DIC REPORT 2018
The DIC Group Integrated Report

English Version

The DIC WAY
MissionThrough constant innovation, the DIC Group strives
to create enhanced value and to contribute tosustainable development for its customers and society.

MissionVisionVisionSpiritSpiritColor & Comfort by Chemistry

Drive, Integrity, Dedication, Collaboration, Harmony

Making it Colorful
DIC helps make life colorfulSpecialty Solutions
DIC draws on its expertise andcomprehensive strengths to offer solutions

Innovation through Compounding
DIC brings innovation to society through its
core compounding technologies

Connecting the DIC Group and its Stakeholders

About this Report

DIC Group Communications Tools

In previous years, the DIC Group has published a combined
FRUSRUDWHSUR¿OHDQGVXVWDLQDELOLW\UHSRUWZLWKWKHDLPRISUHVHQWLQJa clear, easy-to-understand picture of the Group and its sustainability
initiatives. Beginning in 2018, the Group has transformed the
DIC Report into an integrated report, which combines financial
information, encompassing consolidated operating results andcorporate strategies, and nonfinancial (sustainability) information.
7KH*URXSKDVSXEOLVKHGDVLPSOL¿HGVXPPDU\YHUVLRQRIWKHUHSRUW(printed), which focuses on key highlights, and a more detailed
complete version (PDF), which contains extensive quantitative data.

The DIC Group uses a variety of tools to promote communication with its many
stakeholders to encourage greater awareness of the Group’s activities. More detailed
sustainability-related information and data can be found on the DIC website.

3ULQWHG3')î)RUP3XEOLFDWLRQV

Reports on activities
DIC Report

DIC Report(summary version)(complete version)

DIC Report
Financial Section

DIC Report (Complete version) (PDF-form publication)WEB

http://www.dic-global.com/en/csr/annual/
Note : $VXVHGKHUHLQWKHWHUP³$VLD±3DFL¿FUHJLRQ´²DJHRJUDSKLFGHVLJQDWLRQWKDWOLNH³(XURSHDQGWKH$PHULFDV´DQG
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Japan and Greater China) and Oceania. The term “Asia and Oceania” refers to Asia (excluding Japan) and Oceania.

Link with the DIC Website
The ( WEB ) mark indicates that more detailed information and/or
data can be found on the indicated page of the DIC global website.
DIC global website WEB http://www.dic-global.com/en/
Summary integrated
report (published annually)(printed publication)

Complete report(published annually)(PDF-form publication)

Report on results of operations
DQG¿QDQFLDOFRQGLWLRQ
(published annually)(PDF-form publication)

Scope of Reporting
In principle, this report provides information on DIC Corporation and consolidated
DIC Group companies worldwide. For information on the scope of reporting for
ESH-related initiatives, please visit the pertinent page of the DIC website.
WEB http://www.dic-global.com/en/csr/pdf/dic_report_scope_en_2018.pdf

Reporting Period

DIC Global Website

Fiscal year 2017 (January 1–December 31, 2017)

Real-time information
WEB

Date of Publication
June 2018 (The next report is scheduled for publication in June 2019.)

http://www.dic-global.com/en/

Guidelines Referenced

Umbrella website providing information to the global
public about the DIC Group and reports on its various
activities; updated as necessary

Guidelines referenced in the preparation of this report were ISO 26000, theInternational Organization for Standardization’s standard for social responsibility,
released in 2010; Japan’s Responsible Care Code; and the Global Reporting
Initiative (GRI)’s GRI Standards.

Contents
The DIC Group: A Global Powerhouse
A Message from the President)LQDQFLDODQG1RQÀQDQFLDO,QIRUPDWLRQThe DIC Group’s Approach to Value Creation
The DIC Group’s Business Portfolio

35

Overview of Materiality and Sustainability

37

21

Printing Inks
Fine Chemicals
Polymers
Compounds
Application Materials

44

23

Fiscal Year 2017 DIC Group Topics

Compliance
Risk Management
Information Security
Environment, Safety and Health (ESH)
Quality
Human Resources Management
Sustainable Procurement
Business Models that Respond to Social Imperatives
New Technology Development and Value Creation
Harmony with the Community and Social Contributions
Communication with Stakeholders

3
5
9
11
13
13
15
17
19

25
25
27

29

33

39

45
48
49
50
51
52

Special Feature

Product Development Designed to Create New Value

53

Pigments for Color Filters Used in LCDs and OLED Displays (Functional Pigments)
Adhesive Primers for Optical and Packaging Films

60

TOPIC

Efforts to Reduce Environmental Impact by Using Water-Based
Biomass Ink Made with Plant-Based Packaging Resin
30

37
38

Corporate Governance'LUHFWRUV&RUSRUDWH$XGLWRUVDQG([HFXWLYH2IÀFHUV

61

Financial Report for Fiscal Year 2017
7KLUG3DUW\9HULÀFDWLRQDIC Group Milestones
Cover Design
The cover of this year’s DIC Report derives its
inspiration from the DIC Group’s “Color & Comfort”
brand slogan, employing bright colors that evoke theefforts of the Group, a global powerhouse, to enrichand add vibrancy to society and the lives of people
everywhere.

DIC Report 2018 ̲2

The DIC Group: A Global Powerhouse
Corporate Data
Registered name:
Corporate headquarters:

DIC Building, 7-20,
Nihonbashi 3-chome,
Chuo-ku, Tokyo 103-8233,
Japan
February 15, 1908
March 15, 1937
¥96.6 billion
20,628(Nonconsolidated: 3,273)

Date of foundation:
Date of incorporation:
Paid-in capital:
Number of employees:
Number of subsidiaries
and affiliates:(

171 Domestic: 32
Overseas: 139

Global Network)

Corporate headquarters (Tokyo)

DIC has 171 companies in 64 countries and territories around the world.

49

Europe

32
China

31

Japan

Europe and Africa
Sun Chemical Group and others

Net sales¥175.5 billion
Operating income¥10.6 billion

5South andSoutheast Asiaa
Asia and Oceania(Excluding Japan)

DIC (China) Co., Ltd., DIC Asia
Pacific Pte Ltd and others

AfricaNet sales¥161.2 billion
Operating income¥13.4 billion

DIC (China) Co., Ltd.
(PRC)

3̲ DIC Report 2018

DIC Asia Pacific Pte Ltd(Singapore)

23

Japan
DIC Corporation, DIC Graphics
Corporation and others

2

Net sales¥314.2 billion
Operating income¥31.9 billion

Oceania

Sun Chemical Corporation headquarters (United States)

Breakdown of Fiscal Year 2017 Net Sales by Segment

Net Sales(Billions of yen)

10,000500’15’16 ’17

0

（FY）

45.1%

’13

’14 ’15 ’16 ’17￥789.4billionFine Chemicals

16.4%

23.9%

100

’13 ’14

Printing Inks

Compounds

Polymers

56.5

54.2

51.1

41.1

200

2,000

40.2

789.4

751.4

820.0

830.1

705.6

300

Application Materials

6.8%
7.8%

400

6,000

0

(Billions of yen)

600

8,000

4,000

Operating Income

Breakdown of Fiscal Year 2017 Operating Income by Segment（FY）

Application Materials
Notes: 1. The consolidated results for fiscal year 2013 comprise the accounts for the nine months ended December
31, 2013, of DIC and all but one of its domestic subsidiaries and the 12 months ended December 31, 2013,of its overseas subsidiaries and one domestic subsidiary.
2. Corporate data is as of December 31, 2017. Net sales and operating income are for fiscal year 2017.

Printing Inks

4.2%

28.1%

Compounds

￥56.5

8.0%

Fine Chemicals

billion

28.1%

Polymers

31.6%

North
America

15

Note: Fiscal year 2017 net sales and operating income as used here include intersegment transactions. For
this reason, and because of the existence of transactions classified as “others,” which are not
attributable to reportable segments, these figures differ from reported net sales and operating income.

Breakdown of Fiscal Year 2017 Net Sales by Region
Asia and Oceania

North, Central andSouth America

20.4%

Sun Chemical Group and others

North, Central andSouth America

Net sales

17.6%¥138.5 billion
Operating income¥6.3 billion￥789.4billion

Japan

39.8%

Europe and Africa

22.2%
Breakdown of Fiscal Year 2017 Operating Income by Region
Asia and Oceania

Central and SouthAmerica

21.6%

14North, Central andSouth America

10.0%

￥56.5
billion

Japan

51.3%

Europe and Africa

17.1%
Note: Operating income as used here includes eliminations (approximately ¥5.8 billion). Accordingly,
these percentages do not represent shares of reported operating income.

Principal Global R&D Sites

Polymer Technical Center —China

Rochdale(United Kingdom)

Printing Inks
Technical Center—
China

Midsomer Norton (United Kingdom)
Gallarta (Spain)

Qingdao DIC Finechemicals (PRC)

Cincinnati (United States)

St. Charles (United States)
Fine Chemical Technical Center—Korea

Carlstadt (United States)
Central ResearchLaboratories (Japan)
Eurolab (Germany)
Polymer Technical Center —Asia Pacific (Thailand)

Printing Inks Technical Center—
Asia Pacific (Thailand)

Solid Compound Technical Center
Asia Pacific (Malaysia)
Pigment Technical Center
Asia Pacific (Indonesia)

DIC/Earthrise Algae
Research Center (United States)

DIC Report 2018 ̲4

A Message
from the President
Representative Director,
President and CEO
DIC Corporation

Kaoru Ino

Vision:A unique global organizationthat is trusted by society• Contribute to global society guided
by our Color & Comfort brand slogan• Realize corporate value to which people canrelate through the promotion of diversity• Work with DIC Group employees, customers
and shareholders to create value and build an
appealing brand5̲ DIC Report 2018

%XLOGLQJRQ2XU<HDU+LVWRU\WR'ULYH
New Growth and Evolution
Ensuring that DIC remains a unique global organizationthat is trusted by society
In the period under review, I assumed the reins as
representative director, president and CEO of DIC. Having
accepted the appointment, I believe that my mandate is to do
my utmost to carry out my duties, the most important of whichis to build on the foundation established by my predecessors
to drive new growth and evolution.
   ,Q ILVFDO \HDU  ZH DUH FHOHEUDWLQJ WKH WK
anniversary of DIC’s establishment. Printing inks, a key
business since the start, continue to account for the bulk of
our sales. While marveling at the fact that we have inheritedD \HDUROG EXVLQHVV IURP RXU IRXQGHUV , UHFRJQL]Hthat today we operate in an environment characterized bychanges that differ in nature from anything we have everIDFHGEHIRUH)RUH[DPSOHWKHWHOHSKRQHWRRNPRUHWKDQ
years to come into widespread use. In contrast, Facebook
took only a year to gain worldwide popularity. Social
structures continue to change drastically, owing primarily
to three key factors, namely the next wave of advanced
digital technologies, falling birth rates and issues related
to financial resources to support the social safety net. The
pace of change is astonishing. In a sense, I see this as the
new normal. Amid such rapid and drastic changes, how domaterials manufacturers contribute to society going forward?
As we work to adapt resilient businesses passed on to us by
our founders to this new normal, we must also look at how tohandle change. I see responding effectively to these issues
as an important mission.
,Q¿VFDO\HDUWKHVHFRQG\HDURIRXUFXUUHQWWKUHH
\HDUPHGLXPWHUPPDQDJHPHQWSODQ',&ZHVXFFHHGHG
in achieving record consolidated income results. Net sales
IRUWKHSHULRGDPRXQWHGWRELOOLRQ2SHUDWLQJLQFRPH
DQG RUGLQDU\ LQFRPH ZHUH  ELOOLRQ DQG  ELOOLRQ
respectively. Net income attributable to owners of theSDUHQWZDVELOOLRQ'XULQJWKHSHULRGEXVLQHVVHVWKDW
we expect to drive growth—notably functional pigments,

polyphenylene sulfide (PPS) compounds and packaging
materials, in which we are concentrating our allocation ofmanagement resources on a global basis—continued to
expand steadily, as we laid the groundwork for future growth,
including through advance investments. Despite some ofour businesses feeling the impact of rising raw materials
prices and other external factors, we responded effectively
by focusing our attention on launching products that meetmarket need and expanding sales of environment-friendly
high-value-added offerings. Thanks to these and other efforts,
we made solid progress toward achieving the objective ofa key strategic initiative spearheaded by my predecessor,
Yoshiyuki Nakanishi, namely, the realization of a robust
HDUQLQJVVWUXFWXUHWKDWLVLPSHUYLRXVWRÀXFWXDWLRQVLQH[WHUQDO
factors such as raw materials prices and exchange rates.
,Q¿VFDO\HDUZHZLOOHPEDUNRQDQHZPHGLXPWHUP
management plan. In considering the content of this planand our mission, which defines what we ultimately aspire
to be, we will endeavor to address increasingly varied andcompelling social imperatives and contribute to the realizationof a sustainable society. To this end, we must cultivate
new businesses, in addition to printing inks, pigments andcompounds, in which we have the potential to earn global
market-leading positions.

Formulating a new medium-term
management plan
In preparation for the launch of our new medium-term
PDQDJHPHQW SODQ LQ ILVFDO \HDU  ZH DUH SURPRWLQJ
extensive debate and discussion to determine criticalchanges needed for us to fulfill our mission, based on
which we will formulate strategies from a medium- tolong-term perspective. Our determination to respond to

Quantitative Targets(Billions of yen/%)

Net sales
Operating income
Net income
ROE (return on equity)
Ordinary investments
Strategic investments (M&As, etc.)
D/C ratio*
Dividend payout ratio

2015
Actual2016
Target2016
Actual2017
Target2017
Actual2018
Forecast¥820.0
¥51.1
¥37.4
15.0%
¥34.0
—
47%
21%

¥870.0
¥54.0
¥25.0
9.0%

¥751.4
¥54.2
¥34.8
12.9%

¥920.0
¥58.0
¥30.0
10.0%
¥120.0¥150.0Around 50%
Around 30%¥789.4
¥56.5
¥38.6
13.0%

¥820.0
¥58.0
¥40.0
12.2%

* Debt-to-capital (D/C) ratio: Interest-bearing debt / (Interest-bearing debt + Net assets)

DIC Report 2018 ̲6the dramatic changes taking place in society—to the new
QRUPDO²UHPDLQV¿UP
In pondering our image of the DIC Group in the future,
the key will be our Color & Comfort brand slogan. This
unique slogan really conveys DIC’s DNA. It encapsulates
our desire to leverage the power of chemistry, drawing on
our wealth of core technologies, to bring color and comfort
to people’s lives and, in so doing, to contribute to therealization of a richer, more vibrant society. This slogan
is of course based on our management vision, Color &Comfort by Chemistry.
I have narrowed my focus for achieving these goals to
areas that offer potential synergies with base technologies
in our printing inks, pigments, polymers and other corebusinesses, implementing measures designed to bolster
corporate value and build new businesses. Taking a
distinctively DIC approach, we will focus on environmentfriendly printing inks and polymers, packaging andhealthcare businesses that contribute to food safety, andon liquid crystals (LCs), jet inks and pigments that enable
us to provide a rich array of color materials. Such efforts
would position us to resolutely fulfill our role in helping toaddress social imperatives and deliver value to society
while concurrently adding muscle to our high-value-added
businesses. Examples include packaging inks, which areunquestionably printing inks but unlike other printing inks
are expected to see market growth in the future, as well as
conductive and insulating inks, which from a technology
perspective are completely different from conventional
printing inks. For us, the challenge is as big as cultivating
businesses in brand new domains. We intend to look at
areas peripheral to businesses in which we have basetechnologies. At the same time, we will seek to further
expand our business portfolio, and to improve its efficiency
and soundness.
We will discuss ideas and encourage debate internallyZKLOH DW WKH VDPH WLPH HQYLVLRQLQJ ZKDW ZH DVSLUH WR 
years down the road. From there, we will use backcasting
to formulate our next medium-term management plan,ZKLFK ZLOO NLFN RII LQ ILVFDO \HDU  :H ZLOO SXEOLVKGHWDLOV RI WKH SODQ²WHQWDWLYHO\ FDOOHG ',&²DV VRRQ DV
they are available.

Emphasizing innovation to drive
further evolution,Q -DQXDU\  ',& DQQRXQFHG D FDSLWDO DQG EXVLQHVV
alliance with Taiyo Holdings Co., Ltd. Partnering with Taiyo
Holdings, which commands a top-class share of the global
market for solder resist, will position DIC well to develop
products for the electronics sector, notably for printed
ZLULQJ ERDUGV 3:%V  8QGHU ',& ZH KDYH LGHQWLILHG
electronics as a key next-generation theme, alongsidecarbonreduction, packaging and life sciences.
In the area of business development, Mr. Nakanishi was
WKH¿UVWWRGHPRQVWUDWHWKHLPSRUWDQFHRIEUHDNLQJIUHHIURPour reliance on independent efforts and actively encouraging
open innovation to capitalize on external resources. We
are also promoting participation in global venture networks.
Through such efforts, we are working to, among others,
identify and promote new next-generation development
themes and swiftly secure cutting-edge technologies toaccelerate the creation of new businesses. We are also
making flexible use of strategic investments, having
EXGJHWHGELOOLRQIRUWKLVSXUSRVHRYHUWKHWKUHH\HDUVRI',&WRRXWOLQHDQHZJURZWKWUDMHFWRU\WRLQWHUQDODQG
H[WHUQDOVWDNHKROGHUV%\WKH¿QDO\HDURIRXUQH[WPHGLXP
term management plan, we aim to achieve a stable return on
HTXLW\ 52( RISOXVXQGHUSLQQHGE\WKHYDOXHFUHDWHG
through such new innovation, as well as consolidated net
VDOHV RI DURXQG  ELOOLRQ DQG FRQVROLGDWHG RSHUDWLQJLQFRPHLQWKHDUHDRIELOOLRQWKHUHE\PHHWLQJWKHORQJWHUPWDUJHWVVHWIRUWKLQ',&

Global value creation:
The essence of the DIC GroupIn considering our image of the DIC Group in the future,
it is impossible to gloss over the importance of a global
perspective. We conduct our operations through a network
RI  FRPSDQLHV LQ  FRXQWULHV DQG WHUULWRULHV :H DUH
the world’s leading manufacturer of printing inks; organic
pigments, the principal raw material used in printing inks;

Growth attributable tostrategic investments(M&As, etc.)
Next-generation
businesses

Growth Scenario and Positioning of DIC108

Ensure the sustainability of businesses withstable earnings bases• Responses to environmental concerns• Rationalization• Strategic investments (M&As, etc.)
2016

2017

DIC108

7̲ DIC Report 20182018

Create business models that Achieve sustainablegrowth by revamping
address social imperatives
business portfolio• Electronics• Packaging• Healthcare• Low carbonization
2019

2020

DIC111

2021

2022

2023

DIC114

Businesses that will
drive growthBusinesses withstable earnings bases2024and PPS compounds—key engineering plastics—with global
PDUNHWVKDUHVRIDURXQGDQGUHVSHFWLYHO\$SSUR[LPDWHO\  RI FRQVROLGDWHG QHW VDOHV DUH RXWVLGH
Japan. In other words, a global perspective is critical formany reasons. One of these is the need to manage exchange
rates that go hand in hand with our business activities,
which is not one on one with the U.S. dollar, but involves
multiple currencies, including the euro, the Turkish lira andthe Indian rupee. It is all extremely complicated, but wehave established a mechanism that enables us to effectively
PDQDJHIDFWRUVWKDWFDXVHH[FKDQJHUDWHÀXFWXDWLRQV
I see our global character as a vital growth driver. We haveestablished printing inks, polymer and PPS technical centersin key locations in Asia, Europe and elsewhere, enabling us
to accurately grasp and swiftly address local needs. We are
currently taking steps to reinforce our global management
structure, including appointing a local executive to head up
a key product division, as well as our regional headquarters,
to ensure we remain abreast of rapid market changes.
These moves have positioned us to maximize our uniquestrengths as a multinational group with R&D facilities and
GLYHUVHKXPDQUHVRXUFHVDURXQGWKHZRUOG6LQFH¿VFDO\HDU ZH KDYH EHHQ SURPRWLQJ DPELWLRXV JOREDO EUDQGLQJ
initiatives to bolster awareness of the value that we provide
to stakeholders and encouraging employees to apply thatawareness to their everyday work, and in doing so to help
instill a greater sense of solidarity across the Group.

ESG as a central element of management
The DIC Group launched its corporate social responsibility&65  SURJUDP LQ ILVFDO \HDU  ODWHU FKDQJLQJ WKHdesignation used across this program from “CSR” to“sustainability.” Since then, we have steadily implemented
LQLWLDWLYHV LQ OLQH ZLWK  NH\ WKHPHV UDQJLQJ IURP“Compliance” to “Business models that respond to social
imperatives.” In light of increasing awareness of social
imperatives pertaining to environmental, social and
JRYHUQDQFH (6* UHODWHGLVVXHVHIIHFWLYHIURP¿VFDO\HDUZHHVWDEOLVKHGWKH(6*8QLWAs a leading chemicals manufacturer, we are working tosecure safety, reduce environmental impact and ensure
the stringent management of chemical substances, which
we view as fundamental to our operations and an essential
responsibility. We are also taking steps to combat climatechange—a universal challenge—including setting mediumto long-term targets for reducing our global emissions ofCO worldwide and focusing on the development of productsthat contribute to a low-carbon economy. In addition, we are
deepening awareness of and redoubling efforts to address
other critical issues, including minimizing industrial waste byrecycling and reusing materials and addressing water risks.
In the area of global human resources, we acknowledge
the importance of advancing diversity, including by valuing
different philosophies and values. We have spelled out a goalof marshaling the diversity of the individuals that make up ourlabor force, recognizing the fact that we are in an age today
where individuals can change society. In other words, weunderstand the absolute importance of promoting diversity

in management. A key component of this is to advanceopportunities for female employees, a theme for which wehave set a key performance initiative (KPI). As a group withURXJKO\  HPSOR\HHV LQ  FRXQWULHV DQG WHUULWRULHV
around the world, it is important to remain aware that wehave a vast range of exceptional human resources that wemust manage in a way that maximizes latent capabilities.
To marshal the diversity of individuals, we will also work toensure that employees feel like active participants.
Finally, on the subject of governance, we have establisheda structure based on Japan’s Corporate Governance Code
DQGLQ¿VFDO\HDULQFUHDVHGWKHQXPEHURILQGHSHQGHQW
outside directors on our Board of Directors with the aimof further reinforcing governance functions. We are also
working to fortify our foundation as a global organization
through measures ranging from reinforcing the governancecapabilities of our subsidiaries, thereby strengthening theoverall framework that underpins Group management, tostrengthening our quality management system and ensuring
compliance with new laws and regulations.
In Japan, you sometimes hear the phrase “a company isa public entity of society.” In the future, companies will be
evaluated not only for their success in responding to change
but also for their ability to be agents of change. From thisperspective, as a distinctive global manufacturer of finechemicals, we will continue to be guided by our Color &Comfort brand slogan as we actively take on the challengeof creating value for society.

DIC Report 2018 ̲8

Financial Information

Note: The consolidated results for fiscal year 2013 comprise the accounts for the nine months ended
December 31, 2013, of DIC and all but one of its domestic consolidated subsidiaries and the 12months ended December 31, 2013, of its overseas subsidiaries and one domestic subsidiary.

Net Sales, Operating Income and Operating Margin
Net sales

Operating income

Cash Provided by Operating Activities and Free Cash Flow
(Billions of yen)

900

830.1

820.0

800
700

7.2%

6.2%

Operating income(Billions of yen)

789.4

751.4

705.6

80
70

7.2%

5.7%

600

Cash provided by operating activities
Free cash flow

Operating margin (%)

Net sales(Billions of yen)

60

4.9%

500

70

62.5
60

40

33.9

300

30

20

20

10

51.1

41.1

54.2

56.5

100

10

0

0

2013

2014

2015

2016

2017

29.1

30

40

40.2

46.4

50

400

200

54.2

50

24.0

19.0

19.1

30.3

0

-4.7

-5

(FY)

2013

2014

2015

2016

2017

(FY)

* Owing to an investment of ¥24.9 billion in Taiyo Holdings Co., Ltd., cash used in investing
activities increased in fiscal year 2017.

Net Income Attributable to Owners of the Parent and ROE

Capital Expenditure

Net income attributable to owners of the parent
Return on equity (ROE) (%)(Billions of yen)

70

62.4

(Billions of yen)

50

60

40

30

26.8

20

34.8

（%）
30

25.2

16.1
11.3

50

38.6

37.4

30

12.9

2014

34.0

27.6

32.1

20

13.0
10

2013

36.3

20

14.6

10

0

40

2015

2016

2017

10
0

0

(FY)

2013

2014

2015

2016

2017

(FY)

* Owing to an investment of ¥24.9 billion in Taiyo Holdings Co., Ltd., cash used in investing
activities increased in fiscal year 2017.

Net Assets, Interest-Bearing Debt and D/C Ratio*
Interest-bearing debt

Net assets

Returns to Shareholders* (Dividends per Share and Payout Ratio)
Interim dividend

D/C ratio (%)

Payout ratio (%)

Year-end dividend(Billions of yen)

29.4

400

300

27.3
（%）
70

299.1
274.2

259.5

57.7
49.8

200

47.2

50

44.0

43.6

100

276.7

289.9

307.0

344.0

(Yen)

150

2013

2014

2015

2016

2017

* Debt-to-capital (D/C) ratio: Interest-bearing debt / (Interest-bearing debt + Net assets)

9_ DIC Report 2018

20

20.5

20

50

0

(FY)

0

120

15

60

10

100

100

10
0

20.5

40
30

218.9

25

22.4

60

265.7

241.3

（%）
30

80
60

60

268
30

252
30

40
374

30

30

40

40

2013

2014

2015

2016

60
60
2017

* Figures have been adjusted to reflect the impact of the consolidation of shares.
(In fiscal year 2015, DIC purchased and retired treasury shares.)

5

0

(FY)

1RQ¿QDQFLDO,QIRUPDWLRQ
Global CO2 Emissions and CO2 Emissions per
Unit of Production (DIC Group)
CO 2 emissions

Global Energy Consumption and Energy Consumption per
Unit of Production (DIC Group)

CO 2 emissions per unit of production(Metric tonnes)

Energy consumption

Energy consumption per unit of production

Kg CO2 /metric tonne

400

1,000,000（GJ/metric tonne）（Thousands of GJ）

14,000900,000

327

800,000

305

311

723,000
700,000

5.343

13,000316
657,000

659,000

659,000

296

11,126

11,000

5.360

5.144

12,48912,000
300

6.000

5.649

11,379

11,100

5.155
5.000

11,053

10,000635,000

4.000

9,000

600,000

8,000

200

500,000

3.000

7,000
6,000

400,000

5,000

300,000

2.000

4,000

100
200,000

3,000

1.000

2,000

100,000

1,000
0

0

2013

2014

2015

2016

2017

%DVH\HDU)LVFDO\HDU
** &2 HPLVVLRQVSHUXQLWRISURGXFWLRQLVFDOFXODWHGXVLQJDGMXVWHGSURGXFWLRQYROXPH SDUHQWFRPSDQ\LQ-DSDQRQO\  1RWL¿FDWLRQVXEPLWWHGWR-DSDQ¶V0LQLVWU\RI(FRQRP\7UDGHDQG,QGXVWU\

0

0

(FY)

2013

2014

2015

2016

(FY)

2017

%DVH\HDU)LVFDO\HDU
** (QHUJ\FRQVXPSWLRQSHUXQLWRISURGXFWLRQLVFDOFXODWHGXVLQJDGMXVWHGSURGXFWLRQYROXPH SDUHQWFRPSDQ\LQ-DSDQRQO\  1RWL¿FDWLRQVXEPLWWHGWR-DSDQ¶V0LQLVWU\RI(FRQRP\7UDGHDQG,QGXVWU\

Environment-Friendly Products as a Percentage of Overall
Product Portfolio (DIC Corporation and DIC Graphics Corporation)

Occupational Accident Frequency Rate (DIC Corporation)(Rate)

（%）

DIC

1.50

100

Subsidiaries in Japan

90
1.00

80
70

0.50

57

60

52

53

56

56

50

0.00
2010

40

2011

2012

2013

2014

2015

2016

2017 (FY)

Note: The frequency rate expresses the frequency of accidents resulting in lost workdays in a fiscal year,
calculated as the number of deaths or injuries per million work hours.

30
20Frequency rate ＝

Number of deaths or injuries due to occupational accidents
Total work hours

10
0

2013

2014

2015

2016

2017

(FY)

× 1,000,000

A frequency rate of 1.0 means one occupational accident resulting in workdays lost in one year
at a site with 500 employees.

2ZLQJWRWKHLQWURGXFWLRQRIDQHZ6$3HQWHUSULVHUHVRXUFHSODQQLQJ (53 V\VWHP
LQ¿VFDO\HDUWKHPHWKRGXVHGWRFDOFXODWHHQYLURQPHQWIULHQGO\SURGXFWVKDVFKDQJHG

Average Years of Employment (DIC Corporation)
Male employees(Years)Female employees

Average years of employment in fiscal year 2017
Male employees:

Female Employees in Management Positions (DIC Corporation)(Number of people)

41

18.2 years Female employees:19.2 years Overall:18.4 years

33

25
30

10

3

3.1%

20
2.6%

2

2.2%

5

4

3.7%

24
20

4.4%

28

20

15

（%）

5

40

10
1

0
1994

2009 2010 2011 2012 2013 2014 2015 2016 2017 (FY)
0

2014

2015

2016

2017

2018

0

(FY)

DIC Report 2018 ̲10Achieving Sustainable Growth

The DIC Group’s Approach to Value Creation

Climate change

Business
Segments

Printing
Resource depletion

Fine Chemicals

Health-related issues

Coating

Polymer
designOpticsCore
andcolor technologies
Applicability Dispersion
assessment

Solutions

InputsOrganic
molecular
designInvestment of capitalIntellectual capital(Technologies)

Printing Inks

Human capital(Diverse humanresources)

Diversesocial imperatives

Processes

Production capital(Facilities)

Financial capital(Capital base)With the aim of ensuring a sustainable society, the DIC Group strives to provide
products and solutions that respond to the needs of markets and its customers
and add color and comfort to life.

Application
Materials

Provision of
distinctively
DIC solutions(Coating/printing/molding/adhesion)

Natural capital(Raw materials/
environment)

Adhesion
Compounds

Human rights issues

Next-generation
businesses
Cyber threats

Social and relationship capital(Customers)

Polymers

11̲ DIC Report 2018

Open
innovation

Molding
Climate changeRealization ofcolorful,
comfortable andsustainable
lifestyles
PackagingFood safety

Electronics

Value created

Automobiles

Outcomes

Outputs

Expansion of operations in promising markets

Healthcare

Harmony
with theenvironment

Infrastructure

Consumergoods

Joy and contentment
Remaining a distinctive company worthy of society’s trust
DIC Report 2018 ̲12

Printing Inks

A Stable Business
Since the Start
President, Printing Inks Segment Hideo Ishii

This segment focuses on printing
inks, DIC’s mainstay businesssince its establishment. A global
market leader, DIC boasts an
H[WHQVLYHSURGXFWSRUWIROLRUDQJLQJ
from publishing inks to inks andadhesives for packaging, enabling
it to respond to the needs ofcustomers worldwide.

Printing Inks Product Division

Key
Products

2IIVHWLQNVJUDYXUHLQNVÀH[RLQNVFDQFRDWLQJVQHZVLQNVSDFNDJLQJDGKHVLYHVSULQWLQJVXSSOLHV

Outstanding color
reproduction and reduced
energy consumption

Ensuring safety for food andthe environment
FINART series(Gravure inks for food packaging)

DAICURE HR series(High-sensitivity UV-curable offset inks)

FINART gravure inks combine superb image
quality and suitability for high-speed printing.
They also respond to demand for the reductionof solvents in food packaging and for compliancewith safety regulations in different markets, thereby
contributing to safety for food and the environment.

As well as suitability for use with low-power
UV printers, DIC’s innovative DAICURE
HR high-sensitivity UV-curable offset inks
deliver outstanding color reproduction.

| Segment Operating Results
Net Sales(Billions of yen)

For more information, please see Segment Results on page 53.

FY2016FY2017FY2018 (Forecast)

365.2

373.7

391.4

FY2016

18.4
4.8

241.1

232.7

79.8
(8.9)
Japan

13̲ DIC Report 2018

77.7

(9.4)

(9.2)

The Americas
and Europe

Asia and
Oceania

Eliminations

FY2018 (Forecast)

17.8

17.4
4.7

4.0
4.7％

5.0％

251.0

77.1

FY2017(Billions of yen/ %)

71.9

64.8

61.6

Operating Income
and Operating
Margin

4.6％

8.4

9.5

95
9.0

5.1

3.9

4.1

Japan

The Americas
and Europe

Asia and
Oceania

Operating margin

| Business Strategies Under DIC108
Rationalize operations in mature markets and shift focus
to packaging inks

Expand operations by focusing on promising markets
and products

Recent years have seen a tapering of demand for publishing inks, news inks
and other inks for paper-based print media, particularly in mature markets
such as Japan, North America and Europe, owing to the burgeoning
popularity of digital media. Since its previous medium-term management
SODQZKLFKUDQIURPILVFDO\HDUWKURXJKILVFDO\HDUWKH',&
Group has sought to strengthen the printing inks business by advancing
WKUHHFRUHVWUDWHJLHVZKLFKDUHWRIXUWKHUUDWLRQDOL]HRSHUDWLRQVLQPDWXUH
markets, to augment operations in promising emerging economies andto shift its business focus to packaging inks, for which demand is rising
ZRUOGZLGH8QGHU',&WKH*URXSLVWDNLQJGHFLVLYHVWHSVWRUHLQIRUFHLWV
presence in emerging economies, keeping a close eye on demand trends.
$WWKHVDPHWLPHWKH*URXSLVZRUNLQJWRRSWLPL]HLWVUHJLRQDOSURGXFWLRQ
configurations and elevate sales of segment products, particularly
environment-friendly inks, functional coatings and adhesives.

The DIC Group is reinforcing its production capabilities, placing
an emphasis on the Middle East, South America and key AsianPDUNHWVVXFKDVWKH3KLOLSSLQHVDQG9LHWQDP,QERWKHPHUJLQJ
and developed economies, the Group is focusing its allocation of
resources on environment-friendly products for food packaging
applications, including packaging inks, functional coatings andadhesives. Through these efforts, together with those in related
businesses such as films, the Group will continue striving toprovide total packaging materials solutions that respond to theneeds of both consumers and brand owners.

| Progress of Major Initiatives in Fiscal Year 2017
In the area of packaging inks, demand continued to increase inJapan, North America and Europe, underpinned by increasingly
sophisticated consumer lifestyles. Demand in emerging
HFRQRPLHVDOVRFRQWLQXHGWRH[SDQGRZLQJWRSRSXODWLRQJURZWKand rising living standards.
Evocative of the DIC Group’s commitment to promoting
recycling and reuse, in Japan the period brought the launch of
a rice ink, an innovative environment-friendly printing ink madewith recyclable materials derived from biomass, namely, ricebran. In addition to being included in the list of rice inks approved
by Japan’s Rice Ink Consortium, the new ink has gained
Biomass Mark certification from the Japan Organic Recycling
Association (JORA). The Group was also active in emerging
economies, establishing a joint venture in Saudi Arabia.
3DFNDJLQJLQNVDFFRXQWIRUPRUHWKDQRIWKHSULQWLQJLQNVPDUNHWRQWKH$UDELDQ3HQLQVXODZKHUHWKHDQQXDOPDUNHWIRU
VXFKLQNVLVSURMHFWHGWRFRQWLQXHJURZLQJDWEHWZHHQDQG
IRUWKHIRUHVHHDEOHIXWXUH:LWKWKHDLPRIH[SDQGLQJWKH

Group’s presence in this strategically important market, Sun
Chemical Corporation formed a joint venture with the region’s
leading printing inks manufacturer in terms of market share. Sun&KHPLFDOKDVORQJKDGRSHUDWLRQVRQWKH$UDELDQ3HQLQVXOD
7KH*URXSZLOOPRYHVZLIWO\WRPD[LPL]HV\QHUJLHVEHWZHHQWKH
ORFDOSDUWQHU¶VPDUNHWLQJFDSDELOLWLHVZKLFKUHÀHFWLWVIDPLOLDULW\with the market, and Sun Chemicals’ technologies to provide
top-quality products and superior services.

DIC Launches the PASLIM VM Series of Dry Laminating Adhesives that
(QKDQFHWKH2[\JHQ%DUULHU3URSHUWLHVRI9DSRU'HSRVLWLRQ)LOPVHIGHLIGHT,Q¿VFDO\HDU',&GHYHORSHGWKHPASLIM VMVHULHVRIGU\ODPLQDWLQJDGKHVLYHVZKLFKLPSURYHWKHR[\JHQEDUULHUSURSHUWLHVRIIRRGSDFNDJLQJPDWHULDOVPDGHZLWKYDSRUGHSRVLWLRQ¿OPV7KLVJURXQGEUHDNLQJSURGXFWFRPSHQVDWHVIRUVFUDWFKHVDQGFUDFNVLQWKHYDSRUGHSRVLWHGOD\HUVWRZKLFKLWLVDSSOLHGHQKDQFLQJVXFKOD\HUV¶LQKHUHQWR[\JHQEDUULHUSURSHUWLHVWRDFKLHYHDSHUIRUPDQFHOHYHOFORVHWRWKDWRIDOXPLQXPIRLOWKHUHE\KHOSLQJWRUHGXFHIRRGORVVDQGVLPSOLI\SDFNDJLQJ,QDGGLWLRQDOWKRXJK',&¶VQHZGU\ODPLQDWLQJDGKHVLYHH[KLELWVH[FHOOHQWKDQGOLQJSURSHUWLHVHTXLYDOHQWWRWKRVHRIFRQYHQWLRQDOSURGXFWVWKHKLJKVROLGGHVLJQPHDQVWKDWLWVHPLVVLRQVRIYRODWLOHRUJDQLFFRPSRXQGV 92&V DUHORZHUWKDQWKRVHRIH[LVWLQJ',&adhesives. As well as complying with codes and standards for packaging based on Article 18 of Japan’s Food Sanitation Act (Ministry of Health, Labour and:HOIDUH2UGLQDQFH1R WKHSURGXFWKDVPHWWKH86)RRGDQG'UXJ$GPLQLVWUDWLRQ )'$ ¶VUHJXODWLRQIRUDGKHVLYHVXVHGLQIRRGSDFNDJLQJPASLIM VM reinforces oxygen-barrier propertiesp
Oxygen (gas)Oxygen (gas)Oxygen
O
(gas)
( )

O
(gas)
( )
Existing products Oxygen

No adhesive layer

Adhesive layer（ Existing adhesive）

Vapor-deposited layer

Vapor-deposited layer

O
Oxygen(gas)((gaas))PASLIM VM

OOxygen(gas)( )Adhesive layer ( PASLIM VM )Defectct

DefectDe

Vapor-deposited layer

Film

Film

Film

Vapor deposition films that have no adhesive layer
and are free of defects arising from pinholes, creases
and scrapes, which occur during manufacturing,allow gases to pass through.

Coating with an existing adhesive is comparatively
effective in preventing gas leakage, but defects allow
gases to seep out.

Coating with PASLIM VM essentially eliminates gas
leakage and, because it compensates for defects,
prevents them from allowing gases to seep out.

DIC Report 2018 ̲14

Fine Chemicals

Optronics Materials andOther High-Value-Added
3URGXFWV
President, Fine Chemicals Segment Kazuo Hatakenaka

3URGXFWV LQ WKLV VHJPHQW
include a wide variety ofmaterials indispensable todigital devices, includingorganic pigments for color
filters and LC materials,
ZKLFKDUHH[SHFWHGWRGULYH
growth for DIC in the years
ahead.

Key
Products

Pigments Product Division

Liquid Crystal Materials Product Division

Organic pigments; special effect pigments;
PHWDOFDUER[\ODWHVVXOSKXUFKHPLFDOV OXEULFDQWDGGLWLYHV

7KLQ¿OPWUDQVLVWRU 7)7/& PDWHULDOV6XSHUWZLVWHG
nematic (STN) LCs

A marked increase inbrightness and reduced LCD
energy consumption

Responding to the evolutionof LCDs
TFT LC materials

G58 series*UHHQSLJPHQWVIRUFRORUÀOWHUVThe production of TFT LCs demands
DGYDQFHGWHFKQRORJLFDOH[SHUWLVH',&LV
one of only a few companies in the world
ZLWK VXFK H[SHUWLVH ',&¶V WHFKQRORJLHV
ensure it is able to provide products that
respond to demands for faster response
times and greater long-term reliability.

In developing the G58 series of green pigments, DIC
GH¿HGFRQYHQWLRQDOZLVGRPE\XVLQJ]LQFUDWKHUWKDQ
copper, as the central metal, which achieves a marked
increase in brightness and reduces energy consumed
by the liquid crystal display (LCD).

| Segment Operating Results
Net Sales(Billions of yen)

For more information, please see Segment Results on page 53.

FY2016FY2017FY2018 (Forecast)

128.2

135.4

3,793
132.5

Operating Income
and Operating
MarginFY2016(Billions of yen / %)

107.0

107.7

41.3

43.7

40.0

(15.3)(14.3)
Japan

15̲ DIC Report 2018

Overseas

FY2018 (Forecast)

17.4

17.0

14.4
12.8％

11.3％

101.1

FY2017

12.8％

7.1

9.2

8.7

7.5

8.3

8.3

(15.3)
Eliminations

Japan

Overseas

Operating margin

| Business Strategies Under DIC108
The DIC Group is powering growth in this segment by increasing value added.
7RWKLVHQGWKH*URXSLVFDSLWDOL]LQJRQLWVFRQWLQXRXVSURGXFWGHYHORSPHQWDQG
VROLGVXSSO\FRQ¿JXUDWLRQWREROVWHULWVVKDUHRIWKHPDUNHWVIRUWKHVHJPHQW¶V
two key strategic products: functional pigments and TFT LCs.

Pigments:LWKWKHPDUNHWIRURUJDQLFSLJPHQWVIRUSXEOLVKLQJLQNV²WKHSULQFLSDOVRXUFH
of demand for these products—shrinking, the DIC Group is working to increase
sales of functional pigments for niche and high-growth applications, including
SLJPHQWVIRUFRORU¿OWHUVSLJPHQWVIRUFRVPHWLFVDQGVSHFLDOHIIHFWSLJPHQWV,Q
WKHDUHDRISLJPHQWVIRUFRORU¿OWHUVWKH*URXSZLOOEURDGHQLWVOLQHXSRISURGXFWVthat help improve color and functions. The Group is also striving to augment its
recently acquired special effect pigments business in Europe by bolstering salesof high-value-added products and reinforcing its production capacity for pigments
XVHGLQEXLOGLQJPDWHULDOV7RH[SDQGLWVSLJPHQWVIRUFRVPHWLFVEXVLQHVVWKH
Group has broadened its focus to include pigments for skincare products andis taking steps to increase its production and sales of red pigments, demand forwhich continues to rise, as well as to boost sales in Japan.

LCs:LWKDQHPSKDVLVRQQW\SH7)7/&VWKHSULQFLSDOW\SHRI/&VXVHGLQODUJH
scale displays in LCD televisions and other devices and is actively bringing
new products to market, the DIC Group is actively allocating resources to the
GHYHORSPHQWRIQHZSURGXFWV7KH*URXSLVDOVRPD[LPL]LQJLWVWHFKQLFDODQG
SURGXFWLRQEDVHLQ4LQJGDRWRDXJPHQWLWVRSHUDWLRQVLQWKH3HRSOH V5HSXOLF
RI&KLQD 35& ZKLFKLVH[SHFWHGWREHDPDMRUFHQWHURI/&'PDQXIDFWXULQJ
going forward.

TFT LCs used in LCD televisions| Progress of Major Initiatives in Fiscal Year 2017
Pigments
Owing to the strengthening of laws and regulations pertaining to color
materials for cosmetics, demand for the DIC Group’s pigments forcosmetics—which comply with laws enforced by the U.S. FDA andits counterparts in other countries—grew rapidly, particularly in AsianPDUNHWV'HPDQGIRUVSHFLDOHIIHFWSLJPHQWVFRQWLQXHGWRH[SDQG
steadily in Eastern Europe, the Middle East and Asia, underpinned by
the Group’s technologies for controlling density, compression strength
DQGWKHUPRFRQGXFWLYLW\ZKLFKDUHH[SHFWHGWRVXSSRUWVXVWDLQDEOH
growth for this business in the years ahead.

WUDQVPLVVLYLW\WKHQHZ136/&VIDFLOLWDWHWKHGHVLJQRIQHZ/&'VWKDW
respond to advanced performance requirements. The launch of this andRWKHUKLJKSHUIRUPDQFHSURGXFWVLVH[SHFWHGWREROVWHUVDOHVRI/&V

LCs)LVFDO\HDUEURXJKWWKHGHYHORSPHQWRIJURXQGEUHDNLQJQDQRSKDVHVHSDUDWHG 136 /&VWKDWERRVW/&'UHVSRQVHVSHHGZKLFKLVFULWLFDOWR
picture quality for sports and other content involving high-speed action.
Because they allow control of response speed, applied voltage and

6XQ&KHPLFDO3LJPHQWVIRU&RVPHWLFV5HFHLYH$SSURYDO8QGHUEurope’s COSMOS Standard for Natural and Organic Cosmetics

HIGHLIGHT

Sun Chemical’s SunPURO ®2[LGHV(&2&(57 FHUWL¿HGVHULHVRIRUJDQLFSLJPHQWVIRU
FRVPHWLFVUHFHQWO\UHFHLYHGDSSURYDOXQGHU(XURSH¶VXQL¿HG&26026 &260HWLF2UJDQLF
Standard) for natural and organic cosmetics. A premium line of pigments for cosmetics,
SunPURO ®SLJPHQWVERDVWDQH[WUHPHO\ORZKHDY\PHWDO QDWXUDOO\RFFXUULQJLQRUJDQLF
material) content and are used in foundation, base makeup and mascara, among others.
COSMOS approval was earned by the four pigments comprising the SunPURO ®2[LGHV
VHULHV5HGLURQR[LGH\HOORZLURQR[LGHWLWDQLXPGLR[LGH ZKLWH DQGEODFNLURQR[LGH&26026ZDVGHYHORSHGE\DQLQGHSHQGHQWQRQJRYHUQPHQWDORUJDQL]DWLRQHVWDEOLVKHG
LQE\ILYHRUJDQL]DWLRQVLQFOXGLQJ(&2&(57EDVHGLQIRXU(XURSHDQFRXQWULHV)UDQFH*HUPDQ\,WDO\DQGWKH8QLWHG.LQJGRP ZLWKWKHDLPRIFUHDWLQJDXQL¿HGJOREDO
standard. Owing to the lack of a standard for natural cosmetics at the time, COSMOS wasODWHUDGRSWHGDVDXQL¿HGVWDQGDUGIRU(XURSH&26026LVFXUUHQWO\DWWUDFWLQJDWWHQWLRQDV
a promising candidate to become a single global standard.
 (&2&(57 LV DQ LQGHSHQGHQW RUJDQLF FHUWLILFDWLRQ RUJDQL]DWLRQ WKDW SURYLGHV
assessment and cer tif ication for compliance with European standards fordesignating products “organic.”

Attestation of conformity with COSMOSDIC Report 2018 ̲16

Polymers

DIC’s Second Core
Business
President, Polymers Segment Toshio Hasumi&DSLWDOL]LQJRQ',&¶VZRUOG
class technologies andknow-how, this segmentprovides synthetic resins andresin-related products to awide array of industries.

Polymers Product Division

Key
Products:DWHUERUQHUHVLQVXOWUDYLROHW 89 FXUDEOHUHVLQVDFU\OLFUHVLQVPHWKDFU\ODWHUHVLQVHSR[\UHVLQVSKHQROLFUHVLQVÀXRURFKHPLFDOVSRO\XUHWKDQHUHVLQVSRO\HVWHUUHVLQVSODVWLFL]HUVXQVDWXUDWHGSRO\HVWHUUHVLQVSRO\VW\UHQHDON\OSKHQROV

Environment-friendly nextgeneration adhesives that
respond to diverse needs

Technologies that facilitate the controlof light for applications ranging fromGLVSOD\FDVHVWRRSWLFDO¿EHUV

TYFORCE series(Moisture-curing hot melt adhesives)

DEFENSA OP series(Low-refractive index UV-curable resins)

This series of solvent-free adhesives delivers
superb production efficiency and bonding strength.
These resins have been adopted for a wide range ofapplications, including building materials, apparel andelectronic components.

Used for optical fiber cladding and opticalcoatings, the DEFENSA OP series of lowUHIUDFWLYH LQGH[ 89 FXUDEOH UHVLQV KHOSV
improve the performance of optical fibers andthe brightness of display cases.

| Segment Operating Results
FY2016Net Sales

FY2017(Billions of yen)
50.1

FY2018 (Forecast)

3,793

204.3

197.9

180.9

63.4

57.9

136.4

147.0

147.4

(5.6)

(6.9)

(6.6)

Japan

17̲ DIC Report 2018

Overseas

Eliminations

For more information, please see Segment Results on page 53.

Operating Income
and Operating
MarginFY2016(Billions of yen/ %)FY2018 (Forecast)

FY2017

19.6

20.1

19.6
5.4

6.1

10.9％
9.9％

6.7

12.9

14.3

Japan

Overseas

9.8％

14.0

Operating margin

| Business Strategies Under DIC108
Product strategy
The DIC Group is concentrating management resources on
strategic products, namely, waterborne, UV-curable, acrylic,polyurethane and polyester resins, and accelerating global
development with a focus on promising markets, notably thosefor coatings and adhesives in Asia.

:LWKGHPDQGRQWKHGHFOLQHLQ-DSDQWKH*URXSLVLQWHJUDWLQJ
and closing production lines while at the same time pursuingmarkets for polyurethane and UV-curable resins for niche andhigh-performance applications, thereby lifting the weighting of
high-value-added products in its portfolio.

Regional strategy&DSLWDOL]LQJRQWHFKQLFDOFHQWHUVHVWDEOLVKHGLQ7KDLODQGDQG
WKH 35& WKH *URXS LV UHVSRQGLQJ WR LQFUHDVLQJO\ VWULQJHQW
environmental regulations by offering waterborne, solventfree and other environment-friendly products, as well as byadvancing the development and sale of offerings that respondto needs for general-purpose products and boosting overseas
sales as a percentage of overall segment sales.

Demand for environment-friendly products for use in coatings is increasing overseas| Progress of Major Initiatives in Fiscal Year 2017
Environmental initiatives
In Japan, a new series of polyester resins for use on precoatedmetal was developed and launched. In addition to reducing
emissions of VOCs when forming coatings, this new globalstandard series complies with the world’s most stringent
regulations governing chemical substances. Overseas, apolymers subsidiary in Thailand installed and began using solar
panels, thereby reducing its emissions of CO , a move designed
to combat global warming.

Regional trends,Q-DSDQVKLSPHQWVRIKLJKYDOXHDGGHGSURGXFWVURVH:LWK
sales of polystyrene robust against a backdrop of rising demand
for use in packaging for ready-made foods, domestic production
FDSDFLW\ ZDV H[SDQGHG E\ DSSUR[LPDWHO\  ,Q RYHUVHDV
markets, overall shipments of waterborne resins and otherenvironment-friendly products increased.

',&,QFUHDVHV3URGXFWLRQ&DSDFLW\IRU3RO\VW\UHQH8VHGLQ
3DFNDJLQJIRU3UHSDUHG)RRGV%\UHLQIRUFLQJIDFLOLWLHVDQGRSWLPL]LQJSURGXFWLRQSURFHVVHVDIC increased the annual production capacity of the<RNNDLFKL3ODQWORFDWHGLQ<RNNDLFKL0LH3UHIHFWXUHIURPPHWULFWRQQHVWRPHWULFWRQQHV,QDGGLWLRQ
to general-purpose DICSTYRENEZKLFKERDVWVH[FHOOHQWtransparency and impact resistance, and HYBRANCH
hyperbranched polystyrene, a high-performance productthat offers both strength and superb moldability, DIC’s
polystyrene lineup includes RYULEX transparent heatresistant styrene-based resins. Valued for its transparency,
foamability and moldability, polystyrene is odorless, making
LWDSRSXODUFKRLFHIRUXVHLQIRRGWUD\VIRUOXQFKER[HVDQG
SUHSDUHGIRRGVVROGDWIRUH[DPSOHFRQYHQLHQFHVWRUHVDQG
supermarkets. DIC will further strengthen its polystyrene
SURGXFWLRQFRQ¿JXUDWLRQWRHQVXUHVWDEOHVXSSOLHVHIGHLIGHT<RNNDLFKL3ODQW

DIC Report 2018 ̲18

Compounds

New Value Created throughDispersion and Compounding
Technologies
President, Compounds Segment Masanobu Mizukoshi

This segment leverages resinand pigment dispersion andcompounding technologies
accumulated since DIC’s
founding to provide productsthat respond to needs in
WKHH[SDQGLQJJOREDOGLJLWDO
printing, automotive andelectronics markets.

Key
Products

Liquid Compounds Product Division

Solid Compounds Product Division-HWLQNV¿EHUDQGWH[WLOHFRORUDQWVDQGDUWL¿FLDOOHDWKHUFRORUDQWVKLJKSHUIRUPDQFHFRDWLQJVDQGDGKHVLYHPDWHULDOVFRDWLQJVIRURSWLFDO¿OPV

336FRPSRXQGVKLJKSHUIRUPDQFHFRPSRXQGVplastic colorants; high-performance optical materials

Helping customers
realize outstanding color
development and gloss

Contributing to therealization of lighter, more
IXHOHI¿FLHQWYHKLFOHVSunJet series

DIC.PPS series (PPS compounds)

Advanced DIC Group pigment dispersion
WH F K Q R O R J L H V HQVX U H H[F H O O H QW F R O R UGHYHORSPHQW DQG D JORVV\ ILQLVK :LWK D
reputation for reliability, the SunJet seriesof jet inks enjoy popularity in markets
around the world.

7KH',&*URXS¶V336FRPSRXQGVERDVWH[FHOOHQWKHDW
and chemical resistance, rigidity, strength and electricalinsulating properties, as a result of which they have foundapplication in components for hybrid, electric and otherenvironment-friendly vehicles as an alternative to metalmaterials, which helps reduce vehicle weight.

| Segment Operating Results
FY2016Net Sales

FY2017(Billions of yen)

33.3

FY2018 (Forecast)

Operating Income
and Operating
Margin69.5(Billions of yen/ %)

64.7

61.1

FY2016FY2017FY2018 (Forecast)

5.0

5.0

5.0

7.7％

7.2％

8.1％

39.5

2.4

2.5

2.0

2.0

3.1

3.0

35.9

39.2

41.7

43.8

(11.5)(12.9)(13.7)

Japan

19̲ DIC Report 2018

For more information, please see Segment Results on page 53.

Overseas

Eliminations

Japan

Overseas

Operating margin

| Business Strategies Under DIC108
The DIC Group is leveraging its growth-driving basic andcomposite technologies to continuously bring new products thatsatisfy the needs of users to market in the strategically important
DUHDVRIMHWLQNVDQG336FRPSRXQGV7KURXJKVXFKHIIRUWVWKH
*URXSLVVWULYLQJWRUHDOL]HDKLJKHUJURZWKUDWHWKDQWKHPDUNHW

Jet inks
To date, the DIC Group has sought to augment this businessby focusing on high-value-added water-based and UV-curable
jet inks, primarily for industrial and office-related applications.
In addition to boosting sales in these markets, the Group is
H[SDQGLQJHIIRUWVWRPDUNHWSURGXFWVIRUQHZDSSOLFDWLRQVVXFKDVWH[WLOHVDQGFHUDPLFVGHPDQGIRUZKLFKLVH[SHFWHGWRULVHPPS compounds
9DOXHG IRU WKHLU H[FHOOHQW KHDW DQG FKHPLFDO UHVLVWDQFH
336FRPSRXQGVDUHXVHGZLGHO\DVDQDOWHUQDWLYHWRPHWDO
materials in components for automotive engines and electronics
equipment. To maintain its leading share of the global market,
WKH',&*URXSLVSURPRWLQJWKHH[SDQVLRQRISURGXFWLRQIDFLOLWLHVZLWKWKHDLPRIVWDELOL]LQJLWVJOREDOVXSSO\FRQILJXUDWLRQ7KH
Group is also increasing the number of employees in sales andtechnical services for key automobile and automotive component
manufacturers to enhance the accuracy and speed with which
DIC Group products obtain approval from manufacturers.

| Progress of Major Initiatives in Fiscal Year 2017
Jet inks&DSLWDOL]LQJRQLWVFRPSHWLWLYHDGYDQWDJHVWKH',&*URXSWRRNVWHSVto enhance cooperation with printer and printer head manufacturers to
H[SDQGLWVVDOHVFKDQQHOV7KH*URXSDOVRSUHVVHGDKHDGZLWKRQJRLQJ
development efforts with the goal of building new businesses, including
SURGXFWVIRURI¿FHXVHPXOWLIXQFWLRQSULQWHUV 0)3V WH[WLOHVDQGFHUDPLFV

PPS compounds
The reduction of fuel consumption is a principal focus of efforts across theautomobile industry. To this end, manufacturers are stepping up efforts
to use alternatives to metal materials in a bid to lower vehicle weight.
5HÀHFWLQJWKLVWUHQGWKH\HDUVDZVWHDGLO\H[SDQGLQJVKLSPHQWVRI336
FRPSRXQGVIRUXVHLQIXHOHI¿FLHQWYHKLFOHVQRWDEO\K\EULGVLQ-DSDQIn India, the Group responded to voracious demand by adding three newsites to its local sales network. The Group also added people to its sales
IRUFHLQ1RUWK$PHULFDWKHUHE\IRUWLI\LQJLWVORFDOVDOHVFRQ¿JXUDWLRQ
336FRPSRXQGVSURGXFWLRQIDFLOLW\LQWKH35&

6ROLG&RPSRXQG7HFKQLFDO&HQWHU$VLD3DFL¿FLV(VWDEOLVKHG:LWKWKHDLPRIGHYHORSLQJDQGLPSURYLQJSURGXFWVVXLWDEOH
for markets in Southeast and South Asia, and to strengthen
LWV WHFKQLFDO VHUYLFH VWUXFWXUH LQ WKH 336 FRPSRXQGV DQGresin colorants businesses, DIC established the Solid&RPSRXQG7HFKQLFDO&HQWHU$VLD3DFLILFRQWKHSUHPLVHVRIDIC Compounds (Malaysia) Sdn. Bhd. In addition, injection
molding machines and equipment for use in evaluating material
properties that are compatible with engineering plastics were
installed, thereby creating a system that can respond in a timely
PDQQHUWRWKHQHHGVRIUHJLRQDOFXVWRPHUV,QDGGLWLRQWR336
FRPSRXQGVSURGXFWLRQIDFLOLWLHVLQ-DSDQWKH35&$XVWUDOLD
and Malaysia, the DIC Group now has technical centers in-DSDQ WKH 35& DQG (XURSH 7KH QHZ IDFLOLW\ LQ 0DOD\VLD
further strengthens the Group’s integrated global product
GHYHORSPHQWLPSURYHPHQWDQGWHFKQLFDOVHUYLFHFRQ¿JXUDWLRQHIGHLIGHT

6ROLG&RPSRXQG7HFKQLFDO&HQWHU$VLD3DFL¿FDIC Report 2018 ̲20

Application Materials$9DULHW\RI3URGXFWV0DGH
3RVVLEOHE\WKH,QWHJUDWLRQDQG
Application of DIC Technologies
President, Application Materials Segment Shinsuke Toshima

This segment encompasses adiverse range of products, including
industrial adhesive tapes, hollow¿EHUPHPEUDQHVDQGPRGXOHVDQG
FRH[WUXGHGPXOWLOD\HUILOPVZKLFKare made possible through the
integration of proprietary materials
and coating, printing, molding andother technologies.

Application Materials Product Division

Key
Products,QGXVWULDODGKHVLYHWDSHVPDJQHWLFWDSHVDQGFRDWHGVKHHWVKROORZ¿EHUPHPEUDQHVDQGPRGXOHVFRH[WUXGHGPXOWLOD\HU¿OPVKHDOWKIRRGVDQGQDWXUDOFRORUDQWVGHFRUDWLYHERDUGVLQWHULRUKRXVLQJSURGXFWVDQGFRDWLQJVIRUEXLOGLQJPDWHULDOVGHFRUDWLYHVKHHWVDQGGHFRUDWLYH¿OPVprocessed sheet molding compounds (SMCs), bulk molding compounds (BMCs) and other products; molded plastic products

Enhancing waterproof
smartphone construction

A superfood that provides abalanced wealth of nutrients

DAITAC WS#84 series(Double-sided adhesive tapes for waterproof
mobile communications devices)

DIC Spirulina
Spirulina is an edible blue–green algae rich invitamins, minerals and ß-Carotene that boasts an
H[FHOOHQWDPLQRDFLGEDODQFH6SLUXOLQD¶VQXWULWLRQDO
value and popularity as an ingredient not only in healthfoods but also for culinary applications has earned it areputation as a superfood.

One of the first series of waterproof tapes to be
developed and marketed for waterproof smartphone
construction, the DAITAC WS#84 series continues tosupport efforts to enhance the ability of smartphones
to resist water ingress.

| Segment Operating Results
Net Sales(Billions of yen)

For more information, please see Segment Results on page 53.

FY2016FY2017FY2018 (Forecast)

Operating Income
and Operating
Margin

55.7

56.1

58.4

(Billions of yen/ %)

55.3

53.0

52.7

FY2018 (Forecast)

FY2017

3.6
0.4

2.6

11.3

10.8

9.9

FY2016

1.9

0.3

3.4％

2.3

0.3
4.6％

3.2

1.6

(6.9)
Japan

21̲ DIC Report 2018

(8.2)

(7.7)
Overseas

Eliminations

Japan

Overseas55
6.1％

Operating margin

| Business Strategies Under DIC108
Having devised a new growth model, the DIC Group is stepping up the
H[SDQVLRQRILWVHOHFWURQLFVDQGOLIHVFLHQFHVEXVLQHVV$WWKHVDPH
WLPHWKH*URXSLVSURPRWLQJGHFLVLYHUDWLRQDOL]DWLRQRILWVKRXVLQJ
products business.

Electronics and life sciences
In industrial adhesive tapes, the DIC Group is accelerating specin initiatives with global brand owners, as well as with nascent
ORFDOEUDQGRZQHUVLQWKH35&ZLWKWKHJRDORIEROVWHULQJDGRSWLRQ
for use in smartphones and tablets. The Group is also promoting
development efforts with a view to entering the market for vehiclemounted displays in the future. In hollow-fiber membranes andmodules, the Group is working to sustain high growth for degassing
modules used in inkjet printers, for which it holds the leading global
market share, and to make a full-scale entry into the market for large

degassing modules for water treatment applications. The Group’s
aims in the area of health foods are to maintain high sales of
6SLUXOLQDDKLJKO\UDWHGVXSHUIRRGDQGWRH[SDQGVDOHVRI6SLUXOLQD
derived natural blue food coloring Linablue® in North America andEurope, taking advantage of a shift in market preferences fromsynthetic to natural food colorings.

Housing products
In the area of unsaturated polyester resin molded products, the DIC*URXSFRQWLQXHVZRUNLQJWRLPSURYHSUR¿WDELOLW\WKURXJKUHVWUXFWXULQJ
measures and decisive cost reductions. In laminated products, theGroup is revamping its business model for DIC200, a key strategic
building material, and implementing dramatic structural reforms. The
Group is also working to enhance the accuracy and accelerate the
SURFHVVRIJDLQLQJFHUWL¿FDWLRQIRUVHJPHQWSURGXFWV| Progress of Major Initiatives in Fiscal Year 2017
Electronics and life sciences
Shipments of industrial adhesive tapes increased, led by products for
DXWRPRELOHVDQGVPDUWSKRQHV,QWKHDUHDRIKROORZ¿EHUPHPEUDQHV
and modules, the DIC Group augmented its lineup of products forthe degassing of jet inks and the production of ultrapure water for
use in semiconductor fabrication processes, by introducing a new
GHFDUERQL]LQJPRGXOHDQGLQDQWLFLSDWLRQRIKHDOWK\GHPDQGLQWURGXFHG
a new model with a high flow rate. In health foods, the DIC GroupH[SDQGHGLWVSURGXFWLRQFDSDFLW\IRULWVQDWXUDOEOXHIRRGFRORULQJ

Housing products
Newly developed products included a sheet-form passive heat storage
material that effectively harnesses solar heat to maintain comfortable room
WHPSHUDWXUHV&UHDWHGE\GLVSHUVLQJDSKDVHFKDQJHPDWHULDO 3&0 
in resin, this innovative material can be processed at construction sites,
something not possible with conventional materials, for easy use in housing
construction. Because it can also be used as a cold storage material,
the DIC Group is also marketing it for use in the constant-temperaturetransportation of pharmaceuticals, as well as for horticultural applications.

+ROORZ¿EHUPHPEUDQHPRGXOHIRUGHJDVVLQJDQGDHUDWLQJOLTXLGV',&%XLOGV1HZ3URGXFWLRQ)DFLOLW\IRU+ROORZ)LEHU0HPEUDQH
Modules Used for Degasifying Jet InksHIGHLIGHT

DIC built a new plant for manufacturing small hollow-fiber
membrane modules for degassing and aerating liquids in
the SEPAREL® series, which are used in the degassingof inks for industrial inkjet printers, on the site of its Chiba
3ODQW ',& ZKLFK HQWHUHG WKH KROORZILEHU PHPEUDQH
business in 1989, manufactures proprietary membranes
FRPSULVLQJ ± μm-diameter hollow fibers and a
nonporous surface skin layer with a thickness of 1 μm.
+DLOHGIRUVLJQL¿FDQWO\UHGXFLQJWKHQHJDWLYHFRQVHTXHQFHVRIGHJDVL¿FDWLRQWKHVHSURGXFWVFXUUHQWO\FRPPDQGD
share of the global market for membrane modules used
in inkjet printers. Going forward, the Company will work tofurther grow its leading global market share.
New production facility

DIC Report 2018 ̲22

Fiscal Year 2017 DIC Group Topics

Strategies for Sustainable Growth: Progress Report

TOPIC

1

1

',&KDVLQFOXGHGDVSHFL¿FTXDQWLWDWLYHWDUJHWRI¥ELOOLRQIRUVWUDWHJLFLQYHVWPHQWVLQFOXGLQJLQPHUJHUVDQGDFTXLVLWLRQV 0 $V RYHUWKH
WKUHH\HDUVRILWVFXUUHQWPHGLXPWHUPPDQDJHPHQWSODQ',&,Q¿VFDO\HDUWKH&RPSDQ\PDGHDQXPEHURILQYHVWPHQWVZLWKWKHDLP
RIPDNLQJXVHRIH[WHUQDOUHVRXUFHVLQDPDQQHUWKDWDOLJQVZLWKWKHIXQGDPHQWDOJRDOVRI',&ZKLFKDUHWRVWDELOL]HWKHHDUQLQJVRILWVFRUH
EXVLQHVVHVH[SDQGEXVLQHVVHVWKDWZLOOGULYHJURZWKDQGFUHDWHQH[WJHQHUDWLRQEXVLQHVVHVCapital and Business Alliance with Taiyo Holdings and Other Strategic Investments

On January 25, 2017, DIC announced a capital and business alliance with Taiyo Holdings, as a result of which Taiyo Holdings became an equity-method
affiliate of DIC. Total investment by DIC, which amounted to ¥24.9 billion, was subsequently completed. The alliance brings together the DIC Group’smaterials development capabilities, which draw on its core technologies, and Taiyo Holdings’ extensive supply chain, which encompasses solder resist and3:%VWRSURPRWHWKHVZLIWDQGHI¿FLHQWGHYHORSPHQWRIPROGHGLQWHUFRQQHFWGHYLFHV 0,'V DQGRWKHUQH[WJHQHUDWLRQPDWHULDOV,Q6HSWHPEHU',&
signed a global, multiyear cooperative agreement with Fermentalg of France, a leader in the production of algae for nutrition and health applications. ThisSDUWQHUVKLSZLOOEULQJWRJHWKHU)HUPHQWDOJ¶VXQLTXHPLFURDOJDHVWUDLQEDQNDQGLQWHJUDWHGELRWHFKQRORJ\SODWIRUPZLWK',&¶VVLJQL¿FDQWDSSOLHGUHVHDUFKmass production capabilities and global sales network.
Group company Sun Chemical, operations of which are centered in North America and Europe, also continued to promote key strategic investments aimed
DWUHLQIRUFLQJLWVVDOHVFRQ¿JXUDWLRQLQKLJKJURZWKPDUNHWVDQGUHJLRQV,Q-XO\6XQ&KHPLFDODFTXLUHG-RXOHV$QJVWURP893ULQWLQJ,QNV&RUSDVSHFLDOL]HGPDQXIDFWXUHURI89FXUDEOHSULQWLQJLQNVZKLOHLQ1RYHPEHULWIRUPHGDMRLQWYHQWXUHZLWK$OOLDQFH+ROGLQJV&RPSDQ\/WGFRPELQLQJLWV
SULQWLQJLQNVEXVLQHVVRQWKH$UDELDQ3HQLQVXODZLWKWKHRSHUDWLRQVRI$OOLDQFH+ROGLQJV¶VXEVLGLDU\,QN3URGXFWV&RPSDQ\/WGWKHUHJLRQ¶VWRSSULQWLQJLQNV
manufacturer in terms of market share. Sun Chemical’s stake in the new company is 51%.

Switzerland

Canada● Venture capital

investment● Acquisition ofJapan● Joint venture

capital investment

Colmar Inks’
flexo inks business(Printing inks)● Joint purchase of sharesin Taiyo Holdings

France● Microalgae-related

business cooperationagreement with
Fermentalg

2

Saudi Arabia● Joint venturewith Alliance
Holdings(Printing inks)

United States● Acquisition of Joules

Angstrom U.V. Printing Inks

(UV-curable printing inks)

Collaboration with U.S. Firm Nanosys to Develop Inks for Inkjet-Printed QDCFs',&LVFXUUHQWO\ZRUNLQJZLWK1DQRV\V,QFRIWKH8QLWHG6WDWHVWRGHYHORSLQNVIRUXVHLQWKHSURGXFWLRQRILQNMHWSULQWHGTXDQWXPGRWFRORU¿OWHUV 4'&)V 
4XDQWXPGRWV 4'V DUHOLJKWHPLWWLQJLQRUJDQLFVHPLFRQGXFWRUQDQRSDUWLFOHV%HFDXVHWKHFRORUHPLWWHGFDQEHFRQWUROOHGIUHHO\E\FKDQJLQJGRWVL]H4'V
are garnering considerable attention as materials for next-generation displays.
5HDOL]LQJPDVVFRPPHUFLDOL]DWLRQIRU4'&)VSUHVHQWVWZRNH\FKDOOHQJHV7KHILUVWLVWKDWIDEULFDWLRQFRVWVIRU4'VDUHKLJKFRQVWLWXWLQJDPDMRUKXUGOHWRJURZWKLQGHPDQGDQGPDNLQJLWLPSHUDWLYHIRU4'&)PDQXIDFWXUHUVWRPLQLPL]HSURGXFWLRQORVVHV7KHXVHRILQNMHWSULQWLQJWRSODFH
4'VLVVHHQDVDQLGHDOVROXWLRQWKDWZLOOPDNHWKHORZFRVWSURGXFWLRQRI4'&)VDUHDOLW\4'&)V
IDFLOLWDWHWKHPDQXIDFWXUHRI/&'VDQGRUJDQLFHOHFWUROXPLQHVFHQFHGLVSOD\VWKDWDUHPRUHSRZHUHI¿FLHQWDQGGHOLYHUDZLGHUFRORUJDPXWDQGYLHZLQJDQJOHWKDQH[LVWLQJXQLWVXQGHUSLQQLQJKRSHV&ROORLGDO4'GLVSHUVLRQVLUUDGLDWHGZLWKD89OLJKW
for their use in next-generation displays going forward.

23̲ DIC Report 2018

(PSOR\PHQW3UDFWLFHV%DVHGRQWKH,QFRUSRUDWLRQRI'LYHUVLW\LQWR0DQDJHPHQW

TOPIC

2

7KH',&*URXSDFWLYHO\SXUVXHVGLYHUVLW\E\HPSOR\LQJDEURDGVSHFWUXPRILQGLYLGXDOVZLWKRXWUHJDUGWRFRQVLGHUDWLRQVVXFKDVJHQGHUQDWLRQDOLW\SK\VLFDOOLPLWDWLRQRUDJH7KH*URXSZRUNVWRIRVWHUDFRUSRUDWHFXOWXUHWKDWHQFRXUDJHVXQGHUVWDQGLQJDQGUHVSHFWIRULQGLYLGXDOGLIIHUHQFHVDQGDFWLYHO\GUDZVRQWKHVHGLIIHUHQFHVWRHQVXUHDQRUJDQL]DWLRQWKDWLVFDSDEOHRIUHVSRQGLQJSURPSWO\WRUDSLGFKDQJHVLQWKHEXVLQHVVHQYLURQPHQWDQGLQFXVWRPHUQHHGVMESSAGE
Diversity at Work: The First Foreign National Appointed
General Manager of a Product Division
With the aim of maximizing its outstanding human resources and deepening human interaction within the DIC Group, in 2018',&DSSRLQWHGDIRUHLJQQDWLRQDOWRWKHSRVLWLRQRISURGXFWGLYLVLRQJHQHUDOPDQDJHUIRUWKHÀUVWWLPHLQLWVKLVWRU\7KUHHRI
WKH&RPSDQ\·VFXUUHQWH[HFXWLYHRIÀFHUVDUHIRUHLJQQDWLRQDOV8QGHULWVQH[WPHGLXPWHUPPDQDJHPHQWSODQ',&ZLOODLPWR
increase this number by 20%–30%, thereby creating a management framework that ensures responsiveness to global needs.

Myron Petruch
General Manager, Pigments Product Division
President, Performance Pigments,
Sun Chemical Corporation,DPKRQRUHGWRKDYHEHHQDSSRLQWHGJHQHUDOPDQDJHURIWKH)LQH&KHPLFDOV%XVLQHVV8QLW¶V3LJPHQWV3URGXFW'LYLVLRQ$W
Sun Chemical, I am currently president of Performance Pigments, but effective from January 1, 2018, I am serving concurrently
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division. I recognize the tremendous responsibilities that come with this appointment and pledge to perform my duties to the very
best of my ability.
0\H[SHULHQFHOHDGLQJVSHFLDOW\FKHPLFDOVEXVLQHVVHVHVSHFLDOO\LQSLJPHQWVOHGPHWRMRLQ6XQ&KHPLFDOLQ6LQFHWKHQ
I have traveled extensively around the world to many DIC and Sun Chemical locations and to many of our global customers to help
reinforce one of our operating foundations, which is that we are one of the top global names and leaders in organic pigments and
VSHFLDOW\HIIHFWSLJPHQWVXVHGLQDEURDGUDQJHRIDSSOLFDWLRQV0\SHUVRQDOPRWWRLV³7KLQNJOREDOO\EXWDFWORFDOO\´$FFRUGLQJO\I will work to maintain both a broad overview to ensure an accurate grasp of global conditions and a narrow focus to ensure athorough understanding of local needs with the goal of further sharpening the DIC Group’s competitive edge.

Expanding Businesses that Will Drive GrowthIn fiscal year 2017, shipments of pigments for color filters, pigments forcosmetics and special effect pigments and other functional pigments were up.
3LJPHQWVIRU&RORU)LOWHUVThe quality expectations of customers for the pigments that determine theperformance of color filters are extraordinarily high. DIC’s green pigments
for color filters satisfy the rigorous standards of manufacturers of nextgeneration high-definition displays, delivering more lifelike colors. As aconsequence, sales of these pigments continue to expand steadily. We are
the world’s largest manufacturer of these filters with a global market shareof approximately 85%. Our share of the global market for blue pigments
for this application also continues to rise, and we are in the process of
expanding our global production capacity to 1.5 times the current level.
3LJPHQWVIRU&RVPHWLFVOwing to the strengthening of laws and regulations pertaining to color materials
for cosmetics, we are seeing rising awareness of health and safety issues andan increasing preference for natural products. Against this backdrop, demand

3LJPHQWVIRUFRORU¿OWHUV

3LJPHQWVIRUFRVPHWLFVfor pigments for cosmetics is growing rapidly, particularly in Asian markets. The',&*URXS¶VSLJPHQWVIRUFRVPHWLFVFRPSO\ZLWKODZVHQIRUFHGE\WKH86
FDA and its counterparts in other countries, as well as with the most rigorous
standards for purity, giving us a key competitive advantage. We continue tocapitalize on our position as the leading global manufacturer of pigments forcosmetics to drive technical innovation.
+LJK3HUIRUPDQFH6SHFLDO(IIHFW3LJPHQWV
Thanks to its lightness, as well as its excellent thermal and acoustic insulating
SURSHUWLHV¿UHUHVLVWDQFHDQGZRUNDELOLW\DXWRFODYHGDHUDWHGFRQFUHWH $$& is a building material that is expected to continue seeing demand growth.
The production of high-performance aluminum pigments for AAC demands
advanced technical capabilities. Aluminum pastes and powders manufactured
E\',&*URXSFRPSDQ\%HQGD/XW]&RUSRUDWLRQDUHXVHGWRHQVXUHWKH
stability of product quality for the world’s top AAC products. By leveraging
its industry-leading technologies to facilitate precise control of density,
compression strength and thermoconductivity, the DIC Group has establisheditself as the leading global manufacturer of these pigments.

+LJKSHUIRUPDQFHVSHFLDOHIIHFWSLJPHQWVDIC Report 2018 ̲24

Special
FeatureProduct Development
Designed to Create
New Value

The DIC Group is leveraging thepower of chemistry to deliver colorand comfort to people’s lives.

Fine Chemicals

85 %Green pigments

Pigments for Color Filters Used in LCDs
and OLED Displays (Functional Pigments)

SDGs Goals 7 and 13

50%
Blue pigments

DIC’s Share of the Global Market forGreen and Blue Pigments for Color Filters

Securing the top share of the global market
IRUSLJPHQWVIRUFRORUÀOWHUVE\RIIHULQJ
products with unrivaled optical properties
Value Creation

Global market-leading pigments that deliver outstanding brightness and picture quality

Color images on LCDs used in televisions, computers and smartphones
are produced using the three primary colors of light—red (R), green (G)and blue (B). These colors are created using pigments. LCDs produce
images by transmitting light emitted from a backlight lamp through a color¿OWHUWRZKLFKDQ5*%SDWWHUQKDVEHHQDSSOLHG$VDFRQVHTXHQFHWKH
SLJPHQWVXVHGLQWKHFRORU¿OWHUDUHFUXFLDOWRSLFWXUHTXDOLW\With Japan’s shift to digital terrestrial television driving up demand forÀDWSDQHO/&'WHOHYLVLRQVDQGWKHSRSXODULW\RIVPDUWSKRQHVLQFUHDVLQJ
in 2007 DIC launched the G58VHULHVRIJUHHQSLJPHQWVZKLFKDFKLHYHG
a remarkable increase in brightness. The series includes FASTOGEN
GREEN A350, a green pigment characterized by outstanding brightness
DQGFRQWUDVWWKDWHQVXUHVH[FHOOHQWSLFWXUHTXDOLW\HYHQZLWKOLWWOHOLJKWIURPWKHEDFNOLJKW,Q¿VFDO\HDU',&GHYHORSHGWKHG59 series of
JUHHQSLJPHQWVIRUZLGHFRORUJDPXWFRORU¿OWHUVZKLFKGHOLYHUVXSHULRUEULJKWQHVVDQGFRORUUHSURGXFWLRQPDNLQJWKHPVXLWDEOHIRUXVHLQ¿OWHUVIRUQH[WJHQHUDWLRQKLJKGH¿QLWLRQGLVSOD\VLQFOXGLQJWKRVHIRUXOWUDKLJKGH¿QLWLRQ 8+' WHOHYLVLRQV',&FXUUHQWO\HQMR\VDQSOXVVKDUHRIWKHJOREDOPDUNHWIRUJUHHQSLJPHQWVIRUFRORU¿OWHUVPDNLQJLWVSURGXFWVthe de facto standard. DIC also manufactures blue pigments for color
ILOWHUV,QWKH&RPSDQ\GHYHORSHGWKHAVHULHVZKLFKERDVWVDVXSHUEEDODQFHEHWZHHQEULJKWQHVVDQGFRQWUDVW7KHRSWLFDOSURSHUWLHV
of pigments in this series have earned high marks from smartphone25̲ DIC Report 2018

manufacturers and boosted DIC’s share of the global market for blue
SLJPHQWVWRDSSUR[LPDWHO\
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been adopted for use by many display manufacturers for use in color
ILOWHUV,QDGGLWLRQWRLPSURYLQJSLFWXUHTXDOLW\WKHVHSLJPHQWVUHGXFH
HQHUJ\FRQVXPSWLRQDQGE\H[WHQVLRQORZHUHPLVVLRQVRI&22+DYLQJSRVLWLRQHGSLJPHQWVIRUFRORU¿OWHUVDVDEXVLQHVVWKDWLWH[SHFWVWRGULYHJURZWK',&FRQWLQXHVZRUNLQJWRUHLQIRUFHLWVGHYHORSPHQWDQGSURGXFW
supply capabilities.

Compositionof an LCD and
the Role of Pigments

Light emitted from the backlight is modulated by
an LC shutter and colored as it passes through
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DQGV\QWKHWLFUHVLQVWHFKQRORJLHVWRGHYHORSDQH[WHQVLYHUDQJHRIKLJKYDOXHDGGHGSURGXFWV0DQ\RIWKHVHSURGXFWVDUHKHOSLQJWRDGGUHVVFULWLFDOFKDOOHQJHVIDFLQJWKHZRUOGLQFOXGLQJLVVXHVUHODWHGWRWKHHQYLURQPHQWDVZHOODVWRVDIHW\DQGSHDFHRIPLQGIRUSHRSOH
DQGLQVRGRLQJKHOSWRJXLGHXVWRZDUGWKHUHDOL]DWLRQRIDVXVWDLQDEOHJOREDOVRFLHW\WKDWLVULFKZLWKFRORUDQGFRPIRUW

WEB

http://www.dic-global.com/en/csr/special/A
Distinctively
DIC
ならでは
Response

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DQGH[SDQVLRQRIIXQFWLRQDOSLJPHQWVWKDWKDYHEHFRPHWKHGHIDFWRVWDQGDUGZRUOGZLGH',&¿UVWVXFFHHGHGLQGHYHORSLQJRIIVHWSULQWLQJLQNVLQKRXVHLQDQG\HDUVODWHUEHJDQSURGXFWLRQRIRUJDQLFSLJPHQWVIRULWVRZQXVH2YHUVXEVHTXHQW\HDUV
WKH&RPSDQ\DPDVVHGGHYHORSPHQWDQGGHVLJQFDSDELOLWLHVDVZHOODVSURGXFWLRQWHFKQRORJLHVFUXFLDOWRWKHPDQXIDFWXUHRI¿QHFKHPLFDOVDQGLQFRPPHUFLDOL]HGUHYROXWLRQDU\KLJKSHUIRUPDQFHORQJODVWLQJQHPDWLF/&VZKLFKZHUHDGRSWHGE\
6KDUS&RUSRUDWLRQIRUXVHLQWKHZRUOG¶V¿UVWSRFNHWFDOFXODWRULQFRUSRUDWLQJDQ/&'',&¶VSDVVLRQDQGGHYHORSPHQWSURZHVVDUHDOVRHYLGHQWLQLWVSLJPHQWVIRUFRORU¿OWHUV/DUJHVFUHHQ/&'WHOHYLVLRQVDUHH[SHFWHGWRGHOLYHUVXSHUEO\UHDOLVWLFDQGDFFXUDWH
color reproduction. The small LCDs used in smartphones and other devices must be
FOHDUHDV\WRUHDGDQGEULJKWHQRXJKWRHQVXUHOHJLELOLW\HYHQZLWKOHVVOLJKW7KLVLV
EHFDXVHUHGXFHGOLJKWUHTXLUHPHQWVUHVXOWVLQORQJHUEDWWHU\OLIH,QFUHDVLQJEULJKWQHVVUHTXLUHVPDNLQJFRORU¿OWHUVWKLQQHUDQGPRUHWUDQVSDUHQWEXWWKLVDORQHZLOOQRWGHOLYHUYLYLGFRORUVDQGUHVROXWLRQ:LWKWKHTXHVWLRQRIKRZEHVWWRUHDOL]HERWKKLJKEULJKWQHVVand vivid colors an ongoing challenge for display manufacturers, DIC has responded bydeveloping innovative pigments for this application.
Copper has traditionally been the central material used in green pigments. In
GHYHORSLQJLWVJUHHQSLJPHQWVIRUFRORUILOWHUV',&GHILHGFRQYHQWLRQDOZLVGRPE\
3LFWXUHTXDOLW\LVLQÀXHQFHGVLJQL¿FDQWO\E\WKHEULJKWQHVVDQG
H[SORULQJWKHXVHRIDGLIIHUHQWFHQWUDOPDWHULDOZLWKWKHJRDORIIXUWKHUHQKDQFLQJFRQWUDVWRIWKHSLJPHQWXVHGLQWKHFRORU¿OWHU$ERYH+LJKEULJKWQHVVDQGKLJKFRQWUDVW%HORZ/RZ
performance characteristics. Through a process of trial and error, the Company
EULJKWQHVVDQGORZFRQWUDVWQDUURZHGGRZQWKHOLVWRIVXLWDEOHPDWHULDOVIURPDZLGHUDQJHRIFDQGLGDWHVHYHQWXDOO\choosing zinc. DIC also significantly improved transparency by reducing the size of pigment particles, thereby achieving a dramatic increase
LQFRQWUDVWZKLFKHQVXUHVDEULJKWFOHDUSLFWXUHTXDOLW\HYHQZLWKOHVVOLJKW7KHRXWFRPHRIWKHVHHIIRUWVZDVWKHJURXQGEUHDNLQJG58 series.
,QWKHDUHDRIEOXHSLJPHQWVIRUFRORU¿OWHUV',&DOVROHYHUDJHGLWVVXSHULRUPROHFXODUGHVLJQFDSDELOLWLHVWRDFKLHYHRXWVWDQGLQJWLQWLQJVWUHQJWK
and precise particle size control. To develop the AVHULHVRIEOXHSLJPHQWVIRUFRORU¿OWHUVWKH&RPSDQ\DOVRHPSOR\HGVSHFLDOW\SDUWLFOHVXUIDFH
SURFHVVLQJWRHQVXUHKLJKO\VWDEOHGLVSHUVLRQUHDOL]LQJDQH[FHOOHQWEDODQFHEHWZHHQEULJKWQHVVDQGFRQWUDVW3URGXFWVLQWKHA series products
currently dominate the market for blue pigments for color filters, delivering excellent optical properties that continue to earn solid marks fromsmartphone manufacturers.
DIC’s success in developing a steady stream of pioneering functional pigments is supported by the seamless integration of basic technologies
DPDVVHGLQYDULRXVILHOGVDVDPDQXIDFWXUHURIFRORUPDWHULDOVWKHFURVVEXVLQHVV5 'FRQILJXUDWLRQRILWV&HQWUDO5HVHDUFK/DERUDWRULHVDQG
SURGXFWLRQWHFKQRORJLHVWKDWIDFLOLWDWHWKHPDVVSURGXFWLRQRISURGXFWVZLWKSHUIRUPDQFHFKDUDFWHULVWLFVUHDOL]HGLQWKHODERUDWRU\Key People from DIC

We are making full use of the DIC Group’s global network at all stages, from thepromotion of product strategies through to the expansion of sales channels.
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of pigments, pigment dispersions, resist inks, color filters and LCDs. In developing pigments for color filters,
ZHJDWKHULQIRUPDWLRQRQWKHODWHVWWUHQGVIURP/&'PDQXIDFWXUHUVZKLFKZHDSSO\WRWKHIRUPXODWLRQRIQH[W
generation product strategies.
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52. DV1RLQWHUPVRIYROXPHSURGXFHG:HDUHPDNLQJIXOOXVHRIWKH',&*URXS¶VJOREDOQHWZRUNE\ZRUNLQJFORVHO\ZLWKORFDO*URXSFRPSDQLHVWREROVWHUWKHDGRSWLRQRI',&SLJPHQWVIRUFRORU¿OWHUVIRUXVHLQ/&'V
Fine Synthesis Technical Group 5, Fine Synthesis Technical Division 1, Central Research Laboratories

Keisuke Sakamoto (left)

Manager, Pigments Sales Group 2, Pigments Product Division

Naoto Akiyama (right)

DIC Report 2018 ̲26

Polymers

Adhesive Primers for Opticaland Packaging Films

Outstanding adhesion improves
the reliability of LCDs and thesafety of food products
Value Creation

SDGs Goals 9 and 12

DIC’s HYDRAN resin adhesive
SULPHUVIRU¿OPV

Ultrathin (less than 1/10,000 millimeter) waterborne polyurethane resin adhesive primers

DIC’s ultrathin high-performance films are used extensively for opticalapplications, including LCDs for televisions, computers and smartphones, andfood product packaging applications, such as retortable pouches and snack food
SDFNHWV:KLOHVXFK¿OPVDSSHDUWREHDVLQJOHOD\HUWKH\DFWXDOO\FRPSULVH
multiple layers that are laminated together. The multilayer structure makes
it possible to impart critical performance features, including transparency,
HOHFWURFRQGXFWLYLW\DQWLUHÀHFWLYLW\DQGEULJKWQHVVLQWKHFDVHRI¿OPVIRURSWLFDO
applications and heat resistance as well as oxygen-barrier properties and
PRLVWXUHUHVLVWDQFHLQWKHFDVHRI¿OPVIRUIRRGSDFNDJLQJDSSOLFDWLRQV

Film layers are generally laminated using adhesives. However, in situations
where the surface attributes of polyethylene terephthalate (PET) film
discourage adhesion, an adhesive primer (aqueous polyurethane surface
PRGL¿HUDOVRFDOOHGDQDQFKRUFRDWRUDQDGKHVLRQSURPRWHU LVDSSOLHGSULRU
to the laminating adhesive. While less than 0.1 micron (1/10,000 millimeter)
thick, DIC's new primers ensure a powerful bond between the PET film
substrate and coating layer, thereby playing a key role in enhancing the
SURSHUWLHVRIKLJKSHUIRUPDQFH¿OPV

DIC’s popular HYDRAN resins: Reliable, easy-to-use and environment-friendly
Polyurethane resins are copolymers that boast excellent adhesion to a variety
of substrates. Polymer design can be leveraged to impart various desired
characteristics, facilitating a broad range of applications, including bonding¿EHUV¿OPVDQGPHWDOV:DWHUERUQHSRO\XUHWKDQHUHVLQVLQSDUWLFXODUGHOLYHU
outstanding adhesion, while cross-linking agents can be used to enhancestrength, adhesion and resistance to water, heat and moisture.
DIC has more than 40 years of experience as a manufacturer of polyurethane
resins. One of its best-known products is the HYDRAN series of waterborne
adhesive polyurethane resins, which are rated highly for increasing theadhesion, transparency, abrasion resistance and durability of substrate andcoating materials, and for enhancing the workability—including superb surface
slip, windability and blocking resistance*1—of HYDRANFRDWHG¿OPV
Because they are solvent-free, HYDRAN resins also eliminate concerns
regarding emissions of VOCs, making it an ideal choice from the perspectivesof reducing the negative environmental impact of food packaging and protecting
the safety and health of production workers. In addition, in the production ofaluminum food trays, the use of aluminum vapor deposition*2 on HYDRANFRDWHG3(7¿OPXVHVVLJQL¿FDQWO\OHVVHQHUJ\WKDQWKHFRQYHQWLRQDOSURFHVVZKLFKLQYROYHVODPLQDWLQJWRJHWKHUOD\HUVRI3(7¿OPDQGDOXPLQXPIRLOZLWKDQ
adhesive, and reduces tray weight.

*1 %ORFNLQJLVWKHXQGHVLUHGDGKHVLRQRIDGMDFHQWOD\HUVRI¿OPZKHQZLQGLQJ%ORFNLQJFDXVHVYDULRXVLVVXHVLQFOXGLQJKLQGHULQJVXUIDFHVOLSDQGSUHYHQWLQJSHHOLQJRII
*2 Minute particles of aluminum are evaporated in a vacuum using, for example, an electron beam or high-frequency induction. The vaporized aluminum is deposited on
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27̲ DIC Report 2018

Special Feature: Product Development Designed to Create New ValueA
Distinctively
DIC
Response

Maximizing top-class polymer technologies and an extensive global network toestablish a strong brand image and a proven track record as a supplier

Building on its pigment and resin dispersion and formulating
technologies realized through the production of printing inks, DIC
is promoting the development of high-value-added products thatleverage its basic and core technologies. The former category
includes technologies in the area of optics and color, organic
molecular design, polymer design and dispersion technologies,
while the latter includes those in the area of synthesis,
compounding formulation and surface treatment. DIC’s efforts inthis area are underpinned by its ability to integrate technological

A Wealth of Technologies in Areas Peripheral to Primers

resources originating across the DIC Group to combine materials
with diverse properties and performance characteristics.
DIC’s success in commercializing waterborne polyurethane
resin adhesive primers for optical and food packaging
applications is attributable to its know-how in peripheral areas
such as high-performance films, coatings and adhesives. The
Company makes use of its vast store of development andproduction know-how to realize distinctively DIC responses tomarket needs.

Packaging

An expanding global market

Exterior surface(Film cross-section)

Film

Extensive lineup of products (preservation,high designability, diversity, convenience)

Packaging inks
Reduces emissions of VOCs andCO2 and improves productivity

Leading
globalmarketshare

Laminating adhesives

Simple structure that imparts oxygen-barrier
properties, reducing weight and cost

Film (Same as exterior surface)
Interior surface

3URPRWLQJEXVLQHVVGLYHUVL¿FDWLRQWKURXJKLQIRUPDWLRQJDWKHULQJDQGJOREDOPDUNHWLQJ
3RO\PHUVLVRQHRI¿YHEXVLQHVVVHJPHQWVLQWRZKLFKWKH',&*URXSFODVVL¿HVLWVJOREDORSHUDWLRQV7KHUHPDLQLQJIRXUDUH3ULQWLQJ,QNV)LQH
Chemicals, Compounds and Application Materials. These four segments overlap with the Polymers segment not only on the technology front
but also because they frequently manufacture and sell products for common applications and operate in the same geographic markets. As a
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products. Accordingly, DIC recognizes the importance of a sales approach that encompasses consulting on everything from formulation to process
PDQDJHPHQW+HUHWRR',&WKXVFDSLWDOL]HVRQLWVH[WHQVLYHH[SHULHQFHWRSURYLGHWDLORUHGSURGXFWLRQVXSSRUWDVZHOODVWRVHOOSURGXFWVWR¿OP
manufacturers and other customers. This approach has earned the Company a solid reputation for reliability.
Key People from DIC

Having inherited DIC’s DNA, we are promoting the development of businesses that respond to social imperatives.
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shares of both markets by promoting the development of formulations and products that comply with the selection criteria and required performance characteristics of leading
customers in each of the countries and territories in which we operate.
$WDOOVWDJHVZH¿QGRXUVHOYHVLPSUHVVHGE\RXUZHDOWKRIWHFKQRORJLFDODQGKXPDQUHVRXUFHVDVZHOODVE\RXUPHWLFXORXVO\FUDIWHGJOREDOQHWZRUNZKLFKLVDWWULEXWDEOH
to the fact that we were early to turn our attention to overseas markets. Our ability toeffectively combine such assets results in a dynamic force that I liken to a chemical
reaction. These assets, amassed over 100 years in business, are the building blocks off
DIC’s DNA. They are also the driving force behind our efforts to develop products andglobal businesses that respond accurately to rapidly evolving social imperatives.
Kenji Ikeda
Daisuke Nagaoka
DIC (Shanghai) Co., Ltd. Sou Kanegae
Polymer Technical Group 2, Polymer Technical Division 2 Kazuhiko Chiyonobu
General Manager, Dispersion Sales Group, Polymers Product Division Nobuya Matsumoto(From left) Manager, Dispersion Sales Group, Polymers Product Division
Dispersion Sales Group, Polymers Product Division

DIC Report 2018 ̲28

TOPICWEB

http://www.dic-global.com/en/csr/
special/topics.html

Efforts to Reduce Environmental Impact by Using Water-Based Biomass
Ink Made with Plant-Based Packaging Resin
Sun Chemical Promotes Initiatives Aimed at Addressing an Important Social Imperative
Sun Chemical, which oversees the DIC Group’s operations in Europe and the Americas, is one of the world’s leading manufacturersof printing inks. The company develops and supplies a broad range of products that address diverse social imperatives.

Brands today are under a lot of pressure to be environment-friendly. Studies have shownthat consumers want more sustainable packaging and global retailers have made it clearthat they prefer to work with brands that integrate environment-friendly practices in their packaging.
Recognizing these trends, brands are taking dedicated steps to vet and study the environmental practices
implemented by their suppliers and partners. In fact, some brands in the fast/quick food service industry havegone so far as to push forward initiatives that focus on using all-natural packaging.
This has led to a push for greener inks with a higher level of bio-renewable content. A bio-renewable ink can
be derived from tree, plant, insect and/or animal materials, according to the U.S.-based National Association of
Printing Ink Manufacturers (NAPIM). These can include resins, gums, oils, waxes, solvents, and other polymer
building blocks.
Brand owners want these bio-renewable inks to maintain the same quality and performance requirements ofa non-renewable ink, keep to a cost that is competitive with non-renewable inks and comply with the standards
outlined by the brand and a variety of regulations, including California’s Proposition 65 and the European Union’s
Toy Safety Directive, among others.
Social Imperative

Sun Chemical has responded to the industry challenges by rolling out a line of inks that meet environment-friendly,
Sun Chemical’s bio-renewable and biodegradable standards that the industry, brand owners, retailers and consumers are looking for.
Response
Formulated with significantly higher levels of bio-renewable resin content compared to other previous market
offerings from Sun Chemical, the new SunVisto ® AquaGreen water-based inks deliver the required critical
performance attributes needed across a range of paper packaging applications.
The inks can be blendable using varnishes and standard water-based pigment
dispersions, and do not compromise end-use or on-press performance. They also offer
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high levels of resistance properties to rub, abrasion, water and grease.
Sun Chemical’s R&D and compliance teams from Europe, North America and SouthAmerica spent a year and a half replacing chemicals with natural products to ultimately
provide an ink solution that was comparable in cost, delivered the required performance
attributes and met all the standards and regulatory compliance requirements.

from the DIC Group

VOICE Sun Chemical is fulﬁlling its responsibilities toensure sustainable business practices.
Sun Chemical is a recognized leader in compliance and R&D, with a strong commitment tosustainable practices. Those attributes were why a customer in North America approached us
with a project to see if we could create a series of natural bio-renewable inks that would meetthe sustainability needs and standards of major fast/quick food service brands. It was a major
undertaking with a lot of testing and trial runs. It was inspiring to see our team’s determination
to find the right raw materials needed to accomplish the goals and requirements of ourcustomer and global regulations.

29̲ DIC Report 2018

Vice President, Marketing

Penny HollandCorporate Governance
Basic Approach to Corporate Governance
The DIC Group identifies the purpose of corporate governance as being to ensure effective decision making pertaining to its
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same time guaranteeing the appropriate monitoring and assessment of and motivation for management’s execution of business activities.
With the aim of achieving a higher level of trust on the part of shareholders, customers and other stakeholders and enhancing corporate
value, the DIC Group also promotes ongoing measures to reinforce its management system and ensure effective monitoring thereof.

| Policy on Corporate Governance
DIC has prepared a Policy on Corporate Governance, which it has published on its corporate website.
Policy on Corporate Governance WEB http://www.dic-global.com/en/about/pdf/governance_en.pdf| Corporate Governance Organization
A company with internal auditors, DIC maintains a Board of Directors and a Board of Corporate Auditors. DIC has also instituted an
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Sustainability Committee.
General Meeting of Shareholders

Corporate Governance Organization

Appointment

Board of Directors
Nomination Committee
Remuneration Committee

President and CEO

Appointment

Audit
Accounting
audit

Board of Corporate Auditors

Independent auditors

Sustainability Committee

Executive Committee

Internal Control Department

Product divisions, Marketing Management Unit,
Production Management Unit, Technical Management Unit,
R&D Management Unit, headquarters’ administrative departments, sites

Group companies

Internal audit

1

Board of Directors

To accelerate decision making and reinforce corporate governance, nine directors have been elected to the Board of Directors. Of
the nine, three are outside directors. In principle, the Board meets once monthly. The Board of Directors is responsible for making
decisions on matters stipulated in the Companies Act of Japan, and in DIC’s own regulations, as requiring Board-level approval, as
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2Nomination Committee

The Nomination Committee was established as an internal committee of the Board of Directors with the aim of ensuring objectivity in the
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RIWKHFRPPLWWHH¶V¿YHPHPEHUVDUHRXWVLGHZKLOHWKHSRVLWLRQRIFRPPLWWHHFKDLUPDQLV¿OOHGE\DQRXWVLGHGLUHFWRU
3

Remuneration Committee

The Remuneration Committee was established as an internal committee of the Board of Directors with the aim of enhancing the objectivityof procedures for determining executives’ remuneration. The committee, which has been entrusted with responsibility for determining
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4

Executive Committee

The Executive Committee deliberates and resolves issues related to the execution of business activities. In principle, the committee meets
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by one corporate auditor as part of the auditing process. Details of deliberations and resolutions are reported to the Board of Directors.

DIC Report 2018 ̲30

5Sustainability Committee

The Sustainability Committee, which functions as an advisory body, meets several times annually to formulate sustainability policies
DQGDFWLYLW\SODQVDVZHOODVWRHYDOXDWHDQGSURPRWHLQLWLDWLYHV&RPPLWWHHPHPEHUVDUHGLUHFWRUVDQGH[HFXWLYHRI¿FHUVGHVLJQDWHG
by the Board of Directors. As part of audit activities, one corporate auditor also attends Sustainability Committee meetings. The
committee reports the matters upon which it deliberates and the results of its deliberations to the Board of Directors.
6

Board of Corporate Auditors

The Board of Corporate Auditors comprises four members, including two outside corporate auditors. In principle, the Board of
Corporate Auditors meets once monthly. Board activities include debating and determining auditing policies and auditing plans. Board
members also report on the results of audits conducted.
7Internal Auditing Department

The internal auditing department is charged with internal auditing, which includes monitoring the effectiveness of internal controls at
DIC and domestic DIC Group companies. For DIC Group companies in Asia, Oceania, the PRC, the Americas and Europe, internal
auditing is the responsibility of local internal auditing teams.
8

Accounting Auditors

DIC has engaged Deloitte Touche Tohmatsu LLC as its independent auditors. DIC strives to ensure an environment that facilitates theaccurate disclosure of information and fair auditing.

| Rationale Behind Current Corporate Governance Organization
DIC has instituted an executive officer system, a move aimed at separating decision making and implementation and thereby
accelerating business execution and clarifying responsibilities. As well as appointing three highly independent outside individuals to
its Board of Directors, the Company has taken steps to reinforce its monitoring of business execution. DIC also has a Nomination
Committee and a Remuneration Committee, which include the three outside directors, to ensure objectivity in the nomination of, and
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attorney and one university professor as outside corporate auditors, liaises with the accounting auditors and the internal auditing
department. This structure ensures the effective functioning of DIC’s corporate governance system.

| System of Internal Controls
1

Status of the System of Internal Controls

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To this end, DIC has prepared and operates a system of internal controls to ensure proper business activities, based upon the Companies
Act of Japan and the Financial Instruments and Exchange Act of Japan. The Board of Directors hears annual reports on measures on thestatus of the system of internal controls, a summary of which is included in the Company’s report on its business activities.
2

Basic Policy Toward Eliminating Demands by Antisocial Elements',&¶VEDVLFSROLF\DVRXWOLQHGLQWKH',&*URXS&RGHRI%XVLQHVV&RQGXFWLVWRVWDQG¿UPO\DJDLQVWDQWLVRFLDOHOHPHQWVDQGLQQR
way to acquiesce to demands presented by such elements.

| Outside Directors and Outside Corporate Auditors
1

Number and Role of Outside Directors and Outside Corporate Auditors

DIC currently has three outside directors and two outside corporate auditors. The three outside directors have extensive experience inand knowledge of corporate management, which they are able to leverage in the performance of their duties as outside directors of DIC.
In addition to attending meetings of the Board of Directors, the outside directors serve as members of the Nomination Committee andthe Remuneration Committee, enabling them to provide supervision with an independent point of view, thereby helping to reinforce DIC’s
corporate governance. The two outside corporate auditors—one an attorney specializing in corporate law and the other an academic
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Group from an expert, multifaceted and independent perspective, thereby helping to reinforce the auditing function.
2Standards Used to Evaluate the Independence of Outside Directors and Outside Corporate Auditors

DIC has established standards for evaluating the independence of individuals appointed to the position of outside director or outside corporate
auditor. DIC’s outside directors and outside corporate auditors are individuals who, based on these standards, are unlikely to have conflicts ofinterests with ordinary shareholders and who comply with criteria for the independence of directors/auditors set by the Tokyo Stock Exchange.
3

Framework for Supporting the Efforts of Outside Directors and Outside Corporate Auditors

Prior to meetings of the Board of Directors, relevant materials are distributed to all directors, full-time auditors, outside directors andoutside corporate auditors. In addition, directors bringing matters before the Board provide explanations in advance to outside directors,
while full-time corporate auditors provide explanations as necessary to outside corporate auditors.

31̲ DIC Report 2018

| Other Initiatives to Enhance the Corporate Governance Organization
1

Composition of the Board of Directors

To enable the Board of Directors to resolve major operations-related issues, as well as
to facilitate the effective oversight of management, the Board of Directors comprises
outside directors, who maintain independence, and other individuals having a thoroughknowledge of the businesses of the DIC Group, with consideration given to ensuring abalance among necessary knowledge, experience and capabilities. In light of the DIC
Group’s global operations, DIC also strives to ensure diversity in the Board’s composition.
One member of the Board of Directors is female, as is one member of the Board of the
Corporate Auditors.

Composition of the Board of Directors

38.5%
61.5%

Composition of the Board of Directors and the Board of Corporate Auditors

2

In-house

Outside

Total

Percentage ofoutside members

Directors

6

3

9

33.3%

Corporate
auditors

2

2

4

50.0%

Total

8

5

13

38.5%

Directors of DIC

Outside directors

Remuneration for Executives

Remuneration for directors is determined by the Remuneration Committee, which takes into account prevailing market rates,
and consists of basic remuneration; bonuses, which are linked to consolidated operating results and the degree of achievementof individual targets; and stock compensation, which is based on medium- to long-term operating results. Directors who serve
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for basic remuneration only. Remuneration for corporate auditors consists of basic remuneration only and is determined throughdiscussion involving all corporate auditors, in accordance with internal rules established by the Board of Corporate Auditors, withconsideration given to ensuring a balance with remuneration for directors and to prevailing market rates.
3

Evaluation of the Board of Directors’ Effectiveness

DIC conducts an analysis and evaluation of the effectiveness of the Board of Directors annually via a self-evaluation conducted by
WKHGLUHFWRUVDQGFRUSRUDWHDXGLWRUV,Q¿VFDO\HDUWKH&RPSDQ\FRQGXFWHGDVXUYH\RIDOOGLUHFWRUVDQGFRUSRUDWHDXGLWRUV
regarding, among others, self-evaluation and Board administration, responses to which were analyzed and evaluated by the Board of'LUHFWRUV$VDUHVXOWWKHHIIHFWLYHQHVVRIWKH%RDUGRI'LUHFWRUVZDVFRQ¿UPHGDIC recognizes enhancing debate regarding the direction of corporate strategies and promoting deeper deliberations in the Nomination
Committee and Remuneration Committee, among others, as key challenges and will continue working to promote improvements.

| Leveraging its Position as a Global Manufacturer of Fine Chemicals to Support the UNGC
6HHNLQJWRIXO¿OOLWVUHVSRQVLELOLWLHVDVDPHPEHURIWKHLQWHUQDWLRQDOFRPPXQLW\LQDPRUHSURDFWLYH
manner, in December 2010 the DIC Group pledged its support for the 10 principles put forth by theUnited Nations (UN) and became a signatory to the United Nations Global Compact (UNGC).
Inaugurated in 2000, the UNGC is a voluntary initiative for companies that seek to achieve global
sustainable development. Companies and organizations worldwide have pledged their support for the
UNGC in the belief that global sustainable development is possible if companies align their business
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human rights, labor, the environment and the prevention of corruption.

DIC Report 2018 ̲32

Directors, Corporate Auditors and Executive Officers(As of May 2018)| Directors

5 Director

7

Yoshiyuki Nakanishi Masayuki Saito

Hideo Ishii

Yukako Uchinaga

2 President and CEO

4

6 Director

8

Kaoru Ino

Yoshihisa Kawamura Toshifumi Tamaki

1

Chairman of the Board of Directors

3

Representative Director

Director

Director*

Director*

9

Director*

Yoshiaki Tamura

8

6

5

7

9

* Outside

Kazuo Tsukahara

3

1

2

4

| Corporate Auditors
1

Corporate Auditor

Jiro Mizutani2

Corporate Auditor

Yoshiyuki Mase
3

Corporate Auditor*

Katsunori Takechi
4Corporate Auditor*

Cindy Yoshiko Shirata* Outside3| 2XWVLGH&RUSRUDWH$XGLWRU3URÀOHV

| 2XWVLGH'LUHFWRU3URÀOHV
Yukako Uchinaga

Yoshiaki Tamura

Katsunori Takechi

April
2004 Director and Senior Executive Officer, IBM Japan, Ltd.
October 2009 Director and Executive Vice President, Benesse Holdings, Inc.
April
2013 Honorary Chairman, Berlitz Corporation

January 2007 Executive Officer, Asahi Glass Co., Ltd.
March 2013 Representative Director and Executive Vice President, Asahi Glass Co., Ltd.
March 2017 Executive Fellow, Asahi Glass Co., Ltd.

April
2000 Public Prosecutor, Civil Affairs Bureau, Ministry of Justice
October 2003 Joins Anderson Mori & Tomotsune
July
2011 Managing Partner, Takechi & Partners

Kazuo Tsukahara
April 2008 Director and Managing Executive Officer, IHI Corporation
April 2012 Representative Director and Executive Vice President, IHI Corporation
June 2014 Adviser, IHI Corporation

33̲ DIC Report 2018

1

Cindy Yoshiko Shirata
April2002 Professor, Nihon University College of Economics
February 2010 Visiting Professor, University of Munich
October 2014 Professor, Faculty of Business Administration, Bunkyo University24

| ([HFXWLYH2IÀFHUV

President and CEO

Executive Vice PresidentManaging Executive Officer

Managing Executive Officer

Kaoru Ino

Masayuki Saito

Toshio Hasumi

Kazunari Sakai

Representative Director
Assistant to President and CEO
CFO
Chairman of the Board, Sun Chemical Corporation
Chairman of the Supervisory Board, Sun ChemicalGroup Coöperatief U.A.

President, Polymers Business Unit
General Manager, Polymers Product Div.

Technical Segment (Technical Management Unit
and R&D Management Unit)
General Manager, Technical Management UnitManaging Executive Officer

Managing Executive Officer

Managing Executive Officer

Managing Executive Officer

Hideo Ishii

Masami Hatao

Toshifumi Tamaki

Naoyoshi Furuta

President, Printing Inks Business Unit
General Manager, Printing Inks Product Div.
and Printing Inks Production Div.

General Manager, Marketing Management Unit

Head of Corporate Strategy Unit
In charge of Kawamura Memorial DIC Museum of Art
Chairman, DIC (China) Co., Ltd.

General Manager, Production Management UnitManaging Executive Officer

Managing Executive Officer

Executive Officer

Executive Officer

Masaya Nakafuji

Kazuo Hatakenaka

Rudi Lenz

Koji Tanigami

Head of General Affairs and Legal Unitand ESG Unit
Diversity

President, Fine Chemicals Business Unit
General Manager, Liquid Crystal Materials
Product Div.

President and CEO,Sun Chemical Corporation

President and CEO, DIC Graphics Corporation
Deputy General Manager, Printing Inks Product Div.

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Shinsuke Toshima

Taihei Mukose

Kiyotaka Kawashima

Masanobu Mizukoshi

President, Application Materials Business Unit
General Manager, Application Materials Product Div.

Head of Purchasing and Logistics & Information
Systems Unit

General Manager, R&D Management Unit
and Central Research Laboratories

President, Compounds Business Unit
General Manager, Liquid Compounds Product Div.
and Solid Compounds Product Div.

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Hiroyuki Ninomiya

Paul Koek

Myron Petruch

Takeshi Asai

Head of Finance and Accounting UnitManaging Director, DIC Asia Pacific Pte Ltd

General Manager, Pigments Product Div.
President, Performance Pigments,
Sun Chemical Corporation

General Manager, Corporate Planning Dept.
Osaka Branch and Nagoya Branch

DIC Report 2018 ̲34

Overview of Materiality and Sustainability
Key DIC Group Materiality Issues

Materiality Analysis

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Contribution to the realization of a low-carbon society
Contribution to colorful and comfortable lifestyles

The DIC Group has abstracted and analyzed material issues,that is, issues with the potential to affect its performance,
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Harmony with and contribution to society

Materiality Analysis Process
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Abstraction of Issues',&DEVWUDFWHGLVVXHVRISDUWLFXODUVLJQL¿FDQFHWRWKH*URXSEDVHGRQWKH*5,¶V*6XVWDLQDELOLW\5HSRUWLQJ*XLGHOLQHV LWV
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Contribution to the realization of a low-carbon society
Promotion of occupational health and safety,PSURYHPHQWRITXDOLW\PDQDJHPHQWFDSDELOLWLHV$ELOLW\WRIRVWHUDQGVWUHQJWKHQJOREDOKXPDQUHVRXUFHVテーマ
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5HVSHFWIRUKXPDQULJKWV
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Sustainability Committee members, heads of departments
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companies in the United States, Asia and elsewhere assessed
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RQWKHUHVXOWVRIWKLVSURFHVVDQGKDYLQJFRPSUHKHQVLYHO\UHYLHZHGLVVXHVLGHQWL¿HGE\H[WHUQDODVVHVVPHQWRUJDQL]DWLRQV
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(a) Material importance to DIC Group businesses',&DVVHVVHGLVVXHVZLWKWKHSRWHQWLDOWRKDYHDQLPSDFWRQ
WKH',&*URXSJLYLQJFRQVLGHUDWLRQWRERWKSRWHQWLDOULVNV
DQGEXVLQHVVRSSRUWXQLWLHV(b) Material importance to stakeholders
L  7KH',&*URXSUHFRJQL]HV¿YHNH\VWDNHKROGHUJURXSVFXVWRPHUVVXSSOLHUVORFDOFRPPXQLWLHVDQGVRFLHW\HPSOR\HHVDQGLQYHVWRUV $VVHVVPHQWVORRNHGDWOHYHORILQWHUHVWRQWKHSDUWRIVWDNHKROGHUVDQGSRWHQWLDOLPSDFW
LL  7R UHLQIRUFH WKH UROH RI REMHFWLYH H[WHUQDO FULWHULD
materiality issues identified by the DIC Group were
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DVVHVVPHQW SURJUDPV QDPHO\ WKH 'RZ -RQHV
6XVWDLQDELOLW\ ,QGLFHV '-6,  )76( 0&6, WKH6XVWDLQDELOLW\$FFRXQWLQJ6WDQGDUGV%RDUG 6$6% RIWKH
8QLWHG6WDWHVDQG6XVWDLQDO\WLFV

35̲ DIC Report 2018

5HVSRQVHWRHFRQRPLFJOREDOL]DWLRQHIIRUWVWRUHLQIRUFHJRYHUQDQFH

テーマ

5HVSRQVHWRWKHJURZWKRIGLJLWDOEXVLQHVVHVThe DIC Group’s Materiality Matrix
Very
high

Importance to stakeholders

2● Practical application of measures
to reduce environmental impactof a low-carbon society● Promotion of products and services that ◆ Response to economic globalization/
efforts to reinforce governancecontribute to environmental protection■ Promotion of occupational health ◆ Promotion of supply chain
management
and safety◆ Innovation through compounding ◆ Creation of next-generation
businesses● Contribution to the realization■ Respect for human rights■ Promotion of diversity■ Harmony with andcontribution to society■ Enhancement of brand strength/

reputation (evaluation)■ Contribution to colorful andcomfortable lifestyles◆ Provision of solutions◆ Promotion of open innovation■ Ability to foster and strengthen

global human resources◆ Improvement of quality

management capabilities◆ Efforts to reinforce marketing◆ Efforts to strengthen global technology

development capabilities■ Efforts to address needs

engendered by an aging
society and falling birth rates◆ Response to the growth of◆ Efforts to increase productivity

digital businesses

High
High
Importance to DIC Group businesses

Very
high

$PLGULVLQJHQYLURQPHQWDOFRQFHUQVLQFOXGLQJFOLPDWHFKDQJHDQGLQFUHDVLQJO\XUJHQWVRFLDOLPSHUDWLYHVFRPSDQLHVWRGD\IDFHDQHYHUPRUHGLYHUVHDUUD\RIFKDOOHQJHV,QOLQHZLWKLWVEDVLFVXVWDLQDELOLW\SROLF\WKH',&*URXSSURPRWHVDYDULHW\RIVXVWDLQDELOLW\LQLWLDWLYHVZRUOGZLGHDQGZRUNVWRPDLQWDLQDQDFFXUDWHJUDVSRIVRFLDOLPSHUDWLYHVSHUWDLQLQJWR(6*UHODWHGLVVXHVThemesDIC Sustainability Themes

Relevant UN Sustainable Development Goal (SDG) Icons

Business models that respond tosocial imperatives.......................................... P49

Themes that
demonstrate uniquecapabilities (A)SDGs

Goals 8, 9 and 11

SDGs

Goals 9 and 12

SDGs

Goals 3 and 4

SDGs

Goals 3, 6, 7, 12, 13, 14 and 15

SDGs

Goals 3, 4, 5, 8 and 10

SDGs

Goal 12

SDGs

Goal 16

New technology development andvalue creation ................................................. P50

Harmony with the community andsocial contributions .......................................P51
Communication with stakeholders ............. P52

Environment, safety and health ................... P39

Core andFDWHJRU\VSHFLÀFthemes(Themes that combine
elements of (A) and (B))

Quality ............................................................. P44
Human resources management ................... P45

Sustainable procurement ............................. P48

Basic themes (B)Compliance..................................................... P37
Risk management .......................................... P37
Information security ...................................... P38

The 2030 Agenda for Sustainable Development$WWKH816XVWDLQDEOH'HYHORSPHQW6XPPLWLQ6HSWHPEHUDSURSRVDOWLWOHG³7UDQVIRUPLQJRXUZRUOGWKH$JHQGDIRU6XVWDLQDEOH'HYHORSPHQW´ODWHUVXPPDUL]HGDVWKH6XVWDLQDEOH'HYHORSPHQW*RDOV 6'*V ZDVDGRSWHGZLWKWKHSDUWLFLSDWLRQRIPRUHWKDQ81PHPEHUVWDWHV7KHDJHQGDZKLFKVXFFHHGHG
WKH0LOOHQQLXP'HYHORSPHQW*RDOV 0'*V HQFRPSDVVHVJRDOVDQGWDUJHWV$OO81PHPEHUVWDWHVDUHH[SHFWHGWRPRELOL]HHIIRUWVWRDWWDLQWKHJRDOVHVVHQWLDOWRVXVWDLQDEOHGHYHORSPHQWIRUWKHSODQHWE\7KH',&*URXSSOHGJHVWRFRQWULEXWHWKURXJKLWVEXVLQHVVDFWLYLWLHVWRWKHVXFFHVVRIWKH6'*V
)RUPRUHLQIRUPDWLRQRQWKH 6'*VSOHDVHVHH WEB http://www.un.org/sustainabledevelopment/sustainable-development-goals/| Sustainability Framework and Themes

Sustainability
Basic Sustainability Policy)RUPXODWHGLQ-DQXDU\

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HQYLURQPHQWDQGDGYDQFLQJLWVSURWHFWLRQPDQDJLQJULVNVDQGFUHDWLQJYDOXHIRUVRFLHW\WKURXJKLQQRYDWLRQ',&*URXSHPSOR\HHVZLOOFRQWLQXHZRUNLQJWRGHOLYHUWKHYDOXHWKDWLWVVWDNHKROGHUV²LQFOXGLQJLWVFXVWRPHUVVXSSOLHUVORFDOFRPPXQLWLHVVKDUHKROGHUVDQGLQYHVWRUVDQGHPSOR\HHV²
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± WDUJHWVDQGFUHDWHVDQQXDODFWLYLW\SODQVIRUHDFKRIWKHVHWKHPHV7KH*URXSPDNHVXVHRIWKHSODQ±GR±FKHFN±DFW 3'&$ F\FOHLQSURPRWLQJLQLWLDWLYHVDQGUHSRUWVRQLWVDFKLHYHPHQWVDQQXDOO\LQ
WKH',&5HSRUW| System for Promoting Sustainability Initiatives
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GHOLEHUDWLQJRQFULWLFDOUHODWHGPDWWHUV(IIHFWLYHIURPILVFDO\HDU',&HVWDEOLVKHGWKH(6*8QLWZLWKWKHDLPRISURPRWLQJWKHIXUWKHUJOREDOH[SDQVLRQRILWV(6*UHODWHGLQLWLDWLYHV

DIC Report 2018 ̲36

ComplianceWEB

http://www.dic-global.com/en/csr/philosophy/
management/compliance.html

Towards Fair and Transparent Corporate Activities| The DIC Group Code of Business Conduct

SDGs Goal 16

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national laws and international rules but also presents 10 principles essential to the professional conduct of DIC Group employees.
The DIC Group Code of Business Conduct has since been translated into 25 different languages to ensure that DIC Group employees
worldwide share the Group’s values and commit themselves to doing what is right, as well as to acting with common sense and anunderstanding of individual responsibilities, in all aspects of their work.
DIC Group Code of Business Conduct WEB http://www.dic-global.com/en/csr/pdf/code_of_business_conduct_en.pdf

Basic Themes| Initiatives to Promote ComplianceIn addition to the DIC Group Code of Business Conduct, the Group promotes compliance through the following initiatives:❶ Training focused on legal issues to improve compliance awareness is provided for employees at point of hire, when promoted
and before overseas transfers. In addition, with the aim of promoting awareness of the DIC Group Code of Business Conduct,in fiscal year 2017 e-learning on the prevention of bribery and corruption was provided in Japan, the Asia–Pacific region andGreater China. Participation in all three regions averaged 91%-plus of eligible employees.
❷ Compliance officers are appointed at all regional headquarters—DIC (Japan), Sun Chemical (the Americas and Europe), DIC(China) (the PRC), and DIC Asia Pacific (Asia and Oceania)—to spearhead global compliance efforts.

Core and CategorySpecific Themes

The DIC Group vows that it will not violate the principles of the DIC Group Code of Business Conduct, even if such a violation
would appear to profit the Group. As a corporate citizen, the Group also pledges to respect social norms and act in a sound andsocially acceptable manner. In fiscal year 2017, there were no serious violations of compliance laws.

| Establishing and Operating a Whistle-Blowing System
The DIC Group has established a whistle-blowing system through which one can directly report an issue or question regarding
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can handle reports in the languages of more than 160 countries. The Group has also devised strict rules under this system to protect
whistle-blowers from retaliation, and is working to ensure the system functions in a proper manner.

Themes that Demonstrate
Unique Capabilities| Taxation Compliance
In November 2017, the DIC Group formulated an official approach to tax. As an organization with global operations, theGroup engages in fair and appropriate tax planning that reflects the nature of its businesses. The Group is also aware of risks
associated with transfer price taxation and the use of tax havens and of its obligation to pay appropriate taxes in the proper
jurisdictions as appropriate for its operations.
The DIC Group’s Approach to Tax WEB http://www.dic-global.com/en/csr/philosophy/management/tax.html

Risk ManagementWEB

http://www.dic-global.com/en/csr/philosophy/
management/bcm.html

Reducing Business Risks and Preventing the Recurrence of Incidents| Risk Management Policy
To date, the DIC Group’s Risk Management Subcommittee has focused on establishing a risk management policy and a risk
management system, efforts that are designed to further enhance corporate value Groupwide. In a bid to ensure the effective andsustainable implementation of initiatives, in January 2015 the Group introduced a newly formulated risk management policy.
Risk Management Policy WEB http://www.dic-global.com/en/csr/philosophy/management/bcm.html| Risk Management System
In the process of formulating the risk management policy, the Risk Management Subcommittee has established the DIC Group risk
management system. This system begins with the distribution to directors of survey questionnaires regarding risks with the potential
to interrupt the Group’s businesses. Based on survey results, the subcommittee determines priority risks. Risk management plans areproduced and risk response measures implemented, assessed, improved and reviewed by executives, thereby completing the PDCA
cycle, with the aim of facilitating ongoing risk reduction.

37̲ DIC Report 2018

| Progress of Response Measures as of the End of Fiscal Year 2017
In fiscal year 2017, DIC incorporated materiality into the risk
identification process. As a result, the Company identified seven
new priority risks to be addressed during the period. Measures
implemented were judged to have been completed for three of theserisks, which were redesignated “routine.” The Company is currently
taking decisive steps to address the remaining four.

Priority risk

Progress• Ability to foster global human resources• Global technology development capabilities• Business continuity management (BCM)

Completed(Redesignated “routine”)• Creation of next-generation businesses• Management of chemical substances• Optimization of global production configuration• Governance at subsidiaries

Ongoing| BCM in Fiscal Year 2017
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need to address business continuity as an inherent aspect of everyday operations by encouraging the formulation of highly effective methods
for countering various hypothetical crises—thereby enabling DIC to leverage limited resources to secure supply chains and restore sites
to operability in the aftermath of a major disaster—the Group conducted visiting BCP lectures at 20 domestic sites. Participating productdivision general managers and general managers/group leaders from production sites exchanged views on issues and solutions.

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of its consolidated net sales are generated by, bases outside of Japan. To date, DIC has worked continuously to reinforce subsidiaries’
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visibility of Group governance systems; (2) Ensure appropriate behavior by subsidiaries’ boards of directors; (3) Ensure appropriate
EHKDYLRUE\VXEVLGLDULHV¶H[HFXWLYHVDQG  ,PSOHPHQWPHDVXUHVWKDWKHOSVXEVLGLDULHVHQVXUHUDWLRQDOIURQWOLQHRSHUDWLRQVInformation Security

Basic Themes| Initiatives to Strengthen Governance at Subsidiaries

WEB

http://www.dic-global.com/en/csr/philosophy/
management/security.html

Initiatives in Japan
DIC has continuously taken steps to fortify its system for responding to targeted cyber attacks and other critical risks to its information
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Things (IoT), the integration of information and operational systems and the expansion of cloud computing and other new technologies. DIC
also invited a third-party organization to assess its information security initiatives, which served to illuminate issues requiring attention froman expert, objective and multifaceted perspective, and has begun taking steps to address these issues in order or priority.
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security measures of DIC Group companies in these regions.
Initiatives in the Americas and Europe
Having recognized information security as a challenge of vital importance, the Sun Chemical Group, which oversees operations in the Americas and Europe, works to ensure
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From DIC Group,
VOICE Sun Chemical s information security system

At Sun Chemical, we see firsthand the increase and complexity of cyber threats on a daily basis andunderstand the potential impacts on business. To ensure business continuity, we are focused on protecting
our systems and data assets through people, process and technology. Our information security program’sfoundation is based on the globally recognized ISO 27001 information security framework, and our strategy
entails a multilayer security approach and continuous improvements based on threat intelligence and incident
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virus software, network security solutions and so on. In addition to technology investments, we are focusing
efforts on establishing a global user security awareness program to build a security-minded culture within
Sun Chemical by training users how to protect themselves and the organization from cyber threats.

Sun Chemical(From left) Manager, Infrastructure Chimdi Ifeakanwa
Specialist, Security Infrastructure Larry Withrow
Global Process Lead

Ryan Vasquez

DIC Report 2018 ̲38

Themes that Demonstrate
Unique Capabilities| Globally Maintaining and Enhancing Information Security

Core and CategorySpecific Themes

Initiatives to Ensure Information Security

Environment, Safety and Health (ESH)WEB

http://www.dic-global.com/en/
csr/environment/

Toward the Achievement of a Sustainable Society
SDGs Goals 3, 6, 7, 12, 13, 14 and 15

Promoting Responsible Care
| Initiatives in Fiscal Year 2017

Core and CategorySpecific Themes

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RI¿FHUVXVHGWKH6KDUH3RLQWLQWUDQHWSODWIRUPWRVKDUHGDWDDQGFRQIHUHQFHPDWHULDOVDPRQJRWKHUVESH Auditing| Audits in Fiscal Year 2017
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Outline of ESH Audits Implemented (Fiscal Year 2017)
Japan

Overseas

DIC

DIC Graphics

Other DIC Group companies(follow-up assessments)

9 sites

4 sites

13 sites

Total

Greater
China

ROK

21

3

companies

26 sites

Total

Asia–Pacific region

16

companies

companies(out of 21)

40companies

Occupational Safety and Health and Disaster Prevention| Principal Initiatives in Fiscal Year 2017

Themes that Demonstrate
Unique Capabilities

1

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2Training Skilled Safety Personnel to Predict Risks

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3Promoting Hands-On Safety Training

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,QGRQHVLD2YHUWKHSDVWIHZ\HDUVWKHVHDQGRWKHULQLWLDWLYHVKDYHKHOSHGWRDOPRVWKDOYHWKHIUHTXHQF\UDWHRIRFFXSDWLRQDODFFLGHQWVUHVXOWLQJLQZRUNGD\VORVWDW',&*URXSVLWHVLQ-DSDQWorkdays Lost Due to Occupational Accidents (FY2015–2017)

Status of Occupational Accidents
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39̲ DIC Report 2018

DIC

Number of
workdays lost

DIC Group (Japan)

DIC Group (Global)

2015

2016

2017

2015

2016

2017

2015

2016

2017

1

3

2

5

5

3

88

71

70

Frequency
rate

0.181 0.541 0.360 0.556 0.548 0.331 2.375 1.893 1.752

Severity rate

0.005 0.012 0.054 0.018 0.026 0.028

TRIR*

--

--

--

1.27 2.35 2.16 2.11 3.07 2.65 4.32 3.84 3.98

recordable injury rate (TRIR): Number of occupational accidents resulting in lost workdays + Number of occupational accidents* Totalnot resulting in lost workdays / Million work hours

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WKHSUHVLGHQWDQG&(2| Principal Initiatives in Fiscal Year 2017
1

Setting a Medium-Term Target for the Reduction of CO 2 Emissions

Energy Consumption and CO 2 Emissions by the Global DIC Group'HVSLWHDLQFUHDVHLQSURGXFWLRQYROXPHLQ¿VFDO\HDUHQHUJ\FRQVXPSWLRQE\',&*URXSFRPSDQLHVZRUOGZLGHGHFUHDVHGWR*-IURP*-LQ¿VFDO\HDUZKLOHJOREDO&2HPLVVLRQVGHFOLQHGWRPHWULFWRQQHVIURPPHWULF
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Global CO2 Emissions in Fiscal Year 2017

CO2 Emissions in Fiscal Year 2017 by Region

Results of energy-saving initiatives implemented by the DIC Group in Fiscal Year 2017

+1.1％

Energyconsumption

Greater China

CO2 emissions

unit of - 2.9 ％ perproduction
4.7％

Asia–Pacificregion659,378
metric tonnes

634,741
metric tonnes

19%- 3.7 ％

from fiscal year 2016

Fiscal year 2016
3

Japan

10%

Americasand Europe

Breakdown of
CO 2 Emissions in
Fiscal Year
2017

39%

32%

Fiscal year 2017

Themes that Demonstrate
Unique Capabilities

Globalproduction
volumeReducing Fossil Fuel Use by Promoting the Introduction of Renewable Energy

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Megasolar and wind power systems
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DIC Report 2018 ̲40

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PIC 1

Solar Power System Installation Helps Reduce Energy Consumption and CO2 Emissions
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Sun Chemical Steps Up Efforts to Promote the Use of Renewable Energy
Basic Themes

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Themes that Demonstrate
Unique Capabilities

Energy Consumption and CO 2 Emissions by the DIC Group in Japan,Q¿VFDO\HDUSURGXFWLRQYROXPHE\WKH',&*URXSLQ-DSDQ²WKHVLWHVRSHUDWHGE\',&DQGGRPHVWLF*URXSFRPSDQLHV²URVH$OWKRXJKHQHUJ\FRQVXPSWLRQUHPDLQHGOHYHODW*-HQHUJ\FRQVXPSWLRQSHUXQLWRISURGXFWLRQ²WKHLQGLFDWRUVSHFL¿HGLQ-DSDQ¶V$FWRQ
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Independent Electric Power Generation: 23.0% of Total Consumption in Japan,Q-DSDQWKH',&*URXSKDVQDWXUDOJDVWXUELQH±SRZHUHGFRJHQHUDWLRQV\VWHPVZLWKDJHQHUDWLQJFDSDFLW\RIN:LQSODFHDWIRXUSODQWV &KLED
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6

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WR*-IURP*-LQ¿VFDO\HDUDQGHQHUJ\FRQVXPSWLRQSHUXQLWRISURGXFWLRQVOLSSHGWR*-PHWULFWRQQH
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Reducing Discharge of Chemical Substances| Principal Initiatives in Fiscal Year 2017
1

Reducing Emissions of VOCs

,Q¿VFDO\HDUHPLVVLRQVRI92&VLQWRWKHDLUE\',&WRWDOHGPHWULFWRQQHVDGHFUHDVHRIIURP¿VFDO\HDUZKLOHWKRVHE\WKH',&*URXS
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41̲ DIC Report 2018

2

Managing Water Resources,QILVFDO\HDUIUHVKZDWHUZLWKGUDZQE\WKHJOREDO',&*URXSHGJHGGRZQIURPWKHILVFDO\HDUOHYHOWRPZKLOHZDVWHZDWHUGLVFKDUJHGURVHWRP(IIHFWLYHIURP¿VFDO\HDUWKH*URXSDGRSWHGWKH*5,¶VJXLGHOLQHIRUFROOHFWLQJGDWDRQZDWHUZLWKGUDZQDQGXVHG LWVZDWHUULVNDVVHVVPHQWWRROWRDQDO\]HLQLWLDOZDWHUULVNDWVLWHVZRUOGZLGH:LWKWKHDLPRIHQKDQFLQJLWVDELOLW\WRPDQDJHZDWHUUHVRXUFHVWKH*URXSDOVRFRPPHQFHGDUHYLHZRIWKHVWDWXVRIZDWHUUHF\FOLQJHIIRUWV* ,QFOXGHGLQWKH*5,ʼV*6XVWDLQDELOLW\5HSRUWLQJ*XLGHOLQHV

3

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4Reducing SOx, NOx and COD

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Newly Installed Thermal Combustion System at DIC Graphics (Guangzhou))DFLOLWDWHVWKH(IÀFLHQW7UHDWPHQWRI92&V,Q$XJXVW',&*UDSKLFV *XDQJ]KRX /WGLQVWDOOHGDQHZV\VWHPIRUWKHUPDOO\GHFRPSRVLQJDQGGHRGRUL]LQJ
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Reducing Industrial Waste| Principal Initiatives in Fiscal Year 2017
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Initiatives by the DIC Group in Japan
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DIC

125
320

89
232

90
207

104
158

48
106

44
86

49
80

116
139

97
183

97
148

01

02

03

04

Fiscal year 2017

128
537

00

metrictonnes312
991

Fiscal year 2017

05

06

07

08

09

10

11

12

13

14

15

16

17 （FY）

0（Base year）

148

metrictonnes

537
1,288

3,000

97
1,560
2,296

3,426
4,326

6,000

DIC Group(Japan)

DIC
4,190

5,581

9,000

7,981

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（Metric tonnes）

DIC Group (Japan)

DIC Report 2018 ̲42

Themes that Demonstrate
Unique Capabilities

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Export Licenses
Class A licenses

1,473
Class B licenses

Import Licenses
Advanced course
licenses

98

304

194
From DIC Group

VOICE We are working to improve responsiveness to laws and regulations governing chemical substances.
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43̲ DIC Report 2018

Wenjing Zhang

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RIDQGUHGXFH&2HPLVVLRQVDWWULEXWDEOHWRORJLVWLFV| Safety Management in Logistics| Reducing Greenhouse Gas Emissions Attributable to Logistics:KLOHWKHYROXPHRISURGXFWVVKLSSHGHGJHGGRZQHQHUJ\FRQVXPSWLRQGHFOLQHGDQG&2HPLVVLRQVDWWULEXWDEOHWRORJLVWLFVGHFUHDVHG(QHUJ\FRQVXPSWLRQSHUXQLWRISURGXFWLRQDWWULEXWDEOHWRORJLVWLFVLPSURYHG7KHVHUHVXOWVZHUHDWWULEXWDEOHSULPDULO\WRRQJRLQJHIIRUWVWRFRPELQHORWVDQGDQLQFUHDVH
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http://www.dic-global.com/en/
csr/quality/

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| Framework for Implementation
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1

Initiatives Aimed at Increasing Customer Satisfaction

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New Efforts to Enhance Product Quality–Related Educational Initiatives&RPPLWWHGWRSURYLGLQJVDIHVHFXUHSURGXFWVWKDWVDWLVI\LWVFXVWRPHUV',&UHFRJQL]HVWKHLPSRUWDQFHRIHQVXULQJWKDWHPSOR\HHVPDLQWDLQDKLJKDZDUHQHVVRITXDOLW\DVZHOODVDFRQVWDQWFRPPLWPHQWWRDFKLHYLQJIXUWKHUTXDOLW\LPSURYHPHQWVDQGXSKROGLQJKLJKTXDOLW\VWDQGDUGV7RWKLVHQGWKH
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HPSOR\HHVDQGGHSDUWPHQWVE\IDFLOLWDWLQJWKHH[FKDQJHRILQIRUPDWLRQDQGRSLQLRQVDIC Report 2018 ̲44

Themes that Demonstrate
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New
graduates
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45̲ DIC Report 2018

DIC Training Programs
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2

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| Initiatives that Support a Healthy Work–Life Balance

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Themes that Demonstrate
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Core and CategorySpecific Themes

VOICE Thanks to the support of my supervisors and colleagues, I learned to really love my work.

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Childcare and Nursing Care Handbook',&KDVDOVRUHYLVHGWKHUXOHVRIWKHVHSURJUDPVLQFOXGLQJPDNLQJLWSRVVLEOHWREUHDNXSQXUVLQJFDUHOHDYHDVZHOODVWRVKRUWHQZRUNGD\VWKHUHE\PDNLQJLWHDVLHUIRUHPSOR\HHVWRXVHWKHP
Promoting Telecommuting

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WKH',&7HOHFRPPXWLQJ6\VWHPZKLFKLVDYDLODEOHWRDOOHPSOR\HHVDWDOOVLWHVLQ-DSDQ
Use of the Childcare Leave and Leave to Assist with Parenting Programs
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Number of Employees Using the Childcare Leave and Leave to Assist with Parenting Programs

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Themes that Demonstrate
Unique Capabilities

Core and CategorySpecific Themes

1XPEHURIHPSOR\HHVXVLQJWKH/HDYHWR$VVLVWZLWK3DUHQWLQJ3URJUDP

2

Fiscal year 2014

Fiscal year 2015

Fiscal year 2016

28
63

29
64

35
62

Fiscal year 2017

35
77

Reducing Extreme Overwork and Encouraging Employees to Take Annual Paid Leave',&KDVGHSOR\HGDQHOHFWURQLFV\VWHPWRPDQDJHRQVLWHKRXUVZRUNLQJKRXUVDQGDSSURYHGRYHUWLPHKRXUV$VDPHDVXUHWRSUHYHQWH[WUHPH
RYHUWLPHLIDQHPSOR\HHH[FHHGVWKHDJUHHGXSRQRYHUWLPHOLPLW KRXUVPRQWK KLVRUKHUVXSHUYLVRUDQGWKHVHQLRUH[HFXWLYHLQFKDUJHDUHDXWRPDWLFDOO\QRWL¿HGVRWKDWVWHSVFDQEHWDNHQWRDPHOLRUDWHWKHVLWXDWLRQ,QDGGLWLRQWKH&RPSDQ\KDVLQVWLWXWHGDPDQGDWRU\*URXSZLGH³QR
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47̲ DIC Report 2018

Sustainable ProcurementWEB

http://www.dic-global.com/en/
csr/stakeholder/partner.html

Promoting Socially Responsible Procurement Across the Supply Chain
SDGs Goal 12

The DIC Group CSR Procurement Guidelines❶ &RPSOLDQFHZLWKODZVDQGVRFLDOQRUPV❷ 5HVSHFWIRUKXPDQULJKWVDQGFRQVLGHUDWLRQIRUZRUNHQYLURQPHQWV
❸ 6DIHW\DQGK\JLHQH❹ 3URPRWLRQRIVRXQGEXVLQHVVPDQDJHPHQW❺ &RQVLGHUDWLRQIRUWKHHQYLURQPHQW❻ Information security❼ $SSURSULDWHTXDOLW\DQGVDIHW\DQGLPSURYHGWHFKQRORJLHV❽ )OH[LEOHDWWLWXGHWRHQVXUHVWDEOHVXSSOLHVDQGUHVSRQGWRFKDQJH❾ &RQWULEXWLRQWRORFDOFRPPXQLWLHVDQGVRFLHW\❿ 3URPRWLQJ&65DQGGHSOR\LQJLWLQWKHVXSSO\FKDLQ%DVHGRQWKH',&*URXS8QLYHUVDO3XUFKDVLQJ3ROLF\DQGLQFRUSRUDWLQJUHTXLUHPHQWVFRQWDLQHGLQJXLGHERRNVSXWRXWE\H[WHUQDORUJDQL]DWLRQVLQFOXGLQJWKH-DSDQ(OHFWURQLFVDQG,QIRUPDWLRQ7HFKQRORJ\,QGXVWULHV$VVRFLDWLRQ -(,7$ ',&IRUPXODWHGWKH',&*URXS&653URFXUHPHQW*XLGHOLQHVDVHULHVRIUHTXLUHPHQWVSHUWDLQLQJWR(6*UHODWHGLPSHUDWLYHVLQFOXGLQJWKHPDQDJHPHQWRIFKHPLFDOVXEVWDQFHVLQDQGUHGXFWLRQRIWKHHQYLURQPHQWDOLPSDFWRIUDZPDWHULDOVDVZHOODVUHVSHFWIRUKXPDQULJKWVDFURVVLWVHQWLUHVXSSO\FKDLQ:LWKWKHDLPRIFRPSHOOLQJVXSSOLHUVWRREVHUYHWKHVHJXLGHOLQHVWKH',&*URXSFRQGXFWVDVVHVVPHQWVDQGRQVLWHLQTXLULHVLQDFFRUGDQFHZLWKWKHDIC Group Supply-chain CSR
Deployment Guidebook 9HUVLRQRIWKHJXLGHERRNZDVSXEOLVKHGLQ-XO\ 

Basic Themes| Encouraging CSR Procurement,QOLQHZLWKWKH',&*URXS8QLYHUVDO3XUFKDVLQJ3ROLF\',&IRUPXODWHGWKH',&*URXS*UHHQ3URFXUHPHQW*XLGHOLQHVZKLFKSURKLELWWKH
SURFXUHPHQWRIPDWHULDOVFRQWDLQLQJKD]DUGRXVVXEVWDQFHVLQVHYHQFDWHJRULHV 7KHJXLGHOLQHVPDQGDWHWKHVXEPLVVLRQRID',&5DZ0DWHULDOV6XUYH\DQ6'6DQGDFKHP6+(53$ DVZHOODVD',&*URXS*UHHQ3URFXUHPHQW*XLGHOLQHV6XUYH\ZKHQSXUFKDVLQJUDZPDWHULDOVWKHUHE\FUHDWLQJDV\VWHPIRUHOLPLQDWLQJVXEVWDQFHVRIFRQFHUQ6XEPLVVLRQRID&RQÀLFW0LQHUDOV6XUYH\LVDOVRUHTXLUHG  6XEVWDQFHVWKHSURGXFWLRQRIZKLFKLVSURKLELWHGDVRXWOLQHGLQ$UWLFOHRI-DSDQ¶V,QGXVWULDO+HDOWKDQG6DIHW\$FW  6XEVWDQFHVGHVLJQDWHGDVFODVVVSHFL¿HGFKHPLFDOVXEVWDQFHVLQ-DSDQ¶V$FWRQWKH(YDOXDWLRQRI&KHPLFDO6XEVWDQFHVDQG5HJXODWLRQRI7KHLU0DQXIDFWXUHHWF  6XEVWDQFHVGHVLJQDWHGIRUPRQLWRULQJXQGHU-DSDQ¶V$FWRQ
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SDUWLFXODWHVGHQRWHGLQ-DSDQ¶V$LU3ROOXWLRQ&RQWURO$FW  6SHFL¿HGSRLVRQRXVVXEVWDQFHVLQGLFDWHGLQ-DSDQ¶V3RLVRQRXVDQG'HOHWHULRXV6XEVWDQFHV&RQWURO$FWDQG  
6SHFL¿HGVXEVWDQFHVGHWDLOHGLQWKH6WRFNKROP&RQYHQWLRQRQ3HUVLVWHQW2UJDQLF3ROOXWDQWV FKHP6+(53$LVDVFKHPHGHVLJQHGWRIDFLOLWDWHWKHDFFXUDWHDQGHI¿FLHQWVKDULQJRILQIRUPDWLRQRQFKHPLFDOVXEVWDQFHVLQSURGXFWVDFURVVWKHHQWLUHVXSSO\FKDLQ',&EHJDQXVLQJFKHP6+(53$LQODWH¿VFDO\HDU

Core and CategorySpecific Themes| The DIC Group Green Procurement Guidelines)URP1RYHPEHUWKURXJK'HFHPEHUWKH',&*URXSFRQGXFWHG
DVVHVVPHQWVIRUVXSSOLHUVXVLQJYHUVLRQRIWKHDIC Group Supply-chain
CSR Deployment GuidebookDFFRXQWLQJIRUSOXVRILWVSURFXUHPHQW
VSHQGLQJ LQ -DSDQ 7KH *URXS DQDO\]HG DQG DVVHVVHG TXHVWLRQQDLUHUHVSRQVHVSURYLGLQJIHHGEDFNWRDOOVXSSOLHUVDQGUHTXHVWLQJFRUUHFWLYH
PHDVXUHVIRUVLJQL¿FDQWLVVXHVWKURXJKRQVLWHLQTXLULHVRUZULWWHQFRPPHQWV| Conducting On-Site Inquiries

Cumulative Number ofSuppliers Assessed(November 2013–December 2017)729

Equivalent to
90%-plus ofprocurement
spending in Japan)HHGEDFNVKHHW)URP¿VFDO\HDUWKURXJK¿VFDO\HDU7WKH',&*URXSFRQGXFWHGRQVLWHLQTXLULHVIRUVXSSOLHUV7KHREMHFWLYHRIWKHVHLQTXLULHVLVWRKHOSVXSSOLHUVIXUWKHUWKHLUXQGHUVWDQGLQJRI&65

| Global Procurement Initiatives,Q¿VFDO\HDU',&DQGUHJLRQDOKHDGTXDUWHUVLQWKH35&DQGWKH$VLD±3DFL¿FUHJLRQFRRSHUDWHGWRFRQGXFWRQVLWHLQTXLULHVIRUVXSSOLHUVLQFRUH
EXVLQHVVHVLQWKH35&EDVHGRQWKHVXSSOLHUV¶&65SURFXUHPHQWDVVHVVPHQWUHVSRQVHV',&DOVRZRUNHGZLWKWKHVHVXSSOLHUVWRIRUWLI\XQGHUVWDQGLQJRILVVXHVUHODWHGWRORFDOHQYLURQPHQWDOUHJXODWLRQVDQGRIHQYLURQPHQWDOLVVXHVLQWKHVXSSO\FKDLQUHODWHGWRORFDOOHJDODQGUHJXODWRU\FRPSOLDQFHDVZHOODVWRUHTXHVWFRUUHFWLYHDFWLRQV,QIRUPDWLRQRQWKHVHRQVLWHLQTXLULHVZDVVKDUHGDWDJOREDOSURFXUHPHQWFRQIHUHQFHZLWK6XQ&KHPLFDO

| &RQÁLFW0LQHUDOV,QFRPSOLDQFHZLWKWKH866HFXULWLHVDQG([FKDQJH&RPPLVVLRQʼVUHTXLUHPHQWIRUOLVWHGFRPSDQLHVWRUHSRUWRQWKHLUXVHRIFRQIOLFWPLQHUDOVWKH',&*URXSSXEOLVKHGLWV%DVLF3ROLF\FRQFHUQLQJ&RQÀLFW0LQHUDOVRQLWVJOREDOZHEVLWH7KLVSROLF\RXWOLQHVWKH*URXS¶VSOHGJHWRUHIUDLQIURPXVLQJJROGWDQWDOXPWXQJVWHQDQGWLQZKLFKDUHFODVVL¿HGDVFRQÀLFWPLQHUDOVWKDWLVPLQHUDOVPLQHGLQFRQGLWLRQVRIDUPHGFRQÀLFWDQGDEXVHLQWKH'HPRFUDWLF5HSXEOLFRIWKH&RQJRDQGLWVQHLJKERULQJFRXQWULHV7KHSROLF\DOVRVWDWHVWKDWVKRXOGDQ\UDZPDWHULDOVSXUFKDVHGIURPWKLUGSDUW\VXSSOLHUVEHIRXQGWRFRQWDLQFRQÀLFWPLQHUDOVWKH',&*URXSZLOOLPPHGLDWHO\WHUPLQDWHWKHSURFXUHPHQWWKHUHRI
http://www.dic-global.com/en/csr/stakeholder/conflict.html%DVLF3ROLF\&RQFHUQLQJ&RQÀLFW0LQHUDOVWEB

DIC Report 2018 ̲48

Themes that Demonstrate
Unique Capabilities| Analyzing the Results of Questionnaires

Business Models that Respond to Social Imperatives

WEB

http://www.dic-global.com/en/
csr/stakeholder/customer.html

Cultivating Next-Generation Businesses
SDGs Goals 8, 9 and 11| Promoting Businesses that Anticipate Social Imperatives
The DIC Group conducts tireless research aimed at addressing key technical challenges and is developing innovative materials andsystems for storage batteries and sensors that will yield concrete, viable solutions, thereby contributing to sustainability. The Group also
continues to promote business activities with roots in the needs of society with the aim of further evolving its business models.

| Examples of Optimized Business Models that Respond to Social Imperatives
1

Near Infrared–Based Food Contaminant Detection System that Will Improve Food Safety

Basic Themes

DIC is currently developing a near infrared–based food contaminant detection system in collaboration with Mitsui Kinzoku Instrumentations Technology
Corporation. The system combines dyes that emit infrared for plastics and a device that detects near infrared and is thus expected to be able to identify
SODVWLFFRQWDPLQDQWVZKLFKKDVWUDGLWLRQDOO\EHHQFRQVLGHUHGGLI¿FXOW7KDQNVWRQHDULQIUDUHG¶VVDIHW\²LWKDVPLQLPDOLPSDFWRQKXPDQKHDOWK²DQGWKH
ease with which it penetrates matter, the potential for application in the detection of contaminants in food products is seen as being high.
23Core and CategorySpecific Themes

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IRUXVHLQLQNMHWSULQWHGTXDQWXPGRWFRORU¿OWHUV 4'&)V %HFDXVHWKH\IDFLOLWDWHWKHPDQXIDFWXUHRIGLVSOD\VWKDWDUHPRUHSRZHUHI¿FLHQWDQGGHOLYHUDZLGHUFRORUJDPXWDQGYLHZLQJDQJOHWKDQH[LVWLQJXQLWV4'&)VDUHJDUQHULQJFRQVLGHUDEOHDWWHQWLRQIRUXVHLQQH[WJHQHUDWLRQGLVSOD\V*RLQJIRUZDUG
',&ZLOOFRQWLQXHSURPRWLQJGHYHORSPHQWZLWKWKHJRDORIPDUNHWLQJLQNVIRUXVHLQWKHSURGXFWLRQRILQNMHWSULQWHG4'&)VZKLFKZLOOMRLQWKH&RPSDQ\¶V
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Cell Culture Containers with Thermosensitive Polymer Coating for Use in Regenerative Medicine

DIC recently developed the Cepallet™ series of cell detachment–enhancing cell culture containers, which minimize damage to induced pluripotent
VWHP L36 DQGHPEU\RQLFVWHP (6 FHOOVGXULQJFHOOUHFRYHU\7KHFRQWDLQHUVUHSUHVHQWDSUDFWLFDODSSOLFDWLRQRIWKHUHVXOWVRIUHVHDUFKFRQGXFWHGLQ
FROODERUDWLRQZLWK$VVRFLDWH3URIHVVRU+LURIXPL6XHPRULRI.\RWR8QLYHUVLW\¶V,QVWLWXWHIRU)URQWLHU/LIHDQG0HGLFDO6FLHQFHVDQG0DVDWR1DNDJDZDOHFWXUHUDW.\RWR8QLYHUVLW\¶V&HQWHUIRUL365HVHDUFKDQG$SSOLFDWLRQ &L5$ 7KHFRQWDLQHUVZKLFKFDSLWDOL]HRQ',&¶VH[FOXVLYHV\QWKHVLVDQGFRDWLQJWHFKQRORJLHVPLQLPL]HGDPDJHWRFXOWXUHGFHOOVGXULQJUHFRYHU\LPSURYLQJFHOOVXUYLYDOUDWHVDQGWKHHI¿FLHQF\RIUHFRYHU\Themes that Demonstrate
Unique Capabilities| Anticipating Trends and Promoting Efforts to Identify and Cultivate Promising New Markets:LWKWKHDLPRIUHDOL]LQJVXVWDLQDEOHJURZWKRYHUWKHPHGLXPWRORQJWHUPWKH',&*URXSKDVLGHQWL¿HGSURPLVLQJQHZPDUNHWVDULVLQJIURPVRFLDO
imperatives in six key areas—resources, materials and energy; logistics and industrial equipment; electronic and electrical equipment; pharmaceuticals
and medical devices; general consumer products; and construction infrastructure—and is striving to assess its ability to cultivate demand in each. The
Group is also working to identify key technologies, as well as to discern technological issues that must be addressed, allowing it to accurately gauge
growth and technology development potential and determine which of these markets it will enter.

AQUACEPTER ®
Addressing the need to repair aging tunnels, roads, bridges and other infrastructure elements is an urgent priority. DIC
and the Hanshin Expressway Group recently developed an innovative agent for stopping water ingress that employs
AQUACEPTER ® ²DQHZPDWHULDOGHYHORSHGH[FOXVLYHO\E\',&²DQGDUHFXUUHQWO\FRQGXFWLQJ¿HOGWULDOVRQ+DQVKLQ([SUHVVZD\WXQQHOV,QDGGLWLRQWRH[FHOOHQWDGKHVLYHVWUHQJWKIRUVHDOLQJOHDNVWKHQHZDJHQWSURYLGHVÀH[LELOLW\WKDW
accommodates later concrete structural movement, making it an effective choice for preventing leaks not sealable using
FRQYHQWLRQDOPHWKRGV7KLVQHZORZRGRUHQYLURQPHQWIULHQGO\ZDWHUEDVHGDJHQWDOVRLPSURYHVFRQGLWLRQVIRUZRUNHUVDIC and the Hanshin Expressway Group will continue to promote active development efforts with the aim of helping extend
the life of infrastructure.

Sealing leaks

AQUACEPTER ®

| Global Efforts to Expand Business Domains and Cultivate Next-Generation Businesses
Once it has resolved provisionally to enter a new market that offers promise from a global value chain perspective, the DIC Group sets about clarifying
necessary technologies, systems and services, as well as key development themes. Focusing particularly on core businesses, the DIC Group is currently
WDNLQJDFWLYHVWHSVWRUHLQIRUFHDQGH[SDQGLWVSUHVHQFHLQNH\$VLDQPDUNHWVZKLFKDUHH[SHFWHGWRVHHVLJQL¿FDQWJURZWKJRLQJIRUZDUGZKLOHDWWKH
same time broadening its reach to include emerging economies in Eastern Europe, South America and the Middle East. The Group is also seeking todrive further growth by promoting active R&D initiatives, spearheaded by R&D units at its domestic sites, in collaboration with R&D bases in the PRC, the$VLD±3DFL¿FUHJLRQDQGWKH$PHULFDVDQG(XURSH WKH6XQ&KHPLFDO*URXS 
49̲ DIC Report 2018

New Technology Development and Value CreationWEB

http://www.dic-global.com/en/
csr/new-technology_development.html

Proposing Solutions that Leverage Elemental Technologies
SDGs Goals 9 and 12| Achieving Sustainable GrowthWith the aim of achieving its Color & Comfort by Chemistry management vision, the DIC Group is leveraging its basic technologies, including those in the areas of
optics and color, organic molecular design, polymer design and dispersion, as well as its core technologies in such areas as synthesis, compounding and formulation,
DQGVXUIDFHWUHDWPHQWWRGHYHORSKLJKYDOXHDGGHGSURGXFWVWKDWFRQWULEXWHWRDVXVWDLQDEOHVRFLHW\7KH*URXSLVDOVREXLOGLQJDSRUWIROLRRIQH[WJHQHUDWLRQSURGXFWVand new technologies by integrating technological resources originating across the Group, as well as actively promoting open innovation, to drive sustainable growth.

| 6SHFLÀF,QLWLDWLYHVDQG$FKLHYHPHQWV| $*OREDO5 '&RQÀJXUDWLRQWKDW8QGHUSLQV3URGXFW'HYHORSPHQW
7KH',&*URXS¶VJOREDO5 'EDVHVZRUNDVRQHWRSURPRWH5 ' 7KH',&*URXS·V5 '&RQÀJXUDWLRQ
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Global DIC Group
Technical
Technical Management UnitManagement Unit and R&D Management Unit cooperate withservices
DIC Graphics Corporation
R&D aimed at
Technology Planning
Technical divisions
the R&D components of DIC Group companies around the world. improving
Sun Chemical Group
Department
existing products
Fine Synthesis, Polymer, Adhesives,Intellectual
Dispersion, Polymer Processing,R&D aimed at
Qingdao DIC Finechemicals
Property Center
Coating & Applied Materials
7KHVHLQFOXGH',&*UDSKLFVWKH6XQ&KHPLFDO*URXS¶VUHVHDUFK developing
new products
Product Safety &Regulatory Group
centers in the United States, the United Kingdom and Germany;
Printing inks technical centers‒
Asia‒Paciﬁc/China
Analysis Center
Research aimed at
4LQJGDR',&)LQHFKHPLFDOVZKLFKFRQGXFWVFRPSUHKHQVLYH5 ' commercializing
Polymer technical centers‒
newly developed
Asia‒Paciﬁc/China
products
tailored to market needs in the PRC; printing inks technical centers
Solid compound technical centers
R&D Management Unit
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Basic research
Fine Chemical Technical Center‒Korea
Core developme
Core Value Research Center
projects
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Investigative
Algae research center
researchetc.
35& DQGVROLGFRPSRXQGWHFKQLFDOFHQWHUV $VLD±3DFL¿FUHJLRQCollaborative research, contracted research,
35&DQG*HUPDQ\ ,QDGGLWLRQDQDOJDHUHVHDUFKFHQWHULQWKH
participation in public research programs, others
8QLWHG6WDWHVFDSLWDOL]HVRQWKH*URXS¶VDFFXPXODWHGH[SHUWLVHDVUniversities and research organizations in Japan and overseas, national projects (Japan)
DSURGXFHURI6SLUXOLQDWRFRQGXFWFRPSUHKHQVLYHDOJDHUHODWHG
research in areas ranging from cultivation to practical application.

Basic Themes

The DIC Group is promoting the development and use of clean technologies. The Company is encouraging a shift toward materials with reduced environmental
impact—QRWDEO\HQHUJ\VDYLQJZDWHUEDVHGDQGVROYHQWIUHHPDWHULDOVDVZHOODVPDWHULDOVIRUWKHHOHFWURQLFVDXWRPRWLYHSDFNDJLQJDQGRWKHULQGXVWULHV—that
LPSURYHWKHHQYLURQPHQWDOSHUIRUPDQFHRIWKHSURGXFWVLQZKLFKWKH\DUHXVHGZKLFKLWKDVSRVLWLRQHGDVHQYLURQPHQWIULHQGO\SURGXFWVProcess Engineering
Research Center

Open Innovation
Promotion Group| Promoting Environment-Friendly Products
7KH',&*URXSLVFRPPLWWHGWRHIIHFWLYHVWHZDUGVKLSRIWKHSURGXFWVLWSURYLGHV )RUUHODWHGLQIRUPDWLRQSOHDVHVHHSDJH &RQVFLRXVDOZD\VRIWKHLPSRUWDQFH
RIHQVXULQJLWVSURGXFWVDUHHQYLURQPHQWIULHQGO\',&SURPRWHVWKHGHYHORSPHQWRISURGXFWVDQGQHZWHFKQRORJLHVWKDWDUHXVHIXOWRVRFLHW\DQGZRUNVWRLQFUHDVH
WKHZHLJKWLQJRIHQYLURQPHQWIULHQGO\SURGXFWVLQLWVSRUWIROLRE\UHGXFLQJWKHYROXPHRIKD]DUGRXVVXEVWDQFHVLWXVHVIRFXVLQJRQSURGXFWVWKDWDUHOHVVKD]DUGRXV
and products that facilitate recycling, and realizing safer production processes that generate less waste and use less energy. The Group has established internal rules
IRUGHVLJQDWLQJSURGXFWV³HQYLURQPHQWIULHQGO\´DQGZRUNVWRLQFUHDVHWKHZHLJKWLQJRISURGXFWVWKDWKDYHHDUQHGWKLVGHVLJQDWLRQLQWKHLUSRUWIROLR,Q¿VFDO\HDU
HQYLURQPHQWIULHQGO\SURGXFWVDFFRXQWHGIRURIDOOSURGXFWVSXWRXWE\',&DQGVXEVLGLDU\',&*UDSKLFV7KH*URXSDOVRVWULYHVWRPDLQWDLQDVROLGJUDVSRIODZVand regulations in different countries and territories, and of trends in environmental measures—thereby ensuring its ability to design products that comply with diverse
regulations governing the use of chemical substances in different markets—and conducts environmental assessments on a continuous basis.
From DIC Group

VOICE We are promoting the development of next-generation products that stabilize humanthermal environments, thereby reducing energy consumption and enhancing comfort.
,QWKHFRQVWUXFWLRQ¿HOGSURPRWLQJIDUUHDFKLQJPHDVXUHVWRUHGXFHHQHUJ\FRQVXPSWLRQLVDQXUJHQWFKDOOHQJH7KHLPSDFWRIOLYLQJHQYLURQPHQWVRQUHVLGHQWV¶KHDOWKLVDOVRDVXEMHFWRI
UHQHZHGVFUXWLQ\IXUWKHUXQGHUVFRULQJWKHLPSRUWDQFHRILPSURYLQJKXPDQWKHUPDOHQYLURQPHQWV:LWKWKHDLPRIDGGUHVVLQJWKLVLPSHUDWLYHZHGHYHORSHGDQGODXQFKHGDQHZVKHHWIRUP
SDVVLYHKHDWVWRUDJHPDWHULDO%HFDXVHWKHPDWHULDOLWVHOIDEVRUEVDQGUDGLDWHVKHDWLWKHOSVWRPDLQWDLQFRPIRUWDEOHLQGRRUWHPSHUDWXUHVUHGXFLQJHQHUJ\UHTXLUHGIRUKHDWLQJDQGFRROLQJ
Conventional heat storage materials liquefy at a certain temperature, making their use in construction problematic. We leveraged proprietary technologies to create a material in sheet form
WKDWRIIHUVVXSHUEZRUNDELOLW\7RHQFRXUDJHZLGHVSUHDGDGRSWLRQRIWKLVSURGXFWZHDUHFXUUHQWO\SURPRWLQJWKHFUHDWLRQRISHUWLQHQW-DSDQ,QGXVWULDO6WDQGDUGV -,6 DPRQJRWKHUV:HKDYH
DOVREHJXQVXEPLWWLQJWKHPDWHULDOIRUXVHLQSURMHFWVWRUHGXFHHQHUJ\FRQVXPSWLRQWKDWDUHFXUUHQWO\EHLQJVXSSRUWHGE\WKH0LQLVWU\RI/DQG,QIUDVWUXFWXUH7UDQVSRUWDQG7RXULVPDQGWKH
0LQLVWU\RI(FRQRP\7UDGHDQG,QGXVWU\,QDGGLWLRQZHDUHFXOWLYDWLQJDSSOLFDWLRQVLQVXFKDUHDVDVDJULFXOWXUHFLYLOHQJLQHHULQJFRQVWDQWWHPSHUDWXUHWUDQVSRUWDWLRQDQGDXWRPRELOHVHIIRUWV
that have begun to yield some very interesting data.
Manager, Coating & Applied Materials Technology Group 3, Coating & Applied Materials Technical Division Kenichi Fujisaki

DIC Report 2018 ̲50

Themes that Demonstrate
Unique Capabilities

Advanced Characterization
Research CenterCore and CategorySpecific Themes

Product Innovation Center

Harmony with the Community and Social Contributions

WEB

http://www.dic-global.com/en/csr/society/

Adding Color & Comfort to Lifestyles
SDGs Goals 3 and 4| Examples of Recent Initiatives
Visiting Science Lab Program

Basic Themes

In line with the Japanese government’s efforts to promote career education initiatives, as well as to help curb a decline in the
popularity of science among children, DIC and DIC Graphics conduct visiting science labs at public elementary schools. Throughthis program, the Group seeks to spark children’s interest in science and encourage them to realize the close relationship between
science and their everyday lives. Since launching this initiative in 2010, the two companies have conducted visiting science labs
at 35 schools for approximately 2,700 sixth-graders. In fiscal year 2017, this program won silver in the 2017 Education Support
Grand Prix, sponsored by Tokyo-based Leave a Nest Co., Ltd. Jury members gave high marks to the program’s use of know-how
and technologies unique to the DIC Group and its clear positioning as an initiative that enables the Group to contribute through its
business activities to the success of the SDGs. DIC pledges to continue offering this program in the years ahead.

Visiting science lab

Comment

This is a program that is closely linked to children’s everyday lives.
DIC and DIC Graphics began conducting science labs at our school in 2017. In addition to the employee who served as instructor, the
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safe and fun, resulting in a science lab that was a truly valuable experience for all participants. In addition to helping children realizethat studying science is useful in everyday life, the lab aligned with regular curriculum units. Another factor contributing to the sciencelab’s appeal is the fact that the school’s burden for preparation was minimal. From the perspective of career education, the value ofthese science labs is enhanced by the fact that they are conducted by a well-known company with close ties to our community.

Themes that Demonstrate
Unique Capabilities

Core and CategorySpecific Themes

Principal, Itabashi Municipal Kami-Itabashi No. 2 Elementary School Yukio Ozawa

Initiatives Led by the Central Research Laboratories
The Central Research Laboratories offer a variety of programs in such uniquely DIC topics as synthesis and chromatics to thestudents of local schools. In December 2017, students from Chiba Prefectural Sakura High School—a Super Science High School*—
were invited to take part in a visiting lab lesson conducted by staff of the Central Research Laboratories on the themes of “colorant
extraction using Spirulina” and “measuring rheologic behavior using mayonnaise and honey.” The young researchers who serve as
lab instructors also incorporated a career education component, taking time to talk to students about how they became interested inscience, their choice of university and the challenges and rewards of being a researcher.
* A designation awarded by Japan’s Ministry of Education, Culture, Sports, Science and Technology (MEXT) to senior high schools that implement curricula focused on the sciences andmathematics that goes beyond MEXT’VRI¿FLDOJXLGHOLQHVZLWKWKHDLPRIIRVWHULQJWKHQH[WJHQHUDWLRQRIWDOHQWHGHQJLQHHUVDQGVFLHQWLVWV

Visiting lab lesson

Kawamura Memorial DIC Museum of Art
The Kawamura Memorial DIC Museum of Art, located adjacent to the Central Research Laboratories in Sakura, Chiba Prefecture, was established in 1990 to publicly exhibit works of art
FROOHFWHGE\',&&RUSRUDWLRQDQGLWVDI¿OLDWHV,QWKHPXVHXPLVFHOHEUDWLQJLWVWKDQQLYHUVDU\7KHPXVHXP¶VH[WHQVLYHFROOHFWLRQVSDQVQXPHURXVJHQUHVHQFRPSDVVLQJZRUNVE\Rembrandt; Impressionists such as Monet and Renoir; modern European artists such as Picasso and Chagall; early modern, modern and postwar Japanese artists; and luminaries of late20th century American art, including Mark Rothko, Cy Twombly and Frank Stella. In addition to its standing exhibit from its permanent collection of more than 1,000 major works, the museum
stages special exhibitions several times a year that focus on pertinent literary works and other artifacts that evoke the cultural atmosphere at the time works were created to help visitors better
understand the collection. Another appealing aspect of the museum is its location on a lushly forested 10-hectare site alive with seasonalÀRZHUVDQGIROLDJHWKDWKDVEHHQRSHQWRWKHSXEOLFVLQFHWKHPXVHXP¶VHVWDEOLVKPHQWIn a move aimed at promoting relations with the local community and fostering local cultural activities, the Kawamura Memorial DIC Museum of Art hasestablished an annex gallery on the museum site that serves as an exhibition space for local amateur artists and is also made available to elementary and
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methods originated by the Museum of Modern Art in New York for teaching children about art. To date, a total of 150 schools and more than 10,000
children have taken part in the museum's educational programs, which are offered to entire classes led by elementary or junior high school teachers. This
Kawamura Memorial DIC Museum of Art
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Matching Gift Program
DIC has a matching gift program whereby it matches the total amount collected through an annual year-end fundraising drive spearheaded by its employees’ union. Funds raised
through the 2017 drive and matching gift program were donated to 22 children’s homes and facilities providing support for disabled individuals. In October 2017, the efforts of the
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51̲ DIC Report 2018

Communication with StakeholdersWEB

http://www.dic-global.com/en/
csr/stakeholder/

Promoting Disclosure and Communication
The DIC Group places a priority on communication with its stakeholders worldwide, as outlined in Article 7 of its Policy on
Corporate Governance.

Article 7 (Ensuring Appropriate Information Disclosure and Transparency)

Ties with employees

Ties with the media

Build trusting relationships. By
incorporating the demands ofcustomers, seek to develop
products that enhance customer
satisfaction.

Ensure appropriate disclosureand build trusting relationships
with shareholders andinvestors, encouraging both toevaluate DIC as an attractive
investment.

Operate in harmony with thecommunity and build positive
relationships with local
residents that will underpin
the long-term sustainabilityof operations.

Provide workplaces that are
conducive to job satisfactionand enable all employeesWRIXO¿OOWKHLUSRWHQWLDO2YHU
the long term, achieve true
diversity.

Deepen mutual
understanding throughe f f e c t i v e p u b l i c i t y,
advertising and othercommunications efforts.

Basic approach● Websites● Product pamphlets● Corporate profile DVDs
● DIC Report● Corporate PR film
● News releases● Television advertisements● Websites● Press conferences● Quarterly results● Websites● Site reports● &RUSRUDWHSUR¿OH'9'V● DIC Report● News releases● Television advertisements● DIC Plaza● Press conferences● Interviews with journalists● DIC Report● News releases● Television advertisements● Sales activities● Participation in● General shareholders’● Production facility tours● Participation in projects involving● Labor–management councils● Results presentations

Communications tools

Opportunities forcommunication

exhibitions

Ties with Customers

announcements●Yuka Shoken Hokokusho(¿QDQFLDOGLVFORVXUHGRFXPHQWUHTXLUHG
of listed companies in Japan)● Timely disclosure● Notice of Convocation of
the Annual General Meetingof Shareholders● Shareholder newsletters● &RUSRUDWHSUR¿OH'9'V● DIC Report● News releases● Television advertisements

meetings● Results presentations● IR conferences● IR meetings● DIC IR Day

collaboration among industrial
concerns, government bodies andacademic institutions● Participation in community events● Environmental monitoring(in-house newsletter)● Intranet● DIC Pocket Book LQKRXVH*URXSGDWD¿OH ● DIC Report● Corporate PR film
● News releases● Television advertisements● Global linkage● Branding questionnaire

for employees● Presentations on the DIC
Group Code ofBusiness Conduct● Sustainability presentations● Newspapers● Economic publications● Industry publications

Ties with the Media

Ties with Society

CITE Japan

Press conferences held
LQÀVFDO\HDU

Interviews withjournalists
LQÀVFDO\HDU

85

94

DIC’s display at Tokyo's
Itabashi Public LibraryinterPack2017$ZDUGFHUWL¿FDWHIURPWKH$OO-DSDQ&DOHQGDU&RPSHWLWLRQ

Ties with Shareholders
and Investors

5HVXOWVSUHVHQWDWLRQ )HEUXDU\

Ties with Employees

DIC IR Day (December 2017)

Results presentation for employees)HEUXDU\

Facility tour for the families of employees(Kashima Plant)
DIC Plazain-house newsletter

DIC Report 2018 ̲52

Core and CategorySpecific Themes

Ties with society

Themes that Demonstrate
Unique Capabilities

Ties with shareholders
and investors

Ties with customers

Basic Themes

The Company shall ensure transparency and fairness; and in order to gain the correct understanding and trustfrom stakeholders, shall timely and appropriately disclose information relating to matters such as the DIC Group’s
management philosophy, management policies, business plans, financial condition and sustainability activities.

)LQDQFLDO5HSRUWIRU)LVFDO<HDU
| Analysis of Results of Operations
Overview of Operating Results
While economic conditions worldwide recovered gradually in fiscal year 2017, ended December 31, 2017, economic
uncertainty, fluctuations in the financial and capital markets and the direction of oil prices, among others, continued to
warrant caution. Moderate recovery persisted in the economies of North America and Europe. A revival was seen in Asia.
Japan’s economy also continued to rally steadily.
,QWKLVHQYLURQPHQWFRQVROLGDWHGQHWVDOHVLQFUHDVHGWRELOOLRQUHÀHFWLQJPXOWLSOHIDFWRUVLQFOXGLQJ¿UPVKLSPHQWVOperating income advanced 4.2%, to ¥56.5 billion, as increased sales of high-value-added products and the progress of
cost reductions offset the impact of rising raw materials prices, among others. Ordinary income rose 2.1%, to ¥57.0 billion,
with contributing factors including higher operating income and an improved financial position. Net income attributable to
RZQHUVRIWKHSDUHQWFOLPEHGWRELOOLRQRZLQJWRDGHFUHDVHLQH[WUDRUGLQDU\ORVVDQGRWKHUIDFWRUV)LQDQFLDO5HSRUWIRU)LVFDO<HDU

(Billions of yen)

Change (%) Local currencybasis)<

)<

Net sales

751.4



5.1%

3.5%

Operating income

54.2

56.5

4.2%

3.9%

Ordinary income



57.0

2.1%

—

Net income attributable to owners of
the parent





11.0%

—

Note: 7KHH[FKDQJHUDWHVXVHGWRWUDQVODWHWKHUHVXOWVRIRYHUVHDV',&*URXSFRPSDQLHVIRU¿VFDO\HDUVDQG
respectively, are as follows:
Fiscal year 2017: ¥112.33/US$1.00 (average for the year ended December 31, 2017)
Fiscal year 2016: ¥109.96/US$1.00 (average for the year ended December 31, 2016)

Segment Results(Billions of yen)

Net sales

Operating income (loss))<

)<

Change(%)

Local
currencybasis)<

)<

Change(%)

Local
currencybasis

Printing Inks

365.2

373.7

2.3%

0.5%



17.4

-5.0%

-4.0%

Fine Chemicals



135.4

5.7%

3.5%

14.4

17.4

20.3%



Polymers



197.9

9.4%



19.6

19.6

-0.2%

-0.7%

Compounds

61.1

64.7





5.0

5.0

0.3%

0.9%

Application Materials

55.7

56.1

0.7%

0.4%

1.9

2.6

39.2%



Others, corporate and eliminations(39.7)



—

—

(5.1)

(5.5)

—

—

Total

751.4



5.1%

3.5%

54.2

56.5

4.2%

3.9%

Segment results in key markets are as follows.Year-on-year percentage changes in squared parentheses represent
increases or decreases on a local currency basis. Interregional transactions within the Printing Inks segment are included.
Accordingly, the aggregates of regional net sales and operating income figures for the Printing Inks segment differ from thefigures presented above.
53̲ DIC Report 2018

Printing Inks
■ JapanNet sales¥77.1 billion

Change-3.3%

Operating income¥3.9 billion

Change-22.5%

6DOHVRISDFNDJLQJLQNVEHQH¿WHGIURP¿UPVKLSPHQWV1RQHWKHOHVVRYHUDOOVDOHVLQ-DSDQGHFUHDVHGUHÀHFWLQJIDFWRUVVXFKDV
diminished demand for publishing inks and news inks.
Operating income fell sharply, owing to the aforementioned sales results and other factors.
■ The Americas and Europe

Net sales¥241.1 billion

Change3.6%[1.4%]¥9.5 billion

Change12.9%[16.5%]

Operating income$OWKRXJKGHPDQGIRUSXEOLVKLQJLQNVDQGQHZVLQNVZDQHGVDOHVLQ1RUWK$PHULFDZHUHÀDWZLWKFDXVHVLQFOXGLQJKLJKHUVKLSPHQWVRISDFNDJLQJLQNV,Q(XURSHVDOHVHGJHGXSDV¿UPVKLSPHQWVRISXEOLVKLQJLQNVDQGSDFNDJLQJLQNVFRXQWHUHGIDOOLQJGHPDQGIRUQHZVLQNV6DOHVLQ&HQWUDO
and South America rose, buoyed by robust shipments of packaging inks. As a result, overall sales in the Americas and Europe increased.
Operating income advanced, bolstered by the aforementioned sales results and rationalization measures, among others.

1HWVDOHVELOOLRQ&KDQJH

>@2SHUDWLQJLQFRPH ELOOLRQ&KDQJH

>@:KLOHVKLSPHQWVRISDFNDJLQJLQNVZHUHVROLGVDOHVLQWKH35&GHFUHDVHGKLQGHUHGE\IDFWRUVVXFKDVÀDJJLQJGHPDQGIRUSXEOLVKLQJLQNV
and news inks. In Southeast Asia, sales were pushed up by higher shipments of publishing inks and packaging inks. Sales in Oceania fell, withcauses including fading demand for news inks. Sales in India increased, bolstered by brisk shipments of publishing inks and packaging inks. For
these and other reasons, overall sales in Asia and Oceania rose.
Operating income declined, regardless of the aforementioned sales results, a consequence of rising raw materials prices and other factors.

Fine Chemicals
Net sales¥135.4 billion

Change5.7%[ 3.5%]2SHUDWLQJLQFRPH

ELOOLRQ&KDQJH

>@6DOHVRISLJPHQWVZHUHGRZQGHVSLWHDVWHHSLQFUHDVHLQVKLSPHQWVRIIXQFWLRQDOSLJPHQWVLQFOXGLQJWKRVHIRUFRORU¿OWHUVRZLQJWRÀDJJLQJ
GHPDQGIRURWKHUSLJPHQWV6DOHVRI7)7/&VURVHVXEVWDQWLDOO\UHÀHFWLQJIDYRUDEOHVKLSPHQWV7KHVHIDFWRUVVXSSRUWHGKLJKHUVHJPHQWVDOHV
6HJPHQWRSHUDWLQJLQFRPHZDVXSVLJQL¿FDQWO\XQGHUSLQQHGE\DQLPSURYHGSURGXFWPL[DPRQJRWKHUVPolymers
1HWVDOHVELOOLRQ&KDQJH

>@

Operating income¥19.6 billion

Change-0.2%[-0.7%]

Sales in Japan rose, bolstered by increased shipments of high-value-added products, polystyrene and other products. Sales overseas were up sharply, thanks to
JHQHUDOO\¿UPVKLSPHQWV)RUWKHVHDQGRWKHUUHDVRQVVHJPHQWVDOHVDGYDQFHG
1RWZLWKVWDQGLQJWKHLPSDFWRIULVLQJUDZPDWHULDOVSULFHVVHJPHQWRSHUDWLQJLQFRPHZDVÀDW)DFWRUVEHKLQGWKLVUHVXOWLQFOXGHGWKHDIRUHPHQWLRQHGVDOHVUHVXOWVCompounds
1HWVDOHVELOOLRQ&KDQJH

>@

Operating income¥5.0 billion

Change0.3%[0.9%]

Healthy shipments pushed up sales of PPS compounds. Steadily expanding shipments bolstered sales of jet inks. Owing to these and otherfactors, segment sales rose.
Segment operating income remained level. Reasons behind this result included the aforementioned sales results, which offset increases in
raw materials prices and costs associated with advance investments.

Application Materials
Net sales¥56.1 billion

Change0.7%[0.4%]2SHUDWLQJLQFRPH

ELOOLRQ&KDQJH

>@6HJPHQWVDOHVLQFUHDVHGZLWKFRQWULEXWLQJIDFWRUVLQFOXGLQJKLJKHUVKLSPHQWVRILQGXVWULDODGKHVLYHWDSHVDQGKROORZ¿EHUPHPEUDQHPRGXOHV
Segment operating income rose substantially, spurred by an improved product mix and efforts to reduce costs, among others.

DIC Report 2018 ̲54)LQDQFLDO5HSRUWIRU)LVFDO<HDU

■ Asia and Oceania

|Consolidated Financial Statements
Consolidated Balance Sheet As of December 31, 2016 and 2017

（Millions of yen）





（Thousands of U.S. dollars）*



AssetsCurrent assets
Cash and deposits

17,241



Notes and accounts receivable—trade215,369



0HUFKDQGLVHDQG¿QLVKHGJRRGV

90,010796,549

Work in process

9,461

9,053



Raw materials and supplies

53,605

521,336

Deferred tax assets

9,915

9,574



Other

21,374

23,340206,549()(10,763)()

424,976

256,603261,2212,311,690

Accumulated depreciation(164,511)()(1,493,611)

Buildings and structures, net

92,092

92,443

Machinery, equipment and vehicles

397,740

409,3623,622,673()()()66,34270,554624,372

7RROVIXUQLWXUHDQG¿[WXUHV59,652

63,336560,496

Accumulated depreciation(49,510)(52,207)(462,009)

10,142

11,129

Land

50,16950,307445,195

Construction in progress

7,915

7,244

64,106

226,660

231,677

2,050,239

Goodwill

501

199

1,761

Software





33,956

Other

3,563





Total intangible assets





67,115Investment securities

41,007





Deferred tax assets

36,996





1HWGH¿QHGEHQH¿WDVVHW





295,646

Other





Allowance for doubtful accounts()()(13,142)

Total investments and other assets

167,519

Total non-current assets

366,091







7,360,673

Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment)LQDQFLDO5HSRUWIRU)LVFDO<HDU

Buildings and structures

Accumulated depreciation
Machinery, equipment and vehicles, net

7RROVIXUQLWXUHDQG¿[WXUHVQHW

Total property, plant and equipment
Intangible assets

Investments and other assets

Total assets* Yen amounts have been translated, for readers' convenience only, at the rate of ¥113 to US$1, the approximate rate of exchange on December 31, 2017.

55̲ DIC Report 2018

Consolidated Balance Sheet（Millions of yen）





（Thousands of U.S. dollars）*

Liabilities
Current liabilities
Notes and accounts payable—trade94,392

117,199

1,037,159

Short-term loans payable

52,744

543,230

Current portion of long-term loans payable

43,647

27,677

244,929

Lease obligations



557

4,929

Income taxes payable

4,153

4,793

42,416

Deferred tax liabilities

322

399

3,531

Provision for bonuses

7,050

7,071

62,575

Other62,44747,509420,434

Total current liabilities

265,339

266,5902,359,204

Bonds payable

30,00050,000

Long-term loans payable

122,017

1,079,796

Lease obligations

4,394

4,045

35,796

Deferred tax liabilities

11,653103,124

1HWGH¿QHGEHQH¿WOLDELOLW\

22,774

201,540

Asset retirement obligations

1,334

1,329

11,761

Other

9,156

9,397

192,472

221,215

1,957,655







Capital stock

96,55796,557



Capital surplus

94,094

94,445Retained earnings

159,541



Treasury shares(1,213)()(16,177)

Total shareholders' equity

375,9423,326,920

Valuation difference on available-for-sale securities







Deferred gains or losses on hedges

()

(3)

(27)

Foreign currency translation adjustment()(46,462)()5HPHDVXUHPHQWVRIGH¿QHGEHQH¿WSODQV()(22,222)(196,655)

Total accumulated other comprehensive income(70,444)()()Non-controlling interests



255,062

Total net assets

307,017

343,951





7,360,673

Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income

Total liabilities and net assets* Yen amounts have been translated, for readers' convenience only, at the rate of ¥113 to US$1, the approximate rate of exchange on December 31, 2017.

DIC Report 2018 ̲56)LQDQFLDO5HSRUWIRU)LVFDO<HDU

Non-current liabilities

Consolidated Statement of Income

Years ended December 31, 2016 and 2017

（Millions of yen）

)LQDQFLDO5HSRUWIRU)LVFDO<HDU

Net sales
Cost of sales*URVVSUR¿W
Selling, general and administrative expenses
Freightage and packing expenses
Employees' salaries and allowances
Provision of allowance for doubtful accounts
Provision for bonuses
5HWLUHPHQWEHQH¿WH[SHQVHV
Research and development costs
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income(TXLW\LQHDUQLQJVRIDI¿OLDWHV
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on change in equity*DLQRQVDOHVRIVXEVLGLDULHVDQGDI¿OLDWHVVHFXULWLHVState subsidy
Gain on bargain purchaseTotal extraordinary income
Extraordinary loss
Loss on disposal of non-current assets
Severance costs
Early termination fee
Impairment loss
Provision of allowance for doubtful accounts
Loss on disaster
Total extraordinary loss
Income before income taxes and non-controlling interests
Income taxes—current
Income taxes—deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent（Thousands of U.S. dollars）*


179,543




5,361,142

12,05040,461
2,016

2,117
11,20654,730125,361

12,596

330
2,760
959
12,42756,206
127,135


111,469
370,416
2,920
24,425
109,973


575
401
3,266
607

7,031


447
4,069
−
2,019



3,956
36,009−
73,912

3,227
−

5,416
55,797

3,565
1,456


56,96031,549
25,257
69,690504,071

−
−
−


920

1,156
641
315
−
−
2,112

10,2305,673
−−

4,412
1,416
−
−
553
440


11,565767
12,332
37,564
2,797
34,767


951
376
234
−
−
4,243

10,517

13,90540,9242,321

23,735
3,327
2,071
−
−
37,549
93,071
123,053
362,159
20,540341,619* Yen amounts have been translated, for readers' convenience only, at the rate of ¥113 to US$1, the approximate rate of exchange on December 31, 2017.

Consolidated Statement of Comprehensive Income

Years ended December 31, 2016 and 2017

Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
5HPHDVXUHPHQWVRIGH¿QHGEHQH¿WSODQVQHWRIWD[
Share of other comprehensive income of associates accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of the parent
Comprehensive income attributable to non-controlling interests（Millions of yen）





37,56440,924362,159

1,609
(112)
()
6,266
(965)
()

2,590

979

1,563
(10,033)
50,95722,9201,619
41,752

450,947

23,7342,449


2,723


24,097* Yen amounts have been translated, for readers' convenience only, at the rate of ¥113 to US$1, the approximate rate of exchange on December 31, 2017.

57̲ DIC Report 2018

（Thousands of U.S. dollars）*

Consolidated Statement of Changes in Net Assets

Years ended December 31, 2016 and 2017
（Millions of yen）

Shareholders' equity

Balance at January 1, 2016

Capital stock

Capital surplus

Retained earnings

Treasury shares

Total shareholders’ equity

96,557

94,161137,071()34,767(5,911)(5)(4,712)
()34,767(19)−

Dividends from surplus
Net income attributable to owners of the parent
Purchase of treasury shares
Retirement of treasury shares
Change in treasury shares of parent arising fromtransactions with non-controlling shareholders
Net changes of items other than shareholders’ equity
Balance at December 31, 2016

(62)
96,557

94,094

Dividends from surplus
Net income attributable to owners of the parent(62)(1,213)

159,541(11,376)


(11,376)
(615)

(615)

Purchase of treasury shares
Change in treasury shares of parent arising fromtransactions with non-controlling shareholders
Net changes of items other than shareholders’ equity
Balance at December 31, 2017

(19)
4,717

351
96,557

94,445351()

375,942（Thousands of U.S. dollars）*

Balance at December 31, 2016
Dividends from surplus
Net income attributable to owners of the parent
Purchase of treasury shares
Change in treasury shares of parent arising fromtransactions with non-controlling shareholders
Net changes of items other than shareholders’ equity
Balance at December 31, 2017

Capital stock

Capital surplus

Retained earnings

Treasury shares

Total shareholders’ equity
000000
(100,673)
341,619
0(10,735)00(5,442)
(100,673)
341,619(5,442)

0

3,106

0

0

3,106

0


00

0(16,177)

03,326,920* Yen amounts have been translated, for readers’ convenience only, at the rate of ¥113 to US$1, the approximate rate of exchange at December 31, 2017.
（Millions of yen）

Accumulated other comprehensive income

Balance at January 1, 2016
Dividends from surplus

Valuationdifference on
available-forsale securities

Deferred gains
or losses onhedgesForeigncurrencytranslation
adjustment

Remeasurements
RIGHÀQHG
EHQHÀWSODQV

Total
accumulated
othercomprehensive
income



(73)

(29,925)(33,101)(59,411)

Non-controllinginterests

27,390Net income attributable to owners of the parent
Purchase of treasury shares
Retirement of treasury shares
Change in treasury shares of parent arising fromtransactions with non-controlling shareholders
Net changes in items other than shareholders’ equity
Balance at December 31, 2016
Dividends from surplus

Balance at December 31, 2017
()34,767
(19)
−
(62)

1,560


(114)
()

()()6,222()(11,033)(70,444)1,092

Net income attributable to owners of the parent
Purchase of treasury shares
Change in treasury shares of parent arising fromtransactions with non-controlling shareholders
Net changes in items other than shareholders’ equity

Total
net assets(9,941)
307,017(11,376)
(615)
351

2,626



(3)

2,164
(46,462)

4,657(22,222)9,631()340

9,971
343,951（Thousands of U.S. dollars）*

Accumulated other comprehensive income

Balance at December 31, 2016
Dividends from surplus
Net income attributable to owners of the parent
Purchase of treasury shares
Change in treasury shares of parent arising fromtransactions with non-controlling shareholders
Net changes of items other than shareholders equity
Balance at December 31, 2017

Valuationdifference on
available-forsale securities

Deferred gains
or losses onhedgesForeigncurrencytranslation
adjustment

Remeasurements
RIGHÀQHG
EHQHÀWSODQV

Total
accumulated
othercomprehensive
income46,442000(1,655)000(430,319)000()000()000

Non-controllinginterests

252,053
0
0
0

Total
net assets

2,716,965(100,673)
341,619(5,442)

0

0

0

0

0

0

3,106

23,239

(27)

19,150()41,212(196,655)


()3,009
255,062


* Yen amounts have been translated, for readers’ convenience only, at the rate of ¥113 to US$1, the approximate rate of exchange at December 31, 2017.

DIC Report 2018 ̲58)LQDQFLDO5HSRUWIRU)LVFDO<HDU

Shareholdersʼ equity

Consolidated Statement of Cash Flows Years ended December 31, 2016 and 2017

（Millions of yen）

)LQDQFLDO5HSRUWIRU)LVFDO<HDU

Net cash provided by (used in) operating activities
Income before income taxes and non-controlling interests
Depreciation and amortization
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Interest and dividends income(TXLW\LQ HDUQLQJV ORVVHVRIDI¿OLDWHVInterest expenses
Loss (gain) on sales and retirement of non-current assets
Impairment loss
/RVV JDLQ RQVDOHVRIVXEVLGLDULHVDQGDI¿OLDWHVVHFXULWLHV
State subsidy
Decrease (increase) in notes and accounts receivable—trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable—trade
Other, net
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investments in subsidiaries resulting in change in scope of consolidation
3XUFKDVHRIVXEVLGLDULHVDQGDI¿OLDWHVVHFXULWLHV
Purchase of investment securities
Proceeds from sales and redemption of investment securities
Payments for transfer of business
Proceeds from subsidy income
Other, net
Net cash provided by (used in) investing activities
1HWFDVKSURYLGHGE\ XVHGLQ ÀQDQFLQJDFWLYLWLHVNet increase (decrease) in short-term loans payable
Increase (decrease) in commercial papers
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from issuance of bonds
Redemption of bonds
Cash dividends paid
Cash dividends paid to non-controlling interests
Net decrease (increase) in treasury shares
Payments from changes in ownership interests in subsidiaries that
do not result in change in scope of consolidation
Other, net
1HWFDVKSURYLGHGE\ XVHGLQ ¿QDQFLQJDFWLYLWLHV
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period






32,444
373
1,540
149
(976)
(3,266)
3,227
4,412
−
−
()
(2,150)()()(2,775)79,3942,130(3,254)(15,766)
62,504
31,524345(720)
13(2,264)(4,069)
3,565
1,526
234
(315)
−
(7,070)(9,742)
(11,246)
()(12,294)
54,196



3,053(6,372)
115(20,035)(36,009)
31,54913,5042,071()−(62,566)()(99,522)
36,991(32,106 )()
479,611(6,505)
6,219(30,310)
455
(969)
(114)
−
(971)
376
(275)

(950)
(32,202)()
(32,192)
2,103(1,392)(515)(27,209)
()
465
()
−
662
()()75,752()
(12,319)()()(7,531)
4,115(2,991)−
(521,575)

30,364(4,000)30,069(75,576)
10,000()()(1,047)
(19)

9,272
−

()20,000−(11,376)(1,439)(615)


−396,664(424,973)
176,991−(100,673)(12,735)(5,442)−()(5,115)()()()
15,113
16,671(690)
11,375(5,653)

16,671
17,651(6,106)100,664(50,027)

147,531
156,204* Yen amounts have been translated, for readers' convenience only, at the rate of ¥113 to US$1, the approximate rate of exchange on December 31, 2017.

59̲ DIC Report 2018

（Thousands of U.S. dollars）*

Third-Party Verification

The DIC Group commissioned SGS Japan Inc. to conduct third-party verification of its data forgreenhouse gas emissions, discharge of industrial waste and number of occupational accidents (including
number of accidents leading to workdays lost).

DIC Report 2018 ̲60

110 Years of Achievement

DIC Group Milestones

1908
Established as

1925

1957

Begins production of organic pigments

Enters the market for helmets andother molded plastic products

Develops production method for organic pigments
and begins production for its own use, the first step inits evolution as a fine chemicals manufacturer.

Kawamura Ink
Manufactory
Established by Kijuro Kawamura
as Kawamura Ink Manufactory;
adopts the dragon as its
product trademark and begins
manufacturing inks.

1940
Dragon product trademark

Commences production ofwater-based gravure inks
Amid wartime restrictions on use of volatile oils, develops
water-based gravure inks—one of several achievementsthat would later facilitate expansion into synthetic resins.

Enters the plastic products business with the aim of becoming an
integrated manufacturer with operations encompassing productionof everything from plastic raw materials to finished products.

1962

Changes Company nameto Dainippon Ink and Chemicals
Embarks on a new chapter in its history by absorbing
Japan Reichhold Chemicals Inc., and changes Company
name to Dainippon Ink and Chemicals Incorporated (DIC).

1952

Makes full-scale entry into thesynthetic resins business
Establishes Japan Reichhold Chemicals Inc., then thesecond-largest joint venture with an overseas firm in thehistory of the Japanesechemicals industry,
and makes a full-scale
entry into the synthetic
resins business.

DIC’s previous
corporate symbol

1968
DIC’s founder, Kijuro Kawamura

Commences sales of the
DIC Color Guide ®

Reichhold Chemicals’
San Francisco plant

Launches the DIC Color Guide®, which becomes the defacto standard for color selection in numerous industries,
bolstering recognition of the DIC name.

1915

Commences production of offset printing inks
Becomes one of the first companies to conduct
research in the area of offset printing inks and succeeds
in producing a viable product in only one year.

Diversiﬁes operations by building onbase in printing inks, organic pigments
and synthetic resins

1990

1995

Declares intention to uphold theprinciples of Responsible Care

Becomes signatory to the
Responsible Care Global Charter

Located in Sakura,Chiba Prefecture,adjacent to the Central ResearchLaboratories; established to exhibit works
of art collected by DIC and DIC Group
companies; now called the Kawamura
Memorial DIC Museum of Art.

Takes an active role in the Responsible
Care movement since the start as one of
74 founding members of the Japan
Responsible Care Council (JRCC);
reinforces efforts to, among others, reduce
negative environmental impact ofoperations and lower energy consumption.

Signs the CEO’s Declaration of Support for
the Responsible Care Global Charter,
established by the International Council of
Chemical Associations, as befits its status asa member of the global community of finechemicals manufacturers.

Opens Kawamura
Memorial Museum of Art

1973

Establishes theEnvironment and Safety
Response Department
Creates department under the directsupervision of DIC’s president to oversee
safety and environmental initiatives(today’s Responsible Care Department);
creates Environment and Safety
Management Regulations and Interim
Emergency Countermeasures Department
and begins promoting decisive efforts,
including the implementation of plantsafety inspections.

61̲ DIC Report 2018

Actively introduces technologies
from overseas and promotes
further diversification

2006

Certiﬁcation of DIC as signatory to
the Responsible Care Global Charter

Sustainability Initiatives

Promotes expansion of
printing inks business

DIC Color Guide ®

1970

1999

Establishes Crown Zellerbach Packaging Materials Japan
Co., Ltd., in a joint venture with Crown Zellerbach
Corporation of the United States and Nippon Kakoh Seishi
Co., Ltd., and enters the multilayered films business.

Establishes presence in India, Central and South America
and elsewhere by acquiring the Coates Group fromTOTALFINA S.A., France’s largest oil company.

Enters the multilayered films business

2008

1973

Enters themarket for LCs
Develops revolutionary
h i g h - p e r f o r m a n c e,
long-lasting nematicLCs, commencing its
evolution into one of
the world’s foremost
manufacturers of LCs.

Acquires Coates, the printing inks
division of France’s TOTALFINA

Changes Company nameto DIC Corporation
Marks centennial anniversary by changing Company name to
DIC Corporation and adopting a new corporate symbol.

2015

Completes
reconstruction of
corporate
headquarters in
Nihonbashi
In May 2015, completes thereconstruction of its corporate
headquarters—the DIC
Building—in Nihonbashi,Tokyo, the role of which was
expanded to include oversightof the global DIC Group.

DIC Building

2016

Launches DIC108 medium-term
management plan

Nematic LCs

Sets forth a growth scenario aimed at realizing sustainable growthand outlines what DIC must do between now and fiscal year 2018.

1986

Acquires the graphic arts materials division of
Sun Chemical Corporation of the United States
Becomes world’s largest
manufacturer of printing
inks in terms of market
share and a leading namein the graphic arts materials
business.

DIC’s new corporate symbol

2016

Introduces branding program

2009

Establishes DIC Graphics Corporation
In October 2009, establishes a joint venture with Dai Nippon Printing
Co., Ltd., subsidiary The Inctec Inc. and integrates its domestic
printing inks business with the printing inks business of The Inctec.

Sun Chemical’s headquarters

Introduces new branding
program based on theGroup’s “Color & Comfort”
brand slogan, which sets
f o r t h t h r e e c o r p o ra t evalues, and in Octobera i r s a new television
advertisement.

Brand advertisement for television

2010
1999

Succeeds in developing 100% soybean
oil–based printing ink
Amid rising awareness of environmental issues, develops
Japan’s first organic solvent-free sheetfed offset ink.

Seeks to advance globalization ofcore businesses and diversify into new areas

Develops groundbreaking series ofgreen pigments for LCD color filters
Develops the G58 series of green pigments for use in color filters for
LCDs, which deliver marked increases in brightness and contrast
compared with previous products and contribute substantially to
reduced energy consumption by LCDs.

Begins promoting CSR initiatives;
identifies fulfilling its responsibilities as amember of society through its businessactivities and contributing to the evolutionof society as the cornerstones of CSR.

Concludes capital and business alliance with Taiyo Holdings Co., Ltd.,
one of the world’s leading manufacturers of solder resist for PWBs.

Prepares for a new phaseof growth

2010

2014

In December 2010, becomes a participant in
the United Nations Global Compact (UNGC),
with the aim of maintaining its reputation asa socially responsible corporate entity.

Clarifies its overall policy of achieving sustainability
in a manner that takes into account, among others,
the environment, ecosystems and socioeconomic
issues, and changes the designation used across its
program from “CSR” to “sustainability.”

Changes designation to“sustainability”

In-house poster promoting sustainability initiatives

Launches CSR programEnters capital and business alliancewith Taiyo Holdings

Takes steps to advance environmental
protection and expands global presence

Joins United Nations
Global Compact

2007

2017

2015

Selected for inclusion in the
Dow Jones Sustainability
Indices Asia Pacific Index
Included for the first time in the DJSI
Asia Pacific Index, a global family of
indices for socially responsible investing
and a benchmark of global sustainability.
Included again in 2016.

DIC Report 2018 ̲62（Contact）

Corporate Communications Dept.
Sustainability Dept.
DIC Building, 7-20, Nihonbashi 3-chome, Chuo-ku, Tokyo 103-8233, Japan
Tel: +81-3 - 6733 - 3034

Fax: +81-3 - 6733 - 3038

http://www.dic-global.com/en/

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Innovation through Compounding
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