Message from the President

At the Idemitsu Group, we fulfill our responsibility to stably supply energy. At the same time, we are working to achieve an energy transition which will contribute to the realization of a carbon neutral society by 2050.
Looking at the world, we see the various geopolitical risks that are occurring, such as the Russian invasion of Ukraine and the conflict between Israel - Hamas. These risks have again shed light on the importance of energy security. We understand that we must steadily fulfill our mission to ensure the stable supply of the energy supporting people’s lives and economic activities, which is therefore extremely important.
We were founded as Idemitsu Kosan. While we deal in petroleum which is an important product, our founder publicly stated that “Our business is to develop human capital, and the petroleum business is the means for that.” He did not say that we would continue to deal in petroleum forever.
More than 50 years before it was said that petroleum would be depleted, we began to work on businesses involving different types of energy that are alternatives to petroleum and that are in line with the times, including geothermal, solar and biomass energy. In the early days after the founding of Idemitsu Kosan, we began to work on businesses dealing in lubricant oil and other products in overseas countries. At present, as a part of our trans-Pacific strategy, we deal in various types of energy, mainly in Singapore, the west coast of the US, and Australia, and this has become a key feature of our business.
Throughout its history, Idemitsu Kosan has engaged in a　wide array of businesses and established a culture of taking　on challenges related to energy.
We have been working on businesses involving sources of　energy that are alternatives to petroleum by anticipating the　future from the perspective of addressing climate change,　which is a global issue. In the relatively near future of 2030, important technological innovations will be occurring while there will be remaining demands for conventional energy and materials. I　believe that we will realize the energy transition as a main　player in throughout the period from a carbon neutral society by 2050.

All of our employees will be “Your Reliable Partner for a Brighter Future.” Throughout the 113 years since our foundation, we have been practicing People-Centered Management. For a company to survive for more than 100 years, it must overcome major environmental changes and various challenges. We develop people through businesses and have been able to overcome the changes and challenges because of the human capital we have developed. It is impossible to predict the changes that will happen in the future, but as long as we have developed human capital, we will be able to manage our businesses in anticipation of the next era, no matter what the environment will be. I think it is important to achieve human capital development by overcoming the challenges we face, one by one.
Accordingly, our slogan is: All employees play a key role. I believe that all employees, from those working on the front lines to the employees supporting them in back-office sections, are fulfilling important responsibilities, and that retaining and cultivating diverse individuals within the company is key to developing our ability to respond to changes in the environment. I myself will also set the challenging goal of enabling us to remain a main player 10 and 20 years from now and demonstrate my willingness to aggressively take on challenges.
While human capital management has become standard practice now, we have been positioning people as capital in our management since our foundation in 1911. Furthermore, we do not position human capital as a platform but believe it is fully integrated with business management. Success in business and human capital development are two essential elements of management. While this policy will remain unchanged, we will work on human capital strategies and the disclosure of information in accordance with the demands of the times and society. 
For example, we have set KPIs including the percentage of managers that are women, the percentage of eligible male employees taking childcare leave. Furthermore, in April 2024, we established the Career Design Department and the Idemitsu Employee Association to support employees’ self-directed career development. We will retain and develop diverse human capital by providing support in accordance with the life and career of each employee.

We are currently reforming the structure of our businesses, taking steps one at a time toward the achievement of carbon neutrality by 2050.
We have accumulated knowledge, technology and infrastructure because we have taken on challenges in a wide range of fields beyond the area of petroleum. Leveraging this knowledge, technology, and infrastructure, we selected 16 projects in November 2022 as new businesses with a high possibility of social implementation. A big step we took in FY2023 was the designation of four key areas by investment screening for the achievement of carbon neutrality. Specifically, we decided to concentrate on blue ammonia, e-methanol, SAF, and lithium solid electrolytes and prioritize them in our investing and allocation of resources.
The important point in the process of narrowing down to these four key areas was determining the time frame. It is very difficult to select and work on only one of the 16 projects. If we build a supply system when there is no demand, users will not use the goods that we supply. We will anticipate the changes in demand as we move toward carbon neutrality and determine when to supply things based on our forecasts. We will thus achieve both the stable supply of energy and the energy transition toward decarbonization without losing sight of the time frame. This is a responsibility that we should fulfill.
In these new businesses, official assistance such as support from the national government remains necessary until the businesses become economically viable. Partly reflecting this environment, we selected businesses in areas where the formation of a market is believed to be extremely probable and where we can’t lose any time in working on them.
Accordingly, it is fully possible that we will work on businesses other than these four depending on demand and other future trends. Other areas are also extremely important, and research into subjects that may possibly be commercialized by 2030 or 2050 will be lost if not continued. In January 2024, we announced that we will mostly consolidate our R&D bases scattered across 13 locations in Japan by establishing the “Innovation Center” (tentative name), a new integrated research center. We will carefully nurture our research resources mainly at this integrated research center toward the realization of carbon neutrality and a circular society.
We will continue to evaluate and review investments to move toward carbon neutrality. We will identify market demand as well as global trends related to and movement toward carbon neutrality by raising the antenna high and sharpening our senses.
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We started to engage in ROIC management that is conscious of the cost of capital and capital efficiency before the Tokyo Stock Exchange published the Action on Cost of Capital-Conscious Management and Other Requests in March 2023. The Board of Directors discussed ways to enhance these initiatives. As a result, as we announced in May 2024, we aim to achieve an ROE of 10% in FY2025 and a PBR of 1.0 as quickly as possible by improving the capital efficiency of existing businesses and reallocating cash.
While the energy transition toward achieving carbon neutrality in the future tends to be the central theme of management, the current five business segments will continue to lead the management of the Group at least until the mid-2030s. I think that enhancing the capital efficiency of existing businesses is also extremely important for achieving the stable supply of energy and materials that is needed now.
While allocating cash from the cash flow generated by enhancing the capital efficiency of existing businesses to strategic investments for growth and increasing shareholder returns, we will also pursue adequate shareholders’ equity and work to continue to enhance our corporate value.

We are challenging the extremely difficult task of energy transition. This is not something that can be achieved by a single company or a single industry. Instead, we must approach this task together with diverse partners that transcend the boundaries between companies, industries and countries. To achieve this, we recognize that it is more important than ever to expand opportunities for communication with stakeholders and to disseminate information in real time.
Specifically, we hold events to enable individual investors to better understand our Company, such as visit tours of our business sites and tours for learning about our roots. As for communicating information, we significantly renewed our corporate website in March 2024. We have improved the site’s usability and have begun sharing information about the challenges the Idemitsu Group has taken on as it moves toward 2050 while disclosing more information about our businesses. In addition to introductions to our Management Philosophy and businesses, we post a wide range of both financial and non-financial information in real time. We invite you to visit our website.
In this chaotic world where we cannot see what the right answer is, we must collect the wisdom of diverse human capital, rather than being driven by a single set of values. I strongly hope that, to do this, we will remain a group of diverse human capital where all employees are leading players who can take ownership of issues, respect and accept the values of other people they engage with internally and externally and move forward with co-creation and collaboration. As president, I will value and practice teamwork-based management, through which I will make the optimal management decisions by always sharing information with the other members of the management team and working together with them. Our diverse human capital will fully demonstrate their capabilities and open up the way to a new era as “Your Reliable Partner for a Brighter Future.” I would like to sincerely invite our stakeholders to increase their insights into our initiatives and respectfully ask for their continued support and cooperation.