Artience : Ink Business Briefing Question & Answer session summary

• Date/time: Feb.20,2026 11:10am - 11:50am (Japan time)

• Speakers: Hideki Yasuda President and Representative Director, TOYO INK CO., LTD.

Katsuya Saso Director, General Manager of Marketing, TOYO INK CO., LTD.

Masataka Namba Director, General Manager of Technology, TOYO INK CO., LTD Presentation Material: https://ssl4.eir-parts.net/doc/4634/tdnet/2765527/00.pdf

The first question is on page 11 of the material, and I would like to ask you to discuss the differences between Asia, Europe, and the US in your strategy.

Asia is an attractive region with high quality and few varieties, so I am wondering if there is any risk of the rise of competition here.

As for Europe and the US, you are aiming to expand your business by leveraging the facilities in Turkey and India. Conversely, this market has a high customization level, and even though you have secured adequate production capacity, I am concerned about your capability to effectively increase sales in these regions and the feasibility of establishing your presence among clients. Could you please talk about that? That is my first question.

Differences between Packaging Materials Inks Used Overseas

*NC: Nitrocellulose

pouched

products

Snacks

NC inks enable flexible on-demand production.

Urethane inks: Suited for various applications

FY2025 Ink Business Briefing 11

Also, in terms of cost competitiveness, we have strong advantages in this regard. Other manufacturers typically source their materials from third parties. In contrast, we produce our key materials in-house, including raw materials and formulations. We also talked about investments earlier. We are actively introducing labor-saving and automated production lines to enable more cost-efficient manufacturing. We believe these strengths will help us further expand our market share.

First, let us look at Asia, with a focus on urethane inks. So far, we have been focusing more on the high to middle grades. Our strategy is to expand the market by targeting the middle to low grade, which is the volume zone, in the future. The same is true here for the NC area as well. We set up our base in Turkey. We equipped this facility with low-manpower, automated, large-scale production lines, enabling us to minimize production costs. We aim to leverage this base to expand our share of the EMEA market.

In summary, our growth strategy is anchored in two strengths: quality and cost competitiveness supported by in-house raw material production and automation. In Asia, we will pursue further share gains in local and mid-range segments, while in Europe, the U.S., and Africa, we will focus on expanding sales through our cost advantage.

I am looking at page 22 of the document. Deinking recycling. The technology is different, but I believe that some of our competitors are doing the same thing, working with major food manufacturers to set up recycling plants while holding downstream operations. Your company has used this technology and here is an example from Lion. And what about inquiries from other brand owners? Also, I would appreciate it if you could also discuss the actual demand now.

Example of Specific Initiative Applying Peel and Deinking Recycling Technologies

Surface film layer

(nylon, PET, etc.) Easy peel

adhesive

Deinking coating agent

Easy peel laminate adhesive

Converter

Brand owner

Retailer

C

of r

Refill packs incorporating this

technology bear a yellow mark Materials provided by Lion Corporation

When film is peeled off

Demonstration experiment at pilot plant

User

Recycler

Peeling and deinking processes

FY2025 Ink Business Briefing 22

Production and use of packaging and molded products applying peel and deinking technologies

Alkali treatment

Approx. 150 µm

We have received a substantial number of inquiries from brand owners, as our technology is the first technology that can be applied to so-called food packaging and refill applications in general. We have received a significant number of inquiries not only from Lion but also from other brand owners. We have issued a press release regarding Lipton, and Calbee has been introduced at exhibitions. In addition, collaboration with other brand owners for whom we have not issued press releases is also progressing steadily.

First, I would like to ask you about the competitive environment and your company's strategy. On the last page, it says 50% profit increase in five years. It is a goal that can only be achieved if you increase sales by 5% or more per year, plus maybe an improvement in margins.

On the other hand, according to your data, the market growth rate for UV curable inks is 3% overseas, 4% to 7% in Asia for package inks, and 1% in Japan, so if I run numbers, it seems to me that the basic premise is that you would need to gain market share to achieve 5% growth. Your company is aiming for this growth, but what is the probability?

As for the background to this, I think there are some areas, especially Turkey, the EU, and Africa, where your company is now investing-as other companies are also doing, and major local manufacturers are also lowering their prices quite a bit-and where you are trying to increase utilization rates. What are your thoughts on this?

Our promise for the future

(billion yen)

5.0

0.0

5.0

0.0

2025

2030

FY2025 Ink Business Briefing 26

As for how to extend UV curable and packaging inks, let me start with UV curable inks. First is domestic UV curable inks. Sales of energy-saving, high-sensitivity inks for packaging and label card applications have been growing rapidly. In the domestic market, the shift to UV curable inks has run its course.

Overseas, however, we expect further conversion to UV curable inks driven by future mercury regulations and energy-efficiency initiatives, particularly a transition to LED lamps within the UV segment. We intend to capture growth opportunities in these areas.

UV curable inks were discussed in the earlier financial results briefing. Although the volume did not decrease in the previous fiscal year, it did not increase as much as shareholders and investors had expected. Some areas have lost ground due to the price structure of the competition, and in Europe, profits have decreased due to rising labor costs.

So, how do we stretch ourselves in this kind of situation? Again, I believe that both quality and cost competitiveness are the keys. We own key materials and proprietary materials. The quality of our ink, the technology to cure the ink firmly, even with little energy from LED lamps, and the differentiation technology to improve the so-called "printability" so that customers can easily use the ink are made possible by this unique material. We have been developing this technology in Japan. We are now actively trying to expand these techniques overseas, which I believe boosts our strength in the overseas markets.

In terms of cost competitiveness, these key materials are manufactured in-house. Therefore, raw materials are naturally cheaper than those purchased from outside. We are introducing increasingly labor-saving and automated production lines, which enable cost-minimized manufacturing. So, by utilizing these two advantages, quality plus cost competitiveness, we will further increase our market share, increase sales, and increase profits, as I discussed today.

Packages, too, similarly, quality and cost competitiveness allow us to compete with other companies.

There is a movement to recycle some of the packaging businesses, including inks, or PPWR, or something like that. I would like to ask if there is a positive tailwind for your company.

will be in a recyclable form per regulation. It may take a little more time to develop some infrastructure to create a system to collect and recycle the packaging materials. I believe that this PPWR regulation will spill over from Europe to other areas.

If this regulation spreads to various regions, for example, mono-material conversion will increase. What used to be polyester film, PET film, and places like nylon will be replaced by polyolefin. PET and nylon were used for a reason, and if all of them were replaced with olefin film, the function of the film would deteriorate. We have an extraordinarily strong lineup featuring these products, and I believe that business opportunities will be enhanced.

More to the point, there was an area in NC where more recycling will be done in the future. NC deteriorates the quality of recycled materials, degrading coloring, and mechanical properties, and as recycling progresses, NC will be less preferred. When this happens, we believe that our business opportunity for urethane inks will expand into the area of NC inks that I discussed earlier.

Secondly, I would like to ask about the status of UV LED inks. Looking at your company's documents, I see that you are strong on UV curable inks and have the top share of LED inks.

About six months ago, the downgrading trend began, as mentioned earlier. As I mentioned earlier, there has been a downgrade trend in the market over the past six months or so.

If the situation has stabilized, or if there were any updates on the current conditions, I would appreciate your insights.

In addition, it is expected that the sale and manufacture of high-pressure mercury lamps will be prohibited around 2027. How is the transition to LED ink progressing at this point? Has the situation calmed down, or are you seeing a significant increase in orders? Any information on this would be helpful.

From a technical standpoint, and please correct me if I am mistaken, I have heard that LED inks can be more difficult to cure compared with UV curable inks. Is this not a major issue for your company? A.5(Yasuda): First, you mentioned downgrading. UV curable inks in Europe struggled last year as well, and one area where we lost ground was in the price structure of the competition. To address this, we have been developing different inks, aiming for a high grade. We release these inks with slightly lower costs for middle-grade products to recover lost ground and further expand sales, and the results are now favorable.

We are advancing cost reductions through inks developed using our key materials, as explained earlier, as well as through optimized procurement strategies for various raw materials. As a result, we have introduced products to the market that are fully competitive against competitors' pricing strategies, and we believe we can steadily regain lost ground.

As Mr. Yasuda discussed earlier, our key technology is our own resin. Here, we have designed a resin that dries well with less light and power, and the idea is to put this technology into UV LEDs to drive growth in the future.

I would appreciate it if you could talk about your strategy for the ink business in the future. Your strategy for the European market focuses on the higher sales volume. I wonder if other competitors are starting to take a similar move.

I recognize that your company can manufacture inks that are clearly differentiated from LED UV curable inks. Considering this, along with the fact that your company has other products that are highly competitive, I believe that steering the Company toward a policy of increasing profitability by strategically selecting clients rather than capturing market share would be one way to reduce volatility

in performance and focus on profitability. Because, in the ink industry, profitability is subject to a severe deterioration when raw material prices rise. I would like to ask your thoughts on this.

As for UV curable inks, our strategy here is not to aim for volume, but rather to target the area of high-value-added products to increase profits.

【END】

Note: Portions of this Q&A transcript have been edited by the Company.