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New Year Message from CEO

SHOWA DENKO K.K.
January 6, 2014

Let’s Strengthen Our Businesses to Return to a Growth Track

While economic recovery is expected in 2014, we should not be very optimistic about our business environment because we need to be prepared for stagnation of domestic demand after the consumption tax hike and economic slowdown in China and other emerging countries. In view of the intensifying global competition and the shrinking Japanese market, we cannot return to a growth track unless we reform our business models in all areas by accurately understanding the structural changes in the market and taking proactive action.

Under these circumstances, we are launching “Phase II” business plan for the 2014-2015 period under PEGASUS. We will continue taking various measures to strengthen our businesses, quickly detecting continual changes in the business environment and seizing new business opportunities for future growth.

Let’s Work Together toward Sustainable Growth

In the Phase II period, we will continue to position the HD media and graphite electrode operations as “Base (Growth)” businesses. These two businesses, which serve as “Wings” of PEGASUS, are now in a period of adjustment due to the changes in the market environment. We will steadily strengthen their production systems and business foundations in the 2014-2015 period in preparation for future growth.

Meanwhile, we will strengthen our businesses in semiconductor-processing high-purity gases, functional chemicals, high-purity aluminum foil, and aluminum cans, positioning them as “Growth” businesses. To seize business opportunities in the rapidly growing Asian markets, including ASEAN, we will allocate necessary resources to these operations and expand them in terms of both business scale and profit.

In the category of “Base (Stable)” businesses, such as petrochemicals, basic chemicals, industrial gases, and rare earth magnetic alloys, we will increase their profitability by strengthening their competitive power. We will achieve this by developing high-quality products and advanced technologies as well as renewing production facilities. We will also drastically reduce costs of these businesses. Meanwhile, we must realize safe and stable operation, which forms the basis for our sustainable growth. Needless to say, we will continue to give top priority to safe and stable operation in each business area.

In the “New Growth” category, we need to quickly realize good results. We will preferentially allocate resources to new development themes—SiC epitaxial wafers for power devices, fuel cell catalysts, and LIB materials—and to certain themes found in peripheral areas pertaining to existing businesses.

The year 2014 is very important as the first year of the Phase II period. While it is important to reflect on the past, we should not stop there. I ask everyone to work together and face up to the difficult situation, seriously consider what you should do and can do, and achieve a breakthrough. Let’s join forces to realize the growth of the Showa Denko Group!


For further information, contact:
Public Relations Office (Phone: 81-3-5470-3235)