Company Report Kaneka Reveals its Medium-Term Management Plan

The Kaneka Group has drawn up its new medium-term management plan with a special focus on growth strategy, R&B strategy, global strategy and M&A strategy.

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Growth strategy（Performance Targets by Solutions Unit)

• The creation of new social value and transformation of business models based on technological innovation will present major business opportunities.

• The global economy is expected to decelerate due to trade friction between the U.S. and China and geopolitical risk. Against this backdrop, Kaneka has drawn up its new Medium-term Management Plan.

Growth strategy（Transformation of Business Portfolio）

• Aggressively expand business of all four Solutions Units (SU)

• High-functionality products to drive growth in each SU

⇒Aim for major growth in sales of E & I, Pharma, Medical, and Supplement

• Focus on expanding Health Care and Quality of Life

Growth strategy（Transformation of Business Portfolio）

• Leading-edge businesses’ net sales composition ratio to expand from 17→30 % operating income composition ratio from 26→50 %

• Leading-edge businesses + New large-scale businesses to make up 35 % of total net sales

⇒ Driving-force of growth

Leading-edge businesses...E&I, PV, Medical, Pharma, Supplement Foundation businesses (CashCow)...V&C, PP, F&R, PF, F&A New large-scale businesses... Biodegradable polymers, Organic EL Lighting, Opto-Electrochemicals

R&B Strategy

Transition to an R&B structure in order to strengthen capabilities through a shift from R&D to commercialisation

Kaneka’s R&D activities will pursue value from the perspectives of markets and customers by proactively harnessing leading-edge technologies. R&D will be redefined as R&B (Research & Business). The purpose of research will be to conduct activities to solve social issues at the earliest opportunity possible.

R&B Strategy（Investment and Return）

• Aggressively incorporate advanced technologies while strengthening allocation of resources in the life science and electronics fields in pursuit of themes with speed and scale.

• Realise high growth in new product sales.

Global Strategy

• Speedily advance regional growth strategies from a “Glocal” (globaland local) perspective

• Create new businesses centered on the life sciences and electronics fields and promote open innovation through M&A and other means

• A Global Big Niche Company that achieves borderless business expansion

Americas

• Create and expand new businesses in the Health Care field, Nutrition field (Lactic-acid bacteria), and the aerospace field

• Aggressively conduct M&As and open innovations

• Strategically utilise the Kaneka US Innovation Center

• Further strengthen production and sales foundations in existing businesses

Europe

• Expand production capacity in growth fields and conduct M&As （Health Care, Material, QoL)

• Actively expand solutions business into new businesses and fields

Asia

• Maximise returns on large-scale capital expenditure

• Aggressively expand sales in China, ASEAN, and India markets

• Expand business in the Health care and E&I fields

Investment Plan

Europe

Health Care

Expand biopharmaceuticals capacity

Expand bead-method polyolefin foam capacity

Asia

Material

Expand modified silicone polymers capacity

Quality of Life

Expand PI and GS capacity

Build additional optical film facilities

Moulded bead-method polyolefin foam product factory

Expand performance fibers capacity

Health Care

Build additional blood purification system facilities

Expand medical device capacity

Expand API capacity (Japan)

Nutrition

Expand margarine-filling capacity (Indonesia)

Construct new dairy product plant

Americas

Material Aerospace field/Composite production facility

New epoxy masterbatch facility

Nutrition

Healthy foods field/Supplement production facility

To be decided

Material

Mass-production facility for biopolymers

Others

Digital transformation investment

Plan aggressive forward-moving investments such as acquisition of new business commercialisation facilities, in addition to bolstering capacity.

Portfolio of investment plan (Capital investment)

• Emphasise peripheral technologies and peripheral markets in Material and Quality of Life.

• As an additional priority, allocate resources to expand the production base and strengthen the competitiveness of existing businesses.

Portfolio of Investment Plan（M&A）

• Intensively implement M&As in peripheral technologies and markets in peripheral to new areas in Health Care and Nutrition

• Consider a major M&A deal in Medical Devices

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