IR

Central Glass’s Vision

Representative Director, President & CEO Kazuhiko Maeda

We aim to become a Specialty Materials Company that contributes to the realization of a sustainable society through unique research and development.

Representative Director, President & CEOKazuhiko Maeda

As an R&D-Oriented Company, We Are Committed to Creating Products That Solve Global Issues

Since our founding in 1936 as a chemical manufacturer engaged in the production and sales of soda products, Central Glass has expanded business to meet the needs of society and industry through fertilizer, glass, and glass fiber businesses. We also expanded into the fine chemicals field, which is now our core business. More recently, we engaged in the structural reform of our underperforming glass business. In April 2023, we established a new company to integrate our domestic Architectural Glass and Automotive Glass businesses to launch a new growth phase.
Our philosophy is to solve social issues and create a better future through monozukuri. This philosophy has remained constant throughout our nearly century-long history, and in line with this philosophy, we offer materials and products that contribute answers to global environmental problems based on proprietary research and development. One of our most important materialities is developing and providing products that solve social issues. We also recognize that reducing greenhouse gases (GHG*1) is one of the most pressing environmental issues on a global scale.

Central Glass develops and provides many environmentally friendly products. These products (chemicals), which amount to nearly 80 billion yen and account for half of total sales, include low global warming potential (GWP*2) products with less GHG emissions and energy-saving products. We estimate that our main low-GWP products contribute to GHG reductions of 6 million tons of CO2, and we recognize that these products contribute significantly to solving environmental issues.
A look at the business environment reveals that the need for environmentally friendly products is greater than ever. We see the response to climate change and other global environmental issues, as well as the need to reduce GHG emissions, as business opportunities for our company, and we will endeavor further to improve the environment through our businesses.
Our most notable product that contributes to GHG reduction is electrolytes for lithium-ion batteries, used mainly in electric vehicles (EVs). This sector has grown significantly over the past few years. However, the business environment has weakened more recently due to a slowdown in the growth of EV demand and other factors. While we expect demand and social needs to recover, we are preparing to specialize in growth regions, including signing an OEM agreement with a Korean company, to solidify a supply structure for North America, where growth in demand is expected to rise again. In semiconductor materials, which is our core business, we focus on materials and products that meet the demand for environmentally conscious products.

  • 1 Greenhouse gases (GHG)
  • 2 Global warming potential (GWP): A greenhouse effect coefficient

A Long-Term Vision and Purpose That Contribute to the Creation of a Sustainable Society

We formulated our VISION 2030 long-term vision in May 2024 to strengthen our management in this area and to define the clear goal of contributing to the environment through our corporate activities. We are united in the goal of becoming a Specialty Materials Company that contributes to the realization of a sustainable society by the year 2030.
We expect that sharing this vision of 2030 inside and outside the group and showing the direction of our organization will increase group member motivation and a sense of unity. We also believe that communicating our goals clearly to external stakeholders will foster a deeper understanding of our business, and we hope to share our goals and direction through increased opportunities for dialogue.
Under VISION 2030, we aim to achieve a record-high operating profit of 20 billion yen and an ROE of 10% or more. We will endeavor to achieve these goals through a business strategy based on the two pillars of expanding specialty products and strengthening essential products.
Specialty products are products offering one or more of three advantages: (1) Technological advantage; (2) Originality; and (3) Sustainability. For example, our electronic materials offer a technological advantage, while our sevoflurane, an API for inhalation anesthesia, offers originality and our electrolytes offer sustainability.
Essential products are a group of products that do not necessarily offer an outstanding competitive advantage, but represent products for which society has constant needs. These products include glass, glass fiber, fertilizer, and certain chemical products.

To enhance our corporate value further as an R&D-oriented company, we must become highly profitable. To this end, we pursue the expansion of specialty products as a key strategy. Our specialty products already occupy a significant profit position and have a proven track record—all originating from proprietary research and development. Among new initiatives under development are several products poised to bloom in their respective fields. We will continue to focus on R&D, increase our specialty product offerings, and strive toward an operating profit of 20 billion yen by 2030.
At the same time, strengthening essential products is a key strategy in parallel. We pursue higher profitability in this area through appropriate pricing policies, business model reform, supply chain enhancements, and productivity improvements.
In formulating our long-term vision, we held internal discussions of how to create value for our stakeholders and how to contribute to solutions to social issues amid a growing focus on ESG management and sustainability.
As a result, we felt it necessary to redefine our company's significance to society, or what we call Purpose. The Central Glass Purpose is to contribute to the realization of a sustainable society through innovative materials and technologies. To build a sustainable society as a Specialty Materials Company.

Achieving Our Medium-Term Operating Profit Target Ahead of Schedule

We support the achievement of VISION 2030 through a medium-term management plan (plan) formulated every three years. Our current plan (FY2022 to FY2024) focuses on strengthening R&D and defining the role of businesses in our business portfolio. Specifically, our R&D has pursued the development of functional materials through our core technologies and the acquisition of technologies in new areas through open innovation. In the meantime, we pursue business measures that include fundamental structural improvements in the Glass business and development of a global supply chain in the Energy Materials business.
Under these initiatives, as of FY2022, we already achieved the operating profit target of the final year of our current plan. In FY2023, we posted net sales of 160.3 billion yen, an operating profit of 14.5 billion yen, and an operating profit margin of 9.1%. For a second consecutive year, we exceeded the final year targets of our current plan.

The early achievement of these targets was largely due to the sale of overseas operations in our glass business that were difficult to monetize, the significant reduction of production capacity in Japan in line with demand, and the subsequent pricing policy.
In addition, the semiconductor materials business has grown significantly amid increased demand. We experienced a period of falling demand in a negative reaction to strong special demand in the wake of the COVID-19 pandemic. However, demand has recovered more recently, and we expect demand to grow further, due in part to future demand for semiconductors for generative AI applications.
At the same time, we expect operating profit for FY2024, the last year of the plan, to vary from the final target due to a weakening market environment in the Energy Materials business and an increased cost burden for raw materials and fuel materials. However, we will continue active business enhancement activities, particularly in the semiconductor-related business and Chemicals business at large.

Strengthening R&D Capabilities to Answer Market Needs as a Source of Competitiveness

We want to be a company that responds agilely to the changing times and delivers useful products to society through flexible and creative technological capabilities. We respond to the needs of our customers and the market head-on, active in expanding our offerings of specialty products in line with the key strategies of VISION 2030 and evolving as an R&D-oriented company.
Under VISION 2030, we intend to expand our lineup of R&D categories that promise high-growth potential and specialty products in four areas: (1) Semiconductors and power semiconductors, (2) batteries, (3) life sciences, and (4) lifestyle, environment, and food.

In our semiconductor and power semiconductor business, we are developing materials for SiC and power semiconductors, including Gas X as a new etching gas, PFAS-free circuit pattern collapse prevention agents, and liquid-repellent bank materials. In batteries, we focus research and development on future products related to sodium-ion batteries, all-solid-state battery-related products, and our high-performance additives for lithium-ion batteries. In life sciences, we research and develop cell sheets for regenerative medicine.
In the life, environment, and food field, we focus on research and development for anti-fouling and anti-fogging mirrors, PFAS-free blowing agents and solvents, non-plastic coated fertilizers, and next-generation HUD for automotive glass. Fertilizers in the food sector are an essential and significant business that supports the Japanese diet. Unfortunately, our business here is still in the red. However, we are developing new products and working to reduce costs.

Among these fields, we are most excited about the semiconductor sector. Our customers—the semiconductor manufacturers—are signaling clear demand for low GWP, PFAS-free, etc. We believe we are making progress in solutions proposals and gaining customer acceptance.
I joined Central Glass as a chemical products researcher. I then went on to work in sales and planning. During my time as a researcher, I focused on fluorine coatings and electronic materials. For example, a paint we developed was used on the Akashi Kaikyo Bridge to prevent the bridge's surface from deteriorating due to weather. In the planning department, I led the expansion of the electronic materials for semiconductors and the electrolytes business for EV batteries. We are about to enter a new period of growth, pursuing a long-term vision and a long-term perspective that will contribute to the realization of a sustainable society. This time is an opportunity for researchers to make progress that will have an impact far into the future. I hope every researcher approaches their work enthusiastically with this in mind.

Human Resources Are the Key Driver of Growth

Human resources will be the key driver for Central Glass to achieve the vision and strategies outlined above. We understand that the spirit of monozukuri in our corporate philosophy is the foundation of our business activities and that our group members are who support monozukuri. We pursue human capital management to maximize the value of our group members as human assets from three perspectives: (1) Increasing engagement; (2) Promoting diversity, equity, and inclusion; and (3) Promoting health and productivity management.
In other words, we strive to improve and homogenize the level of our human resources by enhancing our system of education and training to communicate this spirit. We recruit mid-career professionals to enhance our resources in highly specialized areas. Last year, we established the Health Promotion Section to provide physical and mental health support to group members for higher performance and productivity.
In addition, we hold about 50 town hall meetings between the president and group members to ensure the company is aligned in the same direction. The meetings began as a forum for between 20 and 40 group members and management to meet and learn about what the other side is thinking. Direct dialogue with group members is important to develop an understanding and gain a wider appreciation of our long-term vision and perspective. We use unfiltered feedback from group members in future corporate activities and management decisions.

Sustainability Initiatives Are an Integral Part of Corporate Activities

We conduct ESG management to strengthen our management foundation. As we state in our Purpose, sustainability initiatives represent our significance to society, and one pillar of ESG management is to address environmental issues through our corporate activities.
Through our efforts toward carbon neutrality, we achieved our GHG reduction target for 2030 (sum of Scope 1 and Scope 2) ahead of schedule in FY2022. This success was due in part to the impact of structural improvements in our glass business. Accordingly, we changed our target from a 40% reduction to a 60% reduction compared to fiscal 2013, and we are now working hard to achieve this outcome.
In FY2023, we received a score of B- from CDP, a non-profit organization that evaluates efforts to address environmental issues. This score recognized our efforts to reduce GHG emissions and water consumption areas we have been addressing for some time.
After discussions in the internal Sustainability Committee and the Board of Directors, Central Glass formulated our first materiality in 2023. This materiality includes our response to environmental conservation. This fiscal year, we will formulate a new medium-term management plan, pursuing efforts to reduce our environmental impact in accordance with the new plan.

Building Trust With Stakeholders Through Information-Sharing and Dialogue

Traditionally, our company has been lacking in communicating our corporate stance and management policies to our stakeholders. Due to this lack, recognition and empathy for Central Glass have been low.
When I took over as president in 2023, we published our first-ever integrated report, signaling our shift to a policy to communicate our Purpose and management targets more actively. As part of these efforts, we announced our long-term vision and Purpose, discussed actions to achieve management conscious of the cost of capital, held a management overview meeting, and revised the content and design of our disclosure materials. We redesigned our website and expanded content significantly to provide useful and timely information to stakeholders, including our group members.

We feel these activities have increased our dialogue with stakeholders and provided more opportunities to foster a deeper understanding of our company. Many group members have welcomed this approach, reminding us once again of the need to strengthen our ability to communicate.
We continue to build relationships of trust with our stakeholders by providing more opportunities to gain a deeper understanding of our business and philosophy and to hear their opinions.
Next year, we plan to formulate and announce a new medium-term management plan, created by backcasting from our ideal vision of Central Glass in 2030. Although predicting the future in these times is difficult, we will continue to monitor social conditions, the business environment, and the latest technological trends, aiming to become a specialty materials company, maximize corporate value, and continue our growth to benefit the future of society, our customers, business partners, group members, and investors. I sincerely appreciate the continued support of you, our stakeholders.

  • This message is from Top Message, an integrated report published in September 2024.

Representative Director, President & CEO

Kazuhiko Maeda

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