Executive Commitment

We will Continue to Take on Challenges to Enrich Society under the Corporate Mission of “Materials Innovation,” Remaining Alert to the Ever-changing Times

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Keeping up with the changing times and
developing a growth scenario

As part of the process to realize its vision of what the Group should be by 2020, the JSR Group has been implementing JSR 20i3 ( "twenty thirteen" ), the mid-term business plan, for three years since FY 2012 (April 1, 2011 to March 31, 2012), a period positioned as the stage for "activation toward growth." For the financial crisis period that followed the Lehman crash, we considered that the keywords of the time were "uncertainty" and "diversification," of the times, but since FY 2013 we have seen some signs of the emergence of a new global framework. One of these signs is the shale gas revolution. When stable production and procurement of shale gas becomes possible, it will certainly lead to the diversification of raw materials and a shift in the geopolitical balance. Global economic conditions are more likely to be better than worse and we must make sure to pounce on this opportunity. We will continue to be alert to these changes and develop a scenario for steadfast growth that reflects the new trends for the next mid-term business plan starting from FY 2015.
The petrochemical product business, one of our core businesses, is affected greatly by stability in the available volume and price of raw materials procured. Procuring a stable supply of butadiene, one of the most important raw materials, is an ongoing issue. We are currently studying the use of alternative raw materials to produce butadiene, while also developing production technologies for synthetic butadiene. As a matter of fact, JSR had already studied synthetic butadiene about 40 years ago. However, the depletion of natural resources was not a serious social problem at that time, and synthetic butadiene did not appear to be very effective when rationalized from an economic viewpoint. These R&D efforts, initially made a long time ago, are now beginning to create new value.
The fine chemicals business, which has traditionally been based in Japan and is the other of our core businesses, is currently undergoing a change in business style. While carefully monitoring changes in the fine chemicals market, we are shifting our focus to Korea and Taiwan in the case of flat panel display materials and more globally in the case of semiconductor materials to better meet customer needs.
These core businesses are our major sources of income, but it is difficult for us to become a globally influential corporate group even by maintaining continuous growth of these businesses. To give the Group a strong push toward further growth, we need to establish materials and technologies that will help solve global issues as our next pillar of business.

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Turning solutions for social issues into a growth driver

This new pillar is “strategic business.” I am confident that we can contribute to solving global issues by utilizing and integrating our proprietary technologies and quality control techniques built up through petrochemical and fine chemicals businesses.
The basis of all our strategic businesses is our superior precision materials and processing technologies. By adding functions and applying high-precision processing, we can provide added value to our materials. Based on these technologies, we offer products in two areas:environment/energy and life science.
In the area of environment/energy, we focus on energy-saving and regeneration, thermal storage and insulation, and other technologies that will lead to reduced power consumption. We attach particular importance to lithium-ion capacitors, for which we utilize our proprietary precision processing technology to enhance the performance and safety of electrodes to further increase their quality. We have also commercialized thermal barrier coating agent materials by modifying technologies we had previously developed. These products are aligned with the concept of Eco-innovation of the E2 Initiative^TM, JSR’s unique program that combines environmental conservation with business.
In the area of life science, we established JSR Life Sciences Corporation in February 2012. In addition to medical polymers and particles for clinical diagnostics that we had been producing and supplying, we will expand our business under the new company to include bioprocess materials used for refining antibody-based drugs. The drug discovery process requires a high level of quality and safety, but we possess technologies and knowhow from quality control and production that have been accumulated though semiconductor materials and other businesses. We have been integrating the technologies of two apparently unrelated fields—life science and semiconductors—to create products that will enhance convenience for users. We hope that these efforts will lead to a reduction in production costs of drugs, enabling the availability of more affordable pharmaceuticals, as well as to the development of personal medical care in which drugs and treatment are optimized for each patient. These activities will be conducted as part of the practice of our Corporate Mission, "Materials Innovation."
Regarding conservation of biodiversity, while promoting activities under the company-wide policy adopted in FY 2013, we will further explore ways to integrate biodiversity into our business operations.

The pioneering spirit of each of our diverse employees will
shape our future

As the scope of our business grows from petrochemicals to fine chemicals and strategic businesses, and the geographical areas in which we operate expand, human resource development has become our most important management issue.
I feel that through business activities, each employee has become aware of the need to do business with a global perspective. Employee understanding of our Essential Elements has deepened through repeated dialogue meetings for executives and employees. What we need to do from now on is to ensure implementation of the Course of Action "The 4Cs" (Challenge, Communication, Collaboration, and Cultivation). In the area of life science, for example, we are actively promoting concerted efforts with various external partners through collaboration with research institutions and strategic investment in other companies. Challenge and Collaboration are particularly important when we develop a new business model together by listening to and respecting each other’s opinions.
Understanding diverse values is also indispensable. Of 5,800 employees of the Group, about 1,200 are local employees working overseas, and the percentage of employees in this group compared to the total number of employees is expected to increase further. In addition to hiring overseas local staff, we are also promoting female employee engagement and employment of mid-career workers. Management has a duty to create opportunities for employees with diverse backgrounds to hold managerial positions or to be appointed as executives according to their abilities. Furthermore, we are currently developing a system to reward employees who make a serious commitment to the company’s growth, as well as their own growth.

Continuing our challenges to create value with
the aim of realizing a sustainable society

In November 2012, a fire broke out at the emulsion-polymerized SBR facilities in the Yokkaichi Plant. Although fortunately there were no casualties, I would like to express my deepest apologies to residents in the community and to the relevant authorities for causing great concern. We had been conducting safety activities on a daily basis, but this accident reminded us that there is no such thing as absolute safety.
As a corporate group with a global presence, the JSR Group is taking part in the United Nations Global Compact to ensure that we act responsibly at all times in the global community.
In March 2013, JSR Micro, Inc., our Group company in the United States, issued "2012 CSR Report". The company decided on publishing the report after being inspired by the JSR Group’s CSR Report and after coming to the realization that commitment to society will make them more competitive. I think it was an admirable decision. I would like to see this kind of mindset and action expand globally throughout the Group.
JSR was established originally as a semi-governmental company and has remained independent of any corporate groups throughout its history. In order for us to survive global competition and stand out from the rest of the pack by leveraging our unique characteristics, we need to increase our scale. Our aim is to become a company with a market value that exceeds one trillion yen. To achieve this challenging goal, we are ready to enact changes even in our traditional mindset and business model. We will continue with relentless efforts to create value under the Corporate Mission of "Materials Innovation" with a view to contributing to the creation of a sustainable society and achieving continuous growth of the JSR Group.

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