Nippon Kayaku Group Integrated Report 2025 Online

In June 2025, I was appointed as the President and Representative Director of Nippon Kayaku Co., Ltd. First, I want to express my sincere gratitude to everyone for always giving us your strong support and kindness.
　I was approached by former-President Wakumoto about the appointment as President at the start of 2025. It was something I did not expect, and I was so surprised that I was at a loss for words for a while. However, as I listened to his words while reflecting on my career at the company so far, I began to feel that this was a unique opportunity that allows me to contribute to the future of Nippon Kayaku more than before. I saw this challenge as fate and resolved to take it on with my heart and soul.
　I joined the company in 1987 as a fresh graduate. Back then, the term “medical representative (MR)” was not yet in wide use. I was assigned to work as a pharmaceutical sales representative, and the term “proper” was used instead. My first workplace was in Osaka. While visiting hospitals and clinics to get them to adopt our products, I learned that I must first understand the feelings of the doctors, and to do so, it is most important to communicate closely and build trust. This experience is the starting point of my career, and today, it still serves as the foundation of my belief that, to get customers to use our products, we must begin by gaining their trust.
　After working in pharmaceutical sales in Osaka, Tokyo, and Mie for a total of 19 years, I transferred to the Safety Systems Business, which handles automotive safety components. There, I took on the challenge of raw material procurement, a totally different area. I felt like I had switched to a completely different company, but I undertook this challenge with a positive mindset of doing my best in the environment I have been given. In time, I came to find this area interesting. And over the more than 19 years since, I have been blessed with many valuable opportunities, including turning the business profitable, achieving significant sales growth, establishing global bases, and gaining experience as the general manager of a group company in China. Even during such times, the importance of building relationships of trust—a mindset developed during my time in pharmaceutical sales—always remained as the core of my actions and was essential in the smooth execution of business activities.

　In 2023, the Mobility & Imaging Business Unit—which integrates the Safety Systems Business and the Polatechno Business for polarizers—was created due to business reorganization. As the officer-in-charge, I did my best to fuse and grow the two businesses. However, in the process, I was faced with a heavy decision, both for the organization and personally, of having to solicit people willing to retire early as we worked on streamlining the Polatechno Business. As a member of management, it was extremely painful and involved a deep internal conflict to ask such a choice of people who had supported the company for many years. Looking to the future, anticipating changes, and depicting a path to sustainable growth leads to happiness for every employee. This experience made me keenly feel again the weight of responsibility as someone in management, and I renewed my determination to further practice management that has foresight and allows speedy decisions and actions going forward.

Nippon Kayaku Group entered the final year of the Medium-term Business Plan KAYAKU Vision 2025 (KV25) in FY2025. During the period of KV25, net sales trended strongly, setting record highs each year. As a result, we expect net sales to reach 234.6 billion yen in FY2025, an increase of 12 billion yen from FY2024 and 4.6 billion yen above the initial plan.
　Meanwhile, operating income is expected to be 20 billion yen, a decrease of 0.4 billion yen from FY2024 and 6.5 billion yen below the initial plan. This is largely due to the impact of the external environment, including soaring raw material prices, rising labor costs, and fluctuating exchange rates.
　However, we have stated “strengthen earning power” that is not affected by such external factors as our biggest issue for the period of KV25. Although we sought to respond flexibly to environmental changes, operating income in the final fiscal year is lower than the plan and I feel there is room for improvement. In particular, due to delays in decision-making, an overly cautious attitude toward risks, inadequate organization of information, and other such factors, we fell behind in taking action. This is honestly a point for reflection. Going forward, we need to transform into a corporate structure that can quickly and accurately respond to changes in the business environment.
　While the characteristics of future issues differ for each segment, they all require the ability to respond to change. The Mobility & Imaging Business Unit needs to flexibly and quickly respond to rapid changes in the Chinese market. Amid intensifying competition in semiconductorrelated products, it is necessary for the Fine Chemicals Business Unit to use our technological capabilities and expand the scope of materials that can be proposed. It is important for the Life Science Business Unit to consolidate the areas that we are good in, such as generic anti-cancer drugs and biosimilars, and further accelerate the shift to an earning structure using new drugs.

Business and Results Overview

　Companies have their own uniqueness. The uniqueness of Nippon Kayaku is our sincerity and seriousness. This is the wellspring of the trust we have earned from our customers over the years, and it is also our pride. However, with the business environment changing even more rapidly due to technological innovation, geopolitical risks, and changes in the market itself, seriousness alone is no longer enough to win the competition. We must constantly keep in mind to add a sense of speed and flexibility to the uniqueness of Nippon Kayaku. This is the most important issue that has to be carried over from KV25 into the next Medium-term Business Plan.

Nippon Kayaku has created new products by evolving core technologies according to the needs of the times and sometimes combining them with external technologies. To continue having our products, technologies, and services adopted by a wide range of markets, both domestic and overseas, and to further increase awareness of the Nippon Kayaku brand, it is essential to keep creating and nurturing new developmental themes with dreams, those that make our stakeholders excited.
　Under KV25, we focused on the Creation of New Business and Products to strengthen earning power. And now, in the final year of the plan, we are steadily creating new themes that hold significant potential.
　For example, the Safety Systems Business has embarked on the development theme of space pyrotechnics. We seek to help reduce the weight of fuel and improve payload efficiency by applying our pyrotechnic technology—nurtured through automotive safety components—in rocket propulsion systems. Applying our expertise in automotive safety components to space development and significantly increasing added value—this is truly a great example of fully drawing out the potential of technology. This theme started when a researcher casually thought that our technology may be useful for space development. At first, I felt somewhat skeptical about his idea, but as a result of being positive, believing in the potential and backing him, development progressed smoothly based on a system of cooperation with external parties, and our product was adopted for a rocket that is scheduled to be launched.
　Besides this, the business units also came up with new themes, one after another, during the period of KV25. The Pharmaceuticals Business is working toward achieving Japan’s first large-scale production of biopharmaceuticals. The Fine Chemicals Business Unit has launched several development projects in the environment and energy areas, including the development of catalysts for hydrogen production.

　The Nippon Kayaku Group will continue to put in all efforts to adhere to our stance as a research and development company, where employees come up with ideas for solving social issues and the company actively invests in themes with potential.

The issues I have mentioned—about the Nippon Kayaku Group becoming a company with a sense of speed and flexibility and generating many new themes with hidden potential—cannot be achieved by simply recognizing them. Eventually, it is the power of our people that allows us to confront these management issues head on. I have always cherished and upheld the belief that a company is made up of its people. Even if we have excellent strategies and innovative technologies, it is our people that apply them, and it is the abilities of our people that allow us to overcome issues.
　In particular, the presence of leaders who draw out the organization’s strengths is critical. Leaders at all levels within the company—from the President and executives to general managers, section managers, and the leaders on the ground—need to take ownership over the organization’s work, making decisions and acting with responsibility. Leaders do not simply give instructions; they take the lead in working together. When Toyota Motor Corporation’s Chairman Akio Toyoda was President, he said that bosses say “Do it” but leaders say “Let’s do it.”* I deeply empathize with his words. Besides deciding on the allocation of roles among subordinates, I think a true leader leads by example and builds relationships of trust while guiding the team toward results. An organization where the leaders at the various levels can say “Let’s do it” will be able to decisively overcome even difficult management issues.
　To achieve such an organization, better in-house education and appropriate personnel assignment will be even more important than before. One of our current education systems is the Nippon Kayaku Business Academy (NBA), where the management has opportunities to directly speak to the next generation of managerial candidates. Through the NBA, I convey the attitude of a leader, the ways to take responsibility, as well as the importance of increasing knowledge and awareness through reading and learning from one’s seniors and constantly striving to improve oneself as a leader.

　Today, with the attention on utilization of human capital, we will first focus on our leaders and develop many excellent leaders. I hope this can lead to the Group’s sustainable growth, including steadily solving management issues, enhancing the company’s overall decision-making speed and execution, growing our business, and promoting management with high capital efficiency.