The business environment for the Toyobo Group during the subject third quarter period of fiscal 2010 (the nine-month period from April 1 to December 31, 2009) was marked by a continuation of the difficult conditions stemming from the global economic recession from the previous fiscal year at the beginning of the subject fiscal year. However, the economy showed an improvement from the second quarter, as exports began to recover on the back of an upward swing in the inventory adjustment cycle and improvement in Asian economies. The markets we focus on, such as automobiles and flat panel displays, have recovered. On the other hand, the Japanese economy showed signs of deflation in stagnant domestic demand, including a slowdown in consumer spending and sluggish capital expenditures.

Under such business circumstances, the Toyobo Group, in line with its management policy of "reinforcing our foundations, laying the cornerstones for future growth," implemented a total cost reduction program that included streamlining fixed manufacturing costs, and far-reaching savings in a wide range of expenditures. We also expanded sales of materials related to LCDs and electronic components, automotive applications, and other products, achieving a recovery in earnings from the second quarter.

As a result, net sales for the subject third quarter period decreased ¥59.2 billion (20.3%) from the same period of the previous fiscal year to ¥232.2 billion, with operating income down ¥6.9 billion (54.2%) to ¥5.8 billion, and a net loss for the period of ¥0.5 billion.

The outlook for the business environment will have unknown consequences on the recovery of consumer spending, the appreciation of the yen and of the price of raw materials and fuel. However, the Toyobo Group anticipates a steady growth in the packaging films and life sciences businesses, which are less susceptible to economic impact, along with a strong recovery in the shipment of automotive materials, and films for LCD and optical use. We will also implement cost savings measures ahead of schedule and expand sales of functional products in order to secure earnings.

I would like to offer my most sincere appreciation to our shareholders and investors, and ask for your continued support.