Message to Investors

Dear Shareholders,

On behalf of the Soken Group, I would like to extend my sincere gratitude for your continued patronage and support.

In the fiscal year ending March 31, 2024, the economy continued to show a gradual recovery trend as economic activities normalized following the easing of mobility restrictions in the wake of the COVID-19 pandemic. However, uncertainties remained due to the prolonged situation in Ukraine, worsening conditions in the Middle East, rising prices due to soaring resource and energy costs, and concerns about an economic slowdown due to prolonged financial tightening in major countries.
Under these circumstances, the Soken Group has endeavored to expand its stable earnings base and improve profitability by strengthening and streamlining its production and supply systems to meet growing demand related to liquid crystal displays (LCDs), which are increasingly shifting to China, and by focusing on capturing new needs in growth areas such as automobiles and information and electronic devices. Additionally, we have worked on transitioning to a business structure resilient to environmental changes by developing biomass materials and products as well as innovative production processes and by strengthening our mechanisms for new business development and promotion.
Despite continued sluggish demand in the information technology and electronics sector, which includes smartphones, sales of pressure-sensitive adhesives grew as demand recovered for LCDs, resulting in higher sales than the previous year. We also saw an improvement in profit performance due to increased adhesive production, cost reductions, and price adjustments, leading to all profit figures significantly exceeding those of the previous year.

A moderate economic recovery trend is expected to continue in the business environment for the fiscal year ending March 31, 2025. However, uncertainties remain due to the impact of rising prices and monetary tightening worldwide and the growing geopolitical risks from the prolonged tensions in Ukraine and the Middle East.
The Soken Group will strive to expand its market share by capturing the demand for LCD-related products, which is increasingly concentrated in China, to strengthen profitability and by developing new applications and acquiring customers in expected growth sectors such as automotive and information electronics. Additionally, we will promote business structure reforms by building the technological foundation needed to produce next-generation products, including non-acrylic products, biomass materials and related products, and high-performance films. To this end, we are also exploring new opportunities overseas and pursuing new business development.
In terms of business performance, we also expect an increase in costs, including raw materials, logistics, and personnel, as well as expenses to cover research and development and new business expansion. At the same time, we aim to expand sales and improve profitability, particularly in chemicals, including pressure-sensitive adhesives, to increase both sales and profit.

Once again, we would like to thank our shareholders and investors for their continued understanding and support as we move forward.