CORPORATE REPORT 2013

Contents2

Corporate Profile

3

Review of Operations

4

Surprisingly ZEON

6

Contributing to Our Future Society

7

Business Performance & Performance Summary - related CSR

9Major Sales & Production Bases

11

Group Company Data

13

ZEON Group History

15

Top Message

19

Highlights

19

Highlight 1 Smartphones & ZEON

21

Highlight 2 Business Development & CSR in Thailand

23

Highlight 3 CSR Core Projects

Report Policy
At ZEON Corporation and the ZEON Group, so that all of our stakeholders canunderstand our approach to CSR and activities for the environment, we began
publishing the Responsible Care Activity Report in fiscal 2000 and the CSR
Report including a report on social aspects since fiscal 2006.
This FY2013 report serves the purpose of an annual report and corporate
brochure. We have changed the name of the report to “CORPORATE REPORT”
as a step toward giving a broader overview of our overall business from bothmanagement and CSR perspectives.
In our Highlights section, we discuss the contribution ZEON products aremaking to the expanding smartphone demand, and report on our overseas
business and social contribution activities.
We ask for your honest feedback and opinions so that they may be used to
improve our activities in the future.
■Period Covered
April 2012 to March 2013
(also includes some new information from April 2013 and later)■Organizations Covered
The report covers ZEON Corporation and Group companies in Japan andoverseas. Some data only covers ZEON Corporation.

25

Management Structure

27

CSR Management■Notes on the Report
The report was compiled with reference to the 2007 Environmental Reporting
Guidelines of the Japanese Ministry of the Environment and the 2006
Sustainability Reporting G3.1 Guidelines of the Global Reporting Initiative (GRI).

29

Research and Development (R&D)*When indicating company names, “ZEON” is indicated in capital letters.

33

Safety, Quality, and the Environment

37

Human Rights, Labor Practices and Fair Procurement

39

Relationship with Society

40

Relationship with Shareholders and Investors

Printed brochure and website version of this report
ZEON’s Report is available in two different formats: a printed brochure (CORPORATEREPORT) and website version (CSR Website). Website version can be accessed
on ZEON Corporation’s website. In keeping with our editorial policy, the printed
version contains a wide range of information that comprehensively covers all of
ZEON’s business activities. The website version includes detailed performance mainly
covering CSR activities and also site reports.

CORPORATE REPORT 2013

Printed brochure

Website version

CSR Section of ZEON’s Website

http://www.zeon.co.jp/csr_e/index.html
Home > CSR

1ZEON GROUP CORPORATE REPORT 2013

Corporate Profile
Corporate
Philosophy(Established
April 1997)

ZEON will contribute to the preservation of the Earth andthe prosperity of the human race.
In keeping with its name, which derives from the Greek words “geo” (the Earth) and “eon” (eternity), ZEON will contribute to the sustainable
development of people, society and the global environment through innovative world-class technologies.

●We will ensure compliance and meet society's needs for safety and security
ZEON
CSR Policy ●We will contribute to sustainably developing society and protecting the global environment through our corporate activities(Established
April 2010)●We will ensure that each and every ZEON person is aware of CSR and acts accordingly

Corporate
ProfileCompany Name : ZEON Corporation
Establishment : April 12, 1950
Capital : 24.2 billion yen (as of March 31, 2013)
Employees : 3,163 (Consolidated) 1,606 (Non-consolidated; as of March 31, 2013)

ZEON’s Businesses
ZEON’s main products are made from C4, C5 fractions-a derivative of distilled naphtha, which is obtained by distilling petroleum. We produce
a variety of materials by using our proprietary technologies to extrude and process C4, C5 fractions. We not only use C4, C5 fractions but also
optimally utilize petroleum, which is a natural ingredient from the earth to produce a diverse range of products.

Crude oil

NaphthaC2 (ethylene, etc.)
C3 (propylene, etc.)

C4 fraction

Optimal use of C4 and C5 fraction(butadiene, etc.)

Butadiene

Isoprene monomer

Main products

Major applications

Synthetic rubber

Tires, belts

Synthetic latex (LX)

Coated paper, gloves

Synthetic rubber

Tires

Thermoplastic elastomer (SIS)GPB*1
C5 fraction

High-boil monomer

Adhesives

Petroleum resins (PDR)

Adhesives andtraffic paints

Petroleum resins (CPR)

Paints, inks

Specialty plastics (COP*3)

Lenses, prisms
optical films(isoprene, etc.)

DicyclopentadieneGPI*2
2-butyne

RIM

Construction machinery parts
Housing equipment, components

Synthetic aroma chemicals (LFA)

Fragrances and cosmetics,
food additives*1 GPB: ZEON process of butadiene. This is a proprietary ZEON technology used to extract highly pure butadiene from C4 fraction.
*2 GPI: ZEON process of isoprene. This is a proprietary ZEON technology used to extract isoprene and other highly pure effective substances from C5 fraction.
*3 COP: Cyclo-olefin polymers

ZEON GROUP CORPORATE REPORT 20132

Review of Operations
ZEON manufactures a diverse range of products by leveraging its globally superior, innovative, technological development capabilities.
Our operations are comprised of the Elastomer Business, with a product line which enhances the capabilities of the raw materials; our Specialty Material
Business, with its high value-added products manufactured using advanced technology, and other processed products; and Other Businesses.

Elastomer Materials Business
Our Elastomer Business consists of the three areas of the synthetic rubber, synthetic latex,
and chemicals businesses.

Synthetic rubber business
Our products include a styrene-butadiene rubber (SBR) with advanced anti-friction properties,
butadiene rubber (BR) with superior elasticity, and isoprene rubber (IR), which has the same
composition as natural rubber. We manufacture such synthetic rubber featuring various
characteristics, which we deliver to major tire manufacturers around the world. In addition to this,
we produce synthetic rubber including Zetpol®, designed specifically for automotive engine parts,
featuring top-quality thermal resistance and superior oil resistance.

Synthetic latex business
Latex is a liquid rubber. At ZEON, we manufacture synthetic latex for a variety of productapplications, such as powder puffs and rubber gloves.

Chemicals business
ZEON manufactures petroleum resins and elastomer SIS used in adhesive tape and hot melt
adhesives. Petroleum resins are also used for traffic paints (for road paints).

Specialty Materials Business
Through our synthesis and processing technology, we develop materials and components withadvanced functions. Focusing on future growth areas, we are positioning the IT components, energy
components, and medical devices businesses as three key business domains.

IT components business
Cycloolefin polymers (COP) have superior optical properties. COPs are used in optical products
such as small camera lenses, and also as optical film for LCD televisions and smartphones. We also
manufacture components that use the advanced properties of COP.

Energy components business
ZEON manufactures components (binders and sealing compounds) used for mobile phones andnotebook PCs, and more recently in automobiles and other products. Our products help to improve
the safety and life of lithium-ion batteries and contribute to the realization of increased capacity.

Medical Products (medical devices) business
ZEON is developing a structure that comprehensively deals with the development, manufacturing,sales, and pharmaceutical affairs, mainly in the areas of the circulatory, nutritional andgastrointestinal systems. We produce a variety of catheters and devices for stone removal.

Chemicals businessWe manufacture chemicals, including highly safe synthetic aroma chemicals used in foods
and cosmetic and hygiene products, and solutions with special functions that are used for various
applications.

Other BusinessTechnology licensing business
ZEON licenses its proprietary GPB method, and various elastomer production technologies in
23 countries worldwide.

RIM combination liquid and molded items businessWe manufacture materials for domestic washbasins and baths, as well as large-scale plastic
products, including truck bumpers, using our Reaction Injection Molding (RIM) method which
utilizes dicyclopentadiene (DCPD) as a raw material.

3

ZEON GROUP CORPORATE REPORT 2013

Surprisingly ZEON: ZEON is All Around Us!

Description of Symbols

Higher qualityof life (QOL)

Faster and easiercommunication

Energy conservation,
storage, and generation

ZEON products are highly versatile, functional materials used in all kinds of things you see and use every day.
Take a look around and you might be surprised to find ZEON right under your nose–or even your feet!

Sink bowls,
bathtub pans

Rubber gloves
Known for having few impurities and allergens and being
highly resistant to oils and chemicals, our synthetic latex is
widely used in rubber gloves of all kinds, including medical
gloves, gloves used in the kitchen, and work gloves.

RIMTEC, a group company, manufactures and supplies
raw materials used to make plastic molded products
such as sink bowls and bathtub pans. The materials are
made from an ingredient called dicyclopentadiene, which
ZEON extracts from naphtha using proprietary extraction
technologies.

Tires
Perfumes, shampoos,conditioners

ZEON manufactures synthetic rubber for automobile tires.
Much attention in recent years has been given to synthetic
rubber that improves tires’ ability to roll more easily(better fuel efficiency for the car) and stop better (safer
for occupants), two properties that usually are mutually
exclusive. Such tires help protect the global environment asthey increase the vehicle’s fuel efficiency and thus reduce
CO2 emission.

ZEON aroma chemicals are used in cosmetic and hygiene
products, food products, and various everyday goods.
Green aromas chemicals lend a fresh, crisp scent like green
foliage, while jasmine aroma chemicals release a sweeter,floral scent. Lactone aroma chemicals are essential
ingredients in dairy products. Our green aroma chemicals
take the largest share of the global market.

Lithium-ion batteries
Televisions, smartphones,
tablet devices

Lithium-ion batteries are used as a power source in a widearray of electronics, from hybrid vehicles to mobile phones
and laptop computers. ZEON’s binder (an adhesive) helps
make batteries safer and last longer. Use of this binder is
expected to increase dramatically as the electric car market
takes off.

ZeonorFilm®, produced using the world’s firstenvironmentally friendly sheet extrusion process, has
superior optical performance and is used in LCD televisions,smartphones and tablet devices.

Automotive parts

Housing materials

Zetpol® is an oil- and heat-resistant, long-lasting synthetic
rubber that commands the largest share of the global
market. Energy efficient and eco-friendly, Zetpol is widelyused in automotive parts such as engine timing belts.

Roadmarking paints
ZEON’s petroleum resins are also used in traffic paints
used to mark white and yellow lines on roads andcrosswalks. These resins are made from an ingredientcalled piperylene, which ZEON extracts from naphtha using
proprietary extraction technologies.

4

ZEON GROUP CORPORATE REPORT 2013

ZEON Kasei, a group company, supplies various user- andenvironment-friendly construction materials such as soundinsulating materials, vibration damping materials, andsiding to make time spent at home more comfortable.

Powder puffs
Synthetic latex is also used in powder puffs
for makeup application. Roughly 90 percent(Estimate by ZEON) of the world’s powder
puffs made from NBR latex use ZEON latex
because of its high performance and easeof processing.

Digital cameras
ZEONEX®, a highly functional resin developed by ZEON
with superior optical properties, high transparency,
and very high purity, is used to make optical components
for digital cameras and camera lenses for mobile phone
cameras.

ZEON GROUP CORPORATE REPORT 20135

Surprisingly ZEON: ZEON is All Around Us!

Description of Symbols

Higher qualityof life (QOL)

Faster and easiercommunication

Energy conservation,
storage, and generation

ZEON products are highly versatile, functional materials used in all kinds of things you see and use every day.
Take a look around and you might be surprised to find ZEON right under your nose–or even your feet!

Sink bowls,
bathtub pans

Rubber gloves
Known for having few impurities and allergens and being
highly resistant to oils and chemicals, our synthetic latex is
widely used in rubber gloves of all kinds, including medical
gloves, gloves used in the kitchen, and work gloves.

RIMTEC, a group company, manufactures and supplies
raw materials used to make plastic molded products
such as sink bowls and bathtub pans. The materials are
made from an ingredient called dicyclopentadiene, which
ZEON extracts from naphtha using proprietary extraction
technologies.

Tires
Perfumes, shampoos,conditioners

ZEON manufactures synthetic rubber for automobile tires.
Much attention in recent years has been given to synthetic
rubber that improves tires’ ability to roll more easily(better fuel efficiency for the car) and stop better (safer
for occupants), two properties that usually are mutually
exclusive. Such tires help protect the global environment asthey increase the vehicle’s fuel efficiency and thus reduce
CO2 emission.

ZEON aroma chemicals are used in cosmetic and hygiene
products, food products, and various everyday goods.
Green aromas chemicals lend a fresh, crisp scent like green
foliage, while jasmine aroma chemicals release a sweeter,floral scent. Lactone aroma chemicals are essential
ingredients in dairy products. Our green aroma chemicals
take the largest share of the global market.

Lithium-ion batteries
Televisions, smartphones,
tablet devices

Lithium-ion batteries are used as a power source in a widearray of electronics, from hybrid vehicles to mobile phones
and laptop computers. ZEON’s binder (an adhesive) helps
make batteries safer and last longer. Use of this binder is
expected to increase dramatically as the electric car market
takes off.

ZeonorFilm®, produced using the world’s firstenvironmentally friendly sheet extrusion process, has
superior optical performance and is used in LCD televisions,smartphones and tablet devices.

Automotive parts

Housing materials

Zetpol® is an oil- and heat-resistant, long-lasting synthetic
rubber that commands the largest share of the global
market. Energy efficient and eco-friendly, Zetpol is widelyused in automotive parts such as engine timing belts.

Roadmarking paints
ZEON’s petroleum resins are also used in traffic paints
used to mark white and yellow lines on roads andcrosswalks. These resins are made from an ingredientcalled piperylene, which ZEON extracts from naphtha using
proprietary extraction technologies.

4

ZEON GROUP CORPORATE REPORT 2013

ZEON Kasei, a group company, supplies various user- andenvironment-friendly construction materials such as soundinsulating materials, vibration damping materials, andsiding to make time spent at home more comfortable.

Powder puffs
Synthetic latex is also used in powder puffs
for makeup application. Roughly 90 percent(Estimate by ZEON) of the world’s powder
puffs made from NBR latex use ZEON latex
because of its high performance and easeof processing.

Digital cameras
ZEONEX®, a highly functional resin developed by ZEON
with superior optical properties, high transparency,
and very high purity, is used to make optical components
for digital cameras and camera lenses for mobile phone
cameras.

ZEON GROUP CORPORATE REPORT 2013

5

Contributing to Our Future Society

Business Performance & Performance Summary - related CSR

ZEON develops products by using its R&D expertise to discover new possibilities in view of the needs of society and its manufacturing
technologies to realize these products.
We aim to contribute significantly towards progress in society by promoting our various technologies and new materials to achieve
the future today through the power of chemistry.

Below are the financial and non-financial results for the past five years.

Improved performance of rubber materials for engines
・Use of anti-corrosive to handle biofuels
・High heat resistance and durability to facilitate clean diesel engine compatibility

Materials to enhance battery performancein electric cars and hybrid vehicles■Consolidated Net Sales■Consolidated Ordinary Income(million yen)
350,000(million yen)
40,00033,62335,000300,000

268,857

250,000

270,383

262,842

250,763

31,48730,000225,878

25,21225,000200,000

20,000150,000

Optical films to improve picture quality oflarge-scale commercial displays

15,000100,000

9,448

10,00050,000

3,848

5,000

0

2008

2009

2010

0

2012 (FY)2011

Due to the economic slowdown and accompanying market stagnation,
consolidated net sales fell over the last three terms. Looking towards the future,
we are aiming for 500 billion yen by fiscal 2020 through business expansion.

2008

2009

2010

2011

2012 (FY)

Due to rising raw material prices and insufficient price pass-through,consolidated ordinary income decreased over the last three terms. However,thanks to cost reduction measures we are maintaining a profit ratio of 10%.

Tire materials to assist fuel efficiency■Net income and EPS(million yen) ■Net income
20,000Gas and chemicals that facilitate the manufacture ofhigher-performance semiconductors■ROE
18,303

EPS (Yen)
100.0019,127

（%）
20.0
16.7

82.75
78.77

15,00014,750

15.5
75.00

15.0

50.00

10.0

25.00

5.0

63.81
10,000

Plastic lenses for enhanced
performance camera devices

5,020

5,000
2,478

Completely new material
Single wall carbon nanotube

・Vehicles and construction materials that use light weightand durability
・Electronic materials that utilize thermal and electricalconductivity

2008

2009

2010

2011

2012 (FY)Net income is being handled with a view towards maintaining a properbalance of return to shareholders and re-investment for growth.

Materials that improve battery
performance in mobile devices

5.0
2.4

21.26

10.50
0

10.1

■Net Sales by Region

0.00

0.0
2008

2009

2010

2011

2012 (FY)

It is vital to build a product/profit structure that is not affected by external
environment factors. We are aiming to improve capital efficiency by making
efforts to expand sales including moves into overseas markets.

■Employees

Other(people)

1.1%

3,500

■Group (excluding ZEON Corporation)

3,000■ZEON Corporation
3,136

2,748
2,882

2,815

2,836

2,857

2008

2009

2010

2011

Asia
2,500

25.2%
63,140FY2012(million yen)

EuropeLow-allergenicity surgical gloves

Japan

54.5%

10.0%
25,198
North America

9.2%
22,966

Innovative medical devices

・Next generation circulatory catheters
・Tools for endoscopic surgery

ZEON GROUP CORPORATE REPORT 2013

By 2020, we plan to achieve an overseas production ratio of 50%, in
particular by establishing production sites in Asia as a growth market.

6

7

ZEON GROUP CORPORATE REPORT 2013

2,000

136,711
1,500
1,000
500
0

2012 (FY)

Typically, figures remained largely unchanged, however we experienced
an increase in group company employees overseas in fiscal 2012 due toaccelerated overseas expansion.

Contributing to Our Future Society

Business Performance & Performance Summary - related CSR

ZEON develops products by using its R&D expertise to discover new possibilities in view of the needs of society and its manufacturing
technologies to realize these products.
We aim to contribute significantly towards progress in society by promoting our various technologies and new materials to achieve
the future today through the power of chemistry.

Below are the financial and non-financial results for the past five years.

Improved performance of rubber materials for engines
・Use of anti-corrosive to handle biofuels
・High heat resistance and durability to facilitate clean diesel engine compatibility

Materials to enhance battery performancein electric cars and hybrid vehicles■Consolidated Net Sales■Consolidated Ordinary Income(million yen)
350,000(million yen)
40,00033,62335,000300,000

268,857

250,000

270,383

262,842

250,763

31,48730,000225,878

25,21225,000200,000

20,000150,000

Optical films to improve picture quality oflarge-scale commercial displays

15,000100,000

9,448

10,00050,000

3,848

5,000

0

2008

2009

2010

0

2012 (FY)2011

Due to the economic slowdown and accompanying market stagnation,
consolidated net sales fell over the last three terms. Looking towards the future,
we are aiming for 500 billion yen by fiscal 2020 through business expansion.

2008

2009

2010

2011

2012 (FY)

Due to rising raw material prices and insufficient price pass-through,consolidated ordinary income decreased over the last three terms. However,thanks to cost reduction measures we are maintaining a profit ratio of 10%.

Tire materials to assist fuel efficiency■Net income and EPS(million yen) ■Net income
20,000Gas and chemicals that facilitate the manufacture ofhigher-performance semiconductors■ROE
18,303

EPS (Yen)
100.0019,127

（%）
20.0
16.7

82.75
78.77

15,00014,750

15.5
75.00

15.0

50.00

10.0

25.00

5.0

63.81
10,000

Plastic lenses for enhanced
performance camera devices

5,020

5,000
2,478

Completely new material
Single wall carbon nanotube

・Vehicles and construction materials that use light weightand durability
・Electronic materials that utilize thermal and electricalconductivity

2008

2009

2010

2011

2012 (FY)Net income is being handled with a view towards maintaining a properbalance of return to shareholders and re-investment for growth.

Materials that improve battery
performance in mobile devices

5.0
2.4

21.26

10.50
0

10.1

■Net Sales by Region

0.00

0.0
2008

2009

2010

2011

2012 (FY)

It is vital to build a product/profit structure that is not affected by external
environment factors. We are aiming to improve capital efficiency by making
efforts to expand sales including moves into overseas markets.

■Employees

Other(people)

1.1%

3,500

■Group (excluding ZEON Corporation)

3,000■ZEON Corporation
3,136

2,748
2,882

2,815

2,836

2,857

2008

2009

2010

2011

Asia
2,500

25.2%
63,140FY2012(million yen)

EuropeLow-allergenicity surgical gloves

Japan

54.5%

10.0%
25,198
North America

9.2%
22,966

Innovative medical devices

・Next generation circulatory catheters
・Tools for endoscopic surgery

ZEON GROUP CORPORATE REPORT 2013

By 2020, we plan to achieve an overseas production ratio of 50%, in
particular by establishing production sites in Asia as a growth market.

6

7

ZEON GROUP CORPORATE REPORT 2013

2,000

136,711
1,500
1,000
500
0

2012 (FY)

Typically, figures remained largely unchanged, however we experienced
an increase in group company employees overseas in fiscal 2012 due toaccelerated overseas expansion.

■Research and Development Expenses■Social Contribution Investment(million yen)
14,000(million yen)120
11,895

11,32012,00010,000

11,106100.72

100

9,532

8,954

80

70.19

8,000
60
6,000
40

4,000

33.71

20

2,000
0

2008

2009

2010

2011

2012 (FY)

Notwithstanding a temporary drop in R&D expenses, a figure of around 10
billion yen was maintained. A similar expenditure level will be maintained
also in the future, regardless of sales.

0

2008

2009

2010

2011

2012 (FY)The increase in fiscal 2011 is mainly due to donations in support of victimsof the Great East Japan Earthquake. In fiscal 2012, investments for CSR
activities were expanded.
*Aggregation was commenced from fiscal 2010. Data are for Zeon Corporation only.

■Environmental Protection Costs■Environmental and Safety Investment■Environmental Conservation-Related ■Safety-Related(100 million yen)
25

6,055

6,000

19.1

20

(million yen)
7,000

5,000

4,774

15

13.6

4,000
3,000

10

3.2

2,000
2.8

2008

2009

7.9

7.6

6.3

0

4,258

3,306

11.3

5

4,603

15.3

1,000

1.9

2010

2011

2012 (FY)

0

2008

2009

2010

2011

2012 (FY)

Because environmental and safety related equipment investments are made in
response to actual situations, relatively large fluctuations may occur, dependingon the year.

Figures include costs for reducing environmental impact and for greening offactories etc. In fiscal 2012, replacement of worn equipment resulted in a riseof 14% over the previous year.

* Data are for ZEON Corporation only.

* Data are for ZEON Corporation only.

■Energy Usage per Net Sales■CO2 Emissions(1,000 tons)
900
800(crude oil equivalent, kℓ/million yen)
1.06
1.05
762

1.04
686

700

615

661

1.02
594

600

1.04

1.00

500

0.98

400

0.96

300

0.94

200

0.92

0.97

0.97
0.94

100
0

2008

2009

2010

2011

2012 (FY)

All group companies are engaged in serious efforts to reduce CO2 emissions.
In fiscal 2012, emissions amounted to 594,000 tons, the lowest figure over the
past five years.

0.00

2008

2009

2010

2011

2012 (FY)

Energy usage efficiency is improving continuously, due to factors such as higher
product values, improved production efficiency, and energy saving measures.

ZEON GROUP CORPORATE REPORT 20138

Major Sales & Production Bases
ZEON is moving forward with the globalization of its businesses operations, having turned its attention to overseas markets in the 1970s.
We are setting up sales networks in major markets around the world and establishing a production system for rubber and resin products. In addition,
we have R&D facilities in the US and Europe. We are also building R&D and sales base in China, a market which is growing rapidly. We are aiming tobecome a company that, through its local production systems, builds close ties with local communities and contributes to the global society.

Global bases (as of April 1, 2013)
EuropeZEON Chemicals Europe Ltd.
■ ZEON Europe GmbH■ ZEON Europe GmbH - Branch in France■ ZEON Europe GmbH - Branch in Spain■ ZEON Europe GmbH - sede secondaria in Italia■ Telene S.A.S.
■

ZEON Chemicals Europe Ltd.
U.K. Plant

ZEON Europe GmbH

Asia and Oceania
ZEON (Shanghai) Co., Ltd.
ZEON Trading (Shanghai) Co., Ltd.
■ SHANGHAI ZEON Co., Ltd.
■ ZEON Polymix (Guangzhou) Co., Ltd.
■ TAKEHARA ZEON (Shanghai) Co., Ltd.
■ Suzhou Rui Hong Electronic Chemicals Co., Ltd.
■ ZEON Kasei (Changshu) Co.,Ltd.
■ ZEON KOREA CO., LTD.
■ ZEON Shinhwa Inc.
■ ZEON CSC Corporation■ ZEON Asia Pte Ltd■ ZEON ASIA MALAYSIA SDN. BHD.
■ ZEON Chemicals Singapore Pte. Ltd■ ZEON Chemicals (Thailand) Co., Ltd.
■ ZEON Advanced Polymix Co., Ltd.
■ ZEON Manufacturing Vietnam Co., Ltd.
■■ZEON Polymix (Guangzhou) Co., Ltd.

ZEON Advanced Polymix Co., Ltd.

*When indicating company names, “ZEON” is indicated in capital letters.

9

ZEON GROUP CORPORATE REPORT 2013

ZEON Chemicals (Thailand) Co., Ltd.

■Production Site

●Sales Office

Japan (as of April 1, 2013)
ZEON Kasei Co., Ltd.
Tokyo Zairyo Co., Ltd■ ZEON North Co., Ltd.
■ ZEON Yamaguchi Co., Ltd.
■ ZEON F&B Co., Ltd.
■ ZEON Medical Inc.
■ ZEON Polymix Inc.
■ RIMTEC CORPORATION■ ZEON Rim Co., Ltd.
■ ZEON Chemicals Yonezawa Co., Ltd.
■ IBARAKI ZEON Kasei Co., Ltd.
■ Okayama Butadiene Co., Ltd.
■ Zis Information Technology Co., Ltd.
■ Optes Inc.
■ TFC Co., Ltd.
■ TOHPE CORPORATION■ TOHPE Manufacturing Co., Ltd.
■■ZEON Chemicals L.P.
Kentucky Plant

ZEON Chemicals L.P.
R&D Center■Takaoka Plant■
Tokuyama
Plant■
Mizushima
Plant

●
Osaka
OfficeR&D Center● ●Head
Office●本社■Kawasaki Plant●
Nagoya Office

Head Office

ZEON Chemicals L.P.
Texas Plant

The Americas

Mizushima Plant

Takaoka Plant

Tokuyama Plant

Kawasaki Plant/R&D Center

ZEON Chemicals L.P.
■ ZEON Chemicals L.P. West Coast Office■ ZEON Chemicals L.P. R&D Center■ ZEON Chemicals L.P. Kentucky Plant■ ZEON Chemicals L.P. Mississippi Plant■ ZEON Chemicals L.P. Texas Plant■ ZEON do Brasil Ltda■

ZEON GROUP CORPORATE REPORT 201310

Group Company Data
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
R&D Center
1-2-1 Yako, Kawasaki-ku, Kawasaki, Kanagawa 210-9507, Japan
Tel: +81-44-276-3721 Fax: +81-44-276-3720
Takaoka Plant
630 Ogino, Takaoka-shi, Toyama 933-8516, Japan
Tel: +81-766-21-0252 (Direct) Fax: +81-766-21-8201
Kawasaki Plant
1-2-1 Yako, Kawasaki-ku, Kawasaki, Kanagawa 210-9507, Japan
Tel: +81-44-276-3700 (Direct) Fax: +81-44-276-3701
Tokuyama Plant
2-1 Nachi-cho, Shunan-shi, Yamaguchi 745-0023, Japan
Tel: +81-834-21-8501 (Direct) Fax: +81-834-21-8793
Mizushima Plant
2767-1 Kojima Shionasu Aza Niihama, Kurashiki-shi, Okayama 711-8511, Japan
Tel: +81-86-475-0021 Fax: +81-86-475-1169
Osaka Office
Yotsubashi Park Building 3rd Floor, 1-4-10 Itachibori, Nishi-ku, Osaka 550-0012, Japan
Tel: +81-6-6536-2930 Fax: +81-6-6536-2932
Nagoya Office
TAK Bldg., 3-134 Hongo, Meito-ku, Nagoya 465-0024, Japan
Tel: +81-52-769-5861 Fax: +81-52-769-5863

ZEON Group (Consolidated subsidiary)Japan
ZEON Kasei Co., Ltd.
Shin Marunouchi Center Building, 1-6-2 Marunouchi, Chiyoda-ku, Tokyo
Business focus Manufacturing and sale of packing materials, packing containersand distribution equipment
Tokyo Zairyo Co., Ltd
Shin Marunouchi Center Building, 1-6-2 Marunouchi, Chiyoda-ku, Tokyo
Business focus Trading
ZEON North Co., Ltd.
351 Ejiri, Takaoka-shi, Toyama
Business focus Contracting, design, construction and management for various facilities;
sale of industrial materials and equipment; purchase and sale of petrochemical products;
Validating environmental measurement, measuring working environment; conducting
various analyses
ZEON Yamaguchi Co., Ltd.
2-1 Nachi-cho, Shunan-shi, Yamaguchi
Business focus Purchase and sale of civil engineering materials, packing materials, andvarious facilities; design and construction, contracting for various plants; environment
analysis
ZEON F&B Co., Ltd.
Shin Marunouchi Center Building, 1-6-2 Marunouchi, Chiyoda-ku, Tokyo
Business focus Agency business for nonlife insurance; loan and allocating businessto each group company
ZEON Medical Inc.
Shuwa Shiba Park Building, 2-4-1 Shiba Kohen, Minato-ku, Tokyo
Business focus Manufacturing and sale of medical equipment
ZEON Polymix Inc.
1-11-1 Ishizue, Ohtsu-shi, Shiga
Business focus Manufacture of rubber compounds (CM)RIMTEC CORPORATION
Shin Marunouchi Center Building, 1-6-2 Marunouchi, Chiyoda-ku, Tokyo
Business focus Sales of RIM combination liquid and molded items
TOHPE CORPORATION
1-5-11 Chikkoshinmachi, Nishi-ku, Sakai-shi, Osaka
Business focus Sales of paints and specialty materials
TOHPE Manufacturing Co., Ltd.
2700 Tsuge, Iga-shi, Mie
Business focus Manufacturing of paints and specialty materials

New ZEON Chemicals Singapore Pte. Ltd plant

11

ZEON GROUP CORPORATE REPORT 2013

●Elastomer Materials Business▲Specialty Materials Business■Other Business

ZEON Group (Non consolidated subsidiary)

The Americas

Japan

ZEON Chemicals L.P.
4111 Bells Lane, Louisville, Kentucky 40211, U.S.A.
Business focus Manufacture and sale of synthetic rubbers

ZEON Chemicals Yonezawa Co., Ltd.
3-446-13 Hachimanpara, Yonezawa-shi, Yamagata
Business focus Manufacturing, processing and sale of aromatic chemicals, the middle
objects of medicine and agricultural chemicals, and RIM combination liquid

ZEON do Brasil Ltda
Rua Arandu, 1544, Sao Paulo SP, Brazil
Business focus Sale of synthetic rubbers and resins

EuropeZEON Chemicals Europe Ltd.
Sully,Vale of Glamorgan, CF64 5ZE, United Kingdom
Business focus Manufacture and sale of synthetic rubbers
ZEON Europe GmbHHansaallee 249, 40549 Dusseldorf, Germany
Business focus Sale, export, and import of synthetic rubbers and resins

IBARAKI ZEON Kasei Co., Ltd.
1175 Kamiizushima, bando-shi, Ibaraki
Business focus Manufacturing of processed plastic products (PVC compounds), powderedrubbers and molding products with resin sheet
Okayama Butadiene Co., Ltd.
3-1-11 Nihonbashi Honcho, Chuo-ku, Tokyo
Business focus Manufacture and sale of butadiene monomer
Zis Information Technology Co., Ltd.
Shin Marunouchi Center Building, 1-6-2 Marunouchi, Chiyoda-ku, Tokyo
Business focus Consulting about data processing systems; sales and maintenanceof computer and office automation equipment

Telene S.A.S.
2, rue Marie Curie - 59910 Bondues, France
Business focus Development and distribution of Telene® DCP-RIM resin

Optes Inc.
422-1, Futagamishin, Takaoka-shi, Toyama
Business focus Manufacturing of optical film and optical parts; design and manufacturingof metallic molding

Asia and Oceania

Asia and Oceania

ZEON Trading (Shanghai) Co., Ltd.
Room 1501, Hongwell International Plaza, No.1600 Zhongshan West Road, Xuhui
District, Shanghai, Code:200235, China
Business focus Sale, export, and import of synthetic rubbers and chemicals
and related products

ZEON (Shanghai) Co., Ltd.
Room 1502, Hongwell International Plaza, No.1600 Zhongshan West Road, Xuhui
District, Shanghai, Code:200235, China
Business focus Provide assistance to and exercise control over the ZEON Corporation
Group companies in China with regard to such functions as accounting, finance,
personnel management, legal, etc.

SHANGHAI ZEON Co., Ltd.
No.380, Shennan Road, Zinzhuang Industry District, Minhang, Shanghai, 201108,
China
Business focus Manufacture and sale of rubber compounds (CM)ZEON Polymix (Guangzhou) Co., Ltd.
Jing Quan 1st Road, Yong He Economic Zone, Guangzhou, 511356, China
Business focus Manufacture and sale of rubber compounds (CM)ZEON Shinhwa Inc.
504. Diplomatic Center B/D, 1376-1, Seocho-Dong, Seocho-Gu, Seoul, 137-070, Korea
Business focus Sale of electronic materials
ZEON Asia Pte Ltd.
331 North Bridge Road, #20-01/02, Odeon Towers, Singapore 188720
Business focus Sale, export, and import of synthetic rubbers, synthetic latex
and petroleum resins
ZEON Chemicals Singapore Pte. Ltd
331 N Bridge Rd, Singapore 188720
Business focus Manufacture of synthetic rubbers
ZEON Chemicals (Thailand) Co., Ltd.
3 Soi G-14, Pakorn-Songkhrorad Road, Tambol Huaypong, Amphur Muangrayong,
Rayong 21150, Thailand
Business focus Manufacture and sale of petroleum resins

TAKEHARA ZEON (Shanghai) Co., Ltd.
No.380, Shennan Road, Zinzhuang Industry District, Minhang, Shanghai, 201108, China
Business focus Manufacture and sale of silicon rubber compounds (CM)Suzhou Rui Hong Electronic Chemicals Co., Ltd.
No.501, Minfeng Road, Economic Development Zone, Wuzhong District, Suzuhou City,
Jiangsu, China
Business focus Manufacture and sale of photoresist
ZEON KOREA CO., LTD
No. 403, 4Fl., City Air Tower 159-9 Samseong-dong Gangnam-gu Seoul, 135-973, Korea
Business focus Sales and import of optical materials, electronic materials, synthetic resins,
synthetic rubbers
ZEON CSC Corporation
3rd Fl. 266, Sec. 1, Wen Hwa 2 Road, Linkou Dist., New Taipei City 24448, Taiwan, R.O.C
Business focus Sale of optical materials
ZEON ASIA MALAYSIA SDN. BHD.
Unit 208, Block B, Phileo Damansara II, No.15, Jalan16/11, Off Jalan Damansara, 46350
Petaling Jaya, Selangor, Malaysia
Business focus Sales of synthetic latexes
ZEON Advanced Polymix Co., Ltd.
591 UBCII BLDG, Office No.2206, 22thFL, Sukhumvit 33rd, Klongton Nua, Wattana,
Bangkok 10110 Thailand
Business focus Manufacture and sale of rubber compounds (CM)ZEON Manufacturing Vietnam Co., Ltd.
Land Lot No: IN1-6A and IN1-6B, VSIP Haiphong Township, Industrial and Service Park,
Dinh Vu-Cat Hai Economic Zone, Thuy Nguyen District, Haiphong city, Vietnam
Business focus Manufacturing and sale of packing containers

ZEON GROUP CORPORATE REPORT 2013

12

ZEON Group History
Since its founding, ZEON’s strengths have been underpinned by its technologies. The group has developed and released highly competitive
products. Going forward, ZEON aims to continue to take on new challenges, building upon its present fields of business.

Product history
Introducing some of our many products

1956 Polyvinyl chloride resins

1959 Synthetic rubber products

1965 Butadiene rubber

Aug 1973 C5 petroleum resins(used in traffic paint)●Aug. 1969 Mizushima Plant completed●Aug. 1965 Tokushima Plant completed and operation of GPB facilities commenced●Sep. 1961 Listed on the Tokyo Stock Exchange, then on the Osaka/Nagoya Stock Exchanges in October●Jul. 1959 Kawasaki Plant completed, launched Japan’s first synthetic rubber production, opened Central Research Laboratory●Nov. 1956 Takaoka Plant completed●Sep. 1953 Technological Research Laboratory opened●Apr. 1952 Kanbara Plant completed, began PVC production●Jan. 1951 Technical assistance contract for the manufacture of polyvinyl chloride resins (PVC) concluded with BF Goodrich Chemicals Co. (US)●Apr. 1950 Nippon ZEON Co., Ltd. founded

1950

1960

Launched PVC and synthetic rubber production
Nippon ZEON Co., Ltd. was founded as a PVC manufacturer in 1950,
established through capital from three Furukawa group companies —Furukawa Electric Co., Ltd., The (present) Yokohama Rubber Co., Ltd., andNippon Light Metal Co., Ltd. The company acquired its PVC manufacturing
technologies from BF Goodrich Chemicals Co. in the United States, whichat the time was the global leader in the industry. The PVC business was
the company’s original business pursuit until its withdrawal from thebusiness in 2000.
Furthermore, in 1959, ZEON acquired technologies from BF Goodrichto start up a acrylonitrile butadiene rubber (NBR) plant. This was Japan’s
first domestic synthetic rubber plant. Following this, the company
embarked on the production of styrene-butadiene rubber (SBR). ZEON
thus established its synthetic rubber business, which produces synthetic
rubber for tires and engine components, and which it continues to carryout today.

Developed proprietary GPB and GPI technologies thatlead the world
In the petrochemical industry, which also uses crude oil as a raw
material, technological capabilities are a key element impacting thecompetitive strength of a company. ZEON, aiming to secure butadiene,
which is the raw material used for producing PVC and synthetic rubber,developed the GPB*1 process in 1965 to efficiently extract high-grade
butadiene from C4 fraction. Moreover, in 1971, the company developed
the GPI*2 process, to efficiently extract isoprene, the raw material for
isoprene rubber (IR), and other useful components, from C5 fraction.

13

ZEON GROUP CORPORATE REPORT 2013

1970

1980

These are proprietary technologies of ZEON. The company isexporting its GPB technologies to countries around the world. This
contributes substantially to the company’s competitive edge andpromotes the ZEON name around the world.
*1 GPB: Z EON process of butadiene. This is a proprietary ZEON technology used to extract highly pure butadienefrom C4 fraction.
*2 GPI: Z EON process of isoprene. This is a proprietary ZEON technology used to extract isoprene and otherhighly pure effective substances from C5 fraction.

Shifting to comprehensive uses of C5 fraction
Isoprene rubber, made from raw materials obtained through the GPIprocess, is a useful material which has the same chemical stability as
natural rubber. There are many substances that are derived as a byproduct of this process however the GPI process also has advanced
functionality for the separation of these by-products at a high degreeof purity. ZEON has focused on the effective use of these various
substances. The process was developed and applied to the productionof petroleum resins and thermoplastic elastomer SIS in the 1980s,
synthetic aroma chemicals and RIM molded items in the 1990s, andcyclo-olefin polymers in and after 2000. As a result, we have grown
to be a business that accounts for a large share of the global market.
Moreover, the technologies fostered during this development process
are being used in areas other than C5 fraction.

Going from pollution measures to environmental andsafety measures and CSR activities
Since the 1960s, environmental regulations were enacted as pollution
issues surfaced. ZEON’s plants also face a number of environmental
issues. In response to this, ZEON developed and introduced numerous

ZEON Group's Net Sales (Image)1982 Chemicals for semiconductor
manufacturing (launched electronicmaterials business)半導体製造向け薬液類（電子材料事業に進出）

1984 Zetpol®, hydrogenated nitrile
rubber (used in oil drilling pipe
joints)1985 Thermoplastic elastomer SIS(used in adhesive tape)1989 RIM products business1990 Zeonex® and optical disks●Mar. 2000 Company logo and company name changed to ZEON CORPORATION to coincide with the 50th anniversary●Sep. 1999 Acquired special rubber business from Goodyear Tire & Rubber Company (US)●Dec. 1998 Acquired NBR business from DSM Copolymer (US)●Nov. 1998 Takaoka Plant acquires ISO 14001 certification. Tokuyama, Kawasaki, & Mizushima Plants certified in 1999

●Jun. 1998 C5 hydrocarbon resin plant of ZEON Chemicals (Thailand) Co., Ltd. completed●Oct. 1994 Takaoka & Tokuyama Plants acquire ISO 9002 certification. Kawasaki & Mizushima Plants certified in 1995
●Feb. 1990 First company in the world to receive approval to manufacture ventricular-assist devices●Mar. 1989 Acquired the nitrile rubber operations of BP Chemicals (UK) and in October acquired the specialty rubber business of BF Goodrich Chemicals Co. (US)●Nov. 1985 Entire company awarded Deming Prize for TQC

1990

2000

facilities. The company also established industrial analysis centers andcontributed to the commissioned business of environmental analysis.
In later years, there was heightened social interest in theenvironment overall, not only pollution, and also chemical productsafety. In 1995, the Japan Chemical Industry Association launched theJapan Responsible Care Council (JRCC). ZEON participated from theinception of the JRCC and also poured its energies into developing
environmental and safety measures. In 1997, the company established
ZEON’s 7 Articles, which is its code of conduct. In 2010, we expandedon this and issued our CSR Policy and CSR Code of Conduct. Since
2011, we deployed the CSR Core Projects initiative, whereby wesystematically share local community activities that were previously
conducted separately by each plant.

but also in large part due to ZEON’s manufacturing technologies
developed to commercialize them. ZEON has thus established a uniqueand reliable technological platform incorporating these manufacturing
techniques.

Rolling out higher-grade materials and establishing
top-notch manufacturing technologies
In recent years, there have been calls for sophisticated products which
realize energy efficiency in response to environmental problems, andsimilar expectations are growing for chemical materials. In the synthetic
chemical business, ZEON developed a hydrogenated nitrile rubber,
Zetpol®. The material achieves both low cost and high functionality andis being used in automobile engine components, and other applications
with strict requirements. In addition, cyclo-olefin polymers, developed
from a comprehensive use of C5 fraction, are high-performancematerials used in optical films, such as for LCD panels and lenses, andalso as a material for electrical insulating.
However, the realization of high functionality by these materials was
not achieved solely through the properties of the chemical substance2010

Moving into the field of healthcare
A high level of safety is essential for pharmaceuticals, medical devices,and other products related to human health. In light of this, thedevelopment of high value-added product is expected. ZEON entered
the medical market in 1973 first with catheters for the urinary tract andfor delivering anesthetics during surgery. Later, the company developed
catheters mainly for artificial kidney and auxiliary artificial heartpumps and accumulated expertise to expand its business primarily
into the area of medical equipment for cardiovascular, nutritional andgastrointestinal areas, such as catheters and stents.

Diverse R&D
ZEON possesses many proprietary and highly competitive technologies,
such as the GPB process. We have conducted joint research with manyindustrial, governmental and academic bodies, in the advancement of
new product categories. ZEON is conducting joint research with IBM
related to semiconductor materials, which is producing innovative
products. The company has won a number of awards for this product.
Moreover, going forward, a wide variety of applications are anticipatedfor single-walled carbon nanotubes, for which the company has been
carrying out research since 2006, mainly in partnership with The
National Institute of Advanced Industrial Science and Technology.

ZEON GROUP CORPORATE REPORT 201314

Top Message

We will continue to expand our operations to achieve
consolidated net sales of 500 billion yen and an overseas
production ratio of 50% in fiscal 2020.

ChairmanPresident

Chairman Naozumi Furukawa, newly appointed in July 2013 and President Kimiaki Tanaka explain initiatives to realize sustainablegrowth and future prospects in Q&A format.
Q1

What is the SZ-20 Mid-Term Management Plan you are implementing in order to realize yourEnterprise Blueprint for 2020?

A1

In order to realize our Enterprise Blueprint for 2020, “ZEON creates
the future today through the power of chemistry.” Our Mid-Term
Management Plan through to fiscal 2013, which is aimed at achieving
our Enterprise Blueprint for 2020, is called “SZ-20.” Its fundamental
strategies are as follows.
(1) Company-wide business strategy
We will further strengthen our Elastomer Materials and Specialty
Materials businesses to expand our operations globally.
(2) Promoting the corporate culture
We will promote the achievement of our Enterprise Blueprint for 2020
based upon visualization of the corporate culture.

15

ZEON GROUP CORPORATE REPORT 2013

Major changes in the business environment are forecast in the
future, however there is no change in our company’s commitment“To contribute to the realization of customer dreams and a prosperous
society” based upon our CSR Policy. We believe it is possible to achieve
our mission by implementing projects based on the key sense of value(speed, dialogue, and social contribution) and qualities of ZEON weadmire (mutual trust and fellowship).

Corporate
Philosophy

Contribute to the preservation of the Earth andthe prosperity of the human race
Realization

CSR
PolicyMid-Term
Management
Plan● Ensure compliance and meet society’s needs for safety and security● Contribute to sustainably developing society and protecting

the global environment through our corporate activities● Ensure that each and every ZEON person is aware of
CSR and acts accordinglyEnterprise Blueprint for 2020

Key sense of value

Speed
DialogueSocial Contribution

ZEON creates the future
today through the powerof chemistry
ZEON will continue to contribute to therealization of customer dreams and aprosperous society.

Treasured ZEON characteristics

Mutual trust and fellowship

Evolve ideas towards fiscal 2013 execution

Promoting thecorporate culture

Company-wide business strategy
Elastomer Materials BusinessSpecialty Materials Business

Further strengthen competitive
businesses by responding globally to
growth markets

Expand operations by accelerating R&D
in the three key fields*

We will promote the achievementof our Enterprise Blueprint for2020 based upon visualization of
the corporate culture.

*IT components (optical, packaging and electronic), energy components and medical devices

Q2

Describe the progress of the SZ-20 Mid-Term Management Plan and the issues faced.

A2

We are deploying measures to realize the long-term targets of 500 billion
yen in consolidated net sales and an overseas production ratio of 50%
in fiscal 2020 established in the business strategy for the SZ-20 MidTerm Management Plan. With the results in fiscal 2012 of approximately
250 billion yen, we will need to increase sales by roughly double in orderto achieve the target for fiscal 2020. To this end, we will successively
establish bases, mainly overseas. Against the initial planned sales targetof 320 billion yen for fiscal 2013, the final year of the SZ-20 plan, theoutlook at the start of fiscal 2013 was 290 billion yen, which I believe
indicates we are drawing slightly nearer to our goal.

FY2020Consolidated net sales
500 billion yen
FY2020Overseas production
ratio 50%ZEON GROUP CORPORATE REPORT 201316

segments working in close concert.
In the Elastomer Business segment, we are further strengthening ouralready strong business by meeting demands of a growing market froma global perspective. Development of new applications is anticipated forour new Zetpol®, and we are increasing our competitiveness with new
products such as medical gloves being developed using synthetic latex.
In the Specialty Material Business segment, we are giving full attention
to our competitiveness in medical devices, optical lenses, optical films,
battery materials and other products. We intend to accelerate our R&D
further and expand our business focused on our three key fields.

However, in the automotive industry, with which ZEON has strong ties,
the growth of the tire materials market, which continued up to 2011,
has stopped and the market is on a downward trend, including that for
natural rubber. ZEON produces a large number of goods which require ahigh usage of C4 and C5 fractions, however the weak yen has caused ajump in the cost of naphtha, and it is possible that their procurement will
become more difficult with the spreading use of shale gas. In the future,
we will require wisdom and initiative to know what kind of resources to
use to secure stable supply sources for production.
In view of this, overall, we are polishing our various strengths in the
Elastomer Business (synthetic rubbers, synthetic latexes and chemicals)
and our three key fields in the Specialty Material Business (IT components(optical, packaging and electronic), energy components and medical
devices), and accelerating our global business with these two businessQ3
A3

How are you advancing global development efforts?
Regarding the Elastomer Business segment, in June 2013 we completed
a new petroleum resin plant in Thailand. We are also constructing a new
S-SBR plant in Singapore which will start operations in September.
These investments will top 20 billion yen.
Regarding the Specialty Material Business segment, we are seeinguser companies in the fields of optical lenses and lithium ion batteriestransfer their production overseas, so overseas transference of our own
production bases as well is a possibility. Also, from the viewpoint ofdeveloping markets and ensuring access to C5 fraction materials, weare considering establishment of Asian production bases.

Global Developments in Elastomer Business
China
Establishment of a management company
and PSC production base

■ ●●
●

●

ThailandAugmenting apetroleum resin plant

Expanded facilities in Thailand

●
●
■
■
■■ ■
■
■●
●
■■ ■
■●

●
■

What are your thoughts on R&D strategy?

A4

Through innovative original technology that “do not imitate and cannot
be imitated,” ZEON has developed products that are competitive andcontribute to society. Our original technology and products that support
us currently were born from research and development. Therefore, forus, research activities are our life and the origin of all of our business.
ZEON GROUP CORPORATE REPORT 2013■
■ Previously existingproduction bases■ Newly constructed
production bases●

Singapore
An S-SBR production base

Q4■

ZCLP plant in Texas

Viet Nam
A processing baseViet Nam

17●

South Korea
A sales base

PSC (powder slush compound)plant in China

India
A sales base forTokyo Zairyo

USA
Augmenting a Zetpol® plant
Augmenting an acrylic rubber plant● Previously existingsales bases● Newly establishedsales bases
Red indicates facilities operating in 2013

It will be important to continue creating innovation and persist in
R&D non-stop in the future. We have made a variety of efforts, notmerely for structural enhancement, but also involving joint development
in several areas, to further enhance our R&D and achieve quicker results. The Specialty Material Business, in particular, is our new president,

Kimiaki Tanaka’s area of expertise, so we want to be particular andmore particular and keep on being particular to the end.
For that reason, our policy on future R&D investments will be tomaintain them steadily at about 12 billion yen annually and not havethem contingent upon immediate business results.

Q5

What initiatives are you implementing to promote a corporate culture in order to realize your Enterprise
Blueprint for 2020?

A5

Our SZ-20 Mid-Term Management Plan contains the fundamental
policies of the above-mentioned expansion of our business with our twobusiness segments of Elastomer Business and Specialty Material Businessworking closely together with the achievement of our Enterprise Blueprintfor 2020 based upon visualization of the corporate culture which willrealize this.
It is “people” that conduct business activities, in other words, “humanresources.” If we fail to foster human resources, we will be unable either
to design plants or operate them. In order to be able to conduct businessactivities in all countries of the world including Japan, it is necessary tofoster human talent. We are promoting “production innovation*” on thebasis of what we have “envisioned,” and are getting clear results at our
Mizushima Plant. In the future, we want to expand this success to all ofour plants. Also, for our overseas development, it will be important tofoster talent among local human resources. We have already initiated asystem for encouraging talent by inviting technicians employed in various
regions to Japan.

We are also achieving great results with our ZΣ Campaign, involving
continuous cost-cutting efforts by our employees through their own
initiative, and this is contributing to our business results.
* Production Innovations the Daicel Way

The Integrated Production Center at the Mizushima Plant, which is taking the lead in promoting
production innovation

Q6

What efforts are you making to deal with societal issues that ZEON is aware of?

A6First, there is the issue of “safety,” which is a precondition for all
chemical companies. In recent years, there have been frequent
accidents at chemical companies, so we must focus more attention on
this. The aim of “production innovation” is to make production more
efficient, but it also has the effect of increasing the safety of operations
through the sharing of our accumulated knowledge and technical skills.
We must build plants so as to provide the region and society assuranceof their safety, in which “all of our employees can work all day again
today with no accidents.”

Q7

Regarding the CSR Core Projects and CSR promotion plans that were advanced from 2012, what are yourthoughts about future efforts, including aid for recovery from the Great East Japan Earthquake?

A7

On the basis of our CSR Basic Policy and CSR promotion plans, ZEON islaunching CSR Core Projects as an effort to lay the foundation for CSR
activities. The CSR Core Projects are business operations symbolizing CSR
fundamentals or activities that contribute to society, and with regard to
the latter, we think that aiming for a long-term, sustained effort is whatsociety demands and what a corporation ought to do.

Additionally, “meeting society’s expectations” is important. There is aneed always to perform research on new technology to ensure we areproviding society useful products. Then, by using the profits earned fromthose products to build plants that produce goods steadily and safely
with high quality and no waste, we would like to become a company
that continues to earn the trust of society as a “good corporation.”

Regarding the recovery from the Great East Japan Earthquake, thereis less being reported in the media about this than before, but we hearthat in reality recovery assistance will get under way in the future. I thinkthat while our contribution may be modest, we want to make sustained
efforts.

ZEON GROUP CORPORATE REPORT 201318

Highlight

1

Smartphones & ZEON
The Materials produced by ZEON are used in products in a wide range of industries. Our materials contribute significantly to enhancing productperformance. One example is the smartphone, whose popularity has exploded in recent years. Our products are closely aligned with key smartphonecomponents, including liquid crystal panels, batteries, and camera lenses.

Realizing low-cost optical parts using cyclo-olefin polymers
Cyclo-olefin polymers (COP) are resins with excellent transparency. ZEON's COP boasts superiortransparency, heat resistance, precision molding capabilities, chemical resistance, and insulation
capabilities. They also possess features including low water absorption, low birefringence, lowdielectric loss tangent, low dielectric constant, and low density.
Two products with different applications — ZEONEX® and ZEONOR®.

●Camera lenses
Smartphone camera lenses are required to offer
compactness and high performance. In addition,
the lenses must be lightweight, and resistant toenvironmental conditions, such as temperature
and water. ZEONEX® provides a high level of
performance in these areas. This material is used inmany smartphone and mobile device camera lenses.

●High frequency & electrical applications
COP is used in high-frequency connectors andantenna substrates with its low dielectric loss
tangent and loss dielectric constant properties.

●Optical films for Liquid Crystal Displays
The ZeonorFilm® from ZEON is a retardation film
used as one of the multiple optical films found in
Liquid Crystal Displays.
Retardation film is an essential component thatenables a clear view from a wider range of angles
for LCD TVs and smartphones and is indispensable
to LCD image quality.
Production is conducted at the film plant inToyama Prefecture using ZEON Corporation's
unique technology and the industry's first integrated
production system. This achieves reliable quality
and cost. Furthermore, the plant and products areenvironmentally friendly, as solvents and the likeare not used.

Film plant at Toyama Prefecture

19

ZEON GROUP CORPORATE REPORT 2013

A roll of optical film

ZEON materials for lithium-ion batteries
ZEON polymer technologies contribute to high performance of lithium-ion batteries. By
controlling dispersibility at the molecular level, improving electrochemical stability, and strong
binding properties, lithium-ion battery manufacturers can produce safe, high-capacity, long-lifebatteries that have a high output, and that are low cost.

●Sealing Agent for Gaskets
A gasket is a seal that fills gaps and serves as a lid for the battery. Compared with conventional
regular materials, our gaskets offer unrivaled temperature resistance and are also highly
resistant to the battery's internal chemical substances.

High-capacity

Low cost●Binders
Binders for batteries act as an adhesive to “bind” the active anode and cathode particles, bothof which are particulate matter.
ZEON‘s functional binder contributes in realizing high performance through allowing smoothexchange of lithium-ion and electrons.
Moreover, the separator, which divides anode and cathode materials, is coated with a bindermaterial to enhance the functions of a battery.

Long-life

High output

Safe

Structure of lithium ion battery
GasketSeal material

Anode particles

Cathode particles

Conductive material

Anode

CathodeAnode binder

Cathode binder

Aluminum
foil

Copperfoil

Active particle layer

Separator

Active particle layer

Functional layer(heat resistant separator)

Functional layer binder

ZEON developed a revolutionary diagonally stretched optical film manufacturing method
A significant advantage of ZEON's diagonally stretchedmethod, the first commercial application of the techniquein the world, is the ability to readily control the alignmentof resin molecules. This enables roll-to-roll pasting ofretardation film with polarizing plates.
The development of this technology was a part ofa New Energy and Industrial Technology Development
Organization (NEDO) project. This technology wasrecognized for its innovativeness and received the 22nd
Katashi Aoki Technology Award, a prestigious honor, fromthe Japan Society of Polymer Processing.

Conventional method

Manufacturing method using ZEON’s ZD film (diagonally-stretched optical film)

Polarizing plates (Both sides with protective
film and polarizer)
Pasted (fourlayers)Retardation film
Loss
45°
Loss
(There are losses as it is cut diagonally)

Protective film

Polarizer

ZD film(Has a role of retardation
film and protective film. Set
diagonally by 45 degrees)

Roll-to-roll pasting(Requires only 3 layers andloss is small)

ZEON GROUP CORPORATE REPORT 201320

Highlight2

Business Development & CSR in Thailand
The ZEON Group’s Enterprise Blueprint for 2020 is to boost the overseas production ratio to 50% and the company is working towards this goal bystrongly promoting global expansion. The group has already extended its plant and sales network in the Americas, Europe, and Asia. Two of the group’s
companies, engaged in production in Thailand, have a history which spans more than 10 years. In this section, we introduce our business activities inThailand and the measures we are implementing to strengthen trust within the local community.

ZEON Advanced Polymix Co., Ltd.
（ZAP）

ZEON Chemicals (Thailand) Co., Ltd.
（ZCT）ZEON Chemicals (Thailand) Co., Ltd. (ZCT)
Head office: Rayong Prov. Thailand
Establishment: May 9, 1996
Capital: THB 350,000,000
Ownership ratio: ZEON Corp. 73.9%
Business: M anufacturing and sales of QUINTONE®,a petroleum resin
New ZCT plantOperating in Thailand for over 10 years
ZEON Chemicals (Thailand) Co., Ltd. (ZCT) and ZEON Advanced Polymix Co., Ltd. (ZAP) are
our two group companies that operate in Thailand. ZCT, whose plant has an annual output
capacity of 20,000 tons, manufactures QUINTONE® petroleum resins from C5 fraction for saleto customers in Asia and Europe. QUINTONE® demonstrates superior performance in products
such as the adhesive for adhesive tapes and traffic paints, which are used for road markings.
As such, the product is used widely throughout Asia, where infrastructure development is
growing. ZCT was established in 1996 and launched commercial production in April 1998.
In June 2013, the company constructed a new plant, comparable in scale to its existing plant,
and commenced operations in August same year. In July 2008, a laboratory was set up to test
traffic paints, one of its major uses. We use the same materials as our customers to provide
quicker services.
We also invite sales personnel from countries throughout Asia to attend our training seminaron the proper use of traffic paints. We continue to carry out these measures based on our belief
that top-quality products cannot demonstrate superior performance if not used properly.
Meanwhile, prior to the establishment of ZCT, we launched ZAP in 1995, when Japanese
automakers were accelerating expansion in Thailand. ZAP operates the carbon master batch(CMB) business. CMB is made from mixing chemical additives, mainly with synthetic rubber,for use in automobile components. It is crucial that the various materials used in this productare uniformly dispersed for the rubber to perform in line with standards. ZEON’s mixing
technologies are highly praised throughout the industry. In 2011, we renovated our mixing line
to respond to growing global automobile production.

21

ZEON GROUP CORPORATE REPORT 2013

ZEON Advanced Polymix Co., Ltd. (ZAP)
Head office: Rayong Prov. Thailand
Office: Bangkok, Thailand
Establishment: April 26, 1995
Capital: THB 100,000,000
Ownership ratio: ZEON Corp. 40%
Business: M anufacturing and sales of rubber compounds(CM)Contributing to the local community in the spirit of tham bun
In devoutly Buddhist Thailand, tham bun is a common moral belief which translates as “act of virtue.” ZAP and ZCT actively provide employee
benefit programs and makes donations to the local community. Local residents are invited to receive health checkups, which are held at thecompany, along with employees. In addition, on various occasions, the two companies donate and contribute to the welfare of their employees,
local temples, schools, hospitals, disaster areas, and local governments. Recently, the work carried out by these two companies over many years wasrecognized. In 2011, both ZAP and ZCT became certified companies of the CSR Rayong Project, which is hosted by Rayong Province.

CSR Rayong Project certification ceremony. ZAP and ZCTwere both recognized for carrying out CSR activities.
ZCT was also certified in 2012.

The CSR policy and pictures of activities are displayed in
the hallway as a constant reminder of the CSR activities
being implemented.

On National Children’s Day, which is held on the second Saturday of January each year, ZCTand ZAP donate stationery to local elementary schools. Occasionally, donations are also madeto other organizations.

ZAP holds a Safety Week every year. The event is topromote self-awareness of safety issues within the company.
Companies in the industrial park, local residents, and local
governments are invited to participate.

ZCT and ZAP employees actively participate in community clean-up work and tree planting.
Clean-up activities are held nearly every month.

Business activities and social contribution in Thailand
Awareness of environmental issues is also increasing in Thailand. In particular, regulations are becoming stricter for new
businesses at the petroleum industrial complex in the Maptaphut district where ZCT is located. ZCT and ZAP focus onenvironmental issues when carrying out operations. ZCT is especially careful in its environmental management, as it operates
a chemical plant. From 2000, we have been publishing an environmental report. We plan to continue to focus on CSR
activities to become a company that is appreciated by the local community and residents.

Yutaka Isozaki
President of ZEON Advanced Polymix Co., Ltd. and
ZEON Chemicals (Thailand) Co., Ltd.

ZEON GROUP CORPORATE REPORT 201322

Highlight3

CSR Core Projects
A CSR Core Project is a business or social contribution activity that lays the foundation for future CSR activities in ZEON. We asked employees throughout
the ZEON Group to draw up proposals, and selected projects, such as the chemistry classroom and disaster reconstruction assistance volunteer program,from the proposals we received, and are currently implementing them. In this section, we hear from employees taking part in these activities andintroduce some of our projects.

CSR Core Projects roundtable Promoting ZEON's new social contributions

Takafumi Kawanaka
Corporate Planning Department
ZEON Corporation

Keiko Maruyama
Purchasing Department
ZEON Kasei

Yoshinobu Matsuno
Hiroshi Takegami

Masafumi Yamada

Director and Corporate Officer
CSR Division Manager
ZEON Corporation

Manufacturing Division Manager
ZEON Chemicals Yonezawa Co., Ltd.

Manufacturing Division
Toyama Plant Office of Production
Optes

Masatoshi Nasu
Labour Union Chief Secreatry
ZEON Corporation

We held a roundtable discussion with the members from the CSR Core Projects on
May 23, 2013. (Positions as of the time of the discussion)

Chemistry classroom fosters curiosity in children
Takegami: Some of our plants have been conducting their own version of thechemistry classroom for some time now. We collected this knowledge and created
an official program.
Kawanaka: The Kawasaki Plant has been holding a chemistry classroom for the past
five years or so. Many children, and adults, participate in our plant tours. However,as chemical plants handle hazardous materials, we are not able to show them theentire manufacturing process. We started the chemistry classroom to demonstrate
simple experiments that give people an idea of what is going on inside our plant.
These are very straightforward demonstrations, but everyone is excited when they
see the liquid solution turn into rubber, which makes it worthwhile.

Takegami: ZEON CSR Policy is to become a corporate member of society andto cause no distress to it. We basically aim to attain this goal through our corebusiness but we also plan to make social contributions in other ways. These are
our CSR Core Projects. Today, we have gathered to hear impressions and opinionsfrom participants in these activities and to discuss how this feedback should bereflected in future operations. Last year, we asked employees from the entire groupto submit their ideas. We received many proposals, most pertaining to assistance forreconstruction in the areas devastated by the Great East Japan Earthquake and achemistry classroom for children.

Report on CSR Core Projects
Chemistry classroom
We do various experiments, including creating rubber balls tolearn why they bounce differently, fragrances using synthetic
aroma chemicals, and a mysterious light experiment using
ZEON optical films. Until now, each plant held classrooms
independently. From 2013, we also plan to visit events to holddemonstrations.

Great East Japan Earthquake Disaster Aid■Heisei no Mori tree planting group Otsuchi-cho, Kamihei-gun, Iwate
The Yokohama Rubber Co., Ltd., which has capital ties with ZEON, founded a tree planting group in2012 in Otsuchi-cho, Iwate Prefecture. ZEON became a co-sponsor in 2013. In the second tree planting
on May 18, 2013, Chairman Naozumi Furukawa and 13
employees participated. A total of 553 people took part thatday, including 160 local residents from Otsuchi-cho, planting
about 5,000 trees.

Opening ceremony

Chairman Furukawa (center) joined in
the tree planting

Floral offering in front of the former Otsuchi Town Office

We are carrying out various other projects. For details, please refer to reports posted on our website.
“Dream Chemistry 21” Summer Holiday Children's Chemical Experiment Show

23

ZEON GROUP CORPORATE REPORT 2013

Home > CSR > ZEON's CSR > Response to Great East Japan Earthquake and Tsunami Disaster
http://www.zeon.co.jp/csr_e/introduction/earthquake.html

For example, we make two rubber balls, one that bounces and one that does not.
Everyone has a keen interest in the ball that doesn't bounce. When we explain why
the ball doesn't bounce it arouses interest in the everyday rubber products thatare around us. We hope our chemistry classroom has a lasting impression on thechildren who participate.
Takegami: It is about nurturing curiosity. An extension of this curiosity is the
emergence of the desire to practice science. In recent years, it is often said thatchildren are abandoning science studies. We hope that through the chemistryclassroom, they will develop an interest, not necessarily in chemistry, but in science.
We hope to eventually raise the talent who will be responsible for Japan's future.

Crucial for quake-aid volunteer efforts to behands-on and ongoing
Takegami: We mainly send volunteers to help out with reconstruction. In general,volunteers participate in a specialized tour and ZEON covers the cost.
Matsuno: I participated in the removal of sludge and rubble at Minami Sanriku
Town. Regular volunteers, who pay their own way, demonstrated a high level ofawareness. Seeing them in action triggers something inside you.
Nasu: I helped out at a wakame seaweed farm in Kesennuma City. Sometimes what
local residents had to say was tough to hear. But everyone always had a smile on
their face. In the end, when I went home, I felt like the people in Kesennuma were
the ones that actually cheered me up.
Yamada: I participated in the same tree planting group in Otsuchi-cho as thechairman. There was time to look at the town. We saw the aftermath of thetsunami. There are no words to describe what I felt.
Maruyama: I helped out with the organic cotton project in Iwaki City. Local farmers
are struggling, hurt by rumors, and it seems that many farmers have to give up theirlivelihoods. I was glad I had participated because I was able to talk directly with thefarmers and understand their current situation.
Takegami: Did you talk about your experiences during the volunteer tour to yourfamily or to work colleagues?
Matsuno: I talked about volunteering a lot when I went out for drinks withcolleagues. A number of people volunteered after hearing about my experiences.
Yamada: Yonezawa City is close to the disaster area so we visited this district forour company trip. We thought eating at restaurants and shopping in the area would
give the local economy a little boost.
Nasu: I am glad I went because I saw the area first-hand and was able to get areal feel of the situation. It is something that I will remember for the rest of my life.

The volunteer vacation program should encourage people to take action. However,I believe it is also important to make arrangements at the workplace, in terms of
employers that send volunteers, and to ensure that volunteers feel comfortable
about going.
Maruyama: There are definitely several obstacles hindering people from making
arrangements themselves to be a volunteer. I think this tour is a good opportunity.
Takegami: The volunteer tour gives those employees hesitant about going a slightpush. It is not mandatory but we hope employees will take advantage of the
program. Since the company covers expenses, employees can do it as a part of atrip to the area. ZEON plants run on a shift schedule so not many employees can
go at one time. However to keep the program going, it will actually be good tosend a few people at a time. What is important is that we can continue to provide
assistance.

Promoting CSR Core Projects by having employees
contribute their knowhow
Kawanaka: In everyday operations, employees may participate in CSR Core Projects
in some fashion, such as the eco-cap activities without realizing it. I think it isnecessary to boost the recognition of the CSR Core Projects.
Takegami: We need to repeatedly publicize these activities. It is important thateveryone contribute their knowhow to connect with the community and carry out
activities that are of service to society. We hope all of our employees will cooperate
in promoting CSR Core Projects, with the same amount of curiosity that children
show during our chemistry classrooms.

■Restoration volunteer tours■Reconstruction assistance via food

We officially asked employees to volunteer to participate in general reconstruction volunteer tours. We
covered the paper-work and costs for employees that participated. So far, the tour has run 18 times anda total of 83 employees participated. (as of July 31, 2013)

We are participating in the Ministry of Agriculture, Forestry and
Fisheries program to prioritize use of food products from thedisaster area. We are supporting the reconstruction of local
industries by using such ingredients at our employee cafeterias.

2013.6.22-2013.6.23

2013.6.8

2013.3.15-2013.3.16

Rikuzen Takata City, Iwate Pref.

Iwaki City, Fukushima Pref.

Kesennuma City, Miyagi Pref.

Employee cafeteria (Takaoka Plant)
We helped remove sludge and rubble left
in the residential area by the tsunami.
Ultimately, heavy machinery wasbrought in to remove the rubble. Manual
procedures are required to survey
property boundaries and to retrieve
objects left by the deceased.

We assisted in an organic cotton
project, which aims to revitalize thelocal economy by having farmers in
Iwaki organically cultivate cotton. We
participate year-round, helping to plow
the fields, plant seeds, and harvest.

We helped do harvesting work at awakame seaweed farm. Listened towhat local residents had to say while
harvesting, sorting, blanching, andbundling the seaweed.

Establishment of volunteer support system
From January 2013, ZEON started a volunteer vacation program to make it easier for
employees to do volunteer work. Seven people took advantage of this system as ofJune 2013.

ZEON GROUP CORPORATE REPORT 201324

Management Structure
To conduct efficient, sound corporate management, we have created a management system capable of making clear, quick decisions on assignmentof roles. Furthermore, through the CSR Conference and seven committees we manage the diverse risks involved in business activities.

Corporate Governance
ZEON aims to increase profits and achieve ongoing corporate value enhancement while
respecting and balancing the various interests of its shareholders and other diverse
stakeholders. To this end, we are making ongoing efforts to establish a system that enables
efficient and sound corporate management through corporate governance.
Putting into place a corporate governance system allows us to clarify the functions androles of each organizational entity within the company and to carry out quick decisionmaking and execution. We are also improving business transparency through appropriatemonitoring and disclosure of activities and their effects. We are determined to further
enhance our corporate governance system in order to carry out these functions effectively.

Corporate Governance System
General Meeting of Shareholders(Appointment / Dismissal) Collaboration (Appointment / Dismissal)

Decisions / Supervision(Appointment / Dismissal)
Auditing

Board of Directors

Corporate Auditors

Decisions / Supervision(Selection / Dismissal)

Auditing(Dismissal)
Collaboration

Internal
Auditing

Independent Auditor
Financial
Auditing

Information

CSR Conference
CSR Basic
PolicyCommittee

Information(External)

Risk Management Committee
Compliance Committee

External
LawyerEnvironmental and Safety Committee

Quality Assurance Committee
Public Relations Committee

Information (External)

PL Committee

Information (Internal)

Internal auditing

Auditing
Personnel

Business Execution andInternal Controls System

Collaboration

Representative Director
Executive
Committee(Assistance)

Board of Directors
The Board of Directors meets, in principle, every
month with corporate auditors in attendance toensure compliance with applicable laws and thearticles of incorporation in the execution of business.
The role of the Board of Directors besides statutory
duties is to make important decisions about basic
management policy and strategy and other aspectsof business execution. An outside director was
appointed to the Board of Directors at the June 2011
shareholders’ meeting.
Executive Committee
The Executive Committee, in accordance with
Executive Committee regulations, comprises the
President, and executive officers ranked senior
corporate officer or above and meets, in principle,
twice a month to examine and make decisions onimportant business matters after due deliberation
involving consultation with attending full-time
corporate auditors. Important agenda items, as
stipulated in regulations for the Board of Directors,
are examined and decided by the Board of Directors.
Board of Corporate Auditors
The Board of Corporate Auditors comprises fivemembers, including three outside corporate
auditors. The board meets once every four months,
in principle, to report, discuss and resolve importantmatters related to auditing. In accordance withauditing guidelines established by the Board of
Corporate Auditors, each corporate auditor audits
directors’ execution of duties through various means,such as attendance at Board of Directors meetingsand monitoring of business operations, including
subsidiaries’ operations.

Operating division, indirect departments, research laboratories, plants
Control / monitoring

Information(Internal)

Subsidiaries and affiliates

For details

http://www.zeon.co.jp/csr_e/management/
governance.html
Home > CSR > Management > Corporate Governance25

ZEON GROUP CORPORATE REPORT 2013

Risk Management
The Risk Management Committee and the Compliance Committee, along with theCompliance Committee’s subcommittees—the Antitrust Law Regulatory Subcommittee,
the Export Security Control Subcommittee, the Corporate Governance Subcommittee, andthe Information Security Subcommittee are advancing ZEON’s risk management andcompliance efforts.

The activities of each committee and subcommittee in fiscal 2012
Risk Management Committee
In fiscal 2012, the Risk Management Committee
continued handling incidents as they occurred andtook steps to prevent their recurrence. It also enhanced
risk and crisis-related control measures, for example
by promoting the introduction and reinforcement ofbusiness continuity plans (BCP) by each operating
division, performing a revision of our Earthquake
Disaster Response Manual, and implementing
continued training based on this manual.
Compliance Committee
In fiscal 2012, the Compliance Committee improved
the contract management system, and educated groupcompanies in Japan on Japan’s Subcontract Act, Worker
Dispatch Act, and Construction Business Act. The
committee strived to improve compliance awarenessamong all directors and employees of ZEON by
conducting its annual workshops on legal complianceat each office, gathering suggestions for a CSR andcompliance motto, and performing a legal complianceinspection simultaneously at all workplaces, among
other activities.
• Antitrust Law Regulatory Subcommittee
In fiscal 2012, the subcommittee analyzed the reasonsfor and timing of price increases, conformity withrising market prices, and other factors prior to revising
prices for ZEON products within each operating
division. In addition, the subcommittee reviewed thestatus of participation in industry bodies to thoroughly
implement rules.

• Export Security Control Subcommittee
In fiscal 2012, the subcommittee held seminars at the
Head Office (and subsidiaries), laboratories, and plants
with general information on export security control.
In addition to the above, a seminar was held mainlyfor employees in charge of affairs at the Head Office(and subsidiaries) and at laboratories focusing on issues
related to evaluation of chemicals based on Japan’s
Export Trade Control Order.
• Corporate Governance Subcommittee
The Corporate Governance Subcommittee strived to
improve the efficiency of internal control evaluations
and focused on standardizing operations. Nothing
particularly noteworthy took place in fiscal 2012.

CSR Conference
Compliance
Committee

Risk Management
Committee

Prevention of law violations

Prevention and controlof Risks;
Dealing with crises

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

Information Security
Subcommittee

Management of corporate
confidentiality and information
security• Information Security Subcommittee
In fiscal 2012, the subcommittee continued to
implement training through e-learning courses*. It
also completed the establishment of an information
management system, held training for managers andemployees responsible for information security in eachdepartment, and spread awareness regarding these
employees’ roles. The subcommittee also worked toestablish systems and mechanisms to promote a levelof information security abroad that meets ZEON’s
standards.
* E-learning courses saw a participation rate of 99.6%

Internal Reporting System

Internal Reporting Flow Chart
Internal

ZEON established its internal reporting system to quickly collect information on potential
risks and facilitate their resolution. Reports of risk information can be made not only to
one’s supervisor or to the Risk Management Committee directly but also by calling theCompliance Hotline, which connects that person to an external lawyer. No person who
reports a matter of concern will suffer any adverse consequences as a result of making
a report.
There have been six incidents of internal reporting over the last five years (fiscal 20082012). The Risk Management Committee has appropriately dealt with each of theseincidents by conducting an investigation into the reported details and instructing internalorganizations to institute measures accordingly.

External

Supervisor

RiskManagement
Committee

External
lawyerInvestigation andresponse

Receive the report,
record observations,
report results

Whistleblower
Discovers the risk
Discovers thecompliance violation

HOTLINE
Compliance Hotline

Report/Contact
Feedback

For details

http://www.zeon.co.jp/csr_e/management/
risk_compliance.html
Home > CSR > Management > Risk Management andCompliance
ZEON GROUP CORPORATE REPORT 201326

CSR Management
Based on our CSR Policy, which is more concretely spelled out in our CSR Code of Conduct, CSR activities are promoted under
the guidance of each committee.
We are striving to achieve our Enterprise Blueprint for 2020 and these efforts are summarized in our CSR Implementation Plan.

CSR Promotion Structure
The CSR Policy and a more specific CSR Code of Conduct was established in April 2010.
Then in January 2011, we revamped our CSR organizational structure to help advance CSR
activity within ZEON. Chaired by the President, the CSR Conference would be the chief bodyfor decision-making on matters relating to CSR. Seven committees, which would reportto the CSR Conference, were installed to advance CSR activities in specific areas. The CSR
Conference is held six times a year to discuss and finalize activities, measures and annual
activity plans to be advanced by each of the seven committees, and to give necessary
instructions based on progress reports.
President

CSR Conference

CSR Headquarters

CSR Coordination
Division

CSR Promotion
Department

CSR Basic Policy Committee

CSR Promotional Committees
at Offices and Group Companies

General Affairs
Department

Compliance Committee

Antitrust Law Regulatory
Subcommittee

Environmental & Safety
Affairs Department

Risk Management
Committee

Export Security Control
Subcommittee

Quality Assurance
Department

Public Relations
Committee

Corporate Governance
Subcommittee

Legal Affairs
Department

Quality AssuranceCommittee

Information Security
Subcommittee

Corporate Communications &Public Affairs Department

PL Committee

For details

http://www.zeon.co.jp/csr_e/management/management.html
Home > CSR > Management >CSR Management

Internal Auditing
Department

Environmental & Safety
Affairs Committee

CSR Basic Policy Committee
The CSR Basic Policy Committee was established in
January 2011 to stimulate CSR activities of ZEON. It
also provides guidance and support for CSR activities
of CSR Promotional Committees at six ZEON offices
and nine group companies in Japan. Meetings areheld as required. The committee convened 11 times
during fiscal 2012.
In a continuation of efforts started in fiscal 2011,
in fiscal 2012 the committee completed the CSR
Matrix outlining the CSR activities that ZEON shouldtackle, organized by category and stakeholder,
striving to visualize the CSR activities of ZEON as awhole. The committee also started a variety of social
contribution projects, including support for recovery
efforts after the Great East Japan Earthquake.
In a separate effort, the committee worked
to establish internal systems with the goal of
introducing a mechanism for CSR procurement.
Risk Management Committee
Established to manage risks for the purpose ofmaintaining business continuity. The committee is
responsible for systematically preventing potential

27

ZEON GROUP CORPORATE REPORT 2013

risks and gaining control over emerging risks, as well
as for taking controlled action to minimize losses
or damage in the event a crisis does occur. The
committee convened 14 times during fiscal 2012.

philosophies, stances and activities to stakeholder
groups and society as a whole, and to ensure timely
and appropriate disclosure of information by ZEON.
Meetings are held as required.

Compliance Committee
The Compliance Committee was established toprevent violations of laws and regulations. It is
responsible for creating compliance education andtraining programs to be implemented by operating
divisions in charge of business activities. The
committee is convened as required, and the objectiveof its programs is to make sure every director andemployee of ZEON acts in full accordance withthe values and ethics society expects, and thereby
achieves fair and proper management that allow
ZEON to develop business in harmony with the local
community and society at large. The Compliance
Committee has four subcommittees. The committee
was convened twice during fiscal 2012.

Quality Assurance Committee
Formulates plans for management improvement
activities and training related to quality assurance
within ZEON and monitors quality assurance
implementation. Meetings are held as required.

Public Relations Committee
Established to enhance the profile and imageof ZEON through accurate communication of its

PL Committee
Formulates plans for prevention activities andtraining related to the product liability of ZEON andmonitors response to emergencies. Meetings are held
as required.
Environmental and Safety Affairs Committee
Plans and proposes specific environmental andsafety measures for ZEON and monitors progressin addressing environmental and safety issues.
Meetings are in principle held four times per year.

CSR Implementation Plan
We have prescribed ZEON’s Enterprise Blueprint for 2020 for each category and specificinitiatives to achieve these goals.
Category

Enterprise Blueprint for 2020

Responsible Committee/
Subcommittee

Specific Efforts / Details are on this report as indicated in brackets• Mid-Term Management Plan goals have beenachieved, and dividend distribution is stable andcontinuous.

• Implement stable distribution of dividends (P40)

Board of Directors• A world-class risk management system has been
built, is being operated throughout the ZEONGroup, and has gained the trust of society• Implement risk management activities in accordance with ISO 31000 (P26, P27)
1) Construct mechanisms that visualize risk management PDCA in each operating division
2) Revise the Earthquake Disaster Response Manual and hold regular drills

Risk Management Committee

Corporate governance• A business continuity management system is being
deployed throughout the Group (various types of• F ormulate business continuity plans (BCPs) (P26)business continuity plans (BCPs) have been formed
Formulate BCPs for all ZEON Corporation operating divisions
and are revised regularly through training, etc.)

Risk Management Committee• The internal reporting system (the Compliance
Hotline) is being operated appropriately•O perate, promote, and educate employees about the internal reporting system (P26)

Risk Management Committee• Compliance awareness is widespread and allows
ZEON to respond to environmental changes• R evise company rules regularly (in accordance with the revision of laws and regulations) (P26)•H old workshops on legal and regulatory compliance (P26)• E ducate employees about the internal reporting system (P26)

Compliance Committee• A global compliance system has been establishedand operates autonomously•C onsolidate and establish clear and concrete company rules among overseas group companies• S urvey the state of compliance among overseas group companies

Compliance Committee

Compliance• Information is disclosed quickly and appropriately • H old financial results briefings and publish CSR reports (P40)(including negative information regarding business • D isseminate information via the company website (P40)
conditions, CSR, risks, etc.)•H old briefings for individual investors and analysts in Japan and overseas and respond to media inquiries (P40)

Public Relations Committee

Information

Environment, safety,
and quality

Human rights andlabor practices• Information on trade secrets is managed appropriately• Appropriately enforce company rules (information management regulations, personal information protection
management rules, etc.) and provide e-learning courses•C onstruct and operate information management systems

Information Security
Subcommittee• All worksites continue to have zero incidents andzero accidents, and are trusted by society• Visualize on-site jobs through dialogue, further reduce risk, and achieve zero incidents and zero accidents (P35)
1) Identify the sources of danger through dialogue and visualization of worksites to steadily reduce risk
2) Create systems to steadily improve the level of environmental safety management at overseas worksites
3) P redict the risk of major earthquakes and improve disaster response capabilities through drills and improvements of systems and facilities

Environmental &Safety Affairs Committee• All worksites have reduced their environmental
impact which has gained social appraisal• Promote activities aimed at reducing environmental impact, and achieve zero emissions and CO 2 reduction targets
Environmental &(P34)1) Work to improve unit energy consumption and cut back on CO2 to steadily reduce CO2 emissions
Safety Affairs Committee
2) Move steadily forward with the reduction of waste and air-polluting toxic substances• Levels of both quality and cost are the best in theworld• Implement a quality management system based on ISO 9001 (P36)• Management of quality assurance risks (product liability lawsuits, supply obligation risk, product recall risk,
and the risk of credibility loss due to rumor)• Improving processes (reducing losses and improving consistency)

Quality Assurance Committee,
PL Committee• Procurement is being promoted that includes
considerations to reduce environmental impact
based on CSR procurement policy• F ormulate CSR Procurement Guidelines and implement surveys among suppliers (P38)

CSR Basic Policy Committee• Appropriately operate a system to promote child-rearing (P38)• Implement a program to help those who take child-rearing or family-care leave to reintegrate in their workplaces• ZEON has promoted work-life balance, strives for(P38)
a balance between work and care for children or el• Implement a flextime system and a discretionary working system for management-related work (P38)—
derly, and has received the Kurumin Mark (awarded• Appropriately enforce sexual harassment prevention regulations
to companies that support child-rearing)• Implement MD Committee* activities by female members*A committee, comprised only of female employees, formed to drive cost-cutting through elimination of wastefulness• The workplace has been revitalized by thepromotion of diversity and the fair and equitable
treatment of personnel

Social contribution• Appropriately operate human resource systems (individual report and evaluation systems, etc.)• Hire non-Japanese employees (mid-career applicants and students studying in Japan)• Enhance the reemployment system• Support development of abilities and careers by employees (P38)• Improve awareness among employees regarding social contributions (implement CSR briefings and training)• An organization has been established to promote
volunteer activities for employees including retirees • U pgrade and enhance CSR promotion system (P23, P24)
that allows employees to actively volunteer in1) Implement CSR leader training
various ways
2) Renovate system for CSR information dissemination• Introduce and promote participation in volunteer activities (P23, P24)
• There is understanding and appraisal for ZEON’s
social contributions (ZEON actively participates inand supports environmental protection and social
welfare programs being promoted in each country
and region)• Implement CSR activities (P28, P39)
1) Materialize and implement CSR activities being promoted by the entire ZEON Group2) Materialize and implement CSR activities being promoted by all worksites3) Implement CSR activities unique to individual worksites•C reate CSR Implementation Plan (P28)—

CSR Basic Policy Committee

CSR Basic Policy Committee

CSR Basic Policy Committee

ZEON GROUP CORPORATE REPORT 201328

Research and Development (R&D)
Our basic philosophy for R&D is to contribute to society through the ongoing development, even in niche markets which are in ZEON’s areas ofexpertise. We utilize creative and innovative technologies, and develop products and businesses that do not imitate and cannot be imitated. Whilecontinuing to leverage our strengths, we are conducting research and technology development in anticipation of changes in society andtechnological reforms too.

R&D System
The ZEON Group primarily conducts R&D at the laboratories within the R&D Center
located adjacent to the Kawasaki Plant. The Business R&D Division conducts researchand development in line with business strategy, focusing on developing new products in
ZEON’s key business areas such as synthetic rubber, latex and C5 chemicals. They are also
committed to high added-value areas where market growth and evolution are expected,
such as for energy and electronic-related products and specialty plastics. Within thecorporate R&D divisions, the New Materials Development Laboratory actively searches
for new functional chemicals based upon our foundational technology. The Center
also comprises the Production Technology Laboratory, which develops new production
technologies and provides such support for plants, and the Foundation Technology
Laboratory, which is responsible for analysis of materials.
Within our Takaoka office is located the Precision Optics Laboratory, which investigates
optical film for LCD televisions and next-generation displays, along with EL lighting
materials which can contribute to energy conservation. This is also the location of ourMedical Laboratory, which conducts research into medical equipment such as catheters
used in diagnosis and treatment for blood vessels, the stomach, intestines and gall bladder,etc.
Our Manufactured Product Development Laboratory, which is in charge of research for
ZEON Kasei, investigates vehicle interiors and heat radiation materials.
In the U.S., we engage in the development of synthetic rubber to meet customer needs.
Elastomer Laboratory
C5 Chemicals Laboratory
Specialty Plastics Laboratory

Research & Development Center

Kohara Laboratory
Precision Optics Laboratory
Specialty Materials Laboratory 1
Specialty Materials Laboratory 2
Advanced Performance Material Laboratory 1
Advanced Performance Material Laboratory 2
New Materials Development Laboratory
Production Technology Laboratory
Foundation Technology Laboratory
Medical Laboratory
Manufactured Product Development Laboratory

29

ZEON GROUP CORPORATE REPORT 2013

R&D Center
The center consists of buildings 1 through 10.
We are constantly rejuvenating by frequently
replacing our testing and analysis equipment.
We tackle numerous research topics using
the latest analysis equipment, such as nuclear
magnetic resonance (NMR) spectroscopy, which
can analyze solid samples, and a scanningelectron microscope (SEM).

R&D Strategy
A feature of the ZEON Group’s R&D is that R&D strategies go hand in hand withmanagement strategies.
From the initial stage of choosing an R&D topic, we place heavy emphasis on competitive
advantage in the market, for example, pinpointing concepts that are advantageous for ourbusinesses, developing technologies and obtaining patents to bar entry by our rivals.
Also, taking into account future changes in the social paradigm, we are pouring effort
into research themes that will become a proprietary strength and core competence which
can be accessed in the long term. In particular, environmental and energy are important
areas in research.
To ensure that research strategies coincide with management strategies, the top
management visits the R&D Center once a month to directly speak with researchers on the
progress being made in R&D as a research hearing. Based on the information obtained,
management determines whether R&D is moving in the same direction as management
strategies and assesses the marketability of the research being carried out.
ZEON aims to steadily invest in R&D, with a budget of more than ¥12.0 billion. We arefocusing on long-term research topics and on areas that can be commercialized in the
short term.
Our laboratories are cooperating with our plants to tackle key operational issues, mainly
how to maintain stable operations safely and securely at plants around the world, which
is vital to our globalization. To ensure that production can be performed by workers at any
skill level, we consider it important to visualize the production reforms being carried out atplants in Japan from the perspective of production technology development, leading to thestandardization and stabilization of operations, and the creation of operating manuals.
Furthermore, we plan to develop a wide range of applications and accelerate
development through collaborating with others in research in various formats, such as
cross-industry, industry-academia, and industry-academia-government.

R&D budget(million yen)
14,00012,00010,000
8,000
6,000
4,000
2,000
0

2008

2009

2010

2011

2012
(FY)

Intellectual Property Strategy
In handling intellectual property, we are careful to ensure it aligns with our management
strategies. We select themes that focus on positioning of the product once released to themarket considering our strengths, how to improve competitively, and entry barrier and weput the idea of patent first and actively strive to hold group of patents.
To understand our strengths and improve our competitive edge, also create technology
platforms and focus on development based on those platforms. We are able to build a solidcompetitive advantage by combining or applying separate superior technologies, throughconcept patents, the development of manufacturing processes and applications, and with
our knowhow.

Striving for vigorous R&D
The goal of the R&D Center is to take the “sparks” of researchers, turn them into business seeds, andnurture them into technologies that are trusted globally.
In particular, our younger researchers present their research at the research hearing held once a month.
Funds and people are allocated to promising topics. After the president finishes his rounds, an informal
gathering is held where researchers can speak directly with the president. This boosts their motivation.
Evaluations are not only based on the results for new development but also for making gradual

Yoshiyuki Mitsuhira
Director & SeniorCorporate Officer
Division Manager- Research &Development Center

improvements or for tackling challenging themes.

ZEON GROUP CORPORATE REPORT 201330

Results of the ZEON Group’s Creative ResearchFirst in Japan to mass produce a single-walled carbon nanotube(Industry-government joint research)
Single-walled carbon nanotubes (CNT) are considered an ideal material, mainly as they
permit super conductivity at high temperatures. However, as mass production was
difficult, nanotubes came at a high price, and for a long time there was no progress in thedevelopment of applications. ZEON, in cooperation with the National Institute of Advanced
Industrial Science and Technology, through a NEDO project, jointly developed facilities that
could produce single-walled CNT with a super-growth method. After developing equipmentthat can grow single-walled CNT at a rate 1,000 times faster than in the past, in 2012, thecompany began providing mass-produced samples.
Moreover, ZEON, along with NEC Corporation, Toray Industries, Inc., TEIJIN Ltd.,
Sumitomo Precision Products Co., Ltd., and AIST, formed the Technology Research
Association for Single Wall Carbon Nanotubes (TASC), to develop applications for singlewalled CNT, including new materials and devices.
The realization of CNT in new materials is moving closer, and research is progressing
in materials such as rubber, copper and aluminum blended with single-walled CNT. For
example, when CNTs are blended in rubber, it displays extremely high levels of electrical andthermal conductivity, mechanical durability and barrier properties against electromagnetic
waves.

single-walled carbon nanotube large-area
continuous chemical vapor deposition synthesis
furnace (12m)

Joint development of unique materials for next generation
mainframe computers (Industry-industry joint research)
Mainframe computers serve a critical function in banking, scientific research, and cloudcomputing. In recent years, demand for applications of big data has been growing stronger,
placing greater demand on mainframe processing capacity and reduced energy consumption
are being sought. At ZEON, we think that achieving these goals will require not only
manufacturing process, but also the creation of innovative materials.
Accordingly, to develop new printed circuit board materials for mainframe computers,
ZEON is collaborating with International Business Machines Corporation (hereafter called
IBM). Technicians have been dispatched to IBM’s Thomas J. Watson Research Center. By
obtaining more detailed technological feedback, we expect to shorten our developmenttime. In the future, we will continue promoting development of new materials optimal for
mainframe and server computers that have excellent processability and provide far lesstransmission loss and lower power consumption than traditionally utilized materials.

Offset balloon catheter pursuing creativity in medical devices
ZEON’s entry into the medical industry began in the 1970s when it started manufacturing
catheters. We proceeded to develop products, such as the supplementary artificial heart
and today we specialize in the cardiovascular, nutritional and gastrointestinal fields.
The offset balloon catheter is used during gallstone-removal surgery. In general, thecatheter is in the middle of the balloon but with the offset balloon, there is little change inthe balloon’s shape, allowing for the gallstones to be pushed into the small intestine. The
materials used to manufacture the catheter and balloon were developed by ZEON. They are
therefore very safe and durable.

31

ZEON GROUP CORPORATE REPORT 2013

IBM’s mainframe computer(Provided by IBM’s Thomas J. Watson Research Center)Cyclo-olefin polymers (COP), engineering plastics with diverse
dynamic properties
COP, which is sold under the names ZEONEX® and ZEONOR®, is known as materials owing
to its excellent transparency, refraction, low absorption and low density. Owing to theseproperties, this material is used in lenses for most mobile phone and compact cameras.
As an optical film, the material is used in LC displays, including LC televisions andsmartphones.
Elsewhere, owing to the very low level of impurities and its superior chemical resistance,
it is employed in containers for chemicals used in medicine and for semiconductors. It is also
used as an electrical insulating material, because of features including its low-k dielectricand low dielectric tangent.

Zetpol®, a novel hydrogenated nitrile rubber, made using a newhydrogenation method
Zetpol® is a synthetic rubber that is widely used in the rubber components of a car engine.
It has won praise for qualities such as temperature resistance, oil resistance, and durability.
This quality performance is obtained by main chain double bond of a nitrile-butadiene
rubber (NBR), which is the raw material. Traditional methods produced a nitrile-butadiene
rubber, used as a base, which is later dissolved and hydrogenated at each plant. However,using the new method enables simultaneous hydrogenation processes. The new Zetpol®
boasts improved heat resistance and fuel resistance (resistance to fuels such as bioethanol)
over the former version of Zetpol® and thereby contributes to improved performance of
eco-cars, which are growing in popularity worldwide.
Furthermore, since the new method produces hydrogenated rubber by latex condition,
we are realizing the potential for new applications for Zetpol® which previously were notpossible.
The new method is an innovative manufacturing process that has improved performanceand expanded applications for Zetpol®.

Hydrogenation of NBR【NBR】

̶(CH=CH)̶(CH2-CH)̶
C
H2N

Catalyst【HNBR】̶(CH2-CH2)̶(CH2-CH)̶(CH=CH)̶
C

Conventional method
Polymerization

New hydrogenation plant completed August2012 within the Kawasaki Plant

Carbon-carbon
saturated bondDryingNBR

Dissolution

Hydrogenation

DryingN

Acrylonitrile

Carbon-carbon
unsaturated bond

Product(Zetpol®)

Transport to plants
New hydrogenation manufacturing method
Polymerization/hydrogenation

DryingProduct(New Zetpol®)Zetpol®
latex

ZEON GROUP CORPORATE REPORT 201332

Safety, Quality, and the Environment
The major premise of corporate activities is to give priority to the environment and safety over all other considerations. Throughout the entire
product life cycle, from product development and manufacturing activities, to the time they are used and ultimately the time they are disposed of,both in our business activities and through our products, we are working to ensure safety and a reduced environmental impact and to assure
quality.

Responsible Care* Policy
ZEON has been a member of the Japan Responsible Care Council since its inception in 1995.
In 1998 we formulated our own Responsible Care Policy.
Responsible Care Policy (Established June 1998)
1. Prioritize the environment and safety
Protecting the environment and ensuring safety are preconditions for all business activities and are the most importantpriorities.
We will work continuously to enact full accident prevention countermeasures, and provide education and training for all
employees to prevent safety and environmental accidents.
2. Collect and distribute the latest information on chemical products
We will collect, store and manage the latest information required for the appropriate handling, use and disposal ofchemical products, and distribute this information to employees and users.
3. Minimize the discharge of toxic chemicals and waste
We will work to reduce the discharge of hazardous chemical substances, minimize waste, and develop technology forrecycling and reusing materials.
4. Promote activities for conserving resources and energy
We will aim to dramatically reduce the amount of energy we use and help alleviate global warming by developing
innovative technology and actively promoting resource and energy conservation activities that involve all employees.
5. T ake the environment and safety into account when developing new processes and products andperforming quality assurance
We will perform thorough environmental and safety evaluations from the initial stages of research, develop technology
and products that take the environment and safety into account, and work to maintain and improve the quality oftechnology and products.
6. Live together with society
We will strictly observe regulations related to the environment and safety, whether the regulations come from the local
community, the national government, overseas, or organizations to which we belong.
While cooperating in these activities, we will work to enhance our communication with the local community and society
in order to convey a better understanding of ZEON’s activities and further strengthen the trust that society has in ourcompany.
7. Perform continuous improvements
We will continuously improve our environment safety management and technology by operating a Responsible Care Audit,
the Safety Management System, an Environment Management System based on ISO14001, and an Occupational Healthand Safety Management System.

*Responsible Care
A voluntary initiative by businesses that
manufacture or handle chemical substances
to achieve continuous improvement in health,safety, and environmental (HSE) performanceacross the entire life cycles of such substancesfrom development and manufacture, throughdistribution and use, and ending in final
consumption or disposal and based on theprinciples of independent decision-making andpersonal responsibility. These businesses publicly
commit to Responsible Care in their business
policies, execute HSE measures, and strive toimprove their performance.

Environment
Environmental Philosophy
Established in 2001, our Environmental Philosophy guides our efforts to deliver productswith consistent quality through safe and consistent production while shrinking ourenvironmental footprint.
Environmental Philosophy (Established August 2001)
1. Environmental protection is a mission of a socially responsible organization
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

Environmental and Safety Management
The head of the Environmental and Safety Affairs Department draws up plans for the
Annual Environment and Safety Policy based on the President’s Annual Policy, developedby the president, and the Safety Management Improvement Master Plan. The Annual
Environment and Safety Policy is finalized by the president following a review by the CSR
Conference. Based on this, the worksite managers develop the Annual Worksite Manager’s
Policy, Annual Worksite Safety Management Improvement Master Plan, and the Annual
Worksite Environment and Safety Activities Plan.

33

ZEON GROUP CORPORATE REPORT 2013For details

http://www.zeon.co.jp/csr_e/environment/
index.html
Home > CSR > Environment

AuditingSince fiscal 2010, worksites have been implementing Responsible Care audits, which are
divided into general and specialized audits.
During the general audit, an audit team, led by the head of the Environmental and Safety
Affairs Department, visits each worksite once a year. Emphasis is placed on dialogue withworksite management.
Specialized audits, on the other hand, are conducted by a team led by the head of theEnvironmental and Safety Affairs Department, which audits the implementation status
of Responsible Care activities from an expert’s point of view. When an audit identifies
a noncompliance, improvement progress is tracked using an improvement plan andimplementation report.

Annual CO2 Emissions(1,000 tons)
700
Target line (80% of fiscal 1990)
600

Reduction of Greenhouse Gas Emissions andEnergy Conservation
CO2 emissions in fiscal 2012 were approximately 490,000 tons, or 77% of emissions in fiscal
1990. The figures for emissions met target values for fiscal 2020; Rational Use of Energy
to 80% of emissions in fiscal 1990. We plan to improve unit CO2 emissions by an averageof 1% per year going forward, and will also explore the feasibility of initiatives such as
switching boiler fuels at plants to further reduce CO2 emissions.
In fiscal 2012, we consumed an amount of energy equivalent to burning approximately
189,000 kiloliters of crude oil, or 68% of the amount of energy consumed in fiscal 1990.
We plan to improve unit energy consumption by an average of 1% per year going forward.

500
400
300
200
100
0

1990

2008

2009

2010

2011

Emissions and Transfer ofApplicable Substances in PRTR
Law (FY2012)
Amount released
into atmosphere:
35.6 tons

Total released:
36.1 tons

Chemical Substances Management

Amount released
into water:
0.46 tons■ PRTR initiatives

The entire ZEON Corporation is working to reduce the release and transfer of substances
subject to Japan’s PRTR Law. Total emissions and transfer in fiscal 2012 were around275 tons.

Amount released
and transferred:
275 tons

Amount released
into soil: 0

Total transferred:
239 tons

Amounttransferred:
239 tons
Amount tolandfill: 0■ Reduction of Hazardous Chemical Substance Atmospheric Emissions

Butadiene and acrylonitrile are among the 23 types of substances requiring priority action
stipulated by Japan’s Air Pollution Control Law and thus the focus of our active efforts to
reduce atmospheric emissions of hazardous chemical substances.

2012
(FY)

Amount of Butadiene
Atmospheric Emissions(tons)
20

10

0

2008

2009

2010

2011

2012
(FY)

Amount of Acrylonitrile
Atmospheric Emissions(tons)
20

10

0

2008

2009

2010

2011

2012
(FY)

ZEON GROUP CORPORATE REPORT 201334

Safety
Safety Philosophy
A safe and consistent work environment is the foundation of all production activities. ZEON
Corporation formulated its safety philosophy in 1997 to direct its safety efforts.
Safety Philosophy (Established March 1997)
1. Safety is the foundation of all business activities and the greatest priority
2. Our basic belief regarding safety is that we can prevent all accidents
3. Safety will be achieved by performing the 5Ss* and when everyone takes responsibility for their own actions*5S
Seiri (neatness), Seiton (orderliness), Seisou (cleanliness), Seiketsu (hygiene), and Shitsuke (discipline)

Occupational Safety
ZEON Corporation places an emphasis on communication between worksite managers andworkers in its effort to enhance worksite capacities and build safe and stable production
systems. We put considerable effort into 5S safety audits1, risk assessments2, andidentifying near-miss incidents3, as well as the provision of hands-on training.

Lost-Time Accident Rates*(ZEON Corporation)(rate)
1.2

Manufacturing industry

1.0
0.8

Chemical industry

0.6*1 5S Safety Audits
Inspections that, in the process of practicing the 5Ss, take a close look at the parts of business
operations that carry greater risk in terms of safety, and are conducted with the goal of quantifying
worksite performance and resolving areas that pose a threat.
*2 Risk assessment (Kiken Yochi)
Actions taken by workers to analyze and understand unsafe conditions to stop behavior that places
themselves in danger.
*3 Near-miss incidents
Unplanned events that nearly result in an accident, injury, or other loss.

Systematic Safety Training

0.4

ZEON Corporation

0.2
0.0
02

03

04

05

06

07

08

09

10

11

12
(FY)

*An indicator of the frequency of workplace
accidents, calculated using the following
formula: Frequency of lost-time accidents =Number of workers who experienced a losttime accident / Total actual working time ×1,000,000 hours

At ZEON Corporation, the head office organizes safety training programs for allorganizations in the company, while each worksite provides training tailored to its own
operations. We have also established the Monozukuri Training Center, which is a companywide operator training facility, and the Safety Workshop, which offers training in various
safety rules.

Safety and Accident Prevention
We are implementing various measures in which all employees takes responsibility for
their own actions to ensure zero-accidents and zero-incidents. In addition to promoting
open dialogue with worksites through regular plant visits by management, the Annual
Worksite Safety Management Improvement Master Plan is renewed annually, and we are
fortifying measures across the group under the leadership of the president. Furthermore,
to improve the safety of management of high pressure gas at our plants, managers at eachof our worksites have acquired Safety Inspection Certification1. In addition, managers at
our Kawasaki, Mizushima, and Tokuyama plants have acquired Accredited Completion
Inspection Certification2.
*1 Safety Inspection Certification
Certification granted by Japan’s Minister of Economy, Trade and Industry in accordance with the High
Pressure Gas Safety Act to allow qualified individuals to perform safety inspections to determine
whether certain facilities comply with technical standards, either while the equipment is still running or
while it is stopped.
*2 Completion Inspection Certification
Certification granted by Japan’s Minister of Economy, Trade and Industry in accordance with the High
Pressure Gas Safety Act to allow qualified individuals to perform completion inspections to determine
whether manufacturing facilities or class 1 storage facilities that have undergone certain modifications
comply with technical standards.

35

ZEON GROUP CORPORATE REPORT 2013

Education on examples of accidents(Kawasaki Plant)

The authorized acquisition condition
Plant

Safety Inspection

Completion Inspection

Takaoka Plant

Obtained in 2000
(renewed in 2010)―

Kawasaki Plant

Obtained in 1998
(renewed in 2013)

Obtained in 1998
(renewed in 2013)

Tokuyama Plant

Obtained in 2007
(renewed in 2012)

Obtained in 2012

Mizushima Plant

Obtained in 2006
(renewed in 2011)

Obtained in 2006
(renewed in 2011)

For details

http://www.zeon.co.jp/csr_e/
safety/index.html
Home > CSR > SafetyQuality Assurance
To consistently manufacture products that reflect the needs and wants of customers and toensure product quality, ZEON is advancing integrated quality assurance activities companywide, across manufacturing, sales and engineering functions, by strengthening cooperation
among plants, business divisions and research units (R&D Center). For example, whena complaint is received or a problem occurs within a line, business divisions, research
units, and the Quality Assurance Department get actively involved, joining manufacturing
departments (plants) in identifying the root cause, taking action, and confirming
effectiveness, as well as standardizing processes to prevent a recurrence.
Through these efforts, ZEON is working to improve the consistency of quality andprocesses so that we are able to deliver to the customer products they will be satisfied with.

Quality Assurance System
Customers
Requests andrequirements
Plants(Manufacturing)

Site education;
Strengthening
integration ofquality into designand development
R&D Center(R&D)

Quality Assurance Mechanisms

Products andservices

Fact-finding;Knowledge sharing
between plants;
Reform/change planning
Quality
Assurance Dept.
Problem identifying;
Improvements

Divisions(Sales andLogistics)

To ensure a consistent supply of high-quality products to our customers, we have put inplace various quality assurance mechanisms based on the ISO 9001 international standard
for quality management systems.
Mechanism

Description

Policy implementation

Identifying what has to be done within each organizational layer based on the President's policy,
and then carrying it out.

Management planningand reviews

Ensuring continuous improvement in quality management by organizations with heads of units(plant managers and business division heads) evaluating the progress of tasks for eachorganizational layer and indicating strategies for the next round of improvements.

Product design anddevelopment reviews

Reviewing whether each stage of product design and development is being effectively performed,
and then making improvements as required.

Product safety evaluations

Performing a multifaceted product safety review in which product safety is evaluated at all stages,
from initial research through to product sale and ultimate disposal.

Change management

Preventing problems before they occur by establishing rules for making process changes
associated with product improvements and so on.

Handling abnormalities

Eliminating quality problems by pinpointing the causes of process abnormalities at production
facilities, removing the causes, and ensuring that the problems never recur.

Handling complaints

Responding quickly and with sincerity to customer complaints and raising the standard of quality
control to prevent recurrence.

Internal quality auditing

Internal auditing to check that the company's quality management systems are working efficiently
and effectively.

Aiming to Create a Framework for Achieving World-Leading
Quality and Cost CompetitivenessOur ideal of quality assurance is a structure which produces the top quality at the best pricein the world. Consequently, we have addressed the management of quality assurance risks
to date (PL suits, responsibility of supply, recalls, credit loss due to rumors, etc.) Our efforts
through to fiscal 2012 have enabled us to create the base for this. We are now, therefore,
focusing our efforts to attain the world-top level in terms of quality and price. In concreteterms, this refers to reducing loss, and variations in quality. These are efforts to lift processcapability. We will achieve this through creative, inherent technology combined withsteadfast management techniques.

For details

http://www.zeon.co.jp/csr_e/
quality/index.html
Home > CSR > Quality Assurance(Relationship with Customers)

Hiroshi Takegami
Director & Senior Corporate Officer
Director of CSR Headquarters

ZEON GROUP CORPORATE REPORT 201336

Human Rights, Labor Practices and Fair Procurement
With respect for human rights and a desire to maintain healthy work environments, we design and implement our employee training andpersonnel programs so that all our employees, regardless of their background or values, can take pride in their work. Regarding procurement
activities, we are advancing development of our CSR procurement system to build healthy relationships with our business partners.

Respecting Human Rights
ZEON requires respect for human rights and prohibits discrimination in its CSR Code of
Conduct. We strive to be a business that is understanding and accepting of diverse values
and where no person is discriminated based on gender, age, nationality, or other attributes.

ZEON CSR Code of Conduct (Excerpt)(Respect for human rights and prohibition of discrimination)
We will make efforts to maintain a sound working environment at all times, respect the human rights of each individual,
and not engage in any act that may lead to discrimination.
1. W
 e will not commit unlawful discrimination based on birth, nationality, race, ancestry, creed, religion, sex, age,disability, preference, academic history or any other characteristic.
2. W
 e will not force business operations through violence, jeering, abusing, smearing and threatening behavior, nor will
we infringe upon human rights through bullying and other such acts.
3. We will not engage in child labor and forced labor nor will we purchase any product manufactured through such labor.

Basic Labor Policy
To promote respect for human rights and prohibit discrimination, our goal is to encourage
employees to continually evolve by pursuing high goals based on independent thinking,develop human resources systems that challenge them to achieve their potential, andmaintain comfortable work environments that value dialogue toward establishing ZEON as
an enterprise where every employee* can work with pride.
*At ZEON, we use “employee” to describe all workers, including both permanent and part-time workers

Basic Policy

ZEON–“A company of which each and every one of its employees can be proud”

Encourage employees tocontinually evolve by
pursuing high goals basedon independent thinking

Human resources systemallows a sense ofchallenge andachievement

A comfortable working
environment that values
dialogue

A wide variety of human resources
Respecting human rights, Prohibition of discrimination

For details

http://www.zeon.co.jp/csr_e/
employee/index.html
Home > CSR > Relationship with Employees
For details

http://www.zeon.co.jp/csr_e/
suppliers/index.html
Home > CSR > Relationship with Suppliers

37

ZEON GROUP CORPORATE REPORT 2013

Human Resource Development Policy
Employees at ZEON are encouraged to visualize the employees they want to become, while
ZEON tailors its education and training practices to help each employee bridge the gap
between their current and visualized selves and to take daily steps toward that vision.
By fairly assessing the results of those actions and changing how we treat each employee
accordingly, we encourage employees to set ever-higher goals. All of these concrete,
iterative actions to effect change and improvement are harnessed toward creating a morevital workforce across the company.

Resource Development Flow
Change employment
conditions
The employee
I want to be
Evaluation

Education andtraining

The employee
I want to be(higher goals)
Education andtraining

Tasks andperformance

Creating Workplace Environments that Protect
Human Rights and Health
Building on the important prerequisite of regulatory compliance, ZEON seeks flexible
work practices guided by such principles as motivation, reliability, achievement, stability,
safety, and security, with special importance given to our corporate social responsibility.
We work endlessly to build comfortable working environments from five perspectives:supporting flexible work styles for a work-life balance, enhancing workplace environments,
encouraging dialogue, improving health, and supporting self-reliance.

Motivation, reliability, achievement, stability
and safety, security

Creating a comfortable working environment

Flexible work practices, Working environment,
dialogue, health, self-reliance

Programs and efforts to realize comfortable working
environments
We are always striving to build more comfortable working environments. These efforts
include reducing overtime work, implementing flexible working practices, and instituting
systems to support childbirth, childcare, and family care.

Labor agreements and communication between management
and employees
Joint Declaration by Labor and Management Aimed at the Growth of the Company
1. We will make mutual understanding and trust the cornerstone of all management-labor relations
2. W
 e will perform our respective roles to strengthen company infrastructure and build a company of which we can be
proud
3.We will mutually strive to improve and promote our corporate culture as beneficial partners

After the informal meeting

ZEON Corporation and its labor union have achieved a labor agreement aimed atmaintaining peaceful relations between the two parties and cooperating to grow thecompany in a healthy manner and to maintain and improve working conditions for union
members. In addition, numerous opportunities are provided to exchange opinions, including
quarterly roundtable meetings with management.

Sound Partnerships with Suppliers
In order to provide safe products to our customers, we at ZEON conduct procurement of
raw materials based on our CSR Policy and CSR Code of Conduct. In our procurement, we
forbid substances whose handling is prohibited and monitor for the presence of substances
governed by laws and the RoHS Directive. We also diligently disclose information on thesubstances contained in our products.
Additionally, in fiscal 2012 we created a system for CSR procurement, and formulated the
CSR Procurement Guidelines and the Requests for Suppliers, which integrate a CSR-oriented
perspective into existing QCD*. Starting in fiscal 2013, we will implement regular surveys
based on these documents, and take appropriate responses according to the survey results.
* The system for production management that controls and improves quality, cost, and delivery.

CSR Procurement Guidelines
1. CSR procurement
We will promote procurement activities that are
based on our CSR Policy.
2. Procurement of optimal raw materials,
products, and services
We will work to procure optimal raw materials,
products, and services that meet our standards
for quality, cost, delivery time, supply stability,
and technological development capabilities inorder to provide better products.
3. Consideration of the global environment
We will work to procure raw materials andproducts that have less impact on the global
environment.
4. O pen approach to purchasing andpartnerships
We will use a global perspective to searchfor suppliers from across the world, build
partnerships through dialogue, and work tocreate fair and equitable business opportunities.

ZEON GROUP CORPORATE REPORT 2013

38

Relationship with Society
Establishing stable plant operations while concurrently forging trust is highly crucial to ensuring that the local community lives in peace. Based on
our motto of stability, safety, and security, we are building plants that win the trust of local residents.

Exchanges with the Local Community
Sponsoring festivals
We sponsor events at each of our offices, such as summer festivals, and participate infestivals sponsored by the local community to promote interaction with local residents andthe families of our employees.
For example, the Tokuyama Plant’s ZEON Waraku Odori Dance Festival, which was first
held in 1974, has become a regular summer event in the Tokuyama region. Every year, morethan 2,000 people participate in the festivities, making for a very lively event. Employees
extend their hospitality, offering people yakitori (skewered chicken) and oden (hodgepodgestew), and mingle with local residents.

ZEON Waraku Odori Dance Festival(Tokuyama Plant)

Volunteer cleanups in local communities
Employees volunteer to participate in cleanup projects organized by the local community or
jointly implemented with nearby companies and also to tidy up around our own offices.
One example is the volunteer cleanups started by the Mizushima Plant in 2006. At thetime, the plant was looking for some activity that would be helpful to and also appreciatedby local residents. Since 2012, the plant has taken its program a step further and worked
with local residents to clean up the river.

Employees volunteer for cleanup withlocal residents

Offering tours of our plants and research laboratories
Our offices actively accept high schools, vocational schools, universities, local governments,
business partners, and other interested community members to come and tour our plants
and research laboratories. The objective is to enhance the openness of our offices. Recently,
we have had visitors to our offices from overseas, mainly China, Taiwan, and Thailand.
Visitors from South Korea touring
the Kawasaki Plant

ZEON Global

ZEON Chemicals Europe Ltd. (ZCEL)ZCEL is a member of the local joint safety council. ZCEL quickly analyzes and handles environmental
issues brought to them by local residents. In addition to alleviating concerns local residents
have, ZCEL maintains an open dialogue with them, so that more people gain an understandingof the activities being carried out at the plant. Also, ZCEL is a sponsor of various local events.
The Whitmore Bay Surf Life Saving Club, which trains local youth in rescue and resuscitation, hasbeen helped with the purchase of new equipment. ZCEL also actively supports local youth footballteams and the Welsh Children’s Cancer Charity. In addition, ZCEL provides work experience andplacements to pupils from local schools and colleges.

Christmas party including children of the employees

Furukawa Scholarship
The Furukawa Memorial Foundation is an incorporated foundation with a 48-year history ofgranting scholarships to Japanese and foreign students experiencing financial hardships toencourage them to continue their education. Our company has maintained involvement toassist the foundation in their activities. To date, the foundation has awarded scholarships toa total of 2,838 people.

39

ZEON GROUP CORPORATE REPORT 2013

Our website contains numerous site reports on theactivities being carried out by our offices.

http://www.zeon.co.jp/csr_e/site/
index.html
Home > CSR Activities > Site Reports

Relationship with Shareholders and Investors
Through active communication and disclosing the right information at the right time through various media, we strive to help our shareholders
and other investors fully understand our business.

Communication with Shareholders
General meeting of shareholders
On June 28, 2012, we held our 87th annual general meeting of shareholders in a conference
room of the head office. To help investors have a clearer understanding of our business,on the day of the meeting we also set up a booth with panel displays explaining clients’commercial products that use our manufactured goods.
To allow investors who cannot attend the meeting to exercise their voting rights based ona full review of the proposals, we mail out notices approximately three weeks prior to themeeting. We also post resolutions from the general meeting of shareholders on our website,
and also upload audio files of the presentation at our quarterly financial results briefing andvideos of presentations by top management on the current status of management at ZEON
held twice a year.
IR section of our website

Informing investors
We send a pamphlet featuring articles on the current status of ZEON’s businesses, relevant
topics, and other information to shareholders twice a year. In the 88th Midyear Reportissued in December 2012, we included a survey for individual shareholders, and received
nearly 1,000 responses. We will use the opinions and feedback received to improve theaccessibility of the Midyear Report and to make it better meet these shareholders’ needs.

Communication with investors
We engage in active communication with institutional investors and analysts from both
Japan and abroad.
We held analyst briefing sessions to announce our fiscal 2012 quarterly results in Augustand November 2012 and February and May 2013. In addition to summarizing financial
results, sessions for the 2nd quarter and the end of the fiscal year included a briefing fromtop management on the current status of management and our Mid-Term Management
Plan, SZ-20.
We also strive to provide individual investors with up-to-date information on ourbusiness. For example, we launched a website dedicated to that purpose, and uploaded
videos of briefing sessions held for individual investors.
We also try to seize various other opportunities to provide information to investors.
In fiscal 2012, we took part in two individual investor events entitled “ZEON creates the
future today through the power of chemistry.” At these events we clearly presented ZEON
products used in day-to-day living along with our future business plans.
For foreign investors, we participated in a conference hosted by Daiwa Securities Co.,
Ltd. as we did last year. Going forward we plan to take advantage of more opportunities tocommunicate with foreign investors.

88th Midyear Report
Showcases ZEON Corporation products that are
the world’s top brands

Website introducing our business forindividual shareholders

IR Section of ZEON’s Website

http://www.zeon.co.jp/ir_e/index.
html
Home > Investor Relations
ZEON GROUP CORPORATE REPORT 201340

Inquiry: 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.