Message from CEO

Through growth and selective management, we aim to change society and be the best in the world. 

 

We will promote thorough corporate transformation as the first step in our long-term vision 
 

What we have emphasized in strengthening human capital management is the autonomy of each employee and the development of co-creative talent. I have visited 70 business sites each year and held over 100 roundtable discussions and town-hall meetings. Over the course of four years, I have dedicated a tremendous amount of time to engaging in dialogue with employees, and as a result, the number of people who uphold the Purpose*1 on their own and work with their colleagues to realize their strong aspirations and demonstrate the Values*2 is definitely increasing. I was deeply moved by the actions of one officer who traveled all over the world gathering people to launch a new consortium (JOINT3), and I decided to invest in this dream by investing a large sum of money. In addition, a research and development engineer from the former Hitachi Chemical’s friction materials business inspected the former Showa Denko’s aluminum business and concluded that something amazing would definitely happen if they collaborated, and this led to the start of a new project. Furthermore, regarding NCF*3, which has grown into a core product of the Company as a material for AI semiconductors, we achieved rapid launch by introducing the image analysis technology from hard disk media, a completely separate department, into the inspection process, which had been a challenge. All of these things started with the strong aspirations of just one person. A co-creative mindset that transcends the boundaries of specialized fields, which has been widely fostered within the Company, will continue to be a key asset for our growth. 

• *1 Purpose: Change Society through the Power of Chemistry
  *2 Values: Passionate & Results-Driven; Agile & Flexible; Open Minds & Open Connections; Solid Vision & Solid Integrity
  * 3 NCF: Non Conductive Film

In terms of fostering corporate culture, we have been emphasizing the importance of the Values for the past four years. Even if the business portfolio is optimized, if employees cannot demonstrate the Values in those businesses, it will not lead to growth. Therefore, in my first year, I declared that “we want people who resonate with our Purpose and demonstrate our Values as part of our company,” and I have repeatedly engaged in discussions with on-site staff, alongside the HR department, to ensure that everyone understands and can demonstrate the Values. What has been built within the company over the past four years is a shared understanding of what the Values mean in practice. When we told the prospective employees that “Resonac is not a company for lifetime employment, but we will definitely train you to become someone who can succeed anywhere in the world,” we received a great deal of support. The conditions for moving to the next phase have been met.

Maximizing “Strategy × Individual Strengths × Corporate Culture” in anticipation of the arrival of an AI society
 

Resonac’s corporate value increases by maximizing the multiplication of “Strategy × Individual Strengths × Corporate Culture,” and this is already reflected in our achievements. 
The KPIs set forth in our long-term vision with 2025 as the target year were revenue of over ¥1 trillion, an EBITDA margin of 20%, and a PBR above 1x. While sales were close to ¥1.4 trillion in 2022, the reason we specifically stated net sales of over ¥1 trillion is because we were placing emphasis on the EBITDA margin. To reach an EBITDA margin of 20%, it was essential to restructure businesses with large sales volumes but low operating income ratios, and we had been considering establishing an independent olefins and derivatives business since that time. Currently,* sales and PBR have exceeded our targets. Our EBITDA margin for fiscal 2025 was 15.1%, but it is expected to reach 20% once the partial spin-off of the olefins and derivatives business is completed. The results of our structural reforms have been well-received by the capital markets, and we recognize that this is what has led to our current* stock price. 

• * End of June 2026

On the other hand, during our transformation, a major change occurred in the external environment: the dramatic advancement of AI. The surge in demand for advanced semiconductors, which are essential for generative AI, presents us with a great opportunity. In addition, AI will undoubtedly prove useful to us in research and development and productivity improvement across all businesses. Meanwhile, the role of humans is also facing significant changes. There are three things that AI cannot do. It cannot have aspirations, make value judgments based on experience, or create innovation from scratch. This can be rephrased as the Purpose, Values, and co-creative mindset emphasized by Resonac, and human resources who lack these capabilities will likely be replaced by AI. Going forward, it will become even more important to enhance individual capabilities. 

 

Three hurdles that must be overcome in order to achieve growth 
 

Improving capital efficiency through business portfolio optimization

The first step in Phase 2 is to envision growth. We position the semiconductor and electronic materials field as a catalyst for growth, and we will fundamentally improve the profitability of each segment. 
Resonac is a functional materials company, and the source of our value creation comes from our extensive knowledge of organic resins and inorganic fillers, as well as our technologies for mixing them. In other words, the potential applications of these technologies are limitless, but from the perspective of maximizing corporate value, we should focus on semiconductor materials for the time being. However, if, for example, Doraemon becomes popular in the future, we could develop functional materials for creating “Doraemon.” I believe that by combining the technological foundation we have cultivated to date with co-creation, we can continue to generate new functions. 
The question is, how long will the semiconductor market continue to grow? It’s unclear how long the current trend of generative AI will continue, but given that semiconductor demand has cycles, there is a high possibility of a temporary decline. However, a key characteristic of semiconductors is that they continue to grow alongside high volatility. And it is precisely because each peak that follows a valley is higher than the previous peak that the semiconductor market has continued to grow. Hesitating to invest out of fear of a long payback period will result in missed opportunities, therefore we should actively allocate resources. Making decisions requires not only courage, but also determination and conviction; without these, one cannot reach the World-Class stage. 
The automotive industry is difficult for other industries to enter, but by approaching areas that require advanced materials technologies, such as power modules and thermal management, we believe we can demonstrate our presence in the industry. 
On the other hand, the business structure of the olefins and derivatives and graphite electrodes businesses, which do not offer long-term growth prospects and are highly volatile, must undergo a thorough review. In the automotive field, the production of resin molded products such as tailgates was deemed to fall outside Resonac’s fitness for strategy in terms of materials technologies, and therefore the business was sold off. 
Through the growth of materials for AI and the optimization of our business portfolio, we aim to increase sales in the semiconductor and electronic materials segment to over 50% of our total sales. In terms of the EBITDA margin, the semiconductor and electronic materials segment significantly exceeds 20%. We anticipate that improving the business structure in other segments and increasing operating profit ratios will boost our overall EBITDA margin. 
Above all, if we can establish ourselves as a functional materials manufacturer focused on semiconductor materials, our corporate value will increase significantly. What can be expected from this is the formation of a “cluster” with other players. Japanese manufacturers of semiconductor materials possess advanced technologies, but their sales volume is not large, making it difficult for them to make large-scale investments to meet the demand for AI. However, if manufacturers collaborate, and in some cases merge, they may be able to complement each other in terms of technological collaboration and investment. Once a certain market capitalization is reached, this could also serve as a safeguard against hostile takeovers by large overseas corporations. Synergistic effects leading to the development of the entire semiconductor industry would also be beneficial for Japan. In this context, we will accelerate business growth so that Resonac can become a leading company. 

Strengthening business growth capabilities through co-creative innovation
 

The second step is expanding growth. Based on our cultivated co-creative mindset, we will maximize our internal and external networks and lead the market, primarily in terms of semiconductor materials. 
The Company’s growth in the semiconductor materials field to date has been due to our strength in understanding our customers. Resonac is not a semiconductor manufacturer, but we have connections with major players such as TSMC, NVIDIA, and Intel, as well as hyperscalers such as GAFAM, allowing us to proactively gather information on industry needs. By drawing on accumulated information to create a five-year roadmap for semiconductor evolution and working backward to advance the research and development of materials, we have been able to make rapid proposals to customers. 
However, Resonac is not the only company with the latest information. By working with top global companies in the fields of materials, equipment, and design, we can share more advanced knowledge. Based on this idea, we established the co-creative evaluation platform “JOINT3” in 2025. The panel-level organic interposer field, where materials development is advancing, is expected to become a game-changer, with demand rapidly expanding due to the increase and acceleration of data communication capacity. Through co-creation amongst the 28 participating companies, we believe we can bring innovation to advanced semiconductor packages. 
Through our previous experience establishing “JOINT” and “JOINT2,” we have accumulated expertise in consortium management, including the management of results and patents. Leveraging these strengths, “US-JOINT,” a joint venture involving 12 companies, including materials and equipment manufacturers from Japan and the U.S., began full-scale operation in 2026. The most important point is that a base has been established in Silicon Valley, U.S. As GAFAM expands its influence, it continues to create new concepts for semiconductor packages. The aim is to establish a consortium to handle the above and function as a back-office for prototyping and experimentation. Becoming a strong partner of hyperscalers, who will lead the next AI era, will also allow us to anticipate demand. 

Establishing the foundation for sustainable growth centered on a culture of co-creation

For the third step, the theme is supporting growth. The Company’s engagement score for “degree of implementation with the Purpose and Values” improved significantly from 34% in 2022 to 60% in 2024. However, the score for 2025 remains at the same level as 2024. The next important step will be ensuring that employees feel happiness. Based on our established understanding of what the Purpose and Values mean in practice, we will implement organizational reforms. 
The biggest hurdle in this process will likely be that employees who are unable to demonstrate the Values will remain within the Company. Happiness thrives when there are no people around who make others unhappy. Engagement survey results clearly show that if even one person out of ten makes others unhappy, the motivation of those around them drops significantly. Furthermore, interviews with on-site employees have revealed that individuals who make those around them unhappy are generally those who are unable to demonstrate the Values. Given these circumstances, we declared in 2026 that we will provide thorough feedback to those who are unable to demonstrate the Values, encourage them to reflect on themselves, and if improvement is not achieved, we will support them in finding a suitable environment for their success. This may be rather harsh, but it is a topic we cannot shy away from. On the other hand, the majority of employee reactions to this declaration were positive. It seems that the desire to cherish our Purpose and Values is spreading. 
Japanese companies tend to have a strong resistance to giving negative feedback. When it comes to employment, I believe it is wrong for excessive caution to prevent us from providing appropriate guidance and support. For individuals who are unable to demonstrate the Values, the first step is to help them become fully aware of their situation, repeatedly develop improvement plans and encourage action, and if results still do not materialize, then we must consider roles and environments, including external ones, that better utilize the individual’s strengths. This kind of healthy communication is not about denying an individual’s value, but about finding opportunities for better growth and success, and managers should carry this out with determination and conviction. 
To concretely advance reforms, a fair and objective approach is necessary, such as establishing indicators for the Values and conducting 360-degree feedback by assessing individuals’ behaviors against those indicators. Although it will be a very demanding task, this eliminates subjective indicators such as likes and dislikes, and this means that we should be able to obtain results that are highly satisfactory. 
At the same time, we aim to become an organization where employees who demonstrate the Values feel more fulfilled. Humans are creatures who find happiness in connecting with others, and a company where employees can experience a sense of accomplishment alongside their colleagues is a wonderful place. To maximize this appeal, we must cultivate managers who are receptive to taking on challenges. We plan to strengthen training systems and promote environmental improvements, such as by showcasing co-creative talent who engage those around them as model cases. Furthermore, as a foundation for all of this, being healthy both physically and mentally is of paramount importance, and we will further accelerate our initiatives for health management. 
We will also begin working on a new system design. In particular, we are newly introducing a project-based organizational structure. We will use different organizational structures depending on the characteristics of the work. For areas where reproducibility and stable quality are important, we will use a traditional hierarchical organization, and for areas where rapid innovation and reform are required, we will enable the selection of an agile project-based organization that transcends departmental and divisional boundaries. In a project-based organization, the goal is to create a system where one person can contribute to multiple projects by assigning Project Managers to oversee projects and People Managers to manage human resources. By allocating the necessary personnel to focus on key issues, goals and missions will become clearer, and various initiatives should become more active. Cross-disciplinary co-creation will likely increase even further. 
Reforms concerning people and culture are inevitably met with resistance and anxiety. However, the initiatives of the past four years have fostered a sense of flexibility in adapting to change, and employees now share a belief that “Resonac can do whatever it takes.” While respecting the wishes of each individual, conducting phased trials, and following steady procedures, we will pursue happiness for everyone through the implementation of bold reforms. 

Passing on a more sustainable planet and society where people can live with happiness to the next generation
 

The growth to be achieved in Phase 2 must contribute to the society of the future. What Resonac aims to achieve through co-creation is “a more sustainable planet and society where people can live with happiness.” Although we face challenges such as war and climate change, I do not dislike the planet as it is today. I want to pass it on to the next generation in a good state. To fulfill our mission, it is essential to maintain a balance between profit generation and sustainability. 
First and foremost, it is important to contribute to society through our business. AI, which will become the technological infrastructure of the future, will solve social issues in many areas. Resonac’s technological capabilities, which contribute to these areas, will contribute to the advancement of humankind. In this way, we must incorporate into all our businesses a perspective that looks beyond our activities to society at large in order to create new value. 
In addition, I would like to apply a co-creative mindset to our sustainability initiatives. At Kawasaki Plant, which manufactures basic chemicals and has high CO2 emissions, we decided to partially introduce hydrogen-fired gas turbines after receiving project approval from the Ministry of Economy, Trade and Industry. Kawasaki Plant has also been promoting a “gasification chemical recycling business,” which generates ammonia and hydrogen from used plastics, for over 20 years, and we are proud to say that our chemical recycling technologies are among the most advanced in the world. Building on these achievements and working in cooperation with Kawasaki City, we will develop Kawasaki Plant into an environmentally conscious urban plant, and in doing so present a model for a sustainable society. 
Furthermore, I believe that Resonac’s thorough reforms will transform the conservative mindset within Japanese industry, which is sometimes derisively called JTC.* In fact, we have seen an increase in consultations from managers from other companies, and we have begun to truly feel the attention we are receiving from outside the company. In the HR industry, we have sometimes been called “too innovative to imitate.” In the future, when people look back on the history of Japanese industry, we aim to become a force that will mark a new era where people speak of “before Resonac and after Resonac.” I believe that the determination and conviction of CEOs in carrying out reforms will stimulate Japanese industry, which has been stagnant for a long time. 
Resonac is leading the way towards the next stage of growth. I am not the only one who is serious about this. When I interact with employees who are drawing roadmaps on-site, the sparkle in their eyes leaves a very strong impression on me. I no longer feel that we are outmatched by even the world’s leading companies. Please look forward to our next phase. 

• * JTC: Abbreviation for Japanese Traditional Company A company that implements Japanese-style management.