Financial Results Briefing for the Fiscal Year Ended
March 31, 2022

Kanto Denka Kogyo Co., Ltd.
(Tokyo Stock Exchange Prime Market,
Securities Code: 4047)

May 23, 2022

© Kanto Denka Kogyo Co., Ltd. All rights reserved.

1

Briefing Content

1. Overview of Financial Results for the Fiscal Year Ended
March 31 2022
2. Business Outlook and Future Trends
3. Supplementary Materials

Note: With the exception of change percentages, figures are rounded down to the nearest unit.
© Kanto Denka Kogyo Co., Ltd. All rights reserved.

2

Key Earnings Data
➢ Sales continue strong performance. Sales volume increased for
fluorochemicals. Battery materials enjoyed increased sales volume
and price revisions. The Fundamental Chemicals Division andFerrochemicals Division also recovered to pre-COVID levels.
➢ For costs, prices of raw materials and fuels such as lithiumcompounds, anhydrous hydrofluoric acid, and electricity soared.
➢ The conflict between Russia and Ukraine has not affected our
product manufacturing at this time, but we will continue to monitor
developments closely.
© Kanto Denka Kogyo Co., Ltd. All rights reserved.

3

Statement of Income(Billions of yen)

FY2020Net sales
Operating profit
Profit attributable toowners of parent

FY2021

Difference

51.9
5.6

62.2
11.1

10.3
5.4

3.6

7.7

4.1

Net sales (+¥10.3 billion)

・ Sales increased in the Fundamental Chemicals Division (+¥2.19 billion) due to higher sales volume and effects from accounting
standard changes
・ Sales increased in the Fine Chemicals Division (+¥8.66 billion) due to higher sales volume and effects from price revisions for someproducts
・ Ferrochemicals Division (+¥0.75 billion), Commercial Business Division (-¥1.57 billion), Facilities Division (+¥0.32 billion)

Operating profit (+¥5.4 billion)
Fundamental Chemicals Division (+¥0.17 billion), Fine Chemicals Division (+¥4.67 billion)
Ferrochemicals Division (+¥0.33 billion), Commercial Business Division (+¥0.04 billion), Facilities Division (+¥0.13 billion)© Kanto Denka Kogyo Co., Ltd. All rights reserved.

4Balance Sheet(Billions of yen)
FY2020Assets

FY2021

Change

92.3

109.9

17.5

Cash and deposits

23.6

26.7

3.0

Trade receivables

14.8

18.0

3.2

Inventories

10.5

13.1

2.5

Non-current assets (tangible + intangible)

32.1

38.9

6.8

39.9

49.9

10.0

Interest-bearing debt

26.9

30.9

3.9

Trade payables

6.6

8.9

2.3

Income taxes payable

0.5

2.6

2.0

52.4

59.9

7.4

55.2%

53.0%

–2.2%

Liabilities

Net assets(Equity ratio)© Kanto Denka Kogyo Co., Ltd. All rights reserved.

5

Fundamental Chemicals Division(Billions of yen)

FY2020Net sales

Operating loss

FY2021

Difference

5.7

7.9

2.1

-0.24

-0.06

0.17

Net sales・ Caustic soda: Sales increased due to higher sales volumes, despite lower sales prices
・ Hydrochloric acid: Sales increased due to higher sales volumes, despite lower sales prices
・ Trichloroethylene: Sales increased due to effects from price revisions
・ Perchloroethylene: Sales increased due to effects from price revisions, despite lower sales volumes
Operating loss・ Affected by rising raw material and fuel prices despite contributions from increased sales© Kanto Denka Kogyo Co., Ltd. All rights reserved.

6

Fine Chemicals Division(Billions of yen)

FY2020

FY2021

Difference

Net sales

40.3

49.0

8.6

Operating profit

5.3

10.0

4.6

Net sales
・ Nitrogen trifluoride: Sales increased due to effects from price revisions, despite lower sales volumes
・ Tungsten hexafluoride: Sales decreased due to lower sales prices, despite higher sales volumes
・ Hexafluoro-1,3-butadiene: Sales increased due to higher sales volumes, despite lower sales prices
・ Lithium hexafluorophosphate: Sales increased due to higher sales volumes and effects from price revisions
Operating profit
・ Higher profit thanks to contributions from increased sales, despite being affected by rising raw material
and fuel prices© Kanto Denka Kogyo Co., Ltd. All rights reserved.

7

Ferrochemicals, Commercial Business, Facilities Divisions(Billions of yen)

FY2020

FY2021

Difference

Net sales

5.8

5.3

-0.4

Operating profit

0.5

1.1

0.6

Ferrochemicals
Sales increased due to more sales of carriers and iron oxide
Commercial Business
Sales decreased due to effects from adoption of the Accounting Standard for Revenue Recognition
Facilities
Sales increased due to more contract work at Jobi Engineering, a consolidated subsidiary© Kanto Denka Kogyo Co., Ltd. All rights reserved.

8

Consolidated Operating Profit: Difference Analysis(FY2020 vs. FY2021)(Billions of yen)
16

14

-3.75

12

10

+0.08

+1.01

+8.16

8

11.16

6
10.07

10.15

Depreciation

Other

4

2

5.66

5.66

(Previous year)
Operating profit

Sales/production0© Kanto Denka Kogyo Co., Ltd. All rights reserved.

Raw material and fuelprices(Current year)
Operating profit

9

Operating Profit and Operating Profit Margin Over Time(Consolidated)(Billions of yen)
12

17.6%

17.1%

Operating profit

14.4%

10

17.9%

18.0%

Operating profit margin

16.0%

10.9%

8

20.0%

14.0%
12.0%

6

4

11.1

9.0

9.4

10.0%
8.0%

7.7

6.0%

5.6

4.0%

2

2.0%
0

0.0%

FY2017FY2018© Kanto Denka Kogyo Co., Ltd. All rights reserved.

FY2019FY2020

FY202110

Capital Investment and Depreciation Over Time(Consolidated)(Billions of yen)
16

Capital investment

Depreciation
12

8

10.2

12.2

10.1

8.4

4

6.1

4.3

6.7

5.4

5.0

6.6

0
Investment Depreciation Investment Depreciation Investment Depreciation Investment Depreciation Investment Depreciation
FY2017FY2018© Kanto Denka Kogyo Co., Ltd. All rights reserved.

FY2019FY2020

FY2021

11

The Kanto Denka Group (Consolidated Subsidiaries)(Billions of yen)
CapitalShare ofinvestment (%)

Net sales:
FY2021Year-onyear change

Major business lines

Kanden Kosan Co., Ltd.

10 mil. yen

100.0

7.7

Sale of chemical products,
1.2 maintenance of containers,
insurance agency services

Jobi Engineering Co., Ltd.

120 mil. yen

49.4

4.3

0.3

Morishita Bengara Kogyo Co., Ltd.

27 mil. yen

99.9

0.7

0.0 Manufacture and sale of iron oxide

Kanto Denka Korea Co., Ltd.

300 mil. won

90.0

13.0

-0.4 Sale of fluorine products

Taiwan Kanto Denka Co., Ltd.

7 mil. NT dollars

100.0

4.9

0.7 Sale of fluorine products

Kanto Denka Fine Products Korea
Co., Ltd.

42.0 bil. won

100.0

2.4

1.2

Manufacture and sale of fluorine
products

Xuancheng KDK Technology Co.,Ltd.

50 mil. U.S.

98.3

—

—

Manufacture and sale of fluorine
products

33.3

3.2

dollars

Total© Kanto Denka Kogyo Co., Ltd. All rights reserved.

Manufacture, processing, and repairof chemical industry equipment

12

Business Segments
Name
Fundamental
Chemicals

Products and services

Inorganic products

Caustic soda, hydrochloric acid, sodium hypochlorite, aluminum chloride, etc.

Organic products

Trichloroethylene, perchloroethylene, vinylidene chloride, cyclohexanol, etc.

Fine Chemicals Fluorine products

Sulfur hexafluoride, carbon tetrafluoride, trifluoromethane, hexafluoroethane,
nitrogen trifluoride, hexafluoro-1,3-butadiene, octafluoropropane, tungsten
hexafluoride, silicon tetrafluoride, chlorine trifluoride, octafluorocyclobutane,
monofluoromethane, carbonyl sulfide, iodine pentafluoride, lithium
hexafluorophosphate, lithium tetrafluoroborate, etc.

Ferrochemicals Ferrochemical products

Carriers, magnetite, pigments, iron oxide, etc.

Commercial
Business

Kanden Kosan Co., Ltd.

Sale of chemical products, maintenance of containers, insurance agency
services, etc.

Facilities

Jobi Engineering Co., Ltd.

Factory plant construction, plant facility maintenance work, etc.

© Kanto Denka Kogyo Co., Ltd. All rights reserved.

13

Briefing Content

1. Overview of Financial Results for the Fiscal Year
Ended March 31 2022
2. Business Outlook and Future Trends
3. Supplementary Materials

Note: With the exception of change percentages, figures are rounded down to the nearest unit.
© Kanto Denka Kogyo Co., Ltd. All rights reserved.

14Performance Forecast By Segment (Consolidated)(Billions of yen)

Net sales
FY2021

FY2022

Operating profit
Difference

FY2021

FY2022Difference

Fundamental
Chemicals

7.9

8.1

0.1

-0.0

0.1

0.1

Fine Chemicals

49.0

61.9

12.9

10.0

9.7

-0.3

Other*

5.3

6.0

0.6

1.1

1.1

-0.0

Total

62.2

76.0

13.7

11.1

10.9

-0.2

Capitalinvestment

12.2

15.8

3.5

Depreciation

6.6

8.8

2.1

R&D expenses

1.4

1.4

-0.0

© Kanto Denka Kogyo Co., Ltd. All rights reserved.

Assumption for Performance Forecast
USD/JPY Rate: ¥115
* “Other” includes the Ferrochemicals,Commercial Business, Facilities Divisions, andconsolidation adjustments.

15

Consolidated Operating Profit: Difference Analysis(FY2021 vs. FY2022)(Billions of yen)

25
23
21
19

-9.37
+11.44

17
15
13

-2.12

11
9
7

-0.21
10.90

11.16

5
Operating profit(Previous year)

Sales/production© Kanto Denka Kogyo Co., Ltd. All rights reserved.

Raw material and fuelpricesDepreciation

Other

Operating profit(FY2022 forecast)16Performance Forecast By Segment (Consolidated):
H1 vs. H2(Billions of yen)

Net sales
H1 (forecast) H2 (forecast)

Operating profit
Difference

H1 (forecast) H2 (forecast)Difference

Fundamental
Chemicals

4.1

4.0

-0.1

0.0

0.1

0.1

Fine Chemicals

29.0

32.9

3.9

4.6

5.1

0.5

Other*

3.1

2.9

-0.2

0.7

0.4

-0.3

Total

36.2

39.8

3.6

5.3

5.6

0.3

Capitalinvestment

8.4

7.4

-1.0

Depreciation

3.7

5.1

1.4

R&D expenses

0.7

0.7

0.0

© Kanto Denka Kogyo Co., Ltd. All rights reserved.

*"Other" includes the Ferrochemicals,Commercial Business, Facilities
Divisions, and consolidation
adjustments.

17

Consolidated Operating Profit: Difference Analysis(H1 FY2022 vs. H2 FY2022)
8
Billions of yen

-1.31
7

+2.54
-1.40

6

+0.24
5

4

5.60

5.30
3

2
Operating profit(H1 forecast)

Sales/production© Kanto Denka Kogyo Co., Ltd. All rights reserved.

Raw material and fuelpricesDepreciation

Other

Operating profit(H2 forecast)

18

Briefing Content

1. Overview of Financial Results for the Fiscal Year
Ended March 31 2022
2. Business Outlook and Future Trends
3. Supplementary Materials© Kanto Denka Kogyo Co., Ltd. All rights reserved.

19

－Outlook for Major Products－

Nitrogen Trifluoride (NF )3◼ Chamber cleaning gas for plasma CVD equipment for semiconductor and FPD manufacturing◼ Production capacity: 3,700t/year

tons
50,000Demand trends (Kanto Denka forecasts for
FY2022 and beyond)

Forecasted market share
Kanto Denka holds over 10% of market share

40,00030,00020,000

Kanto Denka

10,000
0
2018

2019

2020

2021

Semiconductor-related© Kanto Denka Kogyo Co., Ltd. All rights reserved.

2022

2023

2024

FPD-related

2025

Kanto Denka
Competitor C

Competitor A
Competitor D

Competitor B
Other

20

－Outlook for Major Products－

Tungsten Hexafluoride (WF6)◼ Wiring material gas for semiconductors◼ Production capacity: 720t/year (Nov. 2016) ➡ 910t/year (Aug. 2018) ➡ 1,400t/year (Oct. 2019)
Demand trends (Kanto Denka forecasts for
tons
10,000

Forecasted market share

FY2022 and beyond)

Kanto Denka holds nearly 30% of market share

8,000

6,000

Kanto Denka

4,000

2,000

0
2018

2019

2020

2021

© Kanto Denka Kogyo Co., Ltd. All rights reserved.

2022

2023

2024

Kanto Denka

Competitor A

Competitor B

Competitor C

Competitor D

Other

2025

21

－Outlook for Major Products－

Hexafluoro-1,3-butadiene (C4F6)◼ Etching gas for semiconductors◼ Production capacity: 125t/year ➡ 160t/year (Dec. 2018) ➡ 260t/year (Dec. 2019) ➡ 400t/year (Apr. 2022)
tons
3,000

Demand trends (Kanto Denka forecasts for
FY2022 and beyond)

Forecasted market share

2,500

Kanto Denka holds around 30% of market share

2,000
1,500

Kanto Denka

1,000
500
0
2018

2019

2020

2021

© Kanto Denka Kogyo Co., Ltd. All rights reserved.

2022

2023

2024

2025

Kanto Denka
Competitor C

Competitor A
Other

Competitor B

22

－Outlook for Major Products－

Carbonyl Sulfide (COS)◼ Etching gas for semiconductors◼ Production capacity: 40t/year ➡ 80t/year (Oct. 2019) ➡ 150t/year (Jun. 2022)
Demand trends (Kanto Denka forecasts for
tons
400

FY2022 and beyond)

Forecasted market share

350

Kanto Denka holds 60% or more of market share

300

250
200

Kanto Denka

150
100
50

Kanto Denka

0
2018

2019

2020

2021

© Kanto Denka Kogyo Co., Ltd. All rights reserved.

2022

2023

2024

Competitors

2025

23

Lithium Hexafluorophosphate (LiPF6)－Outlook for Major Products－◼ Electrolyte materials for lithium-ion secondary batteries◼ Demand reaches full-scale pace for EVs and other in-vehicle applications◼ Production capacity: 5,400t/year ➡ 10,000t/year (Planned for 2023)
tons

Forecasted market share

Demand trends (Kanto Denka forecasts
for FY2022 and beyond)

Kanto Denka holds around 10% of market share

250,000

Automotive batteries
Tough requirements for battery properties, safety, etc.

200,000

Essential to have high-quality LiPF6

150,000

100,000

Kanto Denka

50,000

0
2018

2019

2020

2021

© Kanto Denka Kogyo Co., Ltd. All rights reserved.

2022

2023

2024

2025

Kanto Denka
Competitor D

Competitor A
Competitor E

Competitor B
Competitor F

Competitor C
Other

24

－Overseas Production Sites－

Kanto Denka Fine Products Korea Co., Ltd.

 Location
Cheonan City, South Chungcheong
Province, Republic of Korea
 Business Lines
Manufacture and sale of fluorochemicals
for semiconductors and FPDs
 Production Items
・ Carbonyl sulfide (COS)・ Carbon tetrafluoride (CF4)・ Chlorine trifluoride (ClF3)© Kanto Denka Kogyo Co., Ltd. All rights reserved.

Exterior plant view

25

－Overseas Production Sites－

Xuancheng KDK Technology Co., Ltd.

 Location
Xuancheng City, Anhui Province, People's
Republic of China
 Business Lines
Manufacture and sale of fluorochemicals forsemiconductors and FPDs
 Production Items
Phase I construction*: Ammonium fluoride
Phase II construction:

Rendering of completed plant

Approx. 250 km

・ Tungsten hexafluoride (WF6)・ Carbon tetrafluoride (CF4)・ Hexafluoro-1,3-butadiene (C4F6)* Operations to launch in 2022

© Kanto Denka Kogyo Co., Ltd. All rights reserved.

26

Kanto Denka's Technology and Business Direction■FutureSDGs
ESG

High-sensitivity
analysis

Polymerization

Environment/energy fields
Electronics/information andcommunications fields

Fine Chemicals
Fluorination

High purity
Organicsynthesis

Electroly-

Fluorochemicals
Battery materials

Life sciences/healthcare fields

Ferrochemicals

Organic-inorganic
hybrid materials

Ferrochemical products

sis

Chlorination

Fundamental
Chemicals

Inorganic
synthesis
Miniaturization

Creating
composites

Coating

Inorganic and organic
products

Fluorine-based coating materials

Materials informatics
Computational science■KDK-Core Technology© Kanto Denka Kogyo Co., Ltd. All rights reserved.

27

Notes This document does not constitute disclosurematerial as defined by the Financial Instruments andExchange Act and other laws and regulations, andtherefore the Company does not guarantee its
accuracy or completeness.
 Performance forecasts in this document werecreated based on information available as of thedate of this document's publishing, and actual
results may differ versus forecasted figures due to avariety of factors arising in the future.
© Kanto Denka Kogyo Co., Ltd. All rights reserved.

28

12th Medium-Term Management
Plan
FY2022–FY2024

Dominate 1000
—Sustainable Growth and Fostering Competitiveness—
May 23, 2022

Jun’ichi Hasegawa, President
Kanto Denka Kogyo Co., Ltd.

Contents© Kanto Denka Kogyo Co., Ltd. All rights reserved |30

Review of the 11th Medium-Term
Management Plan

© Kanto Denka Kogyo Co., Ltd. All rights reserved |31

Review of the 11th Medium-Term Management Plan
(Management Indicators)(Billions of yen)

Consolidated indicators

FY2021 Plan

FY2021 Results

Difference

Net sales

70.0

62.2

–7.7

Operating profit

12.0

11.1

–0.9

Equity ratio

50% or more

53.0%

+3.0%

ROE

15% or more

14.2%

-0.8%

Dividend payout ratio(non-consolidated)

20% or more

19%

–1.0%

© Kanto Denka Kogyo Co., Ltd. All rights reserved. |32

Review of the 11th Medium-Term Management Plan (Key Strategies)〇: Achievements▲: Challenges

Key Strategies

Promote expansion of
the fine chemicals
business✓✓✓

Raise the level of the
production technology✓

Create new businesses
promptly

✓
✓
✓
✓
✓
✓

Strengthen the Group's
collective capabilities✓✓✓

Shift to ESG-conscious
management while
increasing corporate
value

✓
✓
✓

Rapid launch of new fine chemical products
Stable operation of overseas production sites
Getting closer to customers and strengthening
proposal capabilities○○

Brought new products to market▲

Product development outside of etching gases

Improving basic technologies (electrolysis,
fluorination, analysis)
Improving quality assessment capability
Promoting labor savings by utilizing IoT and AI▲

Still improving analysis technology and quality
assessment capability
Achieved labor savings by promoting shift to DCS*
and automation

Cultivating Kanto Denka's original and superior
technologies
Strengthening market-oriented development
Promoting commercialization narrative andstrategizing
New business proposals worth ¥3 billion▲▲

Entrenchment of three prime initiatives (safety,
profit, and improvement)
Cultivating human resources that will grow with thecompany
Strengthening capital policy and shareholder return○

Cultivating environmentally-friendly recycling
technology
Governance enhancing social and economic value
Building work environments with diversity and job
satisfaction▲○

Stable operation of Kanto Denka Fine Products Korea
Co., Ltd.

Establishing original and superior technologies
Creating new business that will become future
pillars

Entrenched and permeated the three prime
initiatives▲ Improving employees' skills and developing training
systems▲ Dividend payout ratio (non-consolidated): 19%○○

Promoting utilization of raw material recycling
technology
Established a sustainability system
Promoted health management, taking paid leave,etc.

* DCS: Distributed control systems© Kanto Denka Kogyo Co., Ltd. All rights reserved. |33

2022–2024

12th Medium-Term Management Plan

© Kanto Denka Kogyo Co., Ltd. All rights reserved. |34

I. Vision for 2030

Our vision of society in 2030

Science and technology will evolve toward realizing a low-carbon, recyclingoriented society, advancing the recycling of resources. With progress in theshift to digital technologies and changing lifestyles, people will emphasize
diversity, including in values, and aim to create a society where they canexperience happiness alongside sustainable and resilient companies.

Our vision for ourselves in 2030

With a stable management foundation, we will provide a safe work
environment with job satisfaction, support technologies that are cutting-edge
on a global stage with our superior, original products, and grow to become an
innovative, development-driven company to contribute to a sustainable
society.
© Kanto Denka Kogyo Co., Ltd. All rights reserved. |35

II. 12th Medium-Term Management Plan: Basic Policy
12th medium-term management plan: Key strategies for the three-year period (fiscal
2022–2024), looking ahead to 2030 and targeting achievement of consolidated net salesof ¥100 billion in FY2024

Dominate 1000 —Sustainable Growth and Fostering Competitiveness—◼ Implement measures to achieve net sales of ¥100 billion in FY2024◼ Strengthen initiatives toward a 2030 society that is low-carbon and recycling-oriented◼ Formulate and implement an investment plan to become carbon neutral by 2050
◼ Implement measures to expand the fluorinated gas and battery materials businesses◼ Return the ferrochemicals business to a growth trajectory through refocusing
management resources◼ In the fundamental chemicals business, strengthen raw material supply function andmaximize cash flow

© Kanto Denka Kogyo Co., Ltd. All rights reserved. |36

III. Basic Strategies by Business
Fine Chemicals (fluorochemicals)
Fluorochemical products are expected to see growth over the long term with advancements in the digital society.
Here, we will address demand for cutting-edge etching and low GWP* value gases and stimulate continued growthby accelerating investment and development and taking the lead in technology.
In addition, as demand expands, we will promote decentralization of our manufacturing bases and BCP
measures to meet customer needs.
*GWP: Global warming potential

Fine Chemicals (battery materials)
The rapid increase in demand for EVs has led to calls for significant expansion of supply volume. Along withinvestment in production boosts, we will develop high-productivity, cutting-edge technologies to further reduce
costs and meet customer demand.
We will also contribute to a decarbonized and recycling-oriented society by realizing global-scale lithium
recovery technology from used lithium-ion secondary batteries, a technology currently under development.

Ferrochemicals
We will focus management resources on regions and products with high growth rates to return the business to a
growth trajectory.

Fundamental Chemicals
As a fundamental business, we will strengthen its raw material supply function and maximize cash flow.
© Kanto Denka Kogyo Co., Ltd. All rights reserved. |37

IV. 12th Medium-Term Management Plan: Key Strategies(i) Promote expansion of the fine chemicals business◼ Capacity expansion to address market growth (semiconductor gases and battery materials)◼ Bringing fluorochemicals demanded by customers (cutting-edge, low GWP products)
to market◼ Organic collaboration with overseas sites◼ Strengthening development capabilities for gas and battery material products◼ Establishing an integrated production system within the Group, from raw materials to finished products(ii) Raise the level of the production technology◼ Improving productivity by promoting DX◼ Improving quality assurance capability(iii) Enhance human resource development◼ Implementing human resource development and strategic education programs◼ Pursuing employee well-being (including a sense of job satisfaction)◼ Promoting gender and other diversity(iv) Increase social value◼ Promoting activities for sustainability◼ Shrinking energy-intensive products and strengthening initiatives toward decarbonization◼ Promoting recycling© Kanto Denka Kogyo Co., Ltd. All rights reserved. |38

V. 12th Medium-Term Management Plan: Quantitative Targets

Quantitative Targets
Consolidated basis

FY2021 (Results)

FY2022 (Plan)

FY2023 (Plan)

FY2024 (Plan)

Net sales (billions of yen)

62.2

76.0

92.0

100.0

Operating profit (billions of yen)

11.1

10.9

13.0

15.0

Operating profit margin (%)

17.9

14.3

14.1

15.0

■ Targets for FY2024 (consolidated basis)■ Dividend policy

・Net sales¥100.0 billion

・Dividend payout ratio target: 20%

・Operating profit¥15.0 billion

・Equity ratio

50% or more

・ROE

12% or more

© Kanto Denka Kogyo Co., Ltd. All rights reserved. |39

VI. Priority Themes for Technology Development
Areas for new business development: Materials supporting cutting-edge technology(i) New battery materials, semiconductor materials, fluorides, chlorides(ii) Medical materials(iii) Low dielectric constant materials for communications use
Development of production technologies: Technologies supporting existing andnew businesses(i) Recycling(ii) Environmental improvement technology (use of electrolysis technology for energy
conservation and sustainability)(iii) Use of materials informatics (MI) software for development support(iv) Peripheral technologies for existing businesses, fluorinated gas raw materials production,
new production technologies● Sales targets for developed products

Net sales

FY2022

FY2023

FY2024¥1 billion¥2 billion¥5 billion© Kanto Denka Kogyo Co., Ltd. All rights reserved. |40

VII. Investment Plan
Investment plan
◼ Total of ¥60 billion over three years. 90% of this is invested in the growth semiconductor and battery
materials businesses and their development◼ Newly developed products: Investment in development of environmentally-friendly products, constructionof new research building, etc.
◼ Separately managing sustainability investments, such as securing renewable energy

Other¥5 billion

Example investment projects

Newly developed products¥10 billion

Semiconductormaterials

New semiconductor gas facilities
Facility expansion for C4F6, COS, etc.

Battery materials

Facility expansion for LiPF6
New lithium recycling facilities

Newly developed
products

Developing environmentally-friendly
products
Constructing new research building

Other

Enhancing raw material supply
facilities

12th Medium-Term
Management Plan
Total: ¥60 billion
Overseas investment: ¥10 billion
Domestic investment: ¥50 billion

Semiconductormaterials
Battery materials¥45 billion© Kanto Denka Kogyo Co., Ltd. All rights reserved. |41

Initiatives for Carbon Neutrality© Kanto Denka Kogyo Co., Ltd. All rights reserved. |42

Initiatives for Carbon Neutrality

Vision for2030

Accelerate growth by further expanding our fine chemicals products, develop
technologies to reduce greenhouse gas emissions and decarbonize, and grow to
become an innovative, development-driven company to contribute toa sustainable society

CO2 emissions reduction target: 30% in FY2030
Vs. FY2013
For Scope 1 and Scope 2

Major initiative
policies(i) Reducing CO2 emissions intensity while achieving growth in the finechemicals business(ii) Introducing renewable energy(iii) Using the product mix to reduce CO2 emissions(iv) Promoting development of environmentally-friendly products© Kanto Denka Kogyo Co., Ltd. All rights reserved. |43

Initiatives for Carbon Neutrality (CO2 Reduction Roadmap)
CO2 Reduction Roadmap

2020
Manufacturing
processes

30% reduction
vs. FY2013

Carbonneutrality

2030

2050

Improvements in energy conservation, productivity, and CO2
emission intensity
Using the product mix to reduce CO2 emissions
Promoting the use of generated hydrogen as fuel

FuelElectricity
Products

Developing and selling environmentally-friendly products
Introducing renewable energy© Kanto Denka Kogyo Co., Ltd. All rights reserved. |44

CO2 Emissions from Energy Use Over Time and Reduction Targets(Scope 1 + Scope 2)
Reduction target

2030

30% reduction vs. FY2013

Targeting carbon neutrality(virtually zero emissions)2050

Performance to 2020
8% reduction vs. FY201330%
reduction

250

CO2 emissions (1,000 tons)

5vs. FY2013

12

200

3

150
100

231

205

162

Carbonneutrality
achieved

2030

2050

50
0
2013
(Base year)

2020
Scope 2

Scope 1

© Kanto Denka Kogyo Co., Ltd. All rights reserved. |45

Initiatives for Carbon Neutrality (CO2 Reduction Roadmap)
CO2 Reduction Roadmap
Reduction target

2030

Expansionofproduction
capacity

Scope 1
Scope 230% reduction vs. FY2013

2050

Targeting carbon neutrality(virtually zero emissions)

Development ofenvironmentallyfriendly products

Product mix

Cut
30%

Productivity
improvement
Portfoliotransformation
Shift torenewableenergyEmissions
237 ktEmissions
166 kt2013

2030

Introduction ofrenewable energy

Carbonneutrality

2050© Kanto Denka Kogyo Co., Ltd. All rights reserved. |46

Lithium Recycling Technology
Process for recycling high-purity lithium compounds from used LIBs
Sumitomo Metal Mining +Kanto Denka Kogyo

Pretreatment
manufacturers

Process for recycling high-purity lithiumcompounds from used LIBs
Used secondary
batteries(pretreated*)

Battery
manufacturers

Sumitomo
Metal
MiningSecondarybattery
recyclingprocess

Cathode materials
for lithium-ion
secondary batteries

Kanto Denka Kogyo
High-purity lithium
recycling process

Pyrometallurgic
al process

Slag

Hydrometallurgicalprocess

CopperHydrometallurgicalprocess

Nickel-cobalt
mixtureBattery material
manufacturing
process

High-purity
lithiumcompounds

Electrolyte
manufacturers* Pretreatment: Use of heat treatment and othermethods to detoxify a substance, plus crushing andsorting

Using our hydrometallurgical method, recycling generated slag containing lithium into high-purity lithium that canbe reused in LIBs
Enabling a recycling system for lithium resources and contributing to therealization of a resource-recycling society© Kanto Denka Kogyo Co., Ltd. All rights reserved. |47

Caution
This document does not constitute disclosure material as
defined by the Financial Instruments and Exchange Act andother laws and regulations, and therefore the Company does
not guarantee its accuracy or completeness.
Performance forecasts in this document were created based on
information available as of the date of this document's
publishing, and actual results may differ versus forecasted
figures due to a variety of factors arising in the future.

© Kanto Denka Kogyo Co., Ltd. All rights reserved. |48