December 12, 2024
Mitsubishi Materials Corporation
At the Board of Directors meeting held today (Dec. 11), it was resolved that Managing Executive Officer Tetsuya Tanaka will newly assume the position of Chief Executive Officer (CEO) effective April 1, 2025. Accordingly, I, Ono, will retire as CEO and become a Non-Executive Director.
Our Company has formulated the Medium-term Management Strategy FY2031, with the fiscal year ended March 2024 as the starting point and the fiscal year ending March 2031 as the target. We have established Our Commitment as "For people, society and the earth, circulating resources for a sustainable future" and are working towards making this a reality.
The FY2031 Strategy has designated a three-year period from the fiscal year ended March 2024 to the fiscal year ending March 2026 as Phase 1. The upcoming fiscal year ending March 2026 is the final year of Phase 1 and also a preparation period for Phase 2.
Given the rapidly changing political, economic, geopolitical, and geoeconomic circumstances surrounding worldwide, Phase 2 of the FY2031 Strategy will require us to promptly respond to these changing business environments. I believe that the fiscal year ending March 2026 will be an important milestone towards Phase 2.
From this perspective, we believe it is desirable that a new management team navigate this complex and rapidly changing age, and we have decided to revamp our management team, including the CEO.
Mitsubishi Materials is a Company with a Nomination Committee, and the succession plan and appointment of the CEO have been promoted by the Nomination Committee. Today, we have the Chairperson of the Nomination Committee, Mr. Wakabayashi, and who will later explain the process of appointing the new CEO and the reasons behind the appointment.
As I step down this time, I was appointed as CEO in June 2018. I took over the post in response to the quality issues that arose in the previous fiscal year. Upon assuming the position, I identified three significant issues: insufficient communication in terms of both quantity and quality, a weak compliance and governance system, and inadequate resource allocation. I believed it was essential to address these issues and work towards their improvement as a priority in our management.
To address the issue of inadequate resource allocation, we implemented measures to optimize our business portfolio. This included spinning off the cement business, transferring the aluminum and aluminum cans businesses, polycrystalline silicon business, and the sintered products business. Meanwhile, we invested in the Mantoverde Copper Mine in Chile, and made Onahama Smelter & Refinery a 100% subsidiary to strengthen our resource recycling system centered on copper. In addition, we paved the way for expansion of the tungsten business and tungsten recycling by acquiring H.C. Starck, a Germany-based company that manufactures and sells tungsten powder and engages in tungsten recycling globally. This acquisition provided a solid foundation for the growth of our tungsten business and tungsten recycling. As part of our regional strategy for the resource recycling business, we established Mitsubishi Materials Europe B.V. in Europe, a region known for its advanced resource recycling capabilities. In Japan, we constructed the Appi Geothermal Power Plant to expand the supply of renewable energy, and actively worked to realize Our Commitment.
To improve and strengthen our compliance system, we have been striving to ensure that SCQDE* is our top priority in business execution and to create an organization that can resolve issues autonomously.
*SCQDE is a concept that indicates priorities in business execution. In situations where we are pressed to decide what to prioritize, we will act according to these priorities. (S: Safety & Health, C: Compliance & Environment, Q: Quality, D: Delivery, E: Earnings)
Regarding governance, we transitioned to a Company with a Nomination Committee, in June 2019, and the Board of Directors consisting primarily of Outside Directors.
In terms of communication, we have worked to bridge the gap between upper management and employees by holding Town Hall Meetings and implementing various communication measures. We have also focused on creating an open organization.
On the other hand, regarding performance, I acknowledge that there has been a significant loss due to business restructuring, and overall, the improvement in profitability and capital efficiency is not sufficient, which has also led to stock price slump. Although the Medium-term Management Strategy is ambitious and clearly indicates the direction the Company should take with a focus on resource recycling, I think we have not adequately demonstrated the feasibility of achieving this target.
In August of this year, 16,000 employees from all over the world participated in the establishment of new Our Values that serve as the guiding principles to fulfill Our Commitment. The gist is "We challenge, change, and grow together. We express praise and appreciation to encourage growth, for a better tomorrow."
I expect the new CEO to take the lead in the management team and, by acting in accordance with these new Our Values, enhance corporate value by implementing various measures aimed at fulfilling Our Commitment, improving profitability, and enhancing capital efficiency. I am confident that the Nomination Committee has selected a CEO with strong leadership who can accomplish this.
I would like to explain the selection process for the successor of the CEO conducted by the Nomination Committee (hereafter "the Committee").
Approximately two years ago, in the fiscal year ended March 2023, the Committee requested the current CEO to propose candidates for CEO succession from among the Executive Officers and those in Grade 7 to Grade 6 positions immediately below the Executive Officers. At the same time, we also discussed the possibility of external candidates.
As a result, the Committee concluded that it was reasonable for the Company to select candidates from within the Company rather than from outside the Company.
Subsequently, the Committee held interviews with the candidates from Grade 7 to Grade 6. Based on the interviews, it was determined that candidates in these grades still need some more experience to take on the role of the next CEO, and decided to select several candidates from Executive Officer position.
In the fiscal year ended March 2024, an external organization held interviews with the selected candidates, and the Committee received a report on the evaluation by the external organization.
As a next step, each Committee member held one-on-one meetings with the successor candidates. Subsequently, the current CEO was invited to the Committee to hold hearings with him.
After that, the Committee narrowed down the selection of the CEO successor based on the outcomes of the interviews and the information gathered.
The main reasons for selecting Mr. Tetsuya Tanaka as the successor to the CEO are as follows:
Considering the current situation in our Company, where execution capability and the ability to achieve results are particularly crucial, we have concluded that Mr. Tanaka is well-suited as a leader with high aspirations and passion.
The process of selecting a CEO successor in the Committee and the progress of the process have been appropriately shared with Outside Directors, other than the Committee members, to ensure that there is no information gap.
As for the timing of the CEO change, as previously explained by the current CEO, the Committee has determined that April 1, 2025 is the appropriate date.
Thank you very much for taking the time out of your busy schedule to attend the press conference regarding the change of CEO of the Company. It is a great honor to have this opportunity.
My name is Tetsuya Tanaka, and I will assume the position of CEO of Mitsubishi Materials Corporation from April 2025.
I have been involved with the Metalworking Solutions business for 36 years since joining the Company in 1986. For most of that time, I worked in factories as an engineer involved in product development, production technology, and manufacturing. With the motto of working with ambition and passion, I have always honed our technology with the aim of becoming the world's strongest.
I moved to the Corporate Division two years ago and am currently in charge of governance and sustainability matters as Chief Sustainability Officer (CSuO).
I would like to express my heartfelt gratitude to everyone who has supported our Company over the years, especially our employees, business partners, and shareholders. I would also like to thank the incumbent CEO, Mr. Ono, for his efforts since 2018 to strengthen our Company's governance structure and streamline its business portfolio, thereby solidifying its business foundation. I will do my utmost to further enhance corporate value.
Upon assuming this position, I aspire to achieve sustainable growth for Mitsubishi Materials and to contribute to society. To respond to the needs of society, I aim to enhance our "field capabilities," not only our manufacturing operational capabilities, but also at the sales and development departments, the head office, and all those involved in management. Additionally, I want every employee to fulfill their roles with ownership for the future of the company, thereby competing on a global scale. Furthermore, I intend to make Mitsubishi Materials a company that offers new materials based on nonferrous metals, i.e., products and services that exceed customers' expectations. In other words, I aim to make Mitsubishi Materials a company that creates dreams.
After the collapse of Japan's bubble economy, the Japanese manufacturing industry has faced various problems as a result of placing too much emphasis on efficiency in the name of selection and concentration. However, I believe that Japanese field capabilities are still worth a lot. I believe that Japanese manufacturing has the ability to compete globally thanks to its foundational strengths such as educational standards, motivation, diligence, attention to detail, ambition, and teamwork. In order to overcome the current sluggish situation, I would like to further strengthen human resource development, invest efficiently in research and development, and promote work-style reforms to maximize our on-site capabilities.
By utilizing our Company's smelting technology to recycle metal resources that will be depleted in the future, we will create a resource circulation loop and continue to supply the world with needed metal resources. Using these metal resources, we aim to provide high-performance, high-value-added products and services, in other words, new materials, to contribute to the realization of a prosperous society.
I will focus on the following three points:
Through these efforts, I will achieve sustainable growth and provide value to all stakeholders.
We look forward to your support and understanding as we take on the challenges ahead. Thank you very much for today.
End
Corporate Communications Dept.
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