Kuraray : Building a More Sophisticated Business Portfolio（200 KB）

Kuraray Report 2024	Kuraray Group Businesses "For People and the Planet" Toward Realizing the Vision Three Challenges Business and Growth Strategies Management Foundation	Corporate Data	24

Building a More Sophisticated Business Portfolio

The basis for evaluating our business portfolio centers on the two axes of social and environmental value and economic value. In building a more sophisticated portfolio, we will also take market growth into account as we respond to calls to address social issues.

The evaluation based on these axes will guide our efforts to allocate management resources in a strategically focused manner, aiming to transition to a more sustainable business structure and achieve sustainable growth.

Social and environmental value	Alliance, M&A	Developing	Promotion	Growth, expansion	Alliance, M&A
Kuraray PSA system, ICP	new solutions,	businesses
			applications
						Some businesses and products
						included in each area
				Base businesses	EVAL™ EVOH resin
		Businesses to	Water-soluble PVOH film
Leveraging capabilities			GENESTAR™ heat-resistant
be optimized,			polyamide resin
		structurally			Dental materials
				Activated carbon
		improved
Market					VECTRAN™ liquid crystal
		New			polymer fiber
growth			application,
			market			PVOH resin
		Business	development
		evaluation				Advanced interlayers
			Improving			Optical-use poval film
			profitability
						Sustainable feedstock
		Downsizing, withdrawing from businesses	Polymer materials recycling
		Semiconductor manufacturing
						process solutions
						Cell cultures solutions
						PFAS free solutions

Withdrawn (during "PASSION 2026")

Economic value

• Artificial marble business (production, sales halted in 2022)
• Biocarrier for wastewater treatment business (production, sales halted in 2022)
• Ballast water management system business (business transferred in 2023)
• Golf business (business transferred in 2023)
• Bone-graftsubstitutes business (production, sales to be halted in 2024)
• Diatomite and perlite business (business to be transferred in 2024)

Divestment, withdrawal	(profitability and efficiency)	Part of Isoprene business
	Part of Methacrylate business
		Part of Fibers and Textiles
		business

Kuraray Report 2024	Kuraray Group Businesses "For People and the Planet" Toward Realizing the Vision Three Challenges Business and Growth Strategies Management Foundation	Corporate Data	25

Objectives of Building a More Sophisticated Business Portfolio

Use cash generated from base businesses and growth and expansion businesses to further promote the latter and develop new solutions and applications to drive the next phase of growth.

In businesses to be optimized or structurally improved, formulate plans for improvement and restructuring and take measures to improve profitability.

In light of market conditions and the business life cycle, consider downsizing or withdrawing from businesses that do not promise improvement in social, environmental, or economic value, optimizing resource allocation.

Judge ownership of businesses from the perspective of whether Kuraray is the best owner in view of their compatibility with the vision for the Kuraray Group.

Social and Environmental value, Economic value

For the social and environmental value of businesses and products, we use the Kuraray Portfolio Sustainability Assessment (PSA) system based on PSA, a highly objective and transparent product portfolio evaluation method established by the WBCSD*1 which is also used by other chemical manufacturers, mainly in Europe, as well as use internal carbon pricing (ICP)*2.

We assess economic value using the twin indicators of earning power (operating cash flow) and efficiency (ROIC). Continuing to assess and screen using these two axes will help us determine whether to aggressively expand, maintain, scale down, or withdraw from businesses and products. Our goal is to build a strong business portfolio by channeling resources into fields with high growth potential. At the same time, we will navigate changes in the

business environment and in society to generate new opportunities and respond appropriately to risks.

*1 World Business Council for Sustainable Development.

*2 A mechanism for creating economic incentives to reduce CO2 emissions and save energy, promoting low-carbon investment and encouraging climate change response by setting an internal carbon price and using it to calculate the monetary cost of emissions

Social and environmental value

Kuraray			ICP
PSA system

Economic value

EarningEfficiency Power

Market Growth

We will actively invest management resources into business and product areas where there are strong calls to address social issues and where we can capitalize on the core capabilities of the Kuraray Group.

OCF

ROIC

Five Macrotrends

Improvement of the

Food and

Digitalization, high-

Effective utilization

Calls for higher

global environment

water security

speed communications

of energy

quality of life (QOL)

P.16

Market growth

Calls to

addressCore

socialcapabilities issues