Note: This document is a translated version of the Japanese original. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail.

Taiheiyo Cement announces significant return to profitability in operating profit, ordinary profit, andquarterly net profit in H1 due to domestic cement price revision and strong performance of U.S. business.
The following is a transcription of Taiheiyo Cement Corporation's financial results presentation for the fiscal
year ended September 30, 2023, which was given on November 10, 2023.
[Speakers]
Masafumi Fushihara, President and Representative Director, Taiheiyo Cement Corporation
Masahiro Ban, Managing Executive Officer, Taiheiyo Cement Corporation
Naoyuki Kira, Managing Executive Officer, Senior General Manager of Cement Business
Division and General Manager of Sales Department Cement Business Division, Taiheiyo Cement
Corporation
Masao Osumi, General Manager of Business Development Department, International Business
Division, Taiheiyo Cement Corporation

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Tomonori Yamamoto, General Manager of Corporate Planning Department, Taiheiyo Cement Corporation
Hiroshi Onoue, General Manager of Accounting & Finance Department, Taiheiyo Cement Corporation
Masafumi Fushihara: I am Masafumi Fushihara. On November 9, we announced our H1 financial results andoutlook for the current fiscal year.
Regarding the financial results, we feel that the operating profit for H1 was small. Domestic volume has dropped,
as you all know, due to various problems at our plants in H1. For example, the EP explosion at the Kamiiso
plant and the fire in the belt conveyor at the Ofunato plant, among other troubles at various plants, caused thekilns to shut down, resulting in a slight negative operating profit.
Since September, the operation has fortunately been very stable. If we can achieve stable operations, we expect
to see reasonable figures in H2.
Domestic demand for cement ended H1 with a 6.5% decrease compared to last year. This is expected to continue
in H2, down about 3% from last year. Domestic demand in H2 of last year deteriorated very badly in January,
February and March, and was lower than during the COVID-19 pandemic, the year before last. This year,
demand is expected to be even worse than last year.
In previous years, we saw slightly more cement shipments in H2, with 46% to 47% in H1 and 52% to 53% in
H2. Last year, however, shipments declined in H2, as shipments in H1 and H2 were almost the same. We expect
shipments in H2 to be slightly lower than last year, and forecast domestic demand for cement at 35.5 million
tons for the current fiscal year.
Although there were various construction projects in H1, they were affected by the long rains in June and otherfactors. Traditionally, the general contractor would make up for such rain delays by the next month or two, but
now it is not possible to do so at all, and the period is extended by the amount of the delay.
The labor shortage on the part of general contractors cannot be resolved overnight, and this situation willcontinue for some time. Therefore, considering Japan's current construction capacity, we can only handle 35
million to 36 million tons of cement consumption in terms of volume.
For example, a very large construction project has begun on Mageshima Island in Kagoshima, Japan, and humanresources are currently being assembled. This would make it impossible to work in other areas of Kyushu. The
number of human resources will increase in Mageshima, but not in Kyushu as a whole. Construction of a large
semiconductor plant will begin in Sapporo. Then, similarly, the situation is becoming busy in the Sapporo area,
but there are no contractors in the other districts of Hokkaido.
It is said that the construction capacity of Japan as a whole may be 35 million to 36 million tons in terms of
cement volume. In this context, we think the challenges will be how to think about the future of the cementbusiness in Japan and how to establish a production system.
We are currently working on a new mid-term business plan that will begin in 2024. Until now, our policy has
been to look 10 years ahead and work on three medium-term management plans in the meantime. However,times will change too much in 10 years, so this time we are preparing a medium-term management plan with aview to what TAIHEIYO CEMENT will be like in 2030. We are currently engaged in various discussions, but
the major proposition is that we strive for sustainable growth..
As for where to grow, we would like to discuss such issues as, if the domestic cement volume is going to plateau
at 35 million to 36 million tons, how we should work on our overseas business.
With regard to its domestic operations, Mitsubishi UBE Cement Corporation is undertaking a specific review
of its production structure, including the shutdown of its Aomori plant and the shutdown of one of its kilns at2

its Isa plant. On the other hand, TAIHEIYO CEMENT has been criticized for not reviewing its production
system, even though demand has dropped so much.
The future, however, is still unclear. Specifically, some companies, such as Denka Company Limited, areconsidering withdrawing from the cement business and want to outsource waste disposal to Myojo Cement Co.,
Ltd. However, until we have a clear idea of what we will do with our domestic business in the future, we would
like to maintain our current production capacity. When it comes to maintaining production capacity, we haveto lower our costs or we will cause problems for our shareholders, so we are working on that.
We would like to maintain our production capacity, as we will have to increase production by 1 million tons at
our northern plant in the year after next, in order to accept Denka's current 1 million tons. In the meantime,other companies in the same industry may want to withdraw or outsource to an OEM, so we would like tomaintain the current structure until it becomes clear .
The year 2023 is said to mark approximately 150 years since cement was first manufactured in Japan. Since wewere the first private company in Japan to make a ton of cement, we believe we have an obligation to supply
the country with the cement it needs. Until we have a clear direction for the future, we would like to maintainthe current form. I do not think it will take a long time, and we would like to create a system so that we do nothave a situation where "there is not enough cement in Japan and we cannot supply it."
Although we are experiencing very difficult conditions in Japan this fiscal year, fortunately our business in the
US is progressing well. There was a concern that the housing starts rate would fall as interest rates rose, but infact, the housing starts rate did not fall that much.
In 2021, President Biden passed a nearly USD1 trillion infrastructure investment bill through Congress, andinvestments under that bill began to be implemented in 2023. Since its investment targets include highway
repairs, our sites on the West Coast of the US are also making good progress with no drop in shipments.
In the current fiscal year, conditions were very difficult from January to March due to the rain, but from April
onward, we made up the negative amount from January to March. Shipments are growing steadily at this timethrough December. As for price increases, we are doing very well in the US, with flexible price increases for
cement, ready-mixed concrete, and aggregates.
Meanwhile, in the Philippines, we are renewing our factory. Until now, we have been grinding imported clinker
and shipping it out, which has been very unprofitable, but we plan to begin production in May 2024 in state-ofthe-art, energy-efficient kilns. If we also work on the production of mixed cement, production could nearly
double. In addition to the current area, a terminal site has been acquired on Luzon Island, where the capital,
Manila, is located, and construction will begin. We are now building such a system.
In addition, as you know, Vietnam has cement production and supply capacity that is more than twice thedemand. With domestic politics slightly unstable and construction of various projects slow to start, the price of
cement is rising, and for the time being, there is excessive competition. However, since we can export from
Vietnam to the US, our system is focused on exports for the time being, until the situation in Vietnam settles
down.
In Indonesia, the business alliance with Semen Indonesia is progressing very well. Currently, Semen Indonesia's
plant supplies us with approximately 1 million tons of clinker and cement, which we are able to ship to Australia
and other countries. In addition, a pier currently under construction is scheduled for completion in 2024. From
there, I believe that our company's vision of logistics within the Pacific Rim will steadily begin to run.
Regarding our overseas business, while it is important to create new bases, we would like to gain a market shareof more than 10% in the Philippines and Vietnam. Currently, our market share is between 6% and 7%, but I
believe that if we take more than 10%, we will have a greater voice in the industry in that country.

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We need to establish bases in new countries one after another, but for the time being, we are working to establish
a structure in those two countries and to become an important cement company in those countries.
As for the US, we believe it would be tough to acquire another factory in the current area due to antitrust issues.
However, there are other possibilities in the US, such as Texas, and there is room for expansion if there areinquiries in those areas. We would like to work with this in mind.
As we move forward with the next medium-term management plan, the most important thing is our pricing
policy. The JPY5,000 price increase was completed at the end of September, but this price increase was inresponse to the rising cost of coal. We are now beginning to discuss the original pricing policy, such as, what
operating margin cement prices must generate when coal prices have settled down.
As you all know, the major investments we will be making in Japan are quarry development, strengthening
plant facilities, and carbon neutrality. These are all about investing in cement plants or mines in the area. In
other words, it is the same as investing in a domestic cement business.
Therefore, the huge investment should not originally be recovered through overseas business profits, but rather
through the domestic cement, mineral resources, and environmental businesses. We would like to discussinternally how prices should be, including such matters.
Now is not the time to be saying how our competitors are doing. We must change our way of thinking from theold days, when volumes increased every year. We would like to discuss in such a direction and announce thenext mid-term management plan and the one after that, well into 2030.
I would like to answer many questions during the Q&A session.

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Highlights of Consolidated Financial Results

Masahiro Ban: I would like to explain the financial results for the first six months of FY2024 (ending March
2024) and the forecast for FY2024.
Financial highlights. Net sales totaled approximately JPY418.5 billion, up JPY42.5 billion from the same period
last year.
Operating profit was JPY17.7 billion, an improvement of JPY18 billion from the same period last year.
Ordinary profit was JPY20.1 billion, an improvement of JPY20.1 billion from the same period last year. Profit
attributable to owners of parent was JPY13.6 billion, an improvement of JPY30 billion from the same period
last year.

5Consolidated Segment Information

Segment information is explained below. In the cement segment, domestic cement sales volume was 6,486,000
tons, down 79,000 tons from the same period last year. Export volume was 1,232,000 tons, down 187,000 tons
from the same period last year. The average exchange rate was JPY135, a depreciation of JPY11.90.
Domestic cement sales increased JPY20.3 billion YoY to JPY144.2 billion. Although domestic cement andexport cement volumes declined, the price differential in domestic cement and soil stabilizers was up JPY22.4
billion YoY.
Net sales of overseas subsidiaries, etc. increased by USD175 million YoY in the US, mainly due to higher
selling prices of cement and ready-mixed concrete, despite the impact of heavy rains in Q1. Sales in China
declined because the Company has already ceased operations in Jiangnan and Dalian.
The impact of foreign exchange and other factors was positive JPY12.6 billion compared with the same periodof the previous year. Sales in the cement business, including domestic business and overseas subsidiaries,
totaled JPY298.3 billion, up JPY45.5 billion from the same period last year.
Next is the operating profit of the cement business in Japan. Price difference in domestic cement and soil
stabilizers was positive JPY20.7 billion versus the same period last year, while our variable costs had a negative
impact of JPY8.3 billion versus the same period last year. Solid fuel prices are down about USD90 on C&F
terms on a purchased basis, but slightly up on a paid-out basis. Other raw material costs, electricity costs, andpurchase costs are also up. In the domestic cement business total, operating profit improved by JPY11.4 billion
YoY to minus JPY6 billion.

6In overseas subsidiaries, etc., operating profit increased by JPY3.7 billion from the same period of the previous
year, mainly due to increased income in the US and the effect of foreign exchange rates. Overall, operating
profit in the cement segment improved by JPY15.2 billion from the same period last year to JPY7.8 billion.

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Consolidated Segment Information/Reportable Segments (Excluding Cement Business) and Other

Non-cement segment. In the mineral resources segment, the aggregate sales business in the Hokkaido, Kansai,
and Chubu regions performed well. In addition, the shift of various cost increases to selling prices penetrated,
resulting in a net sales increase of JPY3.1 billion and an operating profit increase of JPY1.3 billion.
In the environmental segment, net sales were JPY32.5 billion, down JPY6.9 billion from the same period lastyear, due to a decrease in fuel sales. On the other hand, gypsum sales, which are more profitable than fuel,remained strong, and operating profit increased JPY188 million YoY to JPY3 billion.
In the construction materials segment, both sales and operating profit increased due to favorable ground
improvement projects and the optimization of selling prices for ALC (Autoclaved Lightweight Concrete) andconstruction materials. Net sales were JPY34.1 billion and operating profit was JPY1.8 billion.
In other businesses, both sales and operating profit declined due to a reactionary drop in the engineeringbusiness from the previous year's large construction projects, and higher fuel and other costs in the power
generation business.

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Consolidated Statements of Income (Items below Operating Profit)

The table on the slide shows the items under operating profit. Regarding non-operating income and expenses,
non-operating income increased by JPY3.3 billion and non-operating expenses increased by JPY1.2 billion. As
a result of this, non-operating income and expenses increased by JPY2.1 billion from the same period of theprevious year.
Non-operating income includes foreign exchange gains. This is mainly due to exchange rate differences
between the time of recording and the time of payment related to coal purchases. Although the yen has been
weakening this fiscal year, the exchange rate has been volatile in the short term, which was a positive factor.
Non-operating expenses were affected by an increase in interest expenses due to the average balance of interestbearing debt.
In the previous fiscal year, income taxes of JPY14.5 billion were incurred despite the loss before income taxes.
This was due to a JPY10.2 billion reversal of deferred tax assets. Finally, profit attributable to owners of parent
was JPY13.6 billion, a JPY30 billion improvement over the same period last year.

9Consolidated Balance Sheets

For the consolidated balance sheet, only the main increase/decrease items will be explained. See total assets on
the bottom left of the slide. Total assets at the end of the current period amounted to JPY1,332.6 billion, an
increase of JPY63.7 billion from the end of the previous period. The increase is mainly due to the change in theexchange rate at the end of the period, as shown in the lower left-hand corner of the slide. Assets increased byabout JPY36 billion due to a yen depreciation of JPY12.29 to JPY144.99.
The increase in current assets was due to an increase in trade receivables resulting from higher domestic cement
prices, as well as the effect of bank holidays.
The main reason for the increase in non-current assets is that Taiheiyo Cement Philippines, Inc. is currently
undergoing renovation work. Non-current assets increased due to funds stored in construction in progress forthis project.
Total liabilities at the top right of the slide were JPY763.5 billion, an increase of JPY23.5 billion from the endof the previous period. This also includes a positive impact of about JPY10 billion from foreign exchange rates.
Another major factor is the impact of bank holidays.
Interest-bearing debt was JPY388.5 billion, a decrease of JPY14.9 billion from the end of the previous period,
as shown in the lower right-hand corner of the slide. This was due to a decrease in interest-bearing debt resulting
from improved operating cash flow.

10The JPY40.2 billion increase in net assets was due to net profit for the quarter, a JPY26.9 billion increase inforeign currency translation adjustments resulting from the weaker yen, and a JPY2.2 billion increase inunrealized gains on available-for-sale securities due to higher stock prices.

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Consolidated Statements of Cash Flows

Statement of cash flows. Operating cash flow improved by JPY69.3 billion from the same period last year due
to an improvement in profit before income taxes and a decrease in inventories. As a result, operating cash flow
was positive JPY54.3 billion.

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Forecast for the Fiscal 2024 Consolidated Statements of Income

Forecasts for FY2024. I will now explain the revisions since the announcement at the May financial results .
Operating profit and profit attributable to owners of parent remain unchanged from the May forecast. On theother hand, the sales forecast was revised downward from JPY920 billion to JPY894 billion, a decrease of
JPY26 billion from the previous forecast. The ordinary profit forecast has been revised upward from JPY56
billion to JPY59 billion, an increase of JPY3 billion.
At the bottom of the table on the slide is the domestic demand for cement. The forecast has been revised
downward by 2.5 million tons from the previous forecast of 38 million tons to 35.5 million tons.

13Forecast for the Fiscal 2024 Consolidated Segment Information

Here you see a comparison of the previous forecast and the current forecast. This is a breakdown of the figures
on a consolidated basis on “Notice Regarding the Revision of Financial Results Forecasts for the Fiscal YearEnding March 31, 2024”. In the cement segment sales, the domestic cement sales forecast is down JPY17
billion from the previous forecast. This is mainly due to a decrease in sales volume of cement and soil stabilizers.
The JPY8 billion increase in the sales forecast for overseas subsidiaries, etc. is due to higher sales in the US
business resulting from higher selling prices of cement and ready-mixed concrete, and the effect of foreignexchange rates due to the yen's depreciation.
The operating profit forecast for domestic cement is JPY0.5 billion, a decrease of JPY6.8 billion from theprevious forecast, but this is also mainly due to a decrease in the sales volume of cement and soil stabilizers.
As a result, high inventories of solid fuel will remain in H2, and production costs have not come down as muchas expected.
The revised forecast for overseas subsidiaries is also due to higher earnings from the US business and the effectof foreign exchange rates. Although the total amount of operating profit remains unchanged, the forecast is fora decrease in domestic cement volume offset by an increase in income in the US and an increase in income
from higher prices at the construction materials subsidiary.

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Reference Information

The following slides are for reference only, please see later for details. That is all for my explanation.

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Question & Answer

Q&A: Initiatives to improve performance in the domestic cement businessParticipant: My question is about the domestic cement business. I expect your performance to improve in thenext fiscal year as coal prices come down.
However, in addition to the improvement in business performance due to coal prices, President Fushihara
mentioned earlier something with a nuance of "making structural reforms." In the domestic cement business,
what is the first thing you need to work on?
Respondent: As you mentioned, coal prices will settle down next year. I also believe that shipments will not
grow significantly and will enter a period of stability.
In this context, Denka's cement sales business will be conducted with our products the year after next. That
volume is approximately 1 million tons per year. We will take over this 1 million tons in the summer of 2025,
including users. For the time being, there will be some handover of technology, etc., but we hope to make thisa smooth process. In addition, the price was revised this time due to the rising price of coal. We intend to
consider a pricing policy in the next mid-term management plan that will enable us to pass on cost increases ina short term.
Participant: With respect to Denka's portion, will it contribute to sales, earnings, etc. in 2025?
Respondent: We have already recorded the sales, but the manufacturing is being done by Denka. We outsource
manufacturing to Denka. Therefore, after the end of cement production at Denka's plant around the summer of2025, we hope it to smoothly transition to our manufactured products.
Q&A: Asian market situation and risks in the Philippines
Participant: This is about overseas demand. I understand that the US is strong, but in Asian markets, such as
China and Vietnam, the situation is difficult. Are there any risks in the Philippines under such circumstances?
Will the start-up of a renewed factory in the Philippines in 2024 contribute to earnings?
Respondent: As you say, the slowdown in China has had an impact. It is difficult to raise prices in thePhilippines, as cement that used to flow to China is now flowing to Asian markets.
However, with the completion of the kiln renewal in May 2024, competitiveness is also expected to improvesignificantly. With regard to the Philippines, the economic fundamentals themselves are not bad. There is also
the view that President Marcos' "Build Better More" initiative will give a significant boost to infrastructure
investment next year.
In such a macro environment, we believe that we can compete adequately in kiln renewal through cost,competitiveness, utilization of waste, and inland logistics using tankers, etc.
Participant: There are risks in the external environment, but if your company works on this properly, would
this contribute to profitability?
Respondent: You are correct.
Q&A: Share buybacks
Participant: This is about share buybacks. Your company has announced that it will repurchase about JPY5
billion of its own shares. Since the Company's performance is still recovering in the current fiscal year, I thought16

it would not be until next year that you would repurchase your own shares. What is the reason for taking thisstep at this time?
Respondent: I never dreamed that you would be surprised by our share buyback plan, as I thought that you had
already factored it in.
The Company basically follows a policy of stable and continuous shareholder returns. It was difficult last year,
but cash flow is recovering this fiscal year.
Our policy has been to return at least 33% to our shareholders. On a single-year basis, it is about 33% to 34%
combined with dividends.
Share buybacks can be difficult depending on whether or not there is a disclosure case, and if postponed, may
not be possible during the period. Therefore, we thought this was the best time to conduct it.
Q&A: Response to the 2024 problem
Participant: I would like to talk about the "firm pricing policy" as reported in the cement newspaper in
September.
Due to the 2024 problem, logistics will be very difficult. As a result, ready-mixed concrete manufacturers haveannounced price increases starting next April. As a cement manufacturer, how does your company view thistransportation cost push and how will you pass it on?
Please tell us whether you are considering price shifting and medium- to long-term pricing policy as a set, or
whether it will be done as a short-term response in the next fiscal year, within the context of the pricing policythat should be in place.
Respondent: As you say, cost related to logistics is also a push factor. However, I believe there will be
investment costs for carbon neutrality in the future, and there is also the issue of raw fuel costs, as in the current
period. Therefore, we will consider whether it is better to pass on those costs one by one or whether a combined
surcharge of some sort is better.
We would like to come up with a fair and transparent pricing policy that is acceptable to our customers.
Q&A: Shareholder Return Policy
Participant: This question is also related to the next mid-term management plan. Earlier, the president
mentioned that shareholder returns should be stable.
The total return ratio was 30% in the previous medium-term management plan and has increased slightly to
33% in the current medium-term management plan. However, other companies in the same industry announced
a total return ratio of 50% or more a year ago.
I'm sure there are different ways to think about it, but with 40% to 50% being the norm when it comes to total
return ratios, can we expect your company's shareholder return policy to jump up, unlike in the past?
Or should we take it as "TAIHEIYO CEMENT has a base of thinking that 'shareholder returns should bestable'?"Respondent: The 33% total return ratio means one-third. This, however, includes dividends and sharebuybacks, and what we need to consider is what to do about them in the future.

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A company needs to consider not only its shareholders but also its employees. Local economies and otherfactors are also very important, as equipment industries such as cement can only operate if they are allowed to
dig in the country's land.
In such a balance, when considering how best to return profits to shareholders, the best thing to do is to increase
the denominator. For example, rather than raising the total return ratio from 30% to 50% with a profit of only
JPY10 billion, a profit of JPY100 billion would naturally result in a larger dividend at the same ratio.
Therefore, in order to enhance shareholder returns, we believe that the denominator needs to be as large as
possible, so we are placing more weight on that side. However, the total return ratio cannot be less than onethird. We would also like to proceed with flexibility, as the era of a 50% total return ratio may be coming.
We do not believe that a total return ratio of 30% is sufficient, but we are looking at how far we can raise it
while keeping an eye on the balance.
As a way to do this, we will continue to buy back our own shares because we have a large number of shares
outstanding. We will discuss whether to proceed to a certain point or focus on increasing dividends.
Q&A: Performance of US Operations
Participant: Regarding the overseas business, I was surprised by the weak US demand in Q1, but even more
surprised by the large profit in Q2.
You mentioned that Q1 was weak due to weather factors. Regarding the situation in Q2, how did the sales
volume change when divided into cement and ready-mixed concrete? You mentioned that the price increase
has relatively progressed, but could you please explain to what extent it was?
Respondent: As you know, the US is very rainy from January to March. However, shipments recovered
steadily from April onward as the weather recovered.
One of the reasons for the recovery in shipments is the penetration of price increases in cement and readymixed concrete. This is probably true for the industry as a whole. In addition, import costs have come down
due to the stabilization of freights and other factors.
In addition, the price of natural gas was very high from January to March due to the cold weather, but this has
calmed down, resulting in lower energy costs linked to electricity costs. We understand that these factors
contributed very significantly.
In CPC, there is a slight influence of inflation and other factors, so volume growth has not been that great.
However, in cement and ready-mixed concrete, the recovery has been helped by the very good penetration ofprice increases, especially in ready-mixed concrete.
Also, from CPC's own perspective, we acquired the Redding plant as well as 14 ready-mixed concrete plants
last June. This was another factor that contributed significantly to profits.
Regarding your question about the progress of the price increase, the pattern in the US is to announce the priceincrease around October and implement it starting in March or April. This time, however, the price increase
was implemented slightly earlier, around March.
Specific figures vary from region to region, but a rough estimate is that we have proposed a price increase of atleast 10% of the current price, which has been accepted.
Participant: Does that mean a price increase of about 10% for both cement and ready-mixed concrete?

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Respondent: That is correct. I think the price increase for ready-mixed concrete is slightly larger, but I think
you can generally understand it that way.
Participant: You mentioned that import costs have come down. Does that mean that costs have come downwith regard to cement that is transported from Asia and sold in the US?
Respondent: As you point out, that also has an impact.
Participant: So, that is also contributing to margin expansion and profit improvement? Also, taking into
account that natural gas prices have dropped, is it your view that there is continuity in this situation and that it
will continue to some extent in the future?
Respondent: You are correct. However, high interest rates have led to a slight decrease in residential
construction in some areas and slight delays in some projects. However, from what we hear locally, there is notthat much of a slowdown.
The local view is also that there will be a slight impact on demand, such as a decrease in housing this year andnext, but it will return in H2 next year or by the end of 2025. In addition, we believe that we will continue totake the stance of passing on higher costs to customers.
Q&A: Impact of coal prices on domestic cement businessParticipant: With regard to the domestic cement business, you explained that although coal prices have beenfalling, cement sales have been sluggish, so there is still relatively high unit price coal remaining. Whatassumptions do you expect regarding coal prices on a disbursement basis and on a purchase basis in H2?
I see the spot price for Australian coal at USD130. Please tell us, to the extent possible, what assumptions you
are making in comparison to such prices.
Respondent: The purchase price of coal has been considerably lowered in our annual forecast as of the end of
Q2. For FY2024, we expect to be able to purchase it for about USD215 in C&F.
However, on a disbursement basis, we believe the impact of the low cement volume was about JPY1 billion,
which will remain in H2. We also believe that the recent purchases have also been affected by the weak yen,and that such effects will continue to be felt next year.
Thus, the current price is about USD215, more than USD100 less than last year, and we expect this to carryover into next year, not this year. Of course, this will be expressed in H2, but in some cases, while we thought
we would be able to use cheap coal around October, it could be delayed until January or later.
Participant: The spot price I'm seeing most often is at the level of USD130. Is the price unlikely to come down
to that level?
Respondent: Of course, the freight will be added to that, so if you add USD20 or USD30, it will be closer tothe actual price.
Currently, we are able to purchase at relatively low prices on a spot basis, but we also have Indonesian coal,
which we have been considering since last year, remaining in our inventory at high unit prices because of thelong-term contracts we have. That will gradually be shipped out as well, so we expect it to be around USD200
with freights.
Q&A: Status of Nanolitia®, a cathode material for lithium-ion batteriesParticipant: I believe you are evaluating Nanolitia® as a cathode material for lithium-ion batteries. Although
you are quite late to the game on this, I believe you are working on with the expectation that it will be promising.

19

Please let us know what the current status of Nanolitia® is and if there are any updates to the information.
Respondent: We are making steady progress on Nanolitia®. It has been well received in various places, andalthough there are a few issues that need to be improved, we believe it is a very promising product.
The battery side is also changing considerably, as is the all-solid-state type. Therefore, we are proceeding with
the idea that Nanolitia® must be changed to a material that can be applied to it.
Participant: What kind of feedback did you get in the evaluation?
Respondent: I cannot give you details, but we are steadily moving forward.
Participant: Are you saying that this is not a situation that will lead to commercialization moves, etc.?
Respondent: It is difficult to sign a contract unless we can confirm that we can produce a product that suits theuser with some stability. I believe this is prudent material and we should proceed according to procedure.
Participant: I am looking forward to hearing about your progress, as I have high hopes for such a product interms of carbon neutrality.
Q&A: Improvement in profitability of domestic cement businessParticipant: I would like to talk about improving profitability, including costs, in the coming year and beyond.
With coal prices falling, can the domestic cement business take options to earn volume, including exports?
Please tell us what kind of initiatives you are taking, including export price revisions.
Respondent: With regard to exports, we have been able to improve profitability due to the significant rise incoal prices since last year, which we have been able to pass on to prices.
Last year, we had to decline transactions with long transport distances. However, since the beginning of thisyear, as coal prices have calmed down, we have made further efforts to resume approaches and transactions.
Our approach is to optimize logistics not only from Japan, but also from Indonesia and Vietnam, utilizing
trilateral trade within the Group as a whole.
The main premise of exporting itself is to focus on profitability. However, it is also positioned as a precursor
to future strategies, alliances, and investments. We can also obtain a variety of information, and we would liketo expand aggressively as long as it is within the scope of profitability.
Q&A: Status of the cement business in the US
Participant: This is about the cement business in the US. Earlier, you mentioned that you are taking a firm
margin on price increases. What is the current capacity utilization rate of your US plants ?
If private demand were to fall, would it be possible to control supply and demand to some extent, for example
by reducing imported cement? Please tell us about your thinking in this area.
Respondent1: Demand is still very strong. All four domestic plants are operating at full capacity, and theshortfall is covered by imports. There may be a slight increase or decrease, but for the time being, we believethat demand is basically steady.
The basic idea is that if demand falls in the future, imports will be used to meet the demand. In a sense, this is
the strongest point of the US business, which can respond to fluctuations in supply and demand without having
to drastically reduce the domestic operation rate. So, we would like to respond in that way.

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Respondent2: Regarding what we are going to do with our domestic operations, one is to increase theproduction at our plants for Denka's 1 million tons, especially in the north and east. This is expected to make aconsiderable contribution, and the occupancy rate is expected to increase significantly.
Another major factor is coal. In accordance with national policy, TAIHEIYO CEMENT has been zeroing out
Russian coal since this April. Therefore, the cargo is transported in 40,000- or 50,000-ton units from Australia
and other countries by large vessels.
Large vessels can only berth directly at the Oita plant, so for other plants, the vessels must be transported once
to the coal center. However, there are no rooms in coal centers in Japan, so we are currently using coal centers
in Korea and China.
Thus, the challenge is how to manage logistics in the future, since much handling costs are currently incurred.
We intend to steadily implement measures to lower costs, mainly through the procurement department, so that
we can do this without renting coal centers in China and Korea.
If Russian coal can be imported, a 10,000-ton ship can be used for short distance transportation. However, wecannot do so, and we need to somehow overcome the cost issue, which is one of the challenges.
Measures must be taken whenever possible to address the nature of exports. Even the Oita plant, which has thelowest full cost, is exporting with poor net revenue. It would be better to ship it to the domestic market for abetter net revenue, but the domestic supply system needs to be re-established while keeping a close eye on thebalance. We will consider how to handle the next logistics in this area as well.
Also, there was a discussion earlier about logistics. The logistics of just transporting cement can barely beguaranteed. In the supply chain, however, after our industry, there are ready-mixed concrete and secondary
products. Nearly 200 million tons of aggregate alone are moved annually to ready-mixed concrete companies
and secondary product companies.
50 million tons of cement is moved by truck and 70 million cubic meters of ready-mixed concrete by truck.
Taken together, this amounts to a considerable amount of material. If any one of the pathways is disrupted, thecement industry cannot stand. If aggregate is not delivered to the ready-mixed concrete plant as ordered, theplant will not be able to knead ready-mixed concrete, and naturally, cement shipments will also drop.
In relation to the 2024 problem, we must not only say "cement can be transported" but we must also address
the issue of how to guarantee a stable supply, including the industry as a whole.
Since we are in a high-volume industry anyway, we accept that the weight of the 2024 problem is quite large.
We recognize that this is an issue that should be addressed together with ready-mixed concrete companies,
aggregate companies, and various other related parties.

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