The slogan of our current Medium-TermBusiness Plan expresses AICA’s determination to establish a position as a uniquemanufacture and achieve 300 billion yen(3000 oku yen in Japanese) in sales and30 billion yen (300 oku yen in Japanese)in ordinary profit through the continuous“creation” of new added “value”. The
logo consists of overlapping shapes that
represent the letter “V” for Value and “C”
for Creation to create new value. The
triangle that represents “V” symbolizes
light, and the semicircle that represents“C” symbolizes the Earth, the environment, and people, expressing our commitment to value creation by shining lighton those three elements.

AICA Kogyo Co., Ltd.
AICA Report 2023

Head Office: 26F JP Tower Nagoya, 1-1-1 Meieki, Nakamura-ku, Nagoya, Aichi, 450-6326, Japan[Contact for inquiries about this report]
Sustainability Development Department Tel: +81-52-533-3136
https://www.aica.co.jp/
Issued Jun. 2024

AICA Report2023

C H E M I S T RY

DESIGN

INDEX
About AICA

We create new value through a fusion of Chemistry and Design.

03

Toward sustainable global coopete entity

11

05
13
15

AICA Policies
Message from the President
Transformation of Value Creation
Our Businesses
AICA’s Value Creation Model
AICA’s Strengths Supporting Value Creation

35
37
42
51
57
64

AICA’s Vision

Data Compilation

19 AICA’s 10 Years Vision and Medium-Term

Editorial Policy
This report is a tool to inform stakeholders (customers, employees, shareholders, suppliers and business partners, local communities and governments, etc.) of the AICA Group’s corporate activities regarding sustainability.
We have created it with an emphasis on narrative flow and accessible communication so that our sustainability can be understood from both financial
and non-financial perspectives. The report explains our business structure,strengths, and strategies based on our 10-Year Vision and Medium-Term
Management Plan, as well as the foundations that support them, while relating them to the Materialities (important issues) that we recognize as ourpriorities.

Reference Guidelines
ISO 26000
Environmental Reporting Guidelines (2018 Edition), Ministry of
the Environment
GRI Standards
IIRC International Integrated Reporting Framework
Target Period/boundary
This report is a summary of the activities of the AICA Group in FY2022. It also
includes information about some activities from FY2023. Target boundary
information can be found in the content of the report.

Foundations of AICA

Reporting on the website

Overview

Reporting around business strategies

AICA Kogyo Co., Ltd.
AICA Report 2023

https://www.aica.co.jp/

Reported in the AICA Report

AICA’s Vision

Business Plan
Special Feature: SDG-Oriented Products
31 Business Overview: Chemical Products Segment
33 Business Overview: Laminates & Building
Materials Segment

More detailed information included

AICA Report
2023

Details
Specialization

GeneralData Compilation

Even today, AICA’s field of activity is still expanding.
It includes residential, commercial and public facilities,
hospitals, offices, hotels, and other buildings.
Our wide-ranging work can also be seen in areas such as automobiles,
electronic products, cosmetics, clothing, and shoes.
We are active in Japan and around the world.
AICA will continue to create new value
through the synergy between Chemistry and Design
as we enrich the lives of people and societies around the world.

11-Year Financial Summary
69 Non-Financial Data
72 Third-Party Assurance
73 AICA Group Network
67

29

This report a selection of matters that areimportant for us to maintain and improve
our sustainability. For more detailed dataand product information, both financial
and non-financial, we invite you to visit
our website.

Policy and Framework for Sustainability
Risk Management
Environment
Human Resources
Corporate GovernanceEngagement with Stakeholders

About AICA

17

Foundations of AICA

External Evaluation

Morningstar Japan ex-REIT
Gender Diversity Tilt Index (GenDi J)

2013 - 2023 Selection
All Japanese Listed Company’s Website
Ranking by Nikko investor Relations Co., Ltd.

1

AICA Report 2023

AICA Report 2023

2

About AICA

AICA Policies
In April 2017, the AICA Group organized its policies that it has valued to the present and established the Corporate Principle,
Corporate Philosophy, and Corporate Policy. In April 2021, we established a Sustainability Policy and revised our Code of Conduct
to revamp the AICA Policies framework. In order to realize these policies, the entire AICA Group will work together to develop ourbusiness activities, thereby contributing to the creation of a sustainable society and further enhancing our corporate value.

Corporate
Principle

Corporate
Philosophy

Corporate Policy
About AICA

1. Chemistry and Design

Challenge andCreation

The AICA Group creates new value andcontributes to society through continuous
innovation in the spirit of our philosophy
of kyosei*.

2. Group Synergies
We create group synergy through collaboration in technologies and market network.

3. Leading Products
Throughout the specific domains and regions of our business, we enhance and expand our market-leading products.

4. Global Presence
We strive to achieve sustainable growth in global markets by enhancing the capabilities of our overseas operations andparticipating in the higher growth sectors.

AICA’s Vision* The Japanese word kyosei stands for active engagement with the AICA Group’s
stakeholders (customers, employees, shareholders, suppliers, business partners, local
communities, local governments, etc.) and the global environment. Kyosei represents
our approach to minimize the adverse effects of the AICA Group’s business activities
and products, and to contribute to society through the value we create and build better
relationships with surroundings, with aiming for a sustainable existence together withthe stakeholders mentioned above.

We create uniquely original products through the power of chemistry and design, to contribute to the achievement of aprosperous society.

5. Human Resources and Organizations
Viewing human resources as the most vital resource of our company, we nurture motivated human resources andorganizations through mutual understanding and development.

6. Compliance Management
We practice fair and transparent management in accordance with all relevant laws, regulations, and social order.

7. Commitment to Safety and Security
Foundations of AICA

We ensure trusted quality and engage in environmentally considerate business activities by focusing on ourcommunication with stakeholders.

Sustainability Policy
1. We address social issues through our business activities to contribute to the creation of a better society.
2. We have established “Compliance with laws and regulations,” “Respect for human rights,” “Harmony with society,”“Fair business practice,” “Customer’s security and trust,” “Proper information disclosure,” “Protection of company information and property,” and “Environment and safety” as the basic principles of the Code of Conduct, and we base ouractions on these principles as shared values for all employees.

4. We identify material issues from the perspectives of both corporate management and stakeholders, address those issues
alongside our business activities, and disclose our progress in addressing them.

Code of Conduct
1. Compliance with laws and regulations
3. Harmony with society
5. Customer’s security and trust
7. Protection of company information and property

3

AICA Report 2023

2. Respect for human rights
4. Fair business practice
6. Proper information disclosure
8. Environment and safety
AICA Report 2023

4

Data Compilation

3. We emphasize dialog with stakeholders, including customers, employees, shareholders, suppliers, business partners,
local communities, and local governments, and respond promptly to social needs and changes.

About AICA

Message from the President

Based on the new Medium-Term Business Plan, AICA
Group will focus on “responding to climate change” andAbout AICA

“building a foundation for human capital management,”
as well as managing the Group with an awareness ofcapital efficiency.
Kenji Ebihara
Representative Director and President

AICA’s Vision

FY2022 Overview

More than one year has passed since I was appointed as Representative Director and President of Aica Kogyo Co., Ltd.
During this period, I have come to realize a significant shift in my role, which decisions are made in response to various challenges
especially impacting our backbone domestically and internationally. As a president, I have completed a full cycle of duties overthe past year and initiated the new medium-term management plan. Moving forward, I will be deliberately settling in and tacklinga variety of matters with thorough dedication.

Foundations of AICA

Reflecting on My First Year as President

FY2022 Business Overview

5

AICA Report 2023

AICA Report 2023

6

Data Compilation

In FY2022, our consolidated business results showed an increase in sales, with the result in net sales of 242,055 million yen(up 12.8% year on year), operating profit of 20,557 million yen (up 1.0%), and ordinary profit of 22,088 million yen (up 1.1%).
These are due to a significant recovery of the non-residential market within the Japanese construction market led by the recovery
from the COVID-19 pandemic, as well as from price revisions reflecting the sharp rise in raw material prices both in Japan andoverseas. However, profit attributable to owners of parent was 10,059 million yen (down 23.3%) due to impairment losses related
to fixed assets and others of Group companies in the Laminates & Building Materials segment.
Now let us look at business results by segment. As for the Chemical Products segment, overseas sales exceeded 100 billion
yen for the first time due to the expansion of the AICA Asia Pacific Holdings (AAPH) Group and the impact of exchange rates,
leading to steady performance. In the Laminates & Building Materials segment, although economic stagnation in the Chinese
market had an impact on business, sales grew not only in Japan but also in India and various Southeast Asian countries, resulting
in increased revenue.

About AICA

Message from the President

Launch of the New Medium-Term Business Plan “Value Creation 3000 & 300”

Net sales

300 billion yen

Ordinary profit

Financial

30 billion yen

AS Product Sales

28 billion yen

Overseas net sales ratio

50% or more

*1

*2

ROE

Approx. 10%

Responding to Climate
ChangeNon-financial
Building a Foundation for
Human Capital Management*1: Aica Solution

Approx. 8%
Greenhouse gas emissions
reduction*3

Reduce 14%

Environmental investment*4

2 billion yen

Human capital investment*2*4

4 billion yen

Engagement score*5*2: Aica Kogyo non-consolidated *3: Scope 1 and 2, compared to FY2022 levels *4: Four-year cumulative total

4.0 points or more
*5: Maximum score is 5 points

With classifying Chemical Products business and Laminates & Building Materials business into Japanese and overseas four
quadrants, we will clarify our positions in respective industries and markets, and will consider the capital allocation in order tomatch market character and to achieve appropriate profitability in line with capital size. With regard to the overseas Chemical
Products market, we are aiming to steadily capture demand in the Asian region by increasing manufacturing capacity. We havealready taken measures and expect to increase earnings as the effects of the investments we have made which are beginning toemerge. We are keep considering further business and capital investments in China, Vietnam, India, and other area where market growth is expected. Regarding overseas Laminates & Building Materials market, we have been strengthening our overseas
business through M&A in recent years, yet we recognize that there are more things that we can do. We will maximize synergies
among our Group by overseas roll-out of Japan Technology in order to tap into significant markets with high-growth potential,
aiming for increased profitability.
In the Japanese Chemical Products market, we will improve profitability by promoting structural reforms and thorough profitability management, as well as by concentrating management resources in areas that are expected to see continued growth,

7

AICA Report 2023

Addressing the material issues passed on from the previous
Medium-Term Business Plan, we have set new goals for eachmaterial issue. The goals outlined here are crucial themes that
we must address for the sustained viability of our company.
We are committed to addressing these challenges with robust
determination, harmonizing strategic initiatives for businessexpansion. In particular, during the period of the new Medium-Term Business Plan, we will focus on “responding to climate change” and “building a human capital foundation”.

New Medium-Term Business Plan Materialities

Financial

1

Provide economical value

2

Help to solve social issues withproducts

3

 esponding to climate
Rchange4of Focus uilding a foundation forBhuman capital management

5

DX*1 implementation

6

Strengthen governance7

 uality assurance and occupationalQ
safetyNon-financial

PointsResponding to Climate Change
In addition to declaring our commitment to carbon neutrality by FY2050, we have set targets to reduce greenhouse gas emissions by 14% by FY2026 and 30% by FY2030 compared to FY2022 levels. Although this is a challenging target as we aim tofurther expand our business, we are committed to reducing absolute emissions with a sense of urgency and responsibility as acompany that conducts business activities on this planet. In addition, viewing changes of needs in response to climate change
as new business opportunities, we will promote the developAICA Group Greenhouse Gas Emissions Reduction Plan (Scope 1 & 2)
ment and provision of products that respond to climate change
in both the Chemical Products segment and the Laminates &FY2026
Reduce 14% from FY2022
Building Materials segment. We will contribute to the achievement of the SDGs not only by developing and expanding sales
FY2030
Reduce 30% from FY2022
of products that directly contribute to reducing greenhousegas emissions, but also by developing and expanding sales ofhigh value-added products designed to help solve social issues
such as waste reduction and easier construction.
Achieve Carbon Neutrality by FY2050

AICA Report 2023

8

Data Compilation

Basic Policy (1): Improvement of Profitability

Basic Policy (3): C reation of a Sound
Business Infrastructure

Foundations of AICA

ROIC

While actively making growth investments in markets in which we can demonstrate our strengths, we will focus on creating
and cultivating technologies and products that will become new profit generating pillars expected to provide sustainable growth.
In the Chemical Products segment, our growth will depend on our ability to accurately identify market needs and introduce attractive products in the highly profitable field of Specialty & Performance Materials, where a sense of speed is required. We will invest
management resources in the development of products for non-construction fields, such as automobiles, daily necessities, andelectronic materials, where we can take advantage of our strength in chemical synthesis technology. We believe that we will be able
to provide higher value-added products if we can further enhance the synergy between the EVERMORE CHEMICAL INDUSTRY(EMC) Group which has strengths in synthesis technologies for materials close to raw materials such as monomers, and Aica Kogyo
which has strengths in polymer synthesis and resin design technologies to create distinctive products that meet customer needs.
Now we are on the way of organizational reforms to achieve this goal.
In the Laminates & Building Materials segment, we have been expanding applications of our products to the ceiling and floor
markets and feel that we are receiving positive feedbacks from the markets. We expect further growth through the expansion ofuse in various part of buildings. In addition, we will continue to focus on expanding sales of countertop-related products and otherfabricated products to meet the increasing demand for fabricated products due to the worsening shortage of skilled workers, including the 2024 issue, the shortage of human resources due to the enforcement of Japan's Workplace Reform Law in 2024, which
Japanese construction industry is facing.

AICA’s Vision

Managerial KPIs of the New Medium-Term Business Plan “Value Creation 3000 & 300”

Basic Policy (2): Creation and Expansion of Growth Businesses

About AICA

FY2023 was originally supposed to be the final year of the 2nd Medium-Term Business Plan “Change & Grow 2400.” However,since we achieved the plan’s sales target one year ahead of schedule and wanted to quickly respond to our business environment changing at a dizzying pace, we have formulated the 3rd Medium-Term Business Plan “Value Creation 3000 & 300” andlaunched it from this fiscal year.
During the two years of the previous plan, “Change & Grow 2400,” we have made steady strides forward by entering newmarkets and increasing manufacturing capacity in each of our business segments (Chemical Products segment and Laminates& Building Materials segment) and geographical segments (Japanese and overseas). On the other hand, with the ever-increasing
speed of social change, we have recognized that in addition to the remaining financial issues of profitability and efficiency, issues
related to human capital and natural capital were becoming increasingly important from a non-financial perspective.
In light of these circumstances, we have set forth the following Managerial KPIs in “Value Creation 3000 & 300”. On the financial side, we have newly introduced a ROIC target and intend to manage the Group with more awareness of the return on capitaland cost of capital. We will make improvements to our business portfolio based on ROIC by business segment and actively
invest in the creation of new growth businesses to put our Group on a new growing track. On the non-financial side, we will workon targets related to “responding to climate change” and “building a foundation for human capital management” as particularly
important items among our Managerial KPIs. We intend to consider and implement measures that bring firm results with muchstronger drive than ever before.

and areas that contribute to addressing social issues, such as repair and reinforcement resins to extending the service life ofbuildings, hot melts and UV-curable resin products to reducing energy consumption. For the Japanese Laminates & Building
Materials market, we have already established a highly profitable business model with our variety of products that hold a highmarket share. With having these strengths, we will work on diversifying design and pioneering construction methods, and willcontinuously expand our robust profitable business model.

About AICA

Message from the President

Maintain financial
soundness

Cash equivalents
Equity ratio

Free cash flow

Previous Medium-TermBusiness Plan Results

In April 2022, we established the Risk Assessment Council, which allows us to view our business risk more accurately than
before. Since the second Council held in March 2023, we have started reporting the managing status of the risks, making theissues that require addressing have become clearer. By cycling through this process and enriching the content year by year, we
believe we can further strengthen our resilience against risks.

50,993 million yen(As of end-Mar. 2023)
58.1% (As of end-Mar. 2023)
ROE 6.9%
ROIC 8.1%(FY2022)
7,056 million yen(two-year annual average)

Secure liquidity for about two to three months of monthly sales tostrengthen our risk tolerance
Maintain an appropriate rating and an equity ratio of 50% or more
ROE > ROIC > WACC structure
ROE target of approx. 10%
ROIC target of approx. 8%
Secure free cash flow to support aggressive investment for
growth and increased shareholder returnsーFocus on investment projects that generate returns that exceed
cost of capital

Portfolio managementーPromote portfolio optimization using ROIC by business/company

No dividend reduction for 25
consecutive years; Increase individend for 14 consecutive years

Emphasize the continuity of stable dividends that have not been
reduced for the past 25 years
Basic policy: Maintain progressive dividends without reducing
dividends

Dividends

Acquired approx. 4 billion yen
worth of treasury shares

Three years have passed since the establishment of the Overseas Group Governance Committee, and the collaboration between our overseas holding companies and Aica Kogyo has significantly strengthened, leading to the significant improvementof governance levels towards overseas Group companies. We have identified more than 10 critical themes and reporting to theboard of directors in sequence on a monthly basis, with each theme being reported by the respective responsible department.
We anticipate that improving accessibility to overseas travel will contribute to enhancing our governance standards. I, too, willproactively engage in visits to our overseas sites, gathering local perspectives to fortify collaboration within the group.

New Medium-Term Business Plan Policies

Investment discipline

Share buybacks

AICA Report 2023

Risk Assessment Council

Data Compilation

Indicator

ROE
ROIC

9

This committee is an important meeting body that manages the progress of the materialities incorporated into the Medium-Term Business Plan. I chair this committee and report on the progress of each activity to the Board of Directors on a quarterly
basis. Each department in charge formulates action plans to achieve the KPIs set for materiality and then proceeds with theiractivities. We have many challenges to deal with, but have a system in place to prioritize the issued and address with Groupwide efforts.

Foundations of AICAKey Initiatives

Focus onshareholder
returns

Sustainability Development Committee

Overseas Group Governance Committee

Under the new Medium-Term Business Plan, we will implement a capital policy that emphasizes a balance between “maintaining financial soundness,” “improving of capital efficiency,” and “focusing on shareholder returns” in order to optimize capital
allocation.
We believe it is important to ensure financial stability to sustain stable business operations without causing inconvenience toour employees and business partners even when facing various risks. Therefore, we have established clear criteria for necessary
liquidity and self-capital ratios. Moreover, we consider the most important factor for sustainable corporate value enhancement
is the improvement of capital efficiency, and have newly set a target for ROIC (Return on Invested Capital) in addition to thepreviously used ROE (Return on Equity), and also formulated policies for portfolio optimization and cost of capital conscious
investment. Regarding our dividend policy, we have added “maintaing progressive dividends without reducing dividends” as abasic policy and are considering the possibility of flexible share buybacks (for detailed investment plans based on capital policy,
page 27-28).
please refer to

Improvement of
capital efficiency

Activities to enhance sustainability are an important framework to support the endurance growth of the Company and arebeing augmented through various meeting bodies. In this report, we would like to brief our efforts and progress of three major
meeting bodies.

AICA’s Vision

Capital Policy

Important Meeting Bodies that Contribute to Enhancing Sustainability

About AICA

Building a Foundation for Human Capital Management
AICA Group Main Human Capital Management KPIs
We have reevaluated the type of talent required to address
the business challenges that our company is facing and set
Human capital investment*1*2
4 billion yen
goals for cultivating individuals who can meet those demands.
Upon reflection on our past efforts in talent development, it is
4.0 points or more
Engagement score*3
clear that there has been a shortfall. By bolstering talent devel22.8 million yen orLabor productivity*1*4
opment and creating a conducive environment through prudent
more per person
investments, we aim to not only enhance individual skills but
Overseas training program
100 or moreparticipants*1
also elevate engagement. This, in turn, is expected to contribPercentage of women recruited toute to an overall enhancement of labor productivity across the
30% or more
new-graduate career-track positions*1
company.
Male: 70% or more,
The development of globally competent human resources isChildcare leave acquisition rate*1
Female: 100%very important for us since our overseas sales ratio increases*1: Aica Kogyo Non-Consolidated *2: Four-year cumulative total *3: AICA Group*4: Labor productivity = Added value / Number of employees
annually. While focusing on training our current employees, we
also intend to actively recruit non-Japanese employees. Furthermore, I aspire to enhance the active involvement of women within our workforce and have integrated a target for the recruitment ratio of female employees into our new Medium-Term Business Plan. While many women are already holding leadership
positions in our overseas sites, we acknowledge that there is room for improvement in Japanese sites. We will continue ourproactive efforts to create a better environment and implement policy revisions to ensure that outstanding talents, irrespective ofgender, can thrive in their roles.

Consider flexible share buybacks

AICA Report 2023

10

About AICA

Transformation of Value Creation

LaminatesLaminates& Building&Materials
Building Materials

Chemical Chemical
Products Products

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.
42%

42% 242242
billion yenbillion yen
58%

250

Electronic/Other
Electronic/Other
23%

23%

18%

150

14%
18%

%
NO DATA NO46DATA

46%

100

28%

(Non-consolidated)(Non-consolidated)

46%
22%

28%

400

400

28%

300

300

200

200

100

100

2008
2008
Global Financial
Global Crisis
Financial Crisis

LaminatedLaminatedsheets sheets

IncreaseIncreasein sales in
due
sales
to due to
new consolidation
new consolidation
1989
1989
Nikkei Stock
NikkeiAverage
Stockreaches
Averageall-timereacheshighall-time highLaminatedLaminatedsheets sheets

22%

1973
1973
1979
1979
Paper
Paper
1st Oil Shock
1st Oil Shock2nd Oil Shock2nd Oil Shock
Manufacturing
Manufacturing

23%

1985
1985
Plaza Accord
Plaza Accord

1991
1991
Japan’s economic
Japan’s economic
bubble collapse
bubble collapse

AICA’s Vision

100

Ceramics Ceramics

31%(Non-consolidated)(Non-consolidated)

3.2946%billion3.29
yen billion yen(Non-consolidated)(Non-consolidated)

23%

2007
2007
Revision ofRevision
BuildingofStandards
Building Standards
Law, prompted
Law, promptedbybyearthquake
earthquake
resistanceresistancedata falsification
data falsification
scandal scandal(1965.12-1966.11)(1965.12-1966.11)

14%

Chemical Chemical
Products Products
Dec. 1946*1Dec. 1946*1
18%(1975.12-1976.11)(1975.12-1976.11)

28%

Building Building
and housing
and housingmaterials materials

38%

500

About AICA

FY1976
FY197634%
38%

17.5 billion
17.5
yen billion yen

LaminatedLaminatedChemical Chemical
sheets sheets
Products Products
FY1966 FY1966
Spark plugs
Spark plugs
32%
32%

Jacks/Other
Jacks/Other(Consolidated)(Consolidated)31%

Chemical Chemical
Products Products

500
2020
2020
COVID-19COVID-19
pandemicpandemic

18%

69.9 billion
69.9
yen billion yen

Building Building
and housing
and housingmaterials materials

200

34%

150

Number of new
Numberhousingof new
startshousing(10,000
startsunits)(10,000 units)
Area of non-residential
Area of non-residentialbuilding starts
building(1 million
startsm2(1) million m2)

Chemical Chemical
Products Products

FY1996 FY1996

200

58%

(Consolidated)(Consolidated)

Sales (billionSales
yen) (billion yen)

250

Operating profit
Operating(100 million
profit (100yen) million yen)

FY2022 FY2022

Number of
Numbernew of new
housing starts
housing(rightstartsaxis)(right axis)
50

50Area of non-residential
Area of non-residentialbuilding starts
building(right axis)
starts (right axis)
1949
1949
Dodge Line
Dodge
announced
Line announced
1945
1945
End of warEnd of war

1964
1964
Tokyo Olympics
Tokyo Olympics
19651965Japan’s “Izanagi”
Japan’s “Izanagi”
economic economic
boom
boom

OperatingOperating
profitprofit(right axis)(right axis)

EstablishedEstablished
1936
1936

FY1960 FY1960

FY1970 FY1970

FY1980 FY1980*2

FY1990 FY1990

FY2000 FY2000

FY2010 FY2010

FY2023 FY2023(Forecast)(Forecast)*1 Complete*1data
Completeis unavailable
data is due
unavailable
to postwar
due turmoil.
to postwar
Results
turmoil.
are forResults
the single
are formonth
the singleof December
month of1946.
December*2 The1946.
four-month*2 The period
four-monthfrom period
Decemberfrom1988
Decemberto March
1988
1989
to March
due to1989
the change
due to inthethechangeclosingin month.
the closing month.
Note: The Company
Note: Thebegan
Company
consolidated
began consolidated
accounting inaccounting
the fiscal year
in theended
fiscal November
year ended30,
November
1979. Accounting
30, 1979. Accounting
prior to that prior
was non-consolidated.
to that was non-consolidated.

1936～1950
1936～1950
StartedStarted
in businessin businessas a as achemicalchemicalmanufacturer
manufacturer

1951～1965
1951～1965
AICA AICA
enters enters
the Laminaed
the Laminaed
SheetsSheetsbusinessbusiness

1966～1980
1966～1980
Shift toShiftgeneralto general
construction
construction
materials
materials
manufacturing
manufacturing

1936 Patent
1936
application
Patent for
application
urea-basedfor urea-based
resin adhesive
resin adhesive

11

AICA Report 2023

High-pressure
High-pressure
laminate (HPL)
laminate
plant (HPL)
completed
plant incompleted1959
in 1959“JOLYPATE”“JOLYPATE”
released in 1975
released in 1975
A long-selling
A long-selling
product thatproductstill hasthat
manystillfanshas many fans

1996～2010
1996～2010

Becomes
Becomes
the topthe
manufacturer
top manufacturerofof Building
Building
an environmentan environment
high pressurehigh pressure
laminate
laminate
management
managementfoundation
foundation

2011～
2011～
Expanded
Expandedoverseas
overseasbusinesses
businesses
throughthrough
M&AsM&As

Launched● Launched
AICA COLOR
AICA COLORSYSTEMSYSTEM
105 high105 high ● Inaugural● Inaugural
edition ofedition“Environmentalof “Environmental● Acquired● Acquired
shares inshares
subsidiaryin subsidiaryof Dynea’sof Dynea’spressurepressure
laminate laminate(HPL) (1984)(HPL) (1984)
Report” (1999)
Report” (1999)
Asia-PacificAsia-Pacificdivision (2012)
division (2012)● No. 1 domestic● No. 1 domestic
market sharemarketforsharehigh for high● Launched● Launchedeco-friendly
eco-friendly
adhesiveadhesive“AICA “AICA ● Acquired● Acquired
shares inshares
EVERMORE
in EVERMORECHEMICALCHEMICAL
pressurepressure
laminate laminate(HPL) (HPL)
ECO-ECOECO-ECO
BOND” (2001)
BOND” (2001)
INDSUTRYINDSUTRY
CO., LTD.
CO.,(2018)
LTD. (2018)● Launched● Launched“CERARL”“CERARL”(1989) (1989)● Established● Established
R&D Center
R&DinCenter
order toin order to● Acquired● Acquired
shares inshares
Wilsonartin Wilsonart
subsidiarysubsidiaryinin● “CERARL”● “CERARL”
became abecamehuge successa huge successasasenter electronicenter electronicmaterialsmaterials
business,business,thethe Asia-PacificAsia-Pacificregion (2019)
region (2019)
kitchen panel
kitchenduringpaneltheduringsecondthe halfsecondof half offorerunnerforerunnerof the Specialtyof the Specialty& Performance& Performancethe 1990s
the 1990s
MaterialsMaterials
BusinessBusiness(2002) (2002)●

AICA COLOR
AICA
SYSTEM
COLOR
105,
SYSTEM
which 105,
was launchedwhich wasin launched
1984, in 1984,
Inaugural edition
Inauguralof “Environmental
edition of “Environmental
Report” (1999)
Report” (1999)
became thebecame
cornerstone
the cornerstoneof the company'sof the company's
top high pressure
top high pressure
laminate (HPL)
laminate
domestic(HPL)market
domestic
sharemarket share

In 2012, AICA
In 2012,acquiredAICA
subsidiaryacquiredofsubsidiaryDynea’s Asia-Pacificof Dynea’s Asia-Pacificdivision
divisionand establishedand established
Aica Asia Pacific
Aica Asia
Holding
Pacific
Pte.Holding
Ltd. (AAPH)
Pte. Ltd. (AAPH)
Since then, AICA
Since hasthen,actively
AICA hasembarked
activelyon
embarked
M&As. on M&As.

AICA Report 2023

12

Data Compilation

Launched● Launched
Japan’s firstJapan’surea-based
first urea-based
resin
resin● Launched● Launchedmelaminemelamine
resin-baked
resin-baked
paint
paint
● Launched● Launched“AICA POSTFORM”“AICA POSTFORM”(1968) (1968)● Launched● Launchedwall coatingwall material,coating material,adhesiveadhesive“AICHI-MUTEKI-NORI”“AICHI-MUTEKI-NORI”(1939) (1939) (1951) (1951)● Expanded● Expanded
ceramics,
ceramics,
spark plug,
spark
paper
plug, paper ● Launched● Launched“AICA” high-pressure“AICA” high-pressure
laminate laminate “JOLYPATE”“JOLYPATE”(1975) (1975)● Launched● Launchedpremiumpremium
wooden wooden
door, door,
manufacturing,
manufacturing,and otherandbusinesses
other businesses(HPL) (1960)(HPL) (1960)“EASTERN“EASTERNCHERRYCHERRY
DOOR” (1978)
DOOR” (1978)●1981～1995
1981～1995

Foundations of AICA

*2

About AICA

Our Businesses
FY2022 Results*1

Chemical Products Segment

Fundamental business
operations cultivating coretechnologies

billion yen

billion yen

100.7

Adhesives 101.5 billion yen 42%

Laminates &Building
Materials

Chemical
Products

Construction resins
9.8 billion yen 4%
Specialty & performancematerials
17.7 billion yen 7%

58%

42%

Product range*1

Industrial and architectural
adhesives
Adhesives for wood furniture,
construction materials,
and building construction

In Japan, our strength lies in the construction market, including collaborative sales of various products in the Laminates & Building Materials segment. In Indonesia, we havethe No. 1 share of the rubber adhesive market, and we arebroadly expanding our business elsewhere overseas as well.

Hot melts
Adhesives for automotive
and sanitary materials

Demand is solid for use in wood furniture and automobile
headlamps. Sales in high-growth markets such as those forsanitary and packaging materials are also growing.

Industrial resins
Resins for industrial
product bonding

These products are used as raw materials for industrial
products in a wide range of fields, including construction,
automobiles, steel, and electronics. We are expanding thetechnology we have developed in the Japanese market tooverseas markets.

Composite board resins
Resins for bonding
wood boards(MDF, particleboard)

These are the main products of the AAPH Group*3. The
company continues to grow by capturing strong demandin Southeast Asia. In recent years, resins for fast-growing
bamboo materials have grown significantly in response to
growing environmental awareness.

Wall coating materials
Decorative paints forinterior and exteriorbuilding walls

High-durability coating materials with sophisticated design
characteristics centered around JOLYPATE, a brand-nameproduct with a 48-year history. CLIMATERIA is a new andexpanding brand that has been well received by designers.

Floor coating materials
Paints for floor of plants,
warehouses, etc.

These products help improve the durability of concrete
floors. We leverage our strength in resin technology to provide high value-added products with excellent weather resistance and ease of installation.

*5*5

Polyurethane products
Resins for sneaker soles,
textilesUses are to be found in a wide range of fields, as additives
for plastics, paints, and other resin products, and cosmetics. In particular, GANZPEARL, which is mainly used in cosmetics, holds a high global market share.
These are the main products of the EMC*4 Group. Our polyurethane foam (PUS), used in the soles of sports shoes, enjoys the world’s top market share and continues to grow dueto the deepening of the market for daily necessities.

AICA Report 2023

We offer a wide variety of highly original products based on ourmelamine decorative HPL, which enjoys the largest market share in
Japan, by utilizing the chemical technologies cultivated in the chemical products business. A wide range of variations are available to add
color to all kinds of architectural spaces.

Main Products and Applications

High-pressure
laminate (HPL)
Surface material fortables and furniture

Strengths and Features*6

The color pattern is integrated with that of HPL, our main
product line, to enable color pattern coordination. The surface is made of polyester resin and reinforced paper withexcellent abrasion resistance, and is used in a variety offacilities.

Decorative plywood
boards
Surface material for
furniture, interior walls,etc.
Architectural film
Decorative materials
for interior and exteriorwall surfaces, fixtures,and fittings

Available in a wide range of colors and patterns, and featuring
excellent durability, it is the industry’s top-share product in Japan.
It is used in various parts of residences, commercial facilities,
medical and welfare facilities, offices, and lodging facilities. We
provide highly functional HPL that leverage chemical technology.

*7

Its flexibility allows it to be used to decorate fittings, in addition to walls, expanding the range of coordination possibilities. Products for outdoor use and processed products
such as louvers are also available, and are used mainly in
non-residential facilities.

CERARL

Widely used as a protective material for displays and other electronic devices. We also offer products for the automotive industry, and 3D decorative film for exterior applications is expected tocontribute to the reduction of greenhouse gas emissions as analternative to painting in the automobile manufacturing process.

UV-curable resins
Resins and films for protectionof electronic materials andautomobile interior decor
Functional sphericalpolymer beads
Additives for resin
products and cosmetics

We help to solve social issues by providing repair and reinforcement materials for concrete structures such as infrastructure facilities and tile wall surfaces. Our strengths lie indesign and functionality, including the development of our
proprietary transparent resins.

HPL 32.2 billion yen 13%
Decorative plywood boards,
architectural films, etc.
12.5 billion yen 5%
CERARL
21.7 billion yen 9%
Noncombustible/
fire retardant decorative panels
7.8 billion yen 3%
Building and housing materials
26.4 billion yen 11%

Providing distinctive
products leveraging
chemical technology

CERARL(Melaminefire retardantdecorative panel)
Indoor wall covering
Decorative calcium
silicate boards
Indoor wall covering

Extruded cement
board
Exterior wall material

This cement-based exterior wall material features excellent
earthquake, weather, and fire resistance. It is characterized
by the beauty of its smooth surface and versatility of design.

Multifunctional calcium
silicate panel
Indoor wall coveringand material for ceilings

In addition to excellent humidity control, it has deodorizing and fire resistance properties, helping extend the life ofhomes and improve earthquake resistance and comfort. Thisis an environmentally-friendly product that contains no toxic
substances and is composed entirely of natural materials.

Building and housing materials*5billion yen

Laminates & Building Materials Segment

Postform
Countertops, furniture

HPL is used as a surface material available in a wide rangeof colors and patterns. It is resistant to scratches and stains,and is used for countertops in all parts of residential andnon-residential buildings, and on doors for kitchens andclosets.

Engineered stone /methacrylic solid
surfaceCountertops, furniture

Engineered stone, which is mainly composed of natural quartz,
is more resistant to scratching and staining than natural stone.
It is coming into increasingly widespread use, mainly for kitchen
top. Methacrylic Solid Surface has high workability and is used forcountertops and wash basins, as well as features and furnishings.

Fittings/storage
Interior doors,
storage furniture

In addition to general interior doors for residences, we also
have a lineup of sliding doors for medical and welfare facilities. Our storage furniture series, which allows free design, is
growing in popularity by satisfying diverse needs.

Since becoming a major hit product for use in kitchen panels in the 1990s,
this wall covering has been a long-selling core offering for more than 30 years.
It receives high marks for its resistance to scratches and stains, and is usedin both new construction and renovations at various facilities, as an indoor
decorative material in restroom spaces and facilities with heavy public use.
These are an indoor wall covering materials made with a basematerial of calcium silicate board, and a surface made of resin, reinforced sheet, etc. We offer a wide range of products
from general-purpose to high-end design items.
*8

Data Compilation

Materials for repair,
reinforcement andcorrosion prevention
Resins for repair and reinforcementof concrete structures, etc.

Decorative plywood
boards, architecturalfilms, etc.

Strengths and Features

Highpressure
laminate(HPL)

Other chemical products
12.2 billion yen 5%

Main Products and Applications

16.7

billion yen(of which the AAPH Group*3
81 billion yen 33%)

*1 Some product group categories were changed in FY2023. *2 Operating profit before deduction of unallocated operating expenses *3 AICA Asia Pacific Holdings*4 EVERMORE CHEMICAL INDUSTRY *5 Example of usage

13

7.4

Operating profit*2

Noncombustible / fire retardantdecorative panels

Construction resins

141.3

Net sales

Foundations of AICA

Specialty & performance materials

Operating profit*2

AICA’s Vision

Adhesives

Product range*1

Net sales

About AICA

Since 1936, when we developed Japan’s first urea-based resin adhesive, we have been developing products that lead the times with our
chemical synthesis technology. Since the 2000s, we have been focusing
on expanding our Specialty & performance materials product offerings
as a new business domain, diversifying the areas in which we are active.

FY2022 Results*1*6 Ginza Ito-ya Yokohama Motomachi Design: Ikeda Architects / Photo: Atsushi Nakamichi / Nacása & Partners Inc.
*7 msb (Musubu) Tamachi, Tamachi Station Tower N *8 Senshu University Ikuta New Building No. 2 and No.3, Designed by Nikken Sekkei, Ltd.

AICA Report 2023

14

About AICA

AICA’s Value Creation Model
Source of Value Creation (Business Model)
Achievement of Sustainable Society
INPUT

External environment(As of end-Mar. 2023)

The source of AICA’s Value Creation Model lies in our development capabilities that use core technologies based on chemistry
and design, our domestic and overseas sales networks and customer bases, our capabilities in helping to solve social issues
developed through dialog with stakeholders, our range of high-quality products and brand value generated from those capabilities, excellent human capital, and a healthy financial base. We resolve social issues through our business activities by creatingsynergies between the Chemical Products and Laminates & Building Materials Businesses, and continuing the cycle of improving
and expanding these strengths. Guided by a philosophy of kyosei* that places importance on dialog with stakeholders, AICA
creates new value and contributes to society through continuous innovation.
* Please refer to page 3 for the meaning of kyosei

Financial Capital
Capital

9.8 billion yen

Cash and cash equivalents

Politics
Economic trends

47.9 billion yen

Social and Relationship Capital
Sales and customer base networks
spread across Japan and overseas
AICA Distributors’ Organization(in Japan)

300

companies
About
Overseas customers

11,000 companies

Climate change

Demographics

Incorporation
into business

Energy issues

OUTPUT

Lifestyle changes

Contribution
throughbusiness

Brand building
Synergy creation
Brand value

Derivative products

Expansion ofsales channels M&A

Social issues and needs

Business
Partners

4,963

*2

Issue
solutionsImprovement
Practical feedback

51

Manufacturing Capital

Extensiveproduct range

47 locations

Capital investment

8.6 billion yen

Marketdevelopment

Expansion of
applications

Quality
Environment
wellbeing

Synergydevelopment

Provision of
seeds

Reassurance

Chemical
Products
Laminates &Building
Materials

Employees

Shareholders

Synergies

Comfort

Local
Communities

Core technologies

Intellectual Capital
Accumulated chemical technologies
and design capabilities

Environmental
wellbeing

Specialty & Performance Materials

Sales
network
Customerbase

Global network of manufacturing
facilities and IT systems

Manufacturing sites*2Foundations of AICA

External environment

Safety*2Overseas
expansionCompanies [consolidated]

Chemistry

DesignEasierCnstruction

Materials for residential

Achievement of
Sustainable Society

Natural Capital

Long-life

Corporate Principle
Corporate Philosophy

Wood, water, air, and energy

2,108Tj

Corporate Policy

Materials for commercial facilities and offices*1

Sustainability Policy
Universal
DesignWater withdrawal

3,700,000 m

3

Data Compilation

8 countries

3.9 billion yen

Energy inputs

Customers

Construction Resins

Employees [consolidated]

18

HealthAdhesives

Return ofresources

Honest and diverse human resources filledwith a spirit of “Challenge and Creation”

locations in
R&D expenditure

IMPACT

Resource depletion

Input
resources

Human Capital

R&D bases

OUTCOME

AICA’s Vision

About

Social issues and needs

About AICA

Globalization
Diversification

Materials for healthcare and welfare/childcare and school facilities*1 Shion Kindergarten Annex + Shion School Children’s Club Design: Kozue Hotta, Goyoukiki *2 Example of usage

15

AICA Report 2023

AICA Report 2023

16

About AICA

AICA’s Strengths Supporting Value Creation
AICA’s strengths lie in our extensive product range that leverages the advantages in chemistry and design, as well as a solid
customer base which supports that product range, overseas business bases, brand value, excellent human capital, the trust ofsociety backed by high quality and environmental wellbeing, and a healthy financial base. We will improve our corporate sustainability by emphasizing dialog with stakeholders and continuing to enhance these strengths.

Helping solve social issues with the power of chemistry and design
Related Capital
Human Capital

Natural CapitalSocial and
Relationship Capital

Manufacturing
CapitalIntellectual
CapitalRelated Capital

In recent years, we have continued to grow by
expanding our business domains and networks,
with a focus on growth markets in Asia. Throughaggressive M&As, we acquire superbly qualified
human resources, production bases and sales
channels to enhance our competitiveness.

Human CapitalSocial and
Relationship Capital
Manufacturing
CapitalNatural Capital

Customer baseOverseas sales ratio

51.2

About

Companies [consolidated]

SafetyConstruction
ResinsReassurance

ComfortEasierConstruction

HPL, Decorative
boards,Architectural films

Adhesives

Long-life

Building andhousing Materials

Universal
DesignCERARL,
Fire Retardant/Noncombustible
decorative Panels

MELAMINE TILE

Present
Lumiart,
AICA AITRON
Fanctional spherial
Polymer beads,
Acrylic

MACE, MOISSDYNAMICRESIN
Tough Resin clear
guard Method

Fiore stone

CELSUS
Altyno

DYNAMICRESIN

Stylish countertops

AICA ECO-ECO
BOND

Aica purCompanies inOverseas customers

Countries & Territories

Brand value

Related Capital

The name “AICA” is synonymous with HPL, as is
the name “JOLYPATE” with wall coating materials,
and no cosmetic product developer is unfamiliar
with the name “GANZPEARL.” These are someof our many strong-performing brands that boast
high market shares in their respective industries.

Intellectual
CapitalHuman CapitalSocial and
Relationship Capital

About

11,000companies

Quality / Environmental wellbeing

Decorative
polyester plywood
boardsPostform counter

High-pressure
laminate (HPL)Intellectual
CapitalNatural Capital

HPL market share in Japan

Customer Satisfaction Survey

No.1

4.5

/5

Healthy financial base

Related Capital

We have established a healthy financial base, with a high equity ratio supported by stable operating cash flow. This leads to a
virtuous cycle that enables active growth investment and return of profits.

AICA Report 2023

Social and
Relationship Capital

Design3.9

billion yen

Data Compilation

Urea-based resin
adhesive

17

Human Capital

Wooden door

Phenol formaldehyde
resin adhesive

R&D expenditure

Related Capital

Constantly receptive of customer feedback, we
provide high-quality, environmentally-friendly
products. We also proactively address environmental issues such as climate change and contribute to the creation of a sustainable society.

Foundations of AICA

Hot melt adhesive
Polyvinyl acetate adhesive
Solvent-based CR adhesive

Chemistrycompanies

Toilet cubicle systems
Corian countertops

AICA COLORSYSTEM 105

Melamine
formaldehyde resin
adhesive

1936

51 14

300

Decorative Calcium
Silicate Board
CERARL

Jolyace
JOLYPATE
Film-coatedwaterproofing material

Human Capital

AICA’s Vision

Specialty &Performance Materials

Environmental
Wellbeing

Social and
Relationship Capital

AICA Distributors’ Organization(Japan)%HealthRelated CapitalWith its deep understanding of AICA products,
the AICA Distributors’ Organization supports
the distribution of our HPL, which boast the top
share of the Japanese market. We have also established a solid customer base with more than
10,000 companies overseas.

About AICA

AICA’s most distinctive feature is our ability to respond to social issues and needs by delivering unique products
through synergies between performance created by our core technologies: synthetic chemistry technologies andresin design technologies, and design in the broader sense, including ease of use as well as beauty of color andpattern.

Overseas expansion

Financial
CapitalManufacturing
CapitalOperating cash flow

Cash and cash equivalents

19.8

47.9

billion yen

billion yen(FY2022 Results)

AICA Report 2023

18

AICA’s Vision

AICA’s 10 years Vision and Medium-TermBusiness Plan

New Medium-Term Business Plan is the 3rd phaseof AICA’s 10 years Vision

FY2026 Forecast

300 billion yen
90th anniversary

AICA’s 10 years Vision

FY2022 Result

In April 2017, AICA established AICA’s 10 years Vision with the goal of FY2026, the 90th anniversary of the company.
With the aim of transforming into a solid, robust management structure that will not be easily influenced by trends in theJapanese construction market, in the Chemical Products segment, we will aim to become Asia’s top manufacturer of resins for the construction sector, which supports people’s lives and social infrastructure. We will also grow non-construction
sectors such as automotive, household goods, and electronic materials. In the Laminates & Building Materials segment, weare aiming for further business growth as a “solution provider for space design” manufacturer that can provide comfort andsafety to residential and non-residential living spaces.

174.6 billion yen

151.6 billion yen

Consolidated ordinary profit

18.3 billion yen
9.9%

Overseas sales ratio

30.8%

84.1

Chemical Products
segment
109

FY201682.9

FY2017billion yen

87.5

76.7

74.8

125

FY2018103.9

FY2019141.3

145

FY2022

FY2023122.3

Net sales

175

billion yen

90.4

FY2020

FY2021

AICA’s Vision

ROE

105

92.1

80.8

300 billion yen
30 billion yen
10% or more
45% or more

Net sales
100.7

174.6 billion yen
82.3

Financial targets in 10 years (initial targets established in April 2017)

Consolidated net sales

Laminates & Building
Materials segment

214.5 billion yen
191.3 billion yen 191.5 billion yen

151.6 billion yen

FY2026250 billion yen(Forecast)
242 billion yen

151.6 billion yen
80th anniversary

163.7 billion yen

FY2016(Forecast)

FY2020 Result

NEXT JUMP
1500
FY2016 Result

About AICA

AICA’s 10 years Vision

300 billion yen

242 billion yen

FY2026

Our future Vision at FY2026

1st Medium-Term Business Plan

Chemical Products segment

Laminates & Building Materials segment

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

The Laminates & Building Materials Business will continue
to grow as a “solution provider for space design” that canoffer comfort & safety in residential & non-residential living
spaces.

Utilizing capital tie-up
and M&A

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

3rd Medium-Term Business Plan

Results of 2nd Medium-Term Business Plan
Financial targets and Results
The net sales target for the 2nd Medium-Term Business Plan wasachieved one year ahead of schedule due to successful developmentin overseas and other growth markets. Sales of AS Products*2 andordinary profit are on track with planned targets. On the other hand,profitability remained issues due to soaring raw material prices. In
addition, ROE fell due in part to the impact of impairment losses. As aresult, ROE is expected not to achieve the planned target.

FY2022 (results)

FY2023 (initial targets)

Status6.9%

Approx. 10%

Poor

135.2 billion yen

115 billion yen

Very good

21 billion yen
24 billion yen

Fair

Ordinary profit

19.3 billion yen
22 billion yen

Net sales

242 billion yen

240 billion yen

Very goodROE
Net sales of Overseas andSpecialty & Performance Materials*1
AS Product*2 Sales*1

Foundations of AICA

We will continue to enhance the collaboration between the Chemical Products segment and theLaminates & Building Materials segment to develop unique products that contribute to society.

Business collaboration

2nd Medium-Term Business Plan

Fair

*1 Simple total of net sales before elimination of intercompany transactions *2 Aica Solution products

Materialities
Group Collaboration &Operation Base
Enhancement

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

Compliance

Human Resources
Development

QEO management

Increase corporate value

19

AICA Report 2023

R&D investment

Healthy financial base

IT infrastructure investment

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

Globally competent human resources

Responsibility to
stakeholders

Technology and material cooperation

Diversity

Investment
Capital investment and business investment increased
as a result of a large increase in business investment, including M&As. We were able to lay the foundation for sustainable growth by aggressively investing cash earned by
the company in Japan in the fast-growing Asian market.

Business investment*3
Capital investment*3

FY2013–FY2016

FY2017–FY2020

FY2021–FY2022(results)

FY2021–FY2023(initial targets)

1.07 billion yen
3.57 billion yen

5.32 billion yen
6.75 billion yen

7.33 billion yen
7.9 billion yen

5.66 billion yen
7.66 billion yen*3 Three-year annual average

Professional human resources

We will emphasize engagement with stakeholders, and promote management which
contributes to local communities and enhances CS and ES.
Corporate governance enhancement

Data Compilation

Optimize production & logistic systems

We have incorporating seven Materialities (key issues) into the Medium-Term Business Plan which integrate financial and non-financial factors, and worked to improve them. On the non-financial front, although the entire AICA Group has made progress inbuilding a foundation to improve soundness, the speed of social change has been rapid, causing some related issues to remain.
(
Please refer to pages 25-26 for details.)

Harmony with local communities

Improvement of CS & ES

3rd Medium-Term Business Plan Formulated One Year Ahead of Schedule
FY2023 was originally supposed to be the final year of the 2nd Medium-Term Business Plan “Change & Grow 2400.” However, since weachieved the plan’s sales target one year ahead of schedule and wanted to quickly respond to the rapidly changing external environment,
we have formulated and transitioned to the 3rd Medium-Term Business Plan “Value Creation 3000 & 300” which starts in FY2023.
AICA Report 2023

20

AICA’s Vision

AICA’s 10 years Vision and Medium-Term Business Plan

New Medium-Term Business Plan “Value Creation 3000 & 300” (FY2023 to FY2026)
As the final step toward realizing AICA’s 10 years Vision, we have formulated our Medium-Term Business Plan “Value Creation 3000 & 300” which includes financial targets and basic policies to be achieved and implemented over the four years, andlaunched in April 2023. The basic policies of the new Medium-Term Business Plan are Improvement of Profitability, Creationand Expansion of Growth Businesses, and creation of a sound business infrastructure for responding to climate change andbuilding a human capital foundation. By steadily implementing these measures, we will strive for sustainable growth and further
enhancement of corporate value.

Managerial KPIs
Financial Targets
Net sales

300

Ordinary profit

30

billion yen

AS Product*1 Sales*2

28billion yen

billion yen

242 billion yen in FY2022

22 billion yen in FY2022

19.3 billion yen in FY2022

In formulating our new Medium-Term Business Plan, we evaluated issues that we recognize as important. While there
are different issues associated with each type of capital, but in particular, we recognize human capital and climate change
response in natural capital are major issues that we must urgently focus on.

Overseas net sales ratio

ROE

ROIC

Internal resources and assets

External resources and assets

Manufacturing Capital

Human Capital

Financial CapitalSocial and Relationship Capital

Natural Capital aunch ofLnext-generation
large-scale coreproducts
Creation of brandvalue for products
other than highpressure laminate(HPL) in Japan
Accumulation ofknowledge
Quality / Safety ging plants
ADelay inautomation
Optimizationof production
systems
DX*
ImplementationR ecruiting anddeveloping ofleaders, globallycompetent humanresources, andprofessionals
Improvement ofengagement
D &I promotion

Deteriorating
capital efficiency
Investment
impairment risk
Foreign exchangerisk hrinking of Japanese woodenSfurniture market
Increases in raw material, energy,
distribution, and other costs
Changes in environment-related
laws and tax systems
Worsening skilled worker
shortageDecline in number of new
housing starts in Japan(800,000 dwellings)

 ransition to lowT
carbon societyIncreasing natural
disaster risks
Shift to biomass
products and lowcarbon emission
products

Urgent issues

or moreApprox.

51.2% in FY2022

Responding to
Climate Change

2 Creation and Expansion of Growth Businesses

3 Establishment of a Sound Business Infrastructure
We aim to become a sustainablecorporate entity by making improvements in response to the seven Materialities (key issues).
In particular, we will focus on responding to climate change and building ahuman capital foundation.

Responding to Climate Change
Responding to climate change
is essential element for our purpose. We have decided to dedicate ourselves more in this area.
We declare “Carbon Neutrality”
by 2050 and reduce green housegas emissions by 30% comparedto FY2022 levels by FY 2030.

billion yen(four-year cumulative total)

Human capital investment*2

Engagement score*3

2

4

4.0

billion yen(four-year cumulative total)

points or more

3.9 points in FY2022*1 Aica Solution products *2 AICA Kogyo Co., Ltd., non-consolidated *3 Maximum score is 5 points

Financial Targets by Segment
Profit growth rates for both Chemical Products and Laminates & Building Materials have been set higher than sales growth rates
with the goal of improving profitability given priority.
We have also added EBITDA, an indicator for tracking added value and earnings power performance, as a KPI in order to provide
a clearer financial picture from here on.
(Unit: 1 million yen)

Net sales
Operating profit*4

Chemical Products

FY2023
Forecast

year on year

FY2026
Forecast

CAGR

141,312145,000

102.6%

175,000

5.5%

7,494

7,600

101.4%

12,00012.5%

106.9%

17,300

FY2022–FY2026

5.3%

5.2%
11,7007.8%

8.0%

100,743

105,000

104.2%

125,000

5.5%

Operating profit

16,74017,900106.9%

22,500

7.7%

Operating profit margin

16.6%

17.1%

EBITDA

19,56020,500EBITDA margin

19.4%

19.5%

EBITDA margin
Net sales*4

Laminates &Building Materials

FY2022
Result10,946

Operating profit margin
EBITDA

Building a Human Capital Foundation
With recognizing “human capitalis the principal” for AICA’s sustainable growth, we will develope
organization through strengthening existing resources and new
hirings. Through strong engagement by those diverse resources,
we will lead innovation.

14

0.87 billion yen in FY2022

In both Chemical Products and Laminates & Building Materials segments, we will actively invest in promising market
where we can leverage our strength. Looking ahead to our100th anniversary, we will formulate and develop new profit
generating pillars that can drive our sustainable growth.

Non-financial

Environmental investment

Data Compilation

In our four segments; Chemical Products – Japan/Overseas,
Laminates & Building Materials – Japan/Overseas, we will
improve profitability by widening added value and optimizing
capital allocation. We aim to stretch profit margin in line withmarket characteristics and balancing to allocate capital.

GHG Emissions Reduction(Scope 1&2)

Foundations of AICA

1 Improvement of Profitability

8.1% in FY2022%(compared with FY2022)

Building a Human
Capital Foundation

Financial

8%

Non-Financial Targets* Digital transformation

AICA intends to establish a position as a unique manufacture andachieve 300 billion yen (3000 oku yen in Japanese) in sales and 30
billion yen (300 oku yen in Japanese) in ordinary profit through the continuous “creation” of new added “value”.

Approx.

%6.9% in FY2022

Urgent issues

Fundamental Policies

10

AICA’s Vision

Intellectual Capital

50%

About AICA

Recognizing Issues in the New Medium-Term Business Plan

6.9%
12.1%

9.9%

18.0%

104.8%

26,400

7.8%

21.1%

*4 Operating profit before deduction of unallocated operating expenses

21

AICA Report 2023

AICA Report 2023

22

AICA’s Vision

AICA’s 10 years Vision and Medium-Term Business Plan

Medium-Term Business Plan Basic Policies

 1 Improvement of Profitability 2 Creation and Expansion of Growth Businesses
We will improve our business portfolio and achieve sustainable growth by working to improve profitability and create andexpand growth businesses.

Profitability and Growth Potential Performance and Future Expectation
Profitgrowthrate

Future Expectation

Laminates &Building
Material(Overseas)

Chemical
Products(Overseas)

Laminates & Building
Materials (Japan)

Woodworking/Furniture

Bonding and Joining
Technologies

Construction

Infrastructure andCivil engineering

Sanitary
materials

Automobiles

Cosmetics

HouseholdgoodsElectronicmaterials

Overseas growth

FY2022

Japanese

FY2026

Japanese

Overseas

The
Overseas
Chemical
Products segment
is expected to
grow by

1.3x*2

Overseas*2 Based on comparison of accumulated net sales prior to consolidation elimination

Laminates & Building Materials Segment

Chemical Products(Japan)Profitability: Operating profit rate before consolidation and elimination
Profit growth rate: Average annual operating profit growth rate overeight years
Circle size indicates size of operating profit

Laminates & Building Materials Segment

Thorough cost reductions, product reorganization, andappropriate setting of sales prices
Shift to high value-added products, including AS products

Increase earnings by expanding high value-added products,
including AS products*1
Expand market share of products with high profit margins,
including HPL and CERARL
Deployment of Japan Technology
Optimization of production at each site

Product range

Changes in sales
over the 10-year period
from FY2012 to FY2022

FY2023–FY2026 measures

HPL

13.0 billion yen → 32.2 billion yen
2.5x increase

Establish brand in the floor market by utilizing thestrengths of HPL
Increase sales to 30 billion yen in the overseas
marketDecorative boards, architectural films, etc.

15.1 billion yen → 12.5 billion yen
0.8x decrease

Cultivate the architectural film market

CERARL

15.8 billion yen → 21.7 billion yen
1.4x increase

Cultivate the non-residential and renovation markets
Develop new ceiling market by utilizing the strengthsof CERARLTransfer technology overseas for full-scale deployment

1.1 billion yen → 7.8 billion yen
7.4x increase

Capture demands for non-residential pertaining tosafetyDevelop new ceiling market by utilizing synergies
between the inorganic technologies of groupcompanies and the chemical technologies ofAica Kogyo

Mainapplications

Furniture,
fixtures,and walls

Walls
Noncombustible / fire retardantdecorative panels

HPL fabricatedproducts

Building
and housingmaterials*3

Former countertops,
postform product group11.3 billion yen → 21.3 billion yen
1.9x increase

Former fittings & interior housingmaterials product group

6.4 billion yen → 5.2 billion yen
0.8x decrease

Data Compilation

Chemical Products Segment

In the Laminates & Building Materials segment, we will implement growth strategies that respond to challanges in both Japaneseand overseas markets. As AICA holds top share of HPL market in Japan, we will flexibly respond to market changes by making themost of our technological and manufacturing capital, and grow by rearranging our business portfolio to meet market needs.
In Japanese market, as we anticipate a shrinking construction market, we will further accelerate the development and sales expansion of on-site construction type products including walls, floors, and ceilings. Leveraging our experience in successfully capturing themarket by extending the application of our HPL technology for woodworking and furniture to CERARL for walls, we aim to establish abrand in the floor and ceiling markets that we entered in recent years by further expanding the applications of our existing products,
and expand highly profitable businesses. In the overseas market, we will expand our business with a sense of urgency by deploying
Japan Technology used for HPL, CERARL, and fabricated products in the Asian market where economic development is leading tobetter designs and higher quality. Through proactive investment and production base optimization, we will steadily capture demand in
the Asian market and expand our overseas business at a higher growth rate than our Japanese business.

Expand sales by capturing the need to reduce onsite processing labor*3 Product groups were integrated into “Building and housing materials”*1 Aica Solution products

23

AICA Report 2023

AICA Report 2023

Foundations of AICA

Overseas

In the Chemical Products segment, we will continue to focus on the non-construction sector, which is a growth market,
and overseas businesses, in order to overcome challenges
such as the difficulties created by the contraction of Japanese
woodworking and furniture market and dependence on Japanese construction market. We will apply our bonding andjoining technologies we have cultivated in the woodworking
and furniture and construction fields since our founding, andwill further develop non-construction sector, including automotive and electronic materials, which are expected to grow.
Overseas, we aim to achieve dramatic growth by capturing
demand in Asia, where economic growth is expected, by
maximizing the effects of investments and group synergies,
as well as by introducing new products that meet local needs.

AICA’s Vision

Profitability

The AICA Group’s biggest challenge is improving profitability. In order to achieve sustainable growth, we believe it is necessary to builda resilient business system which can respond to changes in the business environment. We will further focus on fostering a corporate
culture that emphasizes the ability to generate profits on a sustainable basis. At the same time, we will improve our competitiveness byimproving our product mix, promoting cost reductions, setting appropriate sales prices, and optimizing/improving production efficiency.
In Japanese Chemical Products market, since the ratio of general-purpose products is high with many competitors in the market,
there are issues in terms of profitability. In order to make business improvements in this market, we will strengthen profitability management for each resin and promote structural reform through selection and concentration, while focusing on management resources ondeveloping and expanding sales of high value-added AS products*1. In the primary source of revenue of Japanese Laminates & Building
Materials market, we will strive to differentiate our products by developing new product fields by applying our know-how and technologies to peripheral areas while maintaining a highly profitable business model established by capturing customer needs. In addition, we
will further expand our share of high pressure laminate (HPL) and CERARL, which have high profit margins and have the top market
share, and improve the product mix. Overseas, since both the Chemical Products market and Laminates & Building Materials market
are expected to grow in the future, we will work to expand our market share by increasing our manufacturing capacity. Specifically, in theoverseas Chemical Products market, we will expand high value-added products such as phenol formaldehyde resins and hot melt adhesives, a product area where AICA can demonstrate our strengths, and increase profitability by improving group synergies in raw material
procurement. In the overseas Laminates & Building Materials market, we will maximize synergies among our Group by accelerating the
deployment of Japan Technology from Japan and optimization of production bases in Japan, China, Thailand, Indonesia, Vietnam, andIndia. In addition, we will achieve a differentiation strategy in the high-end product market segment, which is expected to grow, to expand
our market share of HPL in each country.

Expand market share by strengthening our manufacturing
capacity in Asian countries
Expand high value-added products, including phenol
formaldehyde resins and hot melt adhesives

Chemical Products Segment

Profitability and Growth Analysis by BusinessApproaches to Improving Profitability

Japanese

In order for a company to achieve sustainable growth, it must constantly create growth businesses and reorganize its business portfolio.
We will focus on helping to solve and entering and cultivating untapped markets, create growth businesses for chemical product segment and
Laminates & Building Materials segment in a well-balanced manner both in Japan and overseas, and build a foundation for sustainable growth.

About AICA

In formulating the new Medium-Term Business Plan, we had reevaluated the profitability and profit growth rate of each business byusing the operating profit margin and the eight-year operating profit
average annual growth rate of each business.
In Japanese Chemical Products market, we have confirmed that
there are issues as profitability and profit growth rate are low dueto the maturing market and the surge in raw material prices in recent years. In the overseas Chemical Products market, profitability
and profit growth rate are considered to be stagnant due to many
investments that have not yet been amortized. However, we expect
improvements due to the ever-increasing effectiveness of the investments we have made.
In Japanese Laminates & Building Materials market, we havemaintained high levels of profitability and were able to reconfirm
that this business area is our profit generating pillar. In the overseas
Laminates & Building Materials market, despite maintaining highgrowth potential due in part to the effects of M&A, there is still room
for improvement in profit margins.
After recognizing issues associated with the four markets ofChemical Products – Japan/Overseas, Laminates & Building Materials – Japan/Overseas, we will allocate investments based onadequate priorities, review our business portfolio in a timely andappropriate manner, and accelerate growth while further enhancing
profitability to achieve the financial targets set forth in the Medium-Term Business Plan and AICA’s 10 years Vision.

Approaches for Creation and Expansion of Growth Businesses

24

AICA’s Vision

AICA’s 10 years Vision and Medium-Term Business Plan

Medium-Term Business Plan
Basic Policy

34Creation of a Sound Business Infrastructure

Strengthening the Foundation for Sustainable Growth by Integrating
the Financial with the Non-Financial

Provide Economic Value

Related pages ▶

P.21–24, P.27–28

Previous Medium-Term Business Plan (Final year of the plan: FY2023)
TargetFY2022 Result

Ascertain and improve time and spending for
education and training at all Group companies

Completed the creation of systemdesign to ascertain them

Creation and operation of skills lists by division andby employment grade

Created skills list for important
positions

Conduct and make use of employee satisfaction
surveys at all Group companies

Conducted surveys and held
information sharing meetings forgroup companies in Japan

Previous Medium-Term Business Plan (Final year of the plan: FY2023)

New Medium-Term Business Plan (Final year of the plan: FY2026)

Indicator

Indicator

TargetNet sales

300 billion yen

Ordinary profit

30 billion yen

Overseas net sales ratio

50% or more

TargetFY2022 Result

TargetHuman capital investment*

4 billion yen (4 years cumulative total)

Engagement score

4.0 points or more

Labor productivity*(Added value / Number of employees)

22.8 million yen or more per person

Overseas training program participants*

100 or more

Percentage of women recruited to newgraduate career-track positions*

30% or more
(4 years cumulative total)

Childcare leave acquisition rate*

Male: 70% or more, Female: 100%

240 billion yen

242 billion yen

Ordinary profit

24 billion yen

22 billion yen

ROE
ROE

Approx. 10%

6.9%

Dividend payout ratio

Approx. 50%

69.3%

Previous Medium-Term Business Plan (Final year of the plan: FY2023)

Approx. 10%
Approx. 8%

Dividends

Continue progressive dividends
without reducing dividends

Related pages ▶

P.17, P.29–30

Previous Medium-Term Business Plan (Final year of the plan: FY2023)

New Medium-Term Business Plan (Final year of the plan: FY2026)

Indicator

TargetFY2022 Result

Indicator

TargetSales of AS products*

21 billion yen

19.3 billion yen

Sales of AS products*

28 billion yen

Defined SDGs-oriented products of groupcompanies and completed setting sales targets

Develop new recycling methods for mainstay products

TargetFY2022 Result

Indicator

TargetCapital investment and digitization
investment that will contribute toautomation and labor-saving*

800 million yen
or more (3 years
cumulative total)

393 million yen (2 years
cumulative total)

Capital investment and digitization
investment that will contribute toautomation and labor-saving*

1 billion yen or more
(4 years cumulative total)*Aica Kogyo Co., Ltd. [Non-consolidated]

6

Strengthen Governance

Related pages ▶

Related pages ▶

Previous Medium-Term Business Plan (Final year of the plan: FY2023)
TargetFY2022 Result

Indicator

TargetBCP drills for extreme weather
events and natural disasters

Conduct drills at all
consolidated production
sites at least once a year

Conducted BCP drills at all sites

BCP drills for natural
disasters

Conduct drills at all consolidated
production sites at least once a year

Formulation of BCPs for new consolidated production sites

Started formulating BCPs

Enhance policies, regulations, and systems related to group governance, including strengthening efforts to respect human rights, andstrengthen audits

Enhancement of group governance rules*

Issued the AICA Compliance Casebook
and completed the restructuring of theoverseas Internal Whistleblowing System.

Conduct sustainability surveys of suppliers on a regular basis andaddress issues

Digitization investment to help
strengthen security*

820 million yen(2 years cumulative total)

Deepen information security measures and expand/strengthen themthroughout the group

New Medium-Term Business Plan (Final year of the plan: FY2026)

Indicator

TargetFY2022 Result

Indicator

TargetGHG emissions revenue
intensity (Scope 1&2)

Reduce 10% from FY2020

25% reduction

GHG Emissions(Scope 1&2 on absolutevolume basis)

Reduce 14% from FY2022

Establish calculation methods for Scope 3 emissions anddevelop emissions reduction measures

Started collecting necessary data fromoverseas group companies in order toexpand the scope of aggregation

Industrial waste emissions
revenue intensity

Reduce 10% from FY2020

6% reduction

Water withdrawal revenue
intensity in high-risk areas

Reduce 6% from FY2020

32% reduction

300 million yen(3 years cumulative total)

Data Compilation

Previous Medium-Term Business Plan (Final year of the plan: FY2023)

Perform scenario analysis aimed at net zero GHG emissions(Scope 1&2 on absolute volume basis) by 2050

New Medium-Term Business Plan (Final year of the plan: FY2026)

Indicator

P.42-48

To achieve carbon neutrality by 2050, we will consider and implement fundamental measures to reduce greenhouse gas (GHG) emissions.
We will prepare for climate change related risks and focus on product development to seize related business opportunities.

Completed a financial impact
assessment. Conducted climatechange simulations and set
medium- to long-term targets thatreflect the results

P.37–41, P.57–63

For the further strengthening of group governance, we thoroughly enforce rules concerning the management and supervision of group companies
and transfer of power to raise their effectiveness. In addition, we take various measures to reduce potential risks, such as enhancing our compliancepolicies, strengthening our BCP to prepare for natural disasters and cyber attacks, and strengthening cooperation with suppliers.

* Aica Kogyo Co., Ltd. [Non-consolidated]

Responding to Climate Change

New Medium-Term Business Plan (Final year of the plan: FY2026)

Indicator*Aica Kogyo Co., Ltd. [Non-consolidated]

7

Quality Assurance and Occupational Safety

Related pages ▶

P.56, P.64

To ensure “product safety and quality” and “employee safety,” which are the missions of a manufacturing company, we strengthen governance and training systems, and foster a corporate culture that does not neglect the basic requirement of complying with market demand,laws and regulations, and procedures.
Previous Medium-Term Business Plan (Final year of the plan: FY2023)

Set Scope 3 emission reduction targets and formulate
reduction measures

Indicator

Disclose carbon footprint data pertaining to our mainstay
products and develop products that reduce our carbon
footprint

Number of lost-time accidents

TargetQuality improvements based on customer satisfaction
surveys
Fewer than previous
year (19 or less)Establishment and operation of departmental training
programs*

New Medium-Term Business Plan (Final year of the plan: FY2026)

FY2022 Result

Indicator

Implemented quality improvements
based on customer satisfaction
surveysTargetAchieve the defect reduction targets set at all sites

Increased to 20

Serious work-related
accidents

0

Formulated and executed quality
training plans for each department

Number of lost-time
accidents

Reduce number of accidents to half
the number for FY2022 (10 or less)*Aica Kogyo Co., Ltd. [Non-consolidated]

25

AICA Report 2023

Foundations of AICA

To embody the concept “create new value and contribute to society” which we declared in our Corporate Philosophy, we identified social
issues through engagement with our various stakeholders and contribute to the realization of a sustainable society through providing valuethat will help solve issues through our business activities.

Define SDGs-oriented products and Set thesales targets

DX Implementation

We leverage digital technologies to further improve productivity and strive for the transformation of our business activities. We also work to automate our production sites and improve operational efficiency through data accumulation to boost corporate competitiveness, anticipating that theworking population will decline in the near future.

ROIC

Help to Solve Social Issues with Products

5

AICA’s Vision

Net sales

3

New Medium-Term Business Plan (Final year of the plan: FY2026)
Indicator*Aica Kogyo Co., Ltd. [Non-consolidated]

We work to expand sales revenue and generate profit through providing high-value-added products and productivity improvements. We also properly distribute the profits thus generated to shareholders and employees, and aim for sustainable development by investing in growth businesses.

2

P.51-55

As we consider human resources to be a company’s most vital management resource, we strengthen personnel management in order to increase
the sustainability of the company. Also, we focus developing human resources capable of making innovations and create environments and organizations where diverse personnel can thrive so that the company can grow together with employees.

*Please refer to our website regarding the process for selection of materialities.

1

Related pages ▶

About AICA

Amid the growing spotlight on social sustainability and in light of the business environment in which greater emphasis is being placedon corporate social responsibility, AICA has incorporated our materialities into the Medium-Term Business Plan to integrate financial
and non-financial factors and address business activities and sustainability as one. We aim to be a sustainable corporate entity that has
high tolerance for change, with a business infrastructure that has been reinforced by enhancing the driving force of our sustainability
initiatives and steadily implementing these measures.

Building a Human Capital Foundation

AICA Report 2023

26

AICA’s Vision

AICA’s 10 years Vision and Medium-Term Business Plan

Capital Policy

Medium-Term Business Plan

Capital Policy (1): Maintain financial soundness

We will implement a capital policy that emphasizes a balance between “maintaining financial soundness,” “improving of capital efficiency,” and “focusing on shareholder returns” in order to maximize enterprise value.

Cash Allocation

NEXT JUMP 1500 (FY2013–FY2016)
Annual average CF

C&C 2000 (FY2017-FY2020)
Annual average CF(million yen)

60,00060,000Stable financial base

50,00047,64650,00040,00040,00030,00030,00020,000

Dividend
3.4 billion yen per year 18,981

14,313

10,00010,491(3,822)①②

20,000③④① Operating CF ② Investment CF ③ FCF

17/3⑥

50,00042,42030,00020,000①②(1,642)③④ Financial CF ⑤ Increase/Decrease④⑤

15,769

7,056

21/3
⑥

3,368

(8,713)

0
17/4
⑥

①

②

③

(5,234)
④

⑤

21/4
⑥

23/3
⑥

AICA Report 2023

ROE
ROIC

ROE 6.9%
ROIC 8.1%(FY2022)

ROE > ROIC > WACC structure
Create ROE and ROIC that exceed the cost of capital and gain equity spreads to increase
shareholder value
ROE of about 10% (current cost of equity is about 6.3%)
ROIC of about 8% (current WACC is about 5.5%)

Free cash flow
(FCF)

7,056 million yen(two fiscal year average)

Investment disciplineー

Focus on investment projects that generate returns that exceed cost of capital

Portfolio managementーPromote portfolio optimization using ROIC by business/company

FY2020

FY2021

FY2022

6.11 billion yen
1.8 billion yen
3.32 billion yenーー

7.11 billion yen
4.2 billion yen
3.45 billion yenーー

8.69 billion yen
10.45 billion yen
3.99 billion yenー
0.87 billion yen

FY2023–FY2026 New Medium-Term Business Plan
Annual average
Four-year cumulative total

10 billion yen
5 billion yen
4.37 billion yen
5 billion yen
1 billion yen

Secure free cash flow to support aggressive investment for growth and increased shareholder
returns

Capital Policy (3): Focus on shareholder returns
To realize the return of profits to our shareholders and the sustainable growth of the company, we issue dividends with consideration for the consolidated performance of each period, payout ratios, and internal reserves. As a result, through FY2022, we have increased our dividend for 14 consecutive years andPrevious Medium-Termhave not reduced it for 25 consecutive years. Since
New Medium-Term Business Plan Measures
Business Plan Results
the continuity of stable dividends is emphasized in
Set the basic policy to maintainthe new Medium-Term Business Plan, “ContinuNo dividend reduction
progressive dividends without reducing
ation of progressive dividend payments without
for 25 consecutive years;
Dividends
dividends with emphasizing the continuity
Increase in dividend for 14
reducing dividends” has been added as a basicof stable dividends that have not beenconsecutive
years
policy. In addition, we will flexibly consider share
reduced for the past 25 years
buybacks based on stock prices. We will strive to
Acquired approx. 4 billion
further increase shareholder value by improving
Share buybacks
yen worth of treasury
Consider flexible share buybacks
capital efficiency and actively returning profits tosharesshareholders.

Data Compilation

Capital investment and business investment are the sources of sustainable growth and operating cash flow. For capital investment,
we will focus on investing in projects aimed at increasing manufacturing capacity, developing/manufacturing new products, and promoting automation and DX. For business investment, we will consider carrying out M&As in a wide range of fields of our Japaneseand overseas Chemical Products and Laminates & Building Materials segments with the aim of expanding our business domains andincreasing our market share. In particular, for investments designed for growth, we plan to to improve capital efficiency by focusing on
projects that generate returns that exceed cost of capital.
R&D investment will be made to further strengthen AICA’s expertise in Chemistry and Design, which are the sources of our value
creation, to develop large-scale products that support future growth, and to develop new products that meet market changes andneeds. We will improve the profitability and further growth of our overseas operations by deploying overseas intellectual property suchas technology, design, and trademarks, which are the source of the high profitability of our Japanese business, in a form that meets
local needs.
In the new Medium-Term Business Plan, we have set new targets for environmental investment and human capital investment as
non-financial management indicators. With regard to environmental investment, we will promote the use of renewable energy andenergy conservation in order to reduce GHG emissions to achieving carbon neutrality by 2050. In terms of human capital investment,
we will develop “globally competent human resources,” “leaders,” and “professionals,” promote diversity and inclusion, create anenvironment that contributes to elevate engagement, and invest in related systems.

27

New Medium-Term Business Plan Measures⑥ Cash and cash equivalents

Investment Plan

Capital investment
Business Investment
R&D investment
Environmental investment
Human capital investment

Previous Medium-TermBusiness Plan Results

Dividend
7 billion yen per year
CB 18 billion yen

10,0006,253 (7,588)(10,663)

50,99342,420We believe that capital efficiency-focused management is the most important factor in achieving sustainable enhancement ofcorporate value. By bringing management and employees together to continuously work toward achieving ROE and ROIC levels thatexceed the cost of capital, we will secure an equity spread for enhancing shareholder value. Specifically, management will optimize ourbusiness portfolio by making appropriate and prompt business decisions based on ROIC by business and group company, such as
aggressive business expansion, business continuation and maintenance, structural reform, and business withdrawal. We will promote
initiatives from a medium- to long-term perspective by developing an ROIC tree at business sites to instill autonomous, job-site-driven
management. In addition, by thoroughly implementing investment discipline with an awareness of the cost of capital, we will concentrate funds on highly effective capital and business investments centered on projects that contribute to the creation and developmentof growth businesses, thereby securing sufficient free cash flow and improving ROIC.

Foundations of AICA

13/4⑥

47,646

Dividend
6.6 billion yen per year

16,9160⑤

Continuing to make active
investments, enhancing
shareholder returns, andstrengthening the financialbase through the issuanceof convertible bonds

60,00040,00010,0007,154(3,325)0(million yen)

Active investment
and enhancement ofshareholder returns

Capital Policy (2): Improve capital efficiency

AICA’s Vision(million yen)

Change & Grow 2400 (FY2021 to FY2022)
Annual average CF

About AICAThe AICA Group allocates cash while taking into consideration maintaining financial soundness. Under the 1st Medium-TermBusiness Plan “NEXT JUMP 1500”, which covered FY2013 to FY2016, we created ample free cash flow to build a stable financial
foundation. During the 2nd Medium-Term Business Plan “C&C 2000”, which covered FY2017 to FY2020, we increased operating
cash flow to actively invest in growth and enhance shareholder returns. Under the 3rd Medium-Term Business Plan “Change & Grow
2400”, which covered FY2021 to FY2022, we raised funds from the bond market while actively making investments and providing
shareholder returns. Thus, in the past medium-term management plans, we actively allocated funds to investments and shareholder
returns while balancing cash on hand.
Under the new Medium-Term Business Plan “Value Creation 3000 & 300”, we will continue to maintain financial soundness andleverage our strength in generating a high operating cash flow to make growth investments that generate returns that exceed the costof capital and actively return profits to shareholders in an effort to continuously enhance enterprise value.

In order to build a management foundation that supports sustainable growth, we believe it is necessary to maintain financial soundness. In response to the increase in business risks in recent years due to the prolonged COVID-19 pandemic, changes in the world
situation due to the tense situation in Israel and Palestine, the invasion of Ukraine, and the worsening of climate change issues, wehave clarified the level of cash on hand required inPrevious Medium-Term
New Medium-Term Business Plan Measuresthe event of an emergency. In addition, in order toBusiness Plan Results
be able to raise funds for growth investment even
Secure liquidity for about two to three
Cash and cash
50,993 million yen
when economic conditions are severe, we believe
months of monthly sales to strengthen
equivalents(As of end-Mar. 2023)
that maintaining an appropriate rating is important.
our risk tolerance
To this end, we will maintain an equity ratio of 50%
58.1%
Maintain an appropriate rating and an
Equity ratioor more while utilizing interest-bearing debt.
(As of end-Mar. 2023)
equity ratio of 50% or more

40 billion yen
20 billion yen
17.5 billion yen
2 billion yen
4 billion yen

AICA Report 2023

28

Special Feature

SDG-Oriented Products
By providing products that help solve social issues,
we contribute to the formation of a sustainable society.

SDG-Oriented Products and AS Products

At AICA, we pursue a Corporate Philosophy by which we create new value and contribute to society through continuous innovation in the spirit of our philosophy of kyosei*. To manifest this philosophy in action, we take social issues earnestly and focus ondeveloping and providing products that contribute to solving them. In order to make these efforts more tangible, we have organized
the characteristics of our products in relation to the SDGs as shown below, and defined them as “SDG-Oriented Products.” We willcontinue to expand this category of products by leveraging our strengths in chemistry and design.

Products defined as “SGD-Oriented Products” include a variety of items ranging from those that support stable earnings to those offered from a long-term
perspective in anticipation of future growth. Among these, we classify productsthat will drive short- to medium-term growth in Japanese market as “AS (AICA
Solution) Products,” and we focus on developing and expanding sales of theseproducts in particular.

SDG-Oriented
Products
AS
Products

RelationshipbetweenSDG-Oriented
Products and
AS Products

Characteristics of SDG-Oriented Products
Environmentally-friendly• Effective Use ofForest Resources• High Durability and
Low Maintenance• Easier Construction

About AICA

* Please refer to page 3 for the meaning of kyosei

CERARL ON TILE method; the tile wall renovation
method with installing CERARL over existing tiles

Characteristics• Waste Reduction

12

When renovating old tile walls, the tiles normally need to be removed. We have developed CERARL melamine fire retardant decorative panels and a special adhesive called SE-1 to create a revolutionary renovation method that allows
these panels to be installed over existing tiles. This leads to reduction of industrial waste, reduction of noise, shortening of construction times, and reduction of costs, thereby reducing the burden on customers and the environment.

• Easier Construction

8•E xtending the Service
Life of Buildings• Biomass• Universal Design

New construction

Demolition

Reconstruction of foundation• Stone Resource
Conservation• Waste Reduction• Fire Prevention and Resistance• Solvent-Free• Health and ComfortConscious Spaces• Energy Conservation• Virus and Bacteria
Control

CERARL ON TILE
MethodRenovation

Apply wall materials

Noise
Takes time

Shortened
construction
time

Resourcessaving

Dust

Requireskilledworkers

People-friendly

Easy
construction

GHG is emitted during
waste disposal

We are actively promoting the use of plant-derived biomass raw materials, which are considered carbon
neutral resources because they absorb CO2 during the growth process. In particular, we are focusing on
improving the biomass content of HPL which is our main product. We are aiming to manufacture our HPL
exclusively from biomass material in the future.

PASSIVE WALL; the construction method conserves energy
and extends building service life by isolating the outside air

Characteristics• High Durability and Low
Maintenance

9 12• Biomass

9 12

There are two types of insulation: internal insulation and external insulation. External insulation is more airtight, which
improves the efficiency of air conditioning and heating in buildings and contributes to energy conservation. The PASSIVE WALL is an external insulation method in which the insulation material is placed on the exterior walls of a structure. The insulation is then coated using JOLYPATE, a wall coating material that is one of our main products. External
insulation contributes to extending building service life since the insulation material protects the frame of the building.

during growth

29

AICA Report 2023

Phenolformaldehyde
resin, the raw
Paper ＋ Melamine formaldehyde resin material of HPL,
Paper + Phenol formaldehyde resin is replaced withbiomass resin!

HPL cross section⇨ Carbon neutrality

PASSIVE WALL

Concrete

Absorbs CO2During waste combustion,
the CO2 absorbed by plants
during growth is simply
returned to the atmosphere.

Note: Reduction amount was calculated
assuming sales of HPL with a biomass
content of 75%. The value is calculated
by multiplying the difference in CO2emissions emitted from the waste
combustion of the product between
the conventional HPL and the HPL
utilized biomass raw materials, withregard of the amount equivalent to theuse of biomass raw materials is zero
emissions, by the current sales volume
of products that can be developed withthis specification.

The structural frame is protectedwith insulation material toprevent deterioration over time.

Energy Conservation
Reduces the impact of outside
temperature, improving air
conditioning efficiency

2

Protects buildings fromultraviolet rays, wind, and rain

The non-edible part (cob)is used to make resin

Thermal insulation on rooftop

3,200 t-CO per year

The edible parts of the corn(kernels) are mainly used as feed

Heat isretained

Heat isretained

Mitigation of outside temperature effects
Prevention of condensation

96,000 t per year
Due to ease of construction,
CERARL ON TILE Method
shortens construction time by:423,319 hours per year

Improved Indoor
Environment
Reduces temperaturefluctuations in buildings toprevent heat shock, etc.

Makes Insulation
Renovation Easy

Characteristics• Energy Conservation

7 13• Health- and Comfort-Conscious Spaces

3 11• Extending the Service Life of Buildings

9 11
Data Compilation

Extending the Service
Life of Buildings

CO2 generated during
product disposal reduced byusing biomass raw materials

Amount of industrial waste reduced
using CERARL ON TILE Method

Foundations of AICA

High pressure laminate (HPL) that utilizes biomass material

11• Fire Prevention and ResistanceNote: Calculated by comparing when a tile wallis constructed using CERARL ON TILE
Method with when a tile wall is constructedusing the conventional method. It is
assumed that this method was used
for about 10% of CERARL sold by thecompany. Industrial waste was assumed tobe tiles, cement mortar, and caulking agent.

Waste

Note: For details on each characteristic, please refer to our website.

Examples of How an SDG-Oriented Product Contributes to the SDGs

9 12

AICA’s Vision

Process of taking down tile walls once to renovate• High Durability and Low Maintenance

The amount of kerosene
used for heating reduced byinsulation renovation

42.9% per year
Note: Reduction amount was calculated
based on the results of comparing theenergy consumption of five households
before and after high thermal insulation
renovation of municipal housing
Sapporo (Satozuka Danchi Building
No. 14). In addition to the exterior walls
constructed using PASSIVE WALL
thermal insulation was also added to
the roof, under floors, around windows,
etc., which also have an effect on thecalculated result.

Insulation renovation work
can be performed without
residents having to leave
their households since only
exterior walls are insulated
AICA Report 2023

30

AICA’s Vision

Business Overview

Chemical Products segment

Business Performance
Net sales (billion yen)

Maximizing group synergies and deepening
profit structure reforms to achieve a highly
profitable business model.

122.3
109

2020

Adhesives

71.8%

2021

2022

2018

(FY)

Net sales

2019

145

2020

billion yen

2021

2022

(FY)

141.3 billion yen

Construction
ResinsOperating profit*1

FY2022

7.6

57.4%

In the AAPH
Group*3

billion yen

With the establishment of a subsidy system as a measure to address climate change andthe accelerating trend toward ZEB and ZEH, PASSIVE WALL, a wet-type exterior insulation
construction method that contributes to energy conservation and long building service life,
is showing strong sales performance. This method, which the exterior wall is coated withJOLYPATE, a wall coating material with sophisticated design, provides excellent heat insulationand design excellence. We have enabled customers to select CLIMATERIA STONE-ART, ahigh-grade design coating material that has been well received for its profound and delicate
texture, as a coating material, and are promoting further sales expansion of PASSIVE WALL.

Responses

Increased Use of Floor Coating Materials at State-of-the-Art Manufacturing Plants
Currently, many new semiconductor plant construction projects are underway inJapan. In electronic component factories and precision machine factories, it is essential
to take measures against outgassing generated from flooring and substrates in order toprevent machine malfunctions and product defects. The “Fabbrica SCR Floor Coating
Method” offers low-outgas performance and when cracks appear in the underlying
concrete, its elastic feature covers the cracks and prevents concrete exposure. We
were awarded with the Biomass mark (for products with 30% biomass content) in
February 2023 for Fabbrica and are further increasing the number of its applications.

Name of property: Headquarters factory building,
NAIGAI TECHNOS Co., jp Ltd.
Designer: Obayashi Corporation
Photo: Kenya Chiba

Installation image of Fabbrica Floor Coating SCR
MethodFoundations of AICA

 horough management of the profitability of each of our resins toTpromote profit structure reform
Focus on growth businesses by leveraging our business portfolio
Develop and expand sales of AS products and SDG-Oriented
Products that help solve social issues
Invest management resources in the development of core large
products
Expand overseas business through M&A, capital investment, andexpanding group synergies

Installation example of PASSIVE WALL

AICA’s Vision

Specialty & Performance Materials
Continuing Capital Investment and Business Investment to Expand EMC*4Group Earnings

AAPH Group Production Sites in Asia

Aica Nanjing Co., Ltd.
Building a new plant to increase production● Scheduled to start operating in 2026

Aica (Fujian) Co., Ltd.
Newly established as a manufacturing base for Phenol formaldehyde for bamboo materials● Scheduled to start operating in

spring 2024

AICA Dong Nai Co., Ltd.
Newly installed production
facilities for Phenol
formaldehyde resin forplywood● Operation started in April 2023

 ites that have been upgradedSExisting Sites

AICA Guangdong Co., Ltd.
Expanded and relocated to
double manufacturing capacity

Three Major Projects in China

As electronic components become smaller, market needs increase in modified
silicone resin adhesive for fine dispensing● Operation started in September 2023

AICA HATYAI CO., LTD.
R&D center established to speed
up development● Scheduled for completion in March 2024

The EMC Group possesses industry-leading technologies in the polyurethane systems(PUS) market for sports shoe soles. In October 2022, we set up a pilot line at VIET
NAM SUNYAD TECHNOLOGY LIMITED to prepare the system for speedy prototyping.
Although we have been exporting PUS products from our Taiwanese and Chinese bases
to Vietnamese shoe manufacturers who supply products to famous sports brands, weare now considering local production of PUS products at U-BEST VIETNAM POLYMER
INDUSTRY CO., LTD. We will strive to further expand sales by increasing productdevelopment speed and producing products locally for local consumption.
In addition, we are also making capital investments in the UV-curable resins business.
We are expanding our production lines as demand for UV monomers is increasing in
the regions where EMC operates. Production capacity, which is currently strained, will
be increased by 1.6 times with expanded production operations scheduled to start inJanuary 2024. Furthermore, the Daiyuan Plant of EMC manufactures UV-curable coating
materials from UV monomers, and we expect that the increased production will further
promote the use of raw materials produced within the Group. Through these efforts, we
aim to expand group synergies and improve profits.
*4 EVERMORE CHEMICAL INDSUTRY

Sports shoe soles made of PUS
Data Compilation

AICA Report 2023

2019

Expanding Sales of High-Value-Added Products that Help Solve Social Issues

Improving Profit Margins by Thoroughly Managing
Profitability and Expanding Product Applications

31

OthersSpecialty &8.7%
Performance
Materials

7.4

Construction Resins

Adhesives*3 AICA Asia Pacific Holding

7.3*1 Operating profit before deduction of unallocated operating expenses *2 Some product group categories were changed in FY2023 *3 AICA Asia Pacific Holding

Sales reached a record high due to the strong sales of JOLYPATE, a wall coating material, and continued recovery from the economic stagnation caused by the COVID-19 pandemic, price revisions, and the depreciation of the yen. In contrast, although operating
profit did not reach the planned target due to the inability to absorb the soaring increases in raw material and energy costs, it exceeded
the previous year’s results due to general cost reductions, distribution cost reductions, and other factors.

The AAPH Group, which is the driving force of our adhesives business,is increasing its production capacity in the phenolic resin business,
which is an important business. Among the group’s three major projects
underway in China, AICA Guangdong Co., Ltd. completed its expansion/
relocation and began production operations in September 2023. The newplant of Aica (Fujian) Co., Ltd., which is under construction, is scheduled
to start operations in the spring of 2024. In Vietnam, AICA Dong Nai Co.,
Ltd. installed production facilities for phenolic resin for plywood in April
2023. We aim to become the largest phenolic resin manufacturer in Asia
while expanding production volume and product applications.

7.1

12.6%

FY2023 Targets

FY2022 Results

Increasing Production Capacity of Phenolic Resin in the
AAPH*3 Group

103.9

8.1

About AICA

2018

Nobuyuki Omura

In FY2022, raw material prices continued to rise due to the impact ofhigh crude oil prices, the depreciation of the yen, the situation in Ukraine,and other factors, which affected profits particularly in the adhesives
business. We are working to improve profitability by thoroughly managing
the profitability of each of our resins, consolidating low-margin products,
reviewing sales prices, and improving our product mix. Also, we willdevelop and expand sales of products that meet market needs, such as
adhesives for electronic components and easy-removable hot melts.

7.4

6.9%

Director and Managing Executive Officer
President of the Chemical Products Business Unit

Lower profitability due to soaring raw material and energy prices
Sluggishness of certain markets due to economic trends
Changes in market needs, including climate change response
Cultivation of core products and creation of next-generation
large-scale products and new businesses
Increase profitability and growth potential in overseas markets

Sales by Product Range*2

90.4

We will thoroughly manage the profitability of each of our resins and promote structuralreforms to transform into a highly profitable business model. By creating synergistic effects
between our group companies in Japan and overseas in development, production, and sales,
we strive to achieve dramatic growth as we aim to become Asia’s No.1 resin manufacturer.

Challenges

Operating profit*1 (billion yen)
141.3

UV-curable coating agent used here for product labels

AICA Report 2023

32

AICA’s Vision

Business Overview

Laminates & Building Materials segment

Business Performance
Net sales (billion yen)

We aim to grow our Japanese business with high valueadded products and achieve dramatic growth in ouroverseas business by maximizing our Group synergies

82.3

87.5

84.1

92.1

16.1

Noncombustible / 26.3%
fire retardantdecorative
FY2022
panels

32.0%

2019

2020

2021

FY2023 Targets

2022

2018

(FY)

Net sales

2019

105

2020

billion yen

2021

2022

CERARL(FY)

Operating profit*1

21.6%

17.9

Decorative
plywood
12.4% boards,
architectural
films

About AICA

2018

President of the Laminates & Building Materials Business Unit

billion yen*1 Operating profit before deduction of unallocated operating expenses *2 Some product group categories were changed in FY2023

Strong sales of sophisticated design products, expanding the market share ofmelamine fire retardant decorative panels

FY2022 Results

Responses
 evelop and expand sales of AS products and SDG-Oriented
D
Products that respond to the changes in the market
Develop next-generation core large products and develop floor
and ceiling markets
Increase production capacity in Japan and overseas and increasepresence in the Asian market
Increase product supply capacity by maximizing group synergies

Overseas Markets
Responding to Strong Demand in the Region through Capital Investment
Foundations of AICA

Full-Scale Entry into the Floor and Ceiling Markets

Conceptual drawing of ALV’s new plant building

ALIP Opens Dubai Branch as the Group’s First Site in the Middle East

Installation example of CERARL FP Method:
Gransta Yaekita

ALIP is engaged in export and sales to Dubai and other Middle East region. In
August 2023, ALIP opened a branch in Dubai to expand business in the Middle East
where the HPL market is expected to grow due to the large population of young people
and the development of infrastructure. The company plans to increase sales in theregion to 550 million yen by FY2025 since the branch will enable speedy and detailed
delivery of products by having a fully stocked local inventory.

Data Compilation

Photo: JR East

Expansion of Fiore Stone Production LineThe market share of Fiore Stone, a engineered stone, has been expanding mainly
for use in kitchen tops found in luxury condominiums. Recognized for its superior
workability and physical properties, it continues to grow as the No. 1 engineered stonebrand in terms of market share in Japan, capturing demand for washbasin countersand reception counter use in offices, commercial facilities, hotels, airports, andother locations. In order to respond to strong demand, a new factory building will be
constructed in the Ibaraki Plant of AICA Interior Kogyo Co., Ltd. with an investment ofapproximately 770 million yen. This will increase production capacity by approximately
1.5 times over the current level. We will pursue further growth by expanding its
applications.

Example of CERARL CELLENT construction

Due to strong demand in the Asian region and the expected tight supply-demandbalance in Japan, we will expand the production line at Aica Laminates Vietnam Co.,
Ltd. ALV to double its production capacity. The total investment will be approximately
1.32 billion yen, with operations scheduled to begin in January 2024. In addition,
Aica Laminates India Pvt. Ltd. (ALIP) is expanding its facilities to meet the growing
domestic demand in India, a country that is increasing its presence in the international
community year by year. Total investment will be approximately 370 million yen, andproduction capacity will be increased by 1.6 times in FY2025.

Japanese Market

As Japanese wooden furniture market is expected to shrink and the number of new
housing starts is expected to decrease, we are focusing on developing new markets andapplications. In July 2019, we began sales of MELAMINE TILE, marking our entry into
the floor market. The product’s excellent economic efficiency and ease of installation,
coupled with a recovery in the non-housing market, as well as its reputation for helping
solve the social issue of labor shortages, has led to an increase in its adoption bycommercial facilities and restaurants. In 2022, we developed “CERARL FP Method”,
which is a dry-type installation method to apply CERARL on ceiling, and launched
KABITECT, a ceiling material with excellent mold-resistant performance, making a fullscale entry into the ceiling market. We aim to capture demand from train stations andstores in order achieve sales of 1 billion yen in the ceiling market in five years.

Sales of CERARL CELLENT, a melamine fire retardant decorative panel that has
evolved the design characteristics of CERARL, have been strong. CERARL is widelyused as a wall surface material for kitchens in homes, medical and nursing carefacilities, educational facilities, offices, and transportation facilities. CERARL CELLENT
is used in hotels, commercial facilities, condominium entrances, and other spaces that
require a high level of design. It is also increasingly being adopted as a replacement for
tile. We will continue to expand the market share of these panels.

AICA’s Vision

With the long COVID-19 pandemic showing signs of ending and economic activity returning to normal, sales of our main products
such as high pressure laminate (HPL), Fiore Stone, a engineered stone, and Smart Sanitary, a washstand for residential use, werestrong. Overseas, despite the impact of economic stagnation in the Chinese market, we were able to increase sales as a result ofstrong business performance in India and Southeast Asia. Furthermore, as a result of cost reduction activities and sales price revisions,both sales and profits in the Laminates & Building Materials Segment reached record highs.

AICA Report 2023

High-pressure
laminate (HPL)

100.7billion yen

Yuji Iwatsuka

33

Building &housing
materials

16.7

16.3

15.8

7.7%

Director and Managing Executive Officer

Changes in market needs, including climate change responseHigh dependence on Japanese market, HPL and CERARL
Tight product supply-demand balance in Japan and increased
demand in Asia
Take BCP measures and group synergies for raw material purchasing and production

Sales by Product Range*2

13.7

We will steadily grow our Japanese business while differentiating ourselves throughproducts that offer high performance and excellent design characteristics, and products
as well as construction methods that help solve social issues. By deploying Japan Technology and creating group synergies, we will enhance our presence in rapidly-growing
high-end markets in Asia and expand our overseas businesses.

Challenges

Operating profit*1 (billion yen)

100.7

Dubai Branch opening ceremony

Overseas Business Sales has been Expanding, Aiming for Further Progress
Sales in the Laminates & Building Materials market overseas have grown by approximately 3.5 times from 5.5 billion yen (FY2018)
to 18.8 billion yen (FY2022) in four years, with 30 billion yen in sales expected in FY2026. The demand for decorative panels that offer
sophisticated designs and high quality, a product category that we specialize in, is increasing in Asia. By leveraging the sales network,
production bases, technology, and brand power the we have built and acquired so far, we aim to further expand overseas sales by
establishing ourselves as a leading company in the HPL market in the Asian region.
Fiore Stone used for kitchen island counter

AICA Report 2023

34

Supplementary materials on sustainability at AICA are available at our website.

Foundations of AICA

HOME

Policy and Framework for Sustainability

Toward integration of business activities and sustainability

We recognize that it is our mission to fulfill the social responsibility required of corporations and to promote activities thatenhance the sustainability not only of our company but of the entire global environment. In April 2021, We established a Sustainability Policy to clearly indicate our basic principles and policies related to sustainability management. We will foster common
Group values by placing them as equivalent to our Corporate Policy.

“Kyosei*” is a word that we place at the core of our Corporate Philosophy, and we work
hard to embody this philosophy by helping to solve various social issues. Recognizing that
this ideology has much in common with the voluntary action principles of “human rights,”“labor,” “environment,” and “anticorruption” of the United Nations Global Compact (UNGC),
we announced our support of the UNGC in 2018. With this announcement, we committed
to proactively addressing the Sustainable Development Goals (SDGs) adopted by the UN
and embarked on activities aimed at achieving those goals.
We have identified issues to be addressed as materiality, taking into account various
social issues, including the SDGs. By setting targets for each materiality and incorporatingthem into the Medium Term Business Plan, we aim to integrate our business activities andsustainability promotion activities.

1 We address social issues through our business activities to contribute to the creation of a better society.
2 We have established “Compliance with laws and regulations,” “Respect for human rights,” “Harmony with society,” “Fairbusiness practice,” “Customer’s security and trust,” “Proper information disclosure,” “Protection of company information andproperty,” and “Environment and safety” as the basic principles of the Code of Conduct, and we base our actions on theseprinciples as shared values for all employees.

* Please refer to page 3 for the meaning of kyosei

3 We emphasize dialog with stakeholders, including customers, employees, shareholders, suppliers, business partners, local

communities, and local governments, and respond promptly to social needs and changes.

QEO Management System

4 We identify material issues from the perspectives of both corporate management and stakeholders, address those issues

alongside our business activities, and disclose our progress in addressing them.

A Sustainability Development Committee has been established as the central body for the development of more in-depth sustainability, and the entire Group is working toward the achievement of our materiality goals that integrate our business activities.
In April 2021 we changed the name of the committee from the CSR Promotion Committee to the Sustainability Development
Committee, with the President appointed as chair. We will assess the role that the company should play from a broader perspective, and the Group will work together to strengthen the corporate structure for sustainable development.

Board of Directors

Sustainability Development Committee

Various Committees
and Projects

Chair: Kenji Ebihara, Representative Director and President● Corporate Ethics Committee● Internal Control Committee● Information Management

Committee● Information Disclosure

Production Administration
Department

System Engineering
Department

Development Planning Division

Systems Division

DivisionI
Public Relations

Overseas Planning Division

Sales Division

Purchasing Division

Quality Assurance Division

Sustainability Development
Division

Legal Division

General Affairs Division

Human Resources Division

R

Climate Change Response Committee

Coordination(BCP) Committee
Committee● C&C Promotion Committee

Development
Committee

Management from
Executive Perspective
E: Environment, S: Society,
G: GovernanceBusiness Infrastructure
Enhancement
Participation
Management from
On-site Perspective
Q: Quality, E: Environment,
O: Occupational Health and Safety

QEO
Supervision
Group Representatives
Meeting
Operation

QEO
Committee

Toward the strengthening of initiatives toward climate change issues● QEO Committee● Security and Trade Control

Committee● Work Style Reform
Promotion Project● DiversityPromotion
Projectetc.

We consider “Responding to climate change” to be an important issue that needs to be addressed urgently. In the new
Medium-Term Business Plan, we have identified this to be an issues that should be particularly focused on among the materialities and incorporated it into management indicators. We will grasp latest trends for responding to climate change throughparticipation in international frameworks and initiatives, and strengthen our response to related risks and opportunities throughthe Climate Change Response Committee, which has been established under the Sustainability Development Committee.
Please refer to pages 42-48 for details of specific initiatives.)(
Endorsement of TCFD recommendations

Sustainability Officers at Group companies
in Japan and overseas(As of October 2023)

AICA Report 2023

Report● Overseas Group Governanceetc.

Heads of departments and divisions

Supervision Sustainability

Board of Directors

In May 2020, we declared our endorsement of the recommendations of the
Task Force on Climate-related Financial Disclosures (TCFD).

Participation in climate change initiatives
From January 2019, we have joined the Japan Climate Initiative.

AICA Report 2023

36

Data Compilation

Corporate Planning Division

Committee● Business Continuity Plan

Relationship between QEO Management System
and Sustainability Activities

Foundations of AICA

Supervision

AICA has built our QEO management system, which operates with a trinityof quality (Q: ISO 9001), environment (E: ISO 14001), and occupational healthand safety (O: ISO 45001) management systems. Under this management
system, the production, R&D, sales, and administrative divisions work as aunited team. This structure is the main axis of the Company’s activities tostrengthen its business infrastructure and is one of the measures included in
AICA’s 10-Year Vision. Through the implementation of this management system, as well as complying with laws and regulations, we conduct risk hedging
and kaizen activities, promote the enhancement of quality, improvement ofenvironmental indicators (reduction of greenhouse gas emissions and industrial waste, reinforcement of water management, etc.), and the creation ofsafe and comfortable workplaces, and strive to strengthen our business infrastructure from the perspectives of both risk and opportunity.
A QEO Committee, managed by the Sustainability Development Division
and Quality Assurance Division, has been established as the central body forthe promotion of the QEO management system. The committee conducts
activities to achieve the policies and goals that have been formulated on thebasis of this management system. A QEO Group Representatives Meeting isconvened once every six months, attended by AICA’s top management andrepresentatives of Group companies in Japan and overseas. While confirming QEO achievements and the status of improvements at individual Group
companies, the meeting’s attendees also exchange information by sharing
case studies, and discuss and decide on countermeasures.

AICA’s Vision

Sustainability Development Framework

Secretariat: Sustainability Development Division

About AICA

Basic Approach to Sustainability

ReportSustainability Policy and Framework

https://www.aica.co.jp/company/sustainability/basic-thinking/Sustainability Policy

35

Sustainability

Supplementary materials on risk management are available at our website.

Foundations of AICA

Sustainability

HOME

Risk Management
Basic Approach to Risk Management

Business risks (For details on each risks, please refer to our website.)

In order to mitigate losses due to unforeseen events, we established a Risk Assessment Conference, which is attended by
the President and personnel of organization responsible for management of related risks. A Group-wide risk survey is conducted
once a year, which includes group companies, and the appropriateness of the likelihood of occurrence and magnitude of impactof risks reported by each company and division is discussed by the Risk Assessment Conference, and the status of managementof each risk is confirmed. Risks identified as important are disclosed as “Business Risks, Etc.” after discussions at the Board of
Directors.

Risks related to global economic fluctuations

11

Risks related to creditworthiness of business partners

2

Risks related to response to changes in the market andcustomer needs
Risks related to dependence on construction and renovation
demand in specific sectors
Risks related to capital tie-ups such as M&A

12

Risks related to financial and taxation matters

13

Risks related to exchange rate fluctuations

14

Risks related to the occurrence of major disasters and accidents

Risks related to price fluctuations and supply shortages of key
raw materials
Risks related to product quality and product liability

15

Risks related to environmental wellbeing

16

Risks related to climate change

Risks related to facility modification/abandonment and site
restrictions
Risks related to outflow of intellectual property and infringementof other companies’ rights
Risks related to insufficient capacity of logistics network andrising logistics costs
Risks related to on-time delivery in full (OTIF)

17

Risks related to human capital

18

Risks related to information security and IT infrastructure

19

Risks related to compliance

3
4
5

7

Environmental Risk Management(As of October 2023)
8
9

Board of Directors
10

President andExecutive Officer
Participation
Participation

ReportCrisis Management Regulations
Supervision/Directions

Risk Assessment Council

ReportManagement Divisions

Corporate Ethics Committee

・Legal Dept.

Sustainability Development Committee

・General Affairs Dept.

・Human Resources Dept.

Climate Change Response Committee

・Finance Administration
Dept.

Internal Control
Committee

Coordination

・Sustainability
Development Dept.

・Overseas Planning Dept.
・Business Planning Dept.
・Development Planning
Dept.

Overseas Group Governance Committee
Information Management Committee
Information Disclosure Committee

・Quality Assurance Dept.

QEO Committee

・Systems Dept., etc.

Other committees/projects

・Purchasing Dept.
Audit andrecommendations

Committees

Internal
Audit Unit

(Q: Quality, E: Environment, O: Occupational Health and Safety)

Reporting of potential risks

Divisions / Group companies in Japan and overseas* As rules for the reporting of serious matters, we have two regulations—an internal whistleblowing system (to report compliance issues to the Corporate Ethics Committee Window)
and the Company’s own reporting rules (urgent reporting of critical matters to the Chairman and President).

37

AICA Report 2023

Name of Regulation

Description

Earthquake Hazard Prevention
Regulations

Response to earthquake disasters

Wind and Water Hazard
Prevention Regulations

Response to wind and flood damage

Product Safety Management
Regulations

Handling of product complaints where
accidents have occurred

MS Emergency Response
Regulations

Response to plant fires and environmental
problems

Information Management
Regulations

Response to leaks of confidential information

Action Plan for Novel Influenza
Pandemic Preparedness

Response to an outbreak of novel influenza(utilized during the COVID-19 pandemic)

Business Continuity Plan (BCP)The AICA Group has formulated a Business Continuity Plan (BCP) and put emergency measures in place to ensure thatimportant business operations are not interrupted by a major disaster or accident, and that even if business activities are interrupted, to resume important operations by the target recovery time with remaining capacity.
The Great East Japan Earthquake that occurred in March 2011 gave rise to our establishment of the BCP Committee, whichplays a central role in strengthening disaster prevention measures, and works to formulate and revise our BCPs. BCPs are being
formulated for sites added through M&A, etc., and regular drills are being conducted at sites that have already formulated BCPs.
We are also expanding the boundary of BCP drills with the cooperation of our Group companies overseas and major production
contractors.
Also, based on the lessons learned from the flood damage to our Hiroshima Plant resulting from the torrential rains of July
2018, we have conducted BCP drills for flooding at four sites (Nagoya, Jimokuji and Hiroshima plants of Aica Kogyo and Nagoya
plant of AICA TECH KENZAI). In addition to improving the level of drills by making the content of the disaster assumptions during
drills more specific and digging deeper into who makes what moves at what time, we clarify the competencies required in theevent of a disaster and focus on human resource development to enable faster recovery and alternative production in the eventof an emergency.
Furthermore, all group companies in Japan and overseas are implementing BCP measures for information security based on
lessons learned from the cyber attack on Wilsonart (Thailand) in January 2023.

AICA Report 2023

38

Data Compilation

Reporting of serious matters*

Regulations Related to Crisis Management

Foundations of AICA

・Corporate Planning
Dept.

BCP Committee

Promotion of risk mitigation activities

Directions

Risk Management Organizations

In our Crisis Management Regulations, we haveestablished the measures to be taken when Aica
Kogyo or any of our Group companies is faced with abusiness management crisis. We uphold the following basic policies: (1) Ensure the safety of employees
and their families, (2) Mitigate social and economic
impact, (3) Fulfill our responsibility to supply products
to customers, and (4) Support local communities.
We specify the scope of a given crisis, rules for reporting crises when they occur, and the establishmentof crisis response headquarters to ensure prompt andappropriate responses and mitigate damage whencrises occur.

AICA’s Vision

Hosting/Participation
ReportAbout AICA

1

6

Audit and Supervisory
Committee

Risk Management

Governancehttps://www.aica.co.jp/company/sustainability/governance/risk-management/

Supplementary materials on risk management are available at our website.

Foundations of AICA

Sustainability

HOME

Risk Management

Risk Management

Governancehttps://www.aica.co.jp/company/sustainability/governance/risk-management/

Compliance Education

We actively utilize M&A as an effective means of expanding business and improving profitability. Depending on the company
being acquired, there is an inherent risk that the expected benefits and synergies may not be realized, or that there will be a significant negative impact on business performance. The President, the Executive Officer in charge, and the Corporate Planning,
Legal, and Finance Departments lead efforts to minimize such risks, assembling the necessary members from the Intellectual
Property and Environmental Departments for each project, and forming project teams to conduct appropriate due diligence onvarious risks. These involve synergistic effects and growth strategies between technology and sales channels, as well as humanresource, financial/taxation, environmental, and compliance aspects (labor conditions, health and safety, corruption, humanrights issues, etc.).

To raise awareness about compliance among employees, the AICA Group utilizes the AICA
Group Code of Conduct and Action Guidelines at all domestic and overseas locations, including Group companies to conduct training at each work site. In this training, we thoroughly instillin our employees a consciousness of the positioning of the AICA Group Code of Conduct andAction Guidelines and the significance and necessity of compliance. We measure the level of
employees’ understanding through training reports and also confirm any requests made by
AICA Compliance Casebook
employees. In 2022, we published the AICA Compliance Casebook, which explains the AICA
Group Code of Conduct in an easy-to-understand manner, and incorporated it into this training to enhance the content to incorporate more daily activities. Through training, all AICA Group employees raise awareness among their peers, strive to comply
with the laws and regulations, and contents of the AICA Compliance Casebook, and act responsibly and properly at all times
and in all situations.
In addition, the Legal Division and the Human Resources Division play a central role in traveling around to all of the branch
offices, plants, Group companies and other sites to provide instruction on the importance of compliance through Group training
on compliance for managers and practitioners, as well as training using e-learning. Any issues discovered in the course of thesevisits are incorporated into improvement activities throughout the entire company.

Information Security
The AICA Group is committed to information security according to our Basic Policy on Information Security, by which we protect not only customer information but also the information assets of each company from threats such as accidents, disasters,
crimes, and cyber attacks, to live up to the trust of customers and society, and to reduce business continuity risk, legal risk,
reputational risk, etc.

Corporate Ethics Committee

Basic Policy on Information Security

Article 2
In order to maintain and improve information security, the AICA
Group has established an Information Management Committee
within Aica Kogyo, and each Group company also takes appropriate information security measures.

Article 4
The AICA Group will comply with all laws, regulations, norms, andcontractual obligations related to information security.

Article 6
The AICA Group will strive to improve information security literacy for all
employees and to provide education to realize the appropriate handlingand management of information assets.
Article 7
The AICA Group will strive to continuously improve its information security
management by regularly evaluating and reviewing the above initiatives.
Article 8
In the event of a violation of laws and regulations, a breach of contract, oran accident related to information security, the AICA Group will respond
appropriately and strive to prevent recurrence.

To ensure that potential risks of breaches of workplace morals, such as infringements of laws and company regulations, bribery and corruption, and harassment, can be addressed promptly, we have established an internal whistleblowing hotline inside
the company and at a law firm outside the company. In addition, we established a global whistleblowing office, the AICA Global
Whistleblowing System (AGWS), for the employees of overseas group companies. Employees of the AICA Group are able toreport to or seek advice about any problems or concerns they may have regarding corporate ethics and compliance 24 hours aday (multilingual support is available). In addition, the anonymity of employees is protected so that whistleblowers do not suffer
any disadvantages, since whistleblowing reports are accepted anonymously. The telephone number and e-mail address of theinternal whistleblowing hotline are included on the AICA Group Employees Action Guidelines Card, and employees confirm how
to use the hotline at the annual Group-wide training held in Japan and overseas so that they become more knowledgable about
the system.

Internal Whistleblowing Hotline

AICA Group Code of Conduct Basic Principles

Employees

Whistleblowing

Internal hotline

Response

Corporate Ethics Committee1

 ompliance with laws andC
regulations

2

Respect for human rights

3

Harmony with society

4

Fair business practice5

Customer’s security and trust

6

Proper information disclosure7

 rotection of company
P
information and property

External Hotline

8

Environment and safety

Law firm(Japan, domestic)

Employees(Overseas)

Whistleblowing

AGWS
Response

President andExecutive Officer

General Manager,
Corporate Planning Dept.
(Executive Officer)

Director in Charge, Human Resources
Department / Legal Department(Executive Officer)

General Manager,
Legal Department

Corporate attorney

General Manager,
Human Resources Department(Secretariat)

Data Compilation

The AICA Group is firmly committed to complying with local laws and regulations
and conducting its business activities ethically at all of its sites in Japan and overseas. The AICA Group Code of Conduct forms the foundation of the Group’s compliance program. It has been established with the objective of realizing our Corporate
Philosophy and Business Plan in accordance with our Corporate principle of Challenge & Creation. We have also established Action Guidelines, which set out specificstandards for conduct in accordance with the Code of Conduct.

Internal Whistleblowing System

Internal Notification System Concept Diagram

Compliance
Basic Approach to Compliance

We have established a Corporate Ethics Committee, whose objectives include the development and promotion of necessary policies for compliance. It also pursues the investigation, confirmation, and implementation of corrective action regarding
whistleblowing reports made to the internal whistleblowing hotline and regarding matters that cannot be resolved by Group
companies on their own, as well as the consideration and proposal of disciplinary action to be applied in the event of a compliance-related issue. The Corporate Ethics Committee promptly investigates and addresses all whistleblowing reports and, where
necessary, takes corrective action. The details of all such cases are reported to the senior executives and the members of the
Audit and Supervisory Committee on a regular basis.

* Number of cases brought to the Internal Whistleblowing Hotline in fiscal 2022: 12

39

AICA Report 2023

Foundations of AICA

Article 3
Employees of the AICA Group shall endeavor to acquire the knowledge and skills necessary for information security, pay close attention to the information assets of each company, and promptly report
any threats or violations of information security to management.

Article 5
The AICA Group will endeavor to implement information security measures necessary to prevent accidents such as unauthorized access,destruction, information leakage, falsification, and cyber attacks on information assets.

AICA’s Vision

Article 1
The AICA Group will strive to improve and improve information
security systematically and continuously under the leadership ofmanagement.

About AICA

Risk Management in M&A (Due Diligence)

AICA Report 2023

40

Supplementary materials on risk management are available at our website.

Foundations of AICAHOME

Risk Management

Sustainability

GovernanceSupplementary materials on the environment are available at our website.
Risk Management

https://www.aica.co.jp/company/sustainability/governance/risk-management/

Respect for human rights

AICA Group Human Rights Policy Basic Principles

The AICA Group has established the Sustainability Development Committee, chaired by the Representative Director andPresident, as the central body for the development of more in-depth sustainability. Initiatives to respect human rights are also
regularly reported to the Board of Directors after discussions by the Sustainability Development Committee. In addition, the Legal
Division and Human Resources Division promote human rights awareness activities, such as planning and implementing training
on respect for human rights.
Human Rights Due Diligence

Human Rights Due Diligence Process(4)
Information
disclosure

AICA
Group Human
Rights Policy(1) Identify, analyze, and assess potential adverse human rights impacts
that may be caused by our business activities.

(2)
Negative
impactprevention/corrective
action(2) Implement preventative/corrective actions related to apparent andpotential negative human rights impacts.
(3) Grasp the status of measures to make continuous improvements
and conduct follow-up surveys.

Basic Approach to the Environment

Environmental Philosophy

The AICA Group has developed an environmental management system based
Refer to P.36).
on ISO 14001 and operates an original QEO Management System (To realize a sustainable society, we engage actively in addressing environment-related
issues.

We will strive to protect the environment and achieve harmony with local
communities and deliver environmentally friendly products.

 arget boundary: The target boundary of each category is clearly stated. The breakdown ofTbusiness sites is as follows.
AICA Group production sites in Japan: A ll production sites of Japanese consolidated subsidiary companies
AICA Group production sites overseas: A ll production sites of overseas consolidated subsidiary companies

Environmental Policy reating products that are kind toCboth the environment and humans
2 Responding to climate change
3 Contribution to the circular economy
4 Harmony with local communities
5 Compliance with laws and regulations
1

Responding to climate change
Basic Approach to Climate Change Response
In the Global Risks Report, published annually by the World Economic Forum (WEF), an international organization committed
to resolving global-scale issues, several risks related to climate change were perceived as the high likelihood risks and highimpact risks. Extreme weather events are also increasing on a global scale. AICA Kogyo has sustained damage several times inrecent years from disasters caused by such events, and we feel keenly that climate change is a major business risk. Based on
this recognition, we have selected “Responding to climate change” as one of the materiality items included in our Medium-TermBusiness Plan. In April 2023, we changed our greenhouse gas (GHG) reduction target from the intensity target to the absolutetarget, and we are further strengthening our activities to achieve the target after making major changes, including declaring ourcommitment to achieving carbon neutrality by FY2050.

Governance System for Responding to Climate Change
The Climate Change Response Committee was established under the Sustainability Development Committee, which is chairedby the President, as a body to promote measures to deal with climate change issues. The production, sales, development planning, and administrative divisions are working together to formulate drastic GHG reduction measures and promote initiatives
to seize opportunities presented by climate change. Details about the activities of the Climate Change Response Committee,
progress of KPIs that have been set for materialities, and their activity status are quarterly reported to the Board of Directors by
the Sustainability Development Committee.

Data Compilation(1)
Assessmentof impact onhuman rights

https://www.aica.co.jp/company/sustainability/environment/

Managing Risks Related to Responding to Climate Change
Refer to P.37 )Risk management related to climate change response is carried out as part of Group-wide risk management. (Through this process, we published climate change as a serious risk and identified it as one of our materiality. The Climate
Change Response Committee, which is established under the Sustainability Development Committee, and the Sustainability
Development Division, which serves as the secretariat for both of those committees, regularly examines and manages risks
related to climate change.

(4) Report the results of these initiatives on our website, in company
reports, etc.

(3)
Monitoring

41

AICA Report 2023

AICA Report 2023

Foundations of AICA

Based on the AICA Group Human Rights Policy, the AICA Group is bringing about human rights due diligence in light of theincreasing respect for human rights and changes in human rights issues as a global company.
In FY2022, we conducted an assessment of human rights impacts that could be caused by corporate activities, and identified
occupational accidents, environmental pollution and destruction, and involvement in conflict areas as high-risk human rights issues. This is due to the fact that the AICA Group is a manufacturer that handles chemical substances and procures raw materials
globally. Moving forward, we will strengthen human rights due diligence by enhancing investigations, mainly of suppliers, andrequesting the prevention and correction of negative impacts as necessary.

Environment

AICA’s Vision

System for Promoting Human Rights

Sustainability

About AICA

1 Responsibility to Respect Human
Human rights are the rights granted to every people, and respect for human rights
Rightsis a universal code of conduct. In recent years, amid the globalization of business
2 Human Rights Due Diligence
activities, interest in human rights and environmental issues has increased in various
3 Education
countries and regions. The UN Guiding Principles on Business and Human Rights
4 Dialogue
clearly state the responsibility that companies have to respect human rights. Compa5 Reporting
nies are expected to not only respond to human rights issues related to executives
and employees, and human rights issues that may be directly affected by our business activities, but also to avoid promoting or
being complicit in human rights violations that may be indirectly caused by business partners.
The AICA Group supports and respects international norms on human rights, including the Universal Declaration of Human
Rights, the ILO Declaration on Fundamental Principles and Rights at Work, and the UN Guiding Principles on Business and Human Rights. In order to fulfill its corporate responsibilities, the AICA Group Code of Conduct clearly states guidelines regarding
respect for human rights. In addition, to ensure that our suppliers understand our human rights policy, we clearly state our policy
on respect for human rights in our Sustainability Procurement Guidelines. In light of recent changes in the business environment
and expectations from society, we formulated the AICA Group Human Rights Policy in 2023.
The AICA Group Code of Conduct, the AICA Group Human Rights Policy, and the Sustainability Procurement Guidelines are
published on our website in order to communicate widely to our stakeholders.

Environment

HOME

42

Supplementary materials on the environment are available at our website.

Foundations of AICA

HOME

Environment

Sustainability

Environment

https://www.aica.co.jp/company/sustainability/environment/

Integration of Scenario Analysis Results into Strategies

MeasureWe conducted interviews with our stakeholders in FY2020 to identify risks and opportunities and organized a compilationof the risks and opportunities associated with the effects of climate change, and what we should do to address it. Since these
efforts made it clear that the impact of climate change will increase in the future, we incorporated “Responding to climatechange” as a materiality into the previous and current Medium-Term Business Plan, and set qualitative and quantitative targets.
In the first half of FY2022, we used external scenarios to conduct qualitative impact assessments for each of the identified risks
and opportunities at 2030 and 2050 given 1.5°C and 4°C global scenarios. In addition, in the second half of FY2022, we conducted a quantitative financial impact assessment targeting risks and opportunities that were found to have a relatively large
impact in the qualitative impact assessment, and organized them as follows. These details are reflected in the new Medium-TermBusiness Plan.

We have shifted from the previous revenue intensity reduction target tothe absolute reduction target, and included the target in the new Medium-Term Business Plan. We aim to achieve carbon neutrality by 2050 byimplementing stronger emission reduction measures.

1

Strengthen efforts aimed at achieving carbon neutrality
Associated risks with greater impact
Changes in external environment

Impact on our Company

New carbon tax, emissions credit
system introduced

Increase in manufacturing
costs

Increase in customer needs for
decarbonization

Decrease in sales

Scope 1 and Scope 2 Emissions Reduction Plan
(t-CO2)150,000
Utilityrenewal(14%)

Energycreation
Renewableenergy120,000

About AICA

Energysaving(30%)

Coefficient
improvement

Overview of scenario analysis and results
90,000

Scope of Scenario Analysis
Transition risks and opportunities: Japanese construction market

Physical Risks: AICA Group Japanese and overseas production sites

CarbonNeutrality

60,000Overview of Possible Scenarios
4°C Scenario(Action is delayed, and temperatures rise as a result.)

2022

2026

2030

2050

(FY)

Introduction of carbon taxes and emissions trading schemes to curb
GHG emissions under international coordination

Continuation of policies at the level currently in force

Examples of Specific Efforts

Overseas
Markets

Significant decline in gasoline demandWidespread corporate decarbonization pledges
Increased need to reduce GHG emissions throughout the life cycle

Continued increase in gasoline demand
Increased demand for products related to climate change adaptation due tomore frequent extreme weather events and rising temperatures

Energy conservation activities

Society

Lifestyles change amid pervasive decarbonization

Major changes in livable areas amid heat waves and water shortages
Frequent outbreaks of infectious disease

Since our major products use a lot of electricity, heat, and steam in production processes, we have been working to
improve the energy use efficiency of these products. We will continue to promote energy conservation activities, suchas improving the operation of utility facilities, and strive to improve production efficiency to reduce energy consumption.

Gradual but frequent temperature increases

Flood frequency in Japan becomes noticeably more frequent, quadrupling
compared to the end of the 20th century

Introduction of low-carbon utility
facilities

We will promote the renewal and installation of utility equipment that contributes to energy conservation by utilizing
the internal carbon pricing system. In addition, we will consider updating equipment that uses heavy oil and diesel
fuel at some sites.

Adoption and purchase ofrenewable energy

Increase the ratio of non-fossil energy use, such as switching purchased electricity to renewable energy.

Fundamental shift in products
and manufacturing processes

In the manufacturing of existing products, we will consider switching to a method that minimizes energy consumption such as electricity, heat, and steam as much as possible. We will also develop products that use less energy
during manufacturing by making full use of our strength in resin synthesis technology.

Quantitative Assessment Results and Measures
Changes in External Environment(Increased Impact Scenario)

New carbon tax, or emissions
credit system introduced(1.5°C Scenario)

Naphtha price hikes due tolower gasoline demand(1.5°C Scenario)(1.5°C Scenario)

Increase in customer needsfor decarbonization(1.5°C Scenario)

Frequent occurrence of
typhoons and torrential rain
(4°C Scenario)

Calculation Formula of Financial Impact

2030

2050
Large

Increased production costs
due to carbon tax imposed on
the Company

Scope 1 Emissions
× Carbon priceModerate

Increased raw material costs
due to carbon tax imposed on
suppliers

Scope 3, Category 1 Emissions
× Carbon price× (100 - Price pass-through rate)

Moderate

Lower demand for gasoline
increases the naphtha prices,increasing related raw
material costs

Naphtha price estimated by the Company
× Profit sensitivity
× Business growth rate

Intense demand for lumber
increases the cost of lumber
purchased by the Company

Monetary amount used to purchase woodmaterials
× Logging tax rate

Small

Failure to meet business
partners’ demands results ina decrease in sales due tosuspension of transactions

Net sales× Ratio of projects that emphasize climatechange response× Expected reduction value for the Company

Moderate

Increase in capital investment
for conversion of manufacturingmethods from existing products

Dereference between introduction costs
for existing equipment and decarbonizedequipment
× Number of units of existing equipment

Small

Damage to the Company
plants resulting in damage
to equipment, etc. leading to
extraordinary losses and adrop in sales due to shutdown

Number of shutdown days based on theestimated maximum inundation height× (Net sales + amount of assets held by
each plant)+ Loss percentage based on expected
maximum inundation height× Amount of assets held

1

AICA Report 2023

Large

Strengthen
initiatives toward
carbon neutrality

Small

ー

～

Large

Large

2

Large

Strengthen lineup
of products that
address climatechange(adding of highvalue)

Measure2

Strengthen lineup of products that respond to climate change(create high value-added products)

Based on our resin synthesis technologies and materials utilization technologies, we will develop products that contribute to responding to climatechange and expand sales of such products. We aim to be a corporategroup that achieves sustainable growth even in a rapidly changing world
by increasing the added value of our products, covering the cost increasecaused by climate change.

Associated risks with greater impact
Changes in external environment

Impact on our Company

New carbon tax, or emissions credit
system introduced

Increase in raw materials
costs

Naphtha price hikes due to lower gasoline
demandIncrease in raw materials
costs

Increase in demand for lumber used as
fuel, biomass raw materials, etc.

Increase in woodmaterials costs

Increase in customer needs for
decarbonization

Decrease in sales

Sales Forecast based on Scenario Analysis

Large

Successful
caseHigh growth rate due to thedevelopment and expansion of salesof climate change-responsive products

Unsuccessful
case

Sales decrease due to inability tomeet the needs of client companies

Small

3

Impact of profit symbols: Small …less than 500 million yen, Moderate … 500 million yen to less than 1 billion yen, Large … 1 billion yen or above
Note: Please refer to our website for qualitative impact assessment results.

Measures (Opportunities)

Data Compilation

Increase in demand for lumber
used as fuel, biomass raw
materials, etc.

Impact on our Company

Impact on Profits

Foundations of AICA

PolicyExtreme
Weather43

0AICA’s Vision

1.5°C Scenario(Climate change action is progressing and regulations are being tightened)

Strengthen BCP
against natural
disasters

Large

2030

2050

We will develop and expand sales of highvalue-added products that contributeto maintaining a high growth rate

AICA Report 2023

44

Supplementary materials on the environment are available at our website.

Foundations of AICA

HOME

Environment

Indicator and Targets
By utilizing plant-derived biomass materials, which can be regarded as giving off zero CO2 emissions during
waste combustion, we will reduce GHG emissions throughout the entire product life cycle and contribute to
the formation of a circular economy by switching from depleted resources.

Environmental impact analysis throughproduct life cycle assessments

In addition to identifying the stages in the life cycle of major products that emit a large amount of CO2 , we will
focus on developing products that reduce the carbon footprint and adapt to a decarbonized society.

Waste reduction

We promote the effective use of product scraps and waste materials generated during the manufacturing process, and offers refurbishment methods that reduce waste materials during installation, thereby contributing to
the reduction of GHG emissions and the formation of a sustainable, circular economy.

Easier Construction

We provide products that can be easily installed in a short period of time, contributing to reducing the risk ofheatstroke. In addition, this effort will also contribute to solving a serious issue that the construction industry isfacing, which is major labor shortages.

Strengthen BCP against natural disasters

Time of occurrence

Associated risks with greater impact
Changes in external environment

Impact on our Company

Frequent occurrence of typhoons andtorrential rain

Extraordinary losses
and drop in sales

2000

Torrential rains of July 20182018

Aica Kogyo Co., Ltd. Nagoya Plant andJimokuji Plant
Aica Kogyo Co., Ltd. Hiroshima Plant

Scope 3

Target year

TargetFY2026

Reduce 14% from FY2022

FY2030

Reduce 30% from FY2022

FY2050Carbon Neutrality

FY2026Set Scope 3 emission reduction targets andformulate reduction measures

New Medium-Term Business
Plan Investment Target
Environmental Investment of

2 billion yen

Targets and Achievements
Responses

FY2023 Target(previous Medium-Term Business Plan)

Installation of floodwalls
Enhancement of drainage pumps
Relocation of important equipment to higher places
Pavement and heightening of plant entrances, purchase of
simple breakwaters

Reduce AICA Group GHG emissions revenue
intensity by 10% compared to FY2020

FY2022 Achievement

Increase/Decrease Factors

Various reduction measures have reduced the increase inemissions associated with the increase in production volume,and the increase in sales has resulted in lower emissions perunit of production

25% decrease from FY2020

Examples of Specific Efforts

We will continue to conduct BCP drills in response to location risks, which is conducted once a year at eachproduction site in Japan and overseas. In particular, Aica Kogyo Co., Ltd.’s Nagoya Plant, Jimokuji Plant, andHiroshima Plant, which have all experienced flood damage, will conduct drills for implementing flood damage
countermeasures.
BCP drills

Early response to typhoons andheavy rains

45

AICA Report 2023

The following measures were taken at sites that have experienced flood damage. We will continue to consider
increasing the waterproof wall installation as necessary.
AICA Kogyo Co., Ltd.’s Nagoya Plant: The waterproof wall located in the lower part of the site has been raised
and strengthened (a 600–700 mm waterproof wall was added to the existing 1,150 mm waterproof wall)
AICA Kogyo Co., Ltd.’s Jimokuji Plant: Raised exterior building structure 500 mm and purchased simple
breakwater (for gate)
AICA Kogyo Co., Ltd.’s Hiroshima Plant: Raised exterior building structure 500 mm, purchased simple breakwater (for gate), and performed maintenance on buried drainage pipes

Third-party assurance has been obtained for some environmental indicators, e.g. GHG emissions. Please refer to P.69–72 for details.)

Target boundary: AICA Group production sites in Japan, AICA Group overseas production sites, AICA Group sales locations in Japan (26 sales offices)

GHG emissions

GHG emissions revenue intensity

Production sites in Japan (left axis)

Overseas production sites (left axis)

Production sites in Japan

Sales Locations in Japan (left axis)

Newly consolidated in each fiscal year

Production sites in Japan + Overseas production sites

Production sites in Japan + Overseas production sites + Sales locations in Japan* (right axis)(t-CO2)100,000

88,13780,00026,917
63,132

89,197
1,332

90,02961,22097,99480,66355,29053,60850,69340,00020,0000152,553

150,386

1,284

2018

144,697

1,184

2019

156,765

1,060

2020

(t-CO2)(t-CO2/100 million yen)

500,000

100

400,000

80

300,000

60

97,3489,366

87,86560,00460,000100,443
3,095

149,596
909

1,032

2021

2022

200,000

40

100,000

20

0

0

(FY)

79.1

77.9

51.3

47.9

Data Compilation

Installation of waterproof walls

Description of drills
1. BCP review
We divide the phases from the occurrence of a disaster to the decision to activate BCP, and from the activation of BCP to recovery activities, and confirm that the person in charge of the department understands
the items to be carried out, and that there is room for improvement in the arrangements.
2. Practical training
Initial response to a disaster will be conducted according to procedures.

(

Actual Results (Scope 1 & 2)

Foundations of AICA

Torrential rains in the
Tokai Region

Locations impacted

Scope

Scope 1 & 2

Recent disasters resulting in shutdown and countermeasures taken
Name of disaster

GHG Emissions Targets (New Medium-Term Business Plan)

AICA’s Vision

In order to prepare for intensifying natural disasters and frequently occurring extreme weather due to the impact of climate change, We will strengthen our business continuity plan (BCP). We will build a system to ensure
immediate restoration by confirming actions to be taken in case of disasterthorough regular drills and clarifying workflows and division of roles towards
restoration.

As previously mentioned, in the new Medium-Term Business Plan, we declared our intention to achieve carbon neutrality inregard to Scope 1 and Scope 2 emissions by FY2050. In addition, we have set medium-term targets to reduce GHG emissions
by 14% by FY2026 and 30% by FY2030 compared to FY2022 levels. To achieve our medium-term targets, we plan on environmental investment of 2 billion yen, which will contribute to reducing GHG emissions from FY2023 to FY2026. With regard to
Scope 3 emissions, we set establishing Scope 3 emission reduction targets and formulating reduction measures by FY2026 as
our materiality goal by grasping the emissions of the entire Group, including emission of group locations overseas.
About AICA

Utilization of biomass materials

3

Environment

https://www.aica.co.jp/company/sustainability/environment/

Examples of Specific Efforts

MeasureSustainability

82.2
72.6
61.4

2018

2019

47.8

2020

45.0

2021

38.1

2022 (FY)* Sales locations in Japan were added to the scope of the total amount.

If there is a typhoon or torrential rain forecast, the head office will alert potentially affected sites. In particular,
production sites will be notified to start flood control measures as soon as possible.

AICA Report 2023

46

Supplementary materials on the environment are available at our website.

Foundations of AICA

HOME

Environment

Sustainability

Environment

https://www.aica.co.jp/company/sustainability/environment/

Major initiatives in FY2022

Green Logistics

Efforts

Measures1. Energy conservation
activities

2. Fuel conversion

3. Utilization of renewable energy

Effects of measures will
emerge in the future

Implement measures based on diagnosis of energy conservation

Major sites in Japan

Maintain pipe temperatures and repair air leaks

Major sites in Japan

Effective over a wide range

Reduce product defect rate and improve yield

Major sites in Japan(exact effect value not calculated)

Switchover to LED lighting

Major sites in Japan

50

Properly control the set temperature of curing chambers

AICA-TECH Kenzai Co., Ltd.

223

Reuse exhaust heat

AICA Harima Kogyo Co.

198

Improve drying efficiency by thinning coating resin

AICA Kogyo Co., Ltd. Nagoya Plant

126

Shift from heavy oil to liquefied natural gas (LNG) (planned for FY2024)

AICA Harima Kogyo Co.

Adopt electricity derived from renewable energy (from FY2023)

AICA Kogyo Co., Ltd. Hiroshima Plant

Reducing GHG emissions from transport is another challenge that companies must address. In the AICA Group, the logistics
officers at major shipping sites throughout Japan are working together with the sales divisions on ongoing improvement efforts,
including modal shift, improving the efficiency of truck freight, and depot organization. We will continue to put various measuresin place to reduce energy consumption (heavy oil equivalent) per freight tonne-kilometers (t-km), which is a management index
for this area.
Targets and Results

Target boundary: Domestic transport (Logistics in which AICA Kogyo Co., Ltd. is the shipper)

FY2022 Target

FY2022 Achievement

About AICA

Effort included production
system change

Sites

Emissions reduction(t-CO2 per year)

FY2023 Target

1,200
250

1% year-on-year decrease

0.8% year-on-year increase

1% year-on-year decrease

44.25 kl/1 million t-km or less45.04 kl/1 million t-km

44.59 kl/1 million t-km or lessInstallation of solar power generation equipment

AICA Kogyo Co., Ltd. Fukushima Plant

135

Installation of solar power generation equipment

AICA Adtek Sdn. Bhd.

280

Installation of solar power generation equipment

AICA NZ Limited

42

Results Trends

Target boundary: Domestic transport (Logistics in which AICA Kogyo Co., Ltd. is the shipper)

t-km energy use intensity in transport

Solar Power Generation Facilities Installed in FY2022(kl/1 million t-km)

FY2018FY2019FY2020

FY2021

FY2022

44.12

43.44

45.23

44.70

45.04
AICA’s Vision

Use of LCA
AICA Kogyo Co., Ltd. Fukushima Plant

AICA Adtek Sdn. Bhd.

AICA NZ Limited

Scope 3 Emissions(

Breakdown of FY2022 GHG Emissions at AICA Group Production Sites in Japan

Breakdown of Scope 3 Emissions at AICA Group Production Sites in Japan(t-CO2)Category 12

Scope 1Category

14%

5%

4%

Category 4

1

Purchased goods and services

2

Capital goods

3,479

3

Fuel- and energy-related activities(not included in scope 1 or scope 2)

9,676

4

Upstream transportation and distribution

15,946

5

Waste generated in operations

5,931

6

Business travel

1,183

7

Employee commuting

12

End-of-life treatment of sold products

13

Leased assets (downstream)

Category 3
Category 2

Scope 370%
Category 1

Emissions402,917226
83,000112

Mining/Rening

IN
EnergyNatural resourcesRawmaterials
Manufacturing

OUT

Disposal
AICA
Products

Substancesof Concern,e.g. CO2

Shipment/Use

Reduction of Industrial Waste and Effective Use of Resources
Basic Approach to Reduction of Industrial Waste and Effective Use of Resources
We began concrete initiatives for the reduction of industrial waste in 1998. This is an important environmental indicator forthe entire Group. In addition to activities aimed at reducing the volume of waste generated, such as volume reduction and improvement of product defect rates, we also actively recycle waste in order to realize a circular economy. In product development,
we adopt product specifications that consider efficient use of raw materials, and we are working to reduce input resources bypromoting the use of lighter packaging and packing materials.
Targets and Results
FY2023 Target(previous Medium-Term Business Plan)

Reduce AICA Group industrial waste
emission revenue intensity by 10%
compared to FY2020

Target boundary: AICA Group production sites in Japan, AICA Group production sites overseas

FY2022 Achievement

6% decrease from FY2020(14.6 tons/100 million yen)

Increase/Decrease Factors

Emissions revenue intensity increased due to an increase inJapanese emissions.

Note: Categories 8, 10, 11, 14, and 15 are excluded from the calculation. The boundary of calculationdiffers according to category. Refer to the Environmental Data page (P.69–70) for details on boundary of calculation and the reason of exclusion.

47

AICA Report 2023

AICA Report 2023

48

Data Compilation

Scope 2Category 5

Please refer to P.69–72 for third-party assurance status.)

LCA Concept

Foundations of AICA

We have been working to identify and calculate GHG emissions related to product manufacture since FY2006. In FY2013, we
calculated our Scope 3 emissions for the first time. For Categories 1, 5, and 12, the calculation method has been substantiallyrevised, and third-party assurance has been received for actual values since FY2020. In an ongoing trend, the largest volume of
Scope 3 emissions at AICA Group production sites in Japan were in Category 1 (purchased goods and services), followed byCategory 12 (disposal of sold products). In order to expand the boundary of calculation to include overseas group companies,
communication with each company is underway, and we aim to disclose Scope 3 emissions for the entire group from FY2023.

We have introduced Life Cycle Assessment (LCA) in thedevelopment of our products. LCA of CO2 emissions has
become particularly important in recent years and we areconcentrating efforts on analysis.
In addition to using LCA in the development of low-carbon products, we will identify the carbon intensity and environmental impact of each product and strive to develop
products that are kind to the global environment.

Supplementary materials on the environment are available at our website.

Foundations of AICA

HOME

Environment

Sustainability

Environment

https://www.aica.co.jp/company/sustainability/environment/

Results Trends

Results Trends

Water withdrawal in High-Risk Areas

Target boundary: AICA Group production sites in Japan, AICA Group production sites overseas

Industrial waste emission volumes

Industrial waste emissions revenue intensity

Production sites in Japan

Overseas production sites

Newly consolidated in each fiscal year

Production sites in Japan + Overseas production sites

40.0

42,65140,00035,37436,04030,46327,29826,560

3,903

10,000
0

808

6,611
572

3,095

2018

6,514

6,039

2019

20.0

37

4,657

2020

21.6

7,331

1,857

28.8

7,013

7,294

2021

2022 (FY)

Major initiatives in FY2022

10.0
0

19.2

22.3
14.5

14.6

2021

2022 (FY)2019

Improving the material recycling rate of extruded cement board
Reuse of used IBC containers

Aica Laminates India Pvt. Ltd.

Northern India

39,833 m3

PT. AICA Indonesia
PT. Techno Wood Indonesia

Cikampek(Indonesia)

31,431 m3

1,363

1,396

1,489

PT. AICA INDRIA(AAPH*2 Group)

Pasuruan(Indonesia)

36,185 m3

1,603

812

Shenyang AICA-HOPE KOGYO Co., Ltd.

Northeastern
China4,152 m3

2020

Use after recycling

Fertilizer sales company

Fertilizer for agricultural crops

Solid fuel sales company

Solid fuelPlastic molding company

Plastic mold filler

2018

2019

2020

2021

*1 Sites assessed as at “extremely high” risk in WRI Aqueduct’s Overall Water Risk.

2022 (FY)*2 AAPH: AICA Asia Pacific Holding

Environmental Risk Management
State of Compliance with Environmental Laws
In FY2022, no Japanese site in the AICA Group was subject to correction directives from the competent authorities or toenvironment-related litigation.

Neighborhood Complaints and Responses

Reduction of Water Withdrawal

In FY2022, AICA responded as follows to neighborhood complaints received by the AICA Group in Japan.
Location of Occurrence

Overview

AICA Kogyo
Nagoya Plant

Requests to prevent littering inneighborhood areas

Since local residents reported that many empty cans and cigarettes weredumped around the plant, we made internal rule to prohibit using particularalley by employees.

AICA TECH KENZAI
Nagoya Plant

Low frequency vibration at night

Although we checked the area around the property with the person who
made the complaint, we were unable to identify the source of the vibration.
As a result, we asked the person to record the date and time they sensed
the vibration and to continue communication with us about the issue.

AICA TECH KENZAI
Nagoya Plant

Noise

Since information on noise has been received when equipment malfunctions
occurred, we decided to enhance inspections of equipment such as silos
installed outdoors.

Data Compilation

The AICA Group strives to use water, a finite resource, effectively and makes a point of appropriate water use in all Group
companies.
Our production sites in Japan use industrial water and underground water, and we are pursuing the cyclic usage of water at
our Nagoya and Jimokuji Plants.
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 with the recognition that water is a finite resource. With reference to
AQUEDUCT, which is released by the World Resources Institute (WRI), we identify high-risk areas and promote effective use ofwater in those areas as a priority. One example is Aica Laminates India Pvt. Ltd. located in the northwest of India, this company
recycles water for use in its manufacturing processes, and treats any waste water for use in gardening.

Description

Foundations of AICA

Basic Approach to Reduction of Water Withdrawal

Environmental Accidents
Targets and Achievements
FY2023 Target(previous Medium-Term Business Plan)

Water withdrawal revenue intensity in high-riskareas: 6% reduction vs. FY2020(6.74 m3/million yen or less)

49

AICA Report 2023

FY2022 Achievement

32% decrease from FY2020
4.90 m3/million yen

AICA’s Vision

Effective use of calcium silicate board scraps

1,620
17

1,434
38

0
2018

Collaborating and outsourcing companies

Conversion of used film into a valuable resource

1,043
231

1,000
15.6

1,381
18

21.3

Initiative to recycle unwanted materials in Japan

Improvement of product defect rate

2,211

2,000
18.6

15.9

2,478

2,384

2,382

2,291

30.0

28,361
23,66520,78420,00030,996

Consumption

About AICA

30,0003,000(tonne/100 million yen)

50,000Location(1,000 m³)

Production sites in Japan + Overseas production sites(tonne)Overseas production sites

Production sites in Japan

Production sites in Japan

Newly consolidated in each fiscal year

Name of Site

Water withdrawal

Increase/Decrease Factors

Net sales significantly exceeded the increase in water withdrawal amount associated with the increase in production
volume.

In FY2022, the following accident occurred at a AICA Group site in Japan that had an impact outside the site. We share information and roll out responses horizontally across the Group to ensure that no inconvenience is caused to any concerned parties
or to the government agencies with jurisdiction.
Location of Occurrence

AICA Kogyo Co., Ltd.
Hiroshima Plant(storage location for productsthat are reshipped)

Description

Response

Insufficient tightening of the cargo caused the container to tip over during transport, resulting in resin
leakage. Water used to clean the spilled resin was
inadvertently discharged.

We located the leaked resin and recovered all of it. Although theresin that leaked was a non-hazardous material, we provided
training on handling methods in the event of resin leakage, prevention of container load collapse, and loading work in order toprevent recurrence.

AICA Report 2023

50

Supplementary materials on human resources are available at our website.

Foundations of AICAHOME

Human Resources

Human Resources

https://www.aica.co.jp/company/sustainability/human/

Basic Approach to Human Resources

Promotion of Data Use

Based on the recognition that human assets serve as the foundation of sustainable growth, we will work to develop and recruit
human resources capable of addressing our unique business challenges. We will build an organizational foundation comprisedof highly engaged and diverse workforce to promote further innovation.

We believe that it is important to gather and visualize a variety of employee data in order to implement the priority measures set
forth in the new Medium-Term Business Plan. The Talent Management System, which was introduced with the aim of properly
grasping the skills and experiences of individuals, will be used to put the right people in the right jobs, develop career paths, andformulate career development plans in line with the wishes of employees. Recognizing that employee health management is also
important for improving corporate performance, the company plans to convert the results of health examinations into data thatcan be utilized. We plan to analyze the results and take measures to address the issues.

Human Resources Development Policy

Internal environment development policy

By creating a workplace environment where diverse human resources can recognize each other and where anyone can play an activerole, we aim to achieve mutual growth for both the company and our employees.
We recognize that while our employees comprise assets, they are also important stakeholders. Based on this understanding, we focus
on activities aimed at deepening mutual understanding as we strive to provide opportunities and an environment in which each andevery employee can fully apply his or her abilities.

Human Assets Strategy in the New Medium-Term Business Plan

Human Resources Development
Basic Approach to Human Resources Development
We cultivate people who have a strong awareness of personal growth and their futures, and who strive forcefully toward thecorporate principle of “Challenge & Creation.” Recognizing that employees are an important presence who will transform thecompany and raise our corporate value, we are directing efforts into human resources development that will allow every individual
employee to apply their strengths to the fullest.

Training Schemes

Overview of the Human Assets Strategy in the New Medium-Term Business PlanAt Aica Kogyo a variety of human resources programs are available. They range from follow-up programs for prospective
employees to grade-based training and self-development assistance to encourage employees’ steady career advancement. In
FY2021, we started surveying training hours and training costs to ascertain the status of training implementation at Aica Kogyo
and Group companies in Japan and overseas. These results will be analyzed to enhance and improve the quality of training
throughout the Group.
AICA Kogyo Human Resources Development System
Classification

Leaders

Desired humanresources
Desired working
environment andorganization

Challenge & Creation
Diversity & Inclusion

Engagement

Women’s engagement
promotion

Communication encouragement

Hiring of globally competenthuman resources

Human resources retention

Expansion of
employee benefits

Engagement score*2

Labor productivity*1*3

4 billion yen

4.0 points or more

22.8 million yen or more per person(870 million yen in FY2022)(3.9 / 5 points in FY2022)(21 million yen per person in FY2022)

100 or more in FY2026(78 in FY2022)

Percentage of women recruited to
new-graduate career-track positions*1*4

30% or more

Ledersdevelopment(42.0% for hired in April 2023)

70% or more, Women: 100%

(Men: 53.1%, Women: 100% in FY2022)*1: Aica Kogyo non-consolidated *2: AICA Group *3: Labor productivity = Added value / Number of employees

AICA Report 2023

Global mindset training

1st-year / 2nd-year / 3rd-year training

Mid-level grade / Future manager training

New manager / Manager / Future executive training

Career interviews/In-house free agent (FA)/Job rotation
On the job training
Sales skills enhancement training

Professional
human resources
development

Development skills enhancement training
Production skills enhancement training
Skills enhancement training for members of administrative divisions

Self-development
Qualificationsacquisition

Correspondence education
Assistance to obtain public qualifications
Compliance education

Workplace education

Globally competent humanresources development

We have been implementing the English Challenge Program since FY2022 in order to develop human resources who canplay an active role on the global stage in Japan and overseas. We aim to improve the language skills of our employees
through group lessons in English and other means.

Leaders development

In addition to providing training to improve individual skills, we expanded various systems to acquire the experience necessary for career development, and develop human resources who can lead the company in the future. In FY2023, we newly
introduced mid-level grade training, a training program that values the autonomy of employees who apply for the training.

Professional human resources
development

We will enhance the skills that employees are required to have for each job type in order to make them professionals.
Since FY2023, the company has been implementing product concept workshops (for researchers), training for enhancing
management skills (for sales staff), and a program combining classroom training with practical training (for production staff)
by job category.

Childcare leave acquisition rate*1
Men:

Language proficiency test

Overview of Major Training Programs

Human capital investment*1*4

Number of employees who experienced
overseas assignment*1

English course for managers

Language training (in Japan)

Data Compilation

Main KPIs

Self-development
supportPromoting engagement of seniortalent and disabled persons

Manager Grade

Overseas trainee training

OnlineEnglisheducation

Professional human resources environment in which diverse human resources can play anAnactive role regardless of nationality, gender, age, etc.
An organizational structure that promotes business regardless ofcountry/region as AICA GroupAn environment in which employees can work with enthusiasm
and peace of mind in good health

Mid-Level Grade

Pre-overseas assignment training

Globally competent human resources

Human resources that are globally competentHuman resources who can quickly grasp changes in the businessenvironment, respond flexibly, and demonstrate leadership
Professionals with outstanding skills

General GradeFoundations of AICA

Globallycompetent
human resources
development

Human Resources
Development

Developing human resources and improving work environmentand organization are essential to bring about innovation

Prior toJoining  Key Initiatives

Growth of overseas businesses
Create and expand synergies
Create and expand growth businesses
Resolve social issues with products
Expand product applications and business domains*4: Four-year cumulative total

AICA’s Vision

In the new Medium-Term Business Plan, we have identified “Building a Foundation for Human Capital Management” as an itemthat must be particularly focused on among our Materialities (key issues) and have incorporated the amount of human capital
investment and the engagement score into management indicators. After reevaluating the human resources required to meet thebusiness challenges we face, we have positioned “human resources development,” “diversity and inclusion,” and “engagement”
as three priority key initiatives. Based on these priority measures, we will actively invest in human capital to improve employee job
satisfaction and, in turn, labor productivity, and aim to form a virtuous cycle that generates sustainable growth of AICA Group.

Business Challenges for Achieving the Targets Set in theMedium-Term Business Plan and AICA’s 10 Years Vision

About AICA

We aim to achieve the Corporate Policy saying, “viewing human resources as the most vital resource of our company, we nurture
motivated human resources and organizations through mutual understanding and development.”
The company cultivates people who have a strong awareness of personal growth and their futures, and who strive forcefully toward
the corporate principle of “Challenge & Creation.”

51

Sustainability

AICA Report 2023

52

Supplementary materials on human resources are available at our website.

Foundations of AICAHOME

Human Resources

Promotion of the Engagement of Senior Talent

Basic Approach to Diversity & Inclusion
We promote diversity in response to the globalization of business and the diversification of market needs. Originally launchedas the Women’s Participation Promotion Project in June 2013, the name of this initiative was changed to the Diversity Promotion
Project in FY2018 and we are working to promote the establishment of foundations in which more diverse personnel can participate actively in the workplace.

Target boundary: AICA Kogyo Co., Ltd. non-consolidated

Target Categories

Target initiative period: April 1, 2022～ March 31, 2025

Current status (as of end-Mar. 2023)

Percentage of women recruited to new-graduate
career-track positions: 30% or more

42.3% (new-graduate recruits joining in April 2023)

New proposals/revision of work-life balance
assistance scheme: 3 or more

3

Increase percentage of female managers

5.8% or more

3.9% (8 female managers of a total of 207 managers)

Improve rate of recruitment of people
with disabilities*

2.3% or more

2.46%

Promotion of mid-career hires tomanagement positions

Maintain at 20% the ratio of mid-career hires
promoted to management positions

18.1%

Cultural reform

Percentage of available paid leave taken:
70% or more

69.1%

Increase percentage of female
employees

Promotion of the Engagement of Employees with Disabilities
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 theirpresence in the workplace. We will work actively to further expand
the number of these employees.

Promotion of the Women’s Engagement

60.0

AICA Kogyo
Percentage of female employees

AICA Kogyo
Percentage of female managers

(%)

40.0

(%)

30.0

42.3
40.0

17.7

18.0
32.0

17.3

17.4

3.3
3.0

10.0

20.0

16.0

2.0

0

0

2013

2021

2022

2023 (FY)

AICA Kogyo
Wage gap between male and female
employees
Wage gap between male andfemale employees

80.7%

Wage gap between male andfemale regular employees

79.1%

Wage gap between maleand female non-regular
employees

62.6%

AICA Report 2023

14.0

16.7

16.7

3.6
2018

2019

2020

2021

1.0

2013

2020

2021

2022 (FY)FY2022

2.66%

2.47%

2.46%

*Calculated according to the method for the statutory employment rate

02022 (FY)Work-Life Balance Assistance SchemesChildcare leave
support subsidy
system

Employees who take seven or more consecutive days of childcare leave will
receive a childcare support subsidy of 30,000 yen per child.

Childcare support
systemSubsidizes nursery school or babysitting costs for employees raising children
up to three years old.

Revision of system for shorter
working hours forchildcare

Employees raising children up to the third grade of elementary school areallowed to work shorter hours (six or seven hour workday) in order to secure
time for housework and childcare.

Revision of time
shift work system

We allow employees raising children under elementary school age to shift
their workday start and finish times in 30-minute increments within an hour
before and after work to secure time for housework and childcare.

Comeback Entry
SystemThe system supports the returns of employees who leave the company forreasons such as childcare, nursing care, or the relocation of their spouse.

Data Compilation

15.0

17.1

20.0

3.3

17.0

14.8

53

3.9

4.0

30.0

14.3

53.1

50.0

5.0

19.0

FY2021

Foundations of AICA

AICA Kogyo
Rate of childcare leave taken by male
employees(%)(%)

FY2020We are working to expand our programs to assist employees to balance their home lives and work without interrupting theircareers as much as possible, by responding flexibly to diverse work styles. To raise the rate of male employees taking childcare
leave as stated in the new Medium-Term Business Plan, in addition to establishing a support subsidy system, we are working tobuild a follow-up system for workplaces where employees have taken childcare leave.

We launched a Women’s Participation Promotion Project in June 2013 and have focused efforts on initiatives and the development of an environment in which the power of women can be put to use in the management of the company. To ensure that
employees can continue to work without interrupting their careers as much as possible, we are simultaneously promoting work
style reforms that realize diverse work styles and working on the expansion of work-life balance assistance scheme.

50.0

Percentage of employees with disabilities*

Work-Life Balance Assistance*Calculated according to the method for the statutory employment rate

AICA Kogyo
Percentage of women recruited to
new-graduate career-track positions

AICA Kogyo

0.0
2013

2020

2021

2022 (FY)Work Style Reform
AICA Kogyo Certification status“Kurumin” certification from Ministry of Health,Labour and Welfare(February 2016 and October 2023)

Certification as Company Promoting Women’s Participation by the City of Nagoya(January 2016 and January 2019)

The company was certified by
the Ministry of Health, Labourand Welfare as a company thatmeets certain criteria of assisting
employees with raising children.

Implemented by the Cityof Nagoya, this program
certifies companies
engaged in initiatives toallow women to shine in their organizations.
In addition, the company was awarded due to
implementing particularly outstanding initiatives
in this area.

AICA’s Vision

Target Figures

In the hope of active participation in the workplace of senior talTrends in newly engaged employees under there-employment scheme at AICA Kogyo
ents amid the rapidly declining birthrate and aging of the population,
the Revised Act on Stabilization of Employment of Elderly Persons,
FY2020
FY2021
FY2022
which mandates the provision of employment opportunities up to
15
21
11
the age of 70, came into force on April 1, 2021. With the aims of responding to these legislative revisions, raising employee motivation,and guaranteeing their lifestyles, we are planning to make revisions to our Re-Employment Scheme. In April 2022, the Career
Support Unit was established in the Human Resources Department, and began considering specific measures to expand opportunities for senior talents. We will continue with these efforts to develop a safe and secure work environment.

About AICADiversity Promotion Activity Goals

10.0

Human Resources

https://www.aica.co.jp/company/sustainability/human/

Diversity & Inclusion

10.7

Sustainability

As the issue of excessively long working hours has become a social problem and the entire nation is pursuing work style reform,
we launched our own Work Style Reform Promotion Project on April, 2017. We are working actively to create a culture and change
mindsets to discourage employees from working excessively long hours. Initiatives include “No Overtime” days and the reductionof overtime. This led to the establishment of the Work Improvement Subcommittee in April 2020 as an organization within the Work
Style Reform Promotion Project in order to promote further diversification of work styles.

AICA Report 2023

54

Supplementary materials on human resources are available at our website.

Foundations of AICAHOME

Human Resources

Engagement

Sustainability

Human Resources

https://www.aica.co.jp/company/sustainability/human/

Occupational Health and Safety
Basic Approach to Occupational Health and Safety

As social values have become more diverse, how employees who work at a company think about the company and theirmindset toward their work have changed and diversified. Recognizing that employee satisfaction surveys are essential for thefurther development of the company, we commission an outside organization to conduct Employee Satisfaction Surveys on aregular basis. In the latest of these surveys, conducted in July 2019, the research firm reported that among our employees, “general satisfaction” with the company was slightly higher than the average for companies in general. In FY2022, the AICA Group
Employee Satisfaction Survey was newly implemented to include Group companies in Japan and overseas. In the initial survey,
the Group averaged 3.9 points (out of a maximum of 5 points), and this improvement in engagement score was incorporated into
the new Medium-Term Business Plan. We will reflect the results of these satisfaction surveys in our various policies, including our
personnel system, and take measures to improve employee engagement from a medium- to long-term perspective.

To maintain a sound foundation for the company and achieve sustainable growth, it is important that we strive to maintainthe health of each individual employee and to improve workplace safety. We recognize that our business activities also have an
impact on the health and safety of contractors who work on our sites and residents of the surrounding areas, and we strive tomaintain the environment at our sites and in the surrounding areas.
In keeping with the Industrial Safety and Health Act, we have established Health and Safety Committees at each of our sites.
Based on measurements of working environments and the findings of health check-ups, we investigate and deliberate on important matters that will form the foundation of measures for preventing health problems among workers. Membership of the Healthand Safety Committee is comprised of members of management and labor union members in equal numbers. Regular meetings
are also held with contractors who work on site in an effort to further invigorate communication.

About AICA

Employee satisfaction Survey

Prevention of Industrial Accidents

Health Management

Mental HealthRegular Health Check-ups
In addition to the health check-ups mandated by law, we also provide a combination of Lifestyle Disease Check-ups andGynecological Check-ups tailored to employees’ age, gender, and preferences. In this way, we are strengthening our employee
health management functions. Since FY2014, the company has covered part of the cost of influenza vaccinations, including forfamily members, to step up efforts to prevent our workers falling ill.

55

AICA Report 2023

FY2019FY2020

FY2021

FY2022

Fatal accidents

0

0

0

0

0

Lost-time accidents

6

7

6

5

4

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

6

4

4

2

3

12

13

6

12

10

7

6

1

4

4

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

Risk Assessment
We conduct risk assessments based on our Occupational Health and Safety Management System to identify potential risks
or hazards in the workplace and to eliminate or reduce them. We conduct risk assessments for chemical substances to maintainthe working environment and appropriate protective equipment.

Prevention of Traffic Accidents
We have a fleet of company vehicles that are in use in
Vehicle accidents (caused by negligence of AICA Kogyo Co., Ltd. employees or both parties)
our day-to-day operations. The use of company vehicles is
FY2018FY2019FY2020
FY2021
FY2022
limited to employees who have been registered after theirdriving aptitude has been confirmed, and we have estab22
25
10
11
14
lished our own Rules for Use of Company Vehicles. However, in FY2022, there was a tendency for more accidents due to insufficient driving skills and lack of attention to the road among
young employees. In order to eliminate such accidents, we will promote switching to vehicles equipped with accident prevention
equipment such as automatic brakes and back monitors, and continue to provide training and education to improve driving skills.

AICA Report 2023

56

Data Compilation

In an economic environment of intensifying market competition and rapid change, the stress felt by workers is only increasing,
becoming a serious social issue.
We have put a variety of measures in place to maintain not only the physical health of our workers, but also their mental andemotional health. The results of annual stress checks are fed back to the individuals, and the findings from analysis of the results
on a departmental level are fed back to the head of each department, to promote initiatives aimed at improvements in the workplace. We have set up a health advice hotline, run by an external organization, as an avenue for employees to seek advice withthe assurance of confidentiality.

(accidents)

FY2018Foundations of AICA

In a society where the birthrate is declining and the population is aging at an accelerating rate, it is becoming increasingly
important to address the issue of workforce retention and employee health promotion. We believe that in order for our company
to develop sustainably, it is essential to improve the performance and job satisfaction of each and every employee by creating
an environment in which everyone can work with confidence and enthusiasm, which in turn helps resolve social issues. With thisin mind, we have formulated our Health Declaration for 2022, while also clearly stating our key
priorities, and provided the declaration on our website. As a result of these initiatives, we wereselected as a Health and Productivity Management Organization in March 2023. To realize our
Corporate Principle and Corporate Philosophy, we will strengthen our efforts by incorporating
priority items into our new medium- to long-term management plan, and strive to increase ourcorporate value and employee retention rate.

Target boundary: All AICA Group
production sites in Japan

Number of industrial accidents

AICA’s Vision

Basic Approach to Health Management

To ensure that the serious accident that happened at the
AICA Kogyo 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 place on this day.
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 conductedin the small-group activities (C&C activities). We are striving
to eliminate industrial accidents by pursuing appropriate improvements so that training will be something meaningfulthat leads to greater awareness of safety.

Foundations of AICA

Corporate GovernanceInterview

Mitsuko Yamamoto
External Director (Member of Audit and Supervisory Committee)

Operations and Theme of the Board of
Directors and Governance Committee

57

AICA Report 2023

About the New Medium-Term Business Plan
Miyamoto In FY2022, we achieved consolidated net sales of
242 billion yen, which was driven by economic recovery fromthe impact of the COVID-19 pandemic, growth in overseas

Key Materiality Issues
Responding to Climate Change and Human
Capital Management
Miyamoto Regarding our efforts to respond climate change,
we have made progress by changing our greenhouse gas emissions reduction target from per unit of sales to absolute greenhouse gas emissions. In terms of opportunities, we focus themost on strengthening our product lineup that respond to the

Expectations for the Company and the
Direction It Should Head
Miyamoto I feel that the Corporate Philosophy, “The AICA Group
creates new value and contributes to society through continuous
innovation in the spirit of our philosophy of kyosei,” incorporates all
the elements required in this era of rapid changes in the businessenvironment and difficulty in predicting the future. I expect that
AICA Group will continue to put this philosophy into practice.
Yamamoto In AICA’s 10 Years Vision, we declared that we will
aim to become an “Asia’s No.1 Resin Manufacturer” in the Chemical Product segment and as “Solution Provider for Space Design”
in the Laminates & Building Materials segment. I expect that AICA
will become the first company involved in both the fields of “Chemistry” and “Design” if we cherish our culture that has achieved business expansion while respecting harmony with Group companies,
and expand synergies between our Chemical Products segment
and Laminates & Building Materials segment, Japan and overseas
Group companies, and the areas of production and sales.
AICA Report 2023

58

Data Compilation

Miyamoto In April 2022, a new leadership structure was established with Chairman Ono and President Ebihara. I feel thatthe good culture from before has taken over with allowing External Directors to provide opinions and advice during Board of
Directors meetings and valuing open and candid discussions. It
is my impression that the Board of Directors meetings conclude
with all attendees satisfied in agreement on each agenda item,
embodying the ideal role of the Board of Directors.
Although I do not see any particular problem with the current
themes and frequency of the Governance Committee meetings,
there may be room for further consideration as to whether the
discussion on succession planning should be more in-depth.
When President Ebihara was selected, we chose the most suitable candidates among the Directors. In the future, it may benecessary for the Governance Committee to verify candidates
for president from the Executive Officer stage whether they havegained the necessary experience to become a President.
Yamamoto Due in part to the personalities of the Chairman and

the President, I feel that an open atmosphere has been fostered
where even External Officers can easily express our opinions. Early
on after my appointment, I was somewhat hesitant to speak out,but I strongly felt that the Company was actively trying to incorporate the opinions of External Officers, such as Chairman Ono,
who is the Committee Chairperson, asking for my opinion, so wasable to speak up without hesitation. The AICA Group currently has
more than 50 subsidiaries but aims to further expand its businessthrough M&A in the future. I believe it is an urgent challenge tofoster successors from our abundant human resources, including those at Group subsidiaries. At Board of Directors meetingsand management meetings, the employees involved in submitting
agendas have opportunities to participate or make presentations
at the meetings and I think this is a good initiative to gain experiences to understand what kind of information is requested bymanagements and External Officers.

Foundations of AICA

Two of our External Directors discussed the direction that AICA should head in and the operations of theBoard of Directors and the Governance Committee, while focusing on themes related to the new MediumTerm Business Plan launched in April 2023.

Yamamoto In the new Medium-Term Business Plan, AICA has
announced that we will invest 2 billion yen in efforts to respondclimate change. In addition to capital investment, I believe thatcollaboration with outside entities such as universities and venture companies while taking advantage of AICA’s chemical capabilities will also speed up development in the future.
As for human resource management, AICA will invest 4 billion yen in recruiting and training the next generation of humanresources and leaders, which are the foundation of our sustainable growth, and I feel that this shows a strong awareness ofthe need to build an organizational foundation. Furthermore, in
preparation for a declining population, I consider it is crucial toaccelerate efforts in digital transformation (DX) to enhance theefficiency of production management and administrative processes. Automation of manufacturing lines and the promotionof efficiency through IT are urgent priorities. I believe that initiating measures for employee safety and operational efficiency at
an early stage contributes to elevate employee engagement. In
terms of promoting the active involvement of women, there has
been a commitment to drive this initiative from the President.
We aim to become a company that attracts even more talented
individuals by advancing work environment improvements, expanding career choices, and increasing fair opportunities.

AICA’s Vision

Masashi Miyamoto
External Director (Member of Audit and Supervisory Committee) /Chairman of Governance Committee

Yamamoto I think it was truly impressive that the goals of theprevious Medium-Term Management Plan were achieved one
year ahead, with the Chemical Products segment which grew
primarily overseas, achieving a remarkable 25% annual averagesales growth rate, and the Laminates & Building Materials segment which achieved a 10.3% growth rate in operating profit.
The upcoming FY2026, which is the final year of the new Medium-Term Management Plan and AICA’s 10 years Vision is
also AICA’s 90th anniversary, is marking a significant milestone.
The slogan “Value Creation” that we have set for this occasion
is closely tied to our corporate principle, “Challenge and Creation,” and shows that AICA has been growing strategically inthe direction which we have aimed for. In the new Medium-TermBusiness Plan, we have set goal to achieve a 5.5% annual average growth rate in sales for both segments, while set relatively
higher growth rate goals in profit aiming at increase profitability,
which is a 12.5% annual average growth rate in operating profit
for the Chemical Products segment and a 7.7% for the Laminates & Building Materials segment. For the current situation,
we are facing challenges such as rising energy costs, increased
raw material prices, and the 2024 issue, the shortage of human resources due to the enforcement of Japan's Workplace
Reform Law, facing the construction industry in Japan. Even inthese circumstances, I would like to see AICA will enhance ourcorporate value through appropriate price adjustments that arecommensurate with high-quality, high-value-added products,
and through the active promotion of our achievements that developing and producing many excellent products to the world.

climate change issues. Recently, various technological innovations are taking place to address climate change and I feel that
AICA will not be able to survive without making major changes.
If we can accurately grasp the current trends and create epoch
innovations that contribute to decarbonization by combining ourstrengths in chemistry ahead of our competitors, I believe we will
be able to dramatically increase AICA’s presence in the market.
Regarding human capital management, there is a growing
awareness, both internally and externally, of the importance ofthe relationship between value creation and human capitals.
Stakeholders, including investors, are showing a heightened level of interest in our commitment of human capital management.
In the new Medium-Term Business Plan, I believe the humancapital strategy clearly reflects the Company’s overall management strategy. I expect that appropriate investments will encourage employees to reach their full potential.

About AICA

operations, and increased sales of AS products in Japan. We
exceeded the sales target of the previous Medium-Term Business Plan “Change & Grow 2400” one year ahead of the schedule, which was a significant accomplishment that propelled us
into the next phase of business planning. On the other hand, due
to rising raw material prices, increased energy costs, and theimpact of impairment, our return on equity (ROE) fell short of the
10% target, at 6.9%, highlighting challenges in capital efficiency.
The new Medium-Term Business Plan “Value Creation 3000 &300” is the last phase which serves as the culmination of ourlong-term management plan, AICA’s 10 Years Vision, which isscheduled to end in FY2026, and is also the transition point to
the next decade. I have high expectations that the performance
contribution from the full-scale operation of invested facilities,
which has been implemented proactively in anticipation of the
future, will progress according to plan. It is crucial for each Group
company to realize full business performance in order to achieve
the targets set in the Medium-Term Business Plan. I am hoping for further expansion of the Group synergies, as well as the
pursuit of efficiency through the proper allocation of production,
sales, and technical bases overseas.

Foundations of AICA

Corporate Governance

List of Directors (As of June 23, 2023)
Directors (excluding directors who are members of the Audit and Supervisory Committee) (5 male, 1 female)
Kenji Ebihara

Representative Director and Chairman

Representative Director and President

Born August 24, 1956

Born April 15, 1967

Shoji Miyamoto

Director (full-time member of Audit andSupervisory Committee)

Born February 08, 1956
Apr. 1978	Joined Konishiroku Photo Industry
Co., Ltd. (now KONICA MINOLTA,
INC.)
Oct. 1985	Joined Ito Accountants Audit Firm
Mar. 1989	Registered as Certified Public
Accountant (CPA)
Jul. 2005	Senior Partner, Chuo Aoyama PwC
Aug. 2007	Managing Partner, Azusa Audit Firm(now KPMG AZSA llc)
Sep. 2010 Director, KPMG AZSA llc
Sep. 2014 Auditor, KPMG AZSA llc
Jul. 2018	Director, Miyamoto Shoji CPA Office(present)
Jun. 2019 External Auditor, Aica Kogyo Co., Ltd.
Jun. 2020	External Director, Aica Kogyo Co., Ltd.
(member of Audit and Supervisory
Committee) (present); External
Director, Meito Sangyo Co., Ltd.
(member of Audit and Supervisory
Committee) (present)

Yuji Iwatsuka

Mitsuko Yamamoto

Director and Managing Executive Officer

Director and Managing Executive Officer

Born April 07, 1964

Born January 20, 1967

Apr. 1988 Joined MITSUI & CO., LTD.
Jan. 2009 Joined Aica Kogyo Co., Ltd.
Apr. 2009	General Manager, Overseas
Business Dept.
Jun. 2009 Director
Apr. 2011 Manager, New Business OfficeJun. 2017 Managing Director
Apr. 2018	President, Chemical Products
Business Unit; Deputy Senior
General Manager, Sales DivisionJun. 2018 Director (present)
Managing Executive Officer (present)
Apr. 2020	President, Specialty & Performance
Materials Business Unit
Apr. 2022	President, Chemical Products
Business Unit (present); Deputy
Senior General Manager, Sales
Administration Division
Jan. 2023	Director and Chairman, AICA Asia
Pacific Holding Pte. Ltd. (present)

Apr. 1989
Joined Aica Kogyo Co., Ltd.
Apr. 2010	General Manager, Production Control
Dept., Laminates & Building Materials
Business Unit
Apr. 2012	General Manager, Production Control
Dept., Chemical Products Business
Unit
Apr. 2015	President, Chemical Products Business
Unit
Jun. 2015 Executive Officer
Jun. 2016 Senior Executive Officer
Apr. 2020	Responsible for Overseas Planning
Dept.; General Manager, Purchasing
Department
Apr. 2021	Deputy President, Laminates & Building
Materials Business Unit (Responsible
for Production)
Apr. 2023	Managing Executive Officer (present),
President, Laminates & Building
Materials Business Unit (present);
Director and Chairman, AICA Asia
Laminates Holding Co., Ltd. (present)
Jun. 2023 Director (present)

External Director

External Director (Member ofIndependent
Audit and Supervisory Committee)
Born January 01, 1957

External
Independent

Born July 09, 1957

Born June 06, 1972

Mar. 1981	Joined NGK INSULATORS, LTD.
Apr. 2004	General Manager, Planning Department,
Industrial Process Division., Ceramic
Products Business Group
Jun. 2010	Vice President, Secretarial OfficeDirector
Jun. 2012	Senior Vice President
Apr. 2014	Group Executive, Ceramic Products
Business Group
Jun. 2014	Director and Senior Vice President
Jun. 2015	Director and Senior Vice President
Jun. 2018	Executive Vice President; Responsible
for Corporate Planning Office, New
Business Planning Office, Secretarial
Office, Corporate Communications
Dept., Human Resources Dept.,
General Affairs Dept., and PowerBusiness Group; Senior Officer in
Charge of Group Companies; General
Manager, Osaka BranchJul. 2022
Corporate Advisor (present)
Jun. 2023	External Director, Aica Kogyo Co., Ltd.
(present)

Apr. 1999	Registered as attorney, joined
Ishihara Law Office (present)
Apr. 2015	Deputy Chair, Aichi Bar Association
Director, CHUBU Federation of Bar
Associations
Apr. 2017	Member, Nagoya City Information
Disclosure Screening Commission(present)
Jan. 2018 Judicial Commissioner (present)
Apr. 2019	Mediator/Arbitrator, Dispute
Resolution Center, Aichi Prefecture
Bar Association (present)
Dec. 2019	Outside Director, MTG Co., Ltd.
(member, Audit and Supervisory
Committee) (present)
Apr. 2020	Member, Ombuds 6 Committee,
Nagoya Broadcasting Network(present)
Jun. 2020	External Director, Aica Kogyo Co.,
Ltd. (present)
Mar. 2021	External Director, SYNCLAYER, Inc.
(member of Audit and Supervisory
Committee) (present)

Mar. 1983 Joined WOMANSTAFF K.K.
Apr. 1985	Director, Sales Div., WOMANSTAFF K.K.
Sep. 1998	Senior Managing Director, company namechanged to Tempstaff People K.K.
Jul. 2016	Director and Senior Managing Executive
Officer, Tempstaff K.K. (following merger
with the latter)
Jul. 2017	Company name changed to Persol
Tempstaff Co., Ltd.
Jul. 2019 Director, Persol Tempstaff Co.
Jul. 2020	Senior Advisor (full-time), Persol Tempstaff
Co., Ltd. (present); Auditor (part-time),
Meijo University (present)
Jun. 2021	Outside Director, Chuo Spring Co., Ltd.
(Present)
Jun. 2022	External Director, Aica Kogyo Co., Ltd.
(member of Audit and Supervisory
Committee) (present)
Jun. 2023	External Director, Meito Sangyo Co., Ltd.
(member of Audit and Supervisory
Committee) (present); External Director,
TAKEDA iP HOLDINGS CO., LTD. (present)

DutiesExternal
Director

Name

Reason for Appointment

HiroshiKanie

Mr. Hiroshi Kanie has extensive experience and knowledge as a corporate executive, which we believe willcontribute to increasing the corporate value and sustainable growth of the AICA Group.

Ayako
Shimizu

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

Shoji
Miyamoto

Mr. Shoji Miyamoto has extensive expert knowledge
and experience as a certified public accountant. We
believe that he will be able to offer advice and oversightas an External Director and member of the Audit andSupervisory Committee.

(Independent
Director*)

External
Director(Independent
Director)

External
Director/
Member of
Audit andSupervisory
Committee
External
Director /Member of
Audit andSupervisory
Committee(Independent
Director*)

Ms. Mitsuko Yamamoto has a wealth of experience asa corporate executive, and extensive knowledge particularly in labor management and diversity,which we
believe will enable her to provide advice and oversightas an External Director and member of the Audit andSupervisory Committee.

Mitsuko
Yamamoto(Independent
Director*)* The company has not established any special criteria or policies regarding independence from the company
for the appointment of External Directors. However, when appointing External Directors, the company refers
to the criteria for judging the independence of independent directors indicated by the Tokyo Stock Exchange.

Board of Directors Skills Matrix
We aim to enhance the diversity of the Board of Directors in terms of expertise, knowledge, and experience in various fields. We select candidates for the
Board of Directors through deliberations by the Governance Committee, which identifies the skills required for the management of the Company based on thebusiness activities of the Company and its group companies and the issues in the Medium-Term Business Plan, and finds a balance between diversity andappointing an appropriate number of Directors. The skills matrix shown below indicates areas of knowledge, experience, and abilities of each Director.
Expertise of Directors
Name

Corporate
management

International
experience

Sales and marketingTechnology/Industrial
engineering/R&D

Sustainability/
Human capital

Legal andrisk management

Finance/Accounting

Yuji Ono

〇

〇

〇

〇

〇

〇

〇

Kenji Ebihara

〇

〇

〇

〇

〇

Nobuyuki Omura〇〇

Yuji Iwatsuka〇

Hiroshi Kanie

〇

〇
〇

〇

〇
〇

〇

Ayako Shimizu
Ryoji Mori〇

Shoji Miyamoto〇

Mitsuko Yamamoto

〇

〇

〇
〇

〇
〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

AICA Report 2023

60

Data Compilation

Independent

Ayako Shimizu

AICA Kogyo, Reasons for appointment of external directors

External

Foundations of AICA

Nobuyuki Omura

AICA’s Vision

Apr. 1991 Joined Aica Kogyo Co., Ltd.
Apr. 2009	General Manager, Chemical
Products Development Dept., R&D
CenterOct. 2010	Manager, Jimokuji Laboratory, R&D
CenterApr. 2013 General Manager, R&D Center
Apr. 2015	President, Specialty & Performance
Materials Business Unit
Jun. 2017 Executive Officer
Jun. 2018 Senior Executive Officer
Apr. 2019 Managing Executive Officer
Jun. 2019 Director
Apr. 2020	President, Chemical Products
Business Unit, Deputy General
Manager, Sales Administration
Division
Apr. 2022	Representative Director (present),
President and Executive Officer(present)

About AICA

Born September 29, 1959

Apr. 1979 Joined Aica Kogyo Co., Ltd.
Apr. 2000	General Manager, No. 1 Chemical
Products Development Dept.
Oct. 2002	General Manager, Sales Dept.,
Chemical Products Business Unit
Jun. 2004 Executive Officer
Oct. 2004 Director, No. 2 R&D Center
Apr. 2008	President, Chemical Products
Business Unit
Jun. 2008 Director
Jun. 2009 Managing Director
Jun. 2010 Representative Director (present)
Director and President
Jun. 2018 President and Executive Officer
Apr. 2022	Board of Directors Chairman(present)

External

External

External Director (Member ofIndependent
Audit and Supervisory Committee)

Apr. 1982 Joined Aica Kogyo Co., Ltd.
May. 2000	General Manager, Laminates Production
Dept.
Apr. 2006	General Manager, Production Control Dept.,
Laminates & Building Materials Business Unit
Oct. 2009	General Manager, Production control Dept.,
Chemical Products Business Unit
Jun. 2011 Executive Officer
Jun. 2013 Senior Executive Officer
Jun. 2015 Director
Jun. 2018 Managing Executive Officer
Apr. 2019	Responsible for Purchasing Dept., Safety
and Environment Dept.
Apr. 2020	Deputy President, Laminates & Building
Materials Business Unit, Responsible forTechnology, Laminates & Building Materials
Business Unit; General Manager, Production
Control Dept., Laminates & Building Materials
Business Unit
Apr. 2021	Assistant to President, Responsible forSpecial Missions
Jun. 2021	Director (full-time member of Audit andSupervisory Committee) (present)

External Director

AICA Report 2023

Ryoji Mori

Yuji Ono

Hiroshi Kanie

59

Directors who are members of the Audit and Supervisory Committee (2 male, 1 female)Supplementary materials on corporate governance are available at our website.

Foundations of AICA

HOME

Corporate GovernanceCorporate Governance Structure and Internal Control Systems (as of June 23, 2023)

Appointment/ Dismissal

Audit andSupervisory
Committee

Members of Audit andSupervisory Committee
3 personsAudit and Supervision

ReportReportRepresentative Director
Management Meeting

Coordination

Audit and Supervisory
Committee Unit

Directions

Internal Audit Unit

Accounting Audit

Internal Control Committee

ReportInternal Control Audit

Corporate Ethics Committee

Management Promotion Meeting
ReportSupervision

Sustainability Development Committee

ReportRisk Assessment Council
AdviceCorporate Lawyer

2012

2013

Board of Directors

2014

2016

2017

2018

2019

2020

9

8

9

7

2022

8

11

1

3
(members of the Board of Auditors)

Advisory
Committee
Meetings forexchanging opinionswith External Directors

2

Executive Officer System revisions
4(including 2 Directors who concurrently
serve as Audit and Supervisory
Committee Members)

22(members of the Board of Auditors)

2(Members of Audit and Supervisory Committee)

Establishment of Governance Committee in April 2016
(the committee also deliberates on nomination and remuneration matters)
Held once a year

Held twice a year

For Directors

Stock-linked compensation-type stock
options were introduced in June 2006

Adoption of Restricted Stock (RS)Remuneration System

For Employees

Introduction of Trust-type Employee Shareholding Incentive
Plan between February 2010 and February 2015

Introduction of Stock Granting
Trust (J-ESOP)

Evaluation of theeffectiveness of theBoard of Directors

Conducted once a year
Corporate Ethics Committee (established in November 2002)

Major committees/
meetings

CSR Promotion Committee

Sustainability Development Committee
Risk Assessment Council

61

AICA Report 2023

Governance Committee
The Governance Committee was established in April 2016 as a voluntary
advisory committee to the Board of Directors, consisting mainly of External
Directors. (Two of the four members are Auditing Committee members). It
deliberates important governance-related matters, including nomination andremuneration of the management team, with the aim of achieving sustainablecorporate growth and further enhancement of the governance function. It met
six times during FY2022 (the 123rd fiscal year). With our transition to being
a company with an Audit and Supervisory Committee system, the roles between the Audit and Supervisory Committee and the Governance Committee
are being divided. For this purpose, we ensure that there is no duplication ofcontent between the two committees, and in addition, the deliberations of theGovernance Committee are shared with the Audit and Supervisory Committee
in order for the Audit Committee to exercise its right to express its opinions.

Governance Committee Meetings in FY2022

Executive personnel
Results of evaluation of theeffectiveness of the Board of
28th Meeting Directors, review of improvements,
and update of the Board of
Directors Skills Matrix
29th Meeting Individual evaluation of Directors
Regular revision of Governance30th Meeting
ReportRequirements for next President
31st Meeting
candidates
32nd Meeting Executive personnel
27th Meeting

Directors’ Remuneration
Remuneration of Company directors (excluding Directors who are Audit and Supervisory Committee Members and External
Directors) consists of a fixed basic monthly remuneration, performance-based remuneration and stock remuneration. In addition,from the viewpoint of their role and independence, remuneration of Directors who are Audit and Supervisory Committee Members and External Directors consists of basic monthly remuneration only. Please refer to the Notice of Convocation of the 123rd
Annual General Meeting of Shareholders for details of remuneration of Directors.
Basic Remuneration
Basic remuneration for Directors is fixed monthly remuneration based on a standard amount for each position and is decided
taking into account publicly announced levels of remuneration at other companies, the Company’s business performance, andother factors.
Performance-Based Remuneration
Performance-based remuneration for Directors (excluding Directors who are members of the Audit and Supervisory Committee and External Directors) is evaluated individually (at five levels: S, A, B, C, and D) when the performance for each fiscal year isdetermined. Individual remuneration is determined based on the standard amount for each position and is paid once a year. Individual evaluations are determined by taking into account factors such as the growth rate of consolidated and individual sales andprofits (operating profit, etc.), the achievement rate against the initial budget for the fiscal year, the evaluation of duties in charge,
and the progress of the Medium-Term Business Plan. The reason for selecting these indicators is that we have determined thatthey are the most appropriate indicators to raise the awareness of improving business results for each fiscal year. In addition,
performance-based remuneration is determined at around 15% to 20% of total remuneration, depending on the director’s role,position, and function. The ratio of performance-based remuneration to the total amount of remuneration in FY2022 is 13.8%,
taking into consideration the status of achievement of the aforementioned indicators comprehensively.
AICA Report 2023

62

Data Compilation

External Director(including Directors who
concurrently serve as
Audit and Supervisory
Committee Members)

2023

9
1

Executive Officer System introduced in April 2002

External Auditors andExternal Directors thatare Members of Audit andSupervisory Committee

2021

Company with an Audit and Supervisory Committee

Number of
female Directors

Executive Officer
SystemRemuneration
System2015

Company with a Board of Auditors
8

Discussion of the Director’s appointment and dismissal ofsenior management

In addition to explaining the reasons for appointment/dismissal of senior management
at the Governance Committee and Board of Directors meetings and further enhancing
deliberations, when appointing senior management, opportunities are set for
presentation at important meetings, etc. in advance so that External Directors canunderstand the personality and character of senior management candidates

Foundations of AICA

History of Strengthening Corporate Governance

Organizational
structure

Provide notes on terminology, history of past meetings and their agenda items,
and advance explanation of key projects

AICA’s Vision

Appointment/ Dismissal

Details of Improvements

Explanation of terminology in Board of Directors meeting
materials, history, past agenda items, prior explanation ofimportant matters, and time for prior review
ReportAccounting Auditor

Directors (except for members of
Audit and Supervisory Committee)
6 persons

Items identified as issues in 2021 and measures to address themIssuesGeneral Meeting of Shareholders
Board of Directors

In order to verify the effectiveness of the Board of Directors, we have conducted an annual survey of all Directors (including
Directors who are members of the Audit and Supervisory Committee) regarding the structure, operation, and agenda of theBoard and the Board’s support structure. The effectiveness of the Board is evaluated on the basis of the results of this survey.
In the survey conducted in February 2023, just as in the previous year’s survey, there were no issues raised (for an issue to beraised, it requires three or more respondents answering “Insufficient” or “Inappropriate”). Responses of “appropriate or reasonably appropriate” were obtained for all except two of the items surveyed. Based on this positive feedback, we confirmed that our
Board of Directors is functioning appropriately and that its effectiveness is being ensured. On the other hand, in the 2022 and2023 surveys, one respondent did answer “Insufficient” or “Inappropriate” for each of the two items in the table below, whichwere issues raised in 2021. Therefore, we will continue to take steps toward improvements.
About AICAThe AICA Group aims to ensure and improve the value of the company and the common interests of its shareholders throughthe enhancement of corporate governance at each of its Group companies in Japan and overseas.
In June 2020, we selected a form of a Company with an Audit and Supervisory Committee. The Audit and Supervisory
Committee, more than half of whose members are External Directors, is responsible for auditing and supervising the legality
and appropriateness of the execution of business for the realization of more transparent management. In this way, we aim tostrengthen our corporate governance further and also to build a framework that will more appropriately meet the expectations of
our stakeholders in Japan and overseas.

2011

Corporate Governance

Effectiveness of the Board of Directors

Basic Approach to Corporate Governance

Governance Committee

Governancehttps://www.aica.co.jp/company/sustainability/governance/corporate_governance/

Corporate GovernanceAppointment/Dismissal

Sustainability

Supplementary materials on corporate governance are available at our website.

Foundations of AICA

HOME

Corporate Governance

Sustainability

GovernanceCorporate Governancehttps://www.aica.co.jp/company/sustainability/governance/corporate_governance/

is available on the AICA website.
HOME

Sustainability

Engagement with
Stakeholders

https://www.aica.co.jp/company/sustainability/stakeholders/

Basic Approach to Engagement with Stakeholders
As a company that is widely trusted by society, we have instilled our belief in our corporate policy to value “fair and highly
transparent compliance-based management in accordance with the law and social order” and “engagement with stakeholders.”
Based on this corporate policy, we have a basic policy of disclosing information about the company to all stakeholders in a fair
and timely manner.

Involvement with Customers
Ensuring Product Safety
We believe that the most important matter 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 and information disclosure. Regulations on chemical substances tend to be stricter on an annual basis.To fulfill our
responsibilities as a member of the supply chain, such as inquiries about new legislation in various countries, and requests forinvestigation and provision of information about new chemicals, the relevant departments work together to provide prompt andmore accurate information. Please refer to the company website for Product Safety Voluntary Action Guidelines information.

Strengthening governance of Group companies overseas

Website Redesign
We completely redesigned our website in 2022 in response to the diversification of work styles of customers and increased
needs for digital content created as a result of the COVID-19 pandemic. In addition to improving convenience by enrichingcontent such as videos, security has also been strengthened to create an environment where users can use the website withgreater peace of mind. Moving forward, we will continue to make improvements to the website in order to meet the needs of ourcustomers and make it more useful.

Foundations of AICA

Over the past 10 years, the Company has expanded its business domain, mainly in Asia, through M&As and other activities,
and now has more than 40 consolidated overseas subsidiaries. As each country has its own legal, cultural, and economic environment, we established the Overseas Group Governance Committee in FY2020 to establish a governance framework for thefor entire Group.
Members of the Overseas Planning Dept., Legal Dept., Internal Audit Office, Financial Administration Dept., Human Resources Dept., Quality Assurance Dept., Sustainability Development Dept., Corporate Planning Dept., Systems Dept., Development
Planning Dept., and overseas business holding companies participate in this committee to formulate specific action plans forthemes of high importance and implement the PDCA cycle.
This committee plays the central role in managing business risks and is strengthening the management system to not only
comply with laws and regulations, but also to conduct ethical business operations and fulfill social responsibilities. Moving forward, AICA Kogyo, the overseas business holding companies, and the Group companies overseas will continue to work together
to foster a sense of unity within the AICA Group and to improve the AICA Group governance system.

We have built a strong network for connecting with the distributors and builders that handle our products to form collaborative
relationships. We have established the AICA Distributors’ Organization as a network of distributors, with which we share productknowledge and sales and product strategies, and strive for healthy communication between distributors. We have also established separate construction groups for each product sold, through which we share information about improving construction
quality and about product improvement and development.

AICA’s Vision

Value Chain Collaboration

About AICA

Stock Remuneration
In regard to stock remuneration for Directors (excluding Directors who are members of the Audit and Supervisory Committee
and External Directors), the objectives of this system are to provide an incentive for the sustainable enhancement of corporate
value and to promote greater sharing of value with shareholders. Once a year, an amount is granted to eligible Directors based ona standard amount for each position, taking into consideration the Company’s performance and other factors. Stock remuneration is performed by granting Directors shares with restrictions on transfer, and the amount is determined based on the standard
amount for each position, taking into consideration the company’s performance, etc.
<Evaluation of Directors>
Individual evaluation of Directors (excluding directors who are members of the Audit and Supervisory Committee and external
directors) is conducted by Representative Director and Chairman Yuji Ono and the Governance Committee reviews the appropriateness of the level of remuneration amounts, including individual evaluation.
<Method for Determining Remuneration for Directors>
Remuneration of Directors is determined in accordance with the above calculation method by Representative Director andChairman Yuji Ono, who has been authorized by the Board of Directors, within the maximum amount of total remuneration determined by a resolution of the General Meeting of Shareholders. The reason for the authorization is that it is considered reasonable
to authorize the Representative Director and Chairman, who understands our overall business, to make the decision.
<Description of Activities that Occur during the process of determining the amount of remuneration, etc.>
During the process of determining Directors’ remuneration, the Governance Committee, which is composed mainly of External Directors, exchanges opinions on the ratio of corporate performance to the business performance that the Director was
responsible for, and the relationship between evaluation rank and increase-decrease rate in order to enhance performance,
responsibility, objectivity, and transparency.

Engagement with
Stakeholders

Additional information about engagement with stakeholders

Customer Satisfaction Survey
Overseas Group Governance Committee FY2022 Activities
Theme

Compliance

Authority
Medium-Term
Management Plan
Quality
Safety/Environment
Markets
Intellectual property
Financial
Human resources
IT
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AICA Report 2023

To make employees more familiar with the Code of Conduct, we published the AICA Compliance Casebook, translated it
into multiple languages, and distributed it to group companies. We conducted a questionnaire at each site to determine
the current situation in preparation for the formulation of the Group Anti-Bribery Policy. We also launched a global Internal
Whistleblowing System into operation.
We strengthened the auditing systems of overseas Group companies by utilizing third-party auditors. Post-audits
recommendations are made and follow-up audits are conducted.
We promoted and supported the review of the regulations of overseas group companies regarding transfer of authority.
A briefing session was held once during the period in Japanese, English, and Chinese with the aim of disseminating MediumTerm Business Plan information in order to foster group awareness.
Conducted quality audits and guidance in order to improve quality of the entire Group. In particular, we held regular quality
meetings with key sites to share quality information.
Held discussions with each site to improve BCP training content and conducted BCP drills.
Organized management issues at each site and shared information on initiatives to resolve them.
We conducted a questionnaire at each site to understand the current situation in order to make intellectual property
management rules stricter.
At our overseas subsidiaries, we collected advice from local audit firms and collaborated with them to make improvements.
We checked the accounting workflow of overseas group companies and conducted a comprehensive inspection of theapproval process for important operations.
Formulated the Global Human Resources Development Program. Conducted an employee awareness survey at overseas
group companies and used it to improve engagement.
Promoted the introduction of software to strengthen information security. Information sharing meetings were held twice a year
to share group policies on IT governance.

With the objective of asking our customers to evaluate our products and services, we have conducted a Customer Satisfaction Survey since FY2002. To put the opinions received from our customers to good use in product development and improvement of services, we identify issues from the survey findings, communicate them to the relevant departments after reporting thefinding to the Management Meetings, and put responses into place.
Data Compilation

Internal control

FY2022 Achievement

Engagement with Suppliers
Basic Approach to Engagement with Suppliers
To fulfill the AICA Group’s corporate social responsibility (CSR), we believe that it is essential that we obtain the understanding and cooperation of our stakeholders. In our procurement activities, in addition to acting responsibly as the AICA Group, we
also pursue CSR activities with the cooperation of our suppliers. Based on these ideas, we formulated the “AICA Group CSR
Procurement Guidelines” in June 2017, and issued them in April 2022 with partially revised title and content as the “AICA Group
Sustainability Procurement Guidelines.” We have obtained the consent of our suppliers in Japan and overseas to these Guidelines for the further mutual improvement of our CSR activities by promoting related initiatives together.

AICA Report 2023

64

Additional information about engagement with stakeholders

Foundations of AICA

is available on the AICA website.

Engagement with Stakeholders

HOME

Engagement with
Stakeholders

Sustainability

https://www.aica.co.jp/company/sustainability/stakeholders/Communicating with Suppliers

President

Executive Officers(in Charge of IR or
SR,etc.)General Managers(In charge of Financial
Administration,
Sustainability
Development, Human
Resources, etc.)

Head of the Public
Relations and IR Group

158

1

11

11

157

1

ー

1

1

1

Financial results briefings

2

2

2

2

2

Briefings for individual
investors

1

1

ー

ー

ー

Number of
dialogues/
meetings held
Investor interviews
ESG
Small meetings

About AICA

We held a Purchasing Policy Briefing in June 2019 as a forum for communication with our suppliers, at which we shared ourcompany policies and purchasing policies. Further, with the objective of sharing our sustainability procurement philosophy andinvestigating the actual situation, we have conducted self-evaluation questionnaire surveys since FY2018. For the targets of thissurvey, we selected suppliers that cover approximately 70% of the total value of AICA Kogyo’s raw materials procurement, witha particular focus on our main suppliers.
Based on the results of this survey, where necessary, AICA Kogyo employees then conduct an audit (on-site inspection). If any
outstanding initiatives are confirmed, we will learn their methods, and if we encounter matters that require correction, we will provide guidance and instruction to those companies. By continuing with this two-way dialog, we aim for the mutual improvementof our standards. (Please refer to our website for details on the content and implementation of the survey.)

Main respondents in FY2022

Business Continuity Plan (BCP) in Procurement Activities
To ensure stable supplies even after a disaster or accident, we purchase our main raw materials from multiple suppliers andsites, and ensure that we have alternative options for purchasing. Regarding our own products, we have built production structures at multiple sites and have taken measures to ensure that we maintain a certain level of inventory. We will continue to consider measures to ensure that we can fulfill our supply responsibilities even in the event of a disaster or accident, and implement
various measures as required.

Ensuring Appropriate Information Disclosure and Transparency

Communication with Shareholders and Investors

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AICA Report 2023

Response by the company

Investor IR interviews

Request for the company to declare that there will be no
reductions in dividends

Added declaration to the dividend policy inthe new Medium-Term Business Plan

Investor SR interviews

Japanese
institutional
investors

Investors talked about the importance of disclosing
capital policy and cash allocation

Information incorporated into the new
Medium-Term Business Plan

Investor SR interviews
ESG Small Meeting

Japanese
institutional
investors

Our commitment to achieving carbon neutrality by 2050
Revision of FY2030 GHG emissions reduction target
Switch greenhouse gas reduction targets from aintensity target to a absolute target

Information incorporated into the new
Medium-Term Business Plan and GHG
reduction targets were changed from a
per-unit target to a total amount target

Engagement with Local Regions and Communities
Basic Approach to Engagement with Local Regions and Communities
As a company with global operations, the AICA Group values its connections with local regions and communities in both
Japan and overseas. In addition to promoting local employment, we take all complaints made to the company seriously andrespond appropriately when any problems are detected in our business activities. We continue to conduct activities based on aphilosophy 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.

Aica Laminates Vietnam Co., Ltd. and its decorative panel products received
awards in three different categories through the program “Good Vietnamese
products for consumer rights 2023”.
AICA Laminates Vietnam received the “Top 20 excellent companies” and “Top 20 Vietnam Gold Brand” through the program“Good Vietnamese products for consumer rights 2023”, co-organized by the Institute of Economics and Culture in cooperation
with the Consumer Protection Vietnam Center. Its high pressure laminate (HPL) and melamine fire retardant decorative panels
won the “Top 20 Gold Quality Products” award. While socioeconomy is developing in Vietnam and the distribution of inferior
goods and counterfeit goods is seen as a problem, the award is given to high-quality and reliable products, services and brands
on the occasion of Vietnam Consumer Rights Day on March 15 to protect consumers and businesses.
AICA Laminates Vietnam’s products have obtained the international environmental certification “GREENGUARD GOLD” andare supplied to the Vietnamese and Asian markets as environmentally and health-conscious building materials.

AICA Report 2023

66

Data Compilation

We formulated the Basic Policy Regarding Constructive Dialogue with ShareholdNumber of dialogues
ers and Investors and take proactive steps, within a reasonable extent, to achieve
Number of dialogs withconstructive dialogue with our shareholders. The Public Relations and IR Groupinstitutional investors
takes the lead in responding to requests for individual interviews and telephone
in FY2022
interviews, and depending on requests from shareholders and investors and theJapanese institutional107
investors
subject of dialogue, the an officer in charge, senior manager, etc. may also attend
Foreign institutional
52
interviews. Any opinions or other information obtained through such dialog is reportinvestors
ed to the Board of Directors, and we strive to reflect it in future management and IR
Total
159*
activities. The main dialogue themes in FY2022 and the interests of shareholders in* Includes one ESG Small Meeting
clude the company’s business overview, business model, strengths, financial results
and earnings forecasts, the rise in raw material prices, the revision of selling prices,the progress of the Medium-Term Business Plan, ESG and sustainability, and capital policy.
To obtain their understanding and appropriate evaluation, in addition to the General Meeting of Shareholders, we hold Financial Results Briefings for analysts and institutional investors twice a year, at which our Representative Directors provide explanations. Please refer to the company website for the briefing content and questions. Briefings for individual investors are also held
on an irregular basis.
In order to respond to requests for disclosure in English, although there is a time lag, English versions of the financial resultssummaries, support data for financial results summaries, financial results briefing materials, Notice of General Meeting of Shareholders, Corporate Governance Report, AICA Report, AICA at-a-Glance, and Company Brochure are available.

Requests/Proposals from shareholders

Japanese
institutional
investors

Foundations of AICA

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 and Exchange Act, and the rules for timely disclosure prescribed by the stock exchanges on which our shares arelisted, and conduct information disclosure in accordance with our Disclosure Policy. Even for information that is not covered by
the relevant legislation or by 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. Please refer tothe Company website for information disclosure documents.

Shareholder type

AICA’s Vision

Involvement with Shareholders

Major cases in which proposals obtained through dialogues between shareholders and management were utilized in management

Data Compilation

11-Year Financial Summary
AICA Kogyo Co., Ltd. and consolidated subsidiaries(Accounting FY)

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Net sales

101,353

141,096

143,843

150,061

151,633

163,726

191,363

191,501

174,628

214,514242,055[Net sales by segment]*1 Chemical Products

33,59469,31675,081

77,26974,881

82,911109,062

103,945

90,446

122,323

141,312Laminates & Building Materials

62,53967,016

68,762

72,79176,75280,81582,30087,55584,182

92,191

100,743

Electronics

5,219

4,762

—

—

—

—

—

—

—

—

—

Operating profit

12,06914,527

15,181

16,18418,09919,092

20,83420,85017,991

20,34820,557

Ordinary profit

12,64014,74815,885

16,352

18,374

19,60021,24921,333

18,43821,84022,088

Profit attributable to owners of parent

7,633

8,221

10,137

9,962

11,064

11,996

13,316

12,732

10,75913,117

10,059[Profit by segment] *1 *2 Chemical Products

2,471

4,258

4,673

5,417

6,223

6,537

7,444

8,123

7,109

7,376

7,494

11,32012,16012,602

12,83814,48815,623

16,16915,874

13,751

16,37916,740

475

430

—

—

—

—

—

—

—

—

—

Capital investment

2,828

3,829

2,960

2,934

3,876

4,522

7,896

8,487

6,113

7,110

8,697

Depreciation

2,216

2,998

3,100

3,491

3,458

3,569

4,173

4,632

5,683

6,411

6,794

R&D expenditure

2,012

2,146

2,356

2,597

2,672

2,856

3,208

3,454

3,327

3,453

3,997

119,301

131,812147,017

153,434

164,634

189,626

191,025

206,439

207,363

240,388

250,049

85,006

94,389107,226

112,501

119,685

132,616

136,116

146,221150,505

162,734

158,074

Interest-bearing debt*

1,603

2,941

3,519

2,185

2,264

5,322

5,427

7,302

8,165

17,86031,659Cash and cash equivalents

18,981

23,77235,22037,44947,622

48,89645,37940,644

41,18544,99747,943

Cash flow from operating activities

9,479

11,22813,08014,612

18,331

16,436

13,275

18,24019,713

11,68519,852

Cash flow from investing activities(18,312)(4,851)(143)(7,025)(3,269)(7,950)(8,147)(16,798)(9,756)(8,342)(9,061)

Cash flow from financial activities(2,363)(1,950)(1,912)(4,849)(4,587)(7,406)(7,557)(6,210)(9,179)(1,114)(9,.355)

Free cash flow

(8,833)

6,377

12,936

7,586

15,062

8,485

5,127

1,442

9,957

3,342

10,790Earnings per share (yen)117.95126.77155.99152.62

169.48183.76203.95195.01164.79200.90157.27

Net assets per share (yen)1,263.11

1,405.27

1,581.17

1,654.14

1,759.91

1,880.13

1,936.87

1,994.03

2,064.24

2,223.98

2,270.08

Dividend per share (yen)

36.00

38.00

43.00

46.00

85.00

92.00

103.00106.00107.00108.00109.00

Payout ratio (%)

30.8

30.2

27.6

30.1

50.2

50.1

50.5

54.4

64.9

53.8

69.3

Overseas sales ratio (%)

7.2

29.2

33.3

33.2

30.8

33.4

42.0

40.7

42.7

49.2

51.2

Operating profit margin (%)

11.9

10.3

10.6

10.8

11.9

11.7

10.9

10.9

10.3

9.5

8.5

Return on equity (ROE) (%)

9.7

9.5

10.4

9.4

9.9

10.1

10.7

9.9

8.1

9.4

6.9

6.9

6.5

7.3

6.6

7.0

6.8

7.0

6.4

5.2

5.9

4.1

Net debt-to-equity ratio (times)*

0.020

0.032

0.034

0.020

0.020

0.043

0.043

0.056

0.061

0.123

0.218

Equity ratio (%)

68.6

69.2

70.2

70.4

69.8

64.7

66.2

63.1

65.0

60.4

58.1

Japanese naphtha price (yen)55,10065,30069,70046,00032,80040,50051,00042,00033,00050,00076,250Exchange rate (JPY/USD)*3

79.93

97.11

106.37120.99110.29112.38110.56109.37106.67109.84130.77

Number of new housing starts in Japan (10,000 units)

89.3

98.7

88.0

92.0

97.4

94.6

95.2

88.3

81.2

86.5

86.0

52,031

56,43852,612

49,98851,33453,31351,01647,97944,85648,05546,899Management Results (million yen)

Electronics

Net assets
4

AICA’s Vision

Total assets

About AICA

Laminates & Building Materials

Foundations of AICA

Per-Share Data

Financial Indicators

4

Data Compilation

Return on assets (ROA) (%)

Other Indicators

Area of non-residential building starts (1,000 m2)*1 With the sale of the Electronics Business in FY2014, some sections of the Electronics Business were transferred to the Chemicals Segment from FY2014.
*2 Operating profit before deduction of unallocated operating expenses *3 Annual average*4 Due to a rule change to include lease obligations in interest-bearing debt, the values for FY2012 to FY2021 have been retroactively adjusted.

67

AICA Report 2023

AICA Report 2023

68

Data Compilation

Non-Financial Data (Environment): Indicators for which third-party assurance was obtained for the values published in this booklet (AICA Report 2023)*1 To improve the accuracy of the figures, the figures in the AICA Report 2022 have been retroactively revised.
*2 Since sales locations in Japan have been included, the figures in the AICA Report 2022 have been retroactively revised.
*3 Includes emissions from sales locations in Japan where the breakdown of Scope 1 and Scope 2 emissions is unclear.

Assured by an independent assurance provider
Target Boundary

FY2018FY2019FY2020

FY2021

FY2022

Energy Use
AICA Group
Energy inputs (TJ: Terajoules)

Production sites in Japan

AICA Group

143

172

1,106

1,206

1,080

Municipal water supply (1,000 m3)

AICA Group

806

1,123

287

306

301

Production sites in Japan
Production sites in Japan
Production sites in Japan
Production sites in Japan
Production sites in Japan

22.3
15.8
3.3
0.5

11.8
5.6
6.9
0.6

1,908
31.2
11.7
6.1
0.5

1,981
3.3
1.2
0.5
0.5

1,742
2.1
1.0
0.4
0.3

69,35364,536

61,73665,811

34,570*2*2*2

65,491

27,83823,00023,55820,142

581

567

558

447

53,35457,431

59,394

66,83863,516

152,553*3

150,386

144,697

156,765

149,596

479,442525,238*1

522,469

Category 1

358,145

406,483*1

402,917Category 2

14,197

3,199

3,479

Category 3

10,149

9,363

9,676

Category 4

14,68815,965

15,946

Category 5

5,062

5,725

5,931

Category 6

1,828

425

1,183

Category 7

112

194

226

Category 12

75,06983,692

83,000Category 13

192

192

112

*1

Production sites in Japan

5.4

5.3

5.9

6.1

6.1

NOx (tonne)

Production sites in Japan

25.4

26.9

31.9

27.7

24.8

Soot and dust (tonne)

Production sites in Japan

3.7

9.4

9.3

1.9

1.8

Substances subject to PRTR (VOC atmospheric emissions) (tonne)

Production sites in Japan

56.5

52.1

53.6

55.7

52.6

Production sites in Japan

317,041

305,457

247,158

277,979

274,151

Raw materials (tonne)

Production sites in Japan

279,580

284,565

231,117

261,650

256,888

Ancillary materials (tonne)

Production sites in Japan

625

629

538

593

635

Containers and packaging materials (tonne)

Production sites in Japan

31,555

15,147

11,576

11,225

11,938Substances subject to PRTR (tonne)

Production sites in Japan(30,274)(40,582)(25,458)(15,023)(37,713)

Product Shipment
255,093

268,552

216,818

241,778

229,117In-house Recycling of Waste
16,445

17,203

12,224

13,723

12,708Industrial Waste Emissions
30,46342,651

27,29830,99635,374

Production sites in Japan

26,56036,04020,784

23,66528,361

Production sites overseas

3,903

6,611

6,514

7,331

7,013

External recycling (tonne)

Production sites in Japan

25,836

24,70819,376*1

22,39525,381

Landfill disposal (tonne)

Production sites in Japan589

11,3091,399*1

1,269

2,980

Substances subject to PRTR (amount of waste transferred) (tonne) Production sites in Japan

13.1

15.1

12.6

12.9

16.7

• Target Boundary
The target boundary of each category is clearly stated. The breakdown of business sites is as follows.
AICA Group: A ll production sites of the AICA Group in Japan and overseas (sales locations in Japan are only included for Energy Use and Greenhouse gas emissions)
Production sites in Japan: All production sites of AICA Kogyo Co., Ltd., AICA Interior Kogyo Co., Ltd., AICA Harima Kogyo Co., Ltd., and AICA TECH KENZAI CO., LTD.
and one other company
Production sites overseas: All production sites of PT. AICA Indonesia, PT. Techno Wood Indonesia, Aica Laminates India Pvt. Ltd., Aica Laminates Vietnam Co., Ltd., AICA
Asia Pacific Holding Group, Evermore Chemical Industry Group, and Wilsonart companies
Sales locations in Japan: 26 AICA Kogyo Co., Ltd. sales locations• Energy use
Energy input is calculated by multiplying the amount of fuel used by the calorific value of each fuel. (For unit calorific values, we used the Ministry of the Environment’s Calculation
Methods and List of Factors for Calculation, Reporting, and Publication Programs.) Electricity was calculated as 1 kWh = 3.6 MJ, and steam was calculated by converting theamount of energy due to steam quality according to the purchased quantity.
• Greenhouse gas emissions– For Scope 1 and 2 calculations, we calculated the energy-derived CO2 emission/non-energy-derived greenhouse gas emission volumes based on the Ministry of the Environment/Ministry of Economy, Trade and Industry’s Greenhouse Gas Emissions Calculation and Reporting Manual (Ver.4.9). Electric power emissions factors for Japan sites
were calculated using the adjusted emission factors for electric power companies from the List of Emissions Factors by Power Supplier (For 2023 Submission) (Ministry of
the Environment/Ministry of Economy, Trade and Industry). For sites overseas, we used finalized values data from the International Energy Agency’s (IEA) Emissions Factors(2022). In Japan, the adjusted emission factors for general electric power transmission and distribution companies was used until FY2021. From FY2022, however, the adjusted emission factor of each electric power provider is used.
– Scope 3 calculations were made in line with the Basic Guidelines for Calculation of Greenhouse Gas Emissions Throughout the Supply Chain (Ver. 2.5) published by the
Ministry of the Environment. The details of calculation methods for each category are as described below. Emissions factors are taken from these Guidelines unless otherwise
stated below.
Category 1: Purchased goods andservices

Target boundary: All production sites of AICA Kogyo Co., Ltd., AICA Interior Kogyo Co., Ltd., AICA Harima Kogyo Co., Ltd., and AICA TECH KENZAI
CO., LTD.
Weight or value of raw materials, products, etc. purchased in the reporting year multiplied by the emissions factor. For emissions intensity, we usedeither (1) LCI Database IEDA version 2.3 (AIST Research Institute of Science for Safety and Sustainability’s Advanced LCA Research Group; Japan
Environmental Management Association for Industry) or (2) Emissions Intensity Database for Calculation of Organizations’ Greenhouse Gas Emissions,etc. Throughout the Supply Chain (Ver. 3.3) (Ministry of the Environment), depending on the item being calculated. For items produced at some of ourplants, we calculated raw materials usage based on production volumes. Items that are purchased in very small quantities have been excluded fromthese calculations, which account for approximately 90% of all purchased raw materials, either on a weight or value basis.

Category 2: Capital goods

Target boundary: AICA Kogyo Co., Ltd.
Amount of capital investment in the reporting year multiplied by the emissions factor.

Category 3: Fuel- and energy-related
activities (not included inscope 1 or scope 2)

Target boundary: Production sites in Japan
Power and fuel volumes purchased during the reporting year, multiplied by the emissions factor. (For fuels, emission factors at the time of the study wereused from the LCI database IDEA version 2.3, in accordance with the guidelines.)

Category 4: Upstream transportationand distribution

Target boundary: AICA Kogyo Co., Ltd.
Calculated based on tonne-km of logistics (transportation, cargo handling, and storage) for the reporting year in which AICA Kogyo Co. was the shipper

Category 5: Waste generated inoperations

Target boundary: All production sites of AICA Kogyo Co., Ltd., AICA Interior Kogyo Co., Ltd., AICA Harima Kogyo Co., Ltd., and AICA TECH KENZAI
CO., LTD.
Industrial waste emission volumes during the reporting year, multiplied by the emissions factor.

Category 6: Business travel

Target boundary: AICA Kogyo Co., Ltd.
Travel expenses during the reporting year, multiplied by the emissions factor.

Category 7: Employee commuting

Target boundary: AICA Kogyo Co., Ltd.
Commuting subsidy expenses during the reporting year, multiplied by the emissions factor.

Category 8: Upstream leased assets

Lease assets are minor and have been excluded from calculations.

Category 9: Downstream
transportation anddistribution

Due to the prohibitive difficulty of ascertaining the delivery of all goods for which the company is not the shipper, these could not be calculated. Whenthe company acts as the shipper and delivers the product to the customer, the consequent emissions are included in Category 4.

Category 10: Processing of soldproducts

Identified as relevant, but emissions have not been calculated due to the difficulties of identifying emission amounts for the individual processes of ourmany and diverse products.

Category 11: Use of sold products

No greenhouse gas are emitted in the use of our products.

Category 12: End-of-life treatment ofsold products

Target boundary: All production sites of AICA Kogyo Co., Ltd., AICA Interior Kogyo Co., Ltd., AICA Harima Kogyo Co., Ltd., and AICA TECH KENZAI
CO., LTD.
Calculated by multiplying weight of products sold during the reporting year by the emissions factor allocated for each product category. For someproducts that include volatile substances, product weight excluding the weight of those volatile substances was substituted for calculation purposes.

Category 13: Leased assets(downstream)

Target boundary: Production sites in Japan
Power use accompanying use of leased buildings during the reporting year, multiplied by emissions factor.

Category 14: Franchises

No applicable business operations.

Category 15: Investments

Some company funds are invested, but the percentage of our shareholdings in each investee company is slight and has a negligible impact on business activities, so this category has been excluded from calculations.

AICA Report 2023

Data Compilation

SOx (tonne)

Boundary and Criteria for Calculation of Environmental Indicators

Foundations of AICA

28,562

Sales locations in Japan

Released into Waterways
Total wastewater discharged (1,000 m³)
COD (tonne)
Nitrogen (tonne)
Phosphorous (tonne)
Substances subject to PRTR (tonne)

AICA’s Vision

84,10530,551

Water withdrawal volume (1,000 m³)

About AICA

AICA Group

1,325

90,954*2

AICA Report 2023

2,319

Industrial water (1,000 m3)

1,292

Use of Substances

69

2,586

1,181

82,961*2

AICA Group

2,425

1,163

85,850*2

Production sites in Japan

2,468

1,829

81,916

Production sites in Japan

2,385

Ground water (1,000 m3)

462

Refer to the figures on the
right

1,489

AICA Group

11

34,478

Greenhouse gas emissions
Scope 3 (t-CO2)

1,620

12

33,605

AICA Group total

1,434

12

30,635

Greenhouse gas emissions
Scope 1&2 subtotal (t-CO2)

1,381

13

31,766

Production sites overseas

1,043

772

34,783

Production sites in Japan

2,211

Production sites overseas

796

474

AICA Group

3,700

2,478

758

Sales locations in Japan
Production sites overseas

4 ,0982,384

808

31,731

Production sites in Japan

3,818

1,200

493

Industrial waste emission volumes (tonne)

FY2022

2,382

2,108

30,608Heat recovered (thermal recycling) (tonne)

FY2021

3,763

2,100*2

603

Product shipment volumes (tonne)

FY20202,291

1,951*2

32,167

Substance inputs (tonne)

FY20193,334

1,984*2

Atmospheric Emissions

Greenhouse gas emissions
Scope 2 (t-CO2)

FY2018

Production sites in Japan

AICA Group

3,029

Sales locations in Japan
Production sites overseas

Greenhouse gas emissions
Scope 1 (t-CO2)

Target Boundary

Use of Water Resources

70

Data Compilation

Non-Financial Data (Human Resources)
Target Boundary

FY2018FY2019FY2020Third-Party Assurance
FY2021

FY2022

Employment (as of end of fiscal year unless otherwise indicated)
Number of employees [Consolidated]*1

AICA Group

3,920

4,781

4,796

4,949

4,963

Number of employees [Non-consolidated]*1

Aica Kogyo

1,194

1,239

1,228

1,211

1,226

Male

Aica Kogyo

991

1,026

1,011

1,002

1,013

FemaleAica Kogyo

203

213

217

209

213

Number of non-regular employees

Aica Kogyo

234

248

239

243

242

Rate of non-regular employees

Aica Kogyo

16.3%

16.6%

16.2%

16.7%

16.5%

61

36

21

31

36

Aica Kogyo

49

28

18

23

25

FemaleAica Kogyo

12

8

3

8

11

Rate of female recruits*3

Aica Kogyo

32.0%

42.3%

Number of mid-career hires*1

Aica Kogyo

33

23

4

19

40

Rate of mid-career hires*4

Aica Kogyo

35%

39%

16%

38%

53%

Aica Kogyo

27

14

15

21

11

Number of employees newly engaged
under the re-employment scheme
Number of employees with disabilities
Statutory employment rate of people
with disabilities*5*6

40.0%

14.3%*10

24

28

31

28

29

22

24

26

25

25

Aica Kogyo

2.26%

2.35%

2.66%

2.47%

2.46%

16.5

AICA’s Vision

AICA Group
Aica Kogyo

About AICA

Aica Kogyo

Male

Number of new-graduate recruits*1*2

Years of Service (as of end of fiscal year unless otherwise indicated)
Aica Kogyo

15.4

15.5

16.1

16.5

Male

Aica Kogyo

16.0

16.1

16.6

16.8

16.8

FemaleAica Kogyo

12.5

12.8

13.7

14.7*10

14.7

Average age*1

Aica Kogyo

39.3

39.5

40.1

40.6

40.9

Aica Kogyo

3.39%

2.91%

2.44%

2.56%

Aica Kogyo

16.1%

16.1%

17.5%

8.9%

Aica Kogyo

80.4%

80.9%

80.7%

79.9%

Aica Kogyo

6,468

6,516

6,441

6,817

Average years of service*1

Rate of turnover*1*7
Rate of turnover after 3 years

*8

3.20%
*10

29.6%

Union Membership (as of end of fiscal year)

79.9%

Foundations of AICA

Rate of union membership*1
Wages, Working Hours, and Holidays
Average annual salary (thousand yen)*1
Regular employees

Aica Kogyo

Non-regular employees

Aica Kogyo

79.1%
62.6%
11.3

12.1

10.3

11.8

12.9

Aica Kogyo

61.7%

66.7%

55.9%

63.6%

69.1%
207

Average number of days of paid leave taken*9 Aica Kogyo
Average rate of paid leave taken

6,896
80.7%

Wage gap between male and female employees*5 Aica Kogyo

Diversity
195

199

209

213

Aica Kogyo

7

7

7

7

8

Rate of female managers

Aica Kogyo

3.6%

3.5%

3.3%

3.3%

3.9%

Rate of female employees taking childcare leave*5 Aica Kogyo

100%

100%

100%

100%

100%

Rate of male employees taking childcare leave*5

3.6%

17.1%

16.7%

16.7%

53.1%

Aica Kogyo

Data Compilation

Aica Kogyo

FemaleNumber of managers*1

State of Industrial Accidents
Number of fatal accidents

Group companies in Japan

0

0

0

0

0

Number of lost-time accidents

Group companies in Japan

6

7

6

5

4

Group companies in Japan

6

4

4

2

3

Group companies in Japan

12

13

6

12

10

Group companies in Japan

7

6

1

4

4

Of which, people other than full-time employees
Number of non-lost-time accidents
Of which, people other than full-time employees*1 Regular employees.
*2 Recruits that have graduated from high school, university, or graduate school and will be joining the company in April of the next fiscal year.
*3 Recruits that have graduated from university or graduate school that are in career-track positions.
*4 Calculated by dividing the number of mid-career hires in the relevant fiscal year by the sum of the number of new graduates and mid-career hires in the same fiscal year.
*5 Calculated according to the method for the statutory employment rate.
*6 As of March 1*7 Calculated by dividing the number of employees who resigned for personal reasons each fiscal year by the number of employees at beginning of that fiscal year.
*8 Calculated for graduates of university or graduate school.
*9 Full-time employees and rehires*10 To improve the accuracy of the figures, the figures in the AICA Report 2022 have been retroactively revised.

71

AICA Report 2023

AICA Report 2023

72

Data Compilation

AICA Group Network(As of end-Sep. 2023)▶ North America▶ East Asia

Chemical Products Segment
AICA Guangdong Co., Ltd.
Manufacturing Sales

Aica Nanjing Co., Ltd. Manufacturing Sales
Aica Shanghai Co., Ltd. Sales

Laminates & Building Materials Segment

Chemical Products Segment
AICA America, Inc. Sales

Wilsonart (Shanghai) Co., Ltd.
Manufacturing SalesJ AICA Interior Kogyo Co., Ltd. Manufacturing(Head Office, Head Office Plant)

Wilsonart Asia Limited Sales
Taiwan Aica Kogyo Co., Ltd. SalesKUNSHAN AICA KOGYO CO., LTD.
Manufacturing SalesA

Shenyang AICA-HOPE Kogyo Co., Ltd.

Tanba Plant Manufacturing

Manufacturing Sales

About AICA

J Soko Service Co., Ltd.
Replenishment and transport

EVERMORE CHEMICAL INDSUTRY CO., LTD.

POU CHIEN CHEMICAL CO., LTD.

Chemical Products Segment

Manufacturing Sales

DYNEA PAKISTAN LIMITEDLEADERSHIP (SHANGHAI) CO., LTD. Sales

Manufacturing Sales

Construction Materials Segment

TOPCO (SHANGHAI) CO., LTD. SalesJ AICA TECH KENZAI CO., LTD.
J AICA TECH KENZAI CO., LTD. Manufacturing

A(Ichikawa Plant)

Manufacturing (Akeno Plant)

Isesaki Plant ManufacturingA

J AICA Harima Kogyo Co., Ltd.
Manufacturing

Ibaraki Plant Manufacturing

J AICA Interior Kogyo Co., Ltd.

(Head Office, Head Office Plant, Kasai Plant)

CHEM-MAT TECHNOLOGIES CO., LTD.

Manufacturing (Ibaraki Plant)

Manufacturing Sales

Aica Laminates India Pvt. Ltd.
Manufacturing Sales

Fukushima Plant ManufacturingA

Holding company Manufacturing Sales▶ South Asia

GIANT STAR TRADING CO., LTD. SalesAJ NISHI TOKYO CHEMIX Corporation

Hiroshima Plant

Sales

Manufacturing

AICA’s Vision

J AICA TECH ENGINEERING CO., LTD.
Application
J AICA TECH KENZAI CO., LTD.
(Head Office) Sales

Aica Kogyo Co., Ltd.Head OfficeA

Nagoya Plant Manufacturing

A

Jimokuji Plant Manufacturing

J AICA TECH KENZAI CO., LTD. Manufacturing

Foundations of AICA

(Nagoya Plant)▶ Southeast Asia

Chemical Products Segment
AICA Asia Pacific Holding Pte. Ltd. Holding company
Aica Bangkok Co., Ltd. Manufacturing Sales
AICA HATYAI CO., LTD. Manufacturing Sales
AICA Thai Chemical Corporation, Ltd.

Laminates & Building Materials Segment

Manufacturing Sales

Aica Adtek Sdn. Bhd. Manufacturing Sales
Aica Malaysia Sdn. Bhd. Manufacturing Sales
AICA Singapore Pte. Ltd. Manufacturing Sales
PT. Adtek Trading Sales
PT. AICA INDRIA Manufacturing Sales

AICA Asia Laminates Holding Co., Ltd. Holding company Sales

Data Compilation

AICA Dong Nai Co., Ltd. Manufacturing Sales

Wilsonart (Thailand) Company Limited Manufacturing Sales
AICA HPL Trading Joint Stock Company Sales
Aica Laminates Vietnam Co., Ltd. Manufacturing Sales
PT. AICA Indonesia Manufacturing Sales
PT. Techno Wood Indonesia Manufacturing Sales▶ Oceania

LegendChemical Products Segment:

Chemical Products Segment

Laminates & Building Materials
Segment:

AICA NZ Limited Manufacturing Sales

Aica Asia Pacific Holding GroupPT. AICA MUGI INDONESIA Manufacturing Sales

Evermore Chemical Industry GroupPT. Ronadamar Sejahtera Sales
TOP WELL ELASTIC TECHNOLOGY CO., LTD. SalesAU-BEST VIETNAM POLYMER INDUSTRY CO., LTD.

Aica Kogyo Sales Locations

Manufacturing SalesJ

A

Aica Kogyo Production Sites

J Group Companies in Japan

VIETNAM SUNYAD TECHNOLOGY LIMITED Manufacturing
NISHI TOKYO CHEMIX VIETNAM COMPANY LIMITED Sales

73

AICA Report 2023

AICA Report 2023

74