MUCC Medium-term Management Strategy（FY2023 to 2025）

1

Contents
1. Review of First Year since Integration
2. Corporate Vision
3. Medium-term Management Strategy（１） Overview（２） 2030 Roadmap & Supply Chain Vision（３） Strategies by Segment（４） Investment Plan

（５） Business Plan

2

Business Situation

Introduction

1. Review of First Year since Integration
In April 2022, Mitsubishi UBE Cement Corporation(MUCC) started operations.
We’ve been steadily operating our business under the philosophy announced at our beginning.
Respective businesses were integrated without any problem, and this started bringing synergy.

FY 2022

Domestic(*1)
Cement BusinessBusiness
Environment

Fuel Price Hikes

Measures•Announced in Oct. 2021 “Price rise by 2,200 yen/tonne from Jan. 2022” (mostly agreed)•

Announced in July 2022 “Price rise by 3,000 yen/tonne from Oct. 2022”•

Announced in Sep. 2022 “Decommission of Aomori Plant and No.1 Kiln of Isa Cement Plant
as organizational reform (by the end of Mar. 2023)“

Overseas Cement& RMC(*2) Business

Steady Demand,
Cost Rise•

Increase of affordable and alternative fuel use•

Restart of cement terminal operation and increase in the number of drivers•

Sales expansion by product price revision against rising fuel and raw material costs(*1) Japan(*2) Ready-mixed Concrete

Consolidated P/L◼

◼

FY2022 Forecast

Consolidated result is projected to fall into the red due

Net Sales(billion yen)592

to insufficient product price revisions against cost rises.

Operating Income(billion yen)

-28

Measures devised in FY2022 are expected to make a

Ordinary Income(billion yen)-26

significant contribution to business recovery in FY2023.

Net Income(billion yen)-53

3

2. Corporate VisionCorporate Philosophy＜Mission＞

Continue to support the future of the＜Value＞

Integrity and Sincerity

planet by providing the highest quality

Teamwork and Group Strengthwith the best technology and services.

Challenges and Change

Business Environment

Vision・ Gradual decline in domestic market
・ Shrinking workforce
・ Consistently high price of coal・ Fierce competition in export market
・ Market growth in Southern California
・ Acceleration of carbon neutrality
・ Preservation of global environment
・ Development of innovative digital technology

・ Cost leader in domestic business・ Continuous growth of overseas business・ Leading company toward carbon neutrality

・ Sophisticated value chain
・ Unique technology for building new value

Corporate group with leading technology and high profitability
by maximizing the synergistic effects of business integration
Achievement of consolidated operating income target,≥ 30 billion yen in domestic business and ≥ 350 million dollars in overseas business,by growing both domestic and overseas businesses.
(Consolidated ROE ≥ 8％ and ROA ≥ 6％）

4

Name

3 years for “Surplus in FY2023”, “Groundwork toward corporate vision”
and “Preparation for new business creation and growth strategy”～MUCC Sustainable Plan 1st STEP～

Top Priority

Priority Action

Infinity with Will 2025Plan

3．（１） Overview① Strengthening and cost reduction of domestic cement business
Surplus achievement of domestic cement business in FY2023 by laying groundwork in FY2022.

② Business growth in the U.S. and exploration of new business sites
Value maximization of vertical integration model by sales expansion and cost reduction.

③ Promotion of global warming countermeasures
Increase of alternative fuel use, energy conversion and CCU(*3) technology development.

④ Strengthening and expansion of domestic value chain
Non-fossil energy promotion, profit maximization through limestone utilizationand downstream business strengthening and upgrade.

⑤ Enhancement of R&D and business management
R&D function enhancement, strategic HR management and DX project promotion.
(*3) Carbon Dioxide Capture and Utilization

53．（２） 2030 Roadmap
In response to the projected gradual decline of domestic cement demand from 2026 (35 million tonnes
in 2030), we are working on “further organizational reform for strengthening the domestic business base”,“expansion of overseas business with growth potential” and “new business creation” as the 2nd step.
Infinity with Will
2025

3 years for “Surplus in FY2023”, “Groundwork toward corporate vision”
and “Preparation for new business creation and growth strategy”

1st STEP◼

Cost leader in domestic business through organizational reformof the domestic cement business and a sophisticated value chain

Infinity with Will

2nd STEP◼

Leading company toward carbon neutrality by unique technology and business model◼

Continuous expansion of overseas businessthrough business growth in the U.S. and exploration of new business sites◼

New business creation through enhancement of the R&D function,
strategic HR management and DX project promotion

Vision2030

Corporate group with leading technology and high profitability
by maximizing the synergistic effects of business integration
63．（２） 2030 Supply Chain Vision
Shift to a carbon neutral port and upgrade of the entire supply chain.
Contribution to carbon neutral society and circular economy through carbon recycling and defossilization.
40% Reduction in CO2 Emissions (vs. 2013)
Limestone
Overseas Business

Large Port Infrastructure & Ube Coal Center
Cement Business

Mineral Resources
Business

Aggregate

Production & Logistics

CalciaOrganizational Reform

Sales
High Value-Added
Inorganic Material

Environment
Carbon Recycling
Business

Magnesia

Environment and Energy Business

Waste
Collection Center,
New
Recycling Business

The U.S.
(Cement, RMC)
EnergyDecarbonization(Biomass Power Gen.,
Biomass Fuel)

Biomass
Plant

Downstream Business
Enhancement
New
Business Sites

RMC Business

Wholesaler

Domestic Market

Overseas Market

7

Kyushu Plant（３）Detailed Plan

Robertson's Ready Mix【Strategies by Segment】

Higashidani Quarry

Ube Cement Plant & Ube Coal Center

8

① Strengthening and Cost Reduction of Domestic Cement Business (Top Priority 1)
VisionCompetitive position in domestic market
through cost reduction, organization reform and sophisticated value chain
Business Strategy

Business Environment◼
◼
◼

Gradual decline of demand(35 million tonnes in 2030)
Consistently high fuel prices
Acceleration of carbon neutrality

◼
◼

◼
◼

Transactions at fair prices
Enhancement of competitiveness by optimizing
production and logistics
Measures against energy price hikes(shift to carbon neutral society)
Organizational reform of business base

Priority Measures
◼

◼
◼
◼
◼

Reach an agreement on price riseby 3,000 yen/tonne at the beginning of FY2023
Action for transactions at fair prices◼
◼

Affordable fuel use

Organizational reform of production(decommissioning of Aomori Plant
and No.1 Kiln of Isa Cement Plant)
Reconsideration of export strategy and profitability
improvement of plant dedicated to export production
Organizational reform of domestic logistics◼
◼

Downstream business enhancement
Downtime reduction and productivity
improvement of plant operation

Increase of alternative fuel use
Fuel cost and CO2 reduction

9

① Strengthening and Cost Reduction of Domestic Cement Business (Top Priority 1)（TOPICS） Fuel cost and CO2 reduction
Alternative fuel ratio : 50％ （2030）
Measures◼ Enhancement of plastic waste collection capacity around Kyushu Plant.
◼ Expansion and installation of waste oil receiving and processing facilities.
◼ Installation of collection centers to take advantage of larger scale following integration.
◼ Promotion of other alternative fuel use.
Concept of Plastic Waste Collection(Kanto and Kansai)

EffectCement Plant

FY2022

Collection Center

Alternative Fuel
Ratio (％)

Kyushu & Chugoku
Direct Transport
to Cement Plant

CO2 Reduction(kilo-tonnes)*
Kanto
Installation of Collection Center

19ー

FY２０25

FY２０30

31

50

-405

-1,276*CO2 reduction effect of investment from FY2023.

Kansai
Installation of Collection Center10

② Business Growth in the U.S. and Exploration of New Business Sites (Top Priority 2)

VisionValue maximization by achieving dominant share of RMC sales in Southern California market
and strengthening vertical integration modelBusiness Environment◼
◼
◼

Steady growth of cement and RMC demand inSouthern California due to population growth(average annual growth rate : +3%)
Energy cost rise
Scarcity of aggregate resources due to the
influence of environmental regulations
Carbon neutrality by 2045◼
◼
◼

Response to growing demand
Steady supply of cement and RMC
Stable procurement of aggregate
Appropriate price revision
Action toward carbon neutrality<MCC>

Priority Measures

Limestone Quarry

MCC Development (MCCD)◼ RMC sales volume increase and price rise promotion◼ Increase in the number of RMC truck drivers◼ Mining area expansion of current quarry
and acquisition of new quarry

Cement Plant

Import Terminal

Carbon Neutrality,
Steady Supply

Efficient Operation,
Business Expansion<MCCD>
Mitsubishi Cement Corporation (MCC)◼ Price rise promotion of cement◼ Downtime reduction of plant operation◼ Action toward carbon neutrality
Increase of alternative fuel use,
renewable energy use and blended cement production

RMC Plant

Aggregate Quarry

Business Expansion,
Steady Supply

Quarry Development,
Business Expansion

Customer

Enhancement of
Vertical Integration Model◼

Business Strategy

11

② Business Growth in the U.S. and Exploration of New Business Sites (Top Priority 2)
Priority Measures◼ Exploration of new business sites to establish “2nd core pillar”
following our current business in the U.S. (taking flexible action to avoid missing opportunities)◼ Roll-out of “vertical integration model” to other areas and synergy creation◼ Workforce globalization for dispatching expatriates

High Potential Area

CanadaThe U.S.

New ZealandAustralia
12③ Promotion of Global Warming Countermeasures (Top Priority 3)

Strength

Vision◼ Main production sites are located around large port infrastructure
at coastal areas in western Japan.
◼ Technology and supply chain developed by operating cement businessin former conglomerate companies.

Establishment and deployment of advanced technologies as early as possible,
and realization of our unique and feasible decarbonization schemes as a cement company.

2030 : 40% reduction in CO2 emissions (vs. 2013), 2050 : Carbon neutrality
Business Strategy
Ⅰ. Early Realization of Energy Conversion

Ⅱ. Early Commercialization of CCU Business◼

◼

Fuel conversion in cement production
Waste derived fuel ratio : 50% （by 2030）
Carbon free fuel ratio

from cement production process as useful resource: 50% （by 2050）(Ammonia, Hydrogen, Synthetic Methane, etc.)◼

Recognize low-cost and high-concentration CO2 captured◼

Establishment of CCU business model (by 2030)

Decarbonization of electricity（Emission reduction by 2030, Full decarbonization by 2050）

13

③ Promotion of Global Warming Countermeasures (Top Priority 3)

Priority Measures
Ⅰ. Early Realization of Energy Conversion

Ⅱ. Early Commercialization of CCU Business◼

◼

Introduction of CO2 capture technology◼

Establishment of CCU business scheme (by 2030)◼

Widening of CO2 application (by 2050)

Strengthening of waste derived fuel procurement
Infrastructure development, such as collection centers, etc.

◼

Promotion of highly efficient equipment installation◼

Establishment of carbon free fuel combustion technology (ammonia)◼

Decarbonization of electricity
Combination of energy conversion at private power station and external procurement

Carbon Neutral Vision 2050

Process
Derived CO2External Procurement /Private GenerationSP

Non-fossil
Electricity

Ammonia,
Hydrogen

Synthetic
MethaneDirect Utilization

SurplusExternal
Procurement
External
Procurement

Non-fossil
Fuel

CO2
Capture
Plant

Wastewater
Treatment

Energy Derived
CO2 Zero

Waste

External
Procurement

Methanation

Mineralization

Waste

Liquid CO2Concrete waste,
Electric furnace slag,
Incineration ash, etc.

Calciner

Internal Use
Kiln

Other Companies,
City gas, etc.

Cement Raw Material,
Aggregate, Filler, etc.

Chemicals,
Food and Beverages,
Other Industries, etc.

Offset,Storage,etc.

14

（Reference） Technology Roadmap toward Carbon Neutrality
Development & Demonstration
Item

Deployment

2022

2025

2030

2040

2050

CO2 Reduction Technology

Energy-saving & Highly Efficient Equipment
EnergyDerived
CO2

Increase of Plastic Waste & Biomass Use

Production & Combustion of Carbon Free Fuel

Process
Derived
CO2

CCU
Technology

Environmental
Contribution,
OffsetWaste Derived Fuel
Ratio : 50%
Deployment

Low Carbon Cement & Concrete

Addition to
Product Line-up

Low Carbon Raw Material

Expansion of Use

CCU Technology & Process
Commercialization
Carbon Recycled ProductSupply of High-durable & Long-life ProductEvaluation Method of CO2 Uptake in Concrete

Consideration of CO2 Uptake Effect15

（Reference） Promotion of Global Warming Countermeasures (Top Priority 3)【TOPICS】 Technology development and demonstrationof energy conversion and CCU (under demonstration)
Methanation Technology

Mineralization Technology

A demonstration test of methanation technology is in progress.
CO2 is captured from cement kiln flue gas, and then reactedwith hydrogen to synthesize methane.
Methanation Test Facility

Mineralization technology and its usage are under development.
Calcium is extracted from concrete waste and others, and thenartificial calcium carbonate is generated by sequestering CO2.
(Japanese government’s Green innovation fund project)
Slag

Further
Application

Hydrogen

Incineration Ash

Extraction

③

①

CaO

RMC Sludge②

CO2
CaptureSteel Plant
Calcium
Sourcefrom
Waste

Reaction /Sequestration

Methanation

Garbage
Incineration Plant
RMC Plant

Concrete Waste

Indirect Carbonation
Direct Carbonation

CO2

Cement Plant④

Carbon Neutral
MethaneExisting
Line

Thermal Energy Derived
from Fossil Fuels (Coal,
etc.)

Concrete Waste
from Demolition

Rotary Kiln of Cement Plant(Source of CO2 emissions)
Artificial
Calcium Carbonate

Concrete Structure

Calcined Raw Material
High-grade Artificial
Calcium Carbonate
Particles

Carbon Recycled
CementArtificial
Calcium Carbonate
Admixture

MUCC’s Scope

CO2 Capture Test Equipment

Development of calcium extraction
from concrete waste anddirect CO2 absorption technology

Filler for Other Industries

16

（Reference） Promotion of Global Warming Countermeasures (Top Priority 3)【TOPICS】 Demonstration test of ammonia co-combustion in cement kilnSP

Non-fossil
Electricity

Ammonia,
HydrogenNon-fossil
Fuel
Synthetic
Methane•Decarbonization of fuel in cement kiln•

Ammonia is a prime candidate for a carbon free fuel

Waste

Calciner

1. Potential supplier is Shunan District (Yamaguchi), which is underKiln

a nationally supported study for establishing an ammonia supply center.
2. Started ammonia combustion study in kiln ahead of other companies.
3. National support is expected for energy conversion from coal to ammonia.

Fiscal Year

R&D Activity for Ammonia Combustion

2014 to 2018

Laboratory test performed (by former company, Ube Industries)

2021 to 2022

Small scale co-combustion test completed at Ube Cement Plant

at some point after 2023

Large scale co-combustion test planned at cement plant (target : 30%)

Early establishment of combustion technology
by implementing large scale co-combustion test17

④ Strengthening and Expansion of Domestic Value Chain

Environment and Energy
Business Strategy

VisionProfit generation by strengthening energy value chain at largest scale Ube Coal Center（expansion of alternative raw material and fuel use, biomass conversion of power station)

Business Strategy

Business Environment◼

Carbon neutrality acceleration
Consistently high price of fuelFade-out of coal fired power stations◼

Establishment and strengtheningof energy value chain
Exploration of affordable fuel (expansion of resources)

Priority Measures (establishment and strengthening of new energy value chain)
Current

Ube Coal Center◼
◼
◼

Ube Coal Center

Ube, Isa, Kanda
Cement Plant

1st STEP+ Kyushu Plant
Fuel cost reduction
Alternative Raw Material and Fuel
Biomass Fuel（BP : Black Pellet)

216MW Power Station(Biomass Ratio : 13%)

Black Pellet Business(60,000 tonnes/year)

Coal Customer

Feasibility Study for
Renewable Power Station and BP Business２nd STEP・ Largest Scale Renewable Power Station in Japan・ Overseas BP Production : 1 million tonnes/year
・ Blended Fuel Business of Coal and Biomass （BP, PKS）

18

④ Strengthening and Expansion of Domestic Value Chain

Mineral Resources
Business Strategy

VisionStable procurement of limestone, added value maximization and cost minimization
Business Environment◼

Gradual decline of domestic cement and RMC demand◼

Decline of domestic crude steel production and increase in worldwide automobile production
Aggregate and Sand

CalciaDemand decline due toshift from blast furnace
to electric furnace.

Material scarcity caused
by decrease in suppliers.

Fine Material
Steady demand for MOS-HIGE.
Demand growth for CS inelectronic devices industry.

Magnesia
Slight demand decline in power
sector and refractory industry.
Demand growth in glass industry.

Business Strategy （Limestone Supply Chain)
Limestone
QuarryRyokolime
Industry
Une Quarry

Isa Quarry

Tohokutekkosha
Nagasaka Quarry

Higashidani Quarry

Limestone

QuarryStrategy
Ube Material
Industries

Ube Material Industries
Strategy

Mineral ProductStrategy

Synergy

Ryokolime
Industry

Synergy

MUCC
Mineral Product BusinessDirectly AffiliatedAggregate and Sand
Fine Material
Automobile Manufacturer,
Electronic Parts Manufacturer

RMC Company

CalciaMagnesia
Refractory Material
Manufacturer

Cement Plant

Electric Power
Company

Steel
Manufacturer

Garbage
Incineration Plant

19

④ Strengthening and Expansion of Domestic Value Chain

Mineral Product Strategy

Quarry Strategy

Priority Measures◼

Mineral Resources
Business Strategy

Priority Measures

Optimization of organizational structure◼

for limestone mining

Maximization of synergy effect✓Transfer of sales and logistics function of◼

Introduction of new explosive （bulk emulsion）

Ube Material Industries’ limestone related◼

Stable procurement of silica stonebusiness to MUCC

（preparation for quarry development）

Ube Material Industries Strategy✓

Optimization of group-wide supply structure◼

Profit improvement ： Price rise and market development◼

Stable procurement of resource

Priority Measures◼

Price revision of magnesia and quicklime◼

Widening of magnesia use and development of market for quicklime◼

Development of market for fibrous magnesium oxysulfate (MOS-HIGE)
for automobile manufacturer◼

Supply capacity enhancement of ultra-high purity calcium carbonate (CS)for multi-layered ceramic capacitors◼

Strengthening of R&D management,
and improvement of technology and proposal skill by collaboration with customer

MOS-HIGE Particle20

④ Strengthening and Expansion of Domestic Value Chain

RMC Business Strategy

VisionFormation of business groupdriving domestic cement sales strategy and leading regional market development
to aim at enhancing business base and securing stable profitability
Business Environment◼

Business Strategy◼

Gradual decline of RMC demand

Organizational reform of directly affiliated（especially in regional areas）

RMC company and wholesaler◼

Labor scarcity◼

◼

Cost rise of raw material and transportation◼

Carbon neutrality acceleration

Regional market development
through alliance formation◼

Utilization of group company’s HR◼

Response to demand for low carbon productPriority Measures◼

Improvement of business base ｂy regional grouping◼

Enhancement and expansion of nation-wide core wholesaler(business integration of UBE Construction Materials and Mitsubishi Shoji Construction Materials)◼

Cooperation with RMC company and wholesaler by sharing grand design◼

Development and production of low carbon concrete, and development of low carbon product application

21

R&D Strategy⑤ Enhancement of R&D and Business Management
VisionEstablishment of unique technology by leading development capability
and new value creation toward business growth and sustainable society
R&D Direction◼
◼
◼

Business base enhancement： Measures against coal price hike, increase of plastic waste and biomass use
Growth strategy development ： Creation of carbon recycling business, new waste recycling business,
new building material and inorganic material business
Global environment preservation ： Measures toward decarbonization(increase of alternative fuel use, strategy development of low carbon cement production and sales)

R&D Strategy◼

Global environment preservation

HR Management◼ Increase in the number of R&D staff（shift to decarbonization and growth field）

Early development of CCU technology＋４０％◼

Rebuilding and enhancement of existing business
Improvement of profitability and productivity
by upgrading existing technology◼

New business creation（enhancement and expansion in growing business field）

Promotion of development and deploymentof unique technology and material

Globalenvironment
preservation

40%

４割
40%
30%

Rebuilding andenhancement ofexisting business

４割
40%

New businesscreation

20%
２割

30%

Current

2030 Vision（100 members）（１４０ members）

22

⑤ Enhancement of R&D and Business Management

HR Strategy

Vision◼ Embracing of diverse personnel and building of a good workplace◼ Improvement of group-wide effectiveness by strategic personnel relocation
Business Environment◼ Acceleration of labor scarcity caused by aging population and job mobility◼ Diversity of workstyle and workforce
Measures◼ Promotion of effective personnel relocation :Relocation to overseas business, R&D and group company
through improvement of work efficiency and mobility of personnel◼ HR development in specific field （DX, overseas business, etc.)◼ Shift to job-type employment system◼ Promotion of diversity and inclusion

23

DX Strategy⑤ Enhancement of R&D and Business Management
VisionEstablishment of competitive position, group-wide sustainable growth and new value creation
though utilization of digital technology and data, deployment of digital infrastructure

Business Environment◼ Development of AI and IoT Technology, transformation of business model, labor scarcity

Business Strategy (DX Roadmap)

Measures (Phase1 Plan)◼ Installation of task force team for DX promotion（development of strategy and workforce）
Development of DX promotion structure,◼ Improvement of business efficiency
Improvement and automation of business operation
by new supply chain system and visual control◼ Phase １

Demonstration toward new value creation◼ Phase ３
Creation of new business modeland corporate culture

Management
Strategy

Link

DX Strategy◼ Phase ２

New Supply Chain System

Synchronize

 Digital Infrastructure(Platform) Standardization
and Automation
EngageImplement HR Development for DX
24

（４） Investment Plan (FY2023 to 2025)
ConsolidatedGroup
Companies(Overseas)

Non-consolidated
Nonconsolidated

Total
158 billion yen

Total

81.5

52%

27.0

Others

熱エネ代替

36.7

Alternative
Fuel

19.6

39.8

25%

Group
Companies(Domestic)(billion yen)

Investment
and Financing

3.3

81.５ billion yen

23%
31.6
MaintenanceCash Flow
Operating Cash Flow
Investment Cash Flow
Free Cash FlowFY2023 to 2025
177
-158
19

* Investment for growth strategy will be considered accordingly.

Non-consolidated FY2023 to ２０25 FY２０23 to ２０30
Carbon Neutrality
Measures

28

≥ 70
25

（5） Business Plan
Assumption

FY2022 Forecast

FY2025 Plan

2030 Vision

Domestic Cement Demand

millionｔonnes

37.40

38.00

35.00

Cemend Demandin Southern California

millionshort tons

7.51

7.63

8.90

FOB Price of Thermal Coal

USD/tonne

403

370

370

Exchange Rate

JPY/USD

138

130

130

592
-28
-26
-53

710
39
39
21
5.5%
2.5%

930
75
75
45
8.0%
6.0%

Consolidated Management Indicator
Net Salesbillion yen

Operating Income

billion yen

Ordinary Income

billion yen

Net Income

billion yen

ROE

%

ROA

%

-

26

Cautionary Note

About the forward-looking statements
The plans, strategies, earnings forecasts and other statements contained in this document are
based on information available to the Company at the time of preparing the document. These

forecasts and projections contain uncertain factors such as the economic conditions
surrounding the Company, competitive environments, relevant laws and regulations, andexchange rates, and may be reversed if potential risks become apparent. Please note,
therefore, that actual business results, business environments and other factors in the future
may differ from those described in this document.

27