SPECIAL FEATURE

The LINTEC Global Network
LINTEC has been very active in globalizing its business in recent years and currently has plants and offices in19 countries and regions. “Strengthening of regional strategy” is a key initiative in the medium-term­business plan LIP-2019 as LINTEC strives to build up businesses in Japan and overseas. Below we outline thehistory of LINTEC’s overseas business expansion and profile the three companies in Europe and North
America that became subsidiaries in 2016.

Overseas Business History
In its endeavors to establish a label market in Japan, the Company sought to obtain information on advanced adhesive label technologies in Europe and the U.S. from an early stage in its history. “A-100 type” label printing machine the Company developed in1973 as part of its efforts to expand sales of adhesive products for labels attracted great attention from Europe, the U.S., and Asia.
LINTEC’s first overseas office was an office in Beijing that opened in 1985. In addition to cultivating label markets in China, theCompany commenced development of overseas business in window films for automobiles and buildings with the acquisition ofMADICO, INC. in the U.S. in 1987.
In 1994, LINTEC opened a sales office in Singapore to expand sales of semiconductor-related products. The following year thisoffice was incorporated as LINTEC SINGAPORE PRIVATE LIMITED and its business was extended to products such as adhesive
products for labels. It subsequently became the strategy center for sales network expansion in Southeast Asia.
On the manufacturing side, the Group’s first Asian adhesive products plant, PT. LINTEC INDONESIA, was also established in1994. Thereafter the product supply structure was strengthened by building plants in Malaysia, China, South Korea, and Taiwan
based on the concept of local production, which means that we manufacture closer to the customer and thereby provide our customers with a stable supply of products.
Following the establishment of a production base in Thailand in 2011, sales offices were set up in quick succession acrossSoutheast Asia and in India, and in January 2015 LINTEC ASIA PACIFIC was established in Singapore to oversee all sales bases in
the region.
In 2016, LINTEC secured a foothold for full-scale business development in the European and North American markets withthree acquisitions in the U.S. and the U.K.

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LINTEC ANNUAL REPORT 2017

Manufacturing subsidiary‌Sales subsidiary, OfficeHolding company, Regional headquarters
Plants, Branch offices, and R&D offices of subsidiaries

Overseas Sales / Overseas Sales Ratio
The Group’s overseas sales in the fiscal year ended March 31, 2017 were ¥77.8 billion, an increase of approximately ¥36 billion
compared with 10 years previously. The overseas sales ratio rose from 21.8% in the fiscal year ended March 31, 2007 to 37.8%.
It is expected to be close to 50% from the fiscal year ending March 31, 2018, as it will include the full-year consolidated contribution of the three companies converted to subsidiaries in the fiscal year ended March 31, 2017.
Performance trends

Overseas sales have increased approximately ¥36 billion
over the last 10 years with average annual growth of 6.4%.
Overseas

Overseas¥41.9 billion¥77.8 billion

FY2007
Net Sales¥

Approx.
1.9 times

192.7 billion

FY2017
Net Sales¥

206.0 billion
Fiscal year ended
March 31

Fiscal year endedMarch 31JapanJapan

21.8%

Ratio of overseas sales to net sales

37.8%

LINTEC ANNUAL REPORT 2017

17SPECIAL FEATURE

Focus
We profile the three 2016 acquisitions in the U.S. and the U.K. with comments from company representatives.

MACTAC AMERICAS, LLC
Adhesive materials manufacturer MACTAC has a solid position inNorth America, where the market is growing at a steady 2%–3%
annually and accounts for an approximately 30% share of the global
adhesive label materials market. Working with three manufacturingbases in the U.S. and Mexico, it has good relationships with its morethan 1,000 customers and possesses a long supply record andstrong brand. In addition to adhesive products for labels, MACTAC
handles decorative graphic sheets that can be used as wall hang-Head officeings and a variety of industrial and medical tapes. Its sales total
approximately ¥35 billion.
MACTAC complements LINTEC’s strengths in adhesive films with afocus on adhesive papers and excels in hot-melt adhesive formulation
technology that the LINTEC Group did not possess before. It also
brings high-speed coating facilities to the Group for the first time. The
company’s extensive sales network in North America will facilitate therollout of LINTEC products in this market, and by engaging in productdevelopment that combines the two companies’ technologies, LINTEC
will seek to grow business in other regions as well.

Columbus Plant

MACtac Americas, LLC
Head office: Ohio, U.S.A.
Established: 1959
Number of employees: 496(As of December 31, 2016)
Net sales: ¥34.2 billion
Operating income: ¥3.6 billion(Year ended December 31, 2016)
Acquisition price: Approx. $270 million(Debt assumption is not included)

Edward LaForge, President
The true strength of MACTAC comprises our employees, technology, and culture. The innovative
spirit and strong R&D team at MACTAC have led to unique technology solutions, including our hotmelt adhesive formulation. We believe combining LINTEC and MACTAC technologies will strengthen
our market positions, and we are confident that “our products,” including LINTEC’s, will extend theirglobal reach. What’s more, we hope to fuse our respective corporate cultures, technologies, andstrategies to generate the benefits of positive synergy early on, and contribute to the Group.

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LINTEC ANNUAL REPORT 2017

VDI, LLC
Based in the U.S. state of Kentucky, VDI is a manufacturer of functional films. The company uses metallizing technology, which forms
thin metal layers on film surfaces, to make metal vapor deposition
films and sputtering* films that it markets itself. As it is a supplier toMADICO, LINTEC’s window film manufacturing subsidiary in the U.S.,
there is potential for cost savings in materials procurement. The
LINTEC Group has not had metallizing technologies before and will be

VDI, LLC

using them in product development to roll out business in new fields.

Head office: Kentucky, U.S.A. Established: 1971
Number of employees: 36 (As of December 31, 2016)
Net sales: ¥1,070 million
Operating income: ¥20 million (Year ended December 31, 2016)
Acquisition price: $26 million (Debt assumption is not included)* Sputtering: The ejection of particles by bombarding materials such as metals and oxides athigh energies in a vacuum and the deposition of the particles on films and other surfaces.

David Bryant, President
We believe “Quality, Innovation, and Service” are three keys to our success. Producing quality
products generates satisfied customers; innovation allows us to serve many markets across theglobe; and excellent client service generates future business. We believe VDI and LINTEC have
many things in common, as manufacturers. We both are very active in the window film market
and look for new technologies to broaden opportunity. From now on, we at VDI, as a LINTEC family
member, will absorb various things and contribute to the family with better performances.

LINTEC GRAPHIC FILMS LIMITED
LINTEC GRAPHIC FILMS signed a trademark licensing agreementwith LINTEC in 2010, thereby adopting the Company’s name, and isthe U.K. sales company for adhesive products, with a focus on theCompany’s adhesive products for labels, graphic sheets, andwindow films. Its name will be changed to LINTEC EUROPE (UK)
LIMITED before the Group exhibits at the world’s largest label event,Labelexpo Europe 2017, in late September in Belgium. LINTEC will

Lintec Graphic Films Limited

be aiming to accelerate new customer acquisition in Europe byHead office: Buckinghamshire, U.K. Established: 1993Number of employees: 18 (As of October 31, 2016)
Net sales: ¥850 million
Operating income: ¥130 million (Year ended October 31, 2016)
Acquisition price: £7.3 million

making even more effective use than before of the company’s marketing strengths and wide-ranging sales network.

Andrew James Voss, Managing Director
LINTEC’s corporate culture is ethical, creative, and positive. The underlying culture of LINTEC
GRAPHIC FILMS, LINTEC’s business partner, is very similar to that of the LINTEC Group. Having
strengthened our ties with LINTEC EUROPE B.V. through our change of name, we will be aiming
to expand sales in Europe. It’s highly rewarding work. We will continue providing our customers
better products and services to help LINTEC become recognized in Europe as an innovation
leader.

LINTEC ANNUAL REPORT 201719