Mid-term Growth Strategy

I. Management Policy

A) Basic Management Policy
 Since its inception, the Takasago Group has maintained a corporate philosophy of “Contributing to society through technology” in our pursuit to become a leading company in the global flavor and fragrance market.
 We have established core management policies of “A well regarded Company that respects the global environment and local communities.” and “A leading Flavors and Fragrance Company in the global market that consistently supplies dependable products.” and have continued to enrich the quality of our customer service and strengthen our foundation in growing markets, as well as promote Environment, Health, and Safety (EHS) activities.
B) Management Plan
 Our group will continue to revise its safety management structure and develop a stable supply structure from lessons learned in the Great East Japan Earthquake and the fire at our Hiratsuka plant. We will also actively continue capital investments in overseas markets with high growth rates. For the domestic market, we are constructing a state-of-the-art flavor production site in Mihara City, Hiroshima Prefecture as a base for our activities in Western Japan. We will also continue to optimize the supply chain of our corporate group while taking steps to improve production efficiency, safety, and supply capacity.
 It is within this internal and external business environment that we have initiated the “Takasago Global Plan (GP-3)” for the 2015-2017 fiscal years, which will be “A three-year period to solve issues and build a foundation for significant growth as we move forward to 2020.”
 In accordance with one of our basic management policies “A leading Flavors and Fragrance Company in the global market that consistently supplies dependable products.” we will achieve continuous growth by carrying out group plans according to the basic principles in the GP-3 and in so doing gain lasting advantages over competitors.

II. Medium-term Management Plan

A) Title
B) Corporate Philosophy
“Contributing to society through technology”
C) Basic Management Policy
A well regarded Company that respects the global environment and local communities
A leading Flavors and Fragrance Company in the global market that consistently supplies dependable products.
D) Position of Takasago Global Plan (GP-3) for FY 2015-2017
A three-year period to solve issues and build a foundation for significant growth as we move forward to 2020
E) Basic Group Policy for GP-3

1. Re-strengthening the Business Foundation

We will construct a foundation capable of flexibly in responding to growth in demand

 Our group will accelerate business developments in all competitive areas in the global market, from rapidly growing emerging markets to mature markets which require higher value addition. We recognize the daily innovation taking place in the consumer market, and we need to continue to attract customers and consumers through the development of alluring flavors and fragrances and provide products with high added value.
 We will ensure consistency in our strategy and strengthen our organization according to the characteristics of each of our businesses. We will also reorganize our production structure based on our business strategy.
 With a long-term vision, we will quickly strengthen our bases to respond to growth in local demand and new market needs. Examples of these are the ongoing construction of the production site for the Indian market, expansion investments in Southeast Asia, the reinforcement of production capacity in Germany, and the expansion of R&D in the U.S.

2. Human Resource Development

We will cultivate personnel who will take on challenges, and will utilize local personnel globally. We will develop a system that will enable us to do this.

 A company exists because of its people. We need to nurture our personnel with the corporate goals in mind. We will cultivate staff who are willing to take on challenges so that our corporation will continue to grow in a fiercely competitive domestic and overseas environments. By actively utilizing local personnel globally, we can mutually complement both local and global environments and cultivate truly global personnel who can exercise flexibility in various situations. We believe that constructing such a system will allow for lasting corporate growth.
 Due to the growth of the different organizations in our group, a more advanced group control is becoming necessary. We will implement high-precision operations and management controls that are in-line with the market characteristics and scale in each area and is expected to contribute to an improvement in profitability.

3. Technical Innovation

In line with our corporate philosophy “Contributing to society through technology,” we will develop innovative technologies possessing both “originality” and “superiority” that our competitors will not be able to rival.

 Technical innovation is the core of our corporate growth strategy and believe business will follow suit in both the short-term and the long-term.
 We are pursuing the following three corporate technical innovations.
-  In concept innovation, we will enhance our technology to create flavors and fragrances from unique ideas and attempt to utilize physiological psychometric and sensory technologies in the creation of these products.
-  In product innovation, we will focus our attention on the development of new aroma chemicals, bio-chemicals, and natural ingredients in order to gain a unique position for our products.
-  In process innovation, we will enhance existing technologies and implement new production technologies according to our business strategy.
 At the same time, we will take advantage of our product portfolio which is founded on our unique potential, pursue the development of new technologies and materials that will contribute to innovative product developments for the consumer market, and establish an advantage through technological innovation. As a corporation that affirms this spirit of technology in its corporate philosophy, this is an unchanging theme for us.

4. Customer Trust

We will be a truly valuable partner to our customers

 Based on the basic management policy “A well regarded Company that respects the global environment and local communities.” we will review our EHS statement and medium-term plan “EHS 100” and renew our resolve to win the trust of our customers.
(EHS 100: http://www.takasago.com/en/sustainability/ehs100.html)
 In particular, we will revise our safety management structure and develop a stable supply structure.
 In terms of corporate management, it is an essential responsibility of a corporation to be transparent and to coexist with society in a wide range of areas. We need to improve the social nature of the corporation and increase the rating and trust not only of our businesses, products, and technology, but also of the corporation itself. We believe this is essential in establishing a lasting, stable, and intimate relationship with various stakeholders, including the consumers and our customers. Forming a strong bond with local communities and pursuing sustainable management through environment-friendly green procurement and green chemistry are also essential issues.

5. Profitability Improvement

Improve profitability by optimizing the total value chain of our group

 Our group has developed its business while accumulating a variety of differentiated and superior management resources through our global network. The development of a system that will enable us to effectively coordinate and share these management resources within the group is an important fundamental strategy for us.
 In order to fully optimize the group, we also must pursue the effective management of strategic resources that have a significant effect on the entire group. As we increase our profitability, we will focus on critical issues while developing unexplored fields to ensure that we grow at higher than market growth rates. These will be achieved by improving raw material procurement through group purchasing, and improving efficiency of business processes to cope with expanding business and organization.