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Sales by Segment Commodity Chemicals In Commodity Chemicals, sales volumes of caustic soda, inorganic chlorides and industrial gasses were weak due to sluggish overall demand. High-purity products experienced weak domestic demand that caused sales to remain unchanged from the previous fiscal year, despite brisk exports centered on semiconductor applications. In spite of sluggish demand at the beginning of the year, sales of sulfuric acid were on par with the previous fiscal year due to an overall recovery throughout fiscal 2013. As a result, sales in this segment decreased 3.8% year on year to \45,627 million. Segment income fell 23.5% to \3,374 million due to the decreases in caustic soda and inorganic chloride sales volumes as well as deteriorating earnings caused by higher fuel and raw material prices, beginning with electricity. Acrylic Products Sales of acrylic acid, acrylic esters and acrylic polymers remained firm thanks to an increase in sales volumes fueled by domestic buyers. Sales of polymer flocculants and UV-curable resins were weak as a result of lower sales volumes caused by stagnant overall demand. As a result, sales in this segment increased 8.7% year on year to \59,069 million. Segment income rose 8.8% to \6,274 million owing to higher sales volumes of acrylic esters and acrylic polymers along with improved earnings that reflected efforts to revise product prices. Overview of Fiscal 2013 During the reporting term (January 1 to December 31, 2013), the Japanese economy experienced a gradual domestic-led recovery. Along with a rise in public investment, this was attributable to improved consumer confidence that reflected the weak yen and high stock prices resulting from the Abe government’s economic policies. On the other hand, despite indications of improving performance for certain exporting companies accompanying the weak yen and the rebounding U.S. economy, overseas demand remained uncertain because of a definite slowdown of growth in emerging countries. The business environment surrounding the Toagosei Group remained unpredictable. This is due to an overall increase in fuel and raw material prices caused by the weak yen and high crude oil prices as well as disparities among business segments regarding the extent of recovery in demand and progress made in price revisions. Under these circumstances, the Group is working to secure profits by thoroughly reducing costs and implementing detailed sales policies that address the business conditions surrounding each product. As a result, net sales in the reporting term increased 1.9% year on year on a consolidated basis to \151,081 million ($1,433 million), operating income decreased 0.6% to \14,501 million ($137 million), and net income declined 1.0% to \9,605 million ($91 million). Management’s Discussion & Analysis 0 50,000 100,000 150,000 200,000 (Millions of yen) 09 10 11 12 13 0 5,000 10,000 15,000 20,000 25,000 (Millions of yen) 09 10 11 12 13 Net sales Operating income 0 5,000 10,000 15,000 (Millions of yen) 09 10 11 12 13 Net income 28 Annual Report 2013