VALQUA GROUP

Sustainability Report

CONTENTS
Corporate Philosophy

Special Feature 1. Promoting human resources diversity

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Contents, Editorial Policy

THE VALQUA WAY

Top Message
VALQUA’s Relationship to Society
Philosophy and Policy on SDGs
CSR Management

The VALQUA GROUP’s Corporate Philosophy – “THE VALQUA WAY” – consists of the Core Principle of“From VALQUA KOREA”:
How a local staff member meetsthe challenges“Value & Quality” from which the company name is derived, together with the “4 Corporate Principles”
and “10 Action Principles” that aid employee understanding and facilitate implementation.
This deep understanding and implementation of THE VALQUA WAY forms the foundation of
the VALQUA GROUP’s corporate social responsibility (CSR).

Special Feature 2. Visionary Management

In addition, the introduction of the 3 CSR Concepts based on “THE VALQUA WAY” in 2007 has made it

Editorial PolicyCorePrinciple&

Quality

Reporting Period

Create value andimprove quality

Four
Corporate
Principles

Ten
ActionPrinciples

This Sustainability Report is issued once a year to communicate
our basic approach to ensuring the sustained growth of the
VALQUA GROUP, and the efforts we have made to tackle
materiality in CSR activity, to all of our stakeholders. Some of thedata is disclosed only on our website. URLs where this content
will be posted are included in this Sustainability Report.

Value

April 1, 2020 to March 31, 2021
Some of the reports include content from before or after theabove period. The information, such as the organizational chart,
policies, and standards, are current as of June 2021.

- For the Benefit of Society- With Fairness- For Stakeholders Worldwide- Through Creative Technology

VALQUA, LTD. and its 18 consolidated subsidiaries(Hiring rates for persons with disabilities and percentage of womenin management positions are figures for VALQUA, LTD. alone.)

Timing of Publication
Issued in June 2021 (last issued in July 2020)

Reporting MediaBrochure/
PDF
editionCSR Concepts

Collaboration
with Stakeholders

Superior Quality

Rule First

Pursuing advanced tie-ups
with all stakeholders

Establishing world-classdifferentiated technologies
and quality.

Attaching importance tocompliance as a memberof society

VALQUA GROUP Sustainability Report 2021

Summarizes high-priority endeavors in theform of an annual report.
“CSR Report”
https://www.valqua.co.jp/
social/report/(Japanese version website)
Exhaustive posting of latest information
and additional information on our website.
Updated frequently.

Web
editionCorporate Governance
01. Spread of the Corporate Philosophy
02. Strengthening of corporate governance
03. Promotion of Group’s global activities
04. Dialog with stakeholders

16
17
18
18

Compliance
05. Prevention of corruption and bribery
06. Legal compliance
07. Compliance with environment-related laws andordinances, etc.

19
20
21

Environment

Scope

1. Run a business that contributes to society
2. Be an inspiration to the customers
3. Hold respect for individuality and personality
4. Earn the trust of the shareholders
5. Exist with harmony to the community
6. Always treat health and safety with top priority
7. Respect compliance and work with full honesty
8. Aim for environmentally friendly production
9. Conserve and utilize resources effectively
10. “Learn and grow” with a spirit to face challenges

14

In the present environment of extremechange, visionary management ismore important than everpossible for us to engage in more practical activity oriented toward solving various social problems.

02

Materiality in CSR activities

02
03
04
06
08
09
10

Corporate Philosophy“Technical Information”,“Investor Relations”, “Company
Information”, and other pages
https://www.valqua.co.jp/(Japanese version website)

08. Prevention and reduction of leakage ofenvironmentally hazardous substances

22

09. Reduction of environmentally hazardous substancesin business

22

Safety and Health
10. Occupational health and safety24

Supply Chain Management25

11. CSR procurement
Human Resources and Human Rights
12. Ensuring of the diversity of human resources
13. Respect for human rights
14. Human resources development

26
27
27

Customer Satisfaction
15. Improvement of quality and customers’ safety andpeace of mind

28

Community
16. Promotion of sports, culture, and the arts
Coexistence with local community
Company Overview, Map of BasesVALQUA GROUP Sustainability Report 2021

29
30

03

Top Message

Our Corporate Philosophy of “THE VALQUA WAY”
aims for healthy, sustained growth and a sustainable society

Introduction
I would like to begin by expressing my sympathies to all of you
who have been affected by the COVID-19 pandemic. Let us offer aprayer for the repose of the souls of the many who lost their lives
to COVID-19.
The worldwide spread of COVID-19 in 2020 not only brought
great changes to our lives but also had a major impact on
industries such as automobiles, transport & logistics, aviation, retail,and restaurants, as well as on the economy. Our corporate group
moved swiftly to minimize the impact on our business results inaccordance with the 3-year mid-term management plan “New
Frontier 2022 (NF2022)” which took effect in 2020 under this new
business environment. While taking infection control measures toensure the safety of our employees, we inaugurated a remote work
promotion project to promote “work style reform”, and we havedevoted much effort to DX through the extensive use of IoT anddigital information.
In addition to describing these efforts, this report provides
expanded information on sustainability under the guiding
principle of “Linking corporate activity to SDGs”, so please be sure
to read on.

Corporate Image we aim to become in the coming
100th anniversary
A Challenging Company that
Challenges the Future and the Unknown—To contribute to the richness of human race and global environment—

1. Endless pursuit and monitoring of growth strategy
2. Strengthening management foundation that will solidify
company growth
3. Active engagement in “environment, society, and corporate
governance” in becoming a better global citizen

Business objectives to meet by term ending March 2027
- Consolidated sales of 80 billion yen- Consolidated ROE of 15%

Toward our 100th year in business (2027)
and SDGs target year (2030) as“a challenging company that challenges
the future and the unknown”
The VALQUA GROUP has long promoted visionary management
centered on our Corporate Philosophy, “THE VALQUA WAY”.
To firmly foster a corporate culture that reflects the “Value &Quality” that is our Core Principle and the origin of our corporate
name, we ensure that “THE VALQUA WAY” permeates all of ourbusiness operations by having all employees break it down to thepersonal level in “MY VALQUA WAY” and make annual reports on
how they put it into practice in their duties.
In April of last year, we defined the goal for our 100th year inbusiness as being “a challenging company that challenges the
future and the unknown” to contribute to the richness of humanrace and global environment through business activities. At thefoundation of these efforts is “THE VALQUA WAY”, a value systemthat is consonant with the aims of the Sustainable Development
Goals (SDGs).
In order to link corporate activities to the SDGs in the current
fiscal year, we have intensified our efforts to contribute to the
SDGs with a 3-pronged approach of “solving social problems
through our main business (H&S) (offense)”, “strengthening ourmanagement foundation (ESG) (defense)”, and “activities that
contribute to society”.
One way that we solve social problems through our main
business is with products and services that show consideration for
the environment. We strengthen our management foundation byemphasizing governance, eco-friendly business practices, bettersupply chain management, and human resource cultivation, andwe contribute to society by supporting ballroom dancing and“Local Community Thanksgiving Days”.
In its long history, the VALQUA GROUP has confronted various
crises, including the postwar chaos, the collapse of the Japanese
bubble economy, and the 2008 financial crisis, but we havesurmounted all of them through the pioneering spirit that is
VALQUA’s strength. As we approach our 100th year in business(2027), great changes are being forced upon society, but we aim tocontribute to the fulfillment of the SDGs and the realization of asustainable society in order to create new added value andpromote further growth from a neutral perspective free ofpreconceptions, under the pioneering spirit of “THE VALQUA WAY”
that has been cultivated since our founding.

Powering corporate transformation
by adding “HR cultivation” to our materiality matrix
The Valqua Group positions “human resources” as its mostimportant asset, and the “Valqua Group Basic Policy on Human
Rights” promotes diversity and the cultivation of local humanresources of many nationalities. In NF2022, “HR cultivation” wasadded to our materiality matrix, and in order to “accelerate boldinvestment in HR cultivation” and “execute dynamic measures thatlead to the revitalization of local human resources”, we aredeveloping the personnel who will shoulder the coremanagement of our bases in the near future through CEO cramschools, early selection training, and overseas manager-classtraining, etc.
We have also begun making efforts to enhance engagement
among all of our Group’s employees. We expect that stronger HR
cultivation and enhanced engagement will together lead to
improvements in work productivity and the power to bring aboutchange through CX*.
* CX: abbreviation for corporate transformation.

In Closing
One of the VALQUA GROUP’s Corporate Principles is “For the Benefitof Society”, and one of our CSR Concepts is “Collaboration with
Stakeholders”. Thanks to the support of all of our stakeholders thus
far, VALQUA has grown into a group that does business in 8
countries and has many employees that actively play a part inpromoting these goals.
In order to realize healthy, sustainable growth as we movebeyond our 100th year in business and on into the next era, theGroup will act as one to proceed steadily toward our goals ofcontributing to the richness of human race and global
environment, together with all of our stakeholders.
We ask for your continued understanding and support.
June 2021

Toshikazu Takisawa
VALQUA GROUP Representative
Representative Director, Chairman & CEO
VALQUA, LTD.

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VALQUA GROUP Sustainability Report 2021

VALQUA GROUP Sustainability Report 2021

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M Semiconductor plants

VALQUA with Society

VALQUA’s Relationshipto Society

N Transformer
Processed fluorocarbon resin
products
The high electrical insulation
performance of these products is used
to good advantage in devices thateliminate the effect of lightning andcontrol the amount of power transfers.

Our “products & services” play an active role inall sorts of places

Reclaimed silicon wafer

High-performance elastomer

VALQUA is contributing to the reduction of theenvironmental burden by using its proprietary knowhow
to recycle the silicon wafers that have been used tocheck the operation of semiconductor manufacturing
equipment by polishing and cleaning them so thatthey can be provided to customers like new products.

Products surface-treated with a special low-impurity
rubber maintain the clean environment that is
indispensable to semiconductor manufacture.

Bonded gate seal

Fluorocarbon resin lined tank

These are high performance elastomer and metal seals
with a unitary structure. With high sealability, they areused in transfer gate valves for silicon wafers.

Liquid chemical tanks with inner linings consisting offluorocarbon resin sheets are indispensable in thestorage and transport of the ultra-high purity chemicals
used in semiconductor manufacture.

A Rockets and satellites

L Mobile phone base stations and vehicles

Metal hollow O-rings
These are high performance gaskets
that can even prevent leakage in outerspace. They are used not only in rockets
and satellites, but also in equipmentthat requires high temperatures, highpressure, and high vacuum.

Fluorocarbon resin materialA

Substrate material with the outstanding
electrical characteristics and weather
resistance of polytetrafluoroethylene(PTFE) contributes to safe, rapid,
high-capacity data communication in
antennas and self-driving vehicles.

M

B Factories and offices

K Solar power generationN

LED illumination
These products have the characteristics
of lower power consumption and longlife. The extensive lineup can beapplied to a wide variety of needs, andthey contribute to reducing theenvironmental burden.

Photovoltaic power generation
business

B

The Mega Solar power generation facilityon the premises of KYUSHU VALQUA
produces clean energy daily andcontributes to the community and thepreservation of the global environment.

C

C Medical institutions

J Construction machinery

L

Fluorocarbon resin skived tape
These products use advanced
technology to cut fluorocarbon resin.
Exceptionally airtight and slid able, they
are used for coating syringe pistons, etc.

K

O-ring
These are typical static and dynamic
seal products. They accommodate awide range of industrial needs thanks
to the use of rubber material well
suited to the application.

J
D

D Automobiles

Thrust plate
When inserted into the gap in hinged
moving parts of excavators, etc., thrust
plates play the roles such as adjusting
the gap, preventing squeaking, andpreventing galling.

Gasket for automatictransmission (AT)
These are the gaskets used in thehydraulic control device (valve body)that controls the AT. By sealing the oil
within the device, they make possible
smooth, responsive gear changes.

F
H

E

I

E Ships and vessels
Gland packing
These are products that prevent leakage
from around the working axis, and they
are used mainly in rotary pumps andvalves that fulfill the function of
conveying fluids or blocking their flow.

With high electrical insulation andoutstanding processability, this tapecontributes to miniaturization and theimprovement of performance intelecommunications equipment.

Seal Training Center (STC)G

STC share VALQUA’s seal engineering technology with customers,
connecting it to safe plant operation and reliable equipment
operation. STC also provide a venue for human resources
development, with classroom lectures on the selection of sealmaterials and appropriate methods of use, as well as experiencebased training facilities for practical training using a simulation ofpipe flanges in actual factory settings.

All-purpose gaskets with performancethat can accommodate a wide range of
fluids. They play an active role in ships,
vessels, and plants as well as all sorts ofother scenes, such as housing facilities.

F Steel production plants

H&S Demo Car

G Chemical plants

High performance sheet gasket

Spiral wound gasket

Low friction seal (LFR SEAL®)With far better performance thanconventional products, these sheet gaskets
are widely used, particularly in plantsthat require high temperature resistance.

These metal-reinforced products support
safety operations in plants operated athigh temperature and pressure.

This seal material has outstanding slid
ability and was developed for use in therotating and oscillating parts of various
kinds of production equipment.

VALQUA GROUP Sustainability Report 2021

Fluorocarbon resin tape

H Seal engineering services

Joint sheet gasket

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I Portable media

Fluorocarbon resin lined ball valve

Adoption of highly chemical-resistantfluorocarbon resin in all parts that comeinto contact with fluids gives thesevalves broad applicability to fluid control.

Fluorocarbon resin lined productFluorocarbon-resin envelop gaskets

These pipes use the characteristics offluorocarbon resins – chemical resistance andsurface smoothness – to ensure the purity of
the fluids that pass through them.

Made of highly chemical resistant material,
these gaskets prevent liquid chemicals andgasses from leaking through the joints ofpiping and equipment.

Demonstrations and hands-on experience introduce customers to
products and services that we have newly begun to develop or handle.

VALQUA GROUP Sustainability Report 2021

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Philosophy and Policy on SDGs

CSR Management

As a global citizen, the VALQUA GROUP works toward the solution of social problems throughits corporate activities and contributes to the achievement of the SDGs and a sustainable society.

The “VALQUA GROUP CSR Promotion Committee” has been set up to make proactive efforts to solve
various social problems as a global citizen. This Committee monitors the progress of action onmateriality and provides the overall structure for the continuous implementation of CSR activities.

Efforts to Contribute to SDGs
Since 2007, the VALQUA GROUP has engaged in CSR activities tosolve various social problems on the basis of “THE VALQUA WAY”.
This has included reorganizing our materiality matrix in FY 2019
to incorporate a global perspective reflecting the Sustainable
Development Goals (SDGs) adopted by the United Nations in 2015.
In addition, we established active engagement in “environment,
society, and corporate governance” in becoming a better global

citizen as one of the basic policies for meeting the goal for our
100th year in business, set forth in April 2020: a challenging
company that challenges the future and the unknown tocontribute to the richness of human race and global environment.
To improve the effectiveness of our contributions to theSDGs, we are promoting a 3-pronged approach that combines“solving social problems through our main business (H&S) (offense)”and “strengthening our management foundation (ESG) (defense)”,with “activities that contribute to society”.

CSR Philosophy
The VALQUA GROUP considers CSR to be synonymous with putting
the corporate philosophy of “THE VALQUA WAY” into practice, andwith our corporate activities themselves.
Since 2007 we have engaged in more practical activity
oriented toward meeting the challenges of increasingly diverse
social problems under the 3 CSR Concepts of “Collaboration with
Stakeholders”, “Superior Quality”, and “Rules First”.

For a sustainable society
OffenseSolving social problems through our core H&S• Efforts to solve social problems through products and services

DefenseActivities that contribute to society• Support for ballroom dancing• Activities that contribute to the local community

Under the Corporate Philosophy of “THE VALQUA WAY”, the VALQUAGROUP continues to meet challenges every day as it aims for
unflagging growth.
To contribute more effectively to the SDGs as a reflectionof a corporate image we aim to become in the coming 100th
anniversary, we have linked the CSR priorities of corporate
governance, compliance, environment, supply chain management,
safety and health, HR and human rights, customer satisfaction, andcommunity to the SDGs and have been promoting a 3-pronged
approach of “solving social problems through our main business(H&S) (offense)”, “strengthening our management foundation (ESG)(defense)”, and “activities that contribute to society” in FY 2020.
Acknowledging the importance of dialog with customers,
shareholders, business partners, employees, the local community,and other stakeholders, we will go on creating corporate value andcontributing to a sustainable society.

Organization for promoting CSR
The “CSR Council” established by the VALQUA GROUP as a systemfor cross-organization discussion in 2007 was changed to the formof the “VALQUA GROUP CSR Promotion Committee” in FY 2019 tostrengthen our CSR activities from a business perspective.
The “VALQUA GROUP CSR Promotion Committee” ispositioned as an important deliberative body for discussing the
CSR activities of the entire Group. Chaired by a senior managing
director, it strengthens cooperation within the Group by meeting
regularly every half-year and as otherwise necessary to hearprogress reports on the CSR activities promoted by each divisionand exchange opinions, etc. The results are reported every half-yearat the managing directors meeting.

Strengthening management foundation (ESG)CSR promotion organization chart

Representative Director,
Chairman & CEO• Strengthening of governance, eco-friendly business, supply
chain management, and HR cultivation, etc.

Managing Directors
Meeting

VALQUA GROUPCSR Promotion Committee

Sustainable Development Goals (SDGs)
The Sustainable Development Goals (SDGs) were adopted by the United Nations in 2015 as
goals that should be achieved by 2030 in order to solve the problems of international society.
They consist of 17 goals and 169 targets toward which not only governments but also citizens
and private corporations are expected to contribute.

Corporate
GovernanceGroup

CommunityGroup

Procurement
Group

ComplianceGroup

EnvironmentGroup

CSR Secretariat

Safety and
Health Group

Human Rights
and Labor
Practices Group

Quality andCustomer
Value Group(As of June 1, 2021)

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VALQUA GROUP Sustainability Report 2021

VALQUA GROUP Sustainability Report 2021

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Materiality in CSR activities

Materiality in CSR activities
In order to achieve healthy, sustained growth and contribute to the realization of a sustainable society, the VALQUAGROUP assesses and analyzes various social problems to define its materiality. In FY 2020, we linked our materiality
matrix to the Sustainable Development Goals (SDGs) to redouble our efforts to contribute to SDGs.

Materiality

Why? For what purpose?

Basic policy

Main efforts

Process of defining
the materiality matrix

SDGs to which thiscontributes

1

01. Spread of the Corporate
Philosophy

To aim for sound and sustained growththrough visionary management with the
Corporate Philosophy of the “THE VALQUA
WAY” at its center

Make “THE VALQUA WAY” the basis of our daily activities

1) Enlightenment activities through Committee for Promoting the Spread of “THE
VALQUA WAY”
2) Presentations on personal understanding and practice of “THE VALQUA WAY” ateach level02. Strengthening of corporate
governanceBecause it is important to have an effective
decision-making mechanism for fulfilling oursocial responsibilities

Construct a management system based on “THE VALQUA
WAY” and strive to perfect it

Activities to strengthen the system of global governance and expand
information disclosure

03. Promotion of Group’s global
activities

Because the Group needs to make concerted
efforts to solve global problems

Make a concerted effort as the VALQUA GROUP to solve
problems by implementing the Corporate Principle of “For
Stakeholders Worldwide”

Efforts to promote CSR activities, contributions to SDGs, and upgrading ofsustainability information throughout the entire Group

04. Dialog with stakeholders

To deepen mutual understanding throughdialog and work toward the solution ofcommon social problems

Promote the CSR Concept of “Collaboration with
Stakeholders” to lead to the solution of global problems

Efforts to expand opportunities for dialog with stakeholders

05. Prevention of corruption
and bribery

To prevent not only bribery but also actions
that raise suspicions

Conduct business on the basis of the “Compliance
Manual” under the Action Principle of “Respectcompliance and work with full honesty”

Strengthening of risk compliance, including prevention of corruption and bribery,and efforts to expand information disclosure

06. Legal compliance

To promote thorough compliancemanagement in order to fulfill our social
responsibility and meet expectations

Conduct business on the basis of the “Compliance
Manual” under the Action Principle of “Respectcompliance and work with full honesty”

Efforts to increase the effectiveness of legal compliance and expand disclosure

07. Compliance withenvironment-related laws
and ordinances, etc.

To avoid our business activities being
influenced by violation of increasingly strictlaws to prevent environmental pollution

Conduct business on the basis of the “Compliance
Manual” under the Action Principle of “Respectcompliance and work with full honesty”

Thoroughgoing environmental risk compliance08. Prevention and reduction ofleakage of environmentallyhazardous substances

To use advanced technology to contribute to
the realization of a low-carbon society
through products and services that lead to
reduction of environmentally hazardous
substances

In line with the CSR Concept of “Superior Quality”,
improve technology and provide products andtechnology that contribute to the solution of problems

Combatting pollution and other social problems by developing and deploying
products and services

09. Reduction ofenvironmentally hazardous
substancesin businessTo engage in business activities thatminimize deleterious effects on theenvironment, in order to fulfill our social
responsibilities as a manufacturing company

Give consideration to environmental assets in our
activities under the Action Principle of “Conserve andutilize resources effectively”

Environmentally hazardous substance reduction

Safety and Health10. Occupational healthand safety

To lead to employee happiness and thedevelopment of business by creating anenvironment that considers health and safety
and is easy to work in

Create an environment that is easy to work in under the
Action Principle of “Always treat health and safety with
top priority”

Promotion of occupational health and safety

We created a matrix chart mapping thesocial problems identified in Step 1 on
one axis and the “stakeholders’ priorities”
and “VALQUA GROUP priorities” on theother to extract items with the highest
priority as materiality.

Supply Chain
Management

11. CSR procurement (handlingof conflict minerals)

To solve problems that have become more
complex with the globalization of the supply
chain

Conduct business on the basis of the “Basic Procurement
Policy”

Education and promotion of procurement activities based on CRS
Procurement Guidelines

Step

12. Ensuring of the diversity ofhuman resources

To lead to sound and sustained growth bycreating an environment that makes themost of the individuality of diverse humanresources and allows them to grow while
increasing their own value

To give full consideration to human rights throughenlightenment activities based on the Action Principle of“Hold respect for individuality and personality”

Support for diverse and flexible work styles

We then defined the VALQUA GROUP’s
materiality for FY 2019 and began toimplement a new CSR action plan.

13. Respect for human rights

To give full consideration to human rights
through enlightenment activities based on
the Action Principle of “Hold respect forindividuality and personality”

Conduct business activities in line with the “VALQUAGROUP Basic Policy on Human Rights”

Educational activities to promote understanding of various international norms forhuman rights

Step

14. Human resources
development

To cultivate human resources that cancontribute to the expansion of our business

Cultivate human resources that can continue to meet new
challenges by thinking for themselves under the action
guideline of “Strongly committed to learning and growth,and filled with the spirit of challenge”

1) Cultivation of the Valqua Person2) Development of core Group managers
3) Development of core base managers
4) HR cultivation for each division and company

Customer
Satisfaction

15. Improvement of quality andcustomers’ safety and peaceof mindTo provide peace of mind and satisfaction bysolving safety-related problems forcustomers in Japan and overseas together

Promote safety and health not only for those within ourown company but also for customers in Japan andoverseas under the Action Principle of “Always treat healthand safety with top priority”

1) Information provision and services for product quality management and safe use2) Deployment of products and services that promote the safety and peace of mindof customers

Community

16. Promotion of sports, culture,and the arts Coexistence withlocal community

To contribute to the creation of a safe,
affluent society where people can havepeace of mind through the promotion andsupport of sports and CSR activities rooted in
the community

Promote and support sports and make social
contributions rooted in the community under the Action
Principle of “Exist with harmony to the community”

1) Contributing to society through support for the growth of ballroom dancing
2) Contributing to society though greening of area around office buildings andthrough donations

Corporate
GovernanceCompliance

Environment

Human Resourcesand Human Rights

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VALQUA GROUP Sustainability Report 2021

Step

Recognition ofsocial problems

We first identified social problems byreferring to international standards andguidelines such as the GRI Standards,
ISO26000, the UN Global Compact,
Sustainable Development Goals (SDGs),
and RBA Code of Conduct.

Step

2

Identification of
stakeholders’ priorities

We then identified stakeholders’ priorities
by analyzing surveys by evaluation
organizations and customer
questionnaires to index the degree ofattention to the social problems identified
in Step 1.

Step

3

4

5

Identifying materiality
through mapping

Defining materiality

PDCA management
and materiality review

In FY 2020, we decided to add “HRcultivation” to our materiality, reflecting
the basic policy of the mid-term
management plan “New Frontier 2022
(NF2022)” initiated in the same year. We
also linked “VALQUA GROUP corporate
activities”, including the FY 2020
materiality, to the SDGs. In the future, wewill continuously review the Group’smateriality in light of social trends while
promoting the formulation of more
concrete target indices.

VALQUA GROUP Sustainability Report 2021

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Special Feature 1. Promoting human resources diversity

Manager of Technical Section,
VALQUA KOREA

Kim Young Ju
Special Feature 1

After joining VALQUA KOREA in April 2013, took charge of
production transfer for expansion of seal production base.
Became first non-Japanese Section Manager in 2016.
Involved in streamlining of manufacturing anddeployment to other bases.

Promoting human resources diversity“From VALQUA KOREA”:
How a local staff member meetsthe challenges
SDGs to which this contributes:(This section is based on an essay written by Mr. Kim Young Ju in Japanese, with modifications)

Encounter with VALQUA
After I graduated from university in 2003 with a major in
manufacturing technology, I decided to pursue a career in the
manufacturing industry as an engineer. At that time South Korea
was under IMF stewardship following the severe economic crisis of
1998, and corporations forced to change their management
strategies were struggling with restructuring. The first South Korean
company where I worked engaged in technological collaboration
with Japanese companies, and I became interested in the corporate
culture unique to Japan, including their approach to technologicalchallenges and business practices that inspired trust. Wishing towork for a Japanese company myself, I joined VALQUA KOREA in
2013 and threw my energies into the launch of a new factory.
The thing that made the greatest impression upon me as a
new hire was “THE VALQUA WAY”, which clearly described thecompany’s value system. “THE VALQUA WAY” is the message that
the VALQUA GROUP continually sends out to employees
throughout the organization, encouraging them to ask, “What kindof value do I bring to the company?” and “What is my mission?” In
doing so they develop an understanding of the corporate
philosophy. I also could feel a gradual change in the outdated waysof thinking I had carried over from the previous company.

Meeting the challenges ofseal manufacturing based on“Value & Quality”
I was assigned to the Technical Section as a new hire and put incharge of transfer of new products, new manufacturing processes,
and the launch of a clean room. I had no knowledge or experience
with seal products, and the South Korean staff and I were unable tohandle even minor issues.
The biggest problem was that although seal productmanufacture appears straightforward at first glance, it actuallyrequires very delicate management. Even if we used the same
manufacturing method as the mother plant, minor differencesin the surrounding environment or the machinery could resultin a different finished product. Production transfer from themother plant was a rigorous, high-pressure mission that involved
identifying the causal factors for each type of product andcompleting the transfer of all on schedule.
What kept me from getting frustrated or giving up
throughout repeated trial and error was the Core Principleof “Value & Quality” from which the company name derives.
VALQUA’s uncompromising commitment was the strength that
kept me going when things weretough. The production transfer,including an enormous amountof documentation, repeatedintroduction of equipment,
technical guidance for contractors,
and stability testing for internal
production technology, went off
without mishap. A plant extension
in 2016 enabled us to increase
Scene of Mr. Kim explaining theoutput and achieve a stable supply
new equipmentof product.

Giving hard thought tobusiness expansion goals
In 2016 I took over the duties of Technical Section Manager fromthe Japanese representative. I took part in “Leaning from theCEO” with CEO Takisawa the same year, and I still vividly recall
how deeply impressed I was by his guidance on VALQUA’s aims
for its managers in terms of both administration and employee
cultivation. I felt that in order to fulfill my role as a human resourcethat met the ideals CEO Takisawa espoused, I would need todeepen my own knowledge of technology and become morecapable, and I was keenly aware of his expectations and thechallenges I faced inmeeting them.
Early in 2018 a
decision was madeto launch a new
production line forseal products in athird country, and
VALQUA KOREA’s
With CEO Takisawa, after the 2019 Forum

12

VALQUA GROUP Sustainability Report 2021

Technical Section was assigned to handle all activities leading up
to the launch. We faced real difficulties in shepherding it throughfrom the initial study and supporting overseas until the launch, butwhen production proceeded as expected with the newly launched
line, I felt a very great sense of accomplishment and joy. It was atruly valuable experience for me.
Now I saw that VALQUA KOREA could no longer play catchup with the Business Division. We needed to become a model forthe other bases and generate good proposals ourselves. By seeking
to transform existing facilities from the concept level up, we
introduced the specified facilities developed by our VALQUA KOREA
Technical Section into new bases and new lines at the motherplant, thereby contributing to the streamlining of manufacturingconditions at all production bases.

Acting globally and leading the way tofuture goals
Recently corporations have been making cross-border moves insearch of better environments. Because not only things and capital
but also knowledge and people now operate in a global field,
a truly strong company should be able to succeed anywhere in
the world by exhibiting its strengths. VALQUA owes its reputation
to the efforts of our predecessors who built and expanded thecompany, but now that I am in the position of inheriting thistradition of quality manufacture, I feel that it is my mission tomaintain that reputation by winning similarly good evaluations toincrease our global competitiveness.
As an engineer, I am constantly making efforts to keep abreastof the current technology, but the pace of evolution is now so
rapid that there are hurdles to the timely acquisition and practicalapplication of knowledge. Manufacturing sites still require theinvolvement of a lot of manpower, and I often struggle with thelimitations of technology when it comes to proposing epochmaking improvements in the human component of manufacturing,or the future smartification and mechanization of plants. However,since the changes that the development of technology and science
bring to the world are unavoidable, I would like to grow into thekind of human resource who is not complacent but can develop
truly useful technologies and find new opportunities in the spirit oftaking on the challenge of the future and the unknown.

In order to realize a sustainable society
Early in the launch of the South Korean plant, some of theemployees expressed negative opinions about the introduction ofa new value system or a foreign organizational culture, and I was
sometimes impatient at our inability to move forward more
quickly. I struggled to find a way to spread “THE VALQUA WAY”, butwhen I told CEO Takisawa of my difficulties at “THE VALQUA WAY
Promotion Forum” held in South Korea in FY 2019, he told me thatthe manager’s level of commitment is the key to moving thecompany, and that I could get results and promote improvementsby continuing to act on the basis of “THE VALQUA WAY” myself
without giving up.
As VALQUA approaches its 100th year in business, I would liketo strive to achieve the SDGs as my new personal challenge in the
movement toward contributing to the richness of human race andglobal environment as “a challenging company that challenges the
future and the unknown”. I also aim to transform VALQUA KOREA
from the inside out through CX. It is we ourselves who create
sustainable value for the company. When we have faith incorporate value that not everyone can see, it enhances ourengagement and the desire to contribute to a better tomorrow. At
the same time, this is how we become a company that is
supported by society, can contribute to society, and fulfills theideal for VALQUA’s 100th year in business. Until then, I would like tobelieve in myself, act globally, keep my eyes on the world, andproceed toward the creation of value under “THE VALQUA WAY”,
together with everyone who works for VALQUA.

With staff of VALQUA KOREA Technical Section

VALQUA GROUP Sustainability Report 2021

13

Special Feature 2. Visionary Management

Special Feature 2

Visionary Management

In the present environment of
extreme change, visionary management
is more important than ever
– Activities to promote understanding of “THE VALQUA WAY” and put it into practice –SDGs to which this contributes:

Corporate Philosophy“THE VALQUA WAY”
Since its founding in 1927, the VALQUA GROUP has tirelessly
pursued the “Value & Quality” that inspired its corporate name, andwe have contributed to the development of society as a pioneer inindustrial seal products and fluorocarbon resin products.
The Core Principle of “Value & Quality” is the conceptbehind the VALQUA GROUP’s corporate activities, and the Four
Corporate Principles of “For the Benefit of Society”, “WithFairness”, “For Stakeholders Worldwide”, and “Through Creative
Technology” are the raison d’être of the VALQUA GROUP and thevalue system that it holds important. The Corporate Philosophy
of “THE VALQUA WAY” consists of 3 components: the Core
Principle of “Value & Quality”, the Four Corporate Principles, andthe “Ten Action Principles” that set forth the philosophy andstance that all employees of the VALQUA GROUP should adopt intheir daily activities.
The origin of “THE VALQUA WAY” can be traced back to thecompany’s founding 96 years ago. VALQUA began with the Jan.
21, 1927 establishment of Nippon Brake Lining Seisakusho in Yao,
Osaka, as a maker of brake linings for cars and high-speed
machinery. In 1932, it changed its name to Nippon Valqua
Industries and gave form to the creation of value and theimprovement of quality through the productization of Japan’s
first synthetic rubber packing and fluorocarbon resin products. Asa pioneer in seal engineering, VALQUA continued to develop
through the tireless pursuit of value and quality, creating
technologies and products that contributed to the postwar
restoration. This led to the establishment of the Core Principle of“Value & Quality” in 1992 and the Corporate Philosophy of “THE
VALQUA WAY” in 2000.
“THE VALQUA WAY”
has aspects of bothoffense and defense. We
strive to inspire
customers and pursue
the spirit of challenge at
the same time that weemphasize complianceand the following ofAt announcement of Ten Action Principles
rules. Employees mustin 2009

aim to embody “THE VALQUA WAY” through the action guideline of“MY VALQUA WAY”: a virtuous cycle of “understanding”, “practice”,“awareness”, and “empathy”. For instance, when a customer puts its
trust in an employee, the employee will feel that his job isworthwhile, leading to enhanced engagement. In this way,
employees approach the true ideal of “THE VALQUA WAY”.

Landmark years in “THE VALQUA WAY”

Established in 1992
Established in 2000
Established in 2009

Virtuous cycle of understanding and practice of “THE VALQUA WAY”

Consonance of own
values with action
guidelines; empathy
with superiors
and colleagues

Empathy

What did you
feel or realize
through practice?

Understanding“THE VALQUA WAY”
Virtuous cycle ofunderstanding andpractice

Awareness

Understanding
background, philosophy,
ideas, spirit, and effects

Practice
Putting it into
practice in placeof your own rules
and value system

Activities to promote understanding
and practice of “THE VALQUA WAY”
In order to promote practice of “THE VALQUA WAY” throughout thecompany through our virtuous circle, we established 2008 as the“Year of Corporate Philosophy in Practice” and initiated the“VALQUA GROUP Corporate Philosophy in Practice Presentations”.
The name of the event was later changed to “THE VALQUA WAY
Understanding and Practice Activities”.
In these annual Activities, all VALQUA GROUP employees
write reports on original themes describing how they have put“THE VALQUA WAY” into practice themselves. A paper screening
and preliminary round determine who will take part in thecompanywide scored presentation, which is held each year on
VALQUA Founding Day (Jan. 21), when presenters from throughout
Japan and overseas assemble in Tokyo to present reports. Since FY
2010, separate categories have been established for “CoreManagement Staff” and “Ordinary Employees” to better reflect
practice at different levels of organization.
In addition, employees are provided with tools for steadily
spreading “THE VALQUA WAY”, such as the portable “THE VALQUA
WAY” cards distributed to each. Other mechanisms for ensuringthat all employees in the Group understand “THE VALQUA WAY”
include distributing translations of the cards at overseas bases anddisplaying a system diagram of “THE VALQUA WAY” on employees’
computer screen savers and wallpaper in their respective
languages. We also strive to elevate the level of employee activities
by making videos of award-winning presentations from the pastavailable for viewing on the intranet and creating opportunities for
employees to consult their superiors about individual activities.
In other activities specific to organizational level, we proactively
provide opportunities
for small numbers ofexecutives to speakwith CEO Takisawa
directly to deepen theirunderstanding of “THE
VALQUA WAY Learning”
through the “Learningfrom the CEO” program.
The “Committee toPromote the Spread of

THE VALQUA WAY”, chaired by CEO
Takisawa, was established in September
2019 to ensure the healthy, sustained
growth of the VALQUA GROUP. “THE
VALQUA WAY Forum” brings together
managers, not only in Japan but also atoverseas bases, and “THE VALQUA WAY
Learning” for a small number ofindividuals spreads “THE VALQUA WAY”
Scene of “Learning from the CEO” inat VALQUA GROUP companies
South Korea
worldwide, and at every level oforganization. These activities are useful in drawing out original ideas.
For example, the base in Shanghai, China, has localized the Ten
Action Principles to enable local employees to assimilate to the “THE
VALQUA WAY” more easily.

In order to realize sustained growth
In FY 2020, wewere forced tomake majorchanges to thecompanywide
scoredpresentation as
COVID-19
infection control
Close look of the 2020 Company-wide Competition
measures. The(Took place online)
presentation,
which opened on Jan. 21, 2021, was the first to be held online, andthe daily practice activities and preliminary round were greatly
modified as well. At the same time, the presentation confirmed that“THE VALQUA WAY” that has matured in the employees through longyears of practice has become a strong backbone for value
judgments and behavior in spite of the pandemic adversity, and it
testified to the fact that we did not err in the consistent practice ofvisionary management.
Now that there is an urgent need for CX with an eye to theafter-COVID future, we think that we will be able to proceed withreforms with courage and resolution, standing on the firm
foundation cultivated through visionary management based on“THE VALQUA WAY”. The Group is pulling together as one toreconstruct our business base with boldness and dynamism so as
to achieve the “healthy, sustained growth in our 100th year inbusiness and beyond” that is invoked by the basic policy of our
mid-term management plan, “New Frontier 2022 (NF2022)”.

Portable “THE VALQUA WAY” card (Thai language)

14

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15

Corporate Governance
SDGs to which this contributes:

Corporate Governance01

Spread of the Corporate Philosophy

02

Activities to promote understanding of“THE VALQUA WAY” and put it into practiceCorporate governance

The VALQUA GROUP engages in its daily business with the Corporate Philosophy common to the entire
Group – “THE VALQUA WAY” – as its compass. Each employee throughout the Group (VALQUA and 18
consolidated subsidiaries in 8 countries and regions) brings problem consciousness to bear upon his or her
present work in order to make reforms and improvements, and strives to deepen understanding of thisphilosophy so as to apply it to his or her own work and put it into practice as “MY VALQUA WAY”.
Moreover, we hold scored presentations as forums for sharing the content of these activities.
Participants describe how they understand “THE VALQUA WAY” and have been able to put it into practice intheir work. Preliminary rounds are held in each country and at each level, and a scored presentation by
ordinary employees who were selected in the preliminary round is held on the anniversary of the company’s
founding on January 21 of each year. The 13th such competition was held in fiscal year 2020. There is now a
new management-level presentation with separate preliminary rounds for Group company presidents andother core managers, who present on themes apropos of their duties.
In FY 2020, the COVID calamity imposed many limitations on these activities, as the “Committee toPromote the Spread of THE VALQUA WAY”, newly launched the year before, moved to suspend the CEO
Forum that is usually held by the CEO at VALQUA offices, plants, and affiliated companies in Japan andoverseas, and “Learning with the CEO” for executives had to be held online. At the same time, it was a yearthat confirmed the true value of “THE VALQUA WAY” that we have consistently engaged with for long years.
In spite of COVID-imposed remote work and the limitations on internal and external communication, theemployees were able to think for themselves, make judgments easily, and perform their duties speedily
thanks to the judgment criteria and action guidelines provided by “THE VALQUA WAY”.
This confirmed that the visionary management established by the Core Principle of “Value & Quality” in
1992, the Corporate Philosophy of “THE VALQUA WAY” in 2000 and the “Year of Corporate Philosophy inPractice” in 2008 has exhibited its value under adversity and has become an unshakeable foundation andstrength for our company. The entire VALQUA GROUP will continue to promote visionary management
resolutely amidst a changing environment.

Strengthening of corporate governance

Basic philosophy
As a pioneer in seal engineering, the VALQUAGROUP has constructed a management system
for transparent, fair, rapid, and bold decisionmaking in order to increase its corporate value
through sustained growth of the corporation
under the Corporate Philosophy of “THE VALQUA
WAY”, and it continually pursues optimal corporate
governance and strives to perfect it.

Status of corporate governanceIn order to respond rapidly and unerringly tosudden changes in the business environment, weComposition of Board of Directors and Board of Auditors (as of June 1, 2021)
Directors

7 (5 men and 2 women)
Including 3 outside directors (1 man and 2 women)

Auditors

3 (3 men)
Including 2 outside auditors (2 men)

Ensuring the transparency andreliability of business

General Meeting of Shareholders
Appoints/Dismisses
AuditsReports

Representative Director,
Chairman & CEO
Representative Director,
President & COO
Cooperates

Directs/Supervises

Compliance
Committee

Internal Audit
Division
AuditsPreliminary round for Group company
presidents, newly established in 2020. An
acrylic droplet guard was erected as aninfection control measure.

16

Scored presentation for core managers.
Scene of presentation made from overseas
via video-phone

VALQUA GROUP Sustainability Report 2021

Presenters of award-winning presentations, from Group companies inJapan and overseas

Reports

Accounting Auditor
Accounting
auditsExecutive officers
Each business division/
Each Group company

Appoints/Dismisses

Board of Auditors/Auditors

Board of Directors/Directors
Appoints/Dismisses/Supervises

Internal Audit Division
An Internal Audit Division independent of theoperating divisions under the direct jurisdiction of
the Board of Directors has been established toperform internal audits of all of the Group’sbusiness activities. Based on the annual auditing
plan, the Internal Audit Division conducts audits
from a broad range of perspectives, includinginternal control, compliance, and risk
management, and performs evaluations andmakes proposals.

Internal Control System

Corporate governance organization chart

Appoints/Dismisses

have established an agile group management
organization that introduces an executive officer
system and separates the roles of directors fromthose of executive officers. Moreover, by having
auditors, including one certified public accountant
and one attorney, audit the execution of businessby the directors and executive officers, supervisory
and auditing functions highly specialized to
management are fulfilled.

Legal Advisor
Advice(As of June 1, 2021)

We are striving to improve and promote ourinternal control system by constructing highly
transparent business processes and an
appropriate risk management system. A “Basic
Philosophy regarding the Internal Control System”
based on the Companies Act, etc., was adopted by
the Board of Directors, and the content isreviewed as necessary in order to respond tochanges in the external environment and internal
environment. Moreover, to comply with theinternal control reporting system for making
financial reports based on the Financial
Instruments and Exchange Act, we haveconstructed an internal control system andmaintain, evaluate, and improve internal rules andregulations and business processes.
As part of this, our financial reports aredisclosed after receiving the unqualified opinionof an auditing corporation on the internal control
system reports describing the validity of the financial
reports, and we are continuing to make efforts toensure the reliability of the financial reports.

VALQUA GROUP Sustainability Report 2021

17

Corporate Governance
SDGs to which this contributes:

Compliance03

Promotion of Group’s global activities

Promotion of Group’s
global activities
 ROUP’s concerted promotion ofG
CSR activities
The VALQUA GROUP has a history of concerted
action on the part of Group companies in Japanand overseas to promote “activities revolving aroundthe concept of an H&S business”, “support for
ballroom dancing”, “Local Community Thanksgiving
Day”, and other activities based on the Corporate
Philosophy of the “THE VALQUA WAY”.
The “VALQUA GROUP CSR Promotion
Committee” promotes activities on a total of 16
themes: the 15 themes established as important
CSR challenges (materiality) in 2019 plus the “HRcultivation” newly added in accordance with the
mid-term management plan “New Frontier 2022
(NF2022)” initiated in 2020. We also linked our
corporate activities to the SDGs in FY 2020 andhave intensified our efforts to contribute to the
SDGs with a 3-pronged approach of “solving social
problems through our main business (H&S)(offense)”, “strengthening our managementfoundation (ESG) (defense)”, and “activities that

04

05

contribute to society”.
We will continue to promote Group-wide
activities aimed at solving various social problems.

Risk management
Basic philosophy
In order to maintain relationships of trust withstakeholders and stably continue to do business,
the VALQUA GROUP is constructing amanagement system that can accurately assessand control diversifying risk and its impact.
In the mid-term business plan newly started
in FY 2020 (NF2022), we are aiming for thereconstruction of our business foundation byincreasing profits in existing business areas
through selection and concentration andacquiring new business areas. Moreover, we aremaking efforts to enhance risk management andautonomous compliance at the level oforganizational units by codifying them in anannual policy.

Promotion system for safety,
health, and environment(SHE) related activities
Group SHE Committee
A Group SHE Committee has been organized inthe VALQUA GROUP to centrally manage safety,
health, and environment (SHE) related activities.
The SHE Committee is composed of the Chief
Executive Officer as Committee Chairperson, theChief Operating Officer as Vice-Committee
Chairperson, and the executive officers in chargeof each Group company or business office. The
SHE COMMITTEE meets at least once a year todecide upon the annual policy and activity planfor VALQUA GROUP SHE activities and to confirm
the status of activities. The entire Group is involved
in SHE activities, with deployment by SHE teams ineach company or place of business.

Risk management system
The VALQUA GROUP has established the “RiskManagement Committee” to strengthen risk
management. The Committee centrally manages
the risks that the Group incurs in the course of
doing business, which are becoming more diverse
with the rapid changes in the businessenvironment in Japan and overseas and the
expansion of the Group’s business area.
To enable us to swiftly gain control andrespond as a Group to events that threaten thecontinuity of business, such as major natural
disasters, we created a Business Continuity Plan
(BCP) Manual and began implementing it in
FY 2020.
We will go on strengthening our risk
management to prepare for ever diversifying risk.

Dialog with stakeholders

To achieve healthy, sustained growth, the VALQUA GROUP aims to build relationships of trust throughcommunication with all of our stakeholders under “THE VALQUA WAY” while continuously enhancing ourcorporate value.
Stakeholders

Engagement with stakeholders

Main methods of communication

Customers

As an H&S company, the VALQUA GROUP aims to realize the maximizationof customer value through true service solutions from the standpoint of
the customer throughout the entire value chain, including development,
procurement, production, and sales.

Business activities in general
Daily business activities, social gatherings for store personnel, exhibitions,handling inquiries from customers, CS questionnaire surveys

Shareholders

The VALQUA GROUP proactively engages in a constructive dialog withshareholders, investors, and other persons related to the stock market while
disclosing information in a fair, appropriate, and timely manner. Management
is appropriately provided with feedback on the opinions obtained fromthe dialog, and it is utilized in the realization of sustained improvements incorporate value.

IR activities in general
Dialog with stock market personnel, General Meeting of Shareholders, meetings
to explain settlement of accounts, IR tools and documents

Business partners(suppliers)

We promote fair and impartial CSR procurement based on legal compliance,
concern for the environment, and mutual trust.

Purchasing activities in general
Meetings with suppliers, CSR procurement surveys

Employees

The VALQUA GROUP is striving to create a work environment that enables
employees to exhibit their capabilities to the greatest possible extent,
based on the assurance of safety and health, respect for human rights, andpromotion of diversity.

Employee engagement activities in general
Employee engagement surveys, support for self-study, labor-management
meetings, handling reports made through internal whistle-blowing system,
establishment of Corporate Ethics Hotline

Aiming for a symbiosis with the global community and the local community,
we strive to reduce our environmental burden and contribute to society.

Social contribution activities in general
Contributing to society through support for sports, Local Community
Thanksgiving Day, volunteer activities by employees, dialog with local
community and NPOs, and donation activities

Local
community

Prevention of corruption and bribery

Risk management system anagement of intellectualMproperty rights
With “Through Creative Technology” as one of its
Corporate Principles, the VALQUA GROUP aims to
be a “true solution provider” that integrates thiscreative technology with service. The Intellectual
Property Division properly protects the value
created through corporate activities and supports
the provision of products and services that lead tosolutions of the customer’s problems. It also
maintains internal rules and systems that respect
the intellectual property rights of others,
conducting exhaustive surveys at each stage of
research and development to ensure that ourcompany’s products and services do not infringe
upon the intellectual property rights of third
parties. Under a system of cooperation between
the Intellectual Property Division and the Research& Development Division, these surveys are
conducted globally to ensure that intellectual
property rights are respected not only in Japanbut overseas as well.

L egal compliance in Group companies
in Japan and overseas
In order to ensure legal compliance throughout
the entire Group, the VALQUA GROUP conducts
surveys of related laws, not only within Japan, butalso as they apply to our subsidiaries overseas,
while receiving support from law offices,
consultants, and services that provide legal
information, so that its business practices will be incompliance with the law. The entire Group
maintains complete readiness to comply withlaws and ordinances that greatly differ in content
in each country and region.

Prevention of corruption

Chairperson

Thorough prevention of bribery
Secretariat

Domestic risk management teamOverseas risk management team

- Officers with jurisdiction over affiliates- Presidents of affiliates in Japan- Committee members and theSecretariat in each risk area

- Officers with jurisdiction over affiliates- Presidents of overseas affiliates- Committee members and theSecretariat in each risk area

In the VALQUA GROUP, we make sure that all
employees are fully informed of the need toprevent bribery, and we review and revise ourrules as necessary in order to appropriately
accommodate regulations on bribery in Japan andoverseas. Moreover, we take rigorous measures toprevent bribery by conducting audits of the entire
Group, making no distinction between members
in Japan and overseas.

(As of June 1, 2021)

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19

Compliance06

Compliance

Legal compliance

Compliance
Basic philosophy
In the VALQUA GROUP, “compliance” does not stopwith legal compliance. We see compliance as
striving to respond to the demands and trust of
stakeholders and win the trust of society byproactively complying with business ethics that
hold us to an even higher standard than laws andregulations and practicing corporate behavior that
contributes to society and gives consideration to
the environment, so as to set an example for othercorporations. We firmly believe that understanding
the importance of this kind of compliance andputting it into practice is something that promises
constant growth and development for the
VALQUA GROUP.

Compliance Manual
A Compliance Manual was established in 2003 toprovide guidelines for all Group employees tofollow in their work, and it has been translated
into 6 languages (Japanese, English, simplified

Compliance system
We have established a Compliance Committee
and Compliance Promoting Committee, and we
strive to maintain and improve the Group’s
compliance system with the Chief Compliance
Officer (CCO) appointed as the highest-ranking
person responsible for the promotion ofcompliance at its center.
With the basic policy of strengthening theGroup’s system for compliance and nurturing thelegal mind, we established a Compliance
Supervisory Division and Compliance Promotion
Division under the control of the CCO in FY 2018,transforming it into a system that contributes tothe creation of a foundation for healthy andsustained growth of the company through bothpromotion and supervision.

Chinese characters, Korean, Thai, and Vietnamese)and shared by the Group. Beginning with generalmatters such as law, environmental protection,
information management, and elimination ofantisocial forces, this Manual describes
compliance requirements as they pertain to sales
activity, the work environment, and personal
conduct (insider trading, conflicts of interest), andit has been utilized as a manual that all employees
must understand and comply with.
We greatly expanded the content of theCompliance Manual, reissuing it as the ComplianceHandbook (Japanese Edition) in May 2020
together with the Action Handbook for thePrevention of Harassment (For Managers andLeaders). These publications incorporate concrete
examples and check sheets to reflect the social
environment and changing demands. They were
followed up in November 2020 with Corporate
Management and Compliance – Management
Responsibilities and Important Issues for Directors
and Officers.
We are also preparing foreign-language
editions that reflect conditions at our overseas bases.

07

Framework for activity

Board of Directors

Compliance Committee
Reports

Directs/Supervises

Compliance Promoting Committee
Chairperson: CCO
Members: executive officers
Secretariat:

Compliance
Promotion Division

Reports

Supervises

Compliance
Supervisory Division

Directs/Supervises

Each business division/Each Group company* chemSHERPA: Name of a data
entry support tool and informationtransfer files released in October
2015 at the initiative of the Ministryof Economy, Trade and Industry to
promote the appropriate provisionof information on the chemical
substances contained in products
to downstream companies fromupstream companies throughout
the supply chain

As a mechanism whereby all Group employees
can engage in reporting, consultation, andnotification related to laws and internal
regulations, we have established several lines ofcommunication: (1) opinion boxes, (2) internal
consultation liaisons, (3) Direct Line to CEO, (4)External Corporate Ethics Hotline (in 7 languages),and (5) external attorneys.
This system is operated independently fromthe ordinary chain of command and ensures that
information is anonymized and that no employee
will be placed at a disadvantage for making areport, consultation, or notification. The number oftimes the system was used decreased in FY 2020
because of the pandemic, falling to two compared
to 10 or more in FY 2018 and FY 2019. We willcontinue to handle these cases appropriately
while carefully monitoring the trend toward
decreased use.

Compliance with environment-related laws
and ordinances

Environmental risk
management
Compliance system eporting, consultation, andR
notification system

In FY 2020, there were zero cases of environmental
regulation violations by VALQUA companies
involved in production in Japan or overseas. There
were also no complaints about odors or noisefrom neighbors at any of our facilities.
Production-related companies in Japan andoverseas have continued to implement
environmental activities in accordance with the
ISO 14001 system since last year.
In recent years, environmental regulations
have become stricter throughout the world but
particularly in China and Vietnam, where we haveproduction bases, with the respective adoption of
the 14th Five Year Plan and planned enactment ofa Revised Environmental Protection Act in 2022.
To stay informed and in compliance withregulations, we are constructing a system thatprevents environmental violations by using
external agencies to provide corporate support forcompanies involved in production, together withstrict internal audits, newly introduced last year.

Strengthening of risk management forchemical substances is being called for worldwide,
and information on the chemical substances thatour products contain is being appropriately
provided downstream through chemSHERPA*.

 aintenance, operation, and auditingMof legal compliance system for eachproduction-related company
Production-related companies in Japan share a listof laws and ordinances specified by ISO 14001,
and they continually engage in activity to prevent
oversights and differences in interpretation
between companies by verifying points of changemonthly. Even with respect to laws specified byeach of the overseas production companies,
monthly points of change have been sharedwithin the Group as a whole.
Each company has established a system forinternal auditing of legal compliance based on
this list of laws and ordinances, and operation ofthis system has begun in FY 2020 with the
production companies in Japan as well as those in
China and Vietnam, where there have been majorchanges in legal regulations.

(As of June 1, 2021)

20

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21

Environment
SDGs to which this contributes:

Environment08

Prevention and reduction of leakage ofenvironmentally hazardous substances

Efforts to prevent andreduce leakage
 nvironmental burden accompanying
Ebusiness activities in FY 2020
In the VALQUA GROUP, we get an overall picture of
the environmental burden of our businessactivities by grasping the INPUT such as theenergy and water that goes into business activities
and the OUTPUT, including CO2 emissions fromuse of energy and the wastes that emerge fromproduction process.
A CSR information collection system has
been introduced for swift and accurate collection
and central control of information from Group
companies, to enable calculation and disclosure
with an appropriate greenhouse gas coefficient.

 fforts toward practical use ofEhydrogen energy
To increase storage efficiency in high-pressurehydrogen storage tanks in fuel-cell vehicles, efforts
are being made to further pressurize compressedhydrogen, but a problem has been pointed out:
the risk of hydrogen leakage increases at higher
pressure and lower temperature.

Change in main
environmental load

The VALQUA GROUP has succeeded insolving this problem by developing seals forhigh-pressure hydrogen gas that can be used in awide temperature range.
The technological capabilities that are
VALQUA’s strength contribute to the practicalapplication of hydrogen energy.

Greenhouse gas emissions (Scope 1/2)
In FY 2020, the absolute amount of emissions
increased compared to FY 2019 by 1,993 ton. The
breakdown was a 1,485 ton reduction owing to
the effects of restructuring of production

 fforts to reduce CO2 throughE
renewable energy
Since 2013, the VALQUA GROUP has been
generating renewable energy at a solar power
facility on unused company land in Kyushu. Thishas contributed to reducing CO2 emissions fromthermal power generation using fossil fuels.

Greenhouse gas emissions (Scope 3)

Change in greenhouse gas emissions (production units + indirect units)(t-CO2)

Basic sales unit (ton-CO2/¥M)

25,0000.60
22,319 educing environmentallyRhazardous substances

20,36020,000In addition to reducing the amount ofenvironmentally hazardous substances generated
in the course of business, the VALQUA GROUP
reclaims used silicon wafers and makes efforts to
reduce CO2 emissions through solar power
generation, etc.

9,547

15,00020,583

20,246

9,908

20,326

10,1680.55
13,513

10,624

0.46650.45

0.42545,000

010,2370.4017

9,938

576
2016

0.50

0.4991

10,000400
2017

Domestic indirect

0.4216

10,023

8,044

9,380

392

762

322

2018

2019

2020
(Fiscal year)

0.40

0.35

Overseas production

Domestic production

Basic sales unit

09

Reduction of environmentally hazardous
substances in business

EnergyWater use

22

Total 378,721m3

Tap water

62,929m3

Industrial water, etc.

315,792m3

VALQUA GROUP Sustainability Report 2021

CO2 emissions

VALQUAGROUP
Business
activities

Production related
Other

WastesIn FY 2020, the absolute amount of waste
discharge decreased compared to FY 2019 by 16
ton. The breakdown was a 62 ton reduction owing
to the effects of restructuring of production
companies and a 14 ton reduction reflecting theeffects of failure improvement throughstreamlining and cost reduction activities andimprovement of yield, but there was an increase of
60 ton owing to the effects of changes in thecomposition of production items, etc., so there
was a 6% increase in terms of the basic sales unit.

0.025
960
850

OUTPUT

Total 160,716GJ

Final disposal volume for wastes

Basic sales unit (ton/¥M)

1,200
1,000

Electric power
37,523MWh
Amount supplied by solar power 50MWh
A-type heavy oil
155,200ℓ
Liquefied petroleum gas (LPG) 66,029m3
Natural gas
89,627kg
Municipal gas
315m3
Kerosene
144,090ℓ
Light oil
30,934ℓ
Gasoline (for company cars)
25,374ℓ

Starting in FY 2014, we began to calculate
greenhouse gas emissions for the entire supply
chain, and we have now been doing so for 7 years.
For details of Scope 3 and other environmentrelated data, please see our website.

Change in final disposal volume for wastes (production units + indirect units)(t)Material flow

INPUT

companies and a 218 ton reduction reflecting theeffects of revising temperature control management
through streamlining and cost reduction activities
and updating superannuated facilities. There was a
990 ton increase owing to ventilation for infection
control, etc., and a 371 ton increase fromexpanded scope of data collection. This year’s
figures reflect electricity emission factors in eachcountry, with a 2,335 ton increase mainly owing tooverseas bases. As a result, there was an 18%
increase in terms of the basic sales unit.

800
600

21,557t
762t

400

Total 944t

200

* Chemical substances: Includes substances thatneed to be reported by the Pollutant Release andTransfer Register (PRTR) Act and emissions assessed
according to similar overseas regulations

0
Object:VALQUA GROUP business offices
in Japan and overseas (excluding
29 bases with small scale, suchas some regional sales offices,
representative offices, and overseas
sales companies)
Period of tabulation:
April 2020 to March 2021

569

0.0211770

758

0.0199511

501

Total 22,319t

Waste plastics
525t
Sludge127t
Wastepaper
52t
Other (waste acid, waste alkali, waste oil,wood chips, waste textiles,
scrap metal, burnt residue)
240t
Chemical substances* – 19 types 60,904kg

0.0195944

694

0.0159

653
0.015

0.015
264
17
2016

Domestic indirect
Basic sales unit

252

250
7
2017

259

7
2018

Domestic production

0.020

7
2019

Overseas production

279
12
2020
(Fiscal year)

0.010* Greenhouse gas emissions are calculated by annually reconfirming
the emission factors for each fuel and electric power in thegreenhouse gas emission calculation, reporting, and announcement
system based on the “Act on Promotion of Global WarmingCountermeasures” (Global Warming Act). Scope 1 refers to direct
greenhouse gas emissions from the business itself, Scope 2 refers toindirect emissions accompanying the use of electricity, heat, and/or
steam supplied by another company, and Scope 3 refers to indirectemissions occurring from the procurement of raw materials throughproduction, sale, and disposal, excluding Scope 1 and Scope 2. Since
the emission factors for electric power are unclear at some overseas
bases, a substitute value is uniformly applied, but calculations for FY
2020 used the emission factors for each base.

VALQUA GROUP Sustainability Report 2021

23

Safety and Health10

Occupational
health and safety

Supply Chain
Management

SDGs to which this contributes:

Events to strengthen SHE activities

11

Basic Procurement Guidelines,
VALQUA GROUP

Promotion of CSR procurement

https://www.valqua.co.jp/
social/csrprocurement/(Japanese version website)

CSR Procurement Guidelines(1) Eradicating legal violations
through improvement of legal
compliance management and levelof supervision
KYUSHU VALQUA pray for safety at shrine* Conflict minerals: Minerals thatprovide a source of funding forarmed groups that commit humanrights violations and corrupt
practices in conflict areas(2) Eliminating risks through rule
formulation and thorough education
By promoting risk assessment for facilities,
operations, chemical substances, etc., we are
striving to eliminate the risks that accompany
routine work and infrequent operations.
Exhibit on local safety operations in Thailand

Safety and healthpromotion activities
VALQUA GROUP Safety and Health Day
The VALQUA GROUP has designated May 18 as“VALQUA GROUP Safety and Health Day” to raiseawareness of safety. We have also established SHE(Safety, Health, and Environment) Week tocoincide with National Safety Week in July, andevents are held to strengthen SHE activities at all
Group bases, including those overseas.

Section
CSR
Corporate
governance

Remote SHE activities at VALQUA KOREA. Also, videos to raiseawareness of SHE

Fair trade

Incidence of accident occurrence

Information/security(Cases)
15

16

15

4
7

10

7

2

2
3
1

7

5

Human rights

9

8

11

5

0

Supply chain

12

4

3

Labor

4

Environment
2016
Serious accidents

2017
Labor accidents

2018
Fires

2019
Commuting accidents

2020(Fiscal year)

Safety and health
BCP

24

VALQUA GROUP Sustainability Report 2021

The VALQUA GROUP established the “CSR
Procurement Guidelines” in 2016 to promote
procurement activities that also give consideration
to society, the environment, and human rights,
etc. Based on the Corporate Philosophy of “THE
VALQUA WAY” and the “CSR Concepts”, 5 items
have been established as the “Basic Procurement
Policy”. These guidelines minimize risk throughout
the supply chain and promote soundprocurement activities.

CSR procurement questionnaire
As one of the activities that promote CSR
procurement throughout the entire supply chain,a self-evaluation questionnaire is conducted inorder to confirm the status of CSR promotion ateach supplier.
In a new effort to make evaluations ofcompliance stricter, the number of questions in

the questionnaire was increased from 20 to 30 in
FY 2020, including questions on corporate
governance, supply chain, and the environment.
We also expanded the scope of the survey,
including suppliers other than the main suppliers
to which the questionnaire has been administeredthus far.
In the future, we will continue to refine thecontent of the questionnaire in order to further
promote CSR activities, and we will make continued
efforts to collaborate with the suppliers andsupport them in order to realize CSR procurement
through individualized support for suppliers.

Handling of conflict minerals*
The VALQUA GROUP considers the proper handlingof conflict minerals to be its corporate responsibility,
and we have established a related policy in the
CSR Procurement Guidelines and conduct
investigations of procured items. In cooperation
with our suppliers, we will redouble our efforts toavoid involvement in human rights violations.

Matters confirmed by CSR procurement questionnaire (increased by 10 to 30 items in 2020)

Activities that proactively promote
safety and healthAs the VALQUA GROUP’s business becomes moreglobalized, risks accompanying the differences inlegal regulations and customs in each country andregion have become manifest. We are convincedthat the Group’s key principle of “Always treat
health and safety with top priority” can be realized
by meticulously taking action to accommodate
the different legal regulations and customs in eachcountry and region without delay. While devoting
efforts to promoting employee health from thestandpoint of health management, we areproactively promoting health guidance byindustrial physicians and the creation of a happy,
healthy workplace from the standpoint of both
safety and hygiene.

CSR procurement

CSR Procurement Guidelines

Education and training ofsafety and health supervisors

By having external experts conduct health andsafety audits of each factory and provide safety
training, we are promoting activities that makeemployees more skilled at discovering dangers
in advance.

SDGs to which this contributes:

Content of efforts• Legal compliance, preventing violations • CSR promotion • Extending to business partners• Internal control • Whistle-blowing • Proper import/export
corruption (political donations, bribes) • Prevention of abuse of superior bargaining position• Preventing• Ban on offers/acceptance of improper advantage
of intellectual property • Personal/confidential information management• Management• Prevention of attacks on computer networks
with laws, regulations, social norms, industry norms and standards• Compliance• Use of conflict resources (tantalum, tin, tungsten, gold, and derivatives produced in conflict areas)• Respect for human rights • Prohibition of discriminationof discrimination in hiring • Providing equal opportunity for employees• Prohibition• Compliance with prohibitions • Fair application of work hours, breaks, paid leaveof legally designated chemicals • Management of wastewater, sludge and emissions• Management
and efficient utilization of resources • Reduction of greenhouse gas emissions• Sustainable• Green procurement and waste reductionin which employees can work safely and in good health • Worker safety• Environment• Disaster preparedness • System for handling disasters and accidents• Business continuity planning efforts
VALQUA GROUP Sustainability Report 2021

25

Human Resources and Human Rights

Human Resources andHuman Rights
12

SDGs to which this contributes:

Ensuring of the diversity of human resources

Creating a workplaceenvironment andvarious systems
 reating an environment in whichCemployees of various nationalities canbe active
The VALQUA GROUP proactively hires foreign
nationals and engages in human resources
exchanges among Group companies. In order topromote the creation of an environment in which
employees can be active globally, the Group
provides employees who are to be posted
overseas with advance training and follow-up
during their tenure. Foreign nationals working inJapan are also supported with Japanese language
education, inclusion of foreign nationals in HR
Department, and periodic face-to-face meetingsand consultations on problems. Working together
with diverse human resources in an environmentthat transcends language and cultural boundaries
is stimulating and leads to new realizations.

 reating an environment in whichCemployees can be active regardlessof gender

VALQUA GROUP Basic Policy on
Human Rights
https://www.valqua.co.jp/
social/human_resources/(Japanese version website)

We promote further innovation by incorporating
diverse viewpoints irrespective of gender. In
particular, we set targets for the percentage ofwomen in management positions and proactively
appoint women to these positions in the
management of overseas group companies,
etc. to support women’s career development
and growth.

 romoting employment of persons
Pwith disabilities
Aiming for harmonious coexistence with thecommunity, the VALQUA GROUP proactively
accepts interns with disabilities from special
education schools in the community. Whilecommunicating the joy and significance of working
to persons with disabilities, we support job retention
and independence after joining the company.

10

9.1

10.1

11.1

6

Policy on Human Resource
Development

4
2
2016

2017

2018

2019

VALQUA GROUP Sustainability Report 2021

2020
(Fiscal year)

https://www.valqua.co.jp/
recruit/training/#hoshin(Japanese version website) ate of employment of Target: Meet or surpass the statutory employment rate
Rpersons with disabilities

Engagement

26

11.8

7.9

(As of June 1, 2021)

We have defined the goal for our 100th year inbusiness as becoming a “a challenging company
that challenges the future and the unknown”, but
in order to realize this ideal, we need to switch froma passive to an offensive constitution and meetchallenges without fearing failure. To this end, weare focusing on “engagement”, making proactive
efforts to improve all employees’ engagementwith the company. The 1st Employee Engagement
Survey was held throughout the VALQUA GROUP
in August 2020, and we have been referencing thesurvey results in training for managers.

https://www.valqua.co.jp/
recruit/training/#sengen(Japanese version website)

8

0

(%)

3.0
2.5
2.0
1.5

2.66
1.94

2.08

2.0

2.0

2016

2017

2.46

2.20
2.2

2.2

2.3

2018

2019

2020
(Fiscal year)

1.0
0.5
0.0

Rate of employment of persons with disabilities

The VALQUA GROUP established the “VALQUAGROUP Basic Policy on Human Rights” in March of2017 on the basis of the United Nations Global
Compact. On the basis of this policy, and withreference to the GRI standards, we have prepared
an assessment sheet, and a survey of Group
companies is conducted once a year to spreadknowledge of the human rights policy throughout
the Group, confirm understanding, and check thestatus of human rights efforts.
The results are analyzed, and while providing
support so that each Group company canautonomously grasp, prevent, and handle humanrights problems, we promote diversity and further
awareness of human rights.

Statutory employment rate

In FY 2020, efforts were also made to ensurethat even overseas Group companies canautonomously hold manager training on respectfor human rights.

Human rights education on harassment in Thailand

Human resources development

Declaration on Human Resource
Development(%) 14
12

Respect for human rights

Respect for human rights

14

 ercentage of women in Target: 10% by FY 2020, 15% by FY 2027
P
management positions

System that supports flexible ways of working
established: 2nd job (short work week)• Newly
work system (including allowance)• Remote
care leave (continuous for maximum of• F3amily
years)
for obtaining paid leave in 1-hour units• Systemoff on child’s birthday• Day
paid leave for child care
• Specialhortened work hours for child care (until child• Sreaches
3rd year of elementary school)
leave (until child reaches age of 2 years• Candhild-care
6 months)
time system (core time 1:00 pm – 3:00 pm)• Flexwork hours for family care
• Shortened• Career return system

13

A wide variety of
training programs
1. HR cultivation for
globalization
2. HR cultivation throughearly selection
3. Level-specific training
4. Occupation-specific training
5. Self-study

Human resources development
In the VALQUA GROUP, we provide various training
programs based on our “Declaration on HR
Development” and “Policy on HR Development”.
Through a balanced combination of methods, wedevelop and cultivate human resources thatmatch our “Profile of the Ideal Human Resource”.
Reflecting mid-term plan “New Frontier 2022
(NF2022) initiated in FY 2020, “HR cultivation” hasbeen added to our materiality, and efforts todevelop the human resources who will become
the corporate officers of the near future andsupport the management of our bases are being
intensified thorough the CEO cram schools, early
selection training, and overseas executive training.
Profile of the Ideal Human ResourceA person who empathizes with our corporate• philosophy,“THE VALQUA WAY”
• Acts & makes decisions from global perspective
committed to learning and growth, and• Scantrongly
continue to take on new challenges while nhanced support for self-studyE(distance learning)
To support the autonomous growth of employees,
the VALQUA GROUP is enhancing its self-study
program. Special distance-learning courses are set
up every year with tuition fully subsidized, etc. Thereis also a support system including online public
seminars and online English conversation lessons.

 arget management and HRTevaluation mechanism
Initial targets for employees in the VALQUA GROUP
are set on the basis of annual company policy andthe mission of the division. The final targets arethen refined through discussion with the superior
as the subordinate strives to perform daily duties
in accordance with “THE VALQUA WAY” andemulate the level-specific “Profile of the Ideal
Human Resource”. In ongoing communication, thesuperior clarifies issues in the subordinate’s
self-evaluation and identifies points to improvenext time. HR cultivation thus supports thesustained growth of the VALQUA GROUP.

thinking for him/herself

apable of speedy judgment and action. Can boldly• Cmeetchallenges in anticipation of changing times
and reforms

VALQUA GROUP Sustainability Report 2021

27

SDGs to which this contributes:

Customer Satisfaction
15

Community
16

Improvement of quality and customers’ safety
and peace of mind

Quality assurance systemand policy
In the VALQUA GROUP, we have organized a“Group Quality Assurance Committee” to construct
a global quality system integrating the entire
Group. It consists of responsible persons fromeach unit that is related to quality, such as
procurement and production technology units,
beginning with the business divisions and groups
that exercise control over the production-relatedcompanies and sales-related companies in Japanand overseas. The Committee increases theeffectiveness of the entire Group by issuing
instructions for the concrete deployment of its
decisions at the same time that it takes
responsibility for their daily execution.
Moreover, the organization, as well as each
employee of the company, engages in quality
improvement activities by establishing concretegoals on the basis of the “Quality Policy”. This
provides the basis for complying with related legal
regulations and providing safe products andservices with the assurance that quality will meetthe demands of the customers.

Promoting the development
and spread of services for the
benefit of safety and peace ofmind of customers
The VALQUA GROUP not only manufactures andsells seal products but also provides educational
support for technicians. Seal training is constantly
evolving to meet the demands of customers andreduce leaks from faulty seal installation, which is a
cause of accidents at plants.
We are also promoting our seal engineering
services, which combine the original technologies
cultivated by VALQUA with smart technologies
like IoT.
We are contributing to the safety and peaceof mind of all our customers by accelerating thedevelopment and deployment of services thatmeet the need for sophisticated safetyengineering in plants.

Evaluation technology
The use environments of seal products are diverse,
and in actual practice it is difficult to perform
evaluation and verification for all customers. At the
VALQUA GROUP, we are addressing this issue by
using finite element analysis (FEA) to develop
next-generation evaluation technology forreproducing and verifying use environmentson computers.
These efforts have made it possible toperform verification for large-diameter devices
and under conditions of high temperature andhigh pressure, where it was previously difficult. We
also investigate the cause of seal product defects
such as leakage and failure and propose designs
that can prevent recurrence. In the future, we will
go on contributing to the safety and peace ofmind of all customers by proactively engaging insuch research and development.

Three-dimensional analysis

SDGs to which this contributes:

Quality Policy, Quality
Management System
https://www.valqua.co.jp/
social/safety_quality/(Japanese version website)

Promotion and support of sports
Encouraging “ballroom dance” andmoving experiences
For long years, the VALQUA GROUP has been
involved in promoting and supporting sports topromote health and enrich people’s lives. Since
2014, we have been supporting the spread anddevelopment of ballroom dancing, which is lovedby everyone, regardless of age or physical ability.
In FY 2020, the “All Japan Championships forPrimary, Junior and Senior High School Students”
and “Japan Blind Dance Championships”, thenational competition for visually impaired persons,

The “VALQUA CUP All Japan Dance Championships” was heldwith masks to prevent infection

VALQUA GROUP Sustainability Report 2021

both of which are supported by the VALQUAGROUP, had to be postponed or held remotely toprevent the spread of COVID-19.
The “VALQUA CUP All Japan Dance
Championships”, Japan’s top pro dancecompetition, which is held in November each yearwith special support from the VALQUA GROUP,
was held without an audience this year as aninfection control measure, but it still was a moving
competition overflowing with the participants’passion for dance. As a first experiment, the
VALQUA GROUP provided a television terrestrial
broadcast of the VALQUA CUP to bring the charmsof ballroom dancing to a large number of people.

“Japan Blind Dance Championships”, held after a half-year
postponement. Many duets paired a sighted person with avisually impaired person

Search for seal products with website“Seal Quick Searcher”
In response to demand from customers who havedifficulty selecting products, we have establisheda product search site with various portals toprevent trouble caused by faulty selection. With
services that make product recommendations
according to environment of use (fluid,
temperature, pressure, etc.), keywords, andindustrial field, or that automatically calculate thenecessary tightening force for the application, we
solve customers’ individual problems in real time,enabling them to select the optimal product rightaway or prepare technical documentation using
only the necessary data. We will continue toimprove this site to meet customer expectations
from a broad perspective.

Local Community
Thanksgiving Day
In order to reflect on what we can do to build abountiful future with people throughout theworld, we hold the “Local Community
Thanksgiving Day” every year.
At the business offices, sales bases, and

VALQUA VIETNAM presents director of protective
institution with list of support items

28

Promotion of sports, culture, and the arts
Coexistence with local community

factories of VALQUA GROUP companies
throughout the world, we conduct volunteer
activities rooted in the local community. In FY
2020, a total of 1,411 employees and their family
members participated in these activities in 44
places around the world. Because of the pandemic
conditions, the main activities were fund-raisingand donations (gift-giving), but some volunteers
also collected trash or planted flower beds.

TAIWAN VALQUA ENGINEERING INTERNATIONAL local
trash pickup activities

Planting flower beds in area around head office

VALQUA GROUP Sustainability Report 2021

29

Aiming to become a truly global corporation

Global Network

Company Overview and Map of Bases
Our corporate name represents a fusion of the two words “Value & Quality”. True to the words, we deliver “Value & Quality” toeveryone throughout the world through our seal product business, fluorocarbon resin product business, and silicon wafer
reclaiming business, etc.

VALQUA GROUP businesses

Seal Training Centers (7 locations)
Overseas consolidated subsidiaries(12 companies)
Research and development bases(5 locations)

Sales by segment (¥M) * Rounded down to nearest 1 million yen
VALQUA KOREA CO., LTD.

Silicon wafer
reclaiming business, etc.

(Established 2004)

APPLIED R&D Institute

2,625(5.9%)

Fluorocarbon resin
product business

10,742(24.0%)

44,717

million yen(As of end of
March 2021)

Seal product business

31,349SHANGHAI VALQUA FLUOROCARBONPRODUCTS CO., LTD. (Established 1995)
ADVANCED FLON TECHNOLOGIES(SHANGHAI) CO., LTD. (Established 2013)
VALQUA SEAL PRODUCTS(SHANGHAI) CO., LTD. (Established 2000)
VALQUA CHINA RESEARCH INSTITUTEVALQUA (SHANGHAI) TRADING
CO., LTD. (Established 2002)(70.1%)

Consolidated subsidiaries in Japan(6 companies)• VALQUA SES CO., LTD.
• VALQUA TECHNO CO, LTD.
• VALQUA SEAL SOLUTIONS CO., LTD.
• KYUSHU VALQUA CO., LTD.
• VALQUA METAL TECHNOLOGY CO., LTD.
• VALQUA FFT INC.

(As of June 1, 2021)

VALQUA AMERICA, INC.
(Established 1998)

VALQUA, LTD.

VALQUA NGC, INC.

(Changed to consolidated subsidiary in 2017)

TAIWAN VALQUA INDUSTRIES, LTD.
VALQUA VIETNAM CO., LTD.

(Established 2008)(Established 1969)

TAIWAN VALQUA ENGINEERING INTERNATIONAL, LTD.
(Established 2000)

Seal product business

The main business line of the VALQUA GROUP is providing seals for use in piping and equipment in various
industries. We provide new customer value for the frontier industry, equipment, and plant markets.

VALQUA
INDUSTRIES(THAILAND), LTD.

LINED TANK TECHNICAL CENTER(Established 1988)

VALQUA INDUSTRIES SINGAPORE PTE. LTD. (Established 2017)

Sales

31,349 million yen
Sales by region (¥M)

Proportion of sales

Number of employees by region* Rounded down to nearest 1 million yen

70.1%* Including temporary employees (161) on average

Other

North America(0.3%)(2.2%)

159

North
America

4,988

44(11.2%)

Fluorocarbon resin
product business

Asia

These products, which take full advantage of the exceptional properties of functional resins, are used in many
fields, including semiconductor devices and industrial machinery. With strategic products for frontier industries
and the plant market as our main axis, we provide value globally.

9,085(20.3%)

44,717

1,961

million yen

Asia(As of end of
March 2021)

Japan

30,483

Sales

1,009

people(As of end of
March 2021)

Japan

908

(46.3%)(51.5%)(68.2%)

10,742 million yen
Proportion of sales

24.0%
Silicon wafer
reclaiming business

While helping to protect the global environment with our silicon wafer reclaiming business, we will go on
contributing to a wide range of industries through the further development of our H&S business as anembodiment of new value creation.

Sales

2,625 million yen
Proportion of sales

5.9%

30

VALQUA GROUP Sustainability Report 2021

Company Overview

VALQUA, LTD.
Head Office: ThinkPark Tower 24F, 2-1-1 Osaki, Shinagawa-ku, Tokyo 141-6024 JAPANFounded: January 21, 1927
Established: April 8, 1932
Capital: 13,957 million yen

Listed: On the first section of the Tokyo Stock Exchange
Employees: 433 (Group employees: 1,800, as of March 31, 2021)
Business: Design, manufacturing, processing, and sale of products made from fibers,
fluorocarbon resin, high performance rubber, and other materials to meet the needsof all industries, including industrial equipment, chemicals, machinery, energy,
communication equipment, semiconductors, automobiles, and aerospace

VALQUA GROUP Sustainability Report 202131About the cover
The VALQUA GROUP used photographs ofchildren on the cover of this Sustainability
Report to reflect our wish to contribute to the“Creation of a Bright Future” through businessthat provides customers with safety, peace ofmind, and prosperity, and through CSR
activities such as support for ballroom dance.
We would like to see a future in which all
children can be active and succeed in safety
and peace of mind. The smiling faces ofchildren that grace the cover are photographs
of VALQUA GROUP employees’ children
submitted in response to our invitation forphoto contributions.

Value

Quality

VALQUA GROUP
Address inquiries to VALQUA, LTD.
General Affairs and Human Resources Group TEL 03-5434-7370 FAX 03-5436-0560
ThinkPark Tower 24F, 2-1-1 Osaki, Shinagawa-ku, Tokyo 141-6024 JAPANhttps://www.valqua.co.jp