - Fiscal year ending March 31, 2008
(FY2007) |
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| (1) |
Period of implementation |
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April 2005 to March 2008
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| (2) |
Positioning of the period |
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The Group proactively focuses on executing its growth strategy
for consolidation of strengths and building momentum.
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| (3) |
Basic concept |
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| (i) |
Increasing corporate value by making 'Waves of Change'
('KAKUSHIN'), and promoting sustainable growth through new product innovation
and market development. |
| (ii) |
Furthering business selection and focus, centering
on three business pillars: petrochemicals, performance and functional products,
and health care. |
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Petrochemicals: focused business investment to the growing Asian
market. |
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Performance and functional products: acceleration of new product
innovation and creation of constant flow of new businesses. |
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Health care: global market development of pharmaceutical business
and new medical care businesses, corresponding to changing domestic medical market. |
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| (4) |
Major action items |
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(i) Execution of growth strategy |
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In the focused areas: automobile, IT, environment and energy,
daily necessities, health care, the following strategies will be executed.
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Selection of businesses for growth and focused allocation of
resources. |
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Incubation of new products, processes, and business models.
Targeted ratio of new products in performance and functional products business
is 35%. |
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Focusing R&TD on selected future targeted projects, aligning
with the business strategies. |
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Relax control on capital investment for future growth.
20% increase per year compared to 'Phase 1'. |
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(ii) Strengthening management foundations |
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Improvement of financial position
Promotion of necessary investment and measures, aligning with the growth strategy. |
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Strategic reorganization of major domestic production sites |
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Further progress of 'Production KAKUSHIN' |
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Securing and nurturing of human resources |
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(iii) Integration of the Group strengths |
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Reinforcement of the Group management based on strengthening
business strategy and market development and improvement of transparency and fairness,
considering transfer to a pure holding company system. |
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(iv) Strengthening corporate social responsibility (CSR) |
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Examination of policies for the Group CSR activities by the
end of FY2004. |
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Execution of the Group CSR from the beginning of FY2005, at
the same timing of 'Phase 2' implementation. |
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| (5) |
Numerical targets for FY2007 |
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Operating income: |
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More than 140.0 billion yen |
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ROA (earnings before income taxes): |
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More than 5.5% |
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D/E ratio: |
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Less than 1.5 |
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*Net sales: 2,350 billion yen |
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Forward-looking statements |
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The forward-looking statements are based largely on information
available as of the date hereof, and are subject to risks and uncertainties which
may be beyond company control. Actual results could differ largely, due to numerous
factors, including but not limited to the following: Group companies execute businesses
in many different fields, such as petrochemicals, carbon and inorganic products,
information and electronics, pharmaceuticals, polymers and processed products,
and these business results are subjected to influences of world demands, exchange
rates, price and procurement volume of crude oil and naphtha, trend of market
price, speed in technology innovation, National Health Insurance price revision,
product liabilities, lawsuits, laws and regulations. |
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| 3. |
Mitsubishi Chemical Group Vision |
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| (1) |
Vision |
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Good "Chemistry" for Tomorrow
Kagaku shapes the future
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| (2) |
Note |
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The Japanese word kagaku means 'chemistry' as well as 'science'.
In addition, it also refers to the Group and each person who works for the Group.
A large letter 'g' is used to emphasize the Group's overall strength.
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| (3) |
Four kagaku minds |
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| (i) |
We will continue to be a preferred solution partner
to our customers by constantly advancing our skills and technologies. |
| (ii) |
We will continually change and innovate, creating
value and contributing to sustainable growth throughout the world. |
| (iii) |
We will fulfill our social responsibilities including
our commitment to health and safety, and harmony with the environment. |
| (iv) |
Our corporate culture of openness, fairness and
mutual respect enables us to actively pursue and realize our dreams. |
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| (4) |
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