Introduction to Valqua Technology NewsNo. 40 Winter 2021

We wish you a Happy New Year of 2021.
I would like to express my sincere gratitude to all for reading Valqua Technology News.
Since the beginning of 2020, the business environment surrounding the entire world has undergone amajor change due to the spread of the COVID-19. In particular, the emphasis on social distancing has
promoted the development and introduction of ICT-related technologies for working remotely andlabor-saving business activities. However, in retrospect, this direction has already been thought out invarious ways from the perspective of improving efficiency, and even when the COVID-19 problem has
been solved, its value will not be inherently lost. The changes currently occurring should be viewed
as irreversible and we believe that these changes will continue in the future.

In order to respond to such business demands, all divisions related to technology development in ourcompany will further focus on the transformation into a H&S（Hardware & Service）company, which
we have been promoting since the mid-term plan two years ago, and on activities to develop highvalue-added technology solutions especially from the S（Service）perspective. Specifically, as stated in
the three-year mid-term management plan, "New Frontier 2022"（NF2022）, which was launched in
the current fiscal year, we will "further invest management resources in R&D," "accelerate thedevelopment process by utilizing open innovation," and "prepare next-generation R&D infrastructure”.
With these three strategies at the core of our NF2022 plan, we will strengthen our core businesses
from an H&S perspective and ambitiously expand into new business fields. We will work toward thegrowth objectives set out in NF2022 and toward the 100th anniversary of our founding in 2027, andcontinue to strive to become a "company of challenges that tackle the future and the unknown".
In relation to our background of the above, the current issue of Technology News, written with thecooperation by our customers, includes articles on our activities in flange tightening, technologicaldevelopment using external technologies, introduction of H&S-related products and our company’sproducts, as well as application examples. In order to provide our customers with safety and security
at their production sites, we are determined to work together with our customers to developtechnologies. We hope that you will read this article as an example of our R&D activities that lead tothe development of solutions that are not limited to our core competence of seal engineering, but also
consider the market needs associated with DX.
We hope you will continue to enjoy VALQUA Technology News as well as our products and services.
Senior Executive Officer, Director of Corporate Research and Development Group

Mutsuo Aoki
2

Winter 2021

The major changes in the environment that we are experiencing will also affect the perspectives andaction plans of businesses in the future, and it is expected that the demand for further labor-saving
and efficiency improvement will increase. Also, in order to respond to such demands, we have further
strengthened our recognition that it is extremely important to break away from the business model ofsimply providing hardware products to the market and shift to a business model that strives toprovide services that contribute to the "value creation（koto-zukuri）" for our customers.

No.40