AICA GroupCSR Report

2020
AICA Group CSR ReportCorporate Principle

Challenge and Creation
Corporate philosophy

Through a philosophy of symbiosis,
the AICA Group will create new value andcontribute to society through endless innovation.
Corporate Policy

1 Chemistry and design

We create unique products through the power of chemistry and design, and contribute to therealization of a prosperous society.

2 Group synergy

We create group synergy with the continuous collaboration of the technologies / materials.

3 No.1

We expand the top-share products we have in our business fields and regions.

4 Global

We enhance our production/sales bases and human resources overseas, and aim for sustainablegrowth in the global market.

5 Human resources and organizations

Human resources are the most valuable resource to the company. We build vibrant humanresources as well as organizations through mutual understanding and growth.

6 Compliance management

We promote fairness and transparency by complying with the laws and the regulations and thesocial order.

7 Commitment to safety and security

We emphasize on engagement with stakeholders, and pursue “environmentally-friendly businessactivities” and “securing quality that can be trusted”.

1

AICA Group CSR Report 2020

INDEX

Company Overview (as of March 31, 2020)
Company NameAICA Kogyo Co., Ltd.

■ About AICA

Headquarters
Location

JP Tower Nagoya, 26F,
1-1-1 Meieki, Nakamura-ku,
Nagoya, Aichi, 450-6326,
Japan

Date Established

October 20, 1936

Representative

Yuji Ono, Representative
Director and President

Capital9,891 million yen

Employees

Consolidated: 4,781
Non-consolidated: 1,239

03 Financial and Non-Financial
Highlights

05 Message from the President
09 Virtuous Circle Model and Core
Competences

11 Transformation of Value
Creation

13 Genealogy of the Power ofChemistry

15 Our Businesses
17 Group Network■ AICA’s Vision
19 Progress of AICA’s 10 Years
Vision and Medium-TermBusiness Plan

21 Medium-Term Business Plan

Growth drivers for the creationof new value

25 Business Overview: Chemical
Products Business

27 Business Overview:Construction Materials
Business

Editorial Policy
This report has been prepared with the intention ofcommunicating the AICA Group’s CSR-related activities
to our stakeholders (customers, shareholders, suppliers,
local communities, and employees) in easily understoodways, using graphs, photographs, and other means.

Reference Guidelines● ISO26000● Environmental Reporting Guidelines (2018 Edition),
Ministry of Environment● GRI Standards

Target Period/Scope
This report is a summary of the activities of the AICA
Group in FY2019. It also includes information about some
activities from FY2020. The target scopes can be foundin the content of the report.

AICA’s CSR Communication
AICA GroupCSR Report(Booklet/PDF)(Japanese/English/
Chinese)Annual report of the CSR
activities of the AICA
Group.

■ Fundamentals of AICA
29 AICA’s CSR Activities
31 AICA Group’s Materialities
33 Business Infrastructure
43 Human resources
49 Environment
55 Engagement with Stakeholders
60 Third-Party Opinion

AICA Website<CSR Activities>
Supplementary
information and PDF
data of the CSR Report
http://www.aica.co.jp/company/environ/Contact for inquiries about this report● Corporate Planning Department Tel: 052-533-3136● Safety and Environment Department Tel: 052-443-5941

AICA Group CSR Report 20202

About AICA

Financial and Non-Financial Highlights

Financial and Non-Financial Highlights
About AICA

Profit attributable to owners of parent / ROE / ROA

Net sales / Operating profit / Ordinary profit(×100 million yen)(×100 million yen)

2,000

1,500

1,000

1,913
1,500

161

163

1,516
180

183

1,915

300

(×100 million yen)

(%)

200

12.0

1,637
190

196

208

212

208

213

9.9%

10.1%

10.7%

9.4%

6.6%

7.0%

6.8%

7.0%

110

119

133

9.9%
9.0

150
200
100
99

6.5%

6.0

127

100

AICA’s Vision

500

3.0

50

0

0
2015

2016

Sales Revenue (left axis)
Ordinary profit (right axis)

2017

2018

0

2019 (FY)02015

Operating profit (right axis)

Foundations of AICA

(×100 million yen)(%)(×100 million yen)

50.0

2,000

800

33.2%

30.8%

600
498
400

466

33.4%

803

40.7%
779

546

70.4%
40.0
30.0

10.0

0

0
2016

2017

Overseas sales revenue (left axis)

2018

1,759.91

1,880.13

1,500

1,000

1,936.87

203.95
152.62

169.48

66.2%

1,326

1,361

63.9%
1,444

183.76

1,994.03

500

20.0

0

0
2016

2017

2018

2019 (FY)

Total assets (left axis)
Net assets (left axis)
Capital adequacy ratio (right axis)

Dividend / Payout ratio
(yen)

(yen)

(%)

250

150

60.0

195.01
150

100

50

103

92

85

30.1%

50.5%

50.1%

50.2%

200

500

54.4%
106

40.0

20.0

46

50

0

0
2015

2016

Net assets per share (left axis)

2017

2018

0

2019 (FY)02015

Net income* per share (right axis)

2016

Dividend (left axis)

2017

2018

2019 (FY)Payout ratio (right axis)

Capital investments / Depreciation / R&D expenditure

Cash flow from operating activities(×100 million yen)(×100 million yen)

200

100

183

182
164

78.9

80

146

71.3

132
60

100
40
50

34.9
29.3
25.9

38.7

45.2
34.5
26.7

35.6
28.5

2016

2017

41.7
32.0

46.2
34.5

20
0

0
2015

2016

2017

2018

2019 (FY)2015
Capital spending

3

60.0

40.0

2015

100

150

1,196

64.7%

80.0

1,000

Ratio of overseas sales (right axis)(yen)

1,654.14

69.8%
1,646

1,125

2019 (FY)Net assets per share / Net income per share
2,000

1,500

1,534

(%)

2,036

1,910

1,896

20.0

200

2015

2019 (FY)

Total assets / Net assets / Equity rate

1,200
42.0%

2018

2017

Profit attributable to owners of parent (left axis)
ROE (right axis)
ROA (right axis)

Overseas sales / Overseas sales ratio

1,000

2016

AICA Group CSR Report 2020

Depreciation

2018
R&D Expenditure2019 (FY)(TJ: Terajoules)(t-CO2)2,000

100,000
1,829

88,137

1,818

❹ 31

1,500

80,000❸ 555

971 1,029

1,000

1,179 1,129

1,221 1,208

1,200

66,18660,000

1,100

252 ❷
927

84,61061,22020,000 36,173

641

52,190

0
2015

2016

Production sites in Japan

2017

2018

2019 (FY)2015

Overseas production sites

2016

Production sites in Japan① Newly consolidated in FY2015 ② Newly consolidated in FY2016③ Newly consolidated in FY2018 ④ Newly consolidated in FY2019

2017

2018

2019 (FY)

Overseas production sites① Newly consolidated in FY2015 ② Newly consolidated in FY2016③ Newly consolidated in FY2018 ④ Newly consolidated in FY2019

Industrial waste emission volumes

Water consumption(1,000 m³)(metric ton)

60,00053,322

2,514

2,382

2,291

2,241
850 ❷

2,000

998

802

745

1,381

1,137

20,000

❸ 325

1,664

24,602

428

0
2015

2016

Production sites in Japan

2017

2018

2019 (FY)

2.50

20

2.00
1.50

4 ❷

3
❶ 2
1

0

2015

6

1.00

7

10

0.50

2

0
2016

2017

2018

2019 (FY)

66.7%
61.7%
56.0%
45.0%

11.3

(people)

60.0

5,000

40.0

20.0

0

0
2018

2015

2016

2017

0.00

0.00
2018

0.005
2019 (FY)4,7812019 (FY)

Average rate of paid leave taken (right axis)

Target periods: Until FY2017: September 16 of previous fiscal year to September 15 of current fiscal year
From FY2018: March 16 of previous fiscal year to March 15 of current fiscal year
Target employees: Employees of Aica Kogyo Co., Ltd., excluding people on temporary assignment,child-care leave, and leave-of-absence, and part-time and casual workers

3,328

3,349

1,818

1,820

1,510

1,529

2015

2016

3,850

3,920

2,291

2,317

1,559

1,603

1,625

2017

2018

2019 (FY)

3,156

3,000
2,000
1,000

2017

0.05

4,000

10.3

8.2

2016

0.05

Headcount (Japan / Overseas)

(%)

3

2015

0.00

12.1

40.6%

Average number of days paid leave taken (left axis)

0.82

Target scope: All AICA Group production sites in Japan

Average days paid leave taken / Average rate of paid leave taken(days)

0.84

Industrial accident frequency rate
Industrial accident severity rate
Industrial accident frequency rate National manufacturing industry average① Newly consolidated in FY2015 ② Newly consolidated in FY2016122019 (FY)

1.41

Total number of industrial accidents
Lost-time accidents
Target scope: All AICA Group production sites in Japan

7.5

2018

1.73

14

7
8

2017

Overseas production sites

18

17

5

2016

*Frequency rate = Number of fatalities and injuries caused by industrial accidents(excluding non-lost time accidents) x 1,000,000 ÷ Total work hours*Severity rate = Work-days lost × 1,000 ÷ Total work hours
Both sets of figures are for permanent employees

3.00

25

5 ❶

6,039

3,095

Industrial accident frequency rate/Severity rate

(accidents) *Total industrial accidents = non-lost-time accidents + lost-time accidents

13

6,611 ④572

3,903 ③808

3,998

3,947

① Newly consolidated in FY2015 ② Newly consolidated in FY2016③ Newly consolidated in FY2018 ④ Newly consolidated in FY2019

Number of industrial accidents

10

9,402

Production sites in Japan① Newly consolidated in FY2015 ② Newly consolidated in FY2016③ Newly consolidated in FY2018 ④ Newly consolidated in FY2019

15

3,044
2015

Overseas production sites

20

17,045 ❶

1,363

812

0

15,220 ❷26,447❹ 18

43,16342,23239,82240,0001,602
1,000 1,174 ❶Foundations of AICA

3,000

6

60,67949,315

1,274

0

9

❸ 26,917

AICA’s Vision

500

56,764

13,996 ❷ 55,206

63,13240,000 18,001 ❶

1,787

330 ❶

54,17464,38685,942❹ 1,332

About AICA

Greenhouse gas emissions

Energy input

0Group companies in Japan

Overseas Group companies

AICA Group CSR Report 20204

About AICA

Message from the President
About AICA
AICA’s Vision
Foundations of AICA

1

Looking Back on the Year Ended
March 2020

Consolidated business results for the year ended March
2020 were net sales of 191,501 million yen (+ 0.1% year-onyear), operating profit of 20,850 million yen (+ 0.1 %), ordinary

2

The Impact of the COVID-19
pandemic and Our
measurements*1*1. Based on the situation as of the end of June, 2020

■ Impact on Plants and Raw Materials Procurement

profit of 21,333 million yen (+ 0.4%), and profit attributable to

Due to the spread of the COVID-19, some of our overseas

owners of parent of 12,732 million yen (- 4.4%). Net sales, op-

locations temporarily suspended its operations. All plants haveerating profit, and ordinary profit were the highest on record for

now resumed its operation. In raw materials procurement,

the eighth consecutive year.

BCP measures proved effective and there was no major im-

The domestic construction market environment, which ispact. We fulfilled our supply responsibilities to our customers.

one of our major fields was sluggish in both the residential and5

non-residential segments. However, our AS (Aica Solution)■ Strengthening of BCP and Promotion of Work Style

product range, designed to contribute to solve social problems,

Reformperformed well than expected despite the market environment.

Experiencing the global pandemic of the COVID-19 has

Due to low raw material prices in our existing overseas

brought a number of issues in our raw materials procurementbusinesses, there was decrease in net sales while there wasand operation systems. We take measures to ensure that we

increase in profits. We also fulfilled five M&A projects and en-

are able to secure raw materials under any circumstances

hanced our business foundations.

by having multiple suppliers, we will decentralize in different

AICA Group CSR Report 2020

About AICA

CSR is our management axis:
AICA’s Vision

we strive to be a corporate entity
the society needs. We continue toFoundations of AICA

develop sustainably.
Yuji Ono

Representative Director and President

countries and regions. We will also decentralize and multiply

to business solution. We shall continue to identify new needs

our production sites to optimize our structure for fulfilling our

promptly and expand our product range that could contributeresponsibilities as a supplier.

to society.

Furthermore, answering to the government call, we quickly
introduced remote work for some sites in Japan and overseas.
In Japan, we discontinued remote work after the government
lifted the state of emergency. We have set up structures to

3

To Achieve AICA’s 10 Years Vision (→P19)

respond flexibly, depending on the circumstances. At our pro-

Our Medium-Term Business Plan “C&C 2000” (→P20) is induction sites where the remote work is not possible, we haveits final year this fiscal year. Unfortunately, due to the COVID-19

enforced even more stringent measures.

pandemic, some of our financial targets would most likely to
be unachieved. However, we shall continue to implement the■ Product proposals for new lifestyles

various measures described below, in line with the policy set

This year, the world underwent a complete transformation and

in C&C 2000 towards the sustainable growth. We identify whatsocial norms have changed toward the co-existence with the

we need to do now for the AICA’s 10 Years Vision and shallvirus. Under these circumstances, our antiviral construction

invest appropriately to R&D and equipment.

material range, Virutect (Visus Protect) Series, launched lastyear, is being incorporated into this new lifestyle. As explained■ AS Product, Virutect Series antiviral construction materials

in the AICA Virtuous Circle Model (→P9), we have listened to

We have designated products that help to solve a variety of

all our stakeholders and developed products that contributesocial problems as AS (Aica Solution) products and focusing

AICA Group CSR Report 20206

Message from the President

About AICA

our efforts on their development and sales expansion. Inquiries
about the range of antiviral construction materials, Virutect
Series, which we launched last year, have increased sharply.
It has begun with the launch of the high pressure laminates(HPL), AICA Virutect. It then expanded to CERARL for walls
and Postform Counter, the U.D. COMFORT door for medical and nursing homes and toilet booth. It has now been introduced to various settings, including medical and nursing

AICA’s Visionhomes, childcare centres, educational institutions, shops andrestaurants, offices, factories, and housing.
We are striving to grow Virutect Series sales to 5 billion
yen in three years’ time. to achieve this goal, we would needto capture all the possible needs by applying the antiviralproperties to various products, for floorings, walls, furnituresand building material applications both in the residential andFoundations of AICA

non-residential markets.

■ Strengthening Specialty & Performance Materials being
responsible for the Next Generation
The focus of our efforts to build a stronger corporate constitution through business diversification is the Specialty &Performance Materials business. We are pursuing the expansion of product and sales increase of products for the
non-construction sector, such as automobiles, electronic
devices, hygiene products and clothing. Evermore Chemical
Industry Co., Ltd. (EMC) joined the AICA Group in January
2018. They acquired a urethane manufacturer in Vietnam
in July 2020 and has expanded further. EMC holds a large

CSR-oriented Management, Balancing Economic
and Social Values

share in the global market for polyurethane systems (PUS) for
trainers’ soles. They also have advantages in the fields where

AICA is a company that operates business globally. And,AICA has never explored, such as textiles for clothing and

we strongly believe that it is our duty to address the social

cross-linking agents for food packaging. We shall continue toproblems in the world sincerely and conduct corporate activi-

leverage EMC’s advanced resin design technologies and gain

ties to solve those problems. We are dedicating to deepening

shares in new markets and fields.

our activities and strengthening our corporate structures. As■ Strengthening of overseas businessIn December 2019, four Wilsonart companies in the Asia/such, we enable to be united as a group to confront towards
social agendas, including the Sustainable Development Goals(SDGs).

Oceania region joined AICA Group. Wilsonart is an US-based
global manufacturer of high pressure laminates (HPL). In

7■ Strengthening of Frameworks for Promotion of CSR

March 2020, AICA HPL Trading joint stock company that took

From the perspective of strengthening the supervisory func-

over the CHI Group, a Vietnam-based HPL sales companys’tion of the Board of Directors over the CSR Committee, whichbusiness joined AICA Group. With such acquisitions, AICA

leads AICA’s CSR initiatives, CSR Committee would now report

Group’s construction materials business platform in the Asia/

to the Board Meeting instead of the Management Meeting. To

Oceania region was streamlined enormously.

strengthen CSR collaboration with our overseas Group com-Through aggressive M&A activities, our overseas businesspanies, AICA Asia Pacific Holding Pte. Ltd. welcomed a Seniorobtained production sites, sales networks and bench strength.

Manager, Sustainability & Operation Excellence. We launched

Our business has become even more resilient with the en-

the Climate Change Response Project in April 2020 in orderhancement of various skills and knowledge. We will strive

to strengthen support to climate change issues. Working to-to optimize our sales strategies by making the most of ourgether with the development and production divisions as well

Chemical Products and Construction Materials Businesses.

as the administrative divisions, this project will consider and

AICA Group CSR Report 2020

About AICA

countenance to the TCFD. We intend to pursue the appropri-

environmental indicators. In May 2020, we expressed ourate information disclosure related to climate change.

Frameworks for Promotion of CSR Since April 2020...Changes in Frameworks

Board of Directors
Supervision

Chairperson:

Satoshi Toudou, Director and Senior Managing Executive
Officer

CSR Committee

Various Committees and Projects
・Corporate Ethics Committee
・Internal Control Committee

Vice Chairperson: Ryoji Mori, Director and Managing Executive Officer
Secretariat:

Corporate Planning Department

Members

Corporate Planning Division, Purchasing Division,
Human Resources Division, Quality Assurance Division,
General Affairs Division, Legal Division,
Safety and Environment Division,
Sales Administration Division, Overseas Planning Division,
Research and Development Division,

・Information Management Committee

Coordination

・Business Continuity Plan (BCP) Committee
・Overseas Group Governance Committee
・C&C Promotion Committee
・QEO Committee

・Security and Trade Control Committee
・Climate Change Response Project・Work Style Reform Promotion Project

AAPH* Sustainability Division

・Diversity Promotion Project Etc.

*AICA Asia Pacific Holding Pte. Ltd.

■Strengthening of Corporate Governance
In June 2020, we transitioned to a Company with Audit andbuild a framework that would meet our stakeholders’ expecta-

Foundations of AICA

Group companies in Japanand overseas

AICA’s Vision

ReportingHeads of departments
and divisions

About AICA

implement measures aimed at drastic improvements in ourtions in Japan and overseas.

Supervisory Committee with the objective of improving theWe also launched an Overseas Planning Department and antransparency of our management. The Audit and Supervisory

Overseas Group Governance Committee with the objective ofCommittee consists of more than half of external directors, isstrengthening governance in our overseas Group companies.

responsible for auditing and supervising the legality and ap-

Given the current situation, with the sharp rise in overseas

propriateness of the execution of business. As such, we areGroup companies through M&As in recent years, we have set

able to enforce our corporate governance further and also tothese divisions up to strengthen structures.

Diagram of Transition to a Company with Audit and Supervisory Committee● Company with Board of Auditors● Company with Audit and Supervisory Committee(from June 23, 2020)

General Meeting of Shareholders

General Meeting of Shareholders

Appointment/Dismissal

Appointment/Dismissal

Appointment/
Dismissal

Board of Directors

Board of Auditors

Board of Directors

Appointment/Dismissal

Audit and Supervisory Committee
Audit

Audit andSupervision
External External

External

External External

External

8 Directors

4 Corporate Auditors■To realize a corporation that develops sustainably

8 Directors

External External
1 Director who
2 External
is a Member Directors who areof Audit and Members of Audit
Supervisory
and Supervisory
Committee
Committee

the one that the United Nations Global Compact (UNGC) has,

Our corporate philosophy includes the word, “Symbiosis”.

we announced our participation in UNGC in 2019. We aim to

We are responsible to all our stakeholders. In fact, we haverealize a corporation that is needed by society and that grows

been ensuring for business activities and product develop-

sustainably, holding CSR at the core of its management.

ment that are environment and human beings-conscious.
Recognizing that AICA’s ideology has much in common with

AICA Group CSR Report 20208

About AICA

Virtuous Circle Model andCore Competences
About AICA

Virtuous Circle Model Concept
Through engagement with our stakeholders, the AICA Group identifies social issues and acknowledges them as risks, as well as
turning them into business opportunities. We will achieve social contribution and sustainable business growth by developing andexpanding sales of our AS (Aica Solution) products that solve social issues.

AICA’s Vision

Virtuous Circle Model to Balance Financial and Non-financial Matters■ Global warming■ Depletion of natural resources■ Labor shortages/diversity

Identify social
issuesFoundations of AICA■ External environment■ Risks and opportunities■ Competitive advantage

Chemical
Products

Leveraging
our strengths tosolve social
issuesConstruction
Materials

Engagementwithstakeholders■ Customers■ Suppliers■ Employees■ Local communities■ Shareholders

Group companies
Human resources/
Technology Business
infrastructure■ AS products' sales
expansion

Contribution tobusiness results
Enhance a
corporate
value

Corporate entity
recognizedby society

The AICA Group and the SDGs
As a company that operates business on a global scale, by signing the UN
Global Compact, the AICA group has committed to working toward the Sustainable
Development Goals (SDGs) and has commenced various activities to achieve them.
We reviewed our materialities in FY2018, and sorted out the relevance between theissues in the materialities and the SDGs, clarifying anew the important businessactivities that the AICA Group should undertake to tackle global social issues.
We will tackle social issues through various corporate activities hand in hand withthe stakeholders and contribute to the sustainable society.

AICA Group CSR Report 2020

Contribution tosociety throughbusiness
activities■ Environmental load

■ Sustainable growth of net sales and profit■ ROE 10% or more
■ Building of risk-resistant portfolio■ Healthy financial base9

■ Synthetic chemistry technique■ Design strengths■ Robust distribution frameworks■ M&A

reduction■ Sustainable societyAbout AICA

3 Core Competences to Accelerate the Virtuous Circle Model
The AICA Group has attained the top market share in specific sectors. We continue to provide products that are essential
to the world. We have three unique strengths. We are a chemical company but operates in the design domain, proposing
finely detailed solutions with its global network.

Foundations of AICA

Chemicaltechnologies

The chemical technologies we have cultivated sincecompany’s establishment, have been the foundationof our business. Having resin synthesis technology as
our core technology for various adhesive products,
we enable to develop innovative products by applying
such technologies to the construction materials andSpecialty & Performance Materials. We strive to solve
social issues with the power of chemistry and enrich
our lives.

AICA’s Vision

We provide highly original products with our proprietary technologies.

We create new value with the power of design.

DesignSending products out into the world that incorporate
the latest trends, centering on our high pressure laminates (HPL) that have the top share in Japanese market, we have established a firm position as a building
materials manufacturer that adorns spaces.
As well as proposing the beauty of colors and patterns, we take social issues that we have identified
through communication with our stakeholders anddesign easy-to-use shapes, safe structures, and innovations that lead to health and security. We create newvalue with the power of design and build a pleasantfuture in which anyone can live comfortably.

We have developed frameworks that enable meticulous response.

Sales Network

We have developed sales networks to deliver our
products to our customers promptly. In Japan, as well
as locating sales offices in various parts of the country,
we have formed the AICA Distributors’ Organization,
an association of distributors with a wealth of specialist
knowledge about our products.
Overseas, predominantly in the Asian region, we areusing M&As to expand our overseas sales network.
We have established separate holding companies
overseas for the Chemical Products and Construction
Materials Businesses. Through this, we are identifying
local needs that are rooted in the local regions and pursuing the localization of our businesses overseas.

AICA Group CSR Report 202010

About AICA

Transformation of Value Creation
About AICA

With the resin synthesis technologies that we have cultivated since our foundation at the core, we have re-organized our portfolio of
businesses flexibly in line with the times. Our spirit of challenge and creation, including challenges in new businesses and the use ofsynergies, has been passed down from the past to the present.
Net sales (billion yen)

200
Shift towards building
materials manufacturer
AICA’s Vision

Establishment of business foundations
during the economic growth160

Transition of business from arms
industry to peace-time industry
Jacks/Other
Chemical
Products 18

120

Laminated
sheetsSpark plugs
14%%

Foundations of AICA

Ceramics

Building andhousing
materials
34%

Chemical
Products
1966/11

1976/11

17.5

32%

38%

billion yen(non-consolidated)

46% 3.29 billion yen(non-consolidated)

1946/12 *1

Chemical
Products

28%

46%
NO DATA(non-consolidated)

22%

Paper
manufacture23%

Laminated
Laminated sheets
sheets

*1 No data exists due to the turmoil after the War ended,so figures are only for the single month of December 1946.

80

1965–
Izanagi economic boom

1973
1st oil crisis

1949

40

Dodge Line announced

Number of new housing starts (right axis)
High pressure laminate (HPL) plant completed
in 1959

Established 1936

1940/11

Tokyo Olympics
TokyoOlympics

1945
End of World War II

1950/11

1936~1945

1946~1954▶Launched Japan’s first urea-based
resin adhesive, "AICHI-MUTEKI-NORI"(1939)

1964▶Launched melamine resin-baked
paint (1951)

1960/111955~1966▶Launched “AICA” high pressure
laminate (HPL) (1960)

1970/111967~1976▶Launched “AICA POSTFORM”(1968)▶Launched wall coating material“JOLYPATE” (1975)

Social Background and Products Created by the AICA Group

1936

1960s–1970s

Late 1980s

Development of Japan’s first synthetic
resin adhesive

Contribution to developmentof odorless plywood

Use of rubber trees that had been discarded
as scrap

We developed a urea-based resin adhesive withstrong adhesive properties and water resistance.
This drove the shift from natural adhesives tohigh-performance synthetic resin adhesives.

To increase productivity of plywood
in response to expanding demand,
we developed a no-clamp melamine
urea formaldehyde resin adhesive.
We encouraged increased use ofthis adhesive, which has low formaldehyde detection, and odorless plywoods were born.

Rubber tree wood left over from the sap extraction process
was recycled into laminated lumber and turned into stair
components and counters. This attracted attention as apioneering concept in the effective use of forest resources.

Patent for
urea-based
resin adhesive

11

AICA Group CSR Report 2020

We were awarded
an honor fromthe Sultan of the
Malaysian state of
Kedah.

Construction
Construction
Incorporates
Incorporates
non-residential
non-residential
market andmarketachieves
and achieves
MaterialsMaterials
growth despite
growth deteriorating
despite deteriorating
market environment
market environment
Electronics/
Electronics/
Other Other

24%

24%

17%

ChemicalChemical
ProductsProducts

17%

1996/3 1996/3

ChemicalChemical
ProductsProducts

2020/32020/3
54%
billion yenbillion
yen 54%
46% 191.5
46% 191.5
Net salesNet
increases
sales increases
with
with
(Consolidated)(Consolidated)addition additionof new subsidiaries
of new subsidiaries
2008(Consolidated)(Consolidated)
31% 31%
28% 28%

2007

1991

2007

Revision of
Revision
Buildingof BuildingStandardsStandards
Law, prompted
Law, promptedby earthquakeby earthquake
resistanceresistancedata falsification
data falsification
scandal scandal

1991

Collapseeconomic
Japan’sofCollapse
Japan’s
Japan’s
economic
bubbleofeconomic
Japan’scollapse
bubbleeconomic
bubblecollapse
bubble1989

19851989

average
Nikkeireaches
averagerecord
reacheshighrecord high
Plaza Accord
PlazaNikkei
Accord1979

1979

2nd oil crisis
2nd oil crisis

Area of private-sector
Area of private-sector
non-residential
non-residentialbuilding starts
building(rightstartsaxis)(right axis)

OperatingOperatingprofit (rightprofitaxis)(right axis)*2

1980/111980/11

360

360

320

320

280

280

240

240

200

200

160

160

120

120

80

80

40

40

Foundations of AICA

1985

400

Global Financial
Global Crisis
Financial Crisis

Laminated
Laminated
Laminated
Laminated
sheetssheets sheets
sheets

heets

2008

400

AICA’s Vision

yenbillion yen
64.6 billion
64.6

Building andBuilding andhousing materials
housing materials

Area of private-sector
Area of private-sector
non-residential
non-residential)building starts
building(millionstartsm2(million
m2)

About AICA

Uses M&As
Uses
toM&Asbuild atoplatform
build a platformthat would
thatnotwould
be not beOperatingOperating
profit (x 100
profitmillion(x 100yen)million yen)swayed swayedby Japanese
by Japaneseconstruction
construction
market trends
market trends
Number of
Numbernew housingof newstarts
housing(x10,000
starts (x10,000
units)
units)*2

1990/3 1990/3

2000/3 2000/3

2010/3 2010/3

2021/3 2021/3*2 Covers only
*2fourCoversmonthsonly duefour tomonthsthe change
due tointhe
thechangeend of thein thefinancialend ofyear.
the financial
NB: Consolidated
year. NB: Consolidated
accounting beganaccounting
from thebegan
yearfrom
ended
theNovember
year ended
1979.
November
All accounting
1979. Allyears
accounting
prior toyears
that areprior
non-consolidated.
to that are non-consolidated.

1977~1986▶Launched premium wooden door
“EASTERN CHERRY DOOR” (1978)▶Launched high pressure laminate(HPL) “AICA COLOR SYSTEM 105”
(1984)

1987~1994

1995~20092010~▶Captured top share of Japanese
HPL market▶Launched melamine noncombustible
decorative panel “CERARL” (1989)▶“CERARL” becomes a huge successas kitchen panel (1996 -)▶Inaugural edition of “Environmental
Report” (1999)▶Acquired shares in subsidiary of
Dynea’s Asia-Pacific division (2012)▶Acquired shares in Evermore Chemical
Industries (2018)▶Acquired shares in Wilsonart subsidiaryin Asia-Pacific region (2019)1990s–2000s

2010

2017–

Compliant to sick house syndrome

Support forest resources protection

From the 1990s, hypersensitivity to chemical substances, as exemplified by sick house syndrome, became a serious social problem.
In response to the Revised Building Standards Act of 2003 and theMinistry of Health, Labor and Welfare guidelines of 2002, we launched
AICA ECO-ECO BOND, a healthy-housing adhesive that contained norestricted substances such as formaldehyde, toluene, and xylene.

We were the first Japanese manufacturer of high pressure laminates (HPL) to obtain Forest Sustainability
Council (FSC/PEFC) certification for certain of our
HPL products. Subsequently, we were awarded the
Biomass mark for those same products and for someof our decorative board products.

Development andexpansion sales ofAS products

AICA ECO-ECO
BOND when it
was first released

High Pressure
Laminate (HPL)

Polyester Decorative
PanelsMarless Board

We positioned product ranges
that contribute to the solution ofsocial issues as AS (Aica Solution)
products and concentrated ourefforts into developing and expanding sales of those productranges. The objectives of those
products are many and diverse,
including alleviating labor shortages, reducing waste, and building safe cities.

AICA Group CSR Report 202012

About AICA

Genealogy of the Power of Chemistry
The chemical technologies we have attained since the company’s foundation are AICA’s core technologies and an important pillar increating highly original products. Our history began with the development of adhesives. Then, it has been passed onto the respective
businesses that have branched out from those beginnings, and continues to evolve today.
About AICAAICHIMUTEKINORIJOLYPATE

Developed Japan’s firsturea-based resin adhesive
Selected for propeller, etc.
AICA’s Vision

Signed agreementwith French company,
CEGECOL, andentered the wallfinishing materials
segment.

Epoxy
Polyurethane

Succeeded indeveloping
hard Polyurethane
resin Floor
Coatings

Polyurethane

Solvent-based CR
EpoxyFoundations of AICA

Polyvinyl acetate
PF

MF

Hot melts

Acrylic

JOLYACE

AICA PUR

JOLYSEAL

Silicone

Acrylic/UV-curable resin

High Pressure Laminate (HPL)

CERARL

Polyester decorative plywood

AICA HIGH-BOARD
NONCOMBUSTIBLE PANELS
Postform counter

Eastern Oak stairs and counters

HPL

Started from “resin paper” born of synergy between the adhesive
business and paper manufacturing business. This is our current
core products.

Resin paper manufacturing equipment

13

AICA Group CSR Report 2020

AICA COLOR SYSTEM 105

CERARLCERARL became a major success. We developed dedicatedadhesives to curb warpage peculiar to CERARL, throughcollaboration with Chemical Products Business.

Example of adoption of CERARL for kitchen panels

Dedicated adhesive
for CERARL constructionPFresinwith proprietary technology

AAPH*1succeeded in developing lignin-phenol formaldehyde(LPF) resin using plant-derived lignin.

Lignin powder

Urea Urethane
Floor coating materials

Dynamic resin

PF
Composite board resins
Hot melts

M&A AAPH*1Group

M&A Aica SDK Phenol Co., Ltd.

Silicone potting agent
Silicone resin

Polymer beads

Acrylic emulsion
Lumiart

M&A Ganz Chemical Co., Ltd.

Water-based compounds
M&A EMC*2 Group
Polyurethane

CELSUSFLARETECTPolymer beads
UV-curable resins

Melamine Tile

M&A AICA-TECH Kenzai Co., Ltd.

ARDICA

Boards, films
Noncombustible decorative
panel (Except “CERARL”)
Counter tops

CELSUS

AICA Stylish Counters

Interior Housing Materials

Fiore Stone

Developed CELSUS, an HPL with advanced resistance tofingerprints. Received Good Design Award and IF Design Award.

Construction
Materials Business

HPL

Marless SeriesSpecialty & Performance
Materials

Hot melt adhesives

Silicone

Adhesives

Industrial Adhesives/Resins

Chemical Products Business

M&A Dainippon Shikizai Kogyo Co., Ltd.

Foundations of AICA

Repair/reinforcing
materials, corrosion
preventive materials

Construction resins

Wall coating materials
Heat-resistant PUR

AICA’s Vision

Members of the Lignin-Phenol
Formaldehyde Resin (LPF) Project

About AICA

Urea
Urethane Succeeded in making urea-based urethane transparent

Melamine Developed floor material with highly durable melamine resin layer,
applying technologies from the Specialty & Performance Materials
Tile
Business.

HPL layer

PVC substrate*1: AICA Asia Pacific Holding Pte. Ltd. *2: Evermore Chemical Industry Group

AICA Group CSR Report 202014

About AICA

Our Businesses
About AICA

Chemical Products Business

Net Sales

Infrastructure business fostering coretechnologies

103.9 32.3%
Japan net sales

AICA’s Vision

Since having developed the very first urea resin adhesive in Japan in
1936, we have been developing products that lead its generation withour chemical synthetic technology.
Since 2000, we have been focusing on expanding functional material
products as our new business field and being versatile.

billion yen

Overseas sales revenue

Operating profit

8.1

67.7%

billion yen

Business domains

Two businesses that realize
Foundations of AICA

Wood processing

Architectural

Civil works

Synthetic chemistry
technologies

Automobiles

Chemical
Products
Business
Electronic materials

Industrial products

Adhesive andbonding technologies
Inorganic
material forming
and processing
technologies

Household goods

Main Products
Adhesives
Industrial andArchitectual adhesives

Industrial resins

Composite board resins

Adhesives used in the
manufacture of wooden
furniture products andbuilding materials and on
construction sites.

Resins used as a raw
material in plywood
and laminated lumber,abrasives, casting
molds, adhesives, andother industrial products.

Resins used to formboards made by binding
together woodenmaterials that have been
turned into chips or
fibers.

Wall coating materials

Floor coating materials(JOLYPATE)(JOLYACE)

Acrylic-basedarchitectural coating used
on interior and exterior
walls in housing, shops,
public facilities, etc.

Synthetic resin floor coating
materials used on areas that
require high durability andheat resistance, such as
factories and warehouses.

Repair/reinforcing materials,
corrosion preventive
materials (Dynamic Resin)

Residential

Residential

Construction resins

Resin products including
repair materials for concrete
structures, materials toprevent falling tiles.
Residential

Non-residential

Non-residential

Non-residential

Specialty & Performance Materials

15

AICA Group CSR Report 2020

Hot melts

UV-curable resins

Polymer beads

Adhesives and sealants
used in automotive
headlamps andphotovoltaic panels
due to their superiorwaterproof properties.

Instant-curing resinsused in electronic
products such as
smartphones and PCs,
building materials, etc.

Highly refined beadshaped resin products
used as ingredients incosmetic products, light
diffusers, and modifying
agents.

Provide innovative products by applying
87.5
chemical technology
91.3%
Japan net sales

billion yen

Overseas sales revenue

Operating profit

15.8

billion yen

AICA’s Vision

8.7%

We develop innovative products making use of our chemical technology fostered in the chemical products business. We enable to offer myriad products including high pressured laminates (HPL) as a key productwhich has the largest share in Japan. We add beauty to the architectural spaces with wide variations.

About AICA

Construction Materials Business

Net Sales

Business domains

AICA SOLUTION

Laminate forming
and processing
technologies

Commercial facilities

Offices

Educational andcultural facilities

Transport facilities

Health care andwelfare facilities

Accommodation
facilities

Warehouses andfactories

Housing

Construction
Materials
Business

Foundations of AICA

Resin designand compoundtechnologies

Main ProductsHigh pressure laminates (HPL) (CELSUS, FLARETECT)Boards, films, etc. (AICA POLY, Altyno)

With their abundant range of colors andpatterns and their superior durability,
these are used as surface for tables andfurniture used in shops, hospitals, offices.
We hold a more-than-70% share of theJapanese market for these products.

Decorative boards, which are plywood
with a decorative surface createdwith polyester resin, etc., are usedpredominantly for furniture and wall
surfaces. Architectural films are usedmainly on wall surfaces and for fittings.

Residential

Residential

Non-residential

Melamine noncombustible decorative panels (CERARL)

Non-residential

Noncombustible decorative panels (ARDICA, LUNALITE, MACE, MOISS)HPL for wall surfaces that are certified
as noncombustible. These products
became a major hit for residential kitchen
panels. These are used in hospitals,
schools, transport facilities, due totheir robustness, design, and ease of
construction.

Noncombustible panels for walls. They
include wall finishing materials madeby decorating calcium silicate boards
with resin or sheets, extruded cement
panels for exterior walls, and interior wallmaterials with humidity regulation anddeodorant properties.

Residential

Residential

Non-residential

Counter tops (Postform, Artificial marble, Engineered stone)

Fittings & Interior Housing Materials

From counters made with HPL to acrylicresin artificial marble and engineeredstone made with natural crystals, wehave an extensive line-up of the majorcounter materials.
Residential

Non-residential

Finished products such as doors,sliding doors, storage, and toilet booths
made with materials such as HPL anddecorative boards. Our strengths lie
in the abundant range of colors andpatterns as well as our universal design.

Non-residential
Residential

Non-residential

AICA Group CSR Report 202016

About AICA

Group Network
In AICA’s 10 Years Vision, we have set ourselves a goal of earning at least 45% of our net sales from our overseas business by the year
ending March 2027.
We are striving to further develop our overseas business through the establishment of new overseas sites and the proactive use of M&As.
About AICA
3
5

6
8

4

AICA’s Vision

16
16

Other

5
2

6

13

2

10

1

16

7

11

7

2

4
2

1

2

3

Asia/
Oceania

12
11
9

14

Breakdownof net sales byregion59.3%(FY2019)

40.0%

5

7

Japan

0.7%

6

7

Foundations of AICA

9

8

1

10
8

3

8

4

8

8
9
3

9

15
15

Major sites overseas (as of August 31, 2020)
Location

Major products handled

Construction Materials Business
1

AICA Asia Laminates Holding
Co., Ltd.

Overseas holding company for Construction
Materials Business

2

Aica Laminates India Pvt. Ltd.

Manufacture and sale of high pressure
laminates (HPL)3

PT. AICA Indonesia

Manufacture and sale of high pressure
laminates (HPL), melamine noncombustible
decorative panels, and industrial adhesives

4

PT. Techno Wood Indonesia

Manufacture and sale of boards

5

Aica Laminates Vietnam Co.,Ltd.

Manufacture and sale of high pressure
laminates (HPL) and melamine
noncombustible decorative panels

6

Sois Mendinni Industrial
Technology (Shanghai) Co., Ltd.

Sale of construction materials

7

Wilsonart (Thailand) Company
LimitedManufacture and sale of high pressure
laminates (HPL)

8

Wilsonart (Shanghai) Co., Ltd.

Manufacture and sale of high pressure
laminates (HPL) and noncombustible
decorative panels.

Wilsonart Australia Pty Ltd.

Manufacture and sale of low pressure
laminates10

Wilsonart Asia Limited

Sale of high pressure laminates (HPL) andnoncombustible building materials

11

AICA HPL Trading Joint Stock
Company

Sale of high pressure laminates (HPL)

917

AICA Group CSR Report 2020

Location

Major products handled

Chemical Products Business
AICA Asia Pacific Holdings Group
1

AICA Asia Pacific Holding
Pte. Ltd.

Overseas holding company for Chemical Products Business

2

Dynea (Guangdong) Co., Ltd.

Manufacture and sale of industrial adhesives and resins, plywood
adhesives, composite board resins, and specialty & performance materials

3

Dynea (Shanghai) Co., Ltd.

Sale of chemical products

4

Dynea (Nanjing) Co., Ltd.

Manufacture and sale of industrial adhesives and resins, plywood
adhesives, composite board resins, and specialty & performance materials

5

SHENYANG AICA-HOPE
KOGYO Co., Ltd.

Manufacture and sale of industrial resins

6

KUNSHAN AICA KOGYO
CO., LTD.

Manufacture and sale of installation adhesives, construction resins, andspecialty & performance materials

7

AICA Dong Nai Co., Ltd.

Manufacture and sale of industrial adhesives and resins, plywood
adhesives, composite board resins, and construction resins

8

PT. AICA INDRIAManufacture and sale of industrial adhesives and resins, construction
adhesives, and specialty & performance materials

9

PT Aica Mugi Indonesia

Manufacture and sale of industrial resins, plywood adhesives, composite
board resins, and overlays

10

AICA Singapore Pte. Ltd.

Manufacture and sale of industrial adhesives and resins, plywood
adhesives, composite board resins, and specialty & performance materials

11

AICA HATYAI Co., Ltd.

Manufacture and sale of plywood adhesives and composite board resins

12

Aica Bangkok Co., Ltd.

Manufacture and sale of industrial adhesives and resin and specialty &performance materials

13

Thai Chemical Corporation Ltd.

Manufacture and sale of industrial adhesives and resins, composite board
resins, and plasticizers

14

AICA Malaysia Sdn. Bhd.

Manufacture and sale of industrial adhesives and resins, plywood
adhesives, and composite board resins

15

AICA NZ Limited

Manufacture and sale of industrial adhesives and resins, plywood
adhesives, and composite board resins

16

DYNEA PAKISTAN LIMITED

Manufacture and sale of industrial adhesives, plywood adhesives, andcomposite board resinsAbout AICA

1

AICA’s Vision

Aica Kogyo Co., Ltd. Head Office
Aica Kogyo Co., Ltd. Sales Locations

3
3

2

1

7

4

5

1

1

4

3
2

3
2

1

Foundations of AICA

Japan

6

2
3

Major sites in Japan (as of August 31, 2020)
Location

Major products handled

Chemical Products Business

Location

Major products handled

Aica Kogyo Co., Ltd. Production sites

Evermore Chemical Industry GroupEVERMORE CHEMICAL INDUSTRY CO.,LTD.

Manufacture and sale of specialty &performance materials

2

POU CHIEN CHEMICAL CO., LTD.

Manufacture and sale of specialty &performance materials

3

CHEM-MAT TECHNOLOGIES CO., LTD.

Manufacture and sale of specialty &performance materials

4

GIANT STAR TRADING CO., LTD.

Sale of specialty & performancematerials

5

TOPCO (SHANGHAI) CO., LTD.

Sale of specialty & performancematerials

6

LEADERSHIP (SHANGHAI) CO., LTD.

Sale of specialty & performancematerials

Top Well Elastic Technology CO., LTD.

Sale of specialty & performancematerials

1

7

8

U-BEST VIET NAM POLYMER INDUSTRY
CO., LTD.

Manufacture and sale of specialty &performance materials

Other
1

AICA America, Inc.

Sale of specialty & performancematerials

2

NISHI TOKYO CHEMIX VIETNAMCOMPANY LIMITED

Sale of chemical products

Construction Materials Business1

Nagoya Plant

Manufacture of high pressure laminates (HPL) andnoncombustible decorative panels

Chemical Products Business
2

Jimokuji Plant

Manufacture of industrial adhesives and resins, Plywood
adhesives, construction adhesives, construction resins, andspecialty & performance materials

3

Fukushima Plant

Manufacture of construction resins

4

Isesaki Plant

Manufacture of industrial adhesives and resins

5

Ibaraki Plant

Manufacture of specialty & performance materials

6

Tanba Plant

Manufacture of specialty & performance materials

7

Hiroshima Plant

Manufacture of Plywood adhesives, construction adhesives,and construction resinsGroup companies in Japan
Construction Materials Business
Manufacture and sale of counters, fittings, and interior housingmaterials

1

AICA Interior Kogyo Co., Ltd.

2

AICA Harima Kogyo Co., Ltd. Manufacture and sale of noncombustible decorative panels

3

AICA-TECH Kenzai Co., Ltd.

Manufacture and sale of noncombustible decorative panels

4

AICA-TECH Engineering
Co., Ltd.

Installation of noncombustible decorative panels

Chemical Products Business
1

NISHI TOKYO CHEMIX
Corporation

Sale of chemical products

2

SOKO Service Co., Ltd.

Replenishment and transport of specialty & performance materials

AICA Group CSR Report 202018

AICA Vision

Progress in AICA’s 10 Years Vision andMedium-Term Business Plan
About AICA

Background to establishment of AICA’s 10 years Vision
AICA has established AICA’s 10 years Vision with the goal of the year ending March 2027, the 90th anniversary of the company.
With the aim of transforming into a solid, robust management structure that will not be easily influenced by trends in the Japaneseconstruction market, in the Chemical Products Business, we will aim to become Asia’s top manufacturer of resins for the construction
sector, which supports people’s lives and social infrastructure. We will also grow non-construction sectors such as automotive, daily
commodities, and electronic materials. In the construction materials business, we are aiming for further business growth as a “spacedesign manufacturer” that can provide comfort and safety to residential and non-residential living spaces.

AICA’s Vision

AICA’s 10 years Vision■ Financial targets by 2027/3
2017/3

Foundations of AICA

Consolidated net sales

151.6 billion yen

300 billion yen

Consolidated ordinary profit

18.3 billion yen

30 billion yen

ROE

9.9%

10% or more

Overseas sales ratio

30.8%

45% or more

■ The future vision at 2027/3
Chemical Products Business

Construction Materials Business

Sales: 170 billion yen

Aica Group will aim to be Asia No.1 resin manufacturer in the construction sector to support people’s life and social infrastructure. We
will also grow our business in non-construction sectors, including
automotive/daily goods/ electronic materials.

Sales: 130 billion yen

Aica Group will stretch the strength in the interior wall materials into
the exterior wall as well. We will continue to grow as a “Solution
Provider for Space Design” that offers comfortability & safety inresidential & non-residential buildings.

Businesscollaboration

We will continue to enhance the collaboration between Chemical products business and Construction
Materials business to develop unique products that contribute to the society.

Utilizing capitaltie-up and M&A

We will actively and efficiently utilize our own funds for our future growth, including capital tie-up or M&A.

Group Collaboration &Operation Base Enhancement

In order to establish a system which can respond to changes in market environment, weare strengthening group collaboration and business foundations.

Optimize production & logistic systems
ComplianceTechnology and material cooperation
QEO management

Globally competent human resources

Responsibility to stakeholders
Increase corporate value

AICA Group CSR Report 2020

R&D investment

Healthy financial base

IT infrastructure investment

We promote diversity management. In order to develop globally competent humanresources and professional human resources, we will establish a variety of development
systems.

Human resources development

192027/3

Diversity

Professional human resources

We will put an emphasis towards engagement with stakeholders, and promotemanagement which contributes to local communities and enhances CS and ES.
Corporate governanceenhancement

Harmony with local communities

Improvement of CS & ES

2021/3 200 billion yen

2027/3 300 billion yen (90th anniversary)

AICA’s 10 years Vision
1st Medium-Term Business Plan
2017/3

2nd Medium-Term Business Plan
2021/33rd Medium-Term Business Plan

2024/32027/3
AICA’s Vision

Medium-Term Business Plan “C&C 2000”■ Financial targets (Consolidated)
2021/3(Target)Net sales(billion yen)
Ordinary profit(billion yen)

151.6

200

18.3

22

ROE

9.9%

10% or more

Overseas sales
ratio

30.8%

35% or more

■ Basic Policy
1

Amid a business environment that is going through major changes,
such as changes in housing demand due to the shrinking population,
declining birth rate and aging population, deterioration of infrastructure
and buildings, a growing awareness of the environment, an increase in
the consumption tax, and technological innovations such as IoT and AI,
the Medium-Term Business Plan “C&C 2000” aims to achieve sustainable growth and increase our corporate value by leveraging the AICA
Group’s strengths in chemistry and design to create original productsthat will contribute to the realization of an abundant society.

To seek and realize 3 growth drivers (P21 - )2Foundations of AICA

2017/3(Achievement)

Item

About AICA

2017/3 151.6 billion yen (80th anniversary)

Operation Base Enhancement tosupport the growth

Sustainable growth of key domestic business by enhancing AS❶ products*1❶ Growth of individuals through C&C activities*2

Development and investment in focus fields for the next generation❷ (Non-construction fields, untapped markets in construction fields)

Improvement of CS and ES*4 by means of QEO❷ management*3 and IT foundation renewal❸ Overseas deployment of Japanese technologies❸ Observing compliance*1 AS Products: P21 *2 C&C activities: P29 *3 QEO Management: P30■ Investment Strategy
Capitalinvestment

22
billion yen

Capacity expansion, line
automation, IT overhaul

R&D
Expenditure

M&A

18
billion yen

Area expansion, expansionof business domains

Humanresources
investment

14
billion yen

Introduction of new technologies, industryacademia collaboration

Active recruitment and cultivation of global humanresources, work style reform, development of professional
human resources, promotion of diversity

Progress in Medium-Term Business Plan
Proactive leveraging of M&As, operation of newly established plants, and opening up of new markets enabled us to achieve
dramatic growth in the first two years of the Plan, but our forecast for the year ending March 2021, the fourth year of the Plan,
are that some of our initial targets will, unfortunately, not be met due to the impact of COVID-19.

■ Progress towards financial goals (Consolidated)
1st year

2nd year

3rd year

4th year

2018/3(Achievement)

2019/3(Achievement)

2020/3(Achievement)

2021/3(projected)

Net sales(billion yen)

163.7

191.3

191.5

174.5

Ordinary profit(billion yen)

19.6

21.2

21.3

14.7

ROE

10.1%

10.7%

9.9%

6.9%

Overseas sales
ratio

33.4%

42.0%

40.7% 40% or more

Item

■ Progress of investment strategy (billion yen)

1st yearachievement

2nd yearachievement

3rd yearachievement

Capitalinvestment

4.52

7.89

7.13

Business
investment

5.46

R&D
Expenditure

2.85

Item

-

4th yearPlan

7.0

14.45 In planning

3.2

3.45

3.6

AICA Group CSR Report 202020

AICA Vision
Mid-Term Business Plan Three growth drivers for the creation of new value 1

Expansion of AS productions to contributeto the solution of social issues
About AICA

What are AS products?
We offer products that help to solve a variety of social issues, not only environmental ones, promoting them as AS (AICA Solution)
products. We identify social issues through engagement with our various stakeholders and conduct product development that explores ways of solving those issues. We will aim for the sustainability of both society and the company by expanding sales of highadded-value products that leverage our strengths in chemistry and design in our primary business field of the Japanese construction
market.

AICA’s Vision

Status and future outlook for AS Products
In FY2019, although the Japanese construction market, our pri-

■ Year-on-year growth *Applicable products are reviewed every year, so the comparisons are for each fiscal year.
Year-on-year change

mary field of business, was sluggish
in both residential and non-residential sectors, the Construction Mate-

(%)
150

113.1%

Year-on-year change(%)
150

111.6%

Foundations of AICA

rials Business increased its sales,
particularly of AS products, contributing to growth in net sales. AS

100

100

50

50

Year-on-year change

112%

products now account for about
10% of Aica Kogyo’s (parent company only) net sales on a non-consolidated basis and have become agrowth driver for the company.

0

2017

2018

FY2020
AS Products
Sales Target

0

2018

2019

■ Examples of social issues in which AS products can help
Social issue

Typical AS Product that can provide value

Extension of life of buildings
Provide products for the repair ofdegrading buildings, products forrenovations[Repair/reinforcing materials]● DYNAMIC RESIN (method to keep exterior tiles fromfalling off)
● JOLY SEAL (repair of cracks in concrete, etc.)

Climate change(global warming, etc.)

Reduction of CO2 during transport
Reduce greenhouse gas emissions
by developing and expanding salesof products that have good load
efficiency, e.g. reducing weight ofproducts.

[Noncombustible building materials]● ARDICA (UV-curable noncombustible decorative
panel)[Boards, films, etc.]● ALTYNO (Architectural films)

Shortage of skilledworkers on building
sites

Easy-to-install products
Develop products that are easy toconstruct, to augment the shortageof skilled workers resulting fromlabor shortages accompanying
the declining birth rate and aging
population.

[High Pressure Laminate (HPL)]● MELATACK (HPL with adhesive backing)● Magnet Melamine EV (HPL with magnetic backing)Depletion of natural
resources

Protection of the naturalenvironment
Curb forest felling and quarrying ofstone materials through the effective
use of wood and stone materials andproposals for alternative materials.

[Countertops]● Postform Counter (High pressure laminate (HPL)
counter)● Fiore Stone (engineered stone)

Diversity

Universal design
Promote the development of
products that people of all ages
can use, from small children to theelderly.

[Fittings, Interior Housing Materials]● MANA BOOTH (melamine toilet booth for children)[high pressure laminate(HPL)] [CERARL] [countertops][fittings, interior housing materials]● Virutect Series (antiviral construction materials)

Degradation of
infrastructure andbuildings

21

Value added to solution

AICA Group CSR Report 2020

Antiviral construction materials that reduce the number of specific viruses on the product’s surface

AICA PUR

Tables in dining halls andfoodservice establishments

Walls of hospitals, etc.

Toilet booths, walls, and countersin restroom spaces

Doors in aged care and childcare
facilities

Reception counters at clinics,
hotels, etc.

Product display shelves in retailstoresFoundations of AICA

China-Japan Union Hospital of Jilin
University (Changchun, China), which
has decided to install AICA Virutect
and CERARL Virutect in the corridorsof its ICU and emergency department■ Suggested applications for Virutect Series

AICA’s Vision

Due to the impact of globalization, viruses and bacteria are spreading more easily in all seasons, making measures to combat them increasingly important. AICA Virutect is a high pressure laminate (HPL)with embedded antiviral agent that was launched in January 2019 tooffer a solution to this kind of social issue. Antiviral construction materials are being actively adopted in medical and welfare facilities,
childcare and educational facilities, and similar places to eliminate
causes of users’ concern as much as possible.
To assistance in society’s transition to a “new normal,” we have
expanded the range of these products to include CERARL Virutect, amelamine noncombustible decorative panel with embedded antiviral
agent, and toilet booths, doors, counters, and other products thathave AICA Virutect as the surface material. By expanding the range ofapplicable products, we plan to capture all manner of needs in theresidential and non-residential markets and in floor, wall, furniture andfixture applications and grow Virutect Series sales to 5 billion yen inthree years’ time.

About AICA

Virutect Series

Kitano Hospital, which has adopted
AICA Virutect for the surfaces offittings in its operating theaters

Water-based rigid Polyurethane resin coated flooring that curbs discoloring
due to UV rays and that does not require cut joints

The conventional AICA PUR HARD construction method has been praised for its
superior durability and has been adopted in places such as factories where unmanned
forklifts (AGV) bearing heavy loads move around. The AH construction method retains
the durability of the conventional method, and with the use of AICA’s proprietary resin
design technology, decoloring due to UV rays has been curbed, so it can now be
used in auto repair shops that are half outdoors. Further, shrinkage stress resulting
from cure shrinkage has been significantly reduced, eliminating the need to deal with
cut joints for the prevention of peeling, thus reducing construction period.
Results of weather resistance testing [irradiation for 300 hours with germicidal lamp]
No need for cut joints, for quicker construction

New method

PUR HARD AH Construction Method

Beforeirradiation

Conventional method
Beforeirradiation

After
irradiation

General epoxy pour and spread method
After
irradiation

Heat-resistant type can be used in food processing plants, etc.

AICA Group CSR Report 202022

AICA Vision
Mid-Term Business Plan Three Growth Drivers for the Creation of New Value 2

Development and investment in focus
fields for the next generation
About AICA

Strengthening the non-construction
sector in the Specialty & Performance
Materials Business and promoting
business diversification
Opening up markets for expanding new
applications through the roll-out of Evermore
Chemical Industry products

AICA’s Vision
Foundations of AICAThe Evermore Chemical Industry Group (EMC Group), whichbecame part of the AICA Group in January 2018, is pursuing
new initiatives, such as rolling out its textile adhesives for adhering different types of fabric in Japan, as well as its mainstay
cross-linking agents. EMC Group produces everything from upstream materials to finished resin products, so combining thiswith our design technologies has made it possible to create
products that better suit the preferences of customers.
In July 2020, the EMC Group further reinforced its production
facilities by making two Vietnamese companies that own polyurethane manufacturing equipment into its subsidiaries. Its aim is
to expand its share in the booming Vietnamese market.

Attaining total proposals for interior
spaces with the launch of a completely
new kind of floor material
Leveraging the strength of Melamine Tile todistinguish our products from our competitors
In July 2019, we began selling Melamine Tile, a completely
new kind of floor material that has opened up a new productarea. After about a year of marketing of this product, it has beenpraised for its dirt and scratch resistance and has achieved acertain level of success, including being adopted as the floor
material for a major apparel store. Under social circumstancesof a chronic shortage of skilled workers, Melamine Tile have also
been recognized for their relative ease of construction. By further
expanding sales of Melamine Tiles which endeavor to provide
a difference from products in the conventional floor market, we
will offer our own original suggestions, including for furniture, fixtures, and wall surfaces.

New production site in Vietnam with polyurethane manufacturing facilities

Lumiart HC Series of hard-coat 3D decorative
film, which boasts high stretchability
The hard-coat 3D decorative film we have developed boasts a
stretch rate of 250% and it also has excellent chemical and wear
resistance. This product, made with UV coating that we havespent more than ten years researching, succeeds in achieving
both extensibility and wear resistance, two attributes that would
ordinarily be traded off against each other.
The Lumiart HC Series targets automotive interior decorative
components such as instrument panels. We have also succeeded in the development of an “S Grade” product that is suitable forexteriors and, a “Texture Grade” product that offers a surface
texture. We are currently proposing these products to automotive manufacturers. We are promoting this business in anticipation of full-scale mass production in several years’ time.

Competitive advantage of Melamine Tile
In addition to their resistance to scratches and dirt and excellent
ease of construction, another strength of Melamine Tile is its easeof maintenance. Because it does not mark easily, any dirt can be
wiped off with a damp cloth, and no waxing is needed. This will alleviate the burden of cleaning and also contribute to cost savings.
External appearance after heel mark resistance test

Regular floor

Melamine Tile

External appearance after hairdye resistance test
Damp cloth only

Hard coat film after 3D decorative forming

23

AICA Group CSR Report 2020

Film being stretched

Water &
melamine sponge

Melamine Tile

Damp cloth only

Water &
melamine sponge

Regular floor

Mid-Term Business Plan Three Growth Drivers for the Creation of New Value 3

Overseas roll-out of Japanese technology

Overseas Planning Department established withaim of strengthening cooperation with overseas
Group companies

Wilsonart’s Asia-Pacific region companies
become part of AICA Group●●

Aica Kogyo
Expansion of automobile
applications
Sales expansion forsanitary material
applications
Market share
expansion for
Early creation
plywoodof synergies
applications● ●●■Synergies between Aica Kogyo, AAPH Group,and EMC Group
Sales in Japanese market
Use of raw materials from
EMC

Foundations of AICAIn December 2019, four Asian operating companies owned by
Wilsonart, a major manufacturer of high pressure laminates(HPL), became part of AICA Group. Wilsonart was established in
Texas, U.S.A., in 1956 and currently operates all over the globe.
This acquisition not only of Wilsonart’s brand power but also its
production sites and sales networks is a major step toward the
expansion of our market share in the Asia/Oceania region. We
will leverage the respective strengths of Wilsonart and AICA anddemonstrate synergy through the expansion of sales opportunities by rolling out Wilsonart’s original products that we do nothave and, where both companies have similar products, differentiating between them with design to optimize our product offerings.

AICA’s Vision

In April 2020, we established a new Overseas Planning Department. The Business Promotion Office in the Overseas Planning Department shares information that transcends the boundaries of Group companies and organizations with the aim ofpursuing business with greater speed while making the most ofeach group’s strengths. For example, we developed and designed PUR Hot Melts for wood, which are produced by the
EMC Group and distributed using sales channels of the AICA
Asia Pacific Holding Group (AAPH Group). Each group will continue to make the most of their development strengths, production strengths, and sales networks to propose products to meetcustomers’ needs.

Building a foundation in the growing
Asia market through active leveragingof M&As

About AICA

Creating further synergy, centeringon the good-performing PF resins
business

Wilsonart (Shanghai) employees with AICA Group executives
● ●

AAPH

EMC

Development of markets for laminated lumber applications
Development of new market for hot melts for wood

Increase in demand in China for environmentallyfriendly PF resins for bamboo applications
With the increase in environmental awareness in China, demand for PF resins for bamboo applications has risen sharply.
Because bamboo grows quickly in about four to five years, it ismore environmentally friendly than slower growing trees. Artificial
wood made from bamboo using PF resin manufactured by the
AAPH Group offers excellent dimensional stability and durability,
so is sold as a high-grade product. It boasts a high share of thehigh-grade market in China, and with sales routes to the UnitedStates and Europe as well, further growth is expected for thisproduct going forward.
While taking advantage of the technologies of our PF Resin
Division in Japan, which is strong in industrial markets such as
the automobile industry, we will meet the broader needs for PF
resins in the Asia/Oceania region.

Strengthening the Vietnamese market which
continues to show economic growth
In March 2020, through Aica Asia Laminates Holding Co.,
Ltd., we established AICA HPL Trading joint stock company. This
company took over the operations of the companies of the CHIGroup, our HPL distributor in Vietnam. Vietnam has a populationof just over 100 million and a market that is expected to show
massive growth as the “next China”. We began manufacturer of
HPL at Aica Laminates Vietnam Co., Ltd. in May 2019, so we
now have both manufacturing and distribution arms in Vietnam.
Aica Laminates Vietnam is the first company to manufacture HPL
in Vietnam. Leveraging our strengths in manufacturing and distribution, we will aim to expand sales of HPL not only in Vietnam
itself, but throughout Asia through exports to other neighboring
countries.

■Effective use of bamboo
For artificial wood

Compression

Mixing with resin

Crushing

BambooSigning ceremony

AICA Group CSR Report 202024

AICA Vision

Business Overview:
Chemical Products Business
About AICA

To become No. 1 in Asia

AICA’s Vision

We will use our core technologies
to expand our high added-value products and contribute to society, whilepursuing a transformation into a more
profitable business. Taking maximum
advantage of our overseas Group
companies, we will engage in the expansion of synergies and the strengthening of BCP and governance, in our
aim to become No. 1 in Asia.

Kenji Ebihara
Director and Managing
Executive Officer
Head of the Chemical
Products Company

As a pillar in the nonconstruction sector
Merging the resin design technologies and quality control methods
we have cultivated in Japan with thetechnologies and sales networks of
our overseas Group companies, wewill build a pillar of profitability in the
non-construction sector. We will swiftly
capture the needs of the new normalera, such as antiviral performance,
automation, and digitalization, andexpand the arena in which AICA canflourish and succeed.

Nobuyuki Omura
Director and Managing
Executive Officer
Head of the Specialty &Performance Materials Company

Trends in Business Performance
Foundations of AICA

■ Net Sales(billion yen)

109.0

77.2

74.8

■ Operating profit (billion yen)
8.1
7.4

103.9
6.2

82.9

■ Sales performance by product category
Adhesives

Other
Specialty &Performance
Materials

6.5

5.4

9.8% 61.2%
FY2019

19.9%

103.9

billion yen
9.1%
2015

2016

2017

2018

2019 (FY)

Average annual growth 7.7%

FY2020 Targets

2015

2016

2017

2018

2019 (FY)

Average annual growth10.7%

Net
Sales

89.4 billion yen

47.9%
Construction
resinsOperatingprofitOf which,
AAPH*1Group

5.7 billion yen

FY2019 Results
In adhesive products, in Japan, sales of adhesives for laminated lumber and industrial phenol resins were sluggish, but our adhesives for construction and plywood adhesives performed well, allowing us to increase overall sales of adhesives. Meanwhile, overseas,
sales volumes increased in China, prompted by the tightening of environmental regulations, and in Thailand, but lower raw material
prices led to a drop in sales prices and net sales revenue was down.
In construction resin products, the exterior and interior finishing coat, JOLYPATE, improved over last year, but floor coating materials
for factories and warehouses and repair/reinforcing materials for civil works were sluggish, resulting in an overall decline in sales overthe previous year.
In the Specialty & Performance Materials Business, in which we are focusing our efforts to make inroads into the non-construction
sector, UV-curable resins for electronic materials and silicone products performed well in Japan, but Acrylic emulsion and water-based
compounds products for coating and textile applications and polymer beads for industrial applications were sluggish, resulting in a
decline over the previous year. Overseas, on the other hand, due to the review of low-profit trades by Evermore Chemical Industry,
which has been included in consolidated results since the previous year, and falling sales prices due to lower raw material prices, net
sales were down over the previous year, but a focus on business with higher profit margins led to a major increase in profit.
These results brought about net sales of 103,945 million yen (-4.7% year-on-year). Operating profit (before deduction of unallocatedoperating expenses) was 8,123 million yen (+9.1% year-on-year).

25

AICA Group CSR Report 2020

Expanding overseas business and creating investment effectiveness

The AAPH*1 Group accounts for about half of the Chemical Products Business’s net sales. While falling raw material
prices have caused a fall in net sales, profit margins have increased, and we will push forward on our expansionary path.

About AICA

Adhesives■ Development of lignin-phenol resin made with plant-derived raw materials
AAPH, the overseas holding company for our
Chemical Products Business, has succeedLignin

Water

Formaldehyde

PhenolUsed as raw material
for paper manufacture

in, made by combining lignin, a plant-derived
unutilized resource (biomass) with PF resin.

Catalyst

With the growing seriousness of environmental issues, there are several R&D projects un-

Cellulosederway around the world on combining lignin

Hemicellulose

and PF resin. AAPH was one of the first com-Ligninpanies in the Asia/Oceania region to start thisThree main
constituentsof plants

Petrochemical-derived
raw materials

Conventionally

Accounts
for 20-30%

Lignin has
few uses, somost isdisposed of byincineration

Extraction

Use
Synthesis(90% of total)

Foundations of AICA

kind of research and it has succeeded in de-

Biomass feedstock

Extraction

Use ofSustainable
resources

veloping a lignin-phenol resin. Going forward,
it will pursue the commercialization of the

Lignin-phenol
resin

product as a plywood adhesive. The AICA
Group will continue to engage in the development of products that make use of recyclable materials.

■ Expansion of sale of PF resin forConceptualization of use oflignin-phenol■Effective use of bamboo

pensable in the manufacture of man-madeFor artificial wood

AAPH Group sells a binder resin that is indis-

Compression

awareness of environmental issues. The

Crushing

wood made with bamboo, due to a growing

BambooIn China, demand is growing for man-madeMixing with resinbamboo materials

AICA*A related article appears on P24.

wood.

Construction
resins

AICA’s Vision

ed in the development of a lignin-phenol res-Emphasising on expanding salesof differentiated commodities

In recent years, a shortage of skilled workers on construction sites

Specialty &Performance
Materials

Synergy expansion between
Aica Kogyo, AAPH Group, andEMC*2 Grouphas become a social issue. We are playing our part of solve thisEMC has captured the top share of the market for polyurethane

problem by providing products that require less construction effort.

systems (PUS) for athletic shoe soles in Vietnam. With the aim of

We are also concentrating our efforts on repair/reinforcement prod-

the localization of this business, EMC has acquired a urethane man-ucts to contribute to the extension of life of buildings and to ensure

ufacturer in Vietnam, to secure sufficient land and manufacturing

their safety.

equipment. EMC is now aiming to grow its share of the polyurethane market in Vietnam, which is expected to expand further.
EMC has captured the top shareof the market for polyurethane
systems (PUS) for athletic shoesoles in Vietnam.

Before application

After application

Clear membrane makes it possible
to check changes in the crack after
application

Gun-type applicator enables quick
and easy repairs of cracks inconcrete*1 AAPH: AICA Asia Pacific Holding Pte. Ltd. *2 EMC_ Evermore Chemical Industry

AICA Group CSR Report 202026

AICA Vision

Business Overview:Construction Materials Business
About AICA

Expansion of overseas business and pursuit of added value
Last fiscal year, we established and expanded our bases for the Construction Materials Business in the Asia/
Oceania region. We are optimizing our portfolio and forging ahead with the goal of achieving 30 billion yen inoverseas sales in the Construction Materials Business in the year ending March 2027.
We will also expand our range of functional, high value-added products and address a variety of challenges foradapting to a drastically changing society, climate, and environment. One example of this is the Virutect Series ofantiviral construction materials that offer “new lifestyle spaces for the new normal.”

AICA’s Vision

Yukihiro Iwase
Director and Senior Managing Executive Officer/Head of the Building & Housing Materials Company

Trends in Business Performance■ Net Sales
Foundations of AICA

72.7

76.7

(billion yen)

80.8

82.3

■ Operating profit (billion yen)

87.5

14.4

15.6

16.1

15.8

■ Sales performance by product category
Fittings & Interior Housing Materials
Counter/
Postform

12.8

19.4%

6.1%

Hihg pressure
laminate (HPL)

22.3%

FY2019

87.5

2015

2016

2017

2018

2019 (FY)

Average annual growth 4.7%

2015

2016

2017

2018

2019 (FY)

13.2%

billion yen 15.0%
24.0%

Average annual growth 5.4%
Noncombustiblebuilding materials

FY2020 Targets

Net
Sales

Boards,films, etc.

CERARL

85.1 billion yen Operating
profit 12.3 billion yen

FY2019 Results
Sales of high pressure laminate (HPL) in Japan were down year-on-year due to the decline in the area of new building starts in the
non-residential sector, but overseas sales were up due to an increase in sales volumes in India and Indonesia. Further, thanks to the contribution of Sois Mendinni Industrial Technology (Shanghai) Co.,Ltd., the Chinese company whose results have been included in our consolidated results from the second quarter of the consolidated accounting period, which enabled us to increase overall sales for the year.
In boards and films, our general-purpose decorative polyester plywood boards struggled, resulting in a year-on-year decline.
Our melamine noncombustible decorative panel CERARL has steadily captured demand for residential kitchen panel applications,educational facilities, medical and welfare facilities, shops, offices, public facilities, and the like. There has also been increased adoption of CERARL Deodorization Type and CERARL Virutect, a melamine noncombustible decorative panel with embedded antiviral
agent, resulting in an increase in sales over the previous year.
In noncombustible building materials, thanks to the synergy with AICA-TECH Kenzai Co., Ltd., LUNALIGHT, our decorative acrylic
calcium silicate panels, and MACE, our extruded cement panels, are capturing demand in sports facilities, educational facilities, factories and warehouses, hotels, and retail facilities, enabling us to increase sales in this category.
In the counter/postform product category, handwashing basin countertops for small children made with our artificial marble, CORIAN, has captured thriving demand in the new construction and renovation of childcare facilities, and our premium engineered stone,
Fiore Stone, has also captured demand in kitchens and vanity countertops, resulting in an increase in sales.
In fittings and interior housing materials, our U.D. (Universal Design) Comfort Series of functional fittings for medical and welfare facilities
performed well, but our range of residential fittings slumped due to a harsh market environment, resulting in a year-on-year decline.
These results brought about net sales of 87,555 million yen (+6.4% year-on-year). Operating profit (before deduction of unallocatedoperating expenses) was 15,874 million yen (-1.8% year-on-year).

27

AICA Group CSR Report 2020

Focus on on-site construction products, centered on AS* products■ Easier construction products■ Break into new markets

New viruses are being discovered all thetime. With the aim of forming a society thatco-exists with these viruses, we offer products that ease such concerns.

The Japanese construction market is facing
a chronic shortage of skilled workers. We willcontribute to solving this social issue by expanding our range of products that are easier and quicker to construction and apply.

We will concentrate our efforts on expanding
sales of Fiore Stone, demand for which continues to grow, and of Melamine Tile, which welaunched last year, while also working on opening up new markets.

For table tops used by multiple people

HPL with an adhesive backing can be used to
repair just the top of table.

Demand for the engineered stone, Fiore Stone,
for kitchen countertops is increasing.

For doors and walls at medical and welfare
facilities and educational facilities

Advanced-design panels that can be adhered
directly to modular bath units

Sales of Melamine Tile are increasing, primarily incommercial facilities.

AICA’s Vision■ Antivirus construction materials

About AICA

Domestic market

Foundations of AICA

*Abbreviation for “AICA Solution”. Products that help solve social issues.

Overseas Markets

Aim to expand share in growing Asia/Oceania region

Through the active M&As and the establishment of new sites, we have made major progress in the development of the
AICA Group’s construction materials business platform in the Asia/Oceania region.

■ Wilsonart’s Asia-Pacific region companies
become part of AICA Group

Four Asian operating companies owned by Wilsonart, a USbased, global manufacturer of HPL, become part of AICA Group.
We will merge the production technologies and product development capabilities of our two groups and market high value-added products in a bid to expand our overseas construction
materials business.

■ Establishment of AICA HPL Trading Joint Stock

AICA-TECH Kenzai Co., Ltd. 3 Plants
AICA Interior Kogyo Co., Ltd. 2 Plants
AICA Harima Kogyo Co., Ltd. 2 Plants
Sois Mendinni Industrial Technology (Shanghai) Co., Ltd.
Aica Laminates India Pvt. Ltd.
Wilsonart Asia Limited
AICA HPL Trading Joint Stock Company
Aica Asia Laminates Holding Co., Ltd.
(holding company)*A related article appears on P24.

Wilsonart (Thailand) Company Limited
Aica Laminates Vietnam Co., Ltd.

Company (AHT)

We took over the business of the CHI Group, a Vietnamese
distributor of HPL and established AHT. It will coordinate with
the Aica Laminates Vietnam Co., Ltd. to strive for the further
development of our business in Vietnam.

Aica Kogyo Co., Ltd.

Wilsonart (Shanghai) Co., Ltd.

Maica Laminates Sdn., Bhd.

PT. AICA Indonesia 2 Plants

AICA Group until mid-FY2019

PT. Techno Wood Indonesia

HPL production sites
Construction materials, etc.
Production sites for products other than HPL[Overseas Construction Materials Business Net Sales]

Wilsonart companies

Target of 30 billion yen*by the 2027/3, the final year of
AICA’s 10 years Vision

HPL production sites*Actual net sales for year ended Mar. 2020: 7.5 billion yen

Sales companies

AICA HPL Trading Joint Stock Company
Sales companies

Wilsonart Australia Pty Ltd.

AICA Group CSR Report 202028

Foundations of AICA

AICA’s CSR Activities
About AICA

We believe that fulfilling our corporate social responsibility (CSR) is an essential condition for our continued existence as a corporation anda mission that we must carry out toward broader society. We are striving to build frameworks for the promotion of CSR, to strengthen
the foundations that will support our CSR activities and to make continuous improvements and enhancements to those foundations.

CSR Promotion Framework
The promotion of CSR activities is led by the CSR Committee, a cross-divisional organization.
Its constituent divisions strive to deepen their activities in their respective areas of responsibility, working to achieve the materiality targets.

AICA’s Vision

CSR Committee
Chair:

Various Committees and Projects

Satoshi Toudou, Director and Senior Managing Executive Officer·C orporate Ethics Committee
Chair: Representative Director andPresident

Deputy Chair: Ryoji Mori, Director and Managing Executive Officer
Secretariat:

Corporate Planning Department· Internal Control Committee
Chair: Representative Director andPresident

Members:
Constituent divisions
Corporate Planning
DivisionFoundations of AICA

Major matters handledManagement strategy,
public relations andinvestor relations

Purchasing Division

Supply chain

Human Resources
Division
Quality Assurance
Division
General Affairs
Division

Social issues (health, humanrights, labor, diversity)

Legal Division

Safety andEnvironment Division

Quality
GovernanceCompliance, anticorruption
Environment (climatechange, industrial waste,resources and pollution,water use), occupational
health and safety

Person in charge

Senior Executive Officer and General
Manager, Purchasing Department
Executive Officer and General Manager,
Human Resources Department
General Manager, Quality Assurance
Department
General Manager, General Affairs
Department

Coordination

General Manager, Legal Department

General Manager, Safety andEnvironment Department

Sales Administration
Division

Development and sales
expansion of AS*1 Products

Executive Officer
General Manager, Sales Planning
Department, Sales Administration Division

Overseas Planning
Division

Strengthening of overseas
Group governance

General Manager, Overseas Planning
Department

R&D Division(R&D Centers)
AAPH*2
Sustainability Division

Development and sales
General Manager, Nagoya R&D Center
expansion of AS*1 Products General Manager, Jimokuji No. 1 R&D Center
CSR promotion officer atGeneral Manager, Sustainability Division
overseas Group companyof AAPH*2

Heads of departments anddivisions· Information Management Committee
Chair: Director and Senior Managing
Executive Officer

Director and Senior Managing
Executive Officer

CSR officers of Group companies inJapan and overseas

C&C Activities
C&C activities are small-group activities in which all employees in all divisions participate. These groups discuss and implement specific action plans, using QC methods
and other scientific approaches, to consider ways of achieving operational improvements and implement division policies.
These activities have a long history, with their predecessor, the ZD Campaign, starting in 1965 with the objective of raising productivity. The initial aim of that campaign
was to achieve “zero mistakes” in the work through careful attention and innovative
efforts by individual employees. From 1979, the C&C Campaign was rolled out, taking
the initials of the present Corporate principle, Challenge & Creation. The campaign took
on a broader meaning to include “promoting initiatives for the achievement of management goals,” which has been passed down to today’s C&C activities.

29

AICA Group CSR Report 2020·B
 usiness Continuity Plan (BCP)
Committee
Chair: Director and Senior Managing
Executive Officer·O verseas Group Governance Committee
Chair: Director and Senior Managing
Executive Officer·C &C Promotion Committee
Chair: Managing Executive Officer·Q EO Committee
Chair: Managing Executive Officer·S ecurity and Trade Control Committee
Chair: General Manager, Legal
Department·C limate Change Response Project
Chair: General Manager, Safety andEnvironment Department·W ork Style Reform Promotion Project
Chair: Exective Officer and General
Manager, Human Resources Department·D iversity Promotion Project
Chair: Member, Human Resources
Divisionetc.

*1 Abbreviation for “AICA Solution”. Products that help
solve social issues.
*2 AICA Asia Pacific Holding Pte. Ltd.

This is a management system that operates with a trinity of quality (Q: ISO 9001), environment (E: ISO 14001) and occupational
health and safety (O: ISO 45001). As well as complying with laws and regulations, under this system, we conduct risk hedging andkaizen activities, promote the enhancement of quality, improvement of environmental indicators (reduction of greenhouse gas emissions and industrial waste, reinforcement of water management, etc.), and the creation of safe and comfortable workplaces, and strive
to strengthen our business infrastructure from the perspectives of both risk and opportunity.

About AICAQEO Management System

AICA’s Vision● QEO Group Representatives Meeting

This committee promotes QEO
Management System implementation. It is managed by the Quality
Assurance Department and Safety
and Environment Department,
this committee works toward theachievement of QEO policies.

The QEO Committee acts as the secretariat andholds semi-annual meetings that are attended by
AICA’s senior executives and representatives ofGroup companies in Japan and overseas.
As well as confirming QEO achievements and thestatus of improvements at individual Group companies, the meeting’s attendees exchange informationby sharing case studies and discuss and decide on
countermeasures.

Foundations of AICA● QEO Committee

Signing of United Nations Global Compact
To promote and implement high-quality CSR activities as a company that operates its businesses on a global scale, in September 2018, the AICA Group signed the United Nations Global
Compact, which declares voluntary action principles concerning human rights, labor, the environment, and anti-corruption.

Response to SDGs
The Sustainable Development Goals (SDGs) were adopted at the United Nations Sustainable Development
Summit in September 2015. These international goals
have a target year of 2030. They consist of 17 goals and
169 targets to realize a sustainable world, covering issues
such as poverty, starvation, energy, climate change, andpeaceful society. The AICA Group endorsed these goals
and commenced initiatives to solve relevant issues.

AICA Group CSR Report 202030

Foundations of AICA

AICA Group’s Materialities
About AICA

Materialities and KPIThe AICA Group began selecting materialities (key issues) in FY2016. In May 2018, we
reviewed the materialities, with reference to various guidelines.

ESG

Key Issues for AICA

G

Corporate Results(Economic Performance)

G

Corporate Governance

ESG

AICA’s Vision

Process for selection of materialities

ESG

Business
Infrastructure

Integration of Management and
CSR
Strategic roll-out of CSR in
overseas sites

SG

Human Rights Code of Conduct
and human rights education

ESG

Thorough implementation ofusage complianceS

Improvement of employee
satisfaction

S

Enhancement of human resources
development and education andtraining programs

STEP 1 : Extraction of issues● Potential materialities were extracted from various guidelines related to
CSR, including the GRI Standards, the SDGs, and ISO 26000.
STEP 2 : Organization of issues

Foundations of AICA

● The potential materialities are assessed from the dual angles of the perspectives of stakeholders (customers, shareholders, suppliers, employees, local communities) and our corporate philosophy and corporate
policy. They are then plotted onto a matrix and the issues are organized.
STEP 3

S: Prioritization of materialities● The top-ranking issues from both stakeholders’ perspectives and company management perspectives are provisionally decided as key issues.

Humanresources

S

Diversity of human resources andequal opportunity

S

Improvement of occupational
health and safety

ES

Development and popularizationof AS*6 products

STEP 4 : Finalization of materialities● The suitability of the selected material issues is discussed and approved in the Management Meeting and the issues that are ultimately
at the top of the list are finalized as the materialities.
Corporate results(economic performance)

Major

Importance to stakeholders(Impact on stakeholder evaluations and decision-making)

Prevention of global
warming

E

Reduction of industrial
waste
Product
Liability

Corporate governance
Reduction ofwater use

Thorough implementation ofusage compliance

Enhancement of human resources development
and education and training programs
Improvement of customer
satisfaction

Improvement ofoccupational healthand safety

Integration ofManagement and CSR
Development andpopularization of AS*6 products

Strategic roll-out of CSR in
overseas sites(community service)

Raise value through value chain
collaboration

Human Rights Code of Conduct
and human rights education

Improvement of
employee satisfaction

Promotion of responsible care

Promotion of work-life balance

Diversity of human resourcesand equal opportunity
Communication with shareholders
and investors

Promotion of work-life balance

Environment

Prevention of global warming

E

Reduction of industrial waste

E

Reduction of water use

E

Promotion of responsible care

S

Improvement of customer
satisfaction

ES

Raise value through value chain
collaboration

MediumStakeholders
Small

MediumImportance to AICA Group(Significance of impact on organization’s economy, environment, and society)

Major

SG

Product Liability

S

Engagement with Local
Communities

S

Engagement with Shareholders
and Investors

STEP 5 : Deliberate on report contents, measure indicators
STEP 6 : Report
STEP 7 : Review report outcomes and consider responses

31

AICA Group CSR Report 2020

FY2020
Page

Evaluation

Sales: 200 billion yen
Ordinary profit: 22 billion yen

Sales: 191.5 billion yen
Ordinary profit: 21.3
billion yen

×

Sales: 174.5 billion yen
Ordinary profit: 14.7 billion yen

P. 5 -

Incompletion of improvement of matter for internal
control correction: 0

0○

Incompletion of improvement of matter for internal
control correction: 0

P. 34

Implemented〇○

Formulation of CSR policies and non-financial goals inline with the next Mid-Term Business Plan

P. 29

Implemented
Implemented○

Incorporation of materialities and management of theirprogress in individual departments’ actions plans*2
Appointment of CSR promotion officer at main Group
companies
Translation of Code of Conduct into multiple languages(Thai and Vietnamese versions produced and publishedon website)

Target*1

Review of Codes of Conduct based on CSR Policy

Compliance training
At least 18 sites a year, for at least 400 people

Implemented○

Read Code of Conduct and Action Guidelines together
All sites: Once a year

Implemented○

Compliance training
At least one at all sites of AICA Kogyo and Group
companies in Japan
Confirmation of applicable laws and ordinance andconformity with them at overseas sites
Read Code of Conduct and Action Guidelines together
All sites: Once a year

Employee satisfaction survey*2

Implemented〇

Revision of systems based on outcomes of Employee
satisfaction survey*2

Establishment of new educational system*2
Creation of skills lists by division and by employment
grade

Not implemented

×

Enhancement of education and training programs usinge-learning*2

Percentage of paid leave taken of 60% or more*2 *3

66.7%

〇

Percentage of annual paid leave taken*2 *3
Keep at 60% or more

Reduction of overtime worked due to roll-out of
productivity improvement measures*2

9.6% reduction in
overtime worked perperson〇Promotion of company-wide operational
improvements*2

Percentage of women among new-graduate career
track recruits joining in April 2020*2: At least 30%

30.0%

〇

Percentage of women among new-graduate
career track recruits joining in April 2021*2
At least 30%

Percentage of people with disabilities*2 *7: At least 2.2%

2.35%

○

Percentage of people with disabilities*2 *7:
At least 2.2%

Industrial accident frequency rate*4
Less than national manufacturing industry average (Last
FY: 1.20)

0.83〇

Industrial accident frequency rate*4
Less than national manufacturing industry average (Last
FY: 1.20)

Value of sales of AS products*2:
At least 15.5 billion yen (Year-on-year: 116%)

15.0 billion yen(Year-on-year: 111.6%)

×Greenhouse gas emissions revenue intensity*4
3% year-on-year decrease

5.6% year-on-year
decrease〇

Greenhouse gas emissions revenue intensity*4
3% year-on-year decrease

Industrial waste emission revenue intensity*4
2% year-on-year decrease

22% year-on-yearincrease×

Industrial waste emission revenue intensity*4
5% year-on-year decrease

Water intake: 1% year-on-year decrease*5

Decrease〇

Water intake production intensity: 2% year-on-year
decrease*5

Environment-related litigation or administrative
penalties: 0

No material complaints○

Environment-related litigation or administrative
penalties: 0

Conduct and analyze customer satisfaction survey andpose issues *2

Implemented○

Conduct and analyze customer satisfaction survey andpose issues *2

P. 56

Surveys: 102
companies
Audits: 12 companies

×Mandatory submission of written agreement to CSR
purchasing guidelines when signing new transaction
contracts, request existing suppliers to submit writtenagreement*2

P. 57

Implemented○

Assess risk at overseas sites, establish BCP, andconduct training

P. 41

Conduct training at sites with completed BCPs

Implemented○

Conduct education aimed at raising standard of quality
control*2

Plan new educationplans and commence
operation of skills
assessment○

Establishment of new education plans and skills
assessment*2-

14 collaborations○

Collaborations with local activist organizations*2: 13 or
more
Hold IR events for individual investors: 3 or more events
Hold small ESG meetings: At least 1 meeting

Value of sales of AS products*2:
At least 17.8 billion yen (Year-on-year: 112%)
Review and further invigoration of product range inlead-up to next Mid-Term Business Plan

1 event

×

Formulation of guidelines for community service
activities
Hold IR events for individual investors: 3 or more events

1 event○

Hold small ESG meetings: At least 1 meeting

P. 39

Foundations of AICA

Survey based on new CSR assessment rating system*2:
At least 80 companies
Audit and CSR improvement assistance based on
assessment results*2: At least 15 companies
Formulate BCP for three overseas sites, formulate BCP
based on flood damage scenario at four Japanese sites
with a high flood risk, identify water risks at overseas
sites

SDG Response

AICA’s Vision

Achievement

About AICA

FY2019Target*1

P. 43 -

P. 46

P. 21

P. 49 -

P. 59
P. 58

*1 Except for corporate business results, excludes portions newly included in consolidated figures in fiscal year in question *2 Target scope is AICA Kogyo (parent company only)*3 Paid leave is granted on September 16; leave taken is calculated for period from September 16 of previous year to September 15 of year in question*4 Target scope is domestic production sites of AICA Group *5 Target scope is domestic production sites excluding AICA-TECH Kenzai Co., Ltd.
*6 Abbreviation for “Aica Solution.” Products that help solve social issues. *7 Calculated according to statutory calculation methods

AICA Group CSR Report 202032

Foundations of AICA

Business Infrastructure
About AICA

Corporate governance
Basic Policy on Corporate Governance

AICA’s Vision
Foundations of AICAThe AICA Group seeks to ensure and improve the value of thecompany and the common interests of its shareholders throughthe enhancement of corporate governance at each of its Group
companies, including its subsidiaries in Japan and overseas.
In June 2020, we transitioned from a Company with a Board ofAuditors to a Company with Audit and Supervisory Committee.
The Audit and Supervisory Committee, more than half of whose
the Audit and Surpervisory Committee members are external
directors, is responsible for auditing and supervising the legality
and appropriateness of the execution of business for the realization of more transparent management. In this way, we aim tostrengthen our corporate governance further and also to build aframework that will more appropriately meet the expectations of
our stakeholders in Japan and overseas.
We have also established a Governance Committee as
an advisory committee to the Board of Directors. This committee is chaired by an external director and its members arealso primarily external directors. The Governance Committee
deliberates on key matters concerning governance, including
the appointment and remuneration of management executives,with the aims of sustainable growth, medium to long-term improvement of corporate value, and further enhancement of governance functions.

● Corporate Governance Structure and Internal Control Systems (as of June 23, 2020)
General Meeting of Shareholders
Appointment/Dismissal

Appointment/Dismissal
Board of Directors

Directors(except for members of Audit
and Supervisory Committee):
8 personsMembers of
Audit and Supervisory
Committee:
3 personsAppointment/
Dismissal

Representative Director

Audit andSupervisory
Committee

ReportReportReportDirections

Internal Audit Office

ReportExternal Counsel

AICA Group CSR Report 2020

Accounting Audit

Internal Control Audit
Corporate Ethics Committee
Advice33

Audit and Supervisory
Committee Secretariat

Internal Control Committee

Management Meeting
Management Promotion Meeting

Coordination

Accounting Auditor

Governance Committee

Audit andSupervision

Reportis being ensured.
On the other hand, matters raised as issues were the enhancement of diversity in the membership of the Board of
Directors, enhancement of the establishment and operationof internal control and risk management frameworks, andenhancement of deliberation of risks that impact business.
Regarding the diversity of the Board membership, a female external director was appointed in June 2020. Going forward, we
will work on making improvements to further raise the effectiveness of the Board of Directors.

AICA’s Vision

In order to verify the effectiveness of the Board of Directors,
since January 2017, we have conducted an annual survey of all
directors and auditors regarding the structure, operation, andagenda of the Board and the Board’s support structure. The
effectiveness of the Board is evaluated on the basis of theresults of this survey. In the survey conducted in February 2020,
responses of “appropriate or reasonably appropriate” were obtained for all except three of the matters surveyed. Based on
this positive feedback, we confirmed that our Board of Directors
is generally functioning appropriately and that its effectiveness

About AICA

Effectiveness of the Board of Directors

Internal Control Activities
to the internal control evaluation reporting system for financial
reporting under the Financial Instruments and Exchange Act.
The main committee members in charge of four major control
processes conduct maintenance management and self-inspection. Meanwhile, the Internal Audit Office conducts separate internal audit assessments to maintain and improve the reliabilityof our financial reporting.
Each year, the Office reports to the Internal Control Committee
on the status of internal control in the previous year, based on
the financial reporting under the Act, and obtains approval forthe current year’s activity plans.

Foundations of AICA

In compliance with the Companies Act, the Board of
Directors of the AICA Group has adopted a Basic Policy for
Establishment of Internal Control Systems. Under this policy,
the Group is working to reinforce the supervisory functions of
the Board of Directors, risk management structures, and thecreation of systems to improve the effectiveness of corporate
compliance. The Internal Audit Office assesses the status of development and operations in these areas through auditing activities and interviews with the relevant departments, to confirm
the effectiveness of the Company’s internal control systems. We
have also established an Internal Control Committee to respondDirectors’ Remuneration
Remuneration of company directors consists of a fixedbasic remuneration and variable performance-based remuneration. The criteria and methodology for evaluation of performance-based remuneration, its percentage of total remuneration, and other relevant matters are published in the Annual
Securities Report. The appropriateness of evaluations andremuneration amounts for individual directors is examined by
the Governance Committee, whose main members are theexternal directors, to ensure objectivity and fairness. From theperspectives of their roles and independence, remuneration of
external directors consists solely of basic remuneration.

AICA Group CSR Report 202034

List of Directors (As of June 26, 2020)
About AICA

Directors (excluding directors who are members of the Audit and Supervisory Committee) (7 male, 1 female)Yuji Ono

AICA’s Vision

Director and Senior Managing
Executive Officer
Born August 16, 1957

Apr. 1979 Joined AICA Kogyo
Apr. 2000	No. 1 General Manager,
Chemical Development Dept.
Oct. 2002	General Manager, Sales Dept.,
Chemical Products Company
Jun. 2004 Executive Officer
Oct. 2004 Director, No. 2 R&D Center
Apr. 2008	Head of the Chemical ProductsCompany
Jun. 2008 Director
Jun. 2009 Managing Director
Jun. 2010	Representative Director (present)
and President
Jun. 2018	President and Executive Officer(present)

Apr. 1980	Joined The Tokai Bank, Ltd.
Apr. 2009	Joined AICA, General Manager, Financial Planning Dept.
Jun. 2009 Executive Officer
Jan. 2010	General Manager, General Planning Dept.
Jun. 2010 Director
Apr. 2013	General Manager, Overseas Business Dept.
Jun. 2014 Managing Director
Apr. 2017	Responsible for Financial Administration Dept.
(present), Responsible for Logistics Dept. (present)
Apr. 2018	Responsible for Operations
Administration Dept. (present)
Jun. 2018	Director (present) and Senior
Managing Executive Officer (present)
Apr. 2019	Responsible for Information Systems
Dept. (present)
Mar. 2020	General Manager, Corporate Planning
Dept. (present)

Yukihiro Iwase

Nobuyuki Omura

Director and Senior Managing
Executive Officer
Born November 20, 1955

Foundations of AICA

35

AICA Group CSR Report 2020

Satoshi Toudou

Representative Director and President
Born August 24, 1956

Director and Managing Executive Officer
Born April 7, 1964

Apr. 1979 Joined AICA Kogyo
Apr. 2002	Oversight of Tokyo Metropolitan
Area No. 2 Sales
Apr. 2003 Executive Officer
Apr. 2006	Oversight of Tokai-Hokuriku Sales
Feb. 2009	Oversight of Kyushu Sales
Jun. 2010 Senior Executive Officer
Apr. 2011	Head of the Construction
Materials Company
Jun. 2011 Director
Apr. 2015	Head of the Building & Housing
Materials Company (present)
Jun. 2016 Managing Director
Apr. 2018	General Manager, Sales
Administration Division (present)
Jun. 2018	Director (present) and Senior
Managing Executive Officer (present)

Apr. 1988 Joined MITSUI & CO., LTD.
Jan. 2009 Joined AICA Kogyo
Apr. 2009	General Manager, Overseas
Business Dept.
Jun. 2009 Director
Apr. 2011	General Manager, New Business
OfficeApr. 2015	Director and Chairman, AICA
Asia Pacific Holding Pte. Ltd.
Jun. 2017 Managing Director
Apr. 2018	Head of the Chemical ProductsCompany
Jun. 2018	Director (present) and Managing
Executive Officer (present)
Apr. 2020	Head of the Specialty &Performance Materials Company(present)

Ryoji Mori

Kenji Ebihara

Director and Managing Executive Officer
Born September 29, 1959

Director and Managing Executive Officer
Born April 15, 1967

Apr. 1982 Joined AICA Kogyo
May 2000	General Manager, Laminates Production Dept.
Apr. 2006	General Manager, Production Administration
Dept., Construction Materials Company
Oct. 2009	General Manager, Production Administration
Dept., Chemical Products Company
Jun. 2011 Executive Officer
Jun. 2013 Senior Executive Officer
Jun. 2015 Director (present)
Jun. 2018	Managing Executive Officer (present)
Apr. 2019	Responsible for Safety and Environment Dept.
(present), Responsible for Purchasing Dept.
Apr. 2020 Deputy Head of Construction and Housing
Materials Company (present), Responsible
for Technology, Construction and Housing
Materials Company (present), General Manager,
Production Administration Dept., Constructionand Housing Materials Company (present)

Apr. 1991 Joined AICA Kogyo
Apr. 2009	General Manager, Chemical
Development Dept., R&D Center
Oct. 2010	Manager, Jimokuji Laboratory,
R&D Center
Apr. 2013 Director, R&D Center
Apr. 2015	Head of Specialty & Performance
Materials Company
Jun. 2017 Executive Officer
Jun. 2018 Senior Executive Officer
Apr. 2019	Managing Executive Officer (present)
Jun. 2019 Director (present)
Apr. 2020	Head of the Chemical ProductsCompany (present), Deputy
General Manager, Sales
Administration Division (present)

Kenji Ogura

Ayako Shimizu

External Director
Born October 1, 1947

External Director
Born June 6, 1972

Apr. 1970 Joined Sony Corporation
Oct. 1988	Director and General Manager,
Administration Dept., Sony
Nagasaki Co., Ltd.
Jun. 1995	Director and General Manager,
Administration Dept., Sony
Kokubu Co., Ltd.
Oct. 1997	Director and General Manager,
Administration Dept., ST Liquid
Crystal Display Corporation
Jun. 2005	Representative Director andPresident, C-CUBE Corporation
Jun. 2012 External Auditor, Cool. revo Inc.
Jun. 2014	External Director, AICA Kogyo(present)
Jun. 2015	External Director, Cool. revo Inc.
(present)

Apr. 1999	Registered as attorney, Ishihara Law
Office (present)
Jun. 2014	External Auditor, SYNCLAYER, Inc. (present)
Apr. 2015	Deputy Chair, Aichi Bar Association	
Director, CHUBU Federation of Bar
Associations
Apr. 2016	Member, Aichi Dispute Coordinating
Committee (present)
Apr. 2017	Member, Nagoya City Information
Disclosure Screening Commission (present)
Jul. 2017	Member, Aichi Prefecture Committee
for Adjustment of Construction Work
Disputes (present)
Jan. 2018	Judicial Commissioner (present)
Apr. 2019	Mediator/Arbitrator, Dispute Resolution
Center, Aichi Prefecture Bar Association(present)
Dec. 2019	External Director, MTG Co., Ltd. (Memberof Audit and Supervisory Committee)(present)
Jun. 2020	External Director, AICA Kogyo (present)

Mar. 1977 Joined AICA Kogyo
Apr. 2002	Head of Electronic Materials
Company, Executive Officer
Jun. 2004 Director
Oct. 2004 Responsible for Logistics Dept.
Apr. 2005	Head of the Construction
Materials Company
Oct. 2006 Director, No. 1 R&D Center
Jun. 2008 Managing Director
Apr. 2013	Head of the Building & Housing
Materials Company
Jun. 2015 Full-time Auditor
Jun. 2020	Director (full-time memberof Audit and Supervisory
Committee) (present)

Apr. 1969	Joined Nippon Telegraph andTelephone Public Corporation(today’s Nippon Telegraph andTelephone Corporation)
Apr. 1994	Vice President Tokai Branch	Nippon Telegraph and Telephone
Corporation
Jul. 1997	Advisor and General Manager,
Corporate Planning Office,
C-CUBE Corporation
Jun. 1998	Senior Managing Director,
C-CUBE Corporation
Jun. 1999	Representative Director andPresident, C-CUBE Corporation
Jun. 2011	Director and Counsellor, C-CUBE
Corporation
Jun. 2017	Representative Director andPresident, MYPLANET Co., ltd.
Jun. 2018 External Auditor, AICA Kogyo
Jun. 2020	External Director, AICA
Kogyo (Member of Audit andSupervisory Committee) (present)

Shoji Miyamoto

External Director (member of Audit
and Supervisory Committee)
Born February 8, 1956

External Director (member of Audit
and Supervisory Committee)
Born September 20, 1946

Apr. 1978	Joined Konishiroku Photo
Industry Co., Ltd. (today’s
KONICA MINOLTA, INC.)
Oct. 1985	Joined Ito Accountants Audit
Firm
Mar. 1989	Registered as Certified Public
Accountant (CPA)
Jul. 2005	Senior Partner, Chuo Aoyama
PwC
Aug. 2007	Managing Partner, Azusa Audit
Firm (today’s KPMG AZSA llc)
Sep. 2010 Director, KPMG AZSA llc
Sep. 2014 Auditor, KPMG AZSA llc
Jul. 2018	Director, Miyamoto Shoji CPA
Office (present)
Jun. 2019 External Auditor, AICA Kogyo
Jun. 2020	External Director, AICA
Kogyo (Member of Audit andSupervisory Committee) (present)	External Director, Meito Sangyo
Co., Ltd. (Member of Audit andSupervisory Committee) (present)

Foundations of AICA

Kiyoshi Katagiri

Director (full-time member of Audit
and Supervisory Committee)
Born June 10, 1954

AICA’s Vision

Terutoku Iwata

About AICA

Directors who are members of the Audit and Supervisory Committee (3 male, 0 female)The reasons for the appointment of external directors are as follows.
DutiesName

Reason for Appointment

Reason for Designation as Independent Director

External Director

Kenji Ogura(Independent
Director)

Kenji Ogura has extensive experience andknowledge as a corporate executive, which we
believe he will be able to leverage in enhancing
AICA’s management structures.

Because he has no background at any of AICA’s subsidiaries, major shareholders, or major trading partners,
he has no particular stake in AICA, and we believe thatno conflict of interest with general shareholders would
arise. For these reasons, he has been designated as an
Independent Director.

External Director

Ayako Shimizu(Independent
Director)

Ayako Shimizu will be able to leverage her extensive expert knowledge and experience as an attorney in the supervision of AICA’s management.
We also believe that, as an external director, shewill be able to offer advice based on diversity perspectives.

Because he has no background at any of AICA’s subsidiaries, major shareholders, or major trading partners,
he has no particular stake in AICA, and we believe thatno conflict of interest with general shareholders would
arise. For these reasons, he has been designated as an
Independent Director.

External Director/
Member of Audit
and Supervisory
Committee

Kiyoshi Katagiri(Independent
Director)

Kiyoshi Katagiri has been involved in corporate
management and has extensive experience andknowledge as a business owner. We believe that
he will be able to offer advice and oversight tothe company’s management overall as an external director and member of the Audit andSupervisory Committee.

Because he has no background at any of AICA’s subsidiaries, major shareholders, or major trading partners,
he has no particular stake in AICA, and we believe thatno conflict of interest with general shareholders would
arise. For these reasons, he has been designated as an
Independent Director.

External Director/
Member of Audit
and Supervisory
Committee

Shoji Miyamoto(Independent
Director)

Shoji Miyamoto has extensive expert knowledge
and experience as a certified public accountant.
We believe that he will be able to offer advice andoversight to the company’s management overall
as an external director and member of the Audit
and Supervisory Committee.

Because he has no background at any of AICA’s subsidiaries, major shareholders, or major trading partners,
he has no particular stake in AICA, and we believe thatno conflict of interest with general shareholders would
arise. For these reasons, he has been designated as an
Independent Director.

AICA Group CSR Report 202036

Interview with External Directors
About AICA

I want to make proposals thatwill lead to AICA’s sustainable
development and growth

While maintaining the minimum functions of
the previous Board of Auditors, we will further
strengthen the relationship between the Board of
Directors and the Audit and Supervisory Committee

AICA’s Vision
Foundations of AICA

Kenji Ogura

Kiyoshi Katagiri

External Director

External Director(Chair, Governance Committee)

Q

What do you see as AICA’s strengths?

Ogura: I believe that it is its technological strengths, evidenced
by the high regard with which the company is held within theindustry. Its mainstay product, high pressure laminate (HPL),
which has captured a large market share, came about becauseof the core technologies it had cultivated in its many years ofdeveloping adhesives. Those technological strengths havesince given rise to second and third hit products. Another of
AICA’s major strengths is the robustness of its financial positionin maintaining a high capital adequacy rate and self-financing
its M&As.

Q

Katagiri: I think its speedy technological development capabilities are a major strength. R&D is carried out in a position close
to the users, and its product development takes careful accountof the needs of society. Launching a product on the market is
not the end, and its ability to keep improving its products is
another strength. It also provides a stable supply of high-quality
products, which has allowed it to build relationships of trust withend users. When I became an Auditor two years ago, I was
struck by how my impression of the company from the outside
differed very little from what it was really like.

What is your view of the Board of Directors?

Ogura: The Representative Director, who serves as Chair, does
not give his own opinion at first, but instead listens carefully
to the opinions of the other Directors before final decisions are
made, which I think is an excellent, honorable way of running theBoard. However, I do find that, with many of the motions on theagenda, while they are very detailed and easy to understand,
it is difficult to discern the proponents’ intentions. If the proponents approach the Board of Directors with a determination to37(Member of Audit and Supervisory Committee)

AICA Group CSR Report 2020

obtain approval, and the individual Directors giving that approval actively express their opinions, the Board has the potential
to become a place for human resources development that will
foster the next generation of executives. The internal directors
also serve concurrently as executive officers and are each responsible for their respective business divisions, but I would liketo see them express their opinions more on motions proposedby divisions other than their own. If the directors could increaseQ

What do you think is the role of the Governance Committee?

Q

What do you think is the role of the Audit and Supervisory Committee?

Katagiri: From the position of Auditors, we are required to check
legality and crisis management. Assessments of future impact
tend to be somewhat generous when performed from the inside,
so I have stated my opinion that measures should be put in place
promptly from the assumption of worst-case scenarios.
On June 23, 2020, we will transition to an Audit and Supervisory
Committee. While maintaining the minimum functions that theBoard of Auditors has had until now, I want to strengthen theQsuch as entrusting the authority for business execution to the
President and Executive Officers, strengthening the examination
and approval authority for business execution of the Management
Meeting, and having the Board of Directors dedicated to the examination and approval of more important matters. From the position of the Governance Committee, I hope that we can give
advice that will lead to the development of that kind of structure.

Foundations of AICA

Ogura: I do not see any problems with the current structure whenviewed against the five principles of the Governance Code.
However, to improve the supervisory functions of the Board of
Directors, I do believe there is a need to pursue reforms aimed at
the separation of business execution and supervision. I think thatthe structure could be improved by reforming the operations of
the Management Meeting and the Board of Directors a little more,

AICA’s Vision

Katagiri: Agenda items are submitted in an appropriate andtimely manner and there is no sense that important matters arebeing progressed without us knowing about them, so I believethat the Board is functioning adequately. The meetings do not

become mere formalities and there is lively discussion of eachof the items on the agenda. However, as Mr. Ogura just mentioned, the Board of Directors should be used as a place for human resources development. First, I would like the proponents
to approach their presentations with inspiring materials thatclearly outline the background and objectives of their motions.
If they do that, their arguments will become much clearer, and it
will enrich the discussion among the Board. It would be better
if, when the directors with responsibility for the proponents havethem prepare their presentation materials, they do so with thesense that they are nurturing their own successors.

About AICA

their own awareness that they are in a position of approving
and overseeing all motions and that they have the responsibility
and authority to express their opinions, I believe it will help tostrengthen the company’s governance. From my own position
as an external director, I personally want to make proposals thatwill lead to AICA’s sustainable development and growth.

Committee’s relationship with the Board of Directors and speak
up in ways that will raise corporate value, thus helping to benefit
shareholders. I also believe that it is the role of the Audit andSupervisory Committee to supervise and guide the company tomaintain highly transparent management that discloses information accurately in both good times and bad times. We will coordinate closely with the Overseas Planning Department launchedin April and strengthen governance at our overseas sites as well.

What are your expectations of AICA going forward?

Ogura: The Japanese construction market, which is AICA’s major field of business, is clearly shrinking, so to ensure profitability,
the company will absolutely need to increase the percentage
of its sales in overseas markets. In recent years, the Chemical
Products Business has been leveraging M&As to make steadyinroads into overseas markets, but the Chemical Products
Business has a lower earning capacity than the Construction
Materials Business. The key going forward will be how well
AICA can pursue overseas expansion in its more profitable
Construction Materials Business. It is gradually developing aplatform through the commissioning of new plants and the active use of M&As, so the challenge will be how well it can get
the business on track. This is where my expectations lie. AICA’s
core technologies are in the Chemical Products Business. In

recent years, however, growth of that business in Japan has
been sluggish. Losing those foundations would be a major loss
for the company, so I hope that it will concentrate its efforts on
rebuilding them.
Katagiri: I have great expectations for the future developmentof its overseas business, and I believe that AICA also has a roleto play in the development of the Asian region. I look forward
greatly to its development of products that take advantage ofthe infinite potential of the power of chemistry. I also have hopes
for the further evolution of AS Products that solve social issues,
such as AICA Virutect, the high pressure laminate (HPL) withembedded antiviral agents that was launched last year. I hope
AICA will place further efforts into activities aimed at the SDGs
and that it will pursue them with more concrete targets.
This article is based on an interview conducted on June 5, 2020.

AICA Group CSR Report 202038

About AICA

Additional information about compliance is available on the AICA Kogyo website.

Compliance(Only Japanese)
http://www.aica.co.jp/company/environ/compliance/

Basic Thinking on Compliance

AICA’s Vision
Foundations of AICAThe AICA Group is firmly committed to complying with local
laws and regulations and conducting its business activities ethically at all of its sites in Japan and overseas. The AICA Group
Code of Conduct forms the foundation of the Group’s compliance program. It has been established with the objective of
realizing our Corporate Philosophy and Business Plan in accordance with our Corporate principle of Challenge & Creation. We
have also established Action Guidelines, which set out specificstandards for conduct in accordance with the Code of Conduct.
To raise awareness about compliance among employees, we
use the AICA Group Code of Conduct and Action Guidelines tohold annual training in individual workplaces at all of our sites inJapan and overseas, including Group companies. In this training, we thoroughly instill in our employees a consciousness ofthe positioning of the Code of Conduct and Action Guidelines
and the significance and necessity of compliance. We confirm
employees’ understanding through training reports, and we
also confirm any requests made by employees.
Further, the Corporate Ethics Committee, Legal Department,Internal Audit Office, Safety and Environment Department, andQuality Assurance Department play a central role in travelingaround to all of the sales offices, plants, Group companies,
and other sites to conduct harassment education, including for
managers, and compliance training for operational staff, and toeducate employees about the importance of compliance. Any
issues discovered in the course of these visits are incorporated
into improvement activities throughout the entire company.

● Training conducted in FY2019● AICA Group Code of Conduct Basic Principles

Compliancetraining at
individual sites

Training for sales offices
Training for factories
Training for administrative divisions

8 times/year
21 times/year
Once a year

Compliancetraining by job
grade

New manager training
New employee training

Once a year
Once a year[1] Compliance with laws andregulations[2] Respect for human rights[3] Harmony with society[4] Fair trade[5] Reassurance and trust ofcustomers[6] Proper information disclosure[7] Employment, labor, and labormanagement relations[8] Protection of company
information and property[9] Environment and safety

Respect for human rights
The AICA Group supports and respects international norms
concerning human rights, such as the Universal Declaration of
Human Rights, the ILO Declaration on Fundamental Principles
and Rights at Work, and the UN Guiding Principles on Businessand Human Rights. The AICA Group Code of Conduct clearlystates our guidelines regarding respect for human rights to fulfill
our corporate responsibilities.

We have established work rules that are compliant with thelaws of the individual countries we operate in. We manage
working hours and assign workers in an appropriate manner
to ensure that there are no excessive working hours or forcedlabor. When we employ new workers, we ask them to present
ID to confirm their age, to prevent child labor.

Corporate Ethics Committee
The AICA Group has established a Corporate Ethics
Committee whose objectives include the development and promotion of necessary policies for compliance, and the investigation, confirmation, and implementation of corrective action in
the event of a whistleblowing report being made to the internal
whistleblowing hotline, Corporate Ethics Committee Window.

39

AICA Group CSR Report 2020

The Corporate Ethics Committee promptly investigates andaddresses all whistleblowing reports and, where necessary,takes corrective action. The details of all such cases are reported to the senior executives and the members of the Audit andSupervisory Committee on a regular basis.

To ensure that potential risks of breaches of workplace morals, such as infringements of laws and company regulations,bribery and corruption, and harassment, can be addressed
promptly, the AICA Group has established an internal whistleblowing hotline, Corporate Ethics Committee Window, inside
the company and at a law firm outside the company.
Employees of the AICA Group, both in Japan and overseas,

are able to report to or seek advice from the Corporate Ethics
Committee Window about any problems or concerns they
may have regarding corporate ethics and compliance. They
can do so by telephone or e-mail at any time, without worrying that they themselves will be disadvantaged for having done
so. Anonymity is assured in this system, so anonymous whistleblowing reports are accepted.

AICA’s Vision● Concept diagram: Corporate Ethics Committee and whistleblowing system
Corporate Ethics Committee
PresidentInternal hotline
Law firm

Manager,Internal Audit OfficeSecretariat (General Manager,
Human Resources Dept.)

Corporate lawyer (observer)[Roles](1) Planning and promotion of measures necessary for compliance in the AICA Group(2) Investigation, confirmation, and corrective action concerning whistleblowing cases
presented to the Corporate Ethics Committee Window and/or cases that single Group
companies are unable to solve.
(3) Deliberation and proposals regarding the application of disciplinary action in the eventof problems that arise from a compliance perspective

Foundations of AICA

Corporate Ethics
Committee Window

Responsible for Financial
Administration Department

About AICAInternal Whistleblowing System

Employees*Number of cases brought to Corporate Ethics Committee Window in FY2019: 6

Anti-corruption Policy
AICA Kogyo endorses the ten principles of the United Nations
Global Compact. Believing the use of power invested in oneself
for one’s own personal gain, either financial or non-financial, tobe corruption, we are committed to the prevention of all formsof corruption, including bribery to or from government officials
or suppliers, embezzlement, money laundering, and obstructionof justice, or forcing others to commit such acts.
We have put this policy into writing in the form of the

document, Preventing Bribery and Corruption - For Fair Trading,which we have distributed to all employees under the signature of the President of AICA Kogyo. No. [4] Fair and Equitable
Trading in the AICA Group Code of Conduct also states clearly
that we will not be involved in corruption. Training is held every year for individual workplaces at all of our sites in Japanand overseas, including Group companies, using the Code of
Conduct.

AICA Group CSR Report 202040

About AICA

Risk Management
Basic Thinking on Risk Management

AICA’s Vision
Foundations of AICATo ensure the mitigation of losses
due to unforeseen circumstances,
certain departments have been assigned to address the various risks
surrounding the management environment. The necessary rules andguidelines have been establishedand risk management is conducted
through the procedures for approval
via circulation of proposals. Reports
on risk assessment are made regularly to the Board of Directors andAudit and Supervisory Committee.

● Risk Management Rules and other related rules
Regulation

Details

Risk Management Rules

Response in the face of a management crisis

Earthquake and Disaster Prevention Rules

Response in the event of earthquake disasterWind and Flood Disaster Prevention Rules

Response in the event of storm or flood damage
disaster

Product Safety Management Rules

Response to product claims in the event of an
accident

MS Emergency Response Rules

Response in the event of a factory fire orenvironmental problem

Information Management Rules

Response in the event of a leak of confidential
information

Action Plan for New-strain Influenza
Countermeasures

Response in the event of an outbreak of a newstrain of influenza

Security and Disaster Preparation
The AICA Group uses many hazardous substances as raw
materials or in supplementary ways to create useful products.
Any mistakes in the handling of these hazardous substances
could cause a major accident, which could have major impacts
on the health of employees, the functions of production equipment, and the local community.
Individual production sites partner with local fire departments
to conduct disaster preparation training.

● Major initiatives in FY2019

AICA Kogyo Co.,Ltd.
Nagoya Plant

In October 2019, joint training was conductedwith the Nishikasugai Fire Department on thepremise of a major earthquake striking the area.
In addition to evacuation training and fire extinguishing training, participants were given an experience of smoke from a fire and demonstrations and instructions for CPR and lifesaving
procedures.

Business Continuity Plan (BCP)The AICA Group has formulated a Business Continuity Plan
(BCP) with the objective of ensuring that important business operations are not disrupted in the event of a major disaster or accident, or, if business activities are disrupted, ensuring that important business operations are resumed by the target recovery
time with the remaining capacity available. Under this plan, theGroup implements a range of responses at times of emergency.
The Great East Japan Earthquake Disaster of March 2011
prompted the establishment of the BCP Committee, which
has engaged in formulating BCPs, as well as playing a central
role in strengthening disaster preparation measures. BCP development began with the key production sites in Japan andoverseas. Those sites that have completed their plans conduct
regular BCP training.
Taking lessons from the flood damage at AICA’s Hiroshima

41

AICA Group CSR Report 2020

Plant during the torrential rain of July 2018, BCP training was
conducted on the scenario of a flood disaster at four sites inJapan (AICA Kogyo’s Nagoya, Jimokuji, and Hiroshima Plants
and AICA-TECH Kenzai Co., Ltd.’s Nagoya Plant) assumed tohave a high risk of flood damage according to a hazard map.
We are also expanding the scope of the roll-out of BCP training with the cooperation of our overseas Group companies andmajor production subcontractors.
Going forward, by making the contents of the disaster scenarios on which the training is based more detailed, we will conduct further training that delves deeper into what actions should
be taken when and by whom. We will also clarify the competencies required at times of disaster and place efforts into humanresources development with the aim of prompter restoration ofoperations and alternative production at such times.

Name of site

Location

Matters regarding holding of training

Ama, Aichi Prefecture

Hiroshima Plant, AICA Kogyo Co., Ltd.

Mihara, Hiroshima Prefecture

Nagoya Plant, AICA-TECH Kenzai Co., Ltd.

Ama-gun, Aichi Prefecture

Tanba Plant, AICA Kogyo Co., Ltd.

Tanba, Hyogo Prefecture

Isesaki Plant, AICA Kogyo Co., Ltd.

Isesaki, Gunma Prefecture

Fukushima Plant, AICA Kogyo Co., Ltd.

Iwase-gun, Fukushima
Prefecture

Headquarters Plant, AICA Interior Kogyo Co., Ltd.

Komaki, Aichi Prefecture

AICA Harima Kogyo Co., Ltd.

Kasai, Hyogo Prefecture

Akeno Plant, AICA-TECH Kenzai Co., Ltd.

Chikusei, Ibaraki Prefecture

Ichikawa Plant, AICA-TECH Kenzai Co., Ltd.

Kanzaki-gun, Hyogo Prefecture

AAPH* Group Sites

Singapore, etc.

BCP training assuming flood disaster
Confirmation of roles in Phase 0 (before and immediately after
disaster)(Formation of flood prevention team, securing of supplies in an
appropriate location, production of equipment (parts) lists, etc.)

Training assuming earthquake

Prepared initial response list in event of fire at all sites except
AICA Hatyai. Conducted first training sessions at AICA Malaysia
and AICA Singapore.
*AICA Asia Pacific Holding Pte. Ltd.

Hiroshima floods
AICA Kogyo’s Hiroshima Plant sustained severe flood damage
due to torrential rainfall in the region in July 2018. After the disaster,
the plant’s response began with confirming the safety of its employees. Based on the BCP plan and initial response list that had
been previously established, information was then collected about
raw material suppliers and customers, and the entire staff put allof their efforts into restoration of operations, under the directionof the President of AICA Kogyo. As a result, on July 21, just two
weeks after the flooding on July 6-7, production of some products
was resumed, and from September 3, about two months after thedisaster, production had been resumed for almost all models. The
factory had been insured for the damage, so we were able to keep
the impact on business performance to a minimum.

Photo taken July 7, 2018
Scene of the flooding

Foundations of AICA

Kiyosu, Aichi Prefecture

Jimokuji Plant, AICA Kogyo Co., Ltd.

AICA’s Vision

Nagoya Plant, AICA Kogyo Co., Ltd.

About AICA

● Major initiatives regarding BCP in FY2019

Photo taken July 12, 2018
Warehouse after floodwaters receded

Information Security
Through the implementation of our Information Management
Rules and Information Management Committee, we have established rules for the use and management of information, andwe strive to strengthen our information security frameworks.
Regarding personal information, which involves the privacy of
our customers, we have reviewed our management categories
and security rules and reflected that review in the Information
Management Regulations.

We have also developed a response manual that is put into
practice in the unlikely event of an information leak.
We are also striving to instill in our employees a firm consciousness of information management through initiatives suchas internal information security audits, which are designed toconfirm the state of information management within the company, and ongoing training.

● Case study of implementation of security measures at AICA Kogyo Co., Ltd.
● Employee ID authentication is used for log-in authentication toprevent unauthorized access by third parties. The password for
logging into the company system is also changed regularly.

● Data on laptop computers that can be taken out of the company
is encrypted and the laptops have also been connected to secure
networks.

● The security level of external networks has been diagnosed bysecond parties (interested parties, security management subcontractors) and assessed as being without problems.

● Updates of anti-virus software and security patches are sent to PCs.

● We conduct information security audits of our major systems development subcontractors to confirm the state of their information
security implementation and management.

● We reinforce information management through a full-scale ban on
the use of USB memory sticks on PCs connected to the company
network.

● We have installed and run core servers in our data center, including for BCP-based responses.

AICA Group CSR Report 202042

Foundations of AICA

Human resources

Additional information about human resources is available on
the AICA website.
(Only Japanese)
http://www.aica.co.jp/company/environ/resource/

About AICA

Labor-management relations
Basic Thinking on Labor-Management Relations

AICA’s Vision

The AICA Kogyo Labor Union was formed in May 1947 andhas remained active since then. The union is a partner and excellent supporter of the company that has shared in the joys
and sorrows of AICA Kogyo for many years. The company cherishes the relationship of trust that it has built up with the unionand has maintained favorable labor-management relations.
To deepen mutual understanding, the top three executives of
the union and the Human Resources Department hold meetings once a month to exchange information. The union also
meets with the senior executives several times a year, including

at labor-management negotiations, to discuss corporate policy,
the progress of the Mid-Term Business Plan, the general situation in individual businesses, and the various programs andschemes.
Based on the Code of Conduct, AICA sites in the various
countries and regions also respect freedom of association, theright to organize, and the right to collective bargaining as therights of their employees, and strive to build favorable relations
with employees through close communication.

Foundations of AICA

Employee survey
As social values have become more diverse, how employees
who work at a company think about that company and theirmindset toward their work have changed and diversified.
Recognizing that employee awareness surveys are vital to thefurther growth and development of the company, we ask an
external organization to hold such surveys on the company’s
behalf on a regular basis. Following on from the last survey in2016, a survey was conducted in July 2019.
The survey company reported that “General Satisfaction,”

which indicates the degree of employees’ satisfaction with thecompany, was “slightly higher” than the average for common
companies, both in the 2016 and 2019 surveys. Of course,
there were variations in the results according to age group andoccupation. We will analyze the details of these findings andincorporate them into our various policies, including our humanresources programs. We will also hold regular surveys into the
future and implement measures to raise employee satisfaction
from a medium to long-term perspective.

Human resources development
Basic Thinking on Human Resources Development
AICA Kogyo nurtures people who have a strong awarenessof personal growth and their futures, and who strive forcefully toward the corporate principle of “Creation & Challenge.”
Recognizing that employees are an important presence whowill transform the company and raise our corporate value, weare placing efforts into human resources development that willallow every individual employee to demonstrate their strengths
to the fullest.

Training Schemes
A variety of human resources programs is available. They
range from follow-up programs for prospective employees tograde-based training and self-development assistance to encourage employees’ steady career advancement.
For new recruits, a training program has been introduced tocultivate “independent personnel” who are able to think andact for themselves. This program is conducted over a periodof three years from the commencement of their employment.
A combination of OJT and mentor programs is also used, with
the Human Resources Department and the divisions to which
the new recruits are assigned working in tandem to cultivate thenew employees.

43

AICA Group CSR Report 2020

We are also focusing efforts on the development of global
human resources. This entails the incorporation of language
training in the second and third years of the new recruit training,as well as opportunities to experience meetings with overseas
Group companies via video teleconferencing systems. We havealso established an overseas trainee scheme, which provides
opportunities to work overseas, such as being dispatched tooverseas Group companies.
We have also established correspondence education
schemes and schemes for obtaining public qualifications, andwe support employees’ individual study endeavors by coveringcosts and granting bursaries.

Prior to joining

Grade-based
training

Correspondence
education prior
to joining thecompany

General gradeMid-level grade

Manager gradeMid-level grade training

Management training
Labor affairs, legal, humanresources, finance andmanagement strategy, etc.

New employee training
On-the-job
training (OJT)

2nd-yeartraining
Mentor training 3rd-year training

New manager training

Global Human Resources Development
Sales skills enhancement training

Plant manager
training

Production division skills training

Next-generation
executive training

Compliance education
Workplacetraining

AICA’s Vision

Occupationbased grouptraining

About AICA

● Training framework

Labor management education
Quality, safety, and environment education

Assistanceto obtain
qualifications

Online English conversation
Correspondence education
Hazardous materials engineer / Health and safety manager / Adhesives management engineer / Forklift operator /Construction project management engineer / TOEIC, etc.

Diversity / Work-life balance

Foundations of AICA

Selfdevelopment
assistance

Basic Thinking on Diversity and Work-life Balance
We promote diversity in response to the globalization of business and the diverse needs of the market. In the area of women’s
participation in particular, we launched a Women’s Participation
Promotion Project in June 2013 and have focused efforts on
initiatives and the development of an environment in which thepower of women can be put to use in the management of thecompany.
The name of this initiative was changed to the Diversity
Promotion Project in FY2018 and we are working to promote
the establishment of foundations in which more diverse personnel can participate actively in the workplace.

● Certification Status
Certification as Company Promoting Women’s Participation by Cityof Nagoya (January 2016)“Kurumin” certification from Ministry of Health,
Labor and Welfare (Feb. 2016)

This is a program that certifies companies engaged in initiatives to allow women to shine intheir organizations and that presents awards tocompanies with particularly outstanding initiatives in this area.

Companies that meet certain criteria, including assisting employees with raising children, are certified
by the Minister of Health, Labor and Welfare and areable to use the “Kurumin” logo on their advertising,products, and other media.

● Diversity Promotion Activity Goals (Act on Promotion of Women’s Participation and Advancement in the Workplace)Target Initiatives Period: April 1, 2019 - March 31, 2022

Target Categories[1] Increase percentage of female
employees

Target Figures
Percentage of women recruited to newgraduate career-track positions: 30% or more

Current status (as of March 31, 2020)
30.0% (new-graduate recruits joining in April 2020)

New proposals/revision of work-family balance
assistance scheme: 3 or more[2] Increase percentage of female
managers

5.8% (average for other manufacturingindustries) or more

3.1% (7 female managers of a total of 223 managers)[3] Improve rate of recruitment ofpeople with disabilities*

2.3% or more

2.35%

[4] Cultural reform

Percentage of paid leave taken: 70% or more

Percentage of paid leave taken: 66.7% (FY2019 actual result)*According to statutory calculation methods

AICA Group CSR Report 202044

About AICA

Expansion of work-life balance assistance scheme

AICA’s Vision

At a time when both spouses work in a growing number ofhouseholds, and with nursing
care for middle-aged and older
households developing into a social problem, we are working to
expand our programs to assist
employees to balance their home
lives and work without interrupting
their careers as much as possible,
by responding flexibly to diverse
work styles.

● Work-life balance assistance scheme

Comeback Entry
SchemeWe have established a Comeback Entry Scheme for employees who have been
forced to resign for reasons such as caring for small children or elderly family members or their spouse’s transfer. Once the reason for their resignation no longer exists
and they are in a position to return to work, they are able to do so after a recruitment
selection process. (Registration scheme/within five years after resignation)

Revision of scheme
for shortened
working hours forworkers with smallchildren

The period in which employees are able to take advantage of this scheme has been
extended from up to the child reaching school age to the end of the child’s third yearof elementary school. This has made it easier for employees to use the scheme tosuit their personal circumstances and enabled them to overcome the “1st-grade
barrier.”

Revision of timeshift working hours
schemeThe period in which this scheme, which allows eligible employees to shift their startand finish times in 30-minute increments by up to one hour before and after the
set time, has been extended from up to the child reaching school age to the child’s
graduation from elementary school, improving the working environment to make iteasier for those employees to work full-time.

Foundations of AICA

Re-employment Scheme, Employment of People with Disabilities
The Revised Act on Stabilization of Employment of Elderly
Persons mandates the provision of employment opportunities
up to the age of 65 years. Parts of the Act were revised on
April 1, 2013 against a background of the sharp progression ofJapan’s declining birthrate and population aging.
With the aims of responding to these legislative revisions, raising employee motivation, and guaranteeing their lifestyles, wehave made major revisions to our Re-Employment Scheme. We
will continue to develop an environment in which our employees

can work with peace of mind.
Further, with the aim of ongoing employment of people withdisabilities, we have identified the types of work that people withdisabilities are able to perform and are working to firmly establish them in the workplace. With a view to further increasing
the number of people with disabilities whom we employ, we willcontinue to engage actively in measures such as recruitment
interview sessions for people with disabilities.

● Trends in newly engaged employees under the reemployment scheme at AICA Kogyo Co., Ltd.

● Trends in number of employees with disabilities at AICA
Kogyo Co., Ltd.

FY2017FY2018FY2019FY2017FY2018FY2019

18

27

14

21

22

24

Work Style ReformAs the issue of excessively long working hours has becomea social problem and the entire nation is pursuing work stylereform, we launched our own Work Style Reform Promotion
Project on April 1, 2017. We are working actively to create a culture and change mindsets to discourage employees from working excessively long hours. Initiatives include “No Overtime”
days and the reduction of overtime. In March 2020, we urgently
introduced work-from-home due to the impact of the spread of
the novel coronavirus, COVID-19. Taking this opportunity, we
launched a Work Improvement Sub-Committee in April 2020
with the objective of promoting further diversification of work
styles. Through C&C activities (See page 29), we are making
improvements to equipment and operations, pursuing a shift tomulti-skilled workers, and striving across the entire company toreform operations to cut down on long working hours. We arealso promoting scheduled taking of paid leave and the enhancement of our childcare and nursing care assistance schemes.

45

AICA Group CSR Report 2020

● State of paid leave consumption at AICA Kogyo Co., Ltd.
FY2017FY2018FY2019Average days
taken

10.3 days

11.3 days

12.1 days

Average rate ofleave taken

56.0%

61.7%

66.7%

*Target period
Until FY2017: September 16 of previous fiscal year to September 15 ofcurrent fiscal year
From FY2018: March 16 of previous fiscal year to March 15 of current
fiscal year
*Target employees
Employees of AICA Kogyo Co., Ltd., excluding people on temporary
assignment, child-care leave, and leave-of-absence, and part-time andcasual workers.

About AICA

Occupational Health and Safety
Basic Thinking on Occupational Health and Safety
established Health and Safety Committees at each of our sites.
Based on environmental measurements and the findings ofenvironmental diagnoses, we investigate and deliberate on important matters that will form the foundation of measures for
mitigating risks to workers and impediments to health.
Membership of the Health and Safety Committee is comprised of managers and labor union members in equal numbers.
Contractors who work on site are also included in meetings, andefforts are being devoted to further invigoration of communication.

AICA’s Vision

To maintain a sound foundation for the company and achievesustainable growth, it is important that we strive to maintain thehealth of each individual employee and to improve workplacesafety. We recognize that our business activities also have an
impact on the health and safety of contractors who work on oursites and residents of the surrounding area, and we are striving
to maintain the health of stakeholders and to improve the safetyof our workplaces and surrounding environments.
Pursuant to the Industrial Safety and Health Act, we have

Prevention of Industrial Accidents
risk-source improvement activities are conducted in the smallgroup activities (C&C activities P. 29). To enhance these lowkey, steady efforts, from FY2018, the KYT activities being undertaken by the individual small groups are now being assessed
under a point rating system. Pursuing improvements so thattraining is not just a formality, but will be something meaningfulthat leads to greater awareness of safety, we are striving to eliminate industrial accidents.

Foundations of AICATo ensure that the serious accident that happened at the Jimokuji
Plant on January 17, 2006 is not forgotten, we have declared
January 17 as All AICA Safety Day. Every year on All AICA Safety
Day, a minute of silence is observed, and morning assembly hasa safety theme at all workplaces. The AICA Group Occupational
Health and Safety Convention also takes place on this day.
On the factory floor level, KYT (kiken yochi kunren or risk prediction training) activities, hiyari-hatto (near-miss) activities, and● Industrial Accidents Situation
Target Scope

All AICA Group production sites in Japan

Number of industrial accidents(accidents)

Breakdown of number of industrial accidents*Total industrial accidents = non-lost-time accidents + lost-time accidents

18

17
15
10

14

13
4

5

7
5

FY2016FY2017FY2018FY2019Fatal accidents

0

0

0

0

0

Lost-time accidents

3

2

7

6

7

Of which, those
involving people
other than full-time
employees

1

0

3

6

4

Non-lost-time accidents

10

12

10

12

13

Of which, those
involving people
other than full-time
employees

4

4

4

7

6

20

20

8

3

0
2015

10

7

6

2

2
1

2016

2017

2019 (FY)2018

Total number of industrial accidents
Lost-time accidents
Target scope: All AICA Group production sites in Japan① Newly consolidated in FY2015 ② Newly consolidated in FY2016

Frequency rate* Trend

Severity rate* Trend

3

0.15

*Frequency rate = Number of fatalities and injuries caused by industrial accidents(excluding non-lost time accidents) x 1,000,000 ÷ Total work hours
Figures are for permanent employees

2

0

0.84
0.00
2015

0.82

2016

1.41

1.36

0.83

1.26

0.00
2017

2018

All AICA Group production sites in Japan (non-consolidated)
All AICA Group production sites in Japan (consolidated)
National manufacturing industry average0
2019 (FY)

0.05

0.05

0.00

0.00

*Severity rate = Work-days lost x 1,000 ÷ Total work hours
Figures are for permanent employees

0.10

1.73

1

(accidents)

FY2015

0.00
0.00
2015

0.05
0.04

0.00
0.00

0.005
0.003

2017

2018

2019 (FY)

0.00
2016

All AICA Group production sites in Japan (non-consolidated)
All AICA Group production sites in Japan (consolidated)
National manufacturing industry average

AICA Group CSR Report 202046

About AICA

● Major initiatives in FY2019
Occupational
Health and Safety
Convention(January 2020)

Attended by responsible officers of AICA Group production sites
in Japan, and partner companies working on AICA premises.
Presentations of case studies of industrial accident countermeasures, awards for sites with zero accidents, sharing of trends in industrial accidents and responses.

AICA’s Vision
Foundations of AICA

Plant manager
training(January 2020)

Attended by on-site managers of AICA Group production sites
in Japan and partner companies working on AICA premises.
Identification of challenges of on-site management and their solutions, discussion of invigoration of KYT activities as a means ofraising safety awareness, and discussion of measures to strengthen safety management frameworks of partner companies working
on AICA premises and thoroughly instill compliance.

Global QEO Officer
Training(November 2019)

Attended by responsible officers at plants, including overseas
Group companies. Discussed thorough confirmation of safety when
installing new equipment, innovations (signs, multiple languages,etc.) for drawing attention to safety among foreign-national workers,
and raising safety awareness through dialogue with end workers.

AICA Group Occupational Health and
Safety Convention

Risk assessment
Risk assessment is a method for discovering potential risks
and hazards in the workplace and eliminating or mitigating them.
We conduct risk assessments under internal regulations basedon our Occupational Health and Safety Management System atmajor AICA Group production sites in Japan. In the plants, we
conduct risk assessment of chemical substances and pursue
activities to eliminate and mitigate risk.

Prevention of traffic accidents
We have a fleet of just under 300 company vehicles that are
in use in our day-to-day operations. Only those employees who
have been registered after their driving aptitude has been confirmed are permitted to drive the company vehicles. In addition
to traffic laws, we have also established our own Rules for Useof Company Vehicles in our efforts to prevent traffic accidents.

Accidents that occurred last fiscal year involved not only young
employees in their 20s, but also veteran drivers. Fortunately,
none of those accidents were serious, but there were accidents
that involved other people, so we will continue to devote efforts
to eliminating serious accidents and elevating driving skills.

● Major vehicle accident responses

47[1] Improvement of driving skills

We conduct skills classes for young employees and employees who have been involvedin accidents to elevate their driving skills. In addition, their supervisors accompany themon a drive to check their driving proficiency.

[2] Mindset reform

Employees who have been involved in accidents are asked to submit a report that
includes an analysis of the causes of the accident and improvement measures, in a bid
to raise their awareness and prevent similar accidents from happening again.

[3] Sharing of accident examples

KYT (risk prediction training) sheets based on examples of actual accidents are
distributed throughout the company to share examples and maintain a sense of tension.

AICA Group CSR Report 2020

Target Scope

About AICA

● Traffic Accidents Situation
Accidents caused by AICA Kogyo Co., Ltd. negligence and negligence by both parties

Trend in number of vehicle accidents(accidents)

60

Number of accidents by type in FY2019
Other
27%

(%)

Reversing
23%

40

23

2015

2016

26

22

25

2018

2019 (FY)0
2017

Rear-end collision
22%

Right/left turn26%

In an economic environment of intensifying market competition and rapid change, the stress felt by workers is only increasing, becoming a serious social issue.
We have put a variety of measures in place to maintain not
only the physical health of our workers, but also their mental
and emotional health.

● Major mental health initiatives

Stress checks

Held once a year since FY2016. The results are
fed back to the individuals, and the findings fromanalysis of the results on a departmental level are
fed back to the head of each department.

Establishment ofadvice hotline

We have set up a mental and physical health advice
hotline, which is run by an external organization.
This service is widely advertised to employees on
the company intranet.

Foundations of AICA

Mental health

AICA’s Vision

22
20

Regular health check-ups
In addition to the health check-ups mandated by law, we
also provide a combination of Lifestyle Disease Check-ups
and Gynecological Check-ups tailored to employees’ age,gender, and preferences. In this way, we are strengthening our

employee health management functions. Since FY2014, thecompany has covered part of the cost of influenza vaccinations,
including for family members, to step up efforts to prevent ourworkers contracting the flu.

AICA Group CSR Report 2020

48

Foundations of AICA

Additional information about the environment is available on the AICA
website.
(Only Japanese)
http://www.aica.co.jp/company/environ/plan/

Environment
About AICA

Basic Thinking on the Environment

AICA’s Vision

The AICA Group has developed an environmental management system based on ISO 14001, which we have incorporated
into our original QEO Management System ( P30) and put into
practice.
To realize a sustainable society, we are actively engaged in
the prevention of global warming (action on climate change issues) and the reduction of environmental impact (action on resources and pollution issues).

Environmental
Philosophy

We will strive to protect the environment andachieve harmony with local communities and deliverenvironmentally friendly products.

Environmental
Policy1. Creating products that are kind on both theenvironment and humans
2. Reduction of CO2 emissions
3. Reduction of industrial waste and effective use ofwater resources
4. Harmony with local communities
5. Compliance with laws and regulations

Recognitions of the risks to business

Foundations of AICA

Amid growing concerns about global climate change, extreme weather events, and natural disasters, including risingtemperatures and water shortages, we envisage that the following two phenomena could potentially have a particularly large
impact on the business performance of the AICA Group.

Environmental regulatory risk...Impact of climate change
measures and the tightening of regulations regarding the use ofchemicals and environmental protection
Large-scale disaster risk...Impact of a disaster of a scale thatexceeds that envisaged in the BCP and that goes beyond the prepared
countermeasures and annual training

Target scope: The target scope of each category is clearly stated. The breakdown of sites and locations is as follows.
● All AICA Group production sites in Japan: Aica Kogyo Co., Ltd., AICA Interior Kogyo Co., Ltd., AICA Harima Kogyo Co., Ltd., AICATECH Kenzai Co., Ltd.
● All AICA Group production sites overseas: PT. AICA Indonesia, PT. Techno Wood Indonesia, KUNSHAN AICA KOGYO Co., Ltd., Shenyang
AICA-HOPE Kogyo Co., Ltd., AICA Laminates India Pvt. Ltd., Aica Laminates Vietnam Co., Ltd.,
AICA Asia Pacific Holding Group, Evermore Chemical Industry Group

Prevention of global warming (action on climate change issues)
Reduction of greenhouse gas emissions (energy saving)● Basic Thinking
The prevention of global warming is a key issue in the protection of the global environment. Extreme weather events arealso increasing on a global scale. AICA Kogyo has sustained
damage several times in recent years from disasters caused bysuch events, and we feel keenly that climate change is a major
business risk.
Recognizing that taking more appropriate action is a matterof urgency, we are actively pursuing reductions of greenhousegases, and we have declared a target of reducing emissions
revenue intensity by 3% year on year every fiscal year until
FY2030.

As an organization to promote the deliberation and implementation of more concrete action, we launched the Climate
Change Response Project in April 2020.
This project includes not only the environmental, production,
facilities, and logistics divisions but also the development, sales,purchasing, and corporate planning divisions. They will work to
propose drastic reduction measures.
The Project will coordinate with the CSR Committee to report on its activities regularly to the Board of Directors andstrengthen the governance framework in our response to climate change issues.

Endorsement of the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)In May 2020, we declared our endorsement of the recommendations of the Task Force on
Climate-related Financial Disclosures (TCFD)*. Going forward, based on the TCFD recommendations, we will assess and analyze the risks and opportunities from climate change for the AICA
Group, reflect them in our business strategies, and pursue information disclosure.
*The Task Force on Climate-related Financial Disclosures (TCFD) was established in 2015 by the Financial Stability Board (FSB) to promote the disclosure of climate-related financial
information. In 2017, it announced its recommendations to encourage the disclosure of information regarding the financial impact of climate-related risks and opportunities, to assist
investors to make appropriate investment decisions.

49

AICA Group CSR Report 2020

Target Scope

About AICA

● Targets and Achievements
All AICA Group production sites in Japan
FY2019 Targets

FY2019 Achievements

Causes of increase/decrease

Greenhouse gas emissions revenue intensity
3% year-on-year reduction
49.7 t-CO2/100 million yen revenue or less

5.6% year-on-year decrease
48.4 t-CO2/100 million yen
revenue

Reduction in defect rates,
replacement of obsolete
equipment for energy-saving effect

FY2020 Targets
3% year-on-year decrease
46.9 t-CO2/100 million yen
revenue or less

● Major initiatives in FY2019
Location
Kiyosu, Aichi Prefecture

Jimokuji Plant

Ama, Aichi Prefecture

Tanba Plant
Isesaki Plant

Tanba, Hyogo Prefecture
Isezaki, Gunma Prefecture

AICA Harima Kogyo Co., Ltd.

Kasai, Hyogo Prefecture

AICA-TECH Kenzai Co., Ltd.

Chikusei, Ibaraki Prefecture
Ama-gun, Aichi Prefecture
Kanzaki-gun, Hyogo Prefecture

Individual plants and sites● Achievement Trends
Target Scope

Disclaimer: From the FY2019 Report, the conversion coefficient used to calculate CO2 emissions at sales locations in Japan has been changed.

All AICA Group production sites in Japan / All AICA Group production sites overseas / AICA Group sales locations in Japan: 22 sales offices

Trend in greenhouse gas emissions(t-CO₂)100,000
80,00054,174

13,99664,386

63,13255,206

57.9

60

50.0

60,67956,76418,001

84,610

53.4

51.3

48.4

40

61,22052,19020,00020

36,173
1,545

0

1,450

2015

1,331

2016

1,202

1,284

2017

2018

2019 (FY)■Production sites in Japan ■Overseas production sites ■Sales locations in Japan① Newly consolidated in FY2015 ② Newly consolidated in FY2016③ Newly consolidated in FY2018 ④ Newly consolidated in FY2019

Trend in energy input(TJ: Terajoules)

2,000

0
2015

2016

2017

2018

2019 (FY)

Production sites in Japan

Trend in energy input revenue intensity(TJ/100 million yen)

1.25
1,829
4

1,818
31

1.00

555

1,500
1,179
971

1,029

1,129

1,221

1,208

1,200

1.01

0.97
0.88

0.75

1,100

252

1.03
0.90

1,787

330

0.50

1,274

500

927

0.25

641

0

(t-CO2/100 million yen)

85,942
4
1,332

26,917
66,18649,31560,0001,000

Trend in greenhouse gas emissions revenue intensity
80

88,13740,000Foundations of AICA

Nagoya Plant

Details· Improvement of product defect rate
· Improvement of high-pressure steam feed efficiency· Improvement of temperature control of overcoat drying kiln
· Switch to LED lighting· Productivity improvements through restructuring of production equipment· Review of boiler/compressor operations· Replacement of crusher · Replacement of boiler · Replacement of compressor· Replacement of boiler and steam trap
· Efficiency improvements through shorter heating times in deodorization equipment
and more chillers in drying equipment· Replacement of autoclave · Switch to LED lighting· Reinforcement of heat insulation for steam pipes and boiler periphery· Reduction in frequency of burner ignition in low-pressure boiler· Promotion of switch to LED lighting · Improvement of productivity through reductionof defect rate · Promotion of power saving in processes

AICA’s Vision

Company/Site Name

23.9

2015

22.5

2016

22.2

2017

20.7

2018

20.7

2019 (FY)■Production sites in Japan ■Overseas production sites ■Sales locations in Japan① Newly consolidated in FY2015 ② Newly consolidated in FY2016③ Newly consolidated in FY2018 ④ Newly consolidated in FY2019

0
2015

2016

2017

2018

2019 (FY)

Production sites in Japan

AICA Group CSR Report 202050

About AICA

Use of LCA
We have introduced Life Cycle Assessment (LCA) in the development of our products.
Our mainstay products, high pressure laminate (HPL), generate less CO2 than artificial marble or PVC steel sheets, making
them a more environmentally friendly product. Our construction

materials are also highly durable and have a long life cycle. In
this respect, they would be described as environmentally friendly products.
Going forward, we will update the data used in calculations
and raise the precision of those calculations.

CO2 emissions from mining of raw materials to manufacturing stage （Kg-CO₂/m ）Life Cycle Assessment (LCA) Approach

2

AICA’s Vision

20

18.5
Mining/Refining

15
11.3

10
5

IN

9.7

Energy4.4

2.6

NaturalresourcesRawmaterials

OUT
DisposalSubstancesof Concern,e.g. CO20High pressure
laminate (HPL)
1 mm thickFoundations of AICA

Polyester
decorative
plywood
2.5 mm thickAcrylic
polyurethane
coated panel
4 mm thickZinc-plated
steel plate
1 mm thick

Artificial
marble3 mm thick

Manufacture

AICA Products Shipment/Use

Green Logistics● Basic Thinking
Reducing greenhouse gas emissions from transport is another challenge that companies must address. In the AICA
Group, the logistics officers at major shipping sites throughout
Japan are working together with the sales divisions on ongoing improvement efforts, including modal shift, improving theefficiency of truck freight, and depot organization.
We will continue to put various measures in place to reduceenergy consumption (heavy oil equivalent) per freight metricton-kilometers (t-km), which is a management index for thisarea.

● Targets and Achievements
Target Scope

Transport in Japan*

FY2019 Targets

Usage intensity: 1% year-on-year
decrease
43.67 kl/1 million t-km or less

*Logistics in which AICA Kogyo Co., Ltd. is the shipper

FY2019 Achievements

1.5% year-on-year
decrease
43.44 kl/1 million t-km
or less

Causes of increase/decrease

FY2020 Targets

Improvements to load efficiency through mixed
load services on Tohoku Area trunk routes,
establishment of new delivery sites for regularservices (Fukushima, Higashihiroshima), reductionof secondary deliveries through expansion of maindelivery areas (Osaka, wider Kanto area, Hokkaido,
Gunma, etc.)

1% year-on-year decrease
43.00 kl/1 million t-km or less

● Achievement Trends
Target Scope

Transport in Japan*

Trends in energy use intensity in transport(kl/1 million t-km)

50
48
46

45.07

44.99

44.58

44

44.12
43.44

42

40
2015
Transport in Japan*

51

AICA Group CSR Report 2020

2016

2017

2018

2019 (FY)Basic Thinking on Reduction of Environmental Impact
The AICA Group is engaged in the management of chemicals, reduction and recycling of industrial waste, and effective
use of water resources with the objective of reducing our environmental impact and using resources more effectively. We

are considering productivity improvements and product weight
reductions and pursuing changes to our product specifications
for the replacement of Substances of Concern with alternative
substances.

● Achievement Trends*A system whereby, under the Act on Confirmation, etc. of Amounts of Release ofSpecific Chemical Substances in the Environment and Promotion of Improvements
to the Management Thereof, businesses identify, collate, and make public their dataon the release into the environment of diverse hazardous chemical substances,including their sources and volumes, and on their transfer out of the business premises as waste.

*From FY2019, we have added one target substance and reassessed the results fromprevious fiscal years.

Target Scope

All AICA Group production sites in Japan

Trends in release and transfer of substances subject to PRTR (metric ton)
80

73

74

74

73

72

2015

2016

2017

2018

2019 (FY)

60
40
20

Foundations of AICA

We recognize that, as a manufacturer of chemicals, reducing
the volumes of volatile organic compounds (VOCs) and otherhazardous chemical substances that we release and transfer is
an important responsibility of the company, and we are working
on the reduction of substances subject to the PRTR Act*.

AICA’s Vision

Management of chemical substances● Basic Thinking

About AICA

Reduction of environmental impact (action on resources and pollution issues)

0■Production sites in Japan

Reduction of Industrial Waste / Recycling● Basic Thinking
We began concrete initiatives for the reduction of industrial
waste in 1998. This is an important environmental indicator forthe entire Group. Currently, we are looking into mechanisms for

reducing the volumes of industrial waste generated and the disposal of that waste, including the possibility of processing it into
valuable materials.

● Targets and Achievements
Target Scope

All AICA Group production sites in Japan

FY2019 Targets
Industrial waste emission revenue
intensity
2% year-on-year decrease
34.9 metric ton/100 million yen
or less

Landfill rate at production sites inJapan
1.0% or less

FY2019 Achievements

Causes of increase/decrease

FY2020 Targets

22% year-on-yearincrease
42.6 metric ton/100
million yen

In the aftermath of China’s restrictions on importsof plastic waste, the impact of plastics that had
previously been handled as valuable materials now
being discarded as industrial waste continues tobe felt. The deterioration of market conditions forpaper waste also had an impact.

2% year-on-year
decrease
41.7 metric ton/100
million yen or less

21.2%

Landfill rate increased due to changes in themethods of handling calcium silicate panels, which
are a waste product generated by AICA-TECH
Kenzai Co., Ltd.

1.0% or less

AICA Group CSR Report 202052

About AICA

● Major initiatives in FY2019
Name of site

Location

Details

AICA’s Vision

Nagoya Plant

Kiyosu, Aichi Prefecture· Improvement of product defect rate, reduction of waste resin from resin impregnation
process

Jimokuji Plant

Ama, Aichi Prefecture· Introduction of sludge drying system

Ibaraki Plant

Koga, Ibaraki Prefecture· Conversion of waste toluene solution to valuable material

AICA Interior Kogyo Co., Ltd.

Komaki, Aichi Prefecture· Effective use of offcuts

AICA Harima Kogyo Co., Ltd.

Kasai, Hyogo Prefecture· Reduction of offcuts, reduction of waste resin from resin impregnation process, improvementof product defect rate

AICA-TECH Kenzai Co., Ltd.

Oharu, Aichi Prefecture
Chikusei, Ibaraki Prefecture
Ichikawa, Hyogo Prefecture· Reduction of sandpaper waste products· Improvement of yield due to strengthening of maintenance of manufacturing supplies● Achievement Trends
Foundations of AICA

Target Scope

All AICA Group production sites in Japan, all AICA Group production sites overseas

Trends in industrial waste emission volumes(metric ton)

53,32250,00039,82240,00026,44720,000 17,045
10,0009,402

042,23245.0

43,163

15,220

30.0

2016

④572

③808

3,998

3,947

3,044

6,039

3,095

2017

2018

■Production sites in Japan ■Overseas production sites① Newly consolidated in FY2015 ② Newly consolidated in FY2016③ Newly consolidated in FY2018 ④ Newly consolidated in FY2019

2019

(FY)

(%)

21.2

15.0
10.0
5.2

5.0
1.4

1.0

2015

2016

1.3

0
(FY)

Production sites in Japan

53

AICA Group CSR Report 2020

2017

2018

35.0

35.7

2016

2017

2018

24.4

15.0
0
2015

Production sites in Japan

Trends in landfill disposal rates at production sites in Japan
20.0

42.6
34.8

6,611

3,903

24,602

2015

ton/100 million yen)(metric ton/100 million yen)

60.0

60,00030,000Trends in industrial waste emission revenue intensity

2019

(FY)

2019

(FY)

Trends in landfi

● Basic Thinking
taking the necessary measures and managing its water usage
with the recognition that water is a finite resource. With reference to AQUEDUCT, which is released by the World Resources
Institute (WRI), we identify high-risk areas and promote effective
use of water in those areas as a priority.
AICA Laminates India, which is located in the northwest ofIndia, recycles water for use in its manufacturing processes, andany waste water is treated and used for gardening purposes.

● Achievement Trends● Actual water consumption volumes in FY2019 in high-riskareas*1

Target Scope

All AICA Group production sites in JapanAll AICA Group production sites overseas(1,000 m³)

Location

Usage

Aica Laminates India Pvt. Ltd.

Northwest India 36,000 m3

PT. AICA Indonesia
PT. Techno Wood Indonesia

Cikampek(Indonesia)

36,600 m3

PT. AICA Indria(AAPH*2 Group)

Pasuruan(Indonesia)

4,900 m3

SHENYANG AICA-HOPE KOGYO
Co., Ltd.

Northeast China

7,400 m3

3,000
2,514
2,241
2,000

2,382

2,291

850
1,602

1,000 1,174

998

802

745

325

1,664
0

2016

1,363

812

428
2015

1,381
4 18

1,137

Foundations of AICA

Trends in water consumption

Name of site

AICA’s Vision

Our production sites in Japan use industrial water and underground water, and we are pursuing the cyclic usage of water at
our Nagoya and Jimokuji Plants. The Isezaki Plant, which has
the highest water usage, is located near the rich Tone River system. It uses water resources in abundance, but will now strive
to reduce the amount of water it consumes.
Some of our overseas production sites are located in countries with grave water situations. Each of our business sites is

About AICA

Reduction of water consumption

2017

2018

■Production sites in Japan ■Overseas production sites① Newly consolidated in FY2015 ② Newly consolidated in FY2016③ Newly consolidated in FY2018 ④ Newly consolidated in FY2019

2019 (FY)*1 Sites assessed as at “extremely high” risk in WRI Aqueduct’s Overall Water Risk.
*2 AICA Asia Pacific Holding Pte. Ltd.

Environmental Risk Management
State of compliance with environmental laws
In FY2019, no Japanese site in the AICA Group was subject to correction directives from the competent authorities or to environment-related litigation.

Complaints from neighbors and responses
In FY2019, there were no complaints from neighbors at any of the AICA Group’s Japanese sites.

Environmental accidents
In FY2019, there were no environmental accidents that would
have an impact outside the site of AICA Group sites in Japan,
but there was a leakage emergency. We share information androll out responses horizontally across the Group to ensure thatno inconvenience is caused to our neighbors or to the government agencies with jurisdiction.

Name of site Date of incident

Details of incident

Jimokuji Plant(Premises for reloading by logistics
subcontractors)(August 2019)

A product container tipped over while being moved by forklift,
resulting in just under half a metric ton of adhesive resin spillingout into the gutter next to the yard. Oil fences and sandbags
were used to prevent the spill from spreading and some of theresin was recovered.

Response· Thorough instruction and education on safe
operation of forklifts.
· Repairs of concrete surface of yard.
· Repair of gutter lid on footpath.

AICA Group CSR Report 2020

54

Foundations of AICA

Additional information about engagement withstakeholders is available on the AICA website.

Engagement with
Stakeholders(Only Japanese)
http://www.aica.co.jp/company/environ/principle/

About AICA

Basic Thinking on Engagement with Stakeholders
As a company that is widely trusted by society, we have instilled in our corporate policy our belief in the importance offair and highly transparent compliance-based management inaccordance with the law and social order and in engagementwith stakeholders. Based on this corporate policy, we have abasic policy of disclosing information about the company to all
stakeholders in a fair and timely manner.

AICA’s Vision

Involvement with Customers
Voluntary Action Guidelines Concerning Product Safety
We believe that the most important challenge in quality management is to deliver safe and reliable products to our customers. To put this into practice, we have established voluntaryaction guidelines regarding product safety and strive to ensure
product safety and information disclosure.

Foundations of AICA

● Product Safety Voluntary Action Guidelines - Basic Principles[1] Compliance with laws
and regulations

We will keep the entire company thoroughly informed about the Consumer Product Safety Act and other laws concerning
product safety, other related legislation, and the latest information about product safety, and comply with the legislation.
We will develop and implement voluntary action plans regarding product safety that include the following, pursue continued
improvements, and establish a corporate culture that focuses on the customer and ensures the safety of products.

[2] Initiatives for ensuring
product safety

To ensure product safety, we will conduct proper quality control and educate all employees for thorough awareness of andcompliance with legislation.
Using feedback from our customers and market information, we will identify the risks accompanying our products, their construction, and their use (including misuse). We will reflect those risks in our design and development, handling instructions,warning labels, and construction manuals, and strive for the continued improvement of product safety.
In the event of accidents involving our products, we will actively gather information about such accidents from the customers
and provide appropriate responses and information to the customers.

[3] Response to productrelated incidents

In the event of a serious product accident involving our products, a report will be made to top management, and prompt
action will be taken to keep the damage from spreading. In accordance with the legislation, we will also promptly report to thecompetent authorities and relevant organizations.
Regarding product accidents, where deemed necessary, we will undertake an immediate recall of the products and advise
customers promptly using the most appropriate method.

AICA Inquiry Center
We have established the AICA Inquiry Center as a direct pointof contact with customers who have adopted our products. So
we can be of even more assistance, we carry out a variety ofmeasures with the aim of improving call quality and enhancing
our proposal-making capabilities.
With the introduction of a Call Center System in April 2018,
the efficiency of the Inquiry Center staff’s responses has improved, and we have made major improvements to call response rates. It has become easier to put customers throughto the most appropriate staff to handle inquiries about specificproducts, which has also helped to improve call quality.
In FY2018, we also began telemarketing. We follow up on
inquiries at a later date and, if the customer requests it, makesales visits and provide other services to meet the customers’
wishes.
In addition to daily training with the aim of even higher callquality, we will strive to provide services that will offer evengreater satisfaction.

55

AICA Group CSR Report 2020

Trends in number of inquiries made to Inquiry Center/response rate
(accidents)

80,00060,00077,35579,032

77,99390

92

91

66,08550,800

74

(%)

100
75

40,00050

20,000

25

0
2015

2016

Number of inquiries
Response rate**Data collected from FY2016

2017

2018

2019
(FY)

AICA Distributors’ Organization National Convention

AICA’s Vision

Distributors and construction businesses are stakeholders in our value chain. To build a stronger network with thesestakeholders, on the sales front, we have established the AICA
Distributors’ Organization as a network of distributors with awealth of expert knowledge. Through this organization, we
share sales and product strategies and strive for healthy communication between distributors. On the construction front, wehave established construction groups of various types, throughwhich we share information about improving construction quality and about product improvement and development.

About AICA

Value chain collaboration

Company policy briefing

Customer Satisfaction Survey
relevant departments after the senior executives have checked
them, and put responses into place.
In the FY2019 survey, the evaluation was high overall, andevaluation of sales activities also improved. Going forward, we
will continue to conduct sales education and place efforts into
the further improvement of satisfaction.

Foundations of AICA

With the objective of asking our customers to evaluate
our products and services, we have conducted a Customer
Satisfaction Survey every year since FY2002.
To put the opinions received from our customers to good use
in product development and improvement of services, we identify issues from the survey findings, communicate them to the

AI chatbot introduced on website
In December 2019, we introduced an AI-equipped chatbot*1,
AI Assistant AICA, to the AICA website. This has improved theconvenience of the website, enabling users to access the information they need in a smarter way from our vast product catalogue.
With the introduction of this system, the AI chatbot can handle simple inquiries, which has cut down on the number ofinquiries made to our Inquiry Center. This has given Inquiry
Center staff more time to improve the quality of their handling of
the inquiries they do receive.
*1A combination of the word “chat” (talk) and “bot” (robot). Automatic
chat program that uses artificial intelligence. The system gives automated responses to text entered by the user to replace the work ofhandling inquiries, etc.

AICA SEMINAR IN CONTEMPORARY ARCHITECTURE
Through the supply of trusted products, we have strived to contribute in some small way to theelevation and development of architectural culture.
One initiative we are pursuing to make a further contribution is by hosting the AICA SEMINAR IN
CONTEMPORARY ARCHITECTURE. Since 1983, we have invited prominent architects from Japanand overseas to give lectures in various parts of the country in a wide range of areas such as
housing, the environment, and urban issues. People from many walks of life, including architects,
students, and members of the general public, attend these free seminars.
For the 65th AICA SEMINAR IN CONTEMPORARY ARCHITECTURE, held in September 2019, we
invited Chinese architect, Ma Yansong, as guest lecturer to talk about his recent works.

AICA Group CSR Report 202056

About AICA

Involvement with Supply Chain
Basic Thinking on Involvement with Supply Chain

AICA’s Vision

To fulfill the AICA Group’s corporate social responsibility(CSR), we believe that it is essential that we obtain the understanding and cooperation of our stakeholders. In our procurement activities, in addition to taking responsibility as the AICA
Group, we also pursue CSR activities with the cooperation of
our suppliers.

Based on this belief, in June 2017, we undertook a major
overhaul of our earlier procurement policies and established the
AICA Group CSR Procurement Guidelines. We have obtained
the consent of our suppliers in Japan and overseas to these
Guidelines, for the further mutual improvement of our CSR activities.

Communicating with SuppliersFoundations of AICA

We held a Purchasing Policy Briefing in June 2019 as a forum for communication with our suppliers, at which we shared our company policies and purchasing
policies.
Further, with the objective of sharing our CSR procurement philosophy and investigating the actual situation, we have conducted self-evaluation questionnaire
surveys since FY2018. For the targets of this survey, we selected suppliers thatcover approximately 70% of the total value of AICA Kogyo’s (parent company only)
materials procurement, with a particular focus on our main suppliers.
Based on the results of this survey, where necessary, AICA Kogyo employees
then conduct an audit (on-site inspection). If any outstanding initiatives are confirmed, we will ask that company to teach us their methods, and if we encountermatters that require correction, we will provide guidance and instruction to thosecompanies. By continuing with this two-way dialogue, we aim for the mutual improvement of our standards.

Business Continuity Plan (BCP) measures in procurement activities
To ensure stable supplies even after a disaster or accident,
we purchase our main raw materials from multiple suppliers andsites, and ensure that we have alternative options for purchasing.
Regarding our own products, we have built production structures at multiple sites and have taken measures to ensure that
we maintain a certain level of inventory.

These initiatives have proved successful and the impact of
the COVID-19 pandemic did not extend to our procurement of
raw materials. We will continue to consider measures to ensurethat we can fulfill our supply responsibilities even in the eventof a disaster or accident, and implement various measures as
required.

Provision of Product Safety Information
Amid ever-increasing concerns about chemicals, including
the enforcement of the Revised Buildings Standards Act, therevision of the standards for school environmental hygiene, andrestrictions on chemical substances overseas, our businessoverall is widely involved in these issues.
In FY2019, we provided safety information in response to1,990 requests from customers. These kinds of requests are
increasing in number every year.
The most frequent queries were about investigations of domestic chemical substance restrictions, investigations of the
inclusion of chemicals that are restricted overseas, and the
documentation related to export trade control orders. These
trends reflect the expansion of global business. To fulfill our responsibilities as a member of the supply chain, such as inquiries about new legislation in various countries, and requests forinvestigation and provision of information about new chemicals,

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AICA Group CSR Report 2020

the relevant departments work together to provide prompt andmore accurate responses.
Trend in numbers of cases of provision of product safety information (accidents)
2,000
1,500

1,250

1,316

1,885

1,990

2018

2019 (FY)

1,376

1,000
500
0
2015

2016

2017

About AICA

Involvement with Shareholders
Ensuring appropriate information disclosure and transparency
with our Disclosure Policy.
Even for information that is not subject to the Companies Act
and the timely disclosure rules, if we believe the information to
be important for shareholders and investors to make investment
decisions, we will disclose that information, giving consideration
to fairness and timeliness.

● Information Disclosure Documents
・Summary of Accounts

・Report (Shareholder Communication)

・Securities Report / Quarterly Report

・Corporate Governance Report・Shareholders Meeting Convocation Notice・Explanation of Financial Results

AICA’s Vision

As a company that is widely trusted by society, we have abasic policy of disclosing information about the company to all
stakeholders at the right time and in the most fair and appropriate manner. We comply with the Companies Act, the Financial
Instruments and Exchange Act, and the rules for timely disclosure prescribed by the stock exchanges on which our sharesare listed, and conduct information disclosure in accordance

AICA Website
http://www.aica.co.jp/company/ir/

We take proactive steps, within a reasonable extent, to achieve constructive dialogue with
our shareholders. Any opinions and information obtained through such dialogue is reported to
the Board of Directors and we strive to reflect it in future management and IR activities.
To obtain their understanding and appropriate evaluation, in addition to the General Meetingof Shareholders and the reception after that meeting, we hold Financial Results Briefings foranalysts and institutional investors twice a year, at which our Representative Directors provide
explanations. The Public Relations and IR Group responds to requests for individual interviews
and telephone press inquiries. Any information to be disclosed in such cases is approved by aRepresentative Director and the Director responsible for the matter at hand.

Number of individual dialogues withinstitutional investors in FY2019

162 accidents

Foundations of AICA

Communication with shareholders and investors

Shareholder returns
To realize the return of profits to our shareholders and the sustainable growth of the company, we issue dividends that consider
the consolidated performance of each period, payout ratios, andinternal reserves. Under our current Mid-Term Business Plan,
C&C 2000, we are issuing shareholder returns that are linked toperformance, with a target consolidated payout ratio of 50%. In
FY2020, we view the forecasts for diminished profits as being
the result of the extraordinary circumstances of the temporary
downturn in domestic and overseas economic activity due to the
COVID-19 pandemic, and we intend to issue dividends at thesame level as the previous fiscal year.
Our basic policy is to issue dividends twice a year, consistingof an interim dividend halfway through the fiscal year and a final
dividend at the end of the fiscal year.
Regarding the use of internal reserve funds, priority is given tocapital investments for the expansion of existing core businesses
and to investments to increase future corporate value, including

M&As. These investments are made in consideration of investment efficiency from long-term perspectives.
Dividend and payout ratio
(yen)
200

76.9%

160
120
80

50.2%

50.1%

92

85

50.5%
103

60.0

54.4%

106

(%)
80.0

106

40.0

20.0

40
0
2016

2017

Dividend (left axis)

2018

2019

2020 (projected)(FY)

Payout ratio (right axis)

External Evalution
In 2019, we were added for the first time to the FTSE4 Good Index Series and FTSE
Blossom Japan Index, leading SRI indices developed by FTSE Russell. The decision has been
made to include us in these indices in 2020 as well.
We have been part of the JPX Nikkei Index 400, a stock index developed by the Japan
Exchange Group, Inc., Tokyo Stock Exchange Group and Nikkei Inc., for eight consecutive
terms.
AICA Group CSR Report 202058

About AICA

Involvement with Local Community
As a company with global operations, the AICA Group values
its connections with local regions and communities not only inJapan but from a global perspective.
We continue to conduct activities based on a philosophy ofmutual harmony, such as participating in volunteer activities
in collaboration with local community action groups, including
clean-ups in the areas surrounding our production and sales
sites.

AICA’s Vision

Aica Laminates Vietnam Co., Ltd.
Cooperated with Vietnam training trip by Aichi Prefectural Nakamura Senior High School.

Foundations of AICA

Nakamura Senior High School places efforts into learning guidance, club activities, and international understanding education. In FY2019, the school establisheda new International Understanding Course. As part of the curriculum of this course,
a training trip to Vietnam was conducted with the objective of deepening understanding about Vietnam’s culture, history, economy, and language, through experiential and explorative learning, in addition to acquiring general knowledge about
international understanding.
The students on the trip visited companies from Aichi Prefecture that have set
up operations in Vietnam to deepen their understanding of how people and goods
are linked across national borders in a global society. Thirty students and their twoteachers visited Aica Laminates Vietnam Co., Ltd. on July 24.
Comments received from the visiting students about their visit to the company
included: “My dream is to set up my own company in the future, and hearing about
things like business plans and establishment plans gave me a more concrete image.” “This was the first time I had heard about a company’s overseas strategy. It
made me realize that they are the result of accumulated efforts in areas such as
careful customer service and employee recruitment in the course of setting up thecompany.” “I realized that there is still a great deal of potential for development inoverseas business.”

EVERMORE CHEMICAL INDUSTRY CO., LTD.
Forest plantation clean-up activity
Since 2010, EVERMORE CHEMICAL INDUSTRY CO., LTD. has owned one
hectare of forest plantation in the ninth forest zone of National Taiwan University’s
experimental forest. Every year, the company visits the plantation for a clean-up
activity, positioning it as a “Family Day” that gives employees and their families the
chance to interact with each other, as well as check out the planted trees.
Through this activity, the company shares with employees the importance ofenvironmental conservation activities and consideration of health, with the aim of
becoming a “Green Company.”

Sponsorship and exhibition in Youngsters’ Science Festival 2019
We sponsor and exhibit at the Youngsters’ Science Festival, which is held annually at the Nagoya City Science Museum andElectricity Museum. At this event, at which everyone from children to adults can engage with science in fun and casual ways, we cooperated by providing a space for hands-on experiences of adhesives.

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AICA Group CSR Report 2020

Third-Party Opinion

integrated thinking in response to thetransformation of capitalism● Transition to a Company with Audit and Supervisory
Committee in June 2020
● Establishment of an Overseas Planning Department
and Overseas Governance Committee, with the aimof reinforcing governance of the Overseas Group
companies
These measures have formed the foundations for improving the transparency of your governance functions
and business management, which I expect will prove
effective going forward. Also, in the course of strengthening your overseas business with a focus on Asia, yourgovernance will need to function in an integrated manneras the AICA Group.
In terms of strengthening your frameworks for thepromotion of CSR, the CSR Committee, which plays theleading role in your CSR activities, will now report to theBoard of Directors instead of the Management Meeting,which will give the Board a stronger monitoring function. I
believe that your reputation among stakeholders in Japanand overseas will be enhanced by the Board of Directors
taking responsibility for the supervision of CSR activities.
Regarding environmental issues, you clarified yourapproach for the AICA Group as a whole by launching
the Climate Change Response Project in April 2020 andendorsing The Task Force on Climate-Related Financial
Disclosures (TCFD) in May. As the world moves toward
becoming a carbon-free society, for you to become acompany that society will choose, I hope you will further
raise your targets for greenhouse gas reductions, declare a policy for net-zero emissions by 2050, establish
an action plan based on that policy, and implement it toachieve those targets.

There are several points I would like to request for the
future.
① Building long-term strategy
You have formulated your AICA 10-Year Vision, whichsets out your financial targets and ideal vision for the next
10 years, based on group collaboration & enhancementof business foundations, human resources development, and responsibility to stakeholders, linking it to theMedium-Term Business Plan. I hope that you will develop
this vision into an even longer-term, 30-year vision, draw
up scenarios for the future of a carbon-free and recycling-oriented society, and develop long-term strategies.
② S trengthening response to business and humanrightsYour response to labor-related and human rights risks
seems to have fallen behind compared with your response to environmental issues. Looking at the financial
and non-financial highlights (P3, P4), the labor-related
data (number of industrial accidents, industrial accident
frequency rate/severity rate) are only for production sites
in Japan. In addition, I have not been able to confirm thesupervision and management frameworks for labor-related and human rights risks. With overseas sales accounting for more than 40% of your sales and given yourstrategy of strengthening your overseas business evenfurther with a focus on Asia, I believe that you will need
to identify and assess labor-related and human rights
risks, prevent and mitigate adverse impact, and conduct
monitoring and disclosure of information throughout theGroup, including your supply chains.

Fundamentals of AICA

This fiscal year, you have focused on strengthening
corporate governance in the following ways:

Etsuya Hirose
AICA’s Vision

At the global level, there is renewed emphasis on
stakeholder capitalism based on corporate objectives.
This concept, which was proposed last year by theBusiness Roundtable, a group of executives of major
U.S. companies, refers to the recognition that companies have come to identify the resolution of social issues,
such as contributions to local communities and dealing
with environmental issues, as a corporate objective. The
World Economic Forum has revised its own guidelines,
the Davos Manifesto, to give renewed emphasis to stakeholder capitalism. Amongst this trend, at AICA, you haveplaced "symbiosis" at the core of your corporate philosophy, focusing on dialogue with all stakeholders and promoting sustainable management that balances economic
growth and social responsibility, centered on a "virtuous
circle model." In this regard, you could be described as afront-runner in CSR.

QUICK Corp.
Managing Executive Officer
Head of ESG Research Center

About AICA

Hopes for disclosure in line with

③ Promotion of Diversity
You have designated "human resources" as one of theGroup’s materialities and are making efforts to promotewomen’s active participation and to improve the percentage of female employees, so I believe that the percentage
of female managers will also increase in the future. Goingforward, I hope you will promote diversity, including promotion of non-Japanese employees, as a company doing
business on a global scale. In this fiscal year, you appointed one female external director. In the future, I hope
you will reorganize the skill matrix of Directors and further
promote diversity on the Board.
Finally, I recommend that you undertake a review ofyour materialities on an annual basis. As new ESGs issues arise and the seriousness of each issue changes
year by year, it is important to keep working to meet thedemands of your global stakeholders. I also look forward
to an explanation of your management frameworks interms of how your materialities are being integrated into
your business models and risk management.

AICA Group CSR Report 2020

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Giving Back to the Earth through Technology

Head Office: 26F JP Tower Nagoya, 1-1-1 Meieki, Nakamura-ku, Nagoya, Aichi, 450-6326, Japan Tel: (052) 533-3136
URL/http://www.aica.co.jp/

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Published September 2020