Top Interview

Q1.

How has the economic climate been, and how were the year’s results?

　 In the first half of FY 2009, the lingering effects of the previous year’s precipitous world economic downturn contributed to a harsh business climate. Although there were sharp fluctuations in currency exchange rates and stagnant consumer spending continued, the second half of the year brought visible signs of recovery in the manufacturing sector: exports to China and other Asian countries increased, and progress was made in inventory adjustments.

　It was against this backdrop that our Group implemented its Trilateral Business Plan, coordinating R&D, production and sales efforts to grasp client needs as quickly and accurately as possible. This endeavor has borne fruit, with an efficient business structure geared towards new product creation coming into place. We have also worked to improve our cash flow by significantly reducing inventory levels, and bringing previously outsourced functions in-house.

　Our efforts resulted in consolidated sales of 31,463 million yen for the period, down 636 million yen, or 2%, from the previous year. The Imaging Materials business unit was adversely affected by the slow economic recovery, but the Agro-science, Specialty Polymers and Hydrogen Peroxide business units saw positive results, and other strategies implemented to increase sales paid off as well.

　In terms of profit and loss, profit-increasing strategies and reductions in raw material prices helped us to achieve operating profits of 1,521 million yen, up 594 million yen (64%) from the previous year. With declines in dividend income, etc., current profits topped out at 734 million yen, a 366 million yen (99.8%) increase over the previous year.

　Because of appraisal losses on investment securities and factory furlough losses that we posted, we had a net loss for the period of 429 million yen. This represents a 3,513 million yen improvement from the previous period, largely due to reductions in extraordinary losses, and other such factors.

Consolidated Results (millions of yen)

Q2. 

Please tell us about the initiative undertaken to improve profitability.

　Beginning in the third quarter, our Group undertook an initiative to improve profitability by working to achieve three categories of specific numerical targets: increased sales, reduced variable costs, and reduced fixed costs.

　Although demand is beginning to pick up, the recovery has not yet reached full steam.  For this reason, we were not able to achieve our targets with regard to increased sales.  However, the results of the initiative as a whole, including reduced variable and fixed costs, exceeded our targets.

　Accordingly, although operating profits in our Fine Chemicals segment declined by 462 million yen, increases of 384 million yen in the Specialty Polymers segment and 428 million yen in the Basic Chemicals segment contributed to the steady recovery of operating profits for the Group as a whole.

Q3.

Which projects are you focusing on now?

　At this time we are working on an increasing number of projects, in an effort to create new high-value-added products.  Today I’d like to report on the progress we’ve made in two projects we first introduced in our last Business Report.

1. Project “CCX”
  Our Group is coordinating R&D, production and sales efforts in an effort to achieve a better understanding of our clients’ current and potential needs.  At this point, we have reached the stage at which we can apply the information we have gathered to accelerate the product development process.

　In 2009, our core Imaging Materials business unit kicked off Project “CCX”.  This project is devoted to the development of toner materials, primarily CCA (Charge Control Agents) for printers and copiers.  CCA is an ingredient in toner that regulates electrostatic charge.  Adding CCA ensures that the electrostatic charge is applied uniformly and stably over the toner surface, making it possible to maintain high print quality even after hundreds or thousands of pages, and preventing paper waste.

　The world market for color printing is expected to grow.  To meet the needs of this developing market, which not only demands high quality but also has a growing appetite for low cost, environmentally friendly, energy saving products, we are now focused on the development of other toner-related materials in addition to CCA.

2. Project “NEXT PTG”
　Another project in which we are coordinating R&D, production and sales efforts to provide products that meet our clients’ expectations is Project “NEXT PTG”.

　In the “NEXT PTG” project, we are concentrating on polyol, an ingredient of polyurethane. The production of polyurethane requires two main ingredients: polyol and isocyanate.  PTG, a core product of our Functional Polymers segment, is a type of polyol.  Polyurethane is found in an enormous variety of products, ranging from pantyhose to automotive interiors.  Our research is targeting not only commodity products, but also products with specialized functions.  In Project “NEXT PTG”, we are actively seeking to expand our product development beyond PTG into a wider range of polyols.

　By building on our experiences with Project “CCX”, we have been able to identify our clients’ needs more quickly in Project “NEXT PTG”.  Going forward, we intend to deepen our ties with our clients, so that we can create the new polyol products that meet their requirements as quickly as possible.

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