1Q FY2020 Tokuyama Corporation Investor Meeting
Q&A (Excerpts)

Date and time: July 28, 2020 (Tuesday) 12:00 – 13:00
Participants:
Hideo Sugimura, Director, Managing Executive Officer, General Manager, CorporatePlanning Div.
Taro Kobayashi, General Manager, Corporate Communications & Investor Relations Dept.

1.

Questions regarding 1Q (April – June) results and full fiscal year forecasts

Q1:

What impact has COVID-19 had on the 1Q?

A1:

At the start of the fiscal year under review, we projected that COVID-19 would have anegative impact on operating income of around ¥3.4 billion for the full fiscal year. For
the 1Q of Life & Amenity segment, dental material results were in line withprojections, and slightly negative for photochromic dye materials. Meanwhile, sales
volumes of cement did not decline as much as anticipated, while chemical sales werealso essentially in line with plans. With the low cost of coal, operating income was inaccordance with forecasts at the beginning of the period in overall terms. While wecontinue to anticipate an impact on sales volumes for the full fiscal year, we are notexpecting any major discrepancy from our profit projection at the start of the period
due to the low cost of raw materials and fuels.

Q2:

During the Company’s presentation in May, you explained that fixed and other costs
would increase around ¥10 billion year on year. How is this likely to progress?

A2:

Taking into consideration the annual increase in fixed and other costs of around ¥10billion, the upswing is projected to come in at roughly ¥2.5 billion each quarter.
However the increase in the 1Q was actually ¥0.8 billion. Maintenance and repairs
will go ahead as planned due in part to past efforts aimed at controlling repair work. In
the 1Q, depreciation expenses climbed just ¥0.2 billion compared with thecorresponding period of the previous fiscal year. While investments will gradually
increase toward the 2H, we will carefully monitor conditions prior to implementation
after taking into account the impact of COVID-19. R&D expenses will proceeded asplanned. As far as overhead expenses are concerned, the introduction oftelecommuting helped cut back travel and transportation as well as entertainment
expenses in 1Q. As a result, selling, general and administrative expenses decline byaround ¥0.3 billion. We expect this trend will continue.

Q3:

What is the nature of improvements in non-operating income/expenses?

A3:

Tokuyama posted a provision for decommissioning and removal of ¥0.5 billion as a
non-operating expense while incurring a foreign exchange loss of more than ¥0.2
billion in the previous fiscal year. There have been no such expenses or losses to datein the current fiscal year.

2.

Questions regarding the status of business segments

Q4:

What is the status of domestic sales of cement?

A4:

The market in Hiroshima is firm on the back of large-scale project and reconstruction
demand. Demand in Nagoya is also good. While we had the drop in Tokyo, logistics
demand is improving in overall terms.

Q5:

Such topics as the delay in the development of advanced products have attracted
widespread interest following the announcement of Intel’s financial results. Has thishad an impact on the Company? Are you also considering investing in the U.S. as apart of your IC chemical busines activities?

A5:

While we do not expect any major impact in the short term, in the event that businessis polarized between Asia and the U.S. with construction of a large plant in North
America, we may collaborate with partners to establish a base in the region as well.
Given the low cost of renewable energy in North America, we recognize the need toconsider investment as a part of our business expansion endeavors.

Q6:

How should we view the Life & Amenity segment from the 2Q?

A6:

Sales volumes of photochromic dye materials are returning to previous levels fromJuly. With signs of a recovery in the 2Q, we are looking at a positive turnaroundtoward the 2H. While adopting an extremely conservative approach toward forecasts
for dental materials at the start of the fiscal year, we are expecting to see a gradual
recovery toward the 2H. The impact of COVID-19 on Excel Shanon Corporation andSun・Tox Co., Ltd. has been greater than initially anticipated.

3.

Questions regarding the status of products

Q7:

How is the domestic market for caustic soda? What are your thoughts on sales
volumes and market conditions from the 2Q? Will you increase exports?

A7:

We have been able to maintain domestic selling prices, and expect prices to remain at
the same level from the 2Q. Even if domestic volumes decline slightly, we will

respond by boosting exports. Should the impact of COVID-19 dissipate and domestic
sales volumes recover, we will promote sales in Japan. In the event that market
conditions improve overseas, we anticipate this will contribute to an increase in profit.

Q8:

How does the polycrystalline silicon business compare to the corresponding period of
the previous fiscal year and to your initial forecasts?

A8:

Sales volumes in 1Q were up roughly 10% year on year and are in line with plans.

Q9:

How will sales volumes of electricity change from the 2Q?

A9:

We do not expect any significant changes from the forecast made at the beginning of
the period.

4.

Question regarding coal-fired power generation

Q10:

What are your thoughts on the minister’s comment that inefficient coal-fired power
will steadily fade out?

A10:

We recognize that there are significant implications for the Company. While weanticipate further deliberations will continue toward the end of the year, we will lookclosely at whether all power producers will be subject to the closure coal-fired power
plants. In this instance, I believe that the policy was issued with the goal of reducing
CO2 emissions in mind. Accordingly, we recognize that conditions will become
increasingly harsh. As Tokuyama is comprised of energy-intensive businesses, we will
work toward building a business structure that is less reliant on energy.