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Message from the Representative Director, President and COO

Representative Director, President and COO Nobuo Kawahashi

Launching a New Management Organization to Reflect a New Age

JSR Corporation launched a new management organization at the General Meeting of Shareholders held in June 2019. Former President Koshiba became Representative Director and Chairman and Mr. Eric Johnson was named Representative Director and CEO. With his appointment, Mr. Johnson becomes the first non-Japanese to lead our company. I assumed the position of Representative Director, President, and COO. As the chief executive charged with thoroughly realizing and executing JSR Group’s management policy, I will push the new organization forward in tandem with the new CEO.

To take JSR Group even farther in the new era called “Reiwa,” I will set policy by listening to as many people concerned as possible and incorporating various views. I will also apply a personal trait of mine, which is to decide and act quickly and decisively, in order to provide management that has a sense of speed.

Responding to Social Change; Responding to Society’s Expectations and Demands

JSR Group supports the Ten Principles of the UN Global Compact and aims to do its part in achieving the SDGs.* This posture is based on our belief that “social and corporate sustainability” are important. We have particular interest in the SDGs, which advocate “global reform” as their fundamental principal. Furthermore, if viewed from another perspective, the SDGs—which envision an “ideal world” in 2030 and establish targets for realizing it—are also a collection of business needs that will lead to the resolution of global social issues in the future.

I personally believe society will undergo a major transformation from around the mid-2020s. In the chemicals industry, “digitalization” will spark dramatic changes in the way we do business. Among those changes, I will be paying particular attention to phenomena called “individualization” and “regionalization.” I predict the arrival of a world in which the importance of needs rooted in individuals and regions will grow exponentially. We are already seen this in the life sciences field, where responses to individualization are becoming essential in medical care settings. This trend will likely expand to all fields as “digitalization” evolves. As for the other change, regionalization, I predict that unique demand will erupt within limited regions. This phenomenon will take place on the opposite side of the spectrum from “globalization.” I think the time will come when demand corresponding with the special characteristics of specific regions will be born; those technologies and products that do not meet that demand will become irrelevant. Digitalization’s advancement will accelerate the optimization of regional supply and demand without regard for time or place. No longer will things be invented in developed countries and then brought into developing countries. Instead, various types of innovation will be born from unique regional needs.

Based on my prediction of change founded on individualization and regionalization, I intend to give particular attention to business fields that address them. Moreover, some of the SDGs are in line with “individualization” and “regionalization,” and therefore I want to be constantly aware of our contribution to the SDGs from this perspective.

* 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.

A Mindset Capable of Responding to Change and Open Innovation

In this age of change, things will happen quickly. Thus, rather than studying risk for a long period of time and then promoting business on a large scale, we will need to move ahead with smaller starts and then later ascertain direction through repeated reviews.

We are a chemicals company that proudly upholds its Corporate Mission of “Materials Innovation.” Therefore, if we can anticipate future changes and the needs that will arise from them, the door opens for us to expand our business to peripheral fields, including services. That said, “materials” will remain firmly established at the very foundation of our business. Conceptualizing “materials × something more,” we will accelerate our business by starting small with open innovation-based material development, and by conducting repeated reviews while expanding and diversifying how we look at possibilities for new business, including in service fields.

I believe the “mindset” of employees will become even more important in responding to social change. The development of human resources that are strong in the face of change will be the most important item in our new management organization. We will be looking for people who possess “wisdom and flexibility.” “Wisdom” does not materialize without a flexible way of thinking. While knowledge is simply learned, “wisdom” is the ability to create new things by using knowledge. We will develop practical training programs for producing “one” from “zero,” not classroom learning whose purpose is simply to instill knowledge.

I expect all employees to maintain an attitude of never being satisfied with traditional ways of doing things. I want them to not turn away from coming social changes, but rather to translate them into opportunity. “Do not fear crisis; turn it into a resource.” I am convinced that having many employees with this strong mindset will allow JSR Group to achieve sustainable growth into the future.

At the same time, in this age of modern business, we can no longer overcome challenges with own knowledge and technology alone. We will have difficulty keeping up with social changes if we do not achieve greater speed, even if it means accepting knowledge and technology from outside.

I always cherish the phrase “I know that I know nothing.” People tend to think that they “can do anything when they have knowledge.” So they fear changes for which they have no knowledge. But if you realize that “there are things I do not know,” this lack of knowledge allows you to eliminate the “fear of not knowing” by gathering information, making predictions, and accepting other people’s views and knowledge. I think this leads to revolutionary innovation.

This is why, during the past few years, JSR Group has been opening three new research centers charged with promoting open innovation. One of them is the JSR-Keio University Medical and Chemical Innovation Center (commonly known as JKiC), which opened in 2017. It is a facility that develops innovative materials and products that support medical care through industry-academia collaboration. Additionally, the Center of Materials Innovation on the grounds of the Yokkaichi Plant and a new life science and business incubation laboratory in Tonomachi, Kawasaki City, are actively engaged in open innovation.

Representative Director, President and COO Nobuo Kawahashi

Steadily Progressing Reform in JSR Group

Various reforms are also taking place within JSR Group. I would like to mention four of them as keywords deserving attention in the CSR field. They are “industrial safety,” “environment,” “global governance,” and “diversity.”

“Industrial safety” is simultaneously extremely important and extremely difficult. In light of this, we are now making improvements to various safety activities using digitalization. They include conducting onsite inspections with drones and providing hands-on education based on virtual reality. The performance of ICT and AI is getting better every day, so I want to apply these technologies to take our safety activities even further. On the other hand, we must squarely face the fact that the number of accidents in our facilities is not decreasing. One thing that particularly bothers me about this is a worsening balance in the distribution of employees’ age groups as baby-boomers retire. The center of the distribution spectrum is being lost. As a result, our workforce is comprised of comparatively young employees with less safety education and on-the-job experience on the one hand, and older workers who, despite being expected to have more experience, lack understanding of their declining physical condition and end up having accidents as a result on the other. About four or five years ago, I began feeling that education that takes elderly employees into account should be added to education that is based on differences in rank and experience. I intend to address advancing ICT and further changes in the age structure by reevaluating these issues in a manner that also considers educational methods.

Looking at “environment,” for chemicals companies in particular, which must make significant contributions to society, this ranks among the most important responsibilities. We must naturally reduce the environmental impact of our business activities, and I believe our contribution through the products we supply to society is quite significant. For example, our synthetic rubber “SSBR” (solution polymerization styrene-butadiene rubber) for fuel-efficient tires is effective in simultaneously reducing fossil fuels consumption and carbon dioxide emissions worldwide. In addition, the backlighting of LCD televisions consumes a considerable amount of electric power, but less power is required if the panel itself becomes brighter with good transparency. The effects of this can be traced back to lower carbon dioxide generated from fossil fuels. I believe that if, from the design stage, developers incorporate improvements into all products with attention to not only better performance but also impact on the environment, major benefits can be achieved even when the effects of each individual improvement are small. I think the accumulation of such consideration is important.

Sixty percent of JSR Group’s revenue comes from overseas, and one-third of its employees are not Japanese. We must shift the axis of our business to overseas markets, and therefore I see “global governance” as a priority issue for JSR. Particularly in the case of overseas business, we must firmly maintain governance while keeping harmony between the different cultures and business customs of other countries and the company’s sustainability. Under the new organization, we will quickly uncover unique regional needs and reinforce our global-level governance under the leadership of a new CEO who is keenly familiar with circumstances both in Japan and abroad.

Moreover, I will accelerate initiatives concerning the “diversity” of our human resources. To secure personnel who can succeed on the global stage, I will promote the development of workplace environments within which employees of different nationalities, religions, and lifestyles can work together while demonstrating their own unique characteristics. At the same time, I will work on measures to expand opportunities for female employees and promote diversity management with the aim of making the company one in which women can succeed as leaders in any department.

JSR will continue responding nimbly to our ever-transforming society without fear of change, while striving to resolve the numerous challenges of the world through business.

Nobuo Kawahashi
Representative Director, President, and COO
JSR Corporation
Nobuo Kawahashi