Caustic soda is used in papermaking 0 10,000 20,000 30,000 40,000 50,000 Net sales (Millions of yen) Operating income (Millions of yen) 09 10 0 4,000 2,000 6,000 8,000 09 10 0 0 15,000 30,000 45,000 60,000 2,500 5,000 7,500 10,000 06 07 08 09 10 11 (est.) Net sales (left scale) Operating income (right scale) 46,870 46,870 6,665 6,665 53,009 6,796 Commodity Chemicals Goals for the New Medium-term Management Plan (2011.2013) Securing stable sales and profit at our three business bases (Tsurumi, Nagoya and Tokushima) The Toagosei Group’s commodity chemicals business comprises chlor-alkali and sulfuric acid products, high-purity, highly-functional products, and industrial gases. Under the new medium-term management plan, we have set ourselves the target of aggressively developing and expanding the high-purity, highly-functional products business as a new profit generator, while ensuring stable performance in the other more mature, established businesses, chlor-alkali and sulfuric acid products and industrial gases. Promoting high-purity, highly-functional products The main target for commodity chemicals in the new mediumterm management plan is aggressive expansion of the highpurity, highly-functional product business. To this end, we are further integrating management of this business with Tsurumi Soda Co., Ltd. Tsurumi Soda has long operated one part of the Toagosei Group’s commodity chemicals business, and has played a central role in promotion of high-purity, highly-functional products in particular. In April 2011, it will be upgraded into one of the Toagosei Group’s production companies, and its management, R&D and marketing departments will be centralized and operated under the Toagosei Group’s commodity chemicals business. In addition to strengthening the fundamentals of the chlor-alkali business, this move will spur more rapid development of new products and demand, by enabling collaboration among R&D departments within the Toagosei Group in the high-purity, highly-functional product business. We aim to create a high-profit platform by aggressively building our high-purity, highly-functional products business into a future pillar of the commodity chemicals business of the Toagosei Group. Specific measures include quality advances in high-purity anhydrous hydrogen chloride for semiconductor manufacturing, and management efficiency gains at the Tsurumi and Tokushima plants. Further impetus will come from accelerated development of high-purity, highly-functional agents for electronics materials, and the marketing of new high-purity products such as electrolyte grade sulfuric acids. Overview by Business Segment Shinichi Sugiura Executive Officer General Manager Commodity Chemicals Department 6 Annual Report 2010