Message from the President

A year ago, I became the first President of Mitsubishi Gas Chemical Company, Inc. (MGC) to be selected from the research and development career track. During the past year, while spearheading reforms to advance MGC’s R&D methods and reinvigorate customer relationships, I have frequently been involved in direct on-site business activities. Having entered the second year of my tenure, I can now perceive that these endeavors are beginning to yield positive results. Since starting out as a researcher, I have gained on-site experience in roles ranging from R&D, commercialization to manufacturing, in addition to being involved in corporate planning. This career journey, I believe, has equipped me with unique strengths in terms of employing a broad perspective as a business manager without favoring any particular business unit.

That said, in fiscal 2025 MGC recorded a net loss for the first time in 13 years. This was caused by the massive impairment losses posted by an MXDA manufacturing subsidiary in the Netherlands, primarily due to the termination of plant construction. As a member of top management, I take this setback seriously and am determined to strengthen investment discipline and upgrade our governance structure while swiftly building the systems needed for data-driven decision-making.

For MGC, making incremental improvements and building on conventional operations is not enough to achieve genuine reform. Amidst disruptive changes in market conditions and technologies, MGC could easily be overtaken by competitors should it rely solely on the existing growth model. Our competitors in China and India are especially active, pushing ahead with R&D and expanding production capacity at a pace that exceeds our estimates. Should we continue to compete against them on the same field, they will catch up, sooner or later, and overtake us. This is fueling a deep sense of urgency, and it is exactly why we must push ahead with genuine structural reforms. These reforms also hinge on determining what value we hope to deliver to society. And from this ideal, we need to backcast to identify the businesses and technologies we need based on a company-wide perspective.

Transitioning to a “market-out” approach will be key to achieving this end. The “market-in” approach, which designs products to meet clearly defined customer requirements, typically invites numerous competitors and ceaseless price competition. In contrast, the “market-out” approach is a forward-looking approach that helps customers identify latent issues that they have yet to discover. Working with them, we then articulate each issue from the perspective of chemistry to define and create entirely new markets. The “market-out” approach is thus capable of forming and developing a market suited to MGC. In the optical materials and electronics materials businesses, we have already seen positive outcomes by stepping into the customers’ design process in the course of our development activities. With each visit to a customer site, our staff responsible for these activities are striving to identify issues facing our customers at early development stages. I am personally engaged in intensive discussion with staff at R&D and other business divisions to foster a corporate culture that encourages such efforts. Moreover, we are enabling our researchers to allocate more time to customer engagement by leveraging DX and RX via the use of AI, statistical analysis and other technologies to promote the automation of experiments.

We are also pushing ahead with the reform of our business portfolio by focusing on the three key areas of “ICT / mobility,” “medical / food” and “energy and climate change” while remaining ever cognizant of what we aim to achieve over the short, medium and long term. We believe “ICT / mobility” will remain our earnings pillar and, therefore, we plan to continue marketing our BT materials, optical polymers and other products, with the expectation they will serve as sought-after materials for the next generation and beyond. Meanwhile, the area of “medical / food” holds great social significance, as well as clear potential for sustained demand growth alongside global population growth. We will develop our operations in this area into a new growth driver through investment and external collaboration. In the area of “energy and climate change,” we will contribute to the establishment of social infrastructure over the long term. To this end, we will be involved in such initiatives as geothermal power generation and Carbopath™, an eco-friendly circular economy platform designed to recycle CO₂ and waste to create energy and materials through methanol production.

Since its founding, MGC has unwaveringly focused on honing its technologies. While we possess distinctive technologies and products, we also need to discern which ones genuinely set MGC apart from others in terms of resolving the issues facing customers or contributing to society. When it comes to determining business and product solutions, we believe that the right answer can only be found through engagement with customers, not internal discussions. Looking ahead, we will further advance the ROIC management we have promoted since fiscal 2021 as we embark on data-driven management that comprehensively consolidates the data gleaned across all of MGC’s businesses and functions to establish a structure capable of making swift, objective judgments regarding business withdrawal or continuation. Instead of being content with what we already have or can accomplish, we will decisively execute company-wide structural reforms so that we will both enhance our earnings power over the short term and support society over the long term. In these ways, we will achieve sustainable growth.

We ask our shareholders and investors for their understanding of MGC’s earnest endeavors to achieve reforms. We are grateful for your ongoing support of our operations.

Yoshinori Isahaya
President and Representative Director
August 2026