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Medium-Term major strategyGrowth strategy / R&B strategy / Global strategy / M&A strategy

8


238.9 255.9 267.0 274.5

149.4 156.7

170.0 218.5

45.9 47.4

52.0

80.0 160.9

159.0 160.0

176.0

0.0

100 .0

200 .0

300 .0

400 .0

500 .0

600 .0

700 .0

800 .0

売上高売上高売上高売上高

27.1 26.0 26.5 28.0

13.7 15.1 19.0

28.0 9.8 10.6

11.0

17.0

6.5 5.9

6.5

10.0

0.0

10. 0

20. 0

30. 0

40. 0

50. 0

60. 0

70. 0

80. 0

90. 0

営業利益営業利益営業利益営業利益

Growth strategy（Performance Targets by Solutions Unit）

9※ Increase in sales and income from M & A is not included in this numerical plan.

2017（result） 2018（result） 2019（ forecast ） 2021（plan）

Growth-driving business

• Foods

• Supplement

• Agriculture

• Health Care

• Electronics

• Residential

• Performance

fibers

• Performance

polymers

• Specialty

polymers

（JPY Billion）

596.1621.0

650.0

750.0

36.9 36.040.0

60.0

Material Quality of Life

Health Care Nutrition

●The creation of new social value and transformation of business models based on technological innovation will present major business opportunities.

●The global economy is expected to decelerate due to trade friction between the U.S. and China and geopolitical risk. Against this backdrop, Kaneka has drawn up its new Medium-term Management Plan.

Net Sales

Net Sales

Net Sales

Net Sales

Operatingincome

Operatingincome

Operatingincome

Operatingincome


Growth strategy（Transformation of Business Portfolio）

255.9(41%)

156.7(25%)

47.4(8%)

159.0(26%)

274.5(37%)

218.5(29%)

80.0

(11%)

176.0(23%)

Net Sales

¥621.0 billionFY2018

Net Sales

¥750.0 billionFY2021

Material

Quality of Life

Health Care

Nutrition

Growth-driving businesses

• Foods

• Supplement

• Agriculture

• Health Care

• Electronics

• Residential

• Performance

fibers

• Performance

polymers

• Specialty

polymers

10

● Aggressively expand business of all four Solutions Units (SU)● High-functionality products to drive growth in each SU⇒ Aim for major growth in sales of E & I, Pharma, Medical, and Supplement

● Focus on expanding Health Care and Quality of Life


Growth strategy（Create added value）

Create added value

Source-in/

Source-out

M＆A

Global

systemOpen

innovation

Leading-edge businessesE & I Technology, Pharma, Medical Devices, Supplemental Nutrition, Agris, PV & Energy management

Multiple business

FY 2018 FY 2021

NetSales

103.0 225.0

Ratio 17% 30%

Foundation businessesVinyls and Chlor-Alkali, Performance Polymers, Foam & Residential Techs, Performance Fibers, Foods

Strengthen Only One, Global No.1

FY 2018 FY 2021

NetSales

516.8 490.0

Ratio 83% 65%

New large-scale businesses

Organic EL Lighting, Biopolymers,

Opto-Electrochemicals,

Regenerative medicine and cell therapy, etc

Driving-force ofbusiness transformation

FY 2018 FY 2021

NetSales

1.2 35.0

Ratio 0% 5%

Diverse businesses, diverse technologies, “only-one” products, possession of world-leading technologies and products (Strengths)

11

（JPY Billion）


Growth strategy（Transformation of Business Portfolio）

17%

83%

26%

74%

35%

65%

50%50%

Net Sales Operating income

FY2018

FY2021

FY2018

FY2021

Leading Edge+ New large-scale

Foundation（Core）

Leading Edge+ New large-scale

Foundation（Core）

12

● Leading-edge businesses’ net sales composition ratio to expand from 17→30%operating income composition ratio from 26→50%

● Leading-edge businesses + New large-scale businesses to make up 35% of total net sales⇒ Driving-force of growth

Leading-edge businesses… E&I, PV, Medical, Pharma, SupplementFoundation businesses (Cash Cow)… V&C, PP, F&R, PF, F&ANew large-scale businesses… Biodegradable polymers, Organic EL Lighting, Opto-Electrochemicals


R&B strategy

Transition to an R&B structure in order to strengthen capabilities through a shift from R&D to commercialization

Kaneka’s R&D activities will pursue value from the perspectives of markets and customers

by proactively harnessing leading-edge technologies.

R&D will be redefined as R&B (Research & Business). The purpose of research will be to conduct activities

to solve social issues at the earliest opportunity possible.

13

As a “Trial & Error experiment driven company,” Kaneka will enable researchers with curiosity and open-minded thinking to build an innovative research culture (platform).

・Global research network

・Social implementation of Solution Open Business Innovation

Three to identify promising

mpactful

nnovative

mplementable

II

II

〈leading-edge technology〉

〈R&D to R&B〉〈Clustering technology〉


R&B strategy （Investment and Return）

28.5 28.0 29.0

32.0

37.0

5.2%4.7% 4.7% 4.9% 4.9%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0.0

10.0

20.0

30.0

40.0

2016

（result）

2017

（result）

2018

（result）

2019

（forecast）

2021

（plan）

123.3

138.6

155.0

200.0

270.0

23%23%

25%

31%

36%

10%

15%

20%

25%

30%

35%

40%

80.0

140.0

200.0

260.0

320.0

2016

（result）

2017

（result）

2018

（result）

2019

（forecast）

2021

（plan）

R&ＢExpenses New Product Sales（JPY Billion）

14

●Aggressively incorporate advanced technologies while strengthening allocation of resources in the life science and electronics fields in pursuit of themes with speed and scale.

●Realize high growth in new product sales.


Three regional headquarters

⇒De-centralizeour corporate functions

Global strategy

●Speedily advance regional growth strategies from a “Glocal” (global and local) perspective

●Create new businesses centered on the life sciences and electronics fields and promote open innovation through M&A and other means

●A Global Big Niche Company that achieves borderless business expansion

Americas

• Create and expand new businesses in the Health Care field, Nutrition field(Lactic-acid bacteria), and the aerospace field

• Aggressively conduct M&As and open innovations• Strategically utilize the Kaneka US Innovation

Center• Further strengthen production and sales

foundations in existing businesses

Europe• Expand production capacity in growth fields and

conduct M&As （Health Care, Material, QoL）• Actively expand solutions business into new

businesses and fields

Asia

• Maximize returns on large-scale capital expenditure

• Aggressively expand sales in China, ASEAN, and India markets

• Expand business in the Health care and E&I fields

15

115.7 135.9 170.8

48.8 60.8

87.3 59.3

59.3

69.8

26.0 24.5

28.0

63.3%

66.2%

75.3%

40. 0%

45. 0%

50. 0%

55. 0%

60. 0%

65. 0%

70. 0%

75. 0%

80. 0%

0.0

100 .0

200 .0

300 .0

400 .0

500 .0

600 .0

700 .0

2018

（result）

2019

（forecast）

2021

（plan）

ASIA

Americas

Europe

Other areas

overseas sales/ratio(except for domestic business such as Foods)

（JPY Billion）

Overseas sales/ratio


Investment plan

2016-2018 (result) 2019-2021 (plan)

Capital expenditure 123 200

［ M a j o r p l a n n e d p r o j e c t s ］

Europe

Health Care

Expand biopharmaceuticals capacity

Expand bead-method polyolefin foam capacity

Asia

Material

Expand modified silicone polymers capacity

Quality of Life

Expand PI and GS capacity

Build additional optical film facilities

Molded bead-method polyolefin foam product factory

Expand performance fibers capacity

Health Care

Build additional blood purification system facilities

Expand medical device capacity

Expand API capacity (Japan)

Nutrition

Expand margarine-filling capacity (Indonesia)

Construct new dairy product plant

Americas

Material

Aerospace field/Composite production facility

New epoxy masterbatch facility

Nutrition

Healthy foods field/Supplement production facility

To be decided

Material

Mass-production facility for biopolymers

Others

Digital transformation investment

Plan aggressive forward-moving investments such as acquisition of new business commercialization facilities, in addition to bolstering capacity.

(JPY billion)

16


Portfolio of investment plan (Capital investment)

（ Existing ）（ Familiar ）（ New ）

（New

）

（Familiar

）

（Existing

）

Technology

Material

Quality of Life

Healthcare

Nutrition

17

～￥1 billion

Over ￥5 billion

￥1～ 2 billion

￥2 ～5 billion

• Emphasize peripheral technologies and peripheral markets in Material and Quality of Life.• As an additional priority, allocate resources to expand the production base and strengthen the

competitiveness of existing businesses.

Market


M&A strategy（Open innovation）

FY2018execution project

New Medium-Term

Management Plan

ＦＦＲ Wire Investing a company focusing on lactic and bacterial（introduction of technology）

• Agressively conduct M&As aiming to acquire advanced technologies, primarily overseas

• Based on the West Coast of U.S.

• Focusing on Health Care SU, Nutrition SU, Performance Polymers SV

We have M&A candidates and narrow down those candidates. Because we are in stage of consultation with partners target companies, We have not factored in any increases in sales or earnings from M&As into the new Medium-Term Management Plan.

18


Portfolio of investment plan（M&A）

（ Existing ）（ Familiar ）（ New ）

（New

）

（Familiar

）

（Existing

）

Technology

Material

Quality of Life

Healthcare

Nutrition

19

￥3 billion

￥5 billion

￥10 billion

￥15 billion

• Intensively implement M&As in peripheral technologies and markets in peripheral to new areas in Health Care and Nutrition

• Consider a major M&A deal in Medical Devices

Market

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