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February 4, 2003

Way to Innovation for New Teijin Group
Medium-term Management Plan WING 2003

Teijin Limited

I. Medium-term Management Plan Basic Policies

Aim to continuously increase the Teijin Group's overall corporate value in accordance with a new Brand Statement, "Human Chemistry, Human Solutions" and the"3G" basic management policies of Profitable Growth, Group Management, and Global Expansion

"Human Chemistry, Human Solutions"
- Continue to develop chemical technologies that are friendly to both people and the global environment and to keep providing solutions that deliver the real value that society and customers expect -

1.	Restructuring and strengthening of group-wide profitability The medium-term management plan for FY03-FY05 is positioned as a "period of reorganization and strengthening of group-wide profitability". It is based upon the reformation of business models and expansion of the business base of strategic businesses.

2.	Thoroughgoing "concentration and selectivity" Businesses strongly positioned in the business portfolio will be the focus of aggressive capital expenditure. Businesses that are poorly positioned within the group will be divested (through sale, withdrawal, alliance or integration).

3.	Strengthening of group management in holding company system Together with the establishment of the group management system to realize the optimum efficiency, the introduction of the holding company system will greatly strengthen individual business competitiveness. This will markedly increase the transparency, fairness and swiftness of group management.

4.	Introduction of the concept of total capital cost that reflects shareholders' expected profits To secure profit levels in line with those expected by shareholders, profit calculations and evaluations will be carried out based on the total capital cost by including the cost of interest-bearing liabilities and the cost of shareholder's equity.

5.	Implementation of total risk management A total risk management system will be constructed and implemented in an organizational approach to understand and monitor in an integrated manner the various risks (uncertainties) surrounding the business.

6.	Respect of the global environment and upkeep of excellent corporate ethics Teijin will strive hard to develop chemical technology that considers people and the earth's environment, and the entire group will implement business developments and activities that will contribute to improving the earth's environment. While ensuring that all group members observe high ethical standards, Teijin conducts its corporate activities on the global stage revering each country's laws, regulations and customs.

II. Medium-term Management Targets

Overall Targets

	FY02 outlook	FY03	FY04	FY05 target
Sales (¥ billion)	890	940	1,000	1,070
Operating Income (¥ billion)	32	40	60	80
Net Income (¥ billion)	-18	7	17	25
ROA (%)	3.0	3.8	5.7	7.6

ROA: Operating Income/Total Assets

Target by Business Segment

	Sales (¥ billion)		Operating Income (¥ billion)		ROA (%)
	FY02 outlook	FY05	FY02 outlook	FY05	FY02 outlook	FY05
Fibers & Textiles	480	570	7.5	27	1.6	5.5
Films & Plastics	185	230	3	12	1.3	4.7
Pharma-ceuticals & HHC	95	105	15	20	21.6	27.8
IT & New Products	130	65	6.5	11	3.3	20.0
According to the Kyorin Pharmaceuticals mid-term plan, sales in FY05 will be 100 billion yen and operating income will be 25 billion yen.
*Corporate provision				-15
Total	890	1,070	32	80	3.0	7.6

*Corporate provision is the provision made for uncertainties

Medium-term Financial Targets

	FY02 outlook	FY05	Remarks
D/E ratio	1.5	0.9	Interest-bearing debts/Shareholders' equity
Interest-bearing debts Shareholders' equity	430 285	310 350	¥120 billion reduction Balance between interest-bearing debts and shareholders' equity
Total assetsreduction	1,050	1,050	An increase in assets will result from the business integration with Kyorin Pharmaceuticals. However, splitting off Teijin Seiki to an equity-method affiliate, the divesting of low-profitability businesses and inefficient assets, and the reduction of short-term liquidity and inventories will achieve a reduction in total assets.

Balance Sheet Management in Medium-term Plan

Capital Expenditure: ¥175 billion over 3 years Depreciation ¥175 billion
Intensive investment in strategic businesses:

-	Expansion of Twaron aramid fiber
-	New plant for polycarbonate resin in China
-	New plant for polycarbonate compound in China
-	Expansion of super high-molecular-weight porous polyethylene film, Solufill

Research & Development expenses: ¥130 billion over 3 years
Pharmaceuticals & Home Health Care ¥75 billion,
New businesses ¥13 billion

Employees on consolidated basis 23,700 employees as of end March 2003

22,700 at end March 2006
(Staffing at Teijin Seiki will decline by 2,200 when the firm changes from subsidiary to equity-method affiliate. Conversely, staff levels will increase by 1,700 following the business integration with Kyorin Pharmaceuticals and its change to subsidiary status.)

III. Analysis of Previous "Forward 2000" Medium-term Plan

(1)

ROA: Target 7.6% Likely result 3.0%

1	Apparel fibers business: Insufficient sales development under unbalanced demand and supply
2	Films business: Delays in changes to customer-oriented production and changes of production structure in the post-IT bubble period in the US.
3	Plastics business: Global price drop for polycarbonate resin due to construction of new plants
4	Pharmaceuticals and HHC: Drastic fall in medical treatment fees for home health care

(2)

Free Cash Flow: Target ¥80 billion Likely result ¥20 billion

1	Increase in capital expenditures of approximately ¥50 billion ･New plant for Twaron aramid fiber ･New plant for polycarbonate resinetc.
2	Unattained profit target of approximately ¥40 billion
3	Reduction of assets and others of approximately ¥30 billion

(3)

Issues and countermeasures arising from the previous Medium-term Management Plan

Issues

1	Changes in the global business environment Prolonged stagnant economy and deflation, collapse of the IT bubble, increased presence in China, increase in uncertainties and accelerating speed of change
2	Operational factors Smaller price spread, forfeiture of competitiveness of standard products, and delay in implementing asset reduction
3	Institutional environment changes Drastic fall of medical treatment fees and amortization of unfunded pension obligation

Countermeasures

1	Acceleration of business portfolio restructuring
2	Distinguishing between growing businesses and mature businesses
3	For mature businesses, prioritizing profitability and intensive fixed cost reduction
4	Drastic shift to functional materials and industrial materials
5	Developing into China with growing businesses and processing operations
6	Quantitative analysis and identification of risk

IV. Major Strategies and Tasks in the New Medium-term Management Plan

1. Restructuring of business portfolio

(1)	In order to push ahead "concentration & selectivity" and strengthen core competence, a quantitative analysis based on growth possibilities and profitability will be carried out to prioritize the allocation of management resources. Each business will be positioned as a 'strategic business', 'stable-profit business', 'business to be selected', or 'business to be rationalized'
(2)	For strategic businesses, aggressive capital expenditure will be carried out to expand the business base, while low-profitability businesses will undergo reorganization of their business model to increase profitability and improve their financial structure.
(3)	Sale, withdrawal, alliance or integration will be realized in each business group at the most expedient timing when they are judged as a target for divestment in each business group according to the viewpoints of profitability, core competence, and synergy.

Distinction between Strategic businesses and Stable-profit businesses

Strategic businesses: Industrial fibers, Plastics, Pharmaceuticals & Home Health Care, IT & new products
Aggressive capital expenditure will be carried out to expand the business base (strengthen and enlarge core competence).

(1)	Shift of employees: Increase of approximately 350 employees (Approx. 5% of total)
(2)	Increase in capital expenditure: ¥110 billion over 3 years, increase of ¥30 billion over depreciation
(3)	Integration of pharmaceuticals business: Increase of 1,700 employees, increase of ¥15 billion in R&D

Stable-profit businesses: Apparel fibers, Films, Trading & retail
In order to secure stable profits from the apparel fibers and films businesses, business restructuring (business model reforms) will be swiftly implemented to change their low profit structure to a stable profit structure. Linking the trading and retail businesses to business groups dealing with materials will contribute to increasing the group premium. Reorganizing their business development scope as a trading company, they will become stable-profit businesses.

(1)	Reduction of approximately 1,000 employees (Approx. 8%)
(2)	Reduction of capital expenditure: ¥55 billion over 3 years, capital expenditure is ¥30 billion less than depreciation
(3)	Expansion of differentiated products

Pursuit of Synergy from Integration of Pharmaceutical Business

From October 1 this year, Kyorin Pharmaceuticals Co., Ltd., the new company resulting from the business integration, will begin business as a consolidated subsidiary of the Teijin Group. It will be Japan's top manufacturer of pharmaceuticals for treatment of respiratory and bone calcium diseases. Expansion and strengthening of the business base is expected from the synergy created between Teijin and Kyorin Pharmaceuticals, such as in bringing new drugs to market.

(1)	Expected effects
	1	Reinforcement of sales franchise: Number of MRs becomes 1,200 (10th largest in the Japanese market)
	2	Strengthening of R&D pipeline: Focusing therapeutic areas from 3 to 6 - Enrich expected items in pipeline - Toward ¥30 billion expenses a year
(2)	Business scope:
	Outlook for March 2003, on a simple calculation basis Sales: Approximately ¥170 billion Operating Income: Approximately ¥29 billion

Enhance Incubation of New Products

Aiming to develop a business portfolio structure for the future that is capable of growth, the function of search and incubation for new businesses and products will be strengthened. A new business development group will be established in the holding company.

New business development group

(1)	Enhance incubation of new products
	Business plans, corporate R&D, introduction of new technologies, and business development will be implemented placing priority on development efficiency and speed.
(2)	Contribution to each business group through development of new products and processes Gaining deeper knowledge of and combining core and state-of-the-art technologies.

5.	Reforms of Management System

	(1)	Further strengthening of corporate governance
	(1)	The number of members of the Teijin Group Board of Directors will be maintained at less than 10, and three will be external directors. The three Japanese members of the Advisory Board will assume posts as external directors. This strengthening of relations with the Advisory Board, which has the function of advising on successor plans and remuneration for Teijin's top management, will further reinforce corporate governance.

	(2)	Implementation of Total Risk Management (TRM)
		Uncertainties arising from decision-making that determines management strategy and strategic actions are considered as Strategic Risks (SR), while disasters, quality problems and compliance risks are regulated as Operational Risks (OR). Measures to counter both types of risk will be strengthened.

		Establishment of CSO and CRO
		A CSO (Chief Strategy Officer) and CRO (Chief Risk Management Officer) will be newly established, and an appropriate organization to staff these positions will be set up inside the holding company.

		Establishment of Total Risk Management (TRM) Committee
		A new TRM Committee will be established, headed by the CEO. The TRM Committee will consist of four permanent members, the CEO (Committee Chairman), CSO, CRO, and CESHO, who will be positioned as committee members inside the Board of Directors. They will conduct the TRM basic policy and yearly plan development, and will submit proposals to the Board, while the Board of Directors will use the TRM Committee proposals as valuable materials when making decisions. The Board of Auditors will audit the appropriateness of the Board of Directors' policy decisions and the supervision of the TRM Committee.

	(3)	Introduction of new profit control system
		The business evaluation system that uses the TSVA and ROA hurdle rate will be introduced in order to intensify the control system based on cost of capital and clarify the minimum level of dividend to the holding company for the purpose of meeting shareholders' expectations.

		TSVA (Teijin Shareholders' Value Added)
		The TSVA (the net income less cost of equity) and TSVA spread (the ratio to total assets) will be included in the business evaluation. The TSVA for each business group shows the amount contributed to group management, and the TSVA for the whole group expresses the increase or reduction in corporate value (shareholder value) of the Teijin group. Further, by adding the TSVA spread to the index, the efficiency is also evaluated. In association with this, the lowest required profit rate (hurdle rate) on the operating income ROA basis will be set in consideration of the debt-equity structure for each business group.

6.	Implementation of Corporate Brand Strategy
	Teijin group will promote a new corporate brand strategy to increase recognition and promote understanding of the Teijin Group. In addition, the Teijin group will also aim to enhance its presence in the global market and strengthen centripetal force for the Teijin group

	(1)	Rebuilding of Brand Statement
		The promise of the Teijin brand is summed up in the resonant statement "Human Chemistry, Human Solutions". Our promise is to continue to develop chemical technologies that are friendly to both people and the global environment. Teijin group will make every effort to realize this promise.

	(2)	Redesign of Brand Logo
		FY03 will be positioned as recreating the Teijin Group, and the Teijin brand logo will be redesigned also.

	(3)	Promotion and popularization of brand both inside and outside the group
		In order to promote and popularize the brand, promotion activities outside the company such as a media mix that includes TV commercials will be conducted. Promotion activities inside the company such as the production of educational tools will be conducted in parallel.

V. Key Factors in Increase of Operating Income and Business Strategy
Operating Income: Increase of ¥48 billion over FY03-FY05

1. Expansion of Strategic Businesses +¥50 billion

(1)	Industrial fibers Strengthening position as a full-line supplier of industrial fibers
	1	Timely reaction to changes in aramid market; manufacturing technology to keep up with finer denier
	2	Early realization of full operation of Twaron expanded capacity; FY03 operation start, FY05 full operation
	3	Establish carbon fiber production sites in Japan, US and Europe
	4	Expand production base for tire cord in Asia and North America
(2)	Plastics Becoming the biggest polycarbonate supplier in the growing Asian market
	1	Establish basis for 100 kiloton production in China; start of operations on the first line in FY05
	2	Aggressive sales development of sheet & compound and promotion shift to general purpose
	3	Shanghai compound plant construction
	4	Plant construction for polycarbonate film for optical use
(3)	Pharmaceuticals & Home Health Care Pharmaceuticals: Synergy from business integration with Kyorin Pharmaceuticals Co.,Ltd.
	1	Promotion of synergy in R&D
	2	Reorganization of sales network to strengthen
	3	Continual and steady launch of new drugs; drugs for asthma, gout and diabetes
	Home Health Care: Strengthening of position as a total provider
	1	Development and launch of innovative home oxygen therapy (HOT) system; cost competitiveness and differentiation
	2	Smooth commercialization of home hemodialysis; launch target of FY04
	3	Expansion of new home businesses such as CPAP
(4)	IT and new products Promotion of niche top strategy IT service
	1	Shift to service business
	2	Develop into voice recognition and health care
	Electronics materials
	1	Promote 'Solufill' super high-molecular-weight porous polyethylene film to be a standardized material for condensers
	2	Early start of operations in the first line of Solufill and building the second line

2. Stable-profit Businesses +¥13 billion

(1)	Apparel fibers Shift focus from market share to profitability
	1	Establish optimized tripolar polyester filament yarn production system in Japan/ ASEAN/ NAFTA
	2	Shift from apparel to interior & seat use etc., spun yarn to non-woven fabric, and fashionable to functional
	3	Intensive development of ecological products; PET bottles to fibers, fibers to fibers
	4	Compatibility of cost-cutting and differentiation
(2)	Trading & Retail Pursuit of group premium through strengthening links with materials businesses
	1	Comprehensive business development involving converter and retailer; trading company - apparel - retailing
	2	Focus on profit instead of expansion of sales
	3	Rationalization of unprofitable businesses
(3)	Films Strategic application development and cost-cutting
	1	Strengthen global competitiveness by improving fixed-cost productivity
	2	Reinforce global R&D with 3-region R&D system
	3	Strengthen and expand China business
	4	Businesses to be focused, such as strengthening industrial/packaging specialty, expansion of PEN films

3.	In addition, consideration will be made of the -¥15 billion corporate provision for uncertainties

Outline of Teijin Limited

Name	Teijin Limited
Established:	June 17, 1918
Address:	1-6-7, Minami-Hommachi, Chuo-ku, Osaka
Capital	70,788 million yen (as of March 31, 2002)
Representative:	Toru Nagashima (President and CEO)
No. of employees:	24,026 (consolidated, as of March 31, 2002) 4,252 (non-consolidated, as of March 31, 2002)
Sales:	923,446 million yen (consolidated, for the period ended March 31, 2002) 232,280 million yen (non-consolidated, for the period ended March 31, 2002)
Scope of business:	Business activities mainly relating to synthetic fiber, chemicals, and medical treatment. Conducts global activities together with group companies through business bases in Japan and in more than ten countries worldwide.

Disclaimer Regarding Forward-looking Statements
Any statements in this document, other than those of historical fact, are forward-looking statements about the future performance of Teijin and its Group companies, which are based on management's assumptions and beliefs in light of information currently available, and involve risks and uncertainties. Actual results may differ materially from these forecasts.
Potential risks and uncertainties include, but are not limited to, domestic and overseas economic conditions, such as consumer spending and private capital expenditures, particularly given the continuing sluggish economy of Japan; currency exchange rate fluctuations, notably with the yen, US dollar, Asian currencies, the euro and other currencies, in which Teijin operates its international business; direct and indirect restrictions imposed by other countries; fluctuations in market prices of securities in which Teijin has substantial holdings; and Teijin's ability to maintain its strength in many product and geographical areas, through such means as new product introductions, in a market that is highly competitive in terms of both price and technology, pertinent to the industry
to which the Company primarily belongs.

For further information, please contact:
Public Relations & Investor Relations Office
Teijin Limited
Tel: +81-3-3506-4055 / Fax: +81-3-3506-4150
E-mail: pr@teijin.co.jp

Information in the press releases is current on the date of the announcement.
It is subject to change without prior notice.

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