Message from the President

The business environment in which Idemitsu operates faces unprecedented levels of uncertainty. Increasing geopolitical risk driven by mounting tensions in the Middle East has spurred a renewed focus on the importance of energy security. An array of factors is also interacting in complex ways, including the building of new supply chains to address shifting trade policies in various countries and geopolitical factors, along with rapid innovation in AI and other technologies. Furthermore, global moves toward carbon neutrality are not uniform, but have reached a stage where various countries and regions are being called upon to respond realistically based on their particular context.
I believe the Group has a clear role to play in this environment: to continue to provide a stable supply of energy and　materials that support people’s daily lives and industrial activities. At the same time, looking to the future, we must undertake transformation that will enable us to provide the new value that will support society to come.
Since its foundation in 1911, having upheld Ningen-Soncho (Having respect for human beings) as the foundation of its management, the company has practiced thorough “people-centered management,” guided by a Management Philosophy of being “Truly inspired.” Our employees have worked together as a team to start up businesses that contribute to society and followed through with implementing these businesses in society. I believe the cumulative impact of these efforts has shaped the strengths of the company. Taking these values to heart, since my appointment as President I have adopted a basic management stance that emphasizes balance. Without being swayed by changes in the business environment, I strive to discern what is worth preserving and steadily work to change what should be changed. Enhancing the profitability of existing businesses in a stable manner generates the cash needed to drive the next phase of growth—this cycle is the central axis of my management.
Even in an increasingly adverse environment, employees on the front lines are taking action each day to support the stable provision of energy and materials. I believe it is precisely individual employees fulfilling their role as “Your Reliable Partner for a Brighter Future” who together form the underlying strength of the Group, and who will be the foundation supporting our transformation going forward.

Under the previous Medium-term Management Plan, the Group fulfilled its mission of providing a stable supply of energy and materials with a view toward realizing our Vision for 2030 to become “Your Reliable Partner for a Brighter Future.” At the same time, our efforts to reform the business structure made headway, further enhancing the capital efficiency and profitability of our existing business and laying the groundwork for a carbon-neutral and circular society. Our human resources strategy, the core of the company’s management, focused on maximizing employee growth and engagement through investments in human capital. We also took steps to pursue digital transformation (DX) and more sophisticated governance as a platform supporting these initiatives.
I believe our ongoing efforts to reform the business structure yielded results to some extent— we met our profit and ROE targets. At the same time, these results also reflect the beneficial impact of factors in the external environment, such as fluctuations in crude oil prices. Going forward, we must be tenacious in seeking to build an even more robust, more stable earnings foundation that is resilient to changes in the environment, and to further enhance capital efficiency.
At the same time, looking ahead to realizing a carbon-neutral society in the future, we strengthened various initiatives through collaboration with numerous partners. The knowledge and networks we have gained through these initiatives are powerful assets for expanding our future options. On the other hand, the context for carbon neutrality has shifted since we formulated the previous Medium-term Management Plan, and the time frame leading up to the point at which society achieves this goal warrants careful consideration. I believe it is vital to take the time needed for preparations and deliberation, weighing factors such as technology, cost, and the external environment, and to seek a greater sense of certainty in stages.
For this reason, although the previous Medium-term Management Plan bore fruit, we also have to reconsider the question of how the company will create value over the medium to long term amid increasing uncertainties in the business environment. Here, we have steadily consolidated our foundation as we formulated a new Medium-term Management Plan with an eye to future growth.
​

In light of the increasingly uncertain management environment, the Medium-term Management Plan (FY2026–2030) looks to rebalance our business strategy and enhance our “growth power” through a more pragmatic approach to achieve sustainable growth and increase corporate value. By pursuing both our business and human resources strategies, and linking these organically with our business platform to support and accelerate the strategies, we will reach our various financial targets and ultimately realize our Vision for 2030 to become “Your Reliable Partner for a Brighter Future.”
Under the business strategy, we will pursue co-creation with various partner companies across our five business segments based on three themes: GRIT: Exploiting existing businesses; GROWTH: Creating growth businesses; and CNX: Staging up low-carbon / decarbonization businesses.
Through collaboration across the Group’s diverse businesses, we aim to realize a conglomerate premium that will elevate profit levels for the Group as a whole. In specific terms, this initiative involves dispatching personnel in charge of the electric power business to branches in Japan. As such personnel join the staff at our branches, which focus primarily on the sales of petroleum products, our authorized dealers have begun to engage in the electric power business as well. Going forward, we will create a framework capable of providing a range of products and services, including electricity, in an integrated manner. There are synergies that Idemitsu is uniquely able to generate due to our wide-ranging business portfolio. As we create value that exceeds the sum of our individual businesses, this will further enhance corporate value and contribute to the resolution of social challenges.

GRIT stands for Guts, Resilience, Initiative, and Tenacity. It expresses the ability to finish what we set out to do.
In our existing businesses, centered on petroleum, we will tenaciously carry out initiatives to enhance competitiveness across the value chain, from procurement to manufacturing, distribution, and sales. With top priority on the safe and stable operation of our refineries and complexes, we will steadily reinforce the management of security, operations, and facilities, while stepping up initiatives to boost utilization rates. Specifically, in addition to strengthening on-site capabilities, we will capitalize on digital technologies to achieve more sophisticated operations and facility management, invest in improving utilization rates, and promote stronger collaboration between the head office and complexes, targeting even more stable operations. On the sales front, building on our nationwide network of roughly 1,000 dealers and 6,000 apollostation brand service stations, we will seek to forge deeper ties with local communities and reinforce the network so that our service stations continue to be the preferred choice of customers.
We will continue to take rigorous action with regard to underperforming businesses—namely, the Nghi Son Refinery in Vietnam and the basic chemicals and power and renewable energy businesses. We have been systematically restructuring these businesses since the previous Medium-term Management Plan. The Nghi Son Refinery in particular has achieved positive operating income for five consecutive years (excluding inventory impact), while the power and renewable energy business is also narrowing its losses. Although earnings improvement in the basic chemicals business has been delayed due to worsening market conditions, we will step up the pace of structural reforms, including optimizing production capacity through the consolidation of ethylene plants and strengthening our competitiveness in derivative products.

Our policy on approaching the low-carbon and decarbonization business remains unchanged, and we will continue to take on the challenge of realizing a carbon-neutral society. The context of carbon neutrality has shifted recently, however, including changes to the timeline for decarbonization. This calls for us to discern a more realistic pathway toward achieving carbon neutrality in society. I do not consider energy security and carbon neutrality to be in opposition, and believe we should approach both issues together. Today, as the issue of energy security is again being examined, it is crucial to enhance the resilience of the supply structure itself, with an eye to the future. Since Japan is susceptible to impacts from the external environment in terms of energy procurement, I believe building a supply framework that is not overly reliant on particular resources will help ensure stable supply in the future.
The low-carbon and decarbonization business will not produce visible results within a short time frame. For just this reason, we must discern the direction of change in society and industry to ensure that we can offer appropriate choices in various phases by moving forward in laying the groundwork in areas such as technology, business infrastructure, and alliances with partners. I consider this to be our responsibility as a company that deals in energy.

The most critical management resource for Idemitsu is our people. Underlying this belief is our fundamental management principle of Ningen-Soncho (Having respect for human beings). Trusting people do their jobs responsibly and enabling them to gain experience in using their own judgement and seeing things through to completion continues to be the source of the overall strength of the Group.
I myself, as a junior employee, once had a customer tell me that “Idemitsu always sends younger representatives, and they make their own decisions on the ground and take responsibility for dealing with us.” Since its founding, the company has a saying: “Each and every employee an entrepreneur.” I see the fact that people outside the company remark on the proactive attitude of individual employees as a real strength, which highlights Idemitsu’s unique character.
Building on this fundamental approach, the human resources strategy in the Medium-term Management Plan is grounded in two key concepts: “Empower all employees to be the main drivers of transformation” and “More co-creation / innovation.” One person alone cannot achieve transformation. As individual employees gain a deeper sense of engagement and personal growth, and as we foster a sense of organizational unity based on the Action Guideline, this will become the foundation for steadily moving forward with transformation.
We will also speed up initiatives to support co-creation and innovation. In addition to collaboration with outside partners, we also emphasize horizontal collaboration within the Group. Mutual understanding and personnel exchanges across Group departments are the objectives of our Job festival. The festival has been a venue for more active information exchanges among employees than ever before. I’ve been very pleased to see the steady formation of a culture that naturally gives rise to collaboration across organizational boundaries.
Individual employees are the main drivers of transformation. As all of our employees seek to think for themselves and take action, this will steadily heighten our organizational capabilities.

We are shoring up the business platform that forms the bedrock of our business and human resources strategies. This will give us a more robust foundation to steadily execute both strategies and deliver future growth. In terms of digital transformation (DX), our initiatives go beyond the scope of conventional DX to encompass AI-based management process optimization. Our intellectual property strategy has also taken a step beyond existing activities focused on rights protection to include the implementation of both defensive and offensive strategies for the entire IP portfolio. In a business environment where co-creation is taken for granted, it is essential to consider how to generate value from our intellectual property.
We plan to complete construction of an Integrated Research Institute (tentative name) in March 2028. By integrating dispersed research units and building an R&D framework that spans our businesses, while also strengthening collaboration with outside partners, the laboratory will serve as an integrated framework to handle all stages, from R&D to commercial production. OLED materials, a mainstay product for Idemitsu, have now grown into a stable profit-generating business, after more than 40 years of basic research culminated in the provision of these materials to society. Solid electrolytes are another development that we have advanced by focusing on the sulfur compounds generated by the petroleum refining process and drawing on the research capabilities and technical expertise we cultivated over many years. Ahead of the practical implementation and commercialization of all-solid-state batteries, we are making steady headway in validating mass-production technologies and establishing a supply framework.
Without being distracted by short-term results, we will forge ahead with basic research and link this research to needs in society. I believe the cumulative impact of these efforts is one source of the company’s competitiveness. With the new integrated laboratory serving as a hub, we will steadily increase the speed and accuracy of our value creation through co-creation both within the Group and with outside partners.
​

Precisely because we live in a time of uncertainty and chaos, I believe we are being called upon to demonstrate to society the concrete results of our Vision for 2030 to become “Your Reliable Partner for a Brighter Future.” FY2026 is the initial year of the new Medium-term Management Plan. We will enhance profitability in the near term and generate investment resources for the future. We will use these funds to propel GROWTH and CNX initiatives, paving the way for our next stage of growth. To this end, we will further develop our people, businesses, and technologies, which are the Group’s strengths.
Dialogue with stakeholders plays an essential role in achieving this. We will reflect insights gained from dialogue in management and feed back the insights into our dialogue with employees, sharing them across the organization.
We will continue to practice “people-centered management” as we drive the Group forward as one Group.
To continue to fulfill our responsibility to protect both the daily lives of people around the world and the natural environment, thus Shaping Change, the Group will inspire the future with energy and materials.
I sincerely ask for your continued understanding and support.