Revision of the Midterm Business Plan
Revised-To be a Great Top Niche company that keeps making a real “difference” -May 2023
Copyright© ASAHI YUKIZAI CORPORATIONASAHI YUKIZAI CORPORATION
Securities Code 4216

1

Introduction
Aiming to be a Great Top Niche company under the Midterm Business
Plan "GNT2025," Asahi Yukizai has set four management policies andimplemented various measures to capture robust overseas demand andfavorable demand in the semiconductor market, and has consequently
achieved the FY2025 numerical targets in FY2022. Therefore, we organized
the future business environment and market opportunities, checked theprogress of the Midterm Business Plan, reviewed the measures for growthand investment plans, and revised numerical targets.
Under our corporate philosophy, we will challenge for the Attempt“something never tried before” and make a real “difference” with our
mission to "Support customers’ manufacturing process with valued
solutions."

Copyright© ASAHI YUKIZAI CORPORATION

2Contents
・Corporate philosophy

4・Vision for 2030

5・Group Management Policy

6・Business Portfolio Strategy

7・Business Environment Forecast

8

・Numerical Targets

9-12

・Investment Strategy

13-14

・Measures for Business Growth

15-20

・ESG Activities

21-22

・Promotion of Digitization

23
Bold letters represent reviewed or revised matters.

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Corporate philosophy

Philosophy
Purpose

Corporate philosophy
PurposeMission

To offer peace of mind through trusted qualityand dedicated support.
MissionVisionGuidelines for
conduct
Asahi Yukizai Group
Code of ConductSupport customers’ manufacturing processwith valued solutions.
VisionAttempt “something never tried before” andmake a real “difference” in customer
experience.
Guidelines for conduct

Take an interest in and try new things.
Keep enhancing our sophisticated expertise.
Know others well and discover their issues.
Fulfill your individual roles while remaining
mindful of shared goal.
Code of Conduct

What we should practice when working for the
Asahi Yukizai Group and what we keep inmind when practicing.

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Vision for 2030
Our customers are promoting activities from the perspective of SDGs to people (society and community) around the world.
By supporting these customers with a spirit of providing valued solutions, we aim to provide both economic and social values.

1. World people
2. Our customers(Manufacturing
process)

Peace ofmind
Valuedsolutions

Economic value
・Net sales

Social value•

110 billion yen

・Operating profit 14 billion yen
・Operating profit ratio 13%

that can contribute to water resource issues)•

Energy saving in buildings and climate change mitigation (highperformance insulating materials)••

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Protection, supply, and efficient use of water resources (valve development

Contribute to the development and production of leading-edge
semiconductor devices (Dymatrix, electronics materials)
Increase the ratio of renewable energy (drilling and retrofitting geothermal wells)5Group Management Policy

To become a Great Top Niche company

1

Pursue growth mainly in
our overseas businesses(Valve &Piping Systems
Divisions, Resin Divisions)and semiconductor-related
products.

3

Develop our businesses fromthe perspective of SDGs tobalance economic and social
value.

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2

Improve profit
margins by making areal “difference” andcreating higher added
value.

4

Create a new business thatcan contribute to solving newsocial challenges.

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Business Portfolio Strategy
Formulate our business portfolio strategy by dividing our basic policy into
three categories for each Division.
We will make a more flexible allocation of management resources.

Three basic
policies
Strengthening andexpansion

Deepening / stable
growthRestructuring

Divisions from which we
expect significant growth in
the future by giving priority
in investing management
resources.

Divisions from which we
expect deepening / stable
growth by introducing new
high-value-added products
and services that meetneeds.

Divisions from which we
expect structural
improvement by
restructuring the products
and services provided.

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Business Environment Forecast
Divisions and products

Valve & Piping
Systems
Divisions

ASAHI AV

Capital investment (plants, equipment,(Valves, pipes & joints)

semiconductors)

Dymatrix

Semiconductor manufacturing
equipment(Valves for semiconductor
manufacturing equipment)

Resin
Divisions

Advanced
Materials
Division
Water Treatment& Natural
Resources
Exploitation
Divisions

Related markets

Domestic
Overseas**
Domestic

Foundrymaterials

Automobile production

Foaming
materials

Building insulating materials

Electronics materials

Liquid crystal and semiconductor
production

Water treatment
Resource development
Maintenance

Current forecast(FY2023→FY2025)

Overseas

Wastewater treatment facilities forwater supply, recycled water, andsewageDevelopment of renewable energy*

Domestic*
Domestic
Domestic(geothermal)*Growth in overseas (capital investment, automobile production) and semiconductor-related markets is
expected to be slower than the previous forecast.
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8Numerical Targets
Target values for 2025
Item

Previously
announced value

Revised value

Remarks

Net sales

73 billion yen

87 billion yen

Operating profit

6 billion yen

12 billion yen

Ratio of operating profit
to net sales

8%

14%

EBITDA*(9 billion yen)

16 billion yen

ROE

8%

11%

ROIC

6%

9%

Strong demand in thesemiconductor field, bothin Japan and overseas, led
to favorable results mainlyin the Valve & Piping
Systems Divisions and theAdvanced Materials
Division. Market growthrate is expected to slow
down from 2023.

Item

Previously
announced value

Revised value

Remarks

Net sales

100 billion yen

110 billion yen

Operating profit

10 billion yen

14 billion yen

Ratio of operating profit
to net sales

10%

13%

*Newly set target value

Vision for 2030

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Reviewed considering thebusiness plan up to 2025.
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Numerical Targets
Not including M&A

Net sales
87 billion yen

Operating profit
12 billion yen

ROE

Target values for 2025 (each division)

11%

ROIC 9％Valve & Piping
Systems Divisions

Resin Divisions

Water Treatment &Natural Resources
Exploitation Divisions

Net sales 40 billion yen
Previously Operating profit
3.5 billion yen
announced
Operating profit ratio 9%
value

Net sales 23.5 billion yen
Operating profit
1.8 billion yen
Operating profit ratio 8%

Net sales 9.5 billion yen
Operating profit
0.7 billion yen
Operating profit ratio 7%

Net sales 52.5 billion yen
Operating profit
9.5 billion yen
Operating profit ratio 18%

Net sales 24.5 billion yen
Operating profit
1.8 billion yen
Operating profit ratio 7%

Net sales 10 billion yen
Operating profit
0.7 billion yen
Operating profit ratio 7%

Revisedvalue

For the Valve & Piping Systems Divisions, more business growth in the overseas
and semiconductor fields is expected than the previous forecast.
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10Numerical Targets
Not including M&A

Net sales
87 billion yen

Operating profit
12 billion yen

Net sales
100 million yen

1,250

ROIC 9％CAGR 10%CAGR 5%(Net sales :2020→2025)(Net sales :2025→2030)

771
647
561

566

61

64

536
55

42
2018

44
2019

86

160

141
120

140

2021

50

2022

GNT2025
CAGR (Compound Annual Growth Ratio) : Average annual growth rate
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150

100

119

34
2020

250

200

66

250

Operating profit
EBITDA: 100 million yen

1,100
870

750

0

11%

: Net sales: Operating profit: EBITDA

1,000

500

ROE

2025

2030
Vision011Numerical Targets
Implications of numerical targets for FY2025<External environment>
In FY2021 and FY2022, semiconductor-related markets in Japan and overseas grew more than expected,
and the Valve & Piping Systems Divisions and the Advanced Materials Division expand rapidly. Foreign
currency translation effects from yen depreciation also contributed to results.

FY2021 - FY2022<Results>
Record-high sales and operating profit for
two years in a row
FY2022 results
Net sales:
77.1 billion yen
Operating profit: 11.9 billion yen
EBITDA:
14.1 billion yen<Internal situation>•••

Lower product cost due to high facility
operating ratio
Lower ratio of fixed costs to sales due tosales increase
Decrease in surplus production capacity

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Toward FY2025• Although there is a break in the high growth rate ofthe domestic and overseas semiconductor
markets in FY2023, a certain level of growth isexpected to continue, and we will aggressively
increase production capacity and recruit humanresources to expand our business.
• In response to the expected increase indepreciation, labor and other fixed costs due toinvestment for growth, we will promoterationalization and labor saving throughautomation and digitalization, etc., and will limit
the decline in operating profit ratio to a slight level.
• We aim to gain 12 billion yen for operating profit,
the same level as in FY2022. However, EBITDA is
expected to be 16 billion yen, about 2 billion yen
higher than the FY2022 result.

12Investment Strategy
Review of the investment strategy
Contents ofinvestment

Previously
announced
value

Revisedvalue

Additional item
Valve & Piping Systems Divisions
・Rebuilding of Nobeoka Plant
・New Dymatrix plant

Resin Divisions
Strategic
investment

7 billion yen

26 billion yen

・New electronics materials plant

Sustainable/digital Investment

・Introduce solar power generationequipment
・Introduce a production
management system

M&A framework

5 billion yen

5 billion yen

Ordinary investment

10 billion yen

11 billion yen

22 billion yen

42 billion yen(Maintenance/streamlining)

Total investment
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Investment and Financial Strategies / Shareholder Return Policy

Previously announced investment
plan amounted to 22 billion yen
Valve &
M&A
Piping
Systems
framework

Divisions(Ordinary)Ordinary

Resin
Divisions(Ordinary)

Investment Plan
42 billion yen
Strategy/M&A
74%

Strategic investment(including sustainable/digital
investments)

26%

The revised investment planamounts to 42 billion yen(Increase of 20 billion yen)
Including M&A investment framework
Water Treatment &Natural Resources
Exploitation Divisions(Ordinary)

Sources of funds○ Operating cash flow (including asset efficiency)○ Shortage will be financed by borrowing (D/E ratio of 0.3
is the target)

Shareholder return policy• Recognize profit distribution as one of the most important issues for the company• Aim to secure stable dividends and increase dividends by achieving continuous profit
growth, while comprehensively considering performance trends, financial strength,
and internal reserves necessary for future investment.
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Measures for Business Growth
Progress and new measures
Divisions

Progressed measures

Valve & Piping
Systems
Divisions

Overseas/semiconductor market
Started pipe production in China.
Constructed a new plant in the U.S.
Overseas sales expansion of Dymatrix
Expansion of Dymatrix production capacity
Strengthen valued solutions
Establishment of the Valve & Piping
Materials Technical Service Department
and support to partner companies

Overseas/semiconductor market
Rebuilding of Nobeoka Plant
Consideration of a new Dymatrix plant

Foundry materials
Overseas technology transfer and sales
expansion
On-site foaming insulating materials
Development of high-insulation
polyurethaneElectronics materials
Construction of the second electronics
materials plant
Molding materials
Withdrawal from the business

Foundry materials
Development of new products that
contribute to conversion to EV and CO2
reduction
On-site foaming insulating materials
Establishment of a materials-engineering
integrated platform
Electronic material
Consideration of a new electronics
materials plant

Water treatment
Operational testing of the regenerated
chlorine system
Resource development
Verification of new methods of excavation

Water treatment
Business expansion into new areas
including biogas

Resin
Divisions* Including theAdvanced Materials
Division

Water Treatment& Natural
Resources
Exploitation
Divisions

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New measures

Promotion of digitization
Productivity improvement throughmanufacturing data collection
Construction of demand-supply chain15

Measures for Business Growth
Valve & Piping Systems Divisions
Overseas
market• Increase the manufacturing capacity of Nobeoka Plant in response to the
expansion of overseas market (core products)• Cultivation and sales expansion in the electronics industry (semiconductors,
LCDs, etc.) in the U.S. and China, where continued growth is expected.
• Expand overseas business by developing markets in emerging countries with
mid-range products and introducing strategic products (large-diameterbutterfly valves, automatic valves, etc.).

Semiconductor
market• Promote business expansion through pursuit and commercialization of lowparticle technology for Dymatrix and construction of a new plant to meetglobal demand.

Large-diameter butterfly valve
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Low-particle Dymatrix with minimal
generation of microscopic foreign matter

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Measures for Business Growth
Valve & Piping Systems Divisions
Strengthen
valuedsolutions• Expanding the network of processors nationwide and providing highly reliable
thermoplastic piping by training processors and developing technical assistanceand installation techniques.
• Strengthen production capacity for pre-fabricated products to respond to
shortened construction period and labor shortage in piping installation.
• Foster human resources capable of proposing optimal corrosion-resistantsolutions.

Promotionofdigitization• Productivity improvement (elimination of bottlenecks) through the visualizationof manufacturing site data
• Establishment of a demand supply chain to realize optimization of the one-stoporder receiving system for corrosion-resistant materials and the production
systemPrefabricated products
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Visualization of manufacturing site data17

Measures for Business Growth
Resin Divisions
Foundrymaterials• Improve profitability by helping customers improve their productivity, quality, andwork environment with high-functionality products.
• Pursue new business opportunities associated with the shift to EVs in
automobiles.
Development of next-generation strategic products that respond to thinner,
lighter and more complex casting parts and contribute to CO2 reduction• Accelerate overseas transfer of the technologies above to become the global
No. 1 RCS.

On-sitefoaming
insulating
materials• Establishment of a materials-engineering integrated platform that supports foradvanced functionality of insulating materials (e.g., high thermal insulation
technology)

Engine parts
Conversion
to EV

Battery coolingsystem, etc.

＋
Continued demand
after conversion to
EV
Brake and drive parts

Cast parts are becoming thinner, lighter, and more complex
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Insulating materials andinstallation machine

Insulation

Value creation of on-site foaming
insulating materials

18Measures for Business Growth
Advanced Materials Division
Electronics
materials• Full production in the second electronics materials plant under construction(Aichi) and the expanded Nantong plant (China), and consideration of a third
plant in Japan and a second plant in China.
• Aim to expand the area of electronics materials by leveraging our strengths (lowmetal technology, synthesis technology, and refining technology).

Newbusiness• Establishment of "closed-type circulating land culture" technology that
contributes to solution of the social issues (environmental pollution, protein
supply shortage) identified in the business search.
• Business model study on "closed-type circulating land culture"

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Measures for Business Growth
Water Treatment & Natural Resources Exploitation Divisions
Water
treatment• Improve profitability by providing optimal solutions by upgrading a wide variety
of wastewater treatment technologies and construction capabilities.
• Challenge for new areas of technology (e.g., biogas power generation) by
exploring wastewater treatment technologies.
• Provide new and highly efficient maintenance services such as remotemonitoring system and regenerative chlorine system.

NaturalResources
Exploitation• Shorten construction period, reduce costs, and strengthen safety measures byintroducing a new excavation method.
• Strengthen the personnel structure to promote orders in the field of renewableenergy.

食品工場
Water supply
facilities
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Wastewater
treatment facilities

Geothermal power
generation drilling site

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ESG Activities
Develop ESG activities by positioning it as a top priority issue.
In September 2021, the Sustainability Promotion Committee was established toaddress the issues surrounding sustainability.

<<Purpose>><<Items to address>>➢

Increase corporate value over the medium to long term➢

Minimize risk and expand profit opportunities

Consideration for global environmental issues (activities based on TCFD)
Risk management (e.g., natural disasters due to global warming)
Contribution to ESG through business activities
Investment in human capital (human capital development, work style, treatment. diversity)
Protection and utilization of intellectual property rights and brands
Fair and proper transactions with suppliers
Fair and proper dealings with customers
Promote understanding from local communities

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ESG Activities
Relationship between business activities and SDGs
Valve &
PipingMaterials(valve)We are working to develop valves that can contribute to solution of the world's
water resource problems, such as large valves that can be used in large-scale
desalination facilities and automatic hydrants that integrate ICT technology.

Resin(Foundrymaterials)

Pursue valued solutions for casting processes in the world by developing
casting raw material (resin coated sand) that realizes weight reduction anddimensional stability of casting parts to increase cruising distance with the shift
to EVs in automobiles and by realizing raw material regeneration technology

Resin(foaming)

In construction sites where insulation is difficult due to complex wall shapes,
hot-water piping, etc., we are working to deliver safety and peace of mind toconstruction sites by manufacturing eco-friendly raw materials, developingeasy-to-use construction machines, and providing high-quality products andservices with our group companies.

Valve & Piping
Asahi Yukizai's goal for innovation in the fast-growing semiconductor field isMaterials (Dymatrix) "low metalization and low particle generation." We aim to become a great
Advanced Materials niche top company by contributing to the reduction of foreign matter in the(electronics
semiconductor manufacturing process and impurities in photoresists with ourmaterials)
technological and manufacturing capabilities.

Water treatment& natural
resources
exploitation

One of the issues in Japan's geothermal power generation is the high cost of
power generation. We aim to reduce cost by shortening drilling period, andthereby contribute to the development of geothermal power generation as
well as expansion of the share of renewable energy and control ofgreenhouse gas emissions.

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Promotion of Digitization
Promote the use of digital technology in manufacturing, sales, indirect
and other business processes to improve efficiency and labor savings,
increase customer convenience, and enhance corporate value.
Image of promotion
Laying thefoundationfor
digitization

Digitization of information

Promotionofdigitization

Visualization and quantificationof manufacturing process

Advancement ofoperations
through
digitization

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Develop the environment for
digitization

Grand design for the future

Digitization to optimize theentire supply chain and increasecustomer convenience.

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Cautionary statement concerning forecasts and estimates
Forecasts and estimates in this document are based on information available atthe time of preparation and do not assure or guarantee achievement of
numerical targets or measures in the future.

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Attachments

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Relationship between Business Activities and SDGs
Valve & Piping Materials (valve)
Contribute to stable operation of desalination facilities andwastewater treatment facilities with rustproof and durable
thermoplastic valves.
Water resource problems are occurring around the world due to"population growth," "climate change," and "water conflicts." Asahi
Yukizai contributes to the protection, supply, and efficient use of theworld's water resources by manufacturing and selling thermoplastic
valves and pipes that make up facilities and pipelines related to thesustainable extraction and supply of fresh water.
Asahi Yukizai has grown as a niche top company by providing"corrosion-resistant solutions" for pipelines in the chemical,
semiconductor, water treatment, and aquarium, and other fields, seeking
markets around the world where the characteristics of thermoplastic
valves and pipes, i.e., "Rustproof (corrosion resistant)" and "Light" (easeof installation), can be utilized.
The next innovations Asahi Yukizai aims for are "larger" and "smarter.
We aim to develop valves that can contribute to the world's water
resource problems, such as large valves that can be used in large-scale
desalination facilities, automatic water taps that integrate ICT technology,
and motorized ball valves equipped with a smart actuator.

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Relationship between Business Activities and SDGs
Resin (Foundry materials)
Increase the number of eco-friendly products to improvecustomers' work environment.
Casting is one of the methods used to manufacture metal parts and productswith complex shapes. Casting is a method of pouring molten metal at hightemperature into the cavity of the mold (casting mold) made of sand or othermaterial. The mold material used in casting is resin-coated sand, which must
be strong enough not to break even when molten metal is poured anddimensionally stable enough to produce the part dimensions as designed.
Asahi Yukizai is the only manufacturer that produces and sells resin coatedsand and coating resins used for these molds, and has been contributing to
the automotive industry, agricultural machinery, and construction machineryfor 68 years as a niche top company that conducts eco-friendly recyclingoriented business by recycling and selling resin coated sand that has beenused.
In order to continue to pursue "valued solutions for the world's castingprocess," Asahi Yukizai will continue to develop low-odor, low-smoke productsthat enable lighter weight parts (thinner wall) and high-precision dimensional
control, while also contributing to the improvement of the manufacturing
environment and the environment around the foundry. At the same time, wewill also develop efficient recycling technology for resin coated sand to reduce
waste generation. Furthermore, by transferring these technologies to China,
India, and Mexico, we will globalize manufacturing and sales to increasesocial and economic values.
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Relationship between Business Activities and SDGs
Resin (foaming)
Promote energy saving with high-performance heatinsulating materials.
There is a worldwide demand for energy saving in housing and otherbuildings as a measure against climate change. Asahi Yukizai hasdeveloped "Zero-Freon," a non-CFC product that does not containozone-depleting substances in on-site foaming rigid polyurethane foam,
which offers excellent heat insulation performance and energy saving
effects, thereby contributing to energy conservation in buildings andmitigation of climate change.
We are also working on the production of eco-friendly raw materials andthe development of easy-to-use construction machinery for construction
sites where insulation is difficult due to complicated wall shapes and hotwater piping, etc. Thus, working together with group construction
companies we provide high-quality products and services to ourcustomers and deliver safety and peace of mind to construction sites.
Asahi Yukizai further promotes valued solutions for customers andcontribute to the Basic Energy Plan with the keywords "construction
machinery and high insulation," including the originally-developed
construction machinery that reduces raw material loss and enables
economical construction, and development of highly insulating raw
materials to meet customer needs.
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Relationship between Business Activities and SDGs
Valve & Piping Materials (Dymatrix)
Advanced Materials (electronics materials)
Contribute to the development and production of leadingedge semiconductor devices with low-particle highperformance valves and low-metal semiconductormaterials using advanced refining technology.
Asahi Yukizai sells thermoplastic valves and pipes for ultrapure water, purewater, and wastewater pipelines in semiconductor plants not only in Japan but
also in the U.S., South Korea, Taiwan, and China, and undertakes some plant
construction work in Japan. We also manufacture and sell Dymatrix (small
precision valves) for cleaning processes and Falconics (flow control device)
for CMP processes to semiconductor manufacturing equipment manufacturers.
We also manufacture and sell other semiconductor materials (base resin,
matrix of photosensitized materials and underlayer film materials, etc.) in
Japan and China, and contribute to our customers by providing various
products and services ranging from semiconductor materials to manufacturing
equipment and plants.
Asahi Yukizai's next innovation in the fast-growing semiconductor field is "lowparticle and low metal". In semiconductor manufacturing equipment, it isrequired to minimize foreign matter contamination in the manufacturing
process to improve yield, and in the manufacturing of semiconductors, it isrequired to reduce metallic impurities in photoresist (lower metal content). To
respond to these requirements, our technical and manufacturing capabilities
will be useful. By solving these issues, we aim to contribute to technologicalinnovation in the semiconductor field and become a Great Niche Top
Company.
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Relationship between Business Activities and SDGs
Water treatment & natural resources exploitation
Promote construction work for geothermal power generation,a renewable energy source.
The majority of Japan's energy sources are thermal power generation,and there is growing interest in renewable energy sources that can
reduce greenhouse gas emissions. As of FY2017, the share of
renewable energy in Japan's power supply mix was about 16%, which is
low compared to other countries. One reason for this is the high cost ofgenerating renewable energy compared to other countries.
DORICO Co., Ltd., a subsidiary of Asahi Yukizai, drilled Japan's firststeam well for geothermal power generation in 1952, and has drilled
more than 180 wells to date. Currently, we are drilling and retrofitting
geothermal wells mainly in the Kyushu, Hokkaido and Tohoku areas, andalso drilling hot spring wells using with the technology developed for theabove.
Geothermal power projects are attracting a great deal of attention
because they do not emit carbon dioxide and have a low environmental
impact, but there are issues such as the time and cost required todevelop power generation facilities. Therefore, Asahi Yukizai aims to
reduce costs by shortening the drilling period through "more efficientdrilling / higher operating ratio of drilling equipment," to contribute to thedevelopment of geothermal power generation, increase of the ratio ofrenewable energy and control greenhouse gas emissions.
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