The following is a record of Nagase & Co., Ltd. president Hiroshi Nagase’s New Year address for 2011.

I would like to wish all of you a very happy New Year.
It gives me great pleasure to be working with you again in 2011.
In 2010, economic growth in China and other emerging countries became increasingly pronounced, while the stagnation of developed countries became more deeply entrenched. Japan encountered various headwinds, including a rising yen, political turmoil, a declining global presence, and turbulent foreign relations. Japan is being overtaken in industries that have long been its forte, such LCDs and semiconductors, and it seems like other countries are leaving Japan behind both politically and economically as well. Amid the dynamic shift toward a more multipolar world, countries are likely to accelerate their efforts in ways that put their growth, dominance, and perhaps even their survival on the line.
Despite experiencing a mild slowdown since autumn, the Nagase Group is on track to exceed its initial estimates for the fiscal year ending March 2011. This is the third and final year of our current medium-term management plan, “Change” 11, and we will be using this year to develop our next medium-term management plan also. “Change” 11 is aimed at enhancing the quality of our business and operations and transforming Nagase into a more robust entity capable of delivering sustained growth. So how far have we progressed with this transformation? Do you personally feel tangible changes taking place? From my perspective, I feel that you all have a good understanding of the objectives of “Change” 11 and are working hard to achieve them. While changes have not begun everywhere, we are making progress on a number of specific themes with some positive outcomes already emerging. I am very pleased that all of you, both in Japan and overseas, have been working diligently and adhering to our principle of maintaining good and fair business practices.
On the other hand, I also get the feeling that things are progressing slowly for the Group as a whole. At times, we have been tardy to make decisions and spring into action, which has resulted in missed opportunities. It is not that our actions are too slow, but that we are too late in seizing opportunities. The industry, our competitors, and other countries will not wait for us, and we will be left behind if we move at our own pace. We must keep an eye on our goals, our partners and competitors, and the market and continue to make changes if we are to avoid missing out. As we begin 2011, take this opportunity to clearly envision what you are trying to accomplish and clearly recognize what you need to do to achieve it.
While this year will likely be even more volatile than the last, let us continue working together on collaborative efforts, manufacturing initiatives, and other endeavors, both within and outside the Group, to set the stage for a broad range of new businesses.
In closing, I would like to wish all of you and your families a safe and healthy 2011. Thank you for your attention.

Hiroshi Nagase, President
Nagase & Co., Ltd.