Notice on the Implementation of the Business Structure Reform

Overview

Daichi Kagaku Kogyo has decided to implement a business structure reform to realize mid- to long-term strategy aiming for ROE of 5% or higher and ROA of 4.3% in line with the Medium-Term Management Plan 'Transformation for Tomorrow 2027.' Key initiatives include reviewing the business portfolio (withdrawal/shrinkage and expansion), reorganizing domestic sites, and streamlining indirect operations, concentrating resources in growth areas to improve profitability. Withdrawals will target Offset Ink and Chitosan products, with product line reductions implemented based on marketability and profitability. Optimizations are targeted by March 2029, and medium- to long-term impacts will be disclosed in the next three-year mid-term plan announced in June 2027.

Outlook and Impact

The amount of costs related to the business structure reform is currently undecided and has not been incorporated into the Q2 and full-year earnings forecast for 2027. Costs associated with site reorganization and timing of organizational restructuring will be disclosed going forward, and impacts are expected to be shown in the next mid-term plan. Employees at the closed sites will be redeployed and provided with career support. As a group, through focusing resources on growth, new and nurturing businesses and increasing efficiency, we aim to enhance long-term corporate value.