billionJPY 250.01.Operating Cash FlowFacility renovation/Environmental investment(2019-2021)(3 years total)JPY 60.0 billion2. Growth investmentJPY 50.0 billion3.Strategic investment (M&A and alliances)4.Stable, consistent dividends5.Share buybacks Renovation of facilities in core business and investment in environmental facilitiesEnhance capabilities in growth areas to expand earningsMaintain M&A direction in automotive and electronics sectors to gain future growth opportunitiesSources of future valueProduction facilities in the Company’s core businesses have experienced significant age-related deterioration, and they are urgently in need of renovation. Focusing on the graphite electrode business and other core businesses the Company has long been engaged in, we will renovate existing facilities and install new facilities to maintain our ability to supply products consistently, improve productivity, and enhance quality. Under the present medium-term management plan, concentrated efforts will be made to carry out facility renovations that were postponed due to unfavorable business conditions beginning in the second half of 2008.The Group helps to protect the global environment by providing materials that are indispensable for recycling, saving energy, and producing green energy. On the other hand, considerable resources and energy are consumed in producing these materials, so there is also an environmental burden associated with them. To harmonize our business activities with the needs of a global environment, we will spare no effort in pursuing technological innovations and production efficiencies, and move forward with necessary environmental investments.Over the three years beginning with 2019, we will make cumulative investments exceeding JPY 50 billion in growth areas. In the carbon black business, we will expand our Canadian plant’s production of thermal black for uses related to rubber products, metallurgical applications, and plastics. In the fine carbon business, we will gradually increase our Korean plant’s capacity for producing Solid SiC focus rings, a product for which the Group is the overwhelming global market leader. In addition to the above, we will make capital investments anticipating growth in the markets for lithium-ion batteries and MLCCs (multi-layer ceramic condensers), two products that will benefit from rising adoption of electric vehicles. All of these investments will help to expand our business base, strengthen our business portfolio, and generate future sources of cash flow.Medium-Term Management PlanCapital AllocationFacility RenovationEnvironmental InvestmentsInvestments in Growth The cash flow generated within the medium-term management plan period will be invested in existing facilities and new facilities that will produce enhanced cash flows going forward. Shareholder returns will also be among our highest priorities.Investments will total approximately JPY 60 billion for facility renovation and environmental equipment and about JPY 50 billion for growth areas. Regarding strategic investments, we will continue to consider business expansion and profitability enhancement opportunities in areas related to our businesses. As for shareholder returns, the basic policy is to pay dividends that are stable and consistent, and efforts will be made to increase them going forward. We also aim to actively buy back company shares.T-2021Operating Cash Flows and Their Uses Under T-2021 (Cumulative figures for 2019-2021)18TOKAI CARBON ANNUAL REPORT 2018
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