Message from the CEO

I am Manabu Chikumoto, and I assumed the position of representative corporate executive officer, president & chief executive officer of Mitsubishi Chemical Group Corporation in April 2024. In recent years, the Group has sought to improve its financial position and has achieved a certain degree of success. On the other hand, investment in growth areas has been insufficient, and the Group’s profit structure now relies on the Industrial Gases and Pharma (segment name changed from Health Care in fiscal 2024) segments for the majority of its core operating income. To reach our true potential and improve the profitability of the chemical business, which is the heart of our origins, we will further promote the business reforms that have been carried out to date. Looking ahead, we will also actively invest through a process of selection and concentration, and grow the bottom line by expanding the top line.
　To this end, in the spring of 2024 we implemented major changes to our leadership team consisting of executive directors and officers. This new team will focus on frontline capabilities and growth as we aim to dramatically improve our earning power.

For the Group, with the chemical business at its core, it is critical to urgently address challenges such as carbon neutrality (CN) and circular economy (CE) to realize a more sustainable society. In addition, restructuring is likely inevitable in the petrochemicals industry, where the balance between supply and demand has been disrupted by developments in the Middle East and China. In these difficult times, a clear management vision to propel us forward is essential.
　KAITEKI Vision 30 (KV30), which I was involved in formulating and announced in 2020, represented a clear vision for the Group in 2030 from a social and business perspective, by back-casting from our social vision for 2050. However, shortly after its implementation, we found that some of our key assumptions were unfolding faster than anticipated, such as more aggressive greenhouse gas (GHG) emissions reduction targets and the expansion of renewable energy. There were also unforeseen changes, such as the rise of AI and the pandemic’s impact on society. With the world seemingly on the verge of a major turning point, we began formulating a new management vision, tentatively called KAITEKI Vision 35 (KV35), and a new plan (hereafter referred to as the New Medium-Term Management Plan) will be announced in the fall of 2024.
　While more details will be shared soon, the basic premise can be summarized as transforming ourselves into a green specialty chemical company that will realize KAITEKI. While promoting a shift to high-performance materials, the new plan also aims to redefine our objectives within the larger framework of KAITEKI and environmental sustainability.

Below is an overview of our future management strategies for each of our business segments. While the announcement of the New Medium-Term Management Plan is slated for the fall of 2024, it is important to start rolling out feasible initiatives now.

By collectively promoting thorough cash flow management, cost reduction initiatives, working capital management, and a pricing policy that avoids discounting, we are yielding positive results. These measures are taking hold globally and will continue to be promoted in the future. In addition, from fiscal 2024, we have designated ROIC (return on invested capital) as a key management indicator and are working to improve our financial position. We will review each segment from a ROIC perspective and promote actions for improvement by incorporating them into on-site KPIs.

As a leader, I want to gather and utilize the feedback of a wide range of employees, our key stakeholders. To this end, there are three areas that need to be addressed with regard to organizational culture.
　First, we need to dismantle what can be called a deductive-based system. This is a culture in which managers and others easily dismiss proposals and suggestions from employees, which in turn inhibits organizational vitality. Such a culture deprives employees of the ability to think independently and never question directives, thereby denying them the opportunity to grow.
　Second, we need to increase motivation in the field. Lack of motivation not only dampens productivity but also can lead to accidents and other problems. We will review our personnel system, support the active participation of women, and create a work environment in which employees can work with enthusiasm, while emphasizing job satisfaction and career growth.
　Third, employees will be encouraged to take more ownership of their work. When a sense of ownership is combined with a strong desire to “make the business into what it should be in 10 years,” one’s work becomes more than just a job. It develops into a sense of responsibility to leave the business in better shape for the next generation, as if we were handing over the baton. In our day-to-day work, wishful thinking, blind assumptions, and a lack of critical thinking and imagination have no place. We need to embrace an attitude that confronts the truth and faces reality. In order to achieve this kind of culture change, it is important to revitalize communication. I personally visit two domestic offices and one overseas office every month to engage in intimate dialogue. We will also continue to provide various opportunities at the head office, such as town hall meetings for all Group employees and lunch meetings in smaller groups.

It is important for both people and companies to grow. In addition to cost reductions, aggressive investments will grow the top line, the Company, the organization, and the people who work there. The challenge of discovering something new and opportunities to grow are the source of job satisfaction and excitement. For the Group, the cornerstone of growth is to realize KAITEKI, our Purpose. We will turn internal and external challenges into opportunities, strive to fundamentally improve our earning power, contribute to society through KAITEKI initiatives, and aim to sustainably increase our corporate value.
　The share price is a message from the market, and I am constantly monitoring its movements. We will mobilize the collective power of the Mitsubishi Chemical Group to transform it into a business entity that sustainably achieves profitable growth. I believe this will enable us to solidify the trust of our shareholders and investors over the medium and long term. Once again. I would like to ask for your continued support as we make a fresh start.