Investor Relations

Functional Chemicals Business

Masatomi Akezuma Member of the Board Managing Director
Head of Functional Chemicals Group

Business Vision

We contribute to the creation of an “Super Smart Society” and the realization of the SDGs by applying our core resin, colorant, catalyst and optical processing technologies to provide functional chemicals that offer special characteristics for the fields of information and communications, digital printing, energy and resource conservation, and sensing.

Mid-term Business Strategy

We will continue to grow by providing functional chemicals that offer special characteristics via developing and integrating unique materials, and by combining the forces of Group companies.

Business Profile

The functional chemicals business is composed of four segments, functional materials, color materials, catalysts and Polatechno. The Nippon Kayaku Group products that apply our resin, colorant, catalyst and optical processing technologies are widely used in various ways focusing on the field of "information and communication like more sophisticated 5G, digital printing, energy and resource conservation, and sensing." We are aiming to contribute to the creation of a "Super Smart Society" and the realization of the SDGs by providing functional chemicals that offer special characteristics to customers' needs with strong R&D applied the accelerating changes in the market.

Functional Chemicals Business

Mid- and Long-term Outlook for the Business

The Functional Chemicals Group added the “Polatechno Division” thus starting a four-business unit system on October 1. This was done with the goal of contributing to the realization of an “Super Smart Society” and meeting the SGDs while continuing to provide distinctive products using resins, color materials, catalysts, and optical processing as core technologies. We have set targets of 96 billion yen in our business group sales as part of our “Vision” for 2025, which we will move toward by having each business unit undertake the initiatives set forth in the Key Themes and Roadmap step-by-step. The spread of the novel coronavirus starting at the beginning of the year has resulted in a stagnant global economy and a continued drop in demand, which has put us in an extremely challenging business environment. However, to achieve growth amidst the post-COVID-19 “new lifestyle,” we will introduce new and differentiated products into the market, such as high-performance resins for 5G applications, ink-jet inks for food packaging materials, functional colorants for use in vehicles and sensors, high-performance petrochemical catalysts that contribute to CO2 reduction, and high-quality X-ray materials. Beyond developing our own technology, we will also pursue possibilities for business partnerships and M&A with companies both in Japan and abroad, integrating marketing, research activities, manufacturing, and sales with the aim of realizing our “Vision” as a business group.

Initiatives under Mid-term Business Plan “KAYAKU Next Stage

In the fiscal year ending March 2021—the middle year of “KAYAKU Next Stage”—we will launch our LCD and semiconductor cleaner business with the aim of expanding our presence in the field of semiconductors, an area which continues to enjoy steady growth. In addition, Polatechno, which last year was made a wholly-owned subsidiary and which we continue to operate integrally with this business unit, will provide high-function optical components such as polarizing films, X-ray materials, and more that can contribute to a diverse mobility-based society and a safe and secure lifestyle. We will furthermore strengthen our global development of new resin maleimides for 5G devices to support the digital revolution, epoxy resins for CFRP used in aircraft, colorants for inkjet printers in industrial applications and new developers for thermal paper, and MMA manufacturing catalyst businesses. In “KAYAKU Next Stage”, we will promote these businesses aggressively, with all business divisions and group companies working together. The speed of new product launches must be accelerated in order to meet these goals, and thus both business divisions and R&D laboratories are working hard to achieve 5-year new product ratio of 20%.

Key Themes in Mid-term Business Plan

Theme Details of initiatives
Establishing safety and quality management systems Building integrated QMS operations (PLC, KCW, WAC, KAM)
Strengthening research and development Advance R&D and improve training systems
Creating and providing intellectual added value Optimize domestic and overseas production systems
Pursuing global management Promote global marketing activities
Strengthening the business through internal and external partnerships Avoid “going it alone”; collaborate with other companies and promote joint development with industry/academia
Building a strong business base capable of supporting growth Enhance corporate governance structure at Group companies
Improve capital efficiency (inventory reduction, short-term collection of accounts receivable)

PLC: POLATECHNO CO., LTD. KCW: KAYAKU CHEMICAL (WUXI) CO., LTD. WAC: Wuxi Advanced Kayaku Chemical Co., Ltd. KAM: Kayaku Advanced Materials, Inc.

Topics

The four sub-segments, namely functional materials business, color materials business, catalyst business and Polatechno Group each develop and release products with special characteristics toward achieving our business vision.

Launch of 5G compatible maleimide resins

We have developed maleimide resins as a new circuit board material for base stations of mobile terminals to adapt to the 5th generation mobile telecommunication system (5G), and have been collecting feedback from multiple customers. Our maleimide resins are praised for their high heat resistance and low dielectric property, and are expected to expand their application in 5G-compatible circuit boards for smartphone and in-vehicle use. We will utilize the expertise and sales network developed with our epoxy resins to actively meet the growing demand.

Acquisition of LCD and semiconductor cleaner business

In April 2020, we took over the semiconductor and liquid crystal display (LCD) cleaner business of German company Henkel AG & Co. KGaA. As a semiconductor/LCD material manufacturer with the world’s top share in epoxy resins for environment-friendly semiconductor encapsulants, we are also developing businesses including MEMS resist, LCD sealants, and solder resist acrylates. As cleaners are required in semiconductor and LCD substrate cleaning and development processes in circuit formation, we aim to expand our business scope by incorporating this segment into the functional chemicals business for a high synergistic effect.

Strengthening collaboration with Polatechno Co., Ltd.

In October 2020, we undertook an absorption-type split of the manufacturing and sales business of parts for liquid crystal display and liquid crystal projector handled by Polatechno Co., Ltd. for our optic film business, and incorporated the business directly into our business scope. Going forward, we will strive to make more effective use and optimal allocation of management resources, including the human resources, sales channels, manufacturing bases, and intellectual properties of both companies, accelerate the efficiency of research and development through a consolidated R&D system, and strengthen governance in order to achieve continued growth of the functional chemicals business.

Display using the new achromatic polarizer (left) Capable of displaying natural, grey background
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