Sumitomo Chemical announced its new Corporate Business Plan for the period from fiscal 2022 to fiscal 2024, expressing a commitment to advance a broadly-defined green transformation (GX) and help resolve major social issues such as carbon neutrality and ecosystem conservation through its business in order to achieve a sustainable society.

Under the new Corporate Business Plan, which carries the slogan "Change and Innovation with the Power of Chemistry," the Company will work on seven key management priorities, including further improving its business portfolio (by strengthening and transforming its businesses), improving its financial strength, accelerating the development of next-generation businesses, and fulfilling obligations and providing contributions toward achieving carbon neutrality.

Further improving the Company’s business portfolio (by strengthening and transforming its businesses)

Sumitomo Chemical will enhance the earning power of its technology-driven businesses while also accelerating its metabolism by transforming its portfolio to advance a broadly-defined GX. To this end, the Company will direct management resources to business areas that need strengthening and transformation, with a particular focus on the reduction of environmental impact in Essential Chemicals & Plastics—the sector created by redefining the Company’s petrochemicals businesses—and semiconductor- and battery material-related businesses in the area of high-performance materials, as well as biotechnology and genomics in life sciences.

Improving the Company’s financial strength

Sumitomo Chemical aims to achieve a D/E ratio of approximately 0.7 times by the end of fiscal 2024, reducing the interest-bearing debt that increased due to substantial investment in life sciences during the previous Corporate Business Plan period by vigorously implementing ROI management and enhancing cash flow generation capabilities. In addition, the Company will make an additional ¥50 billion of asset divestitures and also reduce working capital by ¥50 billion by shortening the cash conversion cycle.

Accelerating the development of next-generation businesses

Sumitomo Chemical will continue to focus on the four key areas of environment, food, healthcare, and ICT, and speed up the development of next-generation businesses in these areas by leveraging its innovation ecosystem, which includes collaborations with startups and academia, while also advancing the reorganization and enhancement of its research functions in Japan.

Fulfilling obligations and providing contributions toward achieving carbon neutrality 

Based on the Sumitomo Chemical Group’s grand design to achieve carbon neutrality, announced in December 2021, from the perspective of its obligations, the Company will advance initiatives to reduce its greenhouse gas (GHG) emissions by 50% by 2030  At the same time, from the perspective of contributions, Sumitomo Chemical will work on developing products and technologies that contribute to reducing GHG emissions and implementing them in society, as well as on technology licensing to promote their global deployment. As part of its contributions, the Company has set a new target of achieving revenues of ¥1.2 trillion by fiscal 2030 from the sale of products designated as Sumika Sustainable Solutions*, more than double the amount achieved in fiscal 2021, and is aiming to achieve sales of ¥700 billion for those products by fiscal 2024, the final year of the new Corporate Business Plan. The Company also plans to invest approximately ¥65 billion in R&D and other efforts toward carbon neutrality during the Plan period.

Improving productivity and strengthening our businesses through digital innovation

Sumitomo Chemical will advance in earnest its DX Strategy 2.0, digital transformation initiatives aimed at enhancing business competitiveness, such as strengthening customer connections and improving the level of customer satisfaction. At the same time, the Company will continue and redouble its DX Strategy 1.0 efforts to improve productivity in R&D, manufacturing and other areas, while also launching DX Strategy 3.0 initiatives to develop new business models by leveraging digital technology. In addition, the Company will increase DX staff in its research and development and manufacturing functions to 330 people, and assign additional 250 DX staff members to its business units and corporate functions in order to improve digital transformation literacy across all departments and levels. Approximately ¥70 billion will be invested in DX during the Plan period.

In addition to these five items, Sumitomo Chemical will also work on (6) Employing, developing and leveraging human resources to achieve sustainable growth and (7) Ensuring full and strict compliance and maintaining safe and stable operations.