KURITA WATER INDUSTRIES LTD. Integrated Report 2023
Pioneering “new value for water”

Pioneering “new value for water”

Nakano Central Park East, 4-10-1 Nakano
Nakano-ku, Tokyo 164-0001, Japan
Tel: +81-3-6743-5000

KURITA WATER INDUSTRIES LTD.

https://www.kurita.co.jp/english/

Fiscal year ended March 31, 2023

Integrated Report 2023

Contents

Section 1:

Kurita Group Overview

Section 2:
Kurita Group
Business Strategy

Section 3:
The Kurita Group’s
Businesses

Section 4:
The Platform for
Value Creation

Editorial Policy
2 History of Value Creation
4 Kurita Group Philosophy System and Materiality
6 Kurita’s Value Creation Story
8 Business Fields: Diverse Points of Contact with Sites
10 Kurita’s Solutions and Business Models
12 Management Capitals
13 Performance

The Integrated Report features the Kurita Group’s vision for the medium to long term, as well as its management strategies,
business model, and management foundation for achieving this vision. The content is intended to increase the Company’s
corporate value by covering our dialogues with stakeholders, including shareholders and investors.

Organizations Covered
Kurita Group (Kurita Water Industries Ltd. and Consolidated Subsidiaries)

Period Covered
Fiscal 2023 (April 1, 2022 to March 31, 2023)

14 Interview with the President
20 Review of Previous Medium-Term Management Plan
Maximize Value Proposition 2022 (MVP-22)
22 Medium-Term Management Plan
Pioneering Shared Value 2027 (PSV-27)
26 Financial and Capital Strategy
30 Sustainability Strategy
32 CSV Business34 Interview with Corporate Officer Responsible for Sustainability

36 Electronics Industry Segment
36 Electronics Industry Division
38 Precision Cleaning Division
39 Topics
40 General Industry Segment
40 Regional Management Division
43 Industrial & Social Infrastructure Division
44 Engineering Strategy
46 Quality and Safety initiatives

48 Human Resources Strategy
56 Innovation Strategy
58 Intellectual Property Strategy
60 Digital Strategy
62 DX Initiatives
64 Environmental Improvement Activities
66 Initiatives to Address Climate Change
68 Compliance
70 Risk Management
74 Respect Human Rights
75 Corporate Governance* Some content includes initiatives that fall outside of this period.

Supplementary Information
In accordance with GHG Protocol standards, figures for the fiscal year ended March 31, 2020-22 have been revised to include
emissions from companies integrated through M&A in recent years in CO2 emissions since the target base year, and to reflectrevisions to the calculation method for Scope 3 emissions to adjust for price and currency fluctuations (relevant sections: P12
Energy Consumption, P66 Metrics and Targets).

Information Disclosure System on the Company’s Website

Financial Information

Non-Financial Information
Sustainability
https://www.kurita.co.jp/english/sustainability/
index.html

Investor Relations
https://ir.kurita.co.jp/en/index.html

MD&A and Consolidated Financial Statements
https://ir.kurita.co.jp/en/reports/financial_statements/index.html

Sustainability Reporthttps://www.kurita.co.jp/english/csr/
download/index.html

Financial Data
https://ir.kurita.co.jp/en/financial_information/index.html

ESG Data
https://www.kurita.co.jp/english/csr/csr_
data/index.html
Corporate Governance Reporthttps://ir.kurita.co.jp/en/corporate_
governance/governance_policies/index.html

Integrated Report

Copyrights and Trademarks, etc.

Section 5:

Corporate & Financial
Information

86 Directors, Executive Officers, and Corporate Officers
88 11-Year Summary
90 Group Network
92 Stock Information
93 Corporate Data

Our company or our licensers hold the copyrights for all the materials posted in this report. You may not use them beyond the range of use
legally permitted for private use, etc.: you cannot, for example, copy, process, transfer, or distribute them without consent from the respective
copyright holders.
Trademarks (products, services, logos) used in this report belong to the Company or to owners who have approved the Company’s use of
the trademarks.

Disclaimer

This report contains forward-looking statements from Kurita Water Industries Ltd. and its consolidated subsidiaries pertaining to plans andstrategies. These forward-looking statements are based on currently available information, and actual results may vary significantly from theforward-looking statements contained in this report due to a range of variable factors.

Kurita Water Industries Ltd. Integrated Report 2023

1

Section 1:

History of Value Creation

1986

2002

Deployed precision tool cleaning services

Kurita Group Overview

Launched ultrapure water supply business

2022

Established “Kurita Innovation Hub” toaccelerate innovation

Founded in 1949 to sell water treatment chemicals for boilers, the Kurita Group started out providing value to customers
by supporting the safe and efficient operation of their facilities. Since then, the Group has steadfastly focused on providing

1991

environment. The Group will continue to build on this progress by providing stakeholders with new value, aiming to realize

Launched soil remediation services

its corporate philosophy, “Study the properties of water, master them, and we will create an environment in which nature

Kurita Group Overview

this value to customers, contributing to the development of industry and society by solving issues related to water and the2003

Achieved 100% wastewater reclamationand humanity are in harmony.”

1962

Founded as a company in the Water Treatment
Chemicals business (boiler water treatment
chemicals) in Kobe

1975

Listed stock on the First
Section of the Tokyo Stock
Exchange and the Osaka
Securities Exchange

1994

Established a water treatment facilities
operation and maintenance subsidiary
Established first overseas subsidiary in
the Water Treatment Chemicals businessAwarded Japan’s largest seawater
desalination plant order at thetime, in an area affected bychronic drought

Kurita Group Business Strategy

1949

2015

Commenced the ultrapure water supply
business in South Korea

1965

Expanded into process
treatment chemicals

1961

1973

Entered the electronics industry

Launched reclaimed water supply service,collecting and purifying various types ofwastewater from factories to be reused in
manufacturing processes

Established a subsidiary in
Singapore as the regionalbase in Southeast Asia for
the Water Treatment
Chemicals and Water
Treatment Facilities
businesses

The Kurita Group’s Businesses

1958

Expanded into maintenance services

2018

1978

Listed stock on the Second Section of
the Tokyo Stock Exchange and the
Osaka Securities Exchange

1951

Entered the Water Treatment
Facilities business

Established the corporate philosophy

Net sales

Expanded into
engineeringcleaning services

1960

1970

Post-War Recovery Period (1949–1954) /High Economic Growth Period (1954–1973)

2

Kurita’s founder developed an innovative business modelthat combined optimal treatment and effect verification
based on data with the experience-based treatment that was
the mainstream approach to boiler water treatment in Japan
at the time. The principle of “Providing the unique value that
only Kurita can create” became the driving force for realizing
the model, and it lives on today in the Kurita Group’s DNA.
Against the background of development in Japanese industry,
the Company established the three functions of water
treatment chemicals, water treatment facilities, andmaintenance services. By supporting the steel, pulp andpaper, and petrochemical industries with water treatment
solutions, the Company achieved steady growth.

Kurita Water Industries Ltd. Integrated Report 2023

1980
Stable Growth Period(1973–1991)

Development as
an Environmental
Company and Establishinga Position in the Field ofWater Treatment forElectronics Industry

1990
Information Society
Development Period (1991–1999)
As areas all over Japan experienced worsening pollution
issues accompanying economic growth, Kurita made its
mark as an environmental company by working to solve
pollution due to industrial and household wastewater.
In the 1980s, Kurita established a firm position as aprovider of water treatment solutions for the electronics
industry by meeting the industry’s growing demand foradvanced water treatment with ultrapure watertechnology. In 1989, marking its 40th anniversary, Kurita
formulated the current corporate philosophy. It shared
its mission of creating shared value with society in thefields of water and environment, and expanded its
business to include soil remediation.

2000

2010

2020

Period of AI and IoTAdvancement (1999–)

New Business Model
Deployment and Global
Business Expansion

In 2002, as the electronics industry continued todevelop further with advances in IT, Kurita launched a
new service business in the form of the ultrapure watersupply. Subsequently, the Company continued tochange its business model, creating solutions toaddress a range of customer issues from theperspectives of saving water, reducing greenhouse gas(GHG) emissions, and recycling waste into resources
and reducing resource inputs. The Company has also
expanded globally, supported by the use of M&A.

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

Kurita Establishes
the Spirit and Businessthat Form its Foundation

Pushing ahead with M&A• Used M&A in Europe and North America and established a global
business structure anchored by four regions – Japan, Asia, North andSouth America, and EMEA – to support sustained growth• Acquired distinctive technologies in precision tool cleaning, RO
membrane services, and the digital field

The Platform for Value Creation

1989

1953

1950

2015–

3

Kurita Group Overview

Kurita Group Philosophy System and Materiality

The Kurita Group’s Materiality

The missions that the Kurita Group will fulfill in society into the future, its medium- and long-term visions, and its ways of

To achieve its corporate vision, the Kurita Group identifies key issues for each medium-term management plan based on

thinking and values as the foothold for achieving them are stipulated as the Kurita Group Philosophy System.

global challenges related to sustainability, defines them as the “Kurita Group’s Materiality,” and sets metrics and targets toaddress them.

Corporate Philosophy

Materiality Identification Process

Study the properties of water, master them, andwe will create an environment in which nature andhumanity are in harmony

Step 1

1. Creating new functions and value for water through a deep andfar-reaching exploration of the essential properties of water.
2. Winning the trust of our customers and society with uniquesolutions that capitalize on our diverse technologies.

Kurita comprehensively selects sustainability issues across 37 themes as materiality candidates,
referencing international rules*1, laws and regulations, disclosure standards*2, and issues identified
through stakeholder engagement*3.
*1 International rules: SDGs, Ten Principles of the UN Global Compact, OECD Guidelines for Multinational Enterprises, World Economic Forum’s
Global Risks Report*2 L aws, regulations and disclosure standards: GRI Standards, GHG Protocol, SASB Standards, EU Taxonomy, SFDR, CSRD, TCFD, TNFD, etc.
*3 Stakeholder engagement: Responses to CSR procurement surveys, results of supplier surveys, results of employee engagement surveys,
information meetings for shareholders and investors, responses to ESG surveys, social contribution activities, etc.

3. Contributing to the realization of a sustainable society by leveraging
our mastery of water to create shared value with society.

Creation ofMateriality
MatrixVisionPioneering “new value for water“ to contribute to
the realization of a sustainable society.

*4 E&S Committee is the former name of the current Sustainability Committee.

1. In seeking to realize its corporate philosophy, Kurita Group
creates shared value with society through its business, addressing
water resource issues, contributing to a decarbonized society andbuilding a circular economy.

Step 3
Confirmation of
Adequacy and
Selection ofMateriality

2. K urita Group creates new value by leveraging knowledge
accumulated from a broad array of frontline sites (Gemba) toaddress social issues.

For more information, see the Sustainability section on our website.
https://www.kurita.co.jp/english/sustainability/index.html

ValuesElevate and connect
expertise

Our solutions are rooted in a
deep understanding offrontline site (Gemba) issues
and information. We maximize
customer value while also
seeking to further elevate ourexpertise in water.

We strive to elevate ourknowledge of water and theenvironment, which are
precious. Innovation and thecreation of new value are
generated by connecting thediverse and ever moresophisticated knowledge
accumulated by all.

Exceed expectations
Our desire to challenge
ourselves is driven by ouraspiration to serve humanity.
We always push ourselves todeliver results that exceed
expectations. We build trustwith our customers throughserial success.

Maintain unwavering
integrity
We engage sincerely with all of
our stakeholders*. We fulfil
our responsibilities to the
future through our singleminded pursuit of solutions tosocial issues.
* Our customers, business partners,
shareholders and investors, society atlarge and our colleagues

Kurita Group Philosophy System https://www.kurita.co.jp/english/philosophy_vision/index.html

4

Kurita Water Industries Ltd. Integrated Report 2023

Kurita Group’s Materiality in the medium-term management plan, "Pioneering Shared Value 2027"

Shared value themes olve issues related to water resources
S
Contribute to the realization of a decarbonized societyContribute to building a circular economy society

Basic themes evelop and disseminate innovative products, technologies,Dand business models
Strategic development and utilization of human resources
Provide highly safe and quality products and services
Conduct business activities respecting human rights
Conduct fair business activities

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

Deepen understanding offrontline sites (Gemba)

The Platform for Value Creation

3. Kurita Group elevates and refines its technology and humanresources to be an indispensable partner to our customers,
swiftly providing unprecedented technology and services.

Materiality candidates selected in Step 2 were submitted to the Executive Committee and then to theBoard of Directors for input. The committee responsible for reviewing the medium-term management
plan, which is mainly comprised of members of the Executive Committee, then confirmed the adequacyof the materiality candidates in parallel with the formulation of the medium-term management plan,
finalized the Group’s eight material issues and categorized them into two: “basic themes” that should
serve as the foundation for management and business activities, and “shared value themes” that lead tothe creation of shared value with society. These material issues were then approved by the Board of
Directors as the “Kurita Group’s Materiality,” replacing the Group’s existing “CSR Policy.”

The Kurita Group’s Businesses

E&S Committee*4 members, External Directors, Audit & Supervisory Board members, and the E&S
Committee*4 Secretariat were surveyed to assess the degree of positive and negative impact (probability
and scale of impact) from two perspectives:(1) Impact of sustainability issues on the Kurita Group’s corporate value(2) Social and environmental impact of the Kurita Group’s initiatives in response to sustainability issues
The results of the survey were organized in a matrix along two axes: (1) above on the X-axis/horizontal
axis, and (2) above on the Y-axis/vertical axis. Themes with a significant impact in both the X and Y axes
were selected as materiality candidates. The candidates were grouped into seven main themes and fivesub-themes covering common issues in multiple areas of materiality.

Step 2* The corporate philosophy was set out in 1989 to mark the 40th founding
anniversary of the Company.
* T he Kurita Group Philosophy System clearly states that all of the Group’s
activities are aimed at achieving the Corporate Philosophy.

Kurita Group Business Strategy

Identification of
Sustainability
Issues

Kurita Group Overview

Kurita Group Philosophy System

5

Kurita Group Overview

Kurita’s Value Creation Story

We then deliver this predicted value to create shared value (CSV) between customers and society, bringing positive

We gather together these issues and the information we obtain from the sites, and accumulate them as our store of knowledge.

change to industry and the world. In turn, we generate profits appropriate for the value we have created. With theBy applying this knowledge, we can better understand the true issues that customers face and offer them optimal solutions,trust we have earned from our customers and society, we will have the opportunity to work on even more sites

predicting the value that we can share with customers.

and acquire new knowledge.

Kurita Group Overview

At the Kurita Group, we provide solutions to constantly evolving water-related issues at sites around the world.

The Kurita Group’s Materiality (Shared value themes, Basic themes)
Medium-Term Management Plan Pioneering Shared Value 2027 (PSV-27)
Management Capitalof the Kurita Group

Advances in Digital
Technology andInnovation
Acceleration

Heightened Safety
Awareness

Manufactured Capital• Property, plant andequipment• Global network of
production sites
Natural Capital• Water intake• Energy consumption
Social and
Relationship Capital• Inclusion in ESG Indexes• Corporate citizenshipinitiatives, cooperation
with externalorganizations• Supply chain• ISO certification

Addressing water-related
issues faced by diverse
industries and society inan agile manner

Water knowledge

Operation ofWide-Ranging
Businesses

Information, data andexperience related towater treatment inindustry and society

Integrating water treatment
chemicals, water treatment
facilities, maintenanceservices and related
businesses

Diverse Solutions
Optimized for thecharacteristics of eachindustry and region as
well as social issues

16%• Return on equity (ROE)

Thanks to personnel
who address social
issues in a sincere
manner

12% or more• Return on Invested
Capital (ROIC) 10% or more

Changing society
and industries with
Water knowledge

Maximizing
Customer
Value

High Profitability
and Sustainable
GrowthMain Non-Financial
Indicators

DiverseBusiness Models• Amount of water savings
through CSV business
300 million m3

Based on accurate
prediction of value
provision• Avoided GHG emissions
through CSV business
1,500 thousand t• Rate of increase in resource
recovery or reduction of
resource input through CSV
business
300%

The Platform for Value Creation

Disruption to Supply
ChainsIntellectual Capital• R&D (personnel, bases,
investment)• Number of patents held
• Synergies generated
through global crossorganizational projects

Identifying
True Issues
Technology
Development
Capability¥450.0 billion• Businessprofit margin

The Kurita Group’s Businesses

Shortage andDestabilization of
Resources

Human Capital• Diverse workforce• Net sales

Corporate Philosophy

Damage to Social
Infrastructure
Caused by Climate
Change and Shifts in
Energy Policy

Financial Indicators
Financial Capital• Equity attributable toowners of parent• Interest-bearing debt

Corporate Vision

Fresh Water Scarcity
and Uneven Water
Distribution

PSV-27
Management Targets	Please see page 12
for more details.

Kurita Group Business Strategy

Major Trends Facing
the Kurita Group(compared to the fiscal year ended
March 31, 2023)* Please see page 30 for all nonfinancial indicators.

Corporate & Financial Information

Diverse Pointsof Contact withSites

Winning the trust of customers and society and building a sustainable society

Values6

Kurita Water Industries Ltd. Integrated Report 2023

Kurita Water Industries Ltd. Integrated Report 2023

7

Kurita Group Overview

Business Fields: Diverse Points of Contact with Sites

Kurita has a diverse customer base across different industries and regions, supporting the Group’s business stability. The
Group also accumulates “water knowledge” from these customers – one of its competitive advantages – which is shared
Kurita Group Overview

efficiently within the Group to deliver optimal solutions that address customers’ needs and issues.

Contact points with diverse industries

Diverse Regions
Net Sales by Region

Waste treatment plants

Kurita Group Business Strategy	Japan	Asia	North & South America
	Europe, Middle East and Africa (EMEA)

9%Water puriﬁcation &sewage treatment plants

3% 1%
15%

17%

Public facilities

Semiconductors

Food & beverages plants

51%¥344.6 billion¥178.1 billion

Paper plants

81%

23%

Electronics industry
Commercial facilities

The Kurita Group’s Businesses

Electronic
components

FY ended
March 31, 2023
Net sales

FY ended
March 31, 2014*
Net sales

FPDs

Automobile plants
Pharmaceuticals* Regional breakdown of consolidated net sales before acquisition of European business in 2015

(Billions of Yen)

344.6

Oil reﬁning & petrochemicals plants
Water parks

Steel plants

Power plants

257.3

264.8

267.7

161.2

161.7

161.4

288.2
176.0

The Platform for Value Creation

Households
Oﬃce buildings

159.4

66.5
8.3
21.3
2019

52.5

48.5

31.5

39.2

19.1

18.7

24.5

2020

2021

2022

46.4

60.2
29.5
2023

Corporate & Financial Information

78.9
58.0

(Fiscal years ended March 31)

8

Kurita Water Industries Ltd. Integrated Report 2023

Kurita Water Industries Ltd. Integrated Report 2023

9

Kurita Group Overview

Kurita’s Solutions and Business Models

Kurita uses a wide range of business models related to water and the environment to help customers solve issues acrossall areas of their operations, anywhere there is a need for water in their factories.

Maintenance Services and Operation

Water Supply Services
Kurita Group Overview

Social and Industrial Issues and Solutions
Social and industrial issues
Solutions

Climate change(extreme weather andnatural disasters)

Greenhouse gas (GHG) emissions

Production
process

Utilityequipment

Yield increase

Labor and personnel saving

Water saving

Energy saving

Facility preservation andextension of useful life

Business continuity

Water treatment
systemRecovery of marketable substances

Wastewater
treatment system
Wastewater
reclamation system

Soil andgroundwater

Waste material

Water
purification

Rivers, lakes,
and sea areas

Tight capacity oflandfill sites

We provide aftersales follow-up services for water treatment facilities to maintain and improve facility performance and prevent
problems from occurring, contributing to stable operations at
customer plants. We also manage the operation of water treatment facilities at customer sites, helping to ensure reliable supplies of water and stable operations, while prolonging the usefullife of facilities.

Water Treatment Chemicals

Kurita constructs, operates and maintains proprietary water treatment systems at customer sites, ensuring stable long-term supplies of water. This approach reduces the burden of investment
and system operation for customers and is available for ultrapure
water supply business and a range of other services that can be
tailored to their needs.

Precision Tool Cleaning

Kurita Group Business Strategy

Industrial water
Tap water andsea water

Recycling

Reduce GHG
emission

Factories in various industries

Water resource depletion

Resource depletion

Waste reduction

Soil and groundwater pollution
Soil and groundwater remediation
The Kurita Group’s Businesses

Water Treatment Facilities

Kurita’s water treatment chemicals help customers improve productivity and prevent issues before they occur. The chemicals areused in a wide range of applications, including utility equipment
such as boilers and cooling towers, water treatment facilities, andproduction processes in factories, as well as in air conditioning
systems for office buildings and commercial facilities.

Engineering Cleaning

Tools and jigs used by customers to manufacture semiconductors
and FPDs are sent to Kurita facilities, where they are analyzed andcleaned to remove deposits from the fabrication process. This
tool cleaning service can also include tool upgrades, helping customers to maintain and improve productivity.

Soil Remediation

Water Purity and Related Applications
Tap water

Pure water
RO membrane-treated water

Ultrapure waterIon exchange-treated water

Theoretically pure water

Water for mixing
drinksMechanical parts
cleaning
Mechanical parts
cleaning

10

Kurita Water Industries Ltd. Integrated Report 2023

Cosmetic raw materials
Water supply forhigh-pressure boilers

Humidification air
conditioning
Low purity

Electronic components
cleaning

Water for pharmaceuticaland medical use
High purity

Kurita provides engineering cleaning services using chemicals,
high-pressure water and other methods to clean accumulated
deposits from boilers, heat exchangers and pipes, ensuring thatlarge-scale plants such as industrial complexes and electric power
plants continue to operate safely and efficiently.

Kurita conducts pollution assessments and remediation of soil
and groundwater polluted by harmful substances. Using various
decontamination methods, Kurita helps customers to mitigate therisk of soil pollution.

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

Applications* Diagram shows
example applications
only and are notnecessarily limited tothe shown level ofwater quality

The Platform for Value Creation

We provide water treatment facilities that remove
ions, microscopic particles, and bacteria to supply
water needed for production activities, as well as
wastewater treatment facilities that prevent various
types of water discharges from impacting the environment. Our wastewater reclamation systems also
help customers save resources and reduce costsby recovering and recycling wastewater.

11

Kurita Group Overview

Management Capitals

Performance(Fiscal years ended March 31)(Fiscal years ended March 31)

Financial Capital

Human CapitalInterest-Bearing Debt

(Millions of Yen)

(Millions of Yen)

253,089

271,914

293,975

Number of Employees
by Region
7,465

7,661

7,784

Ratio of Female Directors
and Employees(Millions of Yen) (%)

25.0

29,470288,207

25.3

2021

2022

2023

・Interest-bearing debt = Bonds and borrowings+ Lease liabilities

2021

2022

2023

Japan
Asia
North & South America
Europe, Middle East and Africa(EMEA)

11.4

11.2

13.2

13.2

2021

2022

2023

2021

2022

2023

2021

2022

2023

 atio of female directors
R(non-consolidated)
Ratio of female employeesR atio of women in management positions

Water Treatment Facilities business (Millions of Yen)
Water Treatment Chemicals business (Millions of Yen)
Business Profit Margin (%)

Net sales increased, supported by growth in the Water Treatment Chemicals business, mainly in overseas markets, and by the booking of work-inprogress sales for existing Japanese and overseas projects in the Water
Treatment Facilities business and growth in the ultrapure water supply
business in Japan.

Business profit rose, with the increase in net sales outweighing a numberof negatives, including deterioration in the cost of sales ratio caused byhigher raw material and logistics costs in the Water Treatment Chemicals
business, a worsening product mix in the Water Treatment Facilities business due to a decline in the services business ratio, and higher operating
expenses associated with the start of operations at Kurita Innovation Hub.
• Business profit = Net sales - Cost of sales - Selling, general and administrative expenses

Intellectual Capital
Number of Patents

1,042

1,413
1,067

R&D Expenses and Ratio of
R&D Expenses to Net Sales

Property, Plant andEquipmentGroup Network(Millions of Yen) (%)(Millions of Yen)(Companies)

161,034

6,344

1,463
1,180

5,317

5,386

2.0

1.9

178,737(%)(Yen) (%)

7.7
76

73

75

4.7

116
2021

133
127
2022

ROA

2022

4.1

4.1

2022

2023

38.8

43.8

43.5

2023

2021

2022

2023

R&D expenses (Millions of yen)
Ratio of R&D expenses to net sales (%)

Natural Capital

2021

2022

Japan

Overseas

2023

2021

2022

2023

ROE

Dividends per share (Yen)ROE and ROA were flat year on year due to the booking of impairment
losses on goodwill related to the water treatment chemicals business of
Kurita America Inc.

Dividend payout ratio (%)

Kurita’s policy is to continuously increase dividends where possible. In linewith that policy, the dividend was increased for the 19th consecutive year.

• ROA = Profit attributable to owners of parent ÷ Total assets (Average) × 100• ROE = Profit attributable to owners of parent ÷ Equity attributable to owners of parent (Average) × 100

Kurita Group KPI: Customer Impact Reduction – Kurita Group Impact
Under MVP-22, the Kurita Group aimed to support environmental impact reduction*1 in the operations of its customers to offset and even exceed the environmental impacts of its own business. To this end, we set numerical targets for the “amount of the reduction in environmental impact of customers – the amount of
the Kurita Group’s own environmental impact,” with regard to water, CO2, and waste.

Social and Relationship Capital*1 The reduction of environmental impact from customers’ operations is calculated based on the results of adopting the CSV business. Further information about the CSV business can be found on pages 32-33.

Water Intake(million m3)

2.84

Energy Consumption
2.90

(TJ)

827

2.43

881

Number of Certified Companies
ISO9001
ISO14001

955
31

23
18

CO2 Emissions Reduction at
Customers – CO2 Emissions from
Our Business Activities

Waste Reduction at Customers– Waste Generated from Our
Business Activities(million m3)(thousand t)*2

(thousand t)

19
97

113

249

122

406
316
215

91
45
2021

2022

2023

2021

2022

2023

2021

2022

2023

2021

2022

2023

2021

2022

2023

2021

2022

2023

2021

2022

2023

*2 � CO2 emissions from our business activities � include emissions generated from the ultrapure water supply business, which comes under Category 13 of Scope 3,
as well as emissions in Scope 1 and 2 stipulated in GHG (Greenhouse Gas) protocol.

12

Kurita Water Industries Ltd. Integrated Report 2023

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

28

31

Water Savings at Customers –Amount of Water Intake Used in
Our Business Activities

The Platform for Value Creation

Number of registered patents
Japan
Overseas
Number of filed patents
Japan
Overseas

2021

7.1

117,603

179
120
2023

7.0

78.00

72.00

66.00

1.8
2021

146

Dividends per Share and Dividend Payout Ratio

The Kurita Group’s Businesses

1,555

Return on Assets (ROA) and Return on Equity (ROE)

Manufactured Capital

Kurita Group Business Strategy

2023

11.0

20.0

58,680

Water Treatment Facilities business
Water Treatment Chemicals business

2022

32,944

24.9

11.5

2021

38,589344,608
267,749

22.2
51,353(Millions of Yen)

(%)

24.5

100,067

Business Profit and Business Profit Margin
Kurita Group Overview

Equity Attributable to
Owners of Parent

Net Sales

13Section 2:
Kurita Group
Business Strategy

Interview with
the President
Q. W
 hat kind of a company is the Kurita Group? What do you think society expects from Kurita?

the Kurita Group in response to
the expectations of society

not solely on water itself but the applications and functions

history. Fundamentally, water treatment is a business thatof water. The solutions not only improve the productivity

contributes significantly to society. However, reflecting theof the customers’ manufacturing plants but can also

rising awareness of social issues, such as water resources

contribute to reducing water usage or GHG emissions

and climate change, and the development of a circularvolume. In addition, if we look at the substances that areeconomy, society’s expectations for our businesses haveeliminated from water, Kurita can also contribute to aclearly risen.

circular economy through the recovery and reuse of

I believe that the image that many have of our group isresources which had previously been treated as waste. I

of a company that cleans and purifies water. However, ourbelieve that society expects the Kurita Group to createbusinesses are not limited to just this: we provide a

new value by leveraging its accumulated expertise anddiverse range of value to society and industry, with water

experience, cultivated through addressing issues foras the starting point. For example, water is widely used associety and industry, to support the realization of aan agent in processes where objects are heated or cooled.

sustainable society and the wider development of industry.

Kurita Group Business Strategy

address customers’ needs and potential issues, focusing

focused on the treatment of industrial water over its 74-year

Kurita Group Overview

Driving strong, solid growth forSince its founding in 1949, the Kurita Group has consistently

These processes are always accompanied by GHG (Green
House Gas) emissions. Kurita proposes solutions which

commitment to providing value to society and to becoming

Our aspiration is simply to realize the Kurita Group’s

To realize our corporate philosophy, I believe it isenvironment globally, is now at a major inflection point:a highly profitable company capable of growth. We aim tophilosophy: “Study the properties of water, master them,

important to share and properly leverage the group’stranslating the dramatic changes implemented as aexpand and elevate the value we provide to our customers

and we will create an environment in which nature andaccumulated ‘water knowledge’ as explicit knowledge

company into results. I, as president, aim to realize ouraround the world and society. I believe this has

humanity are in harmony.”throughout the organization at a wide array of frontline

corporate philosophy, working not just with our customers

contributed to the realization of a better world and, as a

At sites where water is required, regardless of thesites as swiftly as possible. In seeking to achieve this, mybut our employees and all other stakeholders as well.

consequence, has allowed the Kurita Group to achieve

industry, Kurita has numerous points of contact inmission is to clearly establish what we aim to become andWhile we will maintain the advantageous practices thatsustainable growth thus far. Our objective is to ensure thatmultiple locations within manufacturing plants. Depending

ensure that we have alignment across the organization. By

have served the group well, I intend to boldly implement

this growth is sustainable over time.

on the customers’ scale and the products being

continuing to create value for customers and society at

manufactured, required volume and quality of water andsites around the world, I believe the Kurita Group can

Incorporating the increasingly global and diverse naturecustomer’s challenges are different: the range of optimalachieve a virtuous cycle where sustainable growth andof our businesses, we chose to update the Kurita Groupsolutions is very broad. Our competitive strength derives

enhanced corporate value leads to new contact points

Philosophy System ahead of the launch in April of the newfrom our ‘water knowledge,’ the accumulation of expertise

which drives further sustainable growth.

Medium-Term Management Plan “Pioneering Shared Valueand experience born from responding to the needs of2027,” to foster a greater sense of unity. Our corporate

diverse sites.

change with a greater sense of speed.

Corporate & Financial Information

the realization of a sustainable society,’ reflects our strong

which addresses issues related to water and thephilosophy remains unchanged but we reaffirmed our
vision and values, refashioning these into a message that
more clearly reflects the unique qualities of Kurita. Our
vision of ‘Pioneering “new value for water” to contribute to

14

Kurita Water Industries Ltd. Integrated Report 2023

The Platform for Value Creation

I became president on April 1, 2023. The Kurita Group,

The Kurita Group’s Businesses

Q. What does the Kurita Group aspire to become in the medium to long term?

Hirohiko Ejiri
President andRepresentative Executive Officer

Kurita Water Industries Ltd. Integrated Report 2023

15

Kurita Group Business Strategy

Interview with the President

Q. How do you evaluate the previous Medium-Term Management Plan
“Maximize Value Proposition 2022”?

visualization of the value proposition to drive growth. Wechanging its business processes as a way of establishing aalso promoted DX and innovation. Recognizing thesolid profit foundation. Prior to MVP-22, Kurita’s medium-

importance of these areas in providing value, we

term plans were 3-year plans. However, to ensure we could

established the foundation and framework needed totake a medium- to long-term perspective, we chose toundertake full-blown initiatives going forward, through themake MVP-22 a 5-year plan. The management metrics set

Meta Aqua Project with Fracta Leap and the establishment

out in MVP-22 targeted profitability and capital efficiency.

of Kurita Innovation Hub. Another key achievement was

However, the business profit margin improved to only

the progress made in raising awareness of the need for

11.2%. We fell short of our target metrics of a 15%change amongst our employees. In addition to integrating

business profit margin and a 10% ROE.

organizational structures, which had historically been split

At the same time, there were also a number of positive

between water treatment chemicals and water treatment

achievements. First, we were able to establish a solid

facilities, the pandemic was also a catalyst in accelerating abusiness foundation on a global basis. Through M&A andchange in mindset, in prompting employees to be highlyorganic growth, the proportion of overseas net sales

creative in responding to customer issues within the

expanded to around 50%. We were also able to set up a

constraints of activity restrictions.

Q. What is the positioning of the new Medium-term Management Plan
“Pioneering Shared Value 2027”?

Japan, Asia, North and South America and EMEA. In

develop the foundation for improving profitability. I believe

addition, we also made progress in generating synergies

we have transitioned to a stage where the changes will begin

The “Pioneering Shared Value 2027 (PSV-27)” plan further

sales to engineering and R&D, into a single organization, we

within the group, with Project Acorn, which targeted thedelivering results. As the pandemic fades, I view the

deepens and accelerates the value-driven businesshave created a team that is dedicated to responding to the

expansion of solutions in fields related to RO membranes,

reopening of the global economies as an opportunity. Thatdevelopments under MVP-22. Sustainability has been

electronics industry. Our objective is to expand ourand the Global Supply Team project, designed to optimize

said, given rising geopolitical risk and climate change issues,

positioned at the core of our management strategy. We

customer base and the fields that we cover with a diverse

group procurements and manufacturing. Next, Kurita

the operating environment for the Kurita Group is

will strengthen our efforts to link the enhancement oflineup of service businesses and combinations thereof. For

created and developed a high-value-added businessincreasingly uncertain, making it difficult to project the future.

value for society and our customers to an improvement ini ns t a nce , b y d i ve r s i fyi ng an d fu r th er d ev elop in gmodel, driven by the value we generate. As a result of ourUnder such conditions, enacting complex management

the Kurita Group’s economic value.

conventional water supply services into standardized

focus on developing the recurring contract-type service

decisions with speed requires further strengthening of theand CSV* (Creating Shared Value) businesses, wefunctions of management supervision and execution.

confronting our customers. This reaffirmed the* Products, technologies, and business models that contribute to saving water,
reducing GHG emissions, recycling waste into resources and reducing resource
inputs more greatly than conventional ones.

MVP-22: Achievements and Challenges
Major Challenges

Established global four-region structure
Progress on global projects, creation of synergies

Develop businesses tailored for industry or
customer characteristics
Reduce reliance on specific fixed business models

Created and deployed high-value-added models driven
by value creation
CSV business and recurring contract-type services otherthan Ultrapure Water Supply
Launched DX and innovation initiatives
Established Meta Aqua Project, Kurita Innovation Hub

Kurita Water Industries Ltd. Integrated Report 2023

services designed with a specific focus on pure water

an organizational structure with dedicated teams bygeneration or wastewater reclamation, water supply

customer industry. Our customers do not simply want

services that utilize existing facilities or cost reduction

products like water treatment chemicals or waterproposals covering both water treatment and utilities, we

treatment facilities from Kurita. Instead, they want thecan provide solutions that respond to the differingvalue generated by these products. To achieve thischallenges or priorities of our customers. Furthermore, withrequires an organizational structure with the ability tocountries now moving to expand semiconductor production

provide value on a one-stop basis, based on a deep

capacity, securing business bases in Europe and the U.S. tounderstanding of customers’ businesses.

capitalize on this opportunity is a major challenge. In North

The electronics industry, with semiconductors at theAmerica, we are swiftly establishing a business framework,

core, is expected to grow globally. Given the substantial

including chemical and maintenance services. In Europe, weCreate new businesses
Cultivate future business pillars

impact the timing of production ramp-ups have on

acquired Arcade Engineering in July, securing a

profitability, the ability to shorten the lead time from the

manufacturing base and supply chain for the electronics

Nurture human talent
Create innovation as a driving force for solutions proposals

initial consideration of capital expenditures to execution

industry water treatment facilities business. The precision

Strengthen governance
Leverage DX and global business bases, strengthen
management supervision and execution

represents significant value. By consolidating all of ourtool cleaning business is also a business where demand isgroup’s functions which serve the electronics industry, fromexpected to grow alongside growth in the electronics

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

Major Achievements

First, in implementing this plan, we have transitioned to

The Platform for Value Creation

As a consequence of the above, Kurita was able to

The Kurita Group’s Businesses

business foundation with a global four-region structure:

deepened our understanding of the challenges

16

Kurita Group Business Strategy

importance of products and services which enable thecompany focused on transforming the business model andKurita Group Overview

Under “Maximize Value Proposition 2022 (MVP-22),” the17Kurita Group Business Strategy

Interview with the President

the driving force behind corporate activity. It is my belief

business. We will set out a clear direction for the

Audit & Supervisory Board to a Company with a Nominating

customer capacity utilization, it also tends to be impacted

that a deep understanding and embrace of our corporate

development of technology based on the needs that

Committee, etc., clearly separating managementby the silicon cycle. We aim to grow this business into aphilosophy and vision, which lays out what Kurita aspires

emerge as a result of analysis and the understanding ofsupervision and execution. The board of directors will focus

stable profit pillar within the electronics industry businessto become, is indispensable for the development of strong

the competitive environment, promoting innovation on a

on management supervision, taking into account thethrough a unified approach to managing Kuritec Service ofand responsive human resources able to engage sincerely

group-wide basis.

viewpoints of diverse stakeholders, while the executive will

Japan and Pentagon Technologies of the U.S., making

with our customers and maintain high levels of motivation.

Also, at the Ordinary General Meeting of Shareholders ininvestments in a timely manner in conjunction with our

Our assumption in formulating PSV-27 was that there wasJune 2023, Kurita transitioned from a company with ancustomers’ capital expenditures, expanding and diversifying

a need to revise our philosophy system to further elevate

our customer base, and introducing new technologies andKurita’s uniqueness in a way that would resonate with

automation to improve production efficiency.

group employees. We updated our Corporate Vision andare becoming increasingly important; many are now

our employees around the world understand our

focused on environmental and social impacts, such as

philosophy and are ‘Pioneering “new value for water” toreducing GHG emissions volumes, in their operations. To

contribute to the realization of a sustainable society’ we

respond quickly and appropriately with the value needed by

are implementing organizational structures that facilitate

our customers, while factoring in regional and market

the generation of innovation by diverse human resourcescharacteristics, we have set up an organization which brings

across the group under an already established human

together the management of the four regions and will focus

resource strategy. As president, I feel that the Kurita

on developing the CSV business. We are also aiming toGroup’s employees are very highly motivated to address

create new businesses. We aim to nurture businesses thatsocial and customer issues every day. To create and set

will develop into future growth pillars, by demonstrating thethe direction for an environment that will further elevatestrength of the Kurita Group’s know-how in water treatment

motivation and maximize performance, I plan to createtechnologies and contact points, including exploring

opportunities where I can proactively engage withpotential collaborations with other companies with

employees directly. With regard to intellectual capital, I

expertise and experience in new business fields.

believe it is important to not only manage in-house

To support these business strategies, I consider human

intellectual property but also to proactively analyze

capital and intellectual capital to be particularly important

information on patents held by customers and peers: tomedium-term management resources. Human capital iscapitalize on intellectual capital as the starting point forPositioning of PSV-27
Corporate Vision

PSV-27
MVP-22• Shift to service businesses• Strengthen businessfoundation (Overseas, DX,
R&D sites)• Creation of high-valueadded models• Nurture awareness of needfor change• Diversification, enhancing sophistication ofservice business• Accelerating development of products andservices aligned with regional and market
characteristics• Strengthening businesses where starting
point is social value• Foundations necessary to promote the above(Strengthening human capital, technology,
governance)

Proactive investments

Proactive and effective investments

Basic Direction

Transformation of business model and changes to businessprocesses, to make value the starting point

Pioneering “new value
for water“ to contribute to
the realization ofa sustainable society

UpSocial ValueUp

Customer Value

Up

Economic Value

shared value such as contributions from water savings,

450.0 billion yen, a business profit margin of 16%, ROE of

GHG emissions reductions, recycling and reduction of

12% or higher and ROIC of 10% or higher in the final year of

resource inputs achieved at our customers through the CSV

PSV-27. By expanding business models that have value

business. We have also set basic thematic targets, which are

creation as their starting point, such as recurring contract-

key metrics for management and business activity, such astype services, precision tool cleaning and the CSV

human capital development, innovation, quality and safety,

businesses, our plan is targeting topline growth andand compliance.

improved profitability as well as enhancing capital efficiency.
The Kurita Group aspires to grow along with society. We

We ask for the continued understanding and support ofhave established non-financial metrics, including targets forour stakeholders for the Kurita Group’s initiatives.

The Platform for Value Creation

Through these initiatives, we aim to achieve net sales of

The Kurita Group’s Businesses

set out our Values. To ensure that each and every one ofboard to make swift and bold decisions.

Kurita Group Business Strategy

For our general industry customers, non-financial metrics

leverage the expertise and the monitoring function of theKurita Group Overview

industry. However, as performance is closely linked to

Corporate & Financial Information

18

Kurita Water Industries Ltd. Integrated Report 2023

Kurita Water Industries Ltd. Integrated Report 2023

19

Kurita Group Business Strategy

Review of Previous Medium-Term Management Plan
Maximize Value Proposition 2022 (MVP-22)

Basic
PolicyUnder MVP-22, seeking to transform our business model and business processes so that they were anchored to the idea of
our value proposition to customers and society, we worked to build a robust earnings base by shifting our businesses to aservices model. Leveraging the Group’s strong cash flow, we continued to make aggressive and rapid investments and pursue

Achievement Status of Financial Management Targets
Net sales organic growth rate Target: 3% or more
Business profit margin Target: 15%

Result: 11.2%

Return on equity (ROE) Target: 10% or more

Result: 7.1%

Adoption of business segment management using ROIC
Started business portfolio management using ROIC

management attentive to capital efficiency. At the same time, we positioned CSR at the heart of management and aimed for344.6

sustainable growth by creating shared value with society. Although we did not reach some of our financial and managementtargets, we achieved record-high net sales and business profit, and built an earnings base that will lead to future growth.

236.8
9.5

257.3

264.8

10.0

10.1

267.7
11.0

7.7

7.6

288.2
11.4

7.0

7.1

2018

2019

2020

2021

2022

2023

Reduction of Environmental
Impact at Customers

499

Main Results• Expanded product, service lineup and global development• Pursued social value and customer corporate value and expanded

Rapidly develop total solutions for customers that make full use
of Kurita’s technologies, products and services in water treatment
chemicals, water treatment facilities, and maintenance.

• Developed, deployed solution models capable of horizontal
deployment, but failed to meet diverse market demand• Curbed cost overruns by introducing model to anticipate and prevent
non-compliant work issues• Boosted efficiency, saved costs through global procurement• Launched design automation and digital transformation (DX) initiatives

4. C reation of new business and the promotionof innovation• Developed AI optimal operation technology for water treatment facility• Expanded joint project to develop RO membrane solutions with

6. E
 stablishment of the Group governance system
Improve the effectiveness of internal controls inGroup companies.

Kurita Water Industries Ltd. Integrated Report 2023

55

26
2018

2019

2020

99

116

2021

2022

Avista Technologies, Inc.

• Established Kurita Innovation Hub, an R&D base connecting diverse
stakeholders• Made progress with developing technology from the standpoint ofsocial issues• Reshaped Group Philosophy System• Introduced management monitoring system• Introduced head office nomination, successor training, andremuneration system at each Group company• Strengthened internal controls (set up regional head office andconsolidated sales subsidiary management functions)Started DX and promotionof innovation

125

Main Challenges
2023(Fiscal years ended March 31)

Business development
suited to industry,
customer characteristics

Priority Themes of CSR Policy: Targets and Results
Indicators

The fiscal year ended March 31, 2023
TargetResultEvaluation

1) Rate of product safety evaluations for newly developed products

100%

100%

Achieved

2) Rate of front-line employee participation in regular safety training
directly related to products and services

100%

100%

Achieved

100%

100%

Achieved

1) Rate of training conducted in relation to human rights among
officers and employees

100%

100%

Achieved

2) Rate of participation in safety training related to site operations

100%

100%

Achieved

240
million m3

122
million m3

Notachieved

10
thousand t

249
thousand t

Achieved

450
thousand t

406
thousand t

Notachieved

35%

37%

Achieved

1. Provide highly safe services and products

2. Conduct fair business activities
Rate of participation in compliance-related training among
officers and employees

Creation of new businesses
Human resource
development
Reinforcing governance

3. Respect human rights

4. Solve issues related to water resources
Water savings at customers – Amount of water intake used inour business activities

Corporate & Financial Information

Build a strong foundation as a technology-oriented company
and promote advanced research and development.

54

maintenance, fostered awareness and culture of embracing change

Rebuild the manufacturing system and processes todramatically increase quality and speed.

5. S trengthening the foundation and promotion ofresearch and development

222

119
45

	Water intake reduction(million m3)
	CO2 emissions reduction(thousand t)	
Waste reduction(thousand t)

The Platform for Value Creation• Through organizational structure fusing chemicals, facilities, andExpand and enhance existing business fields while creating
new business fields that will become major new sources of
earnings.

354

274

Established a global
four-region structure
Created and rolled out
value-driven high-valueadded models

business scale with a focus on general industrial customers

2. E nhancement of total solutions

3. R
 ebuilding of manufacturing system for water
treatment facilities

445

Main Results

The Kurita Group’s Businesses

187
136

20

294

279

Priority Measures
Measures(Fiscal years ended March 31)

Creating Social Value by Expanding CSV Businesses

367

Expand earnings with highly unique technologies, products, orservices that contribute to the natural environment, industry
and people’s lives.

* Japanese standards for fiscal
year ended March 2018.
IFRS from March 20195.1

 upply chain disruptions, soaring costs of raw materials and components triggered by COVID-19 pandemic andSgeopolitical risks
Semiconductor industry rapidly becoming core aspect of social infrastructure
Population decline, uneven distribution of working population
Accelerating digitalization
Mounting calls for decarbonization and the realization of a circular economy society

1. D evelopment of CSV Business

11.2

	Net sales (Billions of Yen)	Business profit margin (%)
	ROE (%)

Kurita Group Business Strategy

7.7

Operating Environment

Result: 3.7%

Kurita Group Overview

Maximize customer intimacy by dismantling preconceived ideas anddramatically raising the quality and speed of our work

5. Realize sustainable energy use
CO2 emissions reduction at customers – CO2 emissions from ourbusiness activities
6. Reduce waste
Waste reduction at customers – Waste generated from ourbusiness activities
7. Advance industrial production technologies
Proportion of themes falling into “Contribution to improvementof production process” to product development themes

Kurita Water Industries Ltd. Integrated Report 2023

21

Kurita Group Business Strategy

Medium-Term Management Plan (fiscal year ending March 31, 2024 to fiscal year ending March 31, 2028)
Pioneering Shared Value 2027 (PSV-27)
Capitalizing fully on the results of MVP-22, we will move into the stage of accelerating profit growth globally
Our basic direction will continue to be transforming our business model and business processes so that they are anchoredvalue-added businesses, such as diverse service businesses and CSV businesses, tailored to specific market characteristics.

Corporate Vision

Electronics
Industry
1. Growth Strategy

Diversifying and deepening
the service business
Creating greater shared value
with society throughour businessAcceleration of DX and use ofdigital technology

Developing Markets
Electronics Industry
with high growth potential
General Industry
featuring points of contact withvarious industries and customers

Promoting innovation

Enhancing governance

Return on invested capital (ROIC)

10% or more

Service
Facilities
Business profit margin(Fiscal years ending March 31)

Net sales¥210.0 billion(Including the precision
tool cleaning business)¥149.3 billion(reference value*)
15%

Business
profit margin

2023

2028 (Target)* Figures adjusted to new segment classifications were unaudited as of the
publication date and are subject to change.

Evolution of Water Supply Services

Formerly, our ongoing service contracts for the electronics industry centered on the ultrapure water supply business, which packages everything from facilities to facility management, maintenance, and chemical treatment for new, large-scale plants. In recent years, however, customers are facing a variety of emerging issues, such as calls for water savings, greenhouse gas emissions reductions, and other social issues,
the need for business continuity planning and the rapid start-up of operations. To help address these diverse issues in a flexible manner,
we will work to develop and deploy new water supply business models and expand the customer base. At the same time, we will add morevalue by using digital technology to boost the efficiency of facility management.
Conventional water supply (Ultrapure Water Supply Business)
Services using standardized products(reclaimed water supply, pure water supply)Services corresponding to plant size
(small and medium-sized facilities, use of existing facilities)
Proposals to reduce total plant operating costs

Expanding thecustomer baseStreamlining of operation and management throughthe use of digital technology

22

Kurita Water Industries Ltd. Integrated Report 2023

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

Enhanced shareholder returns

12% or more

20%

Please see Businesses Targeting the Electronics Industry
Segment section on P.36-39 for details.

Service diversification

Making strategic investments andmanaging return on investment

Return on equity (ROE)

Strengthening competitiveness3. Financial Strategy

16%

The Platform for Value Creation

Bolstering human capitalBusiness profit margin

Securing points of contact with a wide range of customers globally through various services and DX

As semiconductors and related industries become a core aspect ofsocial infrastructure in regions worldwide, the electronics industry
market not only holds tremendous growth potential but is also ahotbed for rapid technological innovation. To be an indispensable
partner in the global electronics industry market, we will provide
value to a wide range of customers by building a framework focusedon the electronics industry market and diversifying and expanding
the services we provide in response to this growing market.

1
2. Strengthening Management Foundations¥450.0 billion

Net sales

The Kurita Group’s Businesses

Measures for Growth

Financial Indicators (fiscal year ending March 31, 2028)

Kurita Group Business Strategy

Pioneering “new value for water” to contribute to
the realization of a sustainable society

The growth strategy under PSV-27 centers on three measures: (1)diversifying and deepening the service business, (2) creating greater
shared value with society through business, and (3) accelerating digital transformation (DX) and the use of digital technologies. Dedicated organizations serving two market segments with very different
characteristics—the electronics industry and general industry—will
spearhead our implementation of these measures in an optimaland prompt manner. In this way, we are aiming for net sales of¥450.0 billion and a business profit margin of 16%.
Moreover, while actively making strategic investments in support of these growth strategies, we will pursue management thatemphasizes return on investment. To this end, we have set atarget for ROIC of 10% or more, and will pursue business activities
across the Group with an awareness of investment efficiency. We
will also work to increase ROE by boosting profitability and enhancing shareholder returns.

Kurita Group Overview

to our value. Building on the groundwork laid down by MVP-22, we aim to achieve sustainable growth by expanding high-PSV-27 Financial Indicators

23

Kurita Group Business Strategy

Medium-Term Management Plan (fiscal year ending March 31, 2024 to fiscal year ending March 31, 2028)
Pioneering Shared Value 2027 (PSV-27)

2

Strengthened Foundations of the Precision Tool Cleaning Business

GeneralIndustry

Toward an integrated operating structure for the
precision tool cleaning business within the Group
Officer in charge of precision tool cleaning business
Kuritec
Services

PentagonTechnologies

Creating greater synergies
Expand the scopeof business

Shift to a precision
tool cleaning
business that is lessaffected by silicon
cycle effects

Boost productivity
Develop new
customers

This market spans a wide range of customer industries and promises growth potential as we work to change our business models.
To capture this growth, we will build a business structure tailored
to regional and market characteristics, further expand our CSV
businesses, which provide high value to society and customers,
and use digital infrastructure to accelerate expansion. In addition,
we will take on challenges for new businesses that help build a circular economy society.

CSV businesses
Non-CSV businesses
Business profit margin (%)

Net sales¥240.0 billion(Fiscal years ending March 31)¥195.3 billion(reference value*)
9%

Business
profit margin

13%2028 (Target)

2023

Building New Business Foundations in North America and Europe

1With a structure encompassing the four areas of Japan, China, ASEAN, and EMEA & the Americas, we aim to create shared value with customers and society in each region by providing optimal solutions centered on CSV businesses, in light of our customer base and industry characteristics. In addition, regional management will present global strategies and pursue inter-regional collaboration, sharing information globallysuch as on the fruits of implementation and the development of new models to strive for more efficient business development.
Expansion of CSV business to all areas of China

Early profitability of Kurita America based on experiences in Europe

North America: Take on the challenge of establishing the facilities business for cutting-edge semiconductors by utilizing the resources of local site
2022

2023

Feasibility studies
Approach to customers

2024

Building of a business structure
EP + Modularization*

2025-

Maintenance(New business model)

Launch of
the business

Customers

Establishmentof a businessfoundation

China

Customers

Europe: Acquire a local business base through M&A activities and generate synergies with the Kurita Group
2023

2

Production Process Reform and Supply Chain Strengthening

Integrated CSV business expansion in ASEAN region,
promotion of streamlining

Business Development in Light of Industry Characteristics

BeforeCharacteristics

Procurement
DesignShortened engineering
person-hours

Kurita Water Industries Ltd. Integrated Report 2023

Procurement

Cost reductions

Manufacturing to construction work

Manufacturing toconstruction work

Post-handover follow-ups(new value)

Quality improvements(stabilization of supply)3

Creating New Businesses that Help Build a Circular Economy Society

We will work to cultivate new businesses that will be future revenue pillars utilizing “water knowledge” cultivated through diverse
contact points with customers. Currently, we are developing technologies to remove excess substances from water and working tocommercialize a recycling system that converts removed substances into something of value.
Social Issues

For utility equipment(applied to boilers and cooling systems, etc.)

Applied toa wide range
of industries

For production andmanufacturing processes

Varies byindustry andcustomer

Combination of Social
Issues and Resource
Recycling Technologies
Recyclingtechnologies

Waste liquid andother waste

to

Valuableresources

Valuable resources = water, methane, electricity, fuel, NH3, P, rare metals, plastics,
fertilizer, feed, etc.

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

For general industry such as petroleum, pulp and paper, and steel,which have large plants that use significant amounts of water, we
will develop CSV businesses in particular that contribute to improving efficiency across an entire plant, including production andmanufacturing processes, as an optimal model for these industries
and customers.

Demandforecasting

Customers

Accumulation of a track record in the adoption ofdiverse models that cover production processes
from utilities

To effectively respond to demands for the rapid start-up of plant operations by customers in the semiconductor and electronics industry
markets, under an organizational structure consolidating functions ranging from sales to engineering, we are moving ahead with collaboration and DX in the value chain, reforms to production processes, and reinforcements to the supply chain. We aim to mitigate procurement
risks by making more accurate demand forecasts. We will also harness AI technology to automate design, optimize construction plans, andautomate cost estimates, aiming to boost competitiveness by achieving shorter delivery times, lower costs, and higher quality.

After

24

Japan

2025-

Business expansion that generates Group synergies

DesignASEAN

Interregional human resource
development program
Building a shared data infrastructurearound the world

The Platform for Value Creation

Feasibility studies

42024
Acquisitionof businessfoundation

Customers

Regional
Management* EP (Engineering & Procurement) + Modularization: A construction method to modularize completed water treatment facilities and assemble them within a customer plant,
instead of building facilities from scratch within the plant

2022

EMEA andAmericas

The Kurita Group’s Businesses

Our businesses targeting the electronics industry have traditionally centered on East Asia. For Kurita to become a partner in the global electronics industry going forward, however, acquiring a solid business foundation in Europe and the US is a critical issue. Attentive to the characteristics of specific markets and customers and the Group’s business base, we will draw on the resources of our local bases in North
America to take on the challenge of acquiring a facilities business to serve manufacturers of leading-edge semiconductors. Meanwhile, in
Europe, we will leverage the business base of Arcade Engineering Group, which we acquired in July 2023, as we pursue expansion while creating synergies with our water treatment chemicals subsidiary in Europe.

Building a Business Structure in Light of Regional Characteristics

Kurita Group Business Strategy

Please see General Industry Segment section on
P.40-43 for details.

* Figures adjusted to new segment classifications were unaudited as of the
publication date and are subject to change.

3

Kurita Group Overview

We formed a new organization to jointly oversee Japan-based subsidiary Kuritec Services and US-based Pentagon Technologies. We will
work to expand the customer base through greater collaboration between these two companies. We will also make timely investments tocapture market growth while rigorously controlling fixed costs. Another aim is to minimize the impact of the silicon cycle and achieve stable
growth by diversifying our businesses and leveraging new technologies.

Accelerate the rollout of high-value-added models through business expansion tailored tothe characteristics of specific regions and markets

25

Kurita Group Business Strategy

Financial and Capital Strategy
Interview with the Officer in Charge
Q. Kurita has been actively pursuing M&As to date.
What has been your aim in doing so?

Shuji Shirode
Managing Executive Officer
Executive General Manager of Corporate Control
and Administration Divisionperiod and regional risks for each project. Regarding

capitalization is an indicator for comprehensively

shareholder returns, we believe it is important to continue

evaluating a company’s financial and non-financial aspects.

increasing dividends in a systematic fashion, aiming for a

The Kurita Group aims to maximize corporate value by

dividend payout ratio of 30-50% over five years. In carrying

expanding the equity spread and steadily returning profits

out these efforts, I believe my role is to offer financial data

to shareholders. The Group’s financial and capital policies

that aids management, and to develop human resources,

focus on indicators of both financial soundness andIT, and internal controls to support such management

profitability. Indicators of financial soundness stress theacross the Group. To realize our corporate philosophy, we

equity ratio, net debt-to-equity ratio, and net debt-to-

will implement optimal cash allocation centered on growth

EBITDA ratio. From the perspective of stable financial

investments while maintaining financial soundness, leading

management, we stress maintaining good credit ratings,

to enhanced corporate value.

since we bought a water treatment chemicals business inchiefly in North America, investing around ¥80 billion.

Europe in 2015, for the sake of acquiring a business

These included US Water Services (now Kurita America),

foundation to support sustainable growth. Investing a total

which develops water treatment chemicals and facilities;of over ¥100 billion, we have now established a global

Pentagon Technologies Group, a precision tool cleaning

business structure anchored by four regions: Japan, Asia,

company; and Avista Technologies, which develops RO

North & South America, and EMEA.

membrane solutions. We were able to strengthen the

For acquisitions to date, we have targeted companies thatbusiness foundation through these acquisitions. We also

can strengthen the business foundation and create synergies

acquired companies in Canada and the Middle East towith the Group. We enter into negotiations with thesebalance out our regional presence. As a result, in the fiscal

companies after calculating an appropriate acquisition price.

year ended March 31, 2023, the final year of MVP-22,

The Investment Committee plays a central role in screening

acquired companies contributed around ¥60 billion to

candidates when we carry out such acquisitions. Even before

total net sales. Moreover, we were able to make headway

a deal goes through, we work to arrange the matters neededwith Group-wide projects that capitalized on acquiredfor integration and to ensure a smooth post-merger

technology and expertise.

integration in terms of business and governance.

Overview of Main Kurita Group Acquisitions Since 2015
Head officelocation

Water treatment
chemicals business of BK
Giulini GmbH2015

Germany

Water treatment
chemicalsFremont Industries, LLC(now Kurita America, Inc.)

2017

US

Water treatment
chemicals

Hansu Co., Ltd.

2017

South
Korea

Water treatment
chemicals

US Water Services, Inc.
(now Kurita America, Inc.)

2019

US

Water treatment
chemicals

Keytech Water
Management

2021

CanadaWater treatment
chemicals

Kurita AquaChemie Ltd.

2021

UAE

Water treatment
chemicals

Creating synergies byleveraging technology, services,and customer bases in the
precision tool cleaning field

Pentagon Technologies
Group, Inc.

2019

US

Precision toolcleaning

Global expansion of RO
membrane solutions

Avista Technologies, Inc.

2019

US

Water treatment chemicals,
RO membrane services

Fracta, Inc.

2018

US

AI- and machine learning-based software service
predicting water main degradations; design
automation solutions for water treatment plants

business profit margin to gauge profitability, and use ROE
Developing CSV businesses
and other high-value-added
products and services throughacquired bases

targets) to gauge capital efficiency. In PSV-27, our cash
allocation policy prioritizes growth investments, including
business investments and acquisitions, while ensuring

I ndicators of Profitability, Asset Efficiency,and Financial Soundness (%)
16.0

disciplined investment decisions. An in-house Investment
Committee screens growth investments based on
indicators such as net present value and ROIC, and the
Executive Committee or Board of Directors then decides
whether to invest. As an investment standard, we set thehurdle rate at capital cost plus risk premium for eachproject, generally at around 8%. In addition to thesecriteria, we determine profitability based on the return

Business profit
marginReturn on equity(ROE)
Equity ratio

10.0

10.1

5.1

7.6

66.0

62.5

2019

2020

11.0
7.7

59.6

2021

11.4

11.2

7.0

7.1

57.9

58.6

2022

2023

12.0 or more

2028
(Target)Business

Water treatment
facilities(Fiscal years ended/ending March 31)

Creating AI- andIoT-based solutions

Corporate & Financial Information

Date ofacquisition*

The Platform for Value Creation

Acquisition target

Synergies

which is necessary for smooth financing. We use theand ROIC (which have also been set as management

The Kurita Group’s Businesses

Regarding corporate value, we believe stock market

We aggressively pursued acquisitions under MVP-22,

Kurita Group Business Strategy

Q. Please tell us about the Kurita Group’s financial and capital policies.

The Kurita Group has actively pursued M&A activities ever

Kurita Group Overview

Having established the business foundation andtransformed our businesses, under PSV-27
we will accelerate initiatives that contribute toimproving profitability and capital efficiency.

*Date of initial investment

26

Kurita Water Industries Ltd. Integrated Report 2023

Kurita Water Industries Ltd. Integrated Report 2023

27

Kurita Group Business Strategy

Financial and Capital Strategy
Interview with the Officer in Charge

The PSV-27 plan targets net sales of ¥450.0 billion for theIt has been four years since we started using ROIC to

During the period of MVP-22, the total amount of capitalratio at the end of March 2023 was close to 60% and thefiscal year ending March 2028, the plan’s final year,

manage the business portfolio with the aim of improving

expenditures, growth investments including acquisitions,net debt-to-equity ratio was 0.1 times. So, I deem that we

representing a CAGR of around 5.5%. We see thecapital efficiency. However, it is hard to say that anand shareholder returns was approximately ¥310 billion.

are maintaining a sound financial position.

electronics industry segment achieving a CAGR of about 7%

awareness of ROIC has taken root among all of ourand the general industries segment achieving a CAGR of

employees. This is an issue going forward. We pursue

about 4%—we thus expect limited contributions to sales

ROIC management using business-specific balance sheets.

growth from acquisitions. We are pursuing strategies

Since the elements to be addressed differ depending on

specific to each market, and have set targets for profitability

the characteristics of the business, we are using decisionand capital efficiency: a business profit margin of 16%, ROE

tree analysis and other methods as we proceed withof 12% or more, and ROIC of 10% or more. In line with this

discussions carefully, but with a sense of urgency, tofocus, starting from the fiscal year ending March 2024, we

ensure that our initiatives are highly effective for eachwill reclassify the Kurita Group’s segments from businessorganization and can get buy-in.

Nevertheless, issues remain regarding profitability andoutlays through the effective use of assets, such as

capital efficiency, including for our acquisitions. The

divestments of shares in other listed companies andbusiness profit margin in the final year of MVP-22 wasproperty, plant and equipment, as well as utilizing debt.

11.2% (versus a management target of 15%) and ROE was

The composition of the balance sheet also changed

7.1% (target of 10% or more). The business profit margin

significantly as a result. We also made aggressive capital

benefited from the expansion of ongoing service contracts,

expenditures, investing in the ultrapure water supply

particularly in the ultrapure water supply business, andbusiness for the electronics industry and Kurita

higher profitability in Europe and the ASEAN region.

Innovation Hub, a new R&D base. In terms of the use of

However, we were unable to reach our targets due in partinterest-bearing debt, in addition to bank borrowing, we

to delays in our efforts to shift to a service-focused model

also issued unsecured bonds in December 2020 and May

for general industry businesses in Japan and in improving

2022, totaling ¥40 billion. As a result, net cash decreased

profitability at Kurita America. Another reason why ROEfrom ¥59.0 billion at the end of March 2018 to negative

was below the target was the recording of an impairment¥27.5 billion at the end of March 2023, while goodwill

loss on goodwill related to Kurita America in the fourthincreased from around ¥20 billion to around ¥60 billion

quarter of the fiscal year ended March 31, 2023.

over the same period. Even with these factors, the equity

sectors to industries. In the electronics industry segment,

Finally, I believe engaging with shareholders and

we are aiming to expand recurring contract-based services

investors is vital to enhancing corporate value. Going

while emphasizing ROIC. In the general industry segment,

forward, I would like to strengthen engagement by having

since the scale of investment here is relatively small, we willa wide range of directors and officers participate infocus on business profit margins.

dialogue. To enhance corporate value, we will discuss with

The main point of PSV-27’s cash allocation is using

capital markets the direction the Group should take over

operating cash flow to fund growth investments andthe medium and long term, then use the feedback toshareholder returns. We assume the balance of interest-

inform management decisions and business operations.

bearing debt at the end of March 2028 will be roughly on
par with the level at the end of March 2023. Given that ourbalance of shares in other listed companies is about

Cash Allocation¥8 billion, the Group’s ability to generate funds other thanShareholder
returns

operating cash flow is limited. Further improvements in
profitability and capital efficiency are needed for ongoinggrowth investments going forward. We began initiatives toshorten the cash conversion cycle several years ago to

Dividends¥40 billion

Assetcompression¥60 billion

M&As¥80 billion
Operatingcash flow

take hold among our employees.
In terms of the breakdown, we will channel about 80%
of funds into growth investments and about 20% into
upgrading facilities. We will allocate growth investment toOperatingcash flow¥200 billion

Capitalinvestment¥190 billion

Growthinvestments
Facilities
upgraderecurring contract-based services, M&As, and digital
investments. In terms of M&A, we have completed theacquisition of regional business foundations and will
instead target companies that can strengthen the Group’s

Source of funds Use of funds

Source of funds Use of funds

MVP-22

PSV-2728

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

business foundation or that have unique technologies.

The Platform for Value Creation

improve asset efficiency. These initiatives are beginning to

Use of debt
¥50 billion

The Kurita Group’s Businesses

In addition to operating cash flows, we covered these

Kurita Group Business Strategy

Q. Tell us the key points of the financial and capital strategy under PSV-27.
Kurita Group Overview

Q. Tell us your thoughts on the Group’s financial soundness in light of changes tothe balance sheet under MVP-22.

Kurita Water Industries Ltd. Integrated Report 2023

29

Kurita Group Business Strategy

Sustainability Strategy

The Kurita Group views sustainability as corporate activities within the natural environment and social systems, and the
pursuit of sustainable growth taking into account the impact of corporate activities on the environment and social systems,
corporate vision are designated in the Kurita Group’s Materiality, which identifies sustainability-related global issues andsets materiality metrics and targets as indicated in the table below.
Shared Value Themes (Fiscal year ending March 31, 2028)

Basic Themes (Fiscal year ending March 31, 2028)
Develop and disseminate innovative products, technologies, and business models

Solve issues related to water resources
Total number of basins where collective actions are
implemented and total population in the basins

5 basins,
600 million people(Fiscal year ending March 31, 2031 target: 7 basins, 700 million people)

300 million m

Rate of reduction in the ratio of GHG emissions to watersavings through CSV business (compared to the fiscal
year ended March 31, 2023)

50%

Rate of reduction of water intake intensity(compared to the fiscal year ended March 31, 2023,
excluding the ultrapure water supply business)

20%

Number of individuals, organizations and groups weengage with to raise awareness on water resources

Continuous
increase every year

73%

22%

(Fiscal year ending March 31, 2031 target: 30%, fiscal year ending March 31, 2051 target: Net-Zero)

Avoided GHG emissions through CSV business

1,500 thousand tContribute to building a circular economy society
Rate of increase in resource recovery or reduction of
resource input through CSV business (compared to thefiscal year ended March 31, 2023)

Number of stakeholder engagements related toinnovation areas

Continuous
increase every year

Strategic development and utilization of human resources
Engagement Score(a. Rate of companies above the average of allindustries, b. Score of each company surveyed)Contribute tobuilding a circular
economy society

Make
Participate inenvironmental
international
improvements
initiatives
in-house

Engage withexternal
parties

Increase in Kurita Group corporate value

a: 75%
b: Continuous increase

Rate of women, foreigners, and experienced personnel
among executives of Kurita Water Industries (KWI)

40%

Fill rate of human resources for development, digital,
and intellectual property

80%

Provide highly safe and quality products and services
20% reduction
year on year

Strengthening Human CapitalIf the Kurita Group is to continue generating new value through water treatment, the Group’s human resources need to be able to act on initiativeand not fear change. Human resource development to that end is one of our main priority issues. Guided by the human resources strategy set out
in the previous medium-term management plan, we are coordinating efforts across the Group to put in place a corporate organization and fostera corporate culture that facilitates innovation by diverse human resources.

Conduct business activities respecting human rights
Continuous
implementation

Conducting human rights due diligence on suppliers
Accident Severity Rate
(KWI, and group companies in Japan)

0.005 or lessRate of participation in human rights-related training

100%

Establishment of a liaison for remedies from humanrights violations (grievance mechanism)

Completed

Main initiatives
Enhance employee job fulfillment

Team spirit

Active participationof individuals withstrong expertise

Utilize diversity
Diverse expertise andexperience

Globalization

Secure and cultivate human resources in
key areas to drive Kurita technology
Development

Digitaltransformation

Intellectual
property

Conduct fair business activities
300%
Continuous
increase every year

Rate of participation in whistle-blowing system
related training

100%

Rate of participation in training related to laws andinternal rules for anti-bribery and antitrust, etc.

100%

Number of violations of anti-bribery and antitrust laws

Systematic enhancement of development
opportunities

Mid-career recruitment

0

Strengthening Technological and Intellectual Capital

Promotion System and PDCA
Board of Directors
ReportSupervision

Executive Committee
Discuss & Report

Instruction

Sustainability Committee
Chair: Executive General Manager, Sustainability Division
Committee members: Appointed from each division
Secretariat: General Manager, ESG Integration Department; General Manager,
Ethics & Integrity Department
ReportPromote & Manage

Organizations in Charge
Each Division of Kurita Water Industries

Various Committees

To respond to rapid social change by identifying emerging needs at an early stage and creating corresponding solutions, we will reinforce efforts tofurther develop base technologies, promote open innovation including startups, collaborate across Group research and development, and fully
exploit intellectual property. This will be backed up by management initiatives to roll these efforts out at global level and carry out active
investment to create solutions that deliver new value to customers and society and generate new businesses.
Offense(Analysis and utilization of intellectual
property data)+
Defense(Strategic patent acquisitions)Intellectual
property

Technologies

In-depth pursuit of base technologies+
Open innovation promotion

Globalnetwork

Base to drive
implementation

Utilization of Kurita Innovation Hub+
Sharing of information, human, and otherresources across Group R&D operations

External Organizations
Group Companies

Corporate & Financial Information

The Kurita Group’s policy is to designate the issues to be included in
the Kurita Group’s Materiality for each new medium-term
management plan and to address them based on associatedmetrics and targets. The organization in charge of each metric leads
activities aimed at meeting the targets and reports on the status ofactivities to the Sustainability Committee, which is chaired by the
Executive General Manager of the Sustainability Division, a corporate
officer of Kurita Water Industries. The committee monitors,
coordinates, and promotes materiality initiatives and reports on
their status, in principle twice a year, to the Executive Committee,
which in turn reports to the Board of Directors. Meanwhile, thecalculation of the short-term incentive remuneration, which is theperformance-linked component of the incentive remuneration for
executive and corporate officers and representatives of some Group
companies, depends partly on an environmental contribution index
that assesses the degree of attainment in certain materiality-related
metrics and targets.

Revisions to personnel systems

The Platform for Value Creation

In-house waste recycling rate

30%

Expand CSV
business

Contribute to therealization of adecarbonizedsociety

The Kurita Group’s Businesses(Fiscal year ending March 31, 2031 target: 100%, fiscal year ending March 31, 2051 target: Net-Zero)

Rate of reduction in Scope 3 emissions(compared to the fiscal year ended March 31, 2020)

Rate of the number of themes in innovation areas

Reduction rate in the recurrence rate of accidents that
affect customers and society

Contribute to the realization of a decarbonized society
Rate of reduction in Scope 1+2 emissions(compared to the fiscal year ended March 31, 2020)

30%

Solve issues
related to water
resources

Kurita Group Business Strategy

Amount of water savings through CSV business3

Investment rate in innovation areas

Since its foundation, the Kurita Group has consistently addressed theissues facing society and industry in areas related to water and theenvironment and created a wide range of products and services toresolve them. Our action on three of the issues in the Kurita Group’s
Materiality—solve issues related to water resources, contribute to therealization of a decarbonized society, and contribute to building acircular economy society—naturally includes reducing resource
consumption and environmental impact in our own operations.
However, we also contribute significantly to creating social value
through supporting customers with CSV business and participating inexternal organizations, which also helps to increase the Kurita Group’s
corporate value. In addition to monitoring these social value targets,
we are also tracking the net sales and profit contributions of the CSV
business as a step toward fulfilment of the medium-term
management plan.

Kurita Group Overview

and vice versa. The PSV-27 positions sustainability at the core of business management. Priority issues for realizing theCreating Shared Value with Society Using the Unique Characteristics of Our Business

Create new solutions and businesses to provide new value to customers and society* Department responsible for promoting materiality initiatives for each metric

30

Kurita Water Industries Ltd. Integrated Report 2023

Kurita Water Industries Ltd. Integrated Report 2023

31

Kurita Group Business Strategy

Sustainability Strategy

Kurita Dropwise Condensation Technology

CSV Business

The Kurita Group has defined products, technologies, or business models that contribute significantly to water-saving,
GHG emissions reduction and resourse recovery or reduction of resource inputs compared to previous levels as the “CSVThe production process at many manufacturing plants uses heat exchangers to heat substances with steam. The steam transfers its heat tothe treated substance via the metal surface of a heat transfer plate and then condenses, forming a film of water on the metal surface, which
is known to be a factor in blocking heat transfer. Kurita Dropwise Condensation Technology induces water-repellent properties in the heattransfer surface of the heat exchanger, thus preventing the formation of a water film and boosting heat transfer efficiency. This in turnimproves productivity and reduces the volume of steam required, which contributes to energy-saving. As the technology works by simply
adding water treatment chemicals to the steam, it allows manufacturers to reduce GHG emissions without needing to stop production
equipment or make a large-scale investment.

Mechanism of Kurita Dropwise Condensation Technology

customers’ operations is calculated based on these CSV business coefficients and application results. The CSV business isalso constantly reviewed in light of the development status of more competitive products, technologies, and business

Active ingredientmodels. The CSV business is an initiative that links the indicators for Shared Value Themes of the Kurita Group’s materiality—

Value provided to customer

Improved water
repellency

solve issues related to water resources, contribute to the realization of a decarbonized society, and contribute to building HG emissions reductionGImprovement of productivity

a circular economy society—with the financial targets for PSV-27. Meanwhile, metrics indicating the contribution of our
CSV business to customer performance in water saving, GHG emissions avoid, resource recovery, and resource input

Kurita Group Overview

business,” and has expressed these advantages as respective coefficients. The reduction of environmental impact from

After application

reduction are used to evaluate the performance of personnel eligible for performance-linked remuneration, such as theexecutive and corporate officers of Kurita Water Industries and the representatives of some Group companies.

Reverse osmosis (RO) membranes have an important function in removing the impurities contained in water and have a wide range ofapplications, for instance in ultrapure water production and wastewater reclamation. With continued use, RO membranes become cloggedwith deposits, which lowers performance, and they therefore require periodic cleaning. Conventional cleaning processes were unable torestore high performance, but with OSCAR, performance after cleaning is almost as good as new. This technology is owned by Avista
Technologies, Inc., which was acquired by M&A. By enabling RO membranes to be reused and restoring their performance, and thereby
achieving reduction of the pump energy required, it contributes to resource recycling and GHG emissions reduction.

CSV Business Promotion System
Selection standards
Products, technologies or business models that meet the following standards withregard to water-savings, GHG emissions reduction, and resourse recovery or
resource input reduction (as of May 2023: 53 items)
RequiredContribute toaction plans aimed
at achieving
the SDGsor

New technologies orapplications of existing
technologies in newmarkets

Management
KPIs

Contribute to
reduction of
Scope 3 emissions
in the Kurita Group

Customer manufacturing plant

Internal awards

Operation ofwide-ranging
businesses

DiversebusinessmodelsDiversesolutions

SelectCreating
sharedvalue withsociety
Environmental
improvement at
customers

Achievements

Higher earnings

BeforeRO membranecleaning under optimal
conditions

After

Used
paper
diapers

Chemicals

Water/
Steam

Resource recycling

Conveyor belt

Separation andtreatment system

Wastewater/Pulp/
Superabsorbent polymer

Drainage
tank

Dryer

Plastics

Recycled plastic raw
material

Drying

Pulps

Draining

Recycled pulp raw
materialpH
Adjustment

Pallets
Trays
Solid fuelDischarge

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

Contribution to resolvingsocial issues
Winning the trust ofcustomers and society

Sterilization/Washing/
Separation/Drying

Kurita Water Industries Ltd. Integrated Report 2023

The components of the membrane
deposit are stained with dye to makethem visible❸ Cleaning(cell tester)A test clean is carried out basedon the analysis results todetermine the optimal chemical
and method for cleaning

Used paper diapers in Japan are mainly disposed of as general waste by incineration facilities operated by waste disposal companies andlocal municipalities. As Japan becomes a super-aged society, the volume of waste is expected to increase. Kurita developed a system thatwashes and separates used diapers for recycling. By adding a bag-tearing function to the system, it is able to process used paper diapers
that are sealed inside plastic bags, improving hygiene and operating efficiency. Used paper diapers are washed and disintegrated by thedevice, then plastics are separated out from the treatment water, which contains pulp. The separated components can be used for
application such as solid fuel or recycling plastic.

Loading

32❷ Test cleaning

membrane fouling

The composition and other details of
the deposit on the RO membrane are
analyzed using a variety of methods toestablish the level of fouling

The Platform for Value Creation

CSV businessInformation, data andexperience related towater treatment inindustry and society

Kurita ❶ Analysis of level of

Used Diaper Separation and Treatment System

Identifying
true issues

Water knowledge

Collect
membraneswithdeteriorating
performance

Returnmembranes
withperformance
restoredRO membrane units

Technology
development
capability

SocialissuesRecommended

OSCAR cleaning process
The Kurita Group’s Businesses

RequiredSignificantly more
effective than previous
or competing
technologies

Performance-linked
remuneration of Kurita
Water Industries executive
and corporate officers andrepresentatives of someGroup companies

Kurita Group Business Strategy

Off-Site Cleaning and Restoration (OSCAR)

33

Kurita Group Business Strategy

Sustainability Strategy

Interview with Corporate Officer Responsible for Sustainability

Hisashi Tanabe

Q. Kurita has put CSR at the core of management, but PSV-27 broadens this further to encompass sustainability. Why did you adjust your approach?
dovetailed perfectly with management’s desire towere keenly aware that they needed to rethink the Kurita

transform its business based on customer and social

Group’s business from the perspective of not only

value, epitomized by our CSV businesses helping to spreadcustomer value, but also social value. This process started

the concept of sustainability to all corners of the Group. I

by viewing the creation of shared value with society fromsee this as one of the main achievements of MVP-22.
When we formulated PSV-27, we positioned the Kurita

naturally expanded to include the concept of sustainability.

Group’s Materiality as integral to realizing the Corporate

This broader approach prompted us to review the Kurita

Vision. The E&S Committee, now known as the SustainabilityGroup’s materiality for PSV-27. CSR activities were

Committee, played a central role in identifying and defining

extended to cover sustainability because Kurita is

the Group’s materiality, drawing on the opinions of external

essentially a group of people who are genuinely interested

directors. The contribution of the external directors raisedin contributing to society and improving the environment

the level of discussion, resulting in an ambitious set ofthrough the Group’s core business of water. This interest

materiality themes and related KPIs.

Q. What was the thinking behind your decision to establish the Sustainability Division?
Division, which will focus on improving the Group’s

Committee, etc., corporate governance structure after

financial value through the execution and supervision of

approval at the Ordinary General Meeting of Shareholders

management plans and financial strategies, and thein June 2023. Ahead of the transition, internal organizations

Sustainability Division, which will work to create value overwere realigned to support the implementation of PSV-27,

the medium to long term. We therefore decided towhich was launched in April 2023.

consolidate the Group’s various functions for promoting

The new corporate governance structure clearly

ESG into the Sustainability Division to ensure strategies

separates oversight and executive functions, allowing theare developed and implemented in an integrated manner.

Board of Directors to focus on setting the general direction

To transform Kurita into a corporate group that increasesof management strategy and increasing corporate value

both financial and non-financial value, the two divisions willover the medium and long term. In line with this change,

work together to reinforce management from short-term

organizations supporting management were realigned intoand longer-term perspectives.

needs to pivot to businesses that provide high value tocircular economy by cutting energy consumption and bysociety, as well as customers, and expand business models

reducing and reusing waste. Under MVP-22, we developedthat embody that approach. This is the Sustainability

CSV businesses that are more effective than legacy

Division’s mission.

Q. W
 hat is Kurita’s stance on disclosing sustainability information, and what are
the issues it faces in responding to the disclosure requirements of TCFD* andother international frameworks?
Our basic stance is to rigorously respond to ESG-related

within the Group of the necessity and importance of

disclosure needs in accordance with international

information disclosure. The members of the Sustainability

frameworks and standards. One of the issues we face isCommittee include the general managers of corporate

how to link financial information with expected futureand business divisions. The committee will therefore be andisclosure requirements for non-financial information. We

important forum for ensuring they lead initiatives onwill need to create a system that can simultaneously

sustainability in line with the Group’s unified approach.

identify and capture the correlation between the two types* TCFD: Task Force on Climate-related Financial Disclosuresof information. This will mean further raising awarenessQ. H
 ow should human resource development and personnel systems be
designed to improve Kurita’s competitiveness?
The Kurita Group aims to provide customers and society

diversity within each employee and organization andwith value unique to Kurita. To achieve this, our mainleveraging it to provide value for customers and society.

objective for human resources and internal organizations
is to foster a shared feeling of “caring about water and the

I believe the Kurita Group’s sustainable growth isenvironment” while balancing that with “diverse opinions,dependent on creating the conditions for realizing theexpertise and experience to drive innovation acrossCorporate Philosophy. In other words, we have to create avarious customer contact points,” in line with ourpositive cycle where we continue to provide value tocorporate vision. To bring together this shared thinking

society through solutions based on water technologies

and diversity, and to enhance unity and strengthen

drawn from various industries and customer sites, whichcohesion, we have to ensure our people are more invested

in turn allows us to reinforce human resources,in the Kurita Group’s common approach, starting with atechnologies and processes, further enhancing Kurita’s

Corporate Philosophy that is relevant to everyone. We also

unique value. That will mean driving the whole Groupneed to foster greater employee engagement by instilling

forward in line with the principles of ESG: setting theour Values that are shared and highly regarded across the

direction of our business from the standpoint of social

Group. We will also promote diversity and inclusion byvalue (E), enhancing and leveraging the capabilities of ourincreasing and utilizing personnel with diverse knowledge,

people ― the driving force of our business (S), andexpertise and experience to create diverse, welcoming

continuously and effectively reinforcing the Group’s

workplaces. I think the Kurita Group can derive aprocesses and systems (G).

competitive advantage by combining this unity andCorporate & Financial Information

Kurita transitioned to a Company with a Nominating

contribute to the creation of a decarbonized society and a

The Platform for Value Creation

the perspective of CSR, which led to initiatives thatreflected in higher profit margins. In this way, the GroupThe Kurita Group’s Businesses

During the five years of MVP-22, members of managementbusinesses. The value these new businesses provide isconserve water by solving water-related issues, they also

Kurita Group Business Strategy

Corporate Officer
Executive General Manager of Sustainability Division

The Kurita Group’s products and services not only help to

Kurita Group Overview

We will help build a corporate groupthat delivers sustainable growth froman ESG perspective, leveraging
the social value Kurita creates throughwater as a competitive advantage.

Q. W
 hat are the key factors for creating social value and driving the Group’s growth?

two divisions ― the Corporate Control and Administration

34

Kurita Water Industries Ltd. Integrated Report 2023

Kurita Water Industries Ltd. Integrated Report 2023

35

Section 3:

Electronics Industry Segment

The Kurita Group’s
Businesses

Electronics Industry Division

semiconductor manufacturing sites will give us the opportunity
to promote the Kurita Group’s technological capabilities tocustomers in markets where we have not had a presence
before. We also see growing needs for reduced environmental
impact as a chance to demonstrate Kurita’s competitive
advantages in an area where we can effectively leverage knowhow gained through our ultrapure water supply business.

Global Semiconductor Sales (billions of US dollars)

Kurita Group Overview

We will continue to drive the Kurita Group’s
earnings growth by combining our proposal
capabilities with speed to be the indispensable
partner for electronics companies expanding
their operations worldwide.

companies, we face the challenge of increased competition to
attract and secure personnel for our own business. We
therefore need to continue efforts launched under MVP-22 todevelop digital technologies that expand the Group’s
engineering capacity. In terms of geopolitical risks, supply chain
disruption such as parts and materials shortages are a risk forGroup procurement activities, but the global reorganization of

1,000
800
600

Executive Officer
Executive General Manager of Electronics Industry Division
Chief Business Officer for Electronics Industry

400

Forecast

200
0

2010

2011

2012

2013

2014

2015

*Source: Kurita based on Omdia data (as of May 2023)

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Kurita Group Business Strategy

Katsuya Amano

Our Role in the Kurita Groupchemicals. Excluding precision tool cleaning, the division is now
responsible for all the Group’s operations in the electronics
industry, including both Japanese and overseas Group
companies. Our main objective is to expand the electronics
industry business to further reinforce the Group’s earnings
base. We will do this by optimizing all areas of our global value
chain to improve efficiency and by rapidly rolling out effective
approaches to all corners of the electronics industry.

Achievements and Challenges under MVP-22
business, and built up our track record in recycled water supply
services and pure water supply services in Japan and China.
However, we also faced a number of emerging issues.
Meeting customer demands for project delivery became morechallenging. In addition to accelerated plant startups, customers
are investing more in single projects in pursuit of greater
productivity. Supply chain disruption amid rising geopoliticalrisk also impacted project delivery. Against this backdrop, theGroup has limited prospects for continued growth unless it
overhauls its entire value chain to remain competitive in an
expanding market.

The semiconductor market is expected to weaken in thecurrent fiscal year before regaining strength next fiscal year andsubsequently expanding to record levels. In this context, theelectronics industry faces the twin challenges of a shrinking

36

Kurita Water Industries Ltd. Integrated Report 2023

workforce and geopolitical risks. Staffing shortages are likely to
be a major business opportunity for the Kurita Group, as
customers increasingly outsource non-core water treatment
management operations. However, along with partner

technology in design and procurement processes to end ourreliance on certain personnel, and improving the accuracy ofdemand forecasts and creating strategic inventories.
Europe and the US are becoming increasingly important
markets as chipmakers reshore their operations. As a businessfocused on Japan and East Asia, that means we also need tomove into the electronics industry markets in Europe and theUS. We have already made some moves in Europe, acquiring
Germany’s Arcade Engineering in July this year. Europe is home
to many plants that manufacture power semiconductors, apromising growth market. We aim to develop our service
business for these potential customers by leveraging Arcade
Engineering’s existing business base in Europe, using our
experience in Japan and combining the Group’s wide range of
products, technologies and business models. In the US, wehave dispatched engineers from Japan to local Group company
Kurita America to collaborate on raising skills levels. To expand
our presence in the US, we first plan to acquire water treatment
facility projects as a starting point for our business. We plan touse a modularized facility approach combined with engineering& procurement (E&P) principles to achieve rapid facility startups. Ultimately, we want these projects to lead to thedevelopment of our services business.
We believe the Kurita Group’s strength lies in its ability todevelop proposals and technologies that comprehensively
optimize water and energy use from a plant-wide perspective,
drawing on the capabilities cultivated in our ultrapure watersupply business. By fully leveraging this strength to help
customers address ever-evolving challenges in a rapidly changing
market, we will contribute to the development of the electronics
industry overall as an indispensable partner for customers.

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

Risks and Opportunities

Under PSV-27, we will diversify and deepen our service menu
and increase the speed of service provision to expand ourcustomer base, aiming to establish a presence in growthmarkets while also pursuing greater business scale andearnings growth.
We will develop our water supply services, including
ultrapure water supply, into a key source of earnings. Our
customers in this area are facing a variety of different issues,
such as staffing shortages, growing awareness of environmental
issues, rising plant operation costs due to inflation, and theneed for rapid plant ramp-up. We will seek to accurately identify
the different needs and value priorities of each customer, andcombine and adapt various types of services to expand ourcustomer base and adapt our services for a broader range ofapplications. Specifically, we plan to provide value through threedifferent models: (1) reclaimed water supply service and purewater supply service using standardized products, (2) thepurchase and operation of customer facilities using new,efficient facility management approaches, and (3) reduction in
total cost of plant operations. Using these new models, we aremaking progress in negotiations with customers who have notshown an interest in the Group’s conventional services so far. In
future, we also plan to roll out services that are compatible withlocal communities, including where our customers operate.
We will also transform engineering processes to improve ourability to respond to growing markets. Current processes are
becoming increasingly complex due to ongoing changes andimprovements, preventing us from responding properly to theaccelerating pace and size of customers’ capital investments.
Over the next five years, we will make far-reaching changes tothe division’s structure, aiming to provide value in terms ofspeed, as well as quality. This will include adopting digital

The Platform for Value Creation

During MVP-22, semiconductor-related investment accelerated
worldwide, partly due to advances in digitization triggered by the
COVID-19 pandemic. This also drove strong growth in the Kurita
Group’s electronics industry business. In Japan, ultrapure watersupply and other services for the electronics industry expanded,
while in East Asia-ex Japan, improvements in the sales andtechnical capabilities of local Group companies helped drive
business growth and reduce costs, leading to an improvement in
profitability. Amid the Group’s pivot to value-driven businessmodels, we also developed new recurring contract-based
services to complement our existing ultrapure water supply

Our Goals for PSV-27

The Kurita Group’s Businesses

The electronics industry business is the Group’s main source of
earnings, but it needs to keep fulfilling this role to allow theGroup to continue its transformation while generating
sustained growth. The Group’s reorganization in April 2023
included the creation of the Electronics Industry Division, whichbrings together a range of functions ― from marketing toengineering and development of water treatment facilities,
water supply services, maintenance and water treatment

37

The Kurita Group’s Businesses

Electronics Industry Segment

TOPICS

Precision Cleaning Division

Services using
standardized products(reclaimed water supply,
pure water supply)Services adapted to facility
scale (use of small- to
medium-sized facilities
and existing facilities)

Existing business domains

Facilities MaintenanceVision for the Precision Cleaning Divisioncompanies and accelerate the pace of decision-making aroundbusiness strategies. In this way, we aim to expand the presenceof the Kurita Group in the field of precision tool cleaning, an
indispensable aspect of the electronics industry, helping todrive business expansion and profit growth.

Our Goals for PSV-27

Kurita Water Industries Ltd. Integrated Report 2023

Area-based watersupply and resource
recycling

North America/
Europe water
treatment facilities
business

Precision toolcleaning businessNew business domains

Acquisition of water treatment facility business foundation in Europe
In July 2023, we acquired shares in German water
treatment facility manufacturer and distributor Arcade
Engineering GmbH, making it and its group companies
consolidated subsidiaries of Kurita. By doing so, we
acquired the local manufacturing bases of water
treatment facilities businesses serving the European
electronics industry and the associated supply chains.
Arcade Engineering has advanced technologicalcapabilities, allowing it to independently design and installultrapure water manufacturing facilities, and operates abusiness model based on a high level of customer
intimacy, with engineering staff permanently stationed in
the plants of semiconductor manufacturers and othercustomers to provide problem-solving consultancy. With
the introduction of the European Chips Act and otherfactors driving increased demand for water treatment
facilities to serve the electronics industry, our response

will be to leverage the business foundation we have now
acquired to offer highly competitive solutions drawing on
synergies between the Arcade Group’s customer networkand solution capabilities and Kurita Group products,
technologies, and business models.
Established

1992

Bases

Germany, France, Switzerland, Singapore

Business
activities

Design/engineering, installation
management, and consultancy for
ultrapure water manufacturing facilities
and other water treatment facilities for theelectronics industry

No. ofemployees

Approx. 150

Corporate & Financial Information

38

With a new organization to manage the precision tool cleaning
business in an integrated manner, in terms of increasing
diversity in the business and among our customers, we will
work to share the customer base across the Group and rollout best practices horizontally, as well as expanding services
aside from parts cleaning, such as setting up and managing
clean rooms at customer plants. Moreover, to curb fixed costs,
we have started to explore ways of automating the cleaning
method and improving efficiency through an AI-based
proposal process, seeking to harness digital technology toaddress labor-intensive operations.
Starting in April this year, a joint team from Japan and the
U.S. is holding weekly meetings to actively exchange opinions
on various functions, including technology, engineering, andsales. My challenge is to drive organizational unity andmotivation to make the Kurita Group a top player in precision
tool cleaning, providing high-quality services on a global scale.

Resin and membrane
recycling service

Precision toolcleaning business(expansion ofbusiness domains)

The Platform for Value Creation

Under the MVP-22 plan, the precision tool cleaning businessgained a much larger presence with the acquisition of U.S.-based
Pentagon Technologies Group, Inc. Given the nature of thebusiness, which involves cleaning the manufacturing equipment
parts in use at customer plants or newly delivered, growth in theelectronics market means an opportunity to expand earnings.
When the market is in a downtrend, however, the burden of fixed
costs becomes an issue in terms of the facilities and personnel
needed for cleaning.
Under the PSV-27 plan, the precision tool cleaning businessaims for ¥45 billion in net sales, roughly 1.5 times the level ofthe fiscal year ended March 31, 2023. To reach this goal
requires that we create a structure that is resilient to market
changes by expanding our business and customer base andreforming our cost structure, in addition to responding to thecleaning needs of customers appropriately in a way that taps
into recovery and growth trends in the semiconductor market.

Challenge domains

Solutions for total cost
reduction in plant
operations

The Kurita Group’s Businesses

We established the Precision Cleaning Division in April 2023 as
an independent organization to run the precision tool cleaning
business, providing integrated management of two groupcompanies that operate in Japan and the U.S. Building on thisframework, we will generate further synergies between the two

Ultrapure watersupply businesscombination of services that can respond accurately tothe different issues and value priorities of customers. We
will also seek to expand the operation of the facilities
business into new regions and to move into new businessdomains targeting local communities, for instance byimplementing resource recycling systems that cover anindustrial zone including customers’ plants.

Kurita Group Business Strategy

Corporate Officer
Executive General Manager ofPrecision Cleaning Division

Our provision of products and services for the electronics
market, which started with water treatment facilities andrelated maintenance, has progressively expanded toinclude the ultrapure water supply business and theprecision tool cleaning business. Under the PSV-27 plan,we will work to expand our customer base and the fields
we cover by offering a diverse array of businesses with a
Customer base

Shingo Yamaga

Rolling out a wide range of service businesses focused on value

Kurita Group Overview

We will integrate the precision tool cleaning
business globally to build a stable businessfoundation as a pillar of Group profit.

Kurita Water Industries Ltd. Integrated Report 2023

39

The Kurita Group’s Businesses

General Industry Segment

Regional Management Division

Eiji Yonese
Corporate Officer
Head of Japan Region,
Regional Management Division

In Japan, the Kurita Group has 11 sales companies that provide
water treatment solutions optimized to the regions andcharacteristics of a wide range of customers in general industry.
For many years, we have supplied water treatment chemicals,
maintenance services and water treatment facilities throughour extensive contact points with domestic customers. Utilizing

Kurita Group Business Strategy

Yasuo Suzuki
Senior Managing Executive Officer
Executive General Manager ofRegional Management Division andChief Business Officer for General Industries

this expertise and long track record allows us to address andsolve their problems. Leveraging this strength, we aim to be aninvaluable partner with detailed knowledge of the challenges
customers face in their operations.
Like other markets, Japan is expected to see an accelerating
shift to carbon neutrality and the circular economy, which
presents opportunities to promote the value of our CSV
businesses. To do this, we have to expand our customer
contacts, not only with site personnel, but also with key people
in management and sustainability departments, to accurately
understand issues in their businesses and select the optimal
solution from a wide range of options. By joining the Regional
Management Division, we will be able to maximize all of theGroup’s accumulated information and experience, allowing us
to actively draw on successful models from other regions
without being limited to existing ideas and approaches in Japan.
In this way, we aim to improve the quality, quantity and speedof our proposal activities, supporting the growth of customers
and society as a whole by expanding our CSV businesses.

Kurita Group Overview

We aim to become the world’s leading
water company—and a truly global company—by promoting internal competition andcollaboration that goes “Beyond the Borders.”

Japan Region

Our Goals for PSV-27

40

Kurita Water Industries Ltd. Integrated Report 2023

Jordi VERDÉS Prieto
Executive Officer
Head of EMEA & Americas
Region, Regional
Management Division

I joined the Group after Kurita’s first European acquisition in 2015.
Since then, the Company has gone through a radicaltransformation with several M&A and organic growth. Now it is agreat honor for me to become an Executive Officer of theCompany and take responsibility for the EMEA & Americas region.
During MVP-22, we went through a process of integrating
and revamping our activities in EMEA, and the region achieved
genuine integration and alignment into Kurita’s global strategy
and profitability targets. We will now accelerate the sameprocess in our activities in the US. We have defined priorities
and focused on real added-value business, and we will realignthe facility business to focus on the semiconductor industry
and expand CSV businesses.

Going forward, we foresee some positive influences fromexternal factors. Like the fact that there is a strong drive in the
US and EU to reshore the semiconductor industry. Anotherimportant driver is GHG emission reduction, with all industries
finally including this in their targets. These are of course
opportunities for the Kurita Group, which is involved inbusinesses targeting the electronics industry. To realize theGroup’s future development and capture these business
opportunities, we will focus on the attraction, retention,
engagement, and development of human resources. There is a
global fight for talent. In the EMEA & Americas region, it has
become essential to work on employer branding and offer
attractive and modern working conditions. Younger generations
value flexibility and put greater emphasis on corporate
purpose. Kurita is aligned with this thinking, so we are in aperfect position to attract new talent.
I am confident the EMEA & Americas region can leverage its
diverse workforce and business models to contribute to theGroup. We are also aiming to diversify our customer base andgrow further by winning business from companies that areheadquartered in the US or EU. My personal target is that at
the end of PSV-27, this region will be one of the pillars ofKurita’s talent pool, revenue, and profitability.

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information"Beyond the Borders" events are designed to promote internal collaboration worldwide

EMEA & Americas Region

The Platform for Value Creation

we need to be the leading company in each region and haveproducts and services that can be deployed anywhere acrossthe globe. Our employees also need to be strongly committed
to both those goals. To achieve this, the Regional Management
Division has established a policy of "Beyond the Borders,"
promoting internal competition between different regions tomutually strengthen their capabilities and internal collaboration
to share customer feedback and sales information. Throughthese activities that go beyond international borders and arebacked by our united global team, we will work to out-compete
rivals to become the world’s leading water company.
To embed this policy in our organization, we hold events
around the world for international team members to meet face
to face. These events give everyone the opportunity to take partin intense, passionate discussions about various topics,
including CSV businesses, the Group’s main growth driver. The
Kurita Group is now embarking on a new phase of global
management, underpinned by our "Beyond the Borders" policy.

The Kurita Group’s Businesses

During MVP-22, the Kurita Group actively used M&A to establish
a global business structure anchored by four regions ― Japan,
Asia, North and South America, and EMEA. In 2014, overseas
markets generated roughly 20% of the Group’s net sales, but
this had increased to around 50% by the fiscal year ended
March 31, 2023. Under PSV-27, Kurita’s priorities will shift frombuilding a global business to implementing a truly global
management approach.
We also worked closely with teams worldwide to overhaul
our sales structure, giving us the framework to quickly deploy
our services in the general industry business, which serves
customers in many different industries worldwide. Fourorganizations – Japan, China, ASEAN, and EMEA & Americas –are responsible for rapidly supplying products and services
tailored to the regional and market characteristics of theirareas, while the Regional Management Division provides overall
direction and promotes collaboration and information sharing
between the four regions. To become a truly global company,

41

The Kurita Group’s Businesses

General Industry Segment

China Region

Kurita Water Industries Ltd. Integrated Report 2023

The two key themes for the Industrial & Social Infrastructure
Division are “creating new solutions in existing business fields”
and “developing new businesses.”
We have developed close business relationships withcustomers in many industries by providing water treatment
products and services, not only for utility equipment, but also
for production processes. Our main customers are in the three
key markets of petroleum, pulp & paper, and steel, but we also
work with the electric power and public sectors. Our customers
also need to solve significant social issues related to theiroperations, such as reducing environmental impact, due to theconsiderable scale of their business sites and the large
volumes of materials and energy they use. To address this, wehave developed new services that provide both customer value
and social value. One example is our monitoring system forsteel raw material yards at steelmakers. The system uses
sensors and digital analysis technology to visualize risks causedby moisture and develops raw material management plansthat prevent degradation in material quality. These solutions
help to improve steelmaker productivity and avoid GHG
emissions. In this way, we continue to create new value forcustomers backed by a deep understanding of their businesses
and the use of digital technology.
In terms of new business development, we are working toestablish new customer contact points with a focus on thecircular economy, and build them into future key businesses for
the Group. The Kurita Group has typically provided solutions
that use technology to remove foreign materials from water,
but by refining this technology, we can now recover thesematerials and convert them into valuable resources. One new
project in this area is Used Diaper Separation and Treatment
System, which separates and treats all materials in useddiapers. Used diapers are usually incinerated, but this systemsterilizes and cleans the constituent materials and separates
them into plastic and pulp for processing as raw materials or
fuel. This helps to reduce waste volumes and energy used inincineration, contributing to lower GHG emissions.

Used Diaper Separation and Treatment System
Expanding a
resource recycling
business throughcorporate
collaboration

Used
diapers

Separation and Treatment System

Recycled plastics
Superabsorbent
polymer
Pulp
Supporting
resource recycling
through theprovision ofsystems

The Kurita Group has diverse contact points with customers
in a wide range of industries, and with local governments andpublic agencies. Material considered as waste by some of theseusers is seen as resources by others, and our extensive network
means we can connect these dots and play our part in building
a circular economy society.

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information42

Our Goals for PSV-27

The Platform for Value Creation

Countries in the ASEAN region each have different coreindustries. Singapore and Malaysia are focused on electronics,
while Thailand’s main industry is automotive manufacturing andIndonesia’s is energy and mining. Overall, however, ASEAN has
a wide range of different industries. During PSV-27 we aim todevelop our business in ASEAN by building a balanced andstrong market base across the entire region while increasing
Kurita’s presence in core industries in each country.

Corporate Officer
Executive General Manager of Industrial &Social Infrastructure Division

Separation

Ayato Onuma
Head of ASEAN Region,
Regional Management Division

Under this strategy, we have formed a working group
comprising representatives from each of Kurita’s five operatingcompanies in the ASEAN region to implement working group(WG) activities. These WG activities integrate all the corefunctions of each company ― sales, procurement and backoffice support ― and deploy them throughout ASEAN. We arealso using WG activities to accelerate the expansion of our CSV
businesses. This structure has become one of the strengths of
the ASEAN business and has already delivered solid results interms of CSV business expansion, improved profitability andproductivity gains compared with the rest of the Kurita Group.
However, to ensure sustained growth, we also have to create
new CSV businesses. That’s why we will work with Kurita R&D
Asia Pte. Ltd., our R&D base in Singapore, to launch newly
created businesses and provide ASEAN-developed CSV
businesses to other areas of the Group.
Through these initiatives, we want to contribute to theGroup’s overall growth by boosting profitability, while also
focusing on creating social value by making employees moreengaged and more invested in contributing to society.

Takehiro Nozue

The Kurita Group’s Businesses

ASEAN Region

Contributing to the Kurita Group’s sustainablegrowth by creating new solutions in existing
business fields and developing new businesses

Kurita Group Business Strategy

In China, the Group has two subsidiaries serving generalindustry ― Kurita Water Industries (Dalian) Co., Ltd., which has
been developing its water treatment chemicals business in
China for some time, and Kurita Water Industries (Taixing) Co.,
Ltd., which started operation in March 2023. Kurita Water
Industries (Taixing) is a manufacturing base for water treatment
chemicals, but has also constructed a proprietary
polymerization facility that allows it to play a key role in the

Kurita Group Overview

Yukihiro Iwata
Head of China Region,
Regional Management Division

supply of raw materials to Group companies in other regions.
Also, by working with another local subsidiary, Kurita Water
Industries (Suzhou) Ltd., which provides water treatment
facilities and maintenance services primarily for the electronics
industry, we are able to provide a range of optimal solutions
that address customer needs.
For the past few years, our China business has faced very
challenging conditions due to restrictions on mobility to control
COVID-19 and changes in the operating environment. During
PSV-27, we aim to expand and improve the profitability of the
China business by putting it back on a growth trajectory, led byexpansion in CSV businesses. Given China’s wide range ofindustries and its good balance of local and overseas
companies, we aim to expand our CSV businesses throughout
China by actively rolling out successful models from China andother regions. We will also continue to enhance our operationsin China and develop new models.
As the head of the China region, my mission is to reinforce
Kurita’s brand power in China through CSV business expansion
and ensure Kurita is a satisfying and enjoyable place to work for
local employees.

Industrial & Social
Infrastructure Division

43

The Kurita Group’s Businesses

Engineering Strategy

Executive Officer
Executive General Manager of Engineering Division

The value that customers want is becoming increasingly diverse,going beyond more than just cost and quality. The
semiconductor manufacturing sector is a case in point.
Companies continue to invest heavily and the rapid pace of
project startup is unprecedented. Under PSV-27, to better
respond to these needs, we will focus on transforming
engineering processes and reinforcing supply chains.
Specifically, we are stepping up collaboration across ourvalue chain ― from sales through to engineering ― andimproving our proposal capabilities to offer more options tocustomers as their partner from the planning phase, rather
than simply waiting for customers to give us their specifications.
By being involved at an earlier stage of the project, we can

improve the accuracy of engineering plans and demand
forecasts, mitigating risks in project delivery management andprocurement. By continuing to drive DX, we will also extend theuse of AI technology from design automation into other areas,such as optimizing construction plans and automating costestimates, aiming to increase competitiveness by reducing
delivery times, lowering costs and improving quality. In this way,
we aim to increase value for customers by improving efficiency
and speed in project areas where digital technology can beapplied, while at the same time proactively allocating morehuman resources and time to key areas where people makethe difference in value proposals.

Production Process Reform and Supply Chain Strengthening
BeforeAfter

DesignDemandforecasting

DesignProcurement

Procurement

Manufacturing to construction work

Manufacturing toconstruction work

Post-handover follow-ups(New value)

Kurita Group Business Strategy

Kunihiro Kuse

Our Goals for PSV-27
Kurita Group Overview

In engineering processes anchored by safety,
security and stability, we aim to build a global
engineering system that offers new value tocustomers through DX and collaboration withpartners inside and outside the Group.

Achievements and Challenges under MVP-22• Adopted and expanded
scope of DX-based
automated design

Shortened production
person-hours• Sharing of materials• Logistics rationalization

Cost reductions

Taking these proactive steps is important, but the Engineering
Division also needs to stay focused on defensive areas such as
safety, security and stability. To ensure reliable supplies of water
treatment chemicals and advanced functional materials tocustomer sites, we will continue to improve manufacturing
processes to reduce costs, while also maintaining stable
operations. In addition, to reinforce quality management, we will
rigorously enforce safety models embedded during MVP-22 that
accumulate and systemize information about non-compliant
quality issues to anticipate and prevent any recurrence. Frontline
business sites face the highest risks in terms of safety andquality. To simplify and reduce the time needed for onsite
engineering processes, we will reduce the actual volume ofonsite work using modularization, where facilities are fabricatedoffsite wherever possible and assembled onsite.

• Shift to in-houseproduction• Modularization

Quality improvements(stabilization of supply)

Another important issue we have to address is developing
human resources who can drive the transformation of theKurita Group’s engineering activities. These activities require
not only specialized knowledge related to water treatment, butalso expertise in manufacturing, extensive onsite experience,and the ability to access and apply large amounts of data.
Developing human resources with all these skills is not easy. We
are making some progress in this area, but it requires a longterm commitment and repeated practice, where the employee
themself has to set their own objectives based on a clear vision
for what they want to achieve and what their team expects. Our
goal is to be less dependent on certain individuals by utilizing
digital technology and systems, backed up by teamwork.

Corporate & Financial Information

Kurita Water Industries Ltd. Integrated Report 2023

• Improved coordinationof information withsales teams

The Platform for Value Creation

44

of digital technology, and without any drop in quality. This is
more than just a superficial change in working practices ― wenow share work tasks more widely within our organization
instead of relying on the skills of certain individuals, helping toincrease the speed, quality and volume of work.
We also put in place a global engineering system to coincidewith the Group’s shift to a global business structure anchoredby four regions. In procurement, we used our Global Supply
Team project, which optimizes Groupwide procurement andmanufacturing activities, to secure stable supplies of raw
materials for water treatment chemicals, which were affectedby the pandemic and the war in Ukraine. We also expanded thescope of these procurement efforts to include facility parts andmaterials, creating a procurement framework that mitigatesrisk. However, we faced a number of challenges during MVP-22.
Structural changes in supply chains due to geopolitical risks andchanging societies led to shortages of raw materials andcomponents, longer delivery times and higher prices, requiringa more flexible approach in engineering and construction,
including from the standpoint of human resources.

The Kurita Group’s Businesses

One of the outcomes of MVP-22 is that the Kurita Group’s
actions are now based on how best to deliver value tocustomers. Our customers are increasingly tackling diverse
issues, such as environmental issues as well as businessgrowth. In responding to these individual customer needs, theEngineering Division now proactively considers what kind ofvalue the customer wants from various perspectives. I believe
this approach, which is now embedded in our division, is one of
the main achievements of MVP-22.
During the plan we also succeeded in maintaining andimproving the quality of engineering work. This was achieved byadopting automated layout design processes in partnershipwith Fracta Leap Inc., and codifying and systemizing issues frompast projects to anticipate and prevent any recurrence of noncompliant engineering work and workplace accidents. This
information has been compiled in a detailed database that canbe shared with other parts of the Group. Another key change
during the plan was triggered by the COVID-19 pandemic, which
made us realize that the work we previously thought could only
be carried out onsite can now be done remotely with the help

Kurita Water Industries Ltd. Integrated Report 2023

45

The Kurita Group’s Businesses

Engineering Strategy

Quality and Safety initiatives

Basic Concept
engineering processes. That’s why we have formulated the Kurita
Group Product Quality Policy and the Kurita Group Occupational Healthand Safety Policy and are working to embed them across the Group.

Promotion Framework
Quality and Safety Reporting System
President and Representative Executive Officer
Executive General
Manager ofEngineering Division

ReportSystem to Anticipate and Prevent Workplace Accidents (K-SAT)

Officer in charge of quality and safety
Aggregate and manage information

K-SAT cycle

Coordinate

ReportReportReportHeadquarters
Health and Safety
Committee /Quality
Management
Committee

Kurita’s
departments
responsible for
quality and safety

Japanese Group
companies

Overseas Group
companies

Record knowledge

Knowledge database

Previous cycle

Aggregate accident information

Conduct risk
assessment

Onsite and manufacturing
processes

Kurita Group Product Quality Policy
Basic Policy

Kurita Group will speedily provide our customers withproducts and services that can meet their quality
expectations, thereby winning unshakable trust.

Deployment of Model to Anticipate and Prevent Non-Compliance Issues
R&D

Sales

2) We will actively disclose appropriate information concerning
products and services and provide safe and secure products
and services.

Engineering
designInspection

Engineering

Test operation

MaintenanceOperational
management

Model to anticipate / prevent non-compliant issues (quality)

In order to achieve the goal of the above basic policy, we will
implement specific measures through the following approaches.
1) We will establish a quality management system suitable forthe business environment and continue improvement
activities to enhance customer satisfaction.

Planning &designExpand to moreareas in future

Japanese Group companies

Expand to moreareas in future

Overseas Group companies
Model to anticipate /prevent workplace accidents (safety)

Corporate & Financial Information3) We will determine quality control processes and criteria,
properly operate them, regularly confirm the operation status
and thereby secure the quality of products and services.
4) W e will promote the development and improvement of
products and services considering environmental impact
and contribute to environmental preservation.

46

Kurita Water Industries Ltd. Integrated Report 2023

The Platform for Value Creation* SDCA: Standardize → Do → Check → Act cycle

Construction and manufacturing plans

Enhanceorganization’s
ability to anticipate
and prevent
accidents

Case studies of accidents
and near-misses

The Kurita Group’s Businesses

Improving the Quality of Products and Services

Knowledge with enhanced reusability
Categorize knowledge

Use knowledge toprevent workplace
accidents

Checklist to prevent repeat incidents
Accident fault tree analysis

The Kurita Group has established a Groupwide Quality Management
Committee to improve the quality of products and services. The
Quality Management Committee is composed of a committee thatoversees all the Group’s activities and subcommittees focused oneach business.
In the fiscal year ended March 31, 2023, one of our initiatives toimprove quality was “change point management,” an approach thatallows us to predict and anticipate changes that could impact quality.
Using change point management, we work to prevent defects andother anomalies from occurring by accurately capturing andcontrolling any changes in our operations, which can be adjustments
to a manufacturing process, for example, or slight changes arisingfrom modifications in other areas of our business. In the fiscal year
ending March 31, 2024, we will continue to optimize the Quality
Management System (QMS) by enhancing change point management
in response to developments in the operating environment. We will
also establish autonomous and rapid SDCA* and PDCA cycles byimproving internal audits.

our ability to predict, identify and respond to potential accidents,
based on historical workplace accidents and conditions at each site.
In July 2022, we also officially launched the Kurita-Safety Approach
Tool (K-SAT), which is designed to anticipate and prevent any
recurrence of accidents. K-SAT stores knowledge from past
workplace accidents in its system, which can be accessed and usedby authorized parties when needed. By effectively using this type oftool, we can ensure that all knowledge from previous workplace
accidents is included in risk assessments, supporting theimplementation of comprehensive measures at worksites to preventthe repeat of past accidents. In the fiscal year ending March 31,
2024, we will work to embed these approaches and adopt moreintuitive tools.

Kurita Group Business Strategy

Led by the officer responsible for quality and safety, the Kurita Groupis rolling out quality and safety assurance initiatives across the Groupand monitoring awareness and implementation of related policies,
even during the current restructuring of business sites and offices.
For workplace accidents and products that are not compliant withquality criteria at business sites in Japan and overseas, we havecreated an integrated reporting procedure under the control of theofficer in charge of quality and safety. This mechanism allows us tocentrally collect information and communicate measures throughout
the Group to prevent any reoccurrence.

The Kurita Group positions occupational health and safety as the top
priority in operating its businesses. To ensure the health and safety ofits directors, officers and employees, and to create and maintaincomfortable work environments, the Kurita Group continuously
promotes health and safety initiatives based on a common policy for
all Group companies. We also put integrity at the heart of ouroccupational health and safety initiatives in conjunction with integrity
activities that encourage employees to follow their conscience inmaking ethical and honest decisions.
Kurita’s Health and Safety Committee leads the Group’s
occupational health and safety initiatives. In the fiscal year ended
March 31, 2023, we conducted safety education and training
programs tailored to the characteristics of each business to improve

Kurita Group Overview

The Kurita Group’s initiatives to improve quality and ensure safety at
manufacturing and construction sites not only help us retain the trustof customers and society, but they also underpin all the Group’s

Occupational Health and Safety Initiatives

Kurita Water Industries Ltd. Integrated Report 2023

47

Section 4:

Human Resources Strategy

The Platform for
Value Creation

Overview of HR Strategy

Corporate Philosophy

Basic Concept

Corporate Vision
Pioneering “new value for water” to contributeto the realization of a sustainable society

HR Strategy

D&I Vision
The corporate group that continues to create
unique value through interaction among diverse
people who care about water and the environment
and who accept each other’s differences.

Now(1) Organizations that generate new value by utilizing various
technologies from within and outside the Group as well as
innovation from the combination and integration of businesses
without being shackled by the principle of self-sufficiency anddifferences between organizational units.
Organizations that welcome challenges undertaken with an agile
approach, offer a sense of security in tolerating failures despite
diligent efforts, and value the idea of learning from past mistakes.
(2) Organizations that identify with the corporate philosophy, takepride in work that contributes to society, and work earnestly tosolve issues faced by customers, society, and the global
environment.

Creation ofunique value

Virtuous cycle asa result of
shared value

Harmonizationof individuality

Permeation ofshared values

Changes in the External Environment
Increase inemployeeengagement owing
to identification
with the corporate
philosophy andpermeation ofshared values

 hanging attitude in Japan towards the seniorityCsystem and the concept of life-time employment
Diversification of working styles
Advancements in digital technology and growing
demand for digital specialists

Direction of the Organization
Organizational culture ransformation into a groupTwith a high level of engagementwith permeation of D&I

48

Kurita Water Industries Ltd. Integrated Report 2023

 romote overseas local
P
employees to managementroles
Improve the organization’s
global responsivenessInstill shared values in Group
employees(1) Personnel that use worksite data to identify issues and deliver
solutions and business models through numerous contacts
within and outside the Group.
(2) Personnel that strengthen business with the following thoughts
and actions:• The accumulation of data and information related to water, as
well as customer information, to create explicit knowledge thatcan be harnessed to create and provide value• The utilization of digital tools and other new technologies• The highly accurate and rapid forecasting and quantification of
Kurita’s value(3) Personnel that possess an administrator’s point of view and havethe capacity to think logically.

Changes in the Internal Environment
Global business expansion through M&As
Fiscal 2014

Fiscal 2023

Overseas sales
weightingApprox.
20%

Approx.
50%

Ratio of overseas
employees

Approx.
20%

Approx.
50%

Direction of Human Resources Utilization
Utilizing and securing
human resources

Personnel system ctively utilize engineers inAtechnological fields including
human resources fordevelopment that support
KuritaUse human resources forintellectual property to predictthe direction of development
and maintain the competitive
advantages of development
outcomes
Create new value with humanresources for digital technology

 evelopment of a personnelDsystem providing the Group
with two strengths: cooperation
among human resources andactive participation ofindividuals who possess a highlevel of expertise

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

A workplace endowed with D&I and employee
engagement can evenly harmonize increases indifferences, thus enabling personnel andorganizations to create unique value

Organizational structure

The kind of personnel we seek for bringing our value
creation story to life

The Platform for Value Creation

Increase indifferences

Affinity withour corporate
philosophy

Trust from
customers andsociety

Virtuous cycle asa result of increasein differences

A group of professionals in a range of fields who obtain joy from their contributions to customers, society andthe global environment through their work at the Kurita Group with their commitment to creating new value.

The Kurita Group’s Businesses

Penetration of D&I
owing toacceptance andutilization ofgreater diversity

Human Resources Policy

The kind of organizations we seek for bringing our value
creation story to life

Schematic Flywheel Representation of D&I Vision

Diverse humanresources andexperience

which is the basis of our value creation story — and represents ourbasic policy on the values, thoughts and actions required of Kurita
Group employees. To this we add the changes in the Group’s internaland external environments, while our approach to initiatives isorganized into a course of action for both organizations and humanresources utilization.

Kurita Group Business Strategy

Our D&I Vision in terms of the state of personnel and organizations
when realizing our corporate vision is to be a “corporate group that
continues to create unique value through interaction among diverse
people who care about water and the environment and who accept
each other’s differences.”

We are formulating an HR strategy with which our organizations andpersonnel can give shape to our value creation story by realizing our
D&I Vision.
The HR strategy comprises a human resources policy and anunderlying course of action. The former is arranged around the kindsof organizations and personnel described in our strategic story —Valuecreation
story

Kurita Group Overview

D&I Vision

State of personnel and organizations
when realizing the corporate vision

For the Kurita Group, which provides diverse solutions to society andindustry with the aim of continuously creating “new value for water,”human resources are the driving force behind its sustainable growth.
That is why we continue to implement organizational and personnel
initiatives based on our Diversity & Inclusion (D&I) Vision and Human
Resources (HR) strategy, which are connected to our value creationled business strategy.

49

The Platform for Value Creation

Human Resources Strategy

Promotion Framework

Understanding Employee Engagement
Sustainability Division, in collaboration with the Human Resources
Development Committee and the DX Committee. Reports on the statusof human capital initiatives are submitted to the Executive Committee,
which discusses their content and makes decisions on necessary
measures. The Executive Committee also reports the status of humancapital initiatives to the Board of Directors, which is responsible for theoverall supervision of the initiatives.

Board of Directors: Overall supervision of human capital initiatives
Supervise

Decide / Instruct

Executive General Manager,
Sustainability Division

Discuss / Report

Decide / Instruct

Human Resources Development
Committee and DX Committee

Sustainability Committee

Manages and promotes initiatives
related to development and use ofhuman resources

Promotes and oversees all humancapital initiatives

Develops engineers in technological fields andhuman resources for digital technology, etc.

Japan

China

US

Cooperate

Divisions and business units

Group companies

Fostering corporate culture

Cooperate

0%

Discuss / ReportCompany A
Company B

40%

60%

80%

100%

32%
61%
51%
90%

Company C

Country’s top
25th percentile(all industries)

Issues and responses

28%

39%

Issues: Career and personal development, understanding and awarenessof management policies
Responses: Address Companywide issues and organization-specific issues

74%

86%

Issue: Diversity
Responses: Increase opportunities for dialogue, overhaul compensation
system, promote D&I

64%

75%

Issue: Work-life balance
Response: Review use of leave* Blue = Kurita Group’s percentage is higher
Red = Kurita Group’s percentage is lower

Fostering corporate culture

In order to implement measures while quantitatively monitoring
progress with HR strategy, the Kurita Group has established thefollowing HR strategy KPIs and KGIs. The KGIs and KPIs consist of“materiality,” “quantitative targets,” and “indicators for monitoring
medium-term trends.” By measuring these areas, we are improving
the effectiveness of HR strategy. The indicators include “D&Iexecution level” (measuring the extent to which recommended D&I
actions are being taken to realize the D&I Vision) and “HR system
operation level” (measuring the effectiveness of the HR system).
These are unique Kurita indicators derived from the employee
engagement survey conducted every two years.

To transform Kurita into a highly engaged group with well entrenched
D&I, we are promoting the following initiatives based on the situationin each division and Group company.

1
2

A group of professionals in a range of fields who obtain joy
from their contributions to customers, society and theglobal environment through their work at the Kurita Group
with their commitment to creating new value.

the fiscal year ending
March 31, 2031

KGIs
Continuous improvement in employee engagement scoresa. Percentage of Group companies exceeding all-industry average:
75% (currently 50%)b. Scores from all Group companies surveyed: Continuous
improvement (currently 38%)

Approx. 30%

Approx. 50%
Approx. 80-90%
Approx. 2-8
weeks

Above
previous
surveythe fiscal year ending
March 31, 2026

35%

75%

the fiscal year ending
March 31, 2024

30%

65%

Current levels

27%

4.1%

29%

10.6%

68%
23 days

KPIs

Percentage ofbusiness execution
management roles
filled by women,
foreign nationals
and mid-career
hires

Percentage ofmanagement
roles filled by
women

Percentage ofcareer-track
recruits who
are women

Percentage of
mid-career
recruits in theworkforce

Percentage ofmale employees
taking childcare
leave / length ofleave

Initiative Areas

Approx. 80%

Aboveprevious
survey

73%

32%

59%

43%

D&I execution
level

Percentage of
executives atoverseassubsidiaries
who are local
employees

Percentage ofglobally mindedpersonnel inmanagerequivalent
positions athead office

Level of sufficienthuman resources
for development,
digital andintellectual
property

HR system
operation
level

Securing and utilizing
human resources

HR system

Organizational structure

Expand and utilize human capital

Kurita Water Industries Ltd. Integrated Report 2023

80%

51%

Organizational culture ach Organization Implements Its Own Initiatives toEPromote D&I

Be aware of unconscious
bias and pay attention todiversity

Create a psychologicallysafe workplace

Praise the achievements ofcolleagues and appreciate
their efforts

Learn, take action, andgrow autonomouslyInteract with all kinds ofpeople without falling victim
to differences of opinion

Be unafraid to take risks
and embrace challenges
agilely

Understand the vision

Enhance one’s sense of selfaffirmation

Share your D&I
accomplishments

Senior general managers visit each Employee networking event in Indonesia
business site to explain their division’s
strategies in person

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

40%

Approx. 10%

4

Nine Recommended Actions

the fiscal year ending
March 31, 2028

Approx.
30-40%

3

The Platform for Value Creation

Creating human resources and organizations to realize our value creation story

Acknowledge
Know the D&I Vision
Recognize
Take personal ownership of D&I through workplace
discussions and other activities
Act
Implement the nine recommended actions to realize the
D&I Vision
Transform the business
Create value by putting the recommended actions into practiceIn the fiscal year ended March 31, 2023, we extended our efforts at
Kurita Water Industries to Group companies, focusing on steps (1)and (2). This included activities to promote wider understanding of
the D&I Vision by distributing explanatory videos, holding
presentations about activities within each organization, and runningworkshops, roundtable meetings, and workplace and group
discussions. These efforts helped to lift awareness of the D&I Vision
to over 90% of the workforce. In the fiscal year ending March 31,
2024, we plan to shift the focus to steps (3) and (4). We will ascertain
the D&I execution level through our employee engagement survey,
which will give us insights into how well the actions are taking root
and what improvements need to be made. We will also share bestpractices across the Group to transform our business.

The Kurita Group’s Businesses

Fostering Corporate Culture

HR Strategy KPIs

50

Kurita20%

Country
average (allindustries)

Kurita Group Business Strategy

Discuss / Report* The relationships between employees and company/organizations, and between
employees and their work. We believe that when these relationships are strong
and healthy, it is easier to create a virtuous cycle in which employees are
enthusiastic and motivated to contribute to the Company and its organizations.

Engagement Scores (Percentage of People Strongly Engaged)

ReportExecutive Committee: Overall discussion of human capital initiatives and decisions on measures
Decide / Instructissues that need to be addressed. Using this feedback, we areworking to improve employee engagement based on thecharacteristics of each company and organization. In our second
survey, to be conducted in the fiscal year ending March 31, 2024, weplan to survey 35 companies, including the four companies from lastyear.

To improve employee engagement*, we conduct an engagement
survey every two years to understand current levels of employee
engagement. This helps us to identify issues that need to beaddressed and to implement or upgrade related measures. In our
first survey, conducted in the fiscal year ended March 31, 2022, wesurveyed employees at Kurita Water Industries and three overseas
Group companies. Two of the four companies surveyed (50%)
exceeded the all-industry average for employee engagement in theirrespective countries. We received responses from 96% of the target
group and a total of 2,706 written comments, providing insights into

Kurita Group Overview

All initiatives related to the Kurita Group’s human capital are carried out
under the supervision of the Executive General Manager of the
Sustainability Division, who is also a corporate officer. Measures aimed
at fostering corporate culture are implemented in cooperation witheach division, business unit and Group company. In addition, measures
to develop and utilize human resources – one element of the Kurita
Group’s Materiality – are overseen and deployed by the Sustainability
Committee, chaired by the Executive General Manager of the51

The Platform for Value Creation

Human Resources Strategy

Supporting Mid-Career Hires

Ensuring Diversity

From the fiscal year ending March 31, 2024, we will also holdroundtable discussions for executive general managers and female
employees to engage directly on the topic of female empowerment in
the workplace.

Workshop for team leader candidates

Female Manager Targets and Past Results (fiscal year ending March 31)* Sexual orientation, gender identity, and gender expression

2019

2020

2021

2022

2023

Percentage of female managers

1.1%

2.1%

2.4%

2.7%

Percentage of New graduates
women hired
for careerNew graduatestrack positions & mid-career

21%

19%

33%

15%

20%

Percentage of female managers

9%Percentage of female employees(vs. entire workforce)

24%

April 2023

2028

Targets

Results

4.1%

5% or
higher

4.2%

Around
10%

24%

31%

30%

35%

―

33%

28%

29%

―

―

Around30-40%

10%

12%

13%

13%

24%

25%

25%

25%

2031

Based on feedback from our employee engagement survey, which
identified the need for systematic career development support, we
reorganized human resource development from three standpoints –experience, advice, and training. We started implementing training
programs based on this new approach from the fiscal year ended
March 31, 2023.
The Group emphasizes experience in employee growth anddevelopment. To give employees more experience, we will use
information from career preference surveys and our internal talentmanagement platform to create a system that encourages
experience. We will also provide career development support and use
personnel transfers and postings to support career development. In
addition, we will provide advice (cultivate managers who help
subordinates take on new challenges) and training (offer practicallearning opportunities and an environment for self-learning) todeepen their experience.

Personal growth

AdviceExperience

Create humanresources andorganizations to realize
our value creation story

Training

Support Mechanisms
Proactively deploy
personnel with careerdevelopment in mind

Use talent management
platform to effectively utilize
human resources

Percentage of mid-career hires in workforce

52

Kurita Water Industries Ltd. Integrated Report 2023

10.6%

Corporate & Financial Information

Target and Current Percentage of Mid- Career Hires

The Platform for Value Creation

Reference:
Kurita GroupThe Kurita Group aims to provide global value tailored to thecharacteristics of each region. To maximize this value, we have to not
only encourage local employees to play an active role in our business,but also improve operational levels across the Group by ensuring theCompany and its Group companies interact under common
principles. To achieve this, we are training executives from overseas
Group companies and promoting them to management positions at
each company and at Kurita Water Industries, while also improving
their international skills. As result of these efforts, the proportion of
locally hired employees either in a representative position or with an

Utilizing and Securing Human Resources(1) Workshops for female personnel interested in management roles
We held workshops at each stage of the management promotion
process (for employees who have been with the Company forseveral years, team leader candidates, and team leaders) toprovide support and address any concerns about the process.

Kurita Water
Industries

Supporting Globally Minded Personnel

The Kurita Group is making every effort to create a workplaceenvironment where each and every employee can work with peace ofmind. We have systems in place that help employees balance theirwork with childcare, nursing care, and other life events, flexible
working style arrangements for those wishing to work from home or
remotely, and schemes that also take into account the situations ofminorities within the context of their SOGIE*, for example, byextending benefits and welfare to employees in a de facto or samesex relationship. Not only are we encouraging officers and employees
to know about and utilize these systems, we are working to create anenvironment where all kinds of people can work at ease by runningonline training sessions and regular awareness campaigns.

The Kurita Group’s Businesses

We have set targets to increase the proportion of women in
management roles related to business execution and in other key
roles and we are implementing measures to achieve the targets. As of
April 2023, the percentage of female managers was 4.2%, below ourtarget of at least 5%. This shortfall partly reflected the merger of acertain subsidiary, which led to an overall increase in the number ofmanagers. We continue to work towards our goal of lifting thepercentage to 10% by the fiscal year ending March 31, 2028.
In a survey we conducted last year, many respondents expressed
concerns about the lack of female role models and the need to balancefamily and work commitments. Based on this feedback, we implemented
the following initiatives in the fiscal year ended March 31, 2023.

(2) Networking meetings for female personnel interested in specialist roles
A total of 27 female employees took part in the networking
meetings, where senior female employees shared their experienceswith employees interested in demonstrating a high level ofexpertise in specialist fields. They talked about the background andthinking behind their decision to choose the specialist role career
path, how they gained their expertise, and how they balance workand family commitments.

Creating a Comfortable Working Environment fora Diverse Workforce

Kurita Group Business Strategy

Empowering Female Employees

A total of 25 team leaders and team leader candidates took
part, giving them the opportunity to talk with current female
managers and hear from female external directors about theirexperiences in career development. Our HR team provided
feedback on the workshops to line managers of the participants
and asked for cooperation in providing support on a daily basis.

officer title at overseas Group companies now exceeds 70%,
illustrating how personnel hailing from different countries and regions
hold management positions throughout the Group. Going forward,
we plan to train these individuals to become core personnel byintroducing an overseas training system and expanding Groupwide
training functions.

Kurita Group Overview

We seek to have employees from all walks of life, irrespective ofgender, nationality, age, disability, employment history, working style(contract type and terms of employment), or experience, and makefull use of each other’s experience, knowledge, and skills to spark
innovation with a view to realizing our corporate philosophy.
Managers and employees in leadership roles are also actively working
to ensure diversity in the Company.
We are focusing our efforts on Kurita Water Industries, which faces
more challenges in ensuring diversity than other parts of the Group.
To lead these efforts, we have established a dedicated D&I
organization within the Company to roll out measures in collaboration
with other internal organizations and Group companies.

Every year we recruit between 10 and 20 mid-career hires – equivalent
to 10-30% of all new hires over a 12-month period – based on theirpotential to be immediately effective in line with our businessexpansion. As of December 2022, 82 mid-career hires (13% of theworkforce) held a manager-equivalent position. In the fiscal year
ended March 31, 2023, we stepped up support for mid-career
recruitment, such as improving explanations about roles and available
career paths at the selection stage and offering a short introduction
program (around 3 days) to ease any concerns after joining theCompany so that new mid-career hires can have an immediate impact.

Around30%

Kurita Water Industries Ltd. Integrated Report 2023

53

The Platform for Value Creation

Human Resources Strategy

Human Resource Training System (Kurita Water Industries)
New hiresNew
employeetraining

Core employees

Foundational
training (first
2-3 years)

Core
employeetraining

Team leaders
Management
training

Managers
New manager
training

Senior managers

Leadershiptraining

Role-based
programs

Specialist skills training(Sales & marketing, technology & development, engineering & supply chains, digital skills,
business support)

Themebased
programs

Mind Career Program / cultivating the Group’s shared values

Corporate officer
candidate program

D&I, employee engagement

The Mind Career Program isdesigned to share the Group’s
corporate philosophy and corporate
vision, as well as provide
opportunities for employees todeepen self-understanding in linewith their individual goals (Will),
linking this into career planning. The
program is run as part of gradebased training and other courses.

Career development support for female employees
Support for mid-career hires
International skills improvement

Other (information security, compliance, human rights, etc.)
Selfdevelopment

Support for self-development and obtaining national qualifications, etc.

For grade-based training, we use an external learning platform with more than 2,000 courses and 10,000 e-learning
modules, providing an environment where each employee can access content relevant to their grade. The platform
helps our employees develop their own career paths and initiate their own learning.

We also plan to implement the following initiatives from the fiscal
year ending March 31, 2024 to attract personnel with diverse
expertise and experience.
• U se a wider range of recruitment channels and introduce a
specialist recruitment system for new hires• Increase wages for the main target age groups• Introduce a compensation scheme to attract seniors with highly
specialized skills

Engineers in Technological Fields

Facilitytechnology

Basictechnology

Human Resources forIntellectual Property

Human Resources for Digital Technology“Offensive IP”

Technical fields that support Kurita
Chemicaltechnology• Human Resources for Intellectual Property
In addition to our existing intellectual property (IP) protection and risk
reduction activities (defensive IP), we launched IP information analysis(offensive IP), including IP landscape analysis, from the fiscal year
ended March 31, 2023. The aim is to use IP information to support
management, business, and innovation strategies. We also plan tostrengthen global IP activities and look at ways of improving IP quality.
To achieve these goals, we are working to identify and train highly
specialized IP personnel who can collaborate with other divisions inorder to raise the level of IP expertise in the workforce and step up IP
activities across the Group.

Design &engineering
technology

About 30 technology sub-categories

Support for various strategies withIP analysis

×“Defensive IP”

Protection for the business withIP rights
Reduce risk of infringing
IP rights of others

Group-wide utilization ofLonger-term personnel
skills, knowledge, andreinforcement and plannedexperiencedevelopment of successors
Kurita Innovation Hub is also used as a training centerfor employees from overseas Group companies

Developing
businessmodelsBuilding
infrastructure
and providing
IT services

Use of Digital Technology

Collaboration

Creation of digitalbusinesses

Accumulation of “water
knowledge,” creation anduse of explicit knowledge

Promotion of DX

Further deepening and development ofwater treatment technology

54

Kurita Water Industries Ltd. Integrated Report 2023

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

Creating Solutions and Business Models Unique to Kurita

The Platform for Value Creation

Kurita-Technical Education Program

Planning andpromotion of
DX-drivenstrategies

The Kurita Group’s Businesses

Kurita Innovation Hub, which opened in 2022, is positioned as acenter to enhance the core knowledge and skills of Kurita Group
employees. Equipped with a wide range of water treatment facilities,
the center hosts training programs that improve the specialist skills of
our employees. The center also has a studio that has produced morethan 900 human resource training videos and other content, which isavailable to employees across the Group via a portal site.

• Engineers in Technological Fields
The technologies that underpin the Group can be broadly divided
into four categories: chemical technology, facility technology, basic
technology, and design & engineering technology. These groups canbe further divided into around 30 subcategories. By mapping thehuman resources engaged in these fields, we can visualize where
there are gaps in personnel in each technology category. Based on
this, we can reinforce our workforce over the longer term and develop
future engineers through the Kurita-Technical Education Program,
our systemized human resources training program. Giving full play tothe skills, knowledge, and experience of engineers throughout theGroup will serve to further deepen and develop our water treatment
technologies. As of June 2023, the Company had around 310
engineers, plus about 370 future engineer candidates.

Kurita Group Business Strategy

Training for future overseas Group company executives

As part of efforts to step up thetraining of future management
candidates and managers atoverseas Group companies, we arelaunching initiatives from the fiscal
year ending March 31, 2024 to create
diverse personnel networks andpromote our corporate philosophy.
This will include training at head
office and opportunities to work atother companies in the Group.

The Kurita Group is working to attract and utilize engineers intechnological fields with extensive water treatment expertise including
human resources for development, digital specialists who can drive
the Group’s digital transformation (DX), and intellectual property
specialists who can support the Group’s focus on technology, as
these personnel will be key to acquiring and leveraging “water
knowledge” to develop innovative solutions.

• Human Resources for Digital Technology
Digital specialists with the skills to devise and deploy DX-driven
strategies, develop business models, build infrastructure, and provide
IT services are indispensable to the Group’s DX. We are working to
attract and develop digital specialists who can create new businesses
that integrate digital technology with diverse contact points, while also
improving the digital literacy of other personnel. In the fiscal year
ended March 31, 2023, we provided technical training to employees
identified as having high “digital aptitude” in an assessment process.
We also selected personnel from the group to work on businessproposals that utilize digital technology. These activities also extend
beyond the Group – we are partnering with start-ups and hiring
people with experience from outside the Company. In the fiscal year
ended March 31, 2023, the Group had approximately 180 digitalspecialists on its books and we aim to expand this number to about
400 over a three-year period.

Kurita Group Overview

Gradebased
programs

Securing and Utilizing Engineers in Technological Fields,
Human Resources for Digital and Intellectual Property

55

The Platform for Value Creation

Innovation Strategy

Corporate Officer
Executive General Manager of Innovation Division

working groups and launched initiatives to share and address
issues in society and in industry.

Areas Where We Aim to Provide New Value

Areas to Strengthen Basic Technology*Refers to innovation areas in Deloitte 7 cells

Next-generation semiconductor cleaningMembrane separation

technologies

Use of bio-organisms, data scienceTechnologies for optimal water use(engineering analysis, AI, IoT)

Visualization of water and climate change risks andFunctional materials

risk mitigation solutions(polymers, adsorption materials, catalysts)

Energy generation process technologies

Analytical technologies

CO2 recycling technologies
Energy-saving and carbon-neutral technologies forwater treatment
Waste recycling and recovery technologies

Kurita Group Business Strategy

Hiroyuki Suzuki

together across the entire Group to create innovation by taking
advantage of connected labs that draw on and horizontallydeploy the personnel, materials, and data of each R&D site. We
have already established a number of cross-organizational

Kurita Group Overview

We will create innovation that helps addresssocial issues, continuously heighten thecompetitiveness of existing businesses, anddevelop new businesses.

Achievements and Challenges under MVP-22
approach grounded in social value. New initiatives that emerged
included recycling technologies, such as the recycling of useddisposable diapers, and energy creation technologies, such as a
microbial fuel cell wastewater treatment system that generates
electricity directly from wastewater. However, we were unable
to create businesses that could serve as earnings drivers, andcontinued to face issues. To develop new markets and businessfields, I believe it is necessary not only to serve existingcustomers but also identify potential needs in society andacross industry as a whole, pursuing initiatives from aperspective unbound by existing technologies and fields.

Approach to Creating Innovation
The Kurita Group’s
Materiality
Solve issues related
to water resources
Contribute to therealization of adecarbonized society

56

Kurita Water Industries Ltd. Integrated Report 2023

analyze data on the Group’s intellectual and non-intellectual
property, customers, and industries, setting problems andsearching for seeds based on forecasts about the future.
Also, our tasks do not end with simply bringing products tothe market, as they have in the past. In collaboration with ourbusiness divisions, we will expand the scope of our explorations
to include new forms of monetization such as modeling andcommercialization. To implement these initiatives, we will
promote open innovation and M&A activities, including
collaboration with start-ups and companies in other industries
to acquire all the necessary elements, rather than insisting on
doing everything in-house.
Pursuing these initiatives calls for even greater cooperation
within the Group. Issues requiring attention differ dependingon the region. So, for example, the issue of water resources ismore serious in Singapore, Europe, and North America than inJapan, where water resources are abundant. We will work

Concept creation(search for seeds)• Identifying focus
areas• Recognizing
competitive
advantages

Conceptverification•S tory verification•P rototype studies•C onfirming value
providedTechnologization
studies, technology
development•A dequate technology
and value chain
resources• Trials

Realizing value
Modeling,
commercializationin cooperation withbusiness divisions

Common Platform
Open innovation

IP landscaping

Human resources are the driving force behind our efforts.
We will strengthen the mindset, skills, and actions required
both of personnel who themselves take on the challenge ofcreating innovation and of personnel who support suchchallenges. Recognizing the difficulty of acquiring such skills
through conventional education and on-the-job training alone,
we will work to cultivate staff by building a training program thatmakes use of outside resources. We will also clarify points to be
reinforced in the areas where we aim to provide new value andConnected labs

in basic technology areas, working to acquire talent by tapping
into our networks with universities, research institutes, andcompanies. It is also vital to provide opportunities for
employees to embrace challenges in new areas and enhance
the framework for evaluating the results of those challenges. In
this way, we will pursue the creation of new value throughcollaboration and the embrace of challenges by people withdiverse experience, knowledge, and skills, aiming to develop
sustainably with society.

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

The PSV-27 plan sets out the Kurita Group’s Materiality: solve
issues related to water resources, contribute to the realizationof a decarbonized society, contribute to building a circular
economy society, and develop and disseminate innovative
products, technologies, and business models. These themes
are guiding our efforts to create innovation globally from alonger-term perspective. We have set a range of focus areas—
seven areas in which we aim to provide new value and fourareas in which we will strengthen our basic technologies—andwill extend our efforts beyond existing fields into peripheral andinnovation areas*.
Moving ahead with a diverse, longer-term perspective starts
with problem setting and the search for seeds. Here, we will
expand contacts with customers beyond personnel in frontline
operations to include departments that promote sustainability
and innovation, managers, and R&D institutions other thancustomers. At the same time, we will use IP landscaping to

Develop anddisseminate
innovative products,
technologies, andbusiness models

Setting challenges(identifying
opportunities)• Value provided tocustomers andsociety• Areas aiming toprovide newvalue• Market-specificstrategies• Technology
roadmap

The Platform for Value Creation

Contribute tobuilding a circular
economy society

Our Goals for PSV-27

The Kurita Group’s Businesses

Since its founding, the Kurita Group has offered a variety ofsolutions to needs in society and industry, including the growing
problem of pollution amid high economic growth and advanced
water treatment required in the electronics industry. Helping toaddress such needs provided the Group with the opportunity
to dramatically improve its technological capabilities. Today as
well, calls to address global issues like climate change and thebuilding of a circular economy society also provide an
opportunity to step up the pace of innovation. Under the
MVP-22 plan, in addition to an approach grounded intechnology, we sought to create innovation through an

57

The Platform for Value Creation

Innovation Strategy

Intellectual Property Strategy

Basic Concept

Main Initiatives
Offensive and defensive IP activities

Objectives of IP activities
To avoid infringing the rights of others
To protect Kurita Group business o contribute to management, business, and innovationTstrategies

reports regularly to senior management on the direction of IP
activities and their implementation status.

Defensive	Maintain and expand Kurita Group competitive advantage by acquiring IP rights
	Reduce business risk by preventing infringement of other IP rights

To raise profitability by making maximum use of the IP acquired by
the Kurita Group, in addition to making patent applications based on
development results, we are working on patent applications that willprotect current or future businesses by erecting a barrier against
competitors. We are also engaged in activities to ensurecomprehensive and systematic identification of technologies andbusinesses in the Kurita Group value chain that require protection,
leading to corresponding patent applications. Patent-related
technology and business decisions are made by our patentcommittees — one for each market or technology field — which arecross-departmental bodies led by operating divisions, with committee
members drawn from the departments responsible for technology,
development, design, sales, and IP strategy. The committees adopt a
global perspective in reviewing the patent portfolio and conducting IP
risk reduction activities. To protect trademarks, meanwhile we takeaction to prevent disadvantage to customers or society frominappropriate handling, unauthorized use, or other trademark
violations. This means acquiring global rights, exercising existingrights, and taking other measures to prevent or reduce business risk.

Executive Committee

Reporting

Offensive IP

Corporate Planning/Business
Planning departments

Research and development
departments
Generate and implement
development themes

Market needs
Nascenttechnologies
Information
provision

ReportingOverall lead

Department responsible for
IP strategy
IP analysis of Kurita
Group, other companies,
and the market
Detect signs of issues orneeds
Formulate patent
strategy, patentapplication activities

Defensive IP

Provision of
information on:• Patent
applications• Patent portfolio• Patents of otherrights-holders

Identify
inventions
Generateapplication
documents

Confirm businessstrategy
Formulate patentapplication
strategy

Patent committees
Patent portfolio
management
IP risk reduction activities

Research and development
Patent application
activities to protect
development results
Technology/Sales/Design
departments

The Kurita Group engages in IP landscape activities, which means
carrying out integrated analyses of its own and other companies’ IP
and market conditions. This information is fed back into management
and business strategies as well as innovation-driving activities. The
divisions in charge of research and development, businessdevelopment, and IP strategy work together to synthesize and analyze
IP and other information on customers, competitors, industry
conditions, and other factors. The findings of this analysis are used
not only to establish the Kurita Group’s position, but also to support
business strategy formulation, new business development, and a wide
range of other activities. In this way, we seek to improve the accuracyof the scenarios and stories devised to support medium- to long-term

Roadmap of IP Landscape Activities
Fiscal year
ended
March 31,2023

Formulate patentapplication strategy basedon business strategy
Patent application
activities directly linked tobusiness protection

Creation of patent network to securecompetitive advantage and reduction ofbusiness risk relating to IP

strategy formulation. In the fiscal year ended March 31, 2023, weundertook survey and analysis activities in a number of markets to
identify co-creation candidates in possession of nascent or otherpromising technologies. We also tested our competitive advantage inthe relevant businesses and the degree of importance of adjacentbusiness domains as the basis for proposals for market entry in otherfields. In preparation for its launch in April 2023, we formulated a
5-year roadmap for IP landscape activities through to the end of
March 2028. This roadmap, whose rollout has begun, specifies
concrete content for initiatives to contribute to management andbusiness strategies and innovation-driving activities.

Management
strategy

Fiscal year
endingMarch 31,2028

In-house analysis (market perspectives/technology perspectives)

Proposals for positioning of Kurita Group

Analysis of other companies/
industry conditions

Proposals for expansion of core technologies
and new market development

Proposals forformulation of next
medium-term
management plan

Improve accuracy of value creation story

Business strategy
Identify technology trends and nascent technologies to drive new value proposition

Innovation-driving
activities

58

Kurita Water Industries Ltd. Integrated Report 2023

Proposals for open innovation candidates

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

IP landscape and other IP analyses to feed
into management, business, andinnovation strategies

	Analyze information on IP and non-IP to feed into various corporate strategies
	Identify M&A candidates and make proposals for collaboration candidates and methods	Survey and upgrade technological human resources and technological competitiveness

The Platform for Value Creation

Coordination

Analyze IP and
non-IP information
Propose new market
and businesscandidates
Formulate patent
strategyInnovation Division
Executive General Manager

Offensive

The Kurita Group’s Businesses

Devise scenarios
Draft businessstrategy
Create new
businesses

Supervision/Approval

Kurita Group Business Strategy

Promotion Framework
At the Kurita Group, IP activities are led by the division responsible for
the IP strategy, which works with the various internal departments on
initiatives to drive offensive and defensive IP activities. The division

Kurita Group Overview

To grow its business and improve profitability by making maximum
use of its intellectual property (IP) resources, the Kurita Group has
formulated a basic policy on IP activities to promote the appropriateacquisition, protection and use of IP and to ensure that other IP rights
are respected. Based on this policy, we will implement IP activities
that contribute to management strategy from both defensive andoffensive approaches.

59

The Platform for Value Creation

Digital Strategy
have created an application using an AI-based algorithm that
automates design work and optimizes operations for water
treatment plants. We have also managed to build the coresystems needed to collect and record related information anddata. However, there is also a sense of urgency with thisinitiative given the ongoing high level of risk of sensor
manufacturers or other firms specializing in data science
entering the water treatment sector. We are aware that we
could lose a business opportunity unless we can turn such data
to our competitive advantage.

Our Goals for PSV-27

Corporate Officer
Executive General Manager of Digital Strategy Division

Our Approach to DX

The continuous growth of the Kurita Group demands that we
embed the “process of reform.” The insights that we gain fromthe analysis of information and data lead to opportunities forreform. The Digital Strategy Division will continue to create suchopportunities.

Promotion Set-up for PSV-27
President andRepresentative
Executive Officer
Executive Committee

Review of MVP-22

60

Kurita Water Industries Ltd. Integrated Report 2023

Group-wide DX promotion/oversightneeded to gather it, we began building the systems to “record”
the information. Our introduction of a CRM (Customer
Relationship Management) system alongside the ERP (Enterprise
Resource Planning) system turned our sales activities into areporting tool, allowing us to record a range of customer-sourced
data in a structured format.
In Business DX, our collaboration with the start-up Fracta
Leap Inc. has provided a major boost to progress because theway we think and approach business is completely different.
The greater speed of decision-making has helped to overturnestablished ideas within the Group in a positive way. In the
Meta-Aqua Project that we have been jointly developing, we

Coordinate

Headquarters
administrative
divisions

Headquarters
business
divisionsJapaneseGroup
companies

OverseasGroupcompanies

Process reforms

Corporate officer in charge ofdigital strategy
Digital Strategy Division
DX coordination across Group

Business reforms(strategy formulation,
implementation support)

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

Looking back, the MVP-22 plan marked a major turning point
for the Group’s digital strategy with the emergence of DX as asignificant new trend. Recognizing the importance of
information and data as a management resource, the Groupembraced the related challenges of large-scale systems
investment and business process reform. While we were testing
the best way forward with these initiatives, senior management
demonstrated strong resolve and a sense of urgency inpromoting DX, and we have made steady progress.
In Operational DX, we focused on core systems development.
First, having determined what types of information and data webelieved were vital to collect and what kind of systems would be

DX Committee (Chair: President andRepresentative Executive Officer)

Report

The Platform for Value Creationthat we not only seek to add digital elements to existing
businesses, but also strive to create new businesses based on
digital perspectives.
Whether we are focused on internal or external customers,
adding value through DX necessarily entails answering thequestion of how to bring the underlying issues to the surface.
For example, as well as just presenting the performance data asa result, we can improve internal business processes and makebetter proposals to customers if we manage to capture data on
the different approaches employed in the preliminary stages
and the various customer responses to our efforts. By creatinga framework to make this happen, our mission in the Digital
Strategy Division is to engineer reforms that go beyond how wesolve issues now.

The Kurita Group’s Businesses

In broad terms, the Kurita Group is approaching DX initiatives
from two perspectives: an internally focused one we call
Operational DX, and a customer-focused one we call Business
DX. With Operational DX initiatives, our aim is to analyze andvisualize a wide range of data, including performance andinformation relating to customer contacts and operations, so
we can clearly identify the underlying issues relating to how we
do business. Based on these insights, we seek to realize ourgoals using various working methods while keeping our
employees highly motivated. With Business DX, our aim is todeliver unique value that exceeds customer expectations. To
this end, we seek to contribute by adding value after first
identifying the underlying issues based on data such as theoperational status of facilities and water quality. It is importantwith the conventional method of listening to customers andthen preparing a proposal, this approach enables us to propose
products and services with more added value and within asignificantly shortened time frame. Since fresh value
perspectives and viewpoints from outside the company are
essential to make any major reform happen, we are actively
trying to develop collaborations with other companies, recruit
people externally, and promote networking.
We are also focusing on developing the human resources for
digital technology to realize the measures in the plan. While wehave made some progress to date on enhancing digital skillsets
within the Group’s workforce, upgrading knowledge and skills to
support cross-organizational DX promotion internally is anecessary yet difficult issue. To this end, we are looking at
providing those divisional personnel who possess a certain levelof digital skills with the opportunity to gain experience in project
management or to work in business divisions.

Kurita Group Business Strategy

Makoto Mizuno

Under PSV-27, we plan to move onto the next step of analyzing
and visualizing the data that we have recorded internally andexternally using the core systems that we have alreadydeveloped. By increasing the quality and quantity of value wedeliver in the Group’s business activities while accelerating thevalue-added process, we aim to contribute to the evolution andcontinuous growth of the Group’s overall business.
In Operational DX, we will develop systems to analyze
information and data we collect and record. By clarifying
underlying issues that were not previously recognized within
the Group and by integrating the entire value chain, we aim toestablish a framework for action to facilitate reforms leading tooutcomes such as higher product quality. We will also strive toreform the ways we work. Irrespective of how conditions
change, we will apply digital technologies to create theenvironment and opportunities required for Kurita Group
employees to continue working with peace of mind and highmotivation levels.
In Business DX, by analyzing data and information from a
range of perspectives, we will build the infrastructure needed totease out the underlying issues faced by customers while also
creating the set-up necessary for back-casting so that we candesign the proposals for addressing these issues. Compared

Kurita Group Overview

The role of our division is to promote reforms
across the entire organization to support
achieving the PSV-27 goals.

61

The Platform for Value Creation

Digital Strategy

DX Initiatives

Creating Ways of Identifying Underlying Issues from Information We Source from Varied Sites

Business issues

Information
recordedOperational reform
processes

Operational
processes

PerformanceData
platform

CRM

Needs/
Operational
expectations
data

Service delivery
processes

Customers

215
126

Past

Present

Futureeveryday sales activities. In areas such as procurement and design,
this has given us a step up in terms of purchasing materials andproposing design solutions, based on our assessment of customer
needs and sales trends. We are also starting to see practicaloutcomes such as new business models and to share related
success stories. Our goal is to continually optimize all the Group’sbusiness processes from the customer’s perspective.

Training Initiatives for Human Resources for Digital Technology
We are focusing efforts on training digital specialists to help
promote DX projects such as the development of uniquesolutions that apply AI, IoT and other digital technologies.
We believe an effective training strategy is for
employees who already use a problem-solving approachin their daily work (people with clear ideas about whatissues need to be solved) to acquire basic digital skills
and learn how to use them to realize DX by tacklingissues in their own area of responsibility. To address this,
we are rolling out digital skills training for all our
employees. We are also conducting hands-on training inpractical data analysis for those employees who
volunteer or are recommended by their section. This
training aims to provide people with a general
understanding of data analysis and to help build datarelated skills such as visualization, pre-processing andforecasting. We also plan to adapt this program as a
global training measure targeting overseas Group
companies from the fiscal year ending March 31, 2024.

Flow of Development of Human Resources for Digital Technology
Target group

Objective

Newly
hired
graduates

Train to become“digital natives”• Acquire basic knowledge of digital technology• DX literacy lectures

All
employees

Acquire basic DX
knowledge• Basic DX course• Learn basic skills in digital tools• Acquire core knowledge for data utilization• Exhaustive training in digital governance

Acquire minimum
practical methods torealize DX• External online learning (basics of DX, AI/
machine learning and data analysis)

Generate outputs
using learned
methods•H ands-on training given by outside lecturers
plus one-on-one instruction in skills
development, leading to practical data
analysis contest

Human
resources
for digitaltechnology

Initiatives

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

Kurita Water Industries Ltd. Integrated Report 2023

290

The Platform for Value Creation

Reforming Processes in the Value Chain

62(Man-hours)

Solution creation
processes

Customer contact details

In business process management, we used the CRM system toestablish a mechanism to record and store customer feedback
and information about progress with activities at customer sites,
and to share this information with internal stakeholders. This
information is shared not only with sales teams that deal directlywith customers, but also with teams responsible for developing
new solutions, and with our back-office functions that support

 rojected Man-Hours for Large-ProjectP
Customer Proposals

The Kurita Group’s Businesses

ERP

social issues by cutting greenhouse gas emissions throughreductions in power consumption. The technology has been wellreceived in Japan and overseas and is already being used inproposals for water treatment facilities following a pilot
demonstration sponsored by the Ministry of the Environment prior
to commercialization of innovative infection control technology thathelps to reduce CO2 emissions.

Kurita Group Business Strategy

Data visualization

In the Meta-Aqua Project that we are developing jointly with Fracta
Leap, the aim is to create solutions that utilize data science interms of (1) automating and accelerating facility design andengineering planning processes; (2) optimizing facility
management and control; and (3) applying material informatics
techniques to help identify more functionally advanced materials
in areas such as water treatment chemicals.
In the field of design, we have traditionally faced challenges withthe transfer of the technical skills and know-how of experienced
facility designers and in recruiting designers as the businessexpands. The costs arising due to human error are another issue,
as is the need to establish operational production site facilities
with short lead times to satisfy the needs of customers inindustries such as electronics. To help address such issues, we aredeveloping an application using an AI-driven algorithm to makedesign blueprints for water treatment facilities quickly andautomatically. In November 2022, we launched the beta version of
an automated application for plant layout design, and in March2023 we released the beta versions of the design applications forfacility configuration and engineering planning. Since theseapplications enable the creation of multiple proposed designs,
they also enable the customer to compare the pros and cons ofvaried possibilities. This is helping us to upgrade our design
proposal capabilities.
In the field of facility management, we are leveraging thetechnology and data we have acquired over many years to develop
and deploy an AI-based solution for optimizing facility management.
This kind of solution reduces operating costs while also addressing

Kurita Group Overview

as basic information about our corporate clients, including their scaleof operations, what they manufacture, the size of their operating sites(including factories), and where their efforts are currently focused.
Previously, it would be the job of our salesperson to gather andcollate this information personally, but now we store it in acomprehensive and structured fashion. Separately, we accumulate
online and offline operational data from water treatment facilities forstorage in the data platform.
Analyzing the data and information recorded on the Kurita Group’s
proprietary platform gains us multifaceted insights that help deepen
our understanding of customers’ operations and allow us to capture
the underlying issues, both at their end and internally. This leads inturn to a continuous stream of unique business model creation andthe promotion of business reforms. Our aim is to promote a virtuous
cycle where we continually establish higher levels of quality.

The twin aims of our DX initiatives are to create business models
that generate economic value alongside social value, and to makethe Group’s business more resilient to changing businessconditions by reforming our business processes in ways that
improve customer intimacy.
Besides the ERP system we use to manage operations, the Kurita
Group information platform at the core of our data-harvesting efforts
includes a CRM system for collating the data and information that we
gain from the customer frontline. It also incorporates the data
platform we use to integrate information on water quality, operational
data and facilities.
First, in terms of customer information, the ERP system
accumulates financial information from our transactions withcustomers. On the other hand, the CRM system is used for
information that deepens our understanding of the customer, such

Operational issues

Meta-Aqua Project63

The Platform for Value Creation

Environmental Improvement Activities

Basic Concept

Participation in Water Resilience Coalition

Definition of the Kurita Group’s Environmental
Improvement Activities​1) Activities to comply with the environment-related laws andregulations of each country and region that apply to theGroup’s business activities2) Initiatives to solve international issues related to the sustainabilityof water and the environment through business activities

The Company participated in the Water Resilience Coalition (WRC) asa Leadership Committee member. The WRC is a new organization
established under the CEO Water Mandate, a United Nations Global
Compact initiative. It is implementing industry-driven initiatives for thepreservation and restoration of water resources in water-stressedbasins all over the world. Through its participation in the WRC, theKurita Group works with other companies and organizations topreserve and restore the world’s water resources with the aim ofachieving the Sustainable Development Goals (SDGs) and realizing its
corporate philosophy. The Company has also participated in the UN
Global Compact and has endorsed the CEO Water Mandate.

Water Resilience Coalition
Global water resilience

VisionPlease click on the link below for more information.​

Kurita Group Environmental Policy https://www.kurita.co.jp/english/csr/management/policy/environment/index.html
Click on the links below for more information about Kurita’s Environmental Improvement Activities.

Improve water availability,
quality and accessibility inbasins facing serious
water resource problems

Our pledge

Solve Issues Related to Water Resources https://www.kurita.co.jp/english/csr/csr_activity_growth/water_savings/water.html

C reating a world in which water can be consistently supplied to the required
place, in the required quantity, and at the required quality

Realize Sustainable Energy Use https://www.kurita.co.jp/english/csr/csr_activity_growth/climate_change/co2.html

Raise the global ambitionof water resiliencethrough public andcorporate outreach

Implement measures toresolve water resource
problems across theentire value chain

Kurita Group Business Strategy3) Disclosure of information related to 1) and 2), and engagementwith customers, business partners, employees, shareholders
and investors and local communities about the activities

Kurita Group Overview

in line with international standards, and conduct initiatives to achieve
our medium- to long-term targets.

The Kurita Group’s Environmental Improvement Activities include
initiatives to reduce internal water and energy use and waste. They
also include activities to reduce environmental impact at customers
who use products and services related to water and the environmentthat the Kurita Group has developed over many years.
In recent years, initiatives to address environmental issues are
becoming an increasingly important factor in corporate management
amid growing calls from shareholders and investors for ESG
management. The Kurita Group promotes business models that help
reduce water usage and GHG emissions. The Group therefore sees
these trends as an opportunity to grow its business. By expanding
our CSV business, we aim both to create value for society while also
driving the Group’s growth. In parallel, to fulfill our corporate
responsibility, we will reduce the environmental impact of the Group’sbusiness activities by addressing the issue of climate change basedon the TCFD Recommendations, disclose environmental information

Reduce Waste https://www.kurita.co.jp/english/csr/csr_activity_growth/waste_reduction/waste.html

Water intake reduction (million m )
3

99
51

116
64

���
��

48

53

��

2021

2022

����

Japan

CO2 emissions reduction (thousand t)
294
228

66

2021

���

108

274

258

���

2022

����

251

2.43
1.82
0.62

2021

2.84
1.98
0.86

2022

�.��
�.��
�.��

����

CO2 emissions (thousand t)*
249
236

12

2021

275

260

16

2022

23

Japan

113

���
���

��

����

���

45
2021

2022

����

2021

���

����

Overseas
58
57

1

����

38
36

2021

*Piracicaba, Capivari and Jundiai river basins in San Paulo state

2

2022
Japan

��

��

�

����

2021

Impact Together
Colorado river basin
PCJ river basins

316

2022

���

����

The Kurita Group contributes to the development and socialization of
the free online platform the Water Action Hub, which supports water
conservation initiatives of companies and organizations. The Water
Action Hub is managed by The CEO Water Mandate, which is the upperorganization of the WRC, and it has several functions to include
connecting partnerships with implementers who are taking actions forsolving water challenges, as well as searching and sharing valuable
information for water conservation initiatives. In addition, its functions
are continually developed for making it a comprehensive platform which
aggregates any information and tools related to water challenges.
The Kurita Group contributes to the development by testing andproviding early feedback on new features and through monetary
support, as well as the socialization through advocating the value of
Water Action Hub in international conferences such us World Water
Week.

Customers locatedin both river
basin regions

LOCAL Contribution
Solutions to reduce local
water usage

Overseas

Waste reduction at customers –Waste generated fromour business activities (thousand t)

215

91
2022

2022

���

Waste amount (thousand t)

CO2 emissions reduction atcustomers – CO2 emissions fromour business activities (thousand t)*

���

45

���

Initiative for the development and socialization of theonline platform related to water conservation

Water conservation
initiative supportedby the WRC

REGIONAL Contribution
Support for water
conservation initiatives
across the river basins

Solving issues related towater resources in bothriver basins
Souce: “Water Action Hub”, The CEO Water Mandate, https://wateractionhub.org/* “CO2 emissions from our business activities” include emissions generated from the ultrapure water supply business, which comes under Category 13 of Scope 3, as wellas emissions in Scope 1 and 2 stipulated in GHG (Greenhouse Gas) protocol.

64

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Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

97

308

2021

Kurita Group KPI: Customer Impact Reduction – Kurita Group Impact (Fiscal years ended March 31)
Water savings at customers –Amount of water intake usedin our business activities (million m3)

354

The Kurita Group launched a campaign for solving issues related towater resources, called “Impact Together,” in the Colorado river basinin the US and PCJ river basins* in Brazil. During the campaign, whichaims to solve both river basins’ water challenges including water
scarcity, Avista Technologies, Inc. and Kurita do Brasil LTDA., which
are overseas subsidiaries, contributed to the reduction of water
usage by providing a superior water savings solution to customers
located in the basin regions. In addition, Kurita Water Industries madea monetary contribution to a water conservation project based on theestimated water saved by the solution.

The Platform for Value Creation

Water intake amount (million m )Water Conservation Initiative in the US and Brazil

Waste reduction (thousand t)

���

367

Internal Promotion of Environmental Improvements (Fiscal years ended March 31)
3Overseas

The Kurita Group’s Businesses

Reduction of Environmental Impact at Customers (Fiscal years ended March 31)

65

The Platform for Value Creation

Environmental Improvement Activities

Initiatives to Address Climate Change

Basic Concept

Measures Based on Opportunities and Risks
by our business activities and contribute to reducing greenhousegas emissions for our customers through our business.

Based on the two scenarios (1.5℃ and 4℃)*1 described in IPCC SR1.5
and IPCC RCP8.5, etc., the Kurita Group has evaluated the risks andopportunities by two axes of “probability” and “impact” for short-term,

Type

Risks and Opportunities

TimehorizonPromotion System
Board of Directors

Risk

Regulations for products andservices with high GHG
emissions

Mediumto longterm

Opportunity

Dissemination of supportive
policy incentives to theconversion to energy with low
GHG emissions

Mediumto long
term

Risk /
Opportunity

Substitution of existingproducts and services withlower emissions options

Short tolong term

Risk

Decreased demand from fossil
fuel-related sector

Mediumto long
term

Risk

Soaring costs of material andenergyMediumto longterm

Opportunity

Increased demand in theelectronic industry due to theacceleration of DX

Mediumto long
term

Risk

Increased factory shutdowns
and construction delays due toextreme weather events suchas cyclones and floods

Short tolong term

Opportunity

Increased operating rate ofcooling equipment

Short tolong term

Opportunity

Dissemination of efficient
production and distribution
processes

Short tolong term

Opportunity

Reduction of water usage

Short tolong term

Opportunity

Dissemination of energy withlow GHG emissions

Short tolong term

Opportunity

Conversion to distributed
energy resources

Short tolong term

Opportunity

Increased demand for products
and services with low GHG
emissionsShort tolong term

Policy and
Legal

Supervision

ReportExecutive Committee
Deliberation on initiatives addressing climate change issues anddecision of new measures
Instruction

Sustainability Committee
Management of initiatives addressing climate change issues andformulation of new measures

Technology

Overseeing / Promotion

ReportHeadquarters, Business divisions, and Group companies ofKurita Water Industries

MarketImplementation of measures

Metrics and Targets
Scope 3 emissions. In addition, we have set a new medium-term target
for the amount of avoided GHG emissions through CSV business andwe will realize a decarbonized society throughout the entire supply
chain by developing and providing low-carbon solutions that contributeto the reduction of GHG emissions in industry and society.

Scope 1+2

Physical
Risks

Resource
Efficiency

Scope 3 (Fiscal years ending March 31)
Scope 1+2

100% reduction

2,500

Scope 330% reduction

1,500

Scope 1+2, 3

Net-Zero

50

EnergySourceProducts
andServices

Scope 366

Measures･Low carbonization of products and services by utilizing digital technology and reviewing design, etc.
･Reduction of Scope 1 and 2 emissions by switching to alternative fuels and renewable energies･Development and expansion of CSV businesses that contribute to GHG reduction, such as

biomass power generation, energy recovery, resource recovery, exhaust gas treatment, CO2
recovery, and battery-related businesses

2022

2023

2024

2026

2028

2031

Increasing diverse technicalneeds for reducing GHG
emissionsShort tolong term

2051

Use of renewable energy for power used at business locations
Measures to reduce Scope 2 not derived from power
Reduction of Scope 3 through promotion of CSV business / Transformation of products and services provided and businesses
Change in external environment (customers’ shift to renewable energy)

Kurita Water Industries Ltd. Integrated Report 2023

Measures･Low carbonization of products and services by utilizing digital technology and reviewing design, etc.
･Development and expansion of CSV businesses that contribute to GHG reduction, such as

biomass power generation, energy recovery, resource recovery, exhaust gas treatment, CO2
recovery, and battery-related businesses

Financial Impact (After the fiscal year ending March 31, 2028)･1.5℃ : About ¥350 billion/year*4･4℃ : None

･Low carbonization of products and services by utilizing digital technology and reviewing design, etc.
･Reduction of Scope 1 and 2 emissions by switching to alternative fuels and renewable energies･Development and expansion of CSV businesses that contribute to GHG reduction, such as

biomass power generation, energy recovery, resource recovery, exhaust gas treatment, CO2
recovery, and battery-related businesses

Measures

Gradual replacement of gasoline-powered vehicles with electric vehicles and the like
Replacement of fuel with renewable energy

Measures･About ¥14 million has been invested to install waterstops at one site･Continuous strengthening of business continuity in preparation for natural disasters such as

MeasuresOpportunity

2021･1.5℃ and 4℃ : About ¥15.7 billion/year at Japanese production bases where risks are identified

Resilience

Risk /
Opportunity

Substitution and diversificationof fuel and water resources

Short tolong term･Low carbonization of products and services by utilizing digital technology and reviewing design, etc.
･Reduction of Scope 1 and 2 emissions by switching to alternative fuels and renewable energies･Development and expansion of CSV businesses that contribute to GHG reduction, such as

biomass power generation, energy recovery, resource recovery, exhaust gas treatment, CO2
recovery, and battery-related businesses*1 The scenario in which the temperature rise from the pre-industrial level is 1.5℃ and the scenario with the highest temperature rise predicted by the Intergovernmental Panel on Climate Change.
*2 Short-term (1-3 years), medium-term (3-5 years) and long-term (5-20 years).
*3 (Scope 1 and 2 + Scope 3 category 1 in the business operation area) x (Carbon price in the business operation area) estimated based on the FY2051 forecast.
*4 Trial calculation of SAM (Serviceable Available Market) for new CSV business that contributes to GHG reduction.

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

25

Scope 2

biomass power generation, energy recovery, resource recovery, exhaust gas treatment, CO2
recovery, and battery-related businesses

flood control

2,000

Scope 1

Measures･Low carbonization of products and services by utilizing digital technology and reviewing design, etc.
･Reduction of Scope 1 and 2 emissions by switching to alternative fuels and renewable energies･Development and expansion of CSV businesses that contribute to GHG reduction, such as

The Platform for Value Creation*A n initiative that encourages companies to set reduction targets consistent with
scientific knowledge, with the goal of limiting the increase in global averagetemperature caused by climate change to well below 1.5°C above pre-industrial levels.

Percentage of emissions Scope 1: 0.6% Scope 2: 1.2% Scope 3: 98.3%

2020¥1.1 billion will be invested, and 100% reduction will be achieved through the introduction ofelectric vehicles and the adoption of renewable energy･Scope 3: Reduce emissions by 30% compared to the base year by the fiscal year ending March
31, 2031 by promoting the CSV business and procuring low-carbon raw materials

Financial Impact (After the fiscal year ended March 31, 2021)

To promote sustainability initiatives, the Kurita Group has identified
eight new themes to intensively work on from the fiscal year ending
March 31, 2024 as the “Kurita Group’s Materiality.” In an initiative totackle climate change issue “Contribute to the realization of adecarbonized society,” in order to make efforts in line with the Paris
Agreement, we have set new long-term targets aligned with “Net-Zerotarget” indicated by SBTi*, starting from the fiscal year ended March 31,
2020 as the baseline year, and are working to reduce Scope 1, 2 and0

Measures･Scope 1 + 2: By the fiscal year ending March 31, 2031, an estimated cost of approximately

The Kurita Group’s Businesses

Mediumto longterm･1.5℃ : ¥2.2 billion*3･4℃：None

Kurita Group Business Strategy

Introduction or increase ofcarbon tax

Risk

Supervision of initiatives addressing climate change issues

Proposal / Report

3,000

Financial Impact/Measures
Financial Impact (As of March 2051)

The Kurita Group sets the Sustainability Committee, chaired by the
Executive General Manager of Sustainability Division and Corporate
Officer of Kurita Water Industries, which oversees and promotes
initiatives addressing climate change. The Board of Directors
supervises the initiatives and receives reports from the Executive
Committee twice a year in principle. The Executive Committee
receives reports from the Sustainability Committee on the status ofefforts to address climate change issues, deliberates on the details,
and determines necessary measures.

(Thousand t-CO2)

medium-term and long-term*2, and has formulated the measures of
the Kurita Group as well as evaluating the financial impacts on ourbusiness for some of them.

Kurita Group Overview

The Kurita Group views climate change as an urgent issue thatneeds to be addressed globally, and based on the TCFD
Recommendations, we will continuously reduce GHG generated

67

The Platform for Value Creation

Compliance

Basic Concept

Integrity activities

An initiative to promote an autonomous approach to workduties based on the idea of ‘doing good by doing the right thingby one’s conscience, while wishing to be honorable.’Compliance activities

Legal and regulatorycompliance

Upholding of
ethical standards

Promoting Fair Business Practices

As part of our commitment to fair business practices throughout ourorganization, we have formulated the Kurita Group Anti-Bribery Policy
and the Kurita Group Antitrust Policy. We have also introduced theGroup Guideline on Anti-Bribery and the Group Guideline on
Antitrust, which set out specific rules to eliminate the risk of legal
infringement occurring in relationships with public officials andrepresentatives of competitor companies. Over the last two years, wehave conducted training on observing competition law for all officers
and employees of our Group companies in Japan and overseas.

Achievements in the Fiscal Year Ended March 31, 2023

Our Values See P4 ‘The Kurita Group’s Philosophy System’
Kurita Group Code of Conduct
https://www.kurita.co.jp/english/philosophy_vision/pdf/philosophy_vision_01.pdf

Compliance Behavior Survey and Preventive
Compliance Measures

Promotion System
Board of Directors
Executive Committee

Sustainability Committee

Promoting Equitable Relationships with Business Partners
The Company and its domestic Group companies conduct annual
business transaction compliance surveys of small and medium-size
suppliers as part of efforts to promote equitable business
relationships. If necessary, Kurita instructs the relevant department toinvestigate the situation or make improvements, which are confirmed
later through follow-up contact.
Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2023

Total number ofquestionnaire surveys

1,562

1,454

Number of respondentcompanies

1,085

940

Scope of survey

Business partners of the Company andits domestic Group companies

Survey method

Written and electronic responses

The Platform for Value Creation

Subcommittee in each division
and Group company

The Kurita Group conducts an annual Compliance Behavior Survey of
all Group employees and temporary staff to evaluate the outcomes ofcompliance activities and identify any potential compliance risks. The
results of the survey are used by the Company divisions and Group
companies to plan and improve compliance activities. In the fiscal
year ended March 31, 2023, 7,630 employees and temporary staff
took the survey, equating to a response rate of 98.5%.
The findings of the Compliance Behavior Survey are used toevaluate risk and to update the Non-Compliance Risk Map, which
gives an overview of legal and regulatory infringement risks. Based on
this, we designate key areas for action and take other measures toprevent compliance issues from emerging.

The Kurita Group’s Businesses

Promotion System
The Kurita Group has established a Sustainability Committee as anorganization to oversee compliance activities. Chaired by the
Executive General Manager of the Sustainability Division, who is a
corporate officer, the committee is tasked with deciding policies
and key measures related to integrity activities, which are conveyed
to all employees through subcommittees in each division andGroup company.

 ntitrust compliance training was held for thoseA
officers and employees at the Group’s overseas
companies who may come into contact withcompetitors. (100% participation rate)

To ensure everybody who works in the Kurita Group feels comfortablein the workplace, the Kurita Group has established a consultation
desk in the Group and at outside organizations to provide advice
about questions or concerns related to the Kurita Group Code of
Conduct and other internal regulations and to handle reports about
behavior that infringes the Code, laws and regulations or the Group’s
internal rules. The consultation desk is also available for Kurita Groupbusiness partners to receive advice or report legal violations or
misconduct by the Kurita Group. Anybody using the consultation desk
to receive advice or report a violation is protected from unfavorable
treatment. Kurita uses the consultation desk to rapidly identify andrectify misconduct. The third-party consultation desk, which covers
our operations in Japan, is operated by attorneys and qualified
counselors with a view to increasing the ease of consultation. There
were 26 consultation and whistleblowing cases at the Group’s internal
and third-party consultation desks in the fiscal year ended March 31,
2023. We have conducted training on how to use the consultation
and whistleblowing desks with a 100% participation rate including ourGroup companies in Japan. We will continue working to promoteknowledge of them internally.

Kurita Group Business Strategy

Antitrustcompliance

Whistle-Blowing and Consultation Desk

Kurita Group Overview

Taking care to observe laws and regulations and uphold ethicalstandards in its business activities is part of the Kurita Group’s
compliance activities aimed at ensuring that all employees can takepride in their work and that the Group enjoys public trust. In theyear ending March 2024, we will be further developing ourcompliance program under the banner of integrity activities. The
Kurita Group defines this as an initiative to promote an autonomous
approach to their duties by Kurita Group officers and employees
based on the idea of ‘doing good by doing the right thing by one’s
conscience, while wishing to be honorable.’ In a rapidly changing
society, our aim is for Kurita Group directors, officers and employees
to be able to make appropriate judgments from a positive andindependent approach. Through these integrity activities, the Kurita
Group will share its “Values” across the Group.

Main Initiatives

Corporate & Financial Information

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69

The Platform for Value Creation

Risk Management

Basic Concept

Identifying Risks and Formulating Response Measuresrisks should be accepted for the sake of sustainable growth andcorporate value increase while implementing appropriate measures
to reduce losses.

Risk Management System

Approval

Board of Directors

Proposes person
responsible and system

Headquarters Health and
Safety Committee

Compliance andclimate change risks

Divisions

Cooperate

Cooperate

Main risks

Report section/information
related to response measures

Operatingenvironment risk

 ontraction in existing markets due to customers reducing factory operating rates and reining in capitalC
investment
Decline in prices for products and services due to intensifying competitionDecline in profitability and slowdown in business growth due to spikes in prices for raw materials andenergy costs as well as supply chain disruptions
Decline in yen translation amounts due to changes in exchange rates and other factors
Decline in profits following the introduction and increase of carbon tax on CO2 emitted by the Kurita
Group’s facilities and products, etc.

 urita Group Business
K
StrategyP.14-35
The Kurita Group’s
Businesses
P.36-47
Climate Change
P.66-67

Country risk

 isk of loss of business opportunities and inability to recover investments due to changes in regulatory
Rframeworks and abrupt political and economic changes in Kurita’s markets
Increase in human rights infringements and reputational damage resulting from business continuation orwithdrawal in conflict regions

 he Kurita Group’s
T
Businesses

P.36-47

Disaster risk

 uman losses and loss of business opportunities caused by pandemics
HHuman losses and loss of business opportunities caused by natural disasters including those caused byclimate change

BCMClimate Change

P.72-73
P.66-67

Strategic risk

 ailure to attain goals in medium-term management plan due to delays with organizational reforms,
Fbusiness restructuringSlow pace of business expansion caused by delays with launching new businesses, executing growth strategy
Delays with developing businesses matched to customer needs and characteristics of each country/region
Failure to remain competitive in water treatment market due to delays with introducing IT and building
digital businesses

 urita Group Business
K
StrategyP.14-35
The Kurita Group’s
Businesses
P.36-47

Business risk

 ailure to provide competitive products, services or business models in a timely mannerFClaims for damages and additional costs due to defects or deficiencies in products or services
Loss of competitiveness due to outflow of technical expertiseSlowdown or lack of progress with improving the profitability of overseas businesses driving the Kurita
Group’s growth
Accidents/injuries in the Group’s businesses he Kurita Group’s
T
Businesses
P.36-47
Information Security
Management
P.73

Business sites andGroup companies

Health, safety andwork-related accidents

Risks directly related todaily business activities

Monitoring implementation status andimprovement status

Risks related to quality, the naturalenvironment, traffic accidents,
information security, export
controls, etc.

Financial risk

 oss of public trust caused by inadequate internal controls related to financial reportingLDeterioration in profitability or cash flow due to poor management of Group companies
Write-down of goodwill caused by weak earnings at acquired companies

 inancial and Capital StrategyF
P.26-29
Basic Policies for Constructing
an Internal Control System —Personnel/laborrisk ealth issues caused by long working hours
HDecline in ability to adapt to changes in operating environment due to insufficient diversity initiatives
Decrease in productivity and loss of business opportunities due to decline in employee engagement

 uman Resources StrategyH
P.48-55

Legal andcompliance risk

 oss of public trust due to legal or compliance violations and information breaches
LInfringement of intellectual property rights

Compliance
P.68-69
Intellectual Property Strategy

P.58-59• The above table is not an exhaustive list of the Kurita Group’s risks.
• Please click on the link below for more details about risk factors related to the Group’s business conditions, financial accounts and other items in the Annual Securities
Report that could have a material impact on investor decisions.

Internal Auditing Department

Corporate & Financial Information

Health and
Safety Committees ofbusiness sites and divisions

Departments in charge

Check

Risk category

ReportReport• Review Group-wide risk map• Determine Group-wide material
risks for the next fiscal year

The Platform for Value Creation

Sustainability Committee

Instruct• Monitor progress with risk response
measures in organizational goals
and business plans• Rapidly identify and respond to
emerging risks

Groupwide Risk Map

Executive general manager of the Corporate Control and
Administration Division
ReportDo

Action• Monitor risk response efforts• Identify deteriorating or emerging risks

Risk Management System
President and Representative Executive OfficerPlan• Prioritize risks and formulate response
measures• Incorporate into organizational goals
and business plans

The Kurita Group’s Businesses

chairperson of the Headquarters Health and Safety Committee is
responsible for material risks related to health, safety and workrelated accidents. The executive general manager of each division is
responsible for responding to risks directly associated with day-to-day
business operations, and each division identifies and evaluates risks
related to the operations and Group companies it is in charge of.
Also, responding to risks relating to quality, the natural environment,
traffic accidents, information security, export controls, and so on are
handled by the respective departments responsible. The executive
general manager of the Corporate Control and Administration
Division, the chairperson of each committee and the executive
general manager of each division report periodically to the Board of
Directors on the status of risk management implementation, andreport as necessary to the Board of Directors on the occurrence andimpact of material risks. Furthermore, the Internal Auditing
Department monitors the execution status and improvement statusof risk management measures.

Risk Management PDCA Cycle

Kurita Group Business Strategy

The executive general manager of the Corporate Control and
Administration Division is responsible for monitoring risks andimplementing risk management in the Kurita Group. The executive
general manager regularly analyzes and evaluates the Group’s risks
and conducts ongoing monitoring based on the Group-wide risk map,and also takes steps to prevent risks from occurring. In the event of arisk materializing that could have a serious impact on Kurita’sbusiness, the executive general manager formulates systems withthose responsible for responding to the risk, obtains approval fromthe president and representative executive officer, and immediately
issues instructions. Those responsible for responding to the risk
promptly take action and report to the president and representative
executive officer and the executive general manager of the Corporate
Control and Administration Division, as well as the Board of Directors
or the Audit Committee, regarding the impact of the risk, progresswith mitigation and measures to prevent reoccurrence. The
chairperson of the Sustainability Committee is responsible for tacklingmaterial risks related to compliance and climate change, while the

The Kurita Group uses a Group-wide risk map to identify potential
risks in its business activities and assess risks against monitoring
benchmarks. The Kurita Group also determines material risks for
the Group based on the expected impact of those risks and thelikelihood of them occurring. Material risks are mapped for eachdivision, and divisions devise response measures, incorporate theminto business plans and manage progress, including at Group
companies. Progress is regularly reported to the Board of Directors,
which discusses and formulates material risk and response
measures for the next fiscal year, including responses to emerging
risks caused by changes in the operating environment. For the fiscal
year ending March 31, 2024, we have decided to designate asadditional risks those that require close monitoring, namely, therisks associated with continuing or withdrawing from business
operations in conflict regions and the risk of decrease in productivity
and loss of business opportunities due to decline in employee
engagement, and to strengthen related response measures.

Kurita Group Overview

The Kurita Group defines risk as any event that makes its sustainablegrowth and enhancement of the Group’s corporate value uncertain.
To ensure that opportunities for business growth are not missed due
to decision-making that favors risk avoidance, we work to clarify which

Business Risks and Other Risk Factors https://ir.kurita.co.jp/en/corporate_governance/risk_factors/index.html

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71

The Platform for Value Creation

Risk Management

BCM Promotion System

Business Continuity Management (BCM)

The Kurita Group has taken steps to prepare for sudden unexpected
events such as a major earthquake or natural disaster, a pandemic or
geopolitical risks, with the focus on ensuring both employee safety
and business continuity. This includes establishing an order ofoperational priorities and criteria for decision making and action forwhen such an event occurs, and putting in place response policies,
procedures, systems, and other measures. During normal times,
meanwhile, we engage in management activities such as formulating,
maintaining, and updating emergency plans, securing budgets andresources, implementing countermeasures, conducting educationand training, and carrying out inspections.

In the Kurita Group’s Policy on BCM, formulated in 2018, the basic
policy is to give first priority in an emergency to ensuring employee
safety, and only then to direct efforts to speedy recovery of business
operations and assistance for local communities. To support officers
and employees to take appropriate decisions and action in such asituation, the Company has also prepared a system of documentation
comprising the Kurita Group’s Policy on BCM, the BCM Group
Guidelines, which complements the policy, and BCM Documents
based on the framework of the international standard for BCM, ISO
22301. The Company started implementing the system in the fiscal
year ended March 31, 2023.

Highest Priority on
Ensuring Human Safety

Rapid Recovery ofBusiness Operations

Community Support

We will place the highest priority on ensuring
the peace of mind and safety of officers,
employees and their family members.

We will endeavor to quickly restore operations
at the company’s own facilities, completed
projects, construction projects, etc. This will
facilitate stable delivery of products andservices and allow us to support customers’
recovery efforts.

At the same time as working to prevent
secondary disaster damage at our own sites,
we will support reconstruction in the local
community.

The Group’s BCM activities to date have mainly focused on initiatives
for ensuring employee safety and disaster countermeasures atmanufacturing sites. However, we have also been working to
restructure and strengthen our BCM functions based on theinternational standard ISO 22301 framework and have established a
new approach to the order of priorities for business continuity andassociated action items.
We have additionally taken steps to increase the quality and speedof communication in our initial response to an incident by redefining
what information on disaster impact status needs to be gathered tosupport the establishment of a Disaster Response Headquarters andby reorganizing the associated reporting structure.
To ensure employee safety and to strengthen initial response
capabilities, we carried out a disaster response drill based on the
scenario of an incident occurring while employees are working from
home, which was rolled out to all employees through online

BCM Document System

BCM Group Guidelines

in response to security issues, securing budgets, putting in placeinformation systems for the event of an incident, and introducing
security tools. In parallel, we will provide regular information security
training to Kurita Group employees. In the fiscal year ending March
31, 2024, we will additionally set up a security monitoring system that
operates 24 hours a day 365 days a year on a global and multilingual
platform, establish a computer security incident response Team(CSIRT) to respond to incidents occurring in Japan, and also reinforce
the security environment of the operational technology (OT) which isused to monitor and control not only IT systems but also water
treatment facilities and other installations.
Going forward, with the increase in the incidence andsophistication of cyber-attacks expected to continue, we are working
to put in place an information security system that will allow us tocontinue with uninterrupted value delivery to customers.

The Platform for Value Creation

Kurita Group’s
Policy on BCM

The increasing trend in information security incidents has heightened
the importance of countermeasures for business operators. The Kurita
Group is responding through a globally based security approach withmeasures including review of security levels, introduction of security
tools, and reinforcement of its security response team.
The Kurita Group Digital Management Policy has been upgradedfrom the previous policy covering system development, maintenanceand operation to an information security management policy that
also takes account digital related activities required to drive reformof corporate business activities. In the fiscal year ending March 31,
2024, with the aim of putting in place a management structure for
our IT system that is resilient to risks from natural disasters andcyber-attacks, we formulated a dedicated business continuity planfor the IT system.
We will continue to roll out a range of measures, undertaking
regular assessment of IT risk, implementing organizational upgrades

The Kurita Group’s Businesses

Information Security Management

Kurita Group Business Strategy

BCM Basic Policy

Initiatives to Strengthen BCM Activities

streaming. As well as working to raise the level of disaster knowledge
and awareness among individual employees, we regularly conduct
exercises where we practice confirming the safety of each employee
in the event of a major earthquake or storm, or flood damage to drill
employees in rapid initial response procedures.
To support business continuity, we surveyed customers involved
with social infrastructure and customers to whom we supply ultrapure
water to identify their expectations regarding the restoration of Kurita
Group operations after an event, and expanded the provision of an“event response model” for each customer, which specifies a verticallyintegrated response procedure for sales, engineering, Group
companies, and partner companies and the necessary resources.
Going forward, we will work to embed the utilization of the BCM
Documents and increase their effectiveness by promoting internal
awareness of the documents and conducting education and training
by staff grade and job type. We will also expand initiatives bydefining the deployment scope of the event response model foreach customer. Furthermore, to improve business continuity
functions throughout the supply chain, we will strengthen initiatives
for rapid recovery of our own manufacturing sites and coordination
with partner companies.
Overseas, we shared BCM Documents formulated in Japan with ourGroup companies and formulated BCM Documents to address theinherent risks and business characteristics of each country and region
by conducting local surveys. Going forward, we will work to respondto the increasingly diverse range of global risks and to put in place a
global reporting system for use in an emergency.

Kurita Group Overview

Approach and System for BCM Activities

We have established an organization that integrates the Kurita
Group’s business continuity functions within the Corporate Control
and Administrative Division, whose executive general manager has
been appointed as officer in charge of BCM. The new organization willroll out BCM activities based on an ISO22301-compliant management
system to Group companies in Japan and overseas, progressively
strengthening initiatives designed to ensure both employee safety
and business continuity.

BCM Documents
Corporate & Financial Information

Documents based on the international standard ISO 22301

72

Kurita Water Industries Ltd. Integrated Report 2023

• Basic Policy• Emergency Response Plan

• Crisis Management Plan

• Business Continuity Plan

• Business Recovery Plan

• Operation and Management Plan

Kurita Water Industries Ltd. Integrated Report 2023

73

The Platform for Value Creation

Respect Human Rights

Basic ConceptHuman Rights Due Diligence Process1

Establishment of a Grievance Mechanism

Identify potential human rights risks in the
Company’s business, supply chain, and business
relationships (completed)

3

Ascertain and evaluate the status of potential
human rights risks (completed)

4Stop, prevent, and mitigate negative impacts(completed)5

Conduct follow-up surveys of implementation
status and results

6

Communicate how impacts have been handled

7

Where appropriate, conduct corrective measures,or cooperate on correction

The Board of Directors aims to realize the Group’s sustainable growth andincrease corporate value over the medium and long term by enhancing
management oversight and supporting business strategy planning andexecution.

Michiya Kadota
Director and Chairman

Kurita has transitioned to a Company with agovernance structure and use my past experience at

Nominating Committee, etc., governance structure

the frontline of business execution to oversee thefollowing approval at the Ordinary General Meeting ofGroup’s operations from multiple viewpoints in my

Shareholders in June 2023. Over the years, the Board

new supervisory role. I intend to lead boardof Directors has ensured transparent, objective anddiscussions in a way that allows both external andrational decision-making through the Nomination &internal, non-executive and executive directors toRemuneration Advisory Council and the Successor

candidly discuss and share the Group’s medium- andPlanning Committee, both led by independent

long-term issues, supporting business execution

external directors, and by attending and observing

through constructive dialogue.

other internal committee meetings. However, thisThe diversity of the Board of Directors is a priority

new structure will further strengthen corporate

issue that needs to be addressed. There is a certain

governance by clearly separating managementlevel of diversity in the current board – independent

oversight functions and business execution functions.

external directors account for half the board, female

The board is often faced with complex decisions

directors one quarter, and board members possess adue to rapid changes in the operating environment.

range of skills – but in order to transform Kurita into a

To ensure sustained growth, the Group therefore

global company that grows sustainably, the board

needs to establish a more effective and highly

must be more diverse to respond flexibly to changes

transparent corporate governance structure. Underin the operating environment and drive change. Our

the new structure, the board has delegated significant

goal is to create a board that is even more diverse inauthority for business execution to executive officers,

terms of gender, nationality, age and skills.
We will also encourage greater dialogue with theaccount the views of diverse stakeholders. The role ofGroup’s diverse stakeholders – customers, businessthe board will be to make recommendations from thepartners, employees, shareholders and investors, andperspective of increasing corporate value over the

local communities. Amid growing interest in

medium and long term, promote bold decision-sustainability issues, we will actively create more

making by executive officers, and support business

opportunities to discuss with stakeholders what Kurita

strategy planning and execution.

should be contributing to society. In this way, I hope

In future, the Board of Directors will have toto raise the quality of discussion within the Board ofoperate more rapidly and effectively. As Chairman, I

Directors and further improve corporate governance.

will work to ensure a seamless transition to the new74

Kurita Water Industries Ltd. Integrated Report 2023

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

allowing it to focus on oversight that takes into

The Platform for Value Creation

The Kurita Group operates a whistleblowing desk which employees,
directors and officers of the Group and its business partners canconsult or make reports to regarding legal and regulatory
infringements or misconduct by the Kurita Group. We have also
begun preliminary investigations for the setting up of a grievancemechanism to provide appropriate response in the case of a humanrights issue in the value chain.

2

Incorporate responsible corporate activities into
company policy and management systems(completed)

Message from Chairman of the Board

The Kurita Group’s Businesses

The Kurita Group provides ongoing “Human Rights Training Programs”
to raise employees’ awareness of human rights. We also provide
training for the management of the Company and Group companies
in Japan to increase management awareness of themes of increasing
importance in corporate management and to promote initiatives in
unison with employees. In the fiscal year ended March 31, 2023,
training was provided to employees of the Company and Group
companies in Japan on the subject of human rights infringements
relating to the use of social media. Training was also held on thesubject of business and human rights for the management of theCompany and Group companies in Japan. The rate of participation inthese training programs was 100% of those eligible.

The Kurita Group implements human rights due diligence, checking
for human rights risk or negative impacts on human rights in its
business activities, analyzing and assessing any risk identified, andformulating and implementing appropriate countermeasures. The
Company works with its suppliers to promote respect for humanrights throughout the value chain by encouraging them to respecthuman rights through the prohibition of forced labor and child laborand the elimination of discrimination. The Group also confirms thestatus of compliance through regular monitoring surveys. In the fiscal
year ended March 31, 2023, we submitted our supply chain to an
inspection carried out by an independent specialist auditor. The
auditor identified long working hours and health and safety issues atsome of our supplier companies, which we supported them tocorrect. It was also identified in connection with the technical interntraining program for overseas workers promoted by the Japanese
government that there was a risk of interns being required to pay a
commission above the regulatory level by agencies handling local
intern postings. To take advance preventive action against potential
human rights infringements in the case of a supplier hosting overseas
labor of this kind, the Company has adopted a policy of seeking toactively influence suppliers through briefing meetings and othermeans. Going forward, we will continue to strengthen measures by
expanding the scope of our assessments and working to identify risk.

Kurita Group Business Strategy

Human Rights Awareness Training

Human Rights Due Diligence
Kurita Group Overview

The Kurita Group’s businesses are dependent on relationships withmany stakeholders, making respect for human rights an importantfactor in business management. As a member of society, Kurita has
formulated the Kurita Group Human Rights Policy to fulfill its
responsibility to stakeholders on human rights and to contribute to
the sustainable development of society.
Starting from the fiscal year ending March 31, 2024, “conductbusiness activities respecting human rights” has been declared as oneof the Kurita Group’s materiality themes. We aim to show respect for
the human rights of all people in line with international human rights
standards. This human-focused initiative fits within the framework of
our corporate philosophy’s commitment to creating an environment
in which nature and humanity are in harmony.

Corporate Governance75

The Platform for Value Creation

Corporate Governance

Basic Concept

Composition of the Board of Directors

Corporate Governance StructureComposition of the Board of Directors (As of June 30)
External directors

Internal directors

Female directors

Percentage of external directors (%)

50%

12
10

11
8

38%

9

40%
10
6

6

8

8

27%

33%

5

4

3

3

3

17%
4
2

2

2

4

2

2

2

2021

2022

2023

1

2018

2019

2020

Kurita Group Business Strategy

supervisory function via the separation of the oversight and executionof management, this structure involves the election of independent
external directors to supervise from the perspective of theshareholders. The aim of these changes is to boost corporate value
by making management more transparent, sound and efficient.

On June 29, 2023, the Group made the transition to the corporate
governance system of a company with a Nominating Committee, etc.,
in order to establish an effective and transparent governancestructure that strengthens the management supervision and businessexecution functions. In addition to ensuring a highly effective

To fulfill the highly effective supervisory function over operational
execution, the Board of Directors will consist of personnel with thenecessary knowledge, experience and competence, taking into
consideration gender and diversity. With regard to this knowledge,
experience and competence, the Company will identify skills regarding
corporate management, management planning and other aspects ofcorporate governance and management, skills required to realize thedirection sought by the Kurita Group of leveraging diversity to deepenwater knowledge and using water knowledge to create social value,
and necessary skills, etc., for realizing the Corporate Philosophy. The
Board of Directors as a whole will be organized in a way thatcomplements the above.
In accordance with a resolution of the Ordinary General Meeting of
Shareholders in June 2023, one half of the members of the Board of
Directors are now independent external directors. This set-up is aimed
at ensuring the Board remains highly effective in its supervisory role.

Kurita Group Overview

various stakeholders such as customers, business partners,
employees, shareholders, and local communities while striving tomeet their expectations. To this end, the Kurita Group is working toestablish corporate governance, with the aim of realizing transparent,
fair, prompt, and decisive decision-making and highly effective
management supervision.

The Kurita Group aims to contribute broadly to society throughcorporate activities in the fields of water and the environment inaccordance with the Kurita corporate philosophy, “Study theproperties of water, master them, and we will create an environment
in which nature and humanity are in harmony.” The Kurita Group will
work to promote sustainable growth and enhance its corporate value
in the medium and long term, deferring to the rights and positions ofCorporate Governance Structure
General Meeting of Shareholders

Timeline of Corporate Governance Improvements

Discussion &ReportSupervisoryside

Appointment &Dismissal

Executive side
Executive Committee

Board of Directors
Audit

Executive officers

Nominating
Committee

Discussion & Report

Investment Committee

Audit

Sustainability
Committee

Cooperation

Cooperation

Cooperation

Internal Auditing
Department

Company with an Audit & Supervisory Board system

Boardchairperson

President, Chairman

ReportAudit Committee

Operating divisions

Company with a Nominating Committee, etc., system
From June 2023

Chairman, non-executive

2006 Introduced the corporate officer system
2014 Appointed an independent external director

Audit Committee

2014 Reduced the term of office for directors from two years to one

Various committees

Audit Report

Transition in June 2023

Organizational
designInstruction

PSV-27
From April 2023

Corporate
governance structure2016 Established Nomination &Remuneration Advisory Council

Nominating Committee

2016 Started evaluating the effectiveness of the Board of Directors
2018 Appointed a female external director

Internal Audit

The Platform for Value Creation

Discussion &ReportMVP-22
April 2018－March 2023

To March 2018

Supervision

Audit
ReportAccounting Auditor

Election & Dismissal

Compensation
Committee

can maintain the highest level of functionality, the Group will seek tobuild an optimized corporate governance set-up by reinforcing
governance through appropriate review and adjustment.

President and Representative
Executive Officer

ReportReportAppointment & Dismissal

Advisory & Report

Appointment & Dismissal

Election & Dismissal

Sustainability
Advisory Council

The Kurita Group has sought to develop its governance structure toensure that it fulfils its social obligations as a global enterprise while
continuing to grow. Going forward, to ensure the Board of Directors

The Kurita Group’s Businesses

Election &Dismissal

2018 Established the Investment Committee
2019 Established the Successor
Planning Committee

Accounting Audit & Internal Control Audit

2020 Disclosure of Skills Matrix

Sustainability Advisory Council
The Company has established the Sustainability Advisory Council
as a supervisory body to deliberate matters related tosustainability around the world, and to provide related advice andreports to the Board of Directors. Composed of six directors
including four external directors and chaired by external director

Remuneration
systemYoshiko Takayama, the Sustainability Advisory Council is charged
with examining the Company’s approach to sustainability
management in the best interests of varied stakeholders, basedon a medium- to long-term perspective.

2017 Increased the proportion of remuneration linked to consolidated results
performance and introduced a performance-linked stock compensation program
2019 Revised the remuneration system for corporate officers
2022 Trialed reflecting non-financial indicators in
performance evaluation standards

From April 2023
Inclusion of non-financial
indicators and TSR outcomesin performance evaluation
standards for executive
officers and corporate officers

2007 Formulated Basic Policies for Constructing an Internal Control System

Other2014 Established liability limitation contract provisions for external directors and external members of the Audit & Supervisory Board
2016 Formulated Corporate Governance Policies (subject to regular review)

Corporate & Financial Information

Compensation Committee

2009 Abolished the retirement benefit system for directors* Fiscal years ended March 31

76

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Kurita Water Industries Ltd. Integrated Report 2023

77

The Platform for Value Creation

Corporate Governance

Succession planning process

Nominating Committee

the result of a highly objective and transparent process that includes
taking into consideration the results of assessments of eachcandidate by an external evaluation body.
Kurita Group Overview

The Nominating Committee selects the candidates for president andexecutive officer positions and formulates development measures asdelegated by the Board of Directors. Selection and development areSuccession Planning Flowchart (President/Executive Officers)
Nominating Committee
Chairperson

Keiko Tanaka
External Director

Committee members
Selection of successor candidate

Kenjiro Kobayashi

Michiya Kadota

External Director

Director and Chairman

Masahiro Miyazaki

Hirohiko Ejiri

External Director

Director

Candidaterecommendation

Executive
officers

Review result
Selection

ReportAssessment

Interview

Nominating
Committee

Board ofDirectors

Externalorganization

President,
external
directors

Select points forstrengthening
President,
external
directors

Set measures

Confirmation

Nominating
Committee

Board ofDirectors

Message from Committee Chairperson
Feedback to candidate, assignment, appointment, etc.

Formation of Successor Planning Committee

78

Kurita Water Industries Ltd. Integrated Report 2023

The Company’s external directors are appointed for a term of one
year and may concurrently hold positions at up to three listedcompanies including the Company. The external directors use theirknowledge and specialist insight accumulated through management
experience to evaluate business management and provide opinionsfrom the perspectives of the Kurita Group’s sustainable growth andincreasing corporate value over the medium to long term, helping toenhance the rationality and transparency of decision-making by the
Board of Directors.

Message from Recently Appointed External Director
I was recently appointed as an external director of Kurita. The insistent demand from capital
markets today is to generate shareholder value by turning sustainability issues into business
opportunities. In this context, Kurita is addressing this issue by seeking to create new value
through the growth of the CSV business. The highly independent and diverse nature of theBoard of Directors means that we have ample opportunity to discuss initiatives and review
progress, while also providing strong support to management in achieving goals. I will fulfill my
responsibilities as a director, seeking to translate into gains in corporate value the enhanced
oversight function of the Board of Directors now that Kurita has transitioned to thegovernance system of a company with a Nominating Committee, etc.

Selection of candidates for the successor to the President
and Executive Officer and succession planning policies

The Nominating Committee will deliberate on requirements for the
President and Executive Officer in light of the aims of the Company
and specific management strategies and then report the results to
the Board of Directors. The Nominating Committee will select multiple
candidates for the successor to the President and Executive Officer
and develop succession planning measures based on requirements
set forth by the Board of Directors. The Board of Directors will
regularly confirm the selection of candidates for the successor to the
President and Executive Officer, development of the succession
planning measures, and its progress based on reports from theNominating Committee.

The activities of the independent external directors include making
proactive statements and proposals in Board of Directors meetings,
as well as attending as observers in internal committees such as theSustainability Committee, the DX Committee, and the Health and
Safety Committee. They also make on-site visits to gain a deeper
understanding of operations for evaluating management.

Corporate & Financial Information

The process of selecting candidates for external and other directors
is designed to give due consideration to diversity while creating asystem of management oversight that enhances corporate value andreflects the perspectives of shareholders and other stakeholders.
Nomination of candidates for director is based on predetermined
requirements. The Nominating Committee selects candidates forrecommendation to the General Meeting of Shareholders, including aclear rationale for each.

Independent External Directors

The Platform for Value Creation

Policies and procedures for nominating directors

To date, the Board of Directors has approved nominations
for directors and members of the Audit & Supervisory
Board based on non-binding recommendations from theNomination & Remuneration Advisory Council. With thetransition to a company with a Nominating Committee, etc.,
following a vote by the Ordinary General Meeting of
Shareholders in June 2023, the new Nominating Committee
will take over the role of the Successor Planning
Committee. The Nominating Committee will be responsible
for preparing resolutions for shareholder approval relating
to the election and removal of directors, and for
determining succession and development plans for thepresident and executive officers. While we must performthese roles with objectivity and transparency, that is not allthat is demanded of us. Under PSV-27, Kurita aims torealize a “value-driven transformation of business models
and change of business processes.” I believe it is also vitalthat we approach our mission from the viewpoint ofconsidering how best to establish and to support seniorGroup management in driving this process of constantglobal change. Our aim will be to develop and promotereform-minded top managers while increasing diversity
within management oversight structures.

The Kurita Group’s Businesses

Kurita created the Successor Planning Committee in 2018as the body responsible for developing and selecting
candidates for appointment to the positions of President,
Director and Corporate Officer. Chaired by an external
director, its members principally comprise external
directors and Audit & Supervisory Board members. This
set-up aims to enhance the objectivity and transparency ofthese appointments.
Prior to the April 2023 appointment of Hirohiko Ejiri aspresident, we selected several potential candidates tosucceed the position and assigned each of them achallenging role. We formulated individual development
measures based on assessments by an external evaluationbody and monitored their progress on an annual basis.
The candidate selection process was not just about finding
the next president, but was designed to provide an
ongoing and systematic framework for the development of
directors and corporate officers. As a member of thecommittee, I took part in the succession deliberations. I
believe the succession planning process at Kurita is
objective and transparent.

Transition to Nominating Committee

Kurita Group Business Strategy

President

Successor candidate development

Yoshiko Takayama
Independent External Director

Kurita Water Industries Ltd. Integrated Report 2023

79

The Platform for Value Creation

Corporate Governance

Skills Matrix of Directors

Audit Committee

Audit Committee Chairperson

Skills Matrix
Name

Michiya Kadota
Hirohiko Ejiri

Directors

Legal and HR
management

◎

◎

◎

○

○

―

◎

◎

◎

○

Yukihiko Mutou
Kenjiro Kobayashi (external)
Keiko Tanaka (external)
Masahiro Miyazaki (external)
Yoshiko Takayama (external)○◎◎

Human rights

○

―

◎

◎

◎

○

―

◎

○

○

―

―

◎

―
―

◎

External Director

Understanding
and solving
issues on site*2

R&D,
technology,
andengineering

○

◎

◎

◎

○

―

―

―

―

―

Global

○

◎

◎

―

◎

―

―

―

―

◎

―

―

―

◎

―

―

―

―

―

◎

―

―

DX

―

―

―

―

―

Among the knowledge and experience of each director, those with ○ are fields where they have strength while ◎ indicates an area where they are especially promising.

Environment

―
―
―
―

These are regarded as the skills, knowledge, and experience that provide a foundation for conducting management oversight.

Human rights

In developing its business globally, the Kurita Group encounters diverse working environments, business customs, and trading practices, andthere is a need to engage in business activities while respecting the human rights of stakeholders. To this end, the Group has defined a basic
materiality theme as “Conduct business activities respecting human rights.” The Group is promoting initiatives to ensure respect for thehuman rights of employees, suppliers and other stakeholders in the countries and regions where it conducts business. The Group also
recognizes the importance of leveraging diversity in human resources as a foundation for innovation and as a source of value creation
leading to sustainable growth. ‘Human rights’ has thus been selected as a skill category for Board oversight of management due to its
importance as a management issue.

GlobalTo accelerate global business development, the Kurita Group is working to speed up the development of products and services tailored to
local and regional market characteristics. The category ‘Global’ represents a level of international experience and understanding of theseregions and countries. We see it as one of the essential elements in cultivating the “diverse points of contact with sites” that constitute asource of the Group’s competitive advantage. ‘Global’ has been selected as a skill category for Board oversight of management because we
consider a deep knowledge of global markets as essential for developing business globally and increasing corporate value.

Understanding
and solving
issues on site

The Kurita Group delivers solutions addressing water-related issues at the sites of various customers worldwide. At “diverse points of contact
with sites,” we engage seriously with customers’ issues, utilizing our “water knowledge” in the form of accumulated information and data tocreate proprietary and innovative solutions. We see this as the source of shared value creation with customers and society. This area has
been selected as a skill category for Board oversight of management because we value having a deep understanding of the points of contact
with customer sites as a source of value creation, alongside extensive experience of addressing such issues.

R&D,
technology,
andengineering

The Group combines technology and expertise acquired from various business domains to create new products, services, and technologies. Amid
significant recent changes in the external environment, we consider ensuring customer business continuity to be one area where we can provide
added value. Accordingly, we have reviewed our methods of product, service, and technology delivery and the procurement and production
set-up to improve our cost competitiveness and production capacity. Because we see strengthening of development, technology, and production
as a key platform for creating and providing solutions, this area has been selected as a skill category for Board oversight of management.

DX

The Group aims to achieve DX by utilizing digital technology to change business processes and to transform business models. ‘DX’ has been
selected as a skill category for Board oversight of management since we consider it a priority for the deployment of digital tools, AI, and IoT,
and for the utilization of information and data collected from diverse customer sites as “water knowledge,” resulting in creation of innovative
shared value with customers and society.

Environment

The three shared value themes that the Kurita Group has defined as Kurita Group’s Materiality are ‘Solve issues related to water resources,’‘Contribute to the realization of a decarbonized society,’ and ‘Contribute to building a circular economy society.’ These are priority issues that
we seek to address. We have defined as “CSV business” the Group products, technologies and business models that significantly contributeto water saving, the reduction of GHG emissions and resource input, and the recycling of resources compared with prior levels. We areworking to create shared value with society via their development and provision to customers. ‘Environment’ has been selected as a skill
category for Board oversight of management because we regard it as part of our mission to reduce environmental impact through ourbusiness activities.

▼

80

Kurita Water Industries Ltd. Integrated Report 2023

Auditing set-up

The Audit Committee is composed of three directors (of whom twoare external directors) with no involvement in operational execution
across the Company or its subsidiaries. One of the external directors
serves as the chair. To ensure a high degree of independence fromoperational execution, two of the Audit Committee members serve as
full-time corporate auditors (including one external director). Basedon their unique position, the full-time corporate auditors can focus on
preparing conditions for internal audits and actively collecting internal
information, while conducting daily monitoring of the development
and operational status of the internal control systems.
The Company has created a dedicated secretariat to assist membersof the Audit Committee in their duties, staffed by full-time employees. If
required, the Audit Committee may also request additional assistancefrom employees assigned to the Internal Auditing Department, which
manages the Company’s internal controls.

executive with suggestions and reports concerning points
where improvement is required. Tapping into theresources of the newly established secretariat to the Audit
Committee, and based on close cooperation, we willcontinue to share information and exchange opinions with
the Internal Auditing Department, which manages internal
controls, the accounting auditor and other external
directors. Moreover, due to the rapidly progressing global
development of the Kurita Group, including its Japaneseand overseas subsidiaries, we will be paying particularly
close attention to the governance of the Group. Besides
collecting information from related departments, we will beseeking to undertake more audits of subsidiaries, including
overseas Group companies, while reviewing theeffectiveness of such audits.

Auditing by Audit & Supervisory Board members in thefiscal year ended March 31, 2023

All Audit & Supervisory Board members attended the 11 meetings of
the Audit & Supervisory Board held in the fiscal year ended March 31,
2023. The main matters discussed by the Audit & Supervisory Board
included the formulation of audit policies and plans, preparation ofaudit reports, the election of the accounting auditor and related
remuneration, and agenda items for the Ordinary General Meeting of
Shareholders. Within audit plans, priority items for audit are theconstruction and operational status of internal control systems(including those relating to financial reporting) and risk management
systems, and the status of priority measures in the business plan.
The Kurita Group’s governance system for the fiscal year ended
March 31, 2023 was that of a company with an Audit & Supervisory
Board. This changed to the system of a company with a Nominating
Committee, etc., after the approval of the Ordinary General Meetingof Shareholders held on June 29, 2023.

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

Corporate
governance andmanagement

Creating social value

Reason for selection

Following the recent changes to the governance system, I
will be serving as the chair of the Audit Committee. I willcontinue to conduct audits as appropriate, utilizing myexperience on the Audit & Supervisory Board. In addition,
cognizant of my outside perspective as an external
director, I will perform my role in supervisory and decisionmaking functions so the Company’s recent corporate
governance reforms function as they were intended andtranslate to enhanced corporate value.
The role of the Audit Committee is threefold: to audit
the execution of duties by directors and executive officers;
to prepare audit reports; and to evaluate the execution ofduties by the accounting auditor. In addition, thecommittee is expected to identify any issues or problems
related to the execution of duties and provide the

The Platform for Value Creation

SkillsCorporate
management/
Corporateplanning
Finance andaccounting
Legal and HR
management

Message from Committee Chairperson

The Kurita Group’s Businesses

High-level concepts▼

Director◎

Skills and Reason for Selection

Making full use ofwater knowledge

Yukihiko Mutou

External Director○*1 The “diversity” means the variety of elements that form “diverse points of contact with sites” that are the source of the Kurita Group’s competitiveness, such as contact points with customers,
business fields, business development areas / countries, and technology fields, in addition to human resources.
*2 The Kurita Group provides solutions to issues derived from water at sites of customers throughout the world. The Kurita Group creates unique solutions by making use of information anddata, which it has accumulated by seriously addressing customer issues at diverse points of contact with sites, as its water knowledge. We believe that these activities constitute the sourceof creation of shared value with customers and society. We believe that a deep understanding of customer sites, which leads to value creation, and the experience of committing oneself tosolving issues at customer sites are skills needed by the Company’s directors to make important decisions and effectively supervise operational execution at the Company.

Leveraging diversity

Yoshiko Takayama

Kurita Group Business Strategy

Shuji Shirode

Finance andaccounting

Committee members

Kenjiro Kobayashi

Leveraging diversity*1 ▶ Making full use of water knowledge ▶ Creating social value

Corporate governance and management
Corporate
management
Corporateplanning

Kurita Group Overview

Towards realizing the corporate philosophy, the skills set out on the skills matrix comprise the knowledge, experience, and capabilities necessary
based on the Company’s management strategies, such as the Group’s value creation story and medium-term management plan.

81

The Platform for Value Creation

Corporate Governance

System of executive remuneration

Compensation Committee

Masahiro Miyazaki
External Director

Committee members

Keiko Tanaka

Michiya Kadota

External Director

Director and Chairman

Yoshiko Takayama

Hirohiko Ejiri

External Director

Director

The environment-related materiality indicators set for theGroup are our targets for the CSV business, which Kurita
has positioned as a growth driver. These targets relate towhat we achieve for customers in terms of contributing towater savings, reductions in GHG emissions, resource
recovery and reduction or resource input. In this way, we
are linking our efforts to hit financial targets with nonfinancial gains. As part of the remuneration of executive
officers, we are also establishing a framework to set
performance-linked incentives based on the degree towhich these environmental indicators are achieved.
Discussions are continuing to create over the medium andlong term an effective and transparent remuneration systemtied to management performance that is well regarded
internally and externally.

Performance-linked remuneration
Base remuneration

Directors
Executive officers

Short-term incentive
remuneration

Long-term incentive
remuneration

Total

100%

0%

0%

100%

38–72%

0–29%

28–33%

100%

The Kurita Group’s Businesses

I will be serving as the chair of the Compensation
Committee from the fiscal year ending March 31, 2024. In
last year’s Integrated Report, I discussed the importance ofKurita contributing to addressing issues faced by society
and customers. In an age where the unexpected occurs
frequently, I said that we must have the courage to makechanges and to change ourselves while maintaining speed
and flexibility. Kurita’s transition to the governance systemof a company with a Nominating Committee, etc., is asignificant change that involves the replacement of thevoluntary Nomination & Remuneration Advisory Council
with a statutory Compensation Committee. This move isaimed at further improving deliberation processes toensure objective results.

Kurita Group Business Strategy

Message from Committee Chairperson• Directors
To facilitate a core focus on management supervision, theremuneration of directors is limited to a fixed salary. The fixed
remuneration is determined by position for directors, except for
directors who also serve on the Audit Committee, whose level of
remuneration is linked to the nature of the contractual working
arrangement.
In addition, for directors to share the risk of share price fluctuations
with shareholders, a portion of the fixed remuneration for directors(excluding external directors and those directors serving on the Audit
Committee) is paid in the form of non-performance-linked stock. For
external directors and directors who serve on the Audit Committee, aportion of the fixed remuneration is contributed to the Directors’
Shareholding Scheme, which is used to acquire Company shares. For
directors who are not external directors or directors serving on the
Audit Committee, the Company has introduced a non-performancelinked stock compensation plan in which points are awarded
according to job position and annual distributions of restricted stock
are made based on the number of points awarded.

Kurita Group Overview

Compensation Committee
Chairperson• Executive officers
Remuneration of executive officers is composed of a fixed salary basedon job position plus a performance-linked portion split into short-termand long-term incentive components. The short-term incentive consistsof four amounts based on: consolidated performance; the performanceof operations over which executive officers have individual
responsibility; metrics for other contributions; and the environmental
impact coefficient. The metric used for consolidated performance is theyear-on-year change in ROIC. For operational earnings, the metric usedis the variance between the consolidated operating profit margin andbusiness profit margin for the executive officer’s divisions and theirrespective targets. Other contributions are evaluated with reference toitems not reflected in the fiscal year’s results such as initiatives tostrengthen the corporate structure and implementation of M&A andother large-scale investment projects. The environmental impact
coefficient which is designed to create corporate value through social
value creation, is calculated based on the percentage achievement of
the plan for each metric measured within the CSV business (amountsof water savings, avoid in GHG emissions, and amounts of resource
recovery or reduction of resource input). The short-term incentive isthen calculated by taking a base amount determined by job position
and applying to it a multiplication rate proportional to the degree ofattainment indicated by the results metrics and the environmental
impact coefficient. The long-term incentive comprises a performancelinked stock compensation program in which points are awarded
according to job position and based on ROE and total shareholder
return (TSR) for each fiscal year during the term of office, with annual
distributions of restricted stock being made according to the numberof points awarded. This remuneration is subject to the determinationof the Compensation Committee, with related status updates promptly
reported to the Board of Directors.

The policies relating to remuneration amounts and calculation
methods for directors and executive officers are determined for eachposition in line with the Group’s relevant basic remuneration policy.
With the aim of increasing the objectivity and transparency ofrelated decision-making processes, the structure and levels of
remuneration for directors and executive officers as well as theperformance evaluation of executive officers are determined by theCompensation Committee, with related status updates promptly
reported to the Board of Directors.

Note: Ratios are adjusted by multiplying numbers of points awarded based on earnings in relevant fiscal years by the share price at the time of system introduction.

Basic policy

Objectives of the basic policy

1. The remuneration paid to directors and executive officers isdesigned to attract and retain talented people with diverse skills,
experience, etc., to help realize the corporate philosophy

The basic policy is to establish a structure and level of remunerationthat enables us to secure excellent personnel capable of supervisingand executing the management of the Company in order to realize its
corporate philosophy.

2. The Company intends that remuneration be linked to businessperformance and medium- to long-term corporate value in orderto function as a sound incentive for sustainable growth82

Kurita Water Industries Ltd. Integrated Report 2023

In addition to establishing a periodic remuneration level checkprocess that refers to external remuneration data, the remuneration
determination process shall be highly objective and transparent incompliance with the Companies Act and other laws and regulations
pertaining to remuneration for directors and executive officers.

The total remuneration amounts paid for the fiscal year ended March 31, 2023, including breakdowns by executive classification, remuneration
type and numbers of eligible officers, are summarized below.

Total amount of remuneration by type (millions of yen)

Base remuneration

Performance-linked
remuneration

Amount ofnonmonetary
remuneration, etc., inperformance-linked
remuneration

384

248

135

48

6

Members of the Audit &Supervisory Board(excluding external members)

34

34

―

―

1

External officers

99

99

―

―

6

Total amount of
remuneration, etc.
(millions of yen)

Directors(excluding external directors)

Officer classification

Number of eligible
payees for baseremuneration

Notes:
1. Total director remuneration as stated above includes provisions of ¥33 million for short-term incentives and ¥137 million for long-term incentives.
2. The breakdown of nonmonetary remuneration is entirely in the form of performance-linked remuneration.

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

3. The decision-making process of remuneration shall be highly
transparent so that the objectivity of remuneration decisions will
be ensured.

The remuneration system shall function as a sound incentive forsustainable growth, taking into account the enhancement ofcorporate value from a long-term perspective and theaccommodation of expectations and requests from shareholders andother stakeholders.

Remuneration amounts by executive classification

The Platform for Value Creation

Basic Policy on Determining Remuneration for Directors and Executive Officers

83

The Platform for Value Creation

Corporate GovernanceEvaluation of the Effectiveness of the Board of Directors

Evaluation method

The evaluation is carried out via a written survey with each of the
respondents identified. Following a discussion using the aggregatedresults, the Board of Directors evaluates its effectiveness, identifies
problems, designates issues to be addressed and establishes
measures. These matters are then adopted by a resolution of theBoard. The survey is revised each fiscal year based on the results ofthe previous year’s survey.

Evaluation
periodJanuary to December 2022

Evaluation results

Through the following measures, we will build a DX promotion
structure and improve the quality of constructive dialogue withshareholders and investors.
(1) Clarify the direction of the transformation of the business modeland the business process utilizing digital technology thatmanagement has considered through discussions at the Board of
Directors.
(2) B ased on the opinions and expectations of shareholders andinvestors, directors and officers will create opportunities for
dialogue with shareholders and investors regarding their areas of
responsibility and areas of expertise based on the direction that
the Group is aiming for through various strategies.

Status of initiatives to tackle issues raised in previous
evaluation results

The measures outlined below were taken by the Company to address
the issue raised in the previous evaluation result, namely “To increase
the quality of dialogue with shareholders and investors as a way ofbuilding corporate value, Board members should further boost theirawareness of external viewpoints in executing their duties.” Other
initiatives as outlined below were also pursued to address theongoing issue of “building and monitoring the DX promotion
structure.”• Outcomes of shareholder/investor dialogues in the form of reports
on IR/SR activities were shared with all members of the Board of
Directors using the executive conferencing system.
• T o promote greater understanding of each Board member’s
position, a forum was established to make and discuss proposals
based on the specialist expertise, knowledge, experience andbackground of each individual member of the Board of Directors.
• A report was requested from the Human Resources Development
Committee to review personnel development programs. This wasused by the Board of Directors as the basis for a discussion for
setting the future direction in this area, based on the expectationsof shareholders and investors.
• Regular DX study sessions were held for executives to help deepen
their understanding of DX issues. However, the speed of developinga DX promotion structure that can lead to the reforming of businessmodels and processes remains an issue.

Investor and shareholder relations activities

The Group strives to secure opportunities for dialogue withinstitutional investors in Japan and overseas and with retail investors
in Japan in the form of various presentations and briefings. For
financial results briefings, the president and the executive generalmanager of the Corporate Control and Administration Division are
the main speakers, while day-to-day communications are theresponsibility of the executive general manager of the Corporate
Control and Administration Division and are carried out incoordination between personnel assigned to investor andshareholder relations and staff responsible for ESG activities. The useof teleconferences and online meetings for dialogue with institutional
investors continued even after the downgrade of the COVID
pandemic to Class 5, the same category as influenza. Kurita also
received more visits from overseas investors and conducted more
overseas roadshows to meet directly with investors. In addition, SR
activities continued, mainly in the form of sustainability initiatives andmeetings with shareholders on the topic of corporate governance. A
total of approximately 290 separate IR/SR meetings were held in thefiscal year ended March 31, 2023. We also organized laboratory tours
for both institutional and retail investors on R&D and innovation at
the Kurita Innovation Hub, which was established in April 2022.
The views and expectations gained from dialogues with shareholders
and investors are provided promptly as feedback to various layers ofmanagement, including directors, to help inform improvements to theGroup’s management, disclosures and other activities.

• In some cases, the Company holds shares of other listed companies
to strengthen business relationships, etc.
• When holding such shares, the Company makes efforts to minimize
the risk of holding the shares. The rationale for holding each stock isreviewed on a regular or timely basis by the Board of Directors.
Based on the results of the examination, the Company works to
reduce the holding of shares of other listed companies.
• The Company exercises voting rights for each proposal based onwhether it will contribute to an increase in shareholder value.
• If a shareholder indicates its intention to sell the Company’s shares,
the Company will not prevent the shareholder from making suchsale, etc.

Size of Cross-Shareholdings* Portfolio (As of March 31)
No. of names

B/S carrying value (millions of yen)28
26

20,63824,81024

22
20

20,101
16,158

IR/SR Activities in the Fiscal Year Ended March 31, 2023
Dialogue events

Number of
eventsFinancial results briefings

4 times

Small group meeting

3 times

Kurita Innovation Hub laboratory tour for
institutional investors

1 timeOverseas roadshows

2 times

Participation in conferences held bysecurities companies

8 times

Individual meetings (including SR events)

Total approx. 290
times

Letter to Shareholders

1 timeKurita Innovation Hub laboratory tour forindividual investors

3 times

2019

2020

2021

2022

2023

* N ote: Investment equity securities held for purposes other than pureinvestment (excluding unlisted equity securities)

Corporate & Financial Information

Individual
investors(including
shareholders)

Kurita Water Industries Ltd. Integrated Report 2023

Cross-shareholdings policy

8,116Institutional
investors(including
shareholders)

84

The Company holds shares of other listed companies to strengthenbusiness relationships. We verify the economic rationale for mutualshareholdings and examine relationships with companies whose
shares the Company holds based on our transaction history. The
Board of Directors conducts periodic reviews of the appropriatenessof Kurita’s cross-shareholdings and is looking to cut the number ofsuch shares held. As of March 31, 2023, compared with four years
earlier, the total cross-shareholdings portfolio had shrunk by about
30% in terms of the number of names and by about 60% in terms ofthe carrying value as stated on the balance sheet.

The Platform for Value Creation

According to the evaluation results for January to December 2022, theaverage self-evaluation of all directors and members of the Audit &Supervisory Board was generally good in all six areas, indicating thatthe Board of Directors is operating effectively. By category, “4)operation of the Board of Directors” was most highly evaluated as in
the previous evaluation. This was followed by “2) Fulfilling the functionof external directors” and “5) contributions of individual directors andmembers of the Audit & Supervisory Board.” However, in the “1) roles
and responsibilities of the Board of Directors” category, items related
to the building and monitoring of the DX promotion structure and “6)
dialogue with shareholders” received relatively low valuations
compared with other items.

Measures

The Kurita Group respects the interests of shareholders inmanagement and strives to listen to its shareholders and investors
and promote constructive dialogue with them in order to contributeto increasing medium- to long-term corporate value. In
communicating information, the Company emphasizes fairness andtransparency. The materials and summary of the Q&A sessions of theCompany’s presentation meetings are posted on Kurita’s investor
relations website to ensure fair information disclosure.
To make IR disclosures more convenient for shareholders, theGroup also publishes English translations of the Notice ofConvocation of the General Meeting of Shareholders (including
advance notification prior to the sending of this notice) and the
Corporate Governance Report.

The Kurita Group’s Businesses

Evaluation
items

The following six themes were evaluated1) R oles and responsibilities of the Board of
Directors
2) F ulfilling the function of external directors3) C omposition of the Board of Directors4) O peration of the Board of Directors5) C ontributions of individual directors andmembers of the Audit & Supervisory Board
6) D ialogue with shareholders

The Board of Directors has to show clarified direction for
management policy which is planned by management members andidentify important appeal points for investors and shareholders to
improve the quality of the dialogue.

Kurita Group Business Strategy

Evaluation
Method• Self-Evaluation• T his evaluation was conducted via a written
survey, with each of the respondents identified.
Following a discussion using the aggregatedresults, the Board of Directors evaluated its
effectiveness, clarified issues and adopted
measures for the future.

Issue

Shareholdings of Other Listed Companies
Kurita Group Overview

The Board of Directors analyzes and evaluates its effectiveness every
year in order to fulfill its expected roles and functions more
effectively.

Dialogue with Shareholders and Investors

Kurita Water Industries Ltd. Integrated Report 2023

85

Section 5:

Financial & Corporate
Information

Directors, Executive Officers, and Corporate Officers(As of August 31, 2023)

Directors

Executive Officers
Kurita Group Overview

Hirohiko Ejiri

Shuji Shirode

Yukihiko Mutou

Hirohiko Ejiri

Yasuo Suzuki

Shuji Shirode

Katsuya Amano

Director and Chairman
Member of the Nominating Committee
Member of the Compensation Committee

Director
Member of the Nominating Committee
Member of the Compensation Committee

Director

Director
Member of the Audit Committee

President and Representative Executive
Officer

Senior Managing Executive Officer

Managing Executive Officer

Executive Officer

1997
2014
2018
2020

2016 Joined Kurita Water Industries Ltd.
2018 Corporate Officer
2021 Director (to present)
Executive General Manager ofCorporate Control and Administration
Division (to present)
2023 Managing Executive Officer(to present)

1992 Joined Kurita Water Industries Ltd.
2021 Corporate Officer
2022 Director
Executive General Manager ofEngineering Division and Chief
Business Officer for Facility Operation
2023 Executive General Manager ofElectronics Industry Division and Chief
Business Officer for Electronics
Industry (to present)
Executive Officer (to present)

1983 Joined Kurita Water Industries Ltd.
2013 Corporate Officer
2014 Director
Executive General Manager of
Administrative Division2016 President and Representative Director
2023 Chairman and Representative Director
Director and Chairman (to present)

1985
2014
2016
2019
2020

1991
2016
2018
2019

Joined Kurita Water Industries Ltd.
Corporate Officer
Director
Member of the Audit &Supervisory Board
2023 Director (to present)

1985
2014
2016
2019
2020

Joined Kurita Water Industries Ltd.
Corporate Officer
Director
Managing Director
Executive General Manager ofEngineering Division and Chief
Business Officer for Facilities Business
2021 Executive Senior Managing Director
and Representative Director
2022 Executive General Manager of Japan
Sales Business Division and Chief
Business Officer for
Chemical Operation
2023 President and Representative Director
Director (to present)
President and Representative
Executive Officer (to present)

Joined Kurita Water Industries Ltd.
Corporate Officer
Director
Managing Director
Executive General Manager of Global
Business Division and Chief Business
Officer for Global Business2023 Executive General Manager ofRegional Management Division andChief Business Officer for GeneralIndustries (to present)
Senior Managing Executive Officer(to present)

Corporate Officers

Masahiro Miyazaki

Yoshiko Takayama

Kunihiro Kuse

Jordi VERDÉS Prieto

Director (External Director)
Chairperson of the Nominating Committee
Member of the Compensation Committee

Director (External Director)
Chairperson of the Compensation Committee
Member of the Nominating Committee

Director (External Director)
Member of the Compensation Committee
Member of the Audit Committee

Executive Officer

Executive Officer

1977 Joined Japan Development Bank
(current Development Bank of Japan Inc.)
2010 Representative Director and Executive
Vice President of Japan Industrial
Solutions Co., Ltd.
2016 External Member of the Audit &Supervisory Board ofKurita Water Industries Ltd.
2023 External Director of Kurita Water
Industries Ltd. (to present)

1984 Joined NISSAN MOTOR CO., LTD.
2013 Acted as Vice President of JATCO Ltd.
2014 Ambassador Extraordinary andPlenipotentiary of Japan to Uruguay
2018 Vice President of Nissan Financial
Services Co., Ltd.
2019 External Director of Kurita Water
Industries Ltd. (to present)
2020 Outside expert of Sustainability
Committee of NH Foods Ltd.
(to present)
2022 Corporate Vice President of Nissan
Financial Services Co., Ltd.

1977 Joined Nissei Sangyo Co., Ltd. (current
Hitachi High-Tech Corporation)2007 Executive Officer, General Manager,
Regional Branch Office for West Japan
Area and Kansai Branch Office ofHitachi High-Technologies
Corporation (current Hitachi HighTech Corporation)2010 President & CEO, Hitachi HighTechnologies America, Inc. (current
Hitachi High-Tech America, Inc.)
2014 Senior Vice President and Executive
Officer, General Manager ofCorporate Strategy Division of Hitachi
High-Technologies Corporation
2015 Representative Executive Officer,
President and Chief Executive Officer
and Director of Hitachi HighTechnologies Corporation
2021 Advisor of Hitachi High-Tech
Corporation
2022 External Director of Kurita Water
Industries Ltd. (to present)
2023 Outside Director, Astellas Pharma Inc.
(to present)

1987 Joined Investment Banking Division of
Merrill Lynch & Co., Inc. in New York
2001 Managing Director, J-Eurus IR Co., Ltd.
2010 Director, Japan Corporate GovernanceNetwork (to present)2014 Member of the “Committee forStudying Scoring Criteria for SelectingEnterprises as Nadeshiko Brands”
operated by the Ministry of Economy,
Trade and Industry and the Tokyo
Stock Exchange. (From 2014 topresent, appointed to the committee
every fiscal year)
2015 Member of the Council of Experts
Concerning the Follow-up of Japan’s
Stewardship Code and Japan’s
Corporate Governance Code,Financial Services Agency and Tokyo
Stock (to present)
Representative Director, Japan Board
Review Co., Ltd. (to present)
2023 Vice Chairperson, J-Eurus IR Co., Ltd.
(to present)
External Director of Kurita Water
Industries Ltd. (to present)
External Member of the GovernanceCouncil, Ernst & Young ShinNihon LLC(to present)

1992 Joined Kurita Water Industries Ltd.
2018 Corporate Officer
Senior General Manager ofEngineering Group,Engineering Division
2022 Senior General Manager ofEngineering Group I,Engineering Division
2023 Executive General Manager ofEngineering Division (to present)
Executive Officer (to present)2015 Kurita Water Industries Ltd.
implemented partial businessacquisition of BK Giulini GmbH
Vice President & Business Director of
Kurita Europe APW GmbH2016 Integration of two German
subsidiaries into Kurita Europe GmbH
Vice President Business of Kurita
Europe GmbH2017 Senior Vice President Business of
Kurita Europe GmbH2018 Chief Operating Officer (COO) of
Kurita Europe GmbH2019 Chief Executive Officer (CEO) of Kurita
Europe GmbH (to present)
2023 Head of EMEA & Americas Region,
Regional Management Division of
Kurita Water Industries Ltd.
(to present)
Executive Officer of Kurita Water
Industries Ltd. (to present)* Please see the “Reason for election of Directors” section of our IR website for details.

86

Kurita Water Industries Ltd. Integrated Report 2023

Senior General Manager of
Solution Business Group,
Regional Management Division

Hisashi Tanabe

Eiji Yonese

Executive General Manager of
Sustainability Division

Head of Japan Region, Regional
Management Division

Makoto Mizuno

Eishi Shimmura

Executive General Manager of Digital
Strategy Division

Senior General Manager of West Japan
Region, Japan Region, Regional
Management Division and Head of
Osaka Office

Hiroyuki Suzuki
Executive General Manager of
Innovation Division

Seiji Ueda
Deputy Executive General Manager ofEngineering Division

Hiroyoshi Tamai
Senior General Manager of Field
Engineering Group, Engineering Division

Shingo Yamaga
Executive General Manager of Precision
Cleaning Division

Takehiro Nozue
Executive General Manager of Industrial& Social Infrastructure Division

Jiro Tanaka
Senior General Manager of Sales Group,
Industrial & Social Infrastructure Division

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

Keiko Tanaka

Director (External Director)
Chairperson of the Audit Committee
Member of the Nominating Committee

Masaya Kawai

Deputy Executive General Manager ofCorporate Control and Administration
Division

The Platform for Value Creation

Kenjiro Kobayashi

Norikazu Kachi

The Kurita Group’s Businesses

Joined Kurita Water Industries Ltd.
Corporate Officer
Director
Managing Director
Executive General Manager ofEngineering Division and Chief
Business Officer for Facilities Business
2021 Executive Senior Managing Director
and Representative Director
2022 Executive General Manager of Japan
Sales Business Division and Chief
Business Officer for
Chemical Operation
2023 President and Representative Director
Director (to present)
President and Representative
Executive Officer (to present)2016 Joined Kurita Water Industries Ltd.
2018 Corporate Officer
2021 Director (to present)
Executive General Manager ofCorporate Control and Administration
Division (to present)
2023 Managing Executive Officer(to present)

Kurita Group Business Strategy

Michiya Kadota

87

Financial & Corporate Information

11-Year Summary(Fiscal years ended March 31)(Millions of Yen)

When two item names appear, the left represents Japanese GAAP and the right represents IFRS.
Japanese GAAP

IFRS
2018

2019

2020

2021

2022

2023

Orders186,741

173,463

181,282

221,273

218,730

251,447

258,439

259,545

262,341

315,240

374,268

Net sales

180,143

178,137

189,398

214,372

214,187

236,815

257,331

264,807267,749

288,207344,608

Cost of sales

121,047

122,870

130,509

143,964

145,455

160,476

174,670

172,092

173,073

183,928

224,911Gross profit

59,09655,26758,88970,407

68,732

76,33882,661

92,715

94,676104,278

119,696

Selling, general and administrative expenses

38,10640,38039,45450,57449,28053,86356,994

66,06065,206

71,334

81,106

Operating income/Business profit*1

20,98914,886

19,435

19,833

19,452

22,47525,66726,65429,47032,944

38,589

Income before income taxes /Profit before tax

19,776

15,375

18,467

20,411

20,46525,535

20,267

26,691

29,15030,07930,151

Net income attributable to owners of parent /Profit attributable to owners of parent

11,476

9,352

10,434

12,577

14,506

17,897

12,05018,287

19,08818,471

20,134

Earnings per share/Basic earnings per share (Yen)

92.43

78.48

87.81

108.24125.23

159.37107.33162.86169.94164.38179.14

Capital expenditures (Property, plant and equipment)*2

6,108

5,268

8,489

18,8189,289

20,07040,00431,72932,64766,422

46,629Depreciation (Property, plant and equipment)*2

14,493

14,25014,37813,40913,24813,507

15,58815,804

17,90020,07925,796R&D expenses

4,362

4,534

4,397

5,269

5,038

5,258

5,490

5,693

5,317

5,386

6,344

263,580

274,925

294,492

298,107299,249

323,046

359,500

387,749

424,928

469,981

501,538

Total liabilities

54,462

55,772

71,014

69,14270,49082,193

120,315

143,640

167,090

192,119

205,778

Total net assets/Total equity

209,118

219,153

223,478

228,964

228,758

240,853

239,184

244,108

257,837

277,862

295,759

263,580

274,925

294,492

298,107299,249

323,046

359,500

387,749

424,928

469,981

501,538

Net cash provided by (used in) operating activities

27,276

29,66623,314

26,58233,941

21,40841,14337,37640,002

28,737

48,631

Net cash provided by (used in) investing activities

4,268(16,676)

4,746(33,172)(1,119)(15,928)(51,902)(43,683)(10,771)(39,929)(46,274)

Net cash provided by (used in) financing activities(18,561)(5,957)(13,929)(5,707)(10,154)(12,419)(13,453)

21,981(18,852)(7,927)

1,101

Cash and cash equivalents at end of period

33,31341,02855,67543,59165,43858,91735,54750,21562,22845,73050,468Operating income margin/Business profit margin

11.7%

8.4%

10.3%

9.3%

9.1%

9.5%

10.0%

10.1%

11.0%

11.4%

11.2%

Return on assets*3

4.3%

3.5%

3.7%

4.2%

4.9%

5.8%

3.5%

4.9%

4.7%

4.1%

4.1%

Return on equity*4

5.5%

4.4%

4.7%

5.6%

6.4%

7.7%

5.1%

7.6%

7.7%

7.0%

7.1%

Financial leverage*5

1.27

1.26

1.32

1.31

1.31

1.35

1.52

1.60

1.68

1.73

1.71

Total assets turnover (times)

0.67

0.66

0.67

0.72

0.72

0.76

0.74

0.71

0.66

0.64

0.71

Business Results

Financial Position
Total assets

Total liabilities and net assets/Total liabilities and equity
Cash flows

Management indicators*1 Business profit = Net sales–Cost of sales–Selling, general and administrative expenses*2 Including right-of-use assets*3 R
 eturn on assets (IFRS) = Profit attributable to owners of parent ÷ Total assets (Average) × 100
Return on assets (J-GAAP) = Net income attributable to owners of parent ÷ Total assets (Average) × 100*4 R
 eturn on equity (IFRS) = Profit attributable to owners of parent ÷ Equity attributable to owners of parent (Average) × 100
Return on equity (J-GAAP) = Net income attributable to owners of parent ÷ Shareholders’ equity (Average) × 100*5 F inancial leverage (IFRS) = Total liabilities and equity ÷ Equity attributable to owners of parent
Financial leverage (J-GAAP) =Total liabilities and equity ÷ (Equity + Accumulated other comprehensive income)88

Kurita Water Industries Ltd. Integrated Report 2023

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

2017

The Platform for Value Creation

2016

The Kurita Group’s Businesses

2015

Kurita Group Business Strategy

2014

Kurita Group Overview

2013

89

Financial & Corporate Information

Group Network

EMEA
Kurita Europe GmbH
Kurita UK Ltd.
Kurita France S.A.S.
Kurita Iberica SL
Kurita Turkey Kimya A.S.

Asia

Kurita Polska SP.z.o.o.

Kurita Water Industries (Dalian) Co., Ltd.

Kurita Italia S.r.l.

Kuritec (Shanghai) Co., Ltd.

Kurita AquaChemie FZE

Kurita Water Industries (Suzhou) Ltd.

Kurita AquaChemie Saudi Arabia Co.

Kurita Water Industries (Taixing) Co., Ltd.

Pentagon Technologies Ltd. (Ireland)

Kurita (Taiwan) Co., Ltd.

Arcade Engineering GmbHHansu Co., Ltd.

Arcade Industrie SAS

Hansu Technical Service Ltd.

Arcade Engineering AG

Kurita-GK Chemical Co., Ltd.
Kurita-GK Vietnam Co., Ltd.
P.T. Kurita Indonesia
Kurita (Singapore) Pte. Ltd.
Kurita Water (Malaysia) Sdn. Bhd.
Kurita R&D Asia Pte. Ltd.
Arcade Engineering (Asia) Pte. Ltd.

* Company names are current information as ofJuly 4, 2023.
Kurita Group Business Strategy

Kurita Sverige AB

Kurita Group Overview

Business
Water treatment facilities
Water treatment chemicals
Precision tool cleaning
Engineering cleaning
Soil and ground water
remediation
Other businesses

North & South America
Pentagon Technologies Group, Inc.
Kurita America, Inc.
Kurita Canada, Inc.
Keytech Water Management
Kurita Dominica, S.R.L.
Avista Technologies, Inc.
FractaJapan

Kurita do Brasil LTDA.

Hokkaido
The Kurita Group’s Businesses

Kurita Hokkaido Ltd.

EMEA

571

Chubu
Kurita Tokai Ltd.

Kansai
Kurita Kansai Ltd.

North &South
America

1,690

Number of employees
by region(As of March 2023)

7,784

Japan

3,876

Kurita Meiki Ltd.

Kuritec Service Co., Ltd.

TohokuNippon Fine Co., Ltd.

San-ei Industries

Miyoshi Industries Co., Ltd.

Co., Ltd.

Chugoku and Shikoku
Kurita Sanyo Ltd.

Kyushu
Asia

1,647

90

Kurita Water Industries Ltd. Integrated Report 2023

Kurita Kyusyu Ltd.
Aoi Industries Co., Ltd.

Kurita Water Industries Ltd.

Kurita Creation Co., Ltd.

Kurita Buil-Tech Co., Ltd.

Land Solution Inc.

Kurita BMS Co., Ltd.

Land Management Inc.

Kurita Kitakantou Co., Ltd.

Kurita Sogo Service Co., Ltd.

Kurita Kanto Ltd.

With Kurita Ltd.

Kurita Chemical Manufacturing Ltd.

Kurita Corporate Service LLC

Kurita Analysis Service Co. Ltd.

Fracta Japan Inc.

Kuritaz Co., Ltd.

Fracta Leap Inc.

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

Kanto

The Platform for Value Creation

Kurita Hokuriku Ltd.

91

Financial & Corporate Information

Stock Information

Corporate Data

(As of March 31, 2023)(As of March 31, 2023)

Prime Market of the Tokyo Stock Exchange

Company Name

Kurita Water Industries Ltd.

Stock Code6370

Established

July 13, 1949

Number of Authorized Shares:

531,000,000

Paid-in Capital¥13,450,751,434

Number of Shares Outstanding:

116,200,694 (Including 3,555,082 shares of treasury stock)

Number of Employees

7,784 (on a consolidated basis); 1,624 (parent company)

Trading Unit:

100

Head Office:Dividend Payment Record Dates

Year-end dividend: March 31/Interim dividend: September 30

Nakano Central Park East (General Reception on 10F), 10-1,
Nakano 4-chome, Nakano-ku, Tokyo 164-0001, Japan

Number of Shareholders:

20,691

Transfer Agent:

Sumitomo Mitsui Trust Bank, Ltd.

Ordinary General Meeting of Shareholders

June

Accounting Auditor:

Grant Thornton Taiyo LLC

Kurita Group Overview

Stock Exchange Listing:

Kurita Group Business Strategy

External Evaluation
Major Shareholders

Distribution of Shares by Shareholder Type
Number ofshares held

Name

The Master Trust Bank of Japan, Ltd.
(Trust Account)

Treasury Stock

Share (%)

16,569,200

14.25
6.14
5.14

Kurita Water Industries Ltd.

3,555,082

3.05

CACEIS BANK, LUXEMBOURG BRANCH/UCITS
CLIENTS ASSETS

2,544,796

2.19

MUFG Bank, Ltd.

2,056,131

1.76

STATE STREET BANK WEST CLIENT –TREATY 505234

1,970,629

1.69

STATE STREET BANK AND TRUST COMPANY
505025

1,777,998

STATE STREET BANK AND TRUST COMPANY
505253

1,570,419

BNP PARIBAS LUXEMBOURG/2S/JASDEC/FIM/
LUXEMBOURG FUNDS/UCITS ASSETS

1,514,700

Securities Firms
Foreigners

Number ofshares held

1.53
1.35
1.30

Distributionof Share (%)

Financial Institutions

37,648,537

32.4%

Securities Firms

1,742,739

1.5%

Other Japanese Firms

3,385,115

2.9%

Foreigners

60,348,529

51.9%

Individuals

9,520,692

8.2%

Treasury Stock

3,555,082

3.1%

116,200,694

100.0%Total

MSCI ACWI ESG Leaders Index
MSCI World ESG Leaders Index

Evaluation by ESG Rating Organization

78

80
60

72

46

48
44.3

40

50

52

2015

32.6

38.1

38.8

2016

2017

2018

2019

2020

2021

* For stock price range and trading volume, please refer to Stock Price Information in the IR section of the corporate website.

92

Others

43.8

43.5
40.0

Kurita Water Industries Ltd. Integrated Report 2023

2022

2023

Kurumin

ISS-ESG

Evaluation by Supplier Evaluation
Organization

20.0
2014

IR SiteDaiwa Investor
Relations Co., Ltd.
2022 Internet IR
Commendation Award

80.0
60.0

54
50.3

39.9

66

20
0

iSTOXX MUTB Japan
Platinum Career 150 Index

Nikko Investor
Relations Co., Ltd.
Fiscal 2022 All Japanese
Listed Companies’
Website Ranking
AAA Corporate Website(Overall Award)

BroadBand Security, Inc.
2022 Gomez IR Site
Ranking Silver Award0
EcoVadisEruboshi (3 stars)

Kurita has drafted an action plan based on Japan’s Act on the
Promotion of Female Participation and Career Advancement in the
Workplace and the Act on Advancement of Measures to Support
Raising Next-Generation Children. In recognition of initiatives
implemented in line with this plan to support employees raisingchildren and to promote the empowerment of women in theworkplace, Kurita has been accredited by the Ministry of Health, Labourand Welfare with the “Kurumin” and “Eruboshi” (3 stars) certification.

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

44

62
52.4

The MSCI Japan
Empowering Women Index (WIN)

100.0

Dividend (yen)Dividend Payout Ratio (%)

56.1

MSCI JapanESG Select Leaders Index* The inclusion of Kurita Water Industries Ltd. in any MSCI index, and the use of MSCI logos, trademarks, service marks or index names herein, do not constitute asponsorship, endorsement or promotion of Kurita Water Industries Ltd. by MSCI or any of its affiliates.
The MSCI indexes are the exclusive property of MSCI. MSCI and the MSCI index names and logos are trademarks or service marks of MSCI or its affiliates.

Dividends and Dividend Payout Ratio (Fiscal years ended March 31)
100

Sompo
Sustainability
Index

Other Japanese Firms

The Platform for Value Creation

7,146,257
5,979,883

Financial Institutions

Individuals

The Kurita Group’s Businesses

Custody Bank of Japan, Ltd. (Trust Account)
Nippon Life Insurance Company

Inclusion in ESG Indexes

93