New Mid-term Management Plan

Management philosophy and new mid-term management plan “SPEED 25/30”

PURPOSE [Management Philosophy]

Through constant innovation of chemical technology,
we will provide high-quality products and services
throughout the world and contribute to the creation of
an environmentally conscious society.

VISION [Target Corporate Image]

New mid-term management plan “SPEED 25/30”
FY2021 – 2030

A corporation that contributes to establish a sustainable society by means of our original portfolio and environmentally friendly manufacturing, with a focus on specialty products

“SPEED 25/30” message and “FY2030 Ideal Figure” and “Target Figure through FY2025”

The Hodogaya Chemical Group will speedily transform itself to our “target figure” in FY2025 and to our “ideal figure” in FY2030, by means of:

  • S: Specialty products that construct a
  • P: Portfolio built up with great originality;
  • E: Engagement improvement that contributes to
  • E: ESG management promotion;
  • D: Digital transformation-led competitiveness enhancement

Position of and approach to formulating SPEED 25/30

Recognize “megatrends” through 2050 and set FY2030 “ideal figure”. Formulate 10-year scenario through “backcasting” and “target figure” through FY2025 as medium-term goal.

“Massive changes in the environment through 2050 (megatrends)” and “FY2030 ideal figure”

Hodogaya Chemical Group’s “target figure to be achieved by FY2025”

Business Strategy Roadmap

Constructing a new business portfolio (illustrative)

Aim to implement key policies by FY2025 and expand new business fields and accelerate expansion into target fields given in the Business Strategy Roadmap.

Sustainability Initiatives

Organizational structure

Sustainability policy (basic approach)

The Hodogaya Chemical Group will actively promote sustainability activities based on the concept of “balancing the pursuit of economic interest and solutions to social issues and providing value to all stakeholders” in order to fulfill its responsibility to realize a sustainable world and society in the medium and long term in line with the management philosophy (PURPOSE) and target corporate image (VISION)

Governance

  • ●Establish the Global Environment Subcommittee, which promotes activities related to environmental conservation and improvement, and TCFD Subcommittee, which promotes activities in response to TCFD proposal, as strategic response bodies under the Sustainability Development Committee.
  • ●Report and deliberate on content of committee and subcommittee discussions to Board of Directors and Management Committee and work under integrated management.

Strategy

  • ●Classify risks based on long‑term forecasts with an eye toward 2030 into TCFD risk categories, move forward with climate scenario analysis of 2℃, etc., and examine the following regarding analysis results.
    • ■Risks: Response to both transition risks and physical risks
    • ■Opportunities: New efforts from the perspective of climate change mitigation/adaption

Risk management

  • ●Regularly hold Risk Management Committee meetings, recognize and evaluate risks throughout the company, debate risk reduction measures, and report to Board of Directors and Management Committee
  • ●Recognize climate-related risks as disaster risk
  • ●Recognize risks and opportunities in line with methods used for climate scenarios, such as 2℃ target, and examine concrete measures in order to respond to uncertainty of climate‑related risks at TCFD Subcommittee.

Target and indicators

  • ●In addition to traditional initiatives, set targets that factor in the possibility of the use of renewable energy and CO2 emission reductions through the introduction of ICP

Management Targets (Financial)

Financial target FY2020 results* FY2025 management targets
Net sales ¥41.1 billion ¥50.0 billion
Operating profit ¥5.4 billion ¥7.5 billion
Operating margin 13％ 15％
ROE 8％ 9％

* For FY2020, before applying Accounting Standard for Revenue Recognition, etc.

Management Targets (Nonfinancial)

Non-financial target FY2020 results FY2025 management targets
Energy intensity 0.637 kl/million yen of net sales 0.606 kl/million yen of net sales
CO2 emissions 1.1658 t-CO2/million yen of net sales 0.868 t-CO2/million yen of net sales
Industrial waste volumes 3,017 t Reduce the volume of industrial waste
ESG evaluation score 2.3 3.7
Employees engagement score Start to measure using outside services (FY2021-) Gradually raise score
Percentage of managers who are women 11.2％ 13％