Medium-Term Management PlanFYE 3/2023 - FYE 3/2025

Stella Chemifa Corporation

May10, 2022

Contents
I
II
III

IV

V

Management philosophy, company motto
Review of the second medium-term management plan
Third medium-term management plan
Positioning
Basic issues
Numerical targets
Allocation of management resources
Initiatives by business field
1. High-purity chemical business(1) Semiconductor field(2) Other fields(3) R&D
2. Transportation business
Strengthening of management foundations

3
4
9
11
12
13

15
20
25
28
30

I

Management philosophy, company mottoManagement philosophy
1. A sound and reliable company
With the utmost consideration to the health and safety of our employees, we will build a company that is sound andcontinues to be reliable.

2. Pursuit of technology
We will maintain our attitude of pursuing technological innovation.

3. Wisdom and creativity
With an expansive vision, we will be creative and innovative with wisdom and strive to create new value.

4. Spirit of challenge
All our employees will unite as one as they strive to achieve our goals with a strong sense of purpose.

Company motto
1. Be healthy, 2. Be loyal, 3. Be brave, 4. Cultivate wisdom, 5. Be responsible

3

II

Review of the second medium-term
management plan

(1) Numerical targets
Numerical targets for the second medium-term management plan (final year: FYE 3/2022)

Sales Revenue: 33 billion yen / Operating profit: 4 billion yen
Sales Revenue(100 million yen)

373

380

Operating profit(100 million yen)
50

46
41

370

40

40

360
350

30
337

340

329

330

330

320

24

20
10

310
3000

0
FYE 3/2020

FYE 3/2021

Sales Revenue (planned)

FYE 3/2022

Sales Revenue (result)

FYE 3/2020

FYE 3/2021

Operating profit (planned)

FYE 3/2022

Operating profit (result) Both sales and operating profit in the final year of the second medium-term management plan exceeded the planvalues.
(* Review of numerical targets in May 2021)(1)

A review of the operation of “export controls for South Korea” was carried out by the government in July 2019, and although sales in thesemiconductor field declined, sales exceeded the plan value due to efforts such as the strengthening of sales activities to Japan andother regions outside of South Korea, and the expansion of sales of enriched boric acid and other items in other fields.

(2)

Although raw material prices increased more than expected, operating profit exceeded the plan value due to efforts focusing on
profitability such as price pass-through and cost reductions.
4

II

Review of the second medium-term
management plan

(2) Business

Semiconductor and liquid crystal field
Activity policy ofthe second
medium termState of implementation* Incidental event: Review of the operation of “export controls for South Korea”
in July 2019

Towards the activity policy of
the third medium term
Sales in the South Korean market
decreased, and it will be important
to continue to expand sales in otherregions

Strengthen production
capacity and expand
business〇 Investment pending due to lower sales volume
than planned because of changes in the South
Korean market〇 Increase in the filling process volume due to userchange is an issue

Prioritize filling capacity andproduction balance at each plant

Implementation of sales
plans by region〇 Expand sales outside of the South Korean market〇 Maintain top share in Japan〇 Expand sales in Taiwan and Southeast Asia inline with market growth

Maintenance of share andexpansion of trade in line withusers’ investment plans〇 Efforts to expand suppliers of raw materials

Promote confirmation of the qualityof raw materials and continue toexpand business partners〇 Certain level of results from technical interviews
with users and the promotion of sales R&D
meetings, etc.

Continue to promote as a powerfultool in sales activities

Reduction of
procurement risk

Promotion of technical
sales

5

II

Review of the second medium-term
management plan

(2) Business

Battery field
Activity policy of thesecond medium termState of implementation

Towards the activity policy of
the third medium term

[Production / sales]〇 Establishment of a production
system for additives for lithium-ion
secondary batteries and cost
reductions〇 Sales of electrolytes (LiPF6)
manufactured by BDX*

〇 Development of new additives forlithium-ion secondary batteries〇 Development of new products
compatible with future batteries〇 Demand in the Chinese market has increased
rapidly, the power map of players haschanged, centered on Chinese
manufacturers, and market competition isintensifying〇 Although the sales volume of additives forlithium-ion secondary batteries did not grow,cost reductions were promoted〇 Prioritize shipments of BDX-made electrolytes
for lithium-ion secondary batteries to China〇 Aim to increase sales basedon the diversification ofcustomers〇 Aim for the adoption of new
additives for lithium-ion
secondary batteries withhigh added value[R&D]〇 Realize the development of new additives forlithium-ion secondary batteries〇 Focus on the adoption of thecompany’s technology for
future secondary batteries〇 In research focused on the future, we worked
with priority on all-solid state batteries* BDX: Quzhou BDX New Chemical Materials Co., Ltd. (China: an affiliated company accounted for using the equity method) 6

II

Review of the second medium-term
management plan

(2) Business

Other fields
Activity policy of thesecond medium term
GMP-compliant products
Expansion of sales (tinfluoride)State of implementation
Certain level of results mainly in the US(However, growth in the US market hasreached its peak)

Towards the activity policyof the third medium term
Cultivate new markets andexpand sales of tin fluoride asa whole〇 Further expansion of sales
in overseas markets

Expansion of sales ofenriched boric acid

Results of sales expansion in Japan andoverseas〇 Decide capital investment
from the perspective of longterm demand forecasts andprofitability

Strengthen searches forseeds that will lead to thedevelopment of new
products

Collaboration between R&D Department
and Sales Department is strengthening andyielding a certain level of results

Further strengthening ofresearch promotion capabilities
looking at the process overall
7

II

Review of the second medium-term
management plan

(2) BusinessTransportation business
Activity policy of thesecond medium termState of implementation

Execute work between
groups safely and securely

Investments in warehouse renovation,
vehicles, etc., and securing of personnel

Appeal to international
intermodal services andpromote profit-oriented
transactions

Further enhance thecompliance system〇 Implement company-wide efforts intransportation such as a review oftransaction prices〇 Also make unit price adjustments, etc.,
in accordance with turnover rates tosecure profits with warehouses〇 Expand the introduction of drive
recorders and digital tachographs〇 Reduction of the burden on drivers
through recruitment of personnel

Towards the activity policyof the third medium term
Continue to promote theimprovement of businessbases

Continue to promote effortsemphasizing profitability

Continue to strengthen thecompliance system

8

III

Positioning of the third medium-term
management plan
Vision of the company in ten years’ time

Technical capabilities

Promote expansion as required
Expand production bases in the right places, including overseas

Business
type

Growth axis

Scale

Efforts aimed at the vision of the company in ten years’ time

Chemicalmanufacturer

Chemicals trading
company

Transportation

Key investment targets

Human resources

R&D

・ Investment in development
・ Organizational management with acompany-wide perspective
・ Development of the future generation
by directors and department
managers

Business fields

・ Improvement of hardware
・ Effective use of R&D expenses
・ Transfer of manufactured items to
production
・ Development of human resources andexpansion of personal networks
through collaboration with universities

Semiconductors
Main field , respond to future
semiconductors
Healthcare
New products to be launched in
addtion to tin fluoride

Second medium-term
management plan

Batteries
Work on the next batteries
Power
Products that contribute to thesafety of nuclear power

FYE 3/2030

FYE 3/2020
First medium-term
management plan

EnergyThird medium-term
management plan

Fourth medium-term
management plan

Fifth medium-term
management plan

Realize sustainable growth by stabilizing and expanding our business portfolio
9

III

Positioning of the third medium-term
management plan
Business portfolio management➢ Basic policy
Aim for sustainable growth and the improvement of medium to long-term corporate value by “consideringbusiness plans and the allocation of management resources,” “implementing various measures” and“conducting performance evaluations and analysis” on an annual cycle.

AnnualThird medium-term management plan
< Review of business portfolio >Transportation
business
Medical business* March 4, 2022 press release< Consideration of the allocation ofmanagement resources >Capital Expenditures
R&D investment
Human resource investment

Returns to shareholders

Board of Directors
Formulation of annual plans andimplementation of measures

High-purity chemicalbusiness

 Evaluation for each fiscal year
Quantitative evaluation (loss or
profit, efficiency, etc.)
Qualitative evaluation (future
outlook, superiority, etc.)
 Confirmation of progress each year

State of cash flows
State of progress of investment,
etc.
Necessity for review of plan
10

III

Basic issues of the third medium-term
management plan

Basic issues

Semiconductors

EnergyOther products

R&D Aim for sustainable business growth while trialing new initiatives
 Promote the development of new products that make use of unique technologies
 Responding to social demands as a listed company


Reorganization of priority sales areas in association with changes in the South Korean market
Expansion of sales of products (functional chemicals) that will differentiate us from other companies
Strengthening of filling capacity at manufacturing bases

 Expansion of sales of enriched boric acid and consideration of the production system
 Expansion of users of additives for lithium-ion secondary batteries Expansion of sales of tin fluoride in growth markets






Development of future etching solutions required in semiconductor manufacturing processes
Development of battery materials matched to future secondary battery development trends
Development of neutron shielding composite materials in the nuclear power field
Development of applications for inorganic fluorine compounds by nanoparticulation
Efforts towards future R&D themes

Management

 Promotion of information disclosure required by society as the Prime Market
 Promotion of the digitalization of work

Transportation
businessPromote efforts focusing on profitability while securing sales
Establishment of a stable business base (securing, development and establishment of personnel)
Continued strengthening of the compliance system
11

III

Numerical targets of the third medium-term
management plan
[Sales target]
FYE 3/2023
FYE 3/2025

37.5 billion yen↓
40.0 billion yen[Operating profit target]
FYE 3/2025
5.5 billion yen[ROIC target]
FYE 3/2025
7.3%[Sales](100 million yen)

400

400

375

375
350

325

300
0

FYE 3/2023

FYE 3/2025
12

III

Allocation of management resources in the third
medium-term management plan
➢ Basic policy
Implement growth investments and shareholder returns in a balanced manner with awareness of along-term perspective towards capital efficiency, profitability and sustainable growth.

3-year operating CF*1+
Cash on hand *2

Growth investments

Management
resources during
the third mediumterm management
plan

About 2 5 bi l lion ye n
Returns toshareholders*1 Before deduction of R&D
expenses*2 Excluding operating funds

Capital / I T
investment
Ab o u t 1 3
billion yen

R&D investment
Ab o u t 5 b i l l i o nyenFlexible
allocation

Dividends➢ Equipment renewal➢ Investment for expanded / increased
production (semiconductors, enrichedboric acid, etc.)➢ Continued investment in digital
infrastructure➢ Construction of R&D building➢ Materials for future
semiconductors and batteries➢ Investment for construction of the pillars offurther growth➢ Sustainability-related investments➢ Allocation to the acquisition of treasury stock➢ Stable dividends in accordancewith profit growth13

IV

Initiatives by business field

1. High-purity chemicalbusiness(1) Semiconductor field(2) Other fields(3) R&D
2. Transportation business

14

IV

Initiatives by business field(1) Semiconductor field<1> Business environment[2022 global market forecast by product]
650,000
600,000[USD 1 million]

550,000[Long-term market prospects]
 Since the pandemic of COVID-19, demandfor PCs, tablets, Wi-Fi devices, etc. has
increased and the semiconductor market
has grown positively due to an increase indata communication volumes owing to theprogress of 5G

500,000

 Due to the resumption of economic
activities, semiconductor demand has
expanded widely in automotive andindustrial applications in addition to theabove items

450,000
400,000
350,000

300,0000
2018

2019

2020

2021

2022

* Source: World Semiconductor Trade Statistics (WSTS)

 Forecast for further growth based on theview that end-market demand will continue
to be strong
15

IV

Initiatives by business field(1) Semiconductor field<2> Key issues
Review of thesecond medium
term

Business
environment

 Shift the sales composition from the South Korean market to other markets
 Strengthening of filling capacity and balancing of production capacity
 Maintenance of share and expansion of trade in line with users’ investment
plans Expansion of suppliers of raw materials
 Promotion of technical sales Global semiconductor demand continues to growKey measures of the third medium-term management plan
 Reorganization of priority sales areas
 Expansion of sales of products (functional chemicals) that will differentiate us fromother companies Strengthening of filling capacity and balancing of production capacity at
manufacturing bases
16

IV

Initiatives by business field(1) Semiconductor field<3> Activity policy(1) Reorganization of priority sales areas
 Japan and Taiwan: Steady expansion of sales corresponding to users’ investment plans Europe, US, Southeast Asia : Expansion of sales in markets where political support can be expected China: Acquisition of commercial rights in regions where growth can be expected South Korea: Promotion of sales handling in accordance with the situation[Image of ratio of sales volume by market]

South Korea
China
Europe, US
Southeast Asia
TaiwanJapan

FY2018FY2020

FY2024

Sales volume is expected to recover to near the level prior to the market changes in FY 2024 due to thereorganization of priority sales areas overall

17

IV

Initiatives by business field(1) Semiconductor field<3> Activity policy(2) Expand sales of functional chemicals
 Add functionality and expand sales of chemicals that can be differentiatedfrom products of other companies
 Focus on technical meetings with users(3) Strengthening of filling capacity and balancing of production capacity
at manufacturing bases
 Increased small and medium-sized container filling capacity
 Promotion of the balancing of filling and production capacity among plants
・Container filling capacity is an issue because demand for small and medium-sized
containers is increasing in association with the expansion of users
・As small and medium-sized container filling capacity and spare production capacity differ
at each plant, make adjustments such as the transfer of control of shipping bases andthe building of a supply system from two bases for one product for each container
18

IV

Initiatives by business field

1. High-purity chemicalbusiness(1) Semiconductor field(2) Other fields(3) R&D
2. Transportation business

19

IV

Initiatives by business field(2) Other fields<1> Business environment (enriched boric acid)[Future forecast of nuclear power generation (results andforecasts, 1 million kW)]〇In terms of global scale, the trend for the use of nuclear
power generation is increasing and it is very likely to remain
at a high level(Reference) In 2022, the European Commission announced its policy
positioning “nuclear power as energy that will contributeto decarbonization”

Highforecast
Results in 2020

Share of nuclear power generation invarious countries worldwide

Pacific
Southeast Asia
Central / East Asia
High
forecast for
2030

South Asia

High
forecast for
2040

High
forecast for
2050

West Asia
AfricaEastern Europe
North / West / South Europe
Central and South America

North America
Results
in 2020

Low
forecast
Low
forecast for
2030

Low
forecast for
2040

Low
forecast for
2050

FranceSlovakia
UkraineHungary
Belgium
Bulgaria
Slovenia
Czech Republic
FinlandSwedenArmeniaSouth Korea
Switzerland
Spain
RussiaUS
Romania
UK
CanadaJapan
South Africa
PakistanArgentina
China
MexicoIndia
Netherlands
BrazilIranResults in 2019
Figures in parentheses show theamount of nuclear power generated
in 2019.
Unit: TWh, 1 TWh = 1 billion kWh* Taiwan has 31.1 TWh of nuclear power
and the share of nuclear power is 13.4%

Source: IAEA PRIS

* Prepared with reference to IATA (Energy, Electricity and Nuclear Power Estimates for the Period up to 2050 [September 2021])

20

IV

Initiatives by business field(2) Other fields<2> Key issues
Review of thesecond mediumterm Expansion of sales of enriched boric acid and consideration of the production
system Expansion of users of additives for lithium-ion secondary batteries Expansion of sales of tin fluoride in growth markets

Business
environment

 Enriched boric acid: Increased demand against the backdrop of the move toclean energy
 Tin fluoride: Expansion of sales in global oral care markets

Key measures of the third medium-term management plan Expansion of sales of enriched boric acid Determination of demand for enriched boric acid
 Expansion of sales of tin fluoride in growth markets

21

IV

Initiatives by business field(2) Other fields<3> Activity policy(1) Expansion of sales of enriched boric acid
Capture expected demand in each country’s market against the backdrop of the clean energy trend





China

: Declared that CO2 emissions will be reduced by 2030 and aim for carbon neutrality (promotion of nuclear power
generation)
France: Declared the resumption of construction of nuclear power plants (nuclear power will be a pillar of the energy mix inFrance for the next few decades)
UK: For nuclear power, promoting not only large reactor construction but also SMR and advanced module reactor (AMR)
development
Central and Eastern Europe: Moves for new plans for nuclear power plants(2) Determination of demand for enriched boric acid
Ascertain the need for investment because demand may exceed production capacity inassociation with expansion of demand (complete during the third medium-term
management plan period if judged necessary)[Enriched boric acid production capacity and demand forecast (image)]“Ascertain demand and make investments if necessary”

Demand forecast

2022

2023

2024

Current production capacity

2025

22

IV

Initiatives by business field(2) Other fields<3> Activity policy(3) Expansion of sales of tin fluoride in growth markets
 Expansion of sales in global oral care markets
 Cultivation of new applications (hoof sterilization of livestock)[Global oral care market 2020 to 2030 (PRECEDENCE RESEARCH)](USD 1 billion)

Replace existing ingredients in the oral caremarketNorth America
South America
Asia
Oceania
EuropeAfrica[Cultivation of new applications (hoof sterilization of livestock)]In the US and Canada, formaldehyde was used as the raw material for bactericidal agents with theconventional foot-bath method, but because it became a regulated substance, users changed to themethod of shooting a bactericidal agent containing tin fluoride from a portable gun, etc., or the
method of coating it on using robots.
23

IV

Initiatives by business field

1. High-purity chemicalbusiness(1) Semiconductor field(2) Other fields(3) R&D
2. Transportation business

24

IV

Initiatives by business field(3) R&D<1> Directions and themes in the third medium-term management plan
Promote R&D using the elemental technologies that are the company’s strengths in growth markets in the medium tolong-term
Field

Direction

Elemental technology of thecompany

Theme○ Improvement of chemical solutions in response to theminiaturization of semiconductor devices

Semiconductors

Develop etching solutions andcleaning solutions matched to theneeds of semiconductor
manufacturing processes〇 Ultra clean technology〇 Development of etching solutions that lead to theimprovement of semiconductor manufacturing
processes○ Improvement of the selective etching solutions usedin semiconductor manufacturing

Energy〇 Promote the development ofbattery materials that will solve
problems preventing the practicalapplication of future products andthat will contribute to higher
performance〇 Develop neutron shielding
composite materials in the nuclear
power fieldNew
applications forinorganic
fluorinecompounds○ Development of materials for all-solid state batteries〇 Closed mass production technology○ Development of materials for future secondary
batteries〇 Fluorination technology〇 Enriched boric acid manufacturing
technology〇 Improvement of additives for lithium-ion secondary
batteries〇 Development of neutron shielding composite
materials〇 Develop applications for new
inorganic fluorine compounds bynanoparticulation〇 Nanoparticulation technology〇 Cultivate new fields such as biorelated using fluorination
technology〇 Technology for low moisture
content in nanoparticle dispersion
liquid〇 Nanoparticle dispersion technology○ Development of cell culture containers○ Development of phosphor materials for future
displays〇 Development of low dielectric constant materials〇 Development of nano fillers for refractive index
adjustment

25

IV

Initiatives by business field(3) R&D<2> Issues to work on for promotion
 Establishment of a system to select research themes focusing on originalitythat lead to early commercialization
 Building of a system that can concentrate on R&D[Details of activities](1) Improvement of R&D processes When selecting themes, strengthen cooperation with Sales Department, conduct market
research and judge future feasibility
 Strengthen further in prior art surveys and patent management (establishment of specialized
human resources)(2) Creation of a system for mass production technology development for new
products whose R&D has finishedNew establishment of a department to carry out small-scale production and mass production
technology development
26

IV

Initiatives by business field

1. High-purity chemicalbusiness

2. Transportation business

27

IV

Initiatives by business field<1>Business environment
 Semiconductor demand is strong
Shipping volumes of chemicals for semiconductors, the main business of the group, can be expected to show strong
growth over the next three years against the backdrop of the growth of semiconductor demand and users’ investment plans

Blue Express, which has been entrusted with all of the group’s transportation business, will need to respondstably and with certainty

 The market for dangerous goods distribution is strong
・ Overall, chemical products are maintaining stable demand・ It is understood from the state of inquiries that the market for dangerous goods distribution that the company is working on
will trend strongly
Appeal to international intermodal services using our base network and aim to obtain the further trust of customers

 Lack of drivers, increased awareness of compliance・There is a chronic lack of drivers as an overall industry trend

・Improvements to work styles in transport business from April 2024 are being demanded socially, including theupper limit of total annual overtime hours for drivers being applied
It is necessary to secure personnel and implement labor management thoroughly to prevent overwork

28

IV

Initiatives by business field<2>Activity policy(1) Promote efforts emphasizing profitability
 Review low price transactions: Revise fees matched to costs and promote reviews of transactions
themselves Acquisition of new deals: Respond positively to inquiries, explore further demands from existing
consignors, cooperate with other departments, etc.

(2) Establishment of stable business foundations
 Hire personnel with a view to the future while looking at the age structure, and develop managers
and executives systematically Promote the acquisition of technique and qualifications using external training
 Secure vehicles and containers by type in accordance with needs(3) Continued strengthening of the compliance system Thoroughly prevent dangerous driving and overwork by use of drive recorders and digitaltachographs, reviews of operational management work, etc.
 Enhancement of employee education
 Promotion of understanding of related laws and regulations, etc.

29

V

Strengthening of management foundations

Background Increase in requests for information
disclosure in recent years[Non-financial aspects](Example) 2021 CGC revision(Efforts for sustainability issues, etc.)[Financial aspect](Example) 2019 Principles for thedisclosure of descriptive information(Enhancement of segment information insecurities reports, etc.)

 Transfer to the Prime Market from 2022
Further enhance information disclosure
including sustainability-related
information

Purpose Respond to market
disclosure requests as a
Prime Market listedcompany Implement the companystyle sustainability
management
 Consider and transmit a
medium to long-term value
creation story
 Secure stable shareholders,
reduce capital costs, andimprove corporate value

Details of activities(1) Sustainability management
 Identification of materialities Consideration of the ideal situation in themedium to long-term
 Implementation of climate change scenario
analysis(2) Integrated reports
 Preparation for the production of integrated
reports(3) Strengthening of other information disclosure Information disclosure in line with TCFD
requests
 Arrangement of matters to strengthen disclosure Consideration of content and publication

2. Promotion of the digitalization of work
Background Increase efficiency further bydigitalizing work processed in an
analog tool flow

Purpose Increase productivity, contrive manhours for new initiatives and connectthat to improvements in the quality ofwork

Details of activities Consideration and verification of
improvement plans Implementation of digitalization

Response to social demands and strengtheningof management foundations

1. Promotion of information disclosure required by society as the Prime Market

30

The matters concerning results forecasts presented in this document were prepared based on
information available as of the date of publication and do not guarantee future results. Actual
results may differ from the expected figures due to various factors in the future.
Please be aware in advance that the content presented in this document may be changed
without prior notice. In addition, the company shall bear no responsibility whatsoever for any
damage, etc., caused by a mistake, etc., in the information presented.
This document was prepared for you to understand the business of the company.
Please make decisions about investments at your own responsibility.