The power of our “people” behind our 120-year history

In April 2026, we celebrated the 120th anniversary of our founding. On this significant milestone, I reflected on “what has sustained us throughout our 120-year journey.” Since our founding in 1906 in Kobe City, we have continuously pursued firsts in Japan and around the world. From belts and film products to, more recently, electronic materials and medical devices, we have consistently responded to the needs of key industries while continuing to create new value that contributes to society. I believe that it is the power of our “people” working across all divisions that has sustained us throughout this journey.

Throughout our history, our manufacturing, technology, sales and administrative divisions have each fulfilled their respective roles while working closely together to create value. In our manufacturing division, we have remained steadfastly committed to manufacturing, placing the highest priority on the safety, security, and quality of the products we deliver to our customers. Guided by our belief that “manufacturing is about developing people,” we have continued to identify issues, work together to develop solutions and make continuous improvements, thereby fostering talent and steadily strengthening our on-site capabilities. In our technology division, even amid major changes in the industrial structure, each and every one of our engineers has sincerely addressed emerging needs and continued to bring innovative technologies to the world, thereby helping us live up to the trust our customers place in us. In our sales division, we have continued to visit our customers’ sites, accurately identifying their needs from their perspective, while remaining at the forefront of the market and staying ahead of change. And it is our administrative division that has supported all of these activities and fostered an environment in which each division can perform to its fullest potential. I believe that the organic integration of the strengths of these four divisions and the synergies they generate have been the driving force behind our sustainable growth and the foundation that has supported our 120-year journey. At the heart of this lies our management philosophy, “with a spirit of harmony and in good faith,” which continues to guide everything we do. By cherishing this spirit, we will continue to respond flexibly to changes in society and contribute to the realization of a sustainable society.

Business portfolio transformation to address risks and opportunities

The external environment surrounding the Group is becoming more uncertain than ever, with challenges such as more frequent natural disasters and heightened geopolitical risks. In an increasingly unpredictable world, companies must minimize potential risks wherever possible and take precautionary measures on an ongoing basis in normal times in order to achieve sustainable growth. At the same time, flexibility and agility in responding to constantly changing circumstances are equally essential. We will continue to ask ourselves what is best in each situation and make sound and timely decisions by bringing together expertise from both within and outside the Group.

From the perspective of ensuring business continuity and transforming portfolio in response to changes in the external environment, we have, for example, been building sales and production structures capable of adapting to changes in the business environment, including the shrinking market for internal combustion engine vehicles driven by the shift toward EVs. As a result, we ceased production at Bando USA, Inc. in March 2025 and transitioned to a structure under which production is supplemented by facilities in other regions. Meanwhile, we will continue to optimize our business portfolio from a medium- to long-term perspective, viewing the shift toward EVs as a new opportunity for growth.

Sustainability and value creation

Sustainability is both a foundation for the Group’s sustainable growth and an important theme in terms of how we can contribute to society through our business activities. As we work toward realizing our “Vision 2050” to become the “Best Partner that supports people and society and connects the present with the future,” we position sustainability as a cornerstone of our growth strategy. Under our current Mid-Term Management Plan “Creating New Value for the Future” 1st Stage (“CV-1”), we are steadily strengthening the foundation toward sustainable increase in corporate value by linking our “Sustainability activity themes,” which are based on the material issues we have identified, with our initiatives. Specifically, we are confident that continuing to create value through products and services that contribute to solving environmental and social challenges will lead to the realization of “Vision 2050,” and such efforts include the development of products under our own environmentally-friendly brand, “eco moving,” and initiatives in the medical and healthcare device fields, where demand is growing amid an aging society.

The Group promotes sustainability activities across the organization, led by the Sustainability Committee. In fiscal 2025, in light of changes in the social environment since we identified our material issues in fiscal 2017, we began considering a review of those issues.

Evolution and enhancement through “joint creation”

“Creation of value,” one of the CV-1 guidelines, which entered its third year in fiscal 2025, aims to evolve new businesses and enhance core businesses through “joint creation.” As part of our efforts to evolve new businesses, we developed “Silver Arrow^™,” an outdoor radiative cooling film, and started test-marketing it in July 2025. This product contributes to reducing environmental impact by adding energy-saving value to our proprietary film processing technology. In addition, we are also making steady progress in areas with strong social needs, including the launch of the “HEATEX^™ TG900 Series” heat-dissipation grease, which supports enhanced performance of electronic devices and other equipment, and the selection of “B4S^™,” a swallowing movement monitor, as a device that falls within the priority area of “Meal and Nutrition Management Support” for the use of care technologies.

In enhancing our core businesses, we launched “Mr. Pro Carry^™,” a logistics conveyor belt with excellent low-noise performance and lateral rigidity, in October 2025. In addition, products such as our heavy-duty double cog belts, launched in 2024 and featuring the world’s first cellulose nanofiber-compounded rubber belt, have earned high praise in the market. In fiscal 2026, the final year of CV-1, we will further accelerate these initiatives and achieve the creation of value at a higher level.

Creating an organization capable of getting the best out of people

In April 2026, we introduced a new personnel evaluation system to respond to changes in the business environment and the need to create new value. In recent years, employees’ values have become diverse, with a growing emphasis on “a sense of contributing to society” and “fair evaluation.” In light of these trends, the new system is designed to encourage employees to take on challenges proactively while fostering an organizational culture that promotes joint creation through mutual recognition and appreciation. In introducing the new system, we sought to ensure its successful adoption by engaging in careful dialogue at each site and building understanding and acceptance among employees. We will continue to pursue management that brings out the full potential of our people.

[Sustainability activity themes]

Fiscal 2025 and current initiatives
In fiscal 2025, the eighth year under the “Sustainability activity themes,” some progress was made in each theme.

[Products and services]
In fiscal 2025, the ratio of environmentally friendly products among the total newly marketed products was 63%, achieving the target of "50% or more" on a non-consolidated basis. In fiscal 2025, the CO₂ reduction contribution, which we began calculating in fiscal 2024, amounted to 71,075t- CO₂. This is equivalent to approximately 87% of the Group's Scope 1 and Scope 2 CO₂ emissions, demonstrating our contribution to reducing CO₂ emissions through our business activities.

[The environment]
The Group is working toward achieving carbon neutrality by reducing its CO₂ emissions to virtually zero by 2050. As part of these initiatives, we installed a solar power generation system at our subsidiary in Vietnam, which began operation in April 2026.
In May 2026, we also set a new Group target to reduce CO₂ emissions by 42% by 2033 from fiscal 2023 levels. To achieve this target, we will steadily advance our initiatives in collaboration with Group companies, including the introduction of solar power generation systems, upgrades to high-efficiency equipment, and the reduction of energy losses.

[Labor/Safety]
As part of our efforts to prevent secondhand smoke, we prohibited smoking during business hours at our domestic plants and affiliates from April 2025 and will make all premises completely smoke-free from April 2028. In March 2026, we were selected as one of the “2026 Outstanding Organizations of KENKO Investment for Health (large enterprise category)” in recognition of our initiatives for health and productivity management. In addition, as part of our initiatives to improve employee engagement, we launched “BANDO+,” an internal portal app designed to facilitate communication among employees, and are working to create a comfortable and vibrant workplace.

[Compliance/Human rights]
The Group provides human rights education using videos for all employees and continues to raise awareness of the importance of respecting human rights. From the perspective of respecting human rights throughout the supply chain, we conducted investigations further up our supply chain and assessed potential risks through on-site inspections of processing plants and other facilities. In addition, we strive to ensure thorough compliance with laws and regulations and fair and transparent transactions, including by taking steps to comply with the Act on Proper transactions with Small and Medium-sized Entrusted Business Operators, which came into effect in January 2026.

[Stakeholder communication]
We promote environmental conservation initiatives, including participating in the “Kobe Kokage (Tree Shade) Project” in Kobe City and making donations to tree-planting activities. We also presented a corporate exhibit as part of the second-phase renewal of Bando Kobe Science Museum (Kobe Science Museum), for which we hold the naming rights, as part of our efforts to support the development of the next generation and science education. We believe it is important to continue delivering value through these activities, thereby meeting the expectations of our stakeholders and maintaining their trust.

We have a history of continuously transforming ourselves “with a spirit of harmony and in good faith.” While taking pride in our 120-year history, we will not be complacent with where we are today and will continue to take on challenges to pave the way for the next era. As a manufacturer, we will continue to support industry and contribute to the development of Japanese society. With this strong sense of mission, we will work as one to steadily advance our initiatives in the final year of CV-1.

We appreciate continued understanding and support from our stakeholders.

August 2026

President and Representative Director, Bando Chemical Industries, Ltd.

Tomio Ueno