New Medium-Term
Management Plan
From FY2021 to FY2025

May 18, 2021

The Japan Steel Works, Ltd.
Naotaka Miyauchi, Representative Director & President© The Japan Steel Works, Ltd. All Rights Reserved.

Disclaimer

The performance forecasts and other forward-looking statements included in this report are based on theinformation that was available to The Japan Steel Works, Ltd. (the “Company”) and certain assumptions
deemed to be reasonable at the time this report was prepared, and the actual results may differ
significantly from these forecasts due to a variety of reasons.

© The Japan Steel Works, Ltd. All Rights Reserved.

2

INDEXPART Ⅰ
Review on
JGP2020 andrecognition ofbusinesscircumstances

5

PART ⅡPART ⅢNew medium-term
management plan
JGP2025

Segment policies

10© The Japan Steel Works, Ltd. All Rights Reserved.

19

PART Ⅳ

Implementationof ESG
management30

3Composition of Business Segments and Major Products
Business
Segments

Industrial Machinery
Products Business

Material and Engineering
Business

Other
Businesses

Organizations

Plastic Machinery B.D. / Injection Molding Machinery B.D. /Industrial Machinery B.D. / Ordnance Business H.Q.

Japan Steel Works M&E, Inc.

New Business
Promotion H.Q.

Hiroshima

NagoyaYokohama

MuroranProduction
Bases

Plastic production and processing
machinery・Pelletizers
・Film and sheet manufacturing
equipment
・Twin-screw extruders
・After-sales services

Steel castings and forgings

Molding machines
・Plastic injection molding
machines
・Magnesium alloy injection
molding machines
・Blow molding machines
・After-sales services

・Parts for reactors(shell, head etc.)
・Parts for steam
generators

・Rotor shafts
・Turbine Casings
・Die steel
・Steel rolls for steel
manufacturing

New
Business• Photonics• Composite
Materials• Metallic
Materials

Products

Clad Steel Products

Engineering Services

・Clad steel plates
・Clad steel pipes

・Steel structure for plant and infrastructure
・Non-destructive inspection and analyticalinspection services, etc.
・Steel pressure vessels for hydrogen storage

Other machinery・Excimer laser annealing ・Laminators(ELA) systems
・Deposition systems
・Defense equipment
・After-sales services
・Railway products・Hot press devices

Markets

Petrochemicals

Industrial
Machinery

Automobiles

Information
Technology© The Japan Steel Works, Ltd. All Rights Reserved.

DefenseElectric Powerand SteelOil andNatural Gas

NaturalEnergyNew
Business

4

Review on JGP2020 andrecognition of businesscircumstancesPART Ⅰ© The Japan Steel Works, Ltd. All Rights Reserved.

5

Review on JGP2020

JGP2020: 3 Basic Policies (priority issues)
Optimization of Management Resources andStrengthening of Alliances•

1

Expanded the plastic processing machine complex• Acquisition of GM Engineering Co., Ltd.
• Absorption-type mergers with Nichiyu Machinery Co., Ltd. and Meiki Co., Ltd.

Achievements•

Spun off the material and engineering business (into Japan Steel Works M&E, Inc.)•

Started collaboration with Tsukishima Kikai Co., Ltd.

•Set up a joint venture with JX Nippon Mining & Metals Corporation

Issues still to beaddressed•

Press further ahead with the
expansion of plastic
processing machine complex•

Increase competitiveness ofexisting products•

Create new core businesses
that will follow plastic
processing machinery•

Generate constant profit in
the Material and Engineering
Business•

Swiftly attain profitability innew businesses

Strengthening of After-Sales services(Stock-Based Business)

2
Achievements•

Launched parts centers in Japan and in Europe•

Built a factory dedicated to services•

Commenced operation of remote maintenanceAcceleration in Exploration and Developmentof New Businesses

3•

Attained profitability in hydrogen-related products business and transferred it toJapan Steel Works M&E, Inc.

•

Decided on focus on three business domains of photonics, composite materials
and metallic materials.

Achievements© The Japan Steel Works, Ltd. All Rights Reserved.

6

Recognition of Business Circumstances and the Company's Business
Opportunities and Risks

Climate change,
natural disasters andinfectious diseases

Disposal of plastic
waste in the sea

Spread of 5G

Acceleration ofcarbon-free shift

Business reform
through digitaltransformation (DX)

Opportunities⚫ Electric vehicle (EV) market expansion⚫ Emergence of biodegradable plastics⚫ Full-scale investment in 5G infrastructure

Spread of renewableenergyIncrease in remote
working

Divides in international
community and ineconomyDiversification of
consumption

Risks⚫ Demand shrinkage for plastic processing
machines amid a trend towards reducing
plastic consumption⚫ Advancement of artificial intelligence (AI)and Internet of Things (IoT) technologies⚫ Reduction in investment in thermal power
generation and exploitation of oil and gas
amid a trend towards decarbonization⚫ Expansion of consumption chiefly inemerging economies⚫ Contraction of demand for separator films
after widespread use of solid-state batteries© The Japan Steel Works, Ltd. All Rights Reserved.

7

Environmental Actions Taken as Manufacturer of General Plastic
Processing Machinery

Environmental
considerations

Workability

Low weight

Characteristicsof plastics
Insulation

JSW
Technology

Economic
efficiency

Advancing technological capabilities cultivated as a manufacturer ofgeneral plastic processing machinery to address environmental issues
Continuously supporting manufacturing essential to all parts of society * For environmental
actions, see pages
32 and 33.

ITHome electric
appliances© The Japan Steel Works, Ltd. All Rights Reserved.

Automobile-related
products

Food packages

Healthcare-related
products

8

JSW's Strengths

A manufacturer's longretained values of making
good and resilient
products

Establishing new technologies
on the basis of advanced
technological strength andexpertise to open new markets

Innovation
Continuously
creating newTechnology

customer needs withunaltered strengths

THE FIRST
ENGINEER
Always trying for cutting edge

at any time

Prescience
Precisely foreseeing thetrends of the times toboldly address untapped
areas© The Japan Steel Works, Ltd. All Rights Reserved.

9

New medium-term
management plan JGP2025
PART Ⅱ© The Japan Steel Works, Ltd. All Rights Reserved.

10

Corporate Vision and Mission
JSW Vision

JSW Philosophy

Contribute to social development
by creating innovations withoriginal technologies

1. Make our customers amazed andimpressed
2. Coexist with society and achievesustainable profitability
3. Keep the spirit of continuous
innovation

MissionCustomersatisfaction

Employeesatisfaction

Aim for sustainable growth throughmanufacturing and value creation andShareholder
satisfaction

contribute to society with the spirit of
Yompo-Yoshi (benefits in four stakeholders)Fulfilling
responsibilities tosocietyMedium-Term Management
Plan JGP2025
Strategies

Targets

Business
Strategy

Net Sales© The Japan Steel Works, Ltd. All Rights Reserved.

Financial
Strategy

ProfitESG
Management

DX
Strategy

ROE

Return to
Shareholders

Portfolio
Management

11Position of New Medium-Term Management Plan JGP2025• A company with job satisfaction

Towards theunprecedented generalmanufacturer of plastic
processing machineryin the world

Building foundations
for solid growth of
the JSW Group in thenext ten years

and excitement for employees• Growing to a business scale of
300 billion yen

From April 2026
Long-Term Vision

JGP2025
From April 2021 to March 2026

JGP2020
From April 2018 to March 2021

© The Japan Steel Works, Ltd. All Rights Reserved.

12

JGP2025 Basic Policies

Towards the unprecedented generalmanufacturer of plastic processing
machinery in the world⚫

Increase competitiveness to holdthe largest global market sharewith existing products⚫

Accelerate the expansion of plastic
processing machine complex

1

Make constant profit inMaterial and Engineering
Business

2
JGP2025
Basic
Policies

Create new core businesses⚫

New industrial machinery products⚫

Photonics⚫

Composite materials⚫

Metal materials

3© The Japan Steel Works, Ltd. All Rights Reserved.

4
Implementation of ESG
management

13

JGP2025 Target Values (consolidated)

FY2025Ending Mar. 2026

ROE

Operating income

Net Sales

270 billion yen

10％

27 billion yen

FY2019FY2020

FY2023

FY2025Results

Results

Plan

Plan

Net Sales

217.5 billion
yen

198.0 billion
yen

250.0 billion 270.0 billion
yen
yen

+ 24%

Operatingincome18.7 billionyen

10.2 billion
yen

20.0 billion
yen

27.0 billion
yen

+ 44%

Operatingincome ratio

8.6%

5.2%

8.0%

10.0%

＋1.4PP

ROE

7.2%

5.1%

8.5%

10.0%

+ 2.8PP© The Japan Steel Works, Ltd. All Rights Reserved.

Change from
FY201914

JGP2025 Target Values (by segment)
Industrial Machinery Products
Business
Plastic production
and processing
machinery(¥ in billions)

Molding
machines

Net Sales

Material and Engineering
BusinessOthermachinery

Operating Income

Steel castings
and forgings(¥ in billions)

250.0

50.0

210.0
190.0

200.0

Net Sales(¥ in billions)

Engineering
services

Operating Profit(¥ in billions)

70.0

14.0

60.0

12.0

40.0

171.4

Clad steel
products

50.0

50.0

50.0

10.0

42.8
27.0

150.0

19.2

30.0

40.0

8.0

30.0

6.0

21.0

100.0

20.0

20.0
50.0

2.7

3.5

4.0
4.0

10.0
10.0

0.0

0.0
FY2019 Results

FY2023 Plan

FY2025 Plan

© The Japan Steel Works, Ltd. All Rights Reserved.

2.0

0.0

0.0
FY2019 Results

FY2023 Plan

FY2025 Plan

15

Future Growth Envisioned

Net Sales

Inorganic growth (e.g. M&A）
New Business

Sales: ¥270 billion
ROE: 10%

Industrial Machinery Products Business
Material and Engineering BusinessApprox. 220 billion yen

Now© The Japan Steel Works, Ltd. All Rights Reserved.

FY202516

Financial Strategy

Ensure a proper balance between growth investment andreturn to shareholders for the purpose of continuously
increasing corporate value
Growth investment
Capital investment: 45 billion yen

Revenue frombusiness activities

R&D investment: 30 billion yen
M&A investment: 30 billion yen• Expansion of plastic processing
machine complex• Non-plastic industrial machinery

Effective use of assets
Sales of cross-holding
sharesUse of cash anddeposits© The Japan Steel Works, Ltd. All Rights Reserved.

Return to Shareholders
Dividend*: 20 billion yen* Consolidated dividend payout ratio: 30% or more

17

Dividend Policy

Dividend policy in the period of JGP2025
Paying dividends at a level that ensures dividend on equity (DOE) is 2% or higher
while aiming for a consolidated dividend payout ratio of 30% or more.
■ Schematic of dividend policy
Dividends

ProfitLower-limit dividend(DOE of 2％)© The Japan Steel Works, Ltd. All Rights Reserved.

Performance-based dividend(Payout ratio of 30%)

18

Segment policies
PART Ⅲ© The Japan Steel Works, Ltd. All Rights Reserved.

19

Segment Policies

Segment

Industrial
Machinery
Products
Business

Material andEngineering
Business

Sub-segment

Business policy

Plastic production andprocessing machinery

Increase the competitiveness of existing products, expand plastic
processing machine complex and expand the service business toplay the role of a core business and drive growth.

Molding machines

Increase production capacity and strengthen sales efforts in key
areas with the aim to be among the world's top five
manufacturers.

Other machinerySpread existing products centering on ELA systems and create acore business subsequent to plastic processing machinery.

Steel castings andforgings
Clad steel plates andpipes

Strengthen the production system and implement strict cost
control to consistently generate profit.

Engineering services
and others

New Business© The Japan Steel Works, Ltd. All Rights Reserved.

Focus on three domains and swiftly attain profitability in each.

20

Industrial Machinery Products Business

Plastic Production and Processing Machinery

Drive growth as JSW's core businessPriority measures
1. Increase the competitiveness of existing products.
(1) Pelletizers
Continue to increase the market share mainly in the brisk Chinese
market.
(2) Twin-screw extruders
Step up overseas expansion chiefly in China and Southeast Asia.
(3) Film and sheet manufacturing equipment
Step up actions to high-quality separator films for lithium-ion
batteries.
Focus on growth areas such as 5G-related films with a view todevelop a post separator film businesses.
2. Expand to plastic processing machine complex.
Boost and capture demand for new products through mergers andacquisitions.

3. Enlarge the after-sales service business.
Expand the service structures in China and Europe.
Make use of the factory dedicated to services to shorten delivery leadtimes and to satisfy customer needs.
© The Japan Steel Works, Ltd. All Rights Reserved.

21

Industrial Machinery Products Business

Plastic Production and Processing Machinery

Accelerate the expansion of plastic processing machine complex.
Sales of plastic processing machinery

Polymerization reactor (Petrochemical plant)
Producing base materials for plastics（¥ in billions）
200

Add extra values to base plastics

Pelletizer
Screenchangers

FeederCutting andrefrigerating
equipment⑦⑥

Vibrating sifters
and dryers⑤④③

Processing into film①

Injector molding
machines
Blow molding
machines
②

150

100

Film sheet
manufacturing
equipment

Business transferfrom Mitsubishi
Heavy Industries, Ltd.

Acquisition of Tahara
Machinery Co, Ltd.

Acquisition of SM
Platek Co., Ltd.
(located in South Korea)

Gear pumps

Forming⑤
Making Meiki Co.,
Ltd. into wholly
owned subsidiary④

Twin screw
extruderCasting film
equipment

Simultaneous
stretching film
equipment

Sequential
stretching film
equipment

Sheetequipment

Sheet molding
machines

Winders⑥

Spinning
extrudersAcquisition of GM
Engineering Co., Ltd.

© The Japan Steel Works, Ltd. All Rights Reserved.

②①③
Business transferfrom Hitachi Plant
Mechanics Co., Ltd.

Profile extruders
and tube extruders

50⑦
Acquisition of Nichiyu
Machinery Co., Ltd..

0

2005

2010

2015

2020

2025

22

Industrial Machinery Products Business

Molding Machines

Aim to be among the world's top five
Priority measures
1. Plastic injection molding machines(1) Optimize global production systems and increase production capacity
Hiroshima Plant:
Increase production capacity, mainly for small-sized machines as wellas the capacity to supply to Japan and overseas.

Meiki Plant:
Boost the capacity as a production base for ultra-large machines andspecial machines.
Overseas production bases:
Increase production in China and the United States and commence
production in Europe.
(2) Strengthen sales efforts in key areas
Japan, the United States, China, Southeast Asia and Europe
2. Magnesium alloy injection molding machines
Expand sales of ultra-large machinery to the automobile sector.
3. Blow molding machines
Expand business in the Asia region, including China.

© The Japan Steel Works, Ltd. All Rights Reserved.

23

Industrial Machinery Products Business

Molding Machines◆ Mounting expectations are focused onmagnesium molded products in the field of large
automotive components.
◆ In addition to selling molding machines,
manufacture large automotive components at
subsidiary to encourage the adoption ofmagnesium molded products in this field.

Characteristics ofmagnesium alloys
Magnesium alloys are in rising demand globallyas materials helpful for reducing automobile
weight and environmental footprints.

JLM1300MGII magnesium alloy injection molding machine

Forecast on global market of
automotive displays(million units)
250

217
200

(％)

100

0.7

4.0

80
161

Light
weightMaterials used forautomobile production

150

145

CFRP and

7.9

resins10.2

14.5

alloysTitaniumalloys40

100

alloys
Aluminum

60

134Magnesium

High tensile
steel platesHigh
rigidity

Electromagnetic
shielding

20

50

Steel plates

0
0
2019

2020

2021

(forecast) (forecast)

2028(forecast)

Source: JSW based on Yano Research Institute: Survey on Global
Automotive Display Market (2020)<https://www.yano.co.jp/press-release/show/press_id/2521>© The Japan Steel Works, Ltd. All Rights Reserved.

2010

2015

2020

2025

2030

Source: Extracted and edited materials created by the Ministry of
Economy, Trade and Industry on the basis of data from the
U.S. Department of Energy: Vehicle Technologies Program:
Goals, Strategies, and Top Accomplishments.

24

Industrial Machinery Products BusinessIndustrial Machinery (excluding plastic manufacturing and processing machinery and molding machines)

Expand existing businesses and cultivate new products and fields.

Priority measures
1. Restructure the excimer laser annealing (ELA) system business
Integrate the manufacturing and sale of ELA systems with aftersales services to strengthen the business structure.
Use differentiation technologies to capture the Chinese market.
2. Receive orders for new industrial machinery products.
Take advantage of core competences to step into new markets with
future growth potential.

New
technologies

Broaden the range of applicationsof existing technologies bymeans of technologicaldevelopment.

Enter new markets through mergers
and acquisitions.
✓ Areas with high growth potential

Existing
technologies✓ Areas where a competitive
advantage may be increased by
the use of existing technologies(core competence)Core competence

Existing markets© The Japan Steel Works, Ltd. All Rights Reserved.

New markets

25

Material and Engineering Business

Enhance and reform the structure for consistently generating a profit.

Priority measures
1. Steel castings and forgings
Gain orders for high value-added functional materials to boost revenue.
Establish production systems for small and midsize products and mass
produced products to win more orders.
2. Clad steel plates and pipes
Build a production system resilient to fluctuations in operation loads by
reducing the variable and fixed expenses of plants.
3. Engineering service
Increase competitiveness of hydrogen-related products and market
them outside Japan.
Win projects on welded structures for plants and infrastructure geared
to the National Resilience Policy.
Expand the inspection service business using original technologies.

© The Japan Steel Works, Ltd. All Rights Reserved.

26

Material and Engineering BusinessEngineering Service
Make effective use of the ability to offer general engineering services to turnthis service into a core of the Material and Engineering Business.
Hydrogen-Related Products
Manufacturing tanks using
Hydrogen absorbing alloys
and steel pressure vessels
for storage of hydrogen,which is drawing attention
as a next-generation
source of energy

Inspection Services
From general nondestructive inspections toinspection of plant facilities
using the latest inspection
approaches

Integrated Construction
Meeting a wide range of needs, frommachinery repairs to plant works,
construction and civil engineering works

MaintenanceEngineering
Service

Welded Structures
Manufacturing of welded
structures in various applications,
including those for industrial use
and bridge components

Maintenance, weld repairs,
maintenance suggestions,material evaluation and life
assessment of pressure
vessels, forge equipment andwind power generation
facilities

Analysis Service
Visualizing and quantifying thestress that applies to products

Exhaust gas duct

© The Japan Steel Works, Ltd. All Rights Reserved.

27

New Business

Strive to swiftly attain profitability.

Photonics Office

JSW Afty Co., Ltd.
Film-forming equipment
such as ECR film-forming
equipment and ALD
equipment

Semiconductors
and electronic
devices

Fine Crystal Co., Ltd.
Fine Crystal Iwaki Co., Ltd.

Development andprocessing of artificial
crystals, lithium niobate
crystals and gallium
nitride crystals

Cameras, 5G andsensing

Composite Materials Business
Promotion Office
JSW Muroran GroupJSW Hiroshima

Metallic Materials
Business
Promotion Office
Muroran Copper Alloy,
Co., Ltd.

Manufacturing ofcomponents andmaterials for privately
operated aircraft using
CFRP composite materials
and other materials

Manufacturing ofcomposite materials forautomobiles and othermobility

Manufacturing of copper
alloys and various othernew metal materials

Aircraft parts

Compositematerials formobility

Electronic partsand metal
materials

Mobility
New materials
Telecommunications & 5G

© The Japan Steel Works, Ltd. All Rights Reserved.

Telecommunications
& 5G

28

Utilization of Digital Technologies
Production management

Resolve customers'
issues such as
automation and laborsaving to support theshift to smart factories

Production forecasts andresults management andAccumulating data
analysis of molding stability

Operation assistanceAI

Support for revision tomolding conditions
Proposals from AI

Analyzing data

Solution concept
Service and maintenance
Plant A

Remote support！

！

RemotemonitorA generic term for IoT solutions developedby the Company
Define the four pillars of injection molding
machines, namely production management,
services and maintenance, operation
assistance and production automation
system, to provide solutions that will
improve customers' productivity.

Production
automation system
Coordination with peripheral
equipment and high level systems
High levelsystemGuidance
Plant B

FutureStrategy①

Expand remote guidance and remote maintenance to increase the efficiency of maintenance support.

②

Implement automated operation of twin screw extruders and automated condition adjustment of film
manufacturing equipment as new services.

③

An AI algorithm applicable to lifetime prediction and preventive maintenance of JSW products is in
the course of development.

© The Japan Steel Works, Ltd. All Rights Reserved.

29

Implementation of
ESG management
PART Ⅳ© The Japan Steel Works, Ltd. All Rights Reserved.

30

ESG Activities

Creation of the ESG Promotion Committee in April 2021
Set up a cross-departmental committee to carry out ESG activities effectively.
General Meeting of Shareholders
Audit &
Supervisory Board
Board of Directors
Executive Board
PresidentInternal Auditors
OfficeDirectors and Executive Officers incharge of operations

Head office departments

Japan Steel Works M&E

Ordnance Business
Headquarters

Yokohama
Plant

Industrial Machinery
Business Division© The Japan Steel Works, Ltd. All Rights Reserved.

Injection Molding
Machinery Business
Division

Hiroshima
Plant

Plastic Machinery Business
Division

New Business Promotion
Headquarters

ESG Promotion
Committee

Meiki Plant

31

Environment

Conduct business activities withenvironmental considerations.
•

Reduce CO2 emissions•

Move forward with conservation and recycling ofresources (to lower environmental impacts)•

Step up efforts for carbon neutral products andenvironmentally friendly products(1) Plastic machinery products for recycling plastic resources(2) Materials and systems for utilizing hydrogen energy(3) Energy-related products for reducing CO2© The Japan Steel Works, Ltd. All Rights Reserved.

32

Environment: Past and Future Actions
1990

2000

Hydrogen-Related
Products

Hydrogen purity
improvement systems
for power generators

2020 CF: Carbon FiberCeNF: Cellulose Nano Fiber

Low-cost pressure
vessels for hydrogenstorage

Pressure vessels for hydrogenstorage

MH freezer systems

Fundamental research forhydrogen-related technologies

MH: Metal Hydride2010

Hydrogen absorbing alloys
Systems for fuel cells

Large MH tanks● Composite vessels (for stations and for in-vehicle use)
● Large hydrogen storage vessels for power stations● Construction of hydrogen stations

Futuredirection

Full-automatic injection molding machines / energy conservation

Molding machines

Blow molding machines for gasoline tanks / weight reduction
Magnesium injection molding machines / weight reduction and recycling
Fine foam injection molding machines / weight and volume reduction
Futuredirection● Readiness for materials with high recycling rate / environmental impact reduction● Readiness for biodegradable plastics / environmental impact reduction and energy conservation● Molding machines with power leveling systems / energy conservation● Development of technologies for CF and CeNF / weight reduction and environmental impact reduction

Twin screw extruders for biodegradable plastics / environmental impact reduction
Twin screw extruders for wood biomass composite materials /improvement in combustibility of plastics and low-temperature mixing

ExtrudersTwin screw extruders for CeNF composite materials/ high strength and weight and volume reduction

Futuredirection© The Japan Steel Works, Ltd. All Rights Reserved.

Twin screw extruders withvolatile organic compound
reduction / low odor anddevolatilization● Twin screw extruders for biomass-based materials
alternative to coal / coal-freeness● Automatic twin screw extruders / labor saving andremote operation

33

SocialCreation of a human resource base forcontinuous growth

Actions to shift the focus fromwork styles to job satisfaction

Lively workplaces that give
excitement to employees

Advancement of the safety
cultureEmployee-friendly workplaces

Development of next-generation
leaders
Securing of diversity in theworkforce

Actions© The Japan Steel Works, Ltd. All Rights Reserved.

Maintenance of competitive
advantage in the workforce

Effects34

Governance

Practice management with greaterawareness of capital costs for increasing
corporate value

1

2

3

High

Assess thebusiness

Establishment

Toughening

portfolio withof criteria forof criteria for

the use of abusiness

adoption of

four-quadrant

withdrawal

investment

New growthbusinesses

Current mainstay
businesses

Conventional
businesses with low
profitability andgrowth potential

Mature businesses

Growthpotential

framework
Low

Low

Capital profitability High

Secure both growth potential
and capital profitability© The Japan Steel Works, Ltd. All Rights Reserved.

35

©
© The
The Japan
Japan Steel
Steel Works,
Works, Ltd.
Ltd. AllAll Rights
Rights Reserved.
Reserved.

36