TOYOBOREPORT
2019
Year Ended Mar ch 3 1 , 2 0 1 9

TOYOBOREPORT 2019
Reporting Period:
This report covers Fiscal 2019,from April 1, 2018 to March 31, 2019.

Contents
Fiscal 2019 Business Overview
Financial & Non-Financial Highlights

3

Overview by Business and Region

5

Key Events in Fiscal 2019

7

Value Creation Strategy
History of Value Creation

9

Approach to Value Creation

11

Corporate Philosophy

13

Message from the President

15

Message from the Representative Director
and Corporate Senior Executive Officer

21

Message from the Controlling Supervisor of
the R&D and Intellectual Property Departments

23

Value Creation
Films & Coatings

25

Mobility

29

Healthcare & Wellness

33

Environment

37

The Basis of Value Creation
The Basis of Value Creation

41

Environmental Policy & Activities

42

Social Policy & Activities

45

Governance Policy & Activities

51

Investor Information

59

Corporate Data

60

Disclaimer
This report contains statements related to the
future performance of the TOYOBO Group.
The reader should bear in mind that thesestatements are not guarantees of future
performance, as they assume various risks anduncertainties. Furthermore, the purpose of thisreport is to provide information, and while suchinformation could be referred to when making
investment decisions, the report is not intended
to encourage investment in the Company.

01

TOYOBO REPORT 2019

Jun-Ri-Soku-Yu
We will keep reforming, in order to realize a sustainable
society and achieve long-term growth.
Ever since our founding in 1882, we have cherished
our philosophy of Jun-Ri-Soku-Yu—do the right thing,in a rational manner, to realize prosperity for society, while also
growing ourselves—and we will continue to create products
and services that meet the needs of the time,through a never-ending process of innovation.

TOYOBO REPORT 201902

Financial & Non-Financial Highlights

Net Sales

EBITDA(¥ billion)(¥ billion)

318.8

2010

340.6

349.5

339.0

351.6

351.3

347.8

2011

2012

2013

2014

2015

2016

329.5

331.1

336.7

2017

2018

2019

35.5

In fiscal 2019, sales increased by 1.7% year on year due to significant growth in sales of COSMOSHINE SRF™
polarizer protective film for liquid crystal displays and mold releasing film for MLCC.

Operating profit

Operating profit margin(%)

21.0

20.9
18.3

23.3

23.9

20.6

17.1

7.1

6.6

11.5

2017

2018

Interest-bearing debt

1.12

21.7

37.5

2019

(FY)

1.05

D/E ratio

1.01

0.93
0.81

6.5

5.9

5.0

5.2

2016

7.2

6.0

6.1

39.6

In fiscal 2019, operating profit fell by 9.2% and there
was a 1.0% increase in depreciation and amortization,
leading to a 5.2% fall in EBITDA.

(¥ billion)

23.1

38.3

Interest-Bearing Debt and
D/E Ratio

Operating Profit and Operating Profit Margin(¥ billion)

2015

(FY)

37.6

177.1 165.4 169.2
145.6 164.8

3.6

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2015

(FY)

2016

2017

2018

2019

(FY)

In fiscal 2019, there were strong sales of industrial films. However, products including packaging films,
engineering plastics and airbag fabrics were significantly impacted by fluctuation in raw material and fuelprices. The effect of higher logistics costs was also felt. As a result, profits fell by 9.2% year on year.

In fiscal 2019, interest-bearing debt increased by¥19.2 billion year on year. Meanwhile, shareholders’equity decreased by ¥4.0 billion, leading to a 0.12
points deterioration in the D/E ratio. However, theratio remains under 1.0 times.

Profit (Loss) Attributable to Owners of Parent

ROA and ROE(¥ billion)

(%)

ROA

7.5

13.0
10.1
7.6
4.2

8.2

8.1

ROE

6.4

9.4

5.4

4.6

5.8
4.7

5.2

5.2

5.4

2016

2017

2018

4.4

2.1
–0.6
2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

(FY)

In fiscal 2019, there was a net loss of ¥0.6 billion. A fire that broke out in September 2018 damaged
facilities including those for airbag yarn production, and an extraordinary loss of ¥13.8 billion was booked
due to factors including the cost of procuring substitute yarn.

03

TOYOBO REPORT 2019

2015

2019

(FY)

In fiscal 2019, ROA (return on assets) decreased by
0.7 points year on year. ROE (return on equity) was
negative due to the net loss recorded for the year.

Fiscal 2019
Business Overview

Total Assets andShareholders’ Equity(¥ billion)

Total assets

Value Creation
Strategy

CO2 Emissions
Total emissions

Shareholders’ equity

Emissions per unit sold(thousand tonnes)

Japan
Overseas
Reduction rate vs. FY2014 (%)

131

2016

2017

2018

2019

1

0
(FY)

13

0.31 0.30 0.29

60

63

19

1,0971,056

Emissions per unit soldReduction rate vs. FY2014 (%)

0.35 0.35

2283465.8 444.6 450.8 445.5 461.0

158.0 156.9 167.8 180.6 176.6(thousand tonnes)

27

133 1632015

The Basis of
Value Creation

Value Creation

24

0.27

14

12

17

909 902 835

942

1

0

2014 2015 2016 2017 2018 20192014 2015 2016 2017 2018 2019

(FY)

(FY)

Total assets in fiscal 2019 increased by ¥15.6 billion due toincreases in inventory assets and fixed assets. Shareholders’equity decreased by ¥4.0 billion, as despite an increase in thevaluation difference on available-for-sale securities, there wasa ¥4.3 billion decrease in retained earnings.
Since fiscal 2018, the Group has applied the “Partial
Amendments to Standard for Tax Effect Accounting” (ASBJ
Statement No. 28, February 16, 2018) and relevant Guidances.

Taking fiscal 2014 as the base year, we aim to achieve a 17% reduction in both the total emissions volume andemissions per unit sold by 2030. Through measures such as upgrading to equipment with high energy efficiency
and installing gas cogeneration facilities, we have made reductions in emissions and achieved our targets. In fiscal
2019, we achieved a 27% reduction in the total emissions volume and a 24% reduction in emissions per unit sold(total CO2 emissions divided by net sales). P.42

R&D Expenses

PRTR Substances Emissions

Industrial Waste Landfill Rate

(tonnes)(%)(¥ billion)

10.8

11.3

11.1

10.4

TOYOBOGroup companies

TOYOBOGroup
companies

11.0

TOYOBO
Group

2.70
138

2.25
99

108
2015

2016

2017

2018

2019

(FY)

2015

62

66

2016

2017

1.86

99

95

2.15

2.41

59
74

0.74

2019

0.64

0.68

0.31

56

2018

0.64

0.35
(FY)

2015

0.65

0.31

0.25

0.30

2016

2017

2018

2019 (FY)In fiscal 2019, TOYOBO Group emissions fell by 34%
year on year. We continue implementing activities tocut emissions, including improving our manufacturing
facilities/equipment and installing equipment thateliminates the applicable substances. P.43

In fiscal 2019, the landfill rate at Group companies
worsened by 0.29 points, but improved by 0.06 points
at TOYOBO, resulting in a 0.03-point improvement for
the TOYOBO Group overall. P.44

Capital Expenditure andDepreciation and Amortization

Environmental Protection costs

Number of Directors(¥ billion)(¥ billion)(directors)

In fiscal 2019, we continued to invest strategically inresearch and development, leading to a ¥0.6 billion
year-on-year increase in R&D expenses.

Capital expenditure

Depreciation andamortization

Investment

Maintenance costs

3.71
10
2.50

17.5

17.3

18.4

21.3

14.4

14.9

15.7

15.8

2015

2016

2017

2018

2019

10
9

2

2

2

2015

2016

2017

9

2.34

1.87
0.91

14.9

Of which outside
directors

9

2.86
25.5

Number of
directors(FY)

In fiscal 2019, capital expenditure increased by¥4.3 billion year on year due to factors including
investment projects in the film business, while
depreciation and amortization rose by ¥0.2 billion.

2015

0.72

2016

1.08
0.62
2017

0.70

2018

2019

(FY)

This comprises capital investment for the purpose ofenvironmental protection and the cost of maintaining
facilities. In fiscal 2018, odor suppression measures
were implemented to tackle pollution, leading to anincrease in maintenance expenses. P.44

3

2018

4

2019 (FY)

We increased the number of outside directors in orderto improve diversity and strengthen the supervisory
function. The first female director was appointed at
the General Shareholders’ Meeting in June 2019.
P.53

TOYOBO REPORT 201904

Overview by Business and Region

Overview by Business
Real estate andother businesses

Real estate andother businesses

4.4%

Textiles and trading

19.2%

Healthcare

10.3%

Net Sales

336.7(¥ billion)

Films andfunctional polymers

46.4%

Industrial materials

9.1 %Textiles and trading

3.7 %Operating Profit

Healthcare

Films andfunctional polymers

21.7

21.0%

55.7%

(¥ billion)

Industrial materials

19.8%

10.6%

Overview of Fiscal 2019

Operating Profit (¥ billion) /Operating Profit Margin (%)

Net Sales (¥ billion)

Films and Functional Polymers
Both the films and functional polymers
businesses were affected by fluctuation inraw materials prices, but both sales andoperating profit rose due to a strong
performance in industrial films.

138.6

148.7

2017

2018

9.2

9.2

8.8

12.7

13.7

13.7

2017

2018

2019

6.5

6.7

3.9

4.3

2017

2018

2019

14.4

14.5

14.9

5.2

5.2

5.2

2017

2018

2019

156.2

2019

(FY)

(FY)

Industrial Materials
Sales to overseas customers increased in theairbag fabrics and life and industrial materials
business, resulting in higher sales in thissegment overall. However, fluctuation in raw
materials prices and the impact of a fire led toa fall in operating profit.

3.9
59.9

63.5

66.5

2017

2018

2019

(FY)

Healthcare
There were strong sales of enzymes fordiagnostic reagents to overseas customers,
but the pharmaceutical contract
manufacturing business faced challenging
conditions, while orders for RO membranes
for desalination were also at a standstill. As aresult, both sales and operating profit fell.

36.4

35.7

34.7

2017

2018

2019

(FY)

2.6

(FY)

(FY)

Textiles and Trading
There were weak sales of products foruniforms, and fabrics for traditional Arabic
menswear saw a downturn in market
conditions, leading to lower sales volumes.
On the other hand, sports clothing products
recovered, resulting in lower sales but higher
operating profit.

05

TOYOBO REPORT 2019

1.4

1.4
0.9

77.6

68.3

64.6

1.1
0.6

2017

2018

2019

(FY)

2017

2018

0.9
2019

(FY)

Fiscal 2019
Business Overview

Value Creation
Strategy

The Basis of
Value Creation

Value Creation

Overview by Region

Overseas Sales

Other regions

9.7%(¥ billion)

Net Sales

20.9%

102.6

2015

2016

96.3

96.1

2017

2018

102.7

Japan

336.7

Southeast Asia

100.0

69.5%

(¥ billion)

Overview of Fiscal 2019

2019

(FY)

Net Sales (¥ billion)

Japan
Sales of packaging films were supported by firm domestic demand, includingfrom convenience stores. We also increased sales of mold releasing film forhigh-end MLCC, as well as automotive engineering plastics.

233.2

235.1

234.0

2017

2018

2019

(FY)

Southeast Asia
Sales of COSMOSHINE SRF™ polarizer protective film for liquid crystal displays
grew in the Asia region. Volatile organic compounds (VOC) treatment systems
and elements for recovering solvents performed well in markets such as China,
owing to increased environmental-related investment. In addition, there werestrong exports of enzymes for diagnostic reagents, especially to China.

56.6

2017

62.5

70.2

2018

2019

33.5

32.5

2018

2019

(FY)

Other regions
In the Middle East, sales of RO membranes for desalination and fabrics for
traditional Arabic menswear were sluggish. In Europe, we began validation
testing of an osmotic power plant with a view to practical application of hollow
fiber forward osmosis (FO) membranes.

39.7

2017

Asia
TOYOBO Group’s Business Locations around the GlobeEurope Germany

India

China
Hong Kong

Saudi Arabia

Middle East
United States

South Korea
Japan
TaiwanThailand
Spain

(FY)

Malaysia
Indonesia

Latin America

North America
MexicoEl Salvador

BrazilTOYOBO REPORT 201906

Key Events in Fiscal 2019

Strong sales of COSMOSHINESRF™ for LCD TV
COSMOSHINE SRF™ polarizer protective film for
liquid crystal displays (LCDs) is a super retarder filmthat eliminates the coloration caused by birefringenceseen in conventional polyester films. With theincreasing size of LCD TVs, as well as the shift tobezel-less screens and open-cell panels*, thesuperiority of polyester film has become clear, due toits excellent low moisture permeability and durability.
In fiscal 2019, sales grew by about 65% and ourmarket share was 30%.
* Sales of semi-finished products without the LCD’s backlightcomponent

Robust sales of mold releasing film
for MLCC
Demand for MLCC has been growing year on year along with the
spread of IoT. Mold releasing film is indispensable in the
production of ultra-small MLCC, which are positioned as
high-end products. TOYOBO Group is the only manufacturer that
can handle the integrated production of this mold releasing film,
from base film to releasing layer coating. Sales for automotive
use grew especially strongly in fiscal 2019. Moreover, we haveinvested ¥3 billion in expanding our processing facilities to meetfurther growth in demand. Our goal is to further accelerate anddouble sales by fiscal 2022.
TOYOBO’s film

Usual film

coating layer
base
film
particles“MIRAI JINZAI JUKU” for nurturing
talent and creating new business
TOYOBO has launched a new “MIRAI JINZAI JUKU”
incubator project for nurturing talented human resources ofthe future. Young staff members, who are selected throughan internal recruitment process, plan and develop productsby raising funds through the “Makuake” crowdfunding
service, and then sell them. In the first phase, theytackled the development of dog clothing employing
functional materials and technology. Going forward,
we will explore full-scale commercialization basedon the results and feedback.

07

TOYOBO REPORT 2019

Fiscal 2019
Business Overview

Value Creation
Strategy

Value Creation

The Basis of
Value Creation

FO membranes adopted at Danish osmotic
power plant
Hollow fiber forward osmosis (FO) membranes manufactured by TOYOBO havebeen adopted at a first-of-its-kind osmotic power plant in Denmark, which isoperated jointly by TOYOBO Group and three Danish firms. Osmotic powerusing geothermal water is attracting attention as a renewable energythat is unaffected by weather conditions. The plant (picture on
the left) is the largest of its kind in the sector, and the firsttime in the world that a full-scale osmotic power plant
has operated. We intend to further expand theapplications for FO membranes in future,aiming for sales of ¥2 billion by
fiscal 2021.

Establishment of manufacturer/
distributor for XENOMAX™
XENOMAX™ is a high heat-resistant polyimide filmwith world-leading dimensional stability. New
production facilities have been built following theestablishment of the new company Xenomax –Japan Co., Ltd. As well as meeting increased
demand as the base material in TFTs for electronic
paper (e-paper) displays, TOYOBO is now aiming to
expand sales for a wide range of applications.

Fire at the Tsuruga Research and Production Center
On September 6, 2018, a large fire broke out at TOYOBO’s Tsuruga Research and Production Center.
Although no-one was hurt, production facilities for airbag yarns, the three-dimensional cushion
material BREATHAIR™ and nylon yarn for clothing were damaged. We apologize sincerely for theinconvenience and worry caused to all related parties.
We have now completed identification of the causes and are implementing preventive
measures at the Group level.

For details of the causes of the fireand future countermeasures,
see p.49-50.

TOYOBO REPORT 201908

History of Value Creation

We have reformed our business portfolio
while creating shared value for society.
In recent years, TOYOBO Group has focused on developing high-functional products, such as high value-added films, in order tocreate shared value (CSV). As a result, our portfolio has also evolved to have a focus on specialty businesses,
and profitability has vastly improved.

2010
1931

1963

Entry into the films business

Establishment of a joint venture for manufacturing
and selling RO membrane elements fordesalination for the first time in Saudi Arabia

1982

2012

Rapid advance to become oneof the world’s largest spinningcompanies

1948
1882

Start of research into pulp fluid
waste disposal

Approaching the TOYOBO Centennial

Foundation

1956
Osaka Boseki spinning mill

Entry into the synthetic fibers
business

The TOYOBO Building
was completed in 1980

2002

Left: Standard film Right: COSMOSHINE SRF™

Consolidated Sales from Non-Fiber
Operations Exceed Sales from Fiber
Operations

Production of polyester staple
fibers started in 1964

Development of COSMOSHINE SRF™ polarizer
protective film for liquid crystal displays (LCDs),
which eliminates the coloration caused bybirefringence2014

Acquisition of world’s second largest airbag
yarn manufacturer

Fiber
Non-fiber
operations operations

193.4
183.0
billionbillionyen

yen

Jun-Ri-Soku-Yu
Our founding spirit, a forerunner of CSV
Jun-Ri-Soku-Yu (realizing prosperity by acting rationally)
was a personal maxim of our founder Eiichi Shibusawa, an
industrialist who contributed greatly to Japan’s
modernization. It has been the foundation of TOYOBOGroup’s business ever since. These words imply that bymeeting the needs of society and realizing prosperity, we
ourselves also grow, and they demonstrate a pioneering
approach to “CSV” more than 140 years ago.
09

TOYOBO REPORT 2019

TOYOBO Group has continually reformed its businessportfolio in order to meet the social needs of the times andrealize prosperity, based on Jun-Ri-Soku-Yu (realizing prosperityby acting rationally). Now, TOYOBO Group is focused on the
Sustainable Development Goals (SDGs), providing solutions
for social issues through “materials + science*.”* Science: Newly created value through ingenuity and ideas

Value Creation
Strategy

Fiscal 2019
Business Overview

Value Creation

The Basis of
Value Creation

Specialty Businesses
Films andFunctional
Polymers

Specialty Business Sales Ratio

Packaging films, industrial films,
industrial adhesives, engineering
plastics, photo functional materials, etc.

FY2019FY1996

30.0%

76.5%

Operating Profit Margin

Operating Profit Margin

1.4%

Net Sales

461.0

billionyen

Automotive fiber materials, high-strength
fibers, cushion materials, non-woven
fabrics, etc.

Healthcare

Bio products including enzymes fordiagnostic reagents, medical membranes,
medical equipment, desalination
membranes, functional filters, etc.

6.5%

Operating Profit

Net Sales

6.3

336.7

billionyen

Industrial
Materials

Operating Profit

billionyen

21.7

billionyen

Textiles andTrading

Clothing for sports, fabrics for inner wear
and uniforms, fabrics for traditional
Arabic menswear, etc.

Improving profitability through portfolio reform
Since the late-1990s, TOYOBO Group has focused on
expanding its specialty businesses. This includes thedevelopment of environmentally friendly packaging films
and engineering plastics, fiber materials to enhancesafety in automobiles, non-woven fabrics, and bio
products and medical equipment to maintain andimprove people’s health. TOYOBO has continually
supplied high value-added products to society in avariety of fields where we have the potential to be thecategory leader.
As a result of these portfolio reforms, the share of
specialty businesses within TOYOBO Group’s total sales
has risen dramatically, from 30% in fiscal 1996 to 76.5%
in fiscal 2019. Our operating profit margin has also risen
accordingly, to 6.5%.

TOYOBO REPORT 201910

Approach to Value Creation

We promote value creation in four fields,
responding to the needs of the new era.
To achieve long-term growth, TOYOBO Group will accelerate innovation in a manner that connects technology with the market,
while promoting value creation in line with the expectations of society and the marketplace.

Value Creation Strategy
Social Demands

MarketDemand for“Products”
Supplying “soft” services and solutions while delivering
product performance, thereby creating customer value

Innovation

Core Technology
Polymerization
Modification
Processing
Biotechnology

Technology

Provision of“Manufacturing”
Providing optimal value throughout the value
chain, in terms of quality, cost, and lead time

Contribution to SDGs
The SDGs are global Agenda for Sustainable Development
adopted by the United Nations General Assembly in 2015,
to be achieved by 2030.
TOYOBO Group aims to make a proactive contribution
to resolving the social challenges set out in the SDGs,
including poverty, hunger and climate change.

11

TOYOBO REPORT 2019

Fiscal 2019
Business Overview

Current Focus Fields

Value Creation
Strategy

The Basis of
Value Creation

Value Creation

Value Brought to Society
Films & Coatings
We will support smart living tomeet a wide range of needs,
including food safety/security
and preservation of the global
environment.

Resolving food challenges

Reducing waste

Food packaging film

Film that supports recycling

Our food packaging film is ideal forfood storage and helps to ensure
food safety and security, while also
reducing food loss.

We supply products including filmthat uses 80% recycled PET bottle
resin. This helps to cut waste volumes.

P.25

Mobility
We will contribute to enhancing
the safety and environmental
performance of all kinds ofvehicle, focused on
automobiles in the 5G era.

Healthcare & Wellness
In Japan, over one third of the
population will be aged 65 orover by the year 2035, and wewill respond to the growing
demands of longevity and health.

Environment
We will help to resolve
challenges such as climatechange and water shortages –global issues that demandaction.

Rigorously managing our impact on theenvironment and society
Through our operations, TOYOBO Group aims to help
realize a sustainable society while resolving social issues,and to achieve long-term growth.
To do this, we have identified important environmental
and social themes, and are striving to mitigate any adverse
effects of our operations while augmenting the positive
benefits.

P.27

Reducing CO2

Mitigating the impact of accidents

Materials that make vehicles lighter

Airbag fabrics

The use of lightweight materials
instead of metal helps to improvevehicles’ fuel economy and reduce
CO2 emissions.
P.29

Integrated production of airbag yarn
and fabrics with outstanding
durability and heat resistance.
TOYOBO has production sites
consisting of five bases worldwide.
P.31

Improving diabetes patients’ QOL

Supporting the lives of dialysis patients

Enzyme for blood glucose
measurement

Hollow fiber membranes
for artificial kidneys

We have developed an enzyme thatis used in the sensors of equipment
for self-monitoring of blood glucose.
Accurate measurements are given ina short time.
P.33

Hollow membranes formed with fineperforations using our proprietary
technology support the lives of
dialysis patients.
P.35

Eliminating water shortages

Reducing atmospheric pollution

Desalination membranes

VOC recovery systems

TOYOBO supplies the membranes
used in seawater desalinationequipment. These are being
employed in locations including the
Middle East.
P.37

TOYOBO’s unique adsorbents
eliminate VOCs and recover organic
solvents.
P.39

Key management themes
Preventing
globalwarming

Managementofchemical
substances

Resource
circulation

Safety anddisasterprevention

Respecting
diversity

Securing andnurturinghuman
resources

Quality
management

Supply chain
management

TOYOBO REPORT 201912

Corporate Philosophy

We continue to create shared value, basedon our founding spirit of Jun-Ri-Soku-Yu.
In March 2019, TOYOBO Group systematized our Jun-Ri-Soku-Yu corporate philosophy in order to revise and instill its meaning in all
TOYOBO executives and employees, so that we actively build a prosperous society while also growing ourselves as a company.

TOYOBO Group’s Corporate
Philosophy System (PVV)

Principle

VisionValuesCommitment to ourselves( TOYOBO Spirit )13

TOYOBO REPORT 2019

Fiscal 2019
Business Overview

Value Creation
Strategy

The Basis of
Value Creation

Value Creation

Our approach to CSV, handed down over 140 years
Jun-Ri-Soku-Yu (realizing prosperity by acting rationally)
was a personal maxim of our founder Eiichi Shibusawa(1840–1931). He was an industrialist who believed inworking for the public good and contributed greatly to
Japan’s modernization.
He became known as the “father of Japanese
capitalism” after establishing and managing over 500
companies and organizations in a variety of fields.

Principle TOYOBO’s founding spirit and beliefs
Jun-Ri-Soku-Yu (realizing prosperity by acting rationally)

Prosperity = TOYOBO CSV“Jun-Ri”“Soku-Yu”

Contribution to society

Do the right thing= Proactive
Never do wrong= Vigilant

By adhering to “Jun-Ri”, bringprosperity to society while
also realizing self-growth.

The Company’s earnings
Our employees’ job motivation

Vision As a company, what kind of added value should we provide to society?
We will continue to be a Group thatcreates the solutions demandedby people and the global environment,
through Materials + Science• We pursue Science, rather than simply manufacturing products(providing materials)• “Science” means the new value we create through ideas andingenuity• We are committed to being a Group that provides uniquesolutions through the fusion of Materials and Science

Values The things that all TOYOBO Group employees value
We do not fear change; rather, we relish and create change
Challenge

Reliability

Collaboration

We value the courage to create new things
beyond conventional limits

We build a safe and secure workplace, andplace importance on providing solutions
that surpass our customers’ expectations

We value a diversity of characteristics andopinions

Commitment to ourselves (TOYOBO Spirit) Daily code of conduct• We will establish the conditions in our respective workplaces that enableeach and every one of us to work with joy and a sense of pride. Throughthe efforts of everyone, we will build a company in which we grow asflourishing members of society• In order to achieve this, we make this commitment to ourselves(TOYOBO Spirit)

ValuesCommitment to ourselves

Challenge

Act Swiftly
CreateExecuteReliability

Safety First
Customer Satisfaction
Factual Basis

Collaboration

Mutual Communication
Diversity
Providing Opportunities

TOYOBO REPORT 201914

Message from the President

Seiji Narahara
Representative Director,
President and Chief Operating Officer

15

TOYOBO REPORT 2019

Fiscal 2019
Business Overview

Value Creation
Strategy

Value Creation

The Basis of
Value Creation

We will maintain sustainable growth
while proactively investingin businesses that bring prosperity
to society.
Our corporate philosophy
Jun-Ri-Soku-Yu (realizing prosperityby acting rationally)

TOYOBO Group so that our businesses can contributeeven more to the communities they serve.

Companies have a duty to help theircommunities prosper.

Enhancing the Group’s business portfolio

The TOYOBO Group’s corporate philosophy is rooted in a
motto of the Company’s founder, Eiichi Shibusawa. About
100 years ago, he wrote his favorite motto, Jun-Ri-Soku-Yu(realizing prosperity by acting rationally), on a plaque whengiving a speech to employees about the compatibility ofmorality and business. For Shibusawa, morality not only
meant refraining from doing what is wrong; more proactively,
it also meant taking a leading role in eliminating social
problems and poverty by helping bring prosperity topeople. Based on the motto, he called on employees tomake the company grow while creating prosperity forsociety by adhering to the fundamental principles ofmorality: doing what is right, and refraining from doing whatis wrong.
Shibusawa’s approach long predated the management
concept of “creating shared value,” which has been
widely adopted by companies in recent years. Both arepremised on the idea that a company can growsustainably and help communities thrive by consistently
ensuring that its business activities are beneficial forsolving the issues that people face. Based on thatapproach, we have maintained a commitment to passing
down the founder’s original vision to all members of the

We are proactively investing in businesses that
contribute to society.
To continue putting our corporate philosophy into practicein our business activities, we recognize the importance ofalways considering how our businesses can benefit
society. That means identifying which businesses andproduct categories can be beneficial, and then allocating
operational resources accordingly.
Over many years, the TOYOBO Group distinguishedsuch beneficial businesses and products as part of thereorganization of its business portfolio. Consequently,
the Group’s operations gradually evolved as it selected
and invested in businesses that contribute to solving theissues of the day. The company originally started out inthe cotton spinning business, and expanded into thesynthetic fibers business in the 1960s. Eventually, after
accumulating technologies, know-how, and expert
personnel in the synthetic fibers business, the TOYOBOGroup developed its current business pillars of films andengineering plastics.
To make inroads in new markets, however, forwardlooking investments are necessary. In the past, ourinvestment decisions were mainly based on quantitative

TOYOBO REPORT 201916

Message from the President

analyses of the earnings and profitability of our businesses.
Since I was appointed as president, however, management
has been placing much more importance than before on
qualitative analyses of the operating environment with respect
to customers in the market, our competitors, and the Group,
itself, because earnings and profitability are highly affectedby changes in the market and competitive environment.
Specifically, we examine market research and informationon our competitors obtained from external researchorganizations, analyze the Group’s competitive advantages,
and then proactively move forward with investments inbusinesses that have the potential to contribute positively
to society.
Qualitative analyses are beneficial because they canprovide useful information even when business conditions
are challenging. For instance, if a business is having trouble
generating profits, we can qualitatively demonstrate that its
products are sellable by looking at the market, the advantagesof our products, our manufacturing capabilities, and methods
for marketing the products to customers. The results ofsuch an analysis provide a basis for motivating
employees as we work to expand new businesses as thebusiness pillars of tomorrow.

Overview of results in fiscal 2019,
ended March 31, 2019
Our past efforts have laid a surefooted path to
growth.
In fiscal 2019, the first year of our 2018 Medium-Term
Management Plan, net sales were up but operating profit
decreased year on year, largely due to the impact offluctuating prices for raw materials and fuel. Regrettably,
the Company posted a net loss for the first time in 10
years, mainly as a result of extraordinary losses incurredfollowing a fire at its Tsuruga Research and Production
Center in September 2018.
Despite these disappointing financial results, the
TOYOBO Group has been making excellent progress inother respects. Its businesses are now seeing steadyreturns on a series of growth-oriented investments thatwere implemented after shifting to growth strategies
following a decade of business restructuring.
Consequently, we succeeded in turning the industrial
films business into a major earnings driver on the back ofhighly successful products, including the Cosmoshine SRF
polarizer protective films for LCDs, as well as our lineup of
mold releasing films for multilayer ceramic capacitors. We
also developed the airbags business into a highly
competitive global player in partnership with PHP Fibers

17

TOYOBO REPORT 2019

GmbH, a Germany-based manufacturer jointly acquired by
TOYOBO in February 2014.
Moreover, the Company’s financial structure has
substantially improved over the past decade following thebusiness restructuring. We reduced the debt-to-equity ratio
from 1.82 times in fiscal 2009 to 0.81 times in fiscal 2018,
and gained A ratings from credit rating agencies for the firsttime in 20 years. Now that the Company’s financial position
is sound, we are aiming to expand the Group’s film-related
businesses by investing even more aggressively going
forward. In fiscal 2019, capital investment amounted to¥25.5 billion.

Progress under our Medium-Term
Management Plan and future outlook
We are targeting operating profit of ¥30 billion
by fiscal 2022 on the back of steady returns on
growth investments.
Under our 2018 Medium-Term Management Plan, we havepositioned the Films & Coatings business as a top of growth
driver. Among the products in this business, Cosmoshine
SRF in particular sold well in fiscal 2019, with sales
increasing 65% year on year. As a result, its share of the
global market quickly grew to about 30%. To meet brisk
demand, we are proceeding with capital investment to boost
production capacity, and plan to begin operating a third
production line in fiscal 2021. That will increase
production capacity by around 1.5 times, enabling theGroup to gain a 40% share of the global market. Another

Financial results, forecast, and targets(¥ billion)

FY2019Results

FY2020
Forecast

FY2022
Targets

Net sales

336.7

350.0

375.0

Overseas sales ratio

30.5%

–

35.0%

Operating profit

21.7

22.0

30.0

Operating profit margin

6.5%

6.3%

8.0%

Extraordinary income (loss)(17.7)

7.0–

Profit (loss) attributableto owners of parent

(0.6)

17.0

16.0

Capital expenditure

25.5

36.5

–

Return on equity––

Min. 8%Debt-to-equity ratio

0.93

–

Under 1.0

Fiscal 2019
Business Overview

key product in this business is mold releasing film for
multilayer ceramic capacitors. Sales increased byapproximately 30% compared with the previous fiscal
year, and its share of the high-end market has grown
to 25%. With high expectations for this product, weare aiming to raise that share to 30% by fiscal 2022. In
the future, we intend to further strengthen our
production development and supply network for highperformance films.
In the Mobility business, we are focusing on airbag
fabrics in particular. The global airbag market is expanding at
a faster pace than the automobile market and demand is
projected to grow in the future. We are also marketing
engineering plastics in markets around the world with a viewto achieve even more growth.
In the Healthcare & Wellness business, we have been
focusing on enzymes for genetic testing and hollow fiber
membranes for artificial kidneys. Internationally, the Group is
promoting sales of enzymes for diagnostic reagents,
including enzymes used in sensors for self-monitoring ofblood glucose. In addition, we have been working
tirelessly to help protect the global environment throughthis business, including efforts to sell equipment for treating
VOCs in emerging countries such as China.
In fiscal 2020, the second year of our management
plan, we foresee year-on-year growth in consolidated sales
and profits, despite the lingering impact of the aforementioned
fire that damaged the Tsuruga facility. Over the next two
years of the plan, although growth could slow down due
to proactive investment in new equipment and facility
expansion, we can look forward to substantial returns on

Main measures of the Medium-Term Management Plan

Value Creation
Strategy

Value Creation

investments in the new facilities when they commence fullproduction of big-selling products like Cosmoshine SRF
and mold releasing films for multilayer ceramic capacitors.
Taking these factors into consideration, we are targeting
operating profit of ¥30 billion by fiscal 2022, the final yearof the management plan.

Three Part Harmony
We need to fully consider not only our current
performance but also our future growth andcorporate culture.
Over the past few years, I have been calling on employees
to give equal priority to three aspects of the TOYOBOGroup: its current performance, future growth, andcorporate culture.
During the years when business restructuring wasan urgent task, we gave the highest priority to our immediate
work and performance. Focusing on the present remains
important, of course, but the Group will not be able to growif we only think about securing earnings in the short term.
Therefore, I asked employees to consider what they
can independently do to help our business expand while
making society prosper—in other words, our future growth.
Furthermore, I have repeatedly encouraged employees toreflect on our corporate culture in light of the fire disaster in
September 2018, specifically issues concerning safety,
disaster prevention, the environment, quality control, andmore employee-friendly workplaces.
As part of these efforts to change the way we think

Main products promoted under
the Medium-Term Management PlanThree Part
Harmony• Airbag fabrics• Engineering plastics• HARDLEN™

Mobility• Channeling operational resources into growthbusinesses to produce results• Varying and prioritizing KPI for each business• Taking responsibility for the future throughproactive investments designed for growth
going forward

Implementing short- andmedium-term action plans

Enhancing new productand business development
over the medium and long terms• Allocating personnel and capital for safety, accident
prevention and quality control initiatives• Implementing a project for changing the Company's
corporate culture (KAERU-Project)• Promoting the Company's long-standing
corporate philosophy (Jun-Ri-Soku-Yu) to gain acompetitive edge against its competitors

The Basis of
Value Creation

Improving the Company’s
corporate culture and systems• COSMOSHINE SRF™
• Mold releasing film for
MLCC• XENOMAX™
• Packaging films

Overseas
expansion

Films &
Coatings

Healthcare &Wellness• Enzymes fordiagnostic
reagents• Nerbridge™
• Boneregenerationinducing
materials• Functional
filters• Medical-use
membranes• COCOMI™

Environmental
products• RO • FO membrane• PPS materials for bag filters• Photo-functional materials• VOC emissions treatment equipment• Aluminum catalysts for polyester

TOYOBO REPORT 201918

Message from the President

within the Company, we initiated a special project involving
all managers and employees in fiscal 2019 called the
KAERU Project. Together, we have been exploring waysof changing the Company with respect to various aspects
related to work, systems, and awareness throughparticipation in working groups tasked with each of those
respective topics.

Towards sustainable growth
We have set growth targets and laid a roadmap
up to fiscal 2026.
Future growth is one of the three areas we are focusing

on (Three Part Harmony), and our 2018 Medium-Term
Management Plan is a means for achieving it.
Nevertheless, in fiscal 2020, we envisioned beyond theperiod of the plan and set growth targets and objectives
up to fiscal 2026. For the TOYOBO Group, a considerable
amount of time is needed to get a business up and running,as that involves investing in product manufacturing
facilities, starting up production, and establishing apresence in the market. Indeed, over a decade is often
required from the initial period of basic research andproduct development to the full-fledged operations of abusiness.
At present, the Group’s businesses operate whilelooking ahead three or four years into the future, but we

Growth target

Consolidated net sales of¥500

billion in fiscal 2026

Basic approaches

1. Expand the scope of businesses anddevelop solutions
Product fields that will provide solutions. Films, adhesives, and coatings. Lifestyle and environmental products. Mobility-related products

2. Strengthen group-wide capabilities. Contribute to achieving SDGs through measures for addressing
global warming, environmental issues, and food crisis, etc.
. Bolster ability to operate businesses sustainably. Foster leadership capabilities for overseeing business development and expansion. Life science-related products

Future vision of each business domain

Films, adhesives,and coatings

Lifestyle andenvironmental
businesses

Mobility-related
businesses

Life sciencerelated
businesses

19

TOYOBO REPORT 2019

Become a leading global provider ofenvironmentally friendly products andsolutions
Offer new value and total solutions
Become a solutions business that
contributes to creating comfortable andhealthy living environments. No. 1 global manufacturer of eco-friendly films. Comprehensive provider of resins. Global-leading non-woven fabrics manufacturer. Environmental solutions provider. Industrial and consumer materials provider with functional textiles
and trading expertise

Be a unique company that provides
solutions for safe, reliable, andcomfortable vehicle interiors. No. 1 global airbag fabric manufacturer

Become a developer of products andservices for providing quality healthcare
and ensuring healthy communities. Top domestic provider of solutions for genetic diagnoses of. Top-tier engineering plastics manufacturer. Partnerships with global automakers

infectious diseases. Global-leading medical membrane manufacturer

Fiscal 2019
Business Overview

are taking steps to create new growth businesses from alonger perspective of eight years. That means expanding
and reorganizing the scope of our businesses, exploring
ways for each of those businesses to help people solve
issues, and then accelerating the pace of offering solutions.
Through this process, we will strive to achieve our target of¥500 billion in net sales in fiscal 2026.

ESG initiatives
The Company is actively investing in initiatives
that strengthen its business foundations.
Environmental, social and corporate governance (ESG)
initiatives are at the heart of our business. Accordingly, we
recognize them as integral to our corporate culture, one of
the three areas we are focusing on (Three Part Harmony),
and are enhancing these initiatives as essential investments
for the Group.
We are also promoting diversity and work-life balance
for the Company’s human resources, which underpin all
business activities, so that each employee can demonstrate
his or her abilities. At the same time, we are focusing on
fostering managers and globally competent personnel
who can respond to the needs of communities anywherein the world. With a serious commitment to complianceand quality control, we are working to make theCompany’s internal systems better than ever. Disasterprevention and safety measures, especially, are being
improved in the aftermath of the fire accident in
September 2018.
Meanwhile, we have been taking steps to improve theCompany’s corporate governance. In an effort to raise theefficacy and diversity of the Board of Directors, we
increased the number of outside directors from three to four(and the total number of directors from nine to ten) with theappointment of a female outside director in June 2019.
Looking ahead, we intend to step up our ESG initiatives
while raising awareness of the United Nations’ Sustainable
Development Goals (SDGs).

Value Creation
Strategy

Value Creation

The Basis of
Value Creation

economically. Concretely, we will maintain our focus on
the Group’s current performance, future growth, andcorporate culture as we work to achieve the goals of our2018 Medium-Term Management Plan. I am confident thisapproach will create a foundation for attaining growth in
the years ahead.
I regard the return of profits to shareholders as oneof the most important issues for management. As a basic
policy, the Company ensures continuous payments ofstable dividends with a target of total return ratio of 30%
to shareholders, including through acquisitions oftreasury stock.
In closing, we look forward to the ongoing support fromthe Company’s shareholders.
Representative Director,
President and Chief Operating Officer

Closing message to shareholders
and investors
With a roadmap for the future, we look forward
to meeting the expectations of shareholders for
future growth.
Based on our approach to creating shared value, the
TOYOBO Group will strive to raise its corporate value while
helping communities overcome challenges thrive

TOYOBO REPORT 201920

Message from the Corporate Senior Executive Officer

Aiming to maintain a solid financial
status as we advance toward ourideal vision for the Company.
Preserved a sub-1.0 debt-to-equity ratio
even while reporting a net loss

Masaru Watanabe
Representative Director andCorporate Senior Executive Officer

29
21

TOYOBO REPORT 2019

The TOYOBO Group posted a net loss of ¥0.6 billion in fiscal
2019, largely owing to the major fire at the Tsuruga
Research and Production Center. Our financial performance
declined somewhat from the previous fiscal year, includinginterest-bearing debt rising ¥19.2 billion to ¥164.8 billion andshareholders’ equity ratio declining from 40.5% to 38.3%.
Despite this adverse development, our financial position
remained sound as we maintained our debt-to-equity ratio at
0.93 and remained within our target to hold the ratio at ahealthy level of less than 1.0.
As the chief financial officer, I know very well that
unexpected occurrences should always be expected andthat this makes it all the more important to ensure the company
has a sound financial footing. Although the conditions for
procuring funds in the financial markets are presently favorable
under the current financial policies, we cannot expect these
conditions to continue. We believe we need to be prepared
for the possibility that somewhere in the world something
could happen that will drastically change the market
environment. The current situation very much reminds meof a challenging period I faced around 2000 when I was amanager in charge of financing. When the market
environment deteriorated, the fundamental importance ofa stable earning base and sound financial standing
became starkly clear. With that understanding, we set andhave consistently maintained for many years a standard tomaintain the debt-to-equity ratio below 1.0. The same istrue for our business operations. We do our best to prepare
for the unexpected by taking a risk management viewof our operations so we know how to respond to an
event to minimize the damage and prevent any potential
lasting impact.
Another issue we are addressing is the need to further
strengthen our financial standing. We raised and held ouroperating profit margin above 7.0% for two straight years
only to see it drop to 6.5% in fiscal 2019. We are targeting
raising the operating profit margin to 8% in fiscal 2022 on
the way to eventually lifting it above 10%. These targets give
us additional motivation to constantly reform our businessportfolio, fortify our revenue structure, and strengthen ourearning power. I believe we must do all of these to maintaina solid financial position.
It is my responsibility to be a sort of guardian of ourcorporate value, and to do this by being open to new waysof thinking about preserving and building that value and by

Fiscal 2019
Business Overview

creating a strong financial position that is resilient to therapidly changing environment.

Steering the best investmentsfor our growth strategy
Sustained growth is another key element to corporate value.
The Company’s sales and operating profit have remained
relatively unchanging for several years now. That is a reminderthat a sound financial position is an essential foundation but
only one of the necessary elements to achieve sustained
growth. It’s our duty as managers to effectively use the funds
provide to us by our shareholders to generate profits and toinvest for future expansion. We do this by actively acquiring
equipment to increase our production capacity, providing
funds for R&D from which will emerge the new businesses andproducts that will become future earnings drivers, and actively
forming alliances and seeking M&A to accelerate our growth.
There are three key points in behind decisions made forthe purpose of business growth. Is this investment consistent
with our direction for future growth? Will this investment
provided sufficient growth potential? And, what would be
the potential impact if the investment does not pan out as
expected? It’s also important that we look ahead to where
we want to be in five and ten years, and then work backward
to see where an investment will place us on the path toward
fulfilling our objective. After examining a potential investment
target, we then have to determine if we will need to procure
funds to execute the investment. While dedicated tomaintaining a debt-to-equity ratio below 1.0, we recognizethat this is a numerical benchmark, and we need to beflexible to make the decisions that are best for the long term.
Yet, even if we decide an investment is worth a drop in the
D/E ratio, we will not allow it significantly compromise thesoundness of our financial position. The 2018 Medium-Term
Management Plan sets Films & Coatings, Mobility, andHealthcare & Wellness as our future growth fields, and weare preparing to strategically invest to fulfill our clear objectives
for expanding our business in each of these fields.

Reform for the future
The KAERU Project is absolutely essential to fulfilling our visionof the company in the future. Launched in April 2018, theproject is to transform the company by changing (kaeru inJapanese) the way we work by “creating a strong corporate

Value Creation
Strategy

Value Creation

The Basis of
Value Creation

culture and workforce that remains constant through changing
times.” All executives and employees are participating inworking groups covering each of the areas where we seek tochange and improve the company. The project’s first stage
is the four-year period from 2018 to April 2022, when we willcelebrate the 140th anniversary of the company’s founding
and move into a new headquarters building. In fiscal 2019, weclarified our corporate philosophy system, which is based on
our corporate philosophy of Jun-Ri-Soku-Yu (realizing prosperityby acting rationally). We are also framing our long-term vision
for what we want the company to be in fiscal 2026 and will
determine a clear direction for the Company's transformation.
The transformation is taking place at all levels of thecompany. We are revamping the human resources system
and remaking work environment to ensure it is universally
comfortable and encourages employees to grow throughtheir work. Operating efficiency is being improved by revisingeach department’s workflow, including incorporating robotic
process automation (RPA) and using business process
outsourcing (BPO) for some routine operations. Our world is
rapidly evolving and computer technologies are constantly
becoming more advanced and powerful. So, we must always
open to new approaches and new ways of thinking about ourbusiness and our company. We view change as opportunityand seek to be a company that is constantly changing (kaeru)
to remain the best that it can be.
We are mobilizing all Group companies in a concerted
effort to realize a transformation to fulfill the expectationsof our shareholders and investors, and look forward to yoursupport and encouragement as we create a new TOYOBO.
Representative Director andCorporate Senior Executive Officer

The latest technology for the greatest value
We incorporate the latest information technology to give ourbusinesses the best tools to succeed in the current
conditions. We are presently digitalizing our businessprocesses and creating data infrastructure in all areas,
including updating manufacturing processes to incorporatemachine learning, adding sensing equipment with IoTtechnology in our quality control management, and increasing
productivity by including RPA in our back office operations.
Constructing the system infrastructure to cover our
expanding value chain and using digital technology totransfigure how we do business will not only transform ourcompany internally, it will give us greater ability to provide
value to our customers and society.

TOYOBO REPORT 201922

Message from the Controlling Supervisor of the R&D and IP

Today’s R&D is
the foundation
for tomorrow’s
TOYOBO.
Yasuo Ota
Corporate Executive Officer

Restructure for more effective
strategic R&D activities
R&D is the wellspring of the TOYOBO Group’s competitivenessand bolstering our R&D capabilities is essential to achieving
sustained growth. Although the Company frames its
medium-term management plans for four-year periods, theR&D department necessarily takes a longer view becauseof the time it takes to discover and develop the seeds ofideas in basic technologies into viable commercial products.
Accordingly, from fiscal 2019 we initiated an R&D strategy
for an eight-year period to fiscal 2026.
When we adopted this new approach, we also reorganized
the R&D structure. The Group has a Business Research
Department for each division and a Corporate Research
Department responsible for research and commercial
development of core technologies and projects. The Corporate
R&D Planning Department that I am in charge of oversees
the two departments and guides the R&D strategy for theGroup. In October 2018, we merged part of the Divisional
R&D Departments into the Corporate R&D Department withthe aim of strengthening the capabilities of both departments.
We also restructured the Corporate Research Department tomake our development operations more efficient. Previously
oriented to product applications and target markets, and wereorganized the department into three general sectors ofChemical Research Unit, Processing Research Unit, and

29
23

TOYOBO REPORT 2019

Bio-Science & Medical Research Unit.
The reorganization’s main objective is to stimulatedialogue between the business and R&D strategies. We arealso looking for ways to better facilitate exchange ofknowledge between the business and corporate researchdivisions, which together guide the Company’s overallbusiness ideas and operations. The reorganization creates a
structure that puts strategic R&D as the leading driver for
the Company so instead of pursuing short-term goals of
meeting customers' immediate needs, we will be more
focused on objectives needed for business growth in thelong term.

Actively pursuing new ideas witha philosophy of “Try many, Fail quickly”
In recent years, the Group has been investing about 3%, orroughly ¥10 billion, of its annual sales revenue in R&D. The
2018 Medium-Term Management Plan provides an optional
budget of an additional ¥2 billion annually for R&D. These
funds are available for M&A or forward investment in new
research ideas and will give us the flexibility to quickly andaggressively pursue and develop ideas proposed by the R&D
department. In fiscal 2019, we applied some of these funds
for venture capital and partnership plans we are pursuing inJapan, the United States, and Europe. We will continue

Fiscal 2019
Business Overview

responding quickly to any information that presents promisefor the Company and are constantly monitoring for new
technologies and alliances that can contribute to our growth.
The decision to invest in an R&D idea is made when an
idea starts to show commercial potential and after thoroughqualitative analysis. However, since the majority of our R&D
activities are geared to a long-term horizon, committing
significant funds and effort to new ideas has always been
problematic. For example, after entering a joint researchcontract with a partner company in the United States, it took
15 years to develop the heat-resistant polyimide film
Xenomax from idea to commercial production in April
2019.In the R&D department, we had a chronic problem
of losing too much time deciding whether an idea is worthyof pursuing, and if an idea we had started pursuing wasdetermined to be a dead end, it was just as difficult to stop
the development process. This was undermining our R&D
efficiency, so a few years ago, I instituted a policy of “TryMany, Fail Quickly” to encourage the department to try as
many ideas as possible and to not hesitate to drop an ideathat is found to be fruitless. Quick decisions and action are
critical, and if something isn’t going to work then we need to
be able to drop it and move on to other promising ideas.
This approach is only possible if we understand thevalue of failing. I tell our R&D department staff thatrecognizing that something will not work is also a learning
experience. Failure is a result that can be built on. I wantthem to bring in and try as many new ideas as possible.

Intellectual property value is a combination ofbusiness strategy and R&D strategy

Value Creation
Strategy

Value Creation

The Basis of
Value Creation

effective if our business, R&D, and intellectual property
strategies are consistent and fully integrated. In eachbusiness department, we have appointed staff to be thedepartment’s “intellectual property liaison person” to increase
communications with the Intellectual Property Department.
This increases staff literacy about intellectual property andavoids intellectual property risk at our operating sites.
TOYOBO’s expanding overseas business in recent years
has been accompanied by the Company submitting a growing
number of patent applications and patent assessments
overseas. We submitted roughly 15% more patentapplications overseas in fiscal 2019 over the previous year,
and we expect the pace to accelerate as we expand ouroperations overseas. Collecting information is also importantfor effective and efficient intellectual property activities
overseas. This is particularly true in China where the frequentchanges in systems related to intellectual property can have
major impacts on our business. For that reason, we have set
up staff in China to focus specifically on intellectual property
issues. We are also improving the efficiency of our patentassessments and other operations overseas by introducing
new digital technologies, such as AI and robotic process
automation (RPA), in the Intellectual Property Department.
We will continue to advance our R&D activities andintellectual property management with a long-term
perspective for accelerating the Company’s business growth.

Corporate Executive Officer
Controlling Supervisor of Intellectual Property Department,
and Corporate R&D Planning Department
Controlling Supervisor of Research Center

Intellectual property strategy has two aspects: proactive andvigilant. On the defensive side, the main purpose is to protect
our technological domain and fend off rival companies fromentering our markets. We defend our technologies by holding
numerous patents designed to protect against othercompanies’ patent applications compromising ourtechnological domains. This seems to be an effective strategy
because a 2018 survey by Patent Result of patent infringementin the fiber, paper, and pulp industry found that infringement
on TOYOBO patents was the second most common
reason stipulated for our competitors’ patent applications
being rejected.
The offensive aspect of our intellectual property strategy
is to use our unique intellectual properties to create value.
These offensive and defensive strategies can only be

TOYOBO REPORT 201924

Value Creation

Films & Coatings

Reducing food loss withfood packaging film
Currently, around 30% of the world’s food is thrown away without being eaten. But many people are still faced with starvation.
TOYOBO Group provides films that enhance the shelf life of food, which in turn helps to reduce the volume of discarded food.

Related SDGs

There’s not enough food,but it’s still thrown away...

25

One third of food producedfor human consumption isthrown away.

Among the global population of
approx. 7 billion people, around
800 million are suffering fromsevere hunger or malnutrition

Source: Food loss reduction data published by theConsumer Affairs Agency

Source: Japan Association for International
Collaboration of Agriculture and Forestry“Current State of Food Security & Nutrition, 2017”

TOYOBO REPORT 2019

Fiscal 2019
Business Overview

Value Creation
Strategy

Value Creation

The Basis of
Value Creation

Expansion of ready-made meal market
underpins growth in film demand

TOYOBO film proves highly effective
for food storage

In recent years, the ready-made meal market has grown along withan increase in single-person and elderly households, as well as
women’s increased participation in the workforce. Against thisbackdrop, demand for food packaging film has also increased,
especially for microwave oven-compatible products and productsthat can be stored for a prolonged period.

TOYOBO Group’s transparent vapor-deposited barrier film
ECOSYAR™ demonstrates outstanding gas barrier characteristics,
making it ideal for food storage. As no metals are vapor deposited,the film is also suitable for heating in microwave ovens.

The ready-made meal and restaurant market

Comparison of oxygen permeability with base film

(Trillion yen)

(ml/m2dMPa)

40

1,400

1997
1,200

29.1

Restaurant Industry

23.9
20

19.3
10

0

Ready-Made
Meal Industry

3.6

1.1

1985

6.0

Oxygen permeability

30

PET film withoutbarrier layer

1,000
800
600
400

ECOSYAR™
barrier layer coated
PET film

200

1990

1995

2000

2005

2010 2013
0

Source: MAFF, “Trends of Food Industry”

Base film

ECOSYAR™
ECOSYAR™ is used in packaging
food with long shelf life.

ECOSYAR™

TOYOBO REPORT 201926

Value Creation
Related SDGs

Huge volume of waste,
but only finite resources
Each year, a volume of waste
equivalent to 420,000 25m
swimming pools is discarded.

420,000
Source: Japan Environmental Management Association for Industry (JEMAI),
Resource Recycling Promotion Center website
http://www.cjc.or.jp/j-school/a/a-2-2.html

Films & Coatings

Using recycled materials
to reduce waste
In Japan, more than 400 million tons of waste is discarded annually. In order to help reduce this large volume of waste,
TOYOBO Group is promoting 3R initiatives*, including providing films that use recycled materials.
* The reduction of waste through the “3 Rs” of recycling – Reduce, Reuse, Recycle.

Recycling of PET bottles at high level

Film that uses 80% recycled resins

Japan has a much higher recycling ratio for PET bottles (bottles
made of polyethylene terephthalate) than the United States andEurope. This trend looks set to continue in future, and demand forthe recycling of PET bottles is forecast to remain high.

TOYOBO Group sells products employing recycled materials, including
Crisper®, a PET based synthetic paper, and CYCLE CLEAN™, afilm of recycled PET resin. Notably, CYCLE CLEAN™ uses 80%
recycled PET bottle resin.

Trend in PET bottle recycling ratio in Japan, the US and Europe

CYCLE CLEAN™ recycled material ratio

(%)
100

84.8
80

89.9
82.2

83.5

85.8

85.0

85.8

82.6

86.7

Ratio of recycledresin is world’s
highest, at

83.9

60

41.8

40

20.9

20
0

2009
Japan

27

2010

2011

2012

EuropeUSTOYOBO REPORT 2019

2013

2014

2015

2016

2017

2018

(FY)

Source: The Council for PET Bottle Recycling

80%

Fiscal 2019
Business Overview

Value Creation
Strategy

Value Creation

The Basis of
Value Creation

TOYOBO REPORT 201928

Value Creation

Mobility

Supplying plastics to
reduce vehicle weightand cut CO2 emissions
CO2 emissions have given rise to a multitude of issues, including climate change, and emissions regulations are becoming
more stringent year on year. TOYOBO Group supplies engineering plastics, which help to make vehicles more lightweight andreduce their CO2 emissions.

Related SDGs

Cars are convenient,but the cost of this is global
warming
Around20% of CO

2 emissions areproduced by the transportation sector.

CO2

CO2

CO2

CO2

CO2

CO2

CO2

CO2

CO2

CO2

Source: Japan Automobile Manufacturers Association report on global
warming countermeasures in the transportation sector

29

TOYOBO REPORT 2019

Fiscal 2019
Business Overview

Value Creation
Strategy

Value Creation

The Basis of
Value Creation

Automotive fuel economy regulations arebeing tightened around the world

Engineering plastics contribute to vehicle
weight reduction

Climate change is a critical issue facing society, which the countriesof the world need to tackle together. Regulations governing thefuel efficiency of automobiles are becoming increasingly stringent incountries and regions worldwide, as a means of promoting the
reduction of CO2 emissions – the underlying cause of global warming.

Replacing automotive components with plastics that are lighter thanmetal leads to enhanced fuel economy and cuts CO2 emissions.
TOYOBO is contributing to the realization of lighter vehicles throughproducts including high-strength Quick Form® and the thermoplastic
polyester elastomer PELPRENE™.

Fuel economy trends in compact cars around the world

Engineering plastics used in TOYOBO’s concept car

Liters per 100km,
as standardized by the NEDC*
12

10

8

Algeria
BahrainChile
China
Côte d’Ivoire
Egypt
Ethiopia
EU
Georgia
Indonesia
Japan
Kenya

MauritiusMontenegro
MoroccoPeru
Philippines
Tunisia
UgandaUruguay
United States of America

Outer roof outer
Cooling pipe

Spoiler lamp

Door cushion
Turn signal
Airless tire

6

4

Multi-functional nylon resin GLAMIDE®
2

High-performance, thermoplastic stampable sheet Quick Form®
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025

Source: UNEP analysis for GFEI

* New European Driving Cycle

Thermoplastic polyester elastomer PELPRENETM
Molding polyester resin VYLOPETTM•TOYOBO REPORT 201930

Value Creation

Mobility

Supplying fabrics forlife-saving airbags
Automobiles are found in every part of the globe, supporting the lives of a large number of people as wellas industry. However, with the spread of automobiles, the risk of traffic accidents has increased. TOYOBOGroup supplies high-performance airbag yarn and fabrics, helping to ensure passenger safety.

Related SDGs

Traffic accidents cost lives
Traffic accidents are still common worldwide.

No. of accidents: approx.

No. of deaths/injuries: approx.

3 million

4.08million

Source: Cabinet Office website
https://www8.cao.go.jp/koutu/taisaku/h29kou_haku/zenbun/keikaku/sanko/sanko02.html
Compiled by TOYOBO from 2015 data for
the United States, Germany, United Kingdom, France, Sweden, Italy, Japan

31

TOYOBO REPORT 2019

Fiscal 2019
Business Overview

Value Creation
Strategy

Value Creation

The Basis of
Value Creation

Airbag demand is steadily growing

Integrated production from yarn to fabric atfive global bases

The airbag market has been expanding in recent years, including thecontinued adoption of side airbags and curtain airbags. In future,annual growth in the market is estimated at 6–7% owing torising safety awareness, including the mandatory installation of
airbags, and the shift to electric and self-driving vehicles.

TOYOBO and PHP Group carry out integrated production of
airbag yarn and airbag fabric. Our supply structure extends from
Asia to North America and Europe, and we have establishedourselves as a global player in this field, being manufacturer tointegrate the production of yarn and fabric.

Trend and forecast for the airbag yarn market (TOYOBO estimate)

TOYOBO and PHP Group global bases(thousand tonnes)
450

(%)
25

Europe market
PHP Fibers GmbH

400
20

350
300

China market
PHP-ShenMa Air Bag Yarn Marketing Co. Ltd.
TOYOBO AUTOMOTIVE TEXTILES(CHANGSHU) CO., LTD.

15

250
200

Americas market

10

150
100

Japan (Asia) market
TOYOBO CO.,LTD.

5

PHP Fibers Inc.
TOYOBO INDUSTRIAL
MATERIALS AMERICA, INC.

50
002018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

DriverPassenger
YoY growth (%)

Side

Knee

Thailand (Asia) market
TOYOBO INDUSTRIAL MATERIAL (THAILAND) LTD.
TOYOBO SAHA SAFETY WEAVE CO.,LTD.

Curtain

TOYOBO REPORT 201932

Value Creation

Healthcare & Wellness

Supply of enzyme
gives reassurance todiabetic patients
The number of diabetic patients is increasing each year, and the number of patients who measure their own
blood sugar level under their physician’s guidance is also increasing. Against this backdrop, TOYOBO Grouphas developed a new enzyme that is used in the sensors of equipment for self-monitoring blood glucose,which excels in both accuracy and stability.

Related SDGs

Diabetes increases the riskof other diseases
Cerebral
infarction

RetinopathyGumdiseaseAngina,myocardial
infarction

Nephropathy

Diabetes carries the riskof various other diseases
arising concurrently.

Neuropathy

Foot ulcer
Foot gangrene

Source: Japan Association for Diabetes Education and Care website (in Japanese):https://www.nittokyo.or.jp/modules/beginner/index.php?content_id=433

TOYOBO REPORT 2019

Fiscal 2019
Business Overview

Value Creation
Strategy

The Basis of
Value Creation

Value Creation

Number of diabetic patients tops 400 million
worldwide
According to a WHO survey carried out in 2014, the number ofdiabetes patients exceeds 400 million worldwide, and will increase
to 600 million by 2040. As a consequence, the market in products
for the self-monitoring of blood glucose is also expected to grow.

Number of adults with diabetes(millions)
500

West Africa
Central Africa
Southern Africa
East Africa
Middle East and north Africa
Central Asia
South Asia
Southeast Asia
East Asia
High-income Asia PacificMelanesia
Polynesia and Micronesia

450
400
350
300

Caribbean
Andean Latin America
Central Latin America
Southern Latin America
High-income English-speaking
countries
Northwestern Europe
Southwestern Europe
Central Europe
Eastern Europe

250
200
150
100
50
0

1980

1985

1990

1995

2000

2005

2010

2014

Source: Lancet 2016; 387: 1513-30

Enzyme excelling in accuracy and stability
TOYOBO Group has developed the FAD-GLD enzyme for use inblood glucose self-monitoring sensors, and has obtained numerous
patents in Japan and overseas. It is a raw material for sensors thatenable diabetic patients to measure their blood sugar levels in
medical institutions or at home. It has greater accuracy and stability
than conventional enzymes.
Comparison of heat stability
with existing products(processed at 50°C for 15 min.)
Survival rate (%)
120
100
80
60
40
20
0
Existing products

FAD-GLDTOYOBO REPORT 201934

Value Creation
Number of dialysis patients is increasing
year on year

Playing our part in dialysis treatment withsafe and trusted quality

The number of dialysis patients worldwide is increasing with eachpassing year. Whereas the number of patients was 2.0 million in
2010, this had risen to 3.2 million by 2017. The increase has been
especially marked in emerging countries, which account for almost
50% of the total.

TOYOBO continues to supply dialysis membranes with outstanding
filtering performance, using advanced membrane production technologythat generates micropores. In doing so, our aim is to realize a better daily
life for dialysis patients. Waste is removed more efficiently by using thinner
membranes, which also allows the equipment to be more compact.

Number of dialysis patients (TOYOBO estimate)

Hollow fiber membrane for artificial kidneys(thousand people)
3,000
2,500
2,000
1,500
1,000
500
0

2010
America

EU

2012

2014

2015

Japan

China

Others2016

2017

Healthcare & Wellness

Artificial kidney hollow fiber
supporting dialysis patients
In the event of a decline in kidney function and chronic renal failure, artificial dialysis is carried out to filter
the blood by means of an artificial kidney. TOYOBO Group manufactures the hollow fiber membranes usedin these artificial kidneys, supporting the lives of dialysis patients.
Related SDGs

The physical burden ofchronic kidney disease
Fatigue

Generalized
convulsions

Loss ofappetiteHeart failure

Without dialysis, there is a dramatic
decline in bodily functions

NauseaShortnessof breath

Vomiting

HeadacheBreathingdifficulty

Source: Japan Association of Kidney Disease Patients website (in Japanese):https://www.zjk.or.jp/kidney-disease/symptom/

35

TOYOBO REPORT 2019

PulmonaryedemaFiscal 2019
Business Overview

Value Creation
Strategy

Value Creation

The Basis of
Value Creation

TOYOBO REPORT 201936

Value Creation

37

TOYOBO REPORT 2019

Fiscal 2019
Business Overview

Value Creation
Strategy

Value Creation

The Basis of
Value Creation

Related SDGs

Usable water andfreshwater is a rare resource
The volume of freshwater found in ground water,rivers, lakes and marshes amounts toJust 0.8%
of all the water on the earth.

Source: Ministry of Land, Infrastructure, Transport and Tourism website (in Japanese):
http://www.mlit.go.jp/mizukokudo/mizsei/mizukokudo_mizsei_tk2_000020.html

Environment

Seawater desalination
membranes help toeliminate water shortages
Almost all of the water covering the globe is seawater. As a result, regions where freshwater is difficult touse are exposed to water shortages. TOYOBO Group supplies the membranes used in seawater
desalination facilities, thereby helping to eliminate water shortages in these regions.

Increased adoption of seawater desalination
facilities in the Middle East

Supply of proprietary high-performancematerial gives TOYOBO a large market share

The Persian Gulf region continues to see remarkable economic
development and rising living standards. The population is also
growing. As a result, securing drinking water as well as water forindustrial use is becoming an important issue, and the deployment
of seawater desalination facilities is ongoing.

TOYOBO Group’s hollow fiber type reverse-osmosis (RO) membraneelement HOLLOSEPTM performs desalination based on the principle ofreverse osmosis. By using cellulose triacetate – which excels inchlorine resistance – as the membrane material, the proliferation of
microorganisms can be inhibited through chlorine sterilization. In the
Gulf states, TOYOBO
The principle of hollow fibercommands a market
type reverse osmosis
share of large-scale
Pyrogens
desalination facilities
Bacteria
Ions
SS
exceeding 30%.
Organic matter

Seawater desalination capacity in the Middle East
(million m3/day)
30
25

Viruses

20
15
10
5
0

2001

2005

Thermal

SWRO (seawater reverse osmosis)

2010

2015

2020

2023

Source: GWI DesalData (Dec. 2018 Webinar materials)

TOYOBO REPORT 201938

Value Creation

Environment

Recovering VOCs fromemissions to prevent
environmental pollution
VOCs are found widely in places such as chemicals plants and painting/cleaning facilities. If they aredischarged untreated into the environment, they contaminate the air, water and earth, threatening our health.
TOYOBO Group provides systems that recover VOCs from emissions and wastewater and treat them by aprocess of concentration, thereby helping to prevent environmental pollution and save resources. We havesupplied more than 1,300 units over the past 30 years.

Related SDGs

VOCs contaminate theenvironment and threaten
our health
VOCs, and photochemical smog caused in part by VOCs,
are harmful for humans.

Contained in gasoline,
solvents, etc.

39

TOYOBO REPORT 2019

Emitted from factories
and automobiles

React with ultraviolet raysin sunlight, causing
photochemical smog

Fiscal 2019
Business Overview

Value Creation
Strategy

Value Creation

The Basis of
Value Creation

Growing demand for VOC treatment aroundthe world

Saving of resources as well as preventionof environmental pollution

Regions with high emissions of VOCs include the United States,
Australia and Russia, but volumes are decreasing in those andother countries. In recent years, environmental regulations havebeen tightened in markets where VOC emissions are on the rise,
including in China and Southeast Asia. This has led to demandfor high-quality VOC treatment technology.

VOC recovery systems employing the activated carbon fiber
K-FILTER ™ surpass existing equipment in terms of their VOC
adsorption/desorption performance. These systems facilitate solvent
re-use by recovering high-quality solvents. The HONEYROTOR™
apparatus operates by concentrating VOCs, thereby reducing thefuels required for incineration and helping to save resources.

Change in VOC emissions by region, 1980 to 2003

K-FILTERTM VOC recovery system

50
Other South Asia
India
Southeast Asia
Other East Asia
Japan
China

VOC emissions [1million tonnes]

40

30

20

10

0
1980

1985

1990

1995

2000

Source: National Institute for Environmental Studies

TOYOBO REPORT 201940

The Basis of Value Creation

ESG Management
ESG Management as a Support for Business Activities
TOYOBO Group’s philosophy of Jun-Ri-Soku-Yu is the starting point for our CSR activities. With this philosophy as thefoundation of our operations, we strive to provide products and services that are beneficial for society, and to enhanceboth our corporate and social value.
We have established the CSR Committee, chaired by the President, as the structure for promoting CSR activities. This
committee handles the integrated understanding and oversight of our CSR initiatives in relation to all stakeholders.
TOYOBO Group will continue to actively fulfill its social responsibility and remain a company that people trust, while
helping to build a sound and sustainable society.

TOYOBO Group’s Corporate Philosophy System

Principle

Jun-Ri-Soku-Yu (realizing prosperity by acting rationally)

The TOYOBO Group’s Charter of Corporate Behavior
The TOYOBO Group announced to the public our code of
conduct in the form of the TOYOBO Group’s Charter ofCorporate Behavior, which aims to help achieve the UN’s SDGs.

VisionWe will continue to be a Group that createsthe solutions demanded by people and the global
environment, through Materials + Science

Values
We do not fear change; rather,
we relish and create change
Challenge Reliability Collaboration

Commitment to ourselves (TOYOBO Spirit)
Challenge: Act Swiftly, Create, Execute

Reliability: Safety First, Customer Satisfaction, Factual Basis

Collaboration : Mutual Communication, Diversity, Providing Opportunities

At the TOYOBO Group, we contribute to the realizationof a sustainable society through the provision of
products and services that will create an affluent future.
And to continue being a corporation that people
trust, we will act with high ethical standards and social
common sense based on ten principles.
1. Contribution to asustainable society
2. Fair business practices
3. Communication withstakeholders
4. Respect for human rights
5. Earn customers’ trust andsatisfaction

6. Active employee participation
7. Engagement inenvironmental issues
8. Social contribution
9. Thorough crisis management
10. Responsibilities of the
management

Identifying Material Topics
Companies need to tackle a great number of social issues,
including environmental problems such as climate change andresource recycling, as well as labor and human rights issues.
In the past, TOYOBO Group has examined these social issues
from the perspectives of “opportunity” (how they contribute toStep 1
Consideration ofopportunities and risks

our business growth) and “risk” (how they affect the continuity ofour business).
In future, we will identify the priority issues based on asystematic appraisal of these social issues, opportunities andrisks (materiality), and incorporate this in our business planning.

Step 2
Verification by experts andstakeholders

Step 3
Incorporation inbusiness plans (KPIs, etc.)

Establish ESG management underpinning the basis for long-term value creation

41

TOYOBO REPORT 2019

Fiscal 2019
Business Overview

Value Creation
Strategy

The Basis of
Value Creation

Value Creation

E nvironmental Policy & Activities

Preventing Global Warming

Basic Approach

our fiscal 2031 targets, but we are setting new targets tomake further reductions.

The impact of climate change associated with global warming
has become apparent with an increase of natural disasters
such as typhoons and localized torrential rainfall, as well
as changes in the ecosystem due to “subtropicalization”
of the climate.
TOYOBO Group recognizes the serious risk posedby climate change to the continuation of business activities,
and we are endeavoring to cut greenhouse gases. As activities
aimed at saving energy during production have a significant
benefit, we are promoting measures from a medium-to-longterm perspective.

* Using clean city gas as the fuel, a system that generates steam and hot water withthe waste heat produced during electricity generation, and uses this for manufacturing
processes, hot water supply and heating/cooling, etc.

Gas cogeneration facilities at Japan Exlan Co., Ltd.

Activities to cut greenhouse gases during
production

Activities to cut greenhouse gases during
logistics

We are aiming for a 17% reduction in emissions ofgreenhouse gases during production by fiscal 2031
compared with fiscal 2014.
We are promoting energy saving by switching to highly
efficient equipment and introducing energy recovery systems,
and aim to reduce emissions of greenhouse gases. We also
continue to install gas cogeneration facilities*, with Group
companies Toyoshina Film Co., Ltd. and Japan Exlan Co., Ltd.
introducing these facilities in fiscal 2019.
As a result of these initiatives, we have already achieved

We are aiming for a 1% year-on-year reduction in emissionsof greenhouse gases during logistics each year.
To achieve this, we are taking measures such as
shortening the transportation distance by using the ports
closest to our business sites and factories, and reducing thenumber of running vehicles through efficient loading of cargo
and bulk transportation. For materials shipped from overseas,in fiscal 2019 our Inuyama plant in Aichi Prefecture switched fromusing Kobe port to Nagoya port, the closest port to the plant.

Important initiatives and results
27% reduction in greenhousegas emissions during production
activities
Fiscal 2019 emissions of greenhouse gases during
production activities were about 900,000 tonnes,
27% lower than the reference fiscal year (fiscal 2014).
As well as day-to-day energy-saving activities,
there has been a significant contribution fromupgrading to high energy efficiency equipment andinstalling gas cogeneration facilities.
In fiscal 2019, we completed calculation of
the emissions volume in the supply chain (Scope3
emissions), with the support of the Ministry of
the Environment.

Supply chain emissions
volume and ratio (Scope1-3)
Scope3Emissions ratio(Scope3 categories 1-15)
Emissions ratio(%)

Category

52%

Scope139 %Scope29%

1

Purchased products and services

55

2

Capital goods

73

Fuel and energy-related activities
not included in Scope1 or 2

3

4

Transportation, shipping (upstream)

4

5

Waste generated from operations

1

6

Business trips

07

Employee commuting

0

11 Use of sold products

30

Scope1: Direct greenhouse gas emissions by the reporting company itself
Scope2: Indirect emissions from the use of electricity, heat, or steam supplied by others
Scope3: All other indirect emissions

TOYOBO REPORT 201942

Management ofChemical Substances
Basic approach

Chemical substance management activities

TOYBO Group endeavors to manage chemical substances
appropriately throughout the product lifecycle (research,development, design, manufacturing, sale, use, disposal),in order to protect the global environment, prevent accidents,
ensure workers’ health and safety, and ensure product safety.

Supply chain management, which started with the European
Union’s legislation on chemical substances, has also cometo be required in Japan following the Act on the Evaluation ofChemical Substances and Regulation of Their Manufacture,etc. (Chemical Substances Control Act), as well as otherregulations relating to the management of chemical
substances. Additionally, the Globally Harmonized Systemof Classification and Labeling of Chemicals (GHS) has beencreated by the United Nations.
In view of this situation, TOYOBO has introduced a chemical
substance management system covering procurement
through to product manufacture and sale, in order to realize
green procurement while providing accurate and rapid support
to our customers. We employ this system to investigate theusage status of regulated substances and survey the chemical
substances contained in products. The system also supports
the creation of safety data sheets (SDS) for chemical substances.
Given the global nature of TOYOBO Group’s operations,
we have created a database of chemical substance-related
legislation in Asia, Europe, North and South America.
Furthermore, in order to identify and mitigate chemical
substance risk, we have established rules concerning
matters including the replacement/reduction of hazardous
chemical substances, maintenance of the work and surrounding
environments, and the management of chemical substancesin products. In this way, we are striving to ensure proper
management.

Chemical substance management structure
For appropriate management of chemical substances,
TOYOBO Group has established a management systemat each business site. Each division supervises theactivities of the business sites and group companies
under their jurisdiction.
In addition, we have established a “TOYOBO
Chemical Substance Management Classification” basedon legal regulations inside and outside Japan as well as
our customers’ requests. This classifies the chemical
substances we handle into five levels, and the management
procedures are specified for each level or “rank”.
Substances in rank A and B are examined based ona risk assessment, risk avoidance measures are enacted,
and if the risk is deemed tolerable, the substance can behandled. We continue to implement efficient use andreplacement of the rank A and B substances we are
currently using, and are working to reduce the overall
usage volumes of the relevant chemical substances.
TOYOBO Chemical Substance Management Classification
Rank

Management Category

Governing Legislation, etc.

A

Substances requiring
particularly strict
management

Chemical Substances Control Act*1, Industrial
Safety and Health Act, Poisonous and Deleterious
Substances Control Act, Act on the Protection of the
Ozone Layer, Act on the Prohibition of Chemical
Weapons, POPs*2, PIC*3, etc.

B

Substances requiring
strict management

Chemical Substances Control Act, PRTR*4,
Industrial Safety and Health Act, Poisonous andDeleterious Substances Control Act, etc.

C

Substances requiring
strict exposure
prevention measures

Chemical Substances Control Act, PRTR,
Industrial Safety and Health Act, Poisonous andDeleterious Substances Control Act,
Fire Service Act, etc.

D

Substances requiringexposure prevention
measures

PRTR, Industrial Safety and
Health Act, etc.

E

OthersOther than A–D*1 Chemical Substances Control Act: Act on the Evaluation of Chemical Substances andRegulation of Their Manufacture, etc.
*2 POPs (treaty): Prevention and reduction of Persistent Organic Pollutants (POPs)*3 PIC (treaty): The Prior Informed Consent Regulation (trade)*4 PRTR: Pollutant Release and Transfer Register

43

TOYOBO REPORT 2019

Reducing emissions of substances coveredby the Pollutant Release and Transfer Register(PRTR)TOYOBO calculates and reports the release and transfer
volumes of the applicable chemical substances for eachbusiness site, and analyzes the overall results publishedeach year. We use this information to reduce our own
release and transfer volumes.
We are reducing our release volumes through measures
including the following: improving and updating manufacturing
facilities and systems, improving operating conditions,installing equipment to remove the applicable substances,
replacing raw materials and auxiliary raw materials. We willcontinue to implement activities aimed at reducing release
volumes.

Fiscal 2019
Business Overview

Value Creation
Strategy

The Basis of
Value Creation

Value Creation

Resource
Circulation

Green Products

Reducing the industrial waste landfill rate

Mechanism for certification ofgreen products

TOYOBO Group defines zero emissions as “a volume oflandfill waste that is less than 1% of the total waste volume”,
and we continue working to realize effective use and circulationof resources.
The three R's (Reduce, Reuse, Recycle) are thebasis for the effective use of resources. TOYOBO Groupis engaged in initiatives such as melting down film scrap
at the site of production for re-use as raw material(depending on the brand of film). Even if “3R” processing
is not possible and material is incinerated, we select andappoint a contractor to recover the incineration heat andrealize its effective use.
Through such initiatives, TOYOBO Group continues
to achieve zero emissions. However, the landfill rate at
Group companies has worsened over the past 2–3 years.
This is because it is becoming difficult to use certain industrial
waste products effectively at some Group companies.
Therefore, we are working to make improvements by learningfrom other Group companies where similar waste products
arise and are used effectively.

As clearly stated in our Charter of Corporate Behavior,
TOYOBO Group strives to save energy as well as reduceand re-use resources, and to develop products andtechnologies that help mitigate our environmental impact.
The mechanism for defining and evaluating these “products
and technologies that help mitigate our environmental
impact” is the ECO-PARTNER SYSTEM™. Under thissystem, assessments are made based on an Eco-Review
System in relation to our products and technologies, forevery stage from raw material through to disposal. Areas
covered by the assessments are “prevention of global
warming,” “reduction in harmful chemical substances,”“conservation of materials,” “reduction in waste,” and “otherenvironmental contribution”. Those products certified ashaving an assessment above a certain level are designatedas ECO-PARTNER SYSTEM™ green products.
As the Eco-Review is carried out at each stage from
R&D through to commercialization, issues identified at the
R&D stage as requiring improvement from an environmental
protection perspective are improved at the subsequent
Eco-Review implementation stage. Consequently, thissystem allows for environmentally friendly improvements to
be made while developing products and technologies.

Important initiatives and results
Ratio of ECO-PARTNER SYSTEM™
product sales increases to 27.7%
Since fiscal 2007, TOYOBO CO., LTD has implemented
an Eco-Review System. As of March 31, 2019, there
were 428 products and technologies certified and registeredas ECO-PARTNER SYSTEM™ products under this system(including products subject to non-disclosure agreements).
Our goal is to increase the ratio of ECO-PARTNER
SYSTEM™ product sales to 30% of total sales by fiscal
2031. In fiscal 2019, the ratio was 27.7%.
Going forward, we will roll out this system to ourGroup companies as well.

ECO-PARTNER SYSTEM™ product sales(¥ billion)

Total sales
ECO-PARTNER SYSTEM™ sales
ECO-PARTNER SYSTEM™ sales ratio

219.0 226.2 216.8 223.8 221.2

24.8

25.3

25.7

208.7

(%)

196.4 202.9 199.3

26.2
26.7

27.8

27.7

22.6

23.4

49.6

53.0

53.8

56.7

56.9

54.6

52.5

56.3

55.2

2011

2012

2013

2014

2015

2016

2017

2018

2019

30.0

2031 (FY)(target)TOYOBO REPORT 201944

S ocial Policy & Activities

Human Resource Management

Basic approachto developing human resources
TOYOBO Group considers human resources to be our mostimportant asset. We support the growth of each and every
one of our employees, who have a diversity of characteristics
and opinions. We believe that the continuation and developmentof the Group as a whole can be achieved by building anenvironment in which they can flourish within the company
and realize their own potential.

Nurturing candidates
for executive management
To nurture the next generation of managers, TOYOBO strives
to ensure that our employees acquire a broad knowledge andenhance their skill set through rotation, including overseas
assignments, from an early stage. During that process, we
single out candidates for executive management and hone their
managerial skills. In accordance with a succession plan, they
assume positions as managers in the business units and in
the planning and development departments as well.
In this way, we aim to continually develop our business by
nurturing human resources with a long-term view to the future.

Developing global human resources
TOYOBO Group implements “Short-term Overseas BusinessTraining” in which around 10 employees in Japan – mainly inthe 30-39 age group – are sent overseas for training each year,
split into two separate groups (first and second half of the year).
This motivates younger and mid-career employees toparticipate in TOYOBO’s global business, and represents amajor opportunity for them to further their careers.
In addition, local candidates for management of oversea
business from overseas offices are selected to undergo
training in Japan twice each year. This aims to enhance theirunderstanding of TOYOBO and deepen interaction withJapanese employees.

Training for local employees from overseas offices

Message from HR Development Officer
People are our most important asset.
We develop personnel who can practice“Creating Shared Value” (CSV).
TOYOBO develops human resources based on a training system categorized by job
level, job type and objective, from new hires through to executives. Over our long history,
we have fostered an approach of valuing “people” – our most important asset – andthis is an approach that is now shared throughout the Group.
Now, we are putting our maximum effort into nurturing the next generation ofmanagers, who will help to realize our growth strategy. Selected personnel fromthroughout the company are sent to business schools or undergo internal training
programs. At the same time, we are actively engaged in initiatives to train mid-careerhires and promote the participation of women in the workforce, focused on
encouraging diversity. Extensive educational and training activities are also carriedout at domestic Group companies, and Japan-based training for local employees isheld for select personnel from overseas business sites. Through these initiatives, wedevelop personnel who can put into practice TOYOBO’s corporate philosophy of
Jun-Ri-Soku-Yu (realizing prosperity by acting rationally); or to use a more contemporary
expression, people who can create shared value.

45

TOYOBO REPORT 2019

Masakatsu Shirai
General Manager, Supervisor of Human
Resources Department

Fiscal 2019
Business Overview

Basic approach to diversity
TOYOBO Group believes that personal and organizational
growth is achieved through a process of mutual respect among
our employees, with their differing work styles, careers, gender,
nationality, race, and beliefs, and through cooperation to achieve
our shared objectives.
We respect different opinions and a wide range of values,and cooperate to achieve ambitious goals together.

Promotion of work-life balance

Value Creation
Strategy

The Basis of
Value Creation

Value Creation

have implemented a program to increase the number of daysof leave. In addition, we hold a No Overtime Day at least oncea month, so that employees can spend quality personal time
together with family and friends, and we also view this as anopportunity to enhance creativity.
In fiscal 2020, we introduced a Teleworking scheme athead and branch offices, which provides for a more flexible
work style according to each employee’s life stage.

Employees Taking Childcare Shortened Work Hour Program(employees)

TOYOBO has introduced schemes that go above and beyond
the legal requirements, including the Childcare ShortenedWork Hour Program and Nursing Care Leave, and we also
provide a Flextime system. From fiscal 2020, Childcare Leave
offers five days of paid leave, and we are also encouraging
male employees to take childcare leave.
We are also engaged in work style reform, so that ouremployees can work with renewed efficiency and achieve agood balance between work and personal life (synergistic
effect). Initially, we introduced a 15-Minute Shortened Work
Hour Program at head and branch offices in fiscal 2018, andat the Research Center in fiscal 2019, and at other offices we

Until third year of elementary schoolChildren aged under 3

75
65
50
40

18

2015

2016

2017

2018

2019

(FY)

Initiatives to promote women in the workforce, and results
As the first step to employing a greater diversity of humanresources, TOYOBO established the Female Empowerment
Promotion Group within the Human Resources Department in2015. The Group has been promoting the employment of
women and their career development. We have held seminars
for managers, vision creation seminars, female leader
development seminars, etc., on a continuous basis, in order torealize a change of mentality among our employees. In April
2019, we launched a trial Mentor Program for women, whichfurther supports them in developing their career concept.

TOYOBO has introduced a babysitter support system toassist with childcare, which provides the full cost of babysitting
when an employee is on a business trip. The number of users
has steadily increased.
In April 2018, we established a nursery inside the
Research Center (Otsu City, Shiga Pref.) for employees withchildren. The nursery not only enables employees to return
to work early from childcare leave and make their return towork easier, but also lays the platform for women to feel more
comfortable with planning a family.

Proportion of Female Employees withManager-Level Qualifications(employees)

Total

2015

Ratio (%)

2016

2017

2018

2019

(FY)

TOYOBO Nursery School

TOYOBO REPORT 201946

Quality Management

Basic approach
TOYOBO Group conducts all of its business activities basedon our corporate philosophy of Jun-Ri-Soku-Yu (realizing
prosperity by acting rationally), and we approach quality
management in the same way.
We implement quality management activities under the
motto “TOYOBO’s way of manufacturing,” based on always
taking the customer’s standpoint, accurately identifying thecustomer’s needs, and providing satisfaction to the customer.

Quality assurance activities
The basis of “TOYOBO’s way of manufacturing” is toconsistently put ourselves in the customer’s position and supply
only what they really want. Besides products, this includes
the provision of incidental services and solutions, and we aim
to help customers resolve difficulties and issues, and realize
their wishes.
To achieve this, all staff have shared access to the Quality
Assurance Manual, which describes the basic approach andcode of conduct for all employees when implementing
TOYOBO Group development, production and sales activities.
In addition, the Quality Assurance Guidelines describe activities
with the aim of developing a system that guarantees quality.
A Quality Assurance (QA) system is established for eachproduct and service, so that quality and product safety canalways be guaranteed at each stage. Additionally, checks arerepeatedly carried out by business supervisors, related internaland external parties, and experts, from their individual
perspectives, to ensure that no incidents occur in the market.

Product safety promotion activities
TOYOBO Group has established a “PL/QA Committee” as astanding committee with overall responsibility for productliability (PL) and QA. This committee puts in place systems toensure product safety in relation to products and technology,
and to facilitate appropriate responses to PL or otherquality-related incidents. As well as efficient corporate
activity and maintaining/enhancing the Group’s standing insociety, the committee strives to increase customers’ trustand confidence in the TOYOBO Group, while making sure thatits activities are in keeping with the times. It also conducts
PL/QA assessments to verify and improve Product Safety(PS) activities in each department and group company.
Moreover, the committee establishes criteria for assessing
PS and PL risk, and based on these criteria, it carries out

47

TOYOBO REPORT 2019inspections at each stage, from product development throughto sale. By addressing risk in advance, the committee works
to mitigate risks pertaining to customers and employees.
All possible measures are taken to ensure product safety,
and training drills are also performed based on PL incident
scenarios.
Product safety remains a crucial theme throughout thewhole of TOYOBO Group, and we will continue to mitigate
risk as much as possible and fulfill our social responsibility.

TOYOBO Group PL Response System
TOYOBO Group Basic Policy on Product Safety
PolicyPL/QA Committee

Deliberation/
determination of
product safety measures

PL/QA Promotion Committee

Implementation of
product safety measures

PL/QA Assessment

Bioethics Review Committee
Review of product safety

PS Review Board
PL Response Drill

PL Response DrillFiscal 2019
Business Overview

Value Creation
Strategy

Value Creation

The Basis of
Value Creation

Supply Chain Management

Basic approach
TOYOBO Group has established an appropriate trading policy
and conducts procurement/logistics responsibly, so as tosupport the development of a sustainable society.
In October 2018, we revised our CSR Procurement
Guidelines in order to achieve the SDGs within the supply chain,including legal compliance, fair trading, respect for humanrights, and consideration for the environment.

CSR Procurement Guidelines
1. Promote CSR and engage proactively in social contribution
2. Maintain and strengthen compliance (including with laws andregulations), fair trading, corporate ethics
3. Maintain and strengthen environmental activities
4. Guarantee quality and safety in the supply of products
5. Respect human rights
6. Disclose information to stakeholders and engage with them ina timely and appropriate manner, and maintain and strengthen
information security measures

CSR questionnaire
We conduct a questionnaire among our key business partners,
based on the CSR Procurement Guidelines. This allows us
to verify the status of their CSR activities, while enabling themto deepen their understanding of CSR activities.

Trading fairness and transparency
We take a rigorous approach to ensuring fairness andtransparency, based on sound trading. We do not give or
accept gifts or hospitality in order to secure unjust profit orpreferential treatment from our business partners, and havestrengthened our checking system to ensure that actions thatraise suspicion do not occur.

Response to natural disasters
In recent years, various areas of Japan have experienced
significant damage from earthquakes, typhoons and sudden
localized rainstorms. We have gained knowledge in the processof responding to these events, and aim to realize even morestable procurement and logistics.
As part of our Business Continuity Plan (BCP), we areworking to identify and manage risk throughout the supply
chain. For procurement, we are looking to procure raw

materials from multiple regions, and for logistics, we areestablishing alternative transportation means and routes incollaboration with logistics operators.

Green procurement
We prioritize procurement of raw materials with a low
environmental impact, and work with business partners whotake a proactive approach to protecting the environment. At
the same time, we are promoting green procurement to help
build a sustainable society. We ask our business partners toprovide information about the chemical substances containedin products, as follows.
(1) That the material does not contain any of the prohibited
substances specified by TOYOBO.
(2) That the content of hazardous substances specified by
TOYOBO has been identified.
In fiscal 2019, we revised our “Chemical Content
Information Sheet” based on the information sharing scheme“chemSHERPA”, developed by Japan’s Ministry of Economy,
Trade and Industry (METI), and asked our business partners
to carry out a survey. For general purchased goods, we arepromoting green purchasing with the use of environmental
labels.

Resolving social issues in logistics
To resolve social issues in logistics, we are pushing forwardwith initiatives to reduce our environmental impact and reformthe logistics work style.
To reduce our environmental impact, we are shortening
the transportation distance by using the ports closest to ourbusiness sites, actively using sea and rail transport due to theirlower CO2 emissions (modal shift), and improving loading
efficiency. We are also working to share logistics and storage
with other companies (including joint shipment, making useof returning trucks, securing joint storage space), and areencouraging the introduction of systems that enablevisualization of the logistics situation.
Concerning work style reform, we conducted a surveyof the state of unloading for each delivery destination, in orderto improve the working environment of truck drivers and cargohandlers. This revealed issues including long waiting times
and manual handling of heavy cargo loads. We are currently
working to make improvements here, by shortening waitingtimes and eliminating manual cargo handling (lightening theburden of unloading by switching from bulk loading to use of
pallets).

TOYOBO REPORT 201948

Disaster Prevention & Safety

Basic approach
TOYOBO Group is striving to achieve zero accidents
based on the principles and activities set out in the“TOYOBO Group Basic Policy on Health & Safety.”
Health & Safety Philosophy
Based on the principle that ensuring health and safety is an
important prerequisite of corporate activities, we areworking hard to ensure the safety of our employees andimprove hygiene, in accordance with a spirit of respect forhuman dignity, while also actively promoting better health.
In this way, we aim to create a bright and happy workplace
and a prosperous society.

Disaster prevention initiatives

Basic Policy on Health & Safety• We will work to achieve zero accidents by improving safety
and security in the workplace• We will work to realize a comfortable, employee-friendly
workplace by enhancing hygiene and promoting the healthof our employees• We will work to realize a prosperous community and society
with which we can coexist, by observing social rules and norms

Safety management system
TOYOBO has established a Safety Promotion Committee
under the Global Environment and Safety Committee topromote safety and disaster prevention activities. The
committee members conduct safety and environment
assessment of our business sites and plants as well asGroup companies, in order to check the status of local
activities. In addition, affiliated businesses at the samebusiness site are promoting safety and disasterprevention activities together with our employees.
Frequency Rate of Injuries
Frequency rate of lost
workday injuries

1.06

TOYOBO Group

1.06

Disaster Prevention Lecture

Manufacturing industry average

Following the fire at TOYOBO’s Tsuruga Research andProduction Center, which broke out on September 6, 2018,
we reviewed our security and disaster prevention activities,
and the whole Group is making concerted efforts to regain
the trust of society.
Our main plants have undergone an assessment ofdisaster prevention equipment by a third-party expert, andwe received advice concerning early discovery of fires andfirefighting equipment aimed at more effective initial-stage
firefighting. Based on this advice, we have enacted the“Firefighting Equipment Guidelines.”
Going forward, we aim to enhance the functionality of
firefighting equipment at our main plants based on these
Guidelines. We will also revise the content of our training
drills so that they are more practical and enable us to protect
our workplaces in the event of a fire.
We have designated September 6 each year as
TOYOBO Group Disaster Preparedness Day so that thelessons learned from this fire are not forgotten, and wewill hold disaster prevention rallies at each plant toeducate our staff about disaster prevention.

1.20

1.15
1.02

0.75

0.71

0.74

2017

2018

0.58

0.38
2014

2015

2016

This refers to the number of accidents resulting in lost workday injuries per one million hours worked.
It includes employees of affiliated companies at the same business site.
The frequency rate of lost workday injuries is calculated annually on a calendar year basis (Jan–Dec).

49

TOYOBO REPORT 2019

Third party assessment of disaster prevention equipment

Fiscal 2019
Business Overview

Value Creation
Strategy

Value Creation

The Basis of
Value Creation

About the fire at the Tsuruga Research and Production Center
On September 6, 2018, a large fire broke out at TOYOBO’s Tsuruga Research and Production Center, in which
production facilities for airbag yarns, the three-dimensional cushion material BREATHAIR™ and nylon for clothing
were damaged. We apologize sincerely for the inconvenience and worry caused to all related parties.
Learning the lessons of this disaster, we will promote further disaster prevention activities and makeconcerted efforts as a Group to ensure early restoration of the facilities.

Overview of the fire

Recovery and reconstruction

Around 1:10 p.m. on September 6, 2018, a fire broke out
on airbag yarn production facilities at the TOYOBO's
Tsuruga Research and Production Center in Fukui
Prefecture. Following discovery of the fire, a call for
firefighting was immediately put out and initial-stage
firefighting was undertaken. However, all personnel were
evacuated due to dangerous levels of smoke. Firefighting by
the public fire service then commenced, but the flames were
fierce and it was not until 1:53 p.m. on September 7, thefollowing day, that they were finally brought under control.
The fire was extinguished at 5:30 p.m. the same day.
Although the fire caused no injuries to local
residents, employees or related parties, black smoke andan unpleasant odor spread throughout the local area,
causing much concern and inconvenience. In addition,
production facilities for airbag yarns, BREATHAIR™ andnylon for clothing were damaged. The area destroyed by
the fire totaled around 19,000m2.
The cause of the fire is believed to be as follows: aspark resulting from a short-circuit in wiring at the airbag
yarn production facilities caused nearby combustible
material to catch fire, and the fire then spread throughexhaust ducts.

TOYOBO provided explanations about the disaster to theauthorities and the local community, and also worked torestore operation of those facilities that escaped the fire.
Since the fire was triggered by a short-circuit in wiring,
we have installed wiring that prevents sparks in the eventof a short-circuit, as well as fire alarms in exhaust ducts
and a fire extinguishing system for duct.
In November 2018, we held a briefing for the local
communities, and in December restored operation at thepolymerization plant. In January 2019, we were able toresume production of the PBO fiber ZYLON™. In February,
we held a briefing for local residents, at which we explained
the circumstances of the fire and the countermeasures
we have taken. At the briefing, we gained residents’
understanding regarding the resumption of all remaining
facilities, and resumed operation in April.
We are currently removing the damaged facilities.
We will learn the lessons of this fire and work hard toreconstruct a safe plant.

Area of damage

Tsuruga Research andProduction Center

Aerial view of Tsuruga Research and Production Center(Source: Geospatial Information Authority of Japan; compiled by TOYOBO)

Enhanced disaster prevention training drill

TOYOBO REPORT 201950

Governance Policy & Activities

Management

Directors
Ryuzo Sakamoto

Masaru Watanabe

Hitoshi Ueno

Director* and Chairman

Director* and Corporate Senior Executive Officer
Controlling Supervisor of Environment & Safety, Quality
Assurance Operating Department, Finance Department,
Accounting and Control Department, Procurement & Logistics
Department, and Human Resources Department; Supervisor of
KAERU Project

Director and Corporate Executive Officer
Head of Healthcare Division, Head of Bio-Science & Medical
Division

Apr. 1972 Joined TOYOBO
Apr. 2002 Deputy Director and General Manager, Textile
No. 2 Department, and Textiles Technology andProcurement Department
Jun. 2002 Director
Jun. 2005 Director, President and Chief Operating Officer
Apr. 2014 Director and Chairman (to present)

Seiji Narahara
Director*, President and Chief Operating Officer
Controlling Supervisor of Internal Audit Department and
KAERU ProjectJan. 1988 Joined TOYOBO
Apr. 2009 Deputy Director and General Manager,
Finance Department
Apr. 2010 Corporate Officer
Jun. 2011 Director and Corporate Officer
Apr. 2014 Director, President and Chief Operating Officer(to present)*Representative Director

51

TOYOBO REPORT 2019

Apr. 1979 Joined TOYOBO
Oct. 2009 Deputy Director, General Manager of Plastics
Operation Planning Office, and General
Manager of Plastics Management Office
Apr. 2014 Corporate Officer
Jun. 2016 Director and Corporate Officer
Apr. 2017 Director and Corporate Executive Officer
Apr. 2018 Director and Corporate Senior Executive
Officer (to present)

Shigeo Takenaka
Director and Corporate Executive Officer
Head of Plastics Division; Head of Specialty Chemical
Division; Controlling Supervisor of Tsuruga Research andProduction Center
Apr. 1981 Joined TOYOBO
Apr. 2012 Deputy Director, General Manager ofFunctional Polymers Operating Department,
and General Manager of Functional Polymers
Technology & Development Department
Apr. 2013 Corporate Officer
Apr. 2017 Corporate Executive Officer
Jun. 2017 Director and Corporate Executive Officer (topresent)

Jun. 1989 Joined TOYOBO
Oct. 2009 Deputy Director, Head of Corporate ResearchCenter, and Deputy General Manager of Business
Development Planning Office
Apr. 2013 Corporate Officer
Apr. 2017 Corporate Executive Officer
Jun. 2018 Director and Corporate Executive Officer (topresent)

Shigeo Nishiyama
Director and Corporate Executive Officer
Head of Fibers, Textiles & Functional Products Division;
Controlling Supervisor of Iwakuni Production Center
Apr. 1983 Joined TOYOBO
Apr. 2014 Deputy Director, General Manager of Textile
Production & Development Operating Department,
General Manager of Textile Production Technology
and Development Department, and seconded to
TOYOBO STC CO., LTD.
Apr. 2017 Corporate Officer
Jun. 2018 Director and Corporate Officer
Apr. 2019 Director and Corporate Executive Officer (topresent)

Fiscal 2019
Business Overview

Value Creation
Strategy

The Basis of
Value Creation

Value Creation

Corporate Auditors
Corporate Auditors

Taketoshi Oka

Takafumi Isogai

Outside Director

Outside Director

Apr. 1974 Registered as an attorney at law
Apr. 1996 Vice Chairman of Osaka Bar Association
Jul. 2003 Established Kinki Chuou Law Office;Representative Partner (to present)
Jun. 2015 Director of the Company (to present)

Jan. 1987 Assistant Professor of Faculty of Liberal Arts,
Osaka University
Apr. 1996 Assistant Professor of Graduate School ofEngineering Science, Osaka University
Apr. 2002 Professor of Faculty of Mercantile Marine, Kobe
University of Mercantile Marine
Oct. 2003 Professor of Faculty of Maritime Sciences, Kobe
University
Apr. 2013 Professor of School of Commerce, University ofMarketing and Distribution Sciences
Apr. 2018 Part Time Lecturer at University of Marketingand Distribution Sciences (to present)
Jun. 2018 Director of the Company (to present)

Masaru Nakamura
Outside Director
Apr. 1977
Apr. 2006
Apr. 2008
Apr. 2010
Apr. 2012
Apr. 2016
Jun. 2017

Joined Sumitomo Corporation
Corporate Officer
Executive Officer
Managing Executive Officer
Senior Managing Executive Officer
Adviser
Director of the Company (to present)

Taneaki Nagata
Corporate Auditors

Yasuhiro Iizuka
Outside Corporate Auditors

Shiro Takenaka

Outside Corporate Auditors

Hiroyuki Sugimoto

Corporate Executive Officers
Yasuo Ota
Chikao Morishige

Corporate Officers
Kimie Sakuragi
Outside Director
Mar. 1981 Joined Fukutake Publishing Co., Ltd. (current
Benesse Holdings, Inc.)
Apr. 1995 Supervisor of Book Businesses in Publishing
Division
Nov. 1998 Chief of Business Ethics and Compliance OfficeJan. 2003 Manager of Business Ethics and Compliance
OfficeJun. 2003 Standing Audit & Supervisory Board Member ofBenesse Corporation (current Benesse Holdings,
Inc.)
Apr. 2007 Adjunct Professor of the University of Aizu
Graduate School (to present)
Oct. 2009 Audit & Supervisory Board Member of Benesse
Corporation
Jun. 2019 Director of the Company (to present)

Takayuki Tabo
Hiroshi Otsuki
Takeo Kashima
Yoshio Araki
Ichiro Takai
Kenjiro Ogami
Ikuo Takeuchi
Masakatsu Shirai
Nobuya Fujiwara
Kazuhiko Katayama
Seiji Yamazoe
Atsuhiko Otsuka
TOYOBO REPORT 201952

Corporate Governance

Basic approachand the Articles of Incorporation.
Under TOYOBO’s governance framework, a clear
distinction is made between the role of the Board of
Directors—who concentrate on decision-making andperform management oversight—and the Corporate Officers
who are in charge of business execution. This system enables
rapid decision-making and efficient business execution.

The TOYOBO Group, to respond to the changing times andcontinuously enhance corporate value, has established thefollowing three policies: (1) Ensure timeliness indecision-making, (2) Ensure transparency in management, and(3) Emphasize fairness. Based on these principles, we are working
to create and strengthen our corporate governance structure.

Board of directors

Board of directors and corporate officers

The Board of Directors has 10 directors, including four outside
directors. At the General Shareholders’ Meeting held in June
2019, one additional outside director was appointed in order
to increase diversity and strengthen the supervisory function.
The term of office of a director is set at one year to ensurea swift response to changes in the business environment andto clarify the responsibilities of the directors. In view of thediverse and specialized nature of TOYOBO’s business, five
directors, excluding the Chairman and outside directors, serve

TOYOBO is a company with auditors and, under thisgovernance system, has adopted the corporate officer system.
In this system, which is clearly defined by our management
regulations, the Board of Directors oversees the businessexecution of Corporate Officers. The system is also clearly
defined in the Corporate Officer regulations, which state that
Corporate Officers have an obligation to comply with all laws
Corporate Governance Structure

General Shareholders’ Meeting

Election and dismissal

Election anddismissal

Election anddismissal

Accounting auditing

Board of Directors

Reporting

Nomination Committee
The members comprisefour outside directors andtwo outside corporate
auditors.

Accounting Auditor

10 directors,
including four outside directors

ReportingBusiness auditing

Board of Corporate Auditors
Decision-making, supervision,
election, and dismissal

Advisory Board on
Compensation
The members comprise
two outside directors andone outside expert.

ReportingPresident
and Chief Operating Officer
Board ofCorporate Executive Officers
and Controlling Supervisors

Four auditors, including
two outside corporate auditors

Assessing
the appropriateness

Reporting

ReportingCorporate Planning Committee
Cooperation

Board of Corporate Officers

Cooperation

Financial Control Committee
Various Committees

CSR Committee

Global Environment & Safety, Product Liability
Prevention/Quality Assurance, Compliance,
Export Reviewing, Internal Control, Information,
Research & Development, Intellectual Property

Business execution

Each Group Company’s
Corporate Auditors
Internal Audit Departments

Functional organization...

53

TOYOBO REPORT 2019

Internal auditing

Internal auditing

Group Companies

Fiscal 2019
Business Overview

concurrently as Corporate Officers to support rapid, accurate
decision-making. Regular Board of Directors meetings areheld once a month, with extraordinary meetings being held
as necessary.
In order to further optimize the functions of outside officers(both directors and auditors), prior explanations are maderegarding important issues. In addition, TOYOBO periodicallyholds outside officer liaison meetings that consist solely ofoutside officers, who share their viewpoints and exchange
information.

Value Creation
Strategy

Corporate auditor system
The Board of Corporate Auditors has four members, two ofwhom are outside corporate auditors. Their responsibilities
include attending meetings of the Board of Directors and otherimportant meetings, stating their opinions when necessary,and auditing the performance of duties by directors basedon audits of operations in the various divisions.
KPMG AZSA LLC has been appointed to conduct theindependent audits required under Japan’s Companies Act.
The Board of Corporate Auditors receives plans for auditing
and audit reports from the independent auditor and meets with
the independent auditor periodically to exchange information.
The Internal Audit Department monitors the effectivenessof internal governance. The staff of this department report
the results of internal audits to the President and exchange
information with corporate auditors.

The Basis of
Value Creation

Initiatives to Strengthen Corporate Governance(Year)

Initiative & Objective
Established the Ethics Committee (the current CSR Committee)

1998

To promote companywide compliance activities as a key elementof management
Appointed one outside director, shortened the term of office fordirectors to one year

2004

To clarify management accountability by strengthening thesupervisory function and shortening the term of office
Established an Advisory Board on Officer Provisions, etc. (thecurrent Advisory Board on Compensation)

Business execution
There are 19 corporate officers, including some who serve
concurrently as directors. The President and Chief Operating
Officer, as the head of business execution, acts as Chair of
the Board of Corporate Executive Officers and Controlling
Supervisors, and convenes the Board of Corporate Officers.
The Board of Corporate Executive Officers and Controlling
Supervisors deliberates in advance on matters to be resolvedby the Board of Directors, and determines matters related tobusiness execution, which it has been entrusted by the Boardof Directors. The Board of Corporate Officers communicatesmanagement policy and reports on the progress ofcross-organizational, companywide issues.
The Corporate Planning Committee and the Financial
Control Committee are established under the Board of
Corporate Officers. They deliberate on important investments
and new projects, important investment and lending projects,
etc. from their respective expert standpoints, thereby
managing business risk.

Value Creation

To ensure transparency and fairness in procedures fordetermining officer compensation

2005

Introduced a corporate officer system, reduced the number of
directors
To split the decision-making/supervisory and executivefunctions
Increased number of outside directors to two
To strengthen the supervisory function by multiple
appointments
Established an outside officer liaison meeting2015

To hold regular information exchange meetings to optimize thefunctions of outside officers
Established the Nomination Committee
To ensure transparency and fairness in procedures fornominating/dismissing directors

2016

Made an analysis/evaluation of the overall effectiveness of theBoard of Directors
To continue to identify issues and make improvements, will carryout once a year in future

2018

Increased number of outside directors to three, raising theirratio to one third of all directors
To ensure diversity among members of the Board of Directors
Increased number of outside directors to four (adding a female
director)

2019

To further promote diversity among members of the Board of
Directors
Revised the officer compensation system (introduced
compensation in the form of restricted stock units)
To offer longer term incentives and realize greater sharing ofvalue with shareholders

TOYOBO REPORT 201954

Procedures for Nominating Directors andDetermining Compensation

Evaluating the Effectiveness of the Board of
Directors

In order to ensure transparency and fairness when determining
the nomination of directors and their compensation,
deliberations are conducted by the Nomination Committee(whose members include outside officers) and theAdvisory Board on Compensation (whose members include
outside directors and outside committee members), andreports are made to the Board of Directors and President.

From January to March 2019, in order to further enhance thefunctions of the Board of Directors, an overall analysis andevaluation of the effectiveness of the Board in fiscal 2019was carried out with the support of an external organization.

Officer Compensation
TOYOBO’s system of officer compensation is designed in linewith the following basic policy, within the monetary amount ofofficer compensation resolved at the General Shareholders’Meeting: (1) provide incentives that lead to TOYOBO Group’s
sustained growth and enhance corporate value over the longer
term; (2) secure highly talented management personnel; (3)set determination procedures that are objective and highly
transparent.
In order to ensure transparency in determining officer
compensation, a Advisory Board on Compensation has been
established as an advisory body to the President, in which atleast half of the committee members are outside directors andoutside experts. The Advisory Board on Compensation
conducts objective and fair deliberation/verification with regard
to matters including the system, level, and calculation methodof officer compensation, while also incorporating surveys byexternal organizations. The President makes a proposal to theBoard of Directors based on the report submitted by theAdvisory Board on Compensation, and a decision is then made.

Method of Analysis and Evaluation of EffectivenessA survey of directors and corporate auditors was conducted.
The responses to this survey were made directly to the externalorganization. Analysis and evaluation were carried out by the
Board of Directors and outside officer liaison meeting based on
the aggregate results reported by the external organization.

Summary of Evaluation Results(1) The survey results gave a broadly positive assessment
regarding matters including the number of Board members,
the ratio of internal and outside officers, and managementof the proceedings of meetings, and confirmed the overall
effectiveness of the Board of Directors.
(2) The Board of Directors is comprised of appropriate members
equipped with the qualities, knowledge and experience
required to fulfill their roles and functions. At the same time,ongoing efforts will be made to achieve greater diversity ofmembers in line with the business environment surrounding
the Company.
(3) As well as continuing last fiscal year’s initiatives, we aim tofurther enhance discussion concerning business strategy
over the medium-to-long term.

Training of Officers
Details of Officer Compensation (Fiscal 2019)

Classification

Total
compensation, etc.
(millions of yen)

Total compensation, etc. by type(millions of yen)
Regularcompensation

Stockcompensation

Numberofofficers

Directors(excluding outside
directors)

322

322

-

9

Corporate auditors(excluding outside
corporate auditors)

51

51

-

3

Outside officers

44

44

-

3

Note 1: The above includes three directors and one corporate auditor who retired as of theclose of the 160th Ordinary General Shareholders’ Meeting held on June 27, 2018.
Note 2: From July 2019, compensation includes non-performance-based restricted stock
units.

55

TOYOBO REPORT 2019

As well as giving explanations to newly appointed directors
and corporate auditors concerning their roles and duties, they
undergo an external training program upon their appointment,in order to acquire the necessary knowledge.
In addition, newly appointed outside directors and outside
corporate auditors are given explanations concerning theCompany’s operations, finances and organization, etc. They
are also encouraged to continue participating in external
training programs after assuming office, lectures are given byexternal speakers, and each individual strives to continually
improve their management literacy.

Fiscal 2019
Business Overview

Value Creation
Strategy

The Basis of
Value Creation

Value Creation

Message from an Outside Director

quality control and assurance departments now haveseamless connections to the Company’s central
Environment & Safety, Quality Assurance Operating
Department.

Harnessing Artificial Intelligence
Takafumi Isogai
Outside Director

Initial thoughts upon my appointment ofoutside director
When I was appointed outside director about one year ago,
a major theme in the corporate world in Japan at the time wasthe view that a company would not survive if it were solely
focused on making profits. TOYOBO’s Jun-Ri-Soku-Yu(realizing prosperity by acting rationally) corporate philosophy
centered the Company squarely on the idea that its
fundamental purpose was for the mutual benefit of itself andothers. I thought this was a company that was a leading
proponent of that philosophy.
In our modern era, we now have the wealth andtechnology to help people around the world, yet civilization has
lost its balance and is facing serious issues, not the least ofwhich is poverty. I saw TOYOBO as a marvelous company for
conducting its business with a mission to help all of society,and I wanted to help TOYOBO succeed.

The Status of Quality Control andQuality Assurance
Over its long history, TOYOBO has evolved and developed awide variety of operations. I believe that, over time, theCompany’s organization has become compartmentalized.
My area of expertise is quality control, and I am very consciousof issues that arise from the flow of information related to quality
control and assurance.
TOYOBO’s manufacturing divisions try to deal with their
quality control and assurance issues solely within their own
division. While this enables quick response, thecountermeasures they apply are not fully communicatedthroughout the company, so there are times when thecompany’s overall response is inadequate. I submitted to theBoard of Directors that the Company could truly benefit fromcreating an organizational structure that facilitated information
flow from the manufacturing divisions to the quality assurance
departments of every other division. I believe the manufacturing

A database is essential for quality control, but it is just as
important in other areas. A growing database can be used for
AI-generated predictions that can make operations more
efficient. Of course, AI will almost certainly raise some issues.
TOYOBO can use AI rooted in a database of information
on rival companies and customers to predict the best way tomarket its numerous products. AI can improve research anddevelopment efficiency by replacing the conventional
hypothesize and test method with virtual models where you
input parameters and AI predicts the outcome.
The company should mobilize to move ahead of its
competitors by exploring a wide variety of ideas and using
the predictive capabilities of AI to find the most efficient way
to execute its business.

Formulate a Long-term Vision
TOYOBO has revamped its business portfolio and made clear
progress establishing its specialty businesses. From this point,
management will seek to further strengthen the businessportfolio. In doing so, clear and thorough medium- andlong-term objectives will be key, and a long-term visionespecially critical. Management has assembled a
two-dimensional portfolio, but I have recommended it
consider adding another axis to form a three-dimensional
long-term plan. I recommend this because the ability to easily
replace a portfolio’s axis will make it easier to orient the portfolio
toward fulfilling a future vision and the way the axes are
increased and weaved together will project a long-term vision.
In our times, management decisions are measured in
global terms. With eyes currently cast on the accumulating
plastic pollution in our oceans, TOYOBO management must be
prepared to show it should offer environmentally friendly
products and will construct production systems that do notburden future generations. I believe this also warrants deep
consideration as management forms its long-term vision for
the Company.

TOYOBO REPORT 201956

Compliance/Risk Management

Basic approach to compliance
Our Group’s corporate philosophy, Jun-Ri-Soku-Yu (realizing
prosperity by acting rationally), forms the basis of ourcompliance activities, in particular the idea of “thinking rationallyand logically, as well as respecting ethics and morals, thefundamental nature of being human.”Compliance promotion structure
A Compliance Committee has been established, comprising
members of the Board of Corporate Executive Officers andControlling Supervisors. This promotes Group-wide compliancefrom a management perspective. A Compliance Promotion
Committee has also been established as a sub-body to thiscommittee, which considers and promotes specific initiatives.
In fiscal 2019, the Compliance Committee convened
twice, and the Compliance Promotion Committee convened
four times. Under the motto “instilling an awareness ofcompliance and sharing compliance values”, the committees
clarified policy and standards, and worked to enhance theeffectiveness of education, training and preventive measures.

Initiatives to enhance awareness of compliance
In fiscal 2019, we significantly revised the TOYOBO Group’sCharter of Corporate Behavior and the TOYOBO Group
Employees’ Code of Conduct, in order to realize a sustainable
society and raise awareness of compliance. As well as
incorporating these in the TOYOBO Group Compliance Manualand distributing it to Group employees, staff read through thetexts together in each workplace to ensure thoroughfamiliarization with the rules.
Members of the Compliance Department held compliancebriefings on 38 occasions for TOYOBO and Group company
management personnel, covering quality breaches andinformation security. In addition, case studies detailing casesof legal violation were issued monthly,
as well as heads-up reports(occasional publication), to enhanceawareness.
In the November Compliance
Enforcement Month, a compliancesurvey was carried out to identify
issues related to the status ofcompliance and promotion activities,
and initiatives were undertaken to
make improvements.
TOYOBO Group
Compliance Manual57

TOYOBO REPORT 2019

Main compliance activities in fiscal 2019

Clarification of policy and standards
Revision of TOYOBO Group’s Charter of Corporate Behavior
and the TOYOBO Group Employees’ Code of Conduct
Improvement of the internal rules system
Enhancing the effectiveness of education, training andpreventive measures
Holding of compliance briefings, training by job level, etc.
Compliance Enforcement Month initiatives
Issuing of compliance mini-study, heads-up reports
Training in individual topics such as the Subcontract Act,
bribery/gifts/hospitality, and improvement
Responding to incidents
Strengthening ability to respond to incidents

Compliance consultation centers
TOYOBO has established an internal reporting service for all
Group employees and compliance consultation centers both
inside and outside the Company. This enables legal violations
and other wrongdoing in the workplace to be addressed as
Company issues, taking swift, appropriate action andpreventing any recurrences.
Number of consultation cases
FY2015FY2016FY2017FY2018FY2019

20

12

20

15

32

Compliance education
As well as training by job level, such as for new employees
and staff who have been promoted, seminars are held on
specific key topics such as information security andbribery/gifts/hospitality.

Seminar on bribery/gifts/hospitality

Fiscal 2019
Business Overview

Basic approach to risk management
We envisage the various types of risk that could pose a threat
across the entire range of our business activities, and manage
risk appropriately according to the characteristics of each risk.
In an emergency situation, we immediately set up a task
force under the instruction of the relevant corporate officer,
and bring the crisis under control through a swift response.
By putting these systems in place and conducting the
aforementioned initiatives, we work hard to earn the trust of
our customers, the local community, and our shareholders
and other stakeholders.

Business risk
With regard to specific risks in our business activities, we haveestablished the CSR Committee as the body for overseeing
Group-wide risk, headed by the President as chair of theCommittee. Under the auspices of this Committee, there areeight further committees including global environment and safetycommittee, which manage the various types of business risk
at the Group level. We have also established the Corporate
Planning Committee and Financial Control Committee underthe Board of Corporate Executive Officers and Controlling
Supervisors. Specialist committee members selected fromeach department deliberate on proposals for new projects orimportant investment and lending projects, and control businessrisk from a multi-faceted perspective.

Business continuity planning (BCP)TOYOBO Group has drawn up a BCP focused on
combining both “fulfillment of our responsibility to supply
products as a manufacturer” and “coexistence with theglobal environment and society,” and we make continual
improvements.
The BCP clarifies the chronological sequence of the roles
and functions of each department when a crisis occurs, throughto its resolution. It also contains specific details of preparations
during normal times.

Value Creation
Strategy

information systems, serves as the committee chair, and
TOYOBO’s Corporate Planning Department serves as thesecretariat. Cyber security measures are implemented by four
teams: Maintenance/Operation/Surveillance Team,
Education/Training Team, Policy/Rules Team, and Incident
Response Team.
In fiscal 2019, the committee drew up the TOYOBOGroup Information Security Policy, strengthened the securityof networks and information equipment, and drew up thetraining curriculum.
TOYOBO Group has established a Cyber Security
Committee as a sub-body of the Information Committee topromote information security measures. This committeemonitors conditions pertaining to the Group’s information
security, formulates basic policy, maintains the management
structure, implements and supervises measures.
TOYOBO Group Information Security Management Structure
Person in Charge / Title of Organization

Role

Chief Information Security
Officer (CISO)• The person with ultimate responsibility for
information security management and formaintaining the structure• Formulating basic policy and plans, establishingand maintaining the management structure• Providing the necessary management resources• Making activity reports to management• Maintaining information security management
within their area of responsibility• Familiarization of personnel with basic policy,
Information Security Officer
education/training, enforcement• Appointing responsible personnel and giving
instructions on implementing measures
Legal Compliance &Internal Rules Officer• Developing and maintaining the system of rules
based on information security policy

Personal Information
Management Officer• Developing and maintaining policy and rules,
etc. concerning personal information protection

Education & Training
Officer• Education and training for persons who use
TOYOBO Group's information assets

Information Systems
Operation Officer• Implementing all technical matters pertaining to
information systems operation

Incident External Response
Officer• Public relations contact point (internal andexternal) in the event of a major incident,
incident response training

Cyber Security Committee• Coordinating with the relevant departments toprovide support for rules, education/training,
security measures, and incident response• Making activity reports to the Information
Committee

Cyber security
TOYOBO Group is working to strengthen cyber security as one
element of our digital strategy. In April 2018, we set up a Cyber
Security Committee as a sub-body of the Information
Committee. The President of TOYOBO System Create Co.,
Ltd., a Group company that develops, operates and maintains

The Basis of
Value Creation

Value Creation• Receipt of information security incident reports
and initial response
Computer Security Incident
Response Team (CSIRT)• Convening of related parties, recovery response
and reporting of results

TOYOBO REPORT 201958

Investor Information(As of March 31, 2019)

Stock ListingTokyo

Stock Code

3101

Transfer Agent

Sumitomo Mitsui Trust Bank, Ltd.
1-4-1, Marunouchi, Chiyoda-ku,
Tokyo 100-8233, Japan

Independent Auditors

Composition of Shareholders

KPMG AZSA LLC
3-6-5, Kawara-machi, Chuo-ku,
Osaka 541-0048, Japan

Common Stock

Authorized: 200,000,000 shares
Issued: 89,048,792 shares

Paid-in Capital¥51,730 million

Number of
Shareholders

58,872

General Shareholders’Meeting

Held in June every year

Number of Shares
Constituting One Unit

100

Other domestic
companies

Securities companies

2.22%

5.09%

Overseas companies
and others

20.47 %

Number of
Shareholders

Financial
institutions

58,87243.28%

Individuals and others

28.94%

Major Shareholders
Number of shares held (thousands)

Percentage of voting rights (%)

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

8,286

9.34

Japan Trustee Services Bank, Ltd. (Trust Account)

5,396

6.08

National Mutual Insurance Federation of Agricultural Cooperatives

3,308

3.73

Nippon Life Insurance Company

1,750

1.97

Toyukai (Contractor Share Holding)

1,667

1.88

Japan Trustee Services Bank, Ltd. (Trust Account 9)

1,638

1.85

Japan Trustee Services Bank, Ltd. (Trust Account 5)

1,624

1.83

TOYOBO Employee Stockholders’ Association

1,531

1.73

Meiji Yasuda Life Insurance Company

1,402

1.58

JP MORGAN CHASE BANK 385151

1,392

1.57

Stock Prices
Highest/lowest stock prices for the past five years
FY

2015

2016

2017

2018

2019

Highest (yen)

¥180

¥216

¥211

¥2,249(218)¥2,164Lowest (yen)

¥145

¥140

¥155

¥1,900(184)¥1,386

1. Stock price quotations are from the Tokyo Stock Exchange (First Section).
2. The highest and lowest stock prices shown for fiscal 2018 are figures following the share consolidation. Figures in parentheses show pre-share consolidation amounts.

59

TOYOBO REPORT 2019

Corporate Data

(As of March 31, 2019)

Head Office2-8, Dojima Hama 2-chome, Kita-ku, Osaka 530-8230, Japan
Telephone: +81-6-6348-3111

EstablishedMay 1882

Number of Employees

3,108 (Nonconsolidated) / 9,572 (Consolidated)

Branches

Tokyo Branch
Nagoya Branch

Tsuruga Research andProduction Center

Tsuruga Research and Production Center
Iwakuni Production Center

Takasago Plants

Iwakuni
Production Center

Toyama Center

Toyama Center
Inuyama Plant

Tokyo Branch

Nagoya Branch
Research Center

Research Center
Takasago Plants
Inuyama Plant
Overseas

TOYOBO (SHANGHAI) CO., LTD.
TOYOBO U.S.A., INC.
TOYOBO (THAILAND) CO., LTD.
TOYOBO CHEMICALS EUROPE GmbHTOYOBO DO BRAZIL PARTICIPACOES LTDA.
TOYOBO Group’s Business Locations around the GlobeEuropeAsia

Germany

North America
United States

South Korea
Spain

Middle East India
Saudi Arabia

China

Japan

Hong Kong
ThailandTaiwanMexicoEl Salvador

Malaysia

Latin America
Indonesia
BrazilExternal Recognition

TOYOBO is listed on the following SRI indices, as of March 2019.
∙ MSCI japan Empowering Women Index (WIN)∙ SNAM Sustainability Index

THE INCLUSION OF TOYOBO CO., LTD. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS,
TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP,
ENDORSEMENT OR PROMOTION OF TOYOBO CO., LTD. BY MSCI OR ANY OF ITS AFFILIATES. THE
MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND
LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

TOYOBO REPORT 201960

TOYOBO CO., LTD.
2-8, Dojima Hama 2-chome, Kita-ku,
Osaka 530-8230, Japan
Telephone: +81-6-6348-3111
URL: https://www.toyobo-global.com/

Corporate Communication Department,
Investor Relations Group
Telephone: +81-6-6348-3044
E-mail: ir_g@toyobo.jp

Corporate Planning Department,
CSR Promotion Group
Telephone: +81-6-6348-3046
E-mail: csr_g@toyobo.jp
TOYOBO REPORT 2019
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