January 5, 2021
Nippon Paint Holdings Co., Ltd.
Contact Person: Yukiko Yamamoto
General Manager of Public Relations
Email: nphd-kouho@nipponpaint.jp

New Year Greetings from Masaaki Tanaka Chairman, President & CEO

Happy New Year, everyone.
I hope you are back with refreshed and renewed spirits in the first day of work this year.　Last year, the COVID-19 pandemic dramatically changed our lives and raised the question of how society can coexist with viruses.

Nippon Paint Group’s operations also were impacted to a certain extent by the COVID-19 pandemic. However, our partner companies including NIPSEA, DuluxGroup, Dunn-Edwards and Betek Boya achieved a quick recovery by leveraging their strengths. Last year, we made great strides toward global integration of our group’s operations.

We are building on the strengths of our Spider-web management and we identified new business opportunities created by today’s so-called new normal. As a result, Nippon Paint Group performance clearly reflected the strengths of its solid business foundation and resilience to challenges.

Now, I would like to look back on the NPHD Group’s accomplishments during the past year. 2020 was the first year of our group’s transformation to lay the groundwork for a giant leap forward. During this year, we ended a period when we essentially remained within our shell and set the stage for rapid expansion and progress.

However, our business environment changed drastically end of January in 2020 due to COVID-19. We quickly responded to this crisis by placing priority on ensuring the safety of our employees worldwide, increasing liquidity and establishing a business continuity plan. We were also quickly switched to telework.

On the other hand, I thought we must reinforce our corporate governance in order to integrate our operations worldwide faster. This is why we transitioned to a governance structure with Three Committees after receiving the approval of shareholders in March 2020.

In May, when COVID-19 infections were increasing rapidly in Japan, we set up Advanced Product Development, an R&D unit dedicated to developing anti-viral products. Immediately after that, we concluded an industry-academia co-creation agreement with the University of Tokyo. Our Research and Development Division and the Advanced Product Development unit started working with professors at the University of Tokyo even before the launch of the social collaboration program in October. The goal is to develop innovative solutions for social issues by using our paint and coating technologies.

In September of the same year, we launched PROTECTON, a new brand commonly used by our group companies in Japan for anti-viral and anti-bacterial products for DIY and business use.

Another major event of 2020 was the progress we made with the acquisition of 100% ownership of the Asia joint ventures with Wuthelam Group and the Indonesia business. This finally brings our almost 60-year partnership with NIPSEA to the final stage. As a result, Nippon Paint Holdings and NIPSEA will become a Global One Team in name and reality in January, 2021. In the wake of this ownership change, our group’s automotive coating business was realigned to a global platform centered on NPAC, which started operations today.

Furthermore, we accelerated our plans to invest in production bases in Japan during 2020. The Chiba Plant, a powder paint plant of Nippon Paint Industrial Coatings in the industrial coatings business, was completely redesigned in June to allow the use of digital technologies and incorporate ESG considerations. In 2021, our investments in Japan will be focused on the digitalization of supply chains and rebuilding of supply chains. In October, we also began nationwide broadcasting of TV commercials to convey the excellence and appeal of our paints, which have received a great response from various sources.

We will complete the acquisition of 100% ownership of the Asia joint ventures and the Indonesia business as well as the associated third-party allotment of newly issued stock by the end of January.
In 2021, the IMF World Economic Outlook projects GDP growth of 5.2% worldwide, 2.3% in Japan and 8.2% in China. The distribution of COVID-19 vaccines started late in 2020. The Japanese government, the Tokyo metropolitan government and the International Olympic Committee are making preparations for the Tokyo Olympics and Paralympics scheduled for this summer. In view of these recent developments, I chose “re,” as in recovery, resilience, and return to normal, as the letters that embody my expectations for this year. All these “re” words express the hope for and commitment to creating an environment for moving forward. For the time being, however, we must continue using rigorous measures to prevent the spread of COVID-19.

In such a changing environment, 2021 will mark the start of a new medium-term management plan, as well as the 140th anniversary of our group's founding. It is only through your support that we have been able to continue our business after 140 years. I would like to thank you once again. As a group, we will do our utmost to repay your kindness and look forward to the future.

I sincerely hope that this year will be a wonderful one for all of you.
I appreciate your continued support this year.