Annual Report 2017

Creating Value,
The AMITA Way

“Back to Our Roots”- There is nothing wasted in this world -The brownish cloth pictured on the cover is part of a centuries-old shichijoshinou kesa (stitched seven-strip surplice), designated as a national treasureand in the possession of Enryakuji Temple. It is said that Saicho (766-822),
a Buddhist monk who founded the Tendai sect, brought the cloth back fromthe Tang Dynasty to Japan. Tangles of pale blue, light blue,and brown linen
threads as well as purple linen remnants were stitched on a linen cloth in the

The morality that pollution
is criminal only after legal
conviction is the morality thatcauses pollution.
W. Eugene Smith

tradition of funzoe (surplice made of rags).
A funzoe is the earliest form of surplice worn by Buddhist monks in India,
made of pieces of discarded dirty rags stitched together and dyed anew.

*Quotation used with permission granted byAileen M. Smith, widow of W. Eugene Smith

A funzoe also embodies the earliest known concept of recycling.
Making and wearing a funzoe reflects a frame of mind that recognizes andcherishes value in every life form and every single thing in our universe. This
concept resonates with AMITA’s philosophy that “There is nothing wasted
in this world. Value can be found even in something considered useless.”
In this world in which we live, everything changes its form and value andTable of Contents

reemerges into being again and again.

1 Progress Report on United Nations Global
Compact

As AMITA celebrates its 42nd anniversary, we return to our roots and2 Financial Results for FY 2017

renew our commitment to establishing a recycling system that keeps things
coming back to life in a new form and value.

4 Results of Business Operations for FY2017
10 Medium-Term Business Plan for
2018-2020

Progress Report on United Nations Global Compact

For details, visit the website of the United
Nations Global Compact at:
http://www.unglobalcompact.org/

The United Nations Global Compact (UNGC), established in 2000 at the urging of then UN Secretary-General Kofi Annan,
is an initiative to encourage businesses around the world to support and implement 10 principles in human rights, labor,
environment, and anti-corruption. The AMITA Group embraced the 10 principles by becoming, in June 2002, the fourth
Japanese organization to sign the UNGC, and worked with other Japanese companies to establish the Global Compact Network
Japan in December 2003. The Group considers the UNGC Principles part of the framework that governs its business, and keeps
its stakeholders informed of its performance through Communication on Progress reports submitted regularly to the UNGC.

The AMITA Group has been striving to fulfill its mission of achieving a sustainable society through its
business operations since its founding in 1977. This mission is in line with the 10 Principles of the UNGC
and 17 UN Sustainable Development Goals (SDGs). We are proud to be one of the few companies toembody the vision of the UNGC while conducting core businesses. We will continue to help achieve greater
sustainability in society by assisting corporate clients and municipalities in resolving their pressing issues.

Eisuke Kumano Founder and CEO AMITA HOLDINGS Co., Ltd.

COPs（Communication on Progress）
The 10 Principles of the UN Global Compact

Human Rights① Businesses should support andrespect the protection of internationallyproclaimed human rights; and② Make sure that they are not complicit

in human rights abuses.

Labor③ Businesses should uphold the freedomof association and the effective recognitionof the right to collective bargaining;

Objectives and Programs for FY 2017

SelfAssessment■Ensure employee wellness
Continue to inform employees of the company policy of reimbursing theirexpenses for follow-up health checks★★

■Enlighten the public and businesses on human rights

protection and other social issues■Hold labor-management negotiations
Bring management and employees together for meetings to discuss
working environments

★★★

★★

■Create working environments that encourage employees to④ The elimination of all forms of forced

and compulsory labor;⑤ The effective abolition of child labor; and⑥ The elimination of discrimination in

respect of employment and occupation.

stay with the company longer① Improve the AMITIME program, which lets employees take leave or work shorter

hours to take care of small children or look after sick or elderly family members★★★

② Provide ﬂexible working arrangements for employees③ Consider rehiring retired employees

precautionary approach to environmental
challenges;⑧ Undertake initiatives to promote greater■Prohibit and prevent unfair and discriminatory labor practices

diffusion of environmentally friendly
technologies.

Anti-Corruption⑩ Businesses should work against

corruption in all its forms, including
extortion and bribery.

̶

Established the SDGs Strategy Studies group with 15 companies participating to encourage businesses to embrace 12of the 17 SDGs, which touch on the environment, and incorporate them into their sustainable management practices.
Provided enlightenment sessions on social issues and a sustainable society to 1,892 people who visited our Fudenkan
communication center.
Held the Earth Future Symposium 2017, titled “ In Pursuit of Hope” in Kyoto, in which invited experts focused on
historical backgrounds and events as well as trendsetting philosophies and technologies in discussing how to resolve
today ʼs mounting social issues and create a sustainable future; the symposium was attended by 261 people.

9

Held a company meeting in which management and employees discussed how to improve working environments.

̶① Eight employees, compared with six the previous year, applied for the AMITIME program, which lets an employee who
has used all of her or his annual paid holidays to use someone elseʼs unused paid holidays to take sick or childcare leave.
② Nine employees, compared with six the previous year, worked shorter hours.
③ Rehired three retired employees, compared with two the previous year.

★★★

Promoted three locally hired temporary workers to full-time employees in our Taiwan plant.
Created personnel policies, work rules, and related documents in local languages.
Provided employees working in our plants outside Japan with hands-on training in Japan.
Received ofﬁcials of the Malaysian government at the Kitakyushu Resource Recycling Plant for a tour and a training session.

■Leverage environmental technologies to revitalize communities
Promote an environmentally sound lifestyle and push a community-based
resourcecirculation model based on biomass energy technology; apply themodel widely inside and outside Japan★★★

Ensured that the biogas business continued to run smoothly and pushed a communitybased resource-circulation model
forward in Minamisanriku, Miyagi Prefecture.
Advised ofﬁcials of the town of Kami, Miyagi Prefecture, on the greater use and application of liquid fertilizer in
preparation for the launching of a biogas project.
Conducted basic research and a feasibility study on a biogas business venture and assisted in a veriﬁcation test in
Taketa, Oita Prefecture.
Conducted a feasibility study for a project to implement a comprehensive organic resourcerecycling system, whichuses a compact methane-fermentation biogas generator, in the Republic of Palau.
Our four plants in Japan became certiﬁed under ISO 14001:2015 for environmental management system.

■Promote wider application of our technologies① Assist corporate clients in implementing sustainable management practices
under environmental constraints② Develop recycling business outside Japan★

■Take preventive anti-corruption measures① Maintain and enhance regulatory compliance across the organization to
staycurrent with changes in regulatory requirements② Enhance operational governance over our subsidiaries outside Japan

★★

in our plants outside Japan

Apply to our plants outside Japan labor practices comparable to thoseadopted in our Japanese plants

environmental responsibility; and⑨ Encourage the development andReimbursed expenses for follow-up health checks for all 24 employees who requested same.

̶*Renewed a one-year contract with two retired employees and rehired another in FY 2017.

Environment⑦ Businesses should support a

Corresponding
Pages in this Report

Actions Taken in FY 2017

̶

6, 7

① Provided Sustainable Stage services to six corporate clients, assisting them in developing an environmental

management vision and strategy under environmental constraints to ensure corporate and social sustainability.

② The Taiwan Resource Recycling Plant and the AKBK Sustainable Resource Management Centre in Malaysia started

6, 7

to accept industrial waste to recycle.

① A total of 74% of employees took a self-test on their knowledge of regulatory compliance, 71% of which gave correct

answers.

② Provided training on internal rules and regulatory compliance to Japanese expatriates and locally hired employees̶in our subsidiaries outside Japan.

Progress Report on United Nations Global Compact ● 1

Financial Results for FY 2017

Highlights of Financial Results and Financial Statements

For the Fiscal Year Ended December 31, 2017

Consolidated Financial Performance (In millions of yen)
Higher net sales and ordinary income achieved than forecasted, with net
loss posted due to an impairment loss incurred by the Taiwan Resource
Recycling Plant
The AMITA Group posted consolidated net sales of 4,803 million yen, operating income of 80
million yen, ordinary income of 114 million yen, and a net loss of 337 million yen for the fiscal
year ended December 31, 2017. Compared with forecasts made at the beginning of the year, net
sales were up by 12 million yen, nearly flat; operating income was down 30 million yen due todisappointing performance in our business in Taiwan; ordinary income was up 45 million yen
due to favorable foreign currency exchanges; and net income was down by 352 million yen due
to an impairment loss incurred by the Taiwan Resource Recycling Plant.
While net sales in our recycling business in Japan for FY 2017 were flat from the previous fiscal
year, we closed more deals with clients in Japan on our cloud-based online waste management
system, consulting services, and environmental certification services in FY 2017 than in FY
2016. This accomplishment was a result of stepped-up efforts by the inside sales team as well as
greater overall efficiency achieved in operations. We opened the AKBK Sustainable Resource
Management Centre in Selangor, Malaysia, which is our first cementrecycling plant outside
Japan and which offers zero-emission recycling services. We recognized an impairment loss at
the Taiwan Resource Recycling Plant, which became operational in 2016 and has been having
a hard time recouping investments from an intended business model as a result of changes intechnologies used for producing photovoltaic (PV) cells.

Cost of Sales Ratio and SG&A Ratio(%)

COS ratio

SG&A ratio

Equity Capital Ratio (%)

COS and SG&A ratios
unchanged

Equity capital ratio fell
sharply

The COS ratio was unchanged from theprevious fiscal year, with a decline in thecost of goods manufactured in the recycling
business offset by an increase in the cost of
goods purchased.

The Group had shareholders’ equityof 214 million yen at the end of FY
2017, with an equity capital ratio
down sharply from 13.4% in theprevious year to 5.6%. This waslargely because we posted a net loss
on impairment loss at the Taiwan
Resource Recycling Plant.

The SG&A ratio was flat, with a decrease
in rent and lease expenses resulting fromthe consolidation of facilities offset by anincrease in expenses for market research
conducted outside Japan.

We have given top priority to taking
action to regain financial soundness.

Financial Results for FY 2017 ● 2

Financial Results for FY 2017

(In millions of yen)

The Group’s consolidated net sales for the f iscal year
ended December 31, 2017, were ahead of the previous
fiscal year by 73 million yen and were close to the forecast
made at the beginning of the year. Operating income wasup 2 million yen from a year earlier, but was short of theforecast by 30 million; ordinary income was up 60 million

Consolidated Balance Sheetyen and exceeded the forecast by 45 million yen due tofavorable foreign currency exchanges. A net loss of 337
million yen was posted for the year, which was due to an
impairment loss at the Taiwan Resource Recycling Plant
and which was worse by 310 million yen than the year
before.

(In thousands of yen)

Consolidated Statement of Income

Dividends(In yen)

The Group has a dividend policy that seeks the right balance between
the need to maintain- a sound financial position and make its operating
foundation more solid and the need to return profit to shareholders inproportion to its business performance for the year; the Group makes
a good-faith effort to pay yearend dividends equivalent to 30% ofconsolidated net income for the year. However, the Group suspended its
dividend payments for the fiscal year ended December 31, 2017, due to net
loss posted for the year. We project that we will again pass a dividend forthe year ending December 31, 2018, as we will focus our efforts on making
our financial foundation more robust.

(In thousands of yen)

Consolidated Statement of Cash Flows (In thousands of yen)

Financial Results for FY 2017 ● 3

Results of Business Operations for FY 2017

Provision of Products and Services

Key Products and Services Provided
Online Waste Management System
ProvidedNumber of ClientsBusinesses

We had 28 more corporate and municipal clients in
FY 2017 than in FY 2016, as environmental solutions
services, such as consulting and environmental
certification services, attracted new clients.

FSC Certification Assessments
Conducted

MSC and ASC Certification
Assessments ConductedWith the number of FSC®-certified goods sold by retailerson the rise, we conducted FSC® CoC Certificationassessments on a substantially larger number of printing
and packaging companies in FY 2017 than in FY 2016.

Yellowtail and cobia were added to the type offish subject to ASC certification. AMITA wasthe second company in Japan to assess farms foryellowtail.

Facilities

The imminent mandatory implementation of an
online waste management has been driving an
increasing number of companies and offices to adopt
our cloud-based online waste management system.

Amount of Waste Received and Amount of Output from Zero-Emission Recycling Processes
Industrial Waste Received and Numberof Originating Facilities
Originating facilities

Cement Raw Materials a d Fuel
Materials Produced (t)Waste(including SlurMix®)

While the number of facilities from which we
received waste remained flat, the total amount ofwaste received was on the rise due to an increase inlarger projects for which we were contracted.

The production amount at the Ibaraki, Himeji, andKitakyushu Plants as well as at our partners’ plants
has been increasing. Cementrecycling at the AKBK
Centre in Malaysia partly drove the total amount up.

Metal Raw Materials Produced (t)Nickel and other materials for specialty steels

CopperProduction amount of nickel and other materials for specialty
steels dropped sharply in FY 2016, when major corporate
users stopped placing orders. The amount picked up in FY
2017 as other existing clients increased their purchase amount.

Electricity Generated (in 10,000 kWh)and Amount of Liquid Fertilizer Used (t)Amount of electricity generated

Amount of liquid fertilizer used

Both the amount of electricity generated and theamount of liquid fertilizer used plunged in FY
2017 as a result of discontinuation of recycling
services at the Kyotango Plant.
Results of Business Operations for FY 2017 ● 4

Highlights of Key Initiatives Implemented in FY 2017
In FY2017, the AMITA Group placed the top priority on achieving its targets forconsolidated operating income and net income for the year as part of its groupwide
efforts to create more value and boost profitability. However, as a result of an
impairment loss recognized by the Taiwan Resource Recycling Plant, we posted an

operating loss and a net loss on a consolidated basis for the year. Furthermore, we
acknowledged the need to address various issues such as an overhaul of the businessmodel applied to our Regional Systems Design Business, as well as a transformation of
our corporate culture.

Achievements

Corresponding
pages in thisReport・Focus sales efforts for the Sustainable Stage on clients in prospective industries
・Improve customer satisfaction by combining inside sales and outside sales practices
・Launch a dedicated website for Environmental Strategy Design Business to increase its public awareness

★★★

4, 6

Regional Systems Design Business・Develop and establish an approach and technology for the zero-emission recycling of unused waste in communities
・Increase the public awareness of the BIO System in Japan and overseas to accelerate its business expansion
・Develop the BIO System in Kami, Miyagi Prefecture
・Consider and test new ﬁnancing methods★★

7

Business Outside Japan・Enhance sales efforts and train employees to boost production at the Taiwan Resource Recycling Plant
・Open the AKBK Sustainable Resource Management Centre by the end of the year and achieve stable operations as quickly as possible
・Conduct business feasibility studies for China, India, Indonesia, and Vietnam

Business Strategy
Develop New Businesses and Markets
Environmental Strategy Design BusinessHighlights of Key Initiatives for FY 2017

Taiwan★

Malaysia

7★★★★

・Conduct a survey and operational improvement to optimize worker allocation and equipment productivity at our plants
・Optimize logistic operations by establishing a dedicated logistics team・Achieve greater operational efﬁciency by reorganizing our back-ofﬁce functions and making greater use of IT systems
・Reduce sales cost by combining inside sales and outside sales practices

★★★

4, 6

Regional Systems Design Business・Reduce implementation and operation costs by promoting greater participation of local residents
・Promote packaged offerings of services built around a compact biomass facility
・Improve proﬁtability at Minamisanriku Bio by accepting more commercial food waste★★

7

Overall Management

・The corporate planning team to create a comprehensive strategy and apply PDCA cycles
・Improve performance management methods
・All departments to review their SG&A and implement cost-cutting measures

Reduce Cost of Sales and SG&A
Environmental Strategy Design Business

Enhance Value Propositions andOrganizational Excellence★★

2・Raise awareness among businesses of a sustainable management strategy by launching a workshop
・Organize a team of experts on sustainable management★★

9

Human Resource Development

・Conduct leadership development programs for entry- and senior-level managers
・Stimulate the organization by promoting younger employees to managerial positions★★★

9

External Communications

・Consider business alliance with companies in different industries
・Develop a system for business collaboration that promotes investment and participation by external supporters
・Conduct public relations activities to establish a perception that AMITA is at the forefront of sustainable development★★

8

Environmental Strategy Design BusinessResults of Business Operations for FY 2017 ● 5

Review of FY 2017

Environmental Strategy Design Business

Establishing an Integrated Sales Approach
Provision of the Sustainable StageThe Sustainable Stage is our integrated service
that assists corporate clients in achieving
sustainable growth. In FY 2017, the second yearof the service, we focused our efforts on the threeareas described below.
In a large consulting project, in which we assist a

corporate client in creating a vision and strategy
for sustainable growth, although the revenue wetake in is high, there is a significant amount oftime between submitting a proposal to a client andclosing the deal. We will accelerate the process fordeal closure.

Key initiatives implemented in FY 2017●

① Focus sales efforts on industries and businesses

that are highly compatible with our service② Take an integrated sales approach to offer

assistance to clients in increasing their corporatevalue③ Achieve greater efﬁciency in sales activities by
establishing the right balance between insidesales and outside sales●

Achievements●

Won six projects to assist clients increating a vision and strategy
Stepped up sales efforts for existingclients by keeping close track of
their order placements (achieved
sales of 141 million yen)
Undertook 37 more projects than theyear before

Boosting the Profitability of Our Zero-Emission Recycling Services
Operational reform at production sites

We continued as in FY 2016 to reduce cost of sales
and improve safety.

Achievements●●●

Reduced facility repair expenses by 15 million yen
Reduced the purchase cost of materials at Kitakyushu
Plant by 85% year on year
Reduced the number of incidents that occurred in ourplants to 17, a decrease of 21.8% from the previous year

We completed the transition to ISO 14001:2015,
an international standard for environmental
management systems, at our Himeji, Ibaraki,
Kawasaki, and Kitakyushu Plants. We continued
to develop new recycled products and a sales
channel for them and started shipping new
products to a steelmaker in March 2018. (See page
4 for the production amount of recycled products)

Manufacturing Cost of Recycled
Resources per Metric Ton

Enjoyed Strong Orders for Online Waste Management System

Source of our profitable revenue growth

Our cloud-based Online Waste Management
System has been offered to a growing number ofclients. In FY 2017, additional four businesses
adopted this service in all of their facilities,
bringing the total to 1,795 locations of 330 entities
as of the end of the year.
The reasons behind this fast growth include
the companies’ heightened awareness of theneed for waste management and the imminent
mandatory implementation of online waste

management processes. The number of facilities
having our system is increasing at a rate of one
location per business day. In addition, as a resultof a streamlined workflow, the time required for
AMITA to set up the system in a new facility has
been reduced to one-third, helping us reduce thecost of sales and improve profitability. (See page
4 for the numbers of businesses and facilities thathave adopted Online Waste Management System)

Growing Needs for Environmental Certification Services
Accelerating trend toward sustainable resource procurement
With an eye to the Tokyo 2020 Olympic Games, Japanesecompanies are accelerating their efforts to achievesustainable procurement. The FSC® certification program isseeing a significant increase in applications for FSC® CoC
certification from pulp and paper, cardboard, and printing
companies (an increase of 70 applications year-on-year).
In addition, we expanded the range of fish species forwhich we can provide our ASC assessment and certification
services, and in FY 2017, we started conducting on-site
assessments of yellowtail farms. (See page 4 for the numberof environmental certification assessments provided.)

Assessment of a yellowtail farm

Kyotango Resource Recycling Plant Closed
The Kyotango Resource Recycling Plant (or Kyotango City Eco Energy Center; operated by
Kyotango City and managed by AMITA) ceased providing recycling services on September 4,
2017, and was closed at the end of May 2018. This was because, when recycling equipment in theplant was found damaged, Kyotango City decided to terminate the plant’s operations. The impactof this closure on our consolidated business performance for FY 2017 was immaterial.
Results of Business Operations for FY 2017 ● 6

Review of FY 2017

Business Outside Japan

AKBK Sustainable Resource Management Centre Becomes
Operational in Malaysia
Business model built on lessons learned from operations in Taiwan
AKBK Sustainable Resource Management Centre
became operational in Malaysia in May 2017,
operated by AMITA KUB-BERJAYA KITAR
SDN. BHD. (AKBK), a joint venture between
AMITA and the Malaysia-based Berjaya Group.
The AKBK Centre recycles all waste received frombusinesses into alternative cement materials andsupplies them to cement companies in Malaysia.
Operations have been running smoothly since thefirst shipment in August 2017, and the productionin December 2017 was 120% ahead of the plan forthe month. The business model adopted by thisplant is based on lessons learned in our operationsin Taiwan and has the following two features:

Review of FY 2017

The BIO System Taken to a New Level

Public-private partnership to develop sustainable communities
The AMITA Group offers the BIO System, apackage of integrated services for recycling waste anduntapped natural resources so as to achieve greater
sustainability in a community.
In FY 2017, the second year of the launch,

Jointly operated by AMITA and a
reputable local enterprise

we advanced the business model applied to
Minamisanriku, Miyagi Prefecture, in which thefirst BIO System was implemented. We also laid thegroundwork for applying the BIO System in Kami,
Miyagi Prefecture, and in the Republic of Palau.

Minamisanriku, Miyagi Prefecture●●●

Location: Bukit Tagar, Selangor, Malaysia
Waste received: 14 types of designated waste
Items produced: Alternative cement materials
and fuel

the first public facility in Japan to be awarded
the FSC full project certification. AMITA
played an instrumental role in promoting
the circulation of materials in the town andenhanced its brand presence.

The Minamisanriku BIO biogas facility
continued to operate without problem, receiving
1,733 metric tons of waste and converting it
into 40,000 kWh of electricity and 1,600 metrictons of liquid fertilizer. As a result of AMITA’s
assessment, Minamisanriku Town Hall became▶AKBK Centreʼs Business

Recycling a wide variety of
waste into alternative cement
materials

Regional Systems Design Business

Kami, Miyagi Prefecture●●●

Sources of waste are industry-independent and are not affectedby ups and downs in any particular industry.
Japanese-owned subsidiaries operating in Malaysia trust AMITAʼs
recycling technologies with proven track records in Japan.

AMITA proposed to the town of Kami, designated as a biomass
industrial town, in Miyagi Prefecture that the town implement
a BIO System. As part of a feasibility study, AMITA conductedverification tests of the use of liquid fertilizer and the sorting ofhousehold food waste in cooperation with local residents.

Joint operation with the Berjaya Group, one of the leading
conglomerate in Malaysia, makes it easy to gain support andcooperation from the local regulatory authorities.

Impairment loss on non-current assets recognized by the Taiwan
Resource Recycling Plant
The Taiwan Resource Recycling Plant, which became operational in 2016, posted an impairment
loss on its non-current assets in FY 2017. The plant engaged mainly in recycling silicon slurry
generated in the production of PV cells, and was affected by innovations in PV cell production,
which substantially reduced the amount of silicon slurry generated.

Sorting of household food waste

The Republic of Palau
AMITA participated in a feasibility study for a project toimplement a comprehensive resources recycling system in Koror,
the Republic of Palau, which was authorized by the Japan
International Cooperation Agency in June 2017. Working toward
the goal of installing a compact biogas facility by the end of 2019,
we researched waste sources and collection routes, cultivated ona test basis energy crops using liquid fertilizer, and studied thespecifications for a biogas facility.
●●●

Project period: October 2017 through June 2018
Project leader: Vioce Co., Ltd.
Project budget: 30 million yen●

A compact biogas facility to be installed(Photo courtesy of Vioce Co., Ltd.)

Partnered with: AMITA Institute for Sustainable
Economies Co., Ltd. and other

Results of Business Operations for FY 2017 ● 7

Non-Financial Capitals of the AMITA Group
Under the mission of achieving a sustainable society, the AMITA Group strives
to increase its natural capital as well as its social and relationship capital throughits business operations. On this page and the next, descriptions of five forms of ourcapitals other than financial capital are provided, as defined by the International

Integrated Reporting Council. Each of the five forms of capital interacts with eachother to ultimately materialize into financial capital.
(See pages 2 and 3 for information about our financial capital)

Natural CapitalSocial and Relationship Capital

Our business activities to reduce environmental loads and preserve thenatural environment are intended to sustain natural capital. Our zeroemission recycling services help reduce the amount of natural resources
to be mined and preserve the surrounding environment; our assistancein preserving biodiversity and our environmental certificationassessments for forestry and fishery help promote the sustainable use ofnatural capital. Our assistance in environmental management, suchas providing Online Waste Management System and Best Way toManage Waste, helps businesses achieve greater regulatory compliance,
reducing cases of illegal waste-dumping and other wrongdoings.
(See pages 4 and 6 for information about environmental certificationassessments conducted)

Our Zero-Emission Recycling Services Help Reduce
Environmental Loads
Alternative resources produced with zeroemission recycling processes have a higher
quality than their natural equivalents and substantially reduce the use of natural
resources. Both the energy input into recycling operations and the greenhouse gas(GHG) emissions from them were far less than the norm in the industry.
Production amount of recycledresources used as fuel in cement
production 111,925 t *1
Production amount of recycledresources, such as nickel, used asmaterials for specialty steels

2,470 t *2

Production amount of recycled
copper 568 t

Equivalent to 392,002 tof mined coal
Equivalent to 16,194 tof mined nickel
Equivalent to 23,329 tof mined copper

3.5 times as much as
the amount of recycledresources produced
6.6 times as much as

the amount of recycledresources produced

41.1 times as much as

the amount of recycledresources produced

Note: *1. Including SlurMix®
*2. Only for nickel-substitute resources used as materials for specialty steels. See
page 4 for information about the amount of metal resources produced by AMITA.

Amount of waste disposed byincineration and landﬁll at the endof recycling processes 0 gram

Energy input *1
Unit of input divided by sales(in millions of yen) 4.7 GJ

Amount of efﬂuent generated in
manufacturing *2 0 m3

GHG emissions *1
Unit of output divided by sales(in millions of yen) 0.43 t-CO2

1/2 of the industry
norm

1/15 of the industry
norm *2

Measurement period: From January 1 through December 31, 2017
*1. Data compiled in Ibaraki, Kawasaki, Himeji, Kyotango, and Kitakyushu Plants and Minamisanriku BIO*2. Data published by the National Institute for Environmental Studies

Actions Taken to Reduce CO2Emissions
CO2 emissions of 113 toperationsof the Minamisanriku BIO biogas
facility in Minamisanriku, Miyagi
Prefecture, in FY 2016 were offset in
FY 2017 by credits issued by FSCcertified forests in the town undera carbon-offset program. This arrangement helped
promote resourcecirculation efforts in the town. In
FY 2018, we intend to step up our efforts for greener
business operations. For instance, we plan to sourcesome of electricity used in our own plants in Japan
from renewable energy sources. We also plan to starta new employee welfare program intended to promote
the use of renewable energy.

Breakdown of CO 2 AMITA Group in
FY 2017
Waste-collection phase at own plants

121.0 t-CO 2

Production phase at own plants

1,349.4 t-CO 2

Product-shipping phase at own plants

1,249.9 t-CO 2

Headquarters and regional sales ofﬁces

Total

90.3 t-CO 2
2,810.6 t-CO 2

Our plants outside Japan and partnersʼ plants not included

We consider the relationships we build with society andstakeholders through business activities as well as the positive
outcomes generated by those relationships to be our social andrelationship capital. AMITA cannot go it alone to achieve asustainable society, but must build relationships with othercompanies, municipalities, shareholders, and community residents
and turn them into capital, with which we conduct business andhelp achieve a sustainable society.

Sustainable Economy Association Pursues
Sustainable Market
AMITA is a founding company of the Sustainable Economy
Association, established in 2017 to promote the development of asustainable market. While conducting verification tests of IoT andecosystem technologies, 16 member companies (as of December2017) will develop a plan for new businesses and put it into practicein several locations in Japan by the end of 2020.
Website: http://www.sustainable-economy-association.com/

Building Stronger Community Relationshipthrough the BIO System
The BIO System has been playing animportant role in creating jobs in thecommunity, building stronger relationships
among residents, and revitalizing thecommunity. We published a book in
FY 2017 that discusses how the town of
Minamisanriku has regained its vitality andwhich touches on the relationship-building
effort in the town through the BIO System.
AMITA uses the book to raise awareness of the services it offers.
An e-book titled “Revolution Started with a Garbage Bucket” can be downloaded for free
at AMITA Books at: http://www.amita-hd.co.jp/books/

Results of Business Operations for FY 2017 ● 8

Human CapitalIntellectual Capital Capital

A company must have organizational excellenceand people capable of creating value in order toinitiate innovation and transformation and achieve
its mission in a volatile, everchanging businessenvironment. The AMITA Group considers

its employees not as cost but as capital, and it
provides a talent development program and createsa comfortable workplace so that employees cancontinually improve their human and professional
skills and achieve their full potential.

Results of Employee Survey for FY2017 (excerpt)
Q: Do you have a deeper understanding of
AMITA’s mission, corporate culture, andmanagement policy than a year earlier?

Developing Recycling
Technologies

Q: Do you find your working environment
comfortable?

Half of the respondents answered
affirmatively. Employees commented: “Aroundtable with executives was a great
idea,” and “I agree with the company’s
mission, but I haven’t seen the strategy
broken down into action items.” We
will step up our efforts to break down
company-level policies and strategies into
smaller work increments.

Our intellectual capital includes our knowledge,
engineering prowess, and brand strength that
set us apart from other companies. We use theintellectual capital we have accumulated in thefield of environmental protection to develop
products and technologies as well as to create a

Respondents who answered affirmatively
increased from 40% of the total in FY 2016
to 65% in FY 2017. Employees commented:“I’ve seen a significant improvement in theworking environment this year,” and “It’sgood that everyone helps each other out
when we have a heavy workload.” Many
employees seemed to have a good working
relationship with their coworkers.

We established a research laboratory
tasked with developing recycling
technologies in FY 2017. Laboratory
members consisting of experienced
recycling engineers and former
sales staffers develop new recycled
products, design equipment,
and find ways to achieve greater
efficiency in recycling operations.

business model that fulfils social needs. We strive
toestablish a perception in people’s mind thatAMITA is a brand at the forefront of sustainable
development, which we use as a competitive
advantage in the market.

SDGs Strategy Studies Established
AMITA organizes the SDGs (sustainable development goals)
Strategy Studies group to assist corporate executives and planningstaffers in incorporating SDGs into their business strategies. All
lecturers on the roster have distinguished experience and expertisein the environment, CSR, and sustainability. The study groupprovides participants with an opportunity to enlighten themselvesin these fields and build a human network with other participants
and lecturers. We publish on our website the knowledge andexpertise gained from group sessions and use them as intellectual
capital in our business operations. Website: http://sdgs-strategy.jp/■Yes, deﬁnitely ■Yes, somewhat ■Not sure ■I donʼt think so/no response

Respondents: 107 of 151 AMITA Group full-time employees

Survey period: From November 2 through December 31, 2017

Manufacturing Capital

AMITA Group Employeesʼ Demographics and Their Use of Employee Welfare Programs
Category

Description

Number of employees
Male-female ratio
Employee
Percentage of female managers (%) *1
demographics
Average age
Turnover rate (%)
Average number of days taken off *2
Sick-child leave
Number of employees who
Working shorter hours
Employeesʼ use of took childcare leave
welfare programsChildcare leave
Number of employees who took caregiverʼs leave
Number of employees who applied for the AMITIME program *3

FY2015FY2016FY2017

147
71:29
11
39.90
6
12.24
9
5
3
1
5

156
71:29
14
37.43
6
13.07
13
6
4
1
6

161
73:27
15
36.26
8
13.13
16
9
6
1
8

*1. Reporting period changed from FY 2016 *2. Including annual paid holidays and all other forms of leave *3. Allows an employee who has
used all her or his annual paid holidays to use someone elseʼs unused paid holidays to take childcare or caregiverʼs leave
Data from January 1 through December 31 of each year for full-time employees
The average number of days taken off by employees and the numbers of employees who took childcare leave and caregiverʼs leave are counted
from January 11 through January 10 the following year.

We consider our own resource recycling plants
inside and outside Japan to be our terrestrialresource manufacturing platform, and more than
300 business partners to be our terrestrial-resource
manufacturing network, both of which constitute

AKBK Sustainable Resource
Management Centre
Becomes Operational
The AKBK Sustainable Resource
Management Centre was establishedin Malaysia as a joint venture between
AMITA and its Malaysian partner and it
has been operating smoothly. Its businessmodel, which was built on lessons welearned from our operations in Taiwan,
is intended to accelerate waste-recycling
operations in the country.
(See page 7 for details)

manufacturing capital that supports AMITA’s
businesses. We will continue to improve ourmanufacturing foundation by adding more plants,
increasing their processing capacity, and upgrading
recycling equipment.

Kyotango Resource
Recycling Plant
ClosedTaiwan Resource
Recycling Plant Posts
Impairment Loss

After equipment at our
Kyotango Resource Recycling
Plant was found to be damaged,
the regulatory authorities
of Kyotango asked us todiscontinue its operations. The
plant shut down its recycling
services in September 2017, andwas closed for good at the endof May 2018.
(See page 6 for details)

The Taiwan Resource Recycling
Plant, which became operational in
2016, posted an impairment loss on its
noncurrent assets in FY 2017. The plant
was engaged mainly in recycling siliconslurry generated in the productionof photovoltaic (PV) cells, and its
business model was adversely affectedby innovations in PV cell production,
which substantially reduced the volume
of silicon slurry generated.

Results of Business Operations for FY 2017 ● 9

Medium-Term Business Plan for 2018-2020
The AMITA Group has updated its medium-term business plan to make it more
realistic, reflecting the Group’s financial results for FY 2017 and its current financial
position. From FY 2018 through FY 2020, our top priority is to achieve greater
profitability in our businesses and make our operational foundation robust. To
achieve these two objectives, we will step up our efforts to expand our Sustainable
Stage integrated services to assist corporate clients in developing and implementing

Medium-Term Business Plan Announced February 2017environmental strategies; improve profitability in our existing services and add morevalue to them; stabilize our business outsideJapan; and transform our organizational
structure (see page 11 for details). With the implementation of the updated mediumterm plan, we strive to achieve an operating income ratio of 6.4% in FY 2020, up from
1.7% in FY 2017.

Objectives for FY 2018 through FY 2020

(In millions of yen)

FY 2017(planned)

FY 2017(results)

FY 2018(planned)

FY 2019(planned)

Sales

4,791

4,803

4,990

5,403

Operating income

110

80

200

320

Ordinary income

68

114

166

315

Net income (loss)

15

(337)

82

201

Investment for
future growth

Sales growth(In millions of yen)

FY 2017(results)

FY 2018(planned)

FY 2019(planned)

FY 2020(planned)

4,803

4,961

5,100

5,400

Operating income

80

130

250

350

Ordinary income

114

109

220

320

Net income (loss)

(337)

70

145

210

Develop and offer BIO System, integrated
services to assist regional communities
Expand recycling business outside Japan;
develop overseas market for BIO System

Develop new products

Make greater use of IoT technology

Sign up new clients

Expand client base for recycled products;
develop new recycled products

Increase business withexisting clients

Develop and offer integrated support service
Sustainable Stage to corporate clients

Enhance value
propositions

Medium-Term Business Plan Announced February 2018

Sales

Develop new businessmodelsProﬁtability
Reduce costs

Offer right solutions to address clientsʼ
needs; accumulate value-added knowledge
Enhance communication with clients
Achieve greater efﬁciency in transportationand equipment maintenance; reducereliance on purchased materials
Achieve greater efﬁciency in administrativework

Basis for implementing
initiatives outlined above

●

●

●

Provide competency-based training programs for executives and senior managers
Foster a corporate culture that embodies AMITAʼs management philosophy
Form capital and business alliances with other companies

Medium-Term Business Plan for 2018-2020 ● 10

Overview of Key Initiatives for FY 2018 through FY 2020

Note: Programs and availability of products and services shown below are current as of May 2018 and subject to change.

Development period

FY 2018

FY 2019

Revenue generation

FY 2020▶ Build stronger relationships with existing clients and▶ Adopt efﬁcient sales techniques for new products and services
cultivate business with new clients*Work with Product and Technology Development Department
Hold SDGs Strategy Studies sessions and provide
workshops for key clients
Step up inside sales via website based on a pull strategy▶ Work with other companies and experts to improve service quality▶ Close more deals on large recycling projects
Become more responsive to changes in regulatory requirements andresource prices
Assist in recycling a bulk of irregular waste expeditiously

FY 2021 and beyond▶ Reduce time from sales pitch to deal closure for consulting services●

Offer ideas to better address clientsʼ needs and work more closely with inside sales teams●

Business with
Corporate
Clients●▶ Make the process of proposing recycling services more efﬁcient by using a

sophisticated database for resource circulation*Work with Product and Technology Development Department and Manufacturing
Department●●

Release two
new services
Provide assistance in waste management using real-time communication system and sensor technology▶ Develop new products *Work with Sales Department●

Product andTechnology
Development▶ Research external business partners

Release a
new service▶ Install new equipment for recycling efﬂuent in Kitakyushu Resource Recycling Plant (to become operational by the end of FY 2018)▶ Consider business partnerships with other companies▶ Diversify client base for recycling services●

Including steelmakers (started business with asteelmaker in March 2018)●●

Start accumulating big data on waste

Release a
new service▶ Install waste-management sensors in client companies*Work with Product and Technology Development Department▶ Use IT solutions to achieve greater operational efﬁciency and compile information*Work with Product and Technology Development Department●●

Install sensors and 3D cameras to manage waste at own plants
Start uniﬁed management of receiving and shipping information related to recycling services

Seek a new source of raw materials, such as the semiconductor industry, and develop newsales channels
Develop the ability to recycle a wider variety of waste in smaller quantities▶ Install a compact biogas facility in Palau (scheduled for FY 2019 or FY 2020)▶ Start producing alternative fuel used for cement production in Malaysia●●▶ Develop services to assist corporate clients in applying IT solutions to waste management

Install new recycling equipment in the second half of FY 2018

▶ Expand offerings of recycled products and make forays into new businesses in Malaysia(scheduled for FY 2019 or FY 2020)
Obtain licenses for a wider range of waste to be processed; consider starting consulting business●▶ Establish business model built around the BIO System▶ Improve capacity utilization at Minamisanriku BIO

Regional
Systems
DesignBusiness

Release a
new service*Work with sales and back-ofﬁce departments▶ Partner with other companies to develop new products based on SlurMix® liquid fuel▶ Bring business in Taiwan Resource Recycling Plant back into shape to achieve stable operations

Business
OutsideJapan*Work with Sales Department and Manufacturing Department▶ Develop new value-added services that work with existing services*Work with Manufacturing Department

Terrestrial
Resources
Manufacturing
Business▶ Build a basis for a sophisticated database for resource circulation▶ Conduct veriﬁcation test on collecting and recycling nonfood waste*Work with Product and Technology Development Department▶ Develop compact biogas facility with high return-on-investment*Work with Product and Technology Development Department

Release a
new service*Work with Sales Department▶ Step up sales efforts for the

BIO System

Release a
new service▶ Conduct a veriﬁcation test on proposed community platform *Work closely with member companies of the Sustainable Economy Association

Release a
new service

Medium-Term Business Plan for 2018-2020 ● 11

Key Initiatives of Sales Department for FY 2018 through FY 2020
Our sales objectives and initiatives for the Environmental Strategy Design Business,
which assists corporate clients in achieving greater sustainability, are as follows:

Our value
proposition

Assist corporate clientsin achieving greater
sustainability
Provide comprehensive
supportOur competitive
advantages

●

●

●

●

Have the broadest
offerings of environmental
solutions in Japan●●

Help corporate clients increase both corporate and social
value
Help corporate clients reduce both cost and risks

Offer end-to-end support, ranging from developing
sustainability strategy to providing outsourcing services
Provide a wide variety of services, ranging from waste
management and environmental certiﬁcation to biodiversity
preservation
Having assisted more than 4,000 businesses to date
Doing business with more than 300 listed companies

Build Stronger Relationships with
Existing Clients and Cultivate Businesswith New Clients
We will continue to maintain close, long-term
relationships with 20 key corporate clients eachin the greater Tokyo area and the greater Osaka
area. This is intended to identify their explicit andimplicit needs and gain their understanding ofand trust in our corporate vision and professional
expertise.
In addition, we will step up our efforts for insidesales via our website and emails based on a pull
strategy to achieve greater efficiency in sales.

Number of inquiries received online
and at customer service desk

Objectives for FY 2020
Recycling services accounted for 80% of
our consolidated sales in FY 2017, with
consulting services and environmental
certification services representing theremaining 20%. To accelerate themomentum of revenue growth and achieve a
consolidated operating income ratio of 6.4%
in FY 2020, we will focus our efforts on:①Closing more deals on our non-recycling
services② Improving an operating income ratio of
each service by achieving greater operational
efficiency, reducing cost of sales, and cutting
down on SG&A.
③ Promoting sales of new services withhigher profit margin!
We will also seek more corporate clientsfor our outsourcing services, for which
we have made an upfront investment in
implementing IT systems, so as to improvetheir profitability and gain stable revenue.

Details for FY 2018

Underlying ThemeFY2014FY2015FY2016FY2017

67

119

232

386

Become a one-stop provider of environmental solutions forcorporate clients, ranging from recycling and consulting
services to outsourcing of environmental management

Close More Deals on Large Recycling
Projects
A large amount of waste is generated at one time
when a company recalls faulty products it sold or
when a community is struck by a natural disaster.
Companies must consider changing recycling
processes when resource prices fluctuate or when
there is a change in regulatory requirements.
We strive to keep abreast of these irregulardevelopments and be ready to provide recycling
services in a short lead time.

Work Closely with Other Companies
and Experts
In addition to assisting corporate clients indeveloping visions and strategies for achieving
greater sustainability, AMITA will work withother companies and experts having extensive
expertise in specialty fields to provide integrated,
high-quality services.

Objectives in Each Category▶ Recycling services

Work with other companies to efﬁciently close deals on
projects for recycling waste bound for landﬁll as well as adºhoc, large recycling projects.
▶ Consulting services

Become more responsive to client needs and improve
operational quality so as to reduce the time between
submitting a proposal and closing a deal and improve an
operating income ratio of high-ticket consulting services.
▶ Environmental certification assessment

Train and retain professional in-house assessors and upgradeinternal deal-closing operations for environmental certiﬁcation
services to take advantage of the growing corporate needs
for environmental certiﬁcation and increase revenue in thiscategory that delivers an operating income ratio of 30%.
▶ Outsourcing services, including Best Way to Manage

Waste and Online Waste Management System
Reduce labor hours required for providing services andrepackage existing services to achieve greater operational
efﬁciency and close more deals.

Details for FY 2019 and Beyond
Add More Value to Our Services
We will add more value to our service offerings
by developing new products and services that
better meet client needs, partnering with othercompanies, and upgrading customer service
and, consequently, will reduce the time between
making a proposal to a client and closing a deal.
We will establish a business model of offering
integrated support to corporate clients over an
extended period of time as their environmentalsolutions partner who assists them in achieving
their medium- and long-term corporate visions.

Establish Database for Resource
Circulation
We will start developing a sophisticated databasefor resource circulation in FY 2019, which willserve as a platform that provides information
about where waste is generated and how much andwho needs what recycled resources. We will use
the database to offer more efficient and higherquality recycling services to clients.

Medium-Term Business Plan for 2018-2020 ● 12

Key Initiatives of Product and Technology Development Department for FY 2018 through FY 2020
The AMITA Group established in FY 2018 the Innovation Team, which is tasked
with turning social needs into business opportunities to create new value. The teamworks with the Resource Recycling Laboratory, established in FY 2017, to improve theGroup’s profitability and help society achieve greater sustainability.

●

Optimize waste
management operations

Our value
proposition●●

Provide an infrastructure
for resource circulation

Apply IT solutions to waste management to reduce manual
work and chances of improper processing and accidents
caused by human errors.
Use IT solutions to help the national government,
municipalities, and businesses reduce their waste
management cost.
Develop a compact recycling facility and a sophisticateddatabase for resource circulation, which will serve as aplatform that provides information about where waste is
generated and how much, and who needs what recycledresources, so as to design optimum resource-circulation
operations and optimize energy efﬁciency in a community.

Objectives for FY 2020
Development projects planned for FY 2018 through FY 2020 as of this publication are as follows:

Release two new services to provide assistance in waste management using IT
solutions● Conduct a veriﬁcation test of a new product based on SlurMix® liquid fuel● Develop and implement a system to achieve greater efﬁciency in providing services
to clients and conducting administrative work

Details for FY 2018
On-Site Verification of Performanceof Waste-Disposal Contractors Using
Real-Time Communication System

Automatically Measuring Amountof Stored Waste and Notifying
Contractors for Collection

Businesses in Japan are required by law to conduct
on-site verification of the regulatory complianceby their wastedisposal contractors. We willdevelop and offer a service for reliable remoteverification, using a communication system thatenables the real-time sharing of live video andaudio feeds from the site as well as documents
between a business and a contractor.

A sensor installed in a waste storage container on
the premises of a business automatically notifies a
wastedisposal contractor of the need for collection
when the container becomes full. This service
will help businesses to achieve greater operational
efficiency and cut back on labor cost. After
conducting a trial run in our own plant, we will
start offering this service commercially by the endof FY 2018.

Who Does What in Developing New Products and Services
We give priority to the three points listed on the right indeveloping products and services to follow through with our
medium-term business plan. Accordingly, we are partneringwith other companies having the right IT solutions andmachinery development technologies, bringing in external
experts as advisers, encouraging information-sharing
among internal departments, and organizing a crossfunctional project team.

●

●

●

Design products and services that adapt tosocial changes and technologicalinnovations
Acquire and retain talent having
professional knowledge and technical skills
Establish a support organization toaccelerate the development of products
and services●

FY 2018

Innovation Team

Develop services that meet client needs and adapt totechnological innovations▶ Develop a system that streamlines internal business processes

Resource Circulation
Research Team▶

▶

Development
units

Develop and release value-added services that work with existing services
Release a new product based on SlurMix® liquid fuel● Develop services of assisting corporate clients in applying IT solutions to theirwaste management operations, and implement it in our own plants▶

Develop recycled resources that substitute natural resources
Develop a compact recycling facility necessary to establish acommunity- based resource-circulation model●

FY 2019

Build and operate a sophisticated database for resource circulation● Release several services of assisting corporate clients in applying IT solutions totheir waste management operations●

FY 2020

Sales Department●

Supporting
units

▶
▶

Manufacturing
Department▶

Operations
Department

▶

▶

▶

Identify client needs and sell new products and services
Collect information about where waste is generated and how much
Identify the needs of corporate users of recycled resources
Conduct veriﬁcation tests; provide on-site information
Provide assistance in designing a service operation ﬂow
Provide assistance in service operations

Ensure regulatory compliance; provide assistance in implementing
an IT infrastructure▶ Provide assistance in designing a business model from a ﬁnancial
perspective▶

Administrative
Department

Medium-Term Business Plan for 2018-2020 ● 13

Key Initiatives of Manufacturing Department for FY 2018 through FY 2020
The Manufacturing Department, which turns waste generated by businesses into
recycled resources that substitute natural resources, provides a source of revenue andprofit to the AMITA Group. The department focuses its efforts on improving its
profitability from FY 2018 through FY 2020.

●

Ensure stable supply ofrecycled resources

Our value
proposition●●

Perform zero-emission
recycling operations●

Supply low-cost, high-quality recycled resources that
substitute natural resources to corporate users.
Develop new recycled resources that meet the needs ofcorporate users.
Perform zero-emission recycling of industrial waste legally
to reduce the amount of waste bound for incineration andlandﬁll.
Use the network of our own recycling plants and business
partners in Japan to minimize the risk of disrupting thereceipt of waste in the event of a natural disaster or an
accident and ensure stable acceptance of waste.

Details for FY 2018
Diversify Client Base for Recycled
Resources

Install New Equipment in Kitakyushu
Plant

More than 90% of our recycled resources aresupplied to cement manufacturers. To increase
our revenue, we need to diversify the client base.
Accordingly, we initiated the development ofrecycled resources for steelmakers in 2016 andstarted to deliver them to a steelmaker in March
2018.
We expect to supply 5,000 metric tons of recycledresources a year.

We will install new eﬄuent-processing
equipment, acquisition cost of which is 123
million yen as a noncurrent asset, in our
Kitakyushu Resource Recycling Plant, which has
been seeing its production volume rising steadily.
The installation will be completed by the end of
September 2018, and the equipment will become
operational by the end of the year. This action is
expected to bring in a revenue of 20 to 30 million
yen a year, starting in FY 2019.

Details for FY 2019 and Beyond
Objectives for FY 2020
Development projects planned for FY 2018 through FY 2020 as of this publication are as follows:

Diversify the client base for recycled resources (develop recycled resources forsteelmakers)● Install and operate new equipment for recycling efﬂuent in the Kitakyushu
Resource Recycling Plant● Conduct a ﬁeld trial of sensors to measure the amount of stored waste inpreparation for commercial development● Consider business partnerships with other companies●

FY 2018

Use 3D cameras and other IT solutions to achieve greater operational efﬁciency in
our own plants● Partner with other companies to develop new products based on liquid fuel● Develop services of assisting corporate clients in applying IT solutions to theirwaste-management operations, and implement them in our own plants●

FY 2019

Propose and assist corporate clients in applying IT solutions to achieve greater
operational efﬁciency● Build and operate a sophisticated database for resource circulation●

FY 2020

Use IT Solutions to Achieve Greater
Operational Efficiency
We are considering installing 3D cameras in ourplants to measure the amount of stored waste aswell as the amount of recycled resources readyfor shipment. The use of 3D cameras is expected
to bring greater efficiency to physical inventory
counting and enable the remote management ofstorages in partnersʼ plants, thus achieving asignificant improvement in operational efficiency.

Pursue Business Partnerships with
Other Companies
Diverse technical prowess in recycling, licenses
for waste disposal in designated areas, licenses
to use port facilities, and a transportation
network, among others, are what it takes tofacilitate resource circulation nationwide. We
are considering launching a joint venture withanother company in FY 2019, which is expected
to increase the corporate value of both parties.

Unified Management of Receiving andShipping Information and SophisticatedDatabase for Resource Circulation
The Manufacturing Department will workwith the Product and Technology Development
Department to develop a system for efficient andunified management of receiving and shipping
information related to recycling services that is
scattered around in our plants and regional sales
offices. This system will be based on a commercial
cloud service and is expected to bring greater
efficiency to preparing for recycling services andadjusting receiving and shipping schedules.
In FY 2020, we will establish an information
platform that enables the designing and offeringof a resource-circulation scheme tailored to each
community by matching information about
generated waste and information about the needfor recycled resources.

Medium-Term Business Plan for 2018-2020 ● 14

Key Initiatives of Business Outside Japan for FY 2018
through FY 2020

Key Initiatives of Regional Systems Design Business for
FY 2018 through FY 2020

This section provides updates on our recycling business in Taiwan and Malaysia andon our plan to establish a resource-circulation model in Palau.

This section discusses a plan to develop and expand the BIO System, launched in
FY 2016 to provide integrated services of assisting a community in achieving greater
sustainability.

Our value
proposition

Recycling technology
developed and reﬁned in
Japan

●
●

Perform zero-emission recycling operations
Ensure regulatory compliance and fulﬁll environmental
stewardship

Our value
proposition

Optimize resource
circulation and energy
utilization in a community
Provide a community
platform

Objectives for FY 2020
Bring Business in Taiwan Resource Recycling Plant Back into Shape to Achieve
Stable Operations
We will switch sources of raw materials forrecycling from the PV cell industry to the surging
semiconductor industry to ensure stable supply.
Taiwan is the largest supplier of semiconductors in
the world, with a 21.3% share of global production.

We will develop the ability to recycle a wider
variety of waste in smaller quantities and develop
new sales channels for recycled resources.
The Taiwan Plant is expected to return toprofitability in FY 2019.

Expand Business Model at AKBK Sustainable Resource Management Centre
The Malaysian government has establisheda goal of achieving a waste recycling rate of
22% in 2020, and recycling needs are on therise across the country. We will develop new
types of recycled resources and pursue new
businesses to meet growing client needs. We
will continue to work with the Berjaya Groupto accept six times as much waste in FY
2020 as in FY 2017, when we received 3,800
metric tons of waste.

2nd half of 18●

Add a facility to produce alternative fuel used for cement
production

●
●

●
●

Establish a recycling system for resources and economy in acommunity, including waste recycling
Establish an energy-generation scheme in a community
Bring out the full potential of a community
Establish a mutually aiding, self-contained municipality
Implement and operate a community infrastructure thatencourages full resident participation

Objectives for FY 2020
Focus on Putting BIO System on Solid Footing to Achieve Profitability in FY 2021
We have been developing and operating a business built aroundthe BIO System in Minamisanriku, Miyagi Prefecture, whilepursuing opportunities to expand the BIO system into othercommunities. However, we have decided to focus, for the time
being, on putting the business model built around the BIO
System on a firm and competitive footing so that we will be able
to establish a solid track record and use it as a leverage whenoffering the system to other communities for consideration.

FY 2019

Establish a method of recycling non-food waste
in a community● Complete the development of a compact biogas
facility with a high return on investment●

FY 2020●

Establish a mechanism to revitalize acommunity

Challenges to Expanding Service Areas for BIO System

FY 2019 and FY 2020

Increase the types of waste AKBK Centre is licensed to recycle
Make additional capital investments● Consider launching an environmental consulting business inanticipation of greater competition in the recycling business●●

Establish Community-Based Resource-Circulation Model in Palau
We signed a partnership agreement with theprovince of Koror, the largest province in the
Republic of Palau, in 2016 and proposed that theprovince establish a community-based resource-●

circulation model. As an overseas extension of the
BIO System being rolled out in Minamisanriku,
Miyagi Prefecture, we expect to build and operate
a compact biogas facility in FY 2019 or FY 2020.

Overcome Risks Involving Municipalities
Operating a recycling system and managing acommunity requires the understanding, cooperation,and support of a municipality to establish a businessbased on a publicprivate partnership. As a municipal
government undergoes frequent changes in personnel,
including its head, we must have a long-term visionthat local residents embrace wholeheartedly as well
as a business model designed to deliver a recurring
revenue stream in order to push a proposal through.
The success of the business model being rolled out in
Minamisanriku is critical for its acceptance elsewhere.

Build Essential Consensus in
Community
In AMITAʼs Regional Systems Design
Business, which is based on participationof all residents in a community, local
residents need to be committed to taking
ownership and initiative. To create a senseof togetherness between AMITA andresidents, we coordinate with local schools toprovide environmental education to students,
hold town meetings and workshops withlocal residents and business owners, andparticipate in community activities.
Medium-Term Business Plan for 2018-2020 ● 15

Our Mission II
Wisdom and Life are infinite.
Thorough changes in our surroundings and the evolution of sympathy,

AMITA HOLDINGS Co., Ltd.
535 Akinono-cho, Oshikoji-agaru, Karasuma-dori Nakagyo-ku,
Kyoto, 604-0847 Japan
TEL: +81-75-277-0378 FAX: +81-75-255-4527
e-mail: press@amita-net.co.jp
Stock code: 2195 on the JASDAQ
Corporate website: http://en.amita-hd.co.jp

The formation of external and internal relationships create us.
There are no stable phenomena; the universe is in flux.
Because we are who we are,
We need to have a good relationship with infinite life.
Our hearts hold everything that humanity seeks.
What humanity seeks is to protect the dignity of our future children.
We have the passion to give this goal a form and offer it.

We declare.
To attest that life is capital to create value,
To give priority to building cyclical relationships for realizing a sustainable society,To conduct only business that contributes to increasing natural capital and relational capital, andTo protect the dignity of living systems.

Published August 2018
Published by: AMITA HOLDINGS Co., Ltd.
Publisher: Eisuke Kumano
Editor in chief: Akari Fujimoto
Copy written and edited by the Corporate Communications
and Marketing Team© 2018 AMITA HOLDINGS Co., Ltd. All rights reserved