Integrated
ReportA Hundred Years of History
Passed down for more than a century,
the DNA of innovation

Nippon Fine Chemical offers raw materials for pharmaceuticals,
functional materials used in electronic materials
and performance resins, and hygiene management materials,
as well as raw materials for cosmetics used in products ranging
from skin care to makeup and hair care.
We shall continue to hold contributing to a prosperous
and ﬂourishing society and to happy lives through chemistry
as our Management Philosophy.

Company Name
Established
URL
Paid in Capital

NIPPON FINE CHEMICAL CO., LTD.
February 1918
https://www.nipponseika.co.jp/en/
5,933.22 million yen

Number of Employees

398 (as of June 23, 2023)

Listed stock exchange

Prime Market of the TSE (as of April 4, 2022)

Representative Director, President

Hiroshi Yano

*Please see our website for the latest information.

CONTENTS
Top Message
Top Message

03

Management Storategy
Value Creation Story

07

Medium-term Management Plan09

Our Oﬃcers

11

Corporate Governance

12

Business Content
History of Nippon Fine Chemical

13

Nippon Fine Chemical Group Businesses

15

Functional Products: Beauty Care Field

17

Functional Products: Health Care Field

19

Functional Products: Fine Chemicals Field

21

Focus Material: Phospholipids

23

Focus Material: Lanolin and Cholesterol

24

Sustainability
Sustainability Philosophies and Framework

25

Materialities

27

Respect for Human Rights

29

Environmental Preservation

31

Environmentally-Friendly Product Development 35
Compliance and Labor Environment

37

Financial Data
Outline of Consolidated Financials Over the Last Decade 39
Financial Statements

41

Non-ﬁnancial Data
Human Resources Information

45

Safety and Environment Information47

■ Top Message

Towards ESG Management by Putting
Our Management Philosophy into Practice
We were founded in 1918 as Nippon Camphor Co., Ltd. in order
to integrate the camphor businesses in Japan.
Later, we started manufacturing fatty acids and other oil andfat-related products, and expanded our business lines by forging
our own unique ﬁelds within chemistry. In 1971, we changed ournamed to Nippon Fine Chemical Co., Ltd., and have been working
to develop products and businesses that stay ahead of peopleʼsneeds as a ﬁne chemicals manufacturer.
Today, we offer products in a wide range of ﬁelds. We makecosmetic ingredients that are kind to both people and theenvironment, pharmaceutical ingredients that contribute toimproving everyoneʼs QOL (Quality of Life), hygiene management
products that make everyoneʼs environments clean, safe, andcomfortable, and functional products used not just in day-to-day
goods but in electronics and different types of resins.
We hold the following three points as our Management Philosophy.
- Nippon Fine Chemical shall contribute to society through chemistry- Nippon Fine Chemical shall contribute to all people connectedwith our company- Nippon Fine Chemical shall contribute to the self-realization of
our employees
Based on this Management Philosophy, we shall aim to becomea corporation that continues to deliver value to society throughunceasing innovation, actively responding to the changing times.

Representative Director, President

H i r oshi Yano

03

Top Message

Reaching our centennial,
strengthening governancewith a view to future dramatic growthThis is a general overview of our medium-term management
plan for the ﬁve years from April 2018 to March 2023.
We celebrate the centennial of our founding on February 12,
2018. The medium-term management plan which started in April
that year (the ﬁve years from FY2018 to FY2022) positioned，Management Storategy“Strengthening governance stage” under the slogan “To be a
corporate group growing sustainably for the next hundred years,”
and we carried out a range of measures for this. We achieved
listing on the TSE Prime Market in April 2022, and in tandem with
this, we are working towards thorough responses to our Corporate
Governance Code.
In these ﬁve years, we have pursued the following threemeasures.
- Dealing with sustainability- Revising our business portfolio

Depicting our future image,what we need to do now:
formulating NFC VISION 2030

making our customers happy. I want to bring more smiles to the

When I was appointed President in June 2020, I offered thematerials suppliers. That is the hope contained within “Smiles

people of the world with the power of KIREI, starting with theemployees of our Group, their families, our clients, and raw
on Faces: The Power of KIREI.”

growth for our new hundred years.
(1) Compliance and safety(2) Human resources training and working style reforms(3) Formulating a long-term vision(4) Multiplying our core businesses(5) Promoting digitalization
believe there needs to be a common theme running through eachbusiness. Also, the environment for our businesses is changing
ever faster, becoming more difﬁcult. I believe it is important for
all employees to share the issues of “What do we want to be in
the future? What do we need to do to get there?” in order to see

To support sustainability, we added three sub-concepts to
NFC VISION 2030:(1) Sustaining the KIREI of the Earth through sustainable
manufacturing,(2) Susutaining the KIREI of commuities through compliance,
safty, and actions that ensure peace of mind, and(3) Sustaining the KIREI of the future through diversity -deriven
innovation.

changes in the environment, survive and thrive in a world which

This shows our strong desire to contribute to ESG management

remains unpredictable. This is why we have worked on preparing

and achieving the SDGs.
Our Management Philosophy of "Contributing to Society

In our businesses, we provide raw materials for cosmetics toThrough Chemistry" as well as the "Smiles on Faces: The Powerhelp you keep your skin and hair beautiful (KIREI), raw materials

of KIREI" in NFC VISION 2030, and our sub-concept of helping

for pharmaceuticals to keep you healthy (KIREI), and functional

to sustain the three "KIREIs" of the Earth, society, and thematerials to make the future global environment clean (KIREI).

future, form the basis of our Basic Sustainability Policy, which

We experience the feeling of KIREI in many different ways,

aims for both a sustainable society and sustained growth for us.

Non-financial Dataa long-term vision, formulating the NFC VISION 2030 “Smiles on
Faces: The Power of KIREI.”

Financial Data

Our businesses vary by ﬁeld, but to ensure further growth, I

ESG management andSDGs contributions

Sustainability

following ﬁve key items as necessary to achieve sustainable

Business Content- Formulating NFC VISION 2030

04

Revising our business portfolio withan eye to sustainable growth
At the same time, we have been revising our business portfolio
over the last ﬁve years with an eye to sustainable growth.

terms of capital investment, there was a slight lag due to issues
such as the fact that some facilities did not start operating until
April 2023, but it went largely as planned.
In addition, if we turn our eyes to capitalization strategy, we
have worked to improve and stabilize dividend levels while

For our Lipid Division (phospholipids for pharmaceutical products)

working out a balance between capital efﬁciency and ﬁnancial

within our Fine Chemicals ﬁeld, in the Industrial Products Businesssolvency. We have been using DOE (the consolidated dividend

segment, we both made a large-scale investment totaling some 5.3

on equity ratio) as our dividends policy since FY2021, which has

billion yen towards strengthening competitiveness and expanding

meant a large increase in dividend levels, and increases for six

the business ﬁeld, and made the Lipid Division independent of theﬁscal years running in tandem with the previous medium-term

Fine Chemicals Business Division through organizational reform,

management plan. In addition, we have also been working toestablishing a system for strengthening our business activities.

curtail our cross-shareholdings and reduce our equity, as wellIn the same way, for Fine Chemicals ﬁeld, we made thedecision to withdraw from the leather oils business, with its highas buying back our own shares, which, along with improved
performance, have increased our share price.

environmental impact and difﬁcult business environment, and so
we sold off our Chinese subsidiary, Taicang Nikka Fine ChemicalCo., Ltd.
In this way, active investment in businesses where we can use
our strengths, and the elimination of businesses which do notmesh with the perspectives of ESG management, have boosted
the strength of our business foundation as we head to the future.

Our new medium-term management
plan is the “Attack stage”
As of April 2023, we have started a new Medium-term management
plan, which will run for four years from FY2023 to FY2026).
As we head towards the realization of NFC VISION 2030, weare positioning these four years as the stage for actively investing

Revenue base strengthened,with dividend increases
for six ﬁscal years running
As quantitative targets, we set sales of 39 billion yen andto strength our growth foundation, altering our course from the“Defense stage,” where we worked to strengthen corporate
governance, to the “Attack stage.”Speciﬁcally, we will work on the following, and further accelerate

operating proﬁt of 3.9 billion yen, along with a total capitalour growth strategy.

investment of 10 billion yen over ﬁve years, by the end of the- Strengthen our business portfolio through rebuilding our

medium-term management plan in the ﬁscal year ended March
2023. Of these, we failed to reach our sales objective as a resultof sluggish sales for the Domestic Sales Department due to thebusiness segments- Strengthen R&D and sales so that people say “when it comesto phospholipids, look no further than Nippon Fine Chemical”

impact of the novel coronavirus infections, but our operating- Strengthen our capital investment and R&D investment

proﬁt was considerably above our target, at 5.1 billion yen. In- Strengthen our responses to sustainability
Our Group changed our business segments as of FY2023.
Segments that were all previously collected under “industrial
products” have been reorganized as beauty care, health care, ﬁnechemicals, and trading as organized under the domestic sales
department, and we are strengthening disclosure. In addition, we
also changed our segment name from Industrial Products toFunctional Products.
At the same time, we changed the Household Products name toEnvironmental Hygiene Products (hygiene ﬁeld) and made it
Arbos-only. In addition to these, we hope to strengthen strategies
suited to each business ﬁeld by reorganizing the organizations of
Nippon Fine Chemical on a functional department system basis,
moving ahead with business portfolio management.

05

Top Message

Smile on Faces;
The KIREI Power of the Phospholipids,
by Nippon Fine Chemical.
We have set phospholipids as a strategy product, as we canlook forward to enjoying market competitiveness thanks to our
proprietary technology. We are working on expanding sales withthe goal being to have people say “when it comes to phospholipids,
look no further than Nippon Fine Chemical.” We are working to help

Management Storategy

the general public get a better understanding, with a special
section on our website that opened in January 2023.
Phospholipids are products related mainly to the ﬁelds ofbeauty care and health care.
In the ﬁeld of beauty care, in addition to the Chinese market,
which we have focused our efforts on since the previous
medium-term management plan, we are also focusing on
expanding sales in the North American and European markets,
phospholipids for cosmetics, as we expect there will be evenfurther growth in demand.
In the health care ﬁeld, we are strengthening our phospholipids

At the same time, we shall focus on key development themesthat contribute to a sustainable society from the perspective ofsustainable growth for our company.

for nucleic acid medicines, where growth is particularly expected,

Speciﬁcally, we shall move ahead with making our production

within the drug delivery systems ﬁeld. As we can respond to theprocesses sustainable in the phospholipids materials I discussed

trend towards horizontal segmentation that is happening in theearlier, and work to further differentiate ourselves from our rivals.

Business Content

our main markets. We are planning to construct a new plant forpharmaceuticals industry, we will also focus on being a CDMO for
In addition, we have set the development of materials for

set up a the new Shonan Laboratory at Shonan iPark in Fujisawa,

perovskite solar cells as a large-scale development theme.

Kanagawa Prefecture.

Perovskite solar cells are a technology from Japan, and their

In this way, we are pursuing liaisons outside the company

primary feature is that they are lighter and more ﬂexible

through open innovation.

compared to conventional solar cells. Being thinner and easily

Sustainability

the development of pharmaceuticals. To that end, April 2023 we

bendable, they should be able to be installed on walls or car

Aiming for our sustainable growth
and to bring about a sustainable
societyroofs or other places where normal solar cells would be hard to

We are focusing our efforts for our Basic Sustainability Policy

hope to contribute to a sustainable society by providing

First, we will actively work on the following for achieving awould aim for early deployment within society to serve as a
trump card for achieving a carbon-neutral society by 2050. We
materials indispensable for perovskite solar cells to battery
manufacturers.

Financial Dataon the following points.

install. The Kishida administration just announced in April that it

sustainable society.
- For production processes, we will work on saving energy,
reusing resources, and reducing waste

The chemicals industry is increasingly required to respond tosustainability for the future and co-existence with local
communities. We shall put into practice our desire to aim for bothtechnology and ﬂow reactors which are continuous synthesis

a sustainable society and sustainable growth for us. This is not just

- In raw materials procurement, we shall support various

revenue-based growth: we shall continue to tackle the challenge

certiﬁcation systems such as RSPO and non-GMO

of aiming ever higher through repeated innovations into theThrough initiatives such as these, we aim to become a chemical

future, based on our Management Philosophy of “Contributing to

manufacturer that is selected by people around the world as we

Society Through Chemistry,” while also fulﬁlling our responsibilities

move towards achieving a sustainable society.

as a member of society.

Non-financial Data

- In developing new technologies, we shall study enzyme synthesis06

■ Value Creation Story
Management Philosophy: Contributing to Society Through Chemistry
Basic Sustainability Policy: Aiming for our sustainable growth
and to bring about a sustainable society

Social issues

KIREI for the Earth

Technology ﬁelds
NFC has strengths inSynthetic organic
chemistryBusiness ﬁelds

Beauty care

- Measures to combat
climate change- Reduction of environmental
impact- Prevention of global
warming

Polymer chemistry

Health care
KIREI for society

Oleochemistry- Strengthening compliance- Prevention of workplace
accidents- Providing products that aresafe and reliable

Surface science
Fine chemicals

KIREI for the future- Promotion of diversity

Dermatology- Achieving a work-lifebalance- Development of productsthat co-exist with theenvironment

HygieneNanotechnology

Increasing the purity of our KIREI
07

day-to-day products but also in electronics and different types of resins.
We shall continue to be a corporation that contributes to creating a society that offers beautiful, healthy, and prosperous
lives, full of smiles, by providing functional, high added-value raw materials for cosmetics and pharmaceuticals, andfunctional raw materials.

Provided values- Phospholipids for cosmetics- Functional esters forcosmetics

Sustain your skinand hair KIREI (Beauty)

Pharmaceuticals

Supporting your body
KIREI (Health)Electronics

Supporting cutting-edge
equipment KIREI(Performance)

Resources energy

Keeping resources
KIREI (Sustainable)

Environmental
hygieneKeeping the environment
KIREI (Clean)- Bioactive ingredients- Natural polysaccharides- Wool grease derivatives
for cosmetics- DDS materials/development
and manufacturing support- Pharmaceutical intermediates

Business Content

Cosmetics

Management Storategy

Outputs

Top Message

Nippon Fine Chemical offers raw materials in a variety of ﬁelds: for cosmetics that are kind to both people and theenvironment, for pharmaceuticals that help improve health and convenience, and for functional materials used not just in- Pharmacology/safety testing- Organic acid chlorides- Materials for perovskite
solar cells

Sustainability- Wool grease derivatives
for pharmaceuticals- Functional Coatings- Additives for resins- Handsoaps- Hand sanitizers

Financial Data

- Wool grease derivatives- Products for public health- Products for food hygine- Products for medical
hygineNon-financial Data

KIREI
“Kirei ” is a Japanese word expressing
the concept of “beautiful,” “ﬁne,”“clear,” or “clean,” and can be used
as an adjective, noun or verb.

08

■ Medium-term Management Plan
Basic policy
We shall strengthen our growth base by active investment as we aim to reach where we want the company to be by 2030 aslaid out in our long-term vision, NFC VISION 2030.

- Strengthen our business portfolio through restructuring our business segments‐ Strengthen R&D and sales so that people say “when it comes to phospholipids, look no further than Nippon
Fine Chemical”- Strengthen our capital investment and R&D investment- Strengthen our responses to sustainability

NFC VISION 2030 Long-term vision“Smiles on Faces: The Power of KIREI.” And, as
subconcepts, we acclaim the power of KIREI toDiversity&Inclusion

sustain the Earth, society, and the future, andEmployee
Engagement

express our unshakeable intent to pursue theFearless
Organization

course of Environmental, Social, and Corporate
Governance (ESG) and, to ensure a sustainable
society, contribute to the attainment of sustainable

Marketing&Innovation

development goals (SDGs). Announced in OctoberCommunity
BenefitSocialResponsibility

DigitalTransfor-mation

Smiles on Faces:
The Power of KIREI

2021.

Revising our business portfolio and setting strategic items■Revising our business portfolio (revising segmentation)
We have reorganized our segments based on business ﬁelds to strengthen our business strategy. The mainchanges are the change of name from the old Industrial Products segment to the new Functional Products
segment, and its subsequent ﬁner division into beauty care, health care, ﬁne chemicals, and trading.
■Setting strategic items (“Smile on Faces; The KIREI power of the Phospholipids, by Nippon Fine Chemical.”)
We have set phospholipids, a product made through our proprietary technology, as a strategic item (growth
driver), and aim to strengthen the growth bases both for phospholipids for pharmaceuticals (health care) andphospholipids for cosmetics (beauty care). On top of that, we are working on the following strategies in eachof our key segments.

09

Beauty care ﬁeld

Health care ﬁeld

- Expansion of sales of phospholipid materials for cosmetics
and development of a system to increase production(boosting capital investment)- Expansion of sales to overseas markets, especially the West
and China, where high growth is expected- Expanding sustainable products such as RSPO andnon-GMO*p17- Solid startup of production based on large-scale investment inphospholipids for pharmaceuticals‐ Expansion of business from being focused on small molecule
pharmaceuticals to areas such as nucleic acid pharmaceuticals
where high growth is expected- Focus on being a CDMO for the development of pharmaceuticals

Fine chemicals ﬁeld

Hygiene ﬁeld

- Reorganization of low-proﬁt products- Establishment of next-generation technologies(such as perovskite solar cell materials)- Listing of sustainable products on the market- Promotion of differentiation through development of highvalue-added products

Strengthen responses to sustainability

Strengthen capital investment and R&D investment- Strengthen investment in technology development

We shall promote activities towards achieving oursuch as the creation of future core technologies

materialities and TCFD targets as we aim to realize

and making manufacturing activities sustainable

the ideals of “Aiming for our sustainable growth and‐ Development of an environment where employees

to bring about a sustainable society” in our BasicManagement Storategy

Sustainability Policy.

can work easily (capital investment)- Promotion of digitalization (such as updating coresystems)

Management targets and capital policies (consolidated)
Management target ﬁgures

Plan for FY2023

Goals for FY2026

Goals for FY2030

Net sales（billion yen）

36.8

38.0

41.0

50.0

Operating profit（billion yen）

5.0

4.8

5.7

7.7

EBITDA*1（billion yen）

6.0

6.1

7.7

11.1

ROIC*2

7.9％

‑

8.0％

9.0％

‑

Sales-to-R&D ratio

2.4％

Total of 12 billion yen over four years
‑

2.7％

‑
‑

Sustainability

Actual figures for FY2022

Business Content

We are continuing active investment to strengthen our growth base and also established indices that are awareof capital efficiency.

Capital investment

Top Message

Initiatives*1. EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization (Operating profit + Depreciation)*2. ROIC: Return On Invested Capital (After-tax operating profit ÷ (interest-bearing debt + equity))

We aim to enhance our returns to shareholders, including stable dividends and buying back our own shares.
Plan for FY2023

Goals for FY2026

Goals for FY2030

DOE*3

3.0％

3.5％

3.5％

‑

Dividend per share

57 yen70 yen80 yen

100 yenTotal return ratio*4

79％

Average of at least 50%

Cross-shareholding ratio*5

25％‑

17% or less‑
10% or less

*3. DOE: consolidated Dividend On Equity ratio (Total annual dividends ÷ Consolidated net assets or Dividend payout ratio x ROE)
*4. Total return ratio: (Total amount of dividends + Amount of treasury stock acquisition) ÷ Net income attributable to parent company
shareholders*5. Cross-shareholding ratio: Ratio of total amount recorded on the balance sheet for investment stocks held for purposes other thanpure investment to consolidated net assets

Non-financial Data

Actual figures for FY2022

Financial Data

Capital policies

10■ Our Oﬃcers
Directors and Auditors (as of June 23, 2023)
Directors
April
1989 : Joined NFC
September 2006: General Manager of Planning Ofﬁce
June
2010 : Corporate Ofﬁcer
April
2011 : General Manager of Corporate Planning Ofﬁce
June2015 : Director
Senior General Manager of Fine Chemicals Department
April
2017 : General Manager of Lipid DivisionJune
2020 : Representative Director, President (to present)

Representative Director,
President

April
April

Director, Chairman

Susumu Yano

Hiroshi Yano

1978 : Joined NFC
2000 : General Manager of Pharmaceutical Manufacturing
Department
November 2002 : General Manager of Pharmaceutical Plant
June
2003 : Corporate Ofﬁcer
Deputy Senior General Manager of Manufacturing &Technology Division and General Manager, Takasago Plant
June
2004 : Director, Senior General Manager of Manufacturing &Technology Division
June
2006 : Representative Director, President
March 2016 : Outside Director of Nichirin Co., Ltd. (to present)June2020 : Representative Director, Chairman
June2022 : Director, Chairman (to present)(Born April 19, 1955)(Born June 29, 1964)

April
March
June
October
June
June
June

1974 : Joined NFC
2005: General Manager of Takasago Plant
2008: Corporate Ofﬁcer
2008: Senior General Manager of Manufacturing &Technology Division2010 : Director (to present)2015 : Executive Corporate Ofﬁcer (to present)2017 : Excutive Supervisor for Group Company Production
Management (to present)

Director, Executive Corporate Ofﬁcer
Excutive Supervisor for Group Company
Production Management

Masanobu Kawabayashi(Born September 5, 1955)

March
June
June
April
June
June

Director, Senior Corporate Ofﬁcer
Senior General Manager of Research& Development Division and Director,
Research Laboratory

Yukihiro Ohashi(Born July 26, 1960)

April
June

1975 : Joined Toray Industries, Inc.
2006 : Director at Toray Industries (Malaysia) Sdn. Bhd.
and President of Penﬁbre Sdn. Bhd.
June2013 : CEO & COO of Kansai TEK Co., Ltd.
(now Toray Engineering West Co.,Ltd.)
January 2015 : CEO & COO at Toray Engineering Co., Ltd.
June
2019 : Advisor at Toray EngineeringJune
2021 : Director at NFC (to present)June
2021 : Outside Audit & Supervisory Board Member,
YMC Co., Ltd. (to present)

1968 : Joined Daito Chemix Corporation
1992 : Director at Daito Chemix
2000: Managing Director at Daito Chemix
2002: Representative Director and President at Daito Chemix
2002: Representative Director and President,
and Chief Executive Ofﬁcer at Daito Chemix
2008: Director at NFC (to present)

Directors (Outside)

September 2000 : Joined NFC
September 2005 : General Manager of Manufacturing Ingredients ResearchLaboratory Ofﬁce
June
2006 : General Manager of Manufacturing Ingredients ResearchLaboratory Department
June2008 : Corporate Ofﬁcer
April
2009 : Deputy Senior General Manager of Research Laboratory Division
April
2011 : Senior General Manager of Cosmetic Ingredients DivisionJune
2011 : Director (to present)May
2013 : General Manager of Research Laboratory (to present)June
2021 : Senior Corporate Ofﬁcer (to present)
April
2023 : Senior General Manager of Research & Development
Division (to present)

Directors (Outside)

Chihiro Murase

Susumu Ota(Born June 17, 1945)(Born October 13, 1952)

Auditors

Standing Audit &Supervisory Board Member

Kiyoshi Horie(Born August 7, 1952)

April
1979 : Joined NFC
January 2000: General Manager of Household Products Research Laboratory
March
2000: General Manager of Kobe Plant
September 2001 : General Manager of Industrial Chemicals Laboratory
April
2004: General Manager of Industrial Chemicals DivisionJune
2004: Corporate Ofﬁcer
September 2005: General Manager of Development Laboratory
June
2006: Deputy Senior General Manager of Manufacturing &Technology Division and General Manager of Material
Technology Department
June
2008: Senior General Manager of Manufacturing &Technology Division and General Manager of
Kakogawa-higashi Plant
April
2009: Deputy General Manager of Manufacturing & Technology
Division and General Manager of Kakogawa-higashi Plant
June
2011 : Standing Audit & Supervisory Board Member (to present)

June

Tetsuo Masuda(Born October 29, 1945)11

1982 : Joined NFC
2007 : General Manager of Environmental Safety &Quality Assurance Department
2017 : Standing Audit & Supervisory Board Member (to present)

Standing Audit &Supervisory Board Member

Masanori Mitsuki(Born January 20, 1958)

April
April
April
April

Audit & Supervisory Board
Member (Outside)1970 : Registered with the Osaka Bar Association
1992 : Deputy Chairman of Osaka Bar Association
2004: Standing Director of Japan Federation of Bar Associations
2005: Chairman of Osaka Bar Association
Deputy Chairman of Japan Federation of Bar Associations
January 2007: Representative Partner of Nakanoshima Chuo Law Ofﬁce(to present)
April
2007: Chairman of Kinki Federation of Bar Associations
Governor of Kinki Federation of Bar Associations
June
2017 : Audit & Supervisory Board Member at NFC (to present)June2019 : Outside Auditor at Yanmar Holdings Co., Ltd.
March2020 : Outside Director of Ezaki Glico Co., Ltd. (to present)

April
June

Audit & Supervisory Board
Member (Outside)

Kazufumi Suzuki(Born February 11, 1976)

April
1998 : Joined Nissho Iwai Corporation (now Sojitz Corporation)
October 2013 : Joined Taiyo Koko Co., Ltd. as General Manager of Research& Development Department
June2014 : Director of Taiyo Koko, and General Manager ofResearch & DevelopmentJune2015 : Executive Corporate Ofﬁcer of Taiyo Koko, andBranch Manager of Tokyo Ofﬁce and General Manager ofResearch & DevelopmentJune2015 : Outside Director of Toho Kinzoku Co., Ltd. (to present)June2017 : Vice-President and Director of Taiyo Koko
June
2018 : Representative Director and President of Taiyo Koko
(to present)
March 2019 : Outside Director of Nichirin Co., Ltd. (to present)June
2021 : Audit & Supervisory Board Member at NFC (to present)

■ Corporate Governancevalue over the mid to long term, and for sustainable growth. We are working to construct a corporate governance systemand establish a sound, transparent, and highly effective management system, including meeting our management andexplanatory responsibilities towards our shareholders and other stakeholders.

Outline of the corporate governance system
Nippon Fine Chemical established an effective business execution■ Initiatives to strengthen corporate governanceJune: 2003function. The decision-making process of the matters for which business

June: 2008execution decisions are delegated to representative directors and/or

June: 2010decision-making/supervisory function and the business executive

other directors/corporate ofﬁcers, is clariﬁed based on the regulations.
The Board of Directors is made up of six members, including two
independent outside directors who are selected in order to further

Introduction of corporate ofﬁcer system
Abolition of the retirement beneﬁt systemfor directors
Appointment of one independent outside
director

December: 2019

Establishment of Nomination andRemuneration Committee

June

Increase of outside director ratio to 1/3: 2021enhance the supervisory function.
As the highest decision-making organization for management, it determines matters related to laws and regulations andofﬁcers. In addition, the Management Meeting, made up of the Representative Director and other full-time directors andcorporate ofﬁcers, deliberates referrals to the Board of Directors of key matters relating to management planning andmanagement policy from multiple perspectives to ensure accurate decision-making.
The Audit & Supervisory Board is made up of four auditors, including two outside auditors. The auditors audit the work of
the directors through investigations into the ﬁnancial status, work, and attendance at important meetings such as the Boardof Directors meetings based on the audit policies and audit plans determined by the Audit & Supervisory Board.

Business Content

the Articles of Association as well as other key matters, and supervises the business execution of directors and corporate

Management Storategy

system. The introduced corporate ofﬁcer system separates the

Top Message

Nippon Fine Chemical is aware that enhancing corporate governance is a key issue required for improving corporate

General Meeting of Shareholders
Appointment/Dismissal

Appointment/Dismissal
Audit

Board of Directors

Audit &
Supervisory Board

Appointment/
Dismissal

LiaiseAudit

Accounting Auditors

Appointment/Dismissal

Appointment/Dismissal

Representative Director, President

Sustainability

Nomination and Remuneration Committee

Management Meeting
Disclosure Committee

Internal Committee

Audit

Ethics Committee

Reporting

Sustainability CommitteeIntellectual Property Oversight Committee

Internal Audit Oﬃce
Audit

Departments and Group companies

Financial Data

Internal Control Committee
Company-wide Risk Management System Committee

Content done in FY2022- Number of Board of Directors meetings: 12- Number of Audit & Supervisory Board meetings : 13
- Number of Nomination and Remuneration
Committee meetings

Issues from FY2022- Deepening discussions on sustainability, including
TCFD responses and investment in human capital- Further strengthening of risk management: 5- Increased efficiency of Board of Directors meetings by

Non-financial Data

Highlights of governance from FY2022

improving materials for these meetings
12History of Nippon Fine Chemical

Establishments/Facilities

World/
Society

For a hundred years since our founding, we have contributed to the beauty and health, and prosperous livesof people.
We shall actively respond to upcoming changes in eras, always innovating, as we aim to become a corporationthat grow sustainably for the next hundred years, a corporation that can continue to oﬀer value to society.
1918-1929

1930s

1918:
World War One ends

1939:
World War Two starts

Since our founding, our business has focusedon camphor, which is used as a raw material for
pharmaceuticals, insect repellents, and celluloid.
We maintained our international competitivenessby afforestation projects using camphor trees,
which are where camphor comes from, andcarrying out research and manufacturing ofsynthetic camphor, in addition to selling reﬁned
camphor.
Products that use camphor as their raw
material include insect repellants such as
Fujisawa Camphor, Camphor (1933) and so on
for pharmaceutical use, and the Picolet seriesof air fresheners for toilets (1977).
The Picolet series was one of the main
drivers of our household products business,along with camphor for insect repellent, rightup to the 1990s, creating an era.

1950s

1945:
World War Two ends

On February 12, 1918, we were established as Nippon Camphor Co., Ltd.
in Kobe, and expanded our business in a form that corresponded to thegovernment policy to unify the camphor business.
As our domestic business developed and expanded, we moved into China
and Taiwan, but by the close of WW2, the bulk of our domestic facilities had
been destroyed, and our overseas facilities were requisitioned following thewar.
We rebuilt part of our camphor plant the year after the war ended andrestarted production, recovering along with the nation.

Nippon Camphor Co., Ltd.

Products/Technologies

1940s

1950:
Korean War starts

1962:
Prohibition of camphor
monopoly

A subsidiary was established with the purpose of manufacturing synthetic
camphor (1941). In our business transformation period (1954), Nippon Fine
Chemical continued working at the Kobe Plant and expanded into the fatty
acid and other oil-related products business.
In the early 1960s, we added more production facilities to our Kobe Plant,
and then built the new Kakogawa Plant (1969, now the Kakogawa-nishi
Plant) and the Takasago Plant (1970), further developing our production
facilities.

Research on manufacturing
synthetic camphor

Workers in the plant

1960s

In 1954, the rapid advancement of
petroleum-based plastics and overseas
synthetic camphor meant that we had todevelop new businesses, and so we started
our fatty acid and oil-related products
business.
Since then, we have started the productionof fatty acid chlorides (1956), butyl stearate,
IPM (isopropyl myristate), IPP (isopropyl
palmitate) and other fatty acid esters (1957),
and the production of Neutron, a fatty acidamide used for polyoleﬁn ﬁlm lubricants(1958). These products are almost monopolies
within domestic demand, and have formed
the driving force of our fatty acid andoil-related products business.
(See pp. 21-22)

Motoyama Plant(Kobe Plant, former Oils Plant)

In 1966, we moved ahead with R&D andcommercialization of cosmetics base materials as a
new ﬁeld, and started production of the Eselan
series of special high-grade cosmetics bases.
Following that, we have produced Arbutin, a raw
material for high added-value whitening cosmetics(1990), the Presome C series of phospholipids forcosmetics that add new functions to protect theskin and encourage its revitalization (1990), the
LUSPLAN series of high-gloss, high-adhesion liquid
functional esters (2001), the Plandool series ofhigh-foaming paste functional esters (2002), andthe Neosolue series of cosmetics esters that
dissolve in both water and oil (2007).
Today, we are still developing a variety of products,
including those with hair damage repair functions andthose with physiological functions derived fromrenewable natural raw materials.
(See pp. 17-18)

Camphor, etc.
LUSPLAN

NeutronPicolet series products

13

Liposome skin lotion(skin lotion containing Presome)

Plandool1970s

1980s

1986:
Equal Employment
Opportunity Law enacted

In 1971, we changed our company name to
Nippon Fine Chemical Co., Ltd., signifying a
new start with further aspirations for the
future as a ﬁne chemicals manufacturer.
In 1976, we relocated the Head Ofﬁce from
Kobe to Osaka, and in 1981, we set up a newlaboratory in the Takasago Plant.

Takasago Laboratory

FPC Plant

Facility for producing
phospholipids for pharmaceuticals

Spiro-MeOTAD structure(L) Overall view of the plant and oﬃce building
completed in FY2022(R) Shonan Health Innovation Park, in which
Nippon Fine Chemical has facilities

NLP

LP3

In 1990, we acquired shares in a company which
manufactured and sold medical soap liquids, and thefollowing year we changed its name to Arbos Co., Ltd.
Arbos manufactures and sells a range of commercial
cleansers, pharmaceuticals, non-pharmacy products,
cosmetics and more. In the recent COVID-19 pandemic,
it contributed greatly by delivering hygiene products tohomes, companies, facilities, and other areas where
they were needed.

Arbos products

In 1995, we merged with Yoshikawa Oil and Fat Co.,
Ltd., manufacturers of lanolin for raw materials used incosmetics and pharmaceuticals.
Along with inheriting their expertise in the lanolin, cholesterol,and other derivatives businesses,
the business has evolved to form
one of the core businessesof Nippon Fine Chemical.
(see p.24)

Non-financial Data

NSC coatings

We added a plant (NLP) that can handle the increased
demand for phospholipids for pharmaceuticals and a
dedicated plant (LP3) based on an alliance with Gilead
Sciences, Inc. in 2022.

Financial Data

We started researching lipids for pharmaceuticals
to increase the added value of our fatty acidand oil-related products business, and in 1986
we started providing the market with our ﬁrst
phospholipid product, dipalmitoylphosphatidylcholine(DPPC). Since then, we have not stopped withhigh-purity lipids or cholesterol lipid products,
but have continued to manufacture and sell
Presome, our unique lipid admixture, and ourcore product groups meet the GMP international
standard for the manufacture and quality
control of pharmaceuticals.
In recent years, to handle the changing medical
industry, which is seeing things like thedevelopment of nucleic acid medicine/lipid
nanoparticle formulation as shown in the COVID-19
vaccine, in 2022 we completed construction of aplant to handle the increasing demand forphospholipids for pharmaceuticals and a dedicatedplant based on an alliance with Gilead Sciences,along with a special ofﬁce building where we willbring together various functions so that we cansmoothly handle responses. Moreover, in April
2023, we opened the Shonan Laboratory, which
is aimed at promoting open innovation, within
the Shonan Health Innovation Park. We arealways evolving.
(See pp.19-20, p.23)

2018:
Nippon Fine Chemicalcelebrates its centennial
2020:
COVID-19 coronavirus
pandemic

Sustainability

Developing the technologies we fostered in
the fatty acid and oil-related products business,
we started the production of a number of ﬁne
chemicals, including PNC-390, a monomer raw
material for inﬂammable elastomers (1978);
Solanesol, a raw material for the Q10 coenzyme(1979); DEET, a mosquito repellent (1981); NSC,
a plastic surface hardener (1982); Albath, atablet-type bath salt (1985); and Squalane, an
LD oil reﬁned from shark oils (1986). These
products supported the company during the
1980s.
Based on the synthesizing and evaluation
technologies we have built up this way over many
years, we continue to supply raw materials andintermediates for pharmaceuticals, functional
resins, electronic materials, and a variety ofother industrial ﬁelds.
Today, our Spiro-MeOTAD, a material usedin perovskite solar cells, is attracting a lot of
attention.
(See pp. 21-22)

In 1986, we established a pilot plant suitable
for the manufacture of investigational drugintermediates for pharmaceuticals at the Takasago
Plant, and then expanded our production
facilities at the Takasago Plant, the Kakogawa
Plant (now the Kakogawa-nishi Plant), and the
Kakogawa-higashi Plant.
Along with these investments in facilities, we
also accumulated more advanced technologies.

2008:
Lehman Brothers
bankruptcy
2011:
Great East Japan
Earthquake2010 onBusiness Content

Former Head Oﬃce building

1995:
Great Hanshin-Awaji
Earthquake

2000s

Management Storategy

1973:
First Oil Crisis

1990s

Top Message

History of Nippon Fine Chemical

14

Nippon Fine Chemical Group Businesses
Our businesses cover the two segments of Functional Products and Environmental Hygiene Products,
and four key ﬁelds.

Business segments
Business segments

Group companies

Beauty care field●

NIPPON FINE CHEMICAL CO., LTD.

●

Nissei Bilis Co., Ltd.

●

Oleotrade International Co., Ltd.

●NISSEI PLAS-TECH CORPORATION●

Sichuan Nipo Fine Chemical Co., Ltd.

●

Zillion Fine Chemicals International Co., Ltd.

Environmental Hygiene Products●

Arbos Co., Ltd.

Hygiene ﬁeld

Other

●

Nissei Bilis Co., Ltd.

Real estate

Functional ProductsCore technologies that support our businesses

15

Business fields

Health care field
Fine chemicals field
Trading

Top Message

Four key business ﬁelds
Health care ﬁeld

● Phospholipids for cosmetics● DDS materials/development● Active ingredients● Pharmaceutical Intermediates● Pharmacology/safety testing● Wool grease derivatives forand manufacturing support● Functional esters for cosmetics● Natural polysaccharides● Wool grease derivatives
for cosmetics

pharmaceuticals

DDS: Drug Delivery System

Hygiene ﬁeld

● Assorted acid chlorides● Materials for perovskite
solar cells● Functional coatings (NSC)● Resin additives● Lubricants for powder metallurgy● Assorted wool grease derivatives

Sustainability● Hand soap liquids● Hand sanitizers● Public health products● Food sanitation products● Medical hygiene products

Business Content

Fine chemicals
ﬁled

Synthetic organic
chemistry
Polymer chemistry
OleochemistrySurface science
Dermatology
Nanotechnology

Management Storategy

Beauty care ﬁeld

Comparison of key business ﬁelds

8.0 billion yen
29%

Operating proﬁt composition ratio

7.6 billion yen
27%

FY2022

0.9 billion yen
20 %billion yen
6.4 billion yen
23%

5.7 billion yen
21%● Beauty care

● Health care

FY2022

4.5

billion yen

0.9 billion yen
20 %● Fine chemicals

2.0 billion yen
44%

Non-financial Data

27.7

0.7 billion yen
16%

Financial Data

Sales composition ratio● Hygiene

16

Functional Products: Beauty Care Field
Sustaining KIREI, creating a society full of smiles.

Functional products segment
Sales composition ratio

Functional products segment
Operating proﬁt composition ratio

FY2022

FY2022

7.6

39%

2.0

billion yen

billion yen

Medium-term management plan

52%

Basic policy

For the beauty care ﬁeld, we have positioned “Phospholipids for cosmetics,” “Functional esters for cosmetics,”
and “Active ingredients” as the three ﬁelds to focus on, which we do so based on the following basic policy.
- Expansion of sales of phospholipid materials for cosmetics and development of a system to increase production(boosting capital investment)- Expansion of sales to overseas markets, especially the West and China, where high growth is expected- Expanding sustainable products such as RSPO and non-GMO**RSPO: Roundtable on Sustainable Palm Oil (certification system)
Non-GMO: Not genetically-modified organisms

Phospholipids for cosmetics
Main products●Liposome precursors- Phytopresome™ series- Presome™ series●Natural origin emulsiﬁers- Phytocompo™ series- Composite series●Bioactive lipids- PrimeLipid™ series

In our Liposome precursors, we offer the Phytopresome™ and Presome™
series. We have received high praise from customers who have used lotions
and serums containing active ingredients such as ceramides and astaxanthin.
In our Natural origin emulsiﬁers, we offer the Phytocompo™ and Composite
series.
These ﬁnd use in emulsions, creams, sunscreens, and in hypoallergenic
cosmetics that can be used even by people with sensitive skin.
Our PrimeLipid™ series offers new value for phospholipid materials basedon solid evidence.

17

Top Message

Functional esters for cosmetics
Main products●Plant derived esters●Highly soluble esters●Products for haircare- Neosolue™ series- Plandool™ series- LUSPLAN™ series- FineNeo™ series- NanoRepair™ series- Erucalactone series

Management Storategy●Functional esters

Business Content

At Nippon Fine Chemical, we offer a range of sustainable materials made from carefully selected plant oils, whichshare of overseas sales.
In addition, we offer a diverse lineup that covers skin care, hair care, make-up, and sunscreens, accurately
identifying customer issues in these areas, and offering a full support system right from prescription development.

Sustainability

are highly regarded by customers not just in Japan, but around the world. We shall continue aiming to increase theActive ingredients●Skin brightening agent- Arbutin- Ethyl ascorbic acid
- Tranexamic acid

●Polysaccharides- Tremella fuciformis polysaccharide Tremoist™ series- Inulin-SC

Financial Data

Main products

At Nippon Fine Chemical, we also offer unique bioactive
substances.
In skin brightening agents, our lineup covers the three types
and Tranexamic acid. We offer support from prescription
development to pharmaceutical applications to suit ourcustomersʼ development concepts.
In addition to the Tremella fuciformis polysaccharide
Tremoist™ series, a fungus which the famed beauty Yang
Guifei is said to have favored, we also provide Inulin, which

Non-financial Data

of Arbutin, Ethyl ascorbic acid which is a Vitamin C derivative,

ﬁxes the microbiome, as a raw material for cosmetics.

18

Functional Products: Health Care Field
Contributing to “Health: KIREI” and to a society full of smiles through chemistry.

Functional products segment
Sales composition ratio

Functional products segment
Operating proﬁt composition ratio

FY2022

FY2022billion yen

billion yen

5.7

0.9

24%
29%

Medium-term management plan

Basic policy

In the health care ﬁeld, our focus areas are pharmaceutical lipids such as phospholipid materials and cholesterol,
which we carry out based on the following basic policy.
- Solid startup of production based on large-scale investment in phospholipids for Pharmaceuticals- Expansion of business from being focused on small molecular pharmaceuticals to areas such as nucleic acid
pharmaceuticals where high growth is expected- Focus on being a CDMO for the development of pharmaceuticals

Lipids and cholesterol for pharmaceuticals
Main products●A range of lipids for pharmaceuticals- Phospholipids for pharmaceuticals- High purity cholesterol- Cationic lipids for nucleic acid medicines
Note: Supports GMP

At Nippon Fine Chemical, we manufacture a range of phospholipids forpharmaceuticals using our proprietary production process. One of ourstrengths is being able to manufacture high purity cholesterols in-house.
Our lipids are manufactured according to GMP, and enjoy high levelsof trust among customers both in Japan and overseas. Our lipids havebeen used in a large number of pharmaceuticals.
In addition to our core products, we offer liposome materials that caneasily carry out cationic lipid and drug repositioning, which are essential
for the LNP formulations that gained note in the COVID-19 vaccine.
【Abbreviations】 LNP : Lipid Nano Particle
CDMO : Contract Development Manufacturing Organization
GMP : Good Manufacturing Practice19

Top Message

Support for the development and manufacture of pharmaceuticals
Main products and services- Presome™

- Liposome preparation studies- LNP preparation studies

There is increasing segmentation of ﬁelds within the
medical industry in recent years.
At Nippon Fine Chemical, we actively engage in CDMO
services to support drug development using our lipid
nanoparticle production technology as our base technology.
developed by Nippon Fine Chemical, we carry a wide rangeof phospholipids essential for LNP formulations, such as
the COVID-19 vaccine, from general-purpose materials toproprietary materials, allowing us to assist in the developmentof the ﬁeld of nucleic acid pharmaceuticales.
We can respond to customer requests quickly.

Business Content

In addition to the liposome technology independently

Management Storategy●DDS materials/CDMO services

LNP schematic diagram
Sustainability

This is a formulation in which particles containing a nucleic acidas a drug substance enveloped in cationic lipids are containedin a capsule made of phospholipids and cholesterol

Pharmacology/safety testing
Main services- Safety testing/safety pharmacology testing- Mock usage testing of medical devices

In the contract business department of Nissei
Bilis Co., Ltd., we work on pharmacology/safety
testing within the pharmaceuticals ﬁeld.

Financial Data

- Drug efﬁcacy pharmacology testing for pharmaceuticals- Non-clinical testing of regenerative medicine products

We contribute to maintaining people's health andthe social environment by evaluating the safety andeffectiveness of pharmaceuticals, medical devices,
In addition, we will also have an animal-friendly
laboratory that meets international standards andadheres strictly to the 3Rs principle.
*3Rs:- Refinement : reducing the suffering of animals- Reduction: reducing the number used
- Replacement : finding replacements

Non-financial Data

regenerative medicine products, and more.

20

Functional Products: Fine Chemicals Field
Our high purity, high quality new materials help make the future KIREI.

Functional products segment
Sales composition ratio

Functional products segment
Operating proﬁt composition ratio

24%
32%

FY2022

FY2022billion yen

billion yen

6.4

0.9

Medium-term management plan

Basic policy

In the ﬁne chemicals ﬁeld, we utilize our organic synthesis technologies in the two ﬁelds of electronics andresources/energy to offer a range of materials. The medium-term management plan is run in accordance with thefollowing basic policy.
- Contributing to the commercialization of perovskite solar cells (Resources & Energy)- Expansion of sales of materials for high dielectric constant resins used in next-generation communication
technologies (Electronics)- Reorganization of low-proﬁt products

Materials related to electronics and resource energy
Main products●Materials for perovskite
solar cells●A range of materials for engineering plastic- High-purity organic acid chloride●Resin additives- Release agents, lubricants

At Nippon Fine Chemical, we can offer a range of acidchlorides by utilizing our specialty halogenation technology.
These acid chlorides are essential materials for engineering
plastics such as polyimide and polyamideimide.
We will focus on the electronics market, where
demand for products such as substrates for high-speed
communication is expected to increase even further.
In addition, the ﬁelds where Nippon Fine Chemical
Substrates for high-speed communication

21

Perovskite solar cells(Photo credit:Toin University of Yokohama)materials are used are expanding more and more even in
the resources and energy ﬁelds, such as for perovskite
solar cells.

Top Message

Fatty acid amides
Main products- Neutron™ series

One of Nippon Fine Chemicalʼs top products is our fatty
acid amides.
These are produced by Sichuan Nipo Fine Chemical, an
afﬁliate located in Sichuan Province, China.
By adding these to the surfaces of shopping bags, it iseasier to separate the two surfaces when they are stuck
as plastic additives.
There has been a large increase in environmentally-friendly
plastics recently.
We are focusing on expanding sales to target markets like this.

Business Content

together. This is just one of the ways these amides are used

Management Storategy●Fatty acid amides

Functional coatings (NSC)
Sustainability

Main products- Hard coatings for helmet visors- Anti-fogging coatings- Hard coatings for medical goggles- Hydrophilic coatings

Coatings to prevent scratches
or fogging for medical goggles or
Chemical products, helping people
see more KIREI.
We will focus on this segment,
where we expect more and moredemand in future for products like

Financial Data

helmet visors also use Nippon Fineanti-fogging or hydrophilic coatings.

Non-financial Data
22

FocusMaterial

Phospholipids
The power inherent in our phospholipids helps makes things KIREI.

Smile on Faces; The KIREI power of the Phospholipids,
by Nippon Fine Chemical.
We shall boost our R&D and sales for phospholipids in the ﬁelds of beauty care and health care, where we expect tosee further market growth in the future, aiming have people say “when it comes to phospholipids, look no further than
Nippon Fine Chemical.”Beauty care ﬁeld

Health care ﬁeld

Markets

Markets- Skin care forecast to grow 7.5% CAGR
in the global market (2020-2030)- Nucleic acid medicine forecast to grow
16.6% CAGR (2020-2026)- The market drivers will be the United States,
China, and Europe- Segmentation of pharmaceuticals development

Initiatives

Initiatives- Differentiation through LNP/liposome technology- Strengthening sales overseas- Solid maintenance and expansion of existing
businesses- Expand production capacity to expand sales- Utilize up-cycled raw materials and expand uses

- Maintain GMP-compliant production andassurance system

We have published a special site for phospholipids.
With plenty of illustrations, it is a fun way to easily learn about phospholipids.
See: https://www.nipponseika.co.jp/en/phospholipid/23

FocusMaterial

Lanolin and Cholesterol

Lanolin is a natural oil obtained by purifying wool grease, the lipid components adhering to wool. Lanolin contains

Top Message

Sustainable materials from wool

many components similar to human epidermal lipids such as cholesterol and branched fatty acids.
Lanolin is not an internal fat (subcutaneous fat) like lard or tallow. Rather, it is obtained from wool sheared every year
and does not harm animals in any way. It is a recyclable, sustainable material that is safe and people-friendly,
These characteristics are leveraged to use it in a wide variety of applications in the functional products segments ofbeauty care, health care, and ﬁne chemicals.

Beauty care ﬁeld

Health care ﬁeld
Main products

Ecolano™ series- Lanolin for pharmaceuticals- Lanolin for cosmetics- High-purity cholesterol- Cholesterol for cosmetics- Cholesterol derivatives for cosmetics

Main uses- Ointments for pharmaceuticals

Main uses- Liposome/LNP* formulations- Skin care: barrier functions*LNP: Lipid Nano Particle

Business Content

Main productsManagement Storategy

sheep-friendly, and environment-friendly.

- Hair care: hair surface modiﬁcation oils
- Make-up: pigment dispersion/gloss
Sustainability

Fine chemicals ﬁled
Main products- Rust prevention/lubricants (LanoAce™ series)- Cholesterol for LCDs
- Cholesterol for animal feed

Financial Data

Main uses- Rust inhibitors for car bodies and lubricants
for metals‐ LC displays- For shrimp feed
Our lanolin/cholesterol mascots:
Ecola (L) and Lano (R)Non-financial Data24

■ Sustainability Philosophies and Framework
Basic sustainability policy
Our Management Philosophy of "Contributing to Society ThroughChemistry" as well as the "Smiles on Faces: The Power of KIREI" in our
long-term vision, the NFC VISION 2030, and our sub-concept of helping
to sustain the three "KIREIs" of the Earth, society, and the future, form
the basis of our basic sustainability policy, "Aiming for our sustainablegrowth and to bring about a sustainable society".
To carry out this basic policy properly, we have established a Sustainability
Ofﬁce and Sustainability Committee, set KPIs (key performance indicators),
and are working on special related initiatives.
We shall continue to ensure sustainability awareness reaches each andevery employee, and, through each of our initiatives, brings about the three "KIREIs" of the Earth, society, and the future,contributing to the smiles of everyone who is part of our company.

Sustainability organizations
We have established a Sustainability

Board of Directors

Committee, chaired by our Representative
Director, President and composed ofRepresentative Director, President

members selected from each division andGroup company.
The Committee identiﬁes materialities

Management Meeting(key issues), plans out promotion activities,
and manages progress. The progress results

Sustainability Committee

are reported to the Management Meeting（Membership: Sales, Purchasing, Production, Research,
Administration Divisions and Committees of Group companies）

and the Board of Directors, and the Board of
Directors supervises the progress of

Sustainability Committee Secretariat
Sustainability Oﬃce

Administration Divisions

activities. Operations are handled by thesecretariat, which is Administration Divisions,and the Sustainability Ofﬁce.

Basic management policy on environment, safety, and quality
At Nippon Fine Chemical, we
have set basic policies for theenvironment, safety, and quality

Environment

Nippon Fine Chemical is independently and continuously developing environmental
impact assessment and reduction activities in all processes, from product development
to manufacturing, use, and disposal, as well as complying with laws and regulations
related to business activities, in its effort to protect the global environment.

SafetyNippon Fine Chemical will continue to run operations without accidents and disasters
to ensure the safety of employees and local communities. Nippon Fine Chemical
speciﬁes the properties of products and how to handle them to protect the safety andhealth of all users including customers.

Quality

Nippon Fine Chemical will continue to provide quality products and services thatsatisfy customers and are reliable.

as follows, and all employees
independently and continuously
make improvements based onthese basic policies, fulﬁlling
our social responsibility.

25

Initiatives in line with TCFD recommendations

Top Message

Participation in initiatives and information disclosure

Nippon Fine Chemical uses raw materials derived fromfossils and fossil fuel as energy sources in the
manufacture of many of our products. Based on ourrecognition that risks and opportunities due to climate
we declared our support for the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
We are using scenario analysis to assess the risks and opportunities of the impact of climate change on ourbusiness. Going forward, we will recognize its signiﬁcance, strengthen the resilience of our strategies by reﬂecting
such impact in our management measures and strengthen relationships of trust with our stakeholders. In addition,
we have joined the TCFD Consortium, and are working to collect and share information related to TCFD.

See: https://www.nipponseika.co.jp/en/sustainability/pdf/tcfdreport̲2023.pdf

Transition to the TSE Prime Market

Nippon Fine Chemical supports

In April 2022, Nippon Fine

the Ten Principles related to theChemical moved from the First

four ﬁelds of Human Rights,

Section to the Prime Market ofLabour, the Environment, andthe Tokyo Stock Exchange.

Anti-Corruption as stated by theWith this, we actively began

United Nations Global Compact

working on further strengthening
our corporate governance andto achieve them. (see p.29)

internal management system.

Sustainability(UNGC), and continues striving

Business Content

Participation in the United Nations Global Compact

Management Storategy

change are key management issues, in December 2021,

Information disclosure on platforms
EcoVadis, and Sedex, striving to increase our management transparency and build trusting relationships with our
stakeholders.

EcoVadis

Sedex

This is an NGO run by a British
charity organization for managing
environmental impacts. Nippon
Fine Chemical responded to theirclimate change questionnaire andtheir water security questionnaire in
FY2022.

This is a provider of rankings
founded in France, and Nippon
Fine Chemical obtained a Silver
Medal in FY2022.

A UK-based NPO, it enables thesharing of CSR self-assessment
questionnaire results and audit
results on an electronic platform.
Nippon Fine Chemical is one ofits users.

Non-financial Data

CDP

Financial Data

Nippon Fine Chemical discloses and shares ﬁnancial and non-ﬁnancial information on platforms such as CDP,

26

■ Materialities
Identifying materialities
At Nippon Fine Chemical, we identify materialities related to sustainability using the following steps.
1. Set the 34 GRI Standard items the basic materialities.
2. Create a matrix based on the two axes of “Importance to Stakeholders” and “Importance to Our Group.”
3. Following discussions at the Sustainability Committee, the materialities are ﬁnally categorized into ﬁve elements(22 items), the "Materialities to be Addressed."

Materialities matrix

Importance to Stakeholders

Materialities to be Addressed
Human Rights

Environment

405:Diversity and Equal Opportunity

301:Materials

408:Child Labor

302:Energy

409:Forced or Compulsory Labor

303:Water and Effluents

412:Human Rights Assessment

305:Emissions
306:Waste

202:Market Presence
207:Tax
304:Biodiversity
406:Non-discrimination

307:Environmental Compliance

Compliance

308:Supplier Environmental Assessment

205:Anti-corruption

413:Local Communities

206:Anti-competitive Behavior
418:Customer Privacy

Occupational Health and Safety

419:Socioeconomic Compliance

401:Employment
403:Occupational Health and Safety

Product Safety,Quality
414:Supplier Social Assessment

404:Training and Education involves
all five factors above

416:Customer Health Safety
417:Marketing and Labeling203:Indirect Economic Impacts

201:Economic Performance

204:Procurement Practices

402:Labor/Management Relations

410:Security Practices

407:Freedom of Association and Collective Bargaining

411:Rights of Indigenous Peoples
415:Public Policy

Importance to Our Group

Initiatives and KPIs
The identiﬁed 22 materialities to be addressed
are categorized into the three sub-concepts in
Nippon Fine Chemicalʼs long-term vision, "NFCVISION 2030", and then speciﬁc actions, KPIs
(key performance indicators), and numerical goals
have been set as shown in the table.

NFC VISION 2030
KIREI of the future
Sustaining the KIREI of the future through diversity-driven innovation

KIREI of the Earth
Sustaining the KIREI of the Earth through sustainable manufacturing

KIREI of society
Sustaining the KIREI of communities through compliance,safety,and actions
that ensure peace of mind

27

Theme- With the aim of having 30% or more ratio of
females in management by the 2030s, thegoals are to have 20% or more ratio of female
employees, as well as 15% or more ratio of
females in management and management
candidate by FY 2027.

- Ratio of females inmanagement: 0%- Ratio of female employees: 15%- Ratio of females inmanagement andmanagement
candidate: 7%

Achieve work-life balance by
supporting child-rearing andlong-term care
(KIREI of the future)- Ratio of child-careleave taken- Speciﬁc measures forlong-term care

- The goal is to take 70% or more ratio ofchild-care leave by the end of FY 2025.
- The speciﬁc measures for long-term care areconsidered.

- Ratio of child-care leave
taken: 38%

Develop products that can
co-exist with the environment(KIREI of the future and Earth)- Amount of R&D
investment- Number of patents- The goal is to have 750 million yen of
research and development investment in FY
2022.
- The goal is to apply 75 patents over the ﬁve
years between FY 2022 and 2026.

- Amount of R&D investment:
780 million yen- Number of patents: 16

Reduce emissions of substancestargeted by the PRTR System(KIREI of the Earth)- Amount of emissions of
substance stargeted by
the PRTR System- With the aim to reduce the amount of
movement by 50% or more compared to FY
2020 by the end of FY 2030, the speciﬁcstudies are carried out.

- Amount of emissions of
substance stargeted by the
PRTR System: 33%increase- Amount of greenhousegas emissions- Amount of renewableenergy used

- The speciﬁc studies are carried out to meetthe government target of reducing CO2
emissions in the industrial sector by 38% of
FY 2013 levels by 2030, based on the goal ofachieving carbon neutrality by 2050.
- The goal is to achieve 100% renewable energy
for purchased electricity by the end of FY
2023.

- Amount of greenhouse gas
emissions: 33% reduction- Amount of renewableenergy used:100%- Amount of industrial
waste generated- Recycling rate

- The speciﬁc studies are carried out to reduce
the generated amount of industrial waste by
20% or more compared to FY 2019 by the endof FY 2030.
- The speciﬁc studies are carried out to achieve
90% or more recycling rate by the end of FY
2030.

- Amount of industrial waste
generated: 30% increase- Recycling rate: 69%

Strengthen the effective use ofwater resources(KIREI of the Earth)- Amount of water used
- Amount of efﬂuent- The speciﬁc studies are carried out to reduce
the used amount of water by 10% or morecompared to FY 2019 by the end of FY 2030.
- The speciﬁc studies are carried out to reduce
the amount of efﬂuent by 10% or morecompared to FY 2019 by the end of FY 2030.

- Amount of water used: 15%
reduction- Amount of efﬂuent: 18%
reduction

Strengthen compliance(KIREI of society)- Rate of compliancetraining session
attendance- The goal is to achieve 100% attendance rateof compliance training session.

- Rate of compliance training
session attendance: 100%

- Number of workplace
accidents- Rate of training session
attendance (chemical
substance, safety
training)- Rate of stress check
implementation- The goal is to achieve zero occurrence ofworkplace accidents every ﬁscal year.
- The goals is to achieve 100% attendance rate oftrainee session for chemical substances/safety
training, etc. every ﬁscal year.
- The goal is to achieve 85% or more
implementation rate of stress check every ﬁscal
year.

- Number of workplace
accidents: 6- Rate of training session
attendance (chemical
substance, safety
training):100%- Rate of stress check
implementation:93%- Number of quality
claims- The goal is to reduce the number of quality
claims by 50% from that of previous ﬁscal year
in each ﬁscal year.

- Number of quality claims:
45% reduction

Reduce industrial wasteandpromote resource recycling(KIREI of the Earth)

Occupational Prevent workplace accidents andensure health and safety for
Healthworkers
and Safety(KIREI of society)Contribute to society throughsafe and reliable products(KIREI of society)Non-financial Data

- Ratio of disabled people
hired:2.67%

Financial Data

- Ratio of disabled people - The goal is to have 2.3% or more ratio of
disabled people hired by the end of FY 2023.
hired

Sustainability

Be a workplace wherepeople canwork equally regardless of
disability(KIREI of the future)

SDGs

Business Content-Ratio of female
employees-Ratio of females
in management

Environment

Product
Safety &Quality

Performance*

Be a company where women canplay an active role
(KIREI of the future)

Contribute to achieving acarbon-neutral society(KIREI of the Earth)Compliance

Numerical Goals*

Management Storategy

Human
Rights

KPIs
Initiatives（NFC VISION 2030） (Key Performance
Indicators)

Top Message

Status of materiality initiatives for FY2022*The goals and the performances are of Nippon Fine Chemical alone.

28

■ Respect for Human Rights
Basic ideas
The Nippon Fine Chemical Group set the Nippon Fine ChemicalGroup Human Rights Policy in March 2023. This is in accordancewith our principle of respecting the rights of all persons involved
with our business activities and avoiding any and all discriminatory
treatment, and based on the International Bill of Human Rights,
the ILO Declaration on Fundamental Principles and Rights at Work,the Ten Principles of the UN Global Compact, and the UN Guiding
Principles on Business and Human Rights.
Our Human Rights Policy lays out the Groupʼs policies vis-a-vis all our ofﬁcers and employees, as well as our business
partners and suppliers with the expectation that they will participate in similar initiatives. We shall continue to encourageand collaborate with them in order to promote initiatives that respect human rights.

Initiatives
Participation in the United Nations Global Compact

Initiatives for Human Rights Due Diligence

In March 2023, Nippon Fine Chemical announced

The Nippon Fine Chemical Group is working on

we would become a signatory to the United Nations

Human Rights Due Diligence in order to identify

Global Compact (UNGC) and support the UNGC as

negative effects on human rights, and prevent or

a participating company.

mitigate them.

Designed to create a sound global society, theUsing a risk assessment method that references

UNGC is the worldʼs biggest sustainability initiative.

various guidelines on human rights, we have identiﬁed

The signatory companies and groups agree to upholdand evaluated risks that could create negative effects

its ten principles related to the four areas of humanon human rights (human rights risks), and which could

Rights, labor, the environment, and preventing

come about through our Groupʼs business activities.

corruption, and are required to continually work
towards achieving these.

In addition, based on this we have speciﬁed priority
risks our Group will deal with.

We promote ESG management in line with theTen Principles of the UNGC as a way to achieve theSDGs that aim to create a sustainable society,based on our basic sustainability policy which aims
to achieve both sustainable corporate growth andto bring about a sustainable society.

■Priority risks
The Nippon Fine Chemical Group has speciﬁed
the following eight priority risks. We shall work to
be aware of the current situation and take suchmeasures as many be needed. These priority risks
will be continually revisited.

■Priority risks
Priority Risks

29Groups affected

Main risks

Access to relief offices

All stakeholders

Inappropriate responses when infringements of human rights
are noticed

Employee privacy

Nippon Fine Chemical employees

Leaking of employeesʼ personal information

HR and labor for employees

Nippon Fine Chemical employees

Unpaid wages, interference with freedom of association andcollective bargaining, and undeveloped disciplinary systems

Health and safety of employees

Nippon Fine Chemical employees

Dangers, harsh working environments, fires/explosions

Health and safety of local communities

Local communities

Damage to local communities and health impacts from fires,
explosions, or chemical leaks

Health and safety of clients and consumers

Clients, Consumers

Obstruction of client/consumer choice due to lack of appropriate
product information

Health and safety in the supply chain

Suppliers

Dangers, harsh working environments, fires/explosions

Child labor in the supply chain

Suppliers

Child labor, dangerous work assignments, harsh working conditions

Policy for developing the internal environment

Depict a human resources portfolio that can

We shall contribute improving both the work andcontribute to achieving business strategies andlife of each and every employee, working closely withcreating innovation, and work on the diversity ofthe diverse values of workplace members, with theknowledge and experience within an organization

aim of creating a company of smiles through work,

towards this. In addition, we will contribute to thewhere people can take pride in being a Nippon Fine

realization of a culture in which each and every

Chemical employee.

employee can sense their growth and continues to■A workplace environment that is easy to work in■Diversity

To work towards improving the work-life balance ina way that our employeesʼ diverse values into account,

The NFC VISION 2030 includes “Sustaining the KIREI

we are developing systems that make it easier toof the future through diversity-driven innovation.” We

work, such as bringing in a teleworking system orare implementing a range of different initiatives toworking interval system. In addition, we are working toachieve the targets we have set for promoting thedevelop a safe, secure, and comfortable workplaceempowerment of women.

environment to allow our employees to make full use■Developing human resourcesof their abilities.

■Support for balance

employee is connected to the sustained development

By improving the quality of employeesʼ work-lifeof our company, we shall contribute to the proactivebalance, we can increase engagement with work, which

career development of individual employees, starting

leads to company expansion. To that end, we arepromoting initiatives towards supporting employees who
work while balancing child-raising, caregiving, and so on.

Freedom of association and the right to collective bargaining

Enacting harassment prevention measures

At Nippon Fine Chemical, the Nippon Fine Chemical
Workersʼ Union was formed in 1971 as an employeesʼ

The Nippon Fine Chemical Group is working toensure sound workplace environments without

union, and remains active today. About 76% of all

discrimination or harassment from a stance of “Do

employees are organized.

not do, do not cause, do not allow” harassment such

We are working to maintain and further strengthensound, smooth labor-management relations throughSustainability

with support for rank-speciﬁc group training andindependent learning for employees' own growth.

Business Content

Based on the idea that the growth of each and every

Management Storategy

work towards self-actualization.

Top Message

Human resources development policy

as power harassment, sexual harassment, maternity
harassment and so on.

frequent dialogues and respecting each otherʼsposition.

Nippon Fine Chemical identiﬁes hiring the disabled as one of the points in
Diversity & Inclusion one of the goals of NFC VISION 2030, and is promoting

Financial Data

Smile Farm (hiring the disabled)

their employment.
At the same time, we are a chemicals products plant, and there are many
situations where it is hard to provide employment to the disabled. So in June
Nippon Fine Chemical Co., Ltd. Smile Farm in Yodogawa Ward, Osaka.
At Smile Farm, which has the watchword, “Smiles for everyone through thepower of vegetables,” two NFC employees serve as farm managers, working
alongside six disabled NFC employees to hydroponically grow vegetables.
The harvested vegetables are provided to childrenʼs cafeterias in Osaka andHyogo prefectures, helping us ensure ESG management.

Non-financial Data

2022, we participated in the social farm of S-Pool Plus, Inc. and opened30

■ Environmental Preservation
Basic ideas
Nippon Fine Chemical is independently and continuously developing environmental impact assessment and reduction
activities in all processes, from product development to manufacturing, use, and disposal, as well as complying with laws
and regulations related to business activities, in its effort to protect the globe.

Environmental management system
At the Kakogawa-higashi Plant and Takasago Plant, Nippon Fine Chemicalʼs main sites, we have obtained ISO
14001 Environmental Management System (ISO14001:2015) certiﬁcation, and are promoting environmental
preservation through our business activities in accordance with speciﬁc environmental policies.
In addition, since obtaining certiﬁcation, we have been inspected annually by the certiﬁcation organization to
conﬁrm our compliance with standards, and we are working on ongoing improvements and effective activities.

Environmental policy
Nippon Fine Chemical's Kakogawa-Higashi Plant and Takasago Plant produce raw materials for cosmetics, forpharmaceuticals, and functional ingredients, etc. To continue pursuing production operations, policies concerning theenvironment have been established as follows, and we are working towards continuous improvement.
1. Our production is designed to understand and comply with environmentally-related laws and regulations, andensure there are no serious effects on the environment in or outside our company.
2. We are reducing the usage of chemical substances that impact the environment and using raw materials thatconsider sustainability to provide environmentally-friendly products.
3. Speciﬁc targets, goals, and periods are set, energy-saving activities are done in a planned fashion, and we saveresources and reduce the amount of waste generated.
4. We work to suppress or mitigate the dispersion of bad smells (waste water, raw materials, or other bad smells
arising from production) to co-exist with the community.

Material ﬂow
The material ﬂow of our production
activities for FY2022 is as shown in

INPUT

OUTPUTthe diagram to the right.

Carbon dioxide
12,429 t

We are always striving to produce
more products efﬁciently using lessraw material, energy and water, while
producing less waste.

Note: For “Energy” here, city gas, electricity
and other energy sources are used, so
the energy conversion coefficient as per
the Act on the Rational Use of Energy isused and the unit standardized as KL.

31

Energy9,136KL

Water
410,129 t

FY2022
production
activities

Materials covered by
the Law concerning Pollutant
Release and Transfer Register

29 t

Waste
2,806 tWaste water
187,137 t

The manufacture and sale of chemical substances

Supplier

regulations, including the Chemical Substances
Control Law, the Industrial Safety and Health
Act, Poisonous and Deleterious Substances Control
Law, the Fire Services Act, the Air Pollution Control
Nippon Fine Chemical complies with thesevarious environmental laws and regulations, aswell as the bylaws and agreements of various
local authorities. In addition, to minimize theenvironmental burden, the harm to humans, andthe danger of our production processes, we carry

Management of
the Chemical Substances
Control Law, Industrial
Safety and Health Act,
Poisonous and Deleterious
Substances Control Law,
Fire Service Act, overseas
legal regulations, etc.

SDS

Raw materials
WorkerChemical substances
Resources
Products

Atmospheric,water quality,
soil, waste
management

SDS/
Yellow Card
management

Clients

Energy managementout comprehensive management of environmentally

Waste

Management Storategy

Act, and the Water Pollution Prevention Act.

Health and safety/
occupational healthmanagement

Manufacturing process

is governed by an extremely large set of laws and

Top Message

Initiatives for the appropriate management of chemical substances

hazardous chemical substances.

For PCBs (polychlorinated biphenyls), which are hazardous substances, low-concentration PCBs are subject to
the Act on Special Measures Concerning Promotion of Proper Treatment of PCB Wastes (PCB Special Measures

Business Content

Low concentration PCB waste treatment

Act), which requires that they be treated by March 31, 2027.

Starting in September 2022, we began to remove low-concentration PCB waste remaining at our Takasago Plant.
The ﬁnal treatment was completed in February 2023. This work means that all PCB waste held by NFC has beentreated.

Sustainability

The waste contained PCBs held by Nippon Fine Chemical is stored and managed properly in accordance with thisact, and we have been treating it appropriately.

Financial Data

Takasago Plant low-concentration PCB
waste treatment work under way

Takasago Plant low-concentration PCB
waste treatment work completed

Non-financial Data
32

Initiatives to reduce environmental impacts
GHG emissions
The greenhouse gases (GHG) emitted by Nippon（%）(Unit: tons)
30,000Fine Chemical are largely carbon dioxide from our

120

100

the overall target of a 46% reduction from FY2013 of

103

96

energy usage. Regarding Scope 1 and Scope 2, within

100

22,5005,071

greenhouse gases in Japan by FY2030, industry is

5,866

5,402

80
67

required to reduce its energy-based carbon dioxide
emissions by 38%. Therefore, NFC has set a target of56

15,000

58

54

60
431

a 38% reduction by FY2030 over FY2013 in our own
carbon dioxide emissions.
The graph shows Scope 1 and Scope 2 emissions aswell as the emissions ratios based on FY1995, the

38
7,500

13,514

12,505

13,351

11,998

2013

2020

2021

2022

40

20

year of the merger with Yoshikawa Oil and Fat Co.,
Ltd., and FY2013.

00

In FY2022, we switched to 100% renewable energy(FY)for our purchased energy, reducing Scope 2 emissions

Scope 2

Scope 1by around 5,400 tonnes year-on-year.

Compared to FY1995

Compared to FY2013

We achieved a 33% reduction compared to FY2013
in both Scope 1 and Scope 2 total emissions.

Scope 1: Direct GHG emissions from an operatorʼs own
fuel combustion
Scope 2: Indirect GHG emissions from the use ofelectricity and heat supplied by othercompanies
Scope 3: Indirect emissions other than Scope 1 or 2
(emissions from other companies related tothe business entityʼs activities)

We now intend to calculate the supply chain
emissions, including Scope 3, and work to reducing
GHG emissions throughout the entire supply chain sothat we can achieve carbon neutrality.

Note: Until FY2020, carbon dioxide emissions were calculated
based on the Act on the Rational Use of Energy and the
Act on Promotion of Global Warming Countermeasures.
From FY2021, they are based on the GHG Protocol
Standard.

Reducing waste, recycling
At Nippon Fine Chemical, we are working company-wide(Unit: tons)
3,000

（%）
100

to promote the 3Rs (Reduce, Reuse, Recycle). The
amount of waste we generated in FY2022 grew by 766

2,500

1,054

2,000

Normally, the ratio of generated industrial waste
used for recycling has been shown as “Recirculation

60
49

1,500

690

767
50

535

Rate.” However, we have deﬁned a new “Recycling
Rate” that includes valuable resources, and so we are75

69

tonnes due to the increased production of speciﬁc
products.

69

1,000

working to achieve at least a 90% recycling rate by theend of FY2030.

25
500

1,464

1,128

1,272

1,752

2019

2020

2021

2022

We shall continue to promote the reuse and conversionof waste solvents into valuable resources, strive tooutsource processing that allows thermal and material
recycling, and work to reduce emissions and improve
our recycling rate.

33

0

0

Industrial waste
Specially-controlled industrial waste(FY)

Recirculation rate
Recycling rate

Recirculation rate: (Amount of recycled materials) / (Total amount ofindustrial waste generated)
Recycling rate:(Amount of recycled materials + Amount of valuable
resources) / (Total amount of industrial waste +Amount of valuable resources)

Amount of water used

For boiler emissions, we measure the amounts of

Our water sources include tap water, well water,

sulfur oxides (SOx) and nitrogen oxides (NOx), andand industrial-use water. Waste water from our plants

operate them to comply with the regulation values.

is treated at waste water treatment facilities and thenSOx have been dropping since our switch fromheavy oil to city gas started in 2016. We are maintaining
our low emission levels of NOx.

discharged into public water bodies and sewers.

Top Message

SOx and NOx emissions

We have brought in recover and reuse systems forsteam drain water and cooling water in plants, andby skipping the washing step in our manufacturing(Unit: tons)
7.5

neutralization equipment, we have been able to use

7.1

water more efﬁciently, reducing our water intake in

7.1

FY2022 by 21,000 tonnes year-on-year.
(1,000 t)
600

5.0

2.5

Business Content

400
266
0.4

0.3
0.0

2020

0.3
2021

SOx

2022

254

243

210

158

155

165

(FY)
200

NOx

Emissions of substances coveredby the PRTR system

178

0

36

30

33

34

2019

2020

2021

2022

Nippon Fine Chemical submits notices of theWell water(FY)

Industrial-use water

emissions and transfer amounts for PRTR substances*and manages the chemical substances in question. We
have promoted the effective use of idle equipment,machinery maintenance, and the conversion of waste
into valuable resources, as well as worked to reduce ouratmospheric emissions and transfer amount. However,in FY2022 our emissions were 1.5 tonnes higher, andWe shall continue to strengthen management still
further, working to reduce our emissions and transfer
amounts.

Nippon Fine Chemical is working on reducing energy
usage through environmental management programs.
We have updated our high-eﬃciency steam boilers,
strengthened management of steam traps, and worked
to reinforce maintenance of steam piping and so on,achieving results in reducing energy consumption. Moreover,
we are actively using low-power, high-efﬁciency motors
and inverters, updating to high-efﬁciency freezers, andreplacing bulbs with LEDs as ways to reduce the(Unit: tons)
200.0

199.9

196.3

(10,000 GJ)
40.0

149.9

150.0

amount of electricity we use.

15.5

Non-financial Data

30.0
100.0

16.2

14.2
20.0

50.0

0.0

29.3

27.8

24.1

2020

Financial Datatransfer amount 3.6 tonnes higher, due to the increasein production of speciﬁc products.

Amount of energy used

Sustainability

Tap waterManagement Storategy

processes and bringing in boiler wastewater
7.9

2021

PRTR atmospheric emissions

10.0

2022

(FY)

PRTR transfer amount*Substances covered by the PRTR system: Chemical substances as
defined by law that may be harmful to human health or the ecosystem.

0.0

22.3

20.0

2020

20.8

2021

Fuels

2022

(FY)

Electricity

34

■ Environmentally-Friendly Product Development
Basic Ideas
At Nippon Fine Chemical, we have speciﬁed our basic policy regarding qualityp25, and all employees will carry out
constant, autonomous, sustained improvements based on this policy, fulﬁlling our social responsibility.

Initiatives for quality assurance
Nippon Fine Chemical works unceasingly to prepare and strengthen our company-wide quality assurance system sothat we can provide top-quality products that will satisfy our customers.
We obtained ISO 9002 in 1996, and, following the later move to ISO 9001, have extended the number of covered
products. In March 2023, we completed extending application at the Kakogawa-higashi Plant and the Takasago Plant,
which means all Nippon Fine Chemical products are now managed in accordance with ISO 9001 requirements.
Along with implementing planned employee training, we use both internal audits and examinations by external audit
organizations to help us continually improve and increase our level.
In the ﬁelds of pharmaceuticals and pharmaceutical intermediates, we assure quality by complying with GMP (GoodManufacturing Practice, a quality assurance system for pharmaceuticals) standards. We shall continue to maintain thesehigh quality assurance systems, providing high-quality products into the future.

Activities for product safety
Nippon Fine Chemical prepares product safety data sheets (SDSs) in accordance with the Japanese Industrial
Standards (JIS). In addition, for products that include substances covered by the labeling requirements of theIndustrial Safety and Health Act, we use the Globally Harmonized System of Classiﬁcation and Labelling ofChemicals (GHS), and show the GHS picture on labels as needed, providing our customers with safety and hazard
information.
To enhance the contents of these SDSs, in April 2021 we started operating our new chemical substancesmanagement system and are expanding it to all our products.
We strive to ensure our management of chemical substances is done safely: we actively work to comply with thevarious laws and regulations on chemical products in countries around the world, Japan included, and to ensure
management of chemical products throughout our supply chain.

Initiatives for intellectual property
an Intellectual Property Oversight Committee,
which works with the various R&D departments

Ration of held patents by ﬁeld
(FY2022)

Patent application/patents held numbers

At Nippon Fine Chemical, we have established
Applications
40

Held
80

to propose and execute strategies related tointellectual property. In addition, as one of our

30

60

20

40

10

20

materiality (key issues) KPIs (Key Performance
Indicators), we have announced a target of a
total of 75 patent applications over the ﬁve years
between FY2022 and the end of FY2026. Our
patent applications for FY2022 can be seen in
the ﬁgure to the right. In the ﬁelds of beauty care,health care, and ﬁne chemicals, we apply for thepatents, trademarks, and so on needed to expand
those businesses in a timely manner, expanding
our rights.
35

00FY2021

FY2022

Overseas (PCT) applications● Beauty care

Domestic applications● Health careNo. held● Fine chemicals

Nippon Fine Chemical is working on the development of a range of environmentally-friendly products, as shown here.

Research and development using renewable raw materials with low environmental impact■Lanolin and cholesterol

Nippon Fine Chemical has a strong focus
on research and development of raw materials
for cosmetics that use plant-derived raw
materials, and already provides a large
number of such products.
In particular, our products made using
palm oil obtained RSPO certiﬁcation in June
2020, certifying their sustainable production
and use, and we are working on increasing
the number of compliant products.

Lanolin is a natural oil obtained by purifying
wool grease, the lipid components adhering
to wool. It is made from the wool shornfrom sheep each year, and does not harm
animals. Nippon Fine Chemical provides
lanolin products, which are renewable andsustainable, to a range of customers.
Nippon Fine Chemical s
lanolin mascots

Development of readily biodegradable products

Sustainability

We are focusing on the development ofenvironmentally-friendly products such as
those that do not remain in the environment
even when discarded. People are paying
close attention to the environmental impactof plastic waste. Scrubbing agents that areused as skin cleansers to remove dirt andexcess sebum from the skin are made withamides rather than plastics. We also develop
highly biodegradable products made using
phospholipids from natural sources.

As progress is being made on developing
products that use plant-derived raw materials
as a way to bring about a sustainable society,
we are actively working on the developmentof non-GMO products from a desire to ensure
environmental and biological safety. We areswitching existing products to non-GMO
equivalents, and promoting the developmentof new products that take non-GMO into
account.

Business Content

Development of non-GMO productsManagement Storategy■RSPO certiﬁcation

Top Message

Product development

Development of materials for use in perovskite solar cells (next-generation solar cells)
OMe

OMe

MeO

N

N

OMe

MeO

N

N

OMe

OMe

OMe

Financial Data

The worldʼs attention has recently turned to perovskite solar cells, seeing them asnext-generation solar cells that could provide both high energy generation efﬁciency
and low manufacturing costs. They are expected to be used for multiple applications
due to being thin, light, and very ﬂexible, nor requiring as much installation space asolder types.
Nippon Fine Chemical is working on initiatives for the development andcommercialization of Spiro-MeOTAD, which is used in perovskite solar cells.

Spiro-MeOTAD

We are an industry-structuring partner with MATSURI, which is a project to create
environmentally-sustainable industries based on algae, run by Chitose Laboratory
Corp. MATSURI is a project that brings together companies to create new industries
that utilize algae in order to bring about a carbon-neutral society. In promoting thesearch and evaluation of algae-based materials and the development and sale ofalgae-based materials and products such as sustainable raw materials for cosmetics
or distinctive chemical products, we will provide values that support the health and beautyof people, and prosperous lifestyles, with the goal of being a vital part of society.

Non-financial Data

The MATSURI environmentally-sustainable industrial creation project36

■ Compliance and Labor Environment
Compliance
The Nippon Fine Chemical Group positions compliance as one of our most
crucial issues. To ensure compliance, we have established our Code of Ethics,
which is made up of our Corporate Code of Conduct, laying out the universal
ideas and is the code of conduct to ensure all ofﬁcers and employees working
at NFC put into practice our Management Philosophy, and our Corporate
Standards of Conduct, which presents how we should act in order to practice
the Corporate Code of Conduct in the workplace.
In addition, we distribute a handbook on Code of Ethics to all ofﬁcers andemployees, and get them to read this when they join the company and annually thereafter. This is one of the ways in which
we carry out continual education to ensure that what the Nippon Fine Chemical Group thinks is normal does not stray fromwhat society thinks is normal.

Fostering an awareness of compliance

Whistle-blower system

Nippon Fine Chemical carries out training on

The Nippon Fine Chemical Group has an internal

compliance and ethics to fostering an awareness ofwhistle-blower system in the event anyone discovers

compliance among ofﬁcers and employees.

compliance violations or suspicious actions. In order- Ethics education during on-boarding training

to maintain and operate a sound whistle-blowing- Listing cases of compliance violations on theinternal intranet (quarterly)- Workplace discussions on cases of
non-compliance (biannually)system, the Ethics Committee, Internal Audit Ofﬁce
and auditors work together to protect whistle-blowers
and those who talk with us, investigate the facts of
their reports, and take corrective measures.

Relations with suppliers
Nippon Fine Chemical has established the basicpurchasing policy shown to the right, and the Flow up■Basic purchasing policy(1)Equal opportunities / fairness / justiceto the Transaction Start and published them on our

We welcome domestic and international businesswebsite.

partners in pursuit of equal opportunity, and deal

In line with our basic policy for purchasing, while
complying with the relevant laws and regulations, we
open our gates widely to all suppliers, both in Japan andfairly and justly with all customers.
(2)Economic rationality
When selecting and evaluating business partners,

around the world, in the name of equal opportunities. In

we assess quality, delivery time, price, service,addition, our purchasing activities are done with anreliability, safety, etc. in a comprehensive manner.

awareness not just of economic rationality in theselection of items, but green procurement as well.

(3)Legal compliance and rejection of antisocialorganizations
We comply with relevant laws and their spirit in thecourse of purchase transactions.

(4)Green procurement
We conduct purchasing operations based on resource
protection and environmental protection in the selectionof purchases.

(5)Promotion of CSR procurement
We strive to fulﬁll our social responsibilities by working
on CSR throughout the supply chain, including business
partners involved in our business activities, promoting
CSR procurement.

37

Top Message

Labor environment
Basic ideas
Nippon Fine Chemical considers our basic safety policy to be continuing to operate free of accidents or disasters,
ensuring the safety of our employees and the local communities, clarifying product properties and handling
methods, and protecting the health and safety of all people using our products, including our customers, and tothat end, we are engaged in the following activities.

Initiatives for security and accident prevention

Business Continuity Plan (BCP)

We hold evacuation drills and ﬁre prevention drills

Nippon Fine Chemical is formulating and developing

every year to ensure quick and smooth initial responsesa system for operating a business continuity plan (BCP),

to emergencies such as major earthquakes or ﬁres. In

one that prioritizes the safety of our employees andtheir families, in order to minimize the effects on our
stakeholders and reduce the long-term impact of athe premises to ensure its impact can be kept to abusiness stoppage even when business continuance isminimum.

difﬁcult due to large-scale disasters such as major
earthquakes or epidemics.

Lost-time accidents

accidents requiring at least one day of leave that happenedin 2021, safety supervisors were stationed at the Takasago
Plant and the Kakogawa-higashi Plant to work full-time
BCP evacuation drill (held at Takasago Plant, Jan 11, 2023)

on health and safety, and we are working to strengthen

Sustainability

Three workplace accidents requiring at least one dayof leave happened in 2022. Following the ﬁve workplace

Business Content

addition, we also hold planned drills that assume aleak of combustible raw material or solvent, etc. onManagement Storategy

Initiatives for safety and peace of mind

the safety management system for plants.

RECPY activities
environmental beautiﬁcation (safety) and productivity
improvement through RECPY activities. Improvements
are done using small-group activities, and each groupaccidents and studying countermeasures, we will carryout safety education that goes back to the basics,
working to eradicate workplace accidents.
These efforts have helped ensure that, as of the endof September 2023, there have been no accidents

reports on what it has done. We are working tocausing lost time.

continuously improve the work environment by■Lost-time accident rate

recognizing outstanding activities.

Internal proposals
Nippon Fine Chemical makes improvements byhaving employees offer proposals for methods toimprove daily task efﬁciency or improve hidden risks
through their ideas and creativity as they carry out
their work.

January - September

CY2020CY2021

CY2022NIPPON FINE
CHEMICAL

0.00

8.35

6.36

0.00

All
industries

1.95

2.09

2.06

−

Chemicals
industry

0.93

1.07

1.16

−

2023

Lost-time accident rate = 1,000,000 x (number of lost-time accident
victims) / (total hours worked)
Nippon Fine Chemical: aggregate of lost-time accidents
requiring at least one day off
Statistics from: January to December
All industries/Chemicals industry: Taken from the occupational accident
statistics on the Workplace Safety Website.

Non-financial Data

*This stands for “REformation of Clean and ProductivitY” and refers
to activities carried out by the company with the aim of improving
company beautification and productivity.

Financial DataAt our plants, Nippon Fine Chemical carries out

In parallel with investigating the causes of workplace38

■ Outline of Consolidated Financials Over the Last Decade
FY2013

FY2014FY2015FY2016

Profit and Loss (MY)Net sales

24,52825,86525,86725,153Operating profit

1,584

2,094​

2,383

2,369

Ordinary profit

1,907

2,307

2,611​

2,560

Profit attributable to owners of parent

1,129

1,422

1,799

1,815

Total assets

33,86036,841​37,924​40,066Equity26,674​29,74830,73332,846

1,943

3,038​

2,070

2,851

Cash flows from investing activities557​△ 348​△ 1,081△ 1,135

Cash flows from financing activities△ 512​

△ 561

△ 593

△ 621

Cash and cash equivalents at end of period

3,208

5,417

5,766

6,837

487

348​

1,552​

991

Depreciation

1,122

1,017

1,003​

1,028

R&D expenses

466

467​

535

555

Financial status (financial year-end data, MY)

Cash flow (MY)Cash flows from operating activities

Other (MY)Capital investment amount (tangible)

Indices
Operating profit ratio (％)

6.5​

8.1

9.2

9.4

Return on equity (ROE) (%)

4.4

5.1

6.1

5.8

Equity-to-asset ratio (%)

78.8​

78.6​

79.2​

80.3

Net income per share (JPY)47.57​

59.88

75.76

76.45

Net assets per share (JPY)

1,123.17

1,219.50

1,263.99

1,354.12

Dividends per share (JPY/year)

20

21

23

23

Dividend payout ratio (consolidated) (%)

42.0

35.1

30.4

30.1

Overseas sales ratio (%)

22.3​

24.6

22.3​

20.1​

Number of employees (persons)

581​

583

585

594

17,869​19,07918,551

17,772​

971​

1,472

1,708

1,659​

Performance by business segment (MY)Industrial
products businessNet sales
Operating profit
Operating profit ratio (％)

Householdproducts business

Real estate

Other

5.4

7.7

9.2

9.3

5,679​

5,737​

6,246

6,438​

Operating profit

492

446

494

519

Operating profit ratio (％)

8.7

7.8

7.9

8.1​

Net sales

362

396​

389

Net sales

Operating profit

111

113

142

Operating profit ratio (％)

30.8

28.6​

36.6

Net sales

620

654​

682​

944

Operating profit

10

64​

39

192​

Operating profit ratio (％)
Total

1.7​

9.8

5.7​

20.3

Net sales

24,52825,86525,86725,153Operating profit

1,584​

2,094​

2,383

2,369​

6.5

8.1

9.2

9.4

Operating profit ratio (％)

39*The real estate

FY2018

27,598​FY201928,084​FY202029,047​

FY202130,509Top Message

FY2017

FY202233,44836,838​

3,939

4,881

5,057

4,154

5,127

5,389

2,014

2,303

2,621

2,758

3,472​

4,079

46,11848,21447,56153,26554,80756,67236,44937,09337,74942,11643,73245,266​

3,626

3,434

3,061

4,698

2,285

1,439

△ 541

△ 598

△ 1,817​△ 2,418△ 2,741​△ 1,779​

△ 609

△ 741

△ 894

△ 874

△ 1,399△ 3,320​

9,329

11,411​

11,72013,187

11,4107,766​

699

1,379

1,676

2,228

2,716

2,575

976

1,107

1,205

1,064

1,070

950​

609

675

717

712

824

893

10.0​

11.4

12.5

12.9

14.6

13.7

5.9

6.3

7.0​

6.9

8.1​

9.2​

77.5

76.9

79.4

79.1

79.8

79.9

84.83

96.98

110.37116.17146.32174.42

1,504.66​

1,562.03

1,589.64

1,773.54

1,851.84

1,984.58​

30​

33

35​

54

57​

30.9

29.9

30.1

36.9​

32.7

21.8

20.2​

21.9​

21.4

24.8

25.2

606

631

665

671

684

717

19,931

20,323

20,573

19,306

23,601

27,184

1,956

2,401

2,748

2,293

3,622

3,959

9.8

11.8

13.4

11.9

15.3

14.6

6,606

6,686

7,337

10,070

8,646

8,272

522

540

620​

1,423

928

675

7.9

8.1

8.4

14.1

10.7

8.2

1,062

1,075

1,137

1,134

1,201

1,382

271

259

274

223

333

424

25.5

24.0

24.1

19.7​

27.7

30.6

27,59828,08429,04730,50933,448​36,838

2,749

3,199

3,641

3,939

4,881

5,057

10.0

11.4

12.5

12.9

14.6​

13.7

Non-financial Databusiness segment has been incorporated under Other as of FY2016

Financial Data

28
33.0

Sustainability

3,641
3,920

Business Content

3,199
3,503

Management Storategy

2,749
2,902

40

■ Financial Statements
Consolidated balance sheet(Unit: Millions of JPY)

(Unit: Millions of JPY)

Previous consolidated Current consolidated
fiscal year
fiscal year

Previous consolidated Current consolidated
fiscal year
fiscal year

(March 31, 2022)(March 31, 2023)​

Assets(March 31, 2022)

Liabilities

Current assets

Current liabilities

Cash and deposits

12,862​

8,937​

Notes and accounts receivable- trade

3,928

4,256​

Notes and accounts receivable- trade

8,703

8,855

Accounts payable - other

757

839

Merchandise and finished goods

3,087​

4,001

Income taxes payable

985

607

Work in process

2,116

2,290​

Provision for bonuses

778

717

Raw materials and supplies

3,216

4,718​

Provision for bonuses for directors (and other officers)

92

79

Other

239

788

Provision for environmental measures

61－

Allowance for doubtful accounts

△2​

△0

Accounts payable - facilities

362

459

30,22429,590​Total current assets

Accumulated depreciation

646

655

7,611​

7,615

Non-current liabilities

Property, plant and equipment
Buildings and structures

Other
Total current liabilities

Non-current assets

11,548

14,960

Deferred tax liabilities

2,267

2,655

△8,043△8,223​

Provision for environmental measures

117

－​

Buildings and structures, net

3,505

6,737​

Retirement benefit liability

111

144​

Machinery, equipment and vehicles

14,35914,401​Long-term accounts payable - other

15​

15​

Accumulated depreciation△13,043△13,115​

Long-term guarantee deposits

103

102​

Machinery, equipment and vehicles, net

1,315

1,285

Asset retirement obligations

9

9

Land

3,644​

3,719

Other

Construction in progress

3,775

1,794

Total non-current liabilities

Other

3,312

3,535

△2,780△2,845​532

690​

12,772

14,227307​

521

Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets

Investment securities

Total liabilities

11,20512,017​11​

27​

2,635​

2,955

10,247

10,571

5,933​

5,933

Net assets
Shareholders’equity
Share capital

Investments and other assets

Capital surplus

6,803​

6,821

25,79028,513Retirement benefit assets

26

67

Retained earnings

Other

271

247​

Treasury shares△1,296△3,171

37,23038,097​

Total investments and other assets
Total non-current assets

Total assets

11,503

12,332​

Total shareholders’equity

24,58327,081

Accumulated other comprehensive income

54,80756,672

Valuation difference on available-for-sale securities

5,784

6,469

Deferred gains or losses on hedges

34​

3

Foreign currency translation adjustment

675​

697

Remeasurements of defined benefit plans

6△1

Total accumulated other comprehensive income

6,501​

7,169

Non-controlling interests

828

834

44,560​46,10154,80756,672

Total net assets

Total liabilities andnet assets

41(March 31, 2023)​

Top Message

Consolidated statement of income and comprehensive income(Unit: Millions of JPY)

Previous consolidated fiscal year

Current consolidated fiscal year

(from April 1, 2021 to March 31, 2022)(from April 1, 2022 to March 31, 2023)

33,448​36,838​

Cost of sales

23,17025,882Gross profit

10,278

10,956​

Selling, general and administrative expenses

5,396

5,899​

Operating profit

4,881

5,057

Non-operating income
Interest income

29

34

Dividend income

235​

297​

38

41​

Total non-operating income

303

373

Interest expenses

11Foreign exchange losses

56

22

Miscellaneous losses

0​17

Non-operating expenses

Total non-operating expenses

58​

40

5,127

5,389

37

81

Gain on sale of investment securities

0212

Total extraordinary income

37​

294​

Loss on retirement of non-current assets

54

24​

Impairment losses

89－

Loss on sale of investment securities

216

Ordinary profit

Business Content

Miscellaneous income

Management Storategy

Net sales

Extraordinary income
Gain on sale of non-current assets

Total extraordinary losses

40

5,017

5,643

Income taxes - current

1,444

1,383

9

94

Total income taxes

1,454

1,477​

Profit3,562

4,165​

3,472

4,079​

90​

85

Income taxes - deferred

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

Financial Data

147

Profit before income taxes

Sustainability

Extraordinary losses

Other comprehensive income
Valuation difference on available-for-sale securities

684

29

△34​

Foreign currency translation adjustment

406​

29

Remeasurements of defined benefit plans

9​

△7​

Total other comprehensive income

△444

671

3,118

4,836

Comprehensive income attributable to owners of parent

2,927

4,747​

Comprehensive income attributable to non-controlling interests

190​

89

Comprehensive income
Comprehensive income attributable toNon-financial Data

△890

Deferred gains or losses on hedges

42Consolidated statement of changes in shareholders' equity■Previous consolidated fiscal year (from April 1, 2021 to March 31, 2022) (Unit: Millions of JPY)
Shareholders’equity
Share capital

Balance at beginning of period

Capital surplus

5,933

Retained earnings

6,803​

Treasury shares

23,358​

Total shareholders’equity△1,025​35,069​Changes during period
Dividends of surplus△1,032

Profit attributable to owners of parent△1,032

3,472

3,472​

Purchase of treasury shares△271​

Employee welfare benefit fund

△271​

△7

△7

Net changes in items other than shareholders' equity

Total changes during period
Balance at end of period－​－​

2,432​△271​

2,160​

5,933​

6,803

25,790​△1,296​37,230​

Accumulated other comprehensive income

Balance at beginning of period

Valuation difference on
available-for-sale securities

Deferred gains orlosses on hedges

Foreign currencytranslation adjustment

Remeasurements ofdefined benefit plans

Total accumulated othercomprehensive income

Noncontrollinginterests

Total net
assets6,675​

7​

365​

△3

7,046​

730​

42,846​

Changes during period
Dividends of surplus△1,032​

Profit attributable to owners of parent

3,472​

Purchase of treasury shares△271​

Employee welfare benefit fund

△7​
△890​

26​

310

9

△544

97

Total changes during period

Net changes in items other than shareholders' equity

△890​

26​

310​

9​

△544​

97​

1,713​

Balance at end of period

5,784​

34​

675​

6​

6,501​

828​

44,560​■Current consolidated fiscal year (from April 1, 2022 to March 31, 2023)

△447(Unit: Millions of JPY)​

Shareholders’equity
Share capital

Balance at beginning of period

Capital surplus

5,933

Retained earnings

6,803​

Treasury shares

25,790​Total shareholders’equity△1,296​37,230​Changes during period
Dividends of surplus△1,346​

Profit attributable to owners of parent△1,346​

4,079​

4,079​

Purchase of treasury shares△1,885

Disposal of treasury shares

18​△1,885

11​

Employee welfare benefit fund

29​

△10​

△10​

Net changes in items other than shareholders' equity

Total changes during period
Balance at end of period

－​

18​

2,722​△1,874​

866

5,933

6,821

28,513△3,171​

38,097​

Accumulated other comprehensive income

Balance at beginning of period

Valuation difference on
available-for-sale securities

Deferred gains orlosses on hedges

Foreign currencytranslation adjustment

Remeasurements ofdefined benefit plans

Total accumulated othercomprehensive income

Noncontrollinginterests

Total net
assets5,784​

34​

675

6​

6,501

828

44,560Changes during period
Dividends of surplus△1,346

Profit attributable to owners of parent

4,079​

Purchase of treasury shares△1,885

Disposal of treasury shares

29

Employee welfare benefit fundNet changes in items other than shareholders' equity

Total changes during period
Balance at end of period

43

△10
684

△31

22

△7

667

6​

674

684​

△31

22

△7​

667​

6​

1,540

6,469

3​

697​

△1

7,169​

834

46,101​

Top Message

Consolidated statement of cash flows(Unit: Millions of JPY)

Previous consolidated fiscal year

Current consolidated fiscal year

(from April 1, 2021 to March 31, 2022)(from April 1, 2022 to March 31, 2023)

Profit before income taxes

5,017

5,643

Depreciation

1,070​

950​

Impairment losses

89－

Increase (decrease) in allowance for doubtful accounts

1​

△1

△20​

33

Decrease (increase) in retirement benefit assets

△26​

△40​

Interest and dividend income

△265

△331

1

1​

△8

△6​

Loss (gain) on sales of investment securities

2

△195​

Loss (gain) on sale and retirement of property, plant and equipment

17

△57​

Interest expenses
Foreign exchange losses (gains)

Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in guarantee deposits received
Increase (decrease) in trade payables

△757​

△147

△1,816​△2,586​

4​

△0​

△62​

361​

△38

△757​

Subtotal

3,207​

2,864​

Interest and dividends received

265​

331​

Interest paid

△1​

△1

△1,185​△1,756​2,285

1,439​△96－​

Income taxes paid
Net cash provided by (used in) operating activities

Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits

－​

290

Purchase of property, plant and equipment△2,813​△2,606​

143

286

△14​

△150

Purchase of investment securities△1△1

Proceeds from sale of investment securities

40​

401​

△2,741△1,779Net cash provided by (used in) investing activities

Financial Data

Proceeds from sale of property, plant and equipment
Purchase of intangible assets

Sustainability

Other

Business Content

Increase (decrease) in retirement benefit liability

Management Storategy

Cash flows from operating activities

Cash flows from financing activities
Dividends paid

△1,346△90​△79​

Purchase of treasury shares△271​△1,885​△4△8​△1,399△3,320​Effect of exchange rate change on cash and cash equivalents

78​

16​

Net increase (decrease) in cash and cash equivalents△1,776​△3,644

Cash and cash equivalents at beginning of period

13,187

11,410Cash and cash equivalents at end of period

11,410​7,766​Other
Net cash provided by (used in) investing activities

Non-financial Data

△1,032​

Dividends paid to non-controlling interests44■ Human Resources Information■Employees
IndicesNumber of employees

FY2020

FY2021

FY2022372 persons

386 persons

416 persons

１５．
６%

１５．
８%​

１６．
６%​

40.1 years old/
13.8 years

40.0 years old/
13.5 years

39.6 years old/
12.7 years

Percentage of females in management positions

０．
０%

０．
０%

０．
０%

Percentage of females in management positions and candidates
for management positions among full-time employees

４．
４%

６．
０%

７．
０%

Percentage of female employees
Average age/average years of service of full-time
employees■Recruitment/Promotion to full-time employee
Indices

FY2020

FY2021

FY2022

Percentage of female employees

１９．
４%

２３．
５%

２６．
８%

Percentage of female employed as full-time employees

１４．
７%​

１６．
１%​

１８．
６%​

Ratio of mid-career employees among full-time employees

７３．
５%​

７７．
４%​

８１．
４%​

Number of people promoted from contract employees tofull-time employees

1 person1 person

2 persons

Number of dispatch employees promoted to full-time
employees

2 persons

0 person1 person■Work-life balance
Indices

FY2020

FY2021

FY2022

1,969.15 hours

1,991.02 hours

1,979.38 hours

15.34 hours

18.70 hours

18.96 hours

Number of paid leave days taken per person per year
Annual paid leave take-up rate per person

１１．
５ days​
６７．
６%​

１２．
１ days​
７３．
０%​

１３．
６ days​８２．
４%Number of people taking childcare leave (male/female)0 person/2 persons

0 person/1 person

4 persons/2 persons

Number of people taking nursing care leave (male/female)0 person/0 person

0 person/0 person

1 person/0 person

Total actual working hours per person per year

Average overtime hours per month45

Top Message■Lost-time accident rate
CY2023

CY2013

CY2014

CY2015

CY2016

CY2017

CY2018CY2019CY2020CY2021

CY2022

NipponFine
Chemical

4.55

0.00​

2.31

2.15​

2.08

0.00

1.87

0.00​

8.35

6.36

0.00

All
industries

1.58​

1.66​

1.61

1.63​

1.66​

1.83​

1.80

1.95

2.09​

2.06

−

Chemicals
industry

0.82​

0.76​

0.81

0.88

0.81

0.90​

0.94​

0.93

1.07

1.16​

−

Management Storategy

Lost-time accident rate = 1,000,000 x (number of lost-time accident victims) / (total hours worked)
Nippon Fine Chemical: aggregate of lost-time accidents requiring at least one day off
Statistics from: January to December
All industries/Chemicals industry: Taken from the occupational accident statistics on the Workplace Safety Website.

January-September

Business Content
Sustainability
Financial Data
Non-financial Data46

■ Safety and Environment Information■Amountof waterused■Amountof waterused■Amountof waste■Amountof wastewater water(1,000 t)
1,000(1,000 t)
1,000

800

800

600

600

400

400

200

200

0

0
1995

2013

2014

2015

Tap water

2016

2017

2018

Well water

2019

2020

2021

2022
(FY)

1995

2013

2014

2015

2016

2017

Release into public rivers

Industrial-use water■SOxemissions■SOxandandNOx NOx
emissions

2018

2019

2020

2021

2022
(FY)

Release into sewerage system■PRTR
transfer■PRTR
transferamount,amount,emissions emissions(Unit: tons)
20.0(Unit: tons)
250.0

200.0
15.0
150.0
10.0
100.0

5.0

50.0

0.0

0.0
1995

2013

2014

2015

2016

2017

SOx

2018

2019

2020

2021

2022
(FY)

2013

2014

2015

2016

2017

2018

PRTR atmospheric emissions

NOx

2019

2020

2021

2022
(FY)

PRTR transfer amount■Changes in chemical substances with large amounts of atmospheric emissions​ (Unit: tons)​

47

FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

Toluene

16.2

14.6​

8.2

13.4​

17.4​

22.7

31.5

18.1

23.2

26.1​

Chloroform

1.5​

3.7​

1.4

0.4

0.5

0.3​

2.6

5.2

4.0

2.5​

Chlorodifluoromethane

0.0

3.3​

0.0

4.2​

0.0​

8.4

1.7​

0.0

0.0​

0.0​

Dichloromethane

0.7​

2.7​

0.1​

4.2

0.5​

6.9

2.2​

0.4​

0.0​

0.3​

Top Message■Amountof energy
used■Amountof energy
used■Wasteamounts
and recirculation
rate■Wasteamounts
and recirculation
rate(10,000 GJ)
60.0(Unit: tons)
4,000

(%)
100

3,500
3,000

40.0

75

2,500
2,000

30.0

50

1,500

20.0

1,000
10.0

25

500

0.0

0
2013

2014

2015

2016

Fuels

2017

2018

2019

2020

2021

2022
(FY)

Electricity

1995

2013

2014

2015

Industrial waste

2016

2017

2018

2019

2020

2021

0
2022
(FY)

Specially-controlled industrial waste

Recirculation rate

Recycling rate

Recirculation rate: (Amount of recycled materials) / (Totalamount of industrial waste generated)
Recycling rate: (Amount of recycled materials + Amount of■GHG
emissionsGHG
emissionsvaluable resources) / (Total amount of industrial waste +(Unit: tons)
30,000(%)
140

22,500100

80
15,00060

Amount of valuable resources)

Sustainability

120

Business Content

1995

Management Storategy

50.0

40

7,500

20

0
1995 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
(FY)

Scope 1Compared to FY1995

Scope 2Compared to FY2013

Financial Data0

Non-financial Data
48

Smiles on Faces:
The Power of KIREI

変換アダプタEditorial Policy
Previously, Nippon Fine Chemical has issued separate RC Reports, CSR Reports, andSustainability Reports, but from this business year, we are merging these all into one
integrated report. This report includes management strategies, a business overview,ﬁnancial information, environmental, social, and governance information, and so on.
We hope to take this opportunity to pass on to as many stakeholders as possible
our efforts to improve our corporate value as well as give an overall picture, sothat they will take an interest in our company.
Period Covered
FY2022 (April 2022 to March 2023)
Some data from FY2023 has also been included.

USBケーブル

Scope
The primary information is regarding Nippon Fine Chemical alone. Within the fourmain business segments, the hygiene ﬁeld is handled by Arbos Co., Ltd., a Group
company, so this ﬁeld has been omitted from the introduction to the individual ﬁelds
in this report. In addition, it contains some information from Group companies
covered by consolidation (Value Creation Stories, medium-term management planbusinesses [Portfolio, Management Targets and Capital Policies], Nippon Fine ChemicalGroup businesses, and ﬁnancial information). (as of March 31, 2023)

Date of Issue
March 2024
Guidelines Used for Reference“International Integrated Reporting Framework,” International Integrated Reporting
Council (IIRC)“Environmental Reporting Guidelines,” Ministry of the Environment
Published Information about Nippon Fine Chemical
Basic information about Nippon Fine Chemical is published on our website.
■Nippon Fine Chemical website
https://www.nipponseika.co.jp/en/■TCFD Reporthttps://www.nipponseika.co.jp/en/sustainability/report/■Securities Reporthttps://www.nipponseika.co.jp/investors/securities/
Note regarding forecasts
This report not only describes the past and current status of the Company,
including certain Group companies, but also includes future projections and plans
based on currently available information. These results may differ or change due
to various factors such as changes to the business environment.

Phytopresome, Presome, Phytocompo, PrimeLipid, Neosolue, Plandool, LUSPLAN, FineNeo, NanoRepair, Tremoist, Neutron, Ecolano, LanoAce,and "Smile on Faces; The KIREI power of the Phospholipids, by Nippon Fine Chemical." are registered trademarks of Nippon Fine Chemical Co., Ltd. in Japan.