Now, at the beginning of the year, I would like to extend my sincere wishes for a happy New Year.

1. Summary of 2020

Summing up the year 2020 leads to only one conclusion: This year has seen a paradigm shift brought about by COVID-19. Faced with the power of nature that could not be prevented even with modern civilization, action on global warming has gained great momentum. Divisions in society and the decline of the middle class have been highlighted, which became a driving force for a review of excessive neoliberalism. Moreover, the rise of telework posed new challenges to conventional ways of working and how organizations and personnel systems should function, while the delay in the payment of emergency economic packages prompted demand for administrative reform. All these matters shed light on structural issues in each and every socioeconomic system.

2. Change of environment facing the Company

The greatest change in the environment for the Company was the declaration made by the Japanese government of its goal to achieve carbon neutral by 2050. In response, we are currently looking into our plan to reduce CO₂ emission on the premise that carbon neutrality will indeed be achieved by 2050. We are developing our low-carbon story based on research, regarding policies and new technologies for cutting carbon emissions around the world. The new Medium-Term Management Plan, which will start in April 2021, will be colored by this story. Moreover, given that the Japanese population will decline, as has been pointed out, a contraction in the domestic market for our traditional businesses will be unavoidable. Achieving an expansion of growth businesses and the creation of new businesses will be essential for our Company’s growth.

3. Keys to growth; “Environment,” “Health” and “Electronics”

Through a fundamental review of conventional strategies that have been based on coal-fired thermal power as a source of our competitiveness, we will focus on making a shift in our business portfolio on the premise of net zero carbon by imagining the shape of a company that remains in sound health in 2050. In practice, we will pursue making improvements in our growth businesses based on the “Environment,” “Health” and “Electronics” as keywords, among other things, moving away from the conventional business structure that relies heavily on traditional businesses and the domestic market. In step with this, we will expand our overseas business with the overall aim of achieving a transformation into a business structure that is centered on growth businesses. Meanwhile, we will seek to maximize the energy efficiency of traditional businesses, as they are cash cows supporting these activities, and reframe the significance of the existence of traditional businesses.

4. Change to a development-driven company

The key to achieving carbon neutrality and expanding growth businesses will be strengthening our marketing and innovation capabilities. Moreover, the development and introduction of new technologies and processes are essential both in traditional and growth businesses. We will need to improve our work by such means as the use of digital transformation (DX) to attain the ability to compete with global companies. When all officers and employees refine their competences, have courage and take a step forward with an inexhaustible passion toward work and playful perspectives, I believe that we will surely morph into a development-driven company and achieve a change in our business structure. Our highest priority mission is to create a new foundation for the people who will support Tokuyama in the future, based on the foundations we inherited from our predecessors.

Let us work together to build a new Tokuyama.