November 10, 2011
Taiyo Nippon Sanso Corporation

New Medium-Term Business Plan “Gear Up 10”
As part of its long-term plan to boost sales to ¥1 trillion by fiscal year 2021 at thelatest, Taiyo Nippon Sanso Corporation (President Yasunobu Kawaguchi) has
compiled a new Medium-Term Business Plan, titled “Gear Up 10”― Challenges in
Becoming a Global Company III. This three-year business plan began in fiscal year
2012. It is the first phase of the trillion yen plan.
For us to expand our global presence and ensure sustainable, profitable and efficient
growth, we need to meet our “Triple 10” medium-to-long-term business targets (a10% share of the world market, an operating margin of 10% or higher, and a rate of
Return on Capital Employed (ROCE) of 10% or higher). At the same time, we needto create enhanced longer-term corporate value following the five key strategies in theprevious medium-term management plan, based on six core concepts. The five keystrategies are: (1) concentration of management resources in growth markets andregions, (2) strengthening of upstream strategies, (3) promotion of M&A strategy, (4)implementation of cost reductions, and (5) strengthening of Group management, allbased on the core concepts of (1) strengthening compliance and ensuring safety andquality control, (2) efficient management rigorously pursuing cost and labor benefits,(3) strengthening regional sales bases, (4) focusing on the cylinder business, (5)strengthening R&D, and (6) continuing proactive investments.
1. Overview of the Previous Plan: “Stage 10”-Challenges in Becoming a Global
Company IIIn fiscal year 2009, TNSC set itself the target of becoming a global player. It also set
3 benchmarks for medium-to-long-term progress, the “Triple 10” targets, and adopted
a three-year medium-term plan, “Stage 10,” for the fiscal years 2009-2011.
Although we were unable to achieve initial targets during those three years, due to theshocks sustained by the global economic system as a result of the financial crisis thatbegan in the United States in late 2008, we took the following measures to strengthen
our business fundamentals for sustainable growth, within the framework of the five
key strategies.

1(1) Concentration of management resources in growth markets and regions
・ Continued strategic investments in major plant expansion in North America
・ Accelerated entry into new businesses in Asian markets, including Vietnam,
India and other newly emerging nations
・ Expanded businesses in China through measures such as new construction ofplant at Changxing Island, Dalian・ Aggressively expanded liquid crystal display panel and solar cell related
businesses
・ Accelerated pace of MOCVD business growth.
(2) Strengthening of upstream strategies
・ Become an established manufacturer in the fields of monosilane gas (SiH4)
and hydrogen selenide (H2Se)
・ Launch joint production of helium with Air Products & Chemicals, Inc.
(scheduled for spring 2012)(3) Promotion of M&A strategy
・ FY 2009: Acquired Five Star Gas & Gear and Aeris
・ FY 2010: Acquired Valley National Gases
・ FY 2011: Acquired Western International Gas & Cylinders(4) Implementation of Cost reductions
・ Implemented in manufacturing and logistics
・ Cut indirect marketing costs(5) Strengthening of Group management
・ Consolidated affiliated companies through integrations and closures
・ Upgraded filling facilities
Numerical targets and longer-term business benchmarks

Net sales
Operating income
Global share *1
Operating margin
ROCE“Stage 10” Targets¥600 billion + α¥54.0 billion
10%
10% or higher
10% or higher

FY2011 Results¥483.6 billion¥35.4 billion
7.6%
7.3%
7.8%

% achieved
80.6%
65.6%

*1 Calculations are based on figures from CryoGas International magazine andinvestor relations materials from various gas companies.

22. Overview of New Medium-term Business Plan “Gear Up 10” ― Challenges inBecoming a Global Company III
1) Positioning of the Plan
(1) A new start for TNSC’s 101st year(2) Getting back to our origins(3) Firmer foundations for further development, and to prepare the Company forthe next 50 to 100 years2) Basic policy
Continue and develop key strategies under the previous Plan
(1) Concentration of management resources in growth markets and regions(2) Strengthening of upstream strategies(3) Promotion of M&A strategy(4) Implementation of cost reductions(5) Strengthening of Group management
Policies(1) Strengthening compliance and ensuring safety and quality control(2) Efficient management rigorously pursuing cost and labor benefits(3) Strengthening regional sales bases(4) Focusing on the cylinder business(5) Strengthening R&D(6) Continuing proactive investments
Based on the key strategies and policies in the previous Plan, our goal is to further
create enhanced corporate value by strengthening personnel development andstrengthening business fundamentals in Japan, as well as by accelerating our overseas
expansion.
3) Numerical targets

Net sales
Operating income
Operating margin
ROCE

3

FY2011 Results¥483.6 billion¥35.4 billion
7.3%
7.8%

FY2012 Forecasts¥493.0 billion¥35.0 billion
7.1%
7.7%

FY2014 Targets¥650 billion¥60 billion
9.2%
10.8%

4) Sales by business segment

Industrial Gases BusinessElectronics Business
Energy Business
Other Businesses
Subtotal
Strategic M&ATotal

FY2011 Results¥288.6 billion¥126.4 billion¥37.6 billion¥30.8 billion¥483.6 billion－¥483.6 billion

FY2012 Forecasts¥296.9 billion¥125.7 billion¥36.6 billion¥33.8 billion¥493.0 billion－¥493.0 billion

FY2014 Targets¥365.0 billion¥158.0 billion¥38.0 billion¥39.0 billion¥600.0 billion¥50.0 billion¥650.0 billion

FY2011 Results¥24.1 billion¥8.4 billion¥1.4 billion¥3.0 billion-¥1.5 billion¥35.4 billion－－FY2012 Forecasts¥23.0 billion¥8.3 billion¥1.7 billion¥3.5 billion-¥1.5 billion¥35.0 billion－－

FY2014 Targets¥34.0 billion¥15.0 billion¥1.9 billion¥4.2 billion-¥1.1 billion¥54.0 billion¥4.0 billion¥2.0 billion¥35.4 billion¥35.0 billion¥60.0 billion5) Operating income by business segment

Industrial Gases BusinessElectronics Business
Energy Business
Other Businesses
Eliminations or Corporate
Subtotal
Strategic M&A
Efficiency savings and cost
reductions
Total

We will improve Group profitability and efficiency by aggressively expanding ourbusinesses and investing ¥100 billion in strategic M&A, and further improving
operational efficiency by cutting costs.
6) Capital investment in facilities and equity (by region)
To consolidate and grow corporate value over the longer term, we plan ongoinginvestments totaling ¥170 billion over a period of three years.

JapanU.S.
China
Rest of Asia
Total

FY2012FY2013

FY2014¥35.5 billion¥14.5 billion¥0.5 billion¥4.5 billion¥55.0 billion¥21.0 billion¥26.0 billion¥6.0 billion¥5.0 billion¥58.0 billion¥26.5 billion¥21.0 billion¥2.5 billion¥7.0 billion¥57.0 billion

Total¥83.0 billion¥61.5 billion¥9.0 billion¥16.5 billion¥170.0 billion

The above table does not include the ¥100 billion earmarked for strategic M&A
investments.

4%
48.8%
36.2%
5.3%
9.7%
100.0%

7) Growth strategy, by business segment
Measures for each business segment under the key strategies in “Gear Up 10” are as
follows:
IndustrialGases
Business

Electronics
BusinessEnergyBusiness

OtherBusinesses(Medical,Thermos)

Measures
Overseas・ Strengthen profitability of already completed mergers and acquisitions in theUnited States (consolidate synergies)
・ Carry out further mergers and acquisitions
・ Strengthen China businesses
・ Strengthen competitiveness and profitability of businesses in the rest of Asia
・ Step up expansion into newly emerging markets such as India and South andCentral America
Japan・ Strengthen measures in growth markets such as hybrid, electric and fuel cellvehicles, and nonferrous metals (rare metals and rare earths)
・ Strengthen cost competitiveness by optimizing plant operation and systematic
facility renewal
・ Cut costs across the board in manufacturing, logistics and procurement
・ Restructure carbon dioxide production bases
Overseas
Accelerate Asia-focused business development
・ Increase TNSC’s share of the China and Taiwan markets by expanding sales ofstrategic upstream products (monosilane and hydrogen selenide gas) and winning
project orders in promising fields
・ Develop a business in MOCVD equipment through our Korean joint venture TNSKCorporationJapanExpand sales and improve profitability in growth domains
・ Increase market share in strategic upstream products (monosilane and hydrogen
selenide gas) for the LCD and solar cell markets
・ Increase sales in growth markets such as LCDs, solar cells, LEDs and powerdevices・ Improve earnings by optimizing production bases
Japan・ Strengthen division in charge of direct sales of energy to households
・ Expand sales of new materials and products using our LP gas marketing networks
・ Increase sales efficiency in all areas, through four Group marketing companies
around Japan
Overseas・ Expand market share for “Water-18O” isotope
・ Expand sales of medical-use oxygen using gas production bases in China andelsewhere
・ Strengthen production bases in China to meet global expansion of the market for
stainless steel vacuum bottles
Japan・ Expand sales of “Water-18O” isotope by building and expanding production plants
・ Strengthen marketing of medical-use gases and helium for MRI
・ Expand business of building facilities within hospitals and clinics
・ Expand marketing channels for Thermos-brand products (into electrical appliancemegastores, websites, telemarketing and other media-based as sales channels).

53. Policy on Returns to ShareholdersThe Company is committed to continuously improving corporate value and ensuring
adequate returns to shareholders.
Our priority is to ensure a consolidated dividend payout ratio of at least 25%, while
continuing strategic investments to maintain high growth rates, and after overall
consideration of consolidated earnings prospects and investment schedules. Inaddition, we will flexibly purchase treasury stock as needed to improve capitalefficiency and raise the level of shareholder returns.
Over the three years of the “Stage 10” plan, the dividend payout ratio (consolidatedbasis) was 32.0% of net income, and the shareholder return ratio (comprising
dividend payout and the effect of purchase of treasury stock) was 35.9%.
With regard to the full-year dividend, we have made no change to our ¥12 per share
forecast previously announced in the financial statement for the first two quarters of
the year ending March 31, 2012.

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