functions to improve operational efficiency. quickly develop, customize, mass-produce, and deliver products that meet customer needs, regardless of the business division. This is due both to our technological advantage in the fully integrated production of adhesive products and the strong communication framework in place between our sales, R&D, and production teams. For example, we hold design review meetings during the early stages of R&D to anticipate future mass production, and we regularly meet with each business division to discuss improvement measures for achieving profitability targets. Leveraging this unique, three-pronged strength, we will continue pursuing relentless improvement initiatives in the fiscal year ending March 31, 2026, to further enhance our manufacturing technologies, quality assurance capabilities, and cost competitiveness. Even in highly competitive markets, we will continue delivering top-tier products that clearly stand apart from those of our competitors.A key strength of our production system is the ability to equipment uses a coating method that eliminates organic solvents, helping reduce emissions of volatile organic compounds. It also features comprehensive automation, from mixing the release agent to warehouse logistics for base papers and finished products, creating a sustainable production system. With a total investment of around ¥4.8 billion, including the construction of a new facility, this capital expenditure will support our strategy to expand sales of casting paper for synthetic leather in overseas markets such as India, China, Europe, and North America. Capacity ExpansionWe installed new coating equipment at our Komatsushima Plant in Tokushima Prefecture, which is a key location producing casting papers and release papers for adhesive products. Our casting papers, used globally in the production of synthetic leather for items like shoes, bags, and furniture, serve a mold-like function to reproduce textures like natural leather. With growing demand for lightweight materials for electric vehicle interiors, synthetic leather has been gaining attention. In the automotive sector in particular, demand for larger-width synthetic leather is rising, making it urgent for us to enhance both customer respon-siveness and market competitiveness. We finished installing the new equipment in August 2025, and it went into operation in September. With our state-of-the-art capabilities for high-speed, high-precision coating, production capacity has increased to approximately 1.5 times the previous level. Our focus will be on ramping up output of wider casting paper. Additionally, this New wing at the Komatsushima PlantStrategies for Strengthening Our CapitalsThe fiscal year ended March 31, 2025, was a year of significant progress in several key areas, such as the expansion of capacity, as well as the strengthening of cost competitiveness through innovations in the production process. Specifically, we completed the installation of new coating equipment to boost our supply capacity for electronics market products such as semiconductor-related adhesive tapes and multilayer ceramic capacitor-related tapes. At the same time, we actively implemented a “scrap-and-build” approach, replacing aging equipment when making equipment updates. This has accelerated our transition to a leaner production system that achieves energy savings, cost reductions, and enhanced product quality. In addition, within our Optical Products Operations, we closed production subsidiaries in South Korea and Taiwan that had been engaged in adhesive processing for polarizing film. We took this opportunity to also restructure domestic production sites. Specifically, we integrated the Shingu Plant into the Tatsuno Plant in Hyogo Prefecture, unifying management and administrative A Message from the Executive General Manager33Refining Our Manufacturing Technologies, Ability to Ensure Quality, and Cost Competitiveness to Deliver World-Class ProductsHiroyuki MatsuoDirector, Senior Managing Executive Officer Executive General Manager, Production Div., and in charge of Quality Assurance Div. and Environment & Safety Div.Production Strategy
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