AICA GroupCSR Report 2019

Corporate principle

Challenge and Creation
Corporate philosophy

Through a philosophy of symbiosis, theAICA Group will create new value andcontribute to society through endlessinnovation.

INDEX
About AICA
03 Financial and Non-Financial
Highlights

05 Social Background and theProducts it has Generated
Transition of Value Creation

07 AICA Group’s Profit

Structure/BusinessDomains/Major Sites

09 Virtuous Circle Model andCore Competences

AICA’s Vision
11 Message from the President

25 AICA’s CSR Activities

15 Progress in Aica’s 10 years

27 AICA Group’s Materialities

vision and Medium-TermBusiness Plan

17 Three growth drivers for thecreation of new value

21 Business Overview:
Chemical Products
Business

23 Business Overview:Construction Materials
Business

1

AICA Group CSR Report 2019

Fundamentals of AICA

29 Business infrastructure
37 Human Resources
43 Environment
49 Engagement with
Stakeholders

54 Third-Party Opinion

Corporate policy

1 . Chemistry and design

5 . Human resources and organizations

We create unique products through the power of

Human resources are the most valuable resource to thechemistry and design, and contribute to the realization of acompany. We build vibrant human resources as well as

prosperous society.

organizations through mutual understanding and growth.

2 . Group synergy

6 . Compliance management

We create group synergy with the continuous collaboration

We promote fairness and transparency by complying with theof the technologies / materials.

laws and the regulations and the social order.

3 . No.1

7 . Commitment to safety and security

We expand the top-share products we have in our businessWe emphasize on engagement with stakeholders, and pursue

fields and regions.

“environmentally-friendly business activities” and “securing
quality that can be trusted”.

4 . Global
We enhance our production/sales bases and humanresources overseas, and aim for sustainable growth in the
global market.

Company Overview (as of March 31, 2019)

Editorial Policy

AICA’s CSR Communication

Company NameAICA Kogyo Co., Ltd.

Headquarters
Location

26F JP Tower Nagoya, 1-1-1 Meieki,
Nakamura-ku, Nagoya, Aichi, 4506326, Japan

AICA Group CSR Report(Booklet/PDF)(Japanese/English/Chinese)

Date Established

October 20, 1936

This report has been prepared with theintention of communicating the AICA
Group’s CSR-related activities to ourstakeholders (customers, shareholders,
suppliers, local communities, andemployees) in easily understood ways,
using graphs, photographs, and the like.

Representative

Yuji Ono, Representative Director andPresident

Capital9,891.7 million yen

Employees

Consolidated: 3,920
Non-consolidated: 1,194

AffiliatedCompanies

6 in Japan, 37 overseas

Reference Guidelines● Sustainable Development Goals (SDGs)● ISO 26000● Environmental Reporting Guidelines(2018 Edition), Ministry of Environment● GRI Standards

AICA GroupCSR Report 2019

Annual report of the CSR
activities of the AICA
Group.

AICA Website (CSR Activities)
Besides the content of
the booklet, the website
contains supplementary
information. A PDF versionof this report has also been
published on the website.
http://www.aica.co.jp/company/environ/

Target Period/Scope
This report is a summary of the activitiesof the AICA Kogyo Co., Ltd. and the AICA
Group in FY2018 (April 1, 2018 - March
31, 2019). It also includes information
about some activities from FY2019. The
target scopes can be found in the content
of the report.

Contact for inquiries about this report● Corporate Planning Department

Tel: 052-533-3136● Safety and Environment Department

Tel: 052-433-5941

AICA Group CSR Report 20192

Financial and Non-Financial Highlights

Net sales / Operating profit / Ordinary profit

Profit attributable to owners of parent / ROE / ROA(x100 million yen)(x100 million yen)

2,000

1,500

1,000

1,913

1,438

151

158

1,500

161

163

(x100 million yen)

(%)

200

12.0
10.4%

1,637

1,516
180

300

190

183

196

208

212

10.1%

10.7%

7.0%

6.8%

7.0%

110

119

133

9.4%

9.9%

6.6%

9.0

150
200

7.3%
100
101

99

6.0

100
500

3.0

50

0

0
2014

2015

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

2016

2017

0

2018 (FY)02014

Operating profit (right axis)

About AICA(%)

(x100 million yen)

1,200

50.0

2,000

800

40.0
33.4%

30.8%

478

498

AICA’s Vision

400

803

1,000

546

466

10.0

0

0
2015

2016

Overseas sales revenue (left axis)

2017

Foundations Supporting AICA

1,500

1,000

1,654.14

1,759.91

1,936.87

203.95155.99152.62

169.48

1,125

1,072

66.2%
1,361

183.76

20.0

0
2015

2016

2017

2018 (FY)

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

(yen)

(yen)

(%)

250

150

60.0
50.2%

200
150

500

50

43

46

2014

2015

103

92

85

30.1%

50.5%

50.1%

100
27.6%

40.0

20.0

50

0

0
2014

2015

2016

2017

0

2018 (FY)Net assets per share (left axis)
Net income* per share (right axis)* Profit attributable to owners of parent

0
Dividend (left axis)

2016

2017

2018 (FY)Payout ratio (right axis)

Capital investments / Depreciation / R&D expenditure

Cash flow from operating activities(x100 million yen)(x100 million yen)

200

100

183
164

78.9

80

146
130

132
60

100
40
50

20

29.6 31.0
23.5

29.3

34.9
25.9

38.7

45.2
34.5
26.7

35.6
28.5

41.7
32.0

0

0
2014

2015

2016

2017

2018 (FY)2014
Capital spending

3

60.0

40.0

2014

100

150

1,196

64.7%
1,326

Dividend / Payout ratio(yen)

1,581.17

1,470

02018 (FY)Net assets per share / Net income* per share
1,880.13

69.8%
1,646

500

Ratio of overseas sales (right axis)

2,000

70.4%
1,534

80.0

1,910

1,896

20.0

200

2014

1,500

30.0

600

2018 (FY)

(%)

70.2%

42.0%
33.2%

2017

Total assets / Net assets / Equity rate

(x100 million yen)

33.3%

2016

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

Overseas sales / Overseas sales ratio

1,000

2015

AICA Group CSR Report 2019

2015

2016
Depreciation

2017
R&D expenses

2018 (FY)Greenhouse gas emissions

Energy input(TJ: Terajoules)(t-CO2)2,000

100,000
88,137

1,829
1,500

80,000

❸ 555

1,000

971 1,029

913

1,179 1,129

1,221 1,208

66,18660,0001,200

40,00054,17449,31544,60518,001 ❶36,16920,00036,173

252 ❷

330 ❶

661

927

500

63,132❸ 26,917

61,22052,190

0
2014

2015

2016

Production sites in Japan20172018 (FY)2014

Overseas production sites

2015

2016

Production sites in Japan2018 (FY)① Newly consolidated in FY2015 ② Newly consolidated in FY2016③ Newly consolidated in FY2018*From the FY2018 Report, we have conducted a review of past coefficients. For details, see the “Notes” on P. 43.

Water usage

Industrial waste emission volumes(1,000 m³)(metric ton)

3,000

45,000
2,291

2,241
850 ❷

2,000

15,220 ❷30,00026,447

1,602

705

1,174 ❶

1,137

998

802

745

17,045 ❶15,000

❸ 325

1,664

431

812

2,779

428

0
2014

0
2015

2016

Production sites in Japan20172018 (FY)2014

Overseas production sites

2.50

14

1.73

3
❶ 2
1

2015

1.00

6

10

0.50

2

0
2016

2017

2018 (FY)

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(days)

61.7%

12

56.0%
45.0%
40.6%
7.5

8.2

0.84

0.82

0.00
0.00

0.00

0.05

0.05

0.00
0.00

2014

2015

2016

2017

2018 (FY)

Industrial accident frequency rate
Industrial accident severity rate
Industrial accident frequency rate National manufacturing industry average
Target scope: All AICA Group production sites in Japan

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

7.8

2018 (FY)

1.50
7

41.4%

2017

Overseas production sites

2.00

7

2014

2016

4 ❷

5

0

3,095

2015

* 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 x 1,000 ÷ Total work hours
Both sets of figures are for permanent employees

3.00

18

17

8

3,903 ③808

Foundations Supporting AICA

20

5 ❶

3,998

3,947

Industrial accident frequency rate/Severity rate

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

10

3,044

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

Number of industrial accidents

13

9,402

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

15

24,602

9,329

AICA’s Vision

1,000

43,16342,23239,822

2,514

0

2017

Overseas production sites

About AICA

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

6

56,764

1,274

641

0

9

64,38613,996 ❷ 55,206

Headcount (Japan / Overseas)(%)(people)

60.0

4,000

11.3
10.3

3,000

3,920

2,291

2,317

1,529

1,559

1,603

2016

2017

2018 (FY)

3,349

1,818

1,820

1,510

2015

3,035

40.0
2,000

3,850
3,328

1,759

20.0
3

1,000
1,276

0

0
2014
2015
2016
2017
2018 (FY)
Average number of days paid leave taken (left axis)
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 personnel: Employees of AICA Kogyo Co., Ltd., excluding people on temporary assignment,child-care leave, and leave-of-absence, and part-time and casual workers

02014Group companies in Japan

Overseas Group companies

AICA Group CSR Report 20194

Social Background and the Products it has Generated
Transition of Value Creation
Social Background and Products Created by the AICA Group▶1936▶1960s - 1970s▶Late 1980s

Development of Japan’s first synthetic
resin adhesive

Contribution to development of odorlessplywood

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 of this adhesive, which
has low formaldehyde detection, and odorlessplywoods were born.

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

About AICA

We were awarded anhonor from the Sultan of
the Malaysian state of
Kedah.

Trends in AICA Group’s portfolio and business performance
Net sales (billion yen)

AICA’s Vision

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 of synergies, has been passed
down from the past to the present.

200
180
160
140
120
100

Foundations Supporting AICA

80
60
40

High pressure laminate (HPL) plantcompleted in 1959

20

Established
1936

1973 1st oil crisis
1965 - Izanagi economic boom
1964 Tokyo Olympics

1945 End of World War II 1949 Dodge Line announced

FY1940

FY1950FY1960

FY1970* Due to the change in the end of the financial year. The accounting period ending March 1989

Established as a manufacturerof adhesives

Transition of businessto peace-time industry

Establishment of business foundations

Shift toward general building
materials manufacturer

1936 - 1945

1946 - 1954

1955 - 1966

1967 - 1976

In October 1936, the chemicals
division of Aichi Tokei Denki was spun
off to create Aichi Kagaku Kogyo. In
the war years, the company aimed tomass produce chemical products.

Moved from munitions demand
to civilian demand for post-war
construction. Entered the paper
manufacturing and ceramics
business.

Took on the AICA brand nameand changed company name to
AICA Kogyo Co., Ltd. Expanded
operations with new products andtechnologies.

Launched Japan’s first ureabased resin adhesive, “AICHIMUTEKI-NORI” (1939)

Launched melamine resinbaked paint (1951)

Business foundations are firmly
established against a background ofa strong economy. Entered the highpressure laminate (HPL) business andgrew rapidly into a general adhesives
manufacturer.

Jacks/Other

Spark plugs

Chemicalproducts

18%

Paper
manufacture

Dec. 1946*
NO DATA(non-consolidated)

46%

26%

Launched “AICA POSTFORM”(1968)
Launched wall coating material“JOLYPATE” (1975)

Spark plugs

Jacks/Other

14%

Launched “AICA” high pressure
laminate (HPL) (1960)
Withdrew from ceramics and spark
plug businesses (1956, 1958)

13%
FY195431%

0.39

FY196646%(billion yen)(non-consolidated)

Chemicalproducts

Laminated
sheets32%

3.29(billion yen)(non-consolidated)

Chemicalproducts

Building andhousing materials

34%

FY197617.5(billion yen)(non-consolidated)

8%
Ceramics

23%* No data exists due to the turmoil after
the War ended, so figures are only for the
single month of December 1946.

5

AICA Group CSR Report 2019

Chemicalproducts

22%

Ceramics

22%

28%
Pape
manufacture

Laminated sheets38%▶1990s - 2000s▶2010▶2017 -

Addressed sick house syndrome

Addressed protection of forest
resources

Developed and expanded sales ofAS products

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 of2003 and the Ministry of Health, Labor and Welfare guidelinesof 2002, we launched AICA Eco-Eco Bond, a healthy-housing
adhesive that contained no restricted substances such asformaldehyde, toluene, and xylene.

We were the first Japanese manufacturerof 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 andfor some of our decorative board products.

We positioned product ranges that
contribute to the solution of social issues
as AS (Aica Solution) products andconcentrated our efforts into developing andexpanding sales of those product ranges.
The objectives of those products are manyand diverse, including alleviating labor
shortages, reducing waste, and building
safe cities.

High pressure
laminates(HPL)

About AICA

AICA Eco-Eco Bond when it was
first released

Marless
Board

Polyester
decorative
panelsOperating profit (x100 million yen)
Number of new housing starts (x10,000 units)
Area of non-residential building starts (million m2)

180

Number of new housing starts (right axis)

160

AICA’s Vision200

Increase in net sales due to addition of new consolidated subsidiaries

140
120

Net Sales(left axis)

100
80
60

1985 Plaza Accord
1979 2nd oil crisis

40

Operating profit (right axis)*

1991 Collapse of Japan’s economic bubble
1989 Nikkei average reaches record high
FY1980

FY19902008 Global Financial Crisis

2007 Revision of Building Standards Law, promptedby earthquake resistance data falsification scandal

FY2000FY201020

FY2020 (Plan)covers only the four-month period of December 1988 to March 1989. *Consolidated accounting began from the year ended November 1979. All accounting years prior to that are non-consolidated.
Achieved growth with doors

Incorporates non-residential market

Achieved growth with CERARL

Used M&As to build a strong portfolio

1977 - 1986

1987 - 1994

1995 - 20092010 -In addition to a new business plan,declared the current Corporate
principle, “Challenge and Creation,” asour slogan and worked to strengthen
the management structure.

Achieved listing on Section 1 of theTokyo and Nagoya Stock Exchanges.
Pursued business diversification, suchas moving into multilayer printed circuitboard business.

Rolled out QEO Management
System as a “trinity activity.” Pursued
environment-oriented management bystrengthening Group collaboration.

Actively expanded overseas andstrengthened approaches to new
businesses. In addition to environmentoriented management, concentrated
efforts on CSR activities.

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

Building andhousing materials

48%

26%

Captured top share of Japanese
HPL market
Launched melamine noncombustible
decorative panel “CERARL” (1989)
Electronics/
Other

18%

26%

Chemicalproducts“CERARL” becomes huge hit as
kitchen panel (1996 -)Inaugural edition of“Environmental Report” (1999)

Electronics/
Other

17%

24%

FY1986

FY1992

FY1996(billion yen)(non-consolidated)(billion yen)(Consolidated)(billion yen)(Consolidated)

66.6

35.2

26%
Laminated
sheets23%
Building and housingmaterials

Chemicalproducts

Laminated
sheetsAcquired shares in subsidiary of
Dynea’s Asia-Pacific division (2012)
Acquired shares in Evermore
Chemical Industries (2018)
Chemicalproducts

Construction
materials

FY201964.6

33%Foundations Supporting AICA

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

43%
31%

191.3

(billion yen)(Consolidated)

57%

28%
Building and housingmaterials

Laminated
sheets

AICA Group CSR Report 20196

AICA Group’s Profit Structure/
Business Domains/Major Sites
Business Composition

Operating profit 20.8 billion yen

Net Sales 191.3 billion yen
Construction
Materials Business

Chemical Products
Business

Construction
Materials Business(43.0%)(57.0%)(68.5%)

82.3 billion yen

109 billion yen

About AICA

Breakdown of net
sales by business

Chemical
Products Business16.1 billion yen(FY2018)74(x 100 million yen)

Breakdown of (31.5%)
operating profit
by business(FY2018)

AICA’s Vision*Operating profit includes unallocated operating expenses (2.7 billion yen),so is not equal to the total of the operating profit figures of the individual
businesses.
The composition figures do not include unallocated operating expenses.

Major Sites

Major sites in Japan

Major sites overseas

Foundations Supporting AICA

Other

Japan

0.8%

58.0%
Breakdown of
net sales by region
Pakistan(FY2018)
Asia/Oceania

India

41.2%
AICA Asia Pacific HoldingsGroup companies
Holding company(AICA Asia Pacific Holding Pte. Ltd.)Japan

Head Office
Head Office and Production Site
Production sites

AICA Kogyo Co., Ltd.
Head Office
Production sites
Sales locations

Group companies
Head Office
Head Office and Production Site
Production sites

Evermore Chemical Industry
Group companies
Head Office
Head Office and Production Site

Other Group companies
Holding company(Aica Asia Laminates Holding Co., Ltd.)
Head Office
Head Office and Production Site
Production sites*Sales locations are not included.

7

AICA Group CSR Report 2019

Target Fields of Each Business
The main fields targeted by the Chemical Products Business are the construction and non-construction sectors, while the Construction
Materials Business targets the construction sectors. The construction sector is further divided into the residential and non-residential
segments, the latter of which includes a wide variety of buildings, including retail facilities and office buildings. AICA Group products areworking hard in a wide range of fields.
Non-construction sector

Construction sector
Residential

Automobiles

Cosmetics

Sanitation agents

Man-madewood

Food packaging

Insulating
materials

Shoes andclothing

Grinding
compounds

Apartment
buildings

Retail facilities

OfficesNonresidential

Public facilities

Educational
facilities

Hotels andMedical andaccommodation
welfare facilities
facilities

About AICA

Electronicmaterials

Construction
Materials
Business

Chemical
Products
Business

Detached
housing

Transport
facilities

AICA’s Vision
Foundations Supporting AICA

Japan
United States
China

TaiwanThailand

Vietnam

Malaysia
Singapore

Indonesia

New Zealand

AICA Group CSR Report 20198

Virtuous Circle Model andCore Competences
Virtuous Circle Model Concept
Through engagement with our stakeholders, the AICA Group identifies social issues, acknowledges them as risks, as well as turningthem into business opportunities. We achieve social contribution and sustainable business growth by develops and expands sales of“AS (Aica Solution) products” that solve social issues.

Virtuous Circle Model to balance financial and non-financial matters
Global warming
Depletion of natural resources● Labor shortages/diversity
Leveraging
Identify
our strengths
social issues
to solve social
issues●●About AICA

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

External environment● Risks and opportunities● Competitive advantage●●

AICA’s Vision

Chemicalproducts
Engagementwithstakeholders

Construction
materials

challenge and creation

Foundations Supporting AICA

Group management
Human resources and technology
Management foundations

Customers ● Suppliers
Employees ● Local communities● Shareholders●●

Contribution
to business results
Enhance a
corporate value

The Sustainable Development Goals (SDGs) adopted by the United Nations in 2015 are international goals for 2030 that aim to solve problems like poverty, inequality, education, and theenvironment in all countries and regions so that we could have live in a better global community.
SDGs consist of 17 goals and 169 targets to attain a sustainable society, with a pledge to leave
nobody on Earth behind.
As a company that operates business on a global scale, the AICA Group has signed the Global
Compact. AICA group is committed to achieve goals through various activities. We reviewed theMaterialities in FY2018, and sorted out the relevance between the issues in the Materialities andthe SDGs, and clarified anew the important business activities that the Group should tackle global
social issues.
We shall tackle social issues through various corporate activities hand in hand with the stakeholders and contribute to the sustainable society.

AICA Group CSR Report 2019

AS products' sales
expansion● Environmental load
reduction● Sustainable society●

Sustainable growth
Corporateof net sales andentity recognizedprofitby society● ROE 10% or more
● Building of riskresistant portfolio● Sound financial foundations●

The AICA Group and the SDGs

9

Contribution
to society throughbusiness
activities

3 core competences that accelerate the Virtuous Circle Model
The AICA Group, which has captured the top share of the market in specific sectors and continues to provide
products that are essential to the world, has three unique strengths. We are a chemical company that also operates
in the design domain, proposing finely detailed solutions with its global network.

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

Foundations Supporting AICA

Sales
Network

AICA’s Vision

DesignAbout AICA

Chemicaltechnologies

The chemical technologies we have cultivated since
the company was first established form the foundation
all of our business activities. With our resin synthesis
technology for adhesive products as our coretechnology, by applying those technologies to theconstruction materials and specialty and performancematerials sectors, we are able to develop highly
original products. We use the power of chemistry
to solve social issues and enrich people’s lives.

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 companys
overseas for the chemical products and construction
materials businesses. We are identifying local needs
that are rooted in the local regions and pursuing the
localization of our businesses overseas.

AICA Group CSR Report 201910

Message from the President

We strive to be an entitythat develops sustainably by
About AICA

enhancing our ESG initiatives.

AICA’s Vision

Yuji Ono
Foundations Supporting AICA

Representative Director andPresident

Summary of FY2019
Consolidated business results for FY 2019 were net sales of
191,363 million yen (up 16.9% year-on-year),operating profit of
20,834 million yen (up 9.1%), ordinary profit of 21,249 million
yen (up 8.4%), and profit attributable to owners of parent of
13,316 million yen (up 11.0%).Net sales increased for the ninth
consecutive year, operating and ordinary profit for the tenthconsecutive year, and net income* for the third consecutive
year. These figures were the highest in the company’s history
for all indices - net sales, operating profit, ordinary profit, andnet income*. In the Japanese construction market, one of thecompany’s major fields, both the residential and non-residential
sector performed well. In particular, this favorable performance
was maintained by expansion of the AS products, which
contributes to the solution of social issues, mainly in the areaof childcare center extensions, as well as in hotels and sports

11

AICA Group CSR Report 2019facilities, where business is thriving in connection with theOlympics.
On the other hand, the chemical products business struggled
on the profit front due to soaring prices of raw materials.
However, we managed to achieve an increase both in the sales
and profit with the Evermore Chemicals Industry Group (EMC
Group, joined AICA group in January 2018) and Thai Chemical
Corporation’s (TCC, joined AICA group in March 2018)
contributions as well as with the strong sales both in Japan andoverseas.
*Profit attributable to owners of parent

Toward the early achievement of themedium-term business plan “C&C 2000”
and the achievement of the “Aica’s 10 years
vision” beyond▶ Toward the sustainable growth in the Japaneseconstruction market

Overseas, with the sustained economic growth in the various
Asian countries, demand for adhesives, industrial resins, andhigh-quality high pressure laminates (HPL) is expected toincrease.
We are working to expand our business in the chemical
products business with AICA Asia Pacific Holding Pte. Ltd.
(AAPH) as they are responsible and playing a key role for theoversea chemical product business. At TCC, which was newly
added as a consolidated subsidiary through AAPH in March
2018, we installed a new reactor, which will use Japanese
phenol formaldehyde resin technology transferred to TCC.
In March 2019, P.T. AICA Indria ,an AAPH Group subsidiarythat has a major share of the Solvent-based CR market inIndonesia,built a fourth plant. This move almost doubled thecompany’s production capacity for Solvent-based CR. We
will continue our active expansion of production capacity andpursue the creation of technological synergies in our aim tobecome the leading manufacturer in Asia in the building sector
that supports people’s lives.
In the specialty and performance materials business, in which
we are focusing our efforts as a growth sector for the next
generation, we have been pursuing the expansion of synergies
with the EMC Group. In polyurethane resins and UV-curable
resins, start-to-finish production, from upstream raw materials
to finished resin products, is now possible, which has raised
our competitive advantage. First, we would collaborate with the
AAPH Group to expand sales in Southeast Asian countries ofpolyurethane resins for footwear and textiles, an area where the
EMC Group excels. Then, we develop this area into a pillar of
the business that targets non-construction sectors.
In the construction materials business, we will put a variety
of measures into action to bring about rapid growth in overseas
net sales. In April 2019, through AICA Asia Laminates Holdings,
which oversees the construction materials business, we
acquired shares in HPL distributor, Sois Mendinni Industrial
Technology (Shanghai) Co., Ltd. As Sois Mendinni’s coremarket is China, this acquisition has given us a sales network

AICA Group CSR Report 2019

Foundations Supporting AICA

One area cited as a growth driver in C&C 2000 is the AS
products that contributes to tackle social issues. Focusing on
the social issues of the times, we develop and expand salesof products that contribute to solving those problems. Suchproducts include easy-to-construct products to combat thechronic shortage of skilled workmen on construction sites
caused by the shrinking birth rate and aging population, andrepair and reinforcement products that will extend the life ofbuildings and infrastructure.
In FY2018, we actively invested in the development andsales expansion of AS products. We established the Nagoya
R&D Center to speed up product development, extending ourtechnological development space by about 7.5 times bigger
for the construction materials business. We also built a newplant in Ibaraki Prefecture to increase production capacity andtransportation efficiency of the premium artificial marble, Fiore
Stone, which is one of the AS products.
This fiscal year, in July 2019, we entered into a capital andbusiness contract with the building company, SOUBU Co.,
Ltd., to build a framework for all-in-one proposals for materials
and construction of external wall coating with JOLYPATE. In
our product development, we have leveraged the opinions ofskilled workmen to find ways to solve the increasingly serious
shortage of skilled workmen. Further, as a growth sector forthe next generation, in July 2019, we launched a new product,
Melamine Tiles, entered into a new market of non-residential▶ Capturing demand in the growing Asian region

AICA’s Vision

medium-term business plan, and we declared our targets andfundamental management strategies to be achieved within thefirst four years of the AICA’s 10 years vision. We aim to achieve
the plan’s targets of 200 billion yen in net sales and 22 billion yen
in ordinary profit a year ahead of in March 2020. We will pushforward toward the achievement of our targets by implementing
various measures grounded in the basic policy of pursuing
and realizing the three growth drivers and strengthening ourmanagement foundations to support growth.

About AICA

We have planned a “Aica’s 10 years vision” ( P. 15), targeting
300 billion yen in net sales and ordinary profit of 30 billion yen
by FY2027, the 90th anniversary of the company’s founding.
At the same time, we established “C&C 2000” ( P. 16) as ourfloor coverings. Melamine Tile is a completely new type offlooring material that combines the strengths of polyvinyl
flooring materials and melamine materials. They are easy toconstract and clean, and resistant to scuff marks and dirt. We
will continue to enhance our proposal capacity for entire spaces,from furniture and housing equipment to walls, fittings, andflooring materials. It is believed that the Japanese construction
market will shrink, but even in that market environment, we will
strive to achieve sustainable growth by selling multiple products
for single building projects.

12About AICA

that covers China’s main regions. The following May, we
commenced operations at our first HPL plant in Vietnam, which
completed our supply structure for the expansion of our market
share not only in Vietnam but also in the whole of Asia. We
will continue to expand our sales channels and increase our
production capacity through the active pursuit of M&As, toaccelerate the extension overseas of the brand and productstrengths that we have established in Japan and to achievesignificant growth.

CSR concept

AICA’s Vision
Foundations Supporting AICA

13

▶ Create a mechanism to integrate ESG initiatives
with management and business activities
We are currently facing serious and miscellaneous issues,
including climate change on a global scale, waste increse,
destruction of the natural environment, pressure on resources
due to the growing population, and widening income disparity.
The United Nations adopted the Sustainable Development
Goals (SDGs) in 2015 and we as a corporate entity are required
to contribute to the goals set by the United Nations.
Under such circumstances, AICA Group as a company that
conducts business on a global scale, it is our duty to fulfill a duty,
corporate social responsibility (CSR), particularly in the areas ofthe environment, society, and governance (ESG) including value
chain. To achieve this, we believe that the most important thingis that we pursue these responsibilities united as a Group.
AICA Group has always placed efforts into managementthat takes CSR into consideration. Since 1996, we have beenworking to obtain certification of our quality management
systems (Q: ISO 9001), environmental management systems (E:ISO 14001), and occupational health and safety management
systems (O:OHSAS 18001) at each of our sites. We succeededin obtaining these certifications for all AICA Kogyo plants andsales locations in FY2003. With this trinity of management
systems, we have built the QEO Management System andhave worked to strengthen our management foundations withthe production, R&D, sales, and administrative divisions all
coming together as a united force. This framework is the main
axis of our CSR activities and is a core part of our measures
to strengthen our management foundations to support growthunder our medium-term business plan “C&C 2000.”
The key performance indicators (KPIs) for each of the AICA

AICA Group CSR Report 2019

Group Materialities, which were reviewed in FY2018, havebeen incorporated into the Action Plans (assessment axes) ofeach division from FY2019. It is in this and other ways that weare merging our business activities and CSR activities today.
We have organized the correlations between the AICA Group
Materialities and the SDGs, which are the international goals forrealizing a sustainable world, and clarified anew the importantbusiness activities that the Group should conduct to solve
global social issues.
We will continue to pursue the creation of frameworks tointegrate ESG initiatives into our management and businessactivities, and contribute to the realization of a sustainable
abundant society.

▶ Balancing economic value and social value
Through engagement with our stakeholders, we identify
social issues, acknowledge them as risks, as well as turningthem into business opportunities, and develop and expand
sales of products that leverage our strengths for the solution ofsocial issues. In this way, we have built up a virtuous circle model( P. 9) that will achieve social contribution and sustainablebusiness growth.
In response to social issues such as the increasingly severe
environmental problems in various parts of the world, declining
birth rates and aging populations, and the development ofsafe and sustainable communities, we will actively talk to therespective stakeholders in these issues and, leveraging thetechnologies and products we have accumulated to date, makeproposals for problem-solving that are rooted in the regions andcultures.
Through the promotion of this virtuous circle model, we willconduct business activities that will contribute to the realizationof a sustainable society. By integrating economic growth andcorporate social responsibility, we aim to become a corporategroup of sustainable growth and development that is trusted
and needed by its stakeholders.

AICA Asia Pacific Holding Pte. Ltd.

Message from the CEO

Rein Meijer
Chief Executive Officer(CEO)

Our employees are our most valuable assets and employee
satisfaction and career development are vital to our long-termbusiness growth. Our focus has been on the “three zeros” ininjuries, process accidents, and non-compliance throughout
AAPH. Management, together with the employees, is building
and maintaining a high level of safety consciousness in thecourse of this “three-zeros” journey.
Furthermore, AAPH operates in a multi-national andmulticultural environment that spans the Asia-Pacific region,
from New Zealand to South-East Asia and on to China, acrossfive different time zones. Diversity and gender equality havebeen our operating culture and will be strengthened to generatesynergies within AAPH.

especially relating to ESG. We also create a culture of
performance measurement for continuous improvement under
Operational Excellence. These measurements will be tracked
and improved upon to contribute towards the middle-termbusiness plan “C&C 2000” and the UN SDGs (United Nations
Sustainable Development Goals). We have created the role of
Sustainability Manager role to get bring us up to speed withindustry best practices and to step up our efforts in delivering
our CSR/sustainability performance. Creating awarenessof CSR/sustainability among our employees, as well as of
their responsibility as part of AICA Group, was our first stepin achieving alignment within AAPH. Changing the mind-set
and getting our staff on board were the initial challenges, asmany organisations are moving from compliance to competitive
advantage in the area of CSR/sustainability. Customers who
once simply preferred to work with sustainable suppliers are
now demanding CSR/sustainability as a basic requirement intheir suppliers. This translates to our own expectations of our
suppliers to have a certain level of CSR compliance, to support
our efforts toward a sustainable supply chain.

The AAPH Group will unite in its aim forsustainable growth.
In AAPH, CSR/sustainability is the responsibility of every
employee. It is a journey of continuous improvement, employee
engagement, and contributions to the good of society andenvironment. We need to exercise greater accountability andtransparency in our operating environment and the society welive in. The bar has been raised and the focus is no longer merely
on minimizing the impact of our operations; it is now more about
making positive contributions to society and the environment.
Greater leverage of our employees and technologies will help us
to build a competitive advantage in our business environment.
With greater CSR/sustainability in the form of strong ESG
performance, we can then continue to deliver long-termsustainable and profitable business growth to the AICA Groupand its stakeholders.

AICA Group CSR Report 2019

Foundations Supporting AICA

Since AICA Asia Pacific Holding (AAPH) joined AICA Groupin Dec 2012, there has been constant alignment with AICA
Group’s principle of Challenge and Creation and its management
philosophy of creating new values and contributing to society
through endless innovation. As AAPH represents about 30% of
AICA Group’s sales, we have a significant contribution to maketowards its CSR. Our journey began with the adoption of AICA
Group’s materialities in 2017, as well as its related performancetargets in areas relating to Environment, Social, and Governance(ESG). On top of focusing on business growth, we are more
conscious of the impact of our operations on the surrounding
environment and our stakeholders, including employees, local
communities, customers, investors, and suppliers. Higher
standards of governance are expected to remain compliant
and develop a high level of trust and transparency toward
stakeholders. Greater transparency, accountability, andresponsibility are expected from management in today’s businessenvironment. We believe in that strong ESG performance cancontribute to sustainable business performance by minimising
our environmental impact, by improving employee satisfaction,and through strong governance.
In the past two years, AAPH has progressively built up
the capability to measure our non-financial performance,

AICA’s Vision

Involvement with our Employees,
Our Most Important Capital

About AICA

The path of CSR/sustainability
as a member of the AICA Group14

Progress in Aica’s 10 years vision andMedium-Term Business Plan
Background to establishment of the Aica’s 10 years vision
AICA has established an Aica’s 10 years vision with the goal of FY2027, the 90th anniversary of the company. With the aim oftransforming into a solid, robust management structure that will not be easily influenced by trends in the Japanese construction
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 sector such as the 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 10 years vision
Financial targets by 2027/3
About AICA

FY2017

FY2027

Consolidated 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

AICA’s Vision

The future vision at 2027/3
Chemical products

Sales: 170 billion yen

Construction materials

Sales: 130 billion yen

Aica Group will aim to be Asia’s No.1 resin manufacturer in

Aica Group will stretch the strength in the interior wall materials

the construction sector to support people’s life and social

into the exterior wall as well. We will continue to grow as ainfrastructure. We will also grow business in non-construction“Solution Provider for Space Design” that offers comfortability &sector including automotive/daily goods/ electronic materials.

safety in residential & non-residential buildings.

Foundations Supporting AICA

Business collaboration

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 respondto changes in market environment, we arestrengthening group collaboration and businessfoundations.

Optimize production &logistic system

ComplianceTechnology and material
cooperation

QEO management

R&D investment

Healthy financialbase

IT infrastructure
investment● Human resource development

We promote diversity management. In order todevelop globally competent human resources andprofessional human resources, we will establish avariety of development systems.

Globally competent human resources

Diversity

Professional human resources● Responsibility to stakeholders

We will put an emphasis towards engagement withstakeholders, and promote management which
contributes to local communities and enhances CS
and ES.

15

AICA Group CSR Report 2019

Increase corporate value

Corporate governance enhancement

Harmony with local communities

Improvement of CS & ES

FY2017 151.6 billion yen 80th anniversary

FY2021 200 billion yen

FY2027 300 billion yen 90th anniversary

Aica’s 10 years vision
1st Medium-Term Business Plan
March 2017

2nd Medium-Term Business Plan
March 2021

3rd Medium-Term Business Plan

March 2024

March 2027

Medium-Term Business Plan “C&C 2000”
Financial Targets (Consolidated)
FY 2017(Achievement)

FY 2021 (Plan)

Net Sales

151.6 billion yen

200 billion yen

Ordinary profit

18.3 billion yen

22 billion yen

ROE

9.9%

10% or more

Ratio of overseas
sales

30.8%

35% or more

Amid a business environment that is going through major changes, such aschanges in housing demand due to the shrinking population, declining birthrate and aging population, deterioration of infrastructure and buildings, a growing awareness of the environment, an increase in the consumption tax, andtechnological 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 tocreate original products that will contribute to the realization of an abundantsociety.
2. Operation Base Enhancement to support thegrowth

1. To seek and realize 3 growth drivers
Sustainable growth of key domestic business by enhancing AS products*
P. 17)Development and investment in the focus fields for the next generation.
(Non-Construction fields , Untapped markets in Construction fields)( P. 19)❶ (❶ Growth of individuals through C&C activities *❷❷ management *3 and IT foundation renewal❸ Overseas deployment of Japanese technologies (AICA’s Vision

Basic Policy

About AICA

Item

Improvement of CS and ES *4 by means of QEO❸ Observing compliance

P. 20)

Investment strategy
Capitalinvestment

22 billion
yen

Capacity expansion, line
automation, IT reform

R&D
expenditure

M&A

18 billion
yen

Area expansion, expansionof business domains

Humanresources
investment

14 billion
yenIntroduction of new technology, industryacademia collaboration

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

Foundations Supporting AICA

*1 AS products: Abbreviation for AICA Solution products. Products that solve a variety of social issues*2 C&C activities: Small group activities for conducting management and improvement of quality with regard to products, services, work, etc. under the spirit ofchallenge and creation. They have been conducted since around 1970
*3 QEO management: A management system based on a trinity of Quality, Environment and Occupation health and safety*4 CS and ES: CS refers to customer satisfaction and ES refers to employee satisfaction

Progress
We are aiming to achieve our financial targets a year ahead of schedule. As well as pursuing the development of new markets, we willtake maximum advantage of the synergies between new plants and companies that have been consolidated through M&As and press
ahead toward the achievement of our targets.
1st year

2nd year

3rd year

4th year

FY2018(Achievement)

FY2019(Achievement)

FY2020(Plan)FY2021(Target at establishment of plan)

163.7 billion yen 191.3 billion yen

200 billion yen

200 billion yen

19.6 billion yen

21.2 billion yen

22 billion yen

22 billion yen

ROE

10.1%

10.7%

10.6%

10% or more

Overseas
sales ratio

33.4%

42.0%

42% or more

35% or more

Net Sales
Ordinary profit

1st yearachievements

Capitalinvestment

2nd yearachievements

3rd yearplans

4.52 billion yen 7.89 billion yen

6 billion yen

M&A

5.26 billion yen-

In planning

R&D
Expenditure

2.85 billion yen

3.2 billion yen

3.4 billion yen

Aim to achieve targets of Medium-Term Four-Year Plan a year ahead of schedule

AICA Group CSR Report 201916

Three growth drivers for the creation of new value
1. Sustain growth of Japanese core businesses by
expanding the AS products
What are AS products?
We offer products that help to solvea variety of social problems, not only
environmental ones, promoting them as
AS (AICA Solution) products. Leveraging
our strengths of chemistry and design, we
will expand sales of high added value ingrowth areas and aim for the sustainabilityof both society and the company.

Product development thatleverages AICA Kogyo’s corecompetencies.

Chemicaltechnologies

Solution of social issues with AS products

DesignSales
network
About AICA

To Increase Development Capabilities
Completion of new technology building, Nagoya R&D Center, in
October 2018

AICA’s Vision

The Nagoya R&D Center, which will be the core R&D hub for the construction materials
business was opened on October 1, 2018. In a technological development space that isabout 7.5 times larger than previously, new equipment has been constructed and the major
experimental equipment that had been dispersed around the various sites has been brought
together into the one location. About 40 engineers and researchers are now gathered at thistechnology development hub. Taking advantage of the opening of the new Center, as well as
accelerating the development of new products and bringing them to market, we will concentrate
our efforts on entering new business domains that will support the next-generation AICA.

Examples of Social issues that AS Products Can Help
Foundations Supporting AICA

17

Social issue

Value added to solution

Typical AS product that can provide value

Degradation of
infrastructure andbuildings

Extension of life of buildings
Provide products for the repair ofdegrading buildings and 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 sales of
products that have good load efficiency,
e.g. reducing weight of products.

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

Shortage of
tradespeople onbuilding sites

Easy-to-Constract products
Develop products that are easy toConstract, to augment the shortage ofskilled workmen resulting from labor
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 natural environment
Curb forest felling and quarrying ofstone materials through the effective
use of wood and stone materials andproposals for alternative materials.

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

Diversity

Universal design
Promote the development of productsthat people of all ages can use, fromsmall children to the elderly.

[Toilet Booth]● Manabooth (Melamine toilet booth for children)[High Pressure Laminate (HPL)] [CERARL][Counter/Postform]● Virutect (anti-bacterial/anti-viral function product range)

AICA Group CSR Report 2019

Contribution to extension of life of infrastructure and buildings

Repair/reinforcing materials
Accidents in which tiles and concrete have fallen off walls due to degradation of
infrastructure and buildings are causing a renewed recognition of the importanceof maintenance. We are concentrating our efforts in the development of repair/
reinforcement materials for infrastructure and buildings, positioning them as AS
products.
The DYNAMIC RESIN Clear Guard Method, which keeps exterior tiles fromfalling off with a special clear film, has earned a good reputation for increasing
safety without harming the appearance of the exterior, and sales of the producthave increased in recent years.

Change (growth) in sales of DYNAMIC RESIN
Clear Guard Method*Taking FY2016 net sales as 100
400

314

300

233
200

100

100

2016

2017

2018

2019

(FY)

(Target)About AICA

0176

Ease of construction and anti-viral properties

High value-added HPL

Changes (growth) in sales of high value-addedHigh Pressure Laminate (HPL)*Taking FY2016 net sales as 100
300
250
200

2017

2018

195

100

50
0

2016

2019

(FY)

(Target)Foundations Supporting AICA

image photo

177

150
100

•
Anti-viral treatment is not meant to treat or
prevent disease.
• Complies with SIAA safety standards.
• This product does not guarantee prevention of
infection.
•This is not a medical product such as apharmaceutical product or medical device.
• Anti-viral performance does not manifest against
all viruses.

168

AICA’s Vision

We are focusing on the development of products that add value to our coreproduct of high pressure laminates (HPL). We are expanding our product ranges,
such as easy-to-install products in response to labor shortages due to thedeclining birth rate and aging population, and products with anti-viral properties
that will contribute to anti-viral and anti-bacterial measures in medical and nursing
care settings and at childminding and educational facilities.
In FY2018, we launched the anti-viral high pressure laminate (HPL), Virutect.
We also expanded the range of related products, namely CERARL Virutect Typeand Postform Counter Virutect Type.

Lighter and more durable than natural stoneEngineered stones
There is growing demand for an alternative to natural stone known as“engineered stone,” which is formed from natural crystals bound together
with resin. Due to its heavy weight, natural stone is burdensome in terms oftransport and constraction. It is also of variable quality in terms of dirt resistanceand maintainability. As a product that solves these issues, in a first for Japan,
we launched FioreStone, our original brand, in 2011. Today, FioreStone has
captured the top share of the Japanese market for engineered stone.

Change (growth) in sales of FioreStone*Taking FY2016 net sales as 100
200

150

100

124

137

156

100

50

0

2016

2017

2018

2019

(FY)

(Target)

AICA Group CSR Report 201918

Three growth drivers for the creation of new value
2. Development and investment in the focus fields for the
next generation.
In addition to strengthening non-construction fields and building stronger frameworks, we will also focus our efforts
on untapped markets in construction fields in the domestic construction market.

Chemical Products Business
Manifestation of synergies with Evermore Chemical Industry Group

About AICA

In January 2018, Evermore Chemical Industry Group (EMC Group)joined the AICA Group. The EMC Group excels in polyurethane(PU)resins and UV-curable formed resins, and its product ranges target
daily commodities that the AICA Group has previously had few dealings in, such as shoes, synthetic leather, functional fibers, and foodproduct packaging. The EMC Group provides integrated production
from the upstream raw materials to the finished resin products. With
the leveraging of its technologies and production sites, various synergies are already manifesting between AICA, EMC, and AAPH*.
For example, after rolling out the EMC Group’s PU resin raw material for adhesives in Japan, we are starting to see results. We arealso making progress in identifying the needs of the domestic textiles
market for PU, which we expect to lead to concrete results from next
fiscal year onward. VA/VE benefits are also appearing on the procurement front.
We will continue to share information between AICA, EMC, and
AAPH and complement each other to pursue joint product development, production in optimal locations, and local sales and marketing
efforts. In this way, we will create even greater synergies and increase
the presence of the AICA Group in the non-construction resin market
in the East and Southeast Asian regions.
*AAPH: AICA Asia Pacific Holdings Group

AICA’s VisionMarkets in which EMC Group has strengths

Foundations Supporting AICA

Shoes

Synthetic leather

Cross-linking agent

Molded products

Construction Materials Business
Launch of Melamine Tile marks entry into floor market
Our high-pressure laminate floor tiles, Melamine Tile, are easy to construct, easy toclean, and resistant to shoe scuff marks and dirt. This product was launched in July
2019, marking our entry into the non-residential floor coverings market. Melamine Tile
is a new floor material that combines the advantages of polyvinyl chloride (PVC) floor
and melamine. With this entry into the non-residential floor market, we will increase ourcapacity to make total proposals for space design, from floors to furniture and household
equipment to walls.

Background to development
We have the top market share in the Japanese high pressure laminate (HPL) market,
and we have sought to develop a floor material that takes advantage of the benefits of
HPLs, namely its excellent scuff and dirt resistance and ease of maintenance. However,
because HPLs expand and contract, the task of developing a melamine floor material
was fraught with difficulties. Meanwhile, for the past several years, we had also beendeveloping a variety of resin products in the specialty and performance materials business.
In that process, using a special acrylic resin developed for textiles, we were able to curb
the expansion and contraction of HPLs and succeeded in developing a new floor material
that offers both the strength of HPLs and the ease of construction of PVC core layer.

19

AICA Group CSR Report 2019

Structure of Melamine Tile
High pressure laminate(HPL) layer

3 mm

PVC core layer

No chamfer or
C-chamferThree growth drivers for the creation of new value
3. Overseas roll-out of Japan technology
With a focus on Asian markets, we will build sales networks and strengthen our brand power, and pursue the roll-out
overseas of high value-added products.

Chemical Products Business
More sophisticated initiatives with AICA Asia Pacific Holdings Group
Trend in AAPH Group Sales Revenue and Volume(billion yen)(metric ton)

50

70

40

60

30

50

20

About AICA40
FY2014

Sales Revenue (left axis)

FY2016FY2018

Sales Volume (right axis)

AICA’s Vision

More than six years have passed since AICA Asia Pacific HoldingsGroup (AAPH Group) became a part of the AICA Group. In that time,
the synergy benefits of leveraging each other’s strengths have grown
and we have pursued more sophisticated initiatives together.
We have rolled out butyl-rubber hot melts for headlamps and waterbased compounds for the automotive market to sites in the AAPH
Group and elsewhere, conducting local production and local sales.
This is contributing to the growth in net sales. The AAPH Group and
AICA Kogyo are also conducting joint development of hot melts forJapanese-made sanitary products (diapers and menstrual products)
so they can provide products of higher quality.
The two parties are sharing each other’s expertise in manufacturing
processes and pursuing initiatives for raising quality and reducing
costs, such as improving manufacturing skills, efficiency
improvements, and reductions of defects.

Construction Materials Business
Completion of AICA Laminates Vietnam’s new highto expand sales channels in China

pressure laminate (HPL) plant

In April 2019, through AICA Asia Laminates Holdings (AALH), we
made an equity investment in Sois Mendinni Industrial Technology(Shanghai) Ltd., a high pressure laminates (HPL) distributor whose
core market is China, and made it a subsidiary. Sois Mendinni’s sales
network covers China’s major regions and it particularly excels inmaking sales proposals to educational and research facilities. Taking
advantage of this acquisition, we will collaborate with Sois Mendinniand AALH in an effort to expand sales of HPL and noncombustible
decorative panels in China, where demand for high value-added
decorative panels is predicted to grow.

AICA Laminates Vietnam, a subsidiary that manufactures anddistributes HPL, has established a new HPL manufacturing plant in
the Nhon Trach 3 Industrial Park in Vietnam’s Dong Nai Province. The
new plant began operating on May 22, 2019. The newly built plant
is a strategic base for implementation of the medium-term businessplan. With AALH playing a central role, we will take advantage of ouroverseas production sites in India, Indonesia, and Vietnam to pursue
the localization of our business (expand local recruitment, strengthen
local collaborations, strengthen designated supply for local project),with the aim of dramatic growth in the construction materials businessin the Asian region.

Foundations Supporting AICA

Equity investment in HPL distributor, Sois Mendinni

Strong sales channels in
Chinese market

Strong product strengths,
functional features,
noncombustible technology

Synergies
throughcollaboration

CERARL

Educational facilities/
medical facilities

AICA Group CSR Report 201920

Business overview: Chemical products business

Net Sales(billion yen)

Operating profit

109

77.2

FY2019 Targets

114.7 billion yen
Operating profit
8.1 billion yen
Net Sales

7.4
6.2

75

(billion yen)

82.9

6.5

5.4

74.8

■ Trend in Portfolio

4.6

Other
9.5% 60.4%
21.2%

FY2018109.0

Adhesives

Specialty &Performance
Materials

About AICA

2014

2015

2016

2017

2018 (FY)

Average annual growth

9.8%

2014

2015

2016

2017

2018 (FY)

47.8%

114.7

billion yen

8.5%
Construction
ResinsAverage annual growth

61.0%

21.0% FY2019 Targets

billion yen
8.8%

9.5%

12.3%

48.8%
Of which AICA Asia Pacific
Holdings GroupFY2018 Results
AICA’s Vision
Foundations Supporting AICA

In adhesive products, sales of adhesives for laminated lumber were sluggish, but
our adhesives for construction and industrial PF resins performed well, allowing
us to increase overall sales of adhesives. Overseas, as well as being able to tap
into demand for adhesives and industrial resins in the Asian and Oceania regions,Thai Chemical Corporation contributed to consolidated results from the second
quarter of the consolidated accounting year, which also enabled us to increase
sales revenue.
In construction resin products, JOLYPATE, the interior and exterior finishingcoating material for new housing, balcony waterproofing materials, and repair/
reinforcement materials for civil engineering projects were sluggish, but floor coating
materials for factories and warehouses, particularly the heavy-duty material, AICA
PUR, and Tough Resin Clear Guard Method, our method for preventing fallingexterior tiles, performed well, allowing us to increase net sales in this segment.
Regarding specialty and performance materials, an area we are focusing on in our
approach to non-construction sectors, UV-curable resins for electronic materials
and hot melts for photovoltaic cells were sluggish. However, sales of hot melts
for automotive and sanitary material applications and polymer beads for use incosmetic products increased. Further, with Evermore Chemical Industry contributing
to consolidated results from the first quarter of the consolidated accounting year,
we were able to increase net sales of specialty and performance materials.
These results brought about net sales of 109,062 million yen (up 31.5% year-onyear). Due to the impact of soaring costs of raw materials and ingredients, operating
profit (before deduction of unallocated operating expenses) was 7,444 million yen(up 13.9% year-on-year).

TOPICSPT AICA Indria
New Pasuruan plant built
PT AICA Indria (Indonesia), one of the 16
companies in the AAPH Group, has built a
new factory in Pasuruan, Indonesia, whichbegan operations in March, 2019. With
this new facility, we will be able to respondto the growing demand in Indonesia forsolvent-based adhesives, which are usedin shoes, woodwork and furniture, DIY, andother applications, and strive to expand ourmarket share further in Indonesia.

Medium to long-term vision

Director and Managing
Executive Officer
Head of the Chemical
Products Company

Nobuyuki Omura

21

AICA Group CSR Report 2019

To become No. 1 in Asia

To become AICA’s 3rd profit pillar

The AICA Group’s various products are derived
from the chemical technologies of our segment
and we will continue to drive the company forwardwith those technologies. We will also focus ourefforts on increasing our manufacturing capacity
and creating synergies with Group companies in
our aim to become No. 1 in Asia.

Centering on growth markets in Japan andoverseas, such as the automotive market,
electronic materials, cosmetics, and functional
fibers, we will create new products and businesses
in non-construction sectors and grow the specialty
and performance materials business into AICA’s
third largest segment after the chemicals andconstruction materials business.

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

Kenji Ebihara

Business domains
1936

2019
JOLYPATE

Wall coating materials
Polyurethane
Epoxy
Polyurethane
Solvent-based CR
Polyvinyl acetate

JOLYACE

AICA PUR

Heat-resistant PUR

Floor coating materials

Dynamic resin

JOLYSEAL

Epoxy

Urea Urethane

Repair/reinforcing materials,
corrosion preventive
materials

M&A Dainippon Shikizai Kogyo Co., Ltd.
Hot melts

UF

PF

MF

Construction
Resins

Silicone

Acrylic

M&A AAPH Group*

M&A
Aica SDK
Phenol Co., Ltd.

Hot melts
Silicone
Acrylic/
UV-curable resin

Hot melts
Silicone potting agent

LumiartPolymer beads

Adhesives

Silicone

M&A Ganz Chemical Co., Ltd.
Polyurethane

Specialty &Performance
Materials

M&A EMC Group*2High Pressure
Laminate (HPL)

Polyester decorative
Plywood

Laminating technology, design technology, coating technology

CELSUS

CERARL
Noncombustible technology

Construction
Materials
Business(P. 23)

AICA’s Vision

Acrylic emulsion
Water-based compounds
Polymer beads
UV-curable resins

About AICA

Industrial adhesives
Industrial resins
Composite board resins

PF*1 AAPH Group: AICA Asia Pacific Holding Pte. Ltd.
*2 EMC Group: Evermore Chemical Industry Group

Main Products

Industrial adhesives

Industrial resins

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

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

Composite board
resinsResins used to formboards made bybinding together
wooden materials thathave been turned into
chips or fibers.

Foundations Supporting AICA

Adhesives

Construction resins
Wall coating materials

Floor coating materials(JOLYPATE)(JOLYACE)

Acrylic-based architectural
coating used on interior
and exterior walls inhousing, shops, public
facilities, etc.

Synthetic resin floor
coating materials usedon areas that require
high durability and heat
resistance, such as
factories and warehouses.

Repair/reinforcing
materials, corrosion
preventive materials

image

Resin products including
repair materials for concrete
structures, materials toprevent falling tiles, and anticorrosive lining materials.

Specialty & Performance Materials
Hot melts

UV-curable resins

Polymer beads

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

Instant-curing resins usedin 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.

AICA Group CSR Report 201922

Business Overview: Construction Materials Business

Net Sales

68.7

72.7

(billion yen)

76.7

80.8

Operating profit

82.3

14.4
12.6

15.6

(billion yen)

FY2019 Targets

Operating profit

12.8■ Trend in Portfolio

6.6%
19.9%

About AICA

11.8%
2015

2016

2017

2018 (FY)

Average annual growth

4.6%

2014

2015

2016

2017

2018 (FY)

Average annual growth

6.4%

Fittings,
High Pressure
Interior Housing Materials Laminate (HPL)
Counter/
Postform

6.3%

22.5%

21.1%

FY201882.3

201485.3 billion yen
16.6 billion yen

Net Sales

16.1

billion yen 16.7%

19.9%

00.0% FY2019 Targets

85.3

11.7%

23.9%

Noncombustible Decorative
Panel (Except "Cerarl")billion yen

16.0%

23.6%
CERARL

Boards, films, etc.

FY2018 Results
AICA’s Vision
Foundations Supporting AICA

In high pressure laminates (HPL), domestically, general-purpose single-color decorative panels performed well. CELSUS, an HPL with advanced
design and resistance to fingerprints and other dirt, and high value-added products that have been given functions such as non-combustibility
and scratch resistance, have captured new-build and renovation demand in hotels and commercial facilities. All of these factors allowed us toincrease sales in this segment. Sales also increased overseas, predominantly in Indonesia, Singapore, and Vietnam. In boards and films, thearchitectural films range, ALTYNO, which has seen an expansion of finished products, performed well, but general-purpose polyester decorative
panels struggled, leading to a downturn in sales over the previous year.
Sales of the noncombustible decorative panel, CERARL, fell in the medical and welfare sector due to a downturn in the number of new
project starts, but it was able to capture demand from childcare centers, which are expanding in response to the problem of long waiting lists
for childcare places, as well as in the buoyant Olympics-related sector of new builds and renovations of sports facilities, hotels, and other related
facilities. Adoption of the CERARL Deodorant Type also increased for restrooms in railway stations, schools, and other facilities. All of these factors
allowed us to increase sales in this segment. In Noncombustible Decorative Panel (Except “Cerarl”), we saw growth in the use of the acrylic resincoated calcium silicate boads, LUNALITE, for sports facility, hotel, factory/warehouse, and educational facility applications, and adoption of themultifunctional building materials, MOISS, has expanded from residential applications to childcare centers and public facilities. As a result, sales inthis segment increased, with a focus on synergy products with AICA-Tech Kenzai Co.,Ltd.
In Counter/Postform products, handwashing benches and accompanying storage cabinets for small children, made with the artificial marble
product, CORIAN, performed well in new and renovated childcare centers. Sales of FioreStone, our premium engineered stone, have grown
for high-end kitchen counters, and we have also expanded our sales channels to include non-residential facilities such as hotels, allowing us toincrease sales. In fittings, and interior housing materials, the MELAFUSION Series, which leverages the characteristics of HPL, performed well, but
regular-grade ranges of fittings and the functional sliding door range, U.D. (Universal Design) Comfort Series, which targets medical and welfare
facilities both underperformed, resulting in a year-on-year decline in sales for this segment.
These results brought about net sales of 82,300 million yen (up 1.8% year-on-year). Operating profit (before deduction of unallocated operating
expenses) was 16,169 million yen (up 3.5% year-on-year).

TOPICS
Completion of AICA Laminates Vietnam’s new HPL
plant ( p. 20)
New production base for engineered stone,
FioreStone, established in Ibaraki Prefecture
To expand our production capacity for FioreStone, the engineered stone
product that is expected to grow as an AS product, we have established a
new manufacturing plant in Ibaraki. The commissioning of this new plant has
increased our production capacity of FioreStone finished products by about
80%. Locating the new plant in Ibaraki, which is close to the Tokyo urban region
that is the main destination for this product, will lead to cost reductions on thelogistics cost front.

23

AICA Group CSR Report 2019

Medium to long-term vision
Accelerating domestic business andoverseas business with hybrids
In the domestic market, we will create
new markets for melamine floors throughthe development of differentiating products(function, design) and re-shape our portfolio in
Director and Senior Managing
our aim for growth. In overseas markets, we
Executive Officer
will roll out technology and expertise cultivatedHead of the Building & Housing
in Japan and achieve net sales of 30 billion
Materials Company
yen* in the overseas construction materials
Yukihiro Iwase
business in FY2027.
*Actual net sales for FY2019: 5.5 billion yen

Business domains

HPL (floor applications)

Floor
Melamine Tile

Exterior

Incombustible building materials

Boards, films, etc.
CERARL

Wall

Architectual Films

CERARL

Calcium silicate panel /Extruded cement panels

HPL

Counter/Postform

HPL

Counter tops/Door

About AICAInterior

Furniture/
FixtureDecorative boards

AICA’s Vision

Fittings, Interior Housing Materials

Fittings /Partitions
Toilet Booth

Door/Storage

High pressure laminates (HPL) (CELSUS, FLARETECT)With their abundant range of colors
and patterns and superior durability,
these products are used as surface
materials for tables and furniture usedin shops, hospitals, offices, and similar.
We hold a more-than-70% share of theJapanese market for these products.

Noncombustible decorative panels (CERARL)HPL for wall surfaces that are certified
as noncombustible. These products
became a major hit for residential kitchen
panels from 1996 onward. They are also
regularly used in hospitals, schools,
transport facilities, and the like, due totheir robustness, design, and ease of
construction.

Counter tops (Postform, Artificial marbles, Engineered stones)
From counters made with HPL
to acrylic resin Artificial marbles andengineered stone made with natural
crystals, we have an extensive line-upof the major counter materials sought inarchitectural settings.

Boards, films, etc. (AICAPOLY, ALTYNO)
Decorative boards, which are
plywood with a decorative surface
created with polyester resin, etc., areused predominantly for furniture andwall surfaces. Architectural films areused mainly on wall surfaces and forfittings.

Foundations Supporting AICA

Main Products

Noncombustible decorative panels (ARDICA, LUNALITE, MACE, MOISS)
Noncombustible panel for wall whose
main constituents are inorganic raw
materials. They include wall finishingmaterials made by decorating calcium
silicate boards with resin or sheets,
extruded cement panels for exterior walls,
and interior wall materials with humidity
regulation and deodorant properties.

Fittings, Interior Housing Materials
Finished products such as doors,sliding doors, storage, and toilet
booths made with materials suchas HPL and decorative boards. Ourstrengths lie in the abundant range ofcolors and patterns that only a material
manufacturer can offer, as well as ouruniversal design.

AICA Group CSR Report 201924

AICA’s CSR Activities

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 thefoundations that will support our CSR activities and to make continuous improvements and enhancements to those foundations.

Frameworks for Promotion of CSR
Promotion Organization

Risk
Management

About AICA
Improvement/
reformpromotion

Details

Objectives

Managing DivisionCorporate Ethics Committee

P. 33

Promotion of compliance, investigation of inappropriate conduct and corrective action

PresidentInternal Control Committee

P. 30

Establishment of internal controls, maintenance and improvement of their effectivenessBusiness Continuity Plan (BCP) Committee

P. 36

Development of Business Continuity Plan (BCP), improvement guidance, training

Security and Trade Control Committee-

Establishment and auditing of and education about export control frameworks

Information Management Committee

P. 35

Information Disclosure Committee-

Management of timely, appropriate, and fair disclosure of corporate information

1

Promotion of CSR activities, penetration within company, strengthening of ESG measures

Corporate Planning Department

C&C Promotion Committee

2

Small-group kaizen activities, consideration and implementation of measures aimed at theachievement of divisional targets

Quality Assurance Department

QEO Committee

3

Promotion of quality (Q), environmental (E), and occupational health and safety (O) activities

Quality Assurance Department/
Safety and Environment Department

AICA’s Vision

P. 38

Formation of foundations that will allow diverse personnel to participate actively

Human Resources Department

Work Style Reform Promotion Project

P. 39

Reduction of excessive working hours, workplace culture reform

Human Resources Department-

Promotion of equipment automation, improvement of productivity

Production Innovation GroupCSR Promotion Committee
Constituent divisions

Major matters handledFoundations Supporting AICA

Corporate Planning Department

Management strategy, public relations and investor relations

Safety and Environment Department

Environment and occupational health and safety

Purchasing Department

Supply chain

Human Resources Department

Sociality

General Affairs Department

GovernanceResearch and Development Division
Sales Administration Division

Development and sales expansion of AS Products to solve
social issues

Overseas Business Group

Extension of CSR to overseas Group companies

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 scientificapproaches, to consider ways of achieving operational improvements and implement division
policies.
A C&C Convention is held every year, at which awards are presented to outstanding circles andcase study presentations are given. In this way, effective ways of pursuing small-group activities
and kaizen know-how are shared among the Group. At the FY2017 and FY2018 Conventions,some excellent case studies were presented by the sales and back-office divisions. Prior to that,neither of these divisions had been very advanced in their activities, but their performances atthese two conventions gave people in a variety of positions the opportunity to make discoveries.
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 “zeromistakes” 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 forthe achievement of management goals,” which has been passed down to today’s C&C activities.

25

President

Diversity Promotion Project

Cross-divisional committee managed by
the Corporate Planning Department. Works topromote CSR activities and penetrate them within
the company.
The individual divisions take charge of thematerialities decided in this committee andundertake activities to achieve their KPI targets.

2

Legal Department
Corporate Planning Department

CSR Promotion Committee

Equipment Automation Project1

Management and protection of corporate confidential information

President
Corporate Planning Department

AICA Group CSR Report 2019

3

QEO Management System

This is a management system that operates with a trinity of quality (Q: ISO 9001), environment (E: ISO 14001) and occupational health andsafety (O: OHSAS 18001). As well as complying with laws and regulations, under this system, we conduct risk hedging and kaizen 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 managementfoundations from the perspectives of both risk and opportunity.

About AICA● QEO Group Representatives Meeting

This is a committee that promotes
the implementation of the QEO
Management System. Managed by
the Quality Assurance Department
and Safety and Environment
Department, this committee acts
toward the achievement of QEO
policies.

The QEO Committee acts as secretariat and holds
semi-annual meetings that are attended by AICA’s top
management (President, Directors, and Auditors) andrepresentatives of Group companies in Japan andoverseas.
As well as confirming QEO achievements and the statusof improvements at individual Group companies, themeeting’s attendees exchange information by sharing casestudies, and discuss and decide on countermeasures.

AICA’s Vision● QEO Committee

Foundations Supporting AICA

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 havea 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 201926

AICA Group’s Materialities

Materialities and KPI
ESG

Key Issues for AICAThe AICA Group began selecting materialities (key issues) in FY2016. In May 2018, we reviewed
the materialities, with reference to various guidelines.

G

Corporate Results(Economic Performance)

G

Corporate Governance

Progress is managed by the CSR Committee and QEO Committee, pursuing outcomes acrossthe entire AICA Group.

ESG

Process for selection of materialities
About AICASTEP 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

AICA’s Vision● The potential materialities are assessed from the dual angles of theperspectives 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.

Management
Foundations

Integration of Management
and CSR

ESG

Strategic roll-out of CSR in
overseas sites

SG

Human Rights Code of
Conduct and human rights
education

ESG

Thorough implementation ofcomplianceS

Improvement of employee
satisfaction

S

Enhancement of humanresources development
and education and training
programsS

Human
resources

Promotion of work-life balance

STEP 3 : Prioritization of materialities● The top-ranking issues from both stakeholders’ perspectives and company
management perspectives are provisionally decided as key issues.

STEP 4 : Finalization of materialities

Major

S

Improvement of occupational
health and safety

ES

Development andpopularization of AS products

Prevention of global
warming

Corporate Governance
Reduction of water
usage

Environment

Product Liability

Thorough implementation ofcompliance

Enhancement of human resources development
and education and training programs
Improvement of customer
satisfaction
Strategic roll-out of CSR in overseas sites(community contribution)
Improvement of occupational
health and safety

Prevention of global warming

E

Reduction of industrial waste

Human Rights Code of Conduct andhuman rights education
Promotion of responsible care

Integration of Management
and CSR

E

Reduction of industrial waste

E

Reduction of water usage

E

Promotion of responsible care

S

Improvement of customer
satisfaction

ES

Raise value through value
chain collaboration

Development and popularizationof AS products
Raise value through value chain collaboration
Improvement of employee
satisfaction
Promotion of work-life balance

Diversity of human resources and equal
opportunity
Communicating with Shareholders and Investors

MediumSmall

Diversity of human resourcesand equal opportunity

Economic performance (corporate results)

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

● The suitability of the selected material issues is discussed and approved in theManagement Meeting and the issues that are ultimately at the top of the list are
finalized as the materialities.

S

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

Stakeholders

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

27

AICA Group CSR Report 2019

*1 Excluding corporate results, excludes new consolon April 1, 2015, as of April 1, 2018. *5 For leaveproduction sites in Japan. *8 Target scope is AICAFY2018
Target*1

Achievement

FY2019Target*1

Evaluation

Page

Sales: 185 billion yen
Ordinary profit: 21 billion yen

Sales: 191.3 billion yen
Ordinary profit: 21.2 billion yen○

Sales: 200 billion yen
Ordinary profit: 22 billion yen

P. 11 -

Incompletion of Improvement of matter for internal
control correction: 0

0○

Incompletion of Improvement of matter for internal control
correction: 0

P. 29 -

Stated○Implemented○

Clear statement of ESG Promotion in company’s
annual policies
All Japanese sites: Oncea yearCSR Study Groups
All overseas sites: Oncea year

Incorporation of materialities and management of theirprogress in individual departments’ actions plans*2-△

Implemented
English, Chinese, and Indonesianversions produced and published on
website○Translation of Code of Conduct into multiple languages(Thai and Vietnamese versions produced and published on
website)Implemented○

Implemented○

Compliance training
At least 18 sites a year, for at least 400 people(All production sites and Japanese sales sites)
Read Code of Conduct and Action Guidelines together
All sites: Once a year

Employee turnover rate within three years of joining
company: 10% or less *2, *3

13%*4

×

Employee satisfaction survey conducted *2

Development of new educational system*2

Systematization and disclosure of current
educational programs×

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

60% or more

61.7%

○

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

20% year-on-year
decrease

Increase compared to previous year

×

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

Rate of women
employed *2

At least 30% of career
track recruits by FY2019

Joined April 2019: 25%(Joined April 2018: 35%)×Percentage of women among new-graduate career track
recruits joining in April 2020 *2: At least 30%

Employment of people
with disabilities*2

Percentage of people withdisabilities: At least 2.2%

Percentage of people with disabilities:
2.26%

○

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

Lowering of industrial
accident frequency rate *7

Half or less of national
average for all industries

Frequency rate: 0(National average for all industries: 1.66)○

Lowering of industrial accident frequency rate *7
Less than national manufacturing industry average (Last FY:
1.20)

P. 40 -

13.3 billion yen (Target achievement rate:
94.2%)(Year-on-year: 113.1%)

×Value of sales of AS products *2: At least 15.5 billion yen(Year-on-year: 116 %)P. 17 -Developed○

Greenhouse gas emissions *6, *7 3% year-on-year reduction

P. 43 -

4% year-on-year decrease○

Developed○

Industrial waste emission volumes*6, *7
2% year-on-year decrease

P. 46

2% year-on-year increase×

Development of medium-term reduction plans *8

Developed reduction targets for FY2019.
Separate reduction plan proposed for
Isezaki Plant, which has excessive water
usage

△

Water intake: 1% year-on-year decrease *8

P. 47

Environment-related litigation or administrative
penalties: 0

Environment-related litigation or administrative penalties: 0

P. 48

Compliance training
At least 15 sites a year
(All production sites and Japanese sales sites)
Read Code of Conduct and Action Guidelines together
All sites: Once a year

Greenhouse gas emissions *7
Develop medium-term reduction measures for eachsite
Greenhouse gas emissions *6, *7
3% year-on-year decrease
Industrial waste emission volumes *7
Develop medium-term reduction measures for eachsite
Industrial waste emission volumes *6, *7
2% year-on-year decrease0○

Customer satisfaction *2
2% year-on-year increase (At least 4.25/5)

4.22 (up 1%)

×

CSR surveys and site inspections conducted ofsupplier companies *2

CSR survey conducted of 82 companies(valid responses from 79 companies)
On-site audits conducted of 15 of thosecompanies.

○

Development of BCP at all Japanese sites and two
overseas sites

Implemented○

Conduct training at all sites with completed BCPs (allJapanese sites, 2 overseas sites)

Implemented○

Conduct training at sites with completed BCPs

Quality-related litigation or administrative penalties: 0

0

○

*2

14 collaborations○

Collaborations with local activist organizations: 13 or more

Implemented○

Hold IR events for individual investors: 3 times or more

Collaborations with local activist organizations: 13
or moreRevamp of IR website
Hold small ESG meetings: At least once

Implemented○

Conduct and analyze customer satisfaction survey and poseissues *2
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 basedon flood damage scenario at four Japanese sites with a highflood risk, specify water risks at overseas sites

Conduct education aimed at raising standard of quality control

Hold small ESG meetings: At least once

P. 37 -

Foundations Supporting AICA

Value of sales of AS products *2: At least 14 billion yen

P. 33 -

AICA’s Vision

Improvement inpercentage of paid leave
taken: *2, *5
Reduction of overtime
worked *2

About AICA

Partially implemented

Appointment of CSR promotion officer at main Group
companies

Disclosure of Code of Conduct and translation into
multiple languages

SDG Response

P. 50

P. 51

P. 36

P. 53
P. 52

idated results in the year under review. *2 Target scope is AICA Kogyo Co., Ltd. only. *3 Total of new graduate (undergraduate and post-graduate) recruits. *4 Percentage of new recruits
granted on September 16, calculated from leave taken between September 16 of previous year to September 15 of current year. *6 Revenue intensity. *7 Target scope is AICA Group
Group production sites in Japan, excluding AICA Tech Kenzai Co., Ltd.

AICA Group CSR Report 201928

Management Foundations
Corporate Governance
Basic Policy on Corporate Governance

About 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.
We have chosen to be a company with a Board of Auditors. The
Board of Directors decides on management policies, matters requiredby law, and other important matters concerning the managementof the Company, and strives to enhance corporate governance bysupervising the execution of the company’s operations. To stimulate
debate and ensure the transparency and objectivity of management,
the Board of Directors consists of six internal directors who have athorough knowledge of the company’s operations, as well as two
external directors who bring their independence, objectivity, andexpertise to the Board.

With the internal directors holding responsibility for key executivefunctions, from June 2018, it was decided that they would serve
concurrently as executive officers. By clarifying the segregation ofduties of the executive officers in their executive functions, we are
striving to further speed up the execution of operations.
The Board of Auditors consists of four auditors, two of whom arefrom outside the company. This body conducts audits of the executionof duties by the directors and of the operations and financial situationof the Group as a whole.
Further, in April 2016, we established a Governance Committee
as a voluntary advisory committee. The external directors are themain members of this committee, which aims for the sustainable
development of the company and the further enhancement ofgovernance functions.

●Corporate Governance Structure and Internal Control Systems (as of June 26, 2019)

AICA’s Vision

General Meeting of Shareholders
Appointment/
Dismissal

Appointment/
Dismissal

Appointment/
Dismissal

ReportAudit

Accounting Audit

Board of Auditors

Board of Directors
Internal Control Audit

AdviceExternal Counsel

29

AICA Group CSR Report 2019

Selection/Removal

Representative Director
Management Meeting
Management Promotion Meeting

Accounting Auditor

Corporate Ethics Committee

ReportInternal Control Committee

Governance Committee

ReportInternal Audit Policy
Internal audit,
including internal control

ReportReportFoundations Supporting AICA

CoordinationEffectiveness of the Board of Directors
In order to verify the effectiveness of the Board of Directors, since

generally functioning appropriately and that its effectiveness is being

January 2017, we have conducted an annual survey of all directors

ensured.

and auditors regarding the structure, operation, and agenda of theOn the other hand, the survey also confirmed that the Board of

Board and the Board’s support structure. The effectiveness of the

Directors faced challenges in the areas of deliberation of appointment

Board is evaluated on the basis of the results of this survey. In theand dismissal of management executives, further improvement in thesurvey conducted in January 2019, responses of “appropriate or

quality of briefing materials for the Board meetings, and the diversity

reasonably appropriate” were obtained for all matters surveyed. Theof the Board’s composition. We will embark on improvements in these

Board’s active deliberations were also highly commended. Based on

areas to further improve the effectiveness of the Board of Directors.

this positive feedback, we confirmed that our Board of Directors isto the internal control evaluation reporting system for financial

AICA Group has adopted a Basic Policy for Establishment of Internalreporting under the Financial Instruments and Exchange Act. The

Control Systems. Under this policy, the Group is working to reinforce

main committee members in charge of four major control processes

the supervisory functions of the Board of Directors, risk management

conduct maintenance management and self-inspection. Meanwhile,

structures, and the creation of systems to improve the effectivenessthe Internal Audit Office conducts separate internal audit assessmentsof corporate compliance. The Internal Audit Office assesses theto maintain and improve the reliability of our financial reporting.

status of development and operations in these areas through auditing

Each year, the Office reports to the Internal Control Committee on theactivities and interviews with the relevant departments, to confirm

status of internal control in the previous year, based on the financial

the effectiveness of the Company’s internal control systems. We

reporting under the Act and obtains approval for the current year’s

have also established an Internal Control Committee to respondactivity plans.

AICA’s Vision

In compliance with the Companies Act, the Board of Directors of the

About AICAInternal Control Activities

Directors’ Remunerationindividual directors is examined by the Governance Committee,

remuneration and variable performance-based remuneration. The

whose main members are the external directors, to ensure objectivity

criteria and methodology for evaluation of performance-based

and fairness. From the perspectives of their roles and independence,

remuneration, its percentage of total remuneration, and other

remuneration of external directors and auditors consists solely of

relevant matters are published in the Annual Securities Report.

basic remuneration.

The appropriateness of evaluations and remuneration amounts for

AICA Group CSR Report 2019

Foundations Supporting AICA

Remuneration of company directors consists of a fixed basic

30

Directors and Auditors

About AICA
AICA’s Vision
Foundations Supporting AICA

(10)

(8)

(6)

(7)

(9)

(12)

(11)

(4)

31

AICA Group CSR Report 2019

(2)

(1)

(3)

(5)

● Board members (As of September 2019)
Directors (8 male, 0 female)
Name

Auditors (4 male, 0 female)
Position

Name

Representative Director and President(1) Yuji Ono(3) Yukihiro Iwase

Director and Senior Managing Executive Officer
Head of the Construction Materials Company/
Executive Manager, Sales Administration Division(4) Nobuyuki Omura

Director and Managing Executive Officer
Head of the Chemical Products Company/Deputy
General Manager, Sales Administration Division
Director and Managing Executive Officer
Responsibilities: Production/Purchasing Dept./
Safety and Environment Dept.

(6) Kenji Ebihara

Director and Managing Executive Officer
Head of the Specialty & Performance Materials
Company(7) Kenji Ogura

External Director(8) Toshiiku Hanamura

External Director

Full-time Auditor(10) Hisashi
Kosemura

Full-time Auditor(11) Kiyoshi
Katagiri

External Auditor(12) Shoji
Miyamoto

External Auditor

AICA’s Vision(5) Ryoji Mori

(9) Terutoku
Iwata

About AICA

(2) Satoshi Toudou

Director and Senior Managing Executive Officer
Responsibilities: Financial Administration
Department/Corporate Planning Dept./Logistics
Dept./Business Management Dept./Information
Systems Dept.

Position

The reasons for the appointment of external directors and external auditors are as follows.
Name

Reason for Appointment

Kenji Ogura has extensive experience
External Director

Kenji Ogura

and knowledge as a corporate(Independent

executive, which we believe he will be

Director)able to leverage in enhancing AICA’s
management structures.

Toshiiku
External Director

Hanamura(Independent
Director)

Toshiiku Hanamura has extensive
experience and knowledge as an
attorney, which we believe he will beable to leverage in enhancing AICA’s
management structures.

Reason for Designation as Independent Director

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

Foundations Supporting AICA

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

Kiyoshi Katagiri has many years
External Auditor

Kiyoshi Katagiri

of experience and knowledge as(Independenta corporate executive, which we

Director)believe he will be able to leverage inenhancing AICA’s audit structures.

subsidiaries, major shareholders, or major trading
partners, he has no particular stake in AICA, andwe believe that no conflict of interest with generalshareholders would arise. For these reasons, he has
been designated as an Independent Director.
He owns 300 shares in AICA, but we do not believe
this qualifies him as a major shareholder.

Shoji Miyamoto has expert knowledge
External Auditor

Shoji Miyamotoand experience as a certified public(Independentaccountant, which we believe heDirector)

will be able to leverage in enhancing
AICA’s audit 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, andwe believe that no conflict of interest with generalshareholders would arise. For these reasons, he has
been designated as an Independent Director.

AICA Group CSR Report 201932

Compliance
Basic Thinking on Compliance

About AICAThe AICA Group is firmly committed to complying with local laws
and regulations and conducting its business activities ethically at allof 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 Behavioral Guidelines,
which set out specific standards for conduct in accordance with theCode of Conduct.
To raise awareness about compliance among employees, we use
the AICA Group Code of Conduct and Action Guidelines to holdannual training in individual workplaces at all of our sites in Japan andoverseas, including Group companies. In this training, we thoroughly
instill in our employees a consciousness of the positioning of theCode of Conduct and Behavioral Guidelines and the significanceand necessity of compliance. We confirm employees’ understanding
through training reports that list the names of all attendees, and we
also confirm any requests made by employees.
Further, the Corporate Ethics Committee, Legal Department,Internal Audit Office, Safety and Environment Department, and Quality
Assurance Department play a central role in traveling around to allof the sales offices, plants, subsidiaries, and other sites to conductharassment education, including for managers, and compliancetraining for operational staff, and to educate employees about theimportance of compliance. Any issues discovered in the course of
these visits are incorporated into improvement activities throughout
the entire company.

● Training conducted in FY2018● AICA Group Code of Conduct Basic Principles

AICA’s Vision

Compliance training
at individual sites

Training for sales offices
Training for factories
Training for subsidiaries

10 times/year
21 times/year
13 times/year

Compliance trainingby 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[6] Proper information disclosure[7] Employment, labor andemployer - employee
relationship[4] Fair trade[8] Protection of company
information and property[5] Reassurance and trust ofcustomers[9] Environment and safety

Respect for human rights
Foundations Supporting AICAThe AICA Group supports and respects international norms
concerning human rights, such as the Universal Declaration of
Human Rights, the ILO Declaration on Fundamental Principles andRights at Work, and the UN Guiding Principles on Business andHuman Rights. The AICA Group Code of Conduct clearly states ourguidelines regarding respect for human rights to fulfill our corporate
responsibilities.

We have established work rules that are compliant with the lawsof 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 forced labor. When we employ newworkers, we ask them to present ID to confirm their age, to preventchild 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, andimplementation of corrective action in the event of a whistleblowing
report being made to the internal whistleblowing hotline, Corporate

33

AICA Group CSR Report 2019

Ethics Committee Window.
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 thesenior executive and the auditors on a regular basis.

Internal Whistleblowing System
To ensure that potential risks of breaches of workplace morals, suchas infringements of laws and company regulations, bribery andcorruption, 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 ore-mail at any time, without worrying that they themselves will bedisadvantaged for having done so. Anonymity is assured in thissystem, so anonymous whistleblowing reports are accepted.

● Concept diagram: Corporate Ethics Committee and whistleblowing system
Corporate Ethics Committee

Corporate Ethics
Committee Window
Internal hotline
Law firm

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

Corporate lawyer (observer)[Roles]About AICA

President

Responsible for Financial
Administration Department(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 Window to the Corporate Ethics Committee and/or cases that single
Group companies are unable to solve.

Employees*Number of cases brought to Window to the Corporate Ethics Committee in FY2018: 10

AICA’s Vision(3) Deliberation and proposals regarding the application of disciplinary action in the eventof problems that arise from a compliance perspective

Anti-corruption Policy‘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 incorruption. Training is held every year for individual workplaces at allof our sites in Japan and overseas, including Group companies, using
the Code of Conduct.

Foundations Supporting AICA

AICA Kogyo endorses the 10 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, to be corruption, weare committed to the prevention of all forms of corruption, including
bribery to or from government officials or suppliers, embezzlement,money laundering, and obstruction of justice, or forcing others tocommit such acts.
We have put this policy into writing in the form of the document,

Additional information about compliance is available on the AICA Kogyo website.
http://www.aica.co.jp/company/environ/compliance/

AICA Group CSR Report 201934

Risk Management
Basic Thinking on Risk Management
To ensure the mitigation of losses due
to unforeseen circumstances, certain
departments have been assigned to● Risk Management Rulens and other related rules
Regulation

Details

address the various risks surrounding

Risk Management Rules

Response in the face of a management crisis

the management environment. The

Earthquake and Disaster Prevention Rules

Response in the event of earthquake disaster

necessary rules and guidelines haveWind 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 or environmental problem

Reports on risk assessment are madeInformation Management Rules

Response in the event of a leak of confidential information

regularly to the Board of Directors andAction Plan for New-strain Influenza
Countermeasures

Response in the event of an outbreak of a new strain of influenza

been established and risk management
is conducted through the procedures
About AICA

for approval via circulation of proposals.

Board of Auditors.

Security and Disaster Preparation
The AICA Group uses many hazardous substances as raw● Major initiatives in FY2018

AICA’s Visionmaterials or in supplementary ways to create useful products. Any
mistakes in the handling of these hazardous substances would causea major accident, which would have major impacts on the health of
employees, the functions of production equipment, and the local
community.

AICA Kogyo Co.,Ltd.
Jimokuji Plant

In December 2018, disaster preparation training was
conducted based on a scenario of a fire breaking out
on the first floor of the JOLYPATE plant. The training
included rescue training and water-hose training, using
the vehicles of the Ama East Fire Department of Ama
City, Aichi Prefecture.

AICA Tech Kenzai
Co., Ltd.
Ichikawa Plant

In June 2019, evacuation training and water-hosetraining was conducted based on a scenario of a firein a utility area. The training highlighted issues with
evacuation speed and communication frameworks andimprovements are planned.

Individual production sites partner with local fire departments to
conduct disaster preparation training.

Foundations Supporting AICA

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, and strives to strengthen
its information security frameworks.
Regarding personal information, which involves the privacy of
our customers, we have reviewed our management categories andsecurity rules and reflected that review in the Information Management

Regulations.
We have also developed a response manual that is put into practicein the unlikely event of an information leak.
We are also striving to instill in our employees a firm consciousness
of information management through initiatives such as internal
information security audits, which are designed to confirm 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.
● The security level of external networks has been diagnosed by second
parties (interested parties, security management subcontractors)
and assessed as being without problems.
●
We conduct information security audits of our major systems
development subcontractors to confirm the state of their information
security implementation and management.

35

AICA Group CSR Report 2019● Data on laptop computers that can be taken out of the company
is encrypted and the laptops have also been connected to secure
networks.
● Updates of anti-virus software and security patches are sent to PCs.
● We have installed and run core servers in our data center, includingfor BCP-based responses.
● We reinforce information management through a full-scale ban on
the use of USB memory sticks on PCs connected to the company
network.

Business Continuity Plan (BCP)The AICA Group has formulated a Business Continuity Plan (BCP)
with the objectives 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, the Group implements a rangeof responses at times of emergency.

The Great East Japan Earthquake Disaster of March 2011 prompted the establishment of the BCP Committee, which has engaged informulating BCPs, as well as playing a central role in strengthening
disaster preparation measures. BCP development began with the key
production sites in Japan and overseas, and those sites that havecompleted their plans conduct regular training.

● Major initiatives regarding BCP in FY2018
Name of site

Location

Jimokuji Plant

Ama, Aichi Prefecture

Tanba Plant

Tanba, Hyogo Prefecture

Isezaki Plant

Isezaki, Gunma Prefecture

AICA Interior Kogyo Co., Ltd.

Komaki, Aichi Prefecture

AICA Tech Kenzai Co., Ltd.

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

AAPH Group

Singapore, etc.

Kunshan AICA Kogyo Co., Ltd.

Kunshan, Jiangsu Province, China

Reconfirmation of matters for implementation in Phases 0 and 1 (stages fromdisaster striking to decision for BCP-based response), confirmation of importantmatters (key persons in supply chain, etc.) in Phase 2 (alternative production stage)

Drill-down of previous training (Phase 2: Recovery stage), making use of lessons
from Hiroshima flood damage

Sites that have completed their BCPs have drawn up initial response lists (to-do
lists containing the things that each individual department should do at eachphase), and conducted confirmation training.

AICA’s Vision

Kiyosu, Aichi Prefecture

About AICA

Nagoya Plant

Details

Hiroshima floods
Foundations Supporting AICA

AICA Kogyo’s Hiroshima Plant sustained severe flood damage due
to torrential rainfall in the region in July 2018. After the disaster, theplant’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 all of their efforts
into restoration of operations, under the direction of the President of
AICA Kogyo. As a result, on July 21, just two weeks after the floodingon July 6-7, production of some products was resumed, and from
September 3, about two months after the disaster, 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 businessperformance to a minimum.
Taking lessons from this disaster, we will enhance and extend ourBCP based on a scenario of flood damage, conduct training in linewith that plan, and develop frameworks that will enable sites to put
the plan into action with certainty in the event of a disaster or accident.

Photo taken July 7, 2018
Flooding

Photo taken July 12, 2018
Warehouse after floods receded

AICA Group CSR Report 201936

Human resources
Labor-management relations
Basic Thinking on Labor-Management Relations
The AICA Kogyo Labor Union was formed in May 1946 and has

negotiations, to exchange views about management policies, theremained active since then. The union is a partner and excellent

progress of the mid-term management plan, the general situation in

supporter of the company that has shared in the joys and sorrows ofindividual businesses, and the various programs and schemes.

AICA Kogyo for many years. The company cherishes the relationship

Based on the Code of Conduct, AICA sites in the various countriesof trust that it has built up with the union and has maintained favorable

and regions also respect freedom of association, the right to organize,labor-management relations.

and the right to collective bargaining as the rights of employees,

To deepen mutual understanding, the top three executives of theunion and the Human Resources Department hold meetings onceand strive to build favorable relations with employees through close
communication.

About AICA

a month to exchange information. The union also meets with top
management several times a year, including at labor-management

Employee survey
As social values have become more diverse, how employees who

indicates the degree of employees’ satisfaction with the company,

work at a company think about that company and their mindset

was “slightly higher” than the average for common companies, both

toward working have changed and diversified.

in the 2016 and 2019 surveys. Of course, there were variations in

AICA’s Vision

Recognizing that employee awareness surveys are vital to thethe results according to age group and occupation. We will analyze

further growth and development of the company, we ask an external

the details of these findings and incorporate them into our variousorganization to hold such surveys on the company’s behalf on apolicies, including our human resources programs. We will also holdregular basis. Following on from the last survey in 2016, a survey wasregular surveys into the future and implement measures to raise

conducted in July 2019.

employee satisfaction from a medium to long-term perspective.

The survey company reported that “General Satisfaction,” which

Foundations Supporting AICA

Human resources development
Basic Thinking on Human Resources Development
AICA Kogyo nurtures people who have a strong awareness ofand raise our corporate value, we are placing efforts into humanpersonal growth and their futures, and who strive forcefully toward

resources development that will allow every individual employee to

the Corporate principle of “Creation & Challenge.” Recognizing that

demonstrate their strengths to the fullest.

employees are an important presence who will transform the company

Training Schemes
A variety of human resources programs are available. They include
follow-up programs for prospective employees to grade-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 and act forthemselves. This program is conducted over a period of 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 the new employees.

37

AICA Group CSR Report 2019

We are also focusing efforts on the development of global humanresources. This entails the incorporation of language training inthe second and third years of the new recruit training, as well as
opportunities to experience meetings with overseas subsidiaries
via video teleconferencing systems. We have also established anoverseas trainee scheme, which provides opportunities to workoverseas, such as being dispatched to overseas subsidiaries.
We have also established correspondence education schemes
and schemes for obtaining public qualifications, and we support
employees’ individual study endeavors by covering costs andgranting bursaries.

● Training framework
Prior to joining

Grade-based
training

Correspondence
education prior
to joining thecompany

General gradeMid-level grade

Manager grade

2nd-year training

Mid-level grade training

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

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

Mentor training 3rd-year training

New manager training

Global Human Resources Development
Occupationbased grouptraining

Sales skills enhancement training

Plant manager
training

Production division skills training

Next-generation executive
training

Compliance education

About AICA

Workplacetraining

Labor management education
Quality, safety, and environment education

Selfdevelopment
assistance

Skype English
Correspondence education

Assistance toobtainqualifications

Hazardous materials engineer/Health and safety manager/Adhesives management engineer/
Forklift operator/Construction project management engineer/TOEIC, etc.

AICA’s Vision

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

Diversity / Work-life balance
We promote diversity in response to the globalization of business andthe diverse needs of the market. In the area of women’s participation inparticular, we launched a Women’s Participation Promotion Project inJune 2013 and have focused efforts on initiatives and the developmentof an environment in which the power of women can be put to use
in the management of the company. These efforts were recognizedin January 2016 with the receipt of an Award for Excellence in the

Nagoya City Women’s Participation Corporate Certification and Awards
Scheme, which is hosted by the City of Nagoya.
The name of this initiative was changed to the Diversity Promotion
Project in FY2018 and we are working to promote the establishmentof foundations in which more diverse personnel can participate actively
in the workplace.

Foundations Supporting AICA

Basic Thinking on Diversity and Work-life Balance● Certification Status
Certification as Company Promoting Women’s Participation by City of
Nagoya (January 2016)“Kurumin” certification from Ministry of Health,
Labor and Welfare

The “Kurumin” certification is a program that certifies
companies engaged in initiatives to allow women toshine in their organizations and that presents awards
to companies 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 are able to use
the “Kurumin” logo on their advertising, products, andother 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 new-graduate
career-track positions: 30% or more

Current status (as of March 31, 2019)29.0% (average of new recruits for April 2016 - April 2019)

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

3.2% (7 female managers of a total of 217 managers)[3] Rate of recruitment of people
with disabilities

2.3% or more

2.26%

[4] Cultural reform

Percentage of annual paid leave taken: 70% or
morePercentage of annual paid leave taken: 61.7%

AICA Group CSR Report 201938

Expansion of work-life balance assistance scheme
At a time when both spouses workin a growing number of households,
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

About AICA

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 ofscheme forshortened working
hours for workers
with small children

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 year of elementary school.
This has made it easier for employees to use the scheme to suit their personal circumstancesand enabled them to overcome the “1st-grade barrier.”

Revision oftime-shift working
hours scheme

The period in which this scheme, which allows eligible employees to shift their start and 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 it easier for those employees to work
full-time.

Re-employment Scheme, Employment of People with Disabilities

AICA’s Vision

The Revised Act on Stabilization of Employment of Elderly Persons
mandates the provision of employment opportunities up to the ageof 65 years. Parts of the Act were revised on April 1, 2013 against abackground of the sharp progression of Japan’s declining birthrate
and population aging.
With the aims of responding to these legislative revisions, raising
employee motivation, and guaranteeing their lifestyles, we have mademajor revisions to our Re-Employment Scheme. We will continue todevelop an environment in which our employees can work with peaceof mind.
Further, with the aim of ongoing employment of people with disabilities,
we have identified the types of work that people with disabilities 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
we employ, we will continue to engage actively in measures such as
recruitment interview sessions for people with disabilities.

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

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

FY2016FY2017FY2018March 31, 2017

March 31, 2018

March 31, 2019

16

18

27

17

21

22

Foundations Supporting AICAWork Style ReformAs the issue of excessively long working hours has become asocial problem and the entire nation is pursuing work style reform,
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 longhours. Initiatives include “No Overtime” days and the reduction of
overtime. Through C&C activities ( See page 25), we are making
improvements to equipment and operations, pursuing a shift to multiskilled workers, and striving across the entire company to reform
operations to cut down on long working hours. We are also promoting
scheduled taking of paid leave and the enhancement of our childcare
and nursing care assistance schemes.

● State of paid leave consumption at AICA Kogyo Co.,Ltd.
FY2016FY2017FY2018Average days taken

8.2 days

10.3 days

11.3 days

Average rate of leave taken

45.0%

56.0%

61.7%

* Target period
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.

Additional information about diversity is available on the AICA website.
http://www.aica.co.jp/company/environ/resource/

39

AICA Group CSR Report 2019

Occupational Health and Safety
Basic Thinking on Occupational Health and Safety
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 workplace safety.
We recognize that our business activities also have an impact on thehealth and safety of contractors who work on our sites and residentsof the surrounding area, and we are striving to maintain the healthof stakeholders and to improve the safety of our workplaces andsurrounding environments.
Pursuant to the Industrial Safety and Health Act, we haveestablished Health and Safety Committees at each of our sites. Basedon environmental measurements and the findings of environmental
diagnoses, we investigate and deliberate on important matters thatwill form the foundation of measures for mitigating risks to workers
and impediments to health.
Membership of the Health and Safety Committee is comprised ofmanagers and labor union members in equal numbers. Contractors
who work on site are also included in meetings, and efforts are being
devoted to further invigoration of communication.

of the safety management frameworks for partner companies
working on our premises, where there has been a tendency toward
more frequent industrial accidents in recent years, and the various
challenges and countermeasures were shared.
On the factory floor level, KYT (kiken yochi kunren or risk prediction
training) activities, hiyari-hatto (near-miss) activities, and risk-source
improvement activities are conducted in the small-group activities
P. 25). To enhance these low-key, steady efforts,(C&C activities
from FY2018, the KYT activities being undertaken by the individual
small groups are now being assessed under a point rating system.
Pursuing improvements so that training is not just a formality, but will
be something meaningful that leads to greater awareness of safety,
we are striving to eliminate industrial accidents.

AICA’s Vision

To 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 has a safety theme at all workplaces. The AICA
Group Occupational Health and Safety Convention also takes placeon this day. At the FY2018 Convention, in addition to reconfirming thefacts of past industrial accidents, recent trends were analyzed and it
was confirmed that prevention measures would be strengthened fromthe dual approaches of safety awareness education and machineryand equipment improvements, including automation. At the plant
manager training conducted after the convention, discussions were
held regarding the role of managers and measures for strengthening
communication to raise safety awareness. There was also discussion

About AICA

Prevention of Industrial Accidents● Industrial Accidents Situation
All AICA Group production sites in Japan

Note: Due to certain errors in the contents of the FY2017 Report, some figures have been amended.

Number of industrial accidents(accidents)

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

20

18

17
15

14

13
4

5

10
7

7

5

3

8
0

0

10

6

2

2
1

2014
2015
2016
2017
2018 (FY)
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

FY2014FY2015FY2016FY2017FY2018

Fatal accidents

0

0

0

0

0

Lost-time accidents

0

3

2

7

6

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

0

1

0

3

6

Non-lost-time accidents

7

10

12

10

12

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

0

4

4

4

7

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(accidents)

Foundations Supporting AICA

Target Scope

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

0.10

1.73

1.26
1

0

0.00
0.00
2014

0.84
0.00
2015

0.82

0.00
0.00

0.00
2016

2017

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

0.05

0.05

1.36

2018 (FY)

0

0.00
0.00
2014

0.00
0.00
2015

0.05
0.04

0.00
0.00

2017

2018 (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 201940

● Major initiatives in FY2018

About AICA

Occupational
Health and Safety
Convention

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

Plant manager
training

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

Global QEO Officer
Training

Attended by responsible officers at plants, including overseas Group
companies. Discusses improvement measures for areas at high riskof industrial accidents and measures to raise safety consciousness
among end employees.

13th AICA Group Occupational Health and
Safety Convention

Risk assessment / improvement of working environment
Results of measurement of work environment
in all AICA Group production sites in Japan
Applicable measured locations- accumulated total -AICA’s Vision

Risk assessment is a method for discovering potential risks andhazards in the workplace and eliminating or mitigating them. We
conduct risk assessments under internal regulations based on
our Occupational Health and Safety Management System. In theplants, we conduct risk assessment of chemical substances andpursue activities to eliminate and mitigate risk. Working environment
measurements prescribed by law are also conducted regularly in ourefforts to improve working environments.

200
150

156

165

100
50
17 18

0

Management
Category 1
FY2017

Management
Category 2

24

15

Management
Category 3

FY2018Foundations Supporting AICA

Management Category 1: Working environment determined to be managed appropriately
Management Category 2: Working environment management determined to have room for improvement
Management Category 3: Working environment determined to be managed inappropriately

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

Approximately half of traffic accidents last fiscal year involved
young drivers in their twenties. 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 andelevating driving skills.

● Major vehicle accident responses

41(accidents)[1] Improvement of driving skills

We conduct skills classes for young employees and employees who have been involved in
accidents to elevate their driving skills. In addition, their supervisors accompany them on adrive 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 theirawareness and prevent similar accidents from happening again.

[3] Sharing of 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 2019

● Traffic Accidents Situation
Target Scope

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

Trend in number of vehicle accidents(accidents)

60

40

Number of accidents by type in FY2018
Other
18%

31
23

2015

2016

26

22

20

0
2014

2017

2018 (FY)

Reversing27%

While driving
14%
Rear-end collision
23%

Right/left turn18%

About AICA

22

(%)

Mental Health● Major mental health initiatives

Stress checks

Held once a year since FY2016. The results are fed
back to the individuals, and the findings from analysisof 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 emotional health advice
hotline, which is run by an external organization. This
service is widely advertised to employees on thecompany intranet.

AICA’s Vision

In an economic environment of intensifying market competition andrapid 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 thephysical health of our workers, but also their mental and emotional
health.

Regular health check-ups
functions. Since FY2014, the company has covered part of the costof influenza vaccinations, including for family members, to step up
efforts to prevent our workers contracting the flu.

Additional information about occupational health and safety is available on the AICA website.
http://www.aica.co.jp/company/environ/resource/

AICA Group CSR Report 2019

Foundations Supporting AICA

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

42

Environment
Basic Thinking on the Environment
The World Economic Forum, an international organization engaged
in improving world affairs, releases a Global Risk Report every year. In
the FY2018 edition, it reported that “extreme weather events,” “natural
disasters,” and “failure to mitigate and adapt to climate change” hadrisen in the rankings of the risks with the greatest potential to occur
and the greatest potential impact.

The AICA Group recognizes the importance of these risks. In
our determination to realize a sustainable society, we have built
environmental management systems based on ISO 14001 and weare actively addressing the prevention of global warming (action on
climate change) and reducing our environmental impact (action on
resources and pollution issues).

Recognitions of the risks to business

About AICA

Amid growing concerns about global climate change, extreme
weather events, and natural disasters, including rising temperatures
and water shortages, we envisage that the following two phenomena
could potentially have a particularly large impact on the businessperformance 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 is envisaged in the BCP and 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.

AICA’s Vision● All AICA Group production sites in Japan: AICA Kogyo Co., Ltd., AICA Interior Kogyo Co., Ltd., AICA Harima Kogyo Co., Ltd., AICA
Tech Kenzai Co., Ltd.
● All AICA Group production sites overseas: P.T. AICA Indonesia, P.T. Techno Wood Indonesia, Kunshan AICA Kogyo Co., Ltd., Shenyang
AICA-HOPE Kogyo Co., Ltd., AICA Laminates India Pvt.Ltd., AICA Asia Pacific HoldingsGroup, Evermore Chemical Industry Group
Note: From the FY2018 Report, we reassessed actual carbon dioxide emissions figures and the revenue intensity figures for energy input, greenhouse gas emissions, and industrial
waste volumes generated. Regarding the conversion factors used to calculate carbon dioxide emissions, previously, we used fixed figures and emphasized the trends in
reductions due to the company’s initiatives. We have since changed this to location-standard factors in light of the wider range of energy options available. Previously
consolidated revenue, including overseas revenue, was used to calculate revenue intensity. However, in light of the current situation, in which the ratio of overseas revenue
has increased, it was decided to use consolidated revenue for the Group in Japan.

Prevention of global warming (action on climate change issues)
Foundations Supporting AICA

Reduction of greenhouse gas emissions (energy saving)● Basic Thinking
The prevention of global warming is a key issue in the protectionof the global environment. In December 2015, at the 21st sessionof the Conference of the Parties to the United Nations Climate
Change Conference (COP 21), the Paris Agreement was adopted
as a new, global-scale legal framework. Although the United States
announced its withdrawal in June 2017, COP23 took place inGermany in November that year and negotiations on guidelines forthe implementation of the Paris Agreement are ongoing. In Japan
as well, the Long-Term Low Carbon Vision was formulated in March
2017, and initiatives to combat global warming are being pursued.
Japan’s reduction target is a 26% reduction from 2013 levels by 2030
and an 80% reduction by 2050. The AICA Group is also actively
pursuing reductions of greenhouse gases and has declared a targetof reducing emissions revenue intensity by 3% year on year every

fiscal year until FY2030.
Meanwhile, extreme weather events are also increasing on a global
scale. AICA Kogyo has sustained damage several times in recent
years from disasters caused by such events, and we feel keenly thatclimate change is a major business risk. We recognize that making
more appropriate responses is an urgent challenge and we are
actively pursuing reductions in greenhouse gas emissions.
All AICA Group production sites in Japan have produced a Medium
to Long-term Plan for the Reduction of Greenhouse Gases andIndustrial Waste. Under this plan, we are working to achieve ourtargets through (1) improvement activities through the visualizationof energy consumption (reduction of defects, elimination of waste),(2) appropriate environmental investment, and (3) advances inmanagement of energy use and emissions.

● Targets and Achievements
Target Scope

All AICA Group production sites in Japan

FY2018 Targets

FY2018 Achievements

Causes of increase/decrease

Revenue intensity: 3% year-on-year
4% year-on-year decrease
Reduction in defect rates, replacement ofdecrease
51.3 t-CO2/100 million yen revenue obsolete equipment for energy-saving effect51.8 t-CO2/100 million yen revenue or less

43

AICA Group CSR Report 2019

FY2019 Targets
3% year-on-year decrease
49.7 t-CO2/100 million yen revenue
or less

● Major initiatives in FY2018
Company/Site Name

Location

Details

Nagoya Plant

Kiyosu, Aichi Prefecture

・Improvement of heat exchange efficiency of resource recovery boilers (Regular removal of ash stuck towater pipes)
・Improvement of high-pressure air feed efficiency of through flow boilers
・Improvement of temperature control energy of overcoat furnaces

Jimokuji Plant

Ama, Aichi Prefecture

・Improvement of cooling of intermediate Polyurethane products (added during filling process)・Improvement of chiller cooling water

Tanba Plant

Tanba, Hyogo Prefecture

・Improvement of steam pipes in Building D (shift to pipe loop)
・Reduction of low-pressure control drying time

Isezaki Plant

Isezaki, Gunma Prefecture

・Product tank stirrer brine connection ・ Replacement of boilers ・Replacement of compressors
・Reduction of press interval times

AICA Harima Kogyo Co., Ltd. Kasai, Hyogo Prefecture
AICA Tech Kenzai Co., Ltd.

・Reduction of heat loss from naked pipes
・Roll-out of energy-saving measures after external energy conservation diagnosis (electricity, steam)

About AICA

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

・Promotion of switch to LED lighting ・ Improvement of productivity due to reduction of defect rate
・Promotion of power savings in processes

Individual plants and sites● Achievement Trends
Target Scope

All AICA Group production sites in Japan & All AICA Group production sites overseas & AICA Group sales sites in Japan: 22 sales offices(TJ: Terajoules)

2,000

1,829

1,500
1,000
500

913
661

1,179 1,129 1,221 1,208 1,200
971 1,029 252
330

25.1

0

2014

23.9
2015

22.5
2016

22.2
2017

1.25
1.00
0.75

0.90

1.03

44,605

13,9961,548

055,20664,38656,764

63,132

26,917

2014

61,22052,19036,1732018 (FY)(TJ/100 million yen)

54,174

66,18618,001

36,16920,00020.7

49,315

1,508

2015

1,418

2016

1,220

1,300

2017

2018 (FY)■Production sites in Japan ■Overseas production sites ■Sales locations in Japan① Newly consolidated in FY2015 ② Newly consolidated in FY2016 ③ Newly consolidated in FY2018

Trends in greenhouse gas emissions revenue intensity (t-CO /100 million yen)
2

80

1.01

0.97

0.64

60
40

0.50

50.0

57.9

53.4

51.3

2016

2017

2018 (FY)35.1

Foundations Supporting AICA

Trends in energy input revenue intensity

88,13780,00040,000■Production sites in Japan ■Overseas production sites ■Sales locations in Japan① Newly consolidated in FY2015 ② Newly consolidated in FY2016 ③ Newly consolidated in FY2018(t-CO₂)100,000

60,000
1,274

927

641

555

Trends in greenhouse gas emissions

AICA’s Vision

Trends in energy input

20

0.25

0

0
2014

2015

2016

2017

2018 (FY)

Production sites in Japan

2014

2015

Production sites in Japan[Scope 3]
Under Japanese domestic legislation, including the Act on
Rationalizing Energy Use, it is compulsory for companies to manage
their Scope 1 emissions (fossil fuels, natural gas, etc.), which are thecompany’s own greenhouse gas emissions, and Scope 2 emissions(electric power, etc.), which are greenhouse gas emissions caused
indirectly by the company. In recent years, moves have also been
growing to manage the greenhouse gas emissions of suppliers
as Scope 3 emissions (manufacture, transport, business travel,commuting, etc.) and disclose them externally. One such move is the
Carbon Disclosure Project (CDP).
We have been engaged in the identification and calculation of

CO2 emissions from product manufacture since 2006, and we havecalculated our Scope 3 emissions in line with the above-mentioned
trend. As a result, we have learned that the processes with thegreatest impact vary from product to product. We have broadly
identified chemical blend products as the products with the highest
rate of CO2 emissions in raw material procurement processes, andHPL, which require a large number of processes, as having thelargest CO2 emissions in manufacturing processes.
However, because much of the data used in those calculations is old,
calculations for the products of companies that have newly joined theGroup need to be made, and we plan to update these figures in FY2019.

AICA Group CSR Report 201944

Green Logistics● Basic Thinking
Reducing greenhouse gas emissions from transport is anotherchallenge 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 reduce energy
consumption (heavy oil equivalent) per freight metric ton-kilometers(t·km), which is a management index for this area.

● Targets and Achievements
Target Scope

Transport in Japan*

About AICA

FY2018 Targets
Intensity 1% year-on-year decrease
44.13 kl/1 million t·km or less

FY2018 Achievements

Causes of increase/decrease

1% year-on-year decrease
44.12 kl/1 million t·km or lessImprovement of efficiency of cargo collection from suppliers
Expansion of regular freight runs (introduction of regular freightruns from North Kyoto area, Kumamoto area, and Kasai
Logistics Center to Kanto region)

FY2019 Targets
1% year-on-year decrease
43.67 kl/1 million t·km or less

● Achievement Trends
Target Scope

Transport in Japan*

AICA’s Vision

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

50
48
46

46.30

45.07

44.99

44.58

44.12

2015

2016

2017

2018 (FY)

44
42
40
2014

Foundations Supporting AICA

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

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

productivity improvements and product weight reductions, andpursuing changes to our product specifications for replacement of
Substances of Concern with alternative substances.

Management of chemical substances● Basic Thinking
We recognize that reducing the volumes of hazardous chemical
substances, including volatile organic compounds (VOCs), released
and transferred is an important responsibility of the company as amanufacturer of chemicals. We have been working to reduce those
substances that are subject to the PRTR Act* since FY2002, reducing
them to about one-fifth of the 2002 level by 2012, ten years later.
* 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 businesspremises as waste.

● Achievement Trends
Target Scope

All AICA Group production sites in Japan

Trends in release and transfer of substances subject to PRTR
80
60

66

65

68

69

70

2014

2015

2016

2017

2018 (FY)40
200■Production sites in Japan

45

AICA Group CSR Report 2019

(metric ton)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 for the entire
Group. Currently, we are looking into mechanisms for reducing thevolumes 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

FY2018 Targets

Causes of increase/decrease

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

2% year-on-year increase
35.7 metric ton/100 million
yen

In the aftermath of China’s restrictions on imports of plastic
waste, plastics that had been disposed of as valuable
materials are now being handled as industrial waste, resulting
in a worsening of the figures for waste emissions.

FY2019 Targets
2% year-on-year decrease
34.9 metric ton/100 million
yen or lessLandfill rate at production sites in Japan
1.0% or less1.3%

Waste products that had been a factor in the increase in thelandfill rate in FY2017 were accepted once more as recyclable
material, resulting in an improvement in these figures.

1.0% or less

About AICA

FY2018 Achievements● Major initiatives in FY2018
Name of site

Location

Details

Kiyosu, Aichi Prefecture

Jimokuji Plant

Ama, Aichi Prefecture

・ Reduction of dry volume of drainage sludge

AICA Tech Kenzai Co., Ltd.

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

・ Size changes resulting in the reduction of offcuts
・ Use of offcut grinder resulting in increased volume of offcuts recovered back into products

AICA’s Vision

Nagoya Plant

・ Reduction of industrial waste emissions through reduction of defect rates
・ Reduction of waste liquids through yield increases● Achievement Trends
All AICA Group production sites in Japan & All AICA Group production sites overseas

Trend in industrial waste emission volumes
45,00039,822(metric ton)

42,232

Trend in industrial waste emission revenue intensity
40.0

43,163(metric ton/100 million yen)

34.8

35.0

35.7

2016

2017

2018

Trend in landfi

30.0
30,0009,329

26,447

15,220

24.4
20.0

2,779
17,04515,00024,602

2014

10.0
3,947

3,044

9,402

0

3,903

2015

3,998
2017

2018

(FY)

■Production sites in Japan ■Overseas production sites① Newly consolidated in FY2015 ② Newly consolidated in FY2016 ③ Newly consolidated in FY2018

c ton/100 million yen)

Trend in landfill disposal rates at production sites in Japan
6.0

9.4

[3]8083,095

2016

Foundations Supporting AICA

Target Scope

0
2014

2015

(FY)

Production sites in Japan

(%)

5.2

4.0

2.0

1.4

1.4

1.0

2014

2015

2016

1.3

0
(FY)

2017

2018

(FY)

Production sites in Japan

AICA Group CSR Report 201946

Reduction of water use● Basic Thinking

About AICA

Our production sites in Japan use industrial water and undergroundwater, 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 ofwater it consumes.
Some of our overseas production sites are located in countries
with grave water situations. Each of our business sites is taking

the necessary measures and managing its water usage withthe 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 waterin those areas as a priority.
AICA Laminates India PTV. LTD., which is located in the northwest
of India, recycles water for use in its manufacturing processes, andany waste water is treated and used for gardening purposes.

● Achievement Trends● Actual water use volumes in FY2018 in high-risk areas

Target Scope

Name of site

All AICA Group production sites in JapanAll AICA Group production sites overseas

Trends in water usage
2,514
2,000

2,241

AICA’s Vision

1,602
1,174
431

802

745

1,137

998

325

1,664

2014

Northwest India

37,000m3

PT AICA Indonesia

Jakarta(Indonesia)

129,000m3

PT AICA Indria(AAPH Group*)

Jakarta(Indonesia)

30,000m3

AICA Singapore Pte. Ltd.
(AAPH Group*)

Singapore

90,000m3

812

428

0

AICA Laminates India PTV. LTD.

2,291

850

705

Usage

(1,000 m³)

3,000

1,000

Target area

2015

2016

2017

2018 (FY)■Production sites in Japan ■Overseas production sites(1) Newly consolidated in FY2015 (2) Newly consolidated in FY2016 (3) Newly consolidated in FY2018

Shenyang AICA-HOPE Kogyo Co., Ltd. Northeast China

3,700m3*AAPH Group: AICA Asia Pacific Holding Pte. Ltd.

Foundations Supporting AICA

Environmental Risk Management
Soil and groundwater surveys
We began conducting voluntary surveys of the state ofcontamination of soil and groundwater at AICA Kogyo and JapaneseGroup company plants that have a history of using chlorinated organic
solvents, harmful heavy metals, and the like in FY2001. These surveys
were completed in 2003. The results of those surveys are as follows.

● Soil and groundwater surveys
Name of site

Outcome of voluntary
surveyNagoya Plant

Compliant withenvironmental standards

Jimokuji Plant

Compliant withenvironmental standards

Hiroshima Plant

Compliant withenvironmental standards

Ibaraki Plant

Compliant withenvironmental standards

AICA Kogyo Co., Ltd.

AICA Interior Kogyo Co., Ltd.

Compliant withenvironmental standards(Note)

AICA Harima Kogyo Co.,Ltd.

Headquarters
Plant

Compliant withenvironmental standards

Kasai Plant

Compliant withenvironmental standards(Note) After a survey was conducted of the surface layer only of land acquired by
AICA Interior Kogyo Co., Ltd. for a manufacturing plant, fluorine was detected
in excess of the standard in one section (10 m x 10 m), so measures weretaken to prevent storm water, etc. from penetrating that section.
* The Fukushima and Tanba Plants have not in the past and do not now use
substances for which soil environment standards have been set, so they havebeen exempted from the surveys.

47

AICA Group CSR Report 2019

PCB storage and management status
Polychlorinated biphenyl (PCB) was previously used in stabilizers
for fluorescent lamps and other purposes, but after the Kanemi rice
oil disease incident of 1968, its toxicity was recognized as a social
problem and its manufacture was ceased in 1972. After that, at theprivate sector’s initiative, attempts were made to set up disposal
facilities in 39 locations around Japan, but the consent from local
residents could not be obtained for any of those facilities. As aconsequence, these PCBs have remained undisposed of for morethan thirty years.

In March 2016, in a bid to change the situation, the government
made a Cabinet decision to implement the necessary institutional
measures for the completion of proper disposal as soon as possible
to meet the deadlines for completion of disposal at individual businesspremises (the earliest being the end of FY2018).
In accordance with the Standards for the Storage of Speciallycontrolled Industrial Waste Products, we store PCBs at the Nagoya
Plant, Ibaraki Plant, and Isezaki Plant. We aim to negotiate with thedisposal operators for the early disposal of these chemicals.

State of compliance with environmental laws
Exceeding of phosphorous concentration standards in wastewaterat Tanba Plant:
There was a sudden increase in production of certain products thatuse phosphorous-based raw materials, and the regular wastewater
treatment facility’s chemical precipitation process was unable to remove it all. The pH at the time of chemical precipitation treatment was
adjusted to reduce the phosphorous solubility of the treated wastewater, bringing it to within the criteria.

About AICAThe AICA Group was not subject to any environment-related litigation in FY2017, but there were shortcomings as listed at right, whichhave been corrected.

Complaints from neighbors and responses

Environmental accidents
There were no environmental accidents that would have an impact
outside the site in FY2018, but there was a leakage emergency inside
the premises. We share information and roll out responses horizontally
Name of site Dateof incident

across the Group to ensure that no inconvenience is caused to ourneighbors or to the government agencies with jurisdiction.

Details of incident

Response

the resin leaked from the pump axis.
A worker was trying to move a drum containing waste resin onto
a pallet, but was unable to fully support the drum’s weight, caus-

Nagoya Plant
May 2018

ing the drum to fall over. The impact knocked the lid off the drum
and the waste resin spilled out into the corridor and gutter.

Jimokuji Plant
July 2018

When loading phenol formaldehyde resin from the stock tank,the wrong hose was inserted, causing spillage.
When washing the polyvinyl acetate resin polymerization vat, theJimokuji Plant
October 2018

pump that recycles the washing liquid malfunctioned and theliquid overflowed from the drum placed under the vat to collect
the liquid, spilling into the storm water gutters in the premises.

Work performed to ensure that the pump will not operate if the cock isclosed. The instruction “Open the cock” was added to the procedural
instructions and a sign was posted at the site.
Loading a drum with contents inside it onto and off pallets by humanpower was prohibited. This was reflected in the procedural manualand the workers were educated.

Foundations Supporting AICA

Because an attempt was made to fill a service tank with thecock on top of the tank still closed, the pump was operating forjust under 30 minutes. This placed pressure on the pump andNagoya Plant
May 2018

AICA’s Vision

There were no complaints or requests from people or businesses in the vicinity of the plant in FY2018.

Hoses classified and locked. A number tag was attached to eachhose.
An ON light was installed on the pump. A warning device was installedin the wastewater pit and improvements were made so a warning
would sound before it overflowed.

Use of LCA
We have introduced Life Cycle Assessment (LCA) in the developmentof our products.
Our core products, High Pressure Laminate (HPL), generate less
CO2 than artificial marble or PVC steel sheets, making them a moreenvironmentally friendly product. Our housing products are also highly
durable and have a long life cycle. In this respect, they would be
described as environmentally friendly products.

We also use product LCA in the assessment of which of ourbusiness areas has the most CO2 emissions (Scope 3 assessment
P. 44).
We will update the data used in calculations for higher precision
going forward. We also plan to roll out LCA for the products ofcompanies that have newly joined the AICA Group.

Additional information about the environment is available on the AICA website.
http://www.aica.co.jp/company/environ/plan/● FY2018 Material Balance (trends in actual figures forpast 5 years)● FY2018 Environmental Accounting● Medium to Long-Term Environmental Targets

AICA Group CSR Report 201948

Involvement with Stakeholders
Basic Thinking on Involvement with Stakeholders
As a company that is widely trusted by society, we have instilled in
our management policy our belief in the importance of fair and highly
transparent compliance-based management in accordance with thelaw and social order and in engagement with stakeholders. Basedon this management policy, we have a basic policy of disclosing
information about the company to all stakeholders in a fair and timely
manner.

Involvement with Customers
Voluntary Action Guidelines Concerning Product Safety

About AICA

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 voluntary action guidelines

regarding product safety and strive to ensure product safety andinformation disclosure.

● 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.

AICA’s Vision[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, theirconstraction, and their use (including misuse). We will reflect those risks in our design and development, constraction
manuals, warning labels, and installation 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.

Foundations Supporting AICA

49

[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
the government agencies with jurisdiction 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 point ofcontact with customers who have adopted our products. So we canbe of even more assistance, we carry out a variety of measures withthe aim of improving call quality and enhancing our proposal-making
capabilities.
With the introduction of a Call Center System in April 2018, theefficiency of the Inquiry Center staff’s responses has improved and wehave made major improvements to call response rates. It has become
easier to put customers through to the most appropriate staff tohandle inquiries about specific products, 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, make sales visits andprovide other services to meet the customers’ wishes.
In addition to daily training with the aim of even higher call quality, we
will strive to provide services that will offer even greater satisfaction.

AICA Group CSR Report 2019

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

80,00079,032

90

92

66,08560,00040,00077,35550,80043,309

74

(%)

100
75
50
25

20,000
0
2014

2015

Number of inquiries
Response rate**Data collected from FY2016

2016

2017

2018
(FY)

Value chain collaboration
Distributors and construction businesses are stakeholders in ourvalue chain. To build a stronger network of these stakeholders, on thesales front, we have established the AICA Distributors’ Organization as
a network of distributors with a wealth of expert knowledge. Throughthis organization, we share sales and product strategies and strive
for healthy communication between distributors. On the construction
front, we have established construction groups of various types,
through which we share information about improving construction
quality and product improvement and development.

32nd AICA Distributors’ Organization National Convention (April 2019)

Company policy briefing

departments after top management has checked them, and put
responses into place.
In FY2018, scores increased by 1% from the previous year and weearned 4.22 points out of a top mark of 5 points. Now that we areachieving such high scores, in FY2019, we intend to focus on analysisof the results and on proposal of issues.

Opened Otemachi Office in Tokyo
Our new Otemachi Office in Tokyo opened and began sales
operations in April 2019. With the establishment of this new site in thehighly convenient center of Tokyo, we aim to increase opportunities
for communication with suppliers and deepen collaborations with

AICA’s Vision

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 inproduct development and improvement of services, we identify
issues from the survey findings, communicate them to the relevant

About AICA

Customer Satisfaction Survey

Group companies in Japan and overseas. We hope that this will
provide the impetus of the further expansion of our business, greater
operational efficiency, and improved customer satisfaction.
Foundations Supporting AICA

AICA SEMINAR IN CONTEMPORARY ARCHITECTURE
Through the supply of trusted products, we have strived to contribute in some small way to the elevationand 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 Japan andoverseas to give lectures in various parts of the country in a wide range of areas such as housing, theenvironment, and urban issues. People from many walks of life, including architects, students, and membersof 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.

Additional information about involvement with our customers is available on the AICA website.
http://www.aica.co.jp/company/environ/

AICA Group CSR Report 201950

Involvement with Supply Chain
Basic Thinking on Involvement with Supply Chain
To fulfill the AICA Group’s corporate social responsibility (CSR),
we believe that it is essential that we obtain the understanding andcooperation of our stakeholders. In our procurement activities, inaddition 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 overhaulof our earlier procurement policies and established the AICA GroupCSR Procurement Guideline. 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 Suppliers
About AICA
AICA’s Vision

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 that cover approximately
60% of the total value of AICA Kogyo’s (parent company only) materials procurement, witha particular focus on our main suppliers.
Based on the results of this survey, where necessary, AICA Kogyo employees thenconduct an audit (on-site inspection). If any outstanding initiatives are confirmed, we will
ask that company to teach us their methods, and if we encounter matters that require
correction, we will provide guidance and instruction to those companies. By continuingwith this two-way dialogue, we aim for the mutual improvement of our standards.

Business Continuity Plan (BCP)

Foundations Supporting AICATo ensure stable supplies even after a disaster or accident, wepurchase our main raw materials from multiple suppliers and sites,and ensure that we have alternative options for purchasing.

Regarding our own products, we have built production structuresat multiple sites and have taken measures to ensure that we maintaina certain level of inventory.

Provision of Product Safety Information
Amid ever-increasing concerns about chemicals, including theenforcement of the Revised Buildings Standards Act, the revision of
the standards for school environmental hygiene, and restrictions on
chemical substances overseas, our business overall is widely involvedin these issues.
In FY2018, we provided safety information in response to customer
requests 1,885 times, which was a major increase on previous years.
The most frequent queries were about investigations of domestic
chemical substance restrictions, investigations of the inclusion ofchemicals 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 for investigation and provision of information about new
chemicals, the relevant departments work together to provide prompt
and more accurate responses.

Trend in numbers of cases of provision of product safety information (accidents)
2,000

1,885

1,500

1,154

1,250

1,316

1,000
500
0
2014

2015

2016

Additional information about involvement with the supply chain is available on the AICA website.
http://www.aica.co.jp/company/environ/

51

AICA Group CSR Report 2019

1,376

2017

2018 (FY)Involvement with Shareholders
Ensuring appropriate information disclosure and transparency
As a company that is widely trusted by society, we have a basic
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 andExchange Act, and the rules for timely disclosure prescribed by
the stock exchanges on which our shares are listed, and conduct

information disclosure in accordance 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
・Report (Shareholder Communication)

・Securities Report / Quarterly Report

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

About AICA

・Summary of Accounts

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

Communicating with Shareholders and Investors
Number of individual dialogues withinstitutional investors in FY2018

157 cases

To realize the return of profits to our shareholders and thesustainable growth of the company, we issue dividends that take
into account the consolidated performance of each period, payout
ratios, and internal reserves. In our current mid-term management
plan, C&C 2000, we will issue shareholder returns that are linked toperformance, with a target consolidated payout ratio of 50%.
Our basic policy is to issue dividends twice a year, consisting of aninterim 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 andto 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)
150

50.2%

50.1%

50.5%

50.2%

103

106

(%)
50.0

120
90
60

30.1%

30

46

85

92

40.0

Foundations Supporting AICA

Shareholder returns

AICA’s Vision

We take proactive steps, within a reasonable extent, to achieve constructive dialogue with ourshareholders. 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 Meeting of
Shareholders and the reception after that meeting, we hold Financial Results Briefings for analysts
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 a Representative Director andthe Director responsible for the matter at hand.

30.0

0
2015

2016

Dividend (left axis)

2017

2018

2019 (projected)(FY)

Payout ratio (right axis)

External Assessment
In 2019, we were added for the first time to the FTSE4Good Index Series and FTSE Blossom Japan
Index, which are leading SRI indices developed by FTSE Russell.

We have been part of the JPX Nikkei Index 400, a stock index developed by the Japan ExchangeGroup, Inc., Tokyo Stock Exchange Group and Nikkei Inc., for seven years straight.

AICA Group CSR Report 201952

Involvement with Local Community
As a company with global operations, the AICA Group values its
connections with local regions and communities not only in Japan but
from a global perspective.
We continue to conduct activities based on a philosophy of mutual

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.

Support for regions and people affected by the torrential rain disaster of July 2018.

About AICA

Many people were affected by the torrential rains that struck in July 2018, with our own
Hiroshima Plant also sustaining flood damage. In light of the fact that we have been doing
business in the city of Mihara, Hiroshima Prefecture for many years, we wanted to support
the people in the affected areas and assist with reconstruction efforts. To this end, we
donated 10 million yen to the City of Mihara.
We pray that the affected area will recover as quickly as possible.

Dynea (Nanjing) Co., Ltd. (AAPH Group) holds event for local students
AICA’s Vision
Foundations Supporting AICA

53

In June 2018, Dynea (Nanjing) Co., Ltd., a member of the AICA Asia Pacific HoldingsGroup, held a four-day event to which they invited the students and teachers of the
Dynea Hope School. The students visited the historical city of Nanjing, encountered
the modernized society, and experienced many firsts. We hope that this experience will
broaden the students’ horizons and knowledge and lead to their growth.
Dynea (Nanjing) has supported the Dynea Hope School for ten years and plans tocontinue with that support into the future.

Volunteer desk repairs at Chikusei Municipal Omura Elementary School in Ibaraki Prefecture
We conducted a volunteer project to repair the desks at Chikusei Municipal Omura
Elementary School in Ibaraki Prefecture, which is located near the Akeno Plant of AICA
Tech Kenzai Co., Ltd., one of our Group companies.
To commemorate their graduation, the outgoing students wanted to pass on clean
desks to the remaining students. We provided high pressure laminate (HPL), one of ourcore products, as the surface material, and our employees participated as instructors,
showing the students how to re-cover the desks and working with them on the task.

AICA Group CSR Report 2019

Third-Party Opinion

Hopes for disclosure in line withintegrated thinking in response to thetransformation of capitalism
Managing Director, QUICK Corp.
Head of ESG Research Center

Etsuya Hirose

Foundations Supporting AICA

AICA Group CSR Report 2019

AICA’s Vision

since 2012, the ESG issues you are addressing havealso broadened and deepened. What particularly drew
my attention was the message from the CEO of AICA
Asia Pacific Holding Pte. Ltd. ( P. 14). I can seethat the concept of sustainability that you are aiming
toward has penetrated your Group companies and theiremployees, as well as your supply chain. In terms ofyour supply chain, you have stated that 60% of yoursuppliers are subject to evaluation. I hope you will work
to increase that percentage further.
You have also made progress with your approaches
to environmental issues. In water issues in particular,
in light of the serious damage from a natural disastersustained by your Hiroshima Plant last year, the reportmentions that you will develop BCPs for the four sites inJapan with the highest risk of flood damage as a goal
for FY2019 ( P. 28). I also commend the way you
have identified high-risk areas among your overseas
production sites and your efforts to reduce water usage( P. 47). I hope you will continue to identify the risks
and opportunities related to environmental issues,
including water issues, in each of the short-term,
medium-term, and long-term time frames, and manage
those risks and opportunities.
What progress has been made in the area ofdiversity? You launched your Women’s participation
Promotion Project in 2013 ( P. 38). The promotion offoreign nationals, women, and other diverse individuals
is a source of competitiveness for global companies.
In particular, I believe it will be increasingly essential forsuch companies to Increase diversity on their boards
and at management level.
Finally, I would like to express my hopes for disclosurethat is more in line with integrated thinking. How is yourbusiness using natural capital and social capital toproduce results and profits? The key point will be toshow the relationship between your various products
and your goal of creating safe, sustainable communities.

About AICA

In its corporate philosophy (p. 1), the AICA
Group declares as your goals “mutual harmony,” “thecreation of new value through endless innovation,”and “contribution to society.” I can perceive from thisreport that raising both economic value and social
value lies at the heart of your management strategy.
I can see that the Group as a whole is pursuing thecreation of frameworks to integrate ESG initiatives into
its management and business activities, as stated in the
Message from the President ( P. 13).
In terms of conducting your business in a mannerthat takes the ESG into consideration, it is essentialthat you show clearly how your initiatives will lead not
only to social contributions but to future corporate
value from the dual angles of risk and opportunity, andthat you indicate them to your stakeholders, including
your investors. In that respect, I commend the way inwhich, together with your approaches to SDGs, youhave indicated a model for improving corporate value inyour “virtuous circle model for balancing both financial
and non-financial matters” (P. 9). On the other
hand, disclosure of risks and opportunities in line withscenarios for a low-carbon society will be needed as away of indicating future corporate value.
As the President states in his message, with theintroduction of your QEO Management System in
2003, over the years, you have addressed quality,
environmental and occupational health and safetyissues. And today, under the same system, I can see
your attitude toward disclosure that complies with global
standards. This is evident in your joining the United
Nations Global Compact, and your clear indication ofprinciples concerning respect for human rights basedon the Universal Declaration of Human Rights and the
Guiding Principles on Business and Human Rights.
I believe that the outcomes of these actions have led
to your selection for the FTSE4Good Index Series and
FTSE Blossom Japan Index.
Further, with the expansion of your global business54

Giving Back to the Earth through Technology

Head Office Location JP Tower Nagoya, 26F, 1-1-1 Meieki, Nakamura-Ku, Nagoya, Aichi, 450-6326, Japan
TEL: (052)533-3131
URL / http://www. aica.co.jp/

MIX

From responsible
Head Office: 26F JP Tower
Nagoya, 1-1-1 Meieki, Nakamura-ku, Nagoya, Aichi, 450-6326, Japan Tel: (052) 533-3136
sources
URL/http://www.aica.co.jp/
This report uses FSC certified
paper from appropriately
managed forests.

This report is anenvironmentally-friendly
product that has been
printed in a green printing
certified factory using
printing resources that
conform to the Green
Standard.

© AICA Kogyo Co., Ltd. Unauthorized copying or reproduction of all or part of this document are prohibited.

© AICA Kogyo Co., Ltd. Unauthorized copying and reproduction of all or any part of the contents of this document are prohibited.

Published: September 2019