Sumitomo Chemical Launches Three-Year Corporate Business Plan for Fiscal
2025 to 2027 with the Slogan Leap Beyond: Returning to a Growth Trajectory

Mar. 4, 2025

Sumitomo Chemical has formulated its Three-Year Corporate Business Plan for the period from fiscal 2025 to fiscal 2027. In fiscal 2024, the Company expects to achieve a V-shaped recovery as it is making significant progress on short-term intensive performance improvement measures and fundamental structural reforms. Building on this momentum, Sumitomo Chemical will begin a new management structure in April 2025, and accelerate the upgrading of its business portfolio by focusing the Company’s resources on its current growth drivers, the Agro & Life Solutions Sector and the ICT & Mobility Solutions Sector. In addition, by renewing its commitment to ROIC-oriented management, the Company will strive to significantly improve its profitability and capital efficiency, and ensure return to a growth trajectory.

1. Sumitomo Chemical’s Long-Term Vision

Sumitomo Chemical has a long-term vision to become an Innovative Solution Provider—a company that solves society’s challenges by leveraging innovative technologies. The Company has identified food, ICT, healthcare, and the environment as societal issues it should tackle, on the basis of its technology and business assets that give it distinct competitive advantages, and has reorganized its business sectors to address these four issues. By generating solutions from innovative products and technologies in each of these areas and widely providing them throughout society, Sumitomo Chemical will strive to continue to be a company with a global presence.

2. The Three-Year Corporate Business Plan for Fiscal 2025 to 2027

Sumitomo Chemical has positioned its new Three-Year Corporate Business Plan to be the first step toward achieving its long-term vision. Under the Three-Year Corporate Business Plan, with the slogan Leap Beyond: Returning to a Growth Trajectory, the Company will tackle five key management issues, including upgrading its business portfolio through a new growth strategy, increasing resilience through continuous structural reforms, and improving financial and capital efficiency.

(1) Basic Policy
(i) Upgrading the Company’s business portfolio through a new growth strategySumitomo Chemical will clarify the positioning of each of its business areas and implement more clearly focused resource allocation accordingly. The Agro & Life Solutions Sector, which provides solutions such as biorationals, botanicals, and crop protection chemicals, and the ICT & Mobility Solutions Sector, which provides solutions such as semiconductors materials and advanced display materials, will be the Company’s growth drivers for a foreseeable future. Sumitomo Chemical will concentrate approximately 80% of its strategic investments, including capital expenditures and mergers and acquisitions, in these areas. In addition, on top of the strategic investment, the Company will invest 220 billion yen for R&D in both areas, an increase of 30% compared to the period from fiscal 2019 to 2021.

The Advanced Medical Solutions Sector, which provides solutions for advanced medical treatments, including small-molecule active pharmaceutical ingredients, nucleic acid drug substances, and regenerative medicine and cell therapy products, will be developed as a new growth area to become the Company’s third growth driver. In the Essential & Green Materials Sector, Sumitomo Chemical will make a major shift from petrochemicals to value creation through environmental impact reduction business and green transformation technology licensing.

Sumitomo Chemical will capture the path to success in each of its businesses and accelerate the upgrading of its business portfolio.

(ii) Increasing resilience through the continuous implementation of structural reforms
Sumitomo Chemical will strive to further increase the resilience of its business structure by pressing ahead its on-going structural reform efforts, without slowing down. They include enhancing the fundamental profitability of Petro Rabigh, which begun a restructuring plan in fiscal 2024, seeking an optimal partner that can contribute to the sustainable growth of Sumitomo Pharma, which has emerged from a significant loss and taken a solid step towards growth, and carrying out structural reforms of the Company’s petrochemical business in Japan and Singapore.

(iii) Improving financial and capital efficiency
Sumitomo Chemical will renew its commitment to ROIC-oriented management and strive to maximize returns on the major investments it has made, while continuously implementing fundamental structural reforms. The Company aims to achieve a group-wide ROIC of 6% by fiscal 2027, and, in the two areas that will be its growth drivers, will set a target ROIC of 8% for Agro & Life Solutions and 11% for ICT & Mobility Solutions. The cash generation efforts that the Company has advanced as part of its short-term intensive performance improvement measures until the end of fiscal 2024 will continue in the new Three-Year Corporate Business Plan, with a new target of generating cash of 200 billion yen (a total of 900 billion yen from fiscal 2023). By optimally allocating a total of 1.1 trillion yen in cash, including operating cash flows, the Company will strive to improve its financial position and achieve a debt-to-equity ratio of 0.8 times to less than 0.9 times.

In addition to the three issues above, to achieve sustainable growth, Sumitomo Chemical will also implement (iv) an R&D strategy centered on the Company’s three X’s—BX (biotechnological transformation), DX (digital transformation) and GX (green transformation), the Company’s assets that give it distinct competitive advantages, and work on (v) enhancing its management foundation to support the Company’s new growth strategy.

 

(2) Financial performance targets
Sumitomo Chemical has set the following consolidated financial performance targets for this Three-Year Corporate Business Plan.

(Billions of yen)

	FY2027 targets	FY2024 forecast
Sales revenue	2,400.0	2,600.0
Core operating income	200.0	100.0
Net income attributable to owners of the parent	100.0	25.0
ROE	8%	3%
ROIC	6%	2%
D/E ratio	0.8 to less than 0.9 times	1.1 times

Sumitomo Chemical has set fiscal 2025 as the starting point for a new Sumitomo Chemical, and will continue to advance further transformation. The Company will strive to achieve its financial performance targets set under the new Leap Beyond Three-Year Corporate Business Plan and accomplish a significant leap beyond the expectations of its stakeholders.

Cautionary statement

Statements made in this material with respect to Sumitomo Chemical’s current plans, estimates, strategies and beliefs that are not historical facts are forward-looking statements about the future performance of Sumitomo Chemical. These statements are based on management’s assumptions and beliefs in light of the information currently available to it, and involve risks and uncertainties. The important factors that could cause actual results to differ materially from those discussed in the forward-looking statements include, but are not limited to, general economic conditions in Sumitomo Chemical’s markets; demand for, and competitive pricing pressure on, Sumitomo Chemical’s products in the marketplace; Sumitomo Chemical’s ability to continue to win acceptance for its products in these highly competitive markets; and movements of currency exchange rates. Factors that may impact the performance of Sumitomo Chemical are not limited to only those outlined above.

Contact

Sumitomo Chemical Co., Ltd.
Corporate Communications Dept.
https://www.sumitomo-chem.co.jp/english/contact/public/