Welcome Message

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, ultimately expanding into the fine chemicals field.
And throughout our nearly century-long history, our constant mission has been to solve social issues and contribute to the creation of truly abundant society through monozukuri (manufacturing).
We continue to pursue this founding philosophy, aspiring to Become a Specialty Materials Company contributing to the realization of a sustainable society, as we state in our long-term VISION 2030. We will strive as a united Central Glass to achieve the targets of the new medium-term management plan, launched in FY2025.
You can count on the Central Glass Group to sow the seeds of the future through the power of chemistry, innovative materials, and creative technologies.

New Medium-Term Management Plan Based on Structural Improvements

We are improving our structure by withdrawing from low-profit businesses, strengthening our business earnings base by reorganizing our portfolio, and reinforcing our financial foundation.
First, there is the Glass segment, which has been our traditional core business and which has been operating at a loss since 2007.
To improve profitability, we made the decision to withdraw from certain businesses and reduce production to match demand in other businesses in this segment. In 2022, we completed the withdrawal from the unprofitable overseas automotive glass business, and we have been transitioning in Japan to a new structure that will support stable earnings. The glass fiber business, another Glass segment business, faced the headwinds of declining automobile production, but remained solidly profitable through a focus on product lines where we could best leverage our strengths. As we continue to make these structural improvements, we have been improving our overall business portfolio. We see Medi-Chemicals, Energy Materials, and Electronic Materials as the three pillars of the Chemicals segment. At the same time, Specialty Products, which we expect will create new value and business models, represent the focus of research and development. Meanwhile, we categorize stable core products that serve as the foundation for earnings as Essential Products, making it a point to move forward with both Specialty Products and Essential Products in parallel.
We posted strong financial results under this policy in FY2022 and FY2023. However, in FY2024, demand for electrolytes for EVs (electric vehicles), which had been growing, declined due to a variety of factors. As a result, the energy materials business decreased sharply by about 5 billion yen on a profit basis, falling into the red.
Results for FY2024, the final year of the previous medium-term plan, fell short of the financial targets of 14.0 billion yen in operating profit and 12% ROE. However, FY2022 and FY2023 results for operating profit were in excess of 14.0 billion yen for the two consecutive years, as we captured robust demand in the energy materials business, electronic materials business, and other businesses under the Chemicals segment. We more than doubled operating profit when comparing the three years of the previous medium-term plan with the three years prior to that plan. This improvement was the result of a major portfolio reorganization, including structural improvements in the Glass segment.
We have a track record of achieving V-shaped recoveries quickly after a downturn in performance due to social or market changes. This was the case in the wake of the COVID-19 pandemic, as well as the Lehman Brothers collapse before that. By keeping the seeds of our research and development warm and ready to go, we create new revenue-generating businesses smoothly, leading to this V-shaped recovery.

A New Medium-Term Management Plan in Two Phases Toward VISION 2030

In FY2025, we began executing a new medium-term management plan, which includes the year in which we plan to achieve VISION 2030. Our vision is to Become a Specialty Materials Company contributing to the realization of a sustainable society. To achieve this vision, we intend to strengthen the foundation of our business through the promotion of human capital management, response to environmental issues, and promotion of utilization of digital technology. As the second pillar of this business strategy, we will expand Specialty Products and strengthen Essential Products on our way to achieving operating profit of 20 billion yen and ROE of at least 10% by FY2030. The roadmap to achieving these goals forms the framework of the new medium-term plan.
We divided the new plan into two phases, Phase 1 and Phase 2. Phase 1 runs from FY2025 to FY2027, a time in which we will be learning from the future, seeking higher heights, and powering up. This process will solidify and strengthen our foundation for growth. The subsequent period between FY2028 and FY2030 is Phase 2, which states that challenges are the gateway to a higher stage. In this phase, we will deliver solid results, aiming for the VISION 2030 target of 20 billion yen in operating profit.
We recently changed the disclosed segments to enhance disclosure of these results and other information. Formerly, we disclosed information for the Chemicals segment and Glass segment. In FY2025, which is also the first year of the new medium-term management plan, we divided the Chemicals segment into Electronic Materials, Energy Materials, and Life & Healthcare, resulting in five disclosure segments.
A major point of the new medium-term plan and the crux of Phase 1 is the recovery of the electrolytes business. This business has been sluggish due to the decline in EV demand, and we intend to grow the business (investment strategy) going forward. To this end, we must accomplish three things. The first is to acquire major customers in the electrolytes business who have promising futures and a strong position. Today, we still have some of the world's best companies as clients, and we will continue to grow our business with these clients. The second is to expand our Energy Materials business in China. Initially, we entered the Chinese electrolyte market directly. At a certain point, we could no longer come to terms with the competition and the market turmoil. At that point, we decided to sell licenses to our technology. Our superior technology has been recognized by the market, and we have already signed contracts with several companies. Chinese companies are predominant in Europe, and we believe we can approach the European market through the Chinese.
To this end, we have already taken several steps, and along with the recovery of the EV market, the Energy Materials business is on its way to a V-shaped recovery. Our plan is to return the business to profitability in FY2026 and reach operating profit of 3.0 billion yen in FY2027.

Investing Actively in the Seeds of Next-Generation Earnings

The third element to accomplish our goals is investment strategy. We intend to implement an aggressive strategy of allocating management resources in a balanced manner to strengthen foundations for growth (Phase 1) and trace a trajectory for substantial growth (Phase 2).
We adopted ROIC management under the new medium-term management plan to trace a clear path toward a growth trajectory. Return on invested capital (ROIC) is a financial indicator that measures how much profit is generated on the capital invested. We established an ROIC of 6.1% in Phase 1 and 7.0% in Phase 2.
The investment strategy of the new medium-term plan is to invest in growth businesses, with products for semiconductors in Electronic Materials leading the way. While we are not in the semiconductor-related stock classification in the capital markets, the reality is that our semiconductor products contribute significantly to our profits, and our semiconductor product line will be a driving force in the future. Research and development related to semiconductor materials and components is leading to increasing miniaturization and significant reductions in power loss. SiC power semiconductors are gaining attention as key devices for energy efficiency, and in response, the total investment for Phase 1 and Phase 2 of our new medium-term management plan will exceed 100 billion yen. Of that amount, we plan to invest 37 billion yen in growth areas, including Electronic Materials, to lay the foundation for achieving VISION 2030.
Besides the electronic materials field, we will focus on developing non-plastic coated fertilizer to contribute to sustainable agriculture and food security. Currently, problems surrounding rice production are becoming more serious. Due to the aging and shortage of farm laborers, the number of rice fields for planting rice is decreasing rapidly. Rice is a critical part of Japan's food security, and we want to provide labor-saving fertilizers properly suited to Japan's agricultural environment. We want to help farmers increase productivity, while at the same time providing environmentally friendly and sustainable fertilizers that solve the issue of microplastics. That is why we have developed a non-plastic coated fertilizer that we intend to launch in the future. We will begin actual trials in the rice paddies this year and over the next few years, investing on a scale that will eventually allow us to mass-produce.
We are also in the process of sowing the seeds for major revenue sources in the next generation, including a product called cell sheets that will function as a gateway to the life sciences. Research and development is at the core of our manufacturing, and we will continue to invest in the development of a wide range of seeds as important momentum for future businesses.

Sustainability is an Integral Part of Central Glass

ESG management is the very management foundation that underpins the Central Glass businesses, as our Purpose is to contribute to a sustainable society.
We develop and seek practical applications of environmentally friendly products and technologies, including the development of carbon-negative materials, the recycling of fluorine waste, and the recycling of glass used in solar battery panels. It is essential that we go beyond CO2 credit trading to technologies and products that actually reduce CO2 emissions. We believe that our technologies will contribute to the preservation of the global environment in practical ways.
We have been dealing with environmental issues in earnest, including achieving our 2030 GHG* reduction target ahead of schedule in 2022. In 2023, after discussions in our internal
Sustainability Committee and other meetings, we formulated a plan for materiality that includes measures to address environmental conservation. In conjunction with the new medium-term management plan, we have once again established the materiality of environmental impact reduction, and we will pursue efforts to achieve our goals in this area.
We also pursue Digital Transformation (DX), and we plan to increase investments in DX during the course of the new medium-term management plan. DX initiatives are essential to improve operational efficiency and productivity to cope with the shortage of human resources due to the declining workforce. DX is also critical for ensuring the accuracy and reliability of data. We are already in the process of revamping our ERP system, and we will use the results as a foothold to develop an environment for DX. We plan to invest more than 10 billion yen in digital-related investments in Phase 1 and Phase 2 cumulatively. We aim to increase profits by 2.0 billion yen in FY2030 as a return on investment.
We will also strengthen governance. At the recent annual general meeting of shareholders, we transitioned to a Company with an Audit and Supervisory Committee. The role of the Board of Directors will be more closely aligned with monitoring, allowing for speedy business execution, with the results and details reported back to the Board. The Board will conduct discussions that contribute to improved corporate value over the medium to long term. Traditionally, the final decision-making body for companies organized with a Board of Corporate Auditors is the Board of Directors, which usually results in slow decision-making. We have changed the relationships of our organization to shorten decision-making, but we will still insist on proper supervision. We increased the ratio of outside directors to a majority of 60%, strengthening governance further. The Company reached a ratio of 20% female directors with the appointments of two women.

1. Greenhouse gas

Creating Environments That Are a Joy to Work In

Who will be responsible for implementing these plans and strategies? Every employee of the Central Glass Group. We believe that human resources are our greatest management resource and the key driver of growth. We pursue human capital management in support of the growth of our people, who will continue to enhance our corporate value. To maximize the value of our human resources and to increase employee satisfaction, motivation, and productivity, we intend to increase investment in human capital in five areas that include strengthening human resources development, increasing employee engagement, and improving working styles and working environments.
Our goal in human capital management is to be a company that is a joy to work for. We want to be a company in which every employee works diligently, pursuing their own goals and sense of mission. We want to be a company where employees look forward to the workday. To this end, we are engaging in direct dialogue with employees, while relocating offices and reconstructing buildings on plant sites. We plan to revamp our ERP and pursue DX to change the way we do business, making a more efficient and robust organization. Improving the work environment and sharing our aspirations in monozukuri will bring management and employees closer together. In this environment, both management executives and front-line employees will feel freer to challenge themselves. It will be a joy to work and to see the results of that work at each level. And tomorrow, we all will redouble our efforts. This is the kind of company we aspire to be.

Human Capital Management Initiatives

A Company That Inspires Excitement

• This message is from Top Message, an integrated report published in September 2025.

Representative Director, President & CEO