2013 New Year Message from President Mitsuyoshi Shibata

Please let me begin by conveying my best wishes to you all at the start of this new year.

1. Challenging Economic Circumstances and Globalization

Last year brought positive news from various parts of the world, such as the success of the London Olympics. However, global economic conditions are likely to remain challenging following the European debt crisis. While Japanese companies continue to grapple with a strong yen and other adverse conditions, South Korean, Taiwanese and Chinese firms are steadily building real strength. The decline of Japanese companies is now apparent even in the electronics industry, an area where they have traditionally excelled.

A tremendous tide of business consolidation in response to globalization is proceeding. For example, Nippon Steel and Sumitomo Metal Industries have merged. So will Mitsubishi Heavy Industries and Hitachi in the power generation business. Hitachi Metals and Hitachi Cable will also join together. Our Group will also see an integration between Furukawa-Sky Aluminum and Sumitomo Light Metal Industries this coming October. This is an enormous change.

2. Business Structural Reform and the New Medium-Term Management Plan

The Furukawa Electric Group includes  Furukawa Electric based in Japan and more than 300 affiliates worldwide. In the future, our Company and affiliates will share targets and strategies on a segment-by-segment basis to operate in an integrated manner. Each of our business segments will work together with its relevant affiliates to operate as one unit under the business strategy.

It is important that the organization establish a customer- and market-oriented structure.

To improve customer satisfaction, the Sales Division  will build a cross-functional sales and marketing organization.

In addition, we will be announcing a strategy for growth and launching a new medium-term management plan in April. The points of the plan are to accomplish structural reform, to build a strong global management system, and to mobilize all available resources to achieve growth. The year 2013 marks the first year of the plan. It is an important year for gaining a foothold for successful reform.

3. Vision of the Furukawa Electric Group

In the early Meiji era, Furukawa Ichibe, founder of the Furukawa Group, learned that copper wires were vital to introducing electric power nationwide. To fight for a cause of brightening Japan, he worked passionately to overcome numerous challenges. Inheriting his passion, I will strive to brighten not only Japan but the world. More specifically, the goal of the Furukawa Electric Group is to support the lifestyles of people worldwide through its infrastructure business.

The Furukawa Electric Group has contributed to Japan's development through its infrastructure business, which supports people's lifestyles with electric power, telecommunications, automotive and electronic parts and more. I believe that we can make a global contribution in the same way.

4. Building a Working Environment with Genuine Safety and Comfort

Health, safety, and compliance are preconditions for the Company’s existence. I think that the ideal is for everyone to be working vigorously in a safe workplace and returning home with a smile, so that their whole family feels happy. I believe that this is a prerequisite to achieving our goal of brightening the world. In our effort to brighten the world, we will commit to establishing safety and safety awareness, and will make groupwide efforts to build a working environment with genuine safety and comfort. Always remember that the personal growth of each individual member contributes to the growth of the Furukawa Electric Group.

Lastly, I wish you and your family good health and every success.