Financial Results Presentation

for the FY 2022/3
May 10, 2022

Code number：4099

Contents
0. Our Business ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ P3

I . Financial Results for the FY 2022/3 ・・・・・・・・・・・・・・・・ P4
II. Forecast of Financial Results for the FY 2022/12・・・・・・ P11

III. Long-term Vision Challenge 1000 ・・・・・・・・・・・・・・・・・・ P15“STAGE 1” Progress Status

IV. New Organizational Structure ・・・・・・・・・・・・・・・・・・・・・ P27
V. References ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ P32
2

0. Our BusinessInorganic
Chemicals

Organic
Chemicals

Fine
Chemicals

For swimming pooland septic tankdisinfectants

Housing Materials

Chemicals

Raw materials fortires, etc.

Interior,
Exterior Finishes
andPaving Materials

Interiors

Exterior
Products
Exterior Products(carports, gates, etc.)

Chemicals for electronic
components(for printed wiring boards,
resin modifiers, etc.)3

Ⅰ．Financial Results

for the FY2022/3

Ⅰ－ １． Consolidated Financial Results■ Highlights of Financial Results for the FY2022/3(Millions of yen)

FY2021/3
AmountFY2022/3

Percentage

AmountIncrease ofamountPercentage

Changes

49,590100.0%

54,137100.0%

4,547

9.2%

N

Operating profit

7,401

14.9%

8,400

15.5%

999

13.5%

O

Ordinary profit

7,997

16.1%

9,291

17.2%

1,294

16.2%

O

19.4%

N
at
to

Net sales

Profit attributable toowners of parent

5,760

11.6%

6,878

12.7%

1,118

Exchange rate (USD)

106

112

Ex

Exchange rate (EUR)

122

131

Ex

◆ Net sales, operating profit, ordinary profit, and profit attributable to owners of parent reached record highs
入力用
Consolidated cumulative Q4・ Sales in chemicals exceeded the previous year's level, and overall net sales increased by 9.2% year on year.
FY2021/3

FY2022/3

増減率・ Profits increased due to pricepass-through in energy, resources,and ocean freight costs, whichsoareddue to COVID-19,
売上高49,590,679,969
1
54,137,872,113
1
4,547,192,144
9.2%
Russia's invasion of Ukraine,and the yen’s depreciation.
営業利益7,401,220,892
0.14928,400,127,918

0.1552998,907,026

13.5%

・ The yen weakened against
the U.S. dollar and theeuro, resulting
in a 992 million yen
increaseyear on year in the16.2%
経常利益
7,997,635,443
0.16139,291,204,757
0.1716
1,293,569,314

amount of foreign exchange impact on sales.
親会社株主に帰属する
5,760,399,475
当期純利益

0.1162

6,878,758,242

0.1271

1,118,358,767

19.4%

5

Ⅰ－ 2．Sales and Profit by Business segments(consolidated)（Millions of yen）

Net Sales

FY2021/3

Percentage

FY2022/3

Percentage

10,43521.0%

12,192

22.5%

16.8%

Chemicals Organic Chemicals
Operations Fine Chemicals

10,70921.6%

13,023

24.1%

21.6%

8,705

17.6%

9,778

18.1%

12.3%

Subtotal

29,85060.2%

34,995

64.6%

17.2%

1,475

3.0%

1,395

2.6%

▲ 5.4%

17,28534.9%

16,565

30.6%▲ 4.2%

18,76037.8%

17,961

33.2%▲ 4.3%

Other

979

2.0%

1,181

2.2%

20.7%

Total

49,590100.0%

54,137100.0%

9.2%

FY2021/3

percentage

FY2022/3

percentage

Total of Chemicals Operations

5,664

76.5%

7,545

89.8%

33.2%

Total of Housing Materials Operations

3,505

47.4%

2,576

30.7%

▲26.5%

Other▲ 1,768▲23.9%▲ 1,721▲20.5%

▲2.6%

Total

7,401

100.0%

8,400

100.0%

13.5%

Inorganic Chemicals

Interior, Exterior Finishes
and Paving Materials

Housing
Materials Exterior Products
Operations Subtotal

Segment Profit

Changes

Changes6Ⅰ－3．Overview of Sales by Segment (Chemicals Products)
16,00014,00012,00010,000
8,000

8,000

10,7095,877（25.9％）

6,000(Millions of yen)

（21.6％）（16.8％）

10,435

5,744

9,778

5,991
（4.3％）
8,705（12.3％）

2020/92021/32021/92022/3
4,538

4,669

6,000
4,000

13,023

12,192（16.9％）

3,882

4,000

2,000
0

2,000
無機化成品
①Inorganic
Chemicals

有機化成品②Organic
Chemicals

ファインケミカル③Fine
Chemicals

0①Sales of insoluble sulfur,
a material for radial tires, largely surpassed those of the previous fiscal year, which was
無機化成品
有機化成品 tires and industrial vehicle
ファインケミカル
affected by the spread of COVID-19,
due to solid demand for replacement
tires, despite adecline in automobile production resulting from semiconductor shortages. Sales of carbon disulfide for rayon andcellophane, and sodium sulfate for bath agents and detergents increased year on year due to a rebound from the
COVID-19 pandemic.
②Regarding chlorinated isocyanuric acid for disinfectants, the domestic market performed better than the previous year
mainly due to a recovery in sales of agents for swimming pools following the partial resumption of swimming lessons
at schools. In the U.S. market, the balance between supply and demand is tightening mainly due to a recovery
in economic conditions and stay-at-home demand, and the Company tried to improve profitability by passing on
soaring resource prices and distribution costs, which resulted in a significant increase in profitability.
③Regarding Glicoat-SMD, a heat-resistant soluble OSP (Organic Solderability Preservative) for printed wiring boards,
sales remained solid, against a backdrop of the growth of electronics markets worldwide. Sales of advanced &specialty chemicals such as epoxy resin curing agent (imidazoles), resin modifier (glycoluril derivatives, etc.) andsemiconductor processing materials increased year on year, backed by an increase in demand for use inelectronic components.

7Ⅰ－４．Overview of Sales by Segment(Housing Materials Products)(Millions of yen)
20,00020,00018,00018,00016,00016,00014,00014,00012,00012,00010,00010,000

8,000

8,000

6,000

6,000

4,000
2,000

1,475

1,395
（▲5.4％）

17,285

16,565（▲4.2％）

2021/32022/3

4,000

2,000
0

0

Interior, Exterior
壁材Finishes
and Paving Materials

エクステリアExterior
Products◆ Although the number of new housing starts showed signs of a slight recovery, sales of interior, exterior
finishes and paving materials and exterior products remained sluggish, as governments and privatecompanies deferred or had a wait-and-see attitude for their projects or capital investment, against a
backdrop of falling consumer sentiment and uncertainty about the future. Profitability also declined due
to soaring prices of raw materials including aluminum ingots.

8Ⅰ－５．Analysis of Increase/Decreasein Chemicals Segment Profit

手作業なので注意！

(Millionsof yen)
(百万円)

9,000

42
8,000

2,204

・Lower fixed cost perunit due to increased
production of
insoluble sulfur

610
157

164
244
235

6,000

5,664

7,545

262

・Increase indemand related
to electronic
components

564
23

512

230

502

627

7,000

20

・Price pass-through due tosoaring resource prices andlogistics costs under a tightsupply-demand balance
・Impact of yen depreciation

5,000

4,000

ファインケミカル

そ
の
他

当
期
営
業
利
益

Operating profit incurrent term

物
流
コ
ス
ト
の
増
加

Other

売
上
原
価
の
減
少

Increase in costof logistics

販
売
数
量
の
増
加

Decrease in costof sales

販
売
価
格
の
上
昇

Increase in sales
volume有機化成品

Organic Chemicals

その他

Increase in sales
price

物
流
コ
ス
ト
の
増
加

Other

売
上
原
価
の
増
加

Increase in costof logistics

販
売
数
量
の
減
少

Increase in costof salesIncrease in sales
price

販
売
価
格
の
上
昇

Decrease in sales
volume

無機化成品

Inorganic Chemicals

そ
の
他

Other

物
流
コ
ス
ト
の
増
加

Increase in costof logistics

売
上
原
価
の
減
少

Decrease in costof sales

販
売
数
量
の
増
加

Increase in sales
volume

販
売
価
格
の
上
昇

Increase in sales
price

Operating profit inprevious term

前
期
営
業
利
益

Fine Chemicals

9Ⅰ－６．Analysis of Increase/Decreasein Housing Materials Segment Profit(Millions of yen)

5,000
4,800

404

4,600
4,400
1,476

4,200
4,000
3,800

3,600

3,505

32

26

35

24

16

1,901

3,400
3,200

・Sales of highstrength
products

3,000
2,800
2,600

2,576

2,400

2,200

228

166

物
流
コ
ス
ト
の
増
加

そ
の
他

・Of which, thealuminum price hike(+746)
・Change in sales
composition (+1,077)

2,000
1,800
1,600
1,400
1,200

当
期
営
業
利
益

Operating profit incurrent term

Other

売
上
原
価
の
増
加

Increase in costof sales

販
売
数
量
の
減
少

Decrease in sales
volume

販
売
価
格
の
上
昇

Increase in sales
price

壁材

Interior, Exterior Finishes
and Paving Materials

そ
の
他

Other

物
流
コ
ス
ト
の
増
加

Increase in costof logistics

売
上
原
価
の
増
加

Increase in costof sales

販
売
数
量
の
減
少

Decrease in sales
volume

販
売
価
格
の
上
昇

Increase in sales
price

Operating profit inprevious term

前
期
営
業
利
益

Increase in costof logistics

1,000

エクステリアExterior Products

10Ⅱ．Forecast of Financial
Results
for the FY 2022/12

Ⅱ－１．The full-year financial results forecast (Consolidated)(Millions of yen)

FY2021/12
FY2022/12（Apr.-Dec.） （Apr.-Dec.）（Result） （Forecast）<<Reference>>（百万円）

Changes

FY2022（Apr.-Mar.）（Result）

Net sales

39,22946,00017.3%

54,137

Operating profit

6,158

5,800

▲ 5.8%

8,400

Ordinary profit

6,721

6,100

▲ 9.3%

9,291

Profit attributable toowners of parent

4,794

3,700

▲ 22.8%

6,878

Exchange

USD

111

120

112

rate

EUR

131

130

131

•

Since the fiscal year-end will be changed to December in FY2022,
the current fiscal year will be nine months.

Net sales

FY2021/12
FY2022/12（Apr.-Dec.） （Apr.-Dec.）

Changes

FY202212（Apr.-Mar.）Ⅱ－２．Business Forecast by Segment (Consolidated)（Millionsof yen）（百万円）<<Reference>>

FY2021/12（Apr.-Dec.）（Result）

FY2022/12（Apr.-Dec.）（Forecast）

Changes

FY2022（Apr.-Mar.）（Result）

Chemicals operations

25,49930,00017.6%

34,995

Housing Materials
Operations

12,772

15,00017.4%

17,961

FY2021/12（Apr.-Dec.）（Result）

FY2022/12（Apr.-Dec.）（Forecast）

Changes

FY2022（Apr.-Mar.）（Result）

Chemicals operations

5,734

5,500

▲ 4.1%

7,545

Housing Materials
Operations

1,693

1,800

6.3%

2,576

Net sales

Segment profit13Ⅱ－３．Capital investment, Depreciation, R&D expense（Consolidated）（百万円）（Millionsof yen）

5,000

Of which, production
plant related (TAP-4,
NEO2022) was
1,386 million yen

4,000

3,000

Capital investment
Depreciation

2,000

R&D expenses

1,000

0

FY2018/3

FY2019/3

FY2020/3

FY2021/3

FY2022/3

FY2022/12

FY2018/3

FY2019/3

FY2020/3

FY2021/3

FY2022/3

FY2022/12
予想（Forecast）

Capitalinvestment

1,628

2,073

1,961

4,106

3,599

4,477

Depreciation

2,318

2,281

2,189

1,835

2,090

2,368

R&D
expenses

1,310

1,295

1,338

1,207

1,392

1,259

2018/3

2019/32020/32021/32022/32022/12(Forecast)14

Ⅲ．Long-term Vision

Challenge 1000
“STAGE 1”
Progress Status

Ⅲ－１． Outline of Challenge 1000 ①
present

2020

FY

2025

2022

2029

Long-Term Vision Challenge 1000

STAGE 1

STAGE ２STAGE ３

With its corporate philosophy “Dokusouryoku (creativity)”,
the Group established its long-term vision “Challenge 1000”
to become a company that makes a proposal one step ahead
with Dokusouryoku (creativity) by 2030.

16Ⅲ－２． Outline of Challenge 1000 ②
・ Profitability and financial position deteriorated due to diversified management in the 1980s and 1990s. Under the Medium-termManagement Plan “SSS” Series, with the basic policy of returning to the core business, the company was reborn with a strong androbust management structure by reforming management and restructuring businesses.
・ After laying the foundations, the company formulated its Long-Term Vision, “Challenge 1000”, with the basic policy of aggressive
management and business reinforcement and expansion.
・ Business plans are being formulated and put into practice by backcasting from the vision of where the company wants to be in 2030.

グラフ タイトル(Millions of yen)

Long-Term Vision
20.0“Challenge 1000”

60,00060,000Net sales

(%)

20.0

Operating profit ratio

15.0
40,00040,000

15.0

10.0

10.0

5.0

5.0

20,00020,000

0

・
2005
・3
Medium-Term
0/6
Management Plan
0

・ ・
・3 ・3
0
/7 SSS0
/8
0 0

・2009
・
・3 ・3
0
/9 0
/0
0 1

・ ・2012・・3 ・3 ・30
New
/1 0
/2SSS 0/3
1 1 1・ ・2015・・3 ・3 ・3
SSS
over
0
0
/4the 500
/5 0
/6
1 1 1

・ ・2018
・・3 ・3 ・300
/7 2019
/8 0
/9
1 1 1

Medium-Term
Management Plan

0.0
・2020
・ ・ (FY)・3 ・3 ・3
Long-Term
Vision00/0 0/1 “STAGE
/2
1”
2 2 2

0.0

17

Ⅲ－３． Outline of Challenge 1000 ③
Yonpou Yoshi

Financial
Goals

Pillars for
Strategy

Net Sales
売上高
100 billions of
1,000億円
yen

Business Reform
PolicyCustomerCompanywide
Reform Policy

Employee

Proactive
Investment

Shareholder

Achievement of
SDGs

Community

Operating Income
15 billions of yen

ROE
10％

(Contributions to
Stakeholders)

18

円）

Ⅲ－４． Financial goals
40.0%

Implementing various measures in line with the strategic pillars
to achieve the goals set at each STAGE
80.0
2.5
77.5

（ Billions of売上高
yen ）

（連結）
Net
sales
35.0%
100.0 （Consolidated）
新規事業
New
5.0
売上高
business
95.0
30.0%
sales
既存事業
Existing
売上高25.0%
business
sales

60.0
52.8

15.2%

51.6

15.2%

20.0%

54.1

49.5
14.9%

15.0%
Operating

15.5%

15.0%
12.6%

7.9%

8.0%

7.9%

8.0

7.8

7.4

FY2019/3
2019/3 FY2020/3
2020/399期

100期

FY2021/3
2021/3
101期

営業利益率

46.0

10.0%

10.0%

5.8

FY2022/3
2022/37.5

FY2022/12
2022/12 FY2023/3
2023/3（Forecast）
102期
103期

STAGE 1STAGE
1profit ratio
ROE

12.5%

8.8%

8.4

15.0%

ROE

営業利益
5.0%
Operating（連結）
Profit15.0（Consolidated）

12.0

0.0%

FY2025/12
2025/12

FY2029/12
2029/12

106期

110期

STAGE 2２STAGE

STAGE 33
STAGE

19

Ⅲ－５． Progress Summary (FY2022/3)

Financial
Targets◆ For FY2022/3 results, operating profit progressed according to the “STAGE 1”
plan.
・ Net sales for FY2022/3 reached a record high but did not achieve the plan. Operating profit
achieved the plan.
・ FY2022/12 is the final year of “STAGE 1”. Due to a change in the fiscal year-end, it will bean irregular nine-month period, but we expect an increase in revenue over the previous year
on a nine-month comparison.

◆ Capital investment in production as planned

Investment
Business

・ Production facilities for fine chemicals (TAP-4) were completed and started operation last year.
 Strengthening production of semiconductor process materials.
・ Production facilities for chlorinated isocyanuric acid were completed in April and are scheduled
to start this summer.
 Development of an efficient production system.

◆ Activities to contribute to each stakeholder

Yonpouyoshi(Contributions
to
Stakeholders)・ Shareholders: Executed share buyback and listed on the prime market.
・ Social: Installed a solar power generation system atMarugame Plant.
In-kind support to “Parklet” for the Setouchi Triennale 2022
Signed “Collaboration Agreement on Nigiwai (lively)
Community Building” with Marugame City.

Parklet20

Ⅲ－６． Progress on Business Reform Policy
Next FY2022/12 is the final year of “STAGE 1”.
We will achieve our goals and aim for further growth in “STAGE 2”.

Business Name

Topic

STAGE 1 Target

Inorganic Chemicals•

Continue efforts to improve the quality of insoluble
sulfurConsider commercialization of products
developed from sulfur

Consolidated sales of
14 billion yen

Enhance production facilities (bulk products, ODM
products, etc.)
Strengthen sanitary products business

Consolidated net sales:
10 billion yen

Functional materials: Strengthen response to
demand for semiconductor process materials.
Develop new applications for resin modifiers(low dielectric, CFRP)
Glicoat-SMD: Aim to sell new OSPs that arehalogen-free and have long-term storage
stability
GliAS: Start handling Glicoat-SMD automatic
analyzer. Aim to propose total solutions
GliCAP: Approval of activities and achievements

Consolidated sales of 8 billion
yenStrengthen sales activities with high-intensity
products
Promote improvement of production efficiency
through Smart Factory

Consolidated net sales: 25
billion yen•

Organic Chemicals••

Fine Chemicals

•

•

•
•

Housing Materials••(Results in 2022/3: 12.1 billion yen)(2022/3 results: 13.0 billion yen)(2021/3 results: 9.7 billion yen)(2021/3 results: 17.9 billion yen)

* For an overview of the Business Reform Policy, see page 68-.

21

Ⅲ－７． Progress on Companywide Reform Policy
We are working to build a foundation that can accommodate diverse work styles, fostering a sense of selfimprovement, and creating a framework for change, and we are generally making progress as planned.
Item

Topic

Creation of values◆ Enhance brand value (Formulation of SHIKOKU QUALITY)◆ Strengthen environmental initiatives (Issue CSR report)◆ Implement measures to create new businesses(Implement internal recruitment)

Creation of reserve energy◆ Promotion of telework and other initiatives to improve work efficiency
・ Promote telework, which allows employees to work efficiently regardless of
their physical location

Creating ofoperational bases◆ Consolidation of sales bases

Creation of organization◆ Start discussion to determine the organizational structure to be pursued
・ Transition to a holding company structure (see page 27 for details)

Creation of company climate◆ Dissemination of long-term vision and exchange activities to eliminate
barriers between divisions
・ Hold workshops, roundtable discussions, and other events

Creation ofhuman resources◆ Create an environment in which employees can actively tackle challenges(Review the evaluation system, including the introduction of challenge goals
with a point system)

・ Moved interior, exterior finishes and paving materials production base to
Yoshinari location of Tokushima Plant* For an overview of Corporate Reform Policy, see page 7022Ⅲ－８． Pillar for Strategy (Proactive Investment)
Fine chemicals production facilities (TAP-4)
・

Investment of 2.5 billion yen in new fine chemicals production facilities at Tokushima Plant, which started
operation in July 2021
- Multi-plant capable of handling prototyping to mass production- Owning manufacturing facilities capable of producing high-quality, high-value-added semiconductormaterials and pharmaceutical intermediates- Owning facilities, manufacturing technologies, and analytical technologies capable of controlling
foreign materials and metals at the low ppt (parts per trillion) level

・ Used in the semiconductor field to realize IoT technology-

Expanding needs for high-quality, highly functional materials from manufacturers of semiconductor
process materials, etc.
The company provides new materials quickly by utilizing its proprietary organic synthesis technology
and TAP-4

・ Aiming for sales of 2 to 3 billion yen by 2030 in the semiconductor process materials field

Semiconductor silicon wafers

TAP-4(Tokushima Plant)23

Ⅲ－９． Pillar for Strategy (Proactive Investment)
Chlorinated isocyanuric acid production facilities (NEO2022)
・ Construction of new 5 billion yen chlorinated isocyanuric acid production facilities
completed in April 2022 at the Tokushima Plant-

Increase production efficiency => Strengthen global expansion of the business・ Organic chemicals set the vision of “Delivering cleanliness to people across the globe byprotecting the environment and ensuring sanitation ”-

In addition to the core pool business, expand the business into sanitary and other highvalue-added fields

・ Strengthen product development under our brand and further downstream business byleveraging our chlorine handling technology

NEO2022(Tokushima Plant)24

Ⅲ－１０． Pillar for Strategy (Achievement of SDGs)◆ Expansion of 2022 CSR Report

CSR Report (2022 edition) to be released on
our website in August
The following topics will be added to the 2022
edition:◆ Materiality Themes◆ Climate change initiatives, etc.

25

Ⅲ－１１． Shareholders Return–Transitions in Dividend Payouts–
4,000

自己株式取得額

56.6

55.1

Total payout ratio targeted

51.1

3,500配当総額(Millions of yen)
（％）
（百万円）
60.0

50.0
50%

連結総還元性向（％）
Share Repurchases
3,000
Total Dividends

40.0

2,474

2,500

Total Payout Ratio(%)

1,786

2,000

1,605

30.0

23.8

0

1,500

20.0

1,000
10.0

500
0

1,285

1,389

1,338

1,304

1,399

FY2019/3
2019/3

FY2020/3
2020/3

FY2021/3
2021/3

FY2022/3
2022/3

FY2022/12
2022/12(Forecast)（予想）
Dividends per
share (annual)

22.0

24.0

24.0

24.0

※このグラフは自己株取得をグラフに反映したときのビジュアルをイメージするために期中に仮で作成したもので、2020/3（予想）は、2020/2時点の実績を入れただけなので、期末

0.0
(yen)

26.0

(Forecast)

26

Ⅳ．New Organizational
StructureⅣ－１． Transition to a Holding Company Structure-1
Preparing for transition to a holding company structure from January 2023

Objectives(1) Enhancement of the business operation structure
Speed up decision-making by boldly transferring authority to each operatingcompany(2) Governance structure and redefinition of the head office’s role
Specialize the holding company in group management functions
Spinning off head office indirect divisions to eliminate duplication and optimize
operations(3) Strengthening the development of management talents
From the perspective of strengthening sustainable management capabilities,
promote the development of future management human resources throughautonomous management of the operating companies
Aiming to accelerate growth and respond to changes and challenges in the businessenvironment28

Ⅳ－２． Transition to a Holding Company Structure-2[Image of Group management structure after the transition]
SHIKOKU KASEI HOLDINGSCORPORATION（Our company）

SHIKOKU KASEICORPORATE SERVICE
CO., LTD.
【Shared Service】（Successor company:
newly established ）SHIKOKU CHEMICALSCORPORATIONSHIKOKU KASEIKENZAICORPORATION【Chemicals operations】(Successor company:
newly established)【Housing Materials
operations】（Successor company:
newly established ）ChemicalsGroup Companies

Housing Materials
Group Companies

Other Group
Companies29

Ⅳ－３． Transition to a Holding Company Structure-3◆Schedule
2022

Schedule forTransitioning to
Holding Company
Structure

2023

Jan..

Apr.

June.

Jan. 1

Establish a
preparationcompany fortransfer to holding
company

Approval of theabsorption-typecompany split
agreement by the
Board of Directors

Special resolution
at theshareholders'meeting

Succession ofrights andobligations to the
new company
Commencementof the holding
company
structure

On January 1, 2023, we will be reborn under a new management
structure and begin our Long-term Vision, Challenge 1000, “STAGE 2”.

We are determined to leap into becoming a company that will last for
100 years.

30

Thank you
for your attention!

V.References

Financial Data

Ⅴ－１．Consolidated Balance Sheets(Millions of yen)

Increase ofamountFY2021/3

FY2022/3

Current assets

65,024

67,6682,644 Accounts receivable - trade（+1,767）

Non-current assets

42,31946,137

3,818 Investment securities（+2,625）

Total assets

107,344

113,805

6,461

Current liabilities

15,702

19,1093,407

non-current liabilities

15,075

13,788▲ 1,287

Total liabilities

30,77832,897

2,119

Current portion of long-termborrowings (+2,000)

Total net assets

76,56680,908Retained earnings（+3,334）
4,342 Valuation difference on available-forsale securities (+1,064)

Total liabilities
and net assets

107,344

113,805

6,461

Capital-to-asset ratio

70.5%

70.3%

▲ 0.2%

ROE

7.9%

8.8%

0.9%

34

Ⅴ－２．Consolidated Statements of Cash Flows(Millions of yen)

FY2021/3

FY2022/3

Net cash provided by (used in) operating activities

7,411

5,089

Net cash provided by (used in) investing activities(2,999)(5,087)

Net cash provided by (used in) financing activities

89(1,809)Net increase (decrease) in cash and cash equivalents

4,599(1,451)

Cash and cash equivalents at end of period

37,20735,755Flee cash flow＝Netby (usedin) operating= CFcashfromprovided
operatingactivities- CF fromactivities
investing activities

4,412

2

-Net cash provided by (used in) investing activities◆Cash flows provided by operating activities totaled ¥5,089 million.
Major sources of revenue： Profit before income taxes of ¥9,710 million and depreciation of ¥2,090 million
Major expenditure factors： Income taxes paid of ¥2,739 million◆Cash flows used in investing activities totaled ¥5,087 million.
Major expenditure factors： Purchase of property, plant and equipment of ¥4,153 million◆Cash flows used in financing activities totaled ¥1,809 million.

Major sources of revenue ：Proceeds from long-term borrowings of ¥2,160 million
Major expenditure factors ：Purchase of treasury shares of ¥2,474 million and dividends paid of ¥1,326 million.

35

Corporate Profile

Ⅴ－３．Corporate Profile（As of March 31, 2022）

 Company nameSHIKOKU CHEMICALS CORPORATION Code number

4099

 Stock exchangeTokyo

Industry：Chemicals

listing Incorporated

October 10, 1947

 Head office

Marugame, Kagawa Prefecture President and C.E.O.

Naoto Tanaka

 Capital

6,867 million yen Number of employees

1,210（Consolidated）

 Net sales

54,137 million yen （Consolidated）

37

Ⅴ－４ ． Business Structure Two main business pillars, which arechemical products and housingmaterials.

Chemicals
Operations

Inorganic
Chemicals
Organic
Chemicals
Fine
Chemicals

SHIKOKU
CHEMICALSCORPORATION
Housing
Materials
Operations

Interior, Exterior
Finishes
andPaving aterials
Exterior
Products

38Ⅴ－５ ． History
Oct 1947

Established in Marugame, Kagawa Prefecture with a capital of 2 million yen as a producer of carbon disulfide (=>inorganic chemical products)

Oct 1957

No. 1 Tokushima Plant (now Tokushima Plant's Yoshinari location) was constructed and began operations in the
production of sodium sulfate (=> inorganic chemical products)

Jun 1962

No. 2 Tokushima Plant (now Tokushima Plant's Kitajima location) was constructed

Oct 1962

The Company's shares were listed on the Second Section of the Tokyo Stock Exchange

May 1964

Japan's first operations to produce chlorinated isocyanurates (=> organic chemical products) were launched at No. 2
Tokushima Plant

Dec 1969

The Company began production of OSP (Organic Solderability Preservative) (which was later called Glicoat-SMD (=> Fine
Chemicals) for PWBs (Printed Wired Board) and other electronic components

Sep 1970

The Company began production in the field of housing materials, launching production of interior finishes (JULUX) at No.
2 Tokushima Plant

Jun 1972

The Company began production and sales of accordion gates (=> Exterior Products)

Mar 1975

The Company moves its share listings from the Second to First Sections of the Tokyo Stock Exchange and Osaka
Securities Exchange

Jul 1975

Tadotsu Plant was constructed in Tadotsu, Kagawa Prefecture

Nov 1975

Full-scale production of imidazole (=> Fine Chemicals) began at No. 2 Tokushima Plant (test production began in 1968)

Jun 1981

The Company opened a representative office in Los Angeles (which later became an overseas subsidiary as SIC in 1985)

Jul 1984

Production of insoluble sulfurs (=> Inorganic Chemicals) began at Marugame Plant

Sep 1992

The Research Center (now R&D Center) was constructed in Utazu, Kagawa Prefecture

Oct 1995

Ranzan Plant was constructed in Ranzan, Saitama Prefecture

Jul 2006

Shikoku (Shanghai) Co., Ltd. was established in Shanghai

2008

The Company began sales of a roughening agent for PWBs (=> Fine Chemicals), and constructed a new plant for GlicoatSMD at Marugame Plant

Aug 2013

Tokushima Advanced Chemicals Plant-3 (TAP-3) facility was constructed at Tokushima Plant

Sep 2014

Converted Nippon Ryutan Kogyo Co., Ltd., the only carbon disulfide production company in Japan, into a consolidated
subsidiaryApr 2015

Offices were established in Taiwan and Singapore

Apr 2017

Converted Nippon Koki Co., Ltd. into a subsidiaryJul 2021

Tokushima Advanced Chemicals Plant-4 (TAP-4) facility was constructed at Tokushima Plant

Apr 2022

Moved to the prime market following the TSE's market reclassification

Apr 2022

New chlorinated isocyanuric acid production facilities (NEO2022) constructed at Tokushima Plant

39

Ⅴ－６ ． History and Sales Trends
2022
Net Sales

Moved to Tosho Prime
Market1975

Moved to Tokyo Stock
Exchange Section 1
1962
Listed on Tokyo Stock
Exchange Section 22016 GliCAP
2008
2004
1991

1947
Establishment

1984

1972
1970
1968
1964
1957
1947

Microetching solution
for PWBs

Advanced Materials

Glicoat-SMD
Insoluble Sulfur
Exterior Products

Wall Materials
Imidazoles
Chlorinated Isocyanurates
Sodium Sulfate
Carbon Disulfide

40Chemicals Operations

Chemicals Operations①Inorganic Chemicals

Ⅴ－７ ． Inorganic Chemicals(Millions of yen)

Inorganic
Chemicals[Major products]□ Carbon Disulfide …Essential materials for chemical
fiber rayon□ Insoluble Sulfur…Rubber vulcanization agent□ Sodium Sulfate…Warm bath effect accelerator forbath additives
Synthetic detergent cleaning aid

12,192(22.5％)

FY2022/3
Consolidated
Net Sales
54,13743

Ⅴ－８ ． Insoluble Sulfur-Product Introduction□
□

□

□

□

□
□

Application: Vulcanizing agent for rubber
Main customers: Domestic and overseas tire manufacturers
The raw material rubber is hard, and it acquires the characteristic to extend and contractby adding sulfur and heating (vulcanizing).
When normal sulfur is used in the production process of radial tires, sulfur blooming(deposition) occurs on the surface of rubber and cause poor adhesion of rubber.
Since insoluble sulfur is dispersed in the material rubber, it can be used to suppress blooming.
For production of insoluble sulfur, polished handling technique for the company foundation
product “carbon disulfide” is required.
High quality is demanded in insoluble sulfur by tire manufacturers.
In March 2017, production facility expansion was completed, and our production capacity wasincreased to 1.3 times.
■ Insoluble Sulfur■ Manufacturing processes for insoluble sulfur (schematic diagram)Heating
450°C

Gaseous sulfur
Slow coolingRapid cooling(using carbon disulfide)
n=400-1,200nNormal sulfur

Insoluble Sulfur

44

Chemicals Operations②Organic Chemicals

Ⅴ－９ ． Organic Chemicals(Millions of yen)

[Major products]
Chlorianted Isocyanurates（NEO-CHLOR）… for swimming pool and septic tankdisinfectants□ HIPOLKA… Wastewater/sludge treatment
agent□

FY2022/3
Consolidated
Net Sales
54,137
Organic
Chemicals
13,023(24.0%)46

Ⅴ－１０. Chlorinated Isocyanurates-Product IntroductionApplications: Sanitizing agent for swimming pools and septic tanks, chlorine-based sanitizing agent forspas and home baths□ Main customers: Swimming pool operators, schools, general consumers (U.S.)□ Main component: Chlorinated Isocyanurates□ Compared to other disinfectant agents for swimming pools, “NEO-CHLOR” is characterized by longer
duration in outdoor pools and little quality deterioration even after a long period of storage, as it undergoes
little degradation caused by ultraviolet rays.
□ It delivers strengths in “NAPIX,” an automatic chlorine feeder for swimming pools and business baths.
□ Utilizing the strong oxidation, bleaching, and cleaning power of chlorine, we are developing various fields
of application such as industrial and home sanitary field, ballast water (seawater used as weight on thebottom of the ship) treatment, drinking water application, and sanitation management applications invarious facilities.
□

 NEO-CHLOR product group Image of ballast water sanitization

Filter

Sanitization

Neutralization

Mixing
Cl

O

N

Cl N

O
N Cl

Sea water
injection
BackwashBallast tank
Sea water
discharge

O
ChlorinatedIsocyanurates「NEO-CHLOR MARINE」

47

Chemicals Operations③Fine Chemicals

Ⅴ－１１. Fine Chemicals(Millions of yen)

FY2022/3
Consolidated
Net Sales
54,137[Major products]
Fine Chemicals
9,778(18.1%)

Water-soluble rust preventive agent for
printed wiring boards (OSP)□ Advanced & Specialty Chemicals…
Imidazoles (curing agent of epoxy resin)□Glicoat-SMD…

□

THEIC

□

Solder resist

Resin modifier, raw material for drug
… Raw material for heat-resistant wirevarnish49

Ⅴ－１２. OSP: Organic Solderability Preservative-Product Introduction□

□
□

□

□

□

Application: Water-soluble rust preventive agent for printed wiring boards
OSP: Organic Solderability Preservative]
Main customers: Printed wiring board manufacturers all over the world
By forming an organic coating on the copper circuit of the printed wiring board to preventoxidation of the exposed copper circuit, it ensures good soldering performance in theimplementation process, and contributes to reliable electronic component manufacture .
The main component of OSP is imidazole, which has a property to selectively undergo chemical
reaction with copper. Our strength is that we are also an imidazole manufacturer and cansynthesize the main ingredient to suit the required properties of OSP.
While rust preventive agents for printed circuit boards include metal plating in addition to OSP,
the percentage of OSP is still increasing.
Glicoat-SMD has acquired a lot of material designations from major electrical manufacturers, andhas become an industry standard.
By increasing the environmental performance ahead of other companies, we are increasing the
adoption results for automotive electrical components and semiconductor package boards.
 Printed wiring boards going throughGlicoat-SMD treatment tank

 Treatment with Glicoat-SMD (schematic diagram)
Substrate

Solder resist

Glicoat-SMD coating

O2

O2

Coppercircuit50

Ⅴ－１３. Advanced & Specialty Chemicals-Imidazoles
□
□
□

□

□

□

Application: Curing agent and curing accelerator for epoxy resin*, raw material for drugs
Main customers: Resin material manufacturers and drug manufacturers
Imidazole is used in a wide range of applications, including curing agent for epoxy resin and urethane
resin, raw material of drugs and agricultural chemicals, and raw material of various industrial
chemicals such as rust preventive agents.
The majority of our company sales come from application as an epoxy resin curing agent.
Epoxy resin which used imidazole as a component has optimal properties for electrical and electronic
component applications.
We have a lineup of various imidazoles to support the diverse curing speeds and properties
demanded by the users.
In the fields where competitive products (non -imidazole products) were strong, there isa movement for customers to newly adopt imidazole to improve the product performance.

*Epoxy resin: A collective term for resin-like compounds with epoxy groups that readily react at the ends of amolecule, and thermosetting synthetic resins that are formed by polymerizing the compounds withcuring agents. Used in printed circuit boards, paints, etc. in addition to adhesives.
 Electronic part using epoxy resin (example)

Applications of imidazoles from our company

Polyurethane
ポリウレタンDrugs and agricultural chemicals
医農薬
Automobiles
自動車others
その他･ Rubber applications･ Adhesive forstructures

Industrial
paint
工業用塗料

N

NH

Imidazole

Electrical and electronic
insulating materials

51Ⅴ－１４. Advanced & Specialty Chemicals-Imidazoles
Engine CPU

Car navigation system[Laminated plate, sealing agent,solder resist ink]

[Liquid crystal sealing material]

Engine hood
[CFRP (reinforcedcarbon fiber)]Frame structure[Adhesive forstructures]Electric motor

Tires [Tire grip improving agent][Insulating powder
paint]Air hose[Acrylic rubber agent]52

Ⅴ－１５. Focused Products (Printed Wiring Boards Agents)













GliCAP®
Adhesion improving agent between copper circuit and resin on printed wiring boards.
Conventionally, unevenness was formed on surface by roughening (etching) the copper
so that the adhesion to resin was improved by “mechanical bonding” (anchor effect).
As the performance of semiconductors is improved, it is becoming more difficult toroughen the copper on package boards implementing high performancesemiconductors, with the copper circuit width decreasing to ultrafine level.
Copper circuits with smooth surface are required for high-frequency server boards for whichfurther acceleration is being demanded to achieve practical application of the 5th generation mobile
communication system (5G), since transmission loss is caused by the unevenness of the copper
surface in the high-frequency range.
GliCAP® has both properties to “strongly bind to resin” and “strongly bind to copper,”and can improve the adhesion “chemically” without roughening the copper surface.
We are including applications other than those in printed circuit boards for GliCAP ® in the
future.
Conventional
method(roughening)
従来方法（粗化）

GliCAP®
(smooth)

Resin

Resin

CopperCopperResinStrong bonding with resin

Strong bonding with copper
Copper53

Ⅴ－１６. Focused Products (Advanced & Specialty Chemicals)











Advanced materials
Advanced materials at our company refer to the products (compounds) that can improvevarious functions by blending them as materials for electronic parts such as semiconductorsthat are used in electronic devices, etc.
Demands for improvement in the properties of resin materials to be used (heat resistance, electricalproperties, etc.) are increasing as electronic devices evolve, and there are increasing
opportunities to consider the functional materials of our company.
The range of examination for the functional materials of our company is quite wide, andexaminations are being made even with carbon fiber reinforced plastics (CFRPs) that areused as structural materials for automobiles and aircrafts with a purpose to improve heat
resistance and strength.
Using the organic synthesis technology cultivated with imidazole and isocyanuric
acid, our company is committed to research and development of new functional material
products.
Construction of a plant equipped for high quality such as
low metal control has been decided in order to produce
state-of-the-art semiconductor process materials. The plant(TAP-4) started operation in July 2021.

TAP-4（Tokushima Plant)54

Ⅴ－１７. Focused Products (Advanced & Specialty Chemicals)A new isocyanuric acid derivatives
We developed this material by utilizing isocyanuric acid synthesis technology we haveaccumulated.
It has excellent heat resistance, light resistance, and transparency, and is used as a modifier for
sealing agent, etc.












New adhesion improver
A resin modifier that improves adhesion to inorganic materials such as metals through addition to
the resin. Since it delivers adhesion equivalent to the conventional modifiers while having no sulfur
content, it can improve the metal corrosivity, which was a problem with the conventional
product.
We are developing its application in a wide range of resin materials including epoxy systemcommonly used in electronic parts, acrylic system, urethane system and polyimide system.
Benzoxazine
A resin with excellent heat resistance, flame
resistance and electrical properties.
Examination is being made as a semiconductors
sealing agent and carbon fiber reinforced plastics(CFRPs) .

■ Benzoxazine55

Ⅴ－１８. Focused Products (Advanced & Specialty Chemicals)

Glycoluril derivatives

A multi-functional resin modifier with transparency and high heat resistance.
It has 4 functional groups and is expected to form hardened materials with a high crosslinking
density.

Thiol groupProducts having a thiol groups (-SH) as a functional group will rapidly cure with epoxy resin
at a low temperature. Compared to the conventional modifiers, cured resin has excellent
heat resistance, moisture resistance, acid resistance, alkali resistance, and hardness, andit can significantly improve the resistance to heat and moisture, which had been a problem.
It has been adopted in the field of electronic materials that continue to advance inperformance and miniaturization.

56

Housing Materials

Operations

Housing Materials Operations④Interior, Exterior Finishes
andPaving Materials

Ⅴ－１９. Interior, Exterior Finishes and Paving Materials[Major products]□□□

Interior materials (silicate walls, natural
material walls)
Plastered wall materials withmoisture control function and harmful
chemical substance and daily odor
adsorption/decomposition function
Exterior materials
Wet exterior material for housing
Paving materials
Natural stone paving materials, recycled
glass paving materials
Rubber chip paving materials(Millions of yen)

FY2022/3
Consolidated
Net Sales
54,137
Interior, Exterior Finishes
and Paving Materials
1,395(2.6%)59

Ⅴ－２０. Interior, Exterior Finishes and Paving Materials
Interior materials
The business started with "JULUX," the first industrial product for plastered wall material
in Japan, which was developed for in-house chemical glue CMC application.
It is difficult to handle Juraku wall, traditional Japanese wall, but with our wall materials,
uniform quality can be maintained only by mixing a specified amount of water. Our
plastered wall material is freshly drawing attention because of its property of highadsorption of chemicals that cause sick building syndrome such as formaldehyde as well asodor.
We are deploying the products characterized by high designability to our target market ofcommercial and public space design and custom-designed houses. Colors and expressions
are brought to a space by three-dimensional and various patterns that can be only achieved
with thick coating.
■ Interior materials

60Ⅴ－２１. Interior, Exterior Finishes and Paving MaterialsExterior and paving materialsWe also expand our business to “exterior” to cover the outside of buildings andexterior parts, and “paving” to cover the surfaces of roads and approaches.
Our exterior materials come in wide variations including colors and can create subtle expressions
as they are finished manually to the texture of the surface. As paving materials, we offer
materials such as natural stone, natural sand, and rubber chips.
For exterior materials and paving materials, we create synergistic effects by making use of
our sales channels for exterior products.

■ Paving materials

61

Housing Materials operations⑤Exterior Products

Ⅴ－２２. Exterior Products(Millions of yen)

[Major products]
Home Exterior Products□ Gates, fences, carports, and decks
First product□Accordion gatesin industry(expansion type gates)
which was□ Art Walldeveloped by(aluminum system fence)
our company

Decorative Exterior Products□ Large gates, fences, pathway shelters,
bicycle parking spaces□
Garbage accumulation storage (first productin industry which was developed by ourcompany)□ Green roof, etc.

Exterior
Products
16,565(30.6％)

FY2022/3
Consolidated
Net Sales
54,13763

Ⅴ－２３. Home Exterior Products









In 1971, when the motorization was rapidly progressing, we devised an “accordion
gate,” which can be easily opened and closed with an expansion mechanism, and which
can respond to the residential situation with limited space in Japan, and it became thestandard for gates in front of the car shed.
Since then, we have continued to add to the product lineup for general gates, carsheds (car ports), fences, deck materials, terraces, etc.
We also devote our efforts in design, in addition to our focus on functions, and won
the first “G mark” (current Good Design Award) in the exterior industry in 1984.
‘Fun roof,’ our terrace roof with a sample design which harmonizes to the houseusing flat, wood-like ceiling materials received the 2019 Good Design Award.

■ Terrace■ Carport■ Accordion gate64Ⅴ－２４. Decorative Exterior Products■ Pathway shelter■ Bicycle parking space■ High strength car stops■ Garbage accumulation storage）65

Ⅴ－２５．Efforts in Housing Materials Business

We are adding to the lineup of high-strength exterior products that are resistant to wind and snow
and promoting sales expansion, based on the fact that large-scale disasters such as typhoons havebeen recently happening one after another over the country.
We deploy the strength standards and quality cultivated in the decorative area to all products andare developing products with high quality and strength.

As parts of the lineup of high-strength products, we have commercialized fences for detachedhouses, and independent terraces in addition to the large fences, archways, Large fences, and car
ports.

■ Fences■ Shelter■ Fences■ Car port

■ Terrace66

Long-Term VisionⅤ－２６. Business Reform Policy
Chemicals
Operations

Continue to develop and advance for the sake of the world

Fine

Organic

Inorganic

Desired State
Make use of materials
which are difficult to handle in a recyclingoriented manner and contribute totechnological innovation and environmental
preservation around the world

Strategic Scenario
Accumulate sulfur handling and synthesis
reaction evaluation technologies
Create new value starting from making use of
sulfur and expand the business domain

Deliver cleanliness topeople across the globe by protecting theenvironment and ensuring sanitation

Anticipate customer needs based on social
issues such as the water environment andsanitation and make optimal proposals
concerning sterilization and cleaning with ourunique technologies and services

Contribute to technological advancement
by providing highly functional products
based on unique technologies

Set unique themes by anticipating needs andestablish technologies in cooperation withprosperous customers.
Develop highly functional products based on
accumulated unique technologies

Create global standards with our new
technologies

Set themes with an eye on market trends and develop
products drawing on our strengths
Strive to propose
comprehensive solutions from the point of view ofcustomers68Ⅴ－２７. Business Reform Policy

Housing
Materials
Operations

Design a new lifestyle in the future and contributeto the community development around the world for everyone’s happinessHousing
Materials

Desired state
Design a new lifestyle in the future
and contribute to the community
development around the world
for everyone’s happiness

Process to provide value
Attract and acquire human resourcesand engineers in Japan and overseas, withoriginal products placing focus on the design
and functionality

Promote alliance and extend operations
globally with our unique product categories69

Ⅴ－２８. Companywide Reform Policy Set six companywide reform policies toward realization of the desired state in 2030 and push forward with them mobilizing
group-wide efforts
Desired statein 2030

Toward “one- step-ahead, proposal” company with Dokusouryoku(creativity)
Solve social issues with creative ideas, leading the progress of the world❶ Creation of values
Increase brand value andtake on challenges
for new business Improvement of SHIKOKU QUALITY

Companywide
reformpolicy Establishment of a framework thatmakes it easier for everyone topropose and take on challenges for
new businesses and ideas for suchbusinesses❷ Creation of reserve energy ❸ Creation of operational bases
Improve efficiency to secureresources for reforms

Gain a foothold into the world
and accelerate global businessexpansion

 Elimination of inefficiencies andsimplification and standardization ofoperations

 Formulation of companywide operationalbase strategy

 Efficiency improvement by making useof technology such as IT

 Optimization of domestic production,
development and sales operational bases

 Optimal allocation of personnel andwork style reforms

 Optimization of overseas production,
development and sales operational bases❹ Creation of organizations❺ Creation of company climate ❻ Creation of human resources

Establish a group governancestructure to realize the vision

Foster company climate whichembraces diversity andencourages challenges

Build a framework to encourage
individuals to take on challenges
and evaluate individuals fairly

 Spread of “proposal-based styles” among
employees

 Establishment of a framework forrecruitment which attracts desired humanresources Building of an optimal group
governance structure Establishment of a group governancestructure in keeping with the businessexpansion overseas

 Fostering of company climate to develop“proposal-based styles”
 Establishment of a working environment
which accommodates diverse work styles

 Creation of opportunities for growth where
each individual is respected Revision to and strengthening ofmanagement of the evaluation system70Ⅴ－２９. Yonpou Yoshi – Contributions to Stakeholders –Customers“One-step-ahead” values
We will provide new values
with our unique, state-ofthe-art products andservices.

Employees

Community

Challenges and growth

A better tomorrow

We will support a fulfilling
life with a sense of real
growth through various
ways of working andthrough taking onchallenges.

We will contribute to theresolution of social issues
and to realize a prosperous
living environment.

Shikoku Chemicals
Group

Shareholders
Shareholders return
policyWe will aim to achievea total return ratio of 50%
on a consolidated basis.

71

Contact Information
Corporate Planning Dept.
SHIKOKU CHEMICALS CORPORATION

TEL：+81-(0)877-21-4119

FAX：+81-(0)877-22-0411
www.shikoku.co.jp[Note regarding this document]
Forward-looking statements or projections mentioned in this document, including earnings are based on
currently available information and actual results may differ from the projection due to various factors.
Further, the purpose of this material is to provide information to the investors, and not to serve as arecommendation to buy or to sell. Please note that SHIKOKU CHEMICALS CORPORATION will not be
responsible for the consequences of investments etc.