2014 New Year Greetings

Happy New Year! It gives me great pleasure to deliver the first New Year greetings to all the members of UACJ Corporation gathered together today.

Three months have passed since the successful establishment of UACJ last October, and on behalf of the management, I wish to express our sincere appreciation to every employee for your efforts to date. Since the merger, President Okada and I have visited our customers, sales offices, R&D facilities and manufacturing plants, where we spoke to employees and other stakeholders. In view of the large number of companies, we haven't made it to all of them yet, but we plan to do so, including visits to affiliate companies.

As we traveled to each location, I was deeply touched by the level of employee support regarding our decision to integrate operations. The high morale and positive sentiment witnessed are signs that the merger is progressing well.

This year it's important for each of us to concentrate on the full integration of operations in areas such as structures, rules and systems throughout the organization. Please be sure to make your decisions while asking yourself, “What's best for the UACJ Group?” All business should be conducted applying a philosophy that emphasizes fairness, respect and trust. In doing so, we'll proactively address the most important management issues facing us today: drawing on and utilizing the synergies achieved through integration, and completing vertical startup of the Thailand rolling plant.

Regarding the results of synergies created, we're drafting "integration effect targets," which will be announced at the end of fiscal 2013. We're gradually starting to see the effects of some synergies in individual departments and divisions, but issues need to be carefully organized and specific measures for progress introduced.

Based on the activities I've just mentioned, by December 2014, we'll draft a mid-term management plan that outlines specific strategies and tactics for each department.

As part of these considerations, and in view of the fact that three months have passed, I'd like to reiterate the following points: We must not lose sight of the fact that the integration of our business activities is progress, not the beginning of the end. Our aim as the UACJ Group is becoming an aluminum industry leader in a competitive global market. To achieve this, all employees, including those of our affiliated companies, must pool their efforts together. It's of the utmost importance that we move forward swiftly and with a sense of urgency to address the following four issues.
First, we must improve cost competitiveness to a level that enables UACJ to maintain highly competitive market positioning in both Japan and global markets.
Second, we must strengthen the synergies created by combining the technologies, development knowledge and quality assurance expertise of our former companies; thereby improving our ability to meet and exceed customers' expectations.
Third, we must create a proficient network for supplying products of the highest quality to markets anywhere in the world.
And fourth, exhibiting the characteristic Japanese work ethic of all employees being actively involved on-site, we must always look for ways to make improvements.

Active involvement on-site is essential for manufacturers. But on-site doesn't pertain to the production floor alone. From research and development to sales and back-office operations, all areas of the business have their own on-site challenges. As an employee, please don't hastily use impractical ideas, but rather focus on implementing practical on-site applications that contribute to getting the work done. It's important to visit actual sites, personally see and understand the products/equipment, and fully understand the surrounding conditions and environment.

In reviewing current conditions, the overall market environment appears set to continue on the road to recovery. In addition to personal consumption, capital investment and production continue to grow. It's forecast that the yen will remain weak, which should lead to improved yen-based profits for exporters.

In the mid- to long-term however, Japan's population will continue to shrink and our customers will continue shifting their production bases overseas. These factors are causing domestic demand to decline. Furthermore, competition from overseas, including leading rolled aluminum manufacturers and manufacturers in emerging markets, is growing more stringent. Given these major changes in the business environment, we anticipate increasing difficulties in the future.

Operating under these conditions, we must augment our competitiveness and strengthen our business foundation. We must also make aggressive inroads into new product areas such as environmental systems and energy, which are slated for future growth, as well as into Southeast Asia and other emerging markets. It's imperative that we grow in these directions in order to survive. Achieving these aims calls for the newly born UACJ Group to quickly utilize the synergies gained through its business integration.

As we work toward these objectives, ongoing consideration for compliance, safety and health during daily activities is paramount. Please approach your work energetically throughout the year, holding high expectations for the future.

In closing, I'd like to ask that each of you go about your work so that, at the end of the year, you can look back on the year's accomplishments with a sense of satisfaction for a job well done.

Members of the UACJ Group unite and work together. In doing so we'll reach our objectives.

Wishing you all a great year!

Shigenori Yamauchi
Chairman of the Board
CEO