Interview with the President Market environment in 2012 and business performance Conditions were difficult for the Japanese economy during 2012. Export demand slumped as a result of the ongoing stagnation of the European economies as well as an economic slowdown in Asian countries, notably China. Meanwhile, the demandstimulation effect of recovery programs in the wake of the March 2011 Tohoku earthquake and tsunami lacked sufficient vigor to kick-start the economy, the yen remained strong on the foreign exchange markets, and electric utility rates rose. Amid this environment, we at the Toagosei Group worked to expand sales of high value added products and develop new markets for them, and we also took strict steps to reduce costs and effect product price raises to correspond with higher prices of fuel and raw materials. Despite our efforts, however, the Group’s earnings continued to be impacted by the weakness of both domestic and overseas markets resulting from a deterioration in the balance of supply and demand. President Futoshi Hashimoto 6 Annual Report 2012