Q1 FY2016 Tokuyama Corporation Earnings Conference Call (July 29, 2016)
Q&A (Excerpts)
Participants:
Akihiro Hamada, Director, Managing Executive Officer, General Manager of the Financial Div.
Taro Kobayashi, General Manager, Corporate Communications & Investor Relations Dept.

1. Questions regarding solar-grade polycrystalline silicon
Q1: What are your thoughts on market conditions in the future?
A1: We are hearing talk of a resumption of operations in line with the improvement in market
conditions. We are thinking that might be a slight decline in spot prices from the summer. We
estimate that the average price will come in at around US$15/kg over the medium term.

Q2: Tokuyama Malaysia Sdn. Bhd. reported net sales of ¥4.0 billion for the 1Q of FY2016. Net sales
for the full fiscal year are projected to come in at ¥11.0 billion. Can we assume there is an
upside to this projection should production continue along current lines?
A2: We do not envisage encountering any problems with respect to sales. Should production
continue along current lines, we do see some potential for net sales to exceed forecasts.

2. Questions regarding the Chemicals businessQ3: Operating income remains steady at around ¥3.0 billion compared with the previous quarter.
Which products have shown the most improvement in earnings?
A3: A number of factors and products have contributed to earnings. In addition to the effects that
continue to emerge from an increase in the price of soda ash, profits from such petroleum
products as vinyl chloride monomers have benefitted from a drop in the price of naphtha, a raw
material. Another contributing factor is the reduction in costs attributable to the closure of thePVC Chiba Factory of Shin Dai-ichi Vinyl Corporation.

Q4: Can you sustain 1Q profit levels in the 2Q and beyond?
A4: We believe that profit margins will remain unchanged so long as trends in naphtha prices
continue along their recent path. Results for the 2Q and beyond are also not expected to differ
materially from budgets identified at the beginning of the period.

3. Questions regarding the Cement business
Q5: What factors contributed to the ¥0.7 billion year-on-year increase in earnings? What are yourthoughts on cement shipments in the future?
A5: The total volume of shipments increased thanks to the upswing in exports. Other contributing
factors include the decline in coal prices as well as distribution costs. As far as domestic
shipments are concerned, we are anticipating a weak trend in the 2Q. On a positive note, we areprojecting a modest recovery in the 2H.

Q6: It would appear that the operating margin has also has reached a fairly high level in the 1Q
compared with the previous period. Can we assume that this is because of the factors explainedin the Medium-Term Management Plan including cutbacks in distribution and other costs at
Tokuyama Factory?
A6: Our plans are to reduce costs at Tokuyama Factory by ¥4.0 billion through to FY2020. We
believe that a little more time will be required before we start to see the effects. In this instance,
the drop in coal and oil prices are contributing to the decline in costs.

4. Questions regarding the Life & Amenity business
Q7: Looking at progress during the 1Q, there would appear to be considerable upside with respect tofull fiscal year forecasts.
A7: Looking at conditions as they stand, we anticipate results will come in roughly in line withforecasts.

Q8: Can you elaborate on the overall status of microporous film operations?
A8: The production of microporous films is undertaken in Japan as well as Shanghai and Tianjin inChina. While sales in Japan are firm, volumes in China are experiencing slight difficulties.

5. Questions regarding finances
Q9: The Company’s cash currently stands at ¥130.0 billion. Can you provide details of future plan?
Is it safe to assume that the Company’s financial position allows it to repurchase preferred stockat any time?
A9: We plan to reduce interest-bearing debt, which currently stands at ¥238.0 billion, to ¥120.0billion by fiscal 2020. The cash we have in hand in earmarked for this purpose. Although notfactored into our plans, we are considering reducing interest-bearing debt in advance should

profit continue to remain steady. As far as the redemption of preferred stock is concerned, weintend to redeem the total amount of ¥20.0 billion in June 2019 in line with our Medium-Term
Management Plan. Redemption can be executed in lots of ¥5.0 billion. We will assess thepotential for the redemption of preferred stock totaling ¥5.0 billion or ¥10.0 billion should ourperformance remain on track throughout the current fiscal year and if we can hold together
current figures as of March 2017 for the following fiscal year.
Q10: Will Class A shares be transferred to C Class shares if the Company’s balance sheet improved
as of the end of March next year?
A10: We can exercise the option from the end of March 2018 and not next year. We will make adecision based on the amount of our net assets on a non-consolidated basis at that time. As ourfinances improve according to plans, we also intend to transfer A Class shares to C Class sharesat that time.