MD’s New Year Speech on 11^th January 2010

Good morning, dear colleagues. First of all, I wish everyone here a happy and prosperous New Year 2010. 2009 is a significant year as it was the year to mark the 20^th anniversary of SBS establishment since 1989. It was also a year marked with great pain and grief to the worldwide business community. Due to the global financial crisis originated from the US, many well-established big companies as well as many medium and small size business entities went into bankruptcy. This crisis had clouded our business horizon and brought along with it the economic and business uncertainty. We had in fact, cancelled our 20^th anniversary celebration in view of the business conditions of the Company.
However, with your cooperation and concerted effort, we had managed to get through 2009. Therefore on behalf of the Sumitomo Bakelite Management, I would like to express my sincere appreciation for your understanding and contributions to SBS performance in 2009.
At the same time, we would like to take this opportunity to present the long service awards to our staff, who have faithfully served SBS for the past years, ranging from 3 to 20 years. We recognize our staff for their loyalty to the Company and devotion to their jobs. We are glad to have 43 of them including 4 with 20 years of service, 5 with 15 years, 7 with 10 years and 10 with 10 years and 17 with 3 years.
But before we commence this event, let me give a summary of how SBS had performed in 2009 and at the same time describe to you what SBS will likely face in 2010 in terms of world economic and business environments & conditions.
In 1^st quarter of 2009, SBS had experienced the worst business volume for both EME and CRM since we started EME production in 1989 and CRM production in 1997/8 excluding the business start-up periods of both products. During that period, nobody could ever guess how bad the business was going to be. Would the business be worsened? This question was often asked then. Fortunately, things did not get worse than the 1^st quarter. In fact, it got better from 2^nd quarter onwards. However we can’t be sure that things would not turn bad again.
Now it is therefore crucial that we take a global outlook at 2010 to understand what challenges we would be facing. Although the economic environment shows signs of recovery, it is still fills with uncertainty and fragility. Our business environment is facing slow growth. In the worst case, growth could be stagnant. We are also facing fiercer and keener business competition in order to continue to stay in business. Customers are now more cautious of spending and more demanding in terms of cost, quality, reliability and service.
There are 3 objectives I have set for 2010 to tackle and ride us through these environments. 1. We must consistently provide our customers with quality products in terms of workability, reliability and services. We shall achieve this with good risk management starting from product design (R&D), then to manufacturing and finally, to delivery. 2. We have to constantly be innovative and creative so that we are able to breakthrough old barriers and mindsets in order to create new technology and add value to our products and customers. 3. We have to push harder to reduce our operating costs to keep our product cost down to counter sales price reduction pressure. Thus we need structural cost reduction. To achieve this, we will apply SB-PS aggressively and at the same time, eliminate all possible waste of our resources such as time, materials and products. We will also emphasize on EHS to make sure our work place is safe, clean and healthy, and staff enjoys working. We have to stay as price competitive, not only to stay in business, but to win new business. I therefore seek your strong commitment and cooperation. Let us work together and stay focus to overcome the challenges faced. We have to be aggressive in our approach in implementing our strategies and action plans so that we would be able to achieve our target.
Thank you for your time and attention.