The Eighth Medium-Term
Management Plan

To become a truly unique and excellent corporate group that operates on a global scale, Sanyo Chemical Group has established the long-term goal of growing into a major corporation both in name and substance and is aiming to achieve consolidated net sales of ¥300 billion and operating income of ¥30 billion by FY2020. The Eighth Medium-Term Management Plan (period: FY2011 to FY2014) is positioned as an important stepping stone toward these goals, and under the slogan "Challenge 2000 & 200^*" we will endeavor to secure consolidated net sales of ¥200 billion or higher, operating income of ¥20 billion or higher, and return on assets (ROA) of 12% or higher by FY2014, the final fiscal year of the plan.
In order to achieve these targets, all Group companies will work together to promote globalization and concentrate management resources on Strategically Developed Products (Strategic Products^**). In addition, steps will be taken to systematically train the global personnel that will form the foundation of our continued growth, and to execute bold organizational reforms in such fields as personnel training in order to boost the abilities of our personnel to the maximum extent possible.
Note that this plan does not reflect the impact of the Great East Japan Earthquake because it was formulated before this major disaster occurred. Therefore, there is a possibility that some of the numerical targets may be revised after the impact of the disaster is taken into account.


*		This slogan refers to numerical amounts recorded in units of 100 millon.

**		Strategic Products: Refers to the products developed and those that are being developed on a priority basis so as to improve profitability and expand business, mainly for the automotive, information and electronic materials, as well as toiletries and health care business fields.

Challenging Ourselves to Achieve New Dreams

Overview of the Eighth Medium-Term Management Plan

1.		Reaffirm the spirit of our Company Motto, *Let us contribute to building a better society through our corporate activities,* and make it the basis of our policies.

2.		All employees will challenge themselves in order to realize "a truly unique and excellent corporate group that operates on a global scale."

3.		Promote the evolution of individual-based management and aim for "invigoration of people and the organization."

4.		In the course of our actions keep compliance and corporate social responsibility in mind.

5.		Strive for perfection in safety and for harmony between society and the natural environment.

6.		Continue to create innovative technologies by actively conducting R&D activities.

Given our aim of achieving consolidated net sales of ¥300 billion by FY2020, we will achieve net sales of ¥200 billion by FY2014, an important stepping stone toward the long-term goal, and aim to expand overseas net sales, primarily in China.

Net Sales Target, Sales Target by Segment, Overseas Sales Target

Through the contribution to profitability of Strategic Products, we will achieve a consolidated operating income of ¥20 billion or higher by FY2014 and ROA of 12% or higher.

Consolidated Operating Income Target, Operating Income Target by Segment

Strategic Products newly set in the Eighth Medium-Term Management Plan

Eighteen new items have been added in the Eighth Medium-Term Management Plan. These are comprised of new growth-driving products, which refers to items for expanding the business foundation aimed at the global development of existing businesses, and basic products for expansion, which means items in new business fields that are expected to grow in the future.
· New growth-driving products... Energy-related agents, agents for electronic components, bio-related agents, etc.
· Basic products for expansion... Superabsorbent polymers, raw materials for polyurethane foams, imaging materials, etc.

			(Billions of yen)
Category		FY2010	FY2014 (Target)	Change
Strategic Products newly set in the Eighth Medium-Term Management Plan		1.1	39.0	+37.9
	New growth-driving products	0.9	9.0	+8.1
	Basic products for expansion	0.1	30.0	+29.9
Strategic Products carried over under the Seventh Medium-Term Management Plan		19.1	27.0	+7.9
Total		20.2	66.0	+45.8

Strategic Products carried over from the Seventh Medium-Term Management Plan

There are 11 items that we have carried over from the preceding Seventh Medium-Term Management Plan. Lubricating oil additives, thermoplastic polyurethane beads for the interior parts of automobiles, permanent antistatic agents, etc.

We plan to invest a total of approximately ¥50 billion during the four-year period of the plan and we will steadily increase our spending on R&D every year, investing a total of approximately ¥24 billion during the same four-year period.

Major capital investment items


Expansion of production facilities for Superabsorbent polymers .....................................		approximately ¥5 billion

Expansion of production facilities for lubricating oil additives ...........................................		approximately ¥3 billion

Expansion of production facilities for raw materials for polyurethane foams ..................		approximately ¥3 billion

New construction and expansion of production facilities for raw materials for toners ...		approximately ¥5 billion

Expansion of general-purpose organic synthesis production facilities ............................		approximately ¥3 billion

1.	*Facilitate individual-based management* evolution (training and effective utilization of personnel**)
	We will build mechanisms that stimulate the motivation of employees, facilitate evolution of the mechanisms adopted as a system under which the dreams of Sanyo Chemical can be shared, reconstruct an environment and systems that utilize people fully, strengthen the independence of all individuals, and draw out their latent abilities.

2.	Promoting Sanyo Chemical Group management
	(1)	Comply with International Financial Reporting Standards (IFRS)
	(2)	Reform management systems
	(3)	Promote internal control of non-financial reporting
	(4)	Strengthen recruitment activities and train global personnel
	(5)	Implement capital investment accurately within the Group

3.	Promoting globalization
	(1)	Stabilize the profitability of all existing overseas sites, and expand their contribution to the profit of the Group
	(2)	Improve the overseas net sales ratio
	(3)	Execute policies to strengthen sales and marketing capabilities in Asia, a growth market
	(4)	Systematically train global personnel and strengthen globalization promotion structures involving all of the companies in the Group

4.	Expanding sales
	(1)	Ensure a net sales growth rate higher than the world economic growth rate by concentrating our strengths on priority core businesses and growth markets
	(2)	Target business expansion of the Superabsorbent polymer business
	(3)	Open new marketing sites in the ASEAN region in order to promote globalization and expand the Asia business

5.	Improving profitability
	(1)	Improve the ratio of income to net sales through the launch of Strategic Products newly set in the Eighth Medium-Term Management Plan and sales expansion of the Strategic Products carried over from the Seventh Medium-Term Management Plan
	(2)	Promote cost reductions
	(3)	Procure raw materials at the best prices through the promotion of global purchasing
	(4)	Reduce fixed costs through production innovations and careful selection of capital investment

6.	Bolstering research and development capabilities
	(1)	Increase the ratio of new/improved products* to 40% or higher at an early date
	(2)	Focus on development of the Strategic Products newly set in the Eighth Medium-Term Management Plan
	(3)	Improve research efficiency
	(4)	Improve the ratio of patented products to net sales

	*	Ratio of new/improved products: the ratio of new or improved product sales that have been introduced to the market in the past five years to total net sales