ISK CSR REPORT2019
Company Profile
Company Name

石原産業株式会社
ISHIHARA SANGYO KAISHA, LTD.

Head Office

1-3-15 Edobori, Nishi-ku, Osaka,
550-0002

Founded

September 10, 1920

Capital¥43 billion (As of March 31, 2019)

Employees

Consolidated: 1,642(As of March 31, 2019)

Singapore, China, South Korea,
Overseas Locations Taiwan, Thailand, Philippines, India,(including subsidiaries) Belgium, United States, Brazil,
Argentina

Business
Inorganic Chemicals Business
Titanium Dioxide pigments, high purity
Titanium Dioxide, electro-conductive
materials, ultra fine particle size Titanium
DioxideOrganic Chemical Business
Herbicides, Insecticides, Fungicides, Active
Pharmaceutical Ingredients
Other Business
Biotic pesticides, Animal health products

Basic Philosophy• Contribute to social development, protectionof life and environmental preservation• Respect shareholders, customers, suppliers,
local communities and employees• Abide by laws and regulations; maintaintransparency in business activities

Message from the President

Deepening Our CSR

Kenichi Tanaka

President, Ishihara Sangyo Kaisha, Ltd.

In April last year, we launched our 7th Medium-Term Business
Plan with the target year of 2020, our 100th anniversary year. In
the new plan, we are working to protect and strengthen our
existing businesses, while promoting aggressive initiatives toward
new growth. Our basic policy is to become a chemical company
that is attractive to all stakeholders.
Needless to say, the prerequisite to becoming an attractive
chemical company is to form robust profit foundations that will
enable the sustainable growth of our various businesses. On theother hand, companies are members of society, so must
contribute to society as corporate citizens and be trusted bysociety. In this regard, I believe that it is more important for us to hear carefully our stakeholders and tocommunicate actively about not only our business, but our other activities as well.
In particular, recently, corporate activity is drawing more attention from the perspectives of ESG(Environment, Society, and Governance) and the Sustainable Development Goals (SDGs). These concepts
have much in common with CSR. We are not only being called on to contribute to society through our main
business, namely, providing valuable products that are of benefit to society, but also respond to society’s
demands through corporate activities that are mindful of various social needs, including the environment.
Going forward, incorporating ESG and SDG perspectives into our activities, we will make a company-wide
effort to create new value to help build a sustainable society.
Companies are also members of their local communities. We will aim to become a company that is trusted
by residents of the communities where businesses are located. At the same time, we will work together withthose local communities to help in whatever way we can to solve problems that they are addressing.
CSR is a never-ending theme, that we must approach with flexibility in line with the changes in the times
and society.
We appreciate your understanding of our activities through this report.
ISHIHARA SANGYO CSR REPORT 20191

Medium-Term Business Plan
7th Medium-Term Business Plan (FY2018 to FY2020:April2018 to March2021)
The IS K group will mar k the c entenar y of its
foundation in 2020. As we aimed to achieve thatmilestone, in 2009, we established a vision for the group
to become “a strong and responsible chemical company
with excellent brand power” by 2020. Since then, we had
strived to realize this vision through past three MediumTerm Business Plans.
In the 7th Medium-Term Business Plan (FY2018 to
FY2020), we are working hard under the basic policy of

becoming “a chemical company that is attractive to all
stakeholders.” We made a good start in the first fiscal
year of the plan (FY2018), with business results thatwere well above the plan’s projections, and we were able
to resume payment of dividends. In the second year andbeyond, we will continue to reinforce aggressive
approach to further growth, while continuing to solidify
our footholds in our existing businesses.

Actions in FY2019 (April2019 to March2020)
Inorganic Chemicals BusinessWe will further accelerate our initiatives that shift our
focus from common products to the development andsale of highly functional and high value-added products.
For Titanium Dioxide, we will further expand sales ofpigment for extremely higher weather resistance, which
are growing steadily, and pigments for ink. We will also
focus on increasing sales of pigment for matte finishes,
which is attractive to users. For functional materials,
demand is increasing for high-purity Titanium Dioxide
and Barium Titanate for electronic elements, as well as
for elec tro - c onduc tive mater ials with anti - st atic
electricity. We will steadily establish development,
production, and sale structures that will enable us tofirmly capture the growing demand for these products.

Organic Chemicals BusinessFo r a g r o c h e m i c a l s , w e w i l l f u r t h e r e n h a n c ecollaboration with new business sites that we haveestablished in recent years to expand our overseas sales
and with sales subsidiaries in major markets. We will also
develop sales strategies that are tailored to the needs ofeach region. With these approaches, we will focus on
strengthening the sales and marketing of our own
products. On the production front, we will continue
working to reduce production costs and improve quality
to secure a competitive cost advantage. In the animal
health business, while promoting penetration of the world’s first anti-pancreatitis drug for dogs in the Japanese market,
we will accelerate development of this drug so it can be marketed in the core markets of the United States and Europe.
We will also steadily proceed with the Phase II clinical trial of the anti-cancer drug HVJ-E, which we are developing with
Osaka University. We also work to establish business partnerships with external parties at an early stage.
14

1,100
12.2

12
10

6
4

6.2

5.3

6.8

100
84

100
80
60

1,016

40

1,000

20

980

0
March 2017
ROE（％）March 2018

March 2019

ROA（％）

ISHIHARA SANGYO CSR REPORT 2019

120

1,064

1,040
1,020

5.3
3.7

2

2

1,080
1,060

8

113

1,080

0
March 2017

March 2018

Net sales (x 1 billion yen)March 2019

Operating profit (x 1 billion yen)

Responsible Care Activities
What is Responsible Care (RC)?
Responsible Care refers to the respective activitiesu n d e r t a ke n by c o m p a n i e s t h a t h a n d l e c h e m i c a l
substances. It includes voluntarily approaches to securing“environment, safety, and health,” in all processes, fromthe development of c hemic al subst anc es to their
manufacture, distribution, use, final consumption, and on tot heir disp o s al and re cyc ling. C o mpani e s p rovi destakeholders with their performance of these activities andmake an effective communication with their stakeholder.
The chart at right shows the results of our RC initiatives
evaluated by self-audit.

Results of RC Self-Audit
Environmental protection
5
4
Dialogue with
community

3

Process safety anddisaster prevention2
1

Chemicals
product safety

Occupational
health and safety

Distribution safety

Disaster drill aimed at improving capabilities of process safetyand disaster prevention (Central Research Institute)

Equipment for removing ammonia from wastewater(Yokkaichi Plant)

Trends of investment in environmental measures and safety and disaster prevention measures
Most investment is allocated to the Yokkaichi Plant.
The graph below shows the trends of investment inenvironmental measures and investment in safety anddisaster prevention. In FY2018, we invested intensively

Investment inenvironmental measures(FY)

in pollution countermeasures (water quality), measures
to replace aging equipment, and measures to prepare forearthquakes and other natural disasters.

Investment in environmental measures

Investment in safety and disaster prevention

2018

Pollution countermeasures (water quality)

2017

Energy conservation/CO2 emission reduction measures

Pollution countermeasures (atmosphere)
Pollution countermeasures (noise, vibration, odor)
Industrial wastes/recycling measures
Hazardous chemical emission reduction measures

2016

Soil/groundwater contamination countermeasures
Promotion of greenification
Other

2015

Investment in safety and disaster prevention

2014
0

500

1,000

1,500

2,000

2,500

3,000
(million yen)

Explosion, fire, and leakage countermeasures
Aging equipment countermeasures
Occupational safety/working environment improvement measures
Earthquake and other natural disaster countermeasures
Other

ISHIHARA SANGYO CSR REPORT 20193

Environmental Protection
Yokkaichi Plant
Material balance in FY2018 business activities at Yokkaichi Plant
The material balance in the business activities of Yokkaichi Plant, in FY2018 was as follows.
Yokkaichi Plant

INPUT
Water
Industrial water Sea water
11 million m3
16 million m3

Raw materials and ingredients
Energy (*1)
130,000kiloliters(crude oil equivalent)

Titanium ore
150,000 tons
Other

OUTPUT
Products (*2)

Atmospheric emissions

150,000 tons
(Titanium Dioxide equivalent)

Sulfur oxides
10,000 Nm3
Nitrogen oxides
115 tons(*3)
PRTR Act-applicable substances
9 tonsCO2 emissions from energy
used in production activities
350,000 tons-CO2

Emissions into public
waterways

Industrial wastes
Disposed volumes
116,000 tons
PRTR Act-applicable substances
1,600 tons

Wastewater
27 million m3
COD
42 tons
Nitrogen385 tons
Phosphorous
1.1 tons
PRTR Act-applicable substances
84 tons

Note 1: Energy used includes heavy oil, LNG, steam, and electricity, but their usage volumes are all expressed as crude oil equivalent
figures under the Energy Saving Act.
Note 2: We produce inorganic products and organic products but these are all expressed as Titanium Dioxide equivalent production
figures, using energy consumption intensity under the Energy Saving Act.
Note 3: Japanese pollutant release and transfer register Act

Initiatives for the reduction of industrial wastes
Industrial wastes (inorganic sludge) are generated in
the production of Titanium Dioxide and other products at
the Yokkaichi Plant. The reduction of these wastes is achallenge that our company must address.
As a result of recent activities on reduction, throughinnovations to reduce wastes in the production processes(yield improvement) and in wastewater treatment
conditions (neutralization/oxidation reaction), the plant
succeeded in cutting wastes generation fromapproximately 90,000 tons for the year in FY2013 to justu n d e r 7 0 , 0 0 0 t o n s i n F Y 2 0 18 , a r e d u c t i o n o fapproximately 20,000 tons.
We have projected that we will be able to achieve
further reductions of several thousand tons by continuing
to pursue the above improvements, and we will proceedwith the necessary measures, including installation ofequipment.

4

ISHIHARA SANGYO CSR REPORT 2019

(tons/year)
100,000

Trend in disposed volumes of industrial wastes(inorganic sludge)

90,00080,00070,00060,00050,000
2012

2013

2014

2015

2016

2017

2018 (PY)Central Research Institute(CRI)
The CRI is surrounded by private houses, an elementary school and a high school, and the rice paddies in theinstitute’s north area are also scheduled to be converted
into housing land.
In order to sustain our research activities in such anenvironment, we have concluded an Environmental Safety
Agreement with the city authorities. In this agreement, wehave agreed to conduct day-to-day control based onvoluntary standards for atmospheric pollution, waste
water quality, noise, vibration, odors and other factors thatare more stringent than the standards prescribed by laws
and regulations. We are striving to protect the health ofneighboring residents and to preser ve a favorable
environment.
Odors are regulated according to odor indices based on
the human sense of smell.
Although noise and odor are controlled according tostandards, there are times when certain individuals willfind them more unpleasant than others.
For this reason as well, we are engaging in environmental protection that includes developing the sensitivityof the eyes, ears and noses of all the CRI staffs.

High school
Elementary school

re s Plannide
nt i a e dl areaISK-CRI

Private houses

Vicinity of the CRI

Patrol of institute premises

Trend of Energy Use

Trend of specific energy consumption and year-on-year comparison
at the Yokkaichi Plant
120

Specified company

Specified consignor
Trends of freight volumes and energy use as aSpecified consigner for freight transport are shown in bar
graphs right side.
To reduce our impact on the environment, as aconsigner, we ask our logistics partner companies to bethorough in the pursuit of low environmental-impact
freight operations with efficient transport and delivery
operations (e.g. reducing the number of trucks by usinglarge vehicles, and improving loading ratios) .

Specific energy consumption (kl/t)

1.2

106.3

103.4

96.6

97.6

0.80

0.78

101.9

1
0.8

100
80

0.80

0.83

0.79
60

0.6
40

0.4

20

0.2
0

2014

2015

2016

2017

2018

0

(PY)

Trend of freight volumes and energy use as Specified consigner
Energy use (crude oil equivalent: x 1,000 kl)

The Yokkaichi Plant uses most of energy in ISK. It’s
specific energy consumption in FY2018 was worse than
FY2017 by 1.9%. However in the average figures for the
past five years, it is improved by 0.1%.

1.4

Year-on-year comparison (%)

ISK is a “Specified company“ and the Yokkaichi Plant is a “Type-1 Designated energy management factory“ under the
Energy Saving Act. In terms of freight transportation, we are also a “Specified consigner”.

Freight volumes (x 1,000 ton-kilometers)
5

4

2

50,00048,013
1.8

42,611
1.6

39,436
1.4

45,52647,081
30,000

1.6

1.7

1

0

2014

2015

2016

2017

2018

(PY)

ISHIHARA SANGYO CSR REPORT 20195

Dialogue with Community
Yokkaichi Plant
At the Yokkaichi Plant, we aim to build fur therrelationships of trust with the local community throughcommunication. We do this by holding factory tours
twice a year and special classes for the local junior highschool students.
In our social contribution activities, we voluntarily
conduct clean-ups of the area around the Plant andparticipate in the Suzuka River Clean Campaign, which
is a clean - up activit y held annually through thecollaboration of the community, local government andrelated c ompanies. We c onsider these kinds ofcommunity events is very important. Further, in an effort
to contribute to traffic safety in the region, we havejoined the local Traffic Safety Association and are
involved in traffic safety awareness activities at theroads in the city.
The activities of the Yokkaichi Plant are reported in“Kizuna”, the local information magazine, which isregularly issued to local residents.

Special class at local junior high school

Local information magazine, “Kizuna”

Joint disaster prevention drills with local fire brigade

Central Research Institute(CRI)
The CRI holds voluntary clean-up activities in May
and October, in which CRI staff pick up trashes and pullweeds along their commuting routes. Every time about
60 employees volunteer for this activity, even on theirdays off.
The CRI also conducts the following activities fornearby educational institutions.
In autumn every year, the CRI invites approximately
100 students in the science courses at the high schoolfor the CRI tour. This tour provides them with the opportunity to learn about the research and development ofagrochemicals. Results of the post-tour questionnaire
show that the tours are very useful for students in deciding future courses. The neighboring elementary school
is engaged very passionately in environmental education, receiving accreditation as an Eco School from local
Government for six years continuously. There is an Eco
School Support Committee, comprised of prefectural

6

ISHIHARA SANGYO CSR REPORT 2019and municipal agencies, neighboring companies, andschool officers. Two people from the CRI participate as
members of this committee and cooperate with its activities.

Volunteer clean-up

TOPICS Interview with Director of Finance & Accounting Headquarters

Aiming for Active Communicationof CSR Activities
Director of Finance & Accounting Headquarters

Yasunobu Kawazoe

Q1

In recent times, investors’ interest
has turned to corporate governance,
environmental contributions, social
initiatives and the like. Could you tell
us current topics?

Recently institutional investors have emphasized more
for company engaging in ESG initiatives. There is a trend
among investors to select companies for the investment
under several conditions. Investing to companies that areconsiderate of ESG is commonly named as ESG
investment. Many institutional investors around the world
are doing the ESG investment and the total amount ofthem is very increasing. According to recent newspapers,
in the ESG trend investors’ interest is overwhelmingly
governance (G), followed by environment (E). In respectof governance, there is a need to check whether board
members are monitoring the company according to thegover nanc e c ode indic ated by the Tok yo Stoc k
Exchange, and whether the company is being operated
with transparency. I believe ISK is becoming a well
regulated company in terms of governance. We reported
those corporate circumstances to date, but moving
forward we should communicate those ESG perspectives
more, so that external parties can use the information in
their assessments.

Q2

Could y ou t ell us about an ydistinctive features of the company’s
initiative for the environment?

The environment is one area that society has always
had a strong interest in, but recently responses to single
issues are tending to change drastically. For example, thepollution of the oceans with plastic wastes has ever beena problem, but these days plastic removal at convenience

stores and in the fast food industry have been proceeding
rapidly. In terms of our own situation, we have a coal-fired
boiler that is used to generate electricity to run our plant.
However, if we would upgrade that coal-fired boiler, someof institutional investors have already concluded that they
don’t lend us the money. Activities to prevent global
warming and promote the use of clean energies are
expected to accelerate into the future. Under thesecircumstances, it is time for us to consider how to secureenergy.

Q3Based on trend in society, what are
your thoughts on future developments?

At the beginning of this year we havereceived ESG/SDGs assessment by external party.
Although the result of assessment is reasonably good,wewant to aim even higher in the future. There are several
things we will need to do to achieve this. Firstly, in ourcore businesses, we need to clarify what parts of ourinorganic and organic chemical businesses are related tothe environment (E) and society (S), and how they arecontributing. Having done that, we will need to leverage
our strengths to pursue CSR activities and commit to our
responses to the ESG /SDGs. There are various key
points, but the first thing we need to do is to build
nec essar y str uc tures in line with the c or por ate
governance code.

Q4

To seek the various measures you
have mentioned, what will you needin the perspectives of organizationand human resources?

These measures will be company-wide initiatives, so I
think we will need to set up a new Preparator y

ISHIHARA SANGYO CSR REPORT 20197

TOPICS Interview with Director of Finance & Accounting Headquarters
Committee, and we will also need to raise awarenessamong all employees. For other necessary steps we will
appoint more outside directors, be more innovative for thecontents of the CSR Report and the information about

Q5

Please show a final message?
Prec isely bec ause IS K has goneenvironmental measures and performance data on thethrough many and var ied exper ienc es, ISK was

website. CSR Reports, which are prepared voluntarily by

evaluated as having dealt with ESG. However, it hascompanies, disclose to external parties the company’s

been pointed out that communication to the society is

initiatives in social contributions, and the like. Howeverstill not sufficient. If we communicate our various

there is the risk that they could take on a self-righteous.

activities well, I believe that we can change ISK more

ESG, on the other hand, can be understood as animpressively to external parties. We continue our efforts

evaluation of the company in the eyes of society. It is

to obtain higher ESG evaluation score three years later

important to develop our evaluation criteria for checking

from the perspectives of ESG and SDGs. For thewhether the organization and its business activities are

purpose we need our awareness and steady efforts.

acceptable to the society, to ensure no gap between CSR
and ESG activities. Therefore we also need to refer to theexamples of other companies.

ISK Employees’ Approaches to Environmental Protection and Social Contributions
Masaya Yamaguchi, Production Div.
Our top priority in our day-to-day
production activities is to haveno incident, no disaster and nopollution. We will continue these
efforts and aim to be a plant that istrusted by the people of the area.

Takayuki Kashima, R&D Div.
While retaining the current selection criteria that are considerate of
the environment and beneficial organisms, we will develop and reliable agrochemicals that consumers
and growers would like to have.

8

ISHIHARA SANGYO CSR REPORT 2019

Ema Fukumori, Development & Marketing Div.
We aim to contribute to society
by hearing opinions from growers
and cooperating with relevant
departments to provide theproducts that growers want.

Noriaki Yamamoto, Procurement Div.
To embody the ISK’s corporate
philosophy of contributing tosociety, life, and the environment,
we are putting efforts into green
procurement, purchasing raw
materials and ingredients thathave less burden on the environ
ment.