I wish you a very happy new year to all Polyplastics Group employees!

First, I would like to mention that our employees in India and Thailand are now experiencing uneasy days because of terrorist attacks and political turmoil. I sincerely hope that 2009 will be a year of peace in which they will be able to live free from worries.

In October last year, the world economy slowed down sharply which had a large effect on the sales volume of the company's products. The real economic growth rates of Japan, the United States, and Europe all recorded minus growth for the first time since the end of World War II. The slowdown also put sudden brakes on the economies of China and other emerging countries. The financial crisis will probably die down sooner or later, but adjustment of actual economic activities throughout the world will take a long time. The decrease in personal consumption in the United States, which accounts for 70% of the GDP and drives the U.S. economy, will take time to recover. This consumption decrease and the historically low level of interest rates in the European economy indicate how serious the situation is. In addition to the worsening of overseas economies, the value of the yen is rising as the value of the dollar and the euro fall. Japan is faced with the risk that the pressure of the stronger yen will make the bad effects even worse. So we must assume that a shift to economic recovery within this year will probably be difficult.

We will have another tough year this year. The company's income and profits are expected to continue to fall again this year. In such a difficult situation, I would like to explain my thoughts about what we should be thinking and doing.

1. Basic Philosophy for Action
There are three keywords that describe what our basic philosophy for action should be in these troubled times: (1) favorable economic conditions are good, but unfavorable economic conditions are even better; (2) no matter how economic conditions change, a company that stops moving will sink; (3) combine a sense of crisis with a positive outlook.

(1) "Favorable economic conditions are good, but unfavorable economic conditions are even better"
"When the economy is bad, the bad points about the company that normally cannot be seen become visible. If you make the effort to get rid of the bad points, then there will be bright prospects for new growth." These words of Mr. Konosuke Matsushita, the founder of Matsushita Electric (now Panasonic), give us courage in hard times such as we are facing now. This should be our basic philosophy for action.

(2) "No matter how economic conditions change, a company that stops moving will sink"
The current bad economy does not lead to a dark hopeless future. It is certain that economic recovery comes when the bubble economy is adjusted. On that point, it is up to us whether we are able to move ahead of other companies onto a path of substantial growth will depend on how much more effort we make than other companies and how much ingenuity we use to solve the problems we face in this bad economic time. We should not think only about the tough conditions we face right now. Rather, we should also have a dream that company further grows in two or three years from now. We must start work on it to realize it.

(3) "Combine a sense of crisis with a positive outlook"
There is no tomorrow for a gloomy company that is overwhelmed by a sense of crisis and loses its vitality. On the other hand, it is not wise for a company to just have a positive outlook and no sense of crisis. Each person in the company should have a good awareness of the crisis we are facing, but also enjoy the chance to use intellectual creativity to overcome the crisis. Every employee should be energetic and have a positive outlook in taking vigorous action.

2. Specific Strategies for Action
The basic philosophy for action describes the mental attitude we should have. With this mental attitude as a foundation, we would like to carry out the following specific strategies for action.

(1) Continue technological development (new product development, customer support technology, process development) to promote future growth. Be more aggressive in providing resources for development.

(2) Give every effort to development of the new applications and products noted in the above paragraph in order to compensate for the decline in consumer demand caused by the decline in business activity. The capacity for technological development is the company's greatest strength. Now is the best chance for us to gain a competitive advantage by making a contribution to our customers' businesses through making the most use of our utmost skills in marketing, development, and manufacturing.

(3) Protect important customers and partners that are keys for our stable growth in the future by using all of the company's collective strength; this includes being flexible in regard to prices.

(4) Minimize rising manufacturing costs due to decreased production by drastically reducing inventory and efficiently having temporary and partial shutdown of plants to reduce fixed costs.

(5) Use ingenuity to cut back expenses without sacrificing performance. Executive managers should take the lead in implementing creative measures to cut back expenses.

(6) Secure the work force. Gain understanding to implement Human Resources policies that make job security a priority.

(7) Clarify the weak points of the company's businesses by product. Establish a business strategy office for each product in order to strengthen development of key strategies for growth. Also, make necessary organizational changes quickly in order to fortify the company's collective strength.

(8) Make bold personnel changes in order to develop human resources for the future and develop and reinforce the abilities of individuals and the power of the organization by putting the right persons in the right jobs. Regardless of nationality, be aggressive in recruiting people with excellent skills and abilities to fill important positions. Aim to become a multinational company in the true sense.

I would like to explain the reorganization and personnel relocation in more detail in the CEO's Message posted on the Polyplastics Gr. Bulletin Board this month.

Finally, I would like to state on the COC business and the dispute with Celanese.

3. COC Business
The COC business still shows negative earnings. It will take two or three more years before this business is able to contribute to the company's profits. During this period, we must ask our shareholders to inject additional operating capital. To lighten the burden on shareholders and gain their understanding for continuation of the COC business, we will need to clearly demonstrate the prospects for this business during this year. Therefore, this will be a very important year. In addition to expanding sales by developing new markets and applications, we will also explore the possibility of OEM production of products other than COC products for the purpose of reducing costs by increasing operation capacity at the TAP Gmbh plant. To achieve this, we will reinforce the resources of marketing division. Every effort will be made to develop the COC business into the fifth pillar that supports the company's continuous growth.

4. Dispute with Celanese
As you know, we began the litigation with Celanese in October last year. Generally, it would take about two to three years to resolve this kind of legal case, while we leave the door open for mediation or settlement. However, Polyplastics is resolute in the intention to implement the measures necessary to maintain corporate value. This year we will implement several measures, and I am counting on everyone to join together in addressing this matter.

We have many challenging tasks to work on this year. But they will all lead to new growth for the company, so remember that all our hard work will ultimately bring enjoyable results.