CORPORATE REPORT 2017

CONTENTS
Message2
Zeon’s information disclosure

Zeon Products Making
3 Contributions to Society
Highlight 1

S-SBR in tire helps
fight climate change

3Highlight 2

Zeon’s energy materials supporting
lithium-ion batteries

5

Zeon material and component products
making contributions to society

7Company Profile

9

Zeon Group History

11

Business Overview

13

Zeon Group Locations

15

19 Zeon’s Business and Strategy
2016–2017 Topics

20

Interview with the President/
New Mid-Term Management Plan Toward
the Enterprise Blueprint for 2020

21

Elastomer Business

27

Specialty Materials Business29

Research and Development (R&D)

31

Corporate Governance

33

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

Website▶ http://www.zeon.co.jp/index_e.html
WebsiteCompany Information

CSR Activities

CSR Report

Zeon GroupCSR REPORT 201735 Zeon’s CSR
Zeon’s CSR

36

Environment

37

Safety38

Labor Practices

39

Fair Operating Practices

40

Community

41

IR Information

Corporate Report

Fact Book

CORPORATE REPORT 2017

All about Zeon! website 2017 (Japanese only)

All about Zeon! is a
special website featuring
interviews with employees
and Zeon TV commercials
broadcast regionally inJapan.

Editorial policy
Zeon Corporation and Zeon Group (“Zeon”) previously published a stand-alone CSR report. Since FY 2013, Zeon has published a booklet form of the CSR report renamed the
Corporate Report, which includes an annual report and corporate profile providing of overview of Zeon’s general business activities.
Highlights of the FY 2017 Corporate Report include an introduction to Zeon products that make contributions to society. The Corporate Report is divided into Zeon’s Businessand Strategy and Zeon’s CSR. Zeon’s Business and Strategy section describes the new SZ-20 Phase III mid-term management plan and Zeon’s value creation model. Zeon’s CSR
reviews social issues in the supply chain and includes updated reporting on initiatives based on ISO 26000.

Reporting period

Reporting scope

April 2016 to March 2017 (includes some information after April 2017)

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

1

ZEON GROUPCORPORATE REPORT 2017

Message

Corporate Philosophy

Zeon is contributing to the preservation of the
Earth and the prosperity of the human race
Zeon, with its name drawn from words signifying the Earth (geo) and eternity (eon),is committed to responsible stewardship of the global environment
as the foundation for human prosperity through the development
and application of unique, world-leading technologies.
Following our corporate philosophy, we have consistently released new products using our
pioneering, inimitable technologies. Zeon’s products are incorporated into customers’ final products
to support society through their presence all around us.
To fulfill our responsibility to society now and in the future, we are developing our business under
our enterprise blueprint for 2020 plan with the mission of “Zeon makes the future today through thepower of chemistry.”
Our new mid-term management plan starts in FY 2017 and finishes in FY 2020. As we wereembarking on this plan, our Kawasaki Plant and R&D Center were honored with a visit by His
Majesty the Emperor on July 7, 2017. This visit was a welcome opportunity to reaffirm our
responsibilities and enhance solidarity among Zeon employees of all ages and ranks. Taking to heart
the warm words of appreciation and encouragement that we received during this Imperial visit, we atZeon Group will work as a team to develop our business and boldly achieve our management plan sothat we may continue to contribute to the development of society.
We deeply appreciate your continued support and encouragement.

Naozumi Furukawa
Chairman
Zeon Corporation

ZEON GROUPCORPORATE REPORT 20172

Highlight 1 Zeon Products Making Contributions to Society

S-SBR in tire helps
fight climate change
Fuel efficiency is one important element
determining a vehicle’s value. Tires have a significant
impact on fuel efficiency. When driving on city streets,tires account for approximately 10% of a vehicle’s fuelefficiency. This increases to more than 20% whendriving at fixed speeds such as highway cruising speed.
Tires that meet a certain standard of performanceare called fuel-efficient tires. Zeon’s
solution-polymerized styrene-butadiene rubber(S-SBR) makes significant contributions to thisfuel-efficient performance.
Fuel-efficient tires typically weigh between 7 and 8
kilograms, of which approximately 10% is S-SBR. In
addition to rubber, tire manufacturers use a numberof materials combined with their own technologies tomake vehicle tires.
The diagram shows the different parts of a tire.
Zeon’s S-SBR is used in the tread that makes
contact with the road.

S-SBR is mainly
used here
Tread
ShoulderSidewallTire cross section

Bead●Driving condition and tire
contribution to fuel efficiency
Driving condition
Constant
driving speed
Driving oncity streets

Tire contribution (%)
to fuel efficiency
20 – 25%
7 – 10%Source: Tire Fair Trade Council (Japan) website (Japanese only)

http://www.tftc.gr.jp/performance/labeling●Tires are made from many materials

Zeon supplies S-SBR as one of the raw material rubber

S-SBR
S-SBR is shipped in 35-kg blocks. Tire
manufacturers then crush this and combine itwith other materials.

Tire manufacturers
Kneading / Parts creation / Molding /Vulcanization / Inspection / Shipment

Materials supplied from materials manufacturers
・Natural rubber
・Butadiene rubber
・Carbon black・Silica・Fiber・Sulfur・Wire・Compounding agents

What is rolling resistance?
A vehicle’s fuel efficiency is affected by its tires’ rolling resistance. As
the diagram on the right shows, there are three types of resistance.
Because about 90% of the resistance comes from tire deformation,
controlling tire deformation is key to reducing rolling resistance.
Zeon reduces tire deformation by controlling the molecular structureof S-SBR.

●Three types of rolling resistance affecting tires
during driving❸ Aerodynamic
drag❶ Tiredeformation

90% of resistance❷ Contact friction

3

ZEON GROUPCORPORATE REPORT 2017

Zeon’s S-SBR boasts three world-class properties❶ Wet grip performance

Stopping distance on wet surfaces⬇ Long

●Relationship between rolling resistance and stopping distanceon wet surfaces
When there is low rolling
resistance, wet grip
performance is low,
resulting in longer stopping
distance (good fuelefficiency but dangerous inrainy weather)

Short

⬆

Having too little rolling resistance is dangerous, becausetires will have poor wet grip performance and be slippery on
wet road surfaces. Generally speaking, rolling resistanceand wet grip have an inverse relationship—when one getsbetter, the other gets worse.
So tire manufacturers have been innovating in many
ways to develop tires with low rolling resistance and highwet grip performance, including rubber composition, tire
construction, and tread patterns.
Wear resistance is another important feature that tires
need in order to deliver long life.
Zeon’s S-SBR technology controls the molecular
structure of the rubber to achieve high performance in thethree aspects of wet grip, rolling resistance, and wear
resistance.

Low⬅

Rolling resistance❸rolling resistance❷ Low(better fuel efficiency)

Just the right softness
to grip wet roads

If the drag against a vehicle’s motion is low,
fuel consumption will also be low

Rubber softness when braking is regulated bycontrolling the ratios of styrene and butadiene, two
raw materials of S-SBR, and butadiene bonding
types.

The coupling agents at the middle and the end of
S-SBR molecule disperse the right amount of thereinforcing fillers (carbon black and silica).

➡High

When there is high rolling
resistance, wet grip
performance is high,resulting in shorter stopping
distance (poor fuel efficiency
but safe in rainy weather)

Wear resistanceTires better able to withstandfriction will last longer

The size of rubber molecules primarily affects wear
resistance, and S-SBR regulates rubber molecule
size and branching.

●S-SBR andreinforcing fillers

CB

Reinforcing fillers

Coupling
agent

CB: Carbon black
Powdered carbon. Blended withrubber to make it stronger
Si: Silica
Powdered silicon dioxide (SiO2).
Blended with rubber to make it
softer and lower rolling resistance
while improving wet grip
performanceSi

Coupling agent

BR
S-S

Si

Reducing vehicle CO2 emissions with fuel-efficient tires
Comparing the lifecycle CO2 emissions of fuel-efficient tires and standard tires from raw materials production to disposal, fuel-efficient tires
reportedly have 19% lower CO2 emissions*. Zeon is contributing to reducing overall vehicle CO2 emissions by improving the performance of
fuel-efficient tires with S-SBR.
* Tyre Life Cycle CO2 Calculation Guidelines, Ver. 2 (Japan Automobile Tyre Manufacturers Association)

ZEON GROUPCORPORATE REPORT 20174

Highlight 2 Zeon Products Making Contributions to Society

Zeon’s energy materials
supporting lithium-ion batteries
Today’s smartphone batteries have greater
capacity, output, and operating life than yesterday’s
cell phones. Lithium-ion rechargeable batteries arealso used in electric and hybrid vehicles. These
batteries have been adopted in vehicles because of
their recognized safety performance.
In the growing lithium-ion rechargeable batteriesmarket, we have been focusing on the potential ofbinders used in the batteries. Zeon’s energy
materials are one factor contributing to thewidespread use of lithium-ion rechargeable batteries
today.

Growing lithium-ion rechargeable
battery market for automobiles
Lithium-ion rechargeable batteries werecommercialized in 1991, and their market has
grown from their contributions to the spread ofdesktop and laptop computers as well as cell
phones. Lithium-ion batteries were first used in
vehicles in 2010, and by 2016 the automotive
battery market quickly grew to about the same sizeas the mobile electronics battery market. The highgrowth seen in the automotive lithium-ion
rechargeable battery market is expected to increase
further with the rising number of hybrid and electricvehicles in the market. The markets where Zeon’s
energy materials can make contributions are also
expected to expand.

●Growth in Battery Market of the Automotive andMobile Electronics
Mobile applications

Automotive applications（MWh）●PHV & EV Sales Forecast by Automaker(1,000 units)

4,000
200,000

3,500
3,000

150,000■China and Asia

4 million units

Expanded Adoption in
Automotive Applications

2,500
2,000

100,000

1,500
1,000 0.72 million units

50,000

500

11

12

13

14

15

16

17

18

19

20 (FY)

Source: B3 Report, November 15–16

5■Europe ■North America

4,500

250,0000■JapanZEON GROUPCORPORATE REPORT 2017

0

2016

2017

2018

2019

2020 (FY)

Source: Zeon estimates based on B3 ReportZeon’s Energy Materials
Safety valve

Positive terminal

GasketSealants

Separator

Compounds for coating the gasket surface of cylindricallithium-ion batteries to increase the adhesive propertiesof the cylinder’s exterior and cap.
Zeon’s sealants offer excellent heat resistance, cold
resistance, and electrolyte resistance. They help
prevent battery leakage to preserve battery
performance and extend operating life.

Anode tabCathodeMetal case➡Contributing to longer life

Cathode tab

Anode
Cathode binder
Aluminum foil

Active material

Cathode and anode binders

Anode binder
Separator

Active material

Copper foil

Anode active
materials

Cathode active Conductive
materials
additive

Sealants

Functional Layer Binders

Lithium-ion rechargeable batteries comprise cathodematerials made from metal oxide including lithium, anodematerials that attract lithium ions, the electrolyte thattransfers the lithium ions between the cathode andanode, and a separator that electrically separates thecathode and anode. The basic function of the cathodeand anode binder is to bind the cathode and anodeparticulate material to the electrodes. Binders havereceived attention recently for their ability to control
interface reactions with the active material and theelectrolyte solution.
Zeon’s binders create the right amount space in theactive material for lithium ions to pass and areresistant to volume expansion and shrinking frombattery charging and discharging.

➡Contributing to longer life

Zeon’s binders not only bind, they support thechemical reactions occurring on the surface of theactive materials. This enhances the reactions toincrease battery output.

❶Preventing electrode volume expansion
12
Electrode swelling rate (%)➡Contributing to higher output

Condition
Charge: 4.2V,1C
Discharge: 3.0V,1C
Temperature: 60℃
Loading 13mg/c m2
Density 1.50g/c m3

10
8
6
4

Conventional product
Functional Layer Binders

New product2※Swelling rate of electrode
thickness after pressing0
After pressing

After vacuum
dryingAfter immersion

After 1 cycle After 100 cycles

To meet the growing needs for safety, battery structuresthat separate the heat-resistant layer or coat the electrodesurfaces to prevent internal short circuits have beencommercialized.
Zeon started this development in 2003 and releaseda binder for the heat-resistant layer in 2005. We are
expanding sales of this binder mainly for automotive
applications. In 2013, we released a slurry for theheat-resistant layer.

❷Improving electrolyte impregnation

Solution absorption time (sec.)Long●Preventing thermal contraction of the separator
with a functional layer binder

Conventional
product

Zeon’s binders
quickly absorb electrolyte
solution even whenelectrode density is highThermal contraction test (150℃ for 1 hour)

New product

Short
Low

Electrode density (g/cm3)

High

With binder
Resistant to contraction(1.3% contraction)

Without binder
Contracts

ZEON GROUPCORPORATE REPORT 20176

Zeon Products Making Contributions to Society

Zeon material and products
making contributions tosociety
The value created by Zeon’s materials and products contribute to society in many ways.
Here are just a few examples.

GlobalEnvironment

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

Solution-polymerized
styrene-butadiene rubber(S-SBR):

Biosynthetic
epichlorohydrin rubber(ECO):

Improves the performance of
fuel-efficient tires andcontributes to energy
conservation and reduced CO2
emissions.

The first biosynthetic rubber
adopted in automotive vacuum
sensing hoses. Contributes toreduced lifecycle CO2
emissions by switching fossil
fuel-derived materials toplant-derived materials.

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

Prohydrojasmon
plant growth regulator:

ZEOCOATⓇ
Coating-type insulating andprotective layer for displays:

Reduces declines in the production
volume and quality of agricultural
products due to the effects of climatechange (Jasmomate® Ekizai
agrochemical formulation).

With high transparency, lowmoisture absorption, and low
dielectric constant, contributes toreduced environmental impacts byimproving display performanceand extending the life of electronics
components.

ZEORORAⓇ H
HFC solvent:Contributes to climate change
prevention as an alternative
HFC solvent.
Ⓡ

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

7

ZEON GROUPCORPORATE REPORT 2017

OMe

Cyclopentyl methyl ether(CPME)
Hydrophobic ether solvent:Low environmental impact
since it is easily recovered after
use as a solvent and little isdisposed of in wastewater.

Improved
Performance

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

Health and
LivingZeon’s materials, components,
and products are useful indaily life and benefit healthand well-being.
Synthetic aroma chemicals:
The raw materials are derived
from fossil fuels but have thesame chemical structure as
natural aromas. They are usedin foods, cosmetics, and otherproducts.

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

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

Used in elastic film fordisposable diapers to achieve
lighter weight and greater
comfort.

Synthetic latex for gloves:
Due to concern about allergic
reactions from proteins foundin natural rubber, demand is
shifting from natural tosynthetic rubber gloves madewith NBR latex and the market
is expanding.

Cyclo-olefin polymers:
COP are used in prefilled
medical syringes andcontribute to increased safety
in medical settings. With
properties including lightweight, high strength,transparency, high purity, andlow protein absorption.

ZEOGLOBULETM
Polymerized toner:
The world’s firstindustrialized polymerized
toner. Contributes toimproving resolution andprint speed with its
uniform spherical capsule
structure.

Intravascular pressure-sensing guidewires:
Zeon’s guidewires help lessen
patients’ pain and healthcare
professionals’ workloads,
because treatment decisions
can be accurately made using
sensors and a monitor.

Catheters for removal ofbile duct stones:
Zeon’s catheters help lessen
patients’ pain and healthcare
professionals’ workloads, witha strong reputation intreatment to remove bile ductstones.

ZEON GROUPCORPORATE REPORT 20178

Company Profile
Name: Zeon Corporation
Established: April 12, 1950
Capital: 24.211 billion yen (as of March 31, 2017)Market capitalization: 172.5 billion yen (as of March 31, 2017)
Total number of shares outstanding: 237,075,556 shares
Employees: 3,090 (consolidated)
1,590 (non-consolidated) (as of March 31, 2017)
Business segments: Elastomer Business, Specialty Materials
Business, other businesses（➡P13）
Head Office: Shin Marunouchi Center Building, 1-6-2
Marunouchi, Chiyoda-ku, Tokyo 100-8246, Japan
Plants: Takaoka Plant, Kawasaki Plant, Tokuyama Plant,
Mizushima Plant
Research laboratories: R&D Center (Kawasaki)
Offices: Osaka Office, Nagoya Office

Consolidated net sales(million JPY)

350,000
300,000
250,000

296,427

307,524

295,647

287,624

2013

2014

2015

2016 (FY)29,85630,76720152016 (FY)250,763

200,000
150,000
100,000
50,00002012

Subsidiaries and affiliates in Japan（➡P17）：
Tokyo Zairyo Co., Ltd., Zeon Kasei Co., Ltd.,
Zeon North Co., Ltd., Zeon Yamaguchi Co., Ltd.,
Zeon F&B Co., Ltd., Zeon Chemicals Yonezawa Co., Ltd.,RIMTEC Corporation, Zeon RIM Co., Ltd.,
Zeon Medical Inc., Optes Inc., TFC Inc.,
Zeon Polymix Inc., Tohpe Corporation,
Zeon Nano Technology Co., Ltd., ZS Elastomers Co., Ltd.,
Okayama Butadiene Co., Ltd., ZIS Information Technology Co., Ltd.

Consolidated operating income(million JPY)

35,00029,901

30,00025,00028,24523,69620,000Subsidiaries and affiliates outside Japan（➡P13）：
Zeon Europe GmbH, Telene S.A.S.
【Europe】

Zeon Chemicals L.P., Tokyo Zairyo (USA) Inc.
【USA】

15,00010,000

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

5,000

Tokyo Zairyo México S.A. de C.V.

0

Zeon do Brasil Ltda
【Brazil】

2012

2013

2014

Zeon (Shanghai) Co., Ltd., Shanghai Zeon Co., Ltd.,【China】
Zeon Trading (Shanghai) Co., Ltd.,
Zeon Polymix (Guangzhou) Co., Ltd.,
Suzhou Rui Hong Electronic Chemicals Co., Ltd.,
Zeon Kasei (Changshu) Co., Ltd., Zeon Medical (Guangzhou) Inc.,
Takehara Zeon (Shanghai) Co., Ltd., Tokyo Zairyo (Shanghai) Co., Ltd.,

Segment net sales (outer circle) and operating income (inner circle)

Tokyo Zairyo (Tianjin) Co., Ltd., Tokyo Zairyo (Guangzhou) Co., Ltd.
Zeon Korea Co., Ltd., Zeon Shinhwa (Zeshin) Inc.
【South Korea】
Zeon CSC Corporation【Taiwan】

Zeon Chemicals Singapore Pte. Ltd.,【Singapore】
Zeon Asia Pte. Ltd., Tokyo Zairyo (Singapore) Pte. Ltd.
Zeon Chemicals (Thailand) Co., Ltd.,【Thailand】
Zeon Advanced Polymix Co., Ltd.,Tokyo Zairyo (Thailand) Co., Ltd.
Zeon Manufacturing Vietnam Co., Ltd.,【Vietnam】
Zeon Research Vietnam Co., Ltd.,Tokyo Zairyo (Vietnam) LLC.
Zeon Asia Malaysia Sdn. Bhd.
【Malaysia】

Zeon India Private Limited, Tokyo Zairyo (India) Pvt. Ltd.
【India】
PT. Tokyo Zairyo Indonesia【Indonesia】

9

ZEON GROUPCORPORATE REPORT 2017

Other Businesses

17%
Specialty Materials
Business

26 %

9%
30 %

FY

2016

62 %

Elastomer Business57%

Shareholder information (as of March 31, 2017)

Dividends

Treasury stock(JPY)

15,093,000 shares20（6.4％）

Financial institutions &securities companies

Individuals & others

15

93,321,000 shares

21,954,000 shares

12（39.4％）（9.2％）

13

14

15

16

10

Foreign investors

48,211,000 shares（20.3％）

Other domestic
institutional investors

58,494,000 shares（24.7％）

Share price (closing price on March 31)

0

2012

2013

2014

2015

2016 (FY)Market capitalization (as of March 31)(100 million JPY)

(JPY)

1,500

1,271
1,110

1,000

5

974

3,500

3,013

3,000
2,500

2,687
2,358

2,261

2,000

934

1,725

1,500

728
500

1,000
500

0

2012

2013

2014

2015

2016 (FY)

0

2012

2013

2014

2015

2016 (FY)

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

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

(1,000 tons)

1.00
0.95

900

0.95

0.95

0.90
0.85

0.82

0.91

800
700
600

0.85

601

640

675

724

655

500

0.80

400

0.75

300

0.70

200
100

0

2012

2013

2014

2015

2016 (FY)

0

2012

2013

2014

2015

2016 (FY)ZEON GROUPCORPORATE REPORT 201710

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

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

Timeline of main businesses
and product development

1960

1970

1980

Processed
Products

1990

Powder slush compounds (PSC)

Polyvinyl chloride resins

Medical
Devices

Latex(for paper coating)Hollow latex(paper coating)

VP latex(tire cord)

Specialty Synthetic Rubbers(NBR & ACM for auto parts)

C4

Ventricular assist device

Hydrogenated NBR(Zetpol®)

Toner

Synthetic Rubbers for Tires(SBR & BR for tires)

Polymerized toner

General-purpose synthetic rubberwith modified terminals

C5
C5 petroleum resin(roadmarking paints)

Chemicals

Isoprene rubber(tires)Specialty
Chemicals

SIS thermoplastic elastomer(adhesives)

Synthetic aroma chemicals(leaf alcohol)

Synthetic aroma chemicals(jasmine aroma chemicals)

Fluorinated C5

Electronics Materials

Specialty Plastics
Cyclo-olefin polymers(lenses, prisms)

Dicyclopentadiene

RIM
RIM molded items and formulation(large plastic products)

11

ZEON GROUPCORPORATE REPORT 2017

Developing more advanced materials and establishingleading manufacturing technologies
In recent years, needs have grown for products withadvanced functions that offer higher energy efficiency inresponse to environmental problems, and similar expectations
are rising for chemical materials. To meet these expectations,
Zeon developed Zetpol® hydrogenated nitrile rubber, which
provides high functionality at a competitive cost and is usedin automotive engine components and other applications withharsh working conditions. In addition, cyclo-olefin polymers,
developed from comprehensive use of C5 fractions, arehigh-performance materials used in optical films, such as for
LCD panels and lenses, and in electrical insulation.

Developing comprehensive uses for C5 fractions
Isoprene rubber is a useful material with the same chemical
stability as natural rubber. Many byproducts are derived fromthe process of extracting isoprene feedstock from C5
fractions. One advantage of the GPI process is the ability to
extract these byproducts at a high degree of purity. Zeon has
focused on ways to effectively use these substances. As aresult, Zeon subsequently grew its business to include
petroleum resins and thermoplastic elastomer SIS in the
1980s, synthetic aroma chemicals and RIM molded productsin the 1990s, and cyclo-olefin polymers since the 2000s.
These businesses now enjoy a large share of the global
market. The technologies gained during this development
process are being used in other areas in addition to C5
fractions.

2000

2010

Enhanced low-temperature PSC(automobile instrument panels)

PVC business withdrawal

Balloon catheters (IABP)

4 core catheter products

Stents (bile ducts sheath)

NBR latex(gloves)

EnergyMaterials

Water-based anodebinder for mobile LIB※LIB：
Lithium-ion batteries

Solvent-based cathodebinder for mobile LIB

Functional layerbinder for mobile LIB

Anode and functional
layer binder for
automobile LIB

Water-based anodebinders for large-capacity
mobile batteries

Water-based
cathode binders

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

Polymerized color toner

Low-temperature fixing toner(high-speed printers)

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

Asymmetric SIS(elastic film for diaper)

Cyclopentanone(solvent and fine chemical raw material)

Photo resists

Cyclopentyl methyl ether (CPME)(eco-friendly solvent)Insulation materials

Cyclo-olefin polymers(commodity use)

Optical Films

LCD resists for large sized wafers

Cyclo-olefin polymers(blue laser)

Melt extrusion
process

Retardation films
by successive
stretching process

Retardation films
by diagonal
stretching process

High thermostability film
by diagonal stretching process(touch panels)

ZEON GROUPCORPORATE REPORT 201712

Business Overview
Zeon's main products are created from raw materials such as butadiene and isoprene, which are extracted from the C4 and C5
fractions of naphtha using proprietary Zeon technologies. Business segments are divided into the Elastomer Business, Specialty Materials
Business, and other businesses.

C2 fractions Ethylene
C3 fractions Propylene

Main Products
Synthetic rubbers

C4
fractions

GPB
process

Butadiene
Synthetic latexes

Synthetic rubbers
Isoprene

Crude oil

NaphthaThermoplastic
elastomers
GPB process: Proprietary Zeon technology to extract
highly pure butadiene from C4 fractions

Petroleum resins
Piperylene
Petroleum resins

C5
fractions

GPI
process

Dicyclopentadiene

RIM compound

Specialty plastics

2-butyne

GPI process: Proprietary Zeon technology to extract highly
pure isoprene and other useful components
from C5 fractions

Synthetic aroma
chemicalsElectronics materials

Energy materials

Medical devices

Carbon nanotubes

13

ZEON GROUPCORPORATE REPORT 2017

Applications

Elastomer Business

Tires

Gloves for medical use
and food processing

Elastomer Business

Automobile
components

Cosmetic
puffs

Tires

Adhesives

Adhesives

Traffic paints

Paints/coatings

Inks
Large-size
molding

Food additives

Toner

Binders for lithium-ion rechargeable batteriesSpecialty Materials BusinessElectronics materials

Specialty Materials
Business

Medicalcontainers

Optical films

Fragrances

Other

Housing equipment
and components

LensesIn 1959, Zeon became the firstcompany in Japan tomass-produce synthetic
rubbers. Even today, theElastomer Business is the corebusiness, providing 60% of total
net sales and operating income.
Main products
Synthetic rubbers, synthetic
latexes, chemical products(thermoplastic elastomers,
petroleum resins)

Medical catheters
Other

Single-walled carbon nanotubes,
composite materials

Specialty materials refer tomaterials and components withhigh added value that have amacromolecular design and aremade with processing
technology. The three main
business areas of the Specialty
Materials Business are IT
components, energy
materials, and medical devices.
Main products
High-performance resins andmaterials, electronics materials,
toners, battery materials,
medical devices

Social value created from C4 and C5

Automobile
components

Business Segments

P7

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

ZEON GROUPCORPORATE REPORT 201714

Zeon Group Locations

GLOBAL

as of September 30, 2017

EuropeChina

Zeon Europe GmbH

Zeon (Shanghai) Co., Ltd.

Hansaallee 249, 40549 Dusseldorf, Germany
TEL: +49-211-52670 FAX: +49-211-5267160

Room 1502, Hongwell International Plaza, No. 1600 ZhongshanWest Road, Xuhui District, Shanghai, 200235, China
TEL: +86-21-6167-5776 FAX: +86-21-6040-7258• Sales, export, and import of synthetic rubbers andresinsZeon Europe GmbH - Branch in France• Provide assistance and exercise control over the Zeon Group
companies in China with regard to such functions as
accounting, finance, personnel management, legal, etc.

22, rue Guynemer 78600 Maisons Laffitte, France
TEL: +33-1-39-12-75-20 FAX: +33-1-39-12-75-26

Shanghai Zeon Co., Ltd.

Zeon Europe GmbH - Branch in Spain
C/Beethoven, 15, 4O08021 Barcelona, Spain
TEL: +34-93-183-87-08 FAX: +34-93-183-87-58

Zeon Europe GmbH - Branch in Italy
Via Mauro Macchi, 27, 20124 Milano, Italia
TEL: +39-02-36680101 FAX: +39-02-36680124

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

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

Zeon Trading (Shanghai) Co., Ltd.
Room 1501, Hongwell International Plaza, No. 1600 ZhongshanWest Road, Xuhui District, Shanghai, 200235, China
TEL: +86-21-6040-7255 FAX: +86-21-6040-7258• Purchase and sales of synthetic rubbers, chemical
products, and other products (including international trade)

Zeon Polymix (Guangzhou) Co., Ltd.
Jing Quan 1st Road, Yong He Economic Zone, Guangzhou,
511356, China
TEL: +86-20-3222-1171 FAX: +86-20-3222-1820

Suzhou Rui Hong Electronic Chemicals
Co., Ltd.
No. 501, Minfeng Road, Economic Development Zone,
Wuzhong District, Suzuhou City, Jiangsu, 215128, China
TEL: +86-512-6921-7666 FAX: +86-512-6921-7555• Manufacture and sales of photo resists

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

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

Takehara Zeon (Shanghai) Co., Ltd.
No. 380 Shennan Road, Xinzhuang Industrial Zone, Minhang
District, Shanghai, 201108, China• Manufacture and sales of silicon rubber compounds (CM)• Manufacture and sales of rubber compounds (CM)India

VietnamZeon India Private Limited

Zeon Manufacturing Vietnam Co., Ltd.

Time Tower, Unit No.507, Sector-28, M.G Road,
Gurgaon-122002, Haryana, India
TEL: +91-124-4229461 FAX: +91-124-4229462

No.109, Road No.10, VSIP Haiphong Township, Industrial andService Park, Dinh Vu-Cat Hai Economic Zone, Thuy Nguyen
District, Haiphong City, Vietnam
TEL: +84-225-3797-027 FAX: +84-225-3797-028• Import, sales, and marketing of synthetic rubbers andother Zeon products• Manufacture and sales of packing containers

Tokyo Zairyo (India) Pvt, Ltd.

Zeon Research Vietnam Co., Ltd.

Time Tower, Unit No.507, 5th floor, Sector-28, M.G Road,
Gurgaon-122002, Haryana, India
TEL: +91-124-424-9011 FAX: +91-124-424-9005

6th Floor, Building 85 Nguyen Du Str., Hai Ba Trung District,Hanoi, Vietnam 100000
TEL: +84-4-3632-0557 FAX: +84-4-3632-0557• Purchase and sales of synthetic rubbers, chemical
products, and other products (including international trade)ThailandZeon Chemicals (Thailand) Co., Ltd.
3 Soi G-14, Pakorn-Songkhrorad Road, Tambol Huaypong,
Amphur Muangrayong, Rayong 21150, Thailand
TEL: +66-3-868-5973~5 FAX: +66-3-868-5972• Design simulation of optical materials and molded
products, and market research for Zeon products inSoutheast Asia

Tokyo Zairyo (Vietnam) LLC.
4th Floor, Building 85 Nguyen Du Str., Hai Ba Trung District,Hanoi, Vietnam 100000
TEL: +84-4-3941-3825 FAX: +84-4-3941-3826

Singapore
Zeon Chemicals Singapore Pte. Ltd.
100 Banyan Drive, Jurong Island, Singapore 627571
TEL: +65-6933-4400 FAX: +65-6933-4413• Manufacture and sales of synthetic rubbers• Manufacture and sales of petroleum resins• Purchase and sales of synthetic rubbers, chemical
products, and other products (including international trade)

Zeon Advanced Polymix Co., Ltd.

Malaysia

331 North Bridge Road, #20-01/02, Odeon Towers,
Singapore 188720
TEL: +65-6332-2338 FAX: +65-6332-2339

Zeon Asia Malaysia Sdn. Bhd.

• Sales, export, and import of synthetic rubbers,
synthetic latex, and petroleum resins

591 UBCII BLDG, Office No.2206, 22thFL, Sukhumvit 33rd,
Klongton Nua, Wattana, Bangkok 10110, Thailand
TEL: +66-2-261-0175 FAX: +66-2-261-0172• Manufacture and sales of rubber compounds (CM)

Unit 208, Block B, Phileo Damansara II, No.15, Jalan16/11, Off
Jalan Damansara, 46350 Petaling Jaya, Selangor, Malaysia
TEL: +603-7956-7069 FAX: +603-7957-1758

Tokyo Zairyo (Thailand) Co., Ltd.

• Sales of synthetic latexes

29th Floor Room 2903, Empire Tower 1 South Sathorn Rd.,
Yannawa, Sathorn, Bangkok 10120, Thailand
TEL: +66-2-670-0285 FAX: +66-2-670-0283• Purchase and sales of synthetic rubbers, chemical
products, and other products (including international trade)

15

ZEON GROUPCORPORATE REPORT 2017

Zeon Asia Pte. Ltd.

Tokyo Zairyo (Singapore) Pte. Ltd.
331 North Bridge Road, #20-01/02, Odeon Towers,
Singapore 188720
TEL: +65-6337-5053 FAX: +65-6337-4557• Purchase and sales of synthetic rubbers, chemical
products, and other products (including international trade)We are continuing to globalize our business operations, having first turned our attention to global markets in the 1970s. We are setting up
sales networks in major markets around the world and establishing a production system for rubber and resin products. In addition, we
have R&D facilities in the USA and Europe capable of quickly meeting local needs. We are also establishing R&D and sales locations in
China, a market that is growing rapidly. We are aiming to be a company that, through our local production systems, builds close ties withlocal communities and contributes to the global society.
USA
Tokyo Zairyo (Shanghai) Co., Ltd.

Zeon Chemicals L.P.

Zeon Chemicals L.P. - Texas Plant

Room 1503, Hongwell International Plaza, West Zhongshan
Road 1600, Xuhui District, Shanghai, 200235, China
TEL: +86-21-6119-9400 FAX: +86-21-6119-9401

4111 Bells Lane, Louisville, Kentucky 40211, U.S.A.
TEL: +1-800-735-3388 FAX: +1-502-775-2055
TEL: +1-502-775-2000

11235 Choate Road, Pasadena, Texas 77507, U.S.A.
TEL: +1-281-474-9693 FAX: +1-281-474-0966• Purchase and sales of synthetic rubbers, chemical
products, and other products (including international
trade)

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

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

Zeon Chemicals L.P. - West Coast Office
5 Centerpointe Drive 4th Floor Suite 401 Lake Oswego,OR, 97035, U.S.A.
TEL: +1-971-204-0245 FAX: +1-971-204-0240

Zeon Chemicals L.P. - Kentucky Plant
4100 Bells Lane, Louisville, Kentucky 40211, U.S.A.
TEL: +1-502-775-7600 FAX: +1-502-775-7614

Zeon Chemicals L.P. - Mississippi Plant
1301 West Seventh Street, Hattiesburg, Mississippi 39401,
U.S.A.
TEL: +1-601-583-6020 FAX: +1-601-583-6032

PT. Tokyo Zairyo Indonesia

Zeon Kasei Mexico S.A. de C.V.

Gedung MidPlaza 2, Lantai 12, Jl. Jend. Sudirman Kav.
10-11,Jakarta 10220
TEL: +62-21-574-6454 FAX: +62-21-573-5661

Avenida Santiago Sur 100, Los Jassos, San Luis Potosi,
San Luis Potosi, MEXICO, C.P.78420
TEL: +52-1-444-478-5400• Purchase and sales of synthetic rubbers, chemical
products, and other products (including international trade)• Manufacture and sales of resin compounds for
powder slush

South Korea

Tokyo Zairyo México S.A. de C.V.

• Sales and import of optical materials, imaging andelectronics materials, synthetic resins, and synthetic
rubbers, etc.

Zeon Shinhwa (Zeshin) Inc.
No.502 CALT B/D (City Airport）
22, Teheran-ro 87-gil,Gangnam-gu, Seoul, 06164, Korea
TEL: +82-2-761-7030 FAX: +82-2-786-7221• Purchase and sales of synthetic rubbers, chemical
products, and other products (including international
trade)

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

MexicoNo.403, 4Fl., 36, Teheran-ro 87-gil, Gangnam-gu, Seoul,06164, Korea（City Air Tower, Samseong-dong）
TEL: +82-2-539-8565 FAX: +82-2-538-5190

50 Main Street, White Plains, New York 10606, U.S.A.
TEL: +1-914-285-9070 FAX: +1-914-285-9072

Zeon Chemicals L.P. - R＆D CenterIndonesia

Zeon Korea Co., Ltd.

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

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

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

• Sales of imaging and electronics materials

TaiwanZeon CSC Corporation
3rd Fl. 266, Sec. 1, Wen Hwa 2 Road, Linkou District, New
Taipei City 24448, Taiwan, R.O.C.
TEL: +886-2-2609-2156 FAX: +886-2-2600-6413• Sales of optical materials

ZEON GROUPCORPORATE REPORT 201716

Zeon Group LocationsJapan

as of September 30, 2017

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

17

ZEON GROUPCORPORATE REPORT 2017

Zeon Corporation – Kawasaki Plant
1-2-1 Yako, Kawasaki-ku, Kawasaki-ku,
Kanagawa 210-9507, Japan
TEL: +81-44-276-3700 (direct)
FAX: +81-44-276-3720

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

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

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

Zeon Corporation – Takaoka Plant
630 Ogino, Takaoka-shi, Toyama 933-8516,
Japan
TEL: +81-766-21-0252 (direct)
FAX: +81-766-21-8201
Zeon North Co., Ltd.
351 Ejiri, Takaoka-shi, Toyama 933-0062, Japan
TEL: +81-766-25-1111 FAX: +81-766-25-4059• Contracting, design, construction, andmanagement for various facilities; sales of industrial
materials and equipment, purchase and sale ofpetrochemical products; testifying environmental
measurements, measurement working
environment; conducting various analyses
Optes Inc.
422-1 Futagamishin, Takaoka-shi, Toyama
933-0981, Japan
TEL: +81-766-32-1590 FAX: +81-766-32-1591
Plants: Toyama, Fukui, Sano
• Manufacturing of optical film and optical parts;
design and manufacturing of mold

Zeon Corporation – Mizushima Plant
2767-1 Kojima Shionasu Aza Niihama, Kurashiki-shi,
Okayama 711-8511, Japan
TEL: +81-86-475-0021 FAX: +81-86-475-1169

Zeon Corporation – Osaka Office
Furukawa Osaka Bldg. West 4F, 2-1-9 Dojimahama,
Kita-ku, Osaka-shi, Osaka 530-0004 Japan
TEL: +81-6-4797-8220 FAX: +81-6-4797-8225

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

Tohpe Corporation
1-5-11 Chikkoshinmachi, Nishi-ku, Sakai-shi, Osaka
592-8331, Japan
TEL: +81-72-243-6411 FAX: +81-72-243-6415
Plants: Ibaraki, Mie, Kurashiki• Manufacturing and sale of paints and chemical
products

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

Zeon Polymix Inc.
1-11-1 Ishizue, Otsu-shi, Shiga 520-2272, Japan
TEL: +81-77-546-1223 FAX: +81-77-546-0338
Plants: Otsu
• Manufacturing compound of synthetic rubber(carbon masterbatches)

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

Zeon Kasei Co., Ltd. – Ibaraki Plant
1175 Kamiizushima, Bando-shi, Ibaraki 306-0654,
Japan
TEL: +81-297-34-2111 FAX: +81-297-34-2316• Manufacture of processed plastic products (PVC
compounds), powder rubbers, resin sheets, andlow-pollution resin sheet molded products

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

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

ZEON GROUPCORPORATE REPORT 201718

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

2016‒2017 Topics

P20

Interview with the President
New Mid-Term Management Plan Toward
the Enterprise Blueprint for 2020

P21

Business and Strategy
Elastomer Business

P27

Specialty Materials Business

P29

Research and Development (R&D)

P31

Corporate Governance

P33

19

ZEON GROUPCORPORATE REPORT 2017

2016–2017 Topics
The summary of Zeon’s major business developments from April 2016 to the first half of 2017.

●Germany▶P21

Shanghai●Kawasaki
●

■
ATSL

▶P28

▶P22

Start of mid-term management plan
SZ-20 Phase III

Asia Technical Support Laboratory(ATSL) opened in Singapore

Mexico plant began operations for
powder slush compound (PSC)In April 2017, Zeon Group started the new
mid-term management plan for the
four-year period until the end of FY 2020.
The plan aims to achieve the Enterprise
Blueprint for 2020 goal of 500 billion yen
in consolidated net sales by providing
solutions that combine Zeon products andservices.

In July 2017, ATSL opened in Singapore
to offer technical support to
manufacturers of oil seals and otherspecialized rubbers. ATSL enhances
Zeon’s technical services for specializedrubbers in the ASEAN and Indian regions,where growth in vehicles with internal
combustion engines is expected.

Zeon Kasei has constructed a plant in
Mexico to produce PSC used in
automotive dashboards. The plant began
full-scale operations in June 2017. The
plant supplies PSC for automotive
production in the growing North American
market.

▶P22

Expansion of Mizushima Plant
In July 2016, construction to increase theproduction capacity of Quintac ®
thermoplastic elastomers and ZEONEX ®
and ZEONOR ® cyclo-olefin polymers at
Mizushima Plant was completed.
Hydrogenation facilities for Quintone ®
petroleum resin were installed in July
2017.

▶P30

Prototype service launches for
production of microfluidic chips
In March 2017, Zeon began a prototype
production service for devices using
ZEONEX® and ZEONOR ® in the medical
and biotechnology fields.

▶P27

ZS Elastomer Co., Ltd. begins
operations for S-SBRZS Elastomer was established as a joint
venture between Zeon Corporation and
Sumitomo Chemical for solutionpolymerized styrene butadiene rubber(S-SBR) and began operations in April
2017. ZS Elastomer handles sales andresearch and development of S-SBR.

▶P22

Zeon Chemicals Singapore (ZCS)
completed second S-SBR productionline
A second S-SBR production line for ZCS
was completed in April 2016. The addition
increases its annual production capacityfrom 35,000 tons to a total of 70,000
tons. The S-SBR produced here is soldthrough ZS Elastomer.

▶P32

Multiple research centers established forsingle-walled carbon nanotubes (SWCNT)In July 2016, the Zeon–AIST Nanotube
Industrialization Cooperative ResearchLaboratory was established to conduct
production research on SWCNT. In February
2017, the Zeon Sunarrow AIST CNT Composite
Material Research Center was established with
Sunarrow and AIST to conduct research anddevelopment on SWCNT composite materials.

Development of pad-type thermalinterface material (TIM)
achieving low thermal resistanceZeon completed a pilot plant for massproduction of pad-type TIM using rubber/
SWCNT composite in February 2016, andfurther development is ongoing.

ZEON GROUPCORPORATE REPORT 201720

Interview with the President

New Mid-Term Management
Plan Toward the Enterprise
Blueprint for 2020
President Kimiaki Tanaka outlines where Zeon Group is
today and its outlook for the future in a Q&A format.

Kimiaki Tanaka
President
Zeon Corporation

Q.1 Could you summarize what Zeon achieved and did not achieve in the SZ-20 Phase II plan that finished at theend of fiscal 2016?

A.1 【Summary】Reforming our corporate culture is not as far along as we had planned. While Zeon’s Groupwide
sales have also not reached our target, the Elastomer Business has augmented its global sites
in growth markets and is undergoing reorganization to achieve greater growth. The Specialty
Materials Business has seen steady growth in the three key fields.

So I still see reforming our corporate culture as the mostimportant issue we face. When we were formulating our
Phase II plan, we talked about the need to change how we
as individuals think and do our work, and how ultimately weneed to change Zeon, which is made up of us as individuals,
to achieve large and disruptive growth unlike what we haveachieved in the past. And then we set about reforming ourcorporate culture. We have not yet arrived at where we want
to be, and this is the biggest piece we did not accomplish
before Phase II.
In terms of performance, Zeon’s Groupwide net sales
did not grow significantly, but the Elastomer and Specialty
Materials businesses, and Zeon Group, were reasonably
profitable (Fig. 1).
The Elastomer Business expanded its global sites, mainlyin the growth markets of India and Southeast Asia (Fig. 2). The
business also underwent reorganization with a joint venturewith Sumitomo Chemical and the closing of a UK plant.
Nonetheless, we are still not satisfied with our ability tomeet changing market conditions. We must develop valueadded, differentiated products that are not easily impacted
by market swings. And we need to further increase our costcompetitiveness.

21

ZEON GROUPCORPORATE REPORT 2017

●Fig. 1. Consolidated Results by Segment
Net sales ■Specialty Materials ■ Elastomers ■Others
Elastomers ◆Total
Operating income ●Specialty Materials
Net sales(billion JPY)

350

300

Consolidated net sales total in [ ]［296.4］

29.9
50.8

250

200

19.3

［307.5］

28.2
50.0

100

50

0

29.9
48.0

［287.6］

30.8
30

49.0

20.6

16.8
178.9

166.2

188.8
9.1

9.4

35

25

20.7

184.4
150

［295.6］

Operating income(billion JPY)

8.2

9.8

64.2

70.9

71.0

75.0

2013

2014

2015

2016 (FY)

20

15

10

5

0

●Fig. 2. The Elastomer Business has expanded its global footprint in growth markets and has been reorganized for growth■ Existing production base
■ New production base
● New sales base

U.K.
Ended NBR production
Plant closed
in March 2016

Japan (Mizushima Plant)
India

・SIS capacity expanded・Installed hydrogenation
facility for petroleum resin

Sales base
Establishedin July 2015

Singapore
S-SBR plant・Second Line began
operating in April 2016
・Oil extension facility began
operations in July 2017

Japan and Singapore
S-SBR Joint venture
launched with Sumitomo
Chemical in April 2017

MexicoPSC plant Established
Full-scale operations
in June 2017

Singapore
The Asia Technical Support
Lab. for Specialty rubber
began operating in July 2017

The Specialty Materials Business is focused on the three
key fields of IT components, energy materials, and medical
devices, and is showing steady growth (Fig. 3). Optical films
for IT components has become one major field of business
and where we have expanded our facilities. The field of energy
materials has also seen a lot of growth over the last three
years. We’ve expanded our product offerings from anodebinders for lithium-ion batteries to include cathode binders andbinders for functional layers. In the field of medical devices,
we’re seeing positive response for the FFR device we released
last year.
In 2015, we finished building the world’s first massproduction plant for single-walled carbon nanotubes. We have
set up a research center together with a number of companies
and groups are now working to develop applications for the
carbon nanotubes.
While it has had many successes, our Specialty Materials
Business as a whole has not managed to achieve dramatic
growth, and needs to develop new products and expand
production to reach the scale of our Elastomer Business.

NBR: Nitrile Rubber
S-SBR: Solution-polymerized Styrene Butadiene Rubber
PSC: Powder slush compound●Fig. 3. The three key fields of the Specialty
Materials Business Net sales index● Energy materials● IT components■ Medical devices(FY 2010=100. Consolidated basis)(Index)

500
450
400
350
300
250
200
150
100
50
0

2010

2011

2012

SZ-20

2013

2014

2015

2016 (FY)

SZ-20

PhaseⅡZEON GROUPCORPORATE REPORT 201722

Interview with the President●Fig. 4. New mid-term management plan SZ-20 Phase III: Groupwide strategy

SZ-20 Phase III: Groupwide Strategy

Growth(1)Reinforce the combined strengths of the Zeon
Group. Explore ways of going beyond boundaries
and collaborating with external players to provide
solutions globally as a contribution to society.
(2)Accelerate the pace of new business creation andproduct development in key development areas: global
environment, smart devices, and health and living

Culture(3)Cultivate a corporate culture that places value on
taking proactive action by harnessing diverse ideas
and trying them.

Q.2 In the Groupwide strategy for the new mid-term management plan SZ-20 Phase III (Fig. 4), what are theobjectives of “reinforce,” “explore,” and “solution”?

A.2 【Summary】We will provide added value by satisfying customers’ needs throughout the supply chain as wellas their hidden needs. By reinforcing and exploring products and services, we will create andprovide solutions.

Just providing product samples is not enough to getcustomers to use new products. We have to offer new
products with an understanding of how the customer willprocess the product and what kind of equipment they needfor this. For example, I used to work in the field of etchinggases. If a gas is toxic, then the customer needs to use agas detector, mask, and gloves, and also needs the relevant
safety information. And if it’s a new substance, the customer
might not have the peripheral equipment and other things
they need to use the substance. The solutions we’re talking
about are packages of all of these things sold as a set.
Rubber, latex, and some other chemicals with a long
history as stand-alone products have not required these
peripherals. However, by removing the barriers between

departments, bringing together the knowledge that exists
throughout Zeon, and combining our technological expertise,
we can reinforce these products. And if we also work
together with outside partners to bring in new knowledge, wewill be able to create more new applications and products.
This is the meaning of explore.
Reinforcing and exploring enables us to see across theentire supply chain for the customer—not just procurement
but planning and development as well as sales and aftersales service. I want us to expand our business with themindset of creating added value to meet customers’ known
and hidden needs by combining our products with services.

Q.3 Zeon has set the three new key development areas of Global Environment, Health and Living, and Smart
Devices (Fig. 5). How is Zeon involved in these fields?

A.3 【Summary】Taking a bird’s eye view of all of Zeon, we have great potential for growth, and these key

development areas have high probability of innovation.
In addition to development in new areas, we are also looking at applications for existing products
and new applications development. (Related ➡P31 Research and Development)

In the past, we set three key business fields just for theSpecialty Materials Business, but we include the Elastomer
Business in these new areas to add heightened perspective andbroader range. These areas were chosen because they have

23

ZEON GROUPCORPORATE REPORT 2017

large growth potential after 2020, and we see high probability ofcontributing to innovation with Zeon technologies.
The Global Environment area includes batteries and power
generation, where we have contributed energy materials, andR&D is central to this, and we are reorganizing our research
automobiles, reducing fossil fuel use, and energy conservation,organization and starting new initiatives to strengthen ourwhich involve our Elastomer Business.
cooperation with outside partners.
In the field of self-driving cars in Health and Living, the market
for automotive sensing cameras is growing as self-driving car
technology advances, and we anticipate related new productdevelopment in high-performance resin.
Smartification will continue toadvance, and the IoT field in Smart●Fig. 5. Groupwide strategy (2) Key development areas
Devices encompasses all fields in the
Global Environment and Health andGlobal Environment
Health and Living
Living areas. All of these fields areconnected to Zeon’s business.
Batteries
Agriculture
Reduced of
To expand our business scale, we
Self-driving
fossil fuel use
cars
must launch new products to create
Daily
Energynew business. And we have to donecessities
conservation
MedicalAutomotive
more than just launch new products—
materials
we have to harness other potential
Power
Medicalgeneration
within Zeon. For instance, divisions
devicesshould be introducing other divisions’products to their customers and finding
new markets for existing products.
IoT
Zeon Group can create new value by
exploring ways to leverage our customer
relationships and combine our products
and technologies.

Smart Devices

Q.4 How will you achieve the Groupwide strategy of cultivating Zeon’s corporate culture?

What outcomes have been achieved through the ongoing Taimatsu (Torchlight) activities and activities for ahealthy workforce?

A.4 【Summary】We will continue efforts to develop our corporate culture and create ways to generate and apply
ideas. (Related ➡P39)

While the mid- to long-term outlook holds much uncertainty,
we will not be able to generate new things if we hesitate
to act from fear of failure. To achieve our growth strategy,
all employees need to take action, and this is why I believe
reforming our organizational culture is the most important issue
that we face.
As a team, I want us to create an organizational culture thatencourages individuals to take the initiative and think about
what is possible and how to achieve it, and then take action.
We have conducted activities to encourage dialogue thattranscends the barriers within and between organizations. We
call these Taimatsu (Torchlight) activities because we want themto light a fire in people’s hearts. The Torchlight activities havebeen going on for six years now, and we will continue themand make them a fixed feature of Zeon Group. We hear about
the results the Torchlight activities are achieving during twice
annual plant visits senior managers make to engage in dialogue
and at meetings to report on ＺΣ improvement activities. We’regoing to continue these activities in our Phase III plan as wellas make it easier to get ideas and suggestions through twoway dialogue between management and employees and offer
support to realize them. We will also try some new ways to get
ideas and suggestions and see them realized.
In addition, the health and well-being of all Zeon employees
is a source of our strength. Right now, we have a high rate ofGroupwide Strategy (3):Cultivate a Corporate Culture● Taimatsu (Torchlight) Activities● Dialogue between management
and employees● System to support and generationof ideas● Promotion of diversity

abnormal results in routine physical exams among employees
at both the Head Office and plants. We welcome all employee
efforts big and small to become healthier, and as a company
we are developing initiatives and creating conditions for better
health and well-being. Specifically, we will continue efforts
to improve employee lifestyle habits based on data includingfrom physical exams, to detect changes in health early throughstress checks, and to reduce excessive working hours.

ZEON GROUPCORPORATE REPORT 201724

Interview with the President

Q.5 What challenges does diversity pose, and what initiatives are you undertaking?
A.5 【Summary】Diversity is a key component of strengthening our global development. We will continue theinitiatives we have been implementing, including advancing women’s participation in the workplace.

In SZ-20 Phase III, global markets are the main focus ofour business expansion. So it becomes increasingly importantfor us to understand and embrace the cultures and customsof our global customers and business partners. Zeon’s
percentage of women in senior management positions is also
not high.
I believe that greater diversity leads to more opportunity
to create change in people and organizations and achieve

growth. As part of this, we will continue to have senior
managers and women employees engage in dialogue.
We also want to have greater diversity in terms of moreparticipation by non-Japanese employees, older employees,
and employees with disabilities. For example, local Singapore
employees are senior managers at our plant in Singapore.
We will create workplace conditions that allow more diverse
human resources to play an active role irrespective of gender.

Q.6 What are the key points of Zeon’s Elastomer Business strategy?
A.6【Summary】W
 e will continue to assess added-value product fields and globally reorganize the business tomove away from commodities toward specialty products. (Related ➡ P27)

Synthetic rubber is made from a limited source, and in therubber business we aim to use the raw material in products thatare more in demand by customers and contribute to society. We
are focusing on quickly identifying value leading to differentiation,and on specialty products with recognized value instead ofcommodity products easily impacted by market swings. Our
specialty rubbers such as Zetpol®, acrylic rubber, NBR, andS-SBR are products we are targeting for reinforcement.
S-SBR was created in collaboration with Sumitomo Chemical,
and we launched the joint venture ZS Elastomers in April of thisyear. We intend to create technology and production synergies
to take a leading position in the global marketplace. In July,
we opened the Asia Technical Support Laboratory (ATSL) to
support the growing ASEAN and Indian region and are offeringsolutions in specialty rubbers to expand business.
In the latex business, we are targeting sales of new products in
the growing industrial gloves market and development of emulsion
IR.
We will expand our business in petroleum resin with hygienic
materials applications using our proprietary hydrogenation
technology. In thermoplastic elastomers, we are exploring new
applications for Asymmetric SIS. We received the 2016 Awardof the Society of Polymer Science, Japan in the Technology

SZ-20 Phase III: Strategy
by Business Segment

Elastomer Business● Reinforce competitive businesses by responding
globally to growth markets and raising costeffectiveness.
● Explore new opportunities and achieve growth
based on the trust built in the market andrelationships with customers.
➡ S-SBR Highlight 1 P3
➡ Elastomer Business strategy P27

category for Asymmetric SIS (Related ➡ P32).
Demand is rising for powder slush compounds, which areused in automotive interior applications, along with higher global
vehicle production. We are augmenting our supply structure andbusiness with a new plant in Mexico to serve the large North
American market. This is our third plant following ones in Japanand China.

Q.7 What are the key points of the Specialty Materials Business strategy?
A.7 【Summary】Expand product volumes and applications in response to the growing market. (Related ➡ P29)
Strong-performing optical films that use ZeonorFilm® meetgrowing demand for large sized and high-resolution LCD
panels. We will also enter the promising Organic EL display

25

ZEON GROUPCORPORATE REPORT 2017

panel market with a portfolio of new components and materials.
Cyclo-olefin polymer is a high-performance resin, and we willoffer solutions through one-stop service providing prototypes

targeting the medical and biotechnology fields.
We will steadily expand our business in energy components
with distinctive products mainly for the automotive market thatmeet needs for battery safety, extended life, and higher output.
We intend to expand our market share by achieving growth that
outpaces market growth.
In the area of medical devices, we plan to expand our market
share of FFR devices while also focusing on devices for thedigestive system.
In new specialty materials, in 2018 we expect to commercializea thermal interface material that is a rubber–carbon nanotube
composite. We intend to grow this into a major business area withapplications development mobilizing its properties.

SZ-20 Phase III: Strategy
by Business Segment

Specialty Materials Business● Expand business in step with the speed ofmarket growth and technological progress
through focused investment of resources andstronger collaboration with outside players.
➡ Energy materials Highlight 2 P5
➡ Specialty Materials Business Strategy P29

Q.8 What approach are you taking to achieve the Enterprise Blueprint for2020 target of 500 billion yen in net sales?

When we were drafting the SZ-20 plan in 2011, we had
consolidated sales of around 250 billion yen. We set thegoal of doubling this to 500 billion with the aim of achieving
disruptive growth. This is still our approach today. To achieve
disruptive growth along with major business expansion, we
will invest in facilities at an early stage and may use M&A as
well.
In SZ-20 Phase III, we added the phrase “employees’
individual growth” to the Enterprise Blueprint for 2020. This
reflects our belief that it is important for everyone, fromsenior managers to workers on the plant floor, to take theinitiative and achieve growth for their self-realization.
Our central focus is on changing our corporate culture
and organization, which we believe will in turn lead tohigher sales and profit. Through this process, we aim tocontinue contributing to realizing customers’ dreams and aprosperous society.

Enterprise Blueprint for 2020

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

Targeting consolidated net sales over
500 billion yen in FY 2020

ZEON GROUPCORPORATE REPORT 201726

Business and Strategy

Elastomer BusinessNet sales
In elastomers, our main business involves the three fields ofsynthetic rubber, synthetic latex, and chemical products, themain raw materials of which are C4 and C5 fractions derived
from naphtha. In 1959, Zeon became the first company inJapan to mass-produce synthetic rubbers. Even today, theElastomer Business is the core Zeon business, providing
60% of total net sales and operating income.

-12.7
billion JPY（-7％）(billion JPY)

200

184.4

188.8

178.9

2017

166.2

（forecast）

168.0

150

100

50

0

Segment
ratio

2013

2014

2015

2016

2017 (FY)57％

Business overview and future strategy
In the Elastomer Business, the Enterprise Blueprint for 2020
calls for taking the front-runner position globally in synthetic
rubbers. Being the front runner means being the supplier able tooffer best value that customers identify with and endorse.
A major development in fiscal 2016 was the merger of our
S-SBR business with Sumitomo Chemical Company and theestablishment of ZS Elastomers Co., Ltd. Zeon and Sumitomo
Chemical handle production of S-SBR, while ZS Elastomers
handles R&D and sales. We expect to generate new synergies
through the combination of both our companies’ technologies for
S-SBR with modified terminals. The S-SBR business will continue
to expand, and we are also exploring investing in new facilities for
future development.

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

27

ZEON GROUPCORPORATE REPORT 2017

The specialty rubbers business including NBR, hydrogenated
NBR, and acrylic rubber will see growth along with higher
automobile production primarily in emerging countries. Automakers
are focusing on developing electric vehicles, but we see internal
combustion engine vehicles as continuing to be the mainstream in
the ASEAN and Indian region until around 2040. We are targeting
the ASEAN-Indian region in our specialty rubber business andestablished the technical support organization ATSL (see Topics
on right) in Singapore to strengthen our competitiveness. We areenhancing Zeon’s value by hiring local engineers to visit customers
in the region and provide a range of solutions.
New synthetic latex products that we released in the second
half of 2016 begin to demonstrate results in 2017. We are shifting
our focus from disposable latex gloves to products with higher
added value. Our NBR latex for industrial gloves is resistant totearing, and emulsion IR for surgical gloves feels comfortable anddoes not contain proteins that cause allergic reactions. These aresome of Zeon’s added-value offerings.
In our chemicals business, we received the 2016 Award of theSociety of Polymer Science, Japan in the Technology category for
Asymmetric SIS (thermoplastic elastomer SIS). Asymmetric SIS
offers both high strength and flexibility, properties that arechallenging to achieve together with conventional elastomer
technologies. Asymmetric SIS shows development promise in a
number of new applications such as elastic films used indisposable diapers. We increased the production capacity ofMizushima Plant in 2016. Hydrogenation facilities for C5 petroleum
resin were installed at Mizushima Plant in July 2017. Hydrogenatedpetroleum resin has beneficial properties including low odor,transparency, and low VOCs, making it a promising material for
disposable diapers along with Asymmetric SIS.

Elastomer Business breakdown (FY 2016)

Operating income (ratio)(billion JPY)

35
30

（-1％）

25
20

20.7

19.3

20.6

Net sales

308

112.5

Rubber

（⬇4％）

Latex

（⬇2％）

Chemicals

（⬆3％）

2017

(forecast)

19.6

16.8

15
（％）

10

10.5

5
0

Sales quantity(1,000 tons)-0.2
billion JPY

2013

11.6

8.9
2014

2015

20

12.4
2017 (FY)

0

121

17.8

（⬇7％）

129

32.9

（⬇14％）●Change in specialty rubber ratio
Quantity basis in 2015: 31% → 2016: 30%
Value basis in 2015: 58% → 2016: 54%

62％

Segment
ratio

（⬇5％）

●Reason for -4% change in rubber sales quantity
General purpose -2%: Japan -9%, global +4%
Specialty -6%: Japan +5%, global -11%

10

2016

(billion JPY)

Zeon Kasei’s Mexico plant began operations for powder slush
compound (PSC) manufacturing in June 2017. Use of PSC in
automotive interiors is growing due to its excellent design andmold fabrication properties and inexpensive cost. Products
produced at the plant are supplied to automotive manufacturers in
the Americas, where expansion is continuing. This is our third PSC
plant in addition to the Ibaraki Plant in Japan and the Changshu
Plant in China. Going forward, we will also explore plantdevelopment in Europe.
We are currently in the process of rebuilding our global
production capacity. Demand for automotive applications is risingin Asia, while political regimes in various countries are undergoing
major changes. These factors are affecting the suitability of
production sites. We are therefore reorganizing where we makeZeon products, including increasing and suspending someproduction operations. In addition, we need to realize disruptive
growth to achieve our new mid-term management plan targets.
We will explore M&A under the right conditions as part of this.

TOPICSTechnical support center for specialty rubbers
opened in Singapore
The Asia Technical Support Laboratory (ATSL) wasestablished in July 2017. The ATSL provides technicalsupport to customers in areas such as blending, kneading,and evaluating specialty rubbers primarily used in peripheral
automotive engine parts. By providing customers with provensolutions to their challenges, we will enhance Zeon’s presencein the ASEAN–Indian
region, where growth
in internal combustion
engine vehicles isforecast.

●SIS and Asymmetric SIS thermoplastic elastomer, petroleum resin, hydrogenated resin production and use

Raw materials procurement & manufacturing

Production & sales

Final productZeon (Mizushima Plant)

C5 fractions

Risk
C5 fractions areaffected by naphtha
price fluctuations
and supply volumes

GPI
process

Strength
Zeon’s proprietary GPI
process can extract raw
materials from C5 fractions
with a high degree of purity

Isoprene
Piperylene

Customer
SIS/Asymmetric
SIS(Hydrogenated)
Petroleum resin paper

Strength
Added facilities for SIS production(2016)
Added facilities for petroleum resinhydrogenation (2017)

Disposable diaper
films
Disposable diaper
adhesives

Customer value
Disposable diaper films: Strength, flexibility
Disposable diaper adhesives: Low odor,
low VOCs, reduced discoloration

ZEON GROUPCORPORATE REPORT 201728

Business and Strategy

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

+4.0
billion JPY(billion JPY)

100

75

（+6％）

64.2

70.9

71.0

2014

2015

75.0

2017

（forecast）

77.0

50

25

0

Segment
ratio

2013

2016

2017(FY)

26％

Business Overview and Future Strategy
In the Specialty Materials Business, we are using uniqueconcepts based on innovative original technologies to
produce products with high added value that are not overly
influenced by conditions in the materials market.
To achieve our Enterprise Blueprint for 2020, we will
expand business in step with the speed of market growth
and technological progress through focused investment of
resources and stronger collaboration with outside players.
Optical films are a core business of our Specialty
Materials Business. Offering excellent performance, demand
for large-screen TVs is rising, although demand has fallen
somewhat for smartphones and other small displays.
Demand is growing overall, and we anticipate stabledemand in the years ahead. We have entered the growing
market for organic EL panels (OLED) with new components
based on new retardation film development.

Hiroshi Fujisawa
Director & Corporate Officer
Specialty Business
Division Manager – Specialty
Chemicals

29

ZEON GROUPCORPORATE REPORT 2017

Onboard sensors supporting self-driving car technologies
represent a new promising market for cyclo-olefin polymer(COP) of the specialty plastics division. Demand for opticallenses for sensors is anticipated.
COP is gradually being adopted as a pharmaceuticalpackaging material alternative to glass in syringes pre-filledwith drug solutions. We expect use of COP to expand alongwith market expansion as medical institutions seek greaterlabor savings and pharmaceuticals come increasingly
pre-packaged. In 2017, we began a prototype provision
service for microfluidic chips (see Topics). We are aiming todevelop this service in the medical and biotechnology fields
by conducting R&D looking to future mass-production.
In energy materials, demand for electric vehicles (EV) is
forecast to rise, and with it the market for materials used inlithium-ion batteries for the automotive industry is also
forecast to grow. We anticipate growth in environmentallyfriendly aqueous anode and cathode binders that replaceorganic solvents as well as separators that contribute toimproved battery insulation. We intend to increase ourmarket share through systematic facilities investment toaugment our capacity and further performance improvements
in our components and materials. (Related➡P5)
We are aiming to double the scale of our medical devices
business between FY 2016 and FY 2020. Our market sharetarget of FFR devices, where solid growth is being seen incirculatory system applications, is 30% by fiscal 2020.
Regarding the endoscopic business, we plan to release new
products for the removal of bile duct stones and stents.
In electronics materials, higher quality is being demandedof materials as semiconductors become increasingly
miniaturized. We are going to introduce electronics materials
that satisfy the required quality, including etching gases,
insulation materials, and resists, to enter the market. In thedisplay market, we are expanding sales of insulating films
with properties of high transparency, low water absorbency,

Specialty Materials Business breakdown (FY 2016)

Operating income (ratio)(billion JPY)

Net sales (billion JPY)

20

+1.6
billion JPY

16（+20％）

9.1

9.4

0

Segment
ratio

9.8

8.2

8

4

2017

（forecast）

12

10.5

14.2

13.3

2014

11.6 13.1

2015

2016

⬆10％

Specialty
plastics

49.0

⬆4％

5.2

⬆8％

20

●Reason for +10% change in net sales in specialty chemicals
Specialty chemicals +3%, electronics materials +1%,
battery materials +38%, toners -3%

10

2013

20.8

Medical, etc.

（％）

% change

Specialty
chemicals

2017(FY)

0●Reason for +4% change in net sales in specialty plastics
COP resins -8%, optical films +8%• Optical film sales volume: +21%
• Ratio of optical films for small displays (net sales)30％

low outgassing, and high insulation.
We are seeing strong sales in specialty chemicals thatoffer original Zeon advantages. These include aroma
chemicals, solvents for semiconductors, andProhydrojasmon, plant growth regulator. We are not only
making specialty chemicals sold on a stand-alone basis,but also specialty chemicals that use for other materials
and components or are required in new product production.
Specialty chemical coatings to improve film performanceand processing solvents are two examples. A role of theSpecialty Chemicals Division is to work across businessdivisions to enhance Zeon products. We intend to further
strengthen this type of collaboration that brings together

2015: 37% → 2016: 18%

multiple divisions.
As our first component using single-walled carbon
nanotubes (SWCNT), we have commercialized a pad-type
thermal interface materials that combines SWCNT withrubber to greatly lower thermal resistance and improve heatradiating performance. This product contributes tosmartification by helping lower the semiconductor
temperature of servers and power devices and resolving
their problematic heat generation. We will continue researchon compounds using Zeon materials and seek out joint
research opportunities with a range of outside companies
and groups. (Related➡P20, 32)

TOPICS

Prototype service launched for production of microfluidic
chips using COP
Low autofluorescence*
Microfluidic chips are transparent circuit boards with microfluidic channels inwhich reagents flow. This allows for easy observation of chemical reactionsin applications such as disease diagnosis. The development is continuing in
the drug development and medical testing and diagnosis fields in anticipationof growing this into a major market in the future.
Demand is now rising for microfluidic chips in devices designed to detectobjects at high speed and with high sensitivity. COP has better properties asa microfluidic chip material that make it suited than glass, which is themainstream material used today. These include low autofluorescence, lowprotein absorption, and ease of precision etching.
This service receives orders from research institutes, universities, and othergroups to manufacture chips using COP for research purposes. Along withlimited production of a wide variety of products for research purposes, weare supporting chipmaking that leverages the material’s properties with aneye to mass-production using our expertise as a resin manufacturer.
*Autofluorescence: The natural emission of light by structures after they have absorbed light.
Lower autofluorescence is preferred due to noise during analysis

Low protein absorption

Excellent optical properties

Low impurity & low leachability

Low moisture permeability &low water absorbency

Excellent resistance to chemicals

High heat resistance & strength

Precision cutting

ZEON GROUPCORPORATE REPORT 201730

Business and Strategy

Research and Development (R&D)
The R&D Center conducts Zeon Group’s R&D activities with aworkforce of more than 400 researchers. In addition to the
R&D Center’s 10 research buildings located next to the
Kawasaki Plant, we have established other laboratories
located near production plants. We develop new products
and improve existing products through close collaboration
with business units to meet the needs of customers.
Additionally, we are exploring new materials, developing andusing new analysis and simulation techniques, anddeveloping and improving production processes andequipment.

R&D expenses(billion JPY)

15

11.9

13.6

14.1

13.2

10

5

0

Major research themes in key development
areas
Major research themes are needed to contribute toachieving the Enterprise Blueprint for 2020 and its goal of 500
billion yen in net sales. We strive to create these major
research themes as well as to quickly generate results.
We have defined the three priority markets to target as
Global Environment, Smart Devices, and Health and Living. To
explore research themes, we will create task forces comprisingresearchers with advanced specializations, and will define theresearch themes by backcasting (reverse forecasting) fromfuture market forecasts.
Generating results means launching products in themarkets. We will reorganize and reinforce our organization tocommercialize a large number of major research themes.

12.7

2012

2013

2014

2015

2016 (FY)Key development areas

Global Environment

Health and Living

Smart Devices

Define research themes bybackcasting (reverse forecasting) fromthe market forecast for the area

●R&D System
Research &Development Center

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

Sachio Hayashi
Director & Senior Corporate Officer
Research & Development
Division Manager – Research and Development Center

31

ZEON GROUPCORPORATE REPORT 2017

Production Technology Laboratory

Organization for new synergy creation

IP strategy

We reorganized our R&D system in April 2017. We integrated
separate laboratories for electronics materials and specialty
chemicals into the Specialty Chemicals Laboratory. We also
integrated laboratories conducting research on toners and themolecular properties of latex into the Functional Particles
Laboratory. We expect to create new synergies from thesemoves to combine overlapping areas of research.
We are also purposefully creating exchanges among
researchers in our Japanese and global laboratories.

We are working to expand our intellectual property rights withthe key phrase “patent first” to enhance our competitiveness andcontribute to industry development in line with our corporate
strategy.
At Zeon, we define “patent first” as investigating patents at theinitial product development stage, proceeding with development
based on the patent strategy, and filing patent applications before
announcing products and providing samples.
We will maintain a high degree of competitiveness based on
patents that combine and apply leading individual technologies.

Strengthening collaboration withoutside parties

From materials to components andsolutions

We need even more manpower to conduct research on anumber of new themes and shorten the time to product launch.
This is why we are continuing to ramp up our joint research
activities with other companies, public research institutes, anduniversities. We are collaborating on the sidelines on various
research themes and will explore partnerships with outside
players including some of our competitors according to theanticipated outcomes.

Zeon has primarily offered materials as a chemicals
manufacturer. In the years ahead, we will process these materials
to add value and create solutions. For example, we will offer ourmaterials together with technical usage support in the same way
we have processed cyclo-olefin polymers to produce films as
high added-value components. To do this, we are focusing on
R&D and strengthening coordination with customers.

●Zeon’s technology advances and business development
Hybrid technologies
Precision processing technologies

Specialty components

Cyclo-olefin polymer technologies
Technologies for comprehensive use of C5Specialty materials

Commodity chemicals

Technologies & businesses

Elastomer technologies
Businessfoundation

TOPICS

New business

TOPICS

Awards for research results

Joint research on carbon nanotubes

In May 2017, we received the 2016 Award of theSociety of Polymer Science, Japan in the Technology
category for development of styrene-isoprene-styrene
block copolymer, which has an asymmetric structure(Asymmetric SIS).
Asymmetric SIS not only offers dramatic performancegains over conventional
products, it also offers
functional properties thatare a challenge toachieve together and isseen as having potential
widespread application.

Zeon is the first company in the world to commercialize
single-walled carbon nanotubes (SWCNT) in the Super-Growthmethod. In compounds with various materials, SGCNT are
expected to demonstrate novel properties and performance.
Zeon is participating in a number of projects and engaging inapplied research.
・Participation in the Project for Super-Rapid Development
Infrastructure Technologies for Super-Advanced Materials/NEDO*1
project (May 2017)
・Zeon Sunarrow AIST*2 CNT Composite Material Research Centerestablished (February 2017)
・Development of thermal interface material (TIM) as a highperformance thermal pad using SWCNT and rubber compound
through Research Projects for Commercializing Nano-Carbon
Materials to Realize Low Carbon Society (November 2016)
・Zeon–AIST Nanotube Industrialization Cooperative ResearchLaboratory established (July 2016)*1 NEDO: New Energy and Industrial Technology Development Organization*2 AIST: National Institute of Advanced Industrial Science and Technology

ZEON GROUPCORPORATE REPORT 201732

Business and Strategy

Corporate GovernanceZeon aims to increase profits and enhance corporate value on an ongoing basis while respecting and balancing the various
interests of its shareholders and other diverse stakeholders. To this end, we are continuing efforts to build a system that enables
efficient and sound corporate management through corporate governance.
Having a system of corporate governance allows us to clarify the functions and roles of each organizational entity within thecompany and to carry out rapid decision-making and execution. We are also improving corporate transparency through appropriatemonitoring and disclosure of business activities and their effects. We are determined to further enhance our corporate governancesystem to effectively carry out these aims.

●Corporate Governance System●Board of Directors

General Meeting of Shareholders
Decisions/Supervision(appointments/dismissals)

Board of Directors

Auditing

Corporate Auditors (Board)
Auditing

Decisions/Supervision(selections/dismissals)
Collaboration

Executive Committee
CSR Conference

Internal audits

CSR
Basic Policy
Committee(Dismissals)
Collaboration

Financial Auditors Auditing
Personnel
Financial
AuditsBusiness Execution &Internal Controls System

Representative Director

Department ofInternal Auditing(Appointments/
dismissals)

Collaboration(assistance)(Appointments/dismissals)●Executive Committee

Reporting

Risk Management Committee

Reporting(external)

Compliance Committee
Environmental & Safety Affairs Committee
PL Committee

The Board of Directors meets, in principle, every
month with corporate auditors in attendance toensure compliance with applicable laws and the
Articles of Incorporation in the execution ofbusiness. In addition to its statutory duties, therole of the Board of Directors is to makeimportant decisions about basic management
policy, strategy, and other aspects of businessexecution. As of October 2017, the Board of
Directors consists of 12 directors, including threeoutside directors.

External
lawyers

Reporting(internal)

The Executive Committee, in accordance with
the Executive Committee Rules, comprises the
President and executive officers ranked senior
corporate officer or above and meets twice amonth in principle to examine and makedecisions on important business matters afterdue deliberation involving consultation withattending full-time corporate auditors. Importantbusiness matters stipulated in the Board of
Director Rules are examined and decided by the
Board of Directors.

Quality Assurance Committee●Board of Corporate Auditors

Public Relations Committee

The Board of Corporate Auditors comprises fivemembers, including three outside corporate
auditors. The Board reports, discusses, andadopts resolutions on important businessmatters. In accordance with the auditing
guidelines established by the Board of Corporate
Auditors, each corporate auditor audits directors’
execution of their duties through various means,such as attending Board of Directors meetingsand monitoring business operations, including
subsidiaries' operations.

Business divisions, indirect divisions, research laboratories, plants
ReportingControl/monitoring (internal)

Reporting(external)

Subsidiaries/Affiliates

Risk Management
The Risk Management Committee and the Compliance Committee, along with theCompliance Committee’s subcommittees, namely the Antitrust Law Regulatory
Subcommittee, the Export Security Control Subcommittee, the Corporate Governance
Subcommittee, and the Information Security Subcommittee, are advancing Zeon's risk
management and compliance initiatives.

●Risk Management and Compliance System

CSR Conference
Compliance
Committee

Prevention of legal
violations
Education andtraining incompliance with laws

RiskManagement
Committee

Prevention andcontrol of risks
Crisis management

Antitrust Law Regulatory Subcommittee
Export Security Control Subcommittee
Corporate Governance Subcommittee
Information Security Subcommittee

33

ZEON GROUPCORPORATE REPORT 2017

Directors and Officers (as of October 1, 2017)
Directors

ChairmanPresident

Director & Senior Corporate Officer

Director & Senior Corporate Officer

Naozumi Furukawa

Kimiaki Tanaka

Hiroyuki Hirakawa

Toru Nishijima

Director & Senior Corporate Officer

Director & Senior Corporate Officer

Director & Corporate Officer

Director & Corporate Officer

Hirofumi Imai

Sachio Hayashi

Takeo Furuya

Noboru Yanagida

CSR Division Manager –Corporate Administration
President of Zeon F&B Co., Ltd.

President of Zeon Medical Inc.

Chairman of Tohpe Corporation

Administration
Division Manager – Raw Material
General Manager – Department of China
Business Administration

Research & Development
Division Manager – Research &Development Center

Elastomers and Chemicals Business
Division Manager – Logistics

Production and Engineering Technology
Division Manager – Production Center
Department Manager – Production
Administration

Director & Corporate Officer

Director

Director

Director

Hiroshi Fujisawa

Haruo Itoh

Takao Kitabata

Tadanobu Nagumo

Specialty Business
Division Manager – Specialty Chemicals
President of TFC Inc.

Adviser – Fuji Electric Co., Ltd.

Chairman of the Board – Sanda Gakuen
Junior High School & High School

Chairman & Representative Memberof the Board – The Yokohama RubberCo., Ltd.

Audit & Supervisory Board
MemberTadayuki Minami
Shinichi Hirakawa

External Member

Yuzuru Fujita
Adviser of Asahi Mutual Life Insurance Company

Akio Kohri
President – ADEKA Corporation

Nobutake Nishijima
Chairman of Fujitsu Total Insurance Service Ltd.

Corporate Officer
MemberExternal Member

Toshihiro Inoue

Makoto Watanabe

Division Manager – Synthetic Latex

Plant Manager – Tokuyama Plant

Tomoyuki Kose

Kazuyoshi Matsuura

Plant Manager – Mizushima Plant

Division Manager – Synthetic Rubber

Tetsuya Toyoshima

Takafumi Kawanaka

Director & Corporate Officer – Zeon Chemicals Incorporated

Plant Manager – Kawasaki Plant

Makoto Yokota

Tsutomu Eguchi

General Manager – Business Innovation Promotion

Division Manager – Human Resources, General Manager – Human Resources 1

ZEON GROUPCORPORATE REPORT 201734

Zeon’s CSR

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

Zeon’s CSR
Environment
SafetyLabor Practices
Fair Business Practices
Community

35

ZEON GROUPCORPORATE REPORT 2017

P36
P37
P38

P39
P40
P41

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

At Zeon, we regard CSR activities as all activities undertaken to continue being “acompany trusted and valued by society.” With all employees acting with an awareness of
CSR, we ensure compliance and contribute to the global environment and sustainable
development through our corporate activities. In April 2010, we established the Zeon CSR
Policy and the more specific CSR Code of Conduct. In January 2011, we established our
CSR Management Framework.

Zeon CSR Policy (established April 2010)

1. W
 e will ensure compliance and meet society’s needs for safety andsecurity
 e will contribute to sustainably developing society and protecting
2. W
the global environment through our corporate activities
3. W e will ensure that each and every Zeon person is aware of CSR andacts accordingly

CSR Management Framework
The CSR Management Framework comprises the CSR Conference and seven committees.
Chaired by the President and held six times a year, the CSR Conference is the chief
decision-making body on matters relating to CSR. The CSR Conference is held to review
and finalize committee activities, initiatives, and annual activity plans, and to give necessary
instruction based on progress reports.
The committees report to the CSR Conference and advance CSR activities in their
specific areas. The seven committees are the CSR Basic Policy Committee, the Compliance
Committee, the Risk Management Committee, the Public Relations Committee, the Quality
Assurance Committee, the PL Committee, and the Environmental and Safety Affairs
Committee.
●Zeon’s CSR Management Framework
President

CSR Conference

CSR Headquarters

CSR
Coordination Division

CSR
Promotion Department

CSR Basic Policy
Committee

CSR Promotional
Committees at Offices
and Group Companies

General Affairs
Department

Compliance
Committee

Antitrust Law
Regulatory Subcommittee

Environmental & Safety
Affairs Department

Risk Management
Committee

Export Security Control
Subcommittee

Quality Assurance
Department

Public Relations
Committee

Corporate Governance
Subcommittee

Legal Affairs
Department

Quality AssuranceCommittee

Information Security
Subcommittee

Department ofCorporate
Communications

PL Committee

Department ofInternal Auditing●Committee functions
CSR Basic Policy Committee
Provides guidance and support for CSR
Promotional Committee activities. Builds
systems to support making social contributions.
Compliance Committee
Education and training in legal compliance.
Oversees four compliance subcommittees.
Risk Management Committee
Responsible for systematically preventing
potential risks and handling risks that emerge.
Public Relations Committee
Enhances Zeon’s reputation and image
through communication activities. Discloses
necessary information at appropriate times.
Quality Assurance Committee
Activities related to quality assurance. Reviews,
takes action on, and make improvements to
QA problems.
PL Committee
Manages prevention activities, training, andemergency response related to productliability.
Environmental and Safety Affairs
Committee
Plans and proposes environmental and safetymeasures and monitors their progress.

Environmental & Safety
Affairs Committee

ZEON GROUPCORPORATE REPORT 201736

Zeon’s CSR

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

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

Reducing environmental impacts*1 R esponsible Care: A voluntary initiative by businesses
that manufacture or handle chemical substances toachieve continuous improvement in health, safety, andenvironmental (HSE) performance across the entire life
cycle of such substances—from development andmanufacture, through distribution and use, and ending
in final consumption or disposal—based on theprinciples of independent decision-making and personal
responsibility. These businesses publicly commit to
Responsible Care in their business policies, implement
HSE-related actions, and strive to improve their HSE
performance.

The Enterprise Blueprint for 2020 contains the following two goals, which we are working
toward. We comply with emissions standards for substances with environmental impact basedon the Japanese Energy Conservation Act, Air Pollution Control Act, Water Pollution Control Act,PRTR Act, and agreements with local authorities (voluntary management standards).
Enterprise Blueprint for 2020
1.All plants receive public recognition for their environmental impact reductions
2.Proactively enhance awareness and make further improvements in the areas of theenvironment and energy conservation through comprehensive education
Results for FY 2016 are as follows.

• Zero environmental irregularities*2• Environmental impact reductions

・Acrylonitrile emissions: 4.1 tons
・Final landfill disposal (non-consolidated): 1.7 tons
・Final landfill disposal (Zeon Group): 2.9 tons
・Per-unit energy consumption (FY 1990 baseline): 62%
・Per-unit CO2 emissions (FY 1990 baseline): 60%

Developing environmentally friendly products
At Zeon, we are continuing to conduct R&D with the objective of developing andlaunching environmentally friendly products.
As of fiscal 2016, we have successfully developed fuel-efficient tire components, lowtemperature toners, fluorinated solvents and etching gases with zero ozone depletion
potential, and binders for lithium-ion batteries. (Related➡P7)
In the years ahead, we will engage in R&D that attempts to address environmentrelated social issues.

37

ZEON GROUPCORPORATE REPORT 2017*2 E
 nvironmental irregularities: Defined in Zeon Corporationcompany rules as the failure to meet environment-related
rules and regulations and voluntary standards. Also,situations in which standards were met but may nothave been if regular measures had been taken. Or when
there is no set standard, any instance a complaint isreceived or could have been received if the situation had
been left unattended.

Safety
Visit our
Safetycorporate
website for more http://www.zeon.co.jp/csr_e/safety.html
information

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

A consistently safe work environment is the foundation of all production activities. We
formulated our Safety Philosophy in 1997 based on the Responsible Care approach toguide our safety activities. Our Responsible Care Policy established in 1998 also clearlystates, “Protecting the environment and ensuring safety are preconditions for all businessactivities and are the most important priorities.”
We set safety goals based on the three approaches of eliminating safety irregularities*2,
eliminating occupational accidents, and improving safety in logistics, and each plant plans
and executes specific safety initiatives.

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

 afety irregularities: Defined in company rules as the*2 Soccurrence of a fire, explosion, leak, damage, failure,
runaway reaction, or similar event. Or, even without anactual occurrence, the possibility of such an event if
actions had been delayed, and observation of signs
before such an event.

Safety and accident prevention
We conduct safety assessments and audits of plants, and provide training to enhance
accident prevention awareness with the goal of achieving zero safety irregularities.
Each year, top management develops a Master Plan for Safety Management
Improvements and leads initiatives to improve our Safety Management System basedon the belief that ensuring safety is the greatest priority. Senior managers at Zeon visit
plants on a regular basis to confirm the progress of improvement initiatives and holdinformational meetings with workers to communicate directly with them. Top management
visited plants over 54 days in FY 2016.
The plants conduct emergency-response drills each year based on various hypotheticalscenarios. We conduct drills jointly with local fire departments when possible.

TOPICS

Systematic safety education

Held since FY 2003, this education program aims toprevent the lessons of past accidents from fading frommemory, to apply these lessons in work operations, toraise workers’ awareness of safety, and to increase their
sensitivity to potential risks.
Former plant managers give presentations to all plant
employees. They cover specific examples of accidents at
Zeon and other companies to communicate the grimconsequences of such accidents, and provide instruction
on how to analyze risk factors as well as
countermeasures to prevent recurrences.

Occupational safety
Our goal is zero occupational accidents resulting in lost work time and zero serious
accidents without lost work time. There were two lost-time occupational accidents in FY
2016. We are focusing on communication between worksite supervisors and workers,
safety inspections, and hands-on education in order to achieve a safe and stableproduction system.

Safety in logistics
We are working to maintain our achieved goal of zero accidents in logistics.
At Zeon, we established Yellow Card Management Rules for transporting hazardous
products. These rules require drivers to carry a Yellow Card*3 when transporting suchproducts. We also conduct reporting and communication training for drivers, and eachplant offers training on product handling to prevent accidents in logistics.

Education using accident case studies (Mizushima Plant)*3 Yellow Card: Document describing what to do if an
accident occurs during transportation, as establishedby the Logistics Safety Management Policy of theJapan Chemical Industry Association.
The document is called a Yellow Card because it isprinted on yellow paper.

ZEON GROUPCORPORATE REPORT 201738

Zeon’s CSR

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

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

Zeon – A company of which each andevery one of its employees can be proud
Encourage employees
to continually evolve by
pursuing high goals
based on independent
thinking

Human resource system
in which employees takeon challenges without fearof failure and gain a senseof accomplishment

A comfortable working
environment thatvalues dialogue

Promoting diversity
Respect for human rights, prohibition of discrimination

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

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

Men

Women

Total

1,407

183

1,590

New graduate

28

11

39

Mid-year2

35

Employees
No. of new hires

Percentage of employeeswith disabilities
Re-employment of
employees who havereached mandatory
retirement age

2.20％

67
（82.7％）

Includes 12 non-Japanese employees (6 men and 6 women)
New graduate: Employees that joined the company in April
2017
Mid-year: Employees that joined the company from April 2016
to March 2017

As of March 31, 2017, Zeon Corporation employed 1,590 people on a nonconsolidated basis, and Zeon Group employed 3,090 people on a consolidated basis.
The non-consolidated workforce includes 2.20% employees with disabilities, meeting theemployment rate requirement. We have also adopted a re-employment system sharedacross Zeon Group in which employees reaching mandatory retirement age are given
opportunities to continue working by passing on their skills and training successors. As aterm of respect, we refer to these re-employed employees as “(Zeon) master employees.”
In FY 2016, 67 people became master employees.
We conduct diversity training for all employees to help create the capacity for diversity
understanding. We also support employees who are balancing work with raising children
and have acquired the Kurumin mark in Japan in recognition of this, based on the Act on
Advancement of Measures to Support Raising Next-Generation Children.

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

39

ZEON GROUPCORPORATE REPORT 2017

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

Education &training

Actions &results

The worker
I want to be(higher goals)

Education &trainingFair Operating Practices
Visit ourFair Operating Practices
corporate
website for more http://www.zeon.co.jp/csr_e/suppliers.html
information

Ensuring compliance is established as the first priority of the Zeon CSR Policy, and wewill meet the public’s expectations by having all employees act with awareness of CSR.
We endeavor to engage in fair operating practices, and our CSR Code of Conduct clearly
defines related matters including compliance with antitrust regulations and a prohibition on
entertaining and offering gifts to overseas civil servants.

Fair competition
The Compliance Committee advances Zeon’s compliance efforts. The Compliance
Committee has four subcommittees, namely the Antitrust Law Regulatory Subcommittee,
the Export Security Control Subcommittee, the Corporate Governance Subcommittee,
and the Information Security Subcommittee.
In FY 2016, the Compliance Committee engaged in the following activities.
・Educated staff on global assignments on compliance with antitrust regulations andpreventing bribery
・Conducted workshops on legal compliance at plants and subsidiaries (in and outsideof Japan)・Checked the level of compliance understanding through e-learning●Internal audits
Internal audits are performed for the purpose of preventing improprieties and errors inbusiness operations.
The Department of Internal Auditing inspects and assesses whether business operations
in all departments are being carried out appropriately and effectively in accordance withlaws and internal regulations, and demands improvements when there are incidents ofviolations or non-compliance. In addition, the Department of Internal Auditing carries out
periodic follow-up audits on the progress of measures taken by each department.
In FY 2016, internal audits were conducted for 34 departments (15 Zeon Corporation
departments, 10 Zeon Group companies inside Japan, 9 Zeon Group companies outside
Japan).

●Compliance system
Compliance Committee
Prevention of law violations
Education and training in compliancewith laws
Antitrust Law
Regulatory Subcommittee
Prevention of violations of
the Antitrust Law
Export Security
Control Subcommittee
Proper security export control
Corporate Governance
Subcommittee
Reliability in financial reporting
Information Security
Subcommittee
Management of corporate
confidentiality
and information security

Social responsibility in the value chain
In order to provide safe products to customers, we procure raw materials based on theZeon CSR Policy and the CSR Code of Conduct. We have been developing our system of
CSR procurement since FY 2012. We have established the CSR Procurement Guidelines
and Requests to Suppliers, which integrate CSR perspectives into our existing QCD*.
Looking ahead, we will consolidate our approach to supply chain management
and build a system for sharing our CSR policies in order to embed CSR procurement
throughout the supply chain.

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

ZEON GROUPCORPORATE REPORT 201740

Zeon’s CSR

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

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

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

Zeon’s approach to social contributions
We believe that social contributions are essentially carriedout through our core businesses. As companies are membersof society, however, the complex set of issues faced by society
and a company’s activities are not independent of one another.
We are therefore undertaking social contribution activities outsideof our core businesses to engage with society from a broader
perspective.
In 2012, we launched CSR Core Projects, which are initiatives
we selected from proposals submitted by Zeon Group companies.
CSR Core Projects are activities that focus on social contributions
outside the scope of our core businesses and provide employeeswith opportunities to turn their attention to social issues.
The Head Office plans various activities related to supporting
reconstruction from the Great East Japan Earthquake, as well asshared projects that are conducted across multiple plants andsubsidiaries. Furthermore, plants and subsidiaries also conduct
their own independent projects. We are developing activities inthese three broad categories with a focus on their synergistic
benefits.

●Social contributions at ZeonCSR Core Projects

Great East Japan
Earthquake reconstruction

Shared projects

Independent
projects

FY 2016 initiatives❶ Activities with the local community/❷ Activities with the local community/

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

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

ZCLP employees collect donations at in-house events to donate to the Make-AWish Foundation of Ohio, Kentucky and Indiana

Communication activities with the local community

Zeon Chemicals L.P.

41

ZEON GROUPCORPORATE REPORT 2017

Zeon Chemicals (Thailand) Co., Ltd.

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

❹ Holding community events

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

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

Donations to local temples (contributions are also made to nearby schools,
hospitals, and educational institutions)

Tokuyama Plant sponsors the Zeon Waraku Odori Dance Festival held every
summer. First held in 1974, more than 2,000 community residents participate in
the festival each year

❺ Cleanup campaigns❻ Educational support

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

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

Community cleanup activities around Tokuyama Plant

Receiving interns and product inspection experience at the Optes Sano Plant❼ Chemistry classrooms
Based on the motto of “nurturing future Nobel Prize winners inchemistry,” we are holding chemistry experiment classrooms in various
areas to communicate the appeal of chemistry to children.

❽ Donations of books to disaster-affected
areas

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

RIMTEC has participated in Omoshiro Taiken (fun experience) Day, an event held at
Okayama Research Park, with a hands-on experiment to make plastic together
with Okayama University since FY 2012. RIMTEC also received the 2016 Chemistry
Communication Award
Donating books to Vice Principal Ito (left) of Otsuchi Gakuen

ZEON GROUPCORPORATE REPORT 201742

Cover photo:
Zeon Corporation’s Mizushima Plant
Established in 1969. Mizushima Plant
has facilities for extracting butadienemonomer from C4 fractions* andfacilities for extracting isoprenemonomer from C5 fractions*, andproduces various related products
using C5 fractions.
*C4 and C5 fractions: Hydrocarbon molecules
containing four carbon atoms and five carbon
atoms, respectively, created as byproducts ofnaphtha thermal cracking.

Main products
Isoprene rubbers, thermoplastic
elastomers, petroleum resins, synthetic
aromas, specialty plastics, isoprenemonomer, butadiene monomer

Zeon, Zetpol, Nipol, Quintone, Quintac, ZEONEX andZEONOR are registered trademarks of Zeon Corporation,in the United States and other countries.
ZeonorFilm, ZEOGLOBULE and STEC are trademarks ofZeon Corporation.

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

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