Furukawa Electric Group Sustainability Report 2014: Web version

Furukawa Electric celebrates its 130th Anniversary. Our success is thanks to the ongoing patronage and supportof our customers and shareholders, and we would like to take this opportunity to express our heartfelt
appreciation to them.
Our corporate philosophy is to contribute to the realization of a sustainable society based on expertise in thedevelopment and fabrication of advanced materials, through continuous technological innovation. Furukawa
Group's founder, Ichibei Furukawa, worked to build Japan with an aim of “making Japan brighter.” He made theutmost effort to introduce technology as quickly as possible from Europe and the U.S. that were way ahead ofJapan at that time and create world-class products.
We have inherited this mission from him and have a big sense of responsibility to make the world brighter.
Looking back on what we have done for 130 years, we would like to keep trying as a company making socialcontributions.

The Founder’s Philosophy
The Path of Our Founder
In 1884, 130 years ago, our company began smelting copper in Honjo, Tokyoand manufacturing electric wires in Takashimacho, Yokohama. This isregarded as the foundation of our company.
Ichibei Furukawa, the founder of Furukawa Group, was born in Kyoto in 1832.

Company logo/Yamaichi markHis natural ability in business helped him rise to a senior position at Ono Group, awealthy merchant group at that time. When Ono Group became bankrupt hebecame penniless. However, he received encouragement from acquaintancesuch as Eiichi Shibusawa and Munemitsu Mutsu, and in 1877 he began operating
the Ashio Copper Mine. He overcame several crises to help the mine become thelargest copper mine in Japan.
The Yamaichi logo, which is the Furukawa Electric company logo, was firstregistered in 1877 under the slogan Kogyo Sen-itsu (“Mining Above All”).
He introduced state-of-the-art Western technology to expand the company's

19Ichibei Furukawa

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industrial capacity, including the construction of Japan's first full-scale hydroelectric power plant in 1890, and built
the foundations for Furukawa Group.

The Founder's Philosophy
Ichibei set down a management philosophy - “Value people,” “Value customers and society” and “Incorporate thelatest technology” - and used his enthusiasm and his ability to get things done to open the way to a new era. In
today’s terms, his philosophy equates to fostering human resources who value health, safety and complianceand contributing to customers and society through the main business. This means we need to take on every
challenge we are faced with in order to achieve our goals. This approach has been handed down through thelong history of companies that have made up Furukawa Group, and our repeated efforts to value all people,
including customers and employees, at the same time as taking on new challenges without fear of failure, havecreated the companies we have today. This is also reflected in Furukawa Electric Group’s corporate philosophy:“Drawing on more than a century of expertise in the development and fabrication of advanced materials, we willcontribute to the realization of a sustainable society through continuous technological innovation.”
Ichibei left us with the memorable phrase Un-Don-Kon. He said that in order to achieve big things people need“Un” (good luck), “Don” (stubbornness), and “Kon” (perseverance). “Don” in particular refers to being stubbornly
honest in your work. In other words, this means refusing to accept other people’s opinions too easily; the morepeople think you are wrong, the more you need to carry out what you are doing with strong belief. Thisphilosophy can be clearly seen in Ichibei’s approach to his own life.

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Furukawa Electric Group Sustainability Report 2014: Web version

COLUMNSocial Contributions in Addition to Our Main Business
Since our foundation, Furukawa Electric has sought to contribute tosociety in ways other than just through our main business. For example,
to commemorate the visit of Emperor Taisho, and Empress Teimei tothe Nikko Works in September 1913, the Nikko Waraku-odori festival
has been held ever since 1914. The festival started out as a way ofrecognizing the hard work of the employees. However, it has continuedfor over 100 years and has now become an established feature of thelively summer festival season in Nikko and numerous local people takeNikko Waraku-odori in 1961

part.
Furukawa Electric is also active in sports, and in 1955 it named soccer, ice hockey, volleyball and rowing as theofficial company sports with the aim of improving employee morale and contributing to local society. Furukawa
Electric Soccer Club continues to this day as J-League team JEF Chiba.

Contributing to broadcasting infrastructure by installing the antenna on Tokyo Tower
Furukawa Electric installed the antenna on Tokyo Tower during its construction in1958. This led to the start of a fully-fledged age of television broadcasting. The
decade after 1955 was a time when Japan achieved rapid development throughstrong economic growth and recovery from World War II.
In 1964, the Tokyo Olympics were held. People were in exuberant spirits thanks
to the information they received via television. Living standards improved andJapan accelerated towards modernization. The Tokyo Tower antenna continues
to tower majestically over its surroundings and has made a significant mark on
Furukawa Electric’s broadcasting business.
Furukawa Electric's technology has continued to be used in later years, including
during installation of the antenna on the Tokyo Skytree.

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Developing and Expanding the Telecommunications Network in BangkokIn 1968, a plan was set out by Telephone Organization of Thailand operator toupgrade the telephone network in the metropolitan region of Bangkok.
Furukawa Electric succeeded in receiving the order for the project despite
competition from leading companies around the world. The project involved
installing 21 telephone exchanges and 122,500 terminals throughout the cityof Bangkok and was the largest project in the history of telecommunications
cable exports. What’s more, we accumulated know-how in relation to overseas Telecommunications Network inprojects and accelerated our business in developing countries.

BangkokPower Transmission Line Installation in IranThe biggest overseas projects Furukawa Electric has taken on was a large
order we received from the Iran organization for electric power affairs for theinstallation of power transmission lines. This was a huge project. During thefour years between signing the contract in 1978 and completion of the work in
1982 we overcame numerous difficulties and trials, including a revolution in
the Iranian political system and the chaos brought about by the Iran-Iraq War.
Moreover, the route for installation traversed paddy field zones, forest zones
and desert zones, and we had to cross the Alborz Mountains to the north ofPower Transmission Line
Installation in Iran

Tehran, which contains a series of mountains above 4,000 m.
The companies that were working together on the project finally managed to complete the installation of powertransmission lines with a total length of 449 km despite the harsh environmental conditions. The technologicalprowess of Furukawa Electric was highly regarded by the Iran organization for electric power affairs and theproject made a major contribution to our future overseas power transmission line installation projects.

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Contributing to the Construction and Development of Telecommunications
Infrastructure
Improvements in internet technology have made a large contribution to theglobalization of corporate activities and the safety of society, including crisis
management in times of disaster, as well as the collection of big data that
contributes to marketing, and improvements in convenience brought about bysmartphones.
Optical amplifiers

In the pioneering days of optical fibers, Furukawa Electric was the first company
in the world to produce long-distance optical fiber cables, opening the way to the realization of opticaltelecommunications infrastructure. In addition to optical fiber cables, Furukawa Electric has developed asuccession of peripheral technologies that are required to build infrastructure, including the optical amplifier
pumping lasers that are essential to longdistance telecommunications, frequency-division multiplexing that isnecessary to expand telecommunications capacity, improvements in installation efficiency and innovations inconnections technology. In this way, Furukawa Electric has supported to develop telecommunications
infrastructure with advanced technologies.

Contributing to the Safety and Ecology in Cars
SRC (Steering roll connectors) are a core component of airbag systems,
which protect passengers from impact during accidents. Furukawa Electric'sSRCs maintain reliable operational performance in vehicle conditions ranging
from below freezing in cold regions to above 50°C at the height of summer.

SRC (Steering roll connectors)

This reliability has been recognized in our top share of the global market.
There is a constant demand to make cars lighter. Furukawa Electric supports improvements in fuel efficiency andcomfortable driving by maintaining the reliability of wire harnesses, which have increasingly complicated signal
paths for vehicle computers, while achieving the required weight specifications by reducing every gram wherever
possible.

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Furukawa Electric Group Sustainability Report 2014: Web version

Contributing to the Discovery of the Higgs Boson through Superconductivity
Technology
In the 1960s Furukawa Electric worked on developing superconducting wires,and in the 1980s we became one of the world's few manufacturers of
low-temperature superconducting wires. Experiments to confirm the existenceof the Higgs boson at CERN in Europe (which has been referred to as the“discovery of the century”) required a huge superconducting magnet.
Furukawa Electric was presented with the Golden Hadron Award inrecognition of its efforts in supplying the huge volume of superconducting wires

Inside the Large Hadron Collider(LHC)

needed for this magnet.
Furukawa Electric is currently working on the development of thirdgeneration yttrium high-temperature
superconducting wires and cables, and in Shenyang, China in 2013 we succeeded in carrying out the equivalentof 30 years of current testing on superconducting cables capable of transmitting 275kV for 1,500,000 kVA, which
was the highest standard ever achieved in the world at the time.

Growth Strategies in the Telecommunications Infrastructure Market
Global telecommunications traffic is expected to continue increasing
dramatically, particularly in newly-emerging economies. Furukawa ElectricGroup is making full use of the optical fiber photonics technologies it has
accumulated in order to develop products capable of contributing to an increasein capacity.
Overseas, we are using single management at our global bases in order tocapture demand in growth markets efficiently. In Japan, we have reorganized
our production bases, established a supply system to match demand and promoted cost reductions.

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Furukawa Electric Group Sustainability Report 2014: Web version

Growth Strategies in the Energy Infrastructure Market
Over many years, Furukawa Electric Group has contributed to the construction of
the energy network. We intend to make full use of the know-how accumulated
during this time to handle burgeoning infrastructure demand, particularly in Asia,
while also contributing to the realization of a smart-grid society that uses energy
efficiently.
For example, we are promoting the development of high temperaturesuperconducting power cables, which make major reductions in transmission losses,
as well as products for use in various superconducting applications, such as coils.
High-temperature
super-conducting powercables

Growth Strategies in the Automotive Market
Furukawa Electric Group will utilize its unique materials technologies tocontribute to more environmentally-friendly cars, including through thedevelopment of lighter car parts and improvements in energy efficient, in orderto help realize a low-carbon society.
We will strengthen our sales and design capabilities at overseas bases,
expand our production bases, particularly in Southeast Asia and Central andSouth America, and expand the size of our trading area in overseas markets. Furthermore, we will strengthen ourprocurement function, and work to make thorough reductions in cost prices, including the cost of materials,
processing costs and fixed costs.

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