News Release (2005.3.25)
Notice of New Medium-Term Management Plan
Mitsubishi Materials Corporation has launched a two-year management plan, starting in April
2005. The new initiative succeeds a consolidated medium-term management plan that ran
from fiscal 2002, ended March 31, 2002, through fiscal 2004, ended March 31, 2004, and thesubsequent Rolling Plan, which also covered fiscal 2004 as well as fiscal 2005, ended March31, 2005.
Under the plan for fiscal 2002 through fiscal 2004, we took steps to rebuild the Company intoa superior business conglomerate. In 2003, we revised that initiative to reflect dramaticchanges in the operating climate, instituting the Rolling Plan to cover fiscal 2004 throughfiscal 2005. We focused on revamping our business and cost structures under that plan,
according particular attention to bolstering profitability and reinforcing our financial position.
Our new medium-term management plan will step up efforts to improve profitability and ourfinancial position, providing the foundations that management needs to formulate Group
growth strategies. These endeavors are in line with our objective of becoming a superiorbusiness conglomerate.
1. Rolling Plan Initiatives and Results
Overview (April 1, 2003–March 31, 2005)
1) Business restructuring
We pushed ahead with business and cost restructuring to make management more agile andbolster profitability..
2) Operational targets
Earnings (fiscal 2005)• Consolidated ordinary income: ¥50 billion• Return on assets (calculated using ordinary income): 3.1%
Financial position improvements (at March 31, 2005)• Interest-bearing debt: ¥750 billion
Main initiatives and benefits
1) Business restructuring and reorganization of headquarters• In April 2003, we shifted to a structure of core and strategic businesses to more efficiently
allocate management resources and accelerate selective concentration.
• In April 2004, we reorganized headquarters operations into the Corporate Strategy
Department, Corporate Business Department and Shared Services Center. Our goal was tostrengthen strategic planning and overall operational control as well as enhance efficiency,
while clarifying and optimizing cost loads to encourage expense reductions.
2) Cost structure reforms
We overhauled our cost structure to create a system that ensures consistent profits even inpoor economic climates.
(Note that between October 2001 and March 2004, we had targeted emergency reductions of¥70 billion in fixed and variable costs, and exceeded that goal by ¥4.5 billion.)
3) Management targets¥50 billion（fiscal 2005）

Fiscal 2005 Year-EndProjections¥50 billion（fiscal 2005）

3.1％(fiscal 2005)

3.4％(fiscal 2005)¥750 billion(at March 31, 2005）¥750 billion(at March 31, 2005)

Rolling Plan Targets
Consolidated ordinary
incomeReturn on assets(calculated using
ordinary income)Interest-bearing debt

2. Overview of New Medium-Term Management Plan1) Period
April 1, 2005–March 31, 2007
2) Basic goals
Stabilize earnings structure while harnessing the strengths of integrated management toestablish growth foundations to achieve success in core businesses.
3) Issues and management strategies
Improve stability①Combine business realignments and optimal businesses
Efficiently concentrate management resources and create the foundations for a businessconglomerate by reorganizing operations.
Overview
To date: Four core businesses (Cement Company, Aluminum Company, Metals Company, andPowder Metallurgy Products and Tools Company) + seven strategic businesses
From April 2005: Shift to business structure centered on five companies(Five companies + two divisions + affiliated corporations division)

Five companies: Cement, Metals, Advanced Materials and Tools, Aluminum, and Electronic
Materials and Components• Advanced Products and Powder Metallurgy Products and Tools businesses merged.
We decided to merge the High Performance Alloy Products business with the Powder
Metallurgy Products and Tools business, as both operations have the same customer bases in
the automotive, aerospace and other sectors. On top of that, we seek to enhance operational
efficiency by utilizing the extensive overseas marketing and sales network of the Powder
Metallurgy Products and Tools business.
We also decided to integrate the Silicon and Advanced Products businesses to create theElectronic Materials business. Silicon is primarily used as an electronic material. There aremany technological and sales commonalities with existing advanced products, so we cananticipate considerable synergies from integration.
Two businesses: Energy and Precious Metals• We will transform the Energy & System business into the Energy business, focusing on
nuclear power, geothermal power and coal.
One business office: affiliated corporations division• Our Resources & Environmental businesses will only have headquarters functions.
② Company autonomy: Toward second stage of internal company system
We plan to take the internal company system we instituted in 1999 a step further. We willbalance the interests of companies that have obtained the necessary corporate governancerequirements to achieve an efficient management system that utilizes the attributes of each inhouse company.
Specifically, in the second stage of the internal company system we will delegate authority
with regard to various personnel affairs, long-term funding and other areas to these companies,
while implementing a performance assessment system to ensure that the companies areresponsible for achieving results.
③ Improving financial position
We aim to enhance our financial position. We will do this by further reducing interest-bearing
debt on the strength of more stringent asset selection and inventory reduction.
Growth area initiatives
Strengthen research and development
We have positioned automobiles, information electronics, and the environment and recycling
as our three growth fields. We will concentrate management resources on those areas topursue research and development (R&D). We will strengthen the R&D structure to make itcollaborative with the companies. Operations in the three growth fields will work closely withsales and marketing operations to create user-oriented R&D themes and focus on marketneeds.
Key development themes• Information electronics: Networking(Encompassing such areas as telecommunications modules and high-performance surfacemounting materials)• Automobiles: Electronics(Including car parts for power electronics and wireless sensor modules)• Environment and recycling: Zero emission technologies(Including process improvements in cement and copper production)
Strengthening cost-competitiveness① Strengthening cost-competitivenessWe will strive to improve cost-competitiveness by shortening lead times, reducing inventories
and enhancing quality to push further ahead with supply chain management.
② Cutting costs
We will pursue ongoing cost reductions through joint Group purchasing and by buying lowcost raw materials around the globe.
Reforming corporate culture① Cultivating human resources
We will take the following steps in recognition that our people provide the primary support
for our operational progress.
• Establish system to train tomorrow’s managers
We will establish a structure to systematically train tomorrow’s managers while providing
more support for managers.
To reinforce consolidated management, we will also foster candidate managers ofGroup companies.
• Restructure Companywide training system
We will clarify the training plans of each operation while linking the existing Companywide
training system with the next-generation manager training program.
② Reform employee remuneration system
We will build a personnel and remuneration system based on action and results (includingprocesses). The goals are to improve the motivation of each employee, reinvigorate ourorganization and transform the corporate culture.
③ Move ahead with corporate social responsibility efforts

In December 2002, the Group instituted a risk management system and stepped upcompliance activities.
In January 2005, we established a structure to promote corporate social responsibility(CSR) activities in response to the diversification of the social structure, rising awareness ofthe need to safeguard the environment and advances in information availability. Our CSR
activities are designed to ensure that we coexist harmoniously with society and fulfill ourcommunity roles. Our CSR efforts will be integrated, transcending the traditional risk
management and compliance frameworks.
4) Management targets
Earnings objectives (for fiscal 2007, ending March 31, 2007)• Consolidated ordinary income: ¥60 billion• Return on assets (calculated using ordinary income): Greater than 4%
Targeted improvements in financial position (by fiscal 2007 year-end)• Interest-bearing debt: ¥700 billion
Reference: Broad objectives of new medium-term management plan1) Performance targets

Net sales
Operating profit
Ordinary income
Net income2) Sales of key businesses

CementMetals
AdvancedMaterials andTools
Aluminum
ElectronicMaterials andComponents
OthersCompanywide andeliminations
Net sales(Billions of yen)
New medium-term
management plan(fiscal 2007)
970
60
6030
(Billions of yen)
New medium-term
management plan(fiscal 2007)
146
270
147
13387317-130970

3) Operating profit of key businesses

CementMetals
Advanced
Materials andTools
Aluminum
Electronic
Materials andComponents
OthersCompanywide andeliminations
Operating profit
4) Financial position improvements

Interest-bearing
debt
Total assets
Interest-bearing
debt to total assets
Debt-to-equityratio(Billions of yen)
New medium-term
management plan(fiscal 2007)1415.513
105
7.5-560(Billions of yen)
New medium-termmanagement plan(fiscal 2007)
700
1,430
49.0％
Less than 3

3. Overview of Operations of Five Companies
1) Cement
Management plans
Secure stable earnings by maintaining a regional portfolio encompassing Japan, the UnitedStates, China and Southeast Asia.
Japan:
Respond to declining demand for cement by reducing costs, centeredon expanding industrial waste treatment, thus reinforcing the earnings
base.
United States:
Strengthen the cost-competitiveness of existing businesses while
expanding downstream businesses, notably in ready-mixed concrete.
China and Southeast Asia: Boost operational scale by upgrading and increasing cement
shipment and sales bases.
2) Metals
Management plans

Integrate everything from mining and smelting to copper processing to bolster earnings.
Domestic copper smelting: Cut costs by expanding recycling operations, such as byprocessing more automobile shredder residue, while improving thecost-competitiveness of copper smelters.
Overseas copper smelting: Increase electrolytic copper production at subsidiary PT.
Smelting, in Indonesia.
Copper alloy products:
Expand the range of highly profitable offerings, centered on
oxygen-free copper and copper alloys.
3) Advanced Materials and Tools
Management plans
Cultivate operations from a user-oriented perspective, concentrating on automobiles, aircraft
and information technology. Integrate advanced products operations that serve the same
customer base and expand the business scale.
Tools:Develop new products while strengthening domestic sales foundations,
tackling emerging markets overseas and expanding our manufacturing
and sales structures globally.
Powder metallurgy: Build foundations to expand globally in line with growing worldwide
demand for automobiles.
High performance alloy products: Ramp up efforts to handle the growing aircraft market.
4) Aluminum
Management plans
Increase sales of aluminum cans and expand aluminum rolled products operations, focusing
on extruded products for automotive parts.
Aluminum cans:
In October 2005, we plan to integrate our beverage aluminum canoperations with those of Hokkai Can Co., Ltd. In strategic aluminumbottles, we will increase unit sales to further boost demand.
Rolled products:
We will prioritize automotive offerings, including extruded materials forheat exchangers.
5) Electronic Materials and ComponentsManagement plans
We will integrate our Silicon and Advanced Products businesses, which share manytechnological and sales commonalities, and will harness the resulting synergies. We havepositioned the Electronic Materials business as a Companywide growth driver, and will
accordingly concentrate management resources to increase earnings.
Advanced Materials: We will harness synergies in advanced products, centered onsemiconductor markets, and expand operations.
Electronic components:
Drawing on our parts business we will develop new products,
particularly telecommunications modules, that will contribute to earnings.
Silicon:We will reinforce the earnings base for Sumitomo Mitsubishi Silicon
Corporation, mainly by bolstering the 300-millimeter wafer business,while offering more high-quality products for wafers smaller than 200millimeters. In polycrystalline silicon, we will maintain the high qualityof 300-millimeter offerings while further revising prices and increasing
productivity to enhance our profitability in this area, where thetechnological barriers for entry are high.

This information is based on management’s assumptions regarding the economic climate andmarket trends as of the announcement date. Changing circumstances may cause results todiffer materially from the assumptions.