Message
The Furukawa Electric Group will
actively implement environmental andsocial activities as “an earth-friendlycompany” that aims for “innovation.”
Hiroshi Ishihara
President , Chief Executive Officer & Chief Operating Officer

Furukawa Electric has continued to experience harsh conditions, andunder these conditions we have implemented various measures, aiming
to be a creative company that makes its presence felt in the world. We
embarked upon efforts to make proper adjustments in our workforce,
decrease increase-bearing debt, improve profitability by structuring themechanism of all group companies, reduce costs and decrease inventory.
The progress of our improvement efforts, together with favorable market
conditions and turn of the economy, has led to a steady enhancement inour performance. In addition, we will be focusing on strengthening ourmanufacturing abilities, managing business risks, creating new businesses and customer development. Companies are increasingly expected totake social responsibility. Furukawa Electric, as members of society, will
fulfill our social responsibility not only through environmental activities
and complying with laws, but also by providing products and contributing
to society.
In terms of environmental activities, our slogan is “an earth-friendlycompany.” Aiming to realize a “recycling-oriented society,” Furukawa
Electric has continuously worked in cooperation with its associatedgroup companies to reduce environmental impact and increase its resource capabilities once it has clearly set the standards and timings
that it seeks to achieve. From the perspective of risk management, wehave managed the chemical substances contained in our products andcarried out ground pollution investigations.
With the aim of fulfilling our social responsibilities, Furukawa Electrichas set up a Compliance Committee, ensuring that employees comply withlaws and regulations and that they follow a code of conduct. We have madeefforts to go beyond simply abiding by the laws to strengthen the trust of thecommunity by contributing to the local community and promoting the safety and health of our employees by such means as taking measures against
asbestos. In particular, we have made significant improvements in the management of working hours, undertaking a radical conceptual reform.
Our improved performance has led us to shift from “defensive” to “offensive” management, and we are aiming for “innovation” in technology
and reforms in business, production and management. In doing so, ourenvironmental and social efforts are extremely crucial in gaining thetrust of our customers. We have reported on the content of our activities
in our Environmental Reports, but this year the title has been changed to“Environmental and Social Report,” and we have enhanced the sections
on social responsibility. It is our hope that you will gain an understandingof our activities and continue to offer your support and cooperation.
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Company Policy of the Furukawa Electric Group[Basic Management Policy]●Have a high regard for our customers●Value our employees and bring out the bestin them●Proactively adopt new technologies thatharness creativity[Our Vision]
Pursuing technology innovation and aiming
for a creative and highly profitable company
with a stronger global presence[Management Policy]●Practice of responsive management●Orientation toward profit●Creation of new products and market opportunities●Growing development of global management●Continuous promotion of structural reform●Strengthening of consolidated management

Furukawa Electric Basic Environmental Policy[Basic Policy]
Furukawa Electric recognizes that preservation of the global environment is a critical issue for society, and shall incorporate consideration of environmental preservation issues into every phase of corporate activity, to contribute to the advancement of a sustainable, happy and prosperous society.

[Action Guidelines]●All activities shall be based on an awareness of its effect on the global environment, and environmental preservation activities
shall be pursued by all employees.
●We shall observe environmental laws and regulations and requirements from our customers, and set up voluntary standards toupgrade control levels.
●We shall define environmental targets and objectives, and carry out activities according to this plan, thereby continuously improving environmental preservation activities.
●Environmental concerns shall be taken into consideration in every phase of our work from the R&D and design stages to supply
environmentally friendly products.
●In every phase of procurement, manufacturing, distribution and customer service we shall work to reduce consumption of resources and energy, to promote recycling, and to reduce waste materials and the impact on the environment.
●We shall carry out environmental audits, and review our environmental management system and environmental preservation
activities for continuous improvement.
●We shall educate all employees to enhance their environmental awareness, and promote disclosure of information and social communication, thereby actively contributing to community activities.
Furukawa Electric and its affiliated companies have continuously
promoted environmental preservation activities, aiming to achieve a“recycling-oriented society.” With
continued business development as
our objective, we are also promoting comprehensive cost reductionactivities. We have comprehensively
worked to reduce production costs
and improve quality in conjunction
with efforts related to production activities such as applying technology
in our plants, procuring materials,
and safety management. Of these,
we recognize that environmental activities are extremely crucial due tothe heightened awareness of society
and our customers.
In developing new products, we havecalled our environmentally friendly
products ECOLINK, and consider
them our pillars for research anddevelopment in increasing profitsand exercising our growth potential. Once again this year, we jointly
developed a recycled bobbin using
optical cable waste materials withThe Tokyo Electric Power Company,Incorporated. We expect the highperformance reflow oven that uses
lead-free solder to promote lead-freeproducts. As for halogen-free electric
wires, we were able to significantly
increase their strength, contributing to the increase of halogen-free
products through the expanded useof these wires. In the future, we willcontinue with the development ofenvironmentally friendly productsthat are “creative and capture newmarkets.”
At manufacturing sites we havecontinuously carried out activities
to reduce the impact on the environment. As something that particularly contributes to profits, we have aggressively embarked upon efforts toreduce waste disposal costs. We have
reduced the total amount of waste
products by sorting and finding newuses for reused waste and eliminating wastefulness, and we have also
decreased processing costs by promoting value processing. In fiscal
2005, we achieved a profitability of
43 million yen for the first time, due
to the results of our abovementioned
efforts and the rise in scrap copper
prices. We will continue to work toreduce waste, the emission of greenhouse gases and chemical substances. Further, 2005 saw an intenseinterest in the health hazards ofKosaku Nakano
Director in charge of environment
Chief Officer, Technology & Production
Director, Member of the Board

asbestos, and we at Furukawa Electric took an immediate, emergency
response to determine the use of asbestos in products, health surveys of
our employees, and whether or notasbestos was used in our factory facilities and buildings, following up
with the necessary measures. Thereis the risk of a variety of issues arising with regards to safety and theenvironment, and we intend to operate with a heightened sensitivity tothese issues.
We present here the report for
2006, which we ask our stakeholders
to read and share with us their frankopinions that we might deepen ourmutual understanding.