Notice Regarding the Termination of Outsourced Manufacturing of Lithium-ion Battery Cathode Materials and Employee Support Measures

Overview of Termination of Outsourced Manufacturing

Nippon Chemical Industrial Co., Ltd. has decided to terminate the outsourced manufacturing of lithium-ion battery cathode materials (NCA), which has been conducted since 2015 under contract with Sumitomo Metal Mining Co., Ltd., in mid-August 2026. This decision is due to rapid changes in the automotive battery materials market and Sumitomo Metal Mining’s shift toward an in-house resource-centered manufacturing system. For the fiscal year ending March 2025, sales from outsourced manufacturing accounted for 2.2 billion yen, approximately 9% of consolidated net sales.

Employee Support Measures and Future Outlook

Accompanying the termination of outsourced manufacturing, a limited-time early retirement incentive program will be offered from April 6 to May 20, 2026, targeting approximately 50 regular employees. The retirement date is set for August 31, 2026. Retirement benefits will include additional premium payments, and reemployment support will be provided to those who request it. The earnings guidance for the fiscal year ending March 2026 remains unchanged at this time, and the impact on future performance will be examined with a focus on the fiscal year ending March 2027 and beyond, with announcements expected around May. There are no changes to the shareholder return policy.