Transformation Period2000 –Creating Business Value — A vision for success in the 21st century

Acquiring ISO14001 Certification

Today, increasingly serious environmental problems including global warming, depletion of the ozone layer, acid rain, deforestation and desertification potentially threaten life on Earth. After the United Nations Conference on Environment and Development (the Earth Summit) held in Rio de Janeiro in 1992, the need to resolve environmental problems on a global scale came under close scrutiny as a key issue.

Under these circumstances, in May 1999, Nagase decided to acquire ISO14001 certification, and established an internal Environment Protection Committee and its secretariat, the Environment Protection Promotion Team.

ISO14001 aims to improve the environment through implementation of companywide environmental management systems that help to protect the environment and prevent pollution. While the primary result of acquiring ISO14001 certification is reducing environmental load, it offers the added benefits of 1) improving the corporate image as an environmentally friendly company; 2) serving as a “business passport” facilitating green procurement and international bidding; and 3) meeting demands from business partners for the use of environmentally sound materials.

On July 5, 1999, Nagase held a companywide kickoff meeting toward certification, which it acquired on April 28, 2000.

Integration of Four Dyestuff Sales Companies to Form Nagase Colors & Chemicals

Dyestuffs have been a core business for Nagase since the company's establishment 175 years ago. The Dyestuffs Division has long been known as Nagase's mother division. However, in recent years the domestic market has continued to shrink due to structural changes in the textiles industry, which comprises the main part of the market, including a shift overseas and increased imports. As a result, although Nagase has maintained the top market share of around 20 percent, the operating environment is severe.

Under these circumstances, in April 2000 Nagase Colors & Chemicals Co., Ltd. (NCC) was established through the integration of four sales companies, Nagase Dyestuffs Sales Co., Nagase Keiji Co., Nagase Tokai Co., and Nagase Techno Color Co., together with the textile processing related business handled by Nagase itself. This move was made to develop a company with a leading presence in the dyestuffs business by promoting clarification of the dyestuffs business strategy and further rationalization.

In addition, NCC established Shanghai Techno Center Co., Ltd. in September 2002. Nagase is developing new business in the Chinese and Southeast Asian markets, where growth continues in contrast with the contracting Japanese market, to promote the expansion of marketing and technology services for dyestuffs processing companies.

A New Start for Nagase ChemteX

On April 1, 2001, Nagase's four main production subsidiaries, Nagase ChemteX Corporation (NCX), Nagase Chemicals (NKK), Teikoku Kagaku Sangyo K.K.* (TKS) and Nagase Biochemical Ltd. (NBL), merged to form the new Nagase ChemteX with ¥2.42 billion in capital, net sales of approximately ¥25 billion, ordinary income of ¥1.7 billion and around 500 employees.

*Nagase ChemteX began in the year 2000 when Nagase made Nagase-CIBA Ltd. a consolidated subsidiary by acquiring all of its shares and renamed it Nagase ChemteX. Also in 2000, Nagase Kasei Kogyo and Nagase Electronic Chemicals merged with Nagase Kasei Kogyo as the surviving entity.

This four-company integration had three objectives. First was the efficient use of business resources, including technologies and facilities. Optimizing the use of business resources to increase efficiency made it possible to offer highly cost-competitive products in order to succeed in the global market.

The second objective was economies of scale. Advantages including lively interpersonal exchanges, joint material procurement and distribution, and calculated concentration of investment in key areas are made possible by increasing economies of scale through operational expansion.

The third objective was organic combination and reorganization of business fields. By achieving this, the new company could expect to generate various synergies.

By establishing Nagase ChemteX to shoulder the core manufacturing function, the Nagase Group has set up a flexible framework that responds quickly to market changes by raising the level of cooperation between sales divisions and the Nagase R&D Center, with the ability to smoothly carry out business reorganizations and combinations.

Pursuing an Ambitious Asia Strategy

Appropriate investment and concentration of manpower in markets with growth potential is necessary for a company's continued existence and development. From this viewpoint, Nagase has concentrated business assets overseas—particularly the in Greater China region including Hong Kong and Taiwan, and the ASEAN market. In spring 2001, President Hiroshi declared net sales targets of ¥150 billion for the Greater China market and ¥100 billion for the ASEAN market, to be reached in fiscal 2006 by expanding exports of not only plastics and electronic materials but also dyestuffs and chemicals, while aggressively investing in local production. As net sales in both markets were around ¥60 billion for the fiscal year ended March 2001, these targets were high hurdles, but Nagase focused all of the group's abilities on the challenge of achieving them.

The success of these efforts translated into target-beating net sales of ¥154.9 billion in the Greater China market in 2005.

Commemorative Dividend and Expression of Gratitude on the 175th Anniversary

In recognition of the 175 years since its founding, Nagase issued a commemorative dividend of ¥2 per share in addition to the regular dividend. Nagase also held a variety of commemorative events to show its gratitude to and share congratulations with employees, shareholders, business partners and the more than 100 Nagase Group companies in Japan and overseas.

A full-page advertisement was published in the Nihon Keizai Shimbun newspaper on June 18, the date of the company's founding. Nagase's main slogan in the advertisement, “Maintain good and fair business practices,” is its management philosophy and has consistently been so from founding to this day.

Amid the changes that took place through the Edo, Meiji, Taisho, Showa and Heisei eras, Nagase has maintained reliable management that always transacts in good faith and adheres to the principle of sincerity, while keeping an eye on technological trends and markets as a trading company based in chemicals. Maintaining this approach, all Nagase's executives and employees are prepared to take the next step toward the future. The advertising slogan condensed these ideas into a single phrase.

The 175th anniversary commemorative advertisement was published in magazines Toyo Keizai, Diamond, THE21, Nikkei Business, WEDGE, Bungeishunju and The Chemical Daily and in the Nihon Keizai Shimbun newspaper, and placed inside the Tokaido Shinkansen's new N700 trains.

Nagase Makes Greater Inroads in the Bio-Related Business

Nagase provides 70 billion yen in funds as sponsor-in-reorganization for Okayama-based Hayashibara, a firm with unique products in the bio-related field; Hayashibara becomes wholly owned subsidiary.

Started as a starch syrup manufacturer in 1883, Hayashibara today produces and sells trehalose (used in food materials), AA2G (a stable form of vitamin C used in whitening cosmetics), and many more unique products. The company specializes in research and development in areas that competitors either cannot or will not pursue. Hayashibara has truly marked its territory on the global stage - a world-leading R&D firm boasting the most advanced technologies in the field.

Moving forward, the Nagase Group will be executing strategies in earnest to create synergies with Hayashibara. Plans call for integrating R&D functions and sales to expand business.

Start of " Change-S2014 " Medium-Term Management Plan

Nagase unveiled its new three-year medium-term management plan, " Change-S2014 ". The basic strategy outlined in the plan is to accelerate the improvement of the quality of our business and operations (Speed Up), to bring the total strength of the Nagase Group to bear throughout the value chain in strategic markets (Step Up), and to create sustained growth (Sustainable growth) by expanding our unique solutions globally. The company believes that these three strategies will lead to sustainable growth for the long term.

The company also reorganized its business segments to better align with the value chain. The new segments (Functional Materials, Advanced Materials & Processing, Electronics, Automotive & Energy, Life & Healthcare) will allow the Group to take maximum advantage of strengths in the bio, environment and energy, and electronics fields.

Kenji Asakura become president and CEO of NAGASE

Hirose Nagase, Chairman (then president, then), inherited Button, to the new NAGASE

Toward the 200th anniversary of the NAGASE Group

The NAGASE Group proactively engage in overseas strategies and challenge to new business areas.
The group has established a set of long-term management policies as a result of the need for a medium-term management plan in line with long-term plan.

NAGASE Group launches Branding project and define NAGASE management Philosophy, NAGASE Vision and NAGASE Way(employee behavioral guidelines) to create a shared awareness within the NAGASE Group.

The company launches its new medium-term management plan ACE-2020

medium-term management plan ACE-2020