Research and Development
The Daiken Group has positioned development of industrial materials using sustainable resources, such as timber, and technologicaldevelopment to create safe, secure, healthy, and comfortable spaces centering on the R&D center as the priority themes and has beenproceeding with research and development aimed at creating new shared value that will lead to the resolution of social issues andexpansion into new technologies and new businesses for the next generation. In addition, to speed up the far-sighted research anddevelopment and expand the domains, we proactively put effort into the co-creation activities with various stakeholders.

Policyl Development of new technology for the resolution of social issues, business expansion by aggressively using
co-creation (open innovation), and the creation of new business toward the new generationl Nourishment of a culture that admires and supports challenges by creating a mechanism to be able to challenge new
business areas

Future full of smile

Expansion into
new technologies
and new businesses
for the next generation

Creating new sharedvalue that will lead tothe resolution ofsocial issues

Industrial
materials

Building
materials

Spatialenvironment Assayevaluation

Intellectual propertystrategy
Intellectual property strategy tolead the development areas linked
to the management strategy andto secure differentiation and acompetitive advantage

ermbites[Prasiuch spacs,[P oritizesed therio
ble
ourc
r iti
me 1]
le resorta
bfa
zed
ni
Developmatco
them
ment of industri materials that use sus
andale 2] D
lthy,
aeh
evelopm,, secureent of techno
logies that create safe
R&D investment

Human resource
development

Aggressive investment ofmanagement resources toaccelerate the effortsCompanies and manufacturers
zExpansion of business domains bytechnology exchanges
zCreation of joint development themes andmatching between the technological seeds
and needs

Development of human resources
to keep opening up the futurewith technologies, ideas, andpassion

R&D that embodies the mission
in the group corporate philosophy

Students and recruitment
zWork experience through internships
zInteractions with the generation that willbear the future

Customers and suppliers
zDeepening their understanding of ourproducts and quality
zEnhancement of the relationship oftrust49

DAIKEN GROUP REPORT 2023

IdeaTechnologyPassion

Daiken R&D center

Universities and research
institutions
zJoint development andcomprehensive alliance

Local communityzA company that is loved by the localcommunity
zCooperation with a municipality

Within the company

Co-creation
activities

Stakeholders

zEnhancement of cooperation, sharing ofissues, and discussions of development
themeszAcquisition of a way of thinking necessary forcapability development as well as researchand development

Development of technologies

1

Prioritized
theme

2

We put effort into the development of technologies for industrial materials andbuilding materials that effectively use timber with no waste. As a challenge in a
new field, we have been proceeding with the development of technology to utilize
cellulose nanofibers (CNF) that are fibrillated timber at the nano-level. CNF has
the characteristics that wood fibers used for the wooden fiberboard do not have,
which leads to the new approach to the environmentally friendly new use application.
In addition, as a new challenge in the existing business, we have beenproceeding with the initiatives toward the establishment of the production
technology for the ultimate environment conscious MDF (medium densityfiberboard) for which adhesives using the raw materials for petrochemical
products are not be used at all. This time, we succeeded at MDF prototype
manufacturing using the adhesive made of
the wood-derived component, which is thefirst step.
We will enhance the initiatives for researchand development that will contribute toenvironmental friendliness and the SDGs
with a focus on the technologies for theeffectively use and recycling of woodresources.

Development of technologies thatcreate safe, secure, healthy, andcomfortable spaces

Daiken Group’s Value Creation

Development of industrial materials
that use sustainable resources,
such as timber

Prioritizedtheme

In addition to the pursuit of the possibilities of industrial materials, we have beenproceeding with research and development to give a new function to industrial
and building materials. We grasp the spatial environment based on the assay
evaluation technology, delve into it from the perspectives of the temperature,humidity, and sound environment that are essential when people spend time
comfortably, and at the same time, we conduct assay evaluations toward making
responses to harmful substances, such as asbestos and formaldehyde.
While further saving of energy in buildings is required toward the realization of adecarbonized society, we also have been focusing on research projects
concerning temperature and humidity to simultaneously pursue thecomfortableness of livelihood and the reduction of consumption energy by thefunctions of industrial and building
materials.
While performance that people require forspatial environment changes with times, byalways thinking what performance will benecessary in the future and proceeding withtechnology development of functionalbuilding materials, we will realize thecreation of a safe, secure, healthy, andcomfortable space.
Thermal image measurement

Prototype MDF that used awood-derived adhesive

The R&D Center works on Ecology and Improvements in the Quality of Space in four sectors and promotes R&D that will contribute to a sustainable society.

Industrialmaterials

Further improvement of theexisting industrial materials
and development ofindustrial materials that will
become a key to capturing
new markets

Buildingmaterials

Development of new secureand safe building materials
that will be needed by society
in the futurel High functionality of the wooden boards and inorganic boardsl Technology development to use unused resourcesl Wood building material utilization development in the new fieldl R&D of industrial materials for new markets other than building materialsl Development of environment-conscious building materialsl Development of high functional paints and painting technologyl Development of new construction technique for building materialsl Adding a high value to wood building materials

Development of spaces andSpatialbuilding materials that will
environment realize a comfortable life

Assay and analyses of spaces andevaluation building materials using thel Development of energy-saving and indoor environment improvement technologies
l Analysis by simulation of the thermal, humidity, and cross-ventilation environment

l Measurement of air quality
l Building materials’ heat generation testl Sound insulation performance evaluationl Asbestos analysis

Strategy for Value Creation

R&D theme

Various measurements andexpertise cultivated in R&D

Organizational structure toward the enhancement of intellectual property strategies andinvestment of management resources

Trends in the R&D costs, Right holder scores, and Number of patents owned
Development division(¥million)

1,800

R&D center

1,200Intellectual property
department

900

1,430

0R&D expenses

1,477

1,551

1,592

1,587

100

112

124

291

308

3182016

2017

2018

Benchmark1st(1 patent)

550
500

1,491
163

1,717

177

191

450
400

149

600
300

Right holder score (Indexed)

1,452

1,500

Next-generation businessdevelopment department* Right holder score: One of the indices toevaluate the value of the entire patentgroup owned. The right graph shows
values by indexing fiscal 2016, which isthe benchmark, as 100 to indicate thechanges over the years. Created by using
Patent Result Co., Ltd.’s Biz Cruncher.

Number of patents owned

132339361

2019

2020

390

2021

2nd401

427

350
300

2022

250

2023 (Fiscal year)

3rdDAIKEN GROUP REPORT 2023

50

Data

In starting the medium-term plan GP25 3rd Stage in April 2022, we newly established the development division toward the acceleration of the initiatives for new businesses
and by placing the R&D center, which is the core of technology development, the next-generation business development department, which is responsible for crystallizationof new businesses toward the next generation, and the intellectual property department, which executes intellectual property strategies to make business and development
strategies more effective, under the division, we enhanced our organizational structure. In fiscal 2023, various technological challenges were conducted under the newstructure and a new technological bud came out. To make the research and development capabilities, which are the sources of the Daiken Group’s strength, robust, we
proactively continue to invest management resources and lead to the medium- to long-term corporate value improvement.