I would like to thank you for your continuous support.
We would like to express our deepest sympathy to those who are suffering from the Noto Peninsula Earthquake in 2024 and pray for the earliest possible recovery.

Last year, we faced a challenging business environment, including the decline in the ferroalloy market and the increase in costs due to soaring electricity. On the other hand, we are confident that the Group's capabilities have undoubtedly improved over the three years from 2021 to 2023 due to the steady progress made in the Eighth Medium-Term Business Plan. As a result of proactive efforts to implement various measures, we expect consolidated underlying ordinary profit for the fiscal year ended December 2023 to achieve the target of ¥6.0 billion, excluding the impact of inventory and one-time factors.

This year marks the start of a new Medium/Long-term Business Strategy based on the results achieved to date. The implementation of this strategy will embody the concept of "Desired State" in 2030 that we have envisioned up to now as "Our Ideal State" in 2030. Furthermore, we have formulated the Ninth Medium-Term Business Plan with the year 2027 as the milestone toward 2030 and compiled specific measures to be implemented in each business over the next four years.

Ferroalloys Business
Even as domestic demand for ferroalloys continues to decline, we will establish stronger earnings and financial structure further pursuing the expansion of profitability, including productivity improvements, and inventory reduction. At the same time, we will actively engage in R&D to utilize the wood coke for reductions and carbon-free ferroalloys manufacturing, to reduce CO2 emissions by at least 45% by 2030 (compared to 2015). In addition, in our overseas business, we will also continue to develop markets by taking advantage of our superiority in being able to utilize green power sources from hydroelectric power on the premise that stable production will continue.

Functional Materials
To address the rising demand for electronic components driven by the electrification of automobiles and other factors, we will increase our manufacturing capacity for Zirconium oxide by 40%. In addition, we will expand sales of domestically produced one-of-a-kind products, such as Ferroboron, which contributes to customers' demands to avoid geopolitical risks. At the same time, we will expand revenues by embodying the results of R&D in the field of next-generation battery materials and other areas.

Incineration Ash Recycling Business
We will increase the collection volume of incineration ash by strengthening cooperation with municipalities and local communities more than before, while steadily passing on higher electricity and other costs to treatment prices. Against this backdrop, we aim to increase the number of incineration ash melting furnaces from the current four to seven by 2030.

Aqua Solutions Business
To meet the growing demand for boron removal from wastewater originating from industrial waste disposal sites, we will strive for capacity enhancement at the Koriyama Plant. We also aim to contribute to the development of a hydrogen-based society by expanding sales of pure water production systems.

Electric Power Business
In addition to securing long-term stable revenue through FIT, we expect the issuance of non-fossil certificates, leveraging the environmental value of hydroelectric power generation, to contribute to our carbon neutrality.

To promote the expansion and development of our five core businesses, we will proactively make strategic investments, including production capacity enhancement and sustainability-related measures such as DX・GX. In addition, we will invest a total of ¥3.2 billion in R&D over four years. At the same time, we will utilize the two venture capital funds we invested in last year to expand exchanges and collaboration with venture companies with advanced technologies, which will lead to the development of new products and technologies and new business opportunities.

Given the continued impact on the global economy resulting from the fragmentation within the international community, we anticipate a challenging business environment for our company in the current fiscal year. However, we are confident by accomplishing the issues to be addressed, we will achieve our plans and goals, resulting in further growth and development of the Nippon Denko Group.

In the year ahead, the Nippon Denko Group will make every effort to fulfill our mission of contributing to the development of our society by responding to the credibility and trust of our stakeholders.
We look forward to your continued understanding, cooperation, and support.