Message from the Head of Composites & Shapes

It has been one year and nine months since the formulation of KAITEKI Vision 35 (KV35), the management vision outlining the Mitsubishi Chemical Group's aspirations for 2035, as well as Medium-Term Management Plan 2029.
During this period, the Mitsubishi Chemical Group has clearly defined its business portfolio and implemented a reorganization of its business groups in April 2026. As the Group shifts from a defensive stance to a more offensive, growth-oriented approach, the heads of each business group discuss how they view the changing business environment and how they aim to create value going forward.

The Composites & Shapes Business Group has operated in a challenging environment in recent years as increasing competition from Chinese and Korean companies put downward pressure on profitability. Under these circumstances, we have implemented fundamental structural reforms to improve profitability. Over the past two years, we have consolidated and rationalized numerous sites across both the carbon fiber and composites chain and engineering shapes businesses. At the same time, we have withdrawn from selected markets, including pressure vessels for automotive applications and wind turbine-related applications in the energy sector. Furthermore, we have strengthened pricing discipline and focused management resources on markets where the value of our technologies and solutions is appropriately recognized. As a result, we have been shifting our business operations to focus more closely on growth in high-value-added markets where we can fully leverage our strengths. As of the end of fiscal 2025, we had completed approximately 80% of our restructuring initiatives, and the business group had returned to profitability.

Carbon fiber and composite materials continue to offer attractive growth opportunities driven by increasing demand for lightweight alternatives to metals. In addition to aviation and mobility, where the shift to electric vehicles is progressing, we anticipate opportunities for growth in space and communications due to technological breakthroughs enabled by improved heat resistance. To capture these opportunities, our goal is not simply to supply materials. By working more closely with customers, we are transforming our business model to provide more comprehensive, high-value-added solutions that help address their evolving needs.
One of our greatest strengths is our global business foundation. More than 80% of our sales are generated outside Japan, primarily in Europe, North America, and Asia. In particular, for carbon fiber and composites, we possess a unique integrated value chain that extends from carbon fiber materials through composites to finished carbon fiber reinforced plastic (CFRP) molded products. This value chain provides us with a significant competitive advantage. Because we have a comprehensive view of the entire supply chain and a deep understanding of each stage of the process, we can optimize processes at every stage, including those involving intermediate products. This enables us to help customers improve productivity, shorten manufacturing lead times, and enhance the performance of their final products.
A good example is our proprietary thermosetting resin, developed as a unique composite material. This resin enables rapid curing and contributes to shorter customer cycle times. It also strengthens our competitiveness in mobility applications. We have further optimized this material for automotive body panel applications and are leveraging the advanced molding capabilities of C.P.C. S.r.l. in Italy to support the ramp-up of mass production for components used in robotaxis developed by Zoox, Inc. The robotaxi market is currently undergoing extensive demonstration and validation efforts, particularly in the United States, and is expected to be a significant growth market in the future.

Over the next three to five years, we expect annual market growth of approximately 8%-10% across mobility, semiconductor, medical, energy, and space and communication applications. Within these markets, we will concentrate management resources on areas where demand is growing and where we possess a clear Right to Win. Specifically, we will focus on areas such as robotaxi-related applications, engineering plastic components for some of the world’s leading semiconductor equipment manufacturers, materials that contribute to radiation shielding and containment in nuclear power plants, and materials for medical implants and artificial joints. The semiconductor market, in particular, represents one of the most established and mature markets for the engineering shapes business. We have a long track record of collaboration with some of the world’s leading semiconductor equipment manufacturers in applications requiring heat resistance, stiffness, and dimensional stability.
Our strategy is built on four key pillars. First, we will accelerate co-development with customers to create new solutions. Second, we will further enhance competitiveness by reviewing our portfolio and promoting automation. Third, we will strengthen R&D to respond more effectively to customer requirements while managing development projects based on clearly defined criteria. Fourth, we will advance initiatives to improve resource efficiency and increase the use of renewable energy as part of responsible business management.
We also must transform our sales and marketing activities. In addition to our traditional product-driven approach, we are continuing our transition toward becoming a market-facing business group that prioritizes customer and market needs. By identifying changes in markets and customer needs at an early stage and leveraging them to create new business opportunities, we will accelerate growth moving forward.

I believe that our most important management asset is our people. No matter how strong a strategy may be, it will not lead to success if there are not people and leadership capable of executing the strategy and delivering results. To achieve sustainable growth for the business group, it is essential to strike an appropriate balance between experienced professionals with deep expertise and individuals who bring fresh perspectives and new ideas.
For this reason, we place strong emphasis not only on developing our internal talent but also on actively attracting individuals who bring new knowledge and experience from outside the organization.
Also, as a globally operated business group, it is imperative that we create an organizational environment where people with diverse backgrounds can thrive. By building a business group where diverse talent can leverage their strengths and take on new challenges, we will realize sustainable growth and new value creation.