Mid-term Management Plan

TechnoAmenity for the future-Ⅰ

Nippon Shokubai Group formulated the new mid-term management plan "TechnoAmenity for the future-I" starting in FY2022.
This page summarizes the key points of this mid-term management plan.


Performance Review and Current Status

Nippon Shokubai has always provided high-quality chemical products using its unique technologies. As the customer needs become more complex and the market changes more rapidly, we have striven to not only strengthen existing businesses but also create alternative products and businesses. This has had some success in strengthening the competitiveness of existing businesses, but commercialization of new products and businesses is still underway. Environmental initiatives will also be indispensable in realizing a sustainable society.

The Materials Business is likely to be greatly impacted by the market environment and faces a fiercely competitive environment. For this reason, the challenge for Nippon Shokubai is to escape from our current business structure that relies on the Materials Business. Therefore, we must shift our focus from the Materials Business to the Solutions Business centered upon unique high-value added approaches to overcome the challenges faced by each customer. We will quickly build a foundation to transform into an organization that can provide solutions tailored to each customer issue.

  • * Up to FY2017: Japanese Accounting Standards (Japanese GAAP) After FY2018: International Financial Reporting Standards (IFRS)
Current Challenges
Decline in profitability due to fierce competition in superabsorbent polymer and acrylic acid businesses
Stagnation in revenue and operating profit due to the business structure relying on the Materials Segment

Position and Initiatives
of the Mid-term Management Plan

Position of the Current Mid-term Management Plan

The current mid-term management plan defines the first three years of specific actions (FY2022–FY2024) to solidify a foundation in each of our fields and spearhead various initiatives toward transformations that will accomplish our long-term vision for FY2030.

Achieve FY2030 Goals outlined in the TechnoAmenity for the Future Long-term Vision

Initiatives and Targets through FY2024

Nippon Shokubai will further initiatives to achieve its targets through FY2024 via business, environmental, and organizational transformations.

Business Transformation

Expand the Solutions Business

  • Strengthen solution proposals and concentrate resources on selected markets
  • Expand sales of a strategic product line-up to improve profitability
  • * Strategic products refer to existing products leveraging our strengths planned for expansion of sales in markets expected to grow.

Achieve the Materials Business Resilience

  • Strengthen profitability and improve added value through sustainability initiatives
Strategic Transformation for Environmental Initiatives
  • Contribute to reducing our environmental impact throughout the entire life cycle
Organizational Transformation
  • Realize frameworks able to foster individual and organizational growth

Business Transformation Overview

Nippon Shokubai will strengthen its ability to propose solutions to customers while investing resources into selected markets in an effort to expand the Solutions Business. We will also build a more resilient business structure by strengthening the profitability of the Materials Business and improving added value through promotion of sustainability.

Materials business
The Material Business produces and reliably supplies a large volume of high-quality chemical products via bases in Japan and overseas for use throughout the world.
Solutions business
The Solutions Business proposes unique high-value added solutions capitalizing on Nippon Shokubai research and development capabilities to fulfill customer needs in a wide range of industries.
  • * The figures for FY2021 are the estimated values used when drafting the mid-term management plan.

Expansion and Specific Initiatives of the Solutions Business

Nippon Shokubai is building a platform to vitalize cross-organizational initiatives that will strengthen the ability to make solution proposals.

Platform Building

Select markets to leverage strengths

  • Select markets to leverage strengths
  • Swift and flexible allocation of resources

Enhance our ability to understand customer challenges

  • Select target customers
  • Visualize and share customer information

Strengthen solution proposals

  • Establish and strengthen planning, development, and marketing capabilities
  • Cultivate experts in each market

Establish timely production systems

  • Involve production, technology, and engineering divisions at an early stage to promote development that anticipates commercialization
  • Effectively use facilities within the Nippon Shokubai Group
  • Reinforce equipment compatible with solutions
  • Actively cooperate with outside contractors
Use Digital Technologies
Use Digital Technologies
Expand the Solutions Business

Strengthening Systems

Nippon Shokubai will rapidly build systems to strengthen its ability to make proposals to customers. We will set up Business Planning & Development Departments in Solutions Divisions and focus the investment of resources therein to strengthen the planning, development, and marketing capabilities.

Solutions business

Establish and Strengthen Planning, Development, and Marketing Organization
Focused Resource Investment
Establish and Strengthen Planning, Development, and Marketing Organization

Initiatives in Each Business

We have set the targets below in each business in an effort to strengthen the Solutions Business.

* This table can be scrolled horizontally

  • Industrial & Household
  • Energy & Electronics
  • Life Science
  • Innovation & Business Development

Management Targets

Management Targets

Nippon Shokubai aims to reach record-high earnings in FY2024 through the expansion of the Solutions Business.

The Solutions Business aims to achieve a 35% sales ratio and 50% operating profit ratio in FY2024 as a segment resilient to changes in the external business environment.

Operating profit
Operating profit

* This table can be scrolled horizontally

FY2021 Forecast FY2024 Targets FY2030 Goals
Operating profit 27 billion yen 33 billion yen Approx. of 60 billion yen
Operating profit(excludes surging market prices) 19 billion yen - -
Solutions Business operating profit 8.5 billion yen 17 billion yen Approx. of 40 billion yen
ROE 6.6% 7.5% 9% or higher
ROA 6.4% 6.9% 9% or higher
Total shareholder return ratio 33.4% 50% -
New product Revenue
(Non-consolidated, excluding new SAP products, and launched within five years)
10 billion yen 28 billion yen -
Investments Growth investments and investments to remain competitive - 120 billion yen
(Cumulative total from FY2022 to FY2024)
400 billion yen
(Cumulative total from FY2022 to FY2030)
  • * The figures for FY2021 are the estimated values used when drafting the mid-term management plan.

Capital Policy

Cash Allocation
Cumulative Total for FY2022 to FY2024

Strike an ideal balance of investments to grow and remain competitive with shareholder returns to achieve a 7.5% ROE and 6.9% ROA by the end of the mid-term management plan. (FY2024)

Cash in,Cash out
Cash in,Cash out
Growth Investments
Investments in medium- to long-term growth
  • Expand the Solutions Business
  • Make investments related to sustainability
  • Make investments related to a digital transformation
Investments to sustain and improve the competitiveness of core businesses
  • Achieve the Materials Business Resilience
  • Rebuild plant infrastructure
Return to Shareholders
Provide a stable return to shareholders that balances funding for sufficient investments to grow and remain competitive with the pursuit of capital efficiency
  • Aim to achieve a total shareholder return ratio of 50%
    (40% dividend payout ratio/10% purchase of treasury stock)

What type of company is Nippon Shokubai?

Nippon Shokubai is a company providing chemical products to other businesses. We buy raw materials from petroleum refineries and other companies and provide products to be used as materials such as for daily necessities, automobiles, and coatings. We are proud to hold the top share for the superabsorbent polymers used in disposal diapers as well as acrylic acids, which are one raw material of superabsorbent polymers.

Since its founding in 1941, Nippon Shokubai has been cultivating research and development capabilities as well as production technologies while continuously contributing to the prosperity and comfort of society by providing chemical materials essential to people and society.

What are the challenges and growth potential of the chemical industry?

The business environment surrounding the chemical industry is dramatically changing. Chemical products require even broader functionality with a larger presence on the global stage. A company cannot satisfy the rapidly changing needs of the world with a single-function material. Meanwhile, many companies and organizations are also driving forward initiatives to achieve carbon neutrality by 2050.

This trend creates a major opportunity for Nippon Shokubai as a company delivering various materials and technologies. We aim to foster even greater corporate growth by solving social issues through our products and technologies.

What are the Materials Business and the Solutions Business?

Nippon Shokubai has revised its external reporting business segments to the Materials Business and the Solutions Business as of FY2022.

The Materials Business mass-produces and provide a stable supply of high-quality materials to businesses around the world. The Materials Business deals in superabsorbent polymers and acrylic acids, which are main products of Nippon Shokubai.
The Solutions Business capitalizes on the research and development capabilities cultivated by Nippon Shokubai to provide unique solutions to overcome the problems that customers face. The ability to fully understand the needs and challenges of customers and propose optimal solutions creates new added value.

What does the mid-term management plan aim to achieve?

The new mid-term management plan transforms our existing portfolio that focuses on the Materials Business and expands the Solutions Business, which has high earnings potential. In FY2024, the final year of the plan, we aim to reach the record-high earnings of 33 billion yen while increasing the operating profit ratio of the Solutions Business to 50%.

Numerical Targets

FY2021 Forecast*1 FY2024 Targets
Operating profit 19.0 billion yen*2 33.0 billion yen
ROE 6.6% 7.5%
ROA 6.4% 6.9%
  • *1 Values estimated when drafting the new mid-term management plan
  • *2 Operating profit excludes surging market prices

The "TechnoAmenity for the future" long-term vision announced in April 2021 lays out our long-term vision for FY2030. Therein, this new mid-term management plan is positioned as the first three-year plan to solidify a foundation and execute transformations to achieve FY2030 Goals.

What obstacles does the mid-term management plan face?

Nippon Shokubai must uncover and propose integrated solutions to the latent challenges faced by customers in order to further develop the Solutions Business. To do this, we will establish Business Planning & Development Departments in Solutions Divisions, link digital marketing and R&D organizations, and carry out planning, development, and marketing activities across the entire organization. Nippon Shokubai will also invest management resources with focus on businesses in growth fields. Moreover, we will restructure the R&D organization and strengthen research and development functions to achieve carbon neutrality.

What initiatives will the mid-term management plan take toward sustainability?

Carbon neutrality by 2050 does not only create a challenge for Nippon Shokubai but also new business opportunities.
We emphasize research and development activities to develop materials and technology that can help reduce greenhouse gas emissions by expanding battery and hydrogen use, as well as gain the technology necessary to reduce our environmental impact, such as technology to collect and recycle carbon dioxide. Our use of bio-based raw materials and renewable energy as an alternative to traditional petrochemical-based materials is another initiative to reduce carbon dioxide emissions throughout the entire supply chain.

Click here to see our environmental conservation initiatives.