Reiji Nagase
President, Nagase ChemteX Corporation (NCX)
Managing Director and Executive Officer, Nagase & Co., Ltd.

New Challenges for the New Nagase ChemteX (NCX)

Focusing on the Field of Health Care

In the area of pharmaceuticals manufacture, the world's pharmaceuticals companies are increasingly concentrating resources on research and development. In Japan, progress in deregulating pharmaceuticals sector has made it possible for us to form alliances of various kinds. For many years, we have provided pharmaceuticals companies with pharmaceutical raw materials and fine chemicals. Now, in addition to offering support for the mass production of pharmaceuticals, we are manufacturing on contract such as the intermediates used in drug development and are providing assistance for the development of manufacturing processes. As part of these initiatives, we expect during the coming term to complete a small-scale intermediates plant that satisfies the code of good manufacturing practice (GKMP) for pharmaceuticals. We are also considering further investments in these areas in the future.

While working on expanding the health care business, a primary area of focus of the Nagase Group, we are also prioritizing research and development on fusing organic synthesis technology and biotechnology, a field which harnesses the power of enzymes and microorganisms.

New Developments in the Electronics Business

Electronics is another area of focus of the Nagase Group. As manufacturers of liquid crystal panels and semiconductors move production to locations overseas, the Group is growing businesses at sites overseas to locally manufacturer and recycle chemicals. The summer of 2002 will mark the completion in Singapore of a chemicals manufacturing and recycling plant for Nagase Finechem (Pte) Singapore. As a manufacturer, we will play a central role in ensuring it goes into operation smoothly and work to expand its business in the future.

In the advanced semiconductors sector, we will increase our development, production and sales of liquid and film packaging materials with a view to expanding our global market,

We will also promote the development of a number of new materials for the promising growth areas of electronics and optoelectronics, In the process, we intend to make the most not only of the organic synthesis and formulation technologies that Group companies possessed before the merger, but also of the applications development capabilities Nagase possesses in electronics and optoelectronics, and it's strong relationships with customers.

Largest Domestic Manufacturer of Formulated Epoxy Resins

We are Japan's largest domestic manufacturer if formulated epoxy resins. In addition to the electrical and electronics sectors, we are expanding our operations into areas ranging from tooling to construction and civil engineering. In particular, the new corrosion-resistant materials for concrete lining that we have developed for use in construction and civil engineering has been very well received. As orders for corrosion-resistant epoxy lining material (trade name DENACOAT), which was recently launched on the market. In response, we acquired marketing rights in the area of formulated epoxy resins from Nihon Polymer Co., Ltd., a subsidiary of Asahi Kasei Corporation, in May 2002. Using the products and technologies accumulated by Nihon Polymer and its network of agents and construction contractors, we intend to strengthen and expand our lining materials business, including our own products.

Plans for the construction of a formulated epoxy resin production plant in China will also go ahead in fiscal 2003, and we plan to start supplying Chinese electrical machinery manufacturers and others with products from early in fiscal 2005.

When the four companies were merged, our objective was to fuse their technologies and expertise, and to engage in selective, focused investment for the future. We also aimed to strengthen human networking with related business groups at Nagase and the Nagase R&D Centre. As the above shows, we have gone a long way to achieving these goals and believe we have at last established a framework that wallows us to compete in the increasingly competitive global market. We are approaching the stage when the fruits of our investments will begin to emerge, and intend to fulfill your expectations by developing our businesses hand in hand with the global expansion of the Nagase Group.