Zeon Group

Integrated Report 2023

Contents
Management Foundation

02 Corporate Philosophy
03 Message from the Chairman
05 Message from the President
11 Topics
13 Financial and Non-financial Highlights
15 Company Profile
17 Business Overview

57 Sustainability Policy and Dissemination Activities
59 Initiatives Relating to Respect for Human Rights
61 Stakeholder Engagement
63 Environment
66 TCFD
69 Directors and Officers
71 GovernanceValue Creation Story

71 Corporate Governance
76 Risk management

19 Driving Value with Technologies
21 History of Value Creation
23 Value Creation Flow
25 Capital/Risk and Opportunity

Corporate Philosophy = Mission

Contributing to the preservation of
the Earth and the prosperity of the human race
In keeping with its name, derived from the Greek words “geo” (Earth) and “eon” (eternity),
Zeon will contribute to a “Sustainable Earth” and “Safe and Comfortable Life for People”
by providing original technologies, products, and services.

Data

77 Data for the Past 11 Years
79 Financial Data

Business Strategy

79 Consolidated Balance Sheets
80 Consolidated Statements of Income and27
35 Financial Strategy
37 Business Strategy

Medium-Term Business Plan

Consolidated Statements of Comprehensive Income

37 Message from the Director & Senior Corporate Officer

81 Consolidated Statements of Changes in Net Assets
82 Consolidated Statements of Cash Flows

Elastomers and Chemicals Business38 Message from the Director & Senior Corporate Officer
39
40
41
42
43
43
44

Specialty Business
Elastomers Business
Chemicals BusinessSpecialty Plastics BusinessSpecialty Components Business
Battery Materials Business
Carbon Nanotubes (CNT) BusinessSpecialty Materials Business

45 Research and Development
49 Intellectual Property Strategy
51 Human Resources Strategy

Sustainability Policy

Reporting scope

Based on our corporate philosophy of “contributing to theZeon Corporation and Zeon Group companies inside and outside Japan. Some data covers only Zeon Corporation.

sustainability at Zeon means achieving sustainable growth

The Integrated Report (this report) presents a wide range of information relating to Zeon’s business activities and ESG. The Sustainability Report (available only in PDF
format) contains detailed information about CSR-related initiatives. More detailed management information is available through our corporate website.

https://www.zeon.co.jp/en/company/
Basic information on Zeon Corporation andZeon Group

1

Zeon Group

SocietyZeon

preservation of the Earth and the prosperity of the human race”,

Zeon’s information disclosure

Company informationnt
meApril 2022 to March 2023 (includes some information after April 2023)

ocial issues = Sustainabl
e des to s
n
o
vel
uti
l
op
o
s
ns to social issu
o
i
t
er
u
l
es
So
①

 e will firmly maintain fairness and integrity inW
our activities to be a trustworthy company
	Each of us will think and act proactively fora better future

Reporting period

Sustainability of Society	We aspire to realize a “Sustainable Earth” and“Safe and Comfortable Life”

Furth

In compiling the Zeon Integrated Report 2023, we referenced the Guidance for Collaborative Value Creation issued by Japan’s Ministry of
Economy, Trade and Industry (METI), and also referenced the many suggestions that we had received from customers.
Plans, forecasts, etc. that are disclosed in this report have been drawn up based on the currently available information, and contain somedegree of risk and uncertainty.
Actual performance may vary from these plans, forecasts, etc. due to a variety of factors.

③

Editorial policy

IR materials

Sustainability materials

https://www.zeon.co.jp/en/ir/library/https://www.zeon.co.jp/en/csr/

Presentation material on the final results, Financial
Flash Reports, Fact Book

Sustainability Report, ESG Data, Corporate
Governance Report (Japanese version only)

together with society. To achieve this, we will provide products
and services that are valuable for solving global and social issues,build trust with our stakeholders through fairness and integrity
and have each one of us act proactively thinking how to create abetter future for the society and ourselves.

④② Pr o ﬁ t

F urt

h er proeﬁt = S u stain a bl

gro w

th

Sustainability of Zeon

Integrated Report 2023

2

Message from the Chairman
Since our founding, we have consistently offered world-classproducts created using our original technologies, based on our
corporate philosophy of “Contributing to the preservation of the
Earth and the prosperity of the human race.” Used by customers intheir manufacturing processes, our materials and technologies aretransformed into many different things found all around the worldthat support our way of life.
We are working toward our Vision for 2030, to be “A company thatlives up to societal expectations and the aspirations of employees.”
We are now in Phase 2 of STAGE30, our Medium-Term Business Plan
that we launched in 2021. As both climate change and global
instability increase in severity, the business environment is becoming
more uncertain and the pace of change more intense. To continue
meeting the expectations of society and achieving growth underthese conditions, it is vital that we use our strengths in originaltechnologies to create innovations that neither imitate others nor
can be imitated by others. The innovative materials and services wecreate through the power of chemistry can help solve some of themany social challenges that humankind is now facing. I also believethat we can achieve even greater impact by deepening ourconnections to society, through activities such as dialoguing withstakeholders and working together with academia.
Our name Zeon is derived from the Greek words for “geo” (Earth)and “eon” (eternity). Our name embodies the very concept ofsustainability, and befitting its meaning, we will continue to carefully
consider what we can do to help realize a “Sustainable Earth” and“Safe and Comfortable Life,” as defined in our Sustainability Policy.
September 2023
Kimiaki Tanaka
Chairman
Zeon Corporation

3

Zeon Group

Integrated Report 2023

4

Message from the President
Contributing to the preservation of the Earthand the prosperity of the human race through innovation,
together with the 4,000 employees of the Zeon GroupI joined Zeon Corporation in 1989 and was initially

The proximity of the management team and theassigned to the Research & Development Center as aworksites, and the close range of everything at Zeon,

researcher, but the start of my career was not smoothgives it a compactness that creates excellent

sailing. I had a lot of great peers and colleagues andresponsiveness while still having a good size. With that,loved conducting experiments in the lab, but I felt out of

the ability to leverage economies of scale is anotherstep with my team about what was expected of me andstrength of Zeon.

did not really show initiative. I even thought about
quitting my job.
The turning point for me came when I took advantage

Our corporate philosophy states that we willcontribute to the preservation of the Earth and theprosperity of the human race. Holding discussions withof an internal program that allowed employees to apply

the management team and employees in the process offor transfers, which was uncommon at the time but

creating our new Medium-Term Business Plan reaffirmed

offered by the Research & Development Center, where I

that this corporate philosophy is truly the reason for

was first assigned, and transferred to another lab. As aZeon’s existence. Now that I am leading Zeon Corporation

researcher, being able to choose the research I wanted

as president, our aspirations to contribute to the Earth’s

to do and focus on it wholeheartedly was elating and I

sustainability and safety and comfort in people’s lives that

felt like I had found my place. My second turning point

underpin our corporate philosophy have renewed weight

was when I transferred to the Tokuyama Plant. My work

for me. Altruistic thinking, involving oneself in activities

was hands-on as a technical staff. I did a lot of different

that directly help others, is as true for an individual as it isjobs with co-workers working on the manufacturing floor.

for a company, and I believe that acting with altruism will

Although the work was hard, I had a strong sense of howlead to happiness for everyone.

front-line research powered our worksites, andFor me, making contributions is about sparking

participating in manufacturing was uplifting. I also had

innovation. The mission of the president is to spark

great bosses and co-workers, which made my time there

innovation originating from Zeon, and the role of thea lot of fun. I truly believe that this time in my life led mepresident is to create the systems and company culture

to where I am today. My third turning point came when I

that spark innovation and to develop people who will

was involved in launching our optical film business, whichspark innovation. I will first set about doing this by

was a completely new business back then. I had been achanging stereotypes.

researcher, and suddenly being put in charge of a new

At the same time, I will always keep in mind that I am

business was daunting, but based on my experiences soonly one of approximately 4,000 employees of the Zeon

far at Zeon, I also had a hunch that it would beGroup and therefore what I can accomplish alone is small.

interesting. As it turns out, forming new businesses is

As president, I intend to think about what contributions

deeply satisfying. This was the first of many subsequent

I can make to the preservation of the Earth and the

projects I was involved in other business divisions,prosperity of the human race together with all employees.

where I experienced first-hand how Zeon creates
products that benefit the public at the front lines
together with customers.

Tetsuya Toyoshima
President and CEO
Zeon Corporation

5

Zeon Group

Tetsuya Toyoshima Born in Osaka Prefecture in 1963. Graduated with a master’s degreefrom the Interdisciplinary Graduate School of Science, Osaka City University, in March
1989, and joined Zeon Corporation in April of that year. Appointed General Manager of
the Precision Optics Laboratory in June 2009, General Manager of Product Technology ofSpecialty Plastics & Components in June 2011, Division Manager of Specialty Plastics &Components in January 2013, Corporate Officer and Division Manager of Specialty
Plastics & Components in June 2015, Director of Zeon Chemicals Incorporated in June
2017, Senior Corporate Officer and Research & Development Division Manager of the
Research & Development Center in June 2020, Director & Senior Corporate Officer andResearch & Development Division Manager of the Research & Development Center inJune 2022, and present position since June 2023.

Looking back now, I almost never spent more than
three years in the same workplace. After various
experiences working as a researcher, as factory staff, in
corporate divisions, and on overseas assignment, Zeon
had developed me into the ultimate generalist. Throughthese experiences, I’ve been able to work with people
from almost every plant, technical division, businessContributions =Spark innovation in society
Mission =Spark innovation originating from Zeon
Role =Create the systems and company culturethat spark innovation. Develop people
who will be the spark

division, and operating division at Zeon Corporation.

Integrated Report 2023

6

Message from the President

Zeon Group strengths in raw materials using C4 and C5 fractions, future issues,
and mitigation strategies

FY2022 performance and the Medium-Term Business Plan
—Focus on quantifying targets

The source of Zeon’s corporate value comes from raw

extract C4 and C5 fractions that we have developed overmaterials extracted from C4 and C5 fractions using

many years. For example, if we can extract C4 and C5

Overview of the Medium-Term Business Plan

proprietary technologies and the combination of

fractions from biomass resources that absorb carbon

conceptual frameworks for fully using extracted

dioxide through their own growth process, it will enable

components and byproducts, exemplified by ourdevelopment of carbon neutral materials and products.

comprehensive use of C5 fractions, and the technologies

We will take our strengths we have built up so far andto accomplish this.

deploy them for this new mission in society.

Medium-Term Business Plan: STAGE30
FY2021

FY2022

FY2023Phase 1

FY2024FY2025

FY2026FY2027

FY2028FY2029FY2030Phase 2Phase 3

The C4 and C5 fractions left over in the process of

How to reconfigure the mix of growth products andseparating gasoline and other useful substances from

commodified products in our business portfolio based on

naphtha are not commonly used as raw materials. If wethe business life cycle approach, and how to guidecan create valuable materials from them, being able toinnovative new products and businesses to a growth track,

create raw materials from C4 and C5 fractions gives us aare key points. It may sound like a platitude, but we in

Looking back at the management environment in fiscal

products that can contribute to the SDGs. I am confident

competitive advantage. This is our first strength. We havemanagement are expected to chart the course navigating

2022, the cost of fossil fuels and other goods surged, thethat delivering products and services that will help resolvea wide range of technologies that we have improved

these major challenges. There are other options aparteconomic environment deteriorated as a result, and thechallenges in society will lead to growth for Zeon, and thisupon to fully use these raw materials without waste. This

from creating a recycling system, such as changing the

yen experienced extreme depreciation. These and othergrowth will create more power at Zeon to resolve

is our second strength. Zeon has many other strengths as

business direction and carve-outs. We will pursue thesefactors made the last year one of incredible uncertainty

challenges in society.

well, but these two are what make the others possible.

after holding dialogue with our stakeholders and creating

not only for Zeon but for companies around the world.

That said, C4 and C5 fractions are derived from fossil

a sufficient level of mutual understanding.

Phase 4

Set targets for after four years in the first year of each phase.
Announce targets for FY2030 in FY2027.

In this situation, we paid close attention to market

The first phase of our plan, from fiscal 2021 to fiscal
2022, was positioned as our running start, where wefuels. As fossil fuel-derived raw materials are the target of

Furthermore, creating company systems and theinformation and implemented a pricing strategy andconsidered specific activities to achieve our fiscal 2030

increasing criticism in society, the sustainability of using

company culture to bring about innovation is also a major

supply chain management. While we achieved record-

targets, and we did not set specific medium-term target

C4 and C5 fractions as raw materials will be called into

challenge. The foundation for the conceptual frameworks

high sales, our operating profit and ROIC were negativevalues. Just because we did not have target values,

question. Going forward, our greatest challenge will be

for fully using extracted components and byproducts, as

year on year.

however, does not mean that we were satisfied with thealleviating the concerns that society has about fossil fuel-exemplified by our comprehensive use of C5 fractions, andStarting in fiscal 2023, we are entering the second ofderived raw materials while maintaining the competitive

the technologies to accomplish this that I just mentioned

four phases in STAGE30, our Medium-Term Business Plan

and as a result, we reduced our CO2 emissions byadvantage we have built.

is none other than a company culture that sparks

with the target year of fiscal 2030. The current second

approximately 11%, achieved an ROIC of 6.6% in our“chemical reactions” between people.

phase is vital to achieving our 2030 targets, and as such,

existing businesses, increased sales in new businesses byFacing this challenge, we aim to make our businessstatus quo. We pushed ahead with various initiatives,

we have created a plan that includes robust KPI

2.1 billion yen over fiscal 2019, recorded employee

portfolio to use raw materials that are recycled or derived

trying things, making connections, and making

management. In the current business environment,

engagement of 48%, and reached a 7% ratio of non-from non-fossil fuel sources. For example, Cyclo Olefinenhancements. I intend to nurture these principles in ourcompanies need to focus on expectations for SDG

Japanese employees and women executives.

Polymer (COP) is an attractive product that is a driver ofcompany culture. Making connections is especially key tocontributions and the future uncertainty. These two

Our target values for fiscal 2030 have not changed in

growth at Zeon, but it is made from fossil fuel-derived raw

developing new products and all kinds of technologies

factors have not changed since the first phase of thethe second phase of our plan. Nor have our three Group-materials. Manufacturing all COP from raw materials not

related to them. Making connections gives rise to ideas.

Medium-Term Business Plan and are only growing inwide strategies. What has changed from the first phase isderived from fossil fuels would increase costs if done

Specifically, through initiatives to accelerate research andimportance. In such an environment, our corporate

the addition of “‘Polish up’ the management base” as atoday. We are therefore driving creation of a loop wheredevelopment, including combining knowledge by sharing

philosophy and our vision for 2030 serve as our guiding

new, fourth Group-wide strategy. Building mutual trust

we recycle COP products and supplement only the

our internal technology assets and promoting open

compass that shows us the direction forward. Conversely,with stakeholders will be vital in order to accurately grasp

shortfall in yield with raw materials not derived from fossil

innovation (moving away from doing everythingin an era of fast-paced change and uncertainty, flexibly

and meet the expectations of society going forward. To

fuels—in other words, creation of a circular economy.

ourselves), we will continuously enhance our proprietaryadjusting our activities to achieve our targets is alsobuild this trust, our directors must have diverse skills andtechnologies and create new ones.

important. This is why we are quantifying our targets for

conduct decision-making with transparency. This could

each phase every four years. Along with this, we arealso be considered the mission that Prime Market-listeddeveloping two-year rolling plans to quickly course-

companies are expected to fulfill. Making the appropriate

correct based on the conditions at the time to ensure thatmanagement determinations will increase our ability to

we achieve our fiscal 2030 targets. Zeon has many

achieve our first three Group-wide strategies.

sustainable by switching specialty products in our

As we switch to using raw materials not derived fromfossil fuels, we can take advantage of technologies to

7

See P.27 for more information about Medium-Term Business Plan

Zeon GroupAt Zeon, we place value on three principles of conduct:

See P.45 for more information about Zeon’s R&D strategy

Integrated Report 2023

8

Message from the President

Financial strategy

Strategies and targets (KPIs) of the Medium-Term Business Plan
See P.27 for more information about Medium-Term Business Plan

Strategies

1

Promote a transformation of monozukuri(manufacturing) torealize carbon neutrality and a circular
economy“Polish up” existing
businesses

2“Explore” newbusinesses

34Work together tocreate “stages” to be
active on

New“Polish up” themanagement baseTargets for FY2026(compared to FY2019 levels)*Zeon Corporation’s Scope 1+2 emissions

Lost time
accidents:

Sales ratio of products that contributeto the SDGs* :040%

Net sales
indicator:

COP: 210
Batterymaterials: 590(FY2019 as 100)

ROIC forexisting
businesses:

9%

Engagement
survey item/

Engagement
survey item/

56%

55%

Employeeengagement:

Ratio offoreign-nationaland female
directors andofficers:

25%

Environment
maximizing
employee potential:

Ratio of outside directors
and officers:

Majority

Labor productivity
indicator
Consolidated
operating income
per person:

Net sales of
new business:

Externalcollaboration/
Customerthemes:

16 billion yen 10(FY2023–2026
cumulative total)

ZEON Healthy
Behavior
Indicator:

Paid leave
utilization
rate:

Ratio offemalemanagers:

Cross-shareholdings asratio of net
assets:Less than

65%

12%

materials. We plan to sell cross-shareholdings and use

communicating our financial strategy in detail, which is ainterest-bearing debt to raise the capital. Additionally,

50

first for Zeon. Presenting to our stakeholders how wewith the sale of cross-shareholdings, we aim to keep the(compared to FY2019 levels)*Zeon Corporation’s Scope 1+2
emissionsplan to implement fiscal control aimed at future growthratio of cross-shareholdings to net asset under 15% as ofand how much progress we are making toward it will2026. That is not our end goal, and we plan to drive thisincrease understanding for Zeon.

lower looking to 2030.

% reduction in
CO2 emissions*

11 million yen*tentative nameSo then, what specifically are we planning to do?

70%

15%

Sales ratio of products that
contribute to the SDGs*:*tentative namestakeholder returns to fortify our businesses and expand

investment plans, but we intend to maintain an optimum

ROIC for existing
businesses:

new businesses. From fiscal 2023 to 2026, we arelevel of 0.3 or lower.

cumulatively making investments worth approximately

50%
9%Net sales of new
business:+60 billion yen(compared to FY2019)

Employee engagement:

75%

Ratio of foreign-nationaland female directors andofficers:

30%

The roles of the Chairman and President are divided

introduced a stock compensation system linked to thehuman resources, and the President is responsible fortarget values in our Medium-Term Business Plan. These

creating and executing business policy. Our work spheres

targets include not only financial indicators but also ESG

are not completely separate, however. I plan to exchange

and other non-financial indicators. In addition, we are

opinions from various perspectives with the Chairman

appointing non-Japanese and women executives as wellwhile making decisions.

as increasing our ratio of outside executives to create a

The IR & SR office was established in fiscal 2021 underhighly diverse and independent executive team. At thethe Director & Senior Corporate Officer for Administration

general shareholders meeting in June 2023, we invited

to better engage in communication with shareholders

two outside women directors to join our Board. Theseand investors. The office makes it easier to deliver input

powerful allies bring with them skills that have beenfrom capital markets to our management team, andlacking at Zeon, and I look forward to them further

regular communication with market participants is alsoenhancing our sustainability management. We have also

robustly reflected in the second phase of our plan. Going

set the target of reducing cross-shareholdings to

forward, we will implement measures to achieve oureffectively use resources, which is one aspect of ourtargets and manage progress toward the quantified

management foundation. We need to bring in diverse

targets, and through this increase our ability to achieve

ways of thinking in order to sustainably maintain an

our fiscal 2030 target values.

on developing future management human resources.

Zeon Group

Our debt-to-equity ratio is expected to increase due toprocuring interest-bearing debt as part of our futureso that the Chairman is responsible for governance andset target ratios for women managers and will also focus

From the second phase, we are actively expanding our
new investments, research and development, andFirst, regarding executive compensation, we haveadvanced management foundation. We have therefore

929%

Ratio of reduction in CO2 emissions* :Starting from the second phase of our plan, we are

Targets for FY2030

This will allow us to keep our single-A rating, which will

220 billion yen, including 170 billion yen in new

minimize borrowing costs as we strive to increase ourinvestments and 50 billion yen in sustainment

corporate value in the medium- to long-term.

investments, as new investments in new businesses anddifferentiated products including COP and battery

See P.35 for more information about Zeon’s financial strategy

Sustainability initiatives and assessment of materiality
With our corporate philosophy of contributing to theinternal and external trends while incorporating input

Earth’s sustainability and safety and comfort in people’s

from our management team and internal feedback.

lives as our mission, we have conducted business

Creating an open assessment process internally andactivities to make these contributions through ourholding discussions are essential. Materiality

products and services created with proprietary

facilitates greater organic linkage of the activities intechnologies. Our corporate philosophy encompasses

our Medium-Term Business Plan and indicators, andthe concept of sustainability.

will become a major driver for achieving our 2030

We have established a Group-wide strategy under
our vision for 2030, which is to be “A company thattargets and further sustainability.
Innovation is key to fulfilling the expectations of

lives up to societal expectations and the aspirations ofsociety. We believe that the innovative materials andemployees.” We aim to achieve this vision by working

services created by the power of chemistry have thetoward the SDGs, in other words, throughability to resolve social challenges and fundamentally

sustainability management.

change the future of the planet and the human race.

We are currently clarifying materiality that serves as

It is people that will create this innovation.

the foundation of our sustainability management toInnovation is not sparked by only select geniuses. Allrealize sustainable growth for Zeon and society.

anyone needs is motivation, an idea, and to takeSpecifying materiality is like saying what the important

action to make innovation possible. Our HR strategy isissues are in your company. These are not set from theto get all employees to create “stages” that allow every

top down, but instead must be expressed in such a way

employee to demonstrate their talents. With employeethat everyone at Zeon can agree with them. We

motivation as the driver of innovation, we will act withlaunched a Group-wide cross-functional project to do

integrity and intention toward realizing sustainability

this in April 2023. We will assess materiality based onin society.

See P.27 for more information about Zeon’s Medium-Term Business Plan
See P.51 for more information about Zeon’s HR strategy
See P.71 for more information about Zeon’s corporate governanceIntegrated Report 2023

10

2022–2023 Topics

1 Carbon Neutrality

3 New Product Development

We have started a number of initiatives aimed at shifting our manufacturing to realize carbon neutrality and a circular economy.

1) Hollow particles

1) Energy conversion in plants in Japan
Himifutagami Plant
Purchased electric power:
100% renewable energy (from April 2022)
Tsuruga Plant
Purchased electric power:
100% renewable energy (from April 2022)
Tokuyama Plant
Purchased electric power:
100% renewable energy
Steam: Purchase of Renewable
Energy Certificates (from April 2022)

2) Major initiatives in communities

 articipating in the Blue Carbon Project of offset credits toPsupport preservation of the Oshima tidal flats (Shunan City)
and reduce CO2 emissions
Endorsed participation in a global project aiming to achievecarbon neutrality in an industrial area of Kawasaki City
Jointly proposing the “Basic Study on the Establishment ofAmmonia Supply Center at the Shunan Industrial Complex”
together with Idemitsu Kosan Co., Ltd., Tosoh Corporation,
and Tokuyama Corporation

2 Investment, Collaboration, and M&A

Kawasaki Plant
Purchasing of carbon neutral
LNG (from August 2022)

3) Internal carbon pricing program dopted an internal carbon pricing program in May 2022,
A
where CO2 emissions are converted into an expense at alevel we set and used as a guide in determining environment-related investments4) S elected for NEDO Green Innovation
Fund Projects

 evelopment of manufacturing technology using carbon
D
recycling for commodity chemicals used in synthetic rubber
Development of photonic chips for higher performance,energy-saving non-volatile memory
MATSURI Project aimed at building an industry based on
direct use of CO2 through algae photosynthesis
Investees/collaboration partners

Acquirees

3 features
1 Shape retention: The polymer itself is heat resistant, pres-sure resistant, and solvent resistant, enabling retention of
its hollow shape even under various molding techniques
and in thermosetting resin
2 Small particles with sharp particle size distribution: The
particle diameter of 2–20 micrometers can be controlled.
Sharp particle size distribution
3 Low density: Hollow layer with porosity of 60–80% can becontrolled. The shell is resin, giving it lower density thaninorganic materials

2) Highly reliable multi-material adhesive

The highly reliable multi-material adhesive we have developed
can bond dissimilar materials together and readily peels off
with the addition of heat (making it easy to separate materials
for recycling). These properties make it an essential material
and technology for next-generation mobility.

5 features
1 Multi-material adhesion: Able to bond diverse materials anddissimilar materials
2 Water resistance: Low moisture absorption, not hydrolytic
3 Electrolytic corrosion resistance: Excellent insulation, lowabsorbency
4 Impact resistance: Excellent flexibility and elongation
5 Easy to disassemble: Excellent recyclability

Anticipated applications
Structural and semi-structural adhesive for mobility/motor
insulation film/high-frequency circuit board material

Anticipated applications
In addition to helping make various structural materials
lighter, applications are projected for ducts, hoses, building
materials, and other insulating and heat-retaining materials.
The hollow shape can be retained even in thermosetting resin,enabling additive resins to have reduced dielectric andreduced dielectric tangent. The material is anticipated to be
used in electronic circuit boards and millimeter wave radar
circuit boards, where low dielectric properties are required.

News ReleasesWe are accelerating efforts to create new business in four key areas as stated in our Medium-Term Business Plan: STAGE30.

We publish various news releases on our website.

CASE and MaaS

From news releases published between April 2022 and June 2023

 M BatteriesA
U.S.-based startup developing innovative electrode manufacturing processes for lithium-ion batteries

Healthcare and Life ScienceAurora Microplates, LLC
U.S.-based company that manufacturesand sells microplates made from Cyclo
Olefin Polymers (COP), which is used inbiochemical analysis
Edge Precision Manufacturing, Inc.
U.S.-based company that manufacturesand sells microfluidic device prototypes
for the healthcare and life sciences markets, with high resolution and high aspect ratio based on proprietary compression molding technology
Jiksak Bioengineering, Inc.
R&D startup aiming to create a world that can treat amyo-

11

Takaoka Plant
Purchased electric power:
100% renewable energy
Purchasing of carbon neutral
LNG (from April 2022)

We have developed newheat-resistant and pressure-resistant micro hollow
particles. The white particles have a particle diameter of 2–20 micrometersand porosity that can becontrolled 60–80%.

Zeon Group

trophic lateral sclerosis (ALS) and other intractable motor
neuron diseases

Telecommunications (5G/6G)

QunaSys Inc.
Startup engaged in software development for quantum
computersAidemy Inc.
Company listed in the Growth Market of the Tokyo Stock
Exchange that offers Aidemy Business, an e-learning service
for companies to develop DX human resources, and Modeloy,
a service supporting operations after AI system development

https://www.zeon.co.jp/en/news/

 stablishment of Sustainability Policy (July 1, 2022)
E
Expansion of production line for leaf alcohol at Mizushima Plant, completion ceremony held (July 22, 2022)
Removed clothing requirement from head office locations (October 12, 2022)
Completed construction of Integrated Production Center at Takaoka Plant (October18, 2022)
Decision to increase Hydrogenated Nitrile Rubber production capacity in the UnitedStates (November 30, 2022)
Received the nano tech 2023 Grand Award (February 7, 2023)
Zeon Corporation and Nagoya University receive two awards for development of
tough functionalized styrenic thermoplastic elastomers (May 12, 2023)

Energy Conservation

Visolis, Inc.
U.S.-based startup offering carbon-neutral materials using
proprietary approaches that combine biology and chemistry
and integrate the capabilities of eachIntegrated Report 2023

12

Financial and Non-financial Highlights
Consolidated net sales

Segment net sales (consolidated)(million yen)(million yen)

Specialty Materials Business

Other Businesses

450,000

450,000
400,000
350,000

Elastomers Business

361,730
337,499

321,966

388,61457,822350,000

301,961
300,000

250,000

250,000

200,000

200,000

150,000

150,000

100,000

100,000

50,00050,000

2018

2019

2020

2021

2022

0

(FY)

56,73385,142

198,0872018

53,473

46,97791,74995,465

178,847

161,626

2019

2020

106,791

200,566

65,270(million yen)

Consolidated operating incomeﾠ

50,000Consolidated operating margin (%)
20.0

40,00016.0

33,40833,14730,00011.1

26,104(million yen)

2021

2022

10,00030,0008.0

20,000

2018

2019

2020

2021

2022 (FY)

0.0

R&D expenses (consolidated)

10,0000

Other Businesses(million yen)

20,00040,00021,96015,000400,000

8,000

200,000

4,000

0

10,00012,283

18,623

10,184

2018

2019

2020

2021

2022

5,000

13

Zeon Group

2021

2022

2022

(FY)

2019

2020

2021

2022

Number of new hires (non-consolidated)

(No.)

(No.)

No. of employees (consolidated)

No. of employees (non-consolidated)

Recent graduates

250

(FY)

Mid-career hires

232

200

3,502

3,462

150

2,370

1,613

0

50

March
2018
2019

March
2019
2020

March
2020
2021

(No.)

March
2021
2022

Total no. of female managersﾠ

764
22,901
2,521
291

0

March
2022
2023

18

20

5,000

5,744

7,792

7,440

9,493

8,527

0

2018

2019

2020

2021

2022

20
8

15
15

10,596

10

3.6%

4.3%

4.5%

5.3%

5.7%

0

6

7.0

2018

41

27

2019

2020

2021

2022

(FY)

Employee engagement survey results
Employee engagement

48%

Environment for motivating employees

46%

Regular employment

78.2%

Non-regular employment

64.6%

Company-wide

74.2%

Share of male employees taking childcare leave

53%

4

2

5

(FY)

26

67
47

Wage disparities between male and female employees
1025

18,220

14

12

26

40

56

100

Human capital data for FY2022

Ratio of female managers (%)

32 Target for 2026
12%

30

95

100

1,642

1,600

(FY)

6,534

29,08819,645
2,047
47

2018

Number of employees (consolidated/non-consolidated)

34,04595

17,961* Performance of group companies is disclosed on their individual site reports.

35

3,236

0

(FY)

Ratio and number of female managers (non-consolidated)

10,111

10,000

2020

2021

3,000

Elastomers BusinessSpecialty Materials Business
Other Businesses
Group-wide (joint)

14,6402,303
17,965359
6,234

15,000

2019

2020

1,000

20,000

2018

2019

3,405

9,642

25,000

0

2018

4,000

2,381

17,691

30,00017,811* CO2 emissions of Himifutagami Plant and Tsuruga Plant, which had previously been
subsidiaries and were incorporated into Zeon Corporation in FY2021 have been added
to Zeon Corporation’s non-consolidated total for the year FY2019 onwards (because
the 2030 target is based on FY2019 and includes the above two plants). Due tochanges in the calculation method that have been made in FY2022, some of the pastemission volume recorded in last year’s report have been adjusted.

2,000

35,00014,25817,905

3,981

18,296

17,58015,86917,741

4,293

2,098
17,311

18,09816,00012,0002,156

Capital investment by business (consolidated)(million yen)

15,274

734,714600,000* Please note that the sum of the operating income of individual businesses may not
be the same as total consolidated operating income due to eliminations or not including the group-wide portion.

16,480778,992

2,107
4.0

0

Specialty Materials Business

26,36012.0

814,209

777,540

775,076

5,000

2,786

7.0

20,000

(FY)

2,318

16,1158.1

1,000,000

222,230

40,0009.8
20,000

Elastomers Business

50,00012.3
27,179(1,000 m3)

105,356

Segment operating income (consolidated)

44,432(t-CO2)800,000* Please note that the sum of the sales of individual businesses may not be the same as
total consolidated sales due to eliminations or not including the group-wide portion.

Consolidated operating income andconsolidated operating margin

Water resource usage (non-consolidated)

400,000

300,0000

CO2 emissions (Non-consolidated, Scope 1+2, estimation basedon the GHG Protocol standards)

March
2018
2019

March
2019
2020

March
2020
2021

March
2021
2022

March
2022
2023

March
2030
2026

0

Integrated Report 2023

14

Company Profile
Network in Japan

Name:

Zeon Corporation

Established:

April 12, 1950

Capital:24.211 billion yen (as of March 31, 2023)

Employees:

4,293 (consolidated),
2,370 (non-consolidated)(as of March 31, 2023)

Office/Plant

Manufacturing

Research

Sales/Others

1 Head office
GPI Plant (Mizushima Plant)

Listed on:

Tokyo Stock Exchange (Prime Market)

Businesssegments:

Elastomers Business, Specialty Materials Business,
Other Businesses

Head office:Group companies

Zeon Opto Bio Lab Co., Ltd.

Zeon Chemicals Yonezawa Co., Ltd.

Tokyo Zairyo Co., Ltd.

Zeon North Co., Ltd.

Zeon Kasei Co., Ltd.

For more details about Zeon’s businesses, please see P.37 “Business Strategy.”

4Shin Marunouchi Center Building, 1-6-2 Marunouchi,
Chiyoda-ku, Tokyo 100-8246, Japan

Researchlaboratories:

Research & Development Center

Offices:

Osaka Office, Nagoya OfficePlants:Takaoka Plant, Kawasaki Plant, Mizushima Plant,
Tokuyama Plant, Himifutagami Plant, Tsuruga Plant

Zeon F&B Co., Ltd.

3

Integrated Production Center (Takaoka Plant)

5

6

Zeon Yamaguchi Co., Ltd.

1
2

RIMTEC Corporation
Zeon Medical Inc.



2 Research & Development
Center/Kawasaki Plant

Synthetic rubbers, synthetic latexes,
battery materials

ZS Elastomers Co., Ltd.
Okayama Butadiene Co., Ltd.

Osaka Office

Nagoya Office

Tohpe Corporation

ZIS Information
Technology Co., Ltd.


Zeon Polymix Inc.

3 Takaoka Plant

Synthetic rubbers, electronics materials,
COP

Network outside Japan (Group companies)

Manufacturing

Research

6 Tokuyama Plant

Sales/Others

Tokyo Zairyo (U.S.A.) Inc.

Synthetic rubbers, synthetic latexes,
toner, CNT

Tokyo Zairyo Czech,s.r.o.

Synthetic rubbers, COP, chemicals,
specialty chemicals



4 Tsuruga Plant
Optical films



3 Himifutagami Plant
Optical films

Zeon Trading (Shanghai) Co., Ltd.

Zeon Polymix (Guangzhou) Co., Ltd.

Shanghai Zeon Co., Ltd.

Zeon Medical (Guangzhou) Inc.

Aurora Microplates, LLC

5 Mizushima Plant

Takehara Zeon (Shanghai) Co., Ltd.

Tokyo Zairyo (Guangzhou) Co., Ltd.

Zeon Kasei (Changshu) Co., Ltd.
Tokyo Zairyo (Shanghai) Co., Ltd.
Tokyo Zairyo (Tianjin) Co., Ltd.

Telene S.A.S.

Zeon Specialty Materials lnc.

8

Zeon Ventures lnc.

7
Tokyo Zairyo México, S.A. de C.V.



12 Zeon Chemicals Singapore
Pte. Ltd.

Zeon Korea Co., Ltd.

13

Zeon Advanced Polymix Co., Ltd.

Zeon Shinhwa Inc.

Tokyo Zairyo (Thailand) Co., Ltd.

11

Zeon CSC Corporation

Zeon India Private Limited

10
12Zeon Taiwan Co., Ltd.

Tokyo Zairyo (India) Pvt, Ltd.



8 Zeon Chemicals L.P.



10 Zeon Chemicals (Thailand)
Co. Ltd.

Zeon Research Vietnam Co., Ltd.



13 Zeon (Shanghai) Co., Ltd.

Tokyo Zairyo (Vietnam) LLC.

Zeon Asia Malaysia Sdn. Bhd.
PT. Tokyo Zairyo Indonesia

Zeon Groupde C.V.



10 Zeon Chemicals Asia Co. Ltd.

9

Zeon do Brasil Ltda15



7 Zeon Kasei México S.A.

Zeon Asia Pte. Ltd.
Tokyo Zairyo (Singapore) Pte. Ltd.



9 Zeon Europe GmbH

11 Zeon Manufacturing
Vietnam Co., Ltd.

Integrated Report 2023

16

Business Overview
Zeon’s main products are created from raw materials such as butadiene and isoprene, which are
extracted from the C4 and C5 fractions of naphtha using proprietary Zeon technologies.
Business segments are divided into the Elastomers Business, Specialty Materials Business, andOther Businesses.

C3 fractions Propylene

Main Products
Naphtha

C4 fractions

GPB
process

Butadiene

Synthetic rubbers
Synthetic latexes

Zeon’s proprietary
technology
Extracting highly purebutadiene fromC4 fractions

C5 fractions

GPI
process

Isoprene

Synthetic rubbers

General-purpose synthetic rubber is used
as a raw material for tires. Specialty synthetic rubbers are used for heat-resistant,oil-resistant rubber components that will
be in close proximity to an engine.

Synthetic latexes

Synthetic latexes are used for gloves(for sanitary and medical use), cosmetic
puffs, etc.

ChemicalsC5 petroleum resins and thermoplastic
elastomers are used as raw materials
for manufacturing adhesives andadhesive tape.

Synthetic rubbers
Thermoplastic elastomers

Piperylene

Petroleum resins

Dicyclopentadiene

Petroleum resins
Specialty plastics

Zeon’s proprietary
technology
Extracting isoprene andother highly-pure,useful components
from C5 fractions

Elastomers BusinessIn 1959, Zeon became the first company in Japan to mass-produce synthetic rubbers. Comprising
three individual businesses—Synthetic Rubber, Synthetic Latex and Chemicals—the Elastomers
Business is a solid core business that underpins Zeon’s activities.

C2 fractions Ethylene

Crude
oil

Product Applications

RIM compound
2-butyne

Synthetic aroma chemicals

Specialty Materials BusinessSpecialty materials are materials and components with high added value thanks to superior
macromolecular design and processing technology.
Specialty plastics (COP)

Specialty chemicals

Optical Films

Electronics materials

Cyclo Olefin Polymers (COP) areused as a material for making
optical lenses and medical
devices.

Film made from COP by extrusion is used
as a material in large-sized LCD displays
and in mobile device displays.

Product photos

Battery materials

Cathode binders, anode binders and functional layer materials for lithium-ion batteries, etc.

Synthetic fragrances are used in cosmetic/fragrance products, as well as for foodfragrances, etc. We also produce raw
materials for pharmaceuticals and agrochemicals, specialty solvents, etc.
Coating insulation materials, etching
agents and photoresists, etc., for use in
semiconductor manufacturing

Polymerized toner

Electro photographic toner for use with printers, fax machines,
digital copiers, and multifunction devices

Medical devices

Gastrointestinal medical equipment (catheters, stents, etc.) andcardiovascular medical equipment (FFR devices, IABP balloon
catheters, etc.)

Other Businesses
Synthetic rubbers

Synthetic latexes

Petroleum resins

Engineering, packaging materials, building materials, deodorants, RIM compounds, single-walledcarbon nanotubes, paints/coatings, trading, etc.
Carbon nanotubes

Cyclo Olefin Polymers (COP)

17

Zeon Group

Optical films

Carbon nanotube powder

Carbon nanotubes produced using theSuper Growth Method. R&D is undertaken
in relation to various types of applications
for carbon nanotubes, making effective
use of their special properties, which
include lightness and high strength aswell as extremely high levels of electricaland thermal conductivity.

Construction materials

Zeon SidingTM is a siding material for
external walls which is ideal for both
detached houses and apartments (newbuild or renovation). SandamTM soundinsulation board provides outstanding
soundproofing performance while also
making construction easier to complete.

Integrated Report 2023

18

Driving Value with Technologies
Since our founding, we have focused on creating unique technologies and deploying them inproduct development. We continue to create unique technologies while meeting the changing
needs of the times.

Optical Films

Vertical Integration of Resin and Processing Technologies
Our optical films are made possible by accumulation of

extrusion and various stretching technologies. This is how wehave made our broad, Group-wide expansion possible. Many

multiple technologies that we have independently developed.

are able to internally conduct all processes necessary to pro-outstanding products spanning hydrogenated nitrile rubber,First, our Research & Development Center designs theduce optical films, from raw material development to manufac-

well as GPI process used to extract isoprene monomer andCyclo Olefin Polymer, optical films, and lithium-ion battery bind-

Cyclo Olefin Polymer raw resin material. The Mizushima Plant

turing and processing. This business model enables us tomany other useful components from C5 fractions, we haveers represent the culmination of these unique technologies.

handles resin manufacturing technology, and the Himifutagami

quickly produce the resins that markets need, starting fromand Tsuruga plants process the resin into film using sheet

the resin design stage.

Based on monomer extraction technology such as GPB pro-

Our core technologies target business applications andcess used to extract highly pure butadiene monomer (rawmaterial of synthetic rubber) from C4 fractions of naphtha as

We will strive to increase the efficiency of our research anddeveloped core technologies including for monomer synthesis, polymerization, hydrogenation, and impurity reduction. We

development and create new technologies that enable us tohave also created various unique technologies in line with thecontinue offering timely new products that benefit society andongoing expansion of our business.

meet real needs.

Vertical integration of resin and film processing technologies
Examples of
product applications

Core technologies and products

Resin pellets

Specialty Materials Business
Coatable insulator
for OLED

Low-k materials

Cathode binders

IABP catheter
driving console

Synthetic latexes

Materials for OLED

Etching gas

Anode binders

Pressure sensor IABP

Thermoplastic elastomers

Polymerized toner

Binders for functional
layers

Bipolar rotating
hemostatic forceps

Sealants

Deflectable sheath for EP

Optical film

Petroleum resin
Plastics for optical / medical applications

ERCP device

Resin design

Research &Development Center

Resin manufacturing
Mizushima Plant

Mobile market

Processing

Optical Films

Himifutagami Plant/
Tsuruga Plant

Integrated production from resin development to processed products

New Value Contributing to Resource Savings and CO2 Emission Reductions
New recycling technology that we have developed is able

We are conducting initiatives aimed at new value creation fromreducing environmental impacts. One such initiative is estab-to create resin quality equivalent to virgin resin in terms oflishing recycling technology that makes it possible to reusetransparency, purity, and other properties.
helps reduce waste, it can also reduce CO2 emissions emitted

Plastic recycling is something we as a society must do to

Diagonal stretching

Surface processing

Biaxial stretching

Resin modification

Melt extrusion

Compounding

Cyclo-olefin polymer

Nanoparticle dispersion

Thin film coating

Fluorination

Metal reduction

Balloon forming

Organic synthesis

Compounding

Extrusion

reduce our impact on the environment. Creating the technol-

during manufacturing by around 12,000 tons a year.

ogy to satisfy the quality requirements of precision applica-(Plant currently under construction with completion scheduled in 2024)

tions such as optical components is an essential part of this.
Reusing film off-cuts

3 Reusing recycled resin in optical film manufacturing

Management Foundation

Compared with virgin resin, our recycled resin not only

off-cuts produced in film manufacturing.

Multilayer extrusion

TV market

Business Strategy

Elastomers Business
Synthetic rubbers

Value Creation Story

Wide-Ranging Business Development Based on Core, Basic, and Unique Technologies

Examples of Value Creation

Impurity reduction technology

1 Off-cuts produced in film manufacturing processes

Hydrogenation technology
Polymerization technology

Virgin resin manufacturing(Mizushima Plant, Okayama Prefecture)

Optical film manufacturing(Himifutagami Plant, Toyama Prefecture/
Tsuruga Plant, Fukui Prefecture)

Recycled resin manufacturing(Takaoka Plant, Toyama Prefecture)

Monomer synthesis technology
Monomer extraction technology

2 Recycled resin manufacturingfrom film off-cuts

Data

4 Recycled resin
film sales

Customers

19

Zeon Group

Integrated Report 2023

20

History of Value Creation

The detailed history of the Zeon Group can be viewed on the updated website.
https://www.zeon.co.jp/en/company/special/history/

Changes in social circumstances and needs

From the 2000s onwards, Zeon has pursued higher value for customers and brought chemical
products that provide greater functionality into the world. Today, thanks to its proprietary
technologies, Zeon has a number of businesses that control high shares of the global market, and iscontributing toward solving social and customer issues through its products and services.

1950–

1970–

2000–

2020–

This was the time of the rise of the petrochemical industry, whenpetrochemical complexes were established and quality and quantity of chemical materials were required for economic growth.

In response to the oil crises and the problem of pollution, chemicalmaterials that provide both efficiency and safety were demanded.

Higher functional chemical products are needed for the advancement of digitization and advanced information technology.

Entering an era of unprecedented demands to reduce environmental impact including carbon neutrality and circular economy.

Value Creation Story

In the 1950s, Zeon Corporation acquired technologies from B.F. Goodrich Chemical Company in the
U.S. and began manufacturing polyvinyl chloride and specialty synthetic rubber (NBR).
From the 1970s onwards, Zeon worked to develop original technologies, and generated a wide rangeof chemical products that used raw materials extracted through the GPB and GPI processes. As aresult, the company was able to expand into a wide range of business areas.

Business-related events
Zeon Group business results

Operating income (billion yen)

Net sales (billion yen)

1950s–1970s

500

400

300

1980s

 stablishment of a “third pillar of business”
E
to follow polyvinyl chloride resins andsynthetic rubber sought
Focused on the comprehensive, effective
utilization of C5 fractions, and undertook
research and market development with respect
to thermoplastic elastomer SIS, C5 hydrocarbon resin, synthetic fragrances, opticalplastics, and products formed using RIM
Advance into the processing field progresses

1990s verseas business development in the U.S.,O
Europe, Asia, and other regions accelerates
Launched new businesses,
including Cyclo Olefin
Polymer (COP) and binders
for lithium-ion rechargeable
batteries

1996	Safety Philosophy
establishedCompleted constructionof a COP plant

The GPB production facility at the Tokuyama Plant
100

Net sales (left scale)Operating income (right scale)

1970

1980

Net sales composition ratios in 1970
(non-consolidated)* Non-consolidated through 1976, consolidated from 1977

Others6%
Synthetic
rubber66%

Synthetic
resins34%

Synthetic
rubber62%

Synthetic
resins32%

Net sales composition ratios in 2000
(consolidated)
Others24%
Information,
environmentand health15%

Rubber42%

39.0

billion yen

Non-consolidated
sales:

129.4

billion yen

Consolidated
net sales:

2020s

50

 dopted working-from-home as normalA
practice for head office employees to help
prevent the spread of the COVID-19 pandemic
Began making a serious effort to realize adigital transformation (DX)40

2010	Formulated a CSR Policy and CSR Codeof Conduct2013	Acquired Tohpe Corporation through atender offer and made it a subsidiary of
Zeon Corporation30

2017	S-SBR business merges with Sumitomo Chemical,
ZS Elastomers Co., Ltd. established2019	Became a signatory to the United Nations Global Compact

202020 Support for TCFD announced
2021	Formulated a Declaration for Health and Productivity
Management and Code of Conduct for Well-being
2022	Began a shift to using new energy sources, with theaim of realizing carbon neutrality
10
Formulated a Sustainability Policy
Acquired Aurora Microplates
2023 Acquired Edge Precision Manufacturing, Inc.

2000

2010

2020

0

Net sales composition ratios in 2010
(consolidated)

Net sales composition ratios in 2022
(consolidated)

Others18%

Others16%

Specialty
Materials
Business18%

Elastomers
Business64%

Specialty
Materials
Business27%

billion yen

Consolidated
net sales:

Elastomers
Business57%

Latex8%

Chemicals11%
Non-consolidated
sales:

 usiness development in Asia reinforcedBBegan volume production of single-walledcarbon nanotubes
Strengthened BCP measures in the aftermathof the Great East Japan Earthquake of 20112000	Made Tokyo Zairyo Co., Ltd. a Zeon
Group company, and positioned it as acore trading company
2005	Introduction of production innovations
using the Daicel method
2006	Research & Development Center No. 10
Building completed. Substantial
improvements made in analysis
technologies

1990

Net sales composition ratios in 1990
(non-consolidated)

2010sManagement Foundation

1950

0

 evelopment of new manufacturing methD
ods for optical films. Focus on higher function materials and components
Introduction of
Daicel method
for production
innovations,which were
implemented
across all plants
Optical films

1989	
Specialty rubber business acquired from
B.F. Goodrich Chemical Company in the
U.S. Zeon becomes the world’s leadingmaker of specialty rubber

200

2000s

Business Strategy

1950	Establishment (start of polyvinyl chloridebusiness)
1959	Launch of synthetic rubber business (first inJapan)
1961 Listed on the Tokyo Stock Exchange
1965	Completed construction of a GPB plant.
Launch of butadiene production
1971	Completed construction of a GPI plant.
Launch of isoprene production, etc.

194.2

billion yen

Consolidated
net sales:

270.4

388.6

billion yen

Examples of technologies and products developed by Zeon
Prior to the 1960s

1990s

2000s

2010s

2020s

 Powder slush compounds (PSC) Balloon catheters Ventricular assist device NBR latex Single-walled carbon nanotubes formed using
the Super Growth Method Crystalline Cyclo Olefin Polymer (COP)

Nitrile rubber (NBR) VP latex Binder for lithium-ion batteries Hydrogenated nitrile rubber Zetpol®

 Cyclo Olefin Polymers (COP) ZEONEX®, ZEONOR®

 ZeonorFilm® optical film, which is made using
the sheet extrusion process, with sequential
biaxial film stretching method, and diagonallystretched retardation Solution-SBR ZEORORA® etching gas Alicyclic hydrocarbon resin Polymerized toner

1960s
Geon Process of Butadiene (GPB) Emulsion Polymerized Styrene-Butadiene
Rubber (E-SBR) Butadiene Rubber (BR)1970s
 Geon Process of Isoprene (GPI) Isoprene rubber Thermoplastic elastomer SIS Polymerized color toner Asymmetric SIS Cyclopentyl methyl ether, an ether solvent Microfluidic chip prototype provision service Technology for creating butadienefrom biomass SOLAR CARD®

 High thermal interface materials (TIM) Technology for creating isoprene from biomass Cycle Olefin Polymer (COP) recycling technology Fractional Flow Reserve (FFR) measurement device Technology for controlling lithium dendrites
using CNT

Data

1980s

Polyvinyl chloride (PVC) Synthetic aroma chemicals RIM products and compounds Electron beam resist Acrylic rubber C5 hydrocarbon resin

21

Zeon Group

Integrated Report 2023

22

Value Creation Flow
Taking the Medium-Term Business Plan (implementation of which began in FY2021) as thefoundation, the Zeon Group is contributing toward building a “Sustainable Earth” and a “Safe andComfortable Life for People” through the provision of unique, innovative technologies and services.

Being aware of social
issues and social change

Major trends* VUCA: Volatility, Uncertainty, Complexity and Ambiguity

Social issues
affecting thewhole world

Vision for 2030

VUCA*

24.2 billion yen
522.9 billion yen
339.3 billion yen

1. Promote a transformation of monozukuri to realize a carbon neutrality and circular economy
2. “Polish up” existing businesses“Explore” new businesses
Strengthen COP andbattery materials	Increase production
capacity	Improve resilience	Launch new products

Manufacturing capital	Strengthening production capacity
Within Japan

6 plants and 1 research center,and 18 group companies

Outside Japan	Risk diversification
	Improving safety(including sales companies)

Intellectual capital	R&D expenses:

17.6 billion yen

(FY2022)	Cooperation between research andproduction	Strategic acquisition and utilization of
intellectual property

Natural capital	Ensuring a stable supply of naphtha(an important raw material)	Reducing the amount of energy used in
production activities	Raise the efficiency of eachproduction line
Specialty Materials
	Bolster our competitive edge
by developing products andincreasing production capacity

3. Work together to create “stages” tobe active on	CASE and MaaS	Healthcare and life science	Providing products and services thatsociety cannot do without

Live up to the aspirations of employees	Telecommunications

	Take vigorous action with the steps“Let’s try first,” “Let’s connect,” and“Let’s polish up”

	Energy conservation

4. “Polish up” the management base

FY2022 Results—OUTPUTS	Net sales:	Operating income:

Zeon’s Strengths and Competitiveness1 	A high-level integrated use development model for C4 and C5
fractions, making use of Zeon’s unique technologies, including the GPB and GPI processes
2 	Thoroughly clean plastics manufacturing technology(specialty plastics)
3 	A comprehensive, integrated development and manufacturing capability that covers every stage from plastics material
design through to component manufacturing using Zeon’s
unique technology (optical film, life sciences business, etc.)
4 	Simulation technology that supports customer’s productdevelopment and evaluation activities (battery materials)

SDGs targeted by Zeon

388.6 billion yen
27.2 billion yen

Business Areas
Existing Businesses

Specialty Materials BusinessSpecialty plastics
Optical films
Specialty chemicals
Battery materials
Electronics materials
Toner
Medical devices

Elastomers Business	Synthetic rubbers
Synthetic latexes	Chemicals

New Businesses

Key Areas	CASE and MaaS	Healthcare and life science	Telecommunications (5G/6G)

Targets for 2030

50% reduction	CO2 emissions:

(non-consolidated, as compared to FY2019, Scope1+2
		Sales ratio of products that
contribute to the SDGs:
	Existing businesses:	New businesses:	Products that can contributetoward solving problems forsociety, including energy-saving
products, etc.

50%
ROIC 9.0%
Net sales+60.0 billion yen	Employee engagement:
75%(compared to FY2019)

	Ratio of foreign-nationaland female directors:

30%

Data

Social capital	Technology support for customers
	Collaboration with local communities

Elastomers
	Strengthen products having acompetitive edge

Focus on 4 key areas

	Continuing to contribute toa sustainable societyManagement Foundation

42 overseas group companies

Ensure the survival ofexisting SBUs

Live up to societal expectations

Business Strategy

Capital
Total assets
Net assets

Directions for 2030
(what we want to be)

Medium-Term Business Plan: STAGE30 —Group-wide Strategy(Group-wide, as of March 31, 2023)

Financial capital	Maintaining stable cash flow

Value Creation—OUTCOMES

Zeon’s Business Model —VALUE DRIVERS

4,293

HR development
	A human resources system thatencourages employees to challengethemselves

A company that lives up to societal expectations
and the aspirations of employees

Difficulty inforecasting the future,both for businessand for society as
a wholeManagement Resources—INPUTS
Human capital
Employees:

Contributing to the preservation of the Earthand the prosperity of the human race
Value Creation Story

SDGs

Corporate Philosophy = Mission

Core Values

Let’s try first

Let’s connect

Let’s polish up For more details about the Medium-Term Business Plan,
see P.27.

23

Zeon Group

Integrated Report 2023

24

Capital/Risk and Opportunity
CapitalRisk and Opportunity

to enhance existing businesses and identify new ones. During phase two of the plan, we will pursue a range of initiatives with athe external environment. The Medium-Term Business Plan: STAGE30 incorporates group-wide strategies, and we will promote

focus on human capital investment.

various initiatives based on the key policies.

Under the Medium-Term Business Plan: STAGE30, the Group is working to strengthen its manufacturing and intellectual capital

Employees(consolidated,
March 31, 2023)

4,293

Personnel
development

Manufacturing
capitalMaintaining stable cash flow
Capital24.2 billion yen

Total assets

522.9 billion yen

Net assets

339.3 billion yen

Strengthening production capacity
Within Japan

Outside Japan

6 plants and
1 research center
18 group
companies
42 overseas
group companies

Intellectual
capitalCooperation between research andproduction
Strategic acquisition and utilizationof intellectual property
FY2022R&D expenses

Natural capital

25

Zeon Group

Number ofpatents held

6,150

In Japan

2,431

Outside Japan

3,719

Ensuring a stable supply of naphtha(an important raw material)
Reducing the amount of energy usedin production activities

Technology support for customers
Collaboration with local
communities
CSR dialogue with suppliers

Under unified business, research, and IP strategies, we are acquiring and applying
IP to ensure the advantages of new products created from our technology
platform, which is based on our original technologies, in our expanding supply
chain. By pursuing such initiatives as a research structure to encourage
collaboration with production sites, a new cross-thematic research organization,and environments that facilitate collaboration with customers and external parties,
we are promoting the development of new ideas and technologies.

We see it as our mission to protect the environment, and are promoting thefollowing activities.

Promoting a circular economyInitiatives to reduce industrial waste from plastic products
Initiatives on water resources
Climate change initiatives
In addition to dialogue and collaboration with customers, suppliers, and local
communities, we are engaged in activities to educate the next generation, which
will be responsible for the future of chemistry in Japan. In response to growing
concerns that the young are losing interest in science, we are encouraging
children to be curious about chemistry by offering on-site lessons for elementary
school students (theme for 2022: generating electricity with small, everyday
energy sources) and by creating videos about experiments.

Key policies

Overview
To promote the shift to carbon-neutral manufacturing and realize a circular economy, we formulated our first Carbon Neutrality Master Plan andare promoting energy conversion at our domestic plants. In addition, we have launched various
initiatives, including the introduction of an internal carbon pricing system and adoption of
NEDO’s Green Innovation Fund project.
Furthermore, we will continue to promoteenergy conservation, process innovation, andenergy conversion, and prepare for the switch toalternative raw materials such as bio-basedmaterials. We also plan to lay the foundations forbuilding a circulation-oriented business modelthat employs recycling technology.

Strengthened
requirements andregulations forcarbon neutrality

Strategy 1(carbon neutrality)

Reduce Scope 1 and Scope 2
emissions looking ahead to 2030
Aim to contribute to reduce
Scope 3 emissions looking ahead
to 2050

Challenges to raw
materials
procurement

Strategy 1(circular economy)

Aim to contribute to reduce
Scope 3 emissions looking ahead
to 2050Complete preparations for theswitch to alternative raw
materials

Lay the foundations for building
a circulation-oriented
business model

Demands to prioritize
SDGs

Strategy 1 and 2

Achieve safe and stablemanufacturing and promotesustainable monozukuri(manufacturing)

Progress in automotive
CASE

Strategy 2

Widespread use of
5G/6G

Strategy 2Strengthen resources andmechanisms to spread CVC andM&A throughout the Group
Launch new products in newmarkets by connecting manufacturing, sales, and technology

Innovation in healthcare and life sciences
technology

Strategy 2

Progress in AI/MI

Strategy 2

We prioritize the four fields of CASE and MaaS,
healthcare and life sciences, telecommunications(5G/6G), and energy conservation, and promote
CVC activities in these fields in anticipation offurther growth. Moreover, we made two acquisitions in the health care and life sciences field, andpromoted external collaboration activities.
We will strengthen resources and mechanisms
to extend CVC and M&A, and launch new products
in new markets through connected manufacturing, sales, and technology. In addition, we willcontinue to expand external collaboration activities, seeking new businesses by effectively utilizing external knowledge and technologies.

Aging labor population

Strategy 3

Create a healthy and motivating
work environment

Limited humanresource availability
in Japan

Strategy 3

Changing attitudes
toward employment
and work

Strategy 3

Because the physical and mental health of ouremployees is a major management resource, wewill pursue management activities to promotehealth and create environments that enable
employees to engage in motivated work. To thisend, we will evolve our personnel system anddisseminate the diversity, inclusion, and belonging(DI&B) concept.

Progress in diversity

Strategy 3

Geopolitical risk

Strategy 2

Achieve safe and stablemanufacturing and promotesustainable monozukuri(manufacturing)

Global geopolitical risk continues to be high,including the situation in Ukraine. In this environment, we will strive to ensure stable raw
material procurement and reinforce our global
production system to mitigate threats to ourbusiness continuity.

Stable, safe manufacturing is our major mission
as a manufacturer. We will ensure this by reforming work styles, providing time for employee
education and improvement, and innovating ourmanufacturing. We will also offer the world many
new high value-added products that contribute to
SDGs and boost our profitability by enhancing
existing businesses. These efforts will promotesustainable manufacturing and, as a consequence, boost labor productivity (consolidated
operating income per employee).

Integrated Report 2023

Data

Social capital

17.6 billion yen

We will seek further competitive advantage through manufacturing that leverages
our strengths and proprietary technologies, and through collaboration withexternal parties as well as with customers.
High-degree multiple usage model for C4 and C5 produced by our proprietary GPB
and GPI methods

Extremely pure resin manufacturing technology (specialty plastics)One-stop development and manufacturing abilities, from raw resin design tomaterial manufacturing using proprietary technology (optical film, life sciencebusiness, etc.)
Technology to simulate customers’ development and evaluation (battery material)World’s first mass production facility for super-growth carbon nanotubes

Corresponding
strategies

Management Foundation

Risk diversification
Improving safety

We will pursue aggressive new investments and R&D in our differentiating products
and new businesses, to expand our existing and new businesses, while maintaining
stable funding and boosting shareholder return. To enhance capital efficiency andoptimize our capital structure, we will utilize funds from the sale of crossshareholdings and interest-bearing debt as sources of funds.

External environment(risk)

Business Strategy

We will introduce and upgrade a new personnel system to ensure that rotations ofhuman resources have clear objectives. The system will also include mechanisms
to encourage growth and career development, and build environments where
employees can demonstrate their individual potential.
Introduction of the new personnel system for senior employees
Reformation of the personnel system for managerial staff(managers and specialists)
Reformation of the personnel system for non-managerial staff (planned)

Personnel system that allows
employees to be themselves

Financial capital

To achieve sustainable growth, we are pursuing initiatives to develop diverse
personnel; those who can carry out future management and those who can maintainfrontline capabilities.
We believe personnel development is crucial to ensure sustainable growth. As such,
we are pursuing initiatives to develop diverse personnel to assume future
management responsibilities and maintain frontline capabilities. Monozukuri Training
Centers are part of the latter initiative. A center was established at the Mizushima
Plant in 2009 to enhance frontline capabilities at chemical plants, and is providing
technical training for frontline operators, with plans to add technical training for board
operators in 2024. Furthermore, we are preparing to introduce a virtual reality
simulator for use in skills training in a virtual setting in 2025. Meanwhile, preparations
are under way to open another manufacturing training center, at the Himifutagami
Plant in 2024, to provide training in film processing for optical films.

Value Creation Story

Human capital

The Group analyzes a broad range of risks, including the volatile business environment and appropriate long-term responses to26

Medium-Term Business Plan
Overview of the Medium-Term Business Plan: STAGE30

Medium-Term Business Plan: STAGE30

In 2021, we formulated “Vision for 2030” and created compa-

tioned the two years from FY2021 to FY2022 as Phase 1, andny-wide strategies to guide our actions concretely and help us

the four years from FY2023 to FY2026 as Phase 2, with theachieve that 10-year vision. We also set FY2030 targets corre-plan to renew every two years.

FY2021

Providing products and services thatsociety cannot do without

Take vigorous action with the steps“Let’s try first,” “Let’s connect,” and“Let’s polish up”

Phase 1 Key Policies

50% reduction(compared to FY2019 levels)

Zeon Corporation’s
Scope 1+2 emissions

Formulate a master plan forachieving carbon neutrality
looking toward the year 2050

FY2019 (base year)

Sales ratio of products that
contribute to the SDGs:“Polish up” existing businesses

50%
9%

2

 trengthen COP and battery
Smaterials

Phase 3Phase 4

tions. Toward that end we formulated Strategy 4—“Polish up”

were not set, clear progress was made in the two-year period.

the management base—an extension of Strategies 1, 2, and 3

In Phase 2, based on our Sustainability Policy establishedfrom Phase 1, and are disclosing our financial strategy as well.

in 2022, we set a focus on enhancing corporate governance

We have additionally set FY2026 targets correspondingand quantifying target values to further solidify our relation-

to the four corporate strategies and key policies to achieve

ship of trust with stakeholders and meet society’s expecta-

those targets.

FY2021

FY2022Phase 2

Key Policies

Reduce Scope 1 and Scope 2
emissions looking ahead to 2030–

11% reduction

Aim to contribute to reduce
Scope 3 emissions looking
ahead to 2050

Systemintroduction inprogress

Achieve safe and stablemanufacturing and promotesustainable monozukuri(manufacturing)

–

–

6.7%

9.7%

6.6%

0

Low

+2.1

“Polish up” existing businesses

Focus resources on key areas“Explore” new businesses+60 billion yen

billion yen(compared to FY2019)

3

27

New

Zeon Group“Polish up”
the management base

Employee engagement:

75%

Ratio of foreign-national andfemale directors:

30%

Providing a greater variety oflife choices

–

–

52%

0%

billion yen

48%

7%

“Explore” new businesses

Targets for FY2026

Ratio of reduction
in CO₂ emissions*: 29%* Zeon Corporation’s Scope 1+2 emissions

 ost time accidents: 0
L
Sales ratio of products that
contribute to the SDGs : 40%
Labor productivity indicator
Consolidated operating income
per person: 11 million yen

 et sales indicator
N
COP: 210
Battery materials: 590
ROIC for existing businesses: 9%Net sales of new business:
16 billion yen
External collaboration/
Customer themes 10

Create a healthy andmotivating work environment

 mployee engagement: 56%
E
Environment maximizing
employee potential: 55%
Zeon Healthy
Behavior Indicator: 65%
Paid leave utilization rate: 70%“Polish up” corporate
governance atio of foreign-nationalR
and female directors: 25%
Ratio of outside directors
and officers: Majority
Ratio of female managers: 12%
Cross-shareholdings as ratioof net assets: Less than 15%

Integrated Report 2023

Data

4

Work together to create“stages” to be active on

FY2030Although Phase 1 was positioned as a run-up and targets

 nsure the survival ofE
existing SBUs

Net sales of new
businesses:

FY2029Management Foundation

ROIC forexisting businesses:

0%

FY2028Business Strategy

Targets for FY2030

FY2027

Value Creation Story

1

FY2026

Looking back on Phase 1 and preparing Phase 2CO2 emissions:

Promote a transformation ofmonozukuri to realize a carbon
neutrality and circular economy

FY2025Phase 2

Living up to the Aspirations of Employees

Directions for 2030 (what we want to be)

Strategies

FY2024 et targets for after four years in the first yearSof each phaseAnnounce targets for FY2030 in FY2027

Vision for 2030

Continuing to contribute toa sustainable society

FY2023Phase 1

sponding to each strategy. To meet these targets, we posi-

Living up to Societal Expectations

FY202228

Medium-Term Business Plan

Strategy 1

Strategy 1

Phase 1 Achievements

In Phase 2, we will promote energy-saving, process innovation,

bio-butadiene to reduce emissions and meet Scope 3 targets,reach carbon neutrality by 2050. These targets cover Scope 1 and Scope 2 (non-consolidated) together.

and an energy shift to reduce Scope 1+2 emissions with a view

aiming to achieve carbon neutrality by 2050. The COP recy-

toward 2030.

cling plant is set to go into operation, beyond which we may

Ratio of reduction in
CO2 emissions comparedto FY2019 levels
Zeon Corporation’s
Scope 1+2 emissions

FY2019FY2022–%

Targets for FY2030

50% reduction

11% reduction(forecast)Target forRealizing the energy shift at five Zeon plants in Japan

Purchased electric power:
100% renewable energy

Purchased electric power:
100% renewable energy
Purchasing of carbon neutral LNG

Tsuruga Plant

Introduction of carbon neutral LNG

 ook into manufacturing of ethanol-derived butadiene,Lbio-butadiene, and bio-isoprene

77.8

81.4

77.9 69.0 ※

55.2

2019

2020

2021

2026

50% reduction

Purchased electric power: 100% renewable energy
Steam: Purchase of Renewable Energy CertificatesInternal carbon price
10,000 yen/t-CO2

Method of application
The increase or decrease in CO2 emissions accompanying thecapital investment project in question will be converted into amonetary amount using the internal carbon price, and thiswill be taken into account when making the decision as towhether or not to invest in the project.

Strategy 1 and Strategy 2

Phase 2 Initiatives

Related to both Strategies 1 and 2, we will invest a cumulative

We aim to bring into the world more high-value-added

total of 18 billion yen in human resources in Phase 2 (increas-

products that contribute to the SDGs and will promote sus-

ing labor costs), while simultaneously reforming work styles,

tainable monozukuri (manufacturing) by “polishing up” existing

securing time for training and improvement, and innovating

businesses to ensure profitability, which will in turn increase

production to achieve stable and safe production, which is alabor productivity (consolidated operating income per person).

prime mission as a manufacturer.

FY2026

Lost time accidents

Sales ratio of products that
contribute to the SDGs*

040%* to be updated appropriately

Key Policy

Labor productivity indicator Consolidated
operating income per person

11 million yen

Achieve safe and stable production and promote sustainable monozukuri (manufacturing)Achieve safe and stable production
Invest 18 billion yen* in human resources

Promote sustainable monozukuri(manufacturing)Promote sales ratio of products that contribute to the SDGs

* Increase in labor costs vs. FY2022 (cumulative total for FY2023-FY2026)

 eforming work styles, securing training and improvement
R
time, and promoting innovating production*

Data

MATSURI Project
The MATSURI Project is an initiative led by
the Chitose Group, which specializes in thelarge-scale cultivation and commercializationof algae, that aims to build a new algae-basedindustry through partnerships with numerous companies. The project aims to facilitate
zero carbon emissions by 2050, and Zeon is
working as a participating company using
microalgae as an energy source from sunlight and CO2 as a direct raw material forchemical products such as bioplastics andfunctional materials, and for the commercial
production of fuel, food, and feed. (Mar. 27,
2023 press release)2030* Calculation based on greenhouse gas protocol: 735,000 tons

Target for

Three projects were selected as Green Innovation Fund Projects by NEDO (New Energy and Industrial Technology
Development Organization).

 ook into expanding recycling efforts for other products inLaddition to COP recycling plant to be put into operation

Management Foundation

 cope of system application
S
Capital investment that will lead to an increase or decrease inCO2 emissions2022

Lay the foundation for building a recycling business model* Targets will be updated as necessary to achieve carbon neutrality by 2050.

38.9

Tokuyama Plant

R&D activity relating to carbon neutrality and the circular economy

Zeon GroupPrepare to change raw material

Compared to
FY2019 levels

Kawasaki Plant

 evelopment of photonic chips for higher
D
performance, energy-saving non-volatilememories
Zeon Corporation will utilize its carbon
nanotube (CNT) technologies to establish
CNT-based non-volatile memory (NRAM) thatcan replace volatile memory (DRAM). The
advantages are lower power consumption
and lower cost with higher capacity. The goal
is to commercialize NRAM in the 2030s. (Feb.
25, 2022 press release)

Aim to reduce and contribute Scope 3
emissions looking ahead to 2050

 romote energy savings, reform processes,P
convert energy source
Compared to
FY2019 levels

Adoption of internal carbon pricing

 evelopment of manufacturing technolD
ogy using carbon recycling for commodity chemicals used in synthetic rubberThis demonstration project aims to establish
two advanced technologies to produce
butadiene and isoprene, which are key
synthetic rubber chemicals, based on therecycling of carbon resources such as usedtires and biomass at high yield rates, and to
implement those technologies in society inthe 2030s. (Feb. 21, 2022 press release)

Reduce Scope 1 and Scope 2 emissions
looking ahead to 2030

29% reduction

Purchased electric power:
100% renewable energy* Electric power generated from renewable sources: Electricity derived from renewablesources such as hydroelectric power, solar power or wind power.

When it comes to reducing CO2 emissions, up until now, wehave implemented a series of measures that offered highcost-benefit performance. However, in order to achieve further
emissions reductions in the future, it will no longer be enoughto implement emissions reduction measures based on investment criteria, or on how long it will take to recoup the cost.
We are therefore adopting an internal carbon pricing (ICP)system, and for all capital investment projects we will be reflecting the amount of CO2 emissions reductions that the project canachieve in our investment decisions, aiming to promote capital
investment that contributes toward reducing CO2 emissions.

Aim to contribute to reduce Scope 3 emissions looking ahead to 2050

Energy conversion at domestic plants
Takaoka Plant(compared to FY2019 levels)

Reduce Scope 1 and Scope 2 emissions looking ahead to 2030

Key Policy

Himifutagami Plant

29%

Zeon Corporation’s Scope 1+2 emissions

Business Strategy

In April 2022, we shifted over to only using electric power
generated from renewable sources* for four of our production
facilities in Japan (specifically, the Takaoka Plant, Himifutagami
Plant , Tsuruga Plant and Tokuyama Plant). In addition, theTokuyama Plant purchased a Green Heat Certificate. Furthermore, carbon-neutral LNG has been adopted at the Takaoka
Plant from April and at the Kawasaki Plant from August. Throughthese initiatives, Zeon expects to achieve a company-wide
reduction in annual CO2 emissions of around 120,000 tons.
Other production facilities are also considering switching overto renewable energy. We are also examining the potential formaking a similar shift at our production locations outside Japan.

for building a recycling business model.

Ratio of reduction in CO2 emissions:

FY2026

Phase 1 summary

also expand recycling efforts elsewhere to lay the foundation

In addition, we will prepare to change raw materials,
switching to such materials as ethanol-derived butadiene andValue Creation Story

Concerning Strategy 1, in Phase 1 we formulated our initial Carbon Neutrality Master Plan and set reduction targets for 2030 to

Progress

29

Phase 2 Initiatives

Ensure profitability by polishing up existing businesses* The Daicel Method of production innovation

Improve labor productivity
Integrated Report 2023

30

Medium-Term Business Plan

Strategy 2“Polish up”
existing businesses

Strategy 2

Phase 1 Achievements“Polish up”
existing businesses

Phase 2 Initiatives

to strengthen our key businesses of specialty plastics (Cyclo

In Phase 2, we have further set net sales indicators as target values for COP and

ROIC of 9% in 2030. Although ROIC has declined temporarily

Olefin Polymers, COP) and battery materials, and also aggres-battery materials, our key businesses.

due to proactive investing, we expect ROIC to rise again as asively increased production capacity in the differentiated prod-

result of those investments.

uct lines we take pride in to ensure the survival of existingSpecifically, in Phase 1, we increased production capacity

SBUs.

We will expand sales of COP beyond optical applications to medical andother fields, and steadily increase sales of battery materials for electric vehicles.
To facilitate this, we will promote further business expansion investment plans.

Strengthen COP and battery materials

Ensure the survival of existing SBUs

Particularly with regard to specialty plastics and battery mate-

We have adopted a strategy of “Bolster our competitive edge

rials, two areas where there is steady high demand, we will be

by developing products and increasing production capacity,”

investing aggressively to strengthen productivity and resilience.

to ensure that existing SBUs survive and flourish.

Strengthening our production capability for specialty plastics

Increasing our production capacity for hydrogenatedMizushima Plant:	Production capacity increased by 4,600

nitrile rubber

tons per year (July 2021)

With a long-term plan to expand its use in lithium-ion batter-

Takaoka Plant:	Began work on construction of a recyclingies, we decided to increase production capacity by approxi-

COP

FY2026

Battery materials:
	Establishment of production system inEurope, Establishment of production
system in North America

FY2019 as 100

210   Battery materials 590

COP will grow steadily in the main applications of optical and medical,
and battery materials will steadily capture the growth of the global EV market
Trends in COP and battery materials * Trends in indicators when FY2019 is 100
COP market assumption and net sales indicator

Battery materials market assumption and net sales indicator

25% (due to begin operation in 2025).

300

700

Adding new production lines for optical film

250

mately 10% (began operation in 2023) and by an additional

tons per year (due to begin operation in
August 2024)
Strengthening our production capability for battery materials

We are positioning our original polymer design technology

It has been decided that a new production facility to manu-

and sheet extrusion method as key strengths. We have added

facture binder for lithium-ion batteries will be established bya new production line, which is the world’s largest retardation

Zeon Chemicals Asia Co., Ltd. (due to begin operation in 2024).

film production line (began operation in August 2023).

100

Increasing our leaf alcohol production capacity

50

Leaf alcohol is a material used to make synthetic fragrances

0that has a wide range of uses in products such as perfumes,
shampoos, and soft drinks. Increased production capacity by
400 tons per year (began operation in 2022).
COP recycling

Completed in August 2023
+50 million m2

 lanned launch ofP
operations in August 2024
+6,000 tons

(Takaoka Plant)

600

Net sales indicator arket assumption (number of EVs /indicator)
M

500
400

150

300
200
100

2019 2020 2021 2022 2023 2024 2025 2026

0

2019 2020 2021 2022 2023 2024 2025 2026

Source: Plastic pre-filled syringes: Knowledge Sourcing Intelligence GLOBAL PREFILLED SYRINGES MARKET – FORECASTS FROM 2021 TO 2026 / Smartphones camera modules: Techno
Systems Research Co., Ltd. Market Breakdown of Camera Phone – 1st Half 2022 & 2nd Half 2022 Forecast – / EV: LMC Global Light Vehicle Powertrain Forecast - Quarter 4, 2021

Our existing businesses are the Elastomers Business and thebusiness to make it even stronger, looking into structural

Specialty Materials Business.

reforms that focus on profitability and capital efficiency.

We will expand with a focus on our differentiated prod-

In the Specialty Materials Business, we will work to raiseucts—COP and battery materials—and aim to increase thethe ROIC for our existing businesses all together by increasing

percentage of sales of specialty materials.

sales of COP and battery materials.

At the same time, we will refine the elastomer materials

Zetpol hydrogenatednitrile rubber®

(Takaoka Plant)

Target forCompleted in 2023
+Approx. 10%

ROIC for existing businesses:

FY2026

9%

Management Foundation

Optical Films

200

Net sales indicator arket assumption (Shipment number of plastic
M
pre-filled syringes/indicator)
Market assumption (Shipment number of smartphone camera modules/indicator)

Business Strategy

facility with production capacity of 6,000(Tsuruga Plant)

Net sales indicator

Target for

COP:
Resilience enhancement study underway

Value Creation Story

By “polishing up” existing businesses, we aim to achieve an

Polish up business efficiency based on cost of capital and ROIC
COP

Leaf alcohol

Completed in July 2021
+4,600 tons

Completed in July 2022
+400 tons(Mizushima Plant)

Battery materials(Zeon Chemicals Asia)

100

Elastomers Business lanned launchPof operations inJanuary 2025
+Approx. 25%

50

Zeon GroupSpecialty Materials Business
Expand sales of COP andbattery materials

FY2022
FY2022031

FY2026

Polish up strong businesses toimprove profitability

Zetpol® hydrogenated nitrile rubber(Zeon Chemicals Texas Plant)

Bubble size: Net sales

5

FY2026
10

15

Data

Planned launch of operations in 2024

(Mizushima Plant)

Sales growth rate (%)

20

25

ROIC (%)

Integrated Report 2023

32

Medium-Term Business Plan

“Explore”
new businesses

Strategy 2

Phase 1 Achievements and Phase 2 Initiatives

Strategy 3

Phase 1 Achievements and Phase 2 Initiatives
ant, and we will continue to promote the initiatives in Phase 2 tomechanisms to spread CVC and M&A throughout the Group,2022 showed that Zeon’s employee engagement index stoodmake them a significant driving force for our growth.

tions (5G/6G), and energy-saving. We are aiming to increase

and increase external partnerships.

at just 48%.

our sales in these four areas by at least 60 billion yen by
FY2030 (compared to FY2019).
In Phase 1, we acquired two companies and promoted external collaborations in various fields, aiming for further growth.

Progress–

Compared to FY2019

Summary

CASE and MaaS

Healthcare andLife Science

The “stages” we aim to create are companies where all
employees can realize freedom and well-being and wherebringing about freedom and well-being, so we have set newgies for future product development, helping us to enter new

diverse individuals can demonstrate their strengths. Taking thisPhase 2 targets—the Zeon Healthy Behavior Indicator and paid

markets through linked manufacturing, sales, and technology.

approach, in Phase 1 we worked on improving systems and theleave utilization rate, and we will continue to monitor whether

environment to boost employee engagement and provide

the requisite environment is in place for these “stages.”

Target for FY2030

FY2022+2.1 billion yen +60 billion yen

 M BatteriesA
U.S.-based startup developing innovative electrode manufacturing processes for lithium-ion batteries

 urora Microplates, LLC
A
U.S.-based company that manufactures and sells
microplates made from Cyclo Olefin Polymers(COP), which is used in biochemical analysis

 unaSys Inc.
Q
Startup engaged in software development for quantum computers idemy Inc.
A
Company listed in the Growth Market of the Tokyo Stock Exchange that offers Aidemy Business, ane-learning service for companies to develop DX human resources, and Modeloy, a service supporting operations after AI system development
 isolis, Inc.
V
U.S.-based startup offering carbon-neutral materials using proprietary approaches that combine
biology and chemistry and integrate the capabilities of each+16 billion yen–%
0%

FY202248%
7%Targets for FY2030

ProgressEngagement survey item
Environment maximizing
employee potential

Zeon Healthy
Behavior Indicator

Paid leave
utilization rate

65%

70%

Ratio of foreign-nationaland female directors
Engagement survey item
Employee engagement

Targets for
FY2026

56%

55%

75%
30%

Create a healthy and motivating work environment

Key Policy

Advance health andOperate a personnel system that

productivity management initiatives

allows employees to be themselves

Strategy 4

Instill DI&B thinking

Phase 1 Achievements and Phase 2 Initiatives

The ratio of foreign-national & female directors & officers, ato enhance corporate governance, train diverse humantarget set in Strategy 3, has been set as a target correspond-

resources for future management positions, and refine capitaling to the newly formulated Strategy 4 as it relates to theefficiency. Our aim is to achieve a majority of outside directors

management base.

and officers, a 12% ratio of female managers, and less than

Additionally, to “polish up” the management base, we aim

Targets for
FY202615% cross-shareholdings as a ratio of net assets.

Ratio of foreign-nationaland female directors*

Ratio of outside
directors and officers** Directors and Audit & Supervisory
Board Members (inside and outside)*Directors or Audit & Supervisory
Board members

25%

Majority

Female manager ratio

12%

Cross-shareholdings asratio of net assets

Less than

15%“Polish up” corporate governance

External collaboration/Customer themes

10

FY2023–2026 cumulative total

Strengthen resources and mechanisms to spread CVC and M&A throughout the GroupLaunch new products in new markets by connecting manufacturing, sales, and technology

Enhancing corporate governance trengthening of interrelation between
S
officer remuneration and medium-term planSelection of highly diverse andindependent officers
Reduction of cross-shareholdings

Training diverse human resources for
future management positions
 peration of new personnel system
O
for managers
Promotion of training for managers andcandidates of manager
Recruitment of diverse career personnel“Polishing up” capital efficiency

Data

FY2026

Net sales of new businesses

FY2019

Employee engagement

Key Policy
Targets for

For more details, see P.51

tives to produce immediate results, so continuity will be import-

Management FoundationJiksak Bioengineering, Inc.
R&D startup aiming to create a world that can treat amyotrophic lateral sclerosis (ALS) and otherintractable motor neuron diseases

Energy Conservation

employees with more life choices. We don’t expect these initia-

Acquisitions

 dge Precision Manufacturing, Inc.
E
U.S.-based company that manufactures and sells
microfluidic device prototypes for the healthcare
and life sciences markets, with high resolution andhigh aspect ratio based on proprietary compression molding technology

Telecommunications(5G/6G)ing of our employees to be a crucial management resource for

These partnerships will generate knowledge and technolo-

Business Strategy

Investments/partners

Furthermore, we consider the mental and physical well-be-gies that will be utilized to great effect and bring about syner-

Increased new business sales by 2.1 billion yen, mainly in the Telecommunications area
Promoted external collaboration in each area, including acquisition of two companies in the Healthcare and Life Science area, to achieve further growth

Phase 1

Four Key Areas

FY2019Net sales of
new businesses

In Phase 2, we will continue to strengthen resources andValue Creation Story

The employee engagement survey that we conducted inhealthcare and life sciences, CASE and MaaS, Telecommunica-

In exploring new areas, we are focusing on four key areas:

 dvanced financial management toAsupport active business investment* FY2023 forecast Ratio of foreign-national and female directors and officers: 19% Ratio of outside directors and officers: 50% Introduction of performance-linked remuneration

33

Zeon Group

Integrated Report 2023

34

Financial Strategy
The Group will proactively pursue growth investments
to enhance corporate value over the medium to longterm while maintaining a sound financial position andremaining aware of the cost of capital.

Cash flow allocation (as of the announcement of the Phase 2 of Medium-Term Business Plan in June 2023)
Cash in
FY2026: Net asset ratio

Net sales

Operating income

510 billion yen 58 billion yen

Group ROIC

8%

ROE

10%

Cash flow fromoperatingactivities

Sale ofcross-shareholdings
Approx. 20 billion yen

80 billion yen
Interest bearing
debt financing
D/E ratio guideline
0.2–0.3

260

Yoshiyuki Sone
Director & Senior Corporate Officer
Administration

Cash flow frominvesting activities

220

R&D expenses

billion yen
Execute approx. 170
billion yen worth of
new investments

Percentage of sales

4%

Approx. 80 billion yen

Shareholder return4-year total
Approx. 38 billion yen

Dividend payout

billion yen

Value Creation Story

Less than 15%

Financial targets for FY2026

Cash out

ratio 30%

*Before deducting
R&D expenses* The difference between cash in and cash out is the increase or decrease in cash and deposits according to the expansion of the business.

societal expectations and the aspirations of our employees.


2 Pursuit of an optimal capital structure

our aims remain lofty. We want to enrich people’s lives in

Outlined in our Medium-Term Business Plan: STAGE30

Funding to support proactive investments and R&D will besociety and bring environmentally friendly products into thewhich began in FY2021, are three core values expressed ascovered primarily by operating cash flow from existing busi-

world based on a corporate philosophy of contributing to the“Let’s try first,” “Let’s connect,” and “Let’s polish up.” Follow-

nesses. Any shortfall we plan to cover by selling off

preservation of the Earth and the prosperity of the humaning this plan, we intend to engage in a range of reforms as

cross-shareholdings and taking on interest-bearing debt. In

race, combined with the R&D philosophy of developing

a new challenge for the Group as a whole.

addition to generating cash and improving capital efficiency,

In our financial strategy as well, announced in June

unique technologies that neither imitate others nor can be
imitated by others.
Our vision for 2030 is to be a company that lives up to

Medium-Term Business Plan: STAGE30

weighted average cost of capital (WACC), but we will control

linked to our business strategy outlined in STAGE30.

the D/E ratio, keeping it at 0.3 or lower. Overall, we will

The business environment had been unstable sinceporate value.

both elastomers and specialty materials, with steadily

Nevertheless, we launched our Medium-Term Business Plan:rising sales and profits. We worked to gradually reduce

STAGE30, and have been pursuing new initiatives to achieve
3 Shareholder returns

our interest-bearing debt, shifting away from a heavy reli-

our vision for the year 2030.

Concerning shareholder returns, we will actively pursue
increase dividends in conjunction with medium- to long-equity ratio, for example, an indicator of financial sound-388.6 billion yen amid sluggish demand due to a global

term profit growth. We plan to extend our consecutive

ness. The Group did not make large-scale investments

economic slowdown and global inflation. Consolidated

streak of annual dividend increases from FY2010 to FY2023,

owing to the ongoing challenges such as surging plant

operating income was down, however, by 17.3 billion yen

and we aim to maintain a dividend payout ratio of 30% orconstruction costs and a tough climate for expanding

from the previous year to 27.2 billion yen, due to the impact

higher (four-year cumulative average from FY2023 toinvestments with profitability. Furthermore, we prioritizedof soaring prices for raw materials and energy. As for our

FY2026) while working to steadily bump up dividend levels.

cash reserves to prepare for increased business risks asso-

financial position, the D/E ratio was 0.08 (up 0.02 from theciated with changes in the business landscape due to

end of the previous year), and the equity ratio was 64.3%

COVID-19 and other factors. Consequently, our financial(down 1.4 percentage points from the end of the previous

condition has become highly secure.

year), indicating continued stability.


1 Cash flow allocation(overview of fund procurement and use)

optimal capital structure, and shareholder return to pro-Over the four years of the Phase 2 (FY2023–2026), we

mote growth investments, as explained here. The aim is to

expect an operating cash flow of 260 billion yen (before

accelerate the generation of new value for differentiateddeducting R&D expenses), an investing cash flow of 220

products such as COP and battery materials and to develop

billion yen (including new investments of 170 billion yen),value through new businesses.

and R&D expenses of 80 billion yen. To strengthen and.

expand our businesses, we will promote aggressive growth

350 billion yen

Non-current liabilities

100 billion yen

339.3
226.2

(0.08)(23.6%)

Non-current
assets350 billion yen
Cross-shareholdings
as ratio of net assets

Less than

Net assets

400 billion yen
D/E ratio

Maintain at

0.3 or lower

15%

Sustainable Growth and Improvement of Corporate ValueTo achieve our 2030 vision of a 9% ROIC for existing busi-

initiatives and strategic returns through our corporate ven-nesses and meet our financial targets for FY2026, as ature capital (CVC) activities.

Group we need to strengthen and expand businesses that

Going forward, Zeon will continue to build financial

contribute to solutions for societal challenges and lead tosoundness while remaining cognizant of the cost of capital

the realization of global sustainability. To do this, we will

and work to improve our capital efficiency to achieve sus-

proactively leverage our technologies and products and thetainable growth and improve our corporate value. By soorganizational strength and talent we have cultivated todoing, we will fulfill the expectations of shareholders, inves-date. We will also actively pursue digital transformation (DX)tors, and all of our stakeholders.

Datafollowing policies on cash flow allocation, the pursuit of an

23

200 billion yen

Management Foundation

stable results and improved performance, aiming tosales were up 26.9 billion yen from the previous year to

In formulating the Phase 2 of STAGE30, we adopted the296.6

targeting medium- to long-term enhancement of our cor-position. We achieved financial stability, improving our

Phase 2 Initiatives

Current assets

time, we will pursue optimization of the capital structure,

FY2021, when COVID-19 infections were out of control.

Medium-Term Business Plan: STAGE30

Current liabilities

rating and maintain a sound financial position. At the same

Plan was initiated, we had solid business performance inIn the most recent fiscal year of 2022, consolidated net

Estimate for end of FY2026

160.6

maintain consistent financial discipline in light of our credit

Prior to 2020, before the current Medium-Term Businessance on interest-bearing debt to improve our financial

End of FY2022

we will leverage interest-bearing debt to reduce the2023, we are taking a fundamentally new approach that is

Looking Back at Phase 1

Optimal capital structure

Business Strategy

Noting that April 2023 marks 73 years in business for Zeon,

investments and R&D.

35

Zeon Group

Integrated Report 2023

36

Business Strategy
Message from the Director& Senior Corporate Officer
Specialty BusinessKazuyoshi Matsuura

Yuichiro Konishi

Director &Senior Corporate Officer

Director &Senior Corporate Officer

Value Creation Story

Message from the Director& Senior Corporate Officer
Elastomers andChemicals BusinessSpecialty Business Division Manager- Specialty Plastics

Elastomers andChemicals Business

The Specialty Business develops, manufactures, and sells mate-

To meet the robust demand for specialty chemical prod-synthetic rubbers domestically. Our elastomer materials, pri-movement in the near term, and we intend to strengthen our

rials and processed components with high-added value based

ucts, we are reviewing whether to increase our manufacturing

marily consisting of synthetic rubbers, have been a core Zeonbusiness fundamentals to weather these fluctuations in theon advanced materials design and processing technologies.

capacity for aroma chemicals and cyclopentanone (CPN), a

business ever since.

external environment, by focusing on capital efficiency andOur leading products are Cyclo Olefin Polymers (COP), opticalsolvent used in semiconductor manufacturing.

looking at structural reforms in every area.

films, specialty chemical products, and electronic materials.

We have supported the world’s automotive industry as one

Another key strategy of STAGE30 is new business exploration, where we are accelerating new product development,of the top global manufacturers of specialty synthetic rubbers.

Our battery materials are based on the polymer technolo-

Of these, we have designated COP, optical films, and spe-

Although this market is forecast to shrink as internal combus-

gies that we have built up in our elastomer materials businesscialty chemical products as core products under our strategy

tion engines, which use many types of specialty synthetic

combined with our core technologies including compoundingfor existing businesses in STAGE30, our Medium-term Busi-rubbers, get replaced by electric vehicles (EVs), new applica-

technologies and nanoparticle dispersion technology. This

ness Plan, and are driving business growth for these products.

tions for hydrogenated nitrile rubber are also being created,segment is seeing sharp growth with the widespread adoption

We are driving higher sales of COP in medical applications

nies of Aurora Microplates, a COP microplate manufacturer,

including use as lithium-ion battery (LiB) binders and timingof binders for LiB batteries. In our current Medium-Term Busi-and targeting higher market share in optical applications withand Edge Precision Manufacturing, a COP-based microfluidic

belts for electric motorcycles. Specialty synthetic rubbers will

ness Plan, we are executing large-scale investments for busi-

the release of new product grades. We will put a recycling

device manufacturer.

remain one of our core businesses where we will focus ourness expansion and focusing on developing our global supply

plant into operation and increase our COP production capacity

Looking at new materials, we are targeting expanded

product and service offerings.

structure, including establishing production bases in Europe,in 2024, and are further reviewing whether to establish a newsales for new high thermal interface materials (TIM). We also

the United States, and Asia.

production base due to the projected higher demand for COP.

plan to develop processed components using single-walled

As TV screens continue to grow larger, demand is increas-carbon nanotubes, where we have successfully establishedincluding potential M&A.
We are augmenting our business for medical evaluationand diagnostic devices, primarily through the acquired compa-

mass production.

ity with low water absorption. To meet this demand, we are

We aim to develop these products and the markets forplanning to expand sales by adding large film production line

them as part of achieving the targets set forth in our Medium

in October 2023, which manufactures some of the largest-Term Business Plan: STAGE30.

optical films in the world with widths of up to 2,500 mm.
22169
17691
9642
12283
18623222,230

Net sales(million yen)
250,000

Net sales(million yen)
20,00018,623

17,691

200,566

198,087
200,000

Specialty Materials Business

Operating income(million yen)

120,000

30,000106,791

85,142

15,000161,626

12,28391,74926,360105,356

95,46525,00080,000150,000

21,96020,000

16,115

10,184

9,642

10,000Operating income(million yen)

100,000

178,847

Management Foundation

ing for optical films made from COP that offer excellent stabil-

Elastomers BusinessBusiness Strategy

Raw materials and energy will continue to see strong priceIn 1959, we became the first company in Japan to produce

15,00040,00010,00020,000

5,000

Data

60,00018,296

17,311

100,000

5,000
50,000037

Zeon Group

2018

2019

2020

2021

2022

(FY)

0

2018

2019

2020

2021

2022

(FY)

0

2018

2019

2020

2021

2022

(FY)

0

2018

2019

2020

2021

2022

(FY)

Integrated Report 2023

38

Business Strategy

Individual Businesses—Issues and Plans

Chemicals Business

The Elastomers Business mainly handles specialty
synthetic rubbers used in the rubber parts foundaround vehicle engines, general-purpose synthetic
rubbers such as those used in tires, and synthetic
latexes such as those used in rubber gloves. We
offer a wide selection of product types and grades
to meet a diverse range of needs.

The Chemicals Business deploys products that
include petroleum resin and thermoplastic
elastomers, which are used as raw materials foradhesive tape, labels, and adhesives, as well as
polymerized toner, which is used in printers andmultifunction office copiers.

While needs for elastomer materials will not change, as cars	Future aspirations, issues, and initiatives

	Social issues and needs and Zeon products’
competitive advantages

Our elastomer materials are used in wide-ranging applica-

shift from internal combustion engines to EVs in the future,

As demand for necessities is growing and diversifying, there will

tions, including tires, rubber components found around vehi-

the quality of the elastomer materials that will be needed is

be greater calls to reduce energy and resource loss as well ascle engines (hoses, belts, packing, etc.), and rubber gloves,likely to change.

CO2 emissions. The Chemicals Business fully utilizes the C5 frac-that are indispensable in our lives today. Our products are

Meanwhile, the push for carbon neutrality is expected toabsolutely essential to the automotive industry, and stable

drive up needs for materials that contain lower levels of carbon

tomers, has focused on offering these products in markets for

supply is needed in the medium to long term.

and that are made from bio-materials, and needs to reduce CO2

adhesive tape, labels, disposable diapers, and fuel-efficient tires.

A source of our competitive advantage is the extensive

emissions in manufacturing processes and the supply chain

tions that we manufacture and, through dialogue with cus-	Future aspirations, issues, and initiatives

portfolio of products that we have created with our robust

as a whole. The push for the circular economy is also

product development capabilities fostered over many decades.

expected to drive up needs for more sustainable materials.

Our many original products that are unrivaled by others make it

Local production for local consumption is expected to gain

fuel-efficient tires will continue to grow. Combining our poly-

possible to offer materials that satisfy a wide variety of needs.

traction, in part to establish recycling systems and reduce CO2

mer design technologies and our know-how in adhesives withWe also have strengths that we can leverage from our global

emissions in transportation as well as to avoid geopolitical risks.

the properties of our original products, we will propose andsupply network and R&D organization as well as from our low-

Based on these conditions, we will focus on development

offer new products and services for our customers and supply

cost, stable procurement system made possible by manufactur-and production of new parts that contribute to carbon neutral-chain partners. These activities contribute to greater comfort

ing key raw materials using in-house processes.

ity and sustainability as well as establishing the supply struc-and convenience in people’s everyday lives.

proposing optimum distribution channels based on customer
plans, contributing to fuel-efficient tire compounding agents,and offering new materials that are gentle and friendly topeople. These initiatives contribute to realizing the SDGs.
We are practicing the concepts of “Let’s try first,” “Let’s connect,” and “Let’s polish up” emphasized in our Medium-TermBusiness Plan to meet customers’ detailed needs through ourroutine sales activities and technical services. We will continue
to develop our businesses while bringing in new technologies
and expertise from outside parties and associates, without
insisting on using our own existing technologies or facilities.

ture for them. The mission of our Elastomers Business is not

and processing for rubber products such as tires and hoses

only to supply the needed elastomer materials but also to

produce large amounts of CO2. The raw materials themselves

create new added value and provide it to markets.

Management Foundation

However, elastomer materials manufacturing processes

The markets for adhesive tape, labels, disposable diapers, andWe are also offering and proposing formulations of hot
melt adhesive materials with low energy and resource loss,

also contain large amounts of carbon. We view reducing theseamounts of carbon and CO2 as a social issue whose solutions
lead to carbon neutrality and sustainability.

Production and R&D Locations ofZeon’s Elastomers Business andChemicals Business
Production location

Japan

Asia
	Zeon Chemicals(Thailand) Co., Ltd.
Petroleum resins

Takaoka Plant	Zeon Advanced
Polymix Co., Ltd.

Specialty rubbers

R&D location

Rubber compounds

Mizushima Plant

	General-purpose
rubbers, thermoplastic
elastomers, andpetroleum resin

Kawasaki Plant

	Specialty rubbers
and latex

	Zeon Chemicals
Asia Co., Ltd.
Specialty rubbers

Americas
Shanghai Zeon Co., Ltd.

Rubber compounds	Takehara Zeon (Shanghai)Co., Ltd.

	Zeon Polymix (Guangzhou)Co., Ltd.
Rubber compounds

Zeon Chemicals Singapore Pte. Ltd.

Tokuyama Plant

	General-purpose rubbers,
specialty rubbers, and latex

39

Zeon Group

General-purpose rubbers

Zeon Polymix Inc.

Rubber compounds

	Zeon Chemicals L.P.
Kentucky Plant

Rubber compounds

Asia Technical Support Laboratory	Zeon Chemicals L.P.
Texas Plant
Specialty rubbers

Specialty rubbers

 eon Chemicals L.P.
Z
R&D CenterData esearch &R
Development
CenterBusiness Strategy

	Social issues and needs and Zeon products’
competitive advantages

Value Creation Story

Elastomers Business	Zeon Chemicals L.P.
Mississippi Plant
Specialty rubbers

Integrated Report 2023

40

Business Strategy

Individual Businesses—Issues and Plans

Specialty Plastics Business(Cyclo Olefin Polymers)

Resin sales

Optical applications
There are strong needs to increase the resolution and thinness of smartphone camera lenses, and we are developing
products to meet these needs. The market for medium- andlarge-sized lenses is expanding along with information technology and automation advances, including for vehicle-mounted lenses, security camera lenses, and VR lenses,
and there are more opportunities to use our mass-produced
plastic lenses. Zeon products are being increasingly used dueto their high transparency, high purity, and high moldability.

new products and implement a production strategy (i.e.,bases, cost reduction) leveraging our original molding technologies for films and molded products. We are currently estimating our cost competitiveness and our manufacturing capacity,
including quality, for general-purpose products.

Semiconductor applications
We are working to become the de facto standard for semiconductor manufacturing materials. To increase their adoption,
we need to promote the differentiation of our materials fromexisting materials and increase their recognition as materials
able to benefit the semiconductor market.

Healthcare applications
By meeting the growing market needs, we aim to become thede facto standard for pharmaceutical packaging.
We will promote the suitability of our COP in various biomedical therapeutics in the market and continue to offer
stable supply to further increase our market share. We plan todevelop applications for COP leveraging its properties, such as

the use of DNA analysis on the level of single cells. When single-cell analysis becomes the mainstream, large volumes ofchips will be used as high-precision cell separation devices.
While we are currently only manufacturing prototypes, wehave introduced automation technology and are developing
technology for mass production.

Specialty Components
Business (optical films)
Optical films that use Cyclo Olefin Polymer (COP) as
their raw material are found in large flat-screen TVs
and displays for many other devices such as
smartphones and tablets. Our sheet extrusion
process, a world-first film processing technology,
upended conventional wisdom with its highproductivity and reduced environmental impact.
With this manufacturing technology, we rapidly
established ourselves as a major player in the
optical film sector.

We will contribute to carbon neutrality and reducing CO2

applications and expansion for new non-display applications

growing for materials that have extremely high purity. Withemissions by using resin produced at our COP recycling plant

where we are exploring opportunities and to establish a busi-

and by optimizing our transportation systems for procured

ness structure that is not overly exposed to market fluctua-

materials and product shipments. These efforts are also

tions for specific applications.

their excellent low water absorption and low levels of impurities, we anticipate greater adoption of our products.

Healthcare applications
Biomedicines (protein-based therapeutics) are seeing marked
growth and demand expansion, and needs for stable packaging and containers that do not affect the pharmaceuticalagents are rising. Our COP precisely meets these needs with
its low protein adsorption and low leachability of impurities,
and is being increasingly used in pre-filled syringes and vials,
infusion bags, and testing devices.

	Future aspirations, issues, and initiatives
Optical applications
and we will continue meeting the changing market needs tobecome the de facto standard in the industry.
We are currently developing a new polymer that offers higher
optical performance and durability to meet customer needs.

Zeon Group

Development and sales ofmolded products
	Social issues and needs and Zeon products’
competitive advantages
Microplates
There are needs to speed up drug discovery and make it
more efficient (i.e., high throughput screening technology).
We are meeting these needs with the low fluorescence of
COP (ultra-low-fluorescent films under development), andwith stable supply of our original cell content coating agent

designed to mitigate the “logistics 2024 problem” in Japan,

We are currently addressing the following issues.

where a shortage of truck drivers is anticipated after drivers’– Expanding sales of wide-width products, using recycledworking hours are limited in 2024 when amended labor laws
go into effect in Japan.
The display applications that support our business foundation are shifting to larger LCD panels and wider-width polarizing
plate products. We are now seeing increasing needs for prod-– Increasing the sense of making social contributions andMicrofluidic chips

speed and efficiency of drug discovery.

tion, thin film, and advanced optical properties

that we have been working on, and will capture opportunities

tions by leveraging their low moisture absorption, high insula-lution and high aspect ratio to meet needs to increase thetation system optimization– Developing applications leveraging low moisture absorp– Creating new applications

by maintaining safe and stable operations.

ration more precise through microfluidic chips with high reso-

COP resin– Addressing the logistics 2024 problem through transpor-

ucts produced in our facilities for wide-width manufacturing(synthetic peptide), resin and film.

We are contributing to single-cell analysis by making cell sepa-	Future aspirations, issues, and initiatives

We will expand adoption of our COP resins in new applica-

personal growth among people involved in the businessthrough higher engagementtion, excellent mold release, low adsorption, and other

Data

Our polymers are already widely used as optical lens resin,

low auto-fluorescence and excellent barrier performance.

Management Foundation

The keys are to balance business expansion for existing display

Along with the miniaturization of semiconductors, needs are	Social issues and needs and Zeon products’
competitive advantages

Semiconductor applications

41

Drug discovery is shifting from observing the state of cells to

As a vertical integration strategy, we are planning to develop

Business Strategy

	Social issues and needs and Zeon products’
competitive advantages

Microfluidic chips

Microplates

Value Creation Story

The Cyclo Olefin Polymer (COP) that we
independently developed has outstanding opticalproperties and is used in optical applications suchas camera lenses and prisms as well as in thehealthcare and biotechnology sectors for its
transparency, excellent barrier performance andhigh purity. It is highly processable and able to beprecision molded, and therefore can be used in awide range of applications.

	Future aspirations, issues, and initiatives

properties. We will also engage in development to captureneeds in the areas of energy efficiency, non-PFAS, andadvanced ICT.

Integrated Report 2023

42

Business Strategy

Individual Businesses—Issues and Plans

Battery Materials BusinessSpecialty Materials BusinessIn the Battery Materials Business, we provide
anode binder and cathode binder for lithium-ion
batteries (LiB), as well as functional layer materials
and battery seal materials. While there has been
rapid growth in demand for applications relating toplug-in hybrid vehicles (PHVs) and other types ofEVs, we are also developing applications for PCs
and mobile devices, as well as for energy storage
systems (ESSs) for use with renewable energy.

Globally, we offer synthetic aroma chemicals
and specialty solvents made from C5 fraction
derivatives as well as products such as photo
resists, electron beam resists, and etching gasesin the electronic materials field that includes thesemiconductor market.

	Future aspirations, issues, and initiatives

Carbon Nanotubes (CNT) Business
Carbon nanotubes (CNT) are a material invented inJapan that are expected to have a wide range ofapplications, because of their light weight, highstrength, and good electrical and thermal conductivity.

Zeon Group

With the excellent properties they offer, adoption of CNT is
anticipated in many sectors, including energy and electronics.
Especially in recent years, its importance is being refocusedfrom a carbon-neutral perspective, and demand is expected to
grow. Zeon Corporation has created ZEONANO® carbon nanotube products, which are single-walled carbon nanotubes(SWCNT) produced using the Super Growth Method, an innovative method to synthesize SWCNT discovered by the
National Institute of Advanced Industrial Science and Technology (AIST) . ZEONANO® products offer several advantages,
including large surface area, length, and high purity.

	Future aspirations, issues, and initiatives

With our CNT-related products, we aim to improve the performance of IoT devices and make our world cleaner through ourenergy-related products.
We are combining SWCNT with various other materials todevelop materials and products with new properties. We havealready commercialized conductive silicon rubber for medicaluse, which integrates SWCNT with silicone rubber. We areproactively conducting joint research with a number of companies and research institutes. By making effective use of thehigh purity that characterizes our SWCNT, we are developing
hybrid materials such as clean, anti-static polytetrafluoroethylene (PTFE) and materials for use in electricity storage
devices, such as lithium-ion batteries. We are also developing
energy harvesting materials that leverage the large surface
area and length of our SWCNT.

We are focusing on developing new products and expanding
business for them. One example of this is expanding businessfor thermal interface material (TIM) using our elastomer technologies. Compared with conventional grease-based thermalinterface materials, our TIM products offer excellent thermal
conductivity in the Z axis, high durability, and superior workability. In addition to the high-performance server market, weare also working to develop the market for thermal interface
material solutions to address challenges from devices getting
smaller and higher-speed communications.
We will increase our production capacity to meet the growing demand and strengthen our initiatives aimed at realizing acircular economy and carbon neutrality.

In addition, we have started research to commercialize
non-volatile memory (NRAM) using CNT in a New Energy andIndustrial Technology Development Organization (NEDO)
project. We are aiming to establish NRAM as an alternative to
DRAM that offers low power consumption, higher capacity,and lower cost, with the goal of achieving social implementation in the 2030s. This will contribute to the development ofcarbon-neutral data centers as well as sustainability in society.
In recognition of these initiatives, we received the nanotech
2023 Grand Award at the 22nd International Nanotechnology
Exhibition and Conference (for more information, see P.48).
Besides manufacturing and selling SWCNT-related products, we are also working to ensure society’s acceptance ofcarbon nanotubes by evaluating product safety and biodegradability and disclosing this information.

Integrated Report 2023

Data

43

	Social issues and needs and Zeon products’
competitive advantages

It can be anticipated that synthetic aroma chemicals business will continue to see a steady increase in demand forfragrance and flavoring applications, accompanying the population and GDP growth in emerging economies. As a resultof increased global environmental awareness, specialty solvents used in chemical synthesis processes need to offer
lower environmental impacts.
We are contributing to this with our strong global brandderiving from our ability to provide a stable supply ofhigh-quality synthetic aroma chemicals, and our extensive
range of five-membered ring based solvents in the specialty
solvent segment.
In the electronic materials sector, we are offering productsthat leverage original Zeon polymer technology for the semiconductor market, where miniaturization will continue toadvance. Our ZEP series of positive electron beam resists wasdeveloped for use in next-generation electronic components.
The ZEP series’ main-chain scission type mechanism allows
holes to be cut with more precision, and because the reaction
is a simple one, there are few defects.

	Future aspirations, issues, and initiatives

Management Foundation

While the LiB market’s growth rate slowed in fiscal 2022 with thegovernment’s cessation of EV subsidies and economic slowdown
in China, the market is still expected to see high rates of growthin the future. We are accelerating our global business development to capture current demand in China as well as demand
from Europe and the United States, where development using
raw materials not procured from China is progressing.

	Social issues and needs and Zeon products’
competitive advantages

Business Strategy

As momentum in society builds for carbon neutrality, needs tofurther improve LiB performance will grow for EVs in mobility
applications and storage batteries in renewable energy applications. LiB manufacturers are pursuing development to realize fast charging and discharging, longer lifespans, higher
capacity, and high safety at low cost.
Our binder business enjoys advantages in polymer design
and mass-production technology cultivated over many years
as well as battery evaluation and analysis technology, which
we strengthened after LiBs began to appear on the market.
Using our battery prototype line, we are developing materials
that meet customer needs and proposing processes for them.
We are also working with customers, partner companies, universities, and other groups to create value together.

Product development: We offer an extensive product lineup
of our flagship water-based binders for anodes and heat-resistant separator layers, with the addition of differentiated new
products including those with excellent binding and low resistance. Using our experience and achievements in advancing
water-based processes, we are shifting existing solvent-based
technology to environmentally friendly water-based products,
including binders for lithium iron phosphate (LFP) cathodes
and AFL® materials for separator joining.
We are also pursuing other unique technology development apart from binders. Along with expanding our existingbinder business, we are focusing on business development for
new items and exploring related technology. Through U.S.based Zeon Ventures Inc., we are investing in startups with
next-generation battery materials and innovative technologies,
and increasing collaboration with companies that have strong
synergies with our businesses.
Global supply: LiB manufacturers are accelerating moves toshift to local production and consumption due to the impactsof geopolitical risks in battery material sourcing regions, transportation costs, and needs to reduce CO2 emissions duringtransportation. We are also planning to produce binders
locally in Europe and the United States, in addition to launching operations at Thailand-based Zeon Chemicals Asia Co.,
Ltd., scheduled for 2024.

Value Creation Story	Social issues and needs and Zeon products’
competitive advantages(Chemicals, Electronic Materials)

44

Research and Development

Aiming to Continue Creating
Innovative Products and Services

Masao Akasaka

Research & Development

In order to realize our corporate philosophy of “Contributing to the preservationof the Earth and the prosperity of the human race,” the R&D Headquarters mission is to provide, without interruption, innovative products and services thatmake a positive contribution toward a “Sustainable Earth” and a “Safe and Comfortable Life for People.” The R&D strategy that we are following to achieve thisgoal can be explained in terms of four aspects: Key R&D fields, organizational
structure, promotion methods, and effective utilization of human resources.

Working Hypotheses in Developing New Products
We use the Stage-Gate Method and the Quick-Start, Quick-organization focused on technology, and a cross-laboratory

Stop Model (create many new business seeds and discard

organization focused on markets, technologies, and chal-the ones that don’t work) for new product development.

lenges. In addition, to facilitate communication, we use

This process spans the conception stage, planning stage 1,

free-address office space. Furthermore, we are experi-planning stage 2, product design stage, and production

menting with co-creation to deepen ideas by making

preparation stage.

themes in the conception stage visible throughout thestage), we launched a dedicated business exploration
Stage-Gate Quick Start, Quick Stop Model
Cases

Ideation

Move tocommercialization
while winnowing
themesIncubation

Scaling

Elastomer Laboratory
Advanced Performance Materials Laboratory 1
Advanced Performance Materials Laboratory 2“Explore” new businesses

Transfer knowledge across organizations and search for products that leadto new businesses.

Precision Optics Laboratory

CNT Laboratory
Composite Material Laboratory“MONOZUKURI” Studio

Analytical Technology Laboratory

Mobility Studio

Production Technology Laboratory

45

Zeon Group

Production
preparation

Stage

Stage

Ideation

Motivation

Conception stage

Interesting, if achievable

Planning stage 1

Goal: customer takes notice ofour products

Incubation

Activity
Inductive reasoning experiment

Requirements toproceed to next stage
Proof of concept (POC)

Secure samples
Feasibility check

Submit to customer

Basic patent application

Planning stage 2

Goal: customer decides which
product(s) to use

Communicate with customers(product planning)

Product design
stage

Goal: satisfy all customer needs

Communicate with customers(product design)

Production
preparation stage

Goal: stable product supply

Determine products to be utilizedby customer
Determine schedule
Satisfy needs of all customers
Complete design guidelines

Scaling
Medical & Life Science Studio

R&DX

Manufactured Product Development Laboratory
Incubation Center

Product
designVerify process capability

Determine process capability

Verify cost

Ensure profitability

Data

Specialty Chemicals Laboratory

Support for R&D

Develop general-purpose materials tofacilitate product development; analyticaltechnologies; and information systems.

Carbon Neutral Laboratory

Polymerization Toner Laboratory

Cell Bioscience Laboratory

Planning

R&D system and collaboration structure
Organization to coordinate work proposed by researchers, concurrent with their current positions utilizing
a volunteer-based system

C5 Chemicals Laboratory

Specialty Plastics Laboratory

Conception

Management Foundation

New product development for existing businesses

In the incubation phase, prototypes are repeatedly produced
through to the ﬁnal product speciﬁcation.
At the scaling phase, intensive resource input facilitates rapid
commercialization.

In addition, by implementing these initiatives in a coordinated fashion, we will be taking on the challenge of realizing a digitaltransformation (DX) of R&D that allows us to control R&D processes in digital space. By transforming ourselves, we will continue
to be an organization that provides an unbroken stream of innovative new products and services in the future.

Research & Development CenterIn the ideation phase, generating many ideas is important.
Allowing investment at this stage to conduct customer surveys and experiments helps us determine speciﬁc needs andevaluate feasibility.

Business Strategy

1 Key R&D fields: We have identified Medical & Life Sciences, Mobility, Telecommunications, and the Circular Economy, as areas where
our Group can effectively exercise its strengths to help realize the SDGs.
2 Organizational Structure: In 2021–2022, we have established a number of horizontal, inter-departmental organizations that extend
over all of the units under the R&D Center, with the aim of generating new research topics in key fields. These new organizations haveresearchers from multiple different laboratories assigned to them concurrently with the researchers’ regular positions, working collaboratively to explore research topics in key R&D fields. Researchers from diverse backgrounds spur one another on to generate innovative new products and services through cross-departmental collaboration.
3 Promotion methods: The process by which a research topic progresses toward social implementation contains multiple steps, fromthe initial idea through prototype creation, proof of concept (POC) with the customer, to final implementation. By changing the management methods used at each stage flexibly, from giving researchers complete freedom to come up with initial ideas, through torigorous progress management after customer POC has been completed, we are able to ensure that good ideas are brought to social
implementation smoothly and efficiently.
4 Effective utilization of human resources: Organizations and frameworks are the measures through which the creation of originalvalue takes place, while the key element in actually creating value is people. To enable researchers to fulfill their potential in a self-directedmanner, we have increased the range of options available to help them achieve personal growth, for example through the provision of“double-track career paths,” and by recruiting members for horizontal, cross-departmental teams. We have also been working to invigorate intra-departmental communication through one-on-one interviews and services to share appreciation and praise.

R&D system and collaboration structure

management process.

As a measure to strengthen ideation (conception

Value Creation Story

Our Research & Development Center is responsible for undertaking the Zeon Group’s research anddevelopment activities. One aspect of our 2030 Vision is to “provide products and services
indispensable to society,” and to realize this goal, we are proceeding with R&D to “polish up existing
businesses” and “explore new businesses.”

R&D Planning/R&D Administration

Integrated Report 2023

46

Research and Development

Data Platform Structuring toward Technology Revolution

R&D Results

experiments (quantity), and 4 conducting high-quality

cross-laboratory organization. The Office conducts

experiments (quality).

activities to enhance R&D content, speed, and efficiency

Themes are generated from the market DB, customer DB,

through the power of digital technology. These activities

and in-house technology DB at the Product Planning Stage.

are carried out by volunteer researchers across multiple

During the design review (DR), which encompasses the Plan-laboratories who have proposed research themes to bening Stages, Product Design Stage, and the Production

pursued concurrently with their current positions. By

Preparation Stage, the generated themes are winnowed withbuilding, linking, and utilizing databases (DBs) ofreference to the business unit DB. During product design

various types, we are achieving results in terms ofand production preparation, we utilize DBs of accumulated

1 creating themes, 2 trimming themes, 3 concentrating

information relating to experiments and production.

Changing the Content, Speed, and Efficiency of R&D with the Power of Digital
1 Creating themes

nanotech 2023 Grand Award

2 Trimming themes

Zeon Corporation received the nano tech 2023 Grand Awardof the 22nd International Nanotechnology Exhibition & Conference, organized by the nano tech Executive Committee(Chairman: Tomoji Kawai, Visiting Professor, Institute of
Scientific and Industrial Research, Osaka University). This
was Zeon’s second Grand Award, after receiving one in 2017.
The nano tech Grand Award is given to exhibitors at nanotech in a number of fields whose products and technologies
are comprehensively outstanding in terms of being innovative and advanced.
Zeon exhibited a wide range of applications for
single-walled carbon nanotubes, including ZEONANO®

single-walled carbon nanotubes and next-generation battery
applications. This latest Grand Award recognizes our development of single-walled carbon nanotubes for a wide range ofcommercial applications. These include the development ofa system that uses thermoelectric conversion elements
incorporating our carbon nanotubes to instantaneously
detect defects in buildings and thermal piping, such as
during disasters, and send a wireless notification.
A test sample for this system was fabricated in the Osaka
district of Beppu City, Oita Prefecture, with verification
testing performed with a vibration machine.

Value Creation Story

The Digital R&D Promotion Office is a challenge-focused,

Product planning

Needs
hearing

CustomersearchSeeds
adaptation

Planning
DR

Production
preparation

DesignDR

Product
designProduction
DR

Business Strategy

Seeds to needs
idea POC

Commercialization,
production run

POCAchieving experimental success

3 Concentrating experiments (quantity)
4 Conducting high-quality experiments (quality)

Various DB structuring and impact at each stage

The system using thermoelectric conversion elements to instantaneously detect defects in buildings and thermal
piping, such as during disasters, and send a wireless notification
CNT thermoelectric element

High-sensitivity temperature measurement
Vibration-tolerant (flexible)

2 Trimming themes

Business division DB

ThermalenergyThermoelectric
conversion elements

Market DB

Customer DB

Production
facility DB

Raw material DB

Conversion toelectricity

Logistics DB

Electricpower

1 Creating themes

Product planning

Planning
DR

Production
preparation

DesignDR

Product
designProduction
DR

Thermal camera image
Vibration damper

Sensors/
communications

Management Foundation

Earthquake
energyDamage diagnosis
transmission

Commercialization,
production run

Internal technology DB

Achieving experimental success

3 Concentrating experiments (quantity)
4 Conducting high-quality experiments (quality)
Data

Experiment DB

Experimental
material DB

Experimental
equipment DB

Actual production
machine DB

Joint research with Tokyo University of Science andestablishment of a venture with the University
Verification test in Oita Prefecture

Address main challenge(s) by structuring, coordinating, and using each DB

47

Zeon Group

Integrated Report 2023

48

Intellectual Property Strategy
Intellectual Property Strategy

Protection and Utilization of Intellectual Property
Developing the IP mindset

We regard all intellectual property that emerges from our

Number of patents held

creating world-leading businesses through developing

Understanding that intellectual property is the key to strength-

investment in research and development to be important

As a result of these activities, we currently hold approxi-

unique technologies in the specific fields in which Zeonening our corporate competitiveness, we are promoting mea-

management resources. The protection and utilization ofmately 6,150 patents in 35 countries (as of March 31, 2023),

excels. One aspect of our 2030 Vision is to provide productssures to instill an IP mindset among all employees. Specifically,such intellectual property drive our business growth andplacing 16th among 763 companies in the rankings ofand services indispensable to society, and to achieve thisthat means conducting training related to intellectual prop-

the creation of new businesses.

chemical patent holders conducted by Japanese patentgoal, we carry out R&D to “polish up” existing businesses

erty, sharing information about intellectual property, andand explore new businesses. With the close integration of

In addition to filing for patents to acquire rights, weanalytics firm Patent Result, Co., Ltd. in fiscal 2021. We plan

introducing a system for the evaluation of IP activities. We also

are strengthening the protection of our intellectual prop-

to continue actively growing and strengthening our patent

our business, research, and IP strategies, we acquire andconduct surveys to discover new businesses and technologies

erty in the form of combined knowledge management,

portfolio, updating it regularly.

utilize intellectual property such as patents, design rights,

that people think can contribute to a sustainable society, as

especially for production methods and certain knowl-

and trademarks, aligning our expanding supply chain to

well as to enhance existing product values. The results areedge-based technologies that risk being copied upon

optimize the advantages of new products uniquely devel-

reported to management and lead to better formulations ofpublic disclosure. Additionally, we employ an open/close

oped through the proprietary Zeon technology platform.

business strategy.

strategy toward utilizing intellectual property and manage

And to strengthen our IP management, we have establishedtechnical information and contracts thoroughly.

a dedicated unit focused on IP landscapes, and are cultivat-

IP landscapes

ing the human resources needed to make effective use of a

In April 2021, a survey group was established within the Intel-

sures as appropriate to the situation, whether issuing an

range of IP-related tools that we aim to adopt and utilize

lectual Property Department to explore business opportunities

infringement notice or granting a license. Concerning coun-more widely.

using IP landscapes. It was renamed the IP Landscape Groupterfeit products in emerging markets, for example, we are(IPL Group) in February 2023 (see diagram below).

working with government authorities and e-commerce site

We have a strict view of rights infringement, taking mea-

The IPL Group uses patent analysis tools to efficiently andoperators to better monitor and crack down on counter-We develop new ideas and technologies through R&D for

exhaustively analyze big data patent information, accurately

feits. Also, to protect brand value, we manage our logos

which we obtain patents and design rights—intellectualand quickly identifying signs of shifting markets and demands,

appropriately within the company and implement brandproperty that allows us to maintain and build competitivesocial issues, and technological trends. These activities aim to

management to ensure that customers and society are notadvantages. We carry out strategic IP activities to create adevelop ideas that will lead to manufacturing that can makenegatively affected.

strong patent network based on growing our patent portfolio

an ongoing contribution to a sustainable world. With a busi-

and strategic insights gained from environmental analysis

ness opportunity exploration mission added to the IPL Group,

using market and competitive information.

the Intellectual Property Department is now able to work

Number of patents held

upstream on exploration, complementing downstream efforts(No.)

on new product development, thereby supporting both new

5,000

Administrative
Headquarters

Corporate
Sustainability
Headquarters

Research &Development
CenterR&D Planning
Department

Outside Japan

6,000

President

Laboratories

In Japan

7,000Management Foundation

product development and new business creation.
IP management structure

Business Strategy

Creation of intellectual property

Research &Development
Headquarters

Legal Affairs
Department“ZEON NEXT”
Exploration

Corporate
Communications

4,000

Production andEngineering Technology
Headquarters

Kawasaki
PlantIntellectual
Property
Department

Value Creation Story

Our basic R&D philosophy is to contribute to society by

Mizushima
Plant

3,000

Etc.

2,000

1,039

1,149

1,304

1,651

1,000

1,272

1,339

1,390

1,581

0

2014

2015

2016

2017

3,071

3,719

2,058

2,390

2,812

1,816

1,875

2,005

2,169

2,431

2018

2019

2020

2021

2022

(FY)

Patent Group 1
Data

Patent Group 2
Patent Group 3
Information GroupIPL Group
Planning & Management Group

49

Zeon Group

Integrated Report 2023

50

Human Resources Strategy
Work Together to Create “Stages” to Be Active On

Transforming Human Resources Management to Mobilize Individuals’ Strengths
and Promote Growth

Creating platforms for employee excellence together with employ-

The second phase of our Medium-Term Business Plan

grades based on roles. Strategy-based role design makes

a sense of freedom (having more choices in life) and achieve(FY2023–2026) focuses on enhancing corporate governanceclear to employees what the HR requirements and neces-well-being (having a fulfilling life with both good mental and physi-

and developing conditions that promote employee healthsary career background are, which supports their reskilling

cal health), they will feel empowered to demonstrate their diverseand motivation. Through this, we will realize our Group-wide

and career development. In terms of management andtalents at Zeon. We are taking a two-pronged approach to create

strategies of co-creating platforms for employee excellencebusiness strategy, the system provides visibility into wherethese platforms: 1) deepening diversity, inclusion, and belonging

and enhancing our management foundation. Key areas in

we have too many or too few of the needed resources. We(DI&B) and 2) increasing employee engagement.

our HR strategy include Health and Productivity Manage-

can also gain a better understanding of the best people toment, operating a new personnel system with greaterachieve the Medium-Term Business Plan and tools to build2022), we focused on developing favorable conditions and creat-

employee empowerment, establishing DI&B principles, andan HR portfolio. This will enable us to implement HR man-ing programs to offer employees a greater variety of options. Ourdeveloping diverse human resources to lead business in theagement linked to management strategy that clearly

actions included remodeling our head office, expanding remotefuture. We will continue taking results-focused actions todefines what types of human resources we need to recruit,

work, and introducing a cafeteria plan. In addition, the employee

achieve our FY2026 targets for the related KPIs.

develop, and reassign. This, in turn, contributes to busi-

In the first phase of our Medium-Term Business Plan (FY2021–

engagement survey that we have conducted since fiscal 2021 has

Director & Senior Corporate Officer
Administration

wide business strategy.

cooperative framework, and work processes. To address theseissues, we have set key performance indicators (KPIs) and are

Strategies

incorporating them into various strategies.

Phase 1 initiatives

3 Work together to create“stages” to be active on

Details

Conduct employee engagement surveys

Visualize internal issues, set KPIs
Expand survey scope to Group companies

Remodel Head Office

Include latest designs and facilities
Create conditions that prompt employees to offer creative ideas

Increase remote work

Support work styles that work with various lifestyles
Reduce commute times and support employees’ work and private life

Introduce cafeteria plan

Offer optional benefits for health, self-development, leisure, and more that fit
employees’ individual needs

4 “Polish up”

the management baseSenior employee personnel system, side-work program, expanded support for child andfamily caregiving, etc.

Target for 2026

 ngagement survey item
E
Employee engagement

Measures56%

 ngagement survey itemE
Environment maximizing employee
potential

55%

Zeon Healthy Behavior Indicator

65%

Paid leave utilization rate70%

 atio of foreign-national & femaleR
directors & officers
Ratio of female managers

25%
12%

Key policy

Create a healthy and motivating work
environment
 dvance health and productivityAmanagement initiatives
Operate a personnel system that allows
employees to be themselves
Instill DI&B thinking

Key policy“Polish up” corporate governance raining diverse human resources for futureTmanagement positions

Vision for “stages”

Employees

Management andbusiness strategy

Draw out individuals’ strengths and growth

Freedom, well-being/various measures

Managerial personnel system

Increasehuman capital
disclosure

Increase linkage withmanagement and business strategy

Management HR development/HR management measures
including recruitment, development, transfers, and organizational development linked with the management andbusiness strategy

Support for career development
Support for reskilling (reeducation)

Roles

Competency evaluations

Staff optimization

No time or place constraints
Work style reforms

Non-managerial
personnel system

Senior employee
personnel system

HR portfolio creation

Foundation
Strengthened engagement
New graduate hire and mid-career onboarding
Health and productivity management

51

Zeon Group

Deepened DI&B

1 	Promote atransformation ofmonozukuri to realize
carbon neutrality anda circular economy

2 	“Polish up”

existing businesses

Data

Strengthened harassment prevention

Achieve
Group-wide
strategyManagement Foundation

Introduce and revise various programs

launched in July 2023 began from a system that assigned

Business Strategy

Yoshiyuki Sone

ness management and achieving the goals of our Group-

The new managerial personnel system that werevealed issues in areas such as staff resourcing, our internal

Value Creation Storyees is one of our Group-wide strategies. When all employees have	“Explore”
new businesses

Integrated Report 2023

52

Human Resources Strategy

Advance Health and Productivity Management Initiatives

Operating a Personnel System that Allows Employees to Be Themselves“stages” together with employees where they can demonstrate

We updated our personnel system in July 2023 to create adiversifying. To foster employees’ motivation and create

realize our Vision for 2030, to be “a company that lives up to

their individual strengths.

job-specific evaluation system for managerial staff. In the“stages” that allow employees to demonstrate their individual

former system, grades and compensation were used as step-

strengths, we decided that we needed to transition to a per-societal expectations and the aspirations of employees.” Based

We will continue to promote health and productivity man-on our belief that “employees and their family members areagement initiatives with the aim of realizing freedom andping stones to managerial roles, based on the person’s ability

sonnel system that draws out employees’ diverse strengths

our company’s most indispensable asset,” the ultimate goal ofwell-being for all employees.

to perform their duties. More recently, however, the roles

and prompts their growth. This led to the revision of ourhealth and productivity management at Zeon is to create(i.e., duties) employees are expected to perform have been

managerial personnel system.

Introducing Zeon Healthy Behavior Indicator

Objectives of revising the managerial personnel system

In Phase 2 of STAGE30, our Medium-Term Business Plan, that

health indicators of a BMI within the standard range, engaging

We revised the system with the following three objectives.

This is designed to increase the transparency of performance

we launched in fiscal 2023, we created the Zeon Healthy

in routine exercise, and not smoking. Key points of this index

The first is to reward employees according to the demands ofevaluations, drive creation of results, and serve as a guide for

Behavior Indicator (Fig. 1) to set forth our health and productiv-

were making the self-assessment easy to complete and includ-

the role they are expected to perform by creating a multi-

long-term professional development.

ity management goals. This original index consists of the threeing healthy activities that anyone can do.

track personnel system. In addition to the management roles

Fig. 1 Zeon Healthy Behavior Indicator
Maintain goodnumbers

Engage in routine
exercise

Reduce risk of lifestylediseases*

Blood pressure
Blood glucose
Lipids* Cancer, heart disease,stroke, diabetes, and otherdiseases whose onset isrelated to lifestyle habits

Do not smoke

Promoting health and productivity management

Company vision

Target for 2026

Leading a healthy andactive life

65%+ of employees
achieve 2 or moreindicators(FY2022: 60%)

Fig. 2 Health and productivity management activity categories

The third objective is to increase career track visibility forcreated based on our existing roles, we introduced specialist

employees. By clarifying the requirements of each role,roles with grades set by evaluating job performance on an

employees have a clearer picture of their career paths andindividual basis. We also clearly defined the career paths andthe company can see where there are too many or too few of

set compensation according to the demands of the role.

the resources needed to achieve the management strategy.

The second objective is to encourage growth after pro-This information will be used in personnel management tomotion to a managerial role. We introduced conduct (compe-

encourage employee growth and determine what types oftency) evaluations that include specific items set forresources are most need to be recruited, developed, andindividual roles and are based on demonstrated conduct.

assigned to roles.

HR portfolio supporting the management and business strategy
As part of implementing the new managerial personnel

FY2024 and beyond. In this revision, we will identify issues inment activities into four main areas. We are implementing

system, we will also build an HR portfolio to support getting

work styles and career development through two-way dia-

the right people in the right positions to achieve our manage-

logue and review how to support opportunities for young

ment and business strategy. Clarifying the HR requirements

employees to independently develop their careers. We intro-

tied to each managerial role is designed to encourage theduced a job-based personnel system in advance when we

professional development of young and mid-level employees

established the personnel system for senior employees in

who want to advance to a managerial position as well as pres-FY2022, and we plan to revise the system in FY2024 to further

ent a clearer picture of available career paths. We are planningclarify the linkage between the new personnel system forto revise the personnel system for non-executive employees inmanagerial employees and careers at Zeon.

health and productivity management by promoting healthliteracy, which is the foundation for mental and physicalhealth, and enhancing our health and productivity organiza-

Line care training
Self-care training
Stress checks
Use of external EAPtion and the work and life support systems. (Fig. 2)
The Health and Productivity Management Conference

Zeon Healthy Behavior Indicator
Health support app
Health-related events
Health screenings
Specific health guidance

3 Health literacy improvement

comprising relevant staff from the Head Office and business

Health newsletter
Zeon health lecture series

locations, operates with the aim of having employees become
more familiar with our health and productivity management.

2 Physical health promotion

4 Strengthening health and productivity management
organization and the work and life support systems

Flow of reformation of the personnel system

Health and Productivity Management Conference Health management system
Cafeteria plan Support leave program GLTD program

FY2022

Initiatives to Create Employee-Friendly Workplaces
Improving the rate of taking
annual paid leave
We are working to raise the rate of
employees taking annual paid leaveto 70% by fiscal 2026. As part of this,such as by setting up days and periods of time where taking annual paid
leave is encouraged and creating
programs to enable taking leave in(%)

Reformation of the personnel system
for managerial employees(managers and specialists)

FY2024 onwards

Reformation of the personnel system fornon-managerial employees
Reformation of the new personnel system
for senior employees

Implementation of a framework for “providing a clear picture of the future in the case of personnel transfers”(identify individual strengths through career-focused meetings, etc.)

100

75

55.5

61.8

56.8

51.7

60.9

Implementation of a framework for promoting employee growth and career development(use in-house job posting system to expand opportunities for growth, etc.)

70.0

Data

we are making it easier to take leave,

Introduction of the new personnel system
for senior employees

Rate of taking annual paid leave and FY2026 target

FY2023

Management Foundation

We have categorized our health and productivity manage1 Mental health promotion

Business Strategy

Have a BMI within thestandard range

Value Creation Story

We are promoting health and productivity management to50

25

single-hour and half-day increments.
053

Zeon Group

2018

2019

2020

2021

2022

Target for 2026

(FY)

Integrated Report 2023

54

Human Resources Strategy

Human Resources
Division Manager

Training Diverse Human Resources for Future Management Positions
gender equality and steadily increasing the ratio of women(seven international principles promoting women’s economic

employees that play a central role in future management

empowerment) in March 2022, we found a need to offer

decision-making, we aim to continue hiring women each year

greater support for women’s career development due to a

to fill at least 30% of the roles for new graduate hires at thelack of women role models in management positions. We are

Head Office. Our workforce is growing from robust hiring

therefore reviewing the establishment of a mentor programlevels over the last several years, and we are focusing on

and a sponsor program to support women employees. We

onboarding and creating frameworks to retain these newplan to build a framework from these programs for discuss-employees and have them demonstrate their individual skills.

ing HR requirements and enabling objective evaluations, asThis includes providing support in their personal life,

well as have this process repeated regularly, with the goal of

in-house self-study opportunities, and support for building

creating successor development plans for diverse employeesinterpersonal networks, based on two-way communication.

Discussion Sessions to Create “Stages”
Together with Employees

Tomohiro Fukagata
Division Manager– Human Resources

Career plans

who will lead future management.
We are also actively hiring human resources that havediverse career backgrounds. In FY2022, we hired 232 mid-career employees and 100 new graduates to work in many

Details

Mentor
Program

Women managerial candidates are paired with awoman manager as their mentor, who serves as asounding board for concerns about management
roles, offers detailed career advancement advice,
and develops their management mindset

Sponsor
ProgramThis program helps employees develop amanagement perspective and network with the
management team by having them sit in on
Executive Committee meetings and othermeetings that management attends

quarters, the Elastomers and Chemicals Business Headquarters, the Specialty Business Headquarters, and the Digital
Transformation Promotion Division. We are also actively promoting these human resources to managerial roles to create
teams with diverse viewpoints. As a means of advancing

Employee

Fukagata

Instilling DI&B Thinking
We are promoting DI&B, with Belonging added to the principles of Diversity and Inclusion. We are conducting both topdown and bottom-up activities with the goal of mobilizing
everyone at Zeon have a sense of security and trust that theyWork-style reforms

are accepted (Belonging). Creating a culture of DI&B, where
everyone is glad they work at Zeon and feels like they have aplace to belong, is at its core the process of “creating ‘stages’

Employeein which all employees can demonstrate their individual
strengths” set forth in our Medium-Term Business Plan.

Support for mid-career hires Head Office tour and discussion

DI&B initiatives
Initiative

Details

Fukagata

We have seen a lot of positive feedback from employees about allowing them tochoose where they work and the hours they work, about how it increases their productivity and helps them balance taking care of children or other family members.
On the other hand, we’ve also heard from employees about wanting to improve theirskills while on parental and childcare leave and their concerns about promotions
being postponed.
I would like to further expand the options that are available to employees to better fit their needs, whether theywant to improve their skills while on parental or childcare leave or spend that time focusing solely on their children.
We are also looking at revising the requirements for promotion in the personnel system grades to no longer take
into account the number of years spent in a particular grade.

DI&B-related education

Unconscious bias training, self-leadership training, etc.

DI&B promotion project(launched in Dec. 2020)36 employees Group-wide participated in the FY2023 (6th) session,
with various projects conductedUtilizing senior employees

Lifetime career review training and external intern trial

Connection support/framework for
employees to help each other

Career and organization consultation office, mentoring support connecting
younger employees with more experienced employees

Support for employeeswith children

Posting stories on the internal company website about employees’ experience taking parental
leave, holding parent discussion sessions, and creating a community for employees with children

Support for mid-career hires

Holding networking events and activities to deepen company understanding,such as tours of business locations

While we have been actively revising our personnel systems
and work styles over the last several years, to employees
these changes still do not feel very big.
We will continue to create “stages” together with all
employees, including in our personnel systems and frameworks, to create a stronger company that is employee-friendly and a rewarding place to work.

DI&B Week

Holding a week-long campaign for all employees, jointly holding the campaign withlocal companies outside Japan

Thank you for providing this valuable feedback.

Dialogue sessions withmanagement

Dialogue sessions between management and DI&B project members(total of 6 sessions held since FY2021)

Zeon Group

Integrated Report 2023

Data

55

In the new managerial personnel system, we have clearly defined the demands of each managerial role. Roles havebeen categorized into the areas of production, R&D, business, corporate, and DX, and we have presented a model
career path for each area. Along with this, we have clearly defined the knowledge, experience, skills, and conductthat is needed for the roles with the intention to have employees design their own career plan. In terms of education, we are looking at creating a framework to allow employees to select the specific educational programs theyneed themselves to acquire skills and advance their careers.
That said, it is not feasible to expect employees to suddenly come up with their own career plans. We havetherefore set up opportunities in fiscal 2023 for employees to think about their careers and tell us their objectives.
Through discussions with their manager and others, we are supporting employees to think about their careers on
their own. We will also increase opportunities for employees to realize their career goals, including through thein-house job-posting system.

Management Foundation

employees while respecting their diversity (D&I) and making

We received feedback from employees that they
did not know how to think about their own careerplan since they had not really considered one indetail before, and that they felt the need for moretraining programs to acquire the knowledge andskills they need to achieve their career goals.

Business Strategy

areas of Zeon, including the Research & Development Head-

Support for women employees
Program

We are working to create “stages” together with employees that allow them to demonstrate
their individual strengths in pursuit of achieving our Group-wide strategy.
At the Human Resources Division, we are visiting all Zeon business locations and holding
more in-person discussions. Employees from the Head Oﬃce and the R&D Center participated in one such frank discussion at our Head Oﬃce building on creating these “stages.”
Highlights from the discussion are below.

Value Creation Story

When we assessed gender equality at Zeon using WEPs

Employees

56Sustainability Policy and Dissemination Activities
Sustainability Management

Sustainability Policy
Comfortable Life”.

Based on our corporate philosophy of “contributing to thepreservation of the Earth and the prosperity of the humanrace”, sustainability at Zeon means achieving sustainable③Each of us will think and act proactively for a better future.

Furthactivities to be a trustworthy company.

nt
meocial issues = Sustainabl
e des to s
n
o
vel
uti
l
op
o
s
ns to social issu
o
i
t
er
u
l
es
So
①

We will firmly maintain fairness and integrity in ourSocietyZeon

growth together with society. To achieve this, we will pro-through fairness and integrity and have each one of us act
proactively thinking how to create a better future for thesociety and ourselves.

The Sustainability and CSR Conferences are chaired bywhich began in FY2021, is to become a company that lives up

the president, and discuss and take decisions on various

to societal expectations and the aspiration of employees. To

measures related to sustainability and CSR, reporting to thethe end, we are striving to realize sustainability management,

Board of Directors as required. Risk management and com-and in July 2022, we adopted our Sustainability Policy topliance will continue to be handled mainly by the CSR Confer-replace our previous CSR Policy, to clarify the approach to beence, while the Sustainability Conference will deal withused in activities by the Group and its employees. In Decem-

sustainability-related issues.

ber 2022, in addition to the CSR Conference, we establishedthe Sustainability Conference and the Sustainability Committee under it to discuss and promote sustainability-related

vide products and services that are valuable for solving
global and social issues, build trust with our stakeholders

The Vision for 2030 of the Medium-Term Business Plan,

Value Creation Story

Sustainability of SocietyWe aspire to realize a “Sustainable Earth” and “Safe and④

initiatives on a group-wide basis.

② Pr o ﬁ t

F urt

h er proeg
ﬁt = S u stain a bl

ro w

th

Sustainability of Zeon

Bodies and committees promoting sustainability
Board of Directors
Business Strategy

Representative Director

Explanation of the schematic diagram
Zeon’s Sustainability Policy can be explained with reference to the schematic diagram shown above. Firstly, the inner arrows( 1 and 2 ) represent how, by helping to solve social issues and providing new value for society, Zeon itself can also obtainprofits in return for providing this value. Arrows 3 and 4 show how continuing to implement a “virtuous circle” can lead tosustainable development for society and continued growth for Zeon. The image in the middle representing two people
shaking hands denotes how, by realizing this kind of virtuous circle, the relationship of trust between society and Zeon canbe further strengthened.

Executive Committee
Department of Internal
Auditing

Sustainability Conference

Sustainability Committee
Risk Management Committee
Compliance Committee
Information Management Committee

Disseminating Our Sustainability Policy

CSR Conference

Environmental and Safety Affairs Committee

during the second half of FY2022, briefing sessions to dis-

PL Committee

Business divisions, indirect departments, laboratories,
and plants/Subsidiaries and affiliates

seminate the policy were attended by all Zeon Group

Public Relations Committee

employees in Japan. Briefings were held at Zeon’s head office,research laboratories and six manufacturing plants, and at
the group companies. During the briefings, the Corporate

Activities to Define Materiality

Sustainability Division Manager presented the policy background, the importance of sustainability for Zeon, and theaim of each aspect of the policy. After the sessions, participants attended a workshop to discuss sustainability anddeepen their policy understanding.
In FY2023, we will extend these briefings to international group companies in line with our efforts to disseminate the policy.

Zeon Group

Post-briefing discussion at Sustainability Policy presentation

In April 2023, we formed a cross-department project todrawing on the opinions of management and employees.

define materiality, which will be the basis for our sustainabil-Once the necessary administrative decisions are taken, ourity management. We are now compiling preliminary defini-aim is to reach a definition of materiality by the end of 2023,

tions, taking into account internal and external trends andand promulgate it internally and externally.

SDGs Contribution Product Certification (provisional name)We regard SDGs as societal expectations, and are working tofocus on and reinforce products that contribute highly toachieve our Vision for 2030 through SDG-related activities. As

SDGs. We are certifying specific products based on provi-

one such activity, we are considering the adoption of ansional criteria, and based on the results and finalized details,

SDGs Contribution Product Certification (provisional name) toanticipate officially introducing the system in FY2024.

Integrated Report 2023

Data

57

Management Foundation

Quality Assurance Committee

Our Sustainability Policy was established in July 2022, and58

Initiatives Relating to Respect for Human Rights
Group companies in Japan

3 Supplier engagement

sustainability management and is proceeding with initiatives based on the Zeon Group Human Rights Policy established in

For our group companies in Japan, we have provided education

From the suppliers to whom we sent the standard SAQ feed-

August 2019.

to the management and staff involved with human rights atback sheet, we selected 16 for scores that were especially higheach company regarding the background of our initiatives andor low or for their handling of high-risk materials in terms of

the importance of efforts to promote respect for human rights.

CSR. We subsequently visited or interviewed those selected toStarting in FY2023, we will begin full-fledged efforts to

explain the importance of CSR procurement and confirm theZeon Group Human Rights Policy (excerpt)(Established August 1, 2019)We, the Zeon Group, are committed to fulfilling our corporate social responsibilities in respect of human rights and contribut-

identify human rights risks at each group company and for-ing to realizing a sustainable society, based on international codes of conduct on human rights, such as the Universal Declara-

mulate and implement measures to reduce such risks.

tion of Human Rights, the International Labor Organization (ILO) Declaration on Fundamental Principles and Rights in Labor,
and the UN Global Compact.
For the full Zeon Group Human Rights Policy, please visit:https://www.zeon.co.jp/en/csr/social/

Initiatives for FY2022 and Forward
Starting from FY2022, we have begun to implement full-scale
human rights due diligence initiatives.
poration, group companies, and the supply chain have been
carrying out relevant measures while receiving advice fromThe Zeon Group endorses the UN Global Compact. We
also participate actively in subcommittees of Global

external experts.

Compact Network Japan. We participate in workshops

Zeon Corporation

chain subcommittee and human rights due diligence

and working groups of the human-rights-related supply

Zeon Corporation has added “human rights issues in advertising” to the 25 risk categories for human rights listed in “Company Obligations to Respond to Business and Human Rights”

subcommittee, and apply the information and knowledge gained through the Group’s efforts to actions that
ensure respect for human rights.

Supply chain
1 Identification of risks at suppliers

4 Establishing sustainable procurement guidelines

procurement departments identify those with operations that

Zeon has CSR Procurement Guidelines based on which weare likely to involve high risks for human rights, etc., in addi-

pursue procurement compliant with our corporate socialtion to those in the top 80% or higher by trading amount. We

responsibility. In the latter half of FY2023, we plan to flesh out

used Global Compact Network Japan’s standard Self-Assess-the content of those guidelines in the form of Sustainable Pro-

ment Questionnaire (SAQ) to ascertain the status of initiatives

curement Policy and devise Sustainable Procurement Guide-

being taken by suppliers and to identify risks.

lines that elucidate the environment and human rights andother policies involved in sustainable procurement for Zeon.
With the policy and guidelines in place, we will

2 Feedback
We sent a feedback sheet to all suppliers who answered theextend them to our suppliers, thoroughly communicating

standard SAQ survey, revealing their score in each category

our approach so that sustainable procurement is(human rights, labor, environment, etc.), along with the aver-practiced thoroughly.

age score for all suppliers, their previous scores, and generalcomments, to encourage those suppliers to improve their

5 Establishing supply chain reporting hub

CSR initiatives.

To prevent incidents from occurring in our supply chain that
infringe upon laws or regulations, or violate our corporate
ethics, we plan to establish a supply chain reporting hub on

This issue has become a problem downstream in the supply

our website in the second half of FY2023.

chain in recent years. We have designated a department toaddress this and other risks; it is now working to reduce

Item

Human rights issues we focus on (partial list) and our responses

Occupational healthand safety

Workers’ health is not protected

Continuation of regular health checkups andmeasures against infectious diseases such as
COVID-19

Excessiveand unreasonable
working hours

Long working hours due to labor shortages
and incidents

Continuation of proper understanding of working
hours, and making employees aware of working
hour consultation services and maximum working
hours

Harassment indifferent forms

Various acts of harassment such as power, sexualand care harassment, and pregnancy
discrimination (maternity harassment)

Ongoing implementation of anti-harassment
training

Rights of foreign
workers

Discriminatory treatment on the basis ofbeing a foreigner

Increased Japanese language learning support forand dialogue with foreign employees

Rights of local residents

Negative impact on local residents due to noise
and waste in production activities

Confirmation of the status of initiatives at plants
and production sites

Human rights issues
in advertising

Advertisements produced promote discrimination

Attendance at human rights seminars for relevant
personnel and confirmation with advertising
agencies concerning human rights policies

Right to access remedies

Even if a consultation service exists, it is not madewidely known

Revision and dissemination of employee concern
system rules

Zeon Group

Feedback interview content

Low-scoring
companies

5

Explanations of CSR and sustainable procurement initiatives are provided, as well as a detailed
review of low-scoring items to identify risks and encourage improvement actions

High-scoring
companies

3

Interviews are conducted with high-scoring companies to learn from them and get examples ofbest practices to apply to sustainable procurement at our company and other suppliersCompanies
handling high-risk
raw materials

8Companies that handle raw materials considered to be high-risk from a CSR perspective(such as conflict minerals, palm oil, and silicon) are asked to check their upstream approachand the management status of the target raw materials; and if inappropriate, encouraged tomake improvements

Future Initiatives in FY2023
We will maintain and develop our initiatives implemented in FY2022, extending these efforts to promote respect for humanrights to our group companies outside Japan.
Data

59

Status of our initiatives

Number ofcompanies

Management Foundation

Supplier engagement and feedback

human rights risks group-wide.

General risk description/examples

reduction activities in the supply chain.

We surveyed a total of 262 of our suppliers by having our(published by the Ministry of Justice’s Human Rights Bureau).

Risk categories

As necessary, we ask them to make improvements orrequest other things through discussions as part of CSR risk

Business Strategy

In implementing human rights due diligence, Zeon Cor-

Participating in Activities of
the United Nations Global Compact(UNGC)

status of their initiatives.

Value Creation Story

The Zeon Group positions initiatives relating to respect for human rights as one of the important foundations underpinning

Integrated Report 2023

60

Stakeholder Engagement
FutureWe believe that building relationships of trust with stakeholders is essential

Dialogue with analysts and investors:
Briefings on company condition

in promoting sustainable business activities. This will help us contribute toa sustainable Earth and safe and comfortable lives for people, under our

Earth

Life

of the human race.

Through such activities as quarterly briefings for analysts andinstitutional investors, posting detailed financial result materials

Value Creation Story

mission of contributing to the preservation of the Earth and the prosperityon our website, and hosting company briefings for individual

Our vision for 2030 is to be a company that lives up to societal expecta-

investors, we are striving to enhance our communication activi-

tions and the aspirations of employees. In practice, we identify societal
expectations as SDGs, incorporating the concept of six-way satisfaction. Of
the six, “business partners” refers to our customers and suppliers, “shareholders” refers to our shareholders and investors, “life” refers to people

ties beyond one-on-one interchanges. FY2022 activities
Business
partners

everywhere and their lifestyles, and “employees” refers to the people who

Shareholders

included an online corporate information session in September,
giving the President an opportunity to profile the company
condition and outlook.

Employees

work with us at Zeon. To realize our Vision, we will maintain dialogue with

Dialogue with local communities:
Hosting summer festivals

stakeholders and efforts to deepen mutual understanding further.

We host summer festivals, mainly in communities where our
Stakeholder relations

Suppliers

Local community

Sales activities

Our goal is to realize a sustainable society throughout our
supply chain, by engaging in responsible procurement
activities in conformance with our Sustainable Procurement
Policy. As such, it is incumbent upon us to build strong
partnerships with suppliers. We strive to gain supplier
understanding of our procurement policy, and work closelywith them to achieve enhanced procurement sustainability.
We also monitor the progress of their activities throughprocurement surveys and interviews.

Procurement activities

Our information disclosure is fair, impartial, highly
transparent, timely, and appropriate. We strive to bolster our
corporate value through dialogue with shareholders andinvestors, to foster deeper understanding of ourmanagement policies and business activities. We also takeexternal opinion seriously, and consider it in ourmanagement and information disclosure.

Financial results briefing

We operate correctly and reliably at each of our locations,and contribute to community development through ourbusiness. As a member of the local community, we engage
in diverse activities in response to local expectations. We
work to create contexts for communication, and based ontrust through mutual understanding, collaborate to achievea sustainable and prosperous community.

Business location visits and internships

Our vision for 2030 is to be a company that lives up tosocietal expectations and the aspirations of employees. To
make this vision a reality, we are evolving our personnel
system and formulating personnel policies that help every
employee demonstrate his or her individual abilities andwork with a sense of security and energy. We welcome
opportunities for dialogue, and strive sincerely to consider
individual opinions.

Get-togethers with young employees

Exhibitions
Websites (product introduction/consultation)
Customer satisfaction surveys

pend these activities, but they are being resumed flexibly on acase-by-case basis, beginning in FY2023. As in the past, we will
strive to provide these and other opportunities for local residents to participate and interact with our employees.

 ustainable Procurement GuidelinesS
enhancement and notifications for suppliersProcurement questionnaire for suppliers

TOPICS

Commitments and external evaluations

We endorse international initiatives and work to further sustainability initiatives and goals advocated byinternational organizations.
Medium-Term Business Plan briefingGeneral shareholders meetingMeetings with analysts and investors
Website (IR information)

 ocal event participation, support, and hostingL(summer festivals, etc.)
 olunteer employee activities
V(preserving the local environment, etc.)

Commitments
The United Nations Global Compact (UNGC)

The United Nations Global Compact(UNGC) is a voluntary initiative aimed
at realizing sustainable growth, byencouraging companies and otherorganizations to act as good
corporate citizens through theexercise of responsible, creative
leadership, under the guidance of
the United Nations. In July 2019, we announced our
support for the UNGC’s ten principles relating toprotection of human rights, elimination of improperlabor practices, safeguarding the environment, andpreventing corruption.

 hemical experiments classroom andCother on-site lessons

TCFD

Task Force on Climaterelated Financial
Disclosures (TCFD) wasestablished under the
Financial Stability Board(FSB) in response to a request from finance ministers andcentral bank heads of G20. The TCFD recommendations
encourage corporations to recognize their own risks andopportunities in relation to climate change and toincorporate these into their business strategy, with theultimate goal of having corporations disclose the impactof these risks and opportunities. We expressed our
support for the TCFD recommendations in August 2020.
We will continue to strive to make a contribution tocombating climate change.

Science Based Targets (SBT)

Refers to corporate greenhousegas emission reduction targets
with five- to ten-year time
horizons, consistent with levels
required by the Paris Agreement.
We have established targets, andSBT certification is pending.

Management Foundation

Shareholders andinvestors

We will provide safe, reliable, high-quality products andservices that earn customer trust. Moreover, throughcommunication with customers, we will develop products
and services that contribute to meeting their challenges,
and collaborate to develop sustainable products thatsatisfy the diverse requirements and expectations of the
global market.

plants are located. The COVID-19 pandemic forced us to susBusiness Strategy

Customers

Main dialogue channels

External evaluations
Employees

Zeon GroupCorporate management policy briefings
Internal portal site and in-house newsletterEmployee concern system

CDP

CDP is an international environmental NGO
which focuses on three areas: Climate, Water,
and Forests. In each of these three areas, CDP
administers surveys to business enterprises
DISCLOSURE INSIGHT ACTION
and gives them one of eight scores: A, A-, B, B-,
C, C-, D and D-. In FY2022, more than 18,000
enterprises disclosed data to CDP and Zeon received a B rating. We willcontinue these efforts and strive for further enhancement.

EcoVadis

EcoVadis assesses the corporate policies, strategies andperformance of its participating firms in terms of theirimpact on the environment, labor practices, human rights,
ethical issues and sustainable procurement, by using aplatform on which more than 90,000 registered buyers andsuppliers in 200 different industries from around 175
countries and regions share data. In FY2022, we received a
Bronze rating for being in the top 50% for these initiatives.

Integrated Report 2023

Data

61

Employee engagement survey

62Environment
Responsible Care Policy

Promoting a Circular Economy
lished Responsible Care Policy to embody this philosophy. We

We implement measures that promote a circular economy, awithin the Takaoka Plant which will have an annual production

phy as a member of the Japan Responsible Care Council (nowimplement environmental measures and promote improve-

key social issue today. In January 2022 we developed technol-

capacity of 6,000 tons. The facility is expected to become oper-

the Japan Chemical Industry Association Responsible Carement initiatives following these guidelines.

ogy for recycling Cyclo Olefin Polymers (COP). Waste resin canational in 2024. We plan to reuse the recycled resin from thenow be recycled to create a product with quality similar toplant to manufacture optical film, a plan that will help us tovirgin resin while maintaining high transparency and purity,

meet the strong demand for optical film we expect in thewhich had previously been difficult to achieve. In Octoberfuture while reducing CO2 emissions.

Committee) since its inception in 1995. In 1998, we estab-

Responsible Care Policy

2022, work began on the construction of a recycling facility(Established June 1998)

1 Prioritize the environment and safety

Protecting the environment and ensuring safety are preconditions for all business activities and are the most important priorities.
We will work continuously to enact full accident prevention countermeasures, and provide education and training for all employees to prevent safety and environmental accidents.
2 Collect and distribute the latest information on chemical products

We will collect, store and manage the latest information required for the appropriate handling, use and disposal of chemical products, and distribute this information to employees and users.
3 Minimize the discharge of toxic chemicals and waste

Value Creation Story

At Zeon Group, we have practiced a responsible care philoso-

Flow of COP recycling

Virgin resin
manufacturing

Optical film
manufacturing(Mizushima Plant,
Okayama Prefecture)(Himifutagami Plant,
Toyama Prefecture/
Tsuruga Plant, Fukui Prefecture)

Resin made using
Zeon’s newly-developed
recycling technology

Recycled resin
manufacturing(Takaoka Plant,
Toyama Prefecture)

4 Promote activities for conserving resources and energy

We will aim to dramatically reduce the amount of energy we use and help alleviate global warming by developing innovativetechnology and actively promoting resource and energy conservation activities that involve all employees.

Resin made using
conventional recycling
technology

5 Take the environment and safety into account when developing new processes and products andBusiness Strategy

We will work to reduce the discharge of hazardous chemical substances, minimize waste, and develop technology for recycling
and reusing materials.

performing quality assurance

We will perform thorough environmental and safety evaluations from the initial stages of research, develop technology and productsthat take the environment and safety into account, and work to maintain and improve the quality of technology and products.
6 Live together with society

We will strictly observe regulations related to the environment and safety, whether the regulations come from the local community, the national government, overseas, or organizations to which we belong. While cooperating in these activities, we will work
to enhance our communication with the local community and society in order to convey a better understanding of Zeon’s activities and further strengthen the trust that society has in our company.
We will continuously improve our environment safety management and technology by operating a Responsible Care Audit, theSafety Management System, an Environment Management System based on ISO 14001, and an Occupational Health and Safety
Management System.

Products madefrom COP

Customers

Management Foundation

7 Perform continuous improvements

Initiatives to Reduce Industrial Waste from Plastic Products
Environmental and Safety Management Systems (Environment)
We have built environmental and safety

Environmental and safety management systems (environment)

management systems based on aobtained ISO 14001 external certification
to pursue environmental management.
Every year we draft policies andactivities plans such as the Annual
Environment and Safety Policy, basedon the President’s Annual Policy.

 resident’s Annual
P
PolicyAnnual Environment and Safety
Policy resident’s Annual
P
Policy nnual EnvironA
ment and Safety
Policy (draft)

(t)
2,000

Promotion of Resource Circulation for
Plastics , which came into force in April
2022, Zeon is classified as a businessthat generates a large amount of

1,500

Targets and reduction plans
are under review

industrial waste from plastic products
CSR Conference
Sustainability
Conference(250 tons or more). We are working to
reduce the amount of waste we gener-

1,000

ate and set up medium- to long term

Data

Environmental and
Safety Affairs Department

Amount of industrial waste from plastic products

Policy is “Minimize the discharge of toxic
chemicals and waste.” Under the Act on
Deliberation
Decisionmaking
Confirmation

Top management

responsible care policy and have

Article three in our Responsible Caretargets and plans to manage waste.
500

Worksites
Draft the Annual Worksite Manager’s Policy
Draft the Annual Worksite Environmental and Safety(Responsible Care) Activities Plans and progress management

63

Zeon Group

0

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

(FY)

Integrated Report 2023

64

Environment

TCFD

Initiatives on Water Resources

Analysis and Reporting Based on TCFD Recommendations

Water is indispensable to our manufacturing activities. If waterrate, these things would pose a serious risk to both our company and local communities. Out of this understanding, we

1 Identification of our risks and opportunities concerning

water risk
2 Establishment of Group-wide policies, targets, and indica-

tors for water risk

Expressing support for the TCFD recommendations
and CO2 Emission Reduction Initiatives
In August 2020, Zeon Corporation expressed its support for therecommendations of the Task Force on Climate-related Finan-

began initiatives in FY2022 to fully assess water risk. We will

3 Promotion of PDCA for targets and indicators

proceed going forward with the steps outlined below.

4 Disclosure of our initiatives to stakeholders

2 Risk impact assessment

3 Development ofpolicy guidelines,
business strategies, andtarget indicators

Support for TCFD announcedImplementation, on a trial basis, of analysis of the impact
on Zeon’s rubber business of the 2°C and 4°C climatechange scenarios2021

 nalysis of the impact of the 2°C and 4°C climate changeA
scenarios on Zeon’s businesses other than rubber
Reflection of certain elements in the Medium-Term Business Plan2022

 ormulation of a Carbon Neutrality Master Plan, and presenF
tation of metrics and targets
Promotion of activities aimed at securing SBT certification(group-wide for Scope 1, 2 and 3)2023

 romotion of initiatives aimed at achieving the metrics andPtargets in Phase 2 of the Medium-Term Business Plan
Considering the adoption of an SDGs Contribution Product
Certification

ness strategies to strengthen our business foundation,
Extension of water risk initiatives tothe entire group and supply chain

Step 3
4 Extension within Japan

Group companies
Supply chain

Step 45 Extension outside Japan

Group companies
Supply chain

aiming to realize a sustainable society and improve Zeon’s
corporate value.
These initiatives are reflected in the group-wide strategy of“Promote a transformation of monozukuri to realize a carbon
neutrality and circular economy” that is outlined in our Medium-Term Business Plan. We have formulated a Carbon Neutrality Master Plan, with 2050 as the target year, and we areDisclosure of Zeon’s Activities in Response to TCFD Recommendations
Climate Change Initiatives
As a chemical manufacturer, combatting climate change is a

For the progress of the Carbon Neutrality Master Plan, see P.29

pressing matter that must be addressed. We are reevaluating

 or information disclosure in response to TCFD recommendations,F
see the next page and following

business activities in which the use of petroleum-based raw
fuel was taken for granted until recently and are trying tofigure out what steps and measures are needed to achievecarbon neutrality, and taking them.

Governancea) Board’s oversight of climate related risks
and opportunities
In July 2021, we established the Corporate Sustainability Head-

Carbon Neutrality Master Plan in 2021. The plan calls for identifying the current status of CO2 emissions and sets reduction
targets for emissions to reach carbon neutrality by 2050.
We announced support for the TCFD recommendations inquarters to promote our sustainability efforts and disclose

2020 and have since been taking action in response to TCFD

progress and results. In July 2022, we established a newrecommendations, including TCFD scenario analysis. Here, weCarbon Neutral Division under the headquarters, and arerecognize that quantitative disclosure of financial impacts (indi-promoting a transformation in monozukuri to realize carbon

cators and achievement status) is a key challenge for the future.

tee have a system to hold discussions on “response to cli-

Strategya) Climate-related risks and opportunities theorganization has identified over the short, medium,and long termmate change” as one of the important sustainability issues,

To understand risks and opportunities related to climate

and to report on the contents to the Board of Directors

change, in FY2020 we analyzed the impact on Zeon’s rubber

as necessary.

business of the 2°C and 4°C scenarios. Further, in FY2021 we

our Medium-Term Business Plan. These systems have been
established with the approval of the Board of Directors.
Our Sustainability Conference and Sustainability Commit-

Article six of our Responsible Care Policy is “Live together withsociety.” At every one of our business sites we focus on conducting business in a trustworthy way, and we hold dialogues
with the local community to ensure that the area’s residents
understand our operations and efforts. We work actively to

conducted the same scenario analyses group-wide.

build community ties through beach and river cleanups, weedb) Management’s role in assessing and managing climate-related risks and opportunities

cutting, etc., to protect the environment and ensure peace ofmind for local residents. We also promote integration with theclimate change to live up to our corporate philosophy of “con-The anticipated financial impact on Zeon’s business was ana-

tributing to the preservation of the Earth and the prosperity oflyzed for the 2°C and 4°C scenarios. It was found that, for thethe human race.” The reporting and deliberation on the

4°C scenario, earnings would fall due to the impact of physicalGroup’s actions being taken on the issues are conducted byrisks and because of rising procurement costs, while for thethe Sustainability Conference, and ultimate responsibility for

2°C scenario, earnings would fall because of the adoption of

the realization of sustainability is assumed by the representa-

carbon taxes and the widespread adoption of EVs, but there

tive director, who chairs the body.

would also be a positive contribution to earnings from newcompany director, oversees the organizational structure

ing on-site chemistry classes for nearby elementary school
kids and offering work internships.
Beach cleanup (Takaoka City and Himi City, Toyama Prefecture)

To address climate change, we formulated our initial

Zeon GroupData

described above to address sustainability issues that includingb) Impact of climate-related risks and opportunities
on the organization’s businesses, strategy, andfinancial planning
Evaluate business impacts (impact on financial planning)

The head of the Corporate Sustainability Headquarters, acommunity for the future through initiatives that include hold-

65

Management Foundation

neutrality and a circular economy as a Group strategy under

Collaboration with Local Communities and Society

Business Strategy

1 Recognition of water risk(scenario analysis)

Step 22020

Going forward, based on the TCFD recommendations,change poses to our business and reflect them in our busi-

Water risk survey (non-consolidated)

Step 1plan and the progress made in reducing CO2 emissions.

cial Disclosures (TCFD).
we will analyze the risks and opportunities that climate

Roadmap of initiatives on water resources

disclosing the measures that will be adopted to realize thisValue Creation Story

resources were to become depleted or water quality deterio-business opportunities.

Integrated Report 2023

66

TCFD

Climate-related risk priority assessment (Identification of risks and opportunities)
Our climate-related risks and opportunities
Evaluation item
Category

Transition

Policy/Legal

Industry/
MarketImportance

Carbon pricing and carbon tax

I ncreased opportunities for sale of products that contribute toward
reducing CO2 emissions (resulting in increased sales)

Individual countries’ carbon
emissions targets/policies

I ncreased emissions controls compliance costs (resulting
in increased operating costs)

As above

Key products/Increase or
decrease in product prices> Changes in raw materials
procurement costsR ising raw material prices (resulting in increased
operating costs)

Falling raw material prices (resulting in reduced operating costs)

Changes in energy demand> Changes in utility costs (fueland electric power)

Rising energy prices (resulting in increased operating costs)

Increased demand for energy (resulting in increased sales)—

Enhanced competitiveness due to technological advances (resulting inincreased sales)Increased competitiveness in the event of successful future development ofefficient manufacturing technologies or manufacturing methods that do
not use fossil fuels
Securing an advantageous position in the market through the developmentof biomass-based raw materials, etc.
Development of technologies and products (such as chemical recycling)oriented toward the low-carbon society and the circular economy

Major

Major

Major

Major

Rising sea levels

Negative impacts on operations from rising sea levels(reduced sales due to production stoppages and delays
and/or increased maintenance and repair costs)

—

Major

Rising average temperatures

Increased burden of responding to rising temperatures(resulting in increased operating costs)
Reduced capacity utilization rate due to an increase in theincidence of operatives suffering heatstrokeIncreased plant restoration costs and safety measures costs
Reduced productivity (due to reduced cooling capability,
or reduced GPB and GPI extraction capability)
Higher storage and transportation costs due to increased
need for low-temperature storage and transportation of
raw materials and products (affecting business divisions)

Increased sales accompanying rising temperatures
Increased demand for medical products due to the spread of certain
diseases, heatstroke, etc.
Increased demand for Zeon products due to reduced supply of natural products
Increased demand for plant growth regulators and fragrancesIncreased demand for thermal interface materials (TIM) to solve problems
with excessive heat generation

Disruption caused to operations by severe natural
disasters (resulting in reduced sales and increased
operating costs)

Increased sales opportunities resulting from large-scale natural disasters
Increased demand for gloves resulting from a worsening hygiene environment
Emergence of concerns regarding the existing electric power network as aresult of disasters
Diversification of the electric power grid, increased demand for storage
batteries, and increased sales of battery materials, due to concerns
regarding industrial operations and lifestyles

PhysicalWe are promoting various initiatives to achieve our goal of

have been identified and classified according to importance.

reducing CO2 emissions by 50% in FY2030 from FY2019 levels.
Our strategy for reducing Scope 1+2 emissions combinesb) Processes for managing climate-related risks

three approaches: 1 Energy saving, 2 Process innovation,

With regard to climate-related risk, we have established a Risk

and 3 Energy shift.

Management office, and climate-related risk is recognized in

The anticipated reduction rates are 10% for energy saving,

the group-wide risk management table. As regards the

10% for process innovation, and 80% for energy shift, so the

response to risk, the Risk Management office performs risk

greatest benefits are expected to be achieved through the

management, including risk assessment and clarification ofshift to new energy sources. Energy shift involves switchingappropriate response strategies.

over to renewable energy or to fuels that has a non-fossil
certificate* for the fuel used in boilers, etc.

c) H ow processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overall risk management
We have a system in place that takes the identified climatechange risks and links them to impact assessment results andR&D policies. These influence management policies and the

In FY2022, we effected an energy shift at our domestic
production sites as shown below. We will continue to carry out
reduction measures to achieve our reduction targets for FY2030.
* Non-fossil certificate: With a non-fossil certificate, the greenhouse gases generated in allprocesses from extraction through to fuel usage are offset by carbon credits, so on a
global scale, use of the fuel in question can be deemed to not generate CO2 emissions.

business plans we set up to achieve our vision for the future,

Major

Major

taking the form of specific numerical targets incorporated into

FY2022 initiatives

our three-year plans and annual budgets.

We have switched to 100% renewable energy sources for theelectric power purchased for all four production facilities inMetrics and targetsa) Metrics used by the organization to assess climaterelated risks and opportunities in line with its strategy
and risk management process
Metrics and targets

Japan (Takaoka, Himifutagami, Tsuruga and Tokuyama plants).

In 2021, we formulated our initial Carbon Neutral Master Plan,

The Kawasaki Plant began using carbon-neutral city gas

which set reduction targets for FY2030 to achieve carbon

supplied by Tokyo Gas and joined the Carbon Neutral LNG

neutrality by 2050. These targets call for a 50% reduction by

Buyers Alliance.

The Takaoka Plant has contracted to purchase carbon-neutral LNG, which produces virtually zero CO2 emissions.
The Tokuyama Plant has contracted to purchase Renewable
Energy Certificates to reduce CO2 emissions from steam.

FY2030 in the Scope 1+2 CO2 emissions of Zeon Corporation

Group-wide impact assessment(unconsolidated) as compared to FY2019. We will update theUnder the 4°C scenario

plan as required in the future.

Under the 2°C scenario

See P.29

Management Foundation

Major

Increasing seriousness ofabnormal weather conditions(trend toward larger typhoons
and hurricanes, etc.)

physical risks associated with climate change for 2030 and beyond

Business StrategyI ncreased opportunities for sale of products that contribute toward
reducing CO2 emissions (resulting in increased sales)

Changes in customer behavior

Based on the 4°C and 2°C scenario analyses, transitional and

Major

Deteriorating reputation of the company’s products andof the company itself (resulting in reduced sales)

Chronic

Acute

Observations: OpportunitiesA doption of carbon taxes (resulting in increased
operating costs)

Evolution of next-generation
technologies

Reputation

Observations: Risks

Sub-categoryc) T argets used by the organization to manage climaterelated risks and opportunities and performanceagainst targets
Initiatives to achieve targets

Value Creation StoryTypeof risk

Risk managementa) Processes for identifying and assessing climaterelated risksb) Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks
In order to be able to disclose Scope 1, 2 and 3 emissions data
for the Zeon Group as a whole, we have established a systemfor determining Scope 1, 2 and 3 data, including that of group
OperatingincomeResponse to
Raw materials
abnormal weather procurement
conditions

Adjusted
earnings

OperatingincomeCarbon tax

Widespread Raw materials Businessadoption of procurement opportunities
EVs

Adjusted
earningsc) Resilience of the organization’s strategy, taking into
consideration different climate-related scenarios,
including a 2°C or lower scenario
Future direction

be undertaking group-wide examination of policies aimed atGoing forward, based on the results of this scenario analysis,

mass as raw material. We will also be aiming to expand ourwe will be implementing response strategies in coordination

businesses by undertaking product development and productwith the group-wide strategy outlined in the Medium-Term

portfolio management based on assumptions regarding

Business Plan. Regarding the decarbonization strategy, we willchanges in customers’ behavior.

Zeon Groupmaking Zeon carbon neutral. With regard to the resourcecompanies, and on the basis of these results, we are implementing CDP disclosure and aiming to secure SBT certification.
As a departmental issue, we are focusing in particular on
setting metrics and targets for Goal 13 of the SDGs (Takeurgent action to combat climate changes and its impacts).
Data

67

Carbon tax

strategy, we will be promoting the circular economy and proceeding with development of products that make use of bio-

Integrated Report 2023

68

Directors and Officers

More detailed information can be found in the Corporate Governance Report (Japanese version only).
https://www.zeon.co.jp/news/assets/pdf/230707.pdf

A total of 11 directors, including 5 outside directors, have been appointed since the general shareholders meeting at the end ofJune 2023.

Directors

Audit & Supervisory Board Members
Value Creation Story

ChairmanPresident and CEO

Director & Senior Corporate Officer

Director & Senior Corporate Officer

Kimiaki Tanaka

Tetsuya Toyoshima

Kazuyoshi Matsuura

Yoshiyuki Sone

ProfileApril 1979 Joined Zeon
June 2005 Zeon Director
June 2007 Zeon Director and Corporate Officer
June 2011 Zeon Director and Senior Corporate
OfficerJune 2012 Zeon Director and Executive
Corporate Officer
June 2013 Zeon President and CEO
June 2023 Zeon Chairman (current)

ProfileApril 1989
Joined Zeon
January 2013 Zeon Division Manager – Specialty
Plastics & Components Business
June 2015
Zeon Corporate Officer
June 2020
Zeon Senior Corporate Officer
June 2022
Zeon Director & Senior Corporate
OfficerJune 2023
Zeon President and CEO (current)

Elastomers and Chemicals BusinessDirector – TOHPE CORPORATION

Sachio Hayashi

ProfileApril 1988 Joined Zeon
July 2017 Zeon Division Manager– Specialty Components
June 2018 Zeon Corporate Officer
June 2020 Zeon Senior Corporate Officer
June 2022 Zeon Director & Senior Corporate
Officer (current)

Director & Corporate Officer

Outside Director

Outside Director

Yuichiro Konishi

Erisa Watanabe

Takao Kitabata

Tadanobu Nagumo

ProfileApril 1991 Joined Zeon
July 2011 Joined Solvay Specialty Polymers
July 2012 Joined Zeon
July 2013 Zeon Division Manager – Electronics
Materials Division I
July 2015 Zeon Division Manager – Electronics
Materials Division; Manager – Taiwan
Representative Office, Electronics
Materials Division
June 2020 Zeon Corporate Officer
June 2022 Zeon Director & Corporate Officer
June 2023 Zeon Director & Senior Corporate
Officer (current)

ProfileApril 1987 Joined Zeon
April 2013 Zeon Production Center Manager– Materials Procurement
June 2018 Zeon Corporate Officer
June 2022 Zeon Director & Corporate Officer(current)

Outside Director

Outside Director

Outside Director

Fumiaki Ikeno

Miki Akiyama

Saeko Masumi

President – Kaishi Professional University

Audit & Supervisory
Board Member (External)

Audit & Supervisory
Board Member (External)

Toru Nishijima

Akio Kohri

Nobutake Nishijima

Hiroki Kimura

Adviser – ADEKA CORPORATION

President – Asahi Mutual Life
Insurance Company

Corporate Officers

Tomoyuki Kose

Makoto Watanabe

Tsutomu Eguchi

Satoshi Tominaga

Yoshinobu Oi

Hiroshi Yamamoto

Kazuo Nakajima

Masahiro Nakamura

Haruhiko Takahashi

Masao Akasaka

Noboru Watanabe

Takahiro Kakihara

Masayuki Shirakawa

Koichi Miyagi

Plant Manager– Kawasaki Plant

President– Zeon (Shanghai) Co., Ltd.

Division Manager – Corporate
Administration; President– Zeon F&B Corporation

President– Tokyo Zairyo Co., Ltd.

Management Foundation

Director & Senior Corporate Officer

Corporate Sustainability Division
Manager – Corporate Sustainability

Audit & Supervisory
Board Member (External)

Administration

Plant Manager– Takaoka Plant

Specialty Business Division Manager– Specialty Plastics

Audit & Supervisory
Board Member

Business Strategy

ProfileApril 1993 Joined Zeon
July 2014 Zeon Synthetic Rubber Division Manager– Rubber Sales Department II
June 2017 Zeon Corporate Officer
June 2019 Zeon Director& Corporate Officer
June 2022 Zeon Director & Senior Corporate
Officer (current)

Audit & Supervisory
Board Member

Senior Advisor – The Yokohama RubberCo., Ltd.

Division Manager– Production Center

Division Manager– Legal & Compliance

Division Manager– Energy Materials

Division Manager – Specialty
Materials; President– Zeon Taiwan Co., Ltd.

Research & Development

Data

Board Member, Co-Founder, Chief
Medical Officer, GP – MedVenturePartners, Inc.

69

Zeon Group

Professor – Keio University, Faculty ofEnvironment and Information Studies

Lawyer – Sengokuyama Law Firm

Plant Manager– Mizushima Plant

Division Manager – Elastomers

Division Manager – Corporate
Planning; General Manager– “ZEON NEXT” Exploration

Plant Manager – Tokuyama Plant

Integrated Report 2023

70

Governance

PDF


Corporate Governance Report (Japanese version only)

https: //www.zeon.co.jp/csr/concept/pdf/200325073.pdf
PDF
Basic Policy on Corporate Governance (Japanese version only)

https: //www.zeon.co.jp/csr/concept/pdf/200281514.pdf

Corporate Governance
Basic approach to corporate governance

2 Executive Committee

Corporate Governance System (as of July 2023)
General Shareholders Meeting
Decisions/Supervision(appointments/dismissals)

Director andNomination Suggestions
4 Officer
and Compensation
Committee
Require advice

Corporate Value
Creation
Conference

Suggestions

Collaboration

Executive
Committee

2

Department ofInternal Auditing

Auditing

Board ofDirectors

3

Audit &
Supervisory
Board

Decisions/Supervision(selections/dismissals)(Dismissals)
Collaboration(Appointments/
dismissals)

Financial
Auditors

Collaboration(assistance)

Auditing
Personnel

Financial
AuditsAuditing

3 Audit & Supervisory Board

The Audit & Supervisory Board comprises five members, including three external members. The Board reports on, discusses,
and adopts resolutions on important business matters. In accordance with the auditing guidelines established by the Audit &Supervisory Board, each member audits directors’ execution of
their duties through various means, such as attending Board of
Directors meetings and monitoring business operations, including subsidiaries’ operations.

Business Execution &Internal Controls System

Representative
Director

Reporting

CSR Conference

Risk Management Committee

Reporting(external)

Compliance Committee

External lawyers

Information Management
Committee

Quality Assurance Committee
PL Committee
Public Relations Committee
Sustainability
Conference

Reporting(internal)

5 Corporate Value Creation Conference

The Corporate Value Creation Conference was established as anadvisory body to the Board of Directors, to strengthen the decision-making and oversight functions of the Board with respect tothe creation of the Zeon Group’s corporate value, and activities
aimed at reflecting that value in our market capitalization. The
Conference consists of the Chairman, the President, and the following outside directors and external members.

Sustainability Committee
Cyber Security Committee
Health and Productivity
Management Promotion Committee

Business divisions, indirect departments, laboratories, and plants
Control/monitoring

Reporting(external)
Reporting(internal)

Reporting(external)

Outside Directors
Takao Kitabata, Tadanobu Nagumo
Audit & Supervisory Board Members (External)
Nobutake Nishijima, Hiroki Kimura
Attorney at Law
Shigeru Nakajima (Nakajima Transactional Law Office)Under its chairperson, outside director Tadanobu Nagumo,
the Conference engages in discussion that encompasses thesources of corporate value Zeon should defend; analysis of weaknesses that could affect acquisition risk, and measures to be taken

71

Zeon Group

Appointment and dismissal of directors and officers

We nominate individuals for internal director who have the expertise and experience to execute Zeon’s management precisely, fairly,
and efficiently, with an extensive track record of social trust. We
seek to nominate individuals to be outside directors who can supervise management with an independent external perspective, andadvise Zeon concerning its activities based on abundant experienceand high-level insight.
In nominating candidates for the Board of Directors, thePresident recommends individuals who meet the above policies
with the advice of the Director and Officer Nomination and Compensation Committee, and the Board of Directors reviews andselects the candidates.
Candidates nominated for selection as internal corporate
auditors must have the expertise and experience to audit directors’ execution of their management responsibilities precisely,
fairly, and efficiently, with an extensive track record of social trust.
Candidates nominated for outside corporate auditors must be
capable of conducting audits from an independent external
position, with a foundation of abundant experience andadvanced expertise.
In nominating candidates for corporate auditors, the President recommends individuals who meet the above policies withthe advice of the Director and Officer Nomination and Compensation Committee, and with approval from the Audit and Supervisory
Board, the Board of Directors reviews and selects the candidates.
In the case of committing a serious violation of the law, or an
act violating company policy either intentionally or through grossnegligence, or other reason that is cause for dismissal of thedirector or officer as provided in internal company regulations,
the Board of Directors deliberates the case and dismisses the
director or officer concerned based on the Companies Act andother legislation.

Integrated Report 2023

Data

Subsidiaries and affiliates

Compensation Committee

The Director and Officer Nomination and Compensation Committee is positioned as an advisory organ to the Board of Directors
for the purpose of strengthening the objectivity and transparency of the Board of Directors functions related to nominating
directors and officers and deciding their compensation. The
committee is composed of seven members, of which five are
independent outside directors.

We again conducted our annual survey of directors, outside
directors, and corporate auditors, mainly relating to the operation of the Board. We requested a third-party law firm to compileand comment on the responses, and its conclusion was thatZeon’s Board of Directors effectiveness can be evaluated as
generally high. As such, we judged that the Board’s effectivenesswas being maintained.
At the same time, the third-party reviewer pointed to the needfor unstructured interchange between outside directors andmanagement outside the context of Board meetings, and formore frequent status reports on the Medium-Term Business Planand sustainability issues. Consequently, we will strive to enhance
our effectiveness further by conducting themed discussion sessions to be attended by external directors, relevant internal executive officers, and division heads, as well as through quarterly
reporting on the progress of the Medium-Term Business Plan andthe status of sustainability initiatives, among other efforts.

Management Foundation

Internal audits

Internal audits

Environmental and Safety Affairs
Committee



4 Director and Officer Nomination and

Evaluating the effectiveness of the Board of Directors

Business Strategy

51(Appointments/dismissals)

The Executive Committee, in accordance with the Executive Committee Rules, comprises the President and executive officers ranked
senior corporate officer or above and meets twice a month in principle to examine and make decisions on important business mattersafter due deliberation involving consultation with attending full-time
Audit & Supervisory Board members. Important business matters
stipulated in the Board of Director Rules are examined and decided
by the Board of Directors.

in response; and issues relating to corporate governance, internal
controls, and the Company’s risk management structure. At theend of the fiscal year, the Conference provides advice to the Boardof Directors. It intends to serve as a major driver of corporate
value enhancement and creation, and by extension, measures that
tend to maximize our market capitalization.

Value Creation Story

Maintaining a system of internal control allows us to clarify
the functions and roles of each body and company organizationand to carry out rapid decision-making and execution. We arealso improving corporate transparency through appropriatemonitoring and disclosure of business activities and their effects.

Zeon aims to increase profits and enhance corporate value on
an ongoing basis while respecting and balancing the various
interests of its shareholders and other diverse stakeholders. To
this end, we are continuing efforts to build a system thatenables efficient and sound corporate management throughcorporate governance.

1 Board of Directors

The Board of Directors meets, in principle, every month with Audit &Supervisory Board members in attendance to ensure compliancewith applicable laws and the Articles of Incorporation in the execution of business. In addition to its statutory duties, the role of theBoard of Directors is to make important decisions about basic
management policy, strategy, and other aspects of business execution. As of July 2023, the Board of Directors consists of 11 directors,
including 5 outside directors.

72

Governance

Balance, diversity, and size of the Board of Directors

50

40

30

20

10

0
Interim

18

20

15
10

11

11

11

13

2019

2020

2021

18

20

2022

2023

(Forecast)

Changes in the No. of stocks held andthe value of these holdings(FY)(Stocks)

Year-end(million yen)100

Global management

When deciding whether to take cross-shareholdings in other companies, we undertake careful examination to determine whether
such shareholdings will help to strengthen our relationship withbusiness partners, local community and other stakeholders, andwhether they will contribute toward the enhancement of ourcompany’s corporate value over the medium- to long-term. In
cases where, after such examination, we do acquire shares in othercompanies, every year we conduct close scrutiny for each individual stock to examine the appropriateness of the purpose for which
the stock is being held, and whether the benefits and risk of holding the stock are commensurate with the capital cost, etc. After asuitability review by the Board of Directors at its meeting held
December 28, 2022, the Board determined that all of the Company’s stock holdings were appropriate. However, from a financial strategy optimization standpoint, the Board decided todownsize certain of the Company’s holdings. By fiscal year-end,
the Company had sold all of its shares of six listed stocks, and a
portion of a further six stocks, for a total realized value of 4.816

Health management lecture hosted by outside director (July 2023)“So that I can be happy: solutions from the Code of Conduct for Well-being”

Policy on the distribution of profit

Our basic policy is to pay out steady dividends of excess earnings
to shareholders. At the same time, phase two of the Medium-TermBusiness Plan: STAGE30, which was launched in 2023, stipulates
that Zeon will maintain a minimum dividend payout ratio of 30%.
In addition, the Company will implement share buybacks
flexibly, after considering such factors as market conditions andcapital needs.
In principle, we distribute excess earnings twice annually,
through interim and year-end dividends. The general shareholders meeting decides the year-end dividend amount, and the Boardof Directors decides the interim dividend amount. Retained earnings are leveraged for proactive capital investments, developmentof innovative technologies, and production innovations.

Finance and accounting

Compliance and risk management

Sustainability and ESG

Kimiaki Tanaka

Chairman●

Tetsuya Toyoshima

President & CEO●

Kazuyoshi Matsuura

Director & Senior Corporate Officer●

Yoshiyuki Sone

Director & Senior Corporate Officer●

Yuichiro Konishi

Director & Senior Corporate Officer

Erisa Watanabe

Director & Corporate Oﬃcer

Takao Kitabata

Outside Director●

Tadanobu Nagumo

Outside Director●

Fumiaki Ikeno

Outside Director●

Miki Akiyama

Outside Director●●

Saeko Masumi

Outside Director●●

100,000

New business creation

Business overhaul

75

68,40880,29566,97475,00050,32350,000

50

86

87

81

83

79
25,00025

02019/3

No. of stocks held

Sales and marketing●

2020/32021/32022/32023/30

Value as recorded on the balance sheet

Research and Development

Production and SCM

●
●

●
●

●

73,087

●

●
●
●

●

●

●

●

●
●

●
●

●

Data

Zeon Group

Dividends per share in FY2023 are forecast to be 20 yen for
the interim dividend and 20 yen for the year-end dividend,
for a combined total of 40 yen (increase of +4 yen per sharecompared to the previous year).

Management Foundation

73

(yen)

Cross-shareholdings

Over the past few years, we have been working actively to promote women’s empowerment. There has been an increase in thenumber of female employees in manager or general manager
positions, and we are striving to expand the opportunities forfemale employees to fulfil their potential. As of March 31, 2023,
13.4% of our company’s employees were female, and 5.7% ofmanagers were female. In addition, one female director and executive officer who was promoted internally and two female outside
directors are in office.
Besides aiming to ensure that the share of recent graduates
recruited by the company each year who are women is maintained atleast 30%, and if possible higher than this, we are also taking ongoingsteps to build an environment conducive to the assignment, appointment and advancement of female employees, including areas suchas recruitment, cultivation, and overseas assignments, and to cultivate female employees’ ability to manage their own career development. We are aiming to increase the share of employees who are

Skills tablebillion yen. At the same time, due to an increase in stock prices
late in the fiscal year, the value of cross-held shares listed on
the consolidated balance sheet amounted to 80.295 billion yen(23.66% of consolidated net assets).
The FY2026 target for the second phase of the Medium-TermBusiness Plan: STAGE30 is to reduce cross shareholdings to below
15% of consolidated net assets. As such, we plan to sell additionalcross-shareholdings to reach this target.
When making decisions regarding the exercise of voting
rights in companies in which we have cross-shareholdings, we
make such decisions based on a perspective that emphasizes
enhancing the corporate value of the investee company over the
medium- to long-term.

Change in dividends per share, and forecast for FY2023

Business Strategy

Appointment of women and foreign-nationals tomanagement positions

female to around 20%, and increase the share of managers who arefemale to around 20%, by 2030, and we will be working to increase
the number of female employees who can play a central role inmanagerial decision-making in the future. In addition, in thesecond phase of the Medium-Term Business Plan: STAGE30, we
have established a quantitative target of 12% female managers by
the end of FY2026.
We also strive to hire nationals of diverse citizenship, including
some recruited from outside Japan. As of March 31, 2023, we had
29 employees, five of whom were in management positions.

Value Creation Story

The Board of Directors comprises a diverse range of directors withdifferent backgrounds of knowledge, experience, expertise, and soon, and the number of directors is limited to 15 in accordance with
the Articles of Incorporation from the perspective of maintaining
an appropriate size to ensure thorough deliberations and prompt
and reasonable decision-making as an organizational body.
In order to appropriately reflect in the company’s management policies, the opinions of persons with extensive experienceand insight, such as outside corporate managers and persons
with administrative experience, and to ensure the effectiveness of
independent and objective management supervision by the Boardof Directors, Zeon appoints several independent outside directors
who are not involved in the execution of business.
The table below shows the combination of skills (the so-calledskills matrix) the Board of Directors should possess given Zeon’s
management strategy. It also shows specific skills (maximum
three) that each director possesses and that Zeon expects him or
her to demonstrate.

●

Integrated Report 2023

74

GovernanceDirector and officer compensation

Compensation system
Directors and officers

Compensation structureInternal Directors

Cash compensation (fixed), cash compensation(performance-linked), stock compensation (fixed),
stock compensation (performance-linked)

Corporate Officers

Cash compensation (fixed), cash compensation(performance-linked), stock compensation(performance-linked)

Outside Director

Fixed-amount cash compensation

Risk Management
Risk management system

The Risk Management Committee promotes Zeon’s risk management.
Activities to prevent legal violations and ensure legal complianceare conducted under the Compliance Committee. The Information
Management Committee promotes the appropriate managementof information from when it is received to when it is destroyed.
CSR Conference

Directors and officers

Compensation structureInternal Directors(7 directors)

251 million yen
Breakdown: Cash compensation (fixed), 63 million
yen; cash compensation (performance-linked),
157 million yen; stock compensation (restricted),
31 million yen

External Officers(6 officers)

66 million yen

Recognizing the need on business continuity to mitigate the impactof damage from disasters such as earthquakes and severe storm
and flood damage, we have formulated a Business Continuity Plan
(BCP), and we implement training in order to enhance its effectiveness. During FY2022, emergency drills conducted included one
whole-company emergency headquarters drill, one whole-company
emergency headquarters secretariat (CMT) drill, and two manufacturing plant drills.
In addition, individual business divisions and factories haveformulated their own BCPs, and have put in place systems tofacilitate a rapid response in the event of an emergency. We arealso making necessary adjustments through Business Continuity
Management (BCM) on an ongoing basis, and implementing
unique training.

Risk prevention and resolution
Crisis management

Compliance Committee

Prevention of law violations
Education and training in compliance with laws
Antitrust Law Regulatory Subcommittee
Export Security Control Subcommittee
Corporate Governance Subcommittee

Information Management Committee
Appropriate management of information

Compensation category and indicators
Category

Indicator
Financial
indicators

Cash compensation(performance-linked)

Performance vs. target, fiscal year

Business division sales,
operating profit ratio*1

Non-financial
indicators

Divisional and individual challenges

Performance vs. division targets relating to the Medium-TermBusiness Plan

Financial
indicators

Group-wide sales, operating profit, andGroup-wide ROIC

Performance vs. targets, final fiscal year of each phase of theMedium-Term Business Plan*3

Non-financial
indicators

Medium-Term Business Plan ESG targets*2

Number of targets reached, final fiscal year of each phase of
the Medium-Term Business Plan*3*1 Applies only to executive business division general managers. For growth businesses and new businesses, the sole indicator is divisional sales.
*2 CO2 reductions, engagement survey items, female manager ratio, cross-shareholdings to net assets ratio, etc.
*3 E
 xecutive officers are allocated a standard number of points for each phase of the Medium-Term Business Plan. After each phase is completed, the relevant points will be calculated bymultiplying by an evaluation factor reflecting target achievement or number of units achieved. The weighting of financial and non-financial indicators in stock compensation (performance-linked) is set at 8:2.

We have put in place an internal reporting system, in order tocollect information about latent risks as early as possible so thatappropriate action can be taken. The channels for reportingrisk-related information are not limited to internal channels suchas reporting to one’s supervisor or directly to the Risk Management Committee. We have also established a Compliance Hotline
with an external lawyer as a contact window (see items 1 to 3 in
the figure on the right).
( 1 – 3 below)

The Cyber Security Committee reports directly to the President.
The Committee oversees planned cybersecurity enhancements
and provides prompt emergency response. It is also responsible
for managing electronic information security. (For structure diagram, see P.71)
In addition, a Computer Security Incident Response Team(CSIRT) within the Committee ensures prompt response in theevent of security incidents.

Internal reporting flowchart
Notification and reporting
Feedback on investigation results

1Superior

Management Foundation

Stock compensation(performance-linked)

Structuring our cybersecurity system

Internal reporting system
Group-wide sales and operating profit ratio

4

Business Strategy

Internal Audit &Supervisory Board
53 million yen
Members (2 members)

Number of internal reports in FY2022

BCP formulation and implementation ofrelated training

Risk Management Committee

FY2022 compensation (former compensation system)

The Risk Management Committee investigates the facts ofreports that are made and responds as appropriate, such as by
instructing the internal organization to implement countermeasures based on the results of the investigation.

Value Creation Story

The Company recently updated its executive compensation system
to more effectively incentivize the medium- to long-term creationand enhancement of corporate value. For internal directors andexecutive officers, we expanded the performance-linked share of
total compensation. We also introduced the Board Benefit Trust(BBT-RS), a performance-linked stock compensation plan, to clarify
the link between compensation and Zeon’s sales performance andstock value. These steps are intended to raise awareness of theneed to contribute to the enhancement of medium- to long-term
performance and corporate value.
Evaluation indicators for performance-linked cash and stockcompensation under the updated executive compensation system
are summarized below. Though directors remain accountable forshort-term performance, the indicators are tied closely to Medium-Term Business Plan goals. This evaluation system will increase
the likelihood of creating and enhancing corporate value over the
medium to long term.

1
Active dialogue with shareholders and investors

75

Zeon Group2
Whistle-blower
Discovery of risks
Discovery of compliance violations

Risk Management Committee

3

3
External lawyer reporting line

Compliance Hotline

 eview of facts andR
implementation ofcountermeasures

Receive reports
Record facts
Notify results

Integrated Report 2023

Data

The IR/SR Office, a specialized department that was established in
2021, is responsible for shareholder and investor communications.
The IR & SR office is not subordinate to any other division, andreports directly to the head of the company’s Administrative Headquarters. This enables it to deliver capital market input directly to
management, where it can be incorporated responsively into
management measures. This system also enables the timely,
accurate and unbiased transmission of information to market
participants in relation to the results of discussion regarding mat-ters such as managerial measures.
We strive continuously to extend the scope of dialoguebeyond one-on-one meetings by holding quarterly financial briefings for investors and small meetings for institutional investors,
disclosing IR information on the website, and participating in
corporate information sessions for individual investors.
At the general shareholders meeting held in June 2023,
besides providing a live video feed for those shareholders who
were unable to be present in person, we also provided answers toquestions that had been raised prior to the meeting.

76

Zeon Corporation (consolidated) Data for the Past 11 Years
Fiscal year: April 1 to March 31 of the following year

2012

2013

2014

2015

2016

2017

2018

2019

2020

2022

2021

Annual performance¥ 296,427¥ 307,524¥ 295,647¥ 287,624¥ 332,682¥ 337,499¥ 321,966¥ 301,961¥ 361,730¥ 388,614

Operating income

23,69629,901

28,24529,85630,76738,88133,147

26,10433,40844,432

27,179Adjusted net income before tax

23,42332,52829,791

26,26530,92824,85327,04427,48038,15846,226

14,467

Net income attributable to owners of the parent company

14,75019,65019,08018,07923,152

13,056

18,45820,201

27,71633,413

10,569

Capital investment

23,48927,111

28,51627,65022,122

14,568

14,64029,08819,64522,902

34,045

Depreciation

18,122

17,06819,43920,904

20,431

20,53918,78017,44818,154

21,46920,382R&D expenses

11,895

12,661

13,627

14,14813,233

15,103

16,48015,274

14,25815,86917,580Cash flow from operations

33,061

36,39634,00647,59949,042

54,46240,39328,43056,08033,14014,358Cash flow from investment(24,858)(31,513)(26,767)(34,847)(29,121)(14,951)(21,426)(24,570)(30,239)(26,436)(28,899)

Cash flow from financial activities(10,006)(10,105)(12,019)(9,010)(15,834)(11,625)(23,575)(8,276)(8,259)(11,883)(2,820)Financial position
Total assets

million yen¥ 350,508¥ 370,872¥ 399,512¥ 384,753¥ 411,415¥ 443,917¥ 424,937¥ 405,131¥ 448,821¥ 484,660¥ 522,868

Tangible fixed assets

108,937

122,721

134,227

138,526

138,058

115,559

102,323

114,791

117,579

118,299

113,924

Interest-bearing debt

66,48365,56558,88957,064

44,677

38,57324,12520,96018,96018,96027,960Net assets

162,057

181,414215,631

215,586

244,634

259,940

259,156

260,358

298,246

321,836

339,308

Net income per share

yen

¥

63.81

¥

85.15

¥

84.13

¥

79.86

¥

104.31

¥

58.81

¥

84.06

¥

92.44

¥

126.74¥ 153.22¥

49.94

Net assets per share

685.64783.11

931.34949.91

1,082.02

1,158.30

1,172.40

1,176.87

1,349.89

1,487.33

1,591.79

Dividends per share

12

13

14

15

16

17

19

21

22

28

36

Return on assets (ROA)*

7.6%

9.0%

8.1%

8.2%

8.0%

9.6%

8.4%

6.9%

9.1%

10.6%

6.2%

Return on equity (ROE)

10.1%

11.7%

9.8%

8.6%

10.3%

5.3%

7.2%

7.9%

10.0%

10.9%

3.2%

Return on sales (ROS)

9.4%

10.1%

9.2%

10.1%

10.7%

11.7%

9.8%

8.1%

11.1%

12.3%

7.0%

Management Foundation

Per-share data

Business Strategy¥ 250,763

Value Creation Story

Net sales

million yen

Key indicators* ROA is normally defined as net income divided by total assets, but as the numerator varies from company to company, a note has been added for each company. As Zeon discloses Returnon Assets (ROA) in its financial flash reports, this has been followed for this report. If the method of disclosure is changed in the financial flash reports in the future, the definition used here
will be revised accordingly.

Data

77

Zeon Group

Integrated Report 2023

78

Financial Data
Consolidated Balance Sheets

Consolidated Statements of Income and Consolidated Statements ofComprehensive Income
million yen/FY

2018

2019

2020

million yen/FY

2022

2021

Current assets

Net sales

2018

2019

2020

2021

2022

¥ 337,499¥ 321,966¥ 301,961¥ 361,730¥ 388,614¥ 37,534¥ 32,029¥ 51,970¥ 47,271¥ 30,082

Cost of sales

240,757

230,055

204,409

241,371

278,971

Operating receivables

78,352

71,33275,68882,49883,594Gross profit

96,742

91,911

97,552

120,358

109,643

Inventories

71,12573,20367,354

93,076

127,452

Other current assets

40,22737,88338,23652,10255,503

Selling, general and administrative
expenses

63,59565,80764,14475,92782,464¥ 227,238¥ 214,447¥ 233,248¥ 274,947¥ 296,631

Operating income

33,147

26,10433,40844,432

27,179Non-operating income

3,894

3,813

6,099

5,670

5,172

Non-operating expenses

723

1,173

839

634

958

36,31928,744

38,66849,46831,393

Cash and bank deposits

Total current assets
Fixed assets

Ordinary income¥ 114,791¥ 117,579¥ 118,299¥ 113,924

Intangible fixed assets

3,197

3,669

3,293

3,249

4,442

Extraordinary gains

22

5

108

7

3,077

Investment securities

81,103

62,11886,20180,729100,113Extraordinary losses

9,297

1,268

618

3,250

20,004

Other fixed assets

11,077

10,106

8,500

7,436

7,758

Income before income taxes

27,04427,48038,15846,226

14,467

Total fixed assets¥ 197,700¥ 190,684¥ 215,573¥ 209,713¥ 226,237

Income taxes

8,247

7,130

10,27912,5203,858

Net income

18,797

20,35027,88033,706

10,609Total assets¥ 424,937

338

148

164

293

39

18,45820,201

27,71633,413

10,569Valuation difference on
available-for-sale securities(9,654)(14,091)

15,893(4,734)

10,353Foreign currency translation
adjustments(1,343)(154)(1,486)

3,749

7,085

424

(295)

(439)

1,921

892

(10,573)(14,540)

13,968936

18,330

8,224

5,810

41,84834,641

28,939Comprehensive income attributable toowners of the parent company

7,958

5,571

41,77734,296

28,622Comprehensive income attributable tonon-controlling interests

266

239

71

346

317

¥ 405,131¥ 448,821¥ 484,660¥ 522,868

Net income attributable tonon-controlling interests
Net income attributable toowners of the parent company

Liabilities and net assets

Other comprehensive income
million yen/FY

2018

2019

2020

2022

2021

¥ 82,414¥ 65,691¥ 65,921¥ 82,994¥ 86,781

Bonds and loans payable

12,125

10,9608,960

18,96027,960

Other current liabilities

35,50035,75938,972

36,69945,846¥ 130,039¥ 112,410¥ 113,853¥ 138,653¥ 160,587

Total current liabilities
Non-current liabilities¥ 10,000

23,742

22,363

26,722

24,172

22,973¥ 35,742¥ 32,363¥ 36,722¥ 24,172¥ 22,973¥ 24,211¥ 24,211¥ 24,211¥ 24,211¥ 24,211

Capital surplus

19,24019,252

19,15019,162

19,137Retained earnings

204,767

220,379

244,301

272,679

268,363

Other

10,938△ 3,484

10,584

5,784

27,597

Total net assets¥ 259,156¥ 260,358¥ 298,246¥ 321,836¥ 339,308

Total liabilities and net assets¥ 424,937¥ 405,131¥ 448,821¥ 484,660¥ 522,868

Total non-current liabilities

00¥ 10,000

Other non-current liabilities¥¥¥ 12,000

Bonds and borrowings

Other
Total other comprehensive income
Comprehensive income(Breakdown)Management Foundation

Current liabilities
Operating payables

Business Strategy¥ 102,323

Tangible fixed assets

Value Creation Story

AssetsNet assets
Capital stock

Zeon Group

Data

79

Integrated Report 2023

80

Financial Data

Consolidated Statements of Cash Flows

Consolidated Statements of Changes in Net Assets

2019

2020

CapitalBalance at beginning of period
Balance at end of period

2020

2022

2021

¥

24,211¥

24,211¥

24,211¥

24,211

Net income¥

24,211¥

24,211¥

24,211¥

24,211¥

24,211

Depreciation

18,78017,44818,154

21,46920,382Finance income and expenses(2,283)(2,875)(2,570)(2,736)(3,486)

Changes in assets and liabilities(8,628)(11,988)1,281(12,457)(27,601)

Impairment losses

8,606

0

0

2,069

19,390

Other

3,999

6,714

1,917

(13,610)

1,610

Subtotal

47,51836,77956,94040,961

24,762

Interest and dividends income

2,561

2,997

2,614

2,954

3,569

Interest expenses paid

(219)

(132)

(127)

(133)

(99)

(10,387)(11,451)(5,357)(10,691)(13,896)

920

238

2,010

50

21

¥

19,240¥19,240¥19,252¥

19,150¥19,162

0

(100)

0

0

Transfer to capital surplus fromretained earnings

0

0

0

0

7,869

Purchase and disposal of treasury stock

0

12

(2)

12

(5)

Retirement of treasury stock

0

0

0

0

(7,889)¥19,240¥19,252¥

19,150¥19,162¥

19,137Retained earnings¥ 190,273¥ 204,767¥ 220,379¥ 244,301¥ 272,679

Cumulative effect of change inaccounting policy

0

0

0

(343)

0

Dividend paid

(3,965)(4,589)(4,592)(5,250)(7,016)

Net income

18,45820,201

27,71633,413

10,569

Increase/decrease due to merger

0

0

(1)

103

0

Transfer to capital surplus fromretained earnings

0

0

0

0

(7,869)Change of scope of consolidation

0

0

797

457

0

¥ 204,767¥ 220,379¥ 244,301¥ 272,679¥ 268,363

Income taxes paid
Other
Cash flows from operating activities

27,044¥27,480¥38,158¥46,226¥

14,467¥40,393¥28,430¥56,080¥33,140¥14,358¥(12,774)¥(23,135)¥(24,033)¥(24,293)¥(27,309)

Cash flows from investing activities
Payments for purchase/disposal of
fixed assets
Payments for purchase/disposal ofinvestments and other assets(7,606)(1,987)(1,790)(1,921)(1,699)Payments for collection of loans
and advances

187

(99)

(2,266)(1,208)(723)

Net increase/decrease in time deposits

(859)

947

(2,045)

1,077

1,192

Other

(373)

(295)

(106)

(90)

(360)

Cash flows from investing activities¥(21,426)¥(24,570)¥(30,239)¥(26,436)¥(28,899)¥(14,378)¥(3,165)¥(2,000)

¥

0

¥

9,000

Cash flows from financing activities
Treasury stock
Balance at beginning of period¥

Purchase and disposal of treasury stock
Retirement of treasury stock(12,245)¥(17,238)¥(17,181)¥(17,017)¥(23,000)

Proceeds from and repayments ofbonds and borrowings
Cash dividends paid

(4,993)57

163(5,982)(3,914)

0

0

0

0

7,889

Balance at end of period¥(17,238)

Total shareholders’ equity¥ 230,981¥(17,181)¥ 246,662¥(17,017)¥ 270,644¥(23,000)¥ 293,053¥(19,024)¥ 292,688

25,187

10,556

24,62525,57043,623

Stock acquisition rights

296

283

141

126

88

Non-controlling interests

2,693

2,858

2,836

3,086

2,910

¥ 259,156¥ 260,358¥ 298,246¥ 321,836¥ 339,308

Total net assets

Payments for purchase of treasury stock(5,250)(7,013)0(149)(1,193)0

0(5,001)(1)

0(6,011)(3,990)

(237)

(374)

(474)

(622)

(817)

(8,276)(8,259)(11,883)(2,820)

(338)

(232)

320

1,494

1,111

Net increase/decrease in cash
and cash equivalents(4,946)(4,648)17,902(3,685)(16,251)

Cash and cash equivalents at
beginning of period

39,791

34,84630,19848,152

44,521

0

0

52

53

0

Cash flows from financing activities
Effect of exchange rate changes on cash
and cash equivalents

Cash and cash equivalents at end of period

Zeon Group

(4,592)(23,575)

Other

Other increase/decrease81(4,587)¥

34,846¥30,198¥48,152¥

44,521¥

Data

Total accumulated othercomprehensive income

Payments for purchases of shares ofsubsidiaries(3,959)Management Foundation

Balance at beginning of period¥Business Strategy

24,2110

Balance at end of period

2019

¥

Change in treasury stock of parent
arising from transactions with
non-controlling shareholders

Balance at end of period

2018

Cash flows from operating activities

Capital surplus
Balance at beginning of period

million yen/FY

2022

2021

Value Creation Story

million yen/FY

2018

28,270Integrated Report 2023

82

Inquiries: Corporate Sustainability Department, Zeon Corporation
Shin Marunouchi Center Building, 1-6-2 Marunouchi,
Chiyoda-ku, Tokyo 100-8246, Japan
Tel: +81-3-3216-0603 Fax: +81-3-3216-0604

Online disclosure by Zeon Corporation
Websitehttps://www.zeon.co.jp/en/

Company Information
https://www.zeon.co.jp/en/company/
Corporate profile, Group information, etc.
Investor Relations
https://www.zeon.co.jp/en/ir/
Integrated Report, financial data, factbooks, etc.
Sustainability https://www.zeon.co.jp/en/csr/
Sustainability Report, etc.

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supporting sound forest management.

Published: January 2024