2
Index
Aspiration (Grand Vision 2020) P3 ~ P4
Looking back on 3D-Ⅱ P5 ~ P7
The New Mid-Term Plan(3D-Ⅲ) P8 ~ P16
Specific Plans of the Main Policies P17 ~ P31
Management Objectives (numerical values) P32 ~ P38
Specific Plans by Segment P39 ~ P44
P.4
The Daicel Group Long-Term Vision
Grand Vision 2020
Design the Future
The design and initiative phase
・We must enhance our businesses so that society and our customers recognize each business as the world leader in its respective field.
・We should establish five new business units, each capable of achieving sales of ¥10 billion.
Aspiration (Grand Vision 2020)
Develop New Value
The growth and development phase
Deliver the Best Solution
The achievement and delivery phase
3D Step-up Plan Grow
th
3D-III Mid-Term Plan (for FY 2017-2019) 3D-II Mid-Term Plan
(for FY 2014-2016) 3D-I Mid-Term Plan (for FY 2011-2013)
3D-III
Committed to becoming a company that delivers the best solutions
103
93 87 79
82
100 110
120 109
321
253 303
375 372
439
345
267 277
94 62 78
106 109 106
97
51 41
Methanol Asia spot price ($/ton)
Crude oil Dubai ($/bbl)
Sales Operating profit
3,780
3,202 3,537 3,419 3,585
4,138 4,438 4,499 4,401 4,300
4,600 5,000
106
209
327
204 262
379
513
643 643
400 450
500
'08 '09 '10 '11 '12 '13 '14 '15 '16 '14 '15 '16
0.6% 5.6% 8.0% 5.5% 6.7% 9.0% 10.5% 12.2% 12.2% ROE
2.8%
6.5% 9.2% 6.0%
7.3% 9.2%
11.6%
14.3% 14.6%
3D-Ⅱ 3D-Ⅰ
9.3% 9.8% 10.0%
(FY)
Mid-term Plan 3D-II
Crude oil Dubai: $100/ bbl Methanol : $400/ton Exchange rate: 100Yen/$
(Unit:100 million yen)
Operating profit ratio
Changes in Sales and Operating Profits
P.7
To realize continuous and sustainable growth, we will carry out a radical review of conventional methods, and aim to create next
generation business
Performance Results and Issues of 3D-II
While a change was required, a drastic change was not fully achieved. We are still halfway to realization of the next new growth
Existing businesses : Need to further realize the potential growth in the global market New businesses : New products are coming out. Speed up the growth to bring them
into business units Investments : R&D investment was as planned. Further actively utilize M&A for
investment Earnings power : Progress was achieved in safety, quality and cost reduction
initiatives, and the structure of the company has been strengthened. Continuously respond to society's increasing demand for “safety” and “quality”
Performance targets and results Sales of 500 billion yen : unachieved (FY2016 : 440.1 billion yen) Operating profits of 50 billion yen : achieved (FY2016 : 64.3 billion yen) Operating profit ratio ≧ 10% : achieved (FY2016 : 14.6%)
P.9
[Global economy] With the progress of globalization, there is a diversification of
business partners An increase in the degree of influence on businesses due to
changes in trade policies A continuing increase in the presence of the Chinese and
Indian market
The Environment of 3D-III
[QOL] (Quality of Life) Importance of QOL in a society with low growth, decreasing
birthrate and aging population, and good longevity An increase in aspirations for reassuring, safe and healthy
lifestyles Progress of life sciences leading to an age of personalized
medicine and protection
[Rise of new technology domains] The electrification of automobiles and the acceleration of
self-driving technology Diversification of smart devices with the evolution of the IoT
and AI Increase of prediction accuracy with the arrival of the big
data era
The environment in which growth was achieved with conventional methods and ways of working is changing rapidly
We will realize new growth by responding to the changing environment. We will provide the best solutions with the highest reliability in terms of
quality and safety to a diverse and global clientele.
Enhance the business models to fully fit global customers
Speed up the creation of new businesses in areas such as medical, health care domains
Strengthen capability to provide solutions by innovation of our methods and ways of working
[The labor environment] Demand for an increase in productivity due to reduction of the
workforce and the intensification of global competition As the production base spreads out around the globe, the
personnel requirements are becoming increasingly sophisticated
An increase in mobility features with the upgrading of telecommunications (ICT)
Environmental changes (= new opportunities)
P.10
New customers Geographic
expansion, etc.
New technology and products
Application development, etc.
Continuous Growth
Best Solution Expansion of core business Growth of new business
Aspired State
Increase in number of solutions
Market expansion
Objectives of Mid-Term Plan “3D-III”: Continuous Growth
3D-II (Current state)
Realize continuous growth by providing the best solutions that respond to changes
Image of “Growth” “Growth” = Increase in number of solutions × Expansion of the market
P.11
(1) Sales 500 billion yen (FY2016 Actual 440.1 billion yen)
(2) Operating profits 70 billion yen
(FY2016 Actual 63.4 billion yen)
110 yen/$
Methanol (Asia spot price) $300/ton
Crude oil (Dubai) $55/bbl
Domestic naphtha 42,000 yen/kl
Raw
m
ater
ials
Exchange rate
Performance Targets
Assumptions
P.12
3,537 3,419
3,585
4,138
4,438 4,499 4,401
4,600
327 204 262
379 513
643 643 610 700
’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’19
Performance Targets
◎Performance targets (Unit:100 million yen)
(Unit: 100 million yen)
3D-II 3D-I 3D-III
Sales Operating profits
FY2017
4,600
610
620
370
FY2019
5,000
700
720
420
5,000
(FY)
FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 Sales 3,537 3,419 3,585 4,138 4,438 4,499 4,401
Operating profits 327 204 262 379 513 643 643
Ordinary profits 316 211 286 414 551 654 662
Net profits 168 118 154 228 313 403 432
◎Past Results (Unit:100 million yen)
P.13
8.0%
5.5% 6.7%
9.0%
10.5%
12.2% 12.2%
10%
ROE
2,353 2,347 2,629
2,958
3,562 3,687
3,994
4,500
168 118
154 228
313
403 432 420
Net worth
’10
’11
’12
’13
’14
’15
’16
’19 Plan
Net profit
3,537 3,419 3,585
4,138 4,438
4,499 4,401
5,000
327
204
262
379
513
643 643
700
’10
’11
’12
’13
’14
’15
’16
’19 Plan
Operating profit
9.2%
6.0% 7.3%
9.2% 11.6%
14.3% 14.6% 14%
Operating Profit Ratio
Sales
(FY) (FY)
Important Operating Indices
(Unit:100 million yen,%)
Operating Profit Ratio
(Unit:100 million yen,%)
Return on Equity (ROE)
Actual Actual
P.14
Important Operating Indices
ROE 10% or more
Profitability Sales profit ratio
Efficiency Total asset turnover
Proactive investment in “Growth Business Unit (BU) ” and growth areas
Optimize or withdraw from low growth BU Improve added value through Best Solutions Comprehensive cost reduction Increase awareness of net profit
Improve uniform management of the group including affiliated companies accounted for by the equity method
Improve productive capacity Reduce inventory Reduce working capital Reduce non-essential and non-urgent assets
Financial Leverage Maintain a healthy financial state
P.15
Change : We will CHANGE the approach of inventing strategies by abolishing simple extensions of conventional thinking.
2. Change actions, working environment
1. Change Mindset
Foundational Ways of Thinking
Change to BU approach in planning and carrying out strategies
Actions
Working environment
Challenge: We will continue to CHALLENGE ourselves to break down the status quo and accomplish major results and growth.
Courage : We will have the COURAGE to jump into new areas
Integration of diversified values and common cultural grounds forming the company
Proactive utilization of IoT and Big Data
3C Spirit “Change, Challenge, Courage”
Accelerate all business actions and processes, including decision making
Prepare and develop environment to accelerate innovation
P.16
Main policy (1) Promote selection and concentration through BU management BU management will provide the foundations for continuous growth. Promote growth through priority allocation of resources to “Growth BU”.
Main policy (2) Strategic investment to proactively introduce technologies and new products from outside Implement the proactive investment that was not fully realized in 3D-II. Accelerate the creation and growth of BU that will become the driving force for continuous growth, through M&A, etc.
Main policy (3) Improve the environment to promote growth Construct a system to promote the main policies of (1) and (2) above
Towards continuous growth for the next decade and next century
Basic Ways of Thinking, Basic Strategies and Main Policies of the Mid-Term Plan “3D-III” for Continuous Growth
Basic Ways of Thinking
Change mindset Change actions and working environment
Basic Strategies For continuous growth… Priority allocation of resources to “Growth BU” Acceleration of creation and development of “Growth BU” through open innovation
P.18
High
Low
Low High
[Reorganization BU] Optimize or withdraw
[Foundation BU] Stabilization and optimization
Existing BU and management to provide foundation for continuous growth.
Main policy (1) Promote selection and concentration through BU management
[Foundation] Revenue base supports
the business
[Growth] Drives the growth of
the business
[Reorganization] Consider reorganization
[Cultivation] Cultivate for [Growth]
Grow
th
Profitability
Allocate resources to “Growth BU” with priority With “New BU”, incubate growth of all businesses and expand “Growth BU”.
New BU
To change or integrate all BU to be suitable for operating strategy boldly, and to consider reorganization, such as segmentation by market.
[Growth BU] Proactive investment and allocation of resources
]
P.19
Invest 250 billion yen for growth
Capital investment: 150 billion yen
R & D Costs (including M&A): 100 billion yen
Main policy (2) Strategic investment to proactively introduce new technologies and products from outside
Capital investment
1.4 times
VS 3D-II (110 billion yen)
R & D Costs (including M&A)
Double VS 3D-II
(50 billion yen)
P.20
Build the basis to support continuous growth
Strengths External environment Domain Focus
Business domain (1) Medical, health care
Optimize Daicel strengths
for a QOL society
Global base of CPI, network High degree of recognition for chiral
column related products in the pharmaceutical industry
Bio-conversion technology Excipient technology
[Importance of QOL] QOL is important in a society with low
growth, decreasing birthrate and aging population, and good longevity
Popularization and spread of generic drugs due to attempts to control medical expenses
Progress of life sciences leading to an age of personalized medicine and protection
[Smartification] Evolution of the IoT and AI has led to
the diversification of smart devices An increase in mobility features with
the upgrading of telecommunications Electrification of automobiles and
the acceleration of self-driving technology
Fine organic chemicals technology (resistant monomers, polymers)
World's first commercialized cured wafer lens
New resin, hybrid materials Distillation technology ,metal
control technology (Highly pure electrical material solvents)
Business domain (2) Electronics
Optimize Daicel strengths
for a smart society
Main policy (2) Strategic investment to proactively introduce new technologies and products from outside
P.21
Business domain (2) Electronics Business domain (1) Medical, health care
Turning selected new business unit prospects into BU
10 billion yen ⇒ 35billion yen 16 billion yen ⇒ 45 billion yen
Cosmetics [Existing]
1,3BG, polyglycerol [New]
Skin care products
Performance film [Existing]
Barrier film [New]
Hard-coat film for display, film related to clean energy processes
Optical parts [New] Wafer lens
Medical, health care [Existing]
Chiral core (columns, chiral stationary phase), separation services
[New] Biopolymer purifying tools (bio-separation and others), analysis services, specialty chemicals, achiral columns, pharmaceutical formulating solutions, raw materials for functional foods, new medicine administering device
Electronic materials [Existing]
LED encapsulants, resist materials for printed circuit boards, solvents for electric materials, solvent additives
[New] FPD/ArF resist materials, solvents for printed electronics devices, silicon encapsulant, low metal solvents, peripheral semiconductor materials
Main policy (2) Strategic investment to proactively introduce new technologies and products from outside
* Numbers indicate sales FY2016 ⇒ FY2019 (Organic and inorganic growth)
P.22
[CPI] Biopolymer purifying tools (bio-separation and others) Analysis services Specialty chemicals, Achiral columns [Organic chemicals] Resists, Low metal solvents, Cosmetic raw materials [Daicel Value Coating Ltd.] Film related to clean energy processes
Internal Company, Group Company
New Materials Development
Primary Research Items
Battery Area Themes • Solar cell materials • Heat resistant
separator • Electrode binder,
others
Primary research
Technology inspection
Draft Next New Business
Plan
Corporate Implementation of next new
business plan Co-processed excipients for Orally Disintegrating Tablets
Display film Raw materials
for functional food Wafer lens
• In 3D-III, we aim to develop BU from new BU prospects nurtured during 3D-I and 3D-II by combining Internal Company, Group Company and Corporate products • The decision to commercialize will be determined during 3D-III
• Laminated semiconductor
• Detonation nanodiamonds
• Silver nano ink • New medicine
administering device • Hollow-fiber
New BU Prospects
• Medical, health care
• Cosmetics
• Performance film
• Electronic materials
• Optical parts
Exploration and cultivation of new business themes
Main policy (2) Strategic investment to proactively introduce new technologies and products from outside
Product Planning Themes
P.23
仕事の 取り組み方変革
[Strengths] [Product] [Growth strategy] [External environment]
Aging society Rise of macromolecule medicine Development of new medical technology ↓ Extension of healthy life expectancy Efficient separation and refinement systems Efficient drug administration methods
Medical
Health care (Health foods)
Dru
g de
velo
pmen
t su
ppor
t D
rug
Adm
inis
trat
ion
Met
hods
Low molecular
weight medicine
Macromolecule medicine
Oral administration (low molecular
weight medicine)
Parenteral administration
(macromolecule medicine)
Raw materials development
Supplement
makers
Excipient development
Consumers
Func
tion
al r
aw m
ater
ials
, ex
cipi
ents
dev
elop
men
t
Cellulose chemistry
[CPI existing business]
Chiral columns, fillers
New products (analysis services,
specialty chemicals) Global expansion
(India, China)
Separation and refinement
Product development
New technology/ product
development/ acquisition
Excipients to facilitate taking
medicine
[Customer] New
medicine/ generic drug
makers
[Customer] Supplement
makers /consumers
Distribution and Sales ready
Global expansion Expansion into health
foods Product development
Pyrotechnic engineering
New medicine administering devices
• Disperse in the tissue
• Intracellular administration
Bioconversion technology
Functional food raw materials
Excipients to facilitate taking medicine
(cellulose chemistry base) ×
Functional food raw materials (bioconversion
technology base)
Supplements
Drug industry global network,
chromatographic technology
Distribution and Sales ready
Product acquisition
Product development
Co-development with universities
(new medical technology)
Medical, Health Care Having our CPI business based in 5 key areas around the globe is a strength.
Using our global technical services and our global network of drug industries as a base, we will further expand into the medical and health care fields.
[Area]
P.24
Cosmetics
[Strengths] [Products] [Growth strategy] [External environment]
Deregulation of the domestic cosmetics industry Growth of the Asian cosmetics market
↓ Increase in OEMs due to the formulation specialization of brands of existing cosmetic makers Acceleration of manufacturing outsourcing due to an increase in new cosmetic makers entering the market
Cosmetics
Composite power of cosmetics raw
materials
Acquire increased ability to make
proposals due to coherent raw
materials planning and formulation
planning
[Customer] Cosmetic makers
Global network obtained through
1.3 BG
Safety evaluation Evaluation and
analysis technology Quality control know-
how
Having a network of cosmetic manufacturers around the world through 1.3 BG, and our analysis/ evaluation technology and safety evaluation are strengths. We aim to expand our business by
combining our original raw materials development with cosmetics ODM compounding technology.
[Area]
Skin care/hair care base materials
Enter the Asian market
P.25
Optical Parts
[Strengths] [Products] [Growth strategy] [External environment]
A new optical sensing market has started up due to the needs of smartphones, in-vehicle devices, VR (virtual reality), the IoT, etc.
↓ Demand for miniaturized, slim, heat resistant optical parts that cannot be met by conventional injection mold technology
Optical parts
Development of
mass production technology
Infrastructure acquisition
[Customer] Module makers
Aim to set up distribution and sales in the optics market that is expected to have high growth in the future, using Daicel technologies as a base, such as heat/UV curing resin
design/development and processing technology.
[Area]
Heat cured lens (imaging
system lens)
Biometric recognition (face, iris) 3D sensing In-vehicle sensing use
Biometric recognition (face, iris) 3D sensing VR device use
Heat/UV cured resin design technology Heat/UV cured resin mold technology World's-first commercialized cured wafer lens Collaboration with precision machining companies
UV cured lens (illumination system lens)
Distribution and Sales ready
Global expansion (approach system
makers)
P.26
Functional Films
[Strengths] [Products] [Growth strategy] [External environment]
Displays are becoming more high definition and flexible Change to clean energy
↓ Improvements in visibility and film surface strength, and combination of environmental characteristics and economic savings
Hard-coat optical films
Adoption of results of joint development with makers when launching products
Enable mass production by
obtaining clean coaters
Aim to enter the clean energy related process film and optical film markets, using the creation of new materials as a basis, derived from our strengths as a chemical company and the phase separation
structure control that Daicel has uniquely cultivated.
[Area]
• Process film that uses functional polyolefin
Become multifunctional by obtaining dry coating
technology/ manufacturing
equipment
Clean energy related process film
[Customers] Energy related
component makers
[Customers] Display makers/
display component makers
Technology of concave-convex
control from phase separation
technology
Manifestation of new features from molecular design (high mechanical
strength, etc.)
Development of coating materials and prescription
design
Combination of original raw
materials and coating
technology
• Anti-glare film with excellent visibility/clarity
• High mechanical surface strength (high hardness, scratch resistant) film
• High hardness, high flexibility film
• Smooth contact film
• Stylus film
Promotion of research and development to capture the inflection point • Display system
(OLED、μLED) • Greater flexibiilty • Move to clean energy
Obtain business infrastructure to
strengthen existing market place and expand into new
markets
P.27
[Strengths] [Products] [Growth strategy] [External environment]
Progress of IoT, AI and wearable products. ↓ Advances in semiconductor processing power Devices are becoming smaller and light weight (light, thin, mobile) Displays are becoming high-definition Production innovations in devices for cost reduction
Semi-conductor
related
FPD related
ArF resist
materials
Semiconductor peripheral materials
FPD resist
materials
Electronic materials Solvent
ArF resist polymer
[Customer] Semi-
conductor related
materials makers
[Customer] FPD resist
makers
FPD resist polymer
Relation with partner businesses with silicon
polymer design technology
Low metal solvents
Electronic materials
[Area]
Adhesion technology, and highly heat-resistant, low curing,
contracting organic and inorganic hybrid material (ESQ) structural
design technology
Acetylation technology function evaluation
technology
Solvent sales network
Metal management know-how
Highly sensitive photolytic macromolecule synthesis
technology, function evaluation technology
Post photo lithography
materials (WOW)
Next generation photo lithography materials (EUV)
With value chain makers (upstream, same stream, downstream) as a base, and by making full use of our mutual market research capability, technological development capability and production capacity, we can acquire business opportunities one after another in the drastically changing electronic material field. Based on the relationship of mutual trust we have built up with semiconductor related or FDP related customers through our simple honest efforts up to now (shaping up required functions one by one), we will provide new VALUE concentrating internal and external power.
Opto-electronic materials
Organic chemical synthesis (Precision synthesis,
Polymer structure control)
Surface control, molecular structure design
Low metal solvent manufacturing and
analysis/control technology
Organic chemical synthesis (Peracetic acid oxidization, Polymer structure control)
CMP slurry
Solvent additive (CELTOL)
New solvents specialized for
electronics
Silicon encapsulants
Joint investigations and collaborations with reliable
customers
Acquiring the de facto by the pioneering products
(collaborative research with universities)
Differentiation of functions for fine-pitch and multi-layer
Market pioneer by proposing unique solvents
for future market (printed electronics)
New value by metal guarantee
Globalization (quality, quantity, variety) Market penetration in the
semiconductor field
Full filling high resolution display materials
(OLED, 4K/8K)
Collaboration with high end LED makers
P.28
Issue Aim of improvement policy
Shorten the period of technical investigation
Promotion of a variety of ways of working
Promotion of diversity
Redesign responsibilities and authority
Optimization of work efficiency
Improve efficiency through better quality of information
sharing
◎ Use virtual laboratories Combine computational chemistry and dynamic stimulation
◎Prepare an appropriate environment for working at home
◎Promote active participation of staff that are female, senior and people of various nationalities
◎Autonomous decision making on the spot and speedy customer interaction
(From Mother plant design to regional independent and autonomous design)
◎Promote efficient work styles based on working hours analysis and utilize outsourcing
◎ Promotion of cultivation of selected global personnel, and employment of experienced people Collective hiring of mid-career employees to change company DNA
Strengthen the foundation of global management
◎Improve the level of information sharing through the use of IT technology and the arrangement of the office environment
Example of improvement policy
Enhance competitiveness
Realize a work-life balance
Change the way of tackling work, and establish and build systems
Main policy (3) Improve the environment to promote growth
P.29
Innovation Strategy
Department
Utilize open innovation and concurrent engineering in all the stages of investigation/planning, research and production (mass production), to realize innovative technological development and accelerate commercialization.
“Innovation Strategy Division" strongly promotes a combination of the three operational aspects of planning and marketing, R&D, and industrial technology and engineering, to help realize this.
< New Establishment of Innovation Park > = Aim to accelerate the creation of new businesses and strengthen existing businesses =
< Concurrent engineering > Accelerate new businesses creation through the use of virtual laboratories
< Open innovation (Collaboration) > Strengthen cooperation and collaboration with customers, universities and research
institutes through open laboratories
Catch up with demand
Speed up commercialization
Planning, marketing Reorganize BU suitable for markets (Integrate our strengths with other
technology for growth)
R&D Functional design Computational chemistry
Production technology Engineering
Process design Simulation technology
Main policy (3) Improve the environment to promote growth
P.30
< New Establishment of Innovation Park > Acceleration of open innovation and concurrent engineering
Remove hurdles between divisions ,
strengthen relations, promote concurrent
engineering
Clean room of open laboratories
▲
Multi-purpose hall with translation system
▲
▲ Realize Virtual Laboratory by using molecule/process simulation and flow/ structure analysis
▲Functional zoning (Picture:distillation equipment)
Work space that is barrier-free in order to encourage communication
▲
Through open innovation, (both internal and external) combine
knowledge,technology and know-how to develop
innovative solutions
Changing Work Styles to Improve Productivity
P.31
Become Foundation BU
Withdraw
Proactive investment and allocation of resources
Stabilization and optimization
Create New BU
Growth BU
Foundation BU
Reorganization BU
M&A strategy promotion
Change the way of tackling work, and establish and build systems
Change mindset Change actions and working environment
Basic Strategies For continuous growth… Priority allocation of resources to “Growth BU” Acceleration of creation and development of “Growth BU”
through open innovation
Optimize or withdraw Con
tinu
ous
grow
th
Overview of Mid-Term Plan “3D-III” Basic Ways of Thinking
P.33
766 721 745 926 957 1,045 895 897 950
809 765 715 807 890 818
762 820 1,080
1,370 1,336 1,402 1,540
1,695 1,611 1,569 1,600
1,860 529 532 660
801 836 959
1,112 1,215
1,000
64 66 63
64 59 66 62
68 110
’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’19
(Plan) (Plan)
Total 3,537
Total 3,419
Total 3,585
Total 4,138
Total 4,438
Total 4,499
Total 4,401
Total 4,600
Total 5,000
■ Cellulosic Derivatives ■ Organic Chemicals ■ Plastics ■ Pyrotechnics Devices ■ Others
Sales by Segment
(Unit: 100 million yen)
(Fiscal year)
P.34
△80 △86 △87 △90 △99 △111 △138 △140 △160
121 78 136 191 257 297
230 207 250 69 54
53 60
95 112
115 90
160 146
99 112
110
159 205
216 200
260
59
50 41
105
100
139 213 245
170
13
10 8
3
0
2 7 8
20
’10
’11
’12
’13
’14
’15
’16
’17
’19
Total 327
Total 204
Total 262
Total 379
Total 513
Total 643
Total 643
Total 610
Total 700
Operating Profit by Segment
■ Cellulosic Derivatives ■ Organic Chemicals ■ Plastics ■ Pyrotechnic Devices ■ Others ■ Companywide (Unit: 100 million yen)
(Fiscal year)
(Plan) (Plan)
P.35
Sales (Unit:100 million yen)
Operating profit (Unit:100 million yen)
Plan
FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2019Cellulosic Derivatives 766 721 745 926 957 1,045 895 897 950
Organic Chmicals 809 765 715 807 890 818 762 820 1,080Plastics 1,370 1,336 1,402 1,540 1,695 1,611 1,569 1,600 1,860
Pyrotechnic Devices 529 532 660 801 836 959 1,112 1,215 1,000Others 64 66 63 64 59 66 62 68 110
Total 3,537 3,419 3,585 4,138 4,438 4,499 4,401 4,600 5,000
FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2019Cellulosic Derivatives 121 78 136 191 257 297 230 207 250
Organic Chmicals 69 54 53 60 95 112 115 90 160Plastics 146 99 112 110 159 205 216 200 260
Pyrotechnic Devices 59 50 41 105 100 139 213 245 170Others 13 10 8 3 0 2 7 8 20
Companywide △80 △86 △87 △90 △99 △111 △138 △140 △160
Total 327 204 262 379 513 643 643 610 700
Sales and Operating Profit by Segment
P.36
9 30 59 71 149 135
83
450 500
550
26 45
38 38
63 58 92
34
65 109 101
23 43 51
21
37
55 37 62
151 126
9
10
11 9 9
16 43
’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19
Total 99
Total 187
Total 272
Total 256
Total 306
Total 403
Total 395
(Plan) (Plan) (Plan)
Capital Investment by Segment
(Unit:100 million yen)
(Fiscal year)
■ Cellulosic Derivatives ■ Organic Chemicals ■ Plastics ■ Pyrotechnics Devices ■Others
P.37
128 100 76 76 62 67 93
320 300 300 81
70 54 49
45 44 54
65 65
57 50 62 56 50
46
40
45 52 53 59
79
8
8
8 8 12 13
14
’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 (Plan) (Plan) (Plan)
Total 328 Total
283 Total 240
Total 237
Total 234
Total 239
Total 290
Depreciation Costs by Segment
(Unit:100 million yen)
(Fiscal year)
■ Cellulosic Derivatives ■ Organic Chemicals ■ Plastics ■ Pyrotechnics Devices ■Others
P.38
Shareholder Return
Basic Policies Dividend that reflects consolidated performance Internal reserves to establish a stronger revenue base Financial strategy that is conscious of an ROE of 10% or more
Profit sharing will be carried out by fully taking the above into consideration and finding a suitable balance.
Treasury stock acquisition will also be carried out flexibly to supplement dividends as shareholder return policy.
Dividend Payout Ratio Objective: 30% or more
P.40
Cellulosic Derivatives Competition from other raw materials of TAC film, used for polarizing plate
protection, is intensifying Sales competition of acetate tow is continuing
Demand for tobacco is dropping around the world and rise of electronic tobacco Excessive stock problem in China (will drag on to 2018)
Sense of expectation in the market regarding the functions of cellulose
[Cellulose acetate] Develop and propose new functions for the components of the next generation panels of new LCD and
OLED equipment Expansion and promotion of new application development (development of TAC film making technology and
materials for FO (Forward Osmosis) membranes) [Acetate tow] Acquire the highest level of trust among customers through quality, technical services and cost Expand market share by utilizing demonstration facilities and rapidly responding to customers needs [Development of new cellulose products and new applications] Discover new functions that utilize the characteristics of cellulose and create new demand Integrate the features of development and quality assurance Build technology through the integration of the different underlying technologies responsible for the
functional expressions, and apply to each issue.
Discard conventional concepts of product-based businesses and find new markets by concentrating on the origin of the business, discovering new functions that make the most of the special characteristics of cellulose.
Business Environment
Change Challenge Courage
P.41
[Acetyl products] Enhance cost competitiveness Promote collaborative set ups with domestic makers [Organic functional products] Focus on growth areas, like coatings and automobile paints Enhance technical services, by utilizing our polymerization and compound technology know-how Create new markets through alliances and the M&A of subsidiary makers [Electronic materials] Continuously provide the best solutions in the FPD, semiconductor and optoelectronics markets, through a product
mix of electric materials solvents, Printed Electronics solvents, resist materials and optical/light source materials Focus in particular on the increasingly sophisticated semiconductor market, and increase our presence in the
semiconductor industry [Cosmetics, health care] Increase our productive capacity of 1.3 BG, and differentiate with odorless products Expansion of new products through technical proposals and products that utilize our odorless know-how Provide a full line up of products, in accordance with the system for food with functional claims [R&D system] Approach new markets through a deep cultivation of both the technology and the business Construct technical services bases globally Enhance international competitiveness, by jointly improving quality and reducing costs, through process innovation
Change Challenge Courage
Organic Chemicals (Organic Chemicals) China's excessive production capacity has unbalanced the supply and demand situation in Asia,
in the acetyl market In the electronic materials field, there has been simultaneous progress in technological
innovation and market growth, and there is potential for upheaval in the industry's supply chain There has been strong growth in the global market for cosmetics, and the demand for new
materials is high In the health care field, a system for foods with functional claims has been introduced (Japan)
Business Environment
Global growth through high market share, rapid growth, and concentrated investment of management resources in high earning products
Creation of new business through bold collaborations with outside companies Use existing businesses as a base for pioneering entry into next generation, future markets
P.42
[Increase the number of solutions] Develop and promote sales of new Achiral columns Promote sales of high purity Chiral reagents Expansion of consumable goods (tools) for purification of nucleic acids, and the development and sales
promotion of products for biochromatography
[Global expansion, product expansion] Expansion of contract analysis services, and Labeled Standards business Expansion of chiral column and Chiral Stationary Phase business Expansion of Preparative separation services
[Positive investment in growth businesses] Construct new buildings in India Acquire bioseparation technology through M&A, etc.
[Change the organization] A matrix organizational structure with different functions and different areas
Change Challenge Courage
Organic Chemicals (Chiral Separation)
Business Environment
Growth of the pharmaceutical industry in China and India Local needs are becoming an issue (China, India) The biopharmaceutical (macromolecule pharmaceutical) product market is expanding
around the world
Move into the macromolecule drug development business Global expansion of the low molecular drug development business, and product
expansion
P.43
Creation of high performance resin products to reduce automobiles weight, and for the computerization of self-driving vehicles
Strengthening of environmental regulations for manufacturing Rise of emerging nation makers in the electronics market Trend towards compound operations of resin makers Increase in need for extension of food "best before" dates from the point of view of reducing
food waste
Plastics
Engineering plastics: Establish a global system that fits the characteristics of the regions Resin compounds: Specialize in high-performance product businesses Plastics processing: Establish a solutions business model
Business Environment
Change Challenge Courage
[Engineering plastics] Construct infrastructure to deal with European and American business models (deal with the supply chain
and sales of non-Japanese companies) Invest in products that meet the demands of the generalized market Expand COC business [Resin compounds] Design support for customers of high-strength, high rigidity plastics (long fiber-reinforced plastics) needed
as metal substitutes Refine conductive materials and materials for electromagnetic wave shielding, which are our area of
specialty, and pursue high-grade exteriors (scratch resistant, etc.) Enhance technical services that support high-performance route shifts, and develop applications of metal
adhesive technology [Plastics processing] Expand the business through a combination of coating technology and functional expressions of our
molecular design and original raw materials Early stage cultivation of the optical components business through the development of ultra-small, ultra-
thin, and laminating technology for the sensing market which has a promising future Create markets through proposed types of businesses based on barrier abilities and new designs
P.44
[Motor vehicle safety device business] Change in the need for safety parts due to technological innovation, self-driving technology and
the increase of EV automobiles Market expansion of airbags due to the introduction and revision of regulations in emerging
nations, centered around China and India. Upheaval in the power balance of the industry that started with the inflator recall problem Awareness of safety and security is increasing, which also includes pedestrian protection [Aerospace and Defense business] A continuation of policies to strengthen island defense and missile defense equipment
Pyrotechnic Devices
Acquire reputation of being No.1 for quality Meet customer needs by rapidly developing and placing on the market competitive products Increase our ability to deal with the global market by strengthening our global business system Create new business based on pyrotechnics
Business Environment
Change Challenge Courage
[Motor vehicle safety device business] Continuation and deepening of safety and quality through the introduction of image analysis systems (step-up from
lot guarantees to individual guarantees) Product development that matches customer needs through the strengthening of collaborations with OEM and
module makers Improve our ability to deal with customer needs by establishing technical centers in America, Europe and Asia, and
the consolidation of our business structure, including India Reform product development and change work processes through the establishment of Innovation Center Harima
[Aerospace and Defense business] Establish four bases in Japan, America, China and Thailand for gas generating agents for inflators, and develop new
manufacturing processes Improve earnings by focusing on our area of specialty in the defense equipment market
[New business] Commercialization of new pyrotechnic devices of core automobile applications
Notes regarding Forward-Looking Statements
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