Tokuyama Corporation
CSR Report 2011

In Harmony with People,
Society and the Environment

Corporate Social Responsibility Division
Kasumigaseki Common Gate West Tower
2-1, Kasumigaseki 3-chome, Chiyoda-ku, Tokyo 100-8983, JapanCSR Report 2011

Tel: +81-3-6205-4835 Fax: +81-3-6205-4882
www.tokuyama.co.jp

Cover Story
The leaves on the cover symbolize people, society and the environment. A combination of orange and green conveys Tokuyama’s vibrant, active and dynamic corporate
image. Also, the design on the cover depicts the fusion of two colors, with the green
on the top half of the page and the orange on the bottom half of the page blending
with each other in the middle. This represents the positive stance of the TokuyamaGroup toward pursuing corporate growth and achieving its Centennial Vision.

The year 2011 is the International Year of Chemistry (IYC 2011). The
United Nations General Assembly proclaimed 2011 as theInternational Year of Chemistry (IYC 2011) to mark the 100th anniversary of the Nobel Prize in Chemistry awarded to Madame Marie Curie.
www.chemistry2011.org/

This report is printed on FSC-accredited paper with pure plant oil ink, which contains no volatileorganic compounds, utilizing a dry printing process that uses no water, thus precluding release of any
harmful effluents.

Date of issue: October 2011
Next issue: Scheduled for October 2012

Contents

Toward Achieving theCentennial Vision
Accelerating Our Growth Strategies
Tokuyama is promoting the following growth strategies under its management slogan,

Toward Achieving theCentennial Vision

Centennial
Vision1 Accelerating Our Growth Strategies“Venture Spirit & Innovation,”
toward achieving its Centennial Vision.

2 The Tokuyama Group at a Glance
4 Top Message
6 Fiscal 2010 Highlights

8 Tokuyama’s CSR
16 Special Features

Human Resource-based Management
Promotion of CSR Activities

16 GROWING
Tokuyama Aggressively
Expanding Growth Businesses

24 CREATING
Tokuyama Creating New
Technologies and Businesses

32 INTEGRATING

Centennial Vision
February 16, 2018 will mark Tokuyama’s centennial founding anniversary. The basic strategies under
the Centennial Vision call for a selection and concentration approach to strengthen strategic growth

40 Promoting Environmental
Management
40 Tokuyama’s Environmental
Management
41 Environmental Accounting
43 Reducing Air and Water Pollutants

Recycling

46 Site Report
46 Tokuyama Factory

supply capability.

our basic strategies.

An Ideal Tokuyama Group“A manufacturing company that exists in harmony with society and creates a brighter future with thevitality of its human resources and its creativity based on chemistry”
Editorial Policy• The CSR Report 2011 has been compiled with the aim of bringing Tokuyama’s activities—directed at meeting its

CREATING
Create New Businesses (See page 24)

corporate social responsibility in fiscal 2010—to the attention of all concerned, including shareholders, investors,

Tokuyama creates environmental technologies and products by giving due consideration to social contribution factors and environmental impact reduction

trading partners, employees and their families, people living near its production sites and other people in general.

from the product development stage. Under its Centennial Vision, Tokuyama has defined a growth strategy, “Create New Businesses with Global• As with the 2010 edition, Tokuyama asked Ms. Eriko Nashioka of the Institute for Environmental Management

Competitiveness.” To help society solve worsening environmental issues through chemical technologies, Tokuyama will accelerate the development of suchinnovative products as aluminum nitride and materials for fuel cells.

continuously seek feedback and ratings that help the Company to fulfill its social responsibility. Details of Ms.
Nashioka’s comments are available on page 50.
• This CSR report has been prepared based on the Environmental Reporting Guidelines (Fiscal 2007 edition)
published by the Ministry of the Environment.
• This CSR report is also available via Tokuyama’s website at:www.tokuyama.co.jp/eng/enviro/

Scope of the Report
Period:All performance data is for fiscal 2010, from April 1, 2010 to March 31, 2011. Certain activities
undertaken after April 1, 2011 are included.

50 Third-Party Comments/In Responseto Third-Party Comments

Malaysia Factory for the manufacture of polycrystalline silicon for solar cells, which will boast an annual capacity of 6,200 tons when launched. By making
this new factory the second flagship manufacturing base for this product following its Tokuyama Factory, Tokuyama aims to keep improving its world-class

47 Kashima Factory
48 Activities of Group Companies

Upholding a basic strategy, “Strengthen Strategic Growth Businesses” under its Centennial Vision, Tokuyama has begun the construction of a newhuman resource-based management and CSR activities, as these activities provide the foundations of

Accounting to offer independent comments on this report. The purpose of the independent comments is to

44 Reducing Waste and Promoting

Strengthen Strategic Growth Businesses (See page 16)

businesses and to bolster international competitiveness. We will concentrate our energies on promoting

Tokuyama Bolstering
International Competitiveness

GROWING

Companies: Tokuyama Corporation (Environmental performance data is for the Tokuyama Factory and theKashima Factory.); certain environmental performance data includes total values for 11 major produc-

51 Editor’s Notes

tion companies within the Tokuyama Group (see page 48).
Region:Activities in Japan (including some overseas Group companies)

Date of issue: October 31, 2011 (The next edition will be issued in October 2012)

INTEGRATING
Bolster International Competitiveness (See page 32)

The source of the Tokuyama Factory’s competitiveness is the unparalleled energy efficiency in manufacturing operations and superior technologies
nurtured through these operations. By refining its integrated manufacturing operations, Tokuyama is working to establish a highly profitable businessstructure. At the same time, by developing the Tokuyama Factory into its “Mother Factory,” the Company will continue to reinforce its international competitiveness. Furthermore, we aim to make the Tokuyama Factory a manufacturing base that coexists and grows with local communities while establishingclose communication with our stakeholders.

1The Tokuyama Group at a Glance(as of March 31, 2011)

Company Outline

Tokuyama’s Global Network

Company name:

Tokuyama Corporation

Established:

February 16, 1918

Capital:¥53,458 million

Registered address:

1-1, Mikage-cho, Shunan-shi, Yamaguchi, Japan

Head office:Kasumigaseki Common Gate West Tower, 3-2-1,
Kasumigaseki, Chiyoda-ku, Tokyo, Japan

Branches and offices:

Sendai, Nagoya, Osaka, Takamatsu,
Hiroshima and Fukuoka

Production andresearch sites:

Tokuyama Factory, Kashima Factory and
Tsukuba Research Laboratory

Number of consolidated
subsidiaries:

50

Number of equity-method
companies:

China• Tokuyama Trading (Shanghai) Co., Ltd.
• Shanghai Tokuyama Plastics Co., Ltd.
Manufacture and sale of microporous films• Tianjin Figaro Electronic Co., Ltd.
9

Manufacture and sale of gas sensors and applied products• Tokuyama Chemicals (Zhejiang) Co., Ltd.
Manufacture and sale of fumed silica

Sales Breakdown by Segment (Fiscal 2010)
OthersTaiwan¥41.2 billion• Taiwan Tokuyama Corporation(12.7%)
Advanced Components¥43.2 billion(13.3%)

Manufacture and sale of high-purity chemicals forelectronics manufacturing

Specialty Products
Total¥324.9billion*Cement¥96.7billion

Germany(29.8%)• Tokuyama Europe GmbH
• Tokuyama Dental Deutschland GmbH

Chemicals¥79.1billion¥64.4 billion

USA• Tokuyama Korea Co., Ltd.
• Hantok Chemicals Co., Ltd.

• Tokuyama America Inc.
• Figaro USA, Inc.

ThailandFrance* Includes inter-segment sales and transfer of ¥35.1 billion• Tokuyama Siam Silica Co., Ltd.

• Eurodia Industrie S.A.

Manufacture and sale of precipitated silica

Design, manufacture and sale of electrodialyzers

Sales by Region (Fiscal 2010)

Manufacture of high-purity chemicals forelectronics manufacturing

Sale of dental materials and equipment
Total¥289.7Asia• Tokuyama Electronic Chemicals Pte. Ltd.

• Tokuyama Dental Italy S.r.l.

¥16.8 billion(5.8%)

Singapore

Italy

Other

billionSale of gas sensors and applied products

Manufacture and sale of photoresist developer

Sale of dental materials and equipment(24.4%)(19.8%)South Korea

Japan• Tokuyama Asia Pacific Pte. Ltd.

¥227.9 billion

Malaysia(78.7%)• Tokuyama Malaysia Sdn. Bhd.

45.0 billion

Manufacture and sale of polycrystalline silicon(15.5%)Net Sales

Operating Income

Number of Employees(¥ billion)(¥ billion)(persons)

350

40

6,000

300

307.4

292.7

300.9

30

250
200

35.3

34.7

289.7
273.1

5,000

28.5
27.3

192.6

206.1

202.6

187.9

4,000

197.7

22.3 22.7

20
14.8

100

3,000

20.1

150

16.4

15.9

2,000

2,067

2,127

2,161

2,172

2,195

10
1,000

50
0

0
06

07

Non-consolidated

2

5,493*

5,444

5,295

5,057

4,852

08

Consolidated

09

10

(FY)

0
06

07

Non-consolidated

08

Consolidated

09

10

(FY)

06

07

Non-consolidated

08

Consolidated

09

10

(FY)

* Including 709 overseas employees

3Top Message

The underlying principle of Tokuyama’s

and business execution, these reforms included the appointment of angenerated inside and outside of the Company as raw materials and fuel for

external director and the introduction of an executive officer system. This

cement production. Our promotion of recycling activities, which include not

CSR Report 2011 has been prepared for the purpose of introducing theonly waste materials generated inside the Company but also those accept-

activities that the Tokuyama Group promotes to remain a manufacturing

ed from third parties, contributes to the maintenance of our high zero-company in harmony with society, in accordance with its Centennial Vision.

emission rate and to the creation of a recycling-oriented society.

Centennial Vision is “Venture Spirit &Through this report, we hope to encourage an accurate understanding of

Innovation.” This principle has been

Tokuyama strongly believes that all corporations are required to fulfill

plastic window sashes. The Company announced measures designed totheir social responsibility in relation to their stakeholders. In line with thisprevent such specification mislabeling in March 2009 and has promoted

defined by our belief that any

belief, the Company sees CSR initiatives as such activities that allow thethese measures since then. We will continue to implement effective mea-

Company to review and improve its business processes. By promoting thesesures, including the inspection and improvement of related mechanisms

corporation cannot survive unless

activities, which are centered on the principles of “ensuring and promoting

and frameworks. Also, the entire Tokuyama Group is stepping up efforts tocompliance,” “implementing Responsible Care activities” and “advancing

complete repairs and improvement work to ensure legal compliance at its

CSR promotion (internal control) activities,” the Tokuyama Group hascustomers’ sites as quickly as possible. Through these efforts, we are work-

continued to solidify the foundation for fulfilling its social responsibility.

ing to regain the trust of our customers in the Tokuyama Group.

it continues to change.

the Tokuyama Group on the part of our stakeholders.

In January 2009, it was announced that Tokuyama and one of its subsidiaries had been involved in the mislabeling of fireproof specifications on

Taking the matter seriously and looking ahead, we will continue to ask

Always Remaining a Manufacturing Company inourselves the same question, “What is our social responsibility?” Working

Harmony with Society

diligently to find the right answers to this question all the time, we will con-With the aim of remaining a “manufacturing company that is in harmony

sistently promote our CSR-oriented corporate management. We invite read-“Venture Spirit & Innovation”

anniversary. Also, this fiscal year will be of significant importance, as wewith society,” the Tokuyama Group has pursued Responsible Care activi-

ers to provide us with their feedback and comments in relation to this report.

We are growing into a new Tokuyama Group as we approach 2018, thewill formulate our next three-year medium-term management plan, to beties, voluntary management activities promoted by the chemical industry

The Great East Japan Earthquake on March 11, 2011 caused significant

year marking the centennial anniversary of Tokuyama’s founding. The

launched in fiscal 2012, by giving thorough consideration to the drastic

on a worldwide scale, for more than 15 years. As a chemical company

damage to the Tohoku and Kanto regions. On behalf of the Tokuyama

underlying principle of Tokuyama’s Centennial Vision is “Venture Spirit &changes in our operating conditions.

committed to protecting the environment, safety and health, we actively

Group, I would like to take this opportunity to express our heartfelt sympa-

carry out these activities throughout the life cycle of chemical substances—

thy to all those who have been affected by this major disaster. I would also

Growing Our Polycrystalline Silicon Operations into aencompassing development, manufacturing, distribution, use, final con-like to extend our best wishes for the quickest possible recovery and resto-Core, Strategic Growth Businesssumption and disposal.

ration in the disaster-stricken regions.

Innovation.” This principle has been defined by our belief that any corporation cannot survive unless it continues to change.
In 2010, Tokuyama established five working groups under the Venture
Spirit & Innovation Project, with the aim of overcoming any issues that may

Under its Centennial Vision, Tokuyama has defined its polycrystalline silicon

We believe that safety is an essential part of business activities andJapan is currently facing a national crisis of the largest scale since thearise before achieving its Centennial Vision. These cross-divisional working

operations as a core, strategic growth business. Consequently, thethat ensuring safety is the first step in successfully coexisting with society.

end of World War II. It is now that all Japanese people must fully exertgroups are required to make proposals for and implement more specificCompany is working to expand these operations aggressively. The

Based on this stance, I have taken the lead in promoting process safety

their individual capabilities to support the nation’s resurgence, backed byinitiatives from their respective standpoints in order for the Tokuyama

Company currently commands an over 20% share in the global market ofand disaster prevention.

the assistance offered by people throughout the world. As Japanese citi-Group to achieve the Centennial Vision, which places particular emphasis

polycrystalline silicon for semiconductors. We aim to maintain such an

We understand that the fight against global warming is a key challenge

zens, as members of a Japanese company, and as individuals, we must do

on corporate management, underpinned by capable human resources. To

advantageous market position. Also, the Company aims to raise its current

for the Tokuyama Group. The Group is proud that its development of envi-

everything we can to help Japan achieve recovery and restoration throughrealize business breakthroughs in the current severe operating environment,

global share of polycrystalline silicon for solar cells from approximately 5%ronmentally friendly chemical products and environmental technologies—

responsible actions. The entire Tokuyama Group will work as one well-which presents significant uncertainties, every member of the Tokuyama

to 10% or more. To this end, the Company commenced the construction ofincluding polycrystalline silicon, a material indispensable to solar power

coordinated team and thereby enable Japan to overcome current difficul-

Group must remain proactive and understand the true meaning ofa new polycrystalline silicon factory in Malaysia on February 16, 2011. This

generation—is encouraging the active global use of renewable sources ofties and realize a resurgence.

“Venture Spirit & Innovation” while thinking out things from angles thatnew factory is scheduled to start operation in June 2013. So, I imagine thatenergy and spreading the practice of energy conservation.

they have never tried. Only after that will we be able to create and instill aa year from now, more than 3,000 construction workers will be engaged incorporate culture that enables every Group employee to constantly andconstruction work in Malaysia.

In addition, the Tokuyama Factory, the principal production facility of

July 2011

the Group, has slashed its unit energy consumption by exhaustively improv-

naturally act in line with the “Venture Spirit & Innovation” principle—a

To always remain a “manufacturing company in harmony with society”

ing the manufacturing processes and taking action to save energy. Throughcorporate culture that can be handed down to coming generations ofrequires the consistent enhancement of corporate governance. In line withthese activities, we achieved our goal of cutting unit energy consumption

Group employees.

this approach, Tokuyama undertook management structure reforms thisby 22% from the 1990 level in fiscal 2010. Furthermore, the Tokuyama

Kazuhisa Kogo

Accordingly, we have positioned fiscal 2011, ending March 31, 2012,

year. Aimed at reinforcing the supervisory function of the Company’s Board

Factory is unique in producing both chemicals and cement. Taking advan-

President

as a “run-up” period to gain greater momentum toward our centennialof Directors and clearly separating functions for management supervision

tage of this dual function, it is actively reusing the waste and by-products

45

Fiscal 2010 Highlights

GROWING
Strengthen Strategic GrowthBusinesses

CREATING
Create New Businesses

October 2010

November 2010

February 2011

April 2011

Completion of facilities to heighten thepurity of TCS and STC at Tokuyama
Chemicals (Zhejiang) Co., Ltd.

Capacity enhancement at Shanghai
Tokuyama Plastics Co., Ltd.

Groundbreaking ceremony for the new
Malaysia Factory

Announcement of integration andrelocation of the Tokyo Head Office

Demand for disposable diapers in China has increased

On the day of the 93rd anniversary of Tokuyama’s found-

Tokuyama announced that it will integrate its two Tokyo

We held a completion ceremony at Tokuyama Chemicals,

more than 10 times in 10 years since 2000. The scale ofing, the Company held a groundbreaking ceremony com-

Head Offices in Shibuya and Shimbashi and establish afollowing the completion of facilities to heighten the puri-

China’s market for disposable diapers has exceeded thatmemorating the commencement of construction of a new

new Tokyo Head Office in Kasumigaseki on August 1,

ty of trichlorosilane (TCS) and silicon tetrachloride (STC).*

in Japan and is expected to keep expanding by roughly

polycrystalline silicon factory in Malaysia. Approximately

2011. This office integration and relocation is aimed at

The facilities boast an annual processing capacity of

20% every year. Shanghai Tokuyama Plastics manufac-

5,000 people attended the ceremony, including represen-eliminating operational inefficiencies attributable to hav-

10,000 tons each of TCS and STC. TCS is used for wafers

tures and sells microporous films, a material used fortatives of the Malaysian government and local residents,

ing two separate head offices and upgrading an office

and in coupling agents, while STC is used for opticaldisposable diapers. With the capacity enhancement,

showing significant interest in this project.

environment.

fibers and synthetic quartz. In China, where economic

Shanghai Tokuyama Plastics now boasts a monthly

growth is robust, demand for optical fibers is rapidly

capacity of 20 million square meters. In addition, it has

New Tokyo Head Office Location:

expanding, and many manufacturers have announced theintroduced a seven-color printer for the production of

Kasumigaseki Common Gate West Tower

launch of optical fiber production in the country.

multi-color print diapers, which are expected to experi-

2-1, Kasumigaseki 3-chome, Chiyoda-ku, Tokyo, Japan* Also known as tetrachlorosilane

ence increased demand.

November 2010

January 2011

February 2011

Tokuyama’s shikkui paper used for theworks of Mr. Hiroshi Senju at APECJAPAN 2010

Participation in the 3rd LED/OLED Lighting
Technology ExpoAt this expo, held at the Tokyo Big Sight, Tokuyama’s

Festival to pray for safety at the test
manufacturing facility for an electrolyte
membrane for fuel cells

Based on the technologies relating to its proprietary

Shapal Sales Department exhibited metallized AlN sub-Tokuyama’s Research & Development Division is working

Fresco Giclee,* Tokuyama has undertaken the develop-

strates and aluminum nitride (AIN) filler. At the sameto launch an electrolyte membrane for fuel cells based onment of shikkui (plaster) paper for painting use with thetime, the Company staged a seminar on the theme,

the Company’s technologies in ion exchange membranes.

support of the Japanese-style painter, Mr. Hiroshi Senju.

“Technological Trends in Aluminum Nitride (AlN)—A

With this electrolyte membrane, Tokuyama intends to

Mr. Senju used the paper for his works, which wereHighly Thermal-Conductive Ceramic Material Supporting

penetrate the market for fuel cells, which are highly

exhibited at APEC JAPAN 2010.

High-Output LEDs.” The seminar attracted the attention

expected to become a next-generation, eco-friendly energyof many event-goers, and they expressed high expecta-

source. Through the utilization of this facility, we aim totions for the realization of a longer LED service life due

establish technologies in large membrane production andto effective heat dissipation.

quality control, thereby building the structure required for* Fresco Giclee is a new-generation inkjet printing sheet for
professional photography use. Tokuyama made plaster—
the base for fresco painting—into a sheet through thethe stable supply of this product for customers.

application of its unique technologies.

INTEGRATING July 2010
Bolster International
CompetitivenessNovember 2010

January 2011
General disaster drill at the
Tokuyama Factory

Shunan Bulk Terminal Co., Ltd. is developing a bulk cargo

Groundbreaking ceremony for a central
control room in the South Area of theHigashi Plant at the Tokuyama Factoryhandling base at the Tokuyama Kudamatsu Port. The

Three control rooms currently used by the Si

promote their understanding of the safety activities

Company completed the first-phase construction of new

Manufacturing Department will be integrated into thisthat it conducts on the factory premises. Our in-housecoal-handling facilities for Shunan Bulk Terminal. The

central control room. This facility integration is aimed at

fire-fighting team and Shunan Fire Headquarters repre-

first-phase involved the construction of loading andcreating a stable plant environment where employees

sentatives led the drill, using fire engines. More specifi-

unloading facilities, such as an unloader, belt conveyor,

can work safely and securely and improving the plant’s

cally, they conducted a water-discharging exercise on theship loader and shipping dock as well as a 4.8-hectareinternational competitiveness and employees’ job satis-

assumption that a fire had occurred on the factory prem-coal storage yard. Following wharf reinforcement work

faction. According to the construction plan, a series ofises. The drill also included practice to remove the harm-

conducted by the national government, the first cargo

new control systems will be installed in the central room

ful effects of chlorine using special equipment andvessel boasting a 90,000-ton capacity docked at the port

by 2013 in line with the renewal of old systems.

operational practice for rescuing injured persons.

Completion of the first-phase constructionof new coal-handling facilities

Tokuyama invites local residents to this disaster drill tosoon after the opening.

6

7

Tokuyama’s CSRManagement in Harmony with Society
Tokuyama Group Code of Business Activities
All Tokuyama Group members will commit to operating in a way that is compatible with society and to fulfilling the Group’s corporatesocial responsibility, following the principles below and endeavoring to achieve sustained growth by earning the support of our clients.
(Established: May 12, 2009)씰 p11

1. ComplianceTokuyama’s CSR (Chart 1)

Tokuyama’s CSR
Tokuyama approaches its CSR activities in accordance with its basic policy of engaging in management in harmony with society. We believe that CSR activities help us

Basic
Philosophy

to sustainably grow our business and enable us to work with society to build a sus-Creating valuethat is helpful toeveryone’s life,
anywhere andanytimeWe act with good corporate ethics and common sense, based on the understanding that compliance with

Establishing Internal Control, Risklaws and corporate rules is the most important requirement in pursuing any kind of business.

Management and Compliance Systems
씰 p15

2. Fair Business Activities• We aim to be moderate and reasonable in our business through fair, free, and transparent competition.

씰 p12

3. Responsible Caretainable future. To increase stakeholder satisfaction, we are committed to promoting
Basic Policy

corporate activities that are evaluated highly by stakeholders and all members ofManagement inharmony with societysociety. (See chart 1 on the right.)
Tokuyama has positioned the assurance of sound corporate governance and

Implementation of CSR Activities

establishing effective internal control systems as a significant part of its CSR foundations, and the promotion of compliance and risk management underpins our internal
control. Along with Responsible Care activities—an important area in the management of the Tokuyama Group—we are working to achieve optimally balanced CSR
foundations.
During fiscal 2010, Tokuyama focused on reorganizing its CSR promotion structure, reinforcing compliance education, raising employee awareness on compliance,• We develop, produce and supply products and services that have value to the community, with a constantfocus on safety requirements, so that we can satisfy our clients and consumers and earn their trust.

CSR Foundations

sexuality, creed, nationality or religion.

씰 p20• We respect the basic rights of people in our business and will not discriminate on the base of race,

Malaysia and Japan

provide satisfaction and opportunity to each employee.
씰 p36

5. Communications
We make fair and positive public disclosure of information about our Group, including its businessTokuyama Blending in with Society

activities and financial reports, to maintain good communication with society.

(Tokuyama Factory RC Community
Dialogues/Public Disaster Drill)and strengthening its risk management structure. Adhering to the Tokuyama Group

stakeholders and practice corporate management in harmony with society, thereby
maintaining the Tokuyama Group’s status as a corporate group of choice for ourcustomers.
To ensure that compliance is promoted Groupwide in a tangible manner, wehave distributed a handbook containing the Tokuyama Group Code of Business
Activities, the Responsibility of Senior Management under the Tokuyama Group
Code of Business Activities and the Tokuyama Group’s Five Conscience Clauses toevery executive and employee of the Group. (See chart 2 on the right.)

Message씰 p37

6. Social Contributions

Our behavior shall:
1 Comply with laws, regulations and internal rules
2 Conform to the Tokuyama Group Code of Business• We actively seek to contribute to our community as a good corporate citizen.

Tokuyama Blending in with Society• We contribute to the development of local regions in our international business activities, respecting(“Mikage” Book Donation Program/not only international rules, local laws and regulations, but also local cultures and customs.

Tokuyama Science Foundation)

7. Exclusion of Antisocial Forces
We will not enter into any business arrangement with antisocial forces that threaten public order and safety.

Activities
3 Justify the trust of customers and trading partners
4 Earn the respect of society and general consumers
5 Maintain standards that can be spoken of with pridein front of family members and coworkers

Tokuyama’s Major Stakeholders
Tokuyama conducts customer-focused quality
assurance activities based on implementation of
its ISO 9001-compliant quality management
system. Chemical substances are comprehensively managed to ensure safety at all stages ofthe manufacturing process.

GlobalEnvironment

Customers

Tokuyama conducts environmentally friendly
management operations with an emphasis on
the environmental perspective in every aspect ofits business activities.

we believe that we have been able to improve the Group’s corporate governance.
When the Great East Japan Earthquake occurred in March 2011, the Tokuyama Groupwas fortunate to suffer only minimal damage. However, I think we must improve ourPracticing CSR-Oriented Management

response to massive events like this earthquake. With this in mind, we will evaluate how
we can better cope with the ensuing crisis immediately after an earthquake or other catastrophe, including how to maintain our supply chain. Through these processes, we will step

8

Serving as a “Bridge” between• We value diversity in the workplace and will provide a safe and comfortable working atmosphere to

Tokuyama Group Code of Business Activities

Tokuyama Group’s Five Conscience Clauses (Chart 2)of Management Systems

significance to all mankind and their importance to the continuation of business activities.
4. Respect for Human Rights and Personality

Code of Business Activities, we will continue to establish good relationships with our

RC Promotion Structure and Operation• We voluntarily and proactively address environmental issues based on an understanding of their

Build good relationships withvarious stakeholders

Ensuring sound corporate governance
Establishing effective internal control system
Securing compliance
Strengthening risk management
Promoting Responsible Care activities

Toward Regaining Trust• We will maintain fair and reasonable relations with political and governmental organizations.

Masao Fukuoka

up our efforts to review the Group’s comprehensive measures against such disasters, andGeneral Manager, Corporate Social Responsibility Div.

make these measures even more robust.

The Tokuyama Group has promoted business activities in line with its basic policy of prac-

In November 2010, the ISO 26000 standard—Guidance on Social Responsibility—was

ticing corporate management in harmony with society. When the mislabeling of fireproof

published. In accordance with this new international standard, Tokuyama will conduct a

specifications on plastic window sashes was revealed, we caused significant trouble for ourcomprehensive review of the Group’s current CSR frameworks and activities, further bolster-customers and other stakeholders. However, the Tokuyama Group has completed the imple-

ing its advantages and turning its shortcomings into advantages. In this way, we will keep

mentation of all medium-term measures to prevent the recurrence of similar problems, and

our CSR mindset up to date and further advance our CSR-focused corporate management.

Tokuyama strives to improve theworking environment and the mental
and physical health of its employees sothat every employee can exhibit his or
her abilities and perform duties actively
and with a high level of motivation.

Tokuyama is committed to creating
relationships of trust with all trading
partners through honest businessdealings. Tokuyama also practices
CSR in its purchasing activities.

Communities
and Society

Tokuyama

Employees

Trading
Partners

Shareholders

Tokuyama is engaged in many different
activities directed at contributing tosociety. They include financial support forscientific development and technology,
activities to foster new generations andlocal volunteer activities. We are also
working on communication with local
communities by providing opportunities
for RC community dialogues.

Tokuyama offers information in a
prompt and appropriate manner togain the understanding and trust ofshareholders and investors.

9Tokuyama’s CSR

Tokuyama’s CSR Foundations: Corporate Governance and Internal Control
Basic Approach to Corporate Governance

Human Resources Committee

Departments Responsible for Internal Auditing

Environmental Measures Committee

Tokuyama believes that corporate governance is an important foundation for maxi-

The Human Resources Committee consists of the chairman, representative directors

Tokuyama has established the Auditing Department and the RC Management

This committee deliberates and makes decisions on Tokuyama’s environmental poli-mizing its corporate value. Tokuyama also believes that it must conduct daily inspec-and external director. This committee holds discussions on such matters as the remu-

Department, which are responsible for internal auditing. These departments perform

cies as well as on plans and measures for the Company’s environmental manage-

tions and take necessary steps to ensure its corporate governance systems always

neration for directors and executive officers and the selection of director and execu-

internal audits of individual divisions and departments of the Company as well as ofment activities.

function appropriately.

tive officer candidates before Board of Directors meetings take place.

Group companies.

Safety Measures Committee

At the same time, Tokuyama is working consistently to strengthen its complianceThis committee deliberates and makes decisions on our safety policies. Also, the commit-

Executive Committee

tee discusses and approves the plans and results of our safety management activities.

ident. This committee consists of the president and the executive officers selected by

Establishing Internal Control, Risk Management andCompliance Systems

shareholders, customers, trading partners, employees and local communities—by

the president. The committee meets twice a month to make decisions regarding

Reorganization of Companywide Committees

This committee deliberates and makes decisions on our policies regarding productaccurately understanding our social responsibility and pursuing corporate manage-

business operations in a flexible manner.

Tokuyama has comprehensively reorganized its internal committees. For example,

safety and quality. In addition, the committee discusses and approves the plans andment in harmony with society.

Strategy Committee

the Company has established the Risk Management and Compliance Committee

results of our product safety and quality management activities.

The Strategy Committee is an advisory body to the president and consists of theunder the CSR Promotion Council. Also, under the CSR Promotion Council, we have

Corporate Governance Structure

president and the executive officers selected by the president. This committee meets

established the Financial Reporting Committee, Pricing Committee, Export Control

Promotion of Risk Management

Board of Directors and Executive Officer Systemonce a month to discuss the implementation and plans for such important matters

Committee, Information Security Committee, Environmental Measures Committee,

To further strengthen the Group’s risk management systems, including rules andTokuyama’s Board of Directors meets at least once a month to deliberate and makeas the launch, withdrawal and discontinuation of businesses and the implementation

Safety Measures Committee, and Product Safety and Quality Assurance Committee.

guidelines for managing risks that may result in loss or damage, Tokuyama has

resolutions on important matters regarding business operations while supervisingof large-scale infrastructure investments. Through these discussions, the committee

These seven committees handle Companywide (cross-divisional) issues, particularly

established the Risk Management Promotion Subcommittee under the Risk

business operations. As of June 28, 2011, the Board of Directors consisted of nine

helps the president determine the Company’s policies for business operations relating

those deemed important from the perspective of risk management and compliance,

Management and Compliance Committee. Through this subcommittee, the Company

directors and was chaired by the chairman, who is not involved in business opera-

to those important matters.

in the areas coinciding with each committee’s mandate.

has launched activities to promote risk management across the Group.

tions. To reinforce the supervisory function of the Board of Directors, the Company

CSR Promotion Council

has appointed one external director.

As part of its management structure reforms, Tokuyama has reviewed and stream-with corporate ethics, laws and regulations as a means of enhancing its corporate

Tokuyama has established the Executive Committee as an advisory body to the pres-value. Furthermore, we believe that we can gain the trust of stakeholders—including

Product Safety and Quality Assurance Committee

We started with identifying significant Groupwide risk factors specific to the

CSR Promotion Structure

Tokuyama Group, a chemical company, through discussions with related divisions andTokuyama introduced an executive officer system in April 2011 with the aim of

lined the organization and operation of its internal committees. The CSR Promotion

CSR Promotion Council

departments. We assessed these factors and classified them according to their likeli-

separating the supervisory and executive functions for business operations. As ofCouncil has been established through the integration of the Sunflower Committee,

Risk Management and Compliance Committee

hood and gravity. For each class of risk factors, we then determined possible mea-

June 28, 2011, the Company had 19 executive officers. With the Board of Directors

which previously governed the Company’s decision making regarding internal control

delegating authority for business operations to executive officers and supervisingsystem development, and the RC Administration Committee, which was previously inthese operations, the Company has established a management structure that stress-

charge of decision making concerning the Company’s Responsible Care activities.

es clear accountability and efficient decision making and is capable of responding to

The Company’s directors and executive officers concerned attend meetings of thechanges in operating conditions flexibly. In addition, the term of office of directors is

CSR Promotion Council.

set to one year to ensure clear accountability and management capability to

Risk Management and Compliance Committee

promptly adjust to changes in the Company’s operating environment.

Tokuyama has positioned the promotion of risk management and compliance as

Information Security Committee

Board of Auditors

central activities to develop effective internal control systems. In line with this view,Environmental Measures Committee

The Company’s Board of Auditors consists of four auditors, two of whom are exter-

the Company has established the Risk Management and Compliance Committee—

Safety Measures Committee

nally appointed. The Board of Auditors holds meetings to report, discuss and makechaired by a director supervising the Corporate Social Responsibility Division—

Product Safety and Quality Assurance Committee

resolutions on important matters. Also, auditors frequently attend Board of Directors

under the CSR Promotion Council.

meetings and various other key meetings to oversee the execution of duties by

Helpline Committee

Financial Reporting Committee

directors through discussions and other activities.

The Helpline Committee is responsible for the administration of Tokuyama’s

This committee has been formed to ensure the reliability of Tokuyama’s financial

whistle-blowing system, which has been established for the purpose of enabling thereporting. The committee manages the processes of preparing financial reports

internal reporting of legally questionable actions and behaviors by Group executives

following end-of-period closing procedures. It consists of members selected from theand employees.

Management Support Center, which is responsible for end-of-period closing proce-

Reportthose that are important and must be addressed with priority. In fiscal 2011,
The CSR Promotion Council
Secretariat members
perform their duties as
members or secretariat
members in theirrespective committees
and provide important
information to the CSR
Promotion Council.

Whistle-blowing System

Board of Auditors
Auditors

Decide/supervise

President

Tokuyama’s products and services. The committee deliberates on and approves the

Appoint/dismiss

Accounting Auditors
Audit

Collaborate

Audit

Helpline

Audit

Departments Responsible
for Internal Auditing

Auditing Dept.

Internal audit

Tokuyama plans to examine these priority issues and determine possible measures.

Whistle-blowing System (Helpline System)
Tokuyama has launched a helpline system. Through this system, employees and otherpersons are allowed to anonymously report or seek consultations regarding compliance violations, including possible violations, within the Tokuyama Group. The system
made reports or sought consultations.

ReportReport/consult

Helpline Contacts
Instruct

Report (Anonymous)

CSR Promotion Council

Helpline Committee

Risk Management andCompliance Committee

Instruct/educate/raise awarenessBusiness Divisions, Back-Office Divisions, Research Laboratories, Factories and Group Companies

Instructrevision to selling prices of the Company’s products and services.

Export Control Committee

Compliance Study RoomThis committee has been established to ensure that Tokuyama appropriately manag-

To improve the compliance intelligence of Group executives and employ-es its export products to help maintain international peace and security. Also, theees, Tokuyama has opened a Compliance Study Room on its intranet.

committee works to prevent the Company from violating laws and regulations relat-

This intranet site provides more than 500 different

ing to export and other types of transactions. It meets on an as-required basis.

educational contents based on familiar topics.

Information Security Committee
This committee has been launched with the mission of maintaining the security ofTokuyama’s information assets and promoting the active use of these assets. The

Seven Committees(see the chart on page 11)

Helpline Committee

Report(Anonymous)

Board of Directors

Helpline Users

This committee has been established with the aim of ensuring the fair pricing of

Appoint/dismiss

RC Management Dept.

10

Pricing Committee

Pricing Committee

Board of Directors

Strategy Committee

Company’s current status to clarify present issues. Among these issues, we selected

Financial Reporting Committee

dures, and other related departments.

Appoint/dismiss

Executive Committee

maintain them as is. After this, we set targets for risk management and evaluated thehas been designed to prevent any disadvantageous treatment of persons who have

Shareholders’ Meeting

Business
Operations

sures as to whether to minimize the likelihood, remove the cause, transfer them orSeven committees handling Companywide(cross-divisional) issues, particularly thosedeemed important from the perspectiveof risk management and compliance

Export Control Committee

Corporate Governance Structure

Human Resources
Committee

Each member of
the CSR Promotion
Council Secretariat is
assigned as a memberof a committee ora member ofthe secretariat ofa committee.

committee makes decisions about the Company’s basic policies on overall mattersrelating to information security while engaging in activities to increase the awarenessof information security among Group executives and employees. It also undertakes
activities to promote the protection of private information.

Contents include the introduction of legal informationand compliance-focused thinking processes. Familiar
topics enable readers to understand compliance-related
issues easily.
The Lecture Tool introduces stories incorporating compliance issues that can occur in daily operations. Throughthese stories, how to approach compliance issues is
explained in detail.

11

Tokuyama’s CSR

RC Promotion Structure and Operation of Management Systems
Responsible Care

RC Promotion Structure

RC Activity Evaluation and Management System

Safety and Environmental Assessment

Responsible Care (RC) refers to the voluntary management activities of companies

Chaired by the president and consisting of members of the Board of Directors andTokuyama adopts a medium-term plan in the area of Responsible Care and deter-

Prior to installing, expanding or modifying any facility, we conduct safety and envi-that manufacture and handle chemical substances to protect the environment andexecutive officers concerned, the CSR Promotion Council is Tokuyama’s top decision-

mines its policies and targets for each fiscal year to achieve the plan. Under these pol-ronmental assessment. We check the safety design of equipment, the safety level ofmaintain the safety and health of members of the public and employees in all pro-making body for RC activities. Under the CSR Promotion Council, the Company has

icies, the individual departments create specific plans and engage in their activities.

the materials handled, compliance with the laws and regulations and the impact on

cesses covering the development, manufacturing, distribution, use, final consumption

established the Environmental Measures Committee, Safety Measures Committee

The results of these activities are assessed at the end of each fiscal year so that thethe environment, thereby ensuring that our facilities are safe, easy to operate, easy

and disposal of chemical substances. Also, RC activities involve the publication of theand Product Safety and Quality Assurance Committee as decision-making bodies.

plans for the following fiscal year will reflect the findings. Tokuyama formulated a new

to maintain, and accident- and disaster-resistant. The assessments apply to three

results of the activities and the promotion of dialogues and communication with

Also, the Company has established several subcommittees—such as the Productfour-year plan starting in fiscal 2011. Activities under the plan are now in progress.

stages: Basic Plan Assessment, Design Assessment and Pre-Operational Assessment.

society. The RC concept originated in Canada in 1985, and it is now in place in 52

Assessment Subcommittee—which provide various assessment functions. All thesecountries around the world. In Japan, the Japan Responsible Care Council (JRCC)

committees and subcommittees promote specific initiatives in their respective areas

was established in 1995 within the Japan Chemical Industry Association (JCIA). It

of responsibility.

CSR Promotion Council
Assessment Function

CSR Activities Centered on RC Activities
Tokuyama’s CSR activities center on RC activities. A Companywide promotion structure has been established to soundly operate various management systems. In thisway, we continue to improve our environmental, safety, and quality management

Decision-Making Function
Environmental Measures Committee

Product Assessment Subcommittee(Labeling Assessment Subcommittee)

Safety Measures Committee

Safety and Environmental
Assessment Subcommittee

Product Safety and Quality
Assurance Committee

RC Research Laboratory(support organization)

Responsible Care Management
Department (Secretariat)

systems.

This laboratory checks the safety of chemicals and assesses their environmental
impact using simulations. It also carries out
environmental measurements, working
environment measurements andultra-trace analysis of substances underregulation and chemical pollutants.

This department promotes RC activities
throughout the Group, covering the areasof the environment, safety and quality.

Basic Philosophy of Responsible Care

Incorporate assessment results into goals
and plans for the following fiscal year

RC Promotion Structure

agement and CSR activities.

and environment-oriented design, that they have been built to the design requirements and that they are ready for operation.

had 94 corporate members as of April 2011, Tokuyama being one of the founding
members. We actively promote RC activities as the basis of our environmental man-At these stages, assessments are conducted to verify that the facilities have a safety-

RC Activity Evaluation and Management System(Environmental Preservation)

Product Assessment and Labeling Assessment

RC Activity Goals

To ensure product safety, Tokuyama conducts a product safety assessment at each
Environmental Impact Reduction Goals
Medium-Term
Environmental Plan
Environmental Management Plan

Environmental Management Activities

Assessment of Activities

ISO 14001 Environmental
Management System
Safety and Environment
Assessment System
RC Audit System
Environmental Accounting
Environmental Performance

Operation of Management Systems

stage, from research and development to commercialization. We assess the risk evaluation and examine compliance with the statutory requirements from a wide range ofperspectives, including the safety of the chemical substances involved, the environmental impact and the effect on human health. We also assess the labeling to ensurethat the product information in catalogs, manuals on safe handling, material safety
data sheets (MSDSs)*¹ and other types of labeling contain no deficiencies in relation
to the instructions and/or warnings and that there are no inappropriate statements.
*1 A material safety data sheet is a document that deals with the hazard and toxicity of

ISO 14001 Environmental Management Systema chemical substance. It is prepared to ensure the safe handling of a particular sub-The Tokuyama Factory and the Kashima Factory have already acquired ISO 14001 cer-action to be taken in the event of an emergency, and so forth.

stance and provides information on the name of the substance, safety measures, thetification. ISO 14001 is an international standard for environmental management systems. In line with the Companywide environmental policy, each factory sets out an

Education and Training

environmental policy and the specific goals to be achieved in areas covering environ-

Employee education on Responsible Care activities is provided for all members with-mental impact reduction, energy conservation, waste reduction and resource recycling.

in the framework of level-specific group education.

At the Company’s head office, branch offices and research laboratories, activities

Practical education and training in relation to environmental management, safety

Basic Policy

Action Objectives

are underway based on their respective policies and goals set out according to the

management, occupational health and safety, and quality management are offered as

As a member of the Japan Responsible

1 Promote environmental protection

scale of their operations, covering energy conservation, waste reduction, resource

part of actual management activities. To take environmental management for exam-

recycling and other activities.

ple, the Tokuyama Factory and the Kashima Factory have formulated specific educa-

ISO 9001 Quality Management Systemtion and training plans in accordance with the ISO 14001 environmental manual.

Tokuyama has also acquired ISO 9001 certification for its quality management

They offer education on the importance of environmental conservation and compli-

system that covers its principal products. Since fiscal 2002, this system has beenance with relevant laws and regulations to employees and contracted workers alike.

Care Council, Tokuyama Corporation
carries out Responsible Care activities• Implement an ISO 14001-based Environmental Management System and reduce environmental impact

2 Observe the laws and regulations

that protect the environment and pre-• Observe international rules, domestic laws and regulations and industrial standards

serve safety and health throughout the• Thoroughly implement export management rules on materials under control

entire chemical substance life cycle,
from development and manufacturing
to distribution, use, final consumption
and disposal.
Our social mission is to aggressively
tackle and systematically solve environmental issues in particular, which, inturn, will lead to sustainable corporate
and social development. Based on thisrecognition, we promote Environmental

3 Promote energy conservation and curb global warming• Achieve top-class unit energy consumption in the industry for each productdiction training, hands-on experience training, pre-work hazard prediction activities,

management of waste materials

Occupational Health and Safety Management Systemsafety regulation education, internal special education on electricity, oxygen deficien-• Promote the material recycling and thermal recycling of resources

In accordance with the Japan Chemical Industry Association (JCIA) New Occupationalcy, waste incinerators and other areas, foreman education, troubleshooting training,• Work toward achieving a paperless office

Health and Safety Guidelines, Tokuyama has built and promoted occupational healthtraining on the use of fire prevention and extinguishing systems, evacuation drills,

and safety management systems at individual factories and offices. In fiscal 2005, thegeneral disaster drills, traffic safety education, and training on aid activities following

Tokuyama Factory upgraded its system into a safety management system coveringexternal accidents and disaster prevention. For quality management, every workplacevarious safety-related activities.

separately organizes safety meetings and other opportunities for ISO-related educa-

5 Promote process safety, disaster prevention and occupational health and safety• Aim for zero accidents and disasters based on the principles of self-responsibility andthe self-management of safety• Achieve a comfortable working environment and protect people’s safety and health

6 Ensure strict product safety standards• Offer environmentally friendly products that can be used with safetythat emphasizes the environment, in all• Provide proper information on how to use products and what precautions to takedevelopment, manufacturing and sales.

In safety management and occupational health and safety, we offer hazard pre-Company.

4 Promote resource recycling and work toward reduction and the proper

Management, a management policyof our business activities, including

operated as a system covering sales, development and all other divisions of the

7 Deepen the relationship of trust with society• Publicly disclose information on the Company’s activities concerning environmental protection,
process safety and disaster prevention, occupational health and safety, and chemical product safetytion. Twenty key personnel at different workplaces have completed the ISO 9001

Assessment Systems

internal auditor development course. In August 2010, we organized a skills seminar

Tokuyama has set up several assessment systems in an effort to reduce environmen-

for internal auditors with in-house lecturers.

tal and safety risks.

• Actively engage in dialogue with the local communities

1213

Tokuyama’s CSR

Toward Regaining Trust
Auditing Systems

Third-Party Audit

Addressing the Plastic Window Sash Problem

specifications and use Excel Shanon’s newly authorized products as much as possi-

Tokuyama has an auditing system aimed at verifying that individual factories andTokuyama undergoes ISO 9001 and ISO 14001 examinations conducted by accredi-

In March 2009, Tokuyama announced its measures to prevent the recurrence of theble” and “use the existing plastic sash frames to minimize the burden on customers

offices engage in appropriate activities in line with Companywide policies.

tation organizations. The latest examination for renewal of the ISO 9001 certifica-

mislabeling of the fireproof specifications on its plastic window sashes. Since then,during the repair work.” Tokuyama is offering personnel and financial support to

Safety and Environmental Audit

tion took place in April and May 2011. The Company has implemented remedial

the Company has steadily implemented these measures to regain the trust of its

Excel Shanon to facilitate the repair and supply of newly authorized products for

Tokuyama conducts safety and environmental audits on a yearly basis to verify themeasures for identified issues.

stakeholders. During fiscal 2010, the Company successfully completed the implemen-

replacement. However, the repair and replacement program has regrettably fallen

appropriateness of its accident/disaster prevention measures and management

tation of its “medium-term measures” in March 2011 while working to ensure thebehind schedule, as it has required a longer-than-expected time period to obtain theactivities in relation to environmental conservation. The auditing team is headed byeffectiveness of its “urgent measures” and “short-term measures” implemented

new authorizations. By June 30, 2011, we completed repair and replacement work

the director who chairs the Safety Measures Committee and the Environmental

during fiscal 2009 through comprehensive assessment. In the past two years, wefor 60% of the customers affected by this incident. The acquisition of the necessary

Measures Committee, and the team conducts audits of all factories, laboratories andhave undertaken various measures to prevent the recurrence of similar problems. The

authorizations will be completed shortly. We are accelerating the pace of repair

offices, organizations designated for inspection under the High Pressure Gas Safety

Company is committed to continuing effective measures, including the inspection ofwork in order to finish the program for most of the customers by March 31, 2012.

Act, the Purchasing & Logistics Department and the Health Management Center. The

Examination for renewal of
ISO 9001 certification at the
Tokuyama Factory on
April 14, 2011

results of the audits are compiled in reports and distributed to all departments concerned. They are also presented to the president.

the mechanism of these measures and the improvement of implementation processes.
Adhering to one of our missions in this regard, namely, “repair customers’ buildings and houses as soon as possible to ensure legal compliance,” Tokuyama has
steadily promoted the implementation of various measures through cooperation

Internal Audit

with Excel Shanon Corporation. These measures included the acquisition of new

Tokuyama conducts internal audits on a regular basis in accordance with the ISO

authorizations for fireproof and fire-resistant specifications, the establishment of

9001 and ISO 14001 standards and with the occupational health and safety man-organizational structures required to promote repair work in each region and theagement system. The progress of action plans and the status of system operations

strengthening of training programs for repair workers. As of March 31, 2011, theare audited. If a problem is found, it is notified to related parties, and corrective

Company and Excel Shanon have completed repair work for approximately 50% ofMeasures to Prevent the Recurrence of Similar Problems

actions are instituted.

the customers affected on the basis of the number of notifications submitted to the

During fiscal 2010, Tokuyama and Excel Shanon implemented the medium-term

Ministry of Land, Infrastructure, Transport and Tourism. Although concerns are grow-measures (to be completed within two years), listed in the table below. We complet-

ing about the impact of the Great East Japan Earthquake, the Tokuyama Group will

ed implementation by March 31, 2011. To sum up, Tokuyama worked to enhance its

work as a team to accelerate repair work and thereby regain the trust of its stake-auditing system, improve the Group management mechanism and strengthen its

holders as quickly as possible.

compliance system. Meanwhile, Excel Shanon strove to expand the scope of ISO

Fiscal 2010 RC Activities: Priority Issues and Results
Category

Priority Issue

P10
P12-14• Reduction in environmental impact(air, water quality, etc.)• Reduction in the emission of PRTR substancesand hazardous air pollutants• Decrease in unit energy consumption• Promotion of zero-emission activities• Promotion of green purchasing• Reduction in the emission of SOx, NOx, soot, etc.
• Promotion of energy conservation• Facilitation of the use of waste as raw materials
and fuel of cement production• Promotion of green procurement• Steady operation of the environmental
management system

P43
P41
P34-35
P22-23
P12-14

Process safety• Zero accidents• Promotion of risk management• Promotion of independent safety management• Proper operation of the safety management system• Safety education and audit of contracted logistics
operators

P10-11,
P12-14,
P36

Occupational health and safety• Zero disasters• Efforts to maintain zero-disaster status• Promotion of risk assessment

P36, 38
P13• Implementation of product assessment andlabeling assessment• Improvement of MSDSs and promotion of researchon new raw materials

P12-14

Environmental conservation• Environmental impact reduction• Energy conservation• Waste recycling

Chemical product safety• Securing product safety

Repair of Buildings and Houses to Ensure Legal Complianceimplementation status were published on April 1, 2011 on Tokuyama’s website.)

The repair of customers’ buildings and houses to ensure legal compliance is promoted

www.tokuyama.co.jp/news/topics (Japanese language only)

in line with two policies: “acquire new authorizations for fireproof and fire-resistantStatus of Implementation of Medium-term Measures to Prevent Recurrence
Implemented by

Measures to Prevent
Recurrence
1 Enhance auditing
system

2 Improve Groupmanagement
mechanism

Tokuyama

3 Strengthen

Cultivation of a relationship oftrust with society and local
communities• Participation in community activities• Harmonious coexistence with society andlocal communities• Participation in community volunteer activities• Holding of RC Community Dialogues(regional, organized by each factory)• Provision of factory tours

P36

Promotion of RC activities at
Group companies• Expansion of RC activities• Safety, quality and environmental audits• Encouragement of ISO certification acquisition• Sharing of RC-related information

P48-49149001 certification with the aim of bolstering its quality assurance system. (Details ofRelated Pages• RC Administration Committee• Safety and environmental audit

Management• Review by top management

Results

Technical seminar for repair
workers (February 22 to 23,
2011)

compliance system

4 Expand the scope ofExcel Shanon

ISO 9001 certification

Implementation Status• We defined checklists and executing bodies for audits of Group companies and clarified the division of roles inauditing.
• We set the rule of mandating audits on the status of the acquisition of fireproof and fire-resistant authorizations
by Tokuyama’s individual divisions and departments and by Group companies.
• We identified and evaluated risks inherent in fixed personnel allocation at Group companies. Evaluation results
were shared across the Tokuyama Group and related parties to establish a system to cope with risks throughcollaborative efforts.
• We created a database containing information about Group companies on Tokuyama’s information network.
Based on this database, we established a structure to promote information sharing among Tokuyama, Group
companies and related parties.
• We investigated the status of Group companies’ compliance with laws, regulations, and internal rules and guidelines and gained detailed knowledge about their compliance status and systems.
• We positioned the Corporate Social Responsibility Division as the body responsible for providing compliancerelated instruction and education. Also, we strengthened our Groupwide compliance systems by, for example,
opening the Compliance Study Room intranet site.
• Previously, only certain manufacturing departments acquired the ISO 9001 certification. All divisions—including
development, design and sales, as well as all factories, branches and sales offices—have completed the acquisition of the certification by July 7, 2010.

15

Under its Centennial Vision, Tokuyama aims to strengthen

Growing Business to Cultivate Solar Cell Applications

strategic growth businesses. Our polycrystalline silicon

From the standpoint of strengthening its strategic growth businesses, Tokuyama began

business is the mainstay among these growth businesses.

constructing a new factory in Malaysia. Serving as a base for the manufacture of polycrys-

Polycrystalline silicon has been developed as a material

talline silicon for solar cells, this new Malaysia Factory, when completed, will boast an

for electronic parts and components, particularly for semi-

annual capacity of 6,200 tons.

conductor applications. In line with the ongoing development of the semiconductor industry, Tokuyama has
steadily expanded this business, which has, in turn, con-GROWING

Tokuyama Aggressively Expanding Growth Businesses

Tokuyama decided to build this factory on the back of the rapid expansion of the
global renewable energy market. Worldwide economic growth was driven by the computerindustry in the 1980s and by the network and IT industries in the 1990s. The world witnessed the evolution of financial technologies and then experienced the burst of the bub-tributed to the growth of the Tokuyama Group. In recent

ble economy during the first decade in the new millennium. Today, countries across theyears, polycrystalline silicon has become indispensable inglobe are entering the era of renewable energy. In particular, the introduction of photovol-

today’s society, increasingly used for photovoltaic powertaic generation is accelerating on a global scale, and photovoltaic power capacity has

converters in solar cells, the use of which is rapidly

shown an average 10-time increase in major countries from the 2000 level, with world

spreading as a means to curb global warming. In addition

leader Germany boasting the largest capacity, at 5,500 megawatts peak (MWp).

to the area of electronic parts and components for semi-

To date, Tokuyama has operated its Tokuyama Factory in Shunan City, Yamaguchi

conductors, Tokuyama is concentrating its management

Prefecture, Japan, as its sole manufacturing base for this material. The Tokuyama Factory

resources on the environmental and energy field. By
increasing the production capacity through its global
production network, Tokuyama is working to further

is now capable of producing 9,200 tons of the material annually. With this capacity, theCompany commands a world-class market share. However, market competition is everintensifying, reflecting market entries by South Korean and Chinese counterparts. By massproducing polycrystalline silicon at the Tokuyama Factory and the new Malaysia Factory,

strengthen its world-class competitiveness in the polycrys-

we expect to boast an annual capacity of 17,200 tons in 2013. Through the strengthening

talline silicon business.

of our capacity, we aim to maintain the current global share of more than 20% in polycrystalline silicon for semiconductor applications. For solar cell applications, we will work

Expanding Global Production Network

16

Tokuyama established local subsidiaries in the United Statesand Europe in 1989. In the 1990s, the Company madefull-fledged entry into the global market. More specifically, in
1995, we formed a joint venture in South Korea for the manufacture of photoresist developers used in the manufactureof semiconductors. Then, in 1996, we launched Tokuyama
Asia Pacific Pte. Ltd.—a sales subsidiary—and Tokuyama
Electronic Chemicals Pte. Ltd.—a subsidiary producing
high-purity chemicals for electronics manufacturing and serving as a regional distribution base—in Singapore.
In 1998, Tokuyama opened Taiwan Tokuyama
Corporation for the production and distribution of high-purity
chemicals for electronics manufacturing. Once the world
entered the new millennium, demand for disposable diapers
in China started growing rapidly. In response, in 2002, theCompany established manufacturing and sales subsidiary
Shanghai Tokuyama Plastics Co., Ltd., which serves as the
supply base for microporous films, a material used in disposable diapers. Also, in 2005, we established Tokuyama
Chemicals (Zhejiang) Co., Ltd. near Shanghai, which operates
the Company’s first full-scale chemical plant overseas. As of
March 2011, the annual fumed silica production capacity ofTokuyama Chemicals had expanded to 10,000 tons.

to more than double our market share from current 5% (Tokuyama estimate).
To keep bolstering its major presence in the global market, the entire TokuyamaGroup will steadily implement strategies and initiatives toward the successful completionof its plant project in Malaysia.

17Growing Globally with Renewable Energy
Taking an Historic Step in the Renewable Energy Field
Overview of Our Project in Malaysia

There were many reasons for the selection of this site, such as the region’s

On February 16, 2011, in Bintulu in the state of Sarawak, Malaysia, Tokuyama

sufficient electricity supply capacity, which is a prerequisite for the manufacture

held a groundbreaking ceremony for the construction of a new factory for theof polycrystalline silicon, the abundance of water resources for industrial use andmanufacture of polycrystalline silicon for solar cells. With the startup of opera-

highly educated human resources. In addition, Tokuyama will be able to receive

tions scheduled for June 2013, this new factory will boast an annual produc-

preferential tax treatment and support for the acquisition of permits and licenses

tion capacity of 6,200 tons, using the Siemens method as its production

from the Malaysian federal government and the Sarawak state government.

technology. Tokuyama secured the land from the state government of Sarawak

The Samalaju Industrial Park boasts a site of 7,000 hectares. Within thisand plans to spend approximately ¥65.0 billion for the factory construction.

vast site, Tokuyama has secured approximately 200 hectares with due consider-

Additional investments, estimated at around ¥15.0 billion, will include theation given to future extension. The first phase will involve factory construction

installation of such utility facilities as power transmission facilities and hydrogenon the site totaling approximately 40 hectares. The 2,400-MW Bakun Dam

generators and the development of such infrastructure as roads and wastewaterhydropower plant—situated about 200 kilometers south of the factory site—

treatment facilities.

will supply electricity to the factory.

Tokuyama established Tokuyama Malaysia Sdn. Bhd. in August 2009 in
Kuching, the capital of the Malaysian state of Sarawak, and this local subsidiary,

Sarawak Corridor of Renewable Energy

which manufactures and sells polycrystalline silicon, will be in charge of operat-

Malaysia consists of 13 states and 3 federal territories. Since Mr. Najib Razak

ing the new factory. Through Tokuyama Malaysia, we are currently promoting

took office as Prime Minister of Malaysia in 2009, the entire country has

preparations, including the employment of local staff, negotiations coveringpromoted the spread of renewable energy use and the development of environ-various matters with the state government and communication with local

mental technologies. Located on the island of Borneo, Sarawak is the largest

community members. Upon the commencement of factory operation, we plan tostate of Malaysia and has the fourth largest population among Malaysian

have a workforce at Tokuyama Malaysia of 300 employees, about 280 of whomstates and federal territories. In accordance with its clean energy policy, dubbed

will be employed locally.

Sarawak Corridor of Renewable Energy (SCORE), the state of Sarawak is accel-

Training on basic operational techniques
at the Technical Training Center’s facility

erating its economic growth and development while strengthening invitations

New Business Model to Promote Clean Energy

Abundant Electricity and Human Resources

to participate in renewable energy projects. The Samalaju Industrial Park has

Development

Tokuyama has long considered the establishment of a second polycrystalline

been designated as an economic development area under SCORE, andIn further developing solar cell-related industries, Malaysia is focusing on nur-

Sarawak Chief Minister,silicon manufacturing base in addition to the one in Japan in light of diversify-

Tokuyama’s new factory is the first investment project undertaken in this area.

turing upstream businesses as well as downstream areas. Through such a focus,

Abdul Taib Mahmud

ing risks and to respond to the expected medium- and long-term demand

Thus, expectations are heightening for this factory project to make significant

the country aims to establish a comprehensive value chain to bolster the com-

expansion for this material used in solar cells. Following careful examination ofcontributions to the growth of environmental businesses promoted by both

petitiveness of these industries.

locations, the Company has selected the Samalaju Industrial Park in Malaysia.

Japan and Malaysia.

Message from

Tokuyama’s polycrystalline silicon project in Malaysia involves the use ofclean electricity generated at the Bakun Dam hydropower plant, which wasconstructed by the state of Sarawak, and the manufacture of polycrystalline
silicon, a material used in solar cells. The solar cells that are manufactured

New Business Model

Supply of electricity by the
Bakun Dam hydropower plant

based on our materials will, in turn, generate clean electricity, which will be

Manufacture of polycrystalline
silicon by Tokuyama

Manufacture of solar cells

Spread of electric vehicles

used for the promotion of electric vehicles. In this way, we are working to

At the groundbreaking ceremony, Sarawak Chief Minister Abdul Taibestablish an eco-friendly business cycle.

Mahmud delivered a speech, which is summarized as follows.

On the other hand, our project includes sophisticated manufacturing pro-

“The Sarawak state government is always open to new develop-

cesses. Therefore, the project is expected to create and expand the employment

ment proposals made by foreign companies. We recognize the signifi-

of experienced engineers and highly educated workers. Furthermore, it willcance of the Samalaju Industrial Park in this regard. We are taking

cause good ripple effects on local supporting industries, providing diversified

advantage of this industrial center to help transform Malaysia from abusiness opportunities for many parties.

medium-income to a high-income country. We are ready to provide
foreign and local companies with support for their investment projects
within this industrial park. So, we will do our utmost to guarantee thesuccess of Japanese companies. We will accelerate the development of
this 7,000-hectare site by constructing housing for those who work inState of Sarawak
Samalaju Industrial Park

the park. At the same time, we will enhance facilities at the Bintulu Port
to increase port capacity and thereby assist the growth of industries in

Malaysia

the park. Today marks the launch of the first project within this industrial
park, and, with this, the name Tokuyama has been engraved on theminds of people in this region. On this day, the state of Sarawak andTokuyama set sail together toward new endeavors.”

Bakun Dam hydropower plant

18

Bintulu Office of Tokuyama Malaysia

Groundbreaking ceremony in Bintulu, Malaysia

Location of the Samalaju Industrial Park19

Growing Globally with People
Serving as a “Bridge” between Malaysia and Japan
Welcoming foreign cultures and improving
ourselves—this is Tokuyama’s way of globalization.

I would like to disseminate Tokuyama’s technologies
across the world by maintaining flexibility in thinking
processes and the awareness that we are promoting
business on an international stage.

developing defensive attitudes.
I am fully aware that I am now doing business on a global stage. Sustaining

I would like to serve as a “bridge” connecting Japanand Malaysia.

this awareness, I would like to put everything I have into promoting this project.
In this way, I will contribute to the sustainable growth of Tokuyama and, consequently, the international community.

I would like to make Tokuyama Malaysia a company
managed by local staff

Yuji Ueda

Janting Anak Yabang

TMP Project Group Leader

TMP Project GroupOur project in Malaysia marks Tokuyama’s first step in expanding strategic

Shota Hara

growth businesses worldwide, a strategy under the Company’s Centennial

TMP Project Group

Vision. Leveraging the expertise that we have fostered through the manufacture of polycrystalline silicon for semiconductor applications over more than 20
years, we aim to secure our global presence in polycrystalline silicon for solar

Mr. Hara plays futsal. He has formed a futsal team with his colleagues, and theteam is currently competing in a local league tournament. Adhering to his
motto, “understand and respect differences in each other’s cultures,” he is struggling, but making steady progress, with communicating and working with
Malaysian staff members, using both Japanese and English.

cell applications, the market for which is rapidly expanding. Simultaneously,
through Groupwide capacity enhancements, Tokuyama is working to realize

I really feel privileged to have been given the opportunity to be a part of this

merits of scale.

huge Malaysia project. I believe that for a company to realize globalization, mem-

He is the youngest of six children in his family. He left home to go to a highschool in Kuching, the capital of the state of Sarawak. After graduating fromhigh school, he entered the prestigious University of Malaya in Kuala Lumpur, thecapital of Malaysia. There, he learned Japanese, chemistry and physics for two
years and then came to Japan. He plays soccer and badminton and loves music.

Muhammad Tariq Bin Noorazmi
TMP Project GroupHe came from the state of Perak to Japan as a Malaysian government-sponsored
student when he was 18. First he joined Toba National College of Maritime
Technology to study electro-mechanical engineering. After that, he entered Gifu
University, majoring in engineering and studying mechanical and systems engineering. Currently, he is learning plant operations at the polycrystalline siliconplant of the Tokuyama Factory. He is tackling his job there diligently, aiming tobecome an engineer who can work for any company. He likes to go for a drive
and practice tae kwon do and karate.

I am from Bintulu, about one hour away by bus from the Samalaju Industrial
Park in the state of Sarawak, where Tokuyama is currently building a newfactory. After coming to Japan, I studied at the Kyoto Institute of Technology for
four years. It was immediately before I was going to go back to Malaysia that
I came to know about Tokuyama’s Malaysia project. I honestly thought thisImmediately after I was suddenly asked to go see Malaysia, I was selected

bers of this company must develop their global business capabilities. Through myas a member of this Malaysia project in April 2008 (the project title was theparticipation in this project, I have learnt that “speed” and “decision-making

GSE Project at the time). As a project member, I conducted thorough feasibility

ability” are indispensable in order to sustain superior competitiveness in thestudies. After the location was set for Malaysia, I was involved in all processes

world business arena. The mission of our project group from now on is to con-relating to factory construction, from negotiating with the local government

struct the factory in Malaysia and to launch the stable operations of this factory

When I was a kid, I used to watch Kamen Rider and Ultraman shows on TV.

Traditionally, the state of Sarawak is home to many petrochemical compa-

and selecting construction companies to contracting with overseas vendors.

by effectively managing the work of each local staff member. Naturally, a project

I loved them. I remember I had an image about Japan and Japanese people

nies. However, I believe that Tokuyama is the first chemical maker to establish awould be a chance for me. I graduated from the institute in March 2009 andwent home. But I came to Japan again in April 2010. Today, I am learning operational technologies at the polycrystalline silicon plant of the Tokuyama Factory.

Most of the construction work is undertaken by Chiyoda Corporation, whichof such a significant scale requires a complex organizational structure. To

then. Actual Japanese people—my seniors and colleagues—I have now comebusiness base in the state. The Sarawak state is still far from being developed,

has extensive experience overseas. Still, certain construction projects are

ensure smooth project operations, it is important to facilitate information shar-to know are different from that image. They are really diligent, coming to workand the agricultural industry is still the mainstay there. The establishment of aconducted by overseas companies based on direct contracts. We are procuring

ing and effective communication. Although communication between Japanese

early and leaving late. When they work in shifts, they arrive at office at least 30

factory for the manufacture of polycrystalline silicon used for solar cells will

construction materials from the United States, Europe, Southeast Asia andpeople allows for a certain vagueness, such a way of communication does notminutes before their shifts start. Those ending their shifts explain in detail thedefinitely contribute to the development of my hometown and peripheral

China, among other countries and regions. In meetings with representatives offunction well with non-Japanese people. So, I would like to promote clear com-status of machines to those who work the next shift. Also, they sacrifice theirregions. I am proud that I will be involved with the operation of this factory.

overseas companies, we basically use English. Since not all project members

munication and help create a workplace environment where everybody can say

own time to provide thorough instruction. I suppose this is about teamwork.

Here at the Tokuyama Factory, Japanese senior staff and colleagues wereare fluent English speakers, the efficiency of these meetings may be one-third

what he or she wants to say regardless of their age or post.

On weekends and holidays, my Japanese colleagues invite me to participate inreally supportive not only in daily business operations, but also in private life.

farming activities and futsal. This is a big help, for a change and fun.

I was invited to join farming activities on holidays and weekends. This gave meof those conducted in Japanese. To cover this setback, we are working toAt present, I am assigned to the Tokuyama Factory. Here, I am working withimprove the overall efficiency in our operations. At the same time, to help projectsome colleagues from Malaysia. I must admit that they show great thirst for

In July, the second group of employees hired in Malaysia, totaling 22,

a chance to relax. After farming work, they would treat me to dinner andmembers improve their English skills, we try to use English as much as possible

acquiring knowledge and skills required for their operational activities. They ask

is coming to the Tokuyama Factory. As they can hardly understand Japanese,

drinks. I am really grateful for what they have done for me. Now, it is our turn.

in our weekly meetings.

Japanese staff a series of questions and never give up until they find andmy Malaysian colleagues and I are working together right now to translate theI will be assigned to the factory under the management of Tokuyama Malaysia

We have experienced so many cases of local partners taking back previous

understand the answers. Seeing such attitudes really stimulates my motivation.

reference and educational materials that we used over the previous year into

in the spring of 2012. There, I will support Japanese expatriates in getting usedstatements or breaking delivery dates. This, of course, causes a lot of stress, andThey are so determined to use the techniques and technologies that they are

English (which we are almost forgetting!). Also, as a member of the first group,

to living there, and I would like to help them communicate smoothly with local

hardship beyond imagination. However, experience in overseas businesses,

learning in Japan to perform well when they go back to Malaysia.

I believe that it is my responsibility to manage those incoming trainees who

staff. Taking advantage of Tokuyama’s technologies and the knowledge thathave different ideas about and morale toward work and to provide appropriate

I have acquired in Japan, I will do everything I can to maintain the safe andadvice for work and private life.

stable operation of the new factory and to contribute to the development of mywhere Japanese ways are not always respected, strengthens our capabilities to

I thought that the quickest way to make each other understood is to spend

overcome various difficulties and eventually changes us. I believe such a pro-as much time as possible with one’s counterparts. So, I play futsal with mycess will allow the Tokuyama Group to realize globalization in the truest sense.

Malaysian colleagues once a week. There, we can talk about our romances andIn the spring of 2012, I will return to Malaysia and be involved with prepa-

homeland. It is my dream to play an important role in the manufacture of

Below, I would like to introduce three young project members, among others,

other matters that we wouldn’t dare to speak about in the office. This did it.

rations for launching the operation of the polycrystalline silicon factory. I expect

polycrystalline silicon in Malaysia and, in the future, to export the material

who are engaged in this project—possibly an undertaking of the largest scale

We are now really close with each other. In July 2011, we expect to welcomethat the number of employees locally hired in Malaysia will increase. I would

manufactured there back to Japan. This is what I mean by “serving as a bridge

ever for the Tokuyama Group. I hope that they will become leaders within the

22 more staff employed locally in Malaysia. These new employees can hardly

like to grow as a leader capable of providing guidance to other employees.

connecting Japan and Malaysia.”

Group and support Tokuyama’s sustainable growth long into the future.

understand Japanese and are not familiar with Japanese culture and customs.

I would also like to see Tokuyama Malaysia recognized as a Malaysian company,

So, I imagine that we will have to make more efforts to establish communica-

loved by local residents, creating jobs there and contributing to the additionaltion with them. In doing so, I intend to maintain my proactive stance without

development of our homeland.

20

21Growing Globally with People
Expanding Global Procurement Network
Tokuyama’s Procurement Policies and Partnership with
Overseas Suppliers

Mexican Saltpan

Tokuyama’s Purchasing & Logistics Department adheres to procurement poli-

Message from ESSA Employees

cies emphasizing: (1) stability; (2) strict compliance; (3) eco-friendliness; and(4) economic efficiency. Tokuyama heavily relies on overseas suppliers for the
procurement of the raw materials and fuels it uses. Therefore, it is important

At ESSA, we produce salt by evaporating seawater using solar heat

how we meet these policies through our procurement operations, particularly

and wind. The salt we produce is shipped to many countries acrossthose undertaken with overseas suppliers.

the world. We are working very hard to achieve a stable salt supply

Caustic soda is a mainstay product of Tokuyama and is also a foundation of

from the Baja California peninsula of Mexico to Tokuyama and otherJapanese customers active in the

the Company’s integrated manufacturing operations in our “mother” Tokuyama
Factory. Another business foundation is in-house power generation to supply theAlso, the saltpan managed by ESSA

substantial amount of electricity required to conduct our manufacturing andand peripheral areas was designatedother operations. Caustic soda is based on industrial salt, while in-house power

as an internationally important bird

generation uses coal as fuel. Neither industrial salt nor coal is produced in Japan.
Accordingly, the Company procures all of the industrial salt and coal it uses fromoverseas suppliers. Annually, we procure approximately one million tons ofindustrial salt and two million tons of coal. We directly receive them—shippedfrom overseas locations on 45,000-ton bulk carriers—at our own docks.
The procurement of industrial salt and coal with strict adherence to the

Saltpan located in the Baja California peninsula (Mexico)electrolysis industry.

sanctuary by a U.S. bird protectiongroup in 2000. Even before such designation, ESSA promoted activi-

A bay near Guerrero Negro is home for whales, which stay in the bay forreclamation. Mine reclamation refers to the process of filling in mined land andmating and rearing only during the winter after a more than 10,000-kilometeris aimed at protecting the eco-system and preventing disasters, while creating

trip from the Bering Sea, and, because of this, this bay has been designated as

useful landscapes such as greenery through tree-planting and other activities.

a World Heritage Site. Also, the bay is renowned as one of the world’s best

IAR is implementing rigorous safety measures to prevent accidents andhabitats of birds. In winter, more than one hundred species of birds flock to thedisasters and is making every effort to improve working environments.

vation of nesting locations and the planting of approximately 200

bay, and there are many bird species that can only be seen at this location.

Tokuyama representatives regularly visit the mining site to confirm appropriate

perches to protect birds from coyotes and other predators.

Such biodiversity is testimony to the Guerrero Negro saltpan being eco-friendly.

working conditions.

ties to protect the environment in this bird sanctuary, including thesurvey of birds flocking to the saltpan, the maintenance and preser-

aforementioned policies requires strong partnerships with suppliers based on
the sharing and implementation of the precepts of these policies. In thisFor the Safety and Health of Coal Miners

section, we introduce the background of the production of industrial salt incrystallization of salt takes place over a period of up to about six months. After

The Boggabri coal mine is situated in the northeastern region of New South

Mexico and coal in Australia. Also, we will explain our relationships with ourthe crystallization process, supernatant liquid is removed, and salt is harvested

Wales, Australia. Since 2006, this coal mine has annually produced 2.4 million

suppliers in the supply chains.

and cleansed. At saltpans in Mexico, for example, the salt produced is shipped

tons of high-grade, high-calorie, low-sulfur thermal coal through the use of anout after these processes, which require approximately 30 months.

open-cut mining method. As demand for coal is expected to rise over the medium

Eco-Friendly Solar Evaporation Salt Production

and long term, particularly in Asia, the mine plans to expand its annual capacity

Boggabri
Coal Mine
Message from IAR Employees

Solar evaporation salt production is one method to make salt. Seawater is

The World’s Largest Solar Saltpan

step by step to 4.3 million tons by 2013. Idemitsu Australia Resources Pty Ltd

evaporated and condensed using solar heat and wind and is then crystallized

There is a small town called Guerrero Negro at the center of the Baja California(IAR) fully owns the Boggabri coal mine.

to make salt. This salt production method is suitable in windy regions with low

peninsula in Mexico. In this town lies a solar saltpan owned by Exportadora de

In open-cut mining, instead of digging tunnels, a series of spiral layers,

rainfall levels. Although it is an eco-friendly, efficient method, solar evaporation

Sal, S.A. de C.V. (ESSA), which boasts an area almost equivalent to the size ofknown as “declines” or “benches,” is developed. After World War II, thesalt production is not conducted today in rainy Japan. Saltpans are usually

the 23 wards of Tokyo. As a single saltpan, it is the world’s largest. It produces

appearance of heavy machinery has enabled the large-scale development oflocated in vast areas adjacent to seacoasts in extremely dry regions, such as

more than 7.5 million tons of salt every year, which roughly equals the amountnatural resources such as iron ore in Australia. Open-cut mining using heavy

action guidelines of Idemitsu Kosan

Mexico and western Australia. Japan imports solar salt primarily from theseof salt imported by Japan annually. Tokuyama uses ESSA, as one of the major

machinery is less expensive compared with underground mining, whichCo., Ltd., our parent company. We

countries. The production process starts with the pumping of seawater into

suppliers of industrial salt, for stable procurement. Guerrero Negro provides

involves the digging of tunnels and is thus labor-intensive. In addition, thewould be very pleased if our businessevaporation ponds. Pumped seawater travels through ponds—commonly

optimal conditions for this saltpan, such as extremely low rainfall levels, strong

more productive open-cut method makes it easier to ensure the safety of mineand other activities could serve to sat-

separated by levees and purposely made into different levels—due to natural

northwest winds during daytime and clayey soil that effectively retains seawa-

workers. Nevertheless, the open-cut mining method can cause various prob-

isfy the requirements of Tokuyama anddrops or via pumps. Through this process, seawater is gradually condensed.

ter, as well as seawater with a relatively high salt concentration at aroundlems, such as water pollution and dust and noise generation. Also, in recent

its stakeholders.

Condensed seawater is then transferred to crystallization ponds, where the

3.5% to 4.0%.

years, the mining industry is increasingly recognizing the importance of mine

Salt harvesting using harvester

22

Salt in stock

A flock of birds on the coast near the saltpan

Crane operation

Open-cut mining

We have long accommodated the needs of Tokuyama—our favoredcustomer since the founding of IAR—by supplying eco-friendly,
high-calorie, low-sulfur Boggabri coal. We are committed to maintaining a safe, stable coal supply into the future by ensuring compliance with the management policy andLoading coal on truck23

Actively Approaching LED Bulb Makers
Effective heat dissipation is required to improve the output (luminosity) of LEDs, which, inturn, enables a longer service life. In light of the spreading use of LED lights, Tokuyama
has promoted the development of aluminum nitride (AlN) packages for LEDs and AlN fillers(filling materials blended with resins) for super-luminosity LEDs, based on its aluminum
nitride powder, which boasts excellent insulation and heat dissipation properties. By
blending fillers with resins, the resultant material shows heat dissipation that is two toover ten times greater than that of conventional plastics. This suppresses the deteriorationof LEDs due to heat and contributes to achieving the longer service life of LED lights.
Tokuyama commands approximately a 60%
share in the global market for aluminum nitride
powder. The Company’s aluminum nitride powder

Tokuyama creates environmental technologies andis used for wide-ranging applications, including

eco-friendly products by emphasizing social contributions

heat sink substrates for power semiconductors

and environmental impact reduction efforts, even fromused in hybrid vehicles, trains and a various types

the development stage. For example, our aluminum nitrideof industrial machinery.

(AlN) exhibits superior heat dissipation properties. For thismaterial, Tokuyama is aggressively cultivating new appli-

CREATING

Tokuyama Creating New Technologies and Businesses

cations, particularly for power semiconductors used in

Aiming for the Mass-Production of Electrolyte

trains and electric vehicles and for light-emitting diodes

Membranes for Fuel Cells(LEDs), as both application fields often require effective

Leveraging its long-nurtured technologies in ion exchange membranes, Tokuyama isheat dissipation.

undertaking the development of electrolyte membranes, a core material of fuel cells, andMeanwhile, Tokuyama is currently working to nurture a

has successfully developed two types of electrolyte membranes—membranes for direct

new business in hydrocarbon-based electrolyte mem-

methanol fuel cells (DMFCs) and membranes for alkaline membrane fuel cells (AMFCs).

branes for use in fuel cells. In this new business, theOur test manufacturing line was completed in February 2011, and full-fledged productioncommenced in May. The line boasts an annual

Company is receiving an increasing number of customer

capacity of 10,000 square meters. We expect ourinquiries for such membranes. In response, we completed

electrolyte membranes manufactured througha test manufacturing line at our Tokuyama Factory inthis test manufacturing line to be used for a vari-February 2011. Looking ahead, Tokuyama will quickly

ety of applications, including portable fuel cells,

establish a mass-production structure and market evalua-

which use methanol as fuel.

tion of this product, thereby accelerating its hydrocarbonbased electrolyte membrane business. Through businessexpansion based on its endless inquiring mind and cease-

Strengthening Medium- and Long-term

less efforts, the Tokuyama Group will continue to contrib-

Development Projects

ute to the healthy development of society, and this is the

Tokuyama’s Centennial Vision embodies a growth strategy, “Create New Businesses withmission in the Group’s R&D activities.

Global Competitiveness.” This strategy is supported by an initiative, “Strengthen Mediumand Long-term Development Projects.” The Company has promoted the development ofelectrolyte membranes for fuel cells as part of efforts to create medium- and long-term
solutions for addressing the escalation of environmental issues through the use of chemical
technologies. Fuel cells are next-generation power-generating technology, which perpetually
generates electricity using hydrogen provided by fuel and oxygen in the air. They produce
electricity and water through the reverse principle of water electrolysis.
The electrolyte membranes developed by Tokuyama are used for AMFCs. The use of
our membranes expands the types of fuel and catalysts employed, and this is expected tocontribute to improved performance and reduced environmental impact of fuel cells.

24

25

Creating A New Life
Tokuyama’s Technologies Shaping the Future of Eco-Friendly Cities

Polycrystalline Silicon
for Solar Cells
The effective use of solar energy underpins
eco-friendly, future-oriented cities. Through theworldwide supply of polycrystalline silicon for solar
cells, Tokuyama is helping realize a society supported
by a distributed energy infrastructure.

Aluminum Nitride Filler
for LED Lights

Electrolyte Membrane
for Fuel Cells

In general, LED bulbs consume 10% of theRoughly 20% of worldwide CO2 emissions is attributable to automobiles. The shift to electric and fuel-cellcars will definitely have a significant effect on the
reduction in the environmental impact of society atlarge. By offering electrolyte membranes and electrodecatalysts, Tokuyama is contributing
to the spread of fuel cell use.

electricity consumed by filament bulbs. Throughthe provision of aluminum nitride fillers,
Tokuyama is contributing to the improved
luminosity, lighter weight and longer service

Through the proliferation of solar energy and fuel celllife of LED bulbs.

use, Tokuyama’s technologies are contributing to therealization of a society underpinned by a distributed
energy infrastructure.
When we consider global warming and resource depletion, we come to a conclusion: we must shift away from the development of an energy-intensive society. In the near future, we will see the realization of a society where generalhouseholds are using solar power generation systems and electric vehicles,with various types of equipment being connected to power stations via a communications network, and efficient energy use being promoted in every aspectof living. It is expected that new buildings will be equipped with renewableenergy systems and be built using construction materials that boast excellent
heat insulation and dissipation properties. It is also expected that new urban
development projects will increasingly involve the enhancement of ground sothat soil liquefaction is not caused by earthquakes and other phenomena.
Today, the entire world is witnessing the development of eco-friendly,
future-oriented cities in various locations, shifting away from the urban development model of the 20th century. Through the provision of polycrystalline silicon for solar cells and various materials for fuel cells, Tokuyama is contributing
to the development of such cities.

26

Heat sink substrates for rolling stock and automotive
motors: Tokuyama’s aluminum nitride ceramics Shapal isused as heat sink substrates for power semiconductors controlling the motor output of hybrid cars. The use of Shapal
enables the longer service life of power semiconductors andthe higher output of motors. Shapal contributes to effective
heat dissipation in various electronic devices as well.

Soda ash/caustic soda/chlorine: Tokuyama started
out as a soda ash business. Soda ash is used as a raw
material for car window glasses and other glasses andsoaps. Caustic soda, chlorine and its derivatives areused as basic materials in many different sectors. Vinyl
chloride resins, based on chlorine and its derivative,
are used to manufacture water pipes and many otherproducts.

Silica: Adding silica, instead of carbon black, to tires
not only reduces fuel consumption of cars but also
improves their grip performance on a wet road. In
various fields of our society, the Company’s silica
products are used for wide-ranging applications,
including the prevention of ink bleed on newspaper,
polishing agents for silicon wafers, and encapsulants
for semiconductor packages.

Cement/soil stabilization material: Tokuyama’s
cement and soil stabilization material is becoming
increasingly important as a basic material to support
safety and security in people’s lifestyles. Meanwhile, in
environmentally advanced cities, buildings are
required to have a greater level of heat insulation
properties and energy efficiency. By providing window
glasses and sashes as well as a variety of exterior andinterior construction materials, Tokuyama is contributing to eco-friendly urban development.

27

Creating Environmental Technologies
Tokuyama’s R&D Facilities Creating Innovative Technologies
Mission of Tokuyama’s R&D

any insufficiencies we might have. With the aim of achieving its Centennial

Recent years have seen rising concerns about environmental and energy issues.

Vision, the Tokuyama Group is facilitating in-house and external collaboration

In line with such a trend, innovative materials, such as those relating to solar

and searching for new technologies in line with its “Venture Sprit & Innovation”

power generation, are drawing attention from industries across the board.

policy. In this way, we will bolster our R&D and technological capabilities.

Like those in other industries, Tokuyama’s researchers and engineers are
required more than ever before to develop new technologies and materials to

Role of the Corporate Development Department

accommodate needs that change along with advances of the time. Also, in step

The Corporate Development Department maintains its independence fromwith business globalization, competition in the R&D sphere has intensified fur-Tokuyama’s business divisions and undertakes R&D projects to create newther, demanding quicker R&D development for new technologies and products

products and businesses that will support the sustainable growth of theand thereby raising the difficulty of R&D projects.

Tokuyama Group.
Tsukuba Research Laboratory

To remain a consistent winner in such an environment, Tokuyama must

United by the motto of “proudly delivering ‘Only One’ technologies to thecontinue to create “Only One” or “No. 1” technologies and products ahead ofglobal market,” researchers at the Corporate Development Department are

its competitors. By strengthening its selection and concentration approach,making daily progress in their R&D projects. They value uniqueness and inde-

Intellectual Property Department

Tokuyama will accelerate the pace of R&D projects. Simultaneously, thependence and engage in free and energetic discussions regardless of their

As a manufacturing company, Tokuyama must create and effectively utilize

Company will steadily promote these projects by establishing a balanced

posts and ranks. Such an R&D culture is the exact epitome of the Tokuyama

intellectual property to achieve sustainable corporate growth and make social

14

portfolio consisting of short-, medium- and long-term projects.

Group—filled with vigor. Also, our researchers frequently communicate with

contributions. Tokuyama’s Intellectual Property Department adheres to the12

related in-house organizations, such as the Management of Technology

basic policy of “maximizing the Company’s corporate value through the cre-R&D Structure

Division, the R&D Planning Department, the Intellectual Property Department

ation and effective utilization of intellectual property.” In line with this policy,

Tokuyama has established a Development Department and a Planningand the RC Research Laboratory, to form a framework to flexibly and swiftly

the Intellectual Property Department works to protect the outcome of the

Department in each business division. Through these departments, therespond to R&D requirements that change in line with the times.

Company’s R&D activities through the appropriate management of intellectual

6

property rights. At the same time, it conducts risk management to ensure that4

the Company respects the intellectual property rights held by other parties.

2

R&D Expenses

Company is advancing R&D projects that place particular emphasis on relation-

Current projects being promoted by the Corporate Development Department

ships with its customers. Meanwhile, in the Research & Development Division

include the following. In the environment and energy field, it is advancing thein charge of promoting corporate-wide R&D activities, the Corporate

development of electrolyte materials for use in fuel cells, which are increasingly

By securing the outcome of product and technology R&D—the crystallization

Development Department and other departments are promoting R&D activities

recognized as a clean energy source, leveraging the Company’s strengths in ionof the wisdom of Group researchers—through the establishment and manage-

aimed at creating new businesses. Also, with the goal of improving R&D effi-

exchange membranes and electrochemical technologies. Every year, R&D out-ment of intellectual property rights, the Intellectual Property Department strives

ciency, Tokuyama has established the Management of Technology Division, thecome is presented at the FC EXPO, an international exhibition for hydrogen andto maintain the competitiveness of Tokuyama’s operations. Moreover, theIntellectual Property Department, the RC Research Laboratory and other orga-

fuel cells, and draws significant attention of industry players. In the information

department implements intellectual property strategies closely linked with busi-

nizations to support corporate-wide R&D activities, in addition to the Corporate

and electronics field, through cooperation with academic institutions, we areness and technological strategies to maximize the utilization of its intellectual

Development Department focusing on the creation of new businesses and theaggressively undertaking the development of single-crystal aluminum nitride—

property portfolio. As the Tokuyama Group bolsters business globalization,

R&D Planning Department, which was formed in 2010 as an organizationa material used for next-generation light-emitting diodes—and fluoride single

the department will strategically manage the Company’s patents and otherexclusively tasked with identifying R&D project areas.

crystals—a material of scintillators. We aim to quickly commercialize these

intellectual property rights in Japan and overseas, thereby contributing to thematerials currently under development, along with other projects. Furthermore,enhancement of the Group’s corporate value.

R&D Driving Tokuyama’s Growth

we will continue to launch projects in new fields, thereby creating a portfolio ofTechnologies advance constantly. Therefore, no corporation can achieve busi-

high-value-added products that provide superior competitiveness.

ness growth unless it realizes technological breakthroughs and innovation. In
other words, to enhance the competitiveness and prospects of a business, or toensure the growth potential of a business, it is indispensable to search for new

Tokuyama’s R&D Organization

technologies and create technological innovation with clear strategies. As someof Tokuyama’s businesses are maturing, we must create new businesses. To thisCement Business Div.

Development Dept.

Chemicals Business Div.

Development Dept.

Specialty Products
Business Div.

Development Dept.

Research &Development Div.

Corporate Development Dept.

Manufacturing
Technology Div.

RC Research Laboratory

Management ofTechnology Div.

Intellectual Property Dept.

end, Tokuyama is currently promoting such initiatives as identifying areas of
new technologies leading to the creation of new businesses. In addition, webased on such strengths, create new products and businesses that will underpin
the future growth of the Tokuyama Group.
In searching for new R&D themes, Tokuyama is focusing on such growthfields as “environment and energy,” “information and electronics” and “lifePresident

are working to develop these technologies into our unique strengths and,(¥ billion)

10

10.7

11.1

11.8

11.8

08

09

11.4

12.1

9.3

8

0

05

06

07

10

11 (FY)(plan)

Tsukuba Research Laboratory

Tokuyama Research Laboratory

RC Research Laboratory

The Tsukuba Research Laboratory is situated in thepeaceful setting of Tsukuba Science City in Ibaraki
Prefecture. This laboratory conducts research on fundamental and advanced technologies from a mediumand long-term perspective while promoting researchin medical products and organic fine chemicals.
Also, the laboratory goes beyond basic R&D for functional materials, performing applied R&D for systems
and services.

Located within the Tokuyama Factory site, theTokuyama Research Laboratory is in charge of theCompany’s core R&D. Taking advantage of its close
proximity to the Tokuyama Factory, this laboratory
incorporates requests from business divisions into its
product development in a timely manner. Coveringwide-ranging fields—from basic chemical products
to cement—the laboratory undertakes basic andapplied R&D as well as process development.

Positioned under the Research & Development
Division, the RC Research Laboratory focuses on thedevelopment of cutting-edge technologies to analyzematerials while supporting R&D activities aimed atcreating new businesses that will underpin the future
growth of the Tokuyama Group. To enable Tokuyama
to protect the global environment and promote business activities centered on product safety, this laboratory applies its expertise in environmental analysis
and risk assessment, maximizing the effectiveness of
the Group’s Responsible Care (RC) activities.

and healthcare.” We are prioritizing the utilization of the current advantages intechnologies and materials that the Tokuyama Group, including affiliates,
boasts. At the same time, we are maintaining a policy of actively tapping theadvantages of third parties, such as academic institutions, to compensate for28

R&D Planning Dept.

29

Creating Environmental Technologies
Dreams and Strategies in Environmental Technology Development

Electrolyte Membrane for Fuel Cells

Aluminum Nitride

Story of Electrolyte Membrane Development

Tackling the Creation of High-Quality Aluminum Nitride

At the Corporate Development

Fuel cells provide high generation effi-

Traditionally, heat and chemical agents

In line with the realization of more

Department, we are actively promoting

ciency and are power sources with low

have been used mainly to kill microor-compact electronic devices with fasterthe development of ion exchange mem-

environmental impact. Thus, they are

ganisms that can cause diseases. In

processing capabilities, such as person-

branes for fuel cells using our core elec-

recognized as one of the most impor-recent years, ultraviolet light radiation isal computers and smartphones, thetrochemical technologies, which havetant elements in the world’s efforts toincreasingly recognized as a clean ster-electronics industry is increasingly fac-originated from Tokuyama’s electrolytic

realize a society underpinned by a dis-ilization method with low environmen-

ing the issue of releasing the heat gen-chlor-alkali method. Fuel cells havetributed energy infrastructure. Ahead oftal impact. However, as their nameerated in these devices. This issue isbecome a focus of R&D worldwide,
Hiroyuki Yanagi
General Manager,
Corporate Development Dept.

Dr. Yohei Chikashige

clean energy source that does not rely

Research Chemist,
Corporate Development Dept.
(Tsukuba)

on natural resources. In particular, within the development of electrolyte mem-Kazuya Takada

branes for alkaline membrane fuel cells

Senior Manager,
R&D Planning Dept.

Dr. Yukihiro Kanechika

effectively releasing the heat generated

cury, creating a contradiction, since

Manager, Specialty Products
Development Dept.,
Specialty Products Business Div.

by semiconductors used for power con-eco-friendly ultraviolet light sterilization(AMFCs), and we are currently advanc-shared by the automobile industry, as

ultraviolet light sources—contain mer-can cause environmental pollution.

trol systems in hybrid and other cars canthe onset of the Great East Japaning development projects aimed at real-

Earthquake, expectations are heightening for the use of distributed powerizing reasonable prices, high output and longer service life of ourOn the other hand, aluminum nitride (AlN) not only boasts excellent

and, ultimately, these cars. AlN boasts excellent thermal conductivity andsources, including fuel cells. It may not be too much to say that the successmembranes. In AMFCs, such common metals as iron and nickel can be used

thermal conductivity, but is also known as a semiconductor material thatelectrical insulation. Due to these features, AlN has been used for the heatin realizing the practical use of fuel cells will determine the future of theas electrode catalysts, in place of such expensive, rare metals as platinum.

emits ultraviolet light with a powerful sterilizing effect. Taking

human race. At the same time, the entire world must work to combine

Also, AMFCs can be fueled by bioethanol. Due to these features, the entire

advantage of the materials’ characteristics, we are advanc-solar, wind, water and other eco-friendly power generation with the use of

globe is tackling the development of AMFCs for automotive and othering the development of high-performance ultraviolet

However, since it has been difficult to supply reason-fuel cells and lithium batteries. Tokuyama is committed to contributing to

improve the reliability of various devices

applications as eco-friendly fuel cells.

LEDs by synthesizing and utilizing high-quality single-

ably priced AlN, the scope of AlN application has been

crystal AlN substrates.

limited to certain areas. In response, to supply more rea-

sinks of these semiconductors while contributing to the development of LEDs with greater luminosity and longer service life.

the achievement of optimal combinations through its materials. We have

Without doubt, we have utilized the ion exchange membrane technol-

been able to realize revolutionary membrane performance by skillfully con-ogies that Tokuyama has accumulated over the years in the development

According to the 2006 version of the WHO/UNICEF

sonably priced AlN, we are accelerating the development

trolling the chemical structures of the membrane surface and catalyst inter-of electrolyte membranes. Still, as there were no precedents that we could

Joint Monitoring Programme for Water Supply andof a new filler based on the AlN manufacturing technolo-

face. We plan to start the operation of our pilot facilities for the processing

refer to throughout our development, we had to start with the most basic

Sanitation, approximately 1.1 billion people worldwide dogies that we have accumulated to date. By blending AlNof membranes this year and launch full-fledged product development.

of basics, thinking systematically about the materials to be used andnot have access to safe drinking water, and more than 1.6

with resins, the heat conductivity of the resultant material

Indeed, manufacturing forms the foundation of Tokuyama. It is ourrepeating hypothesis verifications. In so doing, we had to try new ways of

million babies and young children are dying every year from

responsibility to contribute to address energy issues through the application

concept development, “thinking outside of the box.” It has been a series

infectious and other diseases caused by the drinking waterof our chemical and other capabilities. Surely, we will have to overcome aof trials and errors. Finally, we managed to develop an electrolyte mem-they consume. So, if reasonably priced, portable sterilization devices thatand help realize more effective heat dissipation in electronic devices.

number of problems, specifically, membrane performance, costs and repro-

brane that significantly improves the service life and output of fuel cells forhave a long service life and combine less power-intensive ultraviolet LEDs

As prices become more reasonable, a wider range of AlN applications canducibility. By steadily solving each of these problems through teamwork,

practical applications. We have seen a “light on the horizon,” so to speak.

and solar cells are distributed across the world, we would be able to save

be expected in various aspects of living.

we aim to launch new membranes as quickly as possible.

30

suggests, mercury lamps—used as

the world, our team has been involved

being viewed as a next-generation,

Yet, we have certain problems to solve to achieve additional perfor-

Aluminum nitride filler

the lives of many people.

can be improved two to tenfold or more. This blending canboth reduce the manufacturing cost of heat sink substrates

In addition to the AlN substrates we have already commercialized,

mance improvements. However, we are working to make improvements

At present, white LEDs are taking the place of filament bulbs and fluo-

we aim to supply new, high-performance and yet reasonably priced fillers,

day by day, dreaming of the day when the technologies and products werescent lights. As such, the shift from vacuum tubes to solid-state devices isthereby contributing to the realization of electronic devices that arehave developed and refined are distributed and used throughout the world.

a major technological breakthrough. To promote such a breakthrough, wecapable of even faster processing, offer greater reliability and achieve a

are taking on challenges of realizing innovation, aiming to achieve the prac-longer service life. In this way, we will help society reduce its impact ontical use of ultraviolet LEDs that will replace conventional mercury lamps.

the environment.

31

Developing the Tokuyama Factory into Our “Mother Factory”
We are working to improve the productivity at our Tokuyama Factory and on aGroupwide scale through the reestablishment of manufacturing and information
infrastructures. To strengthen our manufacturing infrastructure, we have positioned
the factory as the Company’s “Mother Factory” responsible for the TokuyamaGroup’s technologies and expertise. Based on this positioning, the Tokuyama Factory
will accelerate collaboration with the Kashima Factory and other factories operated
by Group companies. The Tokuyama Factory boasts advantages in the manufacturing
processes and technologies required to launch mass production after product development is completed. We will leverage these advantages—fostered through operations at the frontlines of manufacturing technology development—to expand our
global operations. In addition, Tokuyama will optimize its production network andpromote cost reductions and awareness-raising through steady, thorough rationalization, thereby bolstering its international competitiveness—a growth strategy
under its Centennial Vision.
To enhance its information infrastructure, Tokuyama has started the introductionof an enterprise resource planning (ERP) system Groupwide. Through the reinforcement of management accounting, we will work to improve the productivity not only

Tokuyama is working to establish a highly profitablein our manufacturing divisions, but also our back office divisions.

business structure while striving to catch up with the paceof changes in operating conditions. To this end, theCompany will promote necessary restructuring at its
Tokuyama Factory. The sources of competitiveness of our
Tokuyama Factory include unparalleled energy efficiency

INTEGRATING
Tokuyama Bolstering International Competitiveness by
Refining Its Integrated Manufacturing Operations

and the technologies that we have nurtured at the frontlines of manufacturing operations. With an eye to strategically responding to dynamic changes in raw material andfuel prices and the possible implementation of an environmental tax, we aim to reduce our unit energy consump-

Sophistication in System and Process Integration
The Tokuyama Factory is located within the Shunan Petrochemical Complex intion and improve the productivity and efficiency of

Shunan City, Yamaguchi Prefecture, and it is the Company’s core production base,

operations in back office divisions, thereby further solidi-

integrating diverse manufacturing operations. The Tokuyama Factory consists of thefying the foundation of the Tokuyama Factory as ourHigashi Plant, which produces polycrystalline silicon and organic chemicals, the“Mother Factory.”

Tokuyama Plant, which mainly produces soda ash and other inorganic chemicals,
and the Nanyo Plant, which produces cement. These plants and production facilities
work together to effectively use raw materials, products and by-products, and the
Tokuyama Factory has constantly pursued its vision of becoming an integrated
production base, where energy, materials and technologies support close links
among different businesses.
At the heart of the integration at the Tokuyama Factory is its in-house power
plant, which boasts one of the largest capacities in Japan at 552,000 kilowatts. The
electricity and steam generated are supplied through power lines and pipes to eachplant. In addition, the Tokuyama Factory has been making exhaustive efforts torecycle waste generated from within and effectively use such waste as fuel and raw
materials for cement production. Thanks to these efforts, the Tokuyama Factory
achieved a zero-emission rate of 99.9% in fiscal 2010.

(Top) Vinyl chloride monomer plant in the Tokuyama Factory(Bottom) President Kogo and engineers playing key rolesin the Tokuyama Factory

32

33

Unit Consumption of Waste and By-Products

Integrating with Communities(kg/ton of cement)

500

Recycling Approach Open to Society

425

430

424

414

06

07

08

09

430

400

300

Resource Recycling System Centered on Our Cement Plant

277

but also remote communities for effective reuse.

Tokuyama accepts a large amount of waste not only from neighboring

200

Local governments

100

Yamaguchi
Eco-tech
Corporation

Incinerated ash

Yamaguchi Eco-tech Corporation is a joint venture0

Rawmaterial mill

91

10

(FY)

Preheater
Raw material dryer

Raw material mixing siloof the Company and Ube Industries, Ltd. The Nanyo

Raw material
storage silo

Plant accepts incinerated ash generated at local
incineration plants in Yamaguchi Prefecture after
pretreatment by Yamaguchi Eco-tech Corporation.

Outside corporations
Outside corporations/
Tokuyama Factory

Outside corporations
Slug

Coal ash

SludgeIncinerated ash

Preincineration

Waste liquid

Local governments/
outside corporations

Outside corporations/
Tokuyama FactoryHigh moisture sludge

Waste plaster boards, construction waste soil, etc.

Waste plastics
Kiln

Outsidecorporations

Tokuyama Factory

Waste white earth, etc.

Incombustible caustic lime
Coal ash

Outside corporations/Tokuyama Factory

Construction waste soil, etc.

Natural resources

Clinker silo

Coal
Waste carbon (soot, etc.)

Coal mill

Plaster

Limestone

Finishing millSilica stone
Material and Thermal Recycling Volumes(1,000 tons)

2,500

Alternative raw materials

2,144

1,947
2,000

1,550

steelworks and coal ash from thermal power plants, which are similarly reused

and Industries

as alternative raw materials for cement production.

The Nanyo Plant, a cement production base within the Tokuyama Factory, is

Meanwhile, Tokuyama has promoted the recycling of waste plastics and has

promoting the reuse of by-products from the Company’s soda ash plant andestablished a technology to enable the stable injection of crushed plastics incoal ash from the in-house power plant as raw material for cement production.

large quantity from the front of its cement kiln. In 1999, the Company became

In addition, the Nanyo Plant proactively accepts a significant volume of waste

the first Japanese cement maker to have established a plant for making waste

and by-products from local communities and industries, promoting a recycling

plastics-based fuel for thermal recycling at a crushing capacity of 15,000 tons

approach open to society.

per year. The Company has continued to expand the crushing capacity ever since,

For example, the Nanyo Plant accepts sewage sludge from local govern-

and the plant is now capable of accepting, crushing and combusting 125,000

ments within and outside Yamaguchi Prefecture for reuse as an alternative raw

tons of waste plastics a year. The temperature in the cement kiln reaches 1,000

material for cement. Also, it receives incinerated ash generated from household

to 1,800 degrees Celsius. At this high temperature, combustible elements arewaste. More specifically, incinerated ash generated at local incineration plants

reduced to ash, which is used as an ingredient for cement. This makes ouris sent to Yamaguchi Eco-tech Corporation. Yamaguchi Eco-tech Corporation

cement kiln quite unlike incinerators in that it generates no residue. Throughthen removes chlorine and other substances unwanted for cement production

these facilities and activities, the Tokuyama Factory is continuing “Venture Spirit

from the ash to improve ash quality to a level sufficient for reuse. The Nanyo& Innovation” toward the realization of a recycling-oriented society.

Plant accepts this processed ash. The Nanyo Plant also accepts slug from

34

82

100

1,430
75

80
70

70

Proactively Accepting Waste from Local Communities

Cement silo
1,561

1,500

67

1,000

500

0

Cement shipment

125

2,100

Alternative thermal energy

50

25

4
91

06

07

Material recycling volume

Low-moisture sludge facilities

08

09

10

(FY)

0

Thermal recycling volume

High-moisture sludge facilities

Coal ash facilities

35

Integrating with Communities
Tokuyama Blending in with Society
Tokuyama Factory RC Community Dialogues

and preventive initiatives for process safety and disaster prevention.” Though“Mikage” Book Donation Program

On August 18, 2010, the Fiscal 2010 RC Community Dialogue took place atbeing grateful for these supportive comments, we felt that it is necessary for us

Tokuyama began this program as a project commemorating its 60th founding

Tokuso Kaikan. With the objective of gaining the understanding of community

to constantly strengthen our monitoring and management activities.

anniversary. The year 2010 marked the 34th event under this program. The

associations around the Tokuyama Factory concerning the Company’s environ-program title “Mikage” reflects two things: Tokuyama Factory’s address, at 1-1

mental, safety and disaster prevention efforts, this event was the seventh ofDisaster Drill

Mikage-cho; and the Japanese term “Okage” (Chinese characters for “Mikage”

its kind.

On November 12, 2010, the Fiscal 2010 Yamaguchi Prefecture General Disastercan be pronounced also as “Okage”) meaning indebtedness and gratitude.

It drew 23 participants from community associations and three from theShunan City Government. Mr. Nakamura, deputy general director of the
Department of the Environment and Sewerage of the Shunan City Government,delivered a presentation on new rules for waste sorting.

Drill for Petrochemical Complexes and Related Facilities was held on the premises

In 2010, Tokuyama donated ¥100,000 to each of 49 elementary and juniorhigh schools in Shunan City. With this year’s donations, the amount of donationsof the Tokuyama Factory.
Conducted in line with Yamaguchi Prefecture’s disaster prevention plan for

to date, including book coupons and bookshelves, totaled ¥170.65 million.

petrochemical complexes, this annual disaster drill is designed to allow facility

The photos presented above and to the right were taken when General

A survey conducted prior to the event revealed that members of the com-

operators to familiarize themselves with disaster response activities to be jointly

Manager Tetsushi Yamada of the Tokuyama Factory and other Tokuyama

munity associations were concerned about fire and explosions, dust and sootundertaken with related local authorities in the event of an actual disaster.

employees visited Shunan City Municipal Oodori Elementary School in Juneand smoke from chimneys. In response, through the event, which included a

Moreover, this drill aims to strengthen collaborative ties among these facility

2010. (This elementary school merged with Shunan City Municipal Numagi

operators and local authorities.

Elementary School at the end of March 2011.)

factory tour, our explanations focused on the Company’s measures, including
activities to prevent accidents and disasters, actual actions to be taken in case

The drill was conducted on the assumption that a 7.6-magnitudeof fire (measures for process safety) and initiatives to reduce dust and sootearthquake—measured at an intensity of lower six in Shunan City—had(measures for environmental protection).

occurred in eastern Yamaguchi Prefecture. Other conditions were also assumed,

Tokuyama Science Foundation

At the event and afterwards, participants made comments such as, “Seeing

including the onset of a fire at a heavy oil pump within the Tokuyama Factory,

The Tokuyama Science Foundation was establishedactual sites was really helpful,” “I was impressed with Tokuyama’s measures

the spread of fire to adjoining heavy oil tanks and a heavy oil leak into the sea

on September 19, 1988, to commemorate the 70th

for environmental protection, disaster prevention and safety promotion” and “I

due to aftershocks. A total of about 310 people from 19 organizations partici-

anniversary of Tokuyama’s founding. This mission offeel a little safer now after hearing explanations on Tokuyama’s management

pated in the drill, using 11 vehicles and nine ships.

the foundation is to offer financial support for
research into new materials and related subjects inFeedback on
Tokuyama’s
RC Community
Dialogue

Kazutoshi Wada
Local resident, Chairman of Shunan City East
Tonda Area Council of Social Welfare

Tokuyama proactively discloses information.
I was born in an area on the other side of the river where
the Tokuyama Factory is located and have lived there all
my life. I remember when I was a kid, roof gutters would
often get clogged with cement ash if we did not wash it
away. Japan was in the middle of a high economic growth
period then, and the concept of environmental pollution
was not so common among the public. So, I suppose, “what’s done is done.” We can’tchange the past.
Today, however, corporations cannot exist without giving consideration to environmental issues. Currently, various corporations are holding RC community dialogues ineastern Yamaguchi Prefecture. Tokuyama started its unique RC Community Dialogueearlier than any of these corporations. In addition to this program, Tokuyama is implementing proactive initiatives, including safety and disaster prevention measures, while
promoting communication with local community associations. Therefore, I affirm that
Tokuyama is actually promoting corporate management in harmony with society, as its
Basic Policy states.
Still, like the Great East Japan Earthquake, unexpected events can happen
anytime. So, on behalf of all members of neighboring communities, I strongly hopethat Tokuyama will do its best, taking steps to ensure safety and prevent accidents
and disasters.

36

Feedback on
Resident
Evacuation Drill

Children at Oodori Elementary School

Research grants: ¥648 million to 333 recipients
The foundation offers research grants to young researchers aged 45 or younger atuniversities and research institutions in Japan. After the financial support period,a research presentation meeting takes place with the participation of all recipients.

science and technology and to raise awareness of

Cumulative total financial support
from fiscal 1988 to fiscal 2010:

science and technology, thereby enabling socioeco-¥777million

The foundation subsidizes the participation of young researchers aged 45 or younger
at universities and research institutions in Japan at international meetings held outside Japan. After returning to Japan, the recipients are required to submit reports on
the results.

nomic development and the improvement of peoShigetaka Fujisawa
Disaster prevention staff (Advisor), Disaster Prevention
Division, Disaster Prevention Construction Department,
Shunan City Government

Many local residents participated in the drill,
showing concerns about emergency evacuation.
As part of the Fiscal 2010 Yamaguchi Prefecture General
Disaster Drill for Petrochemical Complexes and Related
Facilities, we conducted an emergency evacuation drill for
local residents. Before the day of the drill, we were worried that not so many people would join the drill because
it was organized as a daytime event on a weekday.
However, probably due to a series of recent disasters frequently reported on various
news programs, many local residents participated in the drill, showing strong concern
about disaster prevention.
All participants responded seriously at the signal advisories for evacuation made bypolice cars and Shunan City government vehicles. Elderly participants were running as
fast as they could, and people were helping those on wheelchairs in need of nursing
care to get to designated evacuation sites. After the drill, many participants asked us
various questions, including where to evacuate to, how to evacuate and who will givethem evacuation advisories and will lead them to evacuation sites. We answered thosequestions in detail, and participants seemed to have familiarized themselves with the
emergency responses to be taken.
Meanwhile, the event provided us with a good opportunity to witness the seriousness of local residents concerning disaster prevention and evacuation measures. They
proactively joined lectures and firefighting training
using water extinguishers, while tasting emergency
foods. The drill was held for a short period of time,
but it offered the city government an invaluable
experience. We would like to hold other similar
events in cooperation with local corporations.

Financial support for international exchange:¥67 million to 248 recipients

ple’s lives.
The foundation has to date offered a cumulative total of ¥777 million for 665 projects. Many

Financial support for international symposia:¥18 million to 34 projects

who enjoyed support from the foundation as
youths are today leading professors at universities

The foundation provides financial support for the operations of international conferences to enable researchers to exchange information with peers overseas.

nationwide.

Grants for campaigns on science and technology:¥44 million to 50 projects
The foundation backs campaigns that present the excitement and wonders of scienceand technology to children. The Chugoku/Shikoku Branch of the Chemical Society ofJapan plays a central role in organizing a series of exhibitions titled “An Exciting
World of Chemistry” in the summer vacation season. In Yamaguchi Prefecture, there
are “invention clubs” for boys and girls operating in seven cities, towns and villages.

Exhibition: An Exciting World of Chemistry(Kochi City, Kochi Prefecture)

Cumulative Total of Grants and Financial Support(¥ million)

800
700
600
500
400
300
200
100

All recipients of research grants in fiscal 2009

0

88 89 90

91

92

93

94 95 96

97 98 99 00 01

02

03 04 05

06 07 08

09

10 (FY)37

Integrating with Communities
Passing on Tokuyama’s “DNA” to the Next Generation
Background of the Establishment of the Technical Training Center

Inter-Generation Technology Transfer and Safety Assurance

Tokuyama established the Technical Training Center within the Tokuyama Factory

On-site plant operators are required to have sound judgment, such as that to imme-

skills and knowledge. These include: (1) management during the steady opera-in Shunan City, Yamaguchi Prefecture in 2007—the first year of the mass retire-

diately stop the operation of machines when an emergency occurs. They are also

tion of plants based on accumulated experience; (2) procedures for shutdown,

ment of “baby boomers” in Japan. This center provides young employees, rang-

required to have risk intelligence, including complete knowledge about procedures

startup and other non-routine operations; (3) knowledge about raw materials

ing from new employees to team leader candidates, with education and training

to prevent workers from getting caught in operating machines and equipment.

and products; (4) knowledge about chemistry, chemical engineering and facility

Tokuyama’s Strengths Underpinned by Its People

Meanwhile, our plant operators on site must have an extensive range offocusing on actual plant and other on-site operations. Through various educa-

At Tokuyama, we recognize that it is paramount through education andmanagement; and (5) problem-solving capabilities required to promote safetytion and training programs, Tokuyama is working to develop these employees’

training programs to enable our employees to conduct their work without

activities and improvements on site. To enable our plant operators to sharpen

skills so that they can proactively learn, think and take action.

calamities. In recent years, our new employees particularly lack the ability totheir skills and knowledge in these areas, we provide manufacturing skills edu-

Looking into recent trends, schools are strengthening IT education while sacri-predict or foresee risks and hazards. Therefore, to make them fully aware that

Keiji Abecation, aside from new employee training. Through this education program, we

ficing practical training on mechanical and electrical operations. Due to suchthey are working under conditions that can be dangerous beyond their imagi-

General Manager, Technical Training Center

offer lectures on such subjects as operational management, chemical engineer-

trends, young employees often lack the basic knowledge required to work innation, our programs are centered on the slogan, “Experience, feel and learn.”

I would like new Tokuyama employees to understand that factories and plants

chemical plants. Turning to problems specific to manufacturing frontlines, an

For example, in the hazard experience program, we purposely drop a

are full of risks and dangers. I would like them to learn the seriousness of it: one

Explaining these activities may sound like we are teaching our trainees

increase of automated processes and a decrease of the frequency of regularmachine tool from a high place on a pot, in place of a skull, to point out thesubtle error in following prescribed procedures can lead to a major accident,

everything from A to Z. That is not the case at all. In fact, we are working torepair work have reduced opportunities for these employees to understand facility

significant impact of falling objects. Also, we make trainees wear special gloves

and they could get hurt, or even lose their life.

realize education and training programs where trainees learn by themselves

mechanisms through hands-on experience with actual machines and equipment.

and arrange for their fingers to become softly jammed in machinery, while sus-

Today, an increasing number of plants are implementing safety measures.

through their own thinking processes. Ultimately, we aim to establish a system

So to effectively solve all of these problems and raise the level of overallpending them with a safety belt. Through this program, trainees experience theSo, the number of people who actually experience dangerous situations into educate and train our employees so that they can proactively learn, thinkskills of its young employees, Tokuyama has established the Technical Training

pain and severity inherent in plant operations and strive to improve theirplants is decreasing. This is fortunate. However, we cannot really reproduce

and take action. In fiscal 2010, 662 trainees, including 298 people working at

Center. This center has created curricula that make use of actual machines andawareness toward hazard prediction and risk management.

situations that make people undergo such situations in actual plants. This is

the Company’s contractors and other corporations, took our education andtraining programs.

ing, electrical engineering, instrumentation, machinery and problem solving.

equipment. In addition, the Company has appointed five veteran plant

For education and training on manufacturing technologies, a brine genera-

why we came up with and introduced our unique programs, where we make

operators as dedicated trainers, including senior contract workers who are con-tion training plant has been installed within the center. Using this plant, we

our trainees experience getting caught in machinery and make their fingers

It is one of our missions at the Technical Training Center to nurture young

tinuing to work after reaching retirement age.

allow trainees to experience the entire production process, from the formula-experience the pain when jammed in machines. Through these programs, we

generations to have such capabilities, thus passing on Tokuyama’s “DNA” totion of operational plans, preparation for operations, actual operations andemphasize the slogan “Experience, feel and learn,” making our trainees

these new generations. After all, the next generation will determine the future

quality checkups to shipment. Also, we offer them opportunities to make judg-

remember the pain when actually experiencing dangerous situations.

of the Tokuyama Group.

ments, implement response measures and complete recovery work by inten-

The time allowed for new employee training is limited—only about 20

Also, we will welcome new local employees, hired in Malaysia, to thetionally causing plant failure. Through such practical training, we are working todays. We have to be really focused, concentrating on teaching the bare essence

Tokuyama Factory in 2011. Humble though its efforts may be, the Technicalnurture plant operators capable of proactively learning, thinking and takingof what they are going to learn on site. So, we have developed our curricula toTraining Center would like to make contributions to Tokuyama’s globalization.

action even in the case of plant troubles.

cover a minimum of subjects—subjects that our trainees probably should expe-

By consistently providing learning experience through the Technical Training
Center, Tokuyama is effectively transferring its manufacturing expertise and vet-rience beforehand so that they blend in smoothly with the workplace to which
they will be assigned.

eran operators’ techniques, all of which collectively constitutes the “DNA” ofTechnical Training Center

Practical training on operational management

Practical training on electric sequence control

38

Training plant

the Company, to younger generations.

Experiencing the use of safety belt

Experiencing loose scaffolding

Experiencing getting caught in rollers

Training on flange coupling

Practical training on chemicalengineering calculation

Practical training using fire-fighting equipment

Practical training on high-voltage switchboard operation

39

Promoting Environmental Management

Tokuyama’s Environmental Management:
Performance for Fiscal 2010

Cumulative Total Environmental Investments (since fiscal 1990)

Environmental
Accounting(¥ billion)40

To accurately grasp and analyze the amounts of investments and costs

Protecting the Global Environment

30

28.2

30.0

31.4

33.2

35.3

associated with environmental preservation activities and improve the

One of our most important corporate social responsibilities is to actively protect the global environment. Tokuyama practices environmental management with an emphasis on

effectiveness of environmental investment, Tokuyama has implemented

environmental perspectives in all of its business activities.

environmental accounting since fiscal 2000.

20

10Tokuyama’s Environmental Performance for Fiscal 2010

Environmental Costs

Tokuyama strives to obtain accurate data on the input and output of materials and substances in its business activities and reduce the environmental impact of these activities
to meet its environmental targets.

Investments relating to pollution control, global environmental conservation, resource(Unit: 1,000 metric tons)

respectively, of Tokuyama’s total environmental investment during fiscal 2010. Costs
relating to pollution control, resource recycling and global environmental conservation accounted for 68%, 16% and 10%, respectively, of the Company’s total environ-

INPUT

OUTPUT

Production Activity

mental costs for the same period. Major environmental investments included the

Tokuyama

installation of new neutralizing facilities, the replacement of existing neutralizing facil-

Waste and by-products

Carbon dioxide (CO2)

ities and the installation of new facilities for the treatment and stabilization of waste.

1,500

6,170

Environmental Preservation Costs

Fuel(49,900 thousand GJ)

20

Raw materials

Substances withenvironmental impact

5,390
Industrial water

40,500Items

Water Quality
Environmental
Impact Reduction

Soot and Dust

5,270
Fiscal 2010 Target(Reference Fiscal Year: 2007)±0%(Compared to the average emission
from fiscal 2005 to 2007)

Social Activity Costs
Costs for Environmental Damage

09

10

(FY)

business activities while supporting energy conservation in employee

Greenery development,
production of CSR report
Imposition, management of
a former mining site

Promotion of Energy Conservation
Tokuyama consumes a huge amount of energy in manufacturing its core products,

1,186

4,958

825

709

6

1,171

0

0

Aware of the high priority of preventing global warming, the Company is con-

30

290

ducting energy conservation activities to reduce carbon dioxide emissions. The

014

Tokuyama Factory is responsible for more than 99% of the Company’s energy con-

21

17

0

140

2,068

7,299

such as caustic soda, cement and polycrystalline silicon. Carbon dioxide, one of thegreenhouse gases, is generated chiefly by burning fossil fuels and also by the decarboxylation of limestone used as a raw material in cement production.

sumption. In fiscal 2010, the Tokuyama Factory promoted the use of fuels alternative
to coal, and it enhanced energy conservation. As a result, the Tokuyama Factory
managed to lower its unit energy consumption index (with unit energy consumption
in fiscal 1990 set as 0) by 2.2 percentage points to -24.6%. This figure indicatesFiscal 2011 Target(Reference Fiscal Year: 2010)±0%(Compared to the average emission
from fiscal 2005 to 2007)

on reduction in energy consumption, gains on sale of valuable waste, gains on reduc-In fiscal 2010, the Cement Manufacturing Department, the Si Manufacturing

tion in waste disposal costs through waste recycling and gains on reduction in raw

Department and the Steam & Power Generation Department worked on projects tomaterial and fuel costs through waste recycling. Thus, Tokuyama does not calculate deimprove unit energy consumption. They have developed projects which will, whenfacto economic benefits based on estimates whatsoever. In fiscal 2010, Tokuyama

successfully completed, reduce the Tokuyama Factory’s energy consumption by 0.7%

achieved economic benefits totaling approximately ¥1.4 billion, up about ¥50 million(equivalent to reducing CO2 emissions by approximately 30,000 metric tons perfrom fiscal 2009.

year). These departments are currently implementing these projects. The Tokuyama

Economic Benefits in Fiscal 2010

Factory continues to encourage some departments to promote improvement efforts

Rating쎻±0%

Nitrogen

±0%

−2%

쎻

±0%

쎻

−45%

҂

Hazardous Air Pollutants (VCM, EDC)
−24%
EnergyUnit Energy Consumption Index
22% lower than the fiscal 1990 level
Conservation

−22%

҂

Zero Emission Zero-Emission Rate

Tokuyama is making steady energy conservation achievements in its

the unit energy consumption index to -24.0% or less.

쎻

Rate of Effective Waste Utilization

Prevention of global warming is key to the future of the human race.

Rating: 쎻 : Satisfied; ҂: Not satisfied

−23%

PRTR

of Global Warmingthat the Tokuyama Factory has already achieved its fiscal 2012 target of lowering

−41%

−49%

Commitment to the Prevention

To analyze the economic benefits, we calculate nothing but the real benefits of gains±0%(Compared to the average emission
from fiscal 2005 to 2007)±0%(Compared to the average emission
from fiscal 2005 to 2007)(To be included in PRTR)

24.6% lower than the fiscal 1990 level쎻—*

Maintain at 94%

94%

쎻

Maintain at 94%

Maintain at 99.9%

99.9%

쎻

Maintain at 99.9%

In fiscal 2010, Tokuyama satisfied its targets for air and water pollutant reductions, energy conservation, recycling and zero emissions.
* Tokuyama has not set an energy conservation target for fiscal 2011. The Company has set the target for fiscal 2012 at “24% lower than the fiscal 1990 level.”

40

08

Economic Benefits

−7%

±0%

Environmental analysis
equipment, etc.

Total

(Coolant water and other types of effluent)Fiscal 2010 Result(Reference Fiscal Year: 2007)

Effective use of resources

Research and Development Costs

25,600−47%

Global Environment
RecyclingConservation

Management Activity Costs

Process effluent
Products

Major Activities

Upstream and Downstream Costs

COD

Phosphorus

PRTR

07

households.
Amount Invested
Costs(¥ million)(¥ million)

Installation of new neutralizPollution Control
ing facilities, replacement ofexisting neutralizing facilities
Costs in the
Installation of new facilities
Business
Global Environmental
for the treatment and stabiliAreas
Conservation
zation of industrial waste
Resource Recycling

10

Fiscal 2010 Results of Environmental Preservation Activities (Tokuyama Factory)

Waste Reduction

Category

Waste (incinerated and landfill)2,020

Atmosphere06

recycling and management activities accounted for 57%, 40%, 0.3% and 1.5%,

Flow of Materials in Business Activities

Category0Category

Material Benefit(1,000 metric tons)

Gains on Reduction in Energy Consumption
Gains on Sale of Valuable Waste
Gains on Reduction in Waste Disposal Costs
through Waste Recycling
Gains on Reduction in Raw Material and FuelCosts through Waste Recycling
Total

Economic Benefits(¥ million)

in fiscal 2011.

177
85

355

200

521

201

363
1,416

41

Promoting Environmental Management

Unit Energy Consumption Index* (Tokuyama Factory)

Contributing to Global Warming Prevention Efforts in

Reduction rate (%)

the Consumer and Transportation Sectors

00Tokuyama has set atarget for fiscal 2012at 24% lower than
the fiscal 1990 level.

-10servation in residential houses—silica for energy-saving tires and other products,-15

focus our efforts on the development of technologies that contribute to the preven-

-18.4

-20

tion of global warming through such initiatives as the development of a new pro-

-22.4

-24.0

-24.6
90

06

07

08

09

(FY)
12
(Target)10* The unit energy consumption index is calculated using a method
recommended by the Japan Chemical Industry Association (JCIA).

3,900

2,800
53,90050,00055,50052,500

12

177

6

24.01

Fiscal 2009

7

141

8

33.35

Fiscal 2010

7

91

30

129.41

Total

26

409

44

186.77

2,130
20
1,930

4,840

2,100

5,000

07

NOx emissions

0

(FY)

Soot emissions

the Group’s intranet site, which has been designed to raise employee awareness of

In fiscal 2010, the Company continued to promote Companywide efforts to reduce

Tokyo head office was able to keep its power consumption below 400,000 kilowatts

global warming through, for example, the introduction of external websites related

the emission of PRTR substances. As a result, our total PRTR substance emissions

per hour in a record-setting heat wave during the four-month period from June toto global warming.

stood at 38 metric tons, a substantial 24% reduction year on year.

400

(FY)

10

Intranet site dedicated for the program

388
358

200
230
1,620

200
240

4,570

336

336

340

328

*1 The pollutant release and transfer register (PRTR) refers to a system of collecting
and publishing data on the sources of hazardous substances, the amounts ofsuch substances emitted into the environment or carried away from businesssites in the form in which they are contained in waste.

PRTR Substance Emissions

300(metric tons)

250

237

200
200
100

150

100

1,420
0

08

10

introduced thorough temperature control of air conditioners. As a consequence, the

100
05

06

07

08

09

10

65

(FY)

70

82

70
50

4,510
50

Global Warming Prevention Support Program

06

09

49,9000

ees to take action aimed at helping prevent global warming, as part of its environ90

08

50,7003,290

쐽 Attributable to fuel
쐽 Attributable to waste

SOx emissions

PRTR*1 Substance Emissions

In April 2008, Tokuyama set up this program to encourage Tokuyama Group employ007

80

to notification under the Pollutant Release and Transfer Register (PRTR) legislation.

210
250

4,730

1,630

Twenty-six substances among those handled by Tokuyama in fiscal 2010 are subject

09

2,000

1,300

160

increased in employee households. The program use status is regularly reported on(1,000 metric tons/year)

280
260

06

90

power generation systems purchased by Group employees expanded roughly four-쐽 Group companies

280
220

1,930

240

fold from fiscal 2009. This indicates that the awareness of renewable energy use has

CO2 Emissions
9,000

1,940

Tokuyama takes part in the Cool Biz campaign that began as a national movement

Power consumption

쐽 Tokuyama Corporation

3,000

employees remained flat year on year. On the other hand, the number of solar(1,000 kWh)

08

1,190

6,000

Efforts at Our Offices

Cool Biz Benefit (Tokyo head office; from June to September)
07

137

148

at our offices, we have encouraged our employees to work in light clothing and10,00006

161

in the summer of 2005. In addition to our conventional energy conservation efforts

37,600

90

223
2,890

8,000

267

275

9,000

0

September 2010.

3,000

Fiscal 2008

320

10,1008,800

electrolyte membranes for fuel cells and so forth.

20,0006,000

Solar Power Generation Systems
Number of Cases(kW)
of Subsidization

11,10010,0002,800

30,000

0

400

2,700

3,800

60,000

Plastic Window Sashes
Number of Cases(Units)of Subsidization

During fiscal 2010, the number of plastic window sashes purchased by Group

Energy Consumption(1,000 GJ/year)

duction method for polycrystalline silicon for solar cells, the development of(metric tons)

12,30012,000and transportation sectors, in which CO2 emissions have significantly increased. We-18.6

40,000(metric tons)

Status of Use of the Global Warming Prevention Support Program

the Tokuyama Group has been helping to reduce CO2 emissions in the consumer-16.4

SOx, NOx and Soot Emissions
15,000Through the provision of Shanon—a plastic window sash that supports energy con-

-5

-25

The table below shows the status of use of the program by Group employees in
the past three years.

09

쐽 Attributable to raw materials
쐽 Attributable to Group companies

10

(FY)

mental, energy-saving and social contribution activities from the standpoint of CSR
promotion. Through the program, the Company covers part of the costs incurred by

29

98

06

쐽 Tokuyama Corporation

07

08

29

09

38 38

10

(FY)

쐽 Group companies

Reduction of Air andWater Pollutants

employees purchasing and installing specific eco-friendly products closely related to
the Group’s business, namely the plastic window sash for residential use and theActively seeking to protect the environment, Tokuyama has a longsolar power generation system. Its objective is to help reduce CO2 emissions in therecord of initiatives to reduce environmental pollutants released into

household sector by raising Group employees’ awareness of global warming andthe atmosphere and into water environments.

encouraging them to save energy.

Air Pollutant Emissions
We have equipped our boilers, cement kilns and other sources of air pollutants withsuch emission control systems as flue gas desulfurizers, denitration equipment, low
NOx burners and high-performance dust collectors in an attempt to reduce sulfur
Presentation on results of unit energy consumption
improvement projects

42oxides (SOx), nitrogen oxides (NOx) and soot emissions.
In fiscal 2010, SOx and soot emissions increased, while NOx emissions declined.

43

Promoting Environmental Management

Industrial Effluent and COD Level

Waste incinerators, waste oil incinerators and part of vinyl chloride monomer manu-

Industrial effluent

22.9

25.6

20.6

100

14.3
10

0.4
(0.1%)

including chloroethylene, among the 12 substances subject to voluntary control inaccordance with the Air Pollution Control Law. In accordance with the plan, the

0

90

08

09

10

(FY)

Total Waste
Generation
313

0

COD level

Nitrogen and Phosphorus Emissions(metric tons)(metric tons)

271(86.6%)
Effective Utilization Rate

Fiscal 2006

Fiscal 2007

Fiscal 2008

Fiscal 2009

Fiscal 2010

103

Nitrogen

110

112

108

140

110

21

Phosphorus

3.9

4.5

2.9

3.6

2.3

40
20
0

(%)

94.3

94.1

94.1

93.5

93.5

76.9

80

30,000

23.0

24.9

22.9

36,260

60

20.6
40

20,00002090쐽 Landfill volume

520

520

480

440

430

06

07

08

09

10

Effective utilization rate

(FY)

0

Zero-emission rate

Management and Treatment of PCB Waste
The Tokuyama Group has 82 transformers and capacitors containing polychlorinated93.5%
Zero-Emission Ratebiphenyl (PCB).*1 The Group has already stopped using them. In compliance with

99.9%

the Special Measures Law for the Proper Treatment of Polychlorinated Biphenyl

80
60

99.9

10,000Internal Recycling(into materials and fuel for reuse)

Hazardous Air Pollutant Emissions

100

07

쐽 Industrial effluent

Company consistently implements measures to reduce the emission of these substances.

120

06

40,000Landfill50

99.9

Effective utilization rate / Zero-emission rate

Tokuyama sets out a voluntary reduction plan for four substances that it produces,

24.9

23.0

20

109

20.0
(6.4%)

21.1(6.7%)

150

99.9

100

82.4

COD level

Hazardous Air Pollutant Emissions

120

128

99.9

50,000Incineration
External Recycling

30

99.9

(metric tons)

200

166

153

Countermeasures against Dioxins. Tokuyama measures dioxin concentrations in flue

Landfill Volume, Zero-Emission Rate and Effective Utilization Rate

(Unit: 1,000 metric tons)(metric tons)

180

40

facturing facilities are subject to regulations under the Special Measures Law forgas and wastewater, and the figures remain far below the control levels.

Breakdown of Industrial Waste by Treatment for Fiscal 2010

(million metric tons)

Landfill volume

Countermeasures against Dioxin

Waste, they are retained and managed in an appropriate manner. Legislation
47

7
28

21
8 1
3
9

95

06

30
13
12

2

3

31
11
12 4 4

22
8
9 32

24
10
10 1 308

09

10

Reducing Waste andPromoting Recycling
As a result of its exhaustive efforts to reduce and recycle waste,

07

(FY)

쐽 Dichloromethane (methylene chloride) 쐽 Chloroform
쐽 1,2-dichloroethane 쐽 Chloroethylene (vinyl chloride)

Effective Utilization Rate (%) =Zero-Emission Rate (%) = 1 —Recycling Volume (internal and external)
Total Waste Generation

×100

plan of the Japanese government, wide-area PCB treatment facilities are being con-Landfill Volume (internal and external)
Total Waste Generation

structed at various locations in Japan, and some of these facilities have started oper×100

December 2005 and commenced the treatment in fiscal 2009. In the future, we will

and the zero-emission rate at 99.9% in fiscal 2010.

Industrial Effluent and Water Pollutant Emissions

properly treat our PCB waste in line with the timetables of the wide-area treatment
project in separate districts.

Waste Generated

313

Waste Management

Incineration (internal)

Tokuyama Factory has set tighter voluntary limits to carry out stringent control

In fiscal 2010, Tokuyama generated 313 thousand metric tons of waste. The

through pollutant monitoring and purification using wastewater treatment equipment.

Company actively recycled them internally and externally, mainly reusing them as

Internal Recycling

The levels of COD,*2 nitrogen and phosphorus are subject to regulation in terms

raw materials and fuel for cement production at the Tokuyama Factory. Packing

271

of total emissions in relation to water quality. To ensure compliance with indicatorsmaterials, pallets and other wood waste were crushed into woodchips so that they

for these three items, Tokuyama is working to reduce the levels of their emissions

could be effectively used as fuel at power plants. As we worked diligently to recycle

through the use of activated sludge treatment facilities and other equipment.

waste into raw materials for cement, we maintained our effective waste utilization

In fiscal 2010, in line with an increase in production facility utilization, the CODlevel slightly rose year on year. In contrast, nitrogen and phosphorus emissions

rate at almost 94%. We stepped up our activities for reusing and reducing waste
and, accordingly, maintained our high landfill zero-emission rate at 99.9%.

ation. Taking advantage of the early registration program, the Tokuyama Groupfinished its registration to Japan Environmental Safety Corporation (JESCO) in

Tokuyama maintained the effective waste utilization rate at 94%
Flow of Industrial Waste Treatment

To meet the statutory limits as well as the limits agreed with local governments, therequires all PCB waste to have been treated by July 2016. In accordance with the

19.0

Landfill (internal)

Inside theCompany

Outside theCompany0*1 PCB is an organic chlorinated compound that emits dioxins when burnt at a
low temperature. Chemically stable and excelling in thermal resistance, chemical resistance, insulation and other electric characteristics, it was formerly usedin many different electric products including transformers and capacitors.
However, it has been banned from production or utilization since 1972
because of its hazardousness to humans. Transformers, capacitors and other
PCB-containing products that have already been distributed have to beretained at business establishments.

Waste Generated

22.5

Incineration (external)

1.0

declined year on year.
*2 Chemical oxygen demand is an indicator used to measure water quality andrefers to the amount of oxygen required to oxidize organic compounds in water.

Landfill (external)

0.4
External Recycling

21.1* Figures are for fiscal 2010 and in the unit of 1,000 metric tons.

44

45

Site Report

Tokuyama Factory

Kashima Factory

Location: 1-1, Mikage-cho, Shunan-shi, Yamaguchi Prefecture, Japan

Location: 26, Sunayama, Kamisu-shi, Ibaraki Prefecture, Japan

Employees: 1,719

Employees: 77

Factory Area: 1,910,000 square meters (total area)

Factory Area: 101,000 square meters

Main Products: Cement, inorganic and organic chemical products, polycrystalline silicon,

Main Products: Tokuyama Corporation’s Kashima Factory

fumed silica, vinyl chloride monomer and others

Tetsushi Yamada
General Manager of theTokuyama Factory

Dental materials (restorative materials, adhesives, denture relining materials,
Fiscal 2006

Fiscal 2007

Fiscal 2008

Fiscal 2009

Fiscal 2010

Metric tons

1,940

1,930

1,190

1,300

1,630

NOx Emissions

Metric tons

12,300

11,10010,100

8,800

8,000

Soot Emissions

Metric tons

267

223

161

137

148

Industrial Water Consumption

Million metric tons

45.8

41.1

40.6

41.8

40.5

Effluent

Million metric tons

22.8

24.8

22.8

20.5

25.5

COD Level

Metric tons

148

161

116

107

124

Total Nitrogen Emissions

Metric tons

110

112

108

140

110

Total Phosphorus Emissions

Metric tons

3.9

4.5

2.9

3.6

2.3

PRTR Substance Emissions

Metric tons

63

67

66

48

37

Thousand metric tons

360

363

344

300

312

Final Waste Disposal Volume

Metric tons

480

480

460

420

417

Energy Consumption*

Thousand GJ

53,90055,40052,40050,60049,800Thousand metric tons

4,840

5,000

4,730

4,570

4,510

3

6

0

1

5

CO2 Emissions (attributable to fossil fuel)*
Complaints

Complaints* The calorific power and other figures have been recalculated retrospectively to 1990, following the amendment of the Act on the Rational Use of Energy.

Emissions and Transfer of PRTR Substances in Fiscal 2010
Substance

Government
Ordinance Number

Unit: metric tons (mg-TEQ for dioxins)
Emissions
To Air

To Water

To Soil

Subtotal

AmountTransferred

1,2-Dichloroethane

157

10.1

0.0

0.0

10.1

0.8

Chloroethylene (vinyl chloride)

94

9.8

0.0

0.0

9.8

0.0

Cresol

86

0.0

5.8

0.0

5.8

0.0

Chloromethane (methyl chloride)

128

3.2

0.0

0.0

3.2

0.0

Toluene

300

2.7

0.0

0.0

2.7

62.9

1

0.0

2.4

0.0

2.4

0.0

Water-soluble zinc compounds

coating solutions); materials for electronic materials and metal washing solutions
Main Products: Tokuyama Dental Corporation’s Kashima Factory

Unit

Waste Generated

drugs); optical materials (plastic lens monomer, light modulating materials, hard

General Manager of theKashima Factory

Performance Data

SOx Emissions

Pharmaceutical bulks (X-ray contrast agents, stomach and duodenal ulcer treatment

Shingo Matsuoka

Dichloromethane (methylene chloride)

186

1.5

0.0

0.0

1.5

0.0

Chloroform

127

0.8

0.0

0.0

0.8

0.0

impression materials and investing materials)

At the Kashima Factory, we have positioned the appropriate management of chemical

On the other hand, our final landfill volume remained almost flat year on year, at 12 metric tons.

substance handling as its most important issue and have simultaneously promoted

Tokuyama Dental Corporation has changed the materials of some products from dichloro-

waste recycling. As a result, we achieved the record-high effective waste utilization

methane to water-based materials, as part of efforts to reduce dichloromethane emissions into

rate of 82% in fiscal 2009. In fiscal 2010, however, the rate dropped to 73%, equiva-

the atmosphere.

lent to that in fiscal 2008. Behind this unfavorable result was the launch of manufac-

The Kashima Factory suffered no damage to its human resources due to the Great East Japanturing operations for new products, which led to changes in the composition of ourEarthquake. However, we were forced to temporarily suspend our plant operations, owing towaste. We will actively seek ways to realize material and thermal recycling for new

damage to some of our facilities and the disruption in the supply of utilities. Through factory-wide

categories of waste with the aim of improving our effective utilization rate again forrecovery efforts, we resumed the operation of all of our facilities by May 2, 2011.

all the waste we generate.

Performance Data
Unit

Fiscal 2006

Fiscal 2007

Industrial Water Consumption

Thousand metric tons

110

107

Fiscal 2008

78

Fiscal 200944

Fiscal 201077

Effluent

Thousand metric tons

125

129

95

58

93

COD Level

Metric tons

5

5

4

2

4

PRTR Substance Emissions

Metric tons

3

4

5

4

2
857

Waste Generated

Metric tons

779

965

770

560

Final Waste Disposal Volume

Metric tons

34

32

27

11

12

Energy Consumption

Thousand GJ

53

58

55

53

60

CO2 Emissions (attributable to fossil fuel)Metric tons

2,170

2,320

2,230

2,110

2,340

Complaints

Complaints

0

0

0

0

0

Emissions and Transfer of PRTR Substances in Fiscal 2010
Substance

Unit: metric tons
Emissions

Government
Ordinance Number

To Air

To Water

To Soil

Subtotal

AmountTransferred

1,2-Epoxypropane (propylene oxide)

68

0.4

0.0

0.0

0.4

2.1

Dichloromethane (methylene chloride)

186

1.3

0.0

0.0

1.3

3.9

1,2-Dichloropropane

178

0.4

0.0

0.0

0.4

171.2

Toluene

300

0.5

0.0

0.0

0.5

75.2

2,2’-Azobisisobutyronitrile

16

0.0

0.0

0.0

0.0

0.0

Chloroform

127

0.4

0.0

0.0

0.4

6.9
1.4

Carbon tetrachloride

149

0.0

0.0

0.0

0.0

0.0

Acetonitrile

13

0.0

0.0

0.0

0.0

Hydroterphenyl

238

0.0

0.0

0.0

0.0

1.1

1,4-Dioxane

150

0.0

0.0

0.0

0.0

0.0

Water-soluble copper salt

272

0.0

0.0

0.0

0.0

0.4

N,N-Dimethylformamide

232

0.0

0.0

0.0

0.0

17.8

Hydrazine

333

0.0

0.0

0.0

0.0

0.0

Triethylamine

277

0.0

0.0

0.0

0.0

2.7

Hydrogen fluoride and its water-soluble salt

374

0.0

0.0

0.0

0.0

0.0

2-Vinylpyridine

338

0.0

0.0

0.0

0.0

0.2

Benzene

400

0.0

0.0

0.0

0.0

0.0

2,3-Epoxypropyl Methacrylate

417

0.0

0.0

0.0

0.0

0.0

Boron compounds

405

0.0

0.0

0.0

0.0

0.0

Methyl Methacrylate

420

0.0

0.0

0.0

0.0

0.0

(Dioxins)

243

11.7

0.3

0.0

12.0

0.0

Alpha-Methylstylene

436

0.0

0.0

0.0

0.0

0.0

28.8

8.2

0.0

37.0

238.5

2.2

0.0

0.0

2.2

108.1

Total (excluding dioxins)

Substances are listed in descending order of emissions and, for substances with no emissions, in order of government ordinance number., Emissions to water indicate therelease into public waters., Amount transferred indicates the sum of the quantity transferred to sewerage and the quantity subject to intermediate treatment., Total figures
are rounded to the first decimal place.

46

Total

Substances are listed in descending order of emissions and, for substances with no emissions, in order of government ordinance number., Emissions to water indicate therelease into public waters., Amount transferred indicates the sum of the quantity transferred to sewerage and the quantity subject to intermediate treatment., Total figures
are rounded to the first decimal place.

47

Site Report
Activities of Group Companies

Status of ISO 9001 and ISO 14001 Certification
ISO 9001

ISO 14001

Sun •Tox Co., Ltd.

Group Company

쏹쏹

Tokuyama understands that RC activities should be conducted on a Groupwide basis. To

Excel Shanon Corporation쏹—

support their activities, the Company has signed RC management agreements with

Tohoku Shanon Co., Ltd.

쏹쏹

Tokuyama Group companies, both inside and outside Japan, that are engaging in produc-

A&T Corporation

쏹쏹tion activities.

Figaro Engineering Inc.

쏹쏹

Tokuyama Dental Corporation—*

Tokuyama Siltech Co., Ltd.

쏹

We collect data on the environmental impact of Group companies and their safety
management indicators and conduct safety, environmental and quality audits at the rate ofseveral Group companies per year. By means of these actions, we monitor and enforce RC
activities conducted at individual Group companies. Also, changes and other movements instatutory regulations and other information are shared with our Group companies.
In addition, we provide Group companies with assistance in acquiring ISO 14001 andISO 9001 certification.

Sun Arrow Chemical Co., Ltd.

Tokuyama Polypropylene Co., Ltd.

쏹

Established: February 1, 1999

Established: April 2, 2001

쏹Ownership: Tokuyama Corporation (100%)

Ownership: Tokuyama Corporation (50%) and Prime Polymer Co., Ltd. (50%)

Sun Arrow Chemical Co., Ltd.

—쏹Head Office: Kitahama Chuo Bldg., 2-2-22, Kitahama, Chuo-ku, Osaka, Japan

Head Office: 1-1, Harumi-cho, Shunan-shi, Yamaguchi Prefecture, JapanASTOM Corporation

쏹쏹

Business: Manufacture and sale of polyvinyl chloride compounds

Business: Manufacture and sale of polypropylene resin and polypropylene compound resin

Shin Dai-ichi Vinyl Corporation—쏹Tokuyama Polypropylene Co., Ltd.

쏹쏹

쏹 =Certified

Tokuyama Plant

쏹 =Included in certified sites*Certified under ISO 13485

Tokuyama Plant

Location: 1-2, Harumi-cho, Shunan-shi, Yamaguchi Prefecture, Japan

Location: 1-1, Harumi-cho, Shunan-shi, Yamaguchi Prefecture, Japan

Employees: 24

Employees: 63

Site Area: 3,280 square meters

Site Area: 70,997 square meters

Sun•Tox Co., Ltd.
Established: February 14, 1992
Ownership: Tokuyama Corporation (100%)
Head Office: Tokuyama Bldg., 1-4-5, Nishi Shimbashi, Minato-ku, Tokyo, Japan
Business: Manufacture and sale of biaxial-oriented polypropylene films and cast polypropylene films

Kanto Plant

Koshi Mayama

Plant Manager

Plant Manager

Tokuyama Plant

Location: 3075-18, Shimasu, Itako-shi, Ibaraki Prefecture, Japan

Location: 7-7, Harumi-cho, Shunan-shi, Yamaguchi Prefecture, Japan

Employees: 191

Employees: 148

Site Area: 55,800 square meters

Site Area: 24,100 square meters

Our Tokuyama Plant is located on the premises of the Higashi Plant, which constitutes

Factory, our Tokuyama Plant manufactures polyvinyl chloride compounds for plastic win-part of the Tokuyama Factory of Tokuyama Corporation. The plant manufactures and sells

dow sashes, which, after the governmental housing eco-point program, are increasingly

200,000 metric tons of polypropylene resins and 7,000 metric tons of soft polyolefin res-recognized as having energy conservation effects. While it is common practice to add

ins each year. This plant runs three systems for safety management, environmental man-lead-based stabilizer to polyvinyl chloride compounds, we continued our efforts to devel-

agement, and quality management and undertakes RC activities in tandem with the

op a lead-free formula in fiscal 2010, as we did in fiscal 2009, in response to the requests

Tokuyama Factory. With respect to safety management, we perform risk assessments ofof users.

processes, facilities, and work. We are also promoting Companywide accident prevention
and hazard identification activities to eradicate accidents, disasters and risks. As a result

waste in accordance with Tokuyama Corporation’s Tokuyama Factory Environmentof these efforts, we succeeded in maintaining the zero-accident and zero-disaster status

Management Program. As a result of our efforts, we have established a method to recyclethat we have enjoyed for 36 years, since the days when we operated as Tokuyama

Toshiyuki Yamaoka

the waste into fuel for cement production. With respect to safety, health, security andCorporation’s Polypropylene Manufacturing Department.

Plant Manager

disaster prevention, we carried out full-participation Five-S activities, accident prevention

We renewed our five-year accreditation obtained in 2005 for the safety inspection

activities, hazard prediction training and activities to maintain a trouble-free status. As adefined under the High Pressure Gas Safety Act in fiscal 2010. In addition, we acquired aresult of these activities, we have successfully maintained our zero-accident and zero-

two-year renewal accreditation and a four-year new accreditation for open boiler inspec-

disaster record since the company’s establishment. As a member of the Tokuyama Group,

tions defined under the Industrial Safety and Health Act. Building on these accreditations,

we will continue to operate the plant with a commitment to environmental conservation,

we are further promoting voluntary safety initiatives.

Plant Manager

Located in the Itako Industrial Park in Ibaraki Prefecture, the Kanto Plant produces 25,000

Located on the premises of the Higashi Plant in Tokuyama Corporation’s Tokuyama

metric tons of biaxial-oriented and cast polypropylene films per year. As a Type I Energy

Factory, the Tokuyama Plant produces 21,000 metric tons of biaxial-oriented polypropyl-

Management Designated Facility, it has been taking steps to ensure effective energy utili-

ene films, which are mainly used for food wrapping, per year. In environmental aspects,

zation by introducing in-house power generation facilities and energy-efficient facilities,

we work together with Tokuyama Corporation’s Tokuyama Factory to address environ-among other initiatives.

mental conservation and to carry out ISO 14001 activities. The Tokuyama Plant is continu-

At the same time, we are capitalizing on our three management systems for occupa-

ing with its positive efforts to slash manufacturing losses, and through such efforts wetional safety and health (OSHMS), for the environment (ISO 14001) and for quality (ISOhave more than halved our waste generation. Also, we are promoting activities to recycle9001), to make steady improvements throughout the plant.

all waste materials attributable to manufacturing losses.

The Kanto Plant was affected by the Great East Japan Earthquake on March 11,

It obtained certification for the Occupational Safety and Health Management System

2011. Fortunately, none of our staff were injured. However, we had to temporarily stop

(OSHMS) in February 2008. In fiscal 2009 and 2010, no disasters occurred at our plant.

our plant operations due to damage to some facilities. We worked to recover our facilities

Going forward, we will continue to promote safety and health activities centered on risk

quickly and asked the Tokuyama Plant to perform alternative production as much as pos-assessment, and develop them into a management system through a PDCA cycle. Under

sible. Still, we regrettably caused a lot of trouble for some of our customers, as we could

the slogan of “Take pleasure in production, be stringent with quality and adhere to safe-

not meet all their demand. Based on the lessons we learnt through this experience, wety,” the Tokuyama Plant aims to implement plant management in a manner that earns it

aim to enhance our business continuity plan.

the trust of society, the customers and employees.

Performance Data

Performance Data
Unit

Located on the premises of the Higashi Plant in Tokuyama Corporation’s Tokuyama

To protect the environment, we closely studied making effective use of combustible

Koji Tanaka

Fiscal 2006 Fiscal 2007 Fiscal 2008 Fiscal 2009 Fiscal 2010

Unit

Fiscal 2006 Fiscal 2007 Fiscal 2008 Fiscal 2009 Fiscal 2010

Waste Generated

Metric tons

52

60

34

43

56

Waste Generated

Metric tons

180

200

120

90

80

Final Waste Disposal Volume

Metric tons

9

29

5

16

38

Final Waste Disposal Volume

Metric tons

1

11

20

6

9

Energy Consumption

Thousand GJ

313

310

327

334

344

Energy Consumption

Thousand GJ

456

463

413

414

434

CO2 Emissions

Thousand metric tons

18

17

18

18

19

CO2 Emissions

Thousand metric tons

27

27

24

25

26

SOx Emissions

Metric tons

0.6

0.4

0.4

0.3

0.3

PRTR Substance Emissions

Metric tons

—

—

—

0.1

0.1

NOx Emissions

Metric tons

0.5

0.7

0.7

0.5

0.6

Complaints

Complaints

0

0

0

0

0

Soot Emissions

Metric tons

0.03

0.04

0.08

0.05

0.04

48

Yasuto Yasuzawa

safety and security.

In fiscal 2011, we will step up RC activities in a bid to maintain our zero-accident andzero-disaster record, to reduce our environmental footprint, and to eliminate all customer
quality complaints.

Performance Data

Performance Data
Unit

Fiscal 2006 Fiscal 2007 Fiscal 2008 Fiscal 2009 Fiscal 2010

Power Consumption

Thousand kWh

3,540

3,470

2,810

2,662

2,735

Waste Plastics Generated
Waste Plastics Effectively
Used
Final Waste Disposal
Volume (external)

Metric tons

186

158

157

119

124

Steam Consumption
Industrial Water
Consumption

Metric tons

186

158

157

119

124

Metric tons

0

0

0.6

3.8

12.5

Metric tons
Thousandmetric tons

240

240

240

240

240

65

65

65

65

65

Unit

Fiscal 2006 Fiscal 2007 Fiscal 2008 Fiscal 2009 Fiscal 2010

Industrial Water
Consumption

Thousandmetric tons

387

417

322

354

329

Waste Generated
Final Waste Disposal
VolumeUnit Energy Consumption
Index (Fiscal 2002 = 100)

Metric tons

161

141

158

134

180

Metric tons

25*

4

16*

6.5

3.8*

%

79

85

98

97

86

* Year with periodic maintenance49Third-Party Comments

A Review of Tokuyama’s CSR Report 2011
Eriko Nashioka
Certified Public Accountant, Certified Tax Accountant and Director of the Institute for Environmental Management Accounting

A part-time lecturer in environmental accounting and environmental auditing for the Faculty of Commerce of Doshisha University. In 1991, she joined
the Environmental Auditing Section, the Third Department at the Osaka Office of Ota Showa & Co., currently Ernst & Young ShinNihon LLC, where she
worked as a consultant concerning accounting audits (the Commercial Code, the Securities Exchange Law and the Small and Medium-sized Enterprise Investment BusinessCorporation Act), environmental accounting and environmental reports. She completed her studies in environmental management at the Doshisha University Graduate School of
Policy and Management in 1997. From April 2001 to March 2004, she was chief researcher in the Enterprises and the Environment project run by the Kansai Research Center of
the Institute for Global Environmental Strategies. In April 2004, she joined the management of the Institute for Environmental Management Accounting. She was involved in a
number of committees, including the technical subcommittee on sustainability information disclosure in the Management Research Committee of the Japanese Institute ofCertified Public Accountants and other committees under the Ministry of the Environment and the Ministry of Economy, Trade and Industry. She is a member of the primary
screening committee for the Environmental Report Award co-organized by Toyo Keizai Inc.

Tokuyama Taking Firm Steps toward Achieving its Centennial Vision

Sincere Responses Earning the Group Renewed Trust

Tokuyama announced its Centennial Vision in 2008, envisioning the direction and future ofThis report provides thorough explanations for the ongoing situation of the mislabelingthe Tokuyama Group toward 2018, the year that will mark the centennial anniversary of its

problem that the Company announced in 2009. This is very assuring. Sincerity matters.

founding. This report clearly communicates that Tokuyama has taken specific steps toward

I hope that Tokuyama maintains its open disclosure approach through to the end. In thisachieving this long-term vision in the past three years. The three basic strategies under theway, I believe the Company will be able to regain the trust of stakeholders, instilling confi-

Centennial Vision are defined as: (1) “Growing,” involving the overseas expansion of busi-

dence that such problems will never occur in the Tokuyama Group.

nesses integral to society; (2) “Creating,” embodying the development of new businesses
into a new era; and (3) “Integrating,” encompassing the strengthening of international

Effectively Using This Communication Tool

competitiveness and communication capabilities. By clarifying central strategies, it is now

This report focuses more on people than previous reports. The people appearing in theeasier to see how the Group is moving forward to achieve the Centennial Vision.

report add reality to individual articles. I strongly recommend that Tokuyama use thisA night view of the Tokuyama Factory

report to present the Group to increasing worldwide stakeholders, while remaining a com-

Reconfirming Tokuyama’s Societal Rolepany “in harmony with people, society and the environment,” as stated on the cover of

The establishment of a new Malaysian production base must have been an important

this report.

decision. I understand that Tokuyama is diversifying and globalizing its flagship production bases from the standpoint of accurately fulfilling its supplier responsibilities and facilitating effective risk management. This Malaysia project tells us that Tokuyama’s strategies
have been launched for full-fledged implementation. Also, Tokuyama is accelerating new
businesses—such as those expected to be essential components of tomorrow’s society—by providing materials and components for solar power generation and LEDs. As such,
Tokuyama has positioned contributing to advances of today’s and tomorrow’s society as
its societal role and incorporated this stance into its strategies. This is very encouraging,boosting our expectations for the future development of the Tokuyama Group.

In Response to Third-Party Comments

Editor’s Notes

Based on the feedback on our CSR Report 2010 provided by Ms. Nashioka lastThis edition of our CSR report has been prepared with anyear, we worked to make this report as easy as possible for people to understandthe direction in which the Tokuyama Group is advancing by centering articles on

emphasis placed on giving stakeholders a clear insightthe Centennial Vision. We are very pleased that she evaluated our efforts highly ininto Tokuyama’s CSR activities.

this regard.

In this edition, we focused on introducing our threeMoreover, we are grateful that she provided invaluable, thought-provoking

major strategies—namely, “Growing,” “Creating” andcomments regarding the promotion of a global approach in our CSR activities. By“Integrating”—designed to propel the entire Groupgiving due consideration to her comments, we will tackle the important issues ofTime is Ripe for Tokuyama to Introduce Global Approach in CSR
Regarding the Tokuyama Group Code of Business Activities, which serves as guidelines forGroup members to refer to on various occasions, I believe that it must be a set of principles that are easy to understand, disseminate and instill worldwide. The code may havesome points that can be improved in order to make it function better as a common foundation for all Group members, with many different cultural backgrounds, and to further

strengthening our global CSR approach and achieving transparency in our initiatives aimed at enhancing our CSR activities.
Looking ahead, we will continue to improve our CSR reports—one of ourmost significant tools in corporate communication—thereby making these reports“visualize” the entire Tokuyama Group.

Masao Fukuoka
General Manager of the Corporate Social Responsibility Div.

In line with the restructuring of its CSR promotion structure implemented in

toward achieving its Centennial Vision in 2018. Focusing

April 2011, Tokuyama has created the above symbol for CSR promotion.

articles on these strategies, we worked to make readers

Depicting a sunflower, the symbol is intended to convey the Company’s active,

understand our Group more clearly.

healthy and honest stance toward CSR. Under this symbol, the TokuyamaGroup will not only promote compliance and efficiency in its business operations, but will also work to develop into a vibrant, sound corporate entity thatprovides societal and environmental benefits and is trusted by all stakeholders.

clarify what CSR means to the Tokuyama Group. Also, I think that CSR-related matters

We would be delighted to receive your candid feedback and comments so that we can continue to improve
our CSR reports as a tool for communicating with you.

should be quantified as much as possible to present them as CSR indicators. I am confident that the management of such indicators will make Groupwide communication even

For inquiries, please contact:smoother, while making it even easier for all Group members to share the direction inwhich Tokuyama is advancing. So, I am looking forward to seeing Tokuyama move up to

Corporate Social Responsibility Division

the next level, establishing such indicators, which will allow both Group members andTokuyama Corporation

other stakeholders to understand the Tokuyama Group more accurately.

Kasumigaseki Common Gate West Tower, 2-1, Kasumigaseki 3-chome, Chiyoda-ku, Tokyo 100-8983, Japan
Ms. Nashioka interviewing
members of the Corporate
Social Responsibility Division
for the preparation of her
third-party comments

50

Phone: +81-3-6205-4835
Fax:+81-3-6205-4882*To ensure accessibility to as many readers as possible, our CSR reports are also available via Tokuyama’s website.

www.tokuyama.co.jp/eng/enviro/

51