News

I would like to extend warm greetings for the New Year as we begin 2026.

We have implemented a variety of measures thus far in the fiscal year ending March 2026, which is the final year of Phase 1 of our Medium-term Management Strategy FY2031. However, the business environment in which we are operating has changed dramatically, with activity in the semiconductor and automotive industries falling below our initial expectations, and substantial decreases in TC/RC (smelting margins) seriously impacting our businesses. It is against this backdrop that we find ourselves at a crossroads, where we are being forced to radically review our business models. The story is different when we look at our opportunities; as the world continues to move away from carbon and become more digitized, long-term copper demand is expected to increase, but because there is a limit to the available supply of copper concentrates, the importance of recycled raw materials, including E-Scrap, will only continue to grow. In Europe and the U.S., E-Scrap generation is anticipated to continue to outstrip processing capacity, and as various actors seek to further enclose the markets for critical minerals, there is a need for processing systems located in the regions where E-Scrap is being generated. Our company boasts world-class E-Scrap collection and processing capabilities and technological expertise, as well as a value chain stretching from home appliance recycling to copper and copper alloy products, which gives us the strengths we need to fully leverage these opportunities.

Last year, in response to these external conditions, we formulated and announced a new Medium-term Management Strategy for the fiscal year ending March 2027 and beyond, applying the strengths we have cultivated throughout our history. Grounded in this Strategy, we will continue to transform ourselves into a company committed to "creating the future through resource circulation." Rather than merely maintaining the status quo or seeking marginal growth along current trends, we aim to transform ourselves, demonstrate our strong determination to support the sustainability of both industry and society as a whole, make optimal use of limited resources, and balance social and economic value by converting waste products into a source of new value.

Specifically, we will accelerate the global expansion of our resource circulation business through initiatives such as establishing new secondary smelting plants in Europe and the United States, at the same time, we aim to double our E-Scrap processing and achieve a 100% tungsten recycling rate, among other goals. In addition, we will continue advancing our fundamental structural reforms in order to accelerate the transition of our management focus from quantity to quality. In addition to scaling back our copper concentrate processing, consolidating our production bases, and strengthening our international competitiveness in the area of copper concentrate smelting through purchasing copper concentrate jointly with other companies, our head office will support these initiatives and promote consolidation of functions and business reforms, creating a lean organization that strongly supports business growth. While these initiatives will be far from easy, we will implement them swiftly and surely.

Regarding our capital allocation, we will maintain financial discipline while prioritizing the allocation of funds derived from operating cash flow and business sell-offs, etc. toward growth investments, centered around our resource circulation business. While we will be concentrating most of our management resources on secondary smelting and other aspects of our resource circulation business, it is essential for all of our departments to continue to work together in unity, as our Carbide Products, Advanced Products, Resources, and Renewable Energy businesses, as well as our Corporate Division, each continue to play important roles. We are working to increase profitability in our Carbide Products and Advanced Products businesses, developing them into sources of steady cash generation to support our company as a whole. These businesses will also play a critical role in accelerating our company's growth by providing new materials to underpin products and services that exceed customer expectations. Our Resources business is indispensable to our efforts to build a revenue base that remains stable even in a low TC/RC environment, through stable procurement of copper concentrates and increasing the profitability of our existing interests. Our Renewable Energy business will play a central role in reaching a 100% renewable energy self-sufficiency ratio and the achievement of a decarbonized society. Finally, in order to promote the growth of our businesses, each of the departments in our Corporate Division must continue to further enhance the quality of its operations and work to encourage transformation.

The driving force that motivates our company is none other than people - that is to say, each of you. It is times such as these, when we are forced to significantly transform ourselves in order to adapt, that test the strengths of each and every one of us. I want each of us to continue to work with ambition and passion as we aim to become the best in the world. I myself constantly question whether the work that I am doing is the best in the world, as I continue to strive to achieve more. I would like to encourage each of you to take this opportunity to reflect on your work, and to embrace ambition within your role, passionately striving to achieve our transformation into a company committed to "creating the future through resource circulation," and that you would also continue the work of keeping Our Commitment: "For people, society and the earth, circulating resources for a sustainable future." I am confident that if all of us act with a sense of ownership, we can further enhance our "Genba-ryoku" (frontline capabilities), not only at manufacturing sites, but also in our sales and development departments and in the various departments at the head office, which will provide us with the strengths we need in order to compete on a global scale.

2026 marks the launch of our new Medium-term Management Strategy, and the beginning of the journey towards our future as a company. I invite all of you to join me as we work in solidarity to pave the way for this new future.

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