CSR Report 2008
Corporate Social Responsibility ReportContents

Editorial Policy

1 Editorial Policy

Efforts toPrevent
Global Warming

NTN started issuing annual “Environmental Action Reports” infiscal 1999.
In fiscal 2006, the name of this report was changed to “CSR
Report” and the report was expanded to include the social andeconomic aspects of our activities so that our readers can better
understand how we work to be a socially responsible corporation.
In the “Feature Article” sections of this year’s report, we have three
examples of the role of tribology in creating products that contribute tosociety and a description of what we are focusing on in “Efforts toPrevent Global Warming.” “Globalizing our Business and Localizing
our Operations” has examples of our social contribution activitiesin Thailand. We believe that these issues are particularly importantto both our stakeholders and to the entire NTN Group itself.
The “Social Aspects” section has a separate chapter for individual
stakeholders in which we report on our important efforts to fulfill
our responsibilities toward the stakeholders.
The “Environmental Aspects” section describes our importantefforts and our progress as we work toward achieving ourenvironmental targets for fiscal 2010.
In addition, our home page contains each operating site’s
CSR efforts, their social contribution activities, as well as
environmental performance data.
We would appreciate it if you could let us know what you
think using the attached questionnaire.

Feature Article 5• Reporting period:

2 Corporate Data
3 Business Scope
5 Message from NTN Top Management

7

9

11

13

15

Feature Article 1

Improving Vehicle
Performancethrough Tribology
Feature Article 2

Encouraging
a Modal Shift with
Tribology
Feature Article 3

Solving Medical
Problems with
Tribology
Feature Article 4

Globalizing ourBusiness and Localizing
our Operations

17 CSR Management

Fiscal 2007 (from April 1, 2007 to March 31, 2008)(Some of the information in this report dates from before orafter fiscal 2007.)• Organizations Included in Report:
NTN Corporation and its primary group companies• Expected date of issue for next report:

22 Social Aspects
23 Responsibility to Customers
27 Responsibility to Suppliers
28 Responsibility to Employees
31 Responsibility to Shareholders
32 Responsibility to Local Communities

34 Environmental Aspects
35 Environmental Management
39 Targets and Results
41 Input & Output
42 Preserving the Global Environment
44 Creating a Recycling Society
45 Reducing the Environmental Impact of our Supply Chain
47 Developing Environmentally Friendly Products

48 Third-party Opinions

1

End of June 2009

• Guidelines used for Reference:“Ministry of the Environment — Environmental Reporting Guideline(2003 edition)” and “Environmental Reporting Guideline (2007 edition)”
GRI “Sustainability Reporting Guidelines 2002” andGRI “G3 Guidelines”
Future Projections“This report describes not only current and past facts, but also the future
outlook and plans of NTN Corporation and its group companies (NTN Group).
The future outlook or plans are assumptions or estimates based on information
available at the time this report was prepared, and include uncertainty. Actual
results of business activities or events occurring in the future may differ fromthe future outlook or plans described in this report.
NTN shall not be liable for such results and asks for your understanding inthis regard.”

Working to keep
the earth green forever“NTN Blue” is “Ecology Blue”
NTN’s products are found in machines with rotation and torque.
They are eco-friendly products that reduce losses
in the transmission of energy.

Corporate Data
Corporate Name: NTN Corporation
Brand Name:
Date founded: March 1918
Head Office:1-3-17 Kyomachibori, Nishi-ku, Osaka, Japan 550-0003
Representatives:
Yasunobu Suzuki, Chairman and CEO
Tatsuo Kondo, President
Number of Employees:
5,400 (stand-alone), 18,960 (consolidated)
Fiscal term: March 31st
Capital: ¥42.3 billion (as of March 31, 2008)
Net Sales:¥359.9 billion (stand-alone),¥534 billion (consolidated) (as of March 31, 2008)
Stock listing:
The first sections of the Tokyo Stock Exchange andthe Osaka Securities Exchange
Description of Business:
Manufacture and sales of bearings, constant velocity joints,
precision equipment, and other products
Number of Subsidiaries: Japan: 20; Overseas: 29

List of Primary NTN Group Companies
Japan:NTN Kongo Corporation / NTN Engineering Plastics Corporation /NTN Powder Metal Corporation / NTN Mikumo Co., Ltd. / NTN Mie Corporation /NTN Omaezaki Corporation / NTN Casting Corporation / NTN Kinan Corporation /NTN Kamiina Corporation / NTN Fukuroi Corporation /Hikari Seiki Industry Co., Ltd. / NTN Bizen Corporation / NTN Hakui Corporation /NTN Tado Corporation / NTN Bearing Service Co., Ltd. / Kyoei NTN Co., Ltd.

Asia:
NTN MANUFACTURING (THAILAND) CO., LTD. /NTN-NIDEC (THAILAND) CO., LTD. / NTN (China) Investment Corporation /Shanghai NTN Corporation / NTN-NIDEC (Zhejiang) Corporation /Guangzhou NTN-Yulon Drivetrain Co., Ltd. / NTN-RAB (Changzhou) Co., Ltd. /NTN Manufacturing India Private LTD. / NTN BEARING-SINGAPORE (PTE) LTD. /NTN CHINA LTD. / NTN BEARING-THAILAND CO., LTD. /NTN BEARING-MALAYSIA SDN.BHD. / NTN KOREA CO., LTD.

The Americas:
NTN USA CORP. / NTN BEARING CORP. OF AMERICA /AMERICAN NTN BEARING MFG. CORP. / NTN-BOWER CORP. /NTN DRIVESHAFT, INC. / NTN-BCA CORP. /NTN BEARING CORP. OF CANADA LTD. /NTK PRECISION AXLE CORP. / NTN-SUDAMERICANA, S. A.

Europe:NTN Wälzlager (Europa) G.m.b.H. /NTN Kugellagerfabrik (Deutschland) G.m.b.H. /NTN TRANSMISSIONS EUROPE / NTN BEARINGS (UK) LTD. /NTN FRANCE / S.N.R. ROULEMENTS

EuropeAmerica

Asia

Head office
Production site
Sales site

Asia and
other

Asia and
other

6,958

71.4

Japan

13.4%

Europe36.7%

Numberof Regular
38.1%
Employees(Consolidated)
Japan(March 2008)

Europe 6.5%

1,223

18,960

7,228

18.7%

The
Americas

3,551

94.2

17.6%

Percentage
of Sales(Consolidated) 44.4%(March 2008)

534.0(billion yen)The
Americas

24.6%

Japan

236.9

131.5

2

Sales (Consolidated)(Billion yen)

Business Scope

357

388

435

Operating profit

534

484

(Consolidated)(Billion yen)

47

50

2006

2007

38

33
25

2003

2004

2005

2006

2003

2007

2004

2005

Reducing energy losses and preserving
the environment through tribology
Tribology is the study of interacting surfaces. It can be used to help control friction, wear,
and lubrication to make sure things move smoothly.
Bearings are parts with smoothly moving surfaces that reduce friction and reduce energy
consumption, which truly makes them eco-friendly products.
NTN technology is used in numerous industries to realize an ideal level of smooth motion.

PCs and hard disksWind power
generation
Wind power is a clean form of energy
without CO2 emissions.
In order to achieve harmony with thenatural environment and to help solve theglobal warming problem, we arecontributing to the spread of wind power
generation by providing bearings for wind
power generators.

Our fluid dynamic bearings are used in
the hard disk drives (HDDs) integrated
in products such as PCs and harddisk recorders – products that havebecome integral parts of everyday life.
The bearing itself contains
lubricating oil and has excellent
running accuracy and minimal noise,making it a preferred choice for HDD
motor bearings.

Fluid dynamic
bearing

Bearing forrailroad journal
applications
Cylindricalrollerbearing

RailcarsInsulatedbearing for
generators

Spherical roller
bearing formachinemain shaft

3

NTN bearings are used in alarge number of passenger
and freight cars in Japan
including the Shinkansen (thebullet train), as well as in railcars
outside of Japan.
Rail transport is getting a newlook worldwide as an environmentalfriendly mode of transportation from thestandpoint of preventing global warming anddemand for railcar bearings is on the increase.
In order to ensure the safety of large numbersof people and large quantities of cargo transported
by railcars, NTN uses a special management
system to maintain and improve quality.

Shareholders’ equity(Consolidated)(Billion yen)

143

2003

158

2004

183

2005

203

222

Total assets (Consolidated)(Billion yen)

460

2006

2007

2003

517

2004

562

2005

612

Number of employees

629(100 people)

2006

2007

190

173

(Consolidated)

146

119

128

2003

2004

2005

2006

2007

Precision equipment, etc.

30.5

5.7%

30.9%

Sales
(Consolidated)by segment(March 2008)

Constant
velocity joints

534.0(billion yen)

165.1

63.4%
Bearings

338.4

Automobiles
NTN products are used widely in critical
automotive applications – from the engine
and transmission to the drivetrain andelectronic devices.
In recent years, the automotive industry
has been striving to improve the safety andenvironmental performance of vehicles tomake them better for people and better forthe earth.
To meet these needs, NTN has beendeveloping our technology to enhancefunction, to improve precision, toreduce weight, and to devise newprocessing technologies, aswell as to find ways tofuse these together
into composite
technologies.

Office equipment
NTN supplies small bearings andplastic products to office equipment
manufacturers.
This industry started environmental
preservation efforts early, and NTN has
been responding to their needs byeliminating and reducing
environmentally hazardous materials byenacting internal standards.
We will continue to create
environmentally friendly products.

Hub bearing
with a high-resolution
rotational sensor
V-series
hub joint

Industrial machinery(e.g. construction machinery)
Our bearings are highly regarded for their high quality andfor NTN’s ability to respond flexibly to increases indemand. They are used in a wide variety of areas including
construction machines, which are critical from thestandpoint of infrastructure maintenance,
mining machines, and industrial robots,
which require a high degree of precisionand speed. They are also used inmachine tools and medical devices.

Angularcontact ballbearing for machine
tool spindles

Thin-section
radial ball bearing

Bearing withhigh-resolution
rotational sensor

4Message fromNTN TopManagement

Transforming ourselves into a company
that can be relied upon to excel
Working to create growth through creativity
and achievements with CSR as a coreelement of management
NTN implemented a new medium-term business plan,“Growth through Creativity and Achievements 21” in fiscal 2007.
“Growth through Creativity and Achievements” means
creating new Enterprise Value through continued growth
and realizing significant achievements.
“Growth through Creativity and Achievements 21”
aims to improve the efficiency of our assets by seeking
faster returns on past investments as well as to use
additional investment to achieve the continuous growth ofour business. Creating value is a critical issue for us.
NTN regards CSR (corporate social responsibility) as a“core element of management.” With “Growth throughCreativity and Achievements 21,” we will work to increasevalue for all of our stakeholders including customers,
shareholders, suppliers, employees, and local communities.
In fiscal 2007, we placed a special emphasis on
corporate ethics and regulatory compliance, and we
focused on these themes in our educational programs. At
the same time, through efforts such as interacting withlocal communities and preserving the environment, wewere able to get together with our stakeholders andincrease our dialogue in order to fulfill our social
responsibilities as a reliable corporate citizen.
In addition to creating an internal control system, we
set out a “Risk Management Policy” to thoroughly define
preventive measures and crisis countermeasures so that
we can mitigate the various risks to the survival of ourbusiness. We also established a risk management
committee to strengthen our risk management.

Responding to the expectations of
all stakeholders including customers,
shareholders, suppliers, employees,
and local communities
NTN regards the trust of all stakeholders – such as
customers, shareholders, suppliers, employees, and local
communities – as a key source of our Enterprise Valueand we will work to meet all of their expectations.
Customers: To provide top-quality products in a timely
manner every time, we work hard to get an accurate
understanding of our customers’ needs, to offer new,value-added products that are ahead of the curve, and to5

improve customer satisfaction.
Shareholders: Through proactive investor relations, we
explain our business strategy and our investments anddecisions, which are based on our Corporate Philosophy
to further maintain and develop our business.
Suppliers: We work to strengthen strategic
partnerships, to develop quality control systems based on
supply-chain management, and to carry out green
procurement that is environmentally friendly.
We will develop our people in conjunction with our
suppliers to further improve our skill level – our motto inthis respect is “coexistence”.
Employees: Based on the belief that “MONOZUKURI(manufacturing) means HITOZUKURI (developing theindividual),” we constantly carry out practical,
worksite-based HITOZUKURI measures to ensure thatengineering and technical skills are passed down.
In addition to maintaining a safe and pleasant work
environment, we operate a “Dream Workshop” that helps
handicapped workers achieve independence and we areengaged in creating systems and arrangements in which
women can take an active part.
Local communities: We are strengthening our
relationships with local residents both in Japan andoverseas by promoting greening activities around
operating sites, by working to beautify environments, andby promoting social contribution activities such as art,
culture, and sporting events.

Customers
Suppliers

Shareholders

Employees

Government
Creating aninternal control
systemLocal
communities

Environment

Thoroughcompliance

Strengthening
risk
management
systems

A company that can be relied upon to excel

Working to create the ultimate
environment-friendly bearing – one madewith light and windemployees’ safety awareness through experiencing andrecognizing hazards hiding in equipment and work.

The entire NTN group is working to solve environmental
problems.
Bearings and constant velocity joints are eco-friendly
products that reduce friction and energy consumption.
In our R&D, we are working to eliminate the use of
substances of environmental concern and to develop
bearings that use biodegradable materials that return tonature and are better for both people and theenvironment.
In terms of manufacturing, we have introduced solar
panels and wind power generators to effectively use naturalenergy and we are developing compact oil-free equipment,but our ideal bearing is made with light and wind.
We have greatly reduced the amount of waste byusing the grinding swarf briquetting machine that wedeveloped. We contribute to creating a recycling society
by providing this machine to other industries and companies.
Also, to support the establishment of environmental
management systems, we assist suppliers to become
certified in “EcoStage” (a private environmental
certification), which is a preliminary step toward ISO14001
certification. Our environmental efforts also include
distributing a Household Eco-Account Book to ouremployees so that they can increase awareness andenergy conservation at home.

Working to create growth through creativity
and achievements with a vision of
the universe
Realizing growth through creativity and achievements
includes “going beyond earthbound thinking and looking
at our earth as an island in space”.
This vision is related to the idea that “employees
cannot be stuck in a rut with the way they do things andsee things,” which is one point in “Growth throughCreativity and Achievements 21.”
By having each employee think for themselves to
produce results and grow, we are providing increased
value for all stakeholders.
We hope for continued understanding and support fromall stakeholders.
June 2008

Going back to basics in MONOZUKURI to
further improve customer satisfaction
Recently, there has been a spate of corporate scandals
involving product recalls and fake products. Society as awhole is looking at corporations and what we do withmore intensity than ever before.
NTN believes that quality is the most important issue
when it comes to increasing Enterprise Value, and wework to create products that meet and exceed the
expectations of our customers. Our Design,
Manufacturing, and Sales Departments believe,
respectively, that design determines everything, that
quality must be built in, and that customer needs have to
be understood right away. All three departments act
accordingly to further improve customer satisfaction.
Also, we have instituted the NTN Meister system andother HITOZUKURI measures at our production worksites
in order to pass on engineering and technical skills to thenext generation. They have worked to comprehensively
strengthen our MONOZUKURI capacity in terms of ourquality control and equipment R&D capabilities. In
addition to these efforts, we have put in “hazard
experience corners” at our primary operating sites to raise

Yasunobu Suzuki
Chairman and CEO

Tatsuo Kondo
President

6Improving Vehicle Performance through Tribology

S

Feature Article 1

Muddy water
test results

Torque test
results(Muddy water cycles)(Rotational torque)

In recent years, automotive development has been
spurred on by an increased demand for higher fueleconomy. Bearings, which have always beenused to limit rotational friction, need to have lesstorque than ever before (low rotational resistance).
Over 100 bearings are used in a single
automobile; reducing the torque of the hub bearings
supporting the vehicle wheels is particularly effective
for increasing fuel economy. To satisfy this demand,
NTN developed the super-sealed, low-torquehub bearing.
Approximately half of the rotational resistanceof a hub bearing occurs in the seal that seals off
the gap between the inner and outer rings. Also,
conventional wisdom held that reducing the sliding
resistance of the seal reduced its performance,
allowing the entry of foreign matter, such as
muddy water.
To solve this problem, NTN created a“low-friction rubber” formulated for optimum
elasticity as a seal material, and used this material

Good sealing with low torque

15% less
100%
more

Seal

on

ve
pr ntio
od n
uc al
t
D
ev
pr elo
od pe
uc d
C
t
on
ve
n
pr tio
od n
uc al
t
D
ev
pr elo
od pe
uc d
t

BearingCuper-sealed, low-torque hub
bearings: Lower fuel consumption
achieved with a 15% decreasein frictional resistancein the new product. The radial lip, which comes incontact with the inner ring in conventional
bearings, was changed so that it does not makecontact, allowing the torque during operation in
the new product to be reduced by 15%.
In addition, increasing the number of side lips
to two has halved the entry of muddy water,increasing the durability of the bearing.

H

ub Bearings with high-resolution
rotational sensors: Significant
improvement in ABS performance

Automobile safety performance is more important
than ever.
Anti-lock Brake System (ABS) improves
braking by measuring the speed of theautomobile and the rotational speed of thewheels to control the brakes so that the wheels
don’t lock up during sudden braking. Improved
ABS performance is also being sought after.
Our company has been ahead of the curve
since the 1990s, when we started the developmentof hub bearings with an internal sensor formeasuring the rotational speed of automobile
wheels. In 2007, we entered into

Hub bearings with low friction and an integrated
high-resolution rotational sensor makevehicles that are more fuel-efficient,safe, and environmentally friendly
NTN hub bearings, which contribute to lower fuelconsumption and safety, hold a leading shareof the world market.

“V-series hub joint”, reducing
weight in terms of integration of
constant velocity joint* and hub
bearing.

Structure of super-sealed, low-torque hub bearings
Flange for mounting on wheel

Outer ring

Seal
Conventional
product

Newly-developed
product[High sealing ability]
Double side lip

Side lip
Inner ring
Hub ring

7[Lower friction]

Radial lips

• Optimization of radial lips
• Use of low-friction rubber material

High-sealing, low-torque hub bearing

a business tie-up with the French bearing
manufacturer SNR and developed a hub bearing
with a high-resolution rotational sensor.
The rotational speed of the wheels is measured
using magnetic encoders that are mounted withalternating polarity at evenly spaced intervals
around the rotating ring of the bearing. A magnetic
sensor detects the magnetic field of these encoders.
This sensor was developed by SNR, a world-classsensor company, and has more than 40 times theresolution of conventional sensors.
By combining these delicate parts with NTN’s
sealing technology to protect them from harshexternal environments, it is possible to rapidly
predict unsteady behavior that occurs fromdifferences in the rotational speed of the wheelson each side of the vehicle, thereby significantly
improving the ability of vehicles to avoid hazards.
Also, this product allows subtle movements of thevehicle to be detected, so it is expected to be used

in applications such as automatic driving.

C

Evolution of hub bearings

ontributing to the easeof automobile assembly

Ease of assembly is also important in vehicles.
NTN has been working on integrated hub bearing
units (integrated multiple components) for a long time.
Until the 1970’s, bearings for supporting axles invehicles were typically made up of two parts aligned.
At the time, we created the first-generation integrated
bearing that combined the two bearings into one unit.
Next, we created the second-generation unit thatcombined the wheel mounting flange or the vehicle
mounting flange. In the early 1980’s, we created andstarted mass production of the third-generation
integrated unit with both of these mounting flanges.
Since then, we have developed and have started
commercializing the “V-series hub joint,” reducing
weight in terms of integration of constant velocity
joint* and hub bearing.
Our company will continue to work to improvevehicle fuel economy, improve safety, reduceweight, and reduce costs.

1st generation

2nd generation

3rd generation

V-series hub joint

velocity joint: Joint portion of driveshaft,* Constantwhich transmits engine power to wheel.

Structure of hub
bearing with ahigh-resolution
rotational sensor

Hervé Brelaud
Vice-Presidentof Engineering, SNR

High-resolution
rotational sensor
manufactured by SNR
Magnetic
encoder

Hub bearings with a high-resolution
rotational sensor

Cooperative Development NTN-SNR: Bearing“A la carte” for the World
Automotive has entered into a new era of maximum safety for passengers,
highest reliability and environmental friendly technology.
In many fields this must lead to technical quantum leap.
In that spirit NTN and SNR join their research forces to develop a newgeneration of wheel bearings combining the best achievable performancefor conventional function (torque reduction, life duration, precision) and mostadvanced mechatronics features as high resolution speed measurement andreal time wheel load sensing.
These new technologies will offer a breakthrough in Global Chassis Control(GCC) and Powertrain efficiency (Engine management, Traction Control).
By union of both NTN and SNR technological assets, by sharing a common
vision, we aim to develop Human and earth friendly products and solutions.
April 2008, NTN obtained 51% of the outstanding shares of SNR, which is* Innow
an NTN subsidiary.

8Encouraging a Modal Shift with Tribology

D

Feature Article 2CO2 emissions by modeof transportation(g-C/tonk)

3,271

1,949

1/150

the emissions
1,480 of small trucks
for private use

830

s
ay
lw

R

ai

fo Sm
rp a
riv ll tr
at uc
e k
fo Sm use s
rb a
us ll v
in eh
es ic
s le
us s
e
Ai
rt
ra
ns
po
rt
fo S
rb m
us al
in l tr
es uc
s k
us s
e

21

Source: Joint meeting materials from Council
on Domestic Countermeasuresfor Global Warming

ouble the product life withincreased speed / Three featuresthat control wear by controlling
temperature increases

With an increasing focus on a modal shift awayfrom trucks and airplanes to transportation withless energy usage and CO2 emissions, railtransport has recently become a star alternative.
That being said, rail transport competes withother modes of transport for customers andhas a growing need to reduce costs andincrease speed.
NTN has been supplying critical parts for trainsin the form of bearings for the main motor, bearings
for the drive system, and bearings for axles.
In 2006, responding to the needs of society
and requests from railroad companies, wedeveloped the “New High-speed Bearing Unit for
railroad journal applications” (new RCT* bearing).
We increased the durability of the part, doubling
its life. We were also successful in lowering therunning costs by extending the maintenanceperiod and ensuring safety even at high speeds.

Three new features were usedin this product to double its life

The RCT bearing is a sealed double-row tapered
roller bearing, and is the newest version of thetapered roller bearing for railroad journal applications.
The first feature was replacing the steel cageused to evenly spread out the tapered rollers with
one made out of a special plastic. This controls
the generation of particles from wear, allowing
smooth rotation to continue. It also increases
shock resistance.
The second feature was adopting a spacer that
reduces the wear caused by the slight friction
between the inner ring and the end cap.
By putting in a rubber lip, we have prevented
the particles that are worn off from going inside
the bearing.
The third feature was an improved seal shape.
These improvements have allowed heat generation
to be controlled while maintaining the seal,
decreasing the temperature rise of the seal by
20°C at a speed of 345 km/h in comparison withconventional products.

Extending the life of railcar
bearings to make rail transport fasterand more environmentally friendly
Rail transport is a high-volume mode of transportation that has a low environmental impact.
NTN technology contributes to its spread and development in Japan and around the world.

Participating in the world’s largest
rail transport trade show
Since 2004, NTN has participated in the world’s
largest rail transport trade show.
We plan to participate in 2008 as well.

9M

eeting the needs of railways
around the world

The new RCT bearing allows the maintenance interval
period to be extended from once every 450,000600,000 km to once every 1.2 million km – doubleinterval of the conventional product.
This bearing is intended not only for the Japanesemarket but also the European market, where there isheightened concern for environmental problems andwhere the railway network is growing with an increased
emphasis on high-speed rail transport. We are aiming
the RCT bearing at other parts of Asia as well, particularly
China, where there is a great deal of infrastructure
growth and where high-speed rail transport is expanding.
This new RCT bearing is being used already inmedium-speed trains in China and commuter trainsin North America.
Rail transport is a high-volume mode oftransportation with a low environmental impact. NTN
is working to reduce costs, support increased speeds,
and ultimately contribute to a world-wide modal shift
with our products.

Bearings for driving gears
This is used in the gearbox,
which transmits the powerfrom the motor to the shaft.

* RCT bearing: Rotating end cap tapered roller bearing.

Bearings for wheel axles
These are built into the wheel axles,
which bear the weight of the railcar.

Insulated bearings for mainelectric motors
These are installed to prevent
electric pitting

New High-speed bearing unit
(new RCT ® bearing) for railroad
journal applications

Ryutaro Oka

By putting a spacer between the inner ring and end
cap, the slight friction between them was reduced.
Also, a rubber lip prevents wear particles from going
into the center of the bearing.
Inner ring

End cap

Rubber lip

Brass sheet

New type of seal
Plastic cage

Rubber lip
SleeveSeal ring

Global Application Manager (Railroad)Industrial Sales Headquarters

NTN achieves both increased speed andan extended maintenance periods
Currently, high-speed trains (more than 300 km/h) are being developed
all over the world. There is a demand for cost reductions by extending
the maintenance period for these trains. To meet both of these needs,
NTN developed the new RCT bearing for railroad journal applications.
Our new RCT bearing builds on the high-speed technology that wehave accumulated with the bearings for the Shinkansen (Japan’s bullet
train), and by incorporating a newly developed plastic cage with afretting-resistant sheet, allowing us to meet not only standards in Japanbut also the EN standard used by both Europe and China.
We will continue our R&D for improving the reliability of bearings,
which are one of the most important parts found on a train.

10

Solving Medical Problems with Tribology
Feature Article 3

Causes of death (2005)(per 100,000 people)

250

Cancer 30.1%

200Heart disease

150

16.0%

100

Stroke 12.3%
Pneumonia 9.9%

50

Accidents 3.7%

0
1985

1995

Liver disease 1.5%
Tuberculosis 1.3%

2005

Ministry of Health, Labor, and Welfare
2005 Vital statistics overview

Aventricular assist device is a rayof hope for patients with chronic
congestive heart failure

Heart disease is a major cause of death in developed
countries, and in Japan, it is one of the top threecauses of death along with cancer and stroke.
The most common and difficult heart disease totreat is congestive heart failure, where the pumping
ability of the heart decreases, and blood does notreach the entire body.
The most effective treatment is a hearttransplant, but there is always a shortage of organ
donors. The ray of hope for patients sufferingfrom this condition is circulatory assistance witha ventricular assist device.

In 1991, NTN developed a revolutionary
blood pump that uses a magnetic
force to levitate an impeller

Previously, blood pumps for artificial hearts were
pulsatile pump that simulated the motion of aheart, but this type of heart was expensive and it
was difficult to reduce its size. In recent years,
continuous-flow blood pumps, which have fewer
parts and can be miniaturized, has been receiving

attention as an option that increases the QOL(Quality of Life) of patients.
However, these continuous-flow pumps also
have drawbacks. When the bearings supporting
the impeller that is used to pump blood all overthe body and seals are in the pump chamber,these parts interfere with the flow of blood,
increasing the chances of blood clots. In addition,
the friction of the bearing crushes the cell
membrane of the red blood cells, which
generates hemolysis.
NTN focused on this problem and applied themagnetically levitated bearing technology for theuse in the clean rooms used in a semiconductor
manufacturing process where not even fine particlesof dust are permitted. In 1991, NTN teamed up withProfessor Teruaki Akamatsu (currently a Professor
Emeritus at Kyoto University), a world authority on
assistive artificial hearts, to develop a “centrifugal
blood pump with magnetic levitation technology
for ventricular assist devices.” In this revolutionary
system, the position of the impeller is detectedwith sensors and the impeller is levitated withelectromagnets, allowing the bearing and seal tobe completely removed from the pump chamber.

Using our unique magnetic bearing technology
in a ventricular assist device
for transplant patients
NTN’s non-contact bearing technology is usedin the blood pump of an artificial heart.

Bearings play a part in the medical fieldin CT scanner technology
NTN not only supplies specialized parts for artificial
hearts, but also for CT scanners, which are important
medical diagnostic tools.
There are high expectations for NTN bearings as
an important part underpinning smooth motion in CT
scanners with increased speed and diversification.

Structure of a centrifugal blood pumpwith magnetic levitation technology
for ventricular assist devices
OutletImpeller
Motor

Position sensor

Housing
Inlet

ElectricalmagnetPermanent
magnetic

11

Magnetic metal

This innovation solved the problems withconventional blood pumps.

S

ales of our implanted artificial hearts
start in Europe; Clinical trials startin the US and Japan

After that, we started a partnership with Kyoto
University and TERUMO CORPORATION, a major
manufacturer of medical equipment to researchand develop a implantable artificial heart that lasts
for long-term patient support. The three partners
created various types of prototypes and carriedout animal tests in order to demonstrate that thisnon-contact bearing technology can provide highdurability and resist blood clots. We also confirmed
through durability testing that the levitation of theimpeller remained stable even when subjected tointense vibration during exercise.
After that, we carried out two types of animal
testing – one using an external device and one with
an implanted device – and we achieved the world
record for the longest continuous operation of acontinuous-flow pump. TERUMO CORPORATION,
moved their R&D facilities to the US in 2000, andclinical trials started in Germany in January 2004.
Thirty-three patients used our products and we aremonitoring their effectiveness and reliability. Thenin August 2007, the devices became available inEurope as the Dura Heart, and clinical trials arealso planned in the US and Japan.
We will continue to improve our magnetic bearing
technology to improve the quality of life for patients.

Saving patients with severe heart failure – the dreamthat we shared with NTN became the key to success

Chisato Nojiri, M.D., PhD,

Senior Executive Officer,
Terumo Corporation
Chairman & CEO, Terumo Heart, Inc.
Awarded “2008 Woman of the Year” by
the women’s magazine Nikkei Woman.
(Japanese technology goes out into the world:
The development of a durable and commercially viable ventricular assist device)

The development of artificial hearts
requires various fundamental technologies(including material, electrical, mechanical,
and software technologies). The Dura Heart
is a device that was made possible bybringing together NTN’s strengths withthose of Terumo, but neither company has
ever had a product that took over 10 years
to develop and bring to market.
A variety of technologies (material,
electricity, machine, and software, etc.) arenecessary for the development of theartificial heart.
In 2007, we were able to commercialize
this product in Europe. We believe that it is
our mission to provide patients sufferingfrom heart failure all over the world witheven better artificial hearts. We plan to add
more improvements to make this hearteasier to use for patients and to work on the
2nd generation Dura Heart with NTN.

We joined forces with NTN engineers, who brought superb
technical skills to the table to develop this product
When I first saw the magnetic levitation pump on asheep, I had my doubts about whether we could reallymake it compact enough to implant.
After that, however, I saw firsthand the technical prowessof NTN and my doubts disappeared.
Even though we have different specialties, we were
all able to learn from one another, and it was great to beable to develop this product with a sense of unity.

Takehisa Mori
Research Manager, R&D Center
Terumo Corporation

12

Efforts to Prevent Global WarmingN

Feature Article 4Power generation using
natural energy at NTN
Cumulative power (kW)
Wind

317

Solar

290
214

Cumulative
natural energy

61
6

7

1

10

190

75
51
20

55
24

27

2003 2004 2005 2006 2007

(Fiscal year)

TN is using natural energy sources
such as solar power and wind power
at its plants

In 2007, NTN Group sales increased by 10.3%
over the previous fiscal year, resulting in a greaterlevel of production. With the deepening global
warming crisis, however, we could no longer ignore
the increase in CO2 emissions from increases
in production volume. It was for this reason that
we focused on large-scale energy reduction
improvements and productivity increases in theplant, and we were able to restrict our total
increase in CO2 emissions for fiscal 2007 to
3.8% over the previous year (See p. 42).
We actively use wind and solar power generation
to help us reduce CO2 emissions. To date, we haveinstalled solar power generators (6 units), wind power
generators (9 units), and hybrid generators that
produce both wind and solar power (13 units) for a
total output of 317kW. This means that we generate
350MW-h per year (in fiscal 2007), corresponding
to a decrease of 160 tons/year of CO2 emissions.
We are planning to install large-scale solar

and wind power generators at new plants andbuildings that are completed in fiscal 2008.

N

TN promotes energy conservationin employee households with the“NTN Household Eco-Account Book”

We estimate that approximately 83,000 tons of
CO2 is emitted by the households of NTN Group
employees*1. This is more than 20% of the CO2
emissions from all the plants in the group, so we
regard reducing the CO2 emissions in employee
households as an important issue.
Because of this, the NTN Group issued an“NTN Household Eco-Account Book*2” toapproximately 10,000 employees and temporary
employees in Japan, and we called on them touse it starting in January 2008.
The Household Eco-Account Book is used torecord how much electricity, gas, water, kerosene,
and gasoline are used (and their CO2 equivalents)
and to find the costs of these items every month.
By comparing numbers with the previous monthand the previous fiscal year, employees can get

Protecting the earth is the most important
issue Working together to reduce
CO2 emissions at work and at home
NTN is working as a company to reduce CO2 emissions
by using natural energy, and we urge each one of ouremployees to be environmentally sensitive at home.

Examples of energy
conservation improvements
In August 2007, Kuwana Works (Kuwana
City, Mie Prefecture) changed the 185
mercury lamps in its heat treatment plant
to metal hydride lamps, reducing the yearly
CO2 output by 185 tons a year.

Wind power generator at
NTN Mie Corporation
Power generated:
3.5 MWh/year
Reduction in CO2 emissions:
Approx. 3 tons/year

Also, in January 2008, NTN Casting Corp.
(Izumo City, Shimane Prefecture) replaced
its compressors with the latest models inorder to conserve energy, and introduced
inverter-based fluorescent lamps to improveillumination efficiency.
These efforts resulted in a reduction of
690 tons of CO2 a year.

Wind power generator at the
Kuwana Export Distribution Center
Power generated:
17 MWh/year
Reduction in CO2 emissions:
Approx. 8 tons/year

13

Solar power generators at
NTN Mie Corporation’s Plant No. 2

Wind power generator at
NTN Fukuroi Corporation

Power generated:
102 MWh/year
Reduction in CO2 emissions:
Approx. 46 tons/year

Power generated:
7 MWh/year
Reduction in CO2 emissions:
Approx. 3 tons/year

an idea of the energy their households consume
regularly, allowing them to become more aware ofconserving energy. It may take some time to getused to filling in the book, but energy conservation
also leads to monetary savings, so we want tofirmly establish the relationship between being
good to the environment and better living.
We also provide the Household Eco-AccountBook to retailer/retail stores and suppliers whowant to try using it at their companies.
We will continue to monitor the Household
Eco-Account Book and how much it is being usedin order to increase awareness of householdenergy conservation.

O

ur target is to emit 10% less CO2
in fiscal 2010 than in fiscal 2007

Until now, the NTN Group has been measuring
CO2 emissions per unit of production – CO2
emissions divided by the value-added production(which is calculated by subtracting the variable
manufacturing costs from the sales-based
production volume). Our target was to achieve a

25% reduction overfiscal 1997. However, because
the Kyoto Protocol calls for reductions in total
CO2 emissions, we have decided to set a target for
total emissions this fiscal year.
In particular, we are aiming to reduce our CO2
emissions to 317 thousand tons of CO2 in fiscal 2010
(A 10% reduction over fiscal 2007)*3. To achieve
this target, we will carry out fundamental energy
conservation improvements at our primary operatingsites and actively use natural energy sources.
We will also implement Japanese energy
conservation technology at our overseas operatingsites in order to reduce the NTN Group’s global CO2
emissions. Global warming is the most important
issue facing humanity.
The NTN will work in concert to do what we
can to address this issue.

for estimation: (Approx. 8.3 tons
*1 Basis
CO emitted/household) x
2

Approximately 10,000 households =Approximately 83,000 tons.

Eco-Account Book:*2 Environmental
Created by the Environmental Agency(Currently the Ministry of theEnvironment) in 1996; it was distributed
to whomever wanted a copy.
By quantitatively determining the amountof electricity and gasoline used by ahousehold, it becomes possible tounderstand how much CO2 is emitted
by a household.

emissions: Calculated based on*3 COeach power company’s target CO22

emissions factors (per unit electric
power) for fiscal 2010.

Just copy the monthly
amounts from yourelectric or gas bill into
the Household
Eco-Account Book.

Tomoyoshi Izutsu
Automotive Engineering
Department,
Automotive Sales Headquarters

Manami Izutsu
Needle Roller Bearing
Engineering Department,
Automotive Sales Headquarters

Since we started using the Household
Eco-Account Book, our children havebecome more interested

Solar power generators at
NTN Kamiina Corporation
Power generated:
55 MWh/year
Reduction in CO2 emissions:
Approx. 25 tons/year

After seeing a TV show about environmental problems,
and thinking that each one of us must work a bit harder
to preserve the environment, our family decided to use
the Household Eco-Account Book.
It’s been several months since we started. We haven’t
seen any numerical changes, but the children have becomea bit more interested, and they help us fill out the pages.
We turn off the lights in rooms we’re not using, and we
don’t let the water run when we’re brushing our teeth.
We have started to put into practice energy conservation
in my home by not using energy we don’t have to use.
For example, we always make it a point to turn off the lights.
The Household Eco-Account Book was a good opportunity
for our entire family to start conserving energy.

14

Globalizing our Business and Localizing
our Operations
Feature Article 5Operations in Thailand, which started
with 5 people, have now grown
to over 4,000 people

When NTN first established the operating site in
Thailand in 1974, motorization had yet to reachthis country. Let’s go back to when we
established NTN BEARING-THAILAND CO., LTD.
in the capital, Bangkok. At the time, there were
only 5 people, and we sold bearings to textile
plants and retail stores as spare parts forrepairing equipment.
After that, Thailand started industrializationand developed an auto industry so vibrant that
it was called the Detroit of the East. NTN
established NTN MANUFACTURING (THAILAND)
CO., LTD. (NMT) in 1998 to manufacture
automotive products and established
NTN-NIDEC (THAILAND) CO., LTD. (NNTC) to
manufacture precision components. Bothcompanies were established in Rayong
Province. These three companies have a totalof 4,000 employees.

Listening to our Thai employees to createa safe, comfortable workplace NTN’s
fundamental idea is to respect people

At NTN BEARING-THAILAND, 97% of the 65
employees are Thai, and 83% of management
is Thai, and actively hire local staff. Management
looks at and responds to the wishes and opinionsof our local employees received through theworkplace suggestion box.
At NNTC, which produces the fluid dynamic
bearings used in IT devices, over 99% of the 1,800
employees are Thai, and 50% of the management
is Thai. In terms of safety management, we regularly
hold meetings related to safety and hygiene, and if
an accident does happen, all managers, staff, andline representatives come together to discuss
the problem to ensure employee safety. Also,
we value the feedback from employees submitted
by the welfare committee, which is made up of
employee representatives and management,
and we are working hard to create a pleasantwork environment.

Reports from our three Thai affiliates
Working to create a company of thelocal people, by the local people,
and for the local people
The NTN Group is a truly global company; it is made up 49 companies
around the world with over 18,000 employees.
At the same time, we are working to create companies
that are truly integrated into local societies.

Working to preserve the environment
and prevent disasters by planting
mangrove forests
In March 2008, NTN BEARING-THAILAND
employees, families, and friends went to SamutSongkhram province, southwest of Bangkok, tohelp local residents plant 4,000 mangrove seedlingsin 16,000m2 of marshland. Mangrove forests are atreasure trove with many small animals and also
help to protect land in the monsoon season. We will
watch over this mangrove forest as the seedlings
grow and rejuvenate the marsh.
NTN BEARING THAILAND
staff helping out with
the Southeast Asian GamesNTN BEARING-THAILAND
participating in Children’s
Day activities

15

At NMT, which produces automotive bearingsand constant velocity joints, 99% of the 2,000
employees are Thai, and key people are sent fromThailand to the Mother Plant in Japan for training
in order to raise the technical skill level. We also
regularly carry out workplace training related tosafety, hygiene, and environmental preservation.
In May 2006, our energy conservation, industrial
waste reduction activities, and welfare initiatives
were recognized by the Thai Industrial Ministry
and NMT was designated a “Plant of Excellence.”Coexisting and working with theThai people

Our company strives to coexist and develop
together with local people around the world.
Thailand has a large number of devout Buddhists
and the king is adored as the supreme defenderof the Buddhist faith.
Our Japanese employees work to understandthe Thai people, their culture, and their customs,
and to give them proper respect.

At NTN BEARING-THAILAND’s Khon Kaen
Branch, we have been making donations since 2005
to help the local elementary school’s futsal teamcover expenses. Since 2006, we have been
supporting the Samut Songkhram Technical Collegewith donations to help them enter the robotics
contests. In December 2007, we helped out with theSoutheast Asian Games that were held in Nakorn
Ratchasima province; this is an example of the many
ways that we engage in social contribution activities.
It is NTN’s sincere hope that Thailand’s young
people – and the world’s young people – will growup healthy and help the world to develop further.
List of social contribution activities in Thailand• Sports• Hospitals

Helped with the Southeast Asian Games
Supported youth soccer teams
Participated in local soccer tournaments• Education

Donated money to build a hospital
Donated to an AIDS fund• Cleaning and greening activities< For University >Donated money to help with exhibitions
and robotic contests
Donated PCs
Accepted internships< For elementary school >Contributed stationery and sports equipment

Planted mangroves

NTN BEARING-THAILAND CO., LTD.
CHIANG MAI BRANCHCHIANG MAI
NTN BEARING-THAILAND CO., LTD.
HEAD SALES OFFICETHAILANDNTN BEARING-THAILAND CO., LTD.
KHON KAEN BRANCHNTN BEARING-THAILAND CO., LTD.
BANGNA BRANCHBANGKOKRAYONGNTN MANUFACTURING(THAILAND) CO., LTD.

NTN BEARING-THAILAND
supports a local futsal team

NTN-NIDEC (THAILAND) CO., LTD.
NTN BEARING-THAILAND CO., LTD.
HAAD YAI BRANCHNNTC employees

Malee Kitkancharoensin
Section Manager,
General Affairs Department,
NTN BEARING-THAILAND

Women play an important rolein this rapidly growing workplace

Work in progress at NMT

AT NTN BEARING-THAILAND, 60% of sales and office workers andhalf of management are women, and the workplace is a snapshot ofThai society, where it is typical for women to go out into society
and work.
I joined this company in 1992. My current work mainly involves
corporate planning related to increasing operational efficiency aswell as collecting and analyzing information to help establish corporate
policies. I always want to be someone who is useful to the organizationand to employees working together. This is why I obtained my MBA
while working at the same time. I would like to continue to maintainmy moral and ethical framework, to work to establish corporate
strategies, and to grow along with the company.

16

CSR Management
Fulfilling our responsibilities to our stakeholders

NTN’s Corporate Philosophy

The NTN Group’s Corporate Philosophy
Corporate Philosophy

Working to inform everyone of andthoroughly establish our five Basic Policies

Basic concept of values as a corporation
Aims of corporate activities

Our Corporate Philosophy is as follows: We shall contributeto an international society through creating new technologies
and new products. To put this Corporate Philosophy into
practice, it is important for everyone inside and outside thecompany to know what policies guide us in our work and foreach one of us to embody these policies.
To do this, our company has established five Basic
Policies, and we are working to make sure that all officers andemployees are fully informed of them.

1. Corporate Governance Policy
2. Financial Reporting Policy
3. Risk Management Policy
4. Internal Control Policy
5. CSR Policy

The NTN Group’s approach to CSR

NTN’s Basic Policies

Employee Code of
Conduct

Business Code of
Conduct

Guideline to encourage
aggressive actions

Guideline forcompliance actions

The basis of our Corporate Philosophy
system: Each one of our employees works
to realize CSR
In April 2006, “NTN established a CSR Policy” to help us
become an even more trusted corporation, and we havemade CSR an essential part of our business in order to raise
our Enterprise Value. By bolstering our corporate governanceand by acting to preserve the global environment, to make asocial contribution, and to improve our workplace environment
on a solid bedrock of total compliance, we declare that wewill fulfill all of our responsibilities to our stakeholders.
At the same time, we established an Employee Code of
Conduct that urges employees, managers, and supervisors tobe proactive. We also revised the Business Code of Conductthat directors and employees are required to follow.
We used the CSR Guidebook and the Response Card to informall directors and employees of these developments and we publicized
the results on our website to inform people outside the company.

NTN’s Corporate Philosophy
We shall contribute to an internationalsociety through creating new technologies
and new products.
For New Technology Network:
Connect through new technologies
1. Creation of original technologies
2. Offering technologies with added value and services
that are suitable for each customer and end user.
3. Improvement of employees’ standard of living,
distribution of fair returns to stockholders, andcontribution to a society based on the steady
growth of our business.
4. Promotion of globalization and formation of acorporate management system, which are essential
for NTN as a leading international company.

CSR Policy
1. Legal compliance/Policy for activities: We shall comply with both the letter and the spirit of laws and regulations, and carry out ourbusiness activities in an open and honest manner.

2. Customers: We shall strive to develop new technologies and new products, as well as to provide safe and reliable products.
3. Business partners: We shall engage in fair and free competition, and at the same time establish excellent partnerships with our business partners.
4. Stockholders/Disclosure of information: We shall work to develop this corporation and increase stockholder return, while at thesame time communicating broadly with society and actively disclosing information.

5. Employees: We shall value the individuality and diversity of our employees, work to create a safe and pleasant work place, and achieve comfort and prosperity.
6. The environment: With ample consideration to preserving the global environment and protecting the ecosystem, we shall work toward thecreation of a sustainable, progressing society.

7. Society: We shall make every effort to interact meaningfully with society on a local level, and to engage in activities that contribute to society.
8. International activities: We shall, as a matter of course, obey all international rules as well as the laws of each country and each region
that we operate in; we shall also respect local cultures and practices and contribute to local development.

17

CSR promotion structure
Our new “Advancement of Women” project
NTN has created a CSR Committee that has CSR managers
from each department and each group company in Japan;
this committee engages in CSR activities on a regular basis.
In Japan, in order to support CSR activities at various levels,
the CSR Department periodically convenes meetings of the
CSR Committee to better understand the CSR plans andactivities and CSR performance for each organization.
In fiscal 2007, as part of the CSR Committee’s activities
to expand opportunities for women to excel, our Personnel
Department officially started the “Advancement of Women”
project. These activities are intended to promote additional
opportunities for our female employees (See p.30).
Activities related to the “Advancement of Women” project

Tools to inform all directors andemployees in the NTN Group of
our CSR Policy and Business
Code of Conduct

CSR promotion structure
Chief Management Officer(Director in charge of CSR Department)

CSR Committee

Sales Planning
Department

Procurement
Department

Quality Management
Department

Intellectual Property
Planning Department

Environment Management
Department

Personnel Department

Legal Department

General Affairs
Department

Corporate Planning
Department

Relevant departments incharge at Head Office

Left: CSR Guidebook
Right: Two types of Response Cards

Office(CSR Department)

CSR managers who work in plants,
the Engineering Department, Research & Development,
Sales, at Head Office, and group companies

CSR Report
Committee

Compliance
Committee

Social Contribution
Committee

Employee Code of Conduct
1. We respect social ethics and act as good members of society.
2. We have noble ambitions and always make efforts to brainstorm and achieve the set target.
3. We accept changes, have broad vision and act voluntarily.
4. We deepen mutual understanding and enhance the vitality of our work site.
5. Management and supervisors in particular, as faces of the corporation, improve their qualifications, make efforts to develop
individuals, always take care of safety and show leadership.

18

CSR Management

Corporate governanceCompliance

One of our most important issues asa corporation
NTN has designated corporate governance as one of ourmost important issues. We are pursuing greater efficiency
and soundness in our management, and we are working toincrease corporate transparency through the rapid disclosureof accurate information.
A director’s meeting is held every month in order todecide on important items and to direct the execution ofbusiness in the company. Also, the Business Strategy
Committee is made up of directors as well as executive
officers who have been chosen for specific issues; thisCommittee discusses management strategy and execution.
The Executive Officers’ Meeting is attended by directors andexecutive officers to confirm the month-to-month execution
status of business.
We employ an auditor system; auditors monitor theboard’s execution of business operations. The independence
and objectivity of the corporate auditors is assured by
employing three outside auditors among the four auditors
who make up the audit team (Standing: 2, Part-time: 2).
In terms of internal audits, we have created an Internal
Audit Department as a separate auditing structure. This
department carries out audits related to the execution ofbusiness across the company.

The CSR Department, Legal Department,
and Personnel Department promote andmanage compliance
NTN has established a Compliance Sub-Committee under the
CSR Committee. This sub-committee is made up of the CSR
Department and the Legal and Personnel Departments. The
CSR Department investigates and analyzes compliance andrisk and is in charge of education and awareness-raising
activities related to compliance. The Legal Department judges
issues based on the law and NTN’s internal rules, and is incharge of our help line management. The Personnel
Department is in charge of evaluating issues from theperspective of personnel measures and policies. This systemallows us to promote and manage compliancecomprehensively on a company-wide scale for NTN and ourgroup companies in Japan.
Also, the Chief Management Officer for CSR, the CSR
Department, and the CSR managers from each department
work together to ensure compliance.

Compliance Committee andHelp Line Management Structure
Compliance Promotion

Help Line Management

Chief Management Officer(Director in charge of
the CSR Department)

Chief Management Officer(Director in charge of
the Legal Department)

Corporate Governance Structure
CSR
Committee

Stockholder meeting

Assigns/
removes

Assigns/
removes

Auditors
AuditsBoard ofDirectors

Assigns/
removesAccounting
Auditors(Audit firm)

Business
Strategy
Committee

Office(CSR
Department)

Legal
Department

Compliance Sub-committee

CSR
Management
Department

Legal
Department

Personnel
Department

External
Help Desk

Internal
Help Desk

CSR managers Directors and employees of NTN Group

Corporate
Philosophy

CSR Policy

Employee
Code of
Conduct

Business
Code of
Conduct

Executive
Officers’Meeting

We are clarifying the Business Code of
Conduct for directors and employees(Other positions omitted)

19

In fiscal 2006, we established a CSR Policy and an Employee
Code of Conduct; we also revised our Business Code of Conduct.
Our Business Code of Conduct requires that in order tofulfill their corporate social responsibilities, each one of the
NTN Group's directors and employees be thorough in theircompliance and be fair in their actions.
This is not limited to just obeying the law; through ashared Business Code of Conduct, we are putting into
practice a philosophy that is based on a framework of values
and ethics characteristic of good associates of a corporationand good members of society.

Expanding compliance training for employees
During the training of new employees and third-year
employees, as well as during management training, we
educate our employees about CSR issues, compliance, andcorporate law.
Also in fiscal 2008, we revised our CSR Guidebook andwe plan on holding a meeting to explain CSR and complianceto all of our managers.

Help desk for employees to makeinquiries, get advice, and make a report
Suppliers can now access our help desks
At NTN and our Japanese group companies, employees areable to make a report if they discover or foresee any actions
taken by directors or employees that contravene the law, ourBusiness Code of Conduct, and our internal rules. They canreport such compliance issues directly to a help line or to ahelp desk by fax or e-mail. They can also make inquiries, getadvice, and make a report without going through management.
There are two help lines: one is the Internal help desk that
our Legal Department responds to, and the other is theExternal help desk that a legal office advising our company
responds to. Both of these entities work to ensure that people

Compliance training for new employees

who make a report are not punished. We have also informed
our employees of how to use these help lines in our CSR
Guidebook and in our CSR/compliance education.
Since March 2007, we have also let our 602 suppliers
access these help lines so that we can receive inquiries, give
advice, and receive reports of illegal activities.

Protecting personal information
A person in charge in each department works
to ensure personal information is protected
NTN has created rules and a manual for managing personal
information, and we have established a management system
headed by a chief manager or a person in charge ofmanaging personal information in each workplace.
NTN properly handles personal information based on ourrules and manual related to managing personal information.
Our Internal Audit Department does periodic audits to makesure that it is being managed properly.

Business Code of Conduct
1. Compliance with laws and norms
We shall do our utmost to act according to high principles as corporate employees and as socially responsible adults by complying with laws,
our internal rules and the ethical norms of society.

Code for business activities

2. Pursuit of quality and safety
3. Compliance with the Anti-Trust Law
4. Fair trade with suppliers
5. Honoring agreements
6. Refusal to engage in improper conduct with business partners
7. Proper labeling and specification
8. Respect for intellectual property rights
9. Proper control of confidential information
10. Ensuring security by strengthening export controls
11. Compliance with industrial laws
12. Compliance with corporate accounting principles

Code for co-existence with society
13. Compliance with international rules

14. Promotion of environmental preservation

15. Positive contribution to society

Code for ensuring a positive work environment

16. Compliance with labor-related laws and company work rules
17. Realization of a safe and positive work environment
18. Respect for human rights
19. Prohibition of sexual harassment
20. Proper control of information about individuals

Code for corporate employees

21. Strict distinction between public and private matters
22. Confronting harmful social forces
23. Proper utilization of our information system
24. Prohibition of insider trading
25. Self-restraint regarding entertainment and gifts
26. Lawful donations/political donations

20

CSR Management

Risk management
Creating a risk management systemthat is proactive – not just reactive
In March 2008, we established a “Risk Management Policy,”
and we replaced our “Emergency management rules” with
our new “Risk management rules,” which is an integrated
response process that includes everything from measures toprevent risk to those related to emergency response. We alsoestablished a new Risk Management Committee.
The Risk Management Committee works to oversee themanagement of risks carried by NTN, and we have identified
departments with critical risks through a risk identificationand evaluation process. Each department carries out risk

Risk management system
Board of Directors
Chief Management Officer(Director in charge of risk management)
Risk Management Committee
Committee Chief Management
Chairman Officer
Committee Risk Management
Manager
ViceChairman Emergency Management
ManagerMembers

Risk Management
Department(CSR Department)

Managers from Promoting
Department

Emergency Management
Department(General Affairs Department)

Emergency
Management
CenterPromoting Department
Preventative
measures

Risk management
planning

reduction measures and, if an incident does occur, is able tocarry out emergency measures. The Risk Management
Committee monitors progress.
If a serious crisis does occur, we will set up a central task
force department that will give instructions to mitigate any
damage.

These measures are also being
implemented at NTN Group companies
We have informed our group companies of our Risk
Management Policy, and we have instructed each company
to create a risk management system.
NTN’s Risk Management Committee works to address
the critical risks facing the group as a whole.

We place an emphasis on earthquake andfire countermeasures to ensure a steadyproduct supply
Our Manufacturing Department has prepared for earthquakes
and fires based on the Fire and disaster management rules inorder to prevent our customers’ production lines from evercoming to a stop due to natural disasters or accidents.
As of the end of fiscal 2007, 84% of earthquake
resistance improvements to our manufacturing facilities interms of floor area were complete. As for disaster training, we
carry out evacuation and firefighting exercises every year ateach manufacturing workplace. Moreover, we carried out
training on safety
check for all employees
using an internet-based
registration system inMarch 2008.
We will continue
training on rapid restartof production in theevent of an emergency.

Earthquake resistance improvements
underway at Okayama Works

Emergency
measures
Person in charge ofmanaging emergency
information

An incident occurs
Creation and implementationof measures to address risk
Evaluation of measures toaddress risk

Determining the level

Establishment ofcentral task force
and response

Response by
department
in charge

Evaluation of effectivenessof risk management
Measures to prevent
recurrence
Firefighting training at Iwata Works

21

23

Responsibility to Customers

27

Responsibility to Suppliers

28

Responsibility to Employees

31

Responsibility to Shareholders

32

Responsibility to Local Communities

Social Aspects
NTN strives to increase Enterprise Value tostakeholders.
In order to achieve this, we are working to improveawareness of our responsibilities to our various
stakeholders and to fulfill these responsibilities.

Responsibility
toCustomers

Responsibility
to LocalCommunities

Responsibility
toSuppliers
R

Responsibility
toShareholders

Responsibility
toEmployees

22Social Aspects

Responsibility to Customers
Working to provide top-notch quality and service
Basic Quality Policy
Basic Quality Policy“To assure appropriate quality in order to achieve thefunctions and specifications required by customers”• NTN’s quality must be in step with the market change.
(Applicable quality)• NTN’s quality must be superior to the competitors’ quality.
(Competitive quality)• NTN’s quality must be profitable in the marketplace. (Economical quality)

FY 2007 Period Quality
Management Policy
Engineering“Design Leads All” is the basic concept we
use to improve quality starting from thefoundations of MONOZUKURIOur Engineering Department regards the idea that “Design
leads all” as basic policy and is working to improve quality
using MONOZUKURI as the basis.
First, designers accurately learn the functions required by
the customer and the conditions of use and then work to createeasy-to-understand, easy-to-manufacture, and mistake-proof
products with clear and detailed instructions on the drawing toprevent mistakes during manufacturing. In addition, suitablespecifications are chosen for the intended manufacturing
worksite. Even after designing the product, a design review is done
by a group including the person in charge of manufacturing in order
to assure the design and function of the product. We also believe it
is important that the design review personnel physically see andtouch the actual product to ensure the highest level of quality.

Production

Establish systems on the following
premise: “Humans will make mistakes andmachines will fail”
NTN’s manufacturing department promotes the creation ofsystems based on the premise that humans will makemistakes and machines will fail.
We promote creating a process that prevents errors andcompensates for both mistakes and malfunctions to prevent
problems from occurring. This is done by thoroughly
establishing 5S (Five Japanese words beginning with S: seiri,
seiton, seisou, seiketsu and shitsuke, or organization,
arrangement, cleaning, cleanliness and discipline respectively)
In addition, we have a process management system withtraceability so that lots with defects can be identified; various
methods are used to prevent the recurrence of problems.

Sales

Provide what customers require
Our sales departments have “Grasping of customer requirement andcommunication” as a basic policy. Our sales staff works to understandour customers’ needs and rapidly report them to the company.
We respond positively to requests by customers to change
specifications and designs. If there were ever a problem with quality,
we would pass this on to the departments concerned to address andresolve the problem. We also work to understand our customers’level of satisfaction with respect to our products’ quality, delivery,
cost, and engineering response to improve this level of satisfaction.

FY 2007 Period Quality Management Policy
Engineering“Design Leads All” was continued

1. Design easy-to-understand, easy-to-manufacture, andmistake-proof products
2. Design in consideration of manufacturing at site
3. Completion of design verification
4. Promotion of product classification integration

Production

Establish systems on the following premise:“Humans will make mistakes and machines will fail”
1. Observation of the basics 2. Establishment of complete quality
assurance system for all production machinery (Cooperation) 3. Overall
inspection of process 4. Prevention of Recurrence = System to prevent
defect from recurring (70% of claims are the re-occurrence of a previous
problem) 5. Ensuring quality of newly launched product = Constructionof global system for quality assurance 6. Strengthening andimprovement of quality of affiliated manufacturer 7. Special process
8. Reduction of defect disposal payment 9. Traceability

Sales

Grasping of customer requirement and communication

Thorough 5S in the manufacturing workplace00
23

1. Timely internal deployment of required specifications, design changes, andapplication changes. 2. Grasp of customer satisfaction and improvement ofevaluation (quality, delivery data, cost, technical response capability) andinternal deployment. 3. Quick internal action when a quality problem occurs.

Quality management system
Working to continuously improve
our quality management system
NTN is working to create a quality management system at allof our operating sites based on the international ISO9001
standard. In addition, at operating sites that produce
automotive products, we are working to obtain ISO/TS16949:
2002* certification.
Through the appropriate
operation of these management
systems and through a commitment
to continuous improvement, we areable to prevent defects and provide
reliable products to the customer.
A highly stringent* ISO/TS16949:2002:
quality management system that is a fusionof the ISO9001: 2000 and the standards
set out by European and US automobile
manufactures.

Quality policy management system
Basic Quality Policy(Quality
Management Rules)

Quality Management
Policy(Every year)

Instructions
Feedback(Director in charge of engineering)(R&D General Manager)

Meeting of QA dept.
managers

R&D Center(Quality Management Dept.)

Our customer support system
Providing thorough service on
a product-by-product basis andcustomer-by-customer basis
In order to raise customer satisfaction, we have allocated sales
staff and sales engineers for each primary customer and eachretail store to directly respond to our customers’ requests andquestions.
In terms of product information, we have distributed productcatalogs to our customers, but our design departments deal
directly with special information. Also, our engineers go to ourcustomers and hold technical seminars and product exhibitions.
In addition to these efforts, in fiscal 2007, we carried out minipresentations at 16 companies in Japan and overseas as a forum
for direct conversation between customers and our engineers
and as an opportunity to introduce our products in a detailed
manner. These presentations have received a positive response.
Inquiries and complaints from our customers are dealt withby the manager of the applicable branch. We constantly receive
inquiries via our web site; these inquiries are automaticallyrouted to the appropriate engineering manager based on theregion and the product so that they can be answered quickly.
We will go back to the basics of MONOZUKURI and work
to create a system that doesn’t lead to complaints. We arealso seeing an increased level of environmental awareness inour customers and we will review whether we need to indicate
environmental safety on our products.

R&D Policy(General Manager ofoperating site)

Quality policy for
operating site

Research andengineeringdevelopment
planning meeting

Action policies ofengineering departments(Managers ofengineering depts.)(Plant Manager)

Quality Policy for Plant(Managing department
at head office)

Coordination
meeting

A mini-presentation
for customers
where we cancomprehensively
respond to
customer needs(QA Dept. Manager)(Dept./Sect. Manager)

Responding to critical quality
problems
We will strengthen our global crisis
management system
If a critical quality problem does occur, we have a system inplace to organize a special emergency team made up of Sales,
QA, Engineering, and R&D Depts. to resolve the problem.
In fiscal 2007, there were no recalls. We will continue tostrengthen the crisis management system for the NTN Group
as a whole, including at our overseas operating sites.

Gauging customer satisfaction
NTN carries out customer satisfaction surveys of our
products and services on an ongoing basis to raise customer
satisfaction. In fiscal 2007, surveys of our primary customers
including those in the US and Europe found that 95% of themfound our performance to be “Very good” or “Good”(compared to 92% in fiscal 2006).
The feedback from our customers will be given to ourmanagers in full detail including complaints, and we willcontinue to work toward zero-complaint products.

24Social Aspects

Responsibility to Customers

A special management system for theconstruction and civil engineering markets

Considering the needsof each market segment
Developing environmentally-friendly
products for the automotive industry
Amid rising calls around the world for strengthened measures
to prevent global warming, the highly-scrutinized auto industry
has a growing need for NTN products, which can be linked
directly to energy conservation and better fuel economy. We
are working to reduce weight, size, and friction in our products
and we are working to develop and provide products free of
hazardous substances. We are also working to develop andprovide hub bearings with internal sensors (see pp. 7-8).
In fiscal 2007, we made progress toward developing new
products that are safer and better for the environment such as
the low-torque sealed hub bearing and rocker arm bearing. We
respond to the many, varied needs of our customers.

Scope
Motor company
specific requirements
Automotive
products

ISO/TS16949
audit range

Automotive industry specific
ISO/TS16949
common requirements
requirements

Industrial
products
and others

Associated with expanded raw material and energy
development around the world, the need for our bearings isincreasing in the construction and civil engineering fields. This
demand is mostly in the field of mining machines.
Just-in-time systems (systems with no inventory, whereparts are produced and delivered when the order is received)
are frequently used for mining machines, which is a rarity
among industrial devices. To handle these systems, our
Production, Logistics, and Sales Departments work closely
together to deliver parts with tight delivery windows. In addition,
to maintain high quality even with tight timelines, our Production
and Logistics Departments have in place a special management
system for each part number delivered to our customers.

Providing recyclable products forthe electronics market
Electronic products contain miniature and plastic products
manufactured by NTN and environmental concerns are first andforemost for these products.
NTN is focused on developing and providing products that arecompletely free of environmentally hazardous substances and wehave internal regulations that are even more stringent than existing
environmental regulations. NTN will continue to find new ways to
produce recyclable products that are environmentally friendly.

ISO9001 requirements

The safety of products for use in rail cars
is of the utmost importancePrimary customers requiring ISO/TS16949:2002
compliance and associated site/product

Rail transport is getting a second look around the world from theperspective of preventing global warming because this mode oftransportation has very low CO2 emissions per weighttransported. Because of this, rail transport is expanding
worldwide, and demand for bearings is also expanding.
In rail systems that transport people, an accident may lead tosignificant damage. This is why NTN carries out special quality
control for products used for rail transport.

Customer

Ford

Daimler
Chrysler

Customer-specificrequirements

Associatedsite

Products

Ford Motor Company Kuwana Works Automotive cylindricalroller bearings
Customer-Specific
Requirements For Use Iwata Works Belt tensioners
With ISO/TS16949
Okayama Works Axle bearings
Automotive ball bearings
Iwata Works Automotive needle roller
bearings
Automotive
ball bearings
KuwanaGuideline for Quality
Automotive cylindrical
Works
Assurance in Productroller bearings
Realization (Europe)
taperedOkayama Automotive
roller bearings
Works
Axle bearings
NTN Kongo Corp. Automotive ball bearings

GM

00
25

Customer-Specific
Requirements
for use with
ISO/TS16949 (US)
Customer Specific
Requirements
For Use With
ISO/TS16949

NaganoWorks

Auto tensioners

Iwata Works Automotive needle
roller bearings

A high-level quality management system
for the wind power generation market
Wind power generation is spreading in every region of the world
as a renewable source of energy with minimal environmental
impact. We can expect further
growth in this market. The
products that we provide (usedin shafts and other areas)
require stable performanceover the long term, so special
quality control is used.
We will continue to createa system that is responsive tocustomer requirements for thismarket, which seeks a highdegree of quality control.

Encouraging our suppliersWorking to improve quality with
our suppliers
NTN does periodic quality audits of its suppliers of parts andmaterials. In the fiscal 2007 audit, we found cases of “notenough basic rules and failure to follow these rules,” and weare working to improve these areas.
We also hold a “Supplier quality improvement meeting”
once a year where suppliers describe their quality-related
activities so that we can all learn from each other.
These activities
have resulted in adecrease over theyears in customer
complaints fromproblems with our
suppliers. We willcontinue to work with
our suppliers to further
A “Supplier quality improvement meeting”
improve quality.
in progress

Giving information to our customers
Promoting NTN products at trade shows
We have exhibits at trade shows and exhibitions to increasecustomers’ level of understanding about our products.
In fiscal 2007, we had exhibits at trade shows andexhibitions such as the Tokyo Motor Show. We supported theTokyo International Automotive Conference and we have beena partner of Honda’s F1 racing team for four consecutive years.
By taking out advertising in newspapers and other media in
conjunction with these events, we increased NTN’s brandrecognition.
For future exhibits, we will prepare exhibits so that we canproject a corporate image and product information that is unified
in order to get people to understand our company better.

Ongoing technical education of
our sales agents
NTN has a network of sales agents. Our “Domestic Sales
Agent Meeting” in Japan holds periodic exhibits and training
sessions. We also host forums on technical education toincrease knowledge of our products in terms of their design,function, and handling methods.
In fiscal 2007, we held technical seminars at our Domestic
Sales Agent Association in Japan as well as at various
branches. These seminars were aimed at new and mid-level
employees at our agents and are customized based on thelevel of the participants (beginner or intermediate). The
seminars have been received positively by participants.
We will work to further enrich our technical talks andcontinue them on an ongoing basis.

ColumnThe NTN exhibit at the Tokyo Motor Show

Product development that puts
the emphasis on customer needs

We work to learn our customers’ needs through exhibits and visits tocustomers to develop environmentally friendly, safe, and easy-to-use
products.
For instance, in fiscal 2007, our customers asked us to make component
parts smaller. In response, we developed the chain tensioner used tomaintain tension in the timing chain used on automotive engines, which iscalled the “Chain Tensioner without Oil-supply.” By making it unnecessary
to supply the tensioner with oil, we contributed to make an oil pumpsmaller.
In addition to this, we have worked on environmentally friendly
improvements such as lower torque, less weight, and longer life, as well
as fundamental technologies such as non-petroleum-based lubricants
and materials free of rare metals.

The newly developed“Oil Feeding-free Chain Tensioner”

26

Social Aspects

Responsibility to Suppliers
Establishing prosperity together through good partnerships
Procurement policy
Strengthening our procurement activities
with greater emphasis on the environmentand safety
Our basic policy regarding our procurement activities is toprovide good products at a good price to the world based on
consideration for the environment, quality assurance, and being
fair. It also involves raising our Enterprise Value over the longterm by working together with our suppliers.
We also place an emphasis on creating good, long-termbusiness relationships; to us, our suppliers are strategic partners,
and we will work together to improve quality and technical skills
based on a foundation of mutual trust and cooperation.
In fiscal 2007, in order to introduce green procurement
and to respond to changes to related laws and regulations,
we changed our basic purchasing contract, and we signed
the revised agreement with our suppliers. Based on thesechanges, we will push even more strongly for environmental
friendliness and product safety.

Basic procurement policy
1. To pursue stable procurement for best quality/cost and prepare formarket fluctuations.
2. To improve corporate value for both sides through mutual cooperation.
3. To create trust with affiliated companies by observing rules, regulations
and social precepts.
4. To comply with social duties (such as preservation of the global
environment) through procurement activity.

Maintaining fair andappropriate relationships
Maintaining fair dealing based on self-audits
To ensure fair dealing, our company established a voluntary
audit manual for subcontractors in 1997 and created a system

Columnbased on internal audits by subcontractors. These self-audits
are based on requests from individual operating sites and on
the judgment of the Procurement Dept., and are done with
the Procurement Dept. present.
Also, in order to establish the importance of fair dealing
with our subcontractors in the minds of our employees, we
require our procurement staff to attend annual talks andexternal seminars related to dealing with subcontractors fairly.
We will continue to strengthen our system for fair dealing.

Supplier meetings
NTN holds supplier meetings twice a year.
In fiscal 2007, 77 suppliers participated. We explained our
procurement policies for fiscal 2007 to our suppliers. These
policies are “securing stable as-delivered quality” and“reducing procurement
costs.” We also
recognized 21
suppliers for a diverse
range of achievements
such as quality,
increased production,
price, and ISO
certification.
The March 2008 supplier meeting

Dialogue with suppliers
Suppliers can now access our help desks
Accompanying the Whistleblower Protection Act that was put
into force in April 2006, our help line (see p.20), which is ameans of disclosing information in the public interest, wasexpanded in scope to include our suppliers.
Any consultation with suppliers is done by a manager thathas nothing to do with the supplier's regular contact person,
and we ensure that anyone making a report is not punished.

Safety and hygiene management for
suppliers and external workers*

NTN focuses its safety and hygiene management not only on our own employees, but also on
suppliers and external workers. Our current initiatives include: (1) reducing accidents that occur
during irregular work; (2) expanding NTN’s labor safety and hygiene management; (3) promoting
mental health activities in the workplace; and (4) promoting increased health.
In fiscal 2007, 70% of the workplace accidents at NTN – including external workers –involved pinch points and being dragged into equipment.
We will continue to carry out thorough risk assessments for irregular work and hazard
experience education for both employees and non-employees.
workers: These include employees from subcontracting companies,* External
workers from temporary agencies, and part-time employees.

27

External workers
being instructed in safetySocial Aspects

Responsibility to Employees
Putting an emphasis on fair evaluations and on creating safe, pleasant work environments
Our employees

Personnel evaluations

The number of overseas employees has
increased dramatically
In response to the expansion of our business in Japan and aroundthe world as well as the retirement of the baby-boomers, we areworking to increase our workforce and secure the personnel fromwhom we can learn required technical skills and abilities.
We expanded our business in fiscal 2007, focusing on Asia,and there was a jump in the number of overseas employees. This
is why we have labor safety education and work standards in
English for our foreign employees.
In Japan, approximately 8% of our employees are female,but the number of women in management is still quite low. In
fiscal 2008, we increased the number of newly hired women to24, and we plan to increase opportunities for them.

Number of employees
Non-consolidated regular employees (male)Non-consolidated regular employees (female)
Consolidated regular employees

18,96017,306

14,631
12,788

11,885

467

445

436

434

435

5,109

5,020

5,006

5,011

4,965

2003

2004

2005

2006

2007

(Fiscal year)

Human resources development andincreased hiring
Putting the right person in the right place
Some systems that we have to carry out human resources
development focus on the individual aptitudes of ouremployees. We also have a self-declaration system and an
in-house recruitment system. We will continue to use thesesystems to help with individual growth as well as careerplanning and job change planning.
In addition, we employ and otherwise handle
non-standard employees according to the regulations forpart-time workers and contract employees. However, wehave a system through which contract employees that arerecommended by their workplace after a year can go throughan essay and interview process to become regular, full-time
employees. This lets NTN secure good talent.

Training for personnel evaluators
To let us determine the compensation and the position of
employees in a fair and appropriate manner, we created apersonnel performance evaluation manual to carry out personnel
performance evaluations in an equitable way.
In fiscal 2007, we carried out a mass training session forevaluators in order to check that things were being done
according to the personnel performance evaluation manual. To
improve the precision of the target management sheet that showseach person's work targets, we made the sheet more detailed and
we instructed evaluators on their interview techniques.

Educational support system
Developing human resources that are
globally relevant
Human resources development at NTN is based on creating
human resources that are “relevant to international society,” thatare “independent individuals,” and that are “creative.” This wayof thinking also applies to our primary affiliates in Japan.
In fiscal 2007, our policies for human resources development
were “to create a human resources development system for both
Japan and overseas,” “to create an educational system to passon technical skills and abilities,” and “to be thorough in following
up with actual performance.” In addition to working to ensure thecontinuation of skills and carrying out specialized training for
employees at different levels and in different work categories, we
also carried out job-specific training for engineers, production
managers, and fabrication managers.
In addition, to connect education and training to actual
performance at the worksite, we have evaluators manage skills
by looking at work performance and we use post-training
exercises, tests, and questionnaires to quantitatively evaluate
the results of our training.
In response to the increasing number of overseas operatingsites, we are increasing the number of overseas plant support
staff, expanding our training system for employees goingoverseas, and creating a system for training local trainers.

MONOZUKURI skill
training in progress28

Social Aspects

Responsibility to Employees

Helping people achieve a balance
between work and family
We created a reemployment systemthat allows employees to have andraise children and we encourage people totake paid leave while raising children
We have various systems to help our employees achieve abalance between their work and their family.
Starting in January 2007, we have operated are-employment system (the “mom-back” system) for female
employees who quit their jobs to give birth and raise children.
This involves having employees who quit to raise children
register so that they can be re-employed when they are able
to work again. As of January 2008, two people wereregistered. Also, in order to make it easier for both male andfemale employees to use their paid leave while raisingchildren, we increased the number of half-day vacations from10 to 20 and we encouraged people to take these days off. In
fiscal 2007, our employees took an average of 7.9 vacations.
In terms of our family support measures, we have asystem that allows employees to take leaves of 1 year, which
2 employees are currently using.

Outline of childcare support system
NTN

Designated by law

Treated as holiday—

Vacation days
before birth

6 weeks paid

No payVacation days
after birth

6 weeks paid

No payChildcare time

Twice a day with pay(1 hour each time)

30 min/time
without pay

Exemption fromovertime

Until child enterselementary school

Obligation to makebest efforts whenchild reaches
the age of three

Going to hospital forchildbirth

are also measures to reduce overtime, exemptions from* Therenight shifts, and a vacation system to care for children.

Social welfare
Social welfare systems such as
volunteer vacations and help withcorrespondence courses
NTN has put in short sabbaticals and volunteer vacations inaddition to the legally mandated paid vacations, and we
encourage our employees to take these vacations. In fiscal
2007, one of our hearing-impaired employees took time off tovolunteer as a sign-language interpreter.
We also have a system that helps pay for distanceeducation courses taken by our employees to help them
improve themselves, and 584 people took advantage of thisopportunity in fiscal 2007.

00
29

Re-employment system
Two options to re-employ retirees
As the baby-boomer generation is nearing retirement, we have a reemployment system for people in their early 60s that has two options.
The first, the Skill Transfer option, allows participants to passon their technical skills, abilities, and professional knowledge toyoung employees. The second is the Full Excellence option,
which does not limit their employment category. In fiscal 2007,
we re-employed 58 individuals.

Employing disabled individuals
Supporting the employment of
the disabled in our “Dream workshops”
We employ disabled people at our regular workplaces. To go astep further and create a workplace where disabled people canexcel, we created “Dream workshops” in fiscal 2004 at threemanufacturing sites – Kuwana Works, Iwata Works, and Okayama
Works. We did this to support disabled individuals in their efforts tobecome independent and to create workplaces that give people
a sense of purpose.
In fiscal 2007, we employed
82 disabled people (8 of whom
worked in the “Dream workshop”).
Our percentage of disabled
employees was 1.82%, which
Adding bar code labels andmeets Japan’s legal requirement.
preparing product packaging
in a “Dream workshop”

Occupational safety and health
Our occupational safety and healthmanagement system was certified
Working harder to become accident-free
We create a safety control plan every year to continuously increase
workplace safety and hygiene. In April 2007, the Occupational
Safety and Health Management System (OSHMS) of the sevenprimary operating sites were certified by the Japan Industrial
Safety and Health Association (JISHA).
The number of occupational accidents at our primary operatingsites in Japan decreased from 42 incidents in the previous year to 31
incidents in fiscal 2007, and the incidence rate and severity rate ofthese incidents has also gone down. We achieved 4,650,000 hours
without accidents (not including non-lost-time injuries), and we wereawarded a Class 2 Accident-freerecord by the vice-manager of theLabor Bureau in May.
Of the accidents that occur in our
primary operating sites in Japan,
70% are irregular work accidents that
Large experiential bearing
occur during work such as machinery
exhibit at Kuwana Works

adjustments, often involving pinch points and being dragged into
equipment. We will continue to carry out risk assessments andhazard experience education to identify hazards and work tostrengthen our safety management.
In addition to discussing ways to check and strengthen the safety andhealth systems at NTN group companies, they also work to understandthe status of safety and health at overseas operating sites and are working
to improve occupational safety and health across the entire group.

Incidence rate (number of deaths)
National
average

Average forthe bearing industry

Group companies in Japan(5 operating sites and 3 group companies)

1.78

1.85

1.95

1.01

0.99

0.95

0.15

0.26

2003

2004

1.90
1.17
0.34

0.35

2005

2006

1.83
1.29
0.26

2007

(Fiscal year)

Severity rate (Lost time)
National
average

Average forthe bearing industry

0.120

0.120

0.030
0.003

2003

0.020
0.004

2004

Group companies in Japan(5 operating sites and 3 group companies)

0.120
0.040
0.010

2005

0.120
0.070
0.004

2006

0.110
0.050
0.002

2007

(Fiscal year)

Focusing on individual health to expand
our preventative health management
To maintain and improve the health of each of our employees, we areworking to enrich our preventative health management in response tolifestyle diseases. In addition to legally mandated health checks, we carryout cancer screenings, dental checks, and measures to prevent backinjury. We also have walking programs and blood sugar reduction
programs. We plan to give level-specific guidance regarding metabolic
syndrome in order to comply with the requirement to give special healthexaminations and to give special health guidance starting in April 2008.
Also, to prevent employee overwork, we are working to understandand manage overtime and systematically instructing employees not towork overtime. Since March 2007, we have required any employee
working more than 60 hours of overtime in a month to see an industrial
physician. Those working more than 45 hours of overtime in a month may
also go see an industrial physician if they or their superior asks for it.
In terms of mental health efforts, we have a system in place in which
workplace managers and supervisors talk to employees, notice anychanges, and listen to what employees have to say. We also have asystem where more experienced employees mentor new employees inconsideration of their mental health. We have also set up a counselingroom in each operating site where we carry out mini-interviews todetermine if employees are depressed or have panic disorder.
In addition, we carry out level-specific mental health training for all managers
and supervisors from department managers to team leaders, and we willcontinue to carry out focused care in departments with large workloads.

Rewards for employee inventions
Clear rules for attributing patent rights
and calculating the reward
To recognize our employees’ inventions and to improve ourtechnical competitiveness, we have established a patent
management system and a patent reward program. We haveclarified how patent rights are attributed and how the value ofthe award is calculated. The program includes know-how andinventions considered to be trade secrets. There is no upper
limit to actual awards. Innovations are chosen through anappraisal and deliberation process.
In fiscal 2007, there were 1,720 patent applications, 288
patent registrations, and 50 rewards for achievement.

Dialogue with employees
Listening to our employees throughinterviews and help lines
Regular employees are interviewed twice a year by their superiors,
who evaluate them on their individual targets and set targets forthe next time period. To ensure that these evaluations are fair,the interviews are done according to the personnel performance
evaluation manual and employees are evaluated by multiple people.
We have also set up internal and external help desks asways for employees to make inquiries, get advice, and make areport (see p. 20) as well as to respond to various problems
including human rights violations and sexual harassment.

Column

Our new “Advancement of
Women” project

To increase our competitiveness and to develop ourselves
further, we believe that diversity in our labor force is important,particularly giving women opportunities to excel. For thispurpose, we started our “Advancement of Women” projectin October 2007. The project members include the Personnel
Headquarters and 17 female representatives from various
departments. These members work to improve employee
awareness, change the corporate culture, create systems ofopportunities, and develop the abilities of women.
During the monthly project meeting, issues are identified
and measures to resolve them are discussed. Sectional
meetings for separate regions look at how
to implement and promote
specific measures.

30

Social Aspects

Responsibility to Shareholders
Appropriate disclosure of information and improving Enterprise Value
Disclosure of information

Shareholder returns

We started an email news service thatprovides timely information

Working to achieve stable dividends andimproved shareholder value

NTN works to rapidly disclose information in a way that is fair
and appropriate to all shareholders and investors inaccordance with all applicable laws and regulations.
In the course of our IR activities, we place the greatestemphasis on explaining our work, financial situation,
management strategy, and our vision of the future in an
accurate and easy-to-understand way. We also work to give
feedback from shareholders and investors to ourmanagement to achieve a two-way dialogue.
We respond to individual interview requests frominstitutional investors and analysts and we explain our
accounting through accounting meetings and teleconferences
held quarterly. We also participate in the small meetings heldby securities companies. This is all done in order toproactively disclose information in a variety of forums.
We held plant tours in October 2007 and February 2008 to let
people get a better understanding of NTN. NTN also had an
informational booth at events geared toward individual investors.
In March 2008, NTN started an email service todisseminate corporate information. We plan to also release to
publications information related to accounting and new
products – important news that could affect the bottom line.

NTN is working to create new Enterprise Value throughcreativity, results, and growth. In April 2007, we started our
new medium-term management plan, “Growth throughCreativity and Achievements 21.” Our basic policy in thisrespect is to work to meet the expectations of our shareholders
through stable dividends and an increasing share price.
Our basic approach to shareholder dividends is to provide
stable medium- to long-term growth and dividends are
determined considering our consolidated performance as well
as dividend trends. The annual cash dividend for the fiscal
year ended March 2008 was ¥19 per share.

Recognition from outside agencies
Selected by SRI funds and indices
NTN has been recognized in the stock market as a company
that is working proactively to satisfy its corporate social
responsibilities and has been selected by socially responsible
investment (SRI) funds and included in SRI indices.
We were selected by Morningstar in Japan, and
FTSE4Good and ETHIBEL outside of Japan (as of June 2008).

Using visual displays of information atshareholder meetings to make thingseasier to understandOur 108th annual shareholder meeting was held on June 28, 2007.
At the meeting, we exhibited our products and introduced
our businesses with displays. Four LCD screens showed avideo outlining our new medium-term management plan,“Growth through Creativity and Achievements 21” as well as
how it is progressing. During the meeting, photos and graphs
were shown on the screens to make it easier to understandthe points made by the chairperson. We will continue to work
to create shareholder meetings that are easy to understandand that people want to participate in.

The 108th annual
shareholder meetingin progress

00
31

ColumnImproving our corporatebond rating

We have requested Rating and Investment Information,
Inc. to give us a bond rating in order to give investors an
objective financial evaluation.
Our fiscal 2007 was A-, the same as the previous
year. Because our European business expansion was
expected to stabilize profitability and cash flow, we were
given a “positive outlook.”
We will continue to improve asset efficiency throughearly returns on invested capital in order to increase ourbond rating.

Social Aspects

Responsibility to Local Communities
Working with local communities as a good corporate citizen
Supporting social contribution
activities
Supporting voluntary social contribution
activities by employees“Making a positive contribution to society” is a part of our
Corporate Philosophy, CSR Policy, and Employee Code of
Conduct. Social contribution activities, in our thinking, are“investments in society.” Out of all the problems facing
society, we select what we as a company should be doing
and we call on employees to voluntarily participate.
Currently, NTN and NTN employees are contributing tosociety in diverse ways such as through local greening
initiatives and social welfare initiatives, as well as support for
local education, sports, and culture. In addition to satisfying
our responsibilities to society through our work by being agood corporate citizen, NTN employees are volunteering tohelp local society, culture, and education, and sporting
events. As a corporation, we support their efforts.
In our overseas operations, we comply with all internationalrules and local laws, and we contribute to local communities
while always being respectful of local cultures and customs.

A system to respond to fires andearthquakes
To be prepared for fires and earthquakes, we have fire anddisaster prevention rules and risk management rules so that
we can carry out preventative measures and respond
appropriately if disaster does strike.
Our fire and disaster prevention rules set out thefundamental rules related to disaster prevention based on theFire Service Law. In addition to preventing fires andaccidents, these rules exist to minimize damage in the eventa disaster does strike. In particular, earthquake disastermanuals have been created for individual operating sites sothat if an earthquake does occur, an appropriate response ispossible.

Working to make sure local
communities are safe
Securing the safety of local communities
through traffic safety and fire prevention
activities
At NTN and NTN group companies in Japan, we cooperate intraffic safety and crime prevention activities to contribute to
local communities.
In fiscal 2007, we participated in traffic safety days (4 to12 times a year) at Kuwana Works (Kuwana City, Mie
Prefecture), Iwata Works (Iwata City, Shizuoka Prefecture),
Okayama Works (Bizen City, Okayama Prefecture), Nagano
Works (Kamiina County, Nagano Prefecture). During these
traffic safety days, employees stand watch on the streets andmake sure that local children and residents are safe.
At NTN Kongo Corp. (Kawachinagano City, Osaka
Prefecture), employees called on people to be careful with firein their “Autumn roadside fire prevention campaign.”

Firefighter training at Kuwana Works

Dialogue with local communities
Each of our operating sites responds tolocal concerns
The general affairs departments at our various operating sites
act as the contact between local residents and NTN.
In fiscal 2007, there were no particular problems involving
noncompliance with laws and regulations, but whenever we
had any complaints from our neighbors, we listened to themwhether or not there was a problem with the law, and wemade all efforts to enact appropriate countermeasures.
We will continue to earnestly listen to the requests of local
residents and to satisfy our responsibilities as a neighbor.

Traffic safety activity
around Nagano Works

32

Social Aspects

Responsibility to Local Communities

Example of social contribution
activities
Takarazuka Works

Donation of hybrid street lights
In June 2007, Takarazuka Works (Takarazuka City, Hyogo
Prefecture) donated a hybrid street light to the City of
Takarazuka to help create a bright, safe street and to help
preserve the global environment.
This street light not only illuminates its surroundings withthe electricity it generates from sunlight and wind, but it’salso a symbol of consciousness of the global environment.

NTK PRECISION AXLE CORP. (NTK) (USA)Participated in a Japanese cultural eventat the local library
On May 11 and 12, 2007, NTK (Indiana) participated in a
Japanese cultural event with two other Japanese
corporations at the Frankfort Library.
We not only donated money to contribute to the local
community, but we also helped personally with setup andactually running the event. These efforts were reported thenext morning on the front page of the local newspaper.

Hybrid street light
donated to theCity of Takarazuka

A local resident
looking closely ata bonsaiNTN-NIDEC (Zhejiang) Corp. (China)

Helping students attend elementary school
Since its establishment five years ago, NTN-NIDEC (Zhejiang)
Corp. (Pinghu, Zhejiang) has been donating money every year
to local elementary schools to help children who are unable
to attend, and we continued this donation this year.
We will continue to support the desire of children in thelocal community to learn.

ColumnA talk on “MONOZUKURI” and bearings at a junior high school

On February 19, 2008, employees went to Mikita Junior High School in Sakai City,
where we gave a talk on “What MONOZUKURI companies do.” We gave a talk lastyear here as well.
This was part of a series of lectures on “Work in society” held jointly with thenon-profit Osaka Development Institute to get students to think about themselvesin the future. Speakers were invited from eight industries, and our company waschosen to give a talk on manufacturing. We discussed the principles, roles,
structure, types, and manufacturing processes related to bearings, and thechildren got to hold actual bearings in their hands. After that, we introduced thedifferent types of work done in a MONOZUKURI company such as R&D, design,
production, sales, and management. Our role was appreciated by the school, who
said that our talk “was helpful for our junior-high students because they were able
to become more conscious of their future careers and their life plan.” We willcontinue to carry out these activities in every region.

33
00

We introduced
Japanese culture
through activities suchas origami classes

A class at a junior high school

35

Environmental Management

39

Targets and Results

41

Input & Output

42

Preserving the Global Environment

44

Creating a Recycling Society

45

Reducing the Environmental Impactof our Supply Chain

47

Developing Environmentally
Friendly Products

Environmental
Aspects
The NTN Group focuses on the research and development
of bearings, which is the ultimate environmental product interms of the environment. We are also reducing theenvironmental impact of the processes we use to manufacture
bearings. In order to more effectively carry out these efforts,
we have set and are committed to targets to achieve by
2010, and we are managing our progress year by year.

NTN’s FY 2010 Environmental Targets

Preserving of
the global
environment
Maintaining
and improving
the environmental
management
systemCreating
a recycling
society

Reduction of
CO2 emissions
Domestic: Total emissions: 317,000
tons/year or less*Overseas: To reduce CO2 emissions
rate by at least 15% over fiscal 2006

Completephase-outof halon fire
extinguishers

Reduction inpurchase of paper
50%reduction
over fiscal 1998*

Calculated from eachpower company’s
target emission factor
for fiscal 2010.

Reduction ofwaste materials
Domestic: A recycling rate ofat least 99%
Overseas: A recycling rate ofat least 98%

Completephase-outof styrofoam

Acquisition of ISO14001
certification at all NTN
operating sites (Global)

34

Environmental Aspects

Environmental Management
Improving our environmental management
Basic Concept
Advocating harmony with the global environment is our most important issue and we will make constant efforts tocontribute to the harmonious development of society, while aiming to reduce environmental impacts and create arecycling society.

Action Guideline
In connection with its manufacture and sales of bearings, constant velocity joints and precision equipment, the NTNGroup will comply with the following guidelines, which state our commitment to continuously reduce the impact ofour products and business activities on the environment, and to maintain a safe environment for the future.
1. NTN will contribute to world-wide energy conservation by
developing and providing eco-conscious products using
tribological technologies and high precision processing
technologies.
2. NTN not only will comply with the requirements set forth inapplicable governmental laws and regulations but also withcustomers’ requirements and internal standards, as NTN
deems necessary.
3. Beginning at the research, development and design stages,
NTN will endeavor to reduce environmental impacts.
4. In its purchase of raw materials, parts and equipment, NTN
will take into account protection of the environment,
preservation of resources and more efficient use of energy.
In its production and sales activities, NTN will endeavor to
reduce energy consumption and waste generation while
promoting recycling.

Environmental preservation structure
An environmental management committee
at each operating site promotes activities
throughout the company
In 1993, we established an environmental preservationcommittee at the Head Office and in the Engineering,
Manufacturing, Sales and Logistics Departments. Companywide environmental preservation activities were started.
In 1998, this committee was renamed the Environmental
Management Committee, and on-site Environmental
Management Committees were established in the
Manufacturing and in the Sales and Administration Divisions.
By having related companies in Japan participate, we createdan environmental management structure that covers theentire domestic group. In our Manufacturing Division, we
have set targets for management of pollution prevention,energy and natural resources conservation, and hazardous
substances through action committees. In our Sales andAdministration Division, we have set targets for the
management of logistics and office environments. We set
various targets and are acting to achieve these targets. (seepp. 39-40).

35

5. NTN will endeavor to implement production methods anddistribution systems that have less environmental effect interms of pollution, waste and use of resources and energy.
6. NTN will conduct environmental audits and will maintain andimprove corporate environmental management systems.
7. NTN will cooperate in programs for environmental protection
conducted by national and local government entities and will
actively participate in regional environmental activities.
8. NTN will conduct environmental education. NTN will promote
improved awareness of this Environmental Policy andenvironmental protection to all persons working on behalf of
the NTN Group.
January 1, 2008
Yoshikazu Fukumura
Chief Environmental Management Officer
Director
NTN Corporation

Diagram ofenvironmental
preservation
structure

President
Pollution
Prevention
Subcommittee

Business
Strategy
Committee
Environmental
Management
Committee
Environment
Management
Department

Environmental
Management
Committee

Hazardous Substances
Management
Subcommittee
Logistics
Environmental
Subcommittee

Sales and
Administration
Division

Manufacturing
Division*1 On-site

Energy andNatural Resources
Conservation
Subcommittee

Internal
Environmental
Auditing Team

*1 On-site

Environmental
Management
Committee

Internal
Environmental
Auditing Team

Pollution
Prevention
ActionCommittee

Safety /environment
management
sections*2

Logistics
Environmental
ActionCommittee

Product Center
Distribution Center

Energy andNatural Resources
Conservation
Action Committee

Plants

OfficeEnvironmental
ActionCommittee

Head Office /Sales Offices /Sales Branches

Hazardous
Substances
ActionCommittee

related companies in Japan.
*12 Includes
some sites, the Management Section or General* At
Administration Section is in charge of this operation.

Environmental Management System
Our aim is to have all operating sitesaround the world obtain ISO14001
certification by fiscal 2010
The NTN Group is promoting acquisition of multi-site ISO14001
certification to structure the integrative environmental
management system of all operating sites by 2010.
We are working to develop a structure to get non-certified
operating sites – including newly-established sites – to join
our multi-site certification.
In fiscal 2007, NTN Fukuroi Corp. (Fukuroi City, Shizuoka
Prefecture) and NTN Kinan Corp. (Nishimuro County,
Wakayama Prefecture) joined our multi-site certification.
Also, NTN Kamiina Corporation (Kamiina County, Nagano
Prefecture) and NTN Bizen Corporation (Akaiwa City,
Okayama Prefecture/Nishiwaki City, Hyogo Prefecture)obtained simplified certification such as EcoStage to prepare
for multi-site certification.
Overseas, NTN-NIDEC (Thailand) Co., Ltd. newly obtained
ISO14001 certification.
As of the end of March 2008, 17 out of our 19 operatingsites in Japan have obtained ISO14001 certification, and outof those, 16 operating sites joined our multi-site certification.

cross-audits on each other to check our environmental
management structure from multiple angles.
The ISO14001 certification maintenance and expansion
audits carried out in fiscal 2007 only found 10 minor
observations at all operating sites. Our energy conservation
practices (including the use of natural energy), our support of
suppliers in their efforts to obtain environmental certification,and our contributions to local communities were all highly
commended.
In fiscal 2007, all operating sites in the group carried out
internal audits and although 133 observations were found,none were major. Also, the cross-audits carried out at six
operating sites found 14 observations, but none of them weremajor observations that indicated serious problems.
In order to augment and improve our internal
environmental auditors, 28 new auditors were trained at thecompany’s 2-day auditor training session in January 2008. Asof the end of March 2008, there are a total of 182 internal
auditors throughout the NTN Group.

Environmental risk management system
Ready for natural disasters andchance accidents
The NTN Group has set out “Environmental management
rules,” “Risk management rules,” and “Pollution prevention
management rules” so that we have the procedure in place
for responding to natural disasters and accidents. We carryout training and equipment inspections regularly.
We did not have any reportable accidents orenvironmental infractions in fiscal 2007.

Environmental audits
Three different audits showedno major problems
In addition to ISO14001 audits conducted by externalorganizations, operating sites conduct internal audits andOperating sites with certification
RegionOperating site
Company

Plant

Multi-site certification

Date ofcertification

Registration

Year Month Registration No.
1999 11

JSAE176

Registration
body

JSA

(Operating sites included)
Kuwana Works, Iwata Works, Okayama Works, Takarazuka Works,
Nagano Works, NTN Kongo Corp., NTN Mikumo Corp.,
Japan NTN Engineering Plastics Corp., NTN Powder Metal Corp.,
Hikari Seiki Industry Co., Ltd., NTN Casting Corp., NTN Omaezaki Corp.,
NTN Mie Corp., NTN Fukuroi Corp., NTN Kinan Corp., Head Office
NTN Tado Corp.
U.S.A.

2005 3

JSAE1058

JSA

2000 6
Elgin Plant
AMERICAN NTNBEARING MFG.CORP. Schiller Park Plant 2000 9111994

LRQA112115LRQA

Macomb Plant

2000 6111998LRQA

Hamilton Plant

2000 6111999LRQA

NTN-BOWER
CORP.

RegionOperating site
Company

Plant

Date ofcertification

Registration

Year Month Registration No.

Registrationbody

NTN DRIVESHAFT, INC.

1999 12

A8478

NTN-BCA CORP.

2000 7

A8699

UL

Canada NTN BEARING CORP. OF CANADA LTD. 1999 7

287

KPMG

1999 6

201167-2

LRQA

2003 1

19479

AFAQ

NTN MANUFACTURING (THAILAND) CO., LTD. 2003 3

31634

TÜV

NTN-NIDEC (THAILAND) CO., LTD. 2008 3

C2007-02666

PJR

NTN-NIDEC (Zhejiang) Corporation 2005 1 02005E10013R0L

CNAB

U.S.A.

NTN KUGELLAGERFABRIK(DEUTSCHLAND) G.m.b.H.
France NTN TRANSMISSIONS EUROPE

Germany

ThailandUL

China Guangzhou NTN-Yulon Drivetrain Co., Ltd. 2005 4

104043247

TÜV2005 7

CH05/0489

SGS

Shanghai NTN Corporation

Operating sites expected to be certified
RegionOperating site

Expected date of certification
Year

Month

U.S.A. NTK PRECISION AXLE CORP.

2008

5

China NTN-RAB (Changzhou) Co., Ltd

2009

3

RegionOperating site

India NTN MANUFACTURING INDIA PRIVATE LIMITED

Expected date of certification
Year

Month

2010

3

36

Environmental Aspects

Environmental Management

Environmental accounting
Our 4.474 billion yen environmental investment in fiscal 2007
yielded 873 million yen in economic benefits
In fiscal 2007, we expanded the scope of environmental
accounting and increased the number of sites from 14 to 16

along with expanding the number of sites with multi-site
certification. The capital investment into the environment was
1.427 billion yen, while other expenses related to theenvironment were 3.047 billion yen.
[Accounting standard for environmental accounting]·Applicable period: April 2007 to March 2008
·Organizational scope: All 16 manufacturing sites in Japan that have
ISO14001 certification (multi-site)

Environmental preservation costs
Classification

Cost from within
work areas(Million yen/year)

AmountPollution prevention
costs

50

Global environmental
preservation expenses

168

Resource recycling
expenses

62

AmountDetails
Environmental equipment (dust collectors,
particulate smoke removal devices,and wastewater treatment equipment)
Energy conservation equipment (adoption of inverters
for motors, illumination, air conditioning), etc.
Grinding swarf briquetting machine,
recycling of waste, equipment to
reduce waste

0

Upstream / downstream costs

38

Costs for management activities

1,109
0
0

R&D costs
Costs for social activities
Environmental remediation expenses

128
106
522
0.1

Devices for monitoring and measuring
environmental impact
R&D equipment related to environmental preservation

358
1,814
5
114

Details
Maintenance, inspection, and management ofenvironmental equipment (dust collectors,
particulate smoke removal devices, andwastewater treatment equipment)
Equipment cost for equipment converted for use withinvertors (motors, illumination, air conditioning)
Equipment cost related to the grinding swarf briquetting
machine, waste material recycling/reduction measures,
general and industrial waste treatment
Costs for green procurement documents
Labor cost for the EMS andinformation disclosure (advertising, CSR reports),
greening and beautification of company grounds
R&D costs related to environmental preservation
Greening and beautification outside the company
Costs for soil samplingGrand total

Total

1,427

3,047

4,474

(For reference) Total from last fiscal year

1,412

3,163

4,575

Impact on environmental preservation
Indicator

Result for fiscal 2007

CO2 emissions rate

22.0% reduction over fiscal 1997

Reduction of waste

Recycle rate: 98.4%

Reduction in paper purchases

35.2% reduction over fiscal 1998

Reduction in Styrofoam purchases

84.5% reduction over fiscal 1999

Environmental communications
An internal presentation to raise environmental awareness
Environmental education at the NTN Group is specific to eachworker’s department and position. We constantly work toenrich our programs.
In fiscal 2007, we held meetings to promote our green
procurement measures. Internally, we provided training to ouremployees for measures to prevent inclusion of environmentallyhazardous substances. We also had ourmanagers attend an internal presentationon the topic “The Global Environment
Problem and Corporate Social
Responsibility” given by environmental
journalist Junko Edahiro. The presentation
Presentation given by
was recorded so that it could be seenenvironmental journalist
at other NTN operating sites as well.
Junko Edahiro

37

Costs

Equipment investment

Financial effect of environmental preservation activities(Million yen/year)

Item

AmountProfit from recycling saleable
materials
Reduced costs from energy
conservation
Reduced waste treatment costs throughresource conservation and recycling

368
142
363

Total

873

(For reference) Total from last fiscal year

476

Details of fiscal 2007
Profit from saleable materials
such as metallic sludge
Reduced costs from energy conservation(air conditioning, illumination)
Benefit of installing grinding
swarf briquetting machine

Okayama Works

Listening to local residents and working tomaintain the residential environment
In July 2007, Okayama Works received complaints of noisefrom local residents.
This was immediately investigated and it was found that
one of the water-cooled chillers (a device that prevents thecompressor temperature from rising excessively) had
malfunctioned, leading to noise. That same day, the machine
was stopped andrepaired.
We were able to gain
the understanding of theresidents through this
immediate response.
The water-cooled chillers
for the compressor at Okayama Works

Environmental preservation activities
Iwata Works

A plant tour for the family
In fiscal 2006, Iwata Works received the Governor’s Award as
the “company demonstrating excellence in promoting
appropriate treatment of industrial waste” from the Shizuoka
Industrial Waste Association. Every August, this association
holds a family tour of the environmental facilities of a company
or plant in Shizuoka and Iwata Works offered this tour in 2007.
In August 2007, 42 elementary school students and theirparents from Fukoroi City and seven officials from the
Shizuoka Prefecture Environmental Protection Division’s
Recycling Department, Fukuroi City Hall, and the Shizuoka
Industrial Waste Association – a total of 49 persons –participated in the tour of Iwata Works. They saw the
manufacturing line in the ball bearing plant, a dynamic display
showing how a constant velocity joint works, seismic isolation
devices in the R&D center, and the waste storage area. They
also got a better understanding of our company’senvironmental preservation activities from the recycled items
and product samples on display in the interpretation area.
We hope to continue these types of tours with local
residents so that they can get a better understanding of NTN’s
environmentally friendly products and environmental efforts.

NTN KONGO Corp.

NTN exhibits at environmental forum
held by residents’ group
NTN KONGO Corp. participated again this year with a display
at the “6th Environmental Forum” held by the Kawachinagano
Resident’s Association in Kawachinagano City, Osaka.
Following this year’s theme, “Oh, no! Global warming isn’t
stopping,” local residents, government agencies, andcompanies got together as exhibitors and spectators toconsider what can be done to prevent global warming.
Everyone presented what they were doing and exchanged
opinions each other.
The NTN booth featured products that help reduce
environmental impact as well as the facility’s environmental
conservation activities. A large number of children andstudents came to look at the exhibit and we saw somechildren furiously taking notes to do their summer projects on“Bearings and the Environment.”

Kawachinagano
Environmental Forum

Nagano Works

Donation of funds for the upkeep oftrees and trails in the Kayano Highlands
Family plant tour

NTN OMAEZAKI Corp.

Employee volunteers help plant andcare for flowers in the parkIn fiscal 2007, 16 employees from NTN OMAEZAKI Corp.
(Omaezaki City, Shizuoka) planted flowers in the flower beds
in Yachiyo Park, located beside Omaezaki City Hall.
They received professional advice, created a layout for
the flower beds and selected the flowers. In June, theyplanted over 500 flowers and improved the site. They
continue to remove weeds and replant flowers. In addition to
the cleaning activity
around the site thatis an ongoing
activity, we willcontinue to maintainthese flower beds.
Employees who participated inplanting and caring for the flowers

Nagano Works donated funds to help Minowa Town, locatedin Ina County, Nagano, with the maintenance of trees andtrails. A “Mountain-opening ceremony” in April 2007 in thepresence of town residents commemorated the agreement.
In addition to in environmental activities related to Tenryu
River (river clean-up and water quality measurements),
Nagano Works has participated in Nagano Prefecture’s“Adopt-a-Forest” program as part of its greening activities.
We hope that the areas maintained in this newest initiative will
be enjoyed by local residents as well as by our employees
and their families as a place to commune with nature, learn
from it, and get and keep fit.

ColumnShowcasing our corporate stancetoward preserving the environment

In fiscal 2007, with a theme of “Ecology blue,” NTN tookout a series of corporate ads in national newspapers.
Photographs and statements of the famous underwaterphotographer Ikuo Nakamura showcased our desire topass on the beauty of nature to future generations.

38Environmental Aspects

Targets and Results
Working toward achieving environmental targets in three areas
Fiscal 2007 results and fiscal 2008 targets
Newly established reduction targets
for total CO2 emissions
The NTN Group has environmental targets that we areworking to achieve by fiscal 2010 in three areas: preservationof the global environment, creating a recycling society, andmaintaining and improving the environmental management
system. These targets were set in fiscal 1998, and since then,we have been methodically carrying out environmental
activities.
Our results with respect to our fiscal 2007 targets isshown below. Of the 17 targets that we had for fiscal 2007,
we achieved 11 of them and failed to achieve 6 of them.
In terms of reducing our CO2 emissions, we have reduced
our CO2 emissions rate (our CO2 emissions per unit ofvalue-added production) by 22% over fiscal 1997 levels. Our
North American operating sites contributed greatly, achieving
a significant reduction over 9.2%, exceeding our target. Also,
our total emissions of CO2 in Japan were 240,000 tons/year(at the 10 original operating sites), and we were able toachieve our target. However, the four new operating sites that2007 Environmental results

Maintaining and improving
the environmental management system

Creating a recycling society

Preservation of the global environment

Purpose

ReduceCO2 emissions

Domestic

Overseas
Reduceair, water, andground pollution
Participate in local
environmental
activities

Domestic

Not achieved

Evaluation Page

·Reduce CO2 emissions rate*1 by 22% over fiscal 1997 ·Reduced CO2 emissions rate by 22.0% over fiscal 1997
·CO2 emissions: 261,000 tons/year*2·CO2 emissions: 240,000 tons/year (10 original operating sites)(10 original operating sites*3)
353,000 tons/year (14 operating sites)*4

P42·Expand energy conservation assessments·Energy conservation improvements at Kuwana Works and NTN Casting(promote large-scale energy conservation improvements ·Energy conservation assessments and improvements
carried out in NTN Mieand horizontal implementation at overseas sites)·NEDO energy conservation assessment at NTN Mie Corp ·Results have been attained at other operating sites

P42·Totally and methodically eliminate air leaks·Company wide air-leak checks were done using air leak detectors

P43·Reduce CO2 emissions rate by 1% over fiscal 2006

·Reduced CO2 emissions rate by 9.2% over fiscal 2006

P42

·Replaced 116 halon fire extinguishers with CO2 fire extinguishers ·Replace 112 halon fire extinguishers with CO2 fire extinguishers(with 235 units remaining at the end of the fiscal year)(with 231 units remaining at the end of the fiscal year)

P43·Reduce the use of substances designated by PRTR law ·Established a plan to reduce substances designated by PRTR law
Carry out trials and establish a long-term plan
·Carry out trial changes at Iwata, Nagano, and Omaezaki

P43·This was carried out at sites including Kuwana, Iwata,
Okayama, Nagano, and Mikumo·“Kigyo no mori” (corporate forest stewardship) activities
are being considered bythe primary operating sites—·Participate in local greening activities(company-wide)

Domestic·Work towards achieving zero emissions with·Worked towards achieving zero emissions witha recycle rate of 99%
a recycle rate of 98.5%(Both Mikumo and Casting improved their recycle rates) (Mikumo achieved its goals, while Casting did not)

P44

Overseas·Work towards achieving zero emissions witha recycle rate of 94%(The North American sites and NMT improved
their recycle rates)

P44

Domestic·Reduce paper consumption by 39% over fiscal 1998 ·Reduced paper consumption by 35.2% over fiscal 1998

·Worked towards achieving zero emissions witha recycle rate of 92.8%(NMT achieved large-sale improvements, while some
North American sites did not reach their goals)·Reduced styrofoam usage by 84.5%(NTN Engineering Plastics achieved their goal,
while Iwata, Omaezaki, and Mie did not)——Domestic·Reduce styrofoam usage by 90% over fiscal 1999

Domestic·Have Fukuroi and Kinan join ISO14001 multi-site certification ·Fukuroi and Kinan successfully joined ISO multi-site certification·To have Kamiina and Bizen obtain simplified environmental·Kamiina obtained Eco-action 21 certification and Bizen obtained
certification
EcoStage 1 certification

Overseas·To have NNTC and NTK obtain ISO14001 certification·NNTC obtained ISO14001 certification·NTK is expected to obtain certification in May 2008

P36

·Work to completely eliminate environmentallyhazardous substances from products other thanthose fall under EU regulations (RoHS and ELV)
·Implement the NTN Green Procurement Standard·Carried out internal and external meetings

P45

Internal systems

Promotegreen procurement

ResultDomestic

Reducewaste materials

Preserve
resources

Achieved/In progress

TargetDomestic

P36·Be responsive to customer audits·Passed customer audits

P46

Encourage suppliers and vendors
Domestic
to implement environmental
management systems·Encourage suppliers to obtain certification such as
ISO14001; achieve 86% certification acquisition·Encouraged suppliers to obtain certification such as
ISO14001 and to achieve 85% certification acquisition

P45

Comply withnew regulations·Comply with the amended Act on the Rational Use of Energy ·Enacted a reduction plan,
which we are currently carrying out(Have logistics companies establish a reduction plan)

Domestic

P43

CO2 emissions(tons)
1 CO2 emissions rate (tons/1 million yen)=
Value-added production is the production output minus the proportional cost.
Value-added production(1 million yen)
2 The CO2 emission factor was calculated at (0.381kg CO2/kWh) for all companies.
3 This does not include operating sites that joined our multi-site ISO14001 certification in 2003 or after, which are NTN Casting Corp., NTN Omaezaki Corp., NTN Mie Corp., and NTN Fukuroi Corp.
4 Calculated with the emission factors from each power company in fiscal 2006.

*
*
*
*

39

joined our multi-site ISO14001 certification since 2003 were
not included in the initial target, and the total emissions forthe 14 operating sites including these four was 353,000 tons.
Since 2008, to work as an industry leader towards
preventing global warming, we set a total reduction target for
our Japanese sites including new operating sites. Our fiscal
2008 target was to limit CO2 emissions to 352,000 tons orless. This is the same level as the 353,000 tons that our 14
operating sites emitted, but because we expect large
increases in production volume (mostly at our new operatingsites), this is a truly challenging target for us. We are alsoplanning more emissions reductions – fundamental ones –starting in fiscal 2008. Though our total emissions in Japanfor 2010 was initially projected to be more than 400,000 tons,
we have established a plan to cut this to 10% below the fiscal
2007 level, or 317,000 tons. (The 2010 emissions rate isbased on each power company’s emission factor target forthat fiscal year.)In addition, in fiscal 2008 we added other targets related
to reducing the use of substances designated by PRTR law,
implementing internal audits related to the management ofenvironmentally hazardous materials, and thoroughly
establishing bearing inspections. We are also working to
reduce the use of harmful chemicals in our manufacturing
processes and to prevent the mingling of environmentallyhazardous substances in our products.
In these ways, the NTN Group is working to help preserve
the global environment by bolstering our efforts at each
operating site and by improving environmental activities as asingle supply chain including our suppliers.

Fiscal 2008 environmental targets

Maintaining and improving
the environmental management system

Creating
a recycling society

Preservation of
the global environment

PurposeTarget for fiscal 2008

Target for fiscal 2010

Domestic·Achieve total CO2 emissions 352,000 tons/year or less
(14 operating sites)·Reduce CO2 emissions rate by 23% over fiscal 1997
(10 operating sites)·Achieve total CO2 emissions 317,000 tons/year*5 or less
(14 operating sites) (A 10% reduction over fiscal 2007)·Reduce CO2 emissions rate by 25% over fiscal 1997
(10 operating sites)

Overseas·Reduce CO2 emissions rate by 13% over fiscal 2006

·Reduce CO2 emissions rate by 15% over fiscal 2006

·Replace 99 halon fire extinguishers with
CO2 fire extinguishers(with 136 units remaining at the end of the fiscal year 2008)·Completely phase out halon fire extinguishers·Reduce the use of PRTR law-designated substancesby 33.5% over fiscal 2006

·Reduce the use of PRTR law-designated substancesby 40% over fiscal 2006

·Promote local greening activities (e.g. “Kigyo no mori”(corporate forest stewardship) activities)·Continue current activities·Work towards achieving zero emissions witha recycle rate of 99%·Maintain zero emissions·Reduce landfilled amount to 43 tons/month·Reduce landfilled amount to 25 tons/month

Overseas·Work toward achieving zero emissions witha recycle rate of 96.3%·Achieve zero emissions with a recycle rate of 98%

Domestic·Reduce paper consumption by 42.4% over fiscal 1998

·Reduce paper consumption by 50% over fiscal 1998

Domestic·Reduce styrofoam usage by 88.4% over fiscal 1999

·Completely phase out styrofoam

Domestic·Develop a structure to have new operating sites
obtain certification

Overseas·Have NTN-RAB and NTK obtain ISO14001 certification

Promotegreen procurement

Domestic·Inform everyone concerned inside and outside
the company of our Green Procurement Standard·Carry out internal audits related to the management ofenvironmentally hazardous substances·Thoroughly establish the practice of carrying out
incoming inspections using analytical devices·Thoroughly establish the management of inventory
containing environmentally hazardous substances·100% pass of all customer audits

Encourage suppliers andvendors to implement
environmental
management systems

Domestic·Encourage suppliers to obtain certification such as
ISO14001; achieve 86% certification acquisition

Comply with new regulations

Domestic·Totally comply with REACH regulations(pre-registration)

Reduce CO2 emissions

Reduce air, water, andground pollution

Domestic

Participate in local
environmental activities

Domestic

Domestic
Reduce waste materials

Preserve resources

Internal systems·Have all operating sites around the world obtain
ISO14001 certification—·Have all suppliers have some kind of environmental
certification—*5 Calculated based on each power company’s target emission factors for fiscal 2010.

40

Environmental Aspects

Input&Output
Reducing environmental impact over a product’s entire lifecycle
Business activities andenvironmental impact
Understanding and reducing ourenvironmental impact
Our company has a comprehensive picture of the inputs of
raw materials, energy, and water as well as our environmental
impact (output), and we are working to reduce the latter

through the entire product lifecycle.
The purchase of raw materials (steel and non-ferrous
material) by our domestic sites in fiscal 2007 was 398,000
tons, an increase of about 8.2% over last year because of theincrease in production volume. Also, because recycling ofwaste sand and slag generated by our casting processes did
not go as well as expected, the waste disposal amountincreased about 200 tons from last year.
At operating sites in JapanOUTPUT

Steel / non-ferrous materials
398,000 tons Purchased amount

Products(10,000 tons/year)

36.2

Steel
394,000 tons
non-ferrous
materials
3,600 tons

36.7

39.8

27.8

Material
recycling

2005

2006

Energy

2.07

2004

1,969

2007

2.20

2005

2.39

711

2006

2.58

2007

(Fiscal year)

Electrical consumption(GWh/year)

512

2004

Water
2,370,000 m3

2,843(Fiscal year)

Fuel (gasoline, gas) Purchased amount(crude oil equivalent) (10,000 kL/year)

Electricity
583 GWh

Disposal (tons/year)

Scrap metal
32,400 tons
2004

25,800kL

Disposal ofindustrial waste
923 tons

532

2005

562

2006

583

2007

Thermalrecycling
Waste oil
6,400 tons

225

CO2 emissions
353,000 tons

2007

(Fiscal year)(10,000 tons CO2/year)

2004

237

2006

CO2 emissions
31.1

Wastewater
2,060,000 m3

2005

923

33.8

34.0

2005

2006

35.3

2007

(Fiscal year)

Wastewater (10,000 m3/year)
201

198

198

2004

2005

2006

206

Water

229

2004

(Fiscal year)

Water usage (10,000 m3/year)
211

Production process

Raw materials

INPUT

2004

41

2005

2006

2007

(Fiscal year)

Use ofcirculatingwater
1,670,000
tons

2007

(Fiscal year)

Environmental Aspects

Preserving the Global Environment
Promoting energy conservation in Japan and around the world
Reducing CO2 emissions
A new indicator to track and control“total emissions”
We set two goals for fiscal 2007 at the 10 original domestic
operating sites: achieving a 22% reduction in CO2 emissions
rate over fiscal 1997 and achieving total emissions of 261,000
tons or less. Through efforts to reduce our energy
consumption, we achieved both of these goals, with a 22.0%
and a 240,000 ton reduction respectively (calculated with a
CO2 emission factor of 0.381 kg CO2/kWh in electricity).
If we include the emissions from the four additional operatingsites that we have incorporated into the ISO14001 multi-site
certification since 2003, our total emissions were 353,000
tons based on the various power companies’ emission
factors in fiscal 2006.
In April 2005, the NTN Group set itself the goal of
reducing CO2 emissions rate by 25% over fiscal 1997 by2010, a target far above the domestic industry target, which
was a 13% reduction. We have been working toward thistarget ever since. Upon further consideration of the crises
associated with recent global warming trends, we have set
ourselves the more concrete target of reducing total CO2
emissions including those from new operating sites to317,000 tons or less by 2010*. This move to control total

Change in total CO2 emissions (10,000 tons/year)
Original 10 operating sites

28.1
26.2

24.6

25.6

27.0

14 operating sites

31.1
29.9

33.9
31.0

*40.7
34.0
30.4

35.3
30.5

31.7
25.0
Target2000 2001 2002 2003 2004 2005 2006 2007

2010

(Fiscal year)<Based on the yearly CO2 emission factor from each power company>
Presumed emissions when any measures are not taken.

*

emissions is in response to an increased awareness of energy
conservation around the world and the realization that demandfor bearings, which contribute to energy conservation, willcontinue increase, causing our group’s bearing production
volume and CO2 emissions to increase yearly.
As for our overseas operating sites, progress with ouremissions rate reduction initiatives at our North American
operating sites have been significant. A target of a 1%
reduction over fiscal 2006 led to an actual reduction of 7.3%.
We will continue working to enhance our CO2 reduction
efforts to achieve our fiscal 2010 target.
tons: Calculated based on the fiscal 2010 target emission* 317,000
factors from the various power companies.

Energy conservation efforts underway ateach operating site
Our company has been receiving ongoing “energy conservationassessments” under a grant from the New Energy and Industrial
Technology Development Organization (NEDO) in order to haveenergy experts point out problems and to propose fundamental
countermeasures to reduce CO2 emissions. We have created anenergy conservation plan based on the results of these assessments
and we have made large energy conservation investments. Theenergy conservation evaluations ended for the nine main sites
with an assessment at NTN MIE Corp. in fiscal 2007.
In terms of the results of our energy conservation efforts,
the mercury lights in Kuwana Works’ heat treatment plant were
replaced with high-efficiency metal hydride lamps, resulting in a
reduction of 185 tons of CO2 per year. At NTN Casting Corp.,
lighting fixtures were converted to high-efficiency metal hydride
lamps and inverter-based fluorescent lights; in addition, thecompressors here were changed to high-efficiency compressors,
resulting in dramatic energy savings. We expect a yearly
reduction in CO2 of 690 tons from these equipment changes.
We have also introduced the newest air leak detectors tointensify our efforts to eliminate air leaks from the pneumatic
systems at all of our operating sites. We have achieved
significant results by actively using these detectors (See p. 43).

CO2 emissions by power source
For reference: Change in CO2 emissions rate(for the original 10 operating sites) (tons/million yen)

Municipal gas 5%

1.78 1.77 1.70

LPG/Butane/
Propane gas
6%

1.58 1.64 1.54
1.48 1.47 1.47 1.44
1.38

Fuel oil A 3%
Kerosene 2%

Yearly energy consumption
Electrical powerGas

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

(Fiscal year)

Electrical
power 84%583 GWh

LPG/Butane/
7,567 tPropane gas

Municipal gas 7,960,000 m3
3,693 kLPetro- Fuel oil A
leum Kerosene
3,279 kL

<Calculated based on a constant CO2 emission factor of 0.381kg/kWh>42

Environmental Aspects

Preserving the Global Environment

Reducing CO2 emissions from logistics
Going forward with a modal shift in our
logistics
99% of NTN Group products are transported by truck, andlogistics companies handle all of this cargo. Our annual
product output is 90 million ton-km, meaning that we fallunder the requirements for “Designated Consigners,” which
are large consigners that ship 30 million ton-km of cargo ayear; we are thus required to achieve an average reduction of
1% in CO2 emissions rate per year in the medium term.
Since 1998, the NTN Group has been committed toachieving the following goal by fiscal 2010: to reduce the CO2
emissions rate for logistics to 12% over fiscal 1998.
In addition, we have been working on a modal shift to railand ship transport, which both have less of an environmental
impact. In fiscal 2007, we switched our long-distancetransport routes joining Hokkaido to the Kanto region to railtransport, and we started using ferries to transport thehigh-volume transportation of heavy products.

CO2 emissions rate from logistics (kg/km)
Target

0.583
0.583

0.577
0.576

Actual

0.583

Reducing the use of
PRTR-designated chemicals
We will ensure that quality is not affected
as we reduce usage
In order to reduce the use of hazardous chemicals designatedby the PRTR law, the NTN Group selected eight substancesthat are used in large quantities in our production processes
and we established a plan to reduce their use. Our target for
fiscal 2008 is to reduce the use of these substances by
33.5% over fiscal 2006. Our target for fiscal 2010 is a 40%
reduction over fiscal 2006.
Targeted substances used in large quantities by the NTN
group include the amine-based additives found in machining
fluids and rust-proofing agents. We have already selected
alternative agents for these substances, but because of thelarge number of products that are tied directly to safety suchas automobiles, we plan to methodically carry out thesechanges making sure as we do so that we do not affectquality.
Law: A law that requires companies to measure and report the* PRTRemission and transfer of designated chemicals.

0.576

0.568

0.571
0.557 0.560

0.568
0.554

0.554 0.554

0.539

0.548

0.542

0.536

0.561

Total phase-out of
halon fire extinguishers
Making certain progress towards total
phase-out

0.531

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

(Fiscal year)

ColumnReducing the use of hazardous chemicals

The halon fire extinguishers used in special areas such as
electrical equipment contains brominated fluorocarbons that
destroy the ozone layer. There are no legal restrictions on
their use, but NTN has voluntarily committed to phase out
their use by 2010.
In fiscal 2007, we changed 112 units with 235 units
remaining. In fiscal 2008, we plan to change 99 units.

Checking for air leaks and repairing them

An average of about 30% of a company’s electrical power is used by thecompressors used to create compressed air; 30% of this (approximately 10%
of total electrical power usage) is lost to air leaks. This is why in fiscal 2007,
NTN purchased the newest air leak detectors for our primary operating sites,
and we are methodically carrying out checks for air leaks and making repairs,
and we are doing this even in areas that are difficult to reach.
are working to dispel the preconceived notion that “air and water are
00free”Wethroughinitiatives to increase worker awareness such as indicating thevolume of air and money lost at actual air leak locations.

43

Air leak checkat Kuwana Works

Environmental Aspects

Creating a Recycling Society
Working to realize a recycling society
manufacturers and automobile manufacturers achieve zero
emissions.

Zero emissions
In fiscal 2007, we achieved zero emissions
with a recycle rate of 98.5%

A 20% increase in recycle rate at NMT(Thailand)

The NTN Group defines zero emissions as putting no morethan 2% of our total waste in the landfill, and in fiscal 2006,
we achieved this in Japan.
We also achieved this in fiscal 2007. However, one of ourongoing issues is how to raise the recycle rate for the waste
sand and slag generated by our casting processes. We willcontinue to work to maintain our zero-emission status andraise our recycle rate through initiatives such as using waste
sand in road paving.
Additionally, we sell our grinding swarf briquetting
machine, which helps us greatly in raising our recycle rate,
outside the company, and it is helping machine part

At NTN MANUFACTURING (THAILAND) CO., LTD. (NMT), wewere able to raise the recycle rate from 69.3% in fiscal 2006
to a 92.8% in fiscal 2007. A 20% increase was achieved justby collecting and recycling oily rags and waste plastic thatused to go to the landfill.
We will continue to work to increase the recycle rate at
NMT.

Recycle rate and total landfilled amountThe NTN Group keeps track of the total number of thewooden pallets, steel box pallets, and containers used fortransporting and storing products that are shipped tocustomers, and we work hard to recover all of them.
The container collection rate for fiscal 2007 was 99%,
which is a 1% increase from the previous year. We have also
been able to decrease the amount of new containers that wepurchase.
However, we still have room for improvement when we
look at our entire supply chain including secondary andtertiary retail stores, so we will continue working towards
100% recovery with the cooperation of customers andlogistics companies.

Total landfilled amount (tons/year)

87.0

94.0

96.0

94.4

Recycle rate (%)

96.3

98.7

98.5

711

923

5,465

2,843

2,741

1,969

1,722

2001

2002

Column

2003

2004

2005

2006

2007

(Fiscal year)

Reducing the use of packaging
Achieved 99% recovery of productcontainers from customers

Development of the newest model ofour grinding swarf briquetting machine

The grinding swarf briquetting machine that we developed currently contributes
greatly to recycling both inside and outside the company. This machine works
by separating the metal particles in the grinding swarf from the liquid inside,
allowing the metal to be recycled as a raw material for steel. The liquid that is00squeezed out can be reused on the grinding line. Since we developed it in 2002,
we have promoted the use of this machine inside and outside the company, andwe have also sold a total of these 76 machines to other companies.
In November 2007, we started production of the new model, which we havedesigned to be smaller and lower in cost. This product has allowed us to increase
The newest briquetting unit:
our demand base, so we expect it to be used in even more production facilities.
Model PRG-II

44

Environmental Aspects

Reducing the Environmental Impact of
our Supply Chain
Promoting environmental management at suppliers
Promoting awareness at
our suppliers

Green procurement

Encouraging suppliers to obtainenvironmental management system
certification

NTN distributes the “NTN green procurement
standard” and calls on suppliers to keep out
environmentally hazardous substances

We have made a request to our primary suppliers to obtainenvironmental management system (EMS) certification suchas ISO14001 or its simplified version Ecostage*1.
In fiscal 2007, 12 more suppliers obtained environmental
management certification. This means that 85% of our 281
primary suppliers have obtained certification. We have visited
each supplier without any plans to obtain certification to tellthem about Ecostage certification and its simplified version tothem, the “EcoStage entry version*2” and to ask them toobtain certification. We even have a system in which some ofour ex-employees act as consultants to help companies toobtain certification.
In these ways, NTN is helping suppliers obtain EMS
certification to promote environmental management over our
entire supply chain.
The NTN Group is promoting the Household Eco-AccountBook (see p. 14) within the group; we also give this booklet tosuppliers who request it so their employees’ households canalso carry out these practices.

To prevent the entry of environmentally hazardous
substances in our products, we distribute the “NTN Green
Procurement Standard” both within and outside the company,
and we constantly call on suppliers to thoroughly comply with it.
This standard requests that all suppliers create anenvironmental management system and to manage andreduce environmentally hazardous substances. Also, forprohibited substances, which are particularly critical, we
make requests to suppliers to submit “voluntary check-sheets
for management structures related to environmentallyhazardous substances,” inspection records, and analysis data.
In December 2007, we held a green procurement meeting
to obtain understanding and cooperation from our primary
suppliers regarding our procurement policies.
Additionally, to thoroughly establish green procurement
standards within the company, we use education and training
sessions to notify associated employees about management
standards for environmentally hazardous substances at
suppliers and about requests that have been made to suppliers.
We plan to continue working to thoroughly establish ourgreen procurement standard both within and outside thecompany.

The environmental management system of the EcoStage*1 EcoStage:
Institute.
entry version: NTN proposed this EMS to the EcoStage*2 EcoStage
Institute for small companies with up to 15 employees. It was adopted
as a trial certification level in 2004.

Encourages suppliers to obtain
EcoStage certification
Supplier meeting

ColumnNTN received the “Osaka Environment Prize /Incentive Prize”

In June 2007, NTN received the “2007 Osaka Environment Prize* / Incentive Prize”
administered by the Osaka prefectural government. This prize was awarded for promoting
environmental management by suppliers, for helping to make third-party certification realistic
for small companies through the “EcoStage entry version” as well as for supporting thecreation and certification of environmental management systems in a practical manner.
We will continue to support activities in order to fully realize environmental management
at the NTN Group and at suppliers.
Environment Prize: A prize awarded to recognize individuals, groups, and companies for distinguished* Osakaachievement and for setting an example in environmental conservation and creative activity.

45

Managing environmentallyhazardous substances
Strengthened our receiving
inspection system
In order to establish thorough management overenvironmentally hazardous substances, we work hard tostrengthen our receiving inspection system. In fiscal 2007, we
expanded the capabilities of the fluorescent X-ray analysis unit
and we introduced a similar unit for the main operating site.
As our suppliers strengthen their management ofenvironmentally hazardous substances in accordance with
the Green Procurement Standard, we are reinforcing ouranalysis capabilities to have a thorough system in place toprevent environmentally hazardous substances from entering
our products.

The fluorescent X-ray analysis unit

Customer audits

Working to be REACH compliant
In June 2007, a regulation known as REACH was put into
force in the European Union (EU). This regulation requires
manufacturers and importers to register and carry out safety
evaluations on all chemicals used within the EU. It came into
effect in June 2008.
In fiscal 2007, the NTN Group, focusing mainly on
European sites, determined all of the materials, parts, andprocess substances purchased for our production processes
as well as the products that we provide customers for which
registration is necessary. We also obtained the assistance ofraw material manufacturers to create a pre-registration plan.
In order to achieve total compliance with this regulation, we
will continue to work together with our raw material
manufacturers to address all issues related to compliance.

ColumnResponding proactively with customer
audits – excellent audit results
We proactively cooperate with audits related to environmentallyhazardous substances that are carried out by customers. In
fiscal 2007, we were audited by seven customers.
An example of this is the audit of our Nagano Works by
FUJITSU LIMITED in May and August 2007. The result was
100% compliance, and we received the comment that“everything from the raw material procurement stage was freeof environmentally hazardous substances, and there is no riskof these substances entering the manufacturing processes.”
We will continue to work to thoroughly control
environmentally hazardous substances and to intensify ourmanagement system.

The “2nd annual NTN Environmental Grand Prize” ceremony

Our company established the “NTN Environmental Grand Prize” in order torecognize suppliers and internal departments that have been active in theirenvironmental preservation activities. In July 2007, we held the second annual
ceremony to recognize companies that have actively engaged in acquiring
ISO14001 or EcoStage certification, and we recognized four companies thathave achieved significant results.
We also recognized the departments of head office that have been
contributing to society by doing early-morning cleaning of the walkways aroundthe operating site for over a year.
Supplier /NTN department

Location

ReasonNakatsuji Iron WorksCo., Ltd.

Sakai,
Osaka Prefecture

Passionate about environmental management, anddespite their small size, obtained ISO14001 certification.

Sonoda Seisakusho

Amagasaki,
Hyogo Prefecture

Futaba Koken

Hamamatsu,
Shizuoka Prefecture

Isobe Seiko

Hamamatsu,
Shizuoka Prefecture

Obtained the EcoStage entry version No. 1.

NTN Head Office

Osaka

Carried out monthly early-morning clean-ups of
the walkways along Yotsubashi-suji Street.

Obtained EcoStage certification and is actively carryingout environmental management.

The award
ceremony

46

Environmental Aspects

Developing Environmentally Friendly
Products
Making eco-friendly products even more eco-friendly
R&D targets and results

Fiscal 2007 R&D

Working on products that last longer,
weigh less, and have less friction and loss

The first product to use biodegradable
products in the industry

Our primary products, which include our bearings and constant velocity
joints, reduce energy losses caused by friction, and as such can beconsidered environmentally friendly products. However, the status quo
is not something that NTN has ever been satisfied with. In order tocontribute even more to energy conservation, we have continued toresearch how to make products last longer, weigh less, and have lessfriction and loss. About 60% of our new product development theme
in fiscal 2006 and 2007 was eco-friendly products.

In fiscal 2007, we brought constant velocity joint technology
together with hub bearing technology and used press-cut
joining, a new joining method, to develop the V-series
all-in-one type hub joint.
The V-series hub joint is 12% lighter than conventional
products, and we have two types available to our customers
to suit their needs: the all-in-one type and the detachable type.

[Our main R&D accomplishments with our
primary products]
Longer life In the FA tapered roller bearing, we used a
special heat treatment called FA (fine austenite) strengthening
to reduce the grain size of bearing steel in order to increase
its rolling fatigue life.
all-in-one type

Ultra-light hub
bearing used for improved fuel economy
in light motor vehicles and compact
vehicles with 1,000cc-class engines.
Reduced weight

In addition, we developed the “environmentally friendly rolling
bearing,” the first in the industry, which uses biodegradable
materials for the cage, seal, and grease.
When this product is discarded and landfilled, it will be
broken down by microorganisms in the soil. Even if it isincinerated, it will not emit NOx and SOx, which areatmospheric pollutants. It is truly an alternative that contributes
to conserving the global environment.

Lower torque and friction

Our ultra-low-torque tapered roller
bearing has an improved bearing
cage that reduces rotation torquewith reducing oil agitation resistance.
Less loss The number of balls that transfer torque wasincreased from six to eight, resulting in the EBJ, EUJ, and
EDJ constant velocity joints with reduced torque-losses.

ColumnOur R&D themes going forward

Our company is engaged in research and development to address the environmental
problems of today as a top-priority issue.
In the automotive field, we are responding to the needs associated with low-fuelconsumption and with the next generation of vehicles such as electric vehicles. In
the industrial machine field, we are developing products suited to current
engineering trends such as the use of natural energy such as wind power generationand the modal shift to rail transport, which has excellent freight efficiency.
We have a long-term focus towards developing the technological basis for theseproducts, such as lubrication, surface reforming, and materials.
Hybrid power generator at NTN Mie Corporation’s Plant No. 2

47

detachable typeThird-party Opinions

NTN Corporation’s CSR Report: A third-party opinion
The CSR report of NTN Corporation was earnest andsolid, just like last year’s report. Bearings are notsomething that most people see every day, but
explaining in the introduction what kind of role you fill insociety – how you are reducing energy losses andprotecting the global environment through Tribology – isan excellent approach. The reader can see the role you
play in energy conservation, in rail transport, and in wind
power generation.
I was impressed with the message from NTN Top
Management as well. The ideas of creating a bearing
with light and wind and universal perspective express
what NTN executives are thinking and what they aretrying to achieve.
Last year I said that I wanted you to express yourCO2 reduction targets not in emissions rate but in total
emissions. You did that this year, and I thought this wasa big step. Even with NTN’s large increase in production
resulting from the increased awareness of energy
conservation around the world, your strong will to
decouple the CO2 emissions with the increased
production is apparent.
I have some additional suggestions for you to stepup your action.
1. I encourage you to think of CSR management not justin terms of risk, compliance, and governance – that is,
not harming society – but also in proactively creating
value for society and encouraging positive
contributions from your employees.
2. Generally, you have a lot of reporting of your systems
and specific initiatives. However, take for example,
your employee diversity or your environmental
management systems – you should express why
these are important to you and have a company
stance that expresses what you want to achieve withthese initiatives. If a company starts to think justabout what’s on the surface, the reason for these
initiatives comes across as “we’re doing it because
everyone is doing it” or “we’re doing it because it’sright,” and it is truly a lost opportunity.
3. Initiatives such as opening up the external
consultation desk to suppliers are excellent, but I
encourage you not just to explain the system ingeneral terms, but also to report your performance, a
self-evaluation of the company, and your policies
going forward.
4. I encourage you to use this report not only to devise
targets, introduce the initiatives to achieve the target,

Junko Edahiro

and report on the results, but also to talk about
initiatives to follow in order to repeat the PDCA cycle.
For example, what target do you have for modal shift
in the future?
5. I hope for more in terms of vision and long-termtargets related to your global warming measures.
Your current target, which is to achieve a 10%
reduction over fiscal 2007 by 2010, should serve as a
medium-term target underpinning your vision andlong-term targets.
6. Your 99% product container recovery rate and yourcontribution to recycling in your own industry andothers in the form of the grinding swarf briquetting
machine are examples of some of the superb
initiatives you have.
But what kind of company is NTN trying to becomewith these various initiatives? Japan’s population isshrinking, and your current primary customers in theautomobile industry are changing; what kind of role
do you seek to fill? I hope that you are able to dosome long-term planning for these scenarios andcome up with a report that explains that yourfundamental activities do deal with change.
7. In order to do this, I encourage you to try co-creative
communication with your stakeholders includingNGOs. Changing a company requires fresh outsideideas.
I look forward to seeing your changes and progress.

Junko Edahiro
Environmental journalist, translator, Chairperson of Change Agent Inc.,
Representative for E’s Inc., and the Co-Chief Executive of Japan for
Sustainability, a Japanese NGO.
She has a Master’s degree in Educational Psychology from the
University of Tokyo. Her career is multi-faceted and is focused on theenvironment. In addition to heading two companies as anenvironmental journalist, she is also an author, speaker, translator, andruns an environmental NGO.
She has made waves by informing people and connecting them toeach other while also researching systems to change behaviors.
Her numerous books include “Anything Is Possible If You Wake Up at
2 A.M.,” “What I can Do for the Earth,” “How to Fix the Earth,” and“Escaping the Energy Crisis.” Her translations include “AnInconvenient Truth,” “The Limits to Growth,” and “CO2 Diet.”

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Inquiries for further information about this CSR report

Corporate Social Responsibility Department /Environmental Management Department
1-3-17 Kyomachibori, Nishi-ku, Osaka, 550-0003 Japan
Tel: 81-6-6449-3561
Fax: 81-6-6443-1578
E-mail: csr_report@osa.ntn.co.jp

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