Unitika : December, 2023Unitika Report 2023Integrated Repor

Prosperity

Unitika Report 2023

Integrated Report

C o n n e c t i n g p e o p l e ' s l i v e s a n d t e c h n o l o g y

Planet

People

New Medium-Term Management Plan (Three Ps)

Eight priority issues and the corresponding KPIs were specified in the previous medium-term management plan.

In the new medium-term management plan, the eight priority issues are compared with the five Ps that are included in the SDGs concepts,

and will be classified into three categories: Prosperity, Planet, and People.

Our Philosophy

Contributing to society

by connecting people's

lives and technology

Basic Management Policies

As a corporate group, we are committed to our philosophy of "contributing to society by connecting people's lives and technology," and to becoming an essential corporation for society that contributes to people's lives and the environment.

While advancing our basic management policies of "strengthening management foundation as a functional material manufacturer" and "strengthening our corporate character

and capital stock," the Unitika Group maintains our firm belief that contributing to society not only increases our corporate value, but also meets the expectations of our stakeholders.

Notes on the Integrated Report

In FY 2021, the Unitika Group integrated the usual Fact Book and Unitika CSR Report, and issued a Unitika Report that summarizes the financial information and non-financial information in a single book. With this report, we are aiming to further deepen the understanding of the Unitika Group by a wide range of stakeholders, including shareholders and investors.

Organizations covered in the report: In principle, this report covers the activities of Unitika, Ltd. and the Unitika Group companies, both in Japan and overseas.

Period covered in the report: April 1, 2022 to March 31, 2023 (includes some information from April 1, 2023 onwards)

Issue: November 2023 (Next scheduled issue: October 2024)

Important notes concerning forecasts: The contents of this report are based on the information currently available to the Unitika Group, and on certain assumptions the Unitika Group determines to be reasonable; the contents are not intended to be a promise that they will be achieved. The actual results, etc., may differ considerably due to various factors.

Prosperity

Expanding net sales of materials

that contribute to the SDGs with the "three types of living"

Contents

Introduction

1 Our Philosophy/Contents

3 History of the Unitika Group

• Main Business Areas and Product Groups

• Financial and Non-Financial Highlights

Planet

Reduction of CO2 emissions

and amount of industrial waste disposed of outside the plants

People

Human rights,

employee engagement, and diversity

Value Creation Strategy	ESG	Financial and
				Corporate Information
9	Message from the President	25	Promotion of Sustainability	45	10-year Financial
13	Value Creation Process	29	Environment		Summary
15	Medium-Term Management Plan	34	Society	47	Business Overview
19	Messages from Officers	39	Governance		by Segment
49	Company Profile

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Introduction

History of the Unitika Group

Founded as a spinning company, we have expanded our product areas to address the various issues in society.

Value Creation Strategy

ESG

Financial and Corporate Information

1889

1950

1970

1980

1990

2000

2010

2020

"Emblem"		"Emblem NC"
"Emblem" is making a positive		"Emblem NC" are easy-to-tear
difference in food distribution,		food packaging films, which
as a superior strength food		can be cut off in a straight line.
packaging film with an oxygen
gas barrier.

Polymers Segment

Polyester film	Easy-to-tear film	Multi-layer film	Release film
"Emblet"	"Emblem NC"	"Emblon"	"Unipeel"

Heat-resistant	High gas barrier film	Recycled nylon film
polyamide film	"Emblem HG"	"Emblem CE"
"Uniamide"

Simultaneous biaxial-oriented

nylon film "Emblem"

Polyarylate	Retro-reflective cloth	Nanocomposite
"U-Polymer"

• retro-reflectivecloth is made from glass beads, which can be used to keep roads safe to use at night.

Glass beads	Activated carbon
	fibers

Heat-resistant polyamide resin

"XecoT"

Low thermal expansion IC cloth

Solvent-resistant hollow fiber membrane

This energy-saving and low

-cost product separates the nanoparticles and dissolved components in organic solvents.

Performance

Materials

Segment

Amagasaki Boseki(Later, Dainippon Boseki) Head Office Plant

Glass fiber IC cloth	Retro-reflectiv cloth		Activated carbon fiber	Smoke barrier
			sheets	"U-Clear Sheet"
Spunbond	Core-sheath composite	Spunlace	Thermal adhesive long fiber
nonwoven fabric	nonwoven fabric		"Melset"
	"Eleves"

Gas-permeable waterproof sheet	Solvent-resistant hollow fiber
"Eleves Capping Sheet"	membrane

		"Hygra"
	Nippon Rayon	These fibers contain water
	-absorbingpolymers, which
	Nearby the Uji Plant Main Building Office
	help to control mustiness
		and stickiness.
Natural fiber	Synthetic fiber	Meta-aramid fiber

Fibers & Textiles

Cotton yarn	Vinylon fiber	Polyester fiber	Multi-layer yarn		Recycled fiber
Rayon fiber	Nylon fiber	"Palpa"		"Uniecolo"
			Silky material	Ultra permeable waterproof material	Moisture absorbing/desorbing fiber
					"Hygra"
1889	1950		1970	1980	1990

Polylactic acid	Cesium-adsorbing fiber
"Terramac"
	Biomass nylon fiber
	"Castlon"
2000	2010

Reusable anti-stress mask

2020

Segment

Founded as a spinning business in modern Japan

The History of the Unitika Group began in 1889, when the company Amagasaki Boseki Ltd. was founded. From 1918, we supported the development of Japan's fiber and textile industry as Dainippon Boseki Co., Ltd., which was regarded as one of the three major spinning companies. Then in 1969, we merged with Nippon Rayon Co., Ltd. to create Unitika Ltd.

Expanded business areas after the post-war slump

The way of living and economic environment in Japan changed considerably following the period of rapid economic growth and the Oil Shock. Amidst that, we forged ahead with differentiating and diversifying Unitika from our competitors, and developed our business into a wide range of areas from films, resins and nonwoven fabrics to activated carbon fibers. We expanded the areas in which Unitika products are used to go beyond just clothing, and also encompass general daily life goods, automobiles, and other applications.

Restructuring and reforming our businesses through selection and focus

After the collapse of the Bubble economy, we reviewed our businesses and set up new companies and overseas subsidiaries of our strong businesses. Unitika moved ahead with its global expansion through a process of business selection and focus. We focused on new businesses in polymers and performance materials, and strengthened development and sales to rebuild our portfolio.

Speeding up the development of environmentally friendly materials and high value-added products

As the global demand for sustainability continues, in many of our business areas, the Unitika Group is speeding up the new development and strengthening of businesses of high value-added products that can meet the needs of customers, and of environmentally friendly materials such as energy-saving products and products that use recycled resources and plant-derived raw materials.

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Introduction

Main Business Areas and Product Groups

Value Creation Strategy

ESG

Financial and Corporate Information

• Items numbered with a ■ are Unitika environmentally friendly materials.
  Items numbered with a ● are Unitika materials. Items marked with a ● are applications.

Unitika Materials

Automobiles and Mobility

Electric and Electronics

Living and Safety

Environment and Energy

Automobiles

Other Mobility

Industry

Lifestyle

Civil Engineering and Construction

(Primary Industry)

Fishing

Films

Polymers

Plastics

ACF

Glass

Fibers

Glass

Beads

Films for industrial use

1 (including "Unipeel" and "Uniamide")

Food packaging films

• (including highly functional products such as "Emblem HG")

• Environmentally-friendlypackaging films

• "U-Polymer"

• "Elitel", "Arrowbase"

Functional plastics

• (including highly functional products such as
  Unitika nano-composite nylon6)

• "Terramac", "XecoT"

• Activated carbon fibers

• Highly functional porous plates

10 Industrial materials

11 Electronic materials (IC cloth)

12 Glass beads

1	● Semiconductors, Smartphones
				2	● Processed meat products, Instant food products,
				Convenience store food, Boil-in-the-bag food products,
					Seasonal products, Confectionary, Souvenirs, Shampoo, Liquid detergent
						3

● Lamps

● Sensors, Switches, Smartphone cameras

4

● Office equipment,

Wristwatches

● Flat cables

● Adhesives

5

● Solar cells

● Engine covers, Mirrors

● Interior parts,

● Lighting equipment,

6

● Sashes, Cable ties

Electrical parts

Office equipment

● Office equipment

7

● Daily necessities

● Deodorizing, Air purification materials

● Filters (for liquid purification)

8

● Deodorizable

● Water purification

● Water

masks

filters

purifiers

● Filters (for clean rooms)

9

● Materials for water

● Refrigerators

● Humidifiers

absorption and transpiration

● Materials for

10

● Materials for electrical

● Electronic materials

11

● Bag filters

10

● Transparent non-combustible sheets

● Civil engineering

heat radiation

and electronic applications

● Tents and sheets

and construction materials

● Reflective materials, Blasting, Fillers

12

● High precision, Industrial use

● Reflective materials

● Road markings

and Agriculture

Performance

13

Spunbond

● Engine silencers, Carpet, Automotive interiors

● Filter applications

Materials

Nonwoven

14

"Terramac"

Fabrics

15

Spunlace

Wet curing sheet for concrete

15

16

17 Polyester staple fiber

● High-melting binder fibers

Industrial

Ultra-high-strength polyester

● Materials for tire (chafers)

● Conveyor belts

● Hoses

Fibers

18 filament yarns and monofilaments

19

"Terramac"

● Filters

20

20

PA hollow fiber membrane

Fibers

21

Fibers and textiles

Garment

(garments, lifestyle materials,

&

and bedding)

Fibers

Textiles

22

Ecofriendly, "Terramac"

Polymers

Performance Materials

Main Products

"Emblem HG"	"Uniamide"	Unitika	"U-Polymer"	Finished glass fabrics
"Emblem HG" is a nylon film with	"Uniamide" is a biaxially oriented	nano-composite	Unitika was the first in the world	for printed circuit
It has high gas barrier retention	Unitika used its technical expertise	nylon6	resin. It is used in a range of	boards
stronggas barrier characteristics.	high heat-resistant polyamide film.		to develop industrialized polyarylate
properties specifically for retorting	and experience in film processing	Unitika nano-composite nylon6 is a	applications, including precision	Unitikahasanintegratedmanufacturing
and boiling applications, and can	to convert this resin into an oriented	composite material boasting superior	equipment, cars, machinery,	system that manages everything from
retain its barrier function even	film. "Uniamide" is well-suited to	hardness, heat resistance,and	medicine, food products, and	the raw fibers to weaving and surface
under a high-level of physical stress.	electric and electronic applications.	moldability. Potential applications	everyday goods, etc.	treatment processing. Unitika glass
		for this product are growing, such as		fabric represents a concentration of
		in engine covers etc. It can be used		all our process technologies, and is
		as a metallic coloredpart to eliminate		used in many digital devices where
		the need for painting.It contributes		high performance is required.
		to reducing costs andCO2 emissions.

13

●Packaging materials,

● Infection

● Roofing, Carpet, Civil engineering materials,

● Sheets for greenhouses

Daily necessities, House wraps

protective clothes

Electrical wires

● Sheets for agriculture

● Daily necessities

14

● Materials for

● Weed proofing

civil engineering

sheets

● Anti-perspiration sheets,

● Disinfectant cotton,

● Materials

16

Disinfection sheets, Cosmetics goods

Medical gowns, Wet towels

for concrete curing

17

● Functional paper

● Medical and cosmetics

● Materials for civil engineering and construction

18

● Gut for fishing and other purposes

● Materials for civil

● Building materials

● Fishing net

engineering and construction

materials

● Daily necessities

● 3D printers

19

● Sandbags

● Filaments

21

● Uniforms, Ladies, Sport, Casual, Bedding interior

● Medical gowns

22

Fibers & Textiles

Glass Beads	Activated carbon fiber	"Marix"	"Cottoace"	"Melset"	"Palpa"
road sign applications, including	filters	performance due to the three	is made of 100% natural cotton.	core-sheath composite structure	yarn products, introduced in 1975.
Glass Beads are used for a range of		" Marix " has high elongation	"Cottoace" is cotton spunlace that	"Melset" is a high-strength and	"Palpa" is the standard in multi-layer
white lines and pedestrian crossings.	The activated carbon fibers of Unitika	-dimensional interweaving of the	It is formed into a sheet using only	multifilament, composed of	It features polyester staple fibers
feature an exceptional absorption
Their retroreflective properties	filaments, as well as superior	the power of water, with no binders	high-viscosity polyester resin at	wrapped in high-quality cotton.
speed for minute amounts of harmful
increase visibility at night, playing	dimensional stability during	or other additives. It isgentle to the	the core and low-melting polyester	Some products utilize recycled
substances. They are used in a wide
an important role in road safety.	processing. As a result, it is widely	skin and has anattractive soft feel.	resin at the sheath. It is a core-sheath	polyester as a raw material, and
range of filters in water purifiers
	used in automotive and interior		binder fiber, which can be molded	a family of materials with a wide
	and air purifiers, helping to clean the
	applications as a base fabric for		into various shapes by heat	variety of added functions has
	water environment and atmosphere,
	carpets.		treatment.	been created.
	and to prevent pollution.

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Introduction

Value Creation Strategy

ESG

Financial and Corporate Information

Financial and Non-Financial Highlights

Financial Highlights

Net sales	Year-on-year
+3,230 million yen
(100 million yen)		1,147.1 1,179.4
1,291.0	1,103.8
	1,195.4

2018	2019	2020	2021	2022	( year )
Fiscal

Ordinary profit	Year-on-year
▲5,330 million yen
(100 million yen)

70.9

64.0

53.8

31.5

10.7

2018	2019	2020	2021	2022	( year )
Fiscal

Operating profit	Year-on-year
▲4,680 million yen
(100 million yen)

81.4
54.7	60.2	60.1
		13.3

2018	2019	2020	2021	2022	( year )
Fiscal
Profit attributable	Year-on-year
▲2,120 million yen
to owners of parent

(100 million yen)

52.3	38.6
	22.2
	1.0
	△21.6

2018	2019	2020	2021	2022	( year )
Fiscal

Cash Flow (CF)

Operating CF		Investment CF		Free CF
(100 million yen)		(100 million yen)		(100 million yen)

		148.7
89.9	98.0	87.0	86.7
25.4					5.1
△4.0		△3.2
			△80.9
△64.4		△61.7
	△101.9		△89.9	△75.8

								( year )
2018	2019	2020	2021	2022	Fiscal
Capital investment/Depreciation
(Property, plant and equipment)
		Capital investment		Depreciation
		(100 million yen)		(100 million yen)

	93.2			76.4
		73.9	76.1
60.7
			47.3
44.8	47.7	45.2	46.7

					( year )
2018	2019	2020	2021	2022	Fiscal

Non-Financial Highlights

CO2 emissions from all domestic production sites

（Scope1+Scope2） ▲26%

relative to FY 2013 level

（kt）	Scope1	Scope2
	357
	61	297	283	272	282	263
		33
		31	25
		22
							19
	295	264	252	250	257	244
	2013	2018	2019	2020	2021	2022	Fiscal
							( year )

to logistics	▲28%
CO2 emissions related
		relative to FY 2013 level
（kt）
27.0

	21.1	20.7	19.5	20.5	19.0
						( year )
2013	2018	2019	2020	2021	2022	Fiscal

Net assets/Capital adequacy ratio

Net assets (100 million yen)	Capital adequacy ratio (%)
413.5	389.3	411.9	430.7	439.2
19.0	18.3	20.7	21.6	22.2

					( year )
2018	2019	2020	2021	2022	Fiscal

Interest-bearing liabilities

(100 million yen)

1,026.0	996.0	968.0		934.4
	938.9

					( year )
2018	2019	2020	2021	2022	Fiscal

R&D expenditures	Child-rearing leave usage ratio
	Year-on-year+16%

(100 million yen)				37.6		（人）				52.8%
	36.2	36.4	36.0
34.7												(19)
										36.6%
										(15)
							15.2%
							(7)
								6.1%	8.1%
								(3)
								(3)
2018	2019	2020	2021	2022	(	year )	2018	2019	2020	2021	2022	( year )
	Fiscal	Fiscal

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Message from the President

Shuji Ueno

Representative Director

and President,

Chief Executive Officer

Introduction	Value Creation	ESG	Financial and
	Strategy		Corporate Information

We are shifting gears to strengthening our businesses, and aiming to improve our earning capacity.

In FY 2022, there was growth in sales of high value-added products, but due to high raw material and fuel prices, the result was an increase in net sales but a decrease in operating profit.

The results for FY 2022 saw net sales increase by 3,200 million yen to 117,900 million yen compared to FY 2021, while operating profit saw a large drop of 4,700 million yen to 1,300 million yen. The higher net sales were due to contributions starting in the third quarter from price revisions and growing sales of high value-added products, despite a struggle for sales caused by worsening market conditions. This is the result of the efforts we made to develop high-performance films with improved gas barrier performance, heat resistance, and other characteristics in the food packaging field which is our primary market. In addition, there was steady growth in sales of new products such as our ultrathin glass fabric that is seeing surging demand as an electronic material, and hollow fiber membrane modules which help save energy and reduce costs.

However, the largest factor affecting the large decrease in operating profit was the high prices of raw materials and fuel, which increased at a rate exceeding our price revisions. There was also a large effect from declining sales quantities due to sluggish demand in the second half of the fiscal year. The three segments of Polymers, Performance Materials, and Fibers & Textiles all saw large declines in operating profit. In particular, the Fibers & Textiles segment was in the red for the third consecutive year, and the Performance Materials segment fell from the black into the red, highlighting the business areas where achieving a profit is difficult. In these and other ways, the environment was extremely adverse in FY 2022, which was the final fiscal year in our medium-term management plan G-STEP30 1st.

In FY 2023, while we expect demand in electrical and electronic applications to recover in the second half of the year, demand has been gradually recovering beginning from the start of the year in food packaging applications and automotive applications, and we expect to see results from the price revisions we carried out in response to the soaring prices of raw materials and fuel. When the effects of further growth in high value-added products are added, we intend to achieve a recovery in operating profit, an increase by 2,500 million compared to FY 2022 and reach 3,800 million yen.

Results and issues of the medium-term management plan G-STEP30 1st which was focused primarily on the three Gs

The three basic policies and basic strategies of the medium-term management plan G-STEP30 1st were Growth, Global, and Governance. Although the results were extremely difficult in terms of business revenue, there were positive results in terms of each of the three Gs.

For Growth, we made steady progress in the development of high value-added products in the food packaging and electrical and electronic materials fields. This was a key element of our efforts to strengthen our revenue structure over three years, and these areas saw a rise in sales. We are focusing on development of environmentally-friendly products, and have succeeded in creating a foundation for accelerating development in the future. At the same time, the deficit is expanding in the Fibers & Textiles segment, and there are fields where achieving profits has been difficult in the Performance Materials segment. Factors such as these show that there are unprofitable areas which are compressing

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business revenue, and these remain issues to be addressed.

For Global, there have been significant effects from the COVID-19 pandemic, and there were notable delays in progress. One example was our plan to expand production to meet growing demand in the global market centering on the Asian region by constructing a new nylon film plant at our subsidiary PT. Emblem Asia in Indonesia. The project was nearly two years behind schedule, and operation finally started in August 2022. There remain issues in the development of global human resources as well. Cross-border travel was strictly limited by the pandemic, reducing the number of opportunities for personnel to interact and preventing us from carrying out training as planned. Despite these conditions, we have made steady progress, for example by establishing Unitika Europe GmbH in Germany and constructing a film sales system at Unitika Advance (Thailand) Co., Ltd.

For Governance, we have steadily improved its level including introducing systems for establishing a quality assurance system. Regarding the rebuilding of risk management, we have carried out measures such as identifying a wide range of risks including climate change risks, and creating a risk map. In addition to quality assurance and risk management, we have proceeded with establishing various new committees such as the Sustainability Committee and the Compliance Committee, and organized their functions. We have constructed an operating system that is linked directly with the Board of Directors and have taken other steps to further strengthen our governance system. At the same time, there is a sense that we have identified issues facing our progress toward the next stage in strengthening our manufacturing sites, including development of human resources who can pass on their skills, and updating aging equipment.

Launch of the new medium-term management plan G-STEP30 2nd

Beginning from FY 2023, we have launched the new three-yearmedium-term management plan G-STEP30 2nd, which aims to "shift gears to strengthening our businesses." While there is no change to the position of the three Gs (Growth, Global, Governance) as the basic policies, the contents of the plan have been updated.

For Growth, as the central theme of the plan, we will enact fundamental measures for unprofitable business areas, rebuild our business portfolio, expand sales of highly functional products, and devote even greater effort to the development and promotion of sustainable products. For the past several years, we have focused our efforts on constructing R&D systems to accurately identify market and customer needs, and carry out rapid development. As a result of these and other measures, we are now steadily developing high value-added products. In the future, we will continue to increase our lineup of products more likely to be chosen by customers and with distinctive characteristics, and will work to further increase sales. In addition, we will devote further efforts to price revisions and cost reforms.

For Global, we intend to focus directly on global film development centering on PT. Emblem Asia (Indonesia) where our new production equipment has finally started full-scale operation. The plan calls for increasing the ratio of overseas net sales to 25% by FY 2025. Compared to the current level of 23%, the difference is just a 2-point increase, not a large numerical gap. However, we have focused efforts recently on strengthening our manufacturing and sales systems, and will prepare a foundation that will allow us to achieve the 35% target in our long-term vision. As one part of this process, we will accelerate our initiatives for developing and securing global human resources, and revitalize the interaction of personnel through means such as overseas study and overseas trainee system.

For Governance, we will continue working to strengthen our quality assurance, risk management, and other systems, and will endeavor to cultivate an open organizational culture. Development of human resources is essential for the continuation of our business. For this purpose, we will focus our efforts on training production site leaders through selective training in order to pass on the skills which are the source of our competitiveness to the next generation. We will also invest in aging equipment, and otherwise carry out improvements to our production sites, ensure employee safety, and enact comprehensive and reliable risk countermeasures.

The most important issue running throughout the entire plan is a recovery in and strengthening of business revenue. We will address this as our highest priority, and take sure steps toward realizing our long-term vision.

Introduction	Value Creation	ESG	Financial and
	Strategy		Corporate Information

Setting FY 2025 target values and implementing the Sustainability Plan

In the new medium-term management plan, in addition to the three Gs, we are also working to implement the Sustainability Plan. In the Unitika Group, eight priority issues (materiality) and the corresponding KPIs were specified in the previous medium-term management plan. In order to more reliably achieve our targets for the target year of 2030, the new medium-term management plan sets milestones (intermediate targets) for 2025, and we will carry out measures for the eight priority issues classified into the categories of Prosperity, Planet, and People based on the SDGs targets.

For Prosperity, we have set business themes for making lives more affluent from the three perspectives of safety and security, convenience and comfort, and coexistence with the environment. We have established numerical targets of increasing sales of materials based on these three themes by a factor of 1.6 by FY 2025 compared to FY 2019 levels, and by 2.6 by FY 2030.

For Planet, we have established numerical targets for CO2 emissions and for the amount of industrial waste disposed of outside our plants.

For People, we are focusing on investment in human capital, and working to create a company that respects human rights and is a rewarding place to work at, and to promote diversity. By strengthening supply chain management, we are enacting management to prevent human right abuses within our supply chain.

We recognize that the Sustainability Plan is an important part of our management plans that will play an essential role if the Unitika Group is to be a company that is continuously chosen by customers, and that the three Ps initiatives will form the foundation for our business activities and increasing profits. In particular, our Planet and People initiatives can be carried out by our company to some degree based on its own efforts. However, Prosperity will only yield sales once the value of the initiatives has been well understood by our customers. We believe it is important that we work to identify that value which will be highly evaluated by customers and society, and address these initiatives sincerely.

To all stakeholders

In FY 2022, we were subject to major impacts from the external environment, and the results were extremely challenging. Issues from the previous medium-term management plan remained incomplete. In the new medium-term management plan, we will carefully address these issues in order to restore business results, and devote our every effort to strengthening our business earning capacity. Key to these activities is the unique strengths of the Unitika Group: our advanced technical capabilities developed over many years and our high value-added products with high functionality that meet market needs with environmentally friendly performance.

The current times are seeing sweeping changes in market structures, so we will focus our attention on responding to the shifting situation, and transform the great potential of the Unitika Group into the form that can best meet the needs of people and society. All employees, including the management team, will devote their full efforts for this purpose. I hope that the Unitika Group can continue to rely on the understanding and support of all our stakeholders.

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Value Creation Process

Aiming to be a company that is continuously chosen, and contributing to the creation of a sustainable society

Our Philosophy

Business Model

Values Provided

Introduction	Value Creation	ESG	Financial and
	Strategy		Corporate Information

Desired Image (Long-term vision)

Businesses

P o l y m e r s S e g m e n t

Performance Materials Segment

Fibers & Textiles Segment

	We provide products that can protect
	people from or minimize various risks
Safe	in their daily lives (disasters, accidents,
crimes, damage to health, etc.).
and	Main business and products:
secure living	Construction and civil engineering
materials, Industrial materials, Food
	packaging materials, Sanitation
	materials

A company that is continuously chosen by customers

・A company that contributes

Contributing to society by connecting people's lives and technology

See pp. 47‒48 for details.

Strengths

・Responsiveness to diverse needs

・Global niche technologies and products ・Domestic and global top share products ・Seven core technologies

Fibers and textiles technologies, Nonwoven fabric

Convenient

and

comfortable living

In response to globalization, digitalization, changing lifestyles, progressive aging, and other changes in society, we provide products that are compatible with diverse lifestyles and lessen the burdens of daily life.

Main business and products:

Electrical and electronic materials, Industrial materials, Filter materials

to society through manufacturing, and is trusted throughout the world

・A company that creates new value with unique technology,

and continues to grow sustainably

・A company that increases corporate value and is evaluated highly

by a wide range of stakeholders

technologies, Film technologies, Polymerization technologies, Compound alloy technologies, Emulsion technologies, Analytical evaluation technologies

Living in

coexistence

We provide products that contribute to the improvement of living standards around the world, mitigation of climate change, reduction of the

Targets to be achieved by around 2030

Strategies

Medium-term management plan G-STEP30 1st

Shift gears to strengthening our businesses

See pp. 15‒18 for details.

The three items listed here are "business-related priority issues," which are a part of the priority issues (materiality). See pp. 25‒28 for the other priority issues.

with the environment

environmental impact, and resource and energy saving.

Main business and products:

Biodegradable materials, Various recyclable materials

Net	200,000 million yen
sales
Operating	20,000 million yen
profit

Basic matters underlying	Compliance Strengthen governance Ensure product safety and quality Promote digital transformation
the priority issues

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Medium-Term Management Plan

Introduction	Value Creation	ESG	Financial and
	Strategy		Corporate Information

Long-term vision

coexistence with the environment.

A look back at the previous plan G-STEP301st: FY 2020 to 2022

In May 2020, we revised the desired image of the Unitika Group, and formulated G-STEP30, a long-term vision for around 2030.

Underour philosophy of contributing to society by connecting people's lives and technology, we are striving to be a company that is continuously chosen by customers, with the Group mission of contributing to achieving the SDGs through approaches to the "three types of living", safe and secure living, convenient and comfortable living, and living in

We are moving forward with our three-step initiatives toward realizing our long-term vision, as we strive to achieve sustainable growth and contribute to society. The single theme that underlies all three steps is promoting the three Gs (Growth, Global, Governance), and managing their progress.

Growth Global Governance

Despite growth in net sales in both FY 2021 and FY 2022, net sales did not reach the plan target. In terms of profits, in addition to the high prices of raw materials and fuel, other factors included a drop in sales and an impairment of non-current assets, and the results deviated largely from the plan targets.

Regarding the three Gs, for the first G Growth, although sales grewforhighvalue-addedproductsandenvironmentally-friendly food packaging films, the handling of areas where profitability has declined remains an issue. For the second G Global, we proceeded with the establishment of new overseas sites and

the preparation of a sales system, however many issues remain as a result of delays in the operation of production equipment, development of human resources, and other matters. For the third G Governance, we succeeded in establishing a quality assurance system and rebuilding the risk management system, however there remain issues concerning development of human resources and passing-on of skills in regard to strengthening the manufacturing sites. There also remains the issue of upgrading aging equipment as a means of addressing business continuity risks.

Consolidated net sales

Consolidated operating profit

Consolidated net income

A company

that is

continuously

Desired image in the long-term visionchosen We are aiming to be a "company that is

continuously chosen by customers."

(100 million yen)		Actual results		Plan

		1,470
1,104	1,147	1,179
2020	2021	2022	Fiscal
			( year )

(100 million yen)	Actual results	Plan
		110
60	60
		13
2020	2021	2022	Fiscal
			( year )

(100 million yen)	Actual results	Plan
		71
39
	22
		1
2020	2021	2022	Fiscal
			( year )

		「G-STEP30 3rd」
		FY2026～2028
	「G-STEP30 2nd」	Establish a growth cycle
	FY2023～2025	● Realize a constant growth trajectory
「G-STEP30 1st」	Shift gears to strengthening	● Achieve a healthy debt system
● Improve corporate value
FY2020～2022	our businesses
● Rebuild the business portfolio
Prepare a business
● Promote global business
operation base	development
● Build a robust business portfolio	● Prepare a business base
● Promote our global business
● Reform our corporate culture
and awareness

	Create and provide business value,
	improve the Group's corporate value	Contribute to
	Implement more technical training, strengthen personnel skills, evolve work processes,	realizing
	etc. to facilitate sustainable growth	a sustainable
	Improve quality and build trust, ensure thorough risk management, expand business areas,	society
	etc. to prepare a business operation base
2022	2025	2030

Summary of priority policies

Priority policy

Build a robust business portfolio

● Strengthen our base and infrastructure

Growth	(speeding up the development
of highvalue-added products)
	● Promote sustainability
	(eco, creation of new business)
	Promote our global business
Global	● Build a global production system
● Strengthen sales capabilities through
alliances
	● Develop and strengthen global human
	resources
	Reform our corporate culture and
	awareness
Governance	(back to basics in manufacturing)
● Establish a quality assurance system
	● Rebuild risk management
	● Strengthen manufacturing sites

Evaluation ◯Achieved

△Not achieved (issue for the next plan)

There was growth in sales of high value-added products in fields such as food packaging, electronic materials, and water purifiers.

There was growth in sales of environmentally-friendly food packaging films.

Profitability worsened in the garment fiber business, industrial fiber business, and related areas.

It is necessary to rebuild the business portfolio.

Established Unitika Europe GmbH.

Prepared a film sales system at a subsidiary in Thailand.

There were large delays in the capital increase at PT. Emblem Asia (Indonesia).

Revenue declined as a result of declining demand in the region.

We were unable to carry out training and education of global human resources as planned due to the COVID-19 pandemic.

Some levels of results were achieved as a result of introducing a quality assurance system.

dentified risks and created a risk map.

Issues remain for strengthening of manufacturing sites (passing on skills, training personnel).

Action such as upgrading aging equipment is required in order to address business continuity risks.

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New medium-termmanagement plan G-STEP30 2nd: Starting from FY 2023

Introduction

Promotion of Sustainability
See pp. 25‒28 for details.

Value Creation Strategy

ESG

Financial and Corporate Information

Based on the issues in the previous plan, the new medium-term	and "Governance: Prepare a business base."
management plan carries on the concept of the three Gs, which	In line with these policies, we are aiming to implement measures
are the theme of the long-term vision G-STEP30, and	for each of the three Gs to achieve the targets, and to be a
establishes the basic policies of "Growth: Rebuild the business	"company that is continuously chosen."
portfolio," "Global: Promote global business development,"

In the new medium-term management plan, in addition to	In the new medium-term management plan, the eight priority
the three Gs, we are also working to implement the Sustainability	issues are compared with the five Ps that are included in the
Plan. The Unitika Group has specified eight priority issues and	SDGs concepts, and will be classified into three categories:
the corresponding KPIs in the previous plan.	Prosperity, Planet, and People.

Financial targets

Consolidated net sales

(100 million yen)	Actual results	Plan
	2,000
1,179	1,500
2022	2025	2030 (Fiscal year)

(100 million yen)	Actual results	Medium-term plan	Long-term vision
FY 2022	FY 2025	FY 2030
Ordinary profit	11	50	ー
Net income	1	20	ー
Capital adequacy ratio	22.2%	23%	30%
ROE	0.3%	5% or more	ー
ROIC	0.8%	4% or more	ー
Overseas sales ratio	23%	25%	35%
Net assets	439	486	ー
Interest-bearing liabilities	934	903	ー

Consolidated operating profit

(100 million yen)	Actual results	Plan
		200
	70
13
2022	2025	2030 (Fiscal year)

(100 million yen)	Total FY	Total FY
2020 to 2022	2023 to 2025
Capital investment	224	200
Depreciation	157	224
R&D expenditures	110	110

	Our Philosophy	Contributing to society by connecting people's lives and technology
Basic policies Group Mission	Contributing to the SDGs with approaches	* Safe and secure living, convenient and comfortable
to the "three types of living"＊	living, and living in coexistence with the environment
	Desired Image	Contributing to the realization of a sustainable society, aiming to be a "company that is
	(Long-term Vision)	continuously chosen by customers." We will contribute to the realization of a sustainable
	Sustainability Policy	society by connecting people's lives and technology through its business activities.

Values provided to stakeholders

Stakeholders
Global		Shareholders		End users		Business partners		Employees
			Safe and secure living		and clients
Values	environment		and investors				Motivating feeling
		Convenient		Sustained business
provided	Coexistence		Sustained
		and comfortable living		collaborations		of actual growth
	of business		improvement		Living in coexistence		(partnerships		Safe and
	and the environment		of corporate value				secure workplaces
			with the environment		for mutual prosperity)

Medium-term	Growth	Global	Governance
management	Rebuild the business portfolio	Prepare a business base	Prepare a business base

Basic policies, main measures

			Basic policies			Main measures
			Enact fundamental measures		Reduce costs and fully increase prices to cover costs
			for unprofitable business areas	Identify unprofitable business areas
Growth			Strengthen the nylon film business
Promote growth strategies			Lineup of "Emblem HG" and other gas barrier products
Rebuild
Develop and promote sustainable products
the business portfolio
							"Emblem CE", "XecoT", hollow fiber membrane
			Expand sales of highly functional products	Sales of high value-added products

plan

Implementation of the Sustainability Plan（Prosperity, Planet, People）

Strategy for each segment See pp. 19‒24 for details.

Global				"Uniamide", special glass fabric
Prepare global production and sales systems	PT. Emblem Asia (Indonesia), Thai Unitika Spunbond Co., Ltd. (TUSCO) (Thailand)
		Expand sales within and outside the region, centering on Asia,Europe, and the Americas
Promote
global business	Develop and strengthen global human resources	Unitika Europe GmbH (Germany)
development			Expand sales of Unitika products in the European region

We are aiming to increase net sales and operating profit in all segments. In both the Performance Materials and Fibers & Textiles segments,

		Net sales
	Actual results	Medium-term plan
(100 million yen)	FY 2022	FY 2025

Difference

Operating profit

Actual results	Medium-term plan	Difference
FY 2022	FY 2025

	Reform our organizational culture	Cultivate an open organizational culture
	Focus on development of next-generation management
	and develop human resources
	Diversity management
		Develop core personnel, promote women's participation
Governance
	Go back to basics in manufacturing, strengthen manufacturing sites
Prepare a business base			Develop production site leaders through selective education
		Promote the digital transformation (DX), utilize production management
	Pass on skills, prepare production sites			system data
	Create safe and secure workplaces
				Carry out health management
				Prepare production sites consistent with risk management
				(measures for aging equipment)

which recorded operating loss in the last plan, we are aiming to achieve profitability in FY 2025.

Polymers	515
Performance	344
Materials
Fibers	319
& Textiles
Other	1
Total	1,179

670

460

370

0

1,500

+155

+116

+51

▲1

+321

35	53	+18
▲5	14	+19
▲15	3	+18
▲1	0	+1

13

70

+57

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