Contact desk
Public Relation Office, Showa Denko K.K.
TEL : +81-3-5470-3235
Website : http : //www.sdk.co.jp/english/csr.html
E-Mail : sdk_prir@showadenko.com– We adopted eco-friendly paper and printing.

SHOWA DENKOREPORT– SRI indexes adopting Showa Denko

As of January 20182018

CONTENTS

Our Vision
Showa Denko Group, under its Vision, has strived to realize “a company contributing to the sound growth of society” that
contributes toward creating a society where affluence and sustainability are harmonized.
In order to be trusted and evaluated by society through the continuous improvement of the corporate value, it is important
to maintain and develop appropriate relations with stakeholders such as shareholders, customers, business partners, local
communities and employees.
Also, in order to realize our Vision and develop the Group sustainably, we have defined what we should do as the “Our Code of
Conduct.”
We clarify this as "Our Vision" and promote the management for its realization.
We have established our slogan as a declaration to firmly “promise” our stakeholders this policy.

About Showa Denko
04 Showa Denko Group in Numbers
06 Showa Denko’s Ties with Society
08 Message from CEO
10 Showa Denko’s Business Model
12 Medium-term business plan, "Project 2020+"

60 CSR procurement
62 Human Rights and Labor Practice
66 Performance Data
68 Third-party Verification

Financial

20 Dialogue between the CEO and Outside Expert

70 Message from CFO

23 R&D of the Showa Denko Group

71 Financial Highlights

Governance

72 Management’s Discussion and Analysis
76 Consolidated financial statements
82 Corporate Data

CSR

Our Slogan“Shaping Ideas”
Our Code of Conduct

38 CSR Strategy
42 Stakeholder communications

Editorial policies

Report scope

Its Practical Guide

The Showa Denko Group restructured its CSR report and annual report in 2017
to publish the Showa Denko Report as an integrated report. In this integrated
report, we disclose the Group’s financial as well as nonfinancial information,
including descriptions of our consideration for the environment and society,governance, and medium- to long-term management strategies.

Period covered by this Report

Our Vision

As for disclosure items, we analyzed our stakeholders' opinions and requests
and covered priority topics, focusing on action policies and performance in2017 and giving specific examples.

“Showa Denko” as used in the text of this Report refers to Showa Denko
K.K., while “Showa Denko Group” refers mainly to Showa Denko and its
consolidated subsidiaries in Japan.

We at the Showa Denko Group will provide products and services that are useful and safe and exceed our

On our website, the online version of the report is also available with moredetails about the Showa Denko Group's CSR activities, including updated
information and environmental and social activity reports from each plant.

Publication datecustomers' expectations, thereby enhancing the value of the Group, giving satisfaction to our shareholders,and contributing to the sound growth of international society as a responsible corporate citizen.

Prepared by
TEL : +81-3-5470-3235

Our Slogan “Shaping Ideas”
Ideas, Hopes and dreams foryour happily ever after.

Website http://www.sdk.co.jp/english/csr.html
Imagination alone leads nowhere. Only when imagination is shaped
into reality does the world begin to change.
At Showa Denko, we are committed to shaping ideas.
Each one of us strives completely in all we do, believing thatthe dreams of humankind can be realized through the power ofchemical technology.
Today, as a company, we are becoming bolder and more dynamic.
Not only diligent and technology focused, we are a vital, proactive
group of unique minds that emphasizes fresh thinking and new
ways to apply our extraordinary technical expertise.
Closely working and partnering with leading global companies
in markets around the world, we are shaping ideas that realize
humanity’s hopes and dreams for more abundant and happier lives.

S HOWA DENKO R EP ORT 2 O18

This report covers information for the period January 1 to December 31, 2017,with some information also provided for 2018.

Organization covered

August 2018 (The next publication is August 2019)

Guidelines/guidance referenced

Public Relation Office, Showa Denko K.K.

02

48 Responsible Care

14 Introduction of Businesses of the Group

30 Corporate Governance

Our
Vision44 Highlights of CSR Activities

E-Mail sdk_prir@showadenko.com

ISO 26000: 2010
GRI Sustainability Reporting Standards 2016
Environmental Reporting Guidelines 2012 from the Ministry of theEnvironment of JapanThe International Integrated Reporting Framework from the International
Integrated Reporting Council (IIRC)

About the media to report our CSR information
This REPORTSHOWA DENKO REPORT 2018
(Integrated Report) (PDF)
The information comprehensively
disclosed on the Web [Integrated Report](PDF), is issued in PDF as an annual
report. We take into consideration thereadability, such as the layout at the timeof printing, and each chapter can also be
printed individually.

SHOWA DENKO REPORT 2018 (Digest)
We publish information focusing on the products, employee
activities and the major topics of the period, in order to deepen thestakeholders' understanding about the Showa Denko Group.

SHOWA DENKO REPORT 2018 on the Web Site (HTML)The CSR measures of the Showa Denko Group are disclosed on our
Web site. As well as focusing on the comprehensibility referring tovarious guidelines, we disseminate information with an improved
quickness on the activities performed during the period.
S HOWA DENKO R EP OR T 2 O18

03

CONTENTS

Our Vision
Showa Denko Group, under its Vision, has strived to realize “a company contributing to the sound growth of society” that
contributes toward creating a society where affluence and sustainability are harmonized.
In order to be trusted and evaluated by society through the continuous improvement of the corporate value, it is important
to maintain and develop appropriate relations with stakeholders such as shareholders, customers, business partners, local
communities and employees.
Also, in order to realize our Vision and develop the Group sustainably, we have defined what we should do as the “Our Code of
Conduct.”
We clarify this as "Our Vision" and promote the management for its realization.
We have established our slogan as a declaration to firmly “promise” our stakeholders this policy.

About Showa Denko
04 Showa Denko Group in Numbers
06 Showa Denko’s Ties with Society
08 Message from CEO
10 Showa Denko’s Business Model
12 Medium-term business plan, "Project 2020+"

60 CSR procurement
62 Human Rights and Labor Practice
66 Performance Data
68 Third-party Verification

Financial

20 Dialogue between the CEO and Outside Expert

70 Message from CFO

23 R&D of the Showa Denko Group

71 Financial Highlights

Governance

72 Management’s Discussion and Analysis
76 Consolidated financial statements
82 Corporate Data

CSR

Our Slogan“Shaping Ideas”
Our Code of Conduct

38 CSR Strategy
42 Stakeholder communications

Editorial policies

Report scope

Its Practical Guide

The Showa Denko Group restructured its CSR report and annual report in 2017
to publish the Showa Denko Report as an integrated report. In this integrated
report, we disclose the Group’s financial as well as nonfinancial information,
including descriptions of our consideration for the environment and society,governance, and medium- to long-term management strategies.

Period covered by this Report

Our Vision

As for disclosure items, we analyzed our stakeholders' opinions and requests
and covered priority topics, focusing on action policies and performance in2017 and giving specific examples.

“Showa Denko” as used in the text of this Report refers to Showa Denko
K.K., while “Showa Denko Group” refers mainly to Showa Denko and its
consolidated subsidiaries in Japan.

We at the Showa Denko Group will provide products and services that are useful and safe and exceed our

On our website, the online version of the report is also available with moredetails about the Showa Denko Group's CSR activities, including updated
information and environmental and social activity reports from each plant.

Publication datecustomers' expectations, thereby enhancing the value of the Group, giving satisfaction to our shareholders,and contributing to the sound growth of international society as a responsible corporate citizen.

Prepared by
TEL : +81-3-5470-3235

Our Slogan “Shaping Ideas”
Ideas, Hopes and dreams foryour happily ever after.

Website http://www.sdk.co.jp/english/csr.html
Imagination alone leads nowhere. Only when imagination is shaped
into reality does the world begin to change.
At Showa Denko, we are committed to shaping ideas.
Each one of us strives completely in all we do, believing thatthe dreams of humankind can be realized through the power ofchemical technology.
Today, as a company, we are becoming bolder and more dynamic.
Not only diligent and technology focused, we are a vital, proactive
group of unique minds that emphasizes fresh thinking and new
ways to apply our extraordinary technical expertise.
Closely working and partnering with leading global companies
in markets around the world, we are shaping ideas that realize
humanity’s hopes and dreams for more abundant and happier lives.

S HOWA DENKO R EP ORT 2 O18

This report covers information for the period January 1 to December 31, 2017,with some information also provided for 2018.

Organization covered

August 2018 (The next publication is August 2019)

Guidelines/guidance referenced

Public Relation Office, Showa Denko K.K.

02

48 Responsible Care

14 Introduction of Businesses of the Group

30 Corporate Governance

Our
Vision44 Highlights of CSR Activities

E-Mail sdk_prir@showadenko.com

ISO 26000: 2010
GRI Sustainability Reporting Standards 2016
Environmental Reporting Guidelines 2012 from the Ministry of theEnvironment of JapanThe International Integrated Reporting Framework from the International
Integrated Reporting Council (IIRC)

About the media to report our CSR information
This REPORTSHOWA DENKO REPORT 2018
(Integrated Report) (PDF)
The information comprehensively
disclosed on the Web [Integrated Report](PDF), is issued in PDF as an annual
report. We take into consideration thereadability, such as the layout at the timeof printing, and each chapter can also be
printed individually.

SHOWA DENKO REPORT 2018 (Digest)
We publish information focusing on the products, employee
activities and the major topics of the period, in order to deepen thestakeholders' understanding about the Showa Denko Group.

SHOWA DENKO REPORT 2018 on the Web Site (HTML)The CSR measures of the Showa Denko Group are disclosed on our
Web site. As well as focusing on the comprehensibility referring tovarious guidelines, we disseminate information with an improved
quickness on the activities performed during the period.
S HOWA DENKO R EP OR T 2 O18

03

About Showa Denko

Governance

CSR

FinancialPetrochemicals

Showa Denko Group in Numbers

OUR FIGURESThe Showa Denko Group conducts business globally across a range of fields. The following provides anumerical overview of the Group.

Showa
Denko's

Only

one, 1No.

products

The Showa Denko Group pioneered in commercial production of aluminum in Japan, and also produced ammonium sulfate fertilizer with homegrown method for the first time in Japan. Thus the Showa Denko Group has been providing society with useful products as a pioneering company
since its foundation. We will continue contributing to the sound growth of society as an individualized company that create "Only one" and "No. 1"
products and technologies.
High-purity gases for electronics

Graphite electrodes

High-purity aluminum foil for capacitors

No.1 share in the world

Our high-quality large-diameterelectrodes occupy No.1 share in the world

No.1 share in the world

These gases are used for etching, cleaning
and membrane
formulatingprocesses in
production ofsemiconductors
and LCDs.

Graphite electrodes are used in electric
steelmaking
furnaces to melt
scrap steel, andcontribute torecycling of steel.

This aluminum foil
is used to produce
aluminum
electrolytic
capacitors to be
used in cars andpower plants.

Ultra-bright LED

Carbon nanofibers(VGCF™)

Ethyl acetate

No.1 brightness in the world

The first commercialization in the world

We produce our proprietary red LED chipsthat emit 660nm
wavelength lightwhich is optimum
for plant-growth at
the top brightness
in the world.

VGCF™ is an additive to anodes of lithium ion
batteries.
It improves charge
and discharge
performance, lifeand capacities of
LIBs.

In-house developed production technology
unique in the world

79

Event

The Showa Denko Group started its business operations by focusing on the bright future of
the electrochemical industry, which utilized one of Japan’s important resources: abundant waterenergy. Originating from electrochemistry, our Group’s technology further evolved to cover thefields of inorganic chemistry, organic chemistry and metal materials. Today, the gene of our original

1908 ★Established Sobo Marine Products K.K. 1931 ★Started manufacturing ammonium
1921 ◆Established Takada Aluminum
sulfate using domestic technology(Showa Fertilizers K.K.)
Equipment Manufacturing K.K.
1934 ★Industrialized domestically produced
1926 ★Established Nihon Iodine K.K.
1928 ★Established Showa Fertilizers K.K.
aluminum (Nihon Iodine K.K.)
1937 ●Established Riken Kohaku Kogyo K.K.
1939 ★Established Showa Denko K.K.

1908 -

With the business on track under the spirit of “tenacity and indomitability”,
established the foundation of the Showa Denko Group.

1951 ●Achieved domestic production of synthetic resin
emulsion
1953 ●Achieved domestic production of unsaturated
polyester resin
1965 ●Achieved domestic production of vinyl ester resin

1951 -

Deepened and further developed business,taking advantage of postwar reconstruction and rapid growth

1981 ◆Started aluminum can collection activities at certain plants

CSR★ Showa Denko K.K.

04

S HOWA DENKO R EP ORT 2 O18

Chemicals

Aluminum

Electronics◆ Showa Aluminum Corporation● Showa Highpolymer Co., Ltd.

1969 ★Oita Petrochemical Complex started
commercial operation◆Showa Aluminum Can Corporation
produced the first aluminum can in Japan

10,864
Employees

Inorganics

segments

We will realize dreams for the future with Power of chemistry ×Power of technology.
We develop individualized product groups that realizes yourdreams by utilizing our unique ideas and reliable technologies thatmake the most of the potential of chemistry.

The Showa Denko Group has 10,864 employees, including
1,920 female employees.( As of December 31, 2017)

The Showa Denko Group
expands on a global scale

43

North America

Europebases

Overseas

35 %Sales in Japanand Overseas
Japan

5

10

The Showa Denko Group, led by Showa
Denko K.K., has 33 bases in Japan and 43
bases outside the country, allowing it to
conduct business on a global scale (Major
subsidiaries as of March 2018).

Asia

28

Net Sales¥780.4billionNet sales for 2017 was ¥780.4 billion, and increased in all segments.

65 %years ago

Founded

We produce various
petrochemical products
which are used as printing ink
for food packages, solvents forpaints, etc., with our originaltechnologies.

6

Otherstechnology is inherited to a wide variety of products that are essential in everyday life, including materials and components used in the information/
telecommunication industry and the automotive industry.
The following chronological table shows the history of the Group, including the histories of the former Showa Aluminum Corp. and former Showa
Highpolymer Co., Ltd., which are strongly connected to the Group’s current businesses.
1988 ★Established Showa Denko Carbon, Inc★Expanded into the hard disk business1986 -

Switched to energy-saving products
after overcomingoil crises

1990 ◆Started company-wide aluminum can recycling
activities
1995 ★Formulated “Responsible Care Action Guidelines”
1997 ★Published Responsible Care Report
1998 ★Established “Our Code of Conduct”

2001 ★◆Merged Showa Aluminum Corporation2009 ★Established Showa Denko HD Yamagata K.K
2010 ★●Merged Showa Highpolymer Co., Ltd.

2001 -

Expanded into the energy-saving and high value-adding business in fullscale, through the fusion of organic/inorganic and aluminum technologies.

2001 ★◆With the merger with Showa Aluminum Corporation as
the trigger, expanded aluminum can recycling activities to
Showa Denko’s plants, offices and group companies
2005 ★Issued a CSR Report★Signed the “RC Charter”

2017 ★Established Advanced Battery Materials Division★Established Showa Denko Carbon Holding GmbH2012 -Engaged inShaping Ideas in pursuit of evolving chemical company with individualized
products through the fusion of organic / inorganic and aluminum technologies

2012 ★Established “Our Code of Conduct and Its Practical Guide”
2013 ★Our long history of aluminum can recycling activities received the “Ministerof Economy, Trade and Industry's Prize” of the 3Rs (Reduce, Reuse, andRecycle) Promotion Merit Awards in FY 20132014 ★Resigned the amended Responsible Care Charter2016 ★Received the “Platinum Kurumin”

S HOWA DENKO R EP OR T 2 O18

05

About Showa Denko

Governance

CSR

FinancialPetrochemicals

Showa Denko Group in Numbers

OUR FIGURESThe Showa Denko Group conducts business globally across a range of fields. The following provides anumerical overview of the Group.

Showa
Denko's

Only

one, 1No.

products

The Showa Denko Group pioneered in commercial production of aluminum in Japan, and also produced ammonium sulfate fertilizer with homegrown method for the first time in Japan. Thus the Showa Denko Group has been providing society with useful products as a pioneering company
since its foundation. We will continue contributing to the sound growth of society as an individualized company that create "Only one" and "No. 1"
products and technologies.
High-purity gases for electronics

Graphite electrodes

High-purity aluminum foil for capacitors

No.1 share in the world

Our high-quality large-diameterelectrodes occupy No.1 share in the world

No.1 share in the world

These gases are used for etching, cleaning
and membrane
formulatingprocesses in
production ofsemiconductors
and LCDs.

Graphite electrodes are used in electric
steelmaking
furnaces to melt
scrap steel, andcontribute torecycling of steel.

This aluminum foil
is used to produce
aluminum
electrolytic
capacitors to be
used in cars andpower plants.

Ultra-bright LED

Carbon nanofibers(VGCF™)

Ethyl acetate

No.1 brightness in the world

The first commercialization in the world

We produce our proprietary red LED chipsthat emit 660nm
wavelength lightwhich is optimum
for plant-growth at
the top brightness
in the world.

VGCF™ is an additive to anodes of lithium ion
batteries.
It improves charge
and discharge
performance, lifeand capacities of
LIBs.

In-house developed production technology
unique in the world

79

Event

The Showa Denko Group started its business operations by focusing on the bright future of
the electrochemical industry, which utilized one of Japan’s important resources: abundant waterenergy. Originating from electrochemistry, our Group’s technology further evolved to cover thefields of inorganic chemistry, organic chemistry and metal materials. Today, the gene of our original

1908 ★Established Sobo Marine Products K.K. 1931 ★Started manufacturing ammonium
1921 ◆Established Takada Aluminum
sulfate using domestic technology(Showa Fertilizers K.K.)
Equipment Manufacturing K.K.
1934 ★Industrialized domestically produced
1926 ★Established Nihon Iodine K.K.
1928 ★Established Showa Fertilizers K.K.
aluminum (Nihon Iodine K.K.)
1937 ●Established Riken Kohaku Kogyo K.K.
1939 ★Established Showa Denko K.K.

1908 -

With the business on track under the spirit of “tenacity and indomitability”,
established the foundation of the Showa Denko Group.

1951 ●Achieved domestic production of synthetic resin
emulsion
1953 ●Achieved domestic production of unsaturated
polyester resin
1965 ●Achieved domestic production of vinyl ester resin

1951 -

Deepened and further developed business,taking advantage of postwar reconstruction and rapid growth

1981 ◆Started aluminum can collection activities at certain plants

CSR★ Showa Denko K.K.

04

S HOWA DENKO R EP ORT 2 O18

Chemicals

Aluminum

Electronics◆ Showa Aluminum Corporation● Showa Highpolymer Co., Ltd.

1969 ★Oita Petrochemical Complex started
commercial operation◆Showa Aluminum Can Corporation
produced the first aluminum can in Japan

10,864
Employees

Inorganics

segments

We will realize dreams for the future with Power of chemistry ×Power of technology.
We develop individualized product groups that realizes yourdreams by utilizing our unique ideas and reliable technologies thatmake the most of the potential of chemistry.

The Showa Denko Group has 10,864 employees, including
1,920 female employees.( As of December 31, 2017)

The Showa Denko Group
expands on a global scale

43

North America

Europebases

Overseas

35 %Sales in Japanand Overseas
Japan

5

10

The Showa Denko Group, led by Showa
Denko K.K., has 33 bases in Japan and 43
bases outside the country, allowing it to
conduct business on a global scale (Major
subsidiaries as of March 2018).

Asia

28

Net Sales¥780.4billionNet sales for 2017 was ¥780.4 billion, and increased in all segments.

65 %years ago

Founded

We produce various
petrochemical products
which are used as printing ink
for food packages, solvents forpaints, etc., with our originaltechnologies.

6

Otherstechnology is inherited to a wide variety of products that are essential in everyday life, including materials and components used in the information/
telecommunication industry and the automotive industry.
The following chronological table shows the history of the Group, including the histories of the former Showa Aluminum Corp. and former Showa
Highpolymer Co., Ltd., which are strongly connected to the Group’s current businesses.
1988 ★Established Showa Denko Carbon, Inc★Expanded into the hard disk business1986 -

Switched to energy-saving products
after overcomingoil crises

1990 ◆Started company-wide aluminum can recycling
activities
1995 ★Formulated “Responsible Care Action Guidelines”
1997 ★Published Responsible Care Report
1998 ★Established “Our Code of Conduct”

2001 ★◆Merged Showa Aluminum Corporation2009 ★Established Showa Denko HD Yamagata K.K
2010 ★●Merged Showa Highpolymer Co., Ltd.

2001 -

Expanded into the energy-saving and high value-adding business in fullscale, through the fusion of organic/inorganic and aluminum technologies.

2001 ★◆With the merger with Showa Aluminum Corporation as
the trigger, expanded aluminum can recycling activities to
Showa Denko’s plants, offices and group companies
2005 ★Issued a CSR Report★Signed the “RC Charter”

2017 ★Established Advanced Battery Materials Division★Established Showa Denko Carbon Holding GmbH2012 -Engaged inShaping Ideas in pursuit of evolving chemical company with individualized
products through the fusion of organic / inorganic and aluminum technologies

2012 ★Established “Our Code of Conduct and Its Practical Guide”
2013 ★Our long history of aluminum can recycling activities received the “Ministerof Economy, Trade and Industry's Prize” of the 3Rs (Reduce, Reuse, andRecycle) Promotion Merit Awards in FY 20132014 ★Resigned the amended Responsible Care Charter2016 ★Received the “Platinum Kurumin”

S HOWA DENKO R EP OR T 2 O18

05

About Showa Denko

Governance

CSR

FinancialShowa Denko’s Ties with Society

Showa Denko’s Ties with Society

The Showa Denko Group’s products are used as materials and components in diverse products that support andenrich your life and provide you with added convenience. We at the Showa Denko Group are conducting businessin consideration of both the visible and invisible ties that bind the Group to society. The following shows some of
the Group’s products.






























































 Water supply

・
Sodium hypochlorite(antimicrobial) Drainpipes

・Corrosion-resistant coating
・Fireproof dual-layer pipe Windows

・Synthetic zeolite Containers for yogurt/jelly
・Aluminum cap seals
・Polypropylene containers

 Aluminum cans

 Air-conditioner

・SiC epitaxial wafers for
power devices
・Rare-earth magnetic
alloys・Synthetic zeolite

 Snack Packages

・Normal propyl acetate(photogravure ink)

 Digital cameras

・Semiconductorabrasives
・Titanium oxide /Highpurity aluminum foil
(for capacitors)

 Beverages

・Carbon dioxide

 Flat-panel TVs

・LEDs
・LCD glass polishing material・Aluminum heat sinks
・Titanium oxide /High-purity
aluminum foil(for capacitors) Poultics

・Sodium polyacrylate (rawmaterial for pharmaceuticals)
・Ammonia (Antipruritic agents)

 Lighting・LEDs

 Cosmetics

・Vitamin C derivatives
・Vitamin E derivatives

 Apparel

・Ammonia (raw materials forsynthetic fibers)

06

S HOWA DENKO R EP ORT 2 O18

Plant factories

・LEDs
・Carbon dioxide
・Extruded aluminum shelves Electric steel furnaces
・Graphite electrodes Semiconductor plants

・High-purity gasses forsemiconductor processing
・Solvent for semiconductor
processing
・Semiconductor abrasives
・Waste gas treatment
equipment Tanks

・Corrosion-resistant coating Hospitals

・Rare-earth magnetic alloys
・Chloroprene Rubber(disposable gloves) Perm solutions

・Hair-curling agent

 Houses・External wall panels Agricultural materials
・Obsidian perlite

 Fertilizers
 Helmets

・Vinyl ester resins Motor bicycle

・Forged aluminum rods

 Automobiles

・SiC epitaxial wafers for powerdevices・Forged aluminum rods
・Cooling devices for power control
units
・Lithium-ion rechargeable batteries(Anode material, Carbon nanofibers,
Aluminum laminate film)
・Rare-earth magnetic alloys
・Ultra-bright LEDs
・Synthetic zeolite・Unsaturated polyester resins
・Emulsion (adhesive raw materials)
・Polypropylene

 Traffic signals

・Ultra-bright LEDs







 E-Bikes

・Rare-earth magnetic alloys

 Streetlights

・Aluminum poles Linear motor train

・SiC epitaxial wafers for powerdevices・Rare-earth magnetic alloys

 Wind power plants

・Rare-earth magnetic alloys
・Vinyl ester resins (blades) Hydrogen stations

・Hydrogen (as fuel for fuel-cellvehicles) Thermal Power plants

・Ammonia(denitration agent) Solar power plants

・SiC epitaxial wafers for powerdevices・High-purity gasses forsemiconductor processing Rooftops of buildings

・Waterproof paint for rooftops

 Personal computers・LEDs・High-purity gasses forsemiconductor processing
・Solvent for semiconductor
processing
・Semiconductor abrasives
・Solder resist Ink
・Alumina(heat radiation materials)
・Ethyl acetate (Adhesive)・Rare-earth magnetic alloys(Hard disk drives)
・Hard disk media

 Laser beam printers

・Aluminum cylinders

 Mobile phones, Smart phones
・Litium-ion rechargeable
batteries (Carbon nanofibers,
Aluminum laminate film)
・Rare-earth magnetic alloys(Vibration motor)
・Titanium oxide(for capacitors)

 Adhesive

・Emulsion
・Ethyl acetate

 Data Center

・Hard disk media

S HOWA DENKO R EP OR T 2 O18

07

About Showa Denko

Governance

CSR

FinancialShowa Denko’s Ties with Society

Showa Denko’s Ties with Society

The Showa Denko Group’s products are used as materials and components in diverse products that support andenrich your life and provide you with added convenience. We at the Showa Denko Group are conducting businessin consideration of both the visible and invisible ties that bind the Group to society. The following shows some of
the Group’s products.






























































 Water supply

・
Sodium hypochlorite(antimicrobial) Drainpipes

・Corrosion-resistant coating
・Fireproof dual-layer pipe Windows

・Synthetic zeolite Containers for yogurt/jelly
・Aluminum cap seals
・Polypropylene containers

 Aluminum cans

 Air-conditioner

・SiC epitaxial wafers for
power devices
・Rare-earth magnetic
alloys・Synthetic zeolite

 Snack Packages

・Normal propyl acetate(photogravure ink)

 Digital cameras

・Semiconductorabrasives
・Titanium oxide /Highpurity aluminum foil
(for capacitors)

 Beverages

・Carbon dioxide

 Flat-panel TVs

・LEDs
・LCD glass polishing material・Aluminum heat sinks
・Titanium oxide /High-purity
aluminum foil(for capacitors) Poultics

・Sodium polyacrylate (rawmaterial for pharmaceuticals)
・Ammonia (Antipruritic agents)

 Lighting・LEDs

 Cosmetics

・Vitamin C derivatives
・Vitamin E derivatives

 Apparel

・Ammonia (raw materials forsynthetic fibers)

06

S HOWA DENKO R EP ORT 2 O18

Plant factories

・LEDs
・Carbon dioxide
・Extruded aluminum shelves Electric steel furnaces
・Graphite electrodes Semiconductor plants

・High-purity gasses forsemiconductor processing
・Solvent for semiconductor
processing
・Semiconductor abrasives
・Waste gas treatment
equipment Tanks

・Corrosion-resistant coating Hospitals

・Rare-earth magnetic alloys
・Chloroprene Rubber(disposable gloves) Perm solutions

・Hair-curling agent

 Houses・External wall panels Agricultural materials
・Obsidian perlite

 Fertilizers
 Helmets

・Vinyl ester resins Motor bicycle

・Forged aluminum rods

 Automobiles

・SiC epitaxial wafers for powerdevices・Forged aluminum rods
・Cooling devices for power control
units
・Lithium-ion rechargeable batteries(Anode material, Carbon nanofibers,
Aluminum laminate film)
・Rare-earth magnetic alloys
・Ultra-bright LEDs
・Synthetic zeolite・Unsaturated polyester resins
・Emulsion (adhesive raw materials)
・Polypropylene

 Traffic signals

・Ultra-bright LEDs







 E-Bikes

・Rare-earth magnetic alloys

 Streetlights

・Aluminum poles Linear motor train

・SiC epitaxial wafers for powerdevices・Rare-earth magnetic alloys

 Wind power plants

・Rare-earth magnetic alloys
・Vinyl ester resins (blades) Hydrogen stations

・Hydrogen (as fuel for fuel-cellvehicles) Thermal Power plants

・Ammonia(denitration agent) Solar power plants

・SiC epitaxial wafers for powerdevices・High-purity gasses forsemiconductor processing Rooftops of buildings

・Waterproof paint for rooftops

 Personal computers・LEDs・High-purity gasses forsemiconductor processing
・Solvent for semiconductor
processing
・Semiconductor abrasives
・Solder resist Ink
・Alumina(heat radiation materials)
・Ethyl acetate (Adhesive)・Rare-earth magnetic alloys(Hard disk drives)
・Hard disk media

 Laser beam printers

・Aluminum cylinders

 Mobile phones, Smart phones
・Litium-ion rechargeable
batteries (Carbon nanofibers,
Aluminum laminate film)
・Rare-earth magnetic alloys(Vibration motor)
・Titanium oxide(for capacitors)

 Adhesive

・Emulsion
・Ethyl acetate

 Data Center

・Hard disk media

S HOWA DENKO R EP OR T 2 O18

07

About Showa Denko

Governance

CSR

Financial

Message from CEO(Billions of Yen)

2017
results2018 revised
forecast*

Net sales

780.4

935.0＊1

Operating income

77.8

137.0

Net income

64.0

131.5

Net income attributable to owners of the parent

33.5

85.0

Year-end dividends

¥50*2

¥90*3

*1 Announced on May 9, 2018.
*2 SDK paid dividends of ¥30 per share based on the record date of May 11, 2017.
The table above does not include this amount.
*3 Announced on May 29, 2018.

We will work to give satisfaction
to all our stakeholders

Dramatic changes in the world economy andbusiness environment
The world is undergoing substantial changes, including
climate change, depletion of resources, demographic changes,
urbanization, multipolarization of the world economy, and changes
in the feedstock/energy-resources market. Moreover, dramatic
technological progress, such as in artificial intelligence and IoTtechnologies, is transforming our economy, society, and daily life.
On the other hand, we are doing business in an environment inwhich multiple factors are interrelated in complex ways, making it
difficult for us to predict the future. For example, various countries'
political trends have the potential to produce drastic changes inforeign exchange rates as well as in the price of crude oil and othermaterials. These challenges notwithstanding, we will continue tomanage our business from a medium- to long-term viewpoint andavoid being easily swayed by short-term changes in the businessenvironment. The Showa Denko Group is a unique chemical
manufacturer engaged in a wide spectrum of business segments
including Petrochemicals, Chemicals, Electronics, Inorganics, andAluminum segments. By taking advantage of our unique qualities
and deepening and fusing our inorganic, metal, and organic
technologies, we will produce excellent individualized products tobecome a “company contributing to the sound growth of society”
toward creating a society where affluence and sustainability areharmonized.

08

S HOWA DENKO R EP ORT 2 O18

Results for 2017 and outlook for 2018
As for 2017, thanks to robust demand in the Asian petrochemicals
market, we were able to secure a high profit margin in the
Petrochemicals segment. In the graphite electrode business too weachieved results far exceeding the profit target, being backed by
the recovery of the market in the latter half of the year. As a result,
we broke our past records for all of our income indicators for theyear, namely, operating income, ordinary income, and net income.
In 2018, we will again break the records for operating income andnet income by offsetting the cost of the large-scale equipment repair
performed once every four years in the Petrochemicals segment
and the decrease in profit in the hard disk (HD) media business by a
substantial increase in profit in the graphite electrode business, whose
size has been greatly expanded due to the business integration.
As a result of implementing multiple structural reform measuresin and before 2016, we have successfully changed our corporate
structure to one that allows us to take advantage of the favorable
market environment. We have thus transformed our profit structure
for the better.
For the term-end dividend per share, we increased it to 50 yen in2017. We plan to increase the total amount of interim and year-end
dividends to 90 yen per share in 2018. Based on the assumptionthat we will achieve record-high operating income and net income
again in 2018, we will shift the use of funds from improving
the financial structure to giving more consideration to growthinvestments and the return of profit to shareholders, thereby
making improvements for greater corporate value.

Enhancement of the corporate structure to
make high profits in a stable mannerShowa Denko launched its medium-term business plan, “Project
2020+,” in 2016. Under the plan it is deemed critical to improve
profitability and minimize profit fluctuations.
For the improvement of profitability, we set the target of
143 billion yen for cumulative operating income for the threeyear period of the plan, and have made steady progress towardachieving this target. For the minimization of fluctuations in profit,
however, we have yet to meet the challenge.
In 2019, we will start a new three-year business plan and aim toachieve cumulative operating income exceeding 200 billion yen for
the next three years in a stable manner.
In order to continue generating high profits even after thebusiness environment ceases to provide us with tailwinds, we must
constantly foster business reforms to increase the robustness of
our company. To this end, we unquestionably need to expand our
individualized businesses.
▶ 3-year accumulated operating income(Billions of Yen) ■ Petrochemicals■ Chemicals■ Electronics■ Inorganics■ Aluminum■ Others

256.9

143.0
80.0

΄13-΄15* Announced on May 9, 2018.

΄16 -΄18 Project 2020+

΄16 -΄18 revised forecast*

Expansion of individualized businesses
For Showa Denko, the term “individualized businesses” refers
to businesses that can maintain both profitability and stability
at a high level in a sustainable manner. Specifically, it means
businesses that have: (1) an operating income margin of 10%, (2)operating income of several billion yen, and (3) high tolerance
to changes in the market environment. Three of our businesses,
namely, the HD media, electronic-material-processing high-purity
gas, and graphite electrode businesses fall under this definition.
The market sizes of these businesses are appropriate for ourcompany. We have increased our presence in the respective
markets by taking advantage of our high market shares as well as

our unique technologies and logistics ability.
By 2025, we will have transformed at least 50% of our businesses
into individualized businesses. To this end, we will categorize ourbusinesses into businesses for which we will work to increase sales
in growth markets and those for which we will focus on increasing
the operating income margin in mature markets, and will thenformulate specific strategies for both types of businesses.
Petrochemicals
Industrial gasses
Basic chemicals
High-purity foil
Aluminum specialty components
Shotic™,
Ceramics
Rare earths
SiC epi-wafer for power devices
LIB materials

Aluminum cans,
Functional chemicals”Individualizedbusinesses”

HD, high-purity gasses
for electronics,
graphite electrodes“Individualized businesses”
will account for half or moreof all businesses in 2025

Toward sustainable growth
Recently, companies have been increasingly required to incorporate
environmental, social and governance (ESG) viewpoints into
their business management and give due consideration to
the Sustainable Development Goals (SDGs). The Showa Denko
Group has been regarding the fulfillment of its corporate social
responsibility (CSR) as the basis for its business management.
We have been meeting the expectations of all our stakeholders
by providing products, technologies, and services that meet theneeds of customers and society in addition to conducting businessactivities in an environment-friendly manner. At the same time, wehave been implementing measures to foster compliance, diversity
management, and corporate governance.
While our business environment and the world economy are
constantly changing, we have a clear and constant goal, which is
to give satisfaction to all our stakeholders and to show them thepresent robustness and bright future of Showa Denko.
Under our next medium-term business plan, which we are now
formulating, we will work to increase customer value by expanding
our individualized businesses and will also increase our social value
by giving consideration to ESG issues and the SDGs.
The Showa Denko Group is heading toward one goal, butthat goal can be attained in multiple ways, not just one. Basedon this recognition, we will take actions without being afraid ofconfronting change so that the Showa Denko Group can maketremendous achievements as a company contributing to the soundgrowth of society toward creating a society in which affluence andsustainability are harmonized.
We would like to ask you to pay attention to our Group’s future
activities.

Kohei Morikawa

President and CEO
July 2018

S HOWA DENKO R EP OR T 2 O18

09

About Showa Denko

Governance

CSR

Financial

Message from CEO(Billions of Yen)

2017
results2018 revised
forecast*

Net sales

780.4

935.0＊1

Operating income

77.8

137.0

Net income

64.0

131.5

Net income attributable to owners of the parent

33.5

85.0

Year-end dividends

¥50*2

¥90*3

*1 Announced on May 9, 2018.
*2 SDK paid dividends of ¥30 per share based on the record date of May 11, 2017.
The table above does not include this amount.
*3 Announced on May 29, 2018.

We will work to give satisfaction
to all our stakeholders

Dramatic changes in the world economy andbusiness environment
The world is undergoing substantial changes, including
climate change, depletion of resources, demographic changes,
urbanization, multipolarization of the world economy, and changes
in the feedstock/energy-resources market. Moreover, dramatic
technological progress, such as in artificial intelligence and IoTtechnologies, is transforming our economy, society, and daily life.
On the other hand, we are doing business in an environment inwhich multiple factors are interrelated in complex ways, making it
difficult for us to predict the future. For example, various countries'
political trends have the potential to produce drastic changes inforeign exchange rates as well as in the price of crude oil and othermaterials. These challenges notwithstanding, we will continue tomanage our business from a medium- to long-term viewpoint andavoid being easily swayed by short-term changes in the businessenvironment. The Showa Denko Group is a unique chemical
manufacturer engaged in a wide spectrum of business segments
including Petrochemicals, Chemicals, Electronics, Inorganics, andAluminum segments. By taking advantage of our unique qualities
and deepening and fusing our inorganic, metal, and organic
technologies, we will produce excellent individualized products tobecome a “company contributing to the sound growth of society”
toward creating a society where affluence and sustainability areharmonized.

08

S HOWA DENKO R EP ORT 2 O18

Results for 2017 and outlook for 2018
As for 2017, thanks to robust demand in the Asian petrochemicals
market, we were able to secure a high profit margin in the
Petrochemicals segment. In the graphite electrode business too weachieved results far exceeding the profit target, being backed by
the recovery of the market in the latter half of the year. As a result,
we broke our past records for all of our income indicators for theyear, namely, operating income, ordinary income, and net income.
In 2018, we will again break the records for operating income andnet income by offsetting the cost of the large-scale equipment repair
performed once every four years in the Petrochemicals segment
and the decrease in profit in the hard disk (HD) media business by a
substantial increase in profit in the graphite electrode business, whose
size has been greatly expanded due to the business integration.
As a result of implementing multiple structural reform measuresin and before 2016, we have successfully changed our corporate
structure to one that allows us to take advantage of the favorable
market environment. We have thus transformed our profit structure
for the better.
For the term-end dividend per share, we increased it to 50 yen in2017. We plan to increase the total amount of interim and year-end
dividends to 90 yen per share in 2018. Based on the assumptionthat we will achieve record-high operating income and net income
again in 2018, we will shift the use of funds from improving
the financial structure to giving more consideration to growthinvestments and the return of profit to shareholders, thereby
making improvements for greater corporate value.

Enhancement of the corporate structure to
make high profits in a stable mannerShowa Denko launched its medium-term business plan, “Project
2020+,” in 2016. Under the plan it is deemed critical to improve
profitability and minimize profit fluctuations.
For the improvement of profitability, we set the target of
143 billion yen for cumulative operating income for the threeyear period of the plan, and have made steady progress towardachieving this target. For the minimization of fluctuations in profit,
however, we have yet to meet the challenge.
In 2019, we will start a new three-year business plan and aim toachieve cumulative operating income exceeding 200 billion yen for
the next three years in a stable manner.
In order to continue generating high profits even after thebusiness environment ceases to provide us with tailwinds, we must
constantly foster business reforms to increase the robustness of
our company. To this end, we unquestionably need to expand our
individualized businesses.
▶ 3-year accumulated operating income(Billions of Yen) ■ Petrochemicals■ Chemicals■ Electronics■ Inorganics■ Aluminum■ Others

256.9

143.0
80.0

΄13-΄15* Announced on May 9, 2018.

΄16 -΄18 Project 2020+

΄16 -΄18 revised forecast*

Expansion of individualized businesses
For Showa Denko, the term “individualized businesses” refers
to businesses that can maintain both profitability and stability
at a high level in a sustainable manner. Specifically, it means
businesses that have: (1) an operating income margin of 10%, (2)operating income of several billion yen, and (3) high tolerance
to changes in the market environment. Three of our businesses,
namely, the HD media, electronic-material-processing high-purity
gas, and graphite electrode businesses fall under this definition.
The market sizes of these businesses are appropriate for ourcompany. We have increased our presence in the respective
markets by taking advantage of our high market shares as well as

our unique technologies and logistics ability.
By 2025, we will have transformed at least 50% of our businesses
into individualized businesses. To this end, we will categorize ourbusinesses into businesses for which we will work to increase sales
in growth markets and those for which we will focus on increasing
the operating income margin in mature markets, and will thenformulate specific strategies for both types of businesses.
Petrochemicals
Industrial gasses
Basic chemicals
High-purity foil
Aluminum specialty components
Shotic™,
Ceramics
Rare earths
SiC epi-wafer for power devices
LIB materials

Aluminum cans,
Functional chemicals”Individualizedbusinesses”

HD, high-purity gasses
for electronics,
graphite electrodes“Individualized businesses”
will account for half or moreof all businesses in 2025

Toward sustainable growth
Recently, companies have been increasingly required to incorporate
environmental, social and governance (ESG) viewpoints into
their business management and give due consideration to
the Sustainable Development Goals (SDGs). The Showa Denko
Group has been regarding the fulfillment of its corporate social
responsibility (CSR) as the basis for its business management.
We have been meeting the expectations of all our stakeholders
by providing products, technologies, and services that meet theneeds of customers and society in addition to conducting businessactivities in an environment-friendly manner. At the same time, wehave been implementing measures to foster compliance, diversity
management, and corporate governance.
While our business environment and the world economy are
constantly changing, we have a clear and constant goal, which is
to give satisfaction to all our stakeholders and to show them thepresent robustness and bright future of Showa Denko.
Under our next medium-term business plan, which we are now
formulating, we will work to increase customer value by expanding
our individualized businesses and will also increase our social value
by giving consideration to ESG issues and the SDGs.
The Showa Denko Group is heading toward one goal, butthat goal can be attained in multiple ways, not just one. Basedon this recognition, we will take actions without being afraid ofconfronting change so that the Showa Denko Group can maketremendous achievements as a company contributing to the soundgrowth of society toward creating a society in which affluence andsustainability are harmonized.
We would like to ask you to pay attention to our Group’s future
activities.

Kohei Morikawa

President and CEO
July 2018

S HOWA DENKO R EP OR T 2 O18

09

About Showa Denko

Governance

CSR

FinancialShowa Denko Group's Business Model
The Showa Denko Group input a variety of capitals that support

By the power of chemistry we will help people make theirdevelopment of various products and technologies including

wishes and dreams come true and will thereby contribute toproduction technologies, and output high value-added products,

the creation of a society where affluence and sustainability aretechnologies and services through six business segments.

harmonized.

Social changes and issues

Investment capital

Showa Denko Group’s business activities

Values to be createdShowa Denko Group’s medium- to long-term goals

Financial
capitalExpand individualized businesses and increase profitability to build abusiness structure with minimal revenue fluctuations

Consolidated total assets¥1,024.7

Values created in business activities

billion(As of December31,2017)

Financial

Instrumental
capital◦Multi-polarity ofworld economy◦Changes in thecomposition of
population

Worldwide
production bases

OthersIntellectual
capital¥60

billion(2016-18 total)◦Dramaticdevelopment oftechnologies

HumancapitalMedium-termbusiness plan

Chemicals

Project 2020+

R&D budget◦Progress ofurbanization◦Changes in theenvironment
surrounding raw
materials and fuels

Petrochemicals

AluminumS HOWA DENKO R EP ORT 2 O18

Non-Financial
Serious incidents related toequipment/environment

Zero

Industrial waste
Quality claim

Maintain zero emissions
1/2 or less (relative to 2015)

Rate of lost-time injuries
as the group

0.1 or less

Ratio of handicapped
employees

P.20

Electronics

Important CSR issue
14 Materiality Issues
P.26

10

40% => 60% of net sales by 2025
0.8 to 1.0

Expand individualized businesses

Inorganics

Cooperation withbusiness partners

million kl(2017, Group total)

Constantly within

Number of female managers 40 female managers at the end of 2020
and its ratio(5% of all managers)

Social &relationshipcapital1.20(2015)

Debt/equity ratio

2.3% or more

Values to be created in the five market domains
Electronics·Intensive accumulation and dispatch of information

10,864

Energy (crude oil equivalent)

Aiming to make overseas sales occupy

R&D strategy(As of December31,2017)

Naturalcapital30% => 50% of net sales by 2025

Solidify revenue bases

The number of Group employees◦Climate change
and depletion of
resources

We are now formulating a new medium-term business plan.

Aiming to make individualized businesses occupy (2015)

Solution ofsocial issues

Contributes toward creating asociety where affluence andsustainability are harmonized.

Mobility·Safety/Security ·Enhanced durability ·Emission control·Improving fuel efficiency
Energy·Improving resource efficiency ·Diversifying energy sources·Efficient use of electricity
Infrastructure·Mitigating environmental burden ·Resource recycling

Become a company
contributing to thesound growth ofsociety

Living Environment·Safety/Security ·Industrialization of agriculture

6 Segments
P.12

			

Dialogue with stakeholders(Shareholders and Investors/ Customers and Business partners/ Local communities and authorities/ Employees)

S HOWA DENKO R EP OR T 2 O18

11

About Showa Denko

Governance

CSR

FinancialShowa Denko Group's Business Model
The Showa Denko Group input a variety of capitals that support

By the power of chemistry we will help people make theirdevelopment of various products and technologies including

wishes and dreams come true and will thereby contribute toproduction technologies, and output high value-added products,

the creation of a society where affluence and sustainability aretechnologies and services through six business segments.

harmonized.

Social changes and issues

Investment capital

Showa Denko Group’s business activities

Values to be createdShowa Denko Group’s medium- to long-term goals

Financial
capitalExpand individualized businesses and increase profitability to build abusiness structure with minimal revenue fluctuations

Consolidated total assets¥1,024.7

Values created in business activities

billion(As of December31,2017)

Financial

Instrumental
capital◦Multi-polarity ofworld economy◦Changes in thecomposition of
population

Worldwide
production bases

OthersIntellectual
capital¥60

billion(2016-18 total)◦Dramaticdevelopment oftechnologies

HumancapitalMedium-termbusiness plan

Chemicals

Project 2020+

R&D budget◦Progress ofurbanization◦Changes in theenvironment
surrounding raw
materials and fuels

Petrochemicals

AluminumS HOWA DENKO R EP ORT 2 O18

Non-Financial
Serious incidents related toequipment/environment

Zero

Industrial waste
Quality claim

Maintain zero emissions
1/2 or less (relative to 2015)

Rate of lost-time injuries
as the group

0.1 or less

Ratio of handicapped
employees

P.20

Electronics

Important CSR issue
14 Materiality Issues
P.26

10

40% => 60% of net sales by 2025
0.8 to 1.0

Expand individualized businesses

Inorganics

Cooperation withbusiness partners

million kl(2017, Group total)

Constantly within

Number of female managers 40 female managers at the end of 2020
and its ratio(5% of all managers)

Social &relationshipcapital1.20(2015)

Debt/equity ratio

2.3% or more

Values to be created in the five market domains
Electronics·Intensive accumulation and dispatch of information

10,864

Energy (crude oil equivalent)

Aiming to make overseas sales occupy

R&D strategy(As of December31,2017)

Naturalcapital30% => 50% of net sales by 2025

Solidify revenue bases

The number of Group employees◦Climate change
and depletion of
resources

We are now formulating a new medium-term business plan.

Aiming to make individualized businesses occupy (2015)

Solution ofsocial issues

Contributes toward creating asociety where affluence andsustainability are harmonized.

Mobility·Safety/Security ·Enhanced durability ·Emission control·Improving fuel efficiency
Energy·Improving resource efficiency ·Diversifying energy sources·Efficient use of electricity
Infrastructure·Mitigating environmental burden ·Resource recycling

Become a company
contributing to thesound growth ofsociety

Living Environment·Safety/Security ·Industrialization of agriculture

6 Segments
P.12

			

Dialogue with stakeholders(Shareholders and Investors/ Customers and Business partners/ Local communities and authorities/ Employees)

S HOWA DENKO R EP OR T 2 O18

11

About Showa Denko

Governance

CSR

Financial

Medium-term business plan: “Project 2020+”

Medium-term business plan: “Project 2020+”

Individualized
30% businesses

The Showa Denko Group has been implementing the three-year
medium-term business plan, “Project 2020+,” since 2016. In line withthis plan, we will implement innovative measures with a focus on
stability in addition to growth potential and profitability, including:

Domestic
sales

50%

40%

Our progress with “Project 2020+”
We will introduce the case of the carbon business, which is showing improved performance, as an example of our progress with “Project 2020+.”60%

Aiming to makeindividualized businesses*
occupyOverseassales

Aiming to make overseas sales

50% of net sales

occupy60% of net sales

Aiming to make the carbon business a truly
individualized business for the Showa Denko Group(1) improving the profitability of existing businesses through renewalof business models; (2) making the best use of M&A and business
partnerships; and (3) accelerating overseas business expansion, therebyHighsolidifying the revenue bases and expanding individualized businesses* Individualized business: Refers to a business that is exceeding a certain scale, generating acertain level of profit, and offering highly competitive technologies and/or business models.

▶ Showa Denko Group’s contribution to society
We are operating businesses targeting the five market domainsthat we set when we formulated the medium-term business plan:

Operating income margin (Return)for sustainable growth.

Infrastructure, Energy, Mobility, Living Environment, and Elec-tronics.
We will supply high value-added products, technologies, andShowa Denko Improvein 2025
profitability
General Manager, Carbon Division

Hidehito Takahashi
Expandindividualizedbusinesses
Stabilize income

Low

Rate of change (Risk)

services to customers by making use of our Group’s materials,

Showa
Denko
in 2015

In October 2016, Showa Denko made an announcement about therunning the business are doubled, the integration will be meaningless.

integration of SGL GE Holding GmbH (presently Showa Denko Carbon

Accordingly, we must spare no effort to produce an integration effectHolding GmbH: SDCH) into its carbon business. On October 2, 2017,of 4 billion yen, as announced in 2016. In addition to sharing theHigh

one year after the announcement, the integration was completed

best practices as already mentioned, we will implement measures towith the approval of the related authorities in each country. As a result,increase our logistics efficiency and benefit from economies of scale

Showa Denko became the world’s largest graphite electrode supplier,in the procurement of materials and other operations. To achieve

boasting more than 30% of the global total production capacity.

the target of becoming the very best manufacturer of graphite

components, technologies, and human resources.
◦ We offer high value-adding “products × technology ×
services” to We offer high val-ue-adding
Intensive accumulationand dispatch of
information

Mitigating environmental
burdenResource recycling

Electronics
Livingenvironment

Infrastructure
Mobility
EnergyImproving resource efficiency
Utilizing alternative energy
Efficient use of electricity
Diversifying energy sources

Safety/Security
Industrializationof agriculture

Safety/Security
Enhanced durability
Emission control
Improving fuel efficiency▶ Target image of the Showa Denko Group in 2025
We will take a market-oriented approach to our products, which
are developed through a product-oriented approach in the
aforementioned five market domains, with an eye to establishing abusiness structure that is not easily impacted by market conditions andwhere revenue fluctuations are minimized.
We will increase the share of the individualized businesses in theGroup's total sales from the present 30% to 50%. Also, with a focus
on the growth businesses, we will expand our overseas sales ratio
from 40% to 60%, thereby increasing our profitability and suppressing
revenue fluctuations.

▶ Portfolio

The graphite electrode business is easily influenced by changes inelectrodes in terms of both quality and cost, we must stably supply

the external environment, including trends in the iron & steel industry.

products with high cost performance to customers. To this end, we

We announced the business integration in an extremely difficult

will work to optimize our business, determining at which of the Groupbusinesses, while proactively expanding the three “Growthaccelerating”

market environment and some were skeptical about the integration.

bases we can manufacture the products needed by customers withbusinesses in line with the growth of overseas markets. In the lithium-

Subsequently, however, the excessive iron & steel production inappropriate quality and pricing and how we can maximize our profit inion battery materials business, which we have included in the “Ad-

China was discontinued and the market began to recover, helping us

the business. As the world’s top graphite electrode manufacturer, wevantage-establishing” businesses, we will expand our supply capacity

successfully implement the M&A project. But the business integration

will also work globally to draw the attention of our customers to thein response to the rapid expansion of the automotive components

is not in and of itself our target or goal. We need to provide customers

importance of partnerships.

market. Also, for SiC epitaxial wafers for power devices, we are fosteringwith the greatest value based on the integration, for which alltechnological development ahead of the full-scale launch of themembers of the Carbon Division are continuing to work hard.

For each business, we are speeding up the measures based on the
missions defined for each category of the business portfolio.
We will produce stable profit and cash flow from the “Baseshaping”

market while proactively searching for opportunities in the market.

Showa Denko’s graphite electrodes are highly rated by customers

in that it has an “operating income margin of 10% or higher” andFor our individual businesses, we are making reexaminations infor their quality and customization. In particular, for ultra-high power“operating income of at least several billion yen.” However, for “highconsideration of the business environment, profitability, and business(UHP) graphite electrodes with large diameters, we supply products

tolerance to changes in the business environment,” we can provemodels with a view to restructuring them, including by means ofwith the world’s top quality and take the top spot in the market. SDCH,

that the business has such tolerance only after the environment

consolidation and withdrawal.

meanwhile, has an advantage in terms of the manufacturing cost ofdeteriorates. Presently, we can only say that the graphite electrodegraphite electrodes and has excellent human resources. The businessbusiness is a qualified candidate to be an individualized business.

◦M ission of each business

S HOWA DENKO R EP ORT 2 O18

integration has made it possible for us to share the best practices of

To cope with prospective market
growth, establish business model withcompetitive advantage in terms ofbusiness and technical development.

LIB materials
SiC epi-wafer for
power devices
Rare earths
Ceramics
Aluminum specialty
components

Actively take strategic measures.
Realize rapid expansion of businessby preempting market growth.

Advantageestablishing

Growthaccelerating

Rebuilding

Baseshaping

Increase profit and cash flow throughrebuilding of business environment,
profitability and business model.

12

The Showa Denko Group aims to expand individualized businesses,
and the graphite electrode business is an individualized business

High-purity gases
for electronics
Functional chemicals
Aluminum cans

We aim to develop the business into one that can post operating

the two companies for technologies and production processes, which

income of 10 billion yen even in a severe market downturn. To thiswill help us establish ourselves as the No. 1 supplier in the industry inend, we will work to become the very best supplier in the industry andterms of both quality and cost.

make our business a truly individualized business as early as possible.

As a result of the business integration, we have become theworld’s largest manufacturer of graphite electrodes, but if the costs of

HD Graphite electrodes
Petrochemicals
Industrial gases
ShoticTM
High-purity aluminum foil

Market and business have certain scale. Have
more power to resist market fluctuation, andmake stable profit and cash flow.

S HOWA DENKO R EP OR T 2 O18

13

About Showa Denko

Governance

CSR

Financial

Medium-term business plan: “Project 2020+”

Medium-term business plan: “Project 2020+”

Individualized
30% businesses

The Showa Denko Group has been implementing the three-year
medium-term business plan, “Project 2020+,” since 2016. In line withthis plan, we will implement innovative measures with a focus on
stability in addition to growth potential and profitability, including:

Domestic
sales

50%

40%

Our progress with “Project 2020+”
We will introduce the case of the carbon business, which is showing improved performance, as an example of our progress with “Project 2020+.”60%

Aiming to makeindividualized businesses*
occupyOverseassales

Aiming to make overseas sales

50% of net sales

occupy60% of net sales

Aiming to make the carbon business a truly
individualized business for the Showa Denko Group(1) improving the profitability of existing businesses through renewalof business models; (2) making the best use of M&A and business
partnerships; and (3) accelerating overseas business expansion, therebyHighsolidifying the revenue bases and expanding individualized businesses* Individualized business: Refers to a business that is exceeding a certain scale, generating acertain level of profit, and offering highly competitive technologies and/or business models.

▶ Showa Denko Group’s contribution to society
We are operating businesses targeting the five market domainsthat we set when we formulated the medium-term business plan:

Operating income margin (Return)for sustainable growth.

Infrastructure, Energy, Mobility, Living Environment, and Elec-tronics.
We will supply high value-added products, technologies, andShowa Denko Improvein 2025
profitability
General Manager, Carbon Division

Hidehito Takahashi
Expandindividualizedbusinesses
Stabilize income

Low

Rate of change (Risk)

services to customers by making use of our Group’s materials,

Showa
Denko
in 2015

In October 2016, Showa Denko made an announcement about therunning the business are doubled, the integration will be meaningless.

integration of SGL GE Holding GmbH (presently Showa Denko Carbon

Accordingly, we must spare no effort to produce an integration effectHolding GmbH: SDCH) into its carbon business. On October 2, 2017,of 4 billion yen, as announced in 2016. In addition to sharing theHigh

one year after the announcement, the integration was completed

best practices as already mentioned, we will implement measures towith the approval of the related authorities in each country. As a result,increase our logistics efficiency and benefit from economies of scale

Showa Denko became the world’s largest graphite electrode supplier,in the procurement of materials and other operations. To achieve

boasting more than 30% of the global total production capacity.

the target of becoming the very best manufacturer of graphite

components, technologies, and human resources.
◦ We offer high value-adding “products × technology ×
services” to We offer high val-ue-adding
Intensive accumulationand dispatch of
information

Mitigating environmental
burdenResource recycling

Electronics
Livingenvironment

Infrastructure
Mobility
EnergyImproving resource efficiency
Utilizing alternative energy
Efficient use of electricity
Diversifying energy sources

Safety/Security
Industrializationof agriculture

Safety/Security
Enhanced durability
Emission control
Improving fuel efficiency▶ Target image of the Showa Denko Group in 2025
We will take a market-oriented approach to our products, which
are developed through a product-oriented approach in the
aforementioned five market domains, with an eye to establishing abusiness structure that is not easily impacted by market conditions andwhere revenue fluctuations are minimized.
We will increase the share of the individualized businesses in theGroup's total sales from the present 30% to 50%. Also, with a focus
on the growth businesses, we will expand our overseas sales ratio
from 40% to 60%, thereby increasing our profitability and suppressing
revenue fluctuations.

▶ Portfolio

The graphite electrode business is easily influenced by changes inelectrodes in terms of both quality and cost, we must stably supply

the external environment, including trends in the iron & steel industry.

products with high cost performance to customers. To this end, we

We announced the business integration in an extremely difficult

will work to optimize our business, determining at which of the Groupbusinesses, while proactively expanding the three “Growthaccelerating”

market environment and some were skeptical about the integration.

bases we can manufacture the products needed by customers withbusinesses in line with the growth of overseas markets. In the lithium-

Subsequently, however, the excessive iron & steel production inappropriate quality and pricing and how we can maximize our profit inion battery materials business, which we have included in the “Ad-

China was discontinued and the market began to recover, helping us

the business. As the world’s top graphite electrode manufacturer, wevantage-establishing” businesses, we will expand our supply capacity

successfully implement the M&A project. But the business integration

will also work globally to draw the attention of our customers to thein response to the rapid expansion of the automotive components

is not in and of itself our target or goal. We need to provide customers

importance of partnerships.

market. Also, for SiC epitaxial wafers for power devices, we are fosteringwith the greatest value based on the integration, for which alltechnological development ahead of the full-scale launch of themembers of the Carbon Division are continuing to work hard.

For each business, we are speeding up the measures based on the
missions defined for each category of the business portfolio.
We will produce stable profit and cash flow from the “Baseshaping”

market while proactively searching for opportunities in the market.

Showa Denko’s graphite electrodes are highly rated by customers

in that it has an “operating income margin of 10% or higher” andFor our individual businesses, we are making reexaminations infor their quality and customization. In particular, for ultra-high power“operating income of at least several billion yen.” However, for “highconsideration of the business environment, profitability, and business(UHP) graphite electrodes with large diameters, we supply products

tolerance to changes in the business environment,” we can provemodels with a view to restructuring them, including by means ofwith the world’s top quality and take the top spot in the market. SDCH,

that the business has such tolerance only after the environment

consolidation and withdrawal.

meanwhile, has an advantage in terms of the manufacturing cost ofdeteriorates. Presently, we can only say that the graphite electrodegraphite electrodes and has excellent human resources. The businessbusiness is a qualified candidate to be an individualized business.

◦M ission of each business

S HOWA DENKO R EP ORT 2 O18

integration has made it possible for us to share the best practices of

To cope with prospective market
growth, establish business model withcompetitive advantage in terms ofbusiness and technical development.

LIB materials
SiC epi-wafer for
power devices
Rare earths
Ceramics
Aluminum specialty
components

Actively take strategic measures.
Realize rapid expansion of businessby preempting market growth.

Advantageestablishing

Growthaccelerating

Rebuilding

Baseshaping

Increase profit and cash flow throughrebuilding of business environment,
profitability and business model.

12

The Showa Denko Group aims to expand individualized businesses,
and the graphite electrode business is an individualized business

High-purity gases
for electronics
Functional chemicals
Aluminum cans

We aim to develop the business into one that can post operating

the two companies for technologies and production processes, which

income of 10 billion yen even in a severe market downturn. To thiswill help us establish ourselves as the No. 1 supplier in the industry inend, we will work to become the very best supplier in the industry andterms of both quality and cost.

make our business a truly individualized business as early as possible.

As a result of the business integration, we have become theworld’s largest manufacturer of graphite electrodes, but if the costs of

HD Graphite electrodes
Petrochemicals
Industrial gases
ShoticTM
High-purity aluminum foil

Market and business have certain scale. Have
more power to resist market fluctuation, andmake stable profit and cash flow.

S HOWA DENKO R EP OR T 2 O18

13

About Showa Denko

Governance

CSR

Financial

Introduction of Businesses of the Group

Consolidated
sales ratio by segment

Consolidated
sales ratio by segment

17.8%

30.1%

Petrochemicals Segment(Billions of yen)
Increase/decreaseratio(%)

2017

2016

Increase/decrease

Sales

251.1

185.8

65.3

35.2

Operatingincome

33.4

20.7

12.7

61.2

Petrochemicals Segment

We contribute to effective
use of resources and highcost competitiveness by notrelying solely on naphtha(raw material diversication)
to produce ethylene, which is
widely used to produce various
petrochemicals.

Allyl alcohol is used as a material
for surfactants used for diverse
applications as well as for the
manufacture of eyeglass lenses
and aroma essences.

14

Allyl alcohol

S HOWA DENKO R EP ORT 2 O18

n-Propyl acetate (NPAC)QUALEAR™ is a new kind ofpolypropylene manufactured
and sold by SunAllomer Ltd. This
product, which is well balanced
in terms of transparency,
resistance to shocks, and rigidity,
meets the needs of customers
in the food packaging andautomobile fields in particular.

(Billions of yen)
Increase/decreaseratio(%)

2017

2016

Increase/decrease

Sales

148.8

134.5

14.2

10.6

Operatingincome

16.5

13.8

2.7

19.2

Chemicals Segment

The Petrochemicals Division consists of the Olefins Department and the Organic Chemicals Department.
The Oita Complex is the main manufacturing bases of the Division and is equipped with a naphtha cracker. As its feature, theComplex has a well-balanced demand structure. The basic materials manufactured by Showa Denko within the Complex are supplied
to the plastics, synthetic rubber, and styrene monomer plants that are operated by other companies within the premises as well as tothe plant of acetyl derivatives operated by Showa Denko itself. The Division is efficiently integrating new and old cracker equipment anddiversifying materials ahead of competitors to enhance its competitiveness.
The Olefins Department provides basic petrochemical products, while the Organic Chemicals Department is expanding its businessby using Showa Denko’s advanced catalyst technologies for acetyl derivatives.

Ethylene

Chemicals Segment

N-propyl acetate (NPAC) is usedin solvents for special gravure
printing ink. Because NPAC isfriendly to the environment, it
is increasingly used in the foodpackaging industry.

The Industrial Gases Division supplies oxygen, nitrogen, argon, and other gases separated from air as well as compressed hydrogen,carbonic acid, dry ice, and other industrial gases to a range of industries.
The Basic Chemicals Division consists of the Industrial Chemicals Department and the Organic Industrial Chemicals Department.
The Industrial Chemicals Department supplies ammonia, caustic soda, hydrochloric acid, and other industrial chemicals. The Organic
Industrial Chemicals Department supplies acrylonitrile, amino acid, and chelate agent as well as elastomer products, such as
chloroprene rubber and chlorinated polyethylene. ECOANN™ ammonia, which is made from used plastics, is a product that contributes
to the creation of a recycling-oriented society and is mainly used as a denitration agent at thermal power plants.
The Electronic Chemicals Division provides semiconductor manufacturers in Japan and overseas with high-purity gases, chemicals,and equipment for use in the LCP, LED, and solar cell manufacturing processes.
The Functional Chemicals Division consists of the Functional Polymers Department and the Specialty Chemicals Department.
The Functional Polymers Department provides various types of plastics and molding compounds made by using the plastics.
The Specialty Chemicals Department offers innovative and unique products, such as raw materials for cosmetics, resins for use aselectronic materials, and columns for high performance liquid chromatography (HPLC).

Electronic specialty gases

QUALEAR™
ECOANN™ is ammonia
produced from recycled plastics.
While the quality is on par withthat of conventional ammonia,
the environmental impact
caused by the manufacture ofthis product is much smaller.

Electronic specialty gases areused in production processes
for electronic components suchas semiconductors, LCD panels,
LEDs, and solar cells. Showa
Denko manufactures dozensof these high-purity gases
including ammonia, chlorine, andfluorinecontaining gases.

Ammonia

Unsaturated polyester resin

Showa Denko Gas Products
Co., Ltd. contributes to securingsafety and stable supply of foodresources by supplying carbon
dioxide mainly for carbonatedbeverages and dry ice for cooling.

Rigolac™, unsaturated polyester
resin that meets requirements
for a lightweight material
with high durability and highcorrosion resistance, is used fora wide range of applications
including automotive
components, home appliances,and ocean development.

Carbon dioxide and dry ice

S HOWA DENKO R EP OR T 2 O18

15

About Showa Denko

Governance

CSR

Financial

Introduction of Businesses of the Group

Consolidated
sales ratio by segment

Consolidated
sales ratio by segment

17.8%

30.1%

Petrochemicals Segment(Billions of yen)
Increase/decreaseratio(%)

2017

2016

Increase/decrease

Sales

251.1

185.8

65.3

35.2

Operatingincome

33.4

20.7

12.7

61.2

Petrochemicals Segment

We contribute to effective
use of resources and highcost competitiveness by notrelying solely on naphtha(raw material diversication)
to produce ethylene, which is
widely used to produce various
petrochemicals.

Allyl alcohol is used as a material
for surfactants used for diverse
applications as well as for the
manufacture of eyeglass lenses
and aroma essences.

14

Allyl alcohol

S HOWA DENKO R EP ORT 2 O18

n-Propyl acetate (NPAC)QUALEAR™ is a new kind ofpolypropylene manufactured
and sold by SunAllomer Ltd. This
product, which is well balanced
in terms of transparency,
resistance to shocks, and rigidity,
meets the needs of customers
in the food packaging andautomobile fields in particular.

(Billions of yen)
Increase/decreaseratio(%)

2017

2016

Increase/decrease

Sales

148.8

134.5

14.2

10.6

Operatingincome

16.5

13.8

2.7

19.2

Chemicals Segment

The Petrochemicals Division consists of the Olefins Department and the Organic Chemicals Department.
The Oita Complex is the main manufacturing bases of the Division and is equipped with a naphtha cracker. As its feature, theComplex has a well-balanced demand structure. The basic materials manufactured by Showa Denko within the Complex are supplied
to the plastics, synthetic rubber, and styrene monomer plants that are operated by other companies within the premises as well as tothe plant of acetyl derivatives operated by Showa Denko itself. The Division is efficiently integrating new and old cracker equipment anddiversifying materials ahead of competitors to enhance its competitiveness.
The Olefins Department provides basic petrochemical products, while the Organic Chemicals Department is expanding its businessby using Showa Denko’s advanced catalyst technologies for acetyl derivatives.

Ethylene

Chemicals Segment

N-propyl acetate (NPAC) is usedin solvents for special gravure
printing ink. Because NPAC isfriendly to the environment, it
is increasingly used in the foodpackaging industry.

The Industrial Gases Division supplies oxygen, nitrogen, argon, and other gases separated from air as well as compressed hydrogen,carbonic acid, dry ice, and other industrial gases to a range of industries.
The Basic Chemicals Division consists of the Industrial Chemicals Department and the Organic Industrial Chemicals Department.
The Industrial Chemicals Department supplies ammonia, caustic soda, hydrochloric acid, and other industrial chemicals. The Organic
Industrial Chemicals Department supplies acrylonitrile, amino acid, and chelate agent as well as elastomer products, such as
chloroprene rubber and chlorinated polyethylene. ECOANN™ ammonia, which is made from used plastics, is a product that contributes
to the creation of a recycling-oriented society and is mainly used as a denitration agent at thermal power plants.
The Electronic Chemicals Division provides semiconductor manufacturers in Japan and overseas with high-purity gases, chemicals,and equipment for use in the LCP, LED, and solar cell manufacturing processes.
The Functional Chemicals Division consists of the Functional Polymers Department and the Specialty Chemicals Department.
The Functional Polymers Department provides various types of plastics and molding compounds made by using the plastics.
The Specialty Chemicals Department offers innovative and unique products, such as raw materials for cosmetics, resins for use aselectronic materials, and columns for high performance liquid chromatography (HPLC).

Electronic specialty gases

QUALEAR™
ECOANN™ is ammonia
produced from recycled plastics.
While the quality is on par withthat of conventional ammonia,
the environmental impact
caused by the manufacture ofthis product is much smaller.

Electronic specialty gases areused in production processes
for electronic components suchas semiconductors, LCD panels,
LEDs, and solar cells. Showa
Denko manufactures dozensof these high-purity gases
including ammonia, chlorine, andfluorinecontaining gases.

Ammonia

Unsaturated polyester resin

Showa Denko Gas Products
Co., Ltd. contributes to securingsafety and stable supply of foodresources by supplying carbon
dioxide mainly for carbonatedbeverages and dry ice for cooling.

Rigolac™, unsaturated polyester
resin that meets requirements
for a lightweight material
with high durability and highcorrosion resistance, is used fora wide range of applications
including automotive
components, home appliances,and ocean development.

Carbon dioxide and dry ice

S HOWA DENKO R EP OR T 2 O18

15

About Showa Denko

Governance

CSR

Financial

Introduction of Businesses of the Group

Consolidated
sales ratio by segment

Consolidated
sales ratio by segment

14.7%

Electronics Segment
2017

8.8%

(Billions of yen)

2016

Increase/decrease

Increase/decreaseratio(%)

Sales

123.1

120.5

2.6

2.2

Operatingincome

21.9

15.0

6.9

46.0

In 2017, we transferred the lithium-ion battery materials business from the“Others” segment to the “Electronics” segment. Accordingly, the business is
included in the “Electronics” segment in the financial results for 2016.

(Billions of yen)
Increase/decreaseratio(%)

2017

2016

Increase/decrease

Sales

73.4

50.9

22.6

44.4

Operatingincome

7.1

△5.8

12.8

ー

Electronics Segment

Inorganics Segment

The HD Division conducts business from seven bases around the world, including three in Japan. It provides world-class high-quality
products for use in computers, DVD recorders, and other consumer electronic products as well as for use in the enterprise field, where
demand is expected to grow due to the spread of cloud computing.
The Electronics Materials Division supplies compound semiconductor materials and rare earth magnet alloys. With regard tocompound semiconductor materials, the Division has a wide lineup of high-output LEDs for industrial applications, including use indisplays and sensors. The Division also produces high-quality rare earth magnet alloys to be used in small motors for electronic devices
and in high-performance motors for hybrid cars and electric vehicles.
The Advanced Battery Materials Division is promoting production and sales of various materials for lithium-ion batteries, the demand
for which has been expanding recently.

Capitalizing on its long-accumulated high-temperature fusion technology, high-temperature sintering technology, and thepulverization/classification technology, the Ceramics Division manufactures and sells polishing materials, abrasives, and refractories inwhich fused alumina, silicon carbide, and boron nitride are used. As for ultrafine titanium oxide, which is used to manufacture multilayer
ceramic capacitors (MLCCs) to be mounted on a range of electronic devices, the Division is expanding sales for use in high-end products.
The Carbon Division supplies graphite electrodes for electric steelmaking furnaces. These electrodes are indispensable for therecycling of iron and steel. Showa Denko’s graphite electrodes are highly acclaimed by customers around the world. The Division
integrated the graphite electrode business of German company SGL GE in 2017 to become the world’s No.1 manufacturer in the field.
The Division will enhance the development and marketing of volume zone products for the remarkably growing markets of emerging
countries while providing advanced markets with high-end products.

As the world’s largest hard disk
manufacturer and seller, theShowa Denko Group is utilizing
the leading-edge technologies
to expand the storage capacityof its hard disks, while building
the optimal production andsupply system to help the Group
meet the requests of customers
in a smooth manner.

HD

The demand for rare earthmagnet alloy is growing in fields
such as drive motors for hybridcars and energy efficient homeelectric appliances. We are also
strengthening the developmentof next-generation magnet
alloys with decreased expensive
heavy rare earth content.

16

Inorganics Segment

Rare earths

S HOWA DENKO R EP ORT 2 O18

LED

For the lithium-ion battery
market, we offer a variety ofitems, including SCMG™ highinput/output long-life anodematerial, VGCF™ unique anodeand cathode additive featuringhigh stability and quality, andSPALF™ aluminum laminated film
produced and marketed.

In addition to a broad lineup of
infrared LED chips used as lightsources for optical sensors forvarious applications, we alsooffer high-output red LED chips
optimized specifically for plant
growth.

Lithium-ion battery materials

Graphite electrodesWith a hardness coming second
only to diamond, CBN is used
for tools to cut automotive andother components.

Graphite electrodes contributeto iron and steel recycling as acomponent to melt iron andsteel scraps in electric steel
furnaces. Our graphite electrodes
are rated very highly bycustomers throughout the world
due to their excellent quality.

CBN (cubic boron nitride)

Electrofused refractories

SUPER-TITANIA™ high-purity
titanium oxide is used as one of
the main materials in ceramic
capacitors installed in familiar
electronic and electrical devices.

We develop and manufacture
a variety of electrofusedrefractories, applying
sophisticated fusion
technology and pulverization/
granulation technology gained
from the manufacture ofabrasive materials.

Ceramics for capacitors

S HOWA DENKO R EP OR T 2 O18

17

About Showa Denko

Governance

CSR

Financial

Introduction of Businesses of the Group

Consolidated
sales ratio by segment

Consolidated
sales ratio by segment

14.7%

Electronics Segment
2017

8.8%

(Billions of yen)

2016

Increase/decrease

Increase/decreaseratio(%)

Sales

123.1

120.5

2.6

2.2

Operatingincome

21.9

15.0

6.9

46.0

In 2017, we transferred the lithium-ion battery materials business from the“Others” segment to the “Electronics” segment. Accordingly, the business is
included in the “Electronics” segment in the financial results for 2016.

(Billions of yen)
Increase/decreaseratio(%)

2017

2016

Increase/decrease

Sales

73.4

50.9

22.6

44.4

Operatingincome

7.1

△5.8

12.8

ー

Electronics Segment

Inorganics Segment

The HD Division conducts business from seven bases around the world, including three in Japan. It provides world-class high-quality
products for use in computers, DVD recorders, and other consumer electronic products as well as for use in the enterprise field, where
demand is expected to grow due to the spread of cloud computing.
The Electronics Materials Division supplies compound semiconductor materials and rare earth magnet alloys. With regard tocompound semiconductor materials, the Division has a wide lineup of high-output LEDs for industrial applications, including use indisplays and sensors. The Division also produces high-quality rare earth magnet alloys to be used in small motors for electronic devices
and in high-performance motors for hybrid cars and electric vehicles.
The Advanced Battery Materials Division is promoting production and sales of various materials for lithium-ion batteries, the demand
for which has been expanding recently.

Capitalizing on its long-accumulated high-temperature fusion technology, high-temperature sintering technology, and thepulverization/classification technology, the Ceramics Division manufactures and sells polishing materials, abrasives, and refractories inwhich fused alumina, silicon carbide, and boron nitride are used. As for ultrafine titanium oxide, which is used to manufacture multilayer
ceramic capacitors (MLCCs) to be mounted on a range of electronic devices, the Division is expanding sales for use in high-end products.
The Carbon Division supplies graphite electrodes for electric steelmaking furnaces. These electrodes are indispensable for therecycling of iron and steel. Showa Denko’s graphite electrodes are highly acclaimed by customers around the world. The Division
integrated the graphite electrode business of German company SGL GE in 2017 to become the world’s No.1 manufacturer in the field.
The Division will enhance the development and marketing of volume zone products for the remarkably growing markets of emerging
countries while providing advanced markets with high-end products.

As the world’s largest hard disk
manufacturer and seller, theShowa Denko Group is utilizing
the leading-edge technologies
to expand the storage capacityof its hard disks, while building
the optimal production andsupply system to help the Group
meet the requests of customers
in a smooth manner.

HD

The demand for rare earthmagnet alloy is growing in fields
such as drive motors for hybridcars and energy efficient homeelectric appliances. We are also
strengthening the developmentof next-generation magnet
alloys with decreased expensive
heavy rare earth content.

16

Inorganics Segment

Rare earths

S HOWA DENKO R EP ORT 2 O18

LED

For the lithium-ion battery
market, we offer a variety ofitems, including SCMG™ highinput/output long-life anodematerial, VGCF™ unique anodeand cathode additive featuringhigh stability and quality, andSPALF™ aluminum laminated film
produced and marketed.

In addition to a broad lineup of
infrared LED chips used as lightsources for optical sensors forvarious applications, we alsooffer high-output red LED chips
optimized specifically for plant
growth.

Lithium-ion battery materials

Graphite electrodesWith a hardness coming second
only to diamond, CBN is used
for tools to cut automotive andother components.

Graphite electrodes contributeto iron and steel recycling as acomponent to melt iron andsteel scraps in electric steel
furnaces. Our graphite electrodes
are rated very highly bycustomers throughout the world
due to their excellent quality.

CBN (cubic boron nitride)

Electrofused refractories

SUPER-TITANIA™ high-purity
titanium oxide is used as one of
the main materials in ceramic
capacitors installed in familiar
electronic and electrical devices.

We develop and manufacture
a variety of electrofusedrefractories, applying
sophisticated fusion
technology and pulverization/
granulation technology gained
from the manufacture ofabrasive materials.

Ceramics for capacitors

S HOWA DENKO R EP OR T 2 O18

17

About Showa Denko

Governance

CSR

Financial

Introduction of Businesses of the Group

Consolidated
sales ratio by segment

Consolidated
sales ratio by segment

12.6%

16.0%

Etcetera Segment
Aluminum Segment
2017

2016

Increase/decrease

Sales

105.4

98.6

6.9

7.0

Operatingincome

6.7

4.4

2.3

51.6

2016

Sales

133.6

128.7

4.9

3.8

Operatingincome

0.6

0.6

0

1.6

＊2017年よりリチウムイオン電池材料事業を「その他セグメン
ト」から「エレクトロニクスセグメント」に移管いたしました。
2016年実績は新セグメントに組み替えて表示しております。

Aluminum Segment

Development Themes and Related Businesses

The Aluminum Rolled Products Division provides high-purity aluminum foils, which are carefully purified and manufactured for use inelectrolytic capacitors. These capacitors are widely used in a range of products, including home electric appliances and automobilerelated devices.
The Aluminum Specialty Components Division provides aluminum materials and processed products. The Division supplies the following
products not only in Japan but also in Europe, the United States, and Southeast Asia: aluminum cylinders (core component of laser beam
printers), large/complexly shaped extruded products, continuously cast rods of aluminum alloys (SHOTIC™) made using Showa Denko’s
proprietary technologies, and forged products for automobile parts including compressors for in-vehicle air conditioners.
The Division also supplies a range of heat exchangers for home electric appliances and industrial equipment worldwide and isengaged in the development and manufacture of power semiconductor cooling devices used in hybrid cars, electric vehicles, and solar
power generation equipment.
The Showa Denko Group became the first enterprise to manufacture aluminum beverage cans in Japan in 1971. Since then the
Aluminum Can Division has been supplying high-quality aluminum cans for beverages through integrated production, including thepressing of can bodies and can ends and the printing of their labels.
High-purity aluminum foil isa key material in electronic
components essential to
IT devices, home electric
appliances, and automobiles.
High-purity aluminum foil
for electrolytic capacitors is
produced through precise
control of purity andmanufacturing processes.

High-purity aluminum foil

We are producing SHOTIC™
continuously cast rods ofaluminum alloy and theirforgings. The fine alloy structure
contributes to reducing theweight of automobiles and the
products are used as parts forcompressors of in-vehicle air
conditioners, etc.

18

SHOTIC™

S HOWA DENKO R EP ORT 2 O18

Increase/decreaseratio(%)

2017(Billions of yen)
Increase/decreaseratio(%)(Billions of yen)
Increase/decrease

Cooling devices

We provide oil coolers, heatsinks and other heat exchangers
for industrial equipment, as wellas cooling devices for hybrid car
power control units.

Included in this section are themes for future businesses as well as the manufacture and sale of various chemical products, light metals,
and building and civil engineering materials.

SiC epitaxial wafers

The wafers are used as materials
for next generation power
semiconductors, which are
expected to contribute to energy
conservation. The wafers are being
increasingly used in power devices
for EV chargers, photovoltaic
generation, and servers.

Plant factory

Showa Denko’s LED-based plantfactory system controls red and blue
LEDs separately for the productionof high value-added vegetables
with high productivity.

Obsidian perlite produced by Fuyo PerliteCo., Ltd. is a natural material made ofburned obsidian, used as lightweightaggregate (specific gravity: 0.1) to construct
a comfortable living environment. Obsidian
perlite is widely used also for environmental
purposes, including use in soil improvers
for rooftop greening and gardening andin microbial culture solutions, as well as
being used for the treatment of urine inmountainous areas.

Obsidian perlite“Showa Sound Insulating FDP,”
produced and sold by Showa
Denko Kenzai K.K., is a high-valueadded drain riser adopted bynumerous condominiums, hotels
and hospitals, featuring superiorsound insulation, compact size, fire
resistance and ease of construction.

Sound-insulating
reproof dual-layer pipe

Major Subsidiaries in Japan
Showa Aluminum Can
Corporation was the first to
manufacture aluminum cansin Japan. Its lightweight andrecyclable aluminum cans are
sold both in Japan and abroad.

Aluminum Cans■■

Petrochemicals segment
Sun Allomer Ltd.
Tsurusaki Kyodo Doryoku K.K.
Chemicals segment
Showa Denko Gas Products Co., Ltd.
Nippon Polytech Corp.

■■

Electronics segment
Showa Denko HD Yamagata K.K.
Showa Denko Packaging Co.,Ltd.
Inorganics segment
Showa Denko Ceramics Co., Ltd.
Showa Fine Ceramics Co., Ltd.
Showa Denko Kenso Co., Ltd.

■■

Aluminum segment
Showa Aluminum Can Corp.

Others segment
Shoko Co., Ltd.
Showa Denko Kenzai K.K.
Major Subsidiaries as of March 31,2018

S HOWA DENKO R EP OR T 2 O18

19

About Showa Denko

Governance

CSR

Financial

Introduction of Businesses of the Group

Consolidated
sales ratio by segment

Consolidated
sales ratio by segment

12.6%

16.0%

Etcetera Segment
Aluminum Segment
2017

2016

Increase/decrease

Sales

105.4

98.6

6.9

7.0

Operatingincome

6.7

4.4

2.3

51.6

2016

Sales

133.6

128.7

4.9

3.8

Operatingincome

0.6

0.6

0

1.6

＊2017年よりリチウムイオン電池材料事業を「その他セグメン
ト」から「エレクトロニクスセグメント」に移管いたしました。
2016年実績は新セグメントに組み替えて表示しております。

Aluminum Segment

Development Themes and Related Businesses

The Aluminum Rolled Products Division provides high-purity aluminum foils, which are carefully purified and manufactured for use inelectrolytic capacitors. These capacitors are widely used in a range of products, including home electric appliances and automobilerelated devices.
The Aluminum Specialty Components Division provides aluminum materials and processed products. The Division supplies the following
products not only in Japan but also in Europe, the United States, and Southeast Asia: aluminum cylinders (core component of laser beam
printers), large/complexly shaped extruded products, continuously cast rods of aluminum alloys (SHOTIC™) made using Showa Denko’s
proprietary technologies, and forged products for automobile parts including compressors for in-vehicle air conditioners.
The Division also supplies a range of heat exchangers for home electric appliances and industrial equipment worldwide and isengaged in the development and manufacture of power semiconductor cooling devices used in hybrid cars, electric vehicles, and solar
power generation equipment.
The Showa Denko Group became the first enterprise to manufacture aluminum beverage cans in Japan in 1971. Since then the
Aluminum Can Division has been supplying high-quality aluminum cans for beverages through integrated production, including thepressing of can bodies and can ends and the printing of their labels.
High-purity aluminum foil isa key material in electronic
components essential to
IT devices, home electric
appliances, and automobiles.
High-purity aluminum foil
for electrolytic capacitors is
produced through precise
control of purity andmanufacturing processes.

High-purity aluminum foil

We are producing SHOTIC™
continuously cast rods ofaluminum alloy and theirforgings. The fine alloy structure
contributes to reducing theweight of automobiles and the
products are used as parts forcompressors of in-vehicle air
conditioners, etc.

18

SHOTIC™

S HOWA DENKO R EP ORT 2 O18

Increase/decreaseratio(%)

2017(Billions of yen)
Increase/decreaseratio(%)(Billions of yen)
Increase/decrease

Cooling devices

We provide oil coolers, heatsinks and other heat exchangers
for industrial equipment, as wellas cooling devices for hybrid car
power control units.

Included in this section are themes for future businesses as well as the manufacture and sale of various chemical products, light metals,
and building and civil engineering materials.

SiC epitaxial wafers

The wafers are used as materials
for next generation power
semiconductors, which are
expected to contribute to energy
conservation. The wafers are being
increasingly used in power devices
for EV chargers, photovoltaic
generation, and servers.

Plant factory

Showa Denko’s LED-based plantfactory system controls red and blue
LEDs separately for the productionof high value-added vegetables
with high productivity.

Obsidian perlite produced by Fuyo PerliteCo., Ltd. is a natural material made ofburned obsidian, used as lightweightaggregate (specific gravity: 0.1) to construct
a comfortable living environment. Obsidian
perlite is widely used also for environmental
purposes, including use in soil improvers
for rooftop greening and gardening andin microbial culture solutions, as well as
being used for the treatment of urine inmountainous areas.

Obsidian perlite“Showa Sound Insulating FDP,”
produced and sold by Showa
Denko Kenzai K.K., is a high-valueadded drain riser adopted bynumerous condominiums, hotels
and hospitals, featuring superiorsound insulation, compact size, fire
resistance and ease of construction.

Sound-insulating
reproof dual-layer pipe

Major Subsidiaries in Japan
Showa Aluminum Can
Corporation was the first to
manufacture aluminum cansin Japan. Its lightweight andrecyclable aluminum cans are
sold both in Japan and abroad.

Aluminum Cans■■

Petrochemicals segment
Sun Allomer Ltd.
Tsurusaki Kyodo Doryoku K.K.
Chemicals segment
Showa Denko Gas Products Co., Ltd.
Nippon Polytech Corp.

■■

Electronics segment
Showa Denko HD Yamagata K.K.
Showa Denko Packaging Co.,Ltd.
Inorganics segment
Showa Denko Ceramics Co., Ltd.
Showa Fine Ceramics Co., Ltd.
Showa Denko Kenso Co., Ltd.

■■

Aluminum segment
Showa Aluminum Can Corp.

Others segment
Shoko Co., Ltd.
Showa Denko Kenzai K.K.
Major Subsidiaries as of March 31,2018

S HOWA DENKO R EP OR T 2 O18

19

About Showa Denko

Governance

CSR

Financialwhenever I visit company bases located in Japan and abroad, I always taketime to talk with local employees.
Moreover, we have assigned female employees to a range of
workplaces, including manufacturing and other on-site work facilities. We
are striving to improve our workplaces for employees by measures suchas introducing a flexible work system and providing facilities where they
can rest and refresh themselves. Also, for the employment of people withdisabilities, we are working on the provision of workplaces where all kindsof people can make meaningful contributions.
Akiyama: Work style reforms have recently been attracting a lot of
attention. It is important for employees to work efficiently in order toKohei Morikawa

Ms. One Akiyama

President and CEO
Showa Denko K.K.

Presidet
Integrex Inc.

global goals to be met by 2030. What Showa Denko aims to achieve

have their own time and achieve job satisfaction.

is certainly in line with the SDGs. As a company in the manufacturing

Morikawa: Increasing productivity naturally helps reduce overtime

industry, Showa Denko will of course fulfill its responsibility for “Goalwork. At each base of Showa Denko, efforts have been made since

12: Responsible Production and Consumption.” Moreover, we are2009 to reduce employees’ working hours based on the company-wide

working to develop and supply products and services that help solve

targets set from a medium- to long-term view and in cooperation withsocial issues, such as climate change, depletion of resources, andthe company’s labor union. The targets are: (1) Reduce the number ofdemographic changes.

employees whose annual overtime work hours exceed 720 hours tozero; (2) Reduce the total actual working hours of each employee to less

The Showa Denko Group’s initiatives for theenvironment and society

Dialogue between the CEO and Outside Expert

Toward the Sustainable Development ofSociety and the Improvement ofCorporate Value

Akiyama: For example, for the environment, what measures is the

Challenges to be met to increase corporate value while contributing to the sustainable development of society

fossil fuels. In addition, CO2 generated in the recycling process can be

President Kohei Morikawa of Showa Denko talked with Integrex Inc.’s President One Akiyama,

used to make carbonate gas and dry ice. More than anything, we cana close follower of ESG investor trends. The two met at the company’s head office in June 2018.

contribute to the better treatment of used plastics discharged fromcompany implementing?
Morikawa: We are chemically recycling used plastics. The recyclingof used plastics into hydrogen contributes to the stable supply ofhydrogen as a material for ammonia and also helps reduce the use ofhouseholds.
Graphite electrodes used in electric furnaces to melt iron scraps also

Trends in ESG investment and sustainability ofcompanies

contribute to the recycling of iron. By recycling iron scraps into iron, welong been taking measures for the creation of a sustainable society,and Showa Denko too has been conducting Responsible Care (RC)
activities on a company-wide basis since 1995 as voluntary activities

20

Akiyama: The Principles for Responsible Investment (PRI) launchedto give due consideration to the environment, safety, and humanwith the support of the United Nations in 2006 has moved investors tohealth throughout the life cycle of chemical substances, including at

evaluate companies from ESG viewpoints. The PRI is an initiative thatthe development stage through to the disposal and recycling stages.

calls for declarations of a commitment to incorporate ESG viewpoints

Akiyama: In the past, companies conducted environmental activities

in investment decision-making. Lots of institutional investors aremainly to minimize the environmental impact of their own businesssignatories to the Principles and the total amount of assets managed by

activities. Since several years ago, however, more attention has beenthese signatories is said to reach 80 trillion dollars. According to the PRI,

paid to environmental contributions made by companies through theirenvironmental, social, and governance (ESG) issues are common to all

products and services.

companies and have a substantial influence on their sustainable growth.

Morikawa: In accordance with changes in society, what is expected

Morikawa: The chemical industry produces things that do notof companies has also been changing. The international community

exist in nature and it should therefore take a proportionately heavy

now expects companies to contribute to the achievement of theshare of responsibility. Based on this recognition, the industry has

Sustainable Development Goals (SDGs), which are a collection of 17

S HOWA DENKO R EP ORT 2 O18

can reduce the use of energy by 75% compared with making new ironfrom iron ores.
Akiyama: If employees are aware of the fact that they canthan 2,000 hours per year; and (3) Keep the upper limit set in the socalled “Article 36 Agreement” made in line with Article 36 of the JapaneseLabor Standards Act to 60 hours. I expect that all our bases, including
manufacturing facilities where construction and repair work might
require that employees work longer hours, will achieve these targets.
Akiyama: The Showa Denko Group is unique in that it is engaged
in a range of business segments, including organics, inorganics, andaluminum. I think an advantage of your company is that in-house
experts in the respective fields can make “chemical reactions” to create
something new.
Morikawa: As a matter of fact, we are promoting exchange acrossbusiness segments, in particular among those engaged in R&D. Nobel
Prize laureate Reona “Leo” Esaki said that an ideal research organization
was one that existed in a state of “organized chaos,” meaning individual
researchers are conducting research as they see fit, but they are
all going in the same direction as an organization. I do think it iscontribute to the future of the Earth, society, and humankind bysuch development and manufacturing activities, it will increase theirmotivation for work.
Morikawa: We are committed to giving satisfaction to all our stakeholders,and employees represent a major stakeholder for the company. I believethat the management team should provide employees with comfortableworkplaces as its responsibility. The Showa Denko Group regularly
conducts a survey on employees’ work satisfaction and implements
firm-wide measures to solve any problems identified through the survey.
I also take the view that it is one of my missions as a top executive of thecompany to communicate my ideas directly to employees. Accordingly,

S HOWA DENKO R EP OR T 2 O18

21

About Showa Denko

Governance

CSR

Financialwhenever I visit company bases located in Japan and abroad, I always taketime to talk with local employees.
Moreover, we have assigned female employees to a range of
workplaces, including manufacturing and other on-site work facilities. We
are striving to improve our workplaces for employees by measures suchas introducing a flexible work system and providing facilities where they
can rest and refresh themselves. Also, for the employment of people withdisabilities, we are working on the provision of workplaces where all kindsof people can make meaningful contributions.
Akiyama: Work style reforms have recently been attracting a lot of
attention. It is important for employees to work efficiently in order toKohei Morikawa

Ms. One Akiyama

President and CEO
Showa Denko K.K.

Presidet
Integrex Inc.

global goals to be met by 2030. What Showa Denko aims to achieve

have their own time and achieve job satisfaction.

is certainly in line with the SDGs. As a company in the manufacturing

Morikawa: Increasing productivity naturally helps reduce overtime

industry, Showa Denko will of course fulfill its responsibility for “Goalwork. At each base of Showa Denko, efforts have been made since

12: Responsible Production and Consumption.” Moreover, we are2009 to reduce employees’ working hours based on the company-wide

working to develop and supply products and services that help solve

targets set from a medium- to long-term view and in cooperation withsocial issues, such as climate change, depletion of resources, andthe company’s labor union. The targets are: (1) Reduce the number ofdemographic changes.

employees whose annual overtime work hours exceed 720 hours tozero; (2) Reduce the total actual working hours of each employee to less

The Showa Denko Group’s initiatives for theenvironment and society

Dialogue between the CEO and Outside Expert

Toward the Sustainable Development ofSociety and the Improvement ofCorporate Value

Akiyama: For example, for the environment, what measures is the

Challenges to be met to increase corporate value while contributing to the sustainable development of society

fossil fuels. In addition, CO2 generated in the recycling process can be

President Kohei Morikawa of Showa Denko talked with Integrex Inc.’s President One Akiyama,

used to make carbonate gas and dry ice. More than anything, we cana close follower of ESG investor trends. The two met at the company’s head office in June 2018.

contribute to the better treatment of used plastics discharged fromcompany implementing?
Morikawa: We are chemically recycling used plastics. The recyclingof used plastics into hydrogen contributes to the stable supply ofhydrogen as a material for ammonia and also helps reduce the use ofhouseholds.
Graphite electrodes used in electric furnaces to melt iron scraps also

Trends in ESG investment and sustainability ofcompanies

contribute to the recycling of iron. By recycling iron scraps into iron, welong been taking measures for the creation of a sustainable society,and Showa Denko too has been conducting Responsible Care (RC)
activities on a company-wide basis since 1995 as voluntary activities

20

Akiyama: The Principles for Responsible Investment (PRI) launchedto give due consideration to the environment, safety, and humanwith the support of the United Nations in 2006 has moved investors tohealth throughout the life cycle of chemical substances, including at

evaluate companies from ESG viewpoints. The PRI is an initiative thatthe development stage through to the disposal and recycling stages.

calls for declarations of a commitment to incorporate ESG viewpoints

Akiyama: In the past, companies conducted environmental activities

in investment decision-making. Lots of institutional investors aremainly to minimize the environmental impact of their own businesssignatories to the Principles and the total amount of assets managed by

activities. Since several years ago, however, more attention has beenthese signatories is said to reach 80 trillion dollars. According to the PRI,

paid to environmental contributions made by companies through theirenvironmental, social, and governance (ESG) issues are common to all

products and services.

companies and have a substantial influence on their sustainable growth.

Morikawa: In accordance with changes in society, what is expected

Morikawa: The chemical industry produces things that do notof companies has also been changing. The international community

exist in nature and it should therefore take a proportionately heavy

now expects companies to contribute to the achievement of theshare of responsibility. Based on this recognition, the industry has

Sustainable Development Goals (SDGs), which are a collection of 17

S HOWA DENKO R EP ORT 2 O18

can reduce the use of energy by 75% compared with making new ironfrom iron ores.
Akiyama: If employees are aware of the fact that they canthan 2,000 hours per year; and (3) Keep the upper limit set in the socalled “Article 36 Agreement” made in line with Article 36 of the JapaneseLabor Standards Act to 60 hours. I expect that all our bases, including
manufacturing facilities where construction and repair work might
require that employees work longer hours, will achieve these targets.
Akiyama: The Showa Denko Group is unique in that it is engaged
in a range of business segments, including organics, inorganics, andaluminum. I think an advantage of your company is that in-house
experts in the respective fields can make “chemical reactions” to create
something new.
Morikawa: As a matter of fact, we are promoting exchange acrossbusiness segments, in particular among those engaged in R&D. Nobel
Prize laureate Reona “Leo” Esaki said that an ideal research organization
was one that existed in a state of “organized chaos,” meaning individual
researchers are conducting research as they see fit, but they are
all going in the same direction as an organization. I do think it iscontribute to the future of the Earth, society, and humankind bysuch development and manufacturing activities, it will increase theirmotivation for work.
Morikawa: We are committed to giving satisfaction to all our stakeholders,and employees represent a major stakeholder for the company. I believethat the management team should provide employees with comfortableworkplaces as its responsibility. The Showa Denko Group regularly
conducts a survey on employees’ work satisfaction and implements
firm-wide measures to solve any problems identified through the survey.
I also take the view that it is one of my missions as a top executive of thecompany to communicate my ideas directly to employees. Accordingly,

S HOWA DENKO R EP OR T 2 O18

21

About Showa Denko

Governance

CSR

Financial

R&D of the Showa Denko Group
important for researchers to have a shared philosophy and shared waysof thinking regarding their research.

Values shared by employees ofa manufacturing company

Aiming to enhance corporate value while
delivering extra value to society
Akiyama: You are thus steadily implementing measures.

Message from CTO

Morikawa: As a result, Showa Denko was included in all three ESG
indices selected by the Government Pension Investment Fund (GPIF),

Akiyama: I hear that the Showa Denko Group is proactively
conducting business also outside Japan and non-Japanese employees
account for about 40% of its total employees. How are these
employees, who have diverse cultural and religious backgrounds,
sharing the same values as Group members?
Morikawa: We aim to manufacture the world’s highest-quality
products with the world’s highest efficiency, and I expect employees
to value compliance, occupational safety, and product quality as thebasis for the Group as a manufacturer. Specifically, I would like toaccomplish the following across all Group companies, both within
and outside Japan: (1) make employees alert to safety and complianceissues; (2) provide workplaces where employees can openly come out
and say, “We have a problem” or “It is unsafe”; and (3) create a corporate
culture that encourages employees to make quick responses andimprovements when someone points out a problem at the workplace.
And to ensure corporate governance, it is becoming increasingly
important to make all Group employees aware of the direction that theGroup is heading.
Akiyama: ESG investors are also showing strong interest in themeasures taken by companies across their supply chains.
Morikawa: We are promoting CSR-oriented procurement among
companies from which we procure materials. We set procurement
guidelines and ask the suppliers to comply with them. We also ask
them to conduct self-checks and visit them to understand theirpresent situations and help them make improvements as necessary.
Since 2010, we have visited a total of 378 suppliers to have dialogue
with them on compliance, BCP, and other issues. By promoting CSR
measures across the supply chain, I believe that we can enhance ourability to help solve social issues.

the world’s largest investor, in July 2017.
Moreover, Showa Denko was named one of the White 500—

Create new value by forging, polishing,and linking diverse individualized technologies

companies that are demonstrating excellent health and productivity
management—for two years in a row and was also granted Platinum
Kurumin certification. I believe we were given these honors inrecognition of our past efforts.
Akiyama: GPIF is managing assets for the future of Japanese citizens

Managing Corporate
Officers & CTO

and is fostering sustainable investments by choosing companies
that focus on ESG measures in the investment target. What is mostJun Tanaka

important for companies is to appropriately understand how ESG
issues are related to their own businesses, incorporate the findingsin their medium- to long-term growth strategies, and show theirscenarios for the future to investors. For the Showa Denko Group, thegraphite electrode business could provide a model case. I think that
the Group can earn a higher rating from ESG investors by fostering
measures to continue contributing to the reduction of CO2 emissions
throughout society as a whole based on its business strengths.
Morikawa: I think that each and every employee can help thecompany become a first-class company by making themselves firstclass employees and generating first-class synergies. We call first-classbusinesses “individualized businesses,” that is, businesses that meet
the three conditions of: (1) operating income of 10% or higher; (2)operating income of at least several billion yen; and (3) being highly
competitive and not easily influenced by changes in the businessenvironment. Individualized businesses are our driving force to achieve
further growth.
We will hone our individualized businesses, create products andservices that can contribute to the creation of a sustainable society,and make progress toward the sustainable growth of our company andenhancement of its corporate value.

In January 2016, the Showa Denko Group started its new mediumterm consolidated business plan “Project 2020+.” Under thisnew business plan, the Group will strengthen revenue bases of
its diverse businesses and expand its individualized businesses,
aiming to contribute to the solution of social issues in global scaleby providing high-value-added products and services to fivemarket domains, namely, “Infrastructure,” “Energy,” “Mobility,” “Living
environment,” and “Electronics.”
In recent years, customers’ requests to materials and parts arediversified so much that it is necessary for us to reconcile diverse
technologies with products in order to secure our competitiveness.
We think we can take advantage of this diversity in customers’ needs
by making the most of our wide-ranging chemical technologies
that covers inorganic, aluminum and organic chemicals, and ourdiverse human resources that support these technologies.
Therefore, we made it our basic policy on R&D to “Create newvalue by forging, polishing, and linking diverse individualized
technologies.” Under this basic policy, we will deepen and fuse our“diverse business domains,” our “core technologies” that consistof elemental technologies with competitive advantage, andour “strategic technologies” that consist of the world-top-leveltechnologies we cultivated over many years. Thus we will promote
R&D in a way of our own.
■

At the beginning of 2016, in order to conduct this individualized
R&D, we established the Institute for Integrated ProductDevelopment, which we organized by adding research facilities of
six locations, centering on aluminum and inorganics technologies,
to the former Institute for Polymers and Chemicals. On the initiativeof this new R&D organization, we will enhance cooperation among
Divisions and Plants, develop our retained materials into multimaterial components, and quickly respond to our customers’ needs
in a creative way. The Institute for Advanced and Core Technology
will deepen our strategic technologies consisting of “carbon, thinfilm, and catalyst technologies,” and focus on development of
next-generation businesses. On the other hand, in order to realize
and maximize the fruits of R&D as early as possible while making
our original businesses and technologies as the pivot of our R&D
activities, we will positively utilize open innovation and M&A, andstrengthen cooperation with our partners.
The Showa Denko Group will make its R&D progress vigorously
at world level by providing customers with original solutions,deepening and fusing its individualized technologies which are
expected to become sprouts of next-generation growth businesses.

Create new value by forging, polishing, and linking diverse individualized technologies
Organics, Inorganics, AluminumMaterial
designDiversebusinessdomains

Infrastructure, Living environment,
Mobility, Energy, Electronics

Diverse needs:
Weight-saving, Heat management,
High integration, High durability

Synthesis
andReactionCore
technologies

Processing
Analysis
supportElemental technologies
withcompetitive advantage

22

S HOWA DENKO R EP ORT 2 O18

Deepening and fusion of retainedmaterials/technologies⇒ Develop multi-material
components
Power module,
Resin composite materials

Strategic
technologies(carbon/Thin-film/
Catalyst)

World-top-level technologies
we cultivated over many years

S HOWA DENKO R EP OR T 2 O18

23

About Showa Denko

Governance

CSR

Financial

R&D of the Showa Denko Group
important for researchers to have a shared philosophy and shared waysof thinking regarding their research.

Values shared by employees ofa manufacturing company

Aiming to enhance corporate value while
delivering extra value to society
Akiyama: You are thus steadily implementing measures.

Message from CTO

Morikawa: As a result, Showa Denko was included in all three ESG
indices selected by the Government Pension Investment Fund (GPIF),

Akiyama: I hear that the Showa Denko Group is proactively
conducting business also outside Japan and non-Japanese employees
account for about 40% of its total employees. How are these
employees, who have diverse cultural and religious backgrounds,
sharing the same values as Group members?
Morikawa: We aim to manufacture the world’s highest-quality
products with the world’s highest efficiency, and I expect employees
to value compliance, occupational safety, and product quality as thebasis for the Group as a manufacturer. Specifically, I would like toaccomplish the following across all Group companies, both within
and outside Japan: (1) make employees alert to safety and complianceissues; (2) provide workplaces where employees can openly come out
and say, “We have a problem” or “It is unsafe”; and (3) create a corporate
culture that encourages employees to make quick responses andimprovements when someone points out a problem at the workplace.
And to ensure corporate governance, it is becoming increasingly
important to make all Group employees aware of the direction that theGroup is heading.
Akiyama: ESG investors are also showing strong interest in themeasures taken by companies across their supply chains.
Morikawa: We are promoting CSR-oriented procurement among
companies from which we procure materials. We set procurement
guidelines and ask the suppliers to comply with them. We also ask
them to conduct self-checks and visit them to understand theirpresent situations and help them make improvements as necessary.
Since 2010, we have visited a total of 378 suppliers to have dialogue
with them on compliance, BCP, and other issues. By promoting CSR
measures across the supply chain, I believe that we can enhance ourability to help solve social issues.

the world’s largest investor, in July 2017.
Moreover, Showa Denko was named one of the White 500—

Create new value by forging, polishing,and linking diverse individualized technologies

companies that are demonstrating excellent health and productivity
management—for two years in a row and was also granted Platinum
Kurumin certification. I believe we were given these honors inrecognition of our past efforts.
Akiyama: GPIF is managing assets for the future of Japanese citizens

Managing Corporate
Officers & CTO

and is fostering sustainable investments by choosing companies
that focus on ESG measures in the investment target. What is mostJun Tanaka

important for companies is to appropriately understand how ESG
issues are related to their own businesses, incorporate the findingsin their medium- to long-term growth strategies, and show theirscenarios for the future to investors. For the Showa Denko Group, thegraphite electrode business could provide a model case. I think that
the Group can earn a higher rating from ESG investors by fostering
measures to continue contributing to the reduction of CO2 emissions
throughout society as a whole based on its business strengths.
Morikawa: I think that each and every employee can help thecompany become a first-class company by making themselves firstclass employees and generating first-class synergies. We call first-classbusinesses “individualized businesses,” that is, businesses that meet
the three conditions of: (1) operating income of 10% or higher; (2)operating income of at least several billion yen; and (3) being highly
competitive and not easily influenced by changes in the businessenvironment. Individualized businesses are our driving force to achieve
further growth.
We will hone our individualized businesses, create products andservices that can contribute to the creation of a sustainable society,and make progress toward the sustainable growth of our company andenhancement of its corporate value.

In January 2016, the Showa Denko Group started its new mediumterm consolidated business plan “Project 2020+.” Under thisnew business plan, the Group will strengthen revenue bases of
its diverse businesses and expand its individualized businesses,
aiming to contribute to the solution of social issues in global scaleby providing high-value-added products and services to fivemarket domains, namely, “Infrastructure,” “Energy,” “Mobility,” “Living
environment,” and “Electronics.”
In recent years, customers’ requests to materials and parts arediversified so much that it is necessary for us to reconcile diverse
technologies with products in order to secure our competitiveness.
We think we can take advantage of this diversity in customers’ needs
by making the most of our wide-ranging chemical technologies
that covers inorganic, aluminum and organic chemicals, and ourdiverse human resources that support these technologies.
Therefore, we made it our basic policy on R&D to “Create newvalue by forging, polishing, and linking diverse individualized
technologies.” Under this basic policy, we will deepen and fuse our“diverse business domains,” our “core technologies” that consistof elemental technologies with competitive advantage, andour “strategic technologies” that consist of the world-top-leveltechnologies we cultivated over many years. Thus we will promote
R&D in a way of our own.
■

At the beginning of 2016, in order to conduct this individualized
R&D, we established the Institute for Integrated ProductDevelopment, which we organized by adding research facilities of
six locations, centering on aluminum and inorganics technologies,
to the former Institute for Polymers and Chemicals. On the initiativeof this new R&D organization, we will enhance cooperation among
Divisions and Plants, develop our retained materials into multimaterial components, and quickly respond to our customers’ needs
in a creative way. The Institute for Advanced and Core Technology
will deepen our strategic technologies consisting of “carbon, thinfilm, and catalyst technologies,” and focus on development of
next-generation businesses. On the other hand, in order to realize
and maximize the fruits of R&D as early as possible while making
our original businesses and technologies as the pivot of our R&D
activities, we will positively utilize open innovation and M&A, andstrengthen cooperation with our partners.
The Showa Denko Group will make its R&D progress vigorously
at world level by providing customers with original solutions,deepening and fusing its individualized technologies which are
expected to become sprouts of next-generation growth businesses.

Create new value by forging, polishing, and linking diverse individualized technologies
Organics, Inorganics, AluminumMaterial
designDiversebusinessdomains

Infrastructure, Living environment,
Mobility, Energy, Electronics

Diverse needs:
Weight-saving, Heat management,
High integration, High durability

Synthesis
andReactionCore
technologies

Processing
Analysis
supportElemental technologies
withcompetitive advantage

22

S HOWA DENKO R EP ORT 2 O18

Deepening and fusion of retainedmaterials/technologies⇒ Develop multi-material
components
Power module,
Resin composite materials

Strategic
technologies(carbon/Thin-film/
Catalyst)

World-top-level technologies
we cultivated over many years

S HOWA DENKO R EP OR T 2 O18

23

About Showa Denko

Governance

CSR

Financial

R&D of the Showa Denko Group

Plan for R&D

Technological Lineage

the Japanese Ministry of Land,
Infrastructure, Transport and

The Showa Denko Group launched the medium-term business plan

Tourism and are verifying the“Project 2020+” in 2016, and 2018 is the final year of the plan. The

performance of the materials

budget allocated to R&D investments for the three-year period totals

by using them on a trial basis

60 billion yen and targets the five market domains of “Infrastructure,”

for commercialization.

“Energy,” “Mobility,” “Living environment,” and “Electronics.” We aim
to create individualized businesses in these market domains andalso speed up the development of high value-added products andSynthetic resin
emulsions
Ultra-brightLEDs

Trial use of the materials for the repair of
the wet wall of a water conduit (Asahi
Dam, Higashinagahara Plant)

2. Peripheral growth fields/
heat solutions

services, thereby making social contribution on a global scale.

In accordance with the electrification as well as downsizing andBased on the basic R&D policy, “Create new value by forging,weight reduction of industrial equipment and automobiles, high-polishing, and linking diverse individualized technologies,” weperformance materials that provide heat solutions are increasingly

reorganized the R&D sector in January 2016 in order to specify theneeded. The Showa Denko Group supplies SiC epitaxial wafers

target image of the Group in 2025. We are implementing specificfor power semiconductors, heat-resistant sealing resin, inorganic

measures with greater speed to get results as early as possible.

fillers, aluminum composite materials, and other components that

Based on the various materials manufactured by the Showa Denko

have excellent heat resistance and heat dissipation properties. Our

Group, including organic, inorganic, and aluminum materials, as

customers have begun evaluating these products. We will develop

well as on the advanced technologies to process these materials

high-end aluminum, plastic, and ceramic materials and components

and long-accumulated strategic technologies, we will foster R&D on

to meet the need of heat solutions for high-output and small-sizedcross-departmental themes to meet a range of market needs andpower modules and other products. Moreover, we will also combine

provide customers with new value.

Vitaminderivatives

Shodex®
NormalpropylacetateHydrophilicpolymers

Polyolefin

Allylic
esters

Product Development for the purpose of enhancing our corebusinesses and developing new businesses in peripheral fields. We

Functionalmonomers

Phenolresin
Unsaturated
polyester
resinsCatalysts

Olefins

Acrylonitrile

Ammonia

Organicsynthesis

Sealing resin withenhanced heat-resistanceour profits.

level strategic technologies based on a next-generation businessFertilizers
Carbondioxidehas a shape similar to that of a soccer ball, we explore its featuresand enhance the technology to develop fullerene derivatives andhigh-purity hydrogen for use in fuel cell vehicles. At present, we are

create thin fullerene films to expand its applications. Recently we

implementing a system demonstration test on the scale of 10 Nm3/hhave accelerated the use of the material for energy conservation

at the Kawasaki Plant.

purposes, including use in organic thin-film solar cells and in

Chemicalalumina
Aluminum
Alumina

High-pressuretechnology

Waterelectrolysis

Saltelectrolysis

Fused salt
electrolysis

Purchase or intermediate

Electrolysis

SCMG™
(Material for negativeelectrodes
in lithium ion cells)

mass production system

by customers. We have begun developing a product with thefor the stable supply ofgrade and durability suitable for use in EVs, which will be further

high-quality fullerene.

Hard disks

MagnetalloysSputtering
Abrasivesforsemiconductors

VGCFTM(Carbonnanotube)
Fullerene

Super
hard
materials

Technologies
for making
fine powder

Extremepressure
Rare
earth
metal

Graphiteelectrodelubricating oil. We are also working to build the world’s top-classdesigned resin features are highly acclaimed and adopted widelyin cold and humid settings, we have completed registration with

Meltingand castingAluminumhydroxide

Chlorine

For example, with fullerene, which is a carbon material thatdeveloping a practical technology to manufacture out of ammonia

For repairing materials that help complete repair work within a

Gallium

Hydrogenmodel that is not derived from existing businesses.

hydrogen stations, we succeeded, ahead of others in the world, inshorter time even under harsh conditions and are intended for use

Chloroprene

Sodiumhypochlorite

Caustic
soda

3. Strategic technologies/carbon materials
The Institute for Advanced and Core Technology is fostering the

popularized in the future.

Castingand forging
Rolling

Electrochemicalcreation of individualized businesses by deepening the world’s top-

As for aqueous binders for the anodes of LIBs, our in-house

Chlorinated
Polyethylene

Epitaxial
growthHeat generation analysis of a module

to develop high-value added products that will assuredly help boost

expected to be used as an energy carrier. For ammonia-based

Extrusion

Dry iceTechnology
Application example: Silicon
sheet for heat radiation
Heat-radiating panel: Hybrid material
Cooling device: Aluminum parts, Frames

repairing materials to be used in cold and humid conditions in orderAmmonia contains hydrogen at a high concentration and isTitanium
SHOTIC™

Petrochemical

We are carrying out demonstration tests for ammonia-basedhydrogen stations, aqueous binders for the anodes of LIBs, andSHORIK™

High-purity aluminum
foil(for capacitors)

Product

is working to deepen the Showa Denko Group’s strategic

1. Enhancement of the core businesses/expansion ofindividualized businesses

Aluminumcans

Gases formedical
use

Amino
acid

Insulating sheet:
Inorganic filler

will also show how the Institute for Advanced and Core Technology
technologies.

SiC
epitaxial
wafersHighpolymer

Enhanced heatradiation

Power element:
SiC epi-wafer

Chemicalvapor
deposition

BMC
Aceticacids

the materials and components to provide multi-material components.

Enhanced heat
resistanceElectronicmaterial gases

Pharmaceuticals
and agriculturalintermediates

Titaniumoxide

Aluminum
cylindersHeatexchangers

In the following we introduce some of the R&D projects
implemented under the leadership of the Institute for Integrated

Large
extrudedaluminumproducts

Refractorymaterials

ThermalConductive
fillers

AbrasivegrainsNitrolime
Product
Technology

CarbideFerroalloys

Graphite

Ceramics

Purchase or intermediate

Electrical Furnaces
Electrochemical

the New Technology Information System (NETIS) implemented by

24

S HOWA DENKO R EP ORT 2 O18

S HOWA DENKO R EP OR T 2 O18

25

About Showa Denko

Governance

CSR

Financial

R&D of the Showa Denko Group

Plan for R&D

Technological Lineage

the Japanese Ministry of Land,
Infrastructure, Transport and

The Showa Denko Group launched the medium-term business plan

Tourism and are verifying the“Project 2020+” in 2016, and 2018 is the final year of the plan. The

performance of the materials

budget allocated to R&D investments for the three-year period totals

by using them on a trial basis

60 billion yen and targets the five market domains of “Infrastructure,”

for commercialization.

“Energy,” “Mobility,” “Living environment,” and “Electronics.” We aim
to create individualized businesses in these market domains andalso speed up the development of high value-added products andSynthetic resin
emulsions
Ultra-brightLEDs

Trial use of the materials for the repair of
the wet wall of a water conduit (Asahi
Dam, Higashinagahara Plant)

2. Peripheral growth fields/
heat solutions

services, thereby making social contribution on a global scale.

In accordance with the electrification as well as downsizing andBased on the basic R&D policy, “Create new value by forging,weight reduction of industrial equipment and automobiles, high-polishing, and linking diverse individualized technologies,” weperformance materials that provide heat solutions are increasingly

reorganized the R&D sector in January 2016 in order to specify theneeded. The Showa Denko Group supplies SiC epitaxial wafers

target image of the Group in 2025. We are implementing specificfor power semiconductors, heat-resistant sealing resin, inorganic

measures with greater speed to get results as early as possible.

fillers, aluminum composite materials, and other components that

Based on the various materials manufactured by the Showa Denko

have excellent heat resistance and heat dissipation properties. Our

Group, including organic, inorganic, and aluminum materials, as

customers have begun evaluating these products. We will develop

well as on the advanced technologies to process these materials

high-end aluminum, plastic, and ceramic materials and components

and long-accumulated strategic technologies, we will foster R&D on

to meet the need of heat solutions for high-output and small-sizedcross-departmental themes to meet a range of market needs andpower modules and other products. Moreover, we will also combine

provide customers with new value.

Vitaminderivatives

Shodex®
NormalpropylacetateHydrophilicpolymers

Polyolefin

Allylic
esters

Product Development for the purpose of enhancing our corebusinesses and developing new businesses in peripheral fields. We

Functionalmonomers

Phenolresin
Unsaturated
polyester
resinsCatalysts

Olefins

Acrylonitrile

Ammonia

Organicsynthesis

Sealing resin withenhanced heat-resistanceour profits.

level strategic technologies based on a next-generation businessFertilizers
Carbondioxidehas a shape similar to that of a soccer ball, we explore its featuresand enhance the technology to develop fullerene derivatives andhigh-purity hydrogen for use in fuel cell vehicles. At present, we are

create thin fullerene films to expand its applications. Recently we

implementing a system demonstration test on the scale of 10 Nm3/hhave accelerated the use of the material for energy conservation

at the Kawasaki Plant.

purposes, including use in organic thin-film solar cells and in

Chemicalalumina
Aluminum
Alumina

High-pressuretechnology

Waterelectrolysis

Saltelectrolysis

Fused salt
electrolysis

Purchase or intermediate

Electrolysis

SCMG™
(Material for negativeelectrodes
in lithium ion cells)

mass production system

by customers. We have begun developing a product with thefor the stable supply ofgrade and durability suitable for use in EVs, which will be further

high-quality fullerene.

Hard disks

MagnetalloysSputtering
Abrasivesforsemiconductors

VGCFTM(Carbonnanotube)
Fullerene

Super
hard
materials

Technologies
for making
fine powder

Extremepressure
Rare
earth
metal

Graphiteelectrodelubricating oil. We are also working to build the world’s top-classdesigned resin features are highly acclaimed and adopted widelyin cold and humid settings, we have completed registration with

Meltingand castingAluminumhydroxide

Chlorine

For example, with fullerene, which is a carbon material thatdeveloping a practical technology to manufacture out of ammonia

For repairing materials that help complete repair work within a

Gallium

Hydrogenmodel that is not derived from existing businesses.

hydrogen stations, we succeeded, ahead of others in the world, inshorter time even under harsh conditions and are intended for use

Chloroprene

Sodiumhypochlorite

Caustic
soda

3. Strategic technologies/carbon materials
The Institute for Advanced and Core Technology is fostering the

popularized in the future.

Castingand forging
Rolling

Electrochemicalcreation of individualized businesses by deepening the world’s top-

As for aqueous binders for the anodes of LIBs, our in-house

Chlorinated
Polyethylene

Epitaxial
growthHeat generation analysis of a module

to develop high-value added products that will assuredly help boost

expected to be used as an energy carrier. For ammonia-based

Extrusion

Dry iceTechnology
Application example: Silicon
sheet for heat radiation
Heat-radiating panel: Hybrid material
Cooling device: Aluminum parts, Frames

repairing materials to be used in cold and humid conditions in orderAmmonia contains hydrogen at a high concentration and isTitanium
SHOTIC™

Petrochemical

We are carrying out demonstration tests for ammonia-basedhydrogen stations, aqueous binders for the anodes of LIBs, andSHORIK™

High-purity aluminum
foil(for capacitors)

Product

is working to deepen the Showa Denko Group’s strategic

1. Enhancement of the core businesses/expansion ofindividualized businesses

Aluminumcans

Gases formedical
use

Amino
acid

Insulating sheet:
Inorganic filler

will also show how the Institute for Advanced and Core Technology
technologies.

SiC
epitaxial
wafersHighpolymer

Enhanced heatradiation

Power element:
SiC epi-wafer

Chemicalvapor
deposition

BMC
Aceticacids

the materials and components to provide multi-material components.

Enhanced heat
resistanceElectronicmaterial gases

Pharmaceuticals
and agriculturalintermediates

Titaniumoxide

Aluminum
cylindersHeatexchangers

In the following we introduce some of the R&D projects
implemented under the leadership of the Institute for Integrated

Large
extrudedaluminumproducts

Refractorymaterials

ThermalConductive
fillers

AbrasivegrainsNitrolime
Product
Technology

CarbideFerroalloys

Graphite

Ceramics

Purchase or intermediate

Electrical Furnaces
Electrochemical

the New Technology Information System (NETIS) implemented by

24

S HOWA DENKO R EP ORT 2 O18

S HOWA DENKO R EP OR T 2 O18

25

About Showa Denko

Governance

CSR

Financial

R&D of the Showa Denko GroupR&D activities for the creation of
corporate value

The Showa Denko Group conducts R&D and develops businesses by taking advantage of a range of technologies andproducts that it has developed for organics, inorganics, and aluminum.
In this section we introduce the achievements made by the Group for SiC epitaxial wafers for

Example: SiC epitaxial wafers for power semiconductors

power semiconductors as an example of how the Group is heading toward the creation of corporate value.

Contributing to the sustainable development of society through the use of
our products in final products
What is a power semiconductor?

expected to replace Si as the wafer material.
Compared with mainstream Si semiconductor devices, SiC power

Usage of SiC power semiconductor devices

Roles played by the Showa Denko Group for SiC power semiconductors

Power semiconductors are used in inverters to convert direct current

semiconductor devices are excellent in terms of operability under high-

SiC power semiconductor

SiC power semiconductor devices are made using SiC epitaxial

to alternating current and in converters to convert alternating current

current, high-voltage, and high-temperature conditions, while energy loss

devices contribute to thewafers, which are substrates on which thin SiC films are overlaid

to direct current. Power semiconductors are widely used in the large

is reduced by 50% or more and the device size (volume) can be reduced

efficient use of power,using a process called “epitaxial growth.” Epitaxial wafers tend to haveequipment of power generation plants as well as in small devices, suchto about one-fourth. The devices are therefore useful in downsizing andwhich in turn fosters

defects, so films with low defect density are needed for theas home electric appliances, for the easy and stable supply of electricity.

reducing the weight of power control modules while increasing theirenergy conservation andmanufacture of power semiconductor devices. The Showa Denko

With the public becoming more interested in energy conservation

Group boasts the world’s leading technology for epitaxial growth.

efficiency, and have already been adopted for use in power sources forthe creation of a low-

and power saving, demand for power semiconductors, which help

data center servers, power conditioners for solar power generation, EV

carbon society.

minimize the loss of power, has further expanded recently.

chargers, and in subway and other railroad vehicles.

Presently, most power semiconductor devices are made by using
silicon (Si) wafers as substrates, but silicon carbide (SiC) is widely

The Showa Denko Group conducts the following activities for the business.

R&D

CSR procurement

Manufacture

The Group aims to contribute to the solution of social issues and create new value

Showa Denko conducts business activities

in the five domains of “Infrastructure,” “Energy,” “Mobility,” “Living environment,” andin consideration of society and the“Electronics.” To this end, we are conducting unique R&D activities by deepening

environment throughout its supply chain,and fusing our highly advantageous core technologies and our long-accumulated

from procurement of materials through tostrategic technologies across a range of business segments in which we operate.

manufacture and sale.

Showa Denko manufactures its
products in an environment-friendly
manner, specifically by reducing
environmental impacts, minimizing
waste, and saving resources andenergy.

Sales ,
Feedback

Expanding the applications of power semiconductor devices

Responding to an increase in demand

Two types of semiconductor devices are used in power modules that can be operated under high-voltage and high-current conditions: theWe have devised better manufacturing processes, independently adjusted
the equipment, and enhanced our skills for using the equipment so as tomass-produce high-quality HGE wafers in a stable manner. In order to meetthe robust demand for the HGE wafers, we plan to enhance the production
capacity to 7,000 wafers per month by September 2018 and to 9,000 wafers
per month by February 2019. In
addition to an increase in demandfor conventional applications, SiC
power semiconductor devices
are increasingly needed for use
in onboard EV chargers and in
the equipment of quick charging
stations in the rapidly expanding
EV market.

Schottky barrier diode (SBD) device used to make the flow of electricity go one way and the metal-oxide-semiconductor field-effect transistor(MOSFET) device to control the flow of electricity. In the past, SiC epitaxial wafers were used to make SBD devices, which are structured ina relatively simple way. Power modules can work most effectively when both SBD and MOSFET devices are used in them. It was difficult tomanufacture SiC epitaxial wafers for MOSFET devices, but Showa Denko overcame the problem andreleased its “High-Grade Epi (HGE)” wafers, which could be used to make MOSFET devices, in October 2015.
The HGE is rated at the industry’s highest level in terms of low defect density on the surface andinside of the epitaxial film, control of the concentration of impurities to be mixed to control the flow ofelectricity, and the uniformity of the film thickness.
In 2017, we acquired technological assets related to SiC materials for power semiconductors fromthe Nippon Steel & Sumitomo Metal Corporation Group. We will also make use of these assets to further
enhance our strength in the business and continue meeting the market needs.

26

Contribution to energy conservation

S HOWA DENKO R EP ORT 2 O18

Silicon carbide (SiC) is superior to silicon(Si) in terms of its low electric resistanceand usability under high-voltage andhigh-temperature conditions. SiC power
semiconductor devices were therefore
said to represent a next-generation,
epoch-making energy-saving device.
However, the market was not easily
launched, not only due to cost-related
Manager, Power
problems but also because high-quality Semiconductor Project
SiC epitaxial wafers needed to makeTakayuki Satothe semiconductor devices were
unavailable. Showa Denko eventually
succeeded in developing the large and high-quality HGE wafers,
which were rated at the industry’s highest level in terms of quality.
These days, the applications of SiC power semiconductor devices
are rapidly expanding, including use in railroad vehicles, photovoltaic
devices, and EV chargers. The market size is expected to grow to
150 billion yen in 2023. Showa Denko had been engaged in the SiC
epitaxial wafer business since 2005, and this wafer project, which had
been a project implemented within the R&D organization, was placed
under the direct control of the president in 2017.
By further expanding the sales of the business under the project, thebusiness is expected to become an individualized business, that is, onethat has a high operating income margin, a certain level of operating
income, and tolerance to changes in the market environment.
We will continue to contribute to energy conservation bymeeting the market needs for higher quality while responding to
expanding demand in the business.

S HOWA DENKO R EP OR T 2 O18

27

About Showa Denko

Governance

CSR

Financial

R&D of the Showa Denko GroupR&D activities for the creation of
corporate value

The Showa Denko Group conducts R&D and develops businesses by taking advantage of a range of technologies andproducts that it has developed for organics, inorganics, and aluminum.
In this section we introduce the achievements made by the Group for SiC epitaxial wafers for

Example: SiC epitaxial wafers for power semiconductors

power semiconductors as an example of how the Group is heading toward the creation of corporate value.

Contributing to the sustainable development of society through the use of
our products in final products
What is a power semiconductor?

expected to replace Si as the wafer material.
Compared with mainstream Si semiconductor devices, SiC power

Usage of SiC power semiconductor devices

Roles played by the Showa Denko Group for SiC power semiconductors

Power semiconductors are used in inverters to convert direct current

semiconductor devices are excellent in terms of operability under high-

SiC power semiconductor

SiC power semiconductor devices are made using SiC epitaxial

to alternating current and in converters to convert alternating current

current, high-voltage, and high-temperature conditions, while energy loss

devices contribute to thewafers, which are substrates on which thin SiC films are overlaid

to direct current. Power semiconductors are widely used in the large

is reduced by 50% or more and the device size (volume) can be reduced

efficient use of power,using a process called “epitaxial growth.” Epitaxial wafers tend to haveequipment of power generation plants as well as in small devices, suchto about one-fourth. The devices are therefore useful in downsizing andwhich in turn fosters

defects, so films with low defect density are needed for theas home electric appliances, for the easy and stable supply of electricity.

reducing the weight of power control modules while increasing theirenergy conservation andmanufacture of power semiconductor devices. The Showa Denko

With the public becoming more interested in energy conservation

Group boasts the world’s leading technology for epitaxial growth.

efficiency, and have already been adopted for use in power sources forthe creation of a low-

and power saving, demand for power semiconductors, which help

data center servers, power conditioners for solar power generation, EV

carbon society.

minimize the loss of power, has further expanded recently.

chargers, and in subway and other railroad vehicles.

Presently, most power semiconductor devices are made by using
silicon (Si) wafers as substrates, but silicon carbide (SiC) is widely

The Showa Denko Group conducts the following activities for the business.

R&D

CSR procurement

Manufacture

The Group aims to contribute to the solution of social issues and create new value

Showa Denko conducts business activities

in the five domains of “Infrastructure,” “Energy,” “Mobility,” “Living environment,” andin consideration of society and the“Electronics.” To this end, we are conducting unique R&D activities by deepening

environment throughout its supply chain,and fusing our highly advantageous core technologies and our long-accumulated

from procurement of materials through tostrategic technologies across a range of business segments in which we operate.

manufacture and sale.

Showa Denko manufactures its
products in an environment-friendly
manner, specifically by reducing
environmental impacts, minimizing
waste, and saving resources andenergy.

Sales ,
Feedback

Expanding the applications of power semiconductor devices

Responding to an increase in demand

Two types of semiconductor devices are used in power modules that can be operated under high-voltage and high-current conditions: theWe have devised better manufacturing processes, independently adjusted
the equipment, and enhanced our skills for using the equipment so as tomass-produce high-quality HGE wafers in a stable manner. In order to meetthe robust demand for the HGE wafers, we plan to enhance the production
capacity to 7,000 wafers per month by September 2018 and to 9,000 wafers
per month by February 2019. In
addition to an increase in demandfor conventional applications, SiC
power semiconductor devices
are increasingly needed for use
in onboard EV chargers and in
the equipment of quick charging
stations in the rapidly expanding
EV market.

Schottky barrier diode (SBD) device used to make the flow of electricity go one way and the metal-oxide-semiconductor field-effect transistor(MOSFET) device to control the flow of electricity. In the past, SiC epitaxial wafers were used to make SBD devices, which are structured ina relatively simple way. Power modules can work most effectively when both SBD and MOSFET devices are used in them. It was difficult tomanufacture SiC epitaxial wafers for MOSFET devices, but Showa Denko overcame the problem andreleased its “High-Grade Epi (HGE)” wafers, which could be used to make MOSFET devices, in October 2015.
The HGE is rated at the industry’s highest level in terms of low defect density on the surface andinside of the epitaxial film, control of the concentration of impurities to be mixed to control the flow ofelectricity, and the uniformity of the film thickness.
In 2017, we acquired technological assets related to SiC materials for power semiconductors fromthe Nippon Steel & Sumitomo Metal Corporation Group. We will also make use of these assets to further
enhance our strength in the business and continue meeting the market needs.

26

Contribution to energy conservation

S HOWA DENKO R EP ORT 2 O18

Silicon carbide (SiC) is superior to silicon(Si) in terms of its low electric resistanceand usability under high-voltage andhigh-temperature conditions. SiC power
semiconductor devices were therefore
said to represent a next-generation,
epoch-making energy-saving device.
However, the market was not easily
launched, not only due to cost-related
Manager, Power
problems but also because high-quality Semiconductor Project
SiC epitaxial wafers needed to makeTakayuki Satothe semiconductor devices were
unavailable. Showa Denko eventually
succeeded in developing the large and high-quality HGE wafers,
which were rated at the industry’s highest level in terms of quality.
These days, the applications of SiC power semiconductor devices
are rapidly expanding, including use in railroad vehicles, photovoltaic
devices, and EV chargers. The market size is expected to grow to
150 billion yen in 2023. Showa Denko had been engaged in the SiC
epitaxial wafer business since 2005, and this wafer project, which had
been a project implemented within the R&D organization, was placed
under the direct control of the president in 2017.
By further expanding the sales of the business under the project, thebusiness is expected to become an individualized business, that is, onethat has a high operating income margin, a certain level of operating
income, and tolerance to changes in the market environment.
We will continue to contribute to energy conservation bymeeting the market needs for higher quality while responding to
expanding demand in the business.

S HOWA DENKO R EP OR T 2 O18

27

About Showa Denko

Governance

CSR

Financial

R&D of the Showa Denko GroupIn recognition of these measures, Showa Denko was included inProtection of intellectual property rights

Governance“The Clarivate Analytics 2017 Top 100 Global Innovators” as one of thecompanies and organizations leading global business. We haveShowa Denko regards the intellectual property strategy as one of its

received this honor for three years in a row.

crucial management strategies and is building and implementing it
along with the business strategy and R&D strategy as a trinity. We are
eternally committed to establishing a strong and wide-ranging patent
network for our major businesses and the development of important
products to ensure our competitiveness.

In Our Code of Conduct and Its Practical Guide, we uphold “Respect
for other parties’ intellectual property rights” as one of our rules. To
this end, we built a patent monitoring system to keep track of trends
in the intellectual property rights of others, including patents held
outside Japan. Moreover, we are proactively working to protect ourtrade secrets and copyrights.

Businessstrategy(Divisions)

Recommendations andanalysis
information

Plans and sales
information
Patent-related
proposals

R&D
strategy(R&D
departments)

Inventions andsurvey information

The business strategy, R&D
strategy, and intellectual
property strategy are
indivisibly linked with eachother, making it necessary
for the divisions and R&D
departments to haveinteractive and close
relationships.

Intellectual
property
strategy(Intellectual
property
departments)

In-house awarding system to commend
employee inventions

Acquisition of intellectual property rights andestablishment of patent networks

When applying for and registering a patent as well as when using or

As the majority of Showa Denko's businesses are operated globally,

licensing a patent, we pay compensation to the individual inventor in

we aggressively apply for patents in foreign countries with the aim ofline with the predefined rules. In order to promote the filing of more

supporting those businesses from the intellectual property side.

valuable patent applications, we commend our top three employees

The chart shown below is a composition of data shown in "Japanin terms of number of patent applications filed in the previous year

Patent Office Annual Report 2016" and SDK's own data on the number

and also the top three employees in terms of the number of patents

of applications for patents. It illustrates that the Showa Denko's global

registered in the previous year. In 2016 we established the Patent Hall

application ratios were about 10% higher than those by all applicants.

of Fame, and two employees, whose patent filings and inventions eachtotaled 300 or more, entered the Patent Hall of Fame.

We also make every effort to secure our superiority based on
intellectual property rights, especially in the principal businesses andnewly developed important products by establishing patent networks.
▶ Trend of patent application ratio in Japan and abroad■ Number of application in Japan (Showa Denko) ● Global application ratio (Showa Denko)■ Number of global application (Showa Denko) ● Global application ratio (all applicants) *(%)(Number of application)

1,200

60

1,000

50

800

40

600

30

400

20

200

10

0

0

2012

2013

2014

2015

2016 (FY)

Ceremony held to commend the internal inventors ranked in the top three (2017)* According to our research

28

S HOWA DENKO R EP ORT 2 O18

S HOWA DENKO R EP OR T 2 O18

29

About Showa Denko

Governance

CSR

Financial

R&D of the Showa Denko GroupIn recognition of these measures, Showa Denko was included inProtection of intellectual property rights

Governance“The Clarivate Analytics 2017 Top 100 Global Innovators” as one of thecompanies and organizations leading global business. We haveShowa Denko regards the intellectual property strategy as one of its

received this honor for three years in a row.

crucial management strategies and is building and implementing it
along with the business strategy and R&D strategy as a trinity. We are
eternally committed to establishing a strong and wide-ranging patent
network for our major businesses and the development of important
products to ensure our competitiveness.

In Our Code of Conduct and Its Practical Guide, we uphold “Respect
for other parties’ intellectual property rights” as one of our rules. To
this end, we built a patent monitoring system to keep track of trends
in the intellectual property rights of others, including patents held
outside Japan. Moreover, we are proactively working to protect ourtrade secrets and copyrights.

Businessstrategy(Divisions)

Recommendations andanalysis
information

Plans and sales
information
Patent-related
proposals

R&D
strategy(R&D
departments)

Inventions andsurvey information

The business strategy, R&D
strategy, and intellectual
property strategy are
indivisibly linked with eachother, making it necessary
for the divisions and R&D
departments to haveinteractive and close
relationships.

Intellectual
property
strategy(Intellectual
property
departments)

In-house awarding system to commend
employee inventions

Acquisition of intellectual property rights andestablishment of patent networks

When applying for and registering a patent as well as when using or

As the majority of Showa Denko's businesses are operated globally,

licensing a patent, we pay compensation to the individual inventor in

we aggressively apply for patents in foreign countries with the aim ofline with the predefined rules. In order to promote the filing of more

supporting those businesses from the intellectual property side.

valuable patent applications, we commend our top three employees

The chart shown below is a composition of data shown in "Japanin terms of number of patent applications filed in the previous year

Patent Office Annual Report 2016" and SDK's own data on the number

and also the top three employees in terms of the number of patents

of applications for patents. It illustrates that the Showa Denko's global

registered in the previous year. In 2016 we established the Patent Hall

application ratios were about 10% higher than those by all applicants.

of Fame, and two employees, whose patent filings and inventions eachtotaled 300 or more, entered the Patent Hall of Fame.

We also make every effort to secure our superiority based on
intellectual property rights, especially in the principal businesses andnewly developed important products by establishing patent networks.
▶ Trend of patent application ratio in Japan and abroad■ Number of application in Japan (Showa Denko) ● Global application ratio (Showa Denko)■ Number of global application (Showa Denko) ● Global application ratio (all applicants) *(%)(Number of application)

1,200

60

1,000

50

800

40

600

30

400

20

200

10

0

0

2012

2013

2014

2015

2016 (FY)

Ceremony held to commend the internal inventors ranked in the top three (2017)* According to our research

28

S HOWA DENKO R EP ORT 2 O18

S HOWA DENKO R EP OR T 2 O18

29

Governance

About Showa Denko

CSR

Financial

Corporate Governance
Basic policies

Implementation status ofcorporate governance measures

Showa Denko continuously promotes corporate governance

Board of Directors
Policies and procedures for the Boardof Directors in determining the
remuneration of senior management
personnel and Directors

to ensure the soundness, effectiveness, and transparencyof management, and to contribute enhancing its corporate
value, thereby contributing to the sound growth of society andearning its full trust and confidence.

Policies and procedures of the Boardof Directors in the selection of senior
management personnel and thenomination of candidates for Directors
and Audit & Supervisory Board Members

separate the business execution function from the management
supervision function. Under the system, a top management teamcomposed of the president and corporate officers makes prompt andShowa Denko has newly introduced performance-linked stock-

dynamic decisions on management. At the same time, the number

based remuneration, and the remuneration of Executive Directorsof Board of Directors members has been substantially reduced while

and Corporate Officers now consists of base remuneration, which

the number of independent outside directors has been kept at two or

Based on the above, the Company has clarified its mission in

Candidates for Directors must possess sufficient knowledge,

is decided according to job title and others, as well as short-term

more for the enhancement of the supervision function.

the form of Our Vision and Showa Denko is working hard to

experience and capabilities to fulfill their obligations as Directors.

performancelinked remuneration and mid- to long-term performance-

Senior management personnel are selected by additionally taking into

linked remuneration, which are determined in consideration

thoroughly discusses and makes decisions regarding matters specified

account, among others, their corporate and individual performance.

of corporate and individual performance and others under thein the Companies Act or the Company's Articles of Incorporation

performance evaluation system.

as well as important issues in executing business operations, while

To that end, it is essential for the Company to strengthen
relations with its stakeholders, including shareholders,customers, suppliers, community residents, and employees.

realize this Vision.

Candidates for the Audit & Supervisory Board Members must possess,

The Remuneration Advisory Committee as an advisory body to the

The Board of Directors decides basic policies of the Company. It also

promoting prompt and dynamic decision making on management.

Showa Denko formulated the Corporate Governance Basic Policies

in addition to an appropriate level of expertise in the areas of finance andin line with Japan’s Corporate Governance Code and discloses theaccounting, sufficient knowledge, experience and capabilities to fulfill

Board of Directors and a majority of its members are Independent

We appoint directors with emphasis on the viewpoint of corporate

their obligations as Audit & Supervisory Board Members.

Outside Directors and Outside Audit & Supervisory Board Members. It

governance, aiming to strengthen the Board of Directors'

policies at its website.

deliberates the remuneration of each Executive Director and Corporate

monitoring and supervisory functions and ensure the propriety ofof candidates for the afore-mentioned positions and submits

Officer and submits recommendations to the Board of Directors.

decision making process. We have adopted a management system inrecommendations to the Board of Directors. The Committee is an

Remuneration of Outside Directors consists of base remuneration only.

which corporate officers dedicate themselves to business execution,

The Nomination Advisory Committee deliberates the nomination▶ Corporate governance structure

Shareholder’s meeting

advisory body to the Board of Directors and more than half of its
members are independent outside directors.

Job
AuditsRapid, effective decision-making
and business
Nomination
Advisory Committee
Advisory · Report
Remuneration
Advisory Committee

Accounting
Accounting
Audit
Audit

Board ofDirectors

Audit &
SupervisoryBoardin principle.

Supervisory Board Members in 2017 is as given below.

Furthermore, we have abolished the system of officer directors

Audit & Supervisory
Board
Members

Accounting
Auditorlinks

Top Management
President
Corporate Officers in Charge

which is their primary duty, but do not concurrently serve as directors,

The amount of remuneration paid to Directors and Audit &Auditing

Execution of Duty

Explanation regarding the selection ofsenior management personnel and thenomination of candidates for Directors
and Audit & Supervisory Board Members
Reasons why each candidate has been nominated are stated in the

Total amount of
remuneration

Number of persons

Directors(except outside Directors)¥231 million

10

Audit & Supervisory Board Members(except outside Auditors)¥55 million

3

Outside Directors
and Outside Auditors¥68 million

6

Human Rights / Corporate Ethics
Promotion Council

Internal Audits

CSR Committee

Risk Management Promotion Council

IR Promotion Council

Safety Measures Committee

Management Committee
R&D Committee

S HOWA DENKO R EP ORT 2 O18

The term of office of directors is set to one year to ensure a quick
and flexible formation of management team corresponding tochanges in the business environment.

Board of Auditors

Criteria on the independence ofoutside directors
The Board of Directors has established independence standards for
Outside Directors based on independence criteria stipulated by law
standards. See the Attachment of Corporate Governance Basic Policies

Business
Divisionssupervision among directors.

Reference Materials for the General Meeting of Shareholders.

Overview of Governing Bodies/
Committees/Councils

for the independence standards.

Board ofDirectors

Staff Sections

Showa Denko employs an auditor system. The Auditors attend theBoard of Directors meetings and other important internal meetings,
offering opinions as necessary. They conduct audits on execution ofGoverning
Body

Members

and the Tokyo Stock Exchange and selects candidates who meet the

Security Export Control Committee

except the Chairman and the President, while strengthening
monitoring by Auditors including outside Auditors and mutualInternal Audit Department

Responsible Care Promotion Council

30

Showa Denko introduced the corporate officers system to clearly

9 members (Three of them are outside directors.)(As of March 2018)
Chairperson: Chairman of the Board

Meeting frequency

business operations through on-site investigations, interviews with

Once or twice amonth(The board had 15
meetings in 2017.
The average rateof attendance was
98.6%.)

responsible persons, and reference to important documents so as toManagement
Committee

President, Corporate Officers in Charge, and other
Corporate Officers and General Managers of Staff
Departments as deemed necessary by the President
Chairperson: President

Once a week
in principle

CSR
Committee

Same as above

Twice a year
in principle

Board ofAuditors

5 Auditors(Three of them are outside Auditors. (One is female.))provide suggestions, advice, and recommendations for securingsoundness in management. They also audit group companies incooperation with auditors of major affiliated companies

S HOWA DENKO R EP OR T 2 O18

31

Governance

About Showa Denko

CSR

Financial

Corporate Governance
Basic policies

Implementation status ofcorporate governance measures

Showa Denko continuously promotes corporate governance

Board of Directors
Policies and procedures for the Boardof Directors in determining the
remuneration of senior management
personnel and Directors

to ensure the soundness, effectiveness, and transparencyof management, and to contribute enhancing its corporate
value, thereby contributing to the sound growth of society andearning its full trust and confidence.

Policies and procedures of the Boardof Directors in the selection of senior
management personnel and thenomination of candidates for Directors
and Audit & Supervisory Board Members

separate the business execution function from the management
supervision function. Under the system, a top management teamcomposed of the president and corporate officers makes prompt andShowa Denko has newly introduced performance-linked stock-

dynamic decisions on management. At the same time, the number

based remuneration, and the remuneration of Executive Directorsof Board of Directors members has been substantially reduced while

and Corporate Officers now consists of base remuneration, which

the number of independent outside directors has been kept at two or

Based on the above, the Company has clarified its mission in

Candidates for Directors must possess sufficient knowledge,

is decided according to job title and others, as well as short-term

more for the enhancement of the supervision function.

the form of Our Vision and Showa Denko is working hard to

experience and capabilities to fulfill their obligations as Directors.

performancelinked remuneration and mid- to long-term performance-

Senior management personnel are selected by additionally taking into

linked remuneration, which are determined in consideration

thoroughly discusses and makes decisions regarding matters specified

account, among others, their corporate and individual performance.

of corporate and individual performance and others under thein the Companies Act or the Company's Articles of Incorporation

performance evaluation system.

as well as important issues in executing business operations, while

To that end, it is essential for the Company to strengthen
relations with its stakeholders, including shareholders,customers, suppliers, community residents, and employees.

realize this Vision.

Candidates for the Audit & Supervisory Board Members must possess,

The Remuneration Advisory Committee as an advisory body to the

The Board of Directors decides basic policies of the Company. It also

promoting prompt and dynamic decision making on management.

Showa Denko formulated the Corporate Governance Basic Policies

in addition to an appropriate level of expertise in the areas of finance andin line with Japan’s Corporate Governance Code and discloses theaccounting, sufficient knowledge, experience and capabilities to fulfill

Board of Directors and a majority of its members are Independent

We appoint directors with emphasis on the viewpoint of corporate

their obligations as Audit & Supervisory Board Members.

Outside Directors and Outside Audit & Supervisory Board Members. It

governance, aiming to strengthen the Board of Directors'

policies at its website.

deliberates the remuneration of each Executive Director and Corporate

monitoring and supervisory functions and ensure the propriety ofof candidates for the afore-mentioned positions and submits

Officer and submits recommendations to the Board of Directors.

decision making process. We have adopted a management system inrecommendations to the Board of Directors. The Committee is an

Remuneration of Outside Directors consists of base remuneration only.

which corporate officers dedicate themselves to business execution,

The Nomination Advisory Committee deliberates the nomination▶ Corporate governance structure

Shareholder’s meeting

advisory body to the Board of Directors and more than half of its
members are independent outside directors.

Job
AuditsRapid, effective decision-making
and business
Nomination
Advisory Committee
Advisory · Report
Remuneration
Advisory Committee

Accounting
Accounting
Audit
Audit

Board ofDirectors

Audit &
SupervisoryBoardin principle.

Supervisory Board Members in 2017 is as given below.

Furthermore, we have abolished the system of officer directors

Audit & Supervisory
Board
Members

Accounting
Auditorlinks

Top Management
President
Corporate Officers in Charge

which is their primary duty, but do not concurrently serve as directors,

The amount of remuneration paid to Directors and Audit &Auditing

Execution of Duty

Explanation regarding the selection ofsenior management personnel and thenomination of candidates for Directors
and Audit & Supervisory Board Members
Reasons why each candidate has been nominated are stated in the

Total amount of
remuneration

Number of persons

Directors(except outside Directors)¥231 million

10

Audit & Supervisory Board Members(except outside Auditors)¥55 million

3

Outside Directors
and Outside Auditors¥68 million

6

Human Rights / Corporate Ethics
Promotion Council

Internal Audits

CSR Committee

Risk Management Promotion Council

IR Promotion Council

Safety Measures Committee

Management Committee
R&D Committee

S HOWA DENKO R EP ORT 2 O18

The term of office of directors is set to one year to ensure a quick
and flexible formation of management team corresponding tochanges in the business environment.

Board of Auditors

Criteria on the independence ofoutside directors
The Board of Directors has established independence standards for
Outside Directors based on independence criteria stipulated by law
standards. See the Attachment of Corporate Governance Basic Policies

Business
Divisionssupervision among directors.

Reference Materials for the General Meeting of Shareholders.

Overview of Governing Bodies/
Committees/Councils

for the independence standards.

Board ofDirectors

Staff Sections

Showa Denko employs an auditor system. The Auditors attend theBoard of Directors meetings and other important internal meetings,
offering opinions as necessary. They conduct audits on execution ofGoverning
Body

Members

and the Tokyo Stock Exchange and selects candidates who meet the

Security Export Control Committee

except the Chairman and the President, while strengthening
monitoring by Auditors including outside Auditors and mutualInternal Audit Department

Responsible Care Promotion Council

30

Showa Denko introduced the corporate officers system to clearly

9 members (Three of them are outside directors.)(As of March 2018)
Chairperson: Chairman of the Board

Meeting frequency

business operations through on-site investigations, interviews with

Once or twice amonth(The board had 15
meetings in 2017.
The average rateof attendance was
98.6%.)

responsible persons, and reference to important documents so as toManagement
Committee

President, Corporate Officers in Charge, and other
Corporate Officers and General Managers of Staff
Departments as deemed necessary by the President
Chairperson: President

Once a week
in principle

CSR
Committee

Same as above

Twice a year
in principle

Board ofAuditors

5 Auditors(Three of them are outside Auditors. (One is female.))provide suggestions, advice, and recommendations for securingsoundness in management. They also audit group companies incooperation with auditors of major affiliated companies

S HOWA DENKO R EP OR T 2 O18

31

About Showa Denko

Governance

CSR

Financial

Corporate GovernanceAccounting audits

CSR Committee

Showa Denko concluded an auditing contract with KPMG AZSA, andShowa Denko positions CSR Committee at the top level of ourthis audit corporation performs accounting audits for the Company.

corporate governance system to check all management measures

The Accounting Auditor confirms the annual audit plan with thefrom the CSR perspective. We also established the Security Export

Auditors and reports the audit results to them. The Accounting Auditor

Control Committee and Safety Measures Committee under the CSR

and the Auditors also exchange information and views as required, toCommittee. Moreover, we set up Responsible Care Promotion Council,

promote their cooperation.

Risk Management Promotion Council, Human Rights/Corporate Ethics

Message from CRO

Committed to winning the confidence of
stakeholders in a sustainable manner

Promotion Council and IR Promotion Council to deliberate on theManagement Committee
and R&D Committee
The Management Committee, which is chaired by the President,

respective matters.

Responsible Care Promotion Council

deliberates and decides on matters to be referred to the Board ofUnder the CSR Committee, Showa Denko established the Responsible

Directors' meetings and important matters pertaining to overall

Care Promotion Council for preliminary discussions concerning

management of the Company. The decisions are made after

important issues around Responsible Care. (For related measures,deliberations on two occasions. As for the investment issues to beplease also see page 48.)

submitted to the Management Committee, risk analysis as well as
achievement/progress management are conducted in advance,
through preliminary risk reviews and examinations by a relevant task

Risk Management Promotion Council

team. The basic business policies including Company's medium-term

We have established a risk management system around the CRO

business plans are decided not only through the deliberation of the(Chief Risk Officer). Important risk-related matters are deliberated by

Management Committee but also through sufficient examination by

the Risk Management Promotion Council and determined by the CSR

all corporate officers.

Committee.

The R&D Committee deliberates and makes decisions on important
issues related to research and development.

Director Corprate officer and CRO

Keiichi Kamiguchi
The Showa Denko Group has a risk management system led by thefaces various risks related to compliance, occupational safety, product

Chief Risk Officer (CRO). Meanwhile, the importance of corporate

quality, and its business activities and is required to minimize both thegovernance in the wider world has further increased in the face of arisks themselves and the impacts that might be felt over the Group ifseries of corporate scandals that have occurred recently.

any of them were to materialize.

Regarding the business results for 2017, we deeply apologize to our

The Showa Denko Group deems “compliance with social andshareholders and other stakeholders for the concerns and problems

corporate ethical norms” a top management priority and fosters

caused by the delay of the announcement of the results. The delay

compliance-based management. We will promote a corporate culture

occurred because it took us time to make a detailed examinationthat helps increase the alertness of all Group employees to safety,of the transactions related to Shoko Co., Ltd., one of Showa Denko’scompliance, and corporate ethics and encourages them to makesubsidiaries. Showa Denko will fully support Shoko in implementing

quick responses and conduct improvement activities for better risk

improvement measures and will further enhance its internal control,

management.

deeming the strengthening of its risk management functions a
management priority for the entire Group. The Showa Denko GroupInternal Audit Department
We have the Internal Audit Department reporting directly to the
President. The Internal Audit Department investigates the overall
execution of business including group companies and verifies its
accuracy, validity and efficiency. It also investigates and verifies thefunctional state of management policies, business plans and internal
control systems.
The results of internal auditing are also reported to the Auditors formutual cooperation with Auditors' auditing.

Risk inventory
Our Group has been conducting risk inventory every year, including
its overseas bases. Risk inventory is conducted in the order of (1)extraction of risks, (2) assessment of potential impact, (3) planningof countermeasures, and (4) implementation and confirmation ofcountermeasures. It is important to identify all risks without omission.

TOPIC
Information security risks
The Showa Denko Group has its own Information Security
Regulations and Personal Information Protection Guidelines

This year we set items on which we would focus in the identification

to assist it in dealing appropriately with information-relatedof risks, such as “information leakage,” and made a risk inventory inrisks. We also take every opportunity to help all employees

reference to the items.

understand these rules and raise security awareness among themthrough e-learning and Cyber Security Month activities. We arecontinuously enhancing information security also at our Group
companies outside Japan.
As for targeted attacks, which have recently been posing a threat,▶ Risk inventory flow chart

Implementation &confirmation ofcountermeasures

Extractionof risks

we are collecting the latest information by participating in theactivities of the Japan Chemical Industry Association and the Japan

Company-widesummary

Petrochemical Industry Association. Further, we regularly conduct
drills to reduce related risks by raising employee awareness.
Moreover, in 2018 we began measures to enhance our cyberCompany-wide
activities

Activities ofeach section

Assessment ofpotential impact

32

S HOWA DENKO R EP ORT 2 O18

Planning ofcountermeasures

Extraction &revision ofcommon risks

security system.

Planning
countermeasuresagainst common risks

S HOWA DENKO R EP OR T 2 O18

33

About Showa Denko

Governance

CSR

Financial

Corporate GovernanceAccounting audits

CSR Committee

Showa Denko concluded an auditing contract with KPMG AZSA, andShowa Denko positions CSR Committee at the top level of ourthis audit corporation performs accounting audits for the Company.

corporate governance system to check all management measures

The Accounting Auditor confirms the annual audit plan with thefrom the CSR perspective. We also established the Security Export

Auditors and reports the audit results to them. The Accounting Auditor

Control Committee and Safety Measures Committee under the CSR

and the Auditors also exchange information and views as required, toCommittee. Moreover, we set up Responsible Care Promotion Council,

promote their cooperation.

Risk Management Promotion Council, Human Rights/Corporate Ethics

Message from CRO

Committed to winning the confidence of
stakeholders in a sustainable manner

Promotion Council and IR Promotion Council to deliberate on theManagement Committee
and R&D Committee
The Management Committee, which is chaired by the President,

respective matters.

Responsible Care Promotion Council

deliberates and decides on matters to be referred to the Board ofUnder the CSR Committee, Showa Denko established the Responsible

Directors' meetings and important matters pertaining to overall

Care Promotion Council for preliminary discussions concerning

management of the Company. The decisions are made after

important issues around Responsible Care. (For related measures,deliberations on two occasions. As for the investment issues to beplease also see page 48.)

submitted to the Management Committee, risk analysis as well as
achievement/progress management are conducted in advance,
through preliminary risk reviews and examinations by a relevant task

Risk Management Promotion Council

team. The basic business policies including Company's medium-term

We have established a risk management system around the CRO

business plans are decided not only through the deliberation of the(Chief Risk Officer). Important risk-related matters are deliberated by

Management Committee but also through sufficient examination by

the Risk Management Promotion Council and determined by the CSR

all corporate officers.

Committee.

The R&D Committee deliberates and makes decisions on important
issues related to research and development.

Director Corprate officer and CRO

Keiichi Kamiguchi
The Showa Denko Group has a risk management system led by thefaces various risks related to compliance, occupational safety, product

Chief Risk Officer (CRO). Meanwhile, the importance of corporate

quality, and its business activities and is required to minimize both thegovernance in the wider world has further increased in the face of arisks themselves and the impacts that might be felt over the Group ifseries of corporate scandals that have occurred recently.

any of them were to materialize.

Regarding the business results for 2017, we deeply apologize to our

The Showa Denko Group deems “compliance with social andshareholders and other stakeholders for the concerns and problems

corporate ethical norms” a top management priority and fosters

caused by the delay of the announcement of the results. The delay

compliance-based management. We will promote a corporate culture

occurred because it took us time to make a detailed examinationthat helps increase the alertness of all Group employees to safety,of the transactions related to Shoko Co., Ltd., one of Showa Denko’scompliance, and corporate ethics and encourages them to makesubsidiaries. Showa Denko will fully support Shoko in implementing

quick responses and conduct improvement activities for better risk

improvement measures and will further enhance its internal control,

management.

deeming the strengthening of its risk management functions a
management priority for the entire Group. The Showa Denko GroupInternal Audit Department
We have the Internal Audit Department reporting directly to the
President. The Internal Audit Department investigates the overall
execution of business including group companies and verifies its
accuracy, validity and efficiency. It also investigates and verifies thefunctional state of management policies, business plans and internal
control systems.
The results of internal auditing are also reported to the Auditors formutual cooperation with Auditors' auditing.

Risk inventory
Our Group has been conducting risk inventory every year, including
its overseas bases. Risk inventory is conducted in the order of (1)extraction of risks, (2) assessment of potential impact, (3) planningof countermeasures, and (4) implementation and confirmation ofcountermeasures. It is important to identify all risks without omission.

TOPIC
Information security risks
The Showa Denko Group has its own Information Security
Regulations and Personal Information Protection Guidelines

This year we set items on which we would focus in the identification

to assist it in dealing appropriately with information-relatedof risks, such as “information leakage,” and made a risk inventory inrisks. We also take every opportunity to help all employees

reference to the items.

understand these rules and raise security awareness among themthrough e-learning and Cyber Security Month activities. We arecontinuously enhancing information security also at our Group
companies outside Japan.
As for targeted attacks, which have recently been posing a threat,▶ Risk inventory flow chart

Implementation &confirmation ofcountermeasures

Extractionof risks

we are collecting the latest information by participating in theactivities of the Japan Chemical Industry Association and the Japan

Company-widesummary

Petrochemical Industry Association. Further, we regularly conduct
drills to reduce related risks by raising employee awareness.
Moreover, in 2018 we began measures to enhance our cyberCompany-wide
activities

Activities ofeach section

Assessment ofpotential impact

32

S HOWA DENKO R EP ORT 2 O18

Planning ofcountermeasures

Extraction &revision ofcommon risks

security system.

Planning
countermeasuresagainst common risks

S HOWA DENKO R EP OR T 2 O18

33

About Showa Denko

Governance

CSR

Financial

Corporate Governance

Human Rights / Corporate Ethics
Promotion Council

ESG indexes adopting Showa Denko

Board of Directors/Audit & Supervisory Board
Board of Directors

The Showa Denko Group considers “compliance with social justice andcorporate ethical norms” to be one of its most important management
priorities. It regards human rights as the core theme of corporate

January, 2018

ethics. The Human Rights/Corporate Ethics Promotion Council chairedby the CRO determines the medium- to long-term principles andmakes annual plans for the activities related to human rights andcorporate ethics, with an eye to raising awareness among all Group
employees. (For related measures, please also see page 62.)

Security export control Committee

IR Promotion Council

For all export products, Showa Denko’s Security Export Control

The IR Promotion Council is chaired by the CFO. The Council examines

whether or not government permission is required, investigatesthe comprehensive measures and basic plans for IR, centrally manages

customers, and makes a decision on whether to enter into eachthe important factual data, such as the financial results, in line withtransaction through systematized procedures.

Committee, established under the CSR Committee, determines

the Tokyo Stock Exchange’s timely disclosure rules, and ensures theappropriate disclosure of important facts.
Showa Denko conducts information disclosure and IR activities to

Safety Measures Committee

help shareholders and investors deepen their understanding of its

We also established the Safety Measures Committee under the CSR

corporate management, business activities, and strategies so that theyCommittee. Showa Denko examines comprehensive measures andcan evaluate its corporate value in an appropriate manner. To this end,

basic plans for the environment, safety, and health, and offers relevant

we work to communicate proactively with shareholders and investors,

opinions to the related agencies.

improve management transparency, and strive to disclose information
concerning Showa Denko in an easy-to-understand, fair, timely, andaccurate manner. In April 2018, the Revised Financial Instruments andExchange Act was enforced in Japan, and to ensure compliance withthe fair disclosure rules of this law, we revised our disclosure policy andKiyoshi Nishioka *Keiichi Kamiguchi

Tomofumi Akiyama *made it public on our website.

Representative Director, Chairman of the Board

Hideo Ichikawa

Jun Tanaka

Hidehito Takahashi

Representative Director, President

Kohei Morikawa

Masaharu Oshima *Toshiharu Kato

*Outside Members

Audit & Supervisory Board

TOPIC
Recognition of our IR activities
Showa Denko was rated highly in the selection of Awards for
Excellence in Corporate Disclosure by securities analysts of the
Securities Analysts Association of Japan. Moreover, our IR site
was named an excellent website by Nikko Investor Relationsin its Website Quality Ranking and received the Internet IR
Commendation Award from Daiwa Investor Relations and thebronze prize in the Gomez IR Site Ranking from Morningstar.

Setsu Onishi *34

S HOWA DENKO R EP ORT 2 O18

Hiroyuki Tezuka *Saburo Muto

Tetsu Moriki

Kiyomi Saito **Outside Members

S HOWA DENKO R EP OR T 2 O18

35

About Showa Denko

Governance

CSR

Financial

Corporate Governance

Human Rights / Corporate Ethics
Promotion Council

ESG indexes adopting Showa Denko

Board of Directors/Audit & Supervisory Board
Board of Directors

The Showa Denko Group considers “compliance with social justice andcorporate ethical norms” to be one of its most important management
priorities. It regards human rights as the core theme of corporate

January, 2018

ethics. The Human Rights/Corporate Ethics Promotion Council chairedby the CRO determines the medium- to long-term principles andmakes annual plans for the activities related to human rights andcorporate ethics, with an eye to raising awareness among all Group
employees. (For related measures, please also see page 62.)

Security export control Committee

IR Promotion Council

For all export products, Showa Denko’s Security Export Control

The IR Promotion Council is chaired by the CFO. The Council examines

whether or not government permission is required, investigatesthe comprehensive measures and basic plans for IR, centrally manages

customers, and makes a decision on whether to enter into eachthe important factual data, such as the financial results, in line withtransaction through systematized procedures.

Committee, established under the CSR Committee, determines

the Tokyo Stock Exchange’s timely disclosure rules, and ensures theappropriate disclosure of important facts.
Showa Denko conducts information disclosure and IR activities to

Safety Measures Committee

help shareholders and investors deepen their understanding of its

We also established the Safety Measures Committee under the CSR

corporate management, business activities, and strategies so that theyCommittee. Showa Denko examines comprehensive measures andcan evaluate its corporate value in an appropriate manner. To this end,

basic plans for the environment, safety, and health, and offers relevant

we work to communicate proactively with shareholders and investors,

opinions to the related agencies.

improve management transparency, and strive to disclose information
concerning Showa Denko in an easy-to-understand, fair, timely, andaccurate manner. In April 2018, the Revised Financial Instruments andExchange Act was enforced in Japan, and to ensure compliance withthe fair disclosure rules of this law, we revised our disclosure policy andKiyoshi Nishioka *Keiichi Kamiguchi

Tomofumi Akiyama *made it public on our website.

Representative Director, Chairman of the Board

Hideo Ichikawa

Jun Tanaka

Hidehito Takahashi

Representative Director, President

Kohei Morikawa

Masaharu Oshima *Toshiharu Kato

*Outside Members

Audit & Supervisory Board

TOPIC
Recognition of our IR activities
Showa Denko was rated highly in the selection of Awards for
Excellence in Corporate Disclosure by securities analysts of the
Securities Analysts Association of Japan. Moreover, our IR site
was named an excellent website by Nikko Investor Relationsin its Website Quality Ranking and received the Internet IR
Commendation Award from Daiwa Investor Relations and thebronze prize in the Gomez IR Site Ranking from Morningstar.

Setsu Onishi *34

S HOWA DENKO R EP ORT 2 O18

Hiroyuki Tezuka *Saburo Muto

Tetsu Moriki

Kiyomi Saito **Outside Members

S HOWA DENKO R EP OR T 2 O18

35

About Showa Denko

Governance

Board of Directors

CSR

Financial

Corporate Officers

Representative Director, Chairman of the Board

Senior Managing Corporate Officer

Hideo Ichikawa

Jiro Ishikawa

CSR

General Manager, HD Division;

Representative Director, President

Kohei Morikawa
Chief Executive Officer

Officer in charge of Electronics Materials and Advanced Battery Materials
divisions, and Power Semiconductor Project

Corporate Officer

Kanji Takasaki
Managing Corporate Officers

Jun Tanaka
Chief Technical Officer (CTO);
Officer in charge of Electronic Chemicals and Functional Chemicals Divisions,
Business Development Center, Higashinagahara, Isesaki and Tatsuno plants,
and Corporate R&D and Intellectual Property departments

Hidehito Takahashi
General Manager, Carbon Division;
Officer in charge of Ceramics Division and Corporate Strategy Department

Officer in charge of Aluminum Rolled Products, Aluminum Specialty
Components, and Aluminum Can divisions, and Oyama and Kitakata plants

Youichi Takeuchi
Oita Complex Representative

Takayuki Sato
General Manager, Electronics Materials Division;
General Manager, Marketing Department, Electronics Materials Division;
Manager, Power Semiconductor Project; Officer in charge of Chichibu Plant

Motohiro Takeuchi
General Manager, Corporate Strategy Department

Corporate Officers

Keiichi Kamiguchi
Chief Risk Management Officer(CRO);
Officer in charge of Internal Audit, Legal, General Affairs & Human Resources,and Purchasing & SCM departments; Chairman of Security Export Control
Committee

Toshiharu Kato
Chief Financial Officer(CFO);
Officer in charge of Finance & Accounting and Information Systems
departments

Outside Member

Tomofumi Akiyama
Masaharu Oshima
Kiyoshi Nishioka

Taichi Nagai
General Manager, Production Technology Department;
Officer in charge of Energy & Electricity, SPS Innovation and CSR departments;
Chairman of Safety Measures Committee

Koichi Nishimura
General Manager, Industrial Gas Division;
Officer in charge of Basic Chemicals Division and Kawasaki Plant;
President, Showa Denko Gas Products Co., Ltd.

Masamichi Yagishita

Message from CSR Officer

General Manager, Electronic Chemicals Division;
Officer in charge of Tokuyama Plant

CSR Policy

Masunori Kaiho

Showa Denko Group's activities to achieve SDGs

General Manager, Kawasaki Plant

Hiroshi Daio
General Manager, Ceramics Division;
Manager, Alumina Project ; Officer in charge of Yokohama and Shiojiri plants

Takuji Yamamoto
Assistant to President in charge of AI Strategy Planning

Audit & Supervisory Board Members
Saburo Muto
Tetsu Moriki
Outside Member

Hiroyuki Tezuka
Kiyomi Saito
Setsu Onishi

38

CSR Strategy

Masao Shibuya
General Manager, Advanced Battery Materials Division

Akihiro Jimbo
General Manager, Basic Chemicals Division

Tetsuo Wada
General Manager, Business Development Center and Institute for Integrated
Product Development

Hirotsugu Fukuda
General Manager, Petrochemicals Division;
General Manager, Olefins Department, Petrochemicals Division;
Officer in charge of Oita Complex

Materiality

42

Stakeholder communications
Stakeholder communications
Highlights of CSR Activities

44

Responsible Care48

Management
Environmental Conservation
Equipment safety/Occupational Safety
Chemical Substances Safety/Quality Assurance
Access to Essential Services
CSR procurement60

Human Rights and Labor Practice62

Performance Data

66

Third-party Verification

68

Klaus Unterharnscheidt
President, SHOWA DENKO CARBON Holding GmbH36

S HOWA DENKO R EP ORT 2 O18

S HOWA DENKO R EP OR T 2 O18

37

About Showa Denko

Governance

Board of Directors

CSR

Financial

Corporate Officers

Representative Director, Chairman of the Board

Senior Managing Corporate Officer

Hideo Ichikawa

Jiro Ishikawa

CSR

General Manager, HD Division;

Representative Director, President

Kohei Morikawa
Chief Executive Officer

Officer in charge of Electronics Materials and Advanced Battery Materials
divisions, and Power Semiconductor Project

Corporate Officer

Kanji Takasaki
Managing Corporate Officers

Jun Tanaka
Chief Technical Officer (CTO);
Officer in charge of Electronic Chemicals and Functional Chemicals Divisions,
Business Development Center, Higashinagahara, Isesaki and Tatsuno plants,
and Corporate R&D and Intellectual Property departments

Hidehito Takahashi
General Manager, Carbon Division;
Officer in charge of Ceramics Division and Corporate Strategy Department

Officer in charge of Aluminum Rolled Products, Aluminum Specialty
Components, and Aluminum Can divisions, and Oyama and Kitakata plants

Youichi Takeuchi
Oita Complex Representative

Takayuki Sato
General Manager, Electronics Materials Division;
General Manager, Marketing Department, Electronics Materials Division;
Manager, Power Semiconductor Project; Officer in charge of Chichibu Plant

Motohiro Takeuchi
General Manager, Corporate Strategy Department

Corporate Officers

Keiichi Kamiguchi
Chief Risk Management Officer(CRO);
Officer in charge of Internal Audit, Legal, General Affairs & Human Resources,and Purchasing & SCM departments; Chairman of Security Export Control
Committee

Toshiharu Kato
Chief Financial Officer(CFO);
Officer in charge of Finance & Accounting and Information Systems
departments

Outside Member

Tomofumi Akiyama
Masaharu Oshima
Kiyoshi Nishioka

Taichi Nagai
General Manager, Production Technology Department;
Officer in charge of Energy & Electricity, SPS Innovation and CSR departments;
Chairman of Safety Measures Committee

Koichi Nishimura
General Manager, Industrial Gas Division;
Officer in charge of Basic Chemicals Division and Kawasaki Plant;
President, Showa Denko Gas Products Co., Ltd.

Masamichi Yagishita

Message from CSR Officer

General Manager, Electronic Chemicals Division;
Officer in charge of Tokuyama Plant

CSR Policy

Masunori Kaiho

Showa Denko Group's activities to achieve SDGs

General Manager, Kawasaki Plant

Hiroshi Daio
General Manager, Ceramics Division;
Manager, Alumina Project ; Officer in charge of Yokohama and Shiojiri plants

Takuji Yamamoto
Assistant to President in charge of AI Strategy Planning

Audit & Supervisory Board Members
Saburo Muto
Tetsu Moriki
Outside Member

Hiroyuki Tezuka
Kiyomi Saito
Setsu Onishi

38

CSR Strategy

Masao Shibuya
General Manager, Advanced Battery Materials Division

Akihiro Jimbo
General Manager, Basic Chemicals Division

Tetsuo Wada
General Manager, Business Development Center and Institute for Integrated
Product Development

Hirotsugu Fukuda
General Manager, Petrochemicals Division;
General Manager, Olefins Department, Petrochemicals Division;
Officer in charge of Oita Complex

Materiality

42

Stakeholder communications
Stakeholder communications
Highlights of CSR Activities

44

Responsible Care48

Management
Environmental Conservation
Equipment safety/Occupational Safety
Chemical Substances Safety/Quality Assurance
Access to Essential Services
CSR procurement60

Human Rights and Labor Practice62

Performance Data

66

Third-party Verification

68

Klaus Unterharnscheidt
President, SHOWA DENKO CARBON Holding GmbH36

S HOWA DENKO R EP ORT 2 O18

S HOWA DENKO R EP OR T 2 O18

37

About Showa Denko

CSR

Governance

Financial

CSR Management of
Showa Denko

Stakeholder
communications

Highlights of
CSR Activities

Responsible Care

CSR procurement

Human Rights andLabor Practice

CSR Management of Showa Denko
Message from CSR Officer

CSR Policy
Given our currently promoted medium-term consolidated businessplan Project 2020+ , the Showa Denko Group aims to “contribute

Making CSR activities a part ofour corporate culture

medium-term consolidated business plan

toward creating a society where affluence and sustainability areharmonized” while conducting business in such a way that our
products and technologies contribute to solving social issues including
the topics of global environment, energy, and resources.

We contribute to creating a society where
affluence and sustainability are harmonized.

CSR policies for 2016 to 2018

During Project 2020+, we will focus on the issues of “responsiblecare,” “risk management and environment-conscious business
management,” “corporate ethics and compliance,” and “dialogue with
Corporate Officer

stakeholders,” as well as the materiality issues selected.

Taichi Nagai

At the Showa Denko Group, CSR is regarded as the responsibility ofeach and every employee. All employees are thus expected to behave

The Showa Denko Group is committed to fulfilling its corporate social
responsibility (CSR) by implementing measures to become a “company
contributing to the sound growth of society” toward creating a society
where affluence and sustainability are harmonized. To this end, we areworking to raise individual employees’ awareness of CSR and to make
CSR activities a part of the Group’s culture.

Safe and stable operation provides the basis for ourbusiness
The Showa Denko Group, which is a chemical manufacturer, gives
first priority to safety, deeming it the basis for its business. Based on
this recognition we launched the Active Safety activities* in 2007. We
will further enhance the activities to prevent occupational accidents,
equipment-related incidents, and environmental problems in a steadymanner.
We are also conducting Responsible Care activities to give due
consideration to the environment, safety, and human healththroughout the life cycle of chemical substances, including at thedevelopment, manufacture, disposal, and recycling stages.
The activities comprise a core part of the Group’s CSR activities. We
will step up our Responsible Care, Active Safety, and other activities in
the four fields of “Safety and disaster prevention,” “Occupational safety
and health,” “Chemical substance safety,” and “Environmental safety”
to provide society and customers with products, technologies, andservices that meet their needs in a safe and stable manner for use withpeace of mind.
*	Active Safety activities: The Showa Denko Group’s unique activities in which weanalyze past accidents and problems, and take measures to prevent their recurrence.

Toward the creation of a sustainable society
The Sustainable Development Goals (SDGs) are composed of 17
goals to be attained by the international community by 2030 to meetwith integrity and in conformity with “Our Vision” and “Our Code of
Conduct” and to contribute to society through business activities.
With its products, technologies and services, the Group will

global social challenges. The SDGs target all countries and are intended

contribute to creating a society where affluence and sustainability areto create a society where “no one is left behind.” For the SDGs, greater

harmonized.

All employees are thus expected to behave with integrity and in
conformity with “Our Vision” and “Our Code of Conduct” and tocontribute to society through business activities.
(1) Realize safe and stable
operations as well as sustainable
development.
- Consolidate the businessfoundation in a way that iscompatible with low-carbon
society.
- Contribute to CO2 emission
reduction and resource recycling.

(2) Ensure strict compliance withlegislation and observe social andcorporate ethical norms.
(3) Promote dialogue withstakeholders.

public attention has been focused on measures implemented bycompanies. The Showa Denko Group has been supplying “products
and services that are useful and safe and exceed our customers’
expectations.” Toward the creation of a sustainable society, we willcontinue to contribute to the solution of global social issues, including

CSR promotion Framework

climate change, depletion of resources, demographic changes,
urbanization, multipolarization of the world economy, and changes in
the feedstock/energy-resources market.

Promoting dialogue with stakeholders
The public has recently been paying more attention toenvironmental, social, and governance (ESG) measures taken
by companies. Amid rapid changes in the social and economic
environment, we need to meet the expectations of all stakeholders, forwhich we assuredly need to foster direct dialogue with stakeholders
and identify what they expect of the Showa Denko Group. We
will attach importance not only to IR-related dialogues but also to
dialogues with Group employees in charge of CSR activities in Japanand abroad. We will foster constructive dialogues with stakeholders
through the Group’s aluminum can recycling and local community
contribution activities, thereby raising individual employees’ CSR
awareness and improving the quality of our CSR activities.

Our group has established the CSR Committee composed of theestablished the Environment & Safety Office and the Quality Assurance

members of the Management Council, which serves as a framework to

Office under the CSR Department in order to promote Responsible.

associate business measures with CSR. Under the CSR Committee, weestablished the Responsible Care Promotion Council, Risk Management
Promotion Council, Human Rights/Corporate Ethics Promotion Council,
and the IR Promotion Council. These councils plan and propose
individual topics related to CSR as well as discuss matters to be▶︎ CSR promotion Frameworkpresented to the CSR Committee.

CSR Committee

In addition, the Group has a framework where the CSR Department,
Environment & Safety Office , Quality Assurance Office, General Affairs& Human Resources Department, and the Public Relations Office assist
each business division and workplace perform various CSR activities

Responsible Care
Promotion Council

Risk Management
Promotion Council

Human Rights /Corporate Ethics
Promotion Council

IR Promotion
Councilsuch as those for human rights, corporate ethics and compliance,risk management, Responsible Care and other matters as staff
departments.

Business Division and Workplace

The CSR Department functions as the secretariat of the CSR
Committee, plans and summarizes basic policies and comprehensive
measures regarding CSR. The department also collects CSR related

Staff departments.
CSR Department

General Affairs & Human Resources
Department

information and supervises risk management in our group. We have38

S HOWA DENKO R EP ORT 2 O18

S HOWA DENKO R EP OR T 2 O18

39

About Showa Denko

CSR

Governance

Financial

CSR Management of
Showa Denko

Stakeholder
communications

Highlights of
CSR Activities

Responsible Care

CSR procurement

Human Rights andLabor Practice

CSR Management of Showa Denko
Message from CSR Officer

CSR Policy
Given our currently promoted medium-term consolidated businessplan Project 2020+ , the Showa Denko Group aims to “contribute

Making CSR activities a part ofour corporate culture

medium-term consolidated business plan

toward creating a society where affluence and sustainability areharmonized” while conducting business in such a way that our
products and technologies contribute to solving social issues including
the topics of global environment, energy, and resources.

We contribute to creating a society where
affluence and sustainability are harmonized.

CSR policies for 2016 to 2018

During Project 2020+, we will focus on the issues of “responsiblecare,” “risk management and environment-conscious business
management,” “corporate ethics and compliance,” and “dialogue with
Corporate Officer

stakeholders,” as well as the materiality issues selected.

Taichi Nagai

At the Showa Denko Group, CSR is regarded as the responsibility ofeach and every employee. All employees are thus expected to behave

The Showa Denko Group is committed to fulfilling its corporate social
responsibility (CSR) by implementing measures to become a “company
contributing to the sound growth of society” toward creating a society
where affluence and sustainability are harmonized. To this end, we areworking to raise individual employees’ awareness of CSR and to make
CSR activities a part of the Group’s culture.

Safe and stable operation provides the basis for ourbusiness
The Showa Denko Group, which is a chemical manufacturer, gives
first priority to safety, deeming it the basis for its business. Based on
this recognition we launched the Active Safety activities* in 2007. We
will further enhance the activities to prevent occupational accidents,
equipment-related incidents, and environmental problems in a steadymanner.
We are also conducting Responsible Care activities to give due
consideration to the environment, safety, and human healththroughout the life cycle of chemical substances, including at thedevelopment, manufacture, disposal, and recycling stages.
The activities comprise a core part of the Group’s CSR activities. We
will step up our Responsible Care, Active Safety, and other activities in
the four fields of “Safety and disaster prevention,” “Occupational safety
and health,” “Chemical substance safety,” and “Environmental safety”
to provide society and customers with products, technologies, andservices that meet their needs in a safe and stable manner for use withpeace of mind.
*	Active Safety activities: The Showa Denko Group’s unique activities in which weanalyze past accidents and problems, and take measures to prevent their recurrence.

Toward the creation of a sustainable society
The Sustainable Development Goals (SDGs) are composed of 17
goals to be attained by the international community by 2030 to meetwith integrity and in conformity with “Our Vision” and “Our Code of
Conduct” and to contribute to society through business activities.
With its products, technologies and services, the Group will

global social challenges. The SDGs target all countries and are intended

contribute to creating a society where affluence and sustainability areto create a society where “no one is left behind.” For the SDGs, greater

harmonized.

All employees are thus expected to behave with integrity and in
conformity with “Our Vision” and “Our Code of Conduct” and tocontribute to society through business activities.
(1) Realize safe and stable
operations as well as sustainable
development.
- Consolidate the businessfoundation in a way that iscompatible with low-carbon
society.
- Contribute to CO2 emission
reduction and resource recycling.

(2) Ensure strict compliance withlegislation and observe social andcorporate ethical norms.
(3) Promote dialogue withstakeholders.

public attention has been focused on measures implemented bycompanies. The Showa Denko Group has been supplying “products
and services that are useful and safe and exceed our customers’
expectations.” Toward the creation of a sustainable society, we willcontinue to contribute to the solution of global social issues, including

CSR promotion Framework

climate change, depletion of resources, demographic changes,
urbanization, multipolarization of the world economy, and changes in
the feedstock/energy-resources market.

Promoting dialogue with stakeholders
The public has recently been paying more attention toenvironmental, social, and governance (ESG) measures taken
by companies. Amid rapid changes in the social and economic
environment, we need to meet the expectations of all stakeholders, forwhich we assuredly need to foster direct dialogue with stakeholders
and identify what they expect of the Showa Denko Group. We
will attach importance not only to IR-related dialogues but also to
dialogues with Group employees in charge of CSR activities in Japanand abroad. We will foster constructive dialogues with stakeholders
through the Group’s aluminum can recycling and local community
contribution activities, thereby raising individual employees’ CSR
awareness and improving the quality of our CSR activities.

Our group has established the CSR Committee composed of theestablished the Environment & Safety Office and the Quality Assurance

members of the Management Council, which serves as a framework to

Office under the CSR Department in order to promote Responsible.

associate business measures with CSR. Under the CSR Committee, weestablished the Responsible Care Promotion Council, Risk Management
Promotion Council, Human Rights/Corporate Ethics Promotion Council,
and the IR Promotion Council. These councils plan and propose
individual topics related to CSR as well as discuss matters to be▶︎ CSR promotion Frameworkpresented to the CSR Committee.

CSR Committee

In addition, the Group has a framework where the CSR Department,
Environment & Safety Office , Quality Assurance Office, General Affairs& Human Resources Department, and the Public Relations Office assist
each business division and workplace perform various CSR activities

Responsible Care
Promotion Council

Risk Management
Promotion Council

Human Rights /Corporate Ethics
Promotion Council

IR Promotion
Councilsuch as those for human rights, corporate ethics and compliance,risk management, Responsible Care and other matters as staff
departments.

Business Division and Workplace

The CSR Department functions as the secretariat of the CSR
Committee, plans and summarizes basic policies and comprehensive
measures regarding CSR. The department also collects CSR related

Staff departments.
CSR Department

General Affairs & Human Resources
Department

information and supervises risk management in our group. We have38

S HOWA DENKO R EP ORT 2 O18

S HOWA DENKO R EP OR T 2 O18

39

About Showa Denko

Governance

CSR

CSR Management of
Showa Denko

Financial

Stakeholder
communications

Highlights of
CSR Activities

Responsible Care

CSR procurement

Human Rights andLabor Practice

CSR Management of Showa Denko

Showa Denko Group's activities to achieve SDGs

Materiality of issues of the Showa Denko Group
Aiming to contribute to realization of sustainable society, the Showa
Denko Group analyzes materiality of impacts of its business activities
on stakeholders, economy, society and environment, and selects 14
material issues.
The material issues selected are aligned with the Group’s medium-to
long-term management issues.
The diagram below shows how each of material issues of the Groupand core issues of ISO 26,000 listed in the left part is correlated toMateriality of
the impact on
stakeholders’evaluations
and decision
makingIssues which have material
impacts on stakeholders,
but not on economy,
environment nor society

Issues which have material
impacts not only on
stakeholders but also on
economy, environment andsociety

Based on “Our Vision,” the Showa Denko Group promises as follows in “Our Code of Conduct”: we will act with integrity as a responsible citizen of theinternational society; provide our customers with satisfaction and safety; develop corporate culture that helps every member of the Group to fully display
his/her ability; meet the expectations of local communities; and make vigorous efforts to maintain and improve the global environment.
These promises are in accord with the ideas proposed in the Sustainable Development Goals (SDGs), which are universal goals to be attained by 2030
for all people and include eradicating all forms of poverty, fighting against unfairness, and combating climate change to “leave no one behind.”Issues which do not havematerial impacts on
stakeholders, economy,
environment nor society

Issues which have material
impacts on economy,
environment and society, but
not on stakeholders

each medium- to long-term issue of the Group in the right part. This
diagram was also included in a Group newsletter to ensure that all
employees across the Group understand the correlation.

▶Relations between Medium- to long-term management issues and Materiality
Materiality
Provision of products, technologies and services

Core subjects addressedin ISO26000

Medium- to long-term management issues
Contributing to local communities

Social Contribution

Participation in Community Activities

Provision of products,
technologies and services

Prevention of Pollution
Use of sustainable resources

Consumer Safety and Health Protection

The Environment

Safety anddisaster prevention*

Focus on sustainability
Contributing to creating a society
where affluence and sustainability areharmonizedThorough corporate ethics

Cooperation with business partner

The following shows the Showa Denko Group’s specific measures taken for the SDGs.

Safety and disaster prevention

Fair business practices
Thorough complianceCorporate ethics*

Labor practices/Human rights

Compliance with social and corporate
ethical norms

Maintenance of product safety
Safety of chemicals, quality assurance

Thorough risk management

Promotion of diversity

Awareness-raising activity
The Showa Denko Group introduces information
about the relationships between the Group andthe SDGs in its Group magazine to help individual
employees understand the significance of theSDGs and encourage them to work toward their
attainment.

Embracing and leveraging thepotential of diversity

Corporate Governance

Enhancement ofcorporate governance
Maintenance of sound, effective andtransparent management

Group News (Intranet)

S HOWA DENKO R EP ORT 2 O18

Utilization of our own
hydroelectric power stations
The Showa Denko Group owns and operates hydroelectric power stations
at four of its plants: the Omachi, Shiojiri, Chichibu, andHigashinagahara Plants. The amount of CO2 emitted fromhydroelectric power generation is much smaller than thatemitted by thermal power generation or other power
generation methods.
From 2015 to 2017 we replaced old equipment with newmodels at all of our hydroelectric power stations to ensure
the stable supply of electricity and increase the efficiency ofTokiwa Hydroelectric Power Plant(Omachi Plant)
our power generation.

Chemical recycling of used plastics*The issues in italics are not included in the core subjects of ISO 26000, but are listed here because they are considered to be important to the Group.

40

Safety top priority

Communication
Contribution to social and economic development

Strengthening Responsible Care

Equipment safety, countermeasures against
large-scale disasters

Development of Human Resources
Decision-making process, structure

Respact for individuality

Reduction in the consumption of
resources and energy, conservation of
the global environment

Safe and stable operations

Consumer issues

Occupational Health and Safety
Creating a comfortable workplace

Provision of products that contribute to thedevelopment of international community

Reduce environmental impact
Products and technologies to solve
environmental problems

Realization of zero accidents and disasters

Access to Essential Services
Protection of intellectual property

Compliance with laws and regulations
Responsible CareFair and free trade
Respect for human rights
Prevention of corruption, such as bribery

Act as a
Maintain andresponsible
improve the global
citizen of theenvironment
international
Corporate culture thatsocietyhelps every memberof the Group to fully
Provide our display his/her ability
Meet thecustomers withexpectations ofsatisfaction andlocal communities
safetyProvision of solutions for social issues

Measures to climate change
Equipment safty

Our Code of Conduct and SDGs

Materiality of the impact of Showa Denko Group on
economy, environment and society

The Kawasaki Plant of Showa Denko K.K. has been chemicallyrecycling used plastics into hydrogen since 2003 in order to ensure the stable supply ofhydrogen as a material for ammonia.
Across the world, ammonia is produced in greater quantities than any other chemicallysynthesized product. It is mainly used as a material for fertilizer, synthetic fiber, and resin,
and for the denitration of air pollutants emitted from thermal
power plants and others.
The recycling of used plastics into hydrogen helps reducethe consumption of fossil fuels. Moreover, by-products
generated from the recycling process are effectively used
as resources, including the recycling of CO2 into dry ice. Thischemical recycling thus greatly contributes to the reductionof environmental impacts compared with the conventionalhydrogen manufacturing method.
Kawasaki Plastic Recycle plant

S HOWA DENKO R EP OR T 2 O18

41

About Showa Denko

Governance

CSR

CSR Management of
Showa Denko

Financial

Stakeholder
communications

Highlights of
CSR Activities

Responsible Care

CSR procurement

Human Rights andLabor Practice

CSR Management of Showa Denko

Showa Denko Group's activities to achieve SDGs

Materiality of issues of the Showa Denko Group
Aiming to contribute to realization of sustainable society, the Showa
Denko Group analyzes materiality of impacts of its business activities
on stakeholders, economy, society and environment, and selects 14
material issues.
The material issues selected are aligned with the Group’s medium-to
long-term management issues.
The diagram below shows how each of material issues of the Groupand core issues of ISO 26,000 listed in the left part is correlated toMateriality of
the impact on
stakeholders’evaluations
and decision
makingIssues which have material
impacts on stakeholders,
but not on economy,
environment nor society

Issues which have material
impacts not only on
stakeholders but also on
economy, environment andsociety

Based on “Our Vision,” the Showa Denko Group promises as follows in “Our Code of Conduct”: we will act with integrity as a responsible citizen of theinternational society; provide our customers with satisfaction and safety; develop corporate culture that helps every member of the Group to fully display
his/her ability; meet the expectations of local communities; and make vigorous efforts to maintain and improve the global environment.
These promises are in accord with the ideas proposed in the Sustainable Development Goals (SDGs), which are universal goals to be attained by 2030
for all people and include eradicating all forms of poverty, fighting against unfairness, and combating climate change to “leave no one behind.”Issues which do not havematerial impacts on
stakeholders, economy,
environment nor society

Issues which have material
impacts on economy,
environment and society, but
not on stakeholders

each medium- to long-term issue of the Group in the right part. This
diagram was also included in a Group newsletter to ensure that all
employees across the Group understand the correlation.

▶Relations between Medium- to long-term management issues and Materiality
Materiality
Provision of products, technologies and services

Core subjects addressedin ISO26000

Medium- to long-term management issues
Contributing to local communities

Social Contribution

Participation in Community Activities

Provision of products,
technologies and services

Prevention of Pollution
Use of sustainable resources

Consumer Safety and Health Protection

The Environment

Safety anddisaster prevention*

Focus on sustainability
Contributing to creating a society
where affluence and sustainability areharmonizedThorough corporate ethics

Cooperation with business partner

The following shows the Showa Denko Group’s specific measures taken for the SDGs.

Safety and disaster prevention

Fair business practices
Thorough complianceCorporate ethics*

Labor practices/Human rights

Compliance with social and corporate
ethical norms

Maintenance of product safety
Safety of chemicals, quality assurance

Thorough risk management

Promotion of diversity

Awareness-raising activity
The Showa Denko Group introduces information
about the relationships between the Group andthe SDGs in its Group magazine to help individual
employees understand the significance of theSDGs and encourage them to work toward their
attainment.

Embracing and leveraging thepotential of diversity

Corporate Governance

Enhancement ofcorporate governance
Maintenance of sound, effective andtransparent management

Group News (Intranet)

S HOWA DENKO R EP ORT 2 O18

Utilization of our own
hydroelectric power stations
The Showa Denko Group owns and operates hydroelectric power stations
at four of its plants: the Omachi, Shiojiri, Chichibu, andHigashinagahara Plants. The amount of CO2 emitted fromhydroelectric power generation is much smaller than thatemitted by thermal power generation or other power
generation methods.
From 2015 to 2017 we replaced old equipment with newmodels at all of our hydroelectric power stations to ensure
the stable supply of electricity and increase the efficiency ofTokiwa Hydroelectric Power Plant(Omachi Plant)
our power generation.

Chemical recycling of used plastics*The issues in italics are not included in the core subjects of ISO 26000, but are listed here because they are considered to be important to the Group.

40

Safety top priority

Communication
Contribution to social and economic development

Strengthening Responsible Care

Equipment safety, countermeasures against
large-scale disasters

Development of Human Resources
Decision-making process, structure

Respact for individuality

Reduction in the consumption of
resources and energy, conservation of
the global environment

Safe and stable operations

Consumer issues

Occupational Health and Safety
Creating a comfortable workplace

Provision of products that contribute to thedevelopment of international community

Reduce environmental impact
Products and technologies to solve
environmental problems

Realization of zero accidents and disasters

Access to Essential Services
Protection of intellectual property

Compliance with laws and regulations
Responsible CareFair and free trade
Respect for human rights
Prevention of corruption, such as bribery

Act as a
Maintain andresponsible
improve the global
citizen of theenvironment
international
Corporate culture thatsocietyhelps every memberof the Group to fully
Provide our display his/her ability
Meet thecustomers withexpectations ofsatisfaction andlocal communities
safetyProvision of solutions for social issues

Measures to climate change
Equipment safty

Our Code of Conduct and SDGs

Materiality of the impact of Showa Denko Group on
economy, environment and society

The Kawasaki Plant of Showa Denko K.K. has been chemicallyrecycling used plastics into hydrogen since 2003 in order to ensure the stable supply ofhydrogen as a material for ammonia.
Across the world, ammonia is produced in greater quantities than any other chemicallysynthesized product. It is mainly used as a material for fertilizer, synthetic fiber, and resin,
and for the denitration of air pollutants emitted from thermal
power plants and others.
The recycling of used plastics into hydrogen helps reducethe consumption of fossil fuels. Moreover, by-products
generated from the recycling process are effectively used
as resources, including the recycling of CO2 into dry ice. Thischemical recycling thus greatly contributes to the reductionof environmental impacts compared with the conventionalhydrogen manufacturing method.
Kawasaki Plastic Recycle plant

S HOWA DENKO R EP OR T 2 O18

41

About Showa Denko

CSR

Governance

CSR Management of
Showa Denko

Financial

Stakeholder
communications

Highlights of
CSR Activities

Responsible Care

CSR procurement

Human Rights andLabor Practice

Stakeholder communications
Let us introduce specific examples of communication with stakeholders.

Stakeholder communications
The Showa Denko Group wants to be a company that fulfills our social responsibilities for all stakeholders and a company that is trusted and appreciatedCase 1by them. We will clarify our responsibilities for all stakeholders, understand their expectations and issues regarding our group through communication,

Communicated with shareholders and investors

and reflect the results in our corporate activities.
We position the general meeting of shareholders as the golden opportunity
for communication with shareholders. In order for more shareholders to
exercise their voting rights, we enabled the shareholders who were not able
to attend the meeting to exercise their votes by means of mail or the Internet.

Customers

For institutional investors and securities analysts in Japan, we held

• News releases• Trade shows• Showa Denko reports/Product brochures• Website• Plant tours and other opportunities

briefing sessions on our financial results and progress with the management
plans and major businesses, while also responding to individual inquiries
For institutional investors and shareholders outside Japan, we fostered
the disclosure of information in English to ensure fair disclosure. The
president and CFO also visited Europe, North America, and Asia to explain

SDK's booth atInternepcon Japan

Employees and their families• Group news (paper and web)• Communication via intranet• Employee surveys• Corporate Ethics Hotline• Labor management consultations

the financial results and management plans directly to them.

Shareholders and investors• Shareholders’ meetings• Financial results and business briefings• Briefing session for investors• Reports to shareholders

Customers

Employees andtheir families

Exhibited graphic panels at thelobby of general meeting ofshareholders (Mar.2018)

and questions.

The Showa
Denko Group

Shareholders
and investors

branches of securities firms to provide explanations to these investors.
Moreover, we expanded the online information dispatch functions,provided the financial results and other IR news email service, and posted asummary of major financial performance data and related explanations on

Briefing session for individual
investors (Sep.2018)

the website.

Case 2
Briefing on business results held for institutional
investors

Group news

We also held briefing sessions for individual investors and visited the

Local communities and authorities

We also issue a newsletter on activities conducted by ourbases, organize plant tours for local residents, and give
support to local cultural and sports promotion as a means ofLocalcommunities
and authorities

Local communities and authorities• Plant tours• Community dialogues• Employees' participation in local communities' activities• Provision of a class-on-demand

fostering communication with local communities.

Business
partners

We also contribute to local community through welfarerelated and other activities.

Great East Japan Earthquake
reconstruction aid activity (Head Office,Showa Denko K.K.)

Business partners• Self-evaluation and other opportunities/CSR visits• Purchasing activities

Case 3Showa Denko HD Yamagata's employees
participate “Higashine Sakuranbo
Marathon” as volunteers every year.
(Jun.2017)

Employees and their families

The Showa Denko Group dispatches a range of information toGroup employees.
The Showa Denko Group also fosters good communication
with employees by conducting employee surveys andproviding a corporate ethics hotline service.
Self-assessment results, questionnaire, and CSR visit
reportingPlant tours(Higashinagahara Plant, Showa Denko K.K.)

42

S HOWA DENKO R EP ORT 2 O18

We also organize tours of Group facilities for employees’
families to help them deepen their understanding of theGroup. Furthermore, in 2018, we published a special corporate
brochure for the families of employees.

Family tour (Yokohama Plant, Showa Denko K.K.)(August.2017)

S HOWA DENKO R EP OR T 2 O18

43

About Showa Denko

CSR

Governance

CSR Management of
Showa Denko

Financial

Stakeholder
communications

Highlights of
CSR Activities

Responsible Care

CSR procurement

Human Rights andLabor Practice

Stakeholder communications
Let us introduce specific examples of communication with stakeholders.

Stakeholder communications
The Showa Denko Group wants to be a company that fulfills our social responsibilities for all stakeholders and a company that is trusted and appreciatedCase 1by them. We will clarify our responsibilities for all stakeholders, understand their expectations and issues regarding our group through communication,

Communicated with shareholders and investors

and reflect the results in our corporate activities.
We position the general meeting of shareholders as the golden opportunity
for communication with shareholders. In order for more shareholders to
exercise their voting rights, we enabled the shareholders who were not able
to attend the meeting to exercise their votes by means of mail or the Internet.

Customers

For institutional investors and securities analysts in Japan, we held

• News releases• Trade shows• Showa Denko reports/Product brochures• Website• Plant tours and other opportunities

briefing sessions on our financial results and progress with the management
plans and major businesses, while also responding to individual inquiries
For institutional investors and shareholders outside Japan, we fostered
the disclosure of information in English to ensure fair disclosure. The
president and CFO also visited Europe, North America, and Asia to explain

SDK's booth atInternepcon Japan

Employees and their families• Group news (paper and web)• Communication via intranet• Employee surveys• Corporate Ethics Hotline• Labor management consultations

the financial results and management plans directly to them.

Shareholders and investors• Shareholders’ meetings• Financial results and business briefings• Briefing session for investors• Reports to shareholders

Customers

Employees andtheir families

Exhibited graphic panels at thelobby of general meeting ofshareholders (Mar.2018)

and questions.

The Showa
Denko Group

Shareholders
and investors

branches of securities firms to provide explanations to these investors.
Moreover, we expanded the online information dispatch functions,provided the financial results and other IR news email service, and posted asummary of major financial performance data and related explanations on

Briefing session for individual
investors (Sep.2018)

the website.

Case 2
Briefing on business results held for institutional
investors

Group news

We also held briefing sessions for individual investors and visited the

Local communities and authorities

We also issue a newsletter on activities conducted by ourbases, organize plant tours for local residents, and give
support to local cultural and sports promotion as a means ofLocalcommunities
and authorities

Local communities and authorities• Plant tours• Community dialogues• Employees' participation in local communities' activities• Provision of a class-on-demand

fostering communication with local communities.

Business
partners

We also contribute to local community through welfarerelated and other activities.

Great East Japan Earthquake
reconstruction aid activity (Head Office,Showa Denko K.K.)

Business partners• Self-evaluation and other opportunities/CSR visits• Purchasing activities

Case 3Showa Denko HD Yamagata's employees
participate “Higashine Sakuranbo
Marathon” as volunteers every year.
(Jun.2017)

Employees and their families

The Showa Denko Group dispatches a range of information toGroup employees.
The Showa Denko Group also fosters good communication
with employees by conducting employee surveys andproviding a corporate ethics hotline service.
Self-assessment results, questionnaire, and CSR visit
reportingPlant tours(Higashinagahara Plant, Showa Denko K.K.)

42

S HOWA DENKO R EP ORT 2 O18

We also organize tours of Group facilities for employees’
families to help them deepen their understanding of theGroup. Furthermore, in 2018, we published a special corporate
brochure for the families of employees.

Family tour (Yokohama Plant, Showa Denko K.K.)(August.2017)

S HOWA DENKO R EP OR T 2 O18

43

About Showa Denko

Governance

Financial

CSR

CSR Management of
Showa Denko

Stakeholder
communications

取引先とのかかわり

Responsible Care

Highlights of
CSR Activities

人権・労働慣行

Highlights of CSR Activities“CAN to CAN” recycling
Presently, Showa Aluminum Can Recycling Center Co., Ltd. has sites

Denko Group. To maintain and even increase the number of cansto collect, sort, and press aluminum cans in Oyama and Hikone (Shiga

collected, we are continuing to conduct employee awareness-raising

Prefecture). The pressed cans are then melted, cast, and rolled intoand educational activities while asking external organizations including

new aluminum cans by Showa Aluminum Can Corp (“CAN to CAN”

partner companies to cooperate in the collection of cans.

recycling).
Aluminum cans are recycled as a CSR activity unique to the Showa

Flow for aluminum can recycling

Recycling only one material makes the process easier.
Coils are madefor aluminumcans.

(Top Right) Futo Elementary school, Ito City,Shizuoka Prefecture(Left, Lower Right) Asunaro, Nasukarasuyama City, Tochigi Prefecture

BeveragemakersConsumers

Collect

Melted,Cast

Sort, Press

Showa Aluminum Can
Recycling Center Co., Ltd. andothers compress the cansafter removing steel cans andother foreign matter.

Interaction with Stakeholders

RolledCans are melted at a hightemperature after the removalof iron, glass, stones, and sand,and the melted aluminum isthen cast into aluminum metal.

Rolled aluminum plates are sent
to aluminum canmanufacturing facilities

New aluminum cans

Showa Aluminum Can
Co., Ltd. and others
compress

Example: Aluminum can recycling activity

Recycling activity continued over 40 years▶ History of aluminum recycling by the Showa Denko GroupEvent

The Showa Denko Group’s aluminum can collection activity started in1971

SAC became the first manufacturer of aluminum beer cans in Japan.

1972

SAK asked its employees to recycle aluminum cans.

1973

The first president of SAC led the establishment of an association tocollect aluminum cans (presently Japan Aluminum Can Recycling
Association).

1981

SAK’s two sites in Sakai and Oyama began collecting empty aluminumcans from local residents who volunteered to participate in the activity.

1990

SAK began to conduct the aluminum can recycling activity on acompany-wide basis.

1995

SAC established Showa Aluminum Can Recycling Center Co., Ltd. for “CAN
to CAN” recycling.

2001

SAK was merged with Showa Denko K.K. and SAK’s aluminum canrecycling activity was expanded to the sites and affiliates of the former
Showa Denko K.K.

2013

Received commendation from the Japanese Minister of Economy, Tradeand Industry for contribution to the promotion of the 3Rs.

1972, when the former Showa Aluminum Corp. (SAK) asked employees
to recycle aluminum cans. Subsequently, in 1981, SAK beganpurchasing aluminum cans directly from local residents at two sites in
Oyama (Tochigi Prefecture) and Sakai (Osaka Prefecture) and in 1990
expanded the activity to the head office and all its plants. Meanwhile,
Showa Aluminum Can Corp. (SAC) founded Showa Aluminum Can
Recycling Center Co., Ltd. in 1995 to foster the recycling of aluminumcans as a business. After SAK was merged with Showa Denko K.K. in
2001, the recycling activity was expanded across the Group and in2013 we were commended by the Japanese Minister of Economy,
Trade and Industry for our contribution to the promotion of the 3Rs

Benefitsof recyclingaluminum cans
The recycling ofaluminum cansprovides thefollowing benefits:

44

S HOWA DENKO R EP ORT 2 O18

1Energyconservation

2

Waste
reduction

3

Resource
savingBy recycling collected aluminum cans into aluminum metal, you can save 97%

Stakeholder's

VOICEJapan Aluminum Can Recycling Association

In Japan, beverage aluminum cans began to be produced in
1971, when there was no aluminum can collection channels.
However, based on the recognition that aluminum cans should
not be wasted and should instead be used as a precious
resource, an association to recycle aluminum cans wasestablished in 1973 under the leadership of the first presidentof Showa Aluminum Can Corp. This marked the beginning of
the Japan Aluminum Can Recycling Association.
Aluminum cans are recycled to save resources and energy.
In 1977, when we began conducting surveys for aluminum
recycling, the aluminum can recycling rate was as low as 17.2%.
However, the rate increased to 80% in 2000 and 90% in 2005
as a result of a range of recycling promotion efforts. Presently,
lots of people participate in the recycling of aluminum cans,

Executive managing director
Mr. Natsuki Moriguchi

partially because the cans are traded formoney and the proceeds can be used forthe activities of their organizations but
also because it is widely recognized thatrecycling contributes to waste reduction
and the effective use of resources.
The Japan Aluminum Can Recycling Association will continue
to support recycling in the hope that even more people will
participate in the activity.
As for the Showa Denko Group’s activities, I think that there aremany people who do not know that the Group manufactures
aluminum cans and conducts aluminum can recycling
activities. I would encourage the Group to publicize these facts
more proactively.

Comments from employees participating in the recycling activityof the energy that would be used for the manufacture of aluminum metal frombauxite. The amount of energy saved is roughly equivalent to the amount ofelectricity consumed by Japanese households over a 15-day period.

About 70% of used aluminum cans are recycled into new aluminum cans.

Recycling helps reduce the amount of bauxite used for aluminum
manufacturing.

The Osaka Branch of Showa Denko K.K. is located in a business
district and all its employees commute to the branch by train.
The team members in charge of the activity at the branch haveall proposed ideas to increase the employee participation rate
and the number of aluminum cans collected. For example, we
asked the beverage vendor to make more canned beverages
available for sale via the vending machines installed at thebranch. We also regularly held meetings to exchange information
about the recycling activity and collected the empty cans ofbeverages drunk by participants in the meetings for recycling.
(Osaka Branch of Showa Denko K.K.)

Showa Denko Aluminum Trading K.K. has increased therate of employees participating in its recycling activity
and the number of aluminum cans collected by sending
emails from the in-house aluminum recycling promotion
secretariat to all employees to encourage them toparticipate in the activity while also asking neighboring
companies for their understanding and cooperation
regarding the recycling. We will continue to make aconcerted effort for the recycling.
(Showa Denko Aluminum Trading K.K.)

S HOWA DENKO R EP OR T 2 O18

45

About Showa Denko

Governance

Financial

CSR

CSR Management of
Showa Denko

Stakeholder
communications

取引先とのかかわり

Responsible Care

Highlights of
CSR Activities

人権・労働慣行

Highlights of CSR Activities“CAN to CAN” recycling
Presently, Showa Aluminum Can Recycling Center Co., Ltd. has sites

Denko Group. To maintain and even increase the number of cansto collect, sort, and press aluminum cans in Oyama and Hikone (Shiga

collected, we are continuing to conduct employee awareness-raising

Prefecture). The pressed cans are then melted, cast, and rolled intoand educational activities while asking external organizations including

new aluminum cans by Showa Aluminum Can Corp (“CAN to CAN”

partner companies to cooperate in the collection of cans.

recycling).
Aluminum cans are recycled as a CSR activity unique to the Showa

Flow for aluminum can recycling

Recycling only one material makes the process easier.
Coils are madefor aluminumcans.

(Top Right) Futo Elementary school, Ito City,Shizuoka Prefecture(Left, Lower Right) Asunaro, Nasukarasuyama City, Tochigi Prefecture

BeveragemakersConsumers

Collect

Melted,Cast

Sort, Press

Showa Aluminum Can
Recycling Center Co., Ltd. andothers compress the cansafter removing steel cans andother foreign matter.

Interaction with Stakeholders

RolledCans are melted at a hightemperature after the removalof iron, glass, stones, and sand,and the melted aluminum isthen cast into aluminum metal.

Rolled aluminum plates are sent
to aluminum canmanufacturing facilities

New aluminum cans

Showa Aluminum Can
Co., Ltd. and others
compress

Example: Aluminum can recycling activity

Recycling activity continued over 40 years▶ History of aluminum recycling by the Showa Denko GroupEvent

The Showa Denko Group’s aluminum can collection activity started in1971

SAC became the first manufacturer of aluminum beer cans in Japan.

1972

SAK asked its employees to recycle aluminum cans.

1973

The first president of SAC led the establishment of an association tocollect aluminum cans (presently Japan Aluminum Can Recycling
Association).

1981

SAK’s two sites in Sakai and Oyama began collecting empty aluminumcans from local residents who volunteered to participate in the activity.

1990

SAK began to conduct the aluminum can recycling activity on acompany-wide basis.

1995

SAC established Showa Aluminum Can Recycling Center Co., Ltd. for “CAN
to CAN” recycling.

2001

SAK was merged with Showa Denko K.K. and SAK’s aluminum canrecycling activity was expanded to the sites and affiliates of the former
Showa Denko K.K.

2013

Received commendation from the Japanese Minister of Economy, Tradeand Industry for contribution to the promotion of the 3Rs.

1972, when the former Showa Aluminum Corp. (SAK) asked employees
to recycle aluminum cans. Subsequently, in 1981, SAK beganpurchasing aluminum cans directly from local residents at two sites in
Oyama (Tochigi Prefecture) and Sakai (Osaka Prefecture) and in 1990
expanded the activity to the head office and all its plants. Meanwhile,
Showa Aluminum Can Corp. (SAC) founded Showa Aluminum Can
Recycling Center Co., Ltd. in 1995 to foster the recycling of aluminumcans as a business. After SAK was merged with Showa Denko K.K. in
2001, the recycling activity was expanded across the Group and in2013 we were commended by the Japanese Minister of Economy,
Trade and Industry for our contribution to the promotion of the 3Rs

Benefitsof recyclingaluminum cans
The recycling ofaluminum cansprovides thefollowing benefits:

44

S HOWA DENKO R EP ORT 2 O18

1Energyconservation

2

Waste
reduction

3

Resource
savingBy recycling collected aluminum cans into aluminum metal, you can save 97%

Stakeholder's

VOICEJapan Aluminum Can Recycling Association

In Japan, beverage aluminum cans began to be produced in
1971, when there was no aluminum can collection channels.
However, based on the recognition that aluminum cans should
not be wasted and should instead be used as a precious
resource, an association to recycle aluminum cans wasestablished in 1973 under the leadership of the first presidentof Showa Aluminum Can Corp. This marked the beginning of
the Japan Aluminum Can Recycling Association.
Aluminum cans are recycled to save resources and energy.
In 1977, when we began conducting surveys for aluminum
recycling, the aluminum can recycling rate was as low as 17.2%.
However, the rate increased to 80% in 2000 and 90% in 2005
as a result of a range of recycling promotion efforts. Presently,
lots of people participate in the recycling of aluminum cans,

Executive managing director
Mr. Natsuki Moriguchi

partially because the cans are traded formoney and the proceeds can be used forthe activities of their organizations but
also because it is widely recognized thatrecycling contributes to waste reduction
and the effective use of resources.
The Japan Aluminum Can Recycling Association will continue
to support recycling in the hope that even more people will
participate in the activity.
As for the Showa Denko Group’s activities, I think that there aremany people who do not know that the Group manufactures
aluminum cans and conducts aluminum can recycling
activities. I would encourage the Group to publicize these facts
more proactively.

Comments from employees participating in the recycling activityof the energy that would be used for the manufacture of aluminum metal frombauxite. The amount of energy saved is roughly equivalent to the amount ofelectricity consumed by Japanese households over a 15-day period.

About 70% of used aluminum cans are recycled into new aluminum cans.

Recycling helps reduce the amount of bauxite used for aluminum
manufacturing.

The Osaka Branch of Showa Denko K.K. is located in a business
district and all its employees commute to the branch by train.
The team members in charge of the activity at the branch haveall proposed ideas to increase the employee participation rate
and the number of aluminum cans collected. For example, we
asked the beverage vendor to make more canned beverages
available for sale via the vending machines installed at thebranch. We also regularly held meetings to exchange information
about the recycling activity and collected the empty cans ofbeverages drunk by participants in the meetings for recycling.
(Osaka Branch of Showa Denko K.K.)

Showa Denko Aluminum Trading K.K. has increased therate of employees participating in its recycling activity
and the number of aluminum cans collected by sending
emails from the in-house aluminum recycling promotion
secretariat to all employees to encourage them toparticipate in the activity while also asking neighboring
companies for their understanding and cooperation
regarding the recycling. We will continue to make aconcerted effort for the recycling.
(Showa Denko Aluminum Trading K.K.)

S HOWA DENKO R EP OR T 2 O18

45

Governance

About Showa Denko

Financial

CSR

CSR Management of
Showa Denko

Stakeholder
communications

Highlights of
CSR Activities

取引先とのかかわり

Responsible Care

人権・労働慣行

Highlights of CSR Activities
Environmental

SafetyThe Showa Denko Group promotes various measures to reducegreenhouse gas emissions and energy consumption as part of its efforts
to combat global warming and support resource conservation. Moreover,to prevent air, water, and soil pollution, we are working to reduce therelease of chemical substances by fuel conversion and improvement ofAs an entity engaged in the chemical industry, the Showa Denko

TOPIC

activities to prevent occupational accidents, equipment-related

Given the highest commendation by Tochigi
Prefecture as a Marronnier ECO plant

the manufacturing process while also decreasing the generation of waste

The Oyama Plant of Showa Denko K.K. received the highest

by fostering reuse and recycling. We are thereby continuing to achievecommendation from Tochigi Prefecture when it was named azero emissions (meaning that waste sent to final landfill is 1% or less of“Marronnier ECO plant.”* The Plant received the endorsement inrecognition of its initiative to introduce highly efficient devices
and energy-saving equipment and social contribution activities
conducted in cooperation with local communities. The Plant willcontinue to proactively conduct environmental protection activities.

total waste generated).
▶Discharged amounts of greenhouse gases (2017 Showa Denko Group)
CO₂ (Energy source origin)

2,591kt-CO₂
Total
₂
100kt-CO 2,746
55kt-CO₂
kt-CO ₂CO₂ (Non-energy source origin)
Other 6 GHGs

▶ Rate of final landfill of industrial waste (Showa Denko Group)

TOPIC

Group’s first priority is safety. We are continuing the Active Safety* Marronnier ECO
plant: Among the Eco
Keeper plants, Tochigi
Prefecture names local
plants that implement
outstanding measuresfor environmental
conservation “Marronnier
ECO plants.”

Showa Denko Electronics K.K. received the 41nd JCIA Safety Award in▶︎Trends infrequency rate of lost-time injuries

2.0
1.58

1.66

1.61

0.76

0.81

1.63

1.66

0.88

0.81

1.5

0.5
0.0

0.38%

recognition of its excellent safety record. The JCIA gives this award to● Showa Denko● Chemical Industries● Showa Denko Group* ● All Industries

1.0

Commendation ceremony (Feb. 2018)

Granted the Safety Award by the Japan Chemical
Industry Association (JCIA)

incidents, and environmental problems.

0.82

business establishments that conduct exemplary voluntary activities
for industrial safety and health in the chemical industry. Recipients of
the award are selected from a large field of candidates, first throughdocument screening and then through on-site inspections andexpert deliberations.

0.43
0.25

0.22
0.12
2013

0.24
2014

0.13

0.15
2015

0.39
0.22

0.15
2016

2017 (YEAR)*Scope of Group companies (As of December 2017)
Tsurusaki Kyodo Doryoku K.K., Showa Denko Ceramics Co.,Ltd. , Shinshu Showa K.K. ,Showa Denko Packaging Co., Ltd. , Showa Aluminum Can Corp., Showa Denko Sakai
Aluminum K.K., Showa Denko Electronics K.K., Union Showa K.K., Niigata Showa K.K.,
Showa Aluminum Can Recycling Center, HIPACK Co., Ltd., Showa Denko Gas Products
Co., Ltd., Clean-S Showa K.K., Nippon Polytech Corp., Showa Denko Kenso K.K., Showa
Fine Ceramics Co., Ltd. , Showa Denko HD Yamagata K.K., Fuyo Perlite Co., Ltd. and
SunAllomer.Ltd.

Commendation ceremony (May. 2017)

SocialCSR procurement

The Showa Denko Group is working to build relationships oftrust with stakeholders. For example, we are proactively holding
chemistry experiment classes for children, who are the rising
generation, as well as factory tours as a means of contributing to

TOPIC
Class-on-demand

Our CSR procurement aims to mutually improve the corporate value of both our business partners and Showa Denko by sharing with them andrequesting their compliance with the Showa Denko Group CSR Procurement Guidelines (http://www.sdk.co.jp/english/about/procurment/csr.html). The
guidelines provide specific CSR activities that we request our business partners to conduct. In order to confirm their compliance with the guidelines, inlocal communities through our technologies, human resources, andThe Showa Denko Group’s bases provide local children with classes

2017 we continued performing three activities: asking business partners to assess their own CSR activities (“self-assessments”), visiting them for inspection

equipment.

on demand and hands-on experiment demonstrations as well as
hosting interns.
Employees of the Chichibu Plant of Showa Denko K.K. visited a
local elementary school in November 2017 to provide third-graderswith a class on demand.

purposes (“CSR visits”), and doing follow-up checks on their improvement (“follow-up”).

We are also implementing measures to promote diversity toprovide all employees of the Group with workplaces where diverse
values are respected and all members can work with vigor.

▶ Ratio of handicapped employees (2017, Showa Denko K.K.)

2.64%

The employees introduced Showa Denko and the products
manufactured by the Chichibu Plant, and explained how thecompany’s products were used in daily life in an easy-to-understandmanner. The children then participated in an experiment in which
the Plant’s products were used.

Quality Assurance
The Showa Denko Group is committed to providing “products
and services that are useful and safe and exceed our customers’
expectations.” To this end, we organically and systematically conduct(%)

activities to ensure product safety so that customers can use our

250

products with peace of mind. Throughout the life cycle of our
products, from the stages of design, development, marketing,manufacturing, and sales to after-sale service, we work to ensure thesafety of our products by taking a risk-based approach. Specifically, we▶ Number of female managers and its ratio (2017, Showa Denko K.K.)
Number of female
managers

28

46

S HOWA DENKO R EP ORT 2 O18

do this by identifying and reducing risks for a range of items related tothe products, including how our customers use and dispose of them,

Ratio

3.72

%

▶︎Trends in annual numbers of complaints(With a score of 100 representing the number of claims in 2015)

200

205
179

150
100

100

71

48

50

in addition to confirming their chemical safety.
0Class-on-demand (Nov.2017. Chichibu Plant, Showa Denko K.K.)

2013

2014

2015
Reference year

2016

2017 (YEAR)S HOWA DENKO R EP OR T 2 O18

47

Governance

About Showa Denko

Financial

CSR

CSR Management of
Showa Denko

Stakeholder
communications

Highlights of
CSR Activities

取引先とのかかわり

Responsible Care

人権・労働慣行

Highlights of CSR Activities
Environmental

SafetyThe Showa Denko Group promotes various measures to reducegreenhouse gas emissions and energy consumption as part of its efforts
to combat global warming and support resource conservation. Moreover,to prevent air, water, and soil pollution, we are working to reduce therelease of chemical substances by fuel conversion and improvement ofAs an entity engaged in the chemical industry, the Showa Denko

TOPIC

activities to prevent occupational accidents, equipment-related

Given the highest commendation by Tochigi
Prefecture as a Marronnier ECO plant

the manufacturing process while also decreasing the generation of waste

The Oyama Plant of Showa Denko K.K. received the highest

by fostering reuse and recycling. We are thereby continuing to achievecommendation from Tochigi Prefecture when it was named azero emissions (meaning that waste sent to final landfill is 1% or less of“Marronnier ECO plant.”* The Plant received the endorsement inrecognition of its initiative to introduce highly efficient devices
and energy-saving equipment and social contribution activities
conducted in cooperation with local communities. The Plant willcontinue to proactively conduct environmental protection activities.

total waste generated).
▶Discharged amounts of greenhouse gases (2017 Showa Denko Group)
CO₂ (Energy source origin)

2,591kt-CO₂
Total
₂
100kt-CO 2,746
55kt-CO₂
kt-CO ₂CO₂ (Non-energy source origin)
Other 6 GHGs

▶ Rate of final landfill of industrial waste (Showa Denko Group)

TOPIC

Group’s first priority is safety. We are continuing the Active Safety* Marronnier ECO
plant: Among the Eco
Keeper plants, Tochigi
Prefecture names local
plants that implement
outstanding measuresfor environmental
conservation “Marronnier
ECO plants.”

Showa Denko Electronics K.K. received the 41nd JCIA Safety Award in▶︎Trends infrequency rate of lost-time injuries

2.0
1.58

1.66

1.61

0.76

0.81

1.63

1.66

0.88

0.81

1.5

0.5
0.0

0.38%

recognition of its excellent safety record. The JCIA gives this award to● Showa Denko● Chemical Industries● Showa Denko Group* ● All Industries

1.0

Commendation ceremony (Feb. 2018)

Granted the Safety Award by the Japan Chemical
Industry Association (JCIA)

incidents, and environmental problems.

0.82

business establishments that conduct exemplary voluntary activities
for industrial safety and health in the chemical industry. Recipients of
the award are selected from a large field of candidates, first throughdocument screening and then through on-site inspections andexpert deliberations.

0.43
0.25

0.22
0.12
2013

0.24
2014

0.13

0.15
2015

0.39
0.22

0.15
2016

2017 (YEAR)*Scope of Group companies (As of December 2017)
Tsurusaki Kyodo Doryoku K.K., Showa Denko Ceramics Co.,Ltd. , Shinshu Showa K.K. ,Showa Denko Packaging Co., Ltd. , Showa Aluminum Can Corp., Showa Denko Sakai
Aluminum K.K., Showa Denko Electronics K.K., Union Showa K.K., Niigata Showa K.K.,
Showa Aluminum Can Recycling Center, HIPACK Co., Ltd., Showa Denko Gas Products
Co., Ltd., Clean-S Showa K.K., Nippon Polytech Corp., Showa Denko Kenso K.K., Showa
Fine Ceramics Co., Ltd. , Showa Denko HD Yamagata K.K., Fuyo Perlite Co., Ltd. and
SunAllomer.Ltd.

Commendation ceremony (May. 2017)

SocialCSR procurement

The Showa Denko Group is working to build relationships oftrust with stakeholders. For example, we are proactively holding
chemistry experiment classes for children, who are the rising
generation, as well as factory tours as a means of contributing to

TOPIC
Class-on-demand

Our CSR procurement aims to mutually improve the corporate value of both our business partners and Showa Denko by sharing with them andrequesting their compliance with the Showa Denko Group CSR Procurement Guidelines (http://www.sdk.co.jp/english/about/procurment/csr.html). The
guidelines provide specific CSR activities that we request our business partners to conduct. In order to confirm their compliance with the guidelines, inlocal communities through our technologies, human resources, andThe Showa Denko Group’s bases provide local children with classes

2017 we continued performing three activities: asking business partners to assess their own CSR activities (“self-assessments”), visiting them for inspection

equipment.

on demand and hands-on experiment demonstrations as well as
hosting interns.
Employees of the Chichibu Plant of Showa Denko K.K. visited a
local elementary school in November 2017 to provide third-graderswith a class on demand.

purposes (“CSR visits”), and doing follow-up checks on their improvement (“follow-up”).

We are also implementing measures to promote diversity toprovide all employees of the Group with workplaces where diverse
values are respected and all members can work with vigor.

▶ Ratio of handicapped employees (2017, Showa Denko K.K.)

2.64%

The employees introduced Showa Denko and the products
manufactured by the Chichibu Plant, and explained how thecompany’s products were used in daily life in an easy-to-understandmanner. The children then participated in an experiment in which
the Plant’s products were used.

Quality Assurance
The Showa Denko Group is committed to providing “products
and services that are useful and safe and exceed our customers’
expectations.” To this end, we organically and systematically conduct(%)

activities to ensure product safety so that customers can use our

250

products with peace of mind. Throughout the life cycle of our
products, from the stages of design, development, marketing,manufacturing, and sales to after-sale service, we work to ensure thesafety of our products by taking a risk-based approach. Specifically, we▶ Number of female managers and its ratio (2017, Showa Denko K.K.)
Number of female
managers

28

46

S HOWA DENKO R EP ORT 2 O18

do this by identifying and reducing risks for a range of items related tothe products, including how our customers use and dispose of them,

Ratio

3.72

%

▶︎Trends in annual numbers of complaints(With a score of 100 representing the number of claims in 2015)

200

205
179

150
100

100

71

48

50

in addition to confirming their chemical safety.
0Class-on-demand (Nov.2017. Chichibu Plant, Showa Denko K.K.)

2013

2014

2015
Reference year

2016

2017 (YEAR)S HOWA DENKO R EP OR T 2 O18

47

About Showa Denko

CSR

Governance

CSR Management of
Showa Denko

Financial

Stakeholder
communications

Highlights of
CSR Activities

Responsible Care

CSR procurement

Human Rights andLabor Practice

Responsible Care

Responsible Care Management
Responsible Care Action Guidelines

Auditing structure

The PDCA cycle

Showa Denko established the “Responsible Care Action Guidelines” inWhen the RC Charter was amended in 2014,

The Showa Denko Group works to achieve continuous improvement

March 1995. These guidelines stipulate management policies related

we re-signed, making clear our willingness

in its Responsible Care activities through the plan-do-check-act

to the environment, safety, and health. Our Group promotes activities

to promote RC activities through global(PDCA) cycle of formulating Responsible Care activity plans (plan),based on these action guidelines.

collaboration.

implementing these (do), auditing and evaluating the results (check),and reflecting these via management review in the next round of

In addition, we also signed the Responsible Care Global Charter in
2005, pledging our support for and implementation of the charter.
Responsible Care Global
Charter Signatory Certificate

Showa Denko and its major Group companies conduct audits as
described below for their worksites to assess and improve their
Responsible Care activities.

Self-audit

objectives and activity plans (act).

Workplaces of Showa Denko and its major Group companies evaluate▶ The PDCA cycle

their own Responsible Care systems and implementation statuses
based on a checklist, so as to reflect the results in the following year's
targets and action plans in order to move forward with continuous

Responsible Care Action Guidelines(Showa Denko Group Action Guidelines)
1. Throughout the entire life cycle of products, we shall make our best efforts toreview and improve business activities continuously from the view points ofensuring safety & health and protecting the environment.
2. We shall make our best effor ts towards sustainable development byharmonizing our production activities with the global environment, not only
through conventional approaches to environmental preservation, but also
through promotion of changing raw materials, energy conservation, waste
reduction and recycling, reductions in the release of chemical substances, etc.
3. In the development of new products and businesses and in the establishment,
enlargement, and renovation of facilities, we shall undertake our best efforts toensure safety and health and to protect the environment.
4. We shall promote R&D and develop technologies that will contribute to theimprovement of safety and health and to the protection of the environment. We
shall also promote the marketing of alternative or new products.

5. We shall enrich risk assessments and risk management concerning the effects ofthe products and materials we handle on safety, health, and the environment,
and we shall provide information on the safe use and handling of our products
to our stakeholders as well.
6. In overseas business activities, technology transfer, and international trading ofchemical products, we shall give full consideration to ensuring safety and health,and protecting the environment.
7. We shall comply with international rules, domestic laws and regulations, andmake our best efforts to cooperate with the relevant international organizations,domestic and foreign administrative bodies, etc.
8. We shall participate proactively in various activities related to the ensuring ofsafety & health and environmental protection, and make our best efforts tocommunicate with society to achieve better understanding and trust.

Responsible Care promotion system
The Responsible Care Promotion Council is placed under the CSR

At overseas Group companies (manufacturing) as well, we have

Committee to have preliminary deliberations on important issues

identified achievements relating to Responsible Care and provided

concerning Responsible Care activities.

local guidance to expand the target scope.

improvement.

Formulating
management
policies andobjectives

A

P

Management
review

Activityplans

Continual
improvement

CInternal audit,
evaluation of
results

D
Implementation

Education system

The Showa Denko Group continues improving its management
to management system standards including those for environment,

preservation and compliance when they join the company or

quality, and industrial safety and hygiene.

are promoted. Internal auditors for environmental management

See our website for a list of sites that obtained certifications

systems and occupational safety and health management systems

regarding environmental systems, quality management systems, orare also provided with annual training. In this way, we ensure that all

occupational health and safety management systems.

employees are familiar with Responsible Care.

Action Plan
Every two or three years, the Showa Denko Group establishes amedium-term Responsible Care action plan, which is then used as thebasis for annual action plans during the period covered.
All workplaces draft detailed action plans based on the

Responsible Care
Promotion Council

comprehensive plan, tailored to local conditions and circumstances,

Aluminum Can Recycling
Promotion Subcommittee

and promote Responsible Care.
We post the action plan on our website. We will continue topromote active engagement in these efforts to meet our targets.

CSR Department

Responsible Care training for new manufacturing section managers(Isesaki Plant Showa Denko K.K. Dec.2017)

Environment & Safety Office

President & CEO

Work sites ( Production sites, R&D bases, etc., of the group )Board of Auditors

Divisions etc. ( Divisions Branches, Headquarters, etc. )Chart for reference : Each worksite defines its own system

S HOWA DENKO R EP ORT 2 O18

Management system

education that focuses on occupational safety, environment

Safety Measures Committee

48

The CSR Committee deliberates these results to reflect them in thepolicies, goals and plans of the entire company and Group companies.

system through receiving and maintaining certification of conformity▶ Responsible Care Promotion system

PromotionCouncils etc.

offices and business divisions).

The Showa Denko Group, employees receive Responsible Care

Business Development Center and 14 major Group companies.

Manager in overall
Charge of
Responsible Careworksites to both, make evaluations and improvements regarding
2017, we audited 33 workplaces (including our headquarters, branchheadquarters, 13 business divisions, 15 workplaces, 3 branches, theSystem of worksites

The Environment & Safety Office of the CSR Department audits
Responsible Care at Showa Denko and its major group companies. In

As of February 2017, we are promoting Responsible Care at our

CSR Committee

Worksite auditing

Persons in charge of themes( Subcommittees )Secretariat ( Section of environment & safety )or the Manager in charge of environment & safety* Group Companies
Tsurusaki Kyodo Doryoku K.K. Showa Denko Ceramics Co., Ltd., Showa Denko
Packaging Co., Ltd., Showa Aluminum Can Corp., Showa Denko Sakai Aluminum
Co.,Ltd., Showa Denko Electronics K.K. Union Showa K.K. Niigata Showa K.K. Showa
Aluminum Can Recycling Center, HI-PACK Co., LTD., Showa Denko Gas Products Co.,
Ltd., Clean-S Showa Co., Ltd. Shinshu Showa K.K. and Frontier Carbon Corp

S HOWA DENKO R EP OR T 2 O18

49

About Showa Denko

CSR

Governance

CSR Management of
Showa Denko

Financial

Stakeholder
communications

Highlights of
CSR Activities

Responsible Care

CSR procurement

Human Rights andLabor Practice

Responsible Care

Responsible Care Management
Responsible Care Action Guidelines

Auditing structure

The PDCA cycle

Showa Denko established the “Responsible Care Action Guidelines” inWhen the RC Charter was amended in 2014,

The Showa Denko Group works to achieve continuous improvement

March 1995. These guidelines stipulate management policies related

we re-signed, making clear our willingness

in its Responsible Care activities through the plan-do-check-act

to the environment, safety, and health. Our Group promotes activities

to promote RC activities through global(PDCA) cycle of formulating Responsible Care activity plans (plan),based on these action guidelines.

collaboration.

implementing these (do), auditing and evaluating the results (check),and reflecting these via management review in the next round of

In addition, we also signed the Responsible Care Global Charter in
2005, pledging our support for and implementation of the charter.
Responsible Care Global
Charter Signatory Certificate

Showa Denko and its major Group companies conduct audits as
described below for their worksites to assess and improve their
Responsible Care activities.

Self-audit

objectives and activity plans (act).

Workplaces of Showa Denko and its major Group companies evaluate▶ The PDCA cycle

their own Responsible Care systems and implementation statuses
based on a checklist, so as to reflect the results in the following year's
targets and action plans in order to move forward with continuous

Responsible Care Action Guidelines(Showa Denko Group Action Guidelines)
1. Throughout the entire life cycle of products, we shall make our best efforts toreview and improve business activities continuously from the view points ofensuring safety & health and protecting the environment.
2. We shall make our best effor ts towards sustainable development byharmonizing our production activities with the global environment, not only
through conventional approaches to environmental preservation, but also
through promotion of changing raw materials, energy conservation, waste
reduction and recycling, reductions in the release of chemical substances, etc.
3. In the development of new products and businesses and in the establishment,
enlargement, and renovation of facilities, we shall undertake our best efforts toensure safety and health and to protect the environment.
4. We shall promote R&D and develop technologies that will contribute to theimprovement of safety and health and to the protection of the environment. We
shall also promote the marketing of alternative or new products.

5. We shall enrich risk assessments and risk management concerning the effects ofthe products and materials we handle on safety, health, and the environment,
and we shall provide information on the safe use and handling of our products
to our stakeholders as well.
6. In overseas business activities, technology transfer, and international trading ofchemical products, we shall give full consideration to ensuring safety and health,and protecting the environment.
7. We shall comply with international rules, domestic laws and regulations, andmake our best efforts to cooperate with the relevant international organizations,domestic and foreign administrative bodies, etc.
8. We shall participate proactively in various activities related to the ensuring ofsafety & health and environmental protection, and make our best efforts tocommunicate with society to achieve better understanding and trust.

Responsible Care promotion system
The Responsible Care Promotion Council is placed under the CSR

At overseas Group companies (manufacturing) as well, we have

Committee to have preliminary deliberations on important issues

identified achievements relating to Responsible Care and provided

concerning Responsible Care activities.

local guidance to expand the target scope.

improvement.

Formulating
management
policies andobjectives

A

P

Management
review

Activityplans

Continual
improvement

CInternal audit,
evaluation of
results

D
Implementation

Education system

The Showa Denko Group continues improving its management
to management system standards including those for environment,

preservation and compliance when they join the company or

quality, and industrial safety and hygiene.

are promoted. Internal auditors for environmental management

See our website for a list of sites that obtained certifications

systems and occupational safety and health management systems

regarding environmental systems, quality management systems, orare also provided with annual training. In this way, we ensure that all

occupational health and safety management systems.

employees are familiar with Responsible Care.

Action Plan
Every two or three years, the Showa Denko Group establishes amedium-term Responsible Care action plan, which is then used as thebasis for annual action plans during the period covered.
All workplaces draft detailed action plans based on the

Responsible Care
Promotion Council

comprehensive plan, tailored to local conditions and circumstances,

Aluminum Can Recycling
Promotion Subcommittee

and promote Responsible Care.
We post the action plan on our website. We will continue topromote active engagement in these efforts to meet our targets.

CSR Department

Responsible Care training for new manufacturing section managers(Isesaki Plant Showa Denko K.K. Dec.2017)

Environment & Safety Office

President & CEO

Work sites ( Production sites, R&D bases, etc., of the group )Board of Auditors

Divisions etc. ( Divisions Branches, Headquarters, etc. )Chart for reference : Each worksite defines its own system

S HOWA DENKO R EP ORT 2 O18

Management system

education that focuses on occupational safety, environment

Safety Measures Committee

48

The CSR Committee deliberates these results to reflect them in thepolicies, goals and plans of the entire company and Group companies.

system through receiving and maintaining certification of conformity▶ Responsible Care Promotion system

PromotionCouncils etc.

offices and business divisions).

The Showa Denko Group, employees receive Responsible Care

Business Development Center and 14 major Group companies.

Manager in overall
Charge of
Responsible Careworksites to both, make evaluations and improvements regarding
2017, we audited 33 workplaces (including our headquarters, branchheadquarters, 13 business divisions, 15 workplaces, 3 branches, theSystem of worksites

The Environment & Safety Office of the CSR Department audits
Responsible Care at Showa Denko and its major group companies. In

As of February 2017, we are promoting Responsible Care at our

CSR Committee

Worksite auditing

Persons in charge of themes( Subcommittees )Secretariat ( Section of environment & safety )or the Manager in charge of environment & safety* Group Companies
Tsurusaki Kyodo Doryoku K.K. Showa Denko Ceramics Co., Ltd., Showa Denko
Packaging Co., Ltd., Showa Aluminum Can Corp., Showa Denko Sakai Aluminum
Co.,Ltd., Showa Denko Electronics K.K. Union Showa K.K. Niigata Showa K.K. Showa
Aluminum Can Recycling Center, HI-PACK Co., LTD., Showa Denko Gas Products Co.,
Ltd., Clean-S Showa Co., Ltd. Shinshu Showa K.K. and Frontier Carbon Corp

S HOWA DENKO R EP OR T 2 O18

49

About Showa Denko

CSR

Governance

CSR Management of
Showa Denko

Financial

Stakeholder
communications

Highlights of
CSR Activities

Responsible Care

CSR procurement

Human Rights andLabor Practice

Responsible Care

Environmental Conservation
Resource use and environmental impact

Environmental Accounting
Actual values of environmental accounting for 2017 are as follows:

Actual values of environmental loads for 2017 are as follows:

OUTPUTShowa Denko K.K. only

Emissions of air pollutants

Showa Denko
K.K. only
2,175(-36)(–30Mℓ)Group companies*

1

Greenhouse gas(kt-CO2)

230Mℓ(+4Mℓ)

Internal
Utilization

SOx(t)

326(+2)4(0)NOx(t)

1,324(+69)

21(-2)

Soot and dust (t)71(+8)

1(0)JCIA PRTR-listed substances (t)145(-3)415(+173)

JCIA Toxic atmospheric pollutants (t)*2

14(+1)1(0)Waste
Reduction
Showa Denko K.K. only

Wastewater volume (kt)(+0.52Mm3)

JCIA PRTR-listed substances (t)0(0)

15(+1)

1(0)28,582(+1,962)

4,475(+742)

Showa Denko
K.K. only
0(0)JCIA PRTR-listed substances (t)Group companiesGroup
companies0(0)industrial waste discharge

8,726tRaw materials

8(0)Emission of soil pollutants

61,690t(–899t)2(+1)

Total waste discharged to outside (t)Showa Denko
Group
K.K. only
companies
24,166(+4,128) 13,145(+3,785)

Reused by third parties (t)12,729(+1,873)

8,893(+3,119)

Volume reduction by consignee (t)11,082(+2,154)

4,161(+694)

356(+102)

92(+23)(+823t)Final landfill disposal (t)*3

The figures in parentheses represent increases ordecreases relative to the previous year.

664

Capital investments and expenses
associated with resource conservation
and waste treatment

274

862

Resource
recycling

Costs associated with reducing
environmental impact in business
operations upstream and downstream,including green purchasing andrecycling of products and packaging

Administrative costs relating toenvironmental conservation, including
environmental issues training,
introduction of environmental
management systems, andenvironmental impact evaluations
Costs associated with research anddevelopment of environment friendly
products and technologies
Environmental conservation costs for
local community outreach activities notdirectly linked to business operations,such as environmental conservation
projects in communities, dialogue withresidents, and plant tours
Compensation for health damages
resulting from environmental pollution,etc.

Discharged amounts of greenhouse gases
The amount of water used2017

kt-CO2

445

402

416

million m3

336

330

358

Wastewater volume

kt

2,188

2,823

2,093

Final landfill volumes of industrial waste

kt

3,864

4,748

5,813

Grappling with water resources
The importance of water resources is globally recognized. The Showa

50

various environmental conservation activities conducted at eachand community activities.
As in the previous year, we continued to focus mainly on the0588

following three tasks in 2017: (1) development of plans for proper
management of greenery areas; (2) implementation of proactive

401

883

promotion of programs that make effective use of the uniquecharacteristics of each worksite. To address these tasks, we conductednecessary investigation and examination, and promoted specific

0

8

0

308

1,560

3,488

measures that match the locational characteristics of each worksite.

2017

SOx

326

NOx

3,522

1,324

Soot and dust

283

71

COD

786

346

Total nitrogen

607

457

Total phosphorus

51

8

Landfill disposal

19,723356

The Oyama Plant of Showa Denko K.K. participated in the Watarase Retarding Basincleanup activity.

▶ Economic benefits (million yen)

We also contribute to the safety of food and agriculture by

Energy conservation

251

manufacturing sodium hypochlorite used to ensure the safety of water

Resource recycling592

and promoting the reuse of water used for hydraulic power generation

Waste reduction

7of water at the plants by making examinations for the efficient use offor agriculture.

Other

1

Total

851

S HOWA DENKO R EP ORT 2 O18

necessary from the viewpoint of biodiversity protection from among
worksite including water resource management, greenery expansion,

3,698

plants, and is proactively implementing measures to reduce the use
water, while working to maintain and improve the quality of water

11▶ Reducing environmental impact (t)Denko Group conducts surveys on water resource-related risks at its

discharged from the plants to the environment.

0

1990
2016

Activities in 2017

measures to reduce the environmental impact of wastewater; and (3)▶ Showa Denko Group Companies outside Japan2015* Japan Business and Biodiversity Partnership: A multi-stakeholder biodiversity initiativethat consists of business entities which endorse “Action Policies of Japan Business andBiodiversity Partnership” and are implementing or planning to implement one or moreactions among them, and economic organizations, NGOs, researchers, local/national
governments and other public organizations which support those business entities'
biodiversity initiatives.

At the worksites, we select and implement tasks that are consideredTotal*1 Scope of the Showa Denko Group : Total for the 10 consolidated manufacturing subsidiaries in Japan; SunAllomer Co., Ltd., (2017-), Showa Denko Gas Products Co., Ltd., Showa Denko Ceramics Co., Ltd,.
(Toyama), Showa Aluminum Can Corp., Showa Denko Packaging Co., Ltd., Niigata Showa K.K. Nippon Polytech Corp., Showa Denko Kenso ,Co., Ltd., Showa Denko HD Yamagata K.K. and Showa Fine Ceramics Co.,
Ltd.,. GHG emissions include those for Showa Denko Electronics K.K. and Tsurusaki Kyodo Doryoku Co., Ltd., and exclude those Niigata Showa K.K. Nippon Polytech Corp., Showa Denko Kenso ,Co., Ltd., Showa
Fine Ceramics Co., Ltd., which are not required to report emissions as emitters designated under the Act on Promotion of Global Warming Countermeasures.
*2 Emissions of toxic atmospheric pollutants are included in emissions of PRTR-listed substances.
*3 Final landfill disposal: Including only waste generated from production activities during the year.

652

Capital investments and expenses

Other

Total phosphorus (t)457(-23)

associated with energy conservation
Globalenvironmental and combating global warming andozone-layer depletion
protection

Community
outreach
costs

0t(+0.49Mm3)

5.13Mm3

Total nitrogen (t)Group companiesGroup
companies
18(+14)business activities.

164

R&D
costs

54.60Mm3

COD (t)Showa Denko
K.K. only
346(-14)

and assessing the influence exerted over biodiversity by its

233

Administrative
costs(+6,194t)

Showa Denko K.K. onlyGroup companies

Emissions of water pollutants

9,199tPollution
prevention

Upstream anddown stream
costs

Showa Denko K.K. only

Water

Group
companies
570(+95)

Cost within business site

970Mℓ

Capital investments and expenses
associated with prevention of
atmospheric/water/soil pollution, noise,
vibration, odor, etc.

participating in the Japan Business and Biodiversity Partnership*

Expenses(crude oil equivalent)

Showa Denko gives due consideration to biodiversity. It is

Products

Showa Denko
Group

Basic policies▶ Environmental accounting (million yen)

Capitalinvestment

INPUT
EnergyBiodiversity Efforts

Showa Aluminum Manufacturing Philippines participated in the tree planting activity
with other companies located in the industrial park.

S HOWA DENKO R EP OR T 2 O18

51

About Showa Denko

CSR

Governance

CSR Management of
Showa Denko

Financial

Stakeholder
communications

Highlights of
CSR Activities

Responsible Care

CSR procurement

Human Rights andLabor Practice

Responsible Care

Environmental Conservation
Resource use and environmental impact

Environmental Accounting
Actual values of environmental accounting for 2017 are as follows:

Actual values of environmental loads for 2017 are as follows:

OUTPUTShowa Denko K.K. only

Emissions of air pollutants

Showa Denko
K.K. only
2,175(-36)(–30Mℓ)Group companies*

1

Greenhouse gas(kt-CO2)

230Mℓ(+4Mℓ)

Internal
Utilization

SOx(t)

326(+2)4(0)NOx(t)

1,324(+69)

21(-2)

Soot and dust (t)71(+8)

1(0)JCIA PRTR-listed substances (t)145(-3)415(+173)

JCIA Toxic atmospheric pollutants (t)*2

14(+1)1(0)Waste
Reduction
Showa Denko K.K. only

Wastewater volume (kt)(+0.52Mm3)

JCIA PRTR-listed substances (t)0(0)

15(+1)

1(0)28,582(+1,962)

4,475(+742)

Showa Denko
K.K. only
0(0)JCIA PRTR-listed substances (t)Group companiesGroup
companies0(0)industrial waste discharge

8,726tRaw materials

8(0)Emission of soil pollutants

61,690t(–899t)2(+1)

Total waste discharged to outside (t)Showa Denko
Group
K.K. only
companies
24,166(+4,128) 13,145(+3,785)

Reused by third parties (t)12,729(+1,873)

8,893(+3,119)

Volume reduction by consignee (t)11,082(+2,154)

4,161(+694)

356(+102)

92(+23)(+823t)Final landfill disposal (t)*3

The figures in parentheses represent increases ordecreases relative to the previous year.

664

Capital investments and expenses
associated with resource conservation
and waste treatment

274

862

Resource
recycling

Costs associated with reducing
environmental impact in business
operations upstream and downstream,including green purchasing andrecycling of products and packaging

Administrative costs relating toenvironmental conservation, including
environmental issues training,
introduction of environmental
management systems, andenvironmental impact evaluations
Costs associated with research anddevelopment of environment friendly
products and technologies
Environmental conservation costs for
local community outreach activities notdirectly linked to business operations,such as environmental conservation
projects in communities, dialogue withresidents, and plant tours
Compensation for health damages
resulting from environmental pollution,etc.

Discharged amounts of greenhouse gases
The amount of water used2017

kt-CO2

445

402

416

million m3

336

330

358

Wastewater volume

kt

2,188

2,823

2,093

Final landfill volumes of industrial waste

kt

3,864

4,748

5,813

Grappling with water resources
The importance of water resources is globally recognized. The Showa

50

various environmental conservation activities conducted at eachand community activities.
As in the previous year, we continued to focus mainly on the0588

following three tasks in 2017: (1) development of plans for proper
management of greenery areas; (2) implementation of proactive

401

883

promotion of programs that make effective use of the uniquecharacteristics of each worksite. To address these tasks, we conductednecessary investigation and examination, and promoted specific

0

8

0

308

1,560

3,488

measures that match the locational characteristics of each worksite.

2017

SOx

326

NOx

3,522

1,324

Soot and dust

283

71

COD

786

346

Total nitrogen

607

457

Total phosphorus

51

8

Landfill disposal

19,723356

The Oyama Plant of Showa Denko K.K. participated in the Watarase Retarding Basincleanup activity.

▶ Economic benefits (million yen)

We also contribute to the safety of food and agriculture by

Energy conservation

251

manufacturing sodium hypochlorite used to ensure the safety of water

Resource recycling592

and promoting the reuse of water used for hydraulic power generation

Waste reduction

7of water at the plants by making examinations for the efficient use offor agriculture.

Other

1

Total

851

S HOWA DENKO R EP ORT 2 O18

necessary from the viewpoint of biodiversity protection from among
worksite including water resource management, greenery expansion,

3,698

plants, and is proactively implementing measures to reduce the use
water, while working to maintain and improve the quality of water

11▶ Reducing environmental impact (t)Denko Group conducts surveys on water resource-related risks at its

discharged from the plants to the environment.

0

1990
2016

Activities in 2017

measures to reduce the environmental impact of wastewater; and (3)▶ Showa Denko Group Companies outside Japan2015* Japan Business and Biodiversity Partnership: A multi-stakeholder biodiversity initiativethat consists of business entities which endorse “Action Policies of Japan Business andBiodiversity Partnership” and are implementing or planning to implement one or moreactions among them, and economic organizations, NGOs, researchers, local/national
governments and other public organizations which support those business entities'
biodiversity initiatives.

At the worksites, we select and implement tasks that are consideredTotal*1 Scope of the Showa Denko Group : Total for the 10 consolidated manufacturing subsidiaries in Japan; SunAllomer Co., Ltd., (2017-), Showa Denko Gas Products Co., Ltd., Showa Denko Ceramics Co., Ltd,.
(Toyama), Showa Aluminum Can Corp., Showa Denko Packaging Co., Ltd., Niigata Showa K.K. Nippon Polytech Corp., Showa Denko Kenso ,Co., Ltd., Showa Denko HD Yamagata K.K. and Showa Fine Ceramics Co.,
Ltd.,. GHG emissions include those for Showa Denko Electronics K.K. and Tsurusaki Kyodo Doryoku Co., Ltd., and exclude those Niigata Showa K.K. Nippon Polytech Corp., Showa Denko Kenso ,Co., Ltd., Showa
Fine Ceramics Co., Ltd., which are not required to report emissions as emitters designated under the Act on Promotion of Global Warming Countermeasures.
*2 Emissions of toxic atmospheric pollutants are included in emissions of PRTR-listed substances.
*3 Final landfill disposal: Including only waste generated from production activities during the year.

652

Capital investments and expenses

Other

Total phosphorus (t)457(-23)

associated with energy conservation
Globalenvironmental and combating global warming andozone-layer depletion
protection

Community
outreach
costs

0t(+0.49Mm3)

5.13Mm3

Total nitrogen (t)Group companiesGroup
companies
18(+14)business activities.

164

R&D
costs

54.60Mm3

COD (t)Showa Denko
K.K. only
346(-14)

and assessing the influence exerted over biodiversity by its

233

Administrative
costs(+6,194t)

Showa Denko K.K. onlyGroup companies

Emissions of water pollutants

9,199tPollution
prevention

Upstream anddown stream
costs

Showa Denko K.K. only

Water

Group
companies
570(+95)

Cost within business site

970Mℓ

Capital investments and expenses
associated with prevention of
atmospheric/water/soil pollution, noise,
vibration, odor, etc.

participating in the Japan Business and Biodiversity Partnership*

Expenses(crude oil equivalent)

Showa Denko gives due consideration to biodiversity. It is

Products

Showa Denko
Group

Basic policies▶ Environmental accounting (million yen)

Capitalinvestment

INPUT
EnergyBiodiversity Efforts

Showa Aluminum Manufacturing Philippines participated in the tree planting activity
with other companies located in the industrial park.

S HOWA DENKO R EP OR T 2 O18

51

About Showa Denko

CSR

Governance

Financial

CSR Management of
Showa Denko

Stakeholder
communications

Highlights of
CSR Activities

Responsible Care

CSR procurement

Human Rights andLabor Practice

Responsible Care: Environmental Conservation

Global Warming Prevention Measures

TOPIC

Basic policies
greenhouse gas emissions and energy consumption as partof its efforts to combat global warming and support resource

The Tokuyama Plant of Showa Denko K.K. was commended byconservation.

Yamaguchi Prefecture as a plant with excellent anti-global warming

In particular, to reduce the environmental impact associatedcommendations to individuals and organizations that have madetrucks and increasing their loading efficiency to reduce our CO2

outstanding contributions to environmental conservation.

emissions.
also strove to reduce energy consumed for transportation byemissions, including improvement of production processes,

result, the Plant reduced its CO2 emissions by 57% relative to the2010 level. The Plant was given the commendation in recognition

increasing the shipment amount to minimize the frequency of

conversion of energy conservation activities, and modifying
equipment.

of this effort.

4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0

2,673

2,675

2,687

2,686

long-distance transportation.

its energy efficiency byreplacing its facilities withtransportation volume. This is mainly because we increased themore appropriate ones

proportion of ship transportation (on a ton-kilometer basis),in line with the reviewed

which is superior to transportation by truck in terms of per-unitbusiness plan.

energy consumption.

Showa Denko owns and operates hydroelectric power stations

2013
2005
Reference year

2014

2015

2016

at its four plants.

2017 (FY)The repair work that had been conducted since 2015 for the
long-term use of the facilities was all completed at the end of
August 2017. The total amount of electricity generated by thehydroelectric power stations in 2017 was equivalent to 25% of▶ Scope 3 GHG emissions(kt/YEAR)

労働安全

our total power consumption, up 10% from the fiscal 2016 level.

Category

The amount of emission

1

Purchased goods and services

1,743

2

Capital goods

121

3. Implementation of c-LCA*The Showa Denko Group assesses CO2 emissions across theentire life cycle of each product, encompassing not just direct

3

Fuel- and energy-related activities not include
in Scope1 and 2

412

4

Upstream transportation and distribution

25

production but also emissions during the procurement of raw

2017 (FY)2016

P55_輸送部門におけるCO₂排出量とエネルギー_0731▶ Transportation sector's CO2 emissions and energy consumption rate
■ CO2 emissions by transport sector● Unit energy consumption for transport

(kt)
35
30

(kl per million ton-km)

35

29.3

29

30
24.7

25
20

24.6

23.5
22.4

22.9

22.8

22.4

25

■ Sea
■ Rail■ Road

(％)
100
80
60

55
100
2,591

2015

▶ Ratios for use of various modes of transport (FY2016)

year on year, although CO2 emissions increased due to increased

2. Utilization of our own hydroelectric power
stations2014

In the fiscal year, per-unit energy consumption decreased

continue to increase

2,746

2013

transportation and by relocating the storage places to reduce

The Plant will proactively

3,621

415

388

100
0

increase energy efficiency and reduce environmental impact. As a

349

200

and ship transportation as well as making efficient use of large

In fiscal 2017, in addition to promoting a modal shift, we(kt-CO2)488

300

with logistics, we are promoting a modal shift from truck to rail

The Tokuyama Plant has been updating its equipment to■ 6GHGs■ Non-energy source origin■ Energy source origin

505

400

to production, sales and delivery.

The Group continued its efforts to reduce greenhouse gas▶ Trends in discharged amounts of greenhouse gases

500

entire supply chain from the procurement of materials throughThe governor of Yamaguchi Prefecture annually gives

1. Reduction of CO2 emissions

600

also committed to improving transportation efficiency across its

measures in November2017.

Activities in 2017

(million ton-km)

As a way to reduce its environmental impact, Showa Denko isCommended as a plant with excellent antiglobal warming measures

The Showa Denko Group promotes various measures to reduce▶ Freight ton-km

4. Reducing environmental impact throughsupply chain management (SCM)

20.7

32.4

1.0

1.3

57.7

66.3

38.7

78.3

CO2 emissions

Freight ton-km

Freight ton

40
20
0

3.6

5. Promoting energy saving in office
Using the tight electric power conditions after the Great20

East Japan Earthquake disaster as an opportunity, we have

15

15

implemented thorough energy saving measures even in the

10

10

5

5

0

21.8

2013

2014

2015

2016

2017 (FY)

office buildings, including introduction of energy-efficient air
conditioners and LED lights.

0emissions (Scope 1) and indirect emissions (Scope 2) during

5

Waste generated in operations

9materials and the use, disposal and recycling of products (Scope

6

Business travel33), contributing to the reduction of CO2 emissions across society

7

Employee commuting

1

Other (down stream)

13,135as a whole.
* c-LCA (carbon-Life Cycle Analysis) is a methodology to assess the CO2 emissions in
the total lifecycle of products from the time their raw materials are taken, they are
manufactured, distributed, used up, to the time they are abandoned.
(Note) The Greenhouse Gas (GHG) Protocol classifies emissions into three scopes: Scope
1 (Direct emissions from the reporting company), Scope 2 (Indirect emissions
from the generation of purchased or acquired electricity), and Scope 3 (Other
indirect emissions from the reporting company’s supply chain).

52

S HOWA DENKO R EP ORT 2 O18

S HOWA DENKO R EP OR T 2 O18

53

About Showa Denko

CSR

Governance

Financial

CSR Management of
Showa Denko

Stakeholder
communications

Highlights of
CSR Activities

Responsible Care

CSR procurement

Human Rights andLabor Practice

Responsible Care: Environmental Conservation

Global Warming Prevention Measures

TOPIC

Basic policies
greenhouse gas emissions and energy consumption as partof its efforts to combat global warming and support resource

The Tokuyama Plant of Showa Denko K.K. was commended byconservation.

Yamaguchi Prefecture as a plant with excellent anti-global warming

In particular, to reduce the environmental impact associatedcommendations to individuals and organizations that have madetrucks and increasing their loading efficiency to reduce our CO2

outstanding contributions to environmental conservation.

emissions.
also strove to reduce energy consumed for transportation byemissions, including improvement of production processes,

result, the Plant reduced its CO2 emissions by 57% relative to the2010 level. The Plant was given the commendation in recognition

increasing the shipment amount to minimize the frequency of

conversion of energy conservation activities, and modifying
equipment.

of this effort.

4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0

2,673

2,675

2,687

2,686

long-distance transportation.

its energy efficiency byreplacing its facilities withtransportation volume. This is mainly because we increased themore appropriate ones

proportion of ship transportation (on a ton-kilometer basis),in line with the reviewed

which is superior to transportation by truck in terms of per-unitbusiness plan.

energy consumption.

Showa Denko owns and operates hydroelectric power stations

2013
2005
Reference year

2014

2015

2016

at its four plants.

2017 (FY)The repair work that had been conducted since 2015 for the
long-term use of the facilities was all completed at the end of
August 2017. The total amount of electricity generated by thehydroelectric power stations in 2017 was equivalent to 25% of▶ Scope 3 GHG emissions(kt/YEAR)

労働安全

our total power consumption, up 10% from the fiscal 2016 level.

Category

The amount of emission

1

Purchased goods and services

1,743

2

Capital goods

121

3. Implementation of c-LCA*The Showa Denko Group assesses CO2 emissions across theentire life cycle of each product, encompassing not just direct

3

Fuel- and energy-related activities not include
in Scope1 and 2

412

4

Upstream transportation and distribution

25

production but also emissions during the procurement of raw

2017 (FY)2016

P55_輸送部門におけるCO₂排出量とエネルギー_0731▶ Transportation sector's CO2 emissions and energy consumption rate
■ CO2 emissions by transport sector● Unit energy consumption for transport

(kt)
35
30

(kl per million ton-km)

35

29.3

29

30
24.7

25
20

24.6

23.5
22.4

22.9

22.8

22.4

25

■ Sea
■ Rail■ Road

(％)
100
80
60

55
100
2,591

2015

▶ Ratios for use of various modes of transport (FY2016)

year on year, although CO2 emissions increased due to increased

2. Utilization of our own hydroelectric power
stations2014

In the fiscal year, per-unit energy consumption decreased

continue to increase

2,746

2013

transportation and by relocating the storage places to reduce

The Plant will proactively

3,621

415

388

100
0

increase energy efficiency and reduce environmental impact. As a

349

200

and ship transportation as well as making efficient use of large

In fiscal 2017, in addition to promoting a modal shift, we(kt-CO2)488

300

with logistics, we are promoting a modal shift from truck to rail

The Tokuyama Plant has been updating its equipment to■ 6GHGs■ Non-energy source origin■ Energy source origin

505

400

to production, sales and delivery.

The Group continued its efforts to reduce greenhouse gas▶ Trends in discharged amounts of greenhouse gases

500

entire supply chain from the procurement of materials throughThe governor of Yamaguchi Prefecture annually gives

1. Reduction of CO2 emissions

600

also committed to improving transportation efficiency across its

measures in November2017.

Activities in 2017

(million ton-km)

As a way to reduce its environmental impact, Showa Denko isCommended as a plant with excellent antiglobal warming measures

The Showa Denko Group promotes various measures to reduce▶ Freight ton-km

4. Reducing environmental impact throughsupply chain management (SCM)

20.7

32.4

1.0

1.3

57.7

66.3

38.7

78.3

CO2 emissions

Freight ton-km

Freight ton

40
20
0

3.6

5. Promoting energy saving in office
Using the tight electric power conditions after the Great20

East Japan Earthquake disaster as an opportunity, we have

15

15

implemented thorough energy saving measures even in the

10

10

5

5

0

21.8

2013

2014

2015

2016

2017 (FY)

office buildings, including introduction of energy-efficient air
conditioners and LED lights.

0emissions (Scope 1) and indirect emissions (Scope 2) during

5

Waste generated in operations

9materials and the use, disposal and recycling of products (Scope

6

Business travel33), contributing to the reduction of CO2 emissions across society

7

Employee commuting

1

Other (down stream)

13,135as a whole.
* c-LCA (carbon-Life Cycle Analysis) is a methodology to assess the CO2 emissions in
the total lifecycle of products from the time their raw materials are taken, they are
manufactured, distributed, used up, to the time they are abandoned.
(Note) The Greenhouse Gas (GHG) Protocol classifies emissions into three scopes: Scope
1 (Direct emissions from the reporting company), Scope 2 (Indirect emissions
from the generation of purchased or acquired electricity), and Scope 3 (Other
indirect emissions from the reporting company’s supply chain).

52

S HOWA DENKO R EP ORT 2 O18

S HOWA DENKO R EP OR T 2 O18

53

About Showa Denko

CSR

Governance

CSR Management of
Showa Denko

Financial

Stakeholder
communications

Highlights of
CSR Activities

Responsible Care

CSR procurement

Human Rights andLabor Practice

Responsible Care: Environmental Conservation

Environmental considerations;
Atmosphere, water and soil

Reducing our environmental impact on water
To reduce chemical oxygen demand (COD), total nitrogen, total

Basic policies

Reducing Industrial Waste

Reducing Chemical Substance Discharge

Basic policies

Basic policies

phosphorus, and other water pollution indexes, the Group continued

To prevent air, water, and soil pollution, the Showa Denko
Group endeavors to reduce the release and environmental
impact of chemical substances through fuel switching,
improvement of production processes, and other measures

implementing various measures including improvement of production
processes, upgrading and proper operational management ofwastewater treatment facilities, and recycling of water.
Moreover, we installed equipment to prevent high-

The Showa Denko Group will continue to achieve zeroAs a member of the Japan Chemical Industry Association (JCIA),emissions (meaning that waste sent to final landfill is 1% or less

Showa Denko has been voluntarily investigating the amountof total waste generated).

of chemical substances discharged and transferred by thecompany to reduce the emission of the substances. We also

concentration wastewater from leaking outside via drainage pipes.

plan and implement reduction measures for each of our plants

Activities in 2017

Activities in 2017
Reducing emissions of hazardous air pollutants▶ Discharged amounts of substances with water quality impact(Showa Denko)

To reduce disposal of industrial waste, the Showa Denko Group● total nitorogen● COD● total phosphorus

Of the 12 substances designated by the Japan Chemical Industry
Association (JCIA) as hazardous air pollutants, the Showa Denko
Group handles nine. In 2016, we continued our efforts toward
reducing the emissions of these substances by promoting a shift
to alternative substances and collection and recycling of thesubstances.

(t)
600
500

and waste alkalis, use of waste oil and waste plastics as fuel for heatrecovery, and effective use of inorganic sludge as a raw material

510

503

458

480

457

for cement and others. These measures have been helping us curb
generation and promote reuse and effective use of waste materials.

400▶ Total amounts released of harmful atmospheric pollutants(Showa Denko)

380

300

17

100

18

15

14

14

14

0

Showa Denko investigated the amount of 417 substances, including
PRTR-listed substances, discharged and transferred by the company
and reported the results to JCIA.
Showa Denko will continue to make focused efforts to reduce
discharge volumes by preparing reduction plans for each site

365

355

360

346

1. Reducing volume of landfill disposal

200

(t)
20

Activities in 2017has been taking various actions including the reuse of waste acids

10

10

9

8

2013

2014

2015

2016

8

for PRTR-listed substances and for substances with high annual

We continued to reduce the generation of industrial waste anddischarge volumes. The Company is currently seeking to ascertain

the volume of final landfill waste, thereby continuing to achieve

and assess potential impact in areas surrounding its sites and improvezero emissions (with the Group’s landfill rate of 0.38%). The

communication with local communities and governments concerning

Group’s landfill rate slightly increased year on year due to therisks as it works to reduce discharge volumes.

removal of unnecessary equipment and devices from its sites,

2017 (FY)

which resulted in an increase in the landfill amount.
10

and final disposal and confirmed that they treated and disposed

On occasions such as changes in the uses of plant sites or soilof our waste properly.

removal, the Showa Denko Group undertakes surveys and other5

measures in line with the Soil Contamination Countermeasures
2013

2014

2015

2016

2017 (FY)

2.0

Reducing our environmental impact on the air
To reduce emissions of SOx, NOx, dust and soot, and othersubstances having adverse effects on the air, the Group continued

Fifty years have passed since the outbreak of Niigata Minamata

improvement of combustion methods, proper operational

disease was officially recognized.

management of desulfurization and denitrification devices, andMaintaining an awareness of the significant scale at which we

reduced fuel consumption through waste heat recovery.

have caused damage to the victims and residents of neighboring

impact (Showa Denko)
(t)
1,500
1,267

1,324

● NOx
● SOx
● Soot and dust

1,413
1,255

1,324

300
0

400

415

384

373

390
415

300

is committed to collaborating with the Japanese Government as

1.5

1.34
1.08

1.0

0.95

0.5
0

2013

2014

145

100

2015

0
0.31

0.38

2016

2017 (FY)

26

26

23

15

2013

2014

2015

2016

16

1
15

2017 (FY)▶ PRTR-listed substances released and transferred (Showa Denko)

Volume released /transferredwell as local governments in order to cope with this issue withsincerity, and provide solutions in accordance with the Act onCompensation, etc. for Pollution-related Health Damage and

2. PCB control

Total volume
released

Volumetransferred

Based on its PCB control checklist, Showa Denko regularly

689t

checks the status of stored polychlorinated biphenyl (PCB)

160t

waste for appropriate management. We are replacing PCB-

900
600

areas through contamination of the Agano River, Showa Denko

other relevant laws and regulations.

1,200

560

200

Minamata disease in Niigata Prefectureadvancing a variety of measures including fuel switching,▶ Change in discharged amounts of substances with atmospheric■ Into air (Showa Denko)■ Into water (Showa Denko)■ Into air (Showa Denko Group) ■ Into water (Showa Denko Group)

500● Final landfill rate
（Showa Denko Group)
Zero emissions reference ratio(%)▶ Released of PRTR-listed substances

(t)
600

P57_
▶ Final 産業廃棄物最終埋立処分率(t）landfill rate of industrial waste

Law and local government regulations.

054

We also inspected our contractors for intermediate treatment

Measures to prevent soil andgroundwater pollution

containing equipment and commission the disposal toprofessional companies in a planned manner.
398
166

2013

369

360

324

326

112

87

63

71

2014

2015

2016

2017 (FY)S HOWA DENKO R EP ORT 2 O18

Into soil

0tInto water

15t

Into air145t

S HOWA DENKO R EP OR T 2 O18

55

About Showa Denko

CSR

Governance

CSR Management of
Showa Denko

Financial

Stakeholder
communications

Highlights of
CSR Activities

Responsible Care

CSR procurement

Human Rights andLabor Practice

Responsible Care: Environmental Conservation

Environmental considerations;
Atmosphere, water and soil

Reducing our environmental impact on water
To reduce chemical oxygen demand (COD), total nitrogen, total

Basic policies

Reducing Industrial Waste

Reducing Chemical Substance Discharge

Basic policies

Basic policies

phosphorus, and other water pollution indexes, the Group continued

To prevent air, water, and soil pollution, the Showa Denko
Group endeavors to reduce the release and environmental
impact of chemical substances through fuel switching,
improvement of production processes, and other measures

implementing various measures including improvement of production
processes, upgrading and proper operational management ofwastewater treatment facilities, and recycling of water.
Moreover, we installed equipment to prevent high-

The Showa Denko Group will continue to achieve zeroAs a member of the Japan Chemical Industry Association (JCIA),emissions (meaning that waste sent to final landfill is 1% or less

Showa Denko has been voluntarily investigating the amountof total waste generated).

of chemical substances discharged and transferred by thecompany to reduce the emission of the substances. We also

concentration wastewater from leaking outside via drainage pipes.

plan and implement reduction measures for each of our plants

Activities in 2017

Activities in 2017
Reducing emissions of hazardous air pollutants▶ Discharged amounts of substances with water quality impact(Showa Denko)

To reduce disposal of industrial waste, the Showa Denko Group● total nitorogen● COD● total phosphorus

Of the 12 substances designated by the Japan Chemical Industry
Association (JCIA) as hazardous air pollutants, the Showa Denko
Group handles nine. In 2016, we continued our efforts toward
reducing the emissions of these substances by promoting a shift
to alternative substances and collection and recycling of thesubstances.

(t)
600
500

and waste alkalis, use of waste oil and waste plastics as fuel for heatrecovery, and effective use of inorganic sludge as a raw material

510

503

458

480

457

for cement and others. These measures have been helping us curb
generation and promote reuse and effective use of waste materials.

400▶ Total amounts released of harmful atmospheric pollutants(Showa Denko)

380

300

17

100

18

15

14

14

14

0

Showa Denko investigated the amount of 417 substances, including
PRTR-listed substances, discharged and transferred by the company
and reported the results to JCIA.
Showa Denko will continue to make focused efforts to reduce
discharge volumes by preparing reduction plans for each site

365

355

360

346

1. Reducing volume of landfill disposal

200

(t)
20

Activities in 2017has been taking various actions including the reuse of waste acids

10

10

9

8

2013

2014

2015

2016

8

for PRTR-listed substances and for substances with high annual

We continued to reduce the generation of industrial waste anddischarge volumes. The Company is currently seeking to ascertain

the volume of final landfill waste, thereby continuing to achieve

and assess potential impact in areas surrounding its sites and improvezero emissions (with the Group’s landfill rate of 0.38%). The

communication with local communities and governments concerning

Group’s landfill rate slightly increased year on year due to therisks as it works to reduce discharge volumes.

removal of unnecessary equipment and devices from its sites,

2017 (FY)

which resulted in an increase in the landfill amount.
10

and final disposal and confirmed that they treated and disposed

On occasions such as changes in the uses of plant sites or soilof our waste properly.

removal, the Showa Denko Group undertakes surveys and other5

measures in line with the Soil Contamination Countermeasures
2013

2014

2015

2016

2017 (FY)

2.0

Reducing our environmental impact on the air
To reduce emissions of SOx, NOx, dust and soot, and othersubstances having adverse effects on the air, the Group continued

Fifty years have passed since the outbreak of Niigata Minamata

improvement of combustion methods, proper operational

disease was officially recognized.

management of desulfurization and denitrification devices, andMaintaining an awareness of the significant scale at which we

reduced fuel consumption through waste heat recovery.

have caused damage to the victims and residents of neighboring

impact (Showa Denko)
(t)
1,500
1,267

1,324

● NOx
● SOx
● Soot and dust

1,413
1,255

1,324

300
0

400

415

384

373

390
415

300

is committed to collaborating with the Japanese Government as

1.5

1.34
1.08

1.0

0.95

0.5
0

2013

2014

145

100

2015

0
0.31

0.38

2016

2017 (FY)

26

26

23

15

2013

2014

2015

2016

16

1
15

2017 (FY)▶ PRTR-listed substances released and transferred (Showa Denko)

Volume released /transferredwell as local governments in order to cope with this issue withsincerity, and provide solutions in accordance with the Act onCompensation, etc. for Pollution-related Health Damage and

2. PCB control

Total volume
released

Volumetransferred

Based on its PCB control checklist, Showa Denko regularly

689t

checks the status of stored polychlorinated biphenyl (PCB)

160t

waste for appropriate management. We are replacing PCB-

900
600

areas through contamination of the Agano River, Showa Denko

other relevant laws and regulations.

1,200

560

200

Minamata disease in Niigata Prefectureadvancing a variety of measures including fuel switching,▶ Change in discharged amounts of substances with atmospheric■ Into air (Showa Denko)■ Into water (Showa Denko)■ Into air (Showa Denko Group) ■ Into water (Showa Denko Group)

500● Final landfill rate
（Showa Denko Group)
Zero emissions reference ratio(%)▶ Released of PRTR-listed substances

(t)
600

P57_
▶ Final 産業廃棄物最終埋立処分率(t）landfill rate of industrial waste

Law and local government regulations.

054

We also inspected our contractors for intermediate treatment

Measures to prevent soil andgroundwater pollution

containing equipment and commission the disposal toprofessional companies in a planned manner.
398
166

2013

369

360

324

326

112

87

63

71

2014

2015

2016

2017 (FY)S HOWA DENKO R EP ORT 2 O18

Into soil

0tInto water

15t

Into air145t

S HOWA DENKO R EP OR T 2 O18

55

About Showa Denko

Governance

CSR

CSR Management of
Showa Denko

Financial

Stakeholder
communications

Highlights of
CSR Activities

Responsible Care

CSR procurement

Human Rights andLabor Practice

Responsible Care

Equipment safety/Occupational Safety
Equipment safety
Basic policies
The Showa Denko Group aims to reduce equipment-related
accidents to zero by promoting the Active Safety initiative inwhich we analyze past incidents to prevent recurrences.

▶ Trends in frequency rate of lost-time injuries● Showa Denko● Chemical Industries● Showa Denko Group* ● All Industries

TOPIC
Hikone Plant of Showa Aluminum Can Corp.
commended by the Commissioner of the Fireand Disaster Management Agency
The Hikone Plant received a fiscal 2017 commendationfrom the Commissioner of the Fire and Disaster Management
Agency as an establishment exhibiting excellence in the

Activities in 2017

management of hazardous materials.
establishments that have voluntarily and proactively worked forthe safe management of hazardous materials, cooperated withactivities for zero serious incidents. In 2017, however, we had nine

the government’s safety measures for hazardous materials, andequipment accidents, though fortunately no personal injuries were
sustained. In light of the frequent reoccurrence of similar accidents,
we began conducting an activity to promote the inherent safetyof equipment, while sharing the lessons learned by analyzing thecauses of past accidents. We also continued other activities, including
intensive discussions on safety at the Safety Meetings held by theManagement Committee.

2.0

made outstanding contributions to ensuring day-to-day safety.
The Hikone Plant makes an annual occupational healthand safety plan and fosters safety management based oncooperation among employees in charge of fire prevention
for the entire plant and at each workplace and in-house

1.66

1.58

1.61

1.66

1.63

1.5
1.0
0.5
0.0

Sakai Plant: Making a safety pledge
At the Sakai Plant of Showa Denko K.K., employees

0.82

0.76

0.81

participate in a safety event on March 1 every year to remind

0.88

0.81

0.25
0.12

2013

0.24
2014

themselves of the serious incident that occurred at the Plant.
Again in 2018, many employees gathered to pray for safety in

0.43
0.22

The Commissioner’s commendation is given to

The Showa Denko Group has been conducting the Active Safety

TOPIC

0.15
0.13

0.15
2015

2016

0.39
0.22

2017 (YEAR)* Scope of Group companies (As of December 2017)
Tsurusaki Kyodo Doryoku K.K., Showa Denko Ceramics Co.,Ltd. , Shinshu Showa K.K. , Showa
Denko Packaging Co., Ltd. , Showa Aluminum Can Corp., Showa Denko Sakai Aluminum K.K.,
Showa Denko Electronics K.K., Union Showa K.K., Niigata Showa K.K., Showa Aluminum Can
Recycling Center, HIPACK Co., Ltd., Showa Denko Gas Products Co., Ltd., Clean-S Showa K.K.,
Nippon Polytech Corp., Showa Denko Kenso K.K., Showa Fine Ceramics Co., Ltd. , Showa Denko
HD Yamagata K.K., Fuyo Perlite Co., Ltd. , and SunAllomer Ltd.

front of the “safety pledge” monument.
After they prayed for safety, Corporate Officer Takasaki
made a speech. He encouraged employees to promotevisualization and standardization so as to point out dangerous
operations to each other to increase on-site safety andavoid ever having another serious incident at the Plant.
Subsequently, asafety promotion
meeting was held
for the entire
Aluminum segment,

firefighting teams.

to which the Sakai

Moreover, the Plant educates all employees on how to

Plant belongs.

use a fire extinguisher and on Safety Data Sheets (SDSs)
and conducts comprehensive firefighting and disaster control

Pray for safety in front of the “safety pledge”
monument

drills to raise employee awareness. The Plant also exchanges

1. Response to the industrial safety action plan
drawn up by the Japan Petrochemical Industry
Association (JPCA)
We placed particular focus on risk assessment of unusual
conditions and operations, while implementing educational
training sessions and various improvement activities to enhance
our safety culture and strengthen our safety foundation.

views with the municipal
government and local▶ 2017-2018 List of RC-related awards received by the Showa Denko Group companies

residents, invites locals totour the premises, and sharesinformation with the local

Name of award

fire department for disaster
Testimonial

Disaster prevention

2. Precautions against earthquakes
From the viewpoints of human safety, the environment,
and business continuity planning (BCP), we made a seismic
reinforcement plan for 2019 and onward so as to implement
anti-seismic measures in an effective manner.
In March 2018, we updated the earthquake early warning
system, which was implemented on a firm-wide basis toannounce the occurrence of an earthquake to employees as

Occupational Safety
Basic policies
In order to eliminate work-related accidents, the Showa Denko

We have also been working on BCP with a focus on possible

Health andoccupational safety

Group is promoting Active Safety activities by using its own

Fiscal 2017 Excellent Hazardous Materials Facility Accredited by the Commissionerof the Fire and Disaster Management Agency

Hikone Plant of Showa Aluminum Can Corp.

June

Fiscal 2017 Japan Petrochemical Industry Association Maintenance Award

Kazufumi Araki , Kawasaki Plant of Showa Denko

October

Fiscal 2016 Minister of Health, Labour, and Welfare's Award for businessfacility
managers who place priority on safety

Toru Aoki , Shiojiri Plant of Showa Denko Ceramics Co., Ltd.

January

Safty Merit Award of the 41th JCIA Safety Awards

Showa Denko Electronics K.K.
Omuta Plant of Showa Aluminum Can Corp.

Special Award for Excellence, 2016 Japan Aluminum Association Occupational
Safety Awards

Oyama Plant of Showa Aluminum Can Corp.

May

Showa Denko Sakai Aluminum K.K.

Active Safety Checklist developed in-house.

soon as possible, to one that supports the PLUM method newly
adopted by the Japan Meteorological Agency.

Mouth
received

2017

control and environmental
protection.

Recipient site and individualAward for Excellence, 2016 Japan Aluminum Association Occupational Safety Awards

Oyama Plant of Showa Denko K.K.

Fiscal 2018 Excellent Hazardous Materials Facility Accredited by the Commissionerof the Fire and Disaster Management Agency

Chichibu Plant of Showa Denko K.K.

June

Fiscal 2017 Minister of Health, Labour, and Welfare's Award for businessfacility
managers who place priority on safety

Akira Morii , Oyama Plant of Showa Denko K.K.

January

Accident-free record certificate from the Ministry of Health, Labour and Welfare(Fourth-class)Oyama Plant of Showa Aluminum Can Corp.

February

Safty Merit Award of the 42th JCIA Safety Awards

Showa Denko HD Yamagata K.K.

2018

Activities in 2017

earthquake disasters. In line with the business continuity

In 2017 we had seven lost-time injuries. In view of the high frequency

guidelines set by the Cabinet Office of Japan, we have builtof falls and other behavioral incidents, we enhanced safety education

up a business continuity promotion system and basic policies,

and provided non-technical skill training by using risk simulation

designated important operations to be continued by thefacilities. We also conducted activities to identify and reduce risks fromdivisions, plants, and major Group companies, and identified

broader viewpoints, including organizing safety exchange meetingsbottlenecks to maintaining the continuity of these operations.

and mutual inspections between the bases. Moreover, we fostered theIn addition to making business continuity plans, we are working

effective use of information about past incidents across the company

on their documentation, educating and training employees onby emailing the “Safety Calendar” to employees, while collecting andthe plans, and reviewing the plans for strict business continuity

analyzing information about no-lost-time injuries and promoting themanagement (BCM).

sharing of the results among employees to help them increase their

Disaster prevention

Health andoccupational safety

Oyama Plant of Showa Denko K.K
Special Award for Excellence, 2017 Japan Aluminum Association Occupational
Safety Awards

Omuta Plant of Showa Aluminum Can Corp.

May

Oyama Plant of Showa Aluminum Can Corp.
Award for Excellence, 2017 Japan Aluminum Association Occupational Safety
AwardsShowa Denko Sakai Aluminum K.K.

safety sensitivity and awareness.

56

S HOWA DENKO R EP ORT 2 O18

S HOWA DENKO R EP OR T 2 O18

57

About Showa Denko

Governance

CSR

CSR Management of
Showa Denko

Financial

Stakeholder
communications

Highlights of
CSR Activities

Responsible Care

CSR procurement

Human Rights andLabor Practice

Responsible Care

Equipment safety/Occupational Safety
Equipment safety
Basic policies
The Showa Denko Group aims to reduce equipment-related
accidents to zero by promoting the Active Safety initiative inwhich we analyze past incidents to prevent recurrences.

▶ Trends in frequency rate of lost-time injuries● Showa Denko● Chemical Industries● Showa Denko Group* ● All Industries

TOPIC
Hikone Plant of Showa Aluminum Can Corp.
commended by the Commissioner of the Fireand Disaster Management Agency
The Hikone Plant received a fiscal 2017 commendationfrom the Commissioner of the Fire and Disaster Management
Agency as an establishment exhibiting excellence in the

Activities in 2017

management of hazardous materials.
establishments that have voluntarily and proactively worked forthe safe management of hazardous materials, cooperated withactivities for zero serious incidents. In 2017, however, we had nine

the government’s safety measures for hazardous materials, andequipment accidents, though fortunately no personal injuries were
sustained. In light of the frequent reoccurrence of similar accidents,
we began conducting an activity to promote the inherent safetyof equipment, while sharing the lessons learned by analyzing thecauses of past accidents. We also continued other activities, including
intensive discussions on safety at the Safety Meetings held by theManagement Committee.

2.0

made outstanding contributions to ensuring day-to-day safety.
The Hikone Plant makes an annual occupational healthand safety plan and fosters safety management based oncooperation among employees in charge of fire prevention
for the entire plant and at each workplace and in-house

1.66

1.58

1.61

1.66

1.63

1.5
1.0
0.5
0.0

Sakai Plant: Making a safety pledge
At the Sakai Plant of Showa Denko K.K., employees

0.82

0.76

0.81

participate in a safety event on March 1 every year to remind

0.88

0.81

0.25
0.12

2013

0.24
2014

themselves of the serious incident that occurred at the Plant.
Again in 2018, many employees gathered to pray for safety in

0.43
0.22

The Commissioner’s commendation is given to

The Showa Denko Group has been conducting the Active Safety

TOPIC

0.15
0.13

0.15
2015

2016

0.39
0.22

2017 (YEAR)* Scope of Group companies (As of December 2017)
Tsurusaki Kyodo Doryoku K.K., Showa Denko Ceramics Co.,Ltd. , Shinshu Showa K.K. , Showa
Denko Packaging Co., Ltd. , Showa Aluminum Can Corp., Showa Denko Sakai Aluminum K.K.,
Showa Denko Electronics K.K., Union Showa K.K., Niigata Showa K.K., Showa Aluminum Can
Recycling Center, HIPACK Co., Ltd., Showa Denko Gas Products Co., Ltd., Clean-S Showa K.K.,
Nippon Polytech Corp., Showa Denko Kenso K.K., Showa Fine Ceramics Co., Ltd. , Showa Denko
HD Yamagata K.K., Fuyo Perlite Co., Ltd. , and SunAllomer Ltd.

front of the “safety pledge” monument.
After they prayed for safety, Corporate Officer Takasaki
made a speech. He encouraged employees to promotevisualization and standardization so as to point out dangerous
operations to each other to increase on-site safety andavoid ever having another serious incident at the Plant.
Subsequently, asafety promotion
meeting was held
for the entire
Aluminum segment,

firefighting teams.

to which the Sakai

Moreover, the Plant educates all employees on how to

Plant belongs.

use a fire extinguisher and on Safety Data Sheets (SDSs)
and conducts comprehensive firefighting and disaster control

Pray for safety in front of the “safety pledge”
monument

drills to raise employee awareness. The Plant also exchanges

1. Response to the industrial safety action plan
drawn up by the Japan Petrochemical Industry
Association (JPCA)
We placed particular focus on risk assessment of unusual
conditions and operations, while implementing educational
training sessions and various improvement activities to enhance
our safety culture and strengthen our safety foundation.

views with the municipal
government and local▶ 2017-2018 List of RC-related awards received by the Showa Denko Group companies

residents, invites locals totour the premises, and sharesinformation with the local

Name of award

fire department for disaster
Testimonial

Disaster prevention

2. Precautions against earthquakes
From the viewpoints of human safety, the environment,
and business continuity planning (BCP), we made a seismic
reinforcement plan for 2019 and onward so as to implement
anti-seismic measures in an effective manner.
In March 2018, we updated the earthquake early warning
system, which was implemented on a firm-wide basis toannounce the occurrence of an earthquake to employees as

Occupational Safety
Basic policies
In order to eliminate work-related accidents, the Showa Denko

We have also been working on BCP with a focus on possible

Health andoccupational safety

Group is promoting Active Safety activities by using its own

Fiscal 2017 Excellent Hazardous Materials Facility Accredited by the Commissionerof the Fire and Disaster Management Agency

Hikone Plant of Showa Aluminum Can Corp.

June

Fiscal 2017 Japan Petrochemical Industry Association Maintenance Award

Kazufumi Araki , Kawasaki Plant of Showa Denko

October

Fiscal 2016 Minister of Health, Labour, and Welfare's Award for businessfacility
managers who place priority on safety

Toru Aoki , Shiojiri Plant of Showa Denko Ceramics Co., Ltd.

January

Safty Merit Award of the 41th JCIA Safety Awards

Showa Denko Electronics K.K.
Omuta Plant of Showa Aluminum Can Corp.

Special Award for Excellence, 2016 Japan Aluminum Association Occupational
Safety Awards

Oyama Plant of Showa Aluminum Can Corp.

May

Showa Denko Sakai Aluminum K.K.

Active Safety Checklist developed in-house.

soon as possible, to one that supports the PLUM method newly
adopted by the Japan Meteorological Agency.

Mouth
received

2017

control and environmental
protection.

Recipient site and individualAward for Excellence, 2016 Japan Aluminum Association Occupational Safety Awards

Oyama Plant of Showa Denko K.K.

Fiscal 2018 Excellent Hazardous Materials Facility Accredited by the Commissionerof the Fire and Disaster Management Agency

Chichibu Plant of Showa Denko K.K.

June

Fiscal 2017 Minister of Health, Labour, and Welfare's Award for businessfacility
managers who place priority on safety

Akira Morii , Oyama Plant of Showa Denko K.K.

January

Accident-free record certificate from the Ministry of Health, Labour and Welfare(Fourth-class)Oyama Plant of Showa Aluminum Can Corp.

February

Safty Merit Award of the 42th JCIA Safety Awards

Showa Denko HD Yamagata K.K.

2018

Activities in 2017

earthquake disasters. In line with the business continuity

In 2017 we had seven lost-time injuries. In view of the high frequency

guidelines set by the Cabinet Office of Japan, we have builtof falls and other behavioral incidents, we enhanced safety education

up a business continuity promotion system and basic policies,

and provided non-technical skill training by using risk simulation

designated important operations to be continued by thefacilities. We also conducted activities to identify and reduce risks fromdivisions, plants, and major Group companies, and identified

broader viewpoints, including organizing safety exchange meetingsbottlenecks to maintaining the continuity of these operations.

and mutual inspections between the bases. Moreover, we fostered theIn addition to making business continuity plans, we are working

effective use of information about past incidents across the company

on their documentation, educating and training employees onby emailing the “Safety Calendar” to employees, while collecting andthe plans, and reviewing the plans for strict business continuity

analyzing information about no-lost-time injuries and promoting themanagement (BCM).

sharing of the results among employees to help them increase their

Disaster prevention

Health andoccupational safety

Oyama Plant of Showa Denko K.K
Special Award for Excellence, 2017 Japan Aluminum Association Occupational
Safety Awards

Omuta Plant of Showa Aluminum Can Corp.

May

Oyama Plant of Showa Aluminum Can Corp.
Award for Excellence, 2017 Japan Aluminum Association Occupational Safety
AwardsShowa Denko Sakai Aluminum K.K.

safety sensitivity and awareness.

56

S HOWA DENKO R EP ORT 2 O18

S HOWA DENKO R EP OR T 2 O18

57

About Showa Denko

CSR

Governance

Financial

CSR Management of
Showa Denko

Stakeholder
communications

Highlights of
CSR Activities

Responsible Care

CSR procurement

Human Rights andLabor Practice

Responsible Care

Chemical Substances Safety/Quality Assurance
Activities in 2017

Chemical Substances Safety
Basic policies
At the World Summit on Sustainable Development (WSSD) heldin 2002, participants agreed to pursue the goal of minimizing
the adverse effects of chemicals on human health and theenvironment by 2020, and activities to ensure the safety ofchemicals have since been fostered across the world.
In order to “provide products and services that are usefuland safe and exceed our customers’ expectations,” the Showa
Denko Group takes a risk-based approach and proactively
participates in the activity conducted by the International
Council of Chemical Associations (ICCA) for the comprehensive
management of chemical substances. Specifically, we work toensure the safety of chemicals throughout their life cycle, from
R&D through to the design, manufacture, sale, transportation,use, and disposal stages. In addition to confirming the

1. Sharing information about chemical
substances

give consideration to a range of related items, such as how
customers use our products and how they will be disposedof, thereby identifying and reducing any risks related to the
products.

external sharing of information about the hazardousness ofchemical substances used in materials and products, related risks,
legal regulations, and about their applications across the supply

substance management system and are making effective

The Showa Denko Group monitors the trends of Japanese andsubstances used in our products, we proactively work to ensurecompliance with the law by using the aforementioned database.
- Legal regulations in Japan: We are making use of our
ensure compliance with the related laws, such as the following,in a systematic manner: Act on the Evaluation of Chemical
Substances and Regulation of Their Manufacture, etc.; Industrial
Safety and Health Act; and Act on Confirmation, etc. of Release- Legal regulations outside Japan: We monitor revision trends bymaking use of various databases to help our personnel in relevant
countries make appropriate responses to the regulations.

Quality Assurancecompliance for chemical substances used in our products.

Basic policies
The Showa Denko Group is committed to providing products
and services that are useful and safe and exceed our customers’

Site/Department

Supplier

SDK/
Chemical Management
SystemSDS

Non-inclusion
Certificate

Government
Use Information
Customers

Regulatory DB

Data
Acquisition

Mater/
Date Integration

WEB
Platform

To this end, we organizationally and systematically conduct“product safety” activities

Various Reports(SDS/Labels,
JIPS Report,etc.)

Search/View

ProductionLine

in 2020 relative to 2015. As a result of implementing measures toprevent the reoccurrence of similar complaints based on analysisof the true causes of complaints and by learning and sharing

After-sale
After-sale product information
management

Sales

lessons from the complaints made to the Showa Denko Group,

Screening before concluding contracts
and specifications
Screening of sales promotion materials

To enhance our quality assurance and management capabilities, we
implemented the following activities:

1. Product safety management

the number of complaints dropped by about 30% year on year in2017, and we achieved the target for 2020 earlier than planned.
▶ Trends in annual numbers of complaints(With a score of 100 representing the number of claims in 2015)
(%)

250

after-sales. In these activities we take a risk-based approach.

200

To help customers use the Showa Denko Group’s products

150

in a safe manner, we collect information about the safety of

100

205
179

100
71

chemicals and related legal regulations. We centrally manage
the collected information under our comprehensive chemical
substance management system. Specifically, we use our Safety
Data Sheets (SDSs)*1, product labels, and yellow cards*2 to

48

50
0

2013

2014

2015
Reference year

2016

2017 (YEAR)

provide customers with the latest and appropriate information
on chemical safety.
We also have a risk-based screening system to decide

4. Enhancement of on-site capabilities

whether or not to ship a sample new product to a customer or

In order to raise our quality assurance and management level, we

release a new product into the market.

set the target of enhancing the capabilities and quality awarenessIn 2017, we worked to optimize the flow from the collectionof on-site workers and clarified the level to be attained by theto the provision of safety information so that we could provide

departments in charge of quality assurance. We then checked thecustomers with all necessary information.

current levels of the divisions, plants, and Group companies andmade a specific plan to raise their levels.

*1 SDS (Safety Data Sheet):This is a document provided by the supplier to the user (customer) of a chemical
substance, covering such matters as its name, toxicity, and physical/chemical properties;
cautions concerning its handling and storage; and emergency measures.
*2 Yellow card:
This refers to an emergency contact card, which is recommended by JCIA, to briefly
describe appropriate response by transportation company personnel, police, and firefighters in the event of accidents involving hazardous or toxic substances.

5. Quality diagnoses
Personnel from the Head Office’s Quality Assurance Office visit
and carry out annual quality diagnoses at the Group’s sites,
including the Divisions, Plants, and Group companies, to clarify
their strengths and weaknesses and share the findings.

to assure customers that our

products are safe throughout their life cycle, from designand development to market release, production, sales, andChemicalManagement DB

Environment& Safety,
Quality
Assurance
Inclusion Survey/
RoHS Survey

ERP System(Shipping Ticket/
RC Record)

expectations.
Volume Reporting(CSCL,PRTR)

View/Input/Searchnumber of complaints about the quality of our products by half

Product safety screening for market release
Quality assurance capability
screening
Procedures for changes inmanufacturing conditions

foreign regulations on chemical substances. For the chemicaluse of the system as the basis of our efforts to ensure▶ Comprehensive chemicals management system

We conducted activities to attain the target of reducing theMarketing andmanufacture

Activities in 2017
2. Compliance with chemical substance-related
laws and regulations in Japan and abroad

Promotion of Improvements to the Management Thereof.

We have expanded our comprehensive chemical

Product safety screening
Product risk assessment
Acquisition of safety information

3. Reducing complaints

chain.

Amounts of Specific Chemical Substances in the Environment andChemical substance management system

Design anddevelopment

We established a database for the management and internal/

comprehensive chemical substance management system tosafety of chemical substances used in our products, we▶ Quality Assurance and Quality Control Rules

In 2017 the quality assurance personnel identified problems

2. Quality management system(Quality control scheme)

faced by the sites regarding the ability to manufacture productswith uniform quality (process ability), risk assessment, andSpecifically, to identify and reduce our product-related risks,

The Showa Denko Group has established quality management

on-site education, which led to improvements at the sites. Also,

we give consideration to a range of items, including how

systems suitable for each product and organization, and has

the best practices clarified through the quality diagnoses were

customers use our products and how they will be disposed

acquired certification for ISO 9001, IATF 16949, and othershared across the Group.

of, in addition to confirming the safety of chemical substancesinternational standards. To comply with the revised standards

used in the products.

before the end of the transition period (end of 2018), we

As the basic rules for product safety activities, we set thebegan conducting necessary activities, which will result in the

Quality Assurance and Quality Control Rules (“Rules”) withinenhancement of our quality management systems and higher

the company. We review the Rules annually to revise them

quality of our products and services.

according to changes in the environment and society andthereby keep them effective to ensure product safety.

58

S HOWA DENKO R EP ORT 2 O18

S HOWA DENKO R EP OR T 2 O18

59

About Showa Denko

CSR

Governance

Financial

CSR Management of
Showa Denko

Stakeholder
communications

Highlights of
CSR Activities

Responsible Care

CSR procurement

Human Rights andLabor Practice

Responsible Care

Chemical Substances Safety/Quality Assurance
Activities in 2017

Chemical Substances Safety
Basic policies
At the World Summit on Sustainable Development (WSSD) heldin 2002, participants agreed to pursue the goal of minimizing
the adverse effects of chemicals on human health and theenvironment by 2020, and activities to ensure the safety ofchemicals have since been fostered across the world.
In order to “provide products and services that are usefuland safe and exceed our customers’ expectations,” the Showa
Denko Group takes a risk-based approach and proactively
participates in the activity conducted by the International
Council of Chemical Associations (ICCA) for the comprehensive
management of chemical substances. Specifically, we work toensure the safety of chemicals throughout their life cycle, from
R&D through to the design, manufacture, sale, transportation,use, and disposal stages. In addition to confirming the

1. Sharing information about chemical
substances

give consideration to a range of related items, such as how
customers use our products and how they will be disposedof, thereby identifying and reducing any risks related to the
products.

external sharing of information about the hazardousness ofchemical substances used in materials and products, related risks,
legal regulations, and about their applications across the supply

substance management system and are making effective

The Showa Denko Group monitors the trends of Japanese andsubstances used in our products, we proactively work to ensurecompliance with the law by using the aforementioned database.
- Legal regulations in Japan: We are making use of our
ensure compliance with the related laws, such as the following,in a systematic manner: Act on the Evaluation of Chemical
Substances and Regulation of Their Manufacture, etc.; Industrial
Safety and Health Act; and Act on Confirmation, etc. of Release- Legal regulations outside Japan: We monitor revision trends bymaking use of various databases to help our personnel in relevant
countries make appropriate responses to the regulations.

Quality Assurancecompliance for chemical substances used in our products.

Basic policies
The Showa Denko Group is committed to providing products
and services that are useful and safe and exceed our customers’

Site/Department

Supplier

SDK/
Chemical Management
SystemSDS

Non-inclusion
Certificate

Government
Use Information
Customers

Regulatory DB

Data
Acquisition

Mater/
Date Integration

WEB
Platform

To this end, we organizationally and systematically conduct“product safety” activities

Various Reports(SDS/Labels,
JIPS Report,etc.)

Search/View

ProductionLine

in 2020 relative to 2015. As a result of implementing measures toprevent the reoccurrence of similar complaints based on analysisof the true causes of complaints and by learning and sharing

After-sale
After-sale product information
management

Sales

lessons from the complaints made to the Showa Denko Group,

Screening before concluding contracts
and specifications
Screening of sales promotion materials

To enhance our quality assurance and management capabilities, we
implemented the following activities:

1. Product safety management

the number of complaints dropped by about 30% year on year in2017, and we achieved the target for 2020 earlier than planned.
▶ Trends in annual numbers of complaints(With a score of 100 representing the number of claims in 2015)
(%)

250

after-sales. In these activities we take a risk-based approach.

200

To help customers use the Showa Denko Group’s products

150

in a safe manner, we collect information about the safety of

100

205
179

100
71

chemicals and related legal regulations. We centrally manage
the collected information under our comprehensive chemical
substance management system. Specifically, we use our Safety
Data Sheets (SDSs)*1, product labels, and yellow cards*2 to

48

50
0

2013

2014

2015
Reference year

2016

2017 (YEAR)

provide customers with the latest and appropriate information
on chemical safety.
We also have a risk-based screening system to decide

4. Enhancement of on-site capabilities

whether or not to ship a sample new product to a customer or

In order to raise our quality assurance and management level, we

release a new product into the market.

set the target of enhancing the capabilities and quality awarenessIn 2017, we worked to optimize the flow from the collectionof on-site workers and clarified the level to be attained by theto the provision of safety information so that we could provide

departments in charge of quality assurance. We then checked thecustomers with all necessary information.

current levels of the divisions, plants, and Group companies andmade a specific plan to raise their levels.

*1 SDS (Safety Data Sheet):This is a document provided by the supplier to the user (customer) of a chemical
substance, covering such matters as its name, toxicity, and physical/chemical properties;
cautions concerning its handling and storage; and emergency measures.
*2 Yellow card:
This refers to an emergency contact card, which is recommended by JCIA, to briefly
describe appropriate response by transportation company personnel, police, and firefighters in the event of accidents involving hazardous or toxic substances.

5. Quality diagnoses
Personnel from the Head Office’s Quality Assurance Office visit
and carry out annual quality diagnoses at the Group’s sites,
including the Divisions, Plants, and Group companies, to clarify
their strengths and weaknesses and share the findings.

to assure customers that our

products are safe throughout their life cycle, from designand development to market release, production, sales, andChemicalManagement DB

Environment& Safety,
Quality
Assurance
Inclusion Survey/
RoHS Survey

ERP System(Shipping Ticket/
RC Record)

expectations.
Volume Reporting(CSCL,PRTR)

View/Input/Searchnumber of complaints about the quality of our products by half

Product safety screening for market release
Quality assurance capability
screening
Procedures for changes inmanufacturing conditions

foreign regulations on chemical substances. For the chemicaluse of the system as the basis of our efforts to ensure▶ Comprehensive chemicals management system

We conducted activities to attain the target of reducing theMarketing andmanufacture

Activities in 2017
2. Compliance with chemical substance-related
laws and regulations in Japan and abroad

Promotion of Improvements to the Management Thereof.

We have expanded our comprehensive chemical

Product safety screening
Product risk assessment
Acquisition of safety information

3. Reducing complaints

chain.

Amounts of Specific Chemical Substances in the Environment andChemical substance management system

Design anddevelopment

We established a database for the management and internal/

comprehensive chemical substance management system tosafety of chemical substances used in our products, we▶ Quality Assurance and Quality Control Rules

In 2017 the quality assurance personnel identified problems

2. Quality management system(Quality control scheme)

faced by the sites regarding the ability to manufacture productswith uniform quality (process ability), risk assessment, andSpecifically, to identify and reduce our product-related risks,

The Showa Denko Group has established quality management

on-site education, which led to improvements at the sites. Also,

we give consideration to a range of items, including how

systems suitable for each product and organization, and has

the best practices clarified through the quality diagnoses were

customers use our products and how they will be disposed

acquired certification for ISO 9001, IATF 16949, and othershared across the Group.

of, in addition to confirming the safety of chemical substancesinternational standards. To comply with the revised standards

used in the products.

before the end of the transition period (end of 2018), we

As the basic rules for product safety activities, we set thebegan conducting necessary activities, which will result in the

Quality Assurance and Quality Control Rules (“Rules”) withinenhancement of our quality management systems and higher

the company. We review the Rules annually to revise them

quality of our products and services.

according to changes in the environment and society andthereby keep them effective to ensure product safety.

58

S HOWA DENKO R EP ORT 2 O18

S HOWA DENKO R EP OR T 2 O18

59

About Showa Denko

Governance

CSR

Financial

CSR Management of
Showa Denko

Stakeholder
communications

Highlights of
CSR Activities

Responsible Care

CSR procurement

Human Rights andLabor Practice

Responsible Care

CSR procurement

Access to
Essential Services

CSR procurement

CSR visits
The objective of CSR visits is to check that CSR activities are conducted
properly by our business partners at their actual sites. Purchasing

Basic policies

Basic policies

In its business activities, the Showa Denko Group is committed

Showa Denko fosters CSR procurement, deeming it important

to confirm that their responses to the self-assessment questionnaire

to providing “Access to essential services.” This means that we

to give consideration to society and the environment based

are true and correct and to interview them to communicate ourwill not discontinue any services that are as indispensable foron the following policies throughout its supply chain from thepolicies to and gather necessary information from them.

day-today life as water supply without granting a reasonableprocurement of materials to the manufacture and sale of its

extension of time.

products.
1) We will take a comprehensive approach in selecting mostsuitable supplier partners based upon economic rationality

Activities in 2017
The Showa Denko Group continued offering products andtechnologies with a high level of customer satisfaction as well as

350

policy for business opportunities with sincerity, fairnessof customers toward the Group. Although not many of our products

and honesty, disregarding the nationality, past records ofare offered directly to consumers, we ensured, as usual, the safe

transaction and the corporate group relationship of theand stable supply of sodium hypochlorite used for sterilizing tap

candidate companies.

chemicals, and other products important for essential services.

3) Our purchasing activities shall be in compliance with laws
and regulations, as well as our internal rules.

Activities in 2017

Ensuring the safety of food to be delivered toconsumers : Dry ice
Dry ice or solidified carbon dioxide gas is used mainly for the
low-temperature transportation and storage of foodstuffs and378

Following 2016, we implemented activities as given below.

339

300

1. Prevention of Corruption and Bribery

261

250

In addition to ensuring that employees abide by our legal

207

200

guidelines on the prohibition of bribery, we provided education

150

on countryspecific anti-bribery laws for organizations concerned

100

58

50
0

2013

within the Group to make sure that they strictly comply with

54

2014

40
2015

39

38
2016

2017

anti-bribery laws in their respective countries.
(YEAR)

procurment/csr.html). The guidelines provide specific CSR activities thatand ammonia manufacturing facilities. The supply of gas

we request our business partners to conduct. In order to confirm theirused to make dry ice has been tight in Japan, due to reduced

compliance with the guidelines, in 2016 we continued performing

production at the aforementioned facilities, which in turn has
reduced the supply of dry ice.
Showa Denko Gas Products Co., Ltd. is building liquefied
carbon dioxide manufacturing facilities within the Oita
Petrochemical Complex.

observe the Act on Prohibition of Private Monopolization and

If any area needing improvement is found at any business partner as a

Maintenance of Fair Trade (“Antimonopoly Act”) and engage

result of a self-assessment and/or CSR visit, we work closely together within free and fair competition by providing them with education

the partner for improvement to ensure that they will meet the guidelines.

based on our Antimonopoly Act Compliance Manual and rules
concerning what they must and must not do when interactingwith competitors.

them and requesting their compliance with the Showa Denko Groupgas generated as a by-product at oil refinery, iron making

three activities: asking business partners to assess their own CSR
activities (“selfassessments”), visiting them for inspection purposes(“CSR visits”), and doing follow-up checks on their improvement(“follow-up”).

2. Conformance to the Antimonopoly Act
We ensured that all organizations concerned within the Groupof both our business partners and Showa Denko by sharing with
CSR Procurement Guidelines (http://www.sdk.co.jp/english/about/

Activities in 2017

301

Our CSR procurement aims to mutually improve the corporate value

medical/chemical products. It is made from carbon dioxide

the belief that the Group must prevent corruption and bribery,society and the environment across its supply chain.

Follow up

TOPIC

The Showa Denko Group conducts business activities based oncomply with antimonopoly laws, and give consideration to■ Cumulative numbers of visits● Number of visits(Visits)

credibility of management, safety, services, technologicalcompetence and attention to environment and society.

Basic policies▶ CSR visits

400

information on them in order to further enhance the trust and loyalty

water, amino acids used as raw materials for medical and agricultural

personnel from each plant visit about 40 business partners every year

by taking into consideration quality, price, delivery period,2) In selecting our supplier partners, we have an open-door

Fair Business Practice

3.Human rights throughout the supply chain

TOPIC

In order to conduct business that takes human rights throughout

Introducing examples of activities involving a
supplier

the supply chain into consideration, we ask our business partners
to respect basic human rights, prohibit discrimination, ensure
proper work conditions, and protect the rights of the workers

Showa Denko K.K., at the request of Yanai Co.,through our CSR procurement program. We work together withLtd., introduced some examples of its CSR- and ISO

our partners to comply with these matters.

26000-related activities to representatives of the company,

4. Addressing Conflict Minerals

For the production of liquefied carbon dioxide, theWe also spread these CSR procurement activities to our Groupfacilities will make effective use of materials supplied in acompanies in Japan and carried out self-assessment surveys of the

The Public Relations Office organized a meeting for the

Purchasing minerals (tin, tantalum, tungsten, and gold) from Congostable fashion by the chemicalbusiness partners of five Group companies, with the agreement of

purpose, in which about 20 people from the supplier listened

and its neighboring countries is considered as a large international

plants located within thethose Group companies. Moreover, we created English and Chinese

earnestly to the speaker.

problem because you fund local armed groups, consequently haveComplex. This will eventuallyversions of our self-assessment questionnaires for business partners

contribute to the stable andoutside Japan and began asking them to fill them in.

increased supply of dry ice aswell as to more flexible and

The Showa Denko

a part in local conflicts, and cause violation of human rights andGroup will earnenvironmental destruction by purchasing them.

even more trust from

We continued our efforts to avoid the use of conflict minerals

suppliers and foster

quick responses to changes inthe supply-demand balance.

which is a supplier to the Oita Complex.

Self-assessments
Dry ice

We ask our business partners to fill out self-assessment questionnaires
to check how well they meet the Showa Denko Group CSR
Procurement Guidelines. The survey is conducted once every threemutual prosperity

as part of activities to promote respect for human rights andthrough this kind of

CSR procurement.

activity.

Meeting held for the purpose

5. Efforts to meet environmental and social
demands

years in the case of major business partners and at the time of starting

The Showa Denko Group responds appropriately and in goodtransactions in the case of new business partners. We carefully

faith to meet customer requests to reduce the use of harmfulcheck every response and the analyzed results are fed back to the
respondents for continuous improvement

substances and to reassure customers that the Group's products
do not use or incorporate harmful chemical substances subject
to regulations in the EU or other regions.

60

S HOWA DENKO R EP ORT 2 O18

S HOWA DENKO R EP OR T 2 O18

61

About Showa Denko

Governance

CSR

Financial

CSR Management of
Showa Denko

Stakeholder
communications

Highlights of
CSR Activities

Responsible Care

CSR procurement

Human Rights andLabor Practice

Responsible Care

CSR procurement

Access to
Essential Services

CSR procurement

CSR visits
The objective of CSR visits is to check that CSR activities are conducted
properly by our business partners at their actual sites. Purchasing

Basic policies

Basic policies

In its business activities, the Showa Denko Group is committed

Showa Denko fosters CSR procurement, deeming it important

to confirm that their responses to the self-assessment questionnaire

to providing “Access to essential services.” This means that we

to give consideration to society and the environment based

are true and correct and to interview them to communicate ourwill not discontinue any services that are as indispensable foron the following policies throughout its supply chain from thepolicies to and gather necessary information from them.

day-today life as water supply without granting a reasonableprocurement of materials to the manufacture and sale of its

extension of time.

products.
1) We will take a comprehensive approach in selecting mostsuitable supplier partners based upon economic rationality

Activities in 2017
The Showa Denko Group continued offering products andtechnologies with a high level of customer satisfaction as well as

350

policy for business opportunities with sincerity, fairnessof customers toward the Group. Although not many of our products

and honesty, disregarding the nationality, past records ofare offered directly to consumers, we ensured, as usual, the safe

transaction and the corporate group relationship of theand stable supply of sodium hypochlorite used for sterilizing tap

candidate companies.

chemicals, and other products important for essential services.

3) Our purchasing activities shall be in compliance with laws
and regulations, as well as our internal rules.

Activities in 2017

Ensuring the safety of food to be delivered toconsumers : Dry ice
Dry ice or solidified carbon dioxide gas is used mainly for the
low-temperature transportation and storage of foodstuffs and378

Following 2016, we implemented activities as given below.

339

300

1. Prevention of Corruption and Bribery

261

250

In addition to ensuring that employees abide by our legal

207

200

guidelines on the prohibition of bribery, we provided education

150

on countryspecific anti-bribery laws for organizations concerned

100

58

50
0

2013

within the Group to make sure that they strictly comply with

54

2014

40
2015

39

38
2016

2017

anti-bribery laws in their respective countries.
(YEAR)

procurment/csr.html). The guidelines provide specific CSR activities thatand ammonia manufacturing facilities. The supply of gas

we request our business partners to conduct. In order to confirm theirused to make dry ice has been tight in Japan, due to reduced

compliance with the guidelines, in 2016 we continued performing

production at the aforementioned facilities, which in turn has
reduced the supply of dry ice.
Showa Denko Gas Products Co., Ltd. is building liquefied
carbon dioxide manufacturing facilities within the Oita
Petrochemical Complex.

observe the Act on Prohibition of Private Monopolization and

If any area needing improvement is found at any business partner as a

Maintenance of Fair Trade (“Antimonopoly Act”) and engage

result of a self-assessment and/or CSR visit, we work closely together within free and fair competition by providing them with education

the partner for improvement to ensure that they will meet the guidelines.

based on our Antimonopoly Act Compliance Manual and rules
concerning what they must and must not do when interactingwith competitors.

them and requesting their compliance with the Showa Denko Groupgas generated as a by-product at oil refinery, iron making

three activities: asking business partners to assess their own CSR
activities (“selfassessments”), visiting them for inspection purposes(“CSR visits”), and doing follow-up checks on their improvement(“follow-up”).

2. Conformance to the Antimonopoly Act
We ensured that all organizations concerned within the Groupof both our business partners and Showa Denko by sharing with
CSR Procurement Guidelines (http://www.sdk.co.jp/english/about/

Activities in 2017

301

Our CSR procurement aims to mutually improve the corporate value

medical/chemical products. It is made from carbon dioxide

the belief that the Group must prevent corruption and bribery,society and the environment across its supply chain.

Follow up

TOPIC

The Showa Denko Group conducts business activities based oncomply with antimonopoly laws, and give consideration to■ Cumulative numbers of visits● Number of visits(Visits)

credibility of management, safety, services, technologicalcompetence and attention to environment and society.

Basic policies▶ CSR visits

400

information on them in order to further enhance the trust and loyalty

water, amino acids used as raw materials for medical and agricultural

personnel from each plant visit about 40 business partners every year

by taking into consideration quality, price, delivery period,2) In selecting our supplier partners, we have an open-door

Fair Business Practice

3.Human rights throughout the supply chain

TOPIC

In order to conduct business that takes human rights throughout

Introducing examples of activities involving a
supplier

the supply chain into consideration, we ask our business partners
to respect basic human rights, prohibit discrimination, ensure
proper work conditions, and protect the rights of the workers

Showa Denko K.K., at the request of Yanai Co.,through our CSR procurement program. We work together withLtd., introduced some examples of its CSR- and ISO

our partners to comply with these matters.

26000-related activities to representatives of the company,

4. Addressing Conflict Minerals

For the production of liquefied carbon dioxide, theWe also spread these CSR procurement activities to our Groupfacilities will make effective use of materials supplied in acompanies in Japan and carried out self-assessment surveys of the

The Public Relations Office organized a meeting for the

Purchasing minerals (tin, tantalum, tungsten, and gold) from Congostable fashion by the chemicalbusiness partners of five Group companies, with the agreement of

purpose, in which about 20 people from the supplier listened

and its neighboring countries is considered as a large international

plants located within thethose Group companies. Moreover, we created English and Chinese

earnestly to the speaker.

problem because you fund local armed groups, consequently haveComplex. This will eventuallyversions of our self-assessment questionnaires for business partners

contribute to the stable andoutside Japan and began asking them to fill them in.

increased supply of dry ice aswell as to more flexible and

The Showa Denko

a part in local conflicts, and cause violation of human rights andGroup will earnenvironmental destruction by purchasing them.

even more trust from

We continued our efforts to avoid the use of conflict minerals

suppliers and foster

quick responses to changes inthe supply-demand balance.

which is a supplier to the Oita Complex.

Self-assessments
Dry ice

We ask our business partners to fill out self-assessment questionnaires
to check how well they meet the Showa Denko Group CSR
Procurement Guidelines. The survey is conducted once every threemutual prosperity

as part of activities to promote respect for human rights andthrough this kind of

CSR procurement.

activity.

Meeting held for the purpose

5. Efforts to meet environmental and social
demands

years in the case of major business partners and at the time of starting

The Showa Denko Group responds appropriately and in goodtransactions in the case of new business partners. We carefully

faith to meet customer requests to reduce the use of harmfulcheck every response and the analyzed results are fed back to the
respondents for continuous improvement

substances and to reassure customers that the Group's products
do not use or incorporate harmful chemical substances subject
to regulations in the EU or other regions.

60

S HOWA DENKO R EP ORT 2 O18

S HOWA DENKO R EP OR T 2 O18

61

About Showa Denko

Governance

CSR

CSR Management of
Showa Denko

Financial

Stakeholder
communications

Highlights of
CSR Activities

Responsible Care

CSR procurement

Human Rights andLabor Practice

Human Rights and Labor Practice
Human Rights and Corporate Ethics
Basic policies
The Showa Denko Group regards respect for human rights
as the basis of its business management and is continuously▶ Number of requests for consultation received by the Corporate

Diversity

Ethics Hotline
2013

2014
41

2015
44

2016
46

2017
29

The Showa Denko Group works to empower female and non-

Basic policies

45* Including anonymous requests.(Showa Denko Group and some overseas group companies)2．
Support programs to help female/foreign
employees play active roles
Japanese employees in Japan.

The Showa Denko Group has been promoting diversity as one ofShowa Denko K.K. aims to increase the percentage of womenits management strategies. Under the slogans of “Make the mostamong section managers and those in higher positions to

implementing measures to raise all of its employees’ awareness ofof the potential of yourself” and “Make the most of the potential

5% by 2020 in its action plan made in line with the Act onhuman rights. In Japan, we intensively conduct awareness-raisingof others,” we are working to develop the Group’s employees andAdvancement of Measures to Support Raising Next-Generation

activities at each site during Human Rights Week every December.

organizations into people and entities able to cooperate withChildren. To this end, in 2017, we held training seminars foreach other while making use of their diverse features, values, andfemale mid-level career track employees.

We also include a program on human rights and corporate ethics

TOPIC

in the programs comprising our level-specific training.

ideas to continue making profit and creating new value.

We are also sequentially creating and supplying multilingual

Establishing a multilingual contact for whistleblowers

Activities in 2017

versions of internal documents as a means of retaining nonJapanese employees and empowering them to demonstrate

The Showa Denko Group accepts internal reports about
Group employees or directors on the intranet and via Showa

The Showa Denko Group has been conducting awareness-raising

Denko’s Corporate Ethics Hotline service (in Japanese and English).

activities for human rights and corporate ethics across the board.

In consideration of the increase in the number of national staff in

We have been promoting diversity at each of our sites andGroup companies in Japan.

multiple countries in line with the globalization of our business,

1 Awareness-raising activities regarding humanrightswe also established an external multilingual contact for whistleblowers this April.
We respect the privacy of individual whistle-blowers and equally

1. Activity to change the corporate culture
As its goal for diversity, the Showa Denko Group aims toprohibit the unfair treatment of reporters by their companies

transform itself into an organization where a diverse range of

In Japan, the Showa Denko Group aims to give all employees 1.5

regardless of whether the report was made via the multilingual

employees can demonstrate their respective abilities, for whichhours of education on human rights and corporate ethics eachcontact or the Corporate Ethics Hotline.

we will improve management practices, communication, andbase of the Group held study seminars on human right-related
issues familiar to employees (prevention of harassment andWe will ensure “compliance with social and corporate ethicalnorms” by detecting noncompliance, unfair behaviors, and othercontraventions as early as possible.

work styles at our workplaces.
In 2017, executives of Showa Denko’s sites and Group

foster reform of the corporate culture as the basis for diversity.
Since 2013, the Group CEO has annually commended Showa

4. Handling harassment
To eliminate all kinds of harassment at its workplaces, the Showa

Denko’s sites and Group companies that have conducted

Denko Group is continuing to organize awareness-raising andoutstanding diversity promotion activities.

The Showa Denko Group sets every January as Corporate Ethics

other activities for employees.

Month.

In 2017, general employees

In January 2017, all employees, including those of Group

3.0

3.72

2.29
1.76

2.0
1.0
0.0

2013

2014

2015

2017 (YEAR)

2016▶ Number of female managers (Showa Denko)

2013

2014
14

2015
18

2016
23

2017
26

28

TOPIC

Denko K.K. received training on

Practical Guide and discussed the content at their workplaces.

harassment. Also, copies of a leaflet

Moreover, each director and manager of the Group signed an

on discrimination targeting pregnant

oath of compliance with the code of conduct and submitted it

women and members of the LGBT

Given CEO’s commendation for outstanding
diversity promotion in 2017

to the Group CEO.

community were distributed toShowa Denko HD Yamagata K.K. (SHDY) was commended by

employees.

the CEO for its outstanding diversity promotion in 2017. In the

3. Corporate Ethics Hotline
detect from across the Showa Denko Group any incidents of

3.44
2.99

working at the head office of Showa

companies outside Japan, read Our Code of Conduct and Its

We operate the Corporate Ethics Hotline so as to be able to(%)

for diversity promotion. We also conducted other activities tothe Ministry of Justice was proposing, such as those related to

2 Activities for Corporate Ethics Monthunconsolidated basis)companies in Japan convened to discuss challenges to be met

promotion of communication) and on human right themes that
Dowa issues, LGBT issues, and Hansen’s disease.

▶ Percentage of women in managerial roles at Showa Denko (on an

4.0

Awareness-raising activities regarding human rights

year to continue their edification on these topics. In 2017, eachmore of their abilities.

Activities in 2017

noncompliance, unfair behaviors, and other incidents involving

following, the leader of SHDY’s manufacturing group 1, which has
Leaflet designed to help
eliminate discrimination

noncompliance or unfair and other behaviors that contravene

been implementing an initiative to foster communication with teammembers with hearing impairments, explains the initiative.
We began implementing the initiative because it seemed group

corporate ethical standards at an early stage in order to resolve

members with hearing impairments were having difficulties

them. Group employees along with suppliers, local residents,

understanding what other group members were asking them to do. In

and other stakeholders can report wrongdoing to online

an effort to solve this problem, we conducted surveys and found out

contact points accessible via the intranet and Internet.

it would be useful if other employees learned Japanese sign language.
Receiving support from those with hearing impairments, we createda video to teach the signs for about 60 words that are commonly used
at SHDY. In addition, we asked the group members to write essays tohelp other employees deepen their understanding of the disability. The
essays are posted on SHDY’s intranet for use by all group members.
Moreover, we have held seminars on sign language. Through thesemeasures, we were able to foster communication with our colleagues
with hearing impairments, which has contributed to making theworkplace atmosphere even better.
In the future, we would like toconduct the activity across SHDY, notjust for the manufacturing group.

that the primary language used by members with hearing impairments
is Japanese sign language, the grammar of which is different from thatof the Japanese language.

Members of manufacturing group
1, shown expressing “SHDY” in sign
language

To foster smooth communication with these workers, we thought
Seminar on harassment

62

S HOWA DENKO R EP ORT 2 O18

S HOWA DENKO R EP OR T 2 O18

63

About Showa Denko

Governance

CSR

CSR Management of
Showa Denko

Financial

Stakeholder
communications

Highlights of
CSR Activities

Responsible Care

CSR procurement

Human Rights andLabor Practice

Human Rights and Labor Practice
Human Rights and Corporate Ethics
Basic policies
The Showa Denko Group regards respect for human rights
as the basis of its business management and is continuously▶ Number of requests for consultation received by the Corporate

Diversity

Ethics Hotline
2013

2014
41

2015
44

2016
46

2017
29

The Showa Denko Group works to empower female and non-

Basic policies

45* Including anonymous requests.(Showa Denko Group and some overseas group companies)2．
Support programs to help female/foreign
employees play active roles
Japanese employees in Japan.

The Showa Denko Group has been promoting diversity as one ofShowa Denko K.K. aims to increase the percentage of womenits management strategies. Under the slogans of “Make the mostamong section managers and those in higher positions to

implementing measures to raise all of its employees’ awareness ofof the potential of yourself” and “Make the most of the potential

5% by 2020 in its action plan made in line with the Act onhuman rights. In Japan, we intensively conduct awareness-raisingof others,” we are working to develop the Group’s employees andAdvancement of Measures to Support Raising Next-Generation

activities at each site during Human Rights Week every December.

organizations into people and entities able to cooperate withChildren. To this end, in 2017, we held training seminars foreach other while making use of their diverse features, values, andfemale mid-level career track employees.

We also include a program on human rights and corporate ethics

TOPIC

in the programs comprising our level-specific training.

ideas to continue making profit and creating new value.

We are also sequentially creating and supplying multilingual

Establishing a multilingual contact for whistleblowers

Activities in 2017

versions of internal documents as a means of retaining nonJapanese employees and empowering them to demonstrate

The Showa Denko Group accepts internal reports about
Group employees or directors on the intranet and via Showa

The Showa Denko Group has been conducting awareness-raising

Denko’s Corporate Ethics Hotline service (in Japanese and English).

activities for human rights and corporate ethics across the board.

In consideration of the increase in the number of national staff in

We have been promoting diversity at each of our sites andGroup companies in Japan.

multiple countries in line with the globalization of our business,

1 Awareness-raising activities regarding humanrightswe also established an external multilingual contact for whistleblowers this April.
We respect the privacy of individual whistle-blowers and equally

1. Activity to change the corporate culture
As its goal for diversity, the Showa Denko Group aims toprohibit the unfair treatment of reporters by their companies

transform itself into an organization where a diverse range of

In Japan, the Showa Denko Group aims to give all employees 1.5

regardless of whether the report was made via the multilingual

employees can demonstrate their respective abilities, for whichhours of education on human rights and corporate ethics eachcontact or the Corporate Ethics Hotline.

we will improve management practices, communication, andbase of the Group held study seminars on human right-related
issues familiar to employees (prevention of harassment andWe will ensure “compliance with social and corporate ethicalnorms” by detecting noncompliance, unfair behaviors, and othercontraventions as early as possible.

work styles at our workplaces.
In 2017, executives of Showa Denko’s sites and Group

foster reform of the corporate culture as the basis for diversity.
Since 2013, the Group CEO has annually commended Showa

4. Handling harassment
To eliminate all kinds of harassment at its workplaces, the Showa

Denko’s sites and Group companies that have conducted

Denko Group is continuing to organize awareness-raising andoutstanding diversity promotion activities.

The Showa Denko Group sets every January as Corporate Ethics

other activities for employees.

Month.

In 2017, general employees

In January 2017, all employees, including those of Group

3.0

3.72

2.29
1.76

2.0
1.0
0.0

2013

2014

2015

2017 (YEAR)

2016▶ Number of female managers (Showa Denko)

2013

2014
14

2015
18

2016
23

2017
26

28

TOPIC

Denko K.K. received training on

Practical Guide and discussed the content at their workplaces.

harassment. Also, copies of a leaflet

Moreover, each director and manager of the Group signed an

on discrimination targeting pregnant

oath of compliance with the code of conduct and submitted it

women and members of the LGBT

Given CEO’s commendation for outstanding
diversity promotion in 2017

to the Group CEO.

community were distributed toShowa Denko HD Yamagata K.K. (SHDY) was commended by

employees.

the CEO for its outstanding diversity promotion in 2017. In the

3. Corporate Ethics Hotline
detect from across the Showa Denko Group any incidents of

3.44
2.99

working at the head office of Showa

companies outside Japan, read Our Code of Conduct and Its

We operate the Corporate Ethics Hotline so as to be able to(%)

for diversity promotion. We also conducted other activities tothe Ministry of Justice was proposing, such as those related to

2 Activities for Corporate Ethics Monthunconsolidated basis)companies in Japan convened to discuss challenges to be met

promotion of communication) and on human right themes that
Dowa issues, LGBT issues, and Hansen’s disease.

▶ Percentage of women in managerial roles at Showa Denko (on an

4.0

Awareness-raising activities regarding human rights

year to continue their edification on these topics. In 2017, eachmore of their abilities.

Activities in 2017

noncompliance, unfair behaviors, and other incidents involving

following, the leader of SHDY’s manufacturing group 1, which has
Leaflet designed to help
eliminate discrimination

noncompliance or unfair and other behaviors that contravene

been implementing an initiative to foster communication with teammembers with hearing impairments, explains the initiative.
We began implementing the initiative because it seemed group

corporate ethical standards at an early stage in order to resolve

members with hearing impairments were having difficulties

them. Group employees along with suppliers, local residents,

understanding what other group members were asking them to do. In

and other stakeholders can report wrongdoing to online

an effort to solve this problem, we conducted surveys and found out

contact points accessible via the intranet and Internet.

it would be useful if other employees learned Japanese sign language.
Receiving support from those with hearing impairments, we createda video to teach the signs for about 60 words that are commonly used
at SHDY. In addition, we asked the group members to write essays tohelp other employees deepen their understanding of the disability. The
essays are posted on SHDY’s intranet for use by all group members.
Moreover, we have held seminars on sign language. Through thesemeasures, we were able to foster communication with our colleagues
with hearing impairments, which has contributed to making theworkplace atmosphere even better.
In the future, we would like toconduct the activity across SHDY, notjust for the manufacturing group.

that the primary language used by members with hearing impairments
is Japanese sign language, the grammar of which is different from thatof the Japanese language.

Members of manufacturing group
1, shown expressing “SHDY” in sign
language

To foster smooth communication with these workers, we thought
Seminar on harassment

62

S HOWA DENKO R EP ORT 2 O18

S HOWA DENKO R EP OR T 2 O18

63

About Showa Denko

CSR

Governance

Financial

CSR Management of
Showa Denko

Stakeholder
communications

Highlights of
CSR Activities

Responsible Care

CSR procurement

Human Rights andLabor Practice

Human Rights and Labor Practice

3. Employment of handicapped persons
As part of its efforts to promote diversity, the Showa Denko Group

Development of Human Resources

Creating a comfortable workplace

Basic policies

Basic policies

continues to proactively employ people with disabilities in Japan.
At the head office of Showa Denko K.K., in 2017, we began
accepting orders for the complete deletion of data from end-of-▶ Number of employees who took the advantage of the work-lifebalance support systems Showa Denko (2017)
Male

The Showa Denko Group develops its workforce through a

It is important for the growth of our Group that it meets social

variety of programs.

needs through the lively work of employees who are able
to live in harmony with society. The Showa Denko Group islife personal computers in addition to orders for the printing of

FemaleTotal

Childcare leave

70

42

112

Family care leave

2

1

3

Shortened working hours forchildcare/family care

0

33

33

implementing measures to help individual employees leadbusiness cards and others, thereby increasing the kinds of jobs for

3. Relations with the labor union

fulfilling lives as members of the community.

employees with intellectual and mental disabilities.

Training System

The company and the labor union have established arelationship of trust over many years by establishing (1)▶ Ratio of handicapped employees

(%)
3.0

2.71

2.64

2.48

2.34

2.5

● Showa Denko
Legal requirement
2.78

Showa Denko’s training system comprises mainly of Programs bysuitable for the role and expected career path of each employee
is provided annually. To support self-development, we also offer
correspondence courses and e-learning programs. Moreover, we

2.0

2.0

2.0

2.0

proactively develop human resources with international caliber.

2.0

2.0

To this end, we provide employees with opportunities to study

1.5

foreign languages at universities outside Japan, obtain an MBA,

Solutions through discussions, (2) Pursuit of stable employment

Activities in 2017

Role, Programs by Challenge, and Programs by Function, and training

and job satisfaction, and (3) Working together to improve work
conditions through company growth and higher profitability as

1. Work style reform
We continued to implement measures to reduce total working
hours and increase the rate of paid leave taking among

the basis of the labor agreement.
In 2017, in addition to regular dialogues via the LaborManagement Committee, extra meetings were held to discuss

employees again in 2017.

a range of themes, such as the compensation system and thereview of the relevant rules.

▶ Trend in working hours (per employee per year)

receive practical training at our subsidiaries outside the country,

1.0

2013/6

2014/6

2015/6

2016/62017/6

2013

2014

2015

2016

2017

Showa Denko

2,009.1

2,023.1

2,002.9

2,008.8

2,011.9

Manufacturing industry average*

2,031.6

2,047.2

2,053.2

2,049.6

2,053.2

and participate in manager training provided individually by these(Year/Month)subsidiaries.

4. Employment of the aged
Personnel system

In Japan, the Showa Denko Group reemploys retired employees
so that they can continue to use their long-accumulated skills

Showa Denko is operating a personnel system that values growth andand expertise at their workplaces.

development. Known as the “MB-OJT system,” it incorporates OJT elements* The manufacturing industry average was prepared using the data in the "Annual report on themonthly labour survey" published by the Ministry of Health, Labour and Welfare Annual paid
holidays taken (per employee per year)

2013

In the face-to-face discussion between employees and their▶ Ratio of reemployed employees

2013

2014
88

supervisors called “commu-cussion,” employees and supervisors

2015
90

2016
85

* Include group companies detailer, a person of outside transfer

develop a shared understanding of the employee’s targets and

2017
89

83

performance appraisals and discuss what has and what has not beenachieved as well as what lessons were learned for the future. This helps
individual employees to achieve self-growth and development.

2014

2015

Basic policies
To work vigorously without anxiety, it is important for each of
employees to maintain and promote health of his/her own and▶ Annual paid holidays taken (per employee per year)

into the conventional management-by-objectives (MBO) framework.

Creating a comfortable workplace

the whole family throughout lifetime.

2016

2017

Toward this end, we are currently implementing the Showa Denko

Showa Denko

12.8

13.2

13.6

13.6

13.8

Group Vivid Health Promotion Plan, a two-year (2017 to 2018) plan

Manufacturing industry average*

10.2

10.3

10.1

10.4

10.7

aimed mainly at the prevention and improvement of lifestyle-* The manufacturing industry average was prepared using the data in the "General survey on
working conditions" published by the Ministry of Health, Labour and Welfare.

related diseases and the development of sound mental health.

2. Promoting sound work-life balance

Activities in 2017

Showa Denko’s work-life balance support programs are designed
to meet the needs of employees at different stages of life. In

Employee surveys
The Showa Denko Group conducts employee surveys to quantitatively
understand the situations of individual employees and theirorganizations.
In December 2017, we conducted the second employees’ jobsatisfaction survey, to which 8,894 employees of Group companies inJapan and some abroad responded, for a response rate of 90.7%.

64

S HOWA DENKO R EP ORT 2 O18

2016, we continued our efforts to encourage both men and

To help employees prevent and recover from lifestyle-related diseases,

women to use the programs.

we provided follow-up support, including follow-up care and healthguidance, after health checkups. We also implemented the Mental
Health Promotion Plan established in 2012 as part of our steady efforts▶ Support programs

to promote the development of healthy minds.

Main Systems

Description

Childcare leave

Eligible: Employees with one or more years of continuous service
who live with dependent children of less than two years of age.
Available through the day preceding the child's second birthday.

Japanese Industrial Safety and Health Act, conducted follow-up

Shortenedworking hours
for childcare/family care

Eligible: Employees with one or more years of continuous service
and who have a child of preschool age or who are eligible forfamily-care leave. Eligible employees may choose to reduce
standard working hours by up to two hours/day.

at workplaces found to be highly stressful to promote employees’

Cumulativeleave

Eligible: Employees who have accumulated leave time (annual
paid holidays carried over from year to year). Employees may
take days off to participate in a school event (up to and including
elementary school children), respond to temporary closing ofclasses, or nurse a child or family member.

Family careleave

Eligible: Employees with one or more years of continuous service
who have a family member requiring nursing care are eligible.
Employees may take this leave for a total of 93 days or a totalof 12 months over two years from the start of the leave period,
depending upon the relationship between the employee andthe family member in need of care.

We also carried out stress checks of employees in line with theactivities for those with high mental stress, and made improvements
mental health. In recognition of these activities, Showa Denko in 2018
was again named one of the White
500 companies that are judged asdemonstrating excellent health andproductivity management. This marked
the second consecutive year we madethe list.

S HOWA DENKO R EP OR T 2 O18

65

About Showa Denko

CSR

Governance

Financial

CSR Management of
Showa Denko

Stakeholder
communications

Highlights of
CSR Activities

Responsible Care

CSR procurement

Human Rights andLabor Practice

Human Rights and Labor Practice

3. Employment of handicapped persons
As part of its efforts to promote diversity, the Showa Denko Group

Development of Human Resources

Creating a comfortable workplace

Basic policies

Basic policies

continues to proactively employ people with disabilities in Japan.
At the head office of Showa Denko K.K., in 2017, we began
accepting orders for the complete deletion of data from end-of-▶ Number of employees who took the advantage of the work-lifebalance support systems Showa Denko (2017)
Male

The Showa Denko Group develops its workforce through a

It is important for the growth of our Group that it meets social

variety of programs.

needs through the lively work of employees who are able
to live in harmony with society. The Showa Denko Group islife personal computers in addition to orders for the printing of

FemaleTotal

Childcare leave

70

42

112

Family care leave

2

1

3

Shortened working hours forchildcare/family care

0

33

33

implementing measures to help individual employees leadbusiness cards and others, thereby increasing the kinds of jobs for

3. Relations with the labor union

fulfilling lives as members of the community.

employees with intellectual and mental disabilities.

Training System

The company and the labor union have established arelationship of trust over many years by establishing (1)▶ Ratio of handicapped employees

(%)
3.0

2.71

2.64

2.48

2.34

2.5

● Showa Denko
Legal requirement
2.78

Showa Denko’s training system comprises mainly of Programs bysuitable for the role and expected career path of each employee
is provided annually. To support self-development, we also offer
correspondence courses and e-learning programs. Moreover, we

2.0

2.0

2.0

2.0

proactively develop human resources with international caliber.

2.0

2.0

To this end, we provide employees with opportunities to study

1.5

foreign languages at universities outside Japan, obtain an MBA,

Solutions through discussions, (2) Pursuit of stable employment

Activities in 2017

Role, Programs by Challenge, and Programs by Function, and training

and job satisfaction, and (3) Working together to improve work
conditions through company growth and higher profitability as

1. Work style reform
We continued to implement measures to reduce total working
hours and increase the rate of paid leave taking among

the basis of the labor agreement.
In 2017, in addition to regular dialogues via the LaborManagement Committee, extra meetings were held to discuss

employees again in 2017.

a range of themes, such as the compensation system and thereview of the relevant rules.

▶ Trend in working hours (per employee per year)

receive practical training at our subsidiaries outside the country,

1.0

2013/6

2014/6

2015/6

2016/62017/6

2013

2014

2015

2016

2017

Showa Denko

2,009.1

2,023.1

2,002.9

2,008.8

2,011.9

Manufacturing industry average*

2,031.6

2,047.2

2,053.2

2,049.6

2,053.2

and participate in manager training provided individually by these(Year/Month)subsidiaries.

4. Employment of the aged
Personnel system

In Japan, the Showa Denko Group reemploys retired employees
so that they can continue to use their long-accumulated skills

Showa Denko is operating a personnel system that values growth andand expertise at their workplaces.

development. Known as the “MB-OJT system,” it incorporates OJT elements* The manufacturing industry average was prepared using the data in the "Annual report on themonthly labour survey" published by the Ministry of Health, Labour and Welfare Annual paid
holidays taken (per employee per year)

2013

In the face-to-face discussion between employees and their▶ Ratio of reemployed employees

2013

2014
88

supervisors called “commu-cussion,” employees and supervisors

2015
90

2016
85

* Include group companies detailer, a person of outside transfer

develop a shared understanding of the employee’s targets and

2017
89

83

performance appraisals and discuss what has and what has not beenachieved as well as what lessons were learned for the future. This helps
individual employees to achieve self-growth and development.

2014

2015

Basic policies
To work vigorously without anxiety, it is important for each of
employees to maintain and promote health of his/her own and▶ Annual paid holidays taken (per employee per year)

into the conventional management-by-objectives (MBO) framework.

Creating a comfortable workplace

the whole family throughout lifetime.

2016

2017

Toward this end, we are currently implementing the Showa Denko

Showa Denko

12.8

13.2

13.6

13.6

13.8

Group Vivid Health Promotion Plan, a two-year (2017 to 2018) plan

Manufacturing industry average*

10.2

10.3

10.1

10.4

10.7

aimed mainly at the prevention and improvement of lifestyle-* The manufacturing industry average was prepared using the data in the "General survey on
working conditions" published by the Ministry of Health, Labour and Welfare.

related diseases and the development of sound mental health.

2. Promoting sound work-life balance

Activities in 2017

Showa Denko’s work-life balance support programs are designed
to meet the needs of employees at different stages of life. In

Employee surveys
The Showa Denko Group conducts employee surveys to quantitatively
understand the situations of individual employees and theirorganizations.
In December 2017, we conducted the second employees’ jobsatisfaction survey, to which 8,894 employees of Group companies inJapan and some abroad responded, for a response rate of 90.7%.

64

S HOWA DENKO R EP ORT 2 O18

2016, we continued our efforts to encourage both men and

To help employees prevent and recover from lifestyle-related diseases,

women to use the programs.

we provided follow-up support, including follow-up care and healthguidance, after health checkups. We also implemented the Mental
Health Promotion Plan established in 2012 as part of our steady efforts▶ Support programs

to promote the development of healthy minds.

Main Systems

Description

Childcare leave

Eligible: Employees with one or more years of continuous service
who live with dependent children of less than two years of age.
Available through the day preceding the child's second birthday.

Japanese Industrial Safety and Health Act, conducted follow-up

Shortenedworking hours
for childcare/family care

Eligible: Employees with one or more years of continuous service
and who have a child of preschool age or who are eligible forfamily-care leave. Eligible employees may choose to reduce
standard working hours by up to two hours/day.

at workplaces found to be highly stressful to promote employees’

Cumulativeleave

Eligible: Employees who have accumulated leave time (annual
paid holidays carried over from year to year). Employees may
take days off to participate in a school event (up to and including
elementary school children), respond to temporary closing ofclasses, or nurse a child or family member.

Family careleave

Eligible: Employees with one or more years of continuous service
who have a family member requiring nursing care are eligible.
Employees may take this leave for a total of 93 days or a totalof 12 months over two years from the start of the leave period,
depending upon the relationship between the employee andthe family member in need of care.

We also carried out stress checks of employees in line with theactivities for those with high mental stress, and made improvements
mental health. In recognition of these activities, Showa Denko in 2018
was again named one of the White
500 companies that are judged asdemonstrating excellent health andproductivity management. This marked
the second consecutive year we madethe list.

S HOWA DENKO R EP OR T 2 O18

65

About Showa Denko

Governance

CSR

Financial

Performance DataClassification

Items

Boundaries

Units

2015

2016

ReportNumber2017

Corporate ethics and complianceClassification
Exchange with local communities

Number of requests for consultation
received by the Corporate Ethics Hotline

Showa Denko group

cases

46

29

45

62

Labor practices
Number of employees

MaleShowa Denko K.K.

persons

3,304

3,244

3,198

—

FemaleShowa Denko K.K.

persons

386

403

418

—

Total number of employees in Japan—

persons

5,232

5,385

5,345

—

persons

641

690

742

—

Consolidated subsidiaries Japan

persons

5,873

6,075

6,087

—

2015

2016

ReportNumber2017

EventsShowa Denko K.K.

persons

7,691

7,866

6,848

—

Facilities rented

Showa Denko K.K.

hours

10,762

11,772

14,557—

Guided plant tours

Showa Denko K.K.

persons

6,467

7,524

6,697

—

Harmonizing with local economy: spend

Showa Denko K.K.

thousand yen

2,466

2,110

2,132

—

Aluminum can recycling: participation rate

Showa Denko K.K.

%

98.8

98.9

97.8

—

Aluminum can recycling: proceeds

Showa Denko K.K.

thousand yen

1,336

888

1,343

—

Collaborating with NPOs and local organizations: spend

Showa Denko K.K.

thousand yen

120

252

392

—

CO2 (energy source origin)

Showa Denko groupkt-CO2

2,538

2,545

2,591

52

CO2 (non-energy source origin)

Showa Denko groupkt-CO2

87

85

100

52

Environmental conservation
Discharged amounts of greenhouse gases

Consolidated subsidiaries Japan

persons

3,366

2,963

3,599

—

Consolidated subsidiaries Japan

persons

1,322

1,108

1,178

—

GHGs other than CO2

Showa Denko groupkt-CO2

62

57

55

52

Showa Denko groupkt-CO2

2,687

2,686

2,746

52

Showa Denko K.K.

kt-CO2

2,203

2,211

2,177

—

Group companies in Japan

kt-CO2

484

475

570

—

Total number of employees outside of Japan

Consolidated subsidiaries Japan

persons

4,688

4,071

4,777

—

Total

Total

Consolidated subsidiaries Japan

persons

10,561

10,146

10,864—

Showa Denko K.K. / Group companies in Japan

Male

Showa Denko K.K.

persons

94

104

78

—

FemaleShowa Denko K.K.

persons

21

18

14

—

Showa Denko K.K.
Showa Denko K.K.

28

—
63

The amount of water used

2.99

3.44

3.72

63

85

89

83

64

Number of job separation (excluding retirement and permanent transfer )

%

2.71

2.78

2.64

2,002.9

2,008.8

2,011.9

Showa Denko K.K.

days

13.6

13.6

13.8

65

Showa Denko K.K.

persons

52

68

72

—

Showa Denko K.K.

Showa Denko K.K.
Showa Denko K.K.
Showa Denko K.K.

%
age
years
hours
persons

1.4
40.2
17.2
17.9
69

1.9
40.1
16.9
18.2
65

2.0
40.0
16.6
18.8
70

Wastewater volume

64

hours

Showa Denko K.K.

Male

26

92

%

Annual paid holidays taken (per employee per year)

The average overtime work per employee per month

23

122

%

Showa Denko K.K.

The average length of continuous employment

persons

115

Showa Denko K.K.

Working hours (per employee per year)

The average age

persons

Total
Transportation sector's CO2 emissions

Showa Denko K.K.

Showa Denko K.K.

Job separation rate (excluding retirement and permanent transfer)

65

The amount of industrial waste discharge

Final landfill volumes of industrial waste——

Final landfill rate of industrial waste—

Release of PRTR-listed substances

Into air—Into water

65

2,687

2,687

2,747

—

22.8

23.5

24.6

53

Showa Denko K.K.

million m3

5,535

5,411

5,460

50

Group companies in Japan

million m3

469

461

513

50

Showa Denko K.K.

thousand t

28,671

26,62028,58250

Group companies in Japan

thousand t

3,704

3,733

4,475

50

Showa Denko K.K.

t20,974

20,03824,16650

Group companies in Japant

10,7399,360

13,14550

Showa Denko K.K.

t

752

254

356

50

Group companies in Japan

t

99

69

92

50

Group companies in Japan

%

0.95

0.31

0.38

55

Showa Denko K.K.

t

153

148

145

55

Group companies in Japan

t

262

242

415

55

Showa Denko K.K.

t

19

14

15

55

Group companies in Japan

t

1

1

1

55

Showa Denko K.K.

t

172

163

160

55

Group companies in Japan

t

263

243

416

55

Showa Denko K.K.

persons

41

33

42

Total

Showa Denko K.K.

persons

110

98

112

65

Male

Showa Denko K.K.

persons

0

1

2

65

FemaleShowa Denko K.K.

persons

0

1

1

65

Total amounts released of harmful atmospheric pollutants

Showa Denko K.K.

t

14

14

14

54

65

Discharged amounts of substances withatmospheric impact

SOx

Showa Denko K.K.

t

360

324

326

54

NOx

Showa Denko K.K.

t

1,413

1,255

1,324

54

Soot and dust

Showa Denko K.K.

t

87

63

71

54

COD

Showa Denko K.K.

t

365

360

346

54

Total phosphorus

Showa Denko K.K.

t

9

8

8

54

Total nitrogenShowa Denko K.K.

t

503

480

457

54

Total amount of capital investment

Showa Denko K.K.

million yen

2,492

1,962

1,560

51

Total expenses

Showa Denko K.K.

million yen

3,186

2,651

3,488

51

Economic benefits

Showa Denko K.K.

million yen

704

794

851

51

Annual numbers of complaints (With a score of 100
representing the number of claims in 2015)

Showa Denko group

%

100

71

48

59

Male
FemaleTotal

Ratio of reinstated employees to those who took childcare leave

Showa Denko K.K.
Showa Denko K.K.
Showa Denko K.K.
Showa Denko K.K.
Showa Denko K.K.

persons
persons
persons
persons
%

0
1
34
35
100.0

2
1
54
55
100.0

3
0
33
33
100.0

65

kt-CO2
kt-CO2

Showa Denko group

Female

Total

65
65

persons

2,868

2,857

2,832

—

Ratio of unionized Employees

Showa Denko K.K.

%

77.7

78.3

78.3

—

Infrequency rate of lost-time injuries

cases

4

3

7

0.25

0.13

0.39

57

Showa Denko group

0.15

0.15

0.22

57

40

38

39

61

CSR procurement
cases

Local community and social contribution
Dispatched employees as instructors

Accepted interns

Improvement of the environment aroundthe worksites

Cleaning activities

Promotion of arts, culture and sports

Cooperation for and granting subsidies to arts, culture
and sports: spend

S HOWA DENKO R EP ORT 2 O18

Environmental accounting

56

Showa Denko K.K.

CSR visits

Discharged amounts of substances withwater quality impact—

Showa Denko K.K.

Showa Denko group

Total

65

Number of unionized Employees

Number of incidents resulting in lost-time injuries

66

Units

FemaleRatio of handicapped employees

Education

Boundaries

Male

Female managers ratio

Labor union

3,616

Consolidated subsidiaries Japan

Ratio of reemployed employees

Shortened working hours
for childcare / family care

3,647

Consolidated subsidiaries Japan

Number of female managers

Family care leave

3,690

FemaleTotal

Childcare leavepersons

Male

Total number of employees in Japan

Number of new employees

Showa Denko K.K.

Community development andsocial welfare

Items

Showa Denko K.K.

cases

25

20

30

—

Showa Denko K.K.

man-hours

585

716

768

—

Showa Denko K.K.

cases

27

28

31

—

Showa Denko K.K.

persons

74

85

66

—

Showa Denko K.K.

cases

120

105

83

—

Showa Denko K.K.

hours in total

6,780

5,906

5,215

—

Showa Denko K.K.

thousand yen

5,378

8,800

9,324

—

Quality Assurance*Scope of the Showa Denko Group :(Japan) SunAllomer Ltd., (2017-), Showa Denko Gas Products Co., Ltd., Showa Denko Ceramics Co., Ltd,.(Toyama), Showa Aluminum Can Corp., Showa Denko Packaging Co., Ltd., Niigata
Showa K.K. Nippon Polytech Corp., Showa Denko Kenso ,Co., Ltd., Showa Denko HD Yamagata K.K. and Showa Fine Ceramics Co.,Ltd.,. GHG emissions include those for Showa Denko
Electronics K.K. and Tsurusaki Kyodo Doryoku Co., Ltd., and exclude those Niigata Showa K.K. Nippon Polytech Corp., Showa Denko Kenso ,Co., Ltd., Showa Fine Ceramics Co., Ltd.,
which are not required to report emissions as emitters designated under the Act on Promotion of Global Warming Countermeasures.
(Overseas) Taiwan Showa Chemicals Manufacturing Co., Ltd.
(including Showa Specialty Gas (Taiwan.) Co., Ltd.),Zhejang Quzhou Juhua Showa Electoronic Chemical Materials Co., Ltd., Showa Denko Carbon, Inc., Showa Denko Sichuan
Carbon Inc. ,Showa Denko Aluminum (Nantong) Co., Ltd., SHOTIC Europa Industria de Aluminio Lda. ,Showa Aluminum Manufacturing Philippines Corporation, Showa Denko (Dalian) Co., Ltd., Showa Denko HD Singapore Pte Ltd. ,Showa Denko HD (Malaysia) Sdn.Bhd. ,Showa
Denko HD Trace corp., Ganzhou Zhaori Rare Earth New Materials Co., Ltd.,Showa Denko Rare-Earth Vietnam Co., Ltd.,Shanghai Showa Highpolymer Co., Ltd.,(2017~) SHOWADENKO New Material (Zhuhai) CO.,LTD.(2017~)

S HOWA DENKO R EP OR T 2 O18

67

About Showa Denko

Governance

CSR

Financial

Performance DataClassification

Items

Boundaries

Units

2015

2016

ReportNumber2017

Corporate ethics and complianceClassification
Exchange with local communities

Number of requests for consultation
received by the Corporate Ethics Hotline

Showa Denko group

cases

46

29

45

62

Labor practices
Number of employees

MaleShowa Denko K.K.

persons

3,304

3,244

3,198

—

FemaleShowa Denko K.K.

persons

386

403

418

—

Total number of employees in Japan—

persons

5,232

5,385

5,345

—

persons

641

690

742

—

Consolidated subsidiaries Japan

persons

5,873

6,075

6,087

—

2015

2016

ReportNumber2017

EventsShowa Denko K.K.

persons

7,691

7,866

6,848

—

Facilities rented

Showa Denko K.K.

hours

10,762

11,772

14,557—

Guided plant tours

Showa Denko K.K.

persons

6,467

7,524

6,697

—

Harmonizing with local economy: spend

Showa Denko K.K.

thousand yen

2,466

2,110

2,132

—

Aluminum can recycling: participation rate

Showa Denko K.K.

%

98.8

98.9

97.8

—

Aluminum can recycling: proceeds

Showa Denko K.K.

thousand yen

1,336

888

1,343

—

Collaborating with NPOs and local organizations: spend

Showa Denko K.K.

thousand yen

120

252

392

—

CO2 (energy source origin)

Showa Denko groupkt-CO2

2,538

2,545

2,591

52

CO2 (non-energy source origin)

Showa Denko groupkt-CO2

87

85

100

52

Environmental conservation
Discharged amounts of greenhouse gases

Consolidated subsidiaries Japan

persons

3,366

2,963

3,599

—

Consolidated subsidiaries Japan

persons

1,322

1,108

1,178

—

GHGs other than CO2

Showa Denko groupkt-CO2

62

57

55

52

Showa Denko groupkt-CO2

2,687

2,686

2,746

52

Showa Denko K.K.

kt-CO2

2,203

2,211

2,177

—

Group companies in Japan

kt-CO2

484

475

570

—

Total number of employees outside of Japan

Consolidated subsidiaries Japan

persons

4,688

4,071

4,777

—

Total

Total

Consolidated subsidiaries Japan

persons

10,561

10,146

10,864—

Showa Denko K.K. / Group companies in Japan

Male

Showa Denko K.K.

persons

94

104

78

—

FemaleShowa Denko K.K.

persons

21

18

14

—

Showa Denko K.K.
Showa Denko K.K.

28

—
63

The amount of water used

2.99

3.44

3.72

63

85

89

83

64

Number of job separation (excluding retirement and permanent transfer )

%

2.71

2.78

2.64

2,002.9

2,008.8

2,011.9

Showa Denko K.K.

days

13.6

13.6

13.8

65

Showa Denko K.K.

persons

52

68

72

—

Showa Denko K.K.

Showa Denko K.K.
Showa Denko K.K.
Showa Denko K.K.

%
age
years
hours
persons

1.4
40.2
17.2
17.9
69

1.9
40.1
16.9
18.2
65

2.0
40.0
16.6
18.8
70

Wastewater volume

64

hours

Showa Denko K.K.

Male

26

92

%

Annual paid holidays taken (per employee per year)

The average overtime work per employee per month

23

122

%

Showa Denko K.K.

The average length of continuous employment

persons

115

Showa Denko K.K.

Working hours (per employee per year)

The average age

persons

Total
Transportation sector's CO2 emissions

Showa Denko K.K.

Showa Denko K.K.

Job separation rate (excluding retirement and permanent transfer)

65

The amount of industrial waste discharge

Final landfill volumes of industrial waste——

Final landfill rate of industrial waste—

Release of PRTR-listed substances

Into air—Into water

65

2,687

2,687

2,747

—

22.8

23.5

24.6

53

Showa Denko K.K.

million m3

5,535

5,411

5,460

50

Group companies in Japan

million m3

469

461

513

50

Showa Denko K.K.

thousand t

28,671

26,62028,58250

Group companies in Japan

thousand t

3,704

3,733

4,475

50

Showa Denko K.K.

t20,974

20,03824,16650

Group companies in Japant

10,7399,360

13,14550

Showa Denko K.K.

t

752

254

356

50

Group companies in Japan

t

99

69

92

50

Group companies in Japan

%

0.95

0.31

0.38

55

Showa Denko K.K.

t

153

148

145

55

Group companies in Japan

t

262

242

415

55

Showa Denko K.K.

t

19

14

15

55

Group companies in Japan

t

1

1

1

55

Showa Denko K.K.

t

172

163

160

55

Group companies in Japan

t

263

243

416

55

Showa Denko K.K.

persons

41

33

42

Total

Showa Denko K.K.

persons

110

98

112

65

Male

Showa Denko K.K.

persons

0

1

2

65

FemaleShowa Denko K.K.

persons

0

1

1

65

Total amounts released of harmful atmospheric pollutants

Showa Denko K.K.

t

14

14

14

54

65

Discharged amounts of substances withatmospheric impact

SOx

Showa Denko K.K.

t

360

324

326

54

NOx

Showa Denko K.K.

t

1,413

1,255

1,324

54

Soot and dust

Showa Denko K.K.

t

87

63

71

54

COD

Showa Denko K.K.

t

365

360

346

54

Total phosphorus

Showa Denko K.K.

t

9

8

8

54

Total nitrogenShowa Denko K.K.

t

503

480

457

54

Total amount of capital investment

Showa Denko K.K.

million yen

2,492

1,962

1,560

51

Total expenses

Showa Denko K.K.

million yen

3,186

2,651

3,488

51

Economic benefits

Showa Denko K.K.

million yen

704

794

851

51

Annual numbers of complaints (With a score of 100
representing the number of claims in 2015)

Showa Denko group

%

100

71

48

59

Male
FemaleTotal

Ratio of reinstated employees to those who took childcare leave

Showa Denko K.K.
Showa Denko K.K.
Showa Denko K.K.
Showa Denko K.K.
Showa Denko K.K.

persons
persons
persons
persons
%

0
1
34
35
100.0

2
1
54
55
100.0

3
0
33
33
100.0

65

kt-CO2
kt-CO2

Showa Denko group

Female

Total

65
65

persons

2,868

2,857

2,832

—

Ratio of unionized Employees

Showa Denko K.K.

%

77.7

78.3

78.3

—

Infrequency rate of lost-time injuries

cases

4

3

7

0.25

0.13

0.39

57

Showa Denko group

0.15

0.15

0.22

57

40

38

39

61

CSR procurement
cases

Local community and social contribution
Dispatched employees as instructors

Accepted interns

Improvement of the environment aroundthe worksites

Cleaning activities

Promotion of arts, culture and sports

Cooperation for and granting subsidies to arts, culture
and sports: spend

S HOWA DENKO R EP ORT 2 O18

Environmental accounting

56

Showa Denko K.K.

CSR visits

Discharged amounts of substances withwater quality impact—

Showa Denko K.K.

Showa Denko group

Total

65

Number of unionized Employees

Number of incidents resulting in lost-time injuries

66

Units

FemaleRatio of handicapped employees

Education

Boundaries

Male

Female managers ratio

Labor union

3,616

Consolidated subsidiaries Japan

Ratio of reemployed employees

Shortened working hours
for childcare / family care

3,647

Consolidated subsidiaries Japan

Number of female managers

Family care leave

3,690

FemaleTotal

Childcare leavepersons

Male

Total number of employees in Japan

Number of new employees

Showa Denko K.K.

Community development andsocial welfare

Items

Showa Denko K.K.

cases

25

20

30

—

Showa Denko K.K.

man-hours

585

716

768

—

Showa Denko K.K.

cases

27

28

31

—

Showa Denko K.K.

persons

74

85

66

—

Showa Denko K.K.

cases

120

105

83

—

Showa Denko K.K.

hours in total

6,780

5,906

5,215

—

Showa Denko K.K.

thousand yen

5,378

8,800

9,324

—

Quality Assurance*Scope of the Showa Denko Group :(Japan) SunAllomer Ltd., (2017-), Showa Denko Gas Products Co., Ltd., Showa Denko Ceramics Co., Ltd,.(Toyama), Showa Aluminum Can Corp., Showa Denko Packaging Co., Ltd., Niigata
Showa K.K. Nippon Polytech Corp., Showa Denko Kenso ,Co., Ltd., Showa Denko HD Yamagata K.K. and Showa Fine Ceramics Co.,Ltd.,. GHG emissions include those for Showa Denko
Electronics K.K. and Tsurusaki Kyodo Doryoku Co., Ltd., and exclude those Niigata Showa K.K. Nippon Polytech Corp., Showa Denko Kenso ,Co., Ltd., Showa Fine Ceramics Co., Ltd.,
which are not required to report emissions as emitters designated under the Act on Promotion of Global Warming Countermeasures.
(Overseas) Taiwan Showa Chemicals Manufacturing Co., Ltd.
(including Showa Specialty Gas (Taiwan.) Co., Ltd.),Zhejang Quzhou Juhua Showa Electoronic Chemical Materials Co., Ltd., Showa Denko Carbon, Inc., Showa Denko Sichuan
Carbon Inc. ,Showa Denko Aluminum (Nantong) Co., Ltd., SHOTIC Europa Industria de Aluminio Lda. ,Showa Aluminum Manufacturing Philippines Corporation, Showa Denko (Dalian) Co., Ltd., Showa Denko HD Singapore Pte Ltd. ,Showa Denko HD (Malaysia) Sdn.Bhd. ,Showa
Denko HD Trace corp., Ganzhou Zhaori Rare Earth New Materials Co., Ltd.,Showa Denko Rare-Earth Vietnam Co., Ltd.,Shanghai Showa Highpolymer Co., Ltd.,(2017~) SHOWADENKO New Material (Zhuhai) CO.,LTD.(2017~)

S HOWA DENKO R EP OR T 2 O18

67

About Showa Denko

Governance

CSR

Financial

Third-party Verification
We received the third-party verification about the quantitative data concerning our CSR performance shown in this SHOWA DENKO CSR Report 2018 fromSGS Japan Inc.

68

S HOWA DENKO R EP ORT 2 O18

Financial

Message from CFO

70

Financial Highlights

71

Management’s Discussion and Analysis

72

Consolidated financial statements

76

Corporate Data

82

S HOWA DENKO R EP OR T 2 O18

69

About Showa Denko

Governance

CSR

Financial

Third-party Verification
We received the third-party verification about the quantitative data concerning our CSR performance shown in this SHOWA DENKO CSR Report 2018 fromSGS Japan Inc.

68

S HOWA DENKO R EP ORT 2 O18

Financial

Message from CFO

70

Financial Highlights

71

Management’s Discussion and Analysis

72

Consolidated financial statements

76

Corporate Data

82

S HOWA DENKO R EP OR T 2 O18

69

About Showa Denko

Governance

Message from CFO

Financial

CSR

Financial

Financial Highlights

Management’s Discussion
and Analysis

Consolidated financial
statements

Corporate Data

Financial Highlights (Showa Denko K.K. and Consolidated Subsidiaries)(million yen)

Message from CFO

For the year

2012

2013

2014

2015

2016

2017

Net sales

739,675

847,803872,785775,732

671,159

780,387

Operating income ( loss )28,10825,953

20,55133,50842,05377,818

3.8

3.1

2.4

4.3

6.3

10.0

Net income ( loss )23,44823,48821,731

32,05038,69063,962

Net income attribute to owners of the parent

9,368

9,065

2,929

921

12,30533,470Net cash provided by operating activities

53,31063,56566,996

61,17068,94967,284△ 41,741△ 55,203△ 46,876△ 42,497△53,754△29,914

11,5698,362

20,12018,674

15,19537,369△ 20,150△ 6,805△ 24,856△ 21,336△13,220△18,370

R&D expenditures

20,633

20,43520,362

20,28917,313

18,539

Capital expenditures

42,50344,37047,31844,05939,276

41,279Depreciation and amortization

46,232

39,77940,67342,137

38,761

38,454

2012

2013

2014

2015

2016

2017

Total assets

933,162

985,771

1,009,843

940,494

932,698

1,024,727

Total net assets

314,966

345,811

319,087

308,142

311,231364,997

Shareholders’ equity ratio ( % )

29.2

30.6

29.7

31.5

31.8

34.0

Return on equity ( ROE ) ( % )

3.6

3.2

1.0

0.3

4.1

10.4

342,262353,686

383,124

368,835

359,929

346,726

1.09

1.02

1.20

1.20

1.16

0.95

2012

2013

2014

2015

2016

2017

6.26

6.06

1.99

6.45

86.27

234.84

3

3

3

3

ー

50

Ratio of Operating income to sales ( % )We are working to further increase
our corporate value

Net cash provided by (used in) investing activitie
Free cash flow
Net cash provided by (used in) financing activities
CFO

Toshiharu Kato
In “Project 2020+,” we focus on improving our profitability and reducing

them to maintain the stability of our financial standing, make spot

profit fluctuations. We also set a rough target of 70 billion yen forinvestments, foster M&A for the expansion of individualized businesses,

operating income for 2020. For the financial results for 2017, weand return profit to shareholders.

achieved record-high operating income, exceeding the target. We willagain break the record in terms of operating income for 2018.
We will launch a new medium-term business plan in 2019, under

For greater corporate value, we will make ceaseless improvement
efforts and become a corporate group that gives satisfaction to all its
stakeholders.

which we aim to raise the level of our net sales and operating income
through expansion of individualized businesses and to transform theGroup into one that can record high operating income in a stable▶ Interest-bearing Debt

manner.
To this end, we must make timely investments and avoid missing
any opportunities to expand individualized businesses for the growth(Billions of Yen)

400.0

342.3

of the Group. Moreover, we need to clarify the capital cost-based
selection criteria for plant and equipment investments in order to

353.7

368.8

346.7

300.0

1.2
1.20

make investments in a more selective manner. Toward increasing the

1.09

profit margin and improving the balance sheet, we will implement
financial strategies linked with management issues. The Showa

383.1■ Interest-bearing Debt
● D/E Ratio
1.6
359.9

1.20

1.16

1.02

0.8

Denko Group has long been working to improve its financial structure.
In consideration of the recent fundraising environment, we areconducting examinations to stabilize our D/E ratio at around 0.7 for theInterest-bearing debt
Debt/equity ratio (Times)
Per share (yen)Net income—primary
Cash dividends (applicable to the period*)

0.95

200.0

At year-end

100.0(Note) SDK consolidated every ten shares of its common stock into one share on July 1, 2016. The above-mentioned numbers in the section of “Per share (yen)” are calculated on theassumption that the share consolidation had been carried out at the beginning of 2016.
*SDK resolved and paid a dividend of ¥30 per share based on the record date of May 11, 2017 at the extraordinary general meeting of shareholders which was held in June 2017.

0.4

successful implementation of financial measures.
As for free cash flow, we will maximize it by enhancing our0earning power in addition to increasing our productivity andbusiness management efficiency. At the same time, we will conduct
examinations for the well-balanced use of our funds, including using

70

S HOWA DENKO R EP ORT 2 O18

Equity
ratio
(%)

2012

2013

2014

2015

2016

2017

29.2

30.6

29.7

31.5

31.8

34.0

0

(YEAR)S HOWA DENKO R EP OR T 2 O18

71

About Showa Denko

Governance

Message from CFO

Financial

CSR

Financial

Financial Highlights

Management’s Discussion
and Analysis

Consolidated financial
statements

Corporate Data

Financial Highlights (Showa Denko K.K. and Consolidated Subsidiaries)(million yen)

Message from CFO

For the year

2012

2013

2014

2015

2016

2017

Net sales

739,675

847,803872,785775,732

671,159

780,387

Operating income ( loss )28,10825,953

20,55133,50842,05377,818

3.8

3.1

2.4

4.3

6.3

10.0

Net income ( loss )23,44823,48821,731

32,05038,69063,962

Net income attribute to owners of the parent

9,368

9,065

2,929

921

12,30533,470Net cash provided by operating activities

53,31063,56566,996

61,17068,94967,284△ 41,741△ 55,203△ 46,876△ 42,497△53,754△29,914

11,5698,362

20,12018,674

15,19537,369△ 20,150△ 6,805△ 24,856△ 21,336△13,220△18,370

R&D expenditures

20,633

20,43520,362

20,28917,313

18,539

Capital expenditures

42,50344,37047,31844,05939,276

41,279Depreciation and amortization

46,232

39,77940,67342,137

38,761

38,454

2012

2013

2014

2015

2016

2017

Total assets

933,162

985,771

1,009,843

940,494

932,698

1,024,727

Total net assets

314,966

345,811

319,087

308,142

311,231364,997

Shareholders’ equity ratio ( % )

29.2

30.6

29.7

31.5

31.8

34.0

Return on equity ( ROE ) ( % )

3.6

3.2

1.0

0.3

4.1

10.4

342,262353,686

383,124

368,835

359,929

346,726

1.09

1.02

1.20

1.20

1.16

0.95

2012

2013

2014

2015

2016

2017

6.26

6.06

1.99

6.45

86.27

234.84

3

3

3

3

ー

50

Ratio of Operating income to sales ( % )We are working to further increase
our corporate value

Net cash provided by (used in) investing activitie
Free cash flow
Net cash provided by (used in) financing activities
CFO

Toshiharu Kato
In “Project 2020+,” we focus on improving our profitability and reducing

them to maintain the stability of our financial standing, make spot

profit fluctuations. We also set a rough target of 70 billion yen forinvestments, foster M&A for the expansion of individualized businesses,

operating income for 2020. For the financial results for 2017, weand return profit to shareholders.

achieved record-high operating income, exceeding the target. We willagain break the record in terms of operating income for 2018.
We will launch a new medium-term business plan in 2019, under

For greater corporate value, we will make ceaseless improvement
efforts and become a corporate group that gives satisfaction to all its
stakeholders.

which we aim to raise the level of our net sales and operating income
through expansion of individualized businesses and to transform theGroup into one that can record high operating income in a stable▶ Interest-bearing Debt

manner.
To this end, we must make timely investments and avoid missing
any opportunities to expand individualized businesses for the growth(Billions of Yen)

400.0

342.3

of the Group. Moreover, we need to clarify the capital cost-based
selection criteria for plant and equipment investments in order to

353.7

368.8

346.7

300.0

1.2
1.20

make investments in a more selective manner. Toward increasing the

1.09

profit margin and improving the balance sheet, we will implement
financial strategies linked with management issues. The Showa

383.1■ Interest-bearing Debt
● D/E Ratio
1.6
359.9

1.20

1.16

1.02

0.8

Denko Group has long been working to improve its financial structure.
In consideration of the recent fundraising environment, we areconducting examinations to stabilize our D/E ratio at around 0.7 for theInterest-bearing debt
Debt/equity ratio (Times)
Per share (yen)Net income—primary
Cash dividends (applicable to the period*)

0.95

200.0

At year-end

100.0(Note) SDK consolidated every ten shares of its common stock into one share on July 1, 2016. The above-mentioned numbers in the section of “Per share (yen)” are calculated on theassumption that the share consolidation had been carried out at the beginning of 2016.
*SDK resolved and paid a dividend of ¥30 per share based on the record date of May 11, 2017 at the extraordinary general meeting of shareholders which was held in June 2017.

0.4

successful implementation of financial measures.
As for free cash flow, we will maximize it by enhancing our0earning power in addition to increasing our productivity andbusiness management efficiency. At the same time, we will conduct
examinations for the well-balanced use of our funds, including using

70

S HOWA DENKO R EP ORT 2 O18

Equity
ratio
(%)

2012

2013

2014

2015

2016

2017

29.2

30.6

29.7

31.5

31.8

34.0

0

(YEAR)S HOWA DENKO R EP OR T 2 O18

71

About Showa Denko

Governance

Message from CFO

Financial

CSR

Financial Highlights

Management’s Discussion
and Analysis

Consolidated financial
statements

Corporate DataManagement’s Discussion and Analysis
Inorganics

Othersmillion, or 35.2%, over the previous year to ¥251,128 million (US$2,222

Production of graphite electrodes in 2017 went up compared with theSales in the Others segment increased ¥4,884 million, or 3.8% over the

million). This segment recorded operating income of ¥33,357 million

previous year due to an improvement in the situation of the electricprevious year, to ¥133,624 million (US$1,183 million) due mainly to(US$295 million), up ¥12,667 million, or 61.2% over the previous year.

steel industry as the customer. Sales of graphite electrodes rose due toimproved sales from Shoko Co., Ltd. Operating income for this segment

the acquisition and consolidation of SGL GE Holding GmbH (currentlyrose by ¥10 million, or 1.6% over the previous year, to ¥633 million

SHOWA DENKO CARBON Holding GmbH) in the fourth quarter of 2017,(US$6 million).

As a result, sales in the Petrochemicals segment increased ¥65,345

Results of Operations
Consolidated net sales in 2017 totaled ¥780,387 million (US$6,906
million), an increase of ¥109,228 million, or 16.3%, over the previous
year. Sales grew in all segments. In the Petrochemicals segment, salesrose due to increases in the prices of products and the consolidation of
SunAllomer Ltd. in the second half of 2016. In the Inorganics segment,
sales rose due to an increase in shipment volumes of graphite
electrodes, improved market conditions for graphite electrodes in
China in the second half of 2017, and the new consolidation of SHOWADENKO CARBON Holding GmbH in the fourth quarter of 2017 following
the acquisition and business integration of former SGL GE Holding
GmbH, a graphite electrode manufacturer. The cost of sales wentup ¥57,784 million, or 10.6%, to ¥602,778 million (US$5,334 million),reflecting the increase in net sales.
Selling, general and administrative expenses rose ¥15,680 million,or 18.6%, to ¥99,791 million (US$883 million), due partly to thehigher transportation cost caused by the increase in net sales. R&D
expenditures rose ¥1,225 million to ¥18,539 million (US$164 million).
Operating income for the Group increased substantially, by 85.0%, or¥35,765 million, to ¥77,818 million (US$689 million). The Petrochemicals
segment recorded higher income due to a strong market caused bya tight supply-demand balance in East Asia. The Inorganics segment
also recorded higher income due to growth in shipment volumes forgraphite electrodes resulting from the business integration and thestiffening graphite electrode market in China, in addition to the effectsof lower production costs for graphite electrodes. The Electronics,
Chemicals, and Aluminum segments also recorded higher income.

Information by Business Segment

Chemicals
The production of liquefied ammonia and high-purity gases forin addition to higher sales volumes and a rise in prices for graphite

electronics increased from the previous year. In the basic chemicals

electrodes in the Chinese market during the second half of 2017.

business, sales of liquefied ammonia rose due to higher shipment

Sales of ceramics rose due to an increase in shipment volumes for thevolumes. Sales of chloroprene rubber improved due to a high level

electronics industry.
As a result, sales in the Inorganics segment increased ¥22,572

increased due to a rise in prices. Sales of electronic chemicals rose

million, or 44.4% over the previous year, to ¥73,442 million (US$650

Sales in Japandue to higher shipment volumes of high-purity gases for electronics

million). The segment recorded operating income of ¥7,089 million

Sales in the Petrochemicals segment increased due to a rise in market

caused by an increase in production in the semiconductor and display(US$63 million), an improvement of ¥12,848 million from the previous

prices of products, the result of higher raw naphtha prices and thepanel industries. Sales of functional chemicals went up due to higher

year, due mainly to higher operating income earned by the graphite

consolidation of SunAllomer Ltd. in the second half of 2016. Sales

shipment volumes for use in the domestic automotive industry.

electrode business.

in the Chemicals segment went up due to an increase in shipment
volumes of high-purity gases for electronics caused by a production

However, sales of industrial gases decreased slightly.

Aluminumincrease in the semiconductor and display panel industries, higher

million, or 10.6%, to ¥148,758 million (US$1,316 million). The segment

Production of high-purity foil for aluminum electrolytic capacitors

shipment volumes of liquefied ammonia and a rise in the market pricerecorded operating income of ¥16,474 million (US$146 million), up

increased from the previous year. Shipment volumes and sales ofof acrylonitrile. Sales figures for the Electronics segment were higher¥2,650 million, or 19.2% over the previous year.

rolled products rose due to higher shipment volumes of high-purity

due to increased shipment volumes of compound semiconductors,

foil for aluminum electrolytic capacitors for industrial equipment andrare earth magnetic alloys and HD media. In the Inorganics segment,

As a result, sales for the Chemicals segment increased ¥14,229

Electronics

automotive applications. Sales of aluminum specialty components

sales rose due to an increase in sales volumes for graphite electrodes

Production of HD media in 2017 increased from the previous year due

went up, due partly to higher shipment volumes of the large aluminum

and an increase in shipment volumes in ceramics for electronics. Sales

to higher shipment volumes of media for use in data centers. As a result,

extrusions and aluminum cylinders used in laser-beam-printers.

in the Aluminum segment increased due to higher sales of high-purity

sales of HD media went up. Sales of rare earth magnetic alloys andSales of aluminum cans increased due to higher shipment volumes

foil for aluminum electrolytic capacitors and aluminum specialty

compound semiconductors rose from the previous year due to higher

recorded by Hanacans Joint Stock Company in Vietnam.

components, including large extrusions. Sales figures for the Others

shipment volumes. Sales of lithium-ion battery (LIB) materials, which wastransferred from the Others segment to the Electronics segment at the

As a result, sales in the Aluminum segment increased ¥6,864 million,
or 7.0% over the previous year, to ¥105,439 million (US$933 million).

beginning of 2017, decreased due to lower shipment volumes to China

Operating income for the segment rose ¥2,281 million, or 51.6% overcaused by changes in the subsidy policy for electric vehicles.

the previous year, to ¥6,697 million (US$59 million).

2.2%, over the previous year to ¥123,064 million (US$1,089 million).

Production of ethylene rose from the previous year. Sales of olefins

The segment recorded operating income of ¥21,925 million (US$194

increased due to the higher prices for products caused by a rise in the raw

million), up ¥6,910 million, or 46.0% over the previous year.

As a result, consolidated sales from operations in Japan rose ¥73,523
million, or 17.1%, to ¥504,162 million (US$4,462 million).

▶ Operating Income by Segment

due to higher shipment volumes and a rise in prices of products, including■ Petrochemicals■ Chemicals

ethyl acetate and vinyl acetate. The consolidation of SunAllomer Ltd. in the(million yen)second half of 2016 also drove up sales in this segment.

segment rose due to an increase in sales from Shoko Co., Ltd.

As a result, the Electronics segment’s sales rose ¥2,602 million, orPetrochemicals

naphtha price and strong demand. Sales of organic chemicals improved

Information by Geographic Areaof shipment volumes and a strong market. Sales of acrylonitrile■ Electronics■ Inorganics■ Aluminum■ Others■ Adjustments

1,000,000
750,000
500,000▶ Net Sales by Segment

250,000■ Petrochemicals■ Chemicals■ Electronics■ Inorganics■ Aluminum■ Others■ Adjustments

0-250,000(million yen)

1,000,000

2013

2014

2015

2016

2017 (YEAR)

750,000
500,000
250,000
0-250,000

72

2013

2014

2015

S HOWA DENKO R EP ORT 2 O18

20162017 (YEAR)S HOWA DENKO R EP OR T 2 O18

73

About Showa Denko

Governance

Message from CFO

Financial

CSR

Financial Highlights

Management’s Discussion
and Analysis

Consolidated financial
statements

Corporate DataManagement’s Discussion and Analysis
Inorganics

Othersmillion, or 35.2%, over the previous year to ¥251,128 million (US$2,222

Production of graphite electrodes in 2017 went up compared with theSales in the Others segment increased ¥4,884 million, or 3.8% over the

million). This segment recorded operating income of ¥33,357 million

previous year due to an improvement in the situation of the electricprevious year, to ¥133,624 million (US$1,183 million) due mainly to(US$295 million), up ¥12,667 million, or 61.2% over the previous year.

steel industry as the customer. Sales of graphite electrodes rose due toimproved sales from Shoko Co., Ltd. Operating income for this segment

the acquisition and consolidation of SGL GE Holding GmbH (currentlyrose by ¥10 million, or 1.6% over the previous year, to ¥633 million

SHOWA DENKO CARBON Holding GmbH) in the fourth quarter of 2017,(US$6 million).

As a result, sales in the Petrochemicals segment increased ¥65,345

Results of Operations
Consolidated net sales in 2017 totaled ¥780,387 million (US$6,906
million), an increase of ¥109,228 million, or 16.3%, over the previous
year. Sales grew in all segments. In the Petrochemicals segment, salesrose due to increases in the prices of products and the consolidation of
SunAllomer Ltd. in the second half of 2016. In the Inorganics segment,
sales rose due to an increase in shipment volumes of graphite
electrodes, improved market conditions for graphite electrodes in
China in the second half of 2017, and the new consolidation of SHOWADENKO CARBON Holding GmbH in the fourth quarter of 2017 following
the acquisition and business integration of former SGL GE Holding
GmbH, a graphite electrode manufacturer. The cost of sales wentup ¥57,784 million, or 10.6%, to ¥602,778 million (US$5,334 million),reflecting the increase in net sales.
Selling, general and administrative expenses rose ¥15,680 million,or 18.6%, to ¥99,791 million (US$883 million), due partly to thehigher transportation cost caused by the increase in net sales. R&D
expenditures rose ¥1,225 million to ¥18,539 million (US$164 million).
Operating income for the Group increased substantially, by 85.0%, or¥35,765 million, to ¥77,818 million (US$689 million). The Petrochemicals
segment recorded higher income due to a strong market caused bya tight supply-demand balance in East Asia. The Inorganics segment
also recorded higher income due to growth in shipment volumes forgraphite electrodes resulting from the business integration and thestiffening graphite electrode market in China, in addition to the effectsof lower production costs for graphite electrodes. The Electronics,
Chemicals, and Aluminum segments also recorded higher income.

Information by Business Segment

Chemicals
The production of liquefied ammonia and high-purity gases forin addition to higher sales volumes and a rise in prices for graphite

electronics increased from the previous year. In the basic chemicals

electrodes in the Chinese market during the second half of 2017.

business, sales of liquefied ammonia rose due to higher shipment

Sales of ceramics rose due to an increase in shipment volumes for thevolumes. Sales of chloroprene rubber improved due to a high level

electronics industry.
As a result, sales in the Inorganics segment increased ¥22,572

increased due to a rise in prices. Sales of electronic chemicals rose

million, or 44.4% over the previous year, to ¥73,442 million (US$650

Sales in Japandue to higher shipment volumes of high-purity gases for electronics

million). The segment recorded operating income of ¥7,089 million

Sales in the Petrochemicals segment increased due to a rise in market

caused by an increase in production in the semiconductor and display(US$63 million), an improvement of ¥12,848 million from the previous

prices of products, the result of higher raw naphtha prices and thepanel industries. Sales of functional chemicals went up due to higher

year, due mainly to higher operating income earned by the graphite

consolidation of SunAllomer Ltd. in the second half of 2016. Sales

shipment volumes for use in the domestic automotive industry.

electrode business.

in the Chemicals segment went up due to an increase in shipment
volumes of high-purity gases for electronics caused by a production

However, sales of industrial gases decreased slightly.

Aluminumincrease in the semiconductor and display panel industries, higher

million, or 10.6%, to ¥148,758 million (US$1,316 million). The segment

Production of high-purity foil for aluminum electrolytic capacitors

shipment volumes of liquefied ammonia and a rise in the market pricerecorded operating income of ¥16,474 million (US$146 million), up

increased from the previous year. Shipment volumes and sales ofof acrylonitrile. Sales figures for the Electronics segment were higher¥2,650 million, or 19.2% over the previous year.

rolled products rose due to higher shipment volumes of high-purity

due to increased shipment volumes of compound semiconductors,

foil for aluminum electrolytic capacitors for industrial equipment andrare earth magnetic alloys and HD media. In the Inorganics segment,

As a result, sales for the Chemicals segment increased ¥14,229

Electronics

automotive applications. Sales of aluminum specialty components

sales rose due to an increase in sales volumes for graphite electrodes

Production of HD media in 2017 increased from the previous year due

went up, due partly to higher shipment volumes of the large aluminum

and an increase in shipment volumes in ceramics for electronics. Sales

to higher shipment volumes of media for use in data centers. As a result,

extrusions and aluminum cylinders used in laser-beam-printers.

in the Aluminum segment increased due to higher sales of high-purity

sales of HD media went up. Sales of rare earth magnetic alloys andSales of aluminum cans increased due to higher shipment volumes

foil for aluminum electrolytic capacitors and aluminum specialty

compound semiconductors rose from the previous year due to higher

recorded by Hanacans Joint Stock Company in Vietnam.

components, including large extrusions. Sales figures for the Others

shipment volumes. Sales of lithium-ion battery (LIB) materials, which wastransferred from the Others segment to the Electronics segment at the

As a result, sales in the Aluminum segment increased ¥6,864 million,
or 7.0% over the previous year, to ¥105,439 million (US$933 million).

beginning of 2017, decreased due to lower shipment volumes to China

Operating income for the segment rose ¥2,281 million, or 51.6% overcaused by changes in the subsidy policy for electric vehicles.

the previous year, to ¥6,697 million (US$59 million).

2.2%, over the previous year to ¥123,064 million (US$1,089 million).

Production of ethylene rose from the previous year. Sales of olefins

The segment recorded operating income of ¥21,925 million (US$194

increased due to the higher prices for products caused by a rise in the raw

million), up ¥6,910 million, or 46.0% over the previous year.

As a result, consolidated sales from operations in Japan rose ¥73,523
million, or 17.1%, to ¥504,162 million (US$4,462 million).

▶ Operating Income by Segment

due to higher shipment volumes and a rise in prices of products, including■ Petrochemicals■ Chemicals

ethyl acetate and vinyl acetate. The consolidation of SunAllomer Ltd. in the(million yen)second half of 2016 also drove up sales in this segment.

segment rose due to an increase in sales from Shoko Co., Ltd.

As a result, the Electronics segment’s sales rose ¥2,602 million, orPetrochemicals

naphtha price and strong demand. Sales of organic chemicals improved

Information by Geographic Areaof shipment volumes and a strong market. Sales of acrylonitrile■ Electronics■ Inorganics■ Aluminum■ Others■ Adjustments

1,000,000
750,000
500,000▶ Net Sales by Segment

250,000■ Petrochemicals■ Chemicals■ Electronics■ Inorganics■ Aluminum■ Others■ Adjustments

0-250,000(million yen)

1,000,000

2013

2014

2015

2016

2017 (YEAR)

750,000
500,000
250,000
0-250,000

72

2013

2014

2015

S HOWA DENKO R EP ORT 2 O18

20162017 (YEAR)S HOWA DENKO R EP OR T 2 O18

73

About Showa Denko

Governance

Message from CFO

Financial

CSR

Financial Highlights

Management’s Discussion
and Analysis

Consolidated financial
statements

Corporate DataManagement’s Discussion and Analysis

Sales in Asia (excluding Japan)

Other Income (Expenses) and Net Income
Attributable to Owners of the Parent

Sales in the Petrochemicals segment in Asia increased due to a rise inmarket prices for olefins. Sales in Asia for the Chemicals segment also

The gap between interest expenses and interest and dividends incomerose. For the basic chemicals business, sales of chloroprene rubber rose

improved ¥384 million to expenses of ¥1,207 million (US$11 million),

due to an increase in export volumes and higher market prices. For

mainly from an increase in interest income.

the electronic chemicals business, sales went up due to an increase in

We recorded a loss on the equity in earnings of unconsolidated

shipment volumes of high-purity gases for electronics caused by higher

subsidiaries and affiliates to which the equity method is applied ofproduction in the semiconductor and display panel industries in East

¥7,689 million (US$68 million), a fall of ¥12,017 million. This fall wasAsia. For the functional chemicals business, sales increased due todue mainly to the recording of a loss on the equity in earnings ofa surge in shipment volumes of products to the Chinese market. The

unconsolidated subsidiaries and affiliates to which the equity method

Electronics segment’s sales rose due to higher shipment volumes ofis applied amounting to ¥9,948 million from PT. Indonesia Chemical

HD media resulting from the bottoming out of demand for HDDs used

Alumina (ICA), the result of impairment losses on ICA’s alumina plantin PCs and an increase in shipment volumes of HDDs for data centers.

following the Company’s decision to sell all of its shares in ICA. The

Sales in the Inorganics segment rose due to higher market prices forconsolidation of SunAllomer Ltd. also reduced the equity in earnings

graphite electrodes in China. Sales in the Aluminum segment increasedof unconsolidated subsidiaries and affiliates to which equity method

due to higher shipment volumes recorded by Hanacans Joint Stockis applied.

Company in Vietnam. Sales in the Others segment decreased due to a

Net Assets

Overall, the total of other income (expenses), net, i.e., the totalof non-operating income (expenses) and extraordinary income

Net assets rose ¥53,766 million from the end of the previous year, to(expenses), net, fell by ¥6,678 million, to a loss of ¥31,202 million¥364,997 million (US$3,230 million), due partly to the posting of net(US$276 million).

income attributable to owners of the parent and an increase in the

The total of the other expenses posted for Yokohama Plant, as

valuation difference on available-for-sale securities resulting from a risementioned above, amounted to about ¥7,600 million.

in stock prices.

As a result, the Company recorded income before taxes andnoncontrolling interests of ¥46,616 million (US$413 million), up

Capital Expenditures¥29,087 million from the previous year. Income taxes increased ¥7,142

Capital expenditures increased ¥2,003 million from the previous year, tomillion to ¥10,833 million (US$96 million) due to the improvement in¥41,279 million (US$365 million). Capital expenditures for the electronic

the Company’s performance. Consequently, the Company recorded

chemicals business decreased from the previous year, though they were

net income attributable to owners of the parent of ¥33,470 (US$296

still at a high level. However, we expanded production capacity to produce

million), up ¥21,166 million over the previous year.

lithium-ion battery materials and for Hanacans Joint Stock Company inVietnam to produce more aluminum cans. We also began construction
work for a variety of purposes, including production improvements,
greater efficiency, maintenance and environmental preservation.

Financial Position

For foreign exchange gain (losses), the group recorded foreign

lower sales at Shoko Co., Ltd. and Shoko (Shanghai) Co., Ltd.

Cash Flows

exchange losses of ¥2,791 million (US$25 million), a drop of ¥1,133

As a result, consolidated sales from operations in Asia (excluding

Total Assets

million due mainly to the recording of a foreign exchange loss in a

Japan) increased ¥22,018 million, or 10.6% over the previous year, toTotal assets at the end of 2017 rose ¥92,029 million from the end of thesubsidiary in Taiwan caused by the appreciation of the New Taiwan¥230,644 million (US$2,041 million).

previous year, to ¥1,024,727 million (US$9,068 million), due mainly todollar against the U.S. dollar.

the increase in notes and accounts receivable, inventories, and property,

We recorded a loss of ¥4,430 million (US$39 million), net, on

Sales in the Rest of the World
Sales in the Inorganics segment rose sharply due mainly to theconsolidation of SHOWA DENKO CARBON Holding GmbH in the fourth
quarter of 2017 and an increase in sales recorded by Showa Denko
Carbon Inc. in the U.S.
As a result, consolidated sales from operations in the rest of theworld increased ¥13,687 million, or 42.9% over the previous year, to¥45,580 million (US$403 million).

Net cash provided by operating activities decreased ¥1,666 million
from the previous year with proceeds of ¥67,284 million (US$595
million), due partly to the increase in working capital, despite the risein operating income. Net cash used in investing activities decreased

plant and equipment resulting from the acquisition of a graphite

retirement and sales of noncurrent assets, a fall of ¥1,207 million, due

electrode company. Cash and deposits increased ¥7,334 million from themainly to the recording of expenses and retirement losses resulting

end of the previous year to ¥77,248 million (US$684 million).

¥23,840 million from the previous year for the payment of ¥29,914
million (US$265 million), due partly to a decrease in payments into
time deposits and an increase in proceeds from sales of investment

from refurbishment to make effective use of Yokohama Plant, which

Net property, plant and equipment increased ¥18,765 million

belongs to the Inorganics segment. We also recorded a loss of ¥7,204

to ¥505,900 million (US$4,477 million), due mainly to the recent

million (US$64 million) for the impairment loss, an improvement

consolidation of SHOWA DENKO CARBON Holding GmbH. Totalof ¥8,439 million, due partly to our recognition of an impairment

investments and other assets increased by ¥3,000 million, to ¥113,486

loss amounting to ¥2,312 million as the cost of refurbishment tomillion (US$1,004 million), due partly to the appreciation in the market

make effective use of Yokohama Plant and recognition of anothervaluation of investment securities.

securities. As a result, free cash flow ended up with proceeds of ¥37,369
million (US$331 million), an improvement of ¥22,174 million.
Net cash used in financing activities rose ¥5,151 million due to a
reduction from the previous year in interest bearing debt, and ended
up with the payment of ¥18,370 million (US$163 million).
Consequently, taking the effects of exchange rate fluctuations

impairment loss of ¥1,555 million from the Chichibu Plant, which

into account, cash and cash equivalents at the end of 2017 increased

Liabilities

belongs to the Electronics segment.
Gain on sales of investment securities increased ¥336 million, to¥20,648 million to ¥76,833 million (US$680 million) over the end of theInterest bearing debt fell by ¥13,203 million from the end of theprevious year.21

previous year to ¥346,726 million (US$3,068 million). However, total¥408 million (US$4 million).
The sum of extraordinary losses, other than those mentioned above,

liabilities rose ¥38,263 million, to ¥659,730 million (US$5,838 million),came to ¥9,418 million (US$83 million), due mainly to posting of adue partly to the increase in accounts payable–trade resulting from theloss on provision of the allowance for doubtful accounts and others

recent consolidation of SHOWA DENKO CARBON Holding GmbH.

concerning ICA.

▶ Net Income Attributable to Owners of the Parent▶ Interest Bearing Debt

▶ Cash Flows from Operating Activities

1,000,000(million yen)(million yen)(million yen)(million yen)

30,000750,000

350,000

300,000

60,00020,000500,000

300,000

200,000

40,00010,000250,000

250,000

100,000

20,0000 2013S HOWA DENKO R EP ORT 2 O18▶ Total Net Assets

40,000(million yen)74

▶ Total Assets

2014

2015

2016

2017 (YEAR)

0

2013

400,000

2014

2015

2016

2017 (YEAR)

0 2013400,000

2014

2015

2016

2017 (YEAR)

0

2013

80,000

2014

2015

2016

2017 (YEAR)

0

2013

2014

2015

2016

2017 (YEAR)S HOWA DENKO R EP OR T 2 O18

75

About Showa Denko

Governance

Message from CFO

Financial

CSR

Financial Highlights

Management’s Discussion
and Analysis

Consolidated financial
statements

Corporate DataManagement’s Discussion and Analysis

Sales in Asia (excluding Japan)

Other Income (Expenses) and Net Income
Attributable to Owners of the Parent

Sales in the Petrochemicals segment in Asia increased due to a rise inmarket prices for olefins. Sales in Asia for the Chemicals segment also

The gap between interest expenses and interest and dividends incomerose. For the basic chemicals business, sales of chloroprene rubber rose

improved ¥384 million to expenses of ¥1,207 million (US$11 million),

due to an increase in export volumes and higher market prices. For

mainly from an increase in interest income.

the electronic chemicals business, sales went up due to an increase in

We recorded a loss on the equity in earnings of unconsolidated

shipment volumes of high-purity gases for electronics caused by higher

subsidiaries and affiliates to which the equity method is applied ofproduction in the semiconductor and display panel industries in East

¥7,689 million (US$68 million), a fall of ¥12,017 million. This fall wasAsia. For the functional chemicals business, sales increased due todue mainly to the recording of a loss on the equity in earnings ofa surge in shipment volumes of products to the Chinese market. The

unconsolidated subsidiaries and affiliates to which the equity method

Electronics segment’s sales rose due to higher shipment volumes ofis applied amounting to ¥9,948 million from PT. Indonesia Chemical

HD media resulting from the bottoming out of demand for HDDs used

Alumina (ICA), the result of impairment losses on ICA’s alumina plantin PCs and an increase in shipment volumes of HDDs for data centers.

following the Company’s decision to sell all of its shares in ICA. The

Sales in the Inorganics segment rose due to higher market prices forconsolidation of SunAllomer Ltd. also reduced the equity in earnings

graphite electrodes in China. Sales in the Aluminum segment increasedof unconsolidated subsidiaries and affiliates to which equity method

due to higher shipment volumes recorded by Hanacans Joint Stockis applied.

Company in Vietnam. Sales in the Others segment decreased due to a

Net Assets

Overall, the total of other income (expenses), net, i.e., the totalof non-operating income (expenses) and extraordinary income

Net assets rose ¥53,766 million from the end of the previous year, to(expenses), net, fell by ¥6,678 million, to a loss of ¥31,202 million¥364,997 million (US$3,230 million), due partly to the posting of net(US$276 million).

income attributable to owners of the parent and an increase in the

The total of the other expenses posted for Yokohama Plant, as

valuation difference on available-for-sale securities resulting from a risementioned above, amounted to about ¥7,600 million.

in stock prices.

As a result, the Company recorded income before taxes andnoncontrolling interests of ¥46,616 million (US$413 million), up

Capital Expenditures¥29,087 million from the previous year. Income taxes increased ¥7,142

Capital expenditures increased ¥2,003 million from the previous year, tomillion to ¥10,833 million (US$96 million) due to the improvement in¥41,279 million (US$365 million). Capital expenditures for the electronic

the Company’s performance. Consequently, the Company recorded

chemicals business decreased from the previous year, though they were

net income attributable to owners of the parent of ¥33,470 (US$296

still at a high level. However, we expanded production capacity to produce

million), up ¥21,166 million over the previous year.

lithium-ion battery materials and for Hanacans Joint Stock Company inVietnam to produce more aluminum cans. We also began construction
work for a variety of purposes, including production improvements,
greater efficiency, maintenance and environmental preservation.

Financial Position

For foreign exchange gain (losses), the group recorded foreign

lower sales at Shoko Co., Ltd. and Shoko (Shanghai) Co., Ltd.

Cash Flows

exchange losses of ¥2,791 million (US$25 million), a drop of ¥1,133

As a result, consolidated sales from operations in Asia (excluding

Total Assets

million due mainly to the recording of a foreign exchange loss in a

Japan) increased ¥22,018 million, or 10.6% over the previous year, toTotal assets at the end of 2017 rose ¥92,029 million from the end of thesubsidiary in Taiwan caused by the appreciation of the New Taiwan¥230,644 million (US$2,041 million).

previous year, to ¥1,024,727 million (US$9,068 million), due mainly todollar against the U.S. dollar.

the increase in notes and accounts receivable, inventories, and property,

We recorded a loss of ¥4,430 million (US$39 million), net, on

Sales in the Rest of the World
Sales in the Inorganics segment rose sharply due mainly to theconsolidation of SHOWA DENKO CARBON Holding GmbH in the fourth
quarter of 2017 and an increase in sales recorded by Showa Denko
Carbon Inc. in the U.S.
As a result, consolidated sales from operations in the rest of theworld increased ¥13,687 million, or 42.9% over the previous year, to¥45,580 million (US$403 million).

Net cash provided by operating activities decreased ¥1,666 million
from the previous year with proceeds of ¥67,284 million (US$595
million), due partly to the increase in working capital, despite the risein operating income. Net cash used in investing activities decreased

plant and equipment resulting from the acquisition of a graphite

retirement and sales of noncurrent assets, a fall of ¥1,207 million, due

electrode company. Cash and deposits increased ¥7,334 million from themainly to the recording of expenses and retirement losses resulting

end of the previous year to ¥77,248 million (US$684 million).

¥23,840 million from the previous year for the payment of ¥29,914
million (US$265 million), due partly to a decrease in payments into
time deposits and an increase in proceeds from sales of investment

from refurbishment to make effective use of Yokohama Plant, which

Net property, plant and equipment increased ¥18,765 million

belongs to the Inorganics segment. We also recorded a loss of ¥7,204

to ¥505,900 million (US$4,477 million), due mainly to the recent

million (US$64 million) for the impairment loss, an improvement

consolidation of SHOWA DENKO CARBON Holding GmbH. Totalof ¥8,439 million, due partly to our recognition of an impairment

investments and other assets increased by ¥3,000 million, to ¥113,486

loss amounting to ¥2,312 million as the cost of refurbishment tomillion (US$1,004 million), due partly to the appreciation in the market

make effective use of Yokohama Plant and recognition of anothervaluation of investment securities.

securities. As a result, free cash flow ended up with proceeds of ¥37,369
million (US$331 million), an improvement of ¥22,174 million.
Net cash used in financing activities rose ¥5,151 million due to a
reduction from the previous year in interest bearing debt, and ended
up with the payment of ¥18,370 million (US$163 million).
Consequently, taking the effects of exchange rate fluctuations

impairment loss of ¥1,555 million from the Chichibu Plant, which

into account, cash and cash equivalents at the end of 2017 increased

Liabilities

belongs to the Electronics segment.
Gain on sales of investment securities increased ¥336 million, to¥20,648 million to ¥76,833 million (US$680 million) over the end of theInterest bearing debt fell by ¥13,203 million from the end of theprevious year.21

previous year to ¥346,726 million (US$3,068 million). However, total¥408 million (US$4 million).
The sum of extraordinary losses, other than those mentioned above,

liabilities rose ¥38,263 million, to ¥659,730 million (US$5,838 million),came to ¥9,418 million (US$83 million), due mainly to posting of adue partly to the increase in accounts payable–trade resulting from theloss on provision of the allowance for doubtful accounts and others

recent consolidation of SHOWA DENKO CARBON Holding GmbH.

concerning ICA.

▶ Net Income Attributable to Owners of the Parent▶ Interest Bearing Debt

▶ Cash Flows from Operating Activities

1,000,000(million yen)(million yen)(million yen)(million yen)

30,000750,000

350,000

300,000

60,00020,000500,000

300,000

200,000

40,00010,000250,000

250,000

100,000

20,0000 2013S HOWA DENKO R EP ORT 2 O18▶ Total Net Assets

40,000(million yen)74

▶ Total Assets

2014

2015

2016

2017 (YEAR)

0

2013

400,000

2014

2015

2016

2017 (YEAR)

0 2013400,000

2014

2015

2016

2017 (YEAR)

0

2013

80,000

2014

2015

2016

2017 (YEAR)

0

2013

2014

2015

2016

2017 (YEAR)S HOWA DENKO R EP OR T 2 O18

75

About Showa Denko

Governance

Message from CFO

Financial

CSR

Financial Highlights

Management’s Discussion
and Analysis

Consolidated financial
statements

Corporate Data

Consolidated financial statements
Consolidated Balance Sheets
At December 31, 2017 and 2016
Thousands of
U.S. dollars

Millions of yen
ASSETS

2017

2017

2016

Current assets

Thousands of
U.S. dollars

Millions of yen
LIABILITIES AND NET ASSETS

2017

2017

2016

Current liabilities

Cash and deposits¥ 77,248¥ 69,914$ 683,613

Short-term debt

¥ 91,699¥ 71,895

Notes and accounts receivable

192,551

157,846

1,703,992

Current portion of long-term debt

57,432

58,234508,250

Allowance for doubtful accounts(2,849)(699)(25,216)

Notes and accounts payable

171,719

143,556

1,519,642

Inventories

114,913

91,347

1,016,926

Income taxes payable

7,374

3,890

65,260

6,898

4,092

61,042

Provision for repairs

4,143

38

36,661

Provision for bonuses

2,949

2,253

26,100

5

25

47

137

382

1,214

Deferred tax assets
Other current assets

16,581

12,576

146,732

Total current assets

405,341

335,077

3,587,089

Provision for stock payments
Provision for business structure improvement

Property, plant and equipment
Land

—

118

—

2,168,689

Other current liabilities

38,20630,402

338,110

Total current liabilities

373,666

310,792

3,306,781

Provision for Niigata Minamata Disease
245,062

242,816

Buildings and structures

287,798

267,8892,546,887

Machinery, equipment and vehicles

900,779

791,398

7,971,499

Construction in progress
Less : Accumulated depreciation
Net property, plant and equipment$ 811,499

16,54849,575

146,438

1,450,187

1,351,678

12,833,513

Long-term debt less current portion

197,594

229,800

1,748,622(944,287)(864,544)(8,356,525)

Deferred tax liabilities

12,7744,041

113,042505,900

487,135

4,476,988

Provision for repairs

117

2,759

1,035

Provision for director retirement

—

73

—

Provision for stock payments

96

59

852

Investments and other assets

Noncurrent liabilities

Investment securities

89,167

74,951

789,091

Provision for business structure improvement

3,574

1,121

31,628Long-term loans

1,217

6,922

10,770

Provision for loss on guarantees

2,640

—

23,362

232

365

2,053

Net defined benefit liability

18,96621,923

167,843

1,080

9,115

9,554

Deferred tax liabilities for land revaluation

32,48833,144

287,507

Other

32,02027,940283,362

Other noncurrent liabilities

17,81417,754

157,646

Allowance for doubtful accounts(10,229)(8,807)(90,526)

Total noncurrent liabilities

286,064

310,675

2,531,539

113,486

110,486

1,004,304¥ 1,024,727¥ 932,698$ 9,068,380

1,243,925

Net defined benefit asset
Deferred tax assets

Total investments and other assets

Contingent liabilities
Total assets

Net assets
Shareholders' equity
Capital stock
Authorized, 330,000,000 shares

Issued , 2017– 149,711,292 shares

140,564—

Issued , 2016– 149,711,292 shares—

140,564—

61,66362,033545,691

Capital surplus
Retained earnings

96,14265,358850,814

Less: Treasury stock at cost, 2017– 7,187,545 shares(10,503)—(92,944)

Less: Treasury stock at cost, 2016– 7,192,815 shares—(10,502)—287,866

257,4532,547,486
146,433

Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities

16,547

4,519

Deferred gains or losses on hedges

3,781

320

33,464

Revaluation reserve for land

29,541

31,026

261,427

Foreign currency translation adjustments

15,452

14,239136,747

Remeasurements of defined benefit plans(4,716)(10,996)(41,732)

60,606

39,107536,340

Total accumulated other comprehensive income
Non-controlling interests

16,524

14,671

146,234

Total net assets

364,997311,2313,230,060¥ 1,024,727¥ 932,698$ 9,068,380

Total liabilities and net assets

76

S HOWA DENKO R EP ORT 2 O18

S HOWA DENKO R EP OR T 2 O18

77

About Showa Denko

Governance

Message from CFO

Financial

CSR

Financial Highlights

Management’s Discussion
and Analysis

Consolidated financial
statements

Corporate Data

Consolidated financial statements
Consolidated Balance Sheets
At December 31, 2017 and 2016
Thousands of
U.S. dollars

Millions of yen
ASSETS

2017

2017

2016

Current assets

Thousands of
U.S. dollars

Millions of yen
LIABILITIES AND NET ASSETS

2017

2017

2016

Current liabilities

Cash and deposits¥ 77,248¥ 69,914$ 683,613

Short-term debt

¥ 91,699¥ 71,895

Notes and accounts receivable

192,551

157,846

1,703,992

Current portion of long-term debt

57,432

58,234508,250

Allowance for doubtful accounts(2,849)(699)(25,216)

Notes and accounts payable

171,719

143,556

1,519,642

Inventories

114,913

91,347

1,016,926

Income taxes payable

7,374

3,890

65,260

6,898

4,092

61,042

Provision for repairs

4,143

38

36,661

Provision for bonuses

2,949

2,253

26,100

5

25

47

137

382

1,214

Deferred tax assets
Other current assets

16,581

12,576

146,732

Total current assets

405,341

335,077

3,587,089

Provision for stock payments
Provision for business structure improvement

Property, plant and equipment
Land

—

118

—

2,168,689

Other current liabilities

38,20630,402

338,110

Total current liabilities

373,666

310,792

3,306,781

Provision for Niigata Minamata Disease
245,062

242,816

Buildings and structures

287,798

267,8892,546,887

Machinery, equipment and vehicles

900,779

791,398

7,971,499

Construction in progress
Less : Accumulated depreciation
Net property, plant and equipment$ 811,499

16,54849,575

146,438

1,450,187

1,351,678

12,833,513

Long-term debt less current portion

197,594

229,800

1,748,622(944,287)(864,544)(8,356,525)

Deferred tax liabilities

12,7744,041

113,042505,900

487,135

4,476,988

Provision for repairs

117

2,759

1,035

Provision for director retirement

—

73

—

Provision for stock payments

96

59

852

Investments and other assets

Noncurrent liabilities

Investment securities

89,167

74,951

789,091

Provision for business structure improvement

3,574

1,121

31,628Long-term loans

1,217

6,922

10,770

Provision for loss on guarantees

2,640

—

23,362

232

365

2,053

Net defined benefit liability

18,96621,923

167,843

1,080

9,115

9,554

Deferred tax liabilities for land revaluation

32,48833,144

287,507

Other

32,02027,940283,362

Other noncurrent liabilities

17,81417,754

157,646

Allowance for doubtful accounts(10,229)(8,807)(90,526)

Total noncurrent liabilities

286,064

310,675

2,531,539

113,486

110,486

1,004,304¥ 1,024,727¥ 932,698$ 9,068,380

1,243,925

Net defined benefit asset
Deferred tax assets

Total investments and other assets

Contingent liabilities
Total assets

Net assets
Shareholders' equity
Capital stock
Authorized, 330,000,000 shares

Issued , 2017– 149,711,292 shares

140,564—

Issued , 2016– 149,711,292 shares—

140,564—

61,66362,033545,691

Capital surplus
Retained earnings

96,14265,358850,814

Less: Treasury stock at cost, 2017– 7,187,545 shares(10,503)—(92,944)

Less: Treasury stock at cost, 2016– 7,192,815 shares—(10,502)—287,866

257,4532,547,486
146,433

Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities

16,547

4,519

Deferred gains or losses on hedges

3,781

320

33,464

Revaluation reserve for land

29,541

31,026

261,427

Foreign currency translation adjustments

15,452

14,239136,747

Remeasurements of defined benefit plans(4,716)(10,996)(41,732)

60,606

39,107536,340

Total accumulated other comprehensive income
Non-controlling interests

16,524

14,671

146,234

Total net assets

364,997311,2313,230,060¥ 1,024,727¥ 932,698$ 9,068,380

Total liabilities and net assets

76

S HOWA DENKO R EP ORT 2 O18

S HOWA DENKO R EP OR T 2 O18

77

About Showa Denko

Governance

Message from CFO

Financial

CSR

Financial Highlights

Management’s Discussion
and Analysis

Consolidated financial
statements

Corporate Data

Consolidated financial statements

Consolidated Statements of Income

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2017 and 2016

For the years ended December 31, 2017 and 2016
Thousands of
U.S. dollars

Millions of yen

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income

2017

2016

¥ 780,387¥ 671,159

2017

2017

$ 6,906,077

Net income

2017

2016

¥ 35,783¥ 13,838$ 316,667

602,778

544,994

5,334,317

177,609126,164

1,571,760

Valuation difference on available-for-sale securities

12,133

516

107,369

99,791

84,111

883,102

Deferred gains or losses on hedges

3,479

629

30,791

77,81842,053

688,658

Revaluation reserve for land

—

1,824

—

Foreign currency translation adjustments

1,455(4,520)12,878Remeasurements of defined benefit plans, net of tax

6,294(6,167)55,700

22

41

197

¥ 23,384¥ (7,678)$ 206,937¥ 59,167¥ 6,160$ 523,604

Other income (expenses)
Interest and dividends income

1,893

1,641

16,755Equity in earnings (losses) of unconsolidated subsidiaries and affiliates(7,689)4,328(68,042)

408

72

3,611

Gain on sales of investment securities, net

Thousands of
U.S. dollars

Millions of yen

Other comprehensive income:

Share of other comprehensive income of unconsolidated subsidiaries
and affiliates accounted for using equity method
Total other comprehensive income (loss)
Comprehensive income

(50)

(66)

(445)

Foreign exchange gains (losses)(2,791)(1,658)(24,702)

Rent income on noncurrent assets

1,381

1,506

12,225

Owners of parent

56,581

4,807

500,720

880

808

7,787

Non-controlling interests

2,586

1,353

22,884

Loss on valuation of investment securities

Gain (loss) on sales of noncurrent assets, net
Interest expenses(3,100)(3,231)(27,435)

Loss on retirement of noncurrent assets(5,310)(4,030)(46,990)(63,753)

Impairment loss

(7,204)(15,644)

Gain on bargain purchase

3,115

686

27,571

Provision of allowance for doubtful accounts(2,648)—(23,433)(23,506)

Provision for business structure improvement(2,656)(732)

Provision for loss on guarantees(2,640)—(23,362)

Other, net(4,792)(8,205)(42,407)Total(31,202)(24,524)(276,128)

46,616

17,529412,531

Income before income taxes and Non-controlling interests

Comprehensive income attributable to:

See notes to financial statements.

Income taxes
Current

8,053

3,168

71,264

Deferred

2,780

523

24,600Net income

35,783

13,838316,667

Net income attributable to non-controlling interests

2,313

1,533

20,469¥ 33,470¥ 12,305$ 296,198

Net income attributable to owners of the parent

Yen

Yen U.S. dollars

Per share amounts
Net income – primary
Net income – fully diluted
Cash dividends (applicable to the period)¥ 234.84¥ 86.27——$ 2.08
—

80.00

—

0.71

Notes: 1. Net income per share has been computed based on the average number of shares of common stock outstanding during the respective fiscal year.
Diluted net income per share for 2017 and 2016 were not disclosed because there were no dilutive shares.
Notes: 2. SDK determined the payment of the dividend of ¥30.00 (US$ 0.27) per share based on the record date of May 11, 2017.
This was done at the extraordinary general meeting of shareholders held on June 27, 2017, and is included in the dividends per share for the fiscal year ended December 31, 2017.
See notes to financial statements.

78

S HOWA DENKO R EP ORT 2 O18

S HOWA DENKO R EP OR T 2 O18

79

About Showa Denko

Governance

Message from CFO

Financial

CSR

Financial Highlights

Management’s Discussion
and Analysis

Consolidated financial
statements

Corporate Data

Consolidated financial statements

Consolidated Statements of Income

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2017 and 2016

For the years ended December 31, 2017 and 2016
Thousands of
U.S. dollars

Millions of yen

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income

2017

2016

¥ 780,387¥ 671,159

2017

2017

$ 6,906,077

Net income

2017

2016

¥ 35,783¥ 13,838$ 316,667

602,778

544,994

5,334,317

177,609126,164

1,571,760

Valuation difference on available-for-sale securities

12,133

516

107,369

99,791

84,111

883,102

Deferred gains or losses on hedges

3,479

629

30,791

77,81842,053

688,658

Revaluation reserve for land

—

1,824

—

Foreign currency translation adjustments

1,455(4,520)12,878Remeasurements of defined benefit plans, net of tax

6,294(6,167)55,700

22

41

197

¥ 23,384¥ (7,678)$ 206,937¥ 59,167¥ 6,160$ 523,604

Other income (expenses)
Interest and dividends income

1,893

1,641

16,755Equity in earnings (losses) of unconsolidated subsidiaries and affiliates(7,689)4,328(68,042)

408

72

3,611

Gain on sales of investment securities, net

Thousands of
U.S. dollars

Millions of yen

Other comprehensive income:

Share of other comprehensive income of unconsolidated subsidiaries
and affiliates accounted for using equity method
Total other comprehensive income (loss)
Comprehensive income

(50)

(66)

(445)

Foreign exchange gains (losses)(2,791)(1,658)(24,702)

Rent income on noncurrent assets

1,381

1,506

12,225

Owners of parent

56,581

4,807

500,720

880

808

7,787

Non-controlling interests

2,586

1,353

22,884

Loss on valuation of investment securities

Gain (loss) on sales of noncurrent assets, net
Interest expenses(3,100)(3,231)(27,435)

Loss on retirement of noncurrent assets(5,310)(4,030)(46,990)(63,753)

Impairment loss

(7,204)(15,644)

Gain on bargain purchase

3,115

686

27,571

Provision of allowance for doubtful accounts(2,648)—(23,433)(23,506)

Provision for business structure improvement(2,656)(732)

Provision for loss on guarantees(2,640)—(23,362)

Other, net(4,792)(8,205)(42,407)Total(31,202)(24,524)(276,128)

46,616

17,529412,531

Income before income taxes and Non-controlling interests

Comprehensive income attributable to:

See notes to financial statements.

Income taxes
Current

8,053

3,168

71,264

Deferred

2,780

523

24,600Net income

35,783

13,838316,667

Net income attributable to non-controlling interests

2,313

1,533

20,469¥ 33,470¥ 12,305$ 296,198

Net income attributable to owners of the parent

Yen

Yen U.S. dollars

Per share amounts
Net income – primary
Net income – fully diluted
Cash dividends (applicable to the period)¥ 234.84¥ 86.27——$ 2.08
—

80.00

—

0.71

Notes: 1. Net income per share has been computed based on the average number of shares of common stock outstanding during the respective fiscal year.
Diluted net income per share for 2017 and 2016 were not disclosed because there were no dilutive shares.
Notes: 2. SDK determined the payment of the dividend of ¥30.00 (US$ 0.27) per share based on the record date of May 11, 2017.
This was done at the extraordinary general meeting of shareholders held on June 27, 2017, and is included in the dividends per share for the fiscal year ended December 31, 2017.
See notes to financial statements.

78

S HOWA DENKO R EP ORT 2 O18

S HOWA DENKO R EP OR T 2 O18

79

About Showa Denko

Governance

Message from CFO

Financial

CSR

Financial Highlights

Management’s Discussion
and Analysis

Consolidated financial
statements

Corporate Data

Consolidated financial statements

Consolidated Statements of Changes in Net Assets

Consolidated Statements of Cash Flows
For the years ended December 31, 2017 and 2016

For the years ended December 31, 2017 and 2016
Thousands

2017

1,497,113¥ 140,564¥ 62,221¥ 55,202¥ (10,157)¥ 3,927¥ (326)¥ 31,307¥ 18,611¥ (4,835)——(4,285)

—

—

—

—

—

—

—

(4,285)——12,305

—

—

—

—

—

—

—

12,305

—
—

—
(0)

—
—

(345)
0

—
—

—
—

—
—

—
—

—
—

—
—

(345)
0

—

—

70

—

—

—

—

—

—

—

70

—

—

—

—

—

—

—

—

—

—

—

—

(188)

—

—

—

—

—

—

—

—

(188)

Balance at December 31, 2016
Dividends from surplus
Net income (loss) attributable to ownersof the parent
Purchase of treasury stock
Disposal of treasury stock
Increase by increase of consolidated
subsidiaries
Decrease by increase of consolidated
subsidiaries
Change in treasury shares of parent
arising from transactions with noncontrolling shareholders
Reversal of revaluation reserve for land
Other
Net changes of items other thanshareholders' equity
Balance at December 31, 2017

—
—

2,093
(27)

—
—

—
—

—
—

—
—

—
—

¥ 11,629 ¥ 308,142

—
—

2,093
(27)

3,042

(6,535)

—

—

—

—

592

646

(281)

(4,372)(6,161)

149,711¥ 140,564¥ 62,033¥ 65,358¥ (10,502)¥ 4,519¥ 320¥ 31,026¥ 14,239¥ (10,996)

—

—

—

(4,285)

—

—

—

—

—

—

—

(4,285)———33,470

—

—

—

—

—

—

—

33,470

—
—

—
—

—
0

—
—

(11)
10

—
—

—
—

—
—

—
—

—
—

—
—

—

—

—

229

—

—

—

—

—

—

—

Income before income taxes and Non-controlling interests
Depreciation and amortization

38,45438,761

340,303

Impairment loss

7,204

15,64463,753

(12)

(11)

(106)

2,757

(6,441)

24,394

Amortization of negative goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in net defined benefit liability(10,610)

6,744(93,889)

Interest and dividends income(1,893)(1,641)(16,755)

Interest expenses

3,100

3,231

27,435Equity in (earnings) losses of unconsolidated subsidiaries and affiliates

7,689(4,328)68,042

Loss (gain) on sales and valuation of investment securities

(358)

(6)

(3,165)

Loss on retirement of noncurrent assets

5,310

4,030

46,990(808)(7,787)(2,380)(205,781)

Decrease (increase) in inventories(12,005)

20,112(106,235)

Increase (decrease) in notes and accounts payable-trade

10,172(10,315)

90,021(11)
10

Other, net

2,089(10,044)

18,485

Subtotal

74,38170,076658,235

229

Interest and dividends income received

4,410

5,565

39,030Interest expenses paid

(2,828)(3,227)(25,029)

(97)

—

—

—

—

—

—

—

(97)

—

—

(370)

—

—

—

—

—

—

—

—

(370)

—
—

—
—

—
—

1,486
(20)

—
—

—
—

—
—

—
—

—
—

—
—

—
—

1,486
(20)

Loss (gain) on sales of noncurrent assets(8,679)(3,466)(76,804)

67,28468,949595,432

Payments into time deposits(9,606)(29,438)(85,009)

Proceeds from withdrawal of time deposits

23,26825,287

205,908

Purchase of property, plant and equipment(343,999)

Income taxes paid (refund)—

149,711¥ 140,564¥ 61,663——

12,0283,461(1,485)

1,214¥ 96,142 ¥ (10,503) ¥ 16,547¥ 3,781¥ 29,541¥ 15,452

23,353¥ (4,716) ¥ 16,524 ¥ 364,997

Total
net assets$ 2,835 $ 274,565 $ 126,006

Noncontrollinginterests

Remeasurements ofdefinedbenefit plans
Foreigncurrencytranslation
adjustments

Revaluation
reserve forland$ (92,938)$ 39,987———(37,916)

—

—

—

—

—

—

—

(37,916)———

296,198

—

—

—

—

—

—

—

296,198

—
—

—
—

—
0

—
—

(98)
91

—
—

—
—

—
—

—
—

—
—

—
—

(98)
91

—

—

—

—

—

—

—

—

—

—

—

2,022

—

—

—

2,022

—

—

—

—

—

—

—

(856)

$ (97,312) $ 129,831 $ 2,754,256

Net cash provided by (used in) operating activities
Cash flows from investing activities(38,872)(38,317)

Proceeds from sales of property, plant and equipment

1,067

1,724

9,441

Purchase of investment securities(1,646)(3,163)(14,565)

Proceeds from sales of investment securities

15,121

173

133,811Purchase of investments in subsidiaries resulting in change in scope of consolidation(14,910)(2,132)(131,945)(754)(1,231)(6,676)

Payments of long-term loans receivable(1,045)(4,077)(9,252)

Collection of long-term loans receivable

609

322

5,386

(3,145)(2,903)(27,830)(29,914)(53,754)(264,729)

Net decrease (increase) in short-term loans receivable

Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term debt

19,921(7,242)

176,295

Proceeds from long-term loans payable

22,32842,288

197,590

Repayments of long-term loans payable(44,813)(49,273)(396,574)

Proceeds from share issuance of bonds—

17,000—

Redemption of bonds(10,000)(10,000)(88,496)——(3,277)

(856)

—

—

—

—

—

—

—

(3,277)

Cash dividends paid

(4,277)(4,267)(37,848)

—
—

—
—

—
—

13,152
(175)

—
—

—
—

—
—

—
—

—
—

—
—

—
—

13,152(175)

Cash dividends paid to non-controlling shareholders(1,648)(376)(14,581)118(1,350)

1,044

—

—

—

—

—

106,446

30,629(13,137)

10,741

55,58016,403

206,663

Net cash provided by (used in) financing activities(18,370)(13,220)(162,570)

149,711 $ 1,243,925 $ 545,691 $ 850,814 $ (92,944) $ 146,433

See notes to financial statements.

Deferred gains
or losses onhedges$ 1,243,925 $ 548,968 $ 578,390

Valuationdifference on
available forsale securities

Treasurystock

Retainedearnings

Capitalsurplus149,711

Dividends from surplus
Net income (loss) attributable to ownersof the parent
Purchase of treasury stock
Disposal of treasury stock
Increase by increase of consolidated
subsidiaries
Decrease by increase of consolidated
subsidiaries
Change in treasury shares of parent
arising from transactions with noncontrolling shareholders
Reversal of revaluation reserve for land
Other
Net changes of items other thanshareholders' equity

1,854

Thousands of U.S. dollars (Note 4)
Capitalstock

Number ofshares ofcapital stock

Balance at December 31, 2016

6,281

$ 412,531

(880)

—

—

¥ 17,529(23,253)——¥ 46,616

Adjustments for:

Decrease (increase) in notes and accounts receivable-trade¥ 14,671 ¥ 311,231—

Thousands

Balance at December 31, 2017

—
—

2017

2016

Cash flows from operating activities

Dividends from surplus—
Net income (loss) attributable to owners—of the parent
Purchase of treasury stock—
Disposal of treasury stock—
Increase by increase of consolidated—
subsidiaries
Decrease by increase of consolidated—
subsidiaries
Change in treasury shares of parent
arising from transactions with non—controlling shareholders
Reversal of revaluation reserve for land—
Other
(1,347,402)
Net changes of items other than—shareholders' equity——

Thousands of
U.S. dollars

Millions of yen

Total
net assets

Noncontrollinginterests

Remeasurements ofdefinedbenefit plans
Foreigncurrencytranslation
adjustments

Revaluation
reserve for
land

Deferredgains
or losseson hedges
Valuationdifference on
available forsale securities

Treasurystock

Retainedearnings

CapitalsurplusCapitalstock

Number ofshares ofcapital stock

Balance at December 31, 2015

Millions of yen$ 33,464 $ 261,427 $ 136,747 $ (41,732) $ 146,234 $ 3,230,060

Other, net
Effect of exchange rate changes on cash and cash equivalents

953

(523)

8,434

Net increase (decrease) in cash and cash equivalents

19,952

1,453

176,567

Cash and cash equivalents at beginning of the year

56,18654,597497,217

696

136

6,158

¥ 76,833¥ 56,186$ 679,942

Increase in cash and cash equivalents resulting from newly consolidated subsidiaries
Cash and cash equivalents at end of the year
See notes to financial statements.

80

S HOWA DENKO R EP ORT 2 O18

S HOWA DENKO R EP OR T 2 O18

81

About Showa Denko

Governance

Message from CFO

Financial

CSR

Financial Highlights

Management’s Discussion
and Analysis

Consolidated financial
statements

Corporate Data

Consolidated financial statements

Consolidated Statements of Changes in Net Assets

Consolidated Statements of Cash Flows
For the years ended December 31, 2017 and 2016

For the years ended December 31, 2017 and 2016
Thousands

2017

1,497,113¥ 140,564¥ 62,221¥ 55,202¥ (10,157)¥ 3,927¥ (326)¥ 31,307¥ 18,611¥ (4,835)——(4,285)

—

—

—

—

—

—

—

(4,285)——12,305

—

—

—

—

—

—

—

12,305

—
—

—
(0)

—
—

(345)
0

—
—

—
—

—
—

—
—

—
—

—
—

(345)
0

—

—

70

—

—

—

—

—

—

—

70

—

—

—

—

—

—

—

—

—

—

—

—

(188)

—

—

—

—

—

—

—

—

(188)

Balance at December 31, 2016
Dividends from surplus
Net income (loss) attributable to ownersof the parent
Purchase of treasury stock
Disposal of treasury stock
Increase by increase of consolidated
subsidiaries
Decrease by increase of consolidated
subsidiaries
Change in treasury shares of parent
arising from transactions with noncontrolling shareholders
Reversal of revaluation reserve for land
Other
Net changes of items other thanshareholders' equity
Balance at December 31, 2017

—
—

2,093
(27)

—
—

—
—

—
—

—
—

—
—

¥ 11,629 ¥ 308,142

—
—

2,093
(27)

3,042

(6,535)

—

—

—

—

592

646

(281)

(4,372)(6,161)

149,711¥ 140,564¥ 62,033¥ 65,358¥ (10,502)¥ 4,519¥ 320¥ 31,026¥ 14,239¥ (10,996)

—

—

—

(4,285)

—

—

—

—

—

—

—

(4,285)———33,470

—

—

—

—

—

—

—

33,470

—
—

—
—

—
0

—
—

(11)
10

—
—

—
—

—
—

—
—

—
—

—
—

—

—

—

229

—

—

—

—

—

—

—

Income before income taxes and Non-controlling interests
Depreciation and amortization

38,45438,761

340,303

Impairment loss

7,204

15,64463,753

(12)

(11)

(106)

2,757

(6,441)

24,394

Amortization of negative goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in net defined benefit liability(10,610)

6,744(93,889)

Interest and dividends income(1,893)(1,641)(16,755)

Interest expenses

3,100

3,231

27,435Equity in (earnings) losses of unconsolidated subsidiaries and affiliates

7,689(4,328)68,042

Loss (gain) on sales and valuation of investment securities

(358)

(6)

(3,165)

Loss on retirement of noncurrent assets

5,310

4,030

46,990(808)(7,787)(2,380)(205,781)

Decrease (increase) in inventories(12,005)

20,112(106,235)

Increase (decrease) in notes and accounts payable-trade

10,172(10,315)

90,021(11)
10

Other, net

2,089(10,044)

18,485

Subtotal

74,38170,076658,235

229

Interest and dividends income received

4,410

5,565

39,030Interest expenses paid

(2,828)(3,227)(25,029)

(97)

—

—

—

—

—

—

—

(97)

—

—

(370)

—

—

—

—

—

—

—

—

(370)

—
—

—
—

—
—

1,486
(20)

—
—

—
—

—
—

—
—

—
—

—
—

—
—

1,486
(20)

Loss (gain) on sales of noncurrent assets(8,679)(3,466)(76,804)

67,28468,949595,432

Payments into time deposits(9,606)(29,438)(85,009)

Proceeds from withdrawal of time deposits

23,26825,287

205,908

Purchase of property, plant and equipment(343,999)

Income taxes paid (refund)—

149,711¥ 140,564¥ 61,663——

12,0283,461(1,485)

1,214¥ 96,142 ¥ (10,503) ¥ 16,547¥ 3,781¥ 29,541¥ 15,452

23,353¥ (4,716) ¥ 16,524 ¥ 364,997

Total
net assets$ 2,835 $ 274,565 $ 126,006

Noncontrollinginterests

Remeasurements ofdefinedbenefit plans
Foreigncurrencytranslation
adjustments

Revaluation
reserve forland$ (92,938)$ 39,987———(37,916)

—

—

—

—

—

—

—

(37,916)———

296,198

—

—

—

—

—

—

—

296,198

—
—

—
—

—
0

—
—

(98)
91

—
—

—
—

—
—

—
—

—
—

—
—

(98)
91

—

—

—

—

—

—

—

—

—

—

—

2,022

—

—

—

2,022

—

—

—

—

—

—

—

(856)

$ (97,312) $ 129,831 $ 2,754,256

Net cash provided by (used in) operating activities
Cash flows from investing activities(38,872)(38,317)

Proceeds from sales of property, plant and equipment

1,067

1,724

9,441

Purchase of investment securities(1,646)(3,163)(14,565)

Proceeds from sales of investment securities

15,121

173

133,811Purchase of investments in subsidiaries resulting in change in scope of consolidation(14,910)(2,132)(131,945)(754)(1,231)(6,676)

Payments of long-term loans receivable(1,045)(4,077)(9,252)

Collection of long-term loans receivable

609

322

5,386

(3,145)(2,903)(27,830)(29,914)(53,754)(264,729)

Net decrease (increase) in short-term loans receivable

Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term debt

19,921(7,242)

176,295

Proceeds from long-term loans payable

22,32842,288

197,590

Repayments of long-term loans payable(44,813)(49,273)(396,574)

Proceeds from share issuance of bonds—

17,000—

Redemption of bonds(10,000)(10,000)(88,496)——(3,277)

(856)

—

—

—

—

—

—

—

(3,277)

Cash dividends paid

(4,277)(4,267)(37,848)

—
—

—
—

—
—

13,152
(175)

—
—

—
—

—
—

—
—

—
—

—
—

—
—

13,152(175)

Cash dividends paid to non-controlling shareholders(1,648)(376)(14,581)118(1,350)

1,044

—

—

—

—

—

106,446

30,629(13,137)

10,741

55,58016,403

206,663

Net cash provided by (used in) financing activities(18,370)(13,220)(162,570)

149,711 $ 1,243,925 $ 545,691 $ 850,814 $ (92,944) $ 146,433

See notes to financial statements.

Deferred gains
or losses onhedges$ 1,243,925 $ 548,968 $ 578,390

Valuationdifference on
available forsale securities

Treasurystock

Retainedearnings

Capitalsurplus149,711

Dividends from surplus
Net income (loss) attributable to ownersof the parent
Purchase of treasury stock
Disposal of treasury stock
Increase by increase of consolidated
subsidiaries
Decrease by increase of consolidated
subsidiaries
Change in treasury shares of parent
arising from transactions with noncontrolling shareholders
Reversal of revaluation reserve for land
Other
Net changes of items other thanshareholders' equity

1,854

Thousands of U.S. dollars (Note 4)
Capitalstock

Number ofshares ofcapital stock

Balance at December 31, 2016

6,281

$ 412,531

(880)

—

—

¥ 17,529(23,253)——¥ 46,616

Adjustments for:

Decrease (increase) in notes and accounts receivable-trade¥ 14,671 ¥ 311,231—

Thousands

Balance at December 31, 2017

—
—

2017

2016

Cash flows from operating activities

Dividends from surplus—
Net income (loss) attributable to owners—of the parent
Purchase of treasury stock—
Disposal of treasury stock—
Increase by increase of consolidated—
subsidiaries
Decrease by increase of consolidated—
subsidiaries
Change in treasury shares of parent
arising from transactions with non—controlling shareholders
Reversal of revaluation reserve for land—
Other
(1,347,402)
Net changes of items other than—shareholders' equity——

Thousands of
U.S. dollars

Millions of yen

Total
net assets

Noncontrollinginterests

Remeasurements ofdefinedbenefit plans
Foreigncurrencytranslation
adjustments

Revaluation
reserve for
land

Deferredgains
or losseson hedges
Valuationdifference on
available forsale securities

Treasurystock

Retainedearnings

CapitalsurplusCapitalstock

Number ofshares ofcapital stock

Balance at December 31, 2015

Millions of yen$ 33,464 $ 261,427 $ 136,747 $ (41,732) $ 146,234 $ 3,230,060

Other, net
Effect of exchange rate changes on cash and cash equivalents

953

(523)

8,434

Net increase (decrease) in cash and cash equivalents

19,952

1,453

176,567

Cash and cash equivalents at beginning of the year

56,18654,597497,217

696

136

6,158

¥ 76,833¥ 56,186$ 679,942

Increase in cash and cash equivalents resulting from newly consolidated subsidiaries
Cash and cash equivalents at end of the year
See notes to financial statements.

80

S HOWA DENKO R EP ORT 2 O18

S HOWA DENKO R EP OR T 2 O18

81

About Showa Denko

Governance

Message from CFO

Financial

CSR

Corporate Data (As of Dec 31, 2017)
Company

Showa Denko K.K

NameFormed

June 1, 1939

Employee Consolidated

10,864 Parent : 3,616

Subsidiaries & Affiliates

Consolidated subsidiaries: 62
Equity method applied: 11

Consolidated financial
statements

Corporate Data

Authorized number of shares 330,000,000

13-9, Shiba Daimon 1-chome, Minato-ku, Tokyo
105-8518, Japan
Phone: +81-3-5470-3235

140,564 million

Management’s Discussion
and Analysis

Stocks information

Head Office

CapitalFinancial Highlights

Number of Shares Outstanding

149,711,292

Number of Shareholders

60,531* SDK consolidated every ten shares of its common stock into one share on July 1, 2016.

URL: http://www.sdk.co.jp/
E-mail: sdk_prir@showadenko.com▶ Shareholders (Top 10)

当社への出資状況
Shareholder

Number of Shares
Rate ofHeld (in thousands) Shareholding (%)

Commercial

America

Singapore

The Master Trust Bank of Japan, Ltd.(T)

9,166

6.42

Subsidiaries

Showa Denko America, Inc.

Showa Denko Singapore (Pte.) Ltd.

Japan Trustee Services Bank, Ltd.(T)

7,701

5.39

Abroad420 Lexington Avenue, Suite #2335A,

2 Shenton Way #15-03/04, SGX Centre 1,

Fukoku Mutual Life Insurance Company

5,517

3.86

New York, NY 10170, U.S.A.

Singapore 068804

MORGAN STANLEY & CO. LLC

3,651

2.56

Phone : +1-212-370-0033

Phone : +65-6223-1889

The Dai-ichi Life Insurance Company,Limited

Fax : +1-212-370-4566

Fax : +65-6223-6007

3,600

2.52

MSCO CUSTOMER SECURITIES

3,321

2.33

Germany

China

Japan Trustee Services Bank, Ltd.(T9)

3,028

2.12

Showa Denko Europe GmbHShowa Denko (Shanghai) Co., Ltd.

Sompo Japan Nipponkoa Insurance Inc.

3,007

2.11

Konrad-Zuse-Platz 3,

18F, Wang-Wang Building No. 211, Shimen Yi Road,

NORTHERN TRUST CO. (AVFC) SUB A/C NON TREATY

2,956

2.07

81829 Munich, Germany

Jingan, Shanghai, 200041, China

Japan Trustee Services Bank, Ltd.(T5)

2,659

1.86

Phone : +49-89-939-9620

Phone : +86-21-6217-5000

Fax : +49-89-939-96250

Fax : +86-21-6217-9840（注）
持株比率は発行済株式総数から自己株式（6,897千株）を控除して算出しております。

▶ Shareholders by Sector

Japanese
corporate
entities

6,056
4.05％

Securities firms

3,401
2.27％

Treasury shares

6,897
4.61％

Financial
firms

58,25938.91％

Individuals

Europe

10
Japan
Asia

82

S HOWA DENKO R EP ORT 2 O18

28

33

North America

523,231
15.52％

株式数合計

149,711

Foreign corporate entities, etc.

51,86734.64％S HOWA DENKO R EP OR T 2 O18

83

About Showa Denko

Governance

Message from CFO

Financial

CSR

Corporate Data (As of Dec 31, 2017)
Company

Showa Denko K.K

NameFormed

June 1, 1939

Employee Consolidated

10,864 Parent : 3,616

Subsidiaries & Affiliates

Consolidated subsidiaries: 62
Equity method applied: 11

Consolidated financial
statements

Corporate Data

Authorized number of shares 330,000,000

13-9, Shiba Daimon 1-chome, Minato-ku, Tokyo
105-8518, Japan
Phone: +81-3-5470-3235

140,564 million

Management’s Discussion
and Analysis

Stocks information

Head Office

CapitalFinancial Highlights

Number of Shares Outstanding

149,711,292

Number of Shareholders

60,531* SDK consolidated every ten shares of its common stock into one share on July 1, 2016.

URL: http://www.sdk.co.jp/
E-mail: sdk_prir@showadenko.com▶ Shareholders (Top 10)

当社への出資状況
Shareholder

Number of Shares
Rate ofHeld (in thousands) Shareholding (%)

Commercial

America

Singapore

The Master Trust Bank of Japan, Ltd.(T)

9,166

6.42

Subsidiaries

Showa Denko America, Inc.

Showa Denko Singapore (Pte.) Ltd.

Japan Trustee Services Bank, Ltd.(T)

7,701

5.39

Abroad420 Lexington Avenue, Suite #2335A,

2 Shenton Way #15-03/04, SGX Centre 1,

Fukoku Mutual Life Insurance Company

5,517

3.86

New York, NY 10170, U.S.A.

Singapore 068804

MORGAN STANLEY & CO. LLC

3,651

2.56

Phone : +1-212-370-0033

Phone : +65-6223-1889

The Dai-ichi Life Insurance Company,Limited

Fax : +1-212-370-4566

Fax : +65-6223-6007

3,600

2.52

MSCO CUSTOMER SECURITIES

3,321

2.33

Germany

China

Japan Trustee Services Bank, Ltd.(T9)

3,028

2.12

Showa Denko Europe GmbHShowa Denko (Shanghai) Co., Ltd.

Sompo Japan Nipponkoa Insurance Inc.

3,007

2.11

Konrad-Zuse-Platz 3,

18F, Wang-Wang Building No. 211, Shimen Yi Road,

NORTHERN TRUST CO. (AVFC) SUB A/C NON TREATY

2,956

2.07

81829 Munich, Germany

Jingan, Shanghai, 200041, China

Japan Trustee Services Bank, Ltd.(T5)

2,659

1.86

Phone : +49-89-939-9620

Phone : +86-21-6217-5000

Fax : +49-89-939-96250

Fax : +86-21-6217-9840（注）
持株比率は発行済株式総数から自己株式（6,897千株）を控除して算出しております。

▶ Shareholders by Sector

Japanese
corporate
entities

6,056
4.05％

Securities firms

3,401
2.27％

Treasury shares

6,897
4.61％

Financial
firms

58,25938.91％

Individuals

Europe

10
Japan
Asia

82

S HOWA DENKO R EP ORT 2 O18

28

33

North America

523,231
15.52％

株式数合計

149,711

Foreign corporate entities, etc.

51,86734.64％S HOWA DENKO R EP OR T 2 O18

83

Contact desk
Public Relation Office, Showa Denko K.K.
TEL : +81-3-5470-3235
Website : http : //www.sdk.co.jp/english/csr.html
E-Mail : sdk_prir@showadenko.com– We adopted eco-friendly paper and printing.

SHOWA DENKOREPORT– SRI indexes adopting Showa Denko

As of January 20182018