2007.3.29
Notice of New Medium‒Term Management Plan (fiscal 2008‒2010)
Break‒through 1000‒‒Aiming to Become a Company with ¥100 Billion in Ordinary Income
Mitsubishi Materials Corporation has launched a “New Medium‒Term Management Plan” starting in April
2007.
I. The Results of the Fiscal 2006‒2007 Medium‒Term Management Plan
Under the Medium‒Term Management Plan for fiscal 2006‒2007 (the “2006‒2007 Plan”) that ran from fiscal
2006, through fiscal 2007, we strove to stabilize its earnings structure while harnessing the strengths ofintegrated management to establish growth foundations to achieve success in core businesses. In particular,
our past large‒scale strategic investments in Cement business in the U.S., Copper smelting business inIndonesia and Silicon‒related business, among others, greatly contributed to improving the earnings
structure of the Mitsubishi Materials Group (the “Group”). As a result of increased earnings in our four corebusinesses‒‒Cement, Metals, Advanced Materials and Tools, and Electronic Materials and Components‒‒themanagement targets of the 2006‒2007 Plan were achieved in the first year of the plan, and results for thesecond year are expected to exceed those targets.
However, the initial earnings objectives for the Aluminum business lagged behind the plan, influenced byhigh raw material costs, despite efforts such as business reorganization to reinforce the earnings structure.
We need to address such issues.
(Achievement of Management Targets)
Targets for the 2006‒2007 Plan

Fiscal 2007 Year‒End Projections

Consolidated ordinary income¥60.0 billion(fiscal 2007)¥103.0 billion(fiscal 2007)

ROA(calculated using ordinary income)Greater than 4%(fiscal 2007)

5.9 %(fiscal 2007)

Interest‒bearing debt

¥700.0 billion(at March 31, 2007)¥685.0 billion(at March 31, 2007)

II. Outline of the New Medium‒Term Management Plan (fiscal 2008‒2010)
During the New Medium‒Term Management Plan (fiscal 2008‒2010; the “Break‒through 1000”), suchmanagement polices as “Take a Decisive Lead in Our Core Businesses,” “Value Professionalism Highly” and“Share of Sense of Achievements,” which was previously coined for the 2006‒2007 Plan, will be pursued as
management policies. In the meantime, we will achieve “Advancement and Change” through thereinforcement of our intrinsic strength, to pursue sustainable earnings in the following years at a level ofmore than ¥100 billion in ordinary income of this fiscal term.
Our business structure has been making steady advance in profitability, concentrating on four corebusinesses of Cement, Metals, Advanced Materials and Tools, and Electronic Materials and Components.
Under the “Break‒through 1000,” we will further enhance the business bases of four core businesses andpromote these businesses respectively, ensuring stable earnings structure of all group companies thanks to
the diversified sales cycles of our products. Thus, we will achieve four‒wheel drive‒type management, whichenables us to be immune to the impact of environmental changes in the market. In addition, with concerted
effort among the group companies, we will enhance value creation of our group companies by presenting
more highly value‒added materials and total solutions for business issues.

Copper price is expected to decline during three years of the “Break‒through 1000,” thus depressing ourordinary income by ¥17 billion from fiscal 2007 (provided 200 ￠/lb. in fiscal 2010); however, through thefollowing measures we will strive to improve profitability at our group companies.
1. Companywide Management Policy
1) Expansion and Reinforcement of Four Core Businesses as the Basis of Integrated Management
Although our four core businesses‒‒Cement, Metals, Advanced Materials and Tools, and Electronic Materials
and Components‒‒can almost ensure a certain level of profitability, they have yet to reach a world‒class levelin size and profitability. Under the “Break‒through 1000,” we will therefore focus our attention on therespective growth driver of the businesses. In addition, we will aim to further reinforce our businessfoundation by pursing “Only One” or “No. 1” high‒value‒added businesses and products by enhancing ourvertical value chain from raw materials to downstream products, while also promoting strategic alliances, ifneeded, with other companies to further reinforce the value chain. To improve competitiveness, we will
renew or remodel facilities to increase productivity and take consistent and detailed measures not to missbusiness opportunities. To implement such measures, we have an aggressive plan for ¥250 billion in capital
investment and loans for the three years of the “Break‒through 1000.”2) Initiatives for Our Growth Strategies for “Advancement and Change”We have positioned automobiles, information electronics, and the environment and recycling as our three
growth fields, on which we will concentrate management resources. Aiming for a ¥15 billion increase inordinary income in five years, of the ¥250 billion in capital investment and loans planned for the next threeyears, ¥75 billion will be directed to these three growth fields, which accounts for approx. 60% of production
increase and investment in new product development. Renewal or remodel of facilities is not included in thisamount.
R&D resources will also be concentrated in these three growth fields. We will improve the entire Group’s
technologies through the development of electric transmission systems and lightweight, high‒strength
aluminum cans.
3) Emphasize the Intellectual Capital Underlying Our Growth
To realize “Break‒through 1000,” all employees in each tier of the Corporation must address challenging
objectives. Moreover, we must create a positive corporate culture in which employees can share “Happiness,”“Sense of Satisfaction” and “Dreams” based on their substantial efforts. We must nurture and educate humanresources with a strong professionalism and use our accumulated technologies and expertise on the actual
worksite to improve onsite capabilities. To do so, we will strive to improve capabilities of manufacturing thehigh‒quality products by promoting an onsite capability improvement campaign, review the overall training
course and install better training centers.
With regard to corporate governance, the entire Group will promote the Medium‒Term CSR Direction andcomplete the Internal Governance System, and familiarize employees with both, to achieve sustainableimprovement of corporate value, by fulfilling corporate social responsibilities.
4) Enhancing Financial Position
Under the “Break‒through 1000,” we will further actively invest in facilities, within the range reserved forinvestment and loans of cash flows from operating activities. Through the reinforcement of shareholders’equity by enhancing profitability, we will improve debt‒to‒equity ratio.

2. Management Targets for the “Break‒through 1000”
1) We Aim to Achieve the Following Targets during Fiscal 2010.
(Companywide Targets)
Targets

ReferenceConsolidated ordinary income

More than ¥100.0 billion¥103.0 billion(fiscal 2010)(estimate for fiscal 2007)

ROA(calculated using ordinary income)Greater than 5.0 %(fiscal 2010)

5.9 %(estimate for fiscal 2007)

Debt‒to‒equity ratio

1.4 times(at March 31, 2010)

1.7 times(estimate at March 31, 2007)<Reference: Rough Projections of the “Break‒through 1000”>a. Performance Rough Projections (fiscal 2010)(Billions of yen)
Net sales

1,410.0

Operating profit

85.0

Ordinary income

105.0

Net income

53.0* Calculated based on LME copper price: 200 ¢/lb, exchange rate: ¥110/U.S.$.

b. Segment Information (rough projections for fiscal 2010)(Billions of yen)
Net sales

Operating profit

Ordinary income

Cement

184.0

17.0

26.5

Metals

608.0

24.0

28.0

Advanced Materials and Tools

176.0

22.0

20.5

Electronic Materials and Components

79.0

10.0

26.0

Aluminum

171.0

6.5

5.5

Others and eliminations

192.0

5.5

(1.5)

Total

1,410.0

85.0

105.0

c. Segment Information (estimate for fiscal 2007)(Billions of yen)(Billions of yen)
Net sales

Operating profit

Ordinary income

Cement

200.0

18.0

25.0

Metals

696.0

31.0

45.0

Advanced Materials and Tools

152.0

16.0

9.5

Electronic Materials and Components

86.0

10.0

29.0

Aluminum163.0

2.50.5

Others and eliminations

143.0

(3.5)

(6.0)

Total

1,440.0

74.0

103.0

d. Contributing Factors to Variances in Ordinary Income
Fiscal 2007 (estimate)¥103.0 billion
Sales price¥(41.0 billion)

Others¥(16.0 billion)

Amount¥34.0 billion

Cost reduction¥25.0 billion

Contributing factors

Rough projections of performancein fiscal 2010

¥105.0 billion

2) Cash Flow Plans (cumulative total for fiscal 2008‒2010)
a. Cash Flow for Fiscal 2008‒2010(Billions of yen)
Cash flows from operating activities

285.0

Cash flows from investing activities[Capital investment](250.0)[(230.0)]

Free cash flows

b. Breakdown of Capital Investment Plans (¥230 billion in total for fiscal 2008‒2010)

35.0

(Billions of yen)
Cement52.5Metals

57.0

Advanced Materials and Tools

33.0

Electronic Materials and Components

40.0

Aluminum

26.0

Others

21.53) Financial Position Improvement Plan
At March 31, 2010
Total assets¥1,810.0 billion

Debt‒to‒equity ratio

1.4 times

3. Business Plan for Each Business
1) Cement[Management Policies]
To become a major manufacturer in the Pacific Rim region by focusing on regional portfolio management.
‒‒To concentrate management resources on operating bases where higher performance is expected in thePacific Rim region, with the Kyushu Plant as a strategic base to become highly profitable.
[Basic Strategies](Japan)Address the issue of declining demand for cement by reducing costs, centered on revising cement prices, andexpanding industrial waste treatment, thus improving profitability and reinforcing the earnings base, while
expanding business in limestone crushing.
(United States)
Vertically integrate cement manufacturing, imports and sales, ready‒mixed concrete and aggregatebusinesses to expand downstream businesses.
2) Metals[Management Policies]
Utilize the Corporation’s cost competitiveness, technologies and development capabilities to verticallyintegrate the entire process from copper smelting to processing, thereby adding value and achieving
sustainable earnings.
‒‒Take advantage of our strengths in Mitsubishi Process (MI furnaces) and reverberatory furnaces for copper
smelting to achieve the world’s top‒level cost competitiveness. In addition, expand the added value of rolled
copper by harnessing our capabilities to develop oxygen‒free copper and copper alloy.
[Basic Strategies](Copper smelting)Stabilize earnings through cost‒reduction in smelting, thereby expanding the domestic recycling business andintroducing the S furnaces of the MI furnaces to Onahama Smelting & Refining Co., Ltd., while optimizing themerits of expanding the manufacturing volume at PT Smelting in Indonesia.
(Copper processing)Enhance the value chain with our rolled copper group companies, drawing on our copper alloy development
capabilities.

3) Advanced Materials and Tools[Management Policies]
Become a value supplier in the worldwide automobile, aircraft and information technology industries.
‒‒Strive to expand sales of cemented carbide products through aggressive global expansion drawing on ourstrength in manufacturing capabilities encompassing tungsten and such similar materials, and expand thebusiness of cemented carbide products and high‒performance alloy products in the aircraft industry, which isa new market.
[Basic Strategies](Cemented carbide products)
Build manufacturing and sales structures to cope with global‒scale automobile manufacturing.
(Powder metallurgy)
Build foundations to expand globally in line with the growing worldwide demand for automobiles.
(High‒performance alloy products)
Promote the selective concentration of products and concentrate resources on manufacturing products forthe turbines, aircraft and automobile industries.
4) Electronic Materials and Components[Management Policies]
Enhance profitability through the vertical value chain of silicon‒related products and by manufacturing thebest niche products.
‒‒Expand the lineup and productivity of semiconductor‒related products, drawing on our strength in handlingpolycrystalline silicon, which is a main material of semiconductor wafers.
[Basic Strategies](Silicon)
Expand the productivity of polycrystalline silicon, mainly at SUMCO Corp., responding to growing demand forsemiconductor wafers.
(Advanced materials)
Center on the best niche products through the capabilities of materials development, mainly ofsemiconductor‒related products.
(Electronic components)
Enhance the capabilities of product development and timely release the quality‒assured electroniccomponents.
5) Aluminum[Management Policies]
Nurture the vertical value chain.
‒‒Establish a value chain by reinforcing competitiveness, differentiating our strength in handling upstream
aluminum products (rolled products) and downstream products (aluminum cans).
[Basic Strategies](Aluminum cans)
Return to the positive figures of Universal Can Corp., through review on sales price, further cost reduction
and sales expansion of newly‒developed products.
(Rolled products)
For quality improvement/streamlining, promote the renewal or remodel of facilities with those of Mitsubishi
Aluminum Co., Ltd., centering on sales expansion of automobile‒related products to enhance earnings base.