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2013 Review . Third Year Achievements of Medium-term Management Plan The Toagosei Group’s commodity chemicals business comprises chlor-alkali and sulfuric acid products, high-purity products, and industrial gases. Under the current medium-term management plan, we have set ourselves the target of aggressively developing and expanding the high-purity products business as a profit generator, while ensuring stable performance in the other more mature, established businesses of chlor-alkali and sulfuric acid products and industrial gases. In 2013, sales and profits in the commodity chemicals business were both below initial targets due to weak demand for general-purpose products, and high fuel and raw material prices. Despite ongoing sluggishness in internal demand in the key electronics materials field.including semiconductors and LCDs.sales and profits for high-purity products remained nearly on target thanks to an upswing in exports. We are steadily implementing initiatives to strengthen strategic businesses, primarily high-purity products, and expect them to bear fruit going forward. New Medium-Term Management Plan Initiatives in 2014 (Issues to Be Addressed) Tsurumi Soda Co., Ltd. was integrated with Toagosei in January 2013 and was repositioned as the Yokohama Plant. This deepened the level of integration in the chlor-alkali business, which is a core business in commodity chemicals. The next moves will be to fully integrate production, sales and technology, as well as optimize production activities at the three plants in Nagoya, Yokohama and Tokushima and realize efficient operations and sales. Our goal is to strengthen the position of the chlor-alkali business in the industry and increase earnings. In the chlor-alkali business, we will invest in the business to strengthen its production base in order to achieve stable business profit. In particular, a gas-diffusion electrode method was introduced at the Tokushima Plant last year to reduce electricity costs. This is expected to enable significant cuts in electricity use. Looking ahead, we plan to gradually introduce this method to the Yokohama and Nagoya plants. In the high-purity products business, we aim to further boost earnings. To this end, we will continue making strategic investments in high-purity liquefied hydrogen chloride to address rising demand from the semiconductor sector, mainly in East Asia; improve productivity; and establish a streamlined production, filling and shipping system. In high-purity agents, we will focus on promoting further increases in product purity and differentiation in existing businesses while enhancing the potential of sulfuric acid, caustic potash and other high-purity products. In the industrial gases business, we plan to become the most profitable industrial gas supplier in the Chubu (Nagoya) region by building a more efficient business model and stepping up marketing. We are also looking into upgrading that will enable us to build the state-of-the-art industrial gas facilities. 2011 2012 2013 48,112 Sales 47,435 45,627 (Millions of yen) 2011 2012 2013 4,485 Segment income 4,413 3,374 (Millions of yen) Toagosei Co., Ltd. 12