May 13, 2014
Taiyo Nippon Sanso Corporation

Notice of New Medium-Term Plan “Ortus Stage 1”

Taiyo Nippon Sanso Corporation (President Shinji Tanabe) hereby announces that it has compiled
its new three-year Medium-Term Business Plan “Ortus Stage 1” starting in fiscal year 2015. The
Company will strive to leverage the full resources of its Group companies to enhance corporate
value by concentrating its management resources to improve profitability in Japan – under its low
economic growth - and seek new growth opportunities abroad.

1. Positioning of the New Medium-Term Business Plan

The Company had been implementing its three-year Medium-Term Business Plan “Gear Up 10”
since fiscal year 2012. However, given the turbulent changes centering on the domestic
electronics market, we put this plan aside. Then, to improve profitability as soon as possible, we
implemented the following measures: price revision of industrial gases, strengthening of allianceswith designated partners, improvement of profitability of electronics businesses, improvement ofprofitability of the North American business, and expansion of businesses in Asia. These efforts
have resulted in some achievements.

Under these circumstances, we streamlined organizations to support the growth strategies going
forward and, as our long-term vision, set the following targets by fiscal year 2023: net sales ofone trillion yen, an operating income ratio of 10%, a rate of return on capital employed (ROCE)of 10% or higher, and an overseas ratio of 50% or higher.

As the first stage toward the achievement of our long-term vision, we have compiled the newMedium-Term Business Plan “Ortus Stage 1” to facilitate a structural reform towards thestrengthening of organizations and a foundation for a new revenue base.

* Ortus means “birth, beginning” in Latin.

2. Overview of the New Medium-Term Business Plan

(1) Numerical Targets
Net Sales
Operating Income
OI Ratio
Overseas Ratio
Net Debt
Net D/E Ratio
ROCE

FY2017 Plan
600.0 billion yen
45.0 billion yen
7.5%
40% or higher
241.0 billion yen
0.74 times
8.0% or higher

FY2014 Results
522.7 billion yen
31.4 billion yen
6.0%
31%
219.7 billion yen
0.80 times
6.2%(2) Market Observation
Japanese Market
The age of low economic growth will continue, despite signs of moderate recovery, dueto a weakened yen and stock price hikes. It is expected that the industry will continue tonavigate severe business situations as production bases continue to be transferred tooverseas due mainly to high energy costs.

Overseas Market
The industrial gas market is expected to expand in the United States, where the return ofindustries continues due to the shale gas revolution, and in emerging countries, wherehigh economic growth is anticipated.

(3) Strategic Policy

Structural Reform・ Implementation of the early retirement incentive program・ Review of organizations and strengthening of sales and profitability throughredeployment of human resources
・ Review of the gas engineering function in Japan・ Improvement of efficiency of back-office functions by facilitating shared services
・ Strengthening of supply chains in Japan・ Reorganization of subsidiaries in Japan・ Review of personnel and wage systems

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Innovation
・ Generating new synergies through a strengthened alliance with the Mitsubishi
Chemical Holdings Group・ Adopting and developing high value-added products and merchandises throughventure capital investment and M&A
・ Facilitating the cross-organizational development of new businesses to addressenvironmental changes associated with energy issues (shale-gas related demand in
the United States and leveraging of economic growth in Asia)
・ Launching new strategic products and merchandises in growth markets(hydrogen station, superconductor cooling system, Pressure Swing Adsorption (PSA)
nitrogen generators, oxygen stable isotope labelled water (Water-18O), helium
containers, new materials, etc.)

Globalization・ Facilitating localization of overseas management systems
・ Strengthening global development of Group companies located in Japan・ Promoting global personnel development
・ Introducing International Financial Reporting Standards (IFRS)・ Strengthening technological risk management on a global scale

M&A・Facilitating M&A on a global scale(Explore possibilities in North America, Asia, Oceania, Middle East, South America,and Europe)(4) Investments according to the New Medium-Term Business Plan
We plan to carry out strategic investments totaling 200 billion yen over a period of threeyears in Japan and abroad, which include operating companies’ M&A, venture capital
investments, large capital investments, and rationalization investments.

3By Region

CAPEX・Investment/Finance58 billion yen77 billion yen
65 billion yen

Japan
United States
Asia and Others
Total

200 billion yen

By Strategy
Ordinary Investment
M&A
Large Investment,
Rationalization
Investment
Venture Capital
Investment
Total

CAPEX・
Investment/Finance75 billion yen
40 billion yen
82 billion yen
3 billion yen
200 billion yen(A) Ordinary Investments
We plan to spend 75 billion yen for ordinary investments that will take place regularly forthe maintenance of facilities and so on in our business in Japan and abroad.
In the New Medium-Term Business Plan, we also plan, apart from ordinary investments, tomake a special allocation of 125 billion yen to the following activities.

(B) M&A
We will facilitate M&A actively on a global scale. In addition to the United States and Asia,
where we are already operating, we will actively seek to enter untapped markets in otherregions (Oceania, Middle East, South America, and Europe), and accelerate our efforts toexpand the scale of existing businesses.

(C) Large Investments and Rationalization Investments
We will move ahead with large capital and rationalization investments including, among
others, the construction of new air separation equipment in Arizona, United States, and theexpansion of manufacturing plants of oxygen stable isotope labelled water (Water-18O) inJapan. Through the expansion and reinforcement of production capacities in Japan andabroad, we will strive to further increase the volume and improve the efficiency of ourbusiness and, therefore, build a robust revenue base.

(D) Venture Capital Investment
We will proactively adopt value-added technologies, products, merchandises, and businessmodels through venture capital investments, in order to improve profitability throughsynergies with existing businesses and develop next-generation core businesses.

43. Policy on Returns to Shareholders
The Company positions returns to shareholders as one of its highest priorities and seeks toperform a dividend payout policy in a manner that fairly reflects its business performance while
maintaining stable dividend payouts. Going forward, we will strive to further improve ourbusiness performance based on the strategic policy set forth in the New Medium-Term Business
Plan, and aim to raise consolidated dividend payout ratio during the period of the plan (FY2015 –FY2017).

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