Taiheiyo Cement Corporation
Reference Materials of
Financial Results for the First Half of Fiscal 2010
(From April 1, 2009 through September 30, 2009)
Contents
Trend in Construction Investments and Domestic Demand of Cement

Page 1

Volume of Sales and Shipment Results by Region

Page 2Financial Results for the First Half of Fiscal 2010

Pages 3-4

Consolidated Balance Sheets

Page 5

Consolidated Statements of Cash Flows

Page 6

Forecast of Fiscal 2010

Page 7-8[Reference Information]
1. Status of the Consolidated Group
2. Change in Interest-bearing Debt
3. Change in Number of Personnel
4. Change in Capital Investment
5. Change in Depreciation Expenses
6. Change in Research and Development Expenses
7. Cement Sales in Overseas Subsidiaries
8. Financial Results of Ssangyong Cement
9. Overview of Businesses in the U.S.

Page 9Page 9Page 9Page 9Page 9Page 10
Page 10
Page 10
Page 10

Current Situation and Outlook of the Taiheiyo 10 Medium-Term Management Plan
Page 11-12

November 10, 2009

1. Trend in Construction Investments and Domestic Demand of Cement
Estimate ofconstruction
investments(in nominal terms)

Year-onyear
changeDomestic
Demand(including
imports)

Year-onyear
changeExports

Year-onyear
change(100 million yen)(%)(Thousand tons)(%)(Thousand tons)(%)

Fiscal 1995

787,523-3.6

79,743

1.4

14,995

1.4

Fiscal 1996

790,169

0.3

80,3770.8

13,389-10.7

Fiscal 1997

828,077

4.8

82,4172.5

12,427-7.2

Fiscal 1998

751,906-9.2

76,573-7.1

11,219-9.7

Fiscal 1999

714,269-5.0

70,719

-7.6

7,558

-32.6

Fiscal 2000

685,039-4.1

71,515

1.1

7,564

0.1

Fiscal 2001

661,948-3.4

71,435

-0.1

7,477

-1.2

Fiscal 2002

612,875-7.4

67,811

-5.1

7,863

5.2

Fiscal 2003

568,401-7.3

63,514

-6.3

8,554

8.8

Fiscal 2004

536,880-5.5

59,687

-6.0

9,879

15.5

Fiscal 2005

528,246-1.6

57,569-3.5

10,373

5.0

Fiscal 2006

515,676-2.4

59,0892.6

10,273-1.0

Fiscal 2007

513,281(estimated value)
479,000(estimated value)472,300(forecasted value)
431,900-0.5

58,985

-0.2

9,592

-6.6

-6.7

55,506-5.9

10,0174.4-1.4

50,087-9.8

10,672

6.5-8.6

42,663-14.8

10,000-6.3

Fiscal 2008
Fiscal 2009
Fiscal 2010
(For reference)

For FY2010, forecast by Taiheiyo Cement

First Half of Fiscal 2008

27,356-3.4

First Half of Fiscal 2009

24,446-10.6

First Half of Fiscal 2010

21,017-14.0[Sources]
Estimate of construction investments:
for Fiscal 1995 to Fiscal 2007, Ministry of Land, Infrastructure, Transport and Tourism
for Fiscal 2008 and Fiscal 2010, Research Institute of Construction and Economy (RICE)
Domestic demand of cement: Japan Cement Association

12. Volume of Sales and Shipment Results by Region
Volume of sales of cement by region (excluding imports)
Fiscal 2008
Volume ofYear-on-yearsaleschange(Thousand
tons)

(%)

Fiscal 2009
Volume of Year-on-yearsaleschangeFirst Half of Fiscal 2010
Volume ofYear-on-yearsaleschange(Thousandtons)(Thousand
tons)

(%)

(%)

Hokkaido

2,573

-5.4

2,299

-10.6

1,222

-7.7

Tohoku

3,848

-9.6

3,354

-12.9

1,459

-13.1

Kanto 1

12,005-6.2

11,241

-6.4

4,890

-8.1

Kanto 2

4,923

-4.1

4,403

-10.6

1,785

-16.1

Hokuriku

2,757

-7.3

2,578

-6.5

1,191

-9.3

Tokai

6,827

-9.2

6,379

-6.6

2,474

-18.6

Kinki

8,142

0.6

7,026

-13.7

2,731

-24.1

Shikoku

2,091

-13.9

1,824

-12.8

760

-10.4

Chugoku

3,791

-3.8

3,343

-11.8

1,392

-13.2

Kyushu

6,801

-5.4

5,892

-13.4

2,336

-14.5

Okinawa

816

-9.3

825

1.1

364

-2.9

54,575-5.9

49,164-9.9

20,604-14.0

10,017
Total
64,592
Source: Japan Cement Association

4.4
-4.4

10,672
59,835

6.5
-7.4

5,564
26,168-0.9-11.5

Domestic Total
Exports

Shipment of ready-mixed concrete by region
Fiscal 2008
Fiscal 2009
Year-on-year
Shipment
Year-on-year
Shipmentchangechange(Thousand(Thousand
cubic
cubic
(%)
meters)(%)
meters)Hokkaido
4,517
-5.2
3,874
-14.2
Tohoku
7,827
-9.4
6,835
-12.7
Kanto 1
27,409-9.6
24,155-11.9
Kanto 2
8,762
-6.2
7,579
-13.5
Hokuriku
5,922
-7.0
5,602
-5.4
Tokai
14,043-10.4
13,865-1.3
Kinki
14,321-5.8
13,610-5.0
Chugoku
7,604
-5.6
6,536
-14.0
Shikoku
4,740
-14.1
4,199
-11.4
Kyushu16,736-7.1
14,753-11.8
Total
111,881-8.2
101,009-9.7
Source: National Federation of Ready-Mixed Concrete Industrial Associations

2

First Half of Fiscal 2010
Year-on-year
Shipmentchange(Thousandcubic(%)
meters)
1,889
-15.3
2,935

-16.6

10,278

-12.8

3,088

-16.7

2,682

-5.8

5,428

-18.4

5,809

-14.8

2,721

-12.7

1,782

-8.0

5,678

-16.9

42,288-14.5

Financial Results for the First Half of Fiscal 2010
Consolidated Statements of Income(Millions of yen)First Half of
Fiscal 2009

Item

429,069
352,140
76,92972,421
4,507
591
841

-71,131-55,255-15,875-9,634-6,240
-287
51

-

503

503

1,935
3,368

2,574
4,275

639
906

Interest expenses

5,436

5,002

-433

Equity in losses of unconsolidated subsidiaries
and affiliates

3,922

-

-3,922

Other

1,897

1,857

-40

11,256-3,379
1,584
657
127
2,368
955
893
241
239
502
2,833
-3,844
3,307
-759
931
-7,3236,860-4,316
361
13
269
644
1,323
14
197
244
749
2,528
-6,201
1,926-122-4,395-937-1,222-643
142-1,723
368
-879
-44
4
246

-16

-947

-7,988-664

Operatingincome/loss

Gross profit
Selling, general and administrative expenses

IncomeInterest income
Dividends income
Equity in earnings of unconsolidated subsidiaries
and affiliates
Other
Total
Expenses

Ordinary income and loss

Cost of sales

Income (loss) from operations

Non-operating
income and expenses

Total
Ordinary loss
Gain

Gain on disposal of non-current assets
Gain on sales of investment securities
Other
Total
Loss on disposal of non-current assets
LossesChange357,938
296,884
61,05362,786-1,732304
893

Net sales

Extraordinary gain and loss

First Half of
Fiscal 2010

Write-off of fixed assets
Loss on valuation of investment securities
Business withdrawal loss
Other
Total

Loss before income taxes and minority interests
Income taxes-current
Income taxes-deferred
Minority interests in net income of consolidated subsidiaries
Net loss
Sales volume of cement
First Half of
Fiscal 2009
Domestic
8,374
Export2,144(Thousand tons)
First Half ofChangeFiscal 2010
7,362
-1,012
2,415
271

3

-304

-2,356-1,381636

Segment Information(1) Net sales(Millions of yen)
Main factors of change
Domestic cement sales decreased -8.1 bil. yen
Unit price for sales of cement in Japan increased +3.9
bil.yenDomestic
Decreased sales from companies producing
ready-mixed concrete and merchandising firms ofready-mixed concrete etc. -11.8 bil.yen
U. S. -$160 million(cement: -$78 million; ready-mixed concrete etc.:
Overseas-$82 million)
subsidiaries
China -$21 million; Asia +$11 million
Effect of foreign exchange -4.2 bil. yen

1H FY2010

ChangeDomestic

193,734

177,115-16,619

Overseassubsidiaries

71,83650,021-21,814

Total
Mineral Resourcesbusiness
Environmental
business
Construction
Materials business
Ceramics &Electronics business

265,570

227,136-38,433

51,92043,961sales of limestone, surplus construction soil, landfill-7,958 Decreasedmaterials, etc.

34,32529,057

sales due to reduced volume of excavated waste, sludge,-5,268 Decreased
etc.

49,18443,074-6,110 Decreased sales due to reduced volume of construction materials.

17,108

7,039

sales in Ceramics & Electronics business as a result of-10,069 Decreased
the market contraction due to economic downturn.

Other

56,22946,373sales in transport and warehouse business due to drop in-9,855 Decreasedhandling volumes.

Total

474,339

396,643-77,695

Eliminations or
corporate assets-45,269-38,705

6,563

Consolidated total

429,069

357,938-71,131

Cement business

1H FY2009(2) Income from operations
1H FY2010

Domestic-4,949-2,906

2,043

Overseassubsidiaries

6,710

14

-6,696

Total
Mineral Resourcesbusiness
Environmental
business
Construction
Materials business
Ceramics &Electronics business

1,761-2,892-4,654

531

395

profit due to reduced volume of limestone, surplus-135 Decreased
construction soil, landfill materials, etc.

1,770

2,186

415 Increased profit due to improved profitability of consolidated

-524

328

852

-658

-2,422-1,764

Other

1,749

1,061

-688

Total

4,630

-1,343-5,974

Eliminations or
corporate assets

-122

-388

-266

Consolidated total

4,507-1,732-6,240Cement business

1H FY2009

ChangeMain factors of change
Unit price for sales of cement in Japan increased +3
bil.yenDomestic cement sales decreased -4.4 bil. yen
Manufacturing cost reduction +1.3 bil. yen
Domestic
Impact from rationalization +3.2 bil. yen
Decreased income from companies producing
ready-mixed concrete and merchandising firms ofready-mixed concrete etc. -0.8 bil.yen
U. S. -$55 million
Overseas
China -$3.8 million
subsidiaries
Effect of foreign exchange -0.2 bil. yen

subsidiaries.
Increased profit due to improved profitability of consolidated
subsidiaries.
Decreased profit in Ceramics & Electronics business as a result of
the market contraction due to economic downturn.
Decreased profit in transport and warehouse business due to drop in
handling volumes.

[Reference information]
Foreign exchange rate First half of Fiscal 2009 average: ¥104.89 per dollar; First half of Fiscal 2010 average: ¥95.59 per dollar; difference: ¥9.30
Exchange rate at end of Dec. 2008: ¥91.03 per dollar; at end of Jun. 2009: ¥96.01 per dollar; difference: ¥4.98

4

Consolidated Balance Sheets(Unit: Millions of yen)
Cash and time deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Current assets
Property, plant and equipment
Buildings and structures
Machinery, equipment and vehicles
Land
Other
Property, plant and equipment
Intangible assets
Goodwill
Other
Intangible assets
Investments and other assets
Investments in securities
Other
Allowance for doubtful accounts
Investments and other assets
Non-current assets
Total assets
Notes and accounts payable-trade
Short-term loans payable
Commercial papers
Current portion of bonds
Current portion of bonds with subscription
rights to shares
Income taxes payable
Provision for bonuses
Provision for directors’ bonuses
Provision loss on movement of head office
Provision for loss on assignment ofbusiness
Other provisions
Other
Current liabilities

As of 3/31/09
61,052
172,62136,75812,361
46,53838,287-1,961
365,659

As of 9/30/09
60,853
153,156
38,4108,741
43,352
37,198-1,829339,883

Change-199-19,464
1,651-3,620-3,185-1,088131-25,776

173,584
151,198
173,566
57,990556,339

170,875
145,546
173,50968,751
558,683-2,708-5,651-56
10,761
2,343

21,34337,04958,392

20,66637,50658,173

-676
457
-218

103,153
84,072-9,530177,695
792,426
1,158,086

101,734
81,181-9,142
173,773790,630
1,130,513-1,418-2,891388-3,921-1,796-27,572

100,877
280,702
22,000785

77,577284,223
10,00020,785-23,299
3,520-12,000
20,000-12,087

12,087

2,292
5,740
26
428

2,488
5,253
7
-

196
-486
-19
-428

5,438

5,438

-

818
65,156484,266846
55,806474,51527-9,349-9,75073,181
34,137
232,559
34,215
1,083

63,36322,035
235,053
35,494811-9,817-12,102
2,493
1,279
-271

Bonds payable
Bonds with subscription rights to shares
Long-term bank loans payable
Provision for retirement benefits
Provision for directors’ retirement benefits
Provision for loss on business of
subsidiaries and affiliates
Provision for special repairs
Other
Non-current liabilities
Total liabilities

138

138

-

361
78,104
453,780
938,047

388
77,813435,098
909,61427-290-18,682-28,433

Capital stock
Capital surplus
Retained earnings
Treasury stock
Shareholders’ equity
Unrealized gain on other securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustments
Accumulated other comprehensive losses
Valuation and translation adjustments
Minority interests in consolidated subsidiaries
Total net assets
Total liabilities and total net assets

69,49960,74589,743-1,702
218,286
4,952
-97
4,559
-41,379-2,567-34,531
36,284220,038
1,158,086

69,49960,743
81,766-2,476
209,532
7,746
-74
4,548
-34,567-2,707-25,053
36,420220,899
1,130,513-1-7,977-774-8,753
2,793
22
-10
6,812
-139
9,477
136
860
-27,572

5

Main factors of change

Property, plant and equipment
Capital investment 18.8 bil. yen
Depreciation expenses -22 bil. yen
Loss on retirement and sales -1.7 bil. yen
Foreign exchange effects 7.2 bil. yen

Consolidated Statements of Cash Flows(Unit: Millions of yen)
Cash flows from operating activities
Loss before income taxes andminority interests
Depreciation and amortization
Decrease in notes and accounts
receivable-trade
Increase (decrease) in notes andaccounts payable-trade
Other
Cash flows from investing activities
Purchase of non-current assets
Proceeds from sale of non-current
assetsPurchase of investments insecurities
Proceeds from sales of investments
in securities
Other
Cash flows from financing activities
Increase (decrease) ininterest-bearing debt
Cash dividend paid
Other
Effect of exchange rate changes on cash
and cash equivalents
Decrease in cash and cash equivalents
Other
Cash and cash equivalents at beginning of
the period
Cash and cash equivalents at end of theperiodIncrease (decrease) in interest-bearing
debt
Bonds payable
Current portion of bonds
Bonds with subscription rights to shares
Current portion of bonds with
subscription rights to shares
Long-term loans payable
Short-term loans payable
Commercial papers
Total interest-bearing liabilities

Year-on-year change
Equity ratio (%)
Equity ratio based on market value (%)
Net assets per share (yen)Current ratio (%)

Year-on-year change
Net loss per share (yen)First Half of
Fiscal 2009
-11,794First Half of
Fiscal 2010
14,712

ChangeMain factors of change

26,506-3,844-6,201-2,356

24,61023,930-679

365

20,57020,204-5,257-23,243-17,986-27,668-342

27,325-69,031-23,649-14,552-22,504

54,479
1,144

3,381

1,062

-2,319-52,344-118

52,225

1,720

6,349

4,629

1,859

658

-1,20079,103-1,909-81,01280,498-23-80,522-2,822
1,428-1,885

2,822-3,313-1,094960

2,054-2,816
718

-788
-126

2,028
-845

60,051

56,299-3,752

57,95355,383-2,569As of 3/31/09

As of 9/30/09

Difference

73,181
785
34,13763,363
20,78522,035-9,81720,000-12,102-

12,087

12,087

232,559
280,702
22,000643,367

235,053284,223
10,000647,548

2,493
3,520
-12,000
4,181

As of 3/31/09

As of 9/30/09

Difference

15.9
11.7
195.80
75.5

16.3
9.9
197.64
71.6

0.4
-1.8
1.84
-3.9

First Half of
Fiscal 2009
-7.80

First Half of
Fiscal 2010
-8.53

6

Difference-0.73

Non-consolidated results as of 9/30/09: 368 billion yen

Forecast of Fiscal 2010
[Preconditions]・Domestic production: 42.66 million tons (down 14.8% year-on-year)
・Predicted foreign exchange rate for Fiscal 2010: 92.8 yen/ US dollar (10.69 yen higher than previous fiscal year)

Net sales(Unit: Millions of yen)
Fiscal 2010
Differences-38,333
358,081-42,776
102,501-81,109460,582-15,489
88,538-6,18961,322-18,553
91,806-10,395
16,902-12,281
101,842-144,019
820,992
9,185-83,992-134,833
737,000

Cement business (domestic)
Overseas subsidiaries
Cement business (total)
Mineral Resources business
Environmental business
Construction Materials business
Ceramics & Electronics business
Other
Total
Eliminations or corporate assets
Consolidated

396,414145,277
541,691
104,027
67,511
110,359
27,297
114,123
965,011-93,177
871,833

Cement business (domestic)
Overseas subsidiaries
Cement business (total)
Mineral Resources business
Environmental business
Construction Materials business
Ceramics & Electronics business
Other
Total
Eliminations or corporate assets
Consolidated-7,39910,154
2,755
1,696
3,840
2,423
-2,3203,826
12,222-1,045
11,176818-1,135
-317
943
4,423
1,619
-3,356
2,573
5,885
-885
5,000

8,217
-11,289-3,072

Operating income

Fiscal 2009

Ordinary income-4,880500

5,380

Extraordinary income (losses)
Income before income taxes and minority
interests-28,029-5,00023,029-32,909-4,50028,409Net loss-35,371-4,50030,871

7

-753
583
-804
-1,036-1,253-6,337160-6,176

Sales volume of cement(Thousand tons)

Fiscal 2009

Fiscal 2010

ChangeDomestic

17,25914,887-2,372

Export

4,259

5,265

1,006

Breakdown of increase/decrease in net sales of Cement business
Domestic: -38.3 bil. yen
Domestic cement sales expected to decrease -19.3 bil. yen
Unit price for sales of cement in Japan expected to increase +5.9 bil.yen
Decreased sales from companies producing ready-mixed concrete andmerchandising firms of ready-mixed concrete etc. -32.7 bil.yen
Overseas subsidiaries: -42.8 bil. yen
U. S. -$317 million
China -$14 million
Asia +$33 million
Other -$4 million
Effect of foreign exchange -12.8 bil. yen
Breakdown of increase/decrease in operating income of Cement business
Domestic: +8.2 bil. yen
Domestic cement sales expected to decrease -10 bil. yen
Unit price for sales of cement in Japan expected to increase +4.6 bil.yen
Impact from rationalization +6.8 bil. yen
Manufacturing cost reduction + 7.5 bil. yen
Decreased profit from companies producing ready-mixed concrete -0.5
bil.yenOverseas subsidiaries: -11.3 bil. yen
U. S. -$109 million
China +$7 million
Asia -$2 million
Other -$4 million
Effect of foreign exchange -0.3 bil. yen

8[Reference Information]
1. Status of the Consolidated Group(No. of companies)
As of 9/30/09 As of 3/31/10(forecast)

As of 3/31/07

As of 3/31/08

As of 3/31/09

174
15
55

174
14
54

172
14
51

170
15
50

164
15
50

244

242

237

235

229

124

129

125

121

118

94

96

87

88

87

Total of companies outside the scopeof consolidation

218

225

212

209

205

Total

462

467

449

444

434

Consolidated subsidiaries
Equity method subsidiaries
Equity method affiliates
Total of companies within the scopeof consolidation
Subsidiaries outside the scope of
consolidation
Affiliates outside the scope of
consolidation

2. Change in Interest-bearing Debt

The Company
Consolidated subsidiaries
Whole group

As of 3/31/07

As of 3/31/08

As of 3/31/09

3,399
2,702
6,101

3,420
2,482
5,902

3,650
2,783
6,433

(100 million yen)
As of 9/30/09 As of 3/31/10(forecast)
3,680
2,795
6,475

3,500
2,850
6,350

3. Change in Number of Personnel

The Company
Consolidated subsidiaries
Whole group

As of 3/31/07

As of 3/31/08

3,317
13,98817,305

3,312
14,57917,891(No. of persons)
As of 3/31/09 As of 9/30/09
3,306
15,22818,534

3,290
13,89017,180(100 million yen)
Fiscal 2010
(forecast)
155
303
458

4. Change in Capital Investment

The Company
Consolidated subsidiaries
Whole group

Fiscal 2007

Fiscal 2008

Fiscal 2009First Half of
Fiscal 2010

195
273
468

169
396
565

196
404
600

54
134
188

5. Change in Depreciation Expenses

The Company
Consolidated subsidiaries
Whole group

Fiscal 2007

Fiscal 2008

Fiscal 2009

148
241
389

176
259
435

228
289
517

9

(100 million yen)
Fiscal 2010
First Half of
Fiscal 2010
(forecast)
106
114
220

213
259
472

6. Change in Research and Development Expenses
Fiscal 2007

Fiscal 2008

Fiscal 2009

42
10
52

40
11
51

40
10
50

The Company
Consolidated subsidiaries
Whole group(100 million yen)First Half of
Fiscal 2010
Fiscal 2010
(forecast)
18
422

7. Cement Sales in Overseas Subsidiaries (Sum of the sales of the consolidated subsidiaries)(10 thousand tons)
Fiscal 2010
Fiscal 2007
Fiscal 2008
Fiscal 2009
(forecast)
U.S.
678
579
432
287
Asia
920
974
940
962
Other regions
10
13
16
13
8. Financial Results of Ssangyong Cement
Fiscal 2007
actualSales of cement clinker
Net sales
Income (loss) from operations
Ordinary income(loss)
Net income(loss)
Outstanding balance of loans

Fiscal 2008
actualFiscal 2009
actualFirst Half of
Fiscal 2010
10 thousand tons

1,260

1,297

1,331

687
100 million won

10,383

10,155

11,723

5,535

-70

54

-156

250

-514

39

-1,653

320

317
-541
44
-1,687
As of 12/31/06 As of 12/31/07 As of 12/31/08 As of 6/30/09
9,269
10,938
9,868
11,8499. Overview of Businesses in the U.S. (Taiheiyo Cement U.S.A., Inc., on a consolidated basis)($ thousands)
First Half of
Fiscal 2010
Fiscal 2008
Fiscal 2009
Fiscal 2010
(forecast)actualactualNet sales

1,010,088

910,241

296,869

593,803

Income (loss) from operations

176,01154,013-20,388-55,429

Net income(loss)

139,170

27,019-14,049-36,815

10

42
8
50

Current Situation and Outlook of the Taiheiyo 10 Medium-Term Management Plan
1. Trend in Domestic Demand of Cement
Fiscal 2006

Fiscal 2007

Fiscal 2008

Fiscal 2009

Fiscal 2010

Fiscal 2011

Thousand tons
60,00059,089●-104(-0.2%)

58,985●

Expected demand by the
10 Medium-Term Management Plan

-3,479(-5.9%)

56,980□56,000□57,000□56,000□●55,50655,000-5,419(-9.8%)
50,08750,000●-7,487(-14.9%)Demand estimates
45,000☆
Approx. 42,600-2,600 ±α(-6.1%) ±α☆

40,00040,000 ±α

35,000(Reference)i) The Group’s production capacity:

23,630 thousand tons (at the beginning of Fiscal 2010: JCA)
*Figures include the capacity of Tosoh Corporation.
ii) Domestic sales volume (at capacity of 40 million tons): 15,440 Thousand tons (including solidification materials)

2. Current situation and review of the Taiheiyo 10 Medium-Term Management Plan
1) Comparisons between the 10 Med-Term Plan’s numerical targets and forecasted results for Fiscal 2010(100 millions of yen)
Consolidated
Non-consolidated
10 Med-Term
Fiscal 2010
10 Med-Term
Fiscal 2010
Plan
forecast
Plan
forecast
Net sales
10,229
7,370
3,690
2,800
Operating income
792
50
246
10
(Operating margin)

Income (loss) fromoperations
Net income(loss)(7.7%)(0.7%)(6.7%)(0.4%)

635

5

266

30

278

-45

134

15

2) Review of numerical targets
Based on the following assumptions, net sales will fall to “¥729 billion (consolidated) and ¥272 billion
11(non-consolidated).” Even though in this difficult situation, we are planning to implement various measuresin an effort to maintain adequate profit levels to enable us to deliver stable dividends, investments for growth
and an improved financial position.
(Assumptions) Domestic demand: 40 million tons, other factors in line with current conditions
Overseas and the group companies’ business performance: in line with Fiscal 2010 forecasts
3) Review of the positioning of the 10 Medium-Term Management Plani) Numerical targets and approaches are kept unchanged
Our objective:
To become a leading Pacific Rim company
Basic approach:
To focus on core businesses and build a balanced earnings structure between
domestic and overseas operationsii) To position the period through Fiscal 2011 as a stage to strengthen our foundations for growth strategies
3. Transition programs for growth strategies- Prompt and steady implementation of “structural reform without exceptions”- Expansion of growing businesses
Specific issues to be addressedi) To review and restructure the domestic production structure, including contract sales and production, inorder to respond to a sharp decrease in domestic cement demand: Assumption: forecasted domestic demand of cement 40 +/- α million tons.
: Our current export stands at an amount greater than 4 million tons. However, overseas sales are
unprofitable compared to domestic sales; therefore we will gradually reduce the volume of export fromJapan.
: While giving due consideration to already developed relationships and the key intent of existing contracts,
we will propose stricter terms in negotiations with contract sales and production firms in light of thesignificantly falling demand.
: Prior to the decision regarding specific actions (selection of plants in which cement production is to besuspended), we will consider the possibility of halting the cement kiln to cope with demand changes.
: We will pursue every possible way to transform the application of certain cement production-related
facilities, principally to waste treatment facilities.
ii) Review of the domestic cement sales structure and streamlining of logistics: To review the structure of sales and logistics systems to deal with the drastic decline in domestic demand.
: To embark on an urgent reduction in logistics costs in order to achieve an annual cost reduction of 2-3
billion yen.
iii) Revision of organization and personnel structure: To achieve a streamlined structure through eliminating and consolidating organizations.
: To establish a competitive personnel structure that can cope with decreasing domestic demand.
iv) Growth strategies for overseas business: Rolling out environmental technologies in the overseas markets, exploration of opportunities in new
countries and regions, strengthening of the downstream business development.
The details, times of implementation and effects on the Group’s income of the growth strategies will be disclosedby the end of March 2010.

12