Mitsubishi Chemical : Formulation of New Medium-Term Management Plan APTSIS 25 Step 1

February 25, 2021

Company name: Representative:Mitsubishi Chemical Holdings Corporation

Hitoshi Ochi

Representative Corporate Executive Officer, President and Chief Executive OfficerContact:

TSE code: 4188, First section Osamu Shimizu

General Manager,

Public Relations & Investor Relations Office

Tel: [phone]

Formulation of New Medium-Term Management Plan APTSIS 25

Step 1

Mitsubishi Chemical Holdings Corporation has formulated its new medium-term management plan APTSIS 25, Step 1, which will commence from fiscal 2021, based on the medium- to long-term basic management strategy KAITEKI Vision 30 (KV30)* announced in February 2020.

With regard to the impact of the COVID-19 pandemic, signs of a recovery have been observed in some industries, and vaccine programs have commenced in various countries, including Japan. Under such circumstances, while there are market expectations toward early normalization of economic activity, the situation will likely remain uncertain as multiple variants of COVID-19 have been identified around the world. Based on this awareness, the five-year period of APTSIS 25 from fiscal 2021 has been divided into two phases: Step 1 (With COVID-19) and Step 2 ( After COVID-19). The principal measures in Step 1 (fiscal 2021 to fiscal 2022) have been formulated as set forth below. The plan for Step 2 (fiscal 2023 to fiscal 2025) will be formulated in fiscal 2022.

※ In consideration of social and technological trends, and backcasting from our vision of an ideal society in 2050, Mitsubishi

Chemical Holdings Corporation formulated the medium- to long-term basic management strategy KAITEKI Vision 30 in February 2020 by clearly defining the vision and the goals of the Group for 2030 and its growth path.

URL：https://www.mitsubishichem-hd.co.jp/kaiteki_management/kv30/

Medium-Term Management Plan APTSIS 25, Step 1: Outline

1.

Principal Management Measures

2.

Measures to Bolster Management Foundations

（1） Strengthening of management foundations

•  Reduce assets by 22.0 billion yen in total through rationalization such as consolidating the offices and improving the efficiency in business operations through workstyle reforms and by 180.0 billion yen in total by improving the efficiency of assets through Asset Light and the reduction of policy holdings.

•  Invent and implement workstyles under the new normal, including the consolidation of decentralized offices and the change of office layouts based on the assumption of a maximum employee attendance rate of 60% at a time.

（2） DX Strategies  Formulate the DX grand design in order to achieve KV30.

（3） Measures to Bolster Business Foundations: Business Model Reforms

① Strengthen Solution Provision Structure Provide total solutions such as chemical and materials recycling while further expanding carbonfiber and composite materials business in the mobility field.

• ② Chemical and materials recycling

  Promote a plastics recycling society through supply chain management with customers and consumers.

• ③ Intelligent Gas Supply System (IGSS)

Develop an innovative next-generation gas supply system that makes smart factories possible and develop a wide range of applications through customization and packaging.

（4） Measures to Bolster Business Foundations: R&D Initiatives for Next-generation Businesses and

CVC Strategies

• ① Strengthening of business foundations: Initiatives related to next-generation businesses Promote R&D themes which are expected to add value in the six growth business domains, including GHG reductions, carbon cycle, food and water supply, digital society infrastructure, human interface and medical advances.

• ② Streamlining R&D with Digital Technology and Open Innovation

  Promote digital R&D, such as material design through full-scale utilization of material informatics as well as open innovation, and improve R&D efficiency utilizing quantum computing.

• ③ Strengthening of business foundations: CVC strategy

  Increasing the ceiling on investments to 20.0 billion yen in the next 10 years while looking ahead to developing new domains. Aim to comprehensively cover key business domains for future growth by establishing frontier funds in addition to platform funds and pharmaceutical development funds.

3.

Basic Portfolio Reform Policies

Through the four-quadrant management based on the three-axis evaluation of MOS, MOT and MOE*, we will conduct portfolio management in light of changes in social needs and future risks to our businesses.

※

Mitsubishi Chemical Holdings Corporation conducts KAITEKI Management, a management method which enhances corporate value by implementing the three axes of Management of Economics (MOE), Management of Technology (MOT) and Management of Sustainability (MOS) in an integrated manner with an awareness of time and opportunity.

4．Structural Reforms of Principal Businesses

（1） Carbon chemicals(Strengthen Petroleum Refinery Alliances)

•  Strengthen competitiveness by optimizing Kashima Oil and MCC's Ibaraki operations.

•  Realize chemical recycling of waste plastics by using naphtha crackers and other refinery and petrochemical facilities.

•  Formed capital and business alliance with Refinverse to create waste plastic collection system.

（2） Coke  Change business model by shifting focus from domestic dependence to overseas export

expansion.

（3） MMA  Digitize processes and relocate headquarters functions to globalize business infrastructure.

 Looking to build US plant that would be world's largest to produce MMA employing proprietary Alpha technology.

5.

Business Strategies in the Growth Business Areas Specified in KV30

（1） Growth business areas specified in KV30

Accelerate innovation toward commercialization in light of the situation where the needs for growth business areas specified in KV30 are expanding in With and After COVID-19.

（2） Strategies for Growth Business Areas

① GHG reductions  Evolve LIB materials and develop next-generation battery materials to help popularize EVs and expand adoption of renewable energy.

② Carbon recycling

•  Help materialize low-environmental impact cycles through biomass and biodegradable polymers.

•  Help reach beyond-zero emissions targets by developing artificial photosynthesis technology that harnesses CO2.

•  Providing hydrogen stations as key social infrastructure.

③ Food and water supply  Help cut food losses by creating highly functional food packaging materials.

 Contribute to circular economy through biomass and recycling and reduction technologies.