Message from the president
We aim to realize “What we want to be in 2030” and increase both financial and non-financial corporate value by sharing our founding philosophy anew with all employees.
President Hirota Tanahashi

Sharing Our Corporate Philosophy and Direction with Employees
In transitioning to an integrated report, we have rearranged our approach using the MVV (Mission, Vision, Value) concept proposed by Peter Drucker, known as “the father of modern management,” to enable all employees at Nippon Chemical Industrial to share anew our company philosophy and direction. We have defined our reason for existence in society (Mission) as “We want to be a company that values the bond between people and the development of technologies that are in harmony with the natural environment, and realizes dreams with the unlimited potential of chemistry.” We have established “What we want to be in 2030” as the future we aspire to (Vision), and expressed our values (Value) for achieving our Mission and Vision through our Basic Policy of Sustainability, Code of Conduct, and Four Principles.
We believe that by having all employees share and internalize this MVV, our Group can work as one to make a sustainable society a reality. While maintaining the spirit embedded in our corporate philosophy, we will create new value to solve the various challenges facing modern society.
Review of FY 2023 and Thoughts Behind the New Medium-Term Business Plan
The business environment surrounding our Company deteriorated throughout FY 2023, forcing production adjustments, delivery adjustments, and inventory accumulation due to the prolonged global semiconductor recession and logistics disruptions. Nevertheless, net sales secured an increase of 1.2% YoY to 38,538 million yen, and operating profit showed a significant increase of 75.2% YoY to 2,264 million yen. We consider this to be due to a recoil from the previous year’s weak performance and better-than-expected acceptance of price pass-through.
For FY 2024, the first year of our new Medium-Term Business Plan, we forecast net sales of 40 billion yen, up 4% YoY, and operating profit of 2.9 billion yen, up 28%, as electronic ceramic materials and high-purity electronic materials, which showed weakness last year, are expected to gradually recover. This new Medium-Term Business Plan has been created through backcasting from “What we want to be in 2030,” which represents the “Vision” component of our MVV. By analyzing risks and opportunities for business continuity through 2030 and implementing plans with a medium- to long-term perspective, we will develop our company while responding to rapidly changing business conditions. Our materiality reflects our thought that envisions this future.
Increasing Profits Through Development That Leverages Our Strengths
To achieve both long-term corporate value enhancement and near-term profitability improvement simultaneously, we need to execute strategies that leverage our strengths. Nippon Chemical Industrial’s strength lies in nothing other than developing chemical products that exceed customer expectations in terms of performance and quality, and manufacturing and supplying them consistently. In recent years, people’s lives have become more affluent and diverse, and demand for chemical products has become increasingly sophisticated year by year. I believe we have been able to continue our business for 130 years precisely because we have been able to properly meet these demands.
To maintain these strengths over the long term, it is important to enhance our research capabilities to identify yet-to-emerge needs and our technical capabilities to swiftly solve social issues. Securing and developing diverse human resources is essential to making this possible. Furthermore, I believe we need to go beyond enhancing our internal human capital and actively pursue external collaborations such as industrial-academic partnerships and industrial-industrial partnerships, utilizing open innovation to venture into new domains based on our technological foundation. We also envision creating a new cycle where our employees gain increased exposure to diverse information through external collaborations, leading to groundbreaking innovations.
Our research and development system consists of two main components: upgrading our current mainstay products and developing new products that should become future revenue pillars. While both roles are important, we must first secure near-term profits, so we will continue to actively support upgrades of existing products by increasing investment in areas such as the introduction of latest testing equipment and analytical instruments. Meanwhile, in new product development, we must first listen to customer needs. These needs increasingly include matters related to decarbonization technologies and essential elements for autonomous vehicles—issues connected to social challenges that need to be addressed from a longterm perspective. We are keenly aware of how important it is in modern corporate management to consider the improvement of profitability and sustainability to be integrated elements.
Moving forward, we want to demonstrate our strengths even more effectively by maintaining these two development pillars: upgrading our core products and developing new products that will contribute to solving social issues in the future.
Appropriate Investment Leads to Increased Corporate Value
Our basic approach to investment strategy is similar to that of research and development. We will actively invest in businesses within our current portfolio that we consider truly opportune right now. At the same time, we will also make solid investments in new businesses with an eye to the future, though we believe it is important to proceed with flexibility here, as these investments do not always immediately translate to profits.
When considering investment strategy from the perspective of increasing long-term corporate value, the first thing that comes to mind is strengthening investment in human capital. For a manufacturing company like ours, innovation is an essential element in increasing long-term corporate value. And this innovation is closely influenced to employee motivation. This is not limited to the research and development division—we must continue investing in workplace development that enables all employees at Nippon Chemical Industrial to approach their work with a positive mindset. I want us to invest generously in whatever is necessary, including not only developing systems and frameworks, but also training and education. In terms of human capital management, particularly over the past three years, the coaching method that I personally introduced with strong conviction has been taking root. While leveraging these results, I recognize that my responsibility as the top executive is to first make Nippon Chemical Industrial a good organization, improve employee job satisfaction, link that to individual performance, and create a positive cycle where the entire organization becomes stronger as a result.
Furthermore, we plan to make aggressive capital investments in growth fields, specifically in electronic ceramic materials for multi-layer ceramic capacitors and high-purity electronic materials. In our new Medium-Term Business Plan, we anticipate total capital investments of 20 billion yen over three years, of which we plan to allocate approximately 30%, or 6.5 billion yen, to investments in growth fields.

Avoiding Financial Risks by Addressing Sustainability
Even in a world where the importance of ESG is strongly emphasized, news of corporate scandals continues to be reported almost daily. Also, symbolizing our highly digitalized modern era, we are seeing cases where a single system failure has led to downward revisions of earnings forecasts. While corporate management involves various risks, we notice that many of them are closely linked to sustainability management.
To foster a corporate culture that prevents misconduct, we have established ethical regulations and basic compliance policies, clarified our Code of Conduct, and are strengthening management-level oversight while promoting awareness among employees through our Ethics Committee and Operational Audit Office. However, I personally believe that establishing such systems and frameworks is simply the minimum requirement, and that promoting communication and cultivating relationships of trust within and between organizations is most crucial for embedding this into our corporate culture. Rather than having employees feel that they must follow prescribed procedures, I want to focus on creating an atmosphere throughout each organization, workplace, and indeed the entire company where people feel comfortable saying that they are having trouble or voicing concerns about something.
Regarding information security, we are strengthening security for core systems while continuously enhancing antivirus software and reinforcing network monitoring systems. In FY 2023, we implemented DMARC settings as a countermeasure against spoofing emails.
Regarding occupational safety and health, we believe that by earnestly implementing sustainability management that encompasses ESG, we can create an organization that prevents accidents by taking thorough safety measures on a daily basis.
On the environmental front, in FY 2022, we established a system to certify products that contribute to solving environmental issues and those expected to contribute to environmental improvement as “environmental contribution products.” In particular, sales volumes are increasing for BESPA and high-purity barium carbonate, which are used as raw materials for multi-layer ceramic capacitors in low-power consumption electronic devices and EVs. We have achieved our materiality KPI target of environmental contribution products accounting for more than 10% of total sales. Additionally, for CO2 reduction in our business activities, we introduced ICP (Internal Carbon Pricing) concepts for equipment investment projects starting in FY 2024. We plan to use ICP to visualize CO2 emissions and use it as a decision-making indicator for future equipment investments.
In FY 2023, regarding external evaluations and initiatives, we responded to CDP and EcoVadis, achieving a “B” grade in CDP Climate Change and a Silver Medal in EcoVadis (top 25% of all evaluated companies). In March 2024, we also joined the Keidanren Initiative for Biodiversity.
To Our Shareholders and Investors
Thanks to your support, Nippon Chemical Industrial has reached its 130th anniversary, a new milestone. We will maintain our pursuit of sustainability management, with the aim of continuing to be a company that society needs for the next 100 years and beyond. Going forward, we will actively communicate our approach to sustainability management to our stakeholders through this integrated report. We ask for your continued support.
Please contact us for inquiries about Sustainability.