Medium-Term Management Plan artience 2027 | Integrated Report 2026 Management Strategy: Strengthening Investment in Growth Areas and Completing Business Portfolio Transformation
Published on June 30, 2026
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Progress in business portfolio management
Hiroyuki Hamada
Fiscal year 2025, the second year of the Medium-Term Management Plan artience 2027, has been a year in which redesigning business portfolio management is required amid significant changes in the market environment.
The first basic policy, "Transformation into a High-Profit Existing Business Group," has been performing well, and we feel a solid sense of qualitative improvement in our portfolio. Overseas sales of liquid inks and display pressure sensitive adhesives saw significant growth, contributing to a record operating profit of 20.8 billion yen.
On the other hand, in the second basic policy, "Creation of Strategic Priority Business Groups," there was a significant delay in planning for CNT dispersions for lithium-ion batteries (LiB), which had been a pillar of growth. This is largely due to changes in the external environment, such as automakers reconsidering their EV investments one after another. As a result, we recorded a significant impairment loss on facilities in North America, which are not expected to be operational for the time being.
Now that the premise has changed, it is essential to calmly reassess your strategy. We are beginning to shift our focus on how to nurture our next pillars, such as displays and advanced electronics.
Fiscal 2026 is the year to artience 2027, but since we achieved the initial operating profit target of 14 billion yen for our high-profit existing business group in the first year, we have now revised the target to 18 billion yen (as of February 2026). The company-wide operating profit target for fiscal 2026 is set at 23 billion yen. Throughout the current medium-term management plan period, our approach to pursuing transformation of our business portfolio under an aggressive approach and our continued active investment in growth areas has remained unchanged.
Furthermore, in the next medium-term management plan artience 2030, we are also sowing seeds toward this goal and aim to create a steady growth story.
Shift to highly-profitable existing businesses
Many of our high-profit existing businesses have top-class competitiveness in Japan and form the foundation of our revenue. We classify them into three categories: "Growth Businesses," "Revenue-Based Businesses," and "Structural Reform and Strategic Restructuring Businesses," with each clearly defined role.
For example, liquid ink, which leads the packaging-related business segment, is classified as a growth business overseas and a revenue-based business domestically. Although it has originally built a high market share in Japan, packaging for food and daily necessities ultimately comes from consumers, and growth is limited in markets where the population has plateaued. The role of growth businesses is to leverage the technologies and expertise they have cultivated as weapons, expand profits overseas where demographic bonuses can be expected, and then reinvest those profits into future investments, thereby supporting the company's growth.
We are already expanding our business in 24 countries, including India, Southeast Asia, China, and Turkey. With an extensive network of locations, we can flexibly respond to market shifts, and it is not uncommon for new local businesses to emerge locally in line with customers' overseas expansion. We already generate more than 60% of the group's overall profits overseas, and we believe this trend will only strengthen going forward.
Domestic revenue-building businesses that generate stable revenue are also important. We have strengthened our recognition that the know-how honed domestically is the source of overseas expansion, and we are actively investing in Japan by fiscal year 2026. One example is the 4 billion yen capital investment in the Saitama Manufacturing Plant, which manufactures packaging-related inks and materials. In addition to efficiency and labor-saving, as labor shortages become increasingly severe, we are focusing on improving the working environment and realizing smart factories where people will want to work here.
In fiscal year 2025, price revisions and high value-added initiatives in the structural reform and strategic restructuring business also bore fruit, significantly improving the profitability of the pigments business. Offset ink also achieved profitability domestically. It became a good example of structural reform by increasing profits even amid market contraction.
Classification of the main existing businesses and operating profit targets
Creation of strategic priority businesses
The Strategic Priority Business Groups are areas where new pillars that will drive future growth are nurtured. artience 2027 began amid a global EV shift, initially assuming that the LiB CNT dispersions business would significantly transform the entire portfolio. However, due to changes in EV policy due to changes in the U.S. administration and delays in infrastructure development, the project has not been launched as planned.
However, the trend toward EVs itself has not stopped. While expanding target markets and product areas, we will prepare to ensure the timing for renewed EV market expansion. In addition to its main focus on cathode materials for ternary systems, it is also advancing development for LMFP batteries and anode materials, as well as research on solid-state batteries. Furthermore, we are considering a wide range of applications beyond automotive applications, including backup power supplies for data centers and consumer devices.
Another key focus area to compensate for lag in CNT dispersions is the display and advanced electronics business. For optical pressure sensitive adhesives, where demand remains strong, production capacity has been strengthened through capital investment in Jiangmen, China. In this field, a cycle has been established where products developed in Japan are produced in China and delivered to local customers. In this way, a business model based on a global perspective, such as cross-border collaboration in sales activities within East Asia and production complementarity between sites, is becoming established.
On the other hand, color filter materials are mainly markets in China and Taiwan, but in fiscal year 2025, competition from Chinese players was affected. To address this, we established a joint venture with Shenzhen Rongda Photosensitive Technology Co., Ltd. in China, and established a sales system for locally produced products.
Furthermore, in the advanced electronics field, we are accelerating material development for growth markets such as smartphone components and data center applications.
To ensure we capture the themes that will grow in the future, we have formed a task force of over 20 people, and I participate regularly. Some projects have even reached the test market, and we plan to strengthen them in preparation for the next medium-term management plan. We possess unique materials such as polymer resins for semiconductors. By expanding this from the perspective of "cluster development," including niche markets, we will nurture the seeds of new business opportunities.
Classification of the main existing businesses and operating profit targets
Overview of LiB CNT dispersions by Site (March 2026)
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Transformation of the management foundation
While raising the "earning power" of existing businesses, we will also foster new businesses. Supporting these two pillars is the third fundamental policy: "Transformation of the Management Foundation."
For example, we are accelerating group-wide joint purchasing of raw materials, which account for more than 60% of our sales. Centered around our Singapore base, we consolidated regional demand and established a system that enables procurement under more favorable conditions. Such efforts require cooperation not only from the purchasing department but also from the technical and manufacturing departments.
DX is also an important topic addressed in the materiality section. We are actively promoting the use of generative AI, building a system that can be used in a closed internal environment, and will use it to facilitate the sharing and analysis of technical information, as well as patent searches.
And it is only people who carry out all these efforts. We are working to boost motivation through a review of evaluation systems to "evaluate the attitude of taking on challenges" and direct dialogue between the president and employees.
Especially now, with about 5,000 of the group's approximately 8,000 employees working overseas, strengthening overseas talent is extremely important. In fiscal year 2025, we conducted training in Japan inviting mid-level overseas managers. We will continue to implement initiatives to deepen understanding and engagement with artience group. Additionally, the investment in efficiency and improved working environment at the Saitama Plant is being pursued, with the know-how gained from this process being horizontally expanded to overseas bases.
Toward the ideal long-term state
The core of the growth story for the next medium-term management plan lies in how to nurture add-ons through strategically prioritized businesses on top of the solid foundation of existing businesses. The target of ROE of 10% or higher in the next medium-term management plan requires challenges that are not extensions of previous ones. Rather than relying solely on efforts on the ground, we sometimes make bold management decisions and strategic investments to reach a higher level.
Another thing we emphasize is organizational culture. Our company upholds the philosophy of "People-oriented management" and has a people-friendly corporate culture. Ideally, while leveraging this strength, each employee recognizes their role and acts autonomously, so that the entire group organically connects. To survive in this rapidly changing era, I hope there will be active discussions throughout the company. Regardless of your position, it's important to communicate your opinions openly and move forward with understanding.
When I talk with young and mid-level members within the company, I find that each has firm convictions, and I am reminded once again that our company has talented people. We are confident that building an organization where they can fully demonstrate their abilities is the key role of management, and that will create a new artience that will shape the next decade.
Management Plan artience2027/2030 "GROWTH"
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