VALQUA GROUP

Sustainability Report
2020

CONTENTS
Corporate Philosophy

THE VALQUA WAY

08

Top Message

Local human resources growing
along with VALQUA VIETNAM“Value & Quality” from which the company name is derived, together with the “4 Corporate Principles”

Special Feature 2. Efforts to be an H&S company

and “10 Action Principles” that aid employee understanding and facilitate implementation.

Solving bottlenecks to the practicalapplication of hydrogen energy

This deep understanding and implementation of THE VALQUA WAY forms the foundation of
the VALQUA GROUP’s corporate social responsibility (CSR).
possible for us to engage in more practical activity oriented toward solving various social problems.

Special Feature 1. Promoting human resources diversity

Contents, Editorial Policy

The VALQUA GROUP’s Corporate Philosophy – “THE VALQUA WAY” – consists of the Core Principle of

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

VALQUA’s Relationship to Society

02
03
04
06

Corporate Philosophy

Effective 2020, the name of this reporthas been changed to

VALQUA GROUP
Sustainability Report.

12

CSR Management
Corporate GovernanceSpread of the Corporate Philosophy
Strengthening of corporate governance
Promotion of Group’s global activities

Editorial PolicyCorePrinciple&

Quality
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
important challenges in CSR activity, to all of our stakeholders.
Some of the data is disclosed only on our website. URLs where thiscontent will be posted are included in this Sustainability Report.

Value

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

April 1, 2019 to March 31, 2020
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 2020.

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

VALQUA, LTD. and its 19 consolidated subsidiaries(Hiring rates for persons with disabilities and percentage of womenin management positions are figures for VALQUA, LTD. alone.)

Timing of Publication
Issued July 2020 (last issued in September 2019)

Reporting MediaCSR Concepts

02

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

Sustainability Report 2020

Brochure/
PDF
editionWeb
editionSummarizes high-priority endeavors in
the form of an annual report.
“Corporate Social Responsibility”
http://www.valqua.co.jp/social/
Exhaustive posting of latest information andadditional information on our website. Updated
frequently.
“Technical Information”, “Investor Relations”,“Company Information”, and other pages
http://www.valqua.co.jp/

10

Dialog with stakeholders

13
14
15
15

Supply Chain Management

16

CSR procurement
CompliancePrevention of corruption and bribery
Compliance with environment-related laws
and ordinances

17
18
19

Legal compliance
Environment

Prevention and reduction of leakage ofenvironmentally hazardous substances

20

Reduction of environmentally hazardous
substances in business

21

Safety and Health22

Occupational health and safety
Human Resources and Human Rights

Ensuring of the diversity of human resources(human resources development)

23

Respect for human rights

24

Customer Satisfaction

Improvement of quality and customers’ safety
and peace of mind

25

Community

Promotion and support of sports, coexistencewith local community
Company Overview and Map of Bases

Sustainability Report 2020

26
27

03

Top Message

Top Message

Aiming to be “a challenge- ready corporation that proactively takeson the future and the unknown”, we will go on contributing
to the wealth of humanity and the global environment.

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

Toward CSR activities conscious of Sustainable
Development Goals (SDGs)

Meeting the challenge of the great upheaval
caused by the novel coronavirus calamity
The rapid spread of novel coronavirus infection since thebeginning of 2020 has developed into an unprecedented situationthat has produced many victims throughout the world. While
praying for the repose of the souls of the many who lost their lives
to the still rampant novel coronavirus pandemic, we offer ourheartfelt condolences to their surviving families. We also offer our
deepest thanks to the front-line healthcare workers who are

Image of the corporation we would like to be as
we celebrate 100 years in business (2027)
A challenge-ready corporation that proactively takes on
the future and the unknown– In order to contribute to the wealth of humanity and the global environment –1. Endless pursuit and monitoring of growth strategy
2. Strengthening of management foundation to make growth
unshakeable
3. Putting into practice proactive efforts in the areas of “environment,
society, and corporate governance” as a better global citizen

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

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Sustainability Report 2020

business plan, New Frontier 2022 (NF2022). This was done because
the changes in the business environment that occurred during theperiod of NV·S8 led us to recognize the need for a new businessplan that could overcome and successfully cope with all futurechanges in the environment.
In NF2022, which was announced in May of this year, we
adopted the goal of realizing sounder sustainable growth as wemove beyond our 100th anniversary and enter the new era, andwe set forth the image of the corporation we would like to be as
we celebrate 100 years in business (2027) – a challenge-ready
corporation that proactively takes on the future and the unknown
in order to contribute to the wealth of humanity and the global
environment.
In the past half year, society has undergone great changes.
The world is confronting difficulties never before experienced, but
we intend to keep our gaze on the future, undaunted by adversity,
as we meet the challenge of “pioneering the New Frontier” of theunknown that lies ahead of us.

laboring day and night at medical institutions to treat the infected
and support society.
By coincidence, this past January, a time when the world wasabout to be visited by this unforeseen situation, happened tocoincide with the end of the VALQUA GROUP’s mid-term businessplan, New Valqua Stage 8 (NV·S8), one year earlier than scheduled,
and the announcement of the establishment of a new mid-term

Basic policy of mid-term business plan,
New Frontier 2022 (NF2022)
To realize sounder sustainable growth as we move beyond our100th anniversary and enter the new era, the entire Group ispulling together under “THE VALQUA WAY” to reconstruct ourbusiness foundation in a bold and dynamic manner.
1. Increase profits in existing business areas through selection andconcentration and acquire new business areas
2. Powerfully execute open innovation (accelerate collaboration,
mergers and acquisitions, etc.)
3. Accelerate bold investment (research and development andhuman resources development)
4. Pursue efficiency in all divisions and customer service throughfull utilization of IT
5. Execute dynamic policies and measures that invigorate global
human resources

The basis of the VALQUA GROUP’s CSR is “THE VALQUA WAY”, theCorporate Philosophy under which employees understand andpractice our Core Principle of “Value & Quality”. Employees’ CSR
activities consist of putting our unique CSR Concepts(“Collaboration with Stakeholders”, “Superior Quality”, and “RuleFirst”) into practice in the course of performing their duties.
Today, it is not enough for corporations to pursue short-term
profits; they cannot remain viable unless they adopt a long-term
perspective, pursue the improvement of non-financial indices likeenvironmental, social, and corporate governance (ESG), and findways of coexisting with the global environment and local
community. We are convinced that having our employees practiceproactive engagement with the “environment, society, andcorporate governance” as better global citizens under the
Corporate Philosophy of “THE VALQUA WAY” will contribute to asustainable society, and we aim to realize this as our corporate
ideal as we approach the turning point of our 100th year inbusiness (2027).

Sustainable Development Goals (SDGs)
The SDGs were adopted in 2015 by theUnited Nations as goals that should be
met by 2030 to solve the problems of the
global community. They consist of 17
goals and 169 targets. Not only
governments, but also citizens andprivate companies are expected tocontribute to their realization.

During the last fiscal year, we reviewed important CSR issues
from the standpoint of the stakeholders and that of the VALQUAGROUP on the basis of the SDGs and the Global Reporting
Initiative (GRI) Standards and established new CSR challenges. The
SDGs, with the target years of 2030, are urgent tasks that we needto tackle as global citizens with a perspective that transcends thatof the country, organization, or individual, and we intend to place
greater emphasis on them as guidelines for contributing to asustainable society.
We changed the title of this report from the “CSR Report” tothe “VALQUA GROUP Sustainability Report” to signal ourdetermination to strengthen our commitment to contributing to
the realization of a sustainable society and engaging in ourbusiness activities with a consciousness of this goal.

Development of the “VALQUA Person” – humanresources development unrivaled in the world
As a result of promoting diversity in its employees, the VALQUAGROUP has multinational work forces at its bases in Japan,
South Korea, the United States, China, Taiwan, Thailand,
Vietnam, and Singapore.
To create an environment in which these human resources
can exhibit their abilities to the fullest, we have established the“VALQUA GROUP Basic Policy on Human Rights” based on the
Action Principle of “Hold respect for individuality and personality”,
and we have promoted corporate activities that are unfettered bynationality, gender, age, religion, or other attributes.
However, we now think that a new set of elements will benecessary under the kind of environment that the novel
coronavirus has created, which is hitherto inexperienced andcharacterized by inability to see into the future. That is to create a
corporate culture that is undaunted by adversity, seizes it as a“chance” to create new value, and is filled with a challenge-readypioneer spirit. We plan to promote the kind of rigorous humanresources development that can produce leaders with this mindset
who can take charge of management as truly global humanresources unsurpassed in the world.
We believe that once the novel coronavirus pandemic has
been stamped out, a better future awaits us – one that will
open the way to new social ideals different from any that came
before. We intend to continue delivering new value to ourcustomers while taking pride in the fact that we were thepioneers in seal engineering, and we will make efforts to be a
corporation that can contribute to a sustainable society
together with all of our stakeholders.
June 2020

Sustainability Report 2020

05

VALQUA with Society

M Semiconductor plants

VALQUA’s Relationship to Society
Our “products & services” play an active role inall sorts of places

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.

Recycled silicon wafer

High-performance elastomer

VALQUA is contributing to reduction of theenvironmental burden by using proprietary knowhow toclean and polish silicon wafers for checking theoperation of semiconductor manufacturing equipment.
The recycled wafers are as good as new.

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

Fluorocarbon resin lined tank

Bonded gate seal

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.

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

A Rockets and satellites

L Mobile phone base stations and vehicles

Metal hollow O-rings

Fluorocarbon resin material

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.

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.

A

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 slidable, 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.

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®)

Fluorocarbon resin lined ball valve

Fluorocarbon resin lined productFluorocarbon resin envelop gaskets

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
slidability and was developed for use in
the rotating and oscillating parts ofvarious kinds of production equipment.

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

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.

Sustainability Report 2020

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

H Seal engineering services

Joint sheet gasket

06

I Portable media

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

Sustainability Report 202007

Special Feature 1 Promoting human resources diversity

Special Feature 1

Promoting human resources diversity
SDGs to which
this contributes:

Local human resources growing
along with VALQUA VIETNAM
The business philosophy we call “THE VALQUA WAY” includes “For the Benefit ofSociety” and “Run a business that contributes to society”.
Under “THE VALQUA WAY”, we have grown into a corporation that does businessin Japan, China, South Korea, Taiwan, the United States, Thailand, Vietnam, andSingapore together with our diverse human resources.
In the future, we will continue to contribute to the SDGs through the practice of“THE VALQUA WAY” while developing truly global human resources, including
executives chosen from the local community.
(This section is based on one written by Mr. Phung Van Duc in Japanese, with modifications.)

Guided by the Corporate Philosophy during
my difficult Branch Manager period

By returning to the point of origin, we got
one step closer to realizing our “dream”

In the autumn of 2014, when Chief Executive Officer (CEO)Takisawa of VALQUA, LTD. visited Vietnam, he asked me, “What kindof human resource are you aiming to be?” I answered, “I want tobecome the president of VALQUA VIETNAM, but I think I first must
learn about management.” When the Hanoi Branch was establishedin 2015, I was appointed Branch Manager. At the time, I was one of
only 2 non-Japanese VALQUA base managers. I was surprised andhappy but also anxious about meeting their expectations.
After the Hanoi Branch was launched, I spent lonely days as
the person responsible for operations. There were problems with
employee resistance and complaints reflecting cultural and value
differences between Vietnam and Japan. As the person in the
middle, I experienced anguish and often wondered if I should
quit the company. However, my thoughts repeatedly returned to“THE VALQUA WAY”, the spirit of challenge, CEO Takisawa’s
expectations, and what inspired me to join the company in thefirst place. I thought that if I quit then, I would regret it for the restof my life. So I decided to make reconciling the value systems ofJapan and Vietnam my role. This led to opportunities to deepen
my understanding of “THE VALQUA WAY”. Through my 3 years ofwork at the branch, I realized anew that VALQUA is not a
corporation that only
pursues profits. It shares
the Corporate Philosophy
of “THE VALQUA WAY” withall of its employees. I saw
that the foundation alreadyexisted for realizing the“WAY” by freely discussing
it with the employees andexchanging ideas.

In the spring of 2018, when wewere seeing signs ofimprovement, I reached anotherturning point in my career.
I was now to spend a year
undergoing training overseas.
CEO Takisawa told me, “In orderto get involved in management,
you will need to understandthe Group’s philosophy,
policies, and ideals. You must
After training with CEO Takizawa in 2019
develop the strong will andresolve to manage a subsidiary and increase loyalty.”
In Japan, I served in Production Management, General Affairs
and Human Resources, Business Management, deepening myunderstanding while shaping my thought and ideals along thelines of the Group’s philosophy and policies. The second half of myyear abroad I spent in South Korea, deepening my knowledge ofbusiness management.
Through this experience, I realized that I would first need toreform my own consciousness and actions and those of the
managers that directly influence the employees if the employees
were to think and act independently.

In my days as Hanoi Branch Manager

Joined Japanese company VALQUA to makethe most of my experience

VALQUA VIETNAM

Phung Van Duc
Vice-President
Joined VALQUA VIETNAM in August of 2008,
soon after its establishment. Along with
the new employees, he was involved in thecreation of the company’s foundation, startingwith preparation for starting up the factory.
After serving in multiple positions in quality
control and manufacturing, he was chosen
to be manager of the Hanoi Branch. He
confronted various issues in connection withthe growth of the base, but he faced each one
with the spirit of challenge and unflagging
efforts for which he was appointed VicePresident of VALQUA VIETNAM in October of
2019. As a local top executive, he has madeefforts to strengthen the organization systemand business foundation.

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Sustainability Report 2020

Back when I graduated from the National Economics University in Hanoi, there were very few
foreign capital affiliated corporations in Vietnam, and most were associated with theVietnamese government. To accumulate linguistic and business experience, I moved to Japan
in 1999 and got a job with a maker of plastic parts for automobiles. Over the course of about 9
years of working in Japan, I was deeply impressed with Japanese culture, so I decided to get a
job with a Japanese company in Vietnam after returning home. When I returned to Vietnam in
2008, I joined VALQUA VIETNAM with that aspiration, and I was able to participate in the launchof the company.
Since I only had knowledge and experience with injection molding at the time, I knew
almost nothing about the gaskets and packing that my company made. Together with about
20 new employees, I was involved in the creation of the foundation of the company, including
the establishment of rules of employment, manufacturing procedures, and testing standards
and the introduction of product management systems, and in the course of this, as well as
after, I gained broad experience working in the Manufacturing Section, Quality Control Section,
Management Section, and others. This gave me an understanding and fondness for seal
products, and it also deepened my understanding of the customers. I was deeply grateful forhaving been given such an opportunity to “Learn and grow in the spirit of challenge”.

Scene from VALQUA VIETNAM
at the time I joined the company

Returning to the front lines after about
3 years, I noticed new issues
In the summer of 2017, I was transferred to the Production Plant
Management Department and returned to the factory, where mymission was to manage, motivate, and strengthen risk management.
The factory had expanded to twice the size in the 3 years I wasaway, but I could see a decline in the quality of human resources
and the atmosphere on the front lines of production. There were
now numerous compliance-related problems such as kickbacks,
power harassment, traffic violations, and gambling.
All of this was diametrically opposed to “THE VALQUA WAY”,
and it gave me a strong sense of crisis. Not only could VALQUAVIETNAM not achieve sustained growth this way, but its very
survival was threatened. I established a “Rehabilitation
Committee” to restore VALQUA VIETNAM to health. Enlisting thehelp of the local executives, I tried desperately to spread anunderstanding of “THE VALQUA WAY” among the employees.
I strove to improve awareness of compliance, reward service,punish transgressions, and communicate fully through reporting,contact, consultation, and appreciation. I also introduced
Vietnamese types of motivation, such as inviting employees’
families to company events and scheduling surprises on“International Women’s Day”.

After overseas training, to Vice-President of
VALQUA VIETNAM
In June of 2019, I returned to Vietnam as the head of theManagement Department of VALQUA VIETNAM. After making apresentation to CEO Takisawa at the time of his visit, I was
appointed Vice-President of VALQUA VIETNAM as of October 1.
I was grateful to CEO Takisawa for patiently giving me
opportunities to grow but also anxious about fulfilling a position of
responsibility and authority like Vice-President. However, I thought I
would need to believe in myself in order to transform the organization
into one that could rapidly sense sudden changes in the environment
and flexibly adapt to them. I would have to draw upon my experienceto strengthen the company’s business foundation by educating the
local managers and improving the organization. That would be a wayof repaying the company for everything it had done for me.
VALQUA VIETNAM is still far from being the “challenge-ready
corporation that proactively takes on the future and the unknown”
that is the ideal for the VALQUA GROUP on its 100th anniversary, but
I am working toward reforming our corporate culture into the kindof “Why? culture”, “culture of trust”, and “culture that values emotions”
that is espoused by CEO Takisawa, and I aim to become the top local
executive (company president) of VALQUA VIETNAM, which is now acompany with about 300 employees .

VALQUA VIETNAM
With over 300 employees, VALQUA VIETNAM
has the most employees of any Groupsubsidiary. It mainly manufactures seal
products (fluorine-based high performance
sheets, spiral wound gaskets, TOUGHRETHANE
packing), supplying petrochemical companies
and others through the Group’s sales
companies. VALQUA VIETNAM also distributes
products through the Hanoi Branch.

Sustainability Report 202009

Special Feature 2 Efforts to be an H&S company

Product development rooted in“THE VALQUA WAY”

Special Feature 2

Solving bottlenecks to the practicalapplication of hydrogen energy

Efforts to be an H&S company
SDGs to which
this contributes:

Although there are great expectations for the potential of hydrogen energy,
technical problems with the storage of hydrogen at high pressure and low
temperature remain.
The VALQUA GROUP is contributing to the realization of a hydrogen society by
developing seal materials that solve this problem.

The power to develop technologies is the strength of
the VALQUA GROUP

H&S company
This is the ideal form of company that the
VALQUA GROUP aims for. It is a proposal thatfuses sales of product (hardware or “H”) withservice (“S”), and it contributes to the solutionof customers’ problems. We are promoting
collaboration that not only addresses
manifest problems but also uncovers unmet
needs together with the customers so that
we can provide a true solution in which ourunique technology is reflected in both the
products and the service.

As a pioneer in seal engineering, VALQUA develops and supplies seal products and peripherals
that support all industries. This spirit of development is rooted in the “Value & Quality” fromwhich our company name is derived. We have a corporate culture infused with the enthusiasm
to continue to meet challenges without fearing failure and we are careful not to overlook thebuds of success that can be found in all sorts of places. In recent years, under the concept of
H&S, we have been striving to expand and transform our business by providing technicaltraining on product maintenance along with support tools and systems.
The basis of the VALQUA GROUP’s development technology lies in adopting a broad
perspective in various product groups. While developers need to be highly specialized,
innovations require a broad perspective. VALQUA has built its unique proprietary technology
on a flexible way of thinking that anticipates customers’ needs, together with proactive
incorporation of technologies used in other industries.

Application of high-pressure hydrogen gas seal (Example)
There is demand for seals that can withstand repeated changes in pressure fromhigh pressure to normal pressure and can be used even at low temperatures.

CurdleH2 compressed to 70 MPa

10Sustainability Report 2020

Compressor

Pressure accumulator

Increase in pressure from70 MPa to 82 MPa

Cooling to -40°C
Pre-cooler

Dispenser

Hydrogen-fueledvehicleFilled at differential pressure to tankinner pressure of 70 MPa

The VALQUA GROUP always aims to delight and inspire thecustomer in its product development. To that end, we first give
maximum consideration to the customer’s safety and peace ofmind, and we then share the problem points with the customers
and consider how we can do everything in our power to find thetrue cause and provide a solution by proposing development anddesign of peripheral structures that meet the customer’s needs inaddition to proposing methods of evaluation and verification.
In the area of product development, there is a tendency forcompanies to specialize in improving the performance of products
as parts. However, the VALQUA GROUP never overlooks the safety of
the customer or the people who are involved in productdevelopment and manufacture, and we strive to develop overallsolutions that can contribute to maximizing the performance of thecustomer’s products and processes while giving maximum
consideration to safety. In order to make it possible to provide more
solutions, we are striving to improve the development technology
capabilities of the entire Group through technical cooperation with
the National Institute of Advanced Industrial Science andTechnology and other external research institutions, and byproactively expanding our platform through open innovation.
In these efforts, we ascribe importance to the fact that this isproprietary technology, and whoever our customer is, we strive tomanufacture “one of a kind” products that satisfy all requirements.

Aiming for realization of a hydrogen society
from the standpoint of seal materials
A switch to hydrogen energy would have the advantage of solving
many environmental problems, and this is expected to be realized
in the future. At the same time, many problems are involved,
including creation of the infrastructure for handling, storing, andtransporting high-pressure hydrogen gas. There are also technicalissues with respect to seal materials, and the switch to hydrogenenergy has not gone smoothly thus far.
In recent years, the movement to solve environmental
problems has become active worldwide, and the improvement
effect that switching to a hydrogen society could be expected toyield in terms of large-scale reduction in CO2 has been recognized
anew. Even China, which published “White Paper on China’s
Hydrogen Energy and Fuel Cell Industry” in June of 2019, hascreated a roadmap for achieving hydrogen energy and fuel cells,
and the flow toward a hydrogen society is expected to rapidly
gather force globally in the years to come.
Technological innovation that makes it possible to usehydrogen energy safely and efficiently will become increasingly
important to promoting a switch to a hydrogen society.
The ability to store hydrogen at high pressure and to store it
at low temperatures will both be important, and safe and effective
use of hydrogen will mean very high expectations for sealmaterials that can accommodate both of these requirements.
Actually, in storage at low temperatures, it is essential to seal
high-pressure hydrogen in a low-temperature environment, andalthough this was achieved with metal seals, their usability is notconsidered adequate in the market because they cannot be used
repeatedly, etc. As an alternative to metal, there are rubbermaterials that make seals with good usability, but they cannot

As a third-party evaluator of materials under development, HyTReC evaluates
the performance and reliability of hydrogen-related products.

stand up to the harsh conditions of use in ultra-high-pressure andultra-low-temperature environments. The level of technicaldifficulty is thus extremely high, but the VALQUA GROUP
succeeded in developing a product that has sufficient seal
properties at temperatures below minus 40°C. This has solved the
problems of a wide range of customers, and we expect it tocontribute to the realization of a hydrogen society.

Toward the realization of a sustainable society
In the VALQUA GROUP, we contribute to the realization of
Sustainable Development Goals (SDGs) through the developmentof commercial products. The accumulation of these efforts is
VALQUA’s reason for existence, and we are convinced that it leads
to sustainable growth. The contributions to the realization of ahydrogen society that have been introduced here are positioned
as part of these efforts. People throughout the world will need tocooperate and pool their technological capabilities to promote therealization and spread of clean energy. Determined to do our partto make this happen, we are promoting development ofcompatible products.
In the future, in addition to proactively utilizing external
technologies and resources, the VALQUA GROUP will continue tofulfill its responsibility to society through a broad perspective, flexible
thought, and the proprietary technology that is its strength.

Comment from a customer
Mr. Hirofumi Iwasaki, Development Coordination Office
Manager, IHARA SCIENCE CORPORATION
A seal in which a single rubber material
can cover highly permeable compressedhydrogen gas under high pressure and at
both low and high temperatures is
extremely attractive. When it is used injoints, this material is easy to handle andalso has desirable characteristics that are
not found in metal seals. I was able to get
involved in research and development incooperation with VALQUA, and I feel very
honored to have produced somethingthat did not exist before. I would like to go
on contributing to the improvement ofpeople’s lives in the future.

Sustainability Report 202011

CSR Management

Corporate Governance

For a sustainable society
Under the Corporate Philosophy of “THE VALQUA WAY”, the VALQUA GROUP continues to meet challenges every day as it aims for unflagging
growth. Moreover, we are placing more emphasis on SDGs in order to contribute to a sustainable society by continuing to create and provide
value that leads to the solution of customers’ problems through the technologies and services that we have cultivated since our founding.

Organization for promoting CSR
In order to strengthen cooperation in CSR activities from a business perspective under our Corporate Philosophy of “THE VALQUA WAY”,
the “CSR Council” was changed into the “VALQUA GROUP CSR Promotion Committee” in fiscal year FY 2019.
In the VALQUA GROUP CSR Promotion Committee, we strengthen cooperation within the Group through reports on the progress of the
CSR activities promoted by each division, and the exchange of opinions, etc. The results are reported in the meeting of the Executive
Committee every half-year.
CSR promotion
organization chart

Representative Director,
Chairman & CEO
Executive Committee
VALQUA GROUP CSR
Promotion Committee

Corporate
Governance Group

Community GroupCSR Secretariat

Procurement Group

Compliance Group

Environment Group

Safety and
Health Group

Human Rights andLabor Practices Group

Quality and Customer
Value Group(As of June 1, 2020)

Important challenges in CSR activities
Activity theme

Why? For what purpose?

Basic policy

01. Spread of the Corporate Philosophy

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

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

02. Strengthening of corporate
governanceBecause it is important to have an effective decision-making
mechanism for fulfilling our social responsibilities

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

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”

04. Dialog with stakeholders

To deepen mutual understanding through dialog and work
toward the solution of common social problems

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

05. CSR procurement (handling ofconflict minerals)

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

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

06. 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 “Respect compliance and workwith full honesty”

07. Compliance with environmentrelated laws and ordinances

To avoid our business activities being influenced by violation ofincreasingly strict laws to prevent environmental pollution

Conduct business on the basis of the “Compliance Manual”
under the Action Principle of “Respect compliance and workwith full honesty”

08. Legal compliance

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

Conduct business on the basis of the “Compliance Manual”
under the Action Principle of “Respect compliance and workwith full honesty”

09. Prevention and reduction of leakageof environmentally hazardous
substances

To use advanced technology to contribute to the realization ofa 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 and technology that
contribute to the solution of problems

10. Reduction of environmentallyhazardous substances in businessTo engage in business activities that minimize deleterious effects
on the environment, in order to fulfill our social responsibilities
as a manufacturing company

Give consideration to environmental assets in our activities underthe Action Principle of “Conserve and utilize resources effectively”

11. Occupational health and safety

To lead to employee happiness and the development of businessby creating an environment that considers health and safety andis 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”

12. Ensuring of the diversity of humanresources (human resources
development)

To lead to sound and sustained growth by creating an environmentthat makes the most of the individuality of diverse human resources
and allows them to grow while increasing their own value

Each individual puts the Action Principle of “‘Learn and grow’ witha spirit to face challenges” into practice in his or her work

13. Respect for human rights

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

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

14. Improvement of quality andcustomers’ safety and peace of mind

To provide peace of mind and satisfaction by solving safetyrelated problems for customers in Japan and overseas together

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

15. Community (promotion and supportof sports, coexistence with local
community)

To contribute to the creation of a safe, affluent society where
people can have peace 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”

12

Sustainability Report 202001

Spread of the Corporate Philosophy
Activities to promote understanding of“THE VALQUA WAY” and put it into practice

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 19
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 Best Presentation Competitions as forums for sharing the content of these activities.
Participants make presentations describing how they understand “THE VALQUA WAY” and have been able toput it into practice in their work. Preliminary competitions are held in each country and at each level, and acompany-wide competition of representatives who were chosen in the preliminary competitions is held on
the anniversary of the company’s founding on January 21 of each year. The 12th such competition was heldin fiscal year 2019.
Also in FY 2019, the “Committee for Promoting the Spread of THE VALQUA WAY” was newly establishedto ensure the sound and sustained growth of the VALQUA GROUP. The CEO himself makes the round ofaffiliates and each business office in Japan and overseas as Committee Chairperson to deeply imbue
employees of the Group in Japan and overseas with “THE VALQUA WAY”. These efforts aim to increase theunifying power of each employee and improve quality in every area.

A presentation at the company-wide competition
Ms. Pham Thi Phuong Minh of VALQUA VIETNAM
1st Place in General Employee Division

CEO Takisawa and President Hombo with 4 awardees fromthe J-Class Division and the General Employee Division at
the company-wide competition

Scene from preliminary competition in China (Shanghai) bloc
(Giving an explanation facing the projector)

Scene of a presentation at the Executive Competition(Participating in a teleconference from VALQUA KOREA)
1st Place, Ms. Chunka Nam of VALQUA KOREA

Sustainability Report 202013

Corporate Governance02

Corporate Governance

Strengthening of corporate governanceCorporate 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.

03

Promotion of Group’s
global activities

internal 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.

FY 2020 Action Plan,
PDCA for SHE activities,
SHE promotion
organization chart
http://www.valqua.co.jp/
social/safety_health_environment/

Status of corporate governanceIn order to respond rapidly and unerringly tosudden changes in the business environment, wehave 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.

Composition of Board of Directors and Board of Auditors (as of June 20, 2020)
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)

Corporate governance organization chart

General Meeting of Shareholders

Internal Audit Division

Appoints/Dismisses

Appoints/Dismisses
AuditsBoard of Directors/Directors

Board of Auditors/Auditors

Appoints/Dismisses/Supervises

Reports

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

Directs/Supervises

Internal Control System
Ensuring the transparency andreliability of businessWe 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 the14

Sustainability Report 2020

Compliance
Committee

Internal Audit
Division
AuditsReports

VALQUA GROUP’s concerted
promotion of CSR activities
The VALQUA GROUP has a history of concerted
action on the part of Group companies in Japanand overseas to promote “activities revolving
around the concept of an H&S business”, “support
for ballroom dancing”, “Local Community
Thanksgiving Day”, and other activities based on the
Corporate Philosophy of “THE VALQUA WAY”.
In FY 2019, the CSR promotion system wasreviewed, and the “CSR Council” was changed into
the “VALQUA GROUP CSR Promotion Committee”
in order to meet the expectations of stakeholders.
The “VALQUA GROUP CSR Promotion Committee”
strives to strengthen the Group’s activities bypromoting activities based on the newly
established important challenges.
Moreover, in order to change to reporting
based on the “GRI Standards”, which areinternational standards, preparation is being
made to post a “GRI Content Index” on ourcompany website after assessing and sorting out
the current situation.
In the future, the Group will continue towork together as one to promote activities thatwill enable it to meet the expectations of thevarious stakeholders.

04

Legal Advisor
Advice(As of June 20, 2020)

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 related executive officers
appointed by the Committee Chairperson, and it
is required to meet at least once a year. In thisCommittee, the “annual policy” and “plan ofactivities” for SHE activities are discussed andapproved, the “status of execution” is confirmed,
and deployment within the Group is planned.

SHE Teams
Within the VALQUA GROUP, SHE Teams are set up in
every office or business unit to promote SHE activities.
With presidents of affiliates or business officemanagers as general managers, each team breaks
downs the “annual policy” and “plan of activities”
approved by the Group SHE Committee andformulates and executes an “annual policy” and “planof activities” for their own team, giving considerationto actual management conditions, special cases,
different legal regulations, and national characteristics.

Dialog with stakeholders

Relationships with shareholders

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

Appoints/Dismisses

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’s businessactivities. Based on the annual auditing plan, theInternal Audit Division conducts audits from a
broad range of perspectives, including internal
control, compliance, and risk management, andperforms evaluations and makes proposals.

Promotion of Group’s global activities

The VALQUA GROUP proactively engages in aconstructive dialog with shareholders, 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
from this two-way communication, and it isutilized in the realization of sustained
improvements in corporate value.

Relationships with customers

realize the maximization of customer value
through true service solutions from the standpointof the customer throughout the entire value
chain, including development, procurement,
production, and sales.

Relationships with employees
Under the Corporate Philosophy of “THE VALQUA
WAY”, the VALQUA GROUP is striving to create awork environment that promotes individual
growth and enables employees to exhibit theircapabilities to the greatest possible extent, basedon respect for human rights, the promotion ofdiversity, and assurance of safety and health.

As an H&S company, the VALQUA GROUP aims to

Sustainability Report 202015

Supply Chain Management
05

CSR procurement

Promotion of CSR procurement
CSR Procurement Guidelines
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 sound procurement 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 FY 2019, the questionnaire wasadministered to the 21 main suppliers from which
the VALQUA GROUP procures and purchases
materials (Total amount of procurement fromthese 21 companies accounts for approximately
80 percent of the total amount of procurement by
our company). The questionnaire consisted ofsections organized along the lines of the Basic
Procurement Policy (8 sections, 20 questions), andit confirmed the status of each supplier’s efforts inthe areas of legal compliance, fair trade,consideration for the environment, respect forhuman rights, safety and health, etc. The
questionnaire recovery rate was 100%. The
questionnaire helped us to strengthen
collaboration with our suppliers, by sharing ourrecognition of the importance of CSR.
As a result of assigning scores on the basis of
the questionnaire responses, it was found that 95%
of suppliers surpassed the established targets, andResults of CSR procurement questionnaire
Average for FY 2019

Target80

pointsSustainability Report 2020

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 investigationsof procured items. In cooperation with our suppliers,
we will redouble our efforts to avoid involvement in
human rights violations.

SectionpointsRisk management

Fair trade
Appropriate
import/export
Information/
security
Conflict
minerals
Human rights/
labor

Safety andhealthManagement of intellectual property
rightsBasic philosophy
In the mid-term business plan newly started in
FY 2020 (NF2022), we have reconstructed ourbusiness foundation by increasing profits inexisting business areas through selection andconcentration and acquiring new business areas.
Moreover, as the social demands on corporations
increase, the quality of risk management is also
being questioned.
In order to maintain relationships of trustwith stakeholders and stably continue to dobusiness, the VALQUA GROUP is constructing amanagement system that can accurately assessand control diversifying risk and its impact.

Risk management system*Conflict minerals: Minerals thatprovide a source of funding forarmed groups that commit
human rights violations andcorrupt practices in conflict areas

Even in the previous mid-term businessplan (NV·S8), the VALQUA GROUP took steps
to strengthen risk management. The “RiskManagement Committee” that was pivotal tothese efforts was established for the central
management of the risks that the Group incurs in
the course of doing business, which are becoming
more diverse with the rapid changes in thebusiness environment in Japan and overseas andthe expansion of the Group’s business area.
With the Risk Management Committee at
its core, the risk management system will flexibly
and accurately respond to the changes in theenvironment that surrounds the VALQUA GROUP
through the central management of the businessrisk that surrounds Group companies both inJapan and overseas.

Content of efforts• Construction of system for the early discovery of illegal acts and corrupt
CSR promotion

Prevention of corruption and bribery

http://www.valqua.co.jp/
social/csrprocurement/

Matters confirmed by CSR procurement questionnaire

Actual results

93

06

Basic Procurement Policy,
VALQUA GROUP CSR
Procurement Guidelines

Handling of conflict minerals*

Environment

Note: Survey of main suppliers (21 companies)

16

there was only one case in which guidance forreform was given. Each supplier is given feedbackon the results of the survey to share information
and request further promotion of CSR activities. We
make continued efforts to collaborate with the
suppliers and support them in order to realize CSR
procurement. Suppliers who do not meet thetargets receive guidance for reform and areprovided with individualized educational materials
so that we can continue to do business with them.
In the future, we will continue to refine thecontent of the questionnaire in order to further
promote CSR activities, and we aim to firmly
establish CSR procurement through individualized
support for suppliers.

Compliancepractices• Formulation of policy on compliance with laws and rules, education of
employees• CSR promotion system • Extension to own company’s suppliers• Prevention of corruption• Prohibition of abuse of superior bargaining position• Construction of system for management of imports/exports andappropriate imports/exports• Management and respect for intellectual property• Management of confidential information and personal information on
customers, employees, etc.

Risk management system• Proper handling of conflict minerals

good health• Consideration for safety measures and physical burden on workers inarrangement of facilities and machinery, consideration for environment• Ensuring a stockpile of emergency supplies for emergency situations,
including natural disasters• Advance agreement on who to contact outside of the company (surrounding
residents, etc.) in the case of an emergency, disaster, or accident• Measures for business continuity planning (BCP) in the event of alarge-scale disaster, BCP system for emergencies

In order to ensure legal compliance throughout
the entire Group, we conduct surveys of relatedlaws, not only within Japan, but also as they apply
to our subsidiaries overseas, while receiving
support from law offices, consultants, and services
that provide legal information, so that our businesspractices will be in compliance with the law. The
entire Group maintains complete readiness tocomply with laws and ordinances that greatly differ
in content in each country and region.

Thorough prevention of bribery
Secretariat

evaluation, and treatment of employees; education for employees• Environmental protection, management of chemical substances• Promotion of green procurement• Maintenance of a work environment in which employees can work in

Legal compliance in Group companies
in Japan and overseas

Prevention of corruption

Chairperson• Respect for human rights, prevention of human rights violations• Prohibition of inhumane labor practices• Prohibition of discrimination in hiring, assignment, education,

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.

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, 2020)

Sustainability Report 202017

Compliance07

Compliance08

Compliance with environment-related laws
and ordinances

Environmental risk
management
Framework for activity
Production-related companies in Japan andoverseas implement environmental activities inaccordance with the ISO 14001 system, and inparticular, they perform operational level evaluations
for legal management. We are strengthening oursystem for preventing violations from occurringby taking measures to discern weak points, makelatent risk manifest, and prevent it.
In FY 2019, an effluent regulation violation was
discovered at the Chinese office, and they received
administrative guidance, but countermeasures
were taken, and the situation has now improved.
China’s environmental regulations have become
stricter in recent years, and administrative control
is more frequently applied. We are promoting theconstruction of a system to prevent violations fromoccurring by constructing an internal auditing
system for compliance with legal regulations at all
production-related companies.
Moreover, there have been no complaints of foulodors or noise from neighbors of any of our offices.
VALQUA GROUP’s Environmental Philosophy

Compliance

Strengthening of risk management
for chemical substances is being called forworldwide, and information on the chemical
substances that our products contain is being
appropriately provided downstream throughchemSHERPA*.

Basic philosophy
In the VALQUA GROUP, “compliance” does notstop with legal compliance. We see complianceas striving to respond to the demands and trustof 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.

Maintenance, operation, and auditingof legal compliance system for eachproduction-related company
Production-related companies in Japan sharea list of laws and ordinances specified by ISO
14001, and they continually engage in activity
to prevent oversights and differences ininterpretation between companies by verifying
points of change monthly. Even with respect tolaws specified by each of the overseas production
companies, sharing of monthly points of change
has begun within the Group as a whole.
Each company is proceeding to prepare asystem for internal auditing of legal compliancebased on this list of laws and ordinances, andoperation of this system will begin in FY 2020
with the production companies in Japan as wellas those in China, where there have been majorchanges in legal regulations.

Legal compliance*chemSHERPA: Name of a data
entry support tool andinformation transfer files releasedin October 2015 at the initiativeof the Ministry of Economy,
Trade and Industry to promote
the appropriate provision of
information on the chemical
substances contained in products
to downstream companies fromupstream companies throughout
the supply chain

Compliance Manual
A Compliance Manual was established in 2003
to provide guidelines for all Group employees tofollow in their work, and it has been translated into
6 languages (Japanese, English, simplified Chinesecharacters, Korean, Thai, and Vietnamese) and isshared by the Group.
Beginning with general matters such as
law, environmental protection, information
management, and antisocial forces, it describes

For efforts toprevent harassment:
See p. 24

VALQUA GROUP’s Environmental Policies
Compliance system

In accordance with VALQUA’s Corporate
Philosophy, with the realization that thepreservation of global environment ismost important common task facing
mankind, VALQUA strives to preserve theglobal environment in its every aspect ofcooperate activities, and aims to form asociety where the sustainable growth ofbusiness enterprise is possible.

In compliance with the Environmental Principles, we set
following policies and every individual within the company
acts and fulfills the responsibility as a good global citizen.

Board of Directors

1 Establish the environmental management system of entire VALQUAGROUP, endeavor to maintain and improve it, and we ensure its
implementation.

2 In addition to abiding by laws, regulations, treaties, and agreements

at home and abroad, we also set voluntary environmental standards
and contribute to the preservation of environment further.

Compliance Committee
Reports

Compliance Promoting Committee

3 Working in cooperation with other industries and society, we strive tocreate and provide ecologically friendly products and services.

4 In all spheres of our cooperative activities, with vigorously pushing

forward of 3R (Reduce, Reuse, Recycle), we strive to ensure theconservation of resources and energy, the reduction of waste and the
avoidance of polluting risks.

5 We disclose our environmental information widely to the global

Directs/Supervises

Ensuring the transparency andreliability of business

Chairperson: CCO
Members: executive officers
Secretariat:

Compliance
Promotion Division

Supervises

Compliance
Supervisory Divisionsociety to say nothing of the local community, and endeavor toconcert and cooperate with society.

6 Through the environmental-related education, we make efforts tohave all individuals of VALQUA GROUP understand the Environmental
Charter and enhance awareness of the environment.

Reports

Directs/Supervises
Each business division/Each Group company

compliance requirements as they pertain to sales
activity, the work environment, and personal
conduct (insider trading, conflicts of interest), and
it is utilized as a manual that all employees must
understand and comply with.

Compliance system
We have established a Compliance Committee andCompliance Promoting Committee, and we strive
to maintain and improve the Group’s compliancesystem with the Chief Compliance Officer (CCO)
appointed as the highest-ranking person responsible
for the promotion of compliance at its center.
With the basic policy of strengthening theGroup’s system for compliance and nurturing
the legal 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
to the creation of a foundation for healthy andsustained growth of the company through bothpromotion and supervision.

Reporting, consultation, andnotification system
As a mechanism whereby Group employees canengage in reporting, consultation, and notification
related to laws and internal rules and regulations,a system has been established for reporting,consultation, and notification through multiple
external and internal liaisons.
This system is operated independently fromthe ordinary chain of command, and information isanonymized so that no employee will be placed at
a disadvantage for making a report, consultation,or notification. The number of cases of reporting,consultation, or notification increased from 5
in FY 2017 to 19 in FY 2018, and 17 in FY 2019.
Based on this system, we strive to handle reports,
consultation, and notifications appropriately, and weare continually promoting utilization of the system.

External liaisons(1) External attorneys(2) Business ethics hotlines operated by external
contract organizations
Internal liaison (Accommodating Japanese,
English, simplified Chinese characters,
traditional Chinese characters, Korean, Thai,and Vietnamese languages)(3) Opinion boxes(4) CEO Direct Line for direct communication
with CEO(As of June 1, 2020)

18

Sustainability Report 2020

Sustainability Report 202019

Environment

Environment
09

Prevention and reduction of leakage ofenvironmentally hazardous substances

Efforts to prevent and reduceleakage

10

Environmental burden
accompanying businessactivities in FY 2019

Introduction of new system topromote activities

Change in main environmentalload

In the VALQUA GROUP, we get an overall pictureof 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.
We combine this information withperformance metrics (sales and the output of
production companies) for use in theestablishment of targets and the evaluation oflevels of achievement.

Against the background of increasing recognitionof the importance of ESG, a CSR informationcollection system was introduced in FY 2019 forthe accurate and rapid collection of mainly
environment-related data from Group companies
in Japan and overseas and its central
management. We are promoting development of
the system so that the collected data can bedisclosed on the basis of GRI Standards.

Reduction of environmentally hazardous
substances in business

Scope 3
http://www.valqua.co.jp/
social/environment/

Change in greenhouse gas emissions (production units + indirect units)(t-CO2)25,00020,000Material flow

INPUT

Although it was predicted that the amount ofgreenhouse gas emissions and the final disposal
volume for wastes would increase owing to theeffects of an increase in production, production
has decreased because of various factors. We havepromoted streamlining and cost reduction
activities aiming for an improvement of 1% ormore in the primary units of each, but because of
the effect of production efficiency, etc., the result
was worse in terms of primary units.

OUTPUT

Basic sales unit (t-CO2/¥M)
0.60
20,36019,20615,00020,246
137

8,735

9,547

0.46710.4665

9,771

164,790GJ

CO2 emissions – Total

20,326t
5,000Electric power

38,340MWh

Amount supplied by solar power

48MWhA-type heavy oil

141,100ℓ

Liquefied petroleum gas (LPG)

62,630m3

Natural gas

121,129kg

Municipal gas

487m3

Kerosene

141,595ℓ

Light oil

15,754ℓ

Gasoline (for company cars)

54,234ℓ

Production related
Other

VALQUAGROUP
Business
activities

582t

Sludge115t

Wastepaper

89t

Other (waste acid, waste alkali, waste oil, wood chips,

175t

Tap water

71,973m3

Industrial water, etc.

313,727m

Chemical substances* – 21 types

56,762kg*Chemical substances: Include substances that need to be reportedby the Pollutant Release and Transfer Register (PRTR) Act andemissions assessed according to similar overseas regulations

576

1,000

322

0.35

Domestic production
Domestic new subsidiaries
Overseas new subsidiaries
Basic sales unit

Basic sales unit (t/¥M)
0.020
0.01990.01590.0156

0.015

960
0.015

850
800
600

200
0

770

758
643

694

569

235

264

17

17

2015

2016

511

501

391

Domestic indirect
Overseas production

Sustainability Report 2020

0.40

2019
(Fiscal year)

0.0195

252

240
7
2017

0.010

0.005

10

7
2018

259
7
2019
(Fiscal year)

Domestic production
Domestic new subsidiaries
Overseas new subsidiaries
Basic sales unit

Starting in FY 2014, we began to calculate
greenhouse gas emissions for the entire supply
chain, and we have now been doing so for 6 years.
For details of Scope 3 and other environmentrelated data, please see our website.

Final disposal volume for wastes

9,380

392
2018

0.45

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

400

20

2017

0.50

0.4216

10,023

400

2016

(t)
1,200

3

Object: VALQUA GROUP business offices in Japan and overseas (excluding 30 bases with small scale, such as some regional sales offices, representative offices, and overseas
sales companies)
Period of tabulation: April 2019 to March 2020

572
2015

9,497

10,237

Domestic indirect
Overseas production

961t

Waste plastics

waste textiles, scrap metal)

Water use – Total 385,700m3

0

322t

Wastes – Total

9,899

20,004t

0.55

10,6240.4017In FY 2019, the absolute amount of emissions
decreased compared to FY 2018 by 257t. The
breakdown was a 253t reduction owing to theeffects of the reduction in production and a 216t
reduction reflecting the effects of revisingtemperature control management throughstreamlining and cost reduction activities andupdating superannuated facilities. Moreover, theeffect of changing the electricity emission factor
was great, resulting in a 919t reduction, but there
was an increase of 1,131t owing to the effects ofdeterioration in efficiency from operation of a
newly introduced local ventilation facility and adecrease in orders received, so there was a 5%
increase in terms of the basic sales unit.

Greenhouse gas emissions (Scope 3)

20,326

10,168441
0.425410,000

Energy – Total

20,583

Greenhouse gas emissions (Scope 1/2)

0.000

In FY 2019, the absolute amount of waste
discharge increased compared to FY 2018 by 190t.
The breakdown was a 10t reduction owing to theeffects of the reduction in production and a 15t
reduction reflecting the effects of failure
improvement through streamlining and cost
reduction activities and improvement of yield, butthere was an increase of 215t owing to the effects
of deterioration in efficiency from trial
manufacture accompanying a change in process
due to an increase in lines, as well as from adecrease in orders received, so there was a 33%
increase in terms of the basic sales unit.
Note: Greenhouse gas emissions are calculated by annuallyreconfirming the emission factors for each fuel andelectric power in the greenhouse gas emission calculation,
reporting, and announcement system based on the “Acton Promotion of Global Warming Countermeasures”(Global Warming Act). Scope 1 refers to direct greenhousegas emissions from the business itself, Scope 2 refers toindirect emissions accompanying the use of electricity,heat, and/or steam supplied by another company, andScope 3 refers to indirect emissions occurring from theprocurement of raw materials through production, sale,and disposal, excluding Scope 1 and Scope 2. Since theemission factors for electric power are unclear at someoverseas bases, a substitute value is uniformly applied.
(FY 2015, 0.000579 t-CO2/kWh; FY 2016, 0.000587 t-CO2/
kWh; FY 2017 to FY 2018, 0.000512 t-CO2/kWh; FY 2019,
0.000488 t-CO2/kWh)

Sustainability Report 202021

Safety and Health11

Human Resources and Human Rights
12

Occupational health and safety

Education and training of safety
and health supervisors(1) Eradicating legal violations throughimprovement of legal compliancemanagement and level of supervision
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.

(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 not
only routine work and infrequent operations, butalso transfer of production bases.

Safety and health promotion
activities
VALQUA GROUP Safety and Health Day
The VALQUA GROUP has designated May 18 of
every year as “VALQUA GROUP Safety and HealthDay”, and Safety and Health Conventions are held
at all Group bases, including those overseas.

Incidence of accident occurrence(Cases)15

15

14

Expansion of support system forchild care and nursing care

16
4

10

12
7

8

7

2

Serious accidents

1

7

6
2015

2016
Labor accidents

8
3

11

5

0

http://www.valqua.co.jp/
social/human_resources/

2017
Fires

5

4

2019
(Fiscal year)
Commuting accidents

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

2018

Management of mental andphysical health
http://www.valqua.co.jp/
social/safety-health/environment/

Ensuring of the diversity of human resources(human resources development)

Creating a workplace environment
and various systems
Creating an environment in which
employees 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 advance training to employees who are to
be posted overseas and supports foreign nationals
working in Japan with Japanese language
education. Many employees have been stimulated
by cooperation that transcends language andcultural boundaries and have made new realizations.
System that supports flexible ways of working• Career return system• Shortened work hours for family care
• Flex time system (core time 13:00–15:00)• Child-care leave (until child reaches age of 2 years

and 6 months)• Shortened work hours for child care (until childreaches 3rd year of elementary school)• Special paid leave for child care
• Day off on child’s birthday• System for obtaining paid leave in 1-hour units• Family care leave (continuous for maximum of 3 years)• Newly established remote work system(As of June 1, 2020)

Certification under international occupational health andsafety management system ISO 45001
Activities in VALQUA INDUSTRIES SINGAPORE

Certification updated in March of 201922

Sustainability Report 2020

Appropriate selection and execution of seals are indispensable to preventing accidents at plants, which havebeen occurring frequently in recent years. The VALQUA GROUP is drawing upon all of its resources to serve as an
H&S business that works together with customers to solve such problems while creating new corporate value.
As part of this, VALQUA INDUSTRIES SINGAPORE (the former Singapore Branch of VALQUA INDUSTRIES(THAILAND)) obtained certification under occupational health and safety management system “OHSAS
18001” in 2016. This was done to make it possible to collaborate with local corporations. In March of 2019,the succeeding “ISO 45001” certification was obtained, and every effort is made to ensure that the
management systems we construct are the most up to date, so as to prevent accidents at customers’ plants.
And the VALQUA GROUP’s 10 Action Principles include “Always treat health and safety with top priority”.
In the future, we will go on contributing to the realization of occupational health and safety, not only in ourown workplaces but also at the customer’s facilities.

Mechanism for goal management andpersonnel evaluations
In the VALQUA GROUP, goals for individual
employees are established on the basis of theannual policy and the mission of the unit.
Employees strive to follow “THE VALQUA WAY”
and the “image of the ideal human resource” ateach level of the organization.
Issues and points requiring improvement areclarified through close communication in periodic
face-to-face meetings within the department.
While maintaining a fairer personnel evaluation
system, we connect this to human resources
education that promotes the sustained growth of
the VALQUA GROUP. Moreover, training combinedwith actual practice is provided to managers that
perform assessment of employee performance.

Employee education through events
In the “VALQUA CUP All Japan Dance Championships”
which are held as part of the Group’s activities tosupport sports, over 100 officers and employees
participate in an event held in cooperation withthe hosting organization. This is one way ofpracticing CSR activities with the background of“THE VALQUA WAY”, and at the same time, we
consider it a valuable learning opportunity in aworld that is completely different from our usual
work. Moreover, through this project, the spirit of
hospitality is further fostered in our employees.

Education of next-generalmanagement candidates
The VALQUA GROUP provides selected mid-level
employees with management candidate
education based on a long-term plan. Step-up
stages are established every few years, and we aim
to educate human resources with the mentality
and skills suitable for managers in charge of therapidly changing next generation.

Human resources education at
Chinese bases
In 2007, the VALQUA GROUP established a China
Human Resources Development Center inShanghai, China. Shanghai is the Group’s largest
production base, and we are aiming to construct
an educational system well suited to local
characteristics so as to accelerate localization in
China. We continuously provide “China
Management Training” to nurture the humanresources to take charge of management at the
local bases, and while raising the standards ofknowledge and abilities, we select the mostoutstanding human resources. A “China Human
Resources Development Committee” wasestablished in 2018 to foster consciousness ofhuman resources development, and a system has
been set in place for independent local cultivationand education of human resources.

In-house language classes
The VALQUA GROUP is making efforts to improve
the linguistic ability of its employees. In-house
instructors teach Chinese and Korean language
classes, and the attendees can choose
introductory courses or qualification courses
depending on their own level. Moreover,
employees can engage in online English
conversation as part of the language learning
support system.

Sustainability Report 202023

Human Resources and Human Rights

Customer Satisfaction
13

Respect for human rights

Creating an environment in which
employees can be active regardlessof gender

14

Percentage of women in
management positions(%) 12

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 to support
women’s career development and growth.

10

Promoting employment of persons
with disabilities

0

Aiming for harmonious coexistence with thecommunity, the VALQUA GROUP proactively accepts
interns with disabilities from special education
schools in the community. While communicating
the joy and significance of working to persons
with disabilities, we support job retention andindependence after joining the company.

8

11.1

2015

2016

Rate of employment of
persons with disabilities

Seal Quick Searcher

2017

2018

2.0
1.5

0.0

2019 (Fiscal year)

Target: Meet or surpass the statutory employment rate(%) 3.0
2.5

Quality Policy,
Quality Management System
http://www.valqua.co.jp/
social/safety_quality/

2

The VALQUA GROUP established the “VALQUAGROUP Basic Policy on Human Rights” in March of2017. This policy was developed on the basis of theUnited Nations Global Compact. Each company in
the Group disseminates information on the Basic
Policy on Human Rights, confirms understanding,and conducts assessments of the status of progresson diversity. By analyzing the results and making
improvements, we are raising awareness of humanrights and further promoting diversity.

Efforts to prevent harassment are indispensable
to promoting respect for human rights in theworkplace. To this end, we promote educational
activities through the compliance seminars
that are held continually. Instructors make therounds of all bases in Japan and overseas to lead
discussion of cases, provide training, and reconfirm
proper workplace behavior.

7.9

10.1

4

1.0

Reforming ways of thinking within
the company

7.2

9.1

6

Respect for human rights

Efforts to prevent harassment

Target: 10% by FY 2020, 15% by FY 2027

2.06

1.94

2.08

2.0

2.0

2.0

http://www.seal.valqua.co.jp/seal/

2.66

New Gaskets and GasketingTechnology

2.2

The industry’s first “gasket
manual”, which provides
easy-to-understand explanationsof the technological basics ofgaskets, bolting, and flange joints

2.20
2.2

The “Seal Quick Searcher” is a
website that makes it possible tosearch for the seal product that isrecommended based on the use
environment in order to prevent
leakage trouble owing toselection or application of a seal
product. Users can also confirm
the clamping force of the seal
product they select.

http://www.valqua.co.jp/
technical/gasket-introduction/

0.5
2015

2016

2017

Rate of employment of persons with disabilities

DVD-based training toprevent harassment
In not a few cases, the person who engages inharassment is not aware of it. In the VALQUAGROUP, we have been providing DVD-based
training on the theme of preventing harassment
to Group employees in Japan and overseas since
FY 2018. At present, this is provided only in theJapanese language, but the exchange of opinions
after watching the DVD provides employees with
an opportunity to say what they think and listen
to the opinions of others, prompting reflection
on their own words and actions. Moreover, allemployees are asked to state their impressions
after viewing the DVD, and we strive to connect
this feedback to harassment prevention that isgeared to the tendencies of individual offices.

20182019 (Fiscal year)

Statutory employment rate

VALQUA GROUP Basic Policy on
Human Rights
http://www.valqua.co.jp/
social/human_resources/

VALQUA technical journal“VALQUA Technology News”
http://www.valqua.co.jp/tech/technical/

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 from each unitthat is involved in research and development andhuman resources development, beginning withthe business divisions and groups that exercise
control over the production-related companies
and sales-related companies in Japan and overseas.
The Committee increases the effectiveness of theentire 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 forthe benefit of customer safety
The VALQUA GROUP not only manufactures andsells seal products but also provides educational

support for technicians to corporations related
to plant engineering in order to reduce leakage
trouble caused by improper selection of sealmaterials or defective construction, which is a causeof accidents at plants.
In 2014, “Seal Training Centers (STC)” were
established in 2 places in Japan and 5 places
overseas (China, South Korea, Taiwan, Thailand,
and Vietnam) as forums for learning procedures forworking with seal materials. We also provide on-siteteaching and assembly-type training modules sothat customers can experience this training in theirown companies.

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 nextgeneration evaluation technology for reproducing
and verifying use environments on 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.

VALQUA Seal Course
As a safe operation measure for chemical plants, etc.,
the VALQUA GROUP holds the “VALQUA Seal Course”
together with China Petroleum and Chemical Industry
Federation. This course has been held in China every
year since 2003, and it was held for the 14th time in FY
2018. Unfortunately, the FY 2019 session wascancelled because of the effects of the novel
coronavirus, but over 100 technicians take part in thecourse every year. This course is promoting safe
operation through technical lectures on the proper
handling of seal materials and the various products.
Scene of FY 2018 course

24

Sustainability Report 2020

Sustainability Report 202025

Community

Aiming to become a truly global corporation

Company Overview and Map of Bases
15

On October 1, 2018, we changed our corporate name to “VALQUA, LTD.” to mark the “second founding”
of our company. VALQUA will celebrate its 100th year in business in 2027. We will continue to takeon challenges with the world as our stage in order to draw closer to our stakeholders and meettheir expectations.

Community

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 has
transgenerational appeal and is loved by persons
with disabilities as well, with leagues in 92
countries and regions throughout the world.
In 2019, the VALQUA GROUP supported
competitions such as the “VALQUA CUP All Japan
Dance Championships”, Japan’s top pro dancecompetition; “All Japan Championships forPrimary, Junior and Senior High School Students”,
the national competition for the junior youth
generation; and “Japan Blind Dance
Championships”, the national competition forvisually impaired persons.
Among these, we have particularly
supported the “VALQUA CUP” by collaboratingwith the host organization to plan and executethe competition with about 100 of our employees
participating as staff. This is one way of practicing
CSR activities based on the Corporate Philosophy
of “THE VALQUA WAY”, and it leads to experiencessuch as “Run a business that contributes tosociety” and “Be an inspiration to the customers”.

VALQUA KOREA CO., LTD.

(Established 2004)

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.

APPLIED R&D InstituteAchievements in FY 2019
Support for ballroom dance
Promoting the watching ofballroom dance,collaborating in theoperation of competitions
Total number ofparticipants:

285

SHANGHAI VALQUA FLUOROCARBONPRODUCTS CO., LTD. (Established 1995)- ADVANCED FLON TECHNOLOGIES(SHANGHAI) CO., LTD.
- SHANGHAI VALQUA POLYMERCOMPOSITE MATERIALS CO., LTD.
VALQUA SEAL PRODUCTS(SHANGHAI) CO., LTD. (Established 2000)
VALQUA CHINA RESEARCH INSTITUTEVALQUA (SHANGHAI) TRADING
CO., LTD. (Established 2002)

Seal Training Centers (7 locations)
Overseas consolidated subsidiaries(13 companies)
Research and development bases(5 locations)(Name changed from VALQUA IIDA TECHNOLOGY CO., LTD.
in January 2019)(As of June 1, 2020)• VALQUA FFT INC.

VALQUA AMERICA, INC.

October 1, 2018
Corporate name changed to VALQUA, LTD.

(Established 1998)

VALQUA NGC, INC.

(Changed to consolidated subsidiary in 2017)

TAIWAN VALQUA INDUSTRIES, LTD.

persons

VALQUA VIETNAM CO., LTD.

(Established 1969)(Established 2008)

TAIWAN VALQUA ENGINEERING INTERNATIONAL, LTD.

VALQUA
INDUSTRIES(THAILAND), LTD.

LINED TANK TECHNICAL CENTER(Established 2000)(Newly established in February 2019)(Established 1988)

VALQUA INDUSTRIES SINGAPORE PTE. LTD.
(Established in 2018 upon abolishment of Singapore
Branch of VALQUA INDUSTRIES (THAILAND), LTD.,established in 2009)

Sales by region (¥M)

Number of employees by region*Rounded down to nearest 1 million yen*Including temporary employees (204 on average)

North
America

Other

North America(0.3%)(2.0%)

161

4,233

42

(8.8%)At the “Japan Blind Dance Championships”, many pairs
teaming a visually impaired person with a sighted
person participate“All Japan Championships for Primary, Junior and SeniorHigh School Students”, where a total of 338 pairs ofjunior athletes participatedAsia“VALQUA CUP All Japan Dance Championships” isgaining in regard both in Japan and overseas

9,859(20.5%)(As of end of
March 2020)

Contributing to the development of
the Japanese dance world
The VALQUA GROUP’s six years of support for
ballroom dance have been recognized in theawarding of the “Imperial Highness Prince Mikasa
Award” to CEO Toshikazu Takisawa in Septemberof 2019 as the person who has contributed mostto the development of the Japan’s ballroom
dance world.

Achievement award trophy

26

Sustainability Report 2020

Coexistence with the local
community
Local Community Thanksgiving Day
What can we do to build a bountiful future withpeople throughout the world? One answer to thisquestion is the “Local Community Thanksgiving
Day” that we hold every year.
At the business offices, sales bases, andfactories of VALQUA GROUP companies
throughout the world, we conduct volunteer
activities rooted in the local community. In FY
2019, a total of 1,508 employees and their family
members participated in these activities in 46
places around the world. The activities included
picking up trash along shorelines and roads,
planting flower beds, and providing support tonursing care institutions.

Asia

Japan

33,958Support for activities of groups
that contribute to society,Support for refugees
http://www.valqua.co.jp/social/action_program/

2,080

48,212

million yen

1,054

peopleJapan(As of end of
March 2020)(47.3%)

984(50.7%)(70.4%)We plan to post country-by-country information onnumber of patents held and research and development
expenditures separately on the CSR page of our website.
http://www.valqua.co.jp/social/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: 438 (Group employees: 1,876, as of March 31, 2020)
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

Sustainability Report 202027

Value & Quality

VALQUA GROUP
About the cover
The VALQUA GROUP used photographs of children
on the cover of this Sustainability Report to reflect
our wish to contribute to the “Creation of a Bright
Future” through business that provides customers
with safety, peace of mind, and prosperity, andthrough CSR activities such as support for
ballroom dance. We would like to see a future inwhich all children can be active and succeed insafety 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 for photo contributions.

Address inquiries to VALQUA, LTD.
General Affairs and Human Resources GroupThinkPark Tower 24F, 2-1-1 Osaki, Shinagawa-ku, Tokyo 141-6024 JAPANhttp://www.valqua.co.jp