C.I. TAKIRON Group

Integrated Report 2021

Revision of the C.I. TAKIRON Group
Corporate Philosophy as the Foundation
The C.I. TAKIRON Group has establisheda new Group Corporate Philosophy with the hope of
becoming a necessary corporate conglomerate always trusted by society.
As the world encounters more serious social issues,
our Group will contribute to the realization of a sustainable society
by pursuing the potential of tomorrow.

Editorial Policy
We publish this report for the purpose of deepening communication with all of our
stakeholders by providing information about ESG management as well as the basic
sustainability concepts and specific initiatives of the C.I. TAKIRON Group.
Reporting Period
FY2020 (April 1, 2020 to March 31, 2021)

Introduction of Communication Tools
We cover basic information about the C.I. TAKIRON Group on thecompany homepage while comprehensive management information is
published in the annual report.

* This report includes some information outside of this reporting period.

Corporate Information

Reporting Organizations
C.I. TAKIRON Corporation and its Group Companies

https://www.takiron-ci.co.jp/corporate/

Publication Date
October 31, 2021

Annual Report (IR Information):
https://www.takiron-ci.co.jp/ir/

Main Reference Guidelines
Ministry of Economy, Trade and Industry
Guidance for Collaborative Value Creation

Inquiries regarding this report:

Ministry of the Environment
Environmental Reporting Guidelines

Corporate Planning Department
Corporate Communication GroupInternational Integrated Reporting Council (IIRC)

2

International Integrated Reporting Framework

GRI (Global Reporting Initiative)

SDG Compass

Sustainability Reporting Standards

C.I. TAKIRON Group Integrated Report 2021

Tel: +81-3-6711-3718

Group Corporate Philosophy
MissionCreating a people- andearth-friendly future
That is to say, we will carry on fulfilling our responsibility and role in people's
lives and the global environment. And to do so, we will tap into the various
business resources we have built over the years.
Since our founding in 1919, the C.I. Takiron Group has been supporting
people's daily lives and creating a better tomorrow, and we will continue tobe a corporate group that provides peace of mind and comfort for the future.

Aspired Corporate Culture

Pride in our accumulated value andthe courage to transform
These are things that are important for us to have in order to achieve our
Mission.
While remaining proud of the fact that we have refined our technology
and built up trust over the past 100 years, we will continue to nurturea corporate culture that never settles for the status quo, is willing totransform, and always has the courage to boldly take on new challenges.

Sustainability VisionCorporate Message

Supporting Today, Changing Tomorrow
The C.I. TAKIRON Group supports the lives of people today and always works
to build a better future for people and the environment with the courage tochange toward more prosperous, comfortable lifestyles of tomorrow.

CONTENTS
Corporate Value

Environmental Report

History of Social Issues and C.I. TAKIRON Tenacity .............................. 4
Business Overview ............................................................................. 6
Financial/Non-financial Highlights ...................................................... 8
Value Creation Process ..................................................................... 10

Environmental/Decarbonization Initiatives ........................................ 36
Environmental Index ........................................................................ 38
Environmental Accounting ............................................................... 41

Sociability Report
Top Message ............................................................................... 12
Vision and Strategies
FY2021-FY2023 Medium-term Management Plan ........................... 19
Sustainability Vision ......................................................................... 22
Materiality ....................................................................................... 24

Business Strategy■ Construction Materials Division ................................................... 26■ Environmental Materials Division ................................................. 28■ High Functional Materials Division ............................................... 30■ Specialty Films Division ................................................................ 32■ R&D Department ......................................................................... 34

Human Resource Strategies ............................................................. 42
Health and Safety ............................................................................ 46
Dialogue with Stakeholders ............................................................. 48
Local Communities .......................................................................... 52

GovernanceCorporate Governance .................................................................... 54
Compliance Risk Management ......................................................... 58
Directors, Audit & Supervisory Board Members,
and Executive Officers ...................................................................... 60

Panel Discussion with Outside Directors............................... 62
Main Financial/Non-Financial Data (Quinquennial Data) ...................... 68
Corporate Profile and Stock Information ............................................ 70
Business Sites ..................................................................................... 71

C.I. TAKIRON Group Integrated Report 2021

3

Corporate Value

Social Issues and History of C.I. Takiron's Challenges
1959

Takiron Chemical Co., Ltd. changes its
corporate name to Takiron Co., Ltd.

1971

Hama Kasei Co., Ltd. and Kobe Resin Co. Ltd.
merge to form C.I. Kasei Co., Ltd.

1961

Takiron Chemical Co., Ltd. is listedon the Second Section of the
Osaka Securities Exchange.

1935

1963

Takigawa Celluloid Plant incorporates
under the name Takigawa CelluloidCo., Ltd.

Hama Kasei Co., Ltd. established.
Kobe Resin Co., Ltd.
founded.

Takigawa Celluloid
Plant founded.

1930

Takiron Chemical Co., Ltd. listed on theFirst Section of the Tokyo Stock Exchange andchanges its name to Takiron Co., Ltd.

1965

1919

1919

1973

1960

1970

1980

History of Challenge
Our company has confronted a variety of challenges without fear to resolve social issues and address customer needs since its
founding in 1919 by clearly understanding the changes in each generation.

1919

1978

Launch of Remanufactured
Celluloid

Launch of Sky 8
Drip, Dust, and Mist
Prevention

Recycling

With mist prevention(Sky 8)Mist inside of greenhouses
causes diseases in crops. We set
out to prevent fog and mist in greenhouses from around 1976 in light offeedback from farmers about mist forcing them to wear rain gear during
work and other such concerns. After three years of testing, our research
discovered a way to mitigate mist by applying a special silicone to change
the disposition of wet film surfaces. This led to the acquisition of a patentand the start of Sky 8 sales in 1978.

1955

1982

Launch of Rigid Vinyl Chloride
Sheet Sales

Launch of Vynon
Aqua ATR (Current

Shift toward Materials that Meet
Market Needs

Product Prototype andResearch Group

Our research into vinyl chloride resin as flame-retardant materials
began in 1948 to overcome the shortcomings of celluloids. TAKIRON
Plate started sales in 1955 as a rigid vinyl chloride sheet. We began to
manufacture rain gutters in 1957, rigid vinyl chloride corrugated sheetwith extrusion processing in 1958, and polycarbonate plate in 1961.
We also transitioned metal products (galvanized iron sheet/tin rain gutters) to light plastics which does not rust.

4

Without mist
prevention

Remanufactured celluloid is made bymaking recycled celluloid sheets from thewaste celluloid produced when process- Celluloid Sheeting new celluloid sheets (average of 20%
of waste celluloid is generated). Orders from processors boomed forthese recycled celluloid sheets after the recycled product was praisedfor having almost the same high-quality as new celluloid sheets.

C.I. TAKIRON Group Integrated Report 2021

Trans-Tokyo Bay Highway
Umihotaru Undersea
TunnelVynon Hydrotite)

Hydrophilic
Water Sealing Material

Vynon Hydrotite

Water-sealing/Waterproofing Panels and Shields
A specialized production method succeeded in blending and molding composite and water-absorbing resins. These panels and shields swell in water toobstruct the penetration of ground water. The product is used as segment
sealant in underground tunnels and waterproofing for concrete joints. Today,
water sealing materials are used in subway construction throughout Asia.

Former Takiron

Former C.I. Kasei

C.I. TAKIRONNet Sales(Billion Yen)
160

*Net Sales 1935 to 1986: Non-consolidated; 1987 to 2020: Consolidated

2017

140

Takiron Co., Ltd. and C.I. Kasei Co., Ltd.
merge and change the corporate name to
C.I. TAKIRON Corporation.

120

100

80

60

40
*2
20

*1

1990

2000

2010

2020 (Fiscal Year)0*1 Total from November 21, 1986 to March 31, 1987 due to change in the accounting period *2 Total from October 1, 1989 to March 31, 1990 due to change in the accounting period

1995

2007

PVC Stair Treads with Sound
Absorption and Slip Resistant Function

Launch of Lume Carbo
Large Polycarbonate
Plastic Double-layer Panel

TAKISTEP

Safe Even Under Outdoor Rainy Condition
Inspired by customers’ potential requests for more safe stepping on slippery steel/metal staircases, TAKISTEP – sound absorption and slip resistant
PVC stair tread was developed and launched in 1995.
Indeed that happened often for a first-ever product, TAKISTEP also led
problems/complaints in the initial phase, however, we have tenaciously addressed solutions for problems. These our efforts improve TAKISTEP as astable and safe product, and create the unique installation procedure.
We also have continued to revamp quality of materials, product design,
procedure of nosing form by trial productions over and over. After all thesetrials and errors, the unique features of TAKISTEP are recognized widely inindoor and outdoor flooring sector.

1999
We developed and started sales of the FM Plate
product, which conformed to the FM4910* flameretardant property standard enacted after a large-scale
fire at an overseas semiconductor plant. FM Plate forms
a carbon layer that acts as an oxygen shield against afire heat source. This enhances safety against fire by
preventing the spread of fire and smoke.
* The FM4910 is a flame-retardant standard for materials used insemiconductor plants and other clean rooms established by the FM
Global insurance company in the United States to prevent fires.

The Lume series provides a lineup of
products to drive energy savings by letting plenty of natural light into buildings while dramatically reducing theheat lost from openings. Applications
include Lume Wall and Lume Roof.

Lume Wall

2021
Release of Belbien (Fireproof
Decorative Adhesive Film) and Neo

Launch of Flame-retardant Plastic Sales
Contributions to Fire Safety

Lightweight and Highly Rigid
with High Heat Insulation

Test Starts

Clean (Flooring Material) Antibacterial/Anti-virus Materials
Anti-bacteria/Anti-virus

After 35 Seconds

Walls: Belbien
Flooring: Neo Clean

These products have an antibacterial activity value of 2.0 or higher and reduce atleast 99% of viruses. This inhibits the growth of bacteria and viruses
which in turn contributes to maintaining more hygienic environments.

Carbonization After 5 Minutes

FM Plate Burning Test

C.I. TAKIRON Group Integrated Report 2021

5

Corporate ValueBusiness Overview
The C.I. TAKIRON Group contributes to better life and development of society in addition to solutions toward environmental
and social issues in four business sectors driven by its technology and expertise accumulated over more than a century.

FY2020Operating Profit

Net Sales

consolidated¥134,470
3.6

Year-on-year Rate
Other

¥448 million
0.3％
Specialty Films
Business

Down

Construction
Materials
Business¥42,147 million
31.3％¥19,464 million
14.5％High Functional
Materials
Businessmillion％¥8,511
15.4

million％Up

Construction
Materials
BusinessOther¥324 million
3.8％¥2,069 million
24.3％

Specialty Films
Business
Net Sales¥1,984 million
23.3％

Operating Profit¥17,478 million
13.0％

Environmental
Materials Business¥54,930 million
40.9％High Functional
Materials
Business¥1,803 million
21.2％

Note: "Other" consists from business segments that are not covered in the reported segments and includes sales of testing equipment.

6

C.I. TAKIRON Group Integrated Report 2021

Environmental
Materials Business¥2,329 million
27.4％

Construction Materials BusinessHousing Materials Business/
Flooring and Decorative Materials
Business

Small-scale Rainwater Storage andFiltration Tanks

We comprehensively create urban spaces andprovide future-oriented safe and comfortableliving environments.
We of course provide safety and durability but
also have a broad track record which has earned
a high level of trust in the construction field
where aesthetics and comfort are essential. Our
wide-ranging product lineup supports comfortable living and urban environments.

Flooring for Apartment
Corridors

Fireproof Decorative Films
with Adhesive
High Heat Insulating Honeycomb structured
Polycarbonate Panels

Environmental Materials Business
Agriculture Business/
Infrastructure Material BusinessWe propose optimal environment with our widearray of agricultural materials and contributeto building, maintenance, and improvement ofa safe and secure social infrastructure.
We contribute to the revitalization of agriculture
by providing high-quality agriculture materials,
such as agricultural films, plant stakes and irrigation tubes. We also offer materials that support thefunctionality and safety of social infrastructure according to the various applications and purposes.

High Stiffness Polyethylene Pipe
(Civil Drainage Pipe)

Waterproof Geomembranes(Industrial Waste Disposal Facilities)

Pipe Rehabilitation Work
(Sewer Pipes)
Agricultural Plastic Film/Resin-coated Steel Pipe

High Functional Materials BusinessHigh Functional Materials BusinessWe support the growth of next-generation industrial fields through our advanced material
processing technology.
C.I. TAKIRON high functional materials play
an important role in many fields from industrial applications in technically high demanding
semiconductor and liquid crystal manufacturing
to the high reliability needs of cameras and RC
servos.

Industrial Plastic Plates (Semiconductor
Manufacturing Equipment)

Micro Motors
Static Dissipative Plastic Plates (Clean Room Partitions)

Specialty Films Business
BONSET Business/ SANZIP BusinessWe offer heat-shrinkable films and a wide array of high-precision zippers for eco-friendly
products and other customer needs.
Our internationally-recognized, advanced film
technology allows the optimal design, resulting
in beautiful product labels that improve productvalue and products which demand for high hermeticity.
Zipper Tapes

Heat Shrinkable Films

C.I. TAKIRON Group Integrated Report 2021

7

Corporate Value

Financial/Non-financial Highlights
Net Sales (Millions of Yen)

139,432

134,470

FY2019FY2020Point
We have executed measures to maximize Groupwide synergy and growth capabilities as well as
strengthen earning power in the final year of ourGood Chemistry Good Growth 2020 Medium-termManagement Plan. In addition to the impact of the
COVID-19 pandemic, the declining number of new
housing construction projects and dissipation of special demand due to wind damage in the previous
year, our year-on-year income fell 3.6%.

Ordinary Profit (Millions of Yen)

7,611

8,807

FY2019FY2020Point
The C.I. TAKIRON Group was also impacted by adecline in net sales, but year-on-year profit increased
15.7% due to a decrease in the cost of sales as well
as selling and administration expenses.

Current Net Income Attributable to the Owners of Parent(Millions of Yen)

13,091

5,332

FY2019FY2020Point
Net income attributable declined 59.3% year-onyear due to the transfer of fixed assets at a consolidated
subsidiary in the previous fiscal year.

Current Net Income Per Share (in yen)

134.4754.77

FY2019FY2020

Point
Current net income per share declined by 79.7
yen year-on-year due to a decrease in net income
attributable to the owners of parent.

Capital Investment (Millions of Yen)

8

12,3885,149

FY2019FY2020C.I. TAKIRON Group Integrated Report 2021

Point
We continued to invest in improving major productproduction in each business segment. The amount of
capital investment was 41.5% of the previous fiscal year
due to the completion of planned capital investments.

Energy Consumption Rate (GJ/Manufacturing Ton)
Point

12.2

12.6

FY2019FY2020We have been promoting energy-saving activities
throughout the entire C.I. TAKIRON Group. However,consolidated and non-consolidated energy consumption rates increased due to the large drop in production volume resulting from the COVID-19 pandemic.
(+4.9% compared to FY2019)

Unit CO2 Emissions (t-CO2/Manufacturing Ton)

CO2

0.55

0.52

FY2019FY2020Point
We reduced our unit CO2 emissions factor as a result of energy savings activities and due to contracted
power companies having lower CO2 emissions factors
than in FY2019. (-4.4% compared to FY2019)

Water Consumption (Thousand m3)

1,053

1,000

FY2019FY2020

Point
Water consumption decreased due to identifying
area where leakage was occurring and carrying out
necessary repairs or replacing pipes. (-5.0% compared to FY2019)

New Female Graduate Employment Ratio (%)*

有休

* N on-consolidated figure
for C.I. TAKIRON

54.5

30.8

FY2019FY2020Point
We hired 13 new graduates (including four females) in contrast with our employment plan inwhich we planned to hire 15 new graduates (five females), and our female employment ratio decreased
compared to fiscal 2019.

Rate of Paid Leave Taken by Employees (%)*

91.2

88.2

FY2019FY2020Point
Our target for the rate of paid leave taken by employees was 80% or above. Therefore, we introduced
a financial incentive program to encourage employees to take paid leave and strategically encouraged
employees to take paid leave. (-3.0% compared to
FY2019)C.I. TAKIRON Group Integrated Report 2021

9

Corporate Value

Value Creation Process
The C.I. TAKIRON Group aims to contribute to greater sustainable development of society by generating
value through products and services that contribute to solutions to social issues in the hope of realizing its
mission to create a people- and earth-friendly future.

Input

Business Activities

Financial capitalp Corporate Philosophy
Gr o u● Sound financial foundation

S ustaManufacturing capitali n a b ili t y V i s i o n● Raw materials(resins and steel materials)● Manufacturing bases/equipment

Ma
rke
tin
g

Trusted Relationships with
Business Partners

n ol oskills and know-how (involved in
manufacturing, technology,
development, sales, management,
and global business)ion● Human resources with advanced

Product
Development
and
ステ
ージ
DesignーCapabilities
トセ
メ
ッ ン
メ
ト
業
Customers
First
企

d uct

Human capital

Polymer Processing Technology

a le s S e r v i c e s T e c hcompetitive advantages

Value Chain● Our R&D system creates

Five Strengths

A ft er -s

technology, equipment design
technology, fabrication technology,
and accumulated know-how

gic a

Pro

● Various technologies - mix design

Pro
cur
em
e

nt

Intellectual capital

ent
elopm
Dev
&
h
arc
se
e
R

lG

Climate Leveraging Individuality

u id

e

an
c

Social capital● A network connecting us with

S a le s

all stakeholders, including
domestic and foreign supply
chains that are built on trust● Brand strength cultivated fromincreased trust

Corporate GovernanceCompliance
Risk Management

Code of Conduct

Natural capital● Natural resources and energy

Social Issues
Increasing frequency and intensity of natural disasters
Measures against infectious diseases/epidemics

Stakeholders
10

C.I. TAKIRON Group Integrated Report 2021

● Decline in the working population● Labor shortages● Working environments

Diversity of lifestyles● Pursuit of convenience and prosperity

Growing complexity of labor issues● Work style reform

Aging society and declining birthrate

Shareholders and Other Investors

Customers

DiversityOutput
Construction Materials Business

Materiality

Polycarbonate building materials, housing materials, piping
and pluming equipment, flooring materials, decorative
materials, water damage prevention materials, etc.

Source of Corporate
Growthdevelopment of
national lands

Safety andSecuritya rich living
environment

climate supporting value
creation● Advancement of Polymer
Processing Technology

Environmental Materials Business
Agricultural materials, binding materials, infrastructurematerials, civil engineering products, liquid chemical tanks, etc.

Respect of
Individuality

Commit toTransformation
CX2023● Sound, prosperous● Realization of● Cultivation of a corporate

Medium-termManagement
Plan

Outcome● Enhancementof lifestyle
convenience● Prevention andmitigation ofdisasters● Promotion of diversity● Management Commitment● Revitalization

on Enriching Lives

Responsibilities toSociety

Comfort andPeace of Mind

High Functional Materials Business
Plastic Sheets, machining materials, micro motors, etc.

● Handling of marine plastic

and enhancementof social
infrastructure● Coexisting withsociety and theenvironment

pollution● CSR procurement● Reduction of environmental
impact● Expansion ofenvironment-friendly
products

Resilience*● Enhancementof agricultural
productivity● Resource andManagement
Platform

Specialty Films Businessenergy savings

Heat-shrinkable films, zippers, etc.

● Decarbonization● Comprehensive compliance● Reduction of waste

and risk management
response● Enhancement of corporate
governance* The ability to recover from and addresssocial challenges and crises, such as natural
disasters and damage to social infrastructure.

SDGs (Sustainable
Development Goals)

Deterioration of the global environment● Constraints of resources and energy

The Sustainable Development
Goals (SDGs) are internationaltargets set from 2016 to 2030
included in The 2030 Agenda
for Sustainable Development
adopted at the United Nations
Summit in September 2015.

● Handling of marine plastic pollution● Unstable agricultural production● Insufficient response to climate change

Business Partners

Environment

Local Communities/Society

Government and Municipalities

Employees

C.I. TAKIRON Group Integrated Report 2021

11

Top Message

12

C.I. TAKIRON Group Integrated Report 2021

To Realize a Sustainable Society
The C.I. TAKIRON Group has entered a new stagestriving to reach new heights and will further solidify its
presence even in the sustainability field.
Representative Director President

Kazuya Saito

To Become a Corporate Enterprise Solving Social Issues through Business
Review of the Medium-termManagement Plan and Changes in theBusiness Environment
Good Chemistry Good Growth 2020 was the initial C.I. TAKIRONGroup medium-term management plan. At the beginning of thismedium-term plan, the C.I. TAKIRON Group started out strong in a
relatively robust economic environment worldwide right after the
management integration. However, the COVID-19 pandemic struckin the second half of the year constricting social and economic
activities, dramatically changing the business environment, and causing
stagnation over the medium term.
Although this did negatively influence our business activities in many
ways, I believe that we are lucky the impact overall was negligible. In
fact, this economic environment did also have some positive impact on
our Group. The COVID-19 crisis generated new demand. For example,
we were able to create new value many times over by responding tomarket needs from our partitions to prevent slashing to construction
materials with anti-bacteria and anti-virus performance. Our work tobuild a strong management foundation also benefited. We learned
that our Group crisis management system was on the right track andfound opportunities to accelerate new work-style programs, such as
telework and an open office which had been in the trial phase.

The C.I. TAKIRON Group had set challenging goals in the previous
medium-term management plan expecting to greatly capitalize on
integration synergy. However, the COVID-19 pandemic hit all of society
in many major ways, and we were unfortunately unable to attainour quantitative targets. Nevertheless, the C.I. TAKIRON Group did
sufficiently advance growth investments and various reformations forthe future.
In particular, the system integration completed as one basis forour transformation has proven very successful at measuring theefficiency and profitability of each business based on the same set ofstandard criteria. Even outside of this system integration, our Group
has achieved almost all of our qualitative goals for the last four years
from consolidating our production bases for polycarbonate plate andrestructuring plant and research sites to optimizing sales systems andreinforcing production facilities worldwide. Investments in new sectors
and the creation of core businesses for the future are the only qualitative
challenges left to tackle. The new Commit to Transformation: CX2023
Medium-term Management Plan picks up where the previous mediumterm plan left off. The C.I. TAKIRON Group will successfully complete
its original plans for transformation drafted during the management
integration.
We will always recognize our duty to drive forward clear growthand enhance corporate value regardless of the ever-changing businessenvironment by reflecting on issues faced in the past and capitalizingon those experiences.

C.I. TAKIRON Group Integrated Report 2021

13

Top Message

To Encourage a New Mindset in All
Corporate Officers and Employees via a
Revised Corporate Philosophy
The success in reaching the qualitative targets laid out by the initial
medium-term management plan after the management integrationmeans the C.I. TAKIRON Group has entered the next stage to ramp
up efforts.
We started drafting a long-term vision linked to the new mediumterm management plan that begin in fiscal 2021 while at the sametime revising our Corporate Philosophy. I think fiscal 2020 was asplendid opportunity to align the vector of all of our corporate officers
and employees as the new start from our 101st year in business.
We found solutions to immediate challenges, such restructuring andoptimizing functions and organizations, confronting major change inthe social economy due to the COVID-19 pandemic, and work towards
carbon neutrality and other sustainability issues with a major ten-year
milestone in 2030.
The true essence of a corporate philosophy is to provide groundedprinciples for employees to overcome difficulties and concerns and forthe company to reflect on many times as the business environment
undergoes even further change.
The new Group Corporate Philosophy consists of "Mission" and"Aspired Corporate Culture."
Our message sets out a mission of creating a people- and earthfriendly future, which inherits many values from our former slogan
of creating a people- and earth-friendly future through plastics
technology. Our original mission has been simplified while holding dear

14

C.I. TAKIRON Group Integrated Report 2021

to the core beliefs as a way to better clarify our approach as a corporategroup which solves social issues in order to contribute to society inmany different walks of life. Moreover, our Aspired Corporate Culture
has been reborn to advocate pride in our accumulated value and thecourage to transform. Polished technologies and the ability to always
earn the trust of both our customers and society are the reason C.I.
TAKIRON has been in business over a century. This is not only a pointof pride but also demonstrates an approach to cultivate a corporate
culture that always transforms itself never content with today.
Concurrently, the C.I. TAKIRON 2030 Vision—the first long-termGroup vision—lays out what we must strive to do to become a corporategroup that delivers peace of mind and comfort to the future of ourplant through a creative evolution, illustrating where we want to be 10
years from now in 2030. In order for this Aspired Corporate Culture to
become more than just words, we have set specific numerical targets as
long-term goals. The C.I. TAKIRON Group will aim to achieve net salesof 200 billion yen, operating profit of 20 billion yen, and an operating
profit margin of 10% by 2030.
Launched at the beginning of 2021, the Commit to Transformation:
CX2023 Medium-term Management Plan is the first step towardachieving those long-term targets for 2030 and to another century inbusiness. By revising the Group Corporate Philosophy at this time, I
think we have provided a foundation to unify the Group in goals to
realize our mission and achieve these long-term targets. In the future,
C.I. TAKIRON will fully raise awareness about this Group Corporate
Philosophy throughout the organization. This will ensure each andevery employee takes action by recognizing this philosophy, which will
broadly share the value offered by the C.I. TAKIRON Group.

New Commit to Transformation 2023
Medium-term Management Plan
I would like to take a moment to touch on three points about theCommit to Transformation 2023 (CX2023) Medium-term Management
Plan launched in April 2021.
The first point is that this new plan is based on a long-term perspective.
Phase 1 acts as the first three years of three stages backcast from thelong-term vision and targets. The medium-term management plan sets
specific targets to tackle as a Group during this first phase. Although
we must adapt to changes in the short-term business environment, our
vision will act as an unwavering long-term axis for corporate activities.
The second point is transformation. The X in the CX2023 stands forreform and a crossover (to go beyond) alongside and through the Group
Corporate Philosophy embodied by the simple word Transformation.
The Commit to Transformation theme incorporates the values that wetruly want all of our employees to embrace. All of us will take on eachjob while keeping in mind a corporate culture that strives to always
transform itself never content with today.
The third point is undertaking effective measures. We have set Key
Performance Indicators (KPI) and six priority actions as well as 2 sourcesof growth capital and 2 newly established support systems to help lead
us to success. Even though the previous medium-term management
plan did solve many challenges that our Group faced, there were
quantitative targets that we did not reach. The new medium-term
management plan reflects on these unattained targets to fullyrecognize the need to fulfill the new Group goals. At the same time,
our approach will flexibly revise targets that have been set according
to the changing social environment to properly respond as occasion
may demand. We will closely watch where the C.I. TAKIRON Group ison the road map toward our targets to make sure we are on the rightpath. I believe making the right decisions according to circumstance isextremely important.

The C.I. TAKIRON Group has been a company proposing solutions
to social issues through business since its founding, which is basis of
the medium-term management plan. To continue to take action as acorporate enterprise addressing social issues in the future, our Group
must continue to transform together with the times.
The social landscape always changes rapidly, ever accelerating thebroadening diversification of values among people. As a corporate
conglomerate, we must never settle for today and always work to learn
the techniques and skills that can resolve challenges unlike those faced
before by opening avenues to new business sectors, developing newtechnologies, and engaging in other such efforts. Whether accepting
diverse values or being willing to engage in collaborations withcompanies in other industries when necessary, the C.I. TAKIRON Group
has to efficiently take advantage of all internal and external strengths.
The clear advancement of a digital transformation and carbon
neutral initiatives are essential as the C.I. TAKIRON Group. We havebegun building a system to formulate a strategic trajectory by setting
up a special department that goes beyond simple technological orpractical implementation to transform business models.
The restructuring of Group management is a priority theme. Investors
have indicated the importance of consolidated financial results inmodern corporate management. I believe the C.I. TAKIRON Groupwill be unable to respond to the changes coming in society without
unifying all of our strengths. The first step to strengthening Groupmanagement is establishing a resilient management foundation. I
know human resources are key to our Group management foundation.
As a Group advocating the Management Commitment on Enriching
Lives as management policy, we are working to put in place work-styleprograms and build an even better working environment to improve
the lives of employees.

Priority measures

1

2

3

4

5

6

Solve
social issues

Acquire new
businesses,
products, andtechnologies

Accelerateborderlessness

Adopt digitaltechnology

Restructure
group
management

Further
improve ourmanagementbase

2 sources of growth

2 newly established support systems

1 Investment budget set at ¥33 billion

1 Specialized digital strategy team

2 Total R&D budget set to at least 2% of net sales

2 management committee

Medium-term management plan and materiality

C.I. TAKIRON Group Integrated Report 2021

15

Top Message

To Enhance Sustainability
Why sustainability now?
The C.I. TAKIRON Group formulated the Supporting Today, Change
Tomorrow Group Sustainability Vision in September 2021 as theguiding principle to its sustainability activities.
Now is the time for us to revise the Group Corporate Philosophy andtake action with the goal of fostering subsequent growth according to
the new long-term vision and medium-term management plan. That is
why I believe this is also a time to review our approach to sustainability
which has stood for a company committed to solving social issues andthe reason the Sustainability Vision has been positioned as our top
priority.
Our belief that long-term and sustainable growth of C.I. TAKIRON
connects directly to sustainability for society at large is the core principleof the Sustainability Vision. I am certain contributions to the realizationof a sustainable society through business founded in our corporate
mission are the essential quality of Group sustainability activities. Whilealways staying true to this vision, we will support the lifestyle of people
ever day to bring an even higher level of comfort to the lifestyles oftomorrow with the aim to continue building a people- and earthfriendly future. Looking back, I feel the corporate message which theGroup has used for so long already has exemplified our passion aboutsustainability.
This is also true of each and every one of our sustainability activities.
Almost all of the initiatives that we have undertaken and promoted
thus far can be seen as sustainability activities. The promotion of ESG
management that I touch on later is at the core of all of this. Onevery distinct example is our work-style reform initiatives founded in theManagement Commitment on Enriching Lives launched in fiscal 2018.
I think the efforts founded in this declaration over the last three
years have achieved great success and almost put in place a system togive employees an even enriching life. In the future, we need to raise
employee awareness about the various programs and step up measureseven further so that each employee can take full advantage of eachprogram based on their own life plan. C.I. TAKIRON launched The
Management Commitment on Enriching Lives Committee under mydirect supervision as President in fiscal 2020 to more efficiently cultivate
employee awareness and plan to expand activities even closer to thelives of every employee.
The particular points of emphasis in our sustainability activities are
the respect for human rights and diversity throughout the entire value
chain. Henceforth, C.I. TAKIRON requires a system that can expand therange of initiatives from the Group throughout the value chain andstrictly monitor progress at all times. We must also expand our viewto the issue of conflict minerals by taking into account the minerals
used as raw materials by the C.I. TAKIRON Group. Accordingly, weneed to make greater considerations about human rights during
procurement and strengthen diversity. Further reviews of suppliers
from the perspective of CSR procurement in fiscal 2020 and the CSR
Procurement Policy in line with human rights and diversity create a new
system to achieve this. In the future, we will take initiative to create a
new organization dedicated to sustainability and the development of
human resources in addition to our work to make active sustainability
investments.

16

C.I. TAKIRON Group Integrated Report 2021

Practice and Sophistication of ESG
Management
The most pressing social issues before us has been overcoming the
spread of the novel COVID-19 infection worldwide since the pandemic
began, but humanity must tackle the average temperature clearly risingon a global scale as well as the risks of climate change thought to becausing more frequent severe weather conditions in recent years.
We have set various goals, including our target to reduce CO2
emissions from our businesses 30% compared to fiscal 2018 by fiscal
2030, as specific initiatives to do our part to help solve the climatechange issue. We aim to acquire the Science Based Targets certification
for the new reduction target during 2022 as a means to certify both
inside and outside of the company the feasibility of these science-basedtargets.
In May 2021, C.I. TAKIRON also became a TCFD supporter
committed to proper financial disclosure. We will conduct mediumto long-term scenario analyses in the future while referring to the
IEA scenarios advocated by the TCFD to identify our climate changerisks and opportunities and strengthen corporate governance as anorganization.
We will also promote CO2 emission reductions as much as
possible by defining specific measure to accomplish our targets andstrengthening various energy-saving efforts in the short-term focusing
on manufacturing plants. In the long term, C.I. TAKIRON will focus
on decarbonization. The Group will not only install solar panels but
also gradually transition to procurement power derived from renewableenergy sources. In addition, I believe building an efficient recycling
loop is an important measure because we can reduce CO2 emissions
produced during the waste disposal process by recycling things that are
currently disposed of as waste.
To further CO2 emission reductions in accordance with the SBT
certification and as a TCFD supporter, the C.I. TAKIRON Group
must pay careful attention to not only its own CO2 reductions anddecarbonization trends but also those throughout the entire value
chain. The Group has focused on environment-friendly businessactivities so far, but our procurement activities will now accelerate
the procurement of raw materials with an even lower environmental
impact using the CSR Procurement Policy launched in fiscal 2020 as alaunching point.
Shifting our attention back to Japan, the Tokyo Stock Exchange
will restructure its market segments in April 2022. This restructuring
plans to reorganize companies currently listed in the First Section of
the Tokyo Stock Exchange mainly into the Prime market and Standard
Market. The Prime Market is oriented to companies which center theirbusiness on constructive dialogue with global investors and keep ahigher quality of corporate governance.
I believe C.I. TAKIRON must remain listed in the Prime Market toenhance sustainable corporate value, and we have even begun tostrengthen corporate governance according to the standards forcompanies listed in the Prime Market. This work does not just simply
adopt all of the provisions in the corporate governance code but
rather intends to make substantive enhancements to our corporate
governance. We will strive to build a corporate governance systemappropriate for the C.I. TAKIRON Group while incorporating Japan’s
Corporate Governance Code.

To All of Our Stakeholders
In August 2021, C.I. TAKIRON established a new GovernanceCommittee with Outside Directors acting as core committee members.
The Committee will spearhead initiatives to tackle priority governanceissues in the future.

Sustainability Advertising
The C.I. TAKIRON Group has not really had the opportunity tobroadly publicize its sustainability initiatives, which is a consequenceof being a corporate conglomerate focused mainly on B-to-B business.
Therefore, we have started "Question from Earth" and "Mission to
Provide Solutions Through Materials" corporate advertising campaign
for the purpose of raising awareness about our sustainability initiatives
in fiscal 2020 and generating appeal for products that help solve social
issues. In the future, C.I. TAKIRON will continue to use this advertising
as a venue to actively publicize its sustainability initiatives from a wide
range of standpoints.

C.I. TAKIRON is revising its Group Corporate Philosophy committed
to a continued evolution from the previous medium-term management
plan to the current medium-term management plan while integrating
the ideas of all of our employees. I believe the C.I. TAKIRON Group hasentered a new stage aiming to elevate itself with renewed conviction
to not only heighten our presence in business but also in the areas ofsustainability and ESG.
The diversification of values and rapid changes coming to society
will surely happen at an even faster pace. The C.I. TAKIRON Groupwill contribute to the realization of a sustainable society as a corporate
conglomerate committed to solving social issues while continually
evolving itself.
I would like to thank all of our stakeholders for their continued
support. I would also like to ask for candid feedback as well as supportof our sustainability initiatives.

C.I. TAKIRON Group Integrated Report 2021

17

Vision and Strategies

1

F Y2021-FY2023 Medium-termManagement Plan
(Commit to Transformation: CX2023)

18

C.I. TAKIRON Group2

Sustainability Vision3

Materiality

Integrated Report 2021

1

FY2021-FY2023 Medium-term CommittoTransformation:（ CX2023 ）Management Plan
We gave the Medium-term Management Plan launched in 2021 the title Commit to Transformation 2023
(CX2023). “Transform” is our keyword for enhancing corporate value.
This plan align focus for all group officers and employees of the C.I. TAKIRON Group and shares where we want tobe 10 years from now as a medium- to long-term goal. We have divided and backcast our ideal form in ten years into
three phases. The first three-year phase is the Commit to Transformation: CX2023 Medium-term Management Plan.

CX2023 Toward Achieving the 2030 Vision

C.I. TAKIRON
2030 Vision
FY2027

Phase 3
FY2024Phase 2

Provide value tosociety throughcontinuous
creative evolution

FY2021

Phase 1

Commit toTransformation:
CX2023Firmly establish thespirit of continuous
creative evolution in
our corporate culture

To become a corporate groupthat delivers peace of mind andcomfort to the future of ourplanet through creative evolution.
FY2030: Long-term Targets

Boost corporate value
Quantitative Targets

Backcast

Net Sales¥200 billion

Operating Profit¥20 billion

Operating Profit Margin

10%

Backcast

Initiate transformation
toward creative
evolution
FY2021 to FY2023

CX2023 Quantitative Targets
Net Sales¥157 billion

Net Sales¥134.4 billion

Operating
Profit¥11

billionOperating
ProfitConsolidated
Net Profit¥8.5

billion¥7.5

billionConsolidated
Net Profit¥5.3

billionFY2020Results

FY2023
Plan

Operating Profit Margin 6.3%
ROE
6.4%
ROA
3.7%

Operating Profit Margin 7.0%
ROE
7.9%
ROA
4.8%

C.I. TAKIRON Group Integrated Report 2021

19

1

FY2021-FY2023 Medium-term Management Plan (Commit to Transformation: CX2023)

Six priority measures
We have set six priority measures as specific measures to achieve the medium-term management plan. The C.I. TAKIRON Group promotes greateraction in ESG management and materiality. We are very aware of building a sustainable society and have made solve social issues our first priority
action. Our second priority action will address the ongoing challenge to create new business and develop new products, which were the main reasons
C.I. TAKIRON was unable to accomplish the previous medium-term management plan. We will also place emphasis on the introduction of adopt digitaltechnology by recognizing the potential brought by the advent of a new normal after the COVID-19 to promote a digital transformation.

Priority measures

1

Solve social issues

We will contribute to solving specific social
issues by being conscious of social sustainability and steadily implementing businessactivities and materiality based on theSDGs.
FY2023 Targets
Number of environmentally friendly
product development themes>>> 15 per year

2

Acquire new
businesses, products,
and technologies

With an eye on future changes and demands, we will take on the challenge ofcreating new businesses, products, andtechnologies that will lead the next generation.
FY2023 Targets
Sales from new business areas>>> ¥6 billion or more

CO2 emissions reduction rate(compared to FY2018)>>> 13% reduction

New product sales composition(non-consolidated)>>> 20% or more

Number of waterside clean aid activity
participants (annual total after 3 years)>>> Over 1,000 people

Number of new technologies created(number of patent filings)>>> At least 50 applications/year3

Accelerateborderlessness

We will enhance corporate value and pursue
business growth from a “borderless” perspective, including global expansion of sales
and production bases, marketing based on
new value standards, and achieving diversity(gender, race, nationality, religion, and age)in the organization and corporate culture.
FY2023 Targets
Overseas sales composition>>> 20% or more
Ratio of women in leadership positions*1(as of April 1, 2024)>>> 5% or more
Ratio of female employees incareer-track positions(as of April 1, 2024)>>> 20% or more

4

Adopt digitaltechnology

We will explore the use of cutting-edge
technology in all business processes topursue results such as improved work efficiency, labor savings, and cost reductions.
We will promote the use of digital technology to create new added value in our sales
activities and create a new business model.
FY2023 Targets
Digital maturity score*2>>> 2.5 or higher

5

Restructure groupmanagement

We will create value as a consolidated entity by maximizing the efficiency of complex
business collaboration and investment.
FY2023 Targets
Consolidated operating profit margin>>> 7%
Businesses/companies running at aloss*3>>> Zero

6

Further improve ourmanagement baseWe will further improve our program design with a focus on work-life balance andcarry out the commitments made in theManagement Commitment on Enriching
Lives for all employees. We will also strive
to create a safe and secure workplace by
re-evaluating our work environment anddaily communication to ensure no accidents and harassment takes place.
FY2023 Targets
Employee work engagement score*4>>> 3.0 or higher
Employee loyalty score*5>>> 3.0 or higher
Critical compliance violations*6>>> 0 violations*1	Leadership positions are career-track positions (including managerial positions) in the level of “performing duties while leading members of the organization in the tasks, objectives, and issues assigned”
or higher, as defined in the company's personnel system (grade system).
*2	The digital maturity score consists of five domains including Management Strategy, Personnel and Training, Processes, Solutions, and Governance, and the average of the total is used as our KPI (our scorein 2020 was 1.4).
*3	Excludes businesses and operating companies that have been newly established within the last five years and businesses and operating companies for which the Board of Directors has resolved to withdraw
from.
*4	Employee engagement score: A score on a scale of 1 to 4 based on the results of a questionnaire designed to measure employees' energy, enthusiasm, and level of immersion in their work.
*5	Employee loyalty score: A score on a scale of 1 to 4 based on the results of a survey designed to measure employees' satisfaction with the company and their expectations for the future.
*6	Number of violations that fall under our internal definition of a major compliance violation and that are disclosed externally in light of their social impact.

20

C.I. TAKIRON Group Integrated Report 2021

2 sources of growth and 2 newly established support systems
C.I. TAKIRON has defined 2 sources of growth and 2 newly established support systems as part of its six priority measures.
As sources of growth, we have set a goal to inject 33 billion yen in investments to the environment, new and global businesses, and the digitaltechnologies outlined in the first four priority measures. Furthermore, C.I. TAKIRON will secure sufficient research and development funds to encourage
new product development.
As support systems, we set up DX Strategy Promotion Department (as of October 1, 2021) to quickly formulate and draft digital strategies. In lightof our failure to achieve the previous medium-term management plan, we have also established a Medium-term management plan and materiality
management committee to plan and execute various measures, advance plans, and revise targets as necessary.

2 sources of growth

2 newly established support systems❶ Investment budget set at ¥33 billion❶ Specialized digital strategy team

Digital: ¥3 billion● Workstyle reform● Leverage leading
digital technologies =streamline operations(RPA implementation)● Paperless operations● Production process IoT
utilization

Early planning and organizational design of a future-oriented digitalstrategy that goes beyond existing values

Environment (solve social issues)
New business, Global: ¥30 billion● 3R (Reduce, Reuse, Recycle)● Renewable energy● Environment-friendly products● Decarbonization-related● M&A● Acquisition of new technologies● Overseas investment❷ Total R&D budget set toat least 2% of net sales
Shortendevelopment
lead times

Introduce
externaltechnologies

President

DX Strategy Promotion Department❷ Medium-term management plan and materiality
management committee
Tie-ups withtechnology
partners

Carry out planning, execution, and progress management of various
measures aimed at achieving the quantitative targets and KPIs of themedium-term management plan and materiality plan

Board of Directors
Management
Committee

Medium-term management
plan and materiality
management committee

Divisions inchargeIdeas Incorporated into the Commit to Transformation: CX2023 Medium-termManagement Plan

Toshio Tamaki
Managing Executive Officer
Chief Operating Officerof the Corporate Planning
Div. and Recycling Adaptive
Materials Promotion
Supervisor

Commit to Transformation: CX2023 came to fruition through an extensive discussion between executive officers
over 16 different review meetings throughout the year. C.I. TAKIRON also formed a Junior Board (simulated executive board meeting consisting of junior employees) convened by junior members at the front lines of each business and site from all of the divisions as well as the R&D Department. These junior employees open and candidly
debated the ideal form of the C.I. TAKIRON Group in the future. Management fully embodied those ideas in theformulation of the medium-term management plan. Our Outside Directors also provided advice on ideal corporate
governance and cultivating a corporate culture leading to innovation.
As outlined above, this completely new approach incorporated the strong commitment of the C.I. TAKIRONGroup to transform in the CX2023 medium-term management plan. Now, we will strive to realize the transformation of the C.I. TAKIRON Group through the clear execution of this medium-term management plan.

C.I. TAKIRON Group Integrated Report 2021

21

2

Sustainability Vision

C.I. TAKIRON Group Sustainability Vision
The C.I. TAKIRON Group formulated the Sustainability Vision as the core principle of the corporate message "Supporting Today, Changing Tomorrow."

Sustainability Philosophy
Framework
Sustainability VisionCorporate Philosophy

C.I.
TAKIRONGroup
Corporate
Philosophy

Supporting Today,
Changing Tomorrow

VisionSustainability
VisionC.I. TAKIRON
2030 Vision

The C.I. TAKIRON Group supports the lives of people today andalways works to build a better future for people and the environment

Actionwith the courage to change toward more prosperous, comfortable

Code of Conduct

lifestyles in tomorrow.

Specific Initiatives Centered on the Sustainability Vision
Our businesses will promote materiality and other sustainability activities to achieve the C.I. TAKIRONGroup Sustainability Vision.
Overall View of Specific Initiatives
Centered on the Sustainability Vision

Description of Specific Sustainability Initiatives (Conforming to GRI Standards)
High Priority Item

Overall sustainability
Communication

Materiality(Priority Issues)

Sustainability Activities

Economy(management foundation)
Governance (partial)*

Environment

SocialMedium Priority Item

GRI

Basic
General disclosure items
Management methods
Economic performance
Presence in local economy
Indirect economic impact
Procurement practices
Corruption prevention
Anticompetitive practices
Taxes
Raw materials
EnergyWater
Biodiversity
Atmospheric emissions
Waste
Environmental compliance
Environmental assessments of suppliers
Employment
Management-labor relations
Workplace Health and Safety
Diversity and equal opportunities
Nondiscrimination
Social assessments of suppliers
Social economic compliance

101
102
103
201
202
203
204
205
206
207
301
302
303
304
305
306
307
308
401
402
403
405
406
414
419
Items related to materiality

22

C.I. TAKIRON Group Integrated Report 2021

Outcome-oriented Sustainability Design
The C.I. TAKIRON Group has integrated the SDGs into its businesses based on the value provided to society (outcomes).

Safety and Security
Ideal Form of C.I. TAKIRON

Relevant Sustainable Development Goals (SDGs)

A corporate group always providing a stable supply ofsafe and trusted products and services to support today
by offering peace of mind to people in their daily life

Comfort and Peace of Mind
Ideal Form of C.I. TAKIRON

Relevant Sustainable Development Goals (SDGs)

A corporate group stepping up to the challenge ofcreating products and services that meet contemporaryneeds by using technologies and ideas to offer prosperity
and comfort to people in their daily lives tomorrow

Resilience
Ideal Form of C.I. TAKIRON

Relevant Sustainable Development Goals (SDGs)

Corporate group always transforming itself to flexibly
adapt to the various changes of the social environmentand circumstances

Environment
Ideal Form of C.I. TAKIRON

Relevant Sustainable Development Goals (SDGs)

A corporate group manufacturing products that take into
consideration the people, earth, and future while always
keeping the conservation of our planet in mind.

Sustainability Advertising
The C.I. TAKIRON Group advertises a strong message about its commitment to addressing (resolving) social issues faced
on a global scale through its products.

Striving to Overcome
Starvation Worldwide!

Striving to Decarbonize andCombat Climate Change

Striving to Overcome More
Frequent Flood Damage

Bringing Water and Hope for the Future.

Maximize Use of Natural Light toAchieve Low-carbon Construction

Material to Hold and Control Water
Essential to Flood Control Facilities[Highly Insulation Lighting Panel Material]
Lume Carbo Series[Water Sealing Material] Binon Hydrotite[High Stiffness Piping] Daipla Hawer Pipe

C.I. TAKIRON Group Integrated Report 2021

23

3

Materiality

Priority Issues
The C.I.TAKIRON Group identified ten material subjects (priority sustainability issues) to prioritize our efforts in fiscal 2019
based on changes in social issues, such as SDGs as well as environmental, social, and corporate governance (ESG) issues.
In fiscal 2020, we determined new KPI and fiscal targets with reference to the feedback from external experts and reflected
those goals into the new medium-term management plan, which began in fiscal 2021. In addition, C.I. TAKIRON launched theMedium-term Management Plan and Materiality Management Committee to review and manage the progress of materiality
items as a management body to achieve its materiality targets. Our Group uses its synergy to further accelerate each initiative
toward achieving our future fiscal targets in the pursuit of accomplishing every outcome.

Process to Define Materiality/Establishment of Management System
Identify andorganize potential
materiality items
that should beconsidered

Create amateriality matrix
by prioritizing
and weighting
each potential
materiality item

High

Importance to
Stakeholders

ExtremelyHigh

Materiality Matrix

Importance to the C.I.
TAKIRON Group

Extremely HighDefine themateriality througha management
review

Refine Materiality and establish
medium-term targets througha management review withmembers of supervising
departments separately foreach of the 10 Materiality items

Management Commitment on Enriching Lives
Strengthen human resource development
Eradicate occupational accidents
Promote diversity
Promote the active participation of womenPromote the active participation of disabled
persons, senior citizens and foreign employees
Advancement of polymer processing technology
Expand environment-friendly products
Handle marine plastic pollution
Reduce and recycle waste
Cultivate a corporate climate supporting
value creation
Enhance quality assurance systems
P rovide attractive and distinct (special) products
and services
Improve customer satisfaction
Strengthen trusting relationships with customers
Strengthen sales power (problem-solving capabilities)

Establish a management
committee and review andmanage the progress ofmateriality items through theMedium-term Management Planand Materiality Management
Committee that is established.

Reduce the environmental impact
Reduce the environmental impact throughout theentire value chain
Engage in comprehensive compliance and risk
management response
Promote CSR procurement
Enhance corporate governance
Combat climate change
Ensure disaster response and create a BusinessContinuity Plan (BCP)Disseminate information and engage in a dialogue
with stakeholders
Implement chemical substance management andregulatory compliance (RoHS, etc.)
Ensure harmony with local communities
Promote social contribution activities
Expand use of renewable energy
Pursue globalization
Forge academic-industrial alliances and provide
academic support

10 Materiality Items DefinedManagement Committee
Committee Chairperson
Representative Director President
Vice Committee Chairperson 	Chief Operating Officer of the
Corporate Planning Div.
Secretariat
Corporate Planning Dept.

Board of Directors
Management
Committee● The Medium-term Management Plan and Materiality Management Com-mittee provides a report on the details of its deliberations to the Board of
Directors (twice per year)● Items overseen by the Medium-term Management Plan and Materiality
Management Committee:
1. Examine outcomes of measures executed in previous medium-term
management plans
2. Promote measures to achieve the quantitative targets and KPI in new
medium-term management plans and materiality
3. Plan and execute each materiality measure, manage the progress, andassess the targets and KPI

24

C.I. TAKIRON Group Integrated Report 2021

Each
Division

Medium-termManagement Planand Materiality
Management
Committee

Subcommittee

Committee
MeetingMedium-term Plan for Materiality
Source of Corporate GrowthCategory

Materiality Subject

1
2

Cultivate a
Corporate
ClimateSupporting
Value Creation
Advancementof Polymer
Processing
Technology

Evaluation Standards (KPI)● N
 umber of Challenge Promotion

Measures Implemented During the Period● Survey-based Evaluation of the Extent

the Corporate Culture Where Employees
Take on Challenges has Permeated*1● New Product Net Sales Ratio (%) *1● Number of New Technologies Created(Number of Patent Filings)

Responsibility to Society

Respect of Individuality● Rate of Participation In In-house Training

3

PromoteDiversity*2

4Management
Commitment
on Enriching
Lives*3

5

Handle Marine
Plastic Pollution

6

CSR
Procurement

Classes Related to Diversity & Inclusion● Level of Understanding Regarding
Diversity & Inclusion Identified ThroughSurveys Conducted After Training● Ratio of Women in Leadership Positions● Ratio of Female Employees in Careertrack Positions● Ratio of Employees Who Return To Work
After Leave● Employee Work Engagement Score● Employee Loyalty Score● Recognition Status as an Excellent
Corporation for Health Management● Number of Waterside Clean Aid Activity
Participants (Total number of participants
for the period)● Number of Marine Plastic Related Eventsand Seminars Held (Total number ofseminars and events held for the period)● Request Rate for CSR Procurement Policy
by Important Domestic Business Partners(% of purchase base)● Request Rate for CSR Procurement Policy
by Important Domestic Business Partners
in Overseas Group Companies (% ofpurchase base)● Level of Agreement with CSR

Procurement Policy (Based on business
partner survey)

Reduce the7 Environmental
Impact● CO2 Emissions Reduction Rate(compared to FY2018)● Environment-friendly Products(Number of development themes)

8

ExpandEnvironmentfriendly
Products

9Comprehensive
Complianceand RiskManagement● Environment Related Awards

Management Platform● C
 ompliance Related Enlightenment and

Education Implementation (% of companies)● Number of Critical Compliance Violations● Rate of Completion of Response toImportant Risk Issues Within Period (%)

Enhance34Disclosure in
FY2022Disclosure in
FY2022

15%

20%

35

50

100%

100%

40%

60%

ー

5%

ー

20%

75%

80%

ー
ー

At least 3.0
At least 3.0

Continued

Continued

300

1,000

30

30

100％

ー

100％

ー

Level ofAgreement:
100%

8% reduction

13% reduction

10

15

ー

Aim toreceive anenvironment
related award
by FY2025

100%

100%

0

0

80% or above

80% or above● Board of Directors Attendance Rate

85% or above
Gathering data
for formulation ofguidelines in FY2022● Number of Times

Explanatory Meetings
Were Held for
Shareholders/Investors

Financial Results
Briefings
Meetings with
Individuals
Small-sized
Meetings

Relevant
Page
―

P.34

P.44

P.42

P.51
Implementation ofBusiness Partner Survey(Grasping the current
level of business
partner agreementwith CSR guidelines)

At least once a year

Guidelines

Relevant Sustainable
Development Goals (SDGs)

P.53● Regular Important Risk Reviews● Formulation of Corporate Governance

10 Corporate
GovernanceMedium-term Roadmap
2021
2023

P.26
to
P.35

P.58

At least oncea year
85% or aboveー2

2

At least three times
a yearAt least threetimes a year
At least oncea year

ー

P.38

P.54

P.48

*1 T he survey-based evaluation of the extent the corporate culture where employees take on challenges has permeated and new product net sales ratio (%) are two item figures updated in the mediumterm roadmap.
*2 R atio of new female graduate employees (main career track), ratio of female employees in management positions, and employment ratio of persons with disabilities have been removed while the ratioof women in leadership roles and the ratio of women in general roles have been added.
*3 T hree employee survey results items (ratio of employees who feel that there is a workplace environment and systems established that make it easy to work/ratio of employees who answered that theywork actively, and the level of system understanding) have been removed while the employee work engagement score and employee loyalty score have been added.
C.I. TAKIRON Group Integrated Report 2021

25

Business Strategy

Construction Materials Division
Long-term Vision and Growth Strategies
The Construction Materials Division provides construction materials
to customers to help build comfortable living and urban spaces around
all of us. This division strives to undertake new themes from environment-friendly products to those responding to disasters founded ingreater safety and peace of mind. The integration of market in and product out is advocated as a way to accomplish these types of products. The
Construction Materials Division will not only improve technologies tosave energy, recycle, and introduce raw bio-based materials into production but also promptly adapt to customer needs in the market in order tosupport rapidly advancing SDG trends.
We will also expand overseas development of interior products evenfurther centered upon production sites not only in Japan but also in Europe to establish business models adapting to environmental issues froma global perspective.

Akihiro Ueda
Director Senior Managing
Executive Officer
Chief Operating Officer of theConstruction Materials Div.

Business Review
Business Description

Market Environment

The Housing Materials Business handles rain gutters, drainage, andother water processing products essential to housing construction as
well as construction materials widely used in housing and non-residential
properties for natural light, such as the Lume Wall high heat insulatinghoneycomb structured polycarbonate panels that contribute to a decarbonized society.
In the Flooring and Decorative Materials Business, we provide flooringmaterials offering excellent slip-resistant function for aquatic facilities, safety in apartment corridors, safety on stairs, etc., and beautifully designed
decorative films that make room interiors and buildings look attractive.

The Housing Materials Business is facing a surge in raw material
prices and logistics costs recently due to a decrease in new housing
construction as the population declines in Japan and concerns aboutlife after the COVID-19 pandemic and the impact of a lumber shortage.
Reducing costs and product price pass-through also makes improving
profitability a pressing issue. At the same time, there is demand forenvironment-friendly products, such as those with measures toward
decarbonization and climate change.
The Flooring and Decorative Materials Business has seen ever higher
requirements for not only beauty but also long-lasting flooring in bothhousing complex renovation and new construction markets. Proposals
for decorative materials which match new needs are also expected to
grow in order to adapt spaces to the changing living environment ofpeople since the COVID-19 pandemic.

Initiative Results for FY2020

Main Business Strengths
The main strengths of the Construction Materials Division are thediverse technology and development capabilities for polycarbonate
plastic and vinyl chloride plastic products.

The Housing Materials Business will continue to optimize Group production systems for polycarbonate products while enhancing productproposals and sales efficiency. C.I. Takiron Plus Co., Ltd. established in
April 2021 integrates systems for the distribution of construction materials and sales to hardware stores for the purpose of strengthening
market competitiveness.
The Flooring and Decorative Materials Business strove to develop
new versions of conventional Belbien fireproof decorative films withadhesive for indoor applications and NeoClean slip-resistant vinyl
flooring sheets with anti-bacteria and anti-virus performance, which
released in April 2021.

Strengths(Unit: Millions of Yen)

● Polycarbonate fabrication technology● Number one in Japan for our polycarbonate building material manu-

facturing capabilities● Polycarbonate building materials and slip-resistant vinyl flooring which

possesses a top market share● Comprehensive development capabilities offering functionality toconstruction materials● Global expansion through overseas production sites (BLX)26

C.I. TAKIRON Group Integrated Report 2021

FY2019 Results

FY2020 Results

Compared to FY2019

Net Sales

46,31042,147

Down 9.0%

Operating
Profit

3,338

2,069

Down 38.0%

Areas of Emphasis in the New Medium-term Management Plan
The Housing Materials Business maximizes existing business by increasing the share of key products while enhancing competitiveness throughstronger Group management and the introduction of digital technologies. As an initiative to address decarbonization, the Housing Materials Business is also further strengthening design proposals and productdevelopment of Lume Wall high heat insulating honeycomb structured
polycarbonate panels and other environment-friendly products.
The Flooring and Decorative Materials Business pursues de facto
standards embodying safety and security as basic concepts while fully
distinguishing itself in the overall condominium market. In addition,
this business sector is realizing an accelerated transition to businessbeyond borders through an overseas shift and stronger overseas basesin Europe, North America, and China.
The Flooring and Decorative Materials Business has defined and will
fully take action on its challenge to enhance upstream and downstream

added value and maximize earnings in existing ventures as a main
theme followed by the challenge to integrate product out and market
in as a common secondary theme.

Product Out

Market In

Spearhead Innovation
Capitalizing on
Technological Capabilities
in Plastic Molding andProcessing Technologies

Collect Accurate
Information Leveraging
Sales Channels and Exhibit
Rapid Product Development Capabilities

Provide Services and Products Satisfying Latent Customer Needs

Contributions to Solve Social Issues through Business
The Flooring and Decorative Materials Business will bolster environment-friendly, lower carbon products which help reduce the effects of natural disasters, suchas those with measures toward decarbonization and climate change.

Contribution (1) Development of a DecarbonizedSociety
Lume Wall high heat insulating honeycomb structured polycarbonate panels
take advantage of unique resin properties and proprietary Group processing
technologies to mitigate heat loss from openings while letting in natural light.
Lume Wall also realizes low-carbon construction which effectively limits the energy burden of lights and ventilation and contributes to measures to combat
global warming as well as the establishment of a decarbonized society.

Example of Neo Clean Flooring Installation

Contribution (2) Anti-bacteria/Anti-virus
Belbien fireproof decorative films with adhesive provide an interior material
with superior design versatile enough for both retail shops and offices, durability, and water resistance. Neo Clean offers slip-resistant vinyl flooring sheets to
use in restrooms and indoor spaces to repel dirt and make cleaning easy. Both ofthese unique products deliver hygienic spaces thanks to new anti-bacteria andanti-virus performance.

Contribution (3) Recycling

Example of BONLEX Installation

Bonlex Europe S.r.l., a C.I. TAKIRON manufacturing Group company in Italy, developed BONLEX decorative resin laminate sheets for interior applications
with PET laminated sheets using recycled raw material to achieve the provisionof a sustainable product. BONLEX gradually expanded its supply coverage inEurope before continuing to expand into other regions.

Contribution (4) Flood Protection
Flood Safe Light detachable waterproofing panels take advantage of light,
high-rigidity polycarbonate plastic panels to offer excellent workability and cutoff performance and protect assets from flood damage due to more frequent
guerrilla rainstorms, typhoons and other disasters.
Example of Flood Safe Light

C.I. TAKIRON Group Integrated Report 2021

27

Business Strategy

Environmental Materials Division
Long-term Vision and Growth Strategies
The Environmental Materials Business handles agricultural and civil engineering materials which capitalize on strengths from a high industry share and brandpower to customer support up through installation. This sector is advancing its
transformation into a business with sustainable growth even in mature domestic markets, such as maintenance, renovations, and recycling. Even overseas, theEnvironmental Materials Business is furthering its expansion through productdevelopment tailored to local markets. The Environmental Materials Business
Division fulfills a particularly large role as a Group company through the value
it provides as it continues to strengthen links with Group companies to cover
everything from manufacturing to sales and installation, while expanding thevalue chain through product development, sales power and other comprehensive consolidated Group capabilities.
Moreover, the product planning and development will focus on high quality,
high functionality, safety and peace of mind as well as environmental considerations with the aim of fostering business growth by always responding to customer needs.

Takahisa Miyake
Director Senior Managing
Executive Officer
Chief Operating Officer of theEnvironmental Materials Div.

Business Review
Business Description

Market Environment

The Environmental Materials Division consists of the Agricultural
Materials Business, which proposes the optimal environment for agriculture, and the Infrastructure Material Business, which supports the
improvement of safe and secure social environment.
The Agricultural Materials Business contributes to agricultural development by expanding a product lineup centered on high-performance
agricultural films that are able to realize the optimal environments togrow vegetables and fruit satisfying customer needs. The Infrastructure
Material Business supports social infrastructure by developing waterproof/impermeable sheets, high-density polyethylene pipes, and otherrelated materials increasing the lifespan and emergency readiness of facilities through redevelopment and renovations of social infrastructure.

In the agricultural market, we predict that the scale of producers will
increase, added value will be provided by crops, and trends will aim toincrease yield of agricultural goods and improve productivity. In the civilengineering market, on the other hand, we predict the needs for the
renewal and maintenance of freeways, tunnels, sewage systems andother such infrastructure to increase.
Medium- to long-term growth is also expected in both markets ofdeveloping nations, including ASEAN countries.

Main Business Strengths
The strengths of the Infrastructure Material Business are the Groupwide collaboration system which achieves a total value in one place foreach process from development and production to sales and installation aligned with market needs.

Initiative Results for FY2020
The Agricultural Materials Business did have a last-minute surge indemand before price revisions for some greenhouse materials at theend of the year. However, this did not reach a full recovery in demand
overall due to the impact of various factors from a reaction to winddamage demand at the end of the last fiscal year, producers limitingpurchases in response to the COVID-19 pandemic, and delays andextensions in business properties, which decreased incomes for both
agriculture films and greenhouse materials. Operating profit was supported by a decline in costs driven by work-style reforms reducing thenumber of in-person sales, meetings and events due to the spread of
the COVID-19 infection.
The Infrastructure Material Business saw a slight drop in earnings
due to the ongoing impact of construction delays resulting from the
COVID-19 pandemic and heavy snowfall.
Operating profit increased thanks to a favorable trend in sales ofHowell piping to large properties in addition to steady growth in demand for disaster reconstruction and piping renewals.

Strengths(Unit: Millions of Yen)

● Industry share and brand strength

FY2020 Results

Compared to FY2019● Production technology capabilities

Net Sales

55,63954,930

Down 1.3%● Sales system and customer support capabilities

Operating
Profit

1,381

2,329

Up 68.7%● Support capabilities from manufacturing and sales to the design,

processing, and construction stages

28

FY2019 Results

C.I. TAKIRON Group Integrated Report 2021

Areas of Emphasis in the New Medium-term Management Plan
The Agricultural Materials Business aims to expand its business sector
through stronger collaboration with each Group company as well as greater
sales power with the goal of enhancing its adaptability to producer needs,
from those who are scaling up operations to needs for higher added value ofcorps, higher yield, and better productivity. The division is also promoting commercialization of smart agriculture for facility horticulture including high-quality films and greenhouses. C.I. TAKIRON will continue to increase its presence
and expand the market for high-performance agricultural films backed by
Japanese quality in East Asia where medium- to long-term growth is expected.
The Infrastructure Material Business foresees growing needs for the
renewal and maintenance of freeways, tunnels, sewage systems, andother such infrastructure.
In particular, preparedness and recovery from natural disasters in recent
years due to climate change have become pressing social issues. This division
will continue to focus on disaster recovery and prevention as well as pollution
control as its top priorities while strengthening business even in infrastructure renewal fields as well as projects related to the Linear Chuo Shinkansen.

As common themes in both businesses, the challenges in new technologies, products and business development will pursue not only
functionality advocating a transition from goods to services but also
business models that increase the extensiveness and satisfaction of services realized through goods.

追求します。
●Commoditization●PricecompetitivenessSolving social issues ◎Diversification and

Product

Services(Introduction of
Digital Technologies)

Goods

Competitive Advantages◎Increase of Profitability

Transformationof Business
Model

Pursuit of extensive and satisfying services realized through goods.

Contributions to Solve Social Issues through BusinessContribution (1) Plastic Resource Recycling
Approaches to plastic resource recycling are coming under even greater scrutiny
worldwide with the SDGs, approval of the Ocean Plastics Charter, and the formulation of the Plastics Material Cycle Strategy. In this business climate, the C.I.
TAKIRON Group manufactures and sells plastic products from agricultural greenhouses to tunnel covering materials, multi-purpose products, and silage wrapper
as essential materials for agricultural production. Therefore, we address these various challenges with the aim of building a complete recycling system for post-use
agricultural films as well as promote the development, use, and standardizationof materials leveraging biodegradable plastics as a member of the Japan Association to Promote Recycling of Agricultural Film and the Association of Biodegradable-Plastics for Agriculture.

Change in Agricultural Waste Plastic Emissions
and the Recycling Rate
Recycling Rate (%)

Emissions (Thousand Tons)
200

80

150

60

100

40

50

20

0

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2012 2014 2016 2018 (FY)PVC Films

PO Films

Other Plastics

0

Recycling Rate

Contribution (2) Disaster Prevention Measures
Warming of the earth due to climate change is a major factor causing abnormal
weather, such as higher air temperatures, rainfall and rising ocean surface levels.
Regions throughout Japan have also been severely damage by these unusual conditions. As main measures to solve these problems, our Group helps to strengthen
preparations for new anti-flood ponds, dam renewals, and other storage facilities
in addition to drainage facilities to collect rainfall, and embankments as well as
reinforcement businesses while also actively striving to build processing facilities
for the waste generated in disasters.

Measure to Prevent River Channel Blockage River Bulkhead (Sheet)Contribution (3) Measures to Deal with Aging
Infrastructures
Most of the roads, bridges, tunnels, water and sewage systems, public utilities
and other social capital stock were built in the 1960s and 1970s during the periodof high economic growth. After more than 50 years since construction, almost allof this infrastructure needs maintenance and renewal in one fell swoop. This aged
infrastructure is either no longer used due to disasters or has resulted in accidents.
Japan fears a growing number of these types of incidents in the future.
In response to these challenges, our Group promotes the redevelopment offacilities and the renewal of sewage pipes with emphasis on water and sewage
systems.

Sewage Pipe Before Renewal

Sewage Pipe After Renewal

Filtration and Hypochlorous Storage Tank Filtration and Inclined Plate Settler

C.I. TAKIRON Group Integrated Report 2021

29

Business Strategy

High Functional Materials Division
Long-term Vision and Growth Strategies
The High Functional Materials Division utilizes its unique technologies
and access to a broad range of industries as a foundation for growthwith a product lineup that includes plastic plates, materials for electronic
components, machining materials, nanomaterials, and materials for eyewear. In addition, this division is building strategies for new future technologies and new business sectors by assessing the level of safety andcomfort it can deliver in the future as described in the long-term vision
for the entire Group while evaluating whether or not it can continuallyearn the profit necessary to deliver that safety and comfort as criteria todetermine value. In particular, material technologies indispensable to abroad range of industries related to semiconductors are always being refined to ensure the proper supply according to market needs while also
integrating ever-accelerating environmental measures into existing andnew businesses from a long-term perspective.

Takashi Yamasaki
Executive Officer
Chief Operating Officer of theHigh Functional Materials Div.

Business Review
Business Description

Market Environment

The High Functional Materials Business Division is made up of the
Plate Business that mainly handles PVC, PC, PET and other universal andhighly functional plastic plates, the Motor Business that handles micro
motors, and Group companies that handle fine particles, engineering
plastics, and acetate. Our distinct products are expanding worldwide
by adding various types of functionality in addition to improving basic
functionality. We provide products in a wide range of fields, from thosethat support industrial infrastructure, including semiconductor manufacturing equipment, to those that enrich our lives.

The semiconductor and flat panel display market consisting of the
primary customers for products handled by the High Functional Materials Business Division has seen an increase in the demand for IT devices
due to the advancement of telework and a capacity increase in data
centers. Due to these factors, we expect the market to become evenmore active in the future. Moreover, this market is forecast to show adramatic increase in demand for nanomaterials. As industry at large
pursues higher precision and greater power savings, the small motor
market will also expand even more.

Initiative Results for FY2020

Main Business Strengths
The strengths of the High Functional Materials Business Division are
its quality and technology capabilities as a manufacturer with a top
market share.

Strengths

The Plate Business anticipated a sudden recovery of capital investments in semiconductors and rapidly increased production, especially for its primary industrial plate products, by reinforcing production
equipment, enhancing production efficiency through shift changes andother such measures. The recovery in demand for industrial plates starting at the second half of the fiscal year exceeded initial expectations
and has continued to stay strong, especially for PET plates and splash
prevention panels. Aiming to increase the added value of its products,
the Motor Business broadened its lineup of gear heads and advanced
the development of motors with encoders. Nanomaterials acted as thedriving force cultivating the high demand in telecommunication anddata center equipment. On the other hand, polycarbonate sheets for
optical applications, machining materials, and materials for eyeglass
frames did see some signs of recovery but subsequently had a decline
in earnings due to the impact of the COVID-19 pandemic. Operating
profit did increase thanks to growing demand primarily for industrial
plates. The High Functional Materials Business Division withdrew from
unprofitable businesses and consolidated unprofitable products, deciding to concentrate management resources on highly profitable businesses from a perspective of a medium-term business strategy.

● Technological capabilities accumulated from a long history in the(Unit: Millions of Yen)

industry● Extensive lineup of highly functional products satisfying customer

needs● A robust sales network● High quality and brand strength30

C.I. TAKIRON Group Integrated Report 2021

FY2019 Results

FY2020 Results

Compared to FY2019

Net Sales

17,267

17,478Up 1.2%

Operating
Profit

1,313

1,803

Up 37.3%

Areas of Emphasis in the New Medium-term Management Plan
The Plate Business is progressing with facility renovations and theadoption of new equipment in an effort to develop new technologies
aiming to effectively use and bolster operations at new facilities whichbegan operation this fiscal year to respond to the growing demand atsemiconductor manufacturing sites propelled by increased demand forsemiconductors worldwide. This business will also expand its overseas
sales network. Simultaneous, efforts will also promote product development aiming to use environment-friendly plastics and the configuration of an environmental adaptation scheme. The Motor Business willfurther the development of not only motors but also other productswith added functionality to expand use of motors and other products
to new applications.
TAKIRON POLYMER and CIK NANOTEK will also strengthen theirtechnologies and optimize equipment to respond to the growing demand related to semiconductors.

In addition, TAKIRON ROWLAND will accelerate the penetration of
the TAKIRON brand overseas to promote even greater global expansion.

Contributing to advancement of fields through PVC plates
used for semiconductor manufacturing equipment

Contributions to Solve Social Issues through Business
The High Functional Materials Business Division is always aware of the sustainability of society in the products adored by its customers and in new productdevelopment in light of greater interest in environmental conservation activities
worldwide. This division promotes business activities which work to realize a
recycling-oriented society and carbon neutrality in the future.

Contribution (1) Realization of Decarbonization anda Recycling-oriented Society
The High Functional Materials Business Division will kick off the Eco Plastics
Project this term while investigating and examining targets for proposals of business processes recognizing environment-friendly product plans and sustainability which no longer rely on conventional business sectors.

Bioplastic PET

Contribution (2) Development of Environmentfriendly Products
The High Functional Materials Business Division will consider ways to effectively use bioplastics and recycled plastics from product development throughthe planning phases, such as the use of bioplastic PET as some of the raw material for ethanol produced using the pomace from sugarcane. We are also working to improve the durability of rigid vinyl chloride sheets derived from natural
resource of salt which makes up about 57% of its composition. Going forward,
we will research structure that consider post use recyclability during the productdesign stage to promote environment-friendly product development for the entire product cycle from raw material through use.

Contribution (3) Reduction of CO2 Emissions

TAKIRON POLYMER Solar Panels

Each production site promotes automation of production processes and implements energy-saving measures by selecting equipment satisfying Top RunnerTarget Product Standards when updating facilities. TAKIRON POLYMER has set
up a system to generate power through solar panels and promotes even more
highly efficient production aiming to reduce CO2 emissions.

C.I. TAKIRON Group Integrated Report 2021

31

Business Strategy

Specialty Films Division
Long-term Vision and Growth Strategies
As environmental issues come under even closer scrutiny today, thisdivision sees an urgent need for product development that tackles theseenvironmental problems in packaging. The acceleration of this productdevelopment and introduction to the market will support ESG. The SANZIP Business in particular is undertaking Shanghai + one strategies in
Asia to create a borderless business. To further reform these businesses
though, the introduction of digital technologies is unavoidable. Alignedwith the Renovation & Innovation project, this division will encourage
greater automation and labor savings to build a robust business by improving productivity. The challenges which need to be overcome arebroad, but the High Functional Materials Business Division will increase
its speed and execution to live up to expectations.

Managing Executive Officer,
Chief Operating Officer of
the Specialty Films Div.

Hidehiro Shima

Business Review
Business Description

Market Environment

BONSET is a brand of shrinkable films (heat shrinkable films) firstcreated in Japan and used for labels, cap seals, molded products, andmany other various purposes by capitalizing on a variety of material
properties. SANZIP is a brand of re-closable plastic zipper tapes which
are used in various fields, including the food business.
With Okayama Plant in Japan serving as the mother plant, BONSET
is working to build an optimal production and sales system for global markets that will maximize each production site through advanced
technical cooperation between three locations including BONSETAMERICA (BAC) and BONSET LATIN AMERICA (BLA) (Uruguay) in addition to two SANZIP sites—the Hiratsuka Plant and SHANGHAI SANPLUS
PLASTIC. Both the BONSET and SANZIP brands will achieve high quality,
short lead times, and quick after-sales services with the aim of capturing an even larger market share to solidify positions as global brands.

Both of these businesses have continued to foster moderate growth
up until now, but environmental considerations must be recognized asa top management priority in the future due to the traits of products
for temporary use. In accordance, we are reforming material selection,
production processes, capital investment plans as well as research anddevelopment policies. Furthermore, we will expand products which
help solve social issues, services, and business development independent of existing business sectors.

Main Business Strengths
Strengths● Manufacturing process technology and expertise cultivated overInitiative Results for FY2020
The BONSET Business boosted consolidated financial results thoughfavorable performance of BAC and BLA during fiscal 2020. BAC demonstrated a high level of orders even in the face of plant shutdowns andother circumstances brought on by the COVID-19 pandemic and severe
weather. BLA contributed to the high earnings performance throughsales to North America, which drastically increased compared to theprevious fiscal year. The BONSET Business intends to use fiscal 2021 asa chance to strengthen cooperation between primary business partners
which should enhance environmental measures as well as more broadly
introduce environment-friendly products to the market.
The SANZIP Business found traction with zipper tape sales mainly
overseas due to concentrated demand resulting from the COVID-19
pandemic in fiscal 2020. The SANZIP Business plans to use fiscal 2021
as a chance to strengthen production systems in order to respond tothe high customer demand overseas.

many years(Unit: Millions of Yen)● Manufacturing of a variety of products according to application

FY2019 Results

FY2020 Results

Compared to FY2019

Net Sales

19,684

19,465

Down 1.1%

Operating
Profit

1,155

1,984

Up 71.7%

with our unique compounding technologies● Production bases in Japan (Hiratsuka and Okayama) and overseas(China, US, and Uruguay) which have built globally optimized
production and sales (BCP support)● Comprehensive support of customer needs through mold insourcing(SANZIP)● Lineup of biodegradable, mono-material, biomass and othereco-friendly products and expansion of product development

32

C.I. TAKIRON Group Integrated Report 2021

Areas of Emphasis in the New Medium-term Management Plan
Many BONSET products are used as one-way plastics. The new medium-term management plan commits to solving social issues as a material subject fully recognizing the social responsibility to take immediate
action. The C.I. TAKIRON Group cannot tackle these issues all on its
own. Therefore, this division will further strengthen cooperation withraw material suppliers, users, and other partners to introduce environment-friendly products to global markets and enhance the sustainability of the business itself.
The SANZIP Business has a two-pronged production system consisting of the Hiratsuka Plant in Japan and the SHANGHAI SANPLUS PLASTIC in China, but even stronger production capabilities are necessary
to respond to high demand from customers overseas. Concurrently,
the SANZIP business will look into launching production sites in Asian
countries besides China as a sales strategy to maximize North America
as the largest market because the trade war between the United States
and China is not a problem which can be solved in the short term. The

Hiratsuka Plant will not only bolster its production capabilities but alsoenhance product supply capabilities to drive brand value in developing
nations.

Contributions to Solve Social Issues through BusinessContribution (1) Development of Environment-friendly Products
The Specialty Films Division has designated the reduction of the environmental impact andthe expansion of environment-friendly products as priority issues which aim to realize the
C.I. TAKIRON mission to create a people- and earth-friendly future and will work to advance
product development.
● BONSET Business

The BONSET Business has completed development of botanical PS shrink films using
plant-derived materials, which will contribute to the reduction of CO2 emissions by reducing the amount of petroleum-derived plastics used.
This business will also start sales of products taking into account the ease of PET bottle
recycling in North American and further its adoption by major beverage companies.

Botanical Film

● SANZIP Business

The SANZIP Business has fully released mono-material zippers in overseas markets andoperates under a policy to reduce the environmental impact through reductions in thedomestic market. This business is also currently developing Japan’s first zipper made from acellulose compound. The use of a paper-based material achieves a balance between rigidityand flexibility. This product is expected to start sales during fiscal 2021. An icon indicating
the certification of the final product as paper may also be displayed to identify it as paperon containers.

Cellulose Zipper● Biomass Plastic Identifiers

Biomass plastic products developed by C.I. TAKIRON have acquired certifications fromthe Japan BioPlastics Association (JBPA) and Japan Organics Recycling Association. The
SANZIP Business developed a product with a 25% usage ratio of bioplastic certified by bothof these associations (Logo 1 and 2).
The BONSET Business has developed a product with a 10% usage ratio certified by theJapan Organics Recycling Association. The botanical PS shrink film above is a product which
has acquired this certification (Logo 3).

Logo 1

Logo 2

Logo 3

Biomass Plastic IdentifiersContribution (2) Higher Efficiency and Optimization of
Production Sites
As a mother plant, the Hiratsuka Plant has improved its production capabilities throughconsistent success in production enhancement efforts over the last several years. However,this plant will execute a Renovation & Innovation project to actively incorporate a digitaltransformation in anticipation of population decline in the future. In order to respond to thehigh customer demand overseas, the Specialty Films Division will consider new production
sites to build a system facilitating optimized production and sales.

C.I. TAKIRON Group Integrated Report 2021

33

Business Strategy

R&D Department
Creating New Businesses, Products and Technologies
for the Next Generation
Important Strategies
C.I. TAKIRON will develop new technologies that contribute to not only the SDGs but sustainability
overall with the aim to fulfill the priority actions in the Medium-term Management Plan “Commit toTransformation 2023 (CX2023)” to resolve social issues and create new businesses, products and technologies. This will contribute to the reduction of the environmental impact of existing products andthe development of environmental-friendly products. We will also promote designs which consider
environmental impact assessments in new product development.
As the Key Success Factors (KSF) of market change, we have outlined measures that include thestandardization of AI and robots to address an aging society with a declining birthrate as well as adecrease in the working population, the use of IoT to facilitate a smart society, the creation of lighterand more functional interior materials to help innovate electric vehicles, housing that offers both
economic and environmental benefits to evolve living spaces, and a response to marine plastics andsocial issues in addition to the SDGs. As the KSFs of technical development, we have defined threecore technologies for the design of composite of long-fiber materials and polymer, the design ofspecialty films and sheets, and the design of composite nanomaterial products.
(See the diagram at the top of P35)

Akihiko Shiraishi
Executive Officer andin Charge of the R&D
Department

Research & Development System

Core Technology

The R&D Department contributes to the further expansion of thetechnologies possessed in each business division through three research and development sites and four groups. We drive forward activities that create new businesses and products which can resolve environmental and social issues, meet customer needs, and adapt to theseeds discovered by integrating in-house and external technologies.
Our research and development activities aim to promote the cultivation of budding new businesses as new growth engines and build
businesses as new pillars of income through cooperation across departments in addition to the independent activities of the research anddevelopment as well as product development departments.
Furthermore, project activities that link production and sales departments as well as partnerships with Group companies promote thedevelopment of attractive products that respond to the needs of customers. These collaborative efforts also work in environment-friendly
technical and product development based on the environmental preservation activities to help reduce CO2 emissions.

C.I. TAKIRON will develop three core technologies and create new business sectors with the aim of becoming a corporate group delivering future peace of mind and comfort to the world through a creative evolution.
Therefore, to create a people- and earth-friendly future, we hope to provide specialty products with advanced commoditization. In other words,
we will offer attractive products beyond conventional quality standards inaddition to providing value from the customer perspective.
Therefore, our research and development must pursue the potentialof materials in a research effort that ties to the development of a wide
range of film, sheet, and panel products that offer distinct featuresand characteristics. C.I. TAKIRON also strives in research to explore andcombine materials as well as integrate fabrication and peripheral technologies to improve added value. In addition, we also work to analyze
and evaluate the materials and elements molded in this research anddevelopment while enhancing the analytic evaluation technologies of
the C.I. TAKIRON Group to not only help increase the quality of products but also develop new products.

Group-Wide New Product Review Meetings
The R&D Department and the product development departmentsof each business division are working together to revitalize the development of new products throughout the entire C.I. TAKIRON Group.
In order to materialize the new products that will be responsible fortomorrow, we play a role in efforts for future corporate development
and growth as well as promoting those efforts and in the constructionof a system for managing and promoting the development system.

Convening New Product and Technology Presentations
New Product and Technology Presentations primarily ask junior engineers to present the technical themes that they have been working
on at a venue to introduce and evaluate new products and technology throughout the entire company once a year. These presentations
accelerate research and development by encouraging technical andinformation exchanges shared within Group companies.

34

C.I. TAKIRON Group Integrated Report 2021

<<KFSs of Technologcial
Development>>(1) Design of Composite of Longfiber materials and polymer

New Sectors

Existing Sectors

Automobiles

Construction Materials* Developmemt using carbon and/or glass fibers material.

Vegetable factory that utilize anutrient solution cultivation
system with artificial light(2) Design of Speciality Films
and Sheets* Development based on the multi-layering ofcore technologies as well as extension,rolling and crosslink (polymer modification)technologies, etc.

Industrial Films(3) Design of composite ofnanomaterials and polymer* Development using CNF and NanoTek
nano-sized ultra-fine particle materials

onOpen Innovation
on

[Core
Technologies]
Material
Compounds,
Fabrication,
Evaluation
Technology,
etc.

C

Environmental
Materials

High
Functional
Materials

ra

oT

it t

m
om

fo
ns

Cocurrent R&D

Speciality
Films

ti
ma

r

Construction
Materials

3)

02

23

20

2
(CX

Becoming a
Corporate Group
Delivering Future
Peace of Mind andComfort to theWorld through aCreative
Evolution

Healthcare

Environmental
Materials
High Functional
Materials
Speciality Films

IoT<<KSFs of Market Changes>>(1) Aging society with a declining
birthrate/decreasing working population(2) Smart society and creation of intelligent housingbuilding materials(3) Prevalence of electric vehicles/self-driving vehicles,
drones and construction machineries(4) Evolution of living spaces and mandatorycompliance to energy-saving standards(5) Handle marine plastic pollution

Investment in Growth
The CX2023 strengthens research and developmentby investing at least 2% of net sales into research anddevelopment.
As global competition in research and development
becomes fiercer and the product life cycle shortens,
C.I. TAKIRON must actively incorporate outside expertise and technology while also forging partnerships. To
accelerate the speed of this development more thanever before, C.I. TAKIRON will nurture junior researchoutside of our organization.

Development of Environment-friendly Products
Looking at the 3R+Renewable environmental initiative, we are focusing on reducing the use of petroleum-derived resources and development of recyclable plastics, biomass plastics, and biodegradable resins.
We are reducing the amount of petroleum-derived resources usedin our plastics by blending natural organic fillers, such as starch andpaper powder, or inorganic fillers, such as limestone and silica, into thepolymer. For recycling, we are trying to create new products by utiliz-

New Products
Development of Compounds Blended
with Cellulose
We are furthering the development of a cellulose compound recognized as a paper in the Containers and Packaging Recycling Law.
A special proprietary kneading method achievesa polyolefin compound containing 51% or morecellulose, a natural fiber, which can be classified
as paper.
This material can be used in precision extrusion molding and has practical properties. The cellulose compound can also be designed to satisfy customer requests.
A reduction to the volume of petroleum-derived resources used in our plastics
contributes to reductions in CO2 emissions as well.

ing used polymer products, so-called post-consumer products (productcontainers, sanitary materials, etc.). In addition, in order to improve theperformance and processing of biodegradable resins and make full useof biomass plastics, we utilize polymer processing technologies suchas composite technologies and shaping technologies possessed by C.I.
TAKIRON.

TopicsHigh-performance PLASTIC EXPO TOKYOThe R&D Department exhibited at the 9th High-performance PLASTIC EXPO TOKYO held in Makuhari Messe
for the first time in December 2020. We displayed ultra-high-molecular-weight polyethylene films, packing films,
blast curing sheets used for blasting method, and composite
CFRTP materials as composite of long-fiber materials andpolymer.
C.I. TAKIRON will accelerate commercialization of thesematerials based on feedback received at the booth whether
the expansion of products from multifaceted perspectives or
unprecedented market applications.

Development of Elastic Films for Hygiene Products
We focused on physical properties that could
not be solved by conventional ways and proceededwith development using polyolefin through making full use of compounding technology we havecultivated to solve these issues.

C.I. TAKIRON Group Integrated Report 2021

35

Environmental Report

Environmental/Decarbonization Initiatives
The C.I. TAKIRON Group has formulated an environmental policy for the purpose of conserving the global environment. We
strive to reduce the environmental impact across all of our business activities, such as improving production processes, developing environmentally-friendly products and providing services, in line with this policy. In addition to setting targets to reduce CO2
emissions, the Group is further investigating the adoption of renewable energy and has become a TCFD support as an effort tocombat climate change. We will also continue to strengthen our internal environmental management system in the future.

Environmental Philosophy Framework

Mission of C.I. TAKIRON
Create a People- and Earth-friendly Future

Environmental Philosophy
We will strive to manufacture products that take into consideration
the people, earth, and future while always keeping the conservationof our planet in mind.

Basic Environmental Policy
1. Promote decarbonization and reduction of the burden of the environment in all of ourcorporate activities.
2. Develop and offer environmentally-friendly technologies and products.
3. Proactively communicate with the community.

Management System to Resolve
Social Issues
Concerns about decarbonization and climate change measures havegrown since the COP21 adopted the Paris Agreement in 2015. The
C.I. TAKIRON Group also treats decarbonization and climate change
as key priority issues. As of this fiscal year, the Commit to Transformation: CX2023 Medium-term Management Plan makes solving social
issues our top priority. We will always keep in mind the sustainabilityof society, including measure to combat climate change and fully carryout materiality and business activities founded in the SDGs. Moreover,
we established the Medium-term Plan and Materiality Management
Committee as a body to manage the progress and challenges of each
initiative.
The Meeting to Promote Environmental Conservation led by the
Chief Operating Officer of the Corporate Planning Division with members selected from production and business divisions regularly reviews
the progress and challenges of environmental conservation activities at
each business site.

36

C.I. TAKIRON Group Integrated Report 2021

Materiality Management System
Board of Directors
Management
Committee

Each
Division

Medium-term Planand Materiality
Management
Committee
Subcommittee(Meeting to Promote
Environmental
Conservation)

Committee
Meeting(Meeting on
Social Issues)

Environmental Conservation Activities
and Results

Item

Progress of Activities

SelfAssessment

Reduce waste● Improve
manufacturing yieldand sort waste◎

C.I. TAKIRON will carry out initiatives aligning with the Science Based
Targets (SBT) Initiative throughout fiscal 2022 to engage in long-term
greenhouse gas reductions as a sustainable corporate group committed to the Paris Agreement.
We have set our current greenhouse gas reduction targets to conform with the levels* designated by the Paris Agreement (reducegreenhouse gases compared to fiscal 2018 13% by 2023 and 30%
by fiscal 2030), and will strive to achieve those targets through various
measures.
However, C.I. TAKIRON will revise future target values in light of thereforms to the recent reduction standards.

Save energy● S ave energy(introduced/
implemented energysaving equipment anddevices)■

The total amount of Scope 1 (combustion of fuel) and Scope 2 (useof electricity) CO2 emissions throughout the entire C.I. TAKIRON Groupis shown in the following table.

Comply withlaws andregulations●C omplied with laws
and regulations,
including the Law
concerning the
Examination andRegulation of
Manufacture, etc. of
Chemical Substances,the Law concerning
Pollutant Release andTransfer Register, andthe Industrial Safety
and Health Act.

◎

Reducedemissions andtransfer of
PRTR-listed
substances●C onducted activities
to reduce the use oflisted substances〇

Environmental
Report●R eview the status of
the environmental
activities in the firsthalf of the year
● P ublished information
publicly through ourIntegrated Report andon our homepage

C.I. TAKIRON conducts environmental conservation activities basedon the environmental management system, etc. of each Group site.
Our activities and the results of a self-assessment for fiscal 2020 are
outlined in the following table.
Target(1) Promote
activities toreduce theenvironmental
impact(2) Manage
and reduce
chemical
substances(3) Publicly
releaseenvironmental
activities(4) Evaluate
activities
throughenvironmental
accounting

Decarbonization Initiatives

Environmental
Accounting● Aggregatedenvironmental
accounting inaccordance with
Ministry of theEnvironment
Guidelines to serve asactivity management
evaluation indicator
data

CO2 Emissions Data (Scope 1 + 2)
(Unit: Thousand t-CO2)

FY2018FY2019FY2020

109

89

83

* The goal of the Paris Agreement is to limit global warming to well below 2,
preferably to 1.5 degrees Celsius, compared to pre-industrial levels.

Climate Change Initiatives
C.I. TAKIRON recognizes climate change initiatives as a corporate social responsibility because it is a priority issue requiring action from allof society. Therefore, we have pledged our support to the Task Force on
Climate-Related Financial Disclosures (TCFD). As a TCFD supporter, C.I.
TAKIRON will strive to disclose information in accordance with the fourrecommended thematic areas that represent core elements of how anorganization operates.

Four Recommended Disclosures for TCFD Supporters◎

Governance

Disclose the organization’s governance aroundclimate-related risks and opportunities

Strategies

Disclose the actual and potential impacts of theorganization’s businesses, strategy, and financial planning

Risks

Disclose how the organization identifies, assesses, andmanages climate-related risks

Metrics andTargets

Disclose the metrics and targets used to assess and manage
relevant climate-related risks and opportunities◎● Performed
environmental
management
evaluation via internal
analysisSelf-Assessment (Achievement Level) More than 90%: ◎70% to 90%: ○ Less than 70%: ■C.I. TAKIRON Group Integrated Report 2021

37

Environmental Report

Environmental Index
The C.I. TAKIRON Group collects and analyzes yearly data for each environmental index at Group production sites as part of its
initiatives to reduce the environmental impact.
We also further the reduction of our environmental impact by evaluating the efforts to reduce the environmental impact ofeach Group site as well as the results of those efforts to improve activities in the following fiscal year.

Energy and Resources Saving Initiatives
The energy consumption rate in fiscal 2020 increased compared tofiscal 2019, but the unit CO2 emissions declined throughout the C.I.
TAKIRON Group.
Some business sites did reduce both the energy consumption rate
and unit CO2 emissions. However, the entire Group was unable toachieve these unit rate reductions.
In fiscal 2021, we will conduct improved efforts from energy-saving
to those that improve yield.

The C.I. TAKIRON Group strives to reduce the use of PRTR-listed substances, which have a large environmental impact.
The emissions of PRTR-listed substances in fiscal 2020 increased
compared to fiscal 2019. However, the amount of transfer declined
during the same period.

Changes in PRTR-listed Chemical Substance Transfers(kg)
35,000Changes in Energy Use and Consumption Rate
(GJ)

Chemical Substance Management andReduction Initiatives(GJ) (GJ/Manufacturing Ton)

2,500,000

13.5

2,000,000

13.0

1,500,000

12.5

1,000,000

12.0

500,000

11.5

0

11.0

30,00025,00020,00015,00010,000
5,000
0

2015

2016

2017

2018

2019

2020 (Fiscal Year)

Non-consolidated

Non-consolidated unit consumption

Group companies

Consolidated unit consumption

2015

2016

2017

2018

2019

2020 (FiscalYear)

Bis (2-ethylhexyl) phthalate

TolueneManganese and manganese compounds

Organotin compounds

Changes in PRTR-listed Chemical Substance Emissions
Changes in CO2 Emissions and Unit CO2 Emissions(t-CO2)(t-CO2) (t-CO2/Manufacturing Ton)

140,000

0.80

120,000

0.70
0.60

100,000

0.50

80,0000.40
60,00050,00040,00030,00020,0000.30

40,00038(kg)
60,0000.20

20,000

0.10

0

0.00

2015

2016

2017

2018

2019

2020 (Fiscal Year)

Non-consolidated

Non-consolidated unit consumption

Group companies

Consolidated unit consumption

C.I. TAKIRON Group Integrated Report 2021

10,000
0

2015

2016
TolueneNormal hexane

2017

2018

Bis (2-ethylhexyl) phthalate
Dichloromethane20192020 (Fiscal
Year)

StyreneInitiatives to Effectively Use Water
Resources

Initiatives to Reduce Emissions

The C.I. TAKIRON Group calculates the amount of its water consumption and waste water for production sites throughout the entire
Group to effectively use limited water resources.
In fiscal 2020, we reduced both our water consumption and waste
water compared to fiscal 2019.
We will continue to employ efforts toward water consumption andwaste water reduction.

Changes in Water Consumption(Thousand m3)

C.I. TAKIRON has successfully improved the total weight of waste
emissions from plants, waste valuables, and exclusive waste recyclables.
In addition, we define total unit waste emissions as the value obtained by dividing total waste emissions by warehouse product volume
and have been spearheading improvements at all domestic Group companies since fiscal 2020.
Our Group achieved year-on-year reductions in both total waste
emissions and total unit waste emissions.
In fiscal 2021, the C.I. TAKIRON Group will continue to carry out
initiatives to further reduce its waste emissions.

Changes in Total Waste Emissions and Total Unit Waste Emissions

1,500

Total Emissions (t)Total Unit Emissions (t/Manufacturing Ton)

16,000

0.10

1,200

0.09

900

0.08

12,000

0.07
0.06

600
8,000

0.05
0.04

300

0.03

4,000
0

2015

2016

2017

2018

Non-consolidated

2019Group Companies

0.01
0Changes in Waste Water

2015

2016

●

1,500

2017

2018

0.00
2020 (Fiscal Year)2019

Total Group-wide unit waste emissions

Group Companies

Non-consolidated(Thousand m3)

Definitions

Waste emissions: Waste, waste valuables and exclusive waste recyclables emitted fromplantsWaste: Anything other than waste valuables and exclusive waste recyclables containedin waste emissions
Waste valuables: Items collected from waste emissions which can be soldExclusive waste recyclables: P aper, paper fibers and scarp iron
Total waste emissions: Weight of waste emissions (total weight of waste, waste valuables and exclusive waste recyclables)

1,200

900

600

Recycling rate=

300

0

0.02

2020 (Fiscal
Year)

2015

2016

2017

2018

Non-consolidated

2019Group Companies（

1-

Weight of waste without any recycling
Total waste emissions

）

×100

2020 (Fiscal
Year)

Material Flow Chart for the C.I. TAKIRON Group (FY2020)
Production/Market Entry Phase

Emissions Phase

Processing/Disposal Phase

95.0%

Recycled Plastic
Intake Volume

Recycling
At Plant

BetweenPlants

9.7%

4.4%

Use

100%

14.2%

Durable
Goods

3.0%

C.I. TAKIRON Group

97.0%

Material Recycling

Product Warehousing

Emissions of
Durable Goods
After Use

Nondurable
Goods

Plastic Intake
VolumeEmissions ofNondurable
Goods After
Use

Thermal Recycling

Industrial
Waste

Not Yet Used
(Simple Incineration)(Landfill)
TBD

5.0%
Production Loss

Chemical Recycling

GeneralWaste

Production Loss
Emissions

1.1%

Recycling

Less than 0.1%

Simple Landfill

0.4%

Simple Incineration

3.4%

Waste Valuables(Trades at a Price)

C.I. TAKIRON Group Integrated Report 2021

39

Environmental Report

Disclosure of Scope 3 Data

Logistics Initiatives

C.I. TAKIRON has begun calculating and publishing non-consolidated
Scope 3 data for its supply chain as of fiscal 2018 in order grasp theamount of CO2 emissions throughout the entire supply chain, which ismore important than ever before. We are now publishing data about
Category 1: Purchased Goods and Services in addition to seven othercategories.
As a result of verifying the state of our emissions, we discovered Category 1: Purchased Goods and Services made up approximately 75% of
our Scope 3 emissions in fiscal 2020 as it did in fiscal 2019.
We will continue to further our efforts to reduce emissions throughout the entire supply chain by advancing considerations, such as theongoing calculation and disclosure of Group company data and enhancements to the calculation accuracy about categories published inthis report.

C.I. TAKIRON is a specified shipper for more than 30 million ton kilometers annually. We have been submitting rationalization plans andregular reports to competent authorities while striving to improve load
efficiency and switch to using large vehicles for transport to achieve
those plans.
In fiscal 2020, we actively transitioned to trailer trucks on our mainroutes to factories and distribution bases. C.I. TAKIRON is also actively
using ferries to transport goods. As a result of these initiatives, we have
improved unit consumption.
In fiscal 2021, we will further promote our transition to trailer trucks
and ferries on main routes.
In addition, C.I. TAKIRON aims to further improve load efficiency bystreamlining measures such as bundled orders from customers. As thelogistical challenges forecast for 2024 bear down on us, we will build a
distribution system taking into account the work-style reforms of logistics operators in accordance with the White Logistics movement(Unit: Thousand Tons)

Emissions

Changes in Freight Traffic

Category(Thousand ton/kilometers)

FY202080,0001.08

1. Purchased Goods and Services

177

178

70,000

1.06

2. Capital Goods

24

8

60,000

1.04

3. 
Energy-related Activities Excluded in Scope 1
and 2

13

13

50,000

1.02

4. Upstream Transportation and Distribution

25

22

40,0001.00

5. Waste Generated in Operations

1

2

30,000

0.98

6. Business Travel3

1

20,000

0.96

7. Employee Commuting

0.4

0.4

10,0000.94

8. Upstream Leased Assets

OutsideScope

OutsideScope

Calculation method: The calculation uses the emissions factor included in the emissions
unit value database to calculate greenhouse gas emission of an organization throughout the supply chain according to the Basic Guidelines on Accounting for Greenhouse
Gas Emissions Throughout the Supply Chain Ver. 3.1 issued by the Ministry of theEnvironment and the Ministry of Economy, Trade and Industry.

40(Year-on-year Unit Ratio)

FY2019C.I. TAKIRON Group Integrated Report 2021

0

2015

2016

2017

Transportation Quantity

2018

2019

Year-on-year Unit Ratio

0.92
2020 (Fiscal Year)

Environmental Accounting
The C.I. TAKIRON Group has implemented environmental accounting for the purpose of accurately understanding and analyzing the costs and cost effectiveness of environmental protection activities to promote more efficient environmental conservation activities.
Therein, we are calculating the amount of investment and costs for environmental measures, energy and resource saving
measures in addition to resource saving through production improvement activities and cost reductions through recycling.

Environmental Conservation Costs
In fiscal 2020, investment costs for environmental conservation decreased compared to fiscal 2019 due to the impact of the COVID-19.
The costs of environmental conservation increased. The reason forthis rise in costs was the removal of unnecessary articles at some production sites and the increase in related labor costs.
Unit: Millions of Yen

Category
1. Business area costs

FY2019FY2020Costs Investment Costs Investment
314

250

332

192

1-1 Pollution control
costs

32

21

49

44

1-2 Global
environmental
Breakdown
protection costs

104

1-3 Resource
recycling costs

177

85

184

52

2. Upstream/downstream costs

143

0

223

5

3. Management activity costs

86

51

76

13

4. R
 esearch and development
costs

1

1

5

10

5. Outside activity costs

14

0

22

0

6. Environmental compensation
costs

144

96

In fiscal 2020, our energy consumption declined due to a scale downof production activities influenced by the COVID-19 pandemic, promotion of energy-saving activities, and other such factors. Our carbon
dioxide emissions also went down.
We reduced our water consumption and waste water through watersaving initiatives, measures to prevent leakage, and other such efforts.
Although our total waste emissions did go down, our recycling rate
also fell due to overseas waste export control regulations.
Item

FY2019

0

0

0

0

1

2

191,411

189,137

2. Carbon dioxide emissions (t)89,037

81,999809

801

13,21012,62891.1

82.3

3. Waste water from plants (thousand m3)

658

219

5. Recycling Rate (%)

Economic Effect of Environmental Conservation
The sale of waste valuables decreased in fiscal 2020 due to factors
such as the waste import control regulations in each country.
Amount of costs saved through energy-saving, resource-saving, andrecycling all rose compared to fiscal 2019.
Unit: Millions of Yen

Item
Income558

302

FY2020

1. Power consumption (thousand kWh)

4. Total Waste Emissions (t)7. Other
Total

99

Environmental Conservation Effect(Effect in Business Areas)

Cost
reductions

FY2019FY2020From sale of valuables

66

44

Energy cost reductions from energy
savings

17

56

Cost reductions from resourcesavings and recycling

177

293

C.I. TAKIRON Group Integrated Report 2021

41

Sociability Report

Human Resource Strategies

Toward New Work Styles and Employee Development
New work styles from telework to online meetings have taken shape as the COVID-19 has
spread.
C.I. TAKIRON continues to promote a digital transformation and strives to build a working
environment where every employee can reach their full potential. That is why we have put
into practice the Management Commitment on Enriching Lives.
We will promote diversity and provide a healthy workplace where employees can work withsafety and peace of mind based on the Commit to Transformation: CX2023 Medium-termManagement Plan.

Yukihiro Iwata

Managing Executive Officer
Chief Operating Officer of the Corporate Administration Division

Management Commitment on Enriching Lives

Ideal Human Resources e provide a quality
W
workplace for anenriching life
The ability for each and every employee to live an enriching life helps
the sustainable growth of our company. While faced with a decreasing
working population due to an aging society with a declining birthrate,
we must build an environment where both the employees and company can grow through sufficient display of the capabilities that diverse
human resources have to offer in order to heighten corporate competitiveness. As a means to this end, it is necessary for the company
to provide a quality workplace that leverages individuality rather than
expecting employees to conform to a standard role model archetype.
On April 1, 2019, we formulated the Management Commitment on
Enriching Lives in order to share our thoughts with employees as animportant medium- to long-term measure of management. We advocate support for diverse work styles, support for purposeful work, andsupport for better health (health and productivity management) as vital
measures in building a quality workplace, and we are striving to cultivate a new corporate climate. In fiscal 2021, we will strengthen Management Commitment on Enriching Lives related initiatives in order togrow the company and increase its corporate value.

To Grow as a Leading Company
In fiscal 2018, we embodied the concept of Ideal Human Resourcesin the Let‘s Talk More project in which in-depth discussions were held
between teams divided into each generation from people in their 20s
to people in their 50s. Our Ideal Human Resources concept strongly
calls for awareness as expressed by “Communicate,” “Commit,” and“Be Proactive.” We are developing human resources who are responsible for their work, who can complete the work without discarding
it, and who can increase their own value of existence by completing
their work.
Communicate

Human resources capable of actively communicatingwith everyone inside and outside the company andconveying their thoughts

CommitHuman resources who think for themselves, act forthemselves, and fulfill their responsibilities

Be Proactive

Human resources who can anticipate situations andactively realize new business and innovations

Management Commitment on Enriching Lives

Our company provides a quality
workplace where employees canwork easily in accordance with theManagement Commitment on Enriching Lives, and employees contribute to the lasting growth of thecompany through realization of the
Ideal Human Resources concept.

42

C.I. TAKIRON Group Integrated Report 2021

Support for Diverse
Work Styles
Vitalize Organization/
Improve Product
Enriching Life/
Employee Growth
Quality
Workplace

Ideal Human Resources

Support for
PurposefulWork

Supportfor Better
HealthHealth andProductivity
Management

Management Commitment on Enriching Lives Important Measures
C.I. TAKIRON strives to encourage the formulation and use of programs with these important measures at the core to support an enriching
life for our employees. The Management Commitment on Enriching Lives
Promotion Committee chaired by the Representative Director and President has been regularly holding meetings and promoting initiatives since
fiscal 2020. We set employee work engagement and loyalty scores as
Key Performance Indicators (KPI). An annual employee survey also gauges
enthusiasm and employee satisfaction with the company to improve eachmeasure and resolve management and organizational challenges.

Support for
Diverse Work Styles

Support for
Purposeful Work

Support for
Better HealthRealization of a Workplace
Where People Can Work
According to the Stage of
Their Life

Realization of a Workplace
Where Everyone Can Work
Enthusiastically

Realization of a Workplace
Where People Can Work
Efficiently with a Healthy
Body and Mind

Industrial physicians andpublic health nurse
Management Commitment on
Enriching Lives Promotion Committee

Coordinate(including health and productivity
management)

Itochu Group Health
Insurance Society
Health and Safety Committee
C.I. TAKIRON Labor Union

1) Support for Diverse Work Styles
C.I. TAKIRON adopts systems such as an hourly leave system anda telework system with the goal of realizing a workplace where eachcan employee can select a working style according to their stage oflife. As for measures to prevent the spread of COVID-19, we extended
the scope of the telework system to all employees who can work fromhome to improve the infrastructure as well as make use staggered work
hours.

Telework Implementation Rate (Monthly Average)*
April toJune 2020
48% to 69%

July to
October to
September 2020 December 2020
48% to 58%

49% to 56%

January to
March 2021
54% to 61%*Scope: Employees working at offices.

2) Support for Purposeful Work
C.I. TAKIRON implemented career consulting and job rotation programs as a framework to support the purposeful work of its employees. Career counseling provides career development support throughcounseling with supervisors. Employees create an action plan andconfirm a growth process after sharing their ideal future and theirthoughts about their career with their supervisor and colleagues basedon a career vision sheet drafted by the employee themselves. The job
rotation program is a program in which employees move to a different department five years after joining the company with the hope ofaiding in their development by providing a wide range of experience.
These frameworks support the expectations from the company and thepassion that employees have about a career as a means to help facilitate a better professional life and purposeful work.

3) Support for Better Health
C.I. TAKIRON announced the Health and Productivity Management
Declaration with the aim to realize a workplace where people can work
efficiently with a healthy body and mind. In fiscal 2020, our industrial physicians and health insurance society indicated a high smoking
rate at C.I. TAKIRON. In accordance with the Health and Productivity
Management Declaration, we made every effort to lower this smoking
rate. C.I. TAKIRON subsidized the entire amount for an effective online
program for people to quit smoking offered by the health insurance
society. As a result, 37 people used the program, and we were able
to decrease our smoking rate in fiscal 2019 by more than 5%. We
also believe it is important for people to take regular paid leave torefresh both mentally and physically. Continuing from fiscal 2019, we
implemented financial incentive program to encourage employees toplan taking paid leaves. These types of health measures have supported
opportunities to take active action in health and productivity management by bringing a deeper understanding about health.
In addition to the initiatives above, C.I. TAKIRON also provides cancer screenings specific to each gender, raises awareness and advocatesspecific health guidance, and conducts stress checks. In fiscal 2020, ourimplementation rate for specific health guidance declined after changing contractors. In fiscal 2021, we will work with industrial physiciansand other healthcare professionals to raise this implementation rate.
C.I. TAKIRON will raise even greater awareness about employee healthwith a new target of at least an 80% implementation rate of secondary
screenings for candidates designated during physical examinations.

Smoking Rate
FY2019FY2020

FY2021 (Target)

35.2%

29.6%

27% or lower

Rate of Paid Leave Taken by Employees
FY2019FY2020

FY2021 (Target)

91.2%

88.2%

80% or above

Specific Health Guidance Implementation Rate
FY2019FY2020

FY2021 (Target)

40.9%

32.8%

60% or above

In fiscal 2021, C.I. TAKIRON was once again
certified as an outstanding organization for
health management under the Certified Health& Productivity Management Organization Recognition Program for the second consecutive
year. We will continue to strengthen our Management Commitment on Enriching Lives related initiatives with theaim of becoming a White 500 company.

C.I. TAKIRON Group Integrated Report 2021

43Sociability Report

Diversity & Inclusion

Action Plan to Promote the Active Participation of
Women from April 2021 to March 2023

We believe that the acceptance of diverse human resources regardless of physical or non-physical differences as well as understanding
and respecting a wide range of values and viewpoints vitalizes the organization and helps employees grow.
At first, we provide in-house training so that each employee can better understand the concepts of “diversity & inclusion,” respect the various values and differences of each individual, and create a corporate
culture in which all people can fully demonstrate their abilities.
1) Active Participation of Seniors (Continued Employment of Retirees)
We provide employees who would like to be re-employed at C.I. TAKIRON after they retire with a workplace that considers their hopes as
an employee, such as the business category and number of work days,
to support their active participation.

(1) Increase the ratio of new female graduate employees
to at least 40%.
● Recruit a ratio of new female graduate employees of atleast 40%.
● Actively recruit women when recruiting mid-career
employees.
(2) Maintain an acquisition rate of paid leave taken by
employees of at least 80%.
● Promote employees to plan taking paid leaves.
(3) Cultivate an organizational climate where female
employees can participate without worry.
● Enhance programs to support flexible work styles.
● Provide training to change the attitude toward female
employees.

New Female Graduate Employment Ratio

Status of Continued Employment for Retirees
Re-employment rate

FY2018FY2019FY2020

88%

80%

76%

2) Employment of Disabled Persons
We support the employment of disabled people as part of our efforts to encourage the active participation of diverse human resources,
and we are furthering the employment of disabled persons at each of
our corporate offices. C.I. TAKIRON has been supporting the work of
disabled persons through the Work Happiness Iwatsuki Saitama Farm
since June 2019 by cultivating and harvesting vegetables.

FY2019FY2020

Employment Ratio of
Disabled Persons

2.11%

2.26%

2.34%

Statutory
Employment Ratio

2.20%

2.20%

2.30%

14

11

13

4

6

4

29%

54%

31%

Employee Composition(Fiscal Year)

2020

83.1

16.9

2019

84.5

15.5

85.1
20

14.9

40

60
Male

80

100
(%)

FemaleC.I. TAKIRON established a short-term childcare leave system toallow both male and female employees to take childcare leave moreeasily. By providing individual guidance to eligible candidates and theirsupervisors, we have been able to make taking childcare leave a common practice. All of the men and women who had taken childcare
leave returned to the company during fiscal 2020.

Voice of a Male Employee
Taking Childcare Leave

Acquisition Ratio of Childcare Leave for Employees
FY2020 (Female)

FY2020 (Male)Jun Kamitamari

Number of Employees Qualified toTake Childcare Leave During theApplicable Fiscal Year

4

28

Number of Qualified Employees that
Took the Childcare Leave

4

29*

100%

100%

Manufacturing Group, Yasutomi Plant
I was the first to take a short-termchildcare leave in the Manufacturing Department with heartfelt support from mycolleagues and superiors. I did my best
to support my wife by doing household chores and child raisingduring the leave to let her rest, but it realized how difficult raising a child is. I hope I can take part in building an environment
where taking leaves is even more easier for my colleagues.

3) Initiatives to Promote the Active Participation of Women
We have formulated an action plan and raise awareness both insideand outside of the company in accordance with The Act on Promotionof Women’s Participation and Advancement in the Workplace whilebuilding a workplace where.

44

Joined 2021

Female0

FY2018Joined 2020

Female Ratio

2018

Employment Ratio of Disabled Persons

Joined 2019
Number of New
Graduate Employment

C.I. TAKIRON Group Integrated Report 2021

Acquisition Ratio*Including candidates who became eligible in fiscal 2019

Retention Rate of Employees that Took Childcare Leave
Number and percentage of employees still at the company 12 months after returning to work in FY2019

The Minister of Health, Labour and Welfare recognized C.I. TAKIRON as an organization striving
for a high level of childcare support through the2021 Kurumin Certification.
* The Kurumin Certification is an initiative to recognize
companies meeting certain requirements for childcare
support that provides work-life balance to employees
based on the Act on Advancement of measures to
Support Raising Next-Generation Children.

Female

Male

7
100%

29
100%

System for Human Resource Development
Career Development Support
C.I. TAKIRON establish two types of assessments, achievementbased assessments and skill-based assessments, to serve as the coreof a system to help the development of employees based on the belief
that the growth of employees is the source of growth for the company.
For achievement-based assessments, all employees set individual
goals that match the goals of the organization to which they belong
and are evaluated according to their final level of achievement. Supervisors will consult with employees regularly to see if they are progressing according to the original plan while offering advice to support
their success toward these goals, which at the same time builds mutual
relationships founded in trust. Through these achievement-based assessments, employees see their contributions to the company and their
growth.
For skill-based assessments, abilities required for each occupationand grade are set in advance, and how those abilities are demonstrated is evaluated at the individual employee level. This assessment helps
employees to discover areas where they are strong and areas where
they can grow to help them grasp the necessary skills to further heighten their abilities.
We then consult with employees about their career based on the
results of these two assessment systems to facilitate close communication between each supervisor and employee. The career consulting
program flushes out the direction for the employee to proceed by having both the supervisor and employee think about the career path. The
supervisor also creates a career development plan to support employee
development.

Education and Training
C.I. TAKIRON has established an education system and provides abroad range of opportunities to foster the development of the employees who help enhance the value of the company while also helping theemployees themselves grow. We have designed education programs
according to the career paths of our employees from training thatdevelops the necessary skills by occupation and grade to education
programs that teach active participation as global human resources,
distance learning that supports self-development as well as incentive
programs to acquire qualifications.

Global Human Resource Development System
In order for employees to play an active role at the global level, we
promote examinations by paying TOEIC IP test fees, support English
learning using e-learning, provide domestic-based English education
comprised of one-on-one online lessons as a job training elective, andoffer a foreign language study abroad program as well as practicaltraining programs at overseas Group companies.

Available Programs
FY2020 Programs

Number ofParticipants

Practical Overseas
Training

1

Foreign Language
Study Abroad-*

Domestic-based
English Language
Education

9

e Learning-based
English Language
Education

75

TOEIC IP L&R Test

39

Foreign Language Study Abroad Program(Training in England)* Program held in 2019

* The Foreign Language Study Abroad program has been suspended indefinitely inlight of the COVID-19 pandemic.

New Employee Mentor Development Training
The new employee mentor development training for senior employees who have been with the company for several years aims to cultivate
mentors (mentor employees) who support new employees both from amental standpoint as well as with operational concerns.
New Employee Training
The new employee training program in fiscal 2021 incorporated faceto-face as well as online Group training as part of our comprehensive
measures to prevent the spread of COVID-19. The practical training at
plants centers on plant tours with trainees visiting our production site in
the Kansai area for one week. Through introductory training, including
web conference-based training in business etiquette and marketing,
we support the acquisition of necessary knowledge to serve employees
as members of society as well as members of our company.
New employees join follow-up training after working at the company
for six months to consider their future career and verify their development as well as use of their skills after being assigned to a particular post.

FY2020 Programs
Program Name

Aims

Description

Designed forLabor Management
Training(Work hour management
and harassment training)● Learn basic knowledge about managing working
hours and preventing harassment● Acquire skills to manage and guide subordinatesfrom the perspective of labor management● Deepen understanding about work hour management, mental health, and harassment through Groupdiscussions using practical examples

Managers

New Senior Employee
Training● Understand one’s own abilities and characteristics● Acquire management skills●Examine one‘s own abilities and characteristics
through assessment and create/implement an action
plan to develop those abilities

Managercandidates

New Employee Mentor
Development Training●Understand and acquire necessary skills for training
new employees●Build relationships that also allow mentors to growthrough guidance and training● Understand the role as a mentor and the frameworkof how to proceed with training guidance to create
guidance policies and training plans.
● Provide individual guidance, feedback, and acquire
counseling skills

Employees indepartments
to which new
employees are
assigned (byselection)

New Employee Training● Acquire a mindset that of a member of society and● Understand about work as a member of society andbecome motivated to growacquire the mindset for it● Basic work behavior acquisition● Learn business etiquette● Learn about teamwork and acquire communication skills

New employees*Programs were strictly selected and held from those conduct in previous years in light of the COVID-19 pandemic

C.I. TAKIRON Group Integrated Report 2021

45

Sociability Report

Health and Safety

Building a Safe and Comfortable Workplace byInstilling Safety Awareness in Employees
The title is the name of the fiscal 2021 C.I. TAKIRON Group health and safety policies.
Employee safety and health is our top priority. We believe that living an enriching life while
maintaining safety and health will stimulate corporate activity which will lead to value
creation. Therefore, we are continuing activities to improve the workplace where we canwork safely and actively.
We improve awareness in an effort to create a better workplace around 5S (Sort, Set in Order, Shine, Standardize, and Sustain) activities with the full participation of employees andto ingrain a sense of safety in every employee. We strive every day with the goal of soundworkplace improvement with an atmosphere encouraging a free exchange of ideas.

Hironori Kikuchi

Managing Executive Officer,
Chief Operating Officer of the Production Division

Health and Safety Management System
The C.I. TAKIRON Group regularly holds various health and safety meetings with the executives who are responsible for supervising
health and safety to determine policies on health and safety activities as
General Manager
Safety: Chief Operating
Officer of the Production
Division
Health: Chief Operating
Officer of the Corporate
Administration Division
Secretariat
Safety: Plant Management
Department
Health: Human Resource
Department

C.I. TAKIRON Group Health and Safety Council

C.I. TAKIRON Healthand Safety Manager
CouncilGroup Health and
Safety Manager
Council

Health and Safety
Committee at EachBusiness Establishment

Health and
Safety Committee
at Each Company

Employees

Composition of theCommittee in Accordancewith the Industrial
Safety and Health Act.

well as important measures to prevent accidents, and to expand healthand safety activities to C.I. TAKIRON and Group companies founded ina health and safety policy to build a safe and comfortable workplace
by instilling safety awareness in employees. Our Group also mutuallyshares and uses information to build a system that promotes a higher
level of health and safety as well as risk reduction.

Important Measures
Important Safety Measures

Important Health Measures(1) Identify the levelof individual andorganizational safety
awareness and conduct
awareness raising measures(2) Provide education andpractice basic safety activities(3) Practice measure
to mitigate risks bythoroughly investigating
accident factors(5) Ensure candidates undergo
secondary examinations
necessary due to theresults of physicalexaminations(6) Ensure candidates undergo
specific health guidance(7) Reduce the number of
employees working longhours due to overtime(4) Comply with relevant laws
and regulations and fully
respond to legal reforms

Safety Simulation Training
Sensory training to heighten the ability of employees toanticipate danger is vital toprevent industrial accidents.
C.I. TAKIRON introduced
safety simulation equipment
at the Aboshi Plant in fiscal
2017 and conducted thissensory training to heighten Safety simulation room
the ability of employees toanticipate danger. We conducted this training primarily at production
sites around the Aboshi Plant in fiscal 2017. In fiscal 2018, we broughtin safety simulators to production sites throughout Japan in order toprovide on-site simulation training. As a result, 2,235 employees from46

C.I. TAKIRON Group Integrated Report 2021

all C.I. TAKIRON plants as well as production sites of Group companies
have taken the first phase of simulation training as of March 2020.
In addition, we started providing the second phase of simulation
training in fiscal 2020. The first phase of training focused on experiencing danger and the focus of the second phase is not to downplay
danger (to recognize danger at face value). By participating in multiple
training sessions like these, we also aim to maintain ability to predict
danger by employees.
We will continue to expand educational simulators that conform to
production equipment, cultivating intuition of familiar dangers in theworkplace. Our goal is to eliminate industrial accidents throughout theentire C.I. TAKIRON Group by thinking about how we should make useof the awareness to improve a sense of danger as well as an awarenessabout safety.

Health and Safety Activities at
Group Production Sites

FY 2020 Industrial Accidents (Including Injuries with No
Leave of Absence for All Group Companies)

The C.I. TAKIRON Group conducts various activities at each production site with the health and safety committees at the core.

Traffic Accidents (Road) 3%
Contact with High/Low
Temperature Materials 3%
Collisions 3%(1) Revised the format for occupational accident reports
We have revised the format of our report to thoroughly investigate
the root causes of occupational accidents and execute more effective preventative measures.
(2) Evaluated the level of safety management
We evaluated the level of safety management to identify and enhance the level of safety management at each site.

Other 3%

Fall 3%
Contact with
Hazardous
Material 6%
Falling
Objects
9%

We set specific standards and objectively evaluate the safety activities
rolled out at each production site.
Objectives
・Clarify strengths and weaknesses of safety management on each site
・Improve the level of safety management at every company through comparison and horizontal expansion between
plants(4) Management(2) Plans(5) Evaluation(3) Support(6) Corrective action
Each of the 6 categories has 5
evaluations items (30 items)*C.I. TAKIRON evaluated the management level of its plants in fiscal 2020.
In fiscal 2021, we plan to conduct these evaluations at all of our Group
company plants.

Ratio by Type

Reactionary /Unreasonable
Movement
Pinching/
12%
Entanglement
12%

Objectives of Evaluating the Level of
Safety Management

Evaluation Categories(1) Leadership

Cuts/Scratches
27%

At Least 20 Years
18%
Between 15 to lessthan 20 Years 3%
Between 10 to lessthan 15 Years 6%

Falling
18%

Less than 1 Years
18%

Accident Ratio
by Tenure

Between 1 toless than
2 Years
15%

Between 5 to lessthan 10 Years
21%

Between 4 to less than 5 Years 6%
Between 3 to less than 4 Years 9%
Between 2 to less than 3 Years 6%

Feedback from Trainees
Yasutomi Plant: I work in
the office and not on the production floor. By looking at
all of the different points ofcaution, I realized how manyhazards there are. I notice thedangers all around me now.
I will strive to always keep Simulation of Being Cut by a Rotating Bladewhat I learned through thistraining program in mind. I do not think I would have been able tolearn as much by simply looking at the dangers rather than experience them. The training course let me experience the dangers and fear,
which is something I will never forget.

C.I. Takironcivil Corporation Yokkaichi Plant: I was very familiar
with almost all of the tasks. This training helped me remember thatthe biggest danger is to think that you won’t make any dangerous
mistakes.
C.I. Takironcivil Corporation Tsuchiura Plant: I felt how important
it is to share dangers with everyone and communicate both inside andoutside the workplace to recognize hazards while working.
CIK Nanotek Corporation Okayama Plant: Even if I knew that it wasa machine for experiencing danger, when I actually experienced it, I
felt scared and sensedthe danger. I also learned that it is important not
only to take a lecture on the matter but also to actually experience it.
TAKIRON TECH Aboshi Plant: I am glad I took part in this training
program because I discovered hidden dangers where I thought a little
deviation would be safe.

C.I. TAKIRON Group Integrated Report 2021

47

Sociability Report

Dialogue with Stakeholders
The C.I. TAKIRON Group aims to build trusting relationships and create a people- and earth-friendly future through diverse
communication with all of its stakeholders. We will deepen cooperation with our stakeholders and foster mutual understanding to not only share our values and continue to be a trusted enterprise but also contribute to the sustainable development ofsociety through our business activities.
Dialogue List
Stakeholders

C.I. TAKIRON Group Responsibilities

Department

Communication Tools
General Shareholders’ Meeting

Frequency ofCommunication
Once a year

Integrated Report and Annual Report Once a year

Shareholders
and Other
Investors

Notice to Our Shareholders reportfor shareholders

Twice a year

Corporate governance reports

Occasionally

Shareholder surveys

OccasionallyFinancial results briefings

Twice a year

Individual investor briefings

Several times a year

News releases

Occasionally

CSR Department

ESG rating agency survey responses

Occasionally

Public Relations

Website and advertisements

Occasionally

Sales activities and social media

Daily basis

Exhibition spaces, expos, and events

Occasionally

Quality certificates

Daily basis

Delivery specifications

Daily basis

Inspection certificates

Daily basis

Inquiry responses

Daily basis

When procuring materials, we base our actions on
PR Department
openness, fairness and impartiality, legal compliance,
Compliance Department
mutual trust, and consideration for the environment,
striving for coexistence and mutual prosperity bydeepening partnerships and through impartial
transactions.
Purchasing Department
We will also work to promote CSR and compliance withthe cooperation of our business partners.

Website and advertisements

Occasionally

Consultation and Report Desk

OccasionallyMaterial procurement activities

Daily basis

Supplier briefing sessions

Regularly

CSR procurement surveys

Once a year

PR Department
We contribute to the development of local communities
through our business, coexist with them, and emphasize
CSR Department
environmental conservation. We consider andimplement measures that meet the needs of each region
and promote trusted business activities.
Plants and offices

News releases

Occasionally

Employee-based volunteer activities

Regularly

Dialogues with NPOs and NGOs

Occasionally

Exchange in local communities,
study support, and plant tours

Regularly

CSR Department

Employee-based volunteer activities

Occasionally

Plants and offices

Coordination with relevant
government organizations

Regularly/Occasionally

Messages from the President

Occasionally

In order to meet the expectations of our shareholders,we will strive to increase corporate value throughhigh capital efficiency, fair and impartial information
disclosure, proper return of profits, and sustainablegrowth.

Planning Department

IR Department

Sales Department
Customers

We listen sincerely to our customers, provide products
and services that continue to be nominated withoutstanding technology and quality, and strive to build
long-term relationships of trust with our customers.

Quality Assurance
Department
Customer Support
Department

Business
Partners

Local
Communities

We comply with laws and regulations and strive
Government to disclose information in a timely and appropriate
andmanner. In addition, we support disaster recovery andMunicipalities reconstruction through various efforts in cooperation
with the government and municipalities.

Planning Department

Employees

We support the challenging spirit possessed by our
employees and promote the creation of a rewarding
workplace where each and every one of us stands out
and diverse human resources play an active role.

PR Department
Compliance Department
Human Resource
Department

Each department

48

C.I. TAKIRON Group Integrated Report 2021

Various employee surveys(Implementation of surveys
Occasionallypublished in-house for each categoryof job training, etc.)
Intranet

Occasionally

In-house bulletin

Twice a year

Internal reporting system

OccasionallyCounseling with occupational
physicians

Regularly/Occasionally

Health and Safety Committee

Regularly

Labor-management consultations

Regularly/Occasionally

Personal interviews with superiors/
subordinates

Regularly

Shareholders and Other Investors
By practicing IR activities based on the C.I. TAKIRON Group Corporate
Code of Conduct, the C.I. TAKIRON Group strives to formulate appropriate evaluations and aims to achieve lasting growth by building trusting
relationships with all of its shareholders and other stakeholders.

Dissemination of Information
The C.I. TAKIRON Group complies with the Financial Instruments
and Exchange Act, timely corporate disclosure regulations of the Tokyo
Stock Exchange as well as other laws and regulations to properly andfairly provide accurate corporate information to shareholders and otherinvestors. C.I. TAKIRON discloses important information through theElectronic Disclosure for Investors’ NETwork (EDINET) for the disclosureof securities reports and other financial materials in accordance with
the Financial Instruments and Exchange Act provided by the Financial
Service Agency as well as the Company Announcements Disclosure
Service (TDnet) provided by the Tokyo Stock Exchange. We also publish
information on the corporate website quickly after it is released.

Shareholders
地域社会
and
Other
Investors

Engagement with Stakeholders
We have put in place the policies below to establish systems andinitiatives to encourage constructive communication with shareholders
and all other stakeholders, including analysts and institutional investors.
(1) The Chief Operating Officer of the Corporate Planning Division willoversee matters related to communication with all shareholders.
(2) Relevant internal departments will ensure active and close cooperation to share information with other relevant departments in orderto support communication with all shareholders.
(3) C.I. TAKIRON will properly conduct investor briefings as well as surveys and other dialogues with shareholders.
(4) C.I. TAKIRON will regularly report feedback from all the shareholders
earned through the initiatives in (3) at the Board of Directors meeting and the Management Committee. Furthermore, the Board of
Directors will review the voting results and reflect the feedback fromshareholders in management.
(5) C.I. TAKIRON must never disclose material facts not yet officiallydisclosed in communications with shareholders and managers willthoroughly adhere to regulations on insider trading.

Customers
お客様Business
株主・投資家行政・自治体Employees

Partners

Government
and
取引先
Municipalities

Local
従業員
Communities

Provisionof Value
Safety andSecurity

Comfort andPeace of Mind

Resilience

Environment

C.I. TAKIRON Group Integrated Report 2021

49

Sociability Report

Customers
Quality Assurance Initiatives
The C.I. TAKIRON Group promotes quality assurance activities to fulfill the needs of customers and ensure quality in order to provide thequality able to satisfy our customers under the motto to be the best of
the best. We have given our Basic Quality Policy the meaning of “Webuild and strengthen trustful relationships with our customers and improve customer satisfaction in all our business activities,” which serves
as the core of our Quality Management System (QMS).
As for specific quality assurance activities, we facilitate contact points
as a means of communication with our customers such as a contact
form on our homepage and a toll-free telephone number to our customer service center in order to improve customer satisfaction by responding to customer inquiries and requests. In addition, each production site operates a Quality Management System (QMS) which complies
with the ISO 9001 as the core framework of our quality assurance activities (please refer to Framework of the Quality Management System.).
The system that we have built goes beyond quality assurance by firstclearly reflecting customer product feedback and needs into C.I. TAKIRON products and services before evaluating and improving products
at every stage of the product planning, design, and mass production
stages from customer needs, safety, and quality to cost and environmental performance in order to deliver new and improved products.
Furthermore, a databases stores claims about products in real timeso that everyone throughout the Group can see detailed information
about investigations into the root cause of a claim, progress toward
improvements, and measures to prevent recurrence. This database has
proven to be an effective tool for the Group by steadily reducing theclaims and claims requiring monetary processing compared to thosereceived right after our management integration (2017). (Please refer
to Changes in Number of Claims and Claims Requiring Monetary Processing.) We are also attempting to utilize this information as design
verification data when making product improvements and during new
product development.

Changes in Number of Claims and Amount of Money
Handled (compared to FY2017)
(%)

150

100

100 100

55
50

43
31

31
19

0

2017

2018

18

2019

Number of claims

2020 (Fiscal Year)

Amount of money handled

Framework of the Quality Management System
Do

Plan
Products
Planning

Customer Needs
Market Trends

Products
DesignCheck

Products
Preparation

Sales Services

Act

Customers Satisfaction
Complaints/Claims

Customers Feedback

Handling Framework for Substances Contained in Products
Customers
Business Partner A
Business Partner B

SDS
Information
about Legal
Amendments

Applicable Information

Various Amendments and Other Information(The Law Concerning Examination and Regulation of Manufacture,

Substances, the Law Concerning Pollutant Release
Various Reports (SDS, RoHS, REACH, etc.) etc. of Chemical
and Transfer, the Food Sanitation Act, etc.)

Head Office/Production Sites(Quality Assurance Department)

Browsing/Distribution of Information

Various Amendments and Other Information (RoHS, REACH, etc.)
Various Databases

Product Information

Administrations/
Industrial Associations
Business Divisions

Handling Chemical Substances Contained in Products
We have not registered with the EU REACH Chemical Compliance
Services because more than half of the products at C.I. TAKIRON are
molded products. However, C.I. TAKIRON will communicate information to customers and appropriately handle chemical substances basedon the 211 chemical substances, including the two substances publicly
announced on January 19, 2021, as well as substances of very highconcern (SVHC) that will be added in the future from our position as anintermediate in the supply chain.

50

C.I. TAKIRON Group Integrated Report 2021

We also share the proper information with our customers based on
the flow for handling procedure even for chemical substances contained in other products.
In the same way, C.I. TAKIRON will also properly handle various
chemical substances in accordance with the amended Food Sanitation
Act enacted on June 1, 2020 in addition to various other laws andregulations.

Business Partners
Material Procurement Policy
Our mission is to find harmony with the environment and provide
people- friendly products to society in all of our activities founded inplastic materials and material processing technologies.
We pursue material procurement partners who can persevere in bothbusiness and product development with us through the procurementof purchased goods, such as raw plastic, secondary and metal materials
as well as processed goods.

C.I. TAKIRON has established a CSR Procurement Policy this fiscal
year to build on the quality (technology development capabilities), reasonable prices, and delivery periods achieved in material procurement
during the last fiscal year. This new policy deepens relationships of cooperation with our business partners to achieve a sustainable society
from human rights as well as health and safety to the environmental
impact and informational security.

Material Procurement Policy
The C.I. TAKIRON Group established the Basic CSR Procurement Policy with the seven principles below.
I. Respect human rights and the labor environment.
II. Always consider health and safety.
III. Maintain and strengthen environmental efforts.
IV. Ensure product safety and quality.
V. Properly manage information security.
VI. Engage in fair and lawful business transactions.
VII. Promote CSR and actively take part in social contribution activities.
The C.I. TAKIRON Group will raise awareness about the CSR Procurement Policy in the future by providing it to each of our business partners along with careful explanations. This policy will help us build a CSR procurement supply chain together with our business partners.

I. Respect human rights and the labor
environment.
We recognize the respect for human rights and the labor environment as priority CSR issues represented largely by conflictminerals* and will further inspections of the supply chain with thecooperation of our business partners.
* Conflict minerals refers to specified materials (tin, tantalum, tungsten, and four types ofgold) from the Democratic Republic of the Congo and surrounding regions with ongoing
conflicts are referred to as “conflict minerals” seen as a problem because these specified
minerals are the financial sources of armed insurgents.

II. Always consider health and safety.
We will always consider health and safety by making every effort to comply with laws and regulations as well as lower foreseeable risks, such as the physical burden placed on all employees of
our Group and business partners.

III. Maintain and strengthen environmental
efforts.
We aim to realize a sustainable, recycling-oriented society. Asa means to this end, we will prioritize the selection of companies
with ambitious environmental conservation activities, specificallybusiness partners emphasizing carbon-neutral initiatives, the development of bio-based and biodegradable resins as well as technological development for recycling chemicals and materials while
promoting procurement of resources with a low environmental
impact.

IV. Ensure product safety and quality.
We will promote and continually improve quality assurance activities together with our business partners.

V. Properly manage information security.
We will disclose and communicate the right information at theright time while maintaining and strengthening information security measures.

VI. E
 ngage in fair and lawful business
transactions.
We will build fair and impartial business relationships foundedon the principle of competition open to all regardless of capitalties, the size of the company, business track record or other suchfactors without relying on conventional business practices. We
also aim for mutual growth while always keeping in mind theneed to build trusting relationship of respect with business partners from the stand point of both parties.

VII. P romote CSR and actively take part in social
contribution activities.
We will actively engage in social contribution and local community activities (preserving and improving the environment) as the
C.I. TAKIRON Group, while deepening cooperation with business
partners who share the values of our CSR Procurement Policy.

C.I. TAKIRON Group Integrated Report 2021

51

Sociability Report

Local Communities
The C.I. TAKIRON Group hopes to be a good neighbor to the local citizens of each community in regions worldwide where
each business establishment and production site are located. With this hope, we engage in a wide range of efforts, including
participation in various community activities and the provision of support to afflicted areas.
In addition, as a member of the community entrusted with society, we actively work to support sports promotion as well as
research institutes, organizations of the United Nations, and other bodies.

Coexisting with Communities in Areas
Around Business and Production Sites
C.I. TAKIRON had to cease or minimize some of our local community
efforts due to the spread of the COVID-19 infections. In spite of these
setbacks, our main activity results for fiscal 2020 accomplished manythings, including active participation in environmental conservation
activities in surrounding communities, beautification efforts, and local
events in addition to the harvest of local crops and donation efforts tothe local community.
We will continue these efforts in support activities in the future tocontribute to each region and assist afflicted areas.

Main Activity Results (FY2020)
Activity
Local community
beautification activity

No.

ActivityNo.

34

Volunteer activities forcommunity welfare

4

Participation in community
events and activities

4

Volunteer activities for marine
plastic pollution cleanup

2

Donations to local
communities

16

Blood drive, emergency medicalcare, and fire-fighting activities

2

Resource collection

2

Cooperation with local school
education

1

Participation in weeding
activities

2
Total

67

Progress of Activities

Cleaning Activities Around the Plant (Shiga Plant)

Cleaning Activities Around the Plant(Hokkaido Sanplus Co., Ltd.)

Cleaning Activities Around the Plant (Tokyo Plant)

Cleaning Activities Around the Plant(TAKIRON TECH CO., LTD)On-site Surveys to Check the Condition of Sagamigawa
River (Hiratsuka Plant)

Cleaning Activities on the Tsukuba-no-Sato Industrial
Park (DAILITE CO., LTD.)

Plant Tour for Local Junior High School Students(Okayama Plant)

Cleaning Activities Around the Plant Employee
Dormitories (Shiga Plant)

Black Edamame Harvesting Activity (Support for Recovery
from the Great East Japan Earthquake)(Former NIPPON POLYESTER CO., LTD.)

52

C.I. TAKIRON Group Integrated Report 2021

COVID-19 Efforts

Handle Marine Plastic Pollution

The C.I. TAKIRON Group supports the efforts of all healthcare professionals and local citizens battling the COVID-19 pandemic.
We leveraged our products by donating Polycarbonate-Plate (PC)partitions, PC face shields, and various other articles to prevent the
spread of the COVID-19 infection at medical facilities. We also contributed to the efforts of local communities by donating bottled drinks, unused masks and other such items collected from employees to hospitals
and other places in need.
We not only wanted to show our gratitude and support to all of thehealthcare professionals working on the front lines who provide medical care but also contributed monetary support in order to help the
local communities where C.I. TAKIRON has such deep ties.
The C.I. TAKIRON Group will continue to actively work with and support all healthcare professionals and local citizens in ongoing efforts toprevent the spread of the COVID-19 infection.

Plastics are economical, offer excellent moldability, and have enrichedpeople‘s lives due to many characteristics such as lightness, corrosion
resistance, and beneficial hygienic properties. In recent years, plastics
have contributed to solving social issues, such as improving energy efficiency and reducing food loss through advancement of its functions.
However, the current situation shows that proper disposal after use
has not progressed worldwide and it is estimated that 8 million tonsof plastic waste is washed away into the sea every year (Ref: The New
Plastics Economy - Ellen MacArthur Foundation), making the marine
plastics problem a serious social issue. C.I. TAKIRON has identified responding to the marine plastic issue as one of its material issues and is
working on countermeasures. We are conducting the Waterside Clean
Aid activity as a countermeasure in which employees and their families
participate in volunteer activities to clean up coastlines, rivers, lakes,
etc. which are carried out in each region.
Unfortunately, C.I. TAKIRON had to voluntarily suspend many of its
plans due to the COVID-19 pandemic in fiscal 2020. However, we willcontinue to promote this activity so that everyone who participates canexperience pollution conditions near bodies of water and address themarine plastics issue seriously.

COVID-19 Efforts (FY2020)
Donation of polycarbonate partitions

6

Donation of polycarbonate face shields, etc.

4Donation of materials to keep the shape of N95 masks forhealthcare professionals

1

Donation of plastic bottles for drinks to medical institutions

1

Donation of unused masks

1

Monetary donations

7

Materials to Keep the Shape of N95
Masks for Healthcare Professionals

Ibogawa Green Project (Yasutomi Plant)

Polycarbonate Partitions

Promotion and Development of Sports
C.I. TAKIRON concluded an official Japan swimming team sponsorship agreement with the Japan Swimming Federation (JASF) in fiscal
2015 as a way to cheer on the Japan swimming team (TOBIUO Japan).
As a provider of non-slip flooring for poolside safety and security, TAKIRON MATEX CO.,LTD. also sponsors swimming tournaments
held by the Japan Swimming Federation as
well as provides broad support of activities topromote swimming as an official sponsor of
the Japanese Para-Swimming Federation.

Ibogawa Green Project (TAKIRON TECH CO., LTD, Aboshi Plant, and Ibogawa Office)

C.I. TAKIRON Group Integrated Report 2021

53

GovernanceCorporate Governance
Basic Philosophy
C.I. TAKIRON strives to improve management efficiency, heighten transparency, and earn trust from shareholders and all otherstakeholders while enhancing sustainable growth as well as medium- to long-term corporate value.

Basic Policy
1. We will strive to rapidly disseminate information to ensure the highest level of shareholder equality as well as build an environment toguarantee every shareholder has and can properly exercise their rights.
2. We will actively cooperate with all C.I. TAKIRON stakeholders in activities to achieve the targets laid out in the medium-term
management plan from the stance of connecting success to the profit of every stakeholder.
3. 
We will disclose the information in accordance with statutory compliance as well as other information deemed necessary forstakeholders in a proper and timely manner through mediums that include the corporate website in order to engage in fair and highly
transparent management.
4. We will dene the ideal direction for the C.I. TAKIRON Group internally and externally by setting the medium-term management plan asa core of management strategies of the entire Group to build a consensus toward accomplishing the corporate goals. In addition, C.I.
TAKIRON has adopted an executive officer system to clearly separate auditing and business execution functions in governance while
the Board of Directors conducts highly effective supervision of director and executive officer performance as well as business execution.
5. We will actively engage in a dialogue with shareholders to reflect their ideas and hopes in management. In addition, C.I. TAKIRON also
actively addresses questions from shareholders and investors, such as establishing opportunities for a dialogue with shareholders andother investors, to bring understanding about its corporate management strategy and management plan.

Corporate governance framework
Corporate Governance Framework
General Shareholders’ Meeting
Elect, Dismiss
Make decisions and Supervise

Elect, Dismiss

Board of Directors: 6 Directors (of which 3 outside Directors)

Audit

Consult/Report
Proposal of important matters
Reports on business execution

Appoint/
Supervise

Audit & Supervisory Board:
4 Audit & Supervisory Board Members(of which 2 outside Audit & Supervisory
Board Members)
Audit

Nomination and Remuneration Committee

Elect, Dismiss
Accounting
AuditorAccounting
AuditsGovernance Committee

Business Execution

President
Management Committee

Compliance Committee
Medium-term Management Plan and Materiality Management Committee

Proposal of important mattersregarding business execution

Internal Audit Office
Audit

Corporate
Planning Div.

Corporate
Administration Div.

Construction
Materials Div.

Environmental
Materials Div.

High Functional
Materials Div.

4 Business Segments

54

C.I. TAKIRON Group Integrated Report 2021

Specialty
Films Div.

ProductionDiv.
R&D Dept.

Recycling
Adaptive Materials
Promotion Dept.

DX Strategy
Promotion Dept.

2020/2021 Initiatives and the History of Enhancements
Strengthening of the Corporate Governance System
C.I. TAKIRON reduced the Board of Directors by two Directors at the June 2021 General Shareholders’ Meeting to not only further the independence,transparency and fairness of management but also to more quickly adapt to changes in the management environment and swiftly make decisions.
Three of six directors are independent outside officers, which expands the ratio of Outside Directors from 38% to 50%.
Moreover, we launched a Governance Committee made up of a majority of Outside Directors as members including the chairperson as an advisory
body to the Board of Directors for the purpose of continuously enhancing the level of our corporate governance.

Restructuring of the Remuneration Plan
C.I. TAKIRON introduced a share-based remuneration system with transfer restrictions at the June 2021 General Shareholders’ Meeting in addition
to the existing stock remuneration plan (share ownership trust) linked to business performance to improve the medium- to long-term performance of〉〉〉See P57
Directors and to raise awareness about the contributions which dramatically enhance corporate value.

History of Enhancements to Corporate Governance
2021

2020

2019
2018
2017

Raised the Ratio of Independent Outside Directors (38% to 50%)
Launch of the Governance Committee
Existing Stock Remuneration Plan (Share Ownership Trust) Linked to Business Performance
Introduction of a Share-based Remuneration System with Restrictions on Transfer of Shares
Increased the number of independent outside directors (from 2 to 3, comprising more than 1/3 = 38%)
Increased the number of independent outside Audit & Supervisory Board Members (from 0 to 2)
Diversification of the Board of Directors and Audit & Supervisory
Board Members(Appointed one female director and one female Audit & Supervisory Board Member)
Appointed an Independent Outside Director to Chair the Nomination and Remuneration Committee
Introduction of the Group Executive Officer System
Strengthened Systems for Dialogue with Shareholders (Investors) (established a new department
specializing in IR)
Increase to the number of independent outside directors (1 to 2)
Establishment of the Nomination and Remuneration Committee
Introduction of a Stock Remuneration Plan (Share Ownership Trust)
Implementation of an effectiveness Evaluation for the Board of Directors (conducted every year
since implementation)

2011

Appointment of an independent outside director (1)2000

Introduction of an executive officer system
Amendment to the number of directors in the Articles of Incorporation (no more than 20 to no
more than 12)
Changes to the number of directors (17 to 9)

Composition of the Board of Directors

Independent
Outside Directors

50

%

(3)

6 Directors(5 males, 1 female)

Governance Committee
The Governance Committee not only delibrates on important governance matters but also acts as the independent special committee required inJapan’s Corporate Governance Code (Supplementary Principles 4.8.3) revised in June 2021.
Main Committee Agenda● Important governance matters

Independent
Outside Directors● Effectiveness evaluation of the Board of Directors● Material transactions or actions that conflict with the interests of the controlling shareholder

and minority shareholders**Deliberations only involve independent Outside Directors

Composition of the Committee
Committee
Chairperson

Kenichi Hatano

Independent Outside Director

Members

Kazuya Saito
Mune Iwamoto
Yoshiko Kosaka

Director President
Independent Outside Director
Independent Outside Director

75

%

(3)

4 Members

C.I. TAKIRON Group Integrated Report 2021

55

GovernanceNomination and Remuneration Committee
C.I. TAKIRON set up the Nomination and Remuneration Committee as an advisory body to theBoard of Directors with more than half of the members made up of independent outside officers inorder to heighten the independence, objectivity and transparency of the Board of Directors in thenomination of directors, Audit & Supervisory Board Members and executive officers as well as in
the remuneration of directors and executive officers. Any important matters related to nomination
or remuneration are evaluated under this committee before approval by the Board of Directors. The
Nomination and Remuneration Committee convened seven times in fiscal 2020.

Independent
Outside Directors

67

%

(2)

Main Committee Agenda●
Selection criteria for director, Audit & Supervisory Board Members, and executive officer

candidates●
Examination of independent election proposals for directors, Audit & Supervisory Board

Members, and executive officers

3 Members● Matters related to the appointment and dismissal of representative and executive directors● Remuneration policies for directors and executive officers● Examination of processes to determine remuneration for directors and executive officers

Composition of the Committee
Committee Chairperson

Mune Iwamoto

Independent Outside Director

Members

Kazuya Saito
Kenichi Hatano

Director President
Independent Outside Director

Effectiveness Evaluation of the Board of Directors
C.I. TAKIRON analyzes and evaluates the effectiveness of the Board of Directors every year and strives to address challenges discovered as a result forthe purpose of improving Board of Directors functions. The effectiveness evaluation conducted in fiscal 2020 is shown below.

Evaluation Method
1. Conduct survey for self-assessment by directors and Audit & Supervisory Board Members.
2. Exchange ideas between Directors and Audit & Supervisory Board Members based on analysis of the survey results.
3. Conduct evaluations at the Board of Directors

Evaluation Results
1. Items Improved in FY2020
A sale of shares in January 2021 helped increase C.I. TAKIRON’s presence in the stock market while increasing the number of shareholders,which further strengthened its IR activities. We also expanded debate
about medium- to long-term plans through ongoing discussions andmore comprehensive deliberations between executive officers with focus on details of the new medium-term management plan which beganin fiscal 2021.
C.I. TAKIRON appointed one new independent Outside Director at theJune 2020 General Shareholders’ Meeting as a structural reform tostrengthen corporate governance. The change increases the ratio of
Outside Directors to at least 1/3. In addition, we also appointed an
Outside Director instead of an Internal Director as the officer to chair
the Nomination and Remuneration Committee. C.I. TAKIRON also increased the number of Outside Directors to three, of six members at theJune 2021 General Shareholders’ Meeting. This change makes Outside
Directors half of the Board of Directors. In regards to diversity, we also
nominated two female officers (one female Director and one Audit &Supervisory Board Member) at the June 2020 General Shareholders’Meeting.

56

C.I. TAKIRON Group Integrated Report 2021

2. FY2020 Effectiveness Evaluation and Future Initiatives
C.I. TAKIRON received an overall positive evaluation determining theBoard of Directors functions appropriately and is effective from various
initiatives on the ratio of Outside Directors to active discussions at Boardof Directors meetings.
We will promote initiatives to improve the five items below as priority
issues in an effort to further enhance the effectiveness of the Board of
Directors.
(1) Expansion of discussions on medium- to long-term plans(2) Strengthening of the system to improve governance(3) Broader diversity on the Board of Directors(4) Building officer remuneration systems that are consistent with thecorporate strategy(5) Feedback from dialogue with shareholders (investors)

Executive Remuneration
The remuneration systems for directors and other officers (directors and executive officers excluding non-executive directors) consists of the basic
polices below, acting as a guide to fulfill the duties required of C.I. TAKIRON in the management plans and policies.

Basic Policy● We shall provide remuneration linked to medium- to long-term corporate value to realize sustainable growth.
● We shall encourage all to independently and actively take on challenges without fearing failure.
● We shall assess our competitors and set standards thought appropriate for C.I. TAKIRON in recruiting and retaining outstanding

human resources.
● We shall ensure objectivity and transparency through deliberations at Nomination and Remuneration Committee, which is made up

of a majority and chaired by outside directors.

Framework of Executive Remuneration
Director and other executive remuneration consist of fixed compensation, performance-linked remuneration, and other short-term incentives (bonuses) as well as medium- to long-term incentives (stock remuneration) as non-monetary compensation.
The estimated ratio of the various types of remuneration if all of the KPI are achieved is 61% for fixed compensation, 28% for short-term incentives(bonuses), and 11% for medium- to long-term incentives (stock remuneration)

Remuneration Distribution Ratio
Monetary

Fixed Remuneration: Approx.

61

%

Stock

Bonuses: Approx.

28%

Share-based
Share Remuneration
with
Ownership Restrictions
Trust:
on Transfer
Approx. of Shares:
Approx.

5.5 5.5%

Short-term
Incentives

Fixed Remuneration
C.I. TAKIRON determines fixed remuneration as
monthly compensation based on the role assigned
according to the performance and skills of executive
officers as well as an evaluation of the magnitude ofcontributions to management in that role.

Short-term Incentives (Bonuses)
Bonuses should raise awareness about improving
business performance each fiscal year and mustreflect the level of achievements related to annual
consolidated operating profit and net income. C.I.
TAKIRON also reflects qualitative and quantitativeevaluations of each corporate officer in the calculation of bonuses to pay at a certain time each year.

%

Medium- to Long-term
Incentives

Medium- to Long-term Incentives(Stock Remuneration)
Medium- to long-term incentives consist of astock ownership trust (performance-linked remuneration) and share-based remuneration with a restriction on the transfer of shares.
The stock ownership trust converts and pays
shares in proportion to the number of points assigned to each executive officer according to thelevel of success in accomplishing medium-term
management plans. Shares with transfer restrictions
shall have a transfer of shares in advance at a certain
period each year according to enhanced corporate
value to share in the stock value with shareholders.

C.I. TAKIRON Group Integrated Report 2021

57

GovernanceCompliance Risk Management
The C.I. TAKIRON Group is firmly maintaining and strengthening corporate compliance systems, and promoting the optimal
operation of risk management systems to provide sound and highly transparent management.

Compliance
Compliance System

Basic Philosophy
The C.I. TAKIRON Group is deeply aware of its corporate social responsibilities as a member of society to conduct corporate activities.
Our Group complies thoroughly with the relevant laws and regulations
as well as with the articles of incorporation for each company in addition to defining the C.I. TAKIRON Group Corporate Code of Conduct
for the purpose of taking action deemed suitable by social ethics.
Also, the C.I. TAKIRON Group Compliance Program has been established for the purposes of improving and strengthening the compliancesystem for following the C.I. TAKIRON Group Corporate Code of Conduct. It denes the following four items as a basic policy.
■ Basic Policy
1. Create a sound organizational culture and climate
2. Establish and maintain a proper system
3. Maintain a high level of awareness about compliance4. Fair and impartial compliance

C.I. TAKIRON Board of Directors

Chief Compliance Officer
President of C.I. Takiron

Compliance Committee

Compliance Subcommittees

Person in Charge of C.I.
TAKIRON Compliance

Persons in Charge ofCompliance atAffiliated Companies

Main Compliance Results for FY2020
Violations of laws andregulations in thesocio-economic sector

There are no such violations in FY2020.

Violations of environmental
laws and regulations

There are no such violations in FY2020.

Number of Internal Reports

44

Internal Reporting System (Hotline)

Main Activity Results for FY2020
Preparation of Preparation of systems and frameworks by persons in charge
systems andof compliance after raising awareness about the Complianceframeworks
Commitment in staff

C.I. TAKIRON and Domestic Affiliate Companies

Chief Operating
Officer of theLegal ComplianceDepartment

Audit &
Supervisory
Board Members

Attorneys at Law(External)

Business
Operating the
Hotline Service(External)

Compliance seminars (either by webinar or by viewing recorded materials)

C.I. TAKIRON
andDistributionof Domestic
harassmentAffiliate
preventionCompanies
guidebooks to all officers and employees to deter harassment
Education/
Enlightenment Training for persons in charge of harassment consultation
Chief Operating counters (webinars)
Business
Audit &
Officer of the Dissemination of compliance
Attorneys
at Law toOperating
information
all officersthe
andSupervisory
Legal Complianceemployees (4 times)
Hotline Service(External)
Board Members
Department(External)
Awareness raising about compliance
SurveysCompliance fact-finding surveys at overseas sites

58

C.I. TAKIRON Group Integrated Report 2021

Overseas Affiliate Companies

Chief Operating
Officer of the Legal
ComplianceDepartment

Business Operating
the Hotline Service(External)

Risk Management
Risk Management System

Selection and Handling Process of Critical Risks

We have put in place a risk management system and formulated Risk
Management Regulations for the purpose of reducing and preventing
losses as well as enhancing corporate value through the organizational
management of risk throughout the Group.
The Corporate Planning Department acts as the risk management secretariat and operates the risk management process each fiscal year byplacing a risk manager at C.I. TAKIRON as well as each affiliate company.

1. Surveys for risk managers (generally once every three years)	Assess the level of impact and likelihood based on a common list ofrisks created by the risk management secretariat according to thesocial landscape and risk examples.
2. Analysis/evaluation
	Collect and analyze survey results and other information about risk
via the risk management secretariat and select critical risk candidates.
3. Identification of critical risks	Identify critical risks (corporate risks or operational risks) at management workshops made up of C.I. TAKIRON executive officers.
4.	Formulation/approval of measures against risks	Departments supervising the handling of risks plan and propose
measures against risks for the next fiscal year through discussions
with the risk management secretariat, and then the risk management secretariat seeks approval from the C.I. TAKIRON Management
Committee.
5. Execution of measures against risks	Departments handling the risk handle risks based on the measuresagainst risks. For corporate risks, departments supervising risk assessment monitor the progress of those measures against risks.
6. Review of the results from measures against risks
	The risk management secretariat reports to the C.I. TAKIRON Management Committee based on the results of the measures against
risks for the current fiscal year.

Person responsible
C.I. TAKIRON: Chief Operating Officer of each division
for risk management Affiliate Companies: President of each company

Departments
supervising risk
assessment

Each C.I. TAKIRON business planning department,
plant management department, purchasing department, finance and accounting department, quality
assurance department, legal affairs department,
intellectual property department, business support
department, human resource department, and other departments designated by the risk management
secretariat

Risk management
secretariat

C.I. TAKIRON Corporate Planning Department

Departments
handling the risk

Each department of C.I. TAKIRON designated by therisk management secretariat and affiliate companies

Risk Management Operations
C.I. TAKIRON has a system to address the intrinsic risks of the Groupthrough ongoing reduction efforts in accordance with the risk management regulations. The Management Committee determines measuresagainst risk through risk identification and evaluation results for theentire Group.
The risk management secretariat operates risk management each fiscal year based on the selection and handling processes for critical risks
defined as the following.

◆ Risk Management Process (Target: C.I. TAKIRON Group)
Identification and Evaluation of Risk
Conduct
Risk Surveys

Analyze/
Evaluate Risk

Identify
Critical Risks

Determine Measures
Against Risks

Review
Gain Management
Approval

Execute Measures
Against Risks

Report toManagement◆ FY2021 Selection of Critical Risk Management Items
Risk Management Items

Risk Category

Supervising
Department

Climate change(Continued from the previous
fiscal year)

Corporate

Corporate
Planning
Department

Assessment
Department

Risk Items(1) R isks related to market and technology changes as well as
reputation due to climate change(2) R isks related to policies and laws due to climate change(3) Physical risks due to climate change

Distribution risks

Operational(1) R isks of suspended operations due to system stoppages
Business Support (2) Risks of rising distribution costs (risks of carriers refusing to pick
Department
up shipments)(3) Risks of rising distribution costs (other risks)

It Security(Continued from the previous
fiscal year)

Operational

Business Support (1) Risks related to the adoption of new digital technologies
Department(2) Risks due to a shift to cloud groupware

Operational

Legal ComplianceDepartment

Compliance and Human Rights(1) R isk of lower awareness about officer and employee compliancedue to a lack of consciousness about compliance in persons incharge of compliance(2) Risks of lower organizational productivity due to harassment(3) Risks of lawsuits due to insufficient measures against harassment

Meeting toPromoteEnvironmental
Conservation

–

–

–

C.I. TAKIRON Group Integrated Report 2021

59

GovernanceDirectors, Audit & Supervisory Board Members,
and Executive Officers (as of June 25, 2021)
Directors
Representative Director President(biographical information reduced)

Kazuya Saito

1981 Joined ITOCHU Corporation2014 Executive Officer of TAKIRON
2020 Representative Director President of
C.I. TAKIRON (current position)
Reason for nomination
C.I. TAKIRON appointed Kazuya Saito as the Representative Director President in April 2020 after serving as
the Representative Director President & COO in2019 based on his many years of service to the
ITOCHU Corporation in the chemicals department and after his appointment
as Director, Chief Operating Officer of the High Functional Materials Business,
and Chief Operating Officer of the Environmental Materials Business in 2015.
C.I. TAKIRON nominated Kazuya Saito because it can expect him to further
the expansion of business and greater profitability as the highest authority
in management business execution currently and for his continued executionof decision making and supervision of management based on his wealth ofexperience and expertise in overall business, including the overseas fields ofthe company.

Director Senior Managing Executive Officer

Takahisa Miyake
Chief Operating Officer of the Environmental
Materials Div.

1984 Joined TAKIRON
2017 Director Senior Managing Executive
Officer of C.I. TAKIRON (current
position)
Reason for nomination
Takahisa
Miyakewas appointed. Director in 2016 and Chief Operating Officer of the Corporate Planning Division in 2017 after working as theGeneral Manager of the purchasing, flooring and corporate planning departments. He has been serving as the Chief Operating Officer of the Environmental Materials Division since 2019. C.I. TAKIRON nominated Takahisa Miyake
because it can expect him to continue to execute the decision making andsupervision of management based on his wealth of experience and expertisein management and the overall business operations of the company.

Director Senior Managing Executive Officer

Akihiro Ueda
Chief Operating Officer of the Construction
Materials Div.

1982 Joined ITOCHU Corporation
2019 Director Senior Managing Executive
Officer of C.I. TAKIRON (current
position)
Reason for nomination

Akihiro Ueda was
appointed Managing Executive Officer of C.I.
TAKIRON in 2015, and Direct Senior Managing Executive Officer in April 2019and in the same year started serving as Chief Operating Officer of the Construction Materials Div. after his many years of service at the ITOCHU Corporation in the chemicals department. C.I. TAKIRON nominated Akihiro Ueda
because it can expect him to continue to execute the decision making andsupervision of management based on his wealth of experience and expertisein the chemical products field, including management experience at multiple
overseas companies, as well as the ample experience he has gained in theoverall management of the company.

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C.I. TAKIRON Group Integrated Report 2021

Director*1

Mune Iwamoto

1976 Joined Mitsui Toatsu Chemicals(current Mitsui Chemicals)2014 Director of TAKIRON (current position)2016 Outside Director of Toyo Tanso(current position)
Reason for nomination
C.I. TAKIRON appointed Mune Iwamoto as Director because it
expects him to utilize his wealth of experienceand expertise cultivated in research and development, such as the functional resin field during his long tenure at a comprehensive chemical manufacturer, and multiple posts in management at companies.
He has actively provided guidance from an independent standpoint since his
appointment as outside Director of the company in 2014, and it expects him
to continue to execute the proper decision making and supervision of management.

Director*1

Kenichi Hatano

1966 Joined Sumitomo Chemical
Industry Company Limited (current
Sumitomo Chemical)
2018 Director of C.I. TAKIRON (current
position)
Reason for nomination
C.I. TAKIRON appointed Kenichi Hatano as Director because it expects him to utilize his wealth of experience andexpertise cultivated through his involvement inmanagement of a comprehensive chemicals manufacturer in the managementof the company. In addition, Kenichi Hatano has actively provided advice from an
independent standpoint since his appointment as outside Director of the company
in 2018, and the company expects him to continue to execute the proper decision
making and supervision of management as an outside Director of the company.

Director*1

Yoshiko Kosaka

2003 Became registered attorney
2016 Joined Irokawa Law Office(currently Irokawa Legal Professional
Corporation) (current position)2020 Director of C.I. TAKIRON (current
position)
Reason for nomination
C.I. TAKIRON appointed Yoshiko Kosaka because of her high levelof expertise as an attorney and wealth of knowledge related to corporate law, and expects her to execute the proper decision
making and supervision of management as an Outside Director of the company.
Although Ms. Kosaka has not been directly involved in company management in
the past, we believe that she will be able to properly carry out her duties as an
Outside Director for the reasons stated above.
*1 Outside Director

Audit & Supervisory Board Members
Audit & Supervisory Board Member*2

Audit & Supervisory Board Member

Toshiro Okajima

Masako Osuna

1988 Joined TAKIRON
2020 Audit & Supervisory Board Memberof C.I. TAKIRON (current position)

1979 Joined JETRO (Japan External Trade
Organization)2017 Professor, Industry-University
Collaboration, Organization for
Research Support, Kanazawa Instituteof Technology (current position)
2019 Director of Hibiya Engineering, Ltd.
(current position)2020 Audit & Supervisory Board Memberof C.I. TAKIRON (current position)

Reason for nomination
After serving as
Head of the Equipment Technology Department, General Manager of the Ibogawa Plant,
and General Manager of the Aboshi Plant, C.I.
TAKIRON appointed Toshiro Okajima as an Executive Officer in 2015. He also served as Deputy Chief Operating Officer of the
Production Division starting in 2017. Since he possesses a wealth of experienceand knowledge in business and general production, the company expects him
to expects him to provide the suitable advice and checks to ensure the appropriateness of decisions made by the Board of Directors.

Audit & Supervisory Board Member

Kenji Takai
1990 Joined ITOCHU Corporation
2019 CFO of the ITOCHU Energy &Chemicals Company (current
position)2019 Audit & Supervisory Board Memberof C.I. TAKIRON (current position)

Reason for nomination
Ms. Osuna has been working for the Japan External Trade Organization (JETRO) for many years and is currently a professor,
Kanazawa Institute of Technology. Since she possesses a wealth of experienceand knowledge and high level of expertise centered on the international economy, the company expects her to provide the suitable advice and checks toensure the appropriateness of decisions made by the Board of Directors. Although Ms. Osuna has not been directly involved in company management in acapacity other than an outside officer, we believe that she will be able to properly carry out her duties as an Outside Director for the reasons stated above.

Audit & Supervisory Board Member*2

Takashi Araki

Reason for nomination
Kenji Takai is the
CFO of the ITOCHU Energy & Chemicals Company and has been involved with accounting and finance departments over his
many years at the company. C.I. TAKIRON appointed him because it expects
him to provide the suitable advice and checks to ensure the appropriatenessof decisions made by the Board of Directors through his practical experienceand knowledge in corporate management at ITOCHU Energy & Chemicals
Company based on his expert knowledge in the accounting and finance fields.
*2 Outside Audit & Supervisory Board Member

1996 Joined Aoyama Audit Corporation(current PwC Aarata LLC)
1997 Became Certified Public Accountant
2013 Head of Takashi Araki Accounting
Office (current position)2014 Corporate Auditor (Outside) of
Nippon Ski Resort Development,
Co., Ltd. (current position)2014 Representative Director of Transaction Support Co., Ltd.
(current position)2015 Became licensed tax accountant
2015 Head of Takashi Araki Tax Accounting Office (current position)
Audit & Supervisory Board Member of C.I. TAKIRON (current position)2020 
Reason for nomination
For many years, Takashi Araki has been engaged in
auditing work, initial public offering support work, financial and M&A consulting
work at an audit corporation, and also established a financial advisory company,and focused on activities centering on due diligence, stock valuation/ businessvaluation, M&A advisory functions, and corporate revitalization support. Since
he possesses a wealth of experience and knowledge and high level of expertise
related to finance and accounting as a certified public accountant and tax accountant, the company expects him to provide the suitable advice and checks toensure the appropriateness of decisions made by the Board of Directors.

Managing Executive Officers

Executive Officers

R&D Supervisor*3

Hideharu Iwasaki

General Manger of the Business Support Dept.

Tsutoshi Miki

Chief Operating Officer of the Corporate Planning Div. andRecycling Adaptive Materials Promotion Supervisor *3

Toshio Tamaki

General Manger of the Flooring and Decorative
Materials Dept.

Kenji Matsui

Chief Operating Officer of the Corporate
Administration Div.

Yukihiro Iwata

Deputy Chief Operating Officer of the Production Div.

Kenji Watanabe

Chief Operating Officer of the Production Div.

Hironori Kikuchi

General Manger of the Tokyo Plant

Yukio Hiraiwa

Chief Operating Officer of the Specialty Films Div.

Hidehiro Shima

Ryojiro Ogawa

General Manger of the Housing Materials
Business Materials Dept.

DX Strategy Promotion Supervisor and General
Manager of the DX Strategy Promotion Dept.*3

Hiroji kimura

General Manager of the R&D Dept.

Akihiko Shiraishi

Chief Operating Officer of the High Functional
Materials Div.

Takashi Yamasaki*3 As of October 1, 2021

C.I. TAKIRON Group Integrated Report 2021

61

Panel Discussion with Outside Directors

Corporate Governance and Sustainability

Mune Iwamoto

Kenichi Hatano

Yoshiko Kosaka

Outside Director

Outside Director

Outside Director

Nahoko Shimazaki
Facilitator: Chief Consultant, Consulting Business Division
Mitsubishi UFJ Research and Consulting Co., Ltd.
The business environment is changing even more rapidly than ever before. With the revision of Japan’s Corporate Governance
Code (CGC) in June 2021, every company must more readily strengthen corporate governance at the same time as pursuing sustainable growth and higher medium- to long-term corporate value. I would like to seek insight from Mune Iwamoto, Kenichi
Hatano, and Yoshiko Kosaka as three C.I. TAKIRON Outside Directors in a panel discussion about the role of an outside director,
ways of responding to management challenges directly confronting the Group today, and various initiatives used to tackle thechallenges around sustainability and ESG.

1 Recent “Evolution” and “Strengths” of C.I. TAKIRON
Shimazaki: How do you feel C.I. TAKIRON has
evolved in recent years as a corporate enterprise?
Hatano: I was appointed an Outside Director of C.I. TAKIRON three years go. During my tenure, the Group has
undergone a business management integration and othersuch structural reforms while doing a number of things tostrengthen its corporate governance, including the establishment of the Nomination and Remuneration Committee.
The new medium-term management plan defining what
the Group wants to become 10 years from now started
in fiscal 2021, which I feel is clearly ramping up from thestage of solidifying a management foundation to addressing its goal of fostering further growth.

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C.I. TAKIRON Group Integrated Report 2021

Iwamoto: I have been an outside director since before themanagement integration between Takiron Co., Ltd. andC.I. Kasei Co., Ltd. in 2014. The management integration
not only doubled sales but also expanded the Group’s global market. A merger between two companies often comeswith many difficulties in terms of growth. However, thismanagement integration merged these two organizations
over a short period of time as well as clarified the companies under the Group umbrella and a common Groupstrategy. The evolution and strength of C.I. TAKIRON is amanagement integration which has come to strategicallyresolve a variety of business issues as a corporate conglomerate.

Kosaka: I was appointed an Outside Director of C.I. TAKIRON last year. In a difficult management environment
during the COVID-19 pandemic, the Board of Directors
drafted the new medium-term management plan after
much debate.

and observes regulations with every employee engaging
in work with precision and sincerity. However, I am a little
concerned the Group is not as strong at taking major action
toward external organizations, such as a management integration, compared to current trends in the world.

Shimazaki: Could you please tell us about C.I. TAKIRON’s “strengths” and “challenges” as a corporate
organization?

Kosaka: I believe the ability to deliver a broad range of
products from those around us in everyday life to infrastructure and environmental products as well as a history ofcontributions to help resolve social issues are the strengthsof C.I. TAKIRON. A challenge that the company does haveis enhancing human and intellectual capital as a source tocreate new corporate value. In terms of human capital,
C.I. TAKIRON rolled out the Management Commitment
on Enriching Lives and is working to build a work-friendly environment and foster respect for diversity. However,this work has yet to produce clearly visible results. In termsof intellectual capital, C.I. TAKIRON is highly aware of theneed to maintain and improve technological capabilities,
but I feel a future challenge for the company will be addressing the need to deepen discussions on how to protectthese technological capabilities over the long term.

Hatano: C.I. TAKIRON’s strengths are its growth and development realized by solving social issues throughout its
century of business, which have been passed down without fail as the company’s DNA in the form of its history andtraditions. At the same time, C.I. TAKIRON is a bit conservative in some respects and struggles with a few things fromthe perspective of innovation.
Iwamoto: The strength of C.I. TAKIRON is its very
hard-working nature. Out of all the companies that I haveseen in the past, C.I. TAKIRON really takes organized action

2 Role of Outside Directors and Vitalization of the Board of Directors
Shimazaki: Japan has revised its Corporate Governance Code (“CGC”). Could you please tell us about
what role you think an outside director should play inthe organization?
Kosaka: C.I. TAKIRON is a listed subsidiary of a Group inwhich both the parent company and subsidiary companies
are listed on the stock exchange. As a listed subsidiary,
the corporate governance framework at C.I. TAKIRON toensure independent decision-making is vital. I believe it isimportant for each outside director to make decisions andtake action considering the interests and expectations of
the general shareholders. Because Outside Directors are
not involved in business execution, I see the important role
for an outside director to be offering guidance from an
objective and independent standpoint outside of the corporate culture or common company practices. By taking
advantage of the awareness and sensibilities brought by
the backgrounds of outside directors different from conventional Board of Directors members, whether gender,
age, or experience as an attorney at law, I think we create
an opportunity to dig even deeper into discussions on various matters.

Hatano: The revised
CGC requires outside
directors to contribute more strongly to
management. We allneed to truly recognize the greater duty
and responsibility that
this places on outside directors in order to properly fulfill
our role. C.I. TAKIRON is a company that has a controllingshareholder. Therefore, I think the vital role of an outside
director is to contribute to sustainable growth and the enhancement of corporate value by taking care to stay independent of management. I have extensive experience frommy many years working with labor unions to management
positions. I do my best to use this experience to provide theproper guidance about business strategies, management
plans, compliance issues, and a wide range of other matters. In addition to strengthening corporate governance, I
think we also need to support all of the executive officers
entrusted with business execution in boldly taking on challenges.
Iwamoto: The most significance duty of being one member of the Board of Directors is ensuring transparency in the

C.I. TAKIRON Group Integrated Report 2021

63

company and objectivity in debate in an effort to enhance
corporate value. The revised CGC has taken a direction
which places more responsibility than before on outside directors in the auditing as well as in the debate of mediumto long-term management plans. It is important for me towork with the other Outside Directors to make decisions
from a broad and fair perspective to fulfill my role. The responsibility of outside directors may continue to grow in
the future. Each outside director needs to use their uniquesensibilities and experience to help facilitate a Board of Directors which deliberates on matters from various points ofview, digs deeper into each matter while considering theideal form of the organization in the future as well as actual
business execution.
Shimazaki: What ingenuity or particular points ofcaution are required to better facilitate an exchangeof ideas in initiatives to vitalize the Board of Directors?
Could you also share your thoughts on how the Boardof Directors changes by ensure greater diversity?
Iwamoto: The Board of Directors had been having ongoing discussions about how to accelerate corporate growth.
As a result, we decided to introduce a Governance Committee at the end of July 2021 and have been advancing
reforms. We are also working to bring the Board of Directors closer to a body which reviews the logic of proposals
for management as best as possible while asking candid
questions about anything still unclear to discover actual circumstances and critical factors.
Kosaka: To vitalize
debate, I think it isimportant to provide
more comprehensive
information and materials as well as properly
set an agenda. Currently, we always make sure
to prepare easy-to-understand materials emphasizing thenecessary points with prior explanations. Although, I think
it would be ideal to hold these prior explanations a little
bit sooner to fully reflect the debate and exchange ideas
better in the Board of Directors meetings. The Board of Directors must also always keep in mind whether a proper
agenda has been set based on a perspective that considers the roles and duties of Directors at Board of Directors

64

C.I. TAKIRON Group Integrated Report 2021

meetings. When determining the annual schedule for discussions about the medium to long term, I think we needto move away from a period overwhelmed with matters to
discuss and find innovative ways to set specific times in theagenda for careful deliberation.
Hatano: When we have some extra time, couldn’t we go
beyond discussing just what is on the agenda to talk about
things such as current events or the best way to go aboutdeveloping core human resources for the next generation?
Moreover, I think we could strengthen the bonds between
Outside Directors, the President, and Executive Officers andheighten the effectiveness of the Board of Directors if there
was a place for us all to exchange ideas on topics fromvarious business issues to future strategies.
Kosaka: The Board of Directors and Audit & Supervisory Board have also become more diverse by increasing thenumber of women thanks to my appointment as Outside
Director and Masako Osuna’s to the Audit & Supervisory
Board. However, C.I. TAKIRON still does not have a sufficient ratio of female managers or employees from various
countries and needs to consider ways to address the problem. Modern society lives in uncertain times where anything unpredictable can happen, such as the COVID-19
pandemic. A diverse organization generally has better resilience at adapting to these uncertain times. Discussions between people who have different viewpoints increase thechance of properly handling uncertainty. I think ensuring
this diversity on the Board of Directors directly connects toenhancing corporate value.
Iwamoto: There is one concern though I think. As theBoard of Directors becomes more diverse, people with really different sensibilities and theories will have a clash ofideas at Board of Directors meetings. This will shift decisions on corporate proposals from the conventional yes or
no. This means refining the matters handled by the Boardof Directors to the really important issues. The Board of
Directors would then need to debate the various morals
and dig deep into the topic at hand. Japan still has a result-oriented atmosphere where people hesitate to speak
up. In the future, it will become necessary for Board of Director and Secretariat members to learn the skills necessary
to speak frankly, listen, accept, and discuss various ideas
and values all while trying to come to a decision in a certain
period of time.

3 Impact of Changes in the Social Environment on Management
Shimazaki: I would like to ask about the impact thatchanges in the social environment have on the management environment. What kind of relationships do
the themes from climate change and sustainability
to the COVID-19 and biodiversity touched on in therevised CGC have with business activities, and what
risks as well as opportunities accompany these newthemes?
Hatano: Companies find themselves in a dramaticallychanging business environment with major risks which include the COVID-19 pandemic, issues of marine plastics,
and IT security. On the other hand, dramatic shifts in economic systems and lifestyles also create new needs. This
provides the opportunities to develop products which canmeet the needs of a new generation or provide solutions
to the issue of plastics. In recent years, natural disasters are
becoming more severe than ever before, which demands
the preparation and expansion of social infrastructure, suchas disaster prevention and mitigation. This brings with ita huge opportunity for C.I. TAKIRON who possess many
products that can tackle these issues. I hope the Group willcontinue making efforts to confront these problems withthe perseverance to step up to the challenges of each new
generation.
Kosaka: When society finally overcomes the COVID-19
pandemic, telework as well as remote meeting and sales
options will still be used. I am sure the social gatherings
used by companies as a way to build better communication will also change. Through the COVID-19 crisis, companies have had to examine what a company needs andmake choices about work styles, sales policies and a variety
of other perspectives. I think the pandemic has also beenan opportunity for C.I. TAKIRON to think about building awork-friendly environment, including different work styles
in life after the COVID-19 For example, what is essential to
the Group? How can the company balance work hours at
its plants and offices? These are some of the many challenges C.I. TAKIRON must consider.
Iwamoto: One reason C.I. TAKIRON has been in businessas long as it has is because of its businesses with a highmarginal profit ratio. Another is the share it holds as a result of outlasting its competitors in various business sectors.
However, the domestic market in Japan will become fiercer
when thinking about the next ten years due to a declining birthrate and higher costs brought on by factors suchas climate change. We
can also expect an evenhigher number of general-purpose products
entering Japan from
China and the rest of
Asia, which means
C.I. TAKIRON muststrengthen its competitiveness now to protect its share in
general-purpose products. In fields with high added value,
C.I. TAKIRON needs to further refine and develop functional materials. This is especially true in fields the Group is particularly adept, such as human sensory which are not easily
replicated by machines and its current Artificial Intelligence(AI) which competitors cannot imitate. Development andexpansion in these fields is important. In addition, the recognition of business activities in and of itself acting as social
contribution I think will have a truly significant impact. The
combination of various plans will establish an overall singular flow for sustainability. Therein, I think the organization
has to work to systematize the strategic priority of various
efforts, such as the position of a relatively high-priority
theme of climate change initiatives.
Shimazaki: What kind of impact has the formulationof a new Group Corporate Philosophy to create a people- and Earth-friendly Future as a mission had both
inside and outside of the Group?
Kosaka: The C.I. TAKIRON Group delivers products forinfrastructure and the environment that help solve social
issues under the motto to build better daily lifestyles withfamiliar products and cultivate a prosperous and comfortable society using state-of-the-art technologies. It has also
driven sustainable management over the last 100 years. By
using words that employees are familiar with, the company is able to reaffirm its shared values and express a clear
message outside the company as well. I think this is the
purpose of a corporate philosophy. The process for establishing these messages also included a lively debate within
the company and provided a chance of us all to take another hard look at our role and value to society as well assustainability.
Iwamoto: I’d like to share one example from the debate
Yoshiko just mentioned. The words of our mission to create a people- and earth-friendly future does two things. It
first makes all of the employees feel that they work for an

C.I. TAKIRON Group Integrated Report 2021

65

outstanding company while at the same time reassuring everyone that the people who work at C.I. TAKIRON must be
nice if they are friendly to people and the Earth. Even if you
ask someone outside of the company, I think they would
tell you these words offer a very favorable impression of
the company.

Hatano: I think the sustainability initiatives at C.I. TAKIRON have come a long way compared to an ordinary
company. The Management Philosophy defines the Groupmission and C.I. TAKIRON’s commitment to society about
things like what the company will offer and contribute toeach community. The Corporate Message unifies the spiritof everyone who works within the Group as a code of conduct to realize the company’s mission. The challenge is how
to teach these values to every single person in the C.I. TA-

KIRON Group. Even if
we consider other companies, there are many
examples of organizations that have failed
to solidify their planson site and produce
results. Unifying theobjectives and spirit of every employee completely changes
the outcome of efforts. I was always careful about how toinvigorate the workplace when I was directly involved inbusiness execution. This meant putting in a lot of work tofacilitate better daily communication while talking to each
person about their role and expectations to cultivate a unified workplace. These continuous efforts can raise awareness in each person to not only help change their attitude
but also their performance.

4 Aiming to Further Enhance Corporate Value
Shimazaki: Could you please tell us where C.I. TAKIRON shows particular strengths over other companies in sustainability and ESG initiatives?

Iwamoto: I think it is a culture that values employees.
I think ESG and corporate governance management goesbeyond simply establishing and abiding by rules as a systemthat only succeeds if it fully contributes to society whilebringing results and profits through work. To accomplish
this, it is important for every employee to have pride in
their work and build human relationships. C.I. TAKIRON hasreally valued this type of atmosphere in the workplace. That
is why I think we can expect an efficient cycle expanding
quality ESG and SDG initiatives led by the managing executives.
Hatano: I feel exactly the same way. The approach is not
to do something for the purpose of ESG management, butrather connect everyone’s daily satisfaction in work to ESG,
which will then become social contributions that expand tosociety at large. I think the best foundation for this is one
where everyone recognizes this approach.
Kosaka: The company has a long history of dealing in
products that help solve social issues. The deep ties between
its businesses and sustainability are the strength of C.I. TAKIRON. I see the efforts the company has undertaken for solong up until now as initiatives overlapping what we would
call sustainability today. I don’t think C.I. TAKIRON needs

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C.I. TAKIRON Group Integrated Report 2021

to drastically transform its direction, butinstead further evolveand strengthen the efforts it has undertaken
up until now. Naturally,raising internal awareness about sustainability is important. As management, the key is breaking downsustainability into simple terms to communicate clearly inorder to find ways for sustainable management to enhance
corporate value.
Shimazaki: What do you think is required for future
expansion and higher corporate value?
Iwamoto: I would say corporate value in terms of a manufacturing company will now be assessed based on theearnings capabilities along a medium- to long-term timeaxis. Sustainability management reaffirms the benefits provided by society and the environment surrounding C.I. TAKIRON. At the same time, we have to stay fully aware ofcontributions solve social and environmental issues, especially engaging in long-term efforts that contribute throughC.I. TAKIRON businesses. Therefore, action is taken by considering a time axis starting broadly before digging deeper
and arriving at decisions, which drastically expands business
opportunities and sectors. That means taking steps to form
new growth strategies to generate operating revenue.

To increase corporate
value in this type ofmanagement environment, I think the Boardof Directors will have towork harder than everto not only ensure tangible facilities and one- to
two-year sales plans, but also improve the ability for the company to build global long-term and sales strategies as wellas accumulate and innovate intellectual property, technology
and human resources. In particular, this entails strengthening
and developing departments and human resources in chargeof analyzing the external environment as well as supporting
activities, such as assessing the business environment andcompetition over the medium and long term. In a sense, I
think the importance of the intelligence activity capabilities
of C.I. TAKIRON is higher than ever for enhancing corporate
value through sustainable management.
Hatano: I think human resources who have diverse values
and skills as well as extensive experience are necessary to
respond to global environmental issues and adapt to things
like shifts in industrial structures due to more rapid digitalization. Bringing together these kinds of diverse humanresources will offer broad and exhaustive debate to solve
problems, which will in turn help spark innovation and generate new value.

Kosaka: Everyone knows how important human resources are, but technology is also an asset of C.I. TAKIRON. It is
critical to figure out how to develop and protect both human and intellectual capital. C.I. TAKIRON is highly awareof how vital human capital is, demonstrated by its Management Commitment on Enriching Lives. In the future,
the Group needs to investigate what strategies to use forintellectual capital while adapting to the various changes
in society.
Hatano: Everyone in the Corporate Planning Division is
extraordinary with really high-level skills but I feel theytend to be too inward oriented in their work. There is no
way to really capitalize on such outstanding people if they
are not entrusted with market analysis, growth strategies
and other outward-oriented tasks. Even in ESG and sustainability activities, C.I. TAKIRON needs to build an environment where young professionals can communicate
messages with confidence about how to provide value tocoming generations and the type of society in which theywant to live.

It is encouraging to hear all of the Outside Directors come together in this panel like this to engage in a
frank discussion about such important matters. This has been a tremendous learning experience. I would
like to thank everyone very much for today.
In the last several years, the way society looks at the significance of companies has dramatically changed
and expectations are higher than ever. I really feel how extremely important it is for C.I. TAKIRON to makelarge contributions toward solving various social issues through its businesses. This panel discussion has
clearly shown the importance of honesty in corporate management for ongoing
evolution as well as the approach of C.I. TAKIRON to use the people and communication building the company as a source for generating a large amount ofvalue which connects to current initiatives and results. I am sure the company
will largely incorporate the guidance of outside directors more than ever before
to respond to societal expectations and changes. I look forward to watching C.I.
TAKIRON make even larger contributions to society in the future based on its new
corporate philosophy.
Naoko Shimazaki
Facilitator: Chief Consultant, Consulting Business Division
Mitsubishi UFJ Research and Consulting Co., Ltd.

C.I. TAKIRON Group Integrated Report 2021

67

Main Financial/Non-Financial Data (Quinquennial Data)
Financial Data

Unit: Millions of Yen
FY2016*1

FY2017FY2018FY2020FY2019Management Performance
Net Sales

75,118147,805

150,650

139,432

134,470

Operating Profit

4,339

8,363

9,080

7,372

8,511

Ordinary Profit

4,519

8,204

9,200

7,611

8,807

Current Net Income Attributable to the
Owners of Parent

2,695

6,579

6,391

13,091

5,332

Depreciation

3,201

4,896

4,533

4,682

5,378

Capital Investment

2,609

3,969

7,430

12,388

5,149

686

1,288

1,109

1,165

1,134

Total Assets

88,997141,116

138,251

144,956

142,743

Net Assets

49,43569,90974,31082,84087,367

Equity Capital

48,67868,332

72,68081,36285,707

Interest-bearing Liabilities

2,031

11,729

4,911

5,085

4,438

Accumulated Surplus

23,19022,031

26,571

36,73838,757

Cash Flow from Business Activities

6,579

9,328

9,805

11,017

4,365

Cash Flow from Investment Activities△ 2,537△ 1,575△ 9,620△ 5,922△ 2,191

Cash Flow from Financial Activities△ 1,749△ 9,160△ 9,160△ 3,115△ 4,292

Free Cash Flow

4,042

7,752

184

5,095

2,174

Balance of Cash and Cash Equivalents(End of Term)

16,04615,800

6,835

8,746

6,712

78,69897,50097,50097,50097,500

14

18

26

37

22

36.9

26.7

39.6

27.5

40.2

Current Net Income Attributable to the
Owners of Parent (Yen)

37.95

67.49

65.62

134.47

54.77

Net Assets

685.44700.99746.42835.82880.28

Research & Development Expenses
Financial Status

Cash Flow

Stock Information
Total Number of Issued Shares(Thousand Shares)
Dividends
Payout Ratio (%)
Information about One Share of Company
Stock

68

C.I. TAKIRON Group Integrated Report 2021

FY2016*1

FY2017FY2018FY2020FY2019Management Index
ROA (%)

3.0

4.7

4.6

9.2

3.7

ROIC (%)

5.7

7.3

8.1

16.0

6.0

ROE (%)

5.7

9.6

8.8

17.0

6.4

Debt-to-Equity Ratio (D/E Ratio)

0.04

0.17

0.07

0.06

0.05

Operating Profit on Sales (%)

5.8

5.7

6.0

5.3

6.3

Capital-to-Asset Ratio (%)

54.7

48.4

52.6

56.1

60.0

Overseas Net Sales Ratio (%)

4.5

15.9

15.5

15.8

16.0

Non-financial Data
FY2016*1

FY2017FY2018FY2020FY2019Social Indicators
Number of Consolidated Employees(Persons)

1,889

3,369

3,412

3,369

3,299

New Female Graduate Employment
Ratio (%)*2

27

33.3

28.6

54.5

30.8

Acquisition Rate of Childcare Leave forMale Employees (%)*2

5.0

0.0

31.0

90.6

100.0

Rate of Paid Leave Taken by Employees (%)*2

61.3

55.4

62.4

91.2

88.2

Energy Consumption Rate
(GJ/Manufacturing Ton)

12.8

13.1

13.0

12.2

12.6

Unit CO2 Emissions(t-CO2/Manufacturing Ton)

0.71

0.67

0.63

0.55

0.52

Total Waste Emissions (t)12,034

13,42813,083

13,21012,627

Water Consumption (Thousand m3)

1,114

1,174

1,176

1,053

1,000

851

897

1,004

809

801

Environmental Index

Waste Water (thousand m3)*1*2

Former Takiron Group
Non-consolidated data for C.I. TAKIRON (former Takiron Group non-consolidated data used for FY2016)

C.I. TAKIRON Group Integrated Report 2021

69

Corporate Profile and Stock Information (As of September 30, 2021)
Corporate Profile (As of March 31, 2021)

Major Shareholders (Top 10)

Trade Name

C.I. TAKIRON Corporation

Established

October 10, 1919

Incorporated

December 20, 1935

Head Office
Address

3-1-3 Umeda, Kita-ku, Osaka
530-0001, Japan(North Gate Building)

TEL

Name of Shareholder+81 (6)-6453-3700

Websitehttps://www.takiron-ci.co.jp

Capital¥15,189 million

Number of
Employees(Consolidated)

3,299

Stock Information
Securities
Code

4215

ITOCHU Corporation

55.54%The Master Trust Bank of Japan, Ltd. (trust fund)

5.60%

Custody Bank of Japan, Ltd. (trust fund)1.83%

Sekisui Jushi Corporation

1.41%

KANEKA CORPORATION

1.35%

Tosoh Corporation

1.10%

C.I. TAKIRON Employee Stock Ownership
Association

1.09%

DFA INTL SMALL CAP VALUE PORTFOLIO

1.08%

Watanabe Pipe Co., Ltd.

0.90%

RE FUND 107-CLIENT AC

0.66%

Note: The ratio of share holdings is calculated by excluding treasury stock.

Total Numberof Issued
Shares97,500,000

Number of
Shareholders

9,960

Stock ListingFirst Section of Tokyo Stock
Exchange

Foreign Persons

100

Financial Institutions

Share Unit
Administratorof Shareholder
Registry
Accounting
Auditor

Ratio of Share
Holding (%)

Treasury Stock

0.02%
Securities Firms

Other JapaneseCorporations

67.83%

1.05%

Sumitomo Mitsui Trust Bank,
Limited
Deloitte Touche Tohmatsu LLC

8.90%
9.62%
Individuals andOther Shareholders

Distribution of Sharesby Shareholder

12.58%

Main Affiliations (As of July 31, 2021)
Kansai Chemical Industry Association
Kansai Economic Federation
CLOMA*JA Packaging & Horticulture
Materials Association
Nippon Interior Association
Japan Vinyl Goods Manufacturer’s
Association

The Japan Plastics Industry Federation
JAPAN PLASTIC SHEET ASSOCIATIONNOUGYOUYOUFILM RECYCLEACCELERATION COUNCIL* CLOMA: Japan Clean Ocean Material Alliance70

C.I. TAKIRON Group Integrated Report 2021

Domestic
Manufacturing Bases
and R&D Centers

Business Sites (As of June 30, 2021)❸❸❻

List of C.I. TAKIRON Business Establishments
Head Office■ Head Office3-1-3 Umeda, Kita-ku, Osaka■ Tokyo Head Office 2-15-1 Konan Minato-ku, Tokyo❻
Manufacturing
Bases

Branches/Sales
Offices■ Sapporo Sales
OfficeR&D Centers

1 Aboshi Plant■ Tohoku Branch

3 Yasutomi Plant■ Osaka Branch

5 Shiga Plant■ Chubu Branch

4 Tokyo Plant■ Chugoku/Shikoku
Branch6 Tochigi Plant■ Kyushu Branch❻

2 Ibogawa Office■ Tokyo Branch

5

7❾

R&D Center

3

6
❻

2

❶
❶

8

❺

4
❶
9

❽

7 Okayama Plant

1❼

8 Hiratsuka Plant
9 Sano Plant

Overseas Manufacturing Bases❷❹

Affiliate Companies
Construction Materials Business

Environmental Materials BusinessHigh Functional Materials Business❶ SANWA SIGNWORKS CO., LTD.

❸ HOKKAIDO SANPLUS CO., LTD.

❼ TAKIRON-ROWLAND LIMITEDTAKIRON TECH CO., LTD.

●	C.I. TAKIRON PLUS
CORPORATION● YOKOBI CO., LTD.

❽ TAKIRON POLYMER CO., LTD.

❷	BONLEX EUROPE S.R.L. [Italy]● C.I. AGRO CO., LTD.

❾ CIK NANOTEK CORPORATION● C.I. MATEX CORPORATION● S HANGHAI C.I. KASEI TRADINGCOMPANY LTD. (SHANGHAISANPLUS PLASTIC) [China]● TAKIRON MATEX CO., LTD.

❹	PT. TAKIRON INDONESIA[Indonesia]❺ DAILITE CO., LTD.
❻ C.I. TAKIRONCIVIL CORPORATION	SHANGHAI CIK ELECTRONICS
CO., LTD. [China]
Specialty Films Business

Other Affiliate Companies● C.I. TAKIRON LOGISTICS CO., LTD.
● DAIPLA WINTES CO., LTD.
● MAVERIQ PARTNERS INC.

BONPACK CO., LTD.
	BONSET AMERICA CORPORATION[United States]
	BONSET LATIN AMERICA S.A.
[Uruguay]	SHANGHAI SANPLUS PLASTIC CO.,LTD. [China]
C.I. TAKIRON Group Integrated Report 2021

71

Head Office
530 -0001
North Gate Building, 3-1-3 Umeda, Kita-ku,
Osaka 530-0001, Japan
TEL +81-(6)-6453-3700 FAX +81-(6)-6453-3884
Cover Design
C.I. TAKIRON has its origins in remanufactured celluloid*
sheets. Using these origins as a motif, the cover design layers
deep blues with profound emotion against the dynamictranslucence and beautiful colorful patterns unique to celluloid
sheets. The profound emotion in the deep blues expresses thetremendous pride in our accumulated value over 100 years ofbusiness.
(*See P4)