July 31, 2015
Company name: Tokuyama Corporation
Representative name: Hiroshi Yokota,President and Representative Director(Code No. 4043, First Section TSE)
Contact: Taro Kobayashi, General Manager
Corporate Communications & Investor Relations Dept.
TEL: +81-3-6205-4832
Notice Concerning the Company’s Medium-Term Management Plan 2017
Tokuyama Corporation (hereafter referred to as “Tokuyama” or “the Company”) today announced detailsof its Medium-Term Management Plan 2017 that covers the three-year period from fiscal 2015, the fiscalyear ending March 31, 2016, to fiscal 2017, the fiscal year ending March 31, 2018. Brief details are presented
as follows.
1. Summary of the Previous Medium-Term Management Plan and Details of the New
Three-Year Medium-Term Management Plan 2017
Based on the key words “accelerating our growth strategies,” Tokuyama put in place a three-year plan in May
2012. Over the period of this plan, the Company has taken steps to establish a structure that is capable ofaccelerating the pace of growth, and to address pending issues. Despite promoting a variety ofgrowth-oriented strategies including efforts to expand the polycrystalline silicon business at Tokuyama
Malaysia Sdn. Bhd., as a principal component of the overarching goal to strengthen strategically growing
businesses, and to create new businesses, the results of these endeavors have fallen short of expectations.
Under these circumstances, Tokuyama has put in place the new three-year Medium-Term Management Plan
2017 under a new management structure, with the basic business operating policy of strengthening businessprofitability. Together with this basic policy, the Company will return to its existing businesses andreevaluate the potential of its latent competitive edge. This new plan focuses on customer-oriented growthand is positioned as the cornerstone of the Tokuyama Group’s revitalization. In specific terms, we will work
to increase productivity through the exhaustive use of assets including Tokuyama Factory and efforts tocontrol investments. At the same time, we will promote the reduction of costs, strive to generate a profit at
Tokuyama Malaysia Sdn. Bhd. and rebuild the Company’s financial platform while strengthening businessprofitability.
By steadfastly addressing the issues that have been identified as of the utmost priority under this plan, wewill revitalize the foundation of the Tokuyama Group and restore the trust of all stakeholders over thethree-year period of the plan.

2. Overview of the Plan
1) Period
April 1, 2015 to March 31, 2018
2) Issues of the utmost priority and relevant countermeasuresi. Strengthen business profitability■ Exhaustive use of assets• Strengthen the competitiveness of Tokuyama Factory• Shift from a focus on corporate R&D to R&D that is committed to each business• Streamline and relocate head office and back-office divisions■ Customer-oriented growth• Engage in product development that utilizes core technologies in each of the priority environment,
health care, and energy-saving fields• Expand business through marketing that includes alliances with other companies
ii. Generate profits at Tokuyama Malaysia Sdn. Bhd. by fiscal 2017
Establish a full-scale production structure in conjunction with periodic maintenance and repairs
scheduled for autumn this year and target profitability on a full fiscal 2017 basisiii. Rebuild the Company’s financial platform• Increase business profits by strengthening profitability at existing businesses and bring about aquick recovery in net assets by liquidating assets• Reduce interest-bearing debt
3) Targets for the final year of the plan
Net Sales¥335.0 billion

Operating Income¥34.0 billion

Operating Margin

10%

Interest-Bearing Debt

Reduce of ¥100.0 billion

4) Assumptions
Exchange Rate

¥115 / US$Domestic Naphtha Price¥46,000 /kl

Medium-Term
Management Plan 2017
1. Outline
2. Strengthen Business Profitability
3. Generate Profits at Tokuyama Malaysia
4. Rebuild the Company’s Financial Platform

1

1. Outline
Basic Policy of the Medium-Term Management Plan 2017

Adopt a customer-oriented approach in strengthening
the profitability of businesses, ensure that Tokuyama
Malaysia Sdn. Bhd. generates a profit and rebuild thefinancial platform thereby laying the foundation for therevitalization of the Tokuyama Group
Period: Fiscal 2015～2017(April 1, 2015 to March 31, 2018)2

1. Outline
Numerical Target (Consolidated)

3

Fiscal 2014 Results

Fiscal 2017 PlanNet sales¥302.0 billion¥335.0 billion

Operating income¥19.5 billion¥34.0 billion

Operating margin

6.5 %

10%

Interest-bearing debt

¥283.1 billion¥180.0 billion

Exchange rate (¥/$)

110

115

Domestic naphtha price (¥/kl)

63,50046,0001. Outline Issues of the utmost priority, relevant countermeasures and effects

+¥9.2
+¥8.0

Increase of operating incomebillion¥34.0 billion*billion

Generate Profits
at Tokuyama Malaysia

Fiscal 2017

＊Business risks arefactored into accountStrengthen
Business Profitability

Fiscal 2014¥19.5 billion

Full-scale production
Cost reduction

Liquidate assets

Customer-orientedgrowth

Rebuild the Company’s
Financial Platform

Exhaustive useof assets

Reduceinterest-bearing debt
Reduce4¥100.0 billion

1. Outline
Operating income by business segment (Fiscal 2017 plan)

Cement8.2
SpecialtyProducts(except forTokuyama Malaysia)

11.5

Chemicals

7.2(Billions of yen)Life &Amenity

Others

6.1

0.0

34.0

0.7
5.2

Businessrisks

4.4

5.1

TokuyamaMalaysia

3.7(4.3)
5

8.4

Fiscal 2014 Result

Fiscal 2017

2. Strengthen Business Profitability(1) Exhaustive Use of Assets
Strengthen Tokuyama Factory
Utilize port infrastructure
Optimize distribution
Bolster equipment technology

Promote exhaustive use and efforts
to strengthen assets in which the Company
maintains a competitive advantage
Increase production of polycrystalline
silicon for semiconductor use
Restart cement kiln operations

Transform research anddevelopment strategies

Rationalize and rebuild
operations to extend strengths

Consolidate the vinyl chloride resin business
Promote integration effects of the soda ash
and calcium chloride businesses

Streamline head office andback-office divisions

Make the most of precious,rare, and existing assets
6

2. Strengthen Business Profitability(2) Customer-oriented Growth
Adopt an uncompromising stance toward
other and alternative core technologies

Inorganic
Chemicals(fine)

Environment
Recycling waste gypsum
boards business
Infrastructure
maintenance business
Liquid hydrogen business

Utilize alliancesHealth Care

Microporous film
MEMS type gas sensor
Dental materials
Active pharmaceutical ingredients
Photochromic dye materials
for plastic lensOrganicChemicals(fine)

Energy-saving
High performance fumed silica
New heat sink materials
Plastic window sashes

Research and development that is committed to each business7

3. Generate Profits at Tokuyama Malaysia
Numerical Target

Tokuyama Malaysia(Billions of yen)

FY2014FY2015(forecast)

FY2017(plan)Net Sales

4.3

9.6

26.0

Operatingincome(4.3)(11.2)

3.7

Schedule going forward
FY2015PS
1Tokuyama Malaysia(Solar-grade polycrystalline silicon)

8FY2016

FY2017

Consider the promoting
effective use

PImplement cost reduction
S Establish a full-scale
structure after theand generate profits
2 production
periodic maintenance (Oct~) on a single month basis

Achieve profitable
operations for thefull period

4. Rebuild the Company’s Financial Platform(1) Financial platform rebuilding plan（Consolidated ）Shareholders' equity

Interest-bearing debt

D/E ratio

Net D/E ratio

237.3

1.74

249.2

241.1

(Billions of yen)

283.1

Interest-bearing debt reduction¥100.0 billion

240.7
229.6217.5
187.7

183.5

1.03

180.0

0.86
0.74

0.60
0.52

0.52
0.42

148.6

162.5

0.59

126.2
0.22

0.21

9

1.05

95.9

100.0

09/3

10/3

0.02

Recovery inshareholders’ equity

0.01

11/3

12/3

13/3

14/3

15/3

16/3
(Plan)

17/3(Plan)

18/3(Plan)

4. Rebuild the Company’s Financial Platform(2) Cash Flow Plan

（Consolidated ）Deterioration in market conditions
for polysilicon(Billions of yen)

60.0

Profit improvement, rebuild
the financial platform

40.0
20.0

0.0
(20.0)(40.0)
Operating CF
Investing CF
Free Cash Flow

(60.0)(80.0)
Proactive investment in thepolycrystalline silicon business(100.0)
08/3

10

09/3

10/3

11/3

12/3

13/3

14/3

15/3

16/3
(Plan)

17/3(Plan)

18/3(Plan)CAPEX (based on cash flow)

25.0

15.0

20.0

Depreciation

23.0

23.0

23.0