(Shimizu) A higher market share through organic growth, new product growth, and new applications account for the greatest part.

(Shimizu) From a competitive perspective, many of these products naturally have high-added-value and do not compete through red ocean strategies. In short, those products that thrive in areas with little competition fall under the Premium Framework. You can therefore assume that the operating profit margin also increases in step with the gross marginal profit rate.

(Shimizu) It is hard to say in general, but we also foresee further increases in the utilization rate going forward since we are focused on expanding Premium Framework products. At the very least, we have not previously mentioned that the utilization rate is high for general-purpose products and low for those in the Premium Framework.

(Shimizu) For business purposes, I cannot answer your question about which specific product names fall within the Premium Framework. But as you pointed out, the Premium Framework has included more and more products such as ZEH housing over the years. We also include other products that are starting to find new applications, which are increasing in number.

(Tada) We revise the Premium Framework every three years along with the Medium-term Management Plan. On the other hand, we also release new products over this period. Of the new products released during the period of the Medium-term Management Plan, those that fall under the Premium Framework are newly certified as such. I therefore feel there is continuity when seen on a medium-term basis.

(Tada) Including biorefineries, any new products that we launch to the market in the future are basically assumed to fall within the Premium Framework. On the other hand, we have been conservative in calculating figures in the Medium-term Management Plan for biorefineries and other new businesses.

(Tada) Those products that drive the Company's business and those that we will focus more resources on in the future, without question, fall under the Premium Framework, which will unquestionably grow sales in the Premium Framework going forward.

(Miura) As was explained a moment ago, this growth is due to expanding product applications. In FY2022, we formulated our resource recycling strategy, and reviewed our products in terms of how they contribute from this perspective. This is one of the reasons why growth has been so strong.

(Shimizu) One of our indicators for DX-driven outcomes are the improvements in direct and indirect department productivity. Sales growth, however, will for example arise from actual increases in sales as well as more efficient marketing activities resulting from DX-based sales innovation activities. We assume these two.

(Tada) We have not released any numbers. Internally, we use direct and indirect employee productivity as indicators. Specifically, we look at the degree that net sales increase when divided by the number of direct and indirect employees, as well as the resulting amount of productivity, performance, and added-value in conjunction with the gross marginal profit rate per person.

(Shimizu) The Integrated Report provides the numbers for productivity, and we aim to achieve a 30% increase in direct employee productivity in FY2030 compared to FY2019.

(Kamiwaki) In all honesty, we are still looking into different business models, but seen more broadly, we feel that licensing and commercializing our technologies and know-how will serve as a high-added-value business pattern. On the other hand, another business pattern would be to actually distribute the ethanol produced from waste as plastic raw materials, and sell these with added-value by providing them with brand value. Although these are the two business models, generally speaking, we feel there is sufficient potential to transform either into a premium business if we appropriately highlight and add the value of resource recycling from our standpoint.

(Shimizu) Any products or businesses that lose growth potential sound the alarm as soon as their cost of capital reaches 7 to 9% and their ROIC falls below this. Moreover, we also make judgements to proceed or stop based on profitability. For example, as soon as products in the High Performance Plastics Company fall below an operating profit margin of 5%, this is the stage when we consider withdrawing them from the market.

(Shimizu) From an inter-segment synergy perspective, for example, perovskite solar cells use elemental technologies from the High Performance Plastics Company, whereas their installation falls under the strengths of the Urban Infrastructure & Environmental Products Company. One of the ideas we have for using these in different ways in the future, for example, might be to lay them over the solar panels currently installed on SEKISUI HEIM homes when their output falls after twenty or thirty years.

(Okano) We are also aware of issues with the product matrixes in terms of how to present them in the future. As you pointed out, we often describe products by segment, yet we do intend to change how we present them in the future, for example, by showing them to specific customers based on the synergy within these matrixes.

(Shimizu) In terms of MI, as you pointed out, one key point is that we use this to rapidly develop products and release them to the market more quickly. Another one is that by attaching sensors to various parts of our production processes, we can dramatically reduce the number of problems as we quickly recognize or even predict changes in quality and machine operations. In this way, we are also advancing these approaches as a part of DX in a way that allows us to consistently produce products with reliable quality.

(Shimizu) Our investment in MI falls outside the scope of ¥20 billion. We established a specialized team within the R&D divisions, in which we invested a fair amount of management resources along with human resources to ensure it functioned as a leading group, even within Japan. We successfully increased the speed of development by inputting various data that allowed for development to proceed almost entirely through simulations and by bringing the results to completion once final confirmation testing is finished. We focused quite a bit on this area in order to avoid falling behind in development.

(Shimizu) This was not a solo effort, and instead relied in part on sharing those data that could be shared between multiple companies. The data that we must possess as know-how is handled internally. This approach increases the amount of data that can be differentiated and enables different simulations.

(Shimizu) Premium Framework products, in particular, stand alone, or have minimal competition. As far as we are concerned, we present a price that reflects their high market value, at which our customers purchase our products. Higher volume does to some extent result in a volume discount, but we feel it is important for customers to first understand the value of the product.

(Hatanaka) In the pharmaceuticals industry, in which I was previously involved, Japan and some countries in Europe set official prices, whereas that is not the case in the US, where my company worked to steadily showcase the added-value we provided to that market, which offers the highest growth potential and high profitability. Yet even the Japanese market possesses institutional structures that allow prices to drop, which is why I feel that each company acts to clearly promote the value of their drugs. SEKISUI CHEMICAL’s growing products also maintain extremely high price competitiveness, including those Products to Enhance Sustainability in the Premium Framework, in particular. I am also aware that the Company’s products maintain an advantageous position compared with the competition. Prices sometimes decline as products evolve into commodities, so I myself believe it is important to firmly secure profitability while products still offer value.

(Shimizu) To date, we have approached intellectual property by making targeted investments. Although we previously looked to output quantity, currently we are transitioning to quality. We are particularly focused on, and feel important about, whether these assets can be used to block market competition. Recently, for example, we have published incidents where competitors have infringed upon our patent rights for interlayer film for laminated glass. We will expand the number of patents that can block this kind of market competition. I am proud that third-party organizations have recognized us for the scale of our intellectual property, as well as our ability to restrain competitors.

(Shimizu) I believe so.