2026 New Year's Message

As we begin this new year, I am pleased to extend my warmest greetings to everyone working for the JFE Group.

Introduction

Last year, when we introduced our Eighth Medium-term Business Plan (8th MTP), we asked all JFE Group employees to think about their respective businesses, organizations, and individual purposes and related long-term goals and aspirations. In addition, we formulated a purpose statement for each operating company, and also our long-term JFE Vision 2035. The vision sets out two goals: becoming a leader in developing carbon-neutral technologies and expanding our consolidated business profit (segment profit: ¥700 billion). To achieve these ambitious goals, we can steadily achieve profitability by fiscal year 2035. We will accomplish this plan by developing advanced technologies, launching investments in growth projects, rebuilding our domestic structure, and expanding our overseas business profit. As the second year of our 8th MTP, 2026 will be an extremely important year.

Reflecting on the Seventh Medium-term Business Plan

During the latter half of our 7th MTP, the business environment worsened beyond our expectations, and it remains challenging today. Nevertheless, we successfully completed major structural reforms to enable our steel business to shift focus from quantity to quality. We also promoted technologies capable of helping us achieve carbon neutrality, invested steadily in growth, and initiated various investment projects well ahead of schedule.

Sustainability Initiatives

The entire JFE Group is actively addressing climate change, transitioning to a circular economy, protecting biodiversity, and restoring the natural environment.

Regarding climate change, our goal is to become carbon neutral by 2050. In the interim, we intend to complete development of carbon-neutral technologies by fiscal 2035, and then advance a large-scale process transformation adopting these technologies. To transition to a circular economy, our engineering business will promote Reuse and Recycle principles in commercial initiatives for bottle-to-bottle recycling, plastic recycling, food recycling, and waste-to-energy power generation. To protect biodiversity, we will collaborate with our host communities to monitor and sustain the ecosystems surrounding our steelworks and other major operating sites.

These efforts, which are major frameworks in our JFE Vision 2035 and 8th MTP, are crucial when considering the JFE Group’s purpose. I am confident that we can continue to grow as an indispensable company by contributing to environmental and economic sustainability as well as expanding our business.

Current Environment and Related Initiatives

We are facing elevated risks in today’s business environment, including declining demand in Japan, accelerating protectionism exemplified by U.S. tariff policies, and growing Chinese exports worldwide. This is considered the most critical period we have faced since the founding of the JFE Group.

The two axes of the 8th MTP are rebuilding a streamlined yet resilient structure in Japan and expanding business, including aggressive investment in overseas growth fields and regions. The steel business will streamline its domestic structure and enhance resilience to secure cost competitiveness. It will also develop innovative technologies, especially for carbon neutrality, as well as high-value-added products that drive our competitive advantage.

Overseas, we intend to expand the business through strategic partnerships with leading local companies to capture the growing demand for steel. Meanwhile, our engineering business will strengthen its earnings base by leveraging the strengths of our diverse business portfolio and expand business through circular-economy initiatives. Our trading business will aggressively carry out M&A and other global strategies, focusing on key markets in North America, Australia, India, and Europe.

To implement the above initiatives with the necessary speed in today’s rapidly changing environment surrounding us, we will delegate authority groupwide to speed up decision-making and strengthen our executive accountability structure.

Conclusion

Without everyone’s strong contribution, it will be impossible to achieve the 8th MTP or the JFE Vision 2035. In today’s unprecedentedly challenging business environment, self-transformation and value creation will be critical to growth. Each employee must be ever mindful of why the Company exists, never be satisfied with the status quo, set ambitious goals, and think for themselves about what they will do in their role. To consciously pursue self-transformation and execute value creation, go back to our well-established corporate values: “Challenging Spirit. Flexibility. Sincerity.” Approach challenges with boldness and flexibility, without being bound by preconceived notions and, accept the results sincerely to create new value. I have great confidence that every member of our group can forge their own path toward their desired future.

In carrying out the aforementioned initiatives, compliance and safety first are fundamental prerequisites in our business. Please take this idea to heart, internalize it, and put it into practice every day.

In closing, as we embark on a new year together, I extend my best and sincerest wishes for health and prosperity to all JFE Group employees and your families worldwide.