News Room 2009 (The former Furukawa-Sky)

New Year Address by the President & CEO (Summary)

January 5, 2009

Welcome to 2009. We would like to extend our sincerest wishes for health, happiness and prosperity to everyone in this new year.

In reviewing the events of last year, despite growing concerns about the global economic outlook during the first half of the year amid record-high energy prices, the economic environment on the whole was comparatively stable, supported by growth in newly emerging countries such as China. However, the turning point came in early autumn, when financial anxiety arising from the subprime loan issue surfaced and quickly spread to the real economy, plunging the entire world into a recession and rapidly and dramatically transforming the economic situation.

Furukawa-Sky had been making comparatively steady progress toward our goals during the first half of the year, as sales of thick plates and general materials fared well, increasing by 10% in volume over the previous year. However, since September 2008, the company has been affected by major output reductions in various sectors, such as the automobile industry, and even now, we cannot predict how far these reductions will fall.

I expect this harsh environment to prevail for some time. In other words, in taking action we must bear in mind that the severe conditions may deteriorate even further.

In view of these circumstances, the slogan for this new year is, "Overcome every challenge in our economic environment during this year of dramatic transformation."

While "this year of dramatic transformation" certainly refers to the major upheaval in our economic environment, I also intend it to mean something more: our own corporate constitution must also undergo a dramatic transformation. In these difficult times, we must transform our mindset and action in all our efforts to overcome challenges, such as those related to safety, the environment, quality and cost, and strengthen our constitution to better adapt to any changes in the business environment. Let us work together toward taking a major leap across the world through our next Mid-Term Consolidated Management Plan.

We face the following key challenges.

1.Achieving a record of zero accidents: Hold fast to the basics and involve everyone in developing a safe workplace.
2.Enhancing corporate governance functions: Pursue thorough compliance to reduce risk.
3.Actively protecting the global environment: Recognize the importance of building a sustainable society and reduce our environmental impact.
4.Improving quality and maximizing customer satisfaction: All divisions shall aim for the industry's highest quality and take firm action to meet customer needs.
5.Thoroughly reducing costs: Review all costs and adapt our essential structures to overcome change.
6.Strengthening our competence in the global market: Actively participate in promising markets and gain a competitive edge across the world.