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Top Commitment

JSR's Sustainability
- Preparing for accelerating change in our times and society -

Mitsunobu Koshiba Representative Director and President

Aiming to maintain sustainable growth in 2020 and beyond

The international situation has been undergoing dramatic changes in recent years. With such developments as the UK's decision to leave the EU, the US president's declaration of an "America first" policy, and the general secretary of the Communist Party of China's declaration that his nation is becoming a world leader, the world's power balance has collapsed and uncertainty about the future is growing. Meanwhile, advances in science and technology are gaining momentum in such areas as AI, big data, and "smart factories," and the wave of digitalization is coming with greater speed. I would like to begin this Top Commitment by looking back at JSR Group's course between FY2011 and FY2017 and examining how we have prepared for this age of accelerating change.

Aiming to achieve an ideal vision of itself in 2020 and beyond, JSR Group has been formulating and advancing mid-term business plans through three phases that began in FY2011 and will extend to FY2019. JSR20i3 (FY2011 to FY2013) was the first phase. Seeing the Petrochemical Products Business and Fine Chemicals Business as key JSR businesses, it anticipated slower growth in markets and looked for new business opportunities. The next mid-term business plan, JSR20i6 (FY2014 to FY2016), focused new attention on the Life Sciences Business and established it as a "third mainstay business" alongside the Petrochemical Products Business and Fine Chemicals Business. The current plan is JSR20i9 (FY2017 to FY2019). As fears of a shrinking domestic market and slower growth in our client markets finally become realized, this plan looks to produce higher profits by leveraging SSBR (solution polymerization styrene-butadiene rubber) for fuel-efficient tires, the Semiconductor Materials Business, and the Life Sciences Business as three growth drivers. During the plan's initial fiscal year, FY2017, we successfully achieved strong performance based on increased sales of automobile tire materials and semiconductor materials and on growth in the Life Sciences Business.

The Life Sciences Business is the target of particular focus as we strive to become a company that can maintain sustainable growth in 2020 and beyond. We began research in this field in the early 1980s, and over the next 30 years or so have developed it into a key business for the next generation. We established JSR Life Sciences Corporation in 2012, and this company is now fully engaged in the development, manufacture, and marketing of medical products. Moreover, in 2016, we acquired KBI Biopharma of the United States and made Medical & Biological Laboratories Co., Ltd., a consolidated subsidiary. And in October 2017, we opened the JSR-Keio University Medical and Chemical Innovation Center (commonly known as JKiC) to develop through joint research with Keio University the innovative materials and products that will support new medical fields. Sales by the Life Sciences Business amounted to roughly 26 billion yen in FY2017 and are growing at a rate that should reach 40 billion yen in FY2018.

Looking ahead, JSR Group will strive to breathe new value into the life science market, using the strengths that come with being a chemicals company that is an "engineering" leader. As an example, we want to help lower swelling medical costs, which constitute a major social problem. Medical costs are skyrocketing primarily because of the long time and great expense required for new drug development. It is said that, on average, development takes about twelve years and costs between 300 billion and three trillion yen. We want to tackle this problem and spark innovation using the technologies JSR Group has developed in data science and other areas.

Responding to digitalization in specific business segments

We executed a series of actions in response to ever-accelerating digitalization in FY2017. The most important is the cultivation of data scientists. Some ten employees who received training at an American company last year can now handle programming on their own. They have produced tremendous results, including completing in two hours analyses that used to take three days. However, what is important here is not simply to have data scientists available. Instead, it is for all employees to eliminate their mental barriers to the dramatic changes that digitalization will inevitably bring, and for them to be ready to understand and utilize it. I think the first step toward responding to digitalization is to understand what programming is, what it can do, why it is necessary, and how it can be applied.

In our businesses, we executed a name change and reorganization of our Fine Chemicals Business's segments to create a new "Digital Solutions Business." Our aim here is to achieve a better fit with the coming digitalization age and generate greater growth.

Additionally, we are making steady preparations to fully revamp JSR Group's core information systems into a platform that will make our daily corporate activities responsive to the digitalization age. This effort is linked to our vision of the ideal JSR in 2020 and beyond.

Contributing to the arrival of a sustainable society

Over its history, JSR Group has advanced its business with the aim of resolving social issues . It has done so with constant awareness of the impacts that it, a chemicals company that supplies materials, has on downstream companies and end users. At the present time, we place particular focus on three social issues: "the environment," "work styles," and "safety."

For "the environment," we are working under independently-set targets to tackle the challenges of Climate Change Mitigation and Environmental Impact Reduction. Within this context, we recognize that greenhouse gases and marine plastics are significant issues for us as a chemicals company. As for reducing our CO2 emissions, we are making preparations toward seeing what JSR Group can do, including applying new technologies, based on guidelines of the Japan Chemical Industry Association, which is a participant in Keidanren's "Commitment to a Low Carbon Society."

We see reexamination of "work styles" to be an important challenge in achieving productivity capable of responding to coming changes. We are thus advancing reform that emphasizes changing the quality of work styles, rather than simply reducing overtime hours. As part of this, we have renamed our effort "work-style innovation" in order to avoid falling into "reform for the sake of ‘work-style reform.'" However, in evaluating our efforts thus far, I keenly feel that a top-down approach is as indispensable as a bottom-up approach. For example, changing work styles sometimes requires tremendous investment for the renovation of information systems and the like. Decisions concerning such investment are made in management meetings. Therefore, I think it may be necessary to change how management meetings are run in some cases.

And in the area of "safety," overall awareness of this issue is rising among employees based on our "Basic Philosophy for Occupational Health and Safety," formulated in 2016, and the "Courses of Action" that was put in place to implement it. We are now seeing the effects of this. On the other hand, a number of significant matters have also become evident. They include the necessity of safety education for specific age groups and the full implementation of safety measures in Group companies. We are currently exploring specific measures for resolving these matters and achieving even greater safety awareness. We will continue pushing JSR20i9 forward to address the challenges I have just described and realize a JSR Group that will grow sustainably in 2020 and beyond.

Moreover, we will practice corporate management that responds to the Ten Principles of the United Nations Global Compact and precisely grasps the SDGs* and other social issues. And we will contribute to the arrival of a sustainable society as a chemical company that proudly stands by its Corporate Mission: "Materials Innovation - We create value through materials to enrich society, people and the environment."

Mitsunobu Koshiba
Mitsunobu Koshiba
Representative Director and President
JSR Corporation

*Sustainable Development Goals (SDGs): International goals for the year 2030 that were set forth in "Transforming our World: The 2030 Agenda for Sustainable Development," a plan for action that was adopted at a UN summit in September 2015. They are comprised of 17 goals and 169 targets for achieving a sustainable world.