Sanyo Chemical Group
Integrated Report2023

For the year ended March 31, 2023

Profile

StrategyFoundation

Sanyo Chemical Group Corporate Identity
On the Publication of Integrated Report 2023

Sanyo Chemical Group company mission

Establish a better society
through our corporate activities

Vision 2030

In FY2022, the Sanyo Chemical Group formulated the management policy “WakuWaku Explosion 2030” as a compass for achieving its Vision 2030. In order to create a sustainable society where everyone can shine, we are working together as a group to make changes under
three pillars of “Contribution to carbon neutrality,” “Improvement of QOL (Quality of Life),” and “Improvement of job satisfaction.” We havepublished an Integrated Report since FY2022 with the aim of conveying our long-term vision and initiatives to achieve it in an easy-tounderstand manner, and of deepening the understanding of the Group among shareholders and investors.
In May 2023, in order to clarify the path for sustainable growth toward the realization of our Vision 2030, which is envisioned in ourmanagement policy, we established the New Medium-Term Management Plan 2025 – Accelerate Transformation to Realize Our Vision – forthe three years starting from FY2023.
In Integrated Report 2023, we explain the value creation process for achieving our Vision 2030, the business strategy in the New
Medium-Term Management Plan 2025, and sustainable management based on material issues for the future. We have also reflected theadvice that we have received on Integrated Report 2022, published last year, to enhance the content of Integrated Report 2023 so that it
will be a more useful tool.
We hope that this report will help our shareholders, investors, and other stakeholders to better understand the Group. We look forward
to your continued support in the future.
September 2023
Hiroyuki Susaki
Director, Managing Executive Officer
General Manager of the Corporate Planning Division

CONTENTS
ProfileVisionGrow into a global, unique, and highly profitable company where

Foundation

1

Sanyo Chemical Group Corporate Identity3

Sanyo Chemical Group History

5

At a Glance

7

Financial and Non-financial Highlights

every employee feels pride and satisfaction from his/her work

35	Feature: Dialogue | Safety Improvement and
Safety Culture at Production Sites
39	Occupational Safety and Health/Accident Prevention
41

Climate Change(response to TCFD recommendations)43

Message from the Chairmanof the Board of Directors

Strategy

Values● Inspire WakuWaku* feeling from all the stakeholders● Co-create environmental, social and economic values with the stakeholders● Facilitate every employee’s value creation* The Japanese word which express positive, bright, uplifting feeling inspired by inner motivations and/or own wills.

9

Sanyo Chemical Group Value Creation Process

11

Sanyo Chemical Group Material Issues

44

Corporate Governance

13

Message from the President

50

Risk Management

16

New Medium-Term Management Plan 2025

51

Compliance17

Basic Policies

18

Business Strategy

23

Toward the Future Beyond 2025

52	Directors, Audit & Supervisory Board Members,
and Executive Officers

55

Eleven-year Financial Summary

57

Stock Information/Company Overview

Disclaimer
This document contains forward-looking statements regarding the plans, strategies, and performance of the Sanyo Chemical Group. These
forward-looking statements are based on information available as of August 3, 2023. However, actual results may differ significantly due to economic conditions surrounding the Sanyo Chemical Group’s business domains, competitive conditions, changes in product development status,
related laws and regulations, exchange rate fluctuations, and other factors. Please note that factors that affect these statements are not limited to
the factors above.

1

Sanyo Chemical Group Integrated Report 2023

Sanyo Chemical Group Integrated Report 2023

2

Profile

StrategyFoundation

Sanyo Chemical Group History
The Sanyo Chemical Group began operation in Kyoto in 1907 as Tada Soap-Oleo Works, a general partnership company,
which manufactured and sold high-quality soap. In 1949, during the recession in Japan after World War II, the company restarted as a joint venture (capital: 4 million yen, number of employees: 123) between Toyo Cotton Co., Ltd. and Toyo Rayon
Co., Ltd. In 1963, the company name was changed to Sanyo Chemical Industries.

1997

Sanyo Kasei (Thailand) Ltd. established

2010

SANYO KASEI (TAIWAN) LTD. established

1999

Kinuura Satellite Factory, now Kinuura Factory, began
operations.

2015

SDP GLOBAL (MALAYSIA) SDN. BHD. established2017

GC Polyols Co., Ltd. established2001

San-Dia Polymers, Ltd., now SDP Global Co., Ltd.,established2018

Sanyo Chemical Manufacturing Korea, Ltd. established

2003

Code of Corporate Ethics enacted

2019

Sanyo Chemical Foundation for Social Contribution
established

2022

Transferred to the Prime Market of Tokyo Stock Exchange

Sanyo Kasei (Nantong) Co., Ltd. established
San-Dia Polymers (Nantong) Co., Ltd. established

FUJIFILM Sanyo Chemical Healthcare Corporation
established

Added Sunrise Chemical LLC as an affiliate

Tada Soap-Oleo Works at
the time of its founding:
Located around the current
Kyoto Factory

1907
1949

Sanyo Oil & Fat Industrial Co., Ltd. established1977

San-Petrochemicals Co., Ltd. established

Investment: 50% each by Toyo Cotton Co., Ltd. and Toyo Rayon Co., Ltd.
Capital: 4 million yen; Number of employees: 123

1978

Stock listed on the First Section of Tokyo and Osaka
Stock Exchanges

1982

San Chemical Co., Ltd. established1989

SANAM Corporation, now Sanyo Chemical America
Incorporated, established

Kawasaki Factory, now San Chemical Co., Ltd., began
operations.

1963

Corporate name changed to Sanyo Chemical Industries

1966

SAN NOPCO LIMITED established

SANYO CHEMICAL (SHANGHAI) TRADING CO., LTD.
established2008

Sanyo Kasei Korea, Ltd. established

Consolidated net sales for FY2022

174.9 billion yen

180

120

90

60

San-Abbott Ltd., now San-Apro Ltd., established1968(billion yen)Overseas net sales

Kashima Factory began operations.

1960

2007

150

1976

Research institute launched

Sanyo Chemical Texas, Inc., now Sanyo Chemical Texas
Industries, LLC, established

Katsura Research Laboratory began operations.

Tada Soap-Oleo Works established

1959

2005

Domestic net sales

Stock listed on the Second Section of Osaka Stock Exchange and on Kyoto Stock Exchange (abolished in 2001)

30

Nagoya Factory began operations.
0

1949

1955

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

Development of New Products
1960

SANNIX raw material for polyurethane foams andPEG polyethylene glycol developed

1972

HIMER toner resin developed

1992

UCOAT polyurethane emulsion developed

1977

SANWET superabsorbent polymer developed

1994

PELESTAT permanent antistatic agent developed

1963

ACLUBE lubricant additive developed

1978

EIA diagnostic reagent developed

1969

SANFLOC polymer flocculant developed

1982

CARRYOL cold flow improver for fuel oil developed

1986

SANELEK electrolyte for aluminum electrolytic capacitors and SANMODUR chemical board (tooling material)
developed

Sanyo Chemical Group Integrated Report 2023

2022

（FY）

2010

PELECTRON permanent antistatic agent developed
SANWET SG superabsorbent polymer developed
Approved as a medical device business operator for the
first time

1999

POWERELEK electrolyte for electric double-layer capacitors developed

2011

2000

THERPUS thermoplastic polyurethane beads and
NAROACTY synthetic higher alcohol-based nonionicsurfactant developed2012

New manufacturing process for raw materials for polyurethane foams developed

2014

HYDROFIT surgical hemostatic agent launched as our
first-ever medical device in Japan (The overseas tradename is AQUABRID®.)

2002

ULTIFLOW, EXCELFLOW, and PRIMEPOL raw materials
for polyurethane foams developed

2003

APEXNARROW polyester beads used as a core component of polymerization toners developed

2015

Magrapid magnetic particle for EIA diagnostic reagentsdeveloped

2004

LEVEFLOW agent for slurry excavation developed

2016

2005

EIA diagnostic reagent for small cell lung cancer developed

CALPROTECTIN MOCHIDA received Japan’s first approval as an in vitro diagnostic agent for Ulcerative Colitis.

2006

LAUROMACROGOL 100 medical drug exclusively usedin manufacturing developed

2017

EMULMIN CS liquid laundry detergent base developed

2019

ALPHAPUR HSG cosmetic nonionic surfactant developed

HISTAT SK cutting fluid for silicon ingots developed

2020

CHEMICLEAN PR cleaning agent for use in hard disk
manufacturing developed

PIUSERIA AMC amino acid-type amphoteric surfactant
developed

2021

2008

SphereLight proBNP clinical reagent for diagnosis ofheart failure developed

SANNIX FA-817 raw material for urethane foams forbedding developed

2022

2009

SHARPFLOW raw material for polyurethane foams
developed

MICELAND SCD-100 laundry detergent base that contributes to reducing environmental impact developed

2007

3

2015

* Disclosure of consolidated financial results started in FY1994
Full-fledged consolidated accounting started in FY1999

Sanyo Chemical Group Integrated Report 2023

4

Profile

StrategyFoundation

At a Glance
FY2022

Net sales: 174.9 billion yen

Operating profit: 8.4 billion yen

Sales composition ratio
Environmental Protection,
Construction and Others
Informationand Electrics/
Electronics

13％

Environmental
Protection,
Construction
and Others

33％

Toiletries and
Health Care

14％

Plastics andTextiles28％

Information andElectrics/Electronics

Petroleum andAutomotives

Net sales / Operating profit by segment
Net sales (billion yen)
80

Operating profit (billion yen)

55.2
40

57.0

54.9

54.3

53.7

8

4

3.4
1.9

1.8

1.3

0.1

0

40

Operating profit (billion yen)

43.1

3.4

42.7 4.2

37.3 3.8

8

42.5

48.2
3.7

4

2.9

0

Plastics andTextilesPetroleum andAutomotives

Plastics andTextilesOperating profit (billion yen)

40

3.6
22.1

3.2
21.4

20.8

2.9

8

3.7
25.4

4

28.1 2.8

0Overview of segments for the current fiscal year

Surfactants for detergents, surfactants for haircare products, agents for papermaking,superabsorbent polymers (SAPs), rawmaterials for pharmaceuticals, germicides/disinfectants, surgical hemostatic agents, clinicaldiagnostic reagents for enzyme immunoassay(EIA), potting resins for artificial kidneys

In the Toiletries segment, although demand for polyethylene glycol declined due to the lockdown inShanghai, China, sales of papermaking chemicals remained strong, resulting in steady sales. In the
Health Care segment, sales of superabsorbent polymers decreased in volume in all locations.
Although sales increased slightly due to the revision of selling prices in response to rising raw material
costs, operating profit declined significantly.
Total net sales in this segment increased by 3.9% year on year to 57.068 billion yen, and operating
profit was 0.113 billion yen (a decrease of 94.2% year on year).

Thermoplastic polyurethane beads for theinterior parts of automobiles (TUBs), rawmaterials for polyurethane foams (PPG),
lubricant additives, additives for fuel oil,water-soluble cutting fluid, halogen-freecleaning agents, base materials for synthetic
lubricants, paste resins for design models,
resins for automobile paints

Information andElectrics/
Electronics

4.3

40

22.7

4

3.3
20.9

8

17.0 1.7

20.9 2.5

23.1 2.50Environmental
Protection,
Construction
and Others

40

8

40

4

16.5 1.3

15.2 1.3

18.6 1.5

18.2

0

In the Petroleum and Automotives segment, sales increased due to price revisions caused by soaring
raw material costs, despite a decrease in demand for raw materials for polyurethane foams used in
automobile seats and other applications, thermoplastic polyurethane beads for interior parts ofautomobiles, and lubricant additives due to automobile production adjustments. Total net sales in thissegment increased by 13.5% year on year to 48.279 billion yen, and operating profit was 2.988 billion
yen (a decrease of 20.5% year on year) due to a decrease in sales volume.

2019

0

80

Operating profit (billion yen)

54.0

53.0
4.0

40

8

56.0 5.2

4.5

40
Net sales (billion yen)

Permanent antistatic agents, pigment
dispersants, resin modifiers, paint resins,defoaming agents, base materials forpolyurethane elastomers, chemical boards formodels, agents for textile manufacturing,chemicals for carbon fibers, agents forfiberglass, polyurethane resins for artificial
and synthetic leather

In the Plastics segment, although sales of permanent antistatic agents were weak, sales of paintcoating agents and additives increased overseas, resulting in strong sales. In the Textiles segment,
sales experienced a large increase as sales of chemicals for carbon fibers increased steadily andsales of polyurethane resins for synthetic leather and elastomer fiber were strong. Total net sales inthis segment increased by 10.6% year on year to 28.177 billion yen, and operating profit was 2.837
billion yen (a decrease of 23.6% year on year) due to a decrease in sales volume.

Polyester beads used as a core component ofpolymerization toners (PEBs), toner resins,
electrolytes for aluminum electrolytic
capacitors, adhesives for electronic materials,
chemicals for use in electronic parts
manufacturing, UV/EB curing resins

In the Information segment, sales experienced a large increase. This was mainly due to recovery of
office printing demand, which had stagnated due to the COVID-19 pandemic, as well as strong salesof raw materials for polyester beads as a core component of polymerization toners and pulverized
toner resins. In the Electrics/Electronics segment, although demand for raw materials used ingeneral-purpose resists declined due to the slowdown in the semiconductor market, sales ofphotosensitized materials used as raw materials in cutting-edge resists increased, and sales ofelectrolytes for aluminum electrolytic capacitors also increased, resulting in strong sales. Total net
sales in this segment increased by 10.4% year on year to 23.163 billion yen, and operating profit was
2.558 billion yen (an increase of 1.9% year on year).

80

Operating profit (billion yen)

40

29.0

3.5

30.0

4.0

8

4.5

4

31.0

0

Polymer flocculants for wastewater treatment,
cationic monomers, PPG for furniture and heatinsulating materials, slurry agents, reactive
hot-melt adhesives, raw materials for building
sealants, cement chemicals

1.4
0

2018

1.2

0.3

0.0

0
Net sales (billion yen)

80

Operating profit (billion yen)

40

25.0

3.2

8

4.5

3.8

4

26.0

25.5

0

0
Net sales (billion yen)

Operating profit (billion yen)

1.4

4

0

0

18.2

8

64.0

59.5

54.0

Net sales (billion yen)
80

Operating profit (billion yen)

Net sales (billion yen)0

Operating profit (billion yen)

Net sales (billion yen)80

0

Net sales (billion yen)
80

Targets in the New Medium-Term
Management Plan 2025

Main products

0
Net sales (billion yen)80

attributable to owners of parent was 5.684 billion yen (a decrease of 15.2% year on year) due to a decrease in sales volume, an increase in selling and general administrative expenses, and other factors.

30％

29％

yen (a decrease of 29.2% year on year), ordinary profit was 9.918 billion yen (a decrease of 22.3% year on year), and profit

0

Net sales (billion yen)
80

Toiletries and
Health Care

1％

26％

16％

Petroleum andAutomotives

factors such as price revisions in response to rising raw material costs. In terms of profits, operating profit was 8.405 billion

Operating profit composition ratio by segment

10％

Toiletries and
Health CareNet sales for the current consolidated fiscal year amounted to 174.973 billion yen (an increase of 7.7% year on year) due to

2020

2021

2022

（FY）

In the Environmental Protection segment, although demand for cationic monomers for polymer
flocculants for overseas markets was sluggish, sales increased due to price revisions caused bysoaring raw material costs. In the Construction segment, sales of raw materials for polyurethane
foams mainly used in furniture and heat insulating materials were weak due to a lull in demand forstaying at home. Total net sales in this segment decreased by 1.7% year on year to 18.284 billion yen,and operating profit was 1.408 billion yen (a decrease of 11.3% year on year).

80

Operating profit (billion yen)

8

40

4

19.0

21.0

23.0

1.0

1.2

1.4

2023

2024

2025

0

0
（FY）

(Note) Operating profit for each reportable segment is calculated without including R&D expenses related to new businesses that do not belong to each segment.

5

Sanyo Chemical Group Integrated Report 2023

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6

Profile

StrategyFoundation

Financial and Non-financial Highlights
Financial highlights

Non-financial highlights

Net sales / Overseas net sales ratio■■ Domestic net sales ■■ Overseas net sales

Overseas net sales ratio（million yen）（％）

180,000
161,599

155,503

162,526

174,973

38.7〈Scope 3〉*3■■ Operating proﬁt■■ Direct emissions (Scope 1)

43.9

43.0

43.7

30.0

Operating proﬁt to net sales（million yen）

ROIC*1（％）

15,000144,75760.0

38.1

CO2 emissions〈Direct emissions (Scope 1) + Indirect emissions (Scope 2)〉*2

12.0
12,919120,000

60,00090.0

CO2 emissions
Operating proﬁt / Operating proﬁt to net sales / ROIC

10,000

5,000

8.0

5.8

12,4398.0

6.6

11,932（1,000 ton-CO2）

3,000
313

300

0

8,405

200

5.5

2020

2021

2022

2018

2019

2020

2021

2022

130

182

172

146

130

0

0

（FY）

2018

2019

2020

2021

2022

*2 S
 cope of data collection: Sanyo Chemical Industries, Ltd., domestic subsidiaries andaffiliates, and overseas subsidiaries and affiliates with a production site

Ordinary proﬁt / Ordinary proﬁt to net sales

Proﬁt attributable to owners of parent / ROE

Energy consumption■■ Ordinary proﬁt■■ Proﬁt attributable to owners of parent■■ Domestic（million yen）（％）

18,00015.0（million yen）

（％）

12.0

12,00012,00011,999

9,000

（kL）

9,918

9.4
8.2

8.3

6,000

7.9

7,668
6,000

5.0
5.7

0

3,000

2019

2020

2021

2022

6,699
5,684

6.0

5.4

4.1

4.7

（FY）

49,205

2019

2020

2021

2022

（FY）

64,981

51,205

1.614

123,2211.500

44,993

1.000

3.0

0
2018

57,3226.0
50,000

3.9

2022

2.000

145,080 147,359 146,054

100,000

0

0
2018

5,345

7,282

2019

（Frequency rate）

150,000

9.0

10.0

2018

*3 Scope of data collection:
Cat. 1–7: Sanyo Chemical Industries, Ltd., SDP Global Co., Ltd., and San Chemical Co., Ltd.
Cat. 12: S anyo Chemical Industries, Ltd., SDP Global Co., Ltd., San Chemical Co., Ltd., andsome products sold by overseas subsidiaries and affiliates
Cat. 15: Sanyo Chemical Industries, Ltd.

Occupational accident frequency rate*4

15,205
12,771（FY）■■ Overseas

132,218
12,704

2021

1,000
165

Return on equity (ROE)

2020

2,513

125

*1 (Operating profit − Corporate tax, etc.) ÷ Average invested capital during the period x 100

Ordinary proﬁt to net sales

2,393

2,000

255

4.0

0

2,323

126

139

148

4.8

0

（FY）

2,803

308
276

100

0
2019

311

8.0

7.3

3.4

2018

（1,000 ton-CO2）

400

2,576

11,8688.2

6.3■■ Indirect emissions (Scope 2)

95,87590,037

81,07381,0130.500

78,229

0

（FY）

0.558

0

0

2019

2020

0
2018

2019

2020

2021

2022

（FY）

2018

0.274
2021

2022

（FY）

*4 F
 requency rate = (Number of employees subject to accident with lost time) ÷ (total working
hours) × 1,000,000	This value indicates the generation frequency of accident victims (Group company employees) per 1 million hours.

Equity / Equity ratio

R&D expenses / R&D expenses to net sales

Number of employees / Female manager ratio*5■■ Equity■■ R&D expenses■■ Number of male employees

Equity ratio（million yen）（％）

20,00066.8

71.4

15,000129,371 127,635

71.8

72.2

72.2

140,474 144,479 146,067

10,00080.0

40.0

Female manager ratio（million yen）

（％）

8,000

3.7
3.4

60.0

R&D expenses to net sales

6,000

5,569

3.4
5,322

5,384

4.0
3.5
5,650

3.3
5,691

3.0

（persons）

2,500

2.0
1,000

5,000

0
2018

2019

2020

2021

2022

20.0

2,000

0

0

（FY）

1.0

0
2018

2019

2020

2021

2022

（FY）

500

4.9

4.0
1,684

1,500

4,000

4.6

2,000

302

1,672
3.0

307

Female director ratio■■ Number of female employees

1,700

1,705

1,677

326

338

344

2.0

（％）

（％）

5.0

25.0

4.0

20.0

3.0

15.0

2.0

10.0

1,382

1,365

1,372

1,367

1,333

1.0

5.0

0

0

2018

2019

2020

2021

2022

（FY）

0

10.0

10.0

2018

2019

22.2

22.2

2021

2022

10.0

2020

（FY）

*5 S
 cope of data collection: Sanyo Chemical Industries, Ltd. (including loaned employees from
Sanyo Chemical Industries, Ltd.)

7

Sanyo Chemical Group Integrated Report 2023

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Profile

StrategyFoundation

Sanyo Chemical Group Value Creation Process
Six material issues
External
environment

VisionMaterial issues on
business domain

Grow into a global, unique, and highly profitable company

Society we wantto achieve

where every employee feels pride and satisfaction from his/her work

Conceptual diagram of “WakuWaku Management”
CN 

QOL 
Improve QOL by performance through chemistry

WakuWaku Management

Interface Innovator

Outcome

DEI● Job Satisfaction● Free Atmosphere● Bright, Pleasantand Positive

Interface Control Technology● Creation of New Business Model● Link People to People● Creation of Innovation● Providing Solutions● Beyond the Boundaries ofChemistry●“●

One Team

Passion● Comfortable
Workplace● Pride and DNA● Flexible Work
Styles●Material issues on
management domain

New Medium-Term Management Plan (FY2023–FY2025)
Basic Policies

Develop human resources
and improve work environment by recognizing diversity

Operating profit composition ratio

Reformation of
Existing BusinessConduct the risk management thoroughly by strengthening the Guardian function

9

Financial capital

Human capital

Shareholders’ equity: 132.3 billion yen
Liabilities: 53.1 billion yen

Number of employees: 2,089

Manufactured capital(production site)

Client companies
Business partners
Subcontractors
Universities / Research institutes

Sanyo Chemical Group Integrated Report 2023

47％
Domestic

Overseas
Domestic

61％

53％

39％

WakuWaku Management

47％

10.0％

FY2021: 11.8 billion yen

FY2025 Quantitative
Targets
Operating profit:

15 billion yen
Operating profit ratio:

7.5％

Basic products

Basic products

×Overseas53％64％

Initiatives to
Support Growth

ROIC:

ROIC:

FY2025: 15.0 billion yen

7.0％

Social and relationship capital

Natural capitalRaw materials: 561,000 tons
Energy consumption: 123,000 kL
Water consumption: 4.33 million m2

OutputProcurement

Production

Logistics

A society where
everyone can shinewith their personality

Petroleum andAutomotives

Approx. 3,000 types
Plastics andTextilesInformation andElectrics/
Electronics

Environmental
Protection, Construction and Others

Strength (surfactant technology)
GovernanceValue to shareholders
Payout ratio: 66%
ROE: 3.9%

Marketing

Reportable segments by market
Toiletries and
Health Care

A society where
people can live
healthily and safely

Value creation (FY2022)

Value chain
Order

An environment-friendly
circular-oriented society

Sustainable Management

Business model

Input (FY2022)

R&D expenses: 5.6 billion yen
R&D personnel: 419
Number of patent applications: 292

Solutions toSocial Issues

New Growth PathTM 
Implement challenge-oriented and transparent management

Intellectual capital

GlobalDeployment

Toward the Future Beyond 2025

RM 

50 billion yen

High-value-added
products

High-value-added
products

Business Strategy
Growth fromCore Business

Operating profit:

Transformation of Business Portfolio

36％

HC 

Amount of investment in plant andequipment: 12 billion yen
Production sites: Japan 5 /China 2 / South Korea 2 /Thailand 1 / Malaysia 1 / U.S. 1

WakuWaku” of Everyone● “WakuWaku Company”● “WakuWaku” Inﬂuence● Support the Environment● Support Diversity● Support People and Their
Lives

●

Establish a better society
through our corporate activities

In 
Create innovations bysupporting value creationof industry, culture, andeducation

FY2030 Quantitative
Targets

Company mission

Achieve carbon neutrality as
Interface Innovatorof performance chemicals

Value to society
Contribution to carbon neutrality
Improvement of QOL
Creation of industrial, cultural, and educationalinnovation

Value to the company
Operating profit: 8.4 billion yen
Cash flows from operating activities: 10.8 billion yen
Improvement of employee job satisfaction andengagement

Sanyo Chemical Group Integrated Report 2023

10

Profile

StrategyFoundation

Sanyo Chemical Group Material Issues
We have identified six material issues based on our company mission “Establish a better society through our corporate
activities.” We address these issues while realizing “Inspire WakuWaku feeling from all the stakeholders,” “Co-create environmental, social and economic value with the stakeholders,” and “Facilitate every employee’s value creation.”

Material issues on the business domain

Environment E

CN

Approach to materiality identification

Support the environment by creating an environment-friendly circular-oriented society

The Sanyo Chemical Group defines material issues as “important issues that have a significant impact on the medium- tolong-term value creation of the Sanyo Chemical Group.” We believe that it is necessary to identify material issues in order
to continue to create value with the intention of satisfying all stakeholders defined by the Group. To create value for all

Carbon Neutrality

stakeholders, we have identified material issues by following the process 1 to 4 below, considering that identifying andprioritizing medium- to long-term themes is the shortest route to value creation.

Achieve carbon neutrality as Interface Innovator

Materiality identification steps
Life L

QOL

Support people and their lives by creating a society where people can live healthily and safely

1

Identification of issues

2

Prioritization of the issues and creation of the materiality matrix

3

Identification of material issues

4

Validation of the material issues and board approval

Quality of Life

Improve QOL by performance through chemistry

Material issues on the management domain

Society S

InSupport diversity by creating a society where everyone can shine by their personality

HC

Innovation

Create innovations by supporting value
creation of industry, culture and education

Governance G

RM

Conduct the risk management thoroughly
by strengthening the Guardian function

11

Develop human resources and improve
work environment by recognizing diversity

Sanyo Chemical Group Integrated Report 2023

TM

The identified issues have been prioritized through dialogue with major shareholders and employees
about their impacts on our corporate identity and finance, opportunities to create innovation, and the
Sanyo Chemical Group’s uniqueness. The issues were then plotted on a matrix with management andbusiness perspectives placed on the horizontal axis and expectations and contributions to resolvingsocial and environmental issues placed on the vertical axis.

Human Capital

Retain social trust with transparent management

Risk Management

Issues have been selected with reference to various guidelines, such as the SASB Standards for thechemical industry, the GRI Guidelines, the Sustainable Development Goals (SDGs), and the World Economic Forum (WEF) core metrics, as well as communication with stakeholders and a questionnaire on
our company mission for all employees and officers.

With a focus on the upper right area of the materiality matrix, six material issues have been identified,with issues related to the Environment field and the Life field as material issues on the business domain
and issues related to the Society field and the Governance field as material issues on the management
domain. (The Life field has been separated from the conventional ESG portfolio and categorized as asymbol of expectations and contributions to the improvement of QOL.)

Transparent Management

Implement challenge-oriented andtransparent management

The material issues have been validated through deliberations at the Sustainable Management Committee, which is chaired by the President and CEO, and have been approved by the Board of Directors. The
issues will be reviewed according to changes in the business environment that may occur in the future.

Sanyo Chemical Group Integrated Report 2023

12

Profile

StrategyFoundation

Message from the President
New Medium-Term Management Plan 2025
At the core of the Group’s strategy are sustainable management and material issues. We aim to achieve long-term growthby engaging in sustainable management, with businesses in the following two fields placed at the center of the strategy:
the Environment field aimed at achieving carbon neutrality, and the Life field aimed at improving QOL. Our Vision 2030
also envisions a future image in line with sustainable management, and the recently announced New Medium-Term Management Plan 2025 is positioned as the first step toward achieving our vision.
Although we have so far been able to gradually align the vectors of the entire company, we need to speed up further
to move ourselves forward.

Overview of the New Medium-Term Management Plan 2025
The New Medium-Term Management Plan 2025 consists of two pillars: “Business Strategy” to be implemented now,

Akinori Higuchi

and “Toward the Future Beyond 2025.” Moreover, “Business Strategy” consists of three components: “Growth from Core

Representative Director,
President and CEO

Existing Business,” we aim to increase efficiency throughout the supply chain to improve profitability through Monozukuri

Business,” “Reformation of Existing Business,” and “Global Deployment.” As one of the initiatives for the “Reformation ofTransformation (Manufacturing Innovation). We believe this is the activity that will contribute to the highest profit increaseover the next three years (see the figures below).
Operating profit change chart

Fiscal year 2022 (ended March 31, 2023) was my second year as president. While on the one hand I felt one year was very

（billion yen）

2.5

short, I think I could have done more. In May 2022, we formulated the management policy “WakuWaku Explosion 2030,” and3.0

as part of that, I interviewed many employees and other stakeholders. Toward the achievement of the New Medium-Term
Management Plan 2025, I would like to continue to communicate with them this year as well while further deepening discussions throughout the company.

Reformation of Existing Business

1.0

15.0
▲ 3.4

3.5

11.8

8.4

Recovery fromthe external
environment

Recovery of domestic automobile production/ Demand growth from China’s post-COVID-19
situation

Transformationof the overall
supply chain

Price optimization linked to naphtha prices/ Improvement of efficiency and profitability
through Monozukuri Transformation

Structuralreforms

Polyurethane (PPG) and superabsorbent polymer (SAP) businesses undertake drastic reforms

Growth from Core Business

Fatal accident at the Nagoya Factory in January 2022

High-valueadded products

In January 2022, a fatal accident occurred on the premises of the Nagoya Factory. We sincerely pray for the repose of
the employee’s soul and extend our heartfelt sympathy to the family of the deceased. We would also like to deeply apologize for the aggravation and distress we have caused to all those concerned. In response to reports from the Accident
Response Committee,* which examined the accident, we have established the Safety Promotion Department. For details

Accelerate investment in five focus productgroups and expand overseas sales

Increase in fixed costs
FY
2021

FY
2022

Recovery from Transformation
the external of the overall
environment supply chain

Structuralreforms

High-valueIncrease inadded products fixed costs

FY
2025

ERP system update / Increase in depreciation and repair costs
associated with renovation investments / Rising labor costsof our initiatives, please refer to the “Occupational Safety and Health/Accident Prevention” section on pages 39 and
40 of this report. We are currently taking a variety of short-term and long-term measures. Although I often visit factories

Monozukuri Transformation (Manufacturing Innovation)

without prior notice, I feel that the Sanyo Chemical Group is now more conscious of safety. To prevent such an accident

Until now, the company has sometimes been unable to do what it should do as a manufacturer as a result of being caught

from happening again in the future, the management team and all employees will work together to implement recurrence

up in old customs. Accordingly, in the New Medium-Term Management Plan, we will work to increase efficiency through-prevention measures and to foster a culture of safety.

out the supply chain to improve profitability. Regarding factories, we will improve the work environment by reviewing and* The Accident Response Committee consists of a total of 13 members, including factory managers and the executive chairperson of the labor union, with the Executive Officer
in charge of production serving as the chairperson and the Responsible Care Division General Manager serving as the execution manager. As of August 2022, the cause of theaccident had been analyzed 15 times, and recommendations for permanent measures had been presented.

automating the manufacturing process to improve the non-defective product rate, thereby reducing the manufacturing
lead time and trimming the inventory, which are directly linked to cash generation.
Currently, Japan is facing a declining working population, and it is expected that the number of female and foreign
employees will increase in the future, in addition to the aging of the workforce. Making our factories safe workplaces
where anyone can work with ease will not only enable us to hire such people without difficulty, but will also have a positive

FY2022 performance increased in sales but decreased in profit

impact on the retention rate of new employees.

As for performance for FY2022, we fell short of our initial plan with net sales of 174.9 billion yen, operating profit of 8.4 bil-dent that this initiative will form the foundation for our highly profitable structure in the future.

We also plan to thoroughly overhaul old practices, from procurement to R&D, logistics, and marketing. We are confilion yen, and profit attributable to owners of parent of 5.6 billion yen. This is because we were greatly affected by various

13

environmental changes, such as China’s lockdown due to COVID-19, soaring energy costs, automobile production cut-

Structural reforms

backs, and sharp yen depreciation. Consequently, we were unable to avoid delays in the progress of our business strat-

As another initiative for “Reformation of Existing Business,” we have included structural reforms to boldly carry out re-egy based on the management policy “WakuWaku Explosion 2030,” and we revised our targets in the New Medium-Term

forms in the polyurethane (PPG) and superabsorbent polymers (SAP) businesses. Through these efforts, we will improve

Management Plan 2025.

the profitability of basic products and realize a highly profitable structure.

Sanyo Chemical Group Integrated Report 2023

Sanyo Chemical Group Integrated Report 2023

14

Profile

Message from the President

StrategyFoundation

Prioritization of investment in five high-value-added products categories
In terms of growth investment, we will prioritize capital investment in five product groups with high profitability, and theninvest in the globalization of these five high-value-added product categories and new businesses through M&A. We will
also actively invest in factory safety and automation.
The amount of strategic investment over three years will be five billion yen for the five high-value-added products

New Medium-Term Management Plan 2025

categories, 35 billion yen for investment in facility renewal, incorporated with process optimization and automation, and10 billion yen for M&A, totaling approximately 50 billion yen.
Funds are primarily raised through cash generation initiatives incorporated into the strategy. If we need a large amountof funds temporarily, such as for M&A, we may consider borrowing. However, we currently believe that cash generated
and internal reserves will be the main sources of funding.

Accelerate Transformation
to Realize Our Vision

Capital policy
In March 2022, the Sanyo Chemical Group announced “WakuWaku Explosion 2030,”
In the New Medium-Term Management Plan 2025, we have set targets with the cost of capital in mind. In the long term,
we aim to achieve an ROE of 8% or higher and an ROIC of 10% or higher, and we believe that PBR will also approach 1.0
due to our awareness of the spread between ROE/ROIC and the cost of capital.
We are also proceeding with the sale of cross-shareholdings, and in FY2022 we sold a substantial amount of shareholdings. We will not rule out share buybacks, considering them as an option, and will consider flexibly implementing
share buybacks within the scope of the cash generated.

which envisions our vision for 2030 based on our company mission, “Establish a better
society through our corporate activities.”
One year later, in May 2023, we launched the three-year New Medium-Term Management
Plan 2025 as the first phase toward achieving our Vision 2030. The Group is now united inits efforts to “Accelerate Transformation to Realize Our Vision.”

Dividend policy
We consider returning profits to shareholders to be one of the important management issues. We aim to improve ourdividend payout in the medium to long term, targeting a consolidated payout ratio of 30% or higher, while comprehensively considering the allocation of resources necessary for sustainable growth, including investing in employees and safe
facilities and reinforcing the corporate base for the future. The dividend payout ratio for FY2022 was 66%, and the annual
dividend per share was 170 yen.

Wa k u Wa k u E x p l o s i o n 2 0 3 0Transformation Toward the Vision

We publish the Integrated Report 2023 to allow our stakeholders to understand the medium- to long-term strategies that
the Group is aiming for, in particular, the New Medium-Term Management Plan 2025. We would appreciate it if you could

New Growth
PathContribution on resolving socialand environmental issues throughthe innovation beyond the boundaries of chemistry

Growth fromCore
Business

Growth through expansion andevolution of our core businessdomains

Reformationof Existing
Business

Acceleration of structural reformand business transformation withan environmental perspective

read it and provide feedback.

Support the Environment
Contribution to Carbon Neutrality

September 2023
Representative Director, President and CEO

Support People andTheir Lives
Improvement of QOL

Support Diversity
Improvement of Job Satisfaction

15

Sanyo Chemical Group Integrated Report 2023

Sanyo Chemical Group Integrated Report 2023

16

Profile

New Medium-Term Management Plan 2025

StrategyFoundation

Accelerate Transformation to Realize Our Vision

Business
Strategy

Basic Policies

1. Growth from Core BusinessBusiness Strategy
Positioning chemicals for special fibers, chemicals for special electronic parts, lubricant additives, permanent antistatic

1. Growth from Core Business

2. Reformation of Existing Business3. Global Deployment

We will position five focus product groups
that contribute to carbon neutrality (CN)and improvement of QOL (quality of life)
as “high-value-added products categories,” and accelerate research anddevelopment as well as capital investmentin these product categories in order togenerate earnings.

We will improve profitability by transforming the business process throughout the
supply chain and implementing structuralreforms in the polyurethane and superabsorbent polymer (SAP) businesses.

We will expand facilities in overseas
plants and strengthen the functions ofoverseas sales offices.

agents, and medical and pharmaceutical products, which contribute to carbon neutrality and the improvement of QOL, asfive focus product groups, we plan to make capital investment of nine billion yen from FY2021 to FY2025, which includes
the period of the Medium-Term Management Plan. We expect an incremental operating profit of 2.5 billion yen from thiscapital investment, and aim to achieve an operating profit of 7.9 billion yen by FY2025 from the five focus product groups.
We will also consider additional investments in order to further expand our business.
 esults and targets of sales / operatingR
profit / operating profit ratio for five focus
product groups

Toward the Future Beyond 2025
1. New Growth Path

2. Solutions to Social Issues

3. Initiatives to Support Growth

We will focus our resources on growing
areas where we can contribute to carbon
neutrality and improvement of QOL. We
will reinforce innovative actions including
opportunities for strategic alliances andM&A.

We aim to pursue significant reduction of
CO2 emissions through Carbon dioxide
Capture and Utilization (CCU).
We will proactively address human rights
issues in the supply chain.

We will promote human resources development and improvement of the work
environment.
We will manage with safety and quality as
our top priority and promote transparent
management.

16.7
32.4
5.4

Target Business Portfolio

Reflecting the external environment and the progress of internaltransformation, we have revised the target of “20 billion yen in
operating profit in FY2024” set forth in the management policy.

In order to transform our business portfolio, we will increase theproportion of high-value-added products that contribute to CN and
the improvement of QOL, as well as the overseas net sales ratio.

15 billion yen
ROIC

7.0％

200

190

180

12

10

2023

Overseas
Domestic

2024（plan）（plan）

2025（plan）

61％（FY）■ Operating proﬁt (billion yen)

Operating proﬁt ratio (%)

47％

36％

7.0

5.7

4.8

■ Sales (billion yen)

39％

（plan）

7.9

2025（plan）（FY）

2021

Product groups

CN

Chemicals for
special fibers

CN

Chemicals for
special electronic parts

CN

Lubricantadditives

QOL

Permanent
antistatic agents

QOL

Medical andpharmaceutical products

2022

2023

2024

2025

(FY)

Installation in
Kashima (2024/0.7)

9.0 billion yen

Expansion in China (2021/0.3), Installation in Korea (2021/2.4)
Planned expansion in Kashima and Kyoto (2025/0.8)
Incremental
operating profit
during the period of
the New Medium-Term
Management Plan

Installation in Thailand (2022/3.4)■ Operating proﬁt (billion yen)

Operating proﬁt ratio (%)(Note) R esearch and development expenses (approx. two billion yen peryear) related to new businesses are recorded as company-wide
expenses and are not included in the above operating profit.

FY2021 to 2025
Amount of
total investment

Expansion in Nagoya(2023/0.4, 2025/0.5)

Expansion in Nagoya (2024/0.1),
Expansion in Kyoto (2024/0.3)

2.5 billion yen(Note) (Start year / Investment amount [billion yen])Domestic

53％

Overseas47％

Chemicals for special fibers

CN

These products contribute to carbon neutrality. Our
chemicals for special fibers are mainly used for carbon

53％
Basic products

64％
Basic products

ROIC (%)

2024

Classification

High-value-added
products

High-value-added
products

7.5

6.3

5.6

■ Sales (billion yen)

Operating profit composition ratio

15

2023

（results） （plan）

FY2025 Quantitative Targets

7.3

6.6

19.2

40.9

39.1

37.4

2022

Operating profit

18.8

17.6

Accelerate capital investment in high-value-added products
・Secure profits by accelerating capital investment in the five focus product groups thatcan contribute to CN and QOL improvement.
・Consider additional investments aiming for further growth acceleration.

FY2021

FY2025fibers. Blades of windmills, which are one of the mainuses of carbon fibers (windmills, automobiles, aircraft,and pressure vessels), are seeing a rapid increase indemand due to the spread of renewable energy. Demand for carbon fibers is expected to expand as wind

Cash Flow and Investment Policy

power generation increases, and blades become larger.

We will improve our ability to generate cash based on our business strategy, and generate approximately 70 billion yen in operating cash
flow over the next three years. Of this amount, we plan to allocate approximately 50 billion yen to growth investment and approximately 20
billion yen to shareholder returns and the repayment of interest-bearing debts.

Targets for 2023–2025
OperatingCF

Operating CF
Approx. JPY 70 billion

Approx.
JPY
50 billion

InvestingCF

EBT: 37 billion
Profit increase from high-value-added products and basic products(Continuing intensive expenditures in R&D:
17 billion)
Depreciation: 34 billion
ERP system renewal and CAPEX

Financing
CF

Dividend

Debt

Working capital reduction: 5 billion
Cash generation by Monozukuri Transformation (Manufacturing Innovation)
Miscellaneous including taxes: -6 billion

Investing CF: Investment Plan of 50 Billion Yenover Three Years
Growth from Core Business (high-value-added
products): 5 billion
Production capacity increase in response to strong
demand and emerging markets
Reformation of Existing Business: 35 billion
Process optimization through Monozukuri Transformation and facility renovation/automation
New Growth Path (growing businesses): 10 billion
Strategic investment in M&A and commercialization of new businesses focusing on CN and
improvement of QOL

In addition, the development of applications in new fields
is progressing. In order to respond to growing demandfor carbon fibers, we have decided to increase the pro- lobal market forecast for carbon fiber reinforced plastics
Gby application（t）

250,000duction capacity for sizing agents for carbon fibers. In

200,000

addition to the existing facilities at the Nagoya and Kyoto

150,000

Factories, we plan to establish a new production facility

100,000

at the Kashima Factory. The facility is scheduled to start

50,000operation in May 2024, increasing production capacity0

by approximately 50%. We will seek to secure a stable2018（results）

2025（forecast）

2030（forecast）（year）

supply of sizing agents for carbon fibers in order to re-■ Automobiles ■ Aircraft ■ Pressure vessels / Hydrogen tanks ■ Windmills ■ Other

spond to the growing global demand. We would also like(Source) Created based on “Global carbon fiber reinforced plastics (CFRP/CFRTP) materials andtechnology report: Market size, applications, share, trends 2020” by FUJI KEIZAI CO., LTD.

to play a major role not only in the utilization of renewableenergy and the development of its industry, but also infurther capacity expansion in order to meet the growing

addressing climate change. We will continue to consider

demand for carbon fibers.

Reduction of cross-holding: -Several billion

17

Sanyo Chemical Group Integrated Report 2023

Sanyo Chemical Group Integrated Report 2023

18

Profile

New Medium-Term Management Plan 2025

StrategyFoundation

Accelerate Transformation to Realize Our Vision

Chemicals for special electronic parts（Estimated by Sangyo-Joho Limited）

6,000

3,000

5,348

QOL

These products contribute to carbon neutrality. Our

These products contribute to the improvement of QOL.

chemicals for special electronic parts include electro-

Permanent antistatic agents are used in a wide range

lytes for aluminum electrolytic capacitors, which areof applications to prevent various problems caused bymainly used in electronic circuits. Electrolytes for alumi-

static electricity (destruction of electronic circuits, mal-num electrolytic capacitors are used in a wide range offunction of electrical appliances, adhesion of dust) andapplications, from general electronic devices to import-

accidents (fires, explosions). In recent years, in addition

ant electronic parts that support social infrastructure. Our

to an increase in demand centered on semiconductor

electrolytes for aluminum electrolytic capacitors exhibit

carrier trays and the packaging of electronic devices andhigh electrical conductivity over a wide temperature

precision parts, explosion-proof and other applications

range and are excellent in long-term stability at high tem-are expanding. In order to meet future demand expan-

peratures. As industry-standard long-run products, they

Forecast for global production of capacitors（billion yen）

Permanent antistatic agentsCNsion, we have launched a new production site at the

Semiconductor market forecast by productare used in capacitors that require higher reliability, such（million USD）

Rayong factory of Sanyo Kasei (Thailand) Ltd., which has

as automobile control units. Currently in the automobile

600,000

been in operation since July 2022. Since permanent antistatic agents are our unique, high-functionality products,

industry, an increasing number of automobile electricalparts, such as driving support system circuits, are used

3,197

due to the electrification of vehicles such as electric vehi-

we will strive to open up new markets while taking into

300,000

account the possibility of further expanding the produc-cles (EVs). In order to ensure a stable supply that meets0

this growing demand, we have decided to increase our
2021

2022

2023

2024

2025

2026

2027

production capacity. The current production capacity will

■ Aluminum electrolytic ■ Tantalum ■ Ceramic ■ Film ■ Other

be increased by 60% by March 2025.

2017

2018

2019

2020

2021

2022

2023

2024 （year）

promote the development of new materials.

（forecast）（forecast）■ Total Discrete ■ Optoelectronics ■ Sensors & Actuators ■ Total ICs(Source) Created based on “2022 Capacitor Market” by Sangyo-Joho Limited.

(Source) Created based on “WSTS Semiconductor Market Forecast Spring 2023” by WSTS (World Semiconductor Trade Statistics) Japan Council

Lubricant additives

Medical and pharmaceutical products

CN

QOL

These products contribute to carbon

These products contribute to the improvement of QOL

neutrality. In the automobile industry, inand mainly include polyethylene glycol for pharmaceuti-order to reduce CO2 emissions, there iscals and non-absorbable topical hemostatic materials fora growing need for fuel-efficient gasoline

the central circulatory system.

vehicles, along with the trend toward elec-

Polyethylene glycol for pharmaceuticals is used as atrification. Since our lubricant additives arepharmaceutical additive in a base material for ointment

highly effective in improving fuel efficiency,

and tablet coating agents, and is used as an active

they are used in the engine oils of gasoline
vehicles, hybrid vehicles (HVs), and plug- orecast for sales of gasoline vehicles, hybrid vehicles,Fand plug-in hybrid vehicles

pharmaceutical ingredient for colon cleaning agent. It isalso used in various applications such as tissue regen-in hybrid vehicles (PHVs). It is assumed

eration and cell culture. To meet demand expansion duethat their replacement demand at the timeto increased sales, which is caused by the developmentof after-sales maintenance will increase. Toof generic drugs, we plan to expand the facilities at thetheir application was expanded to include the anasto-

meet the growing global demand for these

Nagoya Factory. These facilities are scheduled to startmosis of whole blood vessels except cerebral vessels. In

products, we have established a produc-

operation in May 2024, with the production capacity

July 2019, we obtained the CE marking for products fortion site in South Korea, following those

expected to increase by approximately 20%.

overseas shipping, and started their sales in the Europe-

blood vessel replacement. In March 2020, the scope ofin Japan and China, which has alreadyNon-absorbable topical hemostatic materials for thean market. Using this as a foothold, we are accelerating

started operation. We are also working

central circulatory system are surgical hemostatic agents

our overseas expansion, including entering the Hongon the development of lubricant additives

made of polyurethane materials that react with water toKong market in July 2021 and the Taiwanese market

optimized for EVs in order to contribute toform a flexible film. Since their launch in 2014, they havein December 2021. We will ensure its stable supply to

improving the fuel efficiency of all vehicles.

been used in many cardiovascular surgeries in Japan assatisfy growing demand by increasing our production

hemostatic materials used in the anastomosis of the tho-

capacity to approximately five times (scheduled to start

racic aorta and the branch of the aortic arch for artificial

operation in February 2024).

(Source) M inistry of Economy, Trade and Industry, “Technology Diffusion Scenario Presented by IEA (a case where an
average temperature rise of 2°C is achieved)” (2021) (in Japanese)
https://www.enecho.meti.go.jp/about/special/johoteikyo/gosei_nenryo.html

19tion facility depending on our future demand. We will also0

Sanyo Chemical Group Integrated Report 2023

Sanyo Chemical Group Integrated Report 2023

20

Profile

New Medium-Term Management Plan 2025

StrategyFoundation

Accelerate Transformation to Realize Our Vision

Business
Strategy

2. Reformation of Existing BusinessProfit improvement

Business
Strategy

Monozukuri Transformation(Manufacturing Innovation)

Structural reforms

3. Global Deployment

We aim to expand our business in overseas markets toearn 47% of our total operating profit in overseas markets

Approximately 40% of the products sold by the Sanyo

We will promote reforms centered on the polyurethane

by FY2025. To prepare a production system that meetsand superabsorbent polymer (SAP) businesses.

demand, we invested in production facilities for lubricant

Chemical Group are related to the automobile indus-

We will work on the following measures to reduce work-

try. By country, we have a profit structure with a highing capital. We aim to improve our operating cash flow

percentage of sales to China. In FY2022, production

by five billion yen by increasing our ability to generate

duction capacity through strategic alliances with other2021, and invested in production facilities for permanent

adjustments by automobile manufacturers continued

cash.

In the polyurethane business, we will streamline pro-additives (13,000 tons) in South Korea and China inpartners, increase production efficiency through processantistatic agents (1,500 tons) in Thailand in 2022. We

due to the shortage of semiconductors and difficulty inimprovement and grade integration based on Monozuku-

plan to invest in production facilities for high-perfor-

parts procurement, leading to a prolonged slump in ourri Transformation, optimize production locations throughmance surfactants (1,800 tons) in Thailand in FY2024.

collaboration with GC Polyols Company Limited, and shift

We will also boost sales to non-Japanese companies byto high-value-added products. In May 2023, we estab-promoting local staff to senior management positions,lished Japan Polyol Limited Liability Partnership (LLP)

and strengthen local technical service functions throughas a 50-50 joint venture with Mitsui Chemicals, Inc. with

R&D staff involvement. Moreover, we will expand oursales to the automobile industry. In addition, amid vari-① Visualize and improve data throughout the
supply chain by the ERP renewal and promo-

ous changes in the global environment, such as China’s
lockdown due to COVID-19, rising prices due to the sit-tion of DX

uation in Ukraine, and sharp yen depreciation, our sales② Establish new processes that enable smoothof products related to the automobile industry as well as

connection from order receipt to production

the aim of resolving common issues such as improving

sales channels by launching product websites, activelyof paper diapers and construction paints in China fell.

planning

the profitability of polypropylene glycol (PPG) in Japan

participating in overseas exhibitions, and using a pulland ensuring supply stability in the future. Through themarketing strategy in order to promote sales expansion

mental process reform by dispatching dozens

establishment of the LLP, both companies will work to

overseas.

of R&D staff to production sites

ensure both continuous stable supply and profit in theThus, we were greatly affected by this situation. Demand
for these products is expected to recover from FY2023③ Establish a new organization to conduct funda-

onward due to the recovery of the automobile industry
and the re-opening of the Chinese market. We believe④ Promote active investment in facility renewal,

that improving our production and sales systems will

incorporating process optimization and auto-

greatly contribute to improving profitability.
As a reform of the overall supply chain, we will promote the optimization of product prices in response tomation⑤ Implement total cost analysis and overhaul ofthe market conditions of raw materials such as naphtha

operations

PPG business.
initiatives:- making drastic cost improvements, including the con-ny-wide project “Monozukuri Transformation (Manufactur-

Transformation,

ing Innovation)” aimed at increasing efficiency through-- implementing a sales strategy focused on China andout the supply chain to improve profitability. ThroughSouth Asia with high market growth potential, where wethese initiatives, we anticipate an incremental operating

can leverage the strengths of our production sites,

profit of three billion yen over the next three years.

- exploring high-value-added products for applications
other than hygienic applications such as disposable- forming strategic alliances with other partners.

Realize a cash flow improvement of five billion yen through reduction of working capital.

Order

Procurement

Production

Logistics

Marketing

Systemintroduction

Raw materials
cost cutting

Process
innovation

Inventory
reduction

Sales
promotion● Quality stabilization● Inventory optimization● Application development● Reduction of● Automated inventory● Salesforce utilization

a global scale● Purchase from multiple

sources / Bulk purchaseprocess time

management

50

47

39

8.9
10

25
8.3
5.5

5.3
0
2021
■ Domestic OP

4.4
2022

■ Overseas incremental OP

3.5
4.4
2025

0
（FY）

■ Overseas OP

OP ratio (overseas) (%)(Note) R esearch and development expenses (approx. two billion yen per year)
related to new businesses are recorded as company-wide expenses, and are
not included in the above operating profit (OP).

Transforming business processes throughout the supply chain utilizing DX● Procurement on

44

diapers and sanitary napkins, andOverall picture of Monozukuri Transformation (Manufacturing Innovation)

（％）

20

solidation and/or elimination of surplus facilities,
provement and grade integration based on Monozukuri● DX promotion（billion yen）

- increasing production efficiency through process im-

and various cost increases, and will start the compa-● Early order receipt

Promote overseas sales

In the SAP business, we will work on the following● Optimization of

raw material specs

21

Sanyo Chemical Group Integrated Report 2023

Sanyo Chemical Group Integrated Report 2023

22

Profile

New Medium-Term Management Plan 2025

StrategyFoundation

Accelerate Transformation to Realize Our Vision

Toward the Future
Beyond 2025

New Growth Path

Energy (Organic cathode active materials)

CN

The Sanyo Chemical Group has set “Achieve carbon neutrality as Interface Innovator” and “Improve QOL by performance

As expectations for next-generation devices, such as

through chemistry” as material issues on business domain. During the period of the New Medium-Term Management Plan

drones and HAPS (High Altitude Platform Station), a

2025, we will focus on developing new businesses and products that contribute to carbon neutrality and improvement ofstratospheric communication platform, are increasing, it

QOL, with the aim of creating next-generation businesses that will open up a new growth path toward 2030. We will aim forhas become necessary to develop light, safe next-gen-the commercialization of new businesses and products at an early stage by continuing to inject resources and reinforcing

eration batteries with high weight energy density ininnovative actions, including opportunities for strategic alliances and M&A.

order to dramatically improve the performance of thesedevices. Also, from the perspective of sustainability,
high-performance batteries are indispensable for promoting electrification and storing renewable energy,
which are measures to achieve carbon neutrality. Current

Carbon recycling (CCU*)

CN

Image of an organic cathode secondary battery

We have accumulated know-how in the design andlithium-ion batteries are said to be close to the upper
limit of their performance, and we are promoting material
development with a focus on organic cathode secondaryMarket potential for CO2 separation and capture

manufacture of ionic liquids over many years through ourbatteries as a type of next-generation battery.

main business of electrolytes for aluminum electrolytic

Organic cathode secondary batteries are character-capacitors. Currently, we are considering how to apply

ized by the replacement of current inorganic materials

our ionic liquid technology to the systems that can effi-containing rare metals, used as cathode active materials,

ciently capture and utilize CO2 (CCU). CCU is expectedwith organic materials, and are expected to significantly

to play a key role in sustaining the use of fossil fuels

improve weight energy density. They also help avoid theand the current industrial processes while controllingshortages and soaring prices of rare metal resources(Source) SoftBank Corp. (in Japanese)greenhouse gas emissions, which contribute to climate

and risks to their stable supply.

change. It is also expected to achieve negative emis-

We will develop and manufacture the key organic

sions of CO2 when combined with renewable energy.

materials, aiming to achieve early results in cooperation

We aim to apply our ionic liquid technology to theseparation of CO2 from the air, which is attracting attention as a negative emission technology, as well as fromwith partner companies.
(Source) M inistry of Economy, Trade and Industry “What is CCUS Technology?” (in Japanese)
https://www.meti.go.jp/policy/energy_environment/global_warming/roadmap/innovation/ccus.html

flue gas through consortium activities involving engineer-

Agriculture (Peptide materials)

ing partners, municipalities, and other chemical manu-CNfacturers, without being bound by the existing businessframework.

In modern agriculture, food crises due to labor shortages* Carbon dioxide Capture and Utilization

and abnormal weather, as well as the environmental impact caused by pesticides and chemical fertilizers, havebecome major social issues. Peptide agriculture, which

CCU process

we aim to put into practical use in FY2023, is a technology that maximizes the innate functions of plants by giving
peptides, which are biostimulants,* to vegetables andfruit trees. Peptides are expected to improve in quality
and yield through the mitigation of their damage due todisease and climate change, and to help reduce the useof pesticides and chemical fertilizers.
By making full use of our fundamental technologies,
such as interface control technology, we can produce
peptides extracted from natural products, including
Generation of CO2

23

Sanyo Chemical Group Integrated Report 2023

Separation and capture of CO2

Effective use as fuel, etc.

* This is a new technology that reduces plant damage caused by climate and soil conditions by controlling abiotic stresses (high and low temperatures, physical damage,etc.) to plants in order to provide healthy plants. Its global market size is expected tobe three billion dollars, with an average annual growth rate of more than 12%.

unused resources, and fermentation-produced peptides derived from natural products. This will provide theods suitable for each crop and techniques for preserving

world’s first agricultural solution using multiple functional

product freshness, with the aim of building a businesspeptides. As a pioneering attempt, we plan to sell pep-model that contributes to the production of high-val-tide fertilizers and then provide peptide spraying meth-ue-added vegetables and fruits.

Sanyo Chemical Group Integrated Report 2023

24

Profile

New Medium-Term Management Plan 2025

StrategyFoundation

Accelerate Transformation to Realize Our Vision

Diagnostic and regenerative medical care (Extracellular vesicles: EVs)

QOL

Wound healing material and meniscus repair (Silk-elastin)

QOL

In recent years, body fluid components, called “exo-As Japan’s aging society progresses, an increasingsome-containing extracellular vesicles,” have been

number of people are suffering from diabetic skin ulcers,

attracting considerable attention in medical fields thatpressure ulcers, knee osteoarthritis, and other diseases.

are directly linked to improving QOL, such as diseaseIn particular, many patients whose natural healing pow-

discovery and regenerative medicine. It is expected thaters have declined due to aging are finding it increasingly

the research market alone will grow to over 100 billion

difficult to recover with conventional treatments. It isyen by 2030. Jointly with Tokushima University, we havesaid that there are 150,000 patients with refractory skindeveloped EXORPTION®, a method for collecting extra-

ulcers and eight million patients with knee osteoarthritis

cellular vesicles from various body fluids with high effi-

in Japan.

ciency, high yield, and a high degree of purification, by

We use the functional protein “silk-elastin,” which isapplying the body fluid component collection technology

under development at the company, for such patientsand know-how that we have cultivated in the in vitro diag-to enhance their natural healing powers, thereby trying

nostic reagent business.

to heal their wounds (tissue regeneration) that could not

By disseminating this technology, we aim to support

be healed by conventional treatments. Since 2016, we

new diagnostic and therapeutic research using extra-

have conducted clinical trials on skin defect regeneration

cellular vesicles, and to implement diagnostic agents toand meniscus repair to confirm the efficacy and safety ofwhich this technology is applied in clinical settings.

silk-elastin. We plan to implement it in society by 2024 asa regenerative medical device “wound healing material”
intended to regenerate refractory skin defects. We alsoplan to implement it in society by 2026 as a meniscus repair for patients with knee osteoarthritis. We aim to extend
healthy life expectancy through silk-elastin to contribute toimproving the QOL of the elderly.

In vitro diagnostic medical products (Accuraseed)

QOL

QOL

Immunoassay-based in vitro diagnostic reagents are

Reproduction of the five human senses is being actively

used for the purpose of diagnosing diseases, and theirstudied in order to cope with the recent IoT trends anddomestic market size reached approximately 250 billion

realize next-generation communication using the fiveyen in 2021. We have developed reagents dedicated tosenses. In particular, it is difficult to reproduce the ol-

Accuraseed®* that use our unique magnetic particles,

factory sense, and products and services that visualize

Magrapid. These are in vitro diagnostic reagents thatodors and aromas have yet to be fully and practicallyenable rapid immunoassay in just 10 minutes. Since

implemented in society. Digital olfactory technology,

these agents dedicated to Accuraseed® were launchedwhich digitally identifies and quantifies specific odors,

jointly with FUJIFILM Wako Pure Chemical Corporation inis expected to be applied in the medical field and theNovember 2015, their lineup has expanded to include 30

life-related fields including food and beverages, and its

inspection items, including thyroid diseases and infec-

market size is expected to reach $3.12 trillion by 2026.

tious diseases. This helps meet the need for rapid diag-

The Group provides 3,000 types of functional chem-

Toward the commercialization of electric noses,

nosis in clinical settings. In June 2022, Sanyo Chemical

icals. By using the technology and knowledge that we

we are working on initiatives that use electric noses to

Industries, Ltd. and FUJIFILM Corporation establishedhave acquired in this field, we have developed a highly

contribute to the improvement of QOL. For instance, we

FUJIFILM Sanyo Chemical Healthcare Corporation topractical electric nose that can be easily customized forconsider the visualization of sanitary environment con-consolidate the production systems for the reagentsvarious odors.

ditions to improve the environmental and enhance work

dedicated to Accuraseed® of both companies. We will

In addition to this feature, our electric nose is charac-

efficiency as well as the visualization of the aroma ofstrengthen our production base to achieve high pro-terized by the ability to quickly and continuously identify

foods and luxury items. We aim for the early commercial-ductivity and respond to the growing demand for in vitro

complex mixed odors, which is difficult for commercially

ization of electric noses to create new value through theavailable gas sensors.

visualization of odors.

diagnostic reagents.

25

Digital olfaction (Electric nose)

Sanyo Chemical Group Integrated Report 2023

* Accuraseed®: Fully automated chemiluminescent enzyme immunoassay systemmanufactured by FUJIFILM Wako Pure Chemical Corporation

Sanyo Chemical Group Integrated Report 2023

26

Profile

New Medium-Term Management Plan 2025

StrategyFoundation

Accelerate Transformation to Realize Our Vision

Message from the General Manager of the Personnel Division

Toward the Future
Beyond 2025

HR Development andWork Environment ImprovementHC

HR (Human Resources) Philosophy to
Achieve WakuWaku Management

In order to realize the vision of the Group set forth in the New Medium-term Management Plan 2025 and to promote chang-

Yoshiyuki Oku

HR Philosophy

Managing Executive Officer,
General Manager of Personnel Division

Our philosophy is to “respect diversity and collabora-

es toward the Vision, we believe it is important to create a company in which each and every employee can be excited(“WakuWaku”) based on the idea that “Every department is a profit center” (each and every diverse employee from allwalks of life plays a leading role).

Two pillars of the HR strategy:
HR Development, Work Environment
Improvementtion,” aimed at creating new values through the synergistic effects of individual connections based on mutual

We believe that HR Development and Work Environment

recognition of each other’s individuality.

Improvement are the two key elements for “One Team to

The Sanyo Chemical Group has created a number of systems to enable everyone to take on challenges on

HR Policy

their own initiative as part of its “people-oriented management.” In order to respond to changes in the times andBased on the HR Philosophy, we have established ourThus, we have included “develop human resources andto create an environment in which employees can work with job satisfaction and pride, we have deepened thisHR Policy “create an environment in which individual

improve work environment by recognizing diversity” in the“people-oriented management” and restructured our HR System for the first time in about 20 years, with “respectabilities can be maximized,” with the aim of becoming amaterial issues. The introduction of a fair, transparent, anddiversity and collaboration” as our HR Philosophy. Our goal is to build a better society by creating new values

company in which all employees can work in good healthbalanced evaluation system is also required. In addition

through the synergistic effects of individual connections based on mutual recognition of each other’s individuality.

and with peace of mind, while valuing their individuality.

to existing initiatives, we will implement systems and mea-

create new ideas and continue to take on challenges.”sures that take into account the diversification of values

HR Development Policy

HR System that promotes individual growthand enhances organizational strength
In the new HR System, we focused particularly ontion and pride of each and every employee.

The Group positions human resources as the driving

The system will measure how One Team actions

force that creates innovation toward the realization of

HR Development

contribute to the company with respect to each

our Vision. Aiming to spotlight everyone and to promote● Creating a system in which everyone can play an active roleorganization’s medium- and long-term goals.

changes in an exciting way (“WakuWaku”), we set our● Creating an environment in which leaders (successors)

HR Development Policy to “have everyone play an active

building an evaluation system, which is crucial to

Expectations and aspirations for employees

it more fair, transparent, and balanced, we have(successors) grow naturally.” At the same time, we will

evaluation system under which employees can work

promote efforts to reform work styles, diversify human

together to achieve organizational goals with One Team

conducted evaluator training for all managers to

What I expect from my employees going forward

resources, and create a work environment in which all

ensure that it does not become “pie in the sky.”

is for them to develop their career plans inde-human rights and diverse values are respected andWork Environment Improvement

Under the new evaluation system, managers will

pendently. I hope that each of you will be able toaccepted and in which all employees are encouraged to● Health management

not stop with day-to-day management and its

think about what kind of work you really want toperform active roles, thereby leading to the sustainable● DEI (Diversity, Equity & Inclusion)

evaluation, but will work to align the direction of

do and what kind of experience you want to havegrowth of the Group.

● Open work environment

employee and organizational growth through in-and be active in. And in these times of turmoil, I

depth one-on-one discussions with each of theirhope you will grow to be able to tackle challenges

subordinates, so that they can practice support-

for which there are no right answers. I believe

ive management.

the role of the Personnel Division is to provide

In terms of growth initiatives, we have launchedsupport for that. We will respect the desires ofa new leadership development training program

our employees and promote the development offor selected personnel in addition to the existing

an in-house environment in which diverse humanhands-on rotational training. Both practical work

resources can play an active role. We will also fo-

and training will contribute to the career develop-

cus on increasing engagement by eliminating thement of our employees. We are also considering

distance between management and employees.

the introduction of an organizational evaluation

Furthermore, the Personnel Division will continue

system with the aim of maximizing organizational

to change so that the company and its employees

performance and linking it to the job satisfac-

can build a relationship of mutual trust.

Management
PolicySanyo Chemical Group Integrated Report 2023

Co-creation of
Economical ValueHR Development
PolicyCo-creation ofEnvironmental& Social Value

Enhancement ofCorporate ValueOne TeamWork Environment
Improvement Policy

HR Philosophy

27

grow naturally● Establishing a fair, transparent, and well-balancedrole” and “develop an environment in which leaders

our efforts to develop human resources. In addition to reforming the evaluation system to makeand human resources and changes in the environment.

Everyone can play
an active role

Independence
Health management
DEI
Work style reform

Leaders grownaturally

Respect diversity and collaboration

Sanyo Chemical Group Integrated Report 2023

28

Profile

New Medium-Term Management Plan 2025

StrategyFoundation

Accelerate Transformation to Realize Our Vision

Respect for Human Rights

HR Development

RM

HC

The Sanyo Chemical Group has set its Vision 2030: “Grow into a global, unique, and highly profitable company where every

The Group has long been committed to “people-oriented management,” and has established systems that allow everyone

employee feels pride and satisfaction from his/her work.” We believe that the success of diverse human resources is possi-

to take on challenges on their own initiative, aiming to be a company in which each and every employee can grow together

ble only when there is a foundation for understanding the human rights of each individual and recognizing their individuality

with the company and feel job satisfaction and happiness. We position human resources as the driving force that createsand values. In addition, in order to advance our business activities in various regions of the world, we are required to ad-

innovation toward the realization of our Vision. Aiming to spotlight everyone and to promote changes in an exciting way

dress human rights issues, including labor-related rights for stakeholders involved in our business activities and throughout(“WakuWaku”), we set our HR Development Policy to “have everyone play an active role” and “develop an environment inour supply chain. To address human rights issues, we formulated the Sanyo Chemical Group Human Rights Policy in March

which leaders (successors) grow naturally.” Under this policy, we will strengthen our human resources base to support our2023.

sustainable growth.

Basic attitude of the Human Rights Policy

Initiatives to address human rights issues in the supply chain

As corporate activities become increasingly globalized,

Everyone can play an active role

Development of an environment in whichleaders (successors) grow naturally

In order for everyone to play an active role, it is importantcompanies are expected to take the initiative in elimi-

Based on the Sanyo Chemical Group Human Rights

for each individual to demonstrate his or her “strong indi-

We believe that the ideal environment is one in which

nating human rights violations from the perspective of

Policy, the Group identified three prominent issues: ①

viduality” (each playing a leading role) and to continue tocandidates for future management or key positions intake on challenges without being bound by conventional

major businesses and functions are growing naturally.

labor in the supply chain, ② employee safety and health,creating an inclusive society. The Group will conduct
management that respects the human rights of all people

and ③ human rights risks due to geopolitical situations

ways of doing things. An organization composed of

To achieve such an environment, we will first work on

and recognizes that its business activities may have aand conflict impacts. We will continue to work on these“strong individuality” can become a “strong organization

measures to develop leaders systematically. Then, we

negative impact on human rights. At the same time, we

human rights issues.

(One Team)” where everyone is taking action toward thewill develop an environment in which more and moregoal by drawing up a vision for their own organization

employees will see the careers of those who grow into

and incorporating it into their goals.

leaders and want to become leaders themselves, andwill work with our customers, business partners, suppliers, and government agencies to avoid such negative

Going forward, we will continue to fulfill our responsibility

impacts, thereby gaining recognition from investors, cus-

to respect human rights by implementing human rights

tomers, and society at large. We will also cooperate withdue diligence in procurement activities, working to elim-

diverse stakeholders to support the socially vulnerable.

inate and prevent harassment, and accepting Ukrainian

An environment in which all employees can play
an active role regardless of course (job group)

students, based on the Guiding Principles on Business● Unification of generalist and specialist positions into an

associate position

and Human Rights.

Basic Policy
We proactively address human rights issues in the
supply chain in accordance with the newly formulated
human rights policy.

Support for proactive challenge taking and independent learning● Improvement of existing systems to encourage taking

Priority measureson challenges, such as the “Internal multiple work sys-

● Implement human rights due diligence in procurementtem,” “Awards from General Managers to encourage

activities● Eliminate harassment thoroughlychallenges,” the “Challenge system,” “Commendations● Promote DEI, raise LGBTQ awareness, and create afrom the president,” “JET,” and “Training retreats” toworkplace where human rights are addressed● Accept Ukrainian students

realize their goal.

Systematic leader development● Selection of candidates for next leaders and identifica-tion of missing human resources requirements● Implementation of training for selected leadership

candidates, enabling them to see the company from amanager’s perspective and acquire the skills to formulate strategies● Implementation of rotations to fill missing human re-sources requirements● Implementation of career training to encourage young

employees to envision their career paths

make them more user-friendly for active utilization● Training programs to support career autonomy● Rotation based on the characteristics of each employ-ee based on aptitude tests for all employees (the right
person for the right job)

Human rights issues in the supply chain● Training programs such as the “Study abroad system,”

Upstream

29

Downstream

Procurement of raw materials

R&D, Production, Delivery

Use, Consumption,
Disposal, Recycling

Suppliers

Employees

Customers● Forced labor and child labor● Unfair work environment and work conditions● Human rights violations through marketing● Conflict minerals● Labor accidents and health hazards● Infringements of rights of indigenous people● Discrimination and harassment

and immigrants● Damage to communities due toenvironmental destruction● Human rights violations in suppliers● Invasion of privacy

Sanyo Chemical Group Integrated Report 2023

or advertising● Use of products made by parties that violate

human rights“Overseas training,” and “Language training” to develop human resources who can play an active role on
the global stage

System for organizational evaluation● Introduction of an organizational evaluation systemwith the aim of maximizing organizational performance(aiming for an achievement rate of 80% or more oforganizational goals by FY2025)

Sanyo Chemical Group Integrated Report 2023

30

Profile

New Medium-Term Management Plan 2025

StrategyFoundation

Accelerate Transformation to Realize Our Vision

Diversity, Equity & Inclusion (DEI)

Work Style ReformHC

HC

Aiming to be a company in which all employees can work comfortably with peace of mind while valuing their individuality,

In order to become “a company in which every employee feels pride and satisfaction in his/her work” and to further advancethe Sanyo Chemical Group promotes “DEI (Diversity, equity & inclusion)” to create a work environment in which all humanreforms, the Group is promoting work style reforms from the three perspectives: flexible work styles, business reforms, andrights and diverse values are respected and accepted, and in which all employees are encouraged to perform proactive

the use of IT/AI. By offering a variety of work styles, we intend to create a work environment in which each employee canroles. In the promotion of DEI, the perspective of equity is particularly important, as it leads to the valuing of individuality.

achieve results while feeling pride and job satisfaction.

We will contribute to the creation of a sustainable society by generating added value through a combination of diverse

Flexible work styles

needs and the ideas and technologies of each of our employees.

three days compared to FY2020③ Increasing the utilization rate of the super flextime,

Women’s participation and advancement

and participate in activities of external organizations as

Based on the concept of “work hard, rest well,” we will

well as within the company.

promote a true work-life balance through flexible work

We have formulated a voluntary action plan based on the
Act on the Promotion of Women’s Active Engagement inProfessional Life, with the goal of increasing the female

styles. In addition to weekly no overtime days, we have

Promotion of employment and activitiesof persons with disabilities

Open work environment

systems such as refreshment leave, memorial leave,hourly paid leave, and super flextime without core time.

In order to create a state in which employees feel satis-

We are supporting more flexible work styles by easing re-faction and pride in doing their jobs safely and securely,

to 6% or more by FY2030, leading to a steady increase inAs part of our corporate social responsibility and be-

strictions on the reasons for using super flextime and by

and are willing to make a high level of contribution to thethe number of women in management positions. In orderyond, we strive to create a workplace where all employ-revising the system so that it can be used by employees

company while voluntarily demonstrating their abilities, it

for more women to play leading roles in various organi-ees can work together with their colleagues regardless

who work shorter hours. In addition, although the reasonsis important to have a thorough dialogue with executives,

zations in the future, we need to further accelerate ourof their disabilities. In order to achieve this goal, we will

for taking paid leave under the unused paid leave re-the organization, and people in various capacities. We

efforts. As such, we have set a new target of a female

promote various initiatives and focus on building a sup-serve system had been limited to childcare and nursing

actively provide opportunities for communication to en-

manager ratio of 15% or more by FY2030. In addition,

port system for continued employment.

care, the system has been made usable regardless ofhance engagement, such as “Dojo,” a place for dialogue

the reason. We also have a telecommuting system for all

between executives and employees, and “Salon,” a place

employees and a flexible leave system that allows em-

for managers and higher ranking executives to hold dia-ployees to take personal leave once during their employ-logue beyond the boundaries of their departments.

leader ratio to 15% or more and the female manager ratio

since January 2022, the company has been a member of
the “IkuBoss Corporate Alliance” to change the mindset

Promotion of employment of global talentof both men and women by dispelling the stereotypicalrole-based division of labor, and to encourage male

Diverse human resources from various cultures are es-

ment for a maximum of two years, at their own discretion.

employees to take childcare leave. We will encouragesential for global business development. We are working

In FY2022, four employees used the flexible leave system

women to work longer and continue to grow by reforming

to create an environment in which employees whose

for the purpose of obtaining qualifications, etc.

the corporate culture and promoting their participation in

first language is not Japanese can play an active roleinternal and external training programs, thereby support-(explanation of internal systems, policies, and personnel

ployees can continue to be active while maintaining job

ing their success.

systems, translation of internal documents into English,

satisfaction through flexible work styles that allow them tosupport for visa procedures, etc.), and will actively pro-achieve a work-life balance.

Percentage of male employees taking childcare leave （%）
2018

48.2

2019

77.1

2020

66.7

2021

79.7

2022

98.2

Promotion of LGBTQ understanding

mote the employment of global talent in the future.
KPIs for DEI

to LGBTQ sexual minorities.
We are encouraging understanding and inner promotion of LGBTQ issues by establishing internal andexternal consultation services, revising internal rules andsystems, conducting training and study sessions for executives and employees, providing timely information via

We strive to create an environment in which our em-of digital technologies such as Robotic Process Auto-

Training retreats

In addition to promoting flexible work styles that are not

Percentage of male employees
taking childcare leave

100% by FY2025

Platinum Kurumin

Certification continued to
FY2025

to improve productivity. We create an environment that

“L-boshi (3 stars)”

Certification continued to
FY2023

to be creative in their work.

PRIDE Index Gold

Certification in FY2023

Work Style Reform Action Plan

Percentage of employees withdisabilities

2.7% or more by FY2026

In Phase I (FY2018 to FY2020), we worked to reduce

Number of foreign employees hired

2 or more hired each year

mation (RPA) and Business Intelligence (BI) systems
improves the quality of work and allows each individual

long working hours, promote the use of paid leave, andencourage flexible work styles. Based on the results of

the intranet, etc., and participating in Rainbow Pride. We

Phase I, the Work Style Reform Action Plan Phase II,

are also communicating to society in an effort to create

which covers the period from FY2021 to FY2023, has thean environment that respects diverse values. Led by You-following goals.

Tuber Kazue-chan, an LGBTQ person who has been a① Average total actual hours worked per year (day shift

in raising awareness about LGBTQ issues, we cooperate

Sanyo Chemical Group Integrated Report 2023

workers) of 1,800 hours or less
Platinum Kurumin“L-boshi (3 stars)”

PRIDE Index Gold

Dialogue with executives

restricted by time or location, we are promoting the use

Business reforms and the use of IT/AI

15% or more by FY2030

member of the Group since August 2020 and is engaged

Main measures

The “Dojo” is a system that allows executives and employees to have thorough dialogues. The executives act as
dojo owners and invite students (employees) to join a dialogue once a month for a period of six months to one year.
The theme (message to be conveyed to the employees) isleft entirely up to the dojo owner. Twelve dojos were open
in FY2022, with six to eight participants (students) in eachdojo. This system will continue in the future. In addition,
the “morning meeting for all employees,” in which executives give a lecture to all employees once a month, willcontinue to be held.

Female manager ratio

Since 2018, we have been working on initiatives related

31

telecommuting, and flexible leave systems② Increasing the number of days of paid leave taken byThis is a system in which each division or department
spend one or two days discussing organizational dreams
and issues, and the company subsidizes the costs of thereception and lodging.

Salon
Managers and higher ranking executives lead the salon
and talk with several employees.

Coffee meeting
This is a system to deepen mutual understanding throughdialogue with the head of the organization.

KPI for Work Style Reform
Engagement score*

51 or more by FY2025* Measured by a proprietary survey instrument using eight items that correlate wellwith the Utrecht Work Engagement Scale

Sanyo Chemical Group Integrated Report 2023

32

Profile

New Medium-Term Management Plan 2025

StrategyFoundation

Accelerate Transformation to Realize Our Vision

Health and Productivity Management

New HR System

HC

HC

The Sanyo Chemical Group aims to further enhance its corporate value by creating an exciting (“WakuWaku”) company in

Based on the Sanyo Chemical Group’s HR Philosophy to “respect diversity and collaboration,” the new HR System features

which each and every employee is highly motivated to take on new challenges. To achieve this, it is essential for each anda HR Policy to “create an environment in which individual abilities can be maximized.” Creating an environment in which

every employee to be healthy. We believe that working in good mental and physical health creates happiness for employees

individual abilities can be maximized and function effectively will cause employees to feel motivated and proud of their work.

and their families and leads to the development of the company.
Action goals for the five initiatives（FY）

Health Management Declaration
The physical and mental health of its employees is thecompany’s greatest asset.
The Sanyo Chemical Group will actively support healthpromotion initiatives to realize a mindful and fulfilling
corporate life, respect the diversity of its employees,
and enable each individual to achieve self-fulfillment by
exercising their independence and creativity, thereby
contributing to society through the development of thecompany.
Akinori Higuchi
Representative Director, President and CEO

Promotion system
Since FY2020, the “Health Promotion Council,” which
includes senior management, deliberates and decides
on policies and initiatives, while the “Health Promotion
Teams,” which include employees from each region, havebeen promoting awareness and penetration of healthmanagement among employees and implementing specific measures in their respective regions. The company,
the labor union, and the health insurance union work inunison to promote company-wide health initiatives.

Evaluation indicators
We are actively promoting health management, believing

Initiative

Item

2019

To have an
Exercise exercise routine atleast once a week
Sleep

Diet

Drinking

To be well rested
with sleep

29%

54%

To have abalanced diet*1—

To have two or
more alcohol-freedays per week74%

Not to smoke
Smoking (Smoking rate
reduction)

77%

2020

2021

31%

50%

57%

66%

—

76%

75%

75%

77%

82%

2020

2021

2022

Personal injury/
sickness absence rate

1.5%

1.5%

1.8%

1.9%

We are actively developing
health investment measures thatwill lead to improved productivity and job satisfaction, andultimately resolve management90%
or more90%
or more2025(Target value)

1.0%
or less

Presenteeism*

（FY）

2025

By evaluating how the organization is changing its action
as One Team and how much it contributes to the compa-

achieve results should be recognized and rewarded, we

ny, we will maximize our organizational performance andhave reformed our systems and launched the new HR

foster pride and job satisfaction in each employee.

System in April 2023.

Grade system that makes better use of capabilities

Initiative
Self-motivated behavior and positive
feelings toward work
(deviation value)

2021

2022

to full implementation, with the goal of introducing thewide range of fields, generalist and specialist positionsorganizational evaluation in FY2024. Each organization

were unified into an associate position.

will set organizational goals toward its vision and strive tobers of the organization are involved in the organizationalwith the aim of rewarding those who contribute to fur-goals. For FY2025, we are targeting an 80% achievement

ther business development by utilizing their expertise

rate for organizational goals.

in a specific area as a specialist.

Compensation system based on competence androle● As individual lifestyles and values diversify, customary

50.1

Introduction schedule
September
2023

Explanatory meeting on
the organizational evaluation system

October
2023

Setting organizational goals

February
2024

Organizational evaluation

March
2024

Evaluation feedback

March
2024

Setting organizational goals for FY2024

and non-standardized treatment that is not related to● By increasing the percentage of salary that varies

depending on the role and ability of the employee, andto one that allows employees to devote themselves totheir work with a medium-term growth perspective.

Fair, transparent, and balanced evaluation systemwere established, which would lead to the growth andmotivation improvement of employees and be easy tounderstand for both the evaluators and the evaluated.

49.7

achieve them by creating a situation in which all mem-for those in management positions to pursue expertise,qualifications, the salary system has been changed(Target value)

tion to familiarizing employees with the organizational
evaluation process, we will conduct a verification prior

30%
or less（FY）

company-wide in the second half of FY2023. In addi-

and to enable all employees to play an active role in aby clearly establishing a gap in salary based on job

2025

identified from the trial results, we will roll out the trial● To eliminate disparities in course (job group) attributes● Simple criteria for salary increase and promotion

Work engagement*4

In fiscal 2022, trials were conducted in multiple
departments. After organizing the issues and problems

Major changes(Target value)*3 A condition in which the employee is present at work but is not able to work
sufficiently due to mental or physical health problems.
Measured by the WHO Health and Labor Performance Questionnaire.

Introduction of an organizational evaluation system

Based on the idea that people and organizations thatthe quantity or quality of work has been reviewed.
3

36.6%

ness were defined, and targets for FY2025 were set.

90%
or more*2 A condition in which the employee cannot perform duties due to absence fromwork, leave of absence, or other reasons. Measured by the number of employees
on sick leave who are absent for more than one month.

37.5%

tives and evaluation indicators for verifying their effective-

83%

2019

Labor productivity
loss rate

investment measures for the five health promotion initia-

76%

Initiative

to be actively involved in the maintenance and promotion

and to implement the PDCA cycle of activities. Health

75%

80%
or more

（FY）

2022

demonstrate health management initiatives and results,

63%

Absenteeism*2

2021

Management Strategy Map was created to quantitatively

70%
50%
or more*1 Item added in 2021.

Initiative

individual management of each employee. The Health(Targetvalue)● An expert position was newly established as a coursethat it is an important management issue for the companyof employees’ health, rather than simply leaving it to the

2022

2025

Reform of the three core systems in HR
management (grading, compensation,and evaluation)51
or more*4 A state of mind that is positive and full of accomplishment, vitality, enthusiasm,
and immersion in one’s work. Measured by a proprietary survey instrument usingeight items that correlate well with the Utrecht Work Engagement Scale.

issues.

33

Sanyo Chemical Group Integrated Report 2023

Sanyo Chemical Group Integrated Report 2023

34

Profile

StrategyFoundation

Feature: Dialogue
Safety Improvement and Safety Culture at Production Sites
The first step toward a safety culture is to“raise the standard of the norm”

Sanyo Chemical has its own safety
Tose: In the case of Sanyo Chemical, it is neces-

Maeda: As a prerequisite for business operations, wesary to create a system suited to the production of its

believe that fatal accidents should never occur. We aresmall-quantity, high-mix, high-performance products.

strongly committed to addressing this as an issue prior to

In order to maintain the customer value and continue to

productivity and cost, and we have continued to discuss

generate profits, the sales section also needs to know

permanent measures.

what part of their demands on the factory are a burden

Tose: The first thing to do when discussing safety culture

and what kind of consideration is needed.

is to “raise the standard of the norm.” We live in a world

Maeda: Employees in sales, production administration,

where any loss of life in the course of business is unac-

and other sections close to customers must also under-

ceptable.

stand how our products are made.

It is not about avoiding fatal accidents as much as
possible, but about never allowing them to occur. What dochanges in the grades of products or the manufacturing

we need to achieve this? What should we change? Theseorder made at the request of customers, Sanyo Chemi-

questions are the first steps toward a safety culture.

cal’s competitiveness will be enhanced. To this end, theWe now know how to prevent most accidents to some

Representative Director,
Executive Vice President,
in charge of Safety and Production,
and General Manager of Production
Division

Kohei Maeda

Associate Professor,
Faculty of Engineering, Niigata University
Ph.D. (System Design and Management)

Akira Tose

Assumed his current position in 2019 after working as a
specially appointed assistant professor at Keio University
Graduate School and as a specially appointed associate
professor at Niigata University Graduate School. He has
conducted numerous joint and contract research projects
mainly with major chemical and materials manufacturers,
working to improve safety management and foster a safety
culture at business sites in Japan and overseas.

Tose: Exactly. If the factory can respond flexibly tosales and production sections should understand eachextent. However, since it is quite difficult to predict inother, and the sales section should make requests toadvance, we work backward from the types of situations

ensure that the production process is not overstrained.

in which accidents at the factory may occur, and consid-

Whether or not this collaboration can take place is theer what needs to be done. The first point is to think that it

key point.

“could happen in our company.”

Maeda: At the Nagoya Factory, many divisions use the

The next factor is the system. It is impossible tosame production equipment, which complicates pro-achieve the goal by asking on-site workers about dan-duction plans. Therefore, most general managers did

gerous areas and making changes in those locations.

not know how their products were planned and manu-

People with expertise in safety, equipment, physical phe-factured. Last year, however, President Higuchi sent a

nomena, chemical phenomena, and other fields needstrong message to the sales section to see how much of

to work together with on-site workers to get things done.

a burden they were placing on the factory. As a result,

It would be nice to have such functions in-house, but I

our mutual understanding has gradually deepened.

think it is difficult in some respects. Therefore, it is the job

Tose: When it comes to safety, moral hazards are likely toof the management to decide what to do internally andoccur. If an accident occurs immediately when the fac-

what to outsource.

tory is put under too much stress, it is usually clear who

Maeda: Going forward, the Safety Promotion Department

should bear responsibility. In reality, however, the accu-

will focus on the two pillars of emergency response andmulation of stress creates distortion that will only manifest

long-term response. We can start immediately with sem-years later as an accident. As a result, the person who

inars and courses for managers, but in the long term, wegave the excessive order is often evaluated as having

also need to work on training younger employees to be-achieved results, while the exhausted on-site workers arecome experts. Since we have just started, I expect it willleft to clean up the mess. How to avoid this is the key totake several years for the younger employees to develop.

governance. For example, to ensure that safety invest-

Tose: It will take at least 10 years. What is important

ment will not be changed according to changes in the di-during this period is whether or not you can ensure thatvision’s policy, the factory manager can be given greater

the safety culture takes root and grows in the same direc-

authority to allow a certain amount of safety investment

tion, no matter how many different safety leaders you

from the beginning.

may have in place.
In the wake of a fatal accident that occurred at the Nagoya Factory in January 2022, the Company has continued to con-

Maeda: How to instill a safety culture in each and every

duct thorough investigations into the cause and discuss countermeasures. Efforts are being undertaken under the new

employee is not really an issue on-site, but rather de-

structure with the aim of achieving fundamental and permanent reform.

pends on how seriously management is willing to show

As part of such efforts, the Integrated Report 2023 invited Dr. Akira Tose, Associate Professor of the Faculty of Engi-

35

Is it an investment in safety ora repayment of debt?

its commitment.

neering at Niigata University specializing in corporate safety culture, to the Nagoya Factory, where Kohei Maeda, General

Tose: We need to determine whether the money spent on

Manager of the Production Division, had an interview with him. (Titles omitted)

safety is just paying off past debts or is an actual invest-

Sanyo Chemical Group Integrated Report 2023

Sanyo Chemical Group Integrated Report 2023

36

Feature: Dialogue

StrategyFoundation

safe factory. Although we have been building various

mid-summer. We would like to automate factories thatan extremely broad range of fields, including machine

factories for the past 60 years, our philosophy regarding

make such chemical products.

design, chemicals, human behavior, and ergonomics,

factory safety may not have been very clear.

Tose: In the process of maintaining and upgrading

young people must be trained as safety managers. I

If a factory is no good, it cannot make products

factories, it is important to make specific improvements

believe that better countermeasures can be created byproperly, and the quality will vary. So the burden on theand standardizations, such as modifying sampling ports

having a team of people who have accumulated a wide

workers is very high, and such a factory is unsafe.

to make sampling safer and easier, and to accumulate

range of safety knowledge through their experience at

Tose: That’s the essence of it. If equipment or production

these improvements. Regarding safety technology, I thinkvarious factories, and people who know what is being

frequently shuts down or if there are many quality issues,

it will be easier to proceed if the Manufacturing Inno-

done on site.

more people will enter the factory on a non-routine basis.

vation Center and manufacturing sites work together to

Maeda: We are thinking about how we can eventuallyThat’s the most dangerous time.

build a set of “safety, stability, and quality.”

make sure that employees who have belonged to or

Maeda: Yes. Moreover, as a result, we spend a lot of

Maeda: Since the R&D department is under the Businessserved as Manager of the Safety Promotion Department

money on it.

Division, various improvement activities up to now havewill become company executives, and that in a visible

Tose: The key is whether or not a company’s systembeen conducted from the perspective of the Businessway.

incorporates efforts to improve the ease of making prod-

Division. But the newly established Manufacturing In-

Tose: I have seen reforms in various companies, anducts. Various factors can cause delays, and I believe that

novation Center belongs to the factory. Their mission is

the first stage is usually to assign a great person whom

ment in the future. Failure to address the deterioration

gathering and analyzing the causes to make improve-to eliminate defective products, stabilize process time,

everyone recognizes as the leader of safety. Once themay force you to spend more money years down the line.

ments is the basis of production technology and the job

and reduce the number of mid-process analyses, which

importance of safety is understood to some extent, theSince this is just paying off a debt that should have beenof the production technology section. This can’t be done

should lead to both overall profits and safety.

second step is to have the position of safety representa-

paid in the past, it does not improve safety. Upgradesin a manufacturing section that is busy handling orders

Tose: Sanyo Chemical may not have had such a function

tive serve as a gateway to success in the career ladder.

are required to meet safety standards whose levels risethat come in one after another. It’s best to create an en-

in the past, but if you don’t do it now, you may end up

It is the position for candidates toward becoming thewith the times.

vironment for the production sites where the workers canwith even more debt.

next leader of the company. The idea is to have them

Maeda: If we had spent the money in the past, the total

concentrate on doing what they’re supposed to do.

cost would be lower and also safer. It is difficult to verify,

Also, rules should be as simple as possible, since

prepare now so that they will not be in trouble when they

Maeda: In July 2023, we established the Manufacturing

people cannot pay attention to more than one thing at

are in a position where they have to take responsibility as

though.

Innovation Center at the Nagoya Factory in order to fun-a time. Countermeasures that require on-site workers toa factory manager or General Manager of the Production

Tose: Yes, it is difficult. Even if we compare one billion

damentally improve the production sites. With a dozen

monitor them tend to increase since they are less costly,

Division in five or 10 years.

yen that can be saved now with three billion yen that will

employees from the R&D section having been allocated,but management must look at realistic workloads and

Maeda: That’s the way it should be. This is also a busi-

be saved in the future, we cannot be sure that we canI believe we can improve safety.

burdens at the site.

ness of management.

Maeda: In the factory I showed you today, one person is

Tose: When I first started creating safety culture diag-

responsible for several pieces of equipment. The worker

nostics,* many people said they were useless. But today,

inevitably gets flustered, wondering whether to prioritize

no one says safety culture is useless. If you leave yourthis reactor or that reactor, or thinking that if this work is

factory unsafe, it will slow down the growth of Sanyo

not finished today, it will cause trouble for the next shift

Chemical and your business.

worker. That is when accidents are more likely to occur.

Maeda: I agree. Thank you for your time today.

actually save three billion yen in the future.

A user-friendly factory is a safe andprofitable factory

The days when on-site workers have to
pay attention are overTose: I think the days of having on-site workers pay

37

ProfileSafety Improvement and Safety Culture at Production Sites

Tose: That is why factory design standards are so import-

attention to safety are over. Having to pay attention isant, so as not to allow excessive corner-cutting in safety

stressful enough as it is. Sanyo Chemical’s safety policy

Manager of the Production Division, I set a policy ofmeasures. Before regretting later that we should haveincludes observance of basic rules. In order for the rules

putting safety first. I told the employees to keep tellingdone this or that, the necessary money should be incor-

to be followed, the people who set the rules must guar-

me what they noticed regarding safety, and that I would

porated into the factory design standards and utilized inantee that the work be completed properly if it is done

definitely take care of it even if it costs a little more

the construction of new factories. The know-how should

according to the rules. Rules are broken because themoney. However, few opinions were given. So I am very

be accumulated and used again the next time. The dif-work cannot be completed unless the rules are broken.

interested in what you mentioned earlier about giving theference between a company that has been running thisIn this sense, staffing and budgets reveal the true inten-

factory manager a safety budget.

process and a company that has been building factories

tions of the company. On-site workers check who is as-haphazardly will gradually widen. You have accumulated

signed where, and what the budget is. A safety policy is

the know-how to maintain the functionality and quality

only an outward appeal and has no reality unless properof your products. At the same time, if you accumulate

staffing and budgeting are in place. I think an importantknow-how and expertise in factory design, you will berole of executives, especially the president and the vice

able to efficiently carry out small-quantity, high-mix pro-president, is to show that the company is serious by

Maeda: Last year, we started visiting factories of otherduction. This will be a unique strength of Sanyo Chemical

providing adequate staffing and budget.

companies. They also seem to wonder if their safetythat no other company can imitate.

Maeda: Yes. The protective equipment we must wear

measures are really sufficient, and when we approach

Maeda: A factory that makes it easy to manufacture

becomes heavier the more hazardous the chemicals

them, they say, “Let’s exchange ideas.”

products is a profitable factory, and at the same time awe work with. This is tough during the rainy season andTose: Since the knowledge involved in safety covers

Sanyo Chemical Group Integrated Report 2023

Last year, when I assumed the position of General* A diagnosis tool with which factors common to organizational accidents are sorted
in eight groups and approximately 80 questions are presented to be answeredby respondents so as to visualize the situation of the safety culture rooted in an
organization on the eight axes.

Becoming a safety expert is the gateway
to becoming the next leader

Sanyo Chemical Group Integrated Report 2023

38

Profile

Occupational Safety and Health/Accident Prevention

measures appropriately, thereby improving the capabili-ities, and has been striving to achieve accident-free/injury-free operation. We sincerely regret the occurrence of a fatal acci-

ties of each workplace.

and remain committed to occupational safety and health and accident prevention in cooperation with its subcontractors.

Status of labor accidents
To achieve zero labor accidents, we are conducting

dent in January 2022. The Group will redouble its efforts to ensure that all its managers and employees go back to the basics

Expanding safety education to employees
including subcontractors

oratories, and took countermeasures. We will continue toactivities under the main themes of risk assessment, creation of a workplace culture in which workers warn eachother, thorough implementation of recurrence prevention

invest in safety measures at the factories by carrying out

In recent years, increased sensitivity to danger andmeasures, and achievement of a safer work environment.

ongoing countermeasure works, such as enhanced ven-

education on safety behavior have become even more

Regrettably, in FY2022, in addition to one occupational

A fatal occupational accident occurred on the premises

tilation and safety confirmation systems. In addition, after

important. The Safety and Technology Education Cen-

accident involving our employees with lost time andof the Nagoya Factory (Tokai City, Aichi Prefecture) ofinvestigating the cause of the accident, we established a

ter at the Nagoya Factory has already provided hazard

seven without lost time, there were three occupational

Sanyo Chemical Industries, Ltd. Specifically, an employ-new permanent countermeasures committee, and havesimulation programs and rank-based training, but we will

accidents involving dispatched workers/subcontractors

ee of a subcontractor died during preparation for the re-been studying ways to improve essential safety, includ-

further enhance safety education. A curriculum suitablewith lost time and five without lost time. We have inves-

sumption of production after periodic equipment repairs.

ing changing safety awareness. In December 2022,

for subcontractors, who work alongside us at our busi-

tigated the actual causes of each accident by using theWe sincerely pray for the peaceful repose of the employ-

we established a safety philosophy and a safety policy

ness sites, will be introduced.

five whys method,*1 implemented recurrence prevention

ee’s soul, and extend our heartfelt sympathy to the family

to ensure the Group’s concerted efforts. We have alsoof the deceased. We also extend our deepest apologies

developed priority measures in the New Medium-term

for the aggravation and distress we have caused to all

Management Plan 2025. We will certainly work on these.

Outline of the accident
Discovery
date
Discovery
location
Deceased
personThe safety philosophy and the safety policy〈Safety philosophy〉

Around 12:00, January 15 (Sat.), 2022
Production Dept., Nagoya Factory of SDP
Global Co., Ltd.,
31-1 Shinpomachi, Tokai-shi, Aichi
One employee of a subcontractor

Background of the accident

We place the highest priority on Safety and Compliancein all our business activities.
〈Safety policy〉
Safety comes first.
Recognizing that safety is the foundation of ourbusiness activities, and with a strong determination
to ensure that no one will be injured or will injure others, we will work on the following as our basic policy.
1. Observance of basic safety rules
2. Execution of health and safety activities
3. Improvement of crisis management capabilities

During the periodic repairs conducted from December

cover was not sufficiently tightened when it was reinstalled.

es and continuously improve our safety, we introduced asafety assessment by the Japan Industrial Safety Competency Center, a non-profit organization, and began theoperate it for other factories as well to address our safety

Safety/accident prevention system
The Safety Promotion Department, which is under the

0.500

direct control of the President, instructs and supervises

is established in the region where the emergency has
occurred. Should a large-scale earthquake or other wide-caused nitrogen to leak through the gap in the cover, filling

initiatives, the Safety Promotion Department was newly

reconstruction activities on a company-wide level underthe building with nitrogen. The victim passed through theestablished as an organization under the direct control of

the control of the General Manager of the Environmentarea during this state, and thus the accident occurred.

the President, incorporating the operations of the Envi-and Safety Headquarters designated by the President.

ronmental and Safety Administration Department of the
Responsible Care Division and the Safety and Technology Education Center. We will foster a safety-first mind by* An inspection opening for equipment maintenance, etc., allowing a person to enterand exit.

changing safety awareness and deepening and expand-

0.940

0.940
1.070

0.558

2018

0

0

2019

2020

0.274
2021

SystemSanyo Chemical
Instruction andsupervision

To improve essential safety
Safety Promotion
Department

lished an accident response committee to investigate

Report on
activities

the cause, among other factors. At the same time, we

We will strengthen risk assessment to mitigate risks. We

conducted a comprehensive review of the risk of similar

will make long-term efforts to develop human resources

Business Continuity
Task Force

accidents occurring at other factories and research lab-

capable of identifying risks and formulating mitigation(set up in the case of an emergency)

Each factory
Research laboratories,
Head Office, branch offices,
sales offices

Domestic Group
companies
Production factories
Overseas Group
companies
Production factories（FY）（Severity rate）

0.10
0.08
0.06

0.06

0.06
0.05

0.04

0.05

0.02

0.02

President

2022

Severity rate of occupational accidents*3

0.03

ing various measures.

Strengthening risk assessment anddeveloping human resources

0.900

0

the occupational health and safety and accident preven-will be set up at the Head Office to implement support andSanyo Chemical Group Integrated Report 2023

1.614
1.500
1.160

In order to ensure the implementation of the aboveties.

Chemical industry

2.000

1.000

area disaster occur, the Business Continuity Task Forcecooperation in the investigation by the relevant authori-

The Group（Frequency rate）

challenges.

accident to prepare for the resumption of production. ThisIn response to this fatal accident, the Company estab-

Occupational accident frequency rate*2

assessment of our Nagoya Factory in May 2023. We will

In case of an emergency, a local emergency task force

Fostering a safety-first mind led by the Safety
Promotion Department

In this state, nitrogen was fed in from the day before theSince the accident, the Group has been providing full

all Group factories in Japan and abroad.

tion in each base.

2021 to January 2022, a manhole* cover of the equipment
installed in the building was removed and reinstalled. The

measures, and rolled out important countermeasures toAssessment of factory safety by an outside audit
In order to comprehensively assess our safety challeng-those concerned.

39

Foundation

RM

The Sanyo Chemical Group, which runs chemical businesses, is well aware that safety is the foundation of its business activ-

Details of a fatal occupational accident
on January 15, 2022

Strategy

0

0.00

0.00

2018

2019

0.00
2020

0.02
2021

2022

（FY）

*1 An analytical method to extract not only the direct cause but also the root cause
behind a certain problem by repeating the process of identifying the cause why it
occurred and asking the question “Why?” regarding that cause*2 Frequency rate = (number of employees suffering accident with lost time) ÷ (total
working hours) × 1,000,000
This value indicates the generation frequency of accident victims (Group company employees) per 1 million hours.
*3 Severity rate = (labor lost days) ÷ (total working hours) × 1,000
This value indicates the severity of accidents per 1,000 working hours.

Sanyo Chemical Group Integrated Report 2023

40

Profile

Climate Change (response to TCFD recommendations)tions by the Task Force on Climate-related Financial Disclosures (TCFD) in December 2021. As a chemical manufacturer,
the Sanyo Chemical Group uses fossil fuels in its manufacturing processes for various products and emits CO2. For thisreason, it focuses on reducing CO2 emissions from business sites, and aims to achieve carbon neutrality by developing andspreading the use of products that contribute to energy conservation and CO2 emissions reduction.

Climate change risk assessment
Climate change
risk item

Introduction /raising of carbon tax

Impact of climate change risks● Risk

〇 Opportunity

Impactassessment● Increase in energy procurement costs〇 Spread of CCUS

Countermeasure● Reduction of GHG emissions by introducing cogeneration andsolar power generationHigh〇 Establishment of a CCU system using our ionic liquids● Tightening of GHG emission regulations

scope of analysis will be expanded to the Group companies, and the 4°C scenario will be assessed to formulate

Since FY2021, the Sustainable Management Committee

management risks, including climate change, and to

Reduction of CO2
emissions

measures.

(chairperson: President and CEO) has been in place
to study appropriate response to issues that may pose

World anticipated in the 1.5°C scenario

Replacementwith low-carbon
products● Top priority placed on the realization of a decarbon-

make decisions under the supervisory system of theBoard of Directors. The committee discusses the response to TCFD recommendations and reports importantmatters to the Board of Directors.
The CSR Promotion Management Committee formulates and implements specific measures to reduce CO2
emissions. The committee builds systems and mechanisms and reports the status of CSR activities, which areconducted under the initiative of the committee, to the
Sustainable Management Committee.

Foundation

CN

Considering that response to climate change is an important management issue, we showed support for the recommenda-

Governance

Strategyized society, and implementation of an ambitious
climate change policy● Significant increase in the carbon tax rate
● Prohibition of internal combustion engine (ICE) sales,
shift to electric vehicles (EVs), and decarbonization ofenergy and raw materials● Mainstreaming of renewable energy● Reduction in consumption of chemicals through recycling● Manufacture of chemicals from biomass andCO2-derived raw materials● Exacerbation of natural disasters● Realization of carbon neutrality (2050)〇 Expansion of the market for productsthat contribute to reducing GHG
emissions● Restrictions on CO2 emissions duringuse〇 Market expansion of products madefrom bio-based raw materials

Recycling
regulations●
Increased costs due to the increased
use of recycled raw materials〇 Increase in demand for recyclable products

Changes in
consumer behavior●
Decrease in sales of gasoline-fueledand hybrid vehicles〇 Increase in sales of electric vehicles〇 Reduction in weight of batteries in linewith the higher mileage of vehicles● Reduction of GHG emissions during the manufacture of SAP
through energy management

High〇 Expansion of sales of carbon fiber convergents for blades forwind power generation

Intermediate〇 Expansion of sales of surfactants made from bio-based raw
materials

Intermediate〇 Development of imaging materials using recycled PET〇 Development of chemical recycling technology for urethane〇 Deployment of resin dispersants for recycled materials / organic filler dispersion

High● Increase in sales of lubricant additives that contribute to higher
fuel efficiency of gasoline-fueled and hybrid vehicles〇 Increase in sales of electrolytes in line with the electrificationof vehicles〇 Increase in demand for permanent antistatic agents for IC trays
in line with increasing demand for semiconductors〇 Development of organic cathodes for organic cathode secondary batteries that contribute to weight reduction

Strategy
Risk management
The Group conducts scenario analysis as the first stepat the Nagoya Factory and the Kashima Factory, and inmanagement system, reviewing the manufacturing pro-the SDP Group, which account for a large proportion ofcesses, and changing the product portfolio.

toward formulating the strategy, risk management, met-

We anticipate tighter regulations due to policies, includ-

the CO2 emissions of the Group. We will also improve therics, and targets for climate change. We selected busi-

ing carbon pricing toward decarbonization, and a shift

processes and reduce CO2 emissions from our businessness risks and opportunities in the 1.5°C scenario, which

in demand for materials suitable for decarbonization assites.

aims to achieve a shift toward a decarbonized society,the main climate change risks of the Group. We also

assessed their importance, and compiled their impact

study the risks of the accelerated shift toward a circular

CO2 emissions by actively promoting sustainable man-on the Group. The scope of analysis was the business of

economy, and the emergence of innovative technologies

agement, including the review of our business portfolio.

the Company and SDP Global Co., Ltd. The assessment

toward a decarbonized society. As countermeasures,

results were discussed by the Sustainable Management

we will study the possibility of carbon dioxide capture

Committee and reported to the Board of Directors. The

and utilization (CCU) and energy shift to hydrogen, etc.,

Regarding opportunities, we contribute to reducing

The Group’s countermeasures to the main risks andopportunities of climate change
The Group’s countermeasures to the main risks andSystem and roles to promote response to TCFD recommendations

opportunities and the results of impact assessment wereWe will also set indices to promote sales expansion
and development of products that contribute to the
reduction of CO2 emissions, and work on the reduction of
CO2 emissions through the supply chain.

Target of CO2 emissions reduction■■ Emissions (Scopes 1+2)
Scope 1: direct emissions from factories, such as fuel use in the manufacturing process
Scope 2: indirect emissions from the purchase of electricity and heat
（10,000 tons）

40.0

compiled. Regarding the impact assessment, the impact
30.9

in terms of the amount of money was estimated and clas-

Board of Directors

30.8
27.6

sified into three categories (high, intermediate, and low),
Sustainable Management Committee

Management Council

Chairperson: President and CEO
Secretariat: General Manager of Corporate
Planning Division

Deployment of measures tosolve important issues

Report on the status of
CSR activities

Secretariat: Manager of Corporate Social Responsibility
Promotion Department

Monitoring of implementationof CSR activities

The Group set long-term targets to achieve net zeroCO2 emissions by 2050 in Scopes 1 and 2, and createda roadmap to reduce CO2 emissions by 50% by 2030
(compared to the FY2013 level). We aim to reduce CO2
emissions significantly by introducing CCU in addition
to increasing energy use efficiency through the use ofrenewable energy and the introduction of an energy

Sanyo Chemical Group Integrated Report 2023

20.0
15.4

CSR Promotion Management Committee

All group companies / all sections

41

25.5

Metrics and targets
Chairperson: General Manager of General Affairs Division

Study of economic and social
value creation programs

depending on the magnitude.

0

0
2013

2020

（Base year）

2021

2022

2030

2050

（Target） （Target）（FY）

Roadmap toward carbon neutrality
https://www.sanyo-chemical.co.jp/eng/sustainability/environment/tcfd/

Sanyo Chemical Group Integrated Report 2023

42

Profile

Message from the Chairman of
the Board of Directors

Corporate GovernanceTwo years have passed since Takao Ando became concurrently Chairman of the Company
and Chairman of the Board of Directors. Ando will talk about his policy of operation of theFoundation

TM

Based on the Company mission, “Establish a better society through our corporate activities,” the Sanyo Chemical Groupwill realize sustainable growth toward the future by enhancing both economic and social values in close cooperation with all
stakeholders. To this end, we consider the establishment of corporate governance that is trusted by stakeholders to be one

Board of Directors and his future vision as Chairman of the Board of Directors.

of the highest priority management issues.

Corporate governance system

Audit & Supervisory Board Members and the Audit &Supervisory Board

that enables employees to demonstrate their capabilities

We are a company with an Audit & Supervisory Board.

Of four Audit & Supervisory Board Members, three arein an impartial manner and fully unleash their potential.

The Company has also introduced the executive officer

Outside Audit & Supervisory Board Members. The Audit

to think that keeping in mind the important of governanceFor details, please refer to the article on the “New HR

system, under which Executive Officers execute busi-& Supervisory Board Members not only attend Boardis the key to promoting reforms. Previously, the Board

System” on p.34 of this report.

ness in accordance with the management policy, etc.,

of Directors’ meetings, Management Council meetings,

determined at meetings of the Board of Directors. In thisand other important meetings, but also inspect important

Corporate governance reform

HR system. We have started to operate a mechanism

As Chairman of the Board of Directors, I have promoted
governance reforms for the past two years. I have comeof Directors meetings were held to make resolutions

In the New Medium-Term Management Plan 2025, weand reports. I have increased the number of items on

set a female manager ratio of 15% or more and a female

manner, the Company clearly separates the manage-

approval documents. They thus audit the status of Direc-

the agenda and matters to be discussed, turning these

director ratio of 30% as targets for 2030 in “Toward thement decision-making and supervisory function from thetors’ business execution, capitalizing on the knowledge

meetings into opportunities for discussions for the Board

Future Beyond 2025: Initiatives to Support Growth.”business execution function.

of inside members who are well versed in the wide rangeof Directors members. Sanyo Chemical is a company

Diversity entails various aspects, including gender, age,with an Audit & Supervisory Board, so Audit & Superviso-

nationality, and employment of persons with disabilities.

Directors and the Board of Directors

ry Board Members are expected to play important roles.

Monitoring and evaluation regarding attainment of these

The term of office of Directors is one year. With theand accounting affairs or with business managementtargets and the implementation of measures are also an

objective of strengthening the management superviso-

experience. In addition, as an organization under the

integral part of the Board of Directors’ responsibilities.

ry functions, three out of nine Company’s Directors are

direct control of the Audit & Supervisory Board, theindependent Outside Directors; moreover, the Chairman

Company has established the Auditors Staff Division. Theof the Board is appointed from among Directors who are

Division staff who assist the Audit & Supervisory Board

Enhancement of corporate value
The most important role that the Board of Directors mustof businesses of the Company, as well as the expertiseof outside members with experience relating to financial

fulfill is to maximize the profit of stakeholders. Thus, theReform of the corporate culture

Board of Directors is also expected to check how much

We live in an era in which we cannot survive without mak-not involved in the execution of business. The Board ofMembers in their duties are independent of the Directors.

profit is generated from relevant businesses in returning changes. The question is what and how to change.

Directors holds a meeting, in principle, once a month.

By establishing this structure, we strive to secure thefor investments in terms of human resources, goods,

It is essential to create an employee-friendly mechanism

It makes decisions on important matters, such as man-effectiveness of audits.

and money. While we attach importance to dividends

that increases efficiency. As part of such efforts, weagement policy, and supervises the status of businessfor shareholders, it is also our priority to improve theintroduced the flextime system without the core time andexecution by Directors and Executive Officers. In fiscal

Management Council

treatment of employees and invest in R&D and growth.

the telecommuting system. Recently, the Group has also

2022, 15 meetings of the Board of Directors were held.

The Management Council meets once a month, in prin-

I believe that we can further reward shareholders byfocused on health management. These matters are also

ciple, to make decisions on important matters regarding

contributing to customers and society through high-val-

discussed by the Board of Directors.

business execution by Executive Officers, based on theue-added businesses, focusing on the operation of thePromotion of diversity also aims to ensure open

Board of Directors to hold discussions and make judg-

communication so that everyone can express candid

ments that contribute to the enhancement of corporate

opinions and facilitate discussions regardless of their po-

value, and thereby improving long-term performance.

sition. A few years ago, we started to address colleagues

However, long-term R&D and attempts to start newwith “-san” (honorific suffix) rather than their position, andbusinesses are inevitably accompanied by failure. As
Chairman of the Board of Directors, I encourage management to be unafraid of taking on challenges while

Aspirations for the future

toward the future.

Chemical Group. Before that, we must have a clear

cluding the shrinking domestic market due to a declining

vision of our operations. The first thing to do is to further
promote information disclosure to all the stakeholders,
including shareholders, investors, and employees.
promoting fairness and transparency to make the organi-ing diversity. This is because we believe that diversity

zation resilient and ensure quick response to any irregu-

is important to change conventional internal rules andlarities to a certain extent.

workstyles and create a strong, and resilient business

Sanyo Chemical Group Integrated Report 2023

General meeting of shareholders
Nomination / Dismissal

Nomination andCompensation Committee

Advise(Voluntary)

ReportChairperson:
Member selected byresolution of the Board of
Directors
Inside Directors: 2 members
Outside Directors: 3 members

Board of Directors
Chairperson:
Director selected by resolution of
the Board of Directors
Inside Directors: 6 members
Outside Directors: 3 members

Nomination / Dismissal

Audit

Audit & Supervisory
Board

Cooperation

ReportAuditors Staff
Division

Nomination / Dismissal /Supervision

Auditing Division

President
Sustainable Management
Committee
Compliance Committee
Internal Control Committee

Nomination / Dismissal

Management Council

Accounting audit

Chairperson: President and CEO

Department executing business

Cooperation

Accounting auditor

Audit

Management

organization. To this end, a fair organization must be
nationality, or gender. In April 2023, we introduced a new

Corporate governance structure

As Chairman of the Board of Directors, I will focus onbirthrate and an aging population, we focus on ensur-

created. Treatment should not differ depending on race,

Board of Directors.

Coordination evaluation

I hope to help our stakeholders understand the Sanyo

With the business environment drastically changing, in-management policy, etc., determined at meetings of theeliminated the dress code.

maintaining management transparency for stakeholders

Diversity

43

Strategy

Chairman of the Company
Chairman of the Board of Directors

Group companies

Audit

Sanyo Chemical Group Integrated Report 2023

44

Profile

Corporate GovernanceCommittees

Standards for selection of Directors

Nomination and Compensation Committee
Chairperson: Chairman of the Company
Frequency of meetings: Five times (FY2022)
Role: An advisory body to the Board of Directors. The majority ofits members are Outside Directors. The Committee reports
to the Board of Directors the results of its deliberation onmatters regarding the nomination of Directors and compensation for them.

Sustainable Management Committee
Chairperson: President and CEO
Frequency of meetings: Twice (FY2022)
Role: As a body under the direct control of the Board of Direc-

tors, the Committee deliberates and makes decisions
on the policy for responding to important matters to beaddressed with high priority, regarding the process for sustainable growth, the environment, society, and governance.

Basic philosophy

consisting of inside directors who have objective judge-

by comprehensively considering each member’s personali-

ment, foresight, and insight into management issues

ty and other aptitudes, in order to form a Board of Directors

based on the expertise, knowledge, and experience they

with a good overall balance of knowledge, experience,

have accumulated in sales or research, or production or

and ability to effectively perform its roles and responsibili-

general affairs departments, and Outside Directors whoties. It should also ensure it maintains an appropriate size

can proactively provide advice and suggestions based

and diversity, including in terms of gender, internationality,

on their rich experience from an objective perspective.

professional experience, and age. To enhance our corpo-

The current Board of Directors consists of nine directors

In line with this policy, the Company selects candidates

rate value in the medium to long term in keeping with thewith knowledge in line with these skill items (including

while taking into account the balance and diversity of thebasic philosophy described below, the Nomination andthree independent Outside Directors, two of whom are

Board of Directors, and other elements.

Compensation Committee held discussions on the skill

female) and four Audit & Supervisory Board Members

items required for the Company’s Board of Directors, and(one of whom is an independent Outside Audit & Super-

decided on the following eight items: corporate manage-

visory Board Member). Independent Outside Directors

ment; compliance and risk management; understanding

include members who have management experience atof diversity and sustainability; international business; R&D,

other companies.

Standards for selection of Audit & Supervisory
Board Members
The Company’s policy is to form an Audit & Supervisory

production, and new business development; sales andFrequency of meetings: Once (FY2022)

Board consisting of outside members who have legal

marketing; human resources development and training;

independence in addition to high levels of expertise andand finance and accounting. These skill items will be

discernment based on their experience in serving as areviewed and revised, if necessary, in the light of the busi-

manager or person in charge of accounting in a listed

ness environment and social circumstances.

tors, the Committee deliberates and makes decisions on
basic policies and measures to ensure full compliance withlaws and regulations.

Internal Control Committee
Chairperson: President and CEO

opinions regarding objective auditing based on theirknowledge and experience of finance and accounting

Role: As a body under the direct control of the Board of Direc-

or other specialized fields and who are sufficiently qualibusiness execution. In line with this policy, the Company

Aya
Shirai

Hideaki
Obata

Yumi
Sano

〇

〇

〇

Supplementary explanation of
applicable items

Reason for selection

No applicable items

We have designated Ms. Aya Shirai as an independent Director since she meets theCompany’s independence standards and is therefore deemed to have no conflict ofinterest with our general shareholders. She has a wealth of experience gained throughadministrative activities from her many years of involvement in municipal administration. In addition, she has experience and achievements from having been involved incorporate management as an outside director of other listed companies. She was selected as an Outside Director because she is expected to contribute to the continuous
enhancement of our corporate value by offering useful findings and opinions from an
independent standpoint based on her extensive experience and knowledge.

No applicable items

She is a business executive (Kansai Office
General Manager) of the Japan Institute for
Women’s Empowerment & Diversity Management, which is an outsourced contractor of
the Company. Since the annual amount of
actual transactions in the latest fiscal year isless than 2% of the ordinary profit of the said
institute, it is not considered to be an organization whose main client is the Company.

Sanyo Chemical Group Integrated Report 2023

SkillsR&D, production, andnew businessdevelopment

Sales andmarketingHuman
resourcesdevelopment
and training

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

Director(newly appointed)

●

●

●

Kenichi
Nishimura

Director

●

●

●

Aya
Shirai

Director

●

●

●

●

●

Hideaki
Obata

Director

●

●

●

●

●

Yumi
Sano

Director

●

●

●

●

Hirokazu
KuromeAudit & Supervisory
Board Member

●

●

●

●

Takafumi
HoriieAudit & Supervisory
Board Member

●

●

●

Jun
KarubeAudit & Supervisory
Board Member

●

●

●

●

YusukeNakanoAudit & Supervisory
Board Member

●

●

●

●

OutsideIndependent

We have designated Mr. Hideaki Obata as an independent Director since he meets theCompany’s independence standards and is therefore deemed to have no conflict of interest with our general shareholders. In addition to extensive practical experience in administrative departments mainly in HR and general affairs, he has many years of experienceand a track record in management of companies with broad business domains. He wasselected as an Outside Director because he is expected to contribute to the continuous
enhancement of our corporate value by offering useful findings and opinions from an
independent standpoint based on his extensive knowledge and experience.
We have designated Ms. Yumi Sano as an independent Director since she meets theCompany’s independence standards and is therefore deemed to have no conflict ofinterest with our general shareholders. She has a wealth of practical experience in promoting diversity and developing human resources in a listed company and a public interest corporation. In addition, she has experience and achievements from having been
involved in corporate management as an outside director of another listed company.
She was selected as an Outside Director because she is expected to contribute to thecontinuous enhancement of our corporate value by offering useful findings and opinionsfrom an independent standpoint based on her extensive experience and knowledge.

Compliance Understanding
Corporate
Internationaland risk man- of diversity andmanagementbusinessagement
sustainability

Name

Position

Takao
Ando

Chairman of
the Company

●

●

●

Akinori
Higuchi

Representative Director,
President and CEO

●

●

●

Kohei
Maeda

Representative Director●●

Masahiro
HaradaDirector

Hiroyuki
Susakiselects candidates for the Audit & Supervisory Board

Reason for selection as Outside Director
Independent
Director

Skills matrix

fied to ensure their independence from those involved inwith its agreement.

Namemission: “Establish a better society through our corporate activities”● Steadfastly maintain a stable management base andproactively develop new businesses while leveraging
the strength of our existing businesses● Realize a WakuWaku company that respects diversity
and where all employees enjoy high job satisfaction

company, and inside members who can express theirFrequency of meetings: Twice (FY2022)

tors, the Committee makes decisions on the entire internal
control system, and provides instructions and supervision
for the internal control system’s development, operation,
evaluation, and improvement activities.

● Contribute to society through fulfillment of the Company

The Company selects candidates for its Board of Directors

Chairperson: President and CEO
Role: As a body under the direct control of the Board of Direc-

Foundation

The Company’s policy is to form a Board of Directors

Compliance Committee

45

Diversity of the Board of Directors

Strategy●

Finance andaccounting

●
●
●

●

●

●
●

●

●
●

●

●
●

Sanyo Chemical Group Integrated Report 2023

46

Profile

Corporate GovernanceCompensation for Directors
Classification of Directors

Total amount of compensation, etc.
(million yen)

Total amount by type of compensation, etc. (million yen)
Basic compen- Bonuses (Performance-linked Stock-based compensation
sationcompensation)(Non-monetary compensation)

Number of applicable
Directors (number of
persons)● Efforts to improve economic value

ratings on a five-point scale and comments in the free● Methods of disclosure of non-financial information

description fields of the questionnaire survey, to evaluate● Formulation of a human capital policy and a humanthe effectiveness of the Board of Directors. The previous

151

58

49

8

Audit & Supervisory Board Members (excluding Audit & Supervisory Board Members)

32

25

7

—

1

Outside Directors

26

26

—

—

3

Outside Audit & Supervisory Board
Members

50

43

7

—

3

Compliance Committee

Total

369

246

74

49

15

● Implementation and planning of corporate ethics study

Compensation and incentives for Directors

lations, and other internal regulations. For Outside Directors
and full-time Outside Audit & Supervisory Board Members,

rights policy● Initiatives to address climate change

meetings● Results of the use of whistleblowing contact points for

consultation or reporting

nesses by conducting inspection tours of our factories and● Results of the evaluation of internal control activities

improving corporate performance, as well as to ensure

other operation sites. We also offer opportunities to acquirethat the compensation level and system reflect theirnecessary knowledge and information by such means as

duties. The compensation level and system are based

participation in external seminars on corporate governance.

majority of members are Outside Directors. The policy for
determining compensation for Directors is deliberated on● Formulation of the Medium-Term Management Plan

and determined at the Board Meeting.
The compensation for Directors consists of basic
compensation, bonuses, and stock-based compensation.
Overview of types of compensation, etc.,
Compensation
type

Overview

Basic compensation

The basic compensation is based on the roles and responsibilities of each Director, and is determined by taking
into account the status of financial results over the medium
to long term and for the relevant fiscal year, as well as
levels at other companies. It is paid on a monthly basis.

Bonuses

Stock-based
compensation

The consolidated ordinary profit, which is a benchmark
for a corporation’s profitability, is used as an index toraise awareness to improve the financial results. The
total amount to be paid is calculated based on thestatus of financial results for the relevant fiscal year andover the medium to long term. Allocation is determinedbased on the roles and responsibilities of each Director.
Bonuses are paid at certain timings each year.
Points are granted depending on the position, etc.
based on the Share Delivery Regulations. In principle,
the shares of the Company are delivered depending on
the number of points when Directors retire.

For inside and full-time Directors and Audit & Supervisory
Board Members, when they assume office, we provide
explanations on relevant laws and regulations, the Company’s Articles of Incorporation, the Board of Directors Regu-

Sanyo Chemical Group Integrated Report 2023

tus of the Internal Control System in the Business Report

and the Comprehensive Plan

tors. This year’s results showed certain improvement inthese matters. Based on the answers to the questions in

Notably, regarding the operation of the Board of Directors, a Director who does not execute business serves
as the Chairman of the Board of Directors to proceedwith a meeting. We thereby endeavor to ensure operationfrom a fair viewpoint. Meanwhile, to further enhance theeffectiveness of the Board of Directors into the future,
we recognize the need for continuous improvement interms of “reinforcing the governance system,” “improving
discussions on management strategies from a mediumto long-term perspective,” and “enhancing support to

Effectiveness evaluation of
the Board of Directors

Outside Directors,” for which we previously found that
there was room for improvement. We will be committed tomaking improvements to address these issues.

The Company conducts an anonymous questionnaire● Confirmation of the results of the effectiveness evalua-survey on the effectiveness of the Board of Directors tar-

● Matters on which to seek advice from the Nomination

further improve the effectiveness of the Board of Direc-

other than those included in financial reports● Matters regarding investment, financing, and donations

tion of the Board of Directors“enhancing support to Outside Directors,” in order tothe Internal Control System regarding significant risks● Policy on operating major businesses

Succession plan (plan to foster successors)

geting all the Directors (nine persons), including Outside
Directors, and all the Audit & Supervisory Board Mem-In FY2022, the Nomination and Compensation Committee

bers (four persons), including Outside Audit & Supervi-

discussed the establishment of “the ideal image of the● Approval of closed financial statements

sory Board Members and evaluates the effectiveness of

President and CEO” in conformity with the corporate man-

● Matters regarding procedures for the general meeting

the Board of Directors based on the results. In FY2022,

agement principles and management strategies as wellthe questionnaire survey on the Board of Directors wasas the process to select a candidate for Representative

conducted based on the main items below.

Director, President and CEO and the systematic fosteringand Compensation Committeeof shareholders● Resolutions on conflict-of-interest transactions, Direc-

tors’ liability insurance, etc., appointment and dismissalof important employees, and matters related to compensation for Directors based on the Companies Act

Nomination and Compensation Committee● Rearrangement of the structure (skills matrix) of theBoard of Directors, including Audit & Supervisory
Board Members

Training for Directors and Audit & Supervisory
Board Members

related to financial reports● Regarding proposals for disclosing the operational sta-

● Results of the evaluation of the operational status ofBoard of Directors

egies from a medium- to long-term perspective,” andtiveness of the Board of Directors was generally ensured.

designed to secure excellent human resources toward

Nomination and Compensation Committee, of which asystem,” “improving discussions on management strat-

the above questionnaire, it was evaluated that the effec-

Internal Control Committee

Major discussion topics and themes

for improvement in terms of “reinforcing the governance● Policy of risk management activities

we facilitate their understanding of the Company’s busi-

factors, and the appropriateness thereof is verified by the

year’s evaluation results indicated that there was room

● Revision of the Whistleblowing Regulations

Compensation, etc., for the Company’s Directors is

on financial results, external objective data, and other47

was conducted based on the aggregate results of the

260

3. No
 Directors or Audit & Supervisory Board Members received compensation, etc., of 100
million yen or more in total.
4. There is no salary for employees who concurrently serve as Directors.
5. In addition to the above, the total amount of compensation, etc., received by Outside
Directors from subsidiaries as Directors during the fiscal year is 1 million yen.

Foundation

Sustainable Management Committee

Directors (excluding Outside Directors)(Notes) 1. The number of applicable Directors and the total amount of compensation, etc., include
those of two Directors who retired during the period.
2. The amount indicated in the field of stock-based compensation is the amount transferred
for the period regarding the provisions for the stock-based compensation during the fiscal
year related to the stock-based compensation system.

Strategy● Establishment of the ideal image of the President and① Composition and operation of the Board of Directors② Discussions at Board of Directors meetings③ Monitoring function of the Board of Directors④ Performance of Directors⑤ Support system and training for Directors andAudit & Supervisory Board Members⑥ Dialogue with shareholders⑦ Efforts made by each Director

method to achieve sustainable growth of the Company
and improve the medium- and long-term corporate value,
and made a report to the Board of Directors. In particular,
regarding the “ideal image of the President and CEO,” thecommittee identified the requirements that should be metby the next Representative Director, President and CEO
to realize the vision of the Group by FY2030, which was
specified in the management policy announced last year
under the Company mission, “Establish a better society

CEO; study of a plan for the successor of the Repre-

Respondents were asked to rate each item on a five-through our corporate activities.” The Nomination andsentative Director, President and CEO, including thepoint scale or give a comment based on free description

Compensation Committee also discussed the next-gen-evaluation criteria and fostering method

for each question. The survey was conducted in Marcheration candidate in anticipation of the Representative

2023 using a third-party system to ensure objectivity. The

Director, President and CEO in about 10 years’ time andresults were reported to the Board of Directors meetingthe method of fostering female candidates for Executive

held in May 2023. Discussions were held and analysis

Officers, and made a report to the Board of Directors.

● Study of evaluation indices for performance-linked

compensation● Study of the payment ratio by the compensation type

Sanyo Chemical Group Integrated Report 2023

48

Profile

Corporate GovernanceRisk Management
Stakeholder communication

StrategyFoundation

RM

on trust and collaboration. In the medium to long term,

To avert business continuity crises and prepare for unforeseen circumstances, the Sanyo Chemical Group has establishedsuch information disclosure leads to the enhancement ofinternal regulations to cope with each possible risk. We conduct risk management by raising the risk awareness of employ-

Information disclosure with high transparency to all

corporate value and sustainable growth. We will disclose

ees by providing training and holding drills.

stakeholders, including shareholders, investors, andinformation in a timely and appropriate manner.

Risk management system

employees, is important to build a relationship basedwhich stipulates the purpose and methods of use of personal information and its management, as well as consul-

Stakeholder

Policy / attitude

Main communication opportunities

Customers

We aim to improve customer satisfaction byoffering safe and secure products that meet theneeds of customers, and by responding promptly, appropriately, and wholeheartedly to theiropinions and requests.

● Direct communication through sales activities

Suppliers

Shareholders
and investors

Local
communities

Employees● Inquiries by phone or via the website● Social media

In order to address risks surrounding the Group, internaltation procedures regarding such information. The policy

regulations such as the Operational Responsibilities Reg-was revised in line with the amended Act on the Protec-

ulations, the Basic Regulations for Product Liability (PL),tion of Personal Information, which came into effect inand the Information System Security Regulations have

April 2022. We have the Personal Information Protection

been formulated, and the departments in charge shallManagement Regulations in place to realize appropriate

manage the risks. The Auditing Division (Business Audit-

protection under this policy. Regarding the Individual

ing Department or Technical Auditing Department) underNumber (My Number) system, rules are established in

the direct control of the President monitors the status of

the Specific Personal Information Handling Regulations.

risk management with the Group. If a risk is identified,

An IT system capable of ensuring security is used for

the Auditing Division gives instructions to formulate cor-

operation. We also comply with the Social Media Policy,

rection and recurrence prevention measures, checks thewhich was formulated regarding the operation of official

We work on sustainable procurement with cooperation from suppliers, and maintain long-term
trust based on fair and impartial transactions.

● Direct communication through procurement activities

We disclose information about the Group ina timely, appropriate, and fair manner to help
shareholders and investors correctly understandand recognize the corporate value of the Group.

● General meetings of shareholders

details, and follows up on the status of implementationsocial media accounts and the use of social media by● Seminars for institutional investors and analysts andby the relevant departments. Regarding important com-respective employees.

● CSR questionnaires● Meetings to exchange opinions with suppliers

response to interviews● Seminars for individual investors● Research laboratory tours● Business reports● Website● Shareholder questionnaires

pliance risks, the Compliance Committee discusses anddetermines the basic policies and measures.

Overseas crisis management activities

Business continuity plan (BCP)The Sanyo Chemical Group has established and implemented the Basic Regulations for Overseas Crisis Man-

The Group draws up and operates BCPs that prepare

agement, which set forth basic points for reducing risks

for response in the event of a massive earthquake or athat may cause harm to the lives, bodies, and property ofpandemic. The Internal Control Department of the BCP

the Group employees outside Japan, and for responding

Secretariat takes the initiative in conducting a review

to an overseas crisis if such an event should occur. The

We deepen communication with local communities to help people understand the activities of
the Sanyo Chemical Group and ensure harmony
with such communities.

● Social contribution activities, such as sponsoring events

We aim to create a workplace where every
employee feels pride and satisfaction in his/herwork.

● Various education and training programs

every year to make the BCP further effective. We also

regulations specify the crisis management organizations● Talks with the management

continuously hold practical drills in each region.

and the chain of command that will function in the caseand supporting schools● Cooperation for disaster prevention and traffic safety● Personnel systems, such as workstyles and health man-agement● In-house newsletters and Intranet● Whistleblowing contact point (hotline)of emergency and define the responsibilities and author-

Information management

ity of the Overseas Crisis Management Secretariat andthe response headquarters, so that appropriate respons-Information assets are crucially important for companies.

es can be made accordingly. The Overseas Crisis Man-

Leakage of information assets is likely to pose the risk

agement Secretariat is established within the Personnelof damaging corporate value. Recognizing the impor-

Division to constantly gather and analyze informationtance of confidential information, we have the Security

and issue overseas travel warnings as necessary. When

Management Regulations in place to prevent informationa BCP is implemented, the overseas crisis management

leakage, ensure proper use, and prevent unauthorizedorganizations will work in coordination with the Businessacquisition, use, and disclosure of confidential informa-

Continuity Task Force.

tion of third parties. We ensure security by establishing
the Information System Security Regulations and the Personal Computer and Network Management Regulations,introducing a firewall and other network security systems,
managing licenses for the use of information systems,
and limiting access to the Internet. To raise the security
awareness of employees and prevent information security accidents, we offer information security education
every year.
As for the protection of personal information, we havelaid down the Personal Information Protection Policy,

49

Sanyo Chemical Group Integrated Report 2023

Sanyo Chemical Group Integrated Report 2023

50

Profile

Compliance

StrategyFoundation

Directors, Audit & Supervisory Board Members, and Executive Officers

RM

As of July 6, 2023

We, the Sanyo Chemical Group, declared in our Code of Corporate Ethics that it is essential corporate behavior to ensure
legal compliance and to fulfill corporate social responsibility, which has been implemented to take the lead in the realizationof a sustainable society. With good sense and integrity, we are committed to improving our society and are following ourcompany mission, “Establish a better society through our corporate activities.”

Compliance system

accordance with the internal Whistleblowing Regulation.

Directors

Takao Ando
Chairman of the Company
Chairman of the Board of
Directors

The General Manager of the Auditing Division, who is
We have appointed a Director in charge of corporate eth-a member of the Compliance Committee Secretariat,

ics and established the Compliance Committee, which isserves as the internal contact point for whistleblowing.

under the direct control of the Board of Directors.

The corporate lawyer is available for the contact point

The Compliance Committee is a deliberative andoutside the Company. We operate the regulation requir-

decision-making body on the basic policy and measures

ing that the whistleblowers’ confidentiality be carefully

regarding compliance. The committee holds regular

protected to prevent the identification of whistleblowers.

meetings. In FY2022, the committee studied the content

In FY2022, four reports in total were submitted throughto be learned by employees at corporate ethics study

the compliance hotline. All of these reports were related

meetings, which are held on a company-wide basis,to harassment. The facts were investigated with utmost

identified important risks that can be reduced throughcare so that whistleblowers would not be disadvantaged.

compliance activities, and formulated countermeasures.

For problems identified, guidance was offered and dis-

We have also set up the Auditing Division under the

ciplinary action was taken for target individuals, anddirect control of the President, so as to strengthen our

education was offered to correct the situation. Previous-internal auditing function.

ly, the Sexual Harassment, Maternity Harassment, andLGBT Contact Points dedicated to harassment problems

Structure
Board of Directors

were in place separately from the whistleblowing contact
Compliance Committee
Secretariat:
Auditing Division General Manager,
Legal Affairs Department Manager

President

Auditing Division

points. In April 2023, a consultation desk for harassment
problems was newly established outside the Company. A
mechanism will be created so that the whistleblowing contact points and the consultation desk are readily acces-

Akinori Higuchi
Representative Director,
President and CEO

Kohei Maeda
Representative Director,
Executive Vice President
In charge of Safety, in chargeof Production, and General
Manager of Production
Divisionsible to whistleblowers (employees seeking consultation
services). The status of operation of the whistleblowing

Business Auditing Department
Technical Auditing Department

Internal auditing
The Auditing Division conducts internal auditing. It objective-

contact points is reported to the Compliance Committee.
Number of cases for which the hotline was used
2019

2020

2021

2022

1

4

1

2

4

Education and awareness-raising activities

operation systems and the status of business execution in

Every year, the Sanyo Chemical Group holds sessions

terms of legitimacy, effectiveness, and efficiency. Based on

to study corporate ethics across all departments withthe results, it makes proposals for improvement or correc-

the objective of preventing the occurrence of corporate

tive recommendations, in order to facilitate the Company’s

misconduct. In recent years, these sessions have placed

sound management and sustainable development.

particular focus on the kind of corporate culture that may

Masahiro Harada
Director, Managing Executive
Officersupervising Business
Planning, General Manager
of Energy Business Division,and in charge of Beauty &Personal Care Supervisory
Department

form the background to corporate misconduct. Partic-

If an employee becomes aware of a compliance prob-

In FY2022, participants watched a video on the themelem, the employee should basically discuss it with his/herof “a workplace where negative information is reported”

supervisor and/or the personnel concerned. However,and held group discussions. In total, 1,885 participants

if the problem cannot be resolved through such discus-

joined the sessions. After the sessions, a questionnairesions, the whistleblowing contact points (compliancesurvey was conducted to evaluate the overall compli-

hotline) that conform with the Whistleblower Protection

ance activities of the Group and reflect the results on the

Act are set up both inside the Company and outside ineducation activities in the following fiscal years.

Sanyo Chemical Group Integrated Report 2023

Date of birth: November 3, 1960
Apr. 1985	Joined the Company
Oct. 2012	Executive Officer, General Manager of Research & Application Division,and Head of Head Office Research Laboratory
Jun. 2014	Director, Executive Officer, General Manager of Research & Application Division, andHead of Head Office Research Laboratory
Jun. 2015	Director, Managing Executive Officer, in charge of Research & Development
Jun. 2019	Director, Senior Managing Executive Officer
Jun. 2021	Representative Director, Executive Vice President, supervising R&D
Jun. 2022	Representative Director, Executive Vice President
In charge of Production, and General Manager of Production Division
Jul. 2023	Representative Director, Executive Vice President
In charge of Safety, in charge of Production,
and General Manager of Production Division (to present)

Date of birth: February 8, 1964
Apr. 1989	Joined the Company
Jul. 2010	General Manager of Automotives II & Foam Industry Department
Apr. 2017	General Manager of Electronic Materials, Resins & Coloring Materials DivisionJun. 2018	Executive Officer, General Manager of Electronic Materials,
Resins & Coloring Materials DivisionJun. 2021	Managing Executive Officer, General Manager of Business Planning Division andGeneral Manager of Energy Business Promotion Division
Apr. 2022	Managing Executive Officer, General Manager of Business Planning Division andGeneral Manager of Energy Business DivisionJun. 2022	Director, Managing Executive Officer, supervising Business Planning,
General Manager of Energy Business Division,and General Manager of Biotechnology & Medical DivisionJun. 2023	Director, Managing Executive Officer, supervising Business Planning,
General Manager of Energy Business Division,and in charge of Beauty & Personal Care Supervisory Department (to present)

ipants learn that corporate culture reform leads to improved compliance by watching videos (short dramas).

51

Date of Birth: November 7, 1959
Apr. 1984	Joined the Company
Jun. 2012	President, Representative Director of SAN NOPCO LIMITED
Jun. 2014	Executive Officer of the Company, President,
Representative Director of SAN NOPCO LIMITED
Jun. 2015	Managing Executive Officer
Jun. 2016	Director, Managing Executive Officer
Jun. 2018	Director, Senior Managing Executive Officer
Jun. 2020	Representative Director, Executive Vice President
Jun. 2021	Representative Director, President and CEO (to present)

（FY）

2018

ly inspects and evaluates the business management andInternal whistleblowing system

Date of birth: March 7, 1953
Apr. 1977 Joined the Company
Jun. 1998 Director, Deputy General Manager of Research & Development Division
Apr. 2001 Director, General Manager of Research & Development DivisionJun. 2003 Executive Officer, General Manager of Research & Development DivisionJun. 2004 Executive Officer, General Manager of International Project Promotion DivisionJun. 2008 Managing Executive Officer
Jun. 2010 Director, Senior Managing Executive Officer
Jun. 2011 Representative Director, President and CEO
Jun. 2021 Chairman of the Company, Chairman of the Board of Directors (to present)

Hiroyuki Susaki
Director, Managing Executive
Officer
In charge of Sustainability,
General Manager of Corporate Planning Division

Date of birth: August 28, 1965
Apr. 1988	Joined Tomen Corporation
Apr. 2012	General Manager of Industrial Chemicals Department, Toyota Tsusho Corporation
Apr. 2015	Deputy General Manager of International Project Promotion Division of the Company
Apr. 2016	Executive Officer, General Manager of International Project Promotion DivisionJun. 2022	Managing Executive Officer, General Manager of Corporate Planning DivisionJun. 2023	Director, Managing Executive Officer, and General Manager of Corporate Planning
DivisionJul. 2023	Director, Managing Executive Officer
In charge of Sustainability, General Manager of Corporate Planning Division (topresent)

Sanyo Chemical Group Integrated Report 2023

52

Profile

Directors, Audit & Supervisory Board Members, and Executive Officers

Kenichi Nishimura
Director, Executive Officer, incharge of Corporate Ethics
and General Affairs, and General Manager of Administrative
Affairs Division

Aya Shirai
Outside Director

Hideaki Obata
Outside Director

Yumi Sano
Outside Director

Date of birth: January 3, 1965
Apr. 1988	Joined Sumitomo Bank, Limited
Mar. 1990	Joined Toray Industries, Inc.
Sep. 2011	Manager of Finance & Accounting Department,
Member of the Board of Toray Industries (Malaysia) Sdn. Bhd.
Sep. 2017	General Manager of Finance Department of Toray Industries, Inc.
Sep. 2021	Deputy General Manager of Administrative Affairs Division of the Company
Jun. 2022	Director, Executive Officer, in charge of Corporate Ethics and General Affairs, andGeneral Manager of Administrative Affairs Division (to present)

Takafumi Horiie

Date of birth: May 23, 1960
Apr. 1979	Joined ALL NIPPON AIRWAYS CO., LTD.
Jun. 1993	Member of Amagasaki City Council
Dec. 2002	Mayor of Amagasaki City
Jun. 2018	Outside Director of the Company (to present)
Jun. 2019	Outside Director of BROTHER INDUSTRIES, LTD. (to present)
Jun. 2022	Outside Director of Royal Hotels Co. Ltd. (to present)

Jun Karube

Date of birth: February 18, 1951
Apr. 1973	Joined Sumitomo Electric Industries, Ltd.
Jun. 2004	Executive Officer, General Manager of HR & Administration DivisionJun. 2008	Managing Director, Vice General Manager of Manufacturing Management &Engineering Unit, and General Manager of HR & Administration DivisionJun. 2009	Senior Managing Director of Nissin Electric Co., Ltd.
Jun. 2010	Representative Director & Senior Managing Director
Jun. 2011	Representative Director, President
Jun. 2017	Representative Director, Chairman
Jun. 2021	Outside Director of the Company (to present),
Special Adviser of Nissin Electric Co., Ltd.
Chairman of Kyoto Prefecture Council of Social Welfare (to present)
Jun. 2023	Adviser of Nissin Electric Co., Ltd. (to present)

Yusuke Nakano

Date of birth: August 20, 1961
Apr. 1984	Joined Shikishima Boseki Ltd.
Apr. 1997	Joined Kansai Employers’ Association
Apr. 2004	General Manager, Membership Administration
Apr. 2013	Joined Japan Institute for Women’s Empowerment & Diversity Management
Apr. 2014	General Manager, Kansai Office (to present)
Jun. 2021	Outside Director of the Company (to present)

Audit & Supervisory Board Members

Hirokazu Kurome
Outside Audit & Supervisory
Board Member (Full-time)

53

Sanyo Chemical Group Integrated Report 2023

Date of birth: September 5, 1957
Apr. 1982	Joined Toray Industries, Inc.
Nov. 2009	General Manager of Tsuchiura Plant
Jun. 2012	General Manager of Gifu Plant
May. 2015	General Manager of Mishima Plant
Jun. 2016	Member of the Board of Toray Industries (Malaysia) Sdn. Bhd.
President of Penfibre Sdn. Bhd.
Jun. 2018	Full-time Director, Deputy Representative for Malaysia of Toray Industries, Inc.,
Vice President of Toray Industries (Malaysia) Sdn. Bhd.
May. 2021	Full-time Director in charge of Corporate Strategic Planning Division of
Toray Industries, Inc.
Jun. 2021	Outside Audit & Supervisory Board Member of the Company (to present)

Audit & Supervisory Board
Member (Full-time)

Outside Audit & Supervisory
Board Member

Outside Audit & Supervisory
Board Member

StrategyFoundation

Date of birth: July 6, 1958
Apr. 1983	Joined the Company
Jul. 2003	Deputy General Manager of Research & Development Division,and General Manager of Environmental Chemicals Research Department
Jun. 2005	General Manager of Research & Application DivisionJun. 2010	Representative Director, President and General Manager ofResearch & Development Control Division of SAN NOPCO LIMITED
Jun. 2012	General Manager of Purchasing Division of the Company
Jun. 2014	General Manager of Research Administration Division
Jan. 2016	General Manager of Auditing Division andGeneral Manager of Internal Control Department
Jun. 2019	Audit & Supervisory Board Member (to present)

Date of birth: July 1, 1953
Apr. 1976	Joined Toyota Tsusho Corporation
Jun. 1999	General Manager of Logistics Business Department
Jun. 2004	Member of the Board
Apr. 2006	Executive Officer
Jun. 2008	Managing Executive Officer
Jun. 2011	President & CEO, Representative Director
Jun. 2018	Chairman of the Board, Representative Director
Jun. 2019	Outside Audit & Supervisory Board Member of the Company (to present)
Jun. 2020	Chairman of the Board of Toyota Tsusho Corporation,
Outside Audit & Supervisory Board Member of KDDI Corporation (to present)
Jun. 2022	Senior Executive Advisor of Toyota Tsusho Corporation (to present)

Date of birth: May 15, 1969
Apr. 2002	Registered as certified public accountant
Jul. 2005	Executive Senior Partner of Seiyu Audit Corporation (to present)
Sep. 2005	Registered as certified tax accountant
Jan. 2010	Head of NAKANO C.P.A. OFFICE (to present)
Dec. 2014	Outside Auditor of SK-Electronics CO., LTD.
Jun. 2015	Independent Audit and Supervisory Board Member of Nissha Co., Ltd. (to present)
Dec. 2018	Outside Director (Audit and Supervisory Committee Member) of
SK-Electronics CO., LTD. (to present)
Jun. 2021	Outside Audit & Supervisory Board Member of the Company (to present)

Executive Officers

Hiroyuki Tsuruta

Minoru Tsuchiya

Yusuke Yamamoto

Senior Managing Executive Officer, supervising
Sales, and General Manager of Surfactants Division

Executive Officer, General Manager of Lubricant
Additives Division

Executive Officer
General Manager of Global Purchasing Division

Yuichi Fujii

Motohisa Miyawaki

Takashi Tsubouchi

Managing Executive Officer, supervising R&D,
General Manager of Polyurethane Division, General
Manager of Research Administration Division, Headof Head Office Research Laboratory, and Head of
Katsura Research Laboratory

Executive Officer, General Manager of Engineering
Division

Executive Officer
Deputy General Manager of Production Division,
General Manager of Nagoya Factory

Yoshiyuki Oku

Tatsuya Nakano

Yutaka Imaizumi

Managing Executive Officer
General Manager of Personnel Division

Executive Officer, General Manager of Performance
Materials Division

Executive Officer
Deputy General Manager of Corporate Planning
Division, Representative Director, President andCEO of SDP Global Co. , Ltd.

Koji Nire

Sho Takeuchi

Managing Executive Officer
Representative Director and President of SAN
NOPCO LIMITED

Executive Officer
General Manager of General Affairs Division

Sanyo Chemical Group Integrated Report 2023

54

Eleven-year Financial Summary

Annual

FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022(Millions of yen)

142,652

165,183

167,045

157,992

150,166

161,692

161,599

155,503

144,757

162,526

174,973

Operating profit

6,186

8,110

8,944

12,486

13,647

11,99912,91912,43911,932

11,868

8,405

Ordinary profit

7,266

9,212

10,27813,294

15,341

13,866

15,205

12,704

11,99912,771

9,918

Profit before income taxes

6,773

8,179

9,554

11,64013,854

12,144

7,541

11,008

10,638

10,734

9,414

Profit attributable to owners of parent

4,179

4,918

5,876

6,926

10,192

9,272

5,345

7,668

7,282

6,699

5,684

Comprehensive income

6,565

11,071

15,341

2,627

11,196

11,356

(760)

2,178

15,272

8,082

5,725

Investment in plant and equipment

9,899

7,497

10,52014,333

13,50013,923

10,848

8,219

10,073

9,847

12,033

Depreciation

9,182

9,642

9,604

9,256

7,412

8,299

9,087

9,078

9,569

9,533

10,083

Research and development expenses

4,511

4,659

5,515

5,622

5,443

5,365

5,569

5,322

5,384

5,650

5,691

Cash flows from operating activities

13,293

15,76911,51822,625

20,416

15,71014,603

17,232

22,30011,32810,852

Cash flows from investing activities(13,413)(8,659)(8,656)(13,510)(14,198)(14,198)(11,312)(11,115)(12,498)(11,704)(10,172)

(120)

7,110

2,862

9,115

6,218

1,512

3,291

6,117

9,802

(376)

680

406

(2,567)(2,922)(5,493)(1,043)(7,328)(1,492)(7,084)(4,146)(5,979)(2,336)

Net sales

Free cash flow
Cash flows from financing activities

Year-end(Millions of yen)

Total assets

155,438

166,529

181,029

175,321

186,863

199,179

193,630

178,873

195,723

200,194

202,182

Property, plant and equipment

56,20856,07658,76660,87063,53069,88362,32460,716

61,25561,38959,791

Interest-bearing debts

18,64818,756

18,492

14,862

15,204

10,59911,985

9,667

9,274

7,888

10,232

Net assets

94,279103,907

117,688

118,284

127,651

136,270

132,623

130,097

142,951

147,032

148,994

Amount per share(Yen)

Basic earnings per share

37.89

44.60

53.29

62.83

462.28*1

420.57242.50347.87330.34303.76257.57

Net assets per share*1

827.72899.24

1,014.19

1,016.06

5,515.51*1

5,901.23

5,868.58

5,789.88

6,371.77

6,549.60

6,617.11

Dividends per share*1

15.00

15.00

15.50

17.00

100.00*1

110.00125.00140.00150.00170.00170.00Major indicator(%)

ROA (Return on assets)

4.8

5.7

5.9

7.5

8.5

7.2

7.7

6.8

6.4

6.5

4.9

ROE (Return on equity)

4.7

5.2

5.6

6.2

8.7

7.4

4.1

6.0

5.4

4.7

3.9

Equity ratio

58.7

59.5

61.8

63.9

65.1

65.3

66.8

71.4

71.8

72.2

72.2

ROIC (Return on invested capital)*2

3.9

4.9

5.0

6.8

8.1

6.6

5.8

6.6

6.3

5.5

3.4

Other
Number of employees(Employees)

1,865

1,917

1,979

1,992

1,996

2,053

2,078

2,060

2,096

2,106

2,089

*1 Sanyo Chemical conducted a reverse stock split at a ratio of one share for every five shares on October 1, 2016. Net assets per share and basic earnings per share for FY2016
were calculated on the assumption that the said reverse stock split was performed at the beginning of FY2016.
*2 (Operating profit − Corporate tax, etc.) ÷ Average invested capital during the period × 100

55

Sanyo Chemical Group Integrated Report 2023

Sanyo Chemical Group Integrated Report 2023

56

Stock Information

Company Overview(As of March 31, 2023)(As of March 31, 2023)

Stock exchange listings

Prime Market of Tokyo Stock Exchange (Securities code: 4471)

Company NameSanyo Chemical Industries, Ltd.

Total number of stocks authorized

51,591,200

Date of Establishment

November 1, 1949

Total number of stocks issued

23,534,752

Head Office11-1 Ikkyo Nomoto-cho, Higashiyama-ku, Kyoto 605-0995, Japan

Total number of shareholders at end of period

11,848 (Up 797 from end of previous period)

Consolidated number of employees

2,089

Major shareholders (Top 10)

Domestic bases

Breakdown of shareholders by type
Number of shares held(Thousands of shares)

Name

Toyota Tsusho Corporation

Percentage ofshares held (%)

4,286

Securities companies
1.3％

19.3

Toray Industries, Inc.

3,826

17.2

Treasury shares
5.7％

The Master Trust Bank of Japan,
Ltd. (Trust Account)

1,963

8.8

Foreigninvestors

Custody Bank of Japan, Ltd.
(Trust Account)

1,165

5.3

9.4％

Nippon Shokubai Co., Ltd.

1,105

5.0

ENEOS Holdings, Inc.

1,061

4.8

Financial
institutions
15.7％

Sanyo Chemical Employees’
Stock Ownership Association

570

2.6

DFA INTL SMALL CAP VALUE
PORTFOLIO

225

1.0

Nippon Life Insurance Company

154

0.7

146

Head Office (Kyoto)

Research Laboratories

Research Laboratory (Kyoto), Katsura Research Laboratory (Kyoto)

Branch Office

Tokyo Branch Office

Sales & Marketing Offices

Nagoya Area Sales & Marketing Office (Aichi),Chugoku Area Sales & Marketing Office (Hiroshima),
and Nishi-Nihon Area Sales & Marketing Office (Fukuoka)(including

companies)

STATE STREET BANK AND
TRUST COMPANY 505103

General companies
48.3％

Head Office

Nagoya (Aichi), Kinuura (Aichi), Kashima (Ibaraki), and Kyoto

Factories

Number ofshareholders

11,848Major group companies
Private individuals/Other
19.6％

0.7

SDP Global Co., Ltd.

Sanyo Kasei (Nantong) Co., Ltd.

San Nopco (Korea) Limited

SAN NOPCO LIMITED

San-Dia Polymers (Nantong) Co., Ltd.

Sanyo Chemical America Incorporated

San Chemical Co., Ltd.

SANYO CHEMICAL (SHANGHAI) TRADING CO., LTD.

Sanyo Chemical Texas Industries, LLC

San-Apro Ltd.
Sanyo Chemical Logistics Co., Ltd.

San Nopco (Shanghai) Trading Co., Ltd.

Sanyo Kasei (Thailand) Ltd.

San-Petrochemicals Co., Ltd.

DaXiang International Trading (Shanghai)Co., Ltd.

SDP GLOBAL (MALAYSIA) SDN. BHD.

Shiohama Chemicals Warehouse Co., Ltd.
FUJIFILM Sanyo Chemical Healthcare
Corporation(Notes) 1. Treasury shares are not included in the number of shares owned by the shareholders listed in the table above. Treasury shares (1,343,803 shares) are excluded in
calculating the “Percentage of shares held.”

Sunrise Chemical LLC

SANYO KASEI (TAIWAN) LTD.

Sanyo Kasei Korea, Ltd.
Sanyo Chemical Manufacturing Korea, Ltd.

2. The Company’s shares (116,700 shares) held by the trust whose beneficiaries are directors of the Company and that are established in line with the introduction of thestock-based compensation plan for Directors, etc., are included in the shares (1,165,400 shares) held by Custody Bank of Japan, Ltd. (Trust Account), and are notincluded in treasury shares (1,343,803 shares).

Listed in ESG Investment Index(as of July 2023)

Trend of stock price and trading volume(Yen)(Thousands of shares)

7,000

7,000,000

S&P/JPX Carbon Efficient Index

Stock price (Left axis)
6,000

6,000,000

5,000

5,000,000

4,000

4,000,000

3,000

3,000,000

FTSE Blossom Japan Index

Editorial policy

2,000

Trading volume (Right axis)

2,000,000

1,000

1,000,000

0

0
4

5

6

7

8

9

10

11

2021

57

Sanyo Chemical Group Integrated Report 2023

12

1

2

3

4

5

6

7

2022

8

9

10

11

12

1

2

3

Organizations covered

Reference materials

As a rule, this report covers the entire Sanyo Chemical Group, which comprises a total of 25 companies(as of March 31, 2023)—specifically, Sanyo Chemical
Industries, Ltd., 19 subsidiaries, and five affiliates.

In editing this report, we have referred to the International Integrated Reporting Framework
advocated by the International Integrated Reporting Council (IIRC) and the World Intellectual
Capital/Assets Initiative (WICI), and the Guidance for Collaborative Value Creation publishedby the Ministry of Economy, Trade and Industry of Japan.

Period covered
FY2022 (from April 1, 2022 to March 31, 2023). However, some disclosures and business activities undertaken after April 2023 are included.

For more details of the financial report in the Sanyo Chemical Group Integrated Report 2023,
please refer to the securities report.
Securities report URL: https://www.sanyo-chemical.co.jp/ir_info/annual_report (Japanese only)
For the sustainability report, please visit the following website.
Sustainability report URL: https://www.sanyo-chemical.co.jp/eng/sustainability

2023

Sanyo Chemical Group Integrated Report 2023

58

Sanyo Chemical Industries, Ltd.
11-1, Ikkyo Nomoto-cho, Higashiyama-ku, Kyoto, 605-0995, Japan
TEL: +81-75-541-4311
URL: https://www.sanyo-chemical.co.jp/eng/