SWCC Group Report
Integrated Report

SWCC SHOWA HOLDINGS CO., LTD.

All for the Trust

Ma na ge me n t P h ilo s o p h y“The SWCC Group strives to be trusted”● The SWCC Group will strive to earn the “trust” of our customers through high technology and high quality products and services.
● The SWCC Group will, through healthy business activities, create corporate values that will earn the “trust”
of the employees, customers, shareholders and the local community.

● The SWCC Group will, by complying with all applicable rules and regulations and through the prioritizationof safety and the regional environment, conduct “trustworthy” activities.

Mis s io n S ta te me n t“Creating for the Future”
The SWCC Group will create new value for a better future.

● We will create products and services that will earn the trust of our customers.
● We will create earth environmentally friendly products.
● We will create corporate values that will earn trust through healthy business activities.
SW CC Grou p Ma n a g e me n t P o lic y
The SWCC Group has established and worked on the following management policies to achieve our management philosophy,“The SWCC Group strives to be trusted.”
1. The SWCC Group shall give top priority to its customers and develop and provide them with products, technology,
and services that are beneficial for society, environmentally friendly, good quality, and safety conscious, andcontribute to the development of society.
2. The SWCC Group shall comply with all applicable domestic and foreign laws and regulations and act in accordancewith social norms based on ethics.
3. The SWCC Group shall create a bright and pleasant working environment and enhance the autonomy and willingnessof employees based on respect for human dignity.
4. The SWCC Group shall conduct corporate activities based on fair, transparent, and free competition, and secure
appropriate profits.
5. The SWCC Group shall maintain sound and normal relations with politics, government, and the local community.
6. The SWCC Group shall disclose corporate information in a timely and appropriate manner to conduct public relations
activities for its shareholders as well as for the public at large, while strictly managing the acquisition, use, anddisclosure of information.
7. The SWCC Group shall recognize that working on environmental issues is an essential requirement for corporate
activities, and strive to create an affluent and healthy environment.
8. The SWCC Group shall conduct corporate activities in a sensible manner and respond to anti-social forces andorganizations with a resolute attitude.
9. The SWCC Group shall, as a member of the international community, strive to conduct corporate activities andcontribute to society, while respecting local cultures and practices.

01

SWCC Group Report

CONTENTS
History and Future of the SWCC Group
03 History of the SWCC Group
05 Four Business Fields
A Strategy to Hone Trust and Technology to
Achieve Growth
07 Greetings
13 Value Creation Process
15 Financial/Non-financial Highlights
17 SWCC Group’s Growth Strategy
19
21

Energy and Infrastructure Business Segment
Communication and Industrial Devices
Business Segment
Electrical Equipment and Components
Business Segment
New Business Segment
Special Feature: New Brand SICOPLUS™

23
26
Efforts to Build a Business Foundation
27 SWCC Group’s CSR Efforts
29 Efforts to Conserve the Environment
30
31
33
35
37
38
43

Environmental Management
Voluntary Environmental Action Plan
7th Voluntary Environmental Action Plan
(FY2021-2025), Topics
Relations with Society
Supplier Relations (Quality Management)
Supplier Relations (Supply Chain)
Shareholder and Investor Relations
Employee Relations (Human Rights,
Employment)
Employee Relations (Safety and Health
Activities)
Community Relations
Corporate GovernanceRisk Management
Outside Director’s Message
Management Team (Introduction of Officers)

44
45
49
52
53
Financial/Company Profile Section
55 Results of Operations and Financial Analysis
59 Company Profile
60 Share and Investor Information

Editorial policy
This is a report to stakeholders on the medium- and long-term value that
the SWCC Group provides through its business activities toward therealization of an enriched human society.
● In business activities, representative products and new technology
development are introduced for each of the four segments (Energy andInfrastructure Business, Communication and Industrial Devices Business,
Electrical Equipment and Components Business, New Business) of the
SWCC Group. In each segment, environmentally friendly products are also
introduced.
● CSR efforts are reported from the angles of E (Environment), S (Social), and
G (Governance), based on the framework of seven core subjects thatcompanies should address as social responsibility according to JIS Z 26000.
In addition, the relationship between these initiatives and SDGs (Sustainable
Development Goals) is explained.

■ Period of the Integrated Report

April 1, 2020-March 31, 2021 (FY2020)
However, past and recent activities are included in some cases.

■ Scope of the Integrated Report

SWCC Showa Holdings Co., Ltd., its consolidated subsidiaries (13 domestic*companies, 7 overseas companies), and equity method affiliates (4 overseas
companies)*Including 2 companies eliminated in FY2021 due to liquidation or merger■ Referenced guidelines● IIRC (International Integrated Reporting Council), “International Integrated
Reporting Framework”● GRI (Global Reporting Initiative), sustainability reporting standards● Japanese Standards Association, “JIS Z 26000: 2012 Guidance on social
responsibility”■ Month/Year published

September 2021 (next scheduled publishing date: September 2022)■ Other

The company brochure, annual securities report, and other company
information are available on the SWCC Group’s website.

The SWCC Group is engaged in activities to support
the Sustainable Development Goals (SDGs).

SWCC SHOWA HOLDINGS CO., LTD.

02

History and Future of the SWCC Group

History of the SWCC Group

Diverse technologies and products cultivated since our establishment
The SWCC Group will continue to face changes and challenges
Under the management philosophy of “The SWCC Group strives to be trusted,” we have been providing theworld with products centered on electric wires and cables since our establishment in 1936.
Through the design and development of materials mainly including rubber, plastic and metals, and parts that
control electricity, vibration and heat, cultivated throughout this development, we have produced many different
products in various fields, including infrastructure, communications, and seismic isolation, which are used invarious places throughout society.
Leveraging this technology, the SWCC Group will make great progress into a new era, with the goal ofdeveloping as a corporate group that contributes to a sustainable society through our business activities.

1938
Production and sale of power and communication
cables commences

1969
Production of copper wire rods using a dip forming
system commences

1936

SHOWA ELECTRIC WIRE AND
CABLE CO., LTD. is established(Spin off from Tokyo ElectricCompany: the current TOSHIBACORPORATION)

1937

Operations commence in Kawasaki City, Kanagawa Prefecture(production and sale of bare copper wire commences)
English trademark is registered (establishment of SWCC brand)

Elephant terminal box for 400 kV class OF cables isdeveloped in collaboration with Tokyo Shibaura ElectricCo., Ltd. (currently Toshiba Corporation)

1961

Operations at the Sagamihara
Plant commence (production ofcommunication cables
commences)

1967

1947

1968

Production and sale of vibration-isolation rubber mount commences

1949

Listed on the Tokyo Stock Exchange
Success is achieved in the industrialization of SHOMEX formal
enameled wire

1951

Technical Assistance Agreement is concluded with General
Electric Company (GE), USA (polyvinyl formal enameled wires andpower cables)

03

1959

1938

Production and sale of power and communication cables commences

SWCC Group Report

1979
Production and sale of heat rollers for electronic
copier commences

Production and sale of CATV coaxial cables commences

Operations at the Mie Plant
commence (production ofmagnet wire commences)

1969

Production of copper wire rods using a dip forming
system commences

1971

Completion of 75m high VCV tower at the Kawasaki Plant

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

History of the SWCC Group

1986
First delivery of seismic isolation devices

2006
Compact electric power equipment products areintegrated under the SICONEX® brand

1976

Superconducting wires are delivered for Japanese National
Railways’ magnetic levitation vehicles

1979

Production and sale of heat rollers for electronic copier
commences

1986

2017
Sale of high-performance oxygen-free copper wirecommences under the MiDIP® brand

2005

SWCC SHOWA (VIETNAM) CO., LTD. (SVC) is establishedin Hanoi, Vietnam

2006

Corporate separation
Shift to a holding company structureFirst delivery of seismic isolation devices

The company is renamed from SHOWAELECTRIC WIRE AND CABLE CO., LTD.
to SWCC SHOWA HOLDINGS CO., LTD.

1987

Compact electric power equipment products areintegrated under the SICONEX® brandInstallation of AC 2000 kV airtight transformer for testing(registered in 2010 as Essential Historical Materials for
Science and Technology)

1990

Completion of the Ebina Factory (production of heat rollers)

1995

Operations at the Aichi Factory commence (production of
power cables commences)

1996

2009

Joint venture in Shandong Province, China
SHOWA-TBEA (SHANDONG) CABLE ACCESSORIES CO.,LTD. is established in Shandong, China

2011

A business and capital
partnership agreement isconcluded with FUTONGGROUP CO., LTD. China

JIAXING SHOWA INTERCONNECT PRODUCTS CO., LTD. isestablished as a joint venture in Zhejiang Province, China

FUTONG-SHOWA ELECTRIC WIRE & CABLE (TIANJIN)
CO., LTD. is established as a joint venture in Tianjin, China

1997

FUTONG SHOWA WIRE & CABLE (HANGZHOU) CO., LTD.
is established as a joint venture in Zhejiang Province,
China

ISO 9001 certification granted (company-wide)

1998

The entire production division of the Kawasaki Office istransferred

1999

ISO 14001 certification granted (at all production sites)

2000

FUQING SHOWA CHENGHONG ELECTRONICS CO., LTD.
(currently FUQING SHOWA PRECISION ELECTRONICS CO.,LTD.) is established in Fujian Province, China

2001

2017

Changed head office location
to Kawasaki-ku, Kawasaki City

Sale of high-performanceoxygen-free copper wirecommences under the MiDIP®
brand

2019

The SWCC Group changes its status from “a company
with a board of statutory auditors” to “a company with anaudit and supervisory committee”

UNIMAC, LTD. is established as a joint venture

Business segments are reviewed and group governanceis strengthened

SWCC SHOWA (SHANGHAI) CO., LTD. is established in
Shanghai, China

Showa Furukawa Cable Co., Ltd. is established as a joint
venture

SWCC SHOWA HOLDINGS CO., LTD.

04

History and Future of the SWCC Group

Four Business Fields

Supporting domestic andoverseas infrastructure

The SWCC Group will strengthen governance and promote business restructuring,
growth and new business expansion, and portfolio review.

Energy and Infrastructure Business
Extra-high voltage power cables, electric power equipment accessories (SICONEX®), overhead transmission
lines, industrial wires and cables, fire-resistant cables, electrical equipment materials, seismic isolation/
vibration control/vibration isolation devices

Core business of the SWCC Group.
We will pass on the DNA of our core technologies and promote thecreation of a richer social base.
This is the core business of the SWCC Group, and since the establishment of thecompany, it has been providing the world with products centered on electric wires andcables and supporting global infrastructure. We will work to expand our existing businessand create value for the next generation. This is the mission of the Energy andInfrastructure Business. We will continue to realize innovations that satisfy various
business challenges with our unique technologies and competitive products, contributing
to society through “making.”

Communication and Industrial Devices Business
Optical fiber cables, metal communication cables, LAN cables, wire harnesses, copier rollers and belts

We lead this era of high-speed, high-capacity
communication with a wide array of device solutions.
In the rapidly changing world of information and communication, we will work to create
new value in communication. The mission of the Communication and Industrial Devices
Business is to fulfill needs in the information and communication field, which is advancing
toward higher speeds and greater capacity. This is an era in which people and people,
people and things, and things and things are connected everywhere. We will use our
extensive technologies and experience to give higher quality and high added value to ourwide array of device solutions to support the advancement of society.

Electrical Equipment and Components Business
High-performance oxygen-free copper (MiDIPⓇ), copper alloys, magnet wires, Litz wires

We will use the strong superiority of our unique
technologies to speed up global advancement.
We will work to establish a dominant position in growth markets centered around material
technology with high quality performance. This is the mission of the Electrical Equipment
and Components Business. We will become deeply involved in the expanding automobile
and medical fields and broaden our outlook to include overseas markets in addition todomestic markets to strengthen our product competitiveness. We will fulfill the
expectations and needs of our customers while innovating quality, cost, and speed
through collaboration among group companies.

05

SWCC Group ReportHistory and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Four Business Fields

New BusinessWireless power transfer coils, automotive aluminum cables, robot cables, superconductivity products,
medical materials

We will strongly support social innovation,
targeting growth markets.
Based on our understanding of social change, we will work to promote the development of
new business models in existing businesses and the development of novel products andtechnologies to create new value. We will pursue initiatives to expand products for nextgeneration bullet trains and commercialize superconductivity products, and, in
collaboration with other business segments, develop high added-value products andsolutions not bound by existing frameworks and customs, and create new possibilities for
the SWCC Group.

■ Domestic operating companies■ Overseas operating companies

Scope of businesses in the SWCC Group
Energy andCommunication andElectrical Equipment

Infrastructure

Industrial Devices

and Components

Business

Business

Business

New Business

Other

SWCC SHOWA CABLE SYSTEMSFUJI ELECTRIC CABLE

SWCC SHOWA UNIMAC

AXIO

SDS
AOMORI SHOWAELECTRIC CABLE*SFCCSHOUKOU EQUIPMENT
INDUSTRY

SSD

SVC

STEC (SHOWA TECHNICALCORPORATION)

JSIP

DSIP

SHOWA SCIENCE

VSIP

HKG

STCA

HHE

LOGIS-WORKS

FSH

FST

Abbreviations of overseas operating companies
SSD : FUQING SHOWA PRECISION ELECTRONICS CO., LTD.
SVC : SWCC SHOWA (VIETNAM) CO., LTD.
JSIP : JIAXING SHOWA INTERCONNECT PRODUCTS CO., LTD.
DSIP : DONGGUAN SHOWA INTERCONNECT PRODUCTS CO., LTD.
VSIP : SWCC SHOWA VIETNAM INTERCONNECT PRODUCTS CO., LTD.
HKG : SWCC SHOWA (H.K.) CO., LTD.
FSH : FUTONG SHOWA WIRE & CABLE (HANGZHOU) CO., LTD.
FST : FUTONG-SHOWA ELECTRIC WIRE & CABLE (TIANJIN) CO., LTD.
STCA : SHOWA-TBEA (SHANDONG) CABLE ACCESSORIES CO., LTD.
HHE : HUA HO ENGINEERING CO., LTD.
SHA : SWCC SHOWA (SHANGHAI) CO., LTD.

SHA

*To be dissolved in December 2021

SWCC SHOWA HOLDINGS CO., LTD.

06

A Strategy to Hone Trust and Technology to Achieve Growth

Greetings

Takayo Hasegawa
President and Group CEO

SWCC Showa Holdings Co., Ltd.

07

SWCC Group ReportHistory and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Greetings

Shifting towards a growth trajectory
to create further social value.
While the market is being overshadowed by the impact of COVID-19, the SWCC Group
continues to steadily move forward, demonstrating the benefits of structural reforms.
An update on the progress of the mid-term management plan and the direction targetedin the new growth strategy are explained in this interview.
<<Maintenance of steadiness and stability, and challenge toward evolution>>Reaffirming connections with society during the COVID-19 pandemic
The SWCC Group recognizes the need to maintain ourunyielding convictions and sense of values as a company
that considers everyone who uses electric wires and cables
and the entire society to be customers, and continue to exist
steadily and stably.
At the same time, while we should maintain our businessof supporting the social infrastructure as a pillar of thecompany, we also need to make the leap and take on thechallenge of evolving towards a better future instead ofstaying in the same place. The idea is embodied in our
mission statement, “Creating for the Future.” By creating newvalue through products that contribute to the safer, moresecure and comfortable lives of our customers and theconservation of the global environment, we intend toenhance our corporate value and share a prosperous future.
This statement clarifies our stance towards such change.
We would like all of our stakeholders to look at thechanges in the SWCC Group as we approach the 85th
anniversary of the company’s founding, which coincides withthis fourth year of the five year mid-term management plan.
We recognize the need for change in these times fromwhat have been some rigid aspects such as employee work
styles and the personnel system. In fiscal 2020, we
introduced a new personnel system for executives, changing
to an organization based on capabilities and roles rather
than on a seniority system, and we extended this to all
managerial track employee in fiscal 2021. We also expanded
the opportunities for senior personnel to play an active roleand introduced a support system to deploy capabilities within
the company and at new employers. Although employees’
thinking may not change immediately, we are creating a newcorporate culture through these system reforms while valuingwhat has been inherited from the past.
Our education and training includes the “SD Seminar,”which is mainly targeted at employees in their 30s. Insteadof portioning employees by Group company, we gather
employees of the same generation, and attendees find andexplore their own themes to make proposals tomanagement. This has led to many great proposals andgenerated internal energy. In the class above this, we havedevelopment courses for future leaders and management
called the “Next Leaders,” as well as courses for nextgeneration executives. We are gradually building depth
within these personnel groups, encouraging them to castopinions against the company openly, and actively creating
management related opportunities.
However, issues concerning internal reforms still persist. In
our satisfaction survey of all domestic Group employees
conducted in April 2021, many indicated dissatisfaction, etc.
with the work place, superiors and the company. Even when
I visit regional offices, I feel that management views have notbeen conveyed very well. We will move forward one step at
a time, continuing direct dialogue with employees andcreating opportunities for questions and answers.
On the other hand, in regard to the fiscal 2020 businessstatus, the year was one in which the SWCC Group’s
connections with society were once again recognized amid
the impact of COVID-19.
When State of Emergency Declarations and COVID-19
priority preventive measures have been issued or adopted,
we responded by reducing the number of staff in the office toapproximately 30% and we have been very much concerned
about how the situation would impact earnings. Ultimately,
we have recorded lower revenues and lower profit than theprevious term, but profit has exceeded initial forecasts. I
believe this proves the fact that the SWCC Group’s products
are essential for maintaining infrastructure, and can be usedin all types of environments. There has been particularly
strong demand for electric power infrastructure in the energy
and infrastructure business, which has underpinned profit.
We appreciate that customers are recognizing the value we
provide.

Net Sales/Operating Income (against the previous term and plan)
Net sales

1,800

1,600

1,711
86

Operating income(100 million yen)
120

1,620
70

1,617
76

90

1,400

60

1,200

30

1,000

Results for
FY2019Initial plan for
FY20200Results for FY2020(the term ended March 2021)

SWCC SHOWA HOLDINGS CO., LTD.

08

A Strategy to Hone Trust and Technology to Achieve Growth<<FY2020 Business Overview and Future Outlook>>

Benefits of structural reforms outweigh the impact of COVID-19
Reflecting on the fiscal 2020 business overview, overall
revenues were lower for major segments due to the impact
of COVID-19, but the results were mixed.
In the Energy and Infrastructure Business the benefits
were evident from the change in the business model fromwhat had been a focus on long-distance electricity
transmission to the expansion of total solutions focused on
substations, and the construction remained very busy andactive. In the electric power infrastructure field, there has
been considerable demand to update aging infrastructure,
but there is also increased demand related to the keyword of“decarbonization” with the emergence of new markets evenin Japan such as renewable energy, offshore wind power
generation and electric power liberalization. However, there
appears to have been restraint on purchases by customers
in the construction wires field, amid the higher price ofcopper, and results were poor.
In the Communication and Industrial Devices Business,there was increased demand for communication cables due
to factors such as 5G and remote classrooms. Industrial
devices showed recovery, particularly in the Chinese market.
In the Electrical Equipment and Components Business, inaddition to the ongoing sluggish demand for heavy electricalmachinery, there were major challenges in the automotive
business in the first half of the year due to temporary
suspension of operations at automobile manufacturers’
plants. However, a V-shaped recovery in the second halfmeant we were able to record increased profit for the full
year. Within the Group, we undertook work in preparation fora recovery such as facilities maintenance when operationlevels were low in the first half of the year, which led to
improved efficiency.
We initially forecast a substantial decline in profits due to
COVID-19 and projected operating income of 6 billion yen(down approx. 2.6 billion yen year on year), but secured theactual result of approximately 7.6 billion yen. We attribute
this to the impact of structural reforms conducted in recent
years, the shift to group management by business segment
and success in group procurement. The Chiefs of eachbusiness segment conducted a solid management of theoverall business and have also improved efficiency throughleveling action such as with the ad hoc allocation of

personnel to departments with high utilization rates during off
periods. Employees have cooperated beyond the boundaries
of individual companies and organizations, which has
outweighed the drop in earnings.

Reasons for change in operating income

Despite the impact of COVID-19, there have also been benefits
from procurement reforms and business structural reforms.
The fiscal 2020 operating income margin came at 4.7%.
FY2019operating income
8.6 billion yen(5.0%)

Work style
FY2020
improvements operating income
Impact of
Impact of businessprocurement structural reforms under COVID-19 7.6 billion yen(4.7%)
billion yen
reforms+0.8 billion yen +0.4
+0.3 billion yen-2.5 billion yen
Impact of reduced
demand due to
COVID-19, etc.
( ) refers to operating income margin

We are progressing new structural reforms needed tocreate ongoing benefits from fiscal 2021 and beyond.
In the Communication and Industrial Devices Business
Segment, we decided to reorganize domestic sites in thecommunication cables business. We aim to consolidate andorganize the development and production structure andstrengthen profitability by the end of March 2022. Optical fiber
cables and metal communication cables will be consolidated
at SWCC Showa Cable Systems Co., Ltd. Sendai Office andFuji Electric Cable Co., Ltd. Kofu Factory will specialize in
LAN cables. We will also implement reinforcement measuresat these offices to coincide with these transfers. On the other
hand, in the wire harness business and precision devices
business, we are enhancing the production of overseas
subsidiaries in China and Vietnam to align with the production
structures of corporate customers.

Reorganization of Domestic Sites of the Communication Cables Business (November 4, 2020 Press Release)

Consolidating and reorganizing the domestic offices and production sites for communication cables from four sites to three withtotal investment of 1.4 billion yen. We aim to improve the efficiency of the development and production structure and improve
service in preparation for the forthcoming digital society.
Metalcommunication
cables• SWCC Showa Cable Systems Co., Ltd. Sendai Office• Fuji Electric Cable Co., Ltd. Kofu Factory• Aomori Showa Electric Cable Co., Ltd.

Optical fiber cable• SWCC Showa Cable Systems Co., Ltd. Sendai Office• Fuji Electric Cable Co., Ltd. Isehara Factory

Conductors (materials) supply • SWCC Showa Cable Systems Co., Ltd. Sendai Office=>Each office
LAN cables• Fuji Electric Cable Co., Ltd. Kofu Factory

Logistics sites• Fuji Electric Cable Co., Ltd. Isehara Factory<Before reorganization>
Dispersed production sites and complicated logistics routes

09

SWCC Group Report

Conductors (materials) supply
Consolidation at SWCC Showa Cable Systems Co., Ltd. Sendai
Plant, and achieve better efficiency and improved ROIC
Metal
(3 sites =>1 site)
communication
Consolidation at SWCC Showa Cable Systems Co., Ltd. Sendai Officecables
Optical fiber cable(2 sites =>1 site)
Consolidation at SWCC Showa Cable Systems Co., Ltd. Sendai Office

LAN cables

Consolidation at Fuji Electric Cable Co., Ltd. Kofu Factory, and increase production
Achieve integrated production from cables to processed products

Logistics site

Consolidation at Fuji Electric Cable Co., Ltd. Isehara
Factory, and increase transportation capacity

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Greetings

In the Energy and Infrastructure Business Segment, weare aiming to streamline and reinforce the production linewith a construction completion target of April 2023 in
preparation for increased production of SICONEX®,
connectors for high-voltage power cables that are coreproducts in the electric power infrastructure business. In
addition, we are developing the connection works systemthat uses SICONEX® as the brand SICOPLUSTM and havecommenced initiatives to provide personnel training
programs for personnel involved in connection works.
The markets for core business have been on a recovery
trajectory from the second half of fiscal 2020, and we
forecast an increase in revenue and profits in fiscal 2021

based on the assumption that these markets have beenpulled out from a large slump. In addition to the return ofdemand, we are engaging in initiatives to take in new
demand associated with the key word “decarbonization,” andare planning to secure net sales of 180 billion yen andrecover operating income to fiscal 2019 levels of 8.6 billion
yen. Also from an ROIC management perspective, theinitiatives taken in fiscal 2020 will bear fruit from the second
half of the current period and we forecast that ROIC levels
will also return to former levels if there is an increase inoperating income. Then, we hope to surpass fiscal 2019 in
the current period, which should lead to achieving the targets
in the mid-term management plan that ends in fiscal 2022.

Structural reforms of core business based on ROIC management
Accelerate structural reforms to improve efficiency and increase profitability
Reorganization of
corporate structure(mergers and splits)Sites
reorganization
andmanufacturing
reforms

LOGIS-WORKS to takeover
SHOWA RECYCLE(Scheduled for July 2021)

Strengthen profitability in the circulating
business through transport, recovery andrecycling of electric wires

ROIC

Communication Cables Business
Structural reforms through sites reorganization(Scheduled for March 2022)

Improve efficiency and strengthen
profitability through consolidation of
production and development sites

ROIC

Investment in production increase of
SICONEX®
(Completion scheduled for April 2023)

Bringing forward investment to increase
production in light of increased electric
power demand

ROIC

Digital transformation ofcoated wire business(Scheduled for April 2023)

Introduction of IoT covering all processes
from receipt of orders to sales
Digitalize business processes, improve
efficiency and strengthen profitability

Operating income margin

Operating income margin

Operating income margin
ROIC
Operating income margin<<Progress update and Revision of the mid-term management plan>>

Revising the growth strategy in line with change in society
We achieved the initial profit target set in the“Change SWCC2022” mid-term
management plan ahead of the schedule infiscal 2018, the first year of the plan. We
then reformulated the plan with a starting
point of fiscal 2019, when we shifted to a
new business segment structure. The planstates three basic policies: “strengthen
profitability of core businesses,” “create new
businesses” and “new development ofoverseas business.” By implementing thesepolicies, we aim to achieve net sales of 200
billion yen, operating income of 10 billion
yen, operating income margin of 5% or over,and ROE of 10% or over in consolidated
operating results for fiscal 2022, which is thefifth year of the plan.
Considering the progress in the three
years to date, we evaluate that the results
have so far been in line with the anticipatedlevels for the numerical targets. The
operating income margin was 4.7% in fiscal
2020 compared to the final target of 5% orover, and we target a further increase forfiscal 2021, the fourth year of the plan. Other
indicators are also considered to begenerally trending well. In fiscal 2021, we willcertainly make progress on the initiatives
decided in fiscal 2020 regarding thestructural reform, with the aim to generate
outcomes in fiscal 2022.

Contribute to sustainable development of society
through supporting public infrastructures
Mid-Term Management Plan “Change SWCC2022” FY2022 Target
Net sales

200

Operating income
billion yen

10billion yen

Operating income margin

5% or over

Mid-Term Management Plan Numerical Target (KPI)
FY2020Results
Net sales
Operating income
Ordinary income

Net income attributable toowners of parent

Operating income margin
Dividend/ Payout ratio
Interest-bearing debt
DE ratio
Net assets
Equity ratio
ROE
ROIC

1,617
76
78
50
4.7%
20 yen (12%)
377
79%
482
36.7%
11.4%
6.3%

ROE

10

% or over(100 million yen)

FY2021 Plan FY2021 Plan FY2022 Mid-Term VISION 2026
Management Plan
(Before applying revenue (After applying revenue (Before applying revenue (Before applying revenue
recognition standard) recognition standard) recognition standard)
recognition standard)
2,000
86
83
68
4.3%
40 yen (18%)
390
73%
543
38.4%
13.5%
6.7%

1,800
2,000
2,100
86
100
150
83
95
150
68
66
100
4.8%
5% or over
7% or over
40 yen (18%) 50 yen or over (Approx. 20%) 120 yen or over (Approx. 35%)
390 380 or under 300 or under
73% 70% or under 40% or under
543 550 or over 800 or over
38.4% 38% or over 50% or over
13.5% 10% or over 10% or over
6.7%
7% or over
9% or over

* Due to the application of “Accounting Standard for Revenue Recognition,” the SWCC Group’s consolidated earnings forecasts
for fiscal 2021 after applying this standard are presented as FY2021 Plan (After applying revenue recognition standard).
* Debt-to-equity ratio is calculated based on shareholders’ equity.

SWCC SHOWA HOLDINGS CO., LTD.

10

A Strategy to Hone Trust and Technology to Achieve Growth

We plan to increase capital expenditure from 4.0 billion
yen in fiscal 2020 to 7.8 billion yen in fiscal 2021. Investment
will be into areas such as strengthening new products, theaforementioned reorganization and consolidation of domestic
sites, and the expansion and relocation of the plants in
China. Adequate investment for growth was not achieved
during past periods of deteriorating revenues, but now that
this is under control and we have financial stability, we aremaking such investment as proactive investment as a means
to find the next foothold.
In regard to new development of overseas business, weare progressing with the enhancement of the Chinese
production in the wire harness business. In China, there is a
growing market in wire harnesses for home appliances,where our strengths lie. In light of such trend, we have apolicy to strengthen “manufacture overseas – sell overseas.”
In the New Business, we are engaged in the developmentof medical materials, and in-vehicle products and products
for industrial equipment, as well as certification and securityrelated IT products of our subsidiary AXIO Corporation, but
no substantial growth has yet been made in these new
business operations. We will cultivate these businesses froma longer-term perspective to make them big businesses in2026.
As noted above, we commenced the current 5-year
mid-term management plan in fiscal 2018 and revised it in
fiscal 2019. However, there have subsequently been majorchanges to society due to the spread of COVID-19, as wellas the trend toward “decarbonization,” so we have decided
to put forward a growth strategy that aligns with the current
world. Specifically, instead of waiting until the end of thecurrent plan, we will commence a new 5-year mid-term
management plan from fiscal 2022, and promote it towardfiscal 2026, the final year of the long-term growth strategy“SWCC VISION 2026.” We plan to announce this new
mid-term management plan in November 2021.
We will finalize the details of the plan in future, but thedirection of the growth strategy will be framed by the key
phrases of “decarbonization,” “greening,” “digitalization,” and“shift from products to value.” We aim for business methods
that help solve social issues, having products at the core but
expanding our reach, shifting away from the previous
provision of value to customers and society through thecreation of products to the provision of values that are more
proposal-oriented, solution-oriented and service-oriented.

Formulation of the next mid-term management plan

We are formulating the next mid-term management plan in
preparation for its release in November 2021
The SWCC Group Mid-Term
Management Plan “Change SWCC2022”
Intensified US / China
confrontation under
COVID-19

FY2018With-COVID-19

FY202011

SWCC Group Report

VISIONFY2022[Key measures]• Governance reforms,
structural reforms• Financial
improvements• Consider policies forcore business reforms• Introduce ROIC
• Address unprofitablebusinesses and low
growth businesses• Redeploy andstrengthen production
sites

The next mid-term management
plan FY2022 - FY2026

2026(FY2026)
M&A

FY2022
Net sales
200 billion yen

Investment Businessfor growth renewal

FY2026
Net sales
210 billion yen

Operating income
10 billion yen

Operating income
15 billion yen

Operating income
margin5% or over

Operating income
margin7% or over

The structural reforms to date have strengthened thebusiness structure of each segment and achieved efficiency
improvements. However, in regard to the social issues
indicated by the aforementioned key phrases, we will be
unable to create and provide the required solutions unless
we advance initiatives across the entire Group and not justat individual segments. Taking “decarbonization” as an
example, there is complex involvement of various factors in
the electric power field, communication field and automotive
field, etc. Future growth requires a structure where theGroup as a whole can create and provide value. This is one
pillar of the mid-term management plan revision.

SWCC Group’s contribution to greening anddigitalization
SWCC Group’s products and technologies will contribute to
the future of the world.
Renewable energy• SICONEX®
• Connection work
• Maintenance, etc.

Data Centers• e-Ribbon® (Optical fiber)• Cat6A LAN cable• Seismic isolation devices, etc.

Superconducting
Cable System• Triaxial cables• Cooling system• Grid surveillancetechnology, etc.

Digital Health• Electronic medical
record system• Certification network• Wiring materials for
robots, etc.

Greening
CASE (environmentallyfriendly vehicles)• MiDIP® (Oxygen-free copper)• Aluminum cables for in-vehicle products• High-speed transmission cable, etc.

Digitalization
Smart logistics• Utilization of best
vehicles• Improve efficiency
of delivery, etc.

The promotion of digital innovation is also important in the
new mid-term management plan. At present, we arepromoting DX on a piece-meal basis amid the shift to smart
factories and digitalization, as well as countermeasuresagainst COVID-19, but there is no straight line
implementation by the Group as a whole. We need toconsider the extent to which we can introduce DX and thelevel of improvement in efficiency that can be achieved in thecompany’s operations. This is also a pillar.

<<Toward the realization of a sustainable society>>

Further promotion andstrengthening of ESG/CSR
management
In terms of the implementation of ESG/CSR management
and responses to SDGs theme, we have advanced initiatives
aiming for promotion throughout the company, with the CSR
Promotion Department, which we established in 2019,
playing a central role. However, we feel that the SWCC
Group’s materiality has not been sufficiently conveyed to allof our stakeholders, particularly in relation to internal
promotion. To what extent can the SWCC Group’sbusinesses contribute to social issues? This is the opening
for our future growth strategy, but some of our employees
still appear to have gaps in perception between social issues

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Greetings

and business. As management, we need to clearly indicate
ways to solve social issues through business.
We need to include initiatives that consider the promotionof environment-related social issues such as“decarbonization” and “greening” in our own activities. The
SWCC Group has steadily promoted environmentally friendly
activities, but the government’s targets have also tightened
and we must undertake further reforms.
We formulated the seventh voluntary environmental action
plan (from FY2021 to FY2025) in March 2021, in light of ourenvironmental plan “Green Plan 2050,” which targets zeroenvironmental impact in 2050. This plan includes aims to
reduce CO₂ emissions, reduce industrial waste and makeeffective use of water resources as environmental targets. In
regard to the zero environmental impact, the focus is on
reducing CO₂ emissions, but another major theme is
reducing industrial waste such as plastic and rubber in the
SWCC Group’s production activities, and we are engaged inefforts to reduce the use of such materials and to recycle
and reuse waste materials. However, we believe achieving
zero environmental impact from industrial waste will be
impossible without technological breakthroughs in our own
development or through open innovation.
On the other hand, in regard to human resources
development, apart from the initiatives with the new
personnel system noted at the beginning, we are also
improving systems to promote working from home as part ofwork style reforms, and schemes to create a better working
environment such as creation of a managerial track
employee position that does not require relocation andchildcare and nursing care leaves that are also applied tomen.
We have also newly launched the Female Empowerment
Project. Female employees have various views within thecompany, and we are investigating such views while
accelerating initiatives such as system reforms andeducation and training. The female employee ratio at the
SWCC Group remains low at 11 to 12%, but we plan toengage in efforts towards a target of 10% for the female
executive ratio by 2026, the focus of the mid-term
management plan.
In regard to corporate governance, we transitioned to acompany with an audit and supervisory committee in fiscal
2019 and have subsequently continued with initiatives toenhance governance. From fiscal 2020, three of the sevendirectors are independent outside directors and they have all
been appointed Audit and Supervisory Committee memberswith the aim of strengthening the supervisory function
against the management. The Board of Directors also
includes the three independent outside directors and wehave achieved a composition in the skill matrix with abalanced coverage of each field of sales, finance andtechnology. We will continue to be ever mindful of thesuitability of the corporate governance structure for the
SWCC Group and strive to improve its effectiveness.

<<Toward thorough compliance>>

Establishment of the“Safety, Environment, andQuality Oversight Office”
As announced on July 21 this year, we discovered
inconsistencies in testing with the methods determined withour customers for some products previously sold by the
SWCC Group. We sincerely apologize for any concerns thishas caused our customers, who are supporting our company
which has relied on products that supports social
infrastructure as a pillar of its business, and all of our
stakeholders. The reported inconsistencies in testing method
had already been corrected by September 2018 and theabsence of problems in the soundness of quality has beenverified by a third-party institution and reported to customers.
Furthermore, to prevent any such reoccurrence, weestablished a Special Investigation Committee, which isthoroughly investigating all the facts and the cause.
We intend to take firm measures in relation to the issues
identified through this investigation to ensure corrections andprevention of such reoccurrence. We established a new“Safety, Environment, and Quality Oversight Office” in thecurrent fiscal year as a body under the direct supervision of
the President, and we will continue in our efforts for thoroughcompliance.

<<Building relationships with stakeholders>>

To our stakeholders
In my fourth year since becoming President, we have finallymade some progress with structural reforms. To a certain
extent, we have been able to work on matters that require
renewal, matters that need to be abandoned, and mattersthat require reform. We have also produced outcomes.
However, I believe that we have not yet been able toadequately convey the SWCC Group’s vision and target
direction to our stakeholders, and that there may still be alack of understanding.
In addition, although we have reached a situation where
we can return profits through dividends to our shareholders
and investors, we recognize that this does not adequately
meet the levels of expectations.
The SWCC Group has aimed to eliminate waste, increasebusiness efficiency and stabilize management throughreforms. In future, we will shift towards a growth trajectory
mindful of there being sustained development of thecompany and ongoing creation of social value.
I hope that all of our stakeholders will look forward to thefurther growth of the SWCC Group and will continue tosupport us for many years to come.

SWCC SHOWA HOLDINGS CO., LTD.

12

A Strategy to Hone Trust and Technology to Achieve Growth

Value Creation Process

Value Creation Model
We will contribute to the achievement of a rich human society.
Through initiatives such as “outstanding technology and highly reliable products and services,” “safe andstable business activities,” and “solutions to management issues,” the SWCC Group will contribute to therealization of a rich human society by providing various value to customers and solving social, environmental,
and industry issues.
In addition, we will continue to invest in further improvement of corporate value and sustained growth, as wellas pay stable continuous dividends to our shareholders and investors through income growth.

Social problems

Respond to needs

Create added value
Business foundation

Ensuring
universal accessto energy

Sales and

Promotion of humane
employment that provides
high-level productivity
and decent work

Human rights,
employment, and safety
and health activities

P38•43Creation of safeand resilient
communities

P27
13

SWCC Group Report

Research anddevelopment

Customersatisfaction

Promotion of infrastructuredevelopment andsustainableindustrialization

Consideration ofenergy/resource
conservation andbiodiversity

marketingSocialcontribution

Corporate
governanceTechnical
innovation

P45

Production andResearch andservicedevelopment
Environmental
management

P29

Quality
management

Supply
chain

P33

P35

Various capital
Active participation ofCore technologies diverse
human resources Production innovation Financial foundation

SocialEnvironmental

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Value Creation Process

We also respond to environmental and social problems through our business activities
Safety andContribute to a sustainable society

quality

Globalwarmingprevention

Resource
recycling

Employment

Diversity

Business strategy and output

Enriching people’s lives

Energy andInfrastructure BusinessCommunication andIndustrial Devices Business

P19

Electrical Equipment andComponents Business

P21

Value provided (outcomes)

P17

●
●
●
●

“Electric wires and cables” are used to distribute the electricalenergy everywhere, which is essential for the development of thesociety.
“Vibration control devices” are used to reduce vibration and noiseand provide a comfortable living space“Optical fiber cables” support our information-oriented society inthis large capacity age“Litz wires” are used in products such as wireless power supply
devices and provide automation technology

Protecting cities from disasters“Seismic isolation devices” reduce seismic vibration andprotect buildings● “Direct molds” prevent collapse and fire and protect substationequipment from earthquakes●● “Fire-fighting cables” and “leaky coaxial cables” quickly convey
emergency warnings and information●

Protecting the global
environment●
New Business●

P23“High-performance oxygen-free copper MiDIP®” contributes toglobal warming prevention through the spread of electric vehicles
and so forth“Compact type electric power connectors (SICONEX® series)”
are environmentally friendly products that do not use oil orharmful gases

SWCC SHOWA HOLDINGS CO., LTD.

14

A Strategy to Hone Trust and Technology to Achieve Growth

Financial Highlights Scope of data: SWCC Showa Holdings Co., Ltd. and its consolidated subsidiaries
Net sales

Operating income/Operating income margin(100 million yen)

2,000

1,500

1,552

1,682

1,772

■Operating income

1,711

1,617

86

80

1,000
40

2016

2017

2018

2019

2020

Scope of data: SWCC Showa Holdings Co., Ltd. and its consolidated
subsidiaries

Net income attributable to owners of parent/ROE■Net income attributable to owners of parent
60

ROE (%) (100 million yen)

55

50

46

50

37

40

20

11.4%

13.5%

12.3%
7.4%

10

2016

0

5.0%

3.8%

4.7%

2016

2017

2018

2019

2020

Operating income decreased 11.8% year on year to 7.6 billion
yen. While net sales decreased, we maintained a profit level
above fiscal 2018 for the full fiscal year, by implementing themeasures such as flexible production adjustment and cutting
unnecessary expenses.

Invested capital/ROIC■Invested capital

ROIC (%)(100 million yen)

7.3%

950

5.4%

5.6%

812

807

817

817

2016

2017

2018

2019

900
850

14.7%

30

3.6%

800

6.3%
836

750

2017

2018

2019

2020

700

2020

Loss on impairment of fixed assets increased year on year. On
the ordinary income level, however, in addition to the recording ofreversal of allowance for doubtful accounts as well as subsidies
for employment adjustment, interest expenses decreased andequity in earnings (loss) on equity-method improved. As a result,on the bottom line level, net income remained at a decrease of
approximately 0.5 billion yen year on year.

ROIC decreased approximately 1% year on year due todecreased operating income as well as an increase in invested
capital.

Total assets/Shareholders’ equity/ Shareholders’ equity ratio

Research and development expenses/ Capital expenditure■Total assets ■Shareholders’ equity

Shareholders’ equity ratio (%)(100 million yen)

1,242

1,295

1,500
1,200

1,195

1,235

900
600
300
0

1,225

23.6%

26.6%

28.1%

32.3%

282

329

349

396

2016

2017

2018

SWCC Group Report■Research and development expenses ■Capital expenditure (100 million yen)
50

36.7%

30

476

20
10

2019

42

40

2020

Total assets increased mainly due to increases in “trade notes
and accounts receivable” and “net defined benefit asset.”
Shareholders’ equity increased mainly due to the recording of net
income attributable to owners of parent of approximately 5.0
billion yen and an increase in defined benefit plan assets
associated with a recovery of the stock market. As a result, theshareholders’ equity ratio also improved year on year.

15

42

76

20

Net sales decreased in the first quarter due to the impact of the
COVID-19 pandemic, but have turned toward a recovery since
the second quarter. As a result, net sales for the full fiscal year
decreased 5.5% year on year to 161.7 billion yen.

0

3.7%

(100 million yen)

2.7%

500

20

66

63

60

0

Operating income margin (%)

100

0

34

32

40

29

9

10

11

2016

2017

2018

13

13

2019

2020

Research and development expenses and capital expenditure
were on the same level as in the previous fiscal year.
Scope of data: SWCC Showa Cable Systems Co., Ltd.

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Financial Highlights/Non-financial HighlightNon-financial Highlight
Number of employees

Number of female executives and managerial track employees■Domestic ■Overseas(Persons)

6,000

5,824

5,000

5,513

2,294

5,461

2,194

4,000

5,127

5,356

2,097

2,009

1,943

3,000
2,000

3,530

3,319

3,364

3,347

1,000
0

■Number of female executives ■Number of female managerial track employees

New recruits (%)(Persons)

60

7,000

2016

2017

2018

2019

50

44

40

34

2020

Number of employees of the Group decreased, mainly due todissolution and liquidation of Daiji Co., Ltd., a consolidated
subsidiary, for the purpose of changing the organizational
structure to enhance the wire harness business. We will continue
to strive to maintain appropriate numbers of employees both inJapan and overseas.
Scope of data: SWCC Showa Holdings Co., Ltd. and its consolidated
subsidiaries

17%

19%

30
20

3,184

36

33

49

10
0

7

11
0%

2016

0%
2017

12

7%

2018

11

13

2019

2020

We have been recruiting female employees as managerial track
employees steadily every year, regardless of in hiring new
graduates or in hiring immediately effective personnel in the
mid-career recruitment. As we strive to improve the retention ofthese female employees, the number of female employees has
been gradually increasing. We will continue to work on recruiting
and fostering female employees.
Scope of data: SWCC Showa Holdings Co., Ltd. and SWCC Showa Cable Systems Co., Ltd.

Number of non-Japanese employees (domestic)

Percentage of annual paid leave taken(Persons)

(%)

35

80.0

30

70.0

25

26

26
22

26

25

56.8%

60.8%

2016

2017

70.0%

2018

2019

63.2%

50.0

20

40.0

15

30.0

10

20.0

5
0

60.0

67.7%

10.0

2016

2017

2018

2019

2020

0

2020

We have been recruiting non-Japanese employees to bringdiverse viewpoints and values, such as culture, religion andlanguage, into our companies. We are committed to hire talented
personnel to more strongly advance the new development ofoverseas business, which is stated in the Group’s mid-term
management plan, as well.

It is reported that the percentage of annual paid leaves taken was at alow level worldwide in fiscal 2020 mainly due to the impact of
COVID-19. This was the same for the company. We believe that thiswas due to the impacts of decreased circumstances in which the annual
paid leaves should be used, as well as implementing the special leavesystem which was newly established during the COVID-19 pandemic.

Scope of data: SWCC Showa Holdings Co., Ltd. and SWCC Showa Cable Systems Co., Ltd.

Scope of data: SWCC Showa Holdings Co., Ltd. and SWCC Showa Cable Systems Co., Ltd.

Greenhouse gas emissions

Industrial waste landfill rate
(Thousand ton-CO2)

80.0
70.0

68.9

(%)

3.0

65.2

64.5

60.0

58.6

50.0

2.33%

2.5

51.1

40.0

1.33%

1.5

30.0

1.52%

2.0

0.93%

1.0

20.0
0.5

10.0
0

2016

2017

2018

2019

2020

CO2 emissions decreased approximately 12% year on year to51.1 thousand ton. The reduction was mainly due to the lower
production volume owing to the impact of COVID-19, as well as
decreased energy consumption resulting from the energy-saving
measures such as updating to energy-saving equipment andimproving production efficiency.

0

0.16%
2016

2017

2018

2019

2020

Since fiscal 2018, the landfill amount in Japan has increased as aresult of restrictions on the import of waste imposed by Asian
countries such as China. However, the conditions are improving
due to initiatives to reduce the landfill amount, such as promoting
the waste plastic heat recovery.
Scope of data: Production sites of domestic Group companies

Scope of data: Production sites of domestic Group companies

SWCC SHOWA HOLDINGS CO., LTD.

16

A Strategy to Hone Trust and Technology to Achieve Growth

SWCC Group’s Growth Strategy

Energy and Infrastructure Business Segment
This business segment aims to be No. 1 for total service inthe domestic infrastructure business by strengthening our
SICONEX® power cable connector manufacturing capacity,
expanding our electric power infrastructure businessthrough the SICOPLUSTM personnel training program forconnection technology, and strengthening businessinvolving construction wires and seismic isolation/vibration
control devices for disaster prevention/mitigation demands.

Yukio Kawase,
Executive Officer and Chief of Energy and Infrastructure Business Segment

Business Overview

Basic Strategies■ Electric power infrastructure field● Electric power infrastructure field: strengthen

We will contribute to a stable supply of energy by providing totalsolutions for electric power infrastructure system networks, fromgeneration to transmission and distribution of electricity,
including power cables and equipment, as well as theirinstallation and maintenance.

■ Construction wires field

We will contribute to maintaining a rich living environment forpeople by offering a wide variety of wires and electrical products
for construction, from low-voltage general-purpose wires thatare essential for electrical wiring inside buildings to fire-resistantcables that supply power to fire prevention equipment in theevent of a fire.

■ Seismic isolation and vibration control field

We will contribute to improving urban resilience by providing
seismic isolation devices and vibration control products that arenecessary to ensure people’s safety and minimize damage tobuildings and infrastructure networks at large sites in Japan,
including skyscrapers, hospitals, and distribution warehouses,in the event of an earthquake.

●●●

SICONEX® manufacturing capacity in anticipation ofincreased demand for electric power in fields suchas renewable energy, and develop solutions
business for connection work by launching
SICOPLUS™
Construction wires field: increase competitivenessby using DX to streamline business and reduce
costs
Seismic isolation field: increase competitiveness andcontribute to a sustainable society by strengthening
partnerships
Vibration and noise control field: strengthen
technological development, manufacturing, andsales capabilities by concentrating businesses to
SHOWA SCIENCE Co., Ltd.

FY2020 operating results■Trend of net sales and
1,000

operating income

885

867

865

(100 million yen)
100

916

800

80

54

54

60

400

40

200

20

0

17

61

43

600

2018

SWCC Group Report

2019

2020

2021(Plan)

FY

0Operating Results
In fiscal 2020, demand for domestic electric power infrastructure
was affected by the suspension of construction for the Tokyo
Olympics and Paralympics. Construction-related demand
recovered gradually from the second quarter, but did not reachthe level of the previous fiscal year, leading to decreases in bothsales and income.
In fiscal 2021, demand for equipment updates due to the shift
to renewable energy and the aging of electric power
infrastructure, as well as for seismic isolation devices at
distribution warehouses, data centers, and so forth is expected
to be robust, but demand in the construction market is expected
to decrease due to a decline in the number of new large-scale
projects, and income is projected to be flat with the previous
fiscal year.

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

SWCC Group’s Growth Strategy

Contributing to society through business

Protect electric power infrastructure from an increase in infestations by termites due to global warming:“New anti-termite CV cable”

New anti-termite
CV cable

Old anti-termite
CV cable

We developed a new, small-diameter, anti-termite electric power CV cable that has excellent
workability during installation and protects cables from infestations by termites, which arefeared will increase due to global warming. We began delivering this in September 2020 toelectric companies asking for anti-termite cable mainly in areas of western Japan where
termite infestations occur.
Termites make underground nests in warm areas mainly near the coastline, but in recent
years, due to the effects of global warming, the termites’ habitat has gradually been
expanding. When termites damage the cables, additional work that requires replacing costs
and power outages becomes necessary. Unlike conventional anti-termite CV cables, which
Comparison of drum packing
were designed with an exterior anti-termite layer made of a hard material such as nylon that(image comparison)
termites could not chew through, the new anti-termite CV cables prevent infestations by using
vinyl wire coating containing an anti-termite insecticide. In addition, by eliminating the anti-termite layer on the exterior, the same
flexibility and small diameter as ordinary CV cables can be achieved, which contributes to labor savings during installation.
Further, due to the small diameter of the cables, the drum packing can be made significantly smaller and lighter, which is
expected to reduce transportation costs and CO2 emissions during transport.
Leaching tests have been conducted and it has been confirmed that there are no problems regarding the environmental
effects of the insecticide contained in the new anti-termite CV cables.

Contribute to east-west power sharing during natural disasters:

154 kV smart type sealing end (SICONEX® series)
In recent years, constructions to update and enhance electric power equipment at power plants andsubstations have been planned to make the electric power system more resilient. In particular, the TEPCOPower Grid, Inc.’s Shin-Shinano Substation, which began operations in March 2021, is an important facility
Smart typethat converts between 50 Hz frequency in eastern Japan and 60 Hz in western Japan, enabling electricsealing ends
power to be shared if there is a regional power supply shortage due to natural disaster or other cause.
High-voltage, large-capacity electric power equipment is used extensively here, and there are also many
special high-voltage 154 kV sealing ends that connect electric equipment, so it was strongly desired in orderto shorten the time required for connection works.
SWCC Showa Cable Systems Co., Ltd. delivered 154 kV smart type sealing ends with a plug-in structure to the Shin-Shinano
Substation and made it unnecessary to open equipment cases on site, which significantly shortened the time needed for cableconnection works and contributed greatly to saving labor and simplifying work.
Smart type sealing ends have been sold since 2000 in 66/77 kV, 110 kV, and 154 kV types, and the 275 kV type was added to
the line-up in 2019. By making sealing ends lighter and smaller, saving on labor and simplifying connection work, project time
has been shortened by approximately 30%, including labor savings on cable pit civil engineering work.

Handling prolonged fire extinguishing activity and evacuation guidance due to taller buildings and aging of population:“One-hour low-voltage fire-proof cables”
We developed one-hour low-voltage fire-proof cables that enable electric
power to be supplied to firefighting equipment in longer and hotter fire
environments (30 minutes/840°C → 60 minutes/925°C), and started to sellthem in January 2021.
One-hour low-voltage fire-proof cables help solve the social problem of
prolonged fire extinguishing activity and evacuation guidance due to tallerbuildings and aging of population. In addition, in consideration of theenvironment, these are designed as eco cables made of low-smoke zerohalogen materials.
These are expected to be used in wiring (emergency power source
circuit) for firefighting equipment, such as guide lights and emergency lights
in skyscrapers, long-distance tunnels, shopping centers, elderly facilities,
and other buildings believed to require 30 minutes or longer to evacuate incase of fire.

Low-voltage fire-proof cables
Emergency power source

Alarm cables
Heat-resistant wires
Fire-proof cables

Use case of cables in a building
Guide lights
Emergency power outlets
Emergency lights
Other equipment

Example of fire-proof cable wiring system

SWCC SHOWA HOLDINGS CO., LTD.

18

A Strategy to Hone Trust and Technology to Achieve Growth

Communication and Industrial
Devices Business Segment
This business segment offers solutions through diverse
products and technologies from cables to processing/devices cultivated in many years of global operations in theinformation and communication market, which will continue
to grow globally due to advancements in Society 5.0 and
5G, and contributes to updating and developing resilientand sustainable communication infrastructure and therealization of safe and comfortable lives for people in the
new normal.

Yoshinao Kodama,

Executive Officer and Chief of Communication and Industrial Devices Business Segment

Business Overview

Basic Strategies■ Communication cables field

Strengthen Profitability of Core Businesses

We provide communication cables and other manufactured
products that are indispensable in the information andcommunication field, where technological innovation is rapidly
advancing toward higher speeds and greater capacity. We
support the information society that evolves day by day byoffering a wide range of products for information andcommunication networks, from optical cables for long-distancecommunication to LAN cables for short-distancecommunication.

■ Wire harnesses field

We provide wire harnesses and electronic wires used in theinternal wiring for home appliances and other products. We are
expanding our business in the home appliances and electronicequipment markets in China and Southeast Asia, where
demand is expected to grow in the future, through joint creation
with our customers.

■ Precision devices field

We mainly offer roller products that are installed in the image
fixation unit of office equipment including copiers and printers.
We are expanding our business globally together with ourpartners at domestic and overseas manufacturing sites byutilizing our new product development capabilities that make fulluse of the precise processing technology and rubber technology
we have cultivated over the years.

● Optimizing our domestic telecommunication cablemanufacturing sites and developing and expanding
sales of high value-added products● Improving the efficiency of sites in the wire
harnesses field within the GroupNew Developments of Overseas Business● Expanding manufacturing sites for wire harnesses
and precision devices (China and Vietnam)● Establishing a development site in the wire
harnesses field● Strengthening cooperation with partner companies
in the precision devices field

FY2020 operating results■ Trend of net sales andoperating income(100 million yen)

400

40

327
300

18

200

305
25

270
18

30

237
24

20

10

100

0

19

2018

SWCC Group Report

2019

2020

2021(Plan)

FY

0Operating Results
In fiscal 2020, the effects of the slump in construction related
business were felt in the first quarter, but demand recoveredfrom the second quarter mainly for communication cables in the
GIGA School Program, 5G service, and other projects, and forindustrial devices in the Chinese market. However, overall
demand did not reach the level of the previous fiscal year, which
led to decreases in both sales and income.
In fiscal 2021, we will work to capture 5G related demand,
which is expected to grow. The wire harness business willreinforce overseas sites and further expand sales to China andSoutheast Asia. The precision devices business will promote
the optimization of the production and development sites tofurther strengthen strategic partnerships with customers.

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

SWCC Group’s Growth Strategy

Contributing to society through businessContributing to automated driving technology:“In-vehicle twisted pair cables”
For vehicles, various parts are controlled by an ECU (Electronic Control Unit), andmany sensors are equipped in them. As driving systems become moresophisticated, the volume of data communication between ECUs and sensors is
expected to dramatically increase, so the networks that transmit this data need tobe high-speed.
SWCC Showa Cable Systems Co., Ltd. developed a novel in-vehicle twisted paircable that is compliant with the latest automotive Ethernet standard*1. This realized
transmission performance, lower skewing with very small discrepancies in intersignal arrivals, and noise resistance that can accommodate high frequency band,
which enabled high-speed, large-capacity transmission of the information datarequired for the high functionality of automated driving. It is expected to help solve
various problems such as occurrence of automobile accidents and other serious
accidents, labor shortages in the logistics industry, and transportation for seniorcitizens after giving up their drivers’ licenses. Mass production is aimed to begin in
fiscal 2022.

In-vehicle twisted pair cable*1 Automotive Ethernet standard: IEEE 802.3ch Multi-Gig Automotive Ethernet PHY 10GBASE-T1
formulated in 2020 (hereinafter “Multi-Gig Ethernet”)

Contributing to a comfortable living environment:“Investment in the construction of a new plant for Jiaxing Showa Interconnect Products Co., Ltd.”We are building a new plant for Jiaxing Showa
Interconnect Products Co., Ltd., an overseas
subsidiary in China, with the aim of expanding our wire
harness business globally. For a total investment ofapproximately 1.6 billion yen, the current plant will be
moved to land acquired in Jiaxing City, Zhejiang
Province. Our goal is to increase production capacity
by 2.5 times and achieve net sales of 10 billion yen in
fiscal 2022. This investment is expected to increase
production capacity through process automation,corresponding to an increase in demand for wire
harnesses, which are key parts in various up-andcoming home appliances and industrial equipment thatmake living spaces and the environment more
comfortable, and achieve greater efficiency andreduced manpower through automation of
manufacturing process. A groundbreaking ceremony
was held on the site in September 2020, andoperations are scheduled to begin in December 2021.

Groundbreaking ceremony forthe new plant

Conceptual drawing of the plant atcompletion

Contributing to increasing data communication throughout the Group:

Reorganization of the Group’s domestic manufacturing sites
As demand increases due to the spread of 5G service, data center build-up, and the like, we are reorganizing our development
and production sites across the Group. The SWCC Showa Cable Systems Co., Ltd. Sendai Office will be positioned as the mainsite, and it is aimed to be completed by the end of March 2022. To date, there have been four communication cable businesssites, namely, SWCC Showa Cable Systems Co., Ltd. Sendai Office, Fuji Electric Cable Co., Ltd. Isehara Factory and Kofu
Factory, and Aomori Showa Electric Cable Co., Ltd. (to be dissolved at the end of December 2021), which have developed andmanufactured optical fiber cables and metal communication cables. By concentrating these four sites into three sites, we will
endeavor to increase efficiency, improve service, and further strengthen profitability.

SWCC SHOWA HOLDINGS CO., LTD.

20

A Strategy to Hone Trust and Technology to Achieve Growth

Electrical Equipment andComponents Business Segment
In this business segment, by using the properties of highperformance oxygen-free copper MiDIP®, we will increase
the sales volume percentage from 30% to 50% forautomotive magnet wire that requires high performance,such as high-voltage and high heat resistance.
In conjunction with advancements not only in automotive
but also in various mobility cases, we will expand the heaterwire business globally using ultra-fine flat wire and coppersilver alloys for electronic parts.

Takashi Yamamura,

Executive Officer and Chief of Electrical Equipment and Components Business Segment

Business Overview

Basic Strategies■ Bare wires field

Strengthen Profitability of Core Businesses

We manufacture conductors used in wires and cables for the
infrastructure market and core wires for magnet wires used in
automotive parts and electronic devices. We also have thetechnology to produce copper-silver alloy wires, as well as thetechnology to process these into ultra-fine sized wires. Coppersilver alloy wires combine the advantages of both silver andcopper in terms of high electrical conductivity. These wires havehigh strength, high electrical conductivity, and high flexibility,
and we are expanding our business in the markets of theautomotive and medical care fields with these wires.

● Improve efficiency by restructuring the domestic
magnet wire business● Increase earnings by increasing production of●■ Magnet wires field

SWCC Showa Unimac Ltd. is expanding its business as the
only comprehensive manufacturer of magnet wires in Japanthat offers fine to thick sized wires, and supplies products to awide range of markets including the heavy electrical market,
in-vehicle market, and electronic devices market.
The automotive market is expected to experience a rapid shift
to environmentally friendly vehicles (hybrids and electricvehicles). Given this backdrop, there is a growing demand forelectrification and electronification. In this field, we are working
to develop materials that improve heat resistance and to
improve quality stabilization manufacturing technology to meetthe demand for high-efficiency and high-reliability magnet wires
in the in-vehicle market.

●●

high-grade wire rods and developing highperformance magnet wires to meet the growing
in-vehicle demand
Proactive use of open innovation to develop thedownstream strategy of adding processing
technology to the high-performance oxygen-freecopper MiDIP® and copper alloy wires, and develop
overseas business
Global development through cooperation withoverseas partners
Commercialization of fine magnet wire using highgrade wire rods (oxygen-free copper and copper
alloy wires) as semiconductor materials

FY2020 operating results■ Trend of net sales andoperating income(100 million yen)

800

600

40

522

592
471

431

400

8

200

0

21

2018

SWCC Group Report

6
2019

30

7
2020

20

14
10

2021(Plan)

FY

0Operating Results
In fiscal 2020, orders in the automotive field declined
significantly in the first half due to the COVID-19 pandemic, but
income increased for the entire year in spite of reduced sales,
due to the recovery of the automobile field, an increase in game
console demand, measures such as withdrawal from
unprofitable products mainly in the heavy electrical field, andexpense reduction in the second half.
In fiscal 2021, despite adjustments in automobile production
due to the global semiconductor shortage, in the second half, a
rapid recovery in the automobile field and the resumption ofbusiness activity are expected to result in an increase in ordervolume, leading to increases in sales and income.

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

SWCC Group’s Growth Strategy

Contributing to society through businessContributing to the accelerated shift to EV:“High-performance oxygen-free copper
MiDIP®” for functionality

High-performance oxygen-freecopper MiDIP®

Environmentally friendly vehicles run on motors instead of engines, but in order to saveenergy consumption and extend the distance to empty, a lightweight, high-output motor andmaterials are required.
High-performance oxygen-free copper MiDIP® is manufactured using Japan’s only “dipforming system” and is high-grade oxygen-free copper wire with copper purity of 99.99% (4N)or higher and oxygen content of less than 10 ppm. Highly conductive and resistant tohydrogen embrittlement, it is used as a material for magnet wires in motors.
In addition, we have introduced a new conform manufacturing method for soft rectangularcopper wire. By using MiDIP® as a material, it is possible to manufacture high-grade
rectangular copper wire. The conform manufacturing method contributes to energy savings
measures by consuming 30% less energy than conventional manufacturing methods.

Conform products

Copper-silver alloy wires for comfort
Environmentally friendly vehicles without engines do not have aheat source, so a heater for the vehicle’s interior must be
installed separately. Seat heaters, steering wheel heaters, andother features that make the driving environment comfortable,
battery heaters to improve battery efficiency, and other heaters
are incorporated.
While these heaters are manufactured using fine wires called
heater wires, the copper-silver alloy wires made by SWCC
Showa Cable Systems Co., Ltd. make a strong showing forthese heater wires. Copper-silver alloy wires have both highstrength (1,700 MPa) and high conductivity (70%) at the world’s
top level, as well as excellent flexibility and good solderability.
They are also recyclable and do not contain harmful
substances, making them environmentally friendly. Coppersilver alloy wires also contribute to an increasingly wider rangeof fields in addition to heater wires, including smaller and lighter
automotive electrical components, and advanced medical
devices.

Copper-silver alloy wires

Molding material

Inverters and converters

Heater devices

EPS

Drive motors,
generators,
ISG

Contactless power
supplyContributing to an information-oriented society:“Fine flat magnet wire”
It has been long since digital devices have become daily necessities, and withincreased home-centered demand due to the COVID-19 pandemic, products thatare both high-performance and compact are being developed one after another.
These electronic devices contain multiple inductors and so forth, but in order tomake digital devices high-performance and lightweight, parts must be compact,
and this segment is contributing with its magnet wire used in these parts.
We are developing a type of magnet wire, which is known as fine flat magnet
wire, that responds to customer needs for compact, lightweight, and high efficiency
devices in the electronics field including PCs, smartphones, game consoles, andso forth. By processing this into small diameter and flat conductors, we will reducethe coil space factor and achieve space savings, high current, and high density.

Fine flat magnet wire

SWCC SHOWA HOLDINGS CO., LTD.

22

A Strategy to Hone Trust and Technology to Achieve Growth

New Business Segment
In this business segment, we will contribute to society byusing core technologies to provide products that support asmart society in fields other than electric power andcommunications. In research and development, we pursue
activities focused on using data for the realization ofSociety 5.0 coming in the information and communication(ICT) business field, with the aim of commercializing newtechnologies.

Yoshiaki Higuchi,

Executive Officer and Chief of New Business Segment

Basic Strategies■ Information and communications technology (ICT) businessIn the context of promoting the use of ICT and realizing a digital society, the growth strategies for fiscal 2021 in this businesssegment are (1) activities in new business areas in the ICT field, and (2) shift to technology expected to be in demand. The useof Cloud services is expanding, and data aggregation in every situation and corporate usage are expected to increase. Security
measures and corporate governance will also be issues in the future. We also think that the technological innovations andchallenges in each field of the SWCC Group represent a shift to further digitalization. We aim to realize a smart society throughnew services that combine AI and IoT technologies, not to mention the core technologies we have cultivated over many years.

■ Research and development business

Since its establishment, the SWCC Group has cultivated coretechnologies, focusing on the electric wire and cable business,
including the materials technologies and metal and resin processing
technologies used in that business, and the design and evaluation
technologies required for electric power and telecommunications
infrastructure. In addition, we have consistently engaged in the
research and development of superconductivity technology which isalready in practical use in medical MRIs and other applications. At
the moment, with the practical application of 5G communications
and the widespread use of compact and high-performance sensors,
the mobility field, including automobiles, the smart industry field witha focus on factory automation, and the smart infrastructure field areentering a period of major transformation. We will capture theneeds for these technological innovations and speedily propose
solutions to support a more comfortable, safe, and secure lifestyleby utilizing recently developed AI and IoT technologies. At the sametime, we will further develop the core competencies of the SWCC
Group through these activities.

Metal materials
Organic materials

AI

IoT

Core technologies
Conductor processing
technology
Resin molding
technology

ElectricaldesignHigh voltage/
insulation
High frequency
wave

MI

Open
innovation

FY2020 Results
Operating Results
Over the past three years in this business segment, net sales and operating income both have remained flat. Toward the
expansion of highly profitable new businesses, in fiscal 2021, we will focus on new activities in ICT business and pursue quick
monetization, market recognition, collaboration with business partners, and vitalization. With AI- and IoT-related technologies
that are expected to be in demand, we will aim to expand sales primarily in relation to construction of smart buildings which arecoming into actual use.

23

SWCC Group ReportHistory and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

SWCC Group’s Growth Strategy

Contributing to society through business (Information and Communication Technology (ICT) Business)

Accelerating DX - Responding to a new work style:

ICT Business’s contribution leveraging the strengths in system design and development capability
COVID-19 has changed work styles to incorporate telework, satellite offices, andthe like at companies. Meetings and business talks are held in the Cloud and areshifting to a system that allows work to proceed even though it is not in person.
Paper-based information is quickly moving to digital data and will be accumulated
in systems.
We regard such DX as a new business opportunity. With the need for security
and compliance measures at a higher level than before, the biggest mission is tobuild a system that can reference, analyze, and use various data safely andquickly.
In our ICT business, we propose DX solutions leveraging our strengths in systemdesign and development capability.

Security in the DX age:

“Promoting Zero Trust business”

Sales Integration
Grand Design
SupportAXIO Corporation

ResearchandPromotion
AXIO Corporation and Keyspider Corporation (“Keyspider”) entered into a
Development
Marketingbusiness partnership for Cloud ID management services in April 2021.
Based on close cooperation through a business partnership with Keyspider,
Keyspider Japan LLC
zero-trust business and Keyspider service products will be sold anddeveloped.
As Cloud services spread due to telework and so forth, data protected by
OriginPartner systemcompanies has become scattered in many places, and sufficient risk
AzureADOkta, OneLogin, IIJ ID,
IDaaS
aversion and systems management have become difficult with existing
TrustLogin, etc.
Various IDaaS
safety measures alone. Against this backdrop, attention has been drawn to
Office365, AzureAD, G
Cloud
Suite, Salesforce, BOX,
Zero Trust, which fundamentally reviews the way systems should be andetc.
Internal AD
Sales management, inventory
safety measures.
Business systemmanagement, attendanceInternal LDAP
User information
management, expense reporting, etc.
Personnel system
The most important concept in understanding Zero Trust is that execute
Organization information
File sharing, schedule
Groupware
Authority information
authority should only be granted to trusted individuals. This enables
management, SNS, etc.
AzureVM
complex account management, such as who can execute what system
operations (authority) and who gave permission (approval), as well as
reflection to multiple systems and automated operation. Particularly now
when business is shifting primarily to the Cloud, AXIO focuses on developing our specialty services centered around Cloud ID
management service. In order to promote this business, a new Zero Trust Business Headquarters was established. “Keyspider”(a product) and related products will respond to the demands to achieve a safe Cloud environment.

Providing comfortable, energy efficient building and home systems:“New network technology in smart buildings”
With the development of 5G, AI, and IoT technology, new networks, such as factory
automation and smart city initiatives, have been implemented in society. Demandis particularly expected to increase in relation to social infrastructure development
to provide energy efficient building and home systems that are comfortable forworkers and residents, generally known as “smart buildings.” Against thisbackdrop, in this segment, network related business remained strong despite the
COVID-19 pandemic in fiscal 2020. In smart building construction, the latest IoT,
sensor technology, wireless technology, control application link technology areused, and construction technology to connect various building systems andlearning new technology are essential. In this segment, we will use technologies
and construction experience cultivated over many years as a cable manufacturer, while also integrating new communication
technologies and responding to the needs of society.

SWCC SHOWA HOLDINGS CO., LTD.

24

A Strategy to Hone Trust and Technology to Achieve Growth

Contributing to society through business (Research and Development Business)

Innovation in science and technology:

Adopting an AI-driven development process (material informatics)
Create a predictivemodel fromexperiment data

Optimization
algorithm

Update thepredictive model

Achieve target
values

Efficientexperiment
plan

Derive experimentrecommendation
pointsExperiment/
evaluation

Data-driven development process using MI*
Resin A percentage

Property B

Due to remarkable progress in the IT field, new technologies called AI andmachine learning are increasingly used in our daily lives, such as smart
phones and other digital assistants, IoT-based smart home appliances, andmedical imaging diagnostics. Likewise, in the world of science andtechnology, AI has been used on a full scale in an attempt to quickly obtainnew knowledge. One example of this is Materials Informatics (“MI”).
With MI, by expressing various data that characterize a substance ascomputable descriptors and using machine learning, the structure of new
substances with the target properties can be inductively estimated. Thisapproach is also called the “fourth science,” and it is a promising method ofdramatically increasing the speed of technological development.
The SWCC Group has accumulated extensive data on conductor andwire coating materials in the course of developing wires and cables. By
combining these data and MI, we are engaging in reducing development
time and developing innovative materials that would have been difficult toachieve with empirical knowledge alone.
For example, in the development of plastic materials for extrusion,
exploration must be done to find the optimum combination of multiple
polymers and compounding agent types and quantities. Even expert
developers often need a long development time for this. However, in acertain study theme, by applying MI, it was possible to obtain a combination
satisfying the target properties from only several experiments and MI
analysis. In the development of organic materials for other applications, byapplying MI, the potential of an innovative rubber composite material was
found, which would have been difficult to achieve with the experience of thedeveloper.
This segment will continue making efforts to bring high added-value
products to the market faster by aggressively using MI.

Property A

Example of MI-based material exploration(exploration of a target area that satisfies the target
values of both Property A and Property B)**Data provided by MI-6 Ltd. (all rights reserved)

Reducing cable transmission loss by 95% or more and promoting a decarbonized society through advanced technology:“Efforts toward the practical use of superconductivity technology”
In order to reduce greenhouse gas emissions, it will be important to use
generated electric energy efficiently.
Vacuum insulation unit
SWCC Showa Cable Systems Co., Ltd. has worked to develop triaxial
superconducting cables with a compact shape that use only about one-thirdof the amount of liquid nitrogen compared with conventional
superconducting cables. If these are applied in plants that use large-scale
Terminal for triaxial
power of 30 megawatts or more, this can reduce cable transmission loss bysuperconducting cables
95% or more compared with conventional electric power cables.
This superconducting cable system has been developed since fiscal
LN2 pump
2017 as a business subsidized by the New Energy and Industrial
Technology Development Organization (NEDO), and a proof of concept
Subcooler cooling unit
and liquid nitrogen pumpbegan with one line provided at the BASF Japan Ltd.’s plant in YokohamaIntermediate joint
in 2019. The proof of concept test is scheduled to end in September 2021
after going through three seasons, including a cold winter, temperatespring, and hot summer. This is the world’s first proof of concept experiment introducing triaxial superconducting cables to an
actual system in a privately owned factory.
As the need to achieve a decarbonized society increases due to frequent abnormal weather, we will make efforts to put into
practical use this triaxial superconducting cable system, which can contribute to the efficient use of generated electric power.
25

SWCC Group ReportHistory and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

SWCC Group’s Growth Strategy

New Brand: SICOPLUS™

SpecialFeatureInitiative to expand the electric powerbusiness through connection work system(Energy and Infrastructure Business Segment)
OUR VISION
SWCC Showa Cable Systems Co., Ltd. has been providing a connection work
system including cables, device components, construction, and maintenanceprimarily to substations, centered around our strategic products, SICONEX®
connectors for high-voltage power cables. This connection work system will besold under a new brand called SICOPLUS™, which will add efficiency, laborsavings and sustainable personnel training programs to connection technology.
We will evolve this as a new connection work system and further accelerate
the expansion of the solutions business to connection work in the electric
power market, which is expected to grow in the future.

Hitoshi Shintate,
Head of Construction Personnel
Development Center, Power System
Department, SWCC Showa Cable
Systems Co., Ltd.

Background of introducing a new brand strategy
In an electric power market that is growing due to factors such as policies for electric power resilience and adecarbonized society, demand for SICONEX® high-voltage power cable connectors made by SWCC Showa Cable
Systems Co., Ltd. is robust, as these ❶shorten work time, ❷improve efficiency, and ❸have excellent seismic
resistance, all of which are required in high-voltage power cable connection work by power plants and substations.
Demand is expected to continue growing in this active market environment, so in February 2021, we decided to invest
to increase SICONEX® production capacity by 1.5 times and established a plan through fiscal 2025 that expands sales
by 1.5 times compared to fiscal 2017.
Meanwhile, in high-voltage power cable connection work, maintaining and strengthening construction capacity despite
the aging of skilled workers and the decreasing population of young workers is an urgent issue.
Therefore, we decided to address this issue by introducing a new brand strategy that will add streamlined connection
work technology, labor saving, and a sustainable personnel training program to conventional connection work systemand further advance it.

Establishment of the Construction Personnel Development Center, a training program for SICOPLUS™ connection technicians

PurposeBy adding value to our strategic SICONEX® products, SICOPLUS™ addresses the electric power market’s need tomaintain and strengthen construction capacity despite the aging of skilled workers and the decreasing population ofyoung workers.
With SICOPLUS™ connection technician training programs, by introducing a 4-step curriculum using DX educational
materials instead of on-the-job training programs that predominated in the past, we can train talented construction
personnel with basic academic skills in a short period of time. This cuts in half the training time before workers are able toengage in on-site connection work.
In July 2021, we established the Construction Personnel Development Center as an organization to promote the new
SICOPLUS™ brand. This Center not only solves the social challenge of passing on skills to the next generation, but also
plays a role in promoting increased construction capacity for the future.
The electric power market is expected to continue expanding and will demand maintained and increased construction
capacity. The SWCC Group will continue to address these social challenges in the electric power market through its new
SICOPLUS™ brand strategy.

Acquisition of SICOPLUS™ special high-voltage CV cable connection work skills(Begin education from zero → aim for short-term nurturing of work-ready technicians)

Educational curriculum

Step 2:
Step 1:

Use of DX educational
materials

Educational
videose-learning

VR experience

Acquisition of required
knowledge by engineers

Product knowledge:
Examples of defects

Step 3:Comprehensive training
and actual practiceEnvironmental
and safety
education

Actual practice in a simulated
cable tunnel

Step 4:On-the-job training
Actual practice on an actual job siteLine systemproduct design
Lectures onconnection
methods

Base design

Spiral up (short-term learning)

Stage 1
Sustainable
personnel
training

Step 1: Prepare to learn (preliminary education)
Step 2: Receive explanation of work
Step 3: Try it (practice)
Step 4: Review what has been learned

Stage 2275kV

Upgradeskills154kV
66/77kV

SWCC SHOWA HOLDINGS CO., LTD.

26

Efforts to Build a Business Foundation

SWCC Group’s CSR Efforts
CSR Basic Policy
On the axis of “trust” stated in our management philosophy, we aim to realize a sustainable society and improve corporate value
based on our accumulated technologies and experience in the business.

Solutions for Social Problems
We at the SWCC Group state as the first item of the management policy, “The SWCC Group shall give top priority to its
customers and provide them with products that are beneficial for society, environmentally friendly, good quality, and safety
conscious, and contribute to the development of society.” Accordingly, we are contributing to solving social challenges throughour business activities to boldly achieve our social mission.
ESG

7 Core Subjects of

CSR Basic Policy (Priorities)

ISO 26000

Contribution to environmental protection and sustainable social development
through business activities
Reduction of CO2 and VOC emissions

E(Environment)

Environment

Effective utilization of resources
Promotion of environmentally friendly product development and commercialization
Action for biodiversity

Human rights
Promotion of employee work-life balance and creation of a comfortable working
environment

Labor practices

Promotion of safety and health activities(Social)S
Consumer issues

Continuous improvement of the effectiveness of the quality management system

Community involvementand development

Contribution to environmental protection and sustainable social development
through business activities

Fair operating practices

Maintenance of and emphasis on good communication with stakeholders

Thorough compliance(Governance)

G

27

SWCC Group Report

Strengthening of cyber security measures

Organizational
governanceManagement and reduction of critical risks in business activities

Improvement in transparency through information disclosure

Relevance to SDGs

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

SWCC Group’s CSR Efforts

Currently, the Paris Agreement, an international framework to limit climate change, sustainable development goals (SDGs)
proposed by the United Nations, and other global efforts are underway to address serious global-scale problems such asenvironmental pollution and climate change. The SWCC Group links the CSR policy to the 17 SDGs and rolls out a variety of
initiatives to contribute to sustainable development of the environment and society through business activities.

<Level of achievement>
CSR Policy in the Mid-Term Management Plan

: Achieved: Partially achieved
Level ofachievementin FY2020

FY2020 activities○
Achievement of targets based on the Group’s voluntary environmental action
plan○
p. 30 Efforts to Conserve the Environment(Voluntary Environmental Action Plan)△

Expansion of environmentally friendly products and contribution to society
through products○

Expansion of action for biodiversity○

Promoting diversity to incorporate various perspectives○

Enhancing the mental and physical health of employees and promoting awork-life balance

p. 38 Employee Relations(Human Rights, Employment)○

Creating a comfortable working environment by offering a wide range ofworking styles○

Continuously improve productivity by automating operations and saving laborp. 39 Continuous Efforts to Improve Productivity by
Automating Operations and Saving Labor○

Promotion of proactive safety measures and elimination of occupational
accidents

p. 43 Employee Relations (Safety and Health Activities)△○

Continuous customer satisfaction surveys and feedback on our response
Continuous efforts to improve quality and achievement of quality cost targets

p. 33 Customer Relations (Quality Management)○○

To strengthen monitoring of the quality status of each Group company
Continuation and expansion of activities to actively engage with local
communities and become a reliable manufacturer

p. 44 Community Relations(Social Contribution Activities)○

Communication with clients through CSR Procurement Guidelines

p. 35 Supplier Relations (Supply Chain)○

Appropriate disclosure of financial information and enhancement of disclosureof non-financial information

p. 15 Financial/Non-financial Highlights○

Thorough legal compliance and strengthening of monitoring functions

p. 51 Risk Management (Compliance)○

Establishment and operation of a cyber security system

p. 50 Risk Management (Information Security)○

Risk reduction activities and improving effectiveness through business
continuity management (BCM)

p. 51 Risk Management (BCM)○

Continued compliance with the Corporate Governance Code and improvementof its effectivenessp. 45 Corporate Governance○

Establishment of Information Disclosure Guidelines and information disclosurep. 37 Shareholder and Investor Relations○

SWCC SHOWA HOLDINGS CO., LTD.

28

Efforts to Build a Business Foundation

Efforts to Conserve the Environment

Environmental Management■ Basic Idea
Based on its management philosophy to comply with all applicable rules and regulations, consider safety and the global
environment, and expand its activities to earn trust, the SWCC Group establishes its environmental philosophy, as well as annual
environmental policy and priority topics, and makes a group-wide effort to engage in environmental conservation activities.

Environmental Philosophy
The SWCC Group recognizes that it is a mission for the Group as a corporate citizen to pass on our precious Earth to
the next generation in a healthy state, strives to conserve the environment through all business activities, and contributes
to building a society capable of achieving sustainable development.

FY2020 Environmental Policy
1. We comply with laws, regulations and other requirements.
2. We will endeavor to continuously improve environmental management systems and environmental
performance.
3. We enhance education and awareness building to raise the environmental awareness of each employee.

FY2020 Priority Topics for Environmental Activities
1. Environmental conservation based on compliance with laws, regulations, ordinances, and other requirements,and stricter voluntary management standards
2. Achieving the targets of the 6th SWCC Group voluntary environmental action plan and initiatives addressing
medium- to long-term environmental targets
3. Enhancement and promotion of environmental education■ Organizational Structure for Promotion of Environmental Management
Environmental management of the SWCC Group is
promoted under the Group management council, and our
Safety, Environment, and Quality Oversight Office, which
serves as the environmental supervision department, rolls
out to each Group company through the Environmental
Management Working Group.
The Group’s environmental policy is developed by the
Safety, Environment, and Quality Oversight Office,deliberated by the Environmental Management Working
Group, and decided by the Group management council. The
Safety, Environment, and Quality Oversight Officeperiodically reviews the Group’s environmental management
activities, sustains and improves the entire Group’s
environmental management, and drives forward
environmental management activities in accordance withbusiness areas of each Group company and regional
characteristics of each site.

● ISO 14001 certification
Domestic
Overseas

SWCC Showa Holdings Board of Directors

SWCC Showa Holdings Environmental Supervision Department (Safety, Environmental, and Quality Oversight Office)Environmental Management Working Group Chairperson: Officer in charge of environmental supervision, Secretariat: Safety, Environmental, and Quality Oversight Office
Each Group Company, Site Environmental Management Committee

SWCC Showa Cable Systems (Head Office, Sagamihara, Mie, Sendai, Ibaraki, Aichi, Ebina, Watarida)
SWCC Showa Unimac (Sendai), Fuji Electric Cable, AXIO, SDS, SFCC

Operating departments of each company

Group company nameYear and monthof certification

Nov. 1997

AOMORI SHOWA ELECTRIC CABLE CO., LTD.

Oct. 2006

Sendai Office

Sep. 1998

STEC (SHOWA TECHNICAL CORPORATION)

May 2005

Mie OfficeNov. 1998

Aichi Factory

Sep. 1999

FUJI ELECTRIC CABLE CO., LTD.

Dec. 1999

SWCC SHOWACABLE SYSTEMS
CO., LTD.

Year and monthof certification● Eco Action 21 certification

Head Office, Sagamihara Plant, Ibaraki Factory, Ebina FactoryGroup company name

29

SWCC Group Management Council

SWCC SHOWA UNIMAC LTD. SENDAI FACTORY

Mar. 2001

SWCC SHOWA (VIETNAM) CO., LTD. (SVC)

Mar. 2008

JIAXING SHOWA INTERCONNECT PRODUCTS CO., LTD. (JSIP)

Oct. 2004

DONGGUAN SHOWA INTERCONNECT PRODUCTS CO., LTD. (DSIP)

Jan. 2009

FUQING SHOWA PRECISION ELECTRONICS CO., LTD. (SSD)

May 2008

SWCC SHOWA VIETNAM INTERCONNECT PRODUCTS CO., LTD. (VSIP)

Dec. 2019

FUTONG SHOWA WIRE & CABLE (HANGZHOU) CO., LTD. (FSH)

May 2013

SHOWA-TBEA (SHANDONG) CABLE ACCESSORIES CO., LTD. (STCA)

Dec. 2010

SWCC Group ReportHistory and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Efforts to Conserve the Environment

Voluntary Environmental Action Plan
■ Medium- and Long-Term Environmental Plan “Green Plan 2050”
The company aims to create a sustainable society, for example, by supporting the Paris Agreement and contributing to SDGs. We
have established a long-term vision and set 2030 targets based on the key concept of zero environmental impact in 2050. In orderto realize this vision, we set specific targets for each goal in the voluntary environmental action plan. For the achievement of these2030 targets and the realization of this long-term vision, we are promoting innovation in our internal infrastructure from various
perspectives, and we are pursuing studies that consider both the environment and economic viability. Specifically, we will divide
them into three categories, namely, further promotion of the reduction of CO2 emissions and energy conservation (low fuelconsumption, power saving) in manufacturing processes including the development of new technologies, as well as energy
conversion at plants, and we will address issues through Group-wide projects.
120

Zero environmental impact

100

2050

80

Long-Term Vision (2050)

60

Global warming
prevention

40
20

▪▪

0

Baseline year

▪

2025

2030

CO2 emissions
Final disposable volume
Water consumption and wastewater volume

FY

Effective use ofresources
Effective use of water resources

Realize products that do not emit
CO2 or carbon neutral products
Create products that resolve
environmental issues
Promotion of sustainable use ofresources
Achievement of zero final disposal(landfill) volume
Promotion of sustainable use ofwater resources■ 6th Voluntary Environmental Action Plan (FY2016-FY2020)
The SWCC Group established the 6th Voluntary Environmental Action Plan in fiscal 2016 and made efforts to improve the Group’s
environmental performance in a 5-year initiative through fiscal 2020. The targets of the 6th Voluntary Environmental Action Plan
and their level of achievement are as follows:
Environmental goal

Category

Attainment target

ResultAssessment

Global warming
prevention

Energy savings(CO2 reduction)

Reduce specific energy consumption by at least
5% by FY2020, compared to the reference value*1

8.9%

○

Reduction of waste
discharged

Reduce waste discharge per unit of production
by at least 5% by FY2020, compared to thereference value*1

8.8%

○

Promotion of zero
emissions

Maintain zero emissions at all production sites

Achieved at
7 sites△

Effective use ofresources

Enhancedmanagement ofchemical
substances

Reduction of VOCs*2
released into theatmosphere
Reduction of VOC*2
atmospheric release
rate

Reduce the amount of VOCs released into theatmosphere by at least 14% by FY2020,
compared to the reference value*1

44%○

Reduce the VOC atmospheric release rate to 5%
or less by FY2020

6.1%

－*

Expansion ofenvironmental
contribution products

Expansion ofenvironmental
contribution products

Work to expand registration of environmental
contribution products

Conservation of
biodiversity

Conservation of
biodiversity

Promote green conservation and greening topromote efforts that reduce the load on theecosystem

61 registeredproducts(5 years)
Promotion of regional
symbiosis and ecosystem
protection activities

3○○*1 Reference value: Average of results from FY2010 to FY2014 *2 VOC: Abbreviation for Volatile Organic Compounds*3 Included in the targeted amount released into the atmosphereWith regard to the promotion of zero emissions, since fiscal 2018, due to restrictions on the import of waste imposed by Asian
countries such as China, the final disposal (landfill) volume of industrial waste increased at some sites, and the target was notachieved, but plastic waste heat recovery progressed, and the landfill rate improved in FY2020.

(

See p. 16 Non-financial Highlights

Industrial waste landfill rate)

SWCC SHOWA HOLDINGS CO., LTD.

30

Efforts to Build a Business Foundation

The following graphs show specific energy consumption and waste discharge volume per unit of production, which are important
indicators. Specific energy consumption had been on a declining trend since fiscal 2018 due to updating to energy-saving
equipment and increased production efficiency, but in fiscal 2020, it increased due to lower production volume caused by the
COVID-19 pandemic. In addition, waste discharge volume per unit of production had remained rather flat since 2017, but infiscal 2020, it decreased due to lower production volume and more effective use of materials owing to improved production
efficiency.

● Trend of waste discharge volume per unit of production● Trend of specific energy consumption
0.21

0.060

0.20
0.055
0.19
0.18

0.050

0.17
0.045
0.16
0.15

2012

2013

2014

2015

2016

2017

2018

2019

2020 FY

0.040

2012

2013

2014

2015

2016

2017

2018

2019

2020 FY■ 7th Voluntary Environmental Action Plan (FY2021-FY2025)
The SWCC Group established a new 7th Voluntary Environmental Action Plan and started a 5-year initiative from fiscal 2021.
Based on this plan, we will pursue business and environmental activities that give higher consideration to SDGs, as well as
address social issues.
This new 7th Voluntary Environmental Action Plan is based on past results, but also looks forward to the Green Plan 2050, a
medium- to long-term environmental plan aiming for zero environmental impact in 2050.
The 7th Voluntary Environmental Action Plan, which applies to all of the Group’s business locations in Japan, classifies goals
into the categories of global warming prevention, effective use of resources, effective use of water resources, and other, and foreach category, it outlines management items and attainment targets or indices for the final fiscal year.
Environmental goal

Activity

Global warming
prevention

Energy savings(CO2 reduction)

Reduce CO2 emissions (Scope 1 + Scope 2) by 25% by
FY2025, using FY2013 results as a reference.

Reduction of waste
discharged

Reduce the amount of waste discharged at all sites by 5%
by FY2025, using FY2018 results as a reference.

Promotion of recycling ofresources

Reduce the final waste disposal (landfill) volume at all 10
production sites by 50% by FY2025, using FY2018 results asa reference.

Reduction of plastic usage

Based on “Plastic Usage Guidelines.”

Reduction of water usage

Reduce the amount of water usage by 20% by FY2025,
using FY2018 results as a reference.

Reduction of the use ofhazardous chemicals

Based on “Green Procurement Guidelines.”

Effective use ofresources

Effective use ofwater resources

Other

Expansion of environmental
Based on “Environmental Contribution Product Guidelines.”
contribution products
Contribution to biodiversity

31

SWCC Group Report

Attainment targets or indices

Based on “Biodiversity Conservation Guidelines.”

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Efforts to Conserve the Environment● Environmental goal: Global warming prevention

We will work to reduce CO2 emissions through energy conservation. We will improve/update aging equipment and use
electricity generated with renewable energy in an effort to reduce CO2 emissions.

● Environmental goal: Effective use of resources

We will work to promote resource recycling by reducing waste discharge volume and reducing final waste disposal(landfill) volume. In addition, in the Action Plan, we have established an index of the reduction of plastic usage by Plastic
Usage Guidelines. The SWCC Group uses many plastics in materials constituting wires, cables, and accessories and inpackaging to protect products. In order to reduce plastic usage, we believe it is important to minimize usage at all stages
from design to manufacturing and packaging to minimize final disposal (landfill) volume. We will inform the entire Group
about this belief, work on measures in each operating department, and endeavor to use resources effectively.

● Environmental goal: Effective use of water resources

Under the 7th Voluntary Environmental Action Plan, we will newly look at water resources and work toward sustainable
water usage. As a measure for this, we will promote the circulation of cooling water and wash water, and make an effort
to use water resources effectively.

● Environmental goal: Other

As other goals, we will address reduction of the use of hazardous chemicals, expansion of environmental contribution
products, and contribution to biodiversity.
In terms of reducing the use of hazardous chemicals, we will advance the monitoring of VOC emissions which we havebeen conducting and make an effort to reduce them, and stringently manage the controlled chemicals listed in our Green
Procurement Guidelines (see https://www.swcc.co.jp/hd/company/material.html).
In terms of expanding environmental contribution, we will promote the development of products that satisfy thedefinitions in the Environmental Contribution Product Guidelines. An environmental contribution product is a product thatsatisfies at least a certain number of environmental considerations and is internally certified after determining, during a
product environmental assessment, that it is able to reduce the load on the environment at every product stage, including
raw materials, manufacturing, use, recovery, dismantling, and waste.
In terms of contributing to biodiversity, we will promote environmental activities in accordance with the Biodiversity
Conservation Guidelines. The guidelines are as follows:
Biodiversity Conservation Guidelines① We will promote efforts to minimize the effects that water discharge, exhaust air, emissions, and so forth produced in business activities
have on the ecosystem.
② We will endeavor to effectively use and reuse limited resources.
③ We will promote efforts to collaborate with external organizations such as local public entities and private sector groups on conserving
biodiversity.
④ We will promote green conservation by offices, plants, communities, and households.

TOPICS

Obtained Highest Rating in the DBJ Environmentally Rated Loan Programfrom the Development Bank of Japan for Second Straight Year

The SWCC Group obtained the highest rating in the DBJ Environmentally Rated Loan Program offered by Development Bank ofJapan Inc. as a company “with exceptionally advanced environmental initiatives.” This is the second straight year that the Groupobtained this rating.
In this rating, following initiatives were highly evaluated.
1. The Group as a whole has created an environmental management system, and through consistentimprovement activities using environmental impact and monitoring, we are implementing soundenvironmental management based on the Voluntary Action Plan, including reduction of environmental
impact and increases in productivity, and expansion of environmental contribution products that meetcertain conditions such as SICONEX® high-performance electric power parts
2. We created a new organizational structure for promotion of CSR, which is centered around the CSR
Promotion Department under the management level, and we are furthering CSR management, for
DBJ Environmentally
example, by issuing an integrated report starting in fiscal 2020 and informing a wide range ofRated Loan Program
stakeholders about our efforts to resolve social challenges through business2020
3. In addition to introducing the sustainability viewpoint to our evaluation standards for improvement
activities, we are steadily promoting efforts to increase CSR awareness among individual employees,
such as setting opportunities for CSR Promotion Department to explain the integrated report toemployees

SWCC SHOWA HOLDINGS CO., LTD.

32

Efforts to Build a Business Foundation

Relations with Society

Customer Relations (Quality Management)■ Basic Idea
Based on its management philosophy to deepen the relationship of trust with customers through offering superior technology
and high-quality products and services, the SWCC Group establishes a quality policy and priority topics annually, and makes
group-wide efforts to improve quality.

FY2020 Quality Policy
1. Thoroughly comply with laws and regulatory requirements.
2. Achieve rapid technological development, services and manufacturing that put the customer first.
● Fully demonstrate the Group’s sales capabilities, share customer needs throughout the Group without fail, andpropose new services based on a collaboration between sales, engineering, and manufacturing divisions.
● Achieve manufacturing that prioritizes quality customers can trust.
3. Carry out quality assurance activities to ensure all stakeholders are satisfied, including customers,
employees, and the local community.

FY2020 Priority Topics in Quality Assurance Activities
1. Maintain and improve our quality management system that is trusted by customers.
(Implement a PDCA cycle based on efforts to address risks and opportunities.)
2. Continue and strengthen initiatives to mitigate failure costs from the previous fiscal year.
(Make effective improvements in processes to reduce external complaints and in-process nonconformities.)
3. Achieve manufacturing with stable quality in all processes from the inquiry and order stage to delivery.
(Achieve manufacturing and services that utilize cutting-edge technology and combine AI, IoT, and TOC (Theory ofConstraints).)
4. Carry out talent development to pass on and advance high-quality manufacturing expertise.

■ Organizational Structure for Promotion of Quality Management
Quality management of the SWCC Group is promoted under
the Group management council, and our Safety,
Environment, and Quality Oversight Office, which serves as

SWCC Group Management
Council

SWCC Showa Holdings
Board of Directors

the quality supervision department, rolls out to each Group
company through the Quality Control Working Group.
The Group’s quality policy is developed by the Safety,
Environment, and Quality Oversight Office, deliberated by

SWCC Showa Holdings Quality Supervision Department (Safety,
Environmental, and Quality Oversight Office)the Quality Control Working Group, and decided by theGroup management council. The Safety, Environmental, andQuality Oversight Office periodically reviews the Group’s
quality management activities, sustains and improves the

Quality Control Working Group
Chairperson: Officer in charge of quality supervision, Secretariat: Safety,
Environmental, and Quality Oversight Office

entire Group’s quality management, and drives forward
quality management activities in accordance with thebusiness areas of each Group company.

Quality control supervision departments of each group company
SWCC Showa Cable Systems, SWCC Showa Unimac
Fuji Electric Cable, AXIO, SDS, SFCC

Operating departments of each company

33

SWCC Group ReportHistory and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Relations with Society■ Initiatives to Mitigate Failure Costs
The SWCC Group implemented a quality cost approach in fiscal 2018 and has● Failure costs of domestic Group companies
been carrying out quality improvement initiatives ever since. “Quality cost” consists(with FY2017 as 100%)120
of preventative costs to prevent nonconformities, assessment costs to evaluate
100
conformity, and failure costs that incur when there are quality problems (i.e.,
100
91
nonconformities) in products and services that do not meet requirements. The
80
approach aims to optimize the structure of costs that have incurred and improve
67
60
quality.
52
In fiscal 2020 we carried out activities with the aim of reducing failure costs by
40
10% compared to fiscal 2019, and achieved a 22% reduction. Looking at the break20
down of failure costs, external failure costs were 15% higher than in fiscal 2019
due to the impact of customer complaints that occurred outside the company, but
02020 FY
2017
2018
2019
thanks to thorough measures to prevent the recurrence of internal nonconformities,
we reduced internal failure costs caused by in-process nonconformities that occurred internally by 29% compared to fiscal 2019.
In fiscal 2021 we will strengthen efforts to eradicate external complaints in order to reduce external failure costs caused byexternal complaints. Specific measures consist of “strengthening efforts to eradicate complaints (by carrying out and reviewing
FMEA on products that have received complaints),” “developing talent to pass on high-quality manufacturing expertise,” and“improving the effectiveness of the quality system.” And we will strive to reduce internal failure costs caused by in-process
nonconformities even further by continuing and strengthening current measures to reduce failure costs.

■ Quality Compliance Initiatives
On April 1, 2021, the company established the Safety, Environment, and Quality Oversight Office – an organization that deals insafety, environment, and quality under the direct control of the President. The organization has a function to facilitate quick
decision-making and actions to enhance, maintain, and improve monitoring functions and cooperation between the top
management and operating departments.
Regular internal audits are carried out under the Safety, Environment, and Quality Oversight Office to ensure quality
compliance. The audit team is composed of independent auditors appointed from operating departments. It continuously andexhaustively audits Group companies and operating departments within and outside Japan. As part of the measures to preventthe spread of COVID-19, the audit for the fiscal 2020 was carried out based on a written survey as a follow-up for the audit that
had been carried out up to the previous fiscal year, but in fiscal 2021, in response to the inconsistencies in quality testing thathave been revealed, we will improve the accuracy of audits and carry out the audit in combination with on-site surveys.

■ Showa Improvement Activity Presentation
The SWCC Group has been engaging in manufacturing and talent development as part of Showa Production System (SPS)
activities since 2007. Leveraging the stable foundation that we have built through these activities, we are moving forward,
utilizing TOC, to improve and transform operations. The activities are carried out with a top-down approach with a focus on
talent development. And we are tackling major topics by continuing staff-led, cross-organization Showa Innovation (SI) Project
activities.
In order to help improve quality and increase productivity of the SWCC Group, boost employees’ awareness, and increase thesophistication of activities, twice per year we hold an event to present the achievements of activities by workplace circles andimprovement projects selected from our overseas and domestic sites. The best
achievements are reported at companywide conferences and implemented in otherareas.
The Showa Improvement Activity Presentation in fiscal 2020 was held online toprevent the spread of COVID-19. In the second online presentation of the year,
which was held in the second half, two teams from outside Japan and 10 teams
from Japan participated after taking part in a global preliminary competition.
The teams’ presentations were judged by a qualified panel of judges andawarded a Grand Prize, Transformation Prize, and Business Management Prize.
At the last presentation, the team from SWCC Showa Cable Systems’ Ibaraki
Award-winning team at the 2nd Half FY2020
Factory won the Grand Prize, and the team from SWCC Showa (Vietnam) won
Showa Improvement Activity Presentation:
both the Transformation Prize and Business Management Prize.
SWCC SHOWA (VIETNAM) CO., LTD.

SWCC SHOWA HOLDINGS CO., LTD.

34

Efforts to Build a Business Foundation

Supplier Relations (Supply Chain)■ Basic Idea
The SWCC Group develops its Procurement Policy and endeavors to establish a good cooperative relationship with suppliers toprovide a stable supply of value-added products.

SWCC Group Procurement Policy
The SWCC Group shall
1. Comply with all applicable laws and regulations along with appropriate social practices, as well as engage
in fair and equitable transactions.
2. Give top priority to mutual trust with its suppliers and establish a relationship where each is the best
partner for the other.
3. Appreciate stable quality and delivery times, with continued efforts to reduce costs and a constantcapacity for technological development.
4. Procure earth conscious materials.
5. Never accept any inappropriate favors from suppliers.

■ CSR Questionnaire
Based on societal demand, we put together the basic idea of social responsibility that should be fulfilled together with suppliers
and our requests as the CSR Guidelines for Supply Chain.
The SWCC Group conducts a survey on major suppliers regarding their level of compliance with the guidelines. The survey
consists of distributing questionnaires with a total of 53 questions evaluated on a 5-point scale on suppliers’ level of compliancewith the CSR Guidelines for Supply Chain and their efforts toward their raw material sources.

●CSR Questionnaire Results
Duration of survey

May - June 2021

Target123 suppliers

Return rate

94% (116 suppliers)

No. of questions

53

Average score (on a 5-point scale)

4.42 pts

Analysis of the questionnaire revealed that 81% of
suppliers are of the level sought by the SWCC Group (i.e.,
have a grade of A or higher) in the overall evaluation.
When analyzing by individual questions, “Response toantisocial forces” scored highest, with all suppliers
attaining close to the top score. However, challenges
remain in “response to the international community,” “BCM
initiatives,” and “supply chain CSR promotion (suppliers’
efforts toward raw material sources).”
Next, we will examine the results of the survey in moredetail, and then give feedbacks to suppliers on the results
and conduct interviews with them to gain a more precise
understanding of their circumstances. Especially withthose suppliers with B and C grades, we will provide
support for improvement, and have them establish a PDCA
cycle, and thereby instill our CSR procurement policy andimprove their level in cooperation with such suppliers.
The SWCC Group will continue conducting the CSR
survey and engaging in efforts to build a sustainablesupply chain, which includes addressing the abovementioned challenges.

35

SWCC Group Report

C: 1%(1 supplier)

Percentage breakdown by grade

B: 18%(21 suppliers)

▪
▪
▪
▪

Respondents: S: 51%

116 suppliers(59 suppliers)

A: 30%(35 suppliers)

S (score of 90% or more)
A (80% or more)
B (60% or more)
C (under 60%)

Average scores by category
11. Supply chain CSR promotion(efforts toward raw material
sources)
10. BCM efforts

1. High-quality and safe manufacturing
5.00
4.50
4.00
3.50
3.00
2.50

9. Response to theinternational
community
8. Response to antisocial forces

2. Compliance with laws andregulations
3. Respect for humanrights and individual
differences
4. Fair trade

5. Relations with politics,
government and the
local community
7. Environmental 6. Appropriate and timely disclosure/conservation
management of the corporate
information

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Relations with Society■ Green procurement
Recognizing that it is a fundamental duty of humans living today to pass on our precious Earth to the next generation in ahealthy state, we do our best to make purchases that pay due consideration to this need in our material procurement activities,
and have formulated and released Green Procurement Guidelines to prioritize purchasing products with the smallest impact on
the environment as possible. Furthermore, through our website we put out an open call for proposals for environmentally friendly
products as follows:
1. Products and packaging that consider the following throughout the entire product lifecycle (from resource extraction todisposal).
● Reduction of environmental pollutants● Conservation of resources and energy● Reusability● Recyclability● Use of recycled materials● Ease of disposal
2. Dissemination of information● New environmental technology● Presentation of specific efforts■ BCP Measures in Procurement
Factors such as worldwide disruptions in logistics due to the recent COVID-19 pandemic and natural disasters throughout Japan
have changed the environment surrounding materials procurement, but we are accumulating knowledge by addressing thesechanges and striving to achieve more stable procurement and logistics.
One example is creating a “procurement map” that shows suppliers’ production sites. It helps us respond quickly and consider
alternative materials to procure when a disaster occurs. We work with manufacturing and sales departments to identify “keyproducts,” and every few years we revise the supply system to ensure materials used in those products can be purchased frommultiple regions.

■ Optimization of Logistics
The SWCC Group is moving forward with initiatives to mitigate environmental impacts in logistics. Leveraging our strengths ofhaving a company that specializes in logistics within the Group, we consider the optimal logistics methods. Examples include
utilization of empty runs going to pick up materials at suppliers’ warehouses and empty return runs, and transporting bulk cargo
by rail when shipping to distant locations to minimize the impact on the environment.

Logistics optimization example

SWCC SHOWA HOLDINGS CO., LTD.

36

Efforts to Build a Business Foundation

Shareholder and Investor Relations■ Information Disclosure Policy
To be a company correctly understood, evaluated, trusted, and sympathized with by all stakeholders, including shareholders andinvestors, the SWCC Group has developed the Disclosure Policy to actively disclose information.
The Group discloses information in accordance with the Financial Instruments and Exchange Act, as well as the Rules on
Timely Disclosure of Corporate Information by Issuers of Listed Securities (hereinafter referred to as the “Timely Disclosure
Rules”) established by the Tokyo Stock Exchange. In addition, information that affects investment decisions by shareholders andinvestors is actively disclosed on a constant basis in accordance with the Group’s “SWCC Group Rules on Information
Disclosure,” even if the information is not subject to the Timely Disclosure Rules. We strive for fair and timely information
disclosure by avoiding selective disclosure of unpublished important information to a specific institution or individual.

■ Organizational Structure for IR
In the SWCC Group, the executive officer responsible for the management strategy and planning department also serves as theexecutive officer in charge of IR.
Led by the executive officer in charge of IR, dedicated IR staff in the management strategy and planning department serve as
the contact personnel and exchange information and routinely cooperate with finance and accounting, legal, and CSR
departments as necessary. The Group thus strives to enhance dialogue with shareholders and investors.

■ Dialogue with Shareholders and Investors
The company convenes the Ordinary General Meeting of Shareholders in June and hears shareholders’ opinions. The Groupalso strives to distribute financial information and press releases through newsletters for shareholders and the website.
For investors, briefing sessions for analysts are held and videos are distributed twice a year (at the end of the second quarterand fiscal year). In addition, the Group strives to facilitate communication between a larger number of investors and ourmanagement by holding small meetings four times a year (every quarter).

The 125th Ordinary General Meeting of Shareholders

37

SWCC Group Report

Briefing session for analysts

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Relations with Society

Employee Relations (Human Rights, Employment)■ Efforts to Support the Development of the Next Generation
The Group has developed several programs for employees with or expecting children to
create an environment that makes it easy for them to balance work and parenting toenable them to demonstrate their full potential.
Among the companies that formulated an action plan for business owners in accordancewith the Act on Advancement of Measures to Support Raising Next-Generation Children,
those that have achieved the targets in the plan and fulfilled certain standards will obtainthe “Kurumin” mark, a certification from the Minister of Health, Labour and Welfare, as acompany that supports the raising of children. Following the acquisition of the “Kurumin”
mark by our Group company AXIO Corporation in 2018, SWCC Showa Cable Systems
Co., Ltd. also obtained the mark in 2020.
The company’s action plan for business owners is as follows.

● The 8th Action Plan for Business Owners (for FY2021, FY2022)* Adopt a flextime system for short-hour workers raising children or providing nursing care for a family member* Extend the period restricting working nights for employees raising children* Increase the maximum number of days to take leave to care for a sick child or provide nursing care for another family member
In addition, we will continue to hold time management committee meetings and encourage employees to take planned annual
paid leave to reduce overtime work.

■ Efforts for Health and Productivity Management
Health and productivity management is a new management initiative that aims to improve corporate value and businessperformance by giving consideration to the health of employees. The concept of the initiative is to consider health managementfrom a management perspective and strategically put it into practice.
Maintaining and improving the mental and physical health of employees can lead to enhancement of the company’scompetitive strength through improvement in labor productivity and in employee’s creativity by securing a heathy and stable
workforce. Thus, in April 2019, we formulated the SWCC Group health management declaration and disclosed it publicly on our
website. The SWCC Group actively engages in activities to support health as the foundation to creating an environment thatenables every employee to have rewarding jobs and work energetically with healthy minds and bodies.
Specifically, we are engaging in health and productivity management efforts by strengthening cooperation with the SWCC
health insurance association and establishing a group-wide health management organization system that is led by the President.
We have identified issues such as health guidance, passive smoking, infectious disease prevention, overworking, and mental
health, and are moving forward with a wide range of activities to support the health of employees in collaboration with industrial
physicians and public health nurses. In recognition of these efforts, SWCC Showa Holdings Co., Ltd. and SWCC Showa Cable
Systems Co., Ltd. have been certified as a Health & Productivity Management Outstanding Organization 2021 (large enterprise
category) jointly selected by the Ministry of Economy, Trade and Industry and the Nippon Kenko Kaigi.
This certification is to honor corporations that are practicing particularly good health management by “visualizing” good
corporations engaging in health and productivity management, with the purpose of creating an environment where corporations
are recognized socially by employees, job applicants, related companies, financial institutions, and others.

● SWCC Group’s Organizational Structure for Promotion of
Health and Productivity Management

Organization that heads the Group
Group Management Council
Issues directions
on policy

Sharesinformation

Proposes initiatives

SWCC health insurance association
Issues directions
on policy

Advises/reports

Safety and Health Working Group
Issues directions
on policy

Organization that heads health insurance association
Reports activities

Health Management Promotion Committee
Collaborates

Proposes initiatives

Reports activities

Safety and Health Committee of each region/company
SWCC Group employees

SWCC SHOWA HOLDINGS CO., LTD.

38

Efforts to Build a Business Foundation

Fiscal 2020 was also a year of taking measures against COVID-19. Based on the SWCC Group Emergency Measure Rules
and the Novel Influenza Prevention Manual, we implement exhaustive COVID-19 prevention measures while taking into
consideration policies of the Group CEO-led Response Center, announcements about characteristics of the novel coronavirus,
information from other countries, and instructions from the national and local governments in Japan. In order to ensure we cancontinue business as a company that is involved in maintaining the social infrastructure, we are working to prevent COVID-19
clusters at the workplace by actively carrying out infection prevention measures to the extent possible. Specifically, we practiceself-imposed curfew when a state of emergency is declared, proactively hold online meetings, expanded eligibility for staggered
working hours and teleworking at the head office, branches, and sales offices, and strive to eliminate the 3Cs (Closed spaces,
Crowded places, Close-contact settings) on the manufacturing floor.
The SWCC Group’s FY2020 initiatives are as follows.
[Efforts on work style reforms]
We have been driving efforts to improve the operational efficiency of each department in line with reforms to the personnel
system, and working to achieve work-life balance for employees and improve productivity of the company.
[Change in awareness to improve health]
We have expanded health services to raise the health awareness of everyone, support healthy activities, and created anenvironment that enables everyone to work healthily and with peace of mind.
[Promoting provision of health guidance]
We have tried to improve our employees’ health through measures including provision of health guidance, based on the
results of reexaminations and close examinations after regular health checks.

■ Continuous Efforts to Improve Productivity by Automating Operations and Saving Labor
The SWCC Group is moving forward with efforts to lighten workloads and improve productivity by automating operations andsaving labor in order to accommodate the decrease of the workforce and work style reforms.
In October 2019 we launched the IoDBR project with the aim of building a smart factory that combines AI, IoT, and TOC(Theory of Constraints). We had already been working to convert manufacturing floors into smart factories, but after considering
our current state in terms of what is best for the entire Group, we realized it would be more effective to roll out three Group-widemeasures that encompass everything from sales to logistics: staff minimization, network connectivity, and digitalization. In fiscal
2020, we moved forward with centralizing information for everything from sales to logistics departments, deliberating on
improving operational efficiency by accumulating and utilizing digital data, utilizing AI, digitalizing records of manufacturing floor
work, and robotizing assembly. In fiscal 2021, we will discontinue the IoDBR project to drive activities, and evolve it into the next
step by launching the Digital Innovation Promotion Office and kicking off a project to digitally transform our coated wire businessto further automate operations and save labor.

Save labor by installing robotics

Fully unmanned automatedmanufacturing line

July 2020 (at Ebina Factory)

Aim for the ultimate final form

Fully unmanned part of the
precision devices factory

Level

1

Digitalization

April 2020 (at Ibaraki Factory)
Centralized management of digital
data from sales orders to shipping

Level

2

Network
connectivity

Level

Level

3

4

Cloud
computing

Develop the next generation of talent to expand this companywide.
Various reform projects are spreading throughout Group companies.

39

SWCC Group Report

Level

5

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Relations with Society■ Diversity Management
The SWCC Group aims to be an organization that flexibly accepts and capitalizes on diverse personalities of employees suchas different attributes and working conditions. We recruit diverse human resources with different backgrounds.
As the labor shortage is expected to worsen due to the decline in the workforce, we will further work on measures tostrengthen our organizational capabilities while taking advantage of our diversity.

● Programs for Senior Employees

While Japan’s birthrate is declining and its population aging, we operate our senior employment program to provide
workplaces for those who are willing to keep working after retirement. Recognizing the need to maintain and improve
motivation to lead to more active participation, in fiscal 2021 we increased career patterns and expanded options toaccommodate diverse work styles by creating multiple career patterns that take into account roles and duties besides theexisting senior employment program.
Career patterns❶ Standard Senior Program (for managerial track employees, skilled workers, and clerical staff):
Standard course for employees who wish to be reemployed after reaching the retirement age of 60, upon agreement
between the company and employee❷ Specialist Program (senior management and senior experts; for managerial track employees, management, and equivalent): ... New program
Course for professionals with outstanding managerial capabilities and/or specialized knowledge and experience❸ Short-time work, for which second job is permitted (for managerial track employees, skilled workers, and clerical staff): ... New program
Course with reduced working hours that permits employees to take a second job for those who wish to broaden theirhorizons❹ Career Change Support Program (for managerial track employees): ... New program
Course that provides support to establish a life plan for employees who choose to retire and start a second life, suchas starting their own business or becoming reemployed● Female Empowerment

In line with the basic principles of the Basic Act for Gender Equal
Society and the Act on the Promotion of Female Participation andCareer Advancement in the Workplace, we launched the Female
Empowerment Project in fiscal 2021. Directly under the control of
the President, the purpose of the project is to drive initiatives toensure that female employees can fully demonstrate theirindividuality and capabilities, and participate even more actively
in the workplace.
As part of the project, we distributed a questionnaire to female
employees in Group companies to hear how they really feel.
Based on the results, we will deliberate on changing the mindsetof female employees and on facilitating initiatives to achieve thedesired participation of women in the workplace.

VOICE(Female Empowerment Target)
By FY2026, achieve:● 8% women in management
positions, and● 10% women in section leader
level and higher positions

Interview with the Female Empowerment Project Manager

Rie Inuki, Female Empowerment Project Manager, SWCC Showa Holdings, Co., Ltd.

I was appointed leader of the Female Empowerment Project which launched in April 2021.
I am committed to both my job as accounting section leader of SWCC Showa Cable
Systems Co., Ltd., and my role as a mother of two.
The empowerment of women is an important issue in diversity and inclusion, which the
SWCC Group needs in order to incorporate a variety of views and evolve. I will promotewomen’s empowerment with the cooperation of other project members and relevant
departments.

SWCC SHOWA HOLDINGS CO., LTD.

40

Efforts to Build a Business Foundation

SpecialFeatureInitiatives in Talent Development — Next Generation Business Leader Succession Plan

In this age of VUCA (Volatility, Uncertainty, Complexity, Ambiguity), changes are occurring in the environment surrounding
everything including society, the business environment, the market, organizations and individuals, and it is difficult to foresee thefuture. Based on the idea that the power of employees is the power of the company, the SWCC Group operates education andtraining programs with the aim of developing talent that can respond flexibly and solve problems, and above all is trusted bystakeholders, in such times.
We believe that in this VUCA era it is important to have leaders that take initiative. Therefore, we have formulated the SWCC
Next Generation Business Leader Succession Plan to ensure the sustainable growth of the SWCC Group and maintain andbuild a solid management structure that looks toward the medium to long term.

■ SWCC Next Generation Business Leader Succession Plan

The SWCC Next Generation Business Leader Succession Plan is composed of the following three parts.
1 Ideal SWCC officer
Taking into account our management philosophy, management strategy, and current trends, the ideal SWCC officer is
as follows.
Ideal SWCC officer (overview)
Relation building

Vision●Ability to come up with creative ideas that looktoward the future●Global perspective●Broad perspective and foresight●High sensitivity to information●Intense intellectual curiosity●Healthy ambition and aspirations●Communication skills to build relationships●Ability to express their vision and develop talent●Attentive to others, broad-minded, accepting of diversity●Wide network of contacts and networking skills●Listening, questioning, and speaking skills

Ability to make decisions
and take action●Ability to lead an organization

Mindsetby example●Willingness to take on challenges without fear of change or risks●Passion and exceptional agility to lead organizations●Unshakeable resolve to be a leader●Values trust and is always fair and sincere●Ability to involve those around them
●Quick and steadfast
decision-making skills●Ability to respond flexibly to change●Ability to enact change●Ability to follow through to the

Knowledge and skills

end with everything●Logical thinking and analytical skills and insight●Negotiating, coordination, persuasion, and linguistic skills●Presentation skills●Business management, liberal arts

2 Next generation business leader selection process
The process applies to two types of candidates: “next generation business leaders” and “future leaders.” Next generation
business leader candidates represent a pool of talent that shows promise to be entrusted to run a Group company now.
Future leaders represent a pool of talent that show promise to be selected to be next generation business leader
candidates in the next five years or so.
Candidates for the next fiscal year are nominated by the Group CEO by the end of the current fiscal year and chosen
by the Nominating Committee.
3 Next generation business leader development process
The following training programs are offered to develop next generation business leaders.
❶ SD Seminar (Showa Director's Seminar, a business management seminar taught by directors)❷ Future Leader Training❸ Next Generation Business Leader Training❹ Cross-industry Networking Training
Since 2017 the SD Seminar has been held for select young employees who
have been nominated by the business segment chief and approved by theGroup CEO. It is a hands-on training program by a cross-sectional team withmembers from different Group companies and organizations as a place forreforming the Group’s corporate culture, fostering a sense of belonging to theGroup, and strengthening individual capabilities. Since it has been difficult tohold in-person training sessions due to COVID-19 prevention measures,workshops are being held online.
The other programs are taught by internal instructors while also actively
incorporating outside perspectives.

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SWCC Group Report

SD Seminar

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Relations with Society■ Training Programs

The concept of diversity—to utilize people with a diverse range of values and backgrounds—is important in the age of
VUCA. We believe that gathering diverse people in an organization and fostering a culture where people accept diverse
values enables the organization to respond to Volatility, Uncertainty, Complexity, and Ambiguity and easily bring aboutchange. Therefore, we hold training programs by a cross-functional team with members from across the Group.
SWCC Group training programs are divided into three areas and implemented across all departments. The programs
are designed based on the Theory of Constraints management philosophy of overall optimization to foster the ability tothink logically, solve problems, and achieve tasks.

●Rank-based training

The rank-based training is provided for new employees, mid-level employees, chiefs, and supervisors. It instills theknowledge, attitudes, and skills needed for new employees, mid-level employees, and chiefs to move on the next level
while considering how to increase effectiveness.
For those in the rank of supervisors, training is provided for them to enhance their knowledge and skills related toorganizational and human resources management.

●Selective training

In addition to the Next Generation Business Leader Succession Plan, we provide other selective training programs togrow the organization and individuals such as Management Game (MG) Training and the Business English Improvement
Program.

●Liberal arts training

It is also important to raise the level of the Group as a whole through the training of individual employees, and we attach
importance to training for the betterment of each individual as well.
Specifically, we provide employees with opportunities to participate in externally held sales training courses mainly foryoung sales representatives and offer specialized knowledge acquisition courses to pass on skills related to electricity,
production technology, and materials. Former employees of the SWCC Group are invited to teach the course. It is thesecond year to be offered, including the training of instructors. Offering the course online has enabled employees to takeit without having to travel to different offices and increased the number of participants.

VOICE

Comments from a SWCC Next Generation Business Leader Succession Plan participant

Kazuhiko Inoue, Director, SWCC Showa Cable Systems Co., Ltd.

I think that participating in the Next Generation Business Leader Succession Plan training
program was a major turning point and jumping-off point in my business career to becomeaware of the frame of mind, responsibility, and mission required of a business leader.
Under the guidance of the instructor, I learned how to create frameworks for corporate
management strategies, build logical structures, and improve presentation skills. And it
was a great opportunity to form a team with other participants and give suggestions tomanagement on formulating the next mid-term management plan.
Our team verified optimization of the portfolio balance and we focused on achieving adecarbonized society and promoting DX as a new business to grow the Group evenfurther. The advice I received from the instructor and discussions with the instructor, and the opinions and suggestions I
received from the officers, executive officers, and other participants on my reports over the six month period will be ahuge help for my future career.
The pandemic has caused dramatic changes to occur in the market that surrounds our company, and the pace of thosechanges are accelerating. Although it is true there are rough seas ahead, I think that it is important to ascertain market
trends with a clear head in order to navigate accurately at the right timing, and want to make the most of what I learned in
the training program. The program was a starting point to transform my mindset and I am grateful for the opportunity toparticipate. I will enthusiastically convey the assets I gained there to the next generation who will support and lead the
SWCC Group in the future.

SWCC SHOWA HOLDINGS CO., LTD.

42

Efforts to Build a Business Foundation

Employee Relations (Safety and Health Activities)■ Basic Idea
Based on its management philosophy to comply with laws and regulations, prioritize consideration for safety and the global
environment, and expand its activities to earn trust, the SWCC Group establishes its annual safety and health policy based on
the premise that “safety takes precedence over all” and priority topics, and makes a group-wide effort to engage in safety andhealth activities.

FY2020 Safety and Health Activities Policy
1.
2.
3.
4.

Take proactive measures to prevent accidents.
Ensure compliance with laws and regulations, and internal rules such as work standards and work procedures.
Raise awareness on safety through education and training.
Promote health of both mind and body.

FY2020 Priority Topics for Safety and Health Activities
1. Accident Prevention (efforts to mitigate risks)① Carry out risk assessments, etc.
② Conduct patrols based on a check list and make improvements accordingly.
③ Enhance safety management through supervisors (e.g., patrol, make rounds of workplaces, deliver safety talks atmorning meetings, give warnings).
2. Confirm laws and rules such as work standards and procedures, and check level of compliance.
3. Holding a variety of training programs such as rank-based training, skill training, and risk prediction training.
4. Promote healthy minds and bodies in accordance with the Work Style Reforms and Health Management
Activity Policy.

■ Organizational Structure for Promotion of Safety and Health Management
Safety and health management of the SWCC Group is
promoted under the Group management council, and our
Safety, Environment, and Quality Oversight Office, which
serves as the safety and health supervision department,rolls out to each Group company through the Safety and
Health Working Group.
The Group’s safety and health activity policy is developedby the Safety, Environment, and Quality Oversight Office,deliberated by the Safety and Health Working Group, anddecided by the Group management council. The Safety,
Environment, and Quality Oversight Office regularly reviews
the safety and health activities of each Group company, andfacilitates problem-solving and accident and disease
prevention. Furthermore, each Group company establishes
safety and health management systems based on the
Industrial Safety and Health Act and other relevant laws,
and carries out safety and health activities in accordancewith their business areas.

SWCC Group Management Council

SWCC Showa Holdings Board of Directors

SWCC Showa Holdings Safety and Health Supervision Department(Safety, Environmental, and Quality Oversight Office)Safety and Health Working Group
Chairperson: Officer in charge of safety and health supervision, Secretariat: Safety,
Environmental, and Quality Oversight Office

Each Group Company, Site Safety and Health Committee

SWCC Showa Cable Systems (Head Office, Sagamihara, Mie, Sendai, Ibaraki, Aichi, Ebina, Watarida)
SWCC Showa Unimac (Sendai), Fuji Electric Cable

Operating departments of each company■ Current State of Industrial Accidents in FY2020 and Next Steps
The number of industrial accidents in the SWCC Group in fiscal 2020 was as follows: 26 inJapan, including five requiring leaves of absence, and two requiring leaves of absence abroad.
This is a decrease from the previous fiscal year. The characteristics of industrial accidents infiscal 2020 showed a marked trend: 46% involved people 29 years old and under, and 62%
involved those with five years of experience or less.
Considering this, SWCC Showa Cable Systems Co., Ltd. divided its sites in Japan into east
and west regions, and established a Safety and Health Promotion Office in each one.
Furthermore, the company is working to strengthen the prevention of industrial accidents
through efforts such as workplace inspections by safety consultants and holding classes forsupervisors.
43

SWCC Group Report

Safety patrol

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Relations with Society

Community Relations (Social Contribution Activities)■ Basic Idea
The SWCC Group has formulated a Social Contribution Activity Policy as the basis to widely carry out activities that contribute tosociety. Based on this policy, we are gradually developing an internal foundation for initiatives such as a social contribution
support system, in order to become a company that earns the trust of and inspires stakeholders.

SWCC Group Social Contribution Activity Policy
The SWCC Group strives to instill a high awareness of social contribution among employees, and carries out awide range of worthwhile activities through its products and services and actions of its employees to achieve asustainable society.

■ Thank You Letter from the Central Community Chest of JapanThe SWCC Group made a donation
through the Central Community Chest ofJapan to help it carry out activities tosupport children and parents coping withtemporary school closures across Japandue to the COVID-19 pandemic in March
2020.
We will continue to actively drive
activities to address a variety of social
issues.

Red Feather “Emergency Support to Help Children
and Families While Schools are Temporarily Closed”

Red Feather Central Community Chest of Japan■ Participation in the KANAGAWA Upcycle Consortium
Since 2019, SDS Corporation has been a member of the Kanagawa Upcycle Consortium, one of Kanagawa Prefecture’s SDG
initiatives. The consortium promotes the creation of upcycle systems using LIMEX, an alternative material to paper and plastic
made mainly with limestone. It aims to build a model for upcycling from Kanagawa Prefecture in partnership with thegovernment, schools, and a wide range of other organizations.
As an initiative for 2020, SDS Corporation and LOGIS-WORKS Co., Ltd. proposed a regular collection scheme for collecting
LIMEX cups used at an outlet mall in the prefecture and played a part in collection operations.
Pelletization
LIMEX pellets

Collection

Remanufacturing
Plastic-alternative products

LIMEX cup

SWCC SHOWA HOLDINGS CO., LTD.

44

Efforts to Build a Business Foundation

Corporate Governance■ Basic Idea
Based on our management philosophy, in which the keyword is “trust”, our basic policy for corporate governance is to conduct
activities with the recognition that speeding up and streamlining management as well as enhancing relevant monitoring functions
are universal challenges for all companies.
The SWCC Group is committed to actively developing a system required to ensure appropriate operations of the Group while
fulfilling its corporate social responsibility (CSR).

■ Changes in Governance
Year

2006

Organizational design
Total number of officers
Directors
Outside directors
Auditors
Outside auditors

2018

2019

2020

2021

Company with an audit and supervisory committee (from June 2019)

13

14

10

7

7

7

9

10

7

7

7

7

0

2

2

3

3

3

4

4

3

—

—

—

—

—

—

3

3

• Changes to holding company

Topics2016

Company with a board of statutory auditors (to June 2019)2• Appoints outside directors• Establishes Nominating
Committee (December 2018)• Establishes Compensation
Committee (December 2018)• Starts evaluating effectiveness of
the Board of Directors• Strengthens authority of• Establishes Chairman of theexecutive officers (April 2019) Board of Directors (April• Establishes Group CEO (June 2020)2019)• Implements restricted• Abolishes position of director
share-based remuneration• Abolishes advisor system
plan■ Current System
We adopt the system of a company with an audit and supervisory committee as part of our organizational design. The purposeof this adoption is as follows.
❶ By delegating substantial decision-making authority for the execution of business operations to the executive officers, we
aim to increase the efficiency and speed of business execution.
❷ Based on the above ❶, at the meetings of the Board of Directors, we will further enhance the deliberations on important
themes such as management strategy.
❸ The Audit and Supervisory Committee will play a central role in strengthening the auditing and supervisory functions.

● Corporate Governance System Diagram
Shareholders’ Meeting
Enhance supervisory function through the establishment of the Nominating
Committee, Compensation Committee, and Audit and Supervisory Committee

Supervise

Board of Directors (Holding Company)
President and Representative Director (Holding Company)

Audit

Audit andsupervise

Nominating Committee Compensation Committee

Accounting Auditor

ReportRecommend

Audit and Supervisory Committee
ExecuteRisk Management Committee

Group CEO

Audit Control Division

Compliance/riskmanagement

Internal
audit
Group Management Council (Executive Officers Meeting)Speed up and streamline business execution by reviewing business segments, and strengthening and enhancing the executive officer system
Corporate Executive
Officer●Supervising Group Management●Supervising Operational Restructuring●Assistant for Supervising Operational
Restructuring●In charge of Financing, CSR, and Risk
Management●In charge of Management Strategy, Investment
Strategy, and Public Relations / IR
●In charge of DX and Cybersecurity●In charge of Overseas Business and Wire
Harness Business●In charge of Sales Coordination, Construction
and Electrical Appliances, and Logistics Reform●In charge of General Affairs, Legal Affairs,
Human Resources, Human Resources
Development, and Group Procurement●In charge of Accounting, Finance and Credit

Executive Officer in charge of Energy andInfrastructure Business Coordination

Executive Officer in charge of Communication
and Industrial Devices Business Coordination

Executive Officer in charge of Electrical Equipment
and Components Business Coordination

Executive Officer in charge of
New Business Coordination

Electric wires, power
cables, electric power
equipment, engineering,aluminum wires, electricmaterials for equipment,
seismic isolationequipment, vibration
control and isolation, etc.

Communication cables,
optically processed
products, electric wires
for equipment, wire
harnesses, precision
devices, etc.

Magnet wires, barewires, oxygen-freecopper, copper alloy
wires, electric wires forautomobiles, etc.

Medical, factory
automation, and network
field

Strengthen Group business management and internal controls by enhancing
cooperation with Group companies

Businessmanagement

Core operating companies: SWCC Showa Cables Systems Co.,Ltd., Showa Furukawa Cable Co., Ltd., SWCC Showa Unimac Ltd., Fuji Electric Cable Co., Ltd., AXIO Corporation, SDS Corporation

45

SWCC Group Report

Other domestic and overseas Group companies

Audit

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Corporate GovernancePresident

Board of Directors FY2020 Held 20 times
Purpose and authority

InsideOutsideComposition
3 directors

To deliberate and decide on matters regarding the management policies and businessexecution of the company and its Group companies, and supervise to ensure that the

4 directors who are Audit andSupervisory Committee members

execution of directors’ duties is duly and efficiently conducted.

Audit and Supervisory Committee FY2020 Held 17 times
Purpose and authority

Composition

To audit and supervise the execution of directors’ duties through monitoring andverification of the internal control system and effective cooperation with an accounting
auditor, the internal audit department, and other departments, in accordance with theaudit policy and plans set forth by the Audit and Supervisory Committee.

4 directors

Nominating Committee FY2020 Held 16 times
Purpose and authority

Composition

To deliberate the nomination of candidates for directors, executive officers, and others,

3 directors

and succession planning and other plans, and return a report based on consultation
with the Board of Directors.

Compensation Committee FY2020 Held 9 times
Purpose and authority

Composition

To deliberate the determination of the remuneration system and program and individual

4 directors

remuneration amounts for directors, executive officers, and others, and return a reportbased on consultation with the Board of Directors.

Risk Management Committee FY2020 Held 3 times
Purpose and authority

Composition
1 chairperson

To further enhance the SWCC Group’s corporate governance system by supervisingcompliance and risk management of the entire Group and continuing to identify andcorrect issues thereof.

14 committee members■ Policy on the Structure of the Board of Directors
Based on our management philosophy, in which the
keyword is “trust”, our basic policy for corporate governanceis to conduct activities with the recognition that speeding up
and streamlining management as well as enhancing
relevant monitoring functions are universal challenges for allcompanies.
In accordance with this policy, we appoint people asdirectors who exhibit excellent character and insight, andcan supervise and manage the company. And in order tostrengthen the monitoring function, we require directors who
are members of the Audit and Supervisory Committee tohave experience running a company, and appoint people
with extensive knowledge and experience in a wide range ofdifferent fields including sales, finance, and manufacturing
to ensure a well-balanced team.

● Directors’ Skill Matrix
Name

Essential
skill
Corporate
management

ESG

Industrial Overseas
Accounting
Sales
Research Manufacturing
insight business& Finance

Takayo Hasegawa

●

●

●

Dongcheng Zhang

●

●

●

●

Guoqiang Hu

●

●

●

●

Kiyoshi Togawa

●

●

●
●

Yuji Sakakura●●

Seiichiro Ichikawa●●

Takashi Togawa

●

●

●
●
●
●
●
●

●

●

SWCC SHOWA HOLDINGS CO., LTD.

46

Efforts to Build a Business Foundation■ Evaluation of the Effectiveness of the Board of Directors
We conduct analysis and evaluation of the effectiveness of the Board of Directors each fiscal year to verify that Board functions
properly. Specifically, based on the answers to the questionnaire for all directors, the Board of Directors share the results of theevaluation and issues found, and holds a constructive discussion on the ideal state of the Board going forward.
To summarize the results of evaluation for this year, it was determined that the operation of the Board of Directors is being
conducted appropriately by the Chairman of the Board of Directors and deliberations are being held largely appropriately in an
atmosphere of candor and openness, and therefore the effectiveness of the Board of Directors of the Company has beenbroadly ensured. Regarding many of the questions that had been raised previously with regard to items for deliberation, such as
insufficient examination and deliberation regarding risk management and internal control, an increase in responses indicatingthat the situation has improved since the previous questionnaire is considered to show that various measures aimed at
improving these issues were effective. On the other hand, we also recognize that further examination is needed. For operationof the Board of Directors, we need to further examine improvements to the selection of agenda items for achieving efficient
operation while enhancing deliberation of matters related to the broader direction of the company, such as management
strategy, etc. We also need to further examine matters for deliberation, such as revisions of the performance-linked remunerationand the evaluation of the effectiveness of the Board of Directors. We will continue working to make improvements.

■ Officers’ Remuneration
SWCC Showa Holdings passed a resolution on the decision-making policy regarding matters such as directors’ individual
remuneration at the Board of Directors meeting in February 2021. Before the resolution was passed, the Compensation
Committee provided a report after being consulted on the details of the item.
Furthermore, the Board of Directors determined that directors’ individual remuneration for the current fiscal year was in linewith the decision-making policy due to confirming that the method for determining remuneration details and the decided
remuneration details were consistent with said decision-making policy and recognizing the report from the Compensation
Committee.
The details of the decision-making policy related to matters such as directors’ individual remuneration are as follows.

● Composition of Remuneration

The remuneration for directors (excluding directors who are Audit and Supervisory Committee members) is comprised of a
fixed remuneration and performance-linked remuneration.
Type

Category

Fixed remuneration

This is calculated uniformly based on the following indicators and formula taking into accountthe balance of short- and mid-term target incentives, the maximum amount of which is equal toa certain percentage of the fixed remuneration. Directors who do not perform executive duties(including directors who are Audit and Supervisory Committee members) are not paid
performance-linked remuneration.
(1) Indicators:• Operating income achievement ratio (A)= (current operating income outlook ÷ current operating income target) x 100%
• Mid-term operating income achievement ratio (B)= {(operating income 2 years prior + operating income 1 year prior)÷ (operating income target 2 years prior + operating income target 1 year prior)} x 100%
• ROIC achievement ratio (C) = (current ROIC outlook ÷ current ROIC target) x 100%
(2) Reasons for selecting indicators:
The operating income achievement ratio and mid-term operating income achievement ratio
have been set as indicators of profitability, and the ROIC achievement ratio has been set as anindicator of capital efficiency. It has been determined that providing incentive to achieve thesetargets will lead to improving mid- to long-term corporate value.
(3) Performance regarding indicators:
For this fiscal year, each target set for each indicator has been achieved.
(4) Formula
Performance-linked remuneration = Maximum performance-linked remuneration amount× (A × 40% + B × 30% + C × 30%)

Performance-linked
remuneration

Remuneration to
grant restricted
shares47

SWCC Group Report

Details
This consists of a basic remuneration and additional job-based remuneration that is dependent
on the director’s duties and responsibilities.

Remuneration to grant restricted shares is paid in order to accelerate value sharing between
directors and shareholders. A certain percentage of the performance-linked remuneration is
uniformly paid in the form of remuneration to grant restricted shares.
Directors who do not perform executive duties (including directors who are Audit andSupervisory Committee members) are not paid the remuneration to grant restricted shares.

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Corporate Governance● Percentage Breakdown of Remuneration

The percentage of fixed remuneration, performance-linked remuneration, and remuneration to grant restricted shares thatmake up total remuneration are reevaluated by the Compensation Committee each time. Furthermore, the total amount of
remuneration for directors (excluding directors who are Audit and Supervisory Committee members) shall not exceed ¥300
million per year. Remuneration for fiscal 2021 shall be paid as follows: performance-linked remuneration shall be paid up to a
maximum of 20% of fixed remuneration, and an amount equivalent to 50% of said performance-linked remuneration shall be
paid as remuneration to grant restricted shares.
FY2020 Remuneration

Performance-linked remuneration(maximum of 20% of fixed remuneration)
Fixed remuneration

80%

Fixed remuneration

77%

16%

4%

Remuneration to grant restricted shares(paid as 25% of performance-linked remuneration)

FY2021 Remuneration

Performance-linked remuneration(maximum of 20% of fixed remuneration)

15%

8%

Remuneration to grant restricted shares(paid as 50% of performance-linked remuneration)● Payment Schedule

Monetary remuneration combining fixed and performance-linked remuneration for the fiscal year shall be paid in equalamounts each month starting the first month of the fiscal year. Remuneration to grant restricted shares shall be paid by themonth following the Shareholders’ Meeting of that fiscal year, under the condition that the director has been appointed orreappointed at said meeting.

● Process to Decide Remuneration

The amount of individual remuneration for directors (excluding directors who are Audit and Supervisory Committee members;
the same applies hereinafter in this section) is decided by the President and Representative Director of the company, who was
entrusted by the Board of Directors meeting held in June 2020, within the total amount of directors’ remuneration establishedat the Shareholders’ Meeting, under the condition of considering factors such as the report by the Compensation Committee,
policy for deciding remuneration of directors and others established by the company, and the assessment results based on theperformance reviews of directors.
Objectivity and transparency in the process to decide the remuneration is ensured by the following and measures are taken
to ensure authority is exercised properly without arbitrary decision-making: issuance of the report from the voluntary
Compensation Committee that includes independent outside directors, compliance with the policy on deciding remuneration of
directors and others established by the company, and deliberations by the voluntary Nominating Committee, majority of which
comprises independent outside directors, on the assessment results based on the performance reviews of directors conducted
mainly by directors who do not perform executive duties.
The reason the President and Representative Director was delegated is that it was determined that said person has
thorough knowledge of matters such as the environment that surrounds the company and its business conditions, and issuitable for making assessments that take into account the directors’ duties and abilities.
The remuneration for directors who are Audit and Supervisory Committee members is decided based on discussion among
directors who are Audit and Supervisory Committee members, within the maximum amount established at the Shareholders’Meeting, in accordance with Paragraph 3, Article 361 of the Companies Act of Japan.

SWCC SHOWA HOLDINGS CO., LTD.

48

Efforts to Build a Business Foundation

Risk Management■ Risk Management
Audit

Monitoring

Audit and Supervisory
As the environment surrounding corporate management
Board of Directors andCommittee
undergoes dramatic changes, accurately identifying andManagement Council
assessing increasingly complex and diverse risks, andReportIssues directions
preparing solutions, are crucial elements in managing acompany. We believe that building a sound risk management
Risk Management Committee
ReportReportsystem and creating and seizing business opportunities bytaking appropriate risks will lead to sustainable growth for theGroup. The SWCC Group carries out group-wide risk
Risk Management Officemanagement based on three lines of defense: operating
departments (first line), administration departments (second
Administrationline), and audit departments (third line). Specific activities aredepartments
Operatingcarried out through the Risk Management Committee, in
departments
Audit/advise(HR/general affairs, legal,
which the Group CEO serves as chairperson, and directors
Audit Control
報告
accounting/finance, etc.)
AssessandDivisionand executive officers of the company and presidents ofcontrol risks as
Monitor risk management
major operating companies serve as members. Examples ofrisk ownerof operating departments,
the committee’s activities include assessing risks, developing
give advice as neededrisk management plans and solutions, and tracking progressof risk measures throughout the year. The committee’s
proceedings are reported to the Board of Directors in a timely
manner.
Furthermore, we are striving to strengthen our group-wide risk management system, which is essential for the continued
development of our businesses. We established the Risk Management Office within the Business Management Coordination
Department as a risk control department. The office supervises risk management of the entire Group, which includes handlingadministrative operations of the Risk Management Committee, formulating rules and guidelines, providing training, andmonitoring risks.

● Risk Management Training

In October 2020 we provided risk management training for Group officers andline managers. Mr. Hiroyuki Kobayashi, an Aviation critic and former captain ofJapan Airlines Co., Ltd., was invited as the instructor. He gave a lecture on thetheme of risk management on the front lines. Many participants said that itraised their awareness on risks and safety. “I could easily apply it to mysituation and understand from front line perspective” and “I gained new insighton how to deal with risks,” commented some. We will continue to provide
regular training courses on risks and compliance, and strive to increase
employee knowledge and awareness of risks.
Risk Management Training● Major Identified Risks

Whether or not any risk falls under a major risk that could have significant impact on investors’ decisions is determined by
the Risk Management Committee through identification, analysis, and evaluation of risks. Specifically, the Committeequantifies risks listed by Group companies in accordance with their level of impact and probability of occurring. Based on
this, the Group assesses any risk that could have significant impact as a major risk and takes measures against it. The
following have been assessed as major risks.

FY2020 Major Risks
Risk category

Naturaldisasters

49

SWCC Group Report

Details of identified risks

Major initiatives

Remaining risks

Suspension of operations, shutdownof logistics functions, and otherproblems at manufacturing sites
caused by the following disasters:• Natural disasters such as massive
earthquake, typhoon, and flooding• Accidents such as fire

• Formulated Business Continuity Plan
(BCP) that includes the supply chain
to ensure smooth initial response
against anticipated risks• Made systematic investments tostrengthen infrastructure equipment
at manufacturing sites• If substantial restrictions in planned
production activities occur, such as
prolonged deterioration of social
infrastructure functions caused bypower shortages, logistics delays,
and other problems, it would have ahuge impact on performance.

History and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Risk Management

Risk category

Details of identified risks

Major initiatives

Remaining risks

Raw material

Changes in prices of copper, whichis the key raw material
Changes in prices of petrochemical
products such as polyethylene• Enhanced management via
organization that oversees groupprocurement• Reduced inventory through planned,
stable procurement• Shifted costs to product prices• Hedged risk of copper pricefluctuation by utilizing futures trading,etc.

• If shifting costs to product prices isdifficult or loss occurs due to adramatic drop in market prices, itwould have a significant impact on
our performance.

Impact of COVID-19• Actions taken by the COVID-19
Emergency Response Center(confirm safety of employees, prevent
infection within and outside thecompany, etc.)• Built a business continuity systemthat uses online tools, etc.

• Shrinkage of the market, disruptionsin the supply chain, and constraints
in business activities caused by thecontinuing pandemic will have asignificant impact on our financial
position and results of operations.

Foreign exchange risk related tooverseas sales (9.2% of total)
Impact of foreign exchange
valuation loss of overseas
subsidiaries, and conversion to yen
in consolidated financial statements• Balanced assets and liabilities• Hedging transaction of forward
exchange contracts, etc.

• Risk of sharp foreign exchange
fluctuations will have a significant
impact on our performance.

pricesPandemic

Foreignexchange
fluctuations■ Information Security
The SWCC Group established its Information Security Policy in 2006. Since then, we have taken measures against information
leakage and cyber-attacks as well as provided relevant training for employees.
The SWCC Group recognizes the investment in security as a key management issue and is making proactive efforts on
security.

● Information Security Policy

We recognize that information handled within the company includes important information on business activities, such as
customer information, management information, technical and production information, and employees’ personal information.
Thus, we strive to comply with laws and regulations and to improve the system and IT environment that enable appropriate
management.
In addition, we have formulated Information Security Guidelines and prepared an IT environment with greater reliability sothat confidentiality, integrity, and availability are ensured to help customers and employees use information assets securely.
We will continue to maintain these guidelines and this environment at all Group companies.

● Information Security System

The IT Strategy Committee is a committee organizationconsisting of IT administrators of operating companies
under the Group’s direct supervision, and develops IT
security measures, plans and implements training on
security, and proposes investments in security measures.
AXIO Corporation, an operating company under theGroup’s direct supervision, operates the Committee,
assuming responsibility for the building, maintenance, andoperation of IT infrastructure.

SWCC Group Management Council

SWCC Showa Holdings Board of Directors

IT Strategy Promotion Committee
Group company AXIO
Chairperson: Officer in charge of IT
Secretariat: ICT Promotion Department
Build, maintain,
Obtain ISMS certification
Review and revise theand operate an
Receive PrivacyMark certification
IT environment
Security Guidelines
IT infrastructure/security measures● FY2020 Initiative Results

We provided training on information security to all employees in the Group, including officers, from December 2020 toFebruary 2021. In September 2020 we conducted an email drill on all Group companies in Japan (fake spam was sent torandomly chosen employees to determine whether they were able to take the correct action) as a cybersecurity measureagainst targeted email attacks that have become more sophisticated in recent years. We strengthened security measures,
rebuilt the internet connection environment, and created an infrastructure to accommodate cloud services and teleworking.

● FY2021 Initiative Plan

In fiscal 2021 we plan to provide information security training and conduct two email drills. We plan to revise the Information
Security Guidelines in accordance with changes in the IT environment to accommodate teleworking and utilization of
external environments such as cloud services. Furthermore, we will start preparations to implement “zero trust” (IDmanagement on a cloud system) to address increased teleworking and usage of cloud services.

SWCC SHOWA HOLDINGS CO., LTD.

50

Efforts to Build a Business Foundation■ BCM (Business Continuity Management)
The SWCC Group must fulfill its social responsibilities, including the responsibility to continue supplying in emergencies by
overcoming unexpected situations such as disasters that may occur during business activities. We must similarly restore
operations in a quick and planned manner to continue business. For that reason, during non-emergency times, we steadily workon BCM (Business Continuity Management), which is intended to maintain and improve capacity to continue organizational
business.
We launched the BCM Development Promotion Committee in fiscal 2016. The committee has reviewed the disasterprevention system at each site of the SWCC Group, selected priority business operations within the Group in time of emergency,
and examined strategies and measures to continue business and restore it quickly.
In fiscal 2020, based on the BCM system previously established at each of our sites in Japan, we conducted facility
inspections in accordance with the plan, took precautionary measures, verified their effects through regular drills, and reviewed
the BCP manual to ensure that it was appropriate for the current situation. We also expanded deliberations on applicable natural
disasters to include typhoons and torrential rains in addition to earthquakes and tsunamis while referring to local hazard maps,
and carried out activities to enable each site to operate more independently in line with its location. Furthermore, in order tocombat the spread of COVID-19, we established the SWCC Group Emergency Response Center and centralized the Group’s
communication system related to COVID-19. In addition, as a company involved in infrastructure, we facilitated teleworking andstaggered working hours at sales locations and offices, while our manufacturing, logistics, and construction business sites
continued business activities by carrying out exhaustive infection prevention measures. We also put a teleworking environment
in place, which includes switching to mobile computers, expanding Wi-Fi, facilitating online meeting systems, utilizing satellite
offices, and implementing workflows. And we formulated and continue to carry out the New Business Practice Guidelines toenable business to continue during the pandemic.
In fiscal 2021 we will continue to carry out exhaustive measures to prevent the spread of COVID-19 and strive to promote
diverse work styles and improve operational efficiency even further with a focus on emergency response. Examples include
using smartphones for the internal phone system and converting the head office to a non-territorial office (where employees
work in shared spaces within each area instead of at assigned desks).

■ Compliance
The SWCC Group considers compliance to be one of its most important management issues and takes various measuresinternally to comply with laws and regulations. Specific measures are planned and formulated mainly at the Risk Management
Committee, and then implemented by the Corporate Legal Services Division.
Compliance with antitrust laws is an especially critical and high-priority issue for the SWCC Group. We conduct internal audits
focused on antitrust laws as well as hold sessions for personnel in charge of sales on a regular basis each year. In addition, we
implement compliance training programs during the sessions and rank-based programs (e.g. training programs for new
employees and executives) on laws and regulations related to the SWCC Group’s business, such as subcontracting andconstruction industry laws, to promote compliance widely.
The SWCC Group operates a Group-wide internal reporting system (Compliance Hotline) by establishing contact offices
internally and externally (an attorney’s office). We prepare a system to prevent compliance violations and detect any that occur.
In fiscal 2020 we worked to boost compliance awareness further by addressing the issues learned from a compliancequestionnaire survey conducted after the previous fiscal year’s sessions and reflecting them to this fiscal year’s sessions andtraining.
The SWCC Group is committed to enhancing and ensuring compliance through continuation of these initiatives.

Compliance Session

51

SWCC Group ReportHistory and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Risk Management/Outside Director’s Message

Outside Director’s Message
Since its foundation in 1936, the company has contributed to industry and the livesof citizens as an infrastructure company, mainly in the business of manufactureand sales of electric wires and cables that support the supply of electricity.
My background has been in finance division of a general trading company and
CFO of an M&A advisory company, as well as being an outside director and audit& supervisory board member of multiple companies in the retail sector and for a
specialist trading company, so when I was appointed an outside director of thecompany, I was very much interested in being involved in a traditional manufacturer
and felt that my experience and insights would definitely contribute to increasing its
corporate value.
On the other hand, as I observed the company’s management situation since thebeginning of this century, while recognizing that business relied on infrastructure
investment for society as a whole, I felt there may have been some weaknesses ininitiatives for structural reform amid the deflationary economy that has persisted
since the bubble burst.
As a result, despite recording repeated impairment losses, the company had
been unable to achieve a V-shaped recovery and there were challenging periods
when the company was unable to declare a dividend during successive years.

Yuji Sakakura,

Outside Director, Audit andSupervisory Committee Member
The role of the CEO is extremely important in modern day corporate management.
I think it is no exaggeration to state that 90% of the fate of a company is tied up in its
CEO. My first opportunity to talk with the President prior to being appointed an
outside director was in the autumn of 2019, when excitement was growing about the
rapid progress of the Japanese team in the Rugby World Cup.
Her attributes – a female president at a traditional manufacturer who holds a Doctor of Engineering and joined the company
as a new graduate – felt fresh to me, and the remarkable improvement in earnings since her appointment in 2018 and her
management approach caught my attention. The management policy she explained to me was extremely clear; themanagement policy is embodied in the mid-term management plan “Change SWCC 2022,” which is most certain to be achieved
despite COVID-19.

Business structural reforms through ROIC management from a shareholder perspective
Strengthen the financial foundation
Strengthen profitability of core business and create new businesses
Three of the seven directors on the company’s Board of Directors are outside directors. Outside directors naturally have a
responsibility to conduct highly effective supervision of management from an independent and objective standpoint. By
participating in the Management Council and the Executive Officers Meeting, we are blessed with opportunities for active
involvement in considering the direction of the corporate strategy and structural reforms. The presence of outside directors atthese meetings brings in a new style to the execution side based on each person’s experience and insights and has also beenstimulating, leading to the company’s sustained growth and improvement in medium to long-term corporate value. Not limited toa “monitoring model” of monitoring the execution by management, I believe it is close to a model referred to as “Board 3.0,”
which goes one step further.
In July we established a Special Investigation Committee to investigate the cause of the past problem of inconsistencies inquality testing. This is considered a material incident that could also rock the management philosophy of “strives to be trusted”
and I will do my utmost as an outside director to prevent reoccurrence and verify the governance structure. I will further
strengthen supervision of the management execution structure needed to build the “trust” of our shareholders, customers and all
stakeholders.
We have launched the “SWCC VISION 2026,” looking towards our 90th anniversary in 2026, and aim to realize a new SWCC
under President Hasegawa’s strong leadership. It is said that the speed in adapting to the next generation such as digitalization,
which is accelerating under COVID-19 pandemic, determines future winners and losers.
I believe we will meet the expectations of shareholders and all other stakeholders by accelerating the increase in corporate
value and become a “continuously growing company” by aiming to strengthen the core business through technologies inheritedfrom our predecessors, while developing new businesses in areas such as the EV and medical fields and through digitaltransformation of production sites and logistics.

SWCC SHOWA HOLDINGS CO., LTD.

52

Efforts to Build a Business Foundation

Management Team (Introduction of Officers)
Directors and Audit and Supervisory Committee Members (as of June 25, 2021)
President and Representative Director,
Chairman of the Board of Directors
Group CEO

Representative Director
Senior Executive Officer

Takayo Hasegawa

Dongcheng Zhang

Supervising Group Management, Supervising
Operational Restructuring

Assistant to President
Assistant for Supervising Operational
Restructuring

Career summary

Career summary

Apr. 1984
June 2013
June 2018
Apr. 2020

Apr. 1993
June 2015
June 2017
Apr. 2019
Apr. 2020

Joined SHOWA ELECTRIC WIRE AND CABLE CO., LTD.
Director of the Company
President and Director of the Company
President and Representative Director, Chairman of the Board of Directors
Group CEO of the Company (to present)

Joined SHOWA ELECTRIC WIRE AND CABLE CO., LTD.
Director of the Company
Executive Managing Director of the Company
Director, Senior Executive Officer of the Company
Representative Director, Senior Executive Officer of the Company(to present)

Director

Outside Director
Chairman of the Audit and Supervisory
Committee

Guoqiang Hu

Kiyoshi Togawa

Career summary

Career summary

Oct. 1995
May 2008
June 2018
June 2020

Apr. 1971 Joined Hitachi Chemical Co., Ltd. (current Showa Denko Materials Co.,Ltd.)
Apr. 2007 Senior Vice President and Executive Officer of Hitachi Chemical Co., Ltd.
June 2015 Outside Director of the Company
June 2018 Outside Director (Audit and Supervisory Committee Member) of UKC
Holdings Corporation (current Restar Holdings Corporation) (to present)
June 2019 Outside Director (Audit and Supervisory Committee Member) of theCompany (to present)

Joined FUTONG SHOWA WIRE & CABLE (HANGZHOU) CO., LTD.
Director of FUTONG GROUP CO., LTD. (to present)
Outside Director of the Company
Director of the Company (to present)

Executive Officers (as of June 25, 2021)

53

Managing Executive Officer

Managing Executive Officer

Executive Officer

Futoshi Yamaguchi

Tetsuo Komata

Yukio Kawase

In charge of Financing, CSR, and Risk Management
General Manager of Business Management
Coordination Department, and General Manager ofExport Control Office, Business Management
Coordination Department

In charge of Management Strategy, Investment Strategy,
and Public Relations / IR
General Manager of Management Strategy andPlanning Department

In charge of Energy and Infrastructure Business
Coordination
Chief of Energy and Infrastructure Business Segment
President and Representative Director of SWCC
SHOWA CABLE SYSTEMS CO., LTD.

Executive Officer

Executive Officer

Executive Officer

Yoshinao Kodama

Takashi Yamamura

Yoshiaki Higuchi

In charge of Communication and Industrial Devices
Business Coordination
Chief of Communication and Industrial Devices
Business Segment
President and Representative Director of FUJI
ELECTRIC CABLE CO., LTD.

In charge of Electrical Equipment and Components
Business Coordination
Chief of Electrical Equipment and Components Business
Segment
President and Representative Director of SWCC
SHOWA UNIMAC LTD.

In charge of New Business Segment and DX /Cybersecurity
Chief of New Business Segment and General Manager
of DX and System Planning Office

SWCC Group ReportHistory and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section

Management Team (Introduction of Officers)

Outside Director
Audit and Supervisory Committee
MemberOutside Director
Audit and Supervisory Committee
MemberYuji Sakakura

Seiichiro Ichikawa

Career summary

Career summary

Apr. 1974 Joined Nissho Iwai Corporation (current Sojitz Corporation)
June 1999 President and Representative Director of Nissho Iwai Securities Co., Ltd.
June 2020 Outside Director (Audit and Supervisory Committee Member) of theCompany (to present)

Apr. 1976 Joined Sapporo Breweries Limited
Mar. 2013 Director (Member of the Board) and Senior Managing Executive Officer of
Sapporo Breweries Limited
June 2016 Outside Director of Nissan Shatai Co., Ltd. (to present)
June 2021 Outside Director (Audit and Supervisory Committee Member) of theCompany (to present)(Note) “The Company” in the career summary stands for SWCC

Director
Full-time Audit and Supervisory
Committee Member

SHOWA HOLDINGS CO., LTD.

Takashi Togawa

Career summary
Apr. 1980
June 2011
June 2014
June 2020

Joined Tokyo Shibaura Electric Co., Ltd. (current Toshiba Corporation)
Director of the Company
Executive Managing Director of the Company
Director (Full-time Audit and Supervisory Committee Member) of theCompany (to present)

Executive Officer

Executive Officer

Executive Officer

Kiyoshi Otake

Mitsuaki Kurosu

Mikio Sugai

In charge of Overseas Business and Wire Harness
Business
General Manager of Overseas Business Department,
and General Manager of Global Management Office,Overseas Business Department
Chairman of SWCC SHOWA (SHANGHAI) CO., LTD.
Chairman of SWCC SHOWA (H.K.) CO., LTD.
Chairman of JIAXING SHOWA INTERCONNECT
PRODUCTS CO., LTD.
Chairman of DONGGUAN SHOWA INTERCONNECT
PRODUCTS CO., LTD.

In charge of Sales Coordination, Construction andElectrical Appliances, and Logistics Reform
General Manager of Group Sales Coordination Office
President and Representative Director of SHOWAFURUKAWA CABLE CO., LTD.

In charge of General Affairs, Legal Affairs, Human
Resources, Human Resources Development, andGroup Procurement
General Manager of Human Resources and General
Affairs Coordination Department, and General Manager
of Group Procurement Division

Executive Officer

Nobutaka Imai
In charge of Accounting, Finance and Credit
General Manager of Accounting and Finance
Coordination Department

SWCC SHOWA HOLDINGS CO., LTD.

54

Financial/Company Profile Section

Results of Operations and Financial Analysis
Key Financial Data for the Past 10 Years
Fiscal year

FY2011FY2012FY2013

Net sales

171,780

169,798

183,289

Gross profit

19,261

18,503

19,561

Selling, general and administrative expenses(17,315)(17,376)(17,009)

Consolidated Results of Operations (millions of yen)

Operating income

1,945

1,126

2,552

Interest expense(1,103)(1,042)(1,090)Equity in earnings (loss) on equity-method

(63)

(184)

(271)

Foreign exchange gain (loss)

(219)

44

11

Ordinary income

693

(847)

1,236

Net income attributable to owners of parent

162(6,365)

195

Comprehensive income(201)(5,866)

1,600

Depreciation

3,279

3,169

2,947

Capital expenditure

2,883

3,812

4,460

Research and development expenses

1,248

1,247

1,097

Cash flows from operating activities

111

5,385

(1,208)Cash flows from investing activities(4,299)(3,913)(4,567)

Cash flows from financing activities

557

(718)

4,734

7,205

8,223

7,604

Total assets

143,498

136,890

140,371

Net assets

41,77835,34933,578Interest-bearing debt

58,45457,177

62,105

Shareholders’ equity

40,69235,05733,281

Information on Consolidated Cash Flows (millions of yen)

Cash and cash equivalents at end of year
Consolidated Financial Position (millions of yen)

Per Share Information (consolidated basis) (yen)Net income

5.73(206.55)

6.33

Net assets

1,320.48

1,137.62

1,080.04

10.00

0.00

0.00

174.4%——

Dividend
Dividend payout ratio (consolidated basis)
Key Financial Indicators (consolidated basis)
Operating income margin

1.1%

0.7%

1.4%

ROA (Return on assets)

0.5%

-0.6%

0.9%

ROE (Return on equity)

0.4%-16.8%

0.6%

Shareholders’ equity ratio

28.4%

25.6%

23.7%

DE ratio

144%

163%

187%

Overseas sales ratio

11.2%

12.2%

13.2%

Notes:
1. Effective October 1, 2017, the company carried out a 10-to-1 share consolidation of its common stock. Accordingly, net income, net assets and dividend
per share are calculated assuming that the share consolidation was carried out at the beginning of fiscal 2011.
2. The company has adopted the “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28, February 16, 2018)
since the beginning of fiscal 2018. Figures for fiscal 2017 are ones after this accounting standard has been applied retrospectively.

55

SWCC Group ReportHistory and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section
Results of Operations and Financial Analysis

FY2014FY2015FY2016FY2017FY2018FY2019FY2020181,693

169,712155,232

168,186

177,174

171,142

161,697

18,161

17,72820,09921,646

21,71823,73321,759(16,925)(16,778)(15,865)(15,370)(15,077)(15,123)(14,168)

1,236

949

4,234

6,276

6,640

8,609

7,590

(1,060)

(965)

(852)

(841)

(805)

(669)

(398)

(208)

(644)

(83)

(415)

(476)

(2)

248

260

(304)

(202)

36

(75)

(36)

19

384

(1,461)

2,446

4,892

5,603

7,864

7,765

228

(9,151)

1,976

3,737

4,569

5,465

4,966

3,213

(11,196)

2,938

5,722

2,314

4,584

8,628

3,489

3,699

2,928

2,877

3,011

3,099

3,183

4,998

3,983

3,244

3,391

2,944

4,186

3,969

1,238

1,045

927

1,046

1,119

1,255

1,276

5,624

4,545

7,842

6,804

6,901

8,696

8,882

(2,027)(3,846)(2,218)(4,051)(3,552)(4,144)(3,358)(3,493)(2,289)(6,506)(3,295)(2,970)(4,879)(5,661)

7,968

6,282

5,192

4,603

4,721

4,225

4,086

138,023

123,069

119,528

123,518

124,165

122,521

129,460

36,921

25,72428,65533,47735,62839,981

48,16958,96357,482

51,41948,99446,65742,30337,68936,61625,371

28,15032,85734,94339,57647,5687.43(296.98)64.14

123.93153.22

183.27166.491,188.29

823.37913.601,101.71

1,171.66

1,327.04

1,594.63

0.00

0.00

0.00

5.00

7.00

15.00

20.00

—

—

—

4.0%

4.6%

8.2%

12.0%

0.7%

0.6%

2.7%

3.7%

3.8%

5.0%

4.7%

0.3%

-1.1%

2.0%

4.0%

4.5%

6.4%

6.2%

0.7%

-29.5%

7.4%

12.3%

13.5%

14.7%

11.4%

26.5%

20.6%

23.6%

26.6%

28.1%

32.3%

36.7%

161%

227%

183%

149%

134%

107%

79%

13.4%

11.2%

11.5%

11.8%

9.7%

8.2%

9.2%

SWCC SHOWA HOLDINGS CO., LTD.

56

Financial/Company Profile Section

Consolidated Financial Statements
Consolidated Balance Sheet(Millions of yen)

FY2019(Millions of yen)

FY2020ASSETS

FY2019FY2020

LIABILITIESCurrent Assets:

Current liabilities:
22,368Cash and time deposits

4,304

4,165

Trade notes and accounts payable

Trade notes and accounts receivable

41,20743,859Current portion of bonds payable

60

60

Merchandise and finished goods

9,365

9,889

Short-term debt

29,46924,611Work in process

7,322

7,130

Other accounts payable

8,760

9,144

Raw materials and supplies

5,038

4,522

Accrued income taxes

1,480

624

Other

4,515

5,716

Provision for loss on construction contracts

75

69

(12)

(13)

Provision for business structure improvement expenses

234

234

71,741

75,269Provision for product repair costs

404

289

Allowance for doubtful accounts
Total current assets
Fixed assets:
Property, plant and equipment:

18,614

Other

4,739

5,536

Total current liabilities

63,83862,939Buildings and structures

7,243

6,909

Long-term liabilities:

Machinery, equipment and tools

5,930

5,982

Bonds payable

210

150

11,66011,93980

114

Tools, furniture and fixtures (net)

1,236

1,145

Long-term debt

Land

23,65923,159Deferred tax liabilities

Other

1,834

2,500

Deferred tax liabilities related to land revaluation

4,188

4,157

Total property, plant and equipment

39,90539,697

Net defined benefit liability

702

732

1,442

1,357

Other

1,859

1,257

Total long-term liabilities

18,701

18,351

Investment securities

5,997

6,584

Total liabilities

82,53981,290

Deferred tax assets

1,071

1,125

NET ASSETS

Net defined benefit asset

1,298

4,256

Shareholders’ equity:

Other

2,047

1,303

Common stock

24,221

24,221

Allowance for doubtful accounts

(982)

(133)

Capital surplus

5,698

5,700

Intangible assets
Investments and other assets:

Total investments and other assets:
Total fixed assets
Total assets

9,432

13,135Retained earnings

6,222

10,56350,78054,190Treasury stock

(917)

(910)

122,521

129,460

35,22539,575555

637

Total shareholders’ equity
Accumulated other comprehensive income:Unrealized holding gains on other securities
Variance of land revaluation

5,581

5,784

Foreign currency translation adjustments

1,003

1,022

Remeasurements of defined benefit plans(2,791)

548

Total accumulated other comprehensive income

4,350

7,993

405

600

Total net assets

39,981

48,169Total liabilities and net assets

122,521

129,460

Non-controlling interests

57

SWCC Group ReportHistory and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section
Results of Operations and Financial Analysis

Consolidated Statement of Operations
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Other income:Interest income
Dividend income
Equity in gain of affiliates
Foreign exchange gain
Other
Total other income
Other expenses:
Interest expense
Equity in losses of affiliates
Foreign exchange loss
Other
Total other expenses
Ordinary income
Extraordinary income:Gain on sales of fixed assets
Gain on sales of investment securities
Gain on liquidation of subsidiaries and associates
Total extraordinary income
Extraordinary losses:
Loss on impairment of fixed assets
Extra retirement payments
Business structure improvement expenses
Loss on liquidation of subsidiaries and associates
Other
Total extraordinary losses
Income before income taxes and non-controlling interests
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent(Millions of yen)

FY2019171,142
147,409
23,733
15,1238,609

FY2020161,697
139,937
21,75914,168
7,590

163
93
—
—
150
407

103
61
248
19
698
1,129

669
2
36
445
1,153
7,864

398
—
—
556
954
7,765

—
78
22
101

51
24
—
75

138
184
234
6
5
569
7,395
1,898
125
2,023
5,372
(93)
5,465

725
291
93
—
—
1,110
6,730
1,756
(187)
1,569
5,161
195
4,966

Consolidated Statement of Comprehensive Income(Millions of yen)

FY20195,372

FY2020
5,161

(363)
—
(138)
(212)
(72)
(787)
4,584

83
24
(31)
3,339
51
3,466
8,628

4,680
(95)

8,431
196

Net income
Other comprehensive income:Unrealized holding gains on other securities
Variance of land revaluation
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income of affiliates in equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to
Owners of parent
Non-controlling interests

Consolidated Statement of Cash Flows(Millions of yen)

FY2019Cash flows from operating activities:
Income before income taxes and non-controlling interests
Depreciation and amortization
Loss on impairment of fixed assets
Gain on sales of investment securities
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in reserve for construction loss
Increase (decrease) in provision for product repair costs
Increase (decrease) in provision for net defined benefit liability
Increase (decrease) in provision for retirement
benefits for directors (and other officers)
Extra retirement payments
Interest and dividend income
Interest expense
Foreign exchange (gain) loss
Business structure improvement expenses
Subsidies for employment adjustment
Loss (gain) on liquidation of subsidiaries and associates
Equity in losses (gain) of affiliates(Increase) decrease in trade notes and accounts receivable(Increase) decrease in inventories
Increase (decrease) in trade notes and accounts payable(Increase) decrease in other current assets
Increase (decrease) in other current liabilities
Other
Sub-totalInterest and dividends received
Interest paid
Business structure improvement expenses paid
Extra retirement payments
Proceeds of subsidies for employment adjustment
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Purchases of investment securities
Proceeds from sales of investment securities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of intangible assets
Expenditures for acquisition of investments in an affiliate(Increase) decrease in short-term loans receivable
Other
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Increase (decrease) in short-term bank borrowings
Proceeds from long-term debt
Repayment of long-term debt
Proceeds from issuance of bonds
Redemption of bonds
Purchase of treasury stocks
Purchase of shares of subsidiaries not resulting inchange in scope of consolidation
Proceeds from share issuance to non-controlling shareholders
Cash dividends paid
Other
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

FY2020

7,395
3,099
138
(78)
(35)
22
(450)
65

6,730
3,183
725
(24)
(260)
(5)
(114)
29

(59)

—

184
(257)
669
(19)
234
—
(15)
2
2,230
(461)
(2,837)
(26)
178
248
10,227
251
(674)
(5)
—
—
(1,102)
8,696

291
(164)
398
52
93
(211)
—
(248)
(2,651)
183
3,857
(795)
783
457
12,311
186
(400)
(93)
(184)
203
(3,140)
8,882

(60)
180
(3,058)108(599)(1,153)(0)437(4,144)(254)
86(3,253)
316
(263)
—
(1)
10
(3,358)(3,141)
6,650(7,811)
300
(30)
(0)

(4,685)
6,890(6,880)
—
(60)
(0)

(216)

—

196
(208)
(617)
(4,879)
(167)
(495)
4,721
4,225

—
(447)
(476)
(5,661)
(1)
(139)
4,225
4,086

SWCC SHOWA HOLDINGS CO., LTD.

58

Financial/Company Profile Section

Company Information (as of March 31, 2021)
Company Profile
Corporate Name

SWCC SHOWA HOLDINGS CO., LTD.

Date of Establishment

May 26, 1936

Paid-in Capital

24,221 million yen

Head Office

Cube Kawasaki Building, 1-14, Nissin-cho, Kawasaki-ku, Kawasaki-city, Kanagawa 210-0024, Japan+81-44-223-0520

Number of Employees(consolidated basis)

4,319

Stock Exchange Listing

Tokyo Stock Exchange, Inc. (TSE First Section) “SWCC SHOWA HOLDINGS CO., LTD. (5805.T)”Line of BusinessHolding company

Fiscal Year End

March 31, every year

Principal Group Companies (as of October 1, 2021, planned)
Domestic

Production Sites in Japan• SWCC SHOWA CABLE SYSTEMS CO., LTD.
• SHOWA FURUKAWA CABLE CO., LTD.

Sagamihara Plant(SWCC SHOWA CABLE SYSTEMS CO., LTD.)AOMORI SHOWA ELECTRIC
CABLE CO., LTD.
Sendai Plant(SWCC SHOWA CABLE
SYSTEMS CO., LTD.)

Kofu Factory(FUJI ELECTRIC CABLE CO., LTD.)

Sendai Factory(SWCC SHOWA UNIMAC LTD.)

Aichi Factory(SWCC SHOWA CABLE
SYSTEMS CO., LTD.)

Ibaraki Factory(SWCC SHOWA CABLE
SYSTEMS CO., LTD.)• SWCC SHOWA UNIMAC LTD.
• FUJI ELECTRIC CABLE CO., LTD.
• AXIO Corporation• SDS Corporation• LOGIS-WORKS CO., LTD.
• AOMORI SHOWA ELECTRIC CABLE CO., LTD.
• SHOUKOU EQUIPMENT INDUSTRY CO., LTD.

Ebina Factory(SWCC SHOWA CABLE
SYSTEMS CO., LTD.)• SHOWA SCIENCE CO., LTD.
• STEC (SHOWA TECHNICAL CORPORATION)

Mie Plant(SWCC SHOWA CABLE SYSTEMS CO., LTD.,
SWCC SHOWA UNIMAC LTD.)

Overseas

Isehara Factory(FUJI ELECTRIC CABLE
CO., LTD.)• SWCC SHOWA (H.K.) CO., LTD.
• SWCC SHOWA (SHANGHAI) CO., LTD.

Overseas Production Sites• SWCC SHOWA (VIETNAM) CO., LTD.
• JIAXING SHOWA INTERCONNECT PRODUCTS CO., LTD.

Tianjin• DONGGUAN SHOWA INTERCONNECT PRODUCTS CO., LTD.

SHOWA-TBEA (SHANDONG) CABLE ACCESSORIES CO., LTD. (STCA)• FUQING SHOWA PRECISION ELECTRONICS CO., LTD.
• SWCC SHOWA VIETNAM INTERCONNECT PRODUCTS CO., LTD.
• AXIO (SHANGHAI) Corporation

Shandong
JiaxingHangzhou• FUTONG SHOWA WIRE & CABLE (HANGZHOU) CO., LTD.
• FUTONG-SHOWA ELECTRIC WIRE & CABLE (TIANJIN) CO., LTD.
• SHOWA-TBEA (SHANDONG) CABLE ACCESSORIES CO., LTD.
• HUA HO ENGINEERING CO., LTD.

Hanoi City

Dongguan

FuqingHong Kong

Hung Yen Province

JIAXING SHOWA INTERCONNECT PRODUCTS CO., LTD. (JSIP)
Shanghai

FUTONG SHOWA WIRE & CABLE (HANGZHOU) CO., LTD. (FSH)
FUQING SHOWA PRECISION ELECTRONICS CO., LTD. (SSD)
DONGGUAN SHOWA INTERCONNECT PRODUCTS CO., LTD. (DSIP)HUA HO ENGINEERING CO., LTD. (HHE)SWCC SHOWA VIETNAM INTERCONNECT PRODUCTS CO., LTD.
SWCC SHOWA (VIETNAM) CO., LTD.

59

SWCC Group ReportHistory and Future of the SWCC GroupA Strategy to Hone Trust and Technology to Achieve Growth

Efforts to Build a Business Foundation

Financial/Company Profile Section
Company Information/Stock and Investor Information

Stock and Investor Information (as of March 31, 2021)
Status of Stock

Distribution of Shares

Total Number of Authorized Shares

70,000,000 shares

Total Number of Issued Shares

30,826,861 shares

Number of Shareholders

Distribution of Shares by Type of Ownership

12,171

Principal Shareholders (Top 10)

Total

30,826,861 shares

Number of Percentage ofshares held shareholding(Thousand shares)(%)

Name of shareholders

BANK OF CHINA (HK) LIMITEDCUSTODY ACCOUNT

5,714

19.1

Custody Bank of Japan, Ltd. (trust account)

4,653

15.6

The Master Trust Bank of Japan, Ltd.
(trust account)

2,875

9.6

BNP PARIBAS SECURITIES SERVICES LUXEMBOURG/JASDEC/FIM/LUXEMBOURG FUNDS/UCITS ASSETS

1,170

3.9

ENEOS Holdings, Inc.

979

3.2

Fukoku Mutual Life Insurance Company

772

2.5

FT Corporation

578

1.9

329

1.1

297

0.9

293

0.9

INTERNATIONAL CORE EQUITY PORTFOLIODFA INVESTMENT DIMENSIONS GROUP INC
NOMURA PB NOMINEES LIMITEDOMNIBUS-MARGIN (CASHPB)
Custody Bank of Japan, Ltd.
(trust account 5)

Individuals and others

19%

Foreign investors

37%

Financial institutions 34%
Other companies in Japan 8%
Securities companies 2%

Distribution of Shareholders by Number of Shares Held

Less than 100 shares 15%
Total

12,171 persons

100 shares or more

63%

500 shares or more

10%

1,000 shares or more 10%
5,000 shares or more

2%

*Besides the above, there are 996,224 shares of treasury stock held by
the Company.
*The percentage of shareholding is calculated after deducting the numberof treasury stock from the total number of issued shares.

Stock Price Movements
(yen)

1,800
1,600
1,400
1,200
1,000
800
600
0

Apr. 2019

Sep. 2019

Mar. 2020

Sep. 2020

Mar. 2021

From the publisher on issuance of the “SWCC Group Report, Integrated Report 2021”
Thank you for reading the “Integrated Report 2021.”
This is the second year to issue our integrated report. We have made some improvements on this report, reflecting yoursuggestions received on the first year’s report. While our contributions are not enough yet, there are still more areas
where the SWCC Group can contribute to solving social challenges mainly including environmental issues. Continuing
down-to-earth business activities, we strive to issue the reports with more substantial contents.
We sincerely hope this integrated report to be useful to you all.
September 2021

Futoshi Yamaguchi

Managing Executive Officer, General Manager of Business Management Coordination Department
SWCC SHOWA HOLDINGS CO., LTD.

SWCC SHOWA HOLDINGS CO., LTD.

60

SWCC SHOWA HOLDINGS CO., LTD.
CSR Promotion Office, Administrative Management Division
1-14, Nissin-cho, Kawasaki-ku, Kawasaki-city, Kanagawa 210-0024, Japan (Cube Kawasaki Building 2F)
Phone: +81-44-223-0521
Fax: +81-44-223-0549