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President's Message
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To New Japan Chemical shareholders and investors

Photo:Mantaro Fujimoto,President

Mantaro Fujimoto,President

Please allow me to take this opportunity to express my most sincere gratitude for your continued support.

I would like to provide you with an overview of our 143rd fiscal term (from April 1, 2014 to March 31, 2015).

Overview of financial results

During the consolidated fiscal year under review, although the Japanese economy experienced a gradual easing of the counter reaction following the increase in demand in conjunction with the consumption tax rate hike, uncertainty remained as improvement in personal consumption and corporate profits in the second half stalled.

In the chemical industry, costs increased as prices of imported raw materials rose rapidly because of the decline in the value of the yen, while product prices fell sharply due to the effects of the sharp fall in crude oil prices since the autumn. As a result of these and other factors, income continued to be squeezed under difficult conditions.

Under these circumstances, the group worked to reinforce marketing and development capabilities under the business unit system introduced with the aims of pursuing customer-oriented business and clarifying responsibility for profits. We also established a local subsidiary in Malaysia, expanded business in southeast Asia, a region that is expected to continue growing in the future, and took group-wide measures to reduce costs.

Despite these efforts, however, the impact of the slump in demand following the consumption tax rate hike and low-cost imported goods was substantial, and it remained difficult for the group to generate profits.

As a result, the group's net sales during the consolidated fiscal year were 30.284 billion yen (down 1.2% from the previous year), ordinary income was 285 million yen (down 26.8% from the previous year), and net income was 318 million yen (up 47.3% from the previous year).

Future outlook

With regard to the future outlook of the Japanese economy, it is expected that personal consumption will recover as a result of improvement in the employment and income environment, but there are concerns regarding sluggish economic growth in China and economic downturn in Europe, and consequently, unpredictable circumstances are expected to continue. In the chemical industry, raw material prices are expected to remain unstable as a result of fluctuations in currency exchange rates and crude oil prices, and as a result, the Company's management environment will likely remain unclear.

Under these circumstances, the group will work to reinforce marketing by utilizing the functions of the business unit system and to further increase customer satisfaction while focusing on promoting sales of new products. The entire company will work in concert to reinforce cost-cutting measures and work to improve profit structures with the aim of establishing strong corporate foundations that are not susceptible to impact from the external environment. In addition, we will reinforce our overseas business strategies by advancing the globalization of sales and procurement through overseas affiliates.

Under our corporate philosophy of "contributing to society development through innovative offerings," the group will fulfill its corporate social responsibility. In addition to measures to reduce environmental impact and conduct comprehensive safe operations, we will enhance risk management systems for ensuring business continuity.

I ask for the continued support of our shareholders.

June 2015

Mantaro Fujimoto President
New Japan Chemical Co., Ltd.

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