February 9, 2022
Kuraray Co., Ltd- Every employee aims to achieve our vision together with passion. Kuraray Group new Medium-Term Management Plan “PASSION 2026”

In line with our long term vision “Kuraray Vision 2026” for our centennial in 2026, and newly
formulated our long term sustainability vision, we have started 5 years new Medium-Term
Management Plan “PASSION 2026”.
1. Long term vision “Kuraray Vision 2026”
Kuraray’s mission is: “For people and the planet—to achieve what no one else can.” Based on this,in 2017 the Company established the Kuraray Vision 2026 long-term vision, which we aim to realizeby 2026, the centennial of the Company's founding. When formulating the new medium-term
management plan “PASSION 2026”, which starts from 2022, we partially revised this vision, adding
the message “contributing to customers, society, and the planet” to clarify that we give back to a wide
range of stakeholders. The new Kuraray Vision 2026 outlines the aim of being a: “Specialty Chemical
Company growing sustainably by incorporating new foundational platforms into its own technologies
and contributing to customers, society, and the planet.”
2. Sustainability Long Term Vision
We have formulated a long-term sustainability vision to promote sustainability as an united group.
Long-term sustainability vision"As a sustainability leader, Kuraray will develop innovative solutions with unique products andcleaner technologies to improve the natural environment and enhance quality of life for people
everywhere."
As one of initiative for long-term sustainability vision, we aim to reduce Scope 1 and 2 GHG
emissions by 30% from 2019 levels by 2030 to achieve net zero carbon emission in 2050. In addition,
to respond sustainability issues that are getting more and more important, we reorganized the CSR
Committee and established the Sustainability Committee, chaired by the president, in January 2022.
Under the new organization, we will promote initiatives to solve material issues.
3. Overview of new medium-term management plan “PASSION 2026”
In new medium-term management plan “PASSION 2026”, we set “Our Challenges” that we shouldtackle for Kuraray group to continue to grow. Every employee aims to achieve our vision together
with passion.

(1) Our challenges - 3 challenges -①Sustainability as an opportunityIn order to realize our long-term sustainability vision, we have formulated a medium-termsustainability plan. We have defined the direction of our effort to tackle materiality issues using the 3Ps, Planet, Product and People. Particularly in initiative for Product, we adopt Portfolio Sustainability
Assessment (PSA), an objective product portfolio assessment index established by WBCSD (WorldBusiness Council for Sustainable Development), that is being steadily introduced by chemical
manufacturers in Europe. Using PSA, we aim to shift to a business portfolio that emphasizes socialand environmental value.

Sustainability Medium-Term Plan
PlanetProductPeople
Improving the earth’s
Pursuing innovations inCreating an inclusive
environment
sustainable products
workplace・Curb global warming(reducing・

GHG

Raise the ratio of eco-・

Strive harder to ensure

friendly products

occupationalsafety,emissions)・

Circular economy

facility・

Save energy

・

Sustainabledisaster prevention

・

Improve water usage

procurement・

intensity・

waste

reductionmeasures,takeemissions・

TCFD

that

chemicalonchallenging

Humanresource

development・

substance・

cultureendeavors・

landfill disposal volume
ManageAandencourages those whoImplement

strictly management of・

security

Workforceinwhich

diverse people inspire
one another・Socialcontribution

activities②Innovations starting from networking
In January 2022, we established the Innovation Networking Center in order to accelerate thecreation of innovation through cross-organizational collaboration with each division within thecompany and close collaboration with customers and partner companies. We will expand existingbusinesses and create new businesses with an eye to M&A and alliances with other companies.
③Transformation of people and organizations
In order to promote digital transformation (DX) throughout the company, we newly established theGlobal Digital Transformation (GDX) Promotion Office in January 2022. The GDX Promotion Officeplays a central role in advancing process transformations using digital technology, aiming to realize
the Kuraray Group DX Vision.
DX vision
Improve Competitiveness, continuously evolve and contribute to the world as a “Digitally savvycompany”
We try to improve digital literacy and aim to become an organization that makes decisions basedon data. In addition, we will use digital technology to make our operations more efficient and improve
productivity. We will also work on simulations of research and development and production
technologies, which will lead to reforms in customer experiences and the creation of new businessmodels.
We aim to become a company that grows sustainably through the implementation of concretemeasures against these three challenges.
(2) Management Targets①Numerical Targets – Net Sales / Operating Income
Net Sales
Operating Income
Exchange rate
Domestic Naphtha

FY2021 Results
629.4 billion yen
72.3 billion yen

FY2024 Plan
680.0 billion yen
80.0 billion yen

110 JPY/USD
130 JPY/EUR
48,000 JPY/kl

110 JPY/USD130 JPY/EUR
58,000 JPY/kl②Numerical Targets – Financial KPI
ROIC
EBITDA※ROE

FY2021 Results
6%
131.3 billion yen
7%

EBITDA margin(reference)

21%※EBITDA＝Operating Income＋Depreciation and Amortization

FY2026 Plan
750.0 billion yen
100.0 billion yen

FY2026 Plan8%
170.0 billion yen
10%23%

③Numerical Targets – Non-financial KPI
TargetResults in base year

GHG emissions(Scope1, 2)

Sales ratio of products contributing
to natural and living environment
Ensuring Diversity of Core HumanResources

3,230kt(in FY2019)

46%

FY20302,230kt(30% less than base year)
FY2026

60%FY2030

25%(in FY2020)

12%(in Sep 2021)(Ratio of managers in Japan who arewomen, foreign nationals and mid-careerhires, excluding production sites)④CAPEX
We plan ¥380 billion (decision base) of CAPEX during 5 years, medium-term management
plan “PASSION2026” period, mainly for growth and strategic investment. Out of ¥380 billion,
we plan ¥30 billion for GHG emission reduction, but we pay attention to future technologicaltrend and try to introduce GHG reduction technologies as early as possible.

【Main Investments】＜Growth Investments＞
・ Build a new 〈EVAL〉 plant・ Invest in projects related to LiB anode materials
・ Increase optical-use poval film
production capacity
・ 〈GENESTAR〉second-phase construction
・ Increase〈VECSTAR〉production capacity
・ Expand facilities for water-soluble PVA film
・ New plant for liquid rubber
・ Expand facilities for dental materials＜Strategic Investments＞
・ Invest in GHG emission
reduction
・ Build a new research center・ Invest in DX-related projects⑤Financial Strategies
We expect ¥600 billion of Operating Cashflow during 5 years, medium-term management plan
“PASSION 2026” period, and plan ¥380 billion of CAPEX on a decision baseWe assume ¥100 billion for M&A and consider to expand business area where we prioritize
resource allocation such as high-performance plastics, dental materials and activated carbon
etc.
⑥Shareholders Return
The Company positions the distribution of profits to all shareholders as a priority management
issue. In medium-term management plan “PASSION 2026”, our basic policy is to ensure a total
return ratio of at least 35% as a proportion of net income attributable to owners of the parent,
and an annual dividend of at least ¥40 per share. We will strive to enhance shareholder returns
though the expansion of profit.

Reference : Net Sales and Operating Income by segment(Billion JPY)

FY2021 Results

FY2024 Plan

FY2026 Plan

DifferenceNet

OperatingNet

OperatingNet

OperatingNet

Operating

Sales

IncomeSales

IncomeSales

IncomeSales

Income(FY2026 vs FY2021)

Vinyl Acetate
Isoprene
Functional Material
Fibers and Textiles
Trading
OthersAdjustment

Total

304.7
61.9

58.3
6.1

330.0
75.0

66.0
5.0

350.0
90.0

77.0
10.0

45.3
28.1

18.7
3.9

142.4
61.1
144.0
44.3
(129.1)
629.4

8.7
5.6
4.8
1.2(12.4)
72.3

155.0
63.0
60.0
47.0(50.0)
680.0

11.0
6.0
5.0
2.5(15.5)
80.0

175.0
65.0
70.0
52.0
(52.0)
750.0

18.0
7.0
6.0
3.0
(21.0)
100.0

32.6
3.9(74.0)
7.7
77.1
120.6

9.3
1.4
1.2
1.8(8.6)
27.7* We adopt “Accounting Standards for Revenue Recognition (ASBJ Statement No. 29)” since 2022. This accounting standards arereflected in Net Sales and Operating Income after FY2024.