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Dear members of NEPES!
The first morning of Jeonghae Year, the year of the golden pig, said to come once every 600 years, has dawned. Greeting the New Year full of hope and expectation, I hope that all of the executives and workers and your homes are blessed with health and happiness.

Looking back at the last year, the company achieved growth of over 30 percent, despite many difficulties. In addition, the company developed new products such as functional chemicals, Biotechnologies and coatings, which will become our future driving force. We operated our factory in Singapore, established new visions and have steadily practiced T-management based on the accomplishment of our goals and managerial ideologies. In 2006, NEPES won the Silver Tower industrial medal granted to the best performing venture businesses, a first for a component material maker.

I want to thank all the executives and employees for these favorable results in 2006. Without your devoted efforts, NEPES could not have achieved its present status. And similarly, if you had not recognized, trusted and believed in me, I couldn't have been an effective CEO. I especially want to offer my heartfelt gratitude to all members of NEPES, who have worked passionately, if invisibly, with a strong sense of duty and an unyielding spirit.

For us, the year 2007 is very important in that we will be preparing a stepping stone from which we can accomplish our vision of `` an organization advancing the future.'' However, we expect to continuously be faced with a number of obstacles that will hinder our growth in the coming year. So many obstacles will be waiting for us. The value of our currency is soaring, our customers are continuously pushing forward vertical integration, an increasing number of competitors are emerging, and the political atmosphere is unstable due to North Korea's nuclear weapon programs and the presidential election. To wisely overcome these difficult managerial conditions, and to continuously develop by using them as opportunities to grow, I am going to select the following as my key words for management in 2007.

First: self-innovation or creative innovation.
To be able to take the shocks that are coming up as an opportunity, it is important for us to lighten our bodies. By utilizing indexes such as ROA and ROI, we should maximize the efficiency of the operation of our resources, such as investment, inventory, costs and manpower, and enhance our competitive edge through innovating in the non-cost aspects of competition.
In addition, by introducing and making use of the 6 sigma method to improve our capacity to cope with the changes in business environment, we will more practically build a risk management system, steadily secure the future driving forces and daringly push them forward. To this end, we will expand new business which can generate synergies with existing ones in multiple ways, and advance the business structure by securing more than three new products for each business in preparation for the future through expanding applications based on already introduced new products and our technologies.

Second, expansion of the culture of execution-oriented Culture.
Even if we have broad knowledge, it is dead knowledge if we don't practice it. For creative innovation, all members should be able to speak to each other frankly regarding obstacles by joining the work sites, actively setting up plans and preparing solutions together. We should become really creative members of NEPES, who always have a critical mind that asks ``Why?'' more than three times, and make new things after digging deeply into the essence of our duties. To spread the culture of execution-oriented Culture, it is necessary for us to understand management and the purpose of driven life. Even those with high abilities and special passions may experience negative changes to their entire life if they have the wrong way of thinking in terms of being considerate of others. We know this too well. As good reasons give birth to good results, all members will realize the real value and meaning of the life only when they make the utmost effort to produce good results.
Leaders of new business organizations, in particular, should know that they can get help from the people who surround them only when they do their best sacrificing themselves. Only through experience and knowledge, obtain at the work sites in the process of working hard, can they have a sense of confidence and feel happiness and satisfaction.

Third, expansion of global talent.
This year, we plan to step up education to prepare for the future by building middle managers into global talents through strengthening their capacities. For this purpose, we will supplement our systems of evaluation and education, and operate programs to cultivate core talents. We will then help executives and managers widen their personal relationships, and correctly understand members in and outside of the company, and the pool of human resources and the business as well. We will also practice T-management by stationing people in the appropriate position. Additionally, we will reform the personnel system according to the principle of T-management by reestablishing a transparent, fair and predictable evaluation and compensation system, slimming down the organization and building a self controlling organizational structure, in which every member of the company exactly knows his or her responsibilities and rights.
To carry out the above-mentioned three keywords will bring us mental and material abundance, and will help us form more decent personalities and give us acute foresight. In addition, we will be able to find the values and meanings of life, and will feel the overwhelming growth we have achieved.

Dear members of NEPES!
We will have to try to attain the top competitive edge by further developing differentiation strategies that center around our current core capacities, and by strengthening our new driving forces through ceaseless efforts. This year, the company will daringly invest in R&D, education and informatization to expand production facilities and growth potential, and further strengthen marketing and R&D through expanding global networks. As well, we will certainly supplement various systems to perfect the T-management system. Finally, I pray to God so that all of your own hopes will be achieved, and your homes will be full of happiness and health.

I'll serve you !!
Thank you.

Jan. 2, 2007

Chairman Byung-gu, Lee