2014 New Year Message

Happy New Year one and all!

I believe this is a profound moment for each and every one of us as we enter a new year for the first time as the UACJ Group. I'd like to express a special note of appreciation to those of you who worked on facility construction and other projects throughout the year-end and New Year holidays, as well as to all employees and their family members who rang in the new year dispatched overseas.

Established on October 1st last year, three months have passed since the UACJ Group began working toward the goal of becoming an aluminum industry leader in a competitive global market. As Chairman Yamauchi mentioned in his greetings, one of the most important topics for the UACJ Group in the foreseeable future is for all employees to share a sense of urgency towards complete integration. Based on this shared understanding, we must rapidly pursue true integration; that which enables us to quickly draw on synergies to the fullest extent. One example is major investments, such as the vertical start-up of our rolling mill in Thailand.

We established the Integration Promotion Department to promote integration and quickly optimize synergies that have been realized. In addition, in order to concentrate on the vertical start-up of our rolling mill in Thailand, we established the Thai New Works Project Team in the Production Division and the Global Marketing & Sales Department in the Sales and Marketing Division. With these actions, not only will we be able to work toward the early start-up of the Thailand mill, the combined strengths of the UACJ Group will play an essential role in successfully achieving our goals. For this, I ask that each department and division work together closely.

To reiterate a comment that I made on October 1st last year, including the company headquarters, the UACJ Group is a global entity comprised of 72 domestic and overseas companies. To overcome the severe competition we face in Japan and overseas, we must introduce policies and pursue measures that ensure “one plus one” equals not two, but three or even four.

Key factors include proceeding with the restructuring of domestic operations, aggressively approaching growth markets overseas, and bringing new products and technologies to the market.

In Japan, we began structural reforms to the business prior to the merger. In the future too, we must add further to these measures and continue promoting them as a means of quickly realizing synergistic effects and utilizing them to the fullest extent. As specific actions, as planned, two foil plants were merged on January 1st, and our two logistics companies will merge on April 1st. Moving forward, we'll continue to investigate how to optimize each business division.

Overseas, we need to take a closer look at the current conditions of our businesses—existing and new alike—to ensure that developments are proceeding appropriately.

One of the most immediate of these propositions is the vertical startup of our Thailand factory. The Phase I line is scheduled to begin operation in January, and the opening ceremony is planned for March. Moving forward, it'll be important to coordinate actions together with TAA and other overseas bases to create a stable supply chain that covers Japan, Southeast Asia and China. Future expansion into North American and Europe is planned as well.

Our capital investment in the South Korean aluminum processing and sales company FSP and our acquisition of shares in the Malaysian company Hydro Aluminium Malaysia, which manufactures and sells aluminum foil, are part of these efforts.

By developing and introducing various strategies such as these, we' re working to ensure access to markets that are expanding overseas while strengthening our sales capabilities. Doing so is essential if we're to win amidst the severe competition of leading overseas aluminum companies as well as those companies operating in emerging markets. If we don't win, the UACJ Group will not survive. Please remember this as you go about your daily activities.

There are, however, certain tenants that we must bear in mind. As I've stated numerous times in the past, we must exceed the expectations of our customers and maintain a strong commitment to compliance, safety, the environmental and quality.

A new company's business grows from its customers. In addition to working diligently on a daily basis, we must improve price competitiveness by holding down materials costs, improve quality and utilize production technologies that shorten lead times.
If we take these facts to heart, quickly and accurately understand our customers' needs, develop new technologies and products to meet those needs, and bring high-quality products to market, I am confident we will win the loyalty of customers and the market.

Compliance is an absolute must for any company, as is evidenced by numerous examples of companies that have failed after losing the trust of the public as the result of not complying with local or regional standards, regulations or laws. Once a problem that causes society to lose trust occurs, restoring that trust is no easy task.

Along the same line, I cannot help but stress that, key to the success of any business, is a strong commitment to safety, the environment and quality. If a company doesn't continuously work to raise its standards in these areas, it has no future. As such, I believe it's important to periodically reflect back afresh on these ideas.

Around the time of our integration, there were incidents that could have turned into serious accidents. The all-employee focus on the merger may have been instrumental in preventing chaos at the time.

Last year, we announced plans to reinforce our occupational health and safety activities. I would like to see efforts at each facility result in us achieving the goal of zero accidents throughout the Group.

In closing, I would like to express sincere appreciation to our labor union and all Group employees for your understanding and cooperation regarding the various company-related initiatives in the past. Your continued support in the year ahead will be most sincerely appreciated.

My goal for the new year is that the companies in the UACJ Group be recognized for their excellence in the safety and security of employees, and achieve the status of zero accidents.

Mitsuru Okada
Member of the Board
President CEO