Last year, we published our first integrated report. Presenting financial and ESG information as a unified whole led to positive responses from shareholders who said they were now able to gain a comprehensive understanding of the company’s policies and approach. Even employees remarked that they gained a better understanding of where the company is heading as a whole. Despite being caught up in day-to-day work, people appreciated being able to share a common vision across departments and sites. Personally, I had always felt frustrated as sometimes our achievements were recognized, but other times we delivered results, yet failed to communicate them well. Publishing the integrated report has helped make our efforts more visible. I think we have become more mindful of presenting information in a way that is accessible to external audiences—whether it is our corporate philosophy and policies reorganized as MVV (Mission, Vision, Value), or our long-term strategy and Medium- Term Business Plan—since we know that it will appear in the integrated report.

As a chemical manufacturer with over 130 years of history, and true to our corporate philosophy, “We Are Treating Humanity Treasuring Technology With Good Care,” we have grown by balancing human resources with technological capabilities. We harness the power of chemistry generated by our people and technologies to provide products and solutions that help solve social issues. That is our reason for existing. Our greatest strength lies in taking on manufacturing challenges so difficult that other companies might shy away from them, using our proprietary technologies, then producing these products consistently and delivering them to customers on time with uncompromising quality.
Looking back at the full picture of our business in this way, I realize that building solid relationships of trust with both our customers and suppliers has been the reason we have been able to sustain our operations for so long. For the chemical products our customers have needed in each era, we have steadily refined and repeated the entire process, from research and development to supply chain management, manufacturing technology, and intellectual property management, and I believe this consistent effort has led to the trust we enjoy today. Trust is built on a track record; without a track record, trust cannot be earned. We will continue to value these relationships of trust as we pursue further growth.
On the other hand, when we shift our perspective from the past to the future, sustained growth will require us to expand our business fields even further. Since we cannot expect significant demand growth in the domestic market due to factors such as population decline, we plan to pursue overseas expansion aggressively. Starting in fiscal 2024, we established a local subsidiary in Taiwan and are now focusing our efforts on developing new markets there. Products and solutions that help solve social issues, such as environmental contribution products, are what we are counting on as a foothold for this global business expansion. These are indispensable to the evolution of our business model, and I strongly feel we must create a virtuous cycle in which we generate new value that contributes to society, which in turn contributes to our profitability. However, innovation in chemical products inevitably requires considerable time, and even when we succeed in development, it is difficult to gauge whether strong demand will materialize at the right time. I believe it is crucial that we develop our ability to identify latent demand, determine the right timing for commercialization, and assess profitability. Additionally, as we expand overseas, securing human resources who can excel with a global business perspective is another major challenge.

Two years ago in our “Sustainability Report 2023,” I told you that we aim for a distinctively Nippon Chemical approach to sustainability management where each employee thinks of sustainability as their own concern. Of course, this is not as easy as it sounds, and we are still searching for the right path, but I believe we are making steady progress step by step.
In environmental initiatives, we are transitioning to CO2-free electricity to help achieve a decarbonized society. In particular, by switching half the electricity used at our two sites in the Tohoku region to CO2-free power, we reduced company-wide CO2 emissions in fiscal 2024 by roughly 20% compared to fiscal 2020. Starting in fiscal 2025, beginning with our head office, we plan to install solar power generation at all sites, accelerating our energy creation efforts. In addition, starting with capital investment projects in fiscal 2024, we introduced an internal carbon price to serve as a decision-making metric for adopting energy-efficient equipment, which will also accelerate reductions in Scope 1 emissions. These efforts have earned external recognition. In fiscal 2024, we received B scores from CDP for both Climate Change and Water Security.
For social initiatives, we established a new “Sustainable Procurement Policy” and are conducting CSR surveys of major suppliers covering human rights and occupational safety. Going forward, we plan to spread our approach to sustainability management throughout the supply chain. At each of our sites, we are implementing initiatives to deepen ties with local communities. In fiscal 2024, we used the corporate version of the hometown tax program (Regional Revitalization Support Tax System) for the first time to donate to municipalities where we have facilities. At our Aichi Factory, we held a science talk for local elementary school students to give them an opportunity to experience the excitement of chemistry, as part of our commitment to supporting the next generation.
For governance and risk management, recognizing that harassment recently has become a serious risk that can threaten a company’s very existence, we issued a “Harassment Eradication Declaration” in January 2025, making clear our corporate stance that we will tolerate no form of harassment. At the same time, we continue reforms to increase management transparency by expanding opportunities for Outside Directors to participate not only in board meetings but also in management meetings, ensuring they receive prompt information sharing even when they cannot attend, and constantly incorporating third-party perspectives.

Fortunately, our fiscal 2024 results were strong. The external environment in fiscal 2025 is extremely difficult to read, but regardless of the circumstances, we will continue searching for opportunities to improve performance, and pursuing paths for sustainable growth.
We have consistently made ongoing management efforts such as improving operational efficiency, and reducing expenses, regardless of external conditions. Going forward, we will further enhance our distinctive approach to human capital management, proceed with operational efficiency and improve the workplace environment utilizing DX including AI .
As values diversify and corporate responsibilities grow year by year, we aspire to be an entity that all stakeholders, including shareholders and investors, regard as a company society truly needs. We hope you will look forward to our journey ahead as we press forward to what we want to be in 2030.