Furukawa Electric Group

CSR
Report2007

Contents
Editorial Policy

2

Message

3

Management
The Furukawa Electric Group Basic CSR Policy

5

Corporate Governance

6

CSR Management

7

Compliance8

Furukawa Electric’s Business Activities
Furukawa Electric Group Overview and Financial Report

9

Environmental Performance
Furukawa Electric Basic Environmental Policy

11

Environmental Management Targets and Performance

12

Environmental Management System

13

Environmental Risk Management

14

Business Activities and their Environmental Impact

16

Environmental Accounting

17

Producing Environmentally Friendly Products

18

Zero Emission Activities

23

Efforts to Prevent Global Warming

24

Chemical Substance Management

25

Environmental Preservation Data

26

Social Performance
Relationship with our Customers

27

Relations with our Shareholders and Investors

29

Relations with our Suppliers

30

Relations with our Employees

31

Involvement with Local Communities

35

Social Contribution Activities at Individual Works

37

Initiatives at Affiliated Companies

39

History of Furukawa Electric’s CSR Activities

42

Information available via our website

Editorial Policy
Scope of this Report

Period Covered

Organizations Covered
This Report covers The Furukawa Electric Co., Ltd. and all
members of the Furukawa Electric Group, including affiliatedcompanies.

From April 1, 2006 to March 31, 2007
Includes selected information on past initiatives and activities
during fiscal 2007.

Scope of Themes Covered

Editorial Policy

1) The economy
Furukawa Electric and its consolidated subsidiaries(108 companies)
2) The environment and society
Furukawa Electric and all companies participating in
the Liaison Meeting for Consolidated Environmental Management** Refer to the List of Companies Participating in the Liaison Meetingfor Consolidated Environmental Management.

Furukawa Electric first started to issue Environmental Reports in fiscal 2000. Reflecting the growing need to also disclose
information relating to social matters in recent years however,
we decided to change the name of our fiscal 2006 publication to
the Environmental and Social Report. Following organizational
reforms in February 2007, we established a CSR Division andhave since stepped up our CSR management activities. We haveconsequently renamed this year’s publication the “CSR Report,”and have included information covering a broader range of areas, including both social and financial matters.
This Report has been compiled with reference to the Environmental Reporting Guidelines (Fiscal 2003 version) published by
the Ministry of the Environment.

List of Companies Participating in the Liaison Meeting for Consolidated Environmental Management
Company Name

Environmental
Accounting

Company Name

Environmental
Accounting

Access Cable Company○

FITEC Corporation

Asahi Electric Works Co., Ltd.

○

Furukawa Automotive Parts Inc.

○

Inoue Manufacturing Co., Ltd.

○

Furukawa Circuit Foil Co., Ltd.

○NTEC Ltd.

○

Furukawa Sangyo Kaisha Ltd.

○

F-CO Co., Ltd.

○

Furukawa Industrial Plastics Co., Ltd.

○

Furukawa-Sky Aluminum Corporation○

FCM Co., Ltd.
Okano Electric Wire Co., Ltd.

○

Furukawa Precision Engineering Co., Ltd.

Okumura Metals Co., Ltd.

○

Furukawa Engineering & Construction Inc.

○

Kyowa Electric Wire Co., Ltd.

Furukawa Techno Material Co., Ltd.

○The Zaikoo Co., Ltd.

The Furukawa Electric Engineering Service Co., Ltd.

○

Sunsunny Industry Co., Ltd.

Furukawa Electric Industrial Cable Co., Ltd.

○The Furukawa Battery Co. Ltd.

○

Shodensha Co., Ltd.

○

Furukawa Logistics Corporation

Seiwa Giken Inc.
Totoku Electric Co., Ltd.

○

Nikkei Kakoh. Co., Ltd.
Nippon Foil Mfg. Co., Ltd.
Furukawa Infonet Products Co., Ltd.

Furukawa Life Service Inc.
Broad Wireless Corporation

T.H. Furukawa Electric Co., Ltd.
○

Miharu Communications Inc.

○

Riken Electric Wire Co., Ltd.

○

Companies marked with a “○” in the Environmental Accounting column implement
environmental accounting

Inquiries
Safety and Environment Promotion Department
CSR Division
The Furukawa Electric Co., Ltd.
Tel: +81-45-311-1334 Fax: +81-45-311-1931

Message

Toward a more profitable, innovative,and dynamic global presence

Hiroshi Ishihara
President, Chief Executive Officer & Chief Operating Officer

This year marks the 123rd year since Furukawa Electric
was first established. Through the years, we have consistently provided products and services essential to economic andindustrial development, operating in line with our corporate
philosophy of helping to create a peaceful, enjoyable, affluent
society (the 1974 management philosophy). Looking backover the road that the Company has taken to date and thinking about the direction the Company should choose in the future, I am reminded that developing a precise understandingof society’s needs and expectations by communicating withall of our stakeholders, from our customers and shareholders to our employees, and responding accordingly throughour business and other activities to establish trust from society is crucial if we are to continue to grow and develop as acompany. I also believe that, by operating in this way, we cancontribute to the sustainable development of society.
Whilst continuing to adhere to our existing philosophy,
we have also adopted a new Furukawa Electric Group Philosophy to promote Group-wide efforts to create an affluent,genuinely sustainable society through technical innovation.
To establish a universal awareness of this as the basis for allof our activities, we have adopted a Furukawa Electric Group
Basic CSR Policy as well.
In line with this basic policy, we have stepped up activities
in areas such as legal compliance, safety, environmental conservation and risk management. We have also establisheda new CSR Division, through which we intend to promote
initiatives on an integrated groupwide basis to further oursocial activities and fulfill our responsibilities to society.
As specific initiatives during fiscal 2006, in addition to
boosting business and operational efficiency within theGroup, promoting strategic alliances and reviewing and expanding our overseas operations, we have also tightened ourcompliance activities and improved our risk management
and internal control capabilities. We intend to continue topush ahead with these activities in the future.

3

As part of our new Innovations 09 initiative, which waslaunched in fiscal 2006, we are aiming to focus on technicalinnovation and become a creative, highly profitable company with a global presence. Working towards a consolidated
sales target of 1 trillion yen and an operating margin of 7%
by fiscal 2009, we have pursued initiatives geared towards
strategic investment in priority areas and generating capital,by reviewing and reducing inventory assets, to fund creative
activities such as research and development. Despite negative factors such as the impact of rising copper prices during fiscal 2006, we nonetheless recorded 1.1 trillion yen inconsolidated sales and managed to achieve operating profit
totaling 53.6 billion yen, the second highest in our history.
We will continue to push ahead with operations in fiscal 2007
in an effort to achieve all of the targets under Innovations
09, based around CSR activities as the cornerstone of ourbusiness.
We are planning to hold a comprehensive Furukawa Electric Group technology exhibition, FURUKAWA INNOVATION EXPO ’07, in October 2007. In addition to showcasing
the Group’s overall technical capabilities and our ability tooffer our customers optimum solutions, we intend to show
the market and society as a whole the role that Furukawa
Electric is capable of playing in terms of resolving social, environmental and other issues through measures such as theprovision of products and services designed to provide wide
ranging support for social infrastructure.
We have published this CSR Report, in place of our previous Environmental and Social Report, to report back on thedetails of activities such as these. I hope you can all appreciate our reasons for doing so.
We look forward to hearing your frank opinions regarding our initiatives, both now and in the future.

Furukawa Electric Group Philosophy
CORPORATE PHILOSOPHY
Drawing on more than a century of expertise in the development and fabrication of advanced materials, wewill contribute to the realization of a sustainable society through continuous technological innovation.
MANAGEMENT PHILOSOPHY
With an eye to the future, the Furukawa Electric Group management team pledges to:• Live up to the expectations and trust invested in us by society, with fairness and integrity.
• Apply the sum total of our expertise to satisfy our customers and grow with them.
• Continuously strive to achieve world-class technological innovation, and transform ourselves in every
area of endeavor.
• Nurture human resources at every level, so that we can become a more diverse and creative organization.

Stepping up CSR activities based on a three-way
balance between profitability, environmental protection
and social contribution

Tetsuya Sato
Director, Member of the Board
Corporate Vice President
Chief Social Responsibility Officer, CSR Division
With issues ranging from compliance and product safety toenvironmental protection, companies are finding themselves facing stricter requirements to fulfill their social responsibilities thanever before. All corporate activities undertaken by Furukawa Electric is based on compliance with the rules of society and corporate
ethics, consideration for the environment and safety, in terms ofour products, employees and local communities. We also consider
it our duty as a company to provide products and services thatare capable of contributing to the development of society and improving people’s everyday lives. To fulfill our social responsibility
as a company to the fullest possible extent, we have set out the
Furukawa Electric Group Basic CSR Policy and established thenecessary structure to oversee its implementation in the form of
our new CSR Division and the position of Chief Social Responsibility Officer (CSRO). We have also started to monitor corporate
activity in general from the standpoint of CSR and are promoting a
range of other CSR-related activities on a standardized basis.
The CSR Division incorporates an Auditing Department, theExport Security Administration Department and features a newly established Administration Department. The Headquarters
is responsible for carrying out CSR activities in areas ranging
from compliance and risk management to safety, environmental
protection and social contribution. At a higher level, we haveestablished a new CSR and Risk Management Committee under
the supervision of the Board of Directors. Consisting of members of the Management Committee and chaired by the Chief
Social Responsibility Officer (CSRO), the CSR and Risk Management Committee is based on special committees in the formof the Central Committee for Environmental Management, theCentral Safety and Health Committee, the Central Compliance
Committee and the Central Quality Control Committee. Its role
is to make any necessary adjustments to new measures and ar-

eas in need of improvement proposed by the individual special
committees, from the standpoint of CSR or in the interests ofcompanywide standardization, and then implement them accordingly. Now that we have reinforced our CSR framework inthis way, we will be able to take any necessary action to deal
with issues that conflict with CSR or that are at risk of doing so,
including investigating allegations and the causes of problems,
implementing emergency or preventive measures and releasingstatements, more precisely and quicker than ever before.
The principle CSR activities that we are undertaking atpresent include organizing training in areas such as legislation and corporate ethics, undertaking initiatives designed tobolster safety education and improve safety levels throughout
the Group, expanding the range of eco-products on a Groupbasis, promoting green supplier schemes, cutting transportrelated energy consumption, achieving further reductions in
waste products, implementing soil pollution measures (at Group
companies also), practicing risk management for issues suchas earthquakes and other major disasters, addressing quality
issues and information security and stepping up social contribution activities. We intend to improve communication with allof our stakeholders, who represent the cornerstone of our CSR
activities, to further develop the Furukawa Electric Group’s CSR
activities and take them to an even higher level in the future.
Through efforts such as these, we hope to strike a three-way
balance within our activities themselves between profitability,
environmental protection and social contribution. We regard
initiatives such as this CSR Report and FURUKAWA INNOVATION EXPO ’07 as forms of communication and seek to takeevery possible opportunity to broaden communication with allof our stakeholders as we move into the future. We look forward
to hearing your honest opinions.

Management

The Furukawa Electric Group
Basic CSR Policy

Each of the companies that make up the Furukawa Electric Group undertakes CSR activities in accordance withthe following basic Group policy.

We fully recognize the responsibilities of the Furukawa Electric Groupto society and will strive to maintain and improve on solid, friendly
Basic Policy

relationships with all of our stakeholders and contribute to thesustainable development of society through corporate, environmental
and social activities.

As a basic philosophy underpinning our CSR activities, we have also prepared a set of Furukawa Electric Group
Action Guidelines.
The officials and employees of the Furukawa Electric Group will perform their duties inaccordance with the following action guidelines.
We, the Company officials and employees of the Furukawa Electric Group, will:(1) Fully recognize the responsibilities of the Furukawa Group to society and strive to maintainand improve on solid, friendly relationships with all of our stakeholders and contributeto the sustainable development of society through corporate, environmental and social
activities.

Furukawa
Electric
Group Action
Guidelines(2) Aim to create a company that is useful to society by developing products designed to aid
the development of society and by providing reliable products and services.
(3) Comply with domestic and international laws and regulations and act in accordance withinternal regulations and other rules such as social norms and ethics.
(4) Properly display and adequately disclose financial statements and other corporate
information.
(5) Deal with antisocial groups in a resolute manner.
(6) Strive to act with consideration for the protection of the global environment.
(7) Respect human rights, cultures and traditions as a member of the international community.
(8) Create a company whose employees feel motivated, comfortable and fulfilled.

Corporate Governance

Board of Directors and Board of Corporate Auditors
As a rule, the Board of Directors holds
two regular board meetings each monthand extraordinary board meetings as andwhen necessary to speed up decision
making. There is also a support structure
in place enabling outside directors andauditors to attend meetings provided thatthey have a sufficiently in-depth understanding of the issues being discussed,with the opinions of outside officials respected as part of the decision making
process. It is through measures such asthese that we ensure that the Board of

Directors is able to sufficiently function
in an operational monitoring and supervisory capacity as the core of our corporate
governance operations. We have also set
up a CSR and Risk Management Committee under the supervision of the Board of
Directors, with members consisting of the
President, Chief Officers and Company
Presidents. This acts as a framework forthe promotion of CSR and risk management activities from an overall groupwide
perspective.
We place great importance on thefunction performed by our Corporate Auditors and Board of Corporate Auditors,
which are independent of the Board of Directors and have incorporated the establishment of a Board of Auditors into theinstitutional design of the Company itself.
Based on close collaboration between our
Corporate Auditors, Accounting Auditors
and the CSR Division, which acts as our
Auditing Department, including sharing
information and exchanging opinions, we
continue to make every effort to strengthen our auditing capabilities.

ational performance, operations are runby the Company Presidents and operations relating to matters such as groupwide strategies, resource allocation andadministration handled by the relevant
Chief Officer. Details of such operations
are then reported back to the Board of
Directors on a quarterly basis.

Operational Performance
Our operational structure is based on
a company system and a chief officer system. Under the supervision of the President, who is responsible for overall oper-

Corporate Governance Organization Chart
Shareholders’ Meeting
Appoints

Monitoring and Supervision

Appoints

Board of Directors

Audits accounts

11 Directors(two outside directors)

Accounting
Auditors

Board of

Submits proposals and reports

Submits reports, Corporate Auditors Submit reports
attends meetings Four Corporate Auditors
and audits(two outside auditors)

CSR and Risk Management Committee
President, Chief Officers, Company Presidents
Special Committees

s Examines status of operations and assets

Central Committee for Environmental Management
Central Compliance Committee
etc.

Collaboration
between auditss Decision of critical matter relating tobusiness operations Supervises business operation

Monitors

Business Operation

Appointss Screen reports relating
to accountings Examine status ofoperations and assets

Appoints

President, CEO & COO
Advises

Submit reports

Chief Officers

Direction

Management Committee
President, Chief Officers, Company Presidents

Internal Audits(CSR Division)

CSO (Chief Strategy Officer)
CFO (Chief Financial Officer)
CMO (Chief Marketing Officer)

CPO (Chief Production Officer)
CSRO (Chief Social Responsibility Officer)
CTO (Chief Technology Officer)

Provide support and guidanceBusiness
operations

Company Presidents

Furukawa-Sky Aluminum Corporation

Telecommunications Company, Energy and Industrial Products Company, Metals Company, Electronics and Automotive Systems Company

Light Metals Company

Affiliate Companies

Other Affiliate companies

Management

CSR Management

CSR Promotion Framework
To further enhance and reinforce our
CSR activities, on February 16, 2007,
the Furukawa Electric Group appointed
a Chief Social Responsibility Officer(CSRO) to spearhead our new CSR Division. The CSR Division consists of an Auditing Department, the Export Security
Administration Department and the Safety and Environment Promotion Depart-

ment and features a newly established
Administration Department. In addition
to stepping up all-round monitoring ofcorporate activities from the standpointof CSR, covering areas from complianceand risk management to safety, environmental protection and social contribution, and promoting CSR activities ona standardized basis, we now have theframework in place to be able to take anynecessary action should problems arise,
including investigating allegations andthe causes of problems, implementing
remedial or preventive measures and releasing statements, to deal with all eventualities quickly and appropriately.

CSR Promotion Framework

Board of Directors

President

CSR and Risk Management Committee

CSRO

CSR Division

Basic CSR Policy

In-housecompanies

In addition to our CSR activities, theFurukawa Electric Group has also set up
a Quality Promotion Department under
the supervision of our Chief Production
Officer (CPO). We are undertaking quality control activities for all of our products, which represent the foundations ofCompliance Committee
Central Committee for Environmental Management
Central Safety and Health Committee
Central Quality Control Committee

Domestic affiliatecompanies

International affiliatecompanies

our social responsibilities as a manufacturer. Elsewhere, we are putting in place
the necessary framework in response to
the so-called Japanese SOX Act, revolving primarily around a newly establishedproject team, and are making every effort
to enhance our corporate value throughthe establishment of a comprehensive
internal control system, including steps
such as striving to maintain and improve
the reliability of financial reporting on agroupwide basis.

Compliance

Compliance
The Furukawa Electric Group definescompliance as “going beyond simply
abiding by laws and regulations by actingin accordance with the values and ethics
required of the Company and its employees as responsible members of society.”
Working to the Furukawa Electric Group

Action Guidelines as our basic philosophy on ethical and legal compliance, we
continue to promote in-house education,
inspections to prevent any infringementson the law and a range of other compliance-related activities. We have put together a Central Compliance Committee,

chaired by the Chief Social Responsibility Officer (CSRO), to organize thepromotion of compliance activities, withsubordinate compliance committees alsoin place at individual works and branches
around the country.

Compliance Education
Having compiled a set of Action
Guidelines for Company Officials andEmployees outlining specific codes ofconduct and an accompanying manualcontaining additional explanations, both
based on our Furukawa Electric Group
Action Guidelines, we combined the publications with a message from the President into a booklet called the Compli-

ance Handbook, which we distribute toall officials and employees as part of ourongoing educational schemes targetingcompliance in the workplace.

Compliance Handbook

Internal Reporting System
To enable early detection of compliance violations and corrective action,
we operate a system whereby company
officials and employees can file anonymous reports directly with the Central
Compliance Committee (namely, aninternal reporting system). Using a pro-

prietary system developed by Furukawa,the system includes features such as
the ability to receive reports whereby
the reporting party remains anonymous
whilst still exchanging emails between
the reporting party and the Company.
The system thus enables communication

between the Company and the reporting
party, including feedback to the reporting party on the Company’s response to
the matter. The findings of investigations
into reported matters and details of theCompany’s response are reported to theBoard of Directors as appropriate.

8Furukawa Electric’s Business Activities

Furukawa Electric Group Overview and
Financial Report
Furukawa Electric was established in 1884, at which time it dealt mainly in electric wire and wrought copper products.
These days, Furukawa Electric operates on a global scale in five businesses: telecommunications, energy and industrial
products, metals, electronics and automotive systems and light metals.

Corporate
ProfileName:

The Furukawa Electric Co., Ltd.

President:

Hiroshi Ishihara

Founded:

1884

Sales:

1,104.7 billion yen (fiscal 2006)

Number of employees: 32,026 (as of March 31, 2007)

Domestic
Bases

Head Office:2-3, Marunouchi 2-Chome, Chiyoda-ku, Tokyo
Works: 5(Nikko, Chiba, Hiratsuka, Mie and Osaka)
Branch Offices, Branches and Sales Offices: 12
Research Laboratories: 5(Yokohama R&D Laboratories, Metal Research Center,
Ecology & Energy Laboratory, FITEL Photonics Laboratory
and Automotive Technology Center)67 bases in 18 countries
Asia: 49

Overseas

North andSouth America: 13

Bases

Europe: 5

Results

Net Sales (Consolidated)

Net Income(100 million yen)(100 million yen)

12,000(100 million yen)300

11,047

10,000

8,725

8,000
6,000

Total Assets

7,106

7,399

7,759

4,000

0

2002

2003

158

2004

255

2005

298

2006

12,000

-300

8,000

-600

6,000

-900

11,793

10,000

11,106
9,913

10,522

10,967

2005

2006

4,000
-1,140

2,000
0



-1200
2002

2003

2004

2005

2006

-1500

-1,401

2,000
0

2002

2003

2004

Breakdown of Sales
according to Segment

Main Business

Services and others (3.4%)

Electronics and automotive systems (20.4%)

Segments

Three Core Materials

Light metals (20.9%)

Business Segments

Main Products

Telecommunications (14.0%)

Energy and industrial products (24.9%)

Metals (16.4%)

Main Customers

Telecommunications
Optical fibers and cables
LasersCommunications

Optical amplifiers

Communication equipment

Routers

Energy and Industrial Products
Copper wire rods
Industrial power cables
LCD reflectors

Optics

Semiconductor tapes

Power
Railways
Electrical machinery

MetalsWrought copper forelectronic products andcopper foil

Non- Synthesis
ferrous
andMetals Processing

Electronic and electricalmachineryAir conditioner copper piping

Electronics and Automotive Systems
Plastics

Wire harnesses forautomobile
Electronic components
Components for electronicequipment

Automobiles
Electronic and electricalmachinery

Magnet wires

Light Metals (Furukawa-Sky)

Aluminum can stock
Aluminum tank materials for
LNG vessels
Aluminum materials
for semiconductor
manufacturing equipment
Processed aluminum products

Can manufacturing
Shipbuilding
AircraftElectrical machinery
Semiconductors

10Environmental Performance

Furukawa Electric
Basic Environmental Policy

Furukawa Electric recognizes that the preservation of the global
Basicenvironment is a critical issue for society and takes the environment

Philosophy

into consideration in every aspect of its corporate activities to help
create a sustainable, happy and prosperous society.

ActionGuidelines

11

l We shall maintain a constant awareness of the impact of our corporate activities on theenvironment, with each and every employee involved in environmental preservation
activities.
l In addition to complying with environmental laws and regulations and withrequirements from our customers and other sources, we shall also set out voluntarystandards to establish greater levels of control.
l We shall set out environmental targets and objectives and systematically carry out
activities accordingly to continuously improve our efforts to protect the environment.
l Environmental concerns shall be taken into consideration at every phase of our work,from the R&D and design stages onwards, to supply environmentally friendly products.
l We shall strive to reduce consumption of resources and energy, to promote recycling,
to reduce waste and to minimize environmental impact at every stage of our activities,
from procurement and manufacturing to distribution and customer service.
l We shall conduct environmental audits and review our environmental management
system and environmental preservation activities to make continuous improvements.
l In addition to raising employee awareness through environmental education, we shallpromote the disclosure of information and communication with the public and play anactive part in community activities.

Environmental Management Targets and Performance
Having devised a set of targets for the four year period from fiscal 2006 to fiscal 2009 in the form of the 2009 MediumTerm Plan for Environmental Preservation Activities, Furukawa Electric continues to promote environmental activities
accordingly. We also set out annual Priority Environmental Preservation Activity Targets, based on which we map out
objectives, targets and action plans as part of the environmental management systems at each of our bases. On a Groupbasis, we formulate common activity targets as part of consolidated environmental management, with each individualcompany setting their own annual targets and carrying out activities accordingly.

Furukawa Electric Annual Targets and Performance for Fiscal 2006
Activities

Priority Environmental Preservation Activity
Targets for Fiscal 2006

Performance in
Fiscal 2006

RatingPriority Environmental Preservation Activity
Targets for Fiscal 2007

Waste reduction
activities

20% reduction in the volume of outsourced waste
59% reduction
disposal compared with fiscal 2004 level◎

30% reduction in the volume of outsourced waste
disposal compared with fiscal 2004 level

Zero emission activities

20% reduction in direct landfill disposal
compared with fiscal 2004 level

65% reduction◎

30% reduction in direct landfill disposal
compared with fiscal 2004 level

Activities to prevent
global warming

22% reduction in greenhouse gas emissions
compared with fiscal 2000 level

17% reduction△

23% reduction in greenhouse gas emissions
compared with fiscal 2000 level

Chemical substancemanagement activities

12% reduction in emissions of volatile organic
compounds compared with fiscal 2004 level

18% reduction◎

18% reduction in emissions of volatile organic
compounds compared with fiscal 2004 level

100% procurement rate for 50 general purpose
items

97%

△

100% procurement rate for green products)(general purpose items)

Establishment of the FGM system* at all plants
subject to the RoHS Directive

System established○Establishment of the FGM system at major supply
chain operators△

1) Sales of environmentally friendly products
amongst new products 100%
2) Examining environmental performance indicesGreen activities

Eco-design activities

Increase sales percentage of environmentally67%
friendly products amongst new products to 100%

Evaluation ratings:◎ Easily achieved; ○ Achieved; △ Almost achieved; × Unachieved*The FGM system is a mechanism designed to manage the content of regulated hazardous substances in Furukawa Electric products.

Furukawa Electric Consolidated Environmental Management Medium-Term Targets
Activities

Furukawa Electric 2009 Medium-Term Plan forEnvironmental Preservation Activities

2009 Consolidated Environmental Management
Common Activity Targets

Waste reduction
activities

50% reduction in the volume of outsourced waste disposal
compared with fiscal 2004 level

50% reduction in the volume of outsourced waste disposal
compared with fiscal 2004 level

Zero emission activities

50% reduction in direct landfill disposal compared with fiscal 2004 50% reduction in direct landfill disposal compared with fiscal 2004
level
level

Activities to prevent
global warming

25% reduction in greenhouse gas emissions compared with fiscal
2000 level

Chemical substancemanagement activities

30% reduction in emissions of volatile organic compounds
compared with fiscal 2004 level

Green activities

Eco-design activities

Expansion of the range of products subject to green procurement(general purpose items) and introduction into Furukawa ElectricGroup

10% reduction in greenhouse gas emissions compared with fiscal
2000 level
30% reduction in emissions of volatile organic compounds
compared with fiscal 2004 level
Eliminating the use of chlorinated organic compounds by fiscal
2008
100% procurement rate for items subject to green procurement(general purpose items)

Promotion and improvement of green product management
Promotion and improvement of green product management○ Establishment of the FGM system at supply chain operators by○ Establishment of the FGM system at supply chain operators by
the end of 2007 for full-scale operation by the end of fiscal 2008
the end of 2007 for full-scale operation by the end of fiscal 2008
Promotion of improved environmental performance of products○ Increased percentage of environmentally friendly products
amongst new products○ Introduction of environmental performance indices

Promotion of improved environmental performance of products○ Increase sales percentage of environmentally friendly products
amongst new products to 100%

12

Environmental Performance

Environmental Management System

Environmental Management Organization
We at Furukawa Electric promote environmental preservation activities on acompanywide basis via our Central Committee for Environmental Management,
which is chaired by the Chief Social
Responsibility Officer (CSRO). We also
promote Group environmental activities
in conjunction with our affiliated companies via the Liaison Meeting for Consolidated Environmental Management. All of
Furukawa Electric’s business bases andconsolidated environmental companies
have been granted ISO 14001 certification.

Company-wide Environmental Management Organization Chart
Committee for Company-wide
Promotion of Energy Conservation

Central Committee forEnvironmental Management

Committee for Development ofEnvironmentally-Friendly Products
Safety and Environment
Promotion Department

Environment Committeeof Works

Divisional Environment
Committee

Expert Committees

Energy Conservation Committee,
Waste Committee,
Chemical Substance Committee, etc.

Environmental Personnel
Meeting
Committee forGreen Product Management
Liaison Meeting for Consolidated
Environmental Management
Committee for Consolidated Environmental
and Green Product Management

Environmental Education
The Furukawa Electric Group runs avariety of educational initiatives designed
to raise levels of environmental awareness amongst our employees.

ISO 14001 Related Education
We organized two Internal Environmental Auditor Training Seminars led
by company instructors in fiscal 2006,
with participants including members ofstaff from affiliated companies. This year,
we trained a total of 49 internal auditors
through such seminars. We also organized internal auditor refresher seminars
aimed at our affiliated companies.

Environment-Related Education
We organized education sessions onenvironmental issues in general for a totalof 91 new employees and second-year employees this year. We also conducted educational activities on an ongoing basis at eachof our works and workplaces to coincidewith employees being assigned to new divisions, including both general environmental education sessions and special education
sessions geared towards specific duties.

Internal Environmental Auditor Training Seminar

Group training for new employees

Initiatives Based on Positive Environmental Impacts
In addition to negative environmental
impact, ISO 14001 also covers impacts
that have beneficial effects on the environment (positive environmental impacts). As well as our ongoing efforts to13

prevent pollution, we at the Furukawa
Electric Group continue to get involvedin proactive activities designed to have apositive impact on the environment. For
instance, we are currently working on

improving the linear speed of coil manufacturing, increasing usage of lead-freesoldering and developing environmentally friendly electric wire.

Environmental Risk Management

Soil and Groundwater Pollution Counter-Measures
In recognition of the fact that soil andgroundwater pollution is an important issue
for the health and safety of local residents
and employees, the Furukawa ElectricGroup actively engages in related risk management activities.
In addition to taking action promptly assoon as investigations detect soil or groundwater pollution, we make every effort tosecure the health and safety of all residents
living in the local area. We automatically report the status of any pollution and detailsof measures to prevent the spread of pollution to the local authorities and release relevant information to local residents, relatedorganizations, the media and any other concerned parties as necessary.
In an effort to prevent any negative impact on the local environment as a resultof soil or groundwater pollution, we implement a range of pollution risk avoidance
initiatives on an ongoing basis, including
conducting regular inspections to checkfor leakages of specific harmful substances,taking steps to prevent leakages and promoting the use of alternative substances.
During the period to fiscal 2005, wecompleted a review of records of specificharmful substances used at our works andaffiliated companies and conducted risk assessments to evaluate the risk of soil andgroundwater pollution at our works. Basedon the findings, in fiscal 2006 we voluntarily
carried out studies into the status of soil pollution in high-risk areas.
We have conducted soil pollution studies and implemented cleanup measures at
a total of nine company-owned offsite locations of our Nikko Works since fiscal 2003.
Of these, we had completed improvement
work at eight locations by the end of fiscal
2006. Work at the remaining location wascompleted on June 2007.

Improvement Work at Offsite Locations of our Nikko Worksl Arasawa Uodome

BeforeAfterl Grounds of the former Mizusawa Skating Rink

BeforeAfterl North Side of Tanze-so Housing

BeforeAfter

14

Environmental Performance

Environmental Risk Management

PCB Management
The quantity of instruments containing PCB is monitored at each of ourworks so that storage and management
operations can be carried out appropriately. In line with the start of processing
operations by the likes of the Japan Environmental Safety Corporation, we intend
to continue to commission processing on
an ongoing basis.

Quantity of PCB Stored
Works(Already processed)

Chiba Works(Unprocessed)

Unit: instruments

In storage
88

In use

Total
0

88

11

0

11

Nikko Works

324

30

354

Hiratsuka Works

47

11

58

Mie Works

126

0

126

Osaka Works

66

0

66

Yokohama Works
Total

9

0

9

671

41

712

Addressing Asbestos Issues
Use of Asbestos in Products
Although we do not currently manufacture or import products containing asbestos, we have manufactured and soldsuch products for industrial use in thepast. Relevant products include electric
wires for use on ships and fire prevention
products for use in construction to installelectric wires for telecommunication andelectricity. Details relating to these products are featured on our website.

Use of Asbestos in Buildings andPlant Facilities(1) Buildings
We have discovered asbestos spraymaterials in company-owned buildings
and plants. Although investigations into
the extent of dispersal have confirmedthat the asbestos is stable, we decided
to remove it anyway to safeguard against
the risk of dispersal in the future. Removal work was completed during fiscal
2006.

(2) Facilities and equipment
We have replaced all asbestos in cases
whereby viable alternatives are available.
In cases where asbestos is embedded
within insulation and other such materials and therefore not dispersed, we plan
to replace them with alternative materials that do not contain asbestos at a later
date, to coincide with scheduled inspections.

Compliance with Environmental Laws and Regulations and Other Compliance Requirements
We check environmental laws andregulations and any other compliancerequirements on a regular basis andmake every effort to ensure compliance,

15

including patrolling our sites to confirm
that measures are being properly implemented.
We monitor the latest information via

the Official Gazette and other sources tokeep track of revisions to environmental
laws and regulations and ensure that wehave taken all possible measures.

Business Activities andtheir Environmental Impact
In the process of providing Furukawa Electric products, we purchase a variety of components and raw materials,
consume water, electric power and other forms of energy and use chemical substances. We continue to work on
reducing the adverse impact that these activities have on the environment.

Environmental Impact of our Six Production Base WorksOUTPUT
INPUT

Atmospheric emissions
CO2
228,000 t - CO2

Raw materials
Copper

192,000 t

NOx

137 t

SOx

21 t
12 t

Soot

Energy(*1)

132,000 kl

Wastewater

Water

18.7 million t

Waste

Chemical
substances(*2)

Waste(*3)

1,443 tRecycled materials

17 million t

1,552 t18,348 t

Chemical substances(*2)
Volume emitted
181 t
Volume transferred
259 t(*1) Amount of electric power, fuel oil and fuel gas consumed(*2) PRTR targeted substances(*3) Outsourced waste disposal, excluding recycled materials

Environmental Impact of our Non-production Bases
We have identified the environmental impact of activities at our non-production bases, namely Furukawa Electric’s Head Office andthree Branch Offices.

Amount of electric
power consumed

956,843 kWh

Amount of water used

256 t

(362 t - CO2)

Amount of paper used
Photocopier paper
Newspaper
Cardboard

21,603 kg
3,653 kg
1 kg

We promote power and resource saving measures at our Head Office andBranch Offices, the company’s non-production bases.
Examples of such power saving measures include turning off lighting in conference rooms not in use and adjusting
air conditioning to appropriate temperatures. In terms of resource saving measures, we promote activities such as sorting waste and reusing resources such as
photocopier paper and files.

16

Environmental Performance

Environmental Accounting
In an effort to quantitatively assess our environmental costs and benefits, we have compiled tables outlining our“environmental conservation cost,” “economic benefit associated with environmental conservation activities” and the“environmental conservation benefit (material benefit).” All data has been compiled in accordance with environmental
accounting guidelines published by the Ministry of the Environment. Data on affiliated companies was collected for a totalof 22 companies.
Furukawa Electric’s environmental
conservation costs for fiscal 2006 came
to 5.1 billion yen in expenses and 200 million yen in investment. Expenses fell by
70 million yen compared to the previous

year (fiscal 2005). Overall economic benefits remained at 40 million yen, due inpart to increased energy costs.
Environmental conservation costs forour affiliated companies came to 3.3 bil-lion yen in expenses and 1.9 billion yen
in investment. Overall economic benefitsrose by approximately 300 million yen
due to increased energy costs.

Environmental Conservation Costs

Unit: million yen

Category

Key activity and the outcome(1) Business area cost(2) Upstream/downstream cost(3) Administration cost(4) Research and development cost(5) Social activity cost(6) Environmental remediation cost

Furukawa Electric
Total costs
Year-on-year

Pollution prevention (air pollution, etc.), energy conservation, waste
disposal, etc.
Recovery of packaging, drums, etc.
Environmental management system auditing, environmental impact
monitoring, etc.
Development of environmentally friendly products, research into
alternatives for harmful substances
Tree planting, local community cleaning activities, donations, etc.
Environmental impact assessments, cleanup of polluted soil, etc.
Total

Affiliated companies
Total costs

1,515

114

2,220

667

156

209

428

25

214

1,184

82

557

4
1,260
5,058

-86
-358
-67

5
58
3,262

Year-on-year figures have not been calculated for affiliated companies due to differences in the companies covered compared to last year.

Environmental Conservation Benefit
Emissions causing
environmental impact

Unit

Waste disposal*t

Furukawa
Electric

Affiliatedcompanies

Reduction

Reduction

667

310

Energy consumption(crude oil equivalent)

1,000 kl

-8

14

Water consumption

1,000 t-1,722

-764

t

74

1

CO2 emissions

1,000 t - CO2-16

8

SOx emissions

t

-9

82

NOx emissions

t

-11

-160

Soot emissions

t

-1

58

Emissions of volatile organic
chemical compounds* Excludes recycled waste

Unit: million yen

Furukawa
Electric
Total benefit
448
-13
-393
-1
41

Revenue from recycling

Reduction in waste disposal costs
Reduction in energy costs
Reduction in water purchase costs
Total

Affiliatedcompanies
Total benefit
740-13-1,02417-280

Minus figures indicate an increase

Investment and Research Costs
Investment and research costs

Unit: million yen

Furukawa
Electric
Total costs
186
11,9009,969

Environment-related investment
Total investment
Total research costs

Affiliatedcompanies
Total costs
1,850
22,511
5,299

Economic Benefit(100 million yen)(100 million yen)

60

12
49.5

50

53.0

51.3

43.6
40

50.6

Environmental remediation costSocial activity cost
Research and development cost
Administration cost

36.8

Upstream/downstream cost
30

Business area cost

Revenue from recycling

11.0
10

Reduction in waste disposal costs
Reduction in energy costs

8

Reduction in water purchase costs
Total revenue and expenditure

6
4

20

4.0
4.1

2.6

3.2

2

10

17

Details of benefits

Minus figures indicate an increase

Environmental Conservation Costs

0

Economic Benefit Associated withEnvironmental Conservation Activities

0.4
0
2001

2002

2003

2004

2005

2006 (Fiscal year)

-4

2001

2002

2003

2004

2005

2006

(Fiscal year)

Producing Environmentally Friendly Products
In order to produce environmentally friendly products, we at Furukawa Electric undertake measures such as purchasing
items via green procurement, green product management and environmentally friendly product development.

Green Product Activities
Green Product Management Activities
Having set up a Committee for Green
Product Management in 2005, we are currently working on the establishment of amanagement system to control chemical
substances contained in our products,
whilst also furthering the sharing of information between business divisions.
In an effort to prevent any infringements upon environmental regulations
in relation to chemical substances, westudied the content of regulated harmful
substances in every one of our Furukawa
Electric brand products in fiscal 2005 andcompiled a “Registration Master for all
Green Products and Plants.”
In fiscal 2006, we decided to proceedwith measures based on the aforementioned master in phases, starting withplant divisions responsible for producing
high-priority regulated products. In viewof requirements regarding the management of chemical substances containedin products issued by the Japan Green
Procurement Survey Standardization Initiative (JGPSSI) and requests from major
customers, we compiled a new system configuration check sheet (FGM Self-check
Sheet), conducted voluntary inspections
unique to Furukawa Electric, ran management system inspections and rectified
any issues. We have now completed theestablishment of a management system

spanning four in-house companies and 12
manufacturing divisions. On other fronts,
we have undergone and performed wellin supplier audits conducted by two of ourmajor customers and have started workon the establishment of management systems at our affiliated companies as well.
In addition to all this, we have organized Auditor Training Seminars led bycompany instructors and outside specialists to improve auditors’ understandingof how to manage chemical substances
contained in products. As a result wehave trained at least two auditors in eachbusiness division and at least one at eachaffiliated company.

Green Product Activities at our Telecommunications Company
With its wide range of products, including optical fibers, optical and communication cables, optical connectors, wiring forelectric and electronic equipment, opticalcomponents, fiber optic amplifiers, laser
modules, optical system products, network equipment and fusion splicers, themarket covered by Furukawa Electric’s
Telecommunications Company stretches
all the way around the world. Such a widearray of products results in an equallywide variety of requests from customers
regarding the management of chemical substances contained in products.
On the whole, our Telecommunications
Company is working on establishing amanagement structure from the following
perspectives.
(1) We are compiling a set of green product management regulations that canbe applied to each individual productcategory and are working on standard
system requirements for each productcategory, with the relevant regulations
set as the upper standard.
(2) We have continued to devise mechanisms to retrieve data and promoterecord management to enable us torespond quickly to inquiries from ourcustomers regarding the six substances listed under the RoHS Directive, the24 JIG substances and other chemical
substances contained in our products.
(3) We have installed X-ray fluorescence
spectrometers and are using them on
externally purchased items.

We are also working on the development and launch of the following new
products designed to contribute to theenvironment.
(1) Easy-recycle optical cables are opticalcables that can be recycled efficiently
once recovered. By carrying out reviews right from the design stages,
we have successfully developed andlaunched products whose structure
can be easily separated, thereby making it possible to recycle a large number of their composite components.
(2) We are already 100% compliant with
the RoHS Directive in the field of
equipment wiring. We have launched
and are currently focusing on the promotion of Eco-Wire, which is free from
halogen as well as the six substances
under the RoHS Directive. Eco-Wiresales in fiscal 2006 accounted for approximately 30% of our overall equipment wiring sales.

18Environmental Performance

Producing Environmentally Friendly Products

Eco-Design Activities
Environmentally Friendly Products
At Furukawa Electric, we use theterm “environmentally friendly products”
to refer to products that are harmless at
every stage of the process from production and distribution through to usage
and disposal and that have a minimal impact on the environment. We even have

our own unique environmental labelingsystem for such products. Our environmentally friendly product percentage,
namely the percentage of total sales of
new product accounted for by environmentally friendly products, came to 67%
in fiscal 2006.

* Further details of our environmentally friendly
products are available at the following addresson the Furukawa Electric website.
http://www.furukawa.co.jp/enviro/pro/index.htm

Environmentally Friendly Product Development
In an effort to combat the various effects of global warming on society in recent
years, the development of environmentallyfriendly products is becoming an increasingly urgent issue. Although environmentally friendly products obviously need tohave minimal impact on the environment,
they also need to offer benefits to thepeople who use them, in terms of areas
such as price, performance, safety and reliability, if they are to take them on board.
Similarly, unless products find widespread
application, it is impossible for companies
to generate cost benefits. We therefore focus on activities designed to get people toselect and use our environmentally friendly products as much as, if not more than,technical development itself.
Based on the notion that it is important first and foremost for us to select anduse our products ourselves, we introduce
products under development into our own
works in an effort to show our customers
the effects and benefits that they offer andgive them a real feel for our products.
The heat island effect in urban areas
is a particularly tricky issue, plagued by avicious circle whereby using air conditioning as a solution results in the consumption of even more energy, thereby driving

We aim to develop products in linewith our customers’ needs
Hideto Nakamura
Eco-Products Department, Ecology & Energy Laboratory,
R&D Division

No matter how environmentally friendly a product is, people will only take it
on board if they think that the benefits it offers balance out the cost.
I worked on the development of Hydrostaff, a plastic underground storage
and permeation tank that offers outstanding performance as well as the advantage of quicker installation compared to conventional concrete storage tanks.
With a plastic storage tank consisting of a block-shaped structure, you always
face the issue of how to remove sand that flows into the tank along with rainwater and forms as sediment inside the tank. We have resolved this issue however
by also developing a Sediment Control System, which can really be a great help
to our customers from the point of view of maintenance.
We will continue to make every effort to develop products that offer as many
benefits as possible in line with our customers’ needs in the future.

19

the temperature up even higher.
To combat the heat island effect, wehave developed a system that, rather
than consuming additional energy, stores
naturally occurring rainwater and uses theprocess of evaporation to generate a cooling effect. We have also launched a project
to install the relevant system at our works
to verify its effectiveness. We hope to giveeveryone the chance to experience the effects of this system in 2007.
We intend to continue to actively develop environmentally friendly productsthat enable us to really feel the effects andbenefits first hand.

Hydrostaff
Made from a combination of polypropylene resin-based units and sheeting,the Hydrostaff system stores rainwater underground or allows it to permeate aspart of the creation of rainwater usage or rainwater runoff-prevention facilities.
Its features include easy assembly, a reduced construction period and outstanding
water storage efficiency, with a storage rateof at least 95%.

Sediment Control System
Consisting of a partitioned unit and a series of manholes for inspection or
cleaning purposes, the Sediment Control System significantly reduces the diffusion and accumulation of sand inside water tanks. The inspection holes enable
a person to get inside and clean up sand that has formed into sediment, makInspection/cleaning holeing maintenance easy
Rainwater inlet
and enabling tanks to
Partitioned unit
maintain their storage
volumes over a longer
Sediment Control System
period of time.

Easily Dismantled Recyclable Optical Fiber Cables
With conventional optical fiber cables,
it takes effort to separate binder tapefrom the optical fibers when dismantlingcables. There are also issues with thebinder tape becoming contaminated with
impurities in the form of cable sheaths,
making the process of dismantling andseparating cables a costly one. In conjunction with Tokyo Electric Power
Company, we at Furukawa Electric are
addressing the issue of recycling opticalfiber cables and have developed easily
dismantled recyclable optical fiber cables
that can reduce the cost of dismantlingand separating cables.
This product’s features include thefollowing.
(1) By using polyethylene tape for thebinder tape, the sheath and the binder
tape melt together during sheathingas part of the manufacturing process
and become integrated with one an-other. Consequently, when the sheathis removed, the cable can be dismantled as if there wasn’t any binder tape.
This makes it possible to significantly
reduce the time taken to dismantle
cables.
(2) As the binder tape is made from polyethylene, the same material as thesheath, there are no impurities even
if the two are mixed together.
(3) Making it easier to dismantle cables
also makes it easier to remove thesheath and take out the optical fibers
inside when installing or connecting
optical fiber cables.
As the introduction of cables such asthese can cut dismantling and separation
costs by 50%, it is possible to dismantle
and separate cables for the same cost as
industrial waste disposal via landfill sites
or incineration.

The Structure of an Optical Fiber Cable
Optical fibers
Binder tape
Moisture barrier tapeTension member*
Slots*
Sheath** denotes components made from recyclable materials.

A Dismantled Cablel Traces of melted binder tapel No binder tape

Fire Retardant Cable Sheets
PROTECO Sheet P2-eco and PROTECO Sheet P2DX-eco
Fire retardant cable sheets are highly
flame resistant sheets that are wrappedaround power or communication cables
inside a cable tunnel or on a cable rack,either directly or on top of the rack, toprevent fire from spreading.
Until now, fire retardant sheets havetended to be made from halogen-based
fire retardant materials to give them theirhighly fire retardant properties. Through
F-CO and Furukawa Techno Material
however, we have managed to achieve an
oxygen index of 50 and limit the volume

Cables wrapped in
PROTECO Sheet
P2-ecoof hydrogen halide generated upon combustion to a mere 1mg/g via highly fire
retardant technology using halogen-freeresin, rubber and fire retardant. We havealso managed to minimize smoke emission, keeping it down to one quarter ofconventional levels (based on our findings). By maintaining outstanding levelsof fire retardant performance (including
passing IEEE Std. 383-compliant vertical tray combustion testing), eliminating
halogen and minimizing smoke, we haveachieved a substantial reduction in envi-

ronmental impact compared to conventional fire retardant sheets.
Our sheets also offer superior mildew
resistance, making them ideally suited
to locations susceptible to mildew inside
cable tunnels.
In recent years, our sheets have comeinto wide use in cable tunnels at substations, various different plants, airports,
railway facilities, power companies and arange of other locations.

Attachment belts
PROTECO Sheet P2-eco (power cables)
Thermal Expansion Liner
PROTECO Sheet T (communication cables)

Cable racks wrappedin PROTECO Sheet
P2-ecoPROTECO Sheet P2DX-eco (power cables)

20Environmental Performance

Producing Environmentally Friendly Products

Recycled Insulated OC Wire
Of all the sheathing materials used inelectric wiring and cables, cross-linked
polyethylene cannot be heated up andmelted. This has always posed problems
in terms of material recycling, resulting
in cross-linked polyethylene being almost
entirely recycled into fuel via thermal recycling. However, Furukawa Electric hasdeveloped unique material recycling technology capable of recycling cross-linked
polyethylene via thermoplastic processing. In conjunction with Tokyo ElectricPower Company and VISCAS Corporation, we have successfully developed
technology that enables waste sheathingmaterials from used outdoor cross-linked
polyethylene insulated wire (OC wire) tobe reused as new sheathing material for
OC wire and have released recycled insulated OC wire as a commercial product.
Our recycled insulated OC wires contain approximately 25% recycled thermoplastic-processed waste sheathing material, making this the world’s first case ofcross-linked polyethylene being recycled
for the same purpose via material recycling.

Green Procurement
Office Supplies and Other General Purpose Items
We promote the purchase of green
products via our purchasing division byregistering such products exclusively on
our purchasing system. We stepped up
our activities even further in fiscal 2006,
increasing the total number of products
covered by 27, taking last year’s total of
23 up to 50. The term “green products”
refers to products recommended by theGreen Purchasing Network and products
bearing environmental labels. As a resultof our efforts, we managed to achieve a
procurement rate of 97% by the end of
fiscal 2006. Our affiliated company Furukawa-Sky is also implementing similar
activities and has reached a procurement
rate almost on par with ourselves. In addition to increasing the number of products covered in the future, we also intend
to get more of our affiliated companies toengage in green procurement.

Examples of Environmental
Labels Used

Eco Mark Program

Compliant with
the Law on Promoting
Green Purchasing

Green MarkGreen Purchasing
Network

The R100 mark (recycled
paper with a recycled
paper ratio of 100)

Energy-Saving Labeling
Program

Products and Manufacturing Process Components
We verify the status of products andmaterials purchased for manufacturing
processes through measures such as
conducting individual interviews and investigations, covering areas such as our

suppliers’ environmental management
systems and levels of environmentally
regulated substances contained in theirproducts, and ordering MSDS and otherdocuments.

International
Energy Star Program21

Environmentally Friendly Products
Products that help prevent global warming
We are working on the development and commercialization of
products designed to help save energy, such as lightweight products or products with improved energy efficiency, and products
and systems that use clean energy.
• Microcellular reflective sheet (MCPET)• Rainwater storage and permeation
systems (Hydrostaff)• High-performance corrugated fins• High-performance heat exchangematerials• Advanced, stable performance
extruded aluminum materials• Aluminum alloys to enable lightweightvehicle development• Applied micro heat pipe products

Automobile panels

MCPET

Products free from substances that cause environmental impact
We are working on the development and commercializationof products that do not cause any environmental issues whenused or produce harmful substances when incinerated or sent toa landfill site after use and biodegradable products that do notleave behind any waste products.
• Eco-wires for electronic and electric
equipment (ECOACE plus, ECOBEAMEX)• Fire retardant insulated copper sheath
piping (THERMO-IN BIRUMEITO Tube)• High-performance copper alloys forconnectors (beryllium-alternative
copper alloys)• Protective indoor wire tubing
made from fire retardant resin(ECOPLAFLEKY)• Lead-free plated components forelectronic equipment

ECOBEAMEXTHERMO-IN BIRUMEITO Tube

Products that help create a recycling-oriented society
We are working on the development and commercialization ofrecycling-oriented products, including products made from reused
waste products, products made from recyclable materials, products made from fewer materials or containing fewer components
and easily degradable products.
• Underground cable ducts (KOTA-KUN,
KOICHI-KUN)• Biodegradable thermoplastic form
(BIOACE)• Synthetic resin troughs (Green Trough)• Recycled aluminum cans
• Weed barrier sheets• Watering hoses

Green Trough

KOTA-KUN

HPWR IIFUSCOAT

Products that help protect the ozone layer
We are working on the development and commercializationof apparatus and processes that do not use chlorofluorocarbons(CFCs), one of the main substances harmful to the ozone layer,
and products compatible with CFC alternatives.
• CFC alternative-compatible magnet
wires (HPWR II)• High-performance resin sheathingaluminum sheets (FUSCOAT)• CFC alternative-compatible copper
piping (FMGT)

22

Environmental Performance

Zero Emission Activities

The Furukawa Electric Group has been involved in efforts to reduce levels of outsourced
waste disposal ever since 1993. We have also
continued to promote zero emission activities,
which we define as “activities designed toreduce outsourced industrial waste disposal
whereby waste is transported directly from ourworks to landfill sites for permanent disposal,”
since 2001. This year, we have been promoting efforts to improve waste sorting and torecycle waste acid and sludge. The overall levelof outsourced waste disposal for the Group
as a whole fell by 28% compared with fiscal
2004 level to 10,600 tons. Furukawa Electricachieved an equivalent reduction of 59% andour affiliated companies a reduction of 18%(both compared with fiscal 2004 level levels).

a reduction of 24% (both compared with fiscal
2004 level levels). At Furukawa Electric’s Chiba
and Hiratsuka Works, we have reduced the rateof landfill disposal to no more than 1% of total
emissions.

Outsourced Waste Disposal

Direct Landfill Disposal(Tons)(Tons)

30,00020,00015,000

9,344

8,452

0

6,840

5,551

5,494 4,934
9,131 8,274
2000

2001

5,974 6,018
2002

2003

5,220
3,816

5,016 5,274

2,000

3,689 3,767

1,000

2,119 1,552(Fiscal2004 2005 2006 year)

We at Furukawa Electric are also working towards targets for the reduction ofwaste disposal costs. Spending on landfill
and intermediate disposal in fiscal 2001 totaled more than 300 million yen. In addition
to reducing levels of waste through initiatives such as promoting reuse and eliminating waste along our production lines,
we have continued to implement measures
such as carefully sorting waste to generatevalue since then, making it possible to sell
our waste products for profit. In addition to
the effects of activities such as these, soaring scrap copper prices following on fromthe previous year have enabled us to achieve
a profit of approximately 250 million yen.

As we have a wide range of manufacturing plants at our Hiratsuka Works, covering everything from construction materials to optical communication equipment
and electrical and electronic products
and materials, our operations generate
an equally wide range of waste products.
With this in mind, we decided to use ouraccreditation under ISO 14001 in 2000 as
an opportunity to launch full-scale waste
reduction activities.
As part of our waste reduction activities, we have been focusing on carefully
sorting waste based on a philosophy of
cutting overheads wherever possible. Specific measures such as stepping up waste

Income

249

2002
2002

2003
2003

2004
2004
-75

2005
43
2005

2006
(Fiscal2006 year)

-100
-200
-300
-400

-238

-252

80

50

300

70

Landfill

Emissions

2001
2001

Intermediate processing

30

Total waste generated 150

20

-187

100

10

-353
Expenditure

0

200

2000

2001

2002

2003

2004

2005

(Fiscal2006 year)2001

1,812 1,634
2002

2003

504
2004

1,504

1,825

750 1,288
176
177(Fiscal2005 2006 year)

100%
90%

60
50

Outsourced

40

Rate of recycling

80%
70%

30
20

50

10

0

0

60%

2000

2001

2002

2003

2004

2005

(Fiscal 50%

2006 year)

Rate of recycling

2000
2000

350

250

2000

2,232

(Tons/month)

60

40

1,657
3,022 2,974

Rate of Recycling (Hiratsuka Works)(Tons/month)

Total waste generated

100

1,889

2,567

sorting education, conducting waste andemissions checks at strategic waste collection points and recycling landfill waste
have consistently produced results year
after year. As such results tend to motivate employees to try and make further
reductions, we have made rapid progresswith improvement measures.
Having previously reduced levels of
landfill waste from around 55 tons permonth in fiscal 2000 to 10 tons per monthby fiscal 2004, we have now cut landfill waste to a mere 1.1 tons per month.
Equivalent to 0.3% of our total emissions,this signifies that we have successfully
achieved our zero emissions target.

Waste Generated (Hiratsuka Works)(Tons/month)

200

0

0

2,002

2,543

3,000

Reducing Landfill Waste

300

1,872
3,242

4,000

5,777

Reducing Waste Disposal Costs(Million yen)

1,639

6,000
5,000

7,959

Other affiliated companies
Furukawa-Sky
Furukawa Electric

7,000 1,442

7,592

10,000
5,000

8,000

Other affiliated companies
Furukawa-Sky
Furukawa Electric

25,000Waste Disposal Costs

23

The overall level of direct landfill disposal
for the Group as a whole also fell by 28%
compared with fiscal 2004 level to 3,322 tons.
Furukawa Electric achieved an equivalent reduction of 65% and our affiliated companies

Efforts to Prevent Global Warming

The Furukawa Electric Group has continued
to engage in activities designed to help prevent
global warming in conjunction with our energy
conservation initiatives. We are implementing awide range of measures at our plants, including
installing a range of energy conservation equipment such as cooling water pumps and inverter
cooling fans, running equipment efficiently(consolidating and cutting back on compressors, etc.), reusing hot air from exhaust fumes
and fuel conversion. At our offices meanwhile,
we are implementing measures such as turning
off unnecessary lighting and adjusting air con-ditioning temperature settings as appropriate.
Our total greenhouse gas emissions for theGroup as a whole came to 960,000 tons CO2
in fiscal 2006, a reduction of 6% compared tolevels in fiscal 2000. Furukawa Electric achieved
an equivalent reduction of 17% and our affiliated companies a reduction of 3% (both compared with fiscal 2000 level levels).

Greenhouse Gas Emissions(Tons CO2)

120
100

Furukawa
Electric

20.4

80
60

55.0

Furukawa-Sky

Other affiliatedcompanies

19.4

22.0

22.8

23.0

24.3

23.0

51.7

53.9

54.3

52.2

52.2

49.7

40

* For the purposes of this report, greenhouse gas
emissions are calculated based on uniform round-theclock CO2 equivalents.

20

We have installed NAS batteries atour Hiratsuka Works in an effort tomake effective use of nighttime power,
which uses a lower percentage of fossil
fuels, thereby enabling us to help prevent
global warming. Whereas our Hiratsuka
Works and affiliated companies in the
nearby area used to receive power fromseparate sources, the installation of NAS
batteries has enabled us to standardize
power sources and share the benefits
with our affiliated companies as well.

ters). The overall total for the Furukawa
Electric Group as a whole came to 504
million ton-kilometers. In an effort to cut
back on energy used on transportation,
we are working with Furukawa Logistics
to implement measures such as promoting modal shift, increasing loading rates
and making joint deliveries.
Furukawa Logistics asks the truck
haulage operators it deals with to obtain
Green Management Certification andhas continued to provide the necessary

support to enable us to remain an environmentally friendly logistics company,
through measures such as reducing fuelconsumption. Over the course of fiscal
2006, Furukawa Logistics’ major haulage
operators have more or less completed
the Green Management Certification
process. To cut CO2 emissions, there areplans for fiscal 2007 to get individual haulage operators to work together to ascertain fuel consumption for major routes.

0

27.3

25.4

23.3

22.9

22.4

21.3

22.8

2000

2001

2002

2003

2004

2005

2006

(Fiscalyear)

Installing NAS Batteries

Installed NAS batteries

Logistics-Related Initiatives
In accordance with newly introduced
regulations governing shippers under
the Revised Energy Conservation Law,
we have been working on monitoring
ton-kilometer data, including for our affiliated companies. Furukawa Electricrecorded a total of 148 million ton-kilometers in fiscal 2006. The only otherGroup companies recording 30 million
ton-kilometers or more were FurukawaSky (220 million ton-kilometers) and The
Furukawa Battery (46 million ton-kilome-

Example of Energy conservation Activities on the Shop Floor
At our Mie Works, we have fitted insulating jackets to molding machine heating cylinders in an effort to save energy
in the form of electricity used for heating.
Whilst upgrading kerosene oil boilers at
our Nikko Works, we took the opportuni-

ty to install new LPG fuel boilers capableof reducing CO2 emissions, enabling us
to achieve an annual reduction of approximately 600 tons (estimated CO2
equivalent).
An insulating jacket on a molding machine24

Environmental Performance

Chemical Substance Management

The Furukawa Electric Group promotes
efforts to reduce the use of harmful chemical
substances. In particular, we make every effort
to actively reduce emissions of volatile organic
compounds, which are regarded as one of

the causes of photochemical smog. Furukawa
Electric’s emissions have fallen 18% comparedwith levels in fiscal 2004, with organic chlorinecompounds now only used by six of our affiliated companies.

Emissions of Volatile Organic Compounds(Tons)

400
300* Furukawa Electric only

327

310

253

200
100
0

2004

2005

2006

(Fiscal year)

Appropriate Management of Chemical Substances
We check the properties of and laws
and regulations applicable to all chemical substances that we use as part of the
manufacturing process against Material
Safety Data Sheets (MSDS) and manage
substances accordingly. We also monitor
the volumes of each substance used andreport the relevant details in accordancewith the PRTR Law*.
* PRTR Law: Law Concerning Reporting, etc. of
Releases to the Environment of Specific Chemical Substances and Promoting Improvements in
Their Management

Volume of PRTR Substances Released and Transferred
Substance
No.
25
40
63
64
67
108
172
197
207
227
230
231
232
253
266
272
283

Name of substance
Antimony and its compounds
Ethylbenzene
XyleneSilver and its water-soluble compounds
CresolInorganic cyanide compounds
N, N-dimethylformamide
Decabromodiphenyl ether
Copper salts (water-soluble)
TolueneLead and its compounds
NickelNickel compounds
Hydrazine
PhenolBis (2-ethylhexyl) phthalate
Hydrogen fluoride and its water-soluble salts

Volumehandled
75.6
8.3
24.3
2.5
275.1
22.4
78.8
227.2
15.2
509.0
2.2
3.6
9.6
7.7
175.9
2.9
2.2

Volumereleased
0.0
0.0
8.2
0.0
0.7
0.0
0.3
0.0
0.0
170.7
0.0
0.0
0.0
0.0
0.3
0.2
0.0

(Unit: Ton)

Volumetransferred
5.4
0.0
3.2
0.0
0.0
0.0
0.0
16.4
0.0
232.7
0.0
0.0
0.0
0.0
0.0
0.2
1.2

Volumeneutralized
0.0
8.3
10.9
0.0
273.9
22.4
77.8
0.0
15.2
103.4
0.0
0.0
9.6
7.7
175.2
0.0
0.0

* Applicable to substances that are handled in volumes of one ton or more at Furukawa Electric works (or 0.5 tons or more in the case of
specific first category chemical substances)

Reducing Emissions of Volatile Organic Compounds
Emissions of volatile organic compounds (VOC) became subject to emissions regulations in April 2006 with theenactment of the Revised Air Pollution
Control Law. Although Furukawa Electricdoes not currently own any facilities thatfall under the relevant regulations, we arevoluntarily working to reduce emissions
anyway. The main types of VOC handled
by Furukawa Electric are toluene and isopropyl alcohol (IPA). We are looking into
switching to an alternative to toluene,

which we use to clean copper strips, andupgrading our facilities to do so. We arealso examining the possibility of installing equipment to recover evaporated IPA,
which is used to reduce copper wire as itcomes out of the melting furnaces.

Example of Chemical Substance Reduction Activities
At our Mie Works, we are working on reducing VOC through QC Circle activities.
As part of the optical fiber manufacturing
process, large quantities of fluid consisting
mainly of ethyl alcohol are used to clean
jigs. The QC Circle for the relevant department set out to achieve a reduction in thevolume of fluid used. Although cleaning
fluid was already recovered and reused
repeatedly, the recovery rate was just 36%,

25

meaning that the remaining 64% was released into the atmosphere. The membersof the QC Circle closely monitored how
the fluid was used, identified points where
it was being released and came up withsolutions. Their solutions included changing the recovery method used so that fluid
comes out of the bottom of cleaning tanks
rather than being pumped out from thetop, raising awareness to ensure that allteam members check lids frequently andmodifying the equipment itself by fitting
covers to enable released alcohol to be
recovered in the cleaning tanks. As a result, the recovery rate has improved from
36% to 80%, thereby cutting atmosphericemissions considerably. The QC Circle’s
efforts have also helped cut costs by enabling a reduction in the volume of fluid
purchased.

Environmental Preservation Data
Of the works operated by Furukawa Electric, we collect air and wastewater quality data at the four works that areregistered as specialized plants.

l Chiba Works
Atmospheric Indicators

Wastewater Quality Indicators

NOx

(ppm)

Legal Self-imposed
Facilities
Average Maximum
standard standard
Melting furnace
180
180
30
51

Soot

(g/Nm3)

Melting furnace

Item

Unit

0.1

0.1

0.027

0.048

Item measured

Unit

pH

Legal
standard

Self-imposed
Average Maximum
standard

5.0 to 9.0

5.5 to 8.5

7.9

8.4

COD

(mg/l)

15

10

3.2

11.3

SS

(mg/l)

20

10

3.9

9.5

n-h (mineral oil)

(mg/l)

2

1

0.3

1.2

l Nikko Works
Atmospheric Indicators

Wastewater Quality Indicators
Legal Self-imposed
Average Maximum
standard standard

Self-imposed
Average Maximum
standard

5.8 to 8.6

6.0 to 8.5

7.3

7.5

25

16

3.2

4.4

(mg/l)

50

20

1.2

2.8

(mg/l)

5

0.5

0.2

0.2

Unit

Facilities
Boiler

180

180

81

89

pH

NOx

(ppm)

Melting furnace

200

200

27

28

BOD

(mg/l)

Dryer furnace

300

250

45

52

SS

Boiler

17.5

17.5

0.47

0.55

n-h (mineral oil)

Melting furnace

17.5

17.5

0.37

0.42

Dryer furnace

17.5

17.5

0.13

0.14

Boiler

0.3

0.3

0.00

0.00

Melting furnace

0.2

0.2

0.03

0.03

Dryer furnace

0.5

0.2

0.00

0.00

SOx

Soot

(K value)(g/Nm3)Item measured

Legalstandard

Item

Unit

l Mie Works
Atmospheric Indicators
Item

Unit

NOx

(ppm)

SOx
Soot

(Nm3/Hr)(g/Nm3)

Wastewater Quality Indicators

Facilities

Legal Self-imposed
Average Maximum
standard standard

Item measured

Unit

Legal
standard

Self-imposed
Average Maximum
standard

Boiler

180

140

64

65

pH

5.8 to 8.6

6.5 to 8.5

7.8

8.0

Melting furnace

180

140

43

49

BOD

(mg/l)

10

4

1.5

5.0

Boiler

0.6

0.5

0.00

0.00

SS

(mg/l)

25

6

1.1

2.1

Melting furnace

41.6

33.3

0.13

0.13

n-h (mineral oil)

(mg/l)

1

0.7

0.10

0.10

Boiler

0.3

0.24

0.005

0.005

Melting furnace

0.3

0.24

0.057

0.077

l Osaka Works
Atmospheric Indicators

Wastewater Quality Indicators
Legal Self-imposed
Average Maximum
standard standard

Legal
standard

Self-imposed
Average Maximum
standard

5.7 to 8.7

5.7 to 8.7

7.7

8.2

300

10

5.7

10.0

(mg/l)

300

50

11.8

25.0

(mg/l)

5

2

1.3

2.9

Item

Unit

Facilities
Boiler

150

120

2.0

2.0

pH

NOx

(ppm)

Melting furnace

200

160

2.0

2.0

BOD

(mg/l)

Heating furnace

170

144

3.0

4.0

SS
n-h (mineral oil)Soot

(g/Nm3)

Boiler

0.1

0.08

0.001

0.001

Melting furnace

0.2

0.16

0.001

0.001

Heating furnace

0.25

0.2

0.001

0.001

Item measured

Unit

26

Social Performance

Relationship with our Customers

Quality
Control Policy

At every stage of our operations, from research and development tomanufacturing, sales, customer service and management, in all sections andall hierarchies, we always strive to adhere to a PDCA management cycle basedon actual facts, maintain and improve our products, customer service and thequality of our operations and put our management policies into practice.

A Brief History of Furukawa Electric’s Quality Control Activities

27

Furukawa Electric established a Quality
Control Committee in 1949 and commenced
educational activities to raise employees’
awareness of statistical methods and otheraspects of quality control at all our plants.
As a result of these activities, we started tomake use of statistical methods at each of
our plants, work towards operational standardization and implement efficient experiments at our laboratories based on Designof Experiments. This enabled us to significantly increase quality levels, as well as in-creasing operational stability and efficiency.
Our quality control initiatives were recognized in 1952 as Furukawa Electric wasawarded the Deming Application Prize forachieving distinctive performance improvement through the application of TQM.
In an effort to maintain and improve
quality levels, we have continued to set
out and implement companywide Quality Control Policies every year since then.
Through these and other activities, including a range of quality control educational

initiatives and our unique quality auditor
training schemes, we continue to make every effort to improve our employees’ quality control skills.
In addition to obtaining ISO 9001 quality
management system certification in each ofour manufacturing divisions and achieving
operational standardization, we continue to
implement internal reform in areas such as
efficiency and promote activities designed
to improve levels of quality and customer
satisfaction.

Basic Stance of Quality

The Organization for Improved Quality Levels

Based on our basic policy of putting
quality first and implementing uniform
companywide quality control, we strive
every day to provide our customers withas many products and services that guarantee reliability and satisfaction as possible.

To guarantee quality at every level
throughout the company, we at Furukawa
Electric have established a Central Quality
Control Committee to oversee the companywide promotion of quality control activities. We have also set up Divisional Quality
Control Committees with direct links to
the heads of each division and make every
effort to maintain and improve the qualityof our products, services and operations
so as to offer continual quality assurance.
We have appointed Quality Control
Managers to promote quality control activities and quality assurance on behalf ofdivisional heads and strive to promote reciprocal cross-divisional efforts to improve
quality levels through the Quality Control
Management Meeting.

Quality Control Organizational
Structure
President
Central Quality Control Committee(Chair: CPO / Members: division heads)

Quality Control Management Meeting(Members: Quality Control Managers
from individual divisions)
Divisional heads
Quality Control Manager
Divisional Quality Control Committees

Quality Improvement Activities
Our Central Quality Control Committee
formulates companywide quality control
policy for each fiscal year, with divisional
quality policies then determined accordingly by each individual division. Policies
are implemented and followed up in accordance with policy management methods.
For fiscal 2007, we have set out a companywide quality policy based on striving toeliminate all defects through “DAN-TOTSU(unrivalled) quality activities.” To put thispolicy into practice, we are promoting quality improvement activities in each division,
revolving primarily around preventive activities to eliminate defects and efforts to
cut costs resulting from in-house failings.
We are also implementing a range ofbottom-up activities, including FR proposal
and QC Circle activities.
Named after “F” for Furukawa Electricand “R” for renewal, reform and rationalization, FR proposal activities involve employees submitting ideas on how to improve op-

Progress with Quality
Improvement Activities

erations. Proposals are then implemented
and improvements made in an effort tostrengthen the company’s underlying structure. Improvement activities are positioned
as one of the day-to-day activities carriedout directly by each division and continue
to yield substantial results each year.
By way of ongoing improvements on the
shop floor, we implement small group-based
QC Circle activities involving all employees. QC Circle activities include efforts toimprove yield from the production process
and increase efficiency. They prove highly
effective and also help motivate the employ-ees involved. We hold debriefing sessions
at individual works and on a companywide
basis to report back on the results of activities. QC Circle debriefing sessions havebeen held on an increasingly grand scale
in recent years, with even representatives
from overseas subsidiaries attending.

The Flow of Companywide Quality
Control Policy
Fiscal 2007 companywide
quality control policy

Eliminating all defects through“DAN-TOTSU (unrivalled) quality activities”• Prevention of defects through preemptive QC activities• Honest onsite implementation based on real products
and real situations

Preventive activities to eliminate defects
Reciprocal audits, new product audits,change management
Efforts to cut costs resulting from in-house failings

QC Circle presentation meeting

Proposal and Circle activities
FR proposal activities, QC circle activities

Customer Feedback

As part of the ongoing range of quality
improvement activities we are currently undertaking, we have managed to significantly
reduce customer complaints. We have successfully reduced complaints to 28% of levels in fiscal 2001 (as of fiscal 2006) and arereceiving glowing feedback from our customers. In an effort to address newly emerging
customer needs, we are making further quality improvements and promoting activities
geared towards eliminating defects through“DAN-TOTSU (unrivalled) quality activities.”

To respond to an array of increasingly
sophisticated, diverse and complex customer needs, Furukawa Electric combines
a wide range of technology, products, ser-vices and expertise to help its customers
to generate value. Our efforts have beenhighly commended by our customers to
date.

Commendations from Customers in Fiscal 2006
(In no particular order)Award

Customer (full titles omitted)

NTT West President’s Award

Nippon Telegraph and Telephone West Corporation

NTT East/West Procurement and Supply Center
Director’s Award

Nippon Telegraph and Telephone East Corporation

Superior Quality Supplier Award

Mitsubishi Electric Corporation

Cost Improvement Award

Toyota Auto Body Co., Ltd.

Customer Complaints (fiscal 2001 = 100)

Best Partner Award

Suzuki Motor Corporation

100

Supplier Performance Award

American Honda (USA)Aoki Katashi Best Technology Award

Japan Society of Polymer Processing

100

80

Nippon Telegraph and Telephone West Corporation

73

60
47

40

42
35
28

20
0

2001

2002

2003

2004

2005

2006

(Fiscalyear)

28

Social Performance

Relations with our Shareholders and Investors
Based on two-way communication with our shareholders and investors, we engage in IR (investor relations) activities inan effort to contribute to society and help enhance our value as a company. We set out specific objectives for sustainablegrowth in March 2006 in the form of our 2006-2009 Medium-Term Business Plan: Innovation 09 and have since started
to implement a range of measures designed to meet the targets outlined therein.

Information Disclosure Policy and IR Framework
The Furukawa Electric Group Action
Guidelines state that we will “maintainand improve upon solid, friendly relationships with all of our stakeholders.”
Our Internal Regulations on the Timely

Disclosure of Corporate Information
meanwhile set out a framework for thedisclosure of appropriate information at
the appropriate time.
All IR activities are overseen by the

Chief Financial Officer (CFO) and aremanaged by the Investor & Public Relations Unit of the Corporate Strategy Planning Department.

Relations with Institutional Investors and Securities Analysts
In addition to holding management
briefings (covering interim and year-end
results and medium-term plans) for institutional investors and securities analysts,
both domestic and international, we actively organize meetings all year round, withthe exception of the quiet period prior tothe close of accounts. Through briefings,
visits from overseas investors and otheractivities, we engaged in communication
with a total of 799 institutional investors
and securities analysts over the course of
fiscal 2006. As of the end of March 2007,
the percentage of the company shares
held by overseas investors stood at 26.4%.

Main IR Activities in 2006
January
February Third quarter earnings announced
March Medium-term business plan unveiled
April Visit from European and US investors
May Annual earnings announced
June General Shareholders Meeting
July
August First quarter earnings announced
September Visit from Asian investors; US conference
OctoberNovember Interim earnings announced; briefing forindividual investors

End of year briefing session

December

Relations with Individual Investors
In fiscal 2006, we took part in a corporate research seminar sponsored by
the Nagoya Stock Exchange, as part ofwhich we gave business presentations
to a total of 240 individual investors andsales staff from securities firms. We havealso established a framework to provide
important disclosure information as andwhen necessary, including posting thelatest information on our website (http://
www.furukawa.co.jp/zaimu/index.html)
and running a registration-based email
IR newsletter service (registration for ouremail IR newsletter service can be com-pleted via our website). As of the end of
March 2007, we had a total of 65,126 individual shareholders, accounting for 25.3%
of company shares.

Trends in Shareholder Distribution
(%)
100
80

2.7
21.0

5.0
26.4

7.2
7.2

60

47.3

36.1

21.8

25.3

March 31, 2006

March 31, 200740

Securities firms
Overseas companies
Domestic companies
Financial institutions
Individuals

20
0

An individual presentation

Returning Profits to Shareholders
In addition to operating a stable dividend policy, we also aim to pay out dividends in line with the medium- to longterm growth strategy set out under our
2006-2009 Medium-Term Business Plan:

29

Innovation 09.
In the fiscal year ended on March 31,
2007, we paid out interim dividends of 3.0
yen per share and end of year dividendsof 3.5 yen per share, making a total of 6.5

yen per share. This represented a yearon-year dividend increase of 3.5 yen per
share over the course of the fiscal year
ended on March 31, 2007.

Relations with our SuppliersWorking Together with our Suppliers
As part of our efforts to contribute tosociety and the environment through ourbusiness activities, including developing
and manufacturing products with minimal environmental impact and reducing
the volume of industrial waste generated,
it is essential to ensure that our suppliers
understand our purchasing policy for materials and supplies. We also make every
effort to secure additional support andcooperation from our suppliers.
In addition to promoting green procurement (see relevant section) toachieve this, we also organized our first
Supplier Meeting in March 2007. The

Furukawa
Electric
Purchasing
Policy(outline)

event was aimed at establishing stronger
relationships and was attended by roughly 200 of our suppliers. We used this as
an opportunity to explain matters such as
our purchasing policy and aspects of our
Action Guidelines for Company Officials
and Employees and Environmental Policy relating to the procurement of materials and supplies and to ask our suppliers
to promote environmental preservation,
consideration for human rights and safety and compliance. We intend to continue
to hold such meetings in the future in aneffort to establish even closer communication with our suppliers.

Supplier Meetingl We will establish strategic relationships with suppliers toensure optimum purchasingl We will guarantee the reliability and safety of materials andsupplies and their steady procurementl We will employ purchasing methods closely linked to
production methods
l We will implement global procurementl We will engage in green procurement and enforce compliance

Promoting Compliance in Relation to Procurement
Furukawa Electric promotes compliance in relation to the procurement ofmaterials and supplies in accordancewith the Furukawa Electric Group Action
Guidelines.
Whereas we have always taken partin external workshops and organized inhouse study sessions on legislation suchas the Act Against Delay in Payment of

Subcontract Proceeds, Etc. to Subcontractors and the Waste Management andPublic Cleansing Law, in view of our increasing use of overseas procurement inrecent years, we plan to organize workshops and study sessions on Foreign Exchange and Foreign Trade Act, Customs
and other laws as well in the future, as
and when necessary. In addition to mak-ing every effort to maintain open, fairrelationships with domestic and overseas clients, we also intend to pay close
attention to all forms of data provided
to ensure that they are not used for any
improper purposes and to maintain andimprove levels of compliance as part ofall procurement operations on behalf of
the Furukawa Electric Group.

30

Social Performance

Relations with our Employees
Relations with our Employees
Personnel Management Policy
The Furukawa Electric Group Action
Guidelines state that we will “respect human rights, cultures and traditions as amember of the international community”
and that we will “create a company inwhich employees can feel a sense of reward, ease and fulfillment.” This encapsulates the basic approach that we employ
with regard to personnel management.
Above all, we believe that it is absolutely

crucial to establish safe, healthy working
environments and workplaces that are
free from irrational discrimination andharassment to get the most out of theabilities that our employees have to offer.
Based on these foundations, we are aiming to devise a personnel system that will
harness employees’ various abilities andindividual personalities and bring out
their creativity, through initiatives suchas equal treatment irrespective of age or
gender and support schemes to enable
employees to achieve a work-life balance.
By combining all of our employees’ individual abilities, creating jobs suited tocurrent needs and providing safe products, we are striving to contribute tosociety and create a company that both
motivates its employees and fills themwith pride.

Outline of Furukawa Electric’s Personnel System
Skill development
l OJT
l OFF-JT						l Self-development

Global Business Leader training
Graded training
Education in specialist expertise
External training schemes
Support for distance learning andEnglish conversation classes

Remuneration
Recruitment and assignmentl New graduates, mid-year
recruitmentl Job rotationl Career advancement interview
system

Impartial evaluationl Evaluation of performance,
attitude and contributionl Management-by-objective
systemMonetary remuneration

Non-monetary remunerationl Award schemes

Benefits and welfare

Diverse work pattern and work-life balance support schemes

Health, safety, fairness and compliance31

l Pension schemel Company housing andaccommodationl Savings and property supportl Shareholders association, etc.

Diverse Work Patterns and Work-Life Balance Support Initiatives
In addition to operating a number ofschemes in support of employees’ diverse working patterns, we also continue
to review areas such as labor management and personnel systems to enable
them to reflect a similar approach in lightof Japan’s dwindling birth rate and aging
society. As well as striving to enhance our
employees’ working lives, we also work
together with our employees to actively
support their personal lifestyles and help
them stay in good health through educational and other initiatives.
Activities undertaken during fiscal
2006 included reviewing our post-retirement reemployment scheme and reforming our maternity/paternity leave system.
In terms of action plans for the future, as
required of all regular business operatorsin accordance with the Law for Measures
to Support the Development of the Next
Generation, we have implemented themeasures set out in our first phase plan(fiscal 2005-2006) according to scheduleand have been accredited as a company
that is actively providing support for thedevelopment of the next generation. As

it stands, we have finished compiling andsubmitting our second phase action plan,running from fiscal 2007, and are now entering the implementation stages.

Diverse Work Pattern and Work-Life Balance Support Schemes
Scheme/educational
initiative
Flexible working hours
Annual paid leave
Consecutive leave
Half-day paid leave
Congratulatory or
condolence leave
Carried-over leave
Maternity/paternity
leave (and reduced
working hours)
Nursing care leave (andreduced working hours)
Reemployment after
retirement
Retirement seminars
Middle-age seminars

Purpose and details
We provide lifestyle support to enable employees to work efficiently in line with business demandand strike a work-life balance.
We provide employees with up to 25 days annual paid leave (e.g. if an employee has been with thecompany for 11 years or longer)
We allow all employees to take three days consecutive leave every year providing that it does notexceed their annual paid leave entitlement. Employees can obtain an additional two days every five
years (up to a maximum of five consecutive days).
Paid leave may be taken in half-day units to enable employees to take care of minor personalerrands on week days.
We operate a congratulatory and condolence leave scheme whereby, for example, an employee cantake five days paid leave if their wife gives birth to a child.
Up to ten days of annual paid leave can be carried over, for up to five years, and can be used if an
employee is ill or providing nursing care.
We provide support over and above statutory requirements to enable employees to strike a work-lifebalance, including partial pay during maternity/paternity leave and the option for employees to work
reduced hours thereafter until their child reaches elementary school age.
We provide support over and above statutory requirements to enable employees to strike a work-lifebalance, including enabling employees to take nursing care leave (or the option of working reduced
hours) for up to a year at partial pay.
We operate a reemployment scheme for any employees aged 60 or over who are in good health andwish to remain in work. The duration of reemployment is being increased in phases, with employees
currently entitled to be reemployed up to the age of 65 (in response to revised legislation in 2006).
We jointly organize seminars every year to provide support to help middle-aged and older union
members (those aged 50 or older as a rule) to make the most of their time in work and plan for theirlife after retirement.
We jointly organize seminars every year to provide individual support to help middle-aged employees(those aged 40 or older as a rule) to stay fit and healthy, including measures to prevent illness.

Recruitment
The table on the right shows figures
for the number of employees recruited
over the last five years. As we continue toexpand our business in line with society’s
needs, we intend to continue to secure
personnel to act as the driving force en-abling us to sustain and develop our business in the future, particularly enthusiastic personnel who are willing to take on
new challenges.

Recruitment Figures
Fiscal year
2003
New graduates
51(Female new
2graduates)
Mid-year recruits
1
Clerical staff
0
Professional staff
0(People)

2004
34

2005
32

2006
53

2007
71

3

2

6

8

0
1
0

1
2
0

10
0
47

Unknown
Unknown

29* Figures for fiscal 2007 refer to numbers of new graduate recruits.

Employment for People with Disabilities
Although we are yet to reach the statutory target of 1.8% rate of employment
for people with disabilities, in 2004 we set
up Furukawa New Leaf, a special subsidiary to actively promote employment forpeople with disabilities. Furukawa New
Leaf is subcontracted to handle cleaning
operations at our Hiratsuka Works andhas a workforce that includes ten employees with disabilities. There are plans

however to extend operations to our
Chiba Works as well in fiscal 2007 and to
expand employment further. By promoting employment for people with disabilities at Furukawa Electric and throughour special subsidiary, we are aiming tomeet statutory employment targets overthe coming years.

Number of Employees with Disabilities(as of June 1 each year)
(%)

1.6
1.5
1.4
1.3
1.2
1.1
1.0

2000

2001

2002

2003

2004

2005

2006 (Fiscal
Year)* In April 2004, the exclusion rate set out when the rate of employment
was calculated was lowered, reducing the rate of employment.

32

Social Performance

Relations with our Employees

Employee Assignment, Evaluation and Treatment
We make every effort to assign employees and place them in specific positions based on their individual motivation and abilities based on the concept ofequal opportunities. As part of such efforts, we operate a range of consultation

schemes and give employees opportunities to reflect on their career goals.
In terms of employee evaluation andtreatment, we have introduced a personnel incentive scheme to enable employees to be evaluated and treated fairly de-pending on the abilities that they display
and their performance. We are also training managers in performance evaluation
and are working on ways for improving
the way in which the system is run.

ployees to independently develop theirskills by providing opportunities such as
training, distance learning and support tohelp them obtain qualifications.
In fiscal 2006, we launched the Global
Business Leader training program to aid
the development of personnel capableof handling business development andmaking a greater contribution on a global

scale. We are also focusing on training designed to improve manufacturing capabilities and compliance-related education.
On other fronts, we organize human rights education (training for new
recruits or employees being promoted
to management positions, etc.) to raiseawareness of the importance of respecting human rights.

Education and Training
We believe that our strength as acompany stems from the synergy of theabilities of each and every one of our employees and that their abilities improve ona practical level through their day to day
work duties.
In addition to giving individuals the
chance to grow and develop through theirwork, we also encourage enthusiastic em-

Safety Efforts
Safety Record
There were four accidents that resulted in the cessation of work in fiscal 2006,
making for a frequency rate of 0.52.

Frequency Rate for the Suspension of Operations
1.2
1.1
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0

Furukawa Electric
Overall manufacturingindustry

0.54

0.47
0.36
0.09
2000

2001

0.3

2002

2003

0.52
0.25

2004

2005

2006

(Fiscalyear)

Companywide Priority Safety Activities
We set out companywide priority safety targets as part of our Companywide Safety and Health Control Guidelines for fiscal 2006 andhave implemented priority safety activities accordingly.

Companywide
Priority Safety
Activities

1. Promotion of operational standardization to eradicate unsafe conduct (II)Establishing correct operational procedures and skills based on three-pronged operational standards

2. Comprehensive safety and health education for transferred personnel andtemporary workers (II)Promoting OJT via a safety and health operation follow-up system

33

Progress with Safety Efforts
We are promoting safety efforts aimed at eliminating unsafe conduct through preemptive safety measures and foreseeing problems
rather than preventing them from reoccurring.
(1) Promoting operational standardization and improved overall equipment safetyvidual safety interviews and skill assessments, focusing particularly on employees with less than one
year of work experience.

In addition to promoting operational standardization for the second fiscal year in a row, incorporating factors such as the instincts and techniques
required to effectively carry out operations fromthe three-pronged standpoint of safety, quality andproductivity and decision making criteria, we arealso continuing to improve the overall safety of individual facilities and equipment.

(3) Auditing compliance with laws andregulations(2) Safety and health education fortransferred personnel and temporary workers

We actively engage in activities designed to improve working environments, including encouraging
all employees to identify residual risks, improving
unsafe operations based on risk assessments andrepairing malfunctioning equipment.

We continue to organize OJT-based education
through the regular monitoring of operations, indi-(4) “Hiyari-Hatto” activities

Forklift truck safety competition

Healthcare for Employees
Working Long Hours

Mental Health Education
employees during the period from fiscal 2002 to 2004. During fiscal 2005 and2006, we have been offering an advanced
course, incorporating case studies tohelp equip supervising managers withpractical skills.

Promoting Separate Smoking Areas
Smoking Rate (Male Employees)
(%)

60
50

Smoking rate

In accordance with a 2003 notification“Concerning the Guidelines for Measures
on Smoking in the Workplace,” issued by
the Director-General of the Labor Standards Bureau, we designated more than
70 smoking rooms in fiscal 2004 in an effort to isolate smoking areas. As a result,the percentage of smokers amongst male
employees on a companywide basis fell
from 53.3% in fiscal 2002 to 44.5% by fiscal 2006. We intend to continue to makeevery effort to prevent passive smoking
in the future, as well as actively promoting nonsmoking.

We held a companywide competition, also open
to affiliated companies, in which employees tested
their safe, steady forklift truck driving skills against
one another.

We have conducted internal audits based on
qualifications and assignments, as part of our safety
management structure, and on checklists relating tohandling chemical substances and heavy manuallabor, as part of job-specific management.

Health Initiatives
We have continued to promote companywide mental health measures eversince 2002 in accordance with the Ministry of Health, Labor and Welfare’s“Guidelines for Promoting Mental HealthCare in Enterprises.” We provided basic
mental health education sessions for all(5) Forklift truck safety competition

53.3

52.7

48.3

40

45.7

44.5

30
20
10
0

2002

2003

2004

2005

2006

(Fiscalyear)

In line with the Labor Standards Bureau’sguidelines, “Measures to be Taken by Employers to Prevent Health Impairment Due
to Overwork,” we are focusing on efforts
to ensure that any of our employees working long hours stay in good health, throughmeasures such as (1) enforcing strict work
restrictions based on the results of medical
examinations and (2) operating a consultation system whereby employees working
long hours are seen by a medical officer.

Responding to AsbestosRelated Health Issues
During the period from fiscal 2005 to༛ᾍ₸㧔↵ᕈ㧕
2006, we have once again investigatedworkplaces that have previously been used
to handle asbestos products and organizedspecial medical examinations for all relevant
60
53.3
52.7notices
employees. We have also sent
out
48.3
50
urging retired employees
who worked at
the relevant sites to 40
undergo special medical examinations. Although
no products
30
containing asbestos are handled at any of20
our workplaces at present, illnesses causedby asbestos tend to 10
take a long time, up to
20 or 30 years, to develop.
We will 2003
therefore
0
2004
2002
continue to undertake such activities
ᐕᐲ andmonitor all relevant employees.

45.7

44.5

2005

2006

34

Social Performance

Involvement with Local Communities
The Furukawa Electric Group fulfills its responsibilities as a member of society through activities such as disaster relief
support and exchanges with the local community.

Support and Assistance
We provide support and assistance forvictims of natural disasters and throughenvironmental foundations and othersuch organizations.

Name
Donation Campaign for theIndonesian Earthquake Victims
Keidanren Nature Conservation
Fund
Chiba Environmental
Restoration Fund

Details of support/
assistance
1 million yen
1 million yen
147,000 yen* We are also involved in and provide support for soil pollution funds and various
other environmental organizations. In
other areas, we are engaged in activities
such as providing support for welfare
facilities and to enable people with disabilities to be a part of and reintegratethemselves into society.

Awards from Outside Sources
Aoki Katashi Best Technology Award
We received the Aoki Katashi BestTechnology Award from the Japan Society of Polymer Processing for the development of micro-cellular foam PET sheets
and their use in light-reflecting sheets.
We became the first company in theworld to apply micro-cellular foam technology to PET resin and successfully
achieve industrial production. Due to theoutstanding optical reflective propertiesof the micro-cellular PET foam developed as a result, we have expanded ourbusiness operations into areas such as
electrical billboards made using MCPET

and reflective sheets for backlighting
LCD TVs. Our efforts were acclaimed asa major breakthrough in terms of practical application and a remarkable achievement in the field of polymer processing.
JSAI Invention Awards:
Achievement AwardAt the 32nd JSAI Invention Awards,
Mitsuo Inoue from the Technical Department of Asahi Electric Works received
an Achievement Award for inventing(patenting) a method of minimizing galloping vibration by improving the way inwhich loose spacers grip power transmission lines. When snow or ice form along a
conductor, strong winds cause the snowor ice to act like an airfoil and can cause
the conductor to experience a type of vibration known as galloping. To prevent
this from happening, Inoue came up with
the idea of fitting a rotating mechanism
to the gripping part of spacers (devices

Local Community Clean-up Activities
We carry out clean-up activities in andaround the local communities in the vicinity of each of our bases, as well as nearby
coastal, riverside and other locations.
In the district where our Head Office islocated, we also take part in community
activities in areas such as Otemachi andMarunouchi and collect garbage along
local streets once a month as part of ourefforts to keep local environments clean.

Cleanup activities at individual works and companies

35

used to maintain spaces between cables
in multi-conductor transmission lines)
and limiting the angle of rotation, thereby minimizing snow or ice buildup andsubsequent vibrations. His invention has
been adopted by six power companies todate.

Communicating with the Community
l We invited students and teachers from local elementary and junior high schools to come and take a tour of plants at our works and affiliated companies. We also invited employees’ families to take a tour of our Chiba Works.

A family tour (Chiba Works)

A tour for social studies teachers(Furukawa Circuit Foil)

A tour for elementary school students (Nippon Foil Mfg)

l We play an active part in community events in the local areas where our works and affiliated companies are located. We try to establish involvement with the local community through initiatives such as opening up recreational areas and other facilities to local people on holidays and inviting
employees’ families and local people to take part in festivals and other events held on company premises.

Nikko Waraku Odori Dance (Nikko Works)

Summer Festival (Chiba Works)

Assisting with Nikko Volunteer Festival(Furukawa Circuit Foil)

l At our Hiratsuka Works, we take part in the local Environmental Fair, an event organized by Hiratsuka City and the Forum for Environmental Symbiosis
Corporations, in an effort to inform local residents about our environmental initiatives.

Exhibiting at the Hiratsuka Environmental Fair

36

Social Performance

Social Contribution Activities at
Individual Works

Chiba Works

Toru Kumabe
Manager, Chiba Works

Nikko Works

Hiroyuki Kamishiro
Manager, Nikko Works

A Beacon Sending Out an Environmental Message
In an effort to improve the landscape and create a tranquil environment around the Chiba Works, we have set up a Beautiful
Natural Environment Committee. Its activities include MIC (Minnade Issho-ni Clean (everyone cleaning together)) cleanup activities
involving all employees, support for environmental patrols and efforts to improve green space management. Our aim is to send out
an environmental message through such activities, not only to ouronsite employees but also to our customers and local residents. I
encourage anyone to come and take a look at the results of ourhard work here at the Chiba Works. Having achieved our target ofzero emissions two years ago, once again thanks to the involvement of all of our employees, we went a step further and turned
our attention to the percentage of waste products recycled. We
have already achieved a recycling rate of 95% and are now work-

ing towards a target of at least 99%.
To contribute to and work in harmony with the local community, we are also actively involved in an ongoing series of initiatives
such as environmental education as part of plant tours for local
elementary school children and employees’ families, helping toraise funds for
the Chiba Environmental Restoration Fundand taking partin the Yawata
Seaside Festival.

Acting in Accordance with our One-Phrase Environmental Declaration
There are no borders when it comes to the environment. It is
my hope that we can all act in an environmentally sustainable
manner both at work and at home based on a universal acceptance of the fact that our actions have the same impact no matter
where we are. In accordance with our “one-phrase environmental declaration” based on the notion that causing pollution is thesame whether at work or at home, each and every Nikko employee
carries around an environmental policy card outlining their own
personal declarations.
Whereas we have previously taken waste products offsite forpermanent disposal over the course of our 100 years in business, westarted waste recovery and processing work in 2003. In June 2007
we completed the relevant work after a period of five years. As ademonstration of our gratitude to everyone in the local community

for their support over the years, we have planted grass seeds onthe former work site to restore it to its natural state. My personal
one-phrase environmental declaration is to “learn from the lessons of the past and to strive to create an environmentally friendly
works.”

Hiratsuka Works Promoting the 3Rs and Striving to Become an Eco-Works

Toshio Kikuta
Manager, Hiratsuka Works

37

Thanks to our efforts to carefully sort waste and scout out
companies that reuse materials, we managed to achieve our zero
emissions target in fiscal 2006. Having reached a recycling rate of
97.6%, we intend to pull together to promote the 3Rs across allplant and research operations to enable us to run at the target rateof 99.1% by fiscal 2009. As you can see from the photograph, wehave started to chop up fallen or removed branches, which had
previously been thrown away as industrial waste, into woodchips
and lay them around the bases of trees to help prevent weeds andminimize the heat island effect.
In terms of conserving energy, in addition to using climbing
plants as sunshields, we have also created a sweet potato garden
on the roof of our network building in an attempt to help lower
rooftop temperatures during the summer months. As an added bonus, we may even be able to hold a yaki-imo baked potato party

when fall comes!
Half of the west side of our magnet wire plant has now been
demolished, creating a wide open space to the left hand side of themain gate. We plan to continue to push ahead with refining plans,revolving largely around the reuse of vacant land, and to complete
development
work by 2009
to mark the50th anniversary of theworks’ opening.

Manager, Mie Works

Over the course of the ten years since the Mie Works was granted ISO
14001 certification in November 1998, we have engaged in a wide range
of environmental conservative activities and have achieved significant
reductions in paper, waste, power consumption, chemical substances, atmospheric pollutants, water pollutants and other substances causing environmental impact, taking our sales figures into account. For example, wehave achieved a 23% reduction in the volume of paper purchased, a 61%
reduction in the volume of outsourced industrial waste disposal and a 51%
reduction in specific energy consumption compared to levels in fiscal 1998.
In an effort to step up our environmental activities even further, we havealso continued to engage in activities designed to help protect the environment by addressing improvements relating to positive environmental activities as part of our general business operations. As of fiscal 2006, we havestarted to put the framework in place for an environmental system that will
include running environmental impact assessments on our general business
operations. In terms of specifics, we are striving to conserve resources andenergy, (including cutting CO2 emissions) through measures such as reduc-ing or reusing raw materials, improving product yield and reducing defectrates, and make a contribution through measures such as reducing waste.
In addition to continuing to make every effort to reduce the essential environmental impact of the Mie Works, we plan to expand activities designed
to help preserve the environment through improvements in our generalbusiness operations in the future.
Reductions Compared to Fiscal 1998 (%) and Sales Figures
80
60
40
20
0
-20
-40
-60
-80

Sales

Nobuo Arai

A Turning Point in our Environmental Preservation Activities

Reduction (%)

Mie Works

Electricity
Industrial waste
Paper
Sales

1998

1999

2000

2001

2002

2003

2004

2005

(Fiscal2006 year)

Osaka Works Contributing to Involvement with the Local Community

Tatsuo Yoshisue
Manager, Osaka Works

The grounds of the Osaka Works come to life with the voices of
excited children at the weekend. Our employees play an active rolein training sessions for youth baseball and soccer teams, serving
as their managers or coaches. We also get parents coming onto
company grounds to watch their children play, always with serious
expressions. Our policy of opening up our grounds in this manneris welcomed by the local community as it helps with the development of well-rounded human resources.
In October, we provide the use of our grounds for the annual softball tournament hosted by the Amagasaki Employers’
Association, of which we are a member. Over five Sundays, withfour matches played each day, a total of around 100 participants
give their all, whether playing or just offering their support. All of
the companies that take part, large or small, do their bit to help

strengthen the bonds of friendship between member companies
belonging to the association.
We will continue to engage in activities designed to contributeto the local community in the future as we strive to win a place inthe hearts of local
people.

Yokohama Works Establishing Ourselves as a Works that Puts Environmental Preservation First

Hisaharu Yanagawa
Manager, Yokohama WorksIn April 2006, the Yokohama R & D Laboratories were incorporated into the Yokohama Works, with a newly added admin divisionalso commencing full-scale EMS activities from 2007 onwards. In
addition to raising divisional standards in view of our newly added
EMS activities, we intend to continue to focus on environmentallyfriendly research and development over the course of 2007 on apriority basis, as we have done up to now. Our research and development division is actively engaged in environmentally friendly research and development, including support initiatives to reduce thecontent of harmful substances in our products, efforts to minimize
the usage of harmful substances within the research and development process and making full use of DfE to enable environmentallyfriendly design from the design stages onwards. Our admin division
meanwhile is addressing priority issues in the form of saving energy,

reducing waste and reducing consumption of paper.
We also engage in a range of initiatives that take the local environment into consideration, including offsite environmental patrols
during environmental months and cleanup activities in the vicinity ofour premises. We intend to continue to make the most of what the
Yokohama Works
has to offer in the
future to establish ourselves asa works that puts
environmental
preservation first.

38

Initiatives at Affiliated Companies

FCM Co., Ltd.
Head Office:Osaka Works:
Kyoto Works:
Toyama Works:
Workforce:
Website:Inquiries:

History
Established in 1949, FCM started out specializing in the drawing and sale of copper wire.
In 1955, we started to branch out into metallic
plating for electronic components. We currently
have three production bases located in Osaka,
Toyama (metallic plating work) and Kyoto (drawing wire work).
As part of our recent efforts to develop
lead-free products, we have patented a systemdesigned to apply Sn plating on top of tin/copper binary alloy plating and are working on
expanding sales of environmentally friendly tin/silver/copper ternary alloy plating. In addition tometallic plating on metal, we are also engaged in
the chemical processing of non-metal substancessuch as films.
On February 28, 2007, we listed our stockon the Hercules Market of the Osaka Securities
Exchange.

Efforts for Environmental
Preservation
We regard the protection of the environment
as a universal issue that is of the utmost importance and have therefore set out “appreciationof Planet Earth” as our underlying motto. Our basic environmental philosophy is to take environmental preservation into consideration in every
aspect of our activities as a company.
We continue to work on initiatives such asenvironmentally friendly product development
and production activities that are friendly to both
the global and local environments.
We have established quality and environmental management systems and have obtained
ISO 9001 and ISO 14001 certification at each of
our bases. We also invest a great deal into analysis instruments in an effort to closely monitor
environmental issues.

39

8-36 Kamiji 3-chome, Higashinari-ku, Osaka, Osaka prefecture
8-36 Kamiji 3-chome, Higashinari-ku, Osaka, Osaka prefecture
100 Minami Karato-cho, Kamitoba, Minami-ku, Kyoto, Kyoto prefecture
3-6 Yasuuchi 2-chome, Yatsuo-machi, Toyama, Toyama prefecture
232 employees
http://www.fc-m.co.jp/
Quality Assurance Department System Management Team
Tel: +81-6-6975-1321 Fax: +81-6-6976- 0174

ISO 14001
Certified October 5, 2001
ISO 9001
Certified September 10, 1999
Development of tin/silver/copper ternary
alloy plating
Using our unique manufacturing techniques,
we have developed a plating method capableof applying a stable tin/silver/copper ternarylayer based on an electrolytic plating process.
The resulting plating is lead-free, environmentally friendly, has a superior balance of properties
compared to other lead-free solder plating andoffers the same level of performance as regular(9:1 tin:lead) lead solder (in terms of suppressing whiskering). With a melting point roughly
20°C lower than other lead-free plating (around
215°C), it can also help our customers reduce
their overall energy consumption. Thanks to improved productivity, it is also a low cost method,coming in approximately 80% cheaper than gold
flash and roughly 30% cheaper than tin reflow(FCM comparisons).

Consideration for the local community
Our Kyoto and Osaka Works both have plants
located in semi-industrial areas. We therefore
measure noise levels in the areas surrounding
company premises at night and impose company
restrictions that are even stricter than statutory
noise levels. In an effort to preserve the local
environment and coexist in harmony with the local community, we also conduct regular cleanup
activities in the vicinity of all company premises,
an initiative in which other local companies aregradually starting to participate.
Wastewater management
Our metallic plating division is fully equippedwith its own wastewater treatment facilities
to process cyanogen, fluorine and other compounds. Our Osaka and Toyama Works also haveunderground reserve pits that are large enoughto accommodate almost 24 hours worth ofwastewater. Maintenance activities are carriedout on a daily basis to ensure that any changes
are dealt with promptly.

Ni
Sn-Ag-Cu

Material
Sn-Ag-Cu

Sn-Ag-Cu
Sn100

Sn100

Ni
Sn100

Material

Environmental analytical instruments
We have installed some of the best analytical instruments available in Japan, including ICP,
EDX, GC, FIB, EPMA, and ULTRA ESCA, and run
them at more or less full capacity on a daily basis in an effort to protect the environment andimprove quality levels. The reasoning behind thisis that it enables us to pinpoint the source of irregularities as soon as they occur and take anynecessary preventive measures.

Wastewater treatment facilities

Furukawa Electric Industrial Cable Co., Ltd.
Head Office:Kofu Plant:
Hokuriku Plant:
Tochigi Plant:
Hiratsuka Plant:
Kyushu Plant:
Website:Workforce:
Inquiries:

History
Originating from Furukawa Industrial Cable
Co., Ltd., which was established via a merger
between Sanwa Electric Wire Manufacturing Co.,
Ltd. and Chiyoda Electric Wire Co., Ltd. in 2001,
Furukawa Electric Industrial Cable was integrated with Furukawa Electric’s Hiratsuka insulation
wire and cable plant in 2005 and The Kyushu Furukawa Electric Co., Ltd. in 2006. As a result, we
now play a central role in the Furukawa ElectricGroup’s insulation wire and cable operations at
our five plants in Kofu, Hokuriku, Tochigi, Hiratsuka and Kyushu.
As our business has expanded, we have built
up a wide range of products. We aim to provide
products that offer maximum customer satisfaction, with our core products revolving aroundelectric wire and cables for use in construction
and industry, for ships and railway vehicles, forindustrial and electrical machinery and rubber
mold products.

Efforts for Environmental
Preservation
In 2003, while still using the name Furukawa
Industrial Cable, we obtained ISO 14001 certification at our three plants in Kofu, Hokuriku andTochigi. We have obtained expanded certificationin 2007 and added our Kyushu Plant to the list.
Our Hiratsuka Plant was also certified in 2000 aspart of Furukawa Electric’s Hiratsuka Works.
In an effort to prevent the environmental
impact of our business activities from increasing,
we have set out the following companywide environmental policies.
(1) We will save energy and reduce CO2 emissions to help prevent global warming(2) We will reduce and recycle waste to minimize
the environmental impact of our activities

48-10 Higashi-Nippori 6-chome, Arakawa-ku, Tokyo
15-1 Arakawa 2-chome, Kofu, Yamanashi prefecture19-2 Wakabadai Shika-machi, Hakui-gun, Ishikawa prefecture
1601-8 Oaza-Tadokoro, Shioya-machi, Shioya-gun, Tochigi prefecture
1-9 Higashi Yawata 5-chome, Hiratsuka, Kanagawa prefecture
1-8 Shinmoji, Moji-ku, Kitakyushu, Fukuoka prefecture
http://www.feic.co.jp/english/
480 employees
EMS Promotion Secretariat
Tel: +81-55-277-4860 Fax: +81-55-277-2654(3) We will reduce and prohibit the use of harmful substances to prevent the local environment from becoming polluted(4) We will establish and maintain green spaces
within our premises(5) We will develop and provide environmentallyfriendly products
We carry out all of our environmental preservation activities based on the above priority
objectives.

Priority Measures(1) As part of our efforts to reduce waste, at our
Kofu Plant we are working on reducing wood
cuttings and have been reusing slats fromdrums as packaging for electric wires since2005 to reduce waste. Although we are still
only reusing a fraction of our overall emissions, we are nonetheless achieving results
slowly but surely.
(2) At our Hokuriku Plant, we have been planting Japanese red pines onsite as part of agreenery campaign. The pines are growing
well, with highly experienced senior local human resources taking care of trimming andupkeep on our behalf. In addition to bringing
more greenery into the environment, this also
ensures that such activities contribute to the
local community.
(3) As airborne pollution caused by chemical
substances (gases) emitted by the materials
contained in clean room facilities has a major
impact on product quality, materials with low
gas emissions are now required to be used.
In terms of electric wires and cables too, thevinyl plasticizing agents given off by vinyl
covering cables have a similarly detrimental effect on products, with flame-resistantpolyethylene covering Eco-Cable products

also producing small amounts of harmfulgas. We have developed and are now providing our customers with low-emission clean
room cables that produce one tenth or lessthe amount of harmful gas produced by EcoCables.

Amount of Wood Off-Cuts Generated andthe Reuse of Slats from Wooden Drums(Volume generated: tons)

250
Amount of wood off-cuts
Amount reused

200
150
100
50
0

2000

2001

2002

2003

2004

2005

(Fiscal2006 year)

Making use of senior human resources to trim pine trees
at our Hokuriku Plant.

40

Initiatives at Affiliated Companies

Furukawa Circuit Foil Co., Ltd.

Efforts for Environmental
Preservation
We manufacture electrolytic copper foil via aprocess of electroplating, which has a negative impact on the environment as a result of factors suchas massive electrical energy consumption and thegeneration of industrial waste. With this in mind, weare making every effort to use resources and energy
efficiently and to reduce waste to help preserve theenvironment. As we face additional risks stemmingfrom the use of large quantities of electrolyte solution, chemicals and other liquids, we also engage ina range of environmental improvement activities in
conjunction with our CSR initiatives in an effort tooffer local residents continual peace of mind.
With regard to certification, we obtained ISO
14001 in November 2003 and transferred over to
ISO 14001:2004 in July 2005.

Priority Measures

41(2) Energy conservation
Our electroplating-based electrolytic copper foil
manufacturing activities are characterized by the
consumption of vast amounts of energy and the factthat we essentially operate 24 hours a day, 365 daysa year.
When operating along lines such as these, cogeneration facilities capable of both generating electricity and recovering exhaust heat energy once electricity has been converted into power can help savesignificant amounts of energy. We therefore installed
diesel-powered cogeneration facilities at our Imaichi
Plant in 2001 and at our East Plant in 2004. In addition to using steam recovered from exhaust heat,at our East Plant we have also installed absorption
refrigeration units as part of a system designed to use
exhaust heat for cooling purposes as well.
In the face of cost issues associated with risingoil prices, however, we were unfortunately repeatedly
forced to suspend our cogeneration facilities during
2006.
We have long since been actively engaged in energy conservation initiatives as a Type 1 DesignatedEnergy Management Factory in accordance with theEnergy Conservation Law and have improved specificenergy consumption to ensure that energy consumption does not increase to the same extent as production.

Although we have no effective projects remaining at present due to the suspension of our cogeneration facilities, we intend to continue to engage in
steady energy conservation activities on a continual
basis in the future.
Area of Products Sold and Specific
Energy Consumption
0.90

90,00080,0000.85

70,00060,0000.80

50,00040,0000.75

30,00020,0000.70

10,00002000 2001 2002 2003 2004 2005 2006

0.65

(Fiscal year)

Area of products sold (1,000m2)
Energy crude oil equivalent (kl)Specific energy consumption per area (l/m2)(3) Reducing waste
Our product sales area for 2006 increased by 12%compared to 2000, reflecting an expanded productrange. Nevertheless, we managed to reduce waste
emissions by one third compared to 2000 levels.
The principal measures that we have implemented to achieve such a reduction in waste have included
expanding water treatment facilities to reduce waste
alkali and waste acid and improving sorting capabilities for waste plastic and other materials to enable
selected materials to be sent for recycling.
In spite of an element of conflict with our efforts
to maintain and improve increasingly advanced levels of quality and performance in some respects, wenonetheless intend to continue to implement waste
reduction activities in the future.
Area of Products Sold and Waste Generated
90,00080,000Area of products sold (1,000 m2)
Waste generated (tons)

70,000

4,000

3,000

60,00050,0002,000

40,00030,000Waste generated(1) Compliance with the RoHS Directive andgreen procurement
First issued in Europe, one of the most environmentally advanced parts of the world, in February
2003, the Directive on the Restriction of the Use of
Certain Hazardous Substances in Electrical and Electronic Equipment (RoHS Directive) was reviewed inJuly 2006 to prohibit the inclusion of six substancesin products; lead, mercury, cadmium, hexavalent chro-mium, PBB and PBDE. The RoHS Directive represents
a set of key regulations in that it effectively imposes
the same restrictions on exports by any Japanesecompany wishing to export products to Europe. The
RoHS movement in Europe has had a knock-on effectthe world over.
As we supply our products to large numbers ofelectrical and electronic equipment manufacturers,
both in Japan and overseas, it is crucial that we havea chemical substance management system in place,covering not only in-house operations but also our
suppliers of raw materials and other items, to comply
with regulations such as these.
In addition to purchasing environmentallyfriendly products, including our long-standing efforts
to purchase recycled paper, we are therefore shifting
the focus of our green procurement initiatives to prioritize the establishment of a comprehensive systemof chemical substance supply chain management
covering everything from raw materials and supplies
through to our own products.

Specific energy consumption per area of products sold

Established in 1970, Furukawa Circuit Foil built
its first plant in Otorozawa in Imaichi City (which has
since merged with other municipalities to become
Nikko) in 1972, a second plant in 1980, a third plantin the Harigai area of the same city in 1986 and afourth plant in 2005. We plan to expand further andconstruct a fifth plant in fiscal 2007.
Having started out by manufacturing electrolytic
copper foil for use on printed circuit boards, we currently manufacture high-performance electrolytic
copper foil that is used in a variety of the state-ofthe-art electronic equipment, including high-density
multilayer circuit boards, flexible circuit boards, negative electrode collectors for lithium-ion batteries andelectromagnetic interference shielding materials forplasma displays. We expect to see growing demandacross a range of different fields in the future, notleast in terms of vehicles designed to minimize environmental impact.

Area of products sold and energy crude oil equivalent

History

601-2 Otorozawa, Nikko, Tochigi prefecture
601-2 Otorozawa, Nikko, Tochigi prefecture
1066-24 Harigai, Nikko, Tochigi prefecture
350 employees
http://www.fcf.co.jp/en/
ISO Promotion Team
Tel: +81-288-22-4911 Fax: +81-288-22-4904

Area of products sold

Head Office:Imaichi Plant:
Imaichi East Plant:
Workforce:
Website:Inquiries:

1,000

20,00010,00002000 2001 2002 2003 2004 2005 2006

0

(Fiscal year)

History of Furukawa Electric’s CSR Activities
1972¡ Companywide Rules for Pollution Prevention formulated

1974¡ Environmental Control Department established2002¡ Nikko Works certified under ISO 14001¡ Yokohama R & D Laboratories (now Yokohama Works) certified
under ISO 14001¡ Energy Conservation Team established¡ Green Procurement Preparation Committee established

1976¡ Central Quality Control Committee established1989¡ Team for Reduction in Use of Specified CFCs established¡ Furukawa Electric Basic Environmental Policy revised

1992¡ Team for Reduction in Use of Specified CFCs renamed Team for
Reduction in Use of Ozone Layer Depletion Substances¡ Medium-Term Plan for Environment Preservation Activities
2005 formulated (2003-2005)

1993¡ Basic Framework for Protecting the Global Environment
formulated (Furukawa Electric’s voluntary environmental
preservation plan)

1994¡ Committee for Companywide Promotion of Energy Conservation
established1996¡ Use of specified CFCs and trichloroethane discontinued

1997¡ Team for Promotion of Reduction in Industrial Waste established1998¡ Furukawa Electric Basic Environmental Policy formulated

2003¡ Green Procurement Executive Committee established¡ Liaison Meeting of Consolidated Environmental Management
established¡ Seminar for managers of consolidated companies held
2004

¡ Compliance Committee established¡ Furukawa Electric Group Action Guidelines formulated¡ Committee for the Development of Environmentally Friendly
Products established¡ Furukawa New Leaf established as a special subsidiary offering
employment to people with disabilities¡ Chiba Works certified under ISO 14001
2005¡ Companywide Regulations for Pollution Prevention revised
to create the Companywide Regulations for Environmental
Management
1999

2000

¡ Green Product Management Committee established¡ Compliance Handbook published2006¡ Medium-Term Plan for Environment Preservation Activities
2009 formulated (2006-2009)¡ Environment Control Department and Safety Control Division
merged to create the Safety, Environment and Health Promotion
Department¡ Risk Management Committee established¡ Central Safety and Health Committee established¡ Compliance Handbook Version II published¡ Ecology and Energy Laboratory established¡ Report published under the revised title “Environmental andSocial Report”

2007¡ CSR Division established¡ Liaison Meeting with Affiliated Companies established¡ Chief Social Responsibility Officer (CSRO) appointed¡ First Environmental Report published¡ Hiratsuka Works certified under ISO 14001¡ Safety, Environment and Quality Promotion Department split
into the Safety and Environment Promotion Department and
the Quality Promotion Department¡ Osaka Works certified under ISO 14001¡ CSR and Risk Management Committee established¡ Meeting of Environmental Personnel established2001¡ Medium-Term Plan for Environment Preservation Activities
2005 revised¡ Safety, Environment and Health Promotion Department
renamed Safety, Environment and Quality Promotion
Department¡ Central Committee for Environmental Management established¡ Mie Works certified under ISO 14001¡ Operating Officer System introduced¡ Medium-Term Plan for Environmental Preservation Activities
2002 formulated (for 2001-2002)¡ Furukawa Electric Group Action Guidelines partially revised¡ Report published under the revised title “CSR Report”¡ Details of environmental accounting published

Information available via our website
Our website features details of progress with our environmental
initiatives and PDF versions of this report and other previously
published environmental reports. The relevant materials can beaccessed via the following page on the Furukawa Electric website.
http://www.furukawa.co.jp/english/

42

Safety and Environment Promotion Department, CSR Division
4-3 Okano 2-chome, Nishi-ku, Yokohama 220-0073, Japan
Tel: +81-45-311-1334 Fax: +81-45-311-1931
http://www.furukawa.co.jp/english/

N08

This report is printed on 100% recycled paper using ink that is free fromall VOC (volatile organic compounds) and waterless printing methods.
All company and product names featured in this report are trademarks, registered or otherwise, belonging to the relevant company.

Published in August 2007
IE-108 1I9 TR 50