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Company Report Kaneka Reveals its Medium-Term Management Plan

| Editor: Ahlam Rais

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.

Related Companies

The creation of new social value and transformation of business models based on technological innovation will present major business opportunities.
The creation of new social value and transformation of business models based on technological innovation will present major business opportunities.
(Source: Kaneka Group )

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(Performance Targets by Solutions Unit)
Growth strategy(Performance Targets by Solutions Unit)
(Source: Kaneka Group )

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)
Growth strategy(Transformation of Business Portfolio)
(Source: Kaneka Group )

Growth strategy(Create added value)
Growth strategy(Create added value)
(Source: Kaneka Group )

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

Growth strategy(Transformation of Business Portfolio)
Growth strategy(Transformation of Business Portfolio)
(Source: Kaneka Group )

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
R&B Strategy
(Source: Kaneka Group )

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.

R&B Strategy(Investment and Return)
R&B Strategy(Investment and Return)
(Source: Kaneka Group )

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

Three regional headquarters ⇒De-centralizeour corporate functions
Three regional headquarters ⇒De-centralizeour corporate functions
(Source: Kaneka Group )

Investment Plan

Major Projects Planned
Major Projects Planned
(Source: Kaneka Group )

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 (Capital investment)
Portfolio of investment plan (Capital investment)
(Source: Kaneka Group )

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

Portfolio of Investment Plan(M&A)
Portfolio of Investment Plan(M&A)
(Source:: Kaneka Group )

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