CORPORATE REPORT 2019

CONTENTS
Message2

2018–2019 Topics

3

5 Highlights
Highlight 1

Zetpol® hydrogenated nitrile rubber
for stronger rubber

5

Highlight 2

Cyclo olefin polymers contributeto people’s health and safety
Zeon material and products
making contributions to society

7

Zeon’s information disclosure
Basic information on Zeon Corporation and Zeon Group is available
on the Company Information section of the corporate website.
This Corporate Report (booklet) contains a wide range of
information on Zeon corporate management and CSR. A CSR Report(PDF) with detailed information on initiatives and site reports isavailable on the CSR activities section of the corporate website.
More information about Zeon’s management and operations isavailable on the Investor Relations section of the corporate website
and in the Fact Book.

Website▶ http://www.zeon.co.jp/index_e.html
Website9Company Profile

11

Zeon Group History

13

Business Overview

15

Zeon Group Locations

17

23 Zeon’s Business and Strategy
Interview with the President

24

Elastomer Business

27

Specialty Materials Business29

Research and Development (R&D)

31

Corporate Governance33

Directors and Officers

35

Company Information

IR Information

CSR Activities

CSR Report

Corporate Report

Fact Book

Fact Book

37 Zeon’s CSR

2019

CORPORATE REPORT 2019

Zeon GroupCSR REPORT

2019

Zeon’s CSR

38

CSR Implementation Plan

39

Environment

45
47

Community49

1-6-2, Marunouchi, Chiyoda-ku, Tokyo, 100-8246 JAPANFACT BOOK 2019

Tel +81-3-3216-2747 Fax +81-3-3216-0501
広報室

東京都千代田区丸の内 1─6 ─2 新丸の内センタービル
Tel 03-3216-2747 Fax 03-3216-0501
禁無断転載
Apr. 2019

Apr. 2019

Get to know Zeon’s special website! 2019
We broadcast TV
commercials in someregions of Japan to
introduce Zeon
Chemicals’ business,and operate a special
website where
employees introduce
the kind of work theydo.

Fair Operating Practices/Human Rights 46
Labor Practices

Dept. of Corporate Communications

Editorial policy
Zeon Corporation and Zeon Group (“Zeon”) previously published a stand-alone CSR Report. Since FY 2013, Zeon has published a booklet form of the CSR Reportrenamed the Corporate Report, which includes an annual report and corporate prole providing of overview of Zeon’s general business activities.
The FY 2019 version begins with the Topics section to heighten accessibility to the latest information. The highlights feature Zetpol® in the Elastomer Business andcyclo olefin polymers in the Specialty Materials Business. In the section on Zeon’s Business and Strategy, the business model and social value creation flow of Zetpol®
and the Film Business are described as well as expanded information on Corporate Governance.

Reporting period

Reporting scope

April 2018 to March 2019 (includes some information after April 2019)

Zeon Corporation and Zeon Group companies inside and outside Japan. Some
data covers only Zeon Corporation.

1

ZEON GROUPCORPORATE REPORT 2019

Message

Corporate Philosophy

Zeon is contributing to the preservation of the
Earth and the prosperity of the human race
Zeon, with its name drawn from words signifying the Earth (geo) and eternity (eon),is committed to responsible stewardship of the global environment
as the foundation for human prosperity through the development
and application of unique, world-leading technologies.

Based on Zeon Group’s corporate philosophy, we
have consistently released a steady stream of new
products using our pioneering, inimitable
technologies. Zeon’s products are incorporated into
customers’ final products and support society
through their presence all around us.
To fulfill our responsibility to society now and in
the future, we are developing our business under ourEnterprise Blueprint for 2020 plan with the missionof “Zeon makes the future today through the powerof chemistry.”
In FY 2018, we drove expansion of our businessfoundation and subsequently implemented a series of
Naozumi Furukawa
Chairman
Zeon Corporation

large investment decisions, including theestablishment of new Group companies andexpansion of facilities to increase our production
scale. In FY 2019, Japan began the new Reiwa era in
the Japanese calendar. With a renewed spirit in thisnew era, we seek further growth and will mobilize all
the strengths of the Zeon Group to continue pursuing
our Enterprise Blueprint for 2020 as well as
contribute to the realization of a sustainable society.
We deeply appreciate your continued support andencouragement.

ZEON GROUPCORPORATE REPORT 20192

2018–2019 Topics

The following summarizes Zeon’s major business developments from July 2018 through April 2019.
See the related press releases for more detailed information.

Organization/Business

Commendations

Established Zeon Taiwan Co., Ltd.
Zeon Corporation established Zeon Taiwan Co., Ltd. in July
2018 to sell specialty materials in Taiwan.

Established Zeon Chemicals Asia Co., Ltd.
Zeon Corporation established Zeon Chemicals Asia Co., Ltd. in
October 2018 to manufacture and sell acrylic rubber in Thailand.

Established Tokyo Zairyo Czech, s.r.o.
Tokyo Zairyo established Tokyo Zairyo Czech, s.r.o. in January
2019 to sell molding materials such as resins and elastomers to
the Prague market in the Czech Republic.

Established Zeon Opto Bio Lab Co., Ltd.
Zeon Corporation spun off the Sano Plant of Optes Inc. andestablished Zeon Opto Bio Lab Co., Ltd. in April 2019. The
company performs molding of plastic products, including
prototypes for resin-based microfluidic chips.

Increased the manufacturing capacity for opticalfilms (ZeonorFilmTM). Including retardation films
with the world’s largest width
Optes is increasing the manufacturing capacity of its opticalfilm plants in Takaoka City, Toyama Prefecture, and Tsuruga
City, Fukui Prefecture. The new line at the Takaoka Plant isscheduled to begin operations in October 2019. The new line at
the Tsuruga Plant is scheduled to begin operations in April 2020
and will be able to produce retardation films with the world’s
largest width (2,500-mm class).

Received the Okochi Memorial Foundation
Technology Prize for development of production
technology for LCD retardation films
In March 2019, Zeon Corporation received the Okochi Memorial
Foundation Technology Prize from the Okochi Memorial
Foundation in recognition of achievements in developing a sheet
extrusion process to make films from cyclo olefin polymers using
proprietary technology, and stretching technology including
diagonal stretching and sequential biaxial stretching to orient
film polymers in a fixed direction.

Certified as White 500 Company for Outstanding
Health and Productivity Management 2019 (Large
Enterprise category)
Became a signatory to the United Nations Global
Compact
In June 2019, Zeon Corporation
signed the United Nations Global
Compact, a voluntary initiative led
by companies and organizations
that commits them to implementing
business principles to protect
human rights, eliminate unfair labor
practices, address environmental
issues, and prevent corruption.

3

ZEON GROUPCORPORATE REPORT 2019

In February 2019, Zeon Corporation was certified as an
Outstanding Health and Productivity Management Company
in the 2019 Certified Health and Productivity Management
Organization Recognition Program, sponsored by the Ministryof Economy, Trade and Industry (METI).

New Products

Launched GRAYNE™, a new series of Zeon Siding™
resin-based home exterior siding featuring abeautiful wood grain finish
Zeon Kasei began sales of GRAYNE™ resin-based home exterior
siding, which reproduces the natural beauty, coloring, andfeel of wood grain, in September 2018. Resin-based exterior
siding is widely used, especially in North America. Comparedwith ceramic-based siding, resin-based siding offers durability
and maintenance advantages and is more resistant to freezing
damage in cold regions and salt damage in coastal regions.

R&D

Began joint R&D on the environmental
biodegradability of carbon nanotubes (ZEONANO®)
Zeon Corporation has begun research on the biodegradabilityof ZEONANO® by microorganisms in the environment in a
research program conducted jointly with the Biomolecular
Systems Engineering Course, Biomolecular Engineering
Department, Nagoya University Graduate School of Engineeringand Friend Microbe Inc. This will aid research on the safety ofcarbon nanotubes.

Launched a new biliary stent product. Now possible
to treat multiple blocked bile ducts

Jointly developed new technology to produce
isoprene, a tire raw material, from biomass

In August 2018, Zeon Medical launched the Hilzo™ Stents
Biliary Uncovered Stent, a new biliary metal stent product.
The metal stent expands in the bile duct and takes a dendritic
shape. This alleviates obstructive jaundice, a condition causedby blocked bile ducts, and improves patients’ quality of life.

Zeon Corporation has developed new technology to stably
and efficiently produce isoprene monomer from biomass(bioresources) through joint research with the national researchand development agency RIKEN and Yokohama Rubber.
Production of isoprene from renewable raw materials andnot petroleum is anticipated to contribute to climate change
mitigation.

ZEON GROUPCORPORATE REPORT 20194

Highlight 1 Zeon Products Making Contributions to Society

Zetpol®, hydrogenated nitrile
rubber for stronger rubber

Examples of parts that use
Zeon’s specialty rubbers

Timing belts
V-belts
Hoses
Various gaskets
Various seals
Various O-rings

Gasoline-engine cars are said to be assembled from tens of thousands of parts. While cars may look like hunks of metal, in fact
they use a lot of rubber parts. Rubber supplied by Zeon plays an important role in the auto industry. Rubber used around the engine inparticular must be highly resistant to oil and high temperatures. Zeon offers specialty rubbers with performance that meets various
customer requirements, including acrylic rubber, acrylonitrile butadiene rubber, epichlorohydrin rubber, and hydrogenated nitrile
rubber. Of them, Zetpol® hydrogenated nitrile rubber developed with proprietary Zeon technology has received very positive reviewsfor its heat resistance.

Zeon contributes to society with specialty rubbers that improve vehicle performance
Raw material rubber such as Zetpol® produced by Zeon gets assembled in cars through rubber compound manufacturers,
parts manufacturers, and car manufacturers. With its high heat resistance, Zetpol® improves parts performance, leading to
improved vehicle performance and lighter weight. This in turn leads to energy conservation, CO2 emission reductions, andresource savings.
●Improved materials performance leading to social contributions
Zeon supplies raw material
rubber including Zetpol®
Zetpol®

Raw materials supplied
from many different
materials manufacturers

Improved materials
performance

Improved parts
performance

Improved vehicle
performance

Rubber compound
manufacturers

Parts
manufacturers

Car
manufacturers

Kneading

Parts production

Zeon’s technological strengths support the auto industry

CO2 emission
reductions
Resource savings

Assembly

The Asia Technical Support Laboratory (ATSL) in Singapore provides technical support in such areas as blending, kneading, and physicalproperty evaluations of rubbers made with local materials for Asian users. This kind of support is made possible by the technology Zeonhas built up in the United States, Europe and Japan. Zeon’s technological strengths not only in supplying products but also in providing
support tailored to local needs are earning recognition in Asia.

5

ZEON GROUPCORPORATE REPORT 2019

Why Zetpol® specialty cross-linked type is better than conventional products
Specialty rubbers need to offer oil, heat, and cold resistance as well as durability. Improving the performance of one of theseproperties, however, results in a trade-off of degraded performance for the other properties. Conventional hydrogenated nitrile rubber
reduces the carbon–carbon double bonds through hydrogenation to increase heat resistance, but this reduces durability (compressionset). Zetpol® specialty cross-linked type adds specialty cross-linking to achieve both heat and compression set resistance.

Specialty cross-linked type
CH2

CH

CH2

CH2

CH2

l

CN

CH

CH2

m

CH
n

Carbon–carbon
saturated bondAcrylonitrile

CH

Carbon–carbon unsaturated bondX

xAdding thiscross-linking
point improves
performance

Specialty
cross-linking point

Conventional product
CH2

CH
CN

CH2

CH2

l

Acrylonitrile

CH2

CH

CH

m

CH2
n

Carbon–carbon
saturated bondCarbon–carbon
unsaturated bond

What is compression set, forwhich Zetpol® is recognized?

Time (hr) to reach compression set of 80%

The sealability of gaskets, packing, and seal materials areevaluated using compression set. Rubber is compressed underhigh temperature, and its compression set, or the percentagethat does not recover its original shape, is measured. Zetpol®
specialty cross-linked type is able to offer improved heat
resistance of 10°C or more over conventional products incompression set. This makes it possible to manufacturehigh-temperature resistant products that have longer life.

100,000

Increased production
capacity of Zetpol®
specialty cross-linked type
To meet the high demand for Zetpol®
specialty cross-linked type, the production
capacity of the Kawasaki Plant is being
increased, with construction scheduled to becompleted in September 2019.

10,000Able to withstand higher
temperatures
for the same length of time

1,000

Longer life at the same
temperature

100

Zetpol® 2510 → Specialty cross-linked type
Zetpol® 2010L → Conventional product
10
110

120

130

140

150

160

170

180

Testing temperature (°C)
ZEON GROUPCORPORATE REPORT 20196

Highlight 2 Zeon Products Making Contributions to Society

Cyclo olefin polymers contributeto people’s health and safety

Pre-filled syringes

Microfluidic chips

Zeon’s Cyclo Olefin Polymers (COP) have excellent optical and chemical properties. Under the product names ZEONEX®
and ZEONOR®, they are widely used in optical lenses, medical and biotechnology applications while earning highly favorable
reviews. In April 2019, Zeon Opto Bio Lab Co., Ltd. was established to perform prototype provision services focused on
microfluidic chips using COP. The company is able to flexibly complete orders of microfluidic chips and other COP molded
products, from one piece to mass-production, in short timeframes. A full package of services for COP molded products, frommolding to cutting and joining, is also available. Zeon Opto Bio Lab anticipates receiving orders from research institutes,
universities, and startups from Japan, Western countries, Asia, and elsewhere around the world.
Microfluidic chip prototype provision service▶https://www.zeonoss.com/en/

Microfluidic chip market growth
Microfluidic chips are chips with microchannels and reaction chambers formed using microprocessing technology, and areused in medical products and blood analysis. The global market for the three fields and key applications of medical devices,
pharmaceuticals, and in-vitro diagnostics has continued to grow at an annual rate of 17–18% over the last five years. In
2024, the market is forecast to reach a scale of $10 billion. The market for the prototype creation business is considered toaccount for at least 10% of the microfluidic chip market as a whole.

●Microfluidic chips by application Global market forecast■Medical devices($1M)■Pharmaceutical ■In-Vitro Diagnostics (IVD)

10,000Market scale of approx. $10 billion

7,500

5,000

2,500

0

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

Source: Materials published by Grand View Research, 2018

7

ZEON GROUPCORPORATE REPORT 2019

●Characteristics of Zeon’s cyclo olefin polymers
High UVtransmittance

COP has excellent transmittance in short wavelength spectrum.

Low fluorescence

COP allows to perform highly sensitive fluorescence imaging tests.

Excellent molding
properties

COP exhibits excellent moldability allowing for intricately designed devices.

High chemical
inertness

COP demonstrates excellent resistance to acid,alkali alcohol.

Low level of
impurities

COP is extremely pure material.

Low protein
adsorption

COP is very low in protein adsorption.

Low water vapor
transmission

COP provides superior performance for storage
stability of substances.

Low environmental
impact

COP can be incinerated and has excellent safety and disposability.

Contributes
to stabilityof contents

Technical characteristics ofZeon’s microfluidic chips
Zeon’s microfluidic chips are also characterized by processing
technology that leverages COP’s characteristics. General
microfluidic chips are created by bonding two boards together,
one with channels and one that acts as a cover, and the adhesiveat times impedes analysis. Zeon Opto Bio Lab has developed
proprietary bonding technology that does not use adhesive,
making analysis possible without the loss of COP’s
characteristics. In addition, Zeon Opto Bio Lab is able to perform
high-precision cutting at the level of 50 microns as well as
cutting that maintains transparency. Mass-production in a clean
room is also possible.

Cutting example

Voice

Used in medical packaging
Because COP has low adsorption of proteins andother substances, it is being increasingly adopted invarious state-of-the-art medical packaging such as
pre-filled syringes. Medical service providers also
welcome the fact that COP is not readily breakable.

Pre-filled syringes

Blood test cells

New applications for COP
Sano Plant handles molded products and was
spun off from Optes, whose principal business is
optical films, to establish Zeon Opto Bio Lab becauseof the new directions presented by the COP molded
products business. “Zeon” was included in thecompany name, and employee morale is receiving aboost from the launch of the new business venture.
As a behind-the-scenes supporter of research anddevelopment, customers reporting their results is
also a reason for employees engaged in this businessto celebrate. Through customers, Zeon Opto Bio Lab
will contribute to better health and safety in society.

Koji Minami

山路を登りながら

Division Manager, Specialty Plastics Division

ZEON GROUPCORPORATE REPORT 20198

Zeon Products Making Contributions to Society

Zeon material and products
making contributions to society
Zeon has defined the key development areas of Global Environment, Health and Living, and Smart
Devices, and is engaging in new business creation and new product development.

Contributions to the SDGs across all products

Zeon is working to reduce the environmental load of all products during
product manufacturing and use (Goal 12), and aims to contribute tosocietal development and technological innovation through product use(Goal 9).

Energy conservation

GlobalEnvironment

Reduction of fossil fuel use

ZEORORA® H HFC solvent:Contributes to climate change prevention as analternative HFC solvent.
ZEORORA® Etching gas for oxide layers:
Contributes to climate change prevention as an
etching gas with low global warming potential.

ZEON GROUPCORPORATE REPORT 2019

Power generation
Automotive

Improved performance and extended life of manufacturers’ products
made with Zeon’s materials and components contribute to reducing
environmental impacts through such ways as energy conservation,
mitigating climate change, and reducing waste.

Solution-polymerized
styrene-butadiene
rubber (S-SBR):
Improves theperformance of
fuel-efficient tires andcontributes to energy
conservation andreduced CO2 emissions.

9Batteries

Zetpol® specialty
cross-linked hydrogenatednitrile rubber (HNBR):
Developed a proprietary
method to add specialty
cross-linking to nitrile rubberhydrogenated to increase heat
resistance to improve therubber’s durability(compression set) and achieveboth durability and heat
resistance.➡ P. 5, Highlight 1
Asia Technical Support Laboratory (ATSL):
Based in Singapore, ATSL provides technical support in such areas as
blending, kneading, and physical property evaluations of rubbers madewith locally available agents for Asian rubber manufacturers. ATSL isenhancing Zeon’s presence in Asian markets using the technologicalstrengths Zeon has built up in the United States, Europe, and Japan.

Energy materials:
Zeon’s binders prevent electrode volume expansion
and greatly improve cell life. They also increase thechemical reactions on the surface of the active
materials to increase battery output.

Self-driving cars

Health and
LivingMedical materials
Daily necessities

Medical devices

Agriculture

Zeon’s materials, components, and products are useful in daily life andcontribute to health and well-being of people.

Prohydrojasmon plant growth regulator:
Reduces declines in the production volume
and quality of agricultural products due tothe effects of climate change(Jasmomate TM Ekizai agrochemical
formulation).

Synthetic latex forgloves:Due to concern
about allergic
reactions from natural rubber proteins, demand is
shifting to NBR latex gloves, and the market isexpanding.

Cyclo olefin polymer(COP) for onboard
sensing cameras:
ZEONEX® offers
excellent opticalproperties and stable chemical properties, resulting in its
adoption not only in smartphone cameras but also in onboard
sensing cameras in automotive hazard detection systems.

Microfluid chip
prototype provision
service:
Microfluid chips thatuse microprocessing technology to form microchannels andreaction chambers are widely used in medical fields including
pharmaceuticals and in-vitro diagnostics. One stop service isalso available, from molding to cutting and joining, and able
to flexibly support orders from one piece tomass-production.➡ P. 7, Highlight 2

Thermoplastic
elastomer SIS:
Used in elastic film fordisposable diapers toachieve lighter weight andgreater comfort.

Catheters to remove bile
duct stones:
Zeon’s catheters help lessen
patients’ pain and healthcare
professionals’ workloads, with astrong reputation in treatment
to remove bile duct stones.

Smart
Devices

IoT

Using Zeon’s materials
and components cangreatly improve
product performance.

ZeonorFilmTM Optical film:
ZeonorFilmTM optical film contributes toimproved display performance by combining
ZEONOR® resin properties includingtransparency and low water absorption with
our world-first sheet extrusion process, film
stretching technology, and other film
processing technologies.

Pad-type thermal interface material(TIM):TIM using rubber/single-walled carbon
nanotube (ZEONANO®) composite
achieves low thermal resistance.
It increases the thermal conductivity of theheat sink and resolves the heat generation
problem of servers and power devices.

ZEON GROUPCORPORATE REPORT 201910

Company Profile

Name: Zeon Corporation

Established: April 12, 1950
Capital: 24.211 billion yen (as of March 31, 2019)Market capitalization: 364.6 billion yen (as of March 31, 2019)
Total number of shares outstanding: 237,075,556 shares
Employees: 3,405 (consolidated)
1,613 (non-consolidated) (as of March 31, 2019)
Business segments: Elastomer Business, Specialty Materials
Business, other businesses (➡P. 15)
Head Office: Shin Marunouchi Center Building, 1-6-2
Marunouchi, Chiyoda-ku, Tokyo 100-8246, Japan
Plants: Takaoka Plant, Kawasaki Plant,
Tokuyama Plant, Mizushima Plant
Research laboratories: R&D Center (Kawasaki)
Offices: Osaka Office, Nagoya Office

Consolidated net sales

332,682 337,499(million JPY)

350,000
300,000

307,524

295,647

287,624

2014

2015

2016

250,000
200,000
150,000
100,000
50,0000

20172018 (FY)

Subsidiaries and affiliates in Japan (➡P. 21)：
Tokyo Zairyo Co., Ltd., Zeon Kasei Co., Ltd.,
Zeon North Co., Ltd., Zeon Yamaguchi Co., Ltd.,
Zeon F&B Co., Ltd., Zeon Chemicals Yonezawa Co., Ltd.,RIMTEC Corporation, Zeon RIM Co., Ltd.,
Zeon Medical Inc., Optes Inc., Zeon Opto Bio Lab Co., Ltd.,TFC Inc., Zeon Polymix Inc., Tohpe Corporation,
Zeon Nano Technology Co., Ltd., ZS Elastomers Co., Ltd.,
Okayama Butadiene Co., Ltd., ZIS Information Technology Co., Ltd.

Subsidiaries and affiliates outside Japan (➡P. 17, 19)：

【USA】Zeon Chemicals L.P., Zeon Specialty Materials lnc.,

Tokyo Zairyo (U.S.A.) Inc.
【Brazil】Zeon do Brasil Ltda.

【Mexico】Zeon Kasei Mexico S.A. de C.V.,

Tokyo Zairyo México, S.A. de C.V.
【Europe】Zeon Europe GmbH, Telene S.A.S.,

Consolidated operating income(million JPY)

50,00038,88140,00030,00028,24529,85630,767

2014

2015

2016

33,14720,00010,0000

20172018 (FY)Tokyo Zairyo Czech, s.r.o.
【China】Zeon (Shanghai) Co., Ltd., Zeon Trading (Shanghai) Co., Ltd.,

Shanghai Zeon Co., Ltd., Zeon Polymix (Guangzhou) Co., Ltd.,
Takehara Zeon (Shanghai) Co., Ltd., Zeon Kasei (Changshu) Co., Ltd.,
Zeon Medical (Guangzhou) Inc., Tokyo Zairyo (Shanghai) Co., Ltd.,Tokyo Zairyo (Tianjin) Co., Ltd., Tokyo Zairyo (Guangzhou) Co., Ltd.

Segment net sales (outer circle) and operating income (inner circle)【South Korea】Zeon Korea Co., Ltd., Zeon Shinhwa (Zeshin) Inc.
【Taiwan】Zeon CSC Corporation, Zeon Taiwan Co., Ltd.
【Singapore】Zeon Chemicals Singapore Pte. Ltd.,

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

Other Businesses

17%【Malaysia】Zeon Asia Malaysia Sdn. Bhd.
【India】Zeon India Private Limited,Tokyo Zairyo (India) Pvt, Ltd.
【Thailand】Zeon Chemicals (Thailand) Co., Ltd.,

Zeon Advanced Polymix Co., Ltd.,
Zeon Chemicals Asia Co., Ltd.,Tokyo Zairyo (Thailand) Co., Ltd.
【Vietnam】Zeon Manufacturing Vietnam Co., Ltd.,

Zeon Research Vietnam Co., Ltd.,Tokyo Zairyo (Vietnam) LLC.
【Indonesia】PT. Tokyo Zairyo Indonesia

11

ZEON GROUPCORPORATE REPORT 2019

Specialty Materials
Business

25%

48%

FY

2018

52%

Elastomer Business58%

Shareholder information (as of March 31, 2019)

Dividends(JPY)

Treasury stock

20

7.8%

Financial institutions &securities companies(18,577,000 shares)
Individuals & others

8.8%(20,736,000 shares)
Foreign investors

21.2%

35.9%

237,075,556
shares100%(50,273,000 shares)(85,147,000 shares)

15

14

15

16

17

19

10
Other domestic
institutional investors

5

26.3%

(62,340,000 shares)

Share price (closing price on March 31)

2016

4,000

1,538

1,500

3,000

1,271

1,110

1,120

1,000

728

500

2017

2018 (FY)

2014

2015

2016

2017

2018 (FY)

0.95

0.95
0.95

3,013

2,687

2,000

2,655

1,725

0

2014

2015

2016

2017

2018 (FY)

CO2 emissions (including Zeon Group inside and outside Japan)(1,000 tons)(crude oil equivalent, kL /million JPY)

1.00
1.00

3,646

1,000

Energy use per net sales (Zeon Group inside and outside Japan)

0.85
0.85

2015

(100 million JPY)

(JPY)

0.90
0.90

2014

Market capitalization (as of March 31)

2,000

0

0

900

0.91

800

0.93

0.86

0.85

700

675

724

770

737

2017

2018 (FY)

655

600
500

0.80
0.80

400

0.75
0.75

300

0.70
0.70

200
100

0

2014

2015

2016

2017

2018 (FY)

0

2014

2015

2016

ZEON GROUPCORPORATE REPORT 201912

Zeon Group History
World-leading‌C4 and C5 technologies with GPB and GPIprocesses
In the petrochemical industry, which uses crude oil as araw material, technological capabilities are a key element
impacting company competitiveness. Zeon developed the
GPB process in 1965 to efficiently extract high-grade
butadiene, which is the raw material used in synthetic rubber
production, from C4 fractions. In 1971, Zeon developed the
GPI process to efficiently extract isoprene, the raw material in
isoprene rubber, and other useful components, from C5
fractions.
Zeon licenses its proprietary GPB process technology incountries around the world. This greatly contributes to Zeon’scompetitive edge and promotes the Zeon brand globally.

Starting from PVC and synthetic rubber production
Zeon Corporation was founded as a PVC manufacturer in
1950, established with capital from three Furukawa groupcompanies—Furukawa Electric, Yokohama Rubber, andNippon Light Metal. Zeon acquired its PVC manufacturing
technologies from U.S.-based B.F. Goodrich Chemical
Company, which at the time was the global leader in theindustry. Zeon continued developing the PVC business fromits founding until full withdrawal in 2000.
In 1959, Zeon acquired technologies from B.F. Goodrich
Chemical Company to operate a specialty synthetic rubber(NBR) plant. This was Japan’s first domestic synthetic rubber
plant. Following this, Zeon embarked on the production ofgeneral-purpose synthetic rubber (SBR). Zeon thus
established its Synthetic Rubber Business for tires and engine
components, which it continues to manufacture today.

Timeline of main businesses
and product development

1960

1970

1980

Processed
Products
Polyvinyl chloride resins

Medical
Devices

Latex(for paper coating)Powder slush compounds (PSC)

Ventricular assist device

VP latex(tire cord)

Specialty Synthetic Rubbers(NBR & ACM for auto parts)

C4

1990

Hollow latex(paper coating)Hydrogenated NBR(Zetpol®)

Toner

Polymerized toner

Synthetic Rubbers for Tires(SBR & BR for tires)

General-purpose synthetic rubberwith modified terminals

C5
C5 petroleum resin(roadmarking paints)

Chemicals

Thermoplastic elastomer SIS(adhesives)

Isoprene rubber(tires)Specialty
Chemicals

Synthetic aroma chemicals(leaf alcohol)

Synthetic aroma chemicals(jasmine aroma chemicals)
Fluorinated C5

Electronics Materials

Specialty Plastics
Dicyclopentadiene

Cyclo olefin polymers(lenses, prisms)

RIM
RIM molded items and formulation(large plastic products)

13

ZEON GROUPCORPORATE REPORT 2019

Developing comprehensive uses for C5 fractions
Isoprene rubber is a useful material that can stably achieve
the same properties as natural rubber. Many byproducts arederived from the process of extracting isoprene feedstockfrom C5 fractions. One advantage of the GPI process is theability to extract these byproducts at a high degree of purity.
Zeon has focused on ways to effectively use thesesubstances. As a result, Zeon subsequently grew its businessto include petroleum resins and thermoplastic elastomer SIS
in the 1980s, synthetic aroma chemicals and RIM molded
products in the 1990s, and Cyclo olefin polymers since the2000s. These businesses now enjoy a large share of the
global market. The technologies gained during thisdevelopment process are being used in other areas inaddition to C5 fractions.

Developing more advanced materials and establishingleading manufacturing technologies
In recent years, there has been growing demand for productswith advanced functions that can contribute towards solving social
issue, and similar expectations are rising for chemical materials.
To meet these expectations, Zeon’s Synthetic Rubber Businessdeveloped Zetpol® hydrogenated nitrile rubber, which provides
high functionality at a competitive cost and is used in automotiveengine components and other applications with severe working
conditions. Cyclo olefin polymers, developed from comprehensive
use of C5 fractions, are high-performance materials used in opticalfilms and lenses, and in electrical insulation.
Single-walled carbon nanotubes (SWCNT), in compounds with othermaterials such as rubber, are able to demonstrate novel properties andperformance. Zeon has become the first company in the world to use
the Super-Growth method for mass production of SWCNT.

2000

2010

Enhanced low-temperature PSC(automobile instrument panels)

PVC business withdrawal

Balloon catheters (IABP)

4 core catheter products Stents (bile ducts sheath)

NBR latex(gloves)

EnergyMaterials

Water-based anode Solvent-based cathodebinder for mobile LIB* binder for mobile LIB*LIB:
Lithium-ion batteries

Functional layerbinder for mobile LIB

Anode and functional
Water-based anodelayer binder forbinders for large-capacity
automobile LIB
mobile batteries

Water-based
cathode binders

Heat-resistant H-NBR (Zetpol®)Heat-resistant acrylic rubber

Polymerized color toner

Low-temperature fixing toner(high-speed printers)

Solution-SBR(fuel-efficient tires)Light-color petroleum resin(adhesives for diaper)

Asymmetric SIS(elastic film for diaper)

Cyclopentanone
Cyclopentyl methyl ether (CPME)(solvent and fine chemical raw material)(eco-friendly solvent)
Photo resists

Insulation materials

Cyclo olefin polymers(commodity use)

Optical Films

LCD resists for large sized wafers

Cyclo olefin polymers(blue laser)
Melt extrusion
process

Retardation films
by successive
stretching process

Retardation films
by diagonal
stretching process

High thermostability film
by diagonal stretching process(touch panels)

CNT

Super Growth Carbon Nanotube

ZEON GROUPCORPORATE REPORT 201914

Business Overview
Zeon’s main products are created from raw materials such as butadiene and isoprene, which are extracted from the C4 andC5 fractions of naphtha using proprietary Zeon technologies. Business segments are divided into the Elastomer Business,
Specialty Materials Business, and other businesses.

C2 fractions Ethylene
C3 fractions Propylene

Main Products
Synthetic rubbers

C4
fractions

GPB
process

Butadiene
Synthetic latexes

Synthetic rubbers

Crude oil

NaphthaIsoprene
Proprietary Zeon technology
used to extract highly purebutadiene from C 4 fractions

Thermoplastic
elastomers
Petroleum resins

Piperylene
Petroleum resins

C5
fractions

GPI
process

Dicyclopentadiene

RIM compound

Specialty plastics

2-butyne
Proprietary Zeon technology
used to extract isoprene andother highly-pure, usefulcomponents from C5 fractions

Synthetic aroma
chemicalsElectronics materials

Energy materials

Medical devices

Carbon nanotubes

15

ZEON GROUPCORPORATE REPORT 2019

Applications

Elastomer Business

Tires

Gloves for medical use
and food processing

Elastomer Business

Automobile
components

Cosmetic
puffs

Tires

Adhesives

Adhesives

In 1959, Zeon became thefirst company in Japan tomass-produce synthetic
rubbers. The Elastomer
Business is a core businessarea, providing over 50% of
total net sales and operating
income.
Main products
Synthetic rubbers, synthetic
latexes, chemical products(thermoplastic elastomers,
petroleum resins)

Traffic paints

Paints/coatings, Inks

Lenses

Large-size
molding

Toner

Binders for lithium-ion rechargeable batteriesSpecialty Materials Business

Food additives

Electronics materials

Specialty Materials
Business

Medicalcontainers

Optical films

Fragrances

Other

Housing equipment
and components

Medical catheters
Other

Single-walled carbon nanotubes,
Composite materials

Specialty materials refer tomaterials and components
with high added value thathave a macromolecular
design and are made withprocessing technology. The
three key business areas of
the Specialty Materials
Business are IT components,
energy materials, andmedical devices.
Main products
Specialty plastics andcomponents, electronics
materials, toners, battery
materials, medical devices

Social value created from C4 and C5

Automobile
components

Business Segments

P.9

Other Businesses

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

ZEON GROUPCORPORATE REPORT 201916

Zeon Group Locations

Asia

as of July 1, 2019

We are continuing to globalize ourbusiness since the 1970s.
We have set up sales networks inmajor markets around the world andestablished a production system forrubber and resin products. In
addition, we have R&D facilities in
the USA and Europe to meet the
local needs quickly. We are alsoestablishing R&D and sales locationsin China, a market that is growing
rapidly.
We are aiming to be a company
that, through our local production
systems, builds close ties with local
communities and contributes to theglobal society.

1 Zeon (Shanghai) Co., Ltd.
Room 1904, 2 Grand Gateway, No.3 Hongqiao Road, Xuhui
District, Shanghai, 200030, China
TEL: +86-21-6167-5776 FAX: +86-21-6040-7258• Provide assistance and exercise control over theZeon Group companies in China with regard to suchfunctions as accounting, finance, personnel management, legal, etc

1 Zeon Trading (Shanghai) Co., Ltd.

Room 1901-2, 2 Grand Gateway, No.3 Hongqiao Road,
Xuhui District, Shanghai, 200030, China
TEL: +86-21-6040-7255 FAX: +86-21-6040-7258• Purchase and sales of synthetic rubbers, chemical products, etc.
(including international trade)

1 Shanghai Zeon Co., Ltd.
No. 380 Shennan Road, Xinzhuang Industry District,Minhang, Shanghai, 201108, China
TEL: +86-21-6489-6160 FAX: +86-21-6442-0569(Push “0” after announcements)• Manufacture and sales of rubber compounds (CM)

1 Takehara Zeon (Shanghai) Co., Ltd.

No. 380 Shennan Road, Xinzhuang Industrial Zone,
Minhang District, Shanghai, 201108, China• Manufacture and sales of silicon rubber compounds (CM)2 Tokyo Zairyo (Shanghai) Co., Ltd.
Room 1903, 2 Grand Gateway, No.3 Hongqiao Road,
Xuhui District, Shanghai, 200030, China
TEL: +86-21-6119-9400 FAX: +86-21-6119-9401• Purchase and sales of synthetic rubbers, chemical products,
etc. (including international trade)

2 Zeon Polymix (Guangzhou) Co., Ltd.
No. 1 1st Jingquan Road, Yong He Economic Zone,
Guangzhou, 511356, China
TEL: +86-20-3222-1171 FAX: +86-20-3222-1820• Manufacture and sales of rubber compounds (CM)

2 Zeon Medical (Guangzhou) Inc.
Room 1706A, Goldlion Digital Network Center, No. 138
Ti Yu Dong Road, Tianhe District, Guangzhou,
Guangdong, 510620, China
TEL: +86-20-2283-6788 FAX: +86-20-2283-6789• Sales, export, and import of medical devices(cardiovascular and endoscopic accessory, etc.)

2 Tokyo Zairyo (Guangzhou) Co., Ltd.
Room 1208, Goldlion Digital Network Center, No. 138 Ti yu
Dong Road, Tianhe District, Guangzhou, Guangdong,
510620, China
TEL: +86-20-3878-0671 FAX: +86-20-3878-1336• Purchase and sales of synthetic rubbers, chemical products,
etc. (including international trade)

For Japanese

4
5

3
1
7
2
11

8
12

9
10

13

17

ZEON GROUPCORPORATE REPORT 20196

➡ locations, see
P. 21

3 Zeon Kasei (Changshu) Co., Ltd.
Huangpujiang Road 96, Dongnankaifa District,
Changshu City, Jiangsu Province, 215500, China
TEL: +86-512-5235-7000 FAX: +86-512-5235-7308• Manufacture and sales of powder slush compounds

4 Tokyo Zairyo (Tianjin) Co., Ltd.

7 Tokyo Zairyo (India) Pvt, Ltd.
Time Tower, Unit No.708, 7th floor, Sector-28, M.G
Road, Gurgaon-122002, Haryana, India
TEL:+91-124-424-9011 FAX:+91-124-424-9005• Purchase and sales of synthetic rubbers, chemical products,
etc. (including international trade)

Room 1805, The Exchange Tower 1, 189 Nanjing Road,
Heping District, Tianjin, 300051, China
TEL: +86-22-23021268 FAX: +86-22-23021278• Purchase and sales of synthetic rubbers, chemical products, etc.
(including international trade)

8 Zeon Chemicals (Thailand) Co., Ltd.
3 Soi G-14, Pakorn-Songkhrorad Road, Tambol Huaypong,
Amphur Muangrayong, Rayong 21150, Thailand
TEL:+66-3-868-5973~5 FAX:+66-3-868-5972• Manufacture and sales of petroleum resins

5 Zeon Korea Co., Ltd.

8 Zeon Advanced Polymix Co., Ltd.

No.403, 4Fl., 36, Teheran-ro 87-gil, Gangnam-gu, Seoul,06164, Korea (City Air Tower, Samseong-dong)
TEL:+82-2-539-8565 FAX:+82-2-538-5190• Sales and import of optical materials, imaging and electronics
materials, synthetic resins, and synthetic rubbers, etc.

5 Zeon Shinhwa (Zeshin) Inc.

No.502 CALT B/D (City Airport)22, Teheran-ro 87-gil,Gangnam-gu, Seoul, 06164, Korea
TEL:+82-2-761-7030 FAX:+82-2-786-7221

111/2 Soi Nikom 13, Moo 2 T.Makhamkhoo, Nikompattana
District Rayong 21180, Thailand
TEL:+66-38-893-565 FAX:+66-38-893-569• Manufacture and sales of rubber compounds (CM)8 Sales office

591 UBCII BLDG, Office No.2206, 22thFL, Sukhumvit
33rd, KlongtonNua, Wattana, Bangkok 10110, Thailand
TEL:+66-2-261-0175 FAX:+66-2-261-0172• Sales of imaging and electronics materials

6 Zeon CSC Corporation

3F.-2, No.266, Sec. 1, Wenhua 2nd Rd., Linkou
Dist., New Taipei City 24448, Taiwan (R.O.C.)
TEL:+886-2-2609-2156 FAX:+886-2-2600-6413• Sales of optical materials

6 Zeon Taiwan Co., Ltd.
10F, No.209. Sec.1, Civic Blvd., Datong Dist.,
Taipei City 103, Taiwan (R.O.C.)
TEL:+886-2-2181-1620• Sale of electronics materials

7 Zeon India Private Limited
Unit Number: 708, 7th Floor, Time Tower MG Road,
Sec-28, Gurugram, Haryana, India – 122002
TEL:+91-124-4229461 FAX:+91-124-4229462• Import, sales, and marketing of synthetic rubbers and other
Zeon products

8 Tokyo Zairyo (Thailand) Co.,Ltd.
29th Floor Room 2903, Empire Tower 1 South Sathorn Rd.,
Yannawa, Sathorn, Bangkok, 10120, Thailand
TEL:+66-2-670-0285 FAX:+66-2-670-0283• Purchase and sales of synthetic rubbers, chemical products,
etc. (including international trade)
9 Zeon Asia Malaysia Sdn. Bhd.
Unit 208, Block B, Phileo Damansara II, No.15, Jalan16/11,
Off Jalan Damansara, 46350 Petaling Jaya, Selangor,
Malaysia
TEL:+603-7956-7069 FAX:+603-7957-1758• Sales of synthetic latexes

10 Zeon Chemicals Singapore Pte. Ltd.

100 Banyan Drive, Jurong Island, Singapore 627571
TEL:+65-6933-4400 FAX:+65-6933-4413• Manufacture and sales of S-SBR

10 Asia Technical Support Laboratory

61 Science Park Road, #05-09/10 The Galen, Singapore
Science Park 2, Singapore 117525
TEL:+65-6266-7631 FAX:+65-6266-7712
10 Tokyo Zairyo (Singapore) Pte. Ltd.
331 North Bridge Road, #20-01/02, Odeon Towers,
Singapore 188720
TEL:+65-6337-5053 FAX:+65-6337-4557• Purchase and sales of synthetic rubbers, chemical products, etc.
(including international trade)

11 Zeon Manufacturing Vietnam Co., Ltd.
No.109, Road No.10, VSIP Haiphong Township, Tan
Duong ward, Thuy Nguyen District, Haiphong City,
Vietnam
TEL:+84-225-3797-027 FAX:+84-225-3797-028• Manufacture and sales of packing containers

11 Zeon Research Vietnam Co., Ltd.
6th Floor, Building 85 Nguyen Du Str., Hai Ba Trung
District, Hanoi, Vietnam 100000
TEL:+84-24-3632-0557 FAX:+84-24-3632-0557• Design simulation of optical materials and molded products, andmarket research for Zeon products in Southeast Asia

11 Tokyo Zairyo (Vietnam) LLC.
4th Floor, Building 85 Nguyen Du Str., Hai Ba Trung
District, Hanoi, Vietnam 100000
TEL:+84-24-3941-3825 FAX:+84-4-3941-3826• Purchase and sales of synthetic rubbers, chemical products, etc.
(including international trade)

12 Branch of Tokyo Zairyo (Vietnam) LLC in HCMC

Unit 1203, 2nd Fl., CITYVIEW, 12 Mac Dinh Chi st., Da Kao
Ward, Dist. 1, Ho Chi Minh City, Vietnam
TEL:+84-28-3911-0135 FAX:+84-28-3911-0136
13 PT. Tokyo Zairyo Indonesia
Gedung MidPlaza 2, Lantai 12, Jl. Jend. Sudirman Kav.
10-11,Jakarta 10220
TEL:+62-21-574-6454 FAX:+62-21-573-5661• Purchase and sales of synthetic rubbers, chemical products, etc.
(including international trade)

10 Zeon Asia Pte. Ltd.
331 North Bridge Road, #20-01/02, Odeon Towers,
Singapore 188720
TEL:+65-6332-2338 FAX:+65-6332-2339• Sales, export, and import of synthetic rubbers, synthetic latex,
and petroleum resins

ZEON GROUPCORPORATE REPORT 201918

Zeon Group Locations

Americas / Europe

as of July 1, 2019

14

15
11

1

12

6

5

4
3

2

7
8

9

19

ZEON GROUPCORPORATE REPORT 2019

10
13

16

1

Zeon Chemicals L.P.

4111 Bells Lane, Louisville, Kentucky 40211, U.S.A.
TEL:+1-800-735-3388 FAX:+1-502-775-2055
TEL:+1-502-775-2000• Manufacture and sales of synthetic rubbers

1

R&D Center

1

Kentucky Plant

4111 Bells Lane, Louisville, Kentucky 40211, U.S.A.
TEL:+1-502-775-7765 FAX:+1-502-775-7783

4100 Bells Lane, Louisville, Kentucky 40211, U.S.A.
TEL:+1-502-775-7600 FAX:+1-502-775-7614
2 Mississippi Plant

1301 West Seventh Street, Hattiesburg, Mississippi
39401, U.S.A.
TEL:+1-601-583-6020 FAX:+1-601-583-6032
3 Texas Plant

11235 Choate Road, Pasadena, Texas 77507, U.S.A.
TEL:+1-281-474-9693 FAX:+1-281-474-0966
4 Zeon Specialty Materials lnc.

25 Metro Drive, Suite 238, San Jose, CA 95110, USA
TEL:+1-408-641-7889 FAX:+1-408-516-9382• Sale of advanced materials

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

750 Old Hickory Blvd., Building One, Suite 220
Brentwood, TN 37027
TEL:+1-615-922-4633 FAX:+1-615-942-7424

6 New York Office

333 Mamaroneck Avenue PMB#394 White Plains, NY
10605 U.S.A
Tel: +1-914-646-7450
7 McAllen Office2112 South Shary Rd, Suite# 26 Mission, TX 78572
TEL:+1-914-314-8919
8 Zeon Kasei Mexico S.A. de C.V.

Avenida Santiago Sur 100, Los Jassos, San Luis Potosi,
San Luis Potosi, MEXICO, C.P.78420
TEL:+52-1-444-478-5400

11 Zeon Europe GmbH - Branch in France

ZEON France Succursale française de Zeon Europe GmbHc/o Sofradec 153, Boulevard Haussmann 75008 Paris,
FranceTEL:+49-211-5267-145
12 Zeon Europe GmbH - Branch in Spain

C/Beethoven, 15, 4O, 08021 Barcelona, Spain
TEL:+34-93-183-87-08 FAX:+34-93-183-87-58

13 Zeon Europe GmbH - Branch in Italy

Via Mauro Macchi, 27, 20124 Milano, Italy
TEL:+39-02-67141701 FAX:+39-02-36680124• Manufacture and sales of powder slush compounds

8 Tokyo Zairyo México, S.A. de C.V.

Boulevard Bernardo Quintana 7001 Torre II Suite 807
Colonia Centro Sur, C.P. 76090 Querétaro; Querétaro,
MéxicoTEL:+52-442-229-3242 FAX:+52-442-229-3244• Purchase and sales of synthetic rubbers, chemical products,
etc. (including international trade)

9 Zeon do Brasil Ltda.

Rua Arandu, 57/cj 23, Sao Paulo-SP, 04562-031
TEL:+55-11-5501-2120 FAX:+55-11-5501-2122• Sales of synthetic rubbers and resins, etc.

10 Zeon Europe GmbH

14 Zeon Europe GmbH - Branch in U.K.

Scott Court, Unit 2A, Ocean Way, Cardiff, CF24 5HF,
United Kingdom
TEL:+44-1446-725000 FAX:+44-1446-747988
15 Telene S.A.S.

2, rue Marie Curie - 59910 Bondues, France
TEL:+33-3-20-69-57-10 FAX:+33-3-20-69-57-11• Development and sales of Telene® DCP-RIM resin

16 Tokyo Zairyo Czech, s.r.o.

Pobřežní 620/3, 186 00 Prague 8, Czech Republic
Tel: +420-221-228-406 Fax: +420-221-228-405• Procurement and sales of synthetic resins, synthetic rubbers,
and other chemical products

Hansaallee 249, 40549 Dusseldorf, Germany
TEL:+49-211-52670 FAX:+49-211-5267160• Sales, export, and import of synthetic rubbers and resins• Purchase and sales of synthetic rubbers, chemical products, etc.
(including international trade)

ZEON GROUPCORPORATE REPORT 201920

Zeon Group LocationsJapan

as of July 1, 2019

Zeon Corporation – Head Office
Shin Marunouchi Center Building, 1-6-2 Marunouchi,
Chiyoda-ku, Tokyo 100-8246, Japan
TEL: +81-3-3216-1772 FAX: +81-3-3216-0501
Tokyo Zairyo Co., Ltd.
Shin Marunouchi Center Building, 1-6-2 Marunouchi,
Chiyoda-ku, Tokyo 100-0005, Japan*same as follows
TEL: +81-3-5219-2171 FAX: +81-3-5219-2201• Trading
Zeon Kasei Co., Ltd.
TEL: +81-3-5208-5111 FAX: +81-3-5208-5290
Plants: Ibaraki, Yamaguchi• Manufacture and sale of PVC compounds, packaging
materials, packaging containers, logistics equipment, etc.
Zeon F&B Co., Ltd.
TEL: +81-3-3216-1410 FAX: +81-3-3216-1421• Agency business for life and non-life insurance; loan andfactoring business to each group company
RIMTEC Corporation
TEL: +81-3-5220-8581 FAX: +81-3-5220-8584
Plants, R&D Center: Mizushima• Sales of formulation liquid for Reaction Injection
Molding (RIM)ZIS Information Technology Co., Ltd.
TEL: +81-3-3216-6500 FAX: +81-3-3216-6534• Consulting about data processing systems; sales andmaintenance of computer and office automationequipment
Zeon Nano Technology Co., Ltd.
TEL: +81-3-3216-1766 FAX: +81-3-3216-1767• Processing and sales of Carbon Nanotubes and related
products
ZS Elastomer Co., Ltd.
TEL: +81-3-3216-0620 FAX: +81-3-3216-0629• Sales and R&D of S-SBR
Zeon Medical Inc.
TEL: +81-3-3216-1265 FAX: +81-3-3216-1269
Plant: Takaoka• Manufacturing and sale of medical devices
Okayama Butadiene Co., Ltd.
Sen-i Kaikan 2F, 3-1-11 Nihonbashi-Honcho, Chuo-ku,
Tokyo 103-0023, Japan
TEL: +81-3-3278-0721 FAX: +81-3-3278-0722• Manufacturing of butadiene monomer

21

ZEON GROUPCORPORATE REPORT 2019

Zeon Corporation – Kawasaki Plant
1-2-1 Yako, Kawasaki-ku, Kawasaki-ku, Kanagawa
210-9507, Japan
TEL: +81-44-276-3700 (direct)
FAX: +81-44-276-3701

Zeon Corporation – Tokuyama Plant
2-1 Nachi-cho, Shunan-shi, Yamaguchi 745-0023,
Japan
TEL: +81-834-21-8501 (direct)
FAX: +81-834-21-8793

Zeon Corporation – R&D Center
TEL: +81-44-276-3721
FAX: +81-44-276-3720

Zeon Yamaguchi Co., Ltd.
2-1 Nachi-cho, Shunan-shi, Yamaguchi 745-0023,
Japan
TEL: +81-834-21-8482 FAX: +81-834-21-8663• Purchase and sale of civil engineering materials, packing
materials, and various facilities; design and construction,
contracting for various plants; environment analysis

Zeon Corporation – Takaoka Plant
630 Ogino, Takaoka-shi, Toyama 933-8516, Japan
TEL: +81-766-21-0252 (direct)
FAX: +81-766-21-8201
Zeon North Co., Ltd.
351 Ejiri, Takaoka-shi, Toyama 933-0062, Japan
TEL: +81-766-25-1111 FAX: +81-766-25-1114• Contracting, design, construction, and management forvarious facilities; sales of industrial materials andequipment, purchase and sale of petrochemical
products; testifying environmental measurements,
measurement working environment; conducting various
analyses
Optes Inc.
422-1 Futagamishin, Takaoka-shi, Toyama 933-0981,
Japan
TEL: +81-766-32-1590 FAX: +81-766-32-1591
Plants: Takaoka, Himi, Tsuruga• Manufacture of optical films

Zeon Corporation – Mizushima Plant
2767-1 Kojima Shionasu Aza Niihama, Kurashiki-shi,
Okayama 711-8511, Japan
TEL: +81-86-475-0021 FAX: +81-86-475-1169
Zeon RIM Co., Ltd.
2767-22 Kojima Shionasu Aza Niihama, Kurashiki-shi,
Okayama 711-0934, Japan
TEL: +81-86-475-0621 FAX: +81-86-475-0620• Manufacturing, processing and sale of plastic molding
products

Zeon Corporation – Osaka Office
Furukawa Osaka Bldg. West 4F, 2-1-9 Dojimahama,
Kita-ku, Osaka-shi, Osaka 530-0004, Japan
TEL: +81-6-4797-8220 FAX: +81-6-4797-8225
Tohpe Corporation
1-5-11 Chikkoshinmachi, Nishi-ku, Sakai-shi, Osaka
592-8331, Japan
TEL: +81-72-243-6411 FAX: +81-72-243-6415
Plants: Ibaraki, Mie, Kurashiki, Kyushu• Manufacturing and sale of paints and chemical products

Zeon Corporation – Nagoya Office
Ichigo Fushimi Bldg. 7F, 1-18-24 Nishiki, Naka-ku,
Nagoya-shi, Aichi 460-0003, Japan
TEL: +81-52-209-9145 FAX: +81-52-209-9147

Zeon Chemicals Yonezawa Co., Ltd.
3-446-13 Hachimanpara, Yonezawa-shi, Yamagata
992-1128, Japan
TEL: +81-238-29-0055 FAX: +81-238-29-0053• Manufacturing, processing and sale of aromatic
chemicals, the intermediate of medicine andagricultural chemicals and RIM formulation liquid

River Xemex Co., Ltd.
2-11-17 Osachigosho, Okaya-shi, Nagano 394-0082,
Japan
TEL: +81-266-21-2131 FAX: +81-266-21-1550• Manufacture of medical devices

TFC Inc.
34-23-2 Azono, Tsuruga-shi, Fukui 914-0141, Japan
TEL: +81-770-21-1711 FAX: +81-770-21-1775• Manufacturing of optical films

Zeon Opto Bio Lab Co., Ltd.
234-1 Konaka-cho, Sano-shi, Tochigi 327-0001, Japan
Tel: +81-283-23-7061 Fax: +81-283-23-7054• Mold processing of plastic products

Zeon Polymix Inc.
1-11-1 Ishizue, Otsu-shi, Shiga 520-2272, Japan
TEL: +81-77-546-1223 FAX: +81-77-546-6099
Plants: Otsu
• Manufacturing compound of synthetic rubber(carbon masterbatches)

ZEON GROUPCORPORATE REPORT 201922

Zeon Chemicals L.P. Kentucky Plant

Zeon’s Business and Strategy
This section describes Zeon’s business and strategy in the Enterprise Blueprint for 2020,
with the target of “Over 500 billion yen in consolidated net sales” and the mission“Zeon makes the future today through the power of chemistry.”

Interview with the President

P. 24

Zeon’s Business and Strategy
Elastomer Business

P. 27

Specialty Materials Business

P. 29

Research and Development (R&D)

P. 31

Corporate Governance

P. 33

23

ZEON GROUPCORPORATE REPORT 2019

Interview with the President

Further growth and corporate
culture transformation torealize the future today
President Kimiaki Tanaka outlines where Zeon Group is
today and its outlook for the future in a Q&A format.

Kimiaki Tanaka
President
Zeon Corporation

Q.1 What is the current situation in terms of the economic environment and for the Zeon Group, andwhat is the situation in Zeon’s Elastomer Business and Specialty Materials Business?

A.1 [Overview] ‌Achieved sales scale of 330 billion yen for two consecutive years. Improving profitability inthe Elastomer Business has been a challenge, while the Specialty Materials Business has
seen growth in specialty chemicals, battery materials, and cyclo olefin polymers (COP).

●Fig. 1: Consolidated Results by Segment
Net sales ■Specialty Materials ■ Elastomers ■Others
Operating income ●Specialty Materials
Net sales(100 million JPY)

Operating income
Consolidated net sales given in [ ](100 million JPY)
(intra-group transactions are excluded)

4,000
3,500
3,000

[2,956][2,876]

299

308

206

2,000

207

1,500

1,789

0

[3,327]539[3,375]

331
543

350
300

490

2,500

500

400

389

580

1,000

Elastomers ◆Total

1,662

94

222
167
1,946

1,981
177

200

161

150
100

98

710

750

865

851

2015

2016

2017

2018 (FY)

Phase II

250

SZ-20 Phase III

50
0

Sales in FY 2018 were higher than the previous fiscal
year to post a new record high for two consecutive years.
Nevertheless, challenges related to profit remained.
In the Elastomer Business, sales volumes both in Japanand globally were brisk with increased revenue. Meanwhile,
there were large fluctuations in prices for raw materials,
and we were not able to sufficiently reflect these in our
product pricing, resulting in decreased profit. (See also →P. 27)The Specialty Materials Business posted decreased
revenue and profit. Sales of optical films for smartphones
were flat in part due to customers adjusting their inventories, while sales of specialty chemicals, battery materials,
toners, and COP saw steady expansion and were able tocompensate for the lackluster sales of optical films. (Seealso → P. 29)
In FY 2019, the Elastomer Business is expected to continue seeing fluctuations in the prices of raw materials. The
Specialty Materials Business is expected to continue seeing
fluctuations in the smartphone market. Considering a rangeof economic issues in Europe and the trade friction between the United States and China, we believe that the FY
2019 business environment will become more challenging,and plan to develop markets and new products with anawareness of the risks.
ZEON GROUPCORPORATE REPORT 201924

Interview with the President●Fig. 2: The Enterprise Blueprint for 2020 and the Mid-term Management Plan SZ-20 Phase III: Groupwide strategy

Enterprise Blueprint for 2020
Zeon makes the Future Today through the Power of Chemistry
Zeon will continue to contribute to the realization of customer dreams
and a prosperous society through employees’ individual growth.

Targeting consolidated net sales over 500 billion yen in FY 2020
SZ-20 Phase III: Groupwide Strategy

GrowthCulture[1] Reinforce the combined strengths of the Zeon
Group. Explore ways of going beyond boundaries
and collaborating with external players to provide
solutions globally as a contribution to society.
[2] Accelerate the pace of new business creation andproduct development in key development areas: global
environment, smart devices, and health and living[3] Cultivate a corporate culture that places value on
taking proactive action by harnessing diverse ideas
and implementing them.

Q.2 How is the progress of efforts to achieve the companywide strategy (Fig. 2) of the SZ-20 Phase III
mid-term management plan?

A.2 [Overview] ‌The mid-term management plan prioritizes transforming our corporate culture that is thefoundation of our competitiveness, and we are gradually seeing results. We are seeing
progress with activities to implement our growth strategy to move closer to our sales
targets as well as investments that are a part of this.

Our Enterprise Blueprint for 2020 was originally drawn up
from a discussion of what we wanted to be in 10 years in our
mid-term management plan SZ-20, which started in 2011.
We are in the manufacturing industry, so we see sales of our
products and services that customers lay out capital to buy asa measure of our social contributions. While setting ambitious
sales targets, we aim to achieve the goals of the Enterprise
Blueprint for 2020 and have implemented internal reforms ofour corporate culture. This framework remains the same in SZ20 Phase III as well, which is our mid-term management planfrom FY 2017 to FY 2020. Through our Taimatsu (Torchlight)
activities and Mudadori (waste elimination) activities, I cansense that forward-looking thinking and work autonomy are
becoming instilled in our company.
We will maintain our FY 2020 sales targets until the endof FY 2020 and also resolve to continue our efforts until thevery end to move close to these targets, based on the ongoingreform of our corporate culture.
Standing on the foundation of our transformed corporate
culture, part of our growth strategy in terms of research anddevelopment is narrowing down our key development areas

25

ZEON GROUPCORPORATE REPORT 2019

to the three areas of Global Environment, Smart Devices,and Health and Living. We introduced a new multi-review
process and Innovation Highway framework in 2017, which
are currently operating. (See also → P. 31, Research andDevelopment ) The multi-review process aims to encourage
development of research themes by receiving wide-ranging
viewpoints from influential persons inside the company. The
Innovation Highway searches for research themes with thepotential to become new businesses in the mid- to long term.
In the two years starting in FY 2017, close to 100 themes havebeen explored, and four became research themes in FY 2018.
We will continue to conduct this kind of theme exploration.
We are also continuing to look at M&A as a means of
discontinuous growth. ZS Elastomer Co., Ltd., establishedin 2017 with Sumitomo Chemical, is seeking to maximize
synergies through the integration of its sales and R&D functionsin the S-SBR Business, new product development, further
strengthening of its cost competitiveness, and ensuring
supply stability. Many other matters are also under discussion,and ones that have not yet been realized will continue to beinvestigated.

In addition, decisions have been made on a numberof capital investments that will facilitate expansion of our
production capacity. There were four capital investment
decisions made in the Elastomer Business. We established Zeon
Chemicals Asia Co., Ltd., which manufactures and sells acrylic
rubber in Thailand, expanded the capacity of the Kawasaki Plant
for Zetpol® specialty cross-linked type, set up a production plant
for high-concentration NBR latex, and set up a production plant
for rubber compounds in Thailand. In the Specialty Materials
Business, we set up new production facilities for biaxially
stretched optical film for TVs in Tsuruga City, and expanded our
production capacity for base films in Takaoka City.
In terms of new products, we have released COP withmore advanced performance and new products in the Medical
Business, and are developing applications for composite
materials in the Single-Walled Carbon Nanotube Business, suchas O-rings with improved durability and an electromagnetic
absorber compatible with 5G. Carbon nanotubes are able toeffect a wide range of amazing characteristics, but may only be
used in very small amounts depending on the application. We willclosely evaluate profitability in each venture as we move forward.
In terms of new services, we began providing locally based
technical support for specialty rubbers in 2017 through the
Asia Technical Support Laboratory (ATSL) in Singapore. Thisis contributing to raising Zeon’s presence in the Asian region.
The marketability of the microfluidic chip prototype provision
service using COP that we undertook in 2017 has been

confirmed, and we have established the new company Zeon
Opto Bio Lab Co., Ltd. (See also → P. 7, Highlight 2)
These are some of the many activities we have steadily
implemented to create results, which can be seen in thetangible form of expanded sales on the scale of 330 billion yen.

Q.3 What is the status of diversity efforts, strengthening CSR, and corporate governance?
A.3 [Overview] ‌We are continuing to address diversity through management-led initiatives. We became asignatory to the United Nations Global Compact and have established a human rights
policy.

FY 2019 is the third year in which we have implemented
major measures for diversity. There have been manymeasures, including communicating information to employees
and externally, holding dialogue with mid-level employees,
mainly women, and holding managerial trainings. Employee
interest is also very high, and I have a renewed sense of thesignificance of continuing these measures in the future as well.
Among them, we are painfully aware of the need for education
to reform the awareness of managers. In addition to this, I
believe it is very important to create an environment thatfacilitates mutual understanding, where employees can easily
turn to their co-workers and bosses for advice. Programs thatare designed to improve work–life balance include a hotline
set up for caregiving consultations and the start of a trial
work-from-home scheme.
In terms of strengthening CSR, we became a signatory to theUnited Nations Global Compact in July 2019 and declared ourparticipation in the creation of a global framework to realize
sustainable growth. We also established and released the Zeon
Group human rights policy in August 2019. Going forward, we
will strengthen our CSR management beginning with CSR
procurement using global standards. In terms of the SDGs as

well, we have selected the goals that are deeply connected toZeon’s business and plan to hold discussions on how to
implement initiatives and take concrete steps in the future.
Regarding corporate governance, there seems to be theneed to build on our system in light of recent changes togovernance and social factors. We have an establishedpractice of assessing risk in our Risk Management Committee,
and also use helplines. People’s efforts are needed to maintainsafety, and in the same way people’s efforts are also needed tomaintain good governance. We will continue our efforts withthis awareness.
Zeon Corporation’s stated company goal is to meetsociety’s expectations by offering unique products that cannot
be imitated by any other company. In other words, we provide
new value to society through original technologies andproducts to simultaneously achieve business profit and meetthe expectations of society. Society’s expectations are
becoming broader to include aspects such as the SDGs and
ESG, and we will meet these expectations as well. In addition,
we have not forgotten about meeting the expectations of ouremployees. We aim to be a company that provides value to allof our stakeholders.

ZEON GROUPCORPORATE REPORT 201926

Zeon’s Business and Strategy

Elastomer BusinessIn elastomers, our main business involves the three fields
of synthetic rubber, synthetic latex, and chemical
products, the main raw materials of which are C4 and C5
fractions derived from naphtha. In 1959, Zeon became
the first company in Japan to mass-produce synthetic
rubbers. Even today, the Elastomer Business is the core
Zeon business, providing over 50% of total net sales andoperating income.

+3.5

billion JPY

Net sales(+2%)(100 million JPY)

2,000

1,789

1,946

2019

1,981 (forecast)
1,900

1,662

1,500

1,000

500

0

Segment
ratio

2015

2016

2017

2018

2019 (FY)58%

Business Overview and Future Strategy
FY 2018 performance in the Elastomers field exceeded theinitial forecast for both sales and operating income. Sales inparticular recorded a new record high. However, the effects ofthe trade friction between the United States and China, thesense of unease in oil- and gas-related industries in the UnitedStates, and the drop in the general-purpose product market in
the second half of the fiscal year held down profits. These trends
are predicted to basically continue in FY 2019 as well.
In the Rubber Business, a strong base of demand for thegeneral-purpose rubbers of E-SBR and BR for tires is somewhat
lacking, while demand and shipment volumes for S-SBR used inhigh-performance tires are seeing solid growth. ZS Elastomer,
which operates the S-SBR business in a merger with Sumitomo
Chemical, integrated its research functions in April 2019
following the sales functions. As a result, sales and R&D are
now fully integrated units. Going forward, production fields will
also be integrated, with the goal of becoming a more attractive
S-SBR supplier for customers.
In the specialty rubber field, acrylic rubber, hydrogenatednitrile rubber (Zetpol®), and NBR are all posting good
performance, and we continue to operate at full capacity.
Moreover, the increase in the production capacity of the

Hiroyuki Hirakawa

Director & Senior Corporate Officer
Elastomers and Chemicals Business
Division Manager – Logistics

27

ZEON GROUPCORPORATE REPORT 2019

Kawasaki Plant will be completed in fall 2019 to create astructure able to effectively meet expanding demand. In theacrylic rubber segment, we established Zeon Chemicals Asia
Co., Ltd., a new manufacturing and sales company in Thailand.
We plan to complete construction in spring 2020 to be able
to produce rubber on a scale of 5,000 tons annually, and havesecured land that can be used to expand our production facilities
if demand grows in the future to definitively meet demand in ourtarget priority markets of the ASEAN and Indian regions and theChinese market.
To enhance our presence as a specialty rubber manufacturer
in the target markets, we established a sales company in India
in 2015, and the Asia Technical Support Laboratory (ATSL) in
Singapore in 2017, which provides advanced technical services in
the region. Manufacturing specialty rubber products that are usedin high-performance autoparts requires advanced formulationand processing technologies. Even with the same formulations as
used in Japan and Western countries, the same quality may not
be attained when locally available agents are used. ATSL strives
to provide targeted solutions to local customers using locally
based approaches and service.
The Chemicals Business continues to operate at full capacity.
However, profitability has also declined from worsening market
conditions for general-purpose SIS for packaging adhesive
tape. We are now shifting the business to higher value-added
products. Of these, we have established a strong reputationin the Asymmetric SIS market and have high expectations for
future expansion of demand.
We are also engaged in full production for synthetic latexes.
For the market as a whole, NBR latex for disposable gloves
continues to show the promise of robust growth. We improved
our production capacity for special grade for cosmetic puffs,
for which we take 90% of the global share, by 20% over FY
2018 to meet growing demand. Going forward, we will focus ondevelopment of glove latex for special uses and surgery, which
offer higher profitability.

Elastomer Business breakdown (FY 2018)

Operating income (ratio)

Sales quantity(100 million JPY)

(1,000 tons)

350

250
200

207

222

206

billion JPY(-20%)

177

150

50

2015

2016

2017

2018

Chemicals

138

(⬆5%)

1,388

(⬆1%)

188

(⬇2%)

347

(⬆10%)

20

11.7 8.9

12.4

11.6

(⬇5%)

(forecast)

144

355

(⬇1%)

123

Latex

2019

(%)

100

0

Rubber-4.5

300

Net sales(100 million JPY)

10

2019(FY)

0●Elastomers: Higher revenue, lower profit
Higher sales prices increased revenue in the Rubber
and Chemicals businesses. The Chemicals Businesssaw growth in Asymmetric SIS in particular. Profit isimproving as a result of price revisions.

52%

Segment
ratio●Business model and social value creation of Zetpol®
Business conditions (SWOT analysis)• Declining advantage of Zeon’s NBR from larger

Strengths(S)• Zeon original technologies (polymerization,hydrogenation, modification [specialty cross-linking])• Global technical support

Weaknesses number of players• Competition for rubbers other than NBR(W)

Opportunities(O)• Demand in ASEAN + India(Penetration of engine-powered vehicles inregions with undeveloped EV environments[infrastructure, etc.])

Threats(T)• Applications limited to engine-powered vehicles• Of automotive applications, demand isstagnating from the higher proportion of EV• Country risks as a result of globalization

Key management resources (inputs)
Financial capital
Manufacturing capitalIntellectual capital
Human capitalSocial capital
Natural capital—
Original manufacturing technology, manufacturing processes
Patents (manufacturing, composition, applications), know-how
Hiring and promotion of diverse human resources
Manufacturing site locations, local workers
Locating plants and warehouses for convenient shipping to main users

Outcome: What kind of social value does this create?
(From an outside-in perspective)
Greater comfort and convenience in people’s lives
Through automobiles, we offer new and innovative, inimitable
solutions using our original materials technology to contribute torealizing greater comfort and convenience in people’s lives.

The value chain and priority SDGs
• Original manufacturing technology(hydrogenation, specialty crosslinking)• Meeting customer needs

Multiple production sites
in Japan and globally➡ Creation of employment

Automotive elastomers such as Zetpol® offer excellent
durability with heat and oil resistance. We arecontributing to improved automotive performance bymeeting the demands of automakers who use ourelastomers in their engine-powered and hybrid vehicles.

Strengthening
positive
effects
R&D(Elastomer
Laboratory)

Minimizing
negative
effectsRawmaterials(Tokuyama
Plant)

Extracting raw
materials from C4
fraction using
original technology

NBR(Tokuyama
Plant)

Zetpol®
(Takaoka Plant)

Primary customers(parts manufacturers)
Higher-order customers(automakers)

Consumers

Product manufacturingwith a focus on theenvironment andquality

ZEON GROUPCORPORATE REPORT 201928

Zeon’s Business and Strategy

Specialty Materials BusinessSpecialty materials refers to materials and components
offering high added value due to their macromolecular
design and processing technology.
Focusing on future growth areas, we are positioning IT
components (optical, packaging, electronics), energy
materials, and medical devices as our three main businessareas.

Net sales-1.3

billion JPY(-2%)(100 million JPY)

1,000

750

710

865

851

2017

2018

750

2019

(forecast)

860

500

250

0

Segment
ratio

2015

2016

2019(FY)

25%

Business Overview and Future Strategy
Performance in the Specialty Materials Business in FY
2018 was largely in line with expectations for both sales
and profit.
The Film Business accounts for a large volume of theSpecialty Materials Business. Creating growth in the Film
Business is key to increasing overall sales. In 2018, we
decided to increase the production capacity of our opticalfilm plants in Tsuruga City and Takaoka City. This move is
expected to contribute to BCP from plant decentralizationand have supplemental effects on the local economies
from new employment. The new line at Tsuruga Plant willmeet needs for larger LCD panels and be able to produce
retardation films with the world’s largest width (2,500-mmclass). ZeonorFilmTM enjoys high demand in LCD panels
for large-screen TVs from its high dimensional accuracy
and other characteristics. In addition, Chinese electronics
manufacturers are turning their attention to Africa andother emerging markets in terms of TV sales volumes, andongoing market expansion is anticipated. We will continue
to refine our technologies to remain the preferred supplier.

Hiroshi Fujisawa

Director & Corporate Officer
Specialty Business
Division Manager – Specialty Chemicals

29

ZEON GROUPCORPORATE REPORT 2019

Demand for small- and medium-sized films for advanced
smartphones did not see major growth, but demand continues
to gradually increase for educational tablets. Global demandfor educational tablets is expected to grow, meaning that themarket for films for LCD should see ongoing expansion.
We will continue to develop advanced products thatleverage the characteristics of cyclo olefin polymers (COP).
The microfluidic chip prototype provision service is seeing
stable expansion and was spun off to establish Zeon Opto
Bio Lab in April 2019 to build out its structure for medical
packaging applications leveraging the property of keeping
proteins from solidifying.
Demand for battery materials (energy materials) is also
rising sharply with increased demand for electric and hybrid
vehicles. The Chinese electric vehicle market has been
expanding for some time, and Europe is now seeing rapid
expansion, so demand for our battery materials is growing.
Demand for specialty chemicals as a whole remains
brisk, continuing the same trend from last year. Cheap
specialty chemicals launched by new manufacturers
have been weeded out from tightened environmental
regulations. Market conditions are recovering, and demandfor Zeon’s products is rising.
In the Medical Business, we launched a new catheter
for removing bile duct stones and a new bile duct stent in
FY 2018. Our guide-wire equipped intravascular pressure
sensor continues to perform well. We will also launch new
products in FY 2019, mainly in the endoscopic section.
In our Single-Walled Carbon Nanotube Business, weare conducting ongoing research on various composite
materials and are beginning to commercialize somematerials. These include shale gas O-rings and a pad-type
thermal interface material (TIM). We will continue to pursue
research to develop products leveraging the characteristics
of carbon nanotubes.

Specialty Materials Business breakdown (FY 2018)

Operating income (ratio)-0.6

billion JPY(100 million JPY)

200

(-4%)

161

167

160

2019

Specialty
chemicals(forecast)

170

Specialty
plastics

120

98

82

80

13.1

11.6

40

0

2014

Medical, etc.

19.4 18.9

2016

2017

% change

276

⬆13%

519

⬇

8%

57

⬆

1%

(%)

20

●Specialty Materials: Lower revenue and profit
Specialty Chemicals continued to post solid
performance with revised pricing. Demand forbattery materials as well as COP was strong. Demandfor optical films was weak.

10

2015

Net sales(100 million JPY)

0

2018(FY)48%

Segment
ratio●Business model and social value creation flow of the Film BusinessBusiness conditions (SWOT analysis)• Integrated production from monomers to optical films

Strengths • Originally developed resins, originally developed film processing technology• Capabilities enabling rapid deployment of market(S)
demands in resin design• Greater penetration of OLED

Threats(T)

Opportunities• Larger LCD(O)• Display production shift to China
Key management resources (inputs)
Financial capital
Manufacturing capitalIntellectual capital
Human capitalSocial capital
Natural capital

Weaknesses• High dependency on display products(W)—
Original manufacturing technology, manufacturing processes
Method patent of resin and film
Hiring and promotion of diverse human resources
Manufacturing site locations, local workers
Locating plants and warehouses for convenient shipping to main users• Maturation of LCD market and increased
competition

Outcome: What kind of social value does this create?
(From an outside-in perspective)
Greater comfort and convenience in people’s lives
Through LCD and OLED products, we offer new and innovative,
inimitable solutions using our original materials technology tocontribute to realizing greater comfort and convenience inpeople’s lives.

The value chain and priority SDGs
• Original manufacturing
technology (Sheet extrusion
process, etc.)• Meeting customer needs

Multiple production sites
in Japan➡ Creation of employment

Our film products offer excellent optical properties, low water
absorbency, low moisture permeability, outstanding heat
resistance, low outgassing, and dimensional stability. They are
primarily used in retardation films for LCD panels.

Strengthening
positive
effects
R&D(Precision Optics
Laboratory)

Minimizing
negative
effects

Raw materials(Mizushima
Plant)

Extracting raw
materials from C5
fraction using
original technology

Resins(Mizushima Plant)

Optical films(Optes)Short-term
customers(Polarizing plate
manufacturers)

Higher-ordercustomers(Set
manufacturers)

Consumers

Product manufacturingwith a focus on theenvironment andquality

ZEON GROUPCORPORATE REPORT 201930

Zeon’s Business and Strategy

Research and Development (R&D)
The R&D Center conducts Zeon Group’s R&D activities
with a workforce of more than 400 researchers. In
addition to the R&D Center’s 10 research buildings
located next to the Kawasaki Plant, we have establishedother laboratories located near production plants. We
develop new products and improve existing products
through close collaboration with business units to meetthe needs of customers. Additionally, we are exploringnew materials, developing and using new analysis andsimulation techniques, and developing and improving
production processes and equipment.

R&D expenses(100 million JPY)

200

136

141

2014

2015

150

151

165

132

100

50

0

2016

2017

2018 (FY)New Systems for More Efficient R&D
It has been two years since we began implementing theInnovation Highway framework and multi-review process.
Our most critical mission now is to increase our research
output. To do this, it is important that we 1) definitively
produce outcomes from our current research themes,and 2) assess whether the outcomes can become large
businesses.
The research flow encompasses the three stages of
discovery, research, and development, and decisions must
be made at each of these stages.
Discovery stage: Select research themes considering their
future market potential
Research stage: Produce and evaluate lab samples
Development stage: Create actual products. Evaluate thescale-up from the lab to a plant and stable production.
Using the Innovation Highway, we select themes inthe discovery stage based on expert views and market
information. Multiple candidates were also proposed lastyear, and we will continue to explore themes.
In the multi-review process, we review projects at
the research and development stages from a range ofviewpoints both inside and outside the development division
to determine whether they truly meet customer needs andwhether there is a market for a commercialized product. We
conducted multi-reviews for themes that had reached thedevelopment stage up through last year. From this fiscal year,
we are moving up our assessments and conducting multi-

reviews at earlier stages to enhance efficiency.
In addition, we are selecting and concentrating our limited
resources. By selecting themes nearing commercialization,
concentrating staff and resources on them, and bringing
together our expertise, we are increasing the potential
to commercialize products in a shorter timeframe. We
are also increasing the potential to rapidly commercialize
subsequent products by quickly moving on to tackle thenext themes. We are actively using simulation technology
and outside research resources as well to further increase
the efficiency of research and development.

●R&D System
Research &Development Center

Foundation Technology Laboratory
New Materials Development Laboratory
CNT Laboratory
Elastomer Laboratory
Functional Particles Laboratory
C5 Chemicals Laboratory (Mizushima)
Specialty Chemicals Laboratory
Composite Material Laboratory
Advanced Performance Materials Laboratory
Specialty Plastics Laboratory
Precision Optics Laboratory (Takaoka)
Medical Laboratory (Takaoka)

Sachio Hayashi

Director & Senior Corporate Officer
Research & Development
Division Manager – Research & Development Center

31

ZEON GROUPCORPORATE REPORT 2019

Manufactured Product Development Laboratory
Production Technology Laboratory

●Multi-review process to strengthen output at an early stage and Innovation Highway framework for mid- to long-term R&D

2030 and after

Until 2020
Launch line

Achieving results at an early stage
through selection and concentration

Evaluate progressfrom multifaceted
viewpoints in themulti-review
processKey
development
GlobalHealthareas
Environmentand Living

Suspension or
postponement when
KPIs are not met

Research theme ideas

Smart
Devices

Review and select research themes
anticipated to generate resultsin the mid- to long term using theInnovation Highway

Changing the research culture
In SZ-20 Phase III, we added the phrase “throughemployees’ individual growth” to the Enterprise Blueprint for2020. The FY 2019 policy for the Research & Development
Division also places a strong focus on changing how we doresearch. More than just a slogan of “change,” the policy
embodies our strong determination to change. Researchers
will change themselves, and we will change Zeon’s researchand development as a whole. To achieve this, I am also
encouraging our division to get new ideas by going outsideand conducting joint research with groups in other industries
and conducting activities such as industry–academia–
government collaboration.
In our research structure, we have elevated andestablished the Composite Material Laboratory from a project
team. We aim to use the laboratory to speed up productcommercialization. Our research and development expenses
also remain on the same scale as before. We will invest in apilot plant for product commercialization and strengthen our
analysis function in the Foundation Technology Laboratory.

Intellectual Property Strategy
We always make efforts to expand our intellectual
property rights with our policy of “patent first” to enhance
our competitiveness and contribute to industry development
in line with our corporate strategy. We define “patent first”
as filing patent applications based on our patent portfolio
strategy prior to product development, product launchannouncements, and distributing samples. We also define

Maintain a good balance ofshort-term and long-term R&D
themes in the key developmentareas

it as developing products that do not infringe on othercompanies’ intellectual property rights by conducting patent
searches from the early stages of development.
Product differentiation is achieved by strategicallyprotecting individual technologies with multiple intellectual
property rights rather than a single application of rights. We
will enhance our competitiveness not only for products but
also through acquiring intellectual property rights related
to manufacturing processes and applications and keeping
our manufacturing know-how confidential. We will also
rigorously evaluate whether our intellectual property is
being used effectively.

Assessing real needs
We are working to more closely and more quickly assess
whether customer needs truly match Zeon’s technology seeds.
We are seeking to create not materials that would be good tohave, but materials that are indispensable. If the materials thatare indispensable are only offered by Zeon, we will be selectedby customers with the potential to turn the materials into
major businesses. This is true differentiation.
In the long term, we are also aware of the momentum insociety to move away from petrochemicals and reduce theuse of plastics. Together with Yokohama Rubber Co., Ltd.,in July 2018 we jointly developed world-first technology to
produce isoprene, a tire raw material, from biomass. This is
how we view true needs as being part of society’s hopes andexpectations, and will pursue uncovering true needs from thewants and needs of a wide range of stakeholders and feedingthem into our research and development.

ZEON GROUPCORPORATE REPORT 201932

Zeon’s Business and Strategy

Corporate GovernanceCorporate Governance Report (PDF)

Visit our
corporate
website for
more
information

Zeon aims to increase profits and enhance corporate
value on an ongoing basis while respecting and balancing
the various interests of its shareholders and other diverse
stakeholders. To this end, we are continuing efforts tobuild a system that enables efficient and sound corporate
management through corporate governance.
Maintaining a system of corporate governance allows

http://www.zeon.co.jp/csr_e/management.html
Basic Policy on Corporate Governance (Japanese Only)

http://www.zeon.co.jp/content/200281514.pdf

us to clarify the functions and roles of each organizational
entity within the company and to carry out rapid decisionmaking and execution. We are also improving corporatetransparency through appropriate monitoring anddisclosure of business activities and their effects. We aredetermined to further enhance our corporate governancesystem to effectively carry out these aims.

●Corporate Governance System
General Meeting of Shareholders(Appointments/
dismissals)

Decisions/Supervision(appointments/dismissals)
RequireDirector andadviceOfficer Nomination and
Board of Directors
Compensation Committee Suggestions

Auditing

Corporate Auditors (Board)
Auditing

Decisions/Supervision(selections/dismissals)

Collaboration

Executive Committee
Department ofInternal Auditing(Dismissals)
Collaboration

Financial Auditors

Auditing Personnel

Financial
AuditsBusiness Execution &Internal Controls System

Representative Director
Reporting

CSR Conference
CSR
Basic Policy
Committee

Risk Management Committee

Reporting(external)

Compliance Committee

External
lawyers

Information Management Committee
Environmental & Safety Affairs Committee
Quality Assurance Committee
PL Committee

Reporting (external)

Internal audits(Appointments/
Collaboration dismissals)(assistance)

Public Relations Committee
Business divisions, indirect departments, laboratories, and plants
Reporting(external)

Control/monitoring

Subsidiaries and affiliates●Board of Directors
The Board of Directors meets, in principle, every monthwith corporate auditors in attendance to ensure compliancewith applicable laws and the Articles of Incorporation in theexecution of business. In addition to its statutory duties, therole of the Board of Directors is to make important decisions
about basic management policy, strategy, and other aspectsof business execution. As of July 2019, the Board of Directors
consists of 10 directors, including three outside directors.
●Executive Committee
The Executive Committee, in accordance with the Executive
Committee Rules, comprises the President and executive
officers ranked senior corporate officer or above and meets
twice a month in principle to examine and make decisions onimportant business matters after due deliberation involving
consultation with attending full-time corporate auditors.
Important business matters stipulated in the Board of Director
Rules are examined and decided by the Board of Directors.

33

ZEON GROUPCORPORATE REPORT 2019

Reporting(external)

Reporting(external)●Board of Corporate Auditors
The Board of Corporate Auditors comprises five members,
including three outside corporate auditors. The Board
reports, discusses, and adopts resolutions on importantbusiness matters. In accordance with the auditing guidelines
established by the Board of Corporate Auditors, eachcorporate auditor audits directors’ execution of their duties
through various means, such as attending Board of Directors
meetings and monitoring business operations, including
subsidiaries’ operations.
●Director and Officer Nomination and Compensation Committee
The Director and Officer Nomination and Compensation
Committee is placed under the Board of Directors as anadvisory organ for the purpose of strengthening the objectivity
and transparency of the Board of Directors functions related
to nominating directors and officers and deciding theircompensation. The committee is composed of four members,of which two are independent outside directors.

Director and officer compensation
We use a performance-based compensation system as
one type of healthy incentive to achieve sustained growth.
Individual compensation is decided by the Representative
Director after receiving the advice of the Director andOfficer Nomination and Compensation Committee.

In the case of committing a serious violation of the law,or an act violating company policy either intentionally or
through gross negligence, or other reason that is cause fordismissal of the director or officer as provided in internal
company regulations, the Board of Directors deliberates thecase and dismisses the director or officer concerned basedon the Companies Act and other legislation.

●Director and officer compensation structure

Evaluating the effectiveness of the Board of Directors

Internal Directors• Fixed-amount cash compensation• Performance-based cash compensation• Restricted stock compensation system

Corporate Officer• Fixed-amount cash compensation• Performance-based cash compensation

Outside Director• Fixed-amount cash compensation

Appointment and dismissal of directors and officers
Nominations of candidates for directors and auditors
and appointments of corporate officers are made basedon the requirements provided in the Basic Policy on
Corporate Governance, with advice given by the Director
and Officer Nomination and Compensation Committee,
a recommendation by the Representative Director, and adecision by the Board of Directors.

Questionnaires are conducted for directors including
outside directors and auditors about the operations of theBoard of Directors. Questionnaire responses are analyzed
and evaluated by a third-party outside lawyer entrusted toperform the task, who has provided the opinion that our
Board of Directors operates with a high degree of overall
effectiveness.

Constructive dialogue with shareholders
The Department of Corporate Communications manages
dialogue with shareholders, which is overseen by the
corporate officer in charge of CSR. Accurate, impartial
information is provided in a timely manner. We continue tohold briefings for investors quarterly, expand the materials
released on our website, and increase opportunities
for dialogue apart from individual meetings, such as
participating in company briefings for individual investors.

Risk Management
The Risk Management Committee promotes Zeon’srisk management. Activities to prevent legal violations
and ensure legal compliance are conducted under theCompliance Committee. The Information Management
Committee promotes the appropriate management of
information from when it is received to when it is destroyed.

Internal reporting system
We have implemented an internal reporting system atZeon to gather information about potential risks at an earlystage and make it easier to address them. In addition to ourinternal reporting line, we have also set up a reporting linewith external lawyers.
The Risk Management Committee investigates the factsof reports that are made and responds as appropriate, suchas by instructing the internal organization to implement
countermeasures based on the results of the investigation.

●Internal reporting flow
Internal
Superior

External
Risk Management
Committee

External lawyer
reporting line

Review of facts andimplementation ofcountermeasures

Receive report,
record facts,
notify of result

Whistleblower
Discovery of risks
Discovery ofcompliance violations

Compliance Hotline

Report or notification
Feedback

ZEON GROUPCORPORATE REPORT 201934

Zeon’s Business and Strategy

Directors and Officers (as of July 1, 2019)
Visit our corporate Corporate Governance Report (PDF)
website for more
http://www.zeon.co.jp/csr_e/management.html
information

ChairmanPresident

Director & Senior Corporate Officer

Director & Senior Corporate Officer

Elastomers and Chemicals Business
Division Manager – Logistics

Production and Engineering Technology
Division Manager – Production Center

Naozumi Furukawa

Kimiaki Tanaka

ProfileProfileProfileDirector & Senior Corporate Officer

Director & Corporate Officer

Director & Corporate Officer

Research & Development
Division Manager – Research &Development Center

Specialty Business
Division Manager – Specialty Chemicals
President of TFC Inc.
President of Zeon CSC Corporation

Administration,
Division Manager – Human Resources,
General Manager – Human Resources,
General Manager – China Business
Administration

Chairman of
TOHPE CORPORATION

April 1967 Joined Zeon
June 1997 Zeon Director
June 1999 Zeon Senior Director
June 2001 Zeon Executive Director
June 2003 Zeon President
June 2013 Zeon Chairman (current)

Sachio Hayashi

ProfileApril 1980 Joined Zeon
June 2015 Zeon Corporate Officer
June 2017	‌Zeon Director and SeniorCorporate Officer (current)

35

ZEON GROUPCORPORATE REPORT 2019

April 1979 Joined Zeon
June 2005 Zeon Director
June 2007	‌Zeon Director andCorporate Officer
June 2011	‌Zeon Director and SeniorCorporate Officer
June 2012	‌Zeon Director andExecutive Corporate Officer
June 2013	‌Zeon President (current)

Hiroshi Fujisawa

ProfileApril 1980	‌Joined Zeon
June 2011	‌Zeon Corporate Officer
June 2017	‌Zeon Director andCorporate Officer (current)

Hiroyuki Hirakawa

April 1981 Joined Zeon
June 2008 Zeon Corporate Officer
June 2009	‌Zeon Director andCorporate Officer
June 2015	‌Zeon Director and SeniorCorporate Officer (current)

Kazuyoshi Matsuura

ProfileApril 1993	‌Joined Zeon
June 2017	‌Zeon Corporate Officer
June 2019	‌Zeon Director andCorporate Officer (current)

Toru Nishijima

ProfileApril 1981	‌Joined Zeon
June 2009	‌Zeon Corporate Officer
June 2013	‌Zeon Senior Corporate
OfficerJune 2014	‌Zeon Director and SeniorCorporate Officer (current)Director

Haruo Itoh

Adviser – Fuji Electric Co., Ltd.

Director

Director

Outside Director – Kobe Steel, Ltd.
Chairman of the Board

Senior Advisor –The Yokohama Rubber Co., Ltd.

Takao Kitabata

Tadanobu Nagumo

Audit & Supervisory Board
Member Shinichi Hirakawa

External Member Yuzuru Fujita

Adviser – ASAHI MUTUAL LIFE INSURANCE CO.

Member Takeo Furuya

External Member Akio Kohri

Chairman and Chief Executive Officer – ADEKA CORPORATION

External Member Nobutake Nishijima

Corporate Adviser – NIPPON TOCHI-TATEMONO Co., Ltd.

Corporate Officer Tsutomu Eguchi

Division Manager – Synthetic Latex
General Manager – Synthetic Latex

Corporate Officer Yoshiyuki Sone

Division Manager - Specialty Components

Corporate Officer
Corporate Officer Tomoyuki Kose

Managing Director of Zeon Kasei Co., Ltd.

Corporate Officer Tetsuya Toyoshima Director & Corporate Officer – Zeon Chemicals Incorporated
Corporate Officer Makoto Yokota

Division Manager – Corporate Administration
President – Zeon F&B Co., Ltd.
General Manager – Business Innovation Promotion

Corporate Officer Makoto Watanabe Plant Manager – Mizushima Plant
Corporate Officer Takafumi Kawanaka Plant Manager – Kawasaki Plant

Corporate Officer Erisa Watanabe	Manager – CSR Headquarters
Division Manager – CSRManager – CSR Promotion

Corporate Officer Satoshi Tominaga	‌Division Manager – Corporate Planning
General Manager – Corporate Planning

ZEON GROUPCORPORATE REPORT 2019

36

ZEON CSR

Zeon’s CSR

Charity activities for local elementary schools by Zeon Chemicals (Thailand)

Zeon’s CSR
We ensure compliance and conduct safe and stable production activities.
At our global business locations, we conduct business activities together with local residents
as a member of the local community.

Zeon’s CSR

P. 38

CSR Implementation Plan

P. 39

Environment

P. 45

Fair Operating Practices/Human Rights P. 46
Labor Practices

P. 47

Community

P. 49

37

ZEON GROUPCORPORATE REPORT 2019

Zeon’s CSR
Visit our corporate Zeon’s CSR
website for more
http://www.zeon.co.jp/csr_e/concept.html
information

At Zeon, we regard CSR activities as all activities undertaken to continue being“a company trusted and valued by society.” With all employees acting with anawareness of CSR, we ensure compliance and contribute to the global environmentand sustainable development through our corporate activities. In April 2010, weestablished the Zeon CSR Policy and the more specific CSR Code of Conduct. In
January 2011, we established our current CSR Management Framework.
The CSR Code of Conduct was revised in January 2018. This revision clearlyspecifies Zeon’s commitment to meeting society’s expectations, which represents
Zeon’s fundamental approach to CSR, and restructures the CSR activities that Zeon
undertakes.
Zeon CSR Policy (established April 2010)
1. We‌will ensure compliance and meet society’s needs for safety
and security
2. We‌
will contribute to sustainably developing society andprotecting the global environment through our corporate activities
3. We‌
will ensure that each and every Zeon person is aware of CSR
and acts accordingly

CSR Management Framework●Committee functions

The CSR Management Framework comprises the CSR Conference and eight
committees.
Chaired by the President and held six times a year, the CSR Conference is thechief decision-making body on matters relating to CSR. The CSR Conference isheld to review and finalize committee activities, initiatives, and annual activity
plans, and to give necessary instruction based on progress reports.
The committees report to the CSR Conference and advance CSR activities intheir specific areas. In October 2018, the Information Security Subcommittee,
which had been under the Compliance Committee, was moved to under the CSR
Conference as the Information Management Committee to improve information
security for the Zeon Group.

Risk Management Committee
Responsible for systematically preventing
potential risks and handling risks thatemerge.

●Zeon’s CSR Management Framework
President

CSR Headquarters

CSR
Coordination Division

CSR
Promotion Department

CSR Basic Policy
Committee

CSR Promotional
Committees at Offices
and Group Companies

General Affairs
Department

Risk Management
Committee
CSR Conference

Quality Assurance
Department
Antitrust Law
Regulatory Subcommittee

Legal Affairs
Department

Information Management
Committee

Export Security Control
Subcommittee

Department ofCorporate
Communications

Environmental & Safety
Affairs Committee

Corporate Governance
Subcommittee

Compliance
Committee

Quality AssuranceCommittee
PL Committee
Public Relations
Committee

CSR Basic Policy Committee
Provides guidance and support for CSR
Promotional Committee activities. Builds
systems to support making social
contributions.

Compliance Committee
Education and training in legal
compliance. Oversees three compliancesubcommittees.
Information Management Committee
Plan and implement Group-wide information
management and information security
measures. This includes audits of information
systems and information security education.
Environmental and Safety Affairs Committee
Plans and proposes environmental andsafety measures and monitors theirprogress.
Quality Assurance Committee
Activities related to quality assurance.
Reviews, takes action on, and make
improvements to QA problems.
PL Committee
Manages prevention activities, training,and emergency response related to
product liability.
Public Relations Committee
Enhances Zeon’s reputation and image
through communication activities. Discloses
necessary information at appropriate times.

ZEON GROUPCORPORATE REPORT 201938

Zeon’s CSR

CSR Implementation Plan
The Zeon Group’s CSR Implementation Plan has been formulated on the basis of ISO 26000, the international standard for
CSR. The CSR Implementation Plan specifies the progress that needs to be made in order to realize the Enterprise Blueprintfor 2020, in terms of ISO 26000’s Seven Core Subjects. The CSR Implementation Plan shows what measures the Zeon Groupis implementing in relation to the Seven Core Subjects, which embody society’s expectations.
In the future, we will further the dissemination of the CSR Implementation Plan both within and outside the Zeon Group,
and implement activities aimed at helping all stakeholders to understand Zeon’s CSR measures.

Structure of Zeon Group’s CSR Implementation Plan
ISO 26000
Seven Core
Subjects

Enterprise Blueprint for 2020 =To meet the expectations ofsociety

Activities currently
being implemented

Items for future
implementation

Society’s
expectations

Zeon Grouptargets

Initiatives toachieve our goals

Remaining challenges to achieve
the Enterprise Blueprint for 2020

Initiatives for the Enterprise Blueprint for 2020
While addressing the remaining challenges stated as“Items for future implementation” in the CSR
Implementation Plan, we will monitor how close we are to
the Enterprise Blueprint for 2020. We will then consider
what we need to do next to achieve the Enterprise Blueprintfor 2020 and update the items for future implementation.

Enterprise Blueprint for 2020

Zeon makes the Future Today
through the Power of Chemistry

Zeon will continue to contribute to the realization of customer
dreams and a prosperous society through employees’ individual growth.

Correlation between the SDGs and Zeon’s business activities
A large number of people and organizations are involved in the
supply chain, from obtaining the raw materials to production andproduct supply that form Zeon’s business activities. In this process,there are areas where we can exercise our influence. Many of our
products are also used in other products, including automobiles andbuildings. There are ways in which our value can contribute to resolving
issues faced by society.
Zeon is a company that provides materials to companies, and wecontribute to resolving issues faced by society throughout all of ourbusiness activities.

A. Contributions through our actions in the
supply chain, from securing raw materials
to production and product supply

ZEON
B. Contributions through products andprovided value using Zeon products

39

ZEON GROUPCORPORATE REPORT 2019

1. Corporate Governance Decision-making as an organization
Correlation with SDGs:
Goal 16: Peace, Justice and Strong Institutions
Goal 17: Partnerships for the Goals

Enterprise Blueprint for 2020
To meet the expectations of society

Details of current activities(■: Completed, △: Ongoing)

Future initiatives and targets

Decision-making with accountability andtransparency• Organizational decision-making is conducted
appropriately based on internal regulations• Business divisions carry out their operations
using the PDCA cycle based on policies• The process of decision-making takes into
consideration social and environmental
impacts‌△System to develop internal regulations in the
CSR implementation framework(Create internal rules → Apply to routine work)‌ Operations address corporate governance△(details of results below)• ‌Zeon Corporation’s Basic Policy on Corporate
Governance (Japanese Only)
http://www.zeon.co.jp/content/200281514.pdf•C‌ orporate Governance Report (Japanese Only)
http://www.zeon.co.jp/content/200323922.pdf

1. ‌Continue implementing our CSR framework,and periodically revise its operations basedon society’s expectations

Corporate governance• ‌Corporate governance functions effectively
and reasonably• M‌ any business processes are handled using
key business systems designed based oninternal regulations, and the overall framework
creates a very low level of error in processes• ‌When risks to corporate governance arise,systems operate to appropriately address therisks under the proper authority‌ Report corporate governance reports△(status of system for ensuring
appropriateness of business affairs)‌ Develop work systems△‌ Conduct corporate governance activities to△satisfy Japan’s Corporate Governance Code1. ‌Improve internal control level at Zeon Group
companies

Risk management• ‌Established a global crisis management
structure• ‌The Compliance Hotline is operated
appropriately■ ‌Create a risk table and periodically revise it■ ‌Evaluate risks using the risk table, andconduct the same across the Zeon Group(Japan/global)■ ‌Operate an internal reporting system■ ‌Continue sending out information andconducting legal education using the CSR
Code of Conduct and compliance texts

1. ‌Evaluate the risk table and give guidance
for improvements at divisions and Group
companies, and horizontally implement
successful cases
2. ‌Consider business risks broadly and manage
them in view of demands and society’s
expectations

Business continuity• ‌Independent business continuity
management (BCM) activities (establishinga BCM system, periodically revising BCM
through drills and other means, etc.) areconducted throughout the Zeon Group, andhave become established and reinforced■ ‌Examine and establish business continuity
management (BCM)■ ‌Create and periodically revise various
business continuity plans (companywide
BCP, division BCP, raw materials
procurement BCP, etc.)

1. ‌Support for establishing an independent
BCM structure through drills and othermeans (support so that individualorganizations can create the situation of
conducting the PDCA cycle for BCM bythemselves)

2. Human Rights Protect basic rights granted to all people
Correlation with SDGs:
Goal 1: No Poverty, Goal 2: Zero Hunger, Goal 3: Good Health and Well-Being,
Goal 5: Gender Equality, Goal 10: Reduced Inequalities

Enterprise Blueprint for 2020
To meet the expectations of society

Details of current activities(■: Completed, △: Ongoing)

Future initiatives and targets

Discrimination and vulnerable groups,
avoidance of complicity• ‌The section on respect for human rights
and prohibition of discrimination in the CSR
Code of Conduct has been shared with all
Zeon Group companies and Zeon Groupbusiness partners, and compliance with theprohibitions on child labor and forced labor
are confirmed■ ‌Release Zeon Group’s CSR Code of Conduct
and CSR Procurement Guidelines on the
Corporate Report and the Zeon corporatewebsite△ ‌Conduct CSR education including reviewing
compliance texts, e-learning, and CSR
information sessions■ ‌Establish a policy specific to human rights
and implement it across the Zeon Group

1. ‌Provide information on the Zeon Group’s
CSR Code of Conduct and CSR Procurement
Guidelines to business partners (business,
procurement, and materials purchasing
departments)
2. ‌Build a database of external reports
related to respect for human rights atbusiness partners (supply chain CSR survey
database) (CSR Promotion Department)

ZEON GROUPCORPORATE REPORT 201940

Zeon’s CSR

3. Labor Practices

Based on Japanese law and international standards, fulfill not only our minimum obligations but alsoestablish better work environments and systems for organizations and employees
Correlation with SDGs:
Goal 3: Good Health and Well-Being, Goal 4: Quality Education,
Goal 5: Gender Equality, Goal 8: Decent Work and Economic GrowthEnterprise Blueprint for 2020
To meet the expectations of society
Employment• ‌Equal employment opportunities are ensured.
(employment)

Details of current activities(■: Completed, △: Ongoing)‌ Set a numerical target for women new graduate hires△‌ Hiring of non-Japanese employees (mid△career employees, exchange students)△ ‌Expand re-employment system for employees
reaching the age of mandatory retirement△ ‌Implementation of employment for people withdisabilities

Future initiatives and targets
1. ‌Further expand employment not tied togender, nationality, race, age, disability, orother attribute
2. ‌Build a supply chain CSR survey database oflabor practices at business partners

FY 2018 results
No. of employees rehired after mandatory
retirement: 15 (88.2%)
Percentage of employees with disabilities: 2.29%
Labor conditions and social protections• ‌Create workplace environments in whichpeople are motivated to perform bypromoting diversity, implementing fairsystems for treatment of personnel, andencouraging dialogue‌ Appropriate operation of evaluation and△promotion management systems△ ‌Support for employee skills and career development‌ Initiatives for harassment prevention△△ ‌MD Committee activities by women
members (including dialogue between
senior management and women employees)

1. P‌ romote diversity-oriented management• ‌Appoint more women employees to higher
positions• ‌Initiatives to prevent harassment andimprove communication competence• ‌Advance employment of older persons
2. D‌ evelop an education system and expanded curriculum

Labor conditions and social protections• ‌Realize feelings of reward and security inwork with a view to balancing individuals’
work and personal life

■ ‌Introduce flex-time systems■ ‌Advancement of measures to support
raising the next generation■C‌ hildcare support systems (shortened working
hours, overtime restrictions and exemptions,sick care leave, working daycare hours, etc.)‌Return-to-work program for employees△
taking childcare and caregiving leave

1. ‌Further pursue dynamic work styles(Promote taking annual paid vacation)
2. ‌Create an environment that encourages
taking of child and family care leave
3. ‌Introduce a work-from-home system

Occupational health and safety• ‌Place priority on individuals’ physical andmental well-being, and support improved
health△ Promotion of health management• ‌Promotion of joint plans with healthinsurance cooperative• ‌Ensure labor hours management and prevent
excessive work•E‌ nvironmental upgrades using stress check tests• ‌Provide guidance to prevent lifestyle diseases• ‌Promotion of no smoking measures

1. ‌Further promotion of health and productivity
management• ‌Continue to be selected as a White 500
company• ‌Enhance mental health education• I‌ mplement further health promotion initiatives

Occupational health and safety•‌Increased trust in Zeon to protect local
communities’ safety and security byconducting emergency drills and otherinitiatives such as concluding disastercooperation agreements•‌All worksites have earned public trust by
maintaining a safety record of zero incidents
and accidents△ ‌Implement the Safety Management
Improvement Master Plan
△ ‌Fully implement deterioration countermeasuresand identify foolproof measures, and horizontally
implement measures arising from cases ofaccidents at other companies and plants△ ‌Eliminate safety incidents: Regularly conductplant safety evaluations and audits‌Eliminate occupational accidents△‌ Improve safety in logistics△‌ Conduct comprehensive emergency△
response drills and monthly drills by ourself-defense emergency response teams■C‌ onclude cooperation agreements with local
governments (Cooperative Agreement for
Disaster Prevention in Industrial Complexes)△‌Participate in community disaster readiness activities

To improve safety capabilities
1. ‌Conduct four safety activities (“4R-KY”)
at all Group companies (and in the supply
chain)
2. ‌Reinforce specified sources of hazards toprevent safety accidents
3. ‌Enhance dialogue activities on safety,
the environment, and quality with local
communities

FY 2018 results● ‌Plant safety evaluations conducted 100%
● ‌Implement RC audits conducted (once/year
or more for all 4 plants)● ‌Eliminate safety incidents: 2 safety incidents●E‌ liminate occupational accidents: 2 occupational
accidents resulting in lost work time●Z‌ ero serious accidents without lost work time
● I‌ mprove safety in logistics: 0 accidents in logistics
HR development and training at workplaces• ‌Have proactively enhanced awareness and madefurther improvements in the areas of health andsafety through comprehensive education

41

ZEON GROUPCORPORATE REPORT 2019△ ‌Provide training to enhance accident
prevention awareness (4 plants, 1 Group
company) (e.g., education using accident
case studies, hands-on training)△ ‌Promote the 5S’s→3S’sTargets● ‌Plant safety evaluations conducted 100%
● ‌Implement RC audits (once/year or more forall 4 plants)● ‌Eliminate safety incidents: 0 safety incidents● ‌Eliminate occupational accidents: 0
occupational accidents resulting in lost worktime
● ‌Zero serious accidents without lost worktime
● ‌Improve safety in logistics: 0 accidents inlogistics● ‌Implement the above guidelines at Group
companies

1. ‌Conduct safety education companywide(and in the supply chain)
2. ‌Implement the 3S’s companywide (and in
the supply chain)4. Environment

The organization takes responsibility for the environment, and promotes preventive measures
Correlation with SDGs:
Goal 6: Clean Water and Sanitation, Goal 7: Affordable and Clean Energy,
Goal 9: Industry, Innovation and Infrastructure,
Goal 12: Responsible Consumption and Production,
Goal 13: Climate Action, Goal 14: Life below Water, Goal 15: Life on LandEnterprise Blueprint for 2020
To meet the expectations of society
Pollution prevention
Climate change mitigation and adaptation• ‌All plants received public recognition for theirenvironmental impact reductions•‌Proactively enhance awareness and makefurther improvements in the areas of theenvironment and energy conservation
through comprehensive education

Climate change mitigation and adaptation• ‌Products with reduced environmental load continue
to be developed and launched in the market.

Details of current activities(■: Completed, △: Ongoing)△ ‌Reduce emissions of hazardous substances, industrial
waste, and impacts on atmospheric and water environments△ ‌Improve energy conservation in Responsible Care audits,
the Safety Management System, the Environment
Management System based on ISO 14001, and theEnergy Conservation Implementation Committee

Future initiatives and targets
1. ‌Conduct environmental management using
the multiple systems noted on the left
2. ‌Implement activities companywide to
reduce environmental load
3. ‌Identify energy-saving measures andimplement them on an ongoing basis
4. ‌Conduct risk assessments of hazardous
chemical substances

FY 2018 results● ‌Zero environmental incidents● ‌Reducing environmental impacts•‌Per-unit energy consumption: -7.9% over the previous fiscal year
-41% compared with FY 1990 (annual average of -1.5%)• P‌ er-unit CO2 emissions: -8.4% over the previous fiscal year
-41% compared with FY 1990 (annual average of -1.5%)

Targets● Zero environmental incidents● Reducing environmental impacts•‌Per-unit energy consumption: -1% over the previous fiscal year
• P‌ er-unit CO2 emissions: -1% over the previous fiscal year■D‌ evelop S-SBR for fuel-efficient tires, low-temperature toners,
cleaning solvents and etching gases with zero ozone depletion
potential, and binders for lithium-ion rechargeable batteries

1. R‌ esearch and development,
manufacturing, and sales that addressenvironmental issues faced by society

5. Fair Operating Practices Ethical organizational conduct in interactions with other organizations
Correlation with SDGs:
Goal 10: Reduced Inequalities
Goal 16: Peace, Justice and Strong Institutions

Enterprise Blueprint for 2020
To meet the expectations of society

Details of current activities(■: Completed, △: Ongoing)

Fair competition• Are complying with all laws and regulations,‌
ordinances, agreements, and internal
regulations, and acting with high ethicalstandards based on being a model for society• Management policies are broadly understood‌and compliance awareness is widespread.
As a result, by proactively conducting CSR
activities and adapting to environmental
changes, business continuity as well assustainable development are achieved■ E‌ nact and implement management regulations including
those on insider trading and appropriate disclosure△ Comply with internal regulations including
the Export Security Control Regulations△ ‌Appropriately implement regulations tocomply with the Act on Prohibition of Private
Monopolization and Maintenance of Fair Trade(Antimonopoly Act)△ ‌Compliance with the Subcontract Act and the Act for
Securing the Proper Operation of Worker Dispatching
Undertakings (prevention of falsified contracts)△ ‌Build a system that prohibits bribes‌Draft the CSR Code of Conduct and the CSR△
Procurement Guidelines‌Employees read the Compliance Textbook△
and take e-learning courses△ ‌Conduct CSR education including holding CSR informational sessions△ ‌Hold lectures on legal and regulatory compliance‌Legal compliance inspections△‌Regularly revise internal regulations (to△satisfy legal amendments)■B‌ ecome a signatory to the United Nations Global Compact

To reduce legal risks● ‌Compliance with internal regulations● ‌Ongoing legal training and information
sharing using the Compliance Textbook andother materials● ‌Education on the CSR Code of Conduct● ‌Ongoing compliance education● ‌Revise the Compliance Textbook andthe CSR Textbook and hold related
informational meetings● ‌Ongoing CSR briefings by the head of the
CSR division● ‌Support the establishment of compliancesystems at Zeon Group companies outside
Japan (develop in the supply chain)● ‌Shift from compliance to sustainability(promote understanding among
management and establish among
employees)

Fair competition• Information is disclosed quickly and‌appropriately, and market value has
increased(Including negative information regarding
business conditions, CSR, risks, etc.)‌Hold financial results briefings△‌Publish various reports△△ ‌Release information via the company website‌Hold briefings for individual investors and△analysts and respond to investor inquiries△ ‌Hold press conferences for mass media outlets and others

To enhance the corporate brand and value
1. ‌Improve the website (IR, CSR information)
2. ‌Strengthen the information communications
structure (PR)3. ‌Communicate information that supports
ESG investment

Fair competition• ‌Appropriately manage confidential
information including trade secrets andpersonal information■E‌ stablish the Information Management Committee△ ‌Proper implementation of internal regulations(information management regulations, personal
information protection management rules, etc.)‌ Education through e-learning△△ ‌Operation of information management systems (Documal, MOSS)△ ‌Conduct information security audits

1. ‌Maintain confidential information
management
2. ‌Review and implement measures
addressing environmental changes related
to information management inside andoutside Japan

Future initiatives and targets

ZEON GROUPCORPORATE REPORT 201942

Zeon’s CSR
Details of current activities

Enterprise Blueprint for 2020
To meet the expectations of society(■: Completed, △: Ongoing)

Social responsibility in the value chain• Select business partners based on‌the CSR Procurement Guidelines andperiodically confirm the Guidelines’ status of
implementation■ Multiple-source△ ‌Comply with laws and regulations oncompetition including the Antimonopoly Act△ ‌Satisfy the RoHS Directive, bans on substances, etc.
△ ‌Purchasing following the CSR Procurement Guidelines

1. ‌Develop and establish the CSR Code of
Conduct and CSR Procurement Guidelines
in the supply chain
2. ‌Build the supply chain CSR survey database

Respect for property rights•P‌ romoting understanding on the handling ofintellectual property rights (including trade secrets)• ‌The system of monitoring other companies’
intellectual property rights to prevent
violations is functioning properly■ I‌ nstitute regulations on intellectual property
rights and intellectual property management‌ Education using the Compliance Textbook△
and intellectual property education△ ‌Hold meetings on countermeasures for other companies’
patents and patent risk audits as appropriate

1. ‌Foster and establish an intellectual property
mindset through ongoing compliance andintellectual property education

Future initiatives and targets

6. Consumer Issues

Not causing harm to consumers, and not causing consumers to have harmful effects on society
Correlation with SDGs:
Goal 9: Industry, Innovation and Infrastructure
Goal 12: Responsible Consumption and Production

Enterprise Blueprint for 2020
To meet the expectations of society

Details of current activities(■: Completed, △: Ongoing)

Protecting consumers’ health and safety• ‌Achieve first-rate global standards in both
quality and cost

‌ Have a quality management system based△on ISO 9001
‌ Manage quality assurance risks (product△liability lawsuits, supply obligations, productrecalls, and credibility loss due to rumors)‌ Improve processes (reduce losses, improve△consistency)‌ Develop activities for production innovations△‌ Measure customer satisfaction (CS) to△
understand the current satisfaction level,
set targets, and promote improvements

1. ‌To maintain and expand conditions where
Zeon products are chosen● ‌Establish systems to definitively reducecomplaints, process abnormalities, and defects,
prevent defective products from leaving Zeon,create corporate quality trusted by customers,
and further improve customer satisfaction‌Develop initiatives for chemical substance●regulations●‌Develop Zeon’s quality management system
at Zeon Group companies outside Japanand at outsourcing partners

Sustainable consumption•D‌ eveloped and launched a series of
products that are beneficial to society‌ Develop business based on business plans△

1. ‌Research and development,
manufacturing, and sales that address
consumer issues faced by society

Future initiatives and targets

7. Community

Involvement in and contribution to the community in various forms, from dialogue with local residents toimprovement of education and culture in the community and local employment creation
Correlation with SDGs:
Goal 4: Quality Education, Goal 9: Industry, Innovation and Infrastructure,
Goal 11: Sustainable Cities and Communities, Goal 17: Partnerships for the Goals

Enterprise Blueprint for 2020
To meet the expectations of society

Details of current activities(■: Completed, △: Ongoing)

Community involvement, education, andculture• Zeon’s social contributions are understood,‌
receive recognition, and are supported△ ‌Develop CSR Core Projects (social
contribution activities by Group as a whole,among locations, and at individual worksites)△ ‌Communicate CSR activities (reports, website)● ‌Develop the CSR Core Projects based on adefined Zeon Group activity policy

Community involvement• An organization for promoting volunteer‌activities among employees has been
established, and employees actively
volunteer in various ways

‌ Upgrade and enhance the system for△promoting volunteer activities (establish avolunteer leave system)‌Introduce volunteer activities and promote△and support participation in them(volunteering to support reconstruction
from earthquakes, etc.)● ‌Raise employee awareness for social
contributions• ‌Conduct CSR education including CSR
informational sessions• ‌Establish a social contribution policy forthe entire Zeon Group (e.g., on water)● ‌Create a system to support volunteering(volunteer registration system, etc.)● ‌Create opportunities for social contributions
from exchanges with local councils of social
welfare, non-governmental organizations
and non-profit organizations

FY 2018 results
Number of employees participating involunteer tours: 48(cumulative total of 473 employees)

43

ZEON GROUPCORPORATE REPORT 2019

Future initiatives and targets

Details of current activities

Enterprise Blueprint for 2020
To meet the expectations of society

Future initiatives and targets(■: Completed, △: Ongoing)

Community involvement• ‌Guidelines for coexisting with local
communities have been created and areused, and good relations have been built withlocal communities■ ‌Formulate and utilize disaster recovery
support standards‌ Donations and charity activities (Furukawa△
Scholarship, expenses for community
promotions, Red Cross, etc.)‌ Maintain good community relations and△have community exchanges•S‌ ponsor and participate in community festivals
and events including summer festivals at plants• ‌Community cleanup activities• ‌Plant tours (receive plant visitors, internships)●M‌ aintain and expand exchanges with local
communities• ‌Support the reconstruction of the Tohoku
region• ‌Devise and implement ongoing measures
to support recovery from disasters• ‌Actively participate in community activities●T‌ hrough dialogue with stakeholders including
local communities, identify expectations
from society, the current level of meeting
those expectations, and set targets

Community involvement• ‌Have a system able to make donations
promptly to help people during disasters△ Charity activities for NPOs, etc.

● ‌Create budget for charity activities andintegrate managing departments● ‌Clarify standards for selecting donation
recipients and review multifaceted
contributions

Technological development and access to technologies
Explore the needs of society and cultivate theseeds to meet these needs based on unique
technologies and unparalleled products to create
new business and make contributions to society.

● ‌Strategy for “reinforce” and “explore” in the
Research and Development Division andbusiness divisions

17 SDGs in Zeon’s value chain
This shows how the 17 SDGs are oriented in the Zeon Group’s value chain. We will review this relationship for each businessgoing forward.
Polymerization
technology
Synthesis
technology

Extraction
technology
GPB
GPI

NaphthaC4
C5

Raw materials

Butadiene
Isoprene
Dicyclopentadiene
Piperylene
2-butyne
Materials
extraction

Strengthening

positive effects

Synthetic rubber and synthetic latex
Chemicals
Specialty chemicals
Tires, Automobile components
Synthetic aroma chemicals
Gloves, Adhesives, Paints/coatings
Cyclo olefin polymers
Fragrances, Large-size molding products
Optical films
Lenses, TVs, Smartphones
Battery binders, etc.
Batteries, etc.

R&D
Manufacturing

Contributions throughbusiness activities

Sales

Processing
Embedding in
final products

Final
product use

Final productdisposalContributions throughfinal products

Through activities to contributeto the SDGs, we are able todevelop our business in line withthe public’s expectations andcreate corporate value.

Minimizing

negative effects
Recognizing that not conducting
activities to contribute to the SDGs runs
the risk of damaging our corporate
management and corporate value, we
seek to minimize these effects.

Society,
Environment,
Governance

ZEON GROUPCORPORATE REPORT 201944

Zeon’s CSR

Environment
Visit our corporate Environment
website for more
http://www.zeon.co.jp/csr_e/environment.html
information

Environmental Philosophy (established August 2001)
1. Environmental‌
protection is a mission of a socially responsibleorganization
2. Our‌
basic belief is that environmental protection can be achieved
with innovative technology
3. Environmental‌
protection will be achieved when all employees
work together with a sense of mission to overcome challenges
We established our Responsible Care Policy embodying the principles of
Responsible Care* in 1998, and established our Environmental Philosophy
in 2001. We set goals for the Zeon Group’s environmental initiatives basedon the two approaches of reducing environmental impacts and developing
environmentally friendly products, and each plant plans and executes specificenvironmental initiatives.

* ‌Responsible Care: A voluntary initiative by businesses
that manufacture or handle chemical substances toachieve continuous improvement in health, safety,
and environmental (HSE) performance across theentire life cycle of such substances—fromdevelopment and manufacture, through distribution
and use, and ending in final consumption or
disposal—based on the principles of independent
decision-making and personal responsibility. Thesebusinesses publicly commit to Responsible Care in
their business policies, implement HSE-related
actions, and strive to improve their HSE performance.

Reducing environmental impacts
We comply with emissions standards for substances with environmental impact
based on the Japanese Energy Conservation Act, Air Pollution Control Act, Water
Pollution Control Act, PRTR Act, and agreements with local authorities (voluntary
management standards).
We are taking steps to continue reducing our per-unit CO2 emissions by anaverage of 1% per year compared with FY 1990.

Per-unit CO2
emissions(FY 1990 comparison)
FY 2018●CO2 emissions and Per-unit CO2 emissions (FY 1990 comparison)
CO2 emissions

×103 t-CO2

Per-unit CO2 emissions

1,000

100%

800

80%

600

60%

400

40%

200

20%

0

1990

2008

2009

2010

2011

2012

2013

Developing environmentally friendly products
At Zeon, we are continuing to conduct R&D with the objective of developing
and launching environmentally friendly products.
Up to FY 2018, we have successfully developed S-SBR for fuel-efficient tires,low-temperature fixing toners, cleaning solvents and etching gases with zero
ozone depletion potential, and binders for lithium-ion rechargeable batteries.
In the years ahead, we will continue to engage in R&D that attempts to addressenvironment-related social issues.

45

-41%

ZEON GROUPCORPORATE REPORT 2019

2014

2015

2016

2017

2018

0%

Fair Operating Practices/Human Rights
Fair Operating Practices
Visit our corporate http://www.zeon.co.jp/csr_e/suppliers.html
website for more
Human Rights
information

http://www.zeon.co.jp/csr_e/humanrights.html

Ensuring compliance is established as the first priority of the Zeon CSR
Policy, and we will meet the public’s expectations by having all employees act
with awareness of CSR. We endeavor to engage in fair operating practices, and
our CSR Code of Conduct clearly defines related matters including compliancewith antitrust regulations and a prohibition on entertaining and offering gifts tooverseas civil servants.
The Compliance Committee advances Zeon’s compliance efforts. The
Compliance Committee has three subcommittees, namely the Antitrust Law
Regulatory Subcommittee, the Export Security Control Subcommittee, and the
Corporate Governance Subcommittee. Each subcommittee is performing its
function.
In July 2019, we became a signatory to the United Nations Global Compact,
and in August 2019 we established and released the Zeon Group Human Rights
Policy. We strive to be a company that understands and accepts diverse values,
and where no person is discriminated against based on gender, age, nationality, orother attribute.

●Compliance system
Compliance Committee
Prevention of law violations
Education and training incompliance with laws
Antitrust Law
Regulatory Subcommittee
Prevention of violations of
the Antitrust Law
Export Security
Control Subcommittee
Proper security export control
Corporate Governance
Subcommittee
Reliability in financial reporting●CSR Procurement
We have established the CSR Procurement Guidelines and Requests to Suppliers,
which integrate CSR perspectives into our existing QCD*, and are taking steps toensure CSR procurement.
We are conducting a survey of human rights measures at our business partners,
and are working to build a supply chain CSR survey database. Based on thisdatabase, we will survey whether there are problems including with the work
environment (human rights, health and safety, etc.), environmental destruction, andconflict minerals, and will collect and disclose information about our supply chain.
Looking ahead, we will consolidate our approach to supply chain management
and build a system for sharing our CSR policies in order to embed CSR
procurement throughout the supply chain.

* ‌QCD: System of production management that
controls and improves quality, cost, and delivery.

Zeon Group Human Rights Policy
We, the Zeon Group, are committed to fulfilling our corporate social responsibilities in respect of human rights
and contributing to realizing a sustainable society, based on international codes of conduct on human rights,
such as the Universal Declaration of Human Rights, the International Labor Organization (ILO) Declaration on
Fundamental Principles and Rights in Labor, and the UN Global Compact.
Respect for Human Rights
We will not tolerate acts of discrimination orharassment based on age, gender, place of origin,ancestry, nationality, disability, religion, creed, marital
status, employment status, union participation, politicalviews and other differences. We also will not toleratechild labor, forced labor or/nor unjustly low wage labor.
Collaboration with Stakeholders
We will encourage our customers and business
partners to support this policy with us to pursue
business activities sharing respect for humanrights.
Prevention and Mitigation of Human Rights
Violations
We will strive to perceive, avoid and reduce any
negative impact on human rights that might result
from our business activities.

Response to Human Rights Violations
We will work on the relief through appropriate
procedures when it is found that we have caused
or furthered a negative impact on human rights.
Efforts on Human Rights Issues
We will provide appropriate education and training
to our executives and employees, so that thispolicy is understood and implemented.
Disclosure of Information
We will publicly disclose information on our humanrights initiatives under this policy throughcommunication channels such as our website andcorporate reports.

ZEON GROUPCORPORATE REPORT 201946

Zeon’s CSR

Labor Practices
Visit our corporate Labor Practices
website for more
http://www.zeon.co.jp/csr_e/employee.html
information

In our CSR Code of Conduct, we stipulate respect for human rights and prohibit
discrimination. We strive to be a company that understands and accepts diverse
values, and where no person is discriminated against based on gender, age,nationality, or other attribute.
Based on this policy, we aim to enable every employee* to work with pride bycultivating employees able to continually evolve by pursuing high goals based on
independent thinking, building a human resource system in which employees takeon challenges without fear of failure and gain a sense of accomplishment, andcreating a comfortable workplace environment that values dialogue.

* ‌At Zeon, “employees” refers to all workers
including full-time and part-time workers.

●Zeon Corporation employment information(non-consolidated, does not include non-permanent employees)(No.)

Zeon—A company of which each andevery one of its employees can be proud
Encourage employees
to continually evolveby pursuing highgoals based on
independent thinking

Human resource system
in which employees takeon challenges without
fear of failure and gain asense of accomplishment

A comfortableworking environmentthat values dialogue

Promoting diversity
Respect for human rights, prohibition of discrimination

Employment and diversity
Zeon Group respects diversity and strives to be a company in which everyone
in our diverse team of employees is able to fully demonstrate their capacities. Our
employees today have a range of backgrounds and perform their duties regardlessof gender, age, and nationality.
We conduct diversity training for all employees to help create the capacity fordiversity understanding. We also support employees who are balancing workwith raising children and have acquired the Kurumin mark in Japan in recognitionof this, based on the Act on Advancement of Measures to Support Raising NextGeneration Children.

Men

Women

Total

1,402

211

1,613

New graduate

24

12

36

Mid-year

13

5

18

Employees
No. of new hires

Percentage of employeeswith disabilities

2.29%

Re-employment of
employees who have reachedmandatory retirement age

15 (88.2%)

Includes 21 non-Japanese employees (8 men and 13 women)
New graduate: ‌Employees that joined the company inApril 2018
Mid-year: ‌Employees that joined the company from April 2018
to March 2019

TOPICS

Advancement of women
In the action plan (plan period until March 2018) for
general business operators in the Act on Promotionof Women’s Participation and Advancement in the
Workplace, we established targets for the issue
of increasing the number of women employees.
Based on our new plan, we will promote women’s
advancement from FY 2018.

New action plan targets
Target 1: ‌Achieve 30% women hires among
new graduate hires
Target 2: ‌Conduct career plan workshops
Target 3: ‌Increase understanding fordiversity management

HR development
Zeon’s concept of “being the worker I want to be” embodies “persons tocontinually evolve by pursuing high goals based on independent thinking.”
Personnels are encouraged to set goals to become the worker they want to be,
and we are modifying our education and training systems to allow them to bridge
the gap between the current reality and their goals and facilitate goal-driven
actions on a daily basis. By fairly evaluating what employees have accomplishedand rewarding them accordingly, we aim for them to set even higher goals. With
every personnel continuing to improve and demonstrating this in actions, we cancreate an even more capable workforce across Zeon.

47

ZEON GROUPCORPORATE REPORT 2019

●HR development at Zeon
Performancebased reward
The worker
I want to be
Evaluation

Education& training

Actions &results

The worker
I want to be(higher goals)

Education& trainingOccupational safety
Safety Philosophy (established March 1997)
1. ‌Safety is the foundation of all business activities and thegreatest priority
2. ‌Our basic belief regarding safety is that we can prevent all
accidents
3. ‌Safety will be achieved by performing the 5Ss*1 and when
everyone takes responsibility for their own actions

A consistently safe work environment is the foundation of all production
activities. We formulated our Safety Philosophy in 1997 based on the Responsible
Care approach to guide our safety activities. Our Responsible Care Policy
established in 1998 also clearly states, “Protecting the environment and ensuringsafety are preconditions for all business activities and are the most importantpriorities.”
Our goal is zero occupational accidents resulting in lost work time and zero
serious accidents without lost work time. There were two lost-time occupational
accidents in FY 2018. We are focusing on communication between worksite
supervisors and workers, safety inspections, and hands-on education in order toachieve a safe and stable production system.

*1 ‌5Ss: Seiri (sort), Seiton (straighten),
Seisou (scrub), Seiketsu (systematize), andShitsuke (sustain)

TOPICS

Holding the Zeon North Safety
Conference (every May)
The primary business of Zeon North is plantengineering for the Zeon Group. Zeon North holds
a safety conference for representatives of partnercompanies to deepen cooperation with them,enhancing safety awareness, spreading safetyknowledge, and sharing information.
Zeon North works together with all of its partnercompanies with the goal of building a culture inwhich all on-site workers have a strong awarenessof safety and safety is always given the highest
priority.

Safety and accident prevention
We conduct safety assessments and audits of plants, and provide training toenhance accident prevention awareness with the goal of achieving zero safety
irregularities.
Each year, top management develops a Master Plan for Safety Management
Improvements and leads initiatives to improve our Safety Management System
based on the belief that ensuring safety is the greatest priority. Senior managers
at Zeon visit plants on a regular basis to confirm the progress of improvement
initiatives and hold informational meetings with workers to communicate directlywith them. Top management visited plants over 41 days in FY 2018.

Zeon North Safety Conference

Safety in logistics
Zeon North Education CenterWe are working to maintain our achieved goal of zero accidents in logistics.
At Zeon, we established Yellow Card Management Rules for transporting
hazardous products. These rules require drivers to carry a Yellow Card*2 whentransporting such products. We also conduct reporting and communication
training for drivers, and each plant offers training on product handling to prevent
accidents in logistics.

*2 ‌Yellow Card: Document describing what to do if
an accident occurs during transportation, asestablished by the Logistics Safety Management
Policy of the Japan Chemical Industry
Association. The document is called a Yellow
Card because it is printed on yellow paper.

ZEON GROUPCORPORATE REPORT 201948

Zeon’s CSR

Community
Community
Visit our corporate http://www.zeon.co.jp/csr_e/community.html
website for more
Site Reports
information

http://www.zeon.co.jp/csr_e/sitereport.html

We believe that contributing to the development of local communities and building strong relationships of trust are crucial
to conducting stable business activities and creating improved products and services.

Zeon’s approach to social contributions
We believe that social contributions are essentially
carried out through our core businesses. As companies
are members of society, however, the complex set ofissues faced by society and a company’s activities are notindependent of one another. We are therefore undertakingsocial contribution activities outside of our core businesses
to engage with society from a broader perspective.
In 2012, we launched CSR Core Projects, which are
initiatives we selected from proposals submitted by Zeon
Group companies. CSR Core Projects are activities that
focus on social contributions outside the scope of our corebusinesses and provide employees with opportunities toturn their attention to social issues.
The Head Office plans various activities related tosupporting reconstruction from the Great East Japan
Earthquake, as well as shared projects that are conductedacross multiple plants and subsidiaries. Furthermore,
plants and subsidiaries also conduct their own independent
projects. We are developing activities in these three broad
categories with a focus on their synergistic benefits.

●Social contributions at ZeonCSR Core Projects

Great East Japan
Earthquake reconstruction

Shared projects

Independent
projects

FY 2018 initiatives❶ Activities with the local community/❷ Activities with the local community/

Zeon Chemicals L.P. (ZCLP) in U.S.A. has conducted volunteer
activities and donation drives for many years.

Zeon Chemicals (Thailand) Co., Ltd. conducts communication
activities with the local community, participates in local events,and makes charity donations.

The R&D team made a donation to a local charity group called the Arrow
Fund. The Arrow Fund rehabilitates pets that have suffered abuse andsearches for places to take them in.

Donated personal computers to local schools.

Zeon Chemicals L.P.

49

ZEON GROUPCORPORATE REPORT 2019

Zeon Chemicals (Thailand) Co., Ltd.

❸ Activities with the local community/
Zeon Advanced Polymix Co., Ltd.

❹ Holding community events

Thailand-based Zeon Advanced Polymix Co., Ltd. has made charity
donations to neighboring institutions and supported the healthmanagement of nearby residents for many years.

Zeon places great importance on connections with local communities.
Zeon’s plants and Group companies hold various events including summer
festivals and welcome opportunities to participate in community events.

After receiving the same award in 2017, received the 2018 CSR-DIW
Continuous Award from the Department of Industrial Works (DIW) in
recognition of having excellent CSR activities.

Hold annual summer festivals for local residents, employees, and theirfamilies at business locations in Japan.

❺ Cleanup campaigns❻ Educational support

With the goal of conducting activities that are beneficial and willplease local communities, Zeon’s plant and Group companies conduct
community cleanup campaigns around their sites and beyond.

Zeon’s plants and Group companies offer assistance to educational
institutions with internships for high school, vocational high school,
and university students, by welcoming plant tours for school groups,
and by sending special instructors to give lessons at schools.

Zeon Corporation Takaoka Plant, Zeon North, and Optes, all located in the
Takaoka region, jointly participated in a beach cleanup organized by the
local government.

Optes accepts local high school students for internships to gain
experience in film testing and computer data entry.

❼ Chemistry classrooms❽ Support for disaster-affected areas

Based on the motto of “nurturing future Nobel Prize winners inchemistry,” we are holding chemistry experiment classrooms invarious areas to communicate the appeal of chemistry to children.

Zeon supports a tree-planting campaign organized by Yokohama
Rubber Co., Ltd. by serving as the event’s operations staff at Otsuchi
Gakuen school in Otsuchi Town, Iwate Prefecture. We also donate
science and technology books to the school library at Otsuchi Gakuen.

Zeon Chemicals Yonezawa participated in the 2018 Youth Science Festival
in Yamagata. Children made aromatic air fresheners using our synthetic
fragrances.

Cooperated in a tree-planting event for local education organizedby Otsuchi Gakuen school at Heisei-no-Mori in Otsuchi Town.

ZEON GROUPCORPORATE REPORT 201950

Cover photo:
Zeon Corporation Tokuyama Plant
Established in 1965, this is themain production plant for synthetic
rubbers using butadiene monomers
extracted from naphtha. About halfof the produced synthetic rubber
is exported from the nearby Portof Tokuyama to the United States,
Europe, Asia, and other destinations
around the world. In 2015, wecompleted the world’s first massproduction plant for single-walledcarbon nanotubes (SWCNTs).
Main products
Butadiene monomers, synthetic
rubbers, synthetic latex,
polymerized toners, single-walledcarbon nanotubes (SWCNTs)

Zeon Corporation
CSR Promotion Department

Shin Marunouchi Center Building, 1-6-2 Marunouchi, Chiyoda-ku, Tokyo 100-8246, Japan
Tel: +81-3-3216-0603 Fax: +81-3-3216-0604 http://www.zeon.co.jp/index_e.html

Printed on paper made with woodfrom forest thinning. “Morino ChonaiKai” (Forest Neighborhood Association)
supporting sound forest management.