Management Message

Contributing to Sustainability with Dedication to Life and Living

Deeper communication in times of dramatic change

Our business environment continues to change more dramatically than before. We have been seriously affected by events around the world, with rising geopolitical risks such as trade friction between the United States and China, the pandemic, and the Russia-Ukraine situation. Of course, we always expect that various things can happen, but since several events and incidents beyond our expectations have occurred, I thought a lot during the past year about how we should tackle changes in the business environment, what the company’s position in the world is, and how we should cooperate with outside parties.

After becoming president in April 2022, I gained a broader perspective of the business environment. This renewed my sense of the importance of communication. Although communication sounds simple, true communication is profound, and is only achieved when we see things from other person's perspective. In Asahi Kasei, we have long had a culture of addressing one another by name rather than using formal titles. This avoids emphasizing people's hierarchical ranks, which allows people to speak their minds more freely. Recently we have had to be more careful when it comes to video conferencing. Online tools are very convenient, but intentions are not conveyed as easily as they are in person. For instance, I might try to make a joke, but it's difficult to gauge the other person’s reaction when talking remotely. Did I just not hear them laugh? Did they simply not get my joke? It's hard to tell. While there are benefits of convenience, I think we have to be more careful too. In order to make communication more meaningful, I try to be approachable, to create an atmosphere where it is easy for people to talk to me.

Being close to people and growing together with society

In 1922, founder Shitagau Noguchi established Asahi Fabric Co., Ltd., the predecessor to Asahi Kasei, and the following year, he succeeded in manufacturing synthetic ammonia in Japan for the first time at a plant in Nobeoka, Miyazaki Prefecture. Since then, the company has continued to grow for over 100 years.
However, when he started the company, I doubt Noguchi expected it to continue for 100 years. He started the business using technology in his field of specialty to develop society at a time when Japan was still modernizing. Since then, the company has continued to create and take on challenges, producing products for the wider world so that it can contribute to society through new and innovative things. I believe that this continued desire to move forward step by step has resulted in Asahi Kasei lasting for 100 years.

Our Group Mission, to contribute to life and living for people around the world, shows the universal significance of why we as a company exist. Our current mission statement was adopted in 2011, but long before then, employees already had the feeling that this was a company that was always close to people. This feeling is evident in the fact that while we have developed as a B2B company, we have also engaged in businesses aimed at the general public, such as consumer goods and homes. It is from a century ago that we inherited the idea of being a company that is close to people and grows together with society.

Companies must change according to what people need. Companies cannot survive unless they meet the expectations of society. It is extremely important to keep this in mind as we move forward. These days, society expects companies to be sustainable. In our current medium-term management plan, we aim to create a virtuous cycle of two aspects of sustainability: contributing to sustainable society, and sustainable growth of corporate value. Both the company and society need to be sustainable. As we advance these two aspects of sustainability, the important thing is for everyone to fully embrace what it means. When something changes in a business or in a job, the way to grow corporate value and contribute to sustainable society may need to change, too. This is why I tell our company's leaders to explain this to their personnel in a way that they can appreciate, and to maintain effective communication about it.

Drawing together with Care for People, Care for Earth

Even a hundred years from now, Asahi Kasei's approach will remain the same. We will continue to understand the issues that society faces in each era, and focus on creating innovative businesses and products that provide solutions as we continually transform ourselves. This will further deepen trust with our diverse stakeholders, and our basic stance will continue far into the future.

Based on this premise, our vision for the Asahi Kasei Group in 2050 is expressed as “Care for People, Care for Earth.” This vision signifies our determination to contribute to the future of society through the two main pillars of “living in health and comfort” and “harmony with the natural environment.” I want our company to be one that gives everyone the feeling that Asahi Kasei will use its technological capabilities to solve various social issues and create an exciting future. We must be a company that strives daily to solve various social issues, and provide new products and services to society. I’m confident that we at Asahi Kasei can do this, as we have always advanced with people at the forefront. These days, however, it is difficult for an individual company to accomplish something alone, so we will leverage various forms of collaboration for Care for People and Care for Earth.

Promoting various measures to achieve sustainability

As we pursue the two aspects of sustainability, contributing to sustainable society and sustainable growth of corporate value, we are advancing transformation in the critical areas of green, digital, and people (GDP). Furthermore, by combining and maximizing intangible assets such as diversity, an energetic culture, intellectual property, and know-how, we will continue to transform to meet the needs of society in every era.

Technologies and businesses that contribute to greenhouse gas (GHG) emissions reductions

Climate change, including global warming, is a pressing issue that the world has to address. As a company, we must aim for growth by developing and providing to the world products and technologies that can contribute to solutions. In that respect, our Material sector, along with the Homes sector, has great potential. Asahi Kasei is tackling the issue of global warming in two ways: reducing our own GHG emissions from business activities, and contributing to GHG emissions reductions throughout society. Due to the characteristics of the chemical industry, the Material sector's GHG emissions are significant. Achieving the world's ambitious goal of carbon neutrality by 2050 requires us to review our production processes and improve our technologies to reduce our own emissions. On the other hand, we also have technologies that contribute to the environment. We could say that the outlook of our company rests on the extent to which we can supply products that help society achieve GHG emissions reductions. Asahi Kasei has many excellent and extremely cutting-edge technologies, so it is vital that we use these to create many new products while considering the value chain. For example, in the case of hydrogen, which is attracting worldwide attention as an energy source, we have strengths in manufacturing equipment. However, just having manufacturing equipment by itself does not make a hydrogen business viable. We need to consider how hydrogen is produced, transported, and used. This is why we are forming alliances with energy, infrastructure, and logistics companies, in order to quickly create what the world needs. Success depends on how we form our value chain. With outstanding and unique technologies, it is extremely important that we leverage our strengths to lead the value chain while contributing to the realization of a carbon-free society.

Raising the “A-Spirit” to continually transform

When aiming to achieve sustainability, human resources are critical. Since our previous medium-term management plan, we have been saying that people are our most valuable assets and that everything starts with people. We can no longer expect to make sales simply by producing good materials. The success or failure of a business depends on employees being able to connect with the outside world, having personal connections, and being active. In order to grow sustainably, it is important for us to value connections with diverse stakeholders and continue to create innovative products and businesses. This is only possible with human resources. And this is why each and every employee is needed to be proactive.

The cradle of Asahi Kasei is Nobeoka, a place far from the center of Japan. The company was also not affiliated with any of the large industrial groups, so it was sometimes referred to as a maverick. We are proud of these roots, and since our founding we have valued an energetic spirit, and have used this as the driving force behind our business. “A-Spirit” (Asahi Kasei spirit) expresses this heritage, and represents the spirit of a pioneer and the spirit of taking challenges to go beyond the status quo. But in recent years, as the organization has grown larger, I sometimes feel that this A-Spirit has faded somewhat. What is important is that Asahi Kasei continues to be energetic. While reflecting on the past to learn from our failures as we take on new challenges, we will focus even more on developing human resources with an enterprising spirit who can bring change, and build an organization that can nurture this talent.

Co-creativity and life-long growth of diverse individuals

As a company that operates a wide range of businesses, the diversity of our human resources is a feature and strength. We place emphasis on diversity, equity, and inclusion, not only to encourage the success of each individual, but also to enhance co-creativity based on a variety of perspectives.

A key element in this is expanding opportunities for women. Although the number of women in managerial positions is increasing year by year, it is still not at a satisfactory level, so further progress is needed. However, rather than simply pursuing numerical targets, we must steadily move forward with a sense of understanding and belief that this is how Asahi Kasei should be. We are promoting gender diversity as a key initiative, including supplementing the areas in which we are lacking by hiring personnel from outside.

Another key part of our human resources strategy is life-long growth. This is aimed at energizing our more seasoned employees while encouraging all employees to develop their careers autonomously. However, employees may not be convinced if it feels like they're being told to continue growing for the sake of the company. When we asked plant employees how they felt, many of the veteran employees had that reaction. But when we asked employees if they could come up with ways to make their lives more fulfilling and more rewarding at work, most responded that they could do that and would like to. If the idea of “life-long growth” becomes accepted and everyone continues to work in a healthy and active way, the younger generation will look up to them and be inspired. This is the aim of life-long growth.

Creating value together with suppliers

In order to resolve through business such social issues as the environment, human rights, labor, safety, and hygiene, it is important for us to work together with the entire supply chain. We formulated supplier guidelines in 2021, and have been promoting understanding among our business partners.

Asahi Kasei is proud to be second to none when it comes to our business attitude and corporate culture of creating better products together with our suppliers. We have been in the textile business since our founding, but one of the characteristics of Japan's textile industry is the length of its supply chain. There is a long process that leads all the way to the apparel industry, from spinning and weaving to dyeing and sewing. Over our 100-year history, the experience we have gained working with many suppliers is the foundation of our company.

As a company that operates globally, we must always be conscious of the respect for human rights. To confirm that there are no human rights violations, either within the Asahi Kasei Group or in the supply chain, we identify industries and regions at high risk and prioritize measures. Even in Japan, human rights issues may be occurring in places that we cannot see. We must pay close attention to whether wages are appropriate, including overtime payments, and whether any harassment is taking place. If there is a problem at a supplier, it is important that we work together to consider how to resolve it, how we can make improvements, and what we can do.

Strengthening risk management

Amid rising geopolitical risks and increasing uncertainty in the business environment, we reviewed and reorganized the group-wide risk management system in fiscal 2022. As the President I am ultimately responsible, but with another Executive Officer assisting me, we have clarified the management framework and the roles of those involved. We also categorized risks into Group Risks and Business Risks to identify and visualize each specific risk.

I believe that the key to risk management is whether effectiveness is assured. The question is whether or not we can carry out our plans when an unfavorable event occurs. We need to thoroughly verify the functions that enable us to reliably communicate with sites where there has been an occurrence, and to execute concrete measures without delay. We are establishing a system that allows us to quickly implement a PDCA cycle.

Uniting with stakeholders toward the next 100 years

The Asahi Kasei Group was established through relationships with various stakeholders, and with their understanding and cooperation, we have continued to take on many challenges over the past century. I believe that the most important thing for Asahi Kasei now and in the future is whether we share the same vision for the future as our stakeholders. This entails thinking from another perspective. For example, we may sometimes have different opinions from our shareholders and investors. Nevertheless, we must consider and ask ourselves, “If I were an investor, what would I expect from Asahi Kasei?” I believe that being successful through relationships with various stakeholders is the result of continually looking at things from another perspective.

For the next 100 years, the Asahi Kasei Group will evolve by continuing to care about life and living to create businesses that align with people's needs. We will deepen our understanding of what society expects from us and the mission we must fulfill, demonstrating our A-Spirit to take on the challenge of further transformation.

Koshiro Kudo