Message

Toward a more profitable, innovative,and dynamic global presence

Hiroshi Ishihara
President, Chief Executive Officer & Chief Operating Officer

This year marks the 123rd year since Furukawa Electric
was first established. Through the years, we have consistently provided products and services essential to economic andindustrial development, operating in line with our corporate
philosophy of helping to create a peaceful, enjoyable, affluent
society (the 1974 management philosophy). Looking backover the road that the Company has taken to date and thinking about the direction the Company should choose in the future, I am reminded that developing a precise understandingof society’s needs and expectations by communicating withall of our stakeholders, from our customers and shareholders to our employees, and responding accordingly throughour business and other activities to establish trust from society is crucial if we are to continue to grow and develop as acompany. I also believe that, by operating in this way, we cancontribute to the sustainable development of society.
Whilst continuing to adhere to our existing philosophy,
we have also adopted a new Furukawa Electric Group Philosophy to promote Group-wide efforts to create an affluent,genuinely sustainable society through technical innovation.
To establish a universal awareness of this as the basis for allof our activities, we have adopted a Furukawa Electric Group
Basic CSR Policy as well.
In line with this basic policy, we have stepped up activities
in areas such as legal compliance, safety, environmental conservation and risk management. We have also establisheda new CSR Division, through which we intend to promote
initiatives on an integrated groupwide basis to further oursocial activities and fulfill our responsibilities to society.
As specific initiatives during fiscal 2006, in addition toboosting business and operational efficiency within theGroup, promoting strategic alliances and reviewing and expanding our overseas operations, we have also tightened ourcompliance activities and improved our risk management
and internal control capabilities. We intend to continue topush ahead with these activities in the future.

As part of our new Innovations 09 initiative, which waslaunched in fiscal 2006, we are aiming to focus on technicalinnovation and become a creative, highly profitable company with a global presence. Working towards a consolidated
sales target of 1 trillion yen and an operating margin of 7%
by fiscal 2009, we have pursued initiatives geared towards
strategic investment in priority areas and generating capital,by reviewing and reducing inventory assets, to fund creative
activities such as research and development. Despite negative factors such as the impact of rising copper prices during fiscal 2006, we nonetheless recorded 1.1 trillion yen inconsolidated sales and managed to achieve operating profit
totaling 53.6 billion yen, the second highest in our history.
We will continue to push ahead with operations in fiscal 2007
in an effort to achieve all of the targets under Innovations
09, based around CSR activities as the cornerstone of ourbusiness.
We are planning to hold a comprehensive Furukawa Electric Group technology exhibition, FURUKAWA INNOVATION EXPO ’07, in October 2007. In addition to showcasing
the Group’s overall technical capabilities and our ability tooffer our customers optimum solutions, we intend to show
the market and society as a whole the role that Furukawa
Electric is capable of playing in terms of resolving social, environmental and other issues through measures such as theprovision of products and services designed to provide wideranging support for social infrastructure.
We have published this CSR Report, in place of our previous Environmental and Social Report, to report back on thedetails of activities such as these. I hope you can all appreciate our reasons for doing so.
We look forward to hearing your frank opinions regarding our initiatives, both now and in the future.

Furukawa Electric Group Philosophy
CORPORATE PHILOSOPHY
Drawing on more than a century of expertise in the development and fabrication of advanced materials, wewill contribute to the realization of a sustainable society through continuous technological innovation.
MANAGEMENT PHILOSOPHY
With an eye to the future, the Furukawa Electric Group management team pledges to:• Live up to the expectations and trust invested in us by society, with fairness and integrity.
• Apply the sum total of our expertise to satisfy our customers and grow with them.
• Continuously strive to achieve world-class technological innovation, and transform ourselves in every
area of endeavor.
• Nurture human resources at every level, so that we can become a more diverse and creative organization.

Stepping up CSR activities based on a three-way
balance between profitability, environmental protection
and social contribution

Tetsuya Sato
Director, Member of the Board
Corporate Vice President
Chief Social Responsibility Officer, CSR Division
With issues ranging from compliance and product safety toenvironmental protection, companies are finding themselves facing stricter requirements to fulfill their social responsibilities thanever before. All corporate activities undertaken by Furukawa Electric is based on compliance with the rules of society and corporateethics, consideration for the environment and safety, in terms ofour products, employees and local communities. We also consider
it our duty as a company to provide products and services thatare capable of contributing to the development of society and improving people’s everyday lives. To fulfill our social responsibility
as a company to the fullest possible extent, we have set out theFurukawa Electric Group Basic CSR Policy and established thenecessary structure to oversee its implementation in the form ofour new CSR Division and the position of Chief Social Responsibility Officer (CSRO). We have also started to monitor corporate
activity in general from the standpoint of CSR and are promoting arange of other CSR-related activities on a standardized basis.
The CSR Division incorporates an Auditing Department, theExport Security Administration Department and features a newly established Administration Department. The Headquarters
is responsible for carrying out CSR activities in areas ranging
from compliance and risk management to safety, environmental
protection and social contribution. At a higher level, we haveestablished a new CSR and Risk Management Committee under
the supervision of the Board of Directors. Consisting of members of the Management Committee and chaired by the Chief
Social Responsibility Officer (CSRO), the CSR and Risk Management Committee is based on special committees in the formof the Central Committee for Environmental Management, theCentral Safety and Health Committee, the Central Compliance
Committee and the Central Quality Control Committee. Its role
is to make any necessary adjustments to new measures and ar-eas in need of improvement proposed by the individual specialcommittees, from the standpoint of CSR or in the interests ofcompanywide standardization, and then implement them accordingly. Now that we have reinforced our CSR framework inthis way, we will be able to take any necessary action to deal
with issues that conflict with CSR or that are at risk of doing so,including investigating allegations and the causes of problems,
implementing emergency or preventive measures and releasingstatements, more precisely and quicker than ever before.
The principle CSR activities that we are undertaking atpresent include organizing training in areas such as legislation and corporate ethics, undertaking initiatives designed tobolster safety education and improve safety levels throughout
the Group, expanding the range of eco-products on a Groupbasis, promoting green supplier schemes, cutting transportrelated energy consumption, achieving further reductions inwaste products, implementing soil pollution measures (at Groupcompanies also), practicing risk management for issues suchas earthquakes and other major disasters, addressing quality
issues and information security and stepping up social contribution activities. We intend to improve communication with allof our stakeholders, who represent the cornerstone of our CSR
activities, to further develop the Furukawa Electric Group’s CSR
activities and take them to an even higher level in the future.
Through efforts such as these, we hope to strike a three-way
balance within our activities themselves between profitability,environmental protection and social contribution. We regard
initiatives such as this CSR Report and FURUKAWA INNOVATION EXPO ’07 as forms of communication and seek to takeevery possible opportunity to broaden communication with allof our stakeholders as we move into the future. We look forward
to hearing your honest opinions.

