Health &Crop SciencesSector

Ⅴ Nobuaki Mito

Representative Director &Managing Executive Officer

1

ⅤHealth & Crop Sciences Sector

1

Performance Trends

2

Contribution to the Containment of05
the Infectious Disease Pandemic

3

Vision & Growth Strategy

07

4

Performance Outlook

2503

2

ⅤHealth & Crop Sciences Sector

1

Performance Trends

2

Contribution to the Containment of05
Infectious the Disease Pandemic

3

Vision & Growth Strategy

07

4

Performance Outlook

2503

3

Consolidated Performance Trends in theⅤ-1
Health & Crop Sciences Sector
50045078

Sales（Billion JPY）

Core Operating Profit

9080400703504730025060445031200201501000

FY15FY16FY17FY18302025040

FY1910FY200(Forecast)
IR Day: Health & Crop Sciences

4ⅤHealth & Crop Sciences Sector

1

Performance Trends

2

Contribution to the Containment of05
Infectious the Disease Pandemic

3Vision & Growth Strategy

07

4

Performance Outlook

2503

5

Ⅴ-2

Contribution to the Containment of theInfectious Disease Pandemic

SanTerra Co., Ltd.
Material for medicalgowns（PE Film）

Contribution to solving
the supply shortage of
medical PPE inclinical environments
IR Day: Health & Crop Sciences

Sumitomo ChemicalGarden Products Inc.
Household antiviraldisinfectants spray

Contribution toimproving
household hygiene

Sumika Environmental
Science Co., Ltd.

Antiviral agentsContribution toenhancing public health(e.g. surface treatment for
buttons on a vending machine)

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ⅤHealth & Crop Sciences Sector

1

Performance Trends

2

Contribution to the Containment of05
the Infectious Disease Pandemic

3

Vision & Growth Strategy

07

4

Performance Outlook

2503

7

Long-Term Vision for
Ⅴ-3
the Health & Crop Sciences Sector

Ensure Public Healthand Hygiene

HealthFood

Increase Food Production
Sustainable Agriculture
Safer Agricultural Produce

SumitomoChemical

Improve QoL andthe Environment

R&D

Environment

Strengthen high-profitability businesses
Expand business globally
Ensure compliance & maintain safe operations
Differentiation
IR Day: Health & Crop Sciences

Business
Creation

Innovation
8Business Growth Strategy Aligned with
Ⅴ-3
Long-Term Vision
Key Words for
the Growth Strategy

GlobalInnovation

Differentiation
Business
Creation
IR Day: Health & Crop Sciences

Topics covered in this presentation
Progress update on the AgroSolutions businessexpansion in LATAM & India

Progress update on the AgroSolutions productdevelopment pipeline

Next Generation Tech-development：
Access to Synthetic BiologyDigital Transformation (DX) indomestic Ag-Market

Strengthening the Biorational business

Creating and expanding an
Antiviral-product business

Expanding our product portfolio in theAnimal Nutrition businessBusiness development in Nucleic Acid medicine
9Global Business Expansion:
Ⅴ-3
AgroSolutions

GlobalExpanding & strengthening our sales footprintin 5 of the 6 top global Ag-markets
Crop Protection Market Size（Year 2019）
BrazilUSA
ChinaJapan

Acquisition ofNufarm’s LATAM business
Strengthening the sustainable
solution business at Valent USA
Reinvigorating growth in thedomestic AgroSolutionsbusinessArgentinaIndia
FranceCanada

Merger of subsidiaries in India

RussiaGermany
Australia
Italy(mil. US$) 0

2000

4000

6000

8000

10000

Source：AgbioCrop （Oct 2020)

IR Day: Health & Crop Sciences

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Global Business Expansion:
Ⅴ-3
AgroSolutions Business in LATAM

GlobalAcquired 4 subsidiaries of Nufarm in LATAM(Brazil, Chile, Argentina and Columbia)

Invested
approx.
90bn. JPY

Sales in LATAM togrow to 200 bn. JPY

PMI Progress With new managementin place, integrated
operations began inAugust 2020
 Accelerate use ofFortaleza plant―
5 new formulated
products entering
productionPlant in Fortaleza, Brazil

New product development
Decision A registration application for
a new INDIFLIN™ mixture product developedby Nufarm has been submitted,
following the application for an INDIFLIN™
mixture developed by SCC filed in 2017.

Closing
INDIFLINTM tobe launched inLATAM‘19 ‘20 ‘21

‘25

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*LARC: Latin America Research Center
IR Day: Health & Crop Sciences Other new product development is also being
accelerated by utilizing
Sumitomo Chemical’s LARC facility*11

Ⅴ-3 PMI Progress (Acquisition of Nufarm LATAM)

GlobalCompleted onboarding forover 700 employees.
Sumitomo Chemical’s
history & spirit deeply
shared through active
participation by
SCC management

Over 10,000
stakeholders
engaged incommunication

Over 75 people
involved in the project,divided into
20 functional working
groupsDespite the Covid-19
situation and the fact thatsome people never met inperson, teams are highly
motivated and working
together wellOver 200 policies
and procedures
were mapped andanalyzed acrossall functional areas

Over 250 virtual
meetings held acrossall people engaged in
the integration project

174 milestones and851 activities mapped in
the integration plan –roughly half of thosemilestones completed

Early realization ofcost synergies &cost reduction due tosmooth integration ofIT systems (SCM, CRM,etc.)

200 bp reduction ininterest on loans
achieved underSumitomo Chemical’sgroup finance scheme

IR Day: Health & Crop Sciences

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Global Business Expansion:
Ⅴ-3
AgroSolutions business in India

GlobalAgroSolutions Market in India
Growing at 7 to 8% per year(mil.USD)

600

FY25
TargetCombine Sumitomo Chemical’s proprietaryproducts with the former ECC’s generics.

FY18 results

500

 Utilize former ECC manufacturing facilities

400

Plan to manufacture some ofSumitomo Chemical’s products in India to securesupply capacity in the existing plants in Japan300
ex-SC India

200100 Promote digital marketing

ex-ECC
BayerSyngenta

Integrated
CompanyFMC

Integrated
Company0

Initiatives to achieve synergies fromintegration
 Develop and Launch
new mixture products

Expand sales in India by using social media
and smartphone apps to reach end-users,
many of which are small-scale farms

 Strengthen the Biorational business

Promote the introduction of new products byworking closely with Valent BioSciences

Aiming to be a leading AgroSolution products company inIndia’s rapidly growing market
IR Day: Health & Crop Sciences13

Ⅴ-3 AgroSolutions Pipeline Outlook
B2020
CompoundUse

Evaluation

Full-scale
development

Innovation

Registration

Market Launch
Launched in Japan in 2020

INDIFLINTM

Agricultural fungicide
e.g. Soybean rust

☑ Completed☑ Registered inJapan

PAVECTOTM

Agricultural fungicide
e.g. Septoria☑ Completed☑ Registered inJapan

Scheduled to belaunched in Japan
in 2021

ALLESTM

Agricultural insecticide
e.g. Major rice pests etc.

☑ Completed☑ Submitted

Scheduled to belaunched in Japan
in 2021

Name - TBD

Agricultural fungicide(inpyrfluxam)(methyltetraprole)(oxazosulfyl)(pyridaclomethyl)e.g. Field crop & vegetablediseases

Pipeline A

Agricultural plant growth
regulator

Pipeline B

Next generation herbicide
effective against
herbicide-resistant weeds

Pipeline C

Botanical insecticide for
agriculture andhousehold hygiene

Pipeline D

Agricultural insecticide tocontrol insecticide-resistant
Pests

A2020

☑ Completed

Scheduled to be launchedin LATAM in 2021

☑ Submitted☑ Submitted
Full-scale
developmentin progress
Full-scale
developmentin progress

Evaluationin progress

Potential sales: Approx. JPY150-200 billion in total
IR Day: Health & Crop Sciences

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Development of
Ⅴ-3
Next-generation Technologies
Introduction of
new technology to strengthencore R&D capabilities

Discovery of
new chemical substances- AI (Docking simulation)- Target-based screening- Technology introduction
promoted by open
innovation approach

Innovation

Technology development for
creating new business

ChemicalProcesses- Utilize AI- Flow process

Applications- Utilize drones- Utilize sensing
technologies- Utilize eco-friendly
materials for
product design

Biorationals/Botanicals

Crops/Agriculture- Evaluate & introduce natural
plant-based products- Utilize synthetic biology- Innovative fermentation process
technologies- Develop a newvariety of rice
- Phenotyping- Plant growth prediction

IR Day: Health & Crop Sciences15

Ⅴ-3 Next-generation Technologies for the

Biorational Business

Discovery ofnovel microorganisms
and natural products
Provide library ofmarinemicrobes

Skill indeveloping
Biorationalproducts

Innovation infermentation processes
through synthetic biology

VBC
Biorational
ResearchCenter

Infrastructure for,and skill inscreening
Sumitomo
discovered
Chemicalcompounds
H&CS Sector
Research Lab

IR Day: Health & Crop SciencesInnovation

Sumitomo
ChemicalCorporate
Research Lab

16Ⅴ-3 Long-term Biorational Growth Drivers

Differentiation

Cropping
System~10b People by 2050
50% More Food

Nutrient
Efficiency

Seeking Yield Boost
Abiotic
StressMitigation

Sustainable&Holistic
Agriculture
Approach

Integrated
Pest
Mgmt.

(+17% crop loses 2050)

SoilBiodiversity

Stress Mitigation
Soil Health Trend &AwarenessMicrobial
Biodiversity
IR Day: Health & Crop Sciences

Food Supply  Grower

Sustainable Ag

Precision
Ag

Climate Change

Consumer Demand“Safe”/Local/Quality

Loss of Conventional

Non-Fertilizer Yield
Improvement
Bio YieldAlternatives

Crop Protection

Integrated Programs17Ⅴ-3 Strengthening the Biorational Business

Differentiation

Contents
 Streamline management layers to enableBusiness
ManagementStructure

more swift strategic decision-making &resource allocation.
 Establish and strengthen SSBUs(SstainableSolution Business Units), dedicated teams for
Biorational demand creation in key countries /markets.

 NAFTA: Significant increase in personnel for SSBU LATAM and Europe: SSBU newly established Harness technological innovation inR&D

Synthetic Biology for Biorational R&D activities(e.g. cost-reduction projects for existing products,
novel product development and launch) Establish Biorational Team in H&CS Sector
Research Lab to accelerate pipeline development

Accelerate launch of 6 pipeline products in later development
stages (PGR 4, Bioinsecticide 1, Rhizosphere 1)
IR Day: Health & Crop Sciences18

Agricultural Digital Transformation (DX)Ⅴ-3
in JapanInnovation
We aim to build a digital information platform which can provide
Japanese growers with useful & valuable information, which will
enable us to find solutions for various challenges (e.g. aging population,
frequent abnormal weather conditions, labor shortages, etc.) thatdomestic agri-business is currently facing
Agri-inputs

Distributors

Agri-inputs

Digitized Information
HumanResorces
AgriInputs

Administ
rativeSales

Farming

IR Day: Health & Crop Sciences

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Ⅴ-3

Create & Expand an
Antiviral-product Business
Development ofactiveingredients
 Improve quality ofexisting active
ingredients

Actionitems

BusinessCreation

Product
portfolio
expansion
 Development of applied
technology for resin /coating use

 Discovery / Development of devices
development /(e.g.)
introduction of Optical film
new active ingredients

Sales
expansion
 Coordination &collaboration with
Sumitomo Chemical’sgroup companies, such as
Sumika Environmental
Science Co., Ltd.

 Smartphone case(e.g.) Natural plant extracts
 General-purpose
plastic films(buttons /touch panels onvending machines,elevators, etc.)

Creating a new, core business pillar in the Environmental Health
Division in response to societal demand for COVID-19 containment
IR Day: Health & Crop Sciences20On-going Profit Improvement Activities
Ⅴ-3 in the Methionine Business

ManufacturingLogistics

Increase output withminimal CapEx
 Shut down
aging facilities to savemaintenance costs
 Cost reduction

Inventory managementwith DX Rationalization ofinternational shippingcosts

Sales & Marketing
Procurement
Reducing the purchase priceof key raw materials

IR Day: Health & Crop Sciences

Optimization of focused sales
territories / key accounts
 Efficient use of sales force

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Expansion of the Animal Nutrition
Ⅴ-3
Business Product Portfolio
 The following pipeline products foranimal nutrition are
under development

Pipeline E

Pipeline F
Pipeline G
For cattle

For poultry

For hogs
Weight gain

BusinessCreation

GuanidinoaceticAcidFor poultry
Increased feed
efficiency/Increasein muscle mass

Increased
feed efficiency

Essentialamino acids

IR Day: Health & Crop Sciences22Promote the Nucleic Acid Medicine
Ⅴ-3 Business (1)BusinessCreation

 Supply active ingredient of nucleic acid drug for Covid-19
 Bonac Corporation and Fukuoka Institute of Health &Environmental Sciences are jointly screening candidate
substances that can disintegrate virus genes

 A candidate substance will be selected by the end of 2020.
Production will commence in early 2021.
The virus adheres toa cell membrane

Bonac Nucleic Acid

Disintegrating the virus genes

It enters the cell

IR Day: Health & Crop Sciences

Virus genes flow out
in the cellProliferated viruses are
released outside the cell23

Promote the Nucleic Acid Medicine
Ⅴ-3
Business (2)BusinessCreation

 Supply long-chain RNA for genome editing use
 Supply long-chain RNA for Crispr‐Cas9 genome editing technology(which won the Nobel Prize in Chemistry in 2020) The only technology in the world that enables the manufacture ofa large amount of high-purity long-chain RNA under GMP conditions

Cas9DNAgRNA

IR Day: Health & Crop Sciences

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ⅤHealth & Crop Sciences Sector

1

Performance Trends

2

Contribution to the Containment of05
the Infectious Disease Pandemic

3

Vision & Growth Strategy

07

4Performance Outlook

250325

Ⅴ-4 Top-line Growth Going Forward
Acquisition of
ECC (India)

Global

FY2014
Innovation Business
CreationAcquisitionof MA (US)Acquisition ofNufarm (LATAM)

FY2016FY2017

Acquisition of
BRA (Australia)

FY2019FY2021

INDIFLINTM
Launch in LATAM

Vision for Revenue GrowthNewproducts(e.g.B2020)

Existing
products

Expanded footprint
×New product launches

Existing
Sales
Potential
Existing
footprint

IR Day: Health & Crop Sciences

Strive to achievestrong revenue growth byleveraging past strategic
investments in a
multiplicative way

Expanded footprint(e.g. LATAM)

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PerformanceOutlookintheⅤ-4
Health & Crop Sciences Sector
Core Operating Profit（billion JPY）

Revenue Growth80• B2020/A2020 Launches• Biorational Business Expansion• Growth in LATAM / India

Profit Improvement
Revenue Growth

31
2.1





FY2019ActualFY2020 FY202X
Forecast

IR Day: Health & Crop Sciences

Forecast

Strengthen cost competitivenessof the methionine business
Differentiate our proprietary crop
protection products from generics
Optimize operating expenses

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Cautionary Statement
Statements made in this document with respect to Sumitomo Chemical’s current plans,estimates, strategies and beliefs that are not historical facts are forward-looking
statements about the future performance of Sumitomo Chemical. These statements
are based on management’s assumptions and beliefs in light of the information
currently available to it, and involve risks and uncertainties.
The important factors that could cause actual results to differ materially from those
discussed in the forward-looking statements include, but are not limited to, general
economic conditions in Sumitomo Chemical’s markets; demand for, and competitive
pricing pressure on, Sumitomo Chemical’s products in the marketplace; Sumitomo
Chemical’s ability to continue to win acceptance for its products in these highly
competitive markets; and movements of currency exchange rates.

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