January 23,2012

The New Medium-Term Management Plan, “Grow Globally II”
Kureha has formulated “Grow Globally II,” its new four-year medium-term management plan forfiscal 2012 through fiscal 2015 (April 2012 to March 2016). Details of the plan are as follows.
1. Formulation of the New Medium-Term Management Plan
In the current “Grow Globally” medium-term management plan for fiscal 2008 to fiscal 2012,
Kureha set the goals of “Expand earnings through global expansion of existing businesses”
and “Steadily cultivate and expand new businesses.” Our aim was to achieve significant
increases in revenue and earnings.
As a result of the impact from the global recession, the continual rise of the yen and otherfactors that arose after the plan’s formulation, our results gradually diverged from the plan’s
initial targets. There was absolutely no change, however, in the direction of the businesses
that were positioned as growth drivers.
The earthquake disaster in March and April 2011 had a considerable impact on business
operations, in particular at the Iwaki Factory in Fukushima Prefecture. However, all of ourplants had resumed operations by the end of July. In an effort to support in the recovery ofFukushima Prefecture and the city of Iwaki, which are intertwined with Kureha’s history, weestablished the Iwaki Factory as the mother plant and an adjacent research center as an
R&D facility, working together with the community to pursue manufacturing that is of value tosociety.
We have now regained the footing to allow us to establish the type of organization outlinedin the “Grow Globally” plan, and will conduct our business operations based on the new“Grow Globally II” medium-term plan through fiscal 2015, including quantitative targets.
2. Management Objectives and Quantitative Targets
Management Objectives
In existing and new businesses with a competitive advantage, Kureha will continue andaccelerate global development and, while recovering its investments, seek to increase
revenue and earnings. At the same time, we will develop and retain the human resourcesthat are the foundation of global expansion and technical capabilities. While responding
flexibly to changes in the economic and social environment, we will manage our business
Page 1 of 3

with consideration to the global environment, and strive to enhance corporate value.
Quantitative TargetsSales, Operating Income and Operating Margin
FY2013 Plan: Sales ¥165bn, operating income ¥12bn, operating margin over 7%
FY2015 Plan: Sales ¥200bn, operating income ¥20bn, operating margin 10%
Sales and Operating Income by Segment（\100mil）
2,500（\100mil）

Sales（グラフ表示する） 1,650
1,000
500
0200

2,000

2,000
1,500

Operating Profit

250

1,340

790

150
100

530

345315

340

380

390
155
135

470
160
150

490
170170

FY11 Forecast

FY13 Plan

FY15 Plan

Other Operations
Specialty Plastics

200

Construction-related businessSpecialty Chemicals

Advanced Materials

84120
193500365
4115654894401343318-6-4-4

FY11 Forecast

FY13 Plan

FY15 Plan-50
Consolidated adjustments
Construction-related businessSpecialty Chemicals

Other Operations
Specialty Plastics
Advanced Materials

Preconditions for Quantitative Targets(1) Change in depreciation method: From fiscal 2012 the accounting method fordepreciation will be changed from the declining-balance method to the straight-line
method.
(2) Exchange rates: 80 JPY/USD; 100 JPY/EUR

Principal Management Benchmarks(1) Foreign Sales Ratio: FY2015 33% (FY2010 20%)(2) Capital Expenditure Program: ¥90.0 billion over FY2012 – FY2015(3) Depreciation Cost: FY2013 target ¥11.0 billion, FY2015 target ¥14.0 billion
Principal Capital Expenditures (FY2012 – FY2015)
Advanced Materials: Production plants for lithium-ion battery (LiB) Anode (negativeelectrode) materials, vinylidene fluoride resin, and carbon fiberSpecialty Chemicals: Production plants for therapeutic agent for chronic renal failure
Specialty Plastics: Production plants for PVDC (Polyvinylidene chloride) resin, andNEW Krewrap (household wrap) films
3. Growth Drivers in Core Businesses
Page 2 of 3Advanced Materialsi. Advanced Polymers: Establish global supply structure for KPS (PPS), and expand
business for PVDF for backsheets
ii. Battery Materials: Expand the business for Anode (negative electrode) materials andPVDF for binders for both vehicle and stationary batteriesiii. Carbon Fiber: Expand the business for insulating materials for silicon production
equipment for photovoltaic cells
iv. PGA: Expand the business for materials for excavating oil and shale gas, and develop
new applications
Specialty Chemicals
i. Chemicals: Expand the business for Kremezin (therapeutic agent for chronic renalfailure) through development of markets in U.S. and Europe
ii. Agrochemicals: Expand the business for Metconazole agricultural fungicide
Specialty Plastics
i. Strengthen the brand position for NEW Krewrap household wrap, and increase earnings
capability
ii. Bolster the cost competitiveness of commercial-use wrapping/casing films, and expand
sales in Asia
Other
i. Expand the industrial waste processing business of Kureha Ecology Management Co.,
Ltd.
END

Page 3 of 3

The New Mid-Term Management Plan

“Grow Globally‐Ⅱ”
January 23, 2012

(0)

Iwaki Factory hit by the Great East Japan Earthquake(1)Volunteer activities in Iwaki city(2)

Ⅰ. Review of Current Mid-Term Management Plan

Concept

Progress Update(3)

Ⅰ. Review of Current Mid-Term Management Plan

Concept of Grow Globally“Global growth”“Sustained results in new business areas”
Implementation
Improvement ofEnvironmental Value
Improvement ofImprovement ofEconomic Value

Social Value

Improvement ofCorporate Value
Always act as a global corporate citizen, recognizing corporate social responsibilities andfocusing on environment and needs of daily life(4)

Review of the Current “Grow Globally” Mid-Term Plan (2)Comparison with Initial Targets
From “Spreading Seed” to “Cultivating” then to “Harvesting”
Mid Term Plan Targets

Mid Term Plan Results(\100mil）(\100mil）（\100mil）

250

2,000

2502001,500（\100mil）

2,500
2,000

1,850

2,100250

1,620

1,500
1,0000Sales

FY10 Plan

1,437 1,346 1,323 1,340200150

1,000

100500
FY08 Forecast

300

150150140300

2,500

5050000

FY12 Plan“GG‐Ⅱ”

9510065500

FY08

FY09

Sales

Operating Profit

6457
FY10

FY11 Forecast FY12 Plan

Operating Profit Immediately after the formulation of the Grow Globally plan, the global economy went into a sharp downturn as aresult of the collapse of Lehman Brothers, and recovery has taken time. The Great East Japan Earthquake also
had an impact.
 Exchange rates changed significantly from initial assumptions, with the JPY/USD rate of ¥105/$ moving to the¥70 range, and the JPY/EUR rate of ¥155/€ to the ¥100 range.
 Total capital expenditure of ¥65.3 billion and R&D spending of ¥23.8 billion over fiscal 2008 to fiscal 2011 wasprogressively made to prepare for the future.
 Steady progress was made in the new Battery Materials business, and the focus of the PGA business shiftedfrom carbonated soft drink bottles to new applications (such as shale gas and oil extraction).
 Controlling companies were set up in the United States and China, and a production facility for Krehalon (PVDC)
films established in Vietnam, as part of a focus on bolstering future competitiveness and securing expansion
capability.

(5)Review of the Current “Grow Globally” Mid-Term Plan (3)ResultsSales（\100mil）

150

2,000
1,500
1,0005000

Operating Profit（\100mil）

1,437324339435
339

1,345
284358424279

1,324334336411243

1,340345315
390290

FY08

FY09

FY10Fy11（est.）

10050

95
7575766

171921-70-3665
3411563414-652
18-4-712-6-50

Advanced Materials
Specialty Chemicals
Specialty Plastics
Construction-related business & Other Operations

FY08

FY09

FY10Fy11（est.）

Advanced Materials
Specialty Chemicals
Specialty Plastics
Construction-related business & Other Operations
Consolidated adjustments

Advanced Materials:
We expanded the PVDF business, focusing on binders. We also made capital investments for carbon fibers, but demandfluctuations affected performance. Our U.S. joint venture company for PPS expanded production capacity. In addition, our U.S.
plant for PGA was completed, though full-scale operations have yet to begin.
Specialty Chemicals:
We expanded the business in Japan for our therapeutic agent for kidney disease. In addition, the sales volume for agricultural
fungicides increased, although the decline in the Euro had a considerable impact on results.
Specialty Plastics:
We focused on enhancing profitability for Krehalon (commercial-use wrapping/casing) films. We also continually renewed NEWKrewrap (household wrap) to enhance brand value.
Construction / Other:
The industrial waste processing business established its Kanagawa Factory.

(6)

Ⅱ．Outline of New Mid-Term Management Plan
‘Grow Globally-Ⅱ’

Managerial Goal
Financial Targets
Growth Drivers(7)New “Grow Globally II” Mid-Term Plan

Management Objectives
The original growth scenario from “Grow Globally” is unchanged, but
quantitative targets need to be revised.
The basic concept for “Grow Globally II” is unchanged from the previous plan.
Quantitative targets have been set for fiscal 2012 through fiscal 2015 (April 2012 –March 2016)“Achieve global growth”“Steadily produce results in new businesses”
Changes in the economic
and social environment“Recover investment andincrease revenue and earnings”

Adapt while maintaining harmony
with the environment

Enhance corporate value(8)Financial Targets（\100mil）
2500

Mid Term Plan Sales・ Operating Profit
2,000

2000
1500

1,340

1000
500

1,650

200120（\100mil）
250

Domestic／Overseas

2500

200

2000

150

1500

100

1000

5065（\100mil）

O ve r se as
33%
O ve r se as
20%

Domestic
50080%

Domestic

67％00
FY11 ForecastSalesFY13 Plan

0

FY15 Plan

FY10

Operating Profit

・ Capex: 90 billion yen between FY2012~FY2015 (cumulative)
・ Depreciation: 11billion yen in 2013, 14 billion yen in FY2015
・ Shareholder returns: Aim to provide stable and continuous dividend
Based on: exchange rate 80JPY/$, 100JPY/€

It will change depreciation method from fixed-rate depreciation tostraight-line depreciation in 2012
(9)

FY15 Plan

New “Grow Globally II” Mid-Term Plan

Quantitative Targets by Segment（\100mil）
2,500

1,0005000Operating Profit

250

2,000

2,000
1,500

（\100mil）

Sales1,650790

150340380100390155135470
160150490170170

FY11 Forecast

FY13 Plan

FY15 Plan

1,340345315

Other Operations
Specialty Plastics

53020020084120
193500Construction-related businessSpecialty Chemicals

Advanced Materials

36541
1565

48

9440
1343318-6-4-4

FY11 Forecast

FY13 Plan

FY15 Plan-50
Consolidated adjustments
Construction-related businessSpecialty Chemicals

Other Operations
Specialty Plastics
Advanced Materials

Main Products and Applications to Increase Revenue and Earnings
Advanced Materials: PPS (automotive parts); PVDF (LiB binders, backsheets), Anode (negative electrode)materials (vehicle and stationary LiBs); carbon fiber (insulating materials for silicon mass
production equipment for photovoltaic cells); PGA (shale gas and oil extraction)
Specialty Chemicals: Therapeutic agent for kidney disease (growth in Japan, We expect sales to begin in
the fiscal year 2013.); agricultural fungicides
Specialty Plastics: Enhance cost competitiveness for Krehalon (commercial-use wrapping/casing) films
and accelerate business expansion in Asia

(10)

Growth Drivers
Resource
savings

Environmentalfeasibility

Resource
savings

Materials for HEV lithium-ion
batteries (carbon materials, PVDF)

Materials for lithiumion batteries (PVDF)

Daily life

Production of PGA (USA)Resourcesavings
Resourcesavings
Clipless packaging system (PVDC)

Manufacturing materials forphotovoltaics (carbon fiber)

Safe andaestheticallypleasing food
Daily life

Solutions that are beneficial to the global
environment and people’s daily lives(11)

Healthyliving
Kremezin (therapeutic agent
for chronic kidney disease)Growth Drivers

Advanced Materials (1)Polyvinylidene Fluoride (PVDF)
・In addition to their conventional use in industrial application,demand for lithium-ion batteries (LiBs) is rising rapidly for use as vehicle
and stationary power sources.
・ We are rapidly developing applications for photovoltaic cell backsheets
and hollow fibers.
・The Iwaki Factory’s plant is currently operating at full capacity of 4,000
tonnes per annum.
・In 2014 we will build a plant in Changshu, China with capacity for 5,000
tonnes per annum, and are considering further expansion in capacity.

activematerial

Hard Carbon

Anode (Negative Electrode) Materials for Large LiBs (HardCarbon)
・Hard carbon has superior input-output characteristics and durability.
・In addition to petroleum-derived hard carbon, we are working tocommercialize a plant-derived version together with Kuraray Co., Ltd.
・We are adapting the pace of change and business expansion throughalliances with other companies, mainly Kureha Battery Materials Japan(KBMJ).
・The New Materials Research Center (Iwaki) and the Battery Materials
Technology Center (Tokyo) provide the materials best suited to market needs.
・We are bolstering our supply structure in Japan and overseas in anticipationof further increases in demand.

(12)

GraphiteBinders

electrodeplate

Growth Drivers

Advanced Materials (2)PGA (Polyglycolic Acid Resin) We are currently developing a variety of applications thattake advantage of PGA’s biodegradability, hydrolyzability,
high strength and barrier properties.
 As a material for use when excavating shale gas and oil,
PGA is highly rated for its high strength, and for
degrading quickly at low temperature.
 Our U.S. plant will begin operating in 2012. We expect toachieve profitability in fiscal 2015.
 We have also begun the development process for future
capacity expansion.

Pitch-Derived Carbon Fiber This fiber is used as insulating material for equipment
to produce silicon wafers and photovoltaic cells. The
market is currently in an adjustment phase, but we
expect demand for use in photovoltaic cell applications
to expand over the medium to long term.
 With the Iwaki Factory as our main plant, we willclosely monitor demand trends and expand production
capacity, including at production facilities in suchareas as China and the U.S.
 We are currently progressively expanding the businessfor composite material applications for automotiveparts.

(13)

Growth Drivers

Specialty Chemicals
Therapeutic Agent for Chronic Kidney Disease - Kremezin This drug improves uremic symptoms and is effective in delaying
the start of dialysis.
 It eases the burden on the patient, as well as helping curb medicalcosts.
 Considering the increase in patients suffering kidney disease, andthe greater emphasis on preventing further degradation, we expect
the number of prescribed patients in Japan to increase.
 Mitsubishi Tanabe Pharma Corporation is currently conducting
Phase III clinical trials in the U.S. and Europe. We expect sales
to begin in the fiscal year 2013.
 We are currently expanding facilities at the Iwaki Factory in line withbusiness development in the U.S. and Europe.

Agricultural Fungicide - Metconazole
 This product is a foliage application agent for wheat,rapeseed, soybean, corn, grass plot and other crops.
 Along with stable growth in Europe, we anticipate market
expansion in North and South America.
 We are currently supplying customers by transferring
technology and outsourcing production to other companies.
 The Agrochemicals Research Center (Iwaki) is currently
developing new agents.

(14)

Growth Drivers

Specialty Plastics / OtherGlobal Business Development andEnhanced Competitiveness for the Commercial-Use
Wrapping/Casing Film, Krehalon
 The framework for film processing is now in place at Kureha Vietnam,
enhancing competitiveness, including the cost structure.
 We are working to expand the market for retort pouch sausages,
including through alliances with food product manufacturers in Asia.
 We are expanding our market share for multilayered films throughglobal expansion of the business from the Europe and Vietnamfacilities.

Enhanced Brand Appeal for NEW Krewrap(Household wrap)
 We continue to improve NEW Krewrap to make it easier for customers
to use, and to enhance safety. Improving products leads to greater
customer satisfaction and brand appeal.
 We are raising the profile of the Kichinto-San series brand, andexpanding our lineup of products for the kitchen.

Expansion of the Industrial Waste Processing
Business at Kureha Ecology Management
 We are expanding contracts for difficult-to-process waste, and continue
to process material properly and thoroughly.
 We are pursuing the business for processing trace amounts of PCBs.

(15)

Kureha’s Ongoing Pursuit of Manufacturingthat Offers Value to Society
Creating materials is a type of “agricultural-style” manufacturing.
The road from spreading seeds, to cultivating and harvesting is long.
We refine our materials in line with changes in the market, in an attempt toensure they excel.
Our Research and Development Division is located adjacent to the Production
Division, helping to support “Designed by Japan / Made in Japan” manufacturing.
We have already begun searching for the seeds of next-generation technologies.
The Iwaki Factory serves as “the Mother Factory”, leading production facilities
around the world.
Our center for R&D and production is Japan. We are working to help restore andact in harmony with our home region of Fukushima, while pursuing globalexpansion.
We do not send our core technologies abroad, and will continue to nurture them inJapan.

(16)Kureha’s Mission

Contribute to the global environment
and people’s daily lives“Grow Globally”(17)

Disclaimer• These materials are supplied to provide a deeper
understanding of our company, and are not intended as asolicitation for investment or other actions• These materials ware prepared by our company based on
the information available at this point in time, however actual
performance may produce results that differ from the plan,due to a variety of factors• Please utilize these materials using your own judgment andresponsibility(18)