CSR報告書 2021

CSR Report

2021

Contents

3
3
7
9
10

Overview of Koei Chemical
Message from the President
Corporate Business Plan and Business Strategy
Business Segments
Financial Highlights

11

Governance13

Sustainability

15

Initiatives on Materiality

15
17
19
21
22

Initiatives to Reduce the Environmental Impact
Environmental Preservation Activities
Safety and Health Activities
Quality Assurance Activities
Promoting Diversity and Inclusion —With Employees—

25

Responsible Care

26

Relationships with Stakeholders

27
28

Dialogue with Shareholders and Investors
Relationship with Local Communities

29

Third Party Opinions

30

Company Information

Editorial policy
Editorial policy
This report is intended to provide information to help many
stakeholders understand Koei Chemical’s CSR activities.
We strive to make this material clearer and more reader-friendly
by using graphs and pictures.
Reporting period
April 2020 to March 2021
(information for April 2021 and later is partially included.)Issuance
December 2021

1 ｜ CSR Report 2021

Corporate Philosophy“We aim to grow our business by mobilizing all available intelligence andenergy with prime importance on credibility and integrity.” and“We shall contribute to the development of society through providing
valuable products and innovative technology.”

Contribution to a sustainable
society
CSR Basic Policy
The Koei Chemical Group will enhance
corporate value by providing new value
through business activities based on thetechnology and credibility that it has beendeveloping until today in order to contributeto the improvement of the quality of human
lives globally. We will also actively promote
initiatives for global environmental issues
and the development of local communities.
We will perform business activities incompliance with Japanese and overseas
laws and regulations, as well as thecorporate philosophy of the Koei ChemicalGroup, while striving to perform safety,
environment preservation and quality
assurance activities to realize a sustainable
society by taking stakeholder’s concerns
into consideration.

Koei Chemical’s policy on SDGs*
Koei Chemical will contribute to a sustainable society byachieving SDGs through diverse business activities.
Sales and R&D activities
Safety and health activities
Environmental preservation activities
Quality assurance activities
Dialogue with shareholders and investors
Relationship with local communities
With employees* Sustainable Development Goals, which are adopted by the United
Nations, are globally shared issues to be achieved by 2030.

CSR Report 2021

｜2

Message from the President

Acceleration of achieving a Sustainable Society
through Chemistry
One year has passed since we changed our
corporate name to reflect our intention
to expand our business domain beyond
the conventional boundaries, and we areaccelerating our transformation to provide newvalue to the society.
In the following interview, you will find theprogress of our current corporate business plan andfuture development explained in depth, along with
our approaches to realize a sustainable society.

Representative Director & President

Providing value as a specialty chemicalcompanyＱ│

Please tell us about the impact of recent socialchanges on the chemical industry and market.

While the most recent major social change is, of course,
the global impact of the COVID-19 pandemic, theperformance of the chemical industry has generally
remained strong, as the performance of our customers in
the automobile, electronics, construction, and other fields
has not deteriorated significantly.
On the other hand, in terms of social changes from a
medium- to long-term perspective, dealing with climatechange has become a major theme in economic activities,
and the chemical industry is no exception. In particular,
the move toward stricter environmental regulations in theEuropean countries, China, and other countries is having
an impact on our business. The chemical industry has both
3 ｜ CSR Report 2021

aspects of environmental impact, such as high energy
consumption, greenhouse gas emissions, and plastic waste
problems, as well as aspects that contribute to solving
environmental and other global issues throughtechnological innovation. Although increasing costs forenvironmental measures is a business risk, responding to
the need to solve problems can lead to business growthand expansion and opportunities to contribute to society.
For example, the development of materials to reduce theweight of automobile bodies reduces the environmental
impact by improving fuel efficiency, and the use of
catalysts to improve production processes and amines toadsorb CO2 are examples of problem solving that only
chemistry can provide.
We aim to increase our corporate value by contributing
to solve these social issues and to create the economic
value in an integrated manner through the creation of
new technologies and the development of new
applications, utilizing our accumulated technologies basedon organic synthesis.

What direction does Koei Chemical aim to take inthe future and how will it develop its business?

Relationships with
Stakeholders
Third Party Opinions

Ｑ│

Please tell us about the measures you will focus on from this fiscal year
onward and the development of the next mid-term business plan.

We will work to strengthen our competitiveness by
rebuilding our core businesses and accelerate our growthstrategy by expanding new businesses. Specifically, inorder to increase the added value of our core businesses,
we will develop new applications for amine and pyridine,
which are our existing products, and strengthen ourcompetitiveness through productivity improvement andstreamlining measures.

CSR Report 2021

Company Information

This fiscal year will be the final year of our three-year
corporate business plan, “Transformation KOEI.” The
plan’s policy is to create the future of Koei Chemical forthe next 100 years by strengthening our competitivenessby rebuilding core businesses and expanding our businesswith new products.
Looking back over the two years up to FY2020, theaction plans for each of the themes set forth in thepolicy—accelerating the development of new products,
strengthening existing core businesses, capital investment
plan, and improving efficiency in the business processes—
shows steady progresses, although the degree of progressin some projects have been shaky due to changes in thebusiness environment caused by the Covid-19 pandemic.

Responsible Care

Please explain the progress of the corporate business planand the outlook for the final year of the plan.

Initiatives on Materiality

Ｑ│

Sustainability

Restructuring of core businesses andexpansion of new businesses

In terms of accelerating the development of new
products, the development of urethane-related products,
which are positioned as our next-generation products, hasbeen slightly delayed due to the time required forevaluation by customers. However, our pharmaceuticalintermediates business had a solid progress, resulting in its
employment in large-scale overseas projects and new
projects for the Japanese market. In addition, we
introduced a stage-gate system for progress management
in order to strengthen our research management
capabilities.
In terms of strengthening existing core businesses, weare rebuilding existing manufacturing plants to improve
productivity and enhance competitiveness. Looking at
business performance, pharmaceutical-related demandremained strong, including demand for pharmaceuticalintermediates and raw materials for coronavirus drugs.
As for the capital investment plan, the construction of
the new CM IV multi-purpose plant and the restructuringof existing plants are being progressed as planned.
Construction of CM IV began in March 2021, and is
progressing without delay toward the start of operationsin September 2022.
As for the reviewing the business processes, we aremaking improvements through the promotion of digitaltransformation (DX) projects in the four areas of plants,
R&D, SCM, and back office to increase the added value of
our operations.
Overall, we can say that the progress of the action planis generally on track.
In terms of financial performance, although we wereable to post profits in excess of the plan in 2019 and2020, in FY2021, in addition to a decrease in revenue due
to a change in revenue recognition in accounting
standards, the timing of the shut-down maintenance at
Sumitomo Chemical’s Chiba Works will be changed fromspring to winter, and our shut-down maintenance will also
be carried out twice a year only for this fiscal year. As
lower capacity utilization rate will cause a temporary
decrease in sales and profits, we are likely to experience a
shortfall in our performance targets for the final year of
the current corporate business plan. However, we believethat this will be a temporary situation and we will be able
to recover to a new growth trajectory from FY2022
onward, as our new CM IV plant will start the operation.

GovernanceThe chemical industry entered the era of petrochemicals in
the 1960s, and many chemical companies supplied
petrochemical products as materials, playing a part in thegrowth of the Japanese economy. In the 40 years since the1980s, the industry has shifted to specialty chemicals,
which provide functional chemicals based on advanced
chemical technology, and the business model that wasonce centered on petrochemicals has changed
dramatically. The shift toward specialties that provides new
materials, such as electronic materials and pharmaceuticalintermediates, will continue in the future, and the demand
for the new materials will continue to increase.
In the midst of these trends, our company, which islocated upstream in the supply chain, aims to grow as abusiness partner that proposes the solutions to customers’
manufacturing and to the problems that they want to solve.
As our strength is speedy and responsive customer
services, we will focus on proposals that support thecreation of value for our customers, and promote oursolution businesses that provides custom synthesis andprocess technologies. The change of our company name in
October 2020 shows our will to leap beyond theframework of the “kagaku kogyo” (chemical manufacturing)and to create a challenging corporate culture that proactively
caputures business opportunities. While we will basicallycontinue with the two pillars of new businesses based on our
own technologies and custom synthesis businesses that meetcustomers’ needs, we will seek for the possibility of
expanding our businesses and business domains throughM&As and business alliances. And we will also accelerate ourefforts to proactively introduce knowledge from outside thecompany through open innovation.

Overview of Koei ChemicalＱ│｜4Message from the President

In the new business domains, we will focus on thedevelopment of urethane-related products using our own
technologies and the expansion of applications for ionicliquids.
In the custom synthesis business, in addition to actively
developing catalyst-related products and pharmaceuticaland agrochemical intermediates, we plan to strengthen
our collaboration with the Sumitomo Chemical Group
companies. We believe that the pursuit of synergies with
the Sumitomo Chemical Group will make a significant
contribution to the advanced utilization of a series ofmulti-purpose plant, including CM IV, which is currently
under construction.
Moreover, to further improve management efficiency,
we will deepen and accelerate the improvement of ourbusiness processes (DX Project), introduce new management
indicators such as ROIC and CCC(CashConversion Cycle) thattake into account balance sheet efficiency, and further
accelerate human resources development.
In the current fiscal year, we are developing our next
corporate business plan, which will start in FY2022. Under
the current corporate business plan “Transformation KOEI,”
which would called in modern terms “KX,” we believe thatthe existing growth strategy is in the right direction, andwe will focus on further speeding up the process. The
concept of KOEI 2021 “Handing down and Challenging”
continues to be important to us.
In the next corporate business plan, we will accelerate
our efforts, including the upgrading of our businessportfolio, while continuing the concept of growth throughthe restructuring of our core businesses and the expansionof new businesses. In addition, we will be more consciousof contributing to social issues through our business, andwe will make clearer statements than before about
promoting sustainability and strengthening corporate
governance. We are now in the process of formulating thenext corporate business plan through in-depth discussions
such as proposals from general managers, discussions at
various projects, and review meetings by executives, whichlead to the employees’ direct engagement.

Proactive imformation offering andtwo-way communication

Ｑ│

What are your thoughts on the realization of asustainable society and how will you take on this task?

We have been contributing to the development of society
through our business activities, based on our Corporate
Philosophy: “We aim to grow our business by mobilizing
all available intelligence and energy with prime importanceon credibility and integrity.” and “We shall contribute to
the development of society by providing valuable products
and innovative technology.” As a chemical manufacturer,
we have been striving to ensure safety, health, theenvironment, and quality throughout the entire life cycle

5 ｜ CSR Report 2021

of chemical products, and have been focusing on
responsible care activities to earn the trust of society more.
We believe that our efforts to realize a sustainable society
by promoting ESG and CSR management and responding
to the SDGs themes are in line with and an extension ofthese traditional concepts and activities.
From this perspective, we have set KPIs and organizedthese directions in order to share them company-wide andto communicate them to external stakeholders.
The Sumitomo Chemical Group has identified the sevenmaterial issues (contribution to reducing environmental
impact, contribution to solving food issues, contribution tosolving healthcare issues, contribution to ICT innovation,
promotion of technology innovation and research anddevelopment, initiatives for digital transformation, andpromotion of diversity and inclusion). This time, throughdiscussions in a company-wide cross-sectional project
structure that includes young people, we have established
our KPIs for these seven items, which will serve as indicators
to measure the progress of the Company’s efforts (pleaserefer to page 14).
We will contribute to the realization of a sustainable
society by accelerating our efforts to address the material
issues in a company-wide, cross-sectional manner basedon the KPIs.

Ｑ│

Please explain your efforts to strengthen
corporate governance.

In June 2021, the Corporate Governance Code was revised
to require a higher level of governance especially forcompanies in the Prime Market in the new market
classification of the Tokyo Stock Exchange. Although weare planning to shift to the Standard Market, we areaware that we need to ensure the independence andtransparency of our management and that a higher levelof governance is required since we are listed but theparent is Sumitomo Chemical. Based on this recognition,
the Board of Directors has been composed of nine
members since June 2021, with outside directors
accounting for one-third of the total. At the same time,
we introduced an executive officer system to separate themanagement supervision function from the businessexecution function, speed up decision-making, and ensure
the mobility of business execution.
This reorganization is expected to further strengthen
the character of the Company’s Board of Directors as amonitoring board and contribute to improving theeffectiveness of governance. In addition, with thedelegation of duties from the Board of Directors to the
Executive Officers underway, the Board of Directors is now
able to focus on discussions on important issues andengage in a more active exchange of opinions than everbefore.

Overview of Koei Chemical
Governance
Sustainability
Initiatives on Materiality
Responsible Care

Please give us your message about building
relationships with stakeholders.

Company Information

CSR Report 2021

Third Party Opinions

In last year’s CSR Report, I stated that we would value twoway communication to achieve co-existence and coprosperity with all our stakeholders, including
shareholders, investors, customers, business partners, local
communities, and employees and their families. For
employees who support the development of the Company
and aim to grow together with us, I have called on themto pursue the best performance through professionalism,a proactive attitude, and teamwork as a guideline for their
daily work. All of these are ideas that I would like tocontinue to cherish, and I would like to repeat them in our
messages.
Recently, we have been hiring people to secure theoperation of the new CM IV plant to strengthen R&D
activities, and we are also hiring experienced staff incertain areas. The number of young employees has
increased by about 50 in the past year. In the future, it will
become increasingly important to educate new personnel
to acquire a high level of expertise and to strengthen the
managers’ management skill.

At the same time, it is important for all of us to work
together to create an open working environment where
each employee can fully demonstrate his or her abilities
and cut the mustard in any position.
To our shareholders and investors who support ourbusiness, we will strive to further improve our businessperformance and meet their expectations by increasing thereturn of profits and expanding our corporate value. In
addition, we will further focus on investor relations
initiatives, such as holding financial results briefings, as anopportunity for investors to gain an understanding of ourbusiness and growth strategies and to hear opinions andrequests regarding management.
Because we are a B2B company, we do not have directcontact with general consumers. For this reason, we
recognize that we need to make further efforts to convey
our corporate image through proactive dissemination of
information and messages and interactive communication.
I would like to ask all of our stakeholders to pay close
attention to the future challenges of Koei Chemical and tocontinue to support us for many years to come.

Relationships with
Stakeholders

Ｑ│｜6

FY2019-2021 Corporate Business Plan and Business Strategy

Progress of the FY2019-2021 Corporate Business
Plan and Business Strategy
FY2021 is the final year of the current Corporate Business Plan, and we have set targets for net sales of 20 billion yen andoperating profit of 2 billion yen. However, the current forecast is for net sales of 16.4 billion yen and operating profit of 0.5
billion yen, a decrease in both sales and profits.
This is mainly due to the fact that sales of next-generation products will be postponed until FY2022 or later, and thatthe recovery of demand for some existing products, such as electronic materials-related products, optical materials-related
products, and agrochemical intermediates, has been delayed. In addition, there are special factors such as a significant
decrease in the number of operable days due to the change in the timing of shut down maintenance, which are scheduled
twice in FY2021, in May/June 2021 and February/March 2022, respectively.
Although the business environment in FY2021 will be even more severe than before, we are steadily carrying out theimportant tasks set forth in the current Corporate Business Plan. In addition, as a new initiative, we have positioned theacceleration of research and development through the introduction of stage-gate management, the promotion of the DX
strategy, and the pursuit of synergies with the Sumitomo Chemical Group as our business growth strategies, and we willfurther accelerate the improvement of management efficiency and make a concerted effort to achieve an early recovery ofbusiness performance.

Corporate Business Plan
Corporate policy
Proactive investment
Expand business through new products(accelerate the development of
next-generation products)

Strengthen competitivenessof existing businesses

Expansion of business and profit

Expansion of business and profit

Creating the future of
Koei Chemical
Improvement of business processes
High-value-added operations
Foundation

Maintain safe and stable operations,ensure full and strict compliance, and secure human resources

Progress summary
Application
StatusOverview of progress
Proceeding with aggressive development of applications and patent applications for polyurethane
Next-generation△
catalysts underway; customer evaluations delayed
products❶ Large-scale project for overseas market
	
Although sales postponed until FY2022, orders have been received and production will start in the
Acceleration of Pharmaceuticalsecond half of FY2021◎
intermediates
new product❷ New project for domestic market
development
Trial production in FY2020, commercial production scheduled in FY2021
Metallocene catalyst ◎Successful entry into new markets for overseas users
Products using gas-phase
New themes to be set in 2020−
process development
Strong sales for condensers; sluggish sales for high-grade semiconductors, but expecting demand to
Electronic materialsrelated products △~〇 increase in the future
Optical materials-related products △Focus on development of new applications despite sluggish demand due to intensifying competition
Strengthen
Pharmaceuticalintermediates
Strong demand for tuberculosis drugs and other pharmaceutical intermediates〇
existing❶ Agrochemical intermediates for Chinese users
businesses
Decreased sales volume and intensified cost competition
Agrochemical△~〇intermediates❷ Agrochemical intermediates for North American users
Although it took time to register final products, we expect demand to increase in the future❶ CM IV construction progress
Construction started in March 2021, operation to start in September 2022 (as planned)
Capital investment plan〇
❷ Plant partial reconstruction
Ongoing (review of overall plan)
Improvement of business processes
Implementing high-value-added operations by promoting DX strategy〇

7 ｜ CSR Report 2021

Overview of Koei Chemical

Business growth strategy
Growth strategy

・ Development of new applications for aminesand pyridines
・ Strengthen competitiveness through drastic
rationalization
・ Business alliances

Strengthen
competitivenessof existing corebusinesses= ● Development of new businesses

based on proprietary technologies

Expandnew businesses

・ Low-temperature curing catalysts for polyurethane・ Expansion of ionic liquid applications

Proactive investment

・ Catalyst-related business such as metallocene catalysts
・ Pharmaceutical and agrochemicalintermediates
・ Strengthening collaboration with Sumitomo
Chemical Group

Existing plants= Partial reconstruction
Amine plant

Corporate business plan
capital expenditure: 15 billion yen

Sales scale (existing plants):
10 billion yen
Pyridine plant

Formalin plant/
utility

Strengthening of multi-purpose plants
Sales scale (CM I + II + III + IV)(CM series) = Expansion of growth business 5 to 6 billion yen ➡ 11 billion yen
CM I
1-5 m³ series

CM II
10 m³ series

CM III
10 m³ + 3-5 m³
seriesCM IV
10 m³ series

Sustainability● Aggressive development ofcustom synthesis business■Partial reconstruction ■New construction

Governance● Increase added value in corebusinesses

Transformation KOEI

Initiatives on Materiality

R&D❶ Strengthen R&D❷ Status of R&D● Personnel reinforcement and training
Total number of employees: 53 (FY2017)

Up 14

67 (FY2021)

New graduate hiring: 10 in April 2020, 8 in 2021, 5 in 2022 (planned)

Introduction of stage-gate management
Strengthen resource allocation to priority themes● Further acceleration and deepening of digitization

Pursue synergies with Sumitomo Chemical Group❷ Pursue new custom synthesis businessPetrochemicals & Plastics Sector, Energy & Functional materials
Sector, IT-related chemicals Sector, Health & Crop Sciences Sector

CO2 emissions

・ Researchexchange

・ Procurement of
raw materials

Chemical Group in progress

rationalization and stable procurement of catalysts
Existing products Promote=> Rationalization of main products in progress

Products using
Introduce new products and explore continuously
gas-phase
New product=> Decided to introduce new products in the first half of theprocess
fiscal year, and will continue to explore new products indevelopment
cooperation with sales staff

Further improvement of management efficiency● Deepen and accelerate business processes renovation project

Advanced useof CM plants

Collaboration for the supply of electricity and steam from
Sumitomo Chemical (Chiba Works)’s newly built facilities
Pursuing the possibility of developing new applications
Improve efficiency of procurement operations through theSumitomo Chemical Group network

・ Accelerate DX projects in manufacturing, R&D,
supply chain , and sales/indirect operations
・ Strengthen efficient production and inventory management● Introduce management indicators that take into accountnot only profit and loss but also balance sheet efficiency

Company Information❸ Others
・ Reduction ofStrengthen competitiveness of large pharmaceuticalPharmaceutical intermediates and expand new custom synthesis business=> Rationalization and synergy themes with Sumitomointermediates

Koei Chemical❶ Expand existing products

Petrochemicals & Plastics Sector, IT-related Chemicals Sector=> Joint research with universities is underway

Rationalization of existing amine products
Catalyst related Expansion of new customers and new products suchas organometallic catalysts
products=> Commercial production of new large-scale products

Third Party Opinions

Sumitomo Chemical Group

Development of new amination technology

Relationships with
Stakeholders

Electronic lab notebooks and connection to various devices
Introduction of chemical reagent management system (April 2021)
Effective use of accumulated data

Customsynthesis
business

Amine products

Responsible Care

● Strengthen research management

Functional
products

Polyurethane Practical application of low-temperature curing systems=> Implement improvements for each user and each issue,
related products
and aim for commercialization

・ Improve return on invested capital (target 8%, exceeding WACC)
・ Shorten the cash conversion cycle (target less than 100 days)● Accelerate human resources development

Strengthen cooperation with Sumitomo Chemical Group companies
to further improve management efficiency

CSR Report 2021

｜8

Business Segments

Fine chemical business (2020)
Revenues for the pharmaceuticals/agrochemicals related products increased due to steady demand for pharmaceuticalintermediates for Europe and sales of raw materials for COVID-19 treatment, despite a decrease in shipments of agrochemicalintermediates. In the functional chemicals, although shipments of electronic materials-related products and catalyst-related
products increased, sales of optical materials-related products decreased significantly. In terms of other products in this finechemicals segment, a significant reduction in outings due to COVID-19 affected the domestic demand for printing ink-related
resins and additives.
As a result, net sales of this segment amounted to 15,356 million yen (down 1.0% YoY), and operating profit amounted to1,409 million yen (down 20.0% YoY).
Net sales (million yen)
■ Pharmaceuticals and agrochemicals■ Functional chemicals ■ Other

15,518Rate of change

Proportionof sales

6,808

15,356
1,805

2,202

−1.0%

6,766

87%

6,507

6,784

2019

2020 Fiscal year

ionic liquids(KOELIQ®)

AminesPyridines

Application

Pharmaceuticals, agrochemicals,solvents, adhesives

Pyrazines

Application

Pharmaceuticals, agrochemicals

AminesApplication

Surfactants, polymers,
photographic agents,
Pharmaceuticals, agrochemicals,
paintsOperating profit (million yen)
1,761
Rate of change−20.0%

2019

1,409

2020 Fiscal year

Chemical products business (2020)
Revenues for polyol alcohols decreased due to a significant decline in demand related to paints, resins, and other products inJapan caused by the COVID-19, as well as the termination of sales of some resale products.
As a result, net sales of this segment amounted to 2,233 million yen (down 25.8% YoY), and operating profit amounted to
75 million yen (down 19.0% YoY).
Net sales (million yen)
■ Polyol alcohols ■ Other

3,010
270

Proportionof sales13%

Rate of change−25.8%

2,739

2,233
230

2,002
Polyol alcohols

2020 Fiscal year

2019

Operating profit (million yen)
93
Rate of change−19.0%

2019

Formalin

Formalin

Application

Adhesives, synthetic resins, paints,
inks, lubricants, plasticizers, etc.

Polyol alcohols

Application

Paints, inks, lubricants, plasticizers

752020 Fiscal year

*The formalin business, which was previously included in the chemical products segment, is included in the fine chemicals segment from FY2020 on. As a result, net sales of 413 million yen andoperating loss of 84 million yen for the previous fiscal year in the formalin business have been reclassified from the chemical products business to the fine chemicals business.

9 ｜ CSR Report 2021

Financial Highlights

Operating profit
Operating margin

17,27818,14418,30918,52817,589

1,402

1,527

Ordinary profit (Millions of Yen)
2,016

10.0

1,854

6.4

1,678

1,703

8.4

8.4

8.1

Overview of Koei Chemical

Operating profit (Millions of Yen) /Operating margin (%)

Net sales (Millions of Yen)

1,390

1,361

1,484

2016

2017

2018

2020 Fiscal year

2019

2017

2018

2019

2016

2020 Fiscal year

29,202

29,32329,80220192020 Fiscal year

Shareholders’ equity ratio
ROE

32,058

66.6

68.7

70.5

68.8

4.9

7.6

8.6

2019

2020 Fiscal year

Initiatives on Materiality

1,112.47

2018

Shareholders’ equity ratio (%) /ROE (%)

Total asset (Millions of Yen)

Net income
Net income per share2017

Sustainability

Net income (Millions of Yen) /Net income per share (Yen)2016

Governance

1,169

60.4

23,969196.45232.03320.6032.1

378.51
5,441

2016

960
2017

2018

8.1

1,568

1,851

2019

2020 Fiscal year

2016

2017

2016

2018

2019

2017

2020 Fiscal year

2016

2018

2017

2018

2019

Responsible Care

1,135

2020 Fiscal year

18,14418,30918,52817,589Operating profit

(Millions of Yen)

1,402

1,527

1,169

1,854

1,484

Ordinary profit

(Millions of Yen)

1,390

1,703

1,361

2,016

1,678

Net income(Millions of Yen)

1,135

5,441

960

1,568

1,851

Total asset

(Millions of Yen)

23,96929,202

29,32329,802

32,058

Total shareholders’ equity (Millions of Yen)

14,487

19,46020,131

20,99722,066

Free cash flow

(Millions of Yen)

△440

5,126

△1,730△1,454△1,985

ROE

(%)

8.1

32.1

4.9

7.6

8.6

Payout ratio

(%)

21.5

6.3

30.5

25.0

26.4

CSR Report 2021

Company Information

17,278

Third Party Opinions(Millions of Yen)

Relationships with
Stakeholders

Net sales｜ 10

│ Governance │In order to respond to the expectations of stakeholders, we strive to establish and operate aneffective corporate governance system and continuously strengthen and improve the system.

Initiatives to strengthen the corporate governance system････････････････････• Established the Nominating Committee and the Remuneration････････････････････• Introduced the Board of Directors effectiveness evaluation• Transitioned to a company with an Audit & Supervisory Committee････････････････････• Appointed a female Director• Established Outside Director Session････････････････････• Increased the number of Directors who are Audit &････････････････････• Introduced an executive officer system• Achieved a ratio of independent Outside Directors of 1/3 or more

Committee as advisory bodies to the Board of Directors

Supervisory Committee Members (from three to four)

Basic policy on corporate governanceIn order to perform fair corporate activities, we strive tooperate an effective corporate governance system andcontinuously strengthen and improve the system. In terms ofour business management system, we have established theBoard of Directors and the Audit & Supervisory Committee,
as well as the Internal Control Committee, the Risk Control& Compliance Committee and other necessary committees,

Corporate governance system

Outline chart of corporate governance system
General Meeting of Shareholders
Election anddismissal

Accounting
AuditorCooperation

Election anddismissal

Election anddismissal

Audit & Supervisory
Audits, etc.
Committee

Board ofDirectors

Directors who are Audit &Supervisory Committee Members
Audit & Supervisory
Committee Member: 1
Outside Audit & Supervisory
Committee Members: 3

Accounting
auditInternal Control &Audit OfficeInternal
audit

Outside Director Session
Internal Directors: 6(Advisory committee to theOutside Directors: 3 Reports
Board of Directors)
Election, dismissal,
and supervision

Committees

Executive Officers:
8Departments andaffiliated companies
Plants, R&D division,
Sales and Marketing division,back office departments, etc.

11 ｜ CSR Report 2021

(Advisory committee to theBoard of Directors)

Promotion,
education,
andmanagementof activities

Risk & Compliance Committee

Management
Committee

Remuneration Committee

Responsible Care Committee

Business
executionsystemCooperation

Reports Nominating Committee

Internal Control Committee

In accordance with the resolution passed at the 155th
Ordinary General Meeting of Shareholders held on June24, 2016, Koei Chemical transitioned from a company
with a board of corporate auditors to a company with anaudit & supervisory committee. By establishing the Audit &Supervisory Committee, the majority of which are outside
directors, and through the appointment of several outside
directors, the supervisory function of the Board of Directors
has been further strengthened, leading to the further
enhancement of our corporate governance system.
In addition, in order to further strengthen the
supervisory function, three outside directors are registeredas Independent Officers with the Tokyo Stock Exchange.

which are intended to supplement and reinforce thefunction of the Board of Directors. Our businesses are being
operated under the supervision of these organizations. We
also endeavor to enhance corporate value through efficientmanagement in pursuit of the best possible corporate
governance.

Overview of Koei Chemical

Compliance

Governance“Earning the trust of society as we pursue our business activities” has been positioned as thebasis of Koei Chemical management. In order to obtain the trust of society, observation of laws,
regulations and social ethics (compliance) is essential.
We have prepared the Compliance Manual to familiarize officers and personnel withcompliance. This manual has been revised as needed in response to the amendment of laws andregulations.

Sustainability

Speak-up system

Initiatives on Materiality

We have established a whistle-blowing hotline that allows officers andpersonnel to report compliance violations or the risk thereof if theydetect the occurrence inside Koei Chemical or an affiliated company(speak-up system). We use sufficient caution with respect to the privacyof whistle-blowers and consulters so that they will never be treateddisadvantageously on the grounds of having made a report/consultation
under this system.

Enlightenment with the company newsletter

Responsible Care

For the purpose of raising the awareness of officers and personnel
regarding compliance, Compliance News is posted in the Company’s
newsletter, which is published twice a year. This reader-friendly article
mainly discusses topics that are closely related to personnel with the useof illustrations and graphics.

Relationships with
Stakeholders

Message from Outside Director

CSR Report 2021

Company Information

Outside Director(Audit & Supervisory
Committee Member)

Third Party Opinions

Hideo Higashi

It has been five years since I assumed the position of Outside Director (Audit & Supervisory
Committee Member) following the transition to a company with an Audit & Supervisory
Committee.
I recognize that my role as an Outside Director is to contribute to the sustainable growthof the Company and the enhancement of corporate value over the medium to long termfrom a broad and objective perspective, with an eyes on the outside from the inside,
without being bound by the common practices within the Company. In addition, the Audit& Supervisory Committee, as an independent body, has the responsibility to ensure thesound and sustainable growth of the Company and contribute to the establishment of ahigh-quality corporate governance system that meets social responsibilities by auditing theexecution of duties by the Directors.
With this sense of mission in mind, I will continue to work diligently to meet the
expectations of our shareholders and other stakeholders to the best of my ability.

｜ 12│ Sustainability │Koei Chemical is promoting sustainability activities with the aim of contributing to realizing a sustainable
society through business while achieving our own sustainable growth. We are working on a company-wide
project system to contribute to the resolution of material issues in the international community throughthe achievement of the Sustainable Development Goals (SDGs).

Approach to sustainability and important issues addressed as management
We have to date contributed to the development of society
through our business. In addition, as shown in the vision of
the Sumitomo Chemical Group (Figure 1), we aim to create
economic value and social value in an integrated manner(harmony between the individual, the nation and society),and to achieve sustainable growth and a sustainable
society. We will advance our sustainability based on ourmanagement philosophy and ideas.
As a member of the Sumitomo Chemical Group, weshare the material issues to be addressed as management
priorities (Figure 2) set by the Sumitomo Chemical Group. As
material issues (materiality) for sustainable value creation,
we have established material issues for social value creationand material issues for future value creation. We haveclassified four items—reduction of environmental impact,
including efforts to address climate change, food issues,

healthcare, and ICT innovation—under material issues
for social value creation, while categorizing technology
innovation and research and development, digital
innovation, and diversity and inclusion as material issues
for future value creation. Furthermore, regarding the items
that serve as the foundation for continuing our business—
occupational safety and health, operational safety anddisaster prevention, product safety and quality assurance,
respect for human rights, promotion of employees’ wellbeing, compliance, and anti-corruption—we will continue
to work on them as management priorities.

Koei Chemical KPIs
The Company has established key performance indicators(KPIs) to manage and disclose the progress of its efforts
to address materiality (material issues) for the sustainablevalue creation of the Sumitomo Chemical Group, and topromote dialogue with internal and external stakeholders
in order to enhance and accelerate its efforts. In order to
set these KPIs, a company-wide cross-sectional project(Figure 1) The vision of the Sumitomo Chemical Group
Benefiting
Society at large,
not just Our Own
Interests

Benefiting
Society(Rita*)Creating Social ValueContributing to realization ofsustainable society

Enhancing
Corporate
Value

Scope of
Value Creation
Creating Economic Value

Sustainable growth of business

was established with the participation of all divisions.
As COVID-19 spreads across the nation, the project was
discussed at the Chiba Plant, the Tokyo Office, and at home
via online meetings (figure 3: a scene from the project
meeting), and in September 2021, a decision was made ata Management Committee attended by management.

(Figure 2) Material issues to be addressed as management priorities
Material Issues for Sustainable Value Creation
Material Issues forSocial Value Creation

Material Issues for
Future Value Creation

Contribution to reducing
environmental impact

Benefiting
Ourselves(Jiri*)* in Japanese(Figure 3) A scene from the project meeting• Mitigation of climate change• Contribution throughproducts and technologies• Efficient use of energy and resources• Contribution to the recycling ofplastic resources

Contribution tosolving food issues
Contribution tosolving healthcare issues

Promotion oftechnology innovation andresearch and development
Initiatives for
digital innovation
Promotion ofdiversity and inclusion

Contribution to ICT innovation

Foundation for Business Continuation
Occupational safety and health, and operational safety and disaster prevention
Product safety and quality assurance Respect for human rights
Promotion of employees’ well-being Compliance Anti-corruption

13 ｜ CSR Report 2021

Overview of Koei Chemical

For technical innovation and research and development,
we set new product sales ratio and accumulated amountof streamlining as KPIs, and for digital innovation, we set
evaluation of digital maturity as a KPI. For the promotionof diversity and inclusion, we have set “ratio of female
employees to new graduates hired: 20% or more” and“employment rate of people with disabilities: 2.5% ormore” as KPIs.
Going forward, we will manage progress based on the
KPIs we have set, disclose them on a regular basis, andpromote dialogue with internal and external stakeholders.
Koei Chemical will continue to accelerate its contribution
to the realization of a sustainable society.

Governance
Sustainability

Regarding the reduction of environmental impact, wehave set “CO2 emissions (Scope 1+2)” as a KPI, aiming
for a 50% reduction from the 2013 level by FY2030.
In addition to this, we have set improvement of energy
consumption intensity as a KPI. In addition, we have set,
as KPIs, “sales of agricultural chemical raw materials andintermediates” for our contribution to food issues; “salesof pharmaceutical raw materials and intermediates” for ourcontribution to the healthcare field; and “sales of electronicmaterials and related products” for our contribution to ICT
technological innovation. We will contribute to resolvingsocial issues by developing and supplying competitive
products for the above applications.

*D igital maturity is a system for self-assessment of the level of achievement of items suchas the management style and structure for implementing digital innovation, and theestablishment of IT systems as the foundation for realizing digital innovation.

Material issues forsocial value creation

KPI

Contribution to reducing environmental impact(Climate change mitigation)

CO 2 emissions (Scope 1 + 2)
(Target: 50% reduction from 2013 level)(Efficient use of energy and resources)

Improvement of energy consumption intensity

Contribution to food issues

Sales of agricultural chemical raw materials and intermediates

Contribution to the healthcare field

Sales of pharmaceutical raw materials and intermediates

Contribution ICT innovation

Sales of electronic materials related products

Promotion of technology innovation andresearch and development

New product sales ratio

Initiatives for digital innovation

Digital maturity assessment

Responsible Care

Material issues for
future value creation

Initiatives on Materiality

Material issues

Cumulative amount of streamlining

Relationships with
Stakeholders

Ratio of female employees to new graduates hired (Target: 20% or more)
Promotion of diversity and inclusion
Employment rate of people with disabilities (Target: 2.5% or more)

Message from a Director
Initiatives for Koei Chemical KPIs

Third Party Opinions

Keiko Fukahori
Director, Executive Officer,
General Manager of Research &Development Division

CSR Report 2021

Company Information

In formulating the next corporate business plan for FY2022 and beyond, weshared our material issues as a member of the Sumitomo Chemical Group andset KPIs to promote sustainability at Koei.
In order to promote technology and research and development, theResearch & Development Division will accelerate the introduction of new
products and technologies, and set the KPIs of “increasing the ratio of sales of
new products” and “promoting streamlining.” Our fourth multi-purpose plant(CM IV) in Chiba is scheduled to start its operation by fall of 2022. The
introduction of new products in the field of raw materials and intermediates
for pharmaceuticals and agrochemicals, as well as in the field of electronicmaterials, is the material issue that will lead to the creation of social value.

｜ 14│ Initiatives on Materiality │Initiatives to Reduce the Environmental Impact
Because Koei Chemical considers the issue of climate change as one of the most important challenges
facing society, we strive to enhance productivity and implement energy efficient facilities, leading to thelessening of climate change through business activities.

Energy saving and the prevention of global warming
In order to prevent global warming, the world needs tosave energy and control the emission of CO2 and othergreenhouse gases. Koei Chemical started an energy
efficiency project in 2005 with the goal of reducing
energy consumption intensity through improvement of the
production processes, recovery of heat, fuel conversion
and productivity enhancement.
The actual energy consumption, CO2 emissions and theirintensity are shown in the following graphs. The energy

Trend of unit energy consumption

consumption and CO2 emissions in FY2020 decreased fromthe previous year due to the decrease in the production
volume. However, they are estimated to increase in
the future as the production volume increases throughoperation of new plants or increase of demand resulting
from business recovery. We will make continuous efforts toimprove the intensity and achieve operational optimization
to save energy and reduce CO2 emissions (prevention of
global warming).

Trend of unit CO2 emission

Energy consumption (crude oil equivalent) [thousand of kℓ/year]

CO2 emission (including waste oil combustion) [thousand of t/year]

Unit energy consumption [%]Unit CO2 emission [%]

96.7

100.0

93.1

92.8

Unit energy consumption

91.8

93.2

91.7

45.9

46.1

49.3

44.2

2017

2018

2019

2020 Fiscal year

78.0

25.7

2016

100.0

94.9

17.4

17.7

18.6

17.3

54.9

2017

2018

2019

2020 Fiscal year

2016

Energy consumption (crude oil equivalent) kℓ
Production volume (ethylene equivalent) tons

*The above line graph shows the relative value for each fiscal year (FY2017=100)(= Unit energy consumption for the relevant FY / FY2017 unit energy consumption)

Message from the field
Efforts to reduce industrial waste

Unit CO2 emission

CO2 emission tons
Production volume (ethylene equivalent) tons

*The above line graph shows the relative value for each fiscal year (FY2017=100)(= Unit CO2 emission for the relevant FY / FY2017 unit CO2 emission)

Mio Nakamoto
General Manager,
Safety & Environment Division,
Responsible Care Office

In the production process of pharmaceutical and agrochemical intermediates,
catalysts, optical materials, and other products manufactured by our company,
waste is generated along with the products.
In order to reduce the amount of industrial waste discharged from ourplants, we are working on the development of production processes thatgenerate less waste, recycling of solvents used, and reuse through heatrecovery. Although industrial wastes that cannot be processed in-house aretreated by outside contractors, we clarify the composition of the industrial
wastes when they are transported outside and manage them responsibly until
final disposal.

15 ｜ CSR Report 2021

Overview of Koei Chemical

Efforts to reduce the emission of fluorocarbons
We conduct proper management including simple/
regular inspections in accordance with the Act on Rational
Use and Proper Management of Fluorocarbons, which tookeffect in June 2015.

GovernanceIn order to protect the ozone layer and lessen global
warming, it is necessary to take appropriate measures
to control the emission of specific fluorocarbons andalternative fluorocarbons.

Toward the mitigation of greenhouse gases
in FY2013. It is difficult to achieve this target by simply
continuing the current efforts, thereby indicating the needto introduce new solutions and other active measures.
Going forward, we will aim to reduce the GHG emission
volume through substantial reduction by receiving powerfrom high-efficiency generators and other measures.

Sustainability*SBT (Science Based Targets) are the high-level goals of reducing greenhouse gas emissions
that companies establish based on climate science in order to achieve the well below 2°C
target. The well below 2°C target, which was adopted in 2015 in the Paris Agreement, is an
initiative to maintain the increase in global average temperature to well below 2°C above
pre-industrial levels.

Initiatives on Materiality

In October 2018, Sumitomo Chemical Company, Limited
obtained SBT* certification regarding the targets to reducegroup-wide greenhouse gas (GHG) emissions by 30%
and 57% or higher from the emissions volume in FY2013,
by FY2030 and FY2050, respectively, and expressed thepolicy to actively work on significant reductions that
contribute to the “well-below 2°C” target adopted in
the Paris Agreement. Koei Chemical, as one of the groupcompanies, will take on the challenge of the FY2030
targets to reduce GHG emissions by 30% from those

Efforts to reduce industrial waste
Regarding waste generated through business activities, we
actively promote the “3Rs” (reduce, reuse and recycle) to
reduce the environmental impact.
The volume of waste discharged for FY2019 is shownin the following chart. The volume of industrial waste
generated decreased by 10% compared to the previous
fiscal year, and the recycle rate decreased by 1%.
We will make continuous efforts to reduce
environmental impact through recycling, such as a methodof using incineration residues as cement materials.

Although the industrial waste amount is decreasing eachyear, the landfill disposal amount fluctuates with thechange of production items.
We will make continuous efforts to promote thereduction of environmental impact by cutting not only
the industrial waste amount but also the landfill disposal
amount.
We have disclosed information on the maintenance andmanagement of industrial waste facilities (incinerators)
on our website since 2011 in accordance with the
Enforcement Regulations of the Waste Management Law(URL: https://www.koeichem.com/en/company/rc.html).
年度別廃棄物量推移
Trendof industrial waste by fiscal year

Actual results for FY2020
Actual results

Landfill disposal amount[thousand of t / year]
Industrial waste amount[thousand of t / year]

Through business activities:• Reduction of industrial
waste amount• Reduction of landfill
disposal amount•	Waste generated throughbusiness activities: 18,338 tons	(20,487 tons for the previous
fiscal year, down by 10%)•	Landfill disposal amount: 264 tons	(195 tons for the previous fiscal
year, up by 35%)

25.7
22.1

20.5
16.3

0.28

Promotion of recycling• Increase of effective
usage rate

Recycling amount: 4,497tons
Recycling rate: 25%(5,241 tons for the previous fiscal
year, recycling rate: 26%)

0.16

2016

2017

0.19

0.20

2018

2019

18.3

Company Information················· Zero emissions ·················

Third Party Opinions

Targets of initiatives

Relationships with
Stakeholders• Trend of industrial waste

Responsible Care

• Approach to zero emissions

0.26

2020 Fiscal year

CSR Report 2021

｜ 16

│ Initiatives on Materiality │Environmental Preservation Activities
Koei Chemical reconciles business activities with environmental maintenance and improvement. We reduce
the emission of chemical substances handled in the course of business activities, such as specific chemical
substances, and perform proper waste management. In this manner, we are performing environmental
preservation activities.

Environmental management system
We deploy Responsible Care activities to conduct
environmental preservation actions throughout the life
cycle of our chemical products, including development,
manufacturing, sales, use and disposal. In addition, we also
perform our environmental preservation actions based onan ISO standard.
We acquired ISO 14001 certification in 1999, and has

been continuously improving our business through the
PDCA cycle based on our environmental management
program to promote our environmental activities.
In addition, we are under the Agreement on
Environmental Conservation with Chiba Prefecture andSodegaura City, and working to preserve the environment
together with the community.

Environmental accounting report
Koei Chemical introduced environmental accounting in
FY2000.
❶ Purpose of the introduction(1) To enhance the efficiency of activities by quantifying
resources allocated in environmental preservation(2) To conduct decision-making on environmental
measures from mid- and long-term perspectives(3) To enhance the transparency of companies throughinformation disclosure❷ Points of environmental accounting(1) Scope of calculations: Koei Chemical alone(2) Period covered: FY2020(April 1, 2020 to March 31, 2021)(3) Preconditions of calculation⃝Calculations are based on the Ministry of theEnvironment’s Guidelines.
⃝Costs are calculated based on actual results.
⃝Economic benefits are only actual benefits. The
deemed benefits are not included.

Environmental accounting (FY2020)
Environmental preservation cost
Category
1

Business area cost
(Breakdown)
Environmental measure
cost
Global environment preservation
cost
Resource circulation cost

(Unit: Millions of yen)

Major items

Investment
61

Prevention of air pollution, water pollution,
bad odor, noise, etc.
Prevention of global warming, ozone depletion,and energy saving, etc.
Resource-saving, efficient water use, rainwateruse, etc. Disposal, reduction and elimination ofindustrial waste, recycling, etc.

Cost

Details of effects

1,052

Amount1

Cost reduction and business income due torecycling

98

41

625

6

283

2

Effects of resource saving

229

14

144

3

Effects of energy saving

20

Total

348

2

Upstream/downstream cost

Green purchasing, recycling of products,
etc., recycling of containers and packaging
materials, etc.

0

0

3

Administration activity cost

Environmental training, outsourcing ofanalysis of environmental impacts, ISO14001
maintenance and management

0

107

4

R&D cost

R&D for products that contribute toenvironmental preservation

0

90

5

Social activity cost

Greening, beautification, levy on pollutionload, support of environmental activities
performed by local communities

0

2

6

Environmental deterioration cost

Land pollution, restoration of the naturalenvironment to its original state

Total

Economic effect of environmental
preservation measures
(Unit: Millions of yen)

0

0

61

1,251

Note: Cost amounts are the sum of depreciation costs, repair costs, labor costs, material and service costs and businessconsignment expenses, etc.

Efforts for PCB waste
We collect all condensers and lamp stabilizers that contain
PCB, and replace them with PCB-free equipment.
We also store the collected PCB-containing equipment
properly so that it does not have any environmental

17 ｜ CSR Report 2021

impact. In February 2019, the disposal of all the collected
equipment was completed through Japan Environmental
Storage & Safety Corporation (JESCO).

Overview of Koei Chemical

Trend of SOx and NOx emissions and COD impact volume

Trend of NOx emission [t / year]

For NOx emissions and COD impact volume, we haveset agreed values which are stricter than the requirements
under laws with local communities. Appropriate control is
performed based on the agreed values.

Trend of COD loading dose [t / year]

Annualized emissions: 117 tons
(addition of agreed values)

52.77

51.38

Annualized impact: 65 tons
(addition of agreed values)

55.78

2017

2018

2019

2020 Fiscal year

2016

8.3

6.9

7.0

5.5

2017

2018

2019

2020 Fiscal year

Initiatives on Materiality

42.87
12.1

2016

Sustainability

55.63

Governance

The environmental impact on air and water areas is asfollows.
For SOx, the volume detected through annual analysis issmall and lower than the emission standards.

PRTR reports
system for identifying, compiling and publicly disclosing
information on what amount of chemical substances
specified by government ordinance have been emitted into
the environment or have been transferred off-site with
waste.
The actual results for FY2019 are as follows.

Relationships with
Stakeholders

Trend of total release amount [t / year]

Responsible Care

The PRTR system is prescribed in Article 5 of the Act
on Confirmation, etc., of Release Amounts of SpecificChemical Substances in the Environment and Promotionof Improvements to the Management Thereof (generally
known as the “PRTR Act”), which took effect in March
2000. PRTR (Pollutant Release and Transfer Register) is a

Actual release amount and transferred amount for FY2020 (tons/year)
Air release

2.75

2.64

2.64

1.08

(2.77)

Release amount andtransferred amount

Total release amount

Water release

2.64

0.00

(2.77)(0.00)

Third Party Opinions

1.08

2.77

Soil release

0.00
2017

2018

2019

2020 Fiscal year

Transferred amount*
81.6(0.00)(145.2)

Internal landfill amount*The transferred amount is the volume entrusted to intermediate waste treatment service operators(little emission to public sewage system)

Company Information

2016

Figures in parentheses show
FY2019 results.

0.00(0.00)CSR Report 2021

｜ 18

│ Initiatives on Materiality │Safety and Health Activities
Based on the basic principle of “making safety our first priority,” we are making concerted efforts withall employees and all persons concerned including cooperating companies that work with us, to ensure
worker safety and health so that personnel can work comfortably.

Safety, security and disaster prevention
Based on the basic principle of “making safety our firstpriority,” we strive to ensure worker safety and health withthe aim of making safety and stable operation our strength.
More specifically, we perform activities to periodically
discuss and consider issues regarding safety and health,and determine measures mainly through the Safety and
Health Committee and the safety and environment
promotion members’ meeting.
In addition, we perform concerted safety activities byorganizing various campaigns with the aim of eliminating
both minor and major disasters. During the campaign
period, the identification of dangerous sites and theimprovement thereof, the promotion of Hiyari-Hatto(near-accident situations) prevention activities, thestrengthening of risk detection, the promotion of the

Safety slogan

pointing and coding method and other necessary measures
are conducted by safety and environment promotion
members, which are representatives appointed in each
workplace.
Moreover, we have established the Safety andEnvironment Promotion Task Force for plant reform
activities. These activities are being strengthened bypositioning the Task Force as an important pillar of reform
activities.
Both the President and Plant Directors, which are the
top members of the plant, inspect the relevant workplace
and are actively involved in various initiatives such as
ensuring Japanese 5S methodology, raising safety
awareness, and eliminating safety issues. In this manner,ensuring safety is treated first and foremost.

Safety workshop

Disaster training

With regard to work-related accidents, there were noindustrial injuries in FY2020.
The number of zero-injury days reached 4,419 (as ofMarch 31, 2021), which is equal to over 12 years. As
shown in the following graphs, frequency rates of industrial
injuries and severity rates of industrial injuries remain zero.

Unfortunately, non-lost-time minor injuries occurred. We
conduct RC zero-accident audits even on minor injuries tofind the cause and implement additional measures, while
making efforts to undertake horizontal deployment on theprevention of the occurrence of similar injuries to achievezero-injuries.

Frequency Rates of Industrial Injuries

Severity Rates of Industrial Injuries

Koei

Koei

Chemical industry in Japan(Calendar year)

Chemical industry in Japan(Calendar year)
0.2

2

Severity rate

Frequency rate

3

1

0

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Frequency rate

19 ｜ CSR Report 2021

Number of casualties by industrial
Total actual working hours

×1,000,000

Fiscal
year

0.1

0

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Severity rate

Total number of working days lost
Total actual working hours

×1,000Fiscalyear

Overview of Koei Chemical

Risk management of chemicals• Provision of SDS• Risk assessment

Relationships with
Stakeholders

Risk assessment is a method to identify potential dangers
and hazards in the workplace, and reduce or remove them.

Responsible Care

We provide personnel with necessary training regarding themanagement of chemical substances. We offer education
regarding laws and regulations, etc., relating to the safetyof chemicals to researchers who are involved in productdesign so that appropriate management of chemical
substances is performed.

Initiatives on Materiality• Chemical safety education

Sustainability*GHS: The Globally Harmonized System of Classification and Labelling of Chemicals
GHS was adopted as a recommendation of the United Nations in July 2003. GHS
classifies the dangers and hazards of chemical products based on specific standards,
displays information with visual materials including pictures and graphics, and reflects
the results in labels and SDS. This system is intended to be utilized for disaster prevention
and the protection of human health and the environment.

Governance

We have prepared GHS*-compliant safety data sheets (SDS)
for all products to provide users with necessary information
on dangers and hazards (about 2,000 items as of the endof FY2020).
In 2019, Japanese Industrial Standards (JIS) Z 7252 andJIS Z 7253, standards for the items to be included in an
SDS, were revised. An SDS conforming to the new JIS is inaccordance with the laws and regulations in Japan as wellas the sixth revised edition of the United Nations GHS inprinciple. Accordingly, we are preparing to provide new JIS
compliant SDSs by May 2022, the deadline for transition.

(Step 1) Identification of dangers and hazards(Step 2) Estimation of risk factors caused by dangers andhazards(Step 3) Consideration of contents of risk reduction
measures(Step 4) Implementation of risk reduction measures
We identify dangers and hazards of the substances that
we handle at the phase of research and experimentation
with reference to literature study and tests. For substances
produced by trials, data including disaster prevention
properties, toxicity and irritation is added. The data is
examined by not only the department in charge of safety,
but also in cooperation with the laboratory and the plant
section.
For substances produced officially in a plant, various
assessments through the evaluation of the magnitude ofrisks of chemicals and facilities are required. Reviewing risks
and risk mitigation measures are also performed forexisting processes with the aim of zero-disasters andzero-accidents.
We also perform risk assessment on dangers andhazards of subject substances in accordance with theamended Industrial Safety and Health Act, which tookeffect in June 2016. In particular, in the risk assessment on
hazards, we prevent health problems by comparing theexposure amount estimated for each work with an
exposure limit.

Reducing Chemical Risks During TransportCompany Information

Product labels

Industrial Safety and Health Act.
We also ask logistics traders who transport products tocarry a card that contains information on emergency
handling and contact (yellow card).

Third Party Opinions

In order to ensure safety and the environment when
products are used, we attach product labels that show
information on dangers/hazards and first aid measures tothe product container. We affix GHS-compliant labels on
products containing chemical substances specified in the

Yellow cards

CSR Report 2021

｜ 20

│ Initiatives on Materiality │Quality Assurance Activities
Koei Chemical strives to supply high-quality products and services that satisfy customers’ needs and ensure
safety in their use.

Quality assurance systems• Policy regarding quality assurance
We have built our quality assurance system in accordancewith our basic policy of “supplying high-quality products
and services that satisfy customers’ needs and ensure safety
in their use.” In order to satisfy our customers, we consider
it important to deliver products that meet customer
demands with quality that provides customer satisfaction
in a timely manner. To this end, quality assurance activities

must be promoted at each stage through the concerted
efforts of divisions including sales, design/development,purchasing, production, quality assurance and logistics.
The Quality Assurance Division supervises company-wide
quality assurance activities, shares and disseminates thebasic policy, and presses ahead with company-wide efforts
in order to realize the policy.

Quality-related flow chart
Customer(Information)
quality issue and request

ReportSales division(Communication)customer information• Initial communication (within 24 hours)• Investigation result• Recurrence prevention measure

Quality assurance manager(Direction)• Cause investigation• Examination of
measures(Report and draft)• Investigation result• Recurrence prevention
measure(Deficiency of measures)
Direction for review

Division in charge, Quality assurance division

Activities for improving the corporate culture focusing on quality
We conduct our quality assurance activities under the aims
for the year of “zero major complaints on product quality”
and “continuous efforts to improve customer satisfaction”
to enhance our quality-centric corporate culture.
When a quality-related complaint, problem or issue
occurs, the department in charge and the Quality
Assurance Division will find causes out of the quality-related
information through “naze-naze” analysis (causal analysis),for example, take recurrence prevention measures, and rollthem out to eliminate complaints. Information on thoseactions is shared within the Company through the Quality
Maintenance Task Force, which is one of our plant reform
activities, thereby improving our quality assurance system.
We share the complaint calendar, or a list of the past

21 ｜ CSR Report 2021

critical complaints, and the quality hiyari (near-accident
situations) cases at meetings of the quality management
promotion members, consisting of the representativesof the departments and the Quality Assurance Division
members, while we also conduct quality patrols. These
actions enhance the workers’ awareness on quality and willcontinuously improve the customer satisfaction.
In FY2020, the quality management promotion
members conducted quality patrols mainly in places wherecomplaints were made in the past during the Quality
Improvement Month, which is promoted every November,and we ensured compliance with the quality management
rules through checking whether the records are preparedproperly, for example.

Overview of Koei Chemical

Promoting Diversity and Inclusion —With Employees—
Koei Chemical believes that developing an environment in which each and every employee can fully utilize
and demonstrate his or her abilities is an essential issue towards enhancing productivity.
We are working to promote employment and a variety of systems to flexibly respond to diverse values.
We will continue to work towards creating an environment and developing a workplace culture that allows
individual diversity to be utilized, and we will also work to allow each employee to actively participate.

• Women’s empowerment

Reemployment rate

To raise the ratio of female workers among total new graduates tobe employed to 20% or higher.

Results (new graduate hiring)
FY2020

FY20218

12

14

Female042

Employment rate offemale workers

0%

25%

13%

• Employment of people with disabilities

KPI

Increase the employment rate of people with disabilities to 2.5%
or more by the end of FY2022.

Results

FY20202

5Reemployment asshokutaku fixedterm personnel

6

2

4

Reemployment rate

75%

100%

80%

Flexible work styles• Flextime system

Society has been seeking a balance between work andprivate life, including childcare, nursing care, and medical
treatment. In order to further promote the improvement ofan environment in which our personnel can manage timeeffectively, we have introduced the super flextime systemthat abolished core time in October 2019.

• Reducing annual scheduled total working hours

We are working together with labor unions to reduce
actual total working hours. In 2019, we reduced theannual scheduled total working hours, which are the basisof working hours. We then further reduced the hours for2020 and 2021 in stages. For 2021, the annual scheduled
total working hours for daytime workers were shortened to
1,891 hours (down 24 hours), and for shift workers, 1,883
hours (down 21 hours), from 2019 levels. These hours havebeen implemented since January 2021.

Third Party Opinions

With regard to the employment of people with disabilities,
we have promoted the hiring of people with mental
disabilities as well as those with physical disabilities, andhired one person in February 2021, bringing the total
number of employees to eight. We will continue to employ
people with disabilities according to the KPI.

FY20198

Relationships with
Stakeholders

FY2019Male

FY2018

Responsible Care

Target: To increase the ratio of female workers to at least 15%.

Fiscal year
Mandatory retirement

Initiatives on Materiality

Although we have always hired new personnel in an equaland fair manner regardless of gender, the ratio of female
workers actually remains low. Accordingly, we have set KPIs
and targets based on the Act on Promotion of Women’sParticipation and Advancement in the Workplace, and fromnow on we will make active efforts to increase the numberof female personnel.
KPI

In accordance with the Act on Stabilization of Employment
of Elderly Persons, we have introduced a reemployment
program that allows personnel to work until the ageof 65 after reaching the mandatory retirement age of
60. Moreover, for the purpose of encouraging retired
personnel to continuously demonstrate their experience,skills and other strengths, we pay the same amountof wages as that provided at the time of mandatory
retirement to reemployed personnel who assume positions
as line managers/supervisors.

Sustainability

Koei Chemical has actively performed recruitment activities
with an eye on a plan of large-scale capital investment
through FY2024, and as a result, we were able to secure
the target number of personnel. We have been hiring newhigh school graduates and experienced workers for the
purpose of job creation in local regions as well, and we arenow expanding our hiring activities from the local to thenational level.

Reemployment program for retired persons

Governance

Active recruitment (women’s empowerment,utilization of foreign personnel, employmentof people with disabilities)

Annual scheduled total working hours
June 2020

June 2021

Number of people
with disabilities

9

9

9.5

Employment rate

2.53%

2.37%

2.32%

Unit: hours/year

2019

2020

2021

Daytime workers

1,915

1,899

1,891

Shift workers

1,904

1,890

1,883

Company Information

June 2019• Utilization of foreign personnel

In FY2020, we hired two foreign nationals. We applied for
the METI Japan Internship Program and accepted one internfrom October to December 2019. The intern’s wishes andour requirements were matched, and the foreign national
joined the Company in January 2021.
CSR Report 2021

｜ 22

│ Initiatives on Materiality │• Results of technique/expertise transfer education

Efforts to reduce long work hours
In the past, we had set targets for overtime reduction andmanaged them. We have shifted to self-management basedon the belief that it is important for employees to voluntarily
consider how to work and how to use their time.
We also institute “No-Overtime Day” every Friday, andall personnel are encouraged to refrain from work unless it
is urgent and essential, through internal announcements,
e-mail messages and other communication tools. In addition,
we summarize the monthly results of overtime work foreach personnel and notify the managerial personnel ofthe results. We also strive to ensure proper personnel
management by checking the work schedule using the PC
management system and the access control system.
With regard to long working hours, we have set a
threshold that is stricter than what the law requires,and for those who exceeded this threshold, we provide
opportunities to have interviews with industrial physicians
and public health nurses to check their health status, aswell as guidance to workplaces to review their operations.
As a result of the efforts of each and every personnel toimprove work efficiency, we have been able to reduce theovertime hours of daytime workers from 26.2 hours per monthwhen we first started this initiative to 14 hours per month.
We will continue to discuss and review diverse measures
to further reduce overtime work.

Average overtime hours (month, person)
Average time (month, person)

21.7

19.7

18.3
16.2

2011

2012

2013

2014

15.9

15.9

16.5

2015

2016

2017

Number ofattendees

Job level

Training course title

New employee OP

Basic technical training for
new employees

18

Beginner OP

Safety simulation course

8

Beginner to mid-level OP

Chemical safety simulation
training (7 sessions)77

Mid-level OP

Mid-level technician training

7

Mid-level OP to team leader

Workplace leader training

6

SS training (SS 32nd)2

SV (supervisor) training1

OM (operation manager)
training course

1

Monozukuri leader training

8

Team leader
Team leader to foreman/
Deputy Manager
Foreman, Deputy
ManagerBack office department
management employees
Manufacturing section
employees

Safety simulation dojo

131

Beginner OP to team leader

Technical seminar (gijutsu dojo)

165

Mid-level OP to team leader

Autonomous maintenance
operators (1st and 2nd level)16

OP: operator• Support for acquisition of national certifications

In order for each personnel to improve their daily work, weare promoting the acquisition of national certifications.
(1) Newly established incentive system for acquiringcertifications(2) Subsidies for correspondence courses for acquiringcertifications have been changed from a half subsidy toa full subsidy• Support for globalization
15.5

15.5

2018

2019

14.0

2020
Fiscal year

Human resources development• Human resources development policy

We prepare various training programs by objective andjob position and focus on offering technique/expertisetransfer education and globalization support educationin accordance with the basic policy of “development ofprofessional personnel who contribute to the enhancementof corporate performance.”

23 ｜ CSR Report 2021

for FY2020

We are continuing to offer online English conversation
classes with a view to developing global human resources.
The period is six months (24 sessions in total), and a
speaking ability test is conducted before and after training
to determine the level of class to be taken and to measure
the effectiveness of training.
The benefit of online class is the one-to-one lesson given
to trainees to suit their schedule. In FY2020, 27 trainees areworking to improve their English skills during gaps in theirworking hours.

Health promotion activities
As part of our health promotion activities in FY2020, we
held meetings to measure the estimated age of bloodvessels and in-body measurements while taking COVID-19
infection control measures, to create opportunities for
employees to think about how to manage their own
physical condition in an environment where it is difficult totake exercise due to work from home and closed fitness
centers during the COVID-19 pandemic.

•
•
•
•
•

Responsible Care

In order to ensure that personnel can work in good health,
we hold health seminars and various measurement sessions
that help them monitor their own health conditions.
Session for measurement of estimated age of bloodvessels
In-body measurements session
Seminar for female personnel
Support for personnel who wish to quit smoking
Publication of Health Management Newsletter once
every two months for the purpose of delivering healthinformation according to the season.

Initiatives on Materiality• Health promotion activities

We offer a mental health seminar every year to help
personnel prevent mental illness in advance. For managerial
personnel, we hold training sessions on line management
for the mental health of junior staff, and for all personnel,
we hold self-care training sessions to care for themselves.
Since FY2020, we have been providing feedback on the
results of the group analysis of the stress check conducted
every year to the head of each division to help themunderstand the outstanding points and weaknesses of theirown division, which will be useful for line managers to carefor the wellbeing of junior staff and ultimately positive for
the Company as a whole.
In addition, as part of our mental health promotion
activities, we have established Mental Health Improvement
Programs. While general personnel, managerial personnel,
public health nurses, industrial physicians and the humanresources division individually play roles in improving
mental health, the Company strives to prevent the
manifestation of personnel mental health issues throughsmooth communication.
For personnel who are recuperating from mental healthproblems, we have established a program to support theirreturn to work in cooperation with public health nurses,
industrial physicians, and external organizations such as
medical institutions. The program includes the arrangementof face-to-face interviews with public health nurses andindustrial physicians until reinstatement, re-working withexternal organizations and reduced working hour programs
after reinstatement, and these are implemented dependingon the situation.

Sustainability

Public health nurses conduct a face-to-face interview andgive daily life guidance to personnel whose health checkup
results show abnormal findings. In addition, we support
those who are required to undergo a second examinationin cooperation with industrial physicians and contracted
hospitals.
The public health nurses also handle daily interviews andhealth consultations for personnel who request them, andfor personnel who need or wish to meet with a doctor,
they connect them to an industrial physician for follow-up.
Personnel who joined the Company more than threemonths ago are also interviewed by the public health nurse
in order to help them adjust to life at the Company.

• Mental health

Governance• Health guidance

Overview of Koei Chemical

In addition, we held seminars for female personnel
and mental health seminars that support women’s active,
healthy life, at a limited number of participants per session
and an increased number of sessions.

Relationships with
Stakeholders

Message from the field
Maiko Matsuyama

As a public health nurse at Koei Chemical

Occupational Health Nurse,
General Affairs & Personnel Office

Third Party Opinions

CSR Report 2021

Company Information

The Company established a Health Management Office in April 2017, and I
joined the company as a public health nurse at that time. As an industrial publichealth nurse, I support each employee so that they can carry out their duties
with vitality and a smile, and so that they can spend their daily lives comfortably.
Since joining the Company, I have been holding a series of health events,
including In-body measurement, measurement of estimated age of bloodvessels, and walking seminars, not only to provide information about health,but also to create opportunities for employees to think about improving,
maintaining, and promoting their own health. As a result of these efforts, thehealth awareness of employees has been improving year by year, and there has
been an increase in the number of consultations where employees compare
their own health checkup results and data obtained from the events over time,and ask what measures they should take to improve their health.
We will continue to enhance our health activities to raise employees’ healthawareness and to improve, maintain, and promote their health.

｜ 24│ Responsible Care │The global chemical industry is working voluntarily to protect environment, safety and health throughevery process from the development of chemical substances, their manufacture, distribution and use to
final consumption and disposal, as well as engaging in communication with the public by openly disclosing
performance. These initiatives are known as “Responsible Care.”
As a member company of the Japan Chemical Industry Association (JCIA) working for responsible care,
the Company has been conducting various activities in accordance with our Corporate Policy on Safety,
Environment and Product Quality and Policy on Responsible Care Activities. JCIA has formulated the“Principles of the Japan Chemical Industry Association regarding the Environment, Health and Safety” inaccordance with the Responsible Care Global Charter by the International Council of Chemical Associations(ICCA). Koei has integrated these two policies and added health issues from the JCIA’s Principles toformulate the new Policy on Responsible Care Activities (Safety, Health, Environment and Quality). We
aim to further promote to ensure safety, health, environment, and quality throughout the life cycle of our
products under this new policy.

Policy on Responsible Care Activities (Safety, Health, Environment and Quality) (formulated on April 1, 2021)
We treat trust and honesty as our mission, plan to develop
our business by combining our vital talent and knowledge,
and provide useful products that are the results of ourcreative technologies to contribute to the growth of society.

In accordance with this corporate philosophy, we will
work on the following matters regarding safety, health,environment and quality as our top priorities in order tocontribute to the sustainable development of society andour own sustainable growth.

1

We will maintain safe and stable operations by realizing zero-accident, zero-injury performance and “Making safety our first priority.”2

We will ensure the safety of our employees, neighboring communities, and other stakeholders through risk-based continual improvement of our performance inoccupational safety and health, industrial safety and disaster prevention, and other related areas, as well as the security of our facilities, processes and technologies.

3

We will work to ensure environmental and human health and safety throughout the life cycle of our products by promoting continual improvement inchemicals safety and product stewardship across the supply chain, and enhancing our chemicals management system.

4

We will work to protect the environment through continual improvement of our environmental performance throughout the life cycle of our products,from development to disposal, and address climate change and related issues.

5

We will supply high-quality products and services that satisfy customers’ needs and ensure safety in their use.

6

We will not only comply with all domestic and international laws, regulations, and ordinances, but also work to use best practices through our voluntary initiatives.

7

We will disclose information and engage in dialogue with society to ensure that we meet society’s expectations, respond to its interests, and remain accountable to the same.

8

We will contribute to sustainable development of society by improving our performance, expanding business opportunities, as well as developing andproviding innovative technologies and other solutions to address social challenges.

Efforts for responsible care activities

25 ｜ CSR Report 2021

Manager’s responsibility

Manager’s responsibility

We have acquired ISO certification, which is the
We declared the implementation of Responsible Care ininternational standard relating to environmental and quality
1995. Having recognized this policy, officers and employees
management systems, as one of the tools to promote
are making continuous efforts to improve the management
Responsible Care activities. We also focus on the overallsystem in compliance with laws and regulations. In addition,
improvement of system performance.
an officer who is in charge of safety, the environment, andproduct quality oversees all the duties regarding safety
and health, environmental protection, security and disasterprevention, quality assurance, andchemical safety.
Cross correlation chart of major processes
We have established the Responsible
Care Committee, which is chaired byContinuous improvement of management system
the President, as the supreme decisionZero-accident and zero-injury operation/product safety/customer satisfaction/
reduction of environmental impact/expansion of business and profit
making organization that promotes
Requirements ofstakeholders
Performance
Responsible Care activities. The
Provision of
resources
Operational management
Requirements of
Responsible Care Committee meetings
Establishment of
Product realization
Operationalof resources
policies and target
customers
management
Feasibility and profitability
Customerare held twice a year. The Committee
Sales and marketing
Energyrequirements
Design development
and information
Environmental impact
reviews the results of activities
Production plan
Provision of personnel
Procurement of
performed during the previous
Provision of facilities
raw materials
Manufacturing
fiscal year and approves plans to be
Outsourcing
Products
Measurement, analysis,
Operational
Quality management
implemented for the current fiscal year
improvement
side
Storage and shipment
to ensure continuous improvement of
Input
Performance
Target management
Complaints
the management system. In addition,
Management of management system
Management of quality assurance
Satisfaction
we perform internal audits on a regular
Customersatisfaction
and as-needed basis to check theInternal audit
effectiveness of the activities.

│ Relationships with Stakeholders │Overview of Koei Chemical

The approach of cultivating business with all stakeholders, including shareholders, investors, clients,
Suppliers and partners, local communities, and employees who support the Company and their families,
and sharing the results thereof with them, is a prerequisite for achieving sustainable growth as a company
and provides the reason for its survival in society. We value two-way communication to achieve coexistence and co-prosperity with all such stakeholders.

Relationships with major stakeholders

Governance

Shareholders
and investors

Employees

Responsible Care

N

Initiatives on Materiality

Suppliersand business
partners

Sustainability

Localcommunities

Customers

Customers

We aim to contribute to a sustainable society together

We aim to grow and develop together with ourwith our business partners by building relationships ofcustomers by providing a variety of solutions to theirtrust through transactions that emphasize compliance.

product needs and issues while ensuring a stable andRelationships with
Stakeholders

Suppliers and business partners

efficient supply.

Local communities

We will strive to disclose information with a high degree

Centering on Sodegaura City, Chiba, which isof transparency, and disclose our management policy

the location of the head office, we work on theand financial information in a prompt and appropriate

revitalization and environmental development of local

manner.

areas through communication.

Third Party Opinions

Shareholders and investors

Company Information

Employees
We will develop activities aimed at developing
employees’ abilities, balancing work and life, andimproving the health of each employee so that they canwork energetically.
CSR Report 2021

｜ 26

│ Relationships with Stakeholders │Dialogue with Shareholders and Investors
We properly disclose information regarding overall management in accordance with applicable laws andregulations and convey our management policy and contents in an accurate and precise way in an effort toobtain social trust.

IR policy

General meeting of Shareholders

We disclose IR information swiftly and properly to help
shareholders and investors accurately understand Koei
Chemical. We disclose useful information in accordancewith applicable laws and regulations as well as rules
provided by securities exchanges so that shareholders andinvestors can accurately understand our business activities.

While striving to deliver notices of convocation as earlyas possible, we post notices of convocation on websites(websites of stock exchanges and the Company) prior to
the delivery in order to give shareholders adequate time toconsider matters to be resolved.
Moreover, we prepared the notice of convocation of the158th Ordinary General Meeting of Shareholders in color
in order to make the document more visual and readerfriendly for shareholders.

Method of information disclosure
IR information on financial results, performance forecasts
and general meetings of shareholders, etc., is posted
through Tokyo Stock Exchange’s TDnet (Timely Disclosure
Network System) and on the Company’s website, which
was renewed in FY2017.
We will continue to provide information with better
contents in a prompt manner.

Distribution of shareholders
Foreign investors
1.49%
Securities companies
0.93%
Number ofshares held:
4,900,000
sharesJapanese individuals, etc.
30.64%

Japanese financial institutions
5.80%
Other Japanese corporations
61.14%

Approach on the prevention of insider trading

Please refer to the website for investors.

https://www.koeichem.com/en/ir.html
Basic policy on profit distribution
As our basic policy, we determine dividends of surplus andother related matters in consideration of the balance
between 1) the profits to be secured for shareholders overthe long-term and in a stable manner and 2) the status ofour performance in each fiscal year and the enhancementof shareholders’ equity to be reserved for future businessdevelopment.
Based on the above basic policy, in FY2020, we paid anannual dividend of ¥100 per share, including an interim
dividend of ¥40.

27 ｜ CSR Report 2021

In order to maintain the fairness and soundness of markets, wetake thorough measures to prevent insider trading in advance.
We have designated the period from the end of every quarterterm until the day of the announcement of financial results as
the “no-purchase period of Koei Chemical’s shares” and notify
officers and personnel about this period. This measure helps
prevent doubts about insider trading from arising.

Financial results briefing for institutional
investors and analysts
On May 28, 2021, we held a financial results briefing for
FY2020, and on October 26, 2021, we held a financial
results briefing for the second quarter of FY2021 forinstitutional investors and analysts.
Please refer to the video of the presentation and thematerials on our website.

https://www.koeichem.com/en/ir/calendar.html

Overview of Koei Chemical

Relationship with Local Communities
Centering on Sodegaura City, Chiba, which is the location of the head office, we work on the revitalizationand environmental development of local areas through communication with local residents.

Contribution to local communities
As part of our contribution to the community, we support
a spring youth baseball tournament in Sodegaura City,
where our plant is located. We will continue to support thisevent to promote local sports.

• Collecting volunteers

We are undertaking an initiative to collect and sell PET
bottle caps. The profits earned are used to provide vaccines
for children in poor countries. This initiative is spreading
across Japan. We also collect PET bottle caps and sell usedbooks brought by employees through the Sodegaura City
Social Welfare Council, and then donate the money earned
to the Japan Committee, Vaccines for the World’s Children.

Governance• Support for a youth baseball tournament

Sustainability
Initiatives on Materiality

Players enter with the Koei Chemical flag in their hands

PET bottle cap presentation ceremony

49,700 caps
30,000 yen

Responsible CarePET bottle caps ･････････････ About
Donation money collected throughsales of second-hand books ･････････(including matching gift provided by the Company)

7 tickets
Used pre-paid cards ･････････････････････ 26 cards
Used Disneyland tickets ･ ･････････････････

Relationships with
Stakeholders

Used postal stamps, Bell Marks, etc.
Chiba Plant Director participates in the opening ceremony

Fostering the next generation• Acceptance of trainees

provide opportunities for learning through health guidance
after health checkups and stretching classes.

Third Party Opinions

We accept nursing students from the school of nursing
as part of our educational support and health promotion
activities for our employees. During the internship, weCompany Information

Conference for accepting trainees

A stretch class organized by trainees

CSR Report 2021

｜ 28

│ Third Party Opinions │Kazuhiro Bai, Specially Appointed Professor in the College of Business & Graduate School of Business at Rikkyo
University, read our CSR Report 2021 and offered his opinions.
College of Business & Graduate School of Business, Rikkyo University
Specially Appointed Professor

Kazuhiro Bai
ProfileServing at Rikkyo University since 2018. Visiting professor in the Business Administration Program of Bond University (Australia) in2008. His works include Outlook of CSR Accounting, Moriyama Shoten; Introducing CSR Accounting, Japanese Standards
Association; First Step to CSR Management for Corporate Employees, co-author, Dai-Ichi Hoki; “Deployment of Financial Reporting
Theory based on Global Governance”; CSR Management Control; Essentials for a Going Concern: Five Principles to Overcome
Environmental Change; Corporate Ethics and Sustainability of Society, co-author, Reitaku University Press, and many more.

Koei Chemical Company, Limited (“Koei Chemical”) hassummarized its achievements related to CSR activities from
April 2020 to March 2021 in the CSR Report 2021, whichaims to create a sustainable society to support the powerof chemistry. The opinions of an outside party are listed
below from the viewpoint of researching lasting corporate
management and CSR accounting, which aims to quantify CSR
activities.

Points to be commended
As stated in the President’s Message, one of the features ofthis CSR Report is that Koei Chemical considers its initiatives
to realize a sustainable society through promoting ESG/CSR
management and responding to SDG themes as an extensionof its corporate philosophy and existing business activities, andthis can be found in the coordination of sustainability action(page 5).
If a list were made of the report content that ought to bementioned from this perspective, I would first list the sevenmost important issues offered by the Group as a memberof the Sumitomo Chemical Group (contributing to reducing
environmental impact, contributing to increasing foodproduction, contributing to the healthcare field, contributing
to ICT innovation, promoting technology and research anddevelopment, initiatives for digital innovation, and promoting
diversity and inclusion), as well as the fact that they arepromoting sustainability management as specialty chemicals(page 13). Secondly, I focused on the fact that they established
the Koei Chemical Key Performance Indicators (KPI) that
respond to these most important issues to communicate
with outside stakeholders while adjusting the direction of theabove initiatives and working to spread knowledge and shareawareness within the company (pages 13-14). These attempts
are positioned as the practice of sustainability management,

which has advanced the initiatives from last year one step
forward, and I value the fact that this report was composed
following the above flow. Furthermore, the relationshipwith SDG themes, which form the core of improvements incorporate value and sustainability management, is brought
together in a compact and visual way, and this content andstructure can be evaluated highly as a CSR report (pages 4-5).
To summarize this year’s report, a serious attitude taking onsustainability management is reflected in this report throughestablishing unique KPIs from identifying the most important
issues through dialogue with internal and outside stakeholders,
and the content of the report shows that sustainability action isfirmly rooted within the company.

Points to be improved
I’d like to talk about how to arrange the relationship between
KPIs - indices for sustainability management - and the actual
state of action as an expectation for future improvement.
From page 15 onwards, initiatives on materiality are listed
and it is inferred that these initiatives will be organizedgradually starting next year. When that happens, I hope that
KPI progress, a specific materiality initiative, will be explained
while being based on the corresponding relationship between
materiality and KPIs as shown on page 14. This is because
if Koei Chemical can arrive at a stage where they can put
a system of organizing and disclosing the corresponding
relationship between the two, a path will open to achieve
further development from a CSR report to an integrated
report in addition to increasing expectations as an effective
communication tool with stakeholders. I hope that the above
points will be used as reference and will lead to further
development of sustainability action for this term (2021), thefinal year of the corporate business plan.

Response to Third Party Opinions

Koichiro Sogawa

Director & Managing Executive Officer(in charge of General Affairs &Personnel Office, Logistics &Procurement Office, and Internal
Control & Audit Office)29 ｜ CSR Report 2021

I deeply appreciate Dr. Kazuhiro Bai’s valuable remarks again this year.
Koei Chemical established the Koei Chemical KPIs this year in response to the mostimportant issues (materiality) given by the Sumitomo Chemical Group. I appreciate that
this initiative was praised for making a step forward in the practice of our sustainability
management.
We will work to disclose the progress of our KPIs in a way that is easy for our
stakeholders to understand while organizing the corresponding relationship between thisprogress and materiality.
We will embrace Dr. Bai’s advice and continue to make concerted efforts to promotesustainability action, and we look forward to his continued guidance.

│ 会社情報 │（2021年9月30日現在）

会

社

名

英 文 表 記KOEI CHEMICAL COMPANY, LIMITED

所

在

地

東京都中央区日本橋小網町1番8号

U

R

L

https://www.koeichem.com/

立

1917年

本

金

23億43百万円

設資

従 業 員 数407人

事 業 内 容医薬、農薬、塗料、染料、各種合成樹脂の原料・中間体の製造および販売他

決

3月31日

算

日

毎年6月開催株 式 の 状 況

発行可能株式総数･･････････････････････････ 16,000,000株

サステナビリティ

定時株主総会

ガバナンス

株式に関する情報

広栄化学株式会社

広栄化学の概要

会社概要

発行済株式の総数････････････････････････････4,900,000株
株主数･･････････････････････････････････････････ 3,052名

役員一覧

代 表 取 締 役 社 長
社 長 執 行 役 員

西 本

麗

執

行

役

員

河 合

秀 忠

取
専

村 上

修 平

執

行

役

員

鴻 上

博 光

役

役
員

寒 川 公 一 朗

執

行

役

員

坂 本

典 保

役
員

深 堀

敬 子

執

行

役

員

和 田

英 男

役

酒 井

基 行

取 締 役（ 監 査 等 委 員 ）

近 藤

憲 二

社外取締役（監査等委員）

瀧 口健

社外取締役（監査等委員）

東英 雄

社外取締役（監査等委員）

養 老

信 吾

取
常
取
執

務

執
行

取

拠点ネットワーク

締
締
締

行
行
役

締

事業所等

レスポンシブル・ケア役
員

執マテリアリティの取組み役

務

ステークホルダーとの
かかわり

東京本社
〒103－0016 東京都中央区日本橋小網町1番8号
TEL（03）6837－9300 FAX（03）6837－9307
工場・研究所〒299－0266 千葉県袖ケ浦市北袖25番地
TEL（0438）63－5511 FAX（0438）63－5546
ブリュッセル駐在員事務所
Woluwelaan 57, B-1830 Machelen, Belgium
Sumitomo Chemical Europe S.A./N.V.内
株主名

持株数（千株）

持株比率（%）

近畿産業信用組合

240

4.91

種田

103

2.11

広栄化学社員持株会

46

0.96

磯

住友化学株式会社

2,731

修
雅弘

55.84

0.90

33

0.69

阪本

重治

33

0.68

山崎

孝二

26

0.54

住友精化株式会社

26

0.53

西川

23

0.47

会社情報

43

丸石化学品株式会社

宗孝

第三者意見

大株主の状況

（注）･持株比率は、自己株式（8,850株）を控除して算定しております。

CSR報告書 2021

｜ 30

Bringing 100 years of technology and trust,
now and to the future

General Affairs and Personnel Office
1-8, Nihonbashi-Koamicho, Chuo-ku, Tokyo 103-0016, JapanTEL 81(3)6837-9300 FAX 81(3)6837-9307
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