Nittobo Group Integrated Report 2021

NITTOBO GROUPINTEGRATED REPORT

2021

2-4-1, Kojimachi, Chiyoda-ku, Tokyo,102-8489, Japan
Telephone: +81-3-4582-5111

https://www.nittobo.co.jp/eng/Nittobo Group’s Philosophy System

Corporate Philosophy

Nittobo Declaration

Nittobo Group will, as a corporate group,

Nittobo Group aims to become the “Best Partner” of your community.

continue to contribute to the realization ofprosperous communities.

Big VISION 2030
Customers(Nittobo BP Declaration)enhance its significance by striving to create
healthy and comfortable lifestyles, and thereby

Nittobo Group’s Vision for 2030

Investors

Shareholders

As a corporate group that continues to create a

We will relentlessly strive to identify our customers’ needs and willfind great satisfaction in steadfastly earning their confidence and trust.

global No. 1 niche business, we aspire to contribute to

In addition, we will attach importance to sharing this satisfaction withall of our stakeholders (communities) through our products andClients

employees

Creditors

services, including shareholders, investors, public administrations andregional communities.
Community

We are committed to becoming a corporate group in which the

PublicAdministration“Environment/Energy,” “Digital Society,” and“Health/Security/Safety” for realizing a sustainable society

potential of our respective, independent employees is valued andProvide products andProvide products andProvide products andthereby inspires our employees to freely and willingly share their own

services that contributeservices that contributeservices that contributeto environment/energy

to digital society

to health/security/safety

ideas, ultimately achieving greater results through teamwork.
Our corporate group will provide its employees with an opportunity

MISSION VALUES

for progress and self-realization based on the belief that their progress
leads to everyone’s success. We will encourage our employees to begood citizens, think deeply, observe widely, act courageously and to
approach their jobs with resolve and determination.

Deeply, Widely, Strongly and Hospitably

Proud that
customers trust
Nittobo

We aspire to be a company that gains the trust of
all stakeholders in the pursuit of client satisfaction.

VISIONCONTENTS

Nittobo’s Value
Creation

History of Value Creation������������������������������������������������������02

Message from the CEO...........................................................10

ESG Initiatives���������������������������������������������������������������������������38

Main Lineup������������������������������������������������������������������������������04

Feature: Big VISION 2030 and the New Mid-Term

Environment

Value Creation Process�����������������������������������������������������������06
Nittobo Group’s Materiality�������������������������������������������������08

Strategies for
Value Creation

Business Plan (FY2021-2023)�����������������������������16
Mid-Term Business Plan Initiatives

Foundation for
Value Creation

Environmental Initiatives��������������������������������������������������40
SocialGlass Fiber Division............................................20

Harmonious Coexistence with Communities�������������44

Life Science Division..........................................22

Safety Initiatives�������������������������������������������������������������������45

Research & Development Headquarters....24

Active Roles of Diverse Talent������������������������������������������46

Glass Fiber Division

Editorial Policy
The Nittobo Group Integrated Report brings together financial information and non-financial information including CSR to provide stakeholders with a greater understanding of value-creating initiatives for the medium and long term. This issue provides more substantial
information on the new Mid-Term Business Plan and Big VISION 2030, our long-term vision
for 2030, which started in FY2021. The report also details important social issues that the
Nittobo Group must address in order to contribute to the realization of a sustainable society.

Governance

Glass Fiber Yarn Business...................................................28

Messages from Nittobo’s External Directors...............50

Glass Fiber Cloth Business.................................................30

Corporate Governance.......................................................52

Glass Fiber for Industrial Materials Business................32

Directors and Officers��������������������������������������������������������60

Life Science Division.................................................................34

Report Period
This report covers business activities in FY2020 (from April 1, 2020 through March 31, 2021).
This may be abbreviated to “FY20” when figures are presented.
Scope of Report
This report covers the business activities of Nitto Boseki Co., Ltd. and its consolidated subsidiaries and affiliates in Japan and overseas.
Company References“Nittobo Group” and “the Group” refer to Nitto Boseki Co., Ltd. and its consolidated subsidiaries and affiliates in Japan and overseas. “Nittobo” and “the Company” refer to Nitto
Boseki Co., Ltd. individually.
Date of Publication
September 30, 2021

Textile Division...........................................................................36

Consolidated Financial Statements....................................62

Data Section

Company Profile.......................................................................68
Stock Information.....................................................................69

Forward-looking Statements
The forecasts presented in this report are based on information available to the Company
as of the publication date. Forward-looking statements included in this report do not represent promises or guarantees that the Company will attain its forecasts or realize thebusiness measures expressed herein.

Integrated Report 2021

01

History of Value Creation
The Nittobo Group was founded in 1923 in Fukushima Prefecture as a textiles manufacturer. Over the decades, we were thefirst Japanese company to industrially produce glass fiber (1938), became the first in Japan to manufacture glass wool (1949),
and made inroads into medical business (1978). In each era, we have embraced change as opportunity and continually developed the Company by relishing the challenge to create new technologies and priding ourselves on our pioneer spirit.
Historical Background and Social Issues and Needs
1930s
Development of heavy
industry
Japan becomes world’s
largest staple fiber producer

After 1945
Postwar rebuilding demand

1960s
The first apartment boom,
wave of motorization

Mid-1970s
Rising health consciousness

1980s
Rising demand for
healthcare
Widening choice of fashion
materials

After 1990
Widespread adoption ofInternet, mobile phones,and PCs

Increase in usability,
functionality, andminiaturization of
integrated circuits

After 2000
Widespread adoption of smartphones and broadband

Nittobo’s Value Creation

Around 1930
Development of modern
industry

4G to 5G
Shift from treatment to prevention

Nittobo’s Business Transitions
Making glass cloth thinner and more functional
Started with the silk yarn
Textile BusinessJapan’s first industrializationof glass fiber and rock wool,
full-scale production of
staple fiber

Building the foundation forour current core products andbusinesses

Expanded business bybuilding more glass fiber
furnaces

Started pharmaceutical sales

Entered the in vitro
diagnostic reagents field
Withdrawal from staple fiber
business

Withdrew from cotton
spinning business at Tomari
Factory
Shifted focus to Beveragebusiness

Business selection and concentration, withdrawal fromconstruction materials business (rock wool production)

Expansion of in vitro diagnostics reagents development

1952 Opened Chemical
Fiber Laboratory (the roots ofthe medical business), which
later evolved into the
Biochemical Laboratory1978 Launched synthetic
substrate for γ-GTP

Started development of biochemical in
vitro diagnostic reagent kits based on theidea that biochemistry will be thedefining chemistry of the next generation

1983 Launched specialty
chemicals PAA™
1986 Acquired International
Immunology Corporation, thepredecessor of Nittobo
America Inc. Started
immunological in vitro
diagnostic reagent business1987 Established NITTOBOMEDICAL CO., LTD. and its
own brand for in vitro
diagnostic reagents
Launched immunological in
vitro diagnostic reagents

1997 Established Nitto
Beverage Co., Ltd.

Strategies for Value Creation

Life Science Business • • • Contributing to preventive medicine becomes the Group’s second business pillar
2012 Launched Osteolinks TRAP-5b, an in vitro diagnostic
reagent kit with genetically modified silkworm technologies
2018 Launched IgG4 measuring reagent kit for use on an
automated analyzer
2019 Acquired Kamiya Biomedical, LLC to gain sales networks
and know-how for regulatory clearance in the U.S.
2019 Acquired Capricorn Products, LLC to strengthen
procurement of raw materials for in vitro diagnostic reagents in
the U.S.

Glass Fiber Business • • • Providing high-performance glass that matches the times, strengthening our leading position in theglass fiber industry

1949 Start glass wool
production —first in Japan

Under the motto, "Let’s turn anything
into fibers," Nittobo is converting various
materials into fibers and has pioneered
many technological firsts in Japan

1964 Glass fiber adopted
for use in Tokaido Shinkansen
nose cone
1967 Fukushima glass fiberyarn factory newly establishedDirect melt furnace No.1
installed to meet growing
glass fiber demand
1969 Fukushima No.2
factory newly established(Plant specializes in productionof glass cloth for printed
wiring boards)
Launched glass cloth for
printed wiring boards

1984 Launched T-glass (lowthermal expansion)
1985 Launched finecount yarn
1988 Yarn manufacturer
Nittobo Norplex Oak Co., Ltd.
established
Predecessor of NITTOBO ASIA
Glass Fiber Co., Ltd. (Taiwan)

1998 Launched NE-glass(low-dielectric)

2006 Launched Flat Fiber2019 Cloth manufacturer Baotek Industrial Materials Ltd.
(Taiwan) converted into a consolidated subsidiary  2015 Nittobo Dishcloth™ won Good Design Long Life
Design Award
2018 Launched “Innovative Fabric™” applying interlining­processing technology

Foundation for Value Creation

1938 Succeeded inindustrial production of glass
fiber and started
manufacturing rock wool—
both firsts in Japan

Textile Business • • • Contributing to the creation of comfortable lifestyles
1898 Koriyama Kenshi
Boseki Co., Ltd. established in
Koriyama
1918 Fukushima Seiren
Seishi Co., Ltd. established in
Fukushima

1933 Staple fiber operations
started at Fukushima Factory

1923 The above twocompanies merged to form
Nitto Boseki Co., Ltd.

1976 Introduced single dotinterlining machines
1988 Introduced double
dot interlining machines

2004 Launched SDDC®
interlining that canaccommodate difficult-toadhere materials

Data Section

1960 Launched Nittobo
Dishcloth™
1965 Launched shirt
interlining brand“DANKEEP™”
Started production of dualstructure stretchable yarn
“C·S·Y™”
1969 Launched ladies’
apparel interlining brand“Dan Reine™”

Net sales of

78.7 billion yen

Net sales and operating profit ratio (consolidated)
Operating profit ratio: Life science, others

Operating profit
ratio of: Construction materials and glass fiber (including construction materials until 2009)

1925

1930

1940

1950
Conclusion of Second World War

02

Nittobo Group

7.6%

*N
 on-consolidated
net sales for
Nittobo until
FY1989: Textile

1960

1970
Tokyo Olympics and the newThree Sacred Treasures (a color TV,
an air conditioner, and a car)

1980
Mobile communication
services using first-generation (1G) technology

1985
Plaza Accord

1990

in FY2020
1995

2000

Microsoft launches Windows 95

2005

2010
Financial Crisis

2015
Great East Japan Earthquake

COVID-19
pandemic

2020
(FY)

Integrated Report 2021

03

Main Lineup

Glass Fiber Division

For details, please see page 28

Life Science BusinessFor details, please see page 34

Nittobo as Global Niche No. 1

Only 1, No. 1 Technologies

Nittobo as Global Niche No. 1

World-leading precision in glass fiber
Special Glass made from uniquecompositions

 lectronic Materials: No. 1 in the world for ultra-fine, ultra-thin Special
E
Glass by refining our technologies and product capabilitiesI ntegrated system from antisera­production to reagent sales o. 1 in the world for immunological plasma protein diagnostics throughN
global, vertically integrated business from antisera to reagent manufacturing and sales

 omposite Materials and Industrial Materials: No. 1 in client satisfaction
C
by contributing to value creation through effective proposals, response
capabilities (speed), and quality

Supply Chain

Glass Fiber Yarn
BusinessA

Plastic compounders

Molders

Yarn

Industrial
materials

Glass Fiber
B
Yarn Business

Glass Fiber Yarn Business

Clients•D iagnostics•H ealth checkups•P hysical examinations

Strategies for Value Creation

Glass Fiber
B
Yarn Business

Medical institutions

Electronics manufacturers,
automotive manufacturers,
residential building material
manufacturers, etc.

Choppedstrands
Glass fiber yarn

Electronicmaterials

In vitro diagnostic reagent kits are used in health checkups, physical examinations, and hospital
visits, and we provide them to medical and laboratory institutions through integrated production
from raw materials to the finished product.

Medical business(In vitro diagnostic reagents)

RovingPlastic
reinforced
materials

Nittobo’s Value Creation

Only 1, No. 1 Technologies

Glass fiber cloth
Glass Fiber
C
Cloth Business
Glass Fiber cloth
manufacturers
Glass Fiber for
Industrial
D
Materials Business

CCL(copper-cladlaminate)manufacturers

Printed wiring
board
manufacturers

Semiconductor
manufacturers

Smartphone, PC,
and other finishedproduct
manufacturers

Various
manufacturers

Specialty chemicals
business

We provide highly unique, functional polymer compounds for a wide range of applications tomeet customer needs.

: Nittobo GroupMain
applications

Auxiliary agent for inkjet printing, water
processing agents, papermaking and metal
processing auxiliary agents, etc.

We provide a wide range of distinctive glass fiber products for use in reinforced plastics andelectronic materials.
Glass fiber yarns

B

AutomobilesMainapplications

Main
applications

Housing

Beverage business

Foundation for Value Creation

Glass fiber for composite materials A

We provide soft drinks, container molding, beverage manufacturing, and bottling, mainly
through OEM contracts for private brands.

Cloth materials
used in electronic andindustrial
materials

Drug stores
Clients

Supermarkets

Glass Fiber Cloth BusinessWe provide glass fiber cloth woven with glass fiber yarn for electronic materials in a wide
range of applications, from infrastructure such as base stations and data centers to electronic devices such as PCs and smartphones.

Glass fiber cloth for electronic materials C

Data centers

Textile Business
Printedwiring boards(Motherboards, semiconductor packages)

Glass Fiber for Industrial
Materials Business

Base stations

Smartphones

We provide glass wool and glass fiber for industrial and construction materials.

Glass wool

Glass fiber for industrial materials D
AutomobilesMainapplications

04

Nittobo Group

Only 1, No. 1 Technologies

Nittobo as Global Niche No. 1

The world’s thinnest level ofadhesive interlinings

 o. 1 in the world for high-performance materials using adhesiveN
technology

Adhesive Interlinings
Dishcloths
Raw yarn

We provide adhesive interlinings for garment silhouettes and our long-selling Nittobo Dishcloth™.

Main
applications

Main
applications

Housing

For details, please see page 36

Data SectionMainapplications

ApparelConstruction

Integrated Report 2021

05

Value Creation Process

Social Issues &ChangeFormation of a recycling-oriented society Corporate Philosophy
INPUT

Higher speed­communication(5G/6G)

Manufacturing
capitalCapital investment............. 16.2

Entering the IoT era

Intellectual capital

Population issues, etc.

Supplying products andservices that help
resolve energy and­environmental issues•L ightweight, energy-efficient­automobiles and aircraft
Chopped strands
Glass fiber cloths•E nergy-efficient housing, recycling
Glass wool insulation

Adapting to climatechange and a
resource-recycling
society

Only 1, No. 1
Technologies

R&D expenses............... 2.1
Patents held.............. 653

OUTCOME........... 2,769

Powerful
Value Chain

Delivering products andservices designed toadvance the­digital transformationof society

Ability to adaptchanges andneeds

employees

Supplyingproducts that
reduceenvironmental
burden•W aste water treatment
Specialty chemicals•H igh-speed large-volume data
communications•N etwork infrastructure connecting
everything
Special Glass cloths•S maller, thinner electronic devices
Ultrafine glass yarns

to socialcustomer

Ultra-thin glass cloths• Infrastructure repair and reinforcement
Non-woven fabricGlass cloths

Creating livable,
convenient andsafe advanced
digital societies• Sustainable auxiliary materials
Interlinings
Inner materials

Financial capital
Total assets

Realization of
SDGs and ESG­management withcorporate social
responsibility........... 184.7

Social capital
Consolidated
subsidiaries

Improvement ofpreventive­medicine andincrease inhealth-oriented
mindsets

06

Nittobo Group

Providing products andservices that c­ ontributeto health, security,and safety(as of September 30, 2021)

St

S tr
en

re
n

Fo
s

..... 23 companies
Of those, overseas:
Taiwan, Macau, UnitedStatesCo
Realizing continuous,
sustainable growth for
the Company

nt

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ter

in u

g th

he

ou

en m

ne

hu

n re

nt growtha na ge m

ffor
ts

ma

sly

le m eto address

source

refo
r

e nt

s who

m c orpo

rate

eg
strat
b as eeonn v irca n

mg o ve

n
me

ake

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ad

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anc

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u

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n
re
e
iff

ce

•S
 afe and reliable beverages
Tea-based beverages
Sports drinks•F ashion and functionality
Deodorizing and antibacterial interlinings

Realizing healthy,safe andsecure societies

Innovative Fabric™

•C oexistence with society• I nitiatives for safety•U tilization of diverse human resources

Contributing to
the realization ofa sustainable
society

Integrated Report 2021

Data Section

Increased demandfor Special Glass(low dielectric, lowthermal expansion)

Im pbillion yen•S upporting the shift from treatment
to prevention
In vitro diagnostic reagents

i es

Big
VISION
2030

Foundation for Value Creation

Workforce•W ind power
Chopped strands

Value
Sourcesbillion yen

Human capital

Risks and
Opportunities in theBusiness Environment

OUTPUTAs a corporate group that continues to create a global No. 1 niche business,
we aspire to contribute to “Environment/Energy,” “Digital Society,” and“Health/Security/Safety” for realizing a sustainable society.

Low birthrate andaging population(Japan)

Mid-Term Business Plan

Strategies for Value Creation

billion yen

Evolution of
AI technology

Societal Structure
IssuesMaterial Issues

enhance its significance by striving to create healthy andto contribute to the realization of prosperous communities.

(FY2020)

Acceleration of laws
and regulations

Becoming an­Ultra-Smart Society

The Nittobo Group will, as a corporate group,
comfortable lifestyles, and thereby continue

Nittobo’s Value Creation

Intensification of
Global Warmingand Environmental
Issues07

Nittobo Group’s Materiality
In order for the Nittobo Group to enhance its social value and continue contributing to the realization of prosperous communities, we have identified materiality as important management tasks to address to help solve social issues through the lens of
ESG and the SDGs.
We have defined seven material issues from the perspective of strategic CSR, which leverages the strengths of the Nittobo
Group to contribute through business activities, and from the perspective of basic CSR, which focuses on ESG to build a foun-

The process of identifying materiality goes back to the discussions

with the External Directors’ input, and then fed back to the business

we had prior to the formulation of the new Mid-Term Business Plan,

divisions. Through this cycle, we defined our materiality as building

when we started to discuss the purpose of the Nittobo Group’s exis-a foundation that will enable us to contribute in the three areas oftence and the value we could offer. Each business division analyzed“Environment/Energy,” “Digital Society,” “Health/Security/Safety”

the current environment and formulated a vision for the future, andand achieve sustainable growth. We have determined risks andthe business divisions and the President held multiple intensive

opportunities, clarified the direction of our business portfolio by­discussions based on those analyses. The executive management

leveraging the strengths of the Nittobo Group, and developed

proposals were developed in this way, subsequently discussed in­specific initiatives to realize our vision.

Nittobo’s Value Creation

dation that enables sustainable growth.

Materiality Identification Process

depth by the Board of Directors from an independent standpoint

Social Issues

Arrival of a Super Smart Society• Higher speed telecommunication (5G/6G)• Evolution of AI technology, arrival of IoT era

Opportunities

Key Measures• Increase in environmental costs•R estrictions on business due toenvironmental regulations•E limination of non-environmentalfriendly products and companies• Increasing demand for sustainable products•E xpanding demand for composite materials tomeet the needs of lightweight automobiles
and aircraft• Increased demand for insulation materials due tostricter energy conservation regulations•D evelop new environmental-friendly
products• Decline in technological superiority• Replacement by other materials•S peed of technological developmentin the electronic materials industry• Increasing demand for devices that require
high-speed, high-capacity processing•U tilization of the production system in Japanand in Taiwan, where electronic materials
are concentrated•O pportunities to expand sales and develop
next-generation products throughfirst-mover advantage• Grow profits through Special Glass•S trengthen development capabilities for
new products•S trengthen solution capability to increasevalue for customers•S hrinking domestic market due todeclining birthrate•B usiness continuity risks specific tobiologically-derived materials•R eplacement by other diagnostic
agents•G
 lobal shift from treatment to prevention due toincreased awareness•E xpanding demand for diagnostic reagents in Asia
due to population growth and rising income levels•U tilize three raw material production bases in
the U.S.
• Utilize the value chain from upstream (antigens,antibodies, raw materials) to downstream(product manufacturing and sales)•E xpansion of sales channels in the field of invitro diagnostic reagents•S trengthen development capabilities for
new products•S trengthen solution capability to increasevalue for customers

Strengthen managementfoundation•D iversification of factors causingchanges in the socioeconomic
environment•P rice fluctuations of fuels,
materials, etc.
• Impact of geopolitics and humanrights issues, etc. on the supply chain• Selection and concentration•C apture growth opportunities through innovativetechnology development• L ean management that is not substantiallyaffected by economic fluctuations•O ptimize business portfolio and review
unprofitable businesses•T ransform technology development andproduction technology through theintroduction of IT and digital transformation•M aintain sustainability in procurement andthe supply chain

Foster human resources forinnovation•D ecline in workforce due to lowbirthrate and aging population• Intensifying competition to
recruit young and specialized
human resources• Increasing diversity• Fluidization of the labor market• Innovation expected through humanresource development•C ultivate human resources for innovation• Implement diversity and inclusion• Workstyle reform and business reform• Improve employee engagement

Continuously revise corporate
governance• Expanding and refining CSR scope•C ompliance and security in aremote environment• Permeation of corporate philosophy•S trengthening the corporate foundation by
gaining trust from society• Continuously revise corporate governance•T horoughly implement corporate ethics
and compliance

Provide products and services that
contribute to environment/energy
Adapting to climate change and a
resource-recycling society

Provide products and services that
contribute to digital society

Provide products and services that
contribute to health/security/safety

Relevant SDGs

• Reduce CO2 emissions• Implement recycling and reusing

Foundation for Value Creation

Societal Structure Issues• Aging society with a declining birthrate (in Japan)• Population issues, etc.

Risks

Strategies for Value Creation

Intensification of Global Warming andEnvironmental Issues• Formation of a recycling-oriented society• Acceleration of laws and regulations

Nittobo Group’s Materiality

Realizing continuous, sustainablegrowth for the Company

08

Nittobo Group

Data Section• Increased geopolitical risks• Intensifying competition due to industry
reorganization, entry from other industries, etc.
• Increasing sophistication and complexity ofsocial demands• Accelerating the rate of change

Integrated Report 2021

09

Message from the CEO

Nittobo’s Value Creation
Strategies for Value Creation

Looking ahead to 2030,
we will continue to make contributions tosociety and the environment to become
the global niche No. 1 company.
Yuichi Tsuji
Director,
Representative and Chief Executive Officer

10

Nittobo GroupThe concrete themes of this vision are “contribute to environment/energy,” in which we further focus on
our contribution to sustainability and climate change issues; “contribute to health/security/safety,” in which
we will respond to the shift to preventive medicine and growing health awareness; and “contribute to thedigital society,” symbolized by the widespread adoption of remote work and the accelerating use of IoT and
AI in industry. We will enhance the Nittobo Group’s unique value with these three themes, in addition to theconventional economic growth in terms of sales and profits.

Data Section

In February 2021, the Company announced its Big VISION 2030 and the “New Mid-Term Business Plan
(FY2021–2023).”
The previous Mid-Term Business Plan was the first stage of a seven-year plan targeting 2023, the year of
Nittobo’s 100th anniversary, and a four-year plan with goals set for 2020, the year of the Tokyo Olympic andParalympic Games. In the final year of the plan, the outlook became very uncertain due to the spread of COVID-19,
the slowdown of the global economy, trade friction between the U.S. and China, and the postponement of the
Olympics and Paralympics. With people’s values, lifestyles, and workstyles undergoing transformation, andsocial and industrial structures poised for change, we came to the conclusion that it would be better to establish a vision of what kind of company we should be in the mid- to long-term, and make the new Mid-TermBusiness Plan the first stage of realizing that vision, rather than simply formulating a short-term plan.
First, we redefined our vision for the Group in 2030, 10 years in the future, as Big VISION 2030, a visionthat we should work towards from a medium- to long-term perspective without being bound by immediateshort-term events.
In formulating our vision, we set three themes that would enable the Nittobo Group to leverage its
strengths and contribute to society even as the world’s values continue to change dramatically.

Foundation for Value Creation

Background and Formulation of the
Nittobo Group’s Vision for 2030 [Big VISION 2030]

Nittobo Group’s Vision for 2030 [Big VISION 2030]
As a corporate group that continues to create a global niche No. 1 businesses,
we aspire to contribute to “Environment/Energy,” “Digital Society,” and“Health/Security/Safety” for realizing a sustainable society.

For information
about Big VISION
2030, please see
page 16.

Provide products andProvide products andProvide products andservices that contribute toservices that contribute toservices that contribute toenvironment/energy

digital society

health/security/safety

Nittobo strives in the pursuit of all stakeholders’ satisfaction.

Integrated Report 2021

11

Thorough Discussion and Emphasis on Diversity in
the Formulation Process

Foundation for Value Creation

Results of the Previous Mid-Term Business Plan
and Emerging Issues

For information about
the “New Mid-TermBusiness Plan
(FY2021–2023),”
please see page 17.

In the previous mid-term plan, we achieved significant results in promoting high value-added strategies andbuilding a foundation for future growth, as well as creating a framework for promoting medium- to longterm research themes through the establishment of the Research & Development Headquarters.
As a stepping stone to the future, we worked to increase the capabilities of Special Glass in the Glass Fiberbusiness. We increased the number of production sites in Japan from one to three, and proceeded with theconstruction of a new factory in Taiwan. In the Medical business, we invested in the expansion of overseas
raw material plants and the expansion of domestic factories, as well as in M&A to strengthen the value chainthat covers everything from raw materials to finished products.
Although the economic environment was favorable in the first half of the previous plan’s period, someissues emerged in the second half, especially at the end, due to the COVID-19 pandemic.
One issue is the weakness of the business foundation of unprofitable businesses. In the Textile business, which
had been in a slump, we could not expect further recovery by extending the existing business model, so drastic
reform was necessary. Even within the strong Glass Fiber business, it became clear that commodity products
were severely impacted by the stagnating economy and lacked a competitive edge. In both businesses, we
engaged in structural reform to improve efficiency as well as optimize production facilities and business scale.
Another issue is that although we have taken the initiative in expanding our production capacity for highvalue-added products, we have yet to get a full return on our investment. At present, demand is at a standstill
due to a variety of factors in addition to the COVID-19 pandemic, but we are fully committed to improving
the yield and productivity of new facilities and accelerating research and development so that we canrespond when demand recovers to full-scale growth.

Data Section

Nittobo Group

Strategies for Value Creation

12

Nittobo’s Value Creation

For the new Mid-Term Business Plan, we placed great importance on the process of formulating the plan,and focused on having all employees consider it as relevant to themselves, not just as a discussion
among officers.
 ​We had a total of 18 intensive discussions over a period of seven months between myself and each division. In these discussions, we thoroughly discussed all kinds of issues, beginning with what kind of value
Nittobo provides, and extending to specific growth strategies, measures to strengthen the foundation, andstructural reform. Before holding discussions with each division, I asked every officer, manager, section chief,and section staff in their departments to first hold a broad dialogue, with the purpose to deepen the deliberation based on the diverse opinions within the Company and summarize the major trends in thought.
 ​After the formulation of the new Mid-Term Business Plan, I delivered five video messages on the intranet
explaining Big VISION 2030 and the plan itself. When I visited one of our factories, I heard an employee saythat they had seen my video messages, which made me feel that the Mid-Term Business Plan, which we all
created together, was well received, so I would like to continue creating these messages in the future.
 ​In the process of formulating the vision and the new Mid-Term Business Plan, the Board of Directors discussed a wide range of issues, from the Nittobo Group’s purpose in society to future prospects and sustainable enhancement of corporate value.
 ​The Company’s Board of Directors consists of seven members, four of whom are External Directors. The
External Directors are from diverse backgrounds, including an expert in accounting, auditing, and taxation;
one person who has been involved in corporate management for many years, such as a chairman and president; a person with deep knowledge of technology management who has experience as a director of a
research laboratory in a large company; and a female lawyer with experience working internationally. The
vision and Mid-Term Business Plan formulated by the executive side were deeply discussed multiple times
before and at Board of Directors meetings. The External Directors provided multifaceted, frank opinions andsuggestions that we would not have found from an internal perspective.
 ​Their forthright opinions made me realize that our marketing and customer solutions areas needed
improvement. For example, one director said, “If we think that our customers are buying our products not
for the products themselves, but for their functions and value, we will be able to make new proposals, develop new products, and provide more value,” and another said that we should communicate with our customers about why they think Nittobo Group products are good, and enhance our customer solutions. In terms of
manufacturing technology and research and development, the following items were pointed out and referenced to create measures to strengthen our foundation: “The emphasis is on manufacturing high quality
products on time, but considerations to manufacturing efficiency improvements are weak,” and “While we
do not know when the current product lineup will become obsolete, there is no awareness of whether
research and development is being conducted with a view to five or ten years into the future.” ​As a result, the weight of discussions in areas such as proactive provision of value to society and risk-taking
has increased, and many of the comments and suggestions made by External Directors have been adopted
in the current Big VISION 2030 and “New Mid-Term Business Plan (FY2021–2023).”

For information onachievements andchallenges of theprevious Mid-TermBusiness Plan,please see page 18.

Integrated Report 2021

13

For information on
ESG initiatives,
please see page 38.

As stated in Big VISION 2030 and the “New Mid-Term Business Plan (FY2021–2023),” the Nittobo Group
strives in the pursuit of all stakeholders’ satisfaction. To this end, I believe it is my responsibility to bringabout sustainable growth and enhance corporate value through working on human resource development
and research and development from a long-term perspective, without getting caught up in short-term
events. At the same time, we are committed to openly discussing and sharing our activities and thoughts
with our shareholders and investors, and to listening carefully to their opinions.
 ​We look forward to earning your continued support and encouragement in the years to come.

Strategies for Value Creation
Foundation for Value Creation

There are two major environmental and social values that the Nittobo Group provides. The first is basic­corporate social responsibility (CSR), which is generally done by companies regardless of industry. This is theminimum responsibility of a company as it operates in society, and it includes environmental conservation,
respect for human rights, coexistence with local communities, compliance, and corporate governance.
In contrast, strategic CSR seeks to contribute to society by making full use of the Group’s technologies
and products.
 ​Under Big VISION 2030, our three businesses (Glass Fiber, Life Science, and Textile), which are deeply related
to the three themes mentioned above, will each aim to become No. 1 in their respective global niches. In the
new Mid-Term Business Plan, we will pursue how we can maximize the value that each of these businesses
provides. The plan also includes specific action plans to firmly address and work on ESG for the realization ofa sustainable society.
 ​In response to global warming and worsening environmental problems, we are working to provide“products and services that contribute to environment/energy,” including the use of glass fiber in structuralcomponents of automobiles and aircraft to reduce weight, and the use of highly insulating glass wool toimprove the thermal efficiency of homes and buildings. In addition, glass melting furnaces used in the­manufacture of glass fiber, use a lot of energy, so we will work to improve energy efficiency and reduce
CO2 emissions. Recycling waste glass is also a major part of our environmental response.
 ​With the dawn of an ultra-smart society, we will develop “products and services that contribute to digitalsociety” that support data centers, networks, and 5G communications networks. These new contributions
will be based on Special Glass with its low-dielectric and low thermal expansion properties.
 ​To support growing awareness of healthy living, we will provide “products and services that contribute tohealth/security/safety,” such as our in vitro diagnostic reagent kits in the Medical business.
 ​We believe that these efforts will inherently contribute to achieving the SDGs.

In Closing
Nittobo’s Value Creation

Environmental and Social Value Provided by the
Nittobo Group

Shareholder Returns

14

Nittobo GroupFor information on
our shareholder
returns policy andthe Message from
the Managing
Executive Officer,
who heads the
Corporate Business
Planning Division,please see page 19.

Data Section

Our basic policy on shareholder returns is to aim for stable growth in dividends while comprehensively taking into account the need to strengthen our financial position and retain earnings for future growth. The
Nittobo Group is aggressively investing to strengthen its foundation for future business growth. Reflecting
stable dividends and the continuation of active investment, the annual dividend per share for fiscal 2020
was set at 45 yen, the same as the previous fiscal year.
 ​In the future, we would like to shift to a policy of returning a certain percentage of earnings after we geton a steady track of medium- to long-term profit growth. We will also consider other flexible approaches toshareholder returns in addition to dividends, taking into account stock market conditions and our financial
situation. First and foremost, however, we will focus on achieving the goals of the new Mid-Term Business
Plan and establishing a stable, high-value-added profit structure.

Integrated Report 2021

15

Feature

Big VISION 2030 and the New

Nittobo Group’s Vision

As a corporate group that continues to create global niche No. 1­businesses, we aspire to contribute to “Environment/Energy,” “DigitalSociety,” and “Health/Security/Safety” for realizing a sustainable society.

Provide products andservices that contributeservices that contributeservices that contributeto environment/energy

to digital society

to health/security/safety

strengthen the management foundation, strengthen efforts to address environmental issues, and foster human resources
who can make a difference. The Nittobo Group will not only implement these growth strategies, but also strengthen the management foundation and enhance management with a strong emphasis on ESG to improve the quality of its management.

Previous
Mid-Term
Business Plan
FY2017–FY2020

New Mid-Term Business Plan
FY2021–2023

Daring toTransform andCreateRealizing Change and Creativity— 4 Key Measures —Provide products andNittobo strives in the pursuit of all stakeholders’ satisfaction.

An increase in demand for Special
Glass (low dielectric/low thermal
expansion)

Enhancement of preventive medicine/growing health promotion

Escalation of global warming/
environmental issues

Arrival of a super smart society

Social structural issues• Formulation of recycling-oriented society• Accelerate legislation• Higher speed telecommunications (5G/6G)• Evolution of AI technology, arrival of IoT era•A ging society with a declining birthrate(in Japan)• Population issues, etc.

Create further business growththrough high value-added products

Building aFoundation
for Growth
CapitalInvestment(including M&A)
(56.8 billion yen
over 4 years)

Management Foundation
Reinforcement

Evolve into a lean business entity(secure resiliency)

Action for Environment Issues

Make efforts to address environment
issues for a sustainable society

Nittobo Aims to be a Global Niche No. 1 Company

16

Nittobo Group

Aims to be the No. 1 company withhigh sensitivity

Aims to be the No. 1 company withhigh value-added productsthat can be aware, catch,and respond speedily to market demands

that refines and develops its unique technologies
to provide products matching market needs

Human Resources Development

Foster human resources/
organization/work environmentthat bring about changes

 row profits through Special GlassGExpand sales channels in the in vitro
diagnostic reagent field
Strengthen development capabilities for
new products
Strengthen sales force solutions toincrease value for customers
Lean management that is not substantially affected by economic fluctuations
Optimize business portfolio and review
unprofitable businesses
Transform technology development andproduction technology through theintroduction of IT and digitaltransformation

Data Section

Realization of SDGs/ESG­management, social responsibilities
as a company

Growth Strategy Implementation

Foundation for Value Creation

Provide products and2030. To realize Big VISION 2030, we will work on the following four long-term strategies: implement growth strategies,

Strategies for Value Creation

Big VISION 2030

The new Mid-Term Business Plan is the first stage in the implementation of our long-term strategy to achieve our vision for
Nittobo’s Value Creation

On April 1, 2023, Nittobo will celebrate the 100th anniversary of its founding. For the Nittobo Group to survive in a rapidlychanging environment and achieve sustainable growth over the next century, we must consider both the three-year period of
the Mid-Term Business Plan, and also address social issues based on changes in society and the economic environment ten
years into the future. To become a "Best Partner" for society, we have redefined our vision for the Nittobo Group in 2030 as
Big VISION 2030.
To realize a sustainable society, the Nittobo Group will continue creating global niche No. 1 businesses that contribute tosociety in the three fields where the strengths of the Group can be utilized: “Environment/Energy,” “Digital Society,” and“Health/Security/Safety.”

Mid-Term Business Plan (FY2021–2023)

Reduce CO2 emissions
Implement recycling and reusing
Develop new environmental-friendly
products

Cultivate human resources forinnovation
Implement diversity and inclusion
Workstyle reform and business reformImprove employee engagement

Integrated Report 2021

17

Feature

Achievements and Challenges of the Previous Mid-Term Business Plan,and Initiatives for the New Mid-Term Business Plan

MESSAGE

M&A, strategic partnerships• Acquired Kamiya (U.S.)• Acquired Frontier Institute• Established FAN Co., Ltd.
• Acquired Capricorn (U.S.)• Invested in Rimco Corporation

Glass Fiber
Life Sciences
TextilesCorporate and R&D ompleted construction
Cof NI-CoLabo

Started construction ofSpecial Glass factory in Taiwan
New medical factory (Koriyama)Increased domestic Special
Glass production

FY2021–2023

2020

2019

2018

 ithdrew interlining from China andW
consolidated production in Japan
Sold unused real estate
Reduced cross-shareholdings

2017

Previous Plan Results

New Plan Initiatives

Implemented the high value-added product strategy and created the foundation for
future growth

Hiroyuki Tada
Managing Executive Officer
General Manager of the Corporate
Business Planning Division

The Nittobo Group has been working to build a corporate structurethat can generate profits in any environment. Under the previous
Mid-Term Business Plan, while maintaining a sound financial position,
we prioritized the allocation of funds to growth investments
acquired through operating cash flow from business activities, thesale of unused land, and cross-shareholdings, in order to promotehigh value-added products. The new Mid-Term Business Plan aims
to improve ROE and ROIC by strengthening the management foundation through structural reform, and improving the efficiency ofworking capital through inventory reduction and cash management, while continuing to make necessary investments for further
business growth.

Dividend policy is one of the most important management issues
in our shareholder return policy, and our basic policy is to ensurestable growth in dividends. For fiscal 2020, the year-end dividend
was 22.5 yen, and the annual dividend was set at 45 yen per share,
the same as the previous year.
Over the medium to long term, we aim to return profits to shareholders with a target dividend payout ratio of 30% of steady earnings* from fiscal 2023 onward, when we will be on track for profit
growth. We will also consider other flexible approaches to shareholder returns in addition to dividends, taking into account stock
market conditions and our financial situation.

Strategies for Value Creation

 stablished Research &E
Development Headquarters

 cquired Baotek Industrial
A
Materials Ltd. shares (Taiwan)Increased production capacity ofSpecial Glass

Nittobo’s Value Creation

We aim to improve capital efficiency andensure financial soundness by increasing
profitability and efficiency.

During the four-year period of the previous Mid-Term Business Plan, we conducted capital investment of 56.8 billion yen,including M&A, to build a foundation for future growth. We also established the Research & Development Headquarters tostrengthen R&D, and have been working to increase personnel and improve facilities.
Issues that became clear after that four-year period include the results of strategic investments, implementing structuralreform in business areas with weak profit structures, and ensuring resilience to various business risks. These issues will be
addressed in the new Mid-Term Business Plan.
Under the new Mid-Term Business Plan, we will utilize the foundation established in the previous plan period to reap the
benefits of our investment in the Glass Fiber business, and will further strengthen our production facilities for Special Glass. In
the Medical business, we will focus on expanding sales in Japan and overseas by leveraging our value chain. At the same time,
we will implement structural reform of businesses with low profitability in order to strengthen our management base andincrease corporate value.

*Revenue excluding sales of assets, etc.

Gain the benefits of growth investments• Glass Fiber business
Create further growth by shifting resources to high value-added products

Basic Strategies of the New Mid-Term Business Plan

• Medical business
Utilize the global value chain for business development• Medical business
Strengthened the vertically integrated business model from raw material
development to research, production and sales by promoting M&A and­strategic alliances

Structural reform of unprofitable businesses

Implement Growth Strategies

Strengthen Management Foundation

Create further business growth withhigh value-added products

Evolve into a lean corporation (ensure resiliency)

Improve Profitability and Efficiency

Ensure Financial Soundness

 row operating profit/EBITDA
G
Achieve operating cash flows to cover investments(cumulative free cash flows for 3 years ≥ ±0)Generate cash flows from active investments
Reduce costs and working capitalEmphasize financial discipline and curb the increase
in interest-bearing debt by reducing assets andstrengthening cash management capabilities.

Foundation for Value Creation• Glass Fiber business
Strengthened production capacity for Special Glass (yarn) and secured production system for glass cloth→ Evolve into a lean corporation

Created a system to promote medium- to long-term research themes through theestablishment of the Research & Development Headquarters

Financial Targets

Net sales
Operating profit
EBITDA

Environmental Targets
FY2020(Actual)FY2023(Target)78.7 billion yen

100 billion yen

6 billion yen 14.0 billion yen
12.3 billion yen 25.0 billion yen
15.6%

25%

FY2023(Target)

ROE

8.4%

10%

Considering ways to achieve a 30% reduction in emissions by FY2030 (compared to FY2013)*

ROIC

2.9%

6%

2. Reducing waste glass

Equity ratio

53.7%

55%

2030 target

0.45 times

0.4 times

Debt-to-equity ratio

Improve Capital Efficiency (ROE and ROIC)

Achieve virtually zero waste
glass volume(yen)

Capital Investment (based on acceptance, including M&A)
3-year cumulative
45.0 billion yen(billion yen)

20

16.9

16.7

16.2

300

R&D Expenses

3-year cumulative
7.2 billion yen(billion yen)

3.0

2.1
2.0

10

1.6

1.5

1.7

100

1.0

50
0

FY17

FY18

FY19

FY20

FY21
FY22
FY23
(Annual (Annual (Annual
average) average) average)

0

70

FY17

FY18

FY19

FY20

FY21

FY22

208.77205.76188.57

Dividend payout
ratio of 30%

148.73140.50based on steady earnings

115.15
96.80

7.0

80

263.97

250

150

5

0

(%)

Earnings per share (left axis)
Dividends per share (left axis)
Dividend payout ratio (right axis)

200

15

Data Section

EBITDA margin

1. CO2 emissions reduction

FY2020(Actual)

21.7

21.4

25.8
25.00
FY13

25.00
FY14

30.00
FY15

18.6
35.00

19.4

30.3

40.00

45.00

15.2
40.00

60
50
40

21.6

30

45.00

20
10

FY16

FY17

FY18

FY19

FY20

FY23

0

FY23

* In support of the Japanese government’s new reduction target for FY2030 announced in April 2021, we are carrying out specific studies with a view to reducing CO2 emissions by 30% in FY2030.

18

Nittobo Group

Integrated Report 2021

19

Mid-Term Business Plan Initiatives

Glass Fiber Division

Composite materials are used in cars, home appliances, residential

ous plan period were the accelerated development of advanced

building materials, and other applications in a very broad market.

information technology and the expansion of the electronics indus-

However, price competition in the mature market is fierce, andtry centered on 5G (5th generation mobile communications system).

except for a few high value-added products, it has become difficult

In line with these changes, we have made a major shift in our Glassto add our own unique value. Therefore, we have begun structural

Fiber business to focus on expanding production and sales of ourreform of the composite materials business, and optimized the pro-high-performance glass fiber, Special Glass.

duction system for efficiency, while at the same time creating an

achieved satisfactory results in securing a stable supply system.

implementation system for new development of high value-added
Looking back at the previous Mid-Term Business Plan, we recognized that we needed to improve our marketing skills, such as
swiftly recognizing market trends and customer needs affected bycant export restrictions in the Chinese market stemming from tradesocial changes, and implementing them in our strategies. In terms

friction between the U.S. and China, fiscal 2020 revenues fell short ofof business operations, the remaining issues are to realize the ben-

expectations given the capital investment.

efits of the capital investment in Special Glass, and to implement

market for composite materials such as reinforced plastics.

take off in Japan, but on a global scale, studies have already started

when the market will regain its growth momentum after the current

for 6G standards and technologies. A major goal of the new Mid-plateau, and adjust production accordingly. The new factory to pro-Term Business Plan is to develop new products that meet 6G stan-duce Special Glass yarn in Taiwan will start operation in Octoberdards, build processes to meet them, and complete the roadmap for2021 as scheduled, and we plan to build a flexible production sys-

mass production. The Fiber R&D Center and the Glass Fiber Division

tem to respond to trends in demand.

are working together to take advantage of the current market stag-

The second task is to steadily advance technological and productnation as an opportunity to take the next step.

Strengths of the Nittobo Group’s Glass Fiber Businessproducts to expand their applications and sales channels.

However, in addition to the COVID-19 pandemic, due to signifi-

Another major change is the intensification of competition in theNow, there are two tasks laid before us. The first is to determine

structural reform and high value-added products in the composite
materials business.

Aiming to be the World’s No. 1 Company with High Sensitivity
day-to-day opportunities for communication to handle the needs

goal to become the No. 1 company with high sensitivity. This will

and wants of our customers at the right time. We believe that theenhance Nittobo’s corporate value by consolidating market andaccumulation of technological capabilities through careful informa-customer feedback with high sensitivity and implementing it intion follow-up and research and development will lead to future

product planning and development, with customer success as the

success, so that customers can continue to trust Nittobo.

Product Features• Ultrafine glass yarn: Miniaturization and thinning of electronic devices→ Producing the world’s thinnest yarn with consistent quality• NE-glass: Low-dielectric properties to reduce transmission loss and noise→ Contribute to high-speed, high-volume communications linked to 5G• T-glass: High strength and low thermal expansion→ Essential for high-density package substrates

Glass fiber yarn(monofilament bundle)

Glass fiber cloth (skew)

Glass fiber cloth (flat)

Technology Features•H olds both spinning and weaving processes, enabling integrated production(few companies have both spinning and weaving large-scale processes)•S pinning process (Glass Fiber Yarn Business segment): S table production of the world’s thinnest glass fiber (3.5μm diameter),
NE/T-glass yarn.
•W eaving process (Glass Fiber Cloth Business segment): Utilizing know-how from the spinning process, weaving and treatment
processes are optimized for yarn characteristics

Data Section

Upon review of the previous Mid-Term Business Plan, we set a new↓ 1 glass fiber = monofilament (minimum diameter 3.5 μm)

Foundation for Value Creationties, including a new factory in Taiwan. We believe that we haveManaging Executive Officer
General Manager of the Glass Fiber Division andTechnology Division

Strategies for Value Creation

The biggest changes in the business environment during the previ-

yen in our Glass Fiber business and expanded our production facili-

Kazuhiko Igarashi

development with an eye on the future of 5G. 5G has yet to robustly

Reflecting on the Previous Mid-Term Business Plan

In terms of capital investment, we invested more than 30 billion

Nittobo’s Value Creation

Nittobo aims to be the No. 1 company with highsensitivity and to solidify our position at the top.

Adding Value in the Composite Materials Businessstarting point. I think it will be very important to make the most of

Responding to Trends in the Special Glass Market

20

Composite materials constitute a volume market for glass fiber,

It will be key to utilize Special Glass in the composite materials

which is used to reinforce plastics. It is a mature market with many

field and expand the applications and sales channels for the world’s

glass manufacturers setting up large-scale factories around thefirst mass-produced modified cross-section glass fiber (flat fiber).

world. To survive in this environment, we believe it is necessary to

While ordinary glass fiber has a circular cross-section, our flat fiber isestablish a presence in the high-end niche, Nittobo’s specialty. In thebased on our proprietary technology and has a flat cross-section. We
are increasing the variations by developing ultra-flat and ultrafine

Special Glass is a base material for electronic materials used inSpecial Glass products, such as low-dielectric glass cloth (NE-glass

information infrastructure equipment for high-speed, high-capaci-

cloth) and low thermal expansion glass cloth (T-glass cloth). Due toty communications, such as data center servers and 5G base sta-

the trade friction between the U.S. and China and the COVID-19

engineering plastics and super engineering plastics fields, we aretions. Considering the ever-increasing global data traffic, thepandemic, the market expansion of 5G infrastructure equipment

focusing on adding further value by utilizing our unique glass fiber

types that support further miniaturization and weight reduction,

progress of 5G, and the need for even faster and higher capacity

has been delayed 1 to 1.5 years, and we expect full-scale growth tocharacteristics such as high radio wave permeability, high strength,and expanding into industrial fields where glass fiber has never beenprocessing, we believe that the market will continue to grow for

resume in 2022 or later.

high heat resistance, and low thermal expansion.

used before.

Nittobo Group

Integrated Report 2021

21

Life Science Division
Nittobo’s Value Creation

Aiming to further evolve theglobal value chain.

Strategies for Value Creation

Tatsuo Sakae

Executive Officer
General Manager of the Medical Division
Representative Director
President and Chief Executive Officer of
NITTOBO MEDICAL CO., LTD.,
Chairman/CEO, Nittobo America Inc.

believe was our most significant achievement. The most important

Reflecting on the Previous Mid-Term Business Plan
Kasei Co., Ltd, which is known for its strength in R&D of latex andwith one hundred testing parameters to determine health status

other raw materials for IVD reagents.

from blood and urine. We have established a significant presence

In the upstream production of antisera, Nittobo acquired

in immunological reagents, and we are recognized in the industry

Capricorn Products, LLC on the East Coast of the United Statesas “Nittobo the Immunology Specialists.” The Company’s greatest(Maine), adding it to Nittobo America Inc.’s existing bases on thefeature is our established integrated value chain. This starts

West Coast (California) and in the Midwest (Iowa), giving it three

upstream with the manufacture and sale of antisera, the raw

bases and an overwhelming share of the global market for goat-de-­materials for IVD reagents, and extends downstream to the manu-

rived antisera. In addition, a factory is under construction in

facture and sale of the final product, the IVD reagent. In the previous

California that will expand the production space by 150% when it is

Mid-Term Business Plan, we further strengthened this verticallycompleted in the second half of 2022. Mid-stream, we have integrat-­integrated business through M&A and capital investment.

ed and consolidated the factories of NITTOBO MEDICAL CO., LTD.

R&D lies at the very top of the value chain. We strengthened our(Koriyama City, Fukushima Prefecture), which manufacture the final
IVD reagents, and doubled the production space. Downstream, we

Corporation, which conducts research on genetically modified silk-acquired Kamiya Biomedical Company, LLC, which has global regula-worms, and by acquiring Frontier Institute Co. Ltd., which develops

tory approval know-how and a sales network in the U.S. IVD market,

bioassay systems and conducts antibody research. To further expand

the largest in the world.

the field of IVD reagents and accelerate our research and development, we established FAN Co., Ltd., a joint venture with Fujikura

Not only has the core of the value chain been strengthened, butboth the front-end and back-end have been extended, which I­biologically-derived raw materials requires high stability in bothvarious organs in the body swell and harden), which is recognized as

quality and quantity. We need to control the quality variation of

an intractable disease. The convenience of being able to use a gener-

biologically-derived diagnostic reagents and produce them in theal purpose automated analyzer for analyzing specialist variables isquantities required by our customers. With a stronger, more integrat-

highly regarded and the Company has gained the top share in Japaned structure, the Nittobo Group has increased its presence amongas a result.

the major global players in testing equipment and diagnostics.

New Mid-Term Business Plan Initiatives
To become the world’s No. 1 company in the field of immune IVD

expect a breakthrough that will enable us to gain a large market inproducts in plasma protein diagnostics, the new Mid-Term Businessthe future.

Plan will make maximum use of the Nittobo Group’s strengths in thevalue chain to explore and expand its businesses.
We will continue to increase sales steadily by digging deeper into

Far upstream

UpstreamMid-stream

Strengthening of R&D functions inantigens and antibodies

Expansion of antisera production
for raw material

Expansion of in vitro diagnostic
reagent production sites

Rimco Corporation (Uruma City, Okinawa):
Investment made August 2018

Capricorn Products, LLC (Maine, U.S.A.):
Acquired June 2019

Frontier Institute Co., Ltd. (Ishikari City,
Hokkaido): Acquired March 2019

Nittobo America Inc. (California, U.S.A.):
Completion of a new factory due second
half 2022

NITTOBO MEDICAL CO., LTD. (Koriyama
City, Fukushima): Construction of new­factory, completion due December 2021

FAN Co., Ltd. (Chiyoda City, Tokyo):
Jointly established April 2019

Downstream

production space in Koriyama City will achieve results. At present,

the domestic market. On top of that, to grow sustainably over theantisera, the raw material for IVD reagents, is produced in the U.S.

medium to long term, we need to expand our market overseas, andand shipped to Japan, where the final product is finished and sold.

steady efforts to achieve this are essential.

However, we are considering ways to manufacture and sell the final

We are starting to build a business model to sell Nittobo branded
products in Asian countries while strengthening partnerships with

Building a global integrated production system

In terms of production, for the time being, we will focus on making sure that the new factory in California and the newly expanded

product within the U.S. in the future.
To improve value chain operations and connect management inmajor global players. Although this is a new challenge for theJapan and the United States, we have started personnel exchanges

Nittobo Group, I feel that the next generation must take the leadto encourage deeper collaboration and started developing humanwith an eye to the future.

resources who will be responsible for our future. Cultivating humanAccess to global pharmaceuticalregulatory clearance expertise andacquisition of sales networks

From a development perspective, we are working to dig deeper

resources will be essential for us to succeed in expanding to moreand expand further. Highly sensitive immunological reagents thatemerging countries because a strong value chain is supported by its

Kamiya Biomedical Company, LLC

can measure previously unmeasurable concentration ranges, such as

human resources. While keeping our vision for 2030 in mind, we willslight variations in the body, will be developed and studied thor-

rotate our personnel through development, production, and sales

oughly. We are also investigating the development of diagnostics

based on backcasting to build a system to develop the next genera-

and measurement methods that will expand the scope of conven-tion of human resources.

(Washington, U.S.A.): Acquired January 2019

Data Section

capabilities in antigens and antibodies by investing in Rimco

for IgG4-related disease (a disease of unknown etiology in which

Foundation for Value Creation

The Nittobo Group has developed in vitro diagnostic (IVD) reagents

In new IVD reagent development, we launched a diagnostic agent

thing in the IVD reagent business is a stable supply. The use oftional immunological reagents. Although this will take time, we
22

Nittobo Group

Integrated Report 2021

23

Research & Development Headquarters
Nittobo’s Value Creation

Keeping researchers motivated anddelivering innovation to the world.

Minoru Takeuchi
Managing Executive Officer
President of the Research &Development Headquarters“We believe that R&D and technological innovation are essential

Mid-Term Business Plan, with the number of patent applications

for the development of Nittobo.” This is the message that President

more than doubling from FY2017 to FY2020. Conference presenta-

Tsuji shared with the Company when he took office. His strong

tions also increased 500% compared to FY2016. Many conferences

commitment to research and technological development trans-

could not be held due to the COVID-19 pandemic, but we plan toformed into the idea that we should create new businesses that

resume active participation from FY2022 onwards.

cross divisional boundaries by leveraging synergies. In 2017, we

In addition, on the hardware side, the new NI-CoLabo buildingof the Research & Development Headquarters was completed in

the business divisions, to establish a consolidated Research &April 2020 as a landmark for the Nittobo Group’s research andDevelopment Headquarters.

development, creating an open development environment for pur-Until then, product development and R&D organizations weresuing synergies beyond the boundaries of business, company, andunder the control of each business division, so development was

region. Our researchers are very satisfied with the research environ-limited to certain businesses. This also raised concern that researchment in the new NI-CoLabo building, including the Recreational

expenses were dependent on business profitability. The goal of theSpace where researchers can interact with each other. We aim toprevious Mid-Term Business Plan was to establish a system in which

use it as a place that enables collaboration among researchers that

the Nittobo Group’s research and technology development would

leads to innovation.

be conducted from a long-term perspective, without being affect-

Open innovation is progressing with external organizations. We

ed by short-term performance or the business environment. The

have also achieved steady results in joint research with universities

plan also called on each R&D center to work synergistically in thethat have strong basic research. For example, the “N-Assay LA IgG4

same direction. With the reorganization, we were able to success-

NITTOBO,” which was successfully developed in collaboration withfully establish and share the research direction of each R&D center.

Shinshu University Hospital and 23 other university hospitals andmedical institutions, was highly regarded because it can measure
IgG4 in serum with a general-purpose automated analyzer, with-there are 120 people and, as the system is further enhanced, theyout the need for a dedicated analyzer.

are really achieving results.

adapt to the rapidly changing society and technology.

The Nittobo Group was the first in Japan to industrialize glass

With the support of the Sustainability Committee, chaired by thefiber, glass wool, and rock wool. Research and development into

President, the Environment Technology Strategy Office will work tomaterials lacks the glamour of end products. Moreover, the related

reduce CO2 emissions and achieve virtually zero waste glass.

technology needs to be steadily built from the ground up. While

with the immediate goal of implementing digital transformation

it may seem frustrating to young researchers since it takes time to

and AI in glass fiber melting furnaces, which consume a lot of energy.

see results. I believe that my mission is to create an environment in

We believe the previously mentioned MI is also highly compatible

which researchers are motivated and work in an open and freewith digital transformation, as it has accelerated our research andmanner. To achieve this, we are planning to hold lectures on tech-development in glass composition. We plan to apply this technology

nology led by Japanese and international researchers as well as

to the development of new drugs in the Medical business.

in-house veterans, and to create a system where researchers can

By making the workplace more attractive and providing an envi-

set up themes they are interested in and study them during theirronment where researchers can devote themselves freely to theirwork hours.

research, we will enhance our research and technological develop-

Two new strategic organizations have been established under
the Research & Development Headquarters to contribute to

Confidential­information kept toeach department
50

with several universities, and have achieved results in confirming
physical properties using MI* technology, process analysis of newtions. These numbers increased significantly during the previous

glass compositions, and research on biodegradable glass.

*Materials informatics: A field of study that seeks to improve efficiency of materials development through informatics methods that utilize statistical analysis, etc.

New Mid-Term Business Plan Initiatives for the Research & Development Headquarters

thereby enhancing the corporate value of the Nittobo Group.

Raising awarenessabout intellectual
property to newresearchers

Proactive application ofdeveloped technologies

Research & Development Headquarters established
44

40
Patent applications

One barometer of R&D activities is provided by the numbers ofment capabilities to contribute to society and the environment,

Patent Applications

In the glass fiber field, we have been conducting joint researchpatent applications, papers published, and conference presenta-

The DX Strategy Office will work to reduce environmental impact

there are both interesting and difficult aspects to this kind of R&D,

Data Section

When the Research & Development Headquarters was firstestablished in 2017, there were 70 people employed there. Now,pressing environmental issues, which affect all of society, and tocommitment in view of the changing times and society.

Foundation for Value Creation

combined the R&D departments, which had been separated under

will also allocate more resources to themes that require long-term

Strategies for Value Creation

Reflecting on the Previous Mid-Term Business Plan

38
30

20

33

32

19

Increase
Encouraging researchers to apply for patents through revised
IP regulations (incentives and technology recognition)

10

24

In the previous Mid-Term Business Plan, we established a researchorganization, personnel, and research facilities. In the new Mid-structure for the future, focusing on the hardware aspects of the

Term Business Plan, we will focus on improving the software that

Research & Development Headquarters, including the

motivates our researchers to be enthusiastic in their work, and we

Nittobo Group

Application year (FY)

2016

2017

2018

2019

2020

Integrated Report 2021

25

Research & Development Headquarters

2018

2024

2026

2028

6G Specifications

2030

6G (10 x 5G capacity) Production

5G expansion stage (millimeter wave), local expansion

Smartphones

5G-Sub6 1Gbps

Base stations

5G-Sub6 BBU•RRH

5G millimeter wave 10Gbps (28GHz)

Strategies for Value Creation

5G initial stage (Sub 6) mobile expansion

Wired telecoms market

6G 100Gps

5G millimeter wave BBU•RRH

Vehicle-mounted radar

Millimeter wave radar

Quasi-millimeter wave radar

High speed, low-latency, multi-connection

1.6TbE 112Gbps×16L
Routers
Switches

800GbE 112Gbps×8L
400GbE 56Gbps×8L
100/200GbE 28Gbps×4/8L

High speed, high capacity, low latency
PCIe6.0 63Gbps×16L

Servers

PCIe5.0 32Gbps×16L
PCIe4.0 16Gbps×16L

Products Supplied/Under Development by Nittobo

High speed, high capacity(Source: Compiled by the Company based on Ministry of Internal Affairs and Communications materials)
NER   Next-generation super-low loss I (under development)

DXI  

thinner. These advances will contribute to the miniaturization andever-thinner construction of the digital devices we use.
We have been focusing on basic research in the electronic materials field, but we are also working on a wide range of research
themes in the composite materials and industrial materials fields,
as well as in applied research and process research.
Regardless of industry or research field, the new shared themes
to be addressed in the new Mid-Term Business Plan are digitaltransformation and the environment. In both cases, we have set up
specialized organizations called the DX Strategy Office and theEnvironment Technology Strategy Office.
This is the start of a Company-wide effort to adopt digital­transformation and reform the way we do business. As a materials
manufacturer, our main business is B to B, and we had thought­digital marketing was basically not relevant to us. However, when
we used digital marketing methods to examine global needs forflat fiber, one of our strategic composite materials, we received anumber of responses, including ideas for applications that we had
never imagined. This is just one of our business reforms, but the
introduction of digital technology is steadily progressing inresearch and technology development as well. The introduction ofmaterials informatics (MI) is beginning to show its effects in glass
composition research. We are also installing a large number of sensors in our melting furnaces to accumulate and analyze big data.
Since improving the efficiency of melt combustion directly leads to
CO2 reduction, we are implementing its use in this field.

Addressing the global environment is an urgent issue, and theEnvironment Technology Strategy Office, under the Sustainability
Committee chaired by the President, will work to resolve various specific issues. In addition to the reduction of CO2 emissions through theefficient combustion in melting furnaces as mentioned earlier, glass
fiber recycling within the Group is one of our priority themes.
Currently, glass wool is recycled from waste glass, such as fluorescentlamps and bottles. If glass materials created with renewable energy
can be used as raw materials, we will be able to create the ultimate
environmental-friendly energy system. In addition, we have started
research on environmental-friendly glass fiber to solve the problem
of degrading resin but non-degrading glass. Furthermore, we will
accelerate the reduction of energy consumption and the adoptionof renewable energy with bioplastic resin reinforced glass fiber;
lightweight, high-strength and high heat-resistant glass fiber; andhigh-insulating fiber, which can directly contribute to the reductionof CO2 emissions in our customers’ operations.
In this way, the Nittobo Group has established a groupwide system to contribute to reducing the environmental burden throughits business. We will pursue the infinite possibilities of glass fiberand realize customer success in parallel with the implementation ofdigital transformation and environmental initiatives, in order toincrease the social value of the Nittobo Group and contribute to
the realization of prosperous communities.

Integrated Report 2021

Data Section

Low transmission loss (in mass production)NE   Ultra-low transmission loss (in testing)
Next-generation super-low loss II (under development)
DX II

Foundation for Value Creation

Nittobo Group2022

5G mature stage, industrial application expansion

5G—6G Timeline

Wireless
telecoms
market26

We have created a technology roadmap for the electronic materials market through 2030, and are working on a development plan todetermine when materials with even lower dielectric loss will be indemand. In the Ethernet standards for wired communication
networks such as data centers, upgrades to faster 400GbE products
are in full swing, and demand for NE-glass is increasing. Since highend equipment manufacturers are trying to rewrite the market withan eye on 800GbE and 1.6TbE for the future, we are simultaneously
developing NER, the next generation of NE-glass, and DX1 and DX2,
which are even further ahead of next-generation products. We arealso studying compositions of high-strength, low thermal expansion
T-glass with an eye to the future. T-glass, which is used as a substrate
for semiconductor packages for CPUs and GPUs, is required to havehigher strength and lower thermal expansion properties as semiconductor packages grow larger. As a pioneer in this field, we arepushing to develop next-generation products.
In the electronic materials field, we have started to reform our
production processes. Now, the thickness of our glass cloth is
13μm–15μm, but we are developing glass cloth that is 10μm or

2020

6G StudyMore advanced functions in 5G devices

Electronic Materials Development Department and the Composite
and Industrial Materials Development Department to specialize inproduct and process development.
In terms of operations, a matrix R&D system has been completed
to efficiently connect basic research, applied research, and productdevelopment. The product process (marketing, product planning,
research, development and prototyping, mass production) is
coordinated among the departments responsible for customer
solutions and product planning, basic research, process researchand product development, and melting technology and production technology, and each department complements andstrengthens the other, creating a scheme that allows us to quickly
implement customer feedback. In product planning, we established a stage-gate system within the Group, which collects ideas
from potential and current customers and efficiently connects
them to product development.
In addition to clarifying the roles of basic research and appliedresearch, we have established a system to swiftly handle customer
needs by working more closely with the business divisions, and theresults are evident.

Initiatives of the New Mid-Term Business Plan
In the new Mid-Term Business Plan period, we aim to become theNo. 1 company with sensitivity in the world. Nittobo will provide
unique solutions by responding with high sensitivity to market andcustomer needs. We aim to be a highly sensitive No. 1 company,
resulting in increased corporate value of the Nittobo Groupthrough the realization of customer value and customer success.
With the research and development system established in the­previous Mid-Term Business Plan, we will further accelerate ourreactions to market needs and show results worthy of being ahighly sensitive No. 1 company.
First, in basic research, we are focusing on developing new glass
compositions. By changing the composition of the compounds thatmake up the glass fiber, specific performance can be designed.
Low-dielectric NE-glass, high-strength and low thermal expansion
T-glass are examples of glass fibers with special compositions thatenable them to meet the requirements of high-end markets. Since
there is a strong market demand for high-performance glass, andthe development of new glass compositions will give us an advantage over our competitors, so we will accelerate our research on
new compositions.

Managing Executive Officer
Vice President of Research & Development Headquarters(Head of Fiber Technology)
Head of DX Strategy Officeand Environment Technology Strategy OfficeDirector of Product Planning and Development
Headquarters of Glass Fiber Division

Implementing the 5G-6G Roadmap

Reflecting on the Previous Mid-Term Business Plan
I am in charge of both fiber research and technology development
at the Research & Development Headquarters, and product planning and development in the Glass Fiber Division. My role is tobroaden and create new opportunities for fiber technology, and toquickly understand the needs of customers and the market and linkthem to commercialization. In the previous Mid-Term Business Plan
period, we created systems for basic research, applied research, andproduct development, as well as a system for efficient operation ofthese areas to quickly handle market and customer needs.
Research departments were previously under the control of eachbusiness division, but the new structure combines them all under
the newly established Research & Development Headquarters.
Business divisions tend to focus their resources on applied researchand product development in order to respond quickly to customer
feedback. However, we cannot acquire next-generation technologies unless we devote adequate resources to basic research, whichtakes time to produce results. Therefore, after the launch of the
Research & Development Headquarters, we established theFundamental Research Department within the Fiber R&D Center toenable us to engage in long-term research. We also established the

Hideyuki Hatanaka
Nittobo’s Value Creation

Pursuing the infinite possibilities of glass fiber tocontribute to customer success as well as the environment.

27

Glass Fiber Division
Glass Fiber Yarn Business

FY2020Business
Results

Production of Special Glass for electronic materials (NE-glass yarn, T-glass yarn) and external sales of NE-glass yarn
increased, but middle grade yarn and composite materials for reinforced plastics sales declined year on year and­experienced intense price competition. In addition, an increase in personnel expenses and depreciation expenses,
due to measures to strengthen the Company’s foundation, resulted in lower profit.
Net sales (million yen)
30,000

The Glass Fiber Yarn Business manufactures and sells glass fiber yarn, as well as roving and29,172

26,442 25,017

23,124O perating (million yen)profit
6,000

6,559

5,235
3,937

20,000chopped strands used as base materials of composite materials.

3,091
3,000

Social and Environmental
Contributions

Nittobo’s Value Creation

Business Description

26,7582,368

10,000

Nittobo’s glass fiber contributes to thinner and more compact dimensions in electronic
devices such as smartphones and to lighter weight in automobiles and aircraft.

0

FY16

FY17

FY18

FY19

FY20

0

FY16

FY17

FY18

FY19

FY20

Implementing Growth Strategies

Products Manufactured

We are focusing on increasing the production capacity and expanding the applications of high value-added products such as E-glass ultra-fine yarn,

Melting furnace

T-glass, and NE-glass with special compositions by utilizing our technological strengths to meet the increasingly sophisticated needs of the market.

Strategies for Value Creation

Forming winder

Special composition

Investment Domains

Glass fibers for composite materials

T-glass (low thermal expansion)
NE-glass (low dielectric constant, low dielectric
dissipation factor)

Rovings and chopped strands are used in plastic reinforcement for a wide range of products, including casings for smartphones, tablets,
and notebook PCs, along with helmets, automotive parts, bathtubs, and other consumer products.
Thick count/thick material

Fine count/thin material

Rovings

Strength

Chopped strands

Cut fiberSuper ultrafine tofine countSuper ultra-thinclothMedium and thick cloth(commodity use)

Chopped strand mat

Foundation for Value Creation

E-glass

E-glass thick count• Flat fibers (FF) are made with an oval shape cross-section to contain the warping and twisting of molded products.

Nittobo’s Strengths

Commodity composition

Glass fiber yarns
Two important properties of glass are insulation and heat-resistance. Glass yarns processed into cloth have become indispensable as an

FOCUS ON

Started Special Glass Production in Taiwan

electrical insulating material for printed wiring boards.

Value Chain

Glass fiber yarn•G
 lass composition research•S pinning technology: ultrafine•M elting furnace design
technology•P roduction know-how

Glass fiber cloth•W eaving process• F iber opening technology• Interface treatment

Data Section

In line with increasing global data traffic and the development ofIntegrated product development fromglass fiber yarn to cloth

5G communications infrastructure, we are continuing to expand
our production capacity to ensure the timely and stable supply ofSpecial Glass. We have expanded the production of Special Glassyarn at three factories in Japan, and we started production at a
new factory in Taiwan for Special Glass yarn as part of NITTOBOASIA Glass Fiber Co., Ltd. in October 2021.
By establishing a production base for Special Glass in Taiwan, a
hub for electronic material manufacturers, we can swiftly fulfill
customer needs and reduce BCP risks.

Strengths• Manufacturing technology for the world’s most precise yarns (3.5μm)• Development and manufacturing of special composition low-dielectric and low thermal expansion Special Glass

28

Nittobo Group

Going forward, we will collaborate with Baotek Industrial
Materials Ltd., a cloth producer in Taiwan, to realize an integrated
production system spanning yarn to cloth in Taiwan.

New Special Glass factory in Taiwan

Integrated Report 2021

29

Glass Fiber Division
Glass Fiber Cloth Business

FY2020Business
Results

In the second quarter of fiscal 2019, Baotek Industrial Materials Ltd., a Taiwanese glass cloth manufacturer, became aconsolidated subsidiary, which contributed to increased net sales. Although sales increased in Special Glass cloth forelectronic materials used in high-speed, high-volume data communications and overall sales increased, profits
decreased due in part to the fire at the Fukushima No. 2 Factory in July 2020.
Net sales(million yen)O perating (million yen)
2,784
3,000
profit19,843 20,371

20,000

The Glass Fiber Cloth Business produces glass cloth used as electronic materials.

2,130

2,626

2,031

2,000

Nittobo’s Value Creation

Business Description

14,228 13,750 14,043

2,919

10,000Social and Environmental
Contributions

helping to realize high-speed, high-volume communications through 5G.

Glass cloth for printed wiring boards

Surface

Crosssection

3

Inner layer circuit

4

Insulation layer(resin-impregnated glass cloth)

5Surface layer circuit

FY20

Only

smartphones, which require high-speed processing and high reliability

Dielectric constant (1 GHz)

Dielectric dissipation factor (1 GHz)

Thermal expansion coefficient (×10-6/ºC)

Tensile elasticity (GPa)6.8

0.0035E-glass

5.6

75

NE-glass

4.8

0.0015T-glass

2.8

86Communications &infrastructure

Base stations & data
centers

Smartphones

High-end models

Equipment & parts

Substrate types

Switches, routers,
and servers

Semiconductor package substrate

CPU (AP)

Material requirements

Glass fiber models

MPU

High elasticity, low thermal
expansion

T

MemoryLow dielectric, low dielectric NE
dissipation factor

Middle-end models
E

Motherboard substrate

Low dielectric, low dielectric NE/NER
dissipation factor

E

Semiconductor package substrate

Low thermal expansion

Ultra-thin E

Ultra-thin T
Super ultra-thin T

Super ultra-thin E

Motherboard substrate

Ultra-thinUltra-thin E

Ultra-thin E

Wireless
communications

RF modules, AiP

Low dielectric dissipation­factor, ultra-thin

Super ultra-thin NE

Ultra-thin E

Copper foil

CPU

Semiconductor package substrate

Low thermal expansion

T

E

Resin
Cloth
Resin
Copper foil
Resin
Cloth
Resin
Copper foil

Copper foil

2

Insulation layer(resin-impregnated glass cloth)

Resin
Cloth
Resin

3

Inner layer circuit

Copper foil

4

Insulation layer(resin-impregnated glass cloth)

Resin
Cloth
Resin

5

Inner layer circuit

Copper foil

6

Insulation layer(resin-impregnated glass cloth)

Resin
Cloth
Resin

7

Surface layer circuit

Copper foil

MemoryBasic Requirements

High-end Requirements• L ow thermal expansion• L ow dielectric constant/low
dielectric dissipation factor

FOCUS ON

Low dielectric, low dielectric Ultra-thin NE
dissipation factor

Thin E

Motherboards

Motherboard substrate

Thin

E

E

Desktop, laptop PCs

CPU, memory

Semiconductor package substrate

Medium-thickE

E

Motherboards

Motherboard substrate

Smart watches

SiP

Module substrate

Ultra-thinUltra-thin E

Ultra-thin E

Data Section

Surface layer circuit

Mobile PC• Insulation•R einforced substratestrength• Easy processing• Chemical resistance1

E-glass

Motherboards

1Motherboard

FY19

Chip
Substrate for semiconductor package(glass cloth used)

Insulation layer(resin-impregnated glass cloth)

FY18

T-glass/High Strength, Low Thermal Expansion

MemoryMotherboard
glass cloth used)

5

2

FY17

Foundation for Value Creation

4

Surface layer circuit

FY16

information at high speeds, and in antenna in package (AiP) technology for 5G smartphones

Consumer devices

1

1

0

Used in the semiconductor package substrate of high-performance servers andDiagram of Substrate Cross-section

Substrate forsemiconductor
package

No.

FY20

Used in data centers and base station switches and routers that process large amounts ofApplications

Image of Glass Fiber Cloth Application
3

FY19

Strategies for Value Creation• High-performance binder technology

2

FY18

Types of Glass Fiber by Application•S pread-out technology to unravel strands inwoven glass cloth

1

FY17

Low-Dielectric Properties

filaments andflatten glass cloth• Technology for making ultra-thin glass cloth

FY16

0

NE-glass/Reduce Transmission Losses with

Glass cloth is widely used as material for printed wiring boards because of its superior electric insulation, heat resistance, and dimensional stability. Nittobo’s ultra-thin glass cloth provides superior thinness and fiber distribution consistency, making it ideal for compact but highly functional
electronic devices. Our Special Glass cloths are developed using unique compositions and feature low-dielectric constant and low-dielectric dissipation factor required in broadband communications, as well as low thermal expansion. These properties make our cloth a vital component of data
Before fiber-opening process
After fiber-opening process
Fiber-opening
center equipment, mobile phone base stations, high frequency compoprocesses tonents, and semiconductor packages for servers and smartphones.
spread yarn
Strengths

1,000

Nittobo’s Special Glass cloth is used as a low-dielectric substrate for electronic components,

Nittobo’s Glass Cloth used in Supercomputer “Fugaku”

Fujitsu Limited and the Institute of Physical and Chemical Research(Riken) jointly developed the Fugaku supercomputer, which uses
Nittobo’s E-glass cloth and low-dielectric glass cloth in its CPUmounted printed wiring boards. Fugaku will be utilized in various
fields such as AI (artificial intelligence) and Big Data analysis, including research on new coronaviruses. Printed wiring boards that can

Nittobo Special Glass

handle high communication speeds, large data capacity, and higher
electrical frequency signals are required to both achieve fast compu-

Progress is being made in the shift to 5G for high-speed telecommunications and in the expansion of data centers to handle ever-increasing data traffic.

tational speed and to save power. Therefore, our products, which

Nittobo’s Special Glass contributes to the speed and functionality of electronic devices required for high-speed processing of vast amounts of data. With

help to minimize any attenuation (transmission loss) and signal delay

speed increases in consumer devices like smartphones and tablets in line with the improvement of global infrastructure, such as the expansion of data

within printed wiring boards, were chosen for use.

Computer racks that make up Fugaku(Image courtesy of Riken)

A Fugaku system board(Image courtesy of Fujitsu
Limited)centers and installation of 5G base stations, we can expect increasing demand for low-dielectric NE-glass and high-strength, low thermal expansion T-glass.

30

Nittobo Group

Integrated Report 2021

31

Glass Fiber Division
Glass Fiber for Industrial Materials BusinessBusiness Description

Due to a decline caused by the COVID-19 pandemic, both sales and profits decreased in glass cloth for equipment andconstruction materials, as well as heat-insulating material in residences.

Net sales (million yen)

The Glass Fiber for Industrial Materials Business manufactures and sells glass wool as a residential heat-insulating material for industrial applications and glass fiber in the form of glass
cloth and braided glass cloth for industrial and construction materials.

18,55920,000Glass wool’s use as a heat-insulating material contributes to the creation of an energy-efficient society, while its use of recycled glass as a raw material contributes to resource saving.
Glass fiber is also helping to meet fuel efficiency and weight reduction needs in automobiles
and aircraft.

831

1,000

629

10,0000Glass wool

FY16

FY17

FY18

FY19

FY20

0

FY16

FY17

FY18

444

FY19

307
FY20

Industrial-use glass fiber

Glass wool board for interior finish

Industrial-use glass fiber (braided glass cloth)

Strategies for Value Creation

Glass wool insulationO perating (million yen)
1,872
2,000
profit22,072 21,622 21,785 21,396

Nittobo’s Value Creation

Social and Environmental
Contributions

FY2020Business
Results

Industrial-use glass fiber (broad-cut membrane)

In 1949, the Nittobo Group became the first Japanese company to manufacture glass wool. Today, we remain a pioneer in the field with an

Industrial-use glass fiber has a wide range of applications, from membranes for large-scale buildings to vibration-damping materials for automo-

extensive portfolio of proprietary technology. Glass wool is used widely as insulation material in residences and buildings, contributing to energy

biles. Leveraging the lightness and fireproof properties of glass fiber, we continue to develop new applications in the automobile and aircraft

efficiency. Moreover, we make environmentally friendly products that contribute to resource recycling, as the raw materials include discarded

industries to serve the demand for energy efficiency and lightweight materials.

bottles and glass windows.
• Proprietary precision fiber technology for high insulating effect and energy-efficient housing

Strengths• Formaldehyde-free insulation for human-friendly housing

Foundation for Value Creation

Strengths• High-strength, weather-resistant membranes using superfine glass fiber• World-class broad-cut membranes

Recycling in the Manufacturing Process

Main Product Groups and Applications

Glass wool is a CFC-free heat-insulating material that does not use a CFC alternative. It is made with environment-friendly recycled glass using advanced

Interior furnishings

technology and is a designated item under Japanese green purchasing legislation.

Application Examples

Exterior furnishings

Membranes

80% or more of the raw material
used in glass wool manufacturing is
recycled glass

Sorting andcollection

Commercial
recycling

Material offcuts generated
in manufacturing process

Back into glass
wool products

Roll-up blinds• L ight shades (illumination covers)• Surface cloths • Insect screens• Roll-up blinds

Recycling withinfactory

Use as heat-insulating
material in buildings, etc.

Into glass wool products

Automobiles and aircraft

Recycle processing

Data Section

Recycle processing
within factory

Tent films•T ent films•B ack-lit signboards

Construction
Transcosmos Stadium Nagasaki

The translucence of the material allows forContribution to energy
efficient society

Example of use asheat-insulating material

Diagram: D ate from Net-Zero
Energy House (ZEH)*
proposed by Agency
for Natural Resources
and Energy, Ministryof Economy, Tradeand Industry* ZEH promotes housing withboth a comfortable interior
environment and an annual
net energy consumption ofzero or less.

32

Nittobo Group

streamlined designs that are difficult to achieve withmolded products

Vibration-damping materials• Automobiles• Aircrafta

Coating film waterproofing• Concrete corrosion-proofing and reinforcement• External wall reinforcement• Coating film waterproofing

Other Major
Applications

Bankwest Stadium (Australia)
Pacific Fair Shopping Centre (Australia)
Suvarnabhumi Airport (Thailand)

Integrated Report 2021

33

Life Science Business

FY2020Business
Results

In the Medical business, sales were sluggish in the first half of the year due to the impact of COVID-19. In the second
half of the year, sales in Japan recovered to the same level as the previous fiscal year, but circumstances remained challenging for overseas business. In the Beverage business, the volume of contracted beverage production decreased due
in part to the adoption of stay-home lifestyles. As a result, the Life Science Business reported decreased sales and profits.
Net sales (million yen)
15,000Social and Environmental
Contributions

13,692

15,052O perating (million yen)
2,813
3,000
profit13,500

2,858

2,644

2,878
2,147

Life Science Business manufactures and supplies in vitro diagnostic reagents and antisera,
specialty chemicals products, and beverages.
The Nittobo Group promotes healthy and comfortable lifestyles for people around the world
through the supply of in vitro diagnostic reagents, specialty chemicals products, and beverages.

10,000

2,000

5,000

1,000

0

FY16

FY17

Medical (In vitro diagnostic reagents)

FY18

FY19

FY20

0

FY16

FY17

FY18

FY19

Nittobo’s Value Creation

Business Description

12,447 12,992

FY20

Specialty chemicals products

In vitro diagnostic reagents are used for tests done on samples such as blood and urine that have been

Strategies for Value Creation

taken from the body to diagnose illnesses at health checkups and visits to doctors. These reagents areused to measure the levels of certain substances in the samples and are not used directly on the humanbody. Doctors refer to the results of these tests, performed in hospitals and commercial laboratories, tohelp determine courses of treatment.

Strengths• An integrated production system from raw materials to finished products allows the Nittobo Group to stably supply avariety of high quality products

In the specialty chemicals products business, the Group engages in the development and sale of highly unique functional polymers such as poly-• The Nittobo Group has the top market share in Japan for a variety of items, such as inflammation biomarkers and an
osteoporosis biomarker, while distributing more than 100 types of diagnostic reagent kits

allylamine and the polyamine series. We research, develop, manufacture, and sell highly unique products to customers with high entry barriers ina wide range of industry sectors, such as toiletries, papermaking, metals, electronic materials, and generic drugs.

Antibodies

Rimco Corporation

Product development, production, and sales
Antisera

Reagent
development

Reagent
production

Reagent sales

Silkworms• Invested in Rimco

Frontier Institute Co., Ltd.

E. coli• F AN Co., Ltd. established (joint venture with FUJIKURA KASEI CO., LTD.)

Nittobo America Inc.
(California/Iowa/Maine)•A cquired Capricorn (U.S.)•N ew California factory construction (ongoing)

Antigen and antibody development,
antisera production know-how•A cquired Kamiya(U.S.)NITTOBO MEDICAL CO., LTD.
• New factory constructed in Koriyama City

Stable quality, proven track record in immunology,
high sensitivity

Antisera
Other companies

Kamiya*In vitro
diagnostic
reagents

Auxiliary agents formetal processing

Surface-protective agent SSG®

Water treatment agents

Auxiliary agents for
textile processing•E lectrolytic plating• Anti-fouling•W astewater treatment• Dye-fixing•A cid corrosion inhibitor• Anti-corrosion coating•M etal scavenger• Friction fastness improver•M etal processing cutting
oil additive• Solid natural wood protection•D ecoloring• Deep-coloring

Data Section• Acquired Frontier Institute

FAN Co., Ltd.

Expansion of products to hospitals and commercial laboratories inJapan and overseas

Antigens

Major Product Groups and Applications

Wholesalers and distributors

Raw materials production

Foundation for Value Creation

Value Chain of In Vitro Diagnostic Reagents

Beverages

In the beverage business, we specialize in high-variety, small lot production to meet the needs of individual brand owners through OEM production of private brands. We pursue differentiation from competitors by meticulously following recipes and rapidly switching between product types.

* Kamiya Biomedical Company, LLC

34

Nittobo Group

Integrated Report 2021

35

Textile BusinessBusiness Description

FY2020Business
Results

In the Textile Business, Nittobo manufactures and sells products closely connected to ourdaily lifestyles, including auxiliary materials for clothing, raw yarns, and more. Our adhesiveinterlining products command a large share in the high-end ladies’ apparel market, and our
Nittobo Dishcloth™ has been a consumer favorite for more than sixty years.

Sales declined significantly against the backdrop of the shift to new, stay-home lifestyles due to the
COVID-19 pandemic.

Net sales (million yen)
6,000

4,950

4,945

4,862

FY16

FY18

FY19

FY20

400

2,000

Nittobo’s Value Creation

200

2,254

In the Textile Business, we have enhanced the range of interlining products that are friendly
to the global environment. The main items contributing to reduction of environmental burden are formalin- and fluorine-free interlining and sustainably produced interlining madewith recycled polyester yarn and solution-dyed yarn.

FY17

0

3,616

4,000

Social and Environmental
ContributionsO perating (million yen)
loss

221
366

452

373

600

FY16

0

FY17

FY18

Interlinings

FY19

FY20

718

800

Nittobo Dishcloth™

Interlinings are an auxiliary material for clothing used between the outer and inner materials to retain and adjust clothing shape

Created through joint research with Kurashi-no-techo Co., Ltd., this is a long-selling product whose

Adhesive Interlinings

Strategies for Value Creation

popularity stretches back over 60 years. In 2015, it received the Good Design Long Life Design Award.

Innovative Fabric™
Strengths

Innovative materials using adhesive technology• Absorbent, smooth, and fuzz-free drying cloth• No visible lint even after wiping clear glasses

Application

Raw yarn
Application‘C·S·Y™’ (core spun yarn) is a multilayer structured yarn in two or three layers combining staple fibers and polyurethane to create innovative stretch

Outermaterial

Foundation for Value Creation

fabrics. It is used in a wide range of applications, from denim, suits, socks and other daily apparel to bandages for use in medicine and sports.

FabricSeparated
intoInterliningInnermaterial

Special processing adds new
functionality to interlinings andinner materials

Apparel sections using interlinings

Strengths• Processing and adhesive technology to produce the world’s thinnest, lightest interlinings

In the Textile Business, we have been working on measures to

The interlinings business, which accounts for the majority of sales

improve profitability with positive results. In response to shiftingin Nittobo‘s Textile Business segment, was transferred to a new sub-new lifestyles and the changing business environment caused bysidiary, Nittobo Advantex Co., Ltd., that started operation in July

the COVID-19 pandemic, we began drastic reform, recognizing that

2021. By integrating development, manufacturing and sales, Nittobo

our structure required overhaul.

Advantex seeks to expand business beyond clothing to include living

Features of Adhesive Technology

Adhesion between different materials
Adheres to awide variety ofmaterials andfirmly bonds different materials
together

Unique adhesive
technology+

Glass fiber & specialty chemicals
collaborationand industrial-materials and respond quickly to customer needs by

and selling spun yarn since our founding, we have decided to with-utilizing our unique adhesive technology. In addition to adhesivedraw from the business at the end of March 2022 due to fierce

interlinings, the subsidiary will also manufacture and sell the Nittobo

competition with overseas companies and the unlikelihood of

Dishcloth™. Nittobo Advantex aims to become the global niche No. 1

recovery in business performance.

company in the field of highly functional materials using adhesive
technology by increasing management’s maneuverability.

Dot coating

1g/m2 ofadhesive resin

In the raw yarn business, although we have been manufacturing

Data Section

By utilizing adhesive technology, we will expand into both products for living- and industrial-materials.

Nittobo GroupNew Organization after Structural Reform—Nittobo Advantex Co., Ltd.

• Development of products with deodorizing, antibacterial and other functions, along with products reducing the­environmental burden

Developing New Applications

36

FOCUS ON

Functional dots
Small amountsof resin placedto achieve highadhesivestrength=

Functional agents

Can be coated with functional agents

Dot coating onfunctional
agents. A variety
of functions canbe added at ahigh level.

Market development and enhanced
technologies to enter the fields of bothliving- and industrial- materials

Interlinings value chainDye•D ying and processing
technology

Conventional

Bunkyo Seiren Co., Ltd.

New

Bunkyo Seiren Co., Ltd.

R&D
•A
 dvanced adhesive
technology•G lass fiber collaboration
Nittobo Textile Division

Production

Sales• Dot coating technology• Evenly-spaced dot placement• Added functionality
Nittobo Itami Production Center

Nittobo Interlining Co., Ltd.

Nittobo Advantex Co., Ltd.

Integrated Report 2021

37

ESG Initiatives

Environmental Initiatives
Nittobo’s Value Creation

Nittobo’s Sustainability
Management

In all our corporate activities and business development, the Nittobo Group is committed to addressing environmental issues basedon the philosophy of preserving the irreplaceable global environment for future generations and achieving sustainable development
through the provision of environmentally friendly products and services.

Sustainability Committee
In order to strengthen our efforts to address environmental issues in the new Mid-Term Business Plan, we established theSustainability Committee chaired by the Representative and Chief Executive Officer on April 1, 2021. Focusing on the following
themes, we are formulating basic strategies and action plans to resolve issues, evaluate performance, and search for business­opportunities, while making quick decisions as needed.

Strategies for Value Creation

Initiative Themes

The Nittobo Group aims to become a good corporate
citizen and “Best Partner” of communities.
The Nittobo Group is aware of its responsibilities as a corporate citizen andaddresses CSR issues with the aim of “contributing to the realization of prosperous communities,” aReducing CO2 Emissions

Promoting Recycling and Reusing• Promote initiatives to reduce CO2
emissions through technologicalinnovation and process reform• Examination to reduce CO2 levels
by 30% by 2030 (compared to
FY2013)*• Aim for virtually zero waste glass
in FY2030• Promote establishment of processing technology for converting
recycled materials

Development of New
Environmental-Friendly Products• Product development is being­promoted by the newly established Environment Technology
Strategy Office

Foundation for Value Creation* In support of the Japanese government’s new reduction target for fiscal 2030 announced in April 2021, we are working on specific investigations with a view to reducing CO2
emissions by 30% in fiscal 2030.

principle embodied in our corporate philosophy.
As articulated in the Nittobo Declaration, which expresses shared values fundamental to being a
corporation trusted by society, the Nittobo Group aspires to be a “Best Partner” of communities, andwe attach importance to sharing satisfaction with all of our stakeholders (communities). In keepingwith these values, we will seriously address environmental and social issues as we ceaselessly strive
to improve governance in order to contribute to society by creating value through our businessactivities, and achieve enhancement of corporate value and sustained growth.

Social•S
 trengthening efforts to addressenvironmental issues•H armonious coexistence withlocal communities•D eveloping new environmentalfriendly products•S afe and pleasant working
environments•U tilizing diverse human resources,developing of human resources
who can bring about change

38

Nittobo Group

Governance•C onstant review of governancein pursuit of fair and highly
transparent management•R igorous compliance•S trengthening of risk
management

The Nittobo Group respects the diversity and human rights of all stakeholders, including those in our supply chain. By making social
contributions, we will continue to be a “Best Partner” for all stakeholders and continue “contributing to the realization of prosperous

Data Section

Environment

Social Contribution,
Active Human Resources, and Respect for
Human Rights in the Supply Chain
communities.”

Social Contribution

Active Human Resources• Supplying products and services
that help resolve energy and environmental issues• Delivering products and services
designed to advance the digitaltransformation of society• Providing products and services
that contribute to health, security
and safety• Respect for diversity and inclusion• Initiatives for human resource
development (next-generation ofleaders, global human resources,
professional human resources) andexpansion of management measures to promote human resource
development• Workstyle reform and healthmanagement

Respect for Human Rights in the
Supply Chain• Recognize the diversity of humanresources and promote respect for
the human rights of all stakeholders, including those in our
supply chain

Integrated Report 2021

39

Environment

Environmental Initiatives

The Nittobo Group is aware of the importance of global environmental problems, and we have developed a code of conduct
specifying voluntary, proactive engagement in energy conservation, effective use of resources, pollution prevention, andEnvironmental Impacts of the Nittobo GroupThe Nittobo Group consumes fuel and electric energy to manufac-

chemical substances that are discharged to the environment without

for business continuity. In accordance with this philosophy, we have established the Nittobo Environmental Charter andture a wide range of products with natural resources and chemical

being collected, and industrial waste. The Nittobo Group is striving

Company-Wide Environmental Policy and are striving for continuous improvement of the environment.

substances as raw materials. Major environmental impacts include

to reduce environmental impacts by using resources in a reasonablecarbon dioxide generated as a result of energy consumption,

way while taking the needs of the environment into consideration.

Nittobo Environmental Charter

Results for FY2020
The Nittobo Group conducts an environmental protection survey for its consolidated subsidiaries once a year.
The material balance shown in the figure below has been obtained by collecting data from Nittobo and its consolidated subsidiaries in Japan andabroad on environmental impacts.
(Data on certain items are not collected from some overseas business sites.)

Guiding Principle
In all our corporate activities and business development efforts, we, the Nittobo Group, will contribute to handing down
the irreplaceable global environment to the next generation and ensuring sustainable development by providing environmentally conscious products and services and taking the needs of the environment into consideration in our activities.

INPUT

OUTPUT

Energy input*1

CO2 emissions from business
operations (Scope 1 and 2)*3

Manufacturing
and processing

311 thousand tons

137 thousand tons
Action Guidelines

Aim at improving the environment continuously andcoexisting with the local community by striving to reduce
environmental impacts in asystematic way.

Environmentallyconscious corporate
activities

 ompliance withC
environmental policy and voluntary
management
Conform to laws and regulations in addition to otherrequirements and principles aswell as stipulate ­voluntary
environmental policy and management standards and work
toward achieving them.

Periodic audits
Conduct periodic environmental audits to verify theappropriateness of management standards and improve
environmental and safety
management to raisesuch standards.

 raining andT
education
Provide all employees withthorough environmental andsafety training and raise theirenvironmental and safety
awareness levels mainly bymaking environmental andsafety policies known to them,and strive to hand down the
global environment to posterity
Established on October 1, 1998
Revised on July 1, 2005

Company-Wide Environmental Policy

dioxide emissions by streamlining

strive to reduce their discharge tothe environment.

40

Nittobo Groupfn pem d sa ople’s
un fe
it i es

Products

Amount of PRTR substances
emitted to the environment*6

Recycled
goods amountreceived

41 thousand tons

30 tons
Amount of water
discharged

RecyclingAmount ofwithdrawal water

Amount recycled*5

10.83 million m

3

11 thousand tons

5.64 million m

23 thousand tons

3

CO2 Emissions(1,000t-CO2)

FY18

FY19

FY20

Scope1

154

148

139

Scope2

143

172

172

Scope1+2 CO2 emissions from business operations

297

320

311

Scope3*7

152

200

131

nc
lia eg
p
Com
dr
an

*7 S
 cope 3: Indirect emissions outside of Scope 1 andScope 2 (emissions of other companies related to business operations)
FY2020 Scope 3 Category Details (t-CO2)
1. Products and services purchased���������������������������������95,381
2. Capital goods���������������������������������������������������������������������31,231
5. Waste������������������������������������������������������������������������������������������547
6. Business trips����������������������������������������������������������������������������360
7. Commuting to/from work���������������������������������������������������330
9. Transport and delivery (downstream)��������������������������3,351
Scope 3 Reduction Initiatives• Improve transportation efficiency through collaboration
with suppliers and transporters• Reduce CO2 emissions through glass waste recycling

through emission control andpositive use of recycled raw
materials.

We comply with environment
related laws and regulations andregional agreements to realize
zero environmental risk.

Initiatives to Reduce CO2 Emissions

Recycling Initiatives

The Nittobo Group uses a large amount of energy and its
CO2 emissions are mostly from glass melting furnaces, a partof glass fiber manufacturing. Therefore, we have been working to reduce CO2 emissions by switching the fuel used forglass melting furnaces from heavy oil to utility gas and by
introducing oxygen combustion systems in our factories.
In light of the Japanese government’s declaration towards
carbon neutrality made in October 2020, the Nittobo Groupwill further accelerate its efforts to reduce CO2 emissions,promote the electrification of glass melting furnaces, andthoroughly pursue energy conservation and productivity
improvement through technological innovation and process
reform. In addition, we will actively promote the implementation of renewable energy sources to contribute to the­realization of a low-carbon, sustainable society.

One of the priority measures in the new Mid-Term Business Plan is strengthening our efforts to address environmental issues. Since reuse and recycling are
essential for the realization of a sustainable society, we have set our recycling
target for fiscal 2030 as achieving virtually zero waste glass volume and areworking to achieve this goal. Group companies that manufacture glass yarn
not only reuse the waste glass generated in their own manufacturing processes as raw materials, but also share the waste glass among Group companies inan effort to improve the recycling rate. Paramount Glass Manufacturing Co.,
Ltd., a glass wool manufacturer, uses recycled glass from sources such as glass
bottles as a raw material, and has also obtained wide-area certification from
the Minister of the Environment, and is working to establish a system for­recycling glass wool. The wide-area certification system is an initiative toencourage the reuse of waste materials generated in the market. Waste­materials of recyclable glass wool products, like cutting scraps, are reclaimed
and recycled by Paramount Glass Manufacturing Co., Ltd. on behalf of thecompanies that generate them, and transformed into new products.

Integrated Report 2021

Data Sectionof hazardous substances andogrin h aSecu ealt om
h lc
a
loc

Ensure appropriate management

Group

We aim to achieve zero emission

Co
n
recyc
ling stru
-o c
ri

fa
n o ociety
tio ed s
t
en

Cont
ri
huma butionk
i n
en nd a tviroenergy use.

re of
utu obalfle
th e go d th nt
n me
n

e
w
it
ul
at h lawionss

We strive to control carbon

Amount of recycledgoods received*2

Nittobo*1 E
 nergy input: Amount of energy obtained by converting
fuel used at factories and other sites for manufacturing
and electricity purchased into crude oil.
*2 A mount of recycled goods received: Amount of recycledresources received by Nittobo’s factories and other sites
from other companies as raw materials.
*3 CO2 emissions from business operations: Amount of carbon
dioxide emitted by consuming energy at factories andother sites for manufacturing.
*4 A mount of industrial waste disposed of: Portion of industrial waste generated at factories and other sites, which is
not used effectively and is simply incinerated, sent to landfill sites, or otherwise disposed of.
*5 A mount recycled: Portion of industrial waste generated atfactories and other sites, which is effectively used or recycled for reuse.
*6 A mount of PRTR substances emitted to the environment:
Amount of substances emitted to air and water by factories and other sites, which are subject to the stipulations in
the PRTR Act. (Act on Confirmation, Etc. of Release
Amounts of Specific Chemical Substances in theEnvironment and Promotion of Improvements to theManagement Thereof)

Foundation for Value Creation

Promote energy-saving,
resource-saving, recycling-­oriented, and environmentallyconscious operations in all
business domains in Japanand abroad.

Raw materials

Amount of industrial
waste disposed*4 of

Scope of Data Collection
Domestic business sites: D ata collected from April 2020 toMarch 2021
Overseas business sites: D ata collected from January to
December 2020

Strategies for Value Creation

170 thousand kiloliters
Input of main raw materials

Environmental
protection

Nittobo’s Value Creation

other environmental conservation activities for the purpose of creating and maintaining a better environment, a requirement41

C O2 emissions from ­business operations

Air pollutant emissions

3.7% reduction per unit of sales (vs FY13)

CO2 emissions

Air pollutant emissions

Development of New Environmental-Friendly Products

61.4% reduction in total amount (vs FY13)

We will reduce our environmental impact through our business by making full use of the Nittobo Group’s technological capabilities and­product knowledge.

(1,000t-CO2)(t-CO2/million yen)

500

4.10

3.92

400

349

353

3.65

3.82

3.69

3.60

315

318

312

297

300

151

143

3.95

3.74

4.5

311

154

Dust

PurposeEnvironmental Effects

Classification

1,000High strength, high heat
resistant glass fiber

Automobiles: Powertrain, structural components, interior­components, parts requiring heat resistanceand strength
Aircraft: Structural components, interior components

Weight reduction for mobility→ Reduced energy consumption→ Reduced CO2 emissions

Reduces CO2 emissions
through weight reductionof materials

Bioplastic-compatible glass fiber

Reinforces resins used in environmental-friendly components

Benefits unique to bioplastics, such as reduced use offossil fuels and reduced CO2 emissions after disposal

Bioplastic effects

172

Glass wool

Insulating materials for houses, ships, etc.

Improves heat retention through insulation→ Reduced energy consumption→ Reduced CO2 emissions

Reducing CO2 emissions
through insulation

Yarn regulation compliant
products

Roll screen materials, etc.

Complies with environmental regulations
Prevents adverse effects on the human body

Removal of harmful materials

Glass cloth for electronicmaterials

Various printed wiring boards, servers, memory,communication devices, etc.

High speed, high capacity→ Reduced energy consumption→ Reduced CO2 emissions

Reduces CO2 emissions bysupporting high speed andhigh capacity

Functional compounds

Coating agents, flocculants, etc. (a wide variety)

Anti-fouling properties, wastewater purification, etc.

Other

600

172

148

852

400

329

43

200

139

854

52

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

0

0

FY13

Industrial waste disposal and the recycling rate

Recycling rate

67.5% (FY20)

67.1

69.0

12,122
8,846

10,0009,536

11,841

11,145

67.5

60.1

13,90415,00015,08580

60

10,920

FY15

FY16

FY20

76.6% reduction in total amount (vs FY13)
Glass Fiber:
Energy Saving, CO2 Emissions Reduction

150

FY17

FY18

FY19

FY20

0

Improved strength and reduced weight

3,003
2,958
2,881 2,975 2,834 2,768
2,712 2,704

Energy saving• Power trains•A utomobile interior materials•A utomobile structuralcomponents•A ircraft interior materials•A ircraft structural components• Housing interiors•V eil screen, membranes• Communications • Memory• Servers• Various PCBs

3,000

128

120
2,000

83
65

74

60

FY14

FY19

(t)

90

20

FY13

FY18

(t)

40

5,000

0

FY17

42

32

40

1,000

30

Foundation for Value Creation

69.4

72.1

FY16

PRTR substances emitted (left axis)
PRTR substances handled (right axis)
(%)

73.8

FY15

PRTR substance emissions

(t)

73.9

FY14

30
73

PRTR substances emitted and handled

Disposal of industrial waste (left axis)
Recycling rate (right axis)

20,000

19
60

44

279

305
255
268
18
31
21
14
34
38
43
44

313

Strategies for Value Creation

(t)

95
0

Development Objectives of Products and their Effect on the Environment
Product Development

3.0

1.5

161

SOx

800

320

200
100

NOx

Nittobo’s Value Creation

CO2 emissions from business operations (left axis)
Scope 1 (left axis)
Scope 2 (left axis)
Per unit of consolidated net sales (right axis)

Introducing
New Technology• Introduction of recycled glass• Introduction of new materials

Reduction of CO2 emissions
through high strength andreduced weight

30

Glass Fiber:

0

FY13

FY14

FY15

FY16

FY17

FY18

FY19

Other Environmental Contributions

0

FY20

Contributing to renewable energy

Withdrawal water

Water pollutants and drainage

3.3% increase per unit of sales (vs FY13)

Water pollutants

Withdrawal water (left axis)
Withdrawal water by Nitto Beverage Co., Ltd. (left axis)
Per unit of consolidated net sales (right axis)(1,000,000 m3)

15.0(10,000 m3/10 billion yen)

103.7
94.9

95.2

101.0

98.5

103.5 107.0

85.0
80

8.83

8.56

7.33

7.93

8.53

8.10

8.87

8.42
40

5.0

42

2.27

2.38

2.38

2.34

2.38

2.47

2.46

FY13

FY14

FY15

FY16

FY17

FY18

FY19

Nittobo Group

COD (left axis)
BOD (left axis)
Drainage volume (right axis)

SS (left axis)(1,000,000 m3)

(t)

250

5.31

5.63

5.31

5.77

5.93

5.62

5.76

5.64

200

10.0

0

120

33.7% reduction in total amount (vs FY13)

4.5

116

114

0

113

102

100

35

31

29

28

48

45

41

38

FY13

FY14

FY15

FY16

50

2.40
FY20

150

0

6.0

94

3.0

71

77

65

19

23

22

28

35

33

35

33

FY17

FY18

FY19

FY20

1.5

0

Glass composition• L ow thermal expansion,high elasticity glass fiber• Environmental-friendly glass fiber• Low-dielectric glass fiberInterface and weaving technology• Binder and interface technology•M odified cross-section fiber production technology• Ultra-thin manufacturing• Fiber opening technology
Functional compounds• Polymers• Nanocomposites

Core Technology

Glass fiber product line•H igh strength and high heat resistantproducts• Bioplastic-compatible composite materials• Glass wool
• Yarn products• Glass cloth for electronic materials

Rechargeable battery materials

Removal of harmful
substances

Waste reduction and recycling• Waste-free glass products

Data Section

Withdrawal water•C omponents for renewable energy
power generation

Environmental benefits
from bioplastics

Insulation• Insulationmaterials

 igh performance•H
insulation materials

Other Environmental Contributions
Specialty chemicals products• Flocculants• Coating agents

Product Lines

Potential variety
Solving environmental issues• Wastewater purification• Anti-fouling properties

Environmental Contributions

Serving diverse
needs with coretechnologies

Future Development andConcepts

Integrated Report 2021

43SocialSocialHarmonious Coexistence with Communities

Safety Initiatives

Each of the Nittobo Group’s business sites seeks harmony with society and engages in various activities with the aim of growing

Nittobo Group will comply with all laws and regulations and will establish safe and pleasant working environments based on

and developing together with its host community.

the understanding that the safety and health of its employees is the foundation of its business operations.

Support for Regional Vitalization and Sports

The Nittobo Group’s business sites engage in community beautification activities. The Fukushima Factory participates in a cleanup project for the Arakawa River, a clear river that flows through Fukushima
City. In addition, the Fukushima No. 2 Factory engages in cleanup
activities at a nearby river together with local residents.

The Nittobo Group serves as an official club partner of Fukushima
United Football Club, a J.League football team that is active aroundthe country with the aim of supporting the development andregional vitalization of Fukushima through sports.

Course of Action
 stablishment ofE
a Safe Workplace
Environment
Perform a risk assessment toremove and decrease hazardous and harmful factors andinvest in necessary management resources to maintain andimprove our safe and healthy
working environment.

 romote HealthP
Maintenance
Proactively assist in the maintenance and promotion of thehealth of our employees bothmentally and physically by
establishing a pleasant workplace in which they freely andwillingly exchange opinions,and prevent harassment orexcessive workload at theworkplace.

 ompliance andCManagement ofLabor Policy
Comply with laws, regulations
and other standards regarding
safety and health and to set ourown environmental policies andmanagement standards.

I mplementation of
Periodic Inspection
Seek to examine and improvesafety and health control­systems and to enhance suchcontrol standards through theimplementation of periodic
safety and health inspections.

Nittobo’s Value Creation

Community Beautification Activities

Education/
Enlightenment
Create safe and healthy working
environments across our organization by thoroughly providing
all of our employees with safety
and health education and tounderstand safety and healthguidelines.

Strategies for Value Creation

Established on July 1, 2017

Arakawa River cleanup project inFukushima City

Volunteer river cleanup work in
the Sakura area

Examples of Safety Initiatives

Image courtesy of Fukushima United
Football Club

Response to Major Disasters
Community Contribution (NITTOBO ASIA Glass Fiber Co., Ltd.)The Fukuyama Enterprise Center (Koriyama City, Fukushima
Prefecture) is located on the high-traffic Route 288. The area in frontof the main gate is a pedestrian route for elementary and juniorhigh school students, and green pavement has been installed toensure the safety of children and students and to contribute to
the community.

NITTOBO ASIA Glass Fiber Co., Ltd. (Chiayi, Taiwan) donated andinstalled 12 signs showing the local evacuation sites and routes foruse during disasters. In September 2020, it was awarded in the
excellent category for contributing to disaster preparedness andrescue operations in Taiwan at the Disaster Preparedness andRescue Enhancement Project award ceremony hosted by the
Ministry of the Interior of the Taiwanese government.

The Nittobo Group manages risks to mitigate the potential impact

compliance and to create safe and pleasant working environments.

of disasters, accidents and other events. To ensure the safety and

BCP training and earthquake and fire response drills are also con-health of employees is the basis of business management, commit-

ducted on a regular basis.

tees at each business site conduct activities to promote legal

Foundation for Value Creation

Community Contribution (Fukushima Enterprise Center)

Basic Policy on Responding to Major Disasters
1. P
 rioritize the safety and wellbeing of employees and their families.
2. W here possible, continue to conduct critical business operations, such as supplying useful products,
technologies and services. If business operations are halted, aim to restart as soon as possible.
3. Appropriately manage the risk of business disruption and minimize the impact on business management.
4. Cooperate with local residents and surrounding local governments as a good corporate citizen.
5. Regularly update BCPs and conduct drills to verify effectiveness (annually).
BCP training drill

Green pavement in front of the main gate

Award ceremony

An evacuation sign

Fukushima Reconstruction Support

The Fukushima Factory holds children’s science classes every year
to increase interest in science and the environment among the­children who will become tomorrow’s leaders. The Fukuyama
Enterprise Center has engaged in similar initiative since fiscal 2012.
Other factories have hosted plant tours for students and other­visitors as well.

The Nittobo Group is working with Fukushima Prefecture to decontaminate soil. We have provided one company location in Fukushima
City as a temporary storage area for decontaminated soil and two
locations in Koriyama City as a loading area for decontaminated soil.

On site environmental course(Fukushima Factory)

Children’s science class(Fukuyama Enterprise Center)In continuing our business activities during the COVID-19 pandemic,

alcohol sanitizer. The COVID-19 Response Headquarters was estab-

the Nittobo Group is prioritizing the safety of employees and busi-

lished in 2020 and is led by the Representative and Chief Executive

ness partners. Employees at the Tokyo Headquarters, Osaka Branch,

Officer. This body is working to further strengthen the entire Group’s

and sales offices in urban areas have generally been working from

infection prevention system and to build safe, secure workplaces. Its

home since January 2021, with about 40% physical office atten-

initiatives include enhancing infection prevention measures anddance. All Group factories and subsidiaries are focusing on prevent-making changes in the work system, with measures adjusted ining infection by enforcing rules on wearing face masks and using

response to situational changes.

Loading area
Acrylic panels installed in the cafeteria of a domestic factory with­staggered seating arrangement

44

Nittobo Group

Data Section

Support for Education

Response to COVID-19 Infections

Temperature detectors in front of the visitor reception area

Integrated Report 2021

45

SocialActive Roles of Diverse Talent

Realize a Corporate Culture that Respects Human Rights and Encourages Employees to Play an Active RoleDiversity and Inclusion

To ensure the Nittobo Group remains the “Best Partner” for all stakeholders and continues to contribute to the creation ofprosperous communities, we believe it is important to value and harness the individuality, capabilities, and views of every
employee in the Group. In line with that thinking, the whole Nittobo Group strives to create an environment and organizanationality, disability and other individual identities.

important to create an organization accepting of diversity in which
each individual can fully demonstrate his or her capabilities. One
way of laying the foundation for such a diverse organization is torespect and promote diversity and inclusion.

Nittobo’s Value Creation

tional culture that is motivating for all employees based on respect for different people, regardless of gender, age, SOGI*,

Discussion by employees with different perspectives and personalities can lead to success in meeting diverse customer needs and delivering peace of mind and confidence. Employees are the driving force
that supports the Nittobo Group’s sustained growth, and each member of our diverse workforce is a valuable asset. Nittobo considers it* SOGI: Sexual Orientation & Gender Identity

Initiatives for Women’s Advancement

Systems to Promote Diversity
Using the Nittobo Declaration as the basic policy, management andand employee awareness surveys. Targets for improving employee
engagement are one of the outcomes to be measured by theand resolve any issues through direct dialogue with frontline sites­Mid-Term Business Plan.

Ratio of women in management positions by the end of the fiscal year

4.1%

(%)

6.0

3.2%

Strategies for Value Creation

the Human Resources Department work together to actively identify

Creating a workplace environment in which women play active roles
is an important issue for the growth of employees, regardless of gender. We are addressing this matter. The ratio of women in manager
positions in the Company is increasing every year, and stood at 4.1%
at the end of fiscal 2020. We have set a target of 10% for the future,
and are systematically training and promoting the next generationof executives.

4.0

2.0

MESSAGE0

Katsuya Hatanaka
Executive Officer,
Responsible for Human Resources Department

In recent years, various indicators of diversity such as gender, race,

clarify the unique skills you should acquire by your thirties. Whenand age have been discussed, but I believe that diversity of skills is

you are young, you can use your experiences—especially from fail-just as important for a corporation.

ures—to improve your skills, logically derive shortcuts to your goals,

period of rapid economic growth, it was beneficial to have employ-challenge yourself, make mistakes, and gain experience when

ees with homogeneous skills in order to efficiently focus resources

you’re young, and managers need to let you do so, as long as busi-

within still-growing businesses. Now, we need to further our busi-

ness isn’t affected. After 30, you can dig deeper or establish newness, despite the age of uncertainty we are living in. As goals

skills, but it’s important to have unique skills so that people can relychange, I believe that skill diversity is essential to create leaders who

on you. I would like Nittobo to be a company that allows leaders to

can break through the status quo, engage in productive discussion

emerge from among people with diverse, unique skills and movewith their peers, and lead in new directions.

our business in the right direction.

So, what does it mean to have skill diversity? I believe that to

It goes without saying that these unique skills shouldn’t be limit-

secure skill diversity, each and every employee much develop theired to one’s hobbies or interests. They must result in expertise thatown unique skills that they can show off with pride in the Company,aligns with the Nittobo Corporate Philosophy. They must be skillsin their relevant industries, and in the world. These unique skills arethat are useful to both our customers and society as a whole.

one part of an individual’s identity. I think it’s especially important to46

and avoid making the same mistakes again. That’s why you need to

Nittobo Group

FY18

FY19

FY20

Initiatives to Support Balancing Childcare and Nursing Care
It’s important to create an environment where employees can­overcome the difficulty of balancing work with childcare and nursing
care, and continue to demonstrate their abilities. We are working
on support for balancing childcare and nursing care of diverse
human resources.
Specifically, we have a childbirth leave system, childcare leave system, shorter working hours system, and nursing care leave systems.
All applicable female employees take maternity leave and childcare
leave, and about 80% of male employees use the maternity leavesystem when their spouse gives birth. In addition, for employees

working in the Tokyo metropolitan area, we offer the use of a nanny
service to counter the problem of daycare waiting lists. We have also
introduced a flexible working system for childcare, which can be
combined with the shorter working hours system.
Most recently in July 2021, we introduced a system that allows
employees to take up to two weeks as paid leave of absence after
concluding childcare leave, and a system that allows employees totake up to two separate leaves of absence. We will also encourage
male employees to take childcare leave by making the system evenmore flexible.

Employment of People with Disabilities
It is becoming increasingly important for companies to employ­people with disabilities. The Company has already met the legallyrequired employment rate of 2.3%. As part of our efforts to employ
more people with disabilities, we are striving to create safe working

environments at our plants. In 2018, we established a work
­support office at our Tokyo Headquarters, and we are promoting
stable employment under the supervision and support ofpermanent employees.

Data Section

In the era of mass production and mass sales, such as during the

FY17Foundation for Value Creation

We want to be a company where
people with diverse skills can work
hard together and emerge as leaders
who can guide the Company innew directions.

FY16Work after the age of 60
A declining working population is a major social issue in Japan,
which has a declining birthrate and aging population, and competition to secure human resources is likely to become increasingly
intense. Against that backdrop, we will enhance programs andmechanisms that encourage employees to pursue careers at Nittobo
for as long as possible. We are focusing particularly on enhancing HR

programs and benefits, and developing a working environment toenable employees to continue working with high levels of motivation after the age of 60. We will also implement initiatives to makeNittobo a company that employees will be glad they chose throughout the entirety of their careers.

Integrated Report 2021

47

Human Resource Development

Joining the Company

Self-awareness andcareer-conscious reflection

Interview at age 30

Interview for setting
individual goals (annual)Interim interview (annual)
Performance evaluationinterview (annual)One-on-one meeting (monthly)

At the age of 30, when an employee has had a full range of work experience, they are asked
to identify their career goals.
Then, they reflect on the relationship between their career goals and development plan
based on the direction they intend to pursue.

Development of the next generation of leaders

1-3 years of
training foryoung
employees

3rd year

Departmental
OJT/specialized
education

Proficient, proDepartmental fessional human
OJT/specialized
resources
educationAge 30Development plan A

Development plan B

Interview for setting individual
goals (annual)Interim interview (annual)
Performance evaluationinterview (annual)One-on-one meeting (monthly)

Human Resources monitoring
Ongoing
implementation

Age 35   Key position

Interview

Entry training

Newly
implemented

Careergoal A

Relevant employees
Generalmanagers

Section Enhancing two-way communication and humanmanagers resource development through one-on-one meetings

Careergoal B

Sectionmanagers

General Raise awareness of departmental and divisional goals,
employees while improving the transparency of evaluations byintroducing a goal management system

Measures

Work Style Reform and Health Management

Foundation for Value Creation

action learning using practical cases we need to resolve. Through thetraining, these programs develop understanding about the role ofsenior managers and improve managerial qualifications. In today’s
unprecedented business environment, developing business persons
who can overcome preconditions is an indispensable activity. We
believe it leads to an essential pillar for business strategies. Nittobo
will systematically develop the leaders who drive our businesses.

Understanding organizational needs

Technology and human resources map, defiSelf-assessment and interview at age 30
nition of necessary skills, business needs

Join Nittobo

Conventional stratified training for personnel is provided for new
graduate entrants, young employees and newly promoted key­personnel through to department and division managers. To complement this standard training, Nittobo launched its Successor
Development Programs in fiscal 2018. These programs are designed
to match the growth stage of each employee, focusing on young
employees and middle management, in order to develop future leaders. These programs consist of intensive training for business skills andOrganization

Strategies for Value Creation

Young employee training(1st to 3rd year of
employment)
Newcomer training for new
graduates

Individual
Manufacturing Meister Program

Leader development external training with othercompanies

Measures to strengthen communication

Human Resource Development Committee

Specialized skills development

T-grade employee training

Future Leaders
Development: Primary

Putting the right people in the right places

Common practical skills development

Management
pre-promotion training
Genba (production frontline)
leader training

Future leaders
successor development
programDevelopment of global talent

Newly promoted
manager training

Self-development support (correspondence courses)

Promotion of management
and leadership skills growth

Future Leaders
Development: Intermediate

Coaching

SG-grade employee
training

Development ofprofessional talent

Future Leaders
Development: Advanced(General employees)

Middle-rank
employees

Remote work management

Professional skills
development

Middle management(section manager)Young
employees

Appraiser/labor
management training

Selective education

Nittobo’s Value Creation

Managers

Training by job rank

One-on-One Meetings•T hese meetings consist of a goal evaluation system for general employees to raise awareness about the connection between their own work and the goals of the division/department, as well as improving the transparency of evaluations and enabling high-quality
communication with middle management (direct supervisors).
• Implement monthly one-on-one meetings at all levels to increase two-way communication opportunities.
• Human Resources Department monitors one-on-one meetings and supports implementation.

Management level(general manager and above)

To utilize the maximum potential of the Company’s diverse humanresources, we have been carefully implementing human resource
management tailored to each individual, including measures such ascontinuously improving both the personnel system to increase individual motivation and the training system to foster growth.
In the newly formulated long-term vision, Big VISION 2030, we
will work to cultivate the next generation of leaders, global humanresources, and professional human resources. We will actively work
to expand management measures to promote individual motivation,
self-driven learning, and career development under the theme of
fostering human resources for innovation, which is the foundation
for creating business growth and driving reform.

Human Resource Development Committee
This committee deliberates on how to match the needs of the organization with the unique
skills and future career aspirations of each individual by utilizing self-assessments and the age
30 interviews. It also considers future human resource development plans and allocations.

Promotion of work-life balance
Development of global talent
To prepare for further globalization of the Company’s business, it isessential that Nittobo develops human resources and creates a corporate culture that enables diverse human resources to fulfill theirpotential. We are enhancing mechanisms that support the voluntary
efforts of individuals to become who they want to be, such asproviding opportunities and systems for employees to engage in
online English classes, and also to travel overseas to study foreign
languages participate in internships, take MBA courses, and work at
research institutes.

Development of professional talentfacing customers and link this training to improvement of professional skills that enable these employees to further enhancecustomer satisfaction. We also provide wide-ranging support forindividual skills development, offering a program to assist employees
in obtaining public qualifications necessary for work and a distancelearning assistance program that includes e-learning.

Expansion of management measures to foster human resource growth
Training courses are important for any human resources development policy, but it is also important to encourage individuals to
be motivated to learn, to carefully consider their career aspirations,and to implement development measures that match their ideas
and expectations. Therefore, we have systematically implemented
one-on-one meetings between superiors and subordinates as animportant communication tool. In addition, we are implementing
management measures to promote growth, such as the creation of48

Nittobo Groupthe Career Development Committee, which includes supervisors,
management, and the Human Resources Department. The new committee will discuss future training measures and career development
for employees. We have also instituted interviews with employees atage 30, after they have experienced a range of work tasks, to reflect
on their careers and discuss future career development. In addition,
we are also in the process of expanding our management training for
employees who will be responsible for these activities.

departments (NICO-WORK Project). We are also revising regulations
and systems, employing robotization, utilizing workflow systems,
and shifting to paperless methods that don’t require hanko seals.
Overtime hours (monthly average)(Hours)20

Manufacturers average about 15 hours,
but Nittobo’s five-year average is just 7 hours.

15

Data Section

Before becoming managers, Nittobo employees pursue development as specialized professionals in their areas of specialization andwork to establish their core skills. We introduced the Meister
Program in fiscal 2018 at manufacturing sites and are systematicallypromoting skills transfer. For sales representatives and diagnostics
medical representatives (DMRs), who have frequent contact withcustomers, we provide solutions-based training in solving problems

Average monthly overtime per employee at Nittobo in fiscal 2020
was 5.7 hours, much lower than the manufacturing industry average. To enable employees to experience job satisfaction anddemonstrate their best performance, while simultaneously maintaining an appropriate work-life balance, we will continue to develop an
environment in which people pursue long careers. Also, in Japan,
which has a declining birthrate and aging population, it is importantto prepare a worker-friendly environment for employees with childcare or nursing care responsibilities. We are enhancing programs
that allow employees to respond flexibly to those kinds of life events,
such as an annual paid leave system and a flextime system that eliminates core hours. Also, amid the COVID-19 pandemic, we havestarted a work-from-home system on a trial basis to help prevent the
spread of infection. With work practices in general expected toundergo far-reaching changes, we are continuing to embed andimprove new work practices that achieve both a high-quality worklife balance and significant improvements in productivity, including
our recently-launched project to improve the productivity of internal

10

5

0

FY16

FY17

FY18

FY19

FY20

Health management
Health in mind and body is the cornerstone of employee job satisfaction. In cooperation with the Nittobo Health Insurance Association,
we strive to promote employee health by providing opportunities
for physical and mental refreshment, such as free-of-charge use of­ sports gym, health checkups administered by post, and support forafamily enjoyment of recreation. We have also taken out comprehensive medical expense insurance to alleviate the expense burden on
employees when injury or sickness occurs.

Integrated Report 2021

49

Governance

Messages from Nittobo’s External Directors

We need to once again return to our founding spirit and maximize the leading potential of our R&D.

The formulation of the new Mid-Term Business Plan launched in fiscal 2021 began in the

The new Mid-Term Business Plan has been formulated as the first phase of Big VISION 2030,

midst of the COVID-19 pandemic. This contrasts greatly with the period of smooth sailingwhich sets forth the vision for the Company in 2030, and to achieve the standard ofwhen I first became a director in 2015.

becoming a global niche No. 1 company. The formulation process was improved, and theAmidst the impact of COVID-19 and a worsening business environment, we started

Masamichi Ouchi
Director

content was thoroughly discussed within the Company.

­formulating this Mid-Term Business Plan, my second since taking office. While the number

The main pillars of the Mid-Term Business Plan are to improve profitability and growth at theof External Directors remains the same as the previous year, the composition has changed

existing businesses of the Glass Fiber business and the Medical business, while simultaneously

significantly and, I believe, diversity has been enhanced.

strengthening R&D functionality to create a third pillar of business for the future.

Hiroshi Kagechika

The new External Directors, who took office in the previous year, participated in active

I was actively involved in discussions related to the R&D system since I have many years of

discussions and deliberations that began during the uncertain, unpredictable situation

experience in R&D management in the manufacturing industry. Nittobo established a new­created by the COVID-19 pandemic. I think that the diversity of the Board made these

Research & Development Headquarters (NI-CoLabo) during the previous business plan,meetings very meaningful.

with the intention of making it a business center by consolidating other laboratories. Operations are now on track for this organization to

In creating this new Mid-Term Business Plan, we succeeded in finalizing the policies and measures for the future of the Textiles Business,

Director

effectively fulfill this role within the course of the new Mid-Term Business Plan. We have organized issues such as clarifying the role of the
Research & Development Headquarters, collaboration with each business division, and eliminating duplicate and decentralized organiza-

COVID-19 pandemic.

tional systems. A number of measures to establish a management system for research facilities have been incorporated into the new plan.
Specifically, we have established a dedicated department in the Research & Development Headquarters to deal with Groupwide matters toment also has considerable influence. Many experts remain unable to draw any firm conclusions as to when the COVID-19 pandemic will

support future growth (zero carbon, digital transformation strategy, and environmental response), and have prepared a system to tackle

come to an end.

issues that cannot be handled by business divisions alone. In addition, we will concentrate the entire Company’s R&D resources into the

According to one theory, COVID-19 will continue affecting both Japan and the world in waves for at least one or two more years. To
accomplish the goals of the new Mid-Term Business Plan, it will be essential to first maximize our own efforts and then take precise action.
I hope that the fog will clear as soon as possible.

Strategies for Value Creation

which had been pending for a long time. The plan also includes a recovery path for the delay in 5G-related business earnings due to the
To achieve the goals of the new Mid-Term Business Plan, the efforts of the Company are of utmost importance, but the external environ-

Nittobo’s Value Creation

Active discussion by External Directors enhances deliberations
on the Mid-Term Business Plan at Board of Directors meetings.

Fiber R&D Center and the Medical R&D Center for product development and production technology development of existing businesses.
Reducing production costs in the glass fiber business is an issue that we must continue to address in order to secure the revenue base of
our core business, and we have launched a project in collaboration with the Technology Headquarters and the Research & Development
Headquarters. In the new Mid-Term Business Plan, we have incorporated these measures into our growth scenario.
As a company with a long history of manufacturing, all of our employees need to return to our founding spirit once again in order toachieve Big VISION 2030, in line with our experience of starting and growing businesses with our unique technologies. We expect ourThrough deliberations of the Board of Directors, our key people have created a clear image of the future of the Company.

Sharing values and raising awareness of issues by holding well-­governed, intensive discussions at Board of Directors meetings.

Nittobo will celebrate the 100th anniversary of its founding on April 1, 2023. To continue

The year 2020, when I became an external director of the Company, was the final year of

our sustainable growth over the next one hundred years, we have created Big VISION 2030

the previous Mid-Term Business Plan that began in fiscal 2017. The process of formulating

along with our “New Mid-Term Business Plan (FY2021–2023).”

the new plan began shortly after I took office as a director at the end of June of that year.

Under the leadership of President Tsuji, all officers and department heads had a series ofSadayoshi Fujishige

The majority of the External Directors were newly appointed, and it was difficult for them

active discussions to communicate and clarify operating conditions and issues, and to set

to have sufficient opportunities, such as plant tours, to deepen their understanding ofgoals and the strategies for achieving them. The greatest achievement of this process is

the Company’s business due to the COVID-19 pandemic. The first thing I prioritized whenthat our key people were able to solidify a clear vision for the future of the Company withcreating the new Mid-Term Business Plan was whether governance was effective in the

Big VISION 2030 and the “New Mid-Term Business Plan (FY2021–2023).”­formulation process.

As an external director, I gave a summary presentation to all of the other officers anddepartment heads on the following topics: characteristics shared by the world’s best compa-

In this regard, the formulation of the new Mid-Term Business Plan has been the subject

Agasa Naito
Directorof intense discussions involving External Directors for about six months, including inventive

nies that are more than a century old; the three challenges companies will face in the near future (population, digital revolution, and inequal-

ways of explaining facets of the business, such as holding remote factory tours. At each meeting, opinions were freely and activelyity); analysis of the growth strategies of six other companies in our industry; and 100-year lifespans and how to spend one. Then, I proposed

expressed from a variety of perspectives, and I feel that the new Mid-Term Business Plan was well thought out and appropriately formulat-

five key ideals for the formulation of the Company’s Mid-Term Business Plan: (1) develop advanced technology and respond to highly sensi-

ed based on the opinions of the External Directors. It was also very meaningful that the executives, including the External Directors, weretive markets, and utilize a system for listening, capturing, and responding to the needs of such markets; (2) become a highly sensitive, highlyable to share their values and awareness of issues through discussions for the formulation of the new Mid-Term Business Plan.

flexible company; (3) select and focus business; (4) shift management from decentralized to integrated and implement digital transforma-

Participating in the discussions, I sought to examine the issues by utilizing my analytical skills cultivated through my legal work, as well astion; and (5) weave happiness by ­connecting people with each other, society, and nature with a high degree of sensitivity. I believe thatmy unique insights from outside the Company. Formulated in this way, the new Mid-Term Business Plan clearly outlines our long-term goal

these ideals now embody the Company’s vision.

of becoming a global niche No. 1 company that contributes to the realization of a sustainable society. The plan includes an ambitious set of

Nittobo has been meeting the needs of the world by pursuing the possibilities of materials and pushing past its competitors by developing advanced technologies. In addition to this pioneering spirit, I believe that by strengthening our formation as a company that responds
to highly sensitive markets, we will continue to grow sustainably for the next one hundred years as the global niche No. 1 company.

Data Section

Director

Foundation for Value Creation

research and development team to lead the way and achieve results by making the most of their abilities.

issues to resolve and initiatives to achieve this goal.
Though the business environment surrounding the Company is not always straightforward, I believe that we can achieve this goal byworking together with all of our employees. In particular, I look forward to working proactively to develop human resources and strengthen
the management foundation of the Company, I would like to do my part to help realize the ideal state of the Company with matters suchas supporting the advancement of women’s careers.

50

Nittobo Group

Integrated Report 2021

51

GovernanceCorporate Governance

The Nittobo Group constantly revises corporate governance with the aim of creating a fair and highly transparent management organization in order to conduct business activities with emphasis on social trust from our shareholders, investors andother stakeholders.

The Company introduced an executive officer system in June 2003
and has created a system able to maximize the effect of consolidated
management by invigorating the Board of Directors and speeding
up decision making. Since June 2008, management has been conducted by further clarifying the functions and roles of management
and business execution.
In addition, with the approval of the Ordinary General Meetingof Shareholders on June 26, 2014, Nittobo shifted to a company

with Nomination Committee, etc. By doing so, the Company further clarified the separation of supervision from execution andaims to strengthen supervisory functions, ensure highly transparent
management, execute business swiftly, and increase the flexibilityof management. Furthermore, by establishing a system thatenables it to more precisely meet the expectations of stakeholders,such as customers, shareholders, suppliers, and employees, theCompany will work to further enhance its corporate value.

As of the date of the publication of this report, the Company has
12 Executive Officers, of which one has been selected as
Representative and Chief Executive Officer. An Executive Meetinghas been established as an organ to deliberate matters related tothe execution of business delegated by the Board of Directors, andit endeavors to ensure efficient business execution by holding
meetings twice a month.
Nittobo’s Value Creation

Overview of the Corporate Governance System and Reasons for Employing the System

Execution of BusinessComposition of Board of Directors and Three Committees

Board of Directors

Nomination Committee

Remuneration Committee

Audit Committee(Chair: External Director)(Chair: External Director)(Chair: External Director)

Strategies for Value Creation

Corporate Governance System
4 External Directors(1 woman)

Board of Directors

1 Internal
Director

Board of Directors
Nomination Committee
Remuneration Committee

Reporting and coordination

Audit Committee
Representative andChief Executive Officer
Reporting

Reporting andcoordination

Reporting and coordination

Risk Management
Committee
Sustainability
Committee

Audit Office
Auditing

Data Section

Nittobo GroupElection, dismissaland supervision

Auditing corporation
Accounting auditor

Election and dismissal

Audit Committee
Secretariat

Audit Committee
The Audit Committee’s responsibilities
include auditing the state of execution ofduties of Directors and Executive Officers,
and the preparation of audit reports.
Working with accounting auditors and the
Audit Office, audits, etc., are conductedbased on audit plans approved in the Audit
Committee. It is made up of five Directors(three of whom are External Directors), andis chaired by External Director Masamichi
Ouchi. An Audit Committee Secretariat has
been established as an organization forassisting the duties of the Audit Committee.
In principle, the Audit Committee holds
meetings at least once every three months.

2 Internal
Directors

Foundation for Value Creation

Election and dismissal

Execution Functions

52

Remuneration Committee
The Remuneration Committee determines
the content of individual remuneration,etc., of Directors and Executive Officers. It is
made up of four Directors (three of whom
are External Directors), and is chaired byExternal Director Hiroshi Kagechika.
Meetings of the Remuneration Committee
are held as needed.

3 External Directors(1 woman)

General Meeting of Shareholders

As a company with Nomination Committee, etc., the Company has established a Nomination Committee, a Remuneration Committee, andNomination Committee
The Nomination Committee determines
the content of proposals to elect and dismiss directors to be submitted to theGeneral Meeting of Shareholders. It is
made up of five directors (four of whom
are External Directors), and is chaired byExternal Director Sadayoshi Fujishige.
Meetings of the Nomination Committee
are held as needed. The Nomination
Committee selects the Company’s director
candidates who are believed to be themost suitable based on factors such as
their character and insight.

1 Internal
Director

Diagram of Corporate Governance System

Nomination, Remuneration and Audit Committees
an Audit Committee. The roles of the committees and overviews of the members of the committees as of the date of the publication of thisreport are as follows.

3 External Directors(1 woman)Election, dismissaland supervision

Nomination, Remuneration and Audit Committees; election anddismissal of Executive Officers and delegation of business to them;approval of matters related to operations that have an impact on
basic management policy such as mid-term business plans andannual budgets; and approval of matters that could have a significant impact on Group management such as investments exceedinga certain amount. The term of office of directors is one year, and avote of confidence in directors is obtained in the Ordinary General
Meeting of Shareholders held annually. The Company’s Executive
Officers are determined by the Board of Directors. People suitable
for the execution of the Company’s business are elected from theperspective of enhancement of business execution and corporate
value by adopting the approach of putting the right people in theright place.

Supervision Functions

The Company’s basic policy is to constitute the Board of Directors
with directors from within the Company with capabilities andknowledge on each business and management in general, and at
least the same number of External Directors as internal directors,
who are able to express opinions beneficial for the enhancement ofgovernance from the perspectives of diverse stakeholders and society, in order to ensure a system enabling appropriate supervision of
the Company’s business execution by the Board of Directors as awhole, and has specified that the Board of Directors shall have no
more than 12 members in its Articles of Incorporation.
At the time of publication of this report, the Company’s Board of
Directors was made up of seven members including four External Directors.
The Board of Directors is responsible for supervision of businessexecution through selection of directors making up the

4 External Directors(1 woman)

3 Internal
Directors

Executive Officer

Glass Fiber Division
Glass Fiber for
Glass Fiber Yarn Glass Fiber Cloth
Industrial MateBusinessBusinessrials Business

Medical Division

Beveragebusiness

Life Science Business

Yarn and Textile
Division
Textile BusinessCorporate
Business
Planning
Department(NI-CoLabo)

Research &Development
Headquarters

Integrated Report 2021

53

Self-evaluation Concerning the Effectiveness of the Board of Directors

Key Director Expertise and Experience (Skills Matrix)

In the self-evaluation concerning the effectiveness of the Board of
Directors in fiscal 2019, the opinion was expressed that further
improvements need to be made to matters such as the enhancement of feedback from Executive Officers on matters to be resolvedby the Board of Directors; deepening of discussions on management
policies and strategies, including ESG and SDG perspectives; further
strengthening of risk management, including management ofGroup companies, as well as measures to prevent disasters and scandals; and the nature of matters to be discussed at Board of Directors

The knowledge, experience, and abilities of directors that are considered important to the Company from the perspective of corporate
management are defined as business management, technology,
research and development, sales, marketing, global business,
Business
Management

Name

Technology/R&D

finance, accounting, legal affairs, risk management, human resources,
labor relations, and human resources development. We ensure thatthe Board of Directors is composed of people with appropriate
knowledge and abundant experience in each field.

Sales/Marketing

Global Business

Finance/Accounting

Legal/Risk
Management

Nittobo’s Value Creation

meetings and the amount of time for discussion. In response tothese opinions, the following initiatives were adopted in fiscal 2020.
In a survey covering fiscal 2020, about 70% of the questionnaire
responses improved from fiscal 2019, and the results were overallvery positive. However, some responded that the following items
require improvement.
We will continue to make ongoing improvements so that theBoard of Directors can fulfill its supervisory function effectively.

Human Resources/Labor
Relations/Human
Resource Development

Yuichi Tsuji
Toyoshi Nishizaka
Yu Nozaki
Masamichi Ouchi

Items Requiring Improvement• Executive Officers provided explanations and reports prior to and at Board of Directors
meetings about the progress of major capital investment projects resolved by the Boardof Directors and the actual results of the fiscal year budget to enhance discussions.

• F urther improve risk management•C reate a system for feedback on past
Board of Directors resolutions• In formulating the Mid-Term Business Plan, the Board of Directors and the Executive
Officers on multiple occasions reviewed the previous Mid-Term Business Plan, as well as
the issues of each business division, Company-wide research and development, risk
management and similar matters. This deepened discussions on the ideal management
policies and strategies for the Group, including ESG and SDGs. Based on these discussions, the Board of Directors and Executive Officers formulated a new management
strategy Big VISION 2030, our vision for 2030, and the “New Mid-Term Business Plan
(FY2021–2023)” that incorporates environmental goals.

Sadayoshi Fujishige External Director
Hiroshi Kagechika

External Director

Agasa Naito

External Director

Strategies for Value Creation

Initiatives in Fiscal 2020

External Director(Note) The above table does not represent all knowledge, experience, etc. possessed by each person.

• Implement sustainability measures•C ontinue management succession
planning

Board of Directors Meetings

Nomination Committee
Meetings

Representative Director andChief Executive Officer

12/12

5/5

Toyoshi Nishizaka

Director

12/12

13/13

Yu Nozaki

Director

12/12

10/10

Name

Position

Yuichi Tsuji

Remuneration Committee
Meetings
Audit Committee Meetings
5/5

Masamichi Ouchi

External Director

12/12

5/5

3/3

Sadayoshi Fujishige

External Director

10/10

5/5

2/2

Hiroshi Kagechika

External Director

10/10

5/5

2/2

10/10

Agasa Naito

External Director

10/10

5/5

2/2

10/10

Foundation for Value Creation• Four External Directors with diverse knowledge and experience were appointed, andthey received explanations on agenda items, current status and business issues before
Board of Directors meetings, where they engaged in free, constructive and multifaceted
discussions and examinations.

Meeting Attendance (FY2020)

13/13

Corporate Governance Highlights
2011

Corporate Governance
System2012

2013

Company with Board of Directors

2014

2015

2016

2017

2018

2019

2020

7

6

7

4 (more3 (more4 (more2021

Company with Nomination Committee, etc. (from June 2014)
Nomination Committee (Chair: External Director)

Committees

Remuneration Committee (Chair: External Director)

Directors

76 Of which, External
Directors

1

1

Audit Committee (Chair: External Director)

82

34 (more than half)than half)than half)

Revisions to systems,
regulations

than half)

1

Of which, women
Operation of Boardof Directors

Data Section

Audit
Committee(Chair:Internal
director)—

Briefings before Board of Directors meetings
Board of Directors Evaluation of effectivenessConsultant and special advisor systems abolished
Executive Meeting regulations formulatedFirst row, from left: Hiroshi Kagechika, Masamichi Ouchi, Sadayoshi Fujishige, and Agasa Naito. Second row, from left: Toyoshi Nishizaka, Yuichi Tsuji, and Yu Nozaki.

54

Nittobo Group

Integrated Report 2021

55

Executive Remuneration<Calculation rules> (Basic remuneration)
This is determined using a basic remuneration table that is a matrix based on four levels of behavior evaluation and nine levels of
performance evaluation.
(Performance-linked remuneration)• Company performance = amount of basic remuneration for each prior fiscal year x percentage of Company performance for each positionx level of achievement of company performance for the previous fiscal year
• Individual performance = amount of basic remuneration for each prior fiscal year x percentage of individual performance for each positionx level of achievement of individual performance for the previous fiscal year
Performance-linked remuneration is determined by combining the Company performance and the individual performance calculated asshown above.

Nittobo’s Value Creation
Strategies for Value Creation

Matters pertaining to policy the determination of the amount of executive remuneration, etc., and the method of calculation thereof(a) Deciding policy(b) Outline of the policy
The Company determines policy related to the determination of
The Company’s executive remuneration (excluding External
individual remuneration of Directors and Executive Officers on
Directors) is structured by basic remuneration determined by
the basis of objective data, etc., from external consultants in thethe state of competency expected of each position (behavior
Remuneration Committee made up of a majority of External
evaluation) and the state of performance (performance evaluaDirectors and chaired by an External Director, based on the protion), and performance-linked remuneration that varies within
visions of the Companies Act related to a Company witha range of 0% to 150% according to the level of achievement
Nomination Committee, etc.
of individual performance targets based on company perforFurthermore, the policy is based on the approach of providing
mance targets from the previous fiscal year and the activities
strong motivation for officers to achieve their performance targets
and performance of the responsible divisions, and the current
with secure transparency and rationality, fostering awareness forfiscal year’s remuneration is based on a combination of these.
medium- to long-term management, and conforming with the
Performance-linked remuneration has not been applied forinterests of stakeholders including shareholders and investors,
External Directors due to the role of supervising management
and the performance targets used for calculating remunerationfrom an independent and objective perspective.
also reflect this approach.

Process of Determining Remuneration
The Remuneration Committee chaired by an External Director checks the exhibition of competencies and the level of achievement ofCompany’s performance targets and individual performance targets, and calculates and determines individual amounts based on the­aforementioned remuneration percentages and percentages of reflection in performance-linked remuneration.

The remuneration of directors and Executive Officers for fiscal 2020 was also determined by the above method. Furthermore, theRemuneration Committee believes that the content of the remuneration is in line with the above policy, as it confirms the appropriateness of
the level based on the executive compensation data provided by external consultants on a regular basis.

«Reference»

Percentage of Remuneration by Position

Targets and actual values of company performance for fiscal 2019 used in the calculation of performance-linked remuneration in fiscal 2020
Percentage composition of executive remuneration(if the achievement ratio of company and individual targets is 100%)
Performance-linked remuneration*
Basic remuneration

Company performance

Individual performance

Representative and Chief Executive Officer

67%

16.5%

16.5%

Senior Managing Executive Officer

69%

15.5%

15.5%

Other officers (excluding External Directors)

71%

14.5%

14.5%

External Directors

100%

­—

­—

[Operating profit (year on year)] Target: 8,198 million yen/Actual: 8,160 million yen[ROE (year on year)] Target: 9.1%/Actual: 6.3%
[Dividends (year on year)] Target: 40 yen per share/Actual: 45 yen per share* Individual performance targets are set using individual quantitative and qualitative targets, and calculated based on the results thereof.

 otal amount of remuneration, etc., by category of executive, total amount by category of remuneration, etc., and number ofT
officers who are recipients thereof*P erformance-linked remuneration (company performance + individual performance) is set at 50% of basic remuneration for the Representative and Chief Executive Officer, 45% of basic
remuneration for the Senior Managing Executive Officer, and 40% of basic remuneration for other officers (excluding External Directors).

Performance-linked Remuneration Indicators and Percentage Reflection in Performance-linked Remuneration

Company performance

Fixed remuneration

Performance-linked
remuneration

Retirement benefits

Number ofrecipients

Directors (excluding External Directors)

80

58

21

—

3

External Directors

75

75

—

—

ROE
(year on year)

Dividends(year on year)

6

25%

25%

25%

25%

Subtotal

155

134

21

—

9

Operating profit of responsible division(compared to budget)

Status of initiatives to address issues in mid-termbusiness plan for responsible division

40%

60%

Indicator Selection
Company performance
The selected indicators are operating profit to demonstrate earning
power and enhanced growth potential, ROE to show capital efficiency improvement, and dividends to promote further provision ofvalue to our shareholders.

56

Nittobo Group

Executive Officers

Subtotal

192

141

50

—

12

Total

347

275

71

—

21

Data Section

Individual performance

Operating profit(year on year)

Directors

Total amount by category of remuneration, etc. (million yen)

Total amount of
remuneration, etc.
(million yen)

Category

Operating profit(compared to budget)Foundation for Value Creation

Position[Operating profit (compared to budget)] Target: 10,000 million yen*/Actual: 8,160 million yen(Notes) 1
 . The above numbers include, where applicable, two Directors who retired as of the conclusion of the 159th Ordinary General Meeting of Shareholders held on June 25, 2020.
2. The amount paid to Executive Officers does not include the wages paid for employment as an Executive Officer for those who also serve as employees.
3. T he Company’s performance-linked remuneration is calculated based on the previous fiscal year’s performance, and the amount combined with fixed remuneration (basic­remuneration) is defined as remuneration for the current fiscal year, and this is paid as a regular equal wage.

Individual performanceThis indicator clarifies the performance responsibilities of each
Executive Officer (excluding External Directors) and evaluates thestatus of efforts to address issues in the operating profit and MidTerm Business Plan of their responsible business unit separately fromthe Company’s performance.

Integrated Report 2021

57

Changes in Cross-Shareholdings

Dialogue with Stakeholders
We will continue to endeavor to disclose information in a timely
and appropriate manner to enable the Nittobo Group’s customers,
shareholders and investors to accurately recognize and judge theactual state of the Nittobo Group. In order to achieve this, we comply
with laws, regulations and securities exchange rules on disclosure,and are engaged in the creation and operation of an appropriate
disclosure system.

(i)	We publish items specified for disclosure in Japanese and foreign laws, regulations and securities exchange rules in business reports, annual
securities reports and communications to shareholders, and announce them in securities exchange communication systems and press releases.

(iii) We conduct briefings for analysts and institutional investors promptly after the announcement of quarterly financial results.
(iv)	We publish an integrated report that incorporates financial and non-financial information, including CSR, in order to provide a better
understanding of the Group’s medium- to long-term value creation framework.

Adequate care is given to insider information in individual inquiries
and dialogue with the Nittobo Group, and explanations are limited
to information that has already been published and facts that are
well known.

Cross-shareholdings

value in the Nittobo Group. However, when
the Company deems that shares in its
cross-shareholding are not contributing to
the sustainability and growth of the Nittobo
Group’s corporate value, and that there isinsufficient reason to hold them, theCompany will sell those shares while paying
attention to the effect on the market, andso forth.

58

Nittobo Group

Method for Assessing Rationale for
Holding Shares
The Company reviews the holding policy for
listed shares individually at a meeting of theBoard of Directors on a periodic basis,comprehensively considering qualitative
factors such as the materiality of transactions with the trading partner, the existenceof any technological cooperation or joint
capital investment, whether there are any
joint ventures underway, and a quantitativeevaluation that compares the total return on
investment, calculated by considering dividend yield and business profit, against thecost of capital, as well as the comprehensively
considered policy on cross-shareholding.
Based on such reviews, the Company soldfour different company shares worth 8,665
million yen in fiscal 2020, and 17 different
company shares worth 12,804 million yen in
the four-year period from fiscal 2017.

Exercise of Voting Rights Associatedwith Cross-Shareholdings
The Company will appropriately exercise its
voting rights associated with cross-shareholdings after consideration of whether
such issuing company has established aneffective governance structure and ismaking appropriate decisions to improve its
corporate value over the medium to longterm, as well as whether such shareholdings
will contribute to enhancing the Group’s
corporate value.

Number of shares

0

0

2

1

Amount (million yen)

0

0

32

24

Number of shares

2

13

3

4

1,305

2,050

783

8,665

2

13

5

5

1,305

2,050

815

8,689

64

53

51

49

25,291

20,604

20,694

16,625

Amount (million yen)
Total

Number of shares
Amount (million yen)

Capitalization at end of period(including unlisted stocks)

Number of shares
Amount (million yen)Compliance System
System for Ensuring that the Execution of Duties of theGroup’s Officers and Employees is in Compliance with Laws,
Regulations and the Articles of Incorporation•T he Representative and Chief Executive Officer sets an example
and ensures that the Group’s officers and employees are aware of
the Group’s Corporate Philosophy, Nittobo Declaration whichespouses shared values in order to become a company trusted bysociety, and Nittobo Behavior Program and Code of Conduct, bothof which provide a set of action guidelines, and also endeavors tomake them known to all officers and employees in the Group.
•E xecutive Officers and employees foster a healthy corporate
culture that forms the basis for compliance by spreading andimplementing the Nittobo Declaration.
•E xecutive Officers and employees comply with laws, regulations,the articles of incorporation and internal rules, etc., based on the
Nittobo Behavior Program and Code of Conduct, and the departments responsible for compliance strive to raise awareness ofcompliance to increase their effectiveness.
• Violations of laws and regulations are prevented, quickly discovered
and appropriately addressed through a Corporate Ethics Help Line,
which is a whistleblowing program with an internal whistleblowing
contact and an external contact connecting to a law firm.
• The officer in charge of the Risk Management Department periodically reviews the state of establishment of the Nittobo Group’s
internal control system to ensure the current conditions are
consistent with the Group’s basic policy. The results of the review
are reported to the Representative and Chief Executive Officer,
who reports to the Board of Directors, which passes resolutions if
any revisions to the basic policy are required.
•T he Audit Committee reports the results of operational audits andcompliance audits, etc., to the Board of Directors as appropriate.

Other System for Ensuring Appropriate Operations by the
Nittobo Group•T he Nittobo Declaration, the Nittobo Behavior Program, the Codeof Conduct and the Corporate Ethics Help Line apply to the entire
Nittobo Group, and efforts are made to raise awareness of these.
•A uditing offices are established in major subsidiaries to ensure
appropriate operations, and the Company’s Audit Office also conducts internal audits with a view to the entire Nittobo Group.

Data Section

Policy Regarding Cross-Shareholdings
The Company holds shares of listed companies under its policy on cross-shareholding incases where it deems such shareholding tobe beneficial for building favorable trading
relationships with important trading partners of the Nittobo Group in fields including
sales, raw material procurement and finance,smoothly advancing business activities of the
Nittobo Group, and enhancing corporate

Listed stocks

FY2020Foundation for Value Creation

Opinions and concerns, etc., about the Company that are learned
through dialogue with shareholders and investors are collated by
the Corporate Communication Department, reported to the
Corporate Communication Officer and the Board of Directors ona quarterly basis, and appropriately provided as feedback to­management executives.

Unlisted stocks

FY2019Strategies for Value Creation(ii)	In principle, we publish information being disclosed on the Nittobo Group’s website, and also endeavor to provide fairer and broader disclosure.

Sold during the period

FY2018

Nittobo’s Value Creation

The Corporate Communication Officer is responsible for general­dialogue with shareholders, and the Corporate Communication
Department is the internal department responsible for providing
assistance thereto. The Company endeavors to have opportunities
for dialogue with shareholders that contribute to the sustained
growth and enhancement of medium- to long-term corporate valueof the Company centered on Executive Officers. Furthermore,
departments involved in IR activities centered on the Corporate
Communication Department work to coordinate among departments on a daily basis.

FY2017

Risk Management
The Company has established the Nittobo Group’s basic risk management policy and system in the Rules for Risk Management as acorporate group including subsidiaries. Based on the basic policy
and system, the Risk Management Committee chaired by the
Representative and Chief Executive Officer appropriately manages
various risks surrounding our business and prevents such risks fromoccurring. Furthermore, the Company is also striving to strengthen
its legal risk management system by putting in place a system thatenables it to receive various kinds of guidance as the occasion
demands, such as opinions and advice from corporate attorneys
and specialized lawyers regarding corporate management anddaily operations.

Integrated Report 2021

59

GovernanceDirectors and Officers

Directors (as of June 25, 2021)

Director

Director

Director

Masamichi Ouchi

Sadayoshi Fujishige

Hiroshi Kagechika

Agasa Naito

Career Summary

Career Summary

Reason for Appointment

Career Summary

Mar. 1969 Joined Lion Fat & Oil Co., Ltd. (currently: Lion Corporation)
Mar. 1996 Director, Executive General Manager of International Division of Lion Corporation
Mar. 2000	Executive Director, Executive General Manager of Home Products Sales
Headquarters of Lion Corporation
Mar. 2002 	Representative Director, Senior Executive Director, Responsible for Home Products
Business, Executive General Manager of Home Products Sales Headquarters ofLion Corporation
Mar. 2004 Representative Director, President and CEO of Lion Corporation
Mar. 2006 	Representative Director, President and CEO, Chairman of the Board of Directors,
Responsible for Home Products Business of Lion Corporation
Jan. 2012 	Representative Director, Chairman and CEO, Chairman of the Board of Directors ofLion Corporation
Jan. 2014 	Representative Director, Chairman, Chairman of the Board of Directors ofLion Corporation
Mar. 2016 Advisor of Lion Corporation
Jun. 2020	External Director of SATO HOLDINGS CORPORATION (current)
External Director of the Company (current)
Mar. 2021 Special Consultant of Lion Corporation (current)

Reason for Appointment

Mr. Ouchi has a wealth of experience and a high level of insight as an expert in accounting
and finance and as an outside officer of another company. From those standpoints, he has
actively expressed his opinions at meetings of the Board of Directors, providing sound advice
about business management and supervising business execution. As such, he has appropriately
fulfilled his role as an External Director, resulting in his appointment.

Career Summary

Apr. 1972 Joined NKK Corporation (currently: JFE Holdings, Inc.)
Feb. 2002 Vice President of NKK Corporation
Apr. 2003 Vice President of JFE Steel Corporation
Apr. 2005	Senior Vice President (Director of Steel Research Laboratory) of JFE Steel Corporation
Apr. 2009 President and Representative Director of JFE Techno-Research Corporation
Apr. 2015 Advisor of JFE Techno-Research Corporation
Jun. 2020 External Director of the Company (current)

Reason for Appointment

Mr. Fujishige has a wealth of experience and a high level of insight as a top manager of listedcompanies. The Company expects that he will appropriately fulfill his role as an External Director
by contributing to the decision-making of the Board of Directors and supervising business­execution from the standpoint of promoting sustainable growth and improving the Company’s
mid- and long-term corporate value, resulting in his appointment.

Director

Yuichi Tsuji

Toyoshi Nishizaka

Yu Nozaki

Career Summary

Career Summary

Reason for Appointment

Apr. 1981
Jun. 2003
Feb. 2007
Jun. 2008
Oct. 2008
Apr. 2010
Jan. 2011
May 2012
Apr. 2013
Jun. 2014

Joined the Company
General Manager of Planning & Administration Dept., Glass Fiber Division
General Manager of Human Resources Dept.
Director and General Manager of Human Resources Dept.
Operating Officer and President of Building Materials Division
Managing Operating Officer and President of Environmental Division
Managing Operating Officer and stationed at Main Branch (Fukushima)
President, Representative Director of Nittobo Allied Service Co., Ltd.
Advisor and Head of Fukuyama Enterprise Center
Director (current)

Reason for Appointment
Mr. Nishizaka served as General Manager of Human Resources Dept. and President ofEnvironmental Division and has experience in starting up overseas subsidiaries. He has ample
business experience befitting a Director of the Company, and has a broad range of knowledge
and deep insight into the Company’s business, resulting in his appointment.

Career Summary
Apr. 1983 Joined the Company
Mar. 2010 General Manager of Accounting and Finance Dept.
Jun. 2010 Director and General Manager of Accounting and Finance Dept.
Apr. 2011	Managing Director, Deputy Senior General Manager of Corporate Business Planning
Dept. and General Manager of Human Resources Dept.
Jun. 2013 President and Representative Director of Paramount Glass Manufacturing Co., Ltd.
Jun. 2015 President and Representative Director of Soyo Co., Ltd.
Oct. 2016	Executive Officer, Responsible for Human Resources Dept., Accounting and
Finance Dept. of the Company
Apr. 2017	Managing Executive Officer, Responsible for Human Resources Dept., Corporate Business
Planning Dept., Corporate Communication Dept., Accounting and Finance Dept.
Jun. 2017 Director (current)
Aug. 2019 Managing Executive Officer, Responsible for Audit Office, Risk Management Dept.

Reason for Appointment
Mr. Nozaki served as Deputy Senior General Manager of Corporate Business Planning Dept. asa Managing Director. He then served as President and Representative Director at multiple consolidated ­subsidiaries. He was a Director from 2017, and from 2018 until March 2020, he has worked asa Director concurrently serving as a Managing Executive Officer mainly in charge of headquartersfunctions. He has ample business experience befitting a Director of the Company and has a broad
range of knowledge and deep insight into the Company’s business, resulting in his appointment.

External Director
 irectors who satisfy the Company’s independence criteria and who have beenD
notified as independent officers to the Tokyo Stock ExchangeDirector not concurrently serving as an Executive Officer

Data Section

Mr. Tsuji assumed his office as Executive Officer in 2014 and was responsible for overall headquarters functions, including the Corporate Business Planning Dept. and Human Resources
Dept. Since 2016, he has presided over the entire Nittobo Group as Representative and Chief
Executive Officer. He has ample business experience befitting a Director of the Company, andhas a broad range of knowledge and deep insight into the Company’s business, resulting in
his appointment.

Ms. Naito has a wealth of experience and a high level of insight as an expert in law and as an
outside officer of other companies. The Company expects that she will appropriately fulfill herrole as an External Director by contributing to the decision-making of the Board of Directors andsupervising business execution from the standpoint of promoting sustainable growth andimproving the Company’s mid- and long-term corporate value, resulting in her appointment.

Foundation for Value Creation

Director

Oct. 2013 Joined the Company General Manager of Accounting and Finance Dept.
Apr. 2014 Operating Officer and General Manager of Accounting and Finance Dept.
Jun. 2014	Executive Officer, General Manager of Corporate Business Planning Dept.
and Responsible for Corporate Risk Management
Nov. 2014	Executive Officer, General Manager of Corporate Business Planning Dept.,
Responsible for Corporate Risk Management, Human Resources Dept.,
Information System Dept., Compliance Management Dept., Purchasing Dept.,
Osaka Branch and Nagoya Branch
Jun. 2015 Director and Executive Officer (current)
Feb. 2016 Representative Executive Officer
Jun. 2016 Representative and Chief Executive Officer (current)

Reason for Appointment

Mr. Kagechika has specialist insight and a wealth of experience in corporate business and the field of
research and development in the manufacturing sector. The Company expects that he will appropriately fulfill his role as an External Director by contributing to the decision-making of the Board of
Directors and supervising business execution from the standpoint of promoting sustainable growthand improving the Company’s mid- and long-term corporate value, resulting in his appointment.

Director Representative andChief Executive Officer

Oct. 2001 Registered as an attorney Joined Nagashima Ohno & Tsunematsu
May 2008 Registered as an attorney at New York State Bar Association
Jun. 2011 Joined TANABE & PARTNERS
Apr. 2013 Partner of TANABE & PARTNERS (current)
Jun. 2015 Outside Audit & Supervisory Board Member of BOOKOFF CORPORATION LIMITED
Oct. 2018	Outside Audit & Supervisory Board Member of BOOKOFF GROUP HOLDINGS LIMITED(current)
Jun. 2020 External Director of the Company (current)

Strategies for Value Creation

Sep. 1975 Registered as a certified public accountant
Jun. 1977 Registered as a tax accountant
Aug. 1983 Guest Researcher of Mitsubishi Research Institute, Inc.
Jun. 2007	Chairman and President of Tokyo Chapter, the Japanese Institute of Certified
Public Accountants
Jul. 2007	Deputy President of the Japanese Institute of Certified Public Accountants
Jul. 2010 Auditor of the Japanese Institute of Certified Public Accountants
Jun. 2013 External Auditor of Tsukishima Kikai Co., Ltd. (current)
Jan. 2015	Established MO Partners, Public Tax Accountant Corporation
Representative for MO Partners Public Tax Accountant Corporation
Jun. 2015 External Director of the Company (current)

Nittobo’s Value Creation

Director

Member of Nomination Committee
Member of Remuneration Committee
Member of Audit Committee

Executive Officers (as of July 1, 2021)
Name

Position

Main Responsibilities

Name

Position

Main Responsibilities

Yuichi Tsuji*

Representative andChief Executive Officer

CEO

Takanobu Matsunaga

Executive Officer

Deputy General Manager of the Glass Fiber Division and Product Planning and Development Division, and President and Representative
Director of Paramount Glass Manufacturing Co., Ltd.

Minoru Takeuchi

Managing Executive
OfficerPresident of Research & Development Headquarters and Head of SC Research & Development

Yuji Sugama

Executive Officer

Deputy General Manager of the Medical Division, Vice President of Research & Development Headquarters (Head of Medical SC
Technology), Head of the Medical SC Newtech Strategy Office, Head of the Medical R&D Center

Hiroyuki Tada

Managing Executive
Officer

Responsible for the Corporate Management Division, General Manager of the Corporate Business Planning Division and the Yarn andTextile Division, and President and Representative Director of Nittobo Advantex Co., Ltd.

Akimasa Kajita

Executive Officer

General Manager of the Glass Fiber Division Production Headquarters and Head of the Fukushima Factory

Kazuhiko Igarashi

Managing Executive
Officer

General Manager of the Glass Fiber Division and Technology Division

Hiroki Kajikawa

Executive Officer

General Manager of the Corporate Planning Headquarters

Hisanobu Hayashi

Executive Officer

Hideyuki Hatanaka

Managing Executive
Officer

Vice President of Research & Development Headquarters (Head of Fiber Technology), Head of DX Strategy Office and Environment
Technology Strategy Office, and Director of Product Planning and Development Headquarters of Glass Fiber Division

Deputy General Manager of the Glass Fiber Division Production Headquarters, Responsible for International Glass Fiber Business,
President of NITTOBO ASIA Glass Fiber Co., Ltd., and Chairman of Baotek Industrial Materials Ltd.

Katsuya Hatanaka

Executive Officer

Tatsuo Sakae

Executive Officer

General Manager of the Medical Division and Marketing Strategy Department, President and Representative Director of NITTOBOMEDICAL CO., Ltd., and Chairman and CEO of Nittobo America Inc.

Responsible for the Human Resources Dept., Corporate Business Planning Dept., General Affairs Dept., 100-year Anniversary Project,
Information Systems Dept., Risk Management Dept., Osaka Branch, Nagoya Branch and General Manager of the Corporate Business
Planning Dept.

*Also serves as Director

60

Nittobo Group

Integrated Report 2021

61

Consolidated Financial Statements Nitto Boseki Co., Ltd. and Consolidated Subsidiaries

Consolidated Balance Sheet(Millions of yen)

As of March 31, 2020

As of March 31, 2021   Notes and accounts payable—trade

6,290

6,570

  Short-term borrowings

7,562

7,252

   Current portion of long-term borrowings

5,293

5,518

426

378

Liabilities
Current liabilities

Current assets
22,87430,320   Notes and accounts receivable—trade25,16423,985   Merchandise and finished goods

7,999

8,598

  Lease obligations   Work in process

4,382

4,296

   Income taxes payable

1,103

2,528

   Raw materials and supplies

16,983

21,451   Provision for bonuses

1,107

1,080

  Other

3,495

5,237

   Total current assets

(1)

(1)

80,89993,887

Non-current assets   Property, plant and equipment   Provision for business structure improvement—710  Other

8,024

9,836

   Total current liabilities

29,80833,875  Bonds payable

10,00010,000  Long-term borrowings

14,97519,322  Lease obligations

2,058

1,690

   Provision for repairs

5,584

5,652

   Retirement benefit liability

9,887

7,976

Non-current liabilities

15,851

15,886    Machinery, equipment and vehicles, net

22,935

21,246   Land

15,512

14,983  Other

1,807

1,746

   Total non-current liabilities

44,311

46,387

74,12080,262   Leased assets, net

1,949

1,451

   Construction in progress

5,194

10,035   Other, net

1,849

1,902

    Total property, plant and equipment

63,29265,506   Share capital

19,69919,699  Intangible assets

2,705

2,595

   Capital surplus

19,037

19,037   Retained earnings

55,574

61,831   Treasury shares(2,554)(2,559)   Total shareholders’ equity

91,75798,008

3,998

2,714

   Investment securities

Total liabilities
Net assets  Shareholders’ equity

21,404

17,282233

377   Deferred tax assets

3,119

3,356

    Valuation difference on available-for-sale securities   Other

1,206

1,664

    Foreign currency translation adjustment

117

(371)

(36)

(20)

    Remeasurements of defined benefit plans(2,219)(1,220)   Total investments and other assets

25,927

22,661    Total accumulated other comprehensive income

1,897

1,123

  Non-controlling interests

5,049

5,257

   Total non-current assets

91,92590,764   Total net assets

98,704

104,389

172,824

184,652

172,824

184,652   Retirement benefit asset

Total assets

Nittobo Group   Accumulated other comprehensive income

Total liabilities and net assets

Integrated Report 2021

Data Section    Allowance for doubtful accounts

Foundation for Value Creation    Buildings and structures, net   Investments and other assets

Strategies for Value Creation   Cash and deposits   Allowance for doubtful accounts

Nittobo’s Value Creation

As of March 31, 2020

As of March 31, 2021

Assets62(Millions of yen)63

Consolidated Statement of Income

Consolidated Statement of Comprehensive Income(Millions of yen)

Net sales

85,72278,727

Cost of sales

57,62853,065Gross profit

28,09425,661

Selling, general and administrative expenses

19,933

19,697

Operating profit

8,160

5,964

Interest income

57

15

Dividend income

560

446

Share of profit of entities accounted for using equity method

29—

Rental income

8997

Foreign exchange gains—

278

Non-operating income

Other

262

343

Total non-operating income

999

1,181

Interest expenses

266

250

Foreign exchange losses

118—

Expenses related to inactive real estate for rent

332

332

For the fiscal year ended
March 31, 2020

For the fiscal year ended
March 31, 2021

5,941

8,278

Valuation difference on available-for-sale securities

441(1,264)Foreign currency translation adjustment

(358)

(446)

Remeasurements of defined benefit plans, net of tax

(326)

992

Share of other comprehensive income of entities accounted for using equity method

107—

Total other comprehensive income

(136)

(718)

5,804

7,559

5,589

7,325

215

233

ProfitOther comprehensive income

Comprehensive income

Strategies for Value Creation

For the fiscal year ended
March 31, 2021

Nittobo’s Value Creation

For the fiscal year ended
March 31, 2020

(Millions of yen)Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

Non-operating expenses

240

287

957

871

8,202

6,274

Gain on sales of non-current assets

169

3,091

Gain on sales of investment securities

233

6,590

Ordinary profit

Foundation for Value Creation

Other
Total non-operating expenses

Extraordinary income

Reversal of provision for repairs—

808

Insurance claim income

883

2,671

Subsidy income

993

826

—

19

2,280

14,008264

165

Impairment loss

92

1,838

Loss on sales of investments in capital of subsidiaries and associates

351

—

Other
Total extraordinary income
Extraordinary losses
Loss on disposal of non-current assets

—

3,946

1,083

2,235

Loss on tax purpose reduction entry of non-current assets

943

825

Other

155

56

Loss on disaster

Total extraordinary losses

2,890

9,069

Profit before income taxes

7,592

11,213

Income taxes—current

1,805

3,023

Income taxes—deferred

(153)

(88)

Total income taxes

1,651

2,935

Profit

5,941

8,278

Profit attributable to non-controlling interests
Profit attributable to owners of parent

64

Nittobo Group

170

178

5,771

8,100

Data Section

Provision for business structure improvement

Integrated Report 2021

65

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

For the fiscal year ended March 31, 2020

(Millions of yen)
Shareholders’ equity

Share
capitalCapitalsurplusRetainedearnings

Treasuryshares

19,69919,03751,440(2,544) Cumulative effects of changes
in accounting policies
Restated balance(85)
19,69919,03751,355

Valuation
Total ­difference onshareholders’ available-forequity sale securities

87,633

3,542

Foreign­currency­translation
adjustment

Remeasure­ments
of defined­benefit plans

Total­accumulated
other­comprehensive
incomeNon-­controllinginterests

Total net
assets429(1,892)

2,079

1,027

90,740(85)(2,544)87,548

(85)
3,542

429

(1,892)

2,079

1,027

90,655

Changes during period
Dividends of surplus(1,552) Profit attributable to ownersof parent(1,552)

5,771
(10)

5,771

5,771

(10)

(10)

 Net changes in items other thanshareholders’ equity
Total changes during period
Balance at end of period

For the fiscal year ended
March 31, 2021

Profit before income taxes

7,592

11,213

Depreciation

5,388

6,332

Cash flows from operating activities

Impairment loss

92

1,838

Increase (decrease) in retirement benefit liability

(442)

(492)

Increase (decrease) in provision for repairs

570

68

Interest and dividend income

(618)

(462)

Interest expenses

266

250

Loss (gain) on sales and valuation of investment securities(185)(6,533)

Loss (gain) on sales of investments in capital of subsidiaries and associates

351—

Loss (gain) on sales and retirement of non-current assets

94(2,923)(2,671)

456

(311)

(326)

(181)

4,021

3,839

Insurance claim income

(883)

—

—

4,218

(10)

4,208

456

(311)

(326)

(181)

4,021

8,048

Subsidy income

(993)

(826)

19,69919,03755,574(2,554)91,757

3,998

117(2,219)

1,897

5,049

98,704

Business restructuring expenses

—

3,946

Decrease (increase) in trade receivables

498

1,173

Decrease (increase) in inventories

566(5,258)

Increase (decrease) in trade payables
For the fiscal year ended March 31, 2021

(Millions of yen)
Shareholders’ equity

Share
capitalCapitalsurplusRetainedearnings

Treasuryshares

19,69919,03755,574(2,554) Cumulative effects of changes
in accounting policies
Restated balance

Valuation
Total ­difference onshareholders’ available-forequity sale securities

91,7573,998

Foreign­currency­translation
adjustment

Remeasure­ments
of defined­benefit plans

Total­accumulated
other­comprehensive
incomeNon-­controllinginterests

Total net
assets117(2,219)

1,897

5,049

98,704—
19,69919,03755,574(2,554)91,757

—
3,998

117

(2,219)

1,897

5,049

98,704 Dividends of surplus(1,842) Profit attributable to ownersof parent(1,842)

8,100 Purchase of treasury shares(5)(1,842)

8,100

8,100

(5)

(5)

 Net changes in items other thanshareholders’ equity
Total changes during period(966)

Subtotal

10,444

4,982

Interest and dividends received

618

462

Interest paid

(258)

(246)

Proceeds from insurance income

883

2,671

Subsidies received

—

1,631

Income taxes paid

(1,073)(1,686)

Net cash provided by (used in) operating activities

10,614

7,815

Cash flows from investing activities
Purchase of non-current assets

Changes during period(1,284)

(489)

998

(774)

208

(566)

—

—

6,257

(5)

6,251

(1,284)

(489)

998

(774)

208

5,684

19,69919,037

61,831(2,559)98,008

2,714

(371)

(1,220)

1,123

5,257

104,389(17,176)(13,840)

Proceeds from sales of non-current assets

534

3,276

Purchase of investment securities

(51)

(1)

Proceeds from sales of investment securities

835

8,806

(1,258)—Purchase of shares of subsidiaries resulting in change in scope of consolidation Payments for sales of investments in capital of subsidiaries and associates resulting inchange in scope of consolidation
Other, net
Net cash provided by (used in) investing activities

(247)

—

447

(108)

(16,917)(1,867)

Data Section

Balance at end of period

294

820

Foundation for Value Creation

Balance at beginning of period

Accumulated other comprehensive income(2,673)

Other, net

Strategies for Value Creation Purchase of treasury shares(1,552)For the fiscal year ended
March 31, 2020

Nittobo’s Value Creation

Balance at beginning of period(Millions of yen)

Accumulated other comprehensive income

Cash flows from financing activities
Net increase (decrease) in short-term borrowings

(541)

(373)

11,462

11,274

Repayments of long-term borrowings(6,180)(6,702)

Proceeds from issuance of bonds

10,000—

Dividends paid

(1,552)(1,842)

Proceeds from long-term borrowings

Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

71

(342)

6,398

7,468

Cash and cash equivalents at beginning of period

16,145

22,695

Cash and cash equivalents at end of period

Nittobo Group

(492)
1,862

Net increase (decrease) in cash and cash equivalents
Increase (decrease) in cash and cash equivalents resulting from change inscope of consolidation

66

(559)
12,628152—

22,69530,163Integrated Report 2021

67

Company Profile

Dates of establishment

February 1898 Koriyama Kenshi Boseki Co., Ltd. (Koriyama)
April
1918 Fukushima Seiren Seishi Co., Ltd. (Fukushima)
April
1923 Nitto Boseki Co., Ltd.

Head Office:

Aza Higashi 1, Gonome, Fukushima-shi, Fukushima,
960-8161, Japan

Headquarters:

Stock Information (as of March 31, 2021)

Employees:

2,769 (Consolidated), 860 (Parent company)(as of March 31, 2021)

Stock Status

Business operations•M anufacture, processing, and sale of textile products•M anufacture, processing, and sale of glass fiber products•M anufacture, processing, and sale of chemical products
and pharmaceutical products•M anufacture and sale of soft drinks•P lanning, supervision, and contracting for construction•D esign, manufacture, and sale of machinery andequipment, etc.

Authorized number of shares

120,000,000 shares

Number of shares issued

39,935,512 shares (including 1,137,268 treasury shares)

Number of shareholders

8,196

2-4-1, Kojimachi, Chiyoda-ku, Tokyo, 102-8489, Japan19.6 billion yen

Representative andChief Executive Officer:

Yuichi Tsuji

Nittobo’s Value Creation

Paid-in capital:

Distribution of Shareholders

Treasury shares
2.85%

Business Locations

Individuals and others
8.37%
Administration Division Telephone: +81-3-4582-5111
Textile Division Telephone: +81-3-4582-5160
Glass Fiber Division Telephone: +81-3-4582-5170
Medical Division Telephone: +81-3-4582-5450
Beverage Business Department Telephone: +81-3-4582-5480

2-4-1, Kojimachi, Chiyoda-ku, Tokyo, 102-8489, Japan

Osaka Branch4-3-10, Kouraibashi, Chuo-ku, Osaka-shi, Osaka, 541-0043, Japan(Nissei Fushimicho Building New Building)

Telephone: +81-6-6208-5015

Nagoya Branch2-14-21, Nishiki, Naka-ku, Nagoya-shi, Aichi, 460-0003, Japan(Maruyama Nissei Building)

Telephone: +81-52-231-5131

Fukushima Factory

1, Aza Higashi, Gonome, Fukushima-shi, Fukushima, 960-8581, Japan

Financial institutions
42.41%

Foreign shareholders
18.14%

Telephone: +81-24-546-3131
Fiber R&D Center Telephone: +81-24-546-3138

Fukushima No.2 Factory

20, Ipponsugi, Sakurashimo, Fukushima-shi, Fukushima, 960-2154, Japan

Fukuyama Enterprise Center , Aza Shiojima, Fukuhara, Fukuyama-cho, Koriyama-shi, Fukushima,
1963-8061, Japan

Telephone: +81-24-593-1231

Tomari Enterprise Center

500, Hirayanagi, Asahi-machi, Shimoniikawa-gun, Toyama,939-0744, Japan

Telephone: +81-765-82-1133

Niigata Enterprise Center

6-50, Toshincho, Higashi-ku, Niigata-shi, Niigata, 950-0065, Japan

Telephone: +81-25-273-7191

Itami Enterprise Center

1-6-1, Kuwazu, Itami-shi, Hyogo, 664-8501, Japan

Telephone: +81-72-782-2621

Satellite Laboratory

 uite #3108, 3rd floor, Innovation Center of NanoMedicine 3-25-14, Tonomachi,
S
Kawasaki-ku, Kawasaki-shi, Kanagawa, 210-0821, Japan Ni-Tech(Medical SC Newtech Strategy Office)Telephone: +81-44-266-8322

Telephone: +81-24-932-6011
Research & Development Headquarters Telephone: +81-24-932-6110
Medical R&D Center Telephone: +81-24-932-6261

As of September 30, 2021

Other domestic corporations
27.43%

Securities companies
0.80%

Major ShareholdersGlass Fiber Yarn

Number of shares held
(in thousands)

Percentage of shares held*(%)

The Master Trust Bank of Japan, Ltd. (Trust account)

3,176

8.19

Custody Bank of Japan, Ltd. (Trust account)

2,956

7.62

Sumitomo Realty & Development Co., Ltd.

2,383

6.14

Nippon Life Insurance Company

1,614

4.16

The Dai-ichi Life Insurance Company, Limited

1,316

3.39

UNIZO Holdings Company, Limited

1,113

2.87

Sumitomo Life Insurance Company

1,082

2.79

AIR WATER INC.

997

2.57

Central Glass Co., Ltd

948

2.44

The Toho Bank, Ltd.

905

2.33

Nitto Glass Fiber Manufacturing Co., Ltd.

Koriyama-shi, Fukushima

Production and sale of glass fiber products

Name

Fuji Fiber Glass Co., Ltd.

Moka-shi, Tochigi

Production and sale of glass fiber Products

NITTOBO ASIA Glass Fiber Co., Ltd.

Chiayi County, Taiwan

Production and sale of glass fiber products

Glass Fiber Cloth
Soyo Co., Ltd.

Chiyoda-ku, Tokyo

Sale of glass fiber products, etc.

Shinwa Denzai Co., Ltd.

Chiyoda-ku, Tokyo

Sale of glass fiber products, etc.

Baotek Industrial Materials Ltd.

Taoyuan, Taiwan

Production and sale of glass fiber products

Nittobo Taiwan Co., Ltd.

Taoyuan, Taiwan

Sale of glass fiber products

Glass Fiber for Industrial Materials
Nitto Glasstex Co., Ltd.

Oizumi-machi, Oura-gun, Gunma

Production and sale of glass fiber products

Paramount Glass Manufacturing Co., Ltd.

 ukagawa-shi, Fukushima;
S
Ebetsu-shi, Hokkaido; Suzuka-shi, Mie

Production and sale of glass wool products

Nittobo FRP Laboratory Co., Ltd.

Koriyama-shi, Fukushima

Production and sale of glass fiber products, etc.

Nittobo Macau Glass Weaving Co., Ltd.

Macau

Production and sale of glass fiber products

NITTOBO MEDICAL CO., LTD.

Chiyoda-ku, Tokyo roduction and sale of in vitro diagnostic reagents andP
specialty chemicals

Frontier Institute Co., Ltd.

Ishikari-shi, Hokkaido

 evelopment, manufacturing and sale of bioassay kits andD
consignment of antibody production* The percentage of shares held excludes treasury shares.

Nitto Beverage Co., Ltd.

Asahi-machi, Shimoniikawa-gun Toyama

Production and sale of soft drinks

Nittobo America Inc.

California, Iowa and Maine, U.S.A.

Production and sale of antisera used for in vitro diagnostic reagents

Kamiya Biomedical Company, LLC

Washington, U.S.A.

Production and sale of in vitro diagnostic reagents

TextilesNittobo Advantex Co., Ltd.

Itami-shi, Hyogo

Production and sale of interling in and adhesive materials

Nittobo Interlining Co., Ltd.

Chiyoda-ku, Tokyo

Sale of interlining

Bunkyo Seiren Co., Ltd.

Fukui-shi, Fukui

Processing of textile products

Nittobo Niigata Co., Ltd.

Niigata-shi, Niigata

Production and sale of core spun yarns, etc.

Nittobo Allied Service Co., Ltd.

Fukushima-shi, Fukushima

Various contracted services and insurance agency

Nittobo Ecology Co., Ltd.

Chiyoda-ku, Tokyo

Various contracted services

Nittobo Techno Co., Ltd.

Koriyama-shi, Fukushima

 esign, manufacture, and sale of mechanical facilities; design and construction ofD
civil engineering work and buildings

OthersFiscal Year

Data Section

Stock-related Administration

Life Science

Nittobo Group

Foundation for Value Creation

Consolidated Subsidiaries

68

Strategies for Value Creation

Tokyo Headquarters

April 1 to March 31

Ordinary General Meeting of Shareholders

Late June

Record Date

Voting rights for Ordinary General Meeting of Shareholders March 31
Year-end Dividend March 31
Interim Dividend September 30
Other record dates are established as necessary with prior public notice.

Method of Public Notice

Public notices are available on the Company’s website below:
https://www.nittobo.co.jp/ (Japanese only)
However, if an electronic public notice cannot be posted due to an accident or other unavoidable reason, the public notice will be printed in
the Nihon Keizai Shimbun.

Stock ListingFirst Section of the Tokyo Stock Exchange (Securities code: 3110)

Shareholder Registry Administrator andSpecial Account Administrator

Mizuho Trust & Banking Co., Ltd.
1-2-1, Yaesu, Chuo-ku, Tokyo, 103-8670, Japan (1-3-3 Marunouchi, Chiyoda-ku, Tokyo, as of November 22, 2021)

Integrated Report 2021

69