An Interview with the President

Q: First, what do you hope to accomplish as president?

A: I, Hiroshi Saito, became president of Kurita Water Industries on June 26, 2009, taking over from my predecessor, Hiroshi Fujino. Capitalizing on the Kurita Group's business foundation built by my successive predecessors, I will spare no effort to win the trust and meet the expectations of our shareholders and other stakeholders in the aim of realizing our corporate philosophy: "Study the properties of water, master them, and we will create an environment in which nature and man are in harmony." I am committed to successfully carrying out the new medium-term management plan we launched in April this year, Make Progress 2011 (MP-11), by continuing the expansion of service businesses and global operations that former president Fujino spearheaded for the past six years.
    The earth that we inhabit is plagued by various water problems, most notably shortages and pollution. Water, being a limited resource, will become increasingly important. As it does, I believe that water management is the key to realizing a sustainable society.
    I consider the recent rising tide of societal concern about water to be expectations placed on the Kurita Group as a provider of advanced water management solutions. I believe it is my responsibility to grow Kurita into a group that contributes to society through its operations even more broadly than it does today.

Q: What is the fundamental concept behind the new medium-term management plan?

A: The operating environment currently remains adverse. Once the economy recovers, societal conditions are expected to differ substantially from the preceding economic boom. With companies confronting an increasingly diverse range of risks, I believe that only those capable of swiftly adapting to risks will survive in the coming era. To continue growing, a company must sensitively detect societal changes and strive boldly to transform risks into opportunities.
    Based on such a mindset, we adopted "Evolution and Progress" as the MP-11 plan's basic theme. This theme expresses our determination to ceaselessly advance and reform our operations in pursuit of further growth.

Q: What type of measures do you plan to implement in accord with this basic theme?

A: We will further develop and expand the service businesses and global operations that were the focus of the previous medium-term management plan.
    First, in terms of service businesses, with productivity enhancements and environmental mitigation becoming increasingly serious priorities for customers, I believe that the Kurita Group's services must continue to evolve. We will pursue evolution of existing business models, including that of the ultrapure water supply business, to transcend conventional delineations among products and businesses, such as chemicals and facilities. At the same time, we must develop new business models also. Global operations also are gaining importance as our major customers expand overseas. We intend to strengthen the Group's global organization and boost its competitiveness overseas to provide products, technologies, and services of uniform high quality on a worldwide basis.

Q: What are your plans regarding new businesses?

A: With the global population growing, water, food, and energy supply issues have become shared priorities for all of humanity. These issues are closely intertwined. For example, food production requires water and energy while alternative energy is produced from foodstuffs and water. To date, we have been meeting individual customers' water-related needs by, for example, supplying water for fuel cells or bottled water production. Going forward, however, we intend to adopt a more comprehensive approach in the aim of creating new value from water, such as by contributing to resolving food and energy problems. To do so, we have consolidated R&D functions previously spread among different operating divisions into the Research and Development Division.

Q: What is needed to support the initiatives you have planned?

A: First, the Group must become more resilient to risk. We will strengthen risk-management functions on a group-wide basis and diligently establish and strengthen internal controls to execute these functions. We also need to improve the quality, safety, and productivity of the products, technologies, and services that we provide, and cultivate the requisite human resources to do so. Toward this end, we will undertake activities to "develop our people and pursue manufacturing excellence." I believe that these initiatives will strengthen our management and operational foundations.

Q: Lastly, what is your outlook for the fiscal year ending March 31, 2010?
    And what are your plans regarding future uses of cash?

A: I expect the global recession to persist throughout the current fiscal year. Some customers' capacity utilization rates are showing signs of recovering, but I do not anticipate a strong recovery in capacity utilization. Meanwhile, customers are likely to continue to clamp down on capital expenditure. In the current fiscal year, we plan to steadily recoup existing investments and prepare for future risks. First and foremost, we intend to enhance our financial strength to enable us to nimbly shift into a more proactive mode once economic recovery is underway. We will also resolutely implement the MP-11 plan's priority measures to transform today's inclement operating environment into an opportunity and achieve formidable earnings power.
    In terms of the earnings outlook for the current fiscal year, I see little prospect of an early earnings recovery amid the current adverse operating environment. Nonetheless, we plan to pay annual dividends of ¥34 per share, unchanged from the previous fiscal year, in accord with our stable dividend policy.
    I would like to sincerely thank you - our shareholders, investors, and other stakeholders - for your long-standing support of Kurita. We hope to earn your continued support.

	July 2009
	Hiroshi Saito, President

		Originally from Annual Report 2009