Financial Results Presentation

for the 2nd Quarter of FY 2022/12
November 1, 2022

Code number：4099

Contents
0. Our Business ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ P3

I . Financial Results for the 2nd Quarter of FY 2022 /12 ・・ P4
II. Forecast of Financial Results for the FY 2022/12・・・・・・ P11

III. Long-term Vision Challenge 1000 ・・・・・・・・・・・・・・・・・・ P14“STAGE 1” Progress Status

IV. New Organizational Structure ・・・・・・・・・・・・・・・・・・・・・ P24
V. References ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ P28
200. Our BusinessInorganic
Chemicals

Organic
Chemicals

Fine
Chemicals

For swimming pooland septic tankdisinfectants

Housing Materials

Chemicals

Raw materials fortires, etc.

Interior,
Exterior Finishes
andPaving Materials

Interiors

Exterior
Products
Exterior Products(carports, gates, etc.)

Chemicals for electronic
components(for printed wiring boards,
resin modifiers, etc.)3

Ⅰ．Financial Results

for the FY 2022/12

Ⅰ－ １． Consolidated Financial Results
 Net sales, operating profit, ordinary profit, and net income attributable to owners of
the parent reached record highs.
・ Sales in Chemicals and Housing Materials exceeded the previous year’s level.
・ Profits increased due to price pass-through in energy, resources, and ocean freight costs, which soared
due to changes in the business environment, including COVID-19 and Russia’s invasion of Ukraine, alongwith the yen depreciation.
・ The yen weakened against the U.S. dollar and the euro, resulting in foreign exchange gains on sales of
2,040 million yen from the previous year.
(Millions of yen)
Consolidated cumulative Q2
FY2022/3
AmountFY2022/12

Percentage

AmountPercentage

Increaseof amount

Changes

25,266100.0%

31,297100.0%

6,031

23.9%

Operating profit

3,795

15.0%

4,371

14.0%

576

15.2%

Ordinary profit

4,116

16.3%

5,480

17.5%

1,364

33.1%

Profit attributableto owners of parent

2,943

11.6%

3,707

11.8%

764

26.0%

Net sales

Exchange rate (USD)

110

132

Exchange rate (EUR)

131

136

5

Ⅰ－ ２． Sales and Profit by Business segments(consolidated) Net sales increased year-on-year in both Chemicals and Housing Materials Operations
 Segment profits increased in Chemicals Operations but decreased in Housing Materials
Operations（Millions of yen）
Percentage

1H*FY2022/12

Percentage

5,877

23.3%

7,088

22.6%

20.6%

Chemicals Organic Chemicals
Operations Fine Chemicals

5,991

23.7%

10,314

33.0%

72.1%

4,538

18.0%

4,927

15.7%

8.6%

Subtotal

16,40765.0%

22,330

71.3%

36.1%

672

2.7%

647

2.1%

▲ 3.7%

7,527

29.8%

7,784

24.9%

3.4%

8,199

32.5%

8,432

27.0%

2.8%

Other

658

2.5%

534

1.7%

▲ 18.8%

Total

25,266100.0%

31,297100.0%

23.9%

percentage

1H*FY2022/12

percentage

Net Sales

1H FY2022/3
Inorganic Chemicals

Interior, Exterior Finishes
and Paving Materials

Housing
Materials Exterior Products
Operations Subtotal

Segment Profit

1H FY2022/3

Changes

Changes

Total of Chemicals Operations

3,614

95.2%

4,521

103.4%

25.1%

Total of Housing Materials Operations

1,058

27.9%

758

17.3%

▲28.3%

Other

▲ 877

▲23.1%▲ 908▲20.8%

3.7%

Total

3,795

100.0%

4,371

100.0%

15.2%*1H（Apr.-Sep.）6

Ⅰ－ ３． Overview of Sales by Segment (Chemicals Products)
12,000

10,31410,0001H FY2022/3

7,088

8,000
6,000

(Millions of yen)（+72.1％）

5,877（+20.6％）2022/3

5,991
4,538

4,927

1H*FY2022/12（+8.6％）*1H（Apr.-Sep.）

4,000
2,000
0

①Inorganic
Chemicals
無機化成品②Organic
Chemicals
有機化成品

③Fine
Chemicals
ファインケミカル①Sales of insoluble sulfur, a material for radial tires, remained almost unchanged from the previous year, despite theimpact of a decline in automobile production resulting from semiconductor shortages. As for sales of carbon disulfide
for rayon and cellophane, and sodium sulfate for bath agents and detergents, the Company strove to improve
profitability by the price pass-through of the impact of yen depreciation in exchange rates and sharp rise in resource
prices.
②Regarding chlorinated isocyanurates for disinfectants, the domestic market performed better than the previous year
mainly due to a recovery in sales of agents for swimming pools. In the U.S. market, the pool market continues to be
brisk, and production continues at high capacity. In addition, both sales and profits were higher than the previous year
as the Company passed soaring resource prices and distribution costs on selling prices.
③Regarding electronic chemicals, particularly Glicoat-SMD, a heat-resistant soluble OSP (Organic Solderability
Preservative) for printed wiring boards, sales were sluggish due to the lockdown in Shanghai and adjustments in thesemiconductor market. Sales of advanced & specialty chemicals, such as epoxy resin curing agent (imidazoles), resin
modifier (glycoluril derivatives, etc.) and semiconductor processing materials, largely surpassed those of the previous
year, thanks to the strong demand on the resin modifier.

7

Ⅰ－４．Overview of Sales by Segment(Housing Materials Products)(Millions of yen)

10,00010,000
8,000

8,000

6,000

6,000

4,000

4,000

2,000
672

647

7,784
7,527

（+3.4％）

1H FY2022/3
1H*FY2022/12*1H（Apr.-Sep.）

2,000（▲3.7％）

0

0Interior, Exterior Finishes
壁材
and Paving Materials

Exterior
Products
エクステリア◆ The number of new housing starts continued to be weak for owned houses, and demand for interior,exterior finishes and paving materials and exterior products remained sluggish. However, net sales
increased from the previous year due to the penetration of the price revision implemented in April 2022.
On the other hand, the price revision failed to absorb soaring prices of raw materials, and therefore
profitability declined from the previous year.

8Ⅰ－５．Analysis of Increase/Decreasein Chemicals Segment Profit
 Profits increased due to the price pass-through of soaring materials andlogistics costs, coupled with the yen depreciation.

Organic
Chemicals

Fine
Chemicals

Other

Increase in costof logistics

Increase in costof salesDecrease in sales
volumeIncrease in sales
price

Increase in sales
volumeIncrease in sales
price

Increase in sales
volumeOperating profit inprevious term

Increase in sales
price

Inorganic
Chemicals

Operating profit incurrent term(Millions of yen)

(FX impact: +1,180 million yen)9Ⅰ－６．Analysis of Increase/Decreasein Housing Materials Segment Profit
Profits decreased due to price hikes of raw materials (aluminum) and production
adjustment of wall finishes and exterior products, despite price increases of products.
(FX Impact: -144 million yen)Interior, Exterior
Finishes
and Paving Materials

Exterior Products

Operating profit incurrent term

Other

Increase in costof logistics

Increase in costof salesDecrease in sales
volumeIncrease in sales
price

Decrease in sales
volumeIncrease in sales
price

Operating profit inprevious term(Millions of yen)10

Ⅱ．Forecast of Financial
Results
for the FY 2022/12

Ⅱ－１．The full-year financial results forecast (Consolidated)12Ⅱ－２．Capital investment, Depreciation, R&D expense（Consolidated）（百万円）（Millionsof yen）

5,000

Of which, production
plant related (TAP-4,
NEO2022) was
1,386 million yen

4,000

3,000

Capital investment
Depreciation

2,000

R&D expenses

1,000

0

FY2018/3

FY2019/3

FY2020/3

FY2021/3

FY2022/3

FY2022/12

FY2018/3

FY2019/3

FY2020/3

FY2021/3

FY2022/3

FY2022/12
予想（Forecast）

Capitalinvestment

1,628

2,073

1,961

4,106

3,599

4,477

Depreciation

2,318

2,281

2,189

1,835

2,090

2,368

R&D
expenses

1,310

1,295

1,338

1,207

1,392

1,259

2018/3

2019/32020/32021/32022/32022/12(Forecast)13

Ⅲ．Long-term Vision

Challenge 1000
“STAGE 1”
Progress Status

Ⅲ－１． Outline of Challenge 1000 ①
present

2020

FY

2025

2022

2029

Long-Term Vision Challenge 1000

STAGE 1

STAGE ２STAGE ３

With its corporate philosophy “Dokusouryoku (creativity)”,
the Group established its long-term vision “Challenge 1000”
to become a company that makes a proposal one step ahead
with Dokusouryoku (creativity) by 2030.

15

Ⅲ－２． Outline of Challenge 1000 ②
Yonpou Yoshi

Financial
Goals

Pillars for
Strategy

Net Sales
売上高
100 billions of
1,000億円
yen

Business Reform
PolicyCustomerCompanywide
Reform Policy

Employee

Proactive
Investment

Shareholder

Achievement of
SDGs

Society

Operating Income
15 billions of yen

ROE
10％

(Contributions to
Stakeholders)

16

円）

Ⅲ－３． Financial goals
40.0%

Implementing various measures in line with the strategic pillars
to achieve the goals set at each STAGE
80.0
2.5
77.5

（ Billions of売上高
yen ）

（連結）
Net
sales
35.0%
100.0 （Consolidated）
新規事業
New
5.0
売上高
business
95.0
30.0%
sales
既存事業
Existing
売上高25.0%
business
sales

60.0
52.8

15.2%

51.6

15.2%

20.0%

54.1

49.5
14.9%

15.0%
Operating

15.5%

15.0%
12.6%

7.9%

8.0%

7.9%

8.0

7.8

7.4

FY2019/3
2019/3 FY2020/3
2020/399期

100期

FY2021/3
2021/3
101期

営業利益率

46.0

10.0%

10.0%

5.8

FY2022/3
2022/37.5

FY2022/12
2022/12 FY2023/3
2023/3（Forecast）
102期
103期

STAGE 1STAGE
1profit ratio
ROE

12.5%

8.8%

8.4

15.0%

ROE

営業利益
5.0%
Operating（連結）
Profit15.0（Consolidated）

12.0

0.0%

FY2025/12
2025/12

FY2029/12
2029/12

106期

110期

STAGE 2２STAGE

STAGE 33
STAGE

17

Ⅲ－４． Progress Summary (From FY2022/3 onward) Net sales for FY2022/12 are expected to exceed the previous year on a 9-month comparison
basis.

Financial
Targets

・ FY2022 is the final year of “STAGE 1.” For the 2nd quarter, net sales and profits hit a record high.
Net sales are expected to increase from the previous year (on a 9-month comparison basis).

 Capital investment in production as planned

Investment
Business

・ Investment in production facilities for fine chemicals (TAP-4) and chlorinated isocyanurates(NEO 2022) was implemented as planned.
・ In June 2022, the Group announced its plan to enhance production facilities for insoluble sulfur andchlorinated isocyanurates (For details, please see pages 19 and 20).

◆ Activities to contribute to each stakeholder

Yonpouyoshi(Contributions
to
Stakeholders)・ Shareholders: Executed share buyback.
・ Society: Installed a solar power generation system atMarugame Plant.
In-kind support to “Parklet” for the Setouchi Triennale 2022
Signed “Collaboration Agreement on Nigiwai (lively)
Community Building” with Marugame City.

Parklet18

Ⅲ－５． Pillar for Strategy (Proactive Investment)
Fine Chemicals, Inorganic Chemicals

Established new fine chemicals production facilities (TAP-4)
Schedule:
Construction site:
Investment:
Special features:

Semiconductor silicon wafers

Sales target:

Started operation in July 2021.
Kitajima location, Tokushima Plant.
2.5 billion yen.
Multi-plant capable of handling prototyping to mass
production.
Owning facilities, manufacturing technologies, and using
analytical technologies capable of controlling foreignmaterials and metals at a low ppt (parts per trillion) level.
Used in the semiconductor field to realize IoT technology
2 billion yen by 2030 in the semiconductor process materials
field.

To establish new production facilities for insoluble sulfur

Insoluble Sulfur

Schedule:
To start operation in December 2024 (planned).
Construction site:
Marugame Plant.
Investment:
4.5 billion yen.
Production capacity:
1.2 times the current level.
Purpose of investment: Promotion of efforts to improve the quality of insoluble
sulfur, one of the raw materials of high-function tires thatshow increasing demand.
Develop production technologies and establish a mass
production framework for sales expansion.

19Ⅲ－６． Pillar for Strategy (Proactive Investment)
Organic Chemicals
Established new production facilities
for chlorinated isocyanurates (NEO2022)
Schedule:
Construction site:

NEO2022(Tokushima Plant)

Investment:
Purpose of investment:

Started operation in July 2022.
Newly established at Kitajima location, Tokushima
Plant.
5 billion yen.
Increase production efficiency and stable supply tocustomers.

To increase production capacityof chlorinated isocyanurates
Schedule:
Construction site:
Investment:
Production capacity:

Purpose of investment:

Chlorinated Isocyanurates

To start operation around October 2023 (planned).
Kitajima location, Tokushima Plant (Renovating the old plant).
1.6 billion yen.
1.6 times together with “NEO2022” before the start ofoperation of the facilities.
Response to further expansion of demand for chlorinatedisocyanurates.
=> Expansion of bacteria elimination and cleaning demand
due to increasing home hygiene awareness.
Provision of improved water hygiene environment to theworld.

20

Ⅲ－７． Business Reform Policy (Organic Chemicals)
Released washing tub cleaner, "WASHMANIA"

Product website (in Japanese)

Expand the business domains, including downstream portions, underthe vision of “Delivering cleanliness to people across the globe byprotecting the environment and ensuring sanitation.”21Ⅲ－８． Pillar for Strategy (Achievement of SDGs)
 Materiality themes: Identify and address high-priority issues forstakeholders and the Group.

22Ⅲ－９． Shareholders Return–Transitions in Dividend Payouts–

Share buyback of 1,328 million yen in September 2022.
The annual dividend per share is expected to increase by 2 yen to 26 yen as the commemorative dividend
for the 75th anniversary of the foundation.
（百万円） （％）

4,000

自己株式取得額

56.6

55.1
51.1

3,500配当総額

60.0(Millions of yen)

Total payout ratio targeted

50.0
50%

連結総還元性向（％）
Share
Repurchases
3,000
Total Dividends

40.0

2,474

2,500

Total Payout Ratio(%)

1,786

2,000

1,605

1,328

30.0

23.8

1,500

20.0

1,000
10.0

500
0

Dividends per
share (annual)

1,285

1,389

1,338

1,304

1,375

FY2019/3
2019/3

FY2020/3
2020/3

FY2021/3
2021/3

FY2022/3
2022/3

FY2022/12

22.0

24.0

24.0

24.0

※このグラフは自己株取得をグラフに反映したときのビジュアルをイメージするために期中に仮2022/12(Forecast)

0.0
(yen)

（予想）
26.0
(Forecast)

23

Ⅳ．New Organizational
StructureⅣ－１． Transition to a Holding Company Structure-1
Establish a new management structure to achieve “Challenge 1000”as the new SHIKOKU KASEI GROUP.
Each business will enhance its expertise to realize speedy decision-making and efficient business activities.

[Group management structure after the transition]
SHIKOKU KASEIHOLDINGSCORPORATION（Our company）

SHIKOKU
CHEMICALSCORPORATIONSHIKOKU KASEICORPORATESERVICE CO., LTD.
【Shared Service】

SHIKOKU KASEIKENZAICORPORATION【Chemicals operations】【Housing Materials
operations】

ChemicalsGroup Companies

Housing Materials
Group Companies

Other Group
Companies25

Ⅳ－２． Transition to a Holding Company Structure-2
With the awareness of "management in which
all employees participate," the Group will work together
to create new value.

FY

2029

present

2025

2022
2020

●Transition to a Holding Company Structure

STAGE 1

STAGE ２STAGE ３26

Thank you
for your attention!

V. References

Financial Data

Ⅴ－１．Consolidated Balance Sheets(Millions of yen)

Current assets

Increase ofamountMar.31, 2022

Sep.30,2022

67,668

68,111443 securities(+800)

Non-current assets

46,13746,356

machinery, equipment and vehicles(+2,282)
218 investment securities(▲1,585)
construction in progress(▲1,298)

Total assets

113,805

114,467

661

Current liabilities

19,10918,919notes and accounts payable - trade(▲1,260)▲ 189 electronically recorded obligations facilities(+1,283)

non-current liabilities

13,78813,534▲ 253

Total liabilities

32,89732,453▲ 443
retained earnings(+1,722)
1,105 valuation difference on available-for-salesecurities(▲876)

Total net assets

80,90882,013

Total liabilities
and net assets

113,805

114,467

661

Capital-to-asset ratio

70.3%

70.9%

0.6%

ROE

8.8%

9.2%

0.4%

30

Ⅴ－２．Consolidated Statements of Cash Flows(Millions of yen)

1H FY2022/3

1H* FY2022/12

Net cash provided by (used in) operating activities

2,275

3,386

Net cash provided by (used in) investing activities(626)(1,488)Net cash provided by (used in) financing activities(1,928)(1,937)

Net increase (decrease) in cash and cash equivalents

(230)

617

Cash and cash equivalents at end of period

36,97736,373

1,649

1,898

Flee cash flow＝Netbyactivities(used in) -operating
activities activities= CFcashfromprovided
operatingCF from investing-Net cash provided by (used in) investing activities◆Cash flows provided by operating activities totaled ¥3,386 million.

*1H（Apr.-Sep.）

Major sources of revenue： Profit before income taxes of ¥5,149 million and depreciation of ¥1,288 million
Major expenditure factors： Income taxes paid of ¥1,881 and decrease in trade payables of 1,481 million◆Cash flows used in investing activities totaled ¥1,488 million.
Major expenditure factors： Purchase of property, plant and equipment of ¥1,224 million◆Cash flows used in financing activities totaled ¥1,937 million.
Major expenditure factors ：Purchase of treasury shares of ¥1,328 million

31Corporate Profile

Ⅴ－３．Corporate Profile（As of September 30, 2022）

 Company nameSHIKOKU CHEMICALS CORPORATION Code number

4099

 Stock exchangeTokyo

Industry：Chemicals

listing Incorporated

October 10, 1947

 Head office

Marugame, Kagawa Prefecture President and C.E.O.

Naoto Tanaka

 Capital

6,867 million yen Number of employees

1,227（Consolidated）

 Net sales

54,137 million yen (Consolidated FY2022/3)

33

Ⅴ－４ ． Business Structure Two main business pillars, which arechemical products and housingmaterials.

Chemicals
Operations

Inorganic
Chemicals
Organic
Chemicals
Fine
Chemicals

SHIKOKU
CHEMICALSCORPORATION
Housing
Materials
Operations

Interior, Exterior
Finishes
andPaving aterials
Exterior
Products

34Ⅴ－５ ． History
Oct 1947

Established in Marugame, Kagawa Prefecture with a capital of 2 million yen as a producer of carbon disulfide (=>inorganic chemical products)

Oct 1957

No. 1 Tokushima Plant (now Tokushima Plant's Yoshinari location) was constructed and began operations in the
production of sodium sulfate (=> inorganic chemical products)

Jun 1962

No. 2 Tokushima Plant (now Tokushima Plant's Kitajima location) was constructed

Oct 1962

The Company's shares were listed on the Second Section of the Tokyo Stock Exchange

May 1964

Japan's first operations to produce chlorinated isocyanurates (=> organic chemical products) were launched at No. 2
Tokushima Plant

Dec 1969

The Company began production of OSP (Organic Solderability Preservative) (which was later called Glicoat-SMD (=> Fine
Chemicals) for PWBs (Printed Wired Board) and other electronic components

Sep 1970

The Company began production in the field of housing materials, launching production of interior finishes (JULUX) at No.
2 Tokushima Plant

Jun 1972

The Company began production and sales of accordion gates (=> Exterior Products)

Mar 1975

The Company moves its share listings from the Second to First Sections of the Tokyo Stock Exchange and Osaka
Securities Exchange

Jul 1975

Tadotsu Plant was constructed in Tadotsu, Kagawa Prefecture

Nov 1975

Full-scale production of imidazole (=> Fine Chemicals) began at No. 2 Tokushima Plant (test production began in 1968)

Jun 1981

The Company opened a representative office in Los Angeles (which later became an overseas subsidiary as SIC in 1985)

Jul 1984

Production of insoluble sulfurs (=> Inorganic Chemicals) began at Marugame Plant

Sep 1992

The Research Center (now R&D Center) was constructed in Utazu, Kagawa Prefecture

Oct 1995

Ranzan Plant was constructed in Ranzan, Saitama Prefecture

Jul 2006

Shikoku (Shanghai) Co., Ltd. was established in Shanghai

2008

The Company began sales of a roughening agent for PWBs (=> Fine Chemicals), and constructed a new plant for GlicoatSMD at Marugame Plant

Aug 2013

Tokushima Advanced Chemicals Plant-3 (TAP-3) facility was constructed at Tokushima Plant

Sep 2014

Converted Nippon Ryutan Kogyo Co., Ltd., the only carbon disulfide production company in Japan, into a consolidated
subsidiaryApr 2015

Offices were established in Taiwan and Singapore

Apr 2017

Converted Nippon Koki Co., Ltd. into a subsidiaryJul 2021

Tokushima Advanced Chemicals Plant-4 (TAP-4) facility was constructed at Tokushima Plant

Apr 2022

Moved to the prime market following the TSE's market reclassification

Apr 2022

New chlorinated isocyanurates production facilities (NEO2022) constructed at Tokushima Plant

35

Ⅴ－６ ． History and Sales Trends
2022
Net Sales

Moved to Tosho Prime
Market1975

Moved to Tokyo Stock
Exchange Section 1
1962
Listed on Tokyo Stock
Exchange Section 22016 GliCAP
2008
2004
1991

1947
Establishment

1984

1972
1970
1968
1964
1957
1947

Microetching solution
for PWBs

Advanced Materials

Glicoat-SMD
Insoluble Sulfur
Exterior Products

Wall Materials
Imidazoles
Chlorinated Isocyanurates
Sodium Sulfate
Carbon Disulfide

36

Chemicals Operations

Chemicals Operations①Inorganic Chemicals

Ⅴ－７ ． Inorganic Chemicals(Millions of yen)

Inorganic
Chemicals[Major products]□ Carbon Disulfide …Essential materials for chemical
fiber rayon□ Insoluble Sulfur…Rubber vulcanization agent□ Sodium Sulfate…Warm bath effect accelerator forbath additives
Synthetic detergent cleaning aid

7,088(22.6％)

FY2022/12
Consolidated
Cumulative Q2
Net Sales
31,29739

Ⅴ－８ ． Insoluble Sulfur-Product Introduction□
□

□

□

□

□
□

Application: Vulcanizing agent for rubber
Main customers: Domestic and overseas tire manufacturers
The raw material rubber is hard, and it acquires the characteristic to extend and contractby adding sulfur and heating (vulcanizing).
When normal sulfur is used in the production process of radial tires, sulfur blooming(deposition) occurs on the surface of rubber and cause poor adhesion of rubber.
Since insoluble sulfur is dispersed in the material rubber, it can be used to suppress blooming.
For production of insoluble sulfur, polished handling technique for the company foundation
product “carbon disulfide” is required.
High quality is demanded in insoluble sulfur by tire manufacturers.
In March 2017, production facility expansion was completed, and our production capacity wasincreased to 1.3 times.
■ Insoluble Sulfur■ Manufacturing processes for insoluble sulfur (schematic diagram)Heating
450°C

Gaseous sulfur
Slow coolingRapid cooling(using carbon disulfide)
n=400-1,200nNormal sulfur

Insoluble Sulfur

40

Chemicals Operations②Organic Chemicals

Ⅴ－９ ． Organic Chemicals(Millions of yen)

[Major products]
Chlorianted Isocyanurates（NEO-CHLOR）… for swimming pool and septic tankdisinfectants□ HIPOLKA… Wastewater/sludge treatment
agent□

FY2022/12
Consolidated
Cumulative Q2
Net Sales
31,297
Organic
Chemicals
10,314(33.0%)42

Ⅴ－１０. Chlorinated Isocyanurates-Product IntroductionApplications: Sanitizing agent for swimming pools and septic tanks, chlorine-based sanitizing agent forspas and home baths□ Main customers: Swimming pool operators, schools, general consumers (U.S.)□ Main component: Chlorinated Isocyanurates□ Compared to other disinfectant agents for swimming pools, “NEO-CHLOR” is characterized by longer
duration in outdoor pools and little quality deterioration even after a long period of storage, as it undergoes
little degradation caused by ultraviolet rays.
□ It delivers strengths in “NAPIX,” an automatic chlorine feeder for swimming pools and business baths.
□ Utilizing the strong oxidation, bleaching, and cleaning power of chlorine, we are developing various fields
of application such as industrial and home sanitary field, ballast water (seawater used as weight on thebottom of the ship) treatment, drinking water application, and sanitation management applications invarious facilities.
□

 NEO-CHLOR product group Image of ballast water sanitization

Filter

Sanitization

Neutralization

Mixing
Cl

O

N

Cl N

O
N Cl

Sea water
injection
BackwashBallast tank
Sea water
discharge

O
ChlorinatedIsocyanurates「NEO-CHLOR MARINE」

43

Chemicals Operations③Fine Chemicals

Ⅴ－１１. Fine Chemicals(Millions of yen)

FY2022/12
Consolidated
Cumulative Q2
Net Sales
31,297[Major products]
Fine Chemicals
4,927(15.7%)

Water-soluble rust preventive agent for
printed wiring boards (OSP)□ Advanced & Specialty Chemicals…
Imidazoles (curing agent of epoxy resin)□Glicoat-SMD…

□

THEIC

□

Solder resist

Resin modifier, raw material for drug
… Raw material for heat-resistant wirevarnish45

Ⅴ－１２. OSP: Organic Solderability Preservative-Product Introduction□

□
□

□

□

□

Application: Water-soluble rust preventive agent for printed wiring boards
OSP: Organic Solderability Preservative]
Main customers: Printed wiring board manufacturers all over the world
By forming an organic coating on the copper circuit of the printed wiring board to preventoxidation of the exposed copper circuit, it ensures good soldering performance in theimplementation process, and contributes to reliable electronic component manufacture .
The main component of OSP is imidazole, which has a property to selectively undergo chemical
reaction with copper. Our strength is that we are also an imidazole manufacturer and cansynthesize the main ingredient to suit the required properties of OSP.
While rust preventive agents for printed circuit boards include metal plating in addition to OSP,
the percentage of OSP is still increasing.
Glicoat-SMD has acquired a lot of material designations from major electrical manufacturers, andhas become an industry standard.
By increasing the environmental performance ahead of other companies, we are increasing the
adoption results for automotive electrical components and semiconductor package boards.
 Printed wiring boards going throughGlicoat-SMD treatment tank

 Treatment with Glicoat-SMD (schematic diagram)
Substrate

Solder resist

Glicoat-SMD coating

O2

O2

Coppercircuit46

Ⅴ－１３. Advanced & Specialty Chemicals-Imidazoles
□
□
□

□

□

□

Application: Curing agent and curing accelerator for epoxy resin*, raw material for drugs
Main customers: Resin material manufacturers and drug manufacturers
Imidazole is used in a wide range of applications, including curing agent for epoxy resin and urethane
resin, raw material of drugs and agricultural chemicals, and raw material of various industrial
chemicals such as rust preventive agents.
The majority of our company sales come from application as an epoxy resin curing agent.
Epoxy resin which used imidazole as a component has optimal properties for electrical and electronic
component applications.
We have a lineup of various imidazoles to support the diverse curing speeds and properties
demanded by the users.
In the fields where competitive products (non -imidazole products) were strong, there isa movement for customers to newly adopt imidazole to improve the product performance.

*Epoxy resin: A collective term for resin-like compounds with epoxy groups that readily react at the ends of amolecule, and thermosetting synthetic resins that are formed by polymerizing the compounds withcuring agents. Used in printed circuit boards, paints, etc. in addition to adhesives.
 Electronic part using epoxy resin (example)

Applications of imidazoles from our company

Polyurethane
ポリウレタンDrugs and agricultural chemicals
医農薬
Automobiles
自動車others
その他･ Rubber applications･ Adhesive forstructures

Industrial
paint
工業用塗料

N

NH

Imidazole

Electrical and electronic
insulating materials47Ⅴ－１４. Advanced & Specialty Chemicals-Imidazoles
Engine CPU

Car navigation system[Laminated plate, sealing agent,solder resist ink]

[Liquid crystal sealing material]

Engine hood
[CFRP (reinforcedcarbon fiber)]Frame structure[Adhesive forstructures]Electric motor

Tires [Tire grip improving agent][Insulating powder
paint]Air hose[Acrylic rubber agent]48

Ⅴ－１５. Focused Products (Printed Wiring Boards Agents)













GliCAP®
Adhesion improving agent between copper circuit and resin on printed wiring boards.
Conventionally, unevenness was formed on surface by roughening (etching) the copper
so that the adhesion to resin was improved by “mechanical bonding” (anchor effect).
As the performance of semiconductors is improved, it is becoming more difficult toroughen the copper on package boards implementing high performancesemiconductors, with the copper circuit width decreasing to ultrafine level.
Copper circuits with smooth surface are required for high-frequency server boards for whichfurther acceleration is being demanded to achieve practical application of the 5th generation mobile
communication system (5G), since transmission loss is caused by the unevenness of the copper
surface in the high-frequency range.
GliCAP® has both properties to “strongly bind to resin” and “strongly bind to copper,”and can improve the adhesion “chemically” without roughening the copper surface.
We are including applications other than those in printed circuit boards for GliCAP ® in the
future.
Conventional
method(roughening)
従来方法（粗化）

GliCAP®
(smooth)

Resin

Resin

CopperCopperResinStrong bonding with resin

Strong bonding with copper
Copper49

Ⅴ－１６. Focused Products (Advanced & Specialty Chemicals)









Advanced materials
Advanced materials at our company refer to the products (compounds) that can improvevarious functions by blending them as materials for electronic parts such as semiconductorsthat are used in electronic devices, etc.
Demands for improvement in the properties of resin materials to be used (heat resistance, electricalproperties, etc.) are increasing as electronic devices evolve, and there are increasing
opportunities to consider the functional materials of our company.
The range of examination for the functional materials of our company is quite wide, andexaminations are being made even with carbon fiber reinforced plastics (CFRPs) that areused as structural materials for automobiles and aircrafts with a purpose to improve heat
resistance and strength.
Using the organic synthesis technology cultivated with imidazole and isocyanuric
acid, our company is committed to research and development of new functional material
products.

50

Ⅴ－１７. Focused Products (Advanced & Specialty Chemicals)A new isocyanuric acid derivatives
We developed this material by utilizing isocyanuric acid synthesis technology we haveaccumulated.
It has excellent heat resistance, light resistance, and transparency, and is used as a modifier for
sealing agent, etc.












New adhesion improver
A resin modifier that improves adhesion to inorganic materials such as metals through addition to
the resin. Since it delivers adhesion equivalent to the conventional modifiers while having no sulfur
content, it can improve the metal corrosivity, which was a problem with the conventional
product.
We are developing its application in a wide range of resin materials including epoxy systemcommonly used in electronic parts, acrylic system, urethane system and polyimide system.
Benzoxazine
A resin with excellent heat resistance, flame
resistance and electrical properties.
Examination is being made as a semiconductors
sealing agent and carbon fiber reinforced plastics(CFRPs) .

■ Benzoxazine51Ⅴ－１８. Focused Products (Advanced & Specialty Chemicals)

Glycoluril derivatives

A multi-functional resin modifier with transparency and high heat resistance.
It has 4 functional groups and is expected to form hardened materials with a high crosslinking
density.

Thiol groupProducts having a thiol groups (-SH) as a functional group will rapidly cure with epoxy resin
at a low temperature. Compared to the conventional modifiers, cured resin has excellent
heat resistance, moisture resistance, acid resistance, alkali resistance, and hardness, andit can significantly improve the resistance to heat and moisture, which had been a problem.
It has been adopted in the field of electronic materials that continue to advance inperformance and miniaturization.

52

Ⅴ－１９. Focused Products (semiconductor process materials)
Semiconductor process materials










Semiconductor process materials are used to form circuits for semiconductor silicon wafers.
It becomes more complex due to the creation of ultra-fine circuits, and the difficulty of material
synthesis dramatically increases.
As impurities contained in materials cause failures during circuit formation, metal impurities,
are especially required for strict control at the ppt (parts per trillion) level. The Company
established a new plant (TAP-4) capable of producing this quality (started operation in July2021).
The evaluation speed of semiconductor materials is very fast, and the rapid construction of thecompound synthesis route is required. Based on our original organic synthesis technology, theCompany has created a manufacturing method that consists of a multi-step synthetic route tosynthesize compounds with complex structures and a purification process that realizes themetal control at the ppt level, which allow us to provide new materials to customers promptly.
Semiconductors using our products are used in electronic devices worldwide, such as state-ofthe-art smartphones, PCs, and automobiles.
We aim for sales of 2 billion yen by 2030 in this field.

53

Housing Materials

Operations

Housing Materials Operations④Interior, Exterior Finishes
andPaving Materials

Ⅴ－２０. Interior, Exterior Finishes and Paving Materials[Major products]□□□

Interior materials (silicate walls, natural
material walls)
Plastered wall materials withmoisture control function and harmful
chemical substance and daily odor
adsorption/decomposition function
Exterior materials
Wet exterior material for housing
Paving materials
Natural stone paving materials, recycled
glass paving materials
Rubber chip paving materials(Millions of yen)

FY2022/12
Consolidated
Cumulative Q2
Net Sales
31,297
Interior, Exterior Finishes
and Paving Materials
647(2.1%)

56

Ⅴ－２１. Interior, Exterior Finishes and Paving Materials
Interior materials
The business started with "JULUX," the first industrial product for plastered wall material
in Japan, which was developed for in-house chemical glue CMC application.
It is difficult to handle Juraku wall, traditional Japanese wall, but with our wall materials,
uniform quality can be maintained only by mixing a specified amount of water. Our
plastered wall material is freshly drawing attention because of its property of highadsorption of chemicals that cause sick building syndrome such as formaldehyde as well asodor.
We are deploying the products characterized by high designability to our target market ofcommercial and public space design and custom-designed houses. Colors and expressions
are brought to a space by three-dimensional and various patterns that can be only achieved
with thick coating.
■ Interior materials

57Ⅴ－２２. Interior, Exterior Finishes and Paving MaterialsExterior and paving materialsWe also expand our business to “exterior” to cover the outside of buildings andexterior parts, and “paving” to cover the surfaces of roads and approaches.
Our exterior materials come in wide variations including colors and can create subtle expressions
as they are finished manually to the texture of the surface. As paving materials, we offer
materials such as natural stone, natural sand, and rubber chips.
For exterior materials and paving materials, we create synergistic effects by making use of
our sales channels for exterior products.

■ Paving materials

58

Housing Materials operations⑤Exterior Products

Ⅴ－２３. Exterior Products(Millions of yen)

[Major products]
Home Exterior Products□ Gates, fences, carports, and decks
First product□Accordion gatesin industry(expansion type gates)
which was□ Art Walldeveloped by(aluminum system fence)
our company

Decorative Exterior Products□ Large gates, fences, pathway shelters,
bicycle parking spaces□
Garbage accumulation storage (first productin industry which was developed by ourcompany)□ Green roof, etc.

Exterior
Products
7,784(24.9％)

FY2022/12
Consolidated
Cumulative Q2
Net Sales
31,29760

Ⅴ－２４. Home Exterior Products









In 1971, when the motorization was rapidly progressing, we devised an “accordion
gate,” which can be easily opened and closed with an expansion mechanism, and which
can respond to the residential situation with limited space in Japan, and it became thestandard for gates in front of the car shed.
Since then, we have continued to add to the product lineup for general gates, carsheds (car ports), fences, deck materials, terraces, etc.
We also devote our efforts in design, in addition to our focus on functions, and won
the first “G mark” (current Good Design Award) in the exterior industry in 1984.
‘Fun roof,’ our terrace roof with a sample design which harmonizes to the houseusing flat, wood-like ceiling materials received the 2019 Good Design Award.

■ Terrace■ Carport■ Accordion gate61

Ⅴ－２５. Decorative Exterior Products■ Pathway shelter■ Bicycle parking space■ High strength car stops■ Garbage accumulation storage）62

Ⅴ－２６．Efforts in Housing Materials Business

We are adding to the lineup of high-strength exterior products that are resistant to wind and snow
and promoting sales expansion, based on the fact that large-scale disasters such as typhoons havebeen recently happening one after another over the country.
We deploy the strength standards and quality cultivated in the decorative area to all products andare developing products with high quality and strength.

As parts of the lineup of high-strength products, we have commercialized fences for detachedhouses, and independent terraces in addition to the large fences, archways, Large fences, and car
ports.

■ Fences■ Shelter■ Fences■ Car port

■ Terrace63

Long-Term VisionⅤ－２７．Progress on Business Reform Policy
Next FY2022/12 is the final year of “STAGE 1”.
We will achieve our goals and aim for further growth in “STAGE 2”.

Business Name

Topic

STAGE 1 Target

Inorganic Chemicals•

Continue efforts to improve the quality of insoluble
sulfurConsider commercialization of products
developed from sulfur

Consolidated sales of
14 billion yen

Enhance production facilities (bulk products, ODM
products, etc.)
Strengthen sanitary products business

Consolidated net sales:
10 billion yen

Functional materials: Strengthen response to
demand for semiconductor process materials.
Develop new applications for resin modifiers(low dielectric, CFRP)
Glicoat-SMD: Aim to sell new OSPs that arehalogen-free and have long-term storage
stability
GliAS: Start handling Glicoat-SMD automatic
analyzer. Aim to propose total solutions
GliCAP: Approval of activities and achievements

Consolidated sales of 8 billion
yenStrengthen sales activities with high-intensity
products
Promote improvement of production efficiency
through Smart Factory

Consolidated net sales: 25
billion yen•

Organic Chemicals••

Fine Chemicals

•

•

•
•

Housing Materials••(Results in 2022/3: 12.1 billion yen)(2022/3 results: 13.0 billion yen)(2021/3 results: 9.7 billion yen)(2021/3 results: 17.9 billion yen)65

Ⅴ－２８．Progress on Companywide Reform Policy
We are working to build a foundation that can accommodate diverse work styles, fostering a sense of selfimprovement, and creating a framework for change, and we are generally making progress as planned.
Item

Topic

Creation of values◆ Enhance brand value (Formulation of SHIKOKU QUALITY)◆ Strengthen environmental initiatives (Issue CSR report)◆ Implement measures to create new businesses(Implement internal recruitment)

Creation of reserve energy◆ Promotion of telework and other initiatives to improve work efficiency
・ Promote telework, which allows employees to work efficiently regardless of
their physical location

Creating ofoperational bases◆ Consolidation of sales bases

Creation of organization◆ Start discussion to determine the organizational structure to be pursued
・ Transition to a holding company structure (see page 27 for details)

Creation of company climate◆ Dissemination of long-term vision and exchange activities to eliminate
barriers between divisions
・ Hold workshops, roundtable discussions, and other events

Creation ofhuman resources◆ Create an environment in which employees can actively tackle challenges(Review the evaluation system, including the introduction of challenge goals
with a point system)

・ Moved interior, exterior finishes and paving materials production base to
Yoshinari location of Tokushima Plant

66

Ⅴ－２９. Business Reform Policy
Chemicals
Operations

Continue to develop and advance for the sake of the world

Fine

Organic

Inorganic

Desired State
Make use of materials
which are difficult to handle in a recyclingoriented manner and contribute totechnological innovation and environmental
preservation around the world

Strategic Scenario
Accumulate sulfur handling and synthesis
reaction evaluation technologies
Create new value starting from making use of
sulfur and expand the business domain

Deliver cleanliness topeople across the globe by protecting theenvironment and ensuring sanitation

Anticipate customer needs based on social
issues such as the water environment andsanitation and make optimal proposals
concerning sterilization and cleaning with ourunique technologies and services

Contribute to technological advancement
by providing highly functional products
based on unique technologies

Set unique themes by anticipating needs andestablish technologies in cooperation withprosperous customers.
Develop highly functional products based on
accumulated unique technologies

Create global standards with our new
technologies

Set themes with an eye on market trends and develop
products drawing on our strengths
Strive to propose
comprehensive solutions from the point of view ofcustomers67

Ⅴ－３０. Business Reform Policy

Housing
Materials
Operations

Design a new lifestyle in the future and contributeto the community development around the world for everyone’s happinessHousing
Materials

Desired state
Design a new lifestyle in the future
and contribute to the community
development around the world
for everyone’s happiness

Process to provide value
Attract and acquire human resourcesand engineers in Japan and overseas, withoriginal products placing focus on the design
and functionality

Promote alliance and extend operations
globally with our unique product categories68Ⅴ－３１. Companywide Reform Policy Set six companywide reform policies toward realization of the desired state in 2030 and push forward with them mobilizing
group-wide efforts
Desired statein 2030

Toward “one- step-ahead, proposal” company with Dokusouryoku(creativity)
Solve social issues with creative ideas, leading the progress of the world❶ Creation of values
Increase brand value andtake on challenges
for new business Improvement of SHIKOKU QUALITY

Companywide
reformpolicy Establishment of a framework thatmakes it easier for everyone topropose and take on challenges for
new businesses and ideas for suchbusinesses❷ Creation of reserve energy ❸ Creation of operational bases
Improve efficiency to secureresources for reforms

Gain a foothold into the world
and accelerate global businessexpansion

 Elimination of inefficiencies andsimplification and standardization ofoperations

 Formulation of companywide operationalbase strategy

 Efficiency improvement by making useof technology such as IT

 Optimization of domestic production,
development and sales operational bases

 Optimal allocation of personnel andwork style reforms

 Optimization of overseas production,
development and sales operational bases❹ Creation of organizations❺ Creation of company climate ❻ Creation of human resources

Establish a group governancestructure to realize the vision

Foster company climate whichembraces diversity andencourages challenges

Build a framework to encourage
individuals to take on challenges
and evaluate individuals fairly

 Spread of “proposal-based styles” among
employees

 Establishment of a framework forrecruitment which attracts desired humanresources Building of an optimal group
governance structure Establishment of a group governancestructure in keeping with the businessexpansion overseas

 Fostering of company climate to develop“proposal-based styles”
 Establishment of a working environment
which accommodates diverse work styles

 Creation of opportunities for growth where
each individual is respected Revision to and strengthening ofmanagement of the evaluation system69

Ⅴ－３２. Yonpou Yoshi – Contributions to Stakeholders –Customers“One-step-ahead” values
We will provide new values
with our unique, state-ofthe-art products andservices.

Employees

Society

Challenges and growth

A better tomorrow

We will support a fulfilling
life with a sense of real
growth through various
ways of working andthrough taking onchallenges.

We will contribute to theresolution of social issues
and to realize a prosperous
living environment.

Shareholders
Shareholders return
policyWe will aim to achievea total return ratio of 50%
on a consolidated basis.

70

Contact Information
Corporate Planning Dept.
SHIKOKU CHEMICALS CORPORATION

TEL：+81-(0)877-21-4119

FAX：+81-(0)877-22-0411
www.shikoku.co.jp[Note regarding this document]
Forward-looking statements or projections mentioned in this document, including earnings are based on
currently available information and actual results may differ from the projection due to various factors.
Further, the purpose of this material is to provide information to the investors, and not to serve as arecommendation to buy or to sell. Please note that SHIKOKU CHEMICALS CORPORATION will not be
responsible for the consequences of investments etc.