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Long-Term Vision /
Medium-Term Business Plan(Overview)

Nippon Soda Group
Long-Term Vision
“Brilliance through Chemistry 2030”
FY 2021/3–FY 2030/3

Vision of Nippon Soda Group

Since its establishment in 1920, Nippon Soda has provided new value to society through chemistry and contributed to the development of society.
The Group will supports people's everyday lives by delivering a range of chemical products and services to the agricultural, healthcare, environmental, and ICT fields.

Mission of the Nippon Soda Group

Create New Value through the Power of Chemistry and Increase Corporate Value by Contributing to Society.

Long-Term Vision “Brilliance through Chemistry 2030”

  • While accelerating the expansion of our high-value-added businesses and the liquidation of unprofitable businesses, we will promote thorough management streamlining and reform our business portfolio to be resilient toward changes in the business environment and to produce stable earnings.
  • While balancing growth investment and shareholder returns, we aim to increase capital efficiency.

Our Vision for 10 Years Ahead KPIs for FY 2030/3 (Partially Revised in May 2025 )

We will aim for management that prioritizes capital efficiency as we strive to improve our corporate value.

ROS
(Operating Profit on Sales)		 10% or more (FY 2020/3: 5.6%)
ROA
(Operating Profit on Assets)		 7% or more (FY 2020/3: 3.8%)
ROE
(Return on Equity)		 10% or more (FY 2020/3: 4.8%)
↑
Re-revised from “8% or more” formulated and announced in February 2020 and “12%” revised in May 2023.

Basic Strategy

Through growth investment that emphasizes ROI and thorough structural reforms,
“Transition to a Highly Efficient Business Structure—Raise Our Profit Efficiency to More than Double the Current Level”

Enhancement of Cost Competitiveness and Efficiency
  • Move forward with the expansion of high-added-value businesses and liquidation of our unprofitable businesses
  • Thoroughly enhance management efficiency (management, research, production, sales, supply chain)
Expansion of Overseas Businesses
  • Promote the expansion of existing businesses and market development for new products and businesses
    • Overseas sales ratio: FY 2025/3 result: 36.3%
  • Examine partnerships with other companies
Promotion of New Product Development and Entry into New Businesses
  • Work to increase the sophistication of our core technologies by enhancing and combining our proprietary technologies and creating synergy with external technologies, and actively invest resources
  • Create new businesses for customers in the 2020s and beyond

Current Progress and Future Initiatives of
Long-Term Vision

Current Progress of the First Five Years (FY 2021/3 to FY 2025/3)

Overview

  • Profit margins improved through expansion of high-value-added businesses and business portfolio transformation, significantly exceeding the numerical targets set in Medium-Term Business Plan Stage I.
  • Proactive growth investments in products and businesses to enhance cash flow generation capability progressed as planned.
  • Achieved the dividend payout ratio target of 40% in Medium-Term Business Plan Stage I and the total return ratio target of 50% or more in Stage II.

Key Achievements

Expansion of High-Value-Added Products
  • Three new agrochemicals (fungicide "PYTHILOCK", acaricide "DANYOTE", and fungicide "MIGIWA")
    Overseas development have been promoted and applications have been expanded.
  • Pharmaceutical excipient "NISSO HPC"
    Sales have expanded due to growth in the pharmaceutical market and response to increasingly sophisticated quality requirements.
  • Semiconductor KrF photoresist material "VP-POLYMER"
    Sales for automotive semiconductors and high bandwidth memory (HBM) for generative AI have been steady.
  • Resin additive "NISSO-PB"
    Sales have grown for copper-clad laminates (CCL) used in AI servers.
  • Color developers for thermal paper
    Sales of non-phenol color developers for thermal paper have grown.
Growth Investment
  • Completed the expansion of production facility for pharmaceutical excipient "NISSO HPC": ¥5.0 billion
  • Completed the mass production facility for new fungicide "MIGIWA": ¥5.5 billion
  • Completed the expansion of production facility for semiconductor material "VP-POLYMER": ¥2.5 billion
  • Capital and business alliance with Kyulux, Inc.
Business Liquidation
  • Dissolved the equity-method affiliate that manufactures and sells herbicides
  • Discontinued the caustic potash electrolysis-related business
  • Transferred all shares of Alkaline S.A.S., a consolidated subsidiary that manufactures and sells metallic sodium and chlorine
  • Terminated the production of phenol-based color developers for thermal paper
  • Decided to discontinue production of chlorine-based disinfectant "NISSO HI-CHLON"
Improvement of Capital Efficiency and Shareholder Returns
  • Continuously implemented liquidation of cross-shareholdings
    FY 2019/3: 52 stocks → FY 2025/3: 25 stocks
  • Flexibly implemented share buybacks and canceled all acquired shares
    February 2020 - October 2020: ¥5.0 billion
    February 2021 - June 2021: ¥2.0 billion
    November 2023 - March 2024: ¥2.0 billion

Unexpected Factors

  • Implemented shipment adjustments due to forward buying of agrochemicals caused by logistics disruptions after the COVID-19 pandemic, which led to increased distribution inventory
  • Recorded extraordinary losses due to the Noto Peninsula Earthquake
  • Terminated production at Mizushima Plant (due to difficulties in raw material procurement).

Current Progress of KPIs (FY 2025/3)

ROS
(Operating Profit on Sales)		 10.4% (FY 2020/3: 5.6%)
ROA
(Operating Profit on Assets)		 5.6% (FY 2020/3: 3.8%)
ROE
(Return on Equity)		 8.0% (FY 2020/3: 4.8%)

Initiatives for the Next Five Years (FY 2026/3 to FY 2030/3)

Basic Policy

  • Transform into a structure that is resilient to changes in the business environment and generates stable earnings through expansion of high-value-added businesses and thorough management efficiency.
  • Aim to create new value through new businesses.
  • Enhance capital efficiency through growth investments and shareholder returns to improve corporate value and shareholder value.
  • Introduce a new capital policy, aiming for early realization of PBR exceeding 1.0.
Expansion of High-Value-Added Business Further expansion of growth driver products
  • Three new agrochemicals, pharmaceutical excipient "NISSO HPC", photoresist material "VP-POLYMER", resin additive "NISSO-PB"
Creation of new businesses
  • Organic EL business:
    Organic EL light-emitting material "TADF"
  • Animal Health business:
    New veterinary pharmaceuticals and supplements
Investment in growth businesses
  • Growth investment ¥30.0 billion
  • R&D expenses ¥40.0 billion
Enhancement of Management Foundation Measures against declining working-age population:DX and human capital investment ¥10.0 billion
  • Establish a system by FY 2030/3 that can respond to a 10% reduction in personnel in anticipation of the declining working-age population.
  • Promote DX in research fields and smart factory concept
  • Implement new personnel system linked to the long-term vision
Strengthening the foundation of existing businesses:Maintenance and renewal investments ¥30.0 billion
  • Maintenance and renewal investments and building optimal production systems
Startup investments, business alliances and M&As
  • Promote external introduction of priority technologies (cultivation technologies, peptide application technologies, organic metal application technologies, flow synthesis technologies, AI/MI technologies)
  • Enhance and expand existing businesses and peripheral business areas
Improvement of Capital Efficiency and Shareholder Returns Reform of balance sheet
  • Reduction of inventories, liquidation of cross-shareholdings
Interest-bearing debt financing
  • Optimize capital structure by enhancing financial leverage
Shareholder returns
  • Introduction of progressive dividend policy
    • Except in cases where external factors significantly negatively impact business performance
  • Treasury share acquisitions
    Flexibly implement considering optimization of capital structure and stock price conditions
    Continue the total return ratio of 50% or more

Capital Allocation (5-year total for the next five years)

Cash In

Operating cash flow (before R&D expense deduction)
Reduction of inventories
Improvement of inventory turnover ratio (aim for 4.0 times by FY 2030/3)
Liquidation of cross-shareholdings
Aim for net asset ratio of less than 10% at an early stage and less than 6% by FY 2030/3
Financing
Enhance financial leverage through interest-bearing debt financing

Cash Out

Growth investments: ¥30.0 billion
Expansion of growth driver businesses
New business investments (Organic EL light-emitting material "TADF")
R&D expenses: ¥40.0 billion
Creation of new businesses (Organic EL business, Animal Health business)
Flexible allocation
Startup investments, business alliances, and M&As that contribute to corporate value enhancement
Enhancement of management foundation: ¥10.0 billion
Establish a system by FY 2030/3 that can respond to a 10% reduction in personnel as a measure against declining working-age population
Maintenance and renewal investments: ¥30.0 billion
Strengthening the foundation of existing businesses, building optimal production systems
Shareholder returns
Introduction of progressive dividend policy
Treasury share acquisitions
(Flexibly implement treasury share acquisitions considering optimization of capital structure and stock price conditions)

Target of
Current Medium-Term
Business Plan:
Brilliance through Chemistry Stage Ⅱ
(FY 2024/3–FY 2026/3)

Position as “core stage for reform into a highly efficient business structure” and execute various measures to enhance corporate value.

Basic Objectives

  • Enhance corporate value through expansion of high-value-added businesses, and structural reform and growth investments that focus on asset efficiency.
  • Establish and sophisticate core technologies by promoting research technology strategies, and promote the creation of new businesses.

Capital Policy

  • Proactively implement policies that focus on the balance between growth investments and shareholder returns while considering financial soundness.
Growth Investment Implement investments in products and businesses which increase our cash flow generation capability.
  • Use ¥40.0 billion over three years for new businesses, increasing production capacity and capital investment for maintenance and renewal.
  • Promote business alliances and M&As to enhance and expand existing businesses and peripheral business fields.
Increase Capital Efficiency Focus on investment efficiency and appropriately control the balance sheet.
  • Liquidating products and businesses with decreased investment efficiency and conduct thorough investment risk assessment properly.
  • Continue to implement liquidation of cross-shareholding.
Shareholder Return Policy
  • Continue stable dividends with a total return ratio target of 50% or more.
  • Implement share buybacks flexibly as a shareholder return policy to complement dividend payments.

Numerical Targets

  • Despite the materialization of factors for increased costs, such as rising raw material and fuel prices, we will establish increased profitability in Stage Ⅰ, which will lead to increased revenue in Stage Ⅲ, by promoting the continuous improvement of efficiency in each department.
    Medium-Term Business Plan Long-Term Vision KPI
Stage Ⅰ Stage Ⅱ
FY 2023/3
Results		 FY 2024/3
Results		 FY 2025/3
Results		 FY 2026/3
Targets		 FY 2030/3
Targets
Net Profit(Billions of yen) 16.69 16.61 15.01 17.0  
Capital Investment(Billions of yen) 13.26
(34.08/3 years)		 7.48 10.31 40.0
/3 years		  
Shareholder Returns(Billions of yen) Dividends*(yen) 120 120 140    
Dividend Ratio(％) 40.1% 40.2% 51.4%    
Purchase of
Treasury Shares(Billions of yen)		 0 2.0 0    
Total Return Ratio(％) 40.1% 52.1% 51.4% 50% or more  
ROE(％) 10.3% 9.3% 8.0% 10％ 10％*
ROS(％) 9.8% 9.0% 10.4%   10% or more
ROA*(％) 6.8% 5.1% 5.6%   7% or more
  • *Dividends are calculated based on the post-share split basis following the share split conducted on October 1, 2024.
  • *ROE was re-revised in May 2025 from "8% or more" announced in February 2020 and "12%" revised in May 2023.
  • *Operating profit on Assets (ROA): Operating profit ÷ Total assets

Action Plan

Chemical Materials
  • Implement measures to further expand sales of existing products in the healthcare and ICT fields, where growth is remarkable.
    1. (1)Healthcare Field
      • Accelerate sales expansion of the pharmaceutical excipient "NISSO HPC“ by targeting the expanding global pharmaceuticals market.
      • The launch of new pharmaceutical excipients and expansion of related businesses.
    2. (2)ICT Field
      • Sales expansion of photoresist material “VP-POLYMER”.
      • Promote development and expansion of sales of functional polymers for electronic materials.
  • Work to develop peripheral fields for pharmaceutical excipients, functional polymers, etc.
  • Aim to create new businesses to replace those withdrawn Stage Ⅰ.
Agri Business
  • Promote the expansion of sales of three new agrochemicals developed in-house (fungicide “PYTHILOCK”, acaricide “DANYOTE” and fungicide “MIGIWA”).
    • Promote overseas development and aim for sales of ¥10.0 billion for the three agrochemicals by 2026.
  • Implement measures to maintain and expand sales of existing products and enhance profitability.
    • Promote measures to expand applications and for generic competition, and maximize profits.
  • Strengthen response to smart agriculture and integrated pest management (IPM), and work to strategically expand agriculture-related peripheral fields.
Other Businesses
  • Enhance the corporate value of the entire group by promoting business activities that utilize strengths
  • Work to efficiently use the Group’s management resources by strengthening cooperation between each of the Group companies
R&D・Production Technology
  • Steadily execute research technology strategy “Brilliance through Chemistry 2030”.
    • Work to establish and sophisticate core technologies, and make them the driving force of growth strategies.
    • Create new businesses by FY 2030/3, which is the final year of the long-term vision.
  • Work to move to the next phase at an early stage for full-scale development of pipeline agrochemicals currently under development.
    Aim for commercialization of new materials in the ICT field.
  • Create a highly efficient production structure by strengthen synergy between manufacturing process knowledge and manufacturing know-how, and creating a framework for streamlining work and saving labor.
Initiatives for Environment and Enhancement of Human Capital
  • Aim to realize a sustainable society and enhance corporate value by reducing the environmental burden rising from business activities and continuously developing our businesses.
    1. (1)Response to Climate Change*
      Toward achieving carbon neutrality by 2050, we aim to achieve the following GHG emission reductions:
      • By FY 2026/3: 20% or more compared to FY 2014/3)
      • By FY 2031/3
        • Scope 1+2: 42% or more
        • Scope 3: 25% or more
          (both compared to FY 2023/3)
        • * Target updated in FY 2026/3
    2. (2)Waste reduction
  • Our human resources boast diverse values and strengths, and to ensure that they can maximize their capabilities, we are striving to promote the creation of workplaces where they can work with a sense of fulfillment and pride.
    1. (1)Human Capital Management Vision “Make employees Brilliant”
      • Create a virtuous circle that enhances value creation and a sense of fulfillment by stimulating autonomy and growth and through flexible and efficient workstyles that enable employees to maximize their capabilities.
Long-Term Vision / Medium-Term Business Plan
Corporate会社情報